Davis and Deale Irrigation (Pty) Ltd and Another v City of Ekurhuleni Metropolitan and Others (2023-071369) [2025] ZAGPJHC 475 (19 May 2025)

Case Note

Case Name: D&D v. CEM, Malaka, and PPD
Citation: Interim interdict application concerning the awarding of a water meter contract
Date: Filed on or about 20 July 2023, with amendments submitted on 4 October 2023

Reportability

This case is reportable because it raises important issues concerning the exercise of statutory duties by a governmental entity and the potential abuse in the tender and contract award process. The judgment examines the delicate balance between enforcing constitutional rights and ensuring that governmental statutory responsibilities, particularly in managing public resources such as water, are not unduly restrained by a mooted interim interdict. The significance lies in its discussion of malice, fraud, and the stringent requirements for the granting of interim relief in cases that affect the exercise of statutory powers.

The judgment also provides guidance on the application of established criteria for interim interdicts, reinforcing the necessity for a prima facie case, demonstration of imminent irreparable harm, and a careful balancing of convenience between the parties. This makes the case noteworthy as it clarifies the interplay between constitutional rights, statutory duties, and procedural safeguards in administrative procurement and tender processes.

Furthermore, the matter demonstrates the importance of judicial restraint when potential interim orders might impair a state’s ability to fulfil its public obligations, reflecting broader democratic principles and the normative framework underlying the Constitution.

Cases Cited

Setlegelo v Setlegelo 1914 AD 221 at 227

Webster v Mitchell 1948 (1) SA 1186 (W)

National Treasury and others v Opposition to Urban Tolling Alliance and others 2012 (6) SA 223 (CC)

KSL v AL 2024 (6) SA 410 (SCA)

National Commissioner of Police and another v Gun Owners of South Africa (Gun Free South Africa as amicus curiae) [2020] 4 All SA 1 (SCA)

Gool v Minister of Justice and Another 1955 (2) SA 682 (C)

Beecham Group Ltd v B-M Group (Pty) Ltd 1977 (1) SA 50 (T)

Cliff v Electronic Media Network (Pty) Ltd and another [2016] 2 All SA 102 (GJ)

Legislation Cited

The Preferential Procurement Policy Framework Act 15 of 2000

Chapter 2 of the Constitution (sufficient water provision)

Relevant statutory provisions imposing water management and metering duties on public entities

Rules of Court Cited

The established requisites for granting interim interdicts as set out in case law (e.g., Setlegelo v Setlegelo and Webster v Mitchell) serve as the guiding framework for this matter. No specific written procedural rule was cited, but the judgment relies on long-established common law principles regarding interim relief.

HEADNOTE

Summary

The judgment concerns an application for an interim interdict sought by D&D pending a review of the decision by CEM to award a tender to Malaka for the supply and installation of water meters and above-ground water meter boxes. The applicants argue that CEM engaged in preferential treatment and awarded the contract unlawfully, thereby violating D&D’s constitutional and statutory rights under the Preferential Procurement Policy Framework Act. It is contended that Malaka’s products did not conform to the technical specifications and that improvements permitted to Malaka to retrofit its product were improper.

The case further raises allegations of fraud, although this ground was introduced only at the hearing and not initially relied upon. The applicants assert that such misconduct led to the wrongful award of the tender to Malaka, which displaced D&D—the former incumbent responsible for water meter supply since 2017 until 2022. The review also addresses the potential prejudice to D&D if the interim interdict were granted, balanced against the harm that might be inflicted upon CEM’s statutory duties.

The matter is situated within a framework of established legal principles on the granting of interim interdicts, with emphasis on demonstrating a prima facie right, imminent irreparable harm, and the balance of convenience. The decision highlights that any restraint imposed on CEM’s statutory functions must be based on a strong evidentiary foundation—including proof of malice or fraud.

Key Issues

One key issue is whether CEM acted unlawfully by awarding the tender and entering into a contract with Malaka, thereby infringing D&D’s rights under both the Constitution and the Preferential Procurement Policy Framework Act. Another central issue concerns whether D&D has established the requisites for an interim interdict—including a prima facie case, a well-grounded apprehension of imminent and irreparable harm, and the demonstrable balance of convenience in its favour.

A further issue is the introduction of an allegation of fraud during the hearing, raising questions about the evidentiary requirements and legal implications of contending that fraudulent conduct tainted the tender process. The analysis of these issues directly impacts the potential for restraining a public authority from carrying out its statutory obligations.

Held

The court held that for an interim interdict to be granted in circumstances that would restrain the exercise of statutory powers, the applicant must prove all elements on a balance of probabilities. The judgment underscored that any order limiting CEM’s ability to execute its statutory duty—namely, the metering and tariffing of water—must be subjected to a highly rigorous evidentiary standard, including clear proof of malice or fraud.

The court reiterated that the requisites established in key precedents are to be applied in line with constitutional principles and democratic norms. Ultimately, considering the requirements and the available evidence, the court indicated that D&D had not sufficiently demonstrated that the balance of convenience overwhelmingly favoured the granting of an interim interdict, especially given the short period remaining in the contract’s term and the absence of compelling evidence of imminent harm.

THE FACTS

The facts of the case reveal that on 2 September 2022, CEM invited bids for the supply, delivery, and off-loading of water meters and related materials. D&D, along with several parties, participated in this tendering process, competing directly with Malaka. Following the evaluation of bids, CEM entered into a Service Level Agreement with Malaka on 19 April 2023, continuing until 30 June 2025. Prior to this award, D&D had held a contract for supplying water meters from 2017 until 2022.

After the award, D&D initiated legal proceedings on or around 20 July 2023 by applying for an interim interdict to restrain further actions by CEM concerning the installation and purchase of water meter boxes provided by Malaka and PPD, pending the outcome of a Part B review seeking to set aside the contract award. D&D alleged that CEM compromised the bid process by accepting non-compliant products from Malaka and that preferential treatment was afforded, ultimately prejudicing D&D’s position and causing significant harm.

During the hearing, allegations were advanced that fraud may have been involved in the tendering process—an issue that although not initially included in the affidavits, was introduced by counsel as an additional ground for relief. CEM, on the other hand, maintained that the tender process had been conducted fairly, equitably, and transparently in line with statutory requirements, and argued that any interim order could hinder its constitutional duty to manage water resources efficiently.

THE ISSUES

The legal issues center on whether CEM’s decision to award the contract to Malaka was in breach of D&D’s constitutional rights and the statutory framework provided under the Preferential Procurement Policy Framework Act. The court was called upon to determine if D&D had demonstrated a prima facie right to relief by establishing both an imminent and irreparable risk of harm should the interim interdict not be granted.

Another issue was whether an allegation of fraud—introduced late in the proceedings—could legally justify an extraordinary form of relief that would restrain a state authority from fulfilling its statutory mandate. Additionally, the court needed to reconcile the competing interests of protecting D&D’s commercial rights against the public interest obligations imposed on CEM to manage water resources effectively.

The questions before the court required careful balancing of constitutional freedoms with the imperative for public entities to execute their duties without undue judicial interference, particularly in scenarios where contractual obligations are nearing termination.

ANALYSIS

In its analysis, the court meticulously examined the established criteria for the granting of interim interdicts, referencing seminal decisions such as Setlegelo v Setlegelo and Webster v Mitchell. The court observed that an applicant must demonstrate a prima facie right, a well-grounded apprehension of imminent irreparable harm, a favorable balance of convenience, and the lack of any other adequate remedy. This multifactor analysis requires that the evidentiary standard be met as a whole and not by isolated elements.

The reasoning further emphasized that the judicial imposition of an interim interdict on a state entity’s statutory exercise of power is an exceptional measure, reserved for cases where there is unmistakable evidence of malice or fraud. The court noted that any interim restraining order that would curtail CEM’s constitutional duty to manage water resources must be subjected to strict scrutiny, given the potentially far-reaching impacts on public interest and statutory obligations. The analysis thus balanced D&D’s claims against the legislative and constitutional framework governing public administration.

Moreover, the court underscored the importance of proportionality and urgency, particularly noting that with only a short period left until the termination of the contract, any harm alleged by D&D would be difficult to quantify and potentially remedied by monetary compensation rather than by an extraordinary interim order.

REMEDY

The remedy sought in this case was an interim interdict to halt any orders, installations, or purchases of above-ground water meter boxes by Ekurhuleni Metropolitan from Malaka during the pendency of a review application. D&D argued that such a remedy was essential to preserve its commercial interests and prevent further harm arising from an allegedly unlawful contract award.

The court, however, was cautious in its approach, given the potential constitutional and statutory implications of restraining a public authority’s exercise of its mandated powers. Thus, while the application raised grave issues, the court was ultimately reluctant to grant an interim order that might imperil CEM’s ability to discharge its statutory responsibilities regarding water resource management.

In its final consideration, the court focused on the delicate balance between safeguarding individual rights and maintaining the state’s duty to serve the community, concluding that the evidence did not satisfy the rigorous requirements for the issuance of an interim interdict in this instance.

LEGAL PRINCIPLES

The judgment reaffirms several key legal principles: the necessity for an applicant to establish a prima facie right, imminent irreparable harm, and a favorable balance of convenience before an interim interdict can be granted. The decision reflects the deeply entrenched principle that temporary restraining orders against the exercise of statutory powers must only be issued in exceptional cases, and necessarily accompanied by evidence of malice or fraud.

Additionally, the ruling highlights the fundamental constitutional duty of state entities to manage public resources—in this case, water—in an efficient, transparent, and lawful manner. The court’s reasoning also underscores that judicial intervention in administrative processes must be measured and proportionate, firmly rooted in both statutory interpretation and the overarching commitments of constitutional democracy.

Finally, the case serves as a reminder that even if an applicant presents seemingly compelling arguments, the balance of convenience must be carefully weighed alongside the public interest to ensure that the judicial process does not inadvertently obstruct the legitimate execution of governmental functions.