MEC for the Department of Public Works, Eastern Cape and Another v Ikamva Architects CC

In September 2003, the Eastern Cape Department of Public Works (the Department) appointed Ikamva Architects CC (Ikamva) as consulting architects for the Frere Hospital Upgrade Project. In 2007, the Department purported to cancel the contract on the basis that it was unlawfully procured in contravention of section 217 of the Constitution and procurement legislation. Ikamva accepted the repudiation, cancelled the contract, and sued for damages. The Departments defended the action pleading invalidity of the contract. Following the Departments' persistent failure to comply with discovery orders, their defences were struck out. On 1 December 2015, Malusi AJ granted default judgment in favour of Ikamva for R41,031,279.58. The Departments' applications for leave to appeal, rescission of the default judgment, and further appeals to the full court, SCA and Constitutional Court were all refused. In September 2019, the Departments launched a self-review application seeking to review and set aside the decisions to appoint Ikamva and conclude the contract, to have the contract declared void ab initio, and critically, to declare that Ikamva was entitled to no further payments under the contract or in terms of the default judgment.

• Whether a court may, in terms of section 172(1)(b) of the Constitution, make an order preventing execution of a valid, binding and enforceable default judgment on the basis that the underlying contract was unconstitutionally procured
• Whether such an order would be 'just and equitable' under section 172(1)(b) of the Constitution
• The proper interpretation and scope of remedial powers under section 172(1)(b) of the Constitution
• The constitutional principle of the enforceability of court orders under section 165(5) of the Constitution and its relationship to the rule of law

The application for condonation for late filing was granted with costs against the applicants including costs of two counsel. The application for leave to appeal was dismissed with costs, including costs of two counsel where so employed.

The discretion conferred on courts by section 172(1)(b) of the Constitution to make 'any order that is just and equitable' following a declaration of constitutional invalidity does not extend to making orders that would prevent the execution of a valid, binding, and enforceable court judgment that is not susceptible to being set aside. Such an order cannot be just and equitable because: (1) it would violate section 165(5) of the Constitution which requires that court orders bind all persons and organs of state; (2) it would undermine the rule of law, a foundational constitutional value; (3) it would compromise the dignity and authority of courts; (4) court orders can only be set aside through legally cognizable processes such as rescission or appeal, not through discretionary remedial orders; and (5) the rule of law requires finality in litigation and public trust in the enforceability of court orders. The principle established in Bengwenyama that 'the rule of law must never be relinquished' in determining just and equitable remedies under section 172(1)(b) precludes orders that would render court judgments nugatory.

The Court made several obiter observations: (1) It assumed without deciding that the Departments might have prospects of success in establishing that the procurement decisions were unconstitutional, that delay would not non-suit them, that the issue was not res judicata, and that a declaration of invalidity and ab initio voidness of the contract might be granted. (2) The Court noted that cases where repayment orders were made under section 172(1)(b) (such as in Mining Qualifications Authority v IFU Training Institute, Eskom v McKinsey/Trillian, and Corruption Watch regarding Cash Paymaster Services) were distinguishable because none involved an extant court order in favour of the other party. (3) The Court observed that the Department's concession that the default judgment was valid and binding was properly made and that any contention otherwise had been expressly abandoned. (4) The Court noted the long history of procedural failures and non-compliance by the Departments throughout the litigation. (5) The Court observed that the matter raised a 'novel point' regarding whether section 172(1)(b) could be used to circumvent a valid court order.

This judgment establishes important principles regarding the limits of remedial discretion under section 172(1)(b) of the Constitution. It confirms that the wide discretion to make 'just and equitable' orders following a declaration of constitutional invalidity does not extend to orders that would undermine the enforceability of valid and binding court judgments. The case reinforces the fundamental constitutional principle under section 165(5) that court orders must be obeyed and can only be set aside through recognized legal processes (rescission or appeal), not circumvented through collateral constitutional remedies. It underscores that the rule of law requires finality in litigation and that the authority and dignity of courts depends on the enforceability of their orders. The judgment is particularly significant in the context of government litigants seeking to avoid the consequences of court orders through constitutional litigation after exhausting all other remedies. It establishes that section 172(1)(b) cannot be used as a backdoor mechanism to achieve what could not be achieved through proper channels for challenging court orders.