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[2022] ZAFSHC 101
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Roadmac Surfacing (PTY) Ltd v MEC for the Department of Police, Roads & Transport, Free State Province & Another (171/2022) [2022] ZAFSHC 101 (2 June 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No:
171/2022
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
In
the matter between:
ROADMAC
SURFACING (PTY)
LTD
Applicant
(Registration
number: 1992/001299/07)
and
MEC
FOR THE DEPARTMENT OF POLICE, ROADS &
TRANSPORT,
FREE STATE PROVINCE
1
st
Respondent
TAU
PELE CONSTRUCTION (PTY)
LTD
2
nd
Respondent
(Registration
number: 2003/020819/07
CORAM
:
JP DAFFUE J
HEARD
ON
:
24 MARCH 2022
ORDERS
GRANTED ON
:
28 MARCH 2022
REASONS
HANDED DOWN ON
:
02 JUNE 2022
This
reasons were handed down electronically by circulation to the
parties’ representatives by email, and release to SAFLII.
The
date and time for hand-down is deemed to be 16h00 on 02 June 2022.
REASONS
I
INTRODUCTION
[1]
On 24 March 2022 I reserved judgment after having heard an opposed
application for
interim
relief pending a review application.
On Monday, 28 March 2022 I issued the following orders and indicated
that my reasons would
follow in due course:
“
1.
The first respondent is interdicted from giving instructions to the
second respondent and/or any other
tenderer to perform any further
work under
Tender No: PR&T18/2021/22
.
2.
The second respondent is interdicted from commencing with any further
work under
Tender No: PR&T18/2021/22
.
3.
The orders in paragraphs 1 and 2 shall serve as interim interdicts
with immediate
effect pending finalisation of the review application
to be instituted on/or before 22 April 2022 by the applicant against
the
decision of the first respondent to award
Tender No:
PR&T18/2021/22
to the second respondent.
4.
The costs of 28 January 2022, 10 February 2022 and 24 March 2022
shall stand
over for later adjudication.
5.
The reasons for the orders will follow in due course.”
[2]
Insofar as the reasons are handed down some time after the granting
of the orders,
I place on record that I was on recess duty and had to
deal with numerous unopposed motion court matters, several urgent
applications,
some of which were opposed, as well as two pre-trial
conference rolls. Then the second terms started in earnest.
II
THE PARTIES
[3]
The applicant is Roadmac Surfacing (Pty) Ltd, represented by Adv N
Snellenburg SC
assisted by Adv JJ Buys, they being instructed by L&V
Attorneys, Bloemfontein.
[4]
The 1
st
respondent is the MEC for the Department of
Police, Roads and Transport, Free State Province, represented by Adv
D de Kock, instructed
by the State Attorney, Bloemfontein.
[5]
The 2
nd
respondent is Tau Pele Construction (Pty) Ltd,
represented by Adv S Grobler SC, instructed by Peyper Attorneys,
Bloemfontein.
III
THE LITIGATION HISTORY AND RELIEF CLAIMED
[6]
Upon invitation by the
Department of Police, Roads and Transport, Free State Province,
several construction companies submitted tenders for “the
special maintenance on Route P44/1&2 between Deneysville and
Jim
Fouche from section one (01) to section four (04).”
[1]
The
duration of the project was advertised to be six months only. Once
the tender had been awarded, the applicant, being one of
the
unsuccessful tenderers, decided to embark on litigation. The history
of the litigation will be dealt with briefly hereunder.
[7]
On 11 January 2022 the applicant became aware that the tender had
been awarded to
the second respondent. It immediately reacted and
requested reasons to be provided by 14 January 2022.
[2]
No reasons were provided. On 18 January 2022 its application for
urgent relief, set down for 28 January 2022, was issued. The
applicant sought a variety of orders in its original notice of
motion, but it is not necessary to quote same. Some issues have been
resolved as will appear soon.
[8]
On 28 January 2022 an order was granted by agreement. The first
respondent was directed
to on or before 7 February 2022 file “full
and written reasons” for the decision not to award the tender
to the applicant.
The application was postponed to the unopposed roll
of 10 February 2022 and it was agreed that the further prayers in the
notice
of motion, including for an
interim
interdict pending
review, shall stand over.
[9]
On 10 February 2022, the reasons having been provided in the
meantime, the court by
agreement postponed the matter to the opposed
roll of 24 March 2022. Further orders were granted pertaining to the
filing of supplementary
affidavits.
[10]
On 24 March 2022 the parties came before me. I was
called upon to adjudicate whether
interim
relief should be
granted to interdict the successful tenderer to continue with further
work on the project pending finalisation
of a review application.
[11]
It also needs to be pointed out that the applicant filed an amended
notice of motion during the
course of the litigation. In this
document virtually the same relief is sought in Part A thereof, but
Part B, providing for the
review, differed from the initial notice of
motion. The respondents objected to this alleged incorrect procedural
approach. I decided
not to become involved in any controversy in this
regard and the orders granted reflect that attitude.
IV
THE APPLICANT’S CASE
[12]
The applicant submitted that a proper case has been made out for
interlocutory relief pending
finalisation of a review application to
set aside the first respondent’s award of the tender to the
second respondent. It
is submitted that:
12.1
on the first respondent’s own version the applicant’s
tender had been discarded and the tender awarded to second respondent
based on a process that was not fair, equitable, transparent,
comparative or cost-effective;
12.2
the reasons advanced by the first respondent establish reviewable
irregularities;
12.3
the 30% sub-contracting requirement was not a pre-qualification
requirement in terms of the eligibility criteria, being the first
stage of the evaluation process;
12.4
the Preferential Procurement Regulations of 2017 have been
declared
invalid by the Supreme Court of Appeal, and may I add, this decision
was confirmed by the Constitutional Court;
12.5 the
applicant’s tender was for R38 803 821.40, the lowest
of all the tenders, whilst the second respondent’s
tender that
was accepted, amounted to R51 615 000.00, R12 million more
than that of the applicant; it was also the fifth
lowest tender.
V
THE DEFENCES
[13]
The respondents relied on several defences which can be summarised as
follows:
13.1
on 7 February 2022 the first respondent’s Acting Director:
Legal Services responded in an email to the office of the State
Attorney wherein he belatedly provided reasons why the applicant
was
not the successful bidder. I quote
verbatim
:
[3]
“
It is a known fact
that Pre-qualification being stage one (1) is compulsory for the
contractor must complete 30% subcontracting
amount. The criteria
found its way in terms of Section 14 subparagraphs 14.1 to 14.6 of
Preferential Procurement Regulations, 2017
pertaining to the
Preferential Procurement Policy Framework Act now of 2000
.
We further refer Roadmac
to SBD 6.1 of its tender whereby it says “Not applicable”
while it is a MUST to give subcontracting
amount as part of terms and
conditions of the tender.
We further refer Roadmac
to Tender Bulletin advertisement no. 75 dated 3
rd
December
2021 as to prequalification criteria (PPR 2017).
Based on non compliance
of 30% subcontracting, it was deemed not to be responsive to
pre-qualification at stage 1.”
13.2
it is the first respondent’s case that no responsibility
rested
on the MEC to provide reasons in a shorter time period than the time
period referred to in s 5 of the Promotion of
Administrative
Justice Act (PAJA);
[4]
however
this issue has become moot as reasons were in fact provided, although
belatedly;
13.3
the applicant should have followed a process in terms of the
Promotion of Access to Information Act (PAIA),
[5]
but although the applicant eventually applied in the prescribed
format in terms of PAIA, the internal remedies in PAIA had not
been
exhausted and therefore the applicant approached the court
prematurely for relief – this was again an issue that did
not
have to be considered;
13.4
with reference to the well-known
dicta
of the Constitutional Court in
National
Treasury v Opposition to Urban Tolling Alliance (“OUTA”)
[6]
it was
submitted that the applicant had failed to show strong grounds that
it was likely to succeed in the review application;
13.5
in terms of s 18(1) of the Superior Courts Act
[7]
the Supreme Court of Appeal’s judgment and orders were
suspended when the Minister launched an application for leave to
appeal; consequently the decision setting aside the Preferential
Procurement Regulations of 2017 was stayed and therefore these
regulations were at all relevant times still in full force and effect
and nothing prohibited the Department from setting a
pre-qualification
requirement as stated, to wit “full
computation of the 30 (thirty) percent of the sub-contracting amount
is a pre-qualification
requirement”
[8]
;
13.6
reliance was placed on the wording of the tender notice and
invitation to tender as well as clause 29 of the contract’s
specific data stipulating that 30% of the contract value must
be
subcontracted to local contractors, as well as the tender bulletin of
the Department;
[9]
13.7
just as first respondent, the second respondent also relied
on the
tender notice and invitation to tender as well as item 29 of the
contract data and submitted that there was non-compliance
with
s 1
of
the
Preferential
Procurement Policy Framework Act (PPPFA
)
[10]
insofar as the applicant’s tender did not comply with the
tender requirements;
consequently,
the second respondent aligned itself with the first respondent’s
submission that the applicant did not submit
an acceptable tender and
that the tender was correctly disqualified,
while
also relying on sub-regulations 4(1) and 4(2) which I quote:
“
4. (1)
If an organ of state decides to apply pre-qualifying criteria to
advance certain designated groups, that organ
of state must advertise
the tender with a specific tendering condition that only …. or
more of the following tenderers may
respond-
(a) …;
(b) …;
(c) a tenderer
subcontracting a minimum of 30% to- …
(2) A tender that fails
to meet any pre-qualifying criteria stipulated in the tender
documents is an unacceptable tender.”
13.8
contrary to the applicant’s version that the tender
requirements were vague and uncertain, it was submitted in the heads
of argument on behalf of the second respondent that the tender
notice
was “very clear” and “it is difficult to conceive
of how, Roadmac being an entity in the Highest Echelons
of road
construction companies in the Country, could have misunderstood this
requirement.”
13.9
second respondent also submitted that the balance of convenience
did
not favour the granting of an interdict insofar as the specific road
was causing a hazard to all road users and also, since
the award of
the tender, effect had been given to it and several millions had been
paid to it, being the monetary value created
by it.
VI
THE REQUIREMENTS FOR
INTERIM
INTERDICTS
[14]
The four well-known requirements to be proven by an applicant for
interim
relief to be successful are the following:
[11]
“
a. a
prima facie
right, even if it is subject to some doubt;
b.
a reasonable apprehension of irreparable and imminent harm if an
interdict is not granted and ultimate
relief is eventually granted;
c.
the balance of convenience favours the granting of the interdict; and
d.
the absence of any other satisfactory remedy.”
[15]
In
Simon
NO v Air Operations of Europe AB and Others
[12]
the Supreme Court of Appeal confirmed the well-known test to be
applied in adjudicating a
prima
facie
right
in the context of an application for an
interim
interdict
in the following
dictum
:
“
The
accepted test for a
prima facie
right in the context
of an interim interdict is to take the facts averred by the
applicant, together with such facts set out
by the respondent that
are not or cannot be disputed and to consider whether, having regard
to the inherent probabilities, the
applicant should on those facts
obtain final relief at the trial. The facts set up in contradiction
by the respondent should then
be considered and, if serious doubt is
thrown upon the case of the applicant, he cannot succeed.”
[16]
The first requirement, to wit a
prima
facie
right
even open to some doubt, has been considered in a different light
since
Setlogelo
.
In
Gool
v Minister of Justice and Another
[13]
the full bench of the Cape Provincial Division held that in order to
restrain a Minister
pendente
lite
from exercising certain powers vested in him by a statute, relief
should only be granted in exceptional circumstances and when
a strong
case is made out. The Constitutional Court stated recently in
National
Treasury and Others v Opposition to Urban Tolling Alliance and Others
(“OUTA”)
with reference to
Setlogelo
as follows
:
[14]
“
44.
The common law annotation to the
Setlogelo
test is
that courts grant temporary restraining orders against the exercise
of statutory power only in exceptional cases and
when a strong case
for that relief has been made out. Beyond the common law, separation
of powers is an even more vital tenet of
our constitutional
democracy. This means that the Constitution requires courts to ensure
that all branches of Government act within
the law. However, courts
in turn must refrain from entering the exclusive terrain of the
Executive and the Legislative branches
of Government unless the
intrusion is mandated by the Constitution itself.
45.
It seems to me that it is unnecessary to
fashion a new test for the grant of an interim interdict.
The
Setlogelo
test,
as adapted by case law, continues to be a handy and ready guide to
the bench and practitioners alike in the grant of
interdicts in busy
Magistrates’ Courts and High Courts. However, now the test must
be applied cognisant of the normative
scheme and democratic
principles that underpin our Constitution. This means that 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.”
[17]
Although the Constitutional Court held that the
Setlogelo
test
as adapted by case law still remains a handy and ready guide to the
bench and practitioners in the magistrates and high courts,
“the
test must now be applied cognisant of the normative scheme and
democratic principles that underpin our Constitution.”
It
continued: “When considering to grant an
interim
interdict a court must promote the objects, spirit and purport of the
Constitution.” Consequently, the Constitutional Court
stated
the following:
[15]
“
If the right
asserted in a claim for an interim interdict is sourced from the
Constitution it would be redundant to enquire whether
that right
exists. Similarly, when a court weighs up where the balance of
convenience rests, it may not fail to consider the probable
impact of
the restraining order on the constitutional and statutory powers and
duties of the state functionary or organ of state
against which the
interim order is sought.”
[18]
Before I step off the topic, it is necessary to quote the following
from OUTA:
[16]
“
65.
…. It (the court) must assess carefully how and to what extent
its interdict will disrupt
executive or legislative functions
conferred by the law and thus whether its restraining order will
implicate the tenet of division
of powers. Whilst a court has the
power to grant a restraining order of that kind, it does not readily
do so except when a proper
and strong case has been made out for the
relief and, even so, only in the clearest of cases.
66
…. What this means is that a court is obliged to ask itself
not whether an interim
interdict against an authorised state
functionary is competent but rather whether it is constitutionally
appropriate to grant the
interdict.”
VII
EVALUATION OF THE EVIDENCE AND SUBMISSIONS BY THE PARTIES
Urgency
[19]
In order to consider urgency, it is important to note that rule 6(12)
requires absence of substantial
redress, which is not equivalent to
irreparable harm which is required before
interim
relief is granted. It is less than that.
[17]
[20]
The tender contract is for six months only and if
the applicant was forced to rely on a review application
in the
normal sense of the word and based on the normal time periods
prescribed by rule 53, it would no doubt not be afforded substantial
redress, even if successful on review.
[21]
The prejudiced party is entitled to seek
appropriate relief by way of an
interim
interdict in order to mitigate losses that may be suffered as a
result of unlawful administrative action. This has been clearly
recorded in
Olitzki
Property Holdings v State Tender Board and Another.
[18]
[22]
It is apparent that the first respondent is of the
view that the contract works must be concluded in haste.
[23]
The applicant reacted immediately on receipt of information that the
tender had been awarded
to the second respondent. It received the
information on 11 January 2022 and a week later, on 18 January 2022,
the application
was issued.
The
first requirement for interim interdicts: prima facie right
[24]
One aspect that bothered all counsel that appeared in this
application has now been put to rest
by the Constitutional Court and
no further attention will be given to the submissions received, save
to mention that insofar as
it is eventually found by the review court
that the first respondent applied the impugned regulations during the
period of suspension,
that court may well have to adjudicate the
legal challenge raised by the applicant
in
casu
.
In
Minister
of Finance v Sakeliga NPC (previously known as Afribusiness NPC) and
Others
[19]
the
Constitutional Court confirmed that
footnote 28 of the minority judgment was of no consequence and could
not affect the majority judgment. It held in a unanimous judgment
as
follows:
“
[16]
Based on this clear statutory position, the operation and execution
of the order of the Supreme Court of
Appeal was halted. In practical
terms, what happened immediately after that order was granted was
that the countdown on the 12 month
period of suspension began.
But the countdown was halted on the 21st day by the lodgment of the
application for leave to appeal
in this Court. Because section 18(1)
suspends the operation and execution of a judgment “
pending
the decision of the application [for leave to appeal] or appeal
”
,
the countdown resumed after this Court dismissed the appeal on
16 February 2022. Unsurprisingly, the Minister
does
realise
that
this is how the order ought to be interpreted. He says he is seeking
confirmation that
—
‘……
.’
For
the reasons I have given, there is no need for this clear legal
position to be confirmed.
[17]
As at 16 February 2022, of the 12-month period of suspension, less
than
a month
had
elapsed.”
[25]
The OUTA
[20]
judgment referred
to by both respondents and quoted above makes it clear that courts
considering granting temporary restraining
orders against the
exercise of statutory power shall only do so in exceptional cases and
when a strong case has been made out.
[26]
The Constitutional Court acknowledged in
National
Gambling Board v Premier, Kwazulu-Natal and Others
[21]
that an
interim
interdict is a court order preserving or restoring the
status
quo
pending the determination of rights of the parties, that it does not
involve a final determination of these rights and does not
affect
their final determination.
[27]
Section 217(1) of the Constitution
[22]
provides that an organ of state contracting for goods of services
must do so in accordance with a system which is fair, equitable,
transparent, competitive and cost-effective. Section 2(1)(f) of PPPFA
provides that:
“
The contract must
be awarded to the tenderer who scores the highest points, unless
objective criteria… justify the award
to another tenderer.”
[28]
In
Chairperson,
Standing Tender Committee and Others v JFE Sapela Electronics and
Others
[23]
the Supreme Court of Appeal had this to say about an “acceptable
tender”:
An
'acceptable tender' in turn is defined in s 1 as meaning 'any tender
which, in all respects, complies with the specifications
and
conditions of tender as set out in the tender document'. It is
well established that the legislature and executive in
all spheres
are constrained by the principle that they may exercise no power and
perform no function beyond those conferred upon
them by law. This is
the doctrine of legality. ….. The acceptance by an organ of
State of a tender which is not 'acceptable'
within the meaning of the
Preferential Act is therefore an invalid act and falls to be set
aside. In other words, the requirement
of acceptability is a
threshold requirement.”
[29]
In
Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board:
Limpopo Province and Others,
[24]
Jafta JA (as he then was), writing for a unanimous bench of the
Supreme Court of Appeal, considered the definition of “acceptable
tender” and held as follows, quoting Scott JA’s dictum in
JFE
Sapela Electronics
with approval:
“
[18]
….. Therefore the definition in the statute must
be construed within the context of the entire s 217 while
striving
for an interpretation which promotes 'the spirit, purport and objects
of the Bill of Rights' as required by s 39(2) of
the Constitution.
In
Chairperson:
Standing Tender Committee and Others v JFE Sapela Electronics (Pty)
Ltd and Others
Scott
JA said (para 14):
‘
The
definition of 'acceptable tender' in the Preferential Act must be
construed against the background of the system envisaged by
section
217(1) of the Constitution, namely one which is 'fair, equitable,
transparent, competitive and cost-effective'. In other
words, whether
'the tender in all respects complies with the specifications
and conditions set out in the contract documents
must be judged
against these values'.
[19]
In this context the definition of tender
cannot be given its wide literal meaning. It certainly cannot
mean
that a tender must comply with conditions which are immaterial,
unreasonable or unconstitutional. The defect relied on
by the
tender committee in this case is the appellant's failure to sign a
duly completed form, in circumstances where it is clear
that the
failure was occasioned by an oversight.
In determining whether
this non-compliance rendered the appellant's tender unacceptable,
regard must also be had to the purpose
of the declaration of interest
in relation to the tender process in question
. (emphasis added)
[30]
In order to adjudicate the first requirement of a
prima
facie
right it is necessary to consider whether the applicant’s
tender was correctly rejected as not being acceptable. I shall
consider the alleged vagueness of the tender invitation in light of
relevant authorities. It is trite that “the law requires
reasonable and not perfect lucidity.”
[25]
– Although the
dictum
in
Pretoria
Timber Company
was expressed whilst adjudicating the alleged vagueness of a
regulation, the principle is generally applicable. Much more recently
the Constitutional Court considered the doctrine of vagueness in
Affordable
Medicines Trust and others v Minister of Health and others.
[26]
I quote:
“
[108]
Regulation 18(5) was challenged on the
basis that it is vague and does not conform to the principle
of
legality. The doctrine of vagueness is one of the principles of
common law that was developed by courts to regulate the
exercise of
public power. As pointed out previously, the exercise of public power
is now regulated by the Constitution which is
the supreme law. The
doctrine of vagueness is founded on the rule of law, which, as
pointed out earlier, is a foundational value
of our constitutional
democracy. It requires that laws must be written in a clear and
accessible manner. What is required
is reasonable certainty and
not perfect lucidity. The doctrine of vagueness does not require
absolute certainty of laws. The law
must indicate with reasonable
certainty to those who are bound by it what is required of them so
that they may regulate their conduct
accordingly. The doctrine of
vagueness must recognise the role of government to further
legitimate social and economic objectives
and should not be used
unduly to impede or prevent the furtherance of such objectives.”
(emphasis added and footnotes omitted)
[31]
In
Minister
of Social Development and Others v Phoenix Cash and Carry Pmb CC,
[27]
the court held that:
“…
a tender
process which depends on uncertain criteria lends itself to exclusion
of meritorious tenders and is opposed to fairness
among tenderers,
and between tenderers and the public body which supposedly promotes
the public weal; …” and “…
a
public
tender process should be so interpreted and applied as to avoid both
uncertainty and undue reliance on form, bearing in mind
that the
public interest is, after giving due weight to preferential points,
best served by the selection of the tenderer who is
best qualified by
price. This is particularly relevant to the activities of a
‘technical evaluation committee’ which
examines the
tenders for formal compliance but does not evaluate the merits of the
bids.”
[32]
In his reasons for disqualifying the applicant, the first respondent
firstly relied on a so-called
section 14 with sub-sections. These do
not exist. If he meant, regulation 14 of the 2017 Regulations, that
regulation deals with
remedies, for example, if a tenderer failed to
declare any subcontracting arrangements, the organ of State shall not
disqualify
the tender, but give the tenderer an opportunity to make
representations. Secondly, it was stated that the “compulsory”
requirement, namely to “complete 30% subcontracting amount”
was not complied with. Clearly, the first respondent did
not have the
faintest idea which regulation he wanted to rely on to substantiate
the alleged non-compliance of the prequalification
of a 30%
subcontracting requirement. If I accept for the moment that the first
respondent intended to refer to regulation 14 and
not section 14,
regulation 14 does not deal with prequalifying criteria.
[33]
I agree with the applicant’s counsel that on a proper
consideration and interpretation of the tender notice and invitation
to tender the eligibility criteria stipulated in clause C.2.1 did not
require the applicant to satisfy a 30% subcontracting
requirement.
[28]
The reference
in the tender notice and invitation to tender that the “successful
tenderer must subcontract a minimum of 30%
of the value of the
contract” does not relate to prequalification criteria in terms
of regulation 4 of the 2017 Regulations,
but relates to an obligation
on the successful tenderer after the tender has been awarded to it.
This is clear from the tender
notice and invitation to tender where
the reference to successful tenderer is in the singular, whilst
tenderers in the plural are
referred to in the paragraphs above the
particular paragraph.
[34]
It is apposite to refer to the approach to the interpretation
of documents with reference to
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[29]
and the discussion of this judgment in
Capitec
Bank Holding Ltd & Another v Coral Lagoon Investments (Pty) Ltd &
Others
[30]
which I quote:
“
[50]
Endumeni
simply
gives expression to the view that the words and concepts used in a
contract and their relationship to the external
world are not
self-defining. The case and its progeny emphasise that the meaning of
a contested term of a contract (or provision
in a statute) is
properly understood not simply by selecting standard definitions of
particular words, often taken from dictionaries,
but also
by
understanding the words and sentences that comprise the contested
term as they fit into the larger structure of the agreement,
its
context and purpose. Meaning is ultimately the most compelling and
coherent account the interpreter can provide, making use
of these
sources of interpretation.
It is not
a partial selection of interpretational materials directed at a
predetermined result.
[51]
Most contracts, and particularly commercial
contracts, are constructed with a design in mind, and
their
architects choose words and concepts to give effect to that design.
For this reason, interpretation begins with the text
and its
structure. They have a gravitational pull that is important. The
proposition that context is everything is not a licence
to contend
for meanings unmoored in the text and its structure. Rather, context
and purpose may be used to elucidate the text.”
(emphasis
added)
[35]
Regulation 4 of the 2017 Regulations is the only regulation dealing
with the 30% subcontracting
requirement as a prequalifying criterion,
but the first respondent did not rely on this regulation for the
decision to disqualify
the applicant. In any event and insofar as the
first respondent wanted to rely on regulation 4, it should have
advertised the tender
with this specific tender condition, which he
failed to do. The uncertainty of the first respondent as to which
regulation is applicable
is an ambiguity in itself and
prima facie
a sufficient ground exists to have the award of the tender to the
second respondent reviewed and set aside.
[36]
The reliance on a 30% subcontracting requirement as part and parcel
of the eligibility criteria,
which is clearly not a requirement
ex
facie
the tender notice and invitation to tender, is also an ambiguity and
a further ground to have the award of the tender reviewed
and set
aside. As mentioned, there is a further ambiguity insofar as the
requirement contained in the tender bulletin differs apparently
from
the invitation to tender. The tender bulletin stipulates
[31]
merely that at stage 1 there must be “full computation of the
30% subcontracting amount.” Computation is nothing but
a
calculation. Most grade 7 children will be able to calculate what is
30% of R38 803 821.40 tendered by the applicant. The
failure to
insert that amount in the tender is really insignificant, bearing in
mind what was said in paragraph 19 in
Millennium
Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo
Province and Others.
[32]
The
applicant filled out the form which clearly stipulates that the
minimum subcontracting value will be equivalent to 30% with
the
abbreviation: “T.B.C.” Whether it means “to be
calculated” or “to be confirmed” is irrelevant.
It
knew that if it was the successful tenderer it would have to
subcontract a minimum of 30% of the contract value to “Targeted
Enterprises through Contract Participation Goals.”
[33]
The tender bulletin did not stipulate that a subcontractor had
to be identified by the tenderer and its particulars included
in the
tender documents. Even regulation 9 of the 2017 Regulations merely
refers to a “tendering condition that the successful
tenderer
must subcontract a minimum of 30% of the value of the contract”
to certain designated groups. A list of all suppliers
must be
provided by the organ of State in such a case. No evidence in this
regard has been placed before me.
[37]
I agree with the applicant that the first respondent’s decision
was based on errors of
law and fact. He took into account irrelevant
considerations and ignored relevant considerations. His decision was
not rationally
connected to the information before him and thus
reviewable. I am satisfied that a strong case has been made out and
that the review
court will consider the aforementioned favourably in
favour of the applicant.
[38]
In conclusion a final word on the 2017 Regulations. These regulations
were declared invalid as
it had been found that the Minister of
Finance who promulgated these regulations acted
ultra vires
and contrary to the powers given to him in s 5 of the PPPFA. A review
court will have an opportunity to consider this aspect again
notwithstanding the fact that the tender process was initiated and
finalised during the period when the declaration of invalidity
was
suspended. Regulations 4 and 9 depart from the provisions of s 217 of
the Constitution and do not meet the threshold of advancing
the
objectives in s 217(1) to be read with s 2(1)(f) of the PPPFA. An
award shall be made to the entity that scores the highest
points,
unless objective criteria justify the award to another tenderer.
Regulation 4 unlawfully creates a criterion to disqualify
tenderers
before their tenders have been evaluated. If it applied
in casu
,
it effectively meant that the first respondent did not need to follow
the PPPFA because of a discretionary power, without a framework
to
pre-decide which tenders are deemed worthy and even without
evaluating them.
Irreparable
harm
[39]
I am satisfied that if
interim
relief is not granted, the
applicant stands to suffer irreparable harm. If the applicant is
eventually successful with its review
application, the contract works
might have been concluded by then and in such a case, the applicant
will be saddled with a hollow
judgment.
Balance
of convenience
[40]
I have taken note of the fact that the second respondent proceeded
with the works notwithstanding
the fact that the applicant indicated
its intention to launch an application for relief. The second
respondent has not even established
site by then. The mere fact that
work in an amount of R6.5 million has been completed could not stand
in the way of an
interim
interdict. The first and second respondents acted at their own peril
notwithstanding the imminent litigation. The
dictum
of Conradie J in
Corium
(Pty) Ltd and Others v Myburgh Park Langebaan (Pty) Ltd and
Others
[34]
is apposite. This
dictum
has been accepted to be correct in
Actaris
SA (Pty) Ltd v Sol Plaatjie Municipality and Another.
[35]
The strong words of Bosielo J (as he then was) in paragraph 27 are
apposite
in
casu
.
The attitude of the respondents to continue with the implementation
of the contract while faced with an urgent application, issued
and
served at a stage when no road works have been embarked upon, speaks
in the words of the learned judge of “sheer intransigence
and
arrogance.”
[41]
I have taken due notice of the manner in which courts must consider
the balance of convenience
in these kind of applications. The
Constitutional Court has made itself clear in paragraphs 65 and 66 of
OUTA
quoted above.
[36]
I accepted
that many roads in the Province need urgent rehabilitation. However,
in my view, and if the Department has delayed taking
corrective
steps, it shall not all of a sudden advertise tenders just before the
festive season and then award tenders when most
people are on
holiday. Then, when asked to give reasons for an award, it wasted
time and energy to initially refuse to give reasons,
but eventually
gave reasons about a month later and only after taken to court.
Instead of preventing implementation of the tender
award and agreed
to an interdict, it allowed the second respondent to proceed. Also,
when requested to agree to truncated time
periods in order to have
the review finalised as soon as possible, it, through its counsel
remained quiet. There was nobody in
court to provide instructions to
her. Obviously, the impact of the restraining order will have a
negative effect on the duties
of the Department, immediate service
delivery and the public using the particular road, but I was
satisfied that it is constitutionally
appropriate to have granted the
interdict. The balance of convenience favoured the granting of relief
and the applicant, the unsuccessful
tenderer, who was entitled to
fairness and due compliance with s 217 of the Constitution and the
provisions of the PPPFA during
the relevant tender process. In the
process of considering the orders to be granted, I could not take my
mind off the sheer difference
between the tender prices. Why shall
the
fiscus
be held
liable to pay 30% more to the second respondent than the price
tendered by the applicant? Mr Grobler conceded that the applicant
is
a major role player in the industry. The public interest, on which
the respondents so heavily relied, will not be served by
allowing the
payment of extravagant amounts to the second respondent in this
particular factual matrix.
No
satisfactory alternative remedy
[42]
There is no alternative satisfactory remedy. In my view, the
applicant had no other option than
to approach the court for
interim
relief in order to mitigate losses that it may suffer as a result of
a finding by the review court that the first respondent’s
decision should be reviewed and set aside. A claim for damages is in
my view not a suitable alternative remedy. Protracted litigation
will
follow in order to prove damages and there is always the possibility
that the dissatisfied litigant will take the judgment
on appeal which
will further delay finalisation and increase costs. The applicant
requested an undertaking from the first respondent
to suspend the
implementation of the tender, but it refused.
VIII
CONCLUSION
[43]
I conclude therefore that the applicant has proven the four
requisites of an
interim
interdict and consequently, relief
was granted as requested.
[44]
Both respondents complained that the applicant acted contrary to the
rules in amending its notice
of motion midstream. In order to stay
away from any controversy and without having to consider the various
submissions, I decided
to grant relief as contained in paragraph 3 of
my order,
ie
that the applicant’s review application
shall be instituted on or before 22 April 2022. This might have
caused unnecessary
costs, but hopefully provided sufficient clarity.
[45]
I believed that I could act as case flow manager
to oversee the management of the future proceedings and
consequently,
during oral argument I requested counsel to provide me with suitable
dates for the hearing of the review application
in the event of a
finding that an
interim
interdict might be granted. Counsel
for first and second respondents, either could not receive
instructions, or were not prepared
to commit their clients to
truncated time periods in order to ensure that the review application
was speedily entertained.
[46]
Mr Snellenburg requested me to grant costs orders in favour of the
applicant at this stage of
the proceedings. In my view and although
the applicant achieved success with the
interim
interdict, the
court considering the review application will eventually be in the
best position to decide what would be an appropriate
order.
Consequently, I decided to let the costs stand over for later
adjudication.
[47]
Consequently, orders were granted on 28 March 2022 as encapsulated in
paragraph 1
supra
.
J
P DAFFUE, J
On
behalf of Applicant
Advv N Snellenburg SC & JJ Buys
Instructed
by :
L&V Attorneys
BLOEMFONTEIN
On
behalf of 1
st
Respondent
Adv D de Kock
Instructed
by :
State Attorney
BLOEMFONTEIN
On
behalf of 2
nd
Respondent
Adv S Grobler SC
Instructed
by
:
Peyper Attorneys
[1]
Invitation to tender, record: vol 1, p 48
[2]
Founding
affidavit: paras 32, 39 - 48
[3]
Supplementary
founding affidavit: Annexure “SA 1” at p 329
[4]
3
of 2000
[5]
2
of 2000
[6]
2012
(6) SA 223 (CC)
[7]
10
of 2013
[8]
Supplementary
answering affidavit: para 3.8
[9]
The tender bulletin:
p
373
[10]
5
of 2000
[11]
Setlogelo
v Setlogelo
1914
AD 221
at 227
[12]
[1998] ZASCA 79
;
1999
(1) SA 217
(SCA)
at 228 G – H
[13]
1955
(2) SA 682
C at 688 F – 689 C
[14]
2012
(6) SA 223
(CC) paras 44 & 45
[15]
Ibid,
para 46
[16]
Ibid,
paras 65 & 66
[17]
East
Rock Trading 7 (Pty) Ltd and Anther v Eagle Valley Granite (Pty) Ltd
and Others
[2012]
JOL 28244
(GSJ) at paras 6 – 8,
GPCM
v Minister of Home Affairs and Others
2020
(3) SA 434
(GP) paras 7 – 9 and
Mogalakwena
Local Municipality v The Provincial Executive Council, Limpopo and
Others
(2014) JOL 32103
(GP)
paras
63 & 64
[18]
2001
(3) SA 1247
(SCA) paras 37
et
seq
;
see also
Darson
Construction (Pty) Ltd v City of Cape Town and Another
2007 (4) SA 488
(C) at 506 E - H
[19]
[2022} ZACC 17
, a judgment delivered on 30 May 2022
[20]
Fn
14 above
[21]
[2001] ZACC 8
;
2002
(2) SA 715
(CC) at para 49
[22]
See also
Metro
Project CC and Another v Klerksdorp Local Municipality and Others
2004 (1) SA 16
(SCA) at paras 11 – 13 and numerous judgments
thereafter, and
inter
alia
Millennium
Waste Management (Pty) v Chairperson Tender Board: Limpopo
Province and Others
2008 (2) SA 481
(SCA) at paras 17 - 21
[23]
2008 (2) SA 638
(SCA) at para 11
[24]
2008 (2) SA (SCA) at paras 18 & 19
[25]
R v
Pretoria Timber Company (Pty) Ltd
1950 (3) SA 163
(A) at 176H
[26]
[2005] ZACC 3
;
2006 (3) SA 247
(CC) at para 108; see also
Mpumalanga
Tourism v Barberton Mines
2017 (6) SA 62
(SCA) at para 15
[27]
[2007] 3 All SA 115
(SCA) at para 2
[28]
Clause
C.2.1, being part and parcel thereof and referred to in the tender
notice and invitation to tender can be found on p 52
[29]
2012 (4) SA 593
(SCA) para 18
[30]
2022 (1) SA 100
(SCA) paras 50 & 51
[31]
At p 374 of the record
[32]
Fn 24 above
[33]
Tender notice at p 48
[34]
1993 (1) SA 853
(CPD) at p 858
[35]
[2008] ZANCHC 6
;
[2008] 4 All SA 168
(NC) paras 21 – 27
[36]
Quoted
supra
:
fn 16