A 2014 decision not to move into a leased Cape Town building citing tender irregularities could cost the CCMA about R80m if the property owner gets his way, says a City Press report.

The R100m 10-year lease agreement, signed in 2013 for the building that was never occupied, has been the subject of a legal wrangle between the Milestone Property Group and the CCMA.

Last week the CCMA lost its bid to have the Gauteng High Court (Johannesburg) set aside its decision to enter into the lease agreement with Milestone, owned by Oscar Phoku.

The CCMA also failed to get the court to declare the lease agreement invalid. But the battle continues as Milestone demands the CCMA pay about R80m in damages.

The stand-off began in 2014 when the CCMA could not move into the building at the agreed time because of allegedly incomplete renovations.

Judge Maletsatsi Mahalelo noted the lease was to start on 1 March 2014, but this date was shifted to 1 September when Nedbank, which lent Phoku R33m to buy the building, confirmed to the CCMA that the space would be ready. But a few days before it was supposed to move in the CCMA told Milestone it was ‘considering not taking occupation of the building and that it was also considering to apply to have the bid set aside because of the irregularities with regard to the decision to award the tender’ to Phoku’s company.

However, the judgment noted that when it became aware of the ‘error’ in awarding the tender, the CCMA ‘took no steps to review its decision to award Milestone the tender, nor did it give any indications to Milestone that there was an error in the points allocation’.

Instead, the CCMA engaged extensively with the company to get the premises ready for occupation.

Full City Press report