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[2022] ZAECQBHC 45
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Fleet Sync Caltex Joint Venture v Nelson Mandela Bay Metropolitan Municipality and Others (1884/2020) [2022] ZAECQBHC 45 (15 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA)
Case
No.: 1884/2020
Date
Heard: 19 May 2022
Date
Delivered: 15 November 2022
In
the matter between:
FLEET
SYNC CALTEX JOINT
VENTURE
Appplicant
and
NELSON
MANDELA BAY
METROPOLITAN
MUNICIPALITY
First Respondent
MASANA
PETROLEUM SOLUTIONS (PTY) LTD
Second Respondent
KINGSMEN
INVESTMENTS (PTY)
LTD
Third Respondent
MM
FUEL TRADERS / KEMPSTON GROUP
JOINT
VENTURE
Fourth Respondent
TOTAL
SOUTH AFRICA (PTY)
LTD
Fifth Respondent
BAUMI
BARUDI TRADING (PTY)
LTD
Sixth Respondent
NEXOR
312 (PTY) LTD t/a VNA CONSULTING
Seventh Respondent
QTIQUE
27 (PTY)
LTD
Eighth Respondent
FUELSERVE
RETAIL TRANSIT SOLUTIONS
JOINT
VENTURE
Ninth Respondent
BHOTANI
WPK ENERGY JOINT VENTURE
Tenth Respondent
MHLANGOVUYO
TRADING t/a LUK BROS
PETROLEUM
SOLUTIOBNS
Eleventh Respondent
KHANGELO
PHANDA INVESTMENTS (PTY) LTD
Twelfth Respondent
WILLIE
NGEMA MOTORS
Thirteenth Respondent
JUDGMENT
RONAASEN AJ
Introduction
[1]
It is apposite to commence this judgment
with reference to section 217(1) of the Constitution, which provides
as follows:
“
When
an organ of state in the national, provincial or local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.”
[2]
It is the constitutional imperative of
transparency in procurement processes that I wish to emphasise.
It will become apparent
from this judgment that the unexplained
failure to adhere to this imperative features largely in this matter.
[3]
This application concerns the fate of a
tender in respect of which the first respondent (“the
municipality”) published
an invitation to bid in August 2019
under the description SCM//19-239/S: “
Supply
of Fuel, Installation, Management and Maintenance of an Integrated
Electronic Fuel Management System
”
(“the tender”).
[4]
The description of this application by
counsel for the applicant in heads of argument as relating to “
the
murky world of municipal procurement
”,
although unfortunate, has proved to be remarkably appropriate in the
circumstances of this matter. The facts revealed
in this
application show that the administrative activities of the
municipality are tightly controlled, although the nature of
the
control at play hardly promotes efficiency. The factionalism
and resultant power struggles in the political structures
of the
municipality have, in turn, impacted negatively on the municipality’s
administration, with a consequent lack of adherence
to constitutional
prescripts, including transparency in procurement processes.
Officials avoid the taking of decisions and the
fulfilment of
designated functions, all of which, constitutionally, they are
required to do diligently and without delay.
Requests for
information, which should be furnished, are met with silence.
[5]
The role of municipal officials in
administering procurement in terms of the supply chain management
policies of the municipalities
they represent is an important
executive function in our constitutional dispensation and its primary
goal is to promote administrative
certainty in a transparent manner.
I shall deal with the constitutional imperative requiring them to
perform their designated functions
expeditiously in more detail,
below.
[6]
The municipality maintains a large fleet of
vehicles and procures all its petroleum fuel requirements from an
external supplier.
Previously the second respondent supplied
the requirements envisaged in the tender pursuant to a fixed term
contract of three years
awarded to it following a competitive bidding
process as envisaged in the relevant procurement legislation and the
municipality’s
supply chain management policy. That
contract has long since expired by the effluxion of time.
[7]
The tender was intended to award a new
fixed term contract to a fuel supplier for the municipality, pursuant
to a competitive
bidding process. Although the
tender was awarded to the applicant as far back as February 2020 it
took this application for
it to be advised, only in November 2020,
that its bid had been successful. The underlying administrative
failures are at the heart
of this application.
[8]
Despite the expiry of its contract to
supply fuel to the municipality, the municipality continued to use
the services of the second
respondent as its sole fuel supplier, this
without any formal procurement process. This stopped after the
appointment of
the municipality’s attorneys of record in this
application. However, fuel continues to be supplied to the
municipality
by other suppliers on a temporary basis, pending the
adjudication of this application, again in the absence of any formal
procurement
process. This practice is obviously undesirable as
it comes with the obvious potential for irregularities.
[9]
Once again, this court is called upon to
unravel the entanglement created by the administrative ineptitude of
the municipality’s
officials, at great expense to its
ratepayers, and the municipality remains in limbo while an important
aspect of its infrastructure
is operating outside formal strictures.
The other parties
to this application
[10]
Only the applicant and the municipality
took part in the proceedings before me. The remaining
respondents all bid unsuccessfully
for the tender. No relief is
envisaged against any of the remaining respondents.
The relief sought
by the applicant and the municipality, respectively
The applicant
[11]
In terms of its amended notice of motion
the applicant seeks the following relief, namely that:
11.1.
it be declared that the resolution of the
municipality’s acting City Manager, on 5 February 2020, as
confirmed in her formal
resolution on 12 February 2020, approving the
recommendation to her of the Bid Adjudication Committee that the
tender of the applicant
be accepted, as finally conveyed to the
applicant during November 2020, constituted acceptance by the
municipality of the applicant’s
offer in the tender, subject to
the conclusion of a service level agreement;
11.2.
the failure of the municipality to
implement the award of the tender to the applicant be reviewed and
set aside;
11.3.
the municipality be directed with effect
from a date 10 days after the date of the order sought to implement
and give effect to
the decision of its accounting officer to accept
the applicant’s tender;
11.4.
the continuing acquisition by the
municipality of its petroleum fuel requirements from suppliers other
than the applicant be declared
to have no lawful basis and to be
inconsistent with the Constitution and illegal and invalid;
11.5.
the continuing acquisition by the
municipality of its petroleum products from suppliers other than the
applicant and/or its decisions
to continue to so acquire its
petroleum products, be reviewed and set aside;
11.6.
the municipality be interdicted from
acquiring its petroleum fuel requirements from a supplier or
suppliers other than the applicant;
11.7.
the municipality pay the applicant’s
costs of this application on the scale as between attorney and
client.
[12]
The relief sought by the applicant is
founded principally in the Promotion of Administrative Justice Act, 3
of 2000 (“PAJA”).
The municipality
[13]
The municipality, by way of counter
application seeks the following relief, namely that:
13.1.
it is declared that the decision (“the
impugned decision”) to award the tender to the applicant is
unlawful and invalid
and is reviewed and set aside;
13.2.
the tender be cancelled, and the
municipality be authorised to re-advertise the tender and reformulate
the specifications in respect
thereof; and
13.3.
the applicant pay the municipality’s
costs of the counter application.
[14]
Thus, the relief the municipality seeks in
terms of its counter application is in the form of a legality
review. Underlying
the relief foreshadowed in paragraph 13.1,
above is the municipality’s contention that for two principal
reasons (alleged
irregularities), which will be discussed in more
detail, below the applicant’s bid was not an acceptable tender,
as defined
in the Preferential Procurement Policy Framework Act, 5 of
2000 (“the Act”) and should have been rejected.
The main issues
which must be determined
[15]
A determination of the counter application
of the municipality will be determinative of this application, one
way or the other.
If the counter application is determined in
favour of the municipality, the applicant cannot obtain the relief it
seeks.
If, however, the counter application is dismissed the
applicant would be entitled to the relief it seeks.
[16]
Crucial to the determination of the counter
application is the question of the acknowledged delay on the part of
the municipality
in bringing the counter application.
Objectively, it is so that the counter application was only launched
some 16 months
after the date of the impugned decision. First,
it must be decided whether the delay in bringing the counter
application
was reasonable. If it is found that the delay was
unreasonable it must be established whether the delay, nevertheless,
should be
overlooked in the interests of justice.
Administrative
Law in South Africa
, third edition by C
Hoexter and G Penfold (“
Hoexter
”)
at pages 734-743.
[17]
The questions relating to the delay must be
determined at the outset as their determination will have a vital
bearing on the outcome
of the counter application and, thus, on the
applicant’s application.
Chronology of the
events against which the reasonableness or not of the delay must be
assessed
[18]
On 5 February 2020, the accounting officer
of the municipality approved the recommendation of its bid
adjudication committee, recommending
that the tender be awarded to
the applicant. On 12
February
2020, the accounting officer confirmed her approval by signing a city
manager’s resolution.
[19]
On 20 February 2020, the municipality
advised the second to thirteenth respondents that their bids had been
unsuccessful and that
they were entitled to lodge objections in terms
of the municipality’s supply chain management policy. In
terms of this
policy the implementation of the impugned decision was
suspended for 14 days as from 12 February 2020.
[20]
Significantly, the applicant was not
advised that it had been awarded the tender.
[21]
The second, seventh, eighth and eleventh
respondents lodged objections with the municipality. An “
objections
committee
” was established under
the chairmanship of a senior legal adviser of the municipality and
this “
committee
”
considered the objections between February 2020 and mid-May 2020 and
recommended to the municipality’s accounting
officer that the
bids should be referred back to the bid evaluation committee and that
a panel attorney should be appointed to
provide an opinion. It
was not disputed by the municipality in argument that the objection
process embarked on by the municipality
was wholly irregular and had
no foundation in statute or any other valid empowering provision.
The fruitlessness of the exercise
is confirmed by the fact that the
committee’s recommendations were never implemented.
[22]
In the meantime, the Covid pandemic had
intervened, and the hard lockdown commenced on 27 March 2020 for a
period of 21 days.
As from 1 May 2020 there was a gradual
easing of the lockdown restrictions. Nothing is really advanced
on the papers as to
how the lockdown restrictions impacted
specifically on the process of awarding the tender, if at all.
[23]
In mid-2020 various changes were made to
the identity of the municipality’s accounting officer.
Although the political
instability which prevailed at the time is not
disputed, quite how this impacted on the implementation of the
tender, which by
that time had already been awarded is uncertain and
unexplained.
[24]
On 19 August 2020, the applicant launched
this application. On 2 September 2020 the municipality
appointed its attorneys of
record in this application.
[25]
In terms of the notice of motion the
applicant, in accordance with uniform rule 53, called on the
municipality to dispatch within
15 days of the receipt of the
application to the Registrar all records relating to or resulting in
the impugned decision being
made (“the record”). The
application was served on the municipality on 21 August 2020.
It failed to deliver the
record within the prescribed 15-day period
and its failure persisted despite a notice in terms of rule 30A of
the Uniform Rules
requiring compliance with rule 53(1), served on 15
September 2020.
[26]
During the week ending 25 September 2020
the municipality’s attorneys were provided with the bulk of the
documents comprising
the record, which was to be delivered to the
Registrar in terms of rule 53. Its attorneys reviewed the record over
a period of
two weeks and made certain recommendations to the
municipality. Still the record was not provided to the
Registrar.
[27]
On 7 October 2020 the applicant brought an
application to compel the delivery of the record, which was opposed
by the municipality.
The municipality however failed to deliver
its opposing affidavit in the prescribed time and this application
was enrolled for
hearing on the so-called uncontested opposed motion
court roll on 17 November 2020.
[28]
On 30 October 2020, the municipality
terminated the “contract” with the second respondent in
terms of which it, at that
stage, was supplying fuel to the
municipality. Although I am not called upon to decide anything in
this regard, I have alluded
to the fact that the validity of the
“contract” in terms of which the second respondent
remained the municipality’s
exclusive fuel supplier was
questionable.
[29]
On 11 November 2020 the municipality’s
attorneys addressed a letter (described as the “proposal
letter”) to the
attorneys of the applicant and the second
respondent. It was apparent from this letter that the
municipality’s attorneys
were in possession of the record. In
terms of this letter the applicant was also for the first time
advised that:
29.1.
it had been awarded the tender as far back
as February 2020, and
29.2.
the municipality intended, within four
weeks of the date of the letter, bringing a legality review to set
aside the award of the
tender to the applicant. The proposal was that
the applicant withdraw its application, in light of the legality
review process,
which would determine the fate of the tender.
[30]
On the morning of 17 November 2020, the
municipality delivered an opposing affidavit in the application to
compel delivery of the
record, to which the applicant, in due course,
replied. The application to compel was set down for hearing on
the opposed
motion roll on 11 March 2021.
[31]
Between 7 December 2020 and 16 February
2021, meetings took place between the municipality’s attorneys
and members of the
bid evaluation committee involved in the
evaluation of the various bids for the tender. The members of
the bid evaluation
committee apparently refused to explain to the
attorneys how they had assessed the applicant to have satisfied the
minimum requirement
of “
proven
skills and experience
” - the
municipality contends that the applicant had not satisfied these
requirements and therefore had not submitted an acceptable
tender.
This is one of the grounds on which the municipality seeks to review
and set aside the award of the tender to the
applicant and which will
be dealt with more fully, below.
[32]
After the receipt of the applicant’s
heads of argument in the application to compel delivery of the
record, the municipality,
without any explanation, delivered the
record.
[33]
On 23 March 2021 the applicant filed its
supplementary affidavit, in response to the record.
[34]
The opposing affidavit in this application,
which also served as the founding affidavit in respect of the counter
application, was
delivered four weeks late, on 10 June 2021.
The unavailability of counsel and the municipality’s attorneys
occasioned
the lateness.
Legal principles
Delay
[35]
In this case it was undoubtedly the
constitutional obligation of the municipality diligently to consider
the bids for the tender,
to award the tender to a successful bidder
and to advise the successful bidder of the award without delay.
Similarly, if it felt
itself constitutionally obliged to assail the
award of the tender to the applicant it should have proceeded to do
so expeditiously.
These obligations are consonant with section
237 of the Constitution, which provides that all constitutional
obligations must be
performed “
diligently
and without delay
”.
[36]
In
Khumalo and
Another v MEC for Education, KwaZulu-Natal
2014 (5) SA 579
(CC) it was held as follows at [46] and [47]:
“
[46]
Section 237 of the Constitution provides: ‘All constitutional
obligations must be performed diligently and without delay.’
Section 237 acknowledges the significance of timeous compliance with
constitutional prescripts. It elevates expeditious and
diligent
compliance with constitutional duties to an obligation in itself.
The principle is thus a requirement of legality.
“
[47]
This requirement is based on sound judicial policy that includes an
understanding of the strong public interest in both certainty
and
finality. People may base their actions on the assumption of
the lawfulness of a particular decision, and the undoing
of the
decision threatens a myriad of consequent actions.”
[37]
Khumalo
then
goes on to set out the following principles in considering a delay in
the context of a legality review, at [49]-[52]:
37.1.
first, it is considered whether the delay
is unreasonable or undue, which is a factual enquiry upon which a
value judgment is made
in the light of “
all
the relevant circumstances
”;
37.2.
second, if the delay is considered to be
unreasonable whether the court’s discretion should nevertheless
be exercised to overlook
the delay and entertain the application;
37.3.
in terms of the first leg of the enquiry
any explanation offered for the delay is considered;
37.4.
on the second leg of the test, the delay
cannot be evaluated in a vacuum but must be assessed with reference
to its potential to
prejudice the affected parties and having regard
to the possible consequences of setting aside the impugned decision.
See also
Department of
Transport and Others v Tasima (Pty) Ltd
2017 (2) SA 622
(CC) at
[141]-[144] and [164]-[171] and the reference to
Hoexter
,
above.
[38]
Tasima
’
s
paragraph [144] is apposite and reads as follows:
“
[144]
As I see it, the only arguably new question presented by the first
judgment is whether, in instances where the subject of
the review
implicates a court’s s 172(1)(a) obligations, the court should
substitute
Khumalo
’s
factual, multifactorial and context-sensitive framework for a strict
rule that delay can never prevent the court from deciding
the
matter. In my view the answer is ‘no’.
Khumalo
made it perspicuous that the timely performance of constitutional
obligations is itself a constitutional concern. Therefore,
s
172(1)(a) cannot automatically subordinate s 237.”
[39]
The judgment of the Constitutional Court in
Buffalo City Metropolitan Municipality v
Asla Construction (Pty) Ltd
2019 (4) SA
331
(CC) at [41]-[58] applied and refined the principles applicable
to the consideration of a delay in respect of a legality review,
as
set out in
Khumalo
.
In summary the following factors are applicable in the case of a
delayed legality review:
39.1.
first, the reasonableness of the delay must
be assessed with reference to the explanation offered for the delay,
which explanation
must cover the entire period of the delay -
Asla
at [52];
39.2.
second, if the delay is considered to be
unreasonable the next leg of the test is whether it ought to be
overlooked. A court
has the discretion to overlook the delay,
but there must be a basis for it to exercise this discretion.
The basis must be
gleaned from the available facts or objectively
available factors -
Asla
at [53];
39.3.
the approach to overlooking a delay in a
legality review is flexible and entails a legal evaluation taking
into account a number
of factors. The first of these factors is
the potential prejudice to affected parties as well as the possible
consequences
of setting aside the impugned decision –
Asla
at [54];
39.4.
a second factor relevant to overlooking a
delay is the nature of the impugned decision. In considering
the nature of the impugned
decision, essentially, a court has regard
to the merits of the legal challenge to the decision, in other words
the prospect of
success on review -
Asla
at [55]-[58];
39.5.
a third factor to consider when deciding to
overlook the delay is the conduct of the applicant for the legality
review (in this
case the municipality). In this regard the
Constitutional Court, on a number of occasions, has stated that the
state or an
organ of state is subject to a higher duty to respect the
law. The standard against which a state litigant’s
conduct
is measured is a high one and ought to accord with the
prescripts of the law –
Asla
at [59]-[61];
39.6.
even where the administrator had not acted
as a model litigant or “
constitutional
citizen
” there may be a basis to
overlook the delay if the functionary acted in good faith or with the
intent to ensure clean governance
-
Asla
at [62];
39.7.
in cases where there is no basis for the
court to overlook an unreasonable delay the court may nevertheless be
constitutionally
compelled to declare an organ of state’s
conduct unlawful in accordance with the provisions of section
172(1)(a) of the Constitution
which requires a court to declare
invalid any law or conduct that it finds to be inconsistent with the
Constitution -
Asla
at [63]. These considerations have their origin in the judgment
of the Constitutional Court in
State
Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd
2018 (2) SA 23
(CC). The Constitutional Court in
Asla
at [71] however, held that the
Gijima
principle should be narrowly interpreted and also restrictively so
that the valuable rationale behind the rules on delay are not
undermined.
The merits
[40]
In this case the municipality contends for
the existence of certain irregularities in that the requirements of
an empowering provision,
namely the tender requirements were
allegedly not correctly applied in the evaluation of the applicant’s
tender, resulting
in the irregular award of the tender to the
applicant.
[41]
In considering the municipality’s
contentions, the materiality of the alleged deviations from the
tender requirements must
necessarily be assessed by linking the
question of compliance to the purpose of the relevant tender
requirements. The approach
is no different to that postulated
by the Constitutional Court in respect of a review under PAJA in
Allpay Consolidated Investment Holdings
(Pty) Ltd and Others v Chief Executive Officer, South African Social
Security Agency and
Others
2014 (1) SA
604
(CC) at [28].
Judicial
deference
[42]
The legal framework against which I must
consider whether the administrative actions concerned are reviewable
was succinctly set
out by Plasket, J (speaking for the Full Bench of
this Division) as follows in
WDR
Earthmoving Enterprises CC and Another v Joe Gqabi District
Municipality and Others
ZAECGHC 45 (13
March 2017):
“
[8]
A court that is approached to review an administrative action does
not have a free hand to interfere in the
administrative process.
Its powers are limited. As Lord Brightman stated in
Chief
Constable of the North Wales Police v Evens “[j]udicial review
is concerned, not with the decision, but with the decision-making
process”.
This was made
clear by Innes CJ more than a century ago in
Johannesburg
Consolidated Investment Co Ltd v Johannesburg Town Council
when
he said
:
‘
Whenever
a public body has a duty imposed on it by statue, and disregards
important provisions of the statute, or is guilty of gross
irregularity or clear illegality in the performance of the duty, this
Court may be asked to review the proceedings complained of
and set
aside or correct them.’
[9]
Less than a decade later, after Union and the establishment of the
Appellate Division,
Innes ACJ, in
Shidiack v Union Government
(Minister of the Interior),
captured the limits of the review
functions of a superior court when he said that a court would be
“
unable to interfere with a due and honest exercise of
discretion, even if it considered the decision inequitable or
wrong”.
The reason for this is simple: the
legislature mandated and empowered administrators to administer, and
not courts; and the
role of the court is limited to ensuring that
administrators do not stray beyond the legal limits of their
mandates.
[10]
The passages I have cited from the
Johannesburg Consolidated
Investments
case and the
Shidiack
case articulated the
position when the review of administrative action was the common law
jurisdiction of the superior courts.
The principles stated
still hold good now that the power to review administrative action is
sourced in the Constitution and the
PAJA: the distinction
between appeal and review, based as it is on the doctrine of the
separation of powers, remains in place
and remains fundamentally
important. Administrative action may only be set aside by a
court exercising its review powers
if it is irregular. It may
not be interfered with because it is a decision a judge considers to
be wrong.”
[Detailed case references
omitted]
[43]
The abovementioned principles are consonant
with the concept of judicial deference described by
Hoexter
(2000) 117 SALJ 484
at 501 – 2, as follows:
“
(A)
Judicial willingness to appreciate the legitimate and
constitutionally ordained province of administrative agencies; to
admit
the expertise of those agencies in policy-laden or polycentric
issues; to accord their interpretation of fact and law due respect;
and to be sensitive in general to the interests legitimately pursued
by administrative bodies and the practical and financial constraints
under which they operate. This type of deference is perfectly
consistent with a concern for individual rights and a refusal to
tolerate corruption and maladministration. It ought to be
shaped not by an unwillingness to scrutinise administrative action,
but by a careful weighing up of the need for – and the
consequences of – judicial intervention. Above all, it
ought to be shaped by a conscious determination not to usurp the
functions of administrative agencies; not to cross over from review
to appeal.”
[44]
In
Minister of
Environmental Affairs and Tourism and Others v Phambili Fisheries
(Pty) Ltd; Minister of Environmental Affairs and Tourism
and Others v
Bato Star Fishing (Pty) Ltd
2003 (6) SA
407
(SCA) at [50] it was held that judicial deference does not imply
judicial timidity or an unreadiness to perform the judicial
function.
It merely recognises that the law itself places
certain administrative actions in the hands of the executive and not
the judiciary.
[45]
These sentiments were endorsed by the
Constitutional Court in
Bato Star
Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at
[48]
as
follows:
“
[48]
In treating the decisions of administrative agencies with the
appropriate respect, a Court is recognising the proper role of
the
Executive within the Constitution. In doing so a Court should
be careful not to attribute to itself superior wisdom in
relation to
matters entrusted to other branches of government. A Court
should thus give due weight to findings of fact and
policy decisions
made by those with special expertise and experience in the field.
The extent to which a Court should give
weight to these
considerations will depend upon the character of the decision itself,
as well as on the identity of the decision-maker.
A decision
that requires an equilibrium to be struck between a range of
competing interests or considerations and which is to be
taken by a
person or institution with specific expertise in that area must be
shown respect by the Courts. Often a power
will identify a goal
to be achieved, but will not dictate which route should be followed
to achieve that goal. In such circumstances
a Court should pay
due respect to the route selected by the decision-maker. This
does not mean, however, that where the decision
is one which will not
reasonably result in the achievement of the goal, or which is not
reasonably supported on the facts or not
reasonable in the light of
the reasons given for it, a Court may not review that decision.
A Court should not rubber-stamp
an unreasonable decision simply
because of the complexity of the decision or the identity of the
decision-maker.”
Application of
principles and discussion
Was the delay
reasonable
[46]
The impugned decision was taken on 12
February 2020. That is the date on which the municipality would
have been aware of its
decision and is the date on which the
assessment as to the reasonableness of the delay must commence.
[47]
The municipality’s counter
application to review the award of the tender to the applicant was
launched on 10 June 2021.
Thus, a delay of 16 months.
[48]
The constitutional imperative that
constitutional obligations must be performed diligently and without
delay has as its foundation
the necessity for administrative finality
and certainty. To that end a bidder such as the applicant is
entitled to be advised
of the success, or not, of its bid promptly
after its adjudication. In this regard, in the conduct of the
officials of the
municipality, bad faith is clearly displayed, in
that:
48.1.
in a complete absence of transparency, the
applicant was not advised of the successful outcome it had achieved
with its bid.
This seems to have occurred by design rather than
mere administrative ineptitude if the further conduct of the
municipal officials,
described herein, is considered;
48.2.
compounding the lack of transparency the
unsuccessful bidders were, however, advised of the failure of their
bids and invited to
participate in an unlawful objection process.
It is conceded by the municipality that this process was illegal and
void from
the outset;
48.3.
no explanation has to date to been
proffered for the failure to advise the applicant of the successful
outcome of its bid.
In fact, the conduct of the municipality
during and after the futile objection process was aimed at misleading
the applicant with
plainly false communications in response to its
attempts to establish the result of the bidding process;
48.4.
the delaying conduct of members of the bid
evaluation committee of the municipality in refusing to cooperate
with the municipality’s
attorneys is also to date unexplained.
These persons are administrators in the employ of the municipality
and, as such, are
obliged to cooperate to ensure the speedy
resolution of problems arising from an administrative process such as
their evaluation
of the tender.
[49]
The explanation for the delay, such as it
is, does not cover the entire period of the delay. In this
regard the following
is to be noted:
49.1.
The fruitless objection process spuriously
undertaken lasted some four months. Never is it explained quite
how this process
proceeded, what transpired during the process and
why the process took so long;
49.2.
the period between the conclusion of the
fruitless objection process in May 2020 and the appointment of the
municipality’s
current attorneys is an as yet unexplained
“black hole” in the sequence of events;
49.3.
the delay occasioned by the refusal to
provide the applicant’s attorneys with the record, which in
turn delayed the launching
of the counter application is not
explained. The record must have been available to the
municipality’s attorneys at
least by the time the proposal
letter was sent out in November 2020. Why not then furnish the
record to the applicant’s
attorneys and focus on launching the
counter application, instead of engaging in unnecessary “side
issue” litigation?
I shall revert to this aspect, below.
[50]
I have already stated that the conduct of
the municipality in occasioning the delays which occurred leaves the
clear impression
of it acting in bad faith. The delay in
launching the counter application is indicative of inept
administration, resulting
in an important component of its
administrative structures operating in the pale instead of on a
formal basis as envisaged by procurement
legislation and its supply
chain management policy. Its conduct was nothing short of
egregious.
[51]
Thus, the delay in launching the counter
application was unreasonable.
Should the delay
be overlooked
The consequences of
setting aside the impugned decision and possible prejudice to the
parties
[52]
The consequences of setting aside the
impugned decision would mean that an essential component of the
municipality’s administration,
for a further protracted period,
while a tender process is run afresh, will not be conducted on a
formal footing, with yet further
scope for irregularities.
[53]
The applicant contends for prejudice
occasioned by the delay in that the members of its joint venture had
been obliged to keep available
substantial capital resources which
will be necessary to implement the contract underlying the tender.
If it is deprived
of the tender it will also have been deprived of
the opportunity to utilise these resources productively elsewhere.
[54]
The prejudice to the municipality if the
impugned award is set aside is clear. It will remain in limbo
and have no service
provider with regard to its fuel supply and fuel
management requirements which period of limbo will continue while a
further tender
process is being conducted.
[55]
Conversely there will be no prejudice to
the municipality if the impugned award is not set aside and it is
implemented.
The nature of the
impugned decision and the merits of the legality review
[56]
The nature of the impugned decision is in
the form of an award of a tender to the applicant to supply the
municipality with its
fuel supply and fuel management requirements.
[57]
The municipality contends that the
applicant’s bid falls short in respect of two minimum
requirements contained in the tender
specifications, namely those of
“
proven skills and experience
”
(“the first requirement”) and “
support
and capacity
” (“the second
requirement”).
[58]
The “
Minimum
Criteria
” were inserted into the
tender criteria for the purpose of attracting bidders who could
satisfy those criteria.
[59]
In respect of the first requirement, the
suggestion that that requirement could only be satisfied with
reference to two letters
is not rationally connected to the purpose
of the requirement. To hold otherwise and find that the
requirement could not
be satisfied with reference to other documents
contained in the tender submission would be to render an absurd
result against the
purpose to be achieved by the tender requirement.
See in this regard the unreported judgment of Lowe J in
Amakahaya
Construction CC v The Eastern Cape Department of Human Settlements
and Another
(Eastern Cape Division,
Makhanda case number 3782/2021) at paragraph 61.
[60]
The Constitutional Court asserted in
Allpay
(supra)
at [30] that the assessment of
the materiality of compliance with legal requirements in our
administrative law is not encumbered
by excessive formality. To
the extent that the municipality’s bid evaluation committee
evaluated the applicant’s
compliance with the first requirement
with reference not only to two letters but also with reference to
other documents contained
in the applicant’s bid submission
that, in my view, would not be a material deviation from the tender
requirements if it
was a deviation at all.
[61]
I am also in agreement with the submission
made on behalf of the applicant that I should exercise deference
towards the evaluation
of the bid evaluation committee in respect of
the first requirement, it being a technical requirement as opposed to
a requirement
of rationality or reasonableness.
[62]
I do not therefore agree with the
submission on behalf of the municipality that its case in respect of
the first requirement is
unassailable. On the contrary it is my
view that there is no merit in the municipality’s case in this
regard.
My view is enhanced by the fact that the municipality’s
contentions of irregularity in respect of the first requirement is
rather in the form of a conclusion
ex
post facto
rationalisation arrived at
without reference to any evidence from or support by the members of
the bid evaluation committee.
[63]
In respect of the second requirement the
municipality’s case is that the applicant did not provide a
contract with a fuel
supplier which would cover the duration of the
contract underlying the tender. The applicant counters with the
assertion
that it did not in terms identify the documents provided by
it as being specific support of a particular requirement, but rather
included all relevant documents to substantiate its ability to
satisfy the requirements.
[64]
One of the members of the applicant joint
venture is a fuel supplier. In support of the joint venture’s
bid, it put
up the agreement establishing the joint venture in terms
of which one of the joint venture members (the fuel supplier)
undertook
the obligation to supply fuel through a selected network of
its local service stations to the municipality and supply fuel to
those
service stations to that end. Again, given the purpose of
the requirement namely, to ensure that the successful bidder was
able
to provide fuel for the duration of its contract with the
municipality, the applicant satisfied this requirement. Again, the
municipality’s complaint is immaterial in the sense envisaged
in
Allpay (supra)
and
judicial deference constrains me to accede to the expertise of the
bid evaluation committee.
The conduct of the
municipality
[65]
In finding that the delay of the
municipality in bringing the counter application was unreasonable, I
dealt extensively with the
conduct of the municipality and its
officials. Its conduct and that of its officials, some of which
remain unexplained, are
not supportive of its request that I exercise
my discretion and overlook the delay. In this instance the
municipality has
not acted in consonance with its higher duty as an
organ of state to respect the law.
[66]
What is of particular concern to me is the
manner the record was dealt with. The provisions of uniform
rule 53 requiring the
timeous delivery of a review record have their
foundation in our common law relating to review. The purpose of
the delivery
of a review record is to enable an applicant for review
to assess its position and, if so advised, to supplement its founding
affidavit
and amplify or amend its notice of motion. This case
clearly demonstrates why the delivery of the record was essential, in
circumstances where the applicant was unaware of the success of its
bid or the fact that the municipality had changed fuel suppliers.
These facts had a vital bearing on the relief which it would
ultimately seek.
[67]
Rule 53 does not provide that the review
record must be filed by the attorneys of the respondent in the
review, although I accept
that, for practical purposes, they may play
a facilitative role in helping the respondent comply with its
obligations in terms
of the rule.
[68]
On 9 September 2020 the municipality’s
attorneys advised the applicant’s attorneys that it was in
possession of a portion
of the record and that the record would be
filed as soon as reasonably possible. The affidavit opposing
the application to
compel delivery of the record makes it clear,
however that there was no intention of delivering the record. I
find particularly
disturbing the following statement in the
municipality’s affidavit opposing delivery of the record:
“
24.
Once JGS (the municipality’s attorneys) was placed in
possession of the documents constituting the record of decision
(as
contended by Fleet Sync) it was necessary for me (one of the
municipality’s attorneys) to superficially work through
the
documents to establish what had transpired and then advise the NMBM
on the best course of action to adopt.”
[69]
The statement suggests that while the
municipality’s attorneys were considering the record and
advising the municipality the
requirements of rule 53 could be
ignored or frustrated. As a fact they were being ignored. The
rule’s requirements
regarding the delivery of review records
are there to facilitate the speedy disposition of review applications
which, in turn,
promotes administrative certainty and finality.
The rule is not there to be ignored while the litigant who is obliged
to
provide the review record considers its position. Why can’t
the applicant for review have the record and consider its position
simultaneously? Should a respondent in a review have a good
reason not to comply with the rules its obligation is to approach
this Court for appropriate directions without delay.
[70]
The municipality opposed the application to
compel delivery of the record with the full benefit of the record.
Its opposing
affidavit was delivered in November 2020. The
thrust of its opposition was that the relief sought by the applicant
in its notice
of motion (as then formulated) had become moot for
various reasons, which included the fact that the tender had been
awarded to
the applicant. The applicant was obliged to reply to
the assertions in the affidavit opposing the delivery of the record
without the benefit of the record and, correctly, contended that it
was at a considerable disadvantage in its ability to respond
appropriately. Quite how the applicant was to respond
meaningfully to averments that the relief it sought in terms of its
notice of motion had become moot without being able to consider the
record is not understood.
[71]
The delivery of the record ultimately
occurred in February 2021, which enabled the applicant to amplify its
founding affidavit and
recast its notice of motion.
[72]
The unnecessary delay in the delivery of
the record was underpinned by a spurious opposition to compel the
delivery thereof.
The delay necessarily occasioned a further
delay in the launching of the counter application. The
consequence of the delays
was continued administrative uncertainty
and lack of finality.
[73]
Attorneys representing respondents in
review proceedings, by virtue of their position as officers of this
Court, have an obligation
to ensure the timeous compliance by their
clients with the rules of this Court. As stated, if such
compliance is not possible
a prompt approach to the Court for
appropriate directions is required.
[74]
Here, rather, the municipality’s
attorneys unilaterally concluded that as, in their view, the
applicant had no prospects of
success with regard to its review
application, access to the record could be refused, thereby not only
ignoring a rule of this
Court but also flouting the constitutional
imperative of transparency. Clearly the applicant was entitled
to and had required
access to the record to place its application on
a proper footing, particularly as, since February 2020, the
municipality had persistently
refused to advise it that its bid had
been successful.
Was the delay the
result of the municipality acting in good faith with the intent of
ensuring clean governance
[75]
The answer to this question must
emphatically be “no” in the light of the conclusions I
have reached above.
Conclusion on the
question as to whether the delay should be overlooked
[76]
Again, in the light of the conclusions I
have reached above, the municipality’s delay in bringing the
counter application
cannot be overlooked in the interests of justice.
[77]
Below, I reach the conclusion that the
tender was validly awarded to the applicant. In the light of
this conclusion the
Gijima
principle does not come into play.
Conclusion in
respect of the main application and the counter application
[78]
I have found above that the municipality’s
delay in bringing the counter application was unreasonable and that
the delay cannot
be overlooked in view of the conclusions I have
reached. Given this the counter application stands to be
dismissed.
[79]
As stated above, a finding that the counter
application must be dismissed would mean that the tender was validly
awarded to the
applicant and the applicant is then entitled to the
relief it seeks in terms of its amended notice of motion.
Costs
[80]
There is no reason in this case to depart
from the general rule that costs follow the result of the matter.
The applicant
has asked that I award these costs against the
municipality on the scale as between attorney and client, i.e., on a
punitive scale.
[81]
I have found that in causing the delay in
bringing the counter application the municipality acted in bad faith
and egregiously.
[82]
It was not only in causing the delay that
the municipality acted, as described. Particularly in its
failure to advise the
applicant of the outcome of its bid, whilst
continuing to engage with unsuccessful tenderers in a futile
objection process, failed
to act transparently and heed the repeated
admonishments made by the Constitutional Court in terms of which it
has a higher duty
as an organ of state to respect the law, to fulfil
its procedural requirements and to tread respectfully when dealing
with the
rights of third parties, such as the applicant.
Asla
at [60] and [61].
[83]
The applicant, despite being
constitutionally entitled to transparency and administrative justice,
was the victim of atrocious and
inept treatment at the hands of the
municipality. Thus, in this case, it is appropriate, that the
municipality face an order
for punitive costs.
Order
I accordingly make the
following order:
1.
It is declared that the resolution of the first respondent’s
Acting City
Manager, on 5 February 2020, as confirmed in her formal
resolution, on 12 February 2020, approving the recommendation to her
of
the Bid Adjudication Committee that the tender of the applicant
under contract SCM/19-239/S for the “
Supply of Fuel,
Installation, Management and Maintenance of an Integrated Electronic
Fuel Management System
(“the tender”) be accepted, as
conveyed to the applicant during November 2020, constituted
acceptance by the first
respondent of the offer contained in the
tender, subject to the conclusion of an agreement in terms of
section
116
of the
Local Government: Municipal Finance Management Act, 2003
.
2.
The failure of the first respondent to implement and give effect to
the decision
of its accounting officer to accept the applicant’s
offer as contained in the tender is reviewed and set aside.
3.
The first respondent is directed to implement and give effect to the
decision
of its accounting officer to accept the applicant’s
offer as contained in the tender within 10 days of the date of this
order.
4.
The continuing acquisition by the first respondent of its petroleum
fuel requirements
from a supplier or suppliers other than the
applicant is declared to have no lawful basis and is inconsistent
with the Constitution
and illegal and invalid accordingly.
5.
The continuing action or actions of the first respondent in acquiring
its petroleum
fuel requirements from a supplier or suppliers other
than the applicant and/or its decisions to continue to so acquire
such requirements,
are reviewed and set aside.
6.
The first respondent is interdicted from acquiring its petroleum fuel
requirements
from a supplier or suppliers other than the applicant.
7.
The first respondent’s counter application is dismissed.
8.
The first respondent shall pay the applicants costs, such costs to be
taxed or
agreed on the scale as between attorney and client and are
to include the costs of:
8.1 the main application;
8.2 the counter
application;
8.3 the application to
compel delivery of the review record.
O
H RONAASEN
ACTING
JUDGE OF THE HIGH COURT
The
parties were represented as follows:
The
applicant
:
Adv J.G.
Richards, instructed by:
Kaplan Blumberg
Attorneys, First Floor, Block A, Southern Life Gardens, 70 –
2
nd
Avenue, Newton Park, Gqeberha.
The
first respondent
:
Adv A.J. Nepgen, instructed by:
Joubert Galpin &
Searle, 17 Cape Road, Mill Park, Gqeberha.