Agostinho Ferreira Architects Incorporated (Pty) Ltd v Namibia Training Authority (HC-MD-CIV-ACT-CON-2021/04873) [2025] NAHCMD 278 (30 May 2025)

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

Case No.: HC-MD-CIV-ACT-CON-2021/04873

In the matter between:

AGOSTINHO FERREIRA ARCHITECTS

INCORPORATED (PTY) LTD PLAINTIFF

and

NAMIBIA TRAINING AUTHORITY DEFENDANT

Neutral citation: Agostinho Ferreira Architects Incorporated (Pty) Ltd v Namibia Training Authority (HC-MD-CIV-ACT-CON-2021/04873) [2025] NAHCMD 278 (30 May 2025)

Coram: SIBEYA J

Heard: 2 December 2024

Delivered: 30 May 2025

Flynote: Law of Contract – Validity and enforceability of an agreement – Enforcement of a penalty clause – Agreement allegedly concluded contrary to provisions of a legislation and authorisation of the signatory and effect thereof – Agreement found to be invalid and unforceable – Plaintiff’s claim dismissed with costs.

Summary: This is an action based on a contract the parties entered into for the plaintiff to provide the defendant with architectural services to renovate different vocational training centres (‘VTCs’) around the Republic of Namibia. The plaintiff seeks that the said agreement concluded on 18 January 2022, be cancelled as a result of the defendant’s repudiation, in which a different architect was hired for the said project. The defendant defended the action on the basis that the agreement is invalid and unenforceable for contravening ss 6(b), 7(1)(b) and 21(2)(c) of the Vocational Education and Training Act 1 of 2008 (the Act) and further that Ms Nangolo-Rukoro was not authorised to enter into such agreement on behalf of the defendant without the approval of the Board of Directors, as the amount of the agreement exceeded her conferred powers.

Held: that the agreement was signed by Mr Ferreira for the plaintiff and Ms Nangolo-Rukoro, the Chief Executive Officer of the defendant.

Held that: the agreement is unenforceable for the reasons that: it was signed by Ms Nangolo-Rukoro, while the monetary value involved exceeded her conferred authorisation of N$1,2 million; the agreement was not approved by the Board of Directors as the legislatively empowered body to maintain procurement processes of the defendant; and that it contravened s 7(1)(b) of the Act.

Held further that: the agreement exposes the defendant to a financial expense, when the Board did not approve same, and can, therefore, not be enforceable.

The plaintiff ‘s claim dismissed with costs.

ORDER

1. The plaintiff’s claim is dismissed.

2. The defendant’s counterclaim is upheld and the agreement is declared invalid and unenforceable.

3. The plaintiff must pay the defendant’s costs, including costs of one instructing and one instructed legal practitioner.

4. The matter is finalised and removed from the roll.

JUDGMENT

SIBEYA J:

Introduction

[1] The plaintiff instituted action proceedings regarding a contract that the parties entered into for the plaintiff to provide the defendant with architectural services to renovate different vocational training centres (‘VTCs’) in the Republic of Namibia. The plaintiff seek an order that the said agreement be cancelled as a result of the defendant’s repudiation, and in respect of which a different architect was engaged for the said project.

[2] The trial proceeded on a claim where the plaintiff seeks to enforce a penalty clause of the written agreement between the parties for payment of N$27 626 090,60. The claim is defended by the defendant.

The parties and their representation

[3] The plaintiff is Agostinho Ferreira Architects Incorporated (Proprietary) Limited, a company duly incorporated according to the laws of the Republic of Namibia, with its principal place of business situated at 13 Liszt Street, Windhoek.

[4] The defendant is the Namibia Training Authority (NTA), established in terms of s 4(1) of the Vocational Education and Training Act 1 of 2008 (‘the Act’), with its principal place of business situated at NTA Village, Rand Street, Khomasdal, Windhoek.

[5] Where reference is made to both the plaintiff and the defendant jointly, they shall be referred to as ‘the parties’.

[6] Mr Diedericks appears for the plaintiff, while Mr Muhongo appears on behalf of the defendant.

The pleadings

[7] The plaintiff, in the particulars of claim, avers that it entered into a written agreement with the defendant on 6 December 2011 and 18 January 2012, respectively, at Windhoek (‘the agreement’). The plaintiff claims that the parties were duly represented, with the plaintiff being represented by Mr Agostinho Ferreira, its duly registered architect and the defendant by its Chief Executive Officer, Ms Maria Nangolo-Rukoro.

[8] In terms of the agreement, the plaintiff, as an architect, was to render preliminary services for work relating to alterations, additions and renovations of various vocational training centres in Namibia. The plaintiff claims that its services included the appraisal and definition of the project, preparing concept design sketches and development of basic cost estimates. The plaintiff further claims that, in terms of the agreement, if the defendant breached its obligations, in circumstances where the project proceeds, the defendant would be liable to pay for architectural services rendered at a fee equal to 20 percent of the total amount of the project.

[9] The plaintiff further claims that the project proceeded and the defendant, instead of retaining its services, procured the services of another architect. This came to its attention through a notice issued by the Public Procurement Board dated 25 February 2019, in respect of the upgrading and expansion of one of the vocational training centres. The plaintiff claims that, as a result, the defendant repudiated the agreement between the parties. The plaintiff, therefore, claims payment of 20 percent of the total amount of the project of N$248 288 087,30.

[10] The defendant’s case is that, it does not bear knowledge that the agreement was signed by Ms Nangolo-Rukoro. The defendant further contends that Ms Nangolo-Rukoro did not have the authority to enter into the agreement. The defendant raised a conditional counterclaim that, if it is found that Ms Nangolo-Rukoro signed the agreement, then she had no authority to enter into such an agreement and therefore, the agreement should be considered a nullity by declaring it invalid and unenforceable.

Pre-trial order

[11] In a joint pre-trial report which was made an order of court on 29 June 2023, the parties listed the following facts that are not in dispute:

(a) That the plaintiff was engaged as an architect who would render such service physically through Mr A E Ferreira, its director and member, and as such in his capacity as an architect duly registered in accordance with the relevant laws of the Republic of Namibia;

(b) That the plaintiff would render preliminary services for the ‘project’ for work related to the alterations, additions, and renovations to the various VTCs to proceed;

(c) That the plaintiff's preliminary services would include the appraisal and definition of the project; concept design sketches and development of basic cost estimates;

(d) That the aforesaid services would be charged in accordance with prescribed tariffs for professional fees, as was set out by the plaintiff and accepted by the defendant as reflected on Annexures ‘B’ and ‘C’ attached to plaintiff's particulars of Claim;

(e) In the event of the project proceeding, the plaintiff had to be appointed as architect in terms of the standard Namibian Institute of Architects Client/Architect Agreement, and the applicable professional fees to be charged would be as prescribed by the relevant legislation;

(f) If in breach of its obligation to appoint the plaintiff in circumstances where the project proceeds, the defendant would be liable, and plaintiff entitled, to claim for architectural services rendered at a fee equal to 20 percent of the total fee of the project.

[12] The following issues were listed by the parties for determination:

(a) Whether the pleaded terms of the agreement are unlawful and ultra vires the provisions of the Act.

(b) Whether or not the agreement is invalid and unenforceable.

(c) Whether or not Ms Nangolo-Rukoro was duly authorised to enter into the agreement with the plaintiff;

(d) Whether or not the plaintiff was entitled to payment as computed and set out in Annexure D to the particulars of claim;

(e) Whether or not the plaintiff is entitled to payment in the amount of N$27 626 090,60 and whether the quantum claimed is correct.

The evidence

Mr Agostinho Ferreira

[13] Mr Agostinho Ferreira, the sole witness for the plaintiff, testified that he is the director of the plaintiff. He testified further that during 2011, the plaintiff received an appointment from the defendant, to render services in respect of the alterations, additions and renovations to various vocational training centres in Namibia on the terms set out in the ‘Terms of appointment for the alterations, additions and renovations to various training centres (VTCs) in Namibia ("Terms of Appointment")’.

[14] It was his testimony that the Terms of Appointment were duly signed on 18 January 2012, by himself, on behalf of the plaintiff and by Ms Nangolo-Rukoro, on behalf of the defendant. He testified further that the appointment letter formed the basis of the parties' further engagements in respect of the scope of the appointment, which included the Valombola VTC, the Eenhana VTC, the Okakarara VTC, the Rundu VTC, the Valombola Hotel School and the Keetmanshoop VTC (‘various NTA sites’). Mr Ferreira testified further that in terms of clause 2 of the Terms of Appointment, the services described would be charged in accordance with the prescribed tariffs for professional fees.

[15] It was Mr Ferreira’s further evidence that between December 2011 and March 2012, the office of the plaintiff, together with certain staff members of the defendant, conducted site visits to the various NTA sites. The purpose of the site visits, he alleged, was to engage with the user clients in order to ascertain the facts that would enable the plaintiff to conduct a needs assessment and to prepare master plans for the various VTCs. The master plans were submitted to the defendant. The plaintiff was informed by the defendant on 26 September 2013 that the master plans for all the submitted VTC's were approved by Executive Committee and that the preparation of tender documents were to start as soon as possible.

[16] The master plan consisted of costed architectural drawings and the total project cost was N$619 324 051, he testified. It was his further testimony that the completion of the Valombola VTC was categorised as high priority. The consulting team prepared tender documentation for the Valombola VTC, with the date for the closing of the tender advertisement set for 20 March 2012. The tender was subsequently awarded to China Jianxi International, in a letter from the defendant to the former, dated 07 May 2012.

[17] Mr Ferreira stated that all documents were sent to the defendant for contract signing with the successful tenderer. On 30 August 2012, Ms Nangolo-Rukoro wrote to the offices of the plaintiff seeking technical advice on the validity of the tender process with the new revelation of the declaration of interest by the Chairperson of the Board of Directors. This led to the suspension of the project and investigations into the conduct of Ms Nangolo-Rukoro.

[18] It was testified that the investigation mentioned above derailed the Valombola VTC construction contract, which was ultimately cancelled, and awarded afresh by the Public Procurement Board in its notice dated 25 February 2019. The defendant did not retain the services of the plaintiff to complete the Eenhana VTC, the Okakarara VTC, the Rundu VTC, the Valombola Hotel School and the Keetmanshoop VTC. It was his further testimony that the plaintiff received no cancellation letter to the effect that its services were not retained in respect of the VTCs mentioned above. It was his testimony that the plaintiff’s claim is limited to the Valombola component.

[19] During cross-examination, it was put to Mr Ferreira by Mr Muhongo that in his evidence he did not produce any document showing that Ms Nangolo-Rukoro was authorised to enter into the agreement, and he answered in the affirmative. He was further asked to show the court any document that reveals that the agreement was a product of the procurement process of the defendant. No such documents were shown to the court.

[20] When the plaintiff’s case was closed, the defendant, as entitled to, applied for absolution from the instance. In a ruling delivered on 5 July 2024, the application for absolution from the instance was refused with costs.

Mr Tomas Nekongo

[21] Mr Tomas Nekongo was the only witness who testified for the defendant. He testified, inter alia, that he is employed by the defendant as a Company Secretary since November 2012. His job description includes attending board meetings, and advising the board on legal and governance matters, amongst others. He testified that during the year 2011 to 2014, the defendant had various meetings where alterations, additions and renovations to various centers were discussed in order to determine their viability regarding finance. It was his testimony that without the funds being confirmed to be available, the renovations could not be authorised.

[22] It was Mr Nekongo’s testimony that while some of the transactions required the approval and authorisation of the Chief Executive Officer (CEO), others require the approval and authorisation of the defendant’s board of directors.

[23] Mr Nekongo testified that the defendant has no knowledge whether or not the agreement was indeed signed by Ms Nangolo-Rukoro, the CEO of the defendant. It was his testimony that Ms Nangolo-Rukoro was authorised by the defendant to only approve transactions and enter into agreements amounting to a total value limited to N$1,2 million. He testified further that any transaction beyond the amount of N$1,2 million, would be beyond her conferred powers and she would be acting ultra vires. Mr Nekongo testified further that Ms Nangolo-Rukoro confirmed her approval limit of N$1,2 million in an email that was received into evidence as an exhibit, therefore, any authorisation and approval beyond N$1,2 million, would be within the exclusive powers and authority of the defendant’s Board of Directors.

[24] Mr Nekongo testified that the Board of Directors of the defendant never approved the agreement nor approved the appointment of the alleged contractor, China Jiangxi International Namibia (Pty) Ltd. He testified that there were submissions made by Ms Nangolo-Rukoro to the Board of Directors, but the Board refused to approve same. It was further his testimony that the defendant also released the performance guarantee of China Jiangxi International Namibia (Pty) Ltd, because there was no contractual basis with it.

[25] It was the further testimony of Mr Nekongo that the agreement which is the subject of this action was never presented to the Board of Directors before it was signed by Ms Nangolo-Rukoro. This resulted in a disciplinary hearing instituted against Ms Nangolo-Rukoro, for exceeding her authority of the threshold of N$1,2 million and entering into transactions without prior approval of the Board of Directors.

[26] It was the further testimony of Mr Nekongo that the amount claimed by the plaintiff of N$248 288 087,30 being 20 percent of the total fee of the project, exceeds the authorised powers of Ms Nangolo-Rukoro and was never authorised or approved by the defendant’s Board of Directors. Mr Nekongo also testified that despite the fact that clause 11 of the agreement refers to architectural services rendered, the plaintiff does not mention the total amount for architectural services on which it bases it’s 20 percent calculation. It was further his testimony that the amount of N$27 695 420,10 was approved for upgrading the Valombola VTC, for which the plaintiff was not retained, but the defendant still contends that due to lack of authority by Ms Nangolo-Rukoro, the plaintiff is not entitled to claim 20 percent of the said amount.

[27] During a brief cross-examination by Mr Diedericks, Mr Nekongo was questioned whether he signed the extract from the minutes of a special meeting of the defendant’s Board of Directors of 12 February 2014. He answered in the affirmative. He was further asked whether the first bulletin of the said extract from the minutes confirmed the appointment of the defendant under bullet one, and he agreed. He also confirmed having given instructions regarding the nature of the plea filed by the defendant in this matter.

[28] In re-examination, Mr Nekongo testified that he sought to clarify his testimony regarding the extract from the minutes of a special meeting of the Board, in that he misunderstood the question, on a quick reading of bullet one, when he confirmed that, under bullet one, the defendant appointed the plaintiff for architectural services. It was his testimony that, upon reflection, his answer should be different because bullet one provides that the Board approved the appointment of architects in 2013 based on the 2013/14 approved budget. He testified that under bullet one, the defendant did not appoint the plaintiff and further that nowhere in the extract of the minutes is the plaintiff mentioned. Mr Nekongo also testified that the dates when Ms Nangolo-Rukoro signed the appointment letter of the plaintiff were in 2011 and January 2012, while the special meeting of the Board referred to in the extracts of the meeting, was convened on 12 February 2014.

[29] As a follow up to the questions raised by the court, Mr Diedericks asked Mr Nekongo to refer to any document before court where another architect was approved by the defendant’s Board, other than the plaintiff. Mr Nekongo could not refer the court to any document, but insisted that the Board approved other architects for other projects.

Arguments

[30] Mr Diedericks argued that the defendant claims that Ms Nangolo-Rukoro was not authorised to conclude the agreement despite there having being a resolution by the Board of Directors of the defendant of 29 August 2012, where the chairperson of the Board recused himself from discussing the award of the Valombola Construction Project to China Jianxi International; a letter from the defendant dated 30 August 2012, addressed to the plaintiff, requesting advice on the implication of the cancellation of the Valombola tender based on the chairperson’s declaration of interest; and a resolution of 12 February 2014, recording approval of the appointment of architects in 2013 based on the 2013/14 approved budget.

[31] Mr Diedericks argued further that in terms of the pre-trial order, the defendant admitted the terms of the agreement. He further argued that subsequent to the appointment of the plaintiff, to render architectural services to the defendant’s various sites, the defendant awarded the tender in respect of Valombola VTC to China Jiangxi, International on 7 May 2012. The defendant did not retain the services of the plaintiff in respect of the Eenhana VTC, Okakarara VTC, Rundu VTC, Valombola Hotel School and Keetmanshoop VTC. He contended that the testimony of Mr Ferreira was, in this regard, not challenged in cross-examination, neither was a contrary version of the defendant put to Mr Ferreira.

[32] Mr Diedericks argued that the plaintiff proved the existence of the written agreement and its terms. He argued further that the plaintiff also proved the quantum claimed. He reiterated that the terms of the agreement and the quantum were admitted in the pre-trial order. Mr Diedericks further referred to a well-known legal principle that it is grossly unfair and improper to let the evidence of a witness go unchallenged in cross-examination and argue the contrary afterwards. He placed reliance on CAPX Finance (Pty) Ltd v Onamangongwa Trading Enterprises CC¹ para 76, where the Supreme Court said the following:

‘[76] Mr Ipinge’s evidence on the disputed amount of N$876 300 during the telephone call was that he was advised to henceforth pay the amount which the respondent owed to Ratu, to the appellant. According to him the amount then owed was about N$130 000. It was never put to him during the cross-examination that the amount owed was N$876 300. On the principle laid down in Small v Smith,² it is ‘grossly unfair and improper’ to let Mr Ipinge’s evidence go unchallenged in cross-examination on the disputed amount of N$876 300 and afterwards to argue that he must be held to have made the representation that he had confirmed that the amount of N$876 300 was owed by the respondent to the appellant.’

[33] Mr Diedericks submitted that the minutes of the special Board meeting of 12 February 2012, shows that the Board approved the appointment of architects in 2013; that the budget of N$83 million was approved in 2013; that the Board resolved to approve N$129 million for capital projects for the 2013/14 and 2014/15 financial years; that the tender committee simply accepted the recommendations from the consultants without interrogating specific requirements for each tender; and that the Board approved the award of the VTC tender to ID building contractors CC. Mr Diedericks placed reliance on the unsigned submission presented by Ms Nangolo-Rukoro to the Board for approval, where in paragraph 3, it appears that the plaintiff was appointed as the consultant.

[34] Mr Diedericks argued that the defendant did not point to any provision in the Act which indicates that the agreement constitutes a nullity on account of being unauthorised. Furthermore, he argued that no proof of any existing procurement policy was produced into evidence by the defendant. He also submitted that the defendant cannot escape liability, especially in respect of the Valombola VTC contract tender award.

[35] Mr Diedericks concluded that Mr Ferreira, was not challenged on his testimony that it was Ms Nangolo-Rukoro who signed the agreement on behalf of the defendant. Therefore, he submitted that the conditional counterclaim must be dismissed. He argued that no evidence was led to prove that Ms Nangolo-Rukoro required specific authority to enter into the agreement, and furthermore, the defendant did not provide this court with the outcome of the disciplinary proceedings instituted against Ms Nangolo-Rukoro. He therefore, called for the plaintiff’s claim to be upheld with costs.

[36] Mr Muhongo argued contrariwise. He submitted that the plaintiff’s claim run contrary to ss 6(b), 7(1)(b) and 21(2)(c) of the Act. This, he argued, was because Ms Nangolo-Rukoro lacked the necessary authority to conclude the agreement on behalf of the defendant and further that the agreement contravened the provisions of the Act. He reminded the court that Mr Ferreira acknowledged, in cross-examination, that the agreement was not a product of the defendant’s procurement process, as contemplated in s 7(1)(b) of the Act.

[37] Mr Muhongo argued that it was the undisputed testimony of Mr Nekongo that Ms Nangolo-Rukoro was authorised by the defendant to only approve transactions and enter into agreements with the total value limited to N$1,2 million. As such, any transaction beyond N$1,2 million would be beyond her conferred powers and she would be acting ultra vires. This threshold of the powers of Ms Nangolo-Rukoro was repeated by her in an email dated 4 November 2012, where she stated that her authorisation for approval was limited to N$1,2 million. Mr Muhongo further made reference to the disciplinary charges drawn up against Ms Nangolo-Rukoro, which included the charge of exceeding her authority on 18 January 2022, when she concluded an agreement with the plaintiff that resulted in an invoice of N$4 884 765,04.

[38] Mr Muhongo further argued that during the cross examination of Mr Nekongo, he was substantially only asked questions in respect of the extract from the minutes of a special meeting of the Board of Directors of the defendant of 12 February 2014. This is where the Board approved the appointment of architects in 2013, based on the 2013/14 approved budget. Mr Nekongo was asked whether the extract related to the appointment of the plaintiff by the defendant. Without hesitation, Mr Nekongo answered the question in the affirmative. Mr Muhongo submitted that during re-examination and further clarification by the court, Mr Nekongo clarified his initial response and stated that the extract of the minutes of 12 February 2014, does not relate to the appointment of the plaintiff by the defendant as an architect.

[39] Mr Muhongo argued that the evidence established that Ms Nangolo-Rukoro did not have the authority to conclude the agreement and thus contravened the above-mentioned provisions of the Act. He concluded that the agreement was entered into without the approval of the defendant’s Board of Directors; without following the defendant’s procurement process and while also exceeding Ms Nangolo-Rukoro’s conferred authorisation threshold of N$1,2 million. He also mentioned that the failure to cross examine Mr Nekongo on the major part of his evidence left such evidence intact.

Analysis

[40] It is settled law, that he who alleges must prove. This position, in my view, is so entrenched that it requires no further authority for its justification.

[41] Considering that the plaintiff’s claim for enforcement of a penalty clause in the amount of N$27 626 090, 60, in terms of the agreement concluded on 18 January 2022, for architectural services, is resisted by the defendant for being contrary to ss 6(b), 7(1)(b) and 21(2)(c) of the Act, it becomes necessary to address the said provisions.

[42] The said provisions read as follows:

‘6. There is established a board to be known as the Board of the Namibia Training Authority to administer and control the affairs of the NTA and which must –

(a) determine the policies and procedures of the NTA;

(b) exercise control in general over the exercise of the powers and the performance of the functions of the NTA;

…

7. (1) The Board must ensure that it has and maintains –

(a) effective, efficient and transparent systems of financial and risk management and internal control, including a system of internal audit; and

(b) an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost effective.

…

21. (2) The Chief Executive Officer –

1. …

2. …

3. is responsible for the carrying out of the resolutions of the Board and manages the affairs of the NTA and the Board subject to the control and directions of the Board.’

[43] It is settled law that agreements entered into in contravention of the law are unenforceable. This position was reiterated by the Supreme Court in Moolman v Jeandre Development CC,³ where the following remarks were made at para 78:

‘This court in Ferrari, and followed in Schweiger, confirmed the common law position that agreements prohibited by law cannot be enforceable by virtue of the maxim ex turni cause non oritur actio (translated in Schweiger as ‘from a dishonorable cause, an action does not arise’). This principle is absolute and admit of no exceptions…’

[44] Mr Diedericks referred to a decision of the Supreme Court in Claud Bosch Architects CC v Business Enterprises Number 123 (Pty) Ltd,⁴ para 32, for the contention that in order to determine the consequence of the alleged contraventions of the Act, the wording of the sections would need to be considered within their context. This would be so in order to determine whether the invalidity of the agreement was the intention of the legislature for such contravention.

[45] As I can gather from the dispute between the parties, the matter for determination is whether or not, Ms Nangolo-Rukoro, had the necessary authority to conclude the agreement on behalf of the defendant, and whether such agreement violates the provisions of the Act to such an extent that the agreement is unenforceable.

[46] It was the testimony of Mr Nekongo that Ms Nangolo-Rukoro exceeded her authorisation threshold of N$1,2 million when she concluded the agreement. He testified further that the conclusion of the agreement was not approved by the Board of Directors of the defendant. This evidence was not disputed by the plaintiff.

[47] Furthermore, in an email addressed to EXCO (Executive Committee) members of the defendant, dated 4 November 2012, which email formed part of the discovery bundle of the defendant, and which was received into evidence as an exhibit, Ms Nangolo-Rukoro stated as follows:

‘Dear EXCO members, in particular Ferdinand as the owner of the submission.

the submission titled: seeking approval from EXCO for the first fees & disbursement payments of Augostinho Fereira Architect INC for the Valombola Training center capital projects dated 1^st October 2012, requires more work.

Firstly, EXCO cannot approve due to limit (sic) issues (my authorization is 1.2 million) which I assume will also be the limit for EXCO, and therefore second (sic) the rest of the EXCO members to recommend the matter to board;

The following questions need clarity:

…

4. Terms of appointment which were addressed to the NTA dated 2011.12.06 these conditions were not attached as part of your submission to see if they were met. You only attached the terms of appointment. Kindly attach, for example, the appointment letter, attach the client Architect agreement in full you have only attached the last page where the CEO signature is and dated 18 January 2012?

5. I have seen no principle agreement attached and its on the basis that payment should made (sic)?

6. There is only a pre-proposal and its only the cover page, where is the comprehensive fee proposal?’

[48] It becomes apparent by now that the monetary amount contained in the agreement, exceeds the authority of Ms Nangolo-Rukoro. This is clear when regard is had to the fact that the agreement is in excess of N$1,2 million. I find that it is apparent from the undisputed evidence of Mr Nekongo that the threshold of Ms Nangolo-Rukoro, was N$1,2 million. As stated earlier, this is in harmony with what Ms Nangolo-Rukoro mentioned in her email of 4 November 2012. I, therefore, find as a fact, that Ms Nangolo-Rukoro’s authority was limited to transactions or agreements, not exceeding the threshold of N$1,2 million.

[49] What follows therefore, is the determination of what should be the consequence of exceeding such threshold? Mr Diedericks contended that the Act does not provide that unauthorised agreements must constitute a nullity. He further contented that the defendant produced no proof of any existing procurement policy in place and further produced no policy on the delegation of power into evidence. As alluded to above, Mr Muhongo‘s arguments were a different kettle of fish. He argued that the agreement exceeded the authorisation conferred on Ms Nangolo-Rukoro, and as a result, such an agreement is unenforceable.

[50] Having found, as mentioned above, that it has been established that the monetary threshold of Ms Nangolo-Rukoro was N$1,2 million, I find that the agreement exceeded such authorisation. In my view, it matters not, whether or not the defendant failed to produce the policy on the delegation of power of authority. This is because it has been established that the threshold of Ms Nangolo-Rukoro’s authority was N$1,2 million and it was exceeded.

[51] There were further a lot of sideshows, which included the issue of whether or not the procurement processes of the defendant, were followed when the agreement was entered into. Mr Ferreira agreed to a question posed by Mr Muhongo in cross-examination that the procurement processes of the defendant were not followed in respect of the conclusion of the agreement. Mr Diedericks, however argued, correctly so, that the defendant did not produce the said procurement policy into evidence. I hold the view that this matter can be decided without having the procurement policy in place, hence I referred to the aspect of the procurement policy as a side issue. The determinant issue, in my view, is what the consequence of an agreement that is concluded beyond the conferred authorisation of Ms Nangolo-Rukoro could be?

[52] In terms of s 6(b) of the Act, the Board of Directors of the defendant administers and controls the affairs of the defendant. Under s 7(1)(b) of the Act, the Board is mandated to ensure that it has an appropriate procurement system, that is fair, equitable, transparent, competitive, and cost-effective. Section 21(2)(c) of the Act, on the other hand, lays bare that the CEO, is responsible to carry out the resolutions of the Board and manages the affairs of the defendant, subject to the control and directions of the Board. This, coupled with the undisputed evidence of Mr Nekongo, that transactions and agreements that exceed the threshold of N$1,2 million should be presented to the Board for approval, it becomes evident that the agreement in question should have been subjected to the consideration and approval of the Board and not Ms Nangolo-Rukoro.

[53] Mr Diedericks referred to the unsigned submission presented to the Board on 21 June 2012, where in paragraph 4, it is stated that the plaintiff was appointed as the consultant. These unsigned minutes possess a few challenges. Firstly, they are unsigned, and there is no evidence that indeed these minutes were confirmed as the minutes of the Board; secondly, they do not confirm that the agreement was concluded with the approval of the Board.

[54] In respect of the extract from the minutes of a special meeting of the Board of 12 February 2014, Mr Nekongo clarified his response in cross-examination, namely, that the said minutes did not refer to the plaintiff. He referred to the several dates as follows: the agreement was concluded on 18 January 2012, while the said meeting of the Board held on 12 February 2014, concerned the defendants approval of architects in 2013 based on the 2013/14 approved budget. The said dates lay credit to the evidence of Mr Nekongo. There was further no suggestion that the said meeting ratified the agreement.

[55] I find that the evidence has established that Ms Nangolo-Rukoro did not have the authority to conclude the agreement and thus, bind the defendant. Where the evidence proves something the consideration of probabilities does not arise. This principle was endorsed by the Supreme Court in Shikale v Universal Distributors of Nevada,⁵ at para 44 as follows:

‘It goes without saying that once the evidence proves or disprove something one does not seek to establish that effect on probabilities as the necessity of resorting to probabilities is to establish the truth when there is no direct evidence to achieve the same result.’

[56] In Newpoint Electronic Solutions (Pty) Ltd v PS, Office of Prime Minister,⁶ the Supreme Court said the following regarding agreements concluded in violation of statutes:

‘42 it is now axiomatic that the Republic of Namibia is a Constitutional State and in a Constitutional State, the principle of legality reigns supreme. What this means is that all State institutions and public officials (there is no denial that the Permanent Secretary of the Office of the Prime Minister, the Prime Minister and now disbanded board are State institutions) may act only in accordance with powers conferred on them by law.

43 This Court has on numerous occasions stressed that the principle of legality demands that the exercise of any public power must be authorised by law, either by the Constitution itself, or by any other law recognised by or made under the Constitution. The Court furthermore made it clear that the exercise of public power is only legitimate where lawful.

44 If public functionaries purport to exercise powers or perform functions outside the parameters of their legal authority, they, in effect, usurp powers of the State constitutionally entrusted to legislative authorities and other public functionaries. It is against that background that it seems relevant to first set out the statutory framework for the acquisition of goods and services on behalf of the Government.’

[57] As I draw this judgment to the end, I take note that disciplinary proceedings were instituted against Ms Nangolo-Rukoro for, inter alia, exceeding her authority when she entered the agreement with the plaintiff on 18 January 2022. The court was, however, not informed of the outcome of such a disciplinary process. Despite that, I hold the view that the defendant’s failure to inform the court of the outcome of the disciplinary process, does not add or subtract anything to the finding that the agreement was concluded without appropriate authorisation and contrary to the provisions of the Act.

[58] Over and above the fact that the agreement was concluded without authorisation of the Board, that it contravened the provisions of the Act, particularly s 7(1)(b), which places the responsibility of maintaining a procurement system, which is fair, equitable, transparent, competitive, and cost-effective on the Board and not the CEO. The failure to have the agreement considered and approved by the Board renders it contrary to law. The agreement, therefore, stands in total contrast to the provisions of the Act. What is more, is that, there are serious financial implications involved on the defendant’s part, resulting from the agreement, which the legislature sought to avoid by limiting the procurement process solely to the Board.

Conclusion

[59] In view of the above conclusions, I find that the agreement is unenforceable for the following reasons, namely, it was signed by Ms Nangolo-Rukoro while the monetary value involved exceeded her conferred authorisation of N$1,2 million; the agreement was not approved by the Board as the legislatively empowered body to maintain procurement processes of the defendant; and that it contravened s 7(1)(b) of the Act. The agreement, in my view, exposes the defendant to a financial expense, when the Board did not approve same. This agreement, in my considered view, cannot be declared enforceable.

[60] As a result, the plaintiff’s claim cannot succeed and falls to be dismissed. Similarly, I find that the defendant’s counterclaim succeeds and the agreement is, therefore, declared invalid and unenforceable.

Costs

[61] Costs follow the event. No arguments were advanced by any of the parties to depart from this principle, neither could I ascertain any reason therefor. The defendant will, therefore, be awarded costs for successfully defending the action.

Order

[62] In the result, it is ordered that:

1. The plaintiff’s claim is dismissed.

2. The defendant’s counterclaim is upheld and the agreement is declared invalid and unenforceable.

3. The plaintiff must pay the defendant’s costs, including costs of one instructing and one instructed legal practitioner.

4. The matter is finalised and removed from the roll.

_____________

O S SIBEYA

JUDGE

APPEARANCES

PLAINTIFF: J Diedericks

Instructed by

BD Basson Incorporated, Windhoek

DEFENDANT: T Muhongo

Instructed by Sisa Namandje & Co, Inc,

Windhoek