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[2016] ZAGPJHC 95
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Asatico Civil and Construction (Pty) Ltd v Ekurhuleni Metropolitan Municipality (149200/2015) [2016] ZAGPJHC 95 (4 May 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 149200/2015
DATE:
04 MAY 2016
In
the matter between:
ASATICO
CIVIL AND CONSTRUCTION (PTY)
LTD
.......................................................
Applicant
And
EKURHULENI
METROPOLITAN
MUNICIPALITY
.....................................................
Respondent
JUDGMENT
DAVIS
AJ
[1]
In this matter I granted summary judgment against the Respondent by
way of a judgment dated 24 November 2015. The Respondent
applied for
leave to appeal and this is my judgment on the Respondent’s
application for leave to appeal to a Full Bench of
this Division.
For ease of reference and sake of convenience the parties shall be
referred to as Plaintiff and Defendant respectively.
[2]
Without reiterating the salient facts found in the judgment (and
which were not attacked in the application for leave to appeal),
the
position is the following:
2.1
Pursuant to a timeously delivered compliant bid by the Plaintiff, the
Defendant’s Bid Adjudication Committee resolved
on 7 March 2012
to award a contract for the rendering of infrastructure services for
the upgrading and construction of roads and
stormwater infrastructure
on an “as and when required basis with effect from date of the
award until 31 December 2013”.
2.2
The award was “… at an average estimated contract amount
of R67 985 731.04” subject to escalation based on
the CPA with
base month being September 2011.
2.3
During the period between March 2012 and October 2013 the Plaintiff,
on instructions by the Defendant from time to time delivered
services
at various specified streets in various townships and performed
stormwater reticulation, sidewalks and road infrastructure
works.
2.4
For purposes of these “as and when” works, the Defendant
had issued 7 “letters of instruction to perform work”,
copies of which were annexed to the Particulars of Claim.
2.5
As a result of the aforementioned performance of works, the Defendant
made payments to the Plaintiff from time to time the total
amount
being R60 034 035.45. The Defendant has confirmed this in writing
whilst further confirming the following:
“
However
it must be noted that an amount of R8 735 569.76 is still being
processed for payment and is due and payable.”
(This
letter of confirmation was dated 2 April 2014 and referred to the
works time period having expired on 31 December 2013.)”
2.6
After certain payments, the Plaintiff issued a demand of R5 856
931.76 and, after further payments, instituted the present action
for
the outstanding balance of R2 860 002.75.
[3]
The relevant applicable portion of
Section 17
of the
Superior Courts
Act, No. 10 of 2013
provides that:
“
17(1) Leave
to appeal may only be given where the judge or judges concerned are
of the opinion that –
(a)
(i) the appeal would have a reasonable prospect of success …”
[4]
In argument in support of the Defendant’s application for leave
to appeal, the Defendant relied on the same four “defences”
referred to in paragraph [3] of my judgment. These were the four
defences relied on in the affidavit resisting summary judgment
and
are the following:
“
3.1
The amount claimed has not been agreed upon.
3.2
The amount claimed exceeds the amount in the appointment letter.
3.3
Unlawful instructions.
3.4
The Applicant’s appointment is invalid.”
[5]
Ad “the amount claimed has not been agreed upon”:
5.1
In the Defendant’s affidavit resisting summary judgment this
defence was based on the statement that “… the
Respondent has not agreed to pay the Applicant the amount claimed in
these proceedings …”. A further allegation was
made
that the work allegedly done first had to be “assessed to
determine whether or not it is worth the amount claimed in
these
proceedings”.
5.2
In view of the vagueness of the contents of the affidavit resisting
summary judgment and in view of the Defendant’s own
written
admission to which I had referred to above (which was not denied or
placed in dispute) I am unable to form the opinion
that the Defendant
has a reasonable prospect that on appeal a Full Bench could find that
a bona fide defence has been disclosed
in this regard.
[6]
Ad the alleged exceeding of the amount in the appointment letter:
6.1
The appointment letter firstly refers to an average amount.
Secondly, it is exclusive of VAT. Thirdly it needs to be increased
with the annual CPA. If all this is done, then the total amount
claimed by the Plaintiff does not exceed the amount in the
appointment
letter.
6.2
There is furthermore no explanation by the Defendant on this aspect
when reference is had to the admissions contained in the
confirmation
letter of 2 April 2014.
6.3
I am similarly unable to form the opinion that the Defendant has a
reasonable prospect that a Full Bench on appeal can find
that a bona
fide defence has been disclosed in this regard.
[7]
Ad unlawful instructions:
In
similar fashion as in the main application, it was conceded that this
“defence” is dependant on the “defence”
based
on the invalidity of the appointment.
[8]
Ad invalid appointment:
8.1
The Defendant contends that the award of the tender after the expiry
date of the bids was invalid and unlawful.
8.2
In this regard I was yet again referred to the judgment of Southwood
J in Telkom SA Ltd v Merid Trading (Pty) Ltd and Others
(as dealt
with in paragraph [7] of my judgment).
8.3
Having regard to the abovementioned decision and the various other
cases referred to in my judgment, I concluded that the Defendant’s
argument that once the validity periods of proposals in a procurement
process have lapsed, any acceptance of such proposals and
also any
appointments pursuant to such acceptance would constitute
constitutionally invalid administrative acts, was correct.
8.4
Despite the aforesaid, it remained a fact that at no stage during the
existence of the contract period nor up to the date of
confirmation
of amounts due, owing and payable by the Defendant on 2 April 2014
nor at any stage prior to or subsequent to the
Plaintiff’s
various demands and at no stage further up to institution of action
or thereafter up to the date of the hearing
of the summary judgment
application (and subsequently also neither up to date of the
application for leave to appeal) had the Defendant
taken any steps to
have the existing (invalid) administrative act reviewed or set aside.
8.5
In my view the “Oudekraal principle” still finds
application namely that until an invalid administrative action
is set
aside by a court in proceedings for judicial review, it exists in
fact and has legal consequences that cannot simply be
overlooked.
8.6
In the present instance, the invalid administrative act had taken
place on 7 March 2012. The contract period to which the invalid
act
applied, had expired in December 2013. The work which the Plaintiff
performed and for which it claimed payment took place
within this
period.
8.7
The Defendant’s confirmation that the work had been done and
that an amount was due and payable for it took place on 2
April 2014.
8.8
In the above circumstances, the “legal consequences” of
the invalid administrative act as referred to in Oudekraal
Estates
(Pty) Ltd v City of Cape Town and Others 2004(6) SA 222 (SCA) and MEC
for Health, Eastern Cape and Another v Kirkland Investments
(Pty) Ltd
t/a Eye and Laser Institute 2014(3) SA 481 (CC) and Bengwenyama
Minerals v Genorah Resources (Pty) Ltd 2011(4) SA 11
(CC) are all
applicable.
8.9
One should also have regard to the factual consequences of the
invalid act as referred to in Moseme Road Construction CC v King
Civil Engineering Contractors (Pty) Ltd 2010(4) SA 359 (SCA) at [15]
– [19] and the cases referred to there including the
Sapela-case referred to in my judgment.
8.10
Taking the above into consideration, I yet again had regard in the
judgment to Chairperson, Standing Tender Committee and Others
v JFE
Sapela Electronics (Pty) Ltd and Others 2008(2) SA 638 (SCA) and
annotations thereof.
8.11
In the present instance, all the work had already been performed and
completed in terms of the invalid administrative act and
no facts had
been disclosed in the Defendant’s affidavit resisting summary
judgment why the present matter should not be
treated in the same
manner as in the Sapela-case. Counsel for the Defendant reiterated
that the Defendant had not been obliged
to do so but in my view that
submission flounders on the requirement that that is exactly what the
Defendant was supposed to so,
namely disclose a bona fide and valid
defence.
8.12
In my view in the present circumstances it is not enough for the
Defendant to simply ex post facto point to the invalidity
of the
administrative act without adducing any facts or evidence as to what
the consequences of such invalidity should be.
8.13
I am unable to conclude or form the opinion that, in these
circumstances, the Defendant has a reasonable prospect of success
that a Full Bench on appeal can simply find that the raising of the
invalidity issue constitutes a sufficient answer to the principles
enunciated by the Supreme Court of Appeal and the Constitutional
Court in the cases to which I had referred or that the requirements
resisting summary judgment have been met.
[9]
The application for leave to appeal is therefore refused with costs.
N
DAVIS
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION
JOHANNESBURG