Independents v Enoch Mgijima Municipality and Others (622/2023) [2023] ZAECMKHC 47 (11 April 2023)

82 Reportability
Public Procurement

Brief Summary

Tender — Review of tender award — Applicant, a political party, sought urgent interdict against Enoch Mgijima Municipality and Lulumzi Developments (Pty) Ltd regarding a tender for upgrading Fletcher Street, alleging irregularities in the award process and lack of value for money — Municipality contended that the tender process complied with legal requirements and that any delay would jeopardize funding from National Treasury — Court held that the applicant established a prima facie case for review, warranting the interdict pending the outcome of the review application.

Comprehensive Summary

Summary of Judgment


1. Introduction


The matter concerned an urgent, ex parte application for interim interdictory relief pending the institution and determination of a review (Part B) of a municipal tender award and the consequent contract. The proceedings in issue in the judgment were directed at Part A, namely whether a rule nisi (with interim interdict) granted on 14 March 2023 should be confirmed or discharged when the respondents anticipated the return day.


The applicant, The Independents, was a political party registered with the Independent Electoral Commission and based in Komani. The first respondent was the Enoch Mgijima Municipality, the second respondent its Municipal Manager, and the third respondent Lulumzi Developments (Pty) Ltd, the successful bidder appointed to perform the works.


Procedurally, the applicant obtained interim relief restraining the respondents from giving effect to the award of a tender and contract for Contract No SM45/08/2022, described as the Upgrading of Fletcher Street, Komani, Ward 10, pending Part B. The first and second respondents, supported by the third respondent, anticipated the return day and sought the discharge of the rule nisi. The judgment therefore addressed whether the interim interdict should remain in force.


The dispute’s general subject matter was the legality and propriety of a municipal procurement decision and contract for roadworks, with the applicant’s complaints focused primarily on the price of the contract (approximately R9.28 million) and the contention that it did not represent value for money.


2. Material Facts


The applicant’s deponent, Mr Clark, stated that he learned in late January 2023 that a tender had been awarded and a contract concluded with the third respondent to upgrade Fletcher Street in Komani for a sum in excess of R9 million. He regarded this amount as raising concern, and described Fletcher Street’s length and condition, expressing the view that portions of the road were of low priority and required only minor repairs and resurfacing.


It was common cause that the applicant was not a tenderer, did not represent any unsuccessful tenderers, and advanced its case as a resident-based concern regarding municipal expenditure. The applicant relied on a cost estimate attributed to Mr van der Westhuyzen (an engineer with experience in civil engineering) suggesting the works would cost approximately R2.5 million, and on that basis contended that the municipal contract price was inflated and not cost-effective. The applicant also asserted that the municipality was in a precarious financial position and that service delivery had collapsed.


On the respondents’ version, which the court treated as material to the interim interdict enquiry, the municipality had adopted an infrastructure plan (approved by council and incorporated into the budget), and had entered into a funding arrangement with the National Treasury. A condition of the grant funding was that the funds were locked into the approved project and would have to be returned if the project did not proceed. The municipality explained that it had procured engineering expertise for geotechnical surveys, design, and the preparation of a bill of quantities, and that updated estimates (including an engineer’s estimate in the region of R9.8 million) informed the procurement.


The tender process (SCM45/08/2022) attracted ten bidders and proceeded through mandatory compliance, functionality, and then price and B-BBEE evaluation. Only four bidders progressed beyond Phase 1, and only the third respondent achieved the minimum functionality score to proceed to Phase 3. The Bid Evaluation Committee and Bid Adjudication Committee recommended the third respondent, which was appointed on 2 December 2022 at a total bid price of R9 283 536.78 (VAT inclusive), accepted on 5 December 2022, with the site handed over on 13 January 2023.


The third respondent asserted that it had performed approximately 20% of the works by the time the interim interdict was granted, and detailed the prejudice caused by the stoppage, including staffing, insurance, guarantees, and plant standing time costs. The municipality and its consulting engineer similarly described financial and operational prejudice, including the risk of forfeiting grant funding and incurring standing time and interest costs not covered by the grant.


A factual development arose when the municipality initially provided an incorrect draft bill of quantities to its attorneys; an explanatory affidavit was filed, the correct bill of quantities was admitted (being consistent with that filed by the third respondent), and the matter was postponed to enable the applicant to consider it with experts. The court treated the error as explained and not materially prejudicial to the applicant.


3. Legal Issues


The central legal questions were whether, on the return day, the applicant had met the requirements for the continuation of an interim interdict restraining an organ of state from implementing a procurement decision and contract, and whether the rule nisi should therefore be confirmed or discharged.


The dispute primarily concerned the application of legal standards to the facts, including whether the applicant had established a prima facie right (even if open to some doubt) to obtain the final relief in Part B (a review setting aside the tender award and contract), whether there was a well-grounded apprehension of irreparable harm, whether the balance of convenience favoured the interdict, and whether there was an absence of alternative remedies.


In addition, the matter implicated a value judgment regarding separation of powers harm in temporarily restraining the exercise of statutory and constitutionally sourced municipal functions, particularly in circumstances where no mala fides was alleged and where the relief would effectively halt implementation of an infrastructure project funded under a National Treasury grant regime.


4. Court’s Reasoning


The court approached the matter on the footing that, although litigants need not necessarily identify the precise statutory basis for their cause of action, it must be clear from the pleaded facts that the relied-upon provision is relevant and operative, as indicated in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others. Against that backdrop, the court emphasised that it was common cause that the applicant was not a dissatisfied tenderer and did not purport to act for unsuccessful bidders.


Central to the court’s evaluation was that the applicant’s challenge, for purposes of interim relief, was directed substantially at the price and the applicant’s perception of value for money, rather than a substantiated attack on the tender process itself. The court reasoned that a tender award and contract price are the product of a procurement process, and that focusing on price in isolation—without a properly pleaded and evidenced challenge to the procedural steps such as advertisement, briefing, evaluation, and adjudication—was not an acceptable basis to impugn the legality of the award on an interim basis. The judgment characterised aspects of the applicant’s approach as speculative, including statements suggesting that manipulation of tender processes was common and could be investigated later, which the court regarded as indicative of a “fishing expedition” rather than fact-based allegations of irregularity.


In assessing whether a prima facie right had been established for interim interdict purposes, the court applied the test articulated in Putco (Pty) Ltd v MEC for Road & Transport, Gauteng & Others, namely considering the applicant’s averments together with those respondent facts that are not and cannot be disputed, and then determining whether serious doubt is thrown on the applicant’s case when the respondents’ contradictory facts are considered. Applying this approach, the court found that the respondents’ evidence—particularly the structured tender evaluation and the engineering basis for the bill of quantities and estimates—created serious doubt about the applicant’s central proposition that the contract price was inflated due to irregularity.


The court also considered that the interim order had been obtained ex parte and had the effect of restraining the exercise of statutory power by an organ of state. Relying on National Treasury and Others v Opposition to Urban Tolling Alliance and Others (OUTA), the court stressed that the balance of convenience enquiry must include careful consideration of separation of powers harm, and that temporary restraint against the exercise of statutory power ahead of final adjudication should be granted only in the clearest of cases. The court held that, in the absence of allegations of mala fides and in light of the municipality’s statutory role in implementing infrastructure projects approved through its council processes, the threshold for continuing the interdict was not met on the facts presented.


On the balance of convenience, the court weighed the respondents’ evidence of concrete prejudice, including the risk that National Treasury funding could be forfeited if not spent within required timeframes (supported by correspondence indicating Treasury’s concerns), and the financial consequences of delay such as standing time and interest costs. The court contrasted this with the applicant’s asserted prejudice—principally that funds might be wasted—which the court found was not supported by reliable facts establishing irregularity. The court considered the respondents’ fears regarding forfeiture of funds as factually grounded, noting examples where funding had previously been taken back, and held that the applicant had not put up facts of comparable weight in support of its alleged apprehensions.


The court rejected the contention that the respondents had failed to litigate honourably in the sense contemplated in Mlatsheni v Road Accident Fund, finding that the respondents’ affidavits and correspondence were respectful and factually directed, and that the incorrect bill of quantities had been adequately explained, with any potential prejudice ameliorated by the opportunity afforded to the applicant to respond to the corrected documents.


The court also addressed reliance on City of Tshwane Metropolitan Municipality v Afriforum and Another, treating it as reinforcing the caution required when courts are asked to issue orders that derail policy-laden and polycentric decisions of other branches or spheres of government. The judgment ultimately concluded that the applicant had not demonstrated a right adversely affected by the tender award, that the asserted urgency was self-created, and that the interdict—having drastic consequences—had been obtained on an ill-founded and speculative basis. In these circumstances, the court held that separation of powers considerations and the absence of substantiated irregularity warranted discharge of the rule.


5. Outcome and Relief


The court discharged the rule nisi issued on 14 March 2023, with the result that Part A of the application (the interim interdict) was dismissed and the respondents were no longer interdicted from implementing the tender award and contract.


The applicant was ordered to pay the costs of the first, second, and third respondents in respect of Part A, excluding the costs occasioned by the postponement on 4 April 2023. The first respondent was ordered to pay the costs of the postponement on 4 April 2023, because the postponement was necessitated by the municipality’s error in attaching an incorrect document.


Cases Cited


AllPay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer, South African Social Security Agency and Others 2014 (1) SA 604 (CC).


Mlatsheni v Road Accident Fund (418/2005) [2007] ZAECHC; also reported as 2009 (2) SA 401 (E).


City of Tshwane Metropolitan Municipality v Afriforum and Another 2016 (6) SA 279 (CC).


Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others [2004] ZACC 15; 2004 (4) SA 490 (CC).


Putco (Pty) Ltd v MEC for Road & Transport, Gauteng & Others Case Nos. 2021/49674 & 2021/51091 (7 December 2021).


National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (6) SA 223 (CC).


Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A).


Legislation Cited


Constitution of the Republic of South Africa, 1996, section 217.


Constitution of the Republic of South Africa, 1996, section 153.


Local Government: Municipal Structures Act 7 of 1998, section 12.


Promotion of Administrative Justice Act 3 of 2000.


Rules of Court Cited


No specific rule of court was cited in the judgment.


Held


The court held that the applicant failed to establish a prima facie right to interim relief, failed to substantiate any tender irregularity with reliable facts, and advanced a case largely based on suspicion and disagreement with the contract price rather than a demonstrable flaw in the procurement process. The court further held that the continuation of an interdict restraining a municipality from exercising statutory functions required careful attention to separation of powers harm, and that the circumstances did not justify such restraint, particularly given the tangible prejudice to the municipality and contractor and the risk to National Treasury funding. The rule nisi was accordingly discharged and Part A dismissed, with costs orders as set out.


LEGAL PRINCIPLES


An applicant seeking an interim interdict must establish, on the papers, a prima facie right (even if open to some doubt) assessed with regard to the applicant’s allegations together with respondents’ facts that are not and cannot be disputed, and the applicant cannot succeed where the respondents’ version throws serious doubt on the applicant’s case, as applied with reference to Putco (Pty) Ltd v MEC for Road & Transport, Gauteng & Others.


Where interim relief would restrain an organ of state from exercising statutory or constitutionally sourced powers, courts must approach the balance of convenience with heightened caution, including explicit consideration of separation of powers harm, and a temporary restraint ahead of final adjudication should be granted only in the clearest of cases, as articulated in National Treasury and Others v Opposition to Urban Tolling Alliance and Others.


Allegations of tender irregularity relied upon for interim relief must be founded on facts, not on suspicions, conjecture, or a generalised intention to investigate irregularities later; a challenge directed at price alone, divorced from a substantiated procedural or legality attack on the procurement process, does not without more establish grounds to justify judicial interference at the interim stage.


Courts should be slow to make orders that have the effect of derailing policy-laden and polycentric decisions of other spheres or branches of government, and must remain vigilant against constitutionally impermissible encroachment into their operational domains, consistent with the approach discussed in City of Tshwane Metropolitan Municipality v Afriforum and Another.

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[2023] ZAECMKHC 47
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Independents v Enoch Mgijima Municipality and Others (622/2023) [2023] ZAECMKHC 47 (11 April 2023)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT OF
SOUTH AFRICA
[EASTERN CAPE
DIVISION, MAKHANDA]
CASE NO.: 622/2023
In the matter between: -
THE
INDEPENDENTS

APPLICANT
and
ENOCH MGIJIMA
MUNICIPALITY

1
ST
RESPONDENT
THE MUNICIPAL MANAGER
OF THE
ENOCH MGIJIMA LOCAL
MUNICIPALITY

2
ND
RESPONDENT
LULUMZI DEVELOPMENTS
(PTY) LTD

3
RD
RESPONDENT
(Registration NO.
K[...])
JUDGMENT
NORMAN J:
[1]
The applicant is a political party registered with the Independent
Electoral Commission.
It has its registered address in Komani.  The
first respondent is Enoch Mgijima Municipality, a Municipality
established in
terms of
section 12
of the
Local Government: Municipal
Structures Act 7 of 1998
. The applicant also cited the Municipal
Manager of the first Respondent as the second respondent. The third
respondent is the successful
bidder, Lulumzi Developments (Pty) Ltd.
[2]
The applicant moved this Court on an urgent and
ex parte
basis
on 14 March 2023. It sought and was granted, interim relief,
interdicting and restraining the respondents, with immediate
effect,
from giving effect to and pursuant to the award of tender in respect
of contract number SM45/08/2022-Upgrading of Fletcher
Street, Komani,
Ward 10, contract, which was concluded with the third respondent,
pending the determination of Part B of this application.
It also
sought a costs order against the respondents. In Part B of the Notice
of Motion, the applicant seeks to review the tender
award and the
contract entered into between the first respondent and the third
respondent. The first and second respondents anticipated
the return
day and sought the discharge of the rule.
Applicant’s case
[3]
The deponent to the founding affidavit is Mr Kenneth Lisle Clark, a
businessman and
a director of companies. He is also a resident in
Komani. He stated that he heard late in January that a tender had
been awarded
and that a contract had been concluded between the
Municipality and the third respondent for the upgrading of Fletcher
Street,
Komani. He was further informed that the contract sum was in
excess of R9 Million.
That amount, according to
him “triggered alarm bells”.
He
described the length of Fletcher Street and its condition and
concluded that the section of Fletcher Street from Livingstone
Road
to Berry Street is approximately 138m long and 8m wide.
[4]
He stated that this part of the road is low priority for repair. He
also concluded
that this section of the road requires nothing more
than minor repairs and chip and spray resurfacing. He stated that the
section
of Fletcher Street from Berry Street to Frost Street is used
more frequently and is badly potholed and breaking up. It is 230m
long and 8m wide. The final section of Fletcher Street from Frost
Street to
Haig
Avenue and the entrance
to Queens College is in a reasonable condition and will not require
anything more than minor repairs and
chip and spray resurfacing.
[5]
He stated that the section of Fletcher Street between Berry and Frost
Streets is in
a very poor condition and has been in that state for
more than ten (10) years. He concluded that there can be no
suggestion that
roadworks to Fletcher Street are an urgent priority.
He stated that he endeavored to obtain further details about the
contract.
He obtained a copy of the agenda for the site handing over
meeting which occurred on 13 January 2023. The duration of the
contract
was for five (5) months and the amount tendered by the third
respondent was R9 283 536.78.
[6]
On 20 January 2023 he wrote to the Acting Municipal Manager, Mr
Donovan van Wyk requesting
further information relating to the
contract. He complained that the contract did not seem to represent
value for money. He received
no response from Mr van Wyk. On 8
February 2023 he wrote again to Mr Mkangelwa. Mr Mkangelwa responded
on the same day. He relied
on a reasonable estimate made of the work
from Mr van der Westhuyzen who estimated the costs to be R2.5 Million
for repairing Fletcher
Street. Mr van der Westhuyzen has a National
Higher Diploma in Civil Engineering which he obtained in 1984. He had
over twenty-five
(25) years of experience in civil engineering work,
he has experience as a Manager of civil and general hardrock quarry.
[7]
Based on the findings of Mr van der Westhuyzen, the applicant
concluded that, the
Municipality would not derive value for money in
the contract. It alleged that it had no alternative remedy. It stated
that it
had a right to bring the application as the applicant is a
resident of Komani. It argued that the balance of convenience favours

the granting of the interdictory relief because the contract may well
be finished by the time the review application is finalized.
It
also contended that the 3
rd
respondent may undertake work
in respect of a contract which is set aside and may suffer prejudice
in being in a position where
it will not be paid for the work
rendered.
[8]
The applicant submitted that Fletcher Street has been in a terrible
state for ten
(10) years and there can be no prejudice to the
Municipality if the project is interdicted pending the outcome of the
review. At
paragraph 61 the applicant stated ‘
the fact that
an independent evaluation of what is required to repair Fletcher
Street has shown the price to vary so greatly from
the contract price
gives rise in my submission to at least prima facie question as to
the soundness and lawfulness of the contract
awarded to the 3
rd
respondent.’
It submitted that the Municipality is in a
precarious financial position and is insolvent and it alleged that as
a result service
delivery has collapsed.
[9]
The applicant contended that the 3
rd
respondent had
started trimming trees in Fletcher Street and no earthworks had
commenced. He stated that commencement of earthworks
would prejudice
the applicant and the citizens of Komani including the 3
rd
respondent. He submitted that ‘
in my respectful submission
the applicant has demonstrated that there is at least on the face of
it an irregularity in the award
of the tender and the conclusion of
the contract for the repair of Fletcher Street to the 3
rd
defendant.’
[10]
The applicant compared the tender prices and the contract price to
the price provided by Mr van
der Westhuyzen. It is on that basis that
it concludes that the prices are awfully uncompetitive and they do
not represent value
for money. That in turn, the deponent stated,
gives rise to a
prima facie
right to obtain a review of the
contract award. When addressing irreparable harm, it stated that the
fact that R7 Million may be
irretrievably lost to the citizens of the
Municipality, R7 Million could go a long way to addressing other
service delivery issues
and it could be used to repair two (2) more
streets in Komani.
The first and second
respondents’ case
[11]
The Acting Municipal Manager Mr Aphiwe Mkangelwa deposed to the
answering affidavit.  He
stated that the adoption of the
Infrastructural Plan by the 1
st
respondent occurred during
2021. That plan was made part of the budget of the 1
st
respondent which the Council of the 1
st
respondent
adopted. In this regard the extract of the 1
st
respondent’s minutes was annexed to the answering affidavit.
The essence of the extract was that the budget for 2022/23 financial

year as revised was approved by the Council. The 1
st
respondent entered into an agreement for funding of the
Infra-structural Plan with the National Treasury.  One of the
conditions
attached to the grant from National Treasury was that once
the funds are disbursed to a Municipality they are locked into that
project. If the project is not proceeded with, the funds are to be
returned to National Treasury.
[12]
During 2020 the National Treasury approved funding and that meant
that the 1
st
respondent had to start with those processes.
The 1
st
respondent procured an engineering expert to
undertake geotechnical surveys, quantify the costs of the project,
formulate the bill
of quantities and to supervise construction of the
project in line with the norms and standards applicable to the
construction
industry.
[13]
In this regard it appointed Emzantsi Engineers (Pty) Ltd, the
estimate price for the project
came to R6.8 Million. A procurement
process was initiated and a contract
PMB
Projects JV Saracel was appointed at a contract price of
R6 691 1158.65, VAT inclusive.
The contractor
canceled the contract on the basis that they would not be able to do
the project profitably since the 2020 price
estimates had changed
drastically after the Covid 19 pandemic.
[14]
Emzantsi Engineers was approached to conduct further geo-technical
studies and furnish updated
price estimates. The 1
st
respondent had to embark on a new procurement process.
The tender process
[15]   The
notice number SCM45/08/2022 with the project name upgrading of
Fletcher Street was issued. There were 10 tenderers
who reacted to
the tender notice. The evaluation comprised of three (3) phases.
Phase 1 dealt with mandatory requirements such
as whether, for
example, a valid tax clearance certificate had been submitted. Once a
bidder complied with the mandatory requirements,
it proceeded to
Phase 2 which was for functional evaluation. This process entailed
bidders achieving a minimum of forty (40) points
for functional
requirements. It is only those bidders who obtained 40 points who
then proceeded to Phase 3 which was for evaluation
on price and
B-BBEE.
[16]
Only four (4) bidders out of ten (10) were eligible to advance to
Phase 2. Only 1 bidder achieved
the required forty (40) points for
functional requirements. That bidder was the 3
rd
respondent, it qualified to be evaluated on price and B-BBEE. The Bid
Evaluation Committee recommended the 3
rd
respondent as the
best bidder to undertake the works. The Bid Adjudication Committee
also recommended the 3
rd
respondent for appointment.
[17]
The former Acting Municipal Manager, Mr Donovan van Wyk, accepted the
recommendation of the BAC
and proceeded to appoint the 3
rd
respondent. The letter of appointment of the 3
rd
respondent shows that he was appointed on 2 December 2022 and he
accepted the appointment on 5 December 2022. He was appointed
at a
total bid price of R9 283 536.78 inclusive of VAT.
[18]
It disputed the allegations that the price was not competitive
because those allegations were
based on a face value estimates of the
work and not on scientific geo-technical surveys and bill of
quantities. It contends that
the contract had been put in place at
great expense to the 1
st
respondent. It confirmed that the
3
rd
respondent had been appointed formally and the site
had been handed over. It contends that any delays to this project
would cause
the 1
st
respondent to lose the funds advanced
to it by the National Treasury. In support of this risk the 1
st
respondent put up a letter from National Treasury which expressed
concern about the low expenditure in respect of the Municipal

Infrastructural Grant and the fact that if not spent by the end of
the financial year it may be forfeited.
[19]
The 1
st
respondent has already made a commitment to
compete all the projects in the 2020/23 financial year. It contends
that if the contractor
has equipment on site, the 1
st
respondent will have to pay for it for each day it is on site. The
interdict will render the contract more expensive and waste
of money
will be incurred. If the project is interdicted more service delivery
protests will be experienced by the 1
st
respondent. It
contends that the only victory for the applicant is simply political.
The price fluctuations and price estimates
shall have increased to 12
Million by the time the contract is awarded again next year.
[20]
They stated that as a result of failure to achieve the financial
recovery targets, the Municipal
infrastructure grant for delivery of
basic services of R40 Million was taken back by the National
Treasury. The grant for the Premier
was almost taken back in December
2021 for failure to achieve 40% target in terms of the grant
conditions. These respondents listed
what the shortcomings of the
Administrator, Mr Somana did to worsen the financial position of the
1
st
respondent. For example, by 31 October 2021, the Eskom
debt of R120 Million had increased to R700 Million.
[21]
The respondents denied any red-flags as suggested by the applicant.
They submitted that Mr van
der Westhuyzen did not have any experience
in the preparation of geo-technical surveys and studies. He denied
that Mr van der Westhuyzen’s
quotation is a reasonable yard
stick to measure scope because even the tenderers who were not
successful did not quote R2.5 Million.
They stated that there were no
grounds for review, let alone for an interdict. They contend that the
applicant had failed to demonstrate
exceptional circumstances for
stopping the Organ of State from exercising its statutory powers. The
respondents urged the Court
not to allow the second-guessing of the
findings of the experts based on a face value quotation.
[22]
They alleged that the urgency was self-created because the applicant
was aware of the contract
as early as January 2023. There is no
explanation why the application was not brought during February 2023.
They contend that the
applicant has failed to demonstrate a
prima
facie
right or establish that a balance of convenience favours it
as opposed to the respondents. These respondents contended that there

are no prospects of success on review.
[23]
The 1
st
respondent also relied on the confirmatory
affidavit of Mr Sandile Kunene, a professional Civil Engineer who
confirmed that Emzantsi
Engineers was engaged by the 1
st
respondent in the process of site assessment, geo-technical studies,
land surveys, compilation of design reports, project drawings
and
Bill of quantities. Mr Kunene confirmed that the price estimates
provided are evidence based and are an outcome of a rigorous

verification process which was overseen by him. Emzantsi assisted in
the tender preparation specifications. He confirmed that the

estimated tender price was R9.8 million. He further confirmed that
the site was given to the contractor on 13 January 2023. He
further
confirmed that if there were delays, any standing time would be paid
for by the 1
st
respondent. This would result in punitive
interest which must be paid by the Municipality. That interest cannot
be charged from
the project funding because the funding is
re-imbursed only for the payment of costs incidental thereto.
Third respondent’s
case
[24]
The 3
rd
respondent also filed an answering affidavit which
was deposed to by one Ongama Mponco. The 3
rd
respondent
became aware of the order against it after it had been granted. It
was granted leave to anticipate the
rule nisi
on 72 hours’
notice. The application and an order was served on the 3
rd
respondent on site on 15 March 2023. He stated that the tender notice
required a CIDB grading of 4CE or higher. The grading of
4 CE refers
to a contractor capable of performing a contract with a maximum value
of R6.5 Million. The 3
rd
respondent had a grading of 5CE
which is a grading that the 3
rd
respondent is capable of
performing a contract with a value of R10 Million.
[25]
He attached the
completed bill of quantities
which reflected the bid price to be R9 283 536.78.
The 3
rd
respondent’s bid was R583 593.38 less
than the engineers estimate for the tender. He confirmed the
acceptance of the
bid and its award to it. He contended that the 3
rd
respondent was correctly awarded the tender in terms of section 217
of the Constitution and had accepted that appointment on 5
December
2022. He confirmed that approximately 20% of the tender had been
performed by the 3
rd
respondent at the time of the
interdict.
[26]
He listed factors which are causing prejudice to it as a result of
the interim interdict, namely,
personnel that had been hired and the
costs thereof amounting to R70 000 per month; the 3
rd
respondent had paid for insurance for the tender from AC&E which
is from 14 December 2022 until 15 May 2023; it had obtained
and paid
for the issuing of a guarantee by Maadima for the tender at a cost of
R47 311.10. The guarantee is only valid for
six (6) months from
date of issue. It had sourced a plant and equipment from Mlayiza
Trading Construction and a standing fee of
R11 000 per day is
payable to Mlayiza. He denied that the tender was for repairs. He
avers the tender was for upgrading Fletcher
Street and the bill of
quantities detailed the works to be done. The 3
rd
respondent’s tender was substantially less than that of the
engineer’s estimates.
[27]
He referred to the bill of quantities which showed, amongst others,
that the entire road surface
of Fletcher Street was to be excavated
and re-constructed which included drains and culverts. The current
paving of stone had to
be replaced with concrete
kerbing.
He contends that the upgrade of Fletcher Street has been in
the pipeline for an extended period and should be completed. He
prayed
for the rule to be discharged.
Applicant’s
reply
[28]
In reply, the applicant attempted to analyze the costs on the bill of
quantities and suggested
that the calculations would be R3 Million
less. At the hearing the 1
st
respondent filed an
explanatory affidavit deposed to by Mr Zolile Vumazonke, who is
employed by the 1
st
respondent as a Legal and Compliance
Manager. He stated that upon his reading of the replying affidavit,
he noticed that he had
erroneously sent to the attorneys of the 1
st
respondent an incorrect first draft of the bill of quantities which
had been formulated by the consulting engineers. He explained
the
error as genuine and had resulted from the fact that at the time of
sending the information he was working on other matters
that were
also urgent.
[29]
He attached the correct bill of quantities from the contract and
apologised to the Court for
the mistake. He confirmed the bill of
quantities forming part of the tender document are consistent with
those filed by the 3
rd
respondent. The court allowed the
filing of the correct bill of quantities and afforded the applicant
time to consider the bill
of quantities with its experts, as
requested. The matter was accordingly postponed to Thursday, 6 April
2023 at 11h15 for hearing.
The applicant filed a further replying
affidavit dealing with the explanatory affidavit of Mr Vumazonke. It
contends that the contract
price was inflated and so was the scope of
the work. It relies on what was conveyed to it by Mr van der
Westhuyzen that the unit
rates were excessive and that the bill of
quantities are wholly inaccurate and do not represent reasonable
prices.  It prayed
for the court to confirm the rule because
should the applicant succeed on review the citizens of the
municipality and taxpayers
would have funded a project that does not
represent value for money. What became apparent was that the
criticism of the bill of
quantities was that Mr van der Westhuyzen
through Mr Clark was of the view that certain items should cost a
certain amount of money
instead of what was on the bill of
quantities.
Applicant’s
legal submissions
[30]
Mr Brown submitted that the applicant has shown the irregularities
that would warrant the setting
aside of the tender award
.
He submitted that when there is an allegation of irregularity the
Court will determine whether such irregularity occurred and
to
determine whether it constitutes a ground of review. In this regard
he relied
on
All
Pay Consolidated Investments Holdings (Pty) Ltd v Chief Executive
Officer, South African Security Agency and Others
[1]
.
He submitted that where the applicant has established a
prima
facie
case, and the right is founded on the Constitution, he argued, the
applicant would have established its right to the requisite
standard.
He submitted that in this case the Municipality has not fulfilled its
obligations
to
litigate honourably and relied for this submission on
Mlatsheni
v Road Accident Fund
[2]
.
He
submitted that this court should confirm the Rule.  He argued
that if the Rule Nisi is not confirmed, the inflated contract
sum
would have been dissipated and the review would have no practical
effect because the effects and consequences cannot be undone.
In this
regard he relied on
Tshwane
City  v Afriforum
[3]
,
where the Constitutional Court dealt with irreparable harm.
First and Second
respondents
[31]
Mr Maswazi submitted that the urgency of the matter was self –
created. In this regard
he referred to the letter from the applicant
dated 9 February 2023 but it only approached Court on
27
February 2023. He submitted that the applicant’s reliance on
PAJA was misplaced because applicant is neither a tenderer
nor a
competitor and therefore had failed to satisfy certain requirements,
namely, that the decision adversely affected its rights,
that the
decision has had a direct and external effect on it and that the
decision does not fall under any of the exclusions in
PAJA.  He
argued that this review maybe properly categorized as a legality
review and not under PAJA.  He submitted that
the review court
has to walk the steps that the decision maker walked when making a
decision. The report of Mr van der Westhuyzen
was not before the
decision maker, he argued, therefore the prospects of success on
review are nil. He submitted that the applicant
is not entitled to
the protection that an interdict offers only for it to pursue a cause
that is worthless.
[32]
Relying on the
Outa principle,
he argued that section 153 of
the Constitution entrenches the constitutional sovereignty of the
Municipality and an interdict against
it must be granted under
exceptional circumstances and in the clearest of cases. He submitted
that the issue raised by the applicant
is about the bill of
quantities. He directed the court to the list of the ten bidders and
the prices they offered. He submitted
that they were way above the
2,5 million suggested by the applicant. He submitted that the
applicants have failed to meet the
Plascon Evans
standard. He
submitted that the respondents’ version is explained by experts
and that version is adequate enough for it to
be accepted by the
court.  If the version of the respondents cannot be rejected
then the applicant cannot succeed. The version
of the respondents
created serious doubt on the applicant’s version and the relief
sought should be refused. He further submitted
that the court cannot
find on the facts of this case that the decision was
unconstitutional. He concluded that there is no basis
to confirm the
interim relief and it should be discharged with costs.
Third
respondent’s submissions
[33]
Ms Watt submitted that the applicant’s alleged clear right can
only emanate from section
217 of the Constitution which deals with
the procurement system. She submitted that the procurement process in
the tender in question
was fair, equitable, transparent and
competitive as can be seen from the bids received and the
adjudication thereof. She submitted
that the applicant’s
complaint is only directed at whether the award was cost effective.
The bid was awarded to the bidder
that scored the highest points and
that bidder was the 3
rd
respondent.
[34]
Its bid was substantially cheaper than the 1
st
respondent’s engineers estimate and was the only bid that was
entitled to be adjudicated in terms of price and B-BBEE. She

submitted that the quotation from Mr van der Westhuyzen cannot pass
muster in circumstances in which it is not in terms of the
bill of
quantities. In any event, she submitted that the 3
rd
respondent’s bid was substantially less that the 1
st
respondent’s engineers estimate. There is no irregularity that
was identified or that is relied upon by the applicant in
its
application.
[35]
She submitted that the applicant has not proved a right as alleged.
Addressing the issue of irreparable harm, she
submitted that the
allegation of irreparable harm is that the money spent on the tender
would be ‘
lost for the benefit of
the citizens of the Municipality’
.
She submitted that there is no irreparable harm in circumstances in
which the funding for the tender emanates from the National
Treasury
and is not being funded by the 1
st
respondent. There is irreparable harm to the 1
st
and 3
rd
respondents if the interdict remains in place as the funding for the
tender is at risk of being lost. She submitted that the balance
of
convenience favours the discharge of the interdict. The 3
rd
respondent has performed approximately 20% of the tender and is ready
to proceed with the completion of the tender.
[36]
She submitted that the applicant does not enjoy good prospects of
success in the review and its
review is not based on strong grounds.
She submitted that the
rule nisi
granted on 14 March 2023
should be discharged and the applicant should pay the 3
rd
respondent’s costs.
Discussion
[37]
As a starting point , the Constitutional Court in
Bato
Star Fishing ( Pty ) Ltd v  Minister of Environmental Affairs
and Tourism and Others
[4]
,
held that where a litigant relies upon a statutory provision, it is
not necessary to specify it , but it must be clear from the
facts
alleged by the litigant that the section is relevant and operative.
It is common cause that the applicant was not a dissatisfied

tenderer. It does not purport to represent any of the unsuccessful
tenderers. The applicant does not deny the fact that the upgrade
of
the Fletcher road is part of the Infrastructural Plan that had been
approved by the Council of the 1
st
respondent. The applicant’s case is premised on opinions of the
applicant and those of Mr van der Westhuyzen who, admittedly,
did not
do a geo-technical survey. Mr van der Westhuyzen is not entrusted
with the responsibility of running the 1
st
respondent. The Council of the 1
st
respondent where several political parties who represent the
communities under the municipality, deemed it appropriate to approve

the budget and the upgrade as stated by the 1
st
and 2
nd
respondents.
[38]
The applicant has stated that what triggered alarm bells was the 9
million.  The question is whether
that fact alone would
establish a legitimate ground to interfere with the tender award. The
issue of price cannot be viewed in
isolation as the applicant sought
to do. A tender award and contract price is a result of a tender
process. If there is no attack
on the procedure leading up to the
issuing of the tender, the advertisement, publication, tender
briefing processes, the evaluation
and adjudication thereof, focusing
on the price alone and ignoring the tender process as a whole, is
impermissible for the purposes
of attacking the legality of the
tender process.  The applicant is clearly on a fishing
expedition because when dealing with
the functionality phase he
stated ‘
I am informed and believe
that the tender process is often unlawfully manipulated precisely to
ensure the exclusion of tenderers.
This is an issue which can be
investigated and addressed in the review application in due course.’
This is just one of the examples where the deponent indicates that
based on his suspicions matters will be investigated.
Were
the Courts to entertain applications where people would, depending on
how they feel prices should be, rushed to Court to interdict

processes that have been put up after a lot of effort and expense as
explained by the 1
st
and 2
nd
respondents, that would, in my view, lead to unjust interference with
tender awards.
[39]
The monies that have been spent in preparation for the tender are
also tax-payers’ monies
and the Court must ensure that those
monies do not to go to waste based on speculation. In
Putco
(Pty) Ltd v MEC for Road & Transport, Gauteng & Others
[5]
;
Mudau J stated the established test that when considering a
prima
facie
right
is to take the facts averred by the applicant together with such
facts set out by the respondents that are not and cannot
be disputed
and to consider whether having regard to the inherent probabilities
the applicant should on those facts obtain final
relief in the
envisaged application. The facts set up in contradiction by the
respondents should then be considered and if serious
doubt is thrown
upon the case of the applicant, the applicants cannot succeed. The
same test applies herein.
[40]
The applicant obtained an interdict
ex
parte.
The effect of the interdict was
that it restrained the exercise of statutory powers by an organ of
State, in this instance the
1
st
respondent. In the absence of any allegations of mala
fides
Courts do not readily grant such interdicts.
[41]
The Constitutional Court in
National
Treasury & Others v Opposition to Urban Tolling Alliance &
Others (OUTA)
[6]
held:

The
balance of convenience enquiry must now carefully probe whether and
to which extent the restraining order will probably intrude
into the
exclusive terrain of another branch of government. The enquiry must
alongside other relevant harm, have proper regard
to what may be
called separation of powers harm. A Court must keep in mind that a
temporary restraint against the exercise of statutory
power well
ahead of the final adjudication of a claimants case may be granted
only in the clearest of cases and after a careful
consideration
of separation of powers harm
.’(my
emphasis).
[42]
The Court must weigh up the damage, and inconvenience which the
respondents would suffer if the
interim interdict remains in place.
And on the other hand the damage and inconvenience which would be
suffered by the applicants
if the interim order is discharged.
The
fears of the 1
st
and 2
nd
respondents that the grant may be forfeited are not far-fetched. They
have put up facts to indicate that their fear is based on
facts as
they have given examples where the grant was actually taken back .
The applicant, on the other hand, has failed to put
up any facts in
support of their alleged fears.
[43]
I disagree with the submission made by Mr Brown that the applicant
established a right or that
the allegations of irregularity made
meets the review standard. The allegations of irregularity must be
based on facts and not
on suspicions and
conjecture.
The applicant failed to do so herein. A proper example is what
was pointed out by the third respondent that the applicant  in

its replying affidavit stated :  “
A residential road
would require no more than a  13 mm Cape Seal which is currently
priced approximately R110 per square me
and would be considerably
less expensive than that specified ( incorrectly)  in the bill
of quantities.”
This statement is based on the advices of
Mr van der Westhuyzen. If one has regard to the quotation submitted
by the applicant which
was prepared
by Mr van
der Westhuyzen  on behalf of his company,  Civil and
General Contractors CC, he quoted : “
3.
Re- surface area with a 19 mm cape seal.”
This
is just one of the examples that indicates that the applicant was
trying to find some fault with the bill of quantities when
there was
none.  The applicant failed to show any irregularity with the
bill of quantities or with the tender process as a
whole.  The
version of the respondents demonstrated that the tender process was
conducted in a manner that was consistent
with the provisions of
section 217 of the Constitution.
[44]
In
casu,
the respondents have stated in clear and unambiguous
terms what
would befall
the 1
st
respondent if the awarded tender is not executed within the
prescribed period. I need not repeat those as I have dealt with them,

above. Every organ of State is statutorily enjoined to determine its
preferential procurement policy and implement same with specific

goals. The 1
st
and 2
nd
respondents have dealt
with the plans that the 1
st
respondent has for upgrading
its infrastructure. It is not open to the applicant to decide that
the upgrade of the Fletcher Street
is not a priority. That
determination lies with the Council of the 1
st
respondent.
It does not lie with this Court.
[45]
Mr Brown as aforementioned relied on the
Mlatsheni
decision
that the municipality did not litigate honourably. That attack is
unjustified in the circumstances of this case. In the
Mlatsheni
matter the RAF, according to the judgment, had raised a frivolous
defence and had failed to perform the constitutional
obligations they
owed to the plaintiff diligently.  Those findings do not arise
in this case. The answering affidavit and
the correspondence that the
1
st
and 2
nd
respondents exchanged with the
applicant evinced respect and the respondents stated only facts that
were sufficient to meet the
case against them. The fact that the
incorrect bill of quantities was attached,  was sufficiently
explained , hence the court
allowed the correct ones to be put up. In
urgent applications sometimes errors occur due to the fact that
things are to be done
in haste. In any event the correct bill of
quantities was exactly the same as the one that was put up by the 3rd
respondent and
no prejudice was caused to the applicant.  Any
prejudice which might have occurred, which was not demonstrated, was
ameliorated
by the time afforded to the applicant to deal with the
bill of quantities.
[46]
In the
Tshwane City
case  relied upon by the applicant,
the Constitutional Court was dealing with an interdict that the High
Court had granted
pending a review, (instituted by Afriforum and one
Mr van Dyk,) of the City’s decision to change street names. Of
importance
is that in that judgment at para [68], Mogoeng CJ stated:

[68]
Sight should never be lost of the fact that courts are
not meant or empowered to shoulder all the governance
responsibilities of the South African State. They are co –
equal partners with two other arms of state in the discharge of
that
constitutional mandate. Orders that have the effect of altogether
derailing policy- laden and polycentric decision of the
other arms of
state should not be easily made. Comity among branches of government
requires extra vigilance, but obviously not
undue self- censorship,
against, constitutionally forbidden encroachments into the
operational enclosure of the other arms. This
is such a case.”
[47]   I am in
agreement with the submissions made by Mr Maswazi that there is no
basis to allow the interdict to continue
because the applicant’s
version is not only doubtful but it is unreliable and speculative and
it stands to be rejected.
[48]
Having had regard to the relevant facts, I am satisfied that this
application was ill- conceived. The applicant
failed to establish a
right that was adversely affected by the tender award. It alleged
urgency that was self- made and obtained
a drastic relief with
drastic consequences which prejudiced the respondents as they have
described in their answering affidavits.
In certain instances, courts
would come to the aid of the applicant where there are at least some
reliable facts put up which,
although open to some doubt, establish
some right that is affected. This is not one of those cases.  Even
on the merits, the
applicant failed to establish the irregularity
complained of, instead it decided to criticize unjustifiably, the
bill of quantities
and not the tender process.  In the
circumstances I find that the separation of powers harm dictates that
the interdict should
be discharged.
[49]
On the issue of costs, it is fair and just that costs should follow
the result.  However, the 1
st
respondent should bear
the costs occasioned by the postponement of the matter on 4 April
2023. It was as a result of its error
in attaching a wrong document
that the matter had to be postponed.
[50]
I accordingly make
the following ORDER:
50.1
The
R
ule
Nisi
issued
on 14 March 2023 and in particular the interim relief contained in
paragraphs 1.1, 1.2 and 2 of the aforementioned Rule Nisi
be and is
hereby discharged, with the result that Part A of the application is
dismissed.
50.2
The
Applicant be and is hereby directed to pay costs of the 1
st
,
2
nd
and 3
rd
Respondents in respect of Part A of the application, which costs
shall exclude the costs occasioned by the postponement of the
matter
on 4 April 2023.
50.3
The
1
st
Respondent be and is hereby directed to pay costs occasioned by the
postponement of the matter on 4 April 2023.
T.V
NO
RMAN
JUDGE OF THE HIGH
COURT
Matter Heard on
:           04
April 2023 & 06 April
2023
Order handed down on:
06 April 2023
Judgment delivered on
:  11 April 2023
APPEARANCES
For the Applicant:
Adv Brown
Instructed by:
Wheeldon Rushmere &
Cole
Applicant’s
attorneys
119
High Street
MAKHANDA
(MR
BRODY / Meghan/ S25503)
Email
:
Lit6@wheeldon.co.za
For
the 1
st
& 2
nd
Respondents:
Adv Maswazi
Instructed
by:
Whitesides
Attorneys
1
st
and 2
nd
Respondents Attorneys
53
African Street
MAKHANDA
(REF
: Mr Grant Barrow)
Email
: barrowsec@whitesides.co.za
For the 3
rd
Respondent:
Adv Watt
Instructed
by:
Nettletons
Attorneys
3
rd
Respondents Attorneys
118
A High Street
MAKHANDA
(REF
: Ms Ilse Pienaar)
Email
: sam@ nettletons.co.za
[1]
2014
(1) SA 604
CC at para 18.
[2]
(418/2005)
[2007] ZAECHC at 108 also
2009 (2) SA 401
(E) at para 16 and 17.
[3]
2016(6)
SA 279 CC at
para
59.
[4]
(CCT
/ 27/03)
[2004] ZACC 15
;
2004 (4) SA 490
CC, at para 27.
[5]
Case
Nos. 2021/49674 & 2021/51091 dated 7 December 2021 at para 67.
[6]
2012 (6) SA 223
CC at para 47.