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[2018] ZAWCHC 168
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Mhonko's Security Services CC v City of Cape Town and Others (21132/2018) [2018] ZAWCHC 168 (30 November 2018)
IN THE HIGH
COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 21132/2018
In
the matter between:
MHONKO’S
SECURITY SERVICES CC
Applicant
And
CITY
OF CAPE
TOWN
1
st
Respondent
CHAIRPERSON
OF THE SUPPLY CHAIN
MANAGEMENT
BID ADJUDICATION COMMITTEE
2
nd
Respondent
APPEAL
AUTHORITY OF THE CITY OF CAPE TOWN
3
rd
Respondent
CAPITAL
SHIP TRADING 605 (PTY) LTD
4
th
Respondent
SECURITEM
(PTY) LTD
5
th
Respondent
KHUSELANI
SECURITY AND RISK
MANAGEMENT
(PTY) LTD
6
th
Respondent
FIDELITY
SECURITY SERVICES (PTY) LTD
7
th
Respondent
GPARM
PROTECTION SERVICES CC
8
th
Respondent
IMVULA
QUALITY PROTECTION (AFRICA)
(PTY)
LTD
9
th
Respondent
PROSEC
GUARDS
CC
10
th
Respondent
CHIPPA
TRAINING ACADEMY (PTY) LTD
11
th
Respondent
DISTINCTIVE
CHOICE 477 CC
12
th
Respondent
BIDVEST
PROTEA COIN (PTY) LTD
13
th
Respondent
OOSTENBERG
PATROLS CC
14
th
Respondent
SECHABA
PROTECTION SERVICES
WESTERN
CAPE (PTY) LTD
15
th
Respondent
BYERS
SECURITY SOLUTIONS (PTY) LTD
16
th
Respondent
ENTHAL
G FORCE SECURITY SERVICES CC
17
th
Respondent
HELIOS
SECURITY AND RISK MANAGEMENT CC
18
th
Respondent
ALL
4 SECURITY SERVICES
CC
19
th
Respondent
SILVER
SOLUTIONS 2616
CC
20
th
Respondent
RED
ANT SECURITY RELOCATION AND EVICTION
SERVICES
(PTY)
LTD
21
st
Respondent
Date
of hearing: 28 November 2018
Date
of judgment: 30 November 2018
JUDGMENT
SAVAGE
J:
Introduction
[1]
In
this urgent application the applicant, Mhonko’s Security
Services CC, seeks
interim
interdictory relief
against
the respondents pending the review of the award of a tender for the
provision of certain security services granted by the
first
respondent, the City of Cape Town (‘the City), and the
conclusion of any further tender process. The application is
opposed
by the City, as well as the fourth, fifth, eleventh, fifteenth,
eighteenth, nineteenth and twentieth respondents.
[2]
The
application is brought in two parts with only the urgent relief
sought in part A of the notice of motion currently before this
Court.
The
determination of
inter
alia
the
review of the award of the tender under Part B of the application
remains for determination at a later date. The urgent relief
currently sought by the applicant seeks
inter
alia
to
interdict the implementation of the tender for security services
awarded by the first, second and third respondents to the fourth
to
twenty first respondents in terms of City of Cape Town Tender
207S/2016/7 (’the tender’); and the termination of
the
ongoing unarmed guarding services provided by the applicant on a
month-to-month basis to the City; with a direction that the
current
contract between the applicant and the City be extended until the
completion of the review application and any subsequent
renewed
tender process.
[3]
The
City and the fourth, fifth, eleventh, fifteenth, eighteenth,
nineteenth and twentieth respondents oppose the application, in
the
first instance, on the grounds that it is not urgent. In the event
that the matter is found to be urgent, these respondents
contend that
the requirements for the grant of the interim interdictory relief
sought have not been met. The issue of urgency is
considered first.
Background
[4]
The
applicant was awarded on tender a contract to provide unarmed
guarding services to the City, which commenced in October 2014.
The
contract term ended in June 2017, following which it was extended on
a month-to-month basis thereafter. The last contract extension,
with
effect from 1 July 2018, was for a period of not more than six
months, alternatively until implementation of the new tender,
whichever occurred first.
[5]
On
10 May 2018 the City informed the applicant that its bid made in
respect of the new tender to provide unarmed guarding services
to the
City had been unsuccessful. On 31 May 2018 the applicant lodged its
appeal in terms of s 62 of the Municipal Systems Act
32 of 2000
against the decision. On 10 August 2018 the applicant was advised
that its appeal had been unsuccessful.
[6]
On
31 August 2018 the applicant’s attorneys wrote to the City
calling on it “
to
revisit its conclusion that the tender was non-responsive
”
and
consider again the applicant’s bid. In this letter it was
stated that “…
we
are instructed to consider bringing urgent proceeding to interdict
any award of the tender…”.
On
17 September 2018 the City wrote to the applicant. In this letter the
applicant was informed that the City was unable to reconsider
its
decision not to award the tender to the applicant. The applicant was
informed that five review applications had been launched
by other
unsuccessful bidders in respect of the 2017 tender process. This had
occurred on 24 August 2018. Those review applications
were by
agreement, on agreed expedited timeframes, heard during October 2018
by Williams AJ and judgment in the matters remains
reserved. On
30 October 2018 the City sent the applicant a letter notifying the
applicant of the termination of its provision
of its month-to-month
security services with effect from the end of November 2018.
[7]
On
15 November 2018, three months after having been informed that its
appeal had been unsuccessful, the applicant launched this
urgent
application. In the founding affidavit of Ms Buyelwa Eunice Bomela,
filed in support of the application, the issue of urgency
was
addressed as follows:
‘
61.Applicant
has pursued its appeal remedy and sought, vainly, to obtain from the
City necessary backing evidence for its case,
under PAIA. Applicant
has, through subsequent demand, attempted to persuade the city as to
the flaws of its process, that has been
rebuffed. Given this, the
City is quite clear and has been under no illusions as to the flaws
in their process and applicants intent,
throughout, to pursue this
matter, if necessary, in court (although this has always been the
least desirable route for many reasons).
62.
Applicant’s important PAIA request, which would have supported
its review (and to which the City has itself referred in
its letter
disclosing reasons of 21 May 2018), has been tardily handled by the
City and rejected on entirely spurious grounds.
The rejection of the
PAIA request was only responded to by the City on the 5
th
of October 2018.
63.The
Applicant thereafter sought legal advice, and instructed its
attorneys to brief counsel. Unfortunately, counsel chosen was
not
able to produce papers on an urgent basis. Other counsel had to be
sourced, and have managed to draft papers and bring this
application
within a week.
64.Should
this matter not to be entertained on an urgent basis the Applicant’s
employees stand to suffer irreparable harm.
65. The
termination later, although dated 30 October 2018, was only received
by me on to November 2018. Services as relating
to other areas under
this tender had not been terminated.
66.
The bringing of this application consequently (has) not being
inordinately delayed
.’
[8]
Mr
Oosthuizen
SC
for the City argued that the obvious question which arises and which
is not explained is why the applicant waited in excess of
three
months from 10 August 2018 until 15 November 2018 to launch this
application. The information requested of the City by the
applicant
might be relevant to the review but not to the interim relief sought.
Furthermore, it was argued that at all material
times the applicant
was legally represented, with the explanation as to the
unavailability of the chosen counsel stated to be “
feeble
and manifestly without merit
”
.
The urgency cannot be created by the decision of 30 October 2018 to
cancel the applicant’s services since that cancellation
decision is challenged in the review application (Part B) and the
cancellation amounts to the logical implementation of the tender
award decision, which the applicant knew would follow.
[9]
The
City submitted further that the applicant was aware that review
applications were launched in August 2018 by unsuccessful bidders
in
the same position of the applicant and that that application was, by
agreement, heard on an accelerated basis, with judgment
reserved. It
was submitted that on 21 November 2018, another unsuccessful bidder,
in WCHC case number 16617/18, brought an application
for urgent
interim relief which was struck from the roll for lack of urgency,
with costs. Furthermore, successful bidders have
already made
arrangements and incurred substantial expenses in preparation for the
takeover pursuant to the award of the tender.
For these reasons, the
City seeks that the matter be struck from the roll with costs for
lack of urgency.
[10]
The
fourth, fifth, eleventh, fifteenth, eighteenth, nineteenth and
twentieth respondents also oppose the application for an interim
interdict on the basis that it is not urgent. This was contended it
to be so in that the applicant had exhausted and internal remedies
on
10 August 2018 when its appeal was refused. Mr
Filand
for
these respondents argued that it was apparent from the letter dated
30 August 2018 addressed by the applicant’s attorneys
to the
City that the applicant had been aware that it could launch urgent
proceedings and legal advice would have made it apparent
that given
that the appeal had been concluded, the City could not revisit its
decision in regard to the tender. Furthermore, it
was stated on
opposing papers filed that steps had been taken and costs incurred to
commence with the provision of services in
respect of which these
respondents had been contracted with effect from 1 December 2018.
[11]
Mr
Sidaki
for
the applicant, heads of argument having been prepared with Mr
Masuku
SC,
submitted that the City does not deny that the matter is urgent but
claims that the applicant’s conduct undermined urgency.
It was
argued that the suggestion that there exists unreasonable delay is
premised on a misapprehension of the relevant facts.
This is so in
that the events that precipitated the bringing of the urgent
application for interim relief in Part A arose between
31 October
2018 and 2 November 2018, when the letter terminating the
month-to-month contract was received by the applicant. The
applicant’s conduct in relation to the urgent relief, it was
submitted, must therefore be assessed from 30 October 2018 and
not
from 17 September 2018 or before. This is so in circumstances in
which the applicant was given a month’s notice to pack
up its
operations, retrench its employees and close its business. Two weeks
after receipt of notice the urgent application was
launched, with the
timeframes imposed in the application and causing no prejudice to the
City.
Evaluation
[12]
It
is trite that urgency is a reason that may justify deviation from the
times and forms the rules prescribe. It relates to form,
not
substance, and is not a prerequisite to a claim for substantive
relief. Where an application is brought on the basis of urgency,
the
court is permitted in rule 6(12) to dispense with the forms and
service usually required and dispose of the matter in the manner
it
considers appropriate.
[1]
Rule
6(12)(b) requires that the applicant must set out the circumstances
on which it is averred that it is urgent and the reasons
why the
applicant claims that it cannot be afforded substantial redress at a
hearing in due course. A lack of urgency will entitle
a high court in
the exercise of its discretion to refuse to enrol a matter where the
ordinary forms and procedures have not been
followed, in which case
the matter may be struck from the roll.
[2]
[13]
An
applicant may not create its own urgency
[3]
and must bring an application at the first available opportunity,
since the longer it takes to do so may have the effect of diminishing
urgency.
[4]
It should be shown
that there will be an absence of substantial redress if the applicant
is not heard as a matter of urgency.
[14]
The
applicant has provided an armed guarding services to the City in
terms of contract awarded on tender to it. By agreement, the
contract
term was extended on month-to-month basis, from 2017 for an extended
period, until notice of termination of the contract
was given in a
letter dated 30 October 2018. The reason provided for the termination
was that the City was “operationalising”
the tender in
respect of which the applicant was unsuccessful and that is intended
with effect from 1 December 2018 to deploy new
service providers at
the sites currently being serviced by the applicants. The applicant
was aware that from 1 July 2018 it rendered
services on a
month-to-month basis, for a period of not more than six months,
alternatively until implementation of the new tender,
whichever
occurred first, and that one month’s notice of termination
could be given the applicant.
[15]
The
notice of extension of the contract for six months, or until
implementation of the tender, made it clear that a decision to
implement the tender granted could lead to an early termination of
the contract extension. The applicant would in July 2018, when
the
contract extension was granted, have been aware of the fact that such
an early termination may in due course arise. This is
so in that when
the applicant was informed that its appeal against its unsuccessful
bid in the tender process had not been successful,
it would also have
been apparent that if the City decided to implement the tender as
awarded, the six-month extension may be terminated
prior to the
conclusion of the six month period. The City’s decision to
terminate the act in accordance with its contract
with the applicant
does not in itself create urgency. This is all the more so when the
fact remained that the month-to-month contract
was in place given
that the tender process had not been concluded and the outcome
implemented. As a consequence, the month-to-month
contract was
directly related to the award and implementation of the tender. It
concerned the provision of the same services which
were the subject
matter of the tender and the six month contract had been granted on
the express basis that it may be terminated
as a result of the
implementation of the tender in due course.
[16]
As
from 10 August 2018, when the applicant was informed that its bid had
been unsuccessful, it was aware that the tender would not
be granted
to it. It would also have been aware that, as a result of the award
of the tender, the month-to-month contract would
come to an end. In
spite of this, and although the applicant’s attorneys had
threatened urgent proceedings, no steps were
taken for three months
to launch this urgent application. This was an extended and
inordinate delay, in my mind, and one which
was not explained
adequately by the applicant.
[17]
As
was stated in
Gallagher
v Norman’s Transport Lines (Pty) Ltd
[5]
the rules do not tolerate an illogical knee-jerk reaction to urgency.
The entitlement to deviate from the rules is dependent on
the urgency
which is shown to prevail and this must be of some marked degree. It
may not be self-created and a litigant may not
simply sit back
without taking steps to seek urgent relief, or seek such relief
without a full and proper explanation for any delay
in doing so.
[18]
On
the facts of this matter, I am not persuaded that the applicant acted
with the degree of haste that was required of it in this
matter. It
was aware from 10 August 2018 that its bid had been unsuccessful and
it is not open to it to approach to this Court
more than three months
later and claim urgency, when it did not treat the matter as urgent
itself. Nor did the termination of the
month-to-month contract, which
could only have been anticipated by the applicant when it was made
aware that its bid had failed,
create the required urgency for the
applicant. To find that it did would be to approach the issue of
urgency in the illogical and
knew-jerk matter cautioned against in
Gallagher.
[19]
The
merits of the application and relief sought in Part B of the notice
of motion remain to be determined in due course. As was
made clear in
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v CEO, SA
Social Security Agency and Others,
[6]
in the event of a finding of invalidity in respect of the award of
the tender, the affected decision or conduct must be declared
unlawful and a just and equitable order made. Such an order would
take account the constitutional principles governing public
procurement, with priority given to the public good, and the rights
or expectations of an unsuccessful bidder, such as the applicant,
will be assessed in this context. This will include any financial
consequences arising from the termination of the month-to-month
contract by the City.
[20]
For
all of these reasons, the view I take of this application is that it
falls be struck from the roll for lack of urgency. There
is no reason
why costs should not follow the result. I am not of mind to grant the
costs of two counsel.
Order
[21]
The
following order is made:
1.
The
application is struck from the roll for lack of urgency, with costs.
K
M SAVAGE
Judge
of the High Court
Appearances
:
For
Applicant: Mr T Sidaki (heads prepared by Mr T Masuku SC)
Instructed
by Godla & Associates
For
1
st
to 3
rd
Respondent: Mr AC Oosthuizen
SC and Mr N de Jager
Instructed
by Herold Gie Broadhead Inc.
For
4
th
,
5
th
,
11
th
,
18
th
,
19
th
and 20
th
Respondents: Mr D Filand
Instructed
by Swartz Hess Atttorneys
[1]
Commissioner
for South African Revenue Service v Hawker Air Services (Pty)
Ltd; Commissioner for South African Revenue Service
v Hawker
Aviation Services Partnership and Others
[2006]
ZASCA 51
;
2006 (4) SA 292
(SCA) ;
[2006] 2 All SA 565
(SCA) at para
9.
[2]
Ibid.
[3]
East
Rock Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd
[2012]
JOL 28244
(GSJ at para 7.
[4]
Collins
t/a Waterkloof Farm v Bernickow NO and Another
[2001]
ZALC 223.
[5]
1992
(3) SA 500
(W) at 502I – 503A.
[6]
2014
(1) SA 604
(CC);
[2013] ZACC 42
at para 56.