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[2021] ZAMPMBHC 40
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Meridian Hygiene (PTY) Ltd v Head of the Department of Health, Mpumalanga and Another (3411/2020) [2021] ZAMPMBHC 40 (7 September 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
MPUMALANGA
DIVISION (MAIN SEAT)
Case
Number: 3411/2020
REPORTABLE:
/ NO
OF
INTEREST TO OTHER JUDGES: /NO
REVISED.
7
September 2021
In
the matter between:
MERIDIAN
HYGIENE (PTY) LTD
Plaintiff/Applicant
and
THE
HEAD OF THE DEPARTMENT OF HEALTH,
First Defendant/Respondent
MPUMALANGA
THE
MEMBER OF THE EXECUTIVE COUNCIL
Second Defendant/Respondent
FOR
THE DEPARTMENT OF HEALTH,
MPUMALANGA
This
judgment will be delivered over the Zoom platform, distributed to the
parties in electronic form and published on the SAFLII
website.
JUDGMENT
Roelofse
AJ:
[1]
The plaintiff/applicant (“
Meridian”
)
applies for summary judgment against the first and second
defendants/respondents (“
the
department”
) on the strength of a
verbal agreement allegedly entered between Meridian and the
department in terms of which Meridian undertook
to, during the period
April 2020 to June 2020, sell and deliver goods to the department
(“
the agreement”
).
Meridian pleads that it has performed all its obligations arising
from the agreement and that the department is indebted to Meridian
in
the amount R 41 500 000-00 and that despite demand, the department
has failed to pay.
[2]
The department delivered a plea.
Save for admitting that the court has
jurisdiction, the department neither admits nor denies the further
allegations in Meridian's
particulars of claim.
[3]
In its affidavit in support of the
summary judgment application, Meridian alleges that it undertook to
sell and deliver household
sanitizer stored in 20-liter buckets
including transport, labour and personal protective equipment for all
volunteers who distributed
the sanitizer.
Meridian
alleges that the main aim of the campaign was two distribute buckets
of sanitizer to residents in rural communities to
help curb the
spread of the COVID-19 virus. The buckets in which the sanitizer was
distributed, according to Meridian, were specially
designed to
encompass directions and/or instructions for use in writing in
various official languages. Meridian alleges that by
the end of May
2020 goods to the value of R 41 500 000-00 had been sold and
delivered to the department and an invoice was issued.
In paragraph
27 of the affidavit in support of the summary judgment application,
Meridian says as follows:
“
N
otwithstanding
the Applicant's [Meridian’s] numerous attempts at engaging with
various role players with whom it dealt throughout
the duration of
the agreement, the respondents [the department] wanted nothing to do
with the applicant.”
[4]
In respect of the department's plea,
Meridian states that the department has not set out a
bona
fide
defense and that, should the
matter go to trial as the papers stand, the respondents would not be
able to lead evidence on any
issue. Therefore, the department’s
plea did not raise any issue for trial.
[5]
In paragraphs 7 and 17 of the
department’s answering affidavit, the department’s acting
director legal services says
the following:
“
P
ublic
procurement is often linked to allegations of impropriety and
irregularity. For that reason public procurement is strictly
regulated by a framework set out in the Constitution of the Republic
of South Africa, the
Public Finance Management Act, 1999
, the
Treasury Regulations and treasury notes…..”
“
I
am advised and submit that in terms of the above-regulatory framework
the Respondents and or the Department would never conclude
and enter
into an oral agreement. If such an agreement is concluded it would be
void at a [sic] void ab initio because the agreement
would have
concluded in contravention of the Regulatory Framework.”
[6]
In addition, the department raises a
point of law that Meridian has not complied with the requirements for
the granting of summary
judgment. The department alleges that
meridian's claim cannot be classified as a liquidated amount because
the terms and conditions
of the alleged oral agreement were not set
out in the particulars of claim including the amount of the alleged
appointment.
Evaluation
[7
]
It
is trite that public procurement concluded in breach of the
prescribed processes relating to procurement of public goods and
services are invalid.
[1]
[8]
The
department places both the existence and the validity of the alleged
verbal agreement in dispute. There is therefore a real
triable issue
being the existence and the validity of the agreement. I echo what
was set out in
Maharaj
v Barclays National Bank Ltd
[2]
when I evaluate the department’s answering affidavit against
the particulars of claim:
“
Viewing
the affidavit as a whole, in the context of the claim set forth in
plaintiff’s summons, I am of the view that it does
appear to
raise a bona fide defence and that it has disclosed this defence and
the material facts upon which it is founded with
just - and only just
- sufficient particularity and completeness in order to comply with
Rule 32 (3) (b).”
[9]
In
his argument, Mr. Ferreire SC, who appeared for Meridian, relied upon
the dictum in
Oudekraal
Estates (Pty) Ltd v The City of Cape Town and Others
[3]
for the principle that an administrative act stands until it is set
aside.
[10]
This
is what the Constitutional Court in
Department
of Transport and Others v Tasima (Pty) Limited
[4]
said about Oudekraal:
“
[87]
The Supreme Court of Appeal’s reliance on Oudekraal here was
mistaken. Nowhere does Oudekraal say that an administrative
action
performed in violation of the Constitution should be treated as valid
until set aside. Much worse, that its unlawfulness
does not matter as
long as it is not set aside and that a delay in challenging it
validates the action concerned. As mentioned,
this proposition turns
the supremacy of the Constitution principle on its head.
[88] On the contrary
Oudekraal lays down a narrower principle that applies in specific
circumstances only. That principle draws
its force from the
distinction between what exists in law and what exists in fact. An
invalid administrative act that does not
exist in law cannot itself
have legal force and effect. Yet the act may still exist in fact, for
example an administrative act
performed without legal power. It
exists in fact until set aside on review. However, since the act does
not exist in law, it can
have no binding effect.”
[11]
What will have to be eventually
decided in the action is both fact and law – does the alleged
agreement exist and, if it does,
does it comply with the law.
[12]
In granting or refusing summary
judgment, the court exercises a discretion.
“
It
is indeed trite that a court has a discretion as to whether to grant
or refuse an application for summary judgment. Although
Breitenbach v
Fiat SA (Edms) Bpk has made it plain that a court should exercise a
discretion against granting such an order where
it appears that there
exists ‘a reasonable possibility that an injustice may be done
if summary judgment is granted’,
the context in which that was
said indicates that this precaution applies in situations where the
court is not persuaded that the
plaintiff has an unanswerable
case.”
[5]
[13]
In my view, if the department at
trial succeeds in establishing that there was indeed a breach of
prescribed processes relating
to the alleged procurement from
Meridian, Meridian would not be entitled to payment in terms of the
verbal agreement. Its remedy,
if the goods and services were indeed
rendered lies somewhere else, possibly in a claim for enrichment. I
therefore exercise my
discretion in favour of the department.
Costs
[14]
I can think of no reason why costs
should not follow the result.
[15]
In the premises, the following order
is made:
(a)
Summary judgment is refused;
(b)
The first and second defendants are granted
leave to defend the action;
(c)
The applicant shall pay the respondents’
costs.
Roelofse
AJ
Acting
Judge of the High Court
DATE
OF HEARING:
3 September 2021
DATE
OF JUDGMENT: 7
September 2021
APPEARANCES
FOR
THE APPLICANT:
Adv E Ferreira SC
INSTRUCTED
BY:
Bouwer
Cardona Inc.
FOR
THE RESPONDENTS: Adv L Zwane
INSTRUCTED
BY:
Makwakwa
M.R. Attorneys Inc.
[1]
See:
Municipal Manager: Qaukeni and Others v F V General Trading CC
2010
(1) SA 356
(SCA);
[2009] 4 All SA 231
(SCA).
[2]
1976
(1) SA 418
(A) at 428C.
[3]
2010
(1) SA 333 (SCA).
[4]
[2016]
ZACC 39.
[5]
Jili
v Firstrand Bank Ltd (763/13)
[2014] ZASCA 183
at para. 13.