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[2022] ZAMPMBHC 49
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Mathata General Trading CC and Others v Head of Department of Mpumalanga Department of Community Safety, Security and Liaison and Others (2350/2022) [2022] ZAMPMBHC 49 (29 June 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
MPUMALANGA
DIVISION (MAIN SEAT)
Case
Number: 2350/2022
In
the matter between:
MATHATA
GENERAL TRADING CC
First
Applicant
MABOTWANE
SECURITY SERVICES CC
Second
Applicant
(Applicant
for Joinder)
MAFOKO
SECURITY PATROLS (PTY) LTD Third
Applicant
(Intervening
Applicant)
and
HEAD
OF DEPARTMENT: MPUMALANGA
DEPARTMENT
OF COMMUNITY SAFETY,
SECURITY
AND LIAISON
First Respondent
AND
THIRTEEN OTHERS
Second
to Fourteenth
Respondents
REASONS
Roelofse
AJ
INTRODUCTION
[1]
This application is about procurement by
the State. The Mpumalanga Department of Community Safety, Security
and Liaison (the Department)
contracted for the provision of services
(the tender). The services are for the provision security at several
provincial government
buildings for a period of three years (the
services). The contracts were preceded by a bidding process.
Contracts were eventually
awarded to seventeen service providers (the
successful bidders). The combined value of the contracts amounts R
1.25 billion (rounded
to the nearest R 1 000 000).
[2]
The
applicants are amongst the many unsuccessful bidders. The first
applicant (Mathata
[1]
) launched
the application. The second applicant (Mabotwane
[2]
)
and the third applicant (Mafoko
[3]
)
were respectively, after applying, granted leave to intervene and
join in the application.
[3]
The
first respondent is the Head of the Department and therefore also the
Department’s Accounting Officer.
[4]
The second respondent is Member of the Executive Council for the
Department.
[5]
The third
to seventeenth respondents appear to be some of the other
unsuccessful bidders.
[4]
The successful bidders who were awarded
the tender were not cited in the application.
[5]
In this matter I had to consider:
whether to grant interim relief on an urgent basis to the applicants
pending the review and setting
aside of the decision of the
Department pertaining to the procurement process (the decision);
whether to review and set aside the
decision; the remedy the court
must grant if the decision was reviewed and set aside; and costs.
[6]
I came to the conclusion that the award
of the tender was unconstitutional. I granted an order: declaring the
award of the tender
unconstitutional; suspended the declaration of
invalidity; provided for a process to determine an appropriate remedy
following
upon declaration of invalidity; and gave the successful
bidders and all other interested parties an opportunity to
participate
in the further proceedings provided for in the order if
they so wish.
THE
COURSE OF THE APPLICATION
[7]
The application was enrolled before me
as an urgent application to be heard on 21 June 2022. Only the first
and second respondents
(the Department) delivered a notice to oppose
the application. The Department’s answering affidavit was
delivered late. This
led to the late delivery of the applicants’
replying affidavits.
[8]
Two further applications were
instituted. These applications included Mabotwane’s application
for joinder in the application
and Mafoko’s application to
intervene in the proceedings.
[9]
The
application was set down for 09:00 on 21 June 2021. When I received
the court file, the answering affidavit, the joinder application,
the
intervention application and the replying affidavits were not part of
the papers. Just prior to the matter being called, my
attention was
drawn thereto that the further papers mentioned above were filed.
When the matter was called, I informed the parties
that the matter
would stand down until 22 June 2022 in order for me to consider the
further papers that were filed.
[6]
[10]
The Department opposed the applications
for joinder and intervention. I heard argument on these applications
on 22 June 2022.
I granted the application for joinder and the
intervention application. I ruled that Mabotwane be joined in the
proceedings as
second applicant and Mafoko be joined as third
applicant. I gave
ex tempo
re
reasons for my ruling. It is not necessary to repeat the full reasons
for granting the joinder and intervention applications
besides to say
that I found Mabotwane and Mafoko had established a real and
substantial legal interest in the outcome of the application
for they
participated in the bidding process, albeit unsuccessfully.
[11]
I also ruled that the parties shall
address me on both urgency and merits because the nature of the
urgency that was before me would
require time to consider. A disposal
of the issue of urgency only and then to return at a later stage for
a hearing of the merits
if the matter was enrolled as an urgent
application, would not be in the interest of a speedy finalisation of
the entire application.
[12]
After hearing argument on urgency and
merits, I stood the matter down until 23 June 2022 for the granting
of an order. I indicated
to the parties that the order would be
furnished to them by email and that the reasons for the order would
be furnished to them
in due course.
[13]
On 23 June 2022, I granted the following
order:
‘
[1]
A
rule nisi
is hereby issued calling upon all interested
parties, including the parties in this matter, the successful bidders
listed in annexure
‘CL1’ to the First and Second
Respondent’s answering affidavit, dated 15 June 2022 (attached
to this order, marked
“X”) (the service providers), to
show cause on 8 August 2022, why the orders in paragraphs [2] to [7]
below should
not be made final.
[2]
It is declared that the award of the tender Number: SS/048/21/MP, for
the provision
of security services for the Mpumalanga Provincial
Government buildings for a period of three years (the tender) is
constitutionally
invalid.
[3]
The declaration of invalidity of the tender is suspended pending
determination of
a just and equitable remedy.
[4]
The Applicants, the First to Fourteenth Respondents, the interested
parties and the
service providers are directed to furnish factual
information on affidavit, as well as further written submissions, on
the following
aspects:
(a)
The time and steps necessary in the initiation, response and
completion of a new tender process for
the provision of security
services for the Mpumalanga Provincial Government buildings (the
services).
(b)
The time and steps necessary, and the costs likely to be incurred, in
the implementation of the services
after the new tender process, if
so ordered is completed.
The
just and equitable arrangements that should be made for the continued
delivery of the services until new agreements for the
services are
implemented.
(c)
The cost implications for the Applicants, the Respondents, the
service providers if
a new tender process is ordered and implemented,
and how these costs could be ameliorated or offset.
(d)
What would be in the public interest when determining a just and
equitable remedy.
(e)
The exact extent of the implementation of the tender to date,
including all contracts
concluded, payments made, amounts received
and costs incurred in respect of the tender.
(f)
Any other information considered relevant.
[5]
The Applicants, the First to Fourteenth Respondents, interested
parties and the service
providers must comply with the directions in
paragraph [4] above by no later than Wednesday, 26 September 2022 or
on such extended
date the court deems meet.
[6]
Parties are directed to, by no later than 3 october 2022 approach the
Registrar of
this court with a duly completed Form B to this court’s
Practice Directive for purposes of case managing the proceedings for
the grant of a just and equitable remedy.
[7]
The grant of a just and equitable remedy is reserved pending the
further hearing on
a date determined during the case management in
paragraph [6] above.
[8]
The First and Second Respondents are directed to:
(a)
Within 5 (FIVE) days of the date of this order, to furnish a copy of
this order to
the Third to Fourteenth Respondents and the service
providers;
(b)
File a service affidavit setting out full compliance with the order
in paragraph [8](a)
above.
[9]
The First and Second Respondents are ordered to pay the applicants’
costs and,
in Mathata’s instance, the costs consequent upon the
employment of two counsel.’
[14]
What
follows is the reasons for the order.
BACKGROUND
[15]
The
Department advertised Bid Number: SS/048/21/MP (the bid). The bid was
for the provision of the services. The services were to
be rendered
in different clusters within the province.
[16]
Prospective bidders had to submit their
bids before the closing date of the bid on 10 December 2021. The
offer to bid was valid
for 90 days from the closing date of the bid.
The bid validity period therefore expired on 10 March 2022.
[17]
The
Department was unable to finalize the tender by 10 March 2022 and
published three extensions of the validity period of the bids.
[7]
The extensions of the validity period of the bids were published in
the Provincial Tender Bulletin. The extensions were merely
published
and no consent was sought from any of the bidders for the extension.
[18]
Ultimately,
the tender was awarded to seventeen bidders. Eighty-four bidders were
unsuccessful. On 3 June 2022, the Department requested
the Head of
the Treasury Department of Mpumalanga to publish the names of ‘THE
WINNING AND UNSUCCESFUL BIDDERS ON WEBSITE
[
sic
]’.
[19]
The Department alleges that contracts
had been entered into with the successful bidders. The successful
bidders commenced with the
services on 1 June 2022.
RELIEF
SOUGHT BY THE APPLICANTS
[20]
Mathata seeks an urgent interim
interdict pending the finalization of the review and setting aside of
the decisions that were taken
in respect of the tender; interdicting
and restraining the Department from implementing, giving effect to,
or to continue in any
manner and respect whatsoever with the
appointment of service providers for the tender. Mathata also
seeks an order directing
the Department to furnish it with certain
documentation relating to the tender. Mabotwane only seeks its
joinder in these proceedings.
Mafoko seeks the same relief as
Mathata. However, in the alternative, Mafoko seeks that
the Department's decision to
appoint the service providers for the
tender be reviewed and set aside.
[21]
The Department opposed all the
applications and delivered one answering affidavit wherein it set
outs its defence to each application.
The applicants filed and
delivered replying affidavits.
[22]
The Department raises two preliminary
defences, namely, urgency and the non-joinder of the successful
bidders in the application.
The Department also defends its decision
on the merits.
Urgency
[23]
Uniform Rule 6(12)(b) provides:
‘
(b)
In every affidavit or petition filed in support of any application
under paragraph (a) of this subrule, the applicant shall
set forth
explicitly the circumstances which he avers render the matter urgent
and the reasons why he claims that he could not
be afforded
substantial redress at a hearing in due course.’
I
proceed to deal with the two requirements for urgency namely: the
circumstances that render the matter urgent; and, the reasons
why the
applicant could not be afforded substantial redress as a hearing in
due course. Both the requirements must be met for an
applicant to
succeed on urgency.
Was
the urgency self-created?
[24]
Mathata’s application was issued
on 1 June 2022. Mabotwane’s application was served on 6 June
2022. Mafoko’s application
was issued on 15 June 2022.
[25]
Mathata, in support of its quest to have
the interim relief and request for information from the Department
adjudicated urgently
alleges that:
[25.1]
From March 2022 to the date the founding affidavit was deposed to
[8]
,
it enquired on a daily and weekly basis whether there was any
publication on the Department’s website and E-Tender
Publication
Portals in respect of the tender but, according to
Mathata, there was none;
[25.2]
On 8 March 2022, Mathata’s attorneys wrote to the Department
seeking an update in the process of evaluating
the bids;
[25.3]
On 29 March 2022, the Department responded wherein it advised Mathata
that the Department was still considering
the tender;
[25.4]
On 24 May 2022, Mathata’s attorneys informed the Department
that it has come to Mathata’s attention
that it was not
shortlisted;
[25.5]
On 30 May 2022, Mathata was informally told that service providers
had been appointed to commence with their
contracts on 1 June 2022;
[25.6]
Should the application be heard in the normal course, the successful
bidders would have commenced with the services
for which they were
appointed on the basis of an unlawful tender process, same goes if
the applicant requested reasons for its
decision within the normal
time limits provided for in the Promotion of Access to Administrative
Justice Act No. 2 of 2000;
[25.7]
Money coming from the public purse would be wasted if the contacts
are allowed to continue only to be set aside
in the normal course.
[26]
Mabotwane’s grounds for urgency
mimic those of Mathata.
[27]
Mafoko in support of urgency alleges
that:
[27.1]
It stood to suffer substantial financial loss and its employees would
lose their employment if the matter is
not adjudicated urgently;
[27.2]
On 31 May 2022 and 1 June 2022, Mafoko wrote to the Department
requesting information regarding the tender;
[27.3]
On 1 June 2022 it only learnt that successful bidders were appointed;
[27.4]
On 3 June 2022, the Department wrote to Mafoko informing it that the
successful bidders’ will be published
and that Mafoko was
unsuccessful;
[28]
In the Mathata and Mabotwane’s
heads of argument, they argue that Mathata did not drag their feet
but rather commenced with
their enquiries as early as March 2022. In
addition, Mathata did everything in their power to determine the
progress of the tender
by engaging with the Department. Instead of
informing Mathata of the progress of the tender, the Department did
not respond. Having
regard to Mathata’s persistent enquiries
only to ultimately be advised that the successful bidders were
appointed and would
resume their duties on 1 June 2022, Mathata and
Mabotwane therefore brought the application as expeditiously as
possible.
[29]
The Department is of the view that the
applicants’ urgency is self-created in that the applicants were
aware that the tender
validity period had expired on 10 March 2022
yet they waited to launch their applications. Upon Mathata and
Mabotwane’s versions,
they were informed by the end of May 2022
that no decision had been taken in respect of the award of the
tenders.
[30]
Firstly,
the applicants did not create their own urgency. It is trite that
self - created urgency does not constitute acceptable
urgency for
purposes of Uniform Rule 6(12) justifying the determination of a
matter on an urgent basis.
[9]
In
this matter, the applicants did not create their own urgency. Mathata
directed enquiries to the Department and, when it realised
that it
was a foregone conclusion that it was not successful because other
service providers were appointed, it approached the
court a mere two
days later. Mabotwane brought its joinder application within six
calendar days of becoming aware that it was not
successful with its
bid. Mafoko became aware that the successful bidders were appointed
on 3 June 2022. It launched its application
on 15 June 2022. I find
that also in Mafoko’s instance, they did not delay in
approaching the court.
[31]
Therefore, not one of the applicants
delayed their applications. In my view, they acted with the
prerequisite haste to approach
court. There is no merit in the
challenge by the Department that the urgency was self-created.
Substantial
redress in due course
[32]
The
second leg of the enquiry into urgency is to consider whether an
applicant would be afforded substantial redress at a hearing
in due
course. The Department alleges that the applicants have failed to
show why they would not be afforded substantial redress
at a hearing
in due course.
[33]
The
relief that is sought by the applicant must take prominence in this
leg of the urgency enquiry because, in my view, the real
question is
whether an applicant would be prejudiced if the relief he or she
seeks is not granted immediately and will be deprived
of his or her
remedy while being forced to wait to be heard in the normal course.
To put it differently, is there a good reason
not to assist the
applicant immediately and what would be the effect if the applicant
is not assisted immediately? The facts of
each case determine whether
substantial redress is obtainable in due course.
[10]
[34]
Mathata alleges that: it will be
prejudiced by the appointment if the successful bidders is kept in
force if the matter is heard
in the normal course because by then the
successful bidders would have delivered services in terms of an
invalid tender and that
the fiscus will be prejudiced by the
successful bidders delivering the services founded upon illegal
contracts and benefitting
therefrom. Mabotwane mimics Mathata’s
stance in this regard. Mafoko laments that it will suffer significant
losses is it
is forced to wait for relief to be granted in due
course.
[35]
What Mathhta and Mabotwane therefore
rely upon in respect of this requirement, is not only that they will
not obtain substantial
redress in due course but also that, in the
wider public interest, the unlawful award of the bids must be stayed
until same is
reviewed and set aside and that this could not wait to
be heard in the normal course.
[36]
Surely,
the review proceedings the applicants contemplate in the normal
course will in all likelihood have corrected the wrong and
may still
have provided redress. I am well aware of the sound principle that
urgency must not be abused by parties. However, in
my view, in the
clearest of cases where the review and setting aside of an
administrative decision is inevitable, it will be irresponsible
for
any court to perpetuate the unlawful decision by holding it in force
for the normal course to expend. It is upon this basis
that I am not
willing to refuse to hear the application on an urgent basis. After
all, there is a strong interest in both certainty
and finality. The
fundamental right to fair administrative action is at stake. Why
delay the inevitable? In
Merafong
City Local Municipality v AngloGold Ashanti Limited
[11]
Cameron J, speaking about delay in the institution of review
proceedings said:
‘
The
rule against delay in instituting review exists for good reason: to
curb the potential prejudice that would ensue if the lawfulness
of
the decision remains uncertain. Protracted delays could give
rise to calamitous effects. Not just for those who
rely upon
the decision but also for the efficient functioning of the decision
making body itself.’
[37]
I
am fully aware that
Merafong
dealt with a delay in the instituting of review while I am dealing
with a procedural requirement in Rule 6(12)(b). What
Merafong
lay down is that courts are expected to prevent potential prejudice
that would endure if the uncertainty over the lawfulness of
the
administrative decision remains. Under these circumstances a court
cannot be hamstrung for ‘
[A]
court should be slow to allow procedural obstacles to prevent it from
looking into a challenge to the lawfulness of an exercise
of public
power.’
[12]
Therefore, in my view the law dictates that I in any event enquire
urgently into the legality of the appointment of the successful
bidders.
Non-Joinder
[38]
The Department alleges that I am
precluded from making an order in the application because the
successful bidders were not joined
in the proceedings by the
applicants. It is common cause that they were not joined. It is also
common cause that the Department
only disclosed the identities of the
successful bidders in its answering affidavit. That was the first
time the applicants became
aware who the successful bidders were.
Therefore, the applicants are not to blame for not joining the
successful bidders. Whatever
the reason for the non-joinder the
question remains whether the court could grant the relief the
applicants were seeking in the
absence of the successful bidders.
After all the successful bidders have a clear interest in the outcome
of the application for
the order that might have followed is bound to
impact upon their rights as successful bidders who have already
commenced with the
services in terms of agreements they must have
already entered into with the Department.
[39]
Under these circumstances, I had two
options. The first option was to postpone the matter for the
successful bidders to be joined
in the proceedings. The second option
was to ensure that the successful bidders are heard if they wished
before the order is made
final. I elected to take the second option
for requiring the successful bidders to be joined first would only
delay the matter
and to join them
mero
moto
, would deny them the right to
be heard on their interest and would have forced them into this
litigation.
[40]
In my view, the issuing of a
rule
nisi
suspending the order pending
the return day would give the successful bidders an opportunity to
participate in the proceedings
if they so wished.
[41]
Mr
Rip, who appeared for the Mathata and Mabotwane argued that the
issuing of a
rule
nisi
would protect the interests of the successful bidders. Mr Rip
referred the court to
Amalgamated
Engineering Union v Minister of Labour
[13]
where Fagan AJA said:
‘
The
fact, however, that, when there are two parties before the Court,
both of them desire it to deal with an application asking
it to make
a certain order, cannot relieve the Court from inquiring into the
question whether the order it is asked to make may
affect a third
party not before the Court, and, if so, whether the Court should make
the order without having that third party
before it. Indeed, I cannot
see that in this respect the position of the two litigants would be
any better than that of a single
petitioner who applies ex parte for
an order which may affect another party not before the Court. The
third party's position cannot
be prejudiced by the consensus of the
two litigants that they do not wish that party to be joined.’
[14]
and
‘
It
is, of course, a well-known practice of our Courts to issue a rule
nisi in appropriate cases, calling upon parties not before
the Court
to show cause why an order which may affect them, should not be
made.’
[15]
[42]
Mr
Mtsweni, who appeared for the Department took a different view. He
argued that to issue of a
rule
nisi
when same is not asked for by the parties would offend the role of a
judge as neutral arbiter. On this score, Mr Mtsweni referred
me to
National
Commissioner of Police and Another v Gun Owners of South Africa
.
[16]
National
Commissioner of Police
found that it is inappropriate for a judge as neutral arbiter to of
own accord amend the final relief sought. In that case, the
Judge
proposed to the applicant’s counsel that certain amendments be
made to the final relief, which the applicant accepted.
[17]
[43]
Mr
Mtsweni also referred me to
City
of Johannesburg Metropolitan Council v Ngobeni
.
[18]
In
City
of Johannesburg Metropolitan Council
,
the issue was the conduct of the trial judge who
mero
moto
,
called witnesses, called for an inspection
in
loco
to be held and unduly interfered when a witness testified. The
Supreme Court of Appeal censured the trial judge’s conduct.
[44]
Mr Mtsweni’s argument has no
merit. Firstly, the granting of a
rule
nisi
does not constitute final
relief. Secondly, the issue of joinder concerns process, therefore it
is part of the adjective law while
the final relief which was granted
in the court of first instance in
National
Commissioner of Police
flowed from
the substantive law. Thirdly, the court has an overriding power to
regulate its own process and has an obligation to
ensure that
fairness prevail.
[45]
The successful bidders are not before
court not as a result of any remiss on the applicants’ side.
Rather they are not before
court due to the Department’s
failure to act transparently by not informing the applicants of the
outcome of the bidding
process when the Department was requested to
do so. In my view,
City of
Johannesburg Metropolitan Council
has nothing to do with the course I prescribe in the interest of the
speedy finalization of the matter without denying all persons
who has
an interest in the outcome of the application an opportunity to be
heard.
[46]
I have decided to issue the
rule
nisi
as set out in the order in the
interest of the speedy and effective resolution of the dispute over
the validity of the award to
the successful bidders. Ordering
anything else would only have delayed the matter and would have
denied the successful bidders
a hearing. Even worse, the irregular
reward would prevail for much longer than necessary and would be more
challenging to eventually
redress.
MERITS
[47]
I commence by considering the validity
of the award because that has a bearing on
the
prima facie
right requirement that
had to be established by Mathata and Mafoko as one of the
requirements for an interim interdict. However,
there is a more
important reason to commence with the enquiry into the validity of
the award. Mafoko, in the alternative, sought
the review and setting
aside of the tender. If the alternative relief that was sought by
Mafoko succeeded, there would be no need
to consider the requirements
for an interdict because the award would have been set aside. What
then would have remained is a determination
of an appropriate remedy.
The
validity of the award
[48]
It is
common cause that the validity period of the bid was extended three
times. This extension of the validity period of the bid
was put in
issue by the applicants. Mathata alleges as follows:
‘
The
Court's attention is highlighted to the fact the tender had a
validity period of ninety (90) days. Accordingly, the tender process
would lapse after 30 March 2022. The Department did not issue notices
by way of public advertisement that the tender would be extended.
The
applicant as a bidder was also not notified of any extension of the
tender validity period or requested to extend his bid past
the (90)
day period.
Accordingly,
the tender validity period lapsed on 30 March 2022. Any award of the
bid to any other party after 30 March 2022 would
constitute an
invalid and void step.’
[19]
[49]
Mafoko
alleges as follows:
‘
Mafoko
submits that the purported decision to award the tender was patently
unlawful because the tender validity period was not
extended lawfully
and in accordance with the requirements of procurement law and the
tender document.’
[20]
[50]
The
Department counters these allegations
[21]
by submitting that:
‘
......these
arguments are devoid of any merit. I say this for the following
reasons:
5.8.1
there are two decisions that are relevant in these proceedings. These
are:
5.8.1.1
The decision to extend the tender by way of notice in the tender
bulletin in February, March, April and May 2022; and
5.8.1.2The
decision to award the tender.
5.8.2
On reading of the Applicants’ papers, it is clear that the
Applicants do not challenge the decision
to extend the validity
period.
5.8.3.
I am advised and respectfully submit that in absence of a challenge
to the decision to extend the tender validity
period, the decision to
extend remains intact and capable of producing legal consequences. In
this regard, the legal consequences
of decisions to extend, that the
tender was extended and with the consequences, the award is lawful.’
[51]
Regarding the extension of tender
validity period, the Mathata responds in its replying affidavit as
follows:
‘
The
purpose of the tender validity period is the time during which the
Department's tender up offer remains valid and open for acceptance
by
bidders as set out in the tender particulars. The conduct of the
Department illustrates another gross irregularity on its part
and
another reason why the relief sought by the first and second
applicants ought to be granted.’
Although
the applicants raised this issue in the context of the award of the
tender to the successful bidders prior to the expiry
of the last
extension of the validity period, in my view, same applies to the
first extension of the validity period of the bid.
[52]
In
his argument, Mr Mtsweni referred me to
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
[22]
wherein
the principle that was established is that an administrative act
stands with all its consequences until reviewed and set
aside.
[53]
There
is no merit in Mr Mstsweni’s argument. Firstly, the applicants
squarely challenge the extension of the validity
period of the
bid.
[23]
Secondly, while the
principle in
Oudekraal
is
undoubtedly sound and has been followed by our courts ever since, the
error in Mr Mtsweni’s submissions is that each decision
in the
bidding process leads to an end result which is the award of the bid
to the successful bidder. It is that decision the applicants
seek to
challenge.
[54]
It
is common cause that the extensions were advertised. During argument,
Mr Rip raised the issue of the clear inability of the applicants
to
properly identify the bid in the advertisements due to the paucity of
the information that was published. The advertisements
[24]
read as follows:
‘
EXTENSION
OF VALIDITY FOR BIDS IN THE DEPARTMENT OF SAFETY AND SECURITY
DESCRIPTION
CLOSING
DATE FOR BID
BID
VALIDITY EXPIRY DATE (90-DAYS)
BID
VALIDITY EXTENSION (30 DAYS)
Provision
of Security Services for the Mpumalanga provincial government
building for a period of three years
10
December 2021
10
March 2022
10
April 2022
[55]
It is immediately apparent that no bid
number is reflected in the advertisement. Together with the
Department’s advertisement,
many other notices and
advertisements appeared simultaneously in each of the publications.
The specific advertisement was
so obscured that I found it difficult
to locate same when I considered the papers. The only obscured clues
that the advertisement
may have a bearing on the specific bid is the
description and, in the case of the first advertisement, the closing
date for the
bid and the 10 March 2022 date. In the later
advertisements the closing date of the bid and the initial closing
date of the bid
are not reflected.
[56]
I agree with Mr Rips’s contention.
If at least the bid number was reflected in the advertisement,
Mathata, who was making
enquiries on the web based platform regarding
the tender, may have been immediately directed that it was the
specific bid that
was referred to.
[57]
In
City
of Ekurhuleni Metropolitan Municipality v Takubiza Trading &
Projects CC and Others
[25]
the consent of the bidders were requested to extend the validity
period of the bid. However, the request did not reach one of the
bidders and the bid was awarded after the initial validity period.
The Supreme Court of Appeal found that once the tender
validity
period had expired, the tender process had been completed, albeit
unsuccessfully.
[26]
The
appellant’s appeal against the decision of the court of first
instance to set aside the awards and to suspend the declaration
of
invalidity pending the commencement of a new tender process was
dismissed.
[58]
In this matter, the conduct of the
Department was even worse. It extended the bid validity period
without the bidders’ consent.
The publication of the extension
of the bid validity period is of no moment without the prior consent
of the bidders.
[59]
Confronted
by the authority of
City
of Ekurhuleni Metropolitan Municipality
,
Mr Mtswani argued that the applicants’ inaction subsequent to
the Department’s resolve to extend the bid validity
period
amounted to tacit consent by the applicants. This argument has no
merit. The Department did not plead tacit consent on the
papers
before me. In addition, the invitation to tender constituted the
Department’s offer. One of the terms of the Department’s
offer was that the tender validity period would expire on 10 March
2022. The bidders’ submission of their bids constituted
an acceptance of the offer. An agreement came into being one of the
terms being that the tender would expire on 10 March 2022.
With
regard to the application of the law of contract once the bids were
received, see
City
of Ekurhuleni Metropolitan Municipality
[27]
where it was stated:
‘
Plasket
J, who took the view that the judgment in Telkom SA was ‘essentially
on all fours with [Searle]’observed:
‘
[68]
As with this case, what had to be decided, according to Southwood J,
was “the legal consequence of a failure by a public
body to
accept, within the stipulated validity period for the (tender)
proposals, any of the proposals received.” In deciding
this
issue, Southwood J’s starting point was four inter-related
propositions. They are that: (a) the decision to award a
tender is an
administrative action and the PAJA therefore applies; (b) generally
speaking, once a contract has been entered into
following the award
of a tender, the law of contract applies; (c) but a contract entered
into contrary to prescribed tender processes
is invalid; and (d)
consequently, “even if no contract is entered into, all steps
taken in accordance with a process which
does not comply with the
prescribed tender process are also invalid.”’
[60]
Even
if it accepted that a tacit consent by the bidders for the extension
of the bid validity period was possible, which I doubt,
the bidders
could not have consented to something they were unaware of i.e. the
Department’s decision to extend the bid validity
period.
[61]
The award of the bids after 10 March
2022 in the absence of all the bidders’ express consent renders
the decision by the Department
to award the bids invalid. The
subsequent award of the tender to the successful bidders was
therefore unconstitutional and must
be so declared.
Just
and equitable remedy
[62]
Section 172(1) of the Constitution of
the Republic of South Africa, 1996 provides:
‘
Powers
of courts in constitutional matters.—(1) When deciding a
constitutional matter within its power, a court—
(a)
must declare that any law or conduct
that is inconsistent with the Constitution is invalid to the extent
of its inconsistency; and
(b)
may make any order that is just and
equitable, including—
(i)
an order limiting the retrospective
effect of the declaration of invalidity; and
(ii)
an order suspending the declaration of
invalidity for any period and on any conditions, to allow the
competent authority to correct
the defect.’
[63]
As indicated before, Mathata and
Mabotwane seek interim relief pending the outcome of an application
for the review and setting
aside of the award as well as access to
information as prayed for in Mathata’s notice of motion. Mafoko
also seeks interim
relief. However, in the alternative, Mafoko seeks
final relief in the setting aside of the award.
[64]
The Mathata and Mabotwane pleaded:
‘
The
Applicant is of the respectful view that the award of the tender by
the Department to the service providers is the result of
a flaw,
unlawful, unreasonable, and procedurally unfair tender evaluation,
and adjudication process. This further aggravates the
Department’s
non-compliance with its statutory procurement obligations.’
[28]
[65]
Mafoko pleads that the decisions that
were taken by the Department constitute administrative action as
defined in section 1 of the
Promotion of Access to Administrative
Justice Act No. 3 of 2000 (PAJA). In addition, Mafoko pleads:
‘
The
Department's decision to award the tender is reviewable in terms of
section 6 (1) of PAJA if one or more of the grounds of review
codified in section 6(2) are present.’
[29]
[66]
There
can be no doubt that State procurement which is initiated by an
invitation to bid, the evaluation of bids received and the
ultimate
award of the tender, constitutes administrative action.
[30]
[67]
In
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer of the South African Social Security Agency
and
Others
[31]
,
the Constitutional Court said:
‘
Once
a ground of review under PAJA has been established there is no room
for shying away from it. Section 172(1)(a) of the
Constitution
requires the decision to be declared unlawful. The consequences
of the declaration of unlawfulness must then
be dealt with in a just
and equitable order under section 172(1)(b). Section 8 of PAJA
gives detailed legislative content
to the Constitution’s “just
and equitable” remedy.’ (Endnotes omitted)
[32]
[68]
Section 8 of PAJA provides:
‘
Remedies
in proceedings for judicial review.—(1) The court or
tribunal, in proceedings for judicial review in terms
of section 6
(1), may grant any order that is just and equitable, including
orders—
(a)
directing the administrator—
(i)
to give reasons; or
(ii)
to act in the manner the court or
tribunal requires;
(b)
prohibiting the administrator from
acting in a particular manner;
(c)
setting aside the administrative action
and—
(i)
remitting the matter for reconsideration
by the administrator, with or without directions; or
(ii)
in exceptional cases—
(aa)
substituting or varying the administrative action or correcting a
defect resulting from the administrative
action; or
(bb)
directing the administrator or any other party to the proceedings to
pay compensation;
(d)
declaring the rights of the parties in
respect of any matter to which the administrative action relates;
(e)
granting a temporary interdict or other
temporary relief; or
(f)
as to costs.
(2)
The court or tribunal, in proceedings for judicial review in terms of
section 6 (3),
may grant any order that is just and equitable,
including orders—
(a)
directing the taking of the decision;
(b)
declaring the rights of the parties in
relation to the taking of the decision;
(c)
directing any of the parties to do, or
to refrain from doing, any act or thing the doing, or the refraining
from the doing, of which
the court or tribunal considers necessary to
do justice between the parties; or
(d)
as to costs.’
[69]
I proceed to deal with the consequences
of the declaration of invalidity of the awards to the successful
service providers.
A just and equitable order must be
considered and made.
[70]
What
would be a just and equitable remedy depends on the circumstances of
each matter having due regard to the facts. In
BW
Brightwater Way Props (Pty) Ltd v Eastern Cape Development
Corporation
[33]
,
the Supreme Court of Appeal said:
‘
Section
172(1)(b) of the Constitution empowers a court when deciding a
matter, to make any order which it deems just and equitable
with
reference to the circumstances of a particular matter. This simply
means that the effects of the declaration of invalidity
may be
ameliorated by the court in the exercise of its just and equitable
discretion at the remedy stage.’
[71]
In
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Limited
[34]
,
the Constitutional Court said:
‘
However,
under section 172(1)(b) of the Constitution, a court deciding a
constitutional matter has a wide remedial power. It is
empowered to
make “any order that is just and equitable”. So wide is
that power that it is bounded only by considerations
of justice and
equity.’
[72]
I took the aforesaid fundamental
principles into account when I considered the order I made.
[73]
The successful service providers had
already been appointed and had commenced with the delivery of their
services on 1 June 2022.
Contracts must have been entered into with
them granting them rights and imposing obligations upon them. The
tender was for the
delivery of security services at government
buildings throughout the province. To cause the immediate
discontinuation of those
services would simply have been impossible.
The security of government property, those persons who are employed
in the buildings
and the members of the public who are services at
the buildings would be severely compromised. The buildings can simply
not be
left without protection. The successful bidders must have
expended substantial amounts of money in order to bid and to commence
with the services awarded to them. Their services are continuing, to
which extent, I do not know because insufficient information
is
before this court and because they are not before court, what would
be lost to them is yet to be established. Even if the award
is set
aside it would not necessarily follow that the awards to the
successful bidders would not again be made to them. The Department
demonstrated that the applicants would in any event had been
unsuccessful because they would have fell out on price. There is a
lack of information before this court on the loss (financial or
otherwise), the applicants have suffered and will be suffering
if the
contracts are not set aside.
[74]
All of these aforesaid factors are
particularly relevant in deciding a just and equitable remedy. The
order that I made is aimed
at securing the information required in
order to make a decision on a just and equitable remedy subsequent to
the finding of invalidity
of the award.
[75]
Armed with the information that is to be
gathered through the order, the court would be in a better position
to decide the fate
of the agreements, whether to order a new tender
process and if such process is ordered, what it would entail time and
money wise.
Fore mostly the court would be in a position to manage
the further continued and uninterrupted delivery of the all-important
services.
COSTS
[76]
The applicants were successful in the
application. I saw no reason why the costs should not have followed
the result.
Roelofse
AJ
Acting
Judge of the High Court
DATE
OF HEARING: 21
and 22 June 2022
DATE
OF JUDGMENT: 29 June 2022
APPEARANCES
FOR
THE FIRST AND SECOND APPLICANTS:
Adv MM Rip SC together
with
Adv JH Groenewald
INSTRUCTED
BY:
David
H Botha & Kruger
Incorporated
FOR
THE FIRST AND SECOND RESPONDENTS:
Adv Mtsweni
INSTRUCTED
BY:
The State Attorney
[1]
Mathata
General Trading CC.
[2]
Mabotrane
Security Services.
[3]
Mafoko
Security Patrols (Pty) Ltd.
[4]
Section
1
of the
Public Finance Management Act 1 of 1999
.
[5]
No
relief is sought by the first and second applicants against the
second respondent.
[6]
The
additional papers comprised approximately 700 pages.
[7]
On 4 February 2022 for an extension of 30 days. On 28 March 2022 for
an extension to 10 May 2022. On 5 May 2022 for an extension
to 10
June 2022.
[8]
1
June 2022.
[9]
See:
Police and Prisons Civil Rights Union v Minister of Correctional
Services and Another,
[2014] 5 BLLR 481
(LC) at par [6]; Workforce
Group (Pty) Limited v National Textile Bargaining Council and
Another,
[2011] 11 BLLR 1136
(LC) at par [13] and Juta & Co Ltd
v Legal and Financial Publishing Co (Pty) Ltd, 1969 (4) SA 443 (C).
[10]
East Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite
(Pty) Ltd and Others (11/33767) [2011] ZAGPJHC 196 (23 September
2011).
[11]
2017 (2) BCLR 182
(CC) at para 73.
[12]
Khumalo v Member of the Executive Council for Education: KwaZulu
Natal
[2013] ZACC 49
;
2014 (5) SA 579
(CC); 2014 (3) BCLR (CC) at
para 45.
[13]
1949 (3) SA 637 (A).
[14]
Amalgamated
supra
at p 649.
[15]
Amalgamated
supra
at p 653.
[16]
(561/2019)
[2020] ZASCA 88
(23 July 2020).
[17]
Para
6 of
National
Commissioner of Police
supra.
[18]
(314/11)
[2012] ZASCA 55
(30 March 2012).
[19]
Paragraphs
19.4 and 19.5 of Mathata’s founding affidavit.
[20]
Paragraph
10 of Mafoko’s founding affidavit.
[21]
Paragraphs
5.8 to 5.8.3 of the answering affidavit.
[22]
[2004] 3 All SA 1 (SCA).
[23]
Loc
cit
paragraphs
48 and 49.
[24]
The
advertisement of February 2022. The other advertisements followed
the same format and wording except for the exclusion of
the column
headed ‘CLOSING DATE FOR BID’.
[25]
(Case no 846/2021)
[2022] ZASCA 82
(03 June 2022).
[26]
Para
70.
[27]
Supra
at para 9.
[28]
Para
20.2 of Mathata’s founding affidavit.
[29]
Para
55 of Mafoko’s founding affidavit.
[30]
Loc
cit
para
59.
[31]
2014 (1) BCLR 1 (CC).
[32]
Para
25 of
Allpay
supra.
[33]
(1235/2019)
[2021] ZASCA 47
(19 April 2021) at para 18.
[34]
At
para 53.