In a ground-breaking judgement, the Port Elizabeth
High Court ordered Lindile Petuna, former Executive Director of Human Settlements
to pay back R11.3 million after the municipality overpaid for a Seaview
property in 2015 on his recommendation.
He also withheld critical information from the
Executive Mayor and the Municipal Council regarding the market value (R3
million) of the land and the findings of a feasibility study, obtained two
years earlier by his own department.
Petuna also made history when he was ordered to pay
more than R550 000 in October last year for misleading the municipality
regarding rezoning applications.
In the latest case, Petuna stated that he cannot be
held accountable as he is not a current municipal official and that he acted on
reports by the Department of Human Settlements. He left the municipality after
a settlement agreement with the institution in November 2015.
Acting Judge Lisa Ntsepe dismissed Petuna’s defence
and ruled: “…the defendant’s denial appears to be nothing short of a desperate
and unintelligent attempt to evade the consequences of the breach of his duty
of trust, good faith and further his duty to prevent irregular, fruitless and
wasteful expenditure”.
Nelson Mandela Bay Municipality Acting City Manager,
Mandla George, said the judgement in favour of the municipality, is a major
step in the right direction to remind senior officials of their legal
responsibility.
“Section 32 (1) d of the Municipal Finance Management
Act states clearly that any political office bearer or official of a
municipality who deliberately or negligently made or authorised a fruitless and
wasteful expenditure is liable for the expenditure incurred by the
municipality.
“I am therefore happy that the court found in our
favour and steps will now be taken to recoup the taxpayers money wasted as a
result of Petuna’s actions.
“It also demonstrates consequence management, which is
a critical component if we would like to ensure that sound and ethical
recommendations are made to our Municipal Council in future.
“The fact that the municipality sought justice not
only illustrates how other municipalities can go about addressing these matters
as this judgement creates a model for other municipalities to follow,” Mr
George said.
In February 2015, Lindile Petuna recommended that the
Executive Mayor and the Nelson Mandela Bay Municipality Council approve the
purchase of portion 10 of the farm Seaview 28, Clarendon Marine, for R14 385
741 to develop low cost housing.
He stated in the report that 9,6 hectares of the
property is developable in the immediate term and 17,55 in future, whilst a
feasibility study from his own department stated clearly that only 5,08
hectares of the land is suitable for human settlements development.
In addition, the seller of the property, bought the
land in December 2013 for R2.4 million and the market value of the land was R 3
million in February 2015.
Acting Judge Ntsepe found that Petuna would have
advised Council not to purchase the property in the circumstances, if he
“exercised reasonable care and performed his duties…. in good faith and in
accordance with the terms of his employment contract”.
Second
historical misstep
This is the second
pioneering judgment emanating from the High Court in Port Elizabeth against
Petuna in which the courts have ordered the enforcement of a municipality’s
statutory obligation to recover fruitless and wasteful expenditure from a
senior official and make him liable for it.
In the earlier
judgment, Judge J M Roberson found Petuna liable for legal costs of R559 306.25
incurred by the municipality and that he was negligent and obdurate in rezoning
three properties owned by the Georgiou family in circumstances where he was
advised by senior counsel that the rezoning was unlawful due to restrictive
title deed conditions not being removed.
In both cases,
Petuna, currently a senior official at the Knysna Municipality, was ordered to
pay the Nelson Mandela Bay Municipality’s legal cost with interest as well.
