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IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION, MAHIKENG

CASE NO.:UM112/2020

In the matter between:

LAVELLE VERE N.O                                                      1^ST APPLICANT

LERATO SEEPE N.O                                                      2^ND APPLICANT

TERRANCE MATHE N.O                                                3^RD APPLICANT

CONSTANCE MOLOSIWA N.O                                      4^TH APPLICANT

COLONEL SHUNMUGAM REDDY N.O                         5^TH APPLICANT

WILLIE ISAAC REETSANG N.O                                    6^TH APPLICANT

LAVELLE VERE                                                              7^TH APPLICANT

LERATO SEEPE                                                              8^TH APPLICANT

TERRANCE MATHE                                                        9^TH APPLICANT

CONSTANCE MOLOSIWA                                              10^TH APPLICANT

COLONEL SHUNMUGAM REDDY                                 11^TH APPLICANT

WILLIE ISAAC REETSANG                                            12^TH APPLICANT

And

THE MEC FOR DEPARTMENT OF ECONOMIC         1^ST RESPONDENT

DEVELOPMENT,  ENVIRONMENT, CONSERVATION

AND TOURISM, NORTH WEST PROVINCE

MEC FOR FINANCE, ECONOMY AND                      2^ND RESPONDENT

ENTERPRISE DEVELOPMENT

HEAD OF DEPARTMENT, DEPARTMENT OF           3^RD RESPONDENT

FINANCE FOR THE NORTH WEST PROVINCIAL

GOVERNMENT

THE PREMIER OF THE NORTH WEST                       4^TH RESPONDENT

PROVINCE

GOBODO FORENSICS AND INVESTIGATIVE            5^TH RESPONDENT

ACCOUNTING (PTY) LTD

And

CASE NO: UM145/2020

In the matter between:

LAVELLE VERE                                                             1^ST APPLICANT

LERATO SEEPE                                                             2^ND APPLICANT

TERRANCE MATHE                                                       3^RD APPLICANT

COLONEL SHUNMUGAM REDDY                                4^TH APPLICANT

WILLIE ISAAC REETSANG                                           5^TH APPLICANT

And

THE MEC FOR DEPARTMENT OF ECONOMIC         1^ST RESPONDENT

DEVELOPMENT, ENVIRONMENT, CONSERVATION

AND TOURISM, NORTH WEST PROVINCE

THE PREMIER OF THE NORTH WEST                       2^ND RESPONDENT

PROVINCE

GOBODO FORENSICS AND INVESTIGATIVE            3^RD RESPONDENT

ACCOUNTING (PTY) LTD

OPPOSED MOTION  

GURA J

DATE OF HEARING                                 :          10 DECEMBER 2020

DATE OF JUDGMENT                              :          19 FEBRUARY 2021

FOR 1^ST APPLICANT               :          ADV A. KATZ SC with

                                                                 ADV K. PERUMALSALMY

FOR 2^ND – 4^TH APPLICANT        :          ADV M.H MASILO with

                                                                  ADV K. PERUMALSALMY

FOR 1^ST – 2^ND RESPONDENT     :          ADV M.S MONENE with

                                                                  ADV K.C MALATJI            

JUDGMENT

GURA J.

Introduction

[1]        The first application (“the main review application”) was launched on 30 June 2020 under case number UM112/2020 in this court. In this application, the applicants sought the following relief:

            1.1       Reviewing and setting aside, and declaring unconstitutional and invalid the decision (“the mandate decision”) by the Head of Department for the Department of  Finance in the North West Provincial Government to appoint Gobodo Forensics and Investigative Accounting (Pty) Ltd (“Gobodo”) to conduct a forensic investigation into the North West Gambling Board (“the Board”);

            1.2       Reviewing and setting aside, and declaring unconstitutional and invalid the Report of the North West Provincial Government dated 23 December 2019 as prepared by Gobodo;

            1.3       Reviewing and setting aside, and declaring unconstitutional and invalid the decision of the MEC for Economic Development, Environment, Conservation and Tourism (“the MEC”), relying on the Report to take steps to invoke sections 7 (2) and 8 of the North West Gambling Act 2 of 2001 (“the Act”) to remove the applicants from the Board.

 [2]       The second application was launched one month later, on 30 July 2020 under case number UM145/2020 also in this court. This application was launched because the MEC, despite the pending main review application, invoked sections 7 (2) and 8 of the Act on 28 July 2020 and removed the applicants as members of the Board. The application was brought in two parts:

            2.1 Part A was brought on an urgent basis and was heard on 6 August 2020. In it, the applicants sought orders suspending the decision taken by the MEC to terminate their membership of the Board. The applicants also sought to interdict and restrain the MEC from appointing new members to the Board pending the determination of Part B;

            2.2 In Part B, the applicants sought to review and set aside and declare unconstitutional and invalid the MEC’s termination decision.

[3]        On 7 August 2020, the Court issued an order whereby the MEC was interdicted and restrained from appointing new members of the Board until such time that the Part B of the Review Application had been finalized. It will be noted that in the said court order, the Court refrained from suspending the MEC’s decision to terminate the Board members’ membership. The two cases (UM112/2020 and UM145/2020) were heard together because the facts and issues in both cases overlapped.  

Factual background

[4]        The facts of both the main review application and the Part B review application emanate from a decision taken in 2019 to appoint Gobodo to conduct an investigation into the Board. On 11 March 2019, the Premier of North West Province wrote to the MEC of Finance and directed her to urgently “conduct a comprehensive forensic audit by utilizing one of the forensic auditors in the panel”. A week later, on 22 March 2019, Gobodo received a mandate from the Head of Finance in the North West Provincial Government to conduct an investigation into alleged irregularities of the Board.

[5]        Shortly after Gobodo had received this mandate, a meeting was held by the Board and Gobodo. In this meeting, Gobodo informed the Board that the investigation would last between two and three months. The applicants undertook to provide their full cooperation with Gobodo during this investigation. Interviews with members of the Board took place on 4 and 5 June 2019. In it, Gobodo asked questions about appointments of the applicants to the Board more than a year earlier on 22 and 23 May 2018 by the erstwhile MEC. Gobodo’s questions demonstrated a concern that the erstwhile MEC appointed applicants to the Board despite there being objections thereto. From these interviews, it appeared that Gobodo was only concerned about the appointments of the applicants to the Board and nothing else.

[6]         It was explained to Gobodo that the erstwhile MEC had addressed the individual complaints with members of the Board by calling them in to discuss the objections. After discussing the objections, the erstwhile MEC found that the objections were without merit and appointed the applicants to the Board. The interviews conducted on 4 and 5 June 2019 only concerned the appointment of the applicants to the Board. It did not concern any other allegations. It was also the only set of interviews that concerned all the applicants. Thereafter, only two other individual interviews were conducted:

            6.1 The first interview was with the first applicant who was the Chairperson of the Board. In this interview, he was questioned about a R300 000 payment to Bokone Bophirima Craft and Design. The first applicant explained that there was nothing untoward about this payment and offered to provide documentation evidencing this. The first applicant was not questioned again about this, and fairly assumed after providing his full, complete and honest cooperation with Gobodo that this was the end of the matter.

            6.2       The second interview was conducted with the second applicant. This interview only concerned her appointment to the Board and whether she took the oath of office as required. The second applicant confirmed that she did so in the presence of the other applicants who took their oath on 22 May 2018.

[7]        For almost six months, nothing further was heard about Gobodo’s investigations. The applicants assumed that the investigations were over, and nothing had come out of it in light of the assistance and clarification that they provided Gobodo with.  

[8]        On 14 November 2019, the applicants, much to their surprise, received a letter from the MEC containing serious allegations of misconduct against members of the Board. They were informed that they had 14 days to provide the MEC with reasons why they should not be removed from the Board. Attached to the letter was an “interim Report for discussion”. On 22 November 2019, the applicants responded to the MEC’s letter. In their response they pointed out that the “interim Report for discussion” was mired with erroneous allegations and was premised on fundamentally inaccurate information.

[9]        In particular, the applicants pointed out that:

            9.1       They were not provided with an adequate opportunity to address the allegations contained in the interim Report.   Aside from the two interviews conducted by Gobodo, their input was not sought in respect of the allegations contained in the Report. At no stage were the applicants questioned about the allegations of misconduct and the lodging of irregular and fraudulent claims. The Report was therefore prepared in a procedurally irrational and unfair manner;

            9.2       The Report was factually incorrect, and the allegations of misconduct were erroneous. Gobodo relied on outdated and irrelevant policy documents in determining whether the applicants lodged irregular claims; 

            9.3       Gobodo’s failure to consult with and seek the input of members of the Board resulted in the erroneous allegations and considerations of irrelevant and inapplicable policy documents by Gobodo.

[10]      Noting further was heard about these representations. The applicants again assumed that their representations had clarified all the erroneous misconceptions that Gobodo had, and that this was the end of the investigation. On 27 May 2020, more than six months after making representations to the MEC, the applicants received another letter from the MEC. This time, the MEC requested the applicants to provide, within seven days, the reasons why they should not be removed from the Board. Accompanying this letter was a copy of the final Gobodo Report dated 23 December 2019.

[11]      The applicants’ attorneys responded to this letter on 31 May 2019 requesting that the MEC provide the applicants with the full Report including all the exhibits thereto as the Report provided did not contain any of the exhibits upon which Gobodo relied for its findings. The MEC undertook to provide the exhibits and granted the applicants a twenty days extension to respond to her letter dated 27 May 2020.

[12]      On 30 June 2020, the applicants launched the main review application. They did so because it was clear that the MEC was going to remove them regardless of their representations. It became clear that the MEC’s decision was politically motivated and that the merits of the representations had not, and would not, influence her decision. It is unclear why the MEC sat on the final Gobodo report for nearly six months before asking the applicants to make representations. It is also unclear why the MEC deemed it appropriate to require the applicants to respond within seven days to a report consisting of more than 283 pages excluding exhibits.

[13]      After launching the application, the applicants’ attorney wrote to the MEC seeking her undertaking that she would not remove the applicants from the Board until such time that the main review application is decided by a Court. The MEC did not respond to this letter. Despite this request, on 28 July 2020, the MEC decided to remove the applicants as members of the Board notwithstanding and in the face of, pending High Court litigation. The MEC gave the applicants fourteen days from date of the letter to vacate their offices.  

[14]      Following the MEC’s termination decision, the applicants launched an urgent application before this court under case number UM145/2020 in which it sought to suspend the MEC’s termination decision and interdict and restrain the MEC from appointing new members to the Board. This relief was sought pending the determination of Part B of the application, in which the applicants sought to review and set aside the MEC’s termination decision.

[15]      On 6 August 2020, Part A of the application UM145/2020 was heard before Gura J, and judgment was handed down on 7 August 2020. Gura J granted the applicants’ partial relief by interdicting and restraining the MEC from appointing new members to the Board, but did not suspend the MEC’s termination decision pending the determination of Part B. The Board has accordingly remained vacant since 10 August 2020.

Relief in the main review application

[16]      There are only two aspects of the main review application which this court must consider. The third prayer in paragraph 3 of the notice of motion in the main review application no longer falls to be determined in light of the MEC’s termination decision. However, despite the fact that prayer 3 of the notice of motion no longer falls to be determined, it is still necessary to determine the lawfulness of the MEC’s termination decision. This question is presented for determination in the Part B review application. The two aspects of the relief sought in the main review application are:

            16.1    Whether the mandate decision by the Head of Department of Finance was lawful; and

            16.2    Whether the Gobodo Report was prepared in a manner that is lawful, reasonable and procedurally fair. 

LEGALITY OF MANDATE DECISION

[17]      The decision to appoint Gobodo to conduct a forensic investigation into the Board was made by the Head of the Department of Finance in the North West Provincial Government on 22 March 2019. The Head of Department for Finance made the mandate decision after being instructed to do so by the MEC for Finance in the North West Provincial Government. The MEC for Finance issued the instruction to the Head of Department because the Premier, in turn, instructed her to appoint an auditor by “utilizing one of the forensic auditors in the panel.”

[18]      Section 38 of the Public Finance management Act (PFMA)[1] provides that the Head of Department must ensure “effective, efficient and transparent systems of financial control, risk management and internal control”. Section 38 of the PFMA must be read together with the Treasury Regulations. Regulation 3.2.4 of the Treasury Regulations provides:

            “An internal audit function may be partly or wholly contracted to external organisation with specialist audit expertise, provided that its selection is in accordance with the relevant government’s competitive tendering procedures.”  

[19]      The PFMA and the Treasury Regulations are enacted to give effect to section 217 of the Constitution, which provides:

            “When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation contracts for goods and services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective.”

[20]      These constitutional, statutory and regulatory prescripts are mandatory and may not be overlooked by an organ of state such as the North West Provincial Government when contracting the services of a private company such as Gobodo. In AllPay I the Constitutional Court held:

            “[40] Compliance with the requirements for a valid tender process, issued in accordance with the constitutional and legislative  procurement framework, is thus legally required. These requirements are not merely internal prescripts that SASSA may disregard at whim. To hold otherwise would undermine the             demands of equal treatment, transparency and efficiency under the   Constitution. Once a particular administrative process is prescribed   by law, it is subject to the norms of procedural fairness codified in PAJA.”[2]

Conclusion

[21]      Neither the Head of Department, the MEC nor the Premier has given this Court any explanation why the Supply Chain Legislation was not followed in sourcing of services of auditing in the current case. It goes without saying, that if there was any good cause from departing from the prescribed mandatory tendering procedure, the respondents would have said so. I repeat, there is no affidavit before this Court in which any of the respondents attempts to justify the mandate decision. Incidentally even in their heads of argument, the respondents’ Counsel never touched the legality or not of the mandate decision. 

[22]      I am satisfied that the applicants have shown, to the satisfaction of the Court that the mandate decision cannot be allowed to stand since it flies on the face of mandatory supply chain legislation, including the Constitution. Accordingly, the mandate decision falls to be declared unconstitutional, unlawful and invalid.  

THE GOBODO REPORT

[23]      What follows now are the views of the applicants about the Gobodo Report. In addition to Gobodo not having a lawful mandate to conduct a forensic investigation into the Board, the Report that it prepared is also unlawful and invalid. The Constitutional Court has repeatedly emphasized that every stage of a decision-making process, including an investigation stage, must comply with the principle of just administrative action. This means that the applicants were entitled to address the allegations contained in the Report before a final version of the Report was prepared. In investigating this matter, Gobodo failed to comply with the most basic principles of procedural fairness and the audi alteram partem.

[24]      Paragraph 23 of the Gobodo report lists the interviews that Gobodo held in preparing the Report. Notably, despite taking some nine months to complete the Report, Gobodo based all of its findings on only thirteen interviews. The persons interviewed by Gobodo were:

            24.1    Ms. Seipone Mothamme (CFO);

            24.2    Mr Lavelle Vere, Chairperson of the NWGB;

            24.3    Ms. Lerato Seepe, Deputy Chaiperson of the NWGB;

            24.4    Mr Terrance Mathe, NWGB - Board Member;

            24.5    Ms. Nalini Maharaj, NWGB – Board Member;

            24.6    Ms. Constance Molosiwa, NWGB – Board Member;

            24.7    Colonel Shunmugam Reddy, NWGB – Board Member;

            24.8    Mr Willie Isaac Reestang, NWGB – Board Member;

            24.9    Mr Nathan Oliphant, suspended Chief Executive Officer        (NWGB);

            24.10 Mr Jacob Montshioa, Legal Manager – NWGB;

            24.11 Ms. Dudu Makhadu, HR Manager – NWGB;

            24.12 Ms. E Phosiwa, Financial Manager, NWGB;

            24.13 Ms. Segomotso Motlhabane, Corporate Services Manager –   NWGB.

[25]      Notably, various critical individuals do not appear on this list. Such individuals against whom findings were made but who were not provided with any opportunity to respond to the allegations against them include:

            25.1    Fortune Sekgaphane, Former CEO of the Board;

            25.2    Christodoulus Demetriades – Director of Tshufi Gaming;

            25.3    Harry Moshao – Acting CEO of the Board;

            25.4    Mergan Naidoo – CEO of Gold Rush;

            25.5    Ndlela Kunene – HOD of Finance;

            25.6    Prof. TJ Mokgoro – Premier of the North West Province;

            25.7    Nathan Oliphant – CEO of the Board;

            25.8    Wendy Nelson – Former MEC;

            25.9    Individuals representing Vegas Slots and Premier Slots.

[26]      By way of example, many of the allegations in the Report relate to historic events and pertain to alleged misconduct by Mr Fortune Sekgaphane, the former CEO of the Board (who occupied this position until 14 January 2018). Yet Mr Sekgaphane was not interviewed in the preparation of the Report; nor was he offered an opportunity to explain the alleged irregularities that occurred during his term of tenure. Instead, and entirely unfair, the Report draws conclusions based on hypothetical conjecture about what occurred during Mr Sekgaphane’s term of office, and then (in a further leap of logic) seeks to hold the current office-bearers at the Board responsible for events which occurred before they assumed their office.

[27]      The Board is subject to internal audits conducted by independent auditors and external audits by the Auditor-General. None of these auditors had raised any irregularities regarding the conduct of the Board’s finances, appointments, findings or allegations as stated in the Report. Yet, despite the far-reaching findings of financial mismanagement and maladministration in the Report, Gobodo did not see it fit to interview either the Board’s internal or external auditors for explanation regarding the transactions which Gobodo placed in issue. It did not raise questions with the Auditor-General. Instead, and on the basis of deficient and factually inaccurate speculation, it made findings contrary to all of these previous audit reports, and without engaging in any audi alteram partem with the Board’s auditors. On this ground alone, the Report falls to be declared unlawful, reviewed and set aside. In this regard, the Report is procedurally and substantively unfair. On this ground too, the Report falls to be declared unlawful, reviewed and set aside.

[28]      Although Gobodo conducted interviews with the Board in June 2019, these interviews were broad and general and related specifically to the appointment of the Board Members. Specific allegations of misconduct were not posed to them. They were not afforded an opportunity to address the speculations in the Report itself. They were not asked to produce or respond to allegations in any documents which subsequently were annexed as “Exhibits” to the Report. In first applicant’s second interview with Gobodo, he offered to provide details and clarification regarding any further aspects that may be raised by Gobodo, but this offer was declined.

[29]      Moreover, the Report itself is beset by material errors of fact which, had the applicants been provided with an opportunity to respond to, would have been easily rectified. For example, it is alleged that Ms. Seepe did not take the oath or affirmation required by section 5 (11) of the Act before assuming office. This, however, is incorrect. All Board members who took their oath of office on 22 May 2018, witnessed Ms. Seepe take her oath of office and attest to this. Despite this, the drastic step taken in the Report of recommending that Ms. Seepe be removed from office – and on wholly incorrect facts.

[30]      The Report also suggests that members filed excessive and fraudulent claims. This allegation is baseless. In this regard, the Report fails to entirely consider important policy information on claims including:

            30.1    National Treasury’s letter dated 20 March 2018 on “categorization and remuneration of the North West Gambling Board members”;

       30.2         The North West Department of Finance’s letter dated 11 June 2018 on “recommendations for the category and the remuneration level of the Board of the North west Gambling Board”; 

            30.3    The North West Department of Finance’s memorandum dated 11 June 2018 dealing with budget management and delegation of authority;

            30.4    The North West Department of Finance’s letter dated 17 October 2018 on “2018 amended remuneration rates”;

            30.5    National Treasury notice dated 26 September 2018 styled “2018 adjustment of remuneration levels: service benefits packages for office-bearers of certain statutory and other institutions”;

            30.6    Annexure A / Conversion Key/ Schedule, which provides for            categories of amounts to be charged by board members;

            30.7    A schedule dated 1 April 2019 reflecting the applicable rates of different categories and amounts to be claimed and/or paid to the chairperson, vice-chairperson and members of the board;

            30.8    A memorandum received from National Treasury dated 30 August 2019, styled “2019 Remuneration levels: service benefits packages for office-bearers of certain statutory and other institutions”;

            30.9 The applicable North West Gambling Board policy on board members’ remuneration and allowances. That policy is supported by the schedules which reflect what the board members were entitled to.

            All of this information is available but was ignored and not taken into account by Gobodo because, inter alia, the requirements of procedural fairness were not observed.

[31]      Finally, the Report is unlawful and invalid because it is based on material errors of law. In this regard, the Report ought to have had regard to the 2009 Policy on Board Members’ Remuneration and Allowances that was approved on 24 April 2009. A copy of this Policy is annexure “LV9” to the founding affidavit. Had this Policy been properly applied, the Report would have come to a very different conclusion regarding the lawfulness of the Board’s fees and expenses at issue. The 2009 Report was specifically referred to by Jacob Rangwedi Montshioa in his interview with Gobodo but Gobodo failed to take it into account – possibly because it would have undermined many of the subsequent findings in the Report. It is precisely for this reason that the Constitutional Court has repeatedly emphasised the importance of the audi principle – particularly where serious allegations are made against individuals. These examples illustrate that had a procedurally fair investigation process occurred, many of the inaccuracies in the Report as well as the findings of misconduct would not exist.

[32]      But not only was the Report procedurally unfair because it failed to allow them (applicants) to address the allegations contained in it, the Report also failed to consider relevant information and instead considered irrelevant information. It failed to verify the information relied on and made recommendations on questionable documentary evidence. For example, at page 242 of the Gobodo Report, para 12.11.32, the Report records that Gobodo “interviewed officials who want to remain anonymous. According to the anonymous informants, they don’t understand how the settlement of R3.6 million was calculated. Furthermore, there were concerns regarding how the settlement money was to be used. We were further informed that normal levies and penalties are paid into the coffers of the Provincial Treasury. However, settlement monies are kept by the NWGB.”

[33]      These allegations were never put to the first applicant or to other members of the Board. They are entirely false and would have been easily explained if only they (applicants) had been given the opportunity to do so. The R3.6 million relates to the penalty that was imposed on Gold Rush for failing to comply with the licence conditions. This penalty was not “kept by the NWGB”. It was paid over to the Provincial Treasury in line with the relevant legislation and policies. The allegations (or insinuation) that the penalties were “kept by the NWGB” is entirely false. Regrettably, the Report is riddled with these kinds of inaccuracies and speculations which have not been put to persons with knowledge of the facts, and which are not verified.    

[34]      The Gobodo Report itself recognizes these shortcomings. At paragraph 5.2 of the Report, it is stated that:

            “We have not verified the validity or authenticy of the relevant records or documentation subjected to analysis by ourselves. The documentation, unless stated to the contrary, was accepted at face value.”

            The Report goes on to say at paragraph 5.3:

            “Should further documentation and/or information, previously not divulged to us for whatever reason be made available to ourselves, our conclusion and inferences may change, and if considered necessary, a supplementary Report will be issued.”

            To place reliance on the Report in light of these shortcomings would severely prejudice Board members and violate the principles of fairness.

[35]      The Report failed to consider relevant information, such as the policy documents in respect of claims by members of the Board outlined above. And at the same time, considered irrelevant information such as “anonymous information” used to support the conclusion that members of the Board acted unlawfully and fraudulently. For example, the following statements are part of my examples contained in the Report where “anonymous” information was relied on:

         35.1       “We were informed by an employee who wishes to remain anonymous, for fear of victimisation, that the contract of the panel of attorneys came to an end on 31 August 2018 and they were instructed to go on a quotation basis” 

         35.2       “We were anonymously informed that the service providers that were appointed, did not qualify and were not registered on the database.”

            35.3    “ We were informed anonymously that funds were paid to the   company to use the money to pay for Mr Vere’s trucks that had to confiscate illegal gambling machines.  This information is untested and further investigation is needed.”

[36]      In order to comply with the requirements of administrative justice, persons affected by administrative decisions are required to know the case that they have to meet and to be provided with sufficient information to make meaningful representations.  This principle was undermined in the Gobodo Report.

[37]      In addition, Gobodo exceeded their mandate in material respects in conducting its investigation and preparing the Report. For example, the Report considers events that precedes the period of review, and implicates members of the Board for events that precedes their term of office. On this ground too, the Report is irrational and unjustified. The Report notes that Mr Jacob Rangwedi Monthshioa was appointed as a Legal Manager on or about 1 December 2013 and finds that “we could find no evidence that the said position was advertised. We requested information regarding the advertisement of the said position but were not provided with such.

[38]      The Board obviously cannot account for event that precedes their term of office. The current Board took office in 2018, and accordingly cannot account for appointments made in 2013. Similarly, the Report notes that “we question how the funding of R863 661.00 to Bray Ontspanning for a horse racing festival could benefit the wider community”. However, these payments were made in 2015/2016 and 2016/2017, prior to terms of office of the current Board.

[39]      Not only were these considerations irrelevant to the investigation, they also went beyond the terms of reference for the investigation, and consequently prejudiced the current members of the Board who cannot account for events preceding 2018. Paragraph 7.1 of the Report notes that the scope of the investigation exceeds the terms of reference for the investigation:

            “Although the appointment of the Board Members did not form part of our original scope, we deemed it prudent to include such in this Report.”

            These facts illustrate that not only was the investigation procedurally unfair, it was also irrational and unreasonable. For all these reasons, the Report falls to be declared unlawful under section 172 (1)(a) of the Constitution. In addition, the Report falls to be reviewed and set aside under section 172 (1)(b) of the Constitution.

Legal Principles

[40]      The respondents did not file any answering affidavit in opposition to the prayer of “reviewing and setting aside, and declaring unconstitutional and invalid” the Gobodo Report in case number UM112/2020.

[41]      Erasmus: Superior Court Practice, D1-64 says:

            “The requirements for a respondent’s answering affidavit, which deals with the allegations contained in the applicant’s founding affidavit, are the same as for that of the applicant. If the respondent’s affidavit in answer to the applicant’s founding affidavit fails to admit or deny, or confess and avoid, allegations in the applicant’s affidavit, the court will, for the purpose of the application, accept the applicant’s allegations as correct.”

            In casu, the respondents decided not to confront the allegations in the founding affidavit through the answering affidavit. The factual situation therefore is that the applicants’ averments remain unrebutted. In the absence of any valid reason to the contrary, the Court is bound to accept the version of the applicants as it stands in their founding affidavit.

[42]      It is trite law that every stage that affects the decision making process must be procedurally fair. See in this regard Save the Vaal Environment[3], where the Court held:

            “It is settled law that a mere preliminary decision can have serious consequences in particular cases, inter alia, that lays …the necessary foundation for a possible decision…which may have grave results. In such a case the audi rule applies to the consideration of the preliminary decision.”

            Procedural fairness applies equally to a preliminary stage of the decision-making process. To a contrary submission, the Court stated:

            “I do not agree with this argument. The fact that the DG’s approval is but the first step in a multi-stage process does not mean that the audi rule is inapplicable, nor does it mean that an aggrieved party must await a final step before it can take legal action for review [4].”

[43]      In Zondi v MEC[5], the Court recognized that a procedurally fair process is important because it avoids the risk of arbitrary and irrational decision-making.

            “It is a fundamental element of fairness that adverse decisions should not be made without affording the person to be affected by the decision a reasonable opportunity to make representations. A hearing can convert a case that was considered to be open and shut, to be open to some doubt, and a case that was considered to be inexplicable to be fully explained. The reasonable opportunity to make representations can generally be given by ensuring that reasonable steps are taken to bring the fact of the decision-making to the attention of the person to be affected by the decision.”

[44]      As the Constitutional Court recognized in Zondi, the substance will be correct when the correct procedure was followed[6]. It is for this reason that the Constitutional Court has stressed the importance of a procedurally fair process. In AllPay I, it was held that: 

            “It is a long-held principle of our administrative law that the primary focus in scrutinizing administrative action is on the fairness of the process, not the substantive correctness of the outcome[7].”

Analysis by Court

[45]      In terms of paragraph 25 of this judgment, nine officials against whom findings were made were not provided with any opportunity to respond to the allegations against them. This is procedurally unfair.

[46]      Some allegations in the Report do not relate to the current events but historical events. By “current events”, I am referring to incidents which occurred during the term of office of the current Board. The Report alleges some misconduct on Mr Fortune Sekgaphane who was a CEO of the Board until 14 January 2018. Mr Sekgaphane was also not given the opportunity to clear his name, before the final Report was made.

[47]      Members of the Board who were interviewed, to them no specific allegations of misconduct, irregular expenditure and fraudulent claims were raised (against them). Thus they were denied the opportunity to deal with the allegations of malfeasance against them which are part of the Gobodo Report. Gobodo had a duty to disclose these allegations to the specific officials before a final Report could be drawn. Gobodo’s failure as aforesaid, is an affront to the relevant members’ right to be heard, contrary to the principle of audi alteram partem.

[48]      Important policy information was either disregarded by Gobodo or entirely overlooked. Whatever the reason thereof, the result is that Gobodo ended up making incorrect factual findings especially relating to the alleged excessive and or fraudulent claims by Board members. Now here, Gobodo’s failure to observe procedural fairness worked against it (Gobodo). Had it consulted the Board about these claims before the final Report was made, the Board would have brought the relevant policy documents to the attention of investigators. For the sake of clarity, these policy documents appear on paragraph 30 of this judgment. Had Gobodo consulted all these instructions, there is a possibility that it would have found differently.

[49]      Not only did Gobodo commit material errors of fact but it also misdirected itself on the correct applicable law. This was a direct result of Gobodo’s  failure to take into account the “2009 Policy on Board Members’ Remuneration and Allowances”. The policy was approved on 24 April 2009. Fortunately for Gobodo, Mr Rangwedi Montshioa, the Legal Manager of the Board, did draw the attention of Gobodo to the policy during the interview.

[50]      Gobodo relied on untested hearsay allegations from people whose identities were not disclosed about the settlement of R3.6 million rand. This was a compelling reason, in conformity with the right to procedural fairness, for Gobodo to test this allegation with members of the Board, who, incidentally, did not hide their identities. For Gobodo to rely on untested allegations from people who did not want to be known, is a tricky horse to ride. The applicants have now given a plausible explanation in their founding affidavit about the said R3.6 million rand. This is the explanation which should have been given to investigators, had Gobodo played open cards with the Board.

[51]      It remains to be seen therefore that Gobodo failed to consider relevant information but it preferred to consider irrelevant information, e.g. to consider information from informers whose allegations cannot be tested in any legal forum. The results is that such information was used against Board members to impute acts of criminality like fraud and dishonesty on some of them. This is going to prejudice these officials. Apart from procedural fairness about the manner in which the Report was prepared; it (Report) also falls to be reviewed and set aside in terms of section 6 (2)(iii) of PAJA[8] because the Report considers irrelevant materials and fails to consider relevant information. The Report makes a finding on the questionable appointment of Mr Montshioa in 2013 when the applicants were not members of the Board.

[52]      Finally the Gobodo report is a product of an unlawful act by the Head of Department, disregarding Supply Chain mandatory legislation. Due to reasons aforesaid, the Gobodo Report cannot survive legal and constitutional muster and has to be set aside.

            REVIEW AND DECLARATORY RELIEF

[53]      In Part B of this application, the applicants seek an order reviewing and setting aside the MEC’s decision of 28 July 2020 to terminate the applicants’ membership of the Board. I will first set out the applicants’ version and thereafter the defence of the respondents.

Applicant’s version

[54]      The MEC’s termination decision of 28 July 2020 falls to be reviewed and set aside because it is unlawful, unreasonable and procedurally unfair. Although the MEC afforded the applicants an opportunity to respond to the Report, it is clear that this was a mere formality and that the decision taken to remove the applicants from the Board was a foregone conclusion. Had the MEC meaningfully engaged with the applicants’ representations dated 22 November 2019, which is attached to the founding affidavit as annexure “LV4” in the main review application, as well as to the founding affidavit in the review application, the MEC would not have taken the decision to terminate their (applicants’) membership of the Board.

[55]      It is simply not possible that the MEC could have exercised her discretion to invoke section 7 (2) and 8 of the Act if she had regard to applicants’ representation dated 22 November 2019, their founding affidavit in the review application launched on 30 June 2020 and the letter from their attorneys dated 1 July 2020 seeking an undertaking that the MEC would not invoke section 7 (2) and 8 of the Act until such a time that the review application is decided. In particular, the MEC could not have reached the decision to invoke sections 7(2) and 8 of the Act, if she had regard to the fact, inter alia, that:

            55. 1   During Gobodo’s investigations, it did not address specific allegations to members of the Board when conducting interviews. They were also not given an opportunity to explain the documents, and their relevant context, relied upon by Gobodo when making findings of irregularities. This flouts the importance of audi alteram partem.

            55.2    They were not given an opportunity to explain claimed expenses in light of the prevailing policy and memoranda from National Treasury and the North West Department of Finance. It is clear that Gobodo relied upon incorrect and outdated documents in reaching its findings.

            55.3    Gobodo made findings and reached conclusions based n “interviewed officials who want to remain anonymous”.  Not only were the applicants not given an opportunity to respond to these anonymous allegations, it is contrary to the principles of natural justice for Gobodo to consider, and make findings on “anonymous complaints”.

            55.4    Gobodo went beyond the scope of its mandate and made findings on events relating to previous Boards for which they could not answer. It is manifestly unfair to hold the applicants responsible for conduct of previous Boards.

[56]      Moreover, it is procedurally unfair and unlawful for the MEC to remove all the members of the Board summarily when the allegations against members of the Board are distinct. In terms of section 8 of the Act, the MEC may only remove a member of the Board:

            (a)       On account of misconduct, or incapacity to perform the duties of his or her office efficiently; or

            (b)       by reason of his or her absence from three consecutive meetings of the Board without good cause shown.

            (c)        If he or she has failed to disclose an interest in terms of section 10 (2)(a) or attended or participated in proceedings of the Board while having an interest contemplated in section 10 (1).

[57]      Since the MEC relied on section 8 of the Act to remove members of the Board, it is incumbent on her to show why individual members of the Board fall to be removed under section 8 of the Act. It is submitted that the MEC did not apply her mind to the removal of individual members of the Board, but instead, with a broad brush, summarily dissolved the Board. Accordingly, the MEC is invited to place evidence before this Court showing that she could have reasonably exercised her discretion to invoke sections 7 (2) and 8 of the Act, when she was aware that the accuracy, validity and lawfulness of the Report is impugned in the review application before this Court. Additionally, the MEC is called upon to place evidence before this Court showing that she applied her mind to the allegations against every individual on the Board before taking the decision to remove the applicants from the Board, and the reasons for such removal.

The respondents’ version

[58]      Although, it is unclear from the applicants’ submissions as to what extent and in what respects the initial application should be factored into this application, the respondents nonetheless wish to point out the following:

            58.1    The mandate decision to appoint Gobodo Forensic and Investigative was lawful, valid and regular as it is based on sourcing service providers from an established panel. In that regard, the rule 53 record are instructive.

            58.2    The Gobodo Report itself cannot be faulted for any irregularity nor unlawfulness. In fact, in case number Um112/2020, the applicants implored on the court to not even read it as they sought to challenge it only on procedural grounds. Paragraph 60 of the founding affidavit in that initial application is most   vocal on this score. Curiously in the supplementary affidavit, the applicants feign lack of knowledge or access to the Report, which they expressly and clearly already had prior to their earlier application and go on to raise nothing on the substance of its findings.

            58.3    The inputs and views of the applicants were expressly sourced by the MEC and were reflected on in both the notice of intention to terminate the applicants’ Board membership and the consequent termination decision.

            58.4    By the applicants’ own version they were interviewed by Gobodo as part of the compilation of the Report. Their hiccup of seeking to have been given the leeway of determining which questions they ought to have been asked or to have a say on how many times they were supposed to have been interviewed is curious and amounts to decrying that they were not allowed to run the show and investigate themselves.

[59]      The MEC’s termination decision of 28 July 2020 is lawful, reasonable and procedurally fair. The decision was procedurally fair in that the applicants were provided with two opportunities to advance their side of the story. Firstly, the applicants were interviewed by Gobodo’s officials during the investigation. Secondly, they were given adequate notice and an opportunity to make representations regarding the MEC’s decision to remove them from the Board. In their representations, the applicants opted to make sweeping generalizations of the allegations of misconduct against them instead of addressing the irregularities revealed in the Report.

[60]      The Report also demonstrated that the applicants were given an adequate opportunity during the interviews to refute specific allegations levelled against them. For instance, the deponent Mr Lavelle Vere was confronted with documents indicating that he was paid an amount of R370 789.00 for sitting and preparation fees for the 2018/2019 financial year. Although he admits that the claim was in his name and the money was paid into his account, he insists that he did not submit the claims.

[61]      The MEC afforded the applicants an opportunity to make representations in good faith. The purpose of which was to afford them an opportunity to dispute the allegations against them and provide the MEC with reasons why they should not be removed from the Board. The applicants’ allegations that the MEC’s decision to remove them from the Board was a “forgone conclusion” is unsubstantiated and highly speculative and must be rejected.

[62]      Upon considering the applicants’ representations of 22 November 2019, the MEC could not find adequate reasons why the applicants should not be removed from the Board. The representations had not adequately challenged the findings of the forensic audit report by Gobodo, neither did they provide reasons and/or in the alternative adequate reasons why they should not be removed from the Board despite the conclusions of impropriety raised in the forensic audit report, as a result of which the MEC had lost confidence in their capabilities to carry out the Board’s functions. The MEC also considered the applicants’ founding affidavit and obtained legal advice as to whether, there is anything in the answering affidavit that prevents her from removing the Board and the answer was in the negative. The applicants have also not given the MEC adequate reasons why she should not remove them from the Board pursuant to the findings of impropriety and maladministration by the Board.

[63]      The MEC has considered the applicants’ representations, letter from the attorney and the founding affidavit and could not find adequate reasons not to remove the applicants from the Board. Pursuant to the findings of impropriety and mismanagement which demonstrate the Board members’ incapacity to carry out their functions, the MEC was justified in invoking section 7 (2) and 8 of the North West Gambling Board Act 2 of 2001.

[64]      The applicants are also conflating the issues. In paragraph 63 to 65 of the applicants’ founding affidavit under case number UM112/2020 they said that the decision impugned in this case amounts to an administrative action, however in paragraph 64.1 and 64.3 of Part B of the founding affidavit in this case, they rely on the common law principles of audi alteram partem and natural justice to make a case for procedural unfairness. The Supreme Court of Appeal in the case of State Information Technology Agency Soc v Gijima Holdings (641/2015) [2016] ZASCA 143 at paragraph 33 held that:

            “PAJA was enacted to give effect to the right to lawful administrative action in s 33 of the Constitution. And, as it was intended to be, and in substance is, a codification of the rights in s 33, so the Constitutional Court said in New Clicks, it was not possible for litigants to go behind it, by relying either directly on s 33(1) or on common law, when reviewing unlawful administrative actions as this would undermine the very purpose for which it was enacted.” 

[65]      Therefore the applicants cannot seek to bypass the Promotion of Administrative Justice Act, 3 of 2000 (hereinafter referred to as PAJA) by seeking to invoke common law grounds to get their relief. The applicants must have established the grounds in terms of section 3 and 6 of PAJA without seeking for protection under common law nor the principle of legality.

[66]      The applicants’ contention that they are held liable for the conduct of the previous Board is denied. The Board members were removed pursuant to findings of impropriety during their term. In investigating the actions of the previous Board, Gobodo had not gone beyond the scope of its mandate because it could investigate ‘any other matters that came to its attention during the scope of its investigation.’

[67]      The decision was reasonable in that, although there were allegations levelled against the members of the Board individually, such as exorbitant claims of meeting fees, travelling claims and subsistence claims accrued and paid to them, failed to give compelling and cogent reasons warranting such payments. The Report made also serious findings of impropriety regarding the members of the Board collectively, including the departure from good governance principle such as the appointment of unqualified people for a position, disregarding the recruitment to consult with the Acting CEO in a decision which required her to be consulted, appointing people without police clearance and others. This demonstrates that the Board was incapable of carrying out its functions diligently.

[68]      The allegations that the MEC had not applied her mind regarding the removal of individual members is unfounded. The MEC considered both the findings of impropriety against the individual members and against the Board members collectively in order to come to her decision. Therefore, the decision to remove the members of the Board was lawful in that the MEC acted in terms of section 7 (2) read with section 8 of the North West Gambling Act. The Act empowered the MEC to remove any member of the Board, inter alia, on account of misconduct, or incapacity to perform the duties of his or her office efficiently. Therefore, the MEC exercised her powers within the confines of the empowering legislation.

[69]      The rule 53 record which includes the Gobodo Report with its damning findings against the applicants, substrates the validity and lawfulness of the MEC’s decision to terminate their Board membership. The applicants who were found to be on the wrong side of the law by the Report were expectedly not singing praises of the Report and while their representations were considered they were not adequate nor legally cogent to dissuade the MEC from exercising her powers in terms of the law. Mere unhappiness with the state organ decision by those implicated in wrongdoing cannot and should not be seen, as evidently seen by the applicants, as sufficient to divest state organs of their statutory powers, even temporarily.

[70]      The respondents deny the suggestion by the applicants that because of the incomplete rule 53 record, the decision of the MEC to remove the applicants as members of the Board was unreasonable, procedurally unfair and unlawful. The respondents deny the insinuation by the applicants that the exhibits contained in the rule 53 record were the only documents considered by the MEC in coming to her decision to remove the members from the Board. The applicants also know that the MEC considered the Gobodo forensic report in coming to her decision and this case can be seen from the letter from the State Attorney to the applicants’ attorneys on 11 June 2020 wherein the Report was attached and the applicants were given twenty days to make their representations regarding the findings of the Report. The letter was attached and marked annexure IM1 to the answering affidavit.   

[71]      The MEC intended to request for condonation from the court in order to include the following documents in the rule 53 record for the assistance of the court:

            71.1    The Gobodo Report.

            71.2    The applicants’ representations of 22 November 2019. However, this document is also attached to the respondents’ first answering papers in this matter.

            71.3    The correspondence addressed by the applicants’ attorneys to the MEC on 1 July 2020.

            71.4    The so-called main review application filed under case number UM112/2020 which is now subsidiary to this application.

[72]      As already stated, the MEC considered the implications of allegations and findings of impropriety on the members of the Board both individually and collectively in coming to her decision to remove them from the Board and therefore, the allegation that some members of the Board are implicated while others are not is unfounded. Moreover, in making such allegations, the applicants have failed to identify for the benefit of the court, which members are not implicated at all and thus the court cannot reasonably come to their assistance based on this unsubstantiated allegation. The applicants have failed to establish the grounds that the decision taken by the MEC to remove them from the Board is not reasonable, procedurally fair and lawful or constitutional and neither does the rule 53 record filed by the MEC assist them.

Preliminary issue

[73]      In their replying affidavit the applicants raised a point that the answering affidavit deposed to by Mr Itumeleng Benedict Mosiapoa constituted inadmissible evidence in as much as the MEC, at that stage, had not filed a confirmatory affidavit. Subsequent to that, the MEC lodged an application for condonation to file the confirmatory affidavit. Before dealing with the merits of the main review application, let me pay attention to this latest application for condonation. This application is opposed by the applicants.

[74]      The wide powers of the Court to condone non-compliance with the rules is subject to the requirement, and safeguard, that good cause must be shown by the applicant[9] (for condonation). The applicant should give a satisfactory explanation for the delay. This means that the applicant must at least furnish an explanation of her default sufficiently full to enable the court to understand how it really came about, and to assess her conduct and motives[10]. Every delay has to be accounted for. In Ferris v FirstRand Bank Ltd[11], the Constitutional Court held that lateness is not the only consideration in determining whether an application for condonation may be granted. It held that the test for condonation is whether it is in the interest of justice to grant it and, in this regard, that an applicant’s prospects of success and the importance of the issue to be determined are relevant factors.

[75]      In support of the Rule 27 application for condonation, the MEC’s explanation went along these lines:

            “13. I now turn to address the legal and factual basis for the application. Rule 27 (3) requires that I must show good cause why the Applicants should be condoned. In showing good cause, I am required to provide a reasonable explanation for the failure to file the confirmatory affidavit.

            14.       Before the Applicants challenged the personal knowledge of Mr        Mosiapoa, I had thought it was not necessary for me to confirm the averments in the answering affidavit he has deposed to for the following reasons. Mr Mosiapoa and the legal administration officials were involved in the decision-making process. They assisted me to consider the relevant documents in order to come to a just decision.

            15.       Mr Mosiapoa also assisted me when I was seeking legal advice concerning the Applicants’ first review application and whether it precluded me from taking the then intended decision to remove the Applicants and other members of the Gambling Board. Hence, he included this averment in the answering affidavit, because he has personal knowledge thereof.

            16.       It was only after the Applicants challenged Mr Mosiapoa’s ability to depose to the affidavit that I became aware that I was clearly mistaken in not deposing of the confirmatory affidavit. I had acted    on the basis that Mr Mosiapoa as a Senior Legal Administration Officer for Legal Services who was involved in the decision making process could depose to the affidavit on my behalf.”

[76]      At the beginning of this judgment, I stated that the current application, being Part B, started off with an urgent application, being Part A. The answering affidavit in Part A was deposed to by Ms. Phemelo Jood, a Director, Legal Services in the MEC’s department. She deposed to the affidavit on behalf of the MEC in the same lines as Mr Mosiapoa has done in the current application. There was no confirmatory affidavit filed by or on behalf of the MEC in Part A. The applicants raised the issue of lack of the confirmatory affidavit in their replying affidavit in Part A. Nothing was done to file the MEC’s confirmatory affidavit. That was in August 2020.

[77]      In the main review application (Part B), respondents again did not file the MEC’s confirmatory affidavit to Mr Mosiapoa’s affidavit. In their replying affidavit, the applicants again raised the point of failure to file the MEC’s confirmatory affidavit. This objection (replying affidavit) was served on the respondents’ attorneys on 12 October 2020.

[78]      The confirmatory affidavit, being a very short and simple document, was not filed immediately after 12 October 2020. In the meantime, the applicants filed their heads of argument in preparation for the hearing of the matter which was scheduled for 10 December 2020. It was only on 3 December 2020, that is, four court days towards the day of the hearing of the matter that the MEC filed her application for condonation, accompanied by her confirmatory affidavit. The respondents therefore took more than six weeks, after receiving the replying affidavit, before they could file the MEC’s confirmatory affidavit.

[79]      The whole purpose why I set out in full the history of this matter from August 7, 2020 up to 10 December 2020 is to indicate  that the MEC is not entirely correct to say she was not aware that it was necessary for her to file the confirmatory affidavit in Part B (main review application). The MEC had been aware all along. Again here there is no explanation why it took the respondents more than six weeks to file the application for condonation.

[80]      In my view, there has been a laxity on the part of the respondents and a wanton disregard for court rules relating to time frames. It is trite law that the Court will refuse to grant condonation where there has been a reckless or intentional disregard of the rules of court[12]. In Ramakatsa and Others v Magashule and Others[13], the court held that when a court is adjudicating important constitutional issues, it is imperative that the court does not allow procedural issues to hinder it from adjudicating the case on the merits.

[81]      There is something rather unusual which the MEC has done in her application for condonation to file her confirmatory affidavit. Her affidavit consists of six typed pages plus an annexure which is termed “confirmatory affidavit”. What the MEC has done, under the guise of an application for filing a confirmatory affidavit late, she sneaked in evidence through the back door. She filed another answering affidavit. Amongst others, she dealt with matters which Mr Mosiapoa covered in his affidavit. The MEC even took the bold step of responding to the applicants’ replying affidavit! This is a deplorable procedure which cannot be condoned especially in the absence of an application to file a supplementary answering affidavit. This is a proper case where a litigant has abused her right to ask for condonation for the purpose of filing a mere confirmatory affidavit, which is usually a three or four page document.

[82]      I am aware that I am dealing with a case which involves constitutional issues. However, it is my feeling that this is not the case where the interest of justice demand condonation. Here the respondents have gone out of their way to abuse court process. The MEC failed to give a satisfactory explanation for her delay. She was less candid to this court.  Under these circumstances, the application for condonation falls to be dismissed with costs, on attorney and client scale.

The answering affidavit by Mr Mosiapoa

[83]      Mr Mosiapoa seems to be having personal knowledge of the facts and information which was considered by the MEC in arriving at a decision to dismiss Board members. He however fails to explain how he would have acquired this information and how he would have known what influenced the thinking of another person (the MEC). What follows are some of the excepts from his affidavit:

            “Upon consideration of the Applicants’  representations of 22 November 2019, the MEC could not find adequate reasons why the Applicants should have not been removed from the Board. (sic) (paragraph 11.1)

            The MEC also considered the Applicants’ founding affidavit (paragraph 12).

            The MEC considered both the findings of impropriety against the individual members and against the Board members collectively (paragraph 19)

            The MEC had considered all relevant materials necessary to assist her in coming to this decision (paragraph 34).”

[84]      As correctly pointed out by the applicants, it is the MEC whose application of the mind and conduct is challenged. It is she, and only she, who can say what she read, considered and applied her mind to. Nobody else can comment on what the MEC applied her mind to[14].

[85]      In Von Abo v Government of the Republic of South Africa[15], it was held at paragraph 46 of the judgment that: 

            “[46] The courts have long and consistently held that it is     impermissible for a deponent to an affidavit to give evidence on          behalf of another where the latter does not file a confirmatory affidavit to confirm the evidence.”

            In Gerhardt v State President and Others 1989 (2) SA 499 (T), the following is said at 504F-H:

            “Clearly one person cannot make an affidavit of another and Mr Hattingh, who appears on behalf of the three respondents, concedes correctly that I can only take into account those portions of the second respondents affidavit in which he refers to matters within his knowledge. Insofar as he imputes intentions or anything else to the State President, it is clearly hearsay and inadmissible.

[86]      In President of the Republic of South Africa v SARFU[16], the Constitutional Court held that hearsay evidence in motion proceedings is automatically inadmissible, and it is not necessary for the applicants to bring an application to strike out the hearsay evidence. The Court held:

            “[105] …. The averments, that the President had made the comment, was   based on double hearsay which prima faciewas inadmissible in evidence against him. If it was inadmissible, no regard could be had to it whether the President objected to the evidence or not.”

[87]      In areas where Mr Mosiapoa purports to testify on behalf of the MEC on matters affecting the exercise of her discretion, his evidence constitutes inadmissible hearsay evidence and it must be totally disregarded in the adjudication of the issues between the parties. Consequently, the respondents have failed to show that the MEC exercised her discretion reasonably, lawfully and rationally. In the absence of evidence from the MEC herself, the Court is bound to accepts, as submitted by the applicants, that she exercised her discretion irrationally, unreasonably and capriciously in removing the Board. It was irrational because she relied on a flawed Report.

[88]      What is unfortunate is that the MEC took a decision to dismiss the Board members at the stage when she was aware that a Court challenge on the legality of the mandate decision and the Gobodo Report was pending. This, in my view was an improper exercise of public power by the MEC. What is disturbing here is the timing of the dismissal of these officials – when the review application was pending in Court.

[89]      In Pikoli v President of the Republic of South Africa[17], the North Gauteng Division of the High Court suspended former President Zuma’s decision to appoint a new National Director of Public Prosecutions, on the basis that the removal of Mr Pikoli from office was subject to litigation. The Court held:  

            “When there is a serious challenge to the validity of the purported exercise of public power, a state of uncertainty necessarily follows: On the one hand the action is treated as if it were valid until declared invalid. On the other hand, the practical consequences of the action may turn out to be invalid, as well. For that reason the law requires of all concerned to respect the pending legal process and, as far as is reasonably possible, to limit the practical consequences of the challenged action, “in appropriate circumstances … an authority should … halt its actions when it is aware that review proceedings are to be instituted against it. Failure to do so may render the official concerned liable for contempt of court.” 

Conclusion

[90]      This Court has already declared the Gobodo Report unconstitutional and invalid and it was accordingly reviewed and set aside. The MEC, in deciding to terminate the Board members’ membership relied on the Gobodo Report. It follows therefore that the MEC’s decision also has to be declared unconstitutional and invalid and it falls to be reviewed and set aside.

Order

[91]      Consequently, the following order is made:

            A The first and second respondents’ (MEC and Premier’s) application for condonation for failure to file a complete Rule        53 Record in the Review Application is condoned.

            1. There is no order as to costs.

            B         The first to second respondents’ (MEC and Premier) application for condonation of the first respondent’s (MEC) failure to file a confirmatory affidavit timeously in the Review Application is dismissed with costs.

            1. Such costs to be paid by both respondents (the MEC and Premier), jointly and severally, the one paying the other to be absolved;

            2. Such costs to be taxed on the scale as between attorney and client.

            C         Case No. UM112/2020

            1. The decision  taken by the Head of Department of Finance in the North West Provincial Government to appoint Gobodo Forensic and Investigative Accounting (Pty) Ltd to conduct a forensic investigation into the North West Gambling Board on 22 March 2019 is reviewed and set aside and declared unconstitutional and invalid;

            2.         The Forensic Accounting Investigation Report of the North West Provincial Government dated 23 December 2019 as prepared by Gobodo Forensic and Investigative Accounting (Pty) Ltd is reviewed and set aside and declared unconstitutional and invalid;

            3.         The first, third and fourth respondents are directed to pay the costs of this application, jointly and severally, the one paying the other to be absolved.

            D         Case No. UM145/2020

            1.         The decision taken by the MEC for the Department of Economic Development, Environment, Conservation and Tourism for the North west Provincial Government to terminate the applicants’ membership of the North West Gambling Board on 28 July 2020 is reviewed and set aside and declared unconstitutional and invalid;

                        2.         The first respondent to pay costs of this application.

_________________________

SAMKELO GURA

JUDGE OF THE HIGH COURT

NORTH WEST DIVISION: MAHIKENG

ATTORNEYS

For the Plaintiff:                   WEBBER WENTZEL        

                                                C/o Maree & Maree Attorneys

                                                11 Agaat Avenue

                                                Riviera Park

                                                Mafikeng

                                                2745

                                                Tel: 018 381 7495

                                                Ref: Y Walker

For the Defendant:             FASKEN (Incorporated in South Africa as Bell Dewar Inc.)                  

                                                C/o M.E Tlou Attorneys & Associates

                                                No. 43, Cnr Baden Powell & Viser Streets

                                                Golf View

                                                Mafikeng

                                                2745

                                                Tel: 018 011 0036/7/8/9

                                                Ref: Mr Tlou/Miss Tlhabi/M0184/DIV

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