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[2023] ZAECMKHC 140
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Zen JV v Department of Transport: Province of the Eastern Cape and Others (4495/2023) [2023] ZAECMKHC 140 (28 December 2023)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, MAKHANDA)
NOT REPORTABLE
Case no: 4495/2023
In
the matter between:
ZEN
JV
Applicant
and
DEPARTMENT
OF TRANSPORT: PROVINCE
First
Respondent
OF
THE EASTERN CAPE
THE
MEC OF THE EASTERN CAPE PROVINCE
Second
Respondent
DEPARTMENT
OF TRANSPORT AND COMMUNITY
SAFETY
DOWN
TOUCH INVESTMENTS (PTY) LTD
Third
Respondent
JUDGMENT
Govindjee J
[1]
This is an urgent application to interdict the
first respondent (‘the Department’) from implementing its
decisions relating
to a tender for the appointment of a civil
engineering contractor for the upgrading of a road. The Department
awarded the tender
to the third respondent (‘Down Touch’).
[2]
Two main issues require determination. The first
is whether the matter was properly launched in accordance with the
provision of
the Uniform Rules in respect of urgency. Secondly,
whether the applicant (‘Zen JV’) has established the
requirements
for interim relief.
Urgency
[3]
Uniform Rule 6(12) provides that a court may
dispense with the forms and service provided for in the rules and may
dispose of such
matter at such time and place and in such manner and
in accordance with such procedure (which shall as far as practicable
be in
terms of the rules) as it deems fit.
[4]
It
is for the applicant to establish, in explicit fashion, the
circumstances which is averred render the matter urgent and the
reasons why the applicant claims that it could not be afforded
substantial redress at a hearing in due course. The degree of
relaxation
should not be greater than the exigency of the case
demands. The major considerations in deciding whether or not to
exercise the
court’s power to abridge the times prescribed and
to accelerate the hearing of a matter are the following:
[1]
·
The prejudice that the applicants might suffer by
having to wait for a hearing in the ordinary course;
·
The prejudice that other litigants might suffer if
the applicant is given preference; and
·
The prejudice that respondents might suffer by the
abridgment of the prescribed times and an early hearing.
[5]
Zen JV’s explanation as to the degree of
urgency is premised on it discovering on 7 December 2023, by way of
an internet site,
that the Department had awarded the tender to Down
Touch. Papers were drafted over the weekend of 8 and 9 December 2023
and issued
soon thereafter. The basis for this haste was the concern
that the award of the tender would be followed by the conclusion of a
formal contract as well as the incurring of costs in preparation for
the commencement of the works, as well as the execution of
the works.
Zen JV was of the view that the matter should be heard as soon as was
reasonably possible to avoid possible prejudice
and irreparable harm.
[6]
Zen JV was alive to the so-called ‘builders’
holiday’. Absent any departmental undertaking to cease further
implementation
of the award, it proceeded on selected time-periods,
having obtained a directive from the duty judge to have the matter
heard on
22 December 2023. It may be emphasised that the directive in
question rightly reserved the question of urgency for this court’s
determination. Papers were served on the respondents on 12 December
2023. The state attorney seemingly only became aware of the
application that afternoon. In essence, the respondents were afforded
a period of approximately a week to deliver answering affidavits,
and
the department was able to do so on 21 December 2023, a day prior to
the hearing of the matter.
[7]
The correspondence from Zen JV’s legal
representatives on the morning of 11 December 2023 is also
noteworthy. In addition
to requesting reasons for the Department’s
decision, an undertaking was sought that the Department would not
proceed further
with the implementation of the award of the tender
pending the review application to be launched. The correspondence
included a
covering letter emphasising that urgent attention was
required, made reference to the intended urgent interdict application
and,
in the final sentence, exhorted the Department to afford the
matter urgent attention. Suffice to say that no undertaking to stall
the implementation of the awarded tender was provided when the Office
of the State Attorney engaged in correspondence on 13 December
2023.
On 18 December 2023, that office indicated that its instructions were
to oppose the urgent application, appending correspondence
from the
Department which still failed to explain the precise reason for Zen
JV’s failure to be awarded the bid. The matter
followed a
predictable course given that approach.
[8]
A
judicial discretion must be exercised in determining which deviations
a court will tolerate in a specific case. Each case depends
on its
special facts and circumstances, as recognised by Kroon J in
Caledon
Street Restaurants
.
[2]
The rules are designed to ensure a fair hearing and should be
interpreted in such a way as to advance the scope of the entrenched
constitutional right to a fair hearing.
[9]
Zen JV seeks to exercise the constitutional right
to lawful, reasonable and procedurally fair administrative action and
to hold
the Department, as an organ of state, to the procurement of
goods and services in accordance with a system which is fair,
equitable,
transparent, competitive and cost-effective. This is
clearly not a case where urgency was self-created as a result of any
delay
in launching proceedings on the part of the applicant. If
anything, and bearing in mind the vagaries associated with launching
proceedings during the end-of-year recess, Zen JV erred on the side
of rapidity. Nonetheless, considering that what may have been
expected of the Department in opposing the proceedings would simply
be disclosure of its reason(s) for favouring Down Touch, it
afforded
the respondents adequate opportunity to present an opposing case.
Other than the usual inconveniences associated with
urgent
applications, it cannot be said that there was other prejudice to the
respondents or the administration of justice. It might
be added that
Zen JV’s case is a strong one, as will be illustrated. While it
may have been brief in explaining the circumstances
which rendered
the matter so urgent as to proceed by way of the truncated
time-frames described, the risks of loss of substantial
redress in
the event that it is successful but forced to wait in the queue to
argue part B of the motion, is apparent.
[10]
Considering the papers in their entirety, I am
satisfied that the relief sought in Part A is urgent, and that the
truncated time-frames
imposed was commensurate, appropriate and
reasonable in the circumstances. While there are certainly times
where, by way of non-suiting
an applicant, a court may wish to
emphasise strict adherence to the rules, and maximum consideration of
the interests of the other
party and its legal representatives, this
is not such an instance.
The requirements for
an interim interdict
[11]
Zen
JV seeks interim relief, pending review proceedings, and must
therefore establish:
[3]
(a)
that the right which is the subject-matter of the
main application and which it seeks to protect by means of interim
relief is clear
or, if not clear, is prima facie established, though
open to some doubt;
(b)
That, if the right is only
prima
facie
established, there is a
well-grounded apprehension of irreparable harm if the interim relief
is not granted and it ultimately succeeds
in establishing its right;
(c)
That the balance of convenience favours the
granting of interim relief; and
(d)
That the applicant has no other satisfactory
remedy.
[12]
In
cases where a clear right is not established, there is authority
going back to Van der Linden’s
Institutes
,
and entering our law via
Setlogelo
v Setlogelo
in
1914, that explains the correct approach.
[4]
Applicants for interim relief are required to establish at least a
prima
facie
right
to relief, even if open to some doubt. They need not establish that
right on a balance of probabilities.
[13]
The
oft-quoted passage from
Webster
v Mitchell
explains
the enquiry as follows:
[5]
‘
In
the grant of a temporary interdict, apart from prejudice involved,
the first question for the Court…is whether, if interim
protection is given, the applicant could ever obtain the rights he
seeks to protect.
Prima
facie
that
has to be shown. The use of the phrase “
prima
facie
established
though open to some doubt” indicates…that more is
required than merely to look at the allegations of the
applicant, but
something short of a weighing up of the probabilities of conflicting
versions is required. The proper manner of
approach…is to take
the facts as set out by the applicant, together with any facts set
out by the respondent which the applicant
cannot dispute, and to
consider whether, having regard to the inherent probabilities, the
applicant could on those facts obtain
final relief…The facts
set up in contradiction by the respondent should then be considered.
If serious doubt is thrown on
the case of the applicant he could not
succeed in obtaining temporary relief…But if there is mere
contradiction, or unconvincing
explanation, the matter should be left
to trial and the right be protected in the meanwhile, subject of
course to the respective
prejudice in the grant or refusal of interim
relief…the position of the respondent is protected because…the
test
whether or not temporary relief is to be granted is the harm
which will be done…’
[14]
That
enquiry has subsequently been refined, so that the test is now
whether the applicant
should
(not
could) obtain final relief on those facts.
[6]
[15]
Irreparable
harm is an element in cases where the right asserted by the
applicants, though
prima
facie
established,
is open to some doubt. In such cases, the accepted test to be applied
is whether the continuance of the thing against
which an interdict is
sought would cause irreparable injury to the applicant. If so, the
better course is to grant the relief,
but only if the discontinuance
of the act complained of would not involve irreparable injury to the
respondent.
[7]
[16]
As
to the balance of convenience,
Webster
v Mitchell
goes
as far as to state that if there is greater possible prejudice to the
respondent an interim interdict will be refused.
[8]
The balance of convenience enquiry must be applied cognisant of the
normative scheme and democratic principles that underpin the
Constitution.
[9]
In other words,
when a court considers whether to grant an interim interdict it must
do so in a way that promotes the objects,
spirit and purport of the
Constitution.
[10]
According to
EFF
,
this invariably attracts various constitutional issues into the
adjudication process, including possible issues regarding separation
of powers, the constitutional duties of the parties that may be
frustrated by the order and any constitutional rights implicated
in
the matter.
[17]
Where
legislative or executive power will be ‘transgressed and
thwarted’ by an interim interdict, it should only be
granted
‘in the clearest of cases and after careful consideration of
the possible harm to the separation of powers principle’.
[11]
In
EFF
,
Khampepe J explained that a court must carefully scrutinize whether
granting an interdict will disrupt executive or legislative
functions, thus implicating the separation and distribution of power
as envisaged by law.
[12]
It is
in that instance that an interim interdict would only be granted in
‘exceptional cases in which a strong case for that
relief has
been made out’.
[13]
[18]
In
Eskom
,
Madlanga J also considered
National
Treasury
and
EFF
as
part of the enquiry as to the ‘balance of convenience’.
[14]
Considering
the submissions advanced by counsel for both sides in respect of the
applicability of the test described in
National
Treasury
,
it may be useful to highlight the distinction drawn in
EFF
as
to its applicability:
‘
How
would an interim interdict hinder the Public Protector in the
exercise of her powers, or prevent her from exercising her functions
once the report is released and in the public domain? … The
Public Protector is not rendered ineffective since the investigation
has been completed, the SARS Report has been finalised and published
and the interim interdict is sought merely to protect the
prima facie
rights of an applicant…
[59] While I acknowledge
that
OUTA
is distinguishable on the facts from the present
matter, it is this very distinction that highlights the lack of
prospects of success
in the present case …
[60] What is evident from
the above is that the interim order sought in
OUTA
would
thwart the executive from carrying out its statutory and budgetary
duties as required by statute [to raise revenue through
tolls, a
power vested by statute]. Plainly put, it would prevent the executive
from doing what it was meant to do. Here, the interim
interdict
sought is different. The Public Protector has already performed the
duties and functions that the Constitution requires
of her. As I have
stated before, the SARS Report has been completed. Her powers have
been exercised and the SARS Report has been
published. The interim
interdict sought in the High Court therefore did not have the effect
of subverting her constitutional powers.’
A prima facie or clear
right
[19]
Zen
JV is only required to prove a
prima
facie
right
that
may
be open to some doubt
at
this stage of proceedings.
[15]
As Moseneke DCJ held in
National
Treasury
:
[16]
‘
The
prima facie right a claimant must establish is not merely the right
to approach a court in order to review an administrative
decision. It
is a right to which, if not protected by an interdict, irreparable
harm would ensue. An interdict is meant to prevent
future conduct and
not decisions already made. Quite apart from the right to review and
to set aside impugned decisions, the applicants
should have
demonstrated a
prima
facie
right
that is threatened by an impending or imminent irreparable harm’.
[20]
Generally,
the threshold for an interim interdict in terms of a breached right
or in terms of a threat of breach is not showing
the
certain
existence
of the right. One need only show a right, though at the level of
interim relief it may be ‘open to some doubt’.
[17]
[21]
Zen JV avers that its tender was, in all respects,
competent. It may be accepted that its tendered price was the lowest
–
more than R30 million less expensive than Down Touch. The
Department argues that Zen JV has conflated the requirements for the
award of the tender, and that its bid was rightly eliminated at the
‘eligibility stage’ or first phase of the process,
and
prior to any consideration of price, which was accordingly
irrelevant.
[22]
In particular, the Department maintains that Zen
JV’s tender did not comply with the following requirement that
Zen JV concedes
was material:
‘
A
suitably qualified and experienced full time Construction Health and
Safety Officer(s) to manage the contractor’s health
and safety
obligations on site who:
(i)
Is registered with SACPCMP as a Professional
Construction Health and Safety Agent (Pr CHSA) or Professional
Construction Health
and Safety Manager (Pr CHSM) or Professional
Construction Health and Safety Officer (Pr CHSO);
AND
(ii)
Has a minimum of five (5) years’ experience
as a Construction Health and Safety Officer on surfaced road
construction projects.
A completed returnable
schedule E: Tenderer’s Key Personnel to be provided. Attach to
each schedule proof of indicated professional
registration with the
specified professional body … Failure to comply with the
requirements of this clause and applicable
returnable schedule will
render the tender offer non-responsive.’
[23]
The Department’s only stated basis for
declaring Zen JV’s bid unresponsive was that its Construction
Health and Safety
Officer, Ms Ndamase, only had four years’
experience as such an officer, as opposed to the prescribed five
years. It may
be accepted that if this were the case, the bid was
properly excluded from further evaluation and / or adjudication.
[24]
But the submission is simply not borne out by an
ordinary consideration of various attachments to Zen JV’s
papers. It is necessary
to duplicate the relevant information
submitted by Zen JV, below:
‘
Table
B: Tenderer’s Key Personnel (Construction Health and Safety
Officer) For Returnable Schedule E
Name:
Zandile Ndamase
Key
Position: Construction Health and Safety Officer
SACMCMP
Reg No
…
SACPCMP
Category
…
Currently
Employed by tenderer: Yes
No of
Years Experience: 20
Client
and Project Name
Description
of Project
Project
End Date and Duration on Project
Value
of Project
Position
Held
Contact
Person and Firm
SANRAL
Upgrade
of R63…
Current
R714
m
Safety
Environmental Officer
…
SANRAL
Upgrade
of N2 …
Sept
2016 – April 2019
R645
m
“
…’
‘
CV
Summary
Position: Construction
Health and Safety Officer
Name: Zandile Ndamase …
Experience
Company
name
Dates
Employed
Position
of Employment
Major
Contracts
Approx.
Value
Brief
Description of Contract
Rumdel…
October
2016
Safety
Environmental Officer
N2
Tetyana Site
488
Million
Upgrading
of National Route N2 …
Rumdel …
2019-2022
Safety
Environmental Officer
R61
214
Million
Upgrading
of the Road from R61 …
Rumdel
2022 –
present
Safety
Environmental Officer
R63
714
Million
Upgrading
of R63…’
[25]
There is no need to make a definitive finding as
to the dispute of fact for present purposes. It bears emphasis that
the papers
must be read in the customary manner required for
consideration of interdictory relief, in accordance with
Webster
v Mitchell
, as modified by
Gool
.
That being the case, while there may be some doubt about Ms Ndamase’s
years of relevant experience,
prima
facie
Zen JV has demonstrated a right
to the award of the tender. This is its case on the papers and that
submission is not seriously
cast in doubt by the Department’s
version on its papers, also considering the inherent probabilities.
Consideration of ‘schedule
E’ together with the ‘CV
summary’
prima facie
supports Zen JV’s submission that Ms Ndamase
complied with the stipulated five-year requirement. This is so even
if a strict
interpretation is afforded to the discrepancy between
‘September 2016’ and ‘October 2016’, so that
the
later date is utilised. That discrepancy certainly cannot, on its
own, serve to disqualify the entire bid.
A well-grounded
apprehension of irreparable harm and absence of an alternative remedy
[26]
Zen JV has also established that, if a review is
successful in due course, there may not be an appropriate remedy
available as the
work that is the subject of the tender may have been
performed. The consequence would be that the relief would not have
practical
effect. Put differently, and as argued by Mr
De
La Harpe
, lapse of a significant period
of time during which the tender is implemented in favour of Down
Touch may result in Zen JV obtaining
a hollow judgment should it
succeed with its review. It may also be accepted that there is
clearly no other remedy available to
Zen JV pending the review of the
Department’s decision.
Balance of convenience
[27]
As indicated, a court may not fail to consider the
probable impact of granting interdictory relief on the constitutional
and statutory
powers and duties of the state functionary or organ of
state against which the interim order is sought.
[28]
That
said, it must be acknowledged that interim interdicts against organ
of state in tender disputes are commonplace, resulting
in the
suspension of tender awards pending judicial reviews.
[18]
[29]
In
the present circumstances, there is limited intrusion into the
exclusive terrain of another branch of government, and
correspondingly
little cause for concern as to ‘separation of
powers harm’.
[19]
The
court is not required to intrude into a ‘policy laden and
polycentric decision of the executive, as was the case in
National
Treasury
.
[20]
In any event, the fact that the harm grounding the interim interdict
sought amounts to a breach of a fundamental right to just
administrative action ‘tempers the impact of what may otherwise
be too stringent a test’.
[21]
Furthermore, the exercise of the Department’s powers in respect
of tender awards in general is not rendered ineffective should
this
particular tender be interdicted on an interim basis. The Department
has already performed an important component of its duties
and
functions in respect of this tender and granting the interim
interdict would not have the effect of subverting its powers.
The
balance of convenience favours Zen JV in circumstances where the
tender was awarded only recently and the formalisation of
the
contract is only to occur on or about 15 January 2024. The tender is
for a period of 36 months. The prejudice to Zen JV in
the event that
the implementation of the tender is not interdicted at this stage,
considering the circumstances, outweighs any
prejudice to the
Department.
Conclusion
[30]
Considering
the affidavits as a whole, the requirements for an interim interdict
have been met.
[22]
It is
appropriate in those circumstances for the court to exercise its
discretion and grant the interim relief sought. The public
interest
in ensuring cost-effective tender awards, and the scrupulous
utilisation of public resources, as required by the Constitution,
forms part of this decision. It goes without saying that the grant of
an interim interdict does not, and should not, affect the
review
court’s decision when making its final decision and should not
have an effect on the determination of the rights in
the main
application.
[23]
[31]
It follows that Zen JV is entitled to the costs of
this application. I have considered the large amounts involved in the
tender,
and the extent of the papers in deciding whether to allow the
costs of two counsel. The legal issues involved in the matter,
although
not without a level of complexity, are typical of interim
interdict applications involving a challenge to the award of a tender
by an organ of state. At the end of the day, the issues in dispute
were narrow and the arguments advanced suitably brief. In my
assessment, it cannot be said that the retention of two counsel was a
‘wise and reasonable precaution’ so as to justify
the
costs of two counsel.
Order
[32]
The following order is issued:
1.
The court dispenses with the forms and service
provided for in the Uniform Rules given the urgency of the matter.
2.
Pending the finalisation of the review of the
First Respondent’s decisions relating to the tender for the
appointment civil
engineering contractor for the upgrading of road
DR08034 from N2 to R61 via Clarkebury (20km) Phase 1, under tender
number SCMU10-23/24-0001
(‘the Tender’).
2.1.
The First Respondent is interdicted and restrained
from, in any way, further implementing its decision to award the
Tender to the
Third Respondent.
2.2.
The First Respondent is interdicted from entering
into any agreements relating to, or associated with, the award of the
Tender to
the Third Respondent.
2.3.
Should the First Respondent have entered into any
agreements relating to, or associated with, the award of the Tender
to the Third
Respondent, the First Respondent is interdicted and
restrained from implementing the terms of such agreements.
3.
The orders contained in paragraph 2 above shall
serve as an interim interdict, pending the finalisation of the review
in Part B.
4.
The First Respondent is to pay the costs of the
application.
A GOVINDJEE
JUDGE OF THE HIGH
COURT
Heard:
22 December 2023
Delivered:
28 December 2023
Appearances:
For
the Applicant:
Adv
D H De La Harpe SC & Adv K L Watt
Counsels
for the Applicant
St
George’s Chambers, Makhanda
Instructed
by:
Drake
Flemmer & Orsmond Inc.
Attorneys
for the Applicant
Quenera
Office Park
12
Quenera Drive
Beacon
Bay
East
London
C/o:
De
Jager & Lordan
2
Allen Street
Makhanda
Email:
Marius@djlaw.co.za
For
the Respondent:
Adv
L N Ntsepe
Counsel
for the 1
st
& 2
nd
Respondents
Club
Chambers, Gqeberha
Instructed
by:
State
Attorney
Attorney
for the 1
st
& 2
nd
Respondents
29
Western Road
Central
Gqeberha
Email:
MSisilana@justice.gov.za
[1]
I
L & B Marcow Caterers (Pty) Ltd v Greatermans SA Ltd &
another; Aroma Inn (Pty) Ltd v Hypermarket (Pty) Ltd & another
1981
(4) SA 108
(C) at 112H-113A.
[2]
Caledon
Street Restaurants CC v D’Aviera
1998
JOL 1832 (SE).
[3]
L
F Boshoff Investments (Pty) Ltd v Cape Town Municipality; Cape Town
Municipality v L F Boshoff Investments (Pty) Ltd
1969
(2) SA 256
(C) at 267B-E.
[4]
Setlogelo
v Setlogelo
1914
AD 221.
[5]
Webster
v Mitchell
1948
(1) SA 1186
(W) at 1189-1190.
[6]
Gool
v Minister of Justice and Another
[1955]
3 All SA 115 (C).
[7]
Setlogelo
above
n 4 at 227.
[8]
Webster
above
n 5 at 1192.
[9]
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012
(6) SA 223
(CC) (‘
National
Treasury
’
)
paras 46-47.
[10]
EFF
v Gordhan and Others
2020
(6) SA 325
(CC) (‘
EFF
’
)
para 40.
[11]
See
National
Treasury
above
n 9 and
EFF
above
n 10 para 110: the standard is applicable to constitutional matters
and is triggered only where ‘the effect of the
interdict is to
prevent the exercise of public power. The standard may not be
invoked in a commercial or contractual matter that
has nothing to do
with the exercise of public power:
EFF
above
n 10 para 110.
[12]
The
separation of powers doctrine, embedded in the architecture of the
Constitution, requires courts to ensure that all branches
of
government act within the law. It also demands that courts must
refrain from entering the exclusive terrain of the other branches
of
government unless the intrusion is mandated by the Constitution
itself:
National
Treasury
above
n 9 para 44.
[13]
EFF
above
n 10 para 48 and
National
Treasury
above
n 9 para 47.
[14]
Eskom
Holdings SOC Ltd v Vaal River Development Association (Pty) Ltd and
Others
[2022]
ZACC 44
(‘
Eskom
’
)
para 299. The majority indicated that a balancing exercise involving
a sliding scale was applicable: the more policy laden or
polycentric
the decision, the more the role this ‘factor’ must play
in influencing the outcome, and vice-versa. Affected
fundamental
rights would always play a critical role in the balancing exercise:
Eskom
para
303.
[15]
Eskom
above
n 14 para 245.
[16]
National
Treasury
above
n 9 para 50.
[17]
Webster
v Mitchell
above
n 5 at 1189 and
Gool
above
n 6 at 688A, cited with approval in
Eskom
above
n 14 para 293.
[18]
Cf
EFF
above
n 10 para 22.
[19]
See
National
Treasury
above
n 9 para 47.
Down
Touch Investments (Pty) Ltd v The South National Road Agency Soc
Limited
2020
JDR 2278 (ECG) para 44.
[20]
National
Treasury
above
n 9 para 67-8.
[21]
Eskom
above
n 14 para 302.
[22]
Eriksen
Ltd v Protea Motors and Another
1973
(3) SA 685
(A) at 691C-G.
[23]
EFF
above
n 10 para 47.