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[2022] ZAECGHC 36
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Bayethe Projects CC v Nelson Mandela Bay Municipality and Others (C.A.&R: 94/2021) [2022] ZAECGHC 36; 2022 (6) SA 196 (ECMk) (10 February 2022)
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE LOCAL
DIVISION, MAKANDA
CASE
NO: C.A.&R: 94/2021
DATE
HEARD: 31 JANUARY 2022
DATE
HANDED DOWN: 10 FEBRUARY 2022
In the matter between:
BAYETHE PROJECTS
CC
APPELLANT
and
THE NELSON MANDELA BAY
1
ST
RESPONDENT
MUNICIPALITY
BRONSCOR
CC
2
ND
RESPONDENT
FULL COURT APPEAL
JUDGMENT
D VAN ZYL DJP:
[1]
This appeal has raised for consideration the costs of an appeal that
has no practical
effect or result as envisaged in section 16(2)(a)(i)
of the Superior Courts Act
[1]
(the Act). In the court a quo (the Court), the appellant (Bayethe),
as applicant, sought the judicial review and setting aside
of the
decisions made by the first respondent (the Municipality) pursuant to
its invitation for tenders from interested parties
to undertake
“Mechanical Infrastructure Services” consisting primarily
of the maintenance of, and repairs to its waste
and water treatment
works in three separate areas.
[2]
Bayethe submitted tenders in respect of all three areas. Bayethe’s
tender bids
were found not to comply with the tender specifications
and was declared to be non-responsive. The second respondent
(Bronscor)
tendered in respect of Area 1. It was successful and was
awarded the tender. A contract was subsequently concluded between it
and
the Municipality. No awards were made in respect of Areas 2 and
3.
[3]
In its amended notice of motion Bayethe sought the review and setting
aside of the
decisions of the Municipality: (a) to cancel the tender
in respect of Area 2; (b) to declare the tender offer of Bayethe
non-responsive
in respect of Areas 1 and 2; (c) to award the tender
to Bronscor in respect of Area 1, and further, the substitution of
those decisions
by the award of the tenders in respect of Areas 1 and
2 to Bayethe; alternatively, that the award of the tenders be
remitted to
the Municipality for its reconsideration.
[4]
At the hearing of the matter before the Court Bayethe limited the
relief sought in
respect of Area 1 to a review and setting aside of
the decision to award the tender to Bronscor, and an order remitting
the matter
to the Municipality for reconsideration. The reason for it
no longer asking that the tender for Area 1 be awarded to it, was
Bayethe’s
acknowledgement in its replying affidavit that its
own bid was non-responsive for Area 1. In respect of its tender for
Area 2,
Bayethe asked the Court to set aside the decision of the
Municipality to cancel the tender and to award the tender for Area 2
to
it; alternatively, that the matter be remitted to the Municipality
for its reconsideration. The Municipality in turn asked the Court
to
set aside its own decision to award the tender for Area 1 to
Bronscor, the submission being that Bronscor’s bid, like
that
of Bayethe, did not comply with the tender specifications, and that
it should similarly have been found to be non-responsive.
With regard
to the tender for Area 2, the Municipality defended its decisions not
to award it to Bayethe, and to subsequently cancel
the tender for
Area 2.
[5]
The Court dismissed the application and ordered Bayethe and the
Municipality, jointly
and severally, to pay Bronscor’s costs of
the application. Bayethe was granted leave to appeal the judgment.
Its grounds
of appeal, which are relevant for present purposes, are
that the Court erred (a) by failing to deal with the relief sought by
it
in respect of the tender for Area 2, and (b), by ordering Bayethe
to pay Bronscor’s costs of the application. The appeal was
accordingly essentially limited to the costs order, and what was said
to be the failure of the Court to determine the issue raised
in
respect of Area 2.
[6]
The Municipality subsequently lodged a cross appeal against the order
of the Court.
It asked that the order of the Court be set aside, and
that it be substituted with an order:
“
1.1
That the decision of the First Respondent to accept the offer of the
Second Respondent to provide the tendered services
for Area 1 under
Tender Number SCM/18-46/S be reviewed and set aside;
1.2 That the
Second Respondent is to pay the First respondent’s costs.
2. That the
Second Respondent is to pay the costs of the cross appeal.”
[7]
Shortly before the hearing of the appeal, the Municipality withdrew
its cross-appeal
and tendered, “
the Applicant’s taxed
or agreed party and party costs in relation thereto.”
The
reference to the “
Applicant”
is obviously a
typographical error. The cross appeal was limited to relief which
only affected the interests of Bronscor in the
tender for Area 1
,
and the tender of costs was clearly intended to be in respect of
Bronscor’s costs of the cross appeal.
[8]
The reason for the Municipality’s withdrawal of the cross
appeal is its concession
that the issue raised therein with regard to
the decision to award the tender in respect of Areas 1 to Bronscor,
will have no practical
effect or result as contemplated in section
16(2) (a) (i) of the Act. In terms of this section of the Act, when
at the hearing
of an appeal the issues raised are of such a nature
that the decision sought will have no practical effect or result, the
appeal
may be dismissed on that ground alone. This section gives
effect to the fundamental feature of our judicial process that the
courts
decide disputes between the parties before them, and will not
pronounce on abstract questions of law or hypothetical statements
of
fact where there is no live dispute to be resolved.
[2]
At the hearing of the appeal all the parties were
ad
idem
that a decision on the issue raised in Bayethe’s appeal with
regard to the tender for Area 2, will similarly have no practical
effect. The concessions were correctly made. The reason for this is
that the contracts that were to be entered into by the Municipality
with the successful tenders, were limited to a period of three years.
The contract period expired in August 2021, approximately
five months
before the hearing of the appeal.
[9]
Section 16(2)(a)(ii) provides that the question as to whether a
decision would have
practical effect or result is, save under
exceptional circumstances, to be determined without reference to any
consideration of
costs. The costs referred to in this provision are
the costs incurred in the Court against whose decision an appellant
is seeking
to appeal, not the costs in the appellate Court
.
“The section is concerned with the decision of the Court a quo
and the circumstances in which the appeal against the decision
of
that Court can be dismissed without an enquiry into the merits. If
the costs incurred in the Court a quo were very substantial,
this
might constitute an exceptional circumstance leading to the
conclusion that a reversal of that Court’s decision would
have
practical effect.”
[3]
[10]
In the present matter there are no exceptional circumstances which
will justify a reassessment
of the costs order made by the Court.
Bayethe chose not to appeal the findings of the Court in relation to
its unsuccessful tender
for Area 1 on which the Court premised its
finding that Bayethe and the Municipality should not be liable for
Bronscor’s
costs incurred by it in having to defend the
validity of the tender awarded to it. The finding of the Court was
that in light of
the fact that Bronscor materially complied with the
tender specifications, and that it had been rendering the required
services
in terms of the contract concluded with the Municipality
pursuant to the award of the tender to it, it would not be just and
equitable
in the circumstances to set aside the award in respect of
Area 1. With regard to the Municipality’s request that the
award
of the tender to Bronscor for Area 1 be set aside, the Court
found that without a substantive application having been made by the
Municipality, it was not open to it to ask for such relief.
[11]
There is no merit in the submission on which Bayethe premised its
appeal against the costs order.
The submission was in essence that
because the Municipality had conceded that the award in respect of
Area 1 ought to be reviewed
and set aside, there was no reason why
Bayethe should have been ordered to pay Bronscor’s costs of the
application jointly
with the Municipality. Subject to the principle
that the court has a judicial discretion in awarding costs, the
general rule is
that the successful party in litigation is entitled
to his or her costs.
[4]
Bayethe
brought Bronscor to Court in a bid to have the decision to award the
tender for Area 1 to it set aside.
To
this extent, the Municipality made common cause with Bayethe in its
answering papers by contending that the contract entered
into with
Bronscor was invalid, in that its tender, like that of Bayethe,
should similarly have been found to be non-responsive.
Bronscor
successfully defended the matter. Bayethe elected not to appeal the
findings of the Court in dismissing its application
in respect of
Area 1, and the Municipality in turn withdrew its appeal in relation
to the tender for Area 1.
[12]
The only question is consequently whether there was any reason to
depart from the usual order.
Having
been unsuccessful in what was effectively a joint attempt by Bayethe
and the Municipality to have the award of the tender
to Bronscor set
aside, there is no good reason why they should not be jointly liable
for the costs of the application.
[5]
It cannot in my view be said that in the circumstances the Court
failed to exercise a proper and judicial discretion,
[6]
and Bayethe’s appeal against the costs order must be dismissed,
with the costs of the appeal to follow the result.
[13]
There accordingly exists no reason to continue the appeal for the
sole purpose of resolving the
issue of the costs of the application.
The issues raised by the appeal are generally factual in nature.
There being no question
of law or other issue of importance that is
raised, there exists no reason for this Court, in the exercise of its
discretion, to
allow the appeal to proceed on the merits.
[7]
The appeal therefore falls to be dismissed as envisaged in section
16(2)(a)(i) of the Act. That leaves the costs of the appeal
against
the decision of the Municipality not to award the tender for Area 2
to Bayethe, which had become moot. The principles applicable
to costs
in original proceedings apply equally to the costs of an appeal.
[8]
This falls within the discretion of the appellate court, to be
exercised judicially on a consideration of all the facts.
[9]
In considering how to exercise its discretion the starting point for
the court is that the appeal has been unsuccessful, and the
successful party is entitled to an order for costs. The question that
is raised is therefore whether there exists any reason to
depart from
the general rule that Bayethe, as the unsuccessful party, must be
ordered also to pay the costs of the Municipality.
[14]
The question is essentially whether, having regard to all the
circumstances and how it would
affect the parties, an order that
Bayethe should pay the costs of the appeal would be unjust. Each case
will turn on its own circumstances
and there should be no limit to
the types of circumstances which may, in a particular case, make it
unjust that the usual order
should follow. Some of the considerations
which may be relevant are the reasons for, and the stage at which the
appeal had lost
its utility; when the parties became aware, or could
reasonably have been expected to become aware of that fact; the steps
taken
by primarily the appellant who is
dominus litis
, to
avoid the unnecessary expenditure of costs and court time; the need
not to discourage parties from settling proceedings at
an early stage
by the making of adverse costs orders; and the impact of the order of
costs on the appellant that may be disproportionate
when weighed
against his or her prospects of success, had the appeal been decided
on the merits. The extent to which the latter
consideration may ask
of the Court to look into the merits of the appeal, will depend on
the circumstances of the case, not least
the amount of costs at
stake, the conduct of the parties, and the fact that the issues are
moot. The prospects of success of the
appellant on the merits of the
appeal may be of little significance when weighed against other
relevant considerations. The overriding
objective is to do justice
between the parties without incurring unnecessary court time and
consequently additional costs. As stated,
ultimately each case will
turn on its own circumstances.
[15]
In John Walker Pools the court explained these aspects as
follows:
[10]
“
Where
an appeal or proposed appeal has become moot by the time leave to
appeal is first sought, it will generally be appropriate
to order the
appellant or would-be appellant to pay costs, since the proposed
appeal was stillborn form the outset. Different considerations
apply
where the appeal or proposed appeal becomes moot at a later time. The
appellant or would-be appellant may consider that the
appeal had good
merits and that it should not be mulcted in costs for the period up
to date on which the appeal became moot. The
other party may hold a
different view. As a general rule, litigants and their legal
representatives are under a duty, where an
appeal or proposed appeal
becomes moot during the dependency of appellate proceedings, to
contribute to the efficient use of judicial
resources by making
sensible proposals so that an appellate Court’s intervention is
not needed. If a reasonable proposal
by one of the litigants is
rejected by the other, this would play an important part in the
appropriate costs order. Apart from
taking a realistic view on
prospects of success, litigants should take into account, among other
factors, the extent of the costs
already incurred; the additional
costs that will be incurred if the appellate proceedings are not
promptly terminated; the size
of the appeal record; and the likely
time it would take an appellate Court to form a view on the merits of
the moot appeal. There
must be a proper sense of proportion when
incurring costs and calling upon judicial resources.”
[11]
[16]
In the present matter, there exists in my view no reason to find that
the usual order as to costs
would be unjust in the circumstances.
Bayethe, being the appellant, could have avoided the costs of the
appeal. It must have been
evident to Bayethe at an early stage that
the prospects were slim that the appeal process would be finalised
before the expiry
of the relevant contract period. It manifestly took
no steps to prevent the continuation of the appeal before and after
it had
become moot. In a matter such as the present one, where
judicial review is a discretionary remedy, and the utility of the
relief
sought is determined by, and limited to a specific time
period, it is advisable for the appellant to consider carefully
whether
or not it is sensible in the light of intervening events and
the passage of time, to continue to pursue the appeal. If it is not,
then whatever may have been the merits at the time of the application
for leave to appeal, an attempt should be made to come to
terms with
the respondent(s) and to discontinue the proceedings.
[17]
A further consideration which is relevant in the present
circumstances is that Bayethe’s
appeal against the dismissal of
the relief claimed in respect of Area 2, has no reasonable prospects
of success. Bayethe’s
grounds of appeal in relation to Area 2
were limited to the Court having erred in failing “
to deal
with the distinct relief sought by the Appellant in respect of Area
2,”
and “
to deliver judgment in respect of the
relief sought by Appellant in respect of Area 2.”
The Court
dismissed the application as a whole. That would include the relief
sought by Bayethe in relation to both Areas 1 and
2. On a reading of
the judgment of the Court, it would appear that it dealt with the
portion of the relief sought by Bayethe in
respect of Area 2 on the
basis that the Municipality was found to have cancelled the tender
following its decision that none of
the tenderers submitted a
responsive tender, and consequently that the issue raised in relation
to Area 2 was no longer a live
issue. The Court, by implication,
found no reason to set aside the decision to cancel the tender for
Area 2.
[18]
On a reading of the papers filed in support of Bayethe’s
application, such a finding appears
to be justified. The focus of the
application was the decision by the Municipality to rule its tender
non-responsive. One is hard
pressed to find that any case was made
out for the setting aside of what was a separate and distinct
decision to cancel the tender.
This is so despite Bayethe’s
obvious realisation that the decision to cancel the tender would
stand in the way of it being
awarded the tender. That the decision
presented an obstacle that first needed to be cleared, is apparent,
not only from the relief
claimed in the amended notice of motion, but
from Bayethe’s reliance, in an internal appeal process in terms
of section 62
of the Local Government Municipal Systems Act,
[12]
on the cancellation of the tender as signifying that the tender
process had come to an end, and that the Municipality was prevented
from awarding any further tenders to any of the other tenderers.
[19]
It is accordingly incorrect that the Court had failed to deal with,
and to deliver judgment in
respect of Bayethe’s application for
relief pertaining to the tender for Area 2 as raised in the grounds
of appeal. Where
the Court’s finding with regard to the
cancellation of the tender was not pertinently raised as a ground of
appeal, there
exists no reason, in the context of a consideration of
the costs of the appeal, to also have regard to the merits of the
decision
of the Court in relation to whether or not the decision not
to award the tender for Area 2 to Bayethe, must be set aside.
[20]
In the result:
“
(
a)
The appeal is dismissed;
(b)
the appellant is ordered to pay the first and the second respondents’
costs of the appeal.
(c)
In view of the withdrawal of the cross appeal with the tender to pay
the second respondent’s costs, it is not necessary
to make any
specific order in respect of the costs of the cross appeal, save to
order that the costs be limited to those incurred
up to the date of
the withdrawal of the cross appeal.”
SIGNED
D VAN ZYL
DEPUTY JUDGE PRESIDENT
OF THE HIGH COURT
I agree:
SIGNED
M J LOWE
JUDGE OF THE HIGH
COURT
I agree:
SIGNED
R BROOKS
JUDGE OF THE HIGH
COURT
Counsel for the
Appellant:
T Zietsman
Instructed
by:
Huxtable Attorneys
26 New Street
MAKANDA
Counsel for the First
Respondent:
J G Richards
Instructed
by:
Nettletons
118a High Street
MAKANDA
Counsel for the Second
Respondent:
B J Pienaar SC
Instructed
by:
Gregory Clarke & Associates Inc
9 Buffelsfontein Road
Mount Pleasant
GQEBERHA
[1]
Act
10 of 2013.
[2]
See
the authorities referred to in Legal Aid South Africa v Magidiwana
and Others (1055/2013)
[2014] ZASCA 141
(26 September 2014) at para
[26].
[3]
John
Walker Pools v Consolidated Aone Trade & Invest 6 (Pty) Ltd (in
liquidation) and Another
(John
Walker Pools)
2018 (4) SA 433
(SCA) at para [8].
[4]
Griffiths
v Mutual and federal Insurance Co Ltd 1994 (1) SA 535 (A).
[5]
Minister
of Labour and Others v Port Elizabeth Municipality
1952 (2) SA 522
at 537 G; Maclean v Haasbroek NO and Others
1957 (1) SA 464
(A) at
417 A and Davies v Gordonia Liquor Licensing Board and Others
1958
(3) SA 449
(A) at 457 B - C.
[6]
See
Merber v Merber
1948 (1) SA 446
(A); Cronje v Pelser
1967 (2) SA 589
(A) and Beinash v Wixley
[1997] ZASCA 32
;
1997 (3) SA 721
(SCA) at 739 G – H.
[7]
The
Merak S: Sea Melody Enterprises SA v Bulktrans
2002 (4) SA 273
(SCA) at para (4) and ABSA Bank Limited v Van Rensburg and Another;
In Re: ABSA Bank Limited and Another
2014 (4) SA 626
(SCA) at
para [8].
[8]
Herbstein
and Van Winsen The Civil Practice of the High Courts and the Supreme
Court Appeal of South Africa 5
th
ed at page 1010.
[9]
Blou
v Lampert and Chipkin NNO and Others
1973 (1) SA 1
(A) at 15 E –
F.
[10]
Supra
fn 2.
[11]
At
para [10].
[12]
Act
32 of 2000.