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[2022] ZALMPPHC 12
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Monkwe Dietetics Services (PTY) Ltd and Others v MEC Department of Education and Another (4663/2021) [2022] ZALMPPHC 12 (22 February 2022)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
CASE NUMBER: 4663/2021
REPORTABLE: NO
OF INTEREST TO THE
JUDGES: NO
REVISED
DATE: 22 FEBRUARY 2022
In
the matter between:
MONKWE
DIETETICS SERVICES (PTY) LTD
FIRST APPLICANT
ALLJOY
TRADING ENTERPRISE (PTY) LTD
SECOND APPLICANT
EKPERECHI
TRADING PROJECTS (PTY) LTD
THIRD APPLICANT
and
MEC:
DEPARTMENT OF EDUCATION
FIRST RESPONDENT
SUCCESFUL
BIDDERS
SECOND RESPONDENT
JUDGEMENT
MANGENA
AJ
[1] The Department of
Education, Limpopo advertised a tender for the supply and delivery of
foodstuff to quintiles 1 to 3 schools
for a period of three years.
The applicants submitted their bids for consideration and
appointment. In the fullness of time, the
Department announced a list
of successful bidders and applicants were not on the list.
[2] Aggrieved by the
outcome, applicants approached this court for a relief in the
following terms:
(a) The decision to
disqualify the applicants in the functionality assessment of their
bids for appointment under Bid NO: LDE/B
52/2019/20, be declared
unlawful, reviewed and set-aside.
(b) The decision not to
appoint the applicants, under Bid NO: LDE/B 52/2019/20, be reviewed
and set-aside, and replaced with a
decision appointing the applicants
as service providers under Bid No: LDE/B 52/ 2019/20.
(c) In the alternative
to (b) above, that the applicant’s bid under Bid NO LDE/B
52/2019/20 be remitted back to the First
Respondent for re-evaluation
and adjudication, with any such directives deemed appropriate by the
Honourable Court.
[3] In support of their
prayers, applicants contend in the main that the department was
biased against them, considered irrelevant
factors, failed to take
into account relevant factors and that the decision not to award them
the tender is unlawful alternatively
unreasonable and therefore
susceptible to review under the provisions of the
Promotion of
Administrative Justice Act 3 of 2000
.
[4] The Department
opposed the application and defended the validity of the decision
taken. In
limine,
the department raised a triad of objections
for determination by the court prior to the merits. By agreement with
the parties,
the
points in limine
were argued together with
the merits on an understanding that the outcome thereof will be
incorporated in the judgment. I propose
to deal first with the
points
in limine.
Non-
Compliance with Rule 41A of the Uniform Rules
[5] Rule 41A of the
Uniform Rules requires of the party instituting the proceedings to
serve on the other party a notice indicating
whether he or she agrees
or oppose referral of the dispute to mediation. The respondent avers
that the rule is peremptory and applicant
is not permitted to elect
not to comply with it. The non-compliance with peremptory provisions
of the rule renders the application
defective such that it must be
visited with an order of struck off the roll.
[6] The applicants admit
non-compliance and submit that compliance would not have served any
purpose in view of the nature of the
dispute, namely the validity of
an administrative act. It was argued on authority of Oudekraal
principle that an administrative
act remains valid until set aside
and in the circumstances of this case an invitation to mediation
would not have assisted as the
parties could not on their own have
done anything without obtaining a court order. I have a difficulty
with this argument as it
conflates the process with the outcome. As I
understand it, Rule 41A serves an important purpose of facilitating
an expeditious
and cost-effective resolution of a dispute between
litigants. Of course, mediation being a voluntary process, it always
helps to
know in advance whether the opponent is amenable to discuss
the issue amicably and find a common solution than to expend time and
money on an issue that could have resolved over the table. Once
settlement is reached, the parties can approach the court to have
their agreement endorsed.
[7] The above
notwithstanding, I do not think that it would be appropriate to
uphold the point and struck the matter off the roll.
The rule also
requires the respondent/defendant before filing a plea or an
answering affidavit to file its own notice indicating
whether it
agrees or opposes referral to mediation. The department has not done
so and is guilty of the contravention. What’s
sauce for the
goose is sauce for the gander. The rule is procedural in nature and
it is not in every instance where non-compliance
should be visited
with striking off. Justice is best served when technical points are
obviated and matters disposed of on their
merits. The
point in
limine
is dismissed.
NON-JOINDER
[8] The Department
contends that the applicants should have joined the successful
bidders to these proceedings as they, according
to the department
have a direct and substantial interest in the outcome of this
proceedings, especially if the court were to find
in favour of the
applicants. A favourable finding would necessitate stopping the
implementation of the awarded tenders and re-opening
the entire
evaluation and adjudication process. This apprehension by the
Department is unjustified. The applicants cited all the
successful
bidders and annexed a full list as annexure A to the notice of
motion. The applicants further requested the respondent
to make
available to them email addresses supplied by all the successful
bidders for the purpose of service. There is no indication
on file
whether the department obliged on this request. Given the tenacity
with which they advanced the argument, it does not appear
to me that
such information was ever given. I find it strange that the
department will impede notification by failing to make information
available and then turn around and accuse the applicants of
non-compliance with non-joinder. In any case, the applicants have
indicated that they do not seek any order against the successful
bidders.
[9] The principles
governing joinder or non-joinder dispute are well- established. The
test is whether a party that is alleged to
be a necessary party, has
a direct and substantial interest in the subject matter, which may be
affected prejudicially by the judgment
of the court proceedings
concerned. This has been found to mean that if the order or judgment
cannot be sustained and carried into
effect without necessarily
prejudicing the interest of a party or parties not joined in the
proceedings then that party or parties
have a legal interest in the
matter and must be joined. (
Gordon v Department of Health, Kwazulu
–Natal
,
2008(6) SA 522 (SCA))
at para 9.
[10] In
Judicial
Service Commission and Another v Cape Bar Council and
Another,
2013 (1) SA 170
(SCA) at Para [12],
the principle was elucidated
when the court said as follows:
“
12” It
has now become settled law that the joinder of a party is only
required as a matter of necessity –as opposed
to a matter of
convenience – if that party has a direct and substantial
interest which may be affected prejudicially by the
judgment of the
court in the proceedings concerned
(See e.g. Bowring NO v
Vrededorp Properties CC,
2007 (5) SA 391
(SCA)
para 21).
The mere fact that a party may have an interest
in the outcome of litigation does not warrant a non-joinder plea. The
right of
a party to validity raise the objection that the other
parties should have been joined to the proceedings, has thus been
held to
be a limited one.”
[11] To determine whether
the order granted will prejudicially affect a third party, it is
necessary that a real and true nature
of the dispute be ascertained.
The applicant’s dispute relates to their exclusion on the list
of the successful bidders and
as I understand their case, all what
they need is to have their bids fairly adjudicated and scored in
accordance with the criteria.
The relief they seek has got no bearing
on the successful bidders as nowhere was it stated that a successful
bidder will be allocated
a certain amount or quoata of work. Having
ascertained the true nature of the dispute, I am not persuaded that
the successful bidders
have a direct and substantial interest in this
matter such that they would be prejudicially affected by the
judgment. The contention
of the respondent that they be joined to
these proceedings is without foundation and is dismissed.
(See
Council for Advancement of the South African Constitution and Others
v The Ingonyama Trust and Others,
2022 (1) SA 251
(KZP).
AFFIDAVIT
NOT PROPERLY COMMISSIONED
[12] The last of the
points in limine
raised related to the failure of the
applicant to depose to the founding affidavit. This point was a bit
difficult to grasp as
the original in the court file was properly
signed and commissioned. During oral submissions I raised this issue
with Adv. Gaisa,
counsel for the respondent and he maintained his
position that the copy in his client’s possession has not been
properly
commissioned. There was an explanatory affidavit deposed by
the attorney explaining the error and how it would have happened. In
the light of the fact that the original in the court file was
properly deposed, I do not think the respondent stood on firmer
grounds on this point. The
point in limine
is dismissed.
[13] What remains now is
whether the decision taken by the department reviewable on any of the
grounds is relied upon by the applicants.
The central question is
whether the department was correct not to allocate points to the
applicants in relation to certain criteria
during the evaluation
process. The facts are brief and summarised below.
[14] As stated in the
proceeding paragraphs, the Department of Education, Limpopo issued an
invitation for bids for the supply and
delivery of foodstuff to
designated primary and secondary schools. The bidders were required
to submit a properly completed bid
document and comply with certain
mandatory requirements mentioned in clause 5 of the document. Clause
6 dealt with the reservation
of rights and reads as follows on the
relevant part:
Limpopo Department of
Education reserves the right to:
6.2 Request further
information from any bidder after the closing date of the bid or
visit the physical address provided by
the successful bidder to
verify any information provided in the bid document.
6.3 Verify
information and documentation of respective bidder from SARS, CIPC,
Accredited financial Institutions, or any other
relevant entity and
to visit the premises of the bidder at any time without notice. Any
information received which does not correspond
with the one provided
in the bid document will render the bid
null and void.
[15] The section dealing
with mandatory requirements and reservation of rights concludes by
informing bidders in bold and black
capital letters that “failure
to comply with the above minimum requirements, the instructions in
the bid advertisement and
special conditions shall be regarded as
being invalid. Furthermore, bidders own terms or conditions shall not
be accepted.”
[16] Under evaluation, it
is recorded that the bid will be evaluated on functionality, price
and Broad-Based Black Economic Empowerment.
A bidder that scores less
than 70% functionality will not be considered for further evaluation
on Price and B-BBEE stages and bid
will be regarded as
non—responsive. The criteria under functionality was divided
into six (06) segments each with its allocated
maximum points adding
up to 100.
[17] The applicants
contend that they have submitted bids in compliance with the
mandatory requirements and had they been properly
evaluated and
scored, they would have met the minimum threshold of 70% on
functionality and automatically qualified for further
assessment on
price and BEE. They argue that the Department failed to allocate them
points on two segments under functionality,
namely delivery vehicles
and capacity. The failure to allocate them points was actuated by
bias, unreasonableness and resulted
in the decision being unlawful.
[18] The Department
contends otherwise and states that their bids were non-responsive as
they fell below the threshold of 70%. The
applicants did not qualify
for allocation on the disputed segments as they failed the audit and
verification process. It was submitted
on behalf of the department
that the vehicles which were listed in their bids were also listed by
other bidders and in certain
instances, the owner (s) of those
vehicles had also submitted their bids. In this instance, same
vehicles may not obtain a score
/points more than once.
[19] I do not follow the
logic of this argument. It was never a requirement of the bid that a
bidder should not list vehicles listed
by other bidders. This is so
because such a requirement would have been onerous as none of the
bidders would know in advance whether
the vehicle he or she intends
to lease had been offered to another bidder or not. In relation to
the evidence required to qualify
for points, a bidder only needed to
submit certified copies of the vehicle registration certificates, if
owner and in case of a
lease, a duly signed lease agreement of
transport. The reason given by the Department for failing to allocate
points to the applicants
under the delivery vehicle segment amounts
to an introduction of a new requirement and vitiates the fairness of
the process. What
was required was demonstrable ability to source a
delivery vehicle in the event the tender/bid is awarded. Applicants
have done
so by submitting lease agreements concluded with vehicle
owners who were willing to release those vehicles for the purpose of
transportation
of goods. It requires no rocket science to understand
and appreciate that the lease agreements were conditional upon the
awarding
of the bid to the bidder. The contention by the Department
that they disqualified applicants as a risk-mitigating factor is
unmeritorious.
[20] The other area of
contest between the parties related to the allocation of points under
financial capacity. The department
argued that the applicants were
not allocated points because they did not submit original letters
from an accredited financial
institution confirming that they have a
revolving credit, overdraft or cash. In the answering affidavit, the
department‘s
representative states that it was a term of
reference that an
original letter
from the accredited
financial institution be submitted.
[21] I have not come
across any requirement that bidders should submit an original letter
as a mandatory requirement. The reference
to the original letter from
the accredited financial institution is found under evaluation and it
is stated that such a letter
will be used together with the
management account of the bidder. I must mention that submission of
management account prepared
by a registered accountant or auditor is
a mandatory requirement under clause 5.2.1. Had the department wanted
the
original letter
from the financial institution for purpose
of evaluation and scoring, such a requirement should have been listed
under the mandatory
requirements. This is so because clarity and
certainty are important pillars of administrative justice in so far
as procument is
concerned. This much was said by the Constitutional
Court
in All Pay Consolidated v Chief Executive Officer, Sassa
2014(1) SA 604 (CC)
where Froneman J said: Vagueness and
uncertainty are grounds for review under S6(2) (i) of PAJA. Certainty
in legislation and administrative
action has been linked to the rule
of law. Vagueness can render a procument process, or an
administrative action procedurally unfair
under S6 (2) (C) of PAJA.
After all, an element of procedural fairness which -applies to the
decision making process –is
that persons are entitled to know
the case they must meet.
[22] The Department takes
issue with the format of the contents of the letters submitted by the
applicants on the basis that such
letters do not meet the express
requirement regarding financial capacity. In my view the department
is being unnecessarily over-technical
and promotes form over
substance. As a matter of fact, bidders were not responsible for the
drafting of the letters confirming
the balance available in their
respective accounts. What was required was confirmation of either
cash in the account or an existence
of a credit facility. If a bidder
submits a letter confirming that he has a cash balance of R
500 000-00, that bidder automatically
qualified for 25 points at
evaluation. If it is established during the audit and verification
process that his cash balance has
increased to over R2 million, then
he should be allocated maximum 40 points. The fact that the letter
does not state whether he
has a revolving credit or not is immaterial
and irrelevant. Revolving credits and overdrafts are voluntary
facilities available
for those who wants them. Government cannot as
part of its requirement impose an obligation on bidders to have a
loan facility.
Even if I am wrong on this point, the argument of the
department still fails when regard is had to the “
words or
cash”.
What this means is that a bidder should either have
a revolving credit confirmed by the bank or cash to qualify for
points. Any
other interpretation is self-made and intended at
obfuscating the real issue calling for determination. Whether the
applicants
objectively viewed demonstrated financial capacity to
carry out the project of delivering and supplying foodstuffs to the
designated
primary and secondary schools?
[23] The answer to the
question is a resounding yes. The reasons provided by the department
to exclude them arise out of a deliberate
and intentional disregard
of relevant and material information at the disposal of the decision
–maker. The decision was actuated
either by malice and bias or
deliberate distortion of the requirements necessary for a fair award
of the bid in a transparent and
competitive, manner. I have
distinguished this case from that of
Dr JS Moroka Municipality and
Others v Chairperson of the Tender Evaluation Committee and Others,
[2014] 1 ALL SA 545
(SCA)
where the court held that an
administrative body has no authority to condone failure to comply
with a peremptory requirement. In
that case the issue related to the
provision of an original tax clearance and Betram (Pty) Ltd submitted
a copy of the tax clearance
as opposed to the original. The
requirement for original tax is prescribed by legislation, namely
Preferential Procurement Regulations
2001. In this case the
submission of an original letter is not a peremptory legislative
requirement nor was it provided for under
the mandatory requirements.
[24] In conclusion I must
record that I have given consideration to the department’s
argument regarding the applicability
of the Plascon –Evans Rule
and in my view the rule does not assist them. The fact that there is
no replying affidavit does
not automatically translate respondent’s
averments into gospel truth. The issue in this matter is the failure
by the Department
to allocate points to the applicants and the
reasons provided. The fact that the reasons are not disputed in reply
does not metamorphose
them into cogency and insulate them from
invalidity. As stated the reasons given in the evaluation report are
spurious and based
on an unfair process
[25] For the above
reasons, I have no hesitation in concluding that the decision of the
Department falls foul of administrative
justice and is susceptible to
be reviewed and set aside.
Costs
[26] Both counsel agreed
that in keeping with the general rule that a successful party is
entitled to costs, I should award costs
to the successful party. I
intend to do so.
[27]
Consequently the following order is made.
1. The decision to
exclude the applicants from further evaluation on Bid NO LDE/B
52/2019/20 and disqualify them for allocation
of points under
delivery vehicles and financial capacity criteria under functionality
is reviewed and set aside
2 The applicants bids
under Bid NO LDE/ B52/2019 /20 is remitted back to the Department
/first respondent for re-evaluation and
adjudication, within a period
of 90 (ninety) days from the date of this order.
3. The Department /First
respondent is ordered to pay the costs of this application.
M.I MANGENA
ACTING JUDGE OF THE
HIGH COURT
LIMPOPO
DIVISION, POLOKWANE
APPEARANCE:
Counsel for the
Applicant
:
Adv
MANALA M.E
Instructed by
: GWEBU
INC ATTORNEYS
Counsel for the
Respondent :
Adv RAMAWELE SC
with
GAISA E.N
Instructed by
: STATE
ATTORNEY
Date of hearing
: 20
JANUARY 2022
Date of Judgment
: 22
FEBRUARY 2022