Court order
The court ordered the respondents to pay Allenby Housing CC R68,303,234.15, jointly and severally, together with legal costs.
According to the judgment, Allenby Housing sued the department for unpaid amounts arising from five partly written and partly oral agreements. Litigation continued for years before the department initiated a mediation process in 2023 as part of a programme aimed at reducing its litigation backlog.
Origins of the dispute
During the mediation process, the parties agreed to reduce the claim and cap interest, resulting in a total settlement figure of R68.3-million. The agreement recorded that the amount would be payable by February 28, 2024.
The Gauteng respondents later argued that the document was merely a mediation-related “stated case” and not a settlement agreement.
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They also contended that their legal representatives lacked authority to bind the department to such an agreement.
The court rejected both arguments.
Authority challenge dismissed
Judge Henriques found that the document contained the essential hallmarks of a settlement agreement because it resolved all outstanding issues between the parties, fixed the quantum owing, set an interest rate and specified a payment date.
The judge concluded that the document “constitutes a settlement agreement” rather than a true stated case.
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On the authority issue, the court held that the respondents had failed to provide factual evidence showing that their legal representatives lacked the necessary mandate. The judgment noted that the State Attorney’s representatives actively participated in negotiations, agreed to concessions on liability and quantum, and signed the agreement.
The court further found that the respondents’ requests for adjournments following the agreement were aimed at determining whether funds were available to make payment, rather than disputing liability or seeking approval of the settlement itself.
Implications of the ruling
In its analysis, the court said the settlement ended litigation that had been ongoing for about 10 years, reduced the amount claimed, lowered the interest exposure of the department and avoided the need for a lengthy trial.
The judgment was delivered on October 23, 2026, following a hearing held on March 6, 2026. The respondents did not appear at the final hearing despite receiving notice of the proceedings, according to the court.
Mpho Sibanyoni
sundayworld.co.za
