Marothodi Metsi (Pty) Ltd v Uthukela District Municipality and Others (8216/2022P) [2024] ZAKZPHC 11 (20 February 2024)

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[2024] ZAKZPHC 11
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Marothodi Metsi (Pty) Ltd v Uthukela District Municipality and Others (8216/2022P) [2024] ZAKZPHC 11; [2024] 2 All SA 433 (KZP) (20 February 2024)

FLYNOTES:
ADMINISTRATIVE – Tender – Legality review –
Entire
tender process suffused with inexplicable conduct by applicant and
respondent – Conduct potentially dishonest
and unfair –
Tender poorly devised, carelessly administered and improperly
awarded – Offends principle of fairness
and transparency –
Tender award invalid – Inappropriate to allow applicant
relief that it seeks due to applicant's
conduct – Contract
set aside – Applications dismissed.
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case No:
8216/2022P
In the matter between:
MAROTHODI METSI (PTY)
LTD

APPLICANT
and
UTHUKELA DISTRICT
MUNICIPALITY

FIRST RESPONDENT
PREMIER OF
KWAZULU-NATAL

SECOND RESPONDENT
MEMBER OF THE
EXECUTIVE COUNCIL (MEC)
THIRD RESPONDENT
FOR CO-OPERATIVE
GOVERNANCE AND
TRADITIONAL AFFAIRS
(KWAZULU-NATAL)
PROVINCIAL EXECUTIVE
COUNCIL

FOURTH RESPONDENT
KWAZULU-NATAL
JAMES NKOSINATHI
MADONDO N.O.

FIFTH RESPONDENT
Coram
:
Mossop J
Heard
:
26 January 2023
Delivered
:
20 February 2023
ORDER
The
following order is granted
:
1.
The money judgment
:
(a)
The first respondent’s application for a money judgment against
the applicant,
dated 14 December 2023, is adjourned sine die;
(b)
All questions of costs are reserved.
2.
The urgent application
:
(a)
The applicant’s urgent application, dated 27 June 2022, is
dismissed;
(b)
The applicant shall pay the respondents’ costs, such to include
the costs
of two counsel where so employed.
3.
The rectification application
:
(a)
The applicant’s rectification application, dated 22 February
2023, is dismissed;
(b)
The applicant shall pay the respondents’ costs, such to include
the costs of two counsel
where so employed.
4.
The review application
:
(a)
The decision of the first respondent to award tender number
01/2020-PRS to the
Marothodi Metsi and Sebata Group is reviewed,
declared invalid and is set aside;
(b)
The contract concluded between the first respondent and the Marothodi
Metsi
and Sebata Group, dated 30 July 2020, pursuant to the award of
tender number 01/2020-PRS to the Marothodi Metsi and Sebata Group,
is
reviewed, declared invalid and is set aside.
(c)
The applicant shall pay the respondents’ costs, such to include
the costs of two counsel where so employed.
JUDGMENT
MOSSOP J:
Introduction
[1]
During
February 2020, the first respondent published a tender in a
nationally distributed Sunday newspaper and invited bids to be

submitted to it. Five responses were received from competing bidders
and ultimately the first respondent awarded the tender to
two
entities, one of which was an entity called ‘the Marothodi
Metsi and Sebata Group’ (the Marothodi Metsi and Sebata

Group).
[1]
As a consequence, the
first respondent thereafter duly entered into an agreement with the
Marothodi Metsi and Sebata Group (the
contract). On 3 June 2022, the
first respondent terminated that contract. In reaction thereto, on 4
July 2022, the applicant, who
is not the Marothodi Metsi and Sebata
Group but rather an incorporated company called ‘Marothodi
Metsi (Pty) Ltd’,
brought an urgent application, inter alia, in
which it sought to uplift the suspension of the contract (it
apparently did not regard
the contract as having been terminated) and
sought specific performance of the contract (the urgent
application).
[2]
[2]
The urgent application was the opening scherzo in
a complex segue of related applications that then followed. Having
launched the
urgent application, the applicant brought an application
to join the second to fifth respondents to that application (the
joinder
application). Later, it brought an application for the
rectification of the very contract that it sought to enforce in the
urgent
application (the rectification application). The first
respondent, in turn, brought a counter-application in the form of a
legality
review which seeks to set aside the decision to award the
tender to the Marothodi Metsi and Sebata Group and the contract (the
legality review). Finally, the first respondent, at the eleventh
hour, launched an application for a money judgment and associated

relief against the applicant (the money judgment application). All of
these applications were brought under the same case number.
[3]
Of these applications, only the joinder
application is no longer contentious. On 15 March 2023, Smart AJ
granted an order joining
the second, third, fourth and fifth
respondents to the urgent application.
[4]
Accordingly, before me is the urgent application,
the rectification application, the legality review, and the money
judgment application.
These applications occupy ten volumes of
documents. All the applications, excluding the money judgment
application, were due to
be argued before me on the opposed roll on
10 November 2023, but were not so argued for reasons that I need not
go into. I had
read the ten volumes that these applications occupy,
and rather than require another judge to read them, I agreed to
retain the
matter. The applications then extant on 10 November 2023
were set down for argument on 26 January 2024. There was no money
judgment
application in existence at the stage when that date was
arranged. The money judgment application was launched on 14 December
2023
and was also set down for 26 January 2024. On 26 January 2024, I
indicated to all counsel that I was not disposed to hearing the
money
judgment application for fear that there would be insufficient time
to consider the other applications in respect of which
the date had
been arranged. It follows that the money judgment application is to
be adjourned sine die, with the costs reserved.
[5]
Irrespective of which application I may be dealing
with in this judgment, I shall refer to the parties as they are cited
in the
urgent application after the joinder of the second to fifth
respondents. Thus, the applicant and first respondent in the urgent

application will continuously be referred to throughout this judgment
by those appellations.
[6]
Before proceeding further, it is necessary to
thank counsel for their assistance. In this regard, Mr Dickson SC
appeared for the
applicant, Mr Broster SC and Ms Qono appeared for
the first respondent and Mr de Wet SC appeared for all the other
respondents.
There was a lively exchange of submissions between
counsel when the matter was argued, which was both entertaining and
instructive.
[7]
So, where to begin? Oscar
Hammerstein II,
[3]
in writing
the lyrics for the song ‘Do-Re-Mi’ in ‘The Sound of
Music’, proposed that one should start at
the beginning because
it is a very good place to start. In my view, that may not be a very
good place to start in these multiple
applications, if the beginning
is taken to be the urgent application. I could not commence with that
application because it is
premised upon a contract that, according to
the applicant, is to be rectified. If I was to follow the sequence in
which the applications
were delivered, I would then have to start
with the rectification application to determine whether the contract
should be rectified
and then enforced through the urgent application.
But i
t
seems to me that the logical place to commence is the review
application as it seeks, as one of its goals, to set aside the
contract
that the applicant wishes to enforce in the urgent
application and to rectify in the rectification application. If the
review is
upheld, that will put an end to both the urgent application
and the rectification application as there will be no contract to
enforce
or to rectify. If it is not successful, those applications
will then be considered. I shall therefore not begin at the very
beginning
but will begin with the legality review.
Legality review
Legal principles
[8]
It is
not in dispute that the first respondent is an organ of state
[4]
and i
t
is now settled law that an organ of state may not remedy a decision
that it has taken, but no longer supports, by invoking the
provisions
of the Promotion of Administrative Justice Act
3
of 2000 (PAJA).
[5]
It is
confined, instead, to a legality review. The objective
of
such self-review is, notionally:
‘
to
promote open, responsive and accountable government’.
[6]
[9]
In
Fedsure
Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan
Council
,
[7]
the
Constitutional Court held that:
‘…
a local government may
only act within the powers lawfully conferred upon it. There is
nothing startling in this proposition - it
is a fundamental principle
of the rule of law, recognised widely, that the exercise of public
power is only legitimate where lawful.
The rule of law - to the
extent at least that it expresses this principle of legality -
is generally understood to be a fundamental
principle of
constitutional law.’ (Footnote omitted.)
[10]
In
a similar vein, Sutherland DJP observed in
Transnet
SOC Ltd and another v CRRC E-Loco Supply (Pty) Ltd and others
that:
[8]
‘
The
appropriate starting point is to acknowledge the constitutional
grundnorm
that
the Rule of Law is supreme. Upon that foundation rests the Principle
of Legality. That principle finds its most potent expression
in the
maxim that every exercise of a public power must be authorised by
law. Any purported exercise of a public power that fails
that test is
unlawful.’
[9]
[11]
In
Affordable
Medicines Trust and others v Minister of Health and others
,
[10]
the court summed up the position when it stated that:
‘
The exercise of
public power must therefore comply with the Constitution, which is
the supreme law, and the doctrine of legality,
which is part of that
law. The doctrine of legality, which is an incident of the rule of
law, is one of the constitutional
controls through which the
exercise of public power is regulated by the Constitution.'
(Footnotes omitted.)
[12]
The noble principles highlighted in the extracts
above have their source in s 217(1) of the Constitution which,
in peremptory
terms, states that:
‘
[w]hen
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.’
It
barely requires stating that the Constitution is the supreme law of
this country and that any conduct inconsistent with it is

invalid.
[11]
[13]
The
importance of s 217 of the Constitution was emphasised in
Steenkamp
NO v Provincial Tender Board, Eastern Cape
,
[12]
when Moseneke DCJ stated that:
‘
Section
217 of the Constitution is the source of the powers and function of a
government tender board. It lays down that an organ
of State in any
of the three spheres of government, if authorised by law may contract
for goods and services on behalf of government.
However, the
tendering system it devises must be fair, equitable, transparent,
competitive and cost-effective. This requirement
must be understood
together with the constitutional precepts on administrative justice
in s 33 and the basic values governing public
administration in
s 195(1).’
[13]
(Footnote omitted.)
[14]
The
Constitutional Court stated in
Allpay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer of the South African Social Security Agency
and
others
that:
[14]
‘
Compliance
with the requirements for a valid tender process, issued in
accordance with the constitutional and legislative procurement

framework, is thus legally required. These requirements are not
merely internal prescripts that… may [be] disregard[ed]
at
whim. Too hold otherwise would undermine the demands of equal
treatment, transparency and efficiency under the Constitution.’
[15]
(Footnotes omitted.)
The relevant facts
[15]
The first respondent is a district municipality
with an unfortunate history. It has been beset with administrative
and financial
difficulties. As a consequence, the third respondent,
acting in terms of the provisions of s 139 of the Constitution,
intervened
in its affairs and appointed an administrator to take
control of the municipality. It appears that at one stage a Mr Martin
Sithole
(Mr Sithole) was the administrator, being appointed to that
position on 1 October 2019 and remaining in that position until
August
2020. With effect from 1 September 2020, Mr Sithole became the
first respondent’s municipal manager, a position that he held

until the end of March 2022 when he was succeeded by Mr Mpumelelo
Mnguni (Mr Mnguni), first in an acting capacity and then in a

permanent capacity. The current administrator of the municipality is
the fifth respondent, who was appointed on 11 May 2022.
[16]
During February 2020, prior to the appointment of
both the fifth respondent and Mr Mnguni but while Mr Sithole was the
administrator,
the first respondent published the tender in question.
The invitation to tender read as follows:
‘
Tender
No 01/2020-PRS
The uThukela District
Municipality seeks professional service providers to formulate
business plan (sic) on supply and installation
of smart metering
system together with technical, economical (sic), social &
institutional interventions in addressing issues
relating to our
Municipal Strategic Self Assessment (MuSSA) risks. The plan has to
also reflect in the municipality acquiring Blue
Drop and Green Drop
status and the dynamics relating to that accordingly. Sourcing of
funding must be at no risk to the uThukela
Municipality and must in
no way whatsoever affect our current financial situation.’
The advert went on to
state that the tender closed at 12h00 on 20 February 2020.
[17]
From its wording, the advertisement seemed to seek
merely the creation of a business plan. It also referred to the first
respondent’s
‘Municipal Strategic Self Assessment (MuSSA)
risks’.
According to the business plan prepared by the
applicant, which is attached to the founding affidavit in the urgent
application,
MuSSA
is an annual assessment undertaken by Water Services Authorities
(WSA):
‘
The
MuSSA is used to determine the overall business health of a WSA. By
identifying key municipal vulnerabilities across a range
of business
attributes it allows municipalities to effectively plan and direct
their resources more effectively, and for the Department
of Water and
Sanitation (DWS) and its partners to provide more focussed support.’
That
being the case, the request for the development of a business plan
appears to gel with the first respondent’s MuSSA obligations.
[18]
While it was reasonably apparent that what was
required was a business plan involving smart meters, the wording of
the advertisement
did not explicitly state what the smart meters
should measure. However, the included reference to ‘Blue Drop’
and ‘Green
Drop’ may be an indication of what was
required. But otherwise, it is difficult to comprehend what the
functioning of the
smart metering system was intended to cover.
[19]
It transpires that what the smart meters were
intended to measure was water consumption. The uncertainty as to what
was to be measured
is matched by the uncertainty of what services the
first respondent actually required. As already mentioned, on the
wording of
the advertisement, it appears that what was sought was the
development of a business plan (or plans according to the wording of

the tender specification). However, the technical specification
component of the bid document explained that what was required
was
the supply of the actual smart meters themselves, not merely a
business plan relating to them. This appears from the following

extract from that document:
‘
The
scope of the work is for the supply of a complete pre-payment
metering system comprising of a meter box, a water management
device,
a water meter, a user interface unit (if relevant) and all fittings.
A Meter Management System (MMS) is to be included
as supplementary to
the solution, without which the solution will be deemed as
incomplete.’
[20]
There is nothing, however, that indicated that the
tender also involved the installation of the required smart meters or
the collection
of revenue arising out of the installation of the
smart meters.
[21]
As is to be expected, there were conditions
attached to the tender. I mention here only the relevant conditions.
The prescribed
bid document indicated that:
(a)
The 90/10-point system was to apply to the tender;
(b)
A bidder had to score a minimum of 60 points in
pre-qualification criteria to progress to the functionality
evaluation;
(c)
Where a bid was submitted by a consortium or joint
venture, each party was required to submit a separate tax clearance
certificate.
The note to that stipulation in the bid document was:
‘
NOTE:
Failure to do so will lead to your tender being disqualified.’
(d)
If the tendered value of the bid submitted
exceeded R10 million (including VAT) and a bidder was required by law
to prepare annual
financial statements for auditing, then a bidder
was required to furnish its audited annual financial statements for
the preceding
three years or since the date of its establishment if
it had been established during the course of those preceding three
years.
[22]
On 7 July 2020, the first respondent awarded the
tender to the Marothodi Metsi and Sebata Group and communicated that
fact to it
by way of a letter of that date (the first award letter).
The letter did not mention the other entity to whom the tender had
also
been awarded. It went on to itemise the scope of the work to be
performed as being:
‘
Formulation
of business Plan on the supply and installation of Smart water meters
Sourcing of Funding on a
Risk Basis
Installation and
Maintenance of Smart Water Meters.’
The letter went on to
state that:
‘
The
contract is hereby awarded to you at a unit price of R1 122,92
per meter inclusive of VAT at 15%.’
[23]
The first award letter had a signature line for
acceptance by the Marothodi Metsi and Sebata Group of the terms
contained in the
letter. It was required to sign the letter and
return it to the first respondent. It did not sign the letter and
there is no evidence
that it returned the letter to the first
respondent.
[24]
The next day, 8 July 2020, a second letter of
award was sent to the Marothodi Metsi and Sebata Group (the second
award letter).
The second award letter now had a markedly different
description of the scope of work required to be performed, namely:
‘
1.
Formulation of business plan on the supply and installation of
pre-paid Smart water
meters and sourcing of funding from agencies on
a risk basis.
2.
Bad Debt Recovery and Revenue enhancement. (The immediate
implementation of this
intervention is of utmost importance in order
to ensure that the uThukela District Municipality is a viable
business entity).
3.
Installation and maintenance of Smart water meters together with
holistic interventions.
4.
Vendorring (sic) System together with the relevant
Financial Support System and Mechanisms.’
The second award letter
also included the following:
‘
The
unit price per meter is R1 122,92. Marothodi Metsi will charge
15%
[16]
commission on the
revenue collected from 60 days and above in all areas within the
District.’
[25]
As with the first award letter, there was a
signature line for the Marothodi Metsi and Sebata Group on the second
award letter.
This time, the letter was signed, apparently on behalf
of that entity. The ultimate consequence was that on 30 June 2020,
the first
respondent and the Marothodi Metsi and Sebata Group put pen
to paper and signed the contract.
[26]
Those are the relevant facts. The first respondent
seeks the review of its own decision to award the tender to the
Marothodi Metsi
and Sebata Group based, essentially, on five grounds,
namely:
(a)
There is no entity known as the Marothodi Metsi
and Sebata Group;
(b)
The Sebata Group did not submit certain compulsory
documentation that it was required to put up;
(c)
No audited annual financial statements were put up
as required by the bid conditions;
(d)
The winning bid was incorrectly assessed,
and scored, by the first respondent’s bid evaluation committee;
and
(e)
The terms of reference of the bid were
impermissibly departed from by the first respondent.
[27]
The Supreme Court of Appeal has indicated that in
a review application arising out of the procurement process, a court
hearing such
a matter is required:
‘
to
assess the evidence that impugns the procurement process to establish
whether such evidence justifies the conclusion that any
one of the
grounds of review has been established’.
[17]
And
the Constitutional Court in
Allpay
[18]
stated that:
‘
The
materiality of irregularities is determined primarily by assessing
whether the purposes the tender requirements serve have been

substantively achieved.’
The Constitutional Court
insisted in
Allpay
that process formalities must be complied
with and indicated that such compliance serves a three-fold purpose:
‘
(a)
it
ensures fairness to participants in the bid process;
(b)
it
enhances the likelihood of efficiency and optimality in the outcome;
and
(c)
it
serves as a guardian against a process skewed by corrupt
influences.’
[19]
First ground of
review: there is no entity known as the Marothodi Metsi and Sebata
Group
[28]
I turn now to consider the first ground of review.
In its founding affidavit in the urgent application, the applicant
put up what
it stated is the bid document that it submitted to the
first respondent in response to the advertisement (the first bid
document).
It claims that the first bid document is that document
that led to it being awarded the tender.
[29]
Parties intending to submit bids were required to
purchase a bid document from the first respondent. The bid document
is a lengthy
(75 pages), pre-printed document, with spaces for
information to be inserted and to which annexures could be attached.
The necessary
information has been inserted in the first bid document
in manuscript. Its first page states that the bidder is Marothodi
Metsi
and that its contact person is a Mr Paul Grobler (Mr Grobler).
[30]
The submission of the applicant that the
first bid document is the document that it submitted to the first
respondent is vigorously
disputed by the latter. It denies in no
uncertain terms that the bidder was Marothodi Metsi, and it denies
receiving the first
bid document. Instead, it states that it received
a different bid document (the second bid document) from an entity
that described
itself not as Marothodi Metsi (Pty) Ltd but as the
Marothodi Metsi and Sebata Group.
[31]
In bringing its review application, the first
respondent complied with the provisions of Uniform rule 53 and put up
the review record
of the documents that it considered when evaluating
and awarding the tender (the review record). The first bid document
is before
the court as an attachment to the founding affidavit in the
urgent application. The second bid document forms part of the review

record. The first bid document is not to be found in the review
record. As will become apparent, a comparison of the two bid
documents
reveals them to be significantly different in material
aspects.
[32]
Physically, there are two versions of the bid
document before the court. It is beyond dispute that they both exist,
and that they
are not identical. The second bid document, as with the
first bid document, has been completed in manuscript, although
clearly
by a different hand. The second bid document appears, like
the first, to have been signed by Mr Grobler. Mr Grobler has a very
distinctive signature:
The example of Mr
Grobler’s signature above comes from the second bid document.
[33]
Because of their common foundational document,
namely the purchased bid document, both bid documents have the
identical number of
pages, and can thus be easily compared with each
other, as I now do:
(a)
Page 1:     this page
requires, inter alia, the insertion of the name of the entity
submitting the bid. In the
first bid document, this is recorded as
being ‘Marothodi Metsi’. In second bid document, it is
recorded as being ‘Marothodi
Metsi and Sebata Group’;
(b)
Page 4:     this is a page
with the title ‘Checklist’, and it requires the name of
the bidder to
be inserted. On both versions of the bid document, the
same name appears, namely ‘Marothodi Metsi & Sebata Group’.

This page also indicates that the person completing the document, Mr
Grobler, is a director of the ‘Marothodi Metsi and Sebata

Group’. That is plainly incorrect, for the ‘Marothodi
Metsi and Sebata Group’ is not an incorporated entity;
(c)
Page 5: This page is entitled ‘Offer’
and sets out the form of the offer and acceptance in the event of the
bid being
successful. In the first bid document, the name inserted is
‘Marothodi Metsi’. In the second bid document, the name

that appears is ‘Marothodi Metsi and Sebata Group’;
(d)
Page 7:     this is a page
entitled ‘Invitation to Bid’. It seeks the name of the
bidder. In both
versions of the bid documents the name ‘Marothodi
Metsi and Sebata Group’ appears;
(e)
Page 10:   this is a page dealing with
the compulsory briefing session that was to be conducted by the first
respondent.
It seeks the name of the representative of the bidder. In
both versions of the bid document the bidder is identified as
‘Marothodi
Metsi and Sebata Group’;
(f)
Page 22:   this page is entitled ‘Proof
of Good Standing with Municipal Accounts’. It has a space for
the
name of the bidder. In the first bid document the name ‘Marothodi
Metsi’ appears, while in the second bid document the
name
‘Marothodi Metsi and Sebata Group’ appears;
(g)
Page 44:   this page calls for the name
of the bidder to be inserted. In the first bid document the name
‘Paul Grobler’
appears, while in the second bid document
the name ‘Marothodi Metsi and Sebata Group’ appears;
(h)
Page 46:   this page, entitled
‘Certificate of Independent Bid Determination’, again
requires the name of
the bidder to be inserted. In the first bid
document the name ‘Paul Grobler’ appears for a second
time, while in the
second bid document the name ‘Marothodi
Metsi and Sebata Group’ appears;
(i)
Page 47: this is the second page of the document
referred to in the previous sub-paragraph. In the first bid document
the name ‘Paul
Grobler’ appears for the third time, while
the second bid document has the name ‘Marothodi Metsi and
Sebata Group’.
(j)
Page 49:   this page also calls for the
name of the bidder to be inserted. In the first bid document the name
‘Paul
Grobler’ appears for a fourth time, while in the
second bid document the name ‘Marothodi Metsi and Sebata Group’

appears.
[34]
There is a further significant difference between
the two bid documents that does not relate to the identity of the
bidder. At page
57 of the bid document, the bidder is required to
provide a pricing summary. The contract to be concluded in the event
of a bid
being successful was to be for a period of three years. This
page accordingly required the unit cost of a smart meter to be
specified
and then sought the price for each year of the three-year
period. In the first bid document, the space on the document for the
unit cost of a smart meter is left blank, but the price for the first
year was expressed as being R295, the cost for the second
year was
expressed as being R324.50 and in the third, and final year, the cost
was expressed as being R356.95. Adding these amounts
together, and
adding VAT, the total comes to R1 122.92. In the second bid
document, in the space for the unit cost of a smart
meter, the
aforementioned figure of R1 122.92 appears. However, the price
per annum has now skyrocketed to R227 699 001.33,
for each
of the three years. The total cost for the three years of the
contract, including VAT, now comes to the staggering amount
of
R785 561 554.59.
[35]
From the rather tedious comparison exercise
referred to above, it is apparent that in every instance in the
second bid document
where the identity of the bidder is requested,
and there are ten such instances, the name supplied has been
‘Marothodi Metsi
and Sebata Group’. That name appears
only three times in the first bid document, but other names also
appear as being the
bidder, namely ‘Marothodi Metsi’ and
‘Paul Grobler’.
[36]
The review record has been put up under cover of
an affidavit of the official employed by the first respondent who has
had it in
her custody since inception. Mr Dickson, who appears for
the applicant, in argument conceded that the review record correctly
reflected
the documents that the first respondent considered when
determining the tender. That being the case, the existence of the
second
bid document is admitted. Arising from this, why there should
be two different versions of the bid document and why the first bid

document does not form part of the review record if it was, indeed,
submitted to the first respondent, are obvious questions that
come to
mind.
[37]
Neither of these questions is addressed by
the applicant at any stage in any of the affidavits that it has
delivered across the
range of the applications before me. In my view,
it calls for an explanation and I accordingly asked Mr Dickson to
address me on
the issue. If I understood his explanation correctly,
it is that the applicant holds the view that the first respondent has
put
up no evidence to challenge what the applicant states regarding
the validity of the first bid document. The argument goes that a
Mr
Daniel Masomboka (Mr Masomboka), the chairman of the applicant,
deposed to the applicant’s founding affidavit in the urgent

application. In that affidavit, he identified the first bid document
as being the document submitted to the first respondent. Mr
Sithole,
who it will be remembered was the administrator at the time of the
tender, has, according to counsel, confirmed in an
affidavit
delivered on behalf of the applicant that the first bid document is
the bid document that the first respondent received
from the
applicant. Thus, it is argued, both sides involved in the tender have
confirmed that the correct bid was that contained
in the first bid
document. The applicant’s argument proceeds that the first
respondent has not been able to put up affidavits
from any other
person involved in the tender who may be able to contradict what Mr
Masomboka and Mr Sithole say. The only evidence
on the point is,
accordingly, evidence adduced in favour of the applicant’s
version. Thus, the court must accept the applicant’s
version,
for the first respondent’s version is simply based upon
conjecture and supposition by persons not directly involved
with the
tender.
[38]
In my view, that is a superficial and unattractive
argument that does not account for all the known facts. The known
facts are:
(a)
The applicant has admitted that the review record
put up by the first respondent in terms of Uniform rule 53 correctly
reflects
the documents considered by the first respondent’s bid
evaluation committee. That admission reaffirms the existence of the

second bid document.
(b)
The first bid document does not appear in the
review record.
(c)
Mr Sithole did not actually confirm the identity
of the bidder, nor did he identify the bid document submitted to the
first respondent.
What Mr Sithole actually states in his affidavit is
that:
‘
I
do not recall the issue of the precise identity of the tenderer but
it was my assumption that it was the Applicant.’
The identity of the
bidder (and, inferentially, the bid document) has now been degraded
to a mere assumption. Mr Sithole, therefore,
does not confirm the
version of Mr Masomboka. The argument must accordingly be rejected.
The position is thus that no explanation
has been provided by the
applicant for the existence of the two different bid documents that
each bear the signature of Mr Grobler.
[39]
There are, however, reliable indications that what
was submitted to the first respondent was not the first bid document
but was,
rather, the second bid document:
(a)
The first respondent decided that the Marothodi
Metsi and Sebata Group was the winning bidder and not the applicant.
It did not
decide that the successful bidder was Marothodi Metsi or
Marothodi Metsi (Pty) Ltd. That decision is entirely consistent with
the
content of the second bid document and is inconsistent with the
identity of the bidding party in the first bid document which, at

best, could be described as unclear, with no less than three
different names being used to identify the bidder;
(b)
The first respondent at all times believed that
the successful bidder had been the Marothodi Metsi and Sebata Group:
that is why
both the first and second award letters were addressed to
the Marothodi Metsi and Sebata Group;
(c)
The first respondent concluded the contract, not
with the applicant or any other entity, but with the Marothodi Metsi
and Sebata
Group. It is unlikely that this would have occurred had
the first bid document been the winning bid;
(d)
Prior to the adjudication of the tender, the
applicant sent a letter to the first respondent. The letter was dated
20 February 2020,
the closing date of the tender, and appears to have
accompanied the submission of the bid. In that letter, the following
is stated:
‘
4.
Marothodi Metsi and Sebata Group understands the nature of the works
in that it is
a holistic intervention and therefore has selected
subcontractors from a professional background who will be able to
assist in
meeting the expectations as a consolidated team.
5.
Marothodi Metsi and Sebata Group is a firm who has
done many similar assignments for the Department of Water and
Sanitation, Water
Boards and Local Government since 2004 with focus
on turning around dysfunctional municipalities with the revenue
enhancement and
Supplying (sic) and installation of Smart Water
Meters.’
It
is improbable that such a letter would have accompanied the first bid
document: it is for more likely that it would accompany
the second
bid document, which only bore the name ‘Marothodi Metsi and
Sebata Group’ and which name is referred to
in the letter.
Ignoring the fact that the applicant has only been registered since
2016
[20]
and could not have
performed contracts since 2004, the content of the letter accords
with what appears in the second bid document
and not the first bid
document; and
(e)
The copy of the first bid document before the
court is not a true copy of the original first bid document. The
original of the first
bid document can no longer be in the
applicant’s possession for, on its own version, it was
submitted to the first respondent.
Mr Broster drew my attention to
page 10 of the first bid document. That page deals with the
compulsory briefing session that all
bidders had to attend. It bears
a place for the signature of the representative of the bidder and a
place for the signature of
the representative of the first
respondent. The signature of the applicant’s representative, Mr
Grobler, appears where it
ought to. Where the representative of the
first respondent was required to append a signature, the following
wording appears:
‘
(Was
done on original).’
The second bid document,
on the other hand, indeed bears a signature of a representative of
the first respondent and the stamp of
the Supply Chain Management
Unit Procurement Section of the first respondent on page 10. No other
version of the first bid document
has been shown to exist and has,
therefore, not been put up. The only other bid document that, indeed,
has a signature of the first
respondent’s official on it on
page 10, is the second bid document.
[40]
After careful consideration, I must find, as I do,
that the bid document delivered by the applicant to the first
respondent was
not the first bid document but was the second bid
document. The bidder was thus not Marothodi Metsi, as submitted by
the applicant,
but rather the Marothodi Metsi and Sebata Group as
stated by the first respondent. On the applicant’s own version,
there
is no such entity as will be revealed hereunder.
Second ground of
review: the failure to submit compulsory documentation
[41]
That brings me to the second ground of review. In
its replying affidavit in the review application, the applicant
states as follows:
‘
The
Sebata Group is not part of Applicant, and we are not in a
partnership with them in the legal sense. They are entirely separate

and the manufacturer/supplier of the meters.’
And later, the following
is said by it:
‘
The
contract was erroneously drawn up by the municipality in the name of
‘Marothodi Metsi and Sebata Group’. This as
an entity
does not exist and applicant contends that this should have been
drawn up in the name of Marothodi Metsi only.’
Despite the wording of
the letter of 20 February 2023, in which Mr Grobler stated, in
reference to the Marothodi Metsi and Sebata
Group, that ‘We are
a registered firm …’, it is not in dispute that there is
no legal entity known as the Marothodi
Metsi and Sebata Group. The
applicant is an incorporated entity, and the Sebata Group is an
agglomeration of companies apart from,
and distinct from, the
applicant. The applicant further asserts that it and the Sebata Group
did not form a joint venture for the
purpose of bidding for the
tender.
[42]
Yet, the second bid document is in both of
their names, and it is to those two bidders that the tender was
ultimately awarded. Even
more confusingly, in bringing the urgent
application, the applicant, inexplicably, in its founding affidavit
describes itself as
being:
‘
Marothodi
Metsi (Pty) Ltd and Sebata Group, a company duly registered in
accordance with the laws of the Republic of South Africa
…’
The applicant claims that
it never submitted a bid in the name of the Marothodi Metsi and
Sebata Group, yet in the urgent application
that is precisely how it
has described itself.
[43]
The
first respondent, in inviting bids, identified certain compulsory
documentation that had to be submitted with all bids, such
as a tax
clearance certificate. It was well entitled to do so. As Leach JA
stated in
Dr
JS Moroka Municipality and others v Betram (Pty) Ltd and another
:
[21]
‘
Essentially
it was for the municipality, and not the court, to decide what should
be a prerequisite for a valid tender, and a failure
to comply with
prescribed conditions will result in a tender being disqualified as
an “acceptable tender” under by
the Procurement Act
unless those conditions are immaterial, unreasonable or
unconstitutional.’
[44]
It is not in dispute that the Sebata Group did not
file any documents, let alone a tax clearance certificate. The point
now taken
by the first respondent is that because the Sebata Group
made no attempt whatsoever to put up the compulsory documentation,
the
tender could not have progressed to the second stage of
assessment and therefore could not have been awarded to the Marothodi
Metsi
and Sebata Group. In short, it ought to have immediately been
disqualified. The document required by the first respondent from the

Sebata Group would have allowed it to evaluate the Sebata Group’s
legal, tax compliance, and rates and taxes status. It is,
therefore,
an important document that is material and serves a lawful purpose. I
find the ground of review to be a good one and
the failure to put up
the compulsory documentation should have resulted in the bid being
declared non-responsive.
Third ground of
review: the failure to provide audited financial statements
[45]
The third ground of review relied upon by the
first respondent is that no audited annual financial statements were
submitted in
support of the bid. Page 48 of the bid document, in
part, states the following:
‘
DECLARATION
FOR PROCUREMENT ABOVE R10 MILLION (ALL APPLICABLE TAXES INCLUDED
1
Are you by law required to prepare annual
financial statements for auditing?
2
If yes, submit audited annual statements for the
past three years or since the date of establishment if established
during the past
three years.’
[46]
From the wording of the second bid document, it is
apparent that the value of the tender to the bidder was
R785 561 554.59.
The procurement was thus above R10 million
and the requirement to supply audited annual financial statements
(the financial
statements) was triggered if the bidder was required
by law to prepare them. In the first bid document, the answer
supplied to
the question is ‘Yes’ as to this legal
obligation. Nothing further is stated. In the second bid document,
the question
posed has also been answered in the affirmative. In
addition, the following is also stated:
‘
Attached
in returnable schedule page 16.’
[47]
Thus, irrespective of which bid document is
considered, the bidder confirmed that it is obliged by law to deliver
financial statements.
Commencing at page 394 of the review record are
financial statements for the financial years ending 28 February 2017,
28 February
2018, and 28 February 2019 respectively. They are,
obviously, not the financial statements of the Marothodi Metsi and
Sebata Group,
which does not exist: they are the financial statements
of the applicant. However, it is apparent that they are not audited
annual
financial statements. Instead, they are financial statements
that have been subjected to independent review. This is confirmed by

the independent reviewer’s report in each of the financial
statements where he states that:
‘
We
have not performed an audit and accordingly we do not express an
audit opinion.’
[48]
The obligation to furnish
audited annual financial statements is found in
regulation 21
(d)
(i)
of the
Municipal Supply Chain Management Regulations,
[22
]
which provides that:
‘
(1)
A
supply chain management policy must determine the criteria to which
bid documentation for a competitive bidding process must comply,
and
state that in addition to
regulation 13
the bid documentation must -
...
(
d
)
If the value of the transaction is
expected to exceed R10 million (VAT included), require bidders
to
furnish -
(i)
if the bidder is required
by law to prepare annual financial statements for auditing,
their
audited annual financial statements –
(
aa
)
for the past three years; or
(bb)
since their establishment if established during the past three
years...'
[49]
The positive averment in the second bid document
that the applicant was in law required to produce financial
statements and its
failure to do so, again, rendered the bid
non-responsive. The bid should have progressed no further.
[50]
Before
proceeding to the next ground, something needs to be said about the
content of the financial statements. It appears that
the bid
evaluation committee paid no attention to this. Had it done so, it
may have been startled by what is contained therein,
particularly
given the context of a tender bid. The three years of annual
statements are virtually identical. Where information
is lacking in
one, it is lacking in the other two.
[23]
I have compared the financial statements for each of the three years
and the financial information contained in all three annual
financial
statements is identical for every year. The only value that is
expressed is that relating to ‘Property plant equipment’,

where the value is recorded as ‘R2 100 000’.
This figure also appears as being ‘Equity attributable
to
owners’ and as ‘Share capital’. In all other
respects, without exception, the figure appearing in the statements

is ‘0.00’. Thus, the applicant has no cash, no trade and
other receivables, no revenue, made no gross profit (nor an
operating
profit) and its profit for the year was ‘0.00’. Its total
comprehensive income for each of the three years
was, not
surprisingly, ‘0.00’. Finally, the financial statements
are incomplete. The compiler thereof has placed numbers
next to
certain entries. Those numbers indicate a reference to a specific
note.
Notes
in financial statements perform the function of explaining
assumptions used
to
prepare the numbers in the financial statements as well as the
accounting policies adopted by the company
.
Each
financial statement commences with a note 2 and ends with a note 14.
None of them have a note 1 or a note 13. But the notes
in every
iteration of the financial statements end at 1.8. They are,
therefore, incomplete and of no real assistance in explaining
any of
the entries in the financial statements. This incompleteness
attracted no adverse comment from the bid evaluation committee.
[51]
What emerges from the financial statements is that
the applicant has never traded and has generated no income over the
three years
preceding the tender. Its ability to perform the contract
must have been in serious doubt. This is of significance when the
fourth
ground of review is considered.
Fourth ground of
review: incorrect assessment of the winning bid
[52]
The fourth ground of review relied upon by the
first respondent alleges that the Marothodi Metsi and Sebata Group
bid was incorrectly
assessed, and scored, by the first respondent’s
bid evaluation committee. The general thrust of this ground is that
the Marothodi
Metsi and Sebata Group bid would not have progressed to
the functionality assessment had it been properly evaluated.
[53]
The first respondent makes the case that the
evaluation process pertaining to received bids had three parts to it:
the evaluation
of the prescribed compulsory returnable documents that
each bidder had to submit, the assessment of the functionality of
each bidder,
and the assessment of the price and preferential points
in compliance with the
Preferential Procurement Policy Framework Act
5 of 2000
. The minimum point score at the second level of assessment
was 60 points out of a possible 100 points.
[54]
The bid document required a bidder to score itself
in each of the following four categories, namely the bidder’s
experience,
the bidder’s capacity, the bidder’s locality,
and the bidder’s approach paper. I deal in detail only with the

first three. Both the first and the second bid documents have
identical scores recorded. In the second bid document, the bidder

scored itself as follows:
(a)
Bidder’s Experience
Description
Points
Points
Points
Number of similar
supply projects/orders undertaken in the last five years with
organs of state/municipalities
1 > 4
projects
5 < 9
Projects
> 10
Projects
Points allocated
5
15
30
Points claimed, Simply
tick the appropriate box
✔
(b)
Bidder’s Capacity
Description
Points
Points
Points
Number of year’s
company has been in practice doing similar work requirements
1 > 4
Years
5 < 9
Years
> 10
Years
Points allocated
5
15
20
Points claimed, Simply
tick the appropriate box
✔
(c)
Bidder’s Locality
Description
Points
Points
Points
Bidder’s
location and warehouse facilities
Outside of the
District
Within the District
Within 5Km to
Ladysmith CBD
Points allocated
5
15
20
Points claimed, Simply
tick the appropriate box
✔
[55]
The bidder thus gave itself maximum points in each
of these three categories. This assessment was accepted by the bid
evaluation
committee without demur. In considering each of these
categories, the following emerges:
(a)
Insofar as the experience category is concerned,
letters of reference were to be attached to the bid to support the
response given.
None were attached that recorded the involvement of
the Marothodi Metsi and Sebata Group or the applicant. Nonetheless,
30 points
were awarded and allocated by the bid evaluation committee.
None ought to have been awarded;
(b)
In the bidder’s capacity category, the
bidder claimed 20 points on the basis that it had done similar work
for more than 10
years. The applicant, as opposed to the Marothodi
Metsi and Sebata Group, was only registered in 2016. It manifestly
could not
have been doing these types of projects for more than 10
years, whether on its own or in conjunction with another entity such
as
the Sebata Group. The applicant was only registered for VAT
purposes in January 2020. The financial statements referred to
earlier
demonstrate that it has never traded. No points should have
been allocated; and
(c)
The bidder’s locality category required
proof of an address and lease agreements in respect of premises to be
put up. The
bidder claimed that it had premises within 5 kilometres
of the Ladysmith CBD and awarded itself the maximum of 20 points. The
bid
documents did include three lease agreements and one rates
invoice. None of them, however, were in the name of the Marothodi
Metsi
and Sebata Group. One lease agreement was for property in
Boksburg, Gauteng province, and two were for a warehouse in Brits,
North
West province. In the review record there is, however, an
incomplete copy of a lease agreement in which the name of the
applicant,
not the Marothodi Metsi and Sebata Group, appears as the
lessee. The lessor is one Suleman Jessop. There is no evidence as to
when
this lease was concluded, as the signature page has not been
included in the review record, although the document does record that

notwithstanding the date of signature, the lease was for a period of
two years and commenced on 1 March 2019. But it is amply evident
that
the Marothodi Metsi and Sebata Group was not a party to it. The bid
evaluation committee, however, approved the allocation
of the maximum
points to the bidder. None should have been allocated.
[56]
The fourth category not analysed dealt with the
bidders’ approach paper. That seems to be a reference to the
plan identified
in the advertisement. The maximum score attainable in
this category was 30 and the bidder allocated that score to itself.
Assuming,
but not deciding, that it was justified in doing so, it
appears to me that the maximum score that the bidder could have
achieved
was 30 points. It could not therefore have advanced to the
next phase of evaluation.
[57]
In assessing the bid of the Marothodi Metsi and
Sebata Group, the first respondent’s bid evaluation committee
concluded that:
‘
Marothodi
Metsi and Sebata Group has for the past 20 years been extensively
involved in the financial viability of the municipalities.
They
specialise in the development implementation and management of
revenue enhancement and revenue protection strategies.’
This is incorrect on
multiple levels. Firstly, as pointed out, the applicant has not been
in business for 20 years, having only
been incorporated in 2016.
Secondly, the Sebata Group did not submit the compulsory bid
documentation and its experience thus counted
for nought. Thirdly,
the applicant could not have accumulated the experience that it
claimed to have because its annual financial
statements demonstrated
that it has never traded.
[58]
The bid should not have been allowed to progress
to the next stage of assessment, as it could not have met the minimum
score of
60 points.
Fifth ground of
review: terms of reference impermissibly departed from
[59]
This brings me to the fifth and final ground of
review. The first respondent states that the terms of reference of
the bid were
impermissibly departed from by the first respondent’s
officials. The vagueness of the advertisement of the tender and the

tender specification has already been alluded to. Accepting for a
moment that what was called for was the supply of smart water
meters
themselves, it bears repeating that nowhere in any of the tender
documents is it specified that the successful bidder would
be
entitled to install those meters or involve itself with the
collection of revenue generated by them and the like. There simply
is
no such provision in the tender. Yet in the first and second award
letters, there is a reference to the installation of the
smart meters
and in the second award letter, there is reference to a bad debt
recovery component, revenue enhancement and a ‘vendorring’

system. None of these additional aspects are mentioned in the
advertisement or in the bid specification. It seems to me that if

that is what the first respondent in truth required, it would have to
issue a second tender for those services. It did not, but
simply
granted the Marothodi Metsi and Sebata Group all those powers.
[60]
But perhaps the strongest point in favour of the
first respondent’s fifth ground of review is that the tender
was intended
to be at no expense to the first respondent. The
advertisement stated as much:
‘
Sourcing
of funding must be at no risk to the uThukela Municipality and must
in no way whatsoever affect our current financial situation.’
It was never in the
contemplation of the first respondent’s invitation to tender
that the project would cost it an amount
in excess of R700 million.
It already had financial difficulties. It had no approved budget for
the project. That this was undoubtedly
the case appears from the
minutes of the first respondent’s bid specification committee
meeting held on 12 December 2019.
That document records at paragraph
4 thereof that:
‘
There
is no budget provided to the bid specification committee by the end
user department. This contract is funded externally.’
Later, the minutes record
the following:
‘
The
uThukela District Municipality has huge financial challenges and is
seeking service providers that can self-fund the Project
and in no
ways must this project affect the municipality’s current
financial situation and income in anyway (sic) whatsoever.’
[61]
It is clear from this, as Mr de Wet argued, that
there was non-compliance with the peremptory provisions of
section
19(1)
and
19
(2) of the
Local Government: Municipal Finance Management
Act 56 of 2003
, which states:
‘
19(1)
A
municipality may spend money on a capital project only if—
(
a
)
the money for the project, excluding the cost of feasibility studies
conducted by or
on behalf of the municipality, has been appropriated
in the capital budget referred to in
section 17
(2);
(
b
)
the project, including the total cost, has been approved by the
council;
(
c
)
section 33
has been complied with, to the extent that that
section may be applicable to the project; and
(
d
)
the sources of funding have been considered, are available and have
not been committed
for other purposes.
(2)
Before approving a capital project in terms of subsection
(1) (
b
), the council of a municipality must consider—
(
a
)
the projected cost covering all financial years until the project is
operational; and
(
b
)
the future operational costs and revenue on the project, including
municipal tax and
tariff implications.
’
[62]
In summary, each ground of review raised by the
first respondent has merit and must be sustained. It appears to me
that the first
respondent’s conduct in awarding the tender to
the Marothodi Metsi and Sebata Group was neither
fair,
equitable, transparent, competitive nor cost-effective, all factors
mentioned in s 217(1) of the Constitution.
[63]
The first respondent, in bringing its review application, highlighted
its dissatisfaction with
the issues that I have just dealt with.
However, it went further and alleged that the applicant is guilty of
fraudulent conduct.
It appears that the allegation of fraud has at
least two levels. The first level is that the applicant knew that on
its own track
record it could not succeed with its bid. It then
submitted the bid in its name and the name of the Sebata Group and
rode on the
latter’s track record and expertise to secure the
tender. That conduct was dishonest and fraudulently misrepresented
the
facts. The second level is that the applicant has acted
fraudulently in stating that the first bid document is the one that
it
submitted to the first respondent when it well knew that what had
been submitted was the second bid document, and it has thereafter

advanced a false narrative based upon the first bid document. The
submission is that such conduct is equally dishonest and is designed

to deceive the court.
[64]
The
allegation of fraud is obviously one of the most serious kind.
Dishonesty and deception have no place in life or in litigation.
The
law, however, does not easily infer fraud,
[24]
but when it is found to exist, it:
‘
vitiates
every transaction known to the law’.
[25]
I,
however, caution myself with two realisations when considering this
allegation. The first is that fraud should not be considered
as a
‘flame-thrower, withering all within reach’.
[26]
As Cameron J observed further in
Absa
Bank Ltd v Moore and another:
[27]
‘
Fraud
unravels all directly within its compass, but only between victim and
perpetrator, at the instance of the victim. Whether
fraud unravels a
contract depends on its victim, not the fraudster or third parties.’
The
second is that motion proceedings are generally not designed to
permit a court to easily make findings of fraud.
[28]
As
Seegobin J said in
Commissioner
for the South African Revenue Services v Sassin and others
:
[29]
‘
Our
courts have consistently held that it would be unwise to decide a
disputed issue of whether fraud was committed on motion proceedings

without the benefits inherent in the hearing of oral evidence,
including discovery of documents, cross-examination of witnesses,
and
so forth.’
[65]
It seems to me that considering the date of
registration of the applicant and the fact that the financial
statements put up by it
establish unquestionably that it had never
traded, the applicant had very little prospect of succeeding on its
own in securing
the tender. The only way that could occur would be if
it included the Sebata Group as a bidding partner. Everything that it
said
about its association with the Sebata Group was a fiction,
designed to mislead the first respondent and to win the tender. It
also
seems likely to me that the applicant would know what bid
document it submitted to the first respondent, and it would have an
explanation
of why the second bid document exists and why that
document and not the first bid document formed part of the review
record. But
no explanation has been offered. The invitation to
conclude that the applicant constructed its case around the first bid
document
knowing that what had been submitted to the first respondent
was the second bid document is almost impossible to resist. That
conclusion
becomes irresistible when two further occurrences are
considered.
[66]
The first occurrence relates to the conclusion of
the contract. The closing date for the tender, as previously noted,
was 12h00
on 20 February 2020. There was no indication of when the
award would be published but it is not in dispute that the result of
the
tender was announced on 7 July 2020, when the first respondent
issued the first award letter. Mr Broster drew attention to the
contract. The signature page of that document states that the
contract was concluded on 30 June 2020. Remarkably, that was a week

before the award of the tender was announced. How could this be? I
invited Mr Dickson to address me in reply on this issue. He
stated
that the applicant had openly disclosed the date of conclusion of the
contract in its founding affidavit in the urgent application
and had
not tried to hide it. That may well be so, because the following is,
indeed, stated in the founding affidavit in that application:
‘
The
Contract was signed by the parties on 30 JUNE 2020. This agreement
was signed days
before the letters of
award had been delivered and are reference (sic) in the 7 July 2020
letter
of award (FA6).’
[67]
In my view, the disclosure had to be made. The
applicant’s urgent application invited attention to the
contract, which the
applicant contended had been incorrectly
suspended. Later, the applicant sought rectification of that very
contract. It therefore
had to put up the contract when it brought the
urgent application. The anomaly over the date of signature of the
contract would
have quickly become apparent. The disclosure in the
applicant’s founding affidavit in the urgent application did no
more
than state the unavoidable, obvious truth. What is
disconcerting, however, is that the disclosure of this rather
extraordinary
fact is not accompanied by any explanation as to how,
or why, this occurred. How is it possible that before the awarding of
the
tender had been decided upon, the applicant and the first
respondent had already concluded the contract that is a consequence
of
the awarding of the tender? Such conduct is not only irregular but
contrary to the provisions of clause 12 of the tender conditions

which states that:
‘
Bidders
shall not contact the uThukela District Municipality on any matter
relating to their bid from the time of the opening of
the bid to the
time the contract is awarded.’
For the contract to have
been concluded before the announcement of the awarding of the tender,
there must have been contact between
the applicant and the first
respondent.
[68]
This
conduct is unsettling and carries with it the malodorous whiff of
collusion and unfairness. The inference appears to me to
be
inescapable that there was some degree of collusion between the
applicant and the representative or representatives of the first

respondent then in office. I suggested to Mr Broster that the
conclusion of the contract before the result of the tender was
announced
raised the spectre of a ‘stitch up’.
[30]
He agreed. Mr Dickson did not agree and explained why he did not
share that view, but I confess that I did not truly understand
the
explanation advanced by him.
[69]
The suggestion of impropriety attaching to the
tender intensifies when the second occurrence is considered. Both the
first and second
award letters, as stated, required a signature of
acceptance from the Marothodi Metsi and Sebata Group. The first award
letter
was not signed and returned to the first respondent. Why this
should be the case is not disclosed. The second award letter was
signed. The second award letter recorded that the appointment would
be valid once it was signed by the two contracting parties.
It was
signed by the first respondent’s representative upon dispatch
of the letter to the Marothodi Metsi and Sebata Group
and it was
signed by a representative of the Marothodi Metsi and Sebata Group
upon receipt by it of the letter on 8 July 2020.
The appointment that
the letter dealt with was then final.
[70]
However, on 22 July 2020, after it had already
accepted and signed the second award letter, the applicant purported
to reply to
the first award letter, dated 7 July 2020. In the first
award letter (and, indeed, in the second award letter), the first
respondent
had set out certain conditions, five in the first award
letter and six in the second award letter. In its reply of 22 July
2020,
the applicant copied the five conditions in the first award
letter and pasted them onto its separate letter of acceptance. This

letter was typed on a Marothodi Metsi letterhead. There is, perhaps,
nothing sinister about that, although strictly speaking it
was
unnecessary for a separate letter to be drafted as the first award
letter could simply have been signed and returned. It was
also
unnecessary considering that the second award letter had already been
signed by the applicant’s representative. But
it appears that
there was a clamant need for the separate letter of acceptance. This
may be gleaned from the opening two paragraphs
of the reply:
‘
We
herewith acknowledge receipt of your Appointment Letter/Tender Award
Letter dating the 07
th
July
2020 and accept your decision.
We thank you for
accepting our bid and we commit to serving the institution of
uThukela District with highest level of professionalism
and we will
strive to run and conclude this project with highest level of
excellence.’
[71]
There is no reference whatsoever to the Sebata
Group in the applicant’s letter. The original offer was
directed to the Marothodi
Metsi and Sebata Group. It was not open for
the applicant to accept that offer in its own right. But that is what
it did, for below
the signature line on its letter of 22 July 2020
was the name of Marothodi Metsi only. It appears that this acceptance
was effective
and was accepted by the first respondent because the
applicant then commenced working on the tender.
[72]
All of this is disquieting. The entire tender
process is suffused with inexplicable conduct by the applicant and
the first respondent.
That conduct appears at worst to be potentially
dishonest but at the very least is unfair. I refrain from explicitly
making a finding
regarding the allegation of fraud although there are
strong indications that this is what was intended and what had
occurred. But
it appears certain that the tender was poorly devised,
carelessly administered and improperly awarded and offends virtually
every
conceivable principle of fairness and transparency that our law
demands and holds dear. It cannot be permitted to stand, unless
the
only point of substance raised by the applicant succeeds. That is the
principle of undue delay.
Undue delay
[73]
The applicant raises this point, stating,
correctly that the tender was awarded on 7 July 2020 and that the
review application was
launched on 20 July 2022, two years later. The
applicant contends that the review falls to be dismissed because of
this undue delay
and that it should not be condoned or overlooked.
[74]
In
Buffalo
City
v
Asla
Construction
,
[31]
the Constitutional Court distilled four essential principles when
assessing an alleged undue delay in a legality review:
(a)
The court has a broader discretion concerning
undue delay than in a review brought in terms of PAJA;
(b)
Whether the delay is reasonable is to be
considered in the light of the reasons advanced for the delay. This
is a fact-specific
enquiry linked to a value judgment as to whether
it can be inferred that the delay is ‘undue’.
(c)
It must be considered whether circumstances exist
that permit the delay to be overlooked. This will include the
assessment of whether
any party will be prejudiced, the merits of the
challenge to the impugned decision and the conduct of the party
seeking the review;
and
(d)
The
provisions of section 172(1)
(a)
[32]
of the Constitution may dictate that even if the delay has been
excessive, the impugned decision be set aside where its deficiencies

are clear and undisputed.
[33]
[75]
In
Asla
,
Theron J affirmed that the test to be applied is the test initially
postulated in
Gqwetha
v Transkei Development Corporations Ltd and others
,
[34]
and reaffirmed in
Khumalo
v Member of the Executive Council for Education,
KwaZulu Natal,
[35]
namely
that:
‘
Firstly,
it must be determined whether the delay is unreasonable or
undue. This is a factual enquiry upon which a value judgment
is
made, having regard to the circumstances of the matter. Secondly,
if the delay is unreasonable, the question becomes whether
the
Court’s discretion should nevertheless be exercised to overlook
the delay to entertain the application.’
[36]
Any
explanation offered for a delay must cover the whole period of the
delay.
[37]
[76]
In
Altech
Radio Holdings (Pty) Ltd and others v Tshwane City
,
[38]
Ponnan JA reaffirmed that:
‘
It
is a long-standing rule that a legality review must be initiated
without undue delay and that courts have the power (as part
of their
inherent jurisdiction to regulate their own proceedings) to either
overlook the delay or refuse a review application in
the face of an
undue delay.’
[77]
The requirement that
legality reviews must be brought without delay was further
explained
in
Merafong
City v AngloGold Ashanti Ltd
[39]
where Cameron J reiterated that:
‘
The
rule against delay in instituting review exists for good reason: to
curb the potential prejudice that would ensue if the lawfulness
of
the decision remains uncertain. Protracted delays could give rise to
calamitous effects. Not just for those who rely upon the
decision but
also for the efficient functioning of the decision-making body
itself.’
[78]
On how the reasonableness
of a delay is to be assessed, Plasket JA in
Valor
IT v Premier, North West Province and others
[40]
indicated that:
‘
Whether
a delay is unreasonable is a factual issue that involves the making
of a value judgment. Whether, in the event of the delay
being found
to be unreasonable, condonation should be granted involves a
“factual, multi-factor and context-sensitive”
enquiry in
which a range of factors – the length of the delay, the reasons
for it, the prejudice to the parties that it may
cause, the fullness
of the explanation, the prospects of success on the merits –
are all considered and weighed before a
discretion is exercised one
way or the other.
’
(Footnotes omitted.)
[79]
While
the court has a discretion to refuse a review because of an
unacceptable delay, if the decision about which complaint is made
is
patently unlawful, this may in turn dictate that the delay be
overlooked and that the review be granted.
The requirement to bring
review proceedings without undue delay is to ensure that there is
finality in those proceedings.
The
Constitutional Court has held that there is a strong public interest
in both certainty and finality.
[41]
[80]
Sutherland
DJP in
Transnet
SOC Ltd and another v CRRC E-Loco Supply (Pty) Ltd and others
[42]
summarised the principles applicable to the so-called ‘delay
defence’ in legality reviews, as distilled from
Asla
,
as follows:
‘
[17.1]
it is improper to deal with delay before giving attention to the
merits of the review,
[17.2]
where invalidity is indeed detected, it must be declared to be
so,
[17.3]
the merits are relevant to what to choose to do about an undue
delay when that is found to exist,
[17.4]
whether or not to overlook undue delay is a flexible
evaluation which is driven by several factors
[17.5]
undue delay is bound up in the just and equitable remedy which
may be that no consequent relief is granted; ie, the
review might
succeed but the contracts are not set aside.’ (Footnotes
omitted.)
[81]
With those principles in mind, I consider the
explanation for the delay. Mr Mnguni, in his founding affidavit in
the review application,
provides the following explanation:
‘
The
circumstances surrounding this tender were covered up by the former
municipal manager and officials loyal to his administration.
I have
not yet completed my investigation into which officials were involved
in the cover up of this bid and the contract concluded
to give effect
to it. I, as I have previously said, was appointed to the position of
municipal manager on 1 April 2022, more or
less three months ago.’
[82]
Mr Mnguni has made it plain in the affidavits that
he has delivered that he is a new appointee to the position of
municipal manager
of the first respondent. Upon his appointment, he
immediately commenced an investigation into the contracts and tenders
binding
upon the first respondent. That is commendable. He indicates
that before his investigation was even complete, the review
application
was launched. That is even more commendable. Mr Mnguni
states that the review application was purposefully brought in haste
to
permit it to be heard at the same time as the urgent application
and the rectification application.
[83]
It appears from his explanation that Mr
Mnguni suggests that there has not been an undue delay. Certainly, Mr
Mnguni has personally
acted with exemplary briskness in exposing what
occurred, considering that the date of his appointment was 1 April
2022, and he
had the review application before court on 20 July 2022.
But can his swiftness offset the lengthy period of inactivity on the
part
of the first respondent?
[84]
In my view it can. A matter cannot be said to have
been unduly delayed where those responsible for unlawful conduct have
actively
engaged in hiding their malfeasance. I have already found
that the conduct of the principal parties to the tender was suffused
with unacceptable conduct. Those involved in that type of conduct
would take no steps to disclose it but would rather suppress any
such
knowledge. When those who are expected to raise the alarm when
impropriety is found to exist are involved in the impropriety

themselves, right-thinking members of the community would not
attribute any resulting delay to the employer.
[85]
A
similar issue was raised before a full court of this division in
KZN
Oncology Inc v KZN Province MEC for Health and another
.
[43]
The matter involved a review, and the issue of undue delay was
raised. The court, of which I was a member and the scribe, stated
the
following:
‘
It
was explained in some detail by the first respondent that the person
who signed the contract with the appellant, being the head
of the
department, was the person who ought to have brought the review
proceedings. However, that person had been implicated in
the forensic
report with specific reference to wrongdoing in respect of the
contract in question in this application and disciplinary
steps were
recommended to be taken against him. Before this could occur, he
resigned. The next two most senior persons, who might
have taken the
contract on review, were also implicated with regard to the same
contract in the same forensic report. Given their
apparent
wrongdoing, there was no incentive for any of these three persons to
have taken any steps to review the contract. However,
once the
forensic report was received, the first respondent acted
expeditiously, and the review was brought collaterally as a
counter-application.’
[44]
[86]
The court in went on to consider the following
question:
‘
What
is an organ of state required to do if the very person who ought to
bring the review proceedings setting aside an unlawful
contract is in
fact the person who concluded the contract? The obvious answer is
that such official could not have been the only
person to have known
of the existence of the contract, and accordingly others with such
knowledge should take that step. But what
if the other people who
ought to have taken the matter on review were also implicated in the
awarding and conclusion of the unlawful
contract? In this case, none
of the persons involved in the awarding of the contract in question
had any incentive to review it
because their personal shortcomings
would have been revealed as a consequence.’
[45]
[87]
I conclude that there has not been an undue delay
given the facts of this matter.
But it is possible that I
am incorrect in this conclusion. I therefore consider the alternative
scenario, namely that the delay
has been unduly long. Are the
circumstances of this matter sufficient to permit the delay to be
overlooked? In considering other
decided matters where lengthy
periods of delay have occurred, I again caution myself that
determining such issue is largely based
upon the facts specific to a
matter.
[88]
In
Swifambo
Rail Leasing (Pty) Ltd v Prasa
,
[46]
the delay was three years, but it
was condoned in
circumstances where the full extent of the wrongdoing at Prasa was
concealed
from the board of directors.
[47]
Lewis JA observed as follows:
‘
The
Prasa board, once reconstituted, did not ascertain the irregularity
in the award of the bid to Swifambo for all the reasons
stated until
August 2015 and launched the application for review in November of
that year. It acted as expeditiously as possible.
On the assumption
that there was indeed delay at common law (for just under three
years), it applied for condonation. In my view,
there was no
unreasonable delay in all the circumstances. However, it is useful to
consider whether condonation should have been
granted by the High
Court, given the lengthy period between the award of the contract and
the institution of review proceedings.’
[48]
The
court later concluded that condonation had correctly been granted. It
did so citing
the
following dicta
[49]
in
Cape
Town City v Aurecon SA (Pty) Ltd
,
[50]
in
which the Constitutional Court stated that if the irregularities
discovered
had:
‘…
unearthed
manifestations of corruption, collusion or fraud in the tender
process, this court might look less askance in condoning
the delay.
The interests of clean governance would require judicial
intervention.’
[51]
[89]
In
Simeka
[52]
the court commented as follows:
‘
Whilst
one must accept that the Department could have acted with more
urgency than it did in unravelling the facts, given that it
sought to
review its own decision, sight should nevertheless not be lost of the
fact that the bureaucratic machinery is notorious
for moving slowly
even though the exigencies of a particular case might require that
matters be dealt with expeditiously. However,
it must be emphasised
that recognising this reality in no way seeks to excuse laxity. It is
more to say that, notwithstanding the
constitutional dictates of a
responsive and accountable public administration, the reality is that
public administration in our
country has over time been allowed to
slide to a quagmire of inefficiency. This is a state of affairs that
is antithetical to the
values underpinning our constitutional order
that the citizenry holds dear.’
[90]
The court further stated that:
‘
As
it turns out, the interests of justice and the unexplained egregious
material deviations from the tender requirements coupled
with the
onerous financial burden that the revision of the tender requirements
post its award to Simeka Group are all relevant
factors that, amongst
others, were not sufficiently accorded due weight by the high court
in determining whether the unreasonable
delay should be
overlooked.’
[53]
[91]
Considering the unsatisfactory conduct that has been uncovered by the
first respondent, e
ven if I should be incorrect in
coming to the conclusion that there has not been an undue delay in
bringing the review application,
it seems to me that the reasoning in
the extracts from
Simeka
referred to above are of equal application to the
facts of this matter. In my view, if there has been an undue delay,
it should
be overlooked.
Remedy
[92]
Section 172(1) of the Constitution reads as
follows:
‘
(1)
When deciding a constitutional matter within its power, a court -
(a)
must declare that any law or conduct that is
inconsistent with the Constitution is invalid to the extent of its
inconsistency; and
(b)
may make any order that is just and equitable,
including -
(i)
an order limiting the
retrospective effect of the declaration of invalidity; and
(ii)
an order suspending the declaration of invalidity for any period and
on any conditions,
to allow the competent authority to correct the
defect.’
[93]
Given the findings which I have come to regarding
the circumstances under which the tender was awarded, and the
contract concluded,
I am obliged to find in terms of s 172(1)
(a)
of the Constitution that the awarding of the
tender to the Marothodi Metsi and Sebata Group is invalid, as is the
conclusion of
the contract with that entity.
Such a finding was
foreshadowed in the applicant’s answering affidavit in the
review application. Mr Masomboka indicated in
that affidavit that if
such a finding is made, then the applicant sought an order in terms
of s 172(1)
(b)
limiting the retrospective effect of invalidity
and suspending the declaration of invalidity until the end of the
contractual period.
However, by the time that the applications were
argued, the contractual period had expired through the effluxion of
time and the
latter relief fell away.
[94]
In advancing its claim for the remaining relief
claimed in terms of s 172(1)
(b)
,
the applicant seeks such an order to keep alive any claim that it may
have for damages or lost expenses arising out of the implementation

of the contract. This relief was justified, so the applicant
submitted, by the fact that the first respondent solicited the
services
of the applicant and awarded it the contract, then
unlawfully suspended the contract and then opportunistically sought
to set aside
the contract
‘…
when
it no longer suited the Municipality to abide by the contract.’
[95]
Section
172(1)
(b)
of the
Constitution endows this court with a discretion.
[54]
In
Bengwenyama
Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and
others
,
[55]
Froneman J held that this discretionary power follows upon an order
of invalidity in terms of PAJA or the principle of legality.
It is
normally triggered under circumstances where parties have altered
their position on the basis that the administrative action
was valid
and would be prejudiced if the administrative action is subsequently
set aside. But in exercising this discretion, the
court must be
convinced to either exercise its discretion to grant a remedy or to
refuse it. The discretion is a true discretion.
[56]
[96]
The
court appears to have a wide remedial power to ensure that an
injustice does not occur because of a tender being set aside.
In
Gijima
,
[57]
the court noted that a court hearing a constitutional matter:
‘…
is empowered to make “any
order that is just and equitable”.  So wide is that power
that it is bounded only by
considerations of justice and equity.’
[97]
In considering this
issue, a court is required, to the extent possible, to classify the
conduct of the tenderer as being involved
in, or free from,
wrongdoing in the circumstances of the tender. As was stated in
Central
Energy Fund SOC Ltd and another v Venus Rays Trade (Pty) Ltd and
others
:
[58]
‘
The
law draws a distinction between parties who are complicit in
maladministration, impropriety, or corruption on the one hand,
and
those who are not, on the other. The category into which a party
falls has a significant impact on the appropriate just and
equitable
remedy that a court may grant. Parties who are complicit in
maladministration, impropriety or corruption are not only
precluded
from profiting from an unlawful tender, but they may also be required
to suffer losses. On the other hand, although innocent
parties are
not entitled to benefit from an unlawful contract, they are not
required to suffer any loss as a result of the invalidation
of a
contract.’
(Footnotes
omitted.)
[98]
In its heads of argument, the applicant draws
attention to certain decided cases which deal with:
‘…
a
consideration of the losses suffered by an innocent tenderer …’.
The applicant is not an
innocent tenderer. I must find that the applicant falls into the
first category identified in
Venus Rays Trade
mentioned above.
The grounds advanced by the applicant entitling it to an order in
terms of s 172(1)
(b)
demonstrate a clear lack of insight
into its own conduct. It fails to appreciate that the first
respondent did not award the contract
to the applicant: it was
awarded to the Marothodi Metsi and Sebata Group. Further, the first
respondent did not simply decide that
it no longer wished to abide by
the contract because it did not suit it to do so: it was compelled to
act in the face of questionable
conduct in the awarding of the
contract.
[99]
The first respondent does not seek any order
relating to the applicant disgorging any benefits that it thus far
may have received.
Mr Broster submitted merely that there was nothing
further owing to the applicant as it had been paid for those services
that it
had already rendered. His argument was simply that the
applicant is not entitled to any further benefits. In my view,
because of
the conduct of the applicant as already described, it is
inappropriate to allow the applicant the relief that it seeks in
terms
of s 172(1)
(b)
.
I accordingly decline to grant any such order.
The urgent application
and application for rectification of the contract
[100]
As the contract is to be set aside, the urgent
application must fail, as must the rectification application.
Costs
[101]
The first respondent
has
succeeded in its review application and there is no reason why costs
should not follow the result. The first respondent wisely
employed
two counsel and the costs ordered must cover the costs of those two
counsel. The same order as to costs must issue with
regard to the
failed urgent application and the failed rectification application.
Order
[102]
I accordingly grant the following order:
1.
The money judgment
:
(a)
The first respondent’s application for a money judgment against
the applicant,
dated 14 December 2023, is adjourned sine die;
(b)
All questions of costs are reserved.
2.
The urgent application
:
(a)
The applicant’s urgent application, dated 27 June 2022, is
dismissed;
(b)
The applicant shall pay the respondents’ costs, such to include
the costs
of two counsel where so employed.
3.
The rectification application
:
(a)
The applicant’s rectification application, dated 22 February
2023, is dismissed;
(b)
The applicant shall pay the respondents’ costs, such to include
the costs of two counsel
where so employed.
4.
The review application
:
(a)
The decision of the first respondent to award tender number
01/2020-PRS to the
Marothodi Metsi and Sebata Group is reviewed,
declared invalid and is set aside;
(b)
The contract concluded between the first respondent and the Marothodi
Metsi
and Sebata Group, dated 30 July 2020, pursuant to the award of
tender number 01/2020-PRS to the Marothodi Metsi and Sebata Group,
is
reviewed, declared invalid and is set aside.
(c)
The applicant shall pay the respondents’ costs, such to include
the costs of two counsel where so employed.
________________________
MOSSOP
J
APPEARANCES
Counsel for the
applicant

:           Mr A J
Dickson SC
Instructed
by:

:           Anwar
Suleman Jessop
First Floor
372 Kandahar Avenue
Ladysmith
Care of:
Cajee Setsubi Chetty
Incorporated
195
Boshoff Street
Pietermaritzburg
Counsel for the first
respondent
:
Mr L B
Broster SC with Ms Z Qono
Instructed
by  :
Garlicke and Bousfield Incorporated
7 Torsvale Crescent
La Lucia Ridge Office
Estate
Durban
Care of:
Stowell and Company
295 Pietermaritz Street
Wembley
Pietermaritzburg
Counsel for the second to
fifth

:           Mr A de
Wet SC
respondents
Instructed by
:           Xaba
Attorneys
223
Boom Street
Central
Office Park
Pietermaritzburg
Date of Hearing

:           26
January 2024
Date of Judgment

:           20
February 2024
[1]
The
other successful tenderer was an entity called Uyapo Engineering
Projects.
[2]
The relief claimed in the notice of motion was the following:
‘
2.1
The Respondent’s suspension of the Contract concluded with the
Applicant under Reference
01/2020-PRS which suspension is dated 14
June 2022, is declared to have lapsed and of no force and effect.
2.2
The Respondent is interdicted and restrained from unlawfully
interfering with the Applicant’s
provision of services to the
Respondent in terms of Contract 01/2020-PRS.
2.3
The Order sought in paragraph 2.2 above shall not limit either
party’s (sic) from
enforcing their rights arising from the
terms and conditions of Contract.
2.4
The Respondent is directed to forthwith issue a press release and
publish same in the
local newspaper, advising that the Applicant is
entitled to execute the services relating to the installation of
water metres
in terms of Contract 01/2020-PRS and may continue to do
so from the date of this Order.
2.5
The Respondent is directed to pay the costs of the application.’
[3]
Oscar Greeley Clendenning Hammerstein II
(12
July 1895 - 23 August 1960) was an American lyricist, librettist and
theatrical producer best known for his collaborations
with composer
Richard Rodgers.
[4]
Section
2
(a)
of
the
Local Government: Municipal Systems Act 32 of 2000
.
[5]
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Limited
[2017]
ZACC 40; 2018 (2) SA 23 (CC); 2018 (2) BCLR 240 (CC).
[6]
Altech
Radio Holdings (Pty) Ltd and others v Tshwane City
[2020]
ZASCA 122
;
2021
(3) SA 25
(SCA)
para 71.
[7]
Fedsure
Life Assurance Ltd and others v Greater Johannesburg Transitional
Metropolitan Council and others
[1998]
ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
(CC) para 56.
[8]
Transnet
SOC Ltd and another v CRRC E-Loco Supply (Pty) Ltd and others
[2022]
ZAGPJHC 228 para 14.
[9]
See
Pharmaceutical
Manufacturers Association of SA and another: In Re Ex Parte
President of the Republic of South Africa
and
others
[2000]
ZACC 1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241
(CC) para 17;
Affordable
Medicines Trust and others v Minister of Health and others
[2005]
ZACC 3
;
2006 (3) SA 247
(CC);
2005
(6) BCLR 529
(CC)
para
49.
[10]
Affordable
Medicines Trust and others v Minister of Health and others
[2005]
ZACC 3; 2006 (3) SA 247 (CC); 2005 (6) BCLR 529 (CC) para 49.
[11]
Section 2 of the Constitution; see also
Minister
of International Relations and Co-operation and others v Simeka
Group (Pty) Ltd and others
[2023]
ZASCA 98
;
[2023] 3 All SA 323
(SCA) para 31 (‘
Simeka
’
).
[12]
Steenkamp
NO v Provincial Tender Board, Eastern Cape
[2006]
ZACC16;
2007 (3) SA 121
(CC);
2007 (3) BCLR 300
(CC).
[13]
Ibid para 33.
[14]
Allpay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer, South African Social Security Agency,
and others
[2013]
ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) (‘
Allpay
’
).
[15]
Ibid
para 40.
[16]
This
amount was later reduced to 9%.
[17]
Simeka
para
45.
[18]
Allpay
58.
[19]
Ibid para 27.
[20]
Its
registration number is 2016/085759/07 and it was incorporated on 2
March 2016.
[21]
Dr JS
Moroka Municipality and others v Betram (Pty) Ltd and another
[2013] ZASCA 186
;
[2014]
1 All SA 545
(SCA) para 10.
[22]
Municipal Supply Chain Management Regulations, GN
868,
GG
27636,
30 May 2005, made by the Minister of Finance in terms of
s 168
of
the
Local Government: Municipal Finance Management Act 56 of 2003
.
[23]
For
example, in the directors’ report for February 2017, the
following appears:
‘
The
financial statements set out on page 4 -13 which had been prepared
on a going concern basis were approved by the board of
directors on
the ……………………..
and signed on its behalf by’.
The identical wording,
and omission, appears in the two other annual financial statements.
[24]
Gilbey
Distillers & Vintners (Pty) Ltd and others v Morris NO and
another
1990
(2) SA 217
(SE) at 226A.
[25]
Esorfranki
Pipelines (Pty) Ltd and another v Mopani District Municipality and
others
[2014]
ZASCA 21
;
[2014] 2 All SA 493
(SCA) para 25. In
Lazarus
Estates Ltd v Beasley
[1956]
1 QB 702
(CA) at 712, Lord Denning uttered these well-known and oft
repeated words:
'No
court in this land will allow a person to keep an advantage which he
has obtained by fraud. No judgment of a court, no order
of a
Minister, can be allowed to stand if it has been obtained by fraud.
Fraud unravels everything. The court is careful not
to find fraud
unless it is distinctly pleaded and proved; but once it is proved it
vitiates judgments, contracts and all transactions
whatsoever . .
.'.
[26]
Absa
Bank Ltd v Moore and another
[2016]
ZACC 34
;
2017 (1) SA 255
(CC) para 39.
[27]
Ibid.
[28]
Korff
v Scheepers en Andere
1962
(3) SA 83 (W) at 85.
[29]
Commissioner
for the South African Revenue Service v Sassin and others
[2015]
ZAKZDHC 82; [2015] 4 All SA 756 (KZD) para 47.
[30]
Collins
Online Dictionary:
https://www.collinsdictionary.com/dictionary/english/stitch-up
.
When used as a phrasal verb, ‘[t]o stitch
up an
agreement
,
especially a
complicated
agreement
between several people, means to
arrange
it’.
[31]
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Ltd
[2019]
ZACC 15
;
2019 (4) SA 331
(CC);
2019 (6) BCLR 661
(CC) (‘
Asla
’
).
[32]
Section
172(1)
(a)
provides
as follows:
‘
When
deciding a constitutional matter within its power, a court -
(a)
must declare that any law or conduct that is inconsistent with the
Constitution is invalid to the extent of its inconsistency’.
[33]
Asla
paras
48-72.
[34]
Gqwetha
v Transkei Development Corporation Ltd and others
2006
(2) SA 603 (SCA); [2006] 3 All SA 245 (SCA).
[35]
Khumalo
and another v MEC for Education, KwaZulu-Natal
[2013]
ZACC 49
;
2014 (5) SA 579
(CC);
2014 (3) BCLR 333
(CC) (‘
Khumalo
’
).
[36]
Asla
para
48.
[37]
Asla
para
52.
[38]
Altech
Radio Holdings (Pty) Ltd and others v Tshwane City
[2020]
ZASCA 122
;
2021 (3) SA 25
(SCA) para 18.
[39]
Merafong
City v AngloGold Ashanti Ltd
[2016]
ZACC 35
;
2017
(2) SA 211
(CC);
2017
(2) BCLR 182
(CC)
para 73.
[40]
Valor
IT v Premier, North West Province and others
[2020] ZASCA
62
;
[2020]
3 All SA 397
(SCA)
para 30.
[41]
Khumalo
para
47.
[42]
Transnet
SOC Ltd and another v CRRC E-Loco Supply (Pty) Ltd and others
[2022] ZAGPJHC 228 para
17.
[43]
KZN
Oncology Inc v KZN Province MEC for Health and another
[2021]
ZAKZPHC 72.
[44]
Ibid
para 24.
[45]
Ibid
para 25.
[46]
Swifambo
Rail Leasing (Pty) Ltd v Prasa
[2018]
ZASCA 167
;
2020 (1) SA 76
(SCA).
[47]
Ibid
paras 34 and 36.
[48]
Ibid
para 39.
[49]
Ibid
para 41.
[50]
Cape
Town City v Aurecon SA (Pty) Ltd
[2017]
ZACC 5
;
2017
(4) SA 223
(CC).
[51]
Ibid
para 50.
[52]
Simeka
para 85.
[53]
Ibid para 108.
[54]
Special
Investigating Unit v Phomella Property Investments (Pty) Ltd and
another
[2023]
ZASCA 45
;
2023 (5) SA 601
(SCA) para 10.
[55]
Bengwenyama
Minerals (Pty) Ltd and others v Genorah Resources (Pty) Ltd and
others
[2010]
ZACC 26
;
2011 (4) SA 113
(CC) para 84.
[56]
Central
Energy Fund SOC Ltd and another v Venus Rays Trade (Pty) Ltd and
others
[2022]
ZASCA 54
;
2022 (5) SA 56
(SCA);
[2022] 2 All SA 626
(SCA) para 43.
[57]
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Limited
[2017]
ZACC 40
;
2018 (2) SA 23
(CC);
2018 (2) BCLR 240
(CC) para 53.
[58]
Central
Energy Fund SOC Ltd and another v Venus Rays Trade (Pty) Ltd and
others
[2022]
ZASCA 54
;
2022 (5) SA 56
(SCA)
;
[2022] 2 All SA 626
(SCA) para 42.