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[2013] ZAECPEHC 60
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Searle and Others v Road Accident Fund and Others (3191/2013) [2013] ZAECPEHC 60 (31 December 2013)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE LOCAL DIVISION, PORT ELIZABETH)
Case No: 3191/2013
Date heard: 12/12/13
Date delivered: 31/12/13
Not reportable
In the matter between:-
JOUBERT GALPIN
SEARLE 1ST
APPLICANT
REHANA KHAN PARKER &
ASSOCIATES 2ND
APPLICANT
Z ABDURAHMAN
ATTORNEYS 3RD
APPLICANT
and
THE ROAD ACCIDENT
FUND 1ST
RESPONDENT
BATE CHUBB &
DICKSON 2ND
RESPONDENT
FRIEDMAN
SCHECKTER 3RD
RESPONDENT
POTELWA &
COMPANY 4TH
RESPONDENT
MNQANDI
INC. 5TH
RESPONDENT
KETSE NONKWELO
INC. 6TH
RESPONDENT
RAHMAN
INC. 7TH
RESPONDENT
TAU PHALANE
INC. 8TH
RESPONDENT
TOMLISON MNGUNI JAMES
9TH
RESPONDENT
T M CHAUKE
INCORPORATED 10TH
RESPONDENT
DWARIKA NAIDOO &
COMPANY 11TH
RESPONDENT
MATTHYSEN & VAN VUUREN
12TH
RESPONDENT
EDWARD NATHAN
SONNENBERGS 13TH
RESPONDENT
MAYAT NURICK
14TH
RESPONDENT
LINDSAY
KELLER 15TH
RESPONDENT
SISHI
INCORPORATED 16TH
RESPONDENT
FOURIE FISMER
INC. 17TH
RESPONDENT
MOHLALA
ATTORNEYS 18TH
RESPONDENT
LINDA MAZIBUKO &
ASSOCIATES 19TH
RESPONDENT
MAYATS
ATTORNEYS 20TH
RESPONDENT
SHEREEN MEERSINGH &
ASSOCIATES 21ST
RESPONDENT
DIALE
MOGOSHOA 22ND
RESPONDENT
NOSUKO
NXUSANI 23RD
RESPONDENT
MNQANDI
INC. 24TH
RESPONDENT
MARIBANA
MAKGOKA 25TH
RESPONDENT
GOVINDASAMY NDZINGI GOVENDER
INC. 26TH
RESPONDENT
KESI
MOODLEY 27TH
RESPONDENT
TSEBANE MOLABA
INC. 28TH
RESPONDENT
HAJRA PATEL
INC. 29TH
RESPONDENT
DUDUZILE HLEBELA
INC. 30TH
RESPONDENT
ROBERT
CHARLES 31ST
RESPONDENT
MATHOBO RAMBAU
SIGOGO 32ND
RESPONDENT
NONGOGO NUKU
INC. 33RD
RESPONDENT
BOKWA
ATTORNEYS 34TH
RESPONDENT
Award of
tenders – application for interim interdict pending review of
award of tenders – requirements for interim interdict
–
no apprehension of irreparable harm established by applicants –
applicants not establishing that balance of convenience
favours them
– application dismissed with costs.
JUDGMENT
PLASKET, J:
[1] During 2012, the Road Accident Fund (RAF) –
the first respondent – called for tenders from firms of
attorneys to
act on its behalf in litigation arising from motor
vehicle accidents. Joubert, Galpin & Searle (JGS) – the
first applicant
– is a Port Elizabeth-based firm of attorneys
that has been a member of the RAF’s panel of attorneys for
about ten
years. It tendered unsuccessfully to remain on the panel.
The RAF has given it notice of the termination of the contract with
it,
effective from 31 December 2013. JGS launched these proceedings
as a matter of urgency. It claims relief in two parts: first, it
claims interim relief aimed at stopping the implementation of the
tenders by the RAF pending the determination of its application
to
review and set aside the tenders; and secondly, it has applied in
terms of rule 53 of the uniform rules to review and set aside
the
award of the tenders.
[2] After the proceedings were launched, the new
panellists were joined as respondents. Some of them have chosen to
oppose the relief
sought at both the interim and final stages. Two
unsuccessful tenderers – Rehana Kahn Parker & Associates
and Z Abdurahman
Attorneys, both of Cape Town – applied to be
joined as applicants, and were joined as the second and third
applicants respectively.
At the hearing of this matter, a lawyers
association representing some 700 lawyers country-wide, the Black
Lawyers Association
(BLA), applied successfully to be joined as the
fourth applicant. (The BLA was not a party to the application for
interim relief.
It was only joined as an applicant at the end of the
hearing.)
[3] These developments, coupled with the sheer bulk
of the papers – over 2 000 pages – and delays in the
furnishing
of the record, which runs to about 6 000 pages, meant
that the review was not ripe for determination. It has been agreed
that
I shall hear it on 5, 6 and 7 February 2014. The parties were
unable to reach an agreement on an interim arrangement pending the
hearing in February 2014 and so the issue of interim relief was
argued before me, and is the subject-matter of this judgment.
[4] The RAF gave an undertaking that to the extent
that the applicants have instructions from it, they may continue to
discharge
those instructions until the review is finalised. The
practical result of this undertaking is that the applicants will not
have
to hand over their RAF files at the end of 2013 but can continue
with the work they have, while the RAF will be able to begin to
instruct new panellists.
[5] The applicants took the view that the undertaking
did not provide sufficient protection for them. They persisted in
claiming
relief in the following terms:
‘
2.
That the decision of the First Respondent to award the tender
RAF/2012/00021: Panel of Attorneys for the Road Accident Fund to
provide Specialist Litigation Services (the “Tender”) in
South Africa and the further implementation (to the extent
that this
has occurred) by both the First Respondent and any of the Second to
Thirty Fourth Respondents, be suspended pending the
finalisation of
Part B of the notice of motion;
3.
In the alternative to paragraph 2 above, that the decision of the
First Respondent to award the tender in the Eastern and Western
Cape
and the further implementation (to the extent that this has occurred)
by both the First Respondent and any of the Second to
Thirty Fourth
Respondents, be suspended pending the finalisation of Part B of the
notice of motion;
4.
That the First Respondent is directed, to the extent necessary, to
extend the agreement between it and its panel attorneys to
ensure no
disruption to the legal services which the First Respondent requires
on an ongoing basis, pending the finalisation of
Part B of the notice
of motion;
5.
As to the costs in respect of Part A of the notice of motion, that
the First, Tenth, Twenty Second and 30
th
Respondents be
ordered to pay the First, Second and Third Applicants’ agreed
or taxed party and party costs, jointly and
severally, the one paying
the others to be absolved, such costs to include the costs of 2 (two)
Counsel;
6.
That the First, Second and Third Applicants be granted such further
and/or alternative relief as this Honourable Court may deem
fit.’
The facts
[6] I turn now to the facts. I shall do so briefly.
I shall then address whether the matter is urgent before turning to
whether
the requirements of an interim interdict have been
established.
[7] When the RAF called for tenders in July 2012, it
made it clear that any offers made by tenderers would only be binding
and open
for acceptance during a validity period. That period was 90
days and it began to run from the closing date for bids on 20 August
2012.
[8] Although the RAF’s Bid Evaluation Committee
(BEC) dealt with the bids that had been submitted, and furnished a
report
to the RAF’s Procurement Control Committee (PCC), before
the expiry of the validity period, the PCC only met to consider the
BEC’s evaluation report two weeks after the validity period had
expired. It took a decision that bidders who had not submitted
certificates of good standing for individual attorneys should be
disqualified and remitted the matter to the BEC. In January 2013,
the
PCC considered a revised evaluation report submitted to it by the BEC
which recommended the appointment of various of the bidders.
The PCC
resolved that audits should be conducted and later, in February 2013,
it directed the BEC to correct certain mistakes in
the evaluation of
the bids. The process was finalized by 28 February 2013.
[9] In March 2013, the regularity of the process was
first called into question. The RAF took advice, including an opinion
from
its attorneys, Webber Wentzel. This opinion dealt with two
options. They were either to initiate a new tender process, an option
that was described as being ‘more risk averse’, and a
notice and comment process calling on bidders to give their views
on
extending the validity period. The second option was decided upon by
the RAF Board on 29 July 2013, even though Webber Wentzel
warned that
legal challenges could be expected.
[10] Letters were sent to bidders requesting their
views on the extension of the validity period, even though decisions
had already
been taken as to who was successful and who was not. JGS
and other bidders expressed reservations about the proposed extension
of the validity period but agreed to the proposal nonetheless. The
unsuccessful bidders were informed of the outcome of the tender
process on 16 August 2013.
[11] The decisions to award tenders to the second to
thirty fourth respondents is the subject-matter of the review. On 21
August
2013 JGS made a request in terms of s 5 of the Promotion of
Administrative Justice Act 3 of 2000 (the PAJA) for reasons for its
bid being unsuccessful. On the same day, it also made a request in
terms of the Promotion of Access to Information Act 2 of 2000
(the
PAIA) for access to the information upon which the tender decisions
were taken. On 9 September 2013, JGS received what purported
to be
reasons: it was informed that its bid had been unsuccessful because
other bidders scored higher than it did. More correspondence
ensued
between JGS and the RAF on the adequacy of the reasons and on the
request for access to information. Eventually, on 21 October
2013,
JGS launched an application in terms of PAIA for the information that
it had requested.
[12] By the last week of October 2013, the successful
bidders had signed and returned to the RAF the service level
agreements that
would regulate their relationship with the RAF. This
led JGS to demand an undertaking that the award of the tenders would
not be
implemented until its validity had been determined. No
undertaking was forthcoming. On 1 November 2013, JGS launched this
application.
[13] It was only on 13
November 2013, when the RAF filed its answering affidavit, that
portions of
the record became available to JGS. On 22 November 2013 a
much fuller record, comprising of some 5 000 pages, was filed by
the RAF. Even that was not a complete record and, on 6 December 2013,
further documents, comprising of 140 pages, forming part
of the
record were provided. On 9 December 2013, a further 1 100 pages
were furnished. Despite this, the record remained incomplete.
The
matter was heard on 12 December 2013.
Urgency
[14] The papers now run to over 2 000 pages and
the record is over 6 000 pages long. Two and a half months
passed from
when the decisions under challenge were taken to when the
application, for both interim relief and for the review and setting
aside
of the impugned decisions, was launched. During that time a
great deal of correspondence passed between the RAF and JGS
concerning
reasons for the decision, access to the record and other
matters related to the case, including the possibility of negotiating
a settlement. Clearly, JGS did not sit idle during this period.
[15] It was not, in my view, unreasonable for JGS to
request reasons and the information relating to the RAF’s
decision-making
before launching its application. It is apparent too
that the RAF was not particularly cooperative in this regard, even
taking
the position that information would not be provided to JGS
without following ‘the entire formal PAIA process’, an
attitude,
I would have thought, that flies in the face of the spirit
and tenor of the PAIA.
[16] In these
circumstances, and in view of the pending implementation of the
tenders and the termination of the RAF’s contract
with JGS and
the other applicants, I am of the view that the matter is urgent and
the urgency was not self-created.
[1]
Interim relief
[17] I turn now to the main issue for determination
at this stage, namely whether a case has been made out for the grant
of an interim
interdict pending the determination of the review.
[18] An applicant who
applies for an interim interdict must establish: (a) the right that
forms the subject matter of the main application
and which he or she
seeks to protect, on a
prima facie
basis at least (even if it is open to some doubt); (b) a well-
grounded apprehension that, if the interim interdict is not granted
and the main application succeeds in due course, he or she will
suffer irreparable harm; (c) the balance of convenience favours
the
granting of interim relief; and (d) he or she has no other
satisfactory remedy.
[2]
[19] I do not intend
dealing in any detail with the first element, the existence or not of
a
prima facie
right. Suffice it to say that: (i) the right that forms the
subject-matter of the main application is the right of JGS and the
other applicants to review and set aside administrative action
concerning public procurement that is not lawful, reasonable or
procedurally fair
[3]
and that is not part of a system that is ‘fair,
equitable, transparent, competitive and cost-effective’;
[4]
(ii) based on the facts (that are largely common
cause) it appears to me that the applicants enjoy some prospects of
success; and
(iii) that being so, they have established the first
requirement for interim relief, the existence of a
prima
facie
right, even if it is open to some
doubt. I accept too that the fourth requirement, the absence of any
other satisfactory remedy,
has been established by the applicants.
[20] The second requirement for the grant of an
interim interdict is a well-grounded apprehension of irreparable harm
if the interim
interdict is not granted and the review succeeds in
due course. Put otherwise, the question is: ‘Would the
applicants be
denied their prize if no interim interdict is granted?’
This, it seems to me, requires an analysis of what relief the
applicants
have applied for in the review application and what its
practical effect will be if they succeed. It also requires an
analysis
of the nature of the irreparable harm that the applicants
say they apprehend.
[21] The relief for which the applicants have applied
is the review and setting aside of every decision taken by the RAF in
the
tender process after the expiration of the 90-day validity period
and an order directing the RAF to commence the tender process
afresh.
The applicants have also applied for alternative relief, none of
which envisages the award of a tender to any of them.
In other words,
if the applicants succeed in due course, the practical effect of
their victory will, on the best-case scenario,
be that the whole
tender process will have to re-commence and they will have to bid
again for the RAF’s work. They cannot
claim, and do not claim,
a right to be awarded a contract to act for the RAF.
[22] In the application for interim relief, however,
they seek an order that will, in effect, compel the RAF to continue
to give
them instructions and not to give instructions to its new
panellists. This they seek in the face of a decision taken by the RAF
to terminate the contracts that it has with the applicants on 31
December 2013. They claim that they will suffer irreparable harm
if
interim relief is not granted and they succeed in the review because
they may be faced with the situation that it is impossible
to
‘unscramble the egg’: even if they establish that the
decisions under challenge were unlawful, they may be denied
the
remedy of setting aside, and the irregularly awarded tenders to the
new panellists may be allowed to stand.
[23] As this is an
issue that I may be called upon to decide when I hear the review, I
do not wish to deal with it in any detail
or to second-guess what may
arise when fuller argument is presented. Suffice it to say at this
stage that it seems to me that the
argument is unduly alarmist. These
are not the type of tenders in which relief is likely to be withheld
because too much water
will have flowed under the bridge. First, a
relatively short period of time will have passed from when the new
panellists became
eligible to do the RAF’s work to the hearing
of the review in early February 2014. Secondly, cases in which a
tender is not
set aside despite it being awarded irregularly
typically involve work that has all but been completed by the time
the review is
heard.
[5]
Thirdly, this case involves instructions being
given to panellists on an
ad hoc
basis for individual cases from time to time, similar to the tender
in
Eskom Holdings Ltd & another v
New Reclamation Group (Pty) Ltd
[6]
in which these features led the court to set aside
the irregularly awarded tender despite it only having a few months to
run. Fourthly,
in this case, if the tender process is set aside, a
new tender process can be initiated for the same period as the
present tenders
and if the panellists change, while it may cause
inconvenience, it is possible (as the present case shows) to manage a
handover
of files from old panellists to new panellists.
[24] The third requirement for interim relief is a
balance of convenience in favour of an applicant for such relief. In
this case,
the balance of convenience does not, in my view, favour
the applicants. While it is so that they will not receive new
instructions
before the review is decided, and if they are successful
in setting aside the tender process, will have to tender again for
the
RAF’s work, their position is not much different to that of
respondents whose bids were successful: they have expended money
and
committed resources to the restructuring of their practices and many
have had to forego motor vehicle accident work for plaintiffs
by
referring clients to other firms of attorneys and not taking new
instructions from potential plaintiffs.
Conclusion
[25] In conclusion, I am of the view that a case has
not been made out by the applicants that they will suffer irreparable
harm
if interim relief is not granted and they succeed in the review
in due course and that the balance of convenience favours them.
I am
further of the view that costs should follow the result.
[26] I make the following order:
(a) The
application of the first, second and third applicants for the relief
set out in Part A of the notice of motion is dismissed.
(b) The first,
second and third applicants are directed to pay the costs, jointly
and severally, of the first, tenth, twenty second,
twenty sixth and
thirtieth respondents, including, in the case of the first
respondent, the costs of two counsel.
(c) The matter
is postponed to 5 February 2014 for the relief claimed in Part B of
the notice of motion to be determined.
____________________________
C Plasket
Judge of the High Court
APPEARANCES
First applicant: A Nelson SC and J Huisamen SC
instructed by Joubert Galpin & Searle
Second applicant: P J De Bruyn SC and J Huisamen SC
instructed by Joubert, Galpin & Searle
Third applicant: D Potgieter SC and G Potgieter
instructed by Joubert, Galpin & Searle
First respondent: P Kennedy SC and T Ngcukaitobi
instructed by Goldberg & De Villiers
Tenth and twenty second respondents: K Tsatsawane
instructed byT M Chauke Inc and Diale Mogoshoa
Twenty sixth respondent: I F Armoed instructed by
Boqwana Burns Inc
Thirtieth respondent: A Tiry instructed by Masiza
Harker Inc
[1]
On the necessity
for preliminary investigations and so on prior to launching review
proceedings, albeit in the context of delay
rather than urgency, see
Scott
& others v Hanekom & others
1980 (3) SA 1182
(C) at 1192G-1193G. On self-created urgency, see
Schweizer-Reneke
Vleis Maatskappy (Edms) Bpk v Minister van Landbou & andere
1971 (1) PH F11 (T) at F11-12;
Nelson
Mandela Metropolitan Municipality & others v Greyvenouw CC &
others
2004 (2) SA 81
(SE) paras 33-34.
[2]
Setlogelo v
Setlogelo
1914
AD 221
at 227;
Webster
v Mitchell
1948 (1) SA 1186
(W) at 1186-1187;
Eriksen
Motors (Welkom) Ltd v Protea Motors, Warrenton & another
1973 (3) SA 685
(A) at 691D-E; Andries Charl Cilliers, Cheryl Loots
and Hendrik Christoffel Nel
Herbstein
and Van Winsen:
The
Civil Procedure of High Courts and the Supreme Court of Appeal of
South Africa
(5
ed) (Vol 2) at 1456-1457.
[3]
Constitution, s
33(1); the PAJA, s 6.
[4]
Constitution, s
217(1).
[5]
See for example
Chairperson,
Standing Tender Committee & others v JFE Sapela Electronics
(Pty) Ltd & others
2008 (2) SA 638
(SCA).
[6]
Eskom Holdings
Ltd & another v New Reclamation Group (Pty) Ltd
2009 (4) SA 628
(SCA).