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[2021] ZAGPPHC 58
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Minister of Employment and Labour and Others v Nexus Forensic Services (Pty) Ltd (74499/2019) [2021] ZAGPPHC 58 (1 February 2021)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE: NO.
(2) OF
INTEREST TO OTHER JUDGES: NO.
(3) REVISED.
DATE
1 FEBRUARY 202
1
CASE
NO: 74499/2019
In
the matter between:
MINISTER
OF EMPLOYMENT AND LABOUR
First
Applicant
COMMISSIONER
OF THE COMPENSATION FUND
Second
Applicant
DIRECTOR:
SUPPLY CHAIN MANAGEMENT:
THE
COMPENSATION FUND
Third
Applicant
MINISTER
OF
FINANCE
Fourth
Applicant
SAB
& T CHARTERED ACCOUNTATNS INC
T/A
NEXIA SAB & T
Fifth
Applicant
DIRECTOR
GENERAL: THE DEPARTMENT OF
EMPLOYMENT
AND LABOUR
Sixth
Applicant
and
NEXUS
FORENSIC SERVICES (PTY) LTD
Respondent
J
U D G M E N T (Leave to Appeal)
This
matter has been heard in terms of the Directives of the Judge
President of this Division dated
25
March 2020, 24 April 2020 and 11 May
2020.
The judgment and order are accordingly published and distributed
electronically.
DAVIS,
J
[1]
Introduction
On 13 November 2020, this court reviewed and set aside
the award of a tender for the rendering of forensic services to the
Compensation
Fund. The basis for the judgment was that the
award had been made after the expiry of the tender validity period.
The
initial respondents, being the Minister of Employment and Labour
(the Minister), the Commissioner of the Compensation Fund, the
Director: Supply Chain Management: The Compensation Fund and the
director-General of the department of Employment and Labour (the
DG)
all seek leave to appeal the judgment.
[2]
The relevant
chronology
2.1
After an extension, the
bids closed on 6 August 2018. No validity for the bids was
determined or prescribed in any of the
bid documents.
2.2
On 31 October 2018, at
the request of the Supply Chain Manager of the Compensation Fund, the
bidders agreed to the extension of
the validity of their bids to 7
February 2019.
2.3
On 19 October 2018 the
bid Evaluation Committee (BEC) made its recommendation to the Bid
Adjudication Committee (BAC).
2.4
On 14 December 2018 the
BAC approved the BEC’s recommendations albeit that the approval
was in the convoluted fashion as quoted
from the BAC minutes in
paragraph 2.9 of the initial judgment. These minutes were
signed on 26 February 2019.
2.5
On 21 March 2019 the DG
approved the award of the tender to a company that was cited as the
fifth respondent in the review application
and addressed a letter to
that effect to the said company.
2.6
Based on the aforesaid
summary of the findings in the initial judgment, this court concluded
as follows in paragraph 3.10 thereof:
“
I therefore find that, upon
the expiry of the extended validity period to which the remaining
bidders had agreed, the tender process
had unsuccessfully been
completed. The subsequent “award” of the tender on
31 March 2019 by the DG and the contract
signed thereafter and all
subsequent steps, including the publication and implementation of the
award, are unlawful and invalid
”.
[3]
The grounds upon
which leave to appeal is sought
3.1
The principal ground
upon which leave to appeal is sought, is based on the premises that
the BAC took the decision to award the
tender and not the DG.
3.2
Adv Matebese SC who
appeared with his learned junior for the applicants in the
application for leave to appeal readily (and, in
my view, correctly)
conceded that the DG as accounting officer is the one who takes
decisions on the awards of tenders (and actually
awards them).
This “default position” accords with the terms of the bid
documents which expressly reserved the
right of the Department
(represented by the DG) to make an award, make no award or even award
the bid to the second highest bidder.
3.3
Adv Matebese SC’s
argument in that, is the absence of evidence of whether the DG had
delegated his decision-making authority
to the BAC and similar
absence of evidence indicating whether Departmental policies exist
which accord such decision-making authority
to the BAC (in similar
fashion as in some local authorities such as the those which featured
in the cases quoted (for different
reasons) in paragraph 3.1 of the
judgment), the review should have failed. I have difficulty in
following the logic of this
argument: if there is no evidence of a
delegation, the default position would remain intact.
Similarly, in the absence of
a policy (or proof of the existence of
such a delegating policy), the default position would remain
undisturbed, i.e the DG retained
his or her decision-making
authority.
3.4
As an alternative, this
court was criticized for having allowed the argument about the tender
validity periods to proceed at all,
since it had been raised in the
replying affidavits for the first time. In my view a court
would fail in its duty if it were
to allow an invalid tender to
stand, involving organs of state and huge public expenditure, simply
because of a procedural aspect.
Furthermore, one would have
expected the Minister or the DG, should a delegation or policy
document have indicated an abdication
of the DG’s
decision-making authority to the BAC, to simply produce such a
document and to ask that it be allowed by way
of a duplicating
affidavit or a response to this point raised in reply. Had such
documents existed, this would have been
the proper response and not a
simple procedural argument. In any event, the validity aspect
had fully been argued when the
matter was heard, without any attempt
to postpone the matter or supplement the papers. I am still
satisfied that the entertainment
of this aspect had been a proper
exercise of this court’s discretion.
[4]
Conclusions
4.1
A court of appeal will
not interfere with the exercise of discretion by a court a quo if
unless such discretion was exercised arbitrarily,
capriciously, in a
biased fashion, based on a wrong principle or where the court “did
not act for substantial reasons”.
See:
Ex
parte Neethling
1951 (4) SA 331
(A) and the numerous annotation thereof, all
confirming these same principles. The applicants argue that the
discretion was
exercised arbitrarily and contrary to the “trite
principles of the law”. As set out in paragraph [3]
above, this
was not the case. I therefore find no reasonable
prospect of success that a court of appeal would find that the issue
of
substantive invalidity of the award of a tender after the expiry
of the validity period of the bids, should not have been entertained.
4.2
On the merits, it is
clear that there was no evidence disturbing the “default
position” referred to above. The
consequence hereof is
that the DG had awarded the tender beyond its validity period.
On the facts of this case, I find no
reasonable prospects of success
on appeal against this finding.
4.3
Lastly, I point out
that the respondent, being the initial applicant, did not formally
oppose the application for leave to appeal,
due to financial
constraints. It was therefore only represented during the
application for leave to appeal by an attorney
with a watching
brief. I therefore find it unnecessary to make a costs order in
respect of this application.
[5]
Order:
The
application for leave to appeal is refused.
N
DAVIS
Judge
of the High Court
Gauteng Division, Pretoria
Date of
Hearing: 28 January 2021
Judgment
delivered: 1 February 2021
APPEARANCES:
For
the Applicants:
Adv.
Z Z
Matebese SC together Adv. A Gxogxa
Attorney
for Applicants:
The State Attorneys
,
Pretoria
For
the Respondent:
Attorney on watching brief
Attorney
for Respondent
:
VZLR
Attorneys
, Pretoria