Zikhulise Cleaning Maintenance & Transport CC v The Chairman of the Investigating Committee of the Construction Industry Development Board

The appellant was a close corporation registered as a contractor under the Construction Industry Development Board Act 38 of 2000. On 25 April 2013, the Board served a notice on the appellant alleging 20 charges of contraventions of the Act, Regulations, or Code of Conduct. An investigating committee was appointed to conduct an inquiry under regulation 29. The charges included: (1-2) submitting invalid/false tax clearance certificates to the Board; (3-5) submitting deficient or incorrect financial statements to the Board; (6-11) submitting false documentation about qualified professionals to the Board; (12) submitting false information about construction works to the Board; (13-17) failing to disclose a fraud conviction of a person involved with the appellant to the Board; (18-20) failing to disclose the same criminal conviction in questionnaires submitted to the KwaZulu-Natal Department of Public Works. The appellant objected at the outset of the inquiry, arguing the charges did not disclose any offence under the Code and were jurisdictionally flawed. The Committee dismissed the objections. The appellant applied for review in the High Court, which dismissed the application. The appellant appealed to the Supreme Court of Appeal with leave.

• Whether the conduct alleged in charges 1-17 constituted breaches of the Code of Conduct published under section 5(4) of the Construction Industry Development Board Act
• Whether the Code of Conduct governs relationships between contractors and the Board, or only between participants in construction procurement processes
• Whether the Board complied with the mandatory investigatory procedures in regulation 28 before convening an inquiry under regulation 29
• Whether substantial compliance with regulation 28 was sufficient to validate the inquiry

The appeal succeeded with costs, including costs of two counsel. The order of the High Court was set aside and substituted with an order upholding the review application with costs including two counsel, and setting aside the Committee's order of 24 July 2014, replacing it with "The charges against the applicant are dismissed."

The binding legal principles established are: (1) The Code of Conduct published under s 5(4) of the Construction Industry Development Board Act 38 of 2000 applies only to construction-related procurement and participants in the procurement process, as expressly provided in regulation 27A. It does not govern relations between contractors and the Board. (2) An inquiry under regulation 29 may only be convened "for the purposes of enforcing the [Code]" into "any breach of the [Code]" (s 29(1)). Conduct that does not constitute a breach of the Code falls outside the jurisdiction of such an inquiry. (3) The investigatory procedures prescribed in regulation 28 are mandatory prerequisites to a valid inquiry under regulation 29. These require: appointment of an investigating officer by the Board; verification of jurisdiction and investigation by that officer; submission of a report by the investigating officer to the Board containing evidence, conclusions and recommendations; and a decision by the Board under reg 28(9) that sufficient grounds exist before convening an inquiry. (4) Complete failure to comply with these procedures cannot be saved by the doctrine of substantial compliance. Where mandatory statutory procedures designed to ensure proper investigation have not been followed at all, the resulting inquiry fails on grounds of legality.

The court noted that the High Court judge's failure to address all grounds of review raised by the applicant "cuts across the appellant's constitutional rights of access to the courts" as recognized in Strategic Liquor Services v Mvumbi NO & others 2010 (2) SA 92 (CC), though this defect could be cured by the appeal court considering those grounds. The court also observed (without deciding definitively) that charges 18-20, relating to questionnaires submitted to a government department as employer, might potentially fall within procurement processes and thus within the Code's ambit, unlike charges 1-17. The court specifically stated it expressed "no views" on whether the alleged conduct, if established, might constitute offences under the Act or Regulations (as distinct from breaches of the Code). The court remarked that it remained "a mystery" why the High Court judge failed to deal with certain grounds of review, noting she "avoided the issue" in her judgment on the leave to appeal application by stating she had dealt with "as much as that which was relevant."

This case clarifies the scope and application of the Code of Conduct under the Construction Industry Development Board Act. It establishes that: (1) The Code governs only relations between participants in construction procurement processes, not relations between contractors and the Board itself (which are governed by the Act and Regulations). (2) Regulatory inquiries under reg 29 are limited to enforcing the Code and investigating breaches thereof; conduct falling outside the Code cannot be subject to such inquiries. (3) The mandatory investigatory procedures in regulation 28 are prerequisites to a valid reg 29 inquiry and cannot be bypassed. The doctrine of substantial compliance does not apply where there has been complete non-compliance with procedural requirements designed to ensure proper investigation before charges are laid. The case reinforces administrative law principles requiring strict compliance with statutory procedures, particularly where those procedures serve to protect fairness and ensure proper basis for disciplinary proceedings. It also demonstrates the principle that courts must address all grounds of review raised by applicants.