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[2023] ZAECQBHC 35
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Minister of Police v Cobalt Communications CC t/a Top-Notch and Another (427/22) [2023] ZAECQBHC 35 (15 June 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE DIVISION
– GQEBERHA)
Case No: 427/22
Reportable
In the matter between:-
THE
MINISTER OF POLICE
Applicant
and
COBALT
COMMUNICATIONS CC T/A TOP-NOTCH
Registration
No. 2[…]
First
Respondent
JASCO
ELECTRONICS HOLDINGS LIMITED t/a
JASCO
CONVERGED SOLUTIONS
Second
Respondent
JUDGMENT
Beyleveld AJ
[1]
The
Applicant
[1]
seeks to review
certain decisions its functionaries took in relation to quotations
submitted by the First and/or Second Respondents.
[2]
[2]
The
decisions the Minister seeks to set aside relate to quotations in
respect of the supply and installation of PABX Systems
[3]
and TMS Systems
[4]
.
[3]
Such quotations
included the installation of cables, the supply of ancillary
equipment such as telephone instruments, switchboards,
desktop
computers and related software.
[4]
Self
review by an Organ of State, although not an entirely unknown concept
at common law, has in our constitutional dispensation,
been developed
and expanded and is now an acceptable remedy for an Organ of State to
utilise, whether by means of direct self review
or collateral
challenge.
[5]
[5]
Self
reviews have, expanded further by recognising what has become known
as a collateral challenge which arises when an Organ of
State for
instance attempts to force a person or entity to comply with an
unlawful act and such unlawfulness is defended on the
basis of
unlawfulness or, in the context of collateral challenge by an Organ
of State itself, where an Organ of State raises a
defence to a claim,
the substance of such defence being the unlawfulness of the
underlying agreement or administrative action by
virtue of a failure
for instance to comply with proper procurement processes.
[6]
[6]
Although in this matter
the Minister seeks to directly review the contended for decisions,
the relevance of a collateral challenge
will become apparent from
what is set out hereunder, more particularly relating to the
preliminary defence raised by Cobalt, namely
lis
pendens
.
[7]
Maringo,
is not opposing the application
[7]
.
[8]
The
quotations referred to above issued by Maringo clearly identify
Maringo as set out above. There is no reference in such
quotation to the entity described by the Minister in the founding
affidavit.
[8]
[9]
To exacerbate matters,
the Minister, in the replying affidavit annexes certain invoices in
respect of an earlier period, such invoices
identifying the entity as
ARC Communications (Pty) Ltd t/a Jasco Converged Solutions.
[10]
There seems to be no
dispute on the papers that Maringo (or any other entity) supplied the
goods and services described above to
the Minister for the period
October 2013 to June 2015, whereafter such goods and services were
supplied by Cobalt.
[11]
Prior to the initiation
of the present review application by the Minister, Cobalt instituted
action against the Minister under case
number 136/2021, claiming
payment in the sum of R927 070.71 in respect of invoices rendered by
Cobalt to the Minister which remain
unpaid.
[12]
In
such particulars
[9]
it is
alleged that Cobalt stepped in the shoes of Maringo in June 2015.
In fact, annexed to the application papers is the
Minister’s
Plea in the aforesaid action where the Minister admits that goods and
services were supplied by the entity the
Minister describes as Jasco
and as from June 2015 by Cobalt.
[13]
In the Particulars of
Claim, which relate to defined contended for contracts for the supply
of the goods referred to above, extend
over the period April 2019 to
July 2020.
[14]
In
the Plea filed on behalf of the Minister it is contended that the
acceptance of the quotations which are relied upon by Cobalt,
are
unlawful and invalid by virtue of non-compliance with a range of
statutory and regulatory procedures.
[10]
[15]
In
the present application the Minister seeks to set aside the
quotations issued by Cobalt during June 2017 and June 2018.
[11]
[16]
In the Particulars of
Claim, reference is also made to the quotations referred to above.
[17]
The
Minister consistently effected payments of all invoices rendered
pursuant to the various quotations until April 2018. The contracts
relied upon by Cobalt were according to its version
[12]
not terminated by the Minister as notice of termination had not been
given and the equipment retained by the Minister.
[18]
Cobalt contended that
in July 2020 it cancelled the contracts with the Minister, by virtue
of the Minister’s repudiation.
[19]
In
response to the Minister’s review application
[13]
Cobalt raises as a particular defence, the defence known as
lis
alibi pendens
.
[20]
As
alluded to above, the Minister in this review application seeks to
set aside the various quotations for lack of compliance with
the
regulatory frameworks referred to previously.
[14]
[21]
Relying on the
statutory framework identified above, the Minister in the review
application contends that the transactions are all
unlawful as the
procurement processes were neither fair, equitable, transparent and
cost-effective and in particular it is contended
that the Minister’s
officials:
[21.1.]
Failed and/or neglected
to estimate the transaction value of the goods and services prior to
procuring the goods and services.
[21.2.]
Failed to choose the
correct procurement method commensurate with the transaction value of
the goods and services.
[21.3.]
Failed to evaluate
quotations according to price and preference as required by the PPFA.
[21.4.]
Obtained quotations
from a sole supplier without recording the reasons for deviating from
the prescribed procurement methods and
without requesting prior
approval of the accounting officer of the SAPS.
[21.5.]
Split transactions into
items of smaller value thereby avoiding compliance with the
prescribed procurement methods.
[21.6.]
Failed to independently
determine the reasonable value of the goods and services prior to
sourcing a quotation from a sole supplier.
[21.7.]
Failed to conclude a
contract in accordance with the general conditions of contract issued
by National Treasury.
[22]
The Minister, in the
action, pleads unlawfulness of the quotations and accordingly any
contract and specifically pleads the same
grounds relied upon in the
review application as enumerated above.
[23]
A
defence of
lis
alibi pendens
is of course the mirror image and related to a defence of
res
iudicata
.
[15]
[24]
It
is beyond debate that a plea of
lis
alibi pendens
is based on the proposition that the dispute
[16]
between the parties is being litigated elsewhere and therefore it is
inappropriate for it to be litigated in a court in which the
plea was
raised.
[17]
[25]
The requisites for a
successful raise of a
lis
pendens
defence
are:
[25.1.]
Pending litigation.
[25.2.]
Between the same
parties or their privies.
[25.3.]
Based on the same cause
of action.
[25.4.]
In
respect of the same subject matter.
[18]
[26]
Strict
compliance with the requirements for
lis
pendens
[19]
have in recent years been somewhat relaxed and extended.
[20]
[27]
In
this regard Scott JA in
Smith
v Porritt supra
stated as follows:
[21]
“
[10]
Following the decision in Boshoff v Union Government
1932
TPD 345
the
ambit of the exceptio rei judicata has over the years been
extended by the relaxation in appropriate cases of the
common law
requirements that the relief claimed and the cause of action be the
same (eadem res and eadem petendi
causa) in both the
case in question and the earlier judgment. Where the circumstances
justify the relaxation of these requirements
those that remain are
that the parties must be the same (idem actor) and that the same
issue (eadem quaestio) must arise. Broadly
stated, the latter
involves an inquiry whether an issue of fact or law was an essential
element of the judgment on which reliance
is placed. Where the plea
of res judicata is raised in the absence of a commonality
of cause of action and relief claimed
it has become commonplace to
adopt the terminology of English law and to speak of issue estoppel.
But, as was stressed by Botha
JA in Kommissaris van Binnelandse
Inkomste v Absa Bank BPK
1995
(1) SA 653
(A)
at 669D, 670J-671B, this is not to be construed as implying an
abandonment of the principles of the common law in favour of
those of
English law; the defence remains one of res judicata. The
recognition of the defence in such cases will however require
careful
scrutiny. Each case will depend on its own facts and any extension of
the defence will be on a case by case basis. (KBI
v Absa
Bank supra at 670E-F.) Relevant considerations will include
questions of equity and fairness not only to the parties
themselves
but also to others. As pointed out by De Villiers CJ as long ago as
1893 in Bertram v Wood
10
SC 177
at
180, ‘unless carefully circumscribed, [the defence of res
judicata] is capable of producing great hardship and even
positive
injustice to individuals’.
”
[28]
In the present
instance, the commonality between what is raised in the review
application and raised as a collateral challenge in
the action is
self-evident and obvious.
[29]
Insofar as Cobalt and
the Minister are concerned, they are the same parties and the same
subject matter or cause of action is dealt
with.
[30]
Insofar as Maringo is
concerned, it is for obvious reasons not a party to the action as the
quotations it issued were issued and
paid for long before the action
was instituted and long before Cobalt took over the supply of the
equipment as alluded to above.
[31]
I
am accordingly satisfied that the defence of
lis
alibi pendens
is well-founded and there exists nothing on the papers to justify me
in exercising my discretion to refuse a stay.
[22]
[32]
Under the circumstances
the application should be stayed pending final determination of the
action under case number 136/2021. There
exists no reason to deprive
Cobalt of its costs in respect of this application.
[33]
Maringo is not before
court.
[34]
The question that
arises is whether or not I am entitled to make an order against
Maringo as cited by the Minister in these proceedings.
[35]
Besides
the description of the Second Respondent as identified above, I do
not believe, in any event, that it would be appropriate
to make an
order against the Second Respondent.
[23]
[36]
Having regard to my
finding in respect of the special dilatory plea raised by Cobalt, it
is not necessary for me to analyse the
merits of the review or the
collateral challenge raised in the action.
[37]
Under the circumstances
I make the following order:
[37.1.]
The
application as against the First Respondent is stayed pending final
determination of the action under case number 136/2021.
[37.2.]
No
order is made in respect of the application as against the Second
Respondent.
[37.3.]
The
Applicant is directed to pay the First Respondent’s costs of
the application.
A BEYLEVELD
Acting Judge of the
High Court of South Africa
Appearances:
For
Applicant:
Adv
G Appels acting for The State Attorney
For
First Respondent:
Adv
JG Richards acting for PBK Attorneys
Date
heard:
15
th
June 2023
Date
Delivered:
15
th
June 2023
[1]
The Minister of Police – for the sake of convenience
hereinafter referred to as the “
Minister
”
[2]
For the sake of convenience the First Respondent will hereinafter be
referred to as “
Cobalt
”
whilst the Second Respondent will be referred to as “
Maringo
”.
The Minister in a supplementary affidavit attaches various written
quotations over the period 2013 to 2018. In some of
the annexures to
the supplementary affidavit the quotation identifies the entity
furnishing such a quotation to the Minister
as being Maringo
Communications (Pty) Ltd t/a Jasco Converged Solutions.
[3]
Private Automated Branch Exchange
[4]
Telephone Management Systems
[5]
See for instance
Municipal
Manager: Qaukeni Local Municipality v FV General Trading CC
2010 (1) SA 356
(SCA);
Premier,
Free State v Firechem Free State (Pty) Ltd
2000 (4) SA 413
(SCA);
Khumalo
v MEC for Education, KwaZulu-Natal
2014
(5) SA 579
(CC);
MEC
for Health, Eastern Cape v Kirland Investments (Pty) Ltd t/a Eye &
Laser Institute
2014 (3) SA 481
(CC);
State
Information Technology Agency SoC Ltd v Gajima Holdings (Pty) Ltd
2018 (2) SA 23
(CC) and
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Ltd
2019 (4) SA 331
(CC). See generally Cora Hoexter and Glenn Penfold
Administrative
Law in South Africa
3
rd
Edition at 688 and further
[6]
Such a challenge was for instance recognized in
Gobela
Consulting v Makhado Municipality
[2020] ZASCA 180
;
Gobela
Consulting CC v Makhado Municipality
[2020] JOL 49209
(SCA) where an action was brough to enforce a
contract that was challenged on the basis of non-compliance with
Section 217 of
the Constitution as being invalid and unlawful
(without the necessity to launch a separate counter-application to
review).
See also Hoexter
supra
at 772 and
Merafong
City Local Municipality v AngloGold Ashanti Limited (Merafong)
2017
(2) SA 211
(CC);
2017 (2) BCLR 182
(CC)
[7]
It was initially opposed but thereafter the opposition was limited
to Cobalt only. Maringo is described by the Minister
as Jasco
Electronic Holdings Limited t/a Jasco Converged Solutions being a
public company with its registered address at the
corner of
Alexander Avenue and Second Street, Midrand, Johannesburg
[8]
As indicated the Maringo is therein described as Jasco Electronics
Holdings Limited t/a Jasco Converge Solutions
[9]
Which is confirmed in the answering affidavit and applying
Plascon-Evans
Paints Ltd v Van Riebeek Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) these allegations must be accepted as correct
[10]
For instance Section 217 of the Constitution;
Section 38
of the
Public Finance Management Act No. 1 of 1999
; Regulation 16A of the
Treasury Regulations 2005 and the Supply Chain Management
Regulations of the South African Police Services
[11]
The quotations in respect of Maringo sought to be set aside are for
the period August to June 2015
[12]
Which version must be accepted
[13]
Which is based on the principle of legality
[14]
In addition to what is pleaded in the action, reliance is also
placed in the review application on the provisions of the
Preferential Procurement Policy Framework Act 5 of 2000
. The
Regulations promulgated under such act have of course been declared
unlawful –
Afribusiness
v Minister of Finance
[2020] ZASCA 140
; see also
Minister
of Finance v Afribusiness MPC
2022 (4) SA 362 (CC)
[15]
Harms
Amlers
Precedents of Pleadings
9
th
Edition at 250
[16]
Lis
[17]
Caesarstone
Sedot-Yan Ltd v World of Marble and Granite 2000 CC and Others
2013 (6) SA 499
(SCA) at [2]
[18]
Harms
supra
at 251;
Caesarstone
supra
and
Aon
South Africa (Pty) Ltd v Van den Heever NO and Others
2018 (6) SA 38
(SCA). See also
Nestlé
(South Africa) (Pty) Ltd v Mars Inc
2001
(4) SA 542 (SCA)
[19]
Or for that case
res
iudicata
[20]
Smith v
Porritt and Others
2008 (6) SA 303
(SCA);
Prinsloo
NO v Goldex 15 (Pty) Ltd
2014 (5) SA 297 (SCA)
[21]
At [10]
[22]
In any event, I have an overriding discretion to order a stay even
if all the elements are not present –
Caesarstone
supra
.
Furthermore, the trial court may decide not to set aside the
agreement –
Buffalo
City v Asla
at [105].
[23]
Insofar as the Second Respondent is concerned, the equipment was
delivered and payment made therefor. One must also not
lose
sight of the fact that the delay in launching the review is
inordinately long and it is unlikely that a court would condone
such
delay. This being a legality review the review does not have to be
brought within a fixed time but the yardstick remains
reasonableness. The test to be applied has been set out in various
decisions most recently in
Altech
Radio Holdings v Tshwane City
2021 (3) SA 25
(SCA). See also
Valor
IT v Premier, North West Province and Others
2021 (1) SA 42
(SCA)
and Cape Town City v Aurecon SA (Pty) Ltd
2017 (4) SA 223
(CC) and
Aurecon
South Africa (Pty) Ltd v Cape Town City
2016 (2) SA 199
(SCA). On these papers, the duty incumbent on the
Minister to provide a full explanation covering the entire period of
the delay
was lacking and “…
for
the most part, he is, superficial and unconvincing
”
–
Altech
Radio Holdings supra
at [22]. Lastly, the Minister has known of the particular
transactions for many years and cannot state as it does that it was
unaware because some of the officials’ knowledge could not be
imputed to it. This argument was raised in
Aurecon
in both the SCA and the CC and rejected – see
Aurecon
supra
(SCA) at [16] to [18] and
Aurecon
supra
(CC) at [38].