The University of Johannesburg (UJ) has successfully sued its former Senior Director of Student Affairs, Mr Helani, for more than R18 million in contractual damages arising from fraudulent breaches of his employment obligations.

Background 

According to a statement from Myburgh Attorneys Inc, which handled the matter, Helani managed and oversaw the accreditation of privately owned student accommodation and acted as Project Leader for the process. His employment contract required annual declarations of interest, disclosure of actual or potential conflicts, good faith, honesty, and the protection of UJ's interests.

The accreditation irregularities

Two Braamfontein properties linked to Mahlatse Investments were accredited for 748 and 693 beds respectively. Later investigations established actual capacities of only 125 and 175 beds and revealed deficient documentation and irregular inspections. UJ paid R17,093,771,80 in respect of the properties. Helani received numerous payments from Mr Khoza and related service-provider entities but disclosed none of them.

The legal claim

UJ instituted proceedings under section 77(3) of the Basic Conditions of Employment Act 75 of 1997, claiming contractual damages of R18,184,863.62. The amount comprised the sums paid for the non-compliant properties plus a 6% fee.

The accreditation process required the Bid Evaluation Committee to assess applications and inspection reports before recommendations reached the Tender Committee. Helani, one of the most senior members of the Bid Evaluation Committee, managed the process, directed inspection teams, prepared the final report, and represented that qualifying requirements had been satisfied. The Tender Committee relied on his report. His fiduciary duties required disclosure of payments and relationships capable of creating conflicts. He nevertheless accepted substantial payments from Khoza and service  providers during the accreditation period while making no declarations after 2020.

Court's findings

The Labour Court found Helani's explanations for the payments – including an alleged property transaction and loans from Khoza – improbable and unsupported by documents or corroborating witnesses. The timing and pattern of the payments, his failure to disclose them, the false bed counts, deficient applications, and payments to other employees and supported the inference that he knowingly participated in a coordinated fraudulent scheme. 

His misrepresentations induced UJ to accredit Mahlatse Investments when it was not entitled to accreditation. But for those breaches, UJ would not have parted with R17,093,771.80 to the service providers and R1,091,091.82 in Fundi fees. The full R18,184,863.62 therefore constituted recoverable patrimonial loss flowing naturally from the fraudulent breach.

Outcome

Helani was ordered to pay UJ R18,184,863.62 as damages for breach of his employment contract. He was also ordered to pay UJ's costs of trial, including the costs of his applications to amend his pleadings and to postpone the trial.