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[2023] ZAKZPHC 113
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SMEC South Africa (Pty) Ltd v MEC for Economic Development, Tourism and Environmental Affairs, KwaZulu-Natal Province and Another (7572/2022P) [2023] ZAKZPHC 113 (29 September 2023)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 7572/2022P
In
the matter between:
SMEC
SOUTH AFRICA (PTY) LTD
Applicant
and
THE
MEC FOR ECONOMIC DEVELOPMENT,
First Respondent
TOURISM
AND ENVIRONMENTAL AFFAIRS,
KWAZULU-NATAL
PROVINCE
THE
DEPARTMENT OF ECONOMIC DEVELOPMENT,
Second Respondent
TOURISM
AND ENVIRONMENTAL AFFAIRS,
KWAZULU-NATAL
In
re:
SMEC
SOUTH AFRICA (PTY) LTD
Applicant
and
THE
PREMIER OF KWAZULU-NATAL PROVINCE
First
Respondent
THE
MEC FOR ECONOMIC DEVELOPMENT,
Second Respondent
TOURISM
AND ENVIRONMENTAL AFFAIRS,
KWAZULU-NATAL
PROVINCE
THE
DEPARTMENT OF ECONOMIC DEVELOPMENT,
Third Respondent
TOURISM
AND ENVIRONMENTAL AFFAIRS,
KWAZULU-NATAL
THE
CHAIRPERSON OF THE KWAZULU-NATAL
Fourth Respondent
PROVINCIAL
BID APPEALS TRIBUNAL
THE
MEC FOR FINANCE, KWAZULU-NATAL
Fifth Respondent
PROVINCE
HATCH
AFRICA (PTY) LTD
Sixth Respondent
JUDGMENT
Nicholson
AJ:
Introduction
[1]
SMEC South Africa (Pty) Ltd, the applicant herein ('SMEC'), makes
application in terms
of rule 30A of the Uniform Rules of Court, for
an order compelling the first and second respondent to comply with
the notice of
motion delivered in terms of rule 53(1), in a pending
application to review and set aside decisions of the second
respondent, which
will become apparent herein below.
[2]
It is instructive that this is an interlocutory application where
SMEC is both the
applicant in this application and the main
application. The MEC for Economic Development, Tourism and
Environmental Affairs, KwaZulu-Natal
Province ('the MEC') is the
second respondent in the main application and the first respondent in
this application. The Department
of Economic Development, Tourism and
Environmental Affairs, KwaZulu-Natal Province ('the Department') is
the second respondent
in this application and the third respondent in
the main application. Where I refer to the MEC and the Department
jointly as the
respondents, I refer to the respondents in the
interlocutory application.
[3]
In the main application, the applicant seeks to review and set aside
the decision
of the Department where a tender, with tender number
Z[...], that was awarded to Hatch Africa (Pty) Ltd ('Hatch'), the
sixth respondent
in the main application.
[4]
Leading up to the tender, eight bids were received, of that eight,
five were disqualified
and therefore not scored, and three bids were
eventually evaluated; namely, those of SMEC, Hatch and Gibb (Pty) Ltd
('Gibb'). Of
the three bids evaluated; SMEC scored the highest
points, which means they were the most responsive in terms of price
and BBBEE
status.
[5]
It is common cause that the Department has delivered a record in
terms of rule 53(4)
of the Uniform Rules; however, SMEC contends that
the full record was not provided and has compiled a list of
sixty-seven documents
which they deemed to be outstanding.
[1]
[6]
I pause to mention that item 6 of the said list is a request for the
bids of the other
six unsuccessful bidders and for the bid of Hatch,
the successful bidder. In that regard, applicant contends that they
only received
part of the bid documents of Hatch and Gibb, while the
Department contends that they have provided the entire bid document
for
Hatch. Further, the Department contends that the bid documents in
relation to the other unsuccessful bidders are privileged and
therefore the applicant is not entitled to the bid documents, and the
Gibb bid documents were given to them in error.
The
issues
[7]
In the premises, there are two issues for determination: (1) whether
SMEC is entitled
to the requested documents, and (2) the issue of
non-joinder.
[8]
It is convenient to mention here that rule 53 of the Uniform Rules
does not specify
what the record is meant to contain and reads as
follows:
'(1)
Save where any law otherwise provides, all proceedings to bring under
review the decision or proceedings of any inferior court
and of any
tribunal, board or officer performing judicial, quasi-judicial or
administrative functions shall be by way of notice
of motion directed
and delivered by the party seeking to review such decision or
proceedings to the magistrate, presiding officer
or chairperson of
the court, tribunal or board or to the officer, as the case may be,
and to all other parties affected –
(a)
.
. .
(b)
calling upon the magistrate, presiding officer, chairperson or
officer, as the case may be, to despatch, within
15 days after
receipt of the notice of motion, to the registrar the record of such
proceedings sought to be corrected or set aside,
together with such
reasons as the magistrate, presiding officer, chairperson or officer,
as the case may be is by law required
or desires to give or make, and
to notify the applicant that such magistrate, presiding officer,
chairperson or officer, as the
case may be has done so.
.
. .
(4)
The applicant may within ten days after the Registrar has made the
record available to him or her, by delivery of notice and
accompanying affidavit, amend, add to or vary the terms of his or her
notice of motion and supplement the supporting affidavit.'
[9]
In the circumstances the question is what is the record? Or what does
the record contain?
Is applicant entitled to the full record or only
portions of the record that are relevant to SMEC? In motivation for
requesting
the full record, SMEC relies on
Helen
Suzman Foundation v Judicial Service Commission
[2]
where the Constitutional Court sets out the position as follows:
[3]
'[13]
The purpose of rule 53 is to "facilitate and regulate
applications for review". The requirement in rule 53(1)(b)
that
the decision-maker file the record of decision is primarily intended
to operate in favour of an applicant in review proceedings.
It helps
ensure that review proceedings are not launched in the dark. The
record enables the applicant and the court fully and
properly to
assess the lawfulness of the decision making process. It allows an
applicant to interrogate the decision and, if necessary,
to amend its
notice of motion and supplement its grounds for review.
[14]
Our courts have recognised that rule 53 plays a vital role in
enabling a court to perform its
constitutionally entrenched review
function:
"Without
the record a court cannot perform its constitutionally entrenched
review function, with the result that a litigant's
right in terms of
section 34 of the Constitution to have a justiciable dispute decided
in a fair public hearing before a court
with all the issues being
ventilated, would be infringed."
[15]
The filing of the full record furthers an applicant's right of access
to court by ensuring both
that the court has the relevant information
before it and that there is equality of arms between the person
challenging a decision
and the decision-maker. Equality of arms
requires that parties to the review proceedings must each have a
reasonable opportunity
of presenting their case under conditions that
do not place them at a substantial disadvantage vis-a-vis their
opponents. This
requires that "all the parties have identical
copies of the relevant documents on which to draft their affidavits
and that
they and the court have identical papers before them when
the matter comes to court".
[16]
In
Turnbull-Jackson
this Court held:
"Undeniably,
a rule 53 record is an invaluable tool in the review process. It may
help: shed light on what happened and why;
give the lie to unfounded
ex post facto (after the fact) justification of the decision under
review; in the substantiation of as
yet not fully substantiated
grounds of review; in giving support to the decision maker's stance;
and in the performance of the
reviewing court's function."
[17]
What forms part of the rule 53 record? The current position in our
law is that - with the exception
of privileged information - the
record contains all information relevant to the impugned decision or
proceedings. Information is
relevant if it throws light on the
decision making process and the factors that were likely at play
in the mind of the decision-maker.
Zeffertt and Paizes make a comment
on the exclusion of evidence on the grounds of privilege. That
comment must surely be of relevance
even to the exclusion of
privileged information from a rule 53 record. After all, the content
of a rule 53 record is but evidentiary
in nature. The authors say
that in the case of privileged information, the exclusion is based on
the recognition that the general
policy that justice is best served
when all relevant evidence is ventilated may, in some cases, be
outweighed by a particular policy
that requires the suppression of
that evidence. The fact that documents contain information of a
confidential nature "does
not per se in our law confer on them
any privilege against disclosure".' (footnotes omitted)
[10]
In
General
Council of the Bar of South Africa v Jiba
,
[4]
the court held:
'Therefore
compliance with Rule 53 regarding time frames and providing complete
record, is not just a procedural process, but is
substantive
requirement which serves to ensure that the substance of the decision
is properly put to the fore at an early stage.
Any attempt to
frustrate this, should be met with displeasure by our courts.'
[11]
The Western Cape in
Helen
Suzman Foundation v Judicial Service Commission
[5]
pointed out that:
'It
is settled law that the Rule is primarily intended to operate in
favour of and to the benefit of an applicant in review proceedings
and to avoid review proceedings being launched in the dark. The Rule
essentially confers the benefit that "all the parties
have
identical copies of the relevant documents on which to draft their
affidavits and that they and the Court have identical papers
before
them when the matter comes to Court" ... Moreover, an applicant
should not be deprived of the benefit of this procedural
right unless
there is clear justification therefor.' (references omitted)
[12]
The Department on the other hand while agreeing with the
Constitutional Court in Helen Suzman
Foundation asserts that as a
matter of logic, a party can never be required to provide the record
of a decision, which has not
been taken on review, or cannot be taken
on review by the applicant, and cites
Ekuphumeni
Resort v Gambling
and
Betting Board, Eastern
Cape
[6]
and
Muller
v The Master
[7]
in support of that argument.
[13]
The Department therefor argues that SMEC is not entitled to seek the
record of a decision in
respect of which he has no
locus standi
to litigate on, and which has no adverse effect on the applicant's
right.
[14]
The Department asserts that it has provided all the documents
relevant to the decision to exclude
SMEC from the bid process in the
record filed by the respondents, constitute over 2 926 pages, which
is filed before the Provincial
Bid Appeals Tribunal.
[8]
[15]
The Department further avers that SMEC is
mala fide
in its
request for the bid documents because its true motive is to obtain
access to its competitors' bids which include proprietary
and
confidential information. The bidders, their employees and their
consultants have an interest in maintaining their confidentiality.
The Department avers that the bids of the unsuccessful bidders do not
have any relevance to the decision to exclude SMEC from the
bid
process, nor the decision to award the bid to Hatch.
[16]
The Department further takes a special plea of material non-joinder;
by asserting that while
eight bid submissions were received which
included SMEC and Hatch, only Hatch is a party to the main
application and none of the
other bidders, including Hatch, is a
party to this interlocutory application.
[17]
In citing
Amalgamated
Engineering Union v Minister of Labour
,
[9]
the Department avers that SMEC's failure to join the unsuccessful
bidders constitutes a material non joinder of parties who
have a
material and substantial interest in this application. Any person
should be joined if such person has a direct and substantial
interest
in any order the court might make, or if such an order cannot be
sustained or carried out, without prejudicing that party,
unless the
court is satisfied that he or she has waived his or her right to be
joined.
[18]
Without citing any authority, the Department avers that this rule 30A
application is out of time
because the application was not brought
within the ten-day period contemplated in rule 53(4) after the
Department replied to SMEC
advising SMEC that in their view, they
have filed all the relevant documents to the review and raised the
issue of confidentiality.
[19]
In that regard the record was filed and served on 11 July 2022, SMEC
delivered a notice in terms
of rule 30A on 25 July 2022 and on 1
August 2022, the Department's attorney of record wrote a letter to
SMEC's attorney of record
advising them that in their view, all the
documents relevant to the review had been filed and raised the issue
of confidentiality.
So argues the Department the ten day period
provided in rule 30A(1) would have lapsed on 8 August 2022 and the
second ten day period
would have lapsed on 23 August 2022; however,
this interlocutory application was only brought on 1 September 2022;
accordingly,
out of time.
The
Decision
[20]
Mr Wagener SC directed me to pages 301 to 302 of the record which
demonstrate the recommendation
by the Bid Evaluation Committee
('BEC') and the approval by the Bid Adjudication Committee ('BAC'),
dated 11 January 2022 and 11
February 2020, respectively. Those pages
demonstrate that the shortlist came down to three bidders; namely,
Hatch, SMEC and Gibb,
whose bids were R47,647,149.98, R47,255,059.10
and R90,897,809.27, respectively. In the circumstances, Gibb was
excluded because
their price was almost double of that of SMEC and
Hatch. Accordingly, the two bidders remaining in the race were Hatch
and SMEC,
with SMEC being the lowest bidder.
[21]
Notwithstanding SMEC being the lowest price, the tender was awarded
to Hatch because SMEC's price
submission excluded negotiation as a
part of their price. In that regard, the BAC and BEC held that the
omission marked a material
portion of the bid and presented a high
risk to the project, due to unknown future costs. I understand this
to mean that the manner
SMEC had costed negotiations left uncertainty
into whether the price would increase in the future when invoicing
for negotiations
and that uncertainty presented a risk. While the
pricing of Hatch included negotiations, which meant, while the bid
price was higher,
it was more certain, and therefore less risky.
[22]
The issue at the heart of the review, therefore, is the pricing for
negotiations; because SMEC
seeks to assess if, when comparing the
pricing for negotiation of Hatch on the one side and SMEC on the
other side, it would be
reasonably inferred that the manner SMEC
priced their negotiations costs, may reasonably increase the bid
price, while Hatch's
price would not. In the premises, only the
documents relating to that narrow issue appear to be relevant.
[23]
On this point,
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd
[10]
is instructive, where the Court held:
'[33]
The separation of the merits from the question of standing has two
implications for the own-interest litigant. First, it signals
that
the nature of the interest that confers standing on the own-interest
litigant is insulated from the merits of the challenge
he or she
seeks to bring. An own-interest litigant does not acquire standing
from the invalidity of the challenged decision or
law, but from the
effect it will have on his or her interests or potential interests.
He or she has standing to bring the challenge
even if the decision or
law is in fact valid. But the interests that confer standing to bring
the challenge, and the impact the
decision or law has on them, must
be demonstrated.
[34]
Second, it means that an own-interest litigant may be denied standing
even though the result
could be that an unlawful decision stands.
This is not illogical. As the Supreme Court of Appeal pointed out,
standing determines
solely whether this particular litigant is
entitled to mount the challenge: a successful challenge to a public
decision can be
brought only if "the right remedy is sought by
the right person in the right proceedings". To this observation
one must
add that the interests of justice under the Constitution may
require courts to be hesitant to dispose of cases on standing alone
where broader concerns of accountability and responsiveness may
require investigation and determination of the merits. By corollary,
there may be cases where the interests of justice or the public
interest might compel a court to scrutinise action even if the
applicant's standing is questionable. When the public interest cries
out for relief, an applicant should not fail merely for acting
in his
or her own interest.
[35]
Hence, where a litigant acts solely in his or her own interest, there
is no broad or unqualified
capacity to litigate against illegalities.
Something more must be shown.' (footnotes omitted)
[24]
In the premises, since it is asserted by the Department and not
disputed by SMEC that SMEC is
an own-interest litigant. Accordingly,
SMEC's locus standi is much limited in these proceedings
vis a vis
a public-interest litigant.
[25]
Giant Concerts
further states:
'[41]
These cases make it plain that constitutional own-interest standing
is broader than the traditional common law standing, but
that a
litigant must nevertheless show that his or her rights or interests
are directly affected by the challenged law or conduct.
The
authorities show:
(a)
To establish own-interest standing under the Constitution a litigant
need
not show the same "sufficient, personal and direct
interest" that the common law requires, but must still show that
a
contested law or decision directly affects his or her rights or
interests, or potential rights or interests.
(b)
This requirement must be generously and broadly interpreted to accord
with constitutional goals.
(c)
The interest must, however, be real and not hypothetical or academic.
(d)
Even under the requirements for common law standing, the interest
need
not be capable of monetary valuation, but in a challenge to
legislation purely financial self-interest may not be enough - the
interests of justice must also favour affording standing.
(e)
Standing is not a technical or strictly-defined concept. And there is
no magical formula for conferring it. It is a tool a court employs to
determine whether a litigant is entitled to claim its time,
and to
put the opposing litigant to trouble.
(f)
Each case depends on its own facts. There can be no general rule
covering all cases. In each case, an applicant must show that he or
she has the necessary interest in an infringement or a threatened
infringement. And here a measure of pragmatism is needed.'
[26]
In
Administrative
Law in South Africa
,
[11]
the learned authors stated:
'This
approach was affirmed in Giant Concerts, where Cameron J noted once
again that the own interest litigant need not be the person
whose
constitutional right has been infringed or threatened. Ultimately, "a
litigant need not show the same 'sufficient, personal
and direct
interest' that common law requires, but must still show that a
contested law or decision directly effects his or rights
or
interests, or potential rights or interests.' (my emphasis)
[27]
In
Tupac
Business Enterprises CC v KwaZulu-Natal Gaming and Betting Board
,
[12]
the Court held:
'[18]
... It seems to me that what was said in Giant Concerts (quoted
above) is a complete answer to the applicant's question of
standing.
It is inconceivable that the applicant can be allowed to put in a
completely non-responsive tender, accept that such
tender has been
rightly rejected and then thereafter be heard to complain about the
process and a right to have the process set
aside so as to enable a
fair tender process to thereafter unfold to give it a second bite at
the cherry. The special condition
made it abundantly clear that all
those "blocks" had to be "ticked" before the
tender could be considered.
A tenderer not meeting those requirements
has no interest in the outcome of the tender because it would never
be entitled to be
awarded the tender in the first place.'
[28]
In the matter at hand, the responsiveness or non-responsiveness (I
use the term responsiveness
broadly) is still at issue. However,
Tupac appears to suggest that the reason for the rejection of the
tender and whether or not
it was rational is the only interest in the
bid process. Accordingly, an unsuccessful litigant cannot be granted
a broad sweep
of the tender process to determine irregularities that
would not have turned on its non-responsiveness.
[29]
Having considered the authorities before me and the facts, it is
apparent that SMEC, in its capacity
as an own-interest litigant, is
only entitled to the documents relevant to the narrow issue of the
review. While SMEC relies heavily
on the Constitutional Court's
decision in
Helen
Suzman Foundation, Helen Suzman Foundation
referred to a public-interest litigant and not to an own-interest
litigant as is the case of SMEC. Being an own-interest litigant,
SMEC
would have been entitled to the documents had the interest of justice
demanded such. This, following Giant Concepts will be
possible if
'there is at least a strong indication of fraud or other gross
irregularity in the conduct of the [Department]'.
[13]
There has been no suggestion in these papers of fraud or other gross
irregularity.
[30]
I now return to the issue of the material non-joinder.
[31]
SMEC in its papers has not seriously opposed the material non-joinder
and in oral argument stated
in the alternative that should I view the
material non-joinder as having merit, SMEC can live without the
documents of the unsuccessful
bidder.
[32]
It is axiomatic that the unsuccessful bidders do have a material
interest in this matter because
of the potential proprietary and
confidential information that the bids contain. Mr Dickson SC stated
that pricing is but one side
of it but due to the nature of what the
bid entails, i.e. planning, negotiations and developing, SMEC will
receive an unfair advantage
in the event they are successful in the
main application. Accordingly, I am of the view that other bidders
should have been joined
in the matter to provide their view to share
their bids.
[33]
Having regard to the aforementioned, I am of the view that the
material non joinder should
be upheld and therefore, SMEC cannot
be provided with the bids of both Hatch and the other unsuccessful
bidders.
[34]
With regard to the remaining items on annexure "A" to the
notice of motion, I shall
make an order for the Department to deliver
the items that are relevant, and only to the extent that they are
available.
[35]
With regard to costs, I am of the view that the costs in this matter
should be the costs in the
cause because both parties enjoyed limited
success.
Order
[36]
In the result, I make the following order;
1.
The first and second respondent are directed to deliver the
items
listed in annexure "AA" stated hereafter, within ten days
of this order being granted, provided that they are available:
item
3, item 7, item 8, item 9, item 10, item 11 , item 12, item 13, item
14, item 15, item 20, item 21, item 22, item 23, item
25, item 26,
item 27, item 28, item 29, item 30, item 31, item 32, item 33, item
34, item 35, item 37.
2.
In the event that any of the items directed to be made are
unavailable, the respondents must provide a list to applicant of the
items, which are listed in order 1, that are unavailable.
3.
The costs of this application shall be the costs in the cause
of the
main application.
NICHOLSON
AJ
Date
heard:
4
August 2023
Judgment
handed down:
29 September 2023
Appearances
For
applicant:
SD
Wagener SC
Instructed
by:
Weavind
and Weavind Attorneys
Block
E, Glenfield Office Park
361
Oberon Street
Faerie
Glen Pretoria
Ref:
Mr J. van Heerden/S14482
c/o
Stowell & Company
295
Pietermaritz Street
Pietermaritzburg
Ref:
N Moodley
For
first and second respondents:
Dickson
SC
Instructed
by:
PKX
Attorneys
Suite
35, 3 on Cascades Crescent
Montrose
Pietermaritzburg
[1]
The record volume 1 at 65 to 79.
[2]
Helen
Suzman Foundation v Judicial Service Commission
[2018] ZACC 8
;
2018 (4) SA 1
(CC);
2018 (7) BCLR 763
(CC). See the
applicant's heads of argument.
[3]
Applicant's heads of argument: paragraph 6
[4]
General
Council of the Bar of South Africa v Jiba and others
[2016] ZAGPPHC 833;
2017 (2) SA 122
(GP);
[2016] 4 All SA 443
(GP)
para 112.
[5]
Helen
Suzman Foundation v Judicial Service Commission
[2014] ZAWCHC 136
;
2015 (2) SA 498
(WCC);
[2014] 4 All SA 395
(WCC)
para 14.
[6]
Ekuphumleni
Resort (Pty) Ltd and another v Gambling and Betting Board, Eastern
Cape and others
2010 (1) SA 228
(E) para 9.
[7]
Muller
and another v The Master and others
1991 (2) SA 217
(N) at 220C-E.
[8]
Respondents' heads of argument: paragraph 4.5
[9]
Amalgamated
Engineering Union v Minister of Labour
1949 (3) SA 637
(A) at 659.
[10]
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd and others
[2012] ZACC 28; 2013 (3) BCLR 251 (CC).
[11]
C Hoexter and G Penfold, Administrative Law in South Africa 3 ed
(2021) at 670.
[12]
Tupac
Business Enterprises CC v KwaZulu-Natal Gaming and Betting Board
[2018] ZAKZPHC 63.
[13]
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd and others
[2012] ZACC 28
;
2013 (3) BCLR 251
(CC) para 58.