Robcon Civils/ Sinawamandla 2 Joint Venture v Kouga Municipality and Another (2106/09) [2010] ZAECPEHC 8; 2010 (3) SA 241 (ECP) (4 March 2010)

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[2010] ZAECPEHC 8
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Robcon Civils/ Sinawamandla 2 Joint Venture v Kouga Municipality and Another (2106/09) [2010] ZAECPEHC 8; 2010 (3) SA 241 (ECP) (4 March 2010)

FORM A
FILING SHEET FOR EASTERN CAPE,
PORT ELIZABETH
NOT REPORTABLE
PARTIES
:
ROBCON CIVILS / SINAWAMANDLA 2 JOINT VENTURE
Case
Number:
2106/09
High
Court:
PORT
ELIZABETH
DATE
HEARD:
25
FEBRUARY 2010
DATE
DELIVERED:
4
MARCH 2010
JUDGE(S):
EKSTEEN
J
LEGAL
REPRESENTATIVES –
Appearances:
for
the Plaintiff(s):
ADV
ENGELA
for
the Defendant(s):
ADV
SCHUBART
Instructing
attorneys:
Plaintiff(s):
MASIZ
HARKER INC
Defendant(s):
SCHOEMAN
OOSTHUIZEN INC
CASE
INFORMATION -
Nature
of proceedings
:
Key
Words
:
Summary:
IN
THE HIGH COURT OF SOUTH AFRICA
NOT
REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case
No.: 2106/09
Date
delivered: 4 March 2010
In
the matter between:
ROBCON
CIVILS / SINAWAMANDLA 2 JOINT VENTURE
Applicant
and
KOUGA
MUNICIPALITY
First Respondent
AFRICAN
BULK EARTHWORKS (PTY) LTD
Second Respondent
JUDGMENT
______________________________________________________________
EKSTEEN
J:
[1]
This
matter concerns costs incurred in respect of the launching of an
application by the applicant in which it sought and order against
the
first respondent to provide it with certain documentation and
information relating to the adjudication and award by the first
respondent of a tender to the second respondent and an interim
interdict against the first respondent restraining it from entering
into a contract with the second respondent.
[2] During January
2009 the first respondent invited tenders for the construction of an
access road in Oceanview, Jeffreys Bay. Aurecon
South Africa (Pty)
Limited (Aurecon) were appointed by the first respondent to act as
its consultants in the management and execution
of the tender
26/2009. It is not in dispute that Aurecon acted at all times as the
duly authorised agent of the first respondent
in its interaction with
tenderers.
[3] Tenders closed at noon on 6 March
2009 and the validity period of tenders was stipulated to be eight
weeks from the closing date.
The applicant duly complied with the
tender conditions and submitted a tender which was timeously
received.
[4] On 5 May 2009
the applicant received a letter from one Johan van der Mescht, acting
on behalf of Aurecon wherein he stated that
the tender validity
period had expired on 24 April 2009 and that the first respondent had
requested Aurecon to confirm whether the
first respondent, and other
tenderers, would agree to the validity period being extended by 30
days with the revised expiry date
being 24 May 2009. The applicant
agreed to this request. On 19 May 2009, however, the applicant
received an email from the said
van der Mescht, on behalf of Aurecon,
in which he records as follows:
“
We received an email from the
client today informing us that we must go ahead and appoint African
Bulk Earthworks as the contractor
for the above project. Our tender
report recommended your company as the preferred contractor, but, as
far as I know the client
has the final say in the matter.”
[5]
In
the light hereof the applicant immediately called upon its attorneys,
Mills & Lombard, to address both Aurecon and the municipal
manager of the first respondent requesting further details and
information regarding the alleged award of the tender. Their letter,
dated 21 May 2009, records as follows:
“
We have been
instructed by our client to appeal the decision to award the contract
to Africon Bulk Earthworks. To enable us to formalise
our appeal and
reasons we urgently require the following information from you:
1.
Names
of the Panel that evaluated the different bids as received in
respect of the tender advertised for the construction of
the
access road.
2.
The
score sheets of every member of the panel evaluating the different
bids.
3.
Exact
details of the specific criteria used by the evaluating panel to
determine what points should be allocated to each bid
for
experience, expertise and methodology.
4.
Where
in the tender document has the criteria that would be utilise to
determine the points to be allocated in respect of the
experience,
expertise and methodology been set out. …”
[6]
This
letter elicited no immediate response from the municipal manager,
however, on 25 May the said van der Mescht, on behalf of Aurecon
responded requesting an extension of the tender validity period to 6
July 2009. This request was promptly accepted by the applicant.
The
letter of 25 May, however, made no mention of the correspondence
forwarded to Aurecon and the municipal manager on 21 May.
The only
logical conclusion to be drawn from the request to extend the tender
validity period seems to be that the first respondent
was
reconsidering the award of the tender and that no final decision had
yet been made. In order to clarify this the applicant addressed
a
further letter to Mr van der Mescht in which it specifically referred
to its earlier correspondence of 21 May 2009 and requested
van der
Mescht to acknowledge receipt thereof. The applicant therein
recorded its understanding that the “
dies”
allowed for a disappointed tenderer to lodge an appeal in terms of
section 62
of the
Local Government: Municipal Systems Act, 32 of
2000
, are similarly extended consequent to the request for an
extension of the validity period. The said section affords a
disappointed
tenderer twenty one days from the date of notification
of the tender award to lodge an appeal against such decision. It
appears
accordingly that what the applicant records is its
understanding that the prior notification of the tender award no
longer applied.
This accords with its understanding that the award
of the tender was to be reconsidered.
[7]
In
response to this communication Mr van der Mescht did indeed respond
acknowledging receipt of the applicant’s letter dated 21
May 2009.
Mr van den Mescht records as follows:
“
Our subsequent request for an
extension of the tender validity period on behalf of our client, the
Kouga Muncipality, was to allow
specific time for the matter to be
resolved.”
[8]
No
explanation is given in respect of what matter needed to be resolved.
In my view the applicant would have been entitled to assume,
as it
appears to have done, that the award of the tender was to be
reconsidered. The applicant caused a further email to be sent
to Mr
van der Mescht at Aurecon on 4 June 2009 requesting information in
regard to further developments. Van der Mescht responded
on the
following day recording as follows:
“
There is nothing
from our side. Bear in mind that we can do nothing without our
client’s consent. To date we have not received
any further
instructions with respect to proceeding with the project.”
This appears to
fortify the view held by the applicant. Indeed on 6 July 2009 van
der Mescht requested a further extension of the
tender validity
period to 17 August 2009. The applicant promptly agreed thereto.
[10]
On
8 July 2009 the municipal manager of the first respondent reacted, at
last, to the applicant’s letter dated 21 May 2009 to which
reference has been made above. He formulated a response as follows:
“
You are hereby advised to follow
the procedures prescribed in the Promotion of Access to Information
Act, Act 2 of 2000, in order
to obtain the requested information.”
[11] This response,
the first respondent contends, was sent by ordinary mail. It does
not disclose the date upon which it was mailed
and no mention is made
of this letter in the applicant’s founding papers which were
attested to on 31 July 2009. On the papers
before me I cannot
determine whether this letter had or ought to have been received by
the applicant’s prior to launching the application.
[12] On 15 July
2009 the “Daily Tenders Consultant” published on their website a
notice stating that the tender had been awarded
to the second
respondent. Upon learning of this event the applicant telephonically
contacted the said van der Mescht on 16 July
2009. Van der Mescht
confirmed the award of the tender to the second respondent.
[13] Pursuant to
this notification and on 21 July 2009 the applicant again caused a
letter to be dispatched by fax transmission from
its attorneys,
addressed both to Aurecon and to the municipal manager of the first
respondent in which it sought an unequivocal undertaking
that the
first respondent would not implement or act in any way on the
decision to award the contract in respect of which the applicant
intended to appeal until the appeal had been finalised. It sought
further an unequivocal undertaking that the first respondent would
not conclude a contract with the second respondent or hand over the
site to the second respondent until such time as the applicant’s
appeal had been finally adjudicated on. In this letter it also
renewed its request for documentation and declared that unless the
documents were received before 24 July 2009 it would approach the
High Court as a matter of urgency. This letter elicited no response
whatsoever and accordingly the application was launched as a matter
of urgency on 31 July 2009.
[14] The matter was
set down for 4 August 2009. The first respondent required time to
deal with the affidavits and the matter had
to be postponed. The
costs of the postponement on 4 August 2009 were reserved for later
adjudication.
[15] When the first
respondent ultimately came to reply it emerged that the second
respondent had been informed on 6 May 2009 that
the contract had been
awarded to it. This so called “initial award” had never been
retracted and in fact the contract had been
finally concluded on 21
July 2009, the very day upon which an undertaking had been sought
from the first respondent not to enter
into such contract prior to
the appeal having being heard. The site was handed over on the same
day.
[16]
Section 62(3)
of the
Local Government: Municipal Systems Act 32 of 2000
provides,
in respect of an appeal against the decision to award a contract,
that-
“
the appeal
authority must consider the appeal, and confirm, vary or revoke the
decision but no such variation or
revocation
of a decision may detract from any rights that may have accrued as a
result of the decision.”
[17]
It
follows that once the contract had been concluded the relief sought
by the applicant had been rendered largely nugatory and the
applicant
accordingly resolved not to proceed with the application. Hence the
enrolment of the application in respect of the issue
of costs which
remains in dispute.
[18] The entire
procurement process of an organ of state, which the first respondent
is, is required to comply with the provisions
of section 217 of the
Constitution of the Republic of South Act, Act No. 108 of 1996.
Section 217 requires of the first respondent
to act in accordance
with the system which is “fair, equitable, transparent, competitive
and cost effective”. In terms of
section 62(1)
of the
Local
Government: Municipal Systems Act, 32 of 2000
a disappointed
tenderer is required to lodge any appeal against the decision to
award a contract within twenty one days of the date
of notification
of the decision. That notification was received on 19 May 2009.
Immediately, within two days of the receipt of
the notification the
documentation which forms the subject matter of the current
application was requested through the attorneys
of the applicant.
The immediate response to this communication received from Aurecon
was to request an extension of the tender validity
period of all
tenders. I have already stated that in my opinion the only
reasonable inference to be drawn from this was that the
original
allocation of the tender had been withdrawn and fell to be
reconsidered. Subsequent correspondence and repeated requests
for
the extension of the tender validity period appears to confirm this
conclusion. The first respondent itself, did not respond
to this
request until 8 July 2009 and then such response was dispatched by
surface mail.
[
19] At
all times after 21 May 2009 up to the launching of the application
the first respondent knew of the applicant’s intention
to appeal
the decision to award the contract to the second respondent. Not
only did it lull the first respondent into a false sense
of security
through the repeated requests for an extension of the tender validity
period and ambiguous correspondence from Aurecon
but, in the face
thereof, proceeded to conclude a final contract with the second
respondent on the very day that it had been requested
to give an
undertaking that it would not so do. In my view the conduct of the
first respondent in this procurement process was not
fair, not
equitable and not transparent.
[20] I turn to the
first respondent’s response to the request for information. This
response has previously been considered in
the Supreme Court of
Appeal. In
Tetra
Mobile Radio (Pty) Limited v MEC Department of Works and Others
2008 (1) SA 438
at 444C the Supreme Court of Appeal held as follows:
“
[13] The argument advanced by the
institutional respondents that the appellant should have followed the
procedure set out in the
Promotion of Access to
Information Act 2 of 2000 (PAIA) cannot be upheld. One has only to
look at the disparity between the time frames
prescribed for the
request for information under the Procurement Act (s 20) and those
laid down for access to information under PAIA
(ss 74 - 77) to
conclude that the latter Act is irrelevant to the
appellant's claim.”
[21] Admittedly that matter dealt with
a demand for information in terms of the KwaZulu Natal Procurement
Act 3 of 2001. I consider,
however, that by parity of reasoning the
same applies when one has regard to the time frames set out in the
Local Government: Municipal Systems Act as
compared to those set out
in the Promotions of Access to Information Act. The response of the
first respondent, which was only forthcoming
a mere two weeks before
it concluded a binding agreement with the second respondent, was
accordingly not justified and served only
to frustrate any attempt on
the part of the applicant to lodge an appeal, as it was entitled to
do.
[22] In consequence of the aforesaid
conduct of the first respondent the application, when it was
ultimately launched, had already
been overtaken by events and little
purpose could be served by the continuation of the application. The
first applicant contends,
nevertheless, that I should not only award
the costs of the application to the first applicant but, as a token
of the Court’s disapproval
of the conduct of the first respondent
in breach of its Constitutional duty, I should award costs on a scale
as between attorney
and client against the first respondent.
[23] On behalf of the first respondent
it is submitted that the applicant knew of the award of the tender on
19 May 2009 and that
it was incumbent upon the applicant to take
steps to protect its interests thereafter. In these circumstances
the first respondent
contends that the applicant has created its own
urgency and that it was not justified in bringing the application in
the manner in
which it did and that I should accordingly order the
applicant to pay the costs of the application, alternatively that the
applicant
should at least pay the costs occasioned by the appearance
on 4 August 2009.
[24] I do not agree that it was
incumbent upon the applicant to start taking steps in May 2009. I
have referred above to the misleading
correspondence including the
repeated requests for the tender validity period to be extended.
These requests could serve no logical
purpose once a decision had
been taken to award the contract and I consider that applicant’s
understanding of these events was
reasonable. The applicant
requested material to which it was entitled during May 2005. It did
not enjoy the courtesy of a response
from the municipal manager for
at least six weeks after the request was made and was lulled into a
false sense of security by the
correspondence received from Aurecon.
I consider that the first respondent acted in breach of its
constitutional obligations imposed
in section 217 of the
Constitution. The following remarks of Van Coller J in
Oosthuizen
v LUR Plaaslike Regering en Behuising en ‘n ander
2004 (1) SA 492
(A) are apposite to the present matter:
"Dit wil
voorkom dat daar eintlik geen rede bestaan waarom die inligting nie
behoorlik verstrek is nie. Indien dit wel behoorlik
verstrek is, sou
daar bes moontlik geen aansoek gewees het nie. Die volgende
opmerkings van Colman R aangaande die optrede van die
respondent in
die saak van
Howie
NO v Essey
1963
(3) SA 402 (T)
op
404A - B is na my mening ook hier van toepassing.
'In
my judgment the respondent's behaviour was unreasonable,
unco-operative, and discourteous. If she had behaved properly, and I
am speaking now not about compliance with legal obligations but
merely with normal and reasonable courtesy in a matter of business,
the application would probably not have had to be made. In these
circumstances I am not disposed to disallow any part of the
applicant's
costs.'
In
die lig van al die omstandighede is ek van mening dat dit billik sal
wees indien geen kostebevel in hierdie aansoek gemaak word
nie.“
[25] In the present matter, it is of
course not merely reasonable courtesy which is in issue but indeed
the first respondent’s flagrant
disregard for its constitutional
obligations. Whilst it may be so that the first applicant afforded
the respondents merely one court
day to respond when it launched the
application I consider that the conduct of the first applicant which
gave rise to the application
in the first place far outweighs this
consideration. In the circumstances it would be appropriate to order
the first respondent
to pay the costs of the application, including
the costs which were reserved on 4 August 2009, on a scale as between
attorney and
client.
[26] It is accordingly ordered that
the first respondent pay the costs of the application, including the
costs reserved on 4 August
2009, on a scale as between attorney and
client.
________________________
J W EKSTEEN
JUDGE OF THE HIGH COURT