IPTS litigators get the boot from the municipality
Mayor calls for forensic probe of firm handling city's high- profile cases
The Nelson Mandela Bay municipality has cut ties with the law firm that was driving all court cases related to the beleaguered bus system and the disciplinary cases of senior staff.
Minutes from a confidential meeting of the city council detail how mayor Mongameli Bobani pushed for the council to boot out Gray Moodliar attorneys, also calling for a forensic investigation into the firm for having claimed millions from the municipality.
He wants to know if the fees charged by the firm were fair and in line with what other attorneys charge.
While acting Peter Neilson said he was not sure how the city would implement the decision, and what impact it would have on the court and disciplinary cases, he sent a letter to Gray Moodliar on Tuesday terminating the service level agreement between the city and the firm.
Gray Moodliar was brought on board in 2015 when Danny Jordaan was mayor to probe and gather evidence of corruption and fraud related to the IPTS.
The municipality also simultaneously decided to use the firm to handle high profile disciplinary cases of staff.
In the minutes it states that Bobani moved that minutes from a February 28 meeting be amended to state that all current cases, “be it disciplinary and/or any other cases, and be it on 90% or 99% completion, must be withdrawn from Gray Moodliar attorneys with immediate effect”.
The minutes state further that Bobani said a forensic investigation be conducted into the fees they charged to determine if they were reasonable and fair. “If any discrepancies were to be found Gray Moodliar attorneys [are] to be reported to the Law Society and the relevant law enforcement agencies.”
Neilson said this week he had no idea how to go about implementing the council resolution and had resorted to passing the task on to the office of the chief operations officer.
In November last year, Gray Moodliar warned the city that not following through with the disciplinary cases would have adverse financial implications for the municipality and amount to fruitless and wasteful expenditure.
Some of the cases involving current and former staff of the municipality handled by Gray Moodliar include those of Mvuleni Mapu, Werner Wiehart, Mod Ndoyana and Nobuntu Mgogoshe.
In high court cases, the law firm was representing the city in civil cases against former stadium management company Access facilities and leisure management , Le Roux Inc/David le Roux, Distinctive Trading, and Heerkos Projects.
These all involve money meant for the city’s IPTS.
In an affidavit by Hawks investigator Henk Fourie, he alleged that Heerkos Projects paid Bobani R664,000 which were allegedly proceeds from IPTS funds.In a recording of a confidential council sitting, Bobani can be heard accusing Gray Moodliar of “milking the city”.
“Over a period of five years [the firm] has claimed more than R100m, one company.
“This a white company and this is waste of taxpayers’ money. As the mayco we have agreed that all those cases must be reviewed and settled.“We must stop this thing of outsourcing work to external lawyers” Bobani said.
Bobani said the settlement of cases was a separate matter and should be dealt at a later stage.
“The challenge that we have here is that this Gray Moodliar is billing rates that are high and the black law firms are not getting anything.
“Let’s terminate Gray Moodliar’s services and if we can’t do that, all that we should do is tell them to close the files and hand them over so we can give them to our black attorneys on the panel,” Bobani said.
Director at Gray Moodliar attorneys, Wayne Gray, confirmed the city had indeed terminated the firm’s mandates.
“The termination letter came like a bolt out of the blue,” Gray said.
Gray said they had not had any discussion with the city regarding the matter. However, they looked forward to meeting with Chief operations officer Mzwakhe Clay and the legal services department.
Asked if claims that they had claimed R100m from the city were true, Gray said: “No, the figure and period, if debated, is false and scurrilous.
“We charge in accordance with our Service Level Agreement with the municipality, and its officials, who vet and authorise our accounts, have never, in the past twenty years, had a problem with that.”
Gray added that they had been informed by the city as recently as two weeks ago that the rates they had charged were normal.
With regards to the looming forensic investigation, Gray said they would co-operate.
“It is outrageous. Nevertheless, we will co-operate with any lawful and reasonable request or investigation and set the record straight.”
“In the context of representing the municipality successfully for twenty years in litigation and specifically during the past three years in assisting the municipality to recover monies in cases involving serious fraud, money laundering and corruption in the IPTS scandal, we are shocked and dismayed at council’s decision.
“We have consistently been praised by successive city managers, the current acting city manager, Mr Neilson, and in-house municipal attorneys for the high calibre of work and success rate we have delivered.”
Gray Moodliar is 51 % black owned.
Neilson, when asked what the implications of the move were, said: “It’s such a difficult question to answer. I don’t know how to answer it and that is why I gave an instruction that the city manager’s officer cannot and could never be in a position to implement a resolution of that nature.
“What the city manager’s office can do is pass on the resolution to the COO’s office and let legal services implement the resolution.“The repercussions to the resolution and how one would deal with it, I wouldn’t even know where to start my thought process,” he said.
Neilson said he, however, cannot stand against a council resolution.
“But my feeling was that one should be very considerate of the time that certain matters have taken to reach a specific point, irrespective of the frustrations and the cost that it has taken to reach that specific point, and then one should consider very carefully each case on merit to determine whether the city should or should not withdraw cases and give them back to its own legal services and that a blanket resolution to remove all cases from a particular law firm should not be in the best interest of the city,” Neilson said.
Neilson said he has expressed his view and was told that his personal view does not count and he did not know the history and the frustrations and that the council would make the decisions.