The cancellation of the contract led to the liquidation of iLama Projects, which rendered it unable to repay its debt to Country Cloud.
In March 2008, iLama Projects was awarded a contract to complete the Zola clinic in Soweto. It sought a loan for R12 million from the applicant, Country Cloud Trading CC (Country Cloud).
Country Cloud then obtained an undertaking from the department that the loan amount would be paid directly to Country Cloud when money from the department became available.
But the department then cancelled the completion contract with iLama in September 2008 before any payment was made.
Country Cloud approached the courts to recover the money from the Gauteng department of transport, roads and public works.
The High Court and the Supreme Court of Appeal dismissed its case.
On Friday, the Constitutional Court, in a unanimous judgment, also dismissed Country Cloud’s appeal, ruling that the department’s cancellation was not wrongful, and that Country Cloud’s risk of loss was foreseeable.