Caledon River Properties (Pty) Ltd t/a Magwa Construction and Another v Special Investigating Unit and Another

During the COVID-19 national state of disaster declared in March 2020, the Department of Public Works and Infrastructure appointed Caledon River Properties (Pty) Ltd t/a Magwa Construction and Profteam CC to construct a 40 km border fence at the Beitbridge Border Post. The appointment occurred without a competitive procurement process, purportedly as an emergency variation of an existing contract. The applicants received substantial advance payments (about 60% of the contract value) before meaningful performance. The Special Investigating Unit challenged the legality of the contracts. The applicants conceded that the contracts were unconstitutional and invalid due to non-compliance with section 217 of the Constitution and Treasury Regulations. The dispute ultimately concerned whether, despite the invalidity, the applicants were entitled to retain profit under a just and equitable remedy.

The application for reconsideration of the refusal of special leave to appeal was dismissed, and the applicants were ordered to pay the first respondent’s costs, including the costs of two counsel.

This case reinforces the approach to just and equitable remedies following unconstitutional public procurement, confirming that contractors who are not blameless are generally not entitled to retain profits from invalid contracts. It affirms the 'no profit, no loss' principle as a common, though not rigid, remedial outcome and clarifies the limited scope for appellate interference in discretionary remedies under section 172(1)(b) of the Constitution.