Municipal Manager: Qaukeni and Others v F V General Trading CC (324/2008) [2009] ZASCA 66; 2010 (1) SA 356 (SCA); [2009] 4 All SA 231 (SCA) (29 May 2009)

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[2009] ZASCA 66
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Municipal Manager: Qaukeni and Others v F V General Trading CC (324/2008) [2009] ZASCA 66; 2010 (1) SA 356 (SCA); [2009] 4 All SA 231 (SCA) (29 May 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No:
324/2008
In the matter between
MUNICIPAL MANAGER:
QAUKENI
LOCAL
MUNICIPALITY
First
Appellant
QAUKENI
LOCAL MUNICIPALITY
Second
Appellant
and
F V
GENERAL TRADING CC
Respondent
Neutral
citation
:
QAUKENI
LOCAL MUNICIPALITY and F V GENERAL TRADING
(324/08)
[2009] ZASCA 66
(29 May 2009)
Coram: MPATI P, BRAND,
CLOETE, MAYA JJA and LEACH AJA
Heard: 14
May 2009
Delivered: 29
May 2009
Updated:
Summary:
Contract – municipal contract concluded in breach of prescribed
processes relating to procurement of municipal services
– no
difference in procument processes required for basic municipal
services - contract invalid – unnecessary for appellants
in present
proceedings to have sought a formal review of the award of the
contract – declaration of invalidity issued.
______________________________________________________________________
ORDER
On
appeal from: High Court, Mthatha (Greenland AJ sitting as court of
first instance).
The appeal
succeeds with costs. Such costs are to include the costs of two
counsel but shall exclude one half of the appellants’
costs of
preparing, perusing and lodging the appeal record.
The order in the court a
quo is set aside and replaced with the following:
‘
(a) The application
is dismissed with costs.
(b) The
counter-application is granted with costs and the contract
‘ZEV
2’ concluded on 25 June 2006 is declared to be null and void.
(c) The
costs shall include the costs of two counsel in each case.’
JUDGMENT
_________________________________________________________________
____
LEACH AJA
(MPATI P, BRAND, CLOETE and MAYA JJA concurring):
[1] This
appeal concerns the validity of a services procurement contract
concluded by the second appellant, the Qaukeni Local
Municipality,
without due compliance with various statutorily prescribed procedures
relating to municipal procurements. The second
appellant is
situated in that portion of the province of the Eastern Cape formerly
known as Transkei. Its principal towns are Lusikisiki
and Flagstaff.
In the circumstances more fully described below, it purported to
appoint the respondent as the refuse collector
for its municipal
area. The first appellant, the municipal manager Mr Fihlani, later
sought to terminate the contract with effect
from 30 June 2007. This
gave rise to the respondent instituting urgent proceedings in the
High Court, Mthatha seeking an order
declaring the termination to be
unlawful and directing the second appellant to ‘. . . continue
with the contract and to pay
the (respondent) for the work done in
terms thereof until the contract is lawfully terminated’. In their
absence, the court
issued a rule nisi calling upon the appellants to
show cause on the return day why such an order should not be granted.
The appellants
subsequently opposed the confirmation of the rule,
contending that the contract relied on by the respondent was invalid
and of
no force and effect; and in a counter application, they sought
a declaratory order to that effect.
[2] In due
course the matter came before Greenland AJ who held the contract to
be valid. He further held that the appellants had
not discharged the
onus of showing that they had justifiably terminated the contract
and, consequently, he granted the respondent’s
application and
dismissed the counter-application. A subsequent application for
leave to appeal was also dismissed but, with
leave granted by this
court, the appellants now appeal against the judgment in respect of
both the main and counter-applications.
[3] The
material facts relevant to the issues in the appeal are not in
dispute. During November 2005, the respondent submitted
a tender for
a contract offered by the second appellant to collect refuse in both
Lusikisiki and Flagstaff. Its tender was accepted
and gave rise to
the conclusion of an oral agreement under which the respondent
provided the required service during the period
November 2005 to 30
June 2006. The validity of this agreement has not been challenged and
I mention it merely as historical background
to the events that
followed.
[4] When
the oral agreement was nearing its end, the municipal manager at the
time, Mr Cezula, contacted the respondent and invited
it to submit a
copy of its budget for the twelve month period from July 2006 to June
2007. This the respondent did, but the ‘budget’
it presented in
fact appears to have been no more than an itemised quotation to
continue to provide its services at a monthly charge
of R351 350.
Without inviting any other persons to tender for such a contract, the
municipal council resolved to reappoint the
respondent as the second
appellant’s refuse collector against payment of the monthly sum
quoted in its ‘budget’ and tasked
Cezula to draw up a written
agreement for the respondent to sign. He did so, and presented it to
the respondent for its approval.
The respondent accepted the terms
offered, and the contract was duly signed by both parties at
Flagstaff on 25 June 2006 (a copy
thereof is included in the papers
as annexure ‘ZEV 2’).
[5] In
terms of this contract the appellant was appointed the sole refuse
collector for the second appellant for which it would
be paid
R351,350.00 per month, subject to a 20% annual escalation. Clause 2
further provided:
‘
.
. . to ensure uninterrupted delivery of the service in the best
interest of the local community, it is agreed that this contract
is
for the initial period of one (1) year starting from 01 July 2006 to
30 June 2007. However for the contract to end on 30
th
June 2007 the notice that the contract will terminate on 30
th
June 2007 must be given to the service provider six (6) months prior
to the date of termination otherwise the contract is automatically

renewed on the 30
th
of June 2007 for another period of one (1) year at the 20% escalation
on the fees charged for the service. In any case for the
contract
to lapse a notice of termination must be given six (6) months before
the end of the contract otherwise it will be automatically
renewed at
a 20% escalation on the fees charged for the service. . . . .
’
[6] The
respondent duly proceeded to render the service it had undertaken and
was paid the agreed monthly fee for doing so. As
no notice of
termination was given six months before 30 June 2007, the contract
appeared set to continue beyond that date by reason
of the automatic
renewal provision in clause 2. However, in correspondence which
passed between the parties commencing on 4 June
2007 the first
appellant, Cezula’s successor as municipal manager, informed the
respondent that the municipal council had resolved
that its services
were not required beyond 30 June 2007 and that, although it would be
at liberty to tender afresh when the second
appellant called for
tenders, the necessary statutory procedures would be strictly adhered
to in the future.
[7] The
letter of 4 June 2007 which conveyed this to the respondent was
printed on a letterhead bearing the name ‘Ingquza Hill
Local
Municipality’. This led to the respondent rushing to court to
launch legal proceedings which terminated in chaos. In an
application
issued out of the Mthatha High Court under case number 891/2007, it
sought an urgent order declaring ‘the intervention
of the Ingquza
Hill Local Municipality [to be] wrongful and unlawful in terminating
[the contract ‘ZEV 2’] without giving the
required notice’.
In a brief affidavit to oppose the grant of interim relief, the
appellants’ attorney drew attention to
the fact that the Ingquza
Hill Local Municipality had been established on 2 December 2000 by
Provincial Notice No. 107 of 2000
which, in turn, had been amended on
28 January 2002 by Provincial Notice No 5 of 2002 by the substitution
of the name ‘Ingquza
Hill’ with ‘Qaukeni’.
[8] In the
light of this amendment, the appellant’s attorney averred that the
Ingquza Hill Local Municipality neither continued
to exist nor was a
legal entity capable of suing or being sued. Of course that was
nonsensical as the municipality’s name had
merely been changed and
the second appellant, which had previously been known as the Ingquza
Hill Local Municipality, was thereafter
known by its current name.
But the respondent was so confused by all of this that it withdrew
its application on 5 July 2007. It
stated in the present proceedings
that it had done so as the second appellant (viz. the Qaukeni Local
Municipality) had had nothing
to do with the letter of 4 June 2007
which had come from the Ingquza Hill Local Municipality, that the
latter had no legal right
to interfere with the contractual
obligations between it and the second appellant, and that there had
therefore been no reason
to pursue the application in case 891/2007
as the second appellant had not sought to terminate the contract.
As the second appellant
and the Ingquza Hill Local Municipality were
the same entity, all of this is farcical.
[9] In any
event, the day after the withdrawal of the application in case
891/2007, the appellants wrote to the respondent (this
time on a
Qaukeni Municipality letterhead) referring to the letter of 4 June
2007 and re-iterating that such letter ‘. . . terminating
or
cancelling the contract still stands’ and that the use of an
incorrect letterhead had nothing to do with the identity of the

parties to the contract. The appellants therefore stated that they
persisted in the contents of the letter of 4 June 2007. As a
result,
on 10 July 2007 the respondent rushed back to the High Court and
instituted the urgent proceedings which eventually culminated
in the
decision in the court a quo which the appellants now seek to have
overturned.
[10] The
respondent contended, both in this court and in the court below, that
the written contract ‘ZEV 2’ had indeed been
valid and of full
force and effect and, that being so and as no notice of termination
had been given six months before the end
of June 2007, it had been
automatically renewed for a further year and Fihlani’s notice of
termination was of no force and effect.
On the other hand, the
appellants argued that as the agreement had been concluded in breach
of various prescribed statutory requirements
it had been void
ab
initio
and was thus incapable of being
validly extended. The cardinal point in this appeal is therefore
the validity of the agreement.
I turn to consider that issue.
[11] In
considering the validity or otherwise of the written contract ‘ZEV
2’, it is necessary to recall that s 217(1) of
the Constitution,
couched in peremptory terms, provides
inter
alia
that an organ of state in the local
sphere (such as a municipality) which contracts for goods and
services ‘
must
do so in accordance with a system which is fair, equitable,
competitive and cost-effective’ (my emphasis). This constitutional

imperative is echoed in both the Systems Act and the Municipal
Finance Management Act 56 of 2003 (‘the Financial Management Act’)

as will become apparent from what is set out below.
[12] The
provisions of these two Acts, both of which relate to the procurement
of ‘municipal services’ by municipalities are
interrelated and
somewhat convoluted. For present purposes it suffices to summarise
the applicable provisions relating to the procurement
of such
services from a non-municipal entity such as the respondent (defined
in s 1 of the Systems Act as an ‘external service
provider’) as
follows:
A
municipality is to have and implement a supply chain management
policy
1
which is ‘fair, equitable, transparent, competitive and
cost-effective’ and which complies with a regulatory framework

designed to have that effect which, inter alia, covers ‘competitive
bidding processes’, procedures for ‘the evaluation of
bids to
ensure the best value for money’ and measures to combat ‘fraud,
corruption, favouritism and unfair and irregular
practices in
municipal supply chain management’.
2
A
municipality may provide a municipal service by way of an ‘external
mechanism’ by concluding a service delivery agreement
with an
external service provider.
3
In the
event of a municipality deciding to do so it must select the
external service provider by a process which complies with
its
supply chain management policy, including a competitive bidding
process which allows all prospective service providers to
have equal
access to information relevant to the bidding process and which
minimises the possibility of fraud and corruption.
4
The process
by which an external service provider is selected must be ‘fair,
equitable, transparent cost-effective and competitive’.
5
The
regulatory framework governing a municipal supply chain management
policy
6
requires the policy to provide for the
procurement of goods and services above a transaction sum of R200
000 by way of ‘a competitive
bidding process’.
7
As the value
of the
present contract exceeds R4 million per annum, this regulation was
obviously intended to apply to such a contract.
Before
appointing the external service provider, the municipality must
establish ‘a programme for community consultation and
information
dissemination’ regarding the appointment and the contract to be
concluded with the service provider.
8
[13] These
statutory precepts therefore oblige a municipality concluding a
service delivery agreement with an external supplier
at a contract
amount in excess of R200 000 to act openly and in accordance with a
fair, equitable, competitive and cost-effective
system, and in terms
of a supply chain management policy designed to have that effect.
Unfortunately for the members of the local
community who live and
work within its municipal area, the second appellant appears to have
ignored its obligation to have and
implement a supply chain
management policy and both in this court and the court below the
matter was argued on the basis that no
such policy was in place. But
the respondent’s failure to implement a supply chain management
policy cannot relieve it of its
statutory obligation to act in a
manner as summarised above, and it would be untenable to suggest that
the respondent was therefore
not obliged to act openly, transparently
and without following a fair, equitable, competitive and
cost-effective process when contracting
with an external service
supplier to render a municipal service.
[14] It
was suggested by the respondent both in the court below and in the
heads of argument filed in this court that a failure
to comply with
these statutory precepts did not automatically visit a contract with
an external service supplier with nullity,
and that the court had a
discretion to enforce such a contract if the supplier would otherwise
be prejudiced. However counsel
who appeared for the respondent in
the appeal (who I should hasten to add had been briefed for the first
time in the matter at
the eleventh hour and had not been responsible
for the respondent’s heads of argument) was unable to advance this
argument with
any enthusiasm. His diffidence is understandable.
It
is not a question of a court being entitled to exercise a discretion
having regard to issues of fairness and prejudice. Rather,
the
question is one of legality.
[15]
Consequently, in a number of decisions this court has held contracts
concluded in similar circumstances without complying
with prescribed
competitive processes are invalid. In
Premier,
Free State and Others v Firechem Free State (Pty) Ltd
2000 (4) SA 413
(SCA) this court set aside a
contract concluded in secret in breach of provincial procurement
procedures, holding that such a contract
was ‘entirely subversive
of a credible tender procedure’ and that it would ‘deprive the
public of the benefit of an open
competitive process’.
9
Similarly in
Eastern Cape Provincial
Government v
Contractprops
25 (Pty) Ltd
2001
(4) SA 142
(SCA), which concerned the validity of two leases of
immovable property concluded between the respondent and a provincial
department
without the provincial tender board having arranged the
hiring of the premises as was required by statute, this court
concluded
that the leases were invalid. In giving the unanimous
judgment of this court, Marais JA, after outlining the applicable
statutory
tender requirements, said the following:
10
‘
As
to the mischief which the Act seeks to prevent, that too seems plain
enough. It is to eliminate patronage or worse in the awarding
of
contracts, to provide members of the public with opportunities to
tender to fulfil provincial needs, and to ensure the fair,
impartial,
and independent exercise of the power to award provincial contracts.
If contracts were permitted to be concluded without
any reference to
the tender board without any resultant sanction of invalidity, the
very mischief which the Act seeks to combat
could be perpetuated.
As
to the consequences of visiting such a transaction with invalidity,
they will not always be harsh and the potential countervailing

harshness of holding the province to a contract which burdens the
taxpayer to an extent which could have been avoided if the tender

board had not been ignored, cannot be disregarded. In short, the
consequences of visiting invalidity upon non-compliance are not
so
uniformly and one-sidedly harsh that the legislature cannot be
supposed to have intended invalidity to be the consequence. What
is
certain is that the consequence cannot vary from case to case. Such
transactions are either all invalid or all valid. Their
validity
cannot depend upon whether or not harshness is discernible in the
particular case.
’
[16] I
therefore have no difficulty in concluding that a procurement
contract for municipal services concluded in breach of the
provisions
dealt with above which are designed to ensure a transparent, cost
effective and competitive tendering process in the
public interest,
is invalid and will not be enforced.
[17] Faced
with this reality, counsel for the respondent argued, that while the
removal of refuse is a service rendered by a municipality,
it had not
been shown that the service which the respondent provided was a
‘municipal service’ as envisaged by the procurement
provisions in
the Systems and Financial Management Acts.
[18] The
respondent’s argument in this regard was based on the fact that
both Acts contain identical definitions of ‘basic
municipal
services’ and ‘municipal services’. The former is defined as a
‘municipal service that is necessary to ensure
an acceptable and
reasonable quality of life and, if not provided, would endanger
public health or safety or the environment’
while the latter is
defined as ‘a service that a municipality in terms of its powers
and functions provides or may provide to
or for the benefit of the
local community’ irrespective of whether it does so by way of an
internal or external mechanism or
whether or not fees, charges or
tariffs are levied in respect of such service. The respondent’s
argument is that as the statutory
procurement processes I have dealt
with spoke only of ‘municipal services’ and not of ‘basic
municipal services’, a municipality
was not bound to apply such
processes in the procurement of the latter – and as the refuse
removal service the respondent had
agreed to perform may well be such
a basic service, it had not been shown that the appellants had been
obliged to follow those
processes in awarding the contract to the
respondent.
[19] This
argument was raised for the first time when the appeal was called in
this court. As it is an issue of both fact and
law, it should
properly have been raised by the respondent in its papers in the
court below and for that reason alone the respondent
should not be
entitled to raise it now: see
Minister of Land
Affairs and Agriculture and Others v D & F Wevell Trust and
Others
2008 (2) SA 184
(SCA) para 43. But in
any event, as a matter of law it is ill-founded. Not only does s 217
of the Constitution not draw any difference
between “municipal
services” and “basic municipal services” in obliging a
municipality contracting for goods and service
to do so in a fair,
equitable, competitive and cost effective system, but there is no
reason to think that the legislature intended
basic municipal
services to be procured in any other manner to the detriment of the
public and the public purse. After all, the
resources of many
municipalities will be used in supplying only basic services as
defined. In addition, while s 73(1) of the
Systems Act obliges a
municipality to give effect to the provisions of the Constitution, to
give priority to the basic needs of
the local community and to ensure
access to at least the minimum level of basic municipal services, s
73(2) provides for municipal
services to be equitable and accessible,
provided in a manner that is conducive to a prudent, economic,
efficient and effective
use of available resources, be financially
sustainable and be regularly reviewed. No distinction is drawn in
sub-section (2) between
“basic municipal services” and “municipal
services” and, clearly, “basic municipal services” are nothing
more than
“municipal services” which are provided to ensure an
acceptable and reasonable quality of life – as explained in the
definition.
[20]
Accordingly the legislature clearly did not intend to draw any
distinction between the processes required for the provision
of
municipal services and those for municipal services which could be
regarded as “basic”. The distinction drawn in the definition
is
only to ensure that a municipality provides at least basic municipal
services. Consequently, even if the contract presently
in dispute
amounted to the provision of basic municipal services, it was
therefore still necessary for the prescribed procurement
procedures
to be followed.
[21] The
refuse collection service the respondent undertook to provide was
clearly a municipal service as envisaged by the Systems
Act and the
Financial Management Act, and the second appellant was therefore
obliged to follow the procurement processes they prescribed.
It did
not do so in awarding the contract to the respondent. Instead the
appellants decided on the terms of the contract, including
payment of
the amount the respondent had quoted to provide the required
services, and then made an offer to the respondent to contract
with
it on those terms. All this was done without any transparent,
competitive, cost-effective or bidding process taking place
and
without any programme involving community consultation or information
dissemination being followed. Clearly as this infringed
the
prescribed procedures I have mentioned, the contract was invalid:
with the concomitant result that it could not be validly
extended and
the second appellant was not bound thereby beyond the end of June
2007.
[22]
Despite this, the respondent raised, both in the court
a
quo
and in the heads of argument, what
effectively amounts to an objection in
limine
based on the contention that it was an innocent party who had done
nothing wrong but had merely accepted the appellants’ offer
whereas
the appellants had failed to follow the municipal procedures that
bound them. The respondent therefore argued that the
appellants were
not entitled to bring proceedings that would result in them gaining
an advantage from their own unlawful conduct
to the prejudice of the
respondent.
[23] This
argument cannot be upheld. This court has on several occasions stated
that, depending on the legislation involved and
the nature and
functions of the body concerned, a public body may not only be
entitled but also duty bound to approach a court
to set aside its own
irregular administrative act: see
Pepcor
Retirement Fund v Financial Services Board
2003
(6) SA 38
(SCA) para 10. Consequently, in
Rajah
& Rajah (Pty) Ltd and Others v Ventersdorp Municipality and
Others
1961 (A) SA 402 (A) at 407D-E it
held that the interest a municipality had to act on behalf of the
public entitled it to approach
a court to have its own act in
granting a certificate to obtain a trading licence declared a
nullity. Similarly, in
Transair (Pty) Ltd v
National Transport Commission and Another
1977
(3) SA 784
(A) at 792H-793G this court held that an administrative
body which held wide powers of supervision over air services to be
exercised
in the public interest, had the necessary
locus
standi
to ask a court to set aside a licence
it had irregularly issued. Finally,
in
Premier,
Free State and Others v Firechem Free State (Pty) Ltd
,
supra
,
Schutz
JA, in giving the unanimous judgment of this court, concluded that
‘the
province [the appellant] was under a duty
not to submit itself to an unlawful contract and [was] entitled,
indeed obliged, to ignore
the delivery contract and to resist [ the
respondent’s] attempts at enforcement’.
11
[24] In
the present case, the contract in issue was concluded by a body
created to serve the citizens of the country who live
and work within
its municipal area, and which under s 73 of the Systems Act is
obliged to see to the needs of the local community
and to provide
municipal services in a manner ‘conducive to . . . the prudent,
economic, efficient and effective use of available
resources’. The
contract in question was concluded in order to provide a service to
the second appellant’s local community
and, of course, payments due
thereunder were to be met by the use of public funds. In these
circumstances, I have no hesitation
in concluding that the appellants
were entitled
to raise
the alleged invalidity of the contract and to seek to have it set
aside.
[25] This
brings me to another issue raised by the respondent for the first
time during the appeal. The thrust of the argument of
respondent’s
counsel was this: the award of a municipal contract of the nature of
that in the present case constituted ‘administrative
action’ as
envisaged by the Promotion of Administrative Justice Act 3 of 2000
(commonly known as ‘PAJA’); the appellants
should have brought
review proceedings under PAJA to set aside such action; the
appellants failed to do so and their counter-application
could not be
regarded as such, not only as it was never intended to be a review
but as certain facts relevant to a review had
not been canvassed;
thus not only had the appellants misconceived their defence to the
main application but as the award of the
contract to the respondent
could not be reviewed on the present papers, the contract had to be
regarded as binding; consequently
the appellants had no defence to
the relief that had been sought against them and their
counter-application had also to be dismissed.
[26] While
I accept that the award of a municipal service amounts to
administrative action that may be reviewed by an interested
third
party under PAJA, it may not be necessary to proceed by review when a
municipality seeks to avoid a contract it has concluded
in respect of
which no other party has an interest. But it is unnecessary to reach
any final conclusion in that regard. If the
second respondent’s
procurement of municipal services through its contract with the
respondent was unlawful, it is invalid and
this is a case in which
the appellants were duty bound not to submit to an unlawful contract
but to oppose the respondent’s attempt
to enforce it.
12
This it did by way of its opposition to the main application and by
seeking a declaration of unlawfulness in the counter-application.
In
doing so it raised the question of the legality of the contract
fairly and squarely, just as it would have done in a formal
review.
In these circumstances, substance must triumph over form. And while
my observations should not be construed as a finding
that a review of
the award of the contract to the respondent could not have been
brought by an interested party, the appellants’
failure to bring
formal review proceedings under PAJA is no reason to deny them
relief.
[27] In
the light of what I have set out above, the respondent’s
application in the court below should have been dismissed and
the
appellants’ counter-application upheld. The appeal must accordingly
succeed.
[28] That
brings me to the question of costs. Counsel for the respondent drew
attention to the appellants’ failure at the
outset of the dispute
to draw the respondent’s attention to the precise statutory
provisions which had been breached. In the
light of this failure, and
the allegation that the respondent was the innocent victim of the
appellants’ failure to comply with
the prescribed procedures, he
submitted it would be equitable for each party to pay its own costs
of all stages, including the
costs of the appeal. In the
alternative, he submitted that the respondent should only bear costs
with effect from the stage the
appellants had pointed out the precise
respects in which the contact breached the prescribed statutory
procedures.
[29]
However, as appears from the letter of 4 June 2007 the respondent was
alerted at the outset that the contract had not been
concluded in
compliance with the necessary statutory requirements and while the
appellants did not spell out in chapter and verse
the provisions upon
which they relied for their contention that the contract was invalid,
I do not think it was incumbent upon
them to do so. Rather it was
for the respondent, alerted to the suggestion that statutory
procedures had not been complied with,
to fully investigate the
validity of the contract before rushing into court to enforce it.
In any event, even when the appellants
did explain why they
maintained that the contract was invalid, the respondent persisted in
contending otherwise, up to and including
the appeal, and there is
therefore no reason to think its attitude would have been any
different had the appellants fully explained
their case before
proceedings commenced. There therefore seems to me to be no reason
why the costs, both in the court below and
in this court, should not
follow the event.
[30] There
is, however, another issue relating to costs that needs to be
considered. The record in this appeal is replete with
unnecessary
documents, and contains both the heads of argument filed during
previous proceedings as well as a transcription of
the lengthy
argument of counsel in the court below. None of this ought to have
been included in the record and the fact that it
has, has resulted in
at least half of the record being wholly unnecessary. This not only
inflates the high costs of litigation
but also leads to a complete
waste of valuable judicial time and inconvenience to members of this
court.
[31] This
court has previously expressed its displeasure at records that
include unnecessary documents of this kind
13
and has, where appropriate, ordered costs to be paid by attorneys
de
bonis propriis
14
or disallowed the appellant’s attorney’s
costs of perusing the record
15
.
In the present matter, the exigencies of the case will be met by
allowing the appellants only one half of their costs of preparing,

lodging and perusing the record.
[32] In
the result, the following order is made:
The appeal
succeeds with costs. Such costs are to include the costs of two
counsel but shall exclude one half of the appellants’
costs of
preparing, perusing and lodging the appeal record.
The order in the court a
quo is set aside and replaced with the following:
‘
(a) The
application is dismissed with costs.
(b) The
counter-application is granted with costs and the contract
‘ZEV
2’ concluded on 25 June 2006 is declared to be null and void.
(c) The
costs shall include the costs of two counsel in each case’.
________________________
L
E LEACH
ACTING
JUDGE OF APPEAL
APPEARANCES:
FOR
APP
ELLANTS: M
R MADLANGA SC and R M DILIZO
INSTRUCTED
BY:
B.B.
LINYANA ATTORNEYS,
c/o
V.V. MSINDO & ASSOCIATES, MTHATHA
PONOANE
ATTORNEYS, BLOEMFONTEIN
FOR
RESPONDENT:
M
H WESSELS SC
INSTRUCTED
BY:
MDUMA
MJOBO ATTORNEYS,
c/o FIKILE NTAYIYA &
ASSOCIATES, MTHATHA
JOE SCHOEMAN
ATTORNEYS, BLOEMFONTEIN
1
Section 111 of the Finance Management Act.
2
Section 112(1)(f),(h)(ii) and(m)(i).
3
Section 76(b)(v) of the Systems Act.
4
Section 80(1)(a) as read with s 83 of the Systems
Act.
5
Section 83(3) of the Systems Act.
6
Promulgated in Government Notice R868 of 30 May 2005.
7
Regulation 12(1)(d)(i).
8
Section 80(2) of the Systems Act.
9
At [30].
10
At [8] and [9].
11
Supra at [36].
12
Compare
Premier,
Free State and Others v Firechem Free State (Pty) Ltd supra,
at
[36].
13
Eg
Neon And Cold Cathode Illuminations (Pty) Ltd v Ephron
1978 (1) SA 463
(A) at 469D-G.
14
Eg
Absa Bank v Davidson
2000 (1) SA 1117
(SCA) at [28].
15
Eg
Venter v Bophuthatswana Transport Holding (Edms) Bpk
[1997] ZASCA 16
;
1997
(3) SA 374
(SCA) at 390G-391B.