Roux Shabangu loses R340 million lawsuit for dodgy police head office lease, Newsline

Cape Town – BUSINESSMAN Roux Shabangu has lost his bid to claim R340 million in damages from the Department of Public Works and Infrastructure for cancelling a controversial half-a-billion rand lease.

The Supreme Court of Appeal (SCA) this week overturned the North Gauteng High Court ruling by Judge Brenda Neukircher granting Shabangu permission to sue the department for damages despite having lodged his application late.

Shabangu’s dispute stemmed from the equally controversial R500m 10-year lease of the Sanlam Middestad building in Tshwane that his company Roux Property Fund entered with the public works department on behalf of the SA Police Service in 2010.

He launched the R340m damages claim against the department, saying it breached the lease agreement.

According to SCA judgment delivered on Thursday, the damages Shabangu claimed were the value of the lost ownership of the property and the future benefit for his company being the owner of the property at the end of the lease without the property being encumbered by a mortgage bond or any liability.

”Had the defendant (public works) not remained in breach of the lease agreement, had the defendant not repudiated its obligations arising from the lease agreement, and had the defendant made payment of the rental which it was obliged to pay in terms of the lease agreement, the plaintiff (Roux Property Fund) would have been in a position to avoid judgment being taken against it by Nedbank,” he claimed in the high court.

The SCA found that Shabangu failed to satisfy the court that the department was not been unreasonably prejudiced by the failure to serve the notice of his intention to sue for damages timeously and set aside Judge Neukircher’s decision with an order dismissing Shabangu’s claim with costs.

Shabangu bought the building through a mortgage bond from Nedbank but he defaulted on repayments forcing the bank to successfully institute proceedings at the high court to recover R307m.

Nedbank later bought the building for R66m in 2013 at an auction.

The public works department also instituted court proceedings to have the lease declared to have been invalid from the start as it was concluded with officials lacked authority and that various statutory requirements on the procurement of goods and services for organs of state were not complied with.

The lease was investigated by ex-Public Protector Thuli Madonsela and led to the axing of former public works minister Gwen Mahlangu-Nkabinde and current Police Minister Bheki Cele as national police commissioner.

Cele was fired after a board of inquiry set up by former president Jacob Zuma but the North Gauteng High Court overturned the decision last year.