The Constitutional Court has partly upheld an appeal by Minister Angie Motshekga and the Department of Military Veterans, clarifying that innocent contractors may be compensated for work done but not for unperformed portions of cancelled state contracts.
The Constitutional Court has partly upheld an appeal by the Minister of Defence and Military Veterans, Angie Motshekga, ruling that a private healthcare provider can be paid for services it actually delivered under an unlawful state contract but cannot automatically claim damages for the rest of the three-year agreement.
In a majority judgment written by Justice Mbuyiseli Mathopo, the court clarified how innocent contractors should be compensated when government procurement contracts are later declared unconstitutional.
The case involved the Department of Military Veterans and Zeal Health Innovations (Pty) Ltd (ZHI), which was awarded a tender in 2015 to provide healthcare and wellness services to about 16,000 military veterans.
The apex court granted leave to appeal and partly overturned a Supreme Court of Appeal (SCA) ruling that broadly preserved ZHI's contractual rights even though the contract had been declared invalid. Instead, the court ruled that ZHI is entitled to contractual payment only for services provided between June 1 and August 12, 2015.
