RMR Commodity Enterprise CC t/a Krass Blankets v Chairman of the Bid Adjudication committee and Others (092/08) [2009] ZASCA 2; [2009] 3 All SA 41 (SCA) (20 February 2009)

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RMR Commodity Enterprise CC t/a Krass Blankets v Chairman of the Bid Adjudication committee and Others (092/08) [2009] ZASCA 2; [2009] 3 All SA 41 (SCA) (20 February 2009)

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
JUDGMENT
Case number: 092/08
No precedential significance
In the matter between:
RMR COMMODITY ENTERPRISE CC
t/a KRASS BLANKETS APPELLANT
and
THE CHAIRMAN OF THE BID
ADJUDICATION COMMITTEE FIRST RESPONDENT
AFRICHOICE TENDERS CC SECOND RESPONDENT
THE MINISTER OF FINANCE THIRD RESPONDENT
THE MINISTER OF CORRECTIONAL
SERVICES FOURTH RESPONDENT
THE MINISTER OF SAFETY AND
SECURITY FIFTH RESPONDENT
THE GOVERNMENT OF THE
REPUBLIC OF SOUTH AFRICA SIXTH RESPONDENT
Neutral citation:
RMR
Commodity Enterprise v The Chairman: Bid Adjudication Committee
(092/08)
[2009] ZASCA 2
(20 February
2009)
CORAM: Harms DP, Brand
et
Lewis JJA
HEARD: 20 February 2009
DELIVERED: 20 February 2009
CORRECTED:
SUMMARY:
Review
of tender award – contract period of tender lapsed prior to hearing
of appeal – no substantial points of law or matters
of substance
raised – appeal dismissed by reason of mootness under s 21 A(1) and
(3) of the Supreme Court Act 59 of 1959.
ORDER
On appeal from
: High Court,
Durban
(Hugo J sitting as court of first instance)
1. The appeal dismissed with costs, including the costs
of two counsel where employed.
Harms DP, Lewis JA concurred.
JUDGMENT
BRAND JA
[1] During October 2006 the National Treasury invited
tenders for the supply of over 183 000 blankets to the
Department of
Correctional Services and the South African Police
Service. Among those who submitted tenders were the appellant ('RMR')
and the
second respondent, Africhoice Tenders CC ('Africhoice'). The
tenders were submitted to a bid evaluation committee ('the Evaluation

Committee') which was obliged to make recommendations to a committee
under the chairmanship of the first respondent ('the Adjudication

Committee') on the award of the tender. Both these committees were
established under the auspices of the National Treasury, pursuant
to
the provisions of the
Public Finance Management Act 1 of 1999
and the
regulations promulgated under that Act.
[2] RMR tendered R108.30 per blanket, which was R3.65
per blanket less than the price tendered by Africhoice. Moreover,
RMR's bid
also obtained the highest number of preference points for
equity ownership by historically disadvantaged individuals, as
envisaged
by the provisions of the
Preferential Procurement Policy
Framework Act 5 of 2000
. In accordance with
s 2(1)(f)
of the
Act, clause 2.1(b) of the tender invitation provided that:
'a contract may, on reasonable
and justifiable grounds, be awarded to a bid that did not score the
highest number of points.
'
Relying on this exception to the rule, the Evaluation
Committee recommended that the contract be awarded to Africhoice and
not to
RMR. The Adjudication Committee decided to endorse this
recommendation. On 12 July 2007 the National Treasury thus published
on
its website that the contract had been awarded to Africhoice. This
was relatively short notice, since the contract period was destined

to commence on 1 August 2007 and to endure until 31 March 2008.
[3] When RMR heard of these developments, it launched an
urgent application in the Durban High Court against the first two
respondents
as well as the various Government Departments involved.
The main relief sought in the application was for an order that the
Adjudication
Committee's decision to award the tender to Africhoice
be reviewed and set aside. As an adjunct to the main relief, RMR
sought
an interim interdict to the effect that, pending the
finalisation of the review application, the Department of
Correctional Services
and the South African Police Service be
restrained from placing any orders for blankets under the contract
with Africhoice. In
motivating the application for the interim
interdict, RMR pointed out that the contract period was due to
terminate on 30 March
2008 and that the setting aside of the award
after that date would be of no consequence.
[4] On 17 August 2007 Rowan AJ granted the interim
interdict sought, pending the outcome of the review application,
which he scheduled
to be heard by himself on 2 October 2007. As it
happened, however, and for reasons no longer relevant, the matter was
heard in
November 2007 by Hugo J who dismissed the review application
with costs. This, of course, also spelt the end of the interim
interdict.
The appeal against that order is with the leave of the
court a quo.
[5] Only four of the respondents opposed the appeal. The
others abided the decision of this court. The first, third and fourth
respondents,
on the one hand, and the second respondent, on the
other, were represented by different counsel. Yet, they all raised
the preliminary
issue that the appeal is moot in that its outcome
will have no practical impact on the parties, or, for that matter, on
anyone
else.
[6] The factual basis for the argument is, of course,
that the period of the contract awarded to Africhoice terminated on
31 March
2008. As rightly pointed out by the respondents, the relief
claimed by the appellant in the court a quo was that the award of the

contract to Africhoice to be set aside and that it be awarded to the
appellant. But since the contract period has come and gone,
so the
respondents argued, an award of that contract would be of no use to
the appellant or anybody else.
[7] The legal basis for the respondents' argument is to
be found in
s 21
A(1) and (3) of the Supreme Court Act 59 of
1959. It provides:
'(1) When at the hearing of any
civil appeal to the [Supreme Court of Appeal] or any Provincial or
Local Division of the [High]
Court the issues are of such a nature
that the judgment or order sought will have no practical effect or
result, the appeal may
be dismissed on this ground alone.
. . .
(3) Save under exceptional
circumstances, the question whether the judgment or order would have
no practical effect or result, is
to be determined without reference
to consideration of costs.'
[8] RMR's first answer was that a judgment in this
appeal would indeed have a practical effect. In motivating this
answer RMR referred
to its unsuccessful tenders for the supply of
blankets to the State in three preceding years and its pending
litigation with the
National Treasury arising out of these
unsuccessful tenders. In this light, so RMR contended, a definitive
decision by this court
on the matters in issue, would serve to
properly inform and guide the Bid Adjudication Committee and the
officials of the National
Treasury in their handling of the
appellant's future tenders, and thus avoid even further litigation in
years to come.
[9] The problem I have with this argument is that
although it sounds correct in the abstract, it is devoid of any
factual foundation.
The issues in the appeal are inextricably bound
to the review grounds relied upon by the appellant. Most prominent
amongst these
is an alleged failure by the Adjudication Committee to
comply with the
audi alteram partem
principle ('the
audi
principle'). However, as has been pointed out time and again by this
court and others, there is no single set of principles for
giving
effect to the rules of natural justice, including the
audi
principle, which will apply to all
investigations, enquiries and other exercises of administrative
power, regardless of their nature.
On the contrary, courts have
recognised and restated the need for flexibility in the application
of the principles of fairness
in a wide variety of different
situations. In short, the question whether or not the requirements of
the
audi
principle had
been complied with in this case, is therefore entirely dependent on
the facts.
[10] A further ground of review relied upon by RMR is
that the Adjudication Committee erred when it decided that a letter
by the
Department of Trade and Industry included in the appellant's
tender in compliance with clause 13 of the tender conditions, did not

in fact constitute compliance with this clause. Broadly stated, RMR's
contention is that this decision by the Adjudication Committee

resulted from a wrong interpretation of either clause 13 or the
contents of the DTI letter or both. It is unnecessary to analyse
the
argument in any detail. What strikes me as relevant for present
purposes is that both the clause and the letter are peculiar
to this
tender. What is more, the clause and the letter stand to be
interpreted against the background of the facts and the dispute
in
this case which will most probably be different from the next case.
[11] RMR's further ground of review relies on the
allegation that the Adjudication Committee should not have considered
the tender
by Africhoice, because it did not comply with the tender
conditions. But, as was pointed out in
Metro
Projects CC v Klerksdorp Local Municipality
2004
(1) SA 16
(SCA) para 15, there are degrees of compliance with any
standard and it is notoriously difficult to assess whether less than
perfect
compliance falls on one side or the other of the validity
divide. Whether or not there can in any particular case be said to
have
been compliance with the specifications and conditions of a
tender, must necessarily depend on the facts of that case.
[12] As its final review ground RMR relied on what it
contended to be a reasonable suspicion that the Adjudication
Committee was
biased against it. In support of this contention it
relied on the way in which the Adjudication Committee conducted
itself during
both the tender proceedings and the litigation that
followed. From the very nature of the argument it is therefore clear
that a
decision on this issue will again be inextricably bound to the
facts of this case. In the result there is, in my view, neither any

matter of law or general principle, nor any matter of great public
importance that compels this court to embark upon determination
of a
dispute that has become of academic interest only.
[13] An alternative argument raised by RMR was that,
even if the issues on the merits were held to be moot, they should be
decided
in order to determine the question of costs. Support for this
argument was sought in the judgment of this court in
Chairperson,
Standing Tender Committee v J F E Sapela Electronics (Pty) Ltd
2008
(2) SA 638
(SCA). But in my view that was not a case where this court
decided academic disputes in order to determine the question of
costs.
On the contrary, what was held in that case was that although
the decisions of the administrative authority were fatally flawed

(paras 15 and 19) and although the setting aside of those decisions
would have practical consequences (para 24), the practical

consequences were so untenable (para 27) that the court should, in
the exercise of its discretion, allow the invalid administrative

decisions to stand (paras 28 and 29). But, in the circumstances, so
the court held, there was no reason why the administrative
authority
should not bear the costs of litigation. In a sense, the situation in
J F E Sapela
was
therefore the converse of what happened in this case, where the
setting aside of the administrative decision would have no practical

consequences and where the only outstanding issues relate to costs.
[14] Lastly, RMR sought to demonstrate on the record
that whereas it had done everything in its power to obtain a final
decision
in the court a quo, the respondents' conduct was patently
calculated to cause delay, and that for that reason it was entitled
to
costs. I find it unnecessary to enter into this debate. Even if
the appellant were right, I believe that these considerations would,

in any event, be insufficient to constitute 'exceptional
circumstances' as contemplated by sub-section 21 A(3) so as to
warrant
the entertainment of the appeal with the sole purpose of
determining issues of costs.
[15] For these reasons the appeal is dismissed with
costs, including the costs of two counsel where employed.
………………
..
F D J BRAND
JUDGE OF APPEAL
Concur:
HARMS DP
LEWIS JA