DURBAN – The High Court in Durban has ordered the Gauteng Member of the Executive Council (MEC) for Human Settlements and the Gauteng Department of Human Settlements to pay more than R68,3 million to contractor Allenby Housing CC, concluding over a decade of litigation.
In a judgment delivered by Judge J. Henriques, the court ordered the provincial authorities to pay R68 303 234,15, jointly and severally, along with legal costs. The ruling firmly dismissed attempts by the provincial department to repudiate a signed settlement reached during court-annexed mediation.
Project completed, but payment outstanding
The case originated from an action instituted in 2014 concerning five agreements under which Allenby Housing supplied and installed prefabricated modular accommodation units across Gauteng. Although the contractor completed the project, payment remained outstanding, resulting in years of defended litigation.
In June 2023, the Gauteng Department of Human Settlements, working in conjunction with the Office of the Premier, invited Allenby Housing to participate in mediation under its “Litigation Reduction Plan” designed to resolve outstanding court cases. The parties agreed on the appointment of adv. V.G. Sibeko as mediator.
Despite agreement, department fails to pay
During negotiations, the parties brokered an agreement documented on 1 December 2023 to achieve a settlement. Allenby Housing agreed to compromise its initial claim by abandoning approximately R15,3 million in disputes, fixing the capital debt at R59 394 116,98. The parties also capped interest at 15% (calculated at R8 909 117,54), establishing an agreed total of R68 303 234,15 payable on or before 28 February 2024. A forensic audit had already confirmed portions of the debt, and departmental officials conceded they lacked evidence to refute the rest.
Despite this agreement, the department failed to pay the sum by the deadline, requesting repeated adjournments to check available funds. When Allenby Housing approached the high court to enforce the terms, the department resisted, arguing that the document was merely a non-binding “stated case” and that its state attorney representatives lacked authority from the head of department or chief financial officer to bind the government.
Court delivers ruling
Judge Henriques rejected these arguments, noting also that the department failed to send representatives to court on the day of the hearing. The judge held that despite its title, the document created binding, enforceable payment obligations that resolved the entire dispute.
Furthermore, the court ruled that the state attorney had actual and apparent authority to settle the matter during mediation proceedings. The judge concluded that the department presented mere conclusions without primary supporting facts and was estopped from denying liability, ordering full payment to Allenby Housing.
