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[2021] ZAKZPHC 65
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Nexor 312 (Pty) Ltd t/a VNA Consulting v Overberg District Municipality and Another (5709/2021P) [2021] ZAKZPHC 65 (16 September 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 5709/2021P
In
the matter between:
NEXOR
312 (PTY) LTD t/a VNA
CONSULTING APPLICANT
and
OVERBERG
DISTRICT MUNICIPALITY FIRST
RESPONDENT
SMEC SA (PTY)
LTD SECOND
RESPONDENT
ORDER
The
following order is granted:
1.
The
objection to the jurisdiction of the KwaZulu-Natal Division of the
High Court, Pietermaritzburg to determine this matter is
upheld;
2.
In terms of
section 27(1)(a)
and (b) of the
Superior Courts Act 10 of
2013
, the matter is transferred to the Western Cape Division of the
High Court;
3.
The applicant is directed to pay the costs of the application for
relief in terms of Part A of its notice
of motion, such to include
the costs of two counsel where so employed.
JUDGMENT
Mossop
AJ:
Introduction
[1]
Rule
6(1) of the Promotion of Administrative Justice Act
[1]
(‘PAJA’) provides that ‘[a]ny person may institute
proceedings in a court or a tribunal for the judicial review
of an
administrative action’.
[2]
That
is what the applicant has done in this matter. In part B of its
application it seeks the judicial review of a decision taken
by the
first respondent to disqualify it as a compliant tenderer in respect
of a tender issued by the first respondent, and which
was ultimately
awarded by the first respondent to the second respondent.
The
relief claimed
[3]
In
part A of its application, the applicant seeks interim relief in the
form of an interdict pending the determination of its review
application. That relief initially comprised of the following:
(a)
The
first respondent being interdicted and restrained from:
(i)
proceeding
with and/or implementing and/or giving effect in any way to the
decision made by the first respondent to award the tender
to the
second respondent;
(ii)
completing
any agreement with the second respondent pursuant to the award of the
tender to it;
(iii)
allowing
and/or permitting any work foreshadowed by the tender to be
undertaken by the second respondent.
(b)
The
second respondent being interdicted and restrained from:
(i)
concluding
any agreement pursuant to the award of the tender with the first
respondent; and
(ii)
undertaking
any of the work foreshadowed by the tender.
[4]
As
a consequence of developments that occurred after the application was
delivered, the relief as initially claimed was varied by
the
applicant. This became necessary because the first respondent
indicated that it had implemented its decision to award the tender
to
the second respondent and had concluded an agreement with the second
respondent as the successful tenderer. Later, the first
respondent
advised that the second respondent had commenced work on the tender.
The relief now claimed is that the:
(a)
first
respondent is interdicted and restrained from allowing any further
work foreshadowed by the tender to be undertaken by the
second
respondent; and
(b)
second
respondent is interdicted and restrained from undertaking any further
work foreshadowed by the tender.
[5]
What
I am tasked with is a consideration of the relief claimed in part A
of the application only.
Appearances
[6]
When
the matter was called, I had the pleasure of hearing argument from Mr
Gajoo SC, who appears for the applicant and who led Ms
Qono.
Appearing for the first respondent was Mr Dickson SC, leading Mr
Nacerodien. I point out, however, that Mr Nacerodien was
not
physically present but had, according to Mr Dickson, earlier done
much of the work on behalf of the first respondent in compiling
its
answering affidavit. Appearing for the second respondent was Mr van
Vuren from the Pretoria Bar. All counsel are thanked for
the obvious
effort that they have put into the matter and for their helpful
submissions.
[7]
In
his practice note, Mr Dickson identified certain issues and proposed
the sequence in which they should be dealt with. One of
the issues
identified by him was that of jurisdiction. Contrary to the roadmap
proposed by Mr Dickson, I intend dealing briefly
with the facts of
the matter and then with the issue of jurisdiction as its
determination may prove to be dispositive of the application.
The
facts of the matter
[8]
The
essential facts of the matter are not complex. The first respondent
is the Overberg District Municipality which is located in
Bredasdorp
in the Western Cape. It invited bids for a tender that was described
as being concerned with the
‘
management
and implementation of the rural road asset management system within
the Overberg District Municipality for a period of
three years’.
The
tender process was to be regulated by the terms of the first
respondent’s supply chain management policy. The applicant,
which is based in Pinetown, KwaZulu-Natal and the second respondent,
which is based in Cape Town, were two of six entities that
submitted
bids. While dealing with places of business, it is important to note
that the applicant also has a presence in the Western
Cape, having a
branch office at the Convention Tower, corner of Walter Sisulu and
Heerengracht Streets, Cape Town. The second respondent
ultimately
emerged as the successful bidder after the applicant was disqualified
due to it not securing the requisite minimum number
of points in the
functional evaluation component of the tender.
[9]
The
application was brought on an extremely urgent basis and the
respondents were given very little time to put up their answering
affidavits. The application itself was lengthy, the founding
affidavit alone filling some 60 pages. It was accompanied by numerous
annexures that eventually swelled the application to approximately
350 pages in length. The application is dated 2 August 2021
and was
issued by the registrar of this court on that date. Following
service, the respondents were required to notify the applicant
of
their intention to defend the matter by 3 August 2021 and to deliver
their answering affidavits by 4 August 2021. Effectively,
the
respondents were given two days to respond to the voluminous
application papers which were replete with dense, technical issues,
particularly in the annexures that were attached to the founding
affidavit. In this regard:
(a)
the
first respondent managed to comply with these truncated time periods
and delivered an answering affidavit by 4 August 2021,
but pointedly
reserved its rights therein to supplement that affidavit in due
course, complaining that it had not been afforded
sufficient
opportunity to deal with the detailed allegations raised by the
applicant in its application papers; and
(b)
the
second respondent filed a notice in terms of rule 6(5)
(d)
(iii)
of the Uniform Rules of Court, in which it raised certain questions
of law.
The
issue of jurisdiction
[10]
The
issue of jurisdiction is a vigorously contested issue in the
application:
(a)
the
first respondent has taken the point in its answering affidavit that
this court lacks jurisdiction, asserting that the tender
was for the
rendering of services in the Overberg District Municipality in
Bredasdorp, Western Cape, the adverse decision was taken
in
Bredasdorp, that PAJA only applies to review proceedings and not to
interdictory proceedings and that the applicant has failed
to
consider the provisions of section 21 of the Superior Courts Act
[2]
(the Act’); and
(b)
the
second respondent has raised the same point in its rule 6(5)
(d)
(iii)
notice, where it makes similar assertions to those made by the first
respondent.
[11]
The
applicant contends that this court has jurisdiction to adjudicate the
application by virtue of the fact that it is domiciled
or ordinarily
resident within the area of jurisdiction of this court.
The
ordinary jurisdiction of the high court
[12]
Jurisdiction
means the power vested in a court by law to adjudicate upon,
determine and dispose of a matter.
[3]
Importantly,
it is territorial in nature and ‘does not extend beyond the
boundaries of, or over subjects or subject-matter
not associated
with, the Court’s ordained territory’.
[4]
[13]
Previously,
section 19 of the Supreme Court Act dealt with the issue of
jurisdiction.
[5]
It provided as
follows:
‘
(1)
(a)
A provincial or local division shall
have jurisdiction over all persons residing or being in and in
relation to all causes arising
and all offences triable within its
area of jurisdiction and all other matters of which it may according
to law take cognizance,
and shall, subject to the provisions of
subsection (2), in addition to any powers or jurisdiction which may
be vested in it by
law, have power:
(i)
to
hear and determine appeals from all inferior courts within its area
of jurisdiction;
(ii)
to
review the proceedings of all such courts;
(iii)
in
its discretion, and at the instance of any interested person, to
enquire into and determine any existing, future or contingent
right
or obligation, notwithstanding that such person cannot claim any
relief consequential upon the determination.’
[14]
In
commenting upon section 19, Harms DP in
Gallo
Africa Ltd v Sting Music (Pty) Ltd
[6]
stated that
‘
.
. .
our courts have
for more than a century interpreted it to mean no more than that
the jurisdiction of High Courts is to be found
in the common law. For
purposes of effectiveness the defendant must be or reside within the
area of jurisdiction of the court .
. . Although effectiveness “lies
at the root of jurisdiction” and is the rationale for
jurisdiction, “it is not necessarily
the criterion for its
existence”. What is further required is a
ratio
jurisdictionis
.
The
ratio
,
in turn, may, for instance, be domicile, contract, delict and,
relevant for present purposes,
ratione
rei sitae
.
It depends on the nature of the right or claim whether the one ground
or the other provides a ground for jurisdiction. Domicile
on its own,
for instance, may not be enough
.’
(Footnotes omitted.)
[15]
Section
19 of the Supreme Court Act was replaced by section 21 of the Act.
The wording of the two sections is not dissimilar. Section
21 now
provides that:
‘
A
Division has jurisdiction over all persons residing or being in, and
in relation to all causes arising and all offences triable
within,
its area of jurisdiction and all other matters of which it may
according to law take cognisance, and has the power:
(a)
to hear and determine appeals from
all Magistrates’ Courts within its area of jurisdiction;
(b)
to review the proceedings of all
such courts;
(c)
in its discretion, and at the
instance of any interested person, to enquire into and determine any
existing, future or contingent
right or obligation, notwithstanding
that such person cannot claim any relief consequential upon the
determination.’
[16] It
is well established that, just as in the case of the now repealed
section 19 of the Supreme Court Act,
section 21 of the Act does not
contain a codification of the jurisdiction of the high court. The
jurisdiction of the high court
is accordingly also to be determined
by reference to the common law. In doing so, regard must be had to
the jurisdictional connecting
factors, or
rationes
jurisdictionis,
recognised by the common law. These include:
(a)
residence
and domicile (
ratio domicilii
);
(b)
the
situation of the subject-matter of the action within the jurisdiction
(
ratio rei sitae
); and
(c)
the
cause of action (
ratio
rei gestae
) which
includes the conclusion or performance of a contract (
ratio
contractus
).
[7]
[17] A
consideration of these factors and the facts of this matter reveal
that on the conventional approach to
jurisdiction, the KwaZulu-Natal
Division of the High Court would lack jurisdiction to determine the
matter as none of the respondents
are resident or domiciled within
the area of jurisdiction of this court and the applicant’s
cause of action arises in the
Western Cape as this is where the
administrative action complained of occurred. These same factors vest
jurisdiction in the Western
Cape Division of the High Court.
Does
this court have jurisdiction?
[18] In
the light of the aforementioned facts and understanding of the law,
the question that must be asked is
what gives this court, located in
KwaZulu-Natal, jurisdiction to hear this matter? The answer to the
question posed, according
to the applicant, is PAJA.
PAJA
and jurisdiction
[19] As
was pointed out at the beginning of this judgment, PAJA permits a
court to review administrative decisions,
and defines a ‘court’,
in part, as:
‘
(b)
(i)
a High Court or another court of similar status;
(ii) . . .
within whose area of
jurisdiction the administrative action occurred or the administrator
has his or her or its principal place
of administration or the party
whose rights have been affected is domiciled or ordinarily resident
or the adverse effect of the
administrative action was, is or will be
experienced.’
[8]
[20] Thus
PAJA grants jurisdiction to a court to determine a matter within
whose area of jurisdiction:
(a) the
administrative action occurred; or
(b) the
administrator has its principal place of administration; or
(c) the
affected party is domiciled or in which it is ordinarily resident; or
(d) where
the adverse effect of the administrative action will be experienced.
The
changes brought about by PAJA
[21]
In
Gallo
,
Harms DP had occasion to say that the domicile of the plaintiff never
determines jurisdiction.
[9]
This
is no longer the case since the introduction of PAJA. The definition
of the word ‘court’ employed by PAJA now
permits
jurisdiction to be founded on the place of domicile or residence of
the applicant. This runs contrary to the principle
of
ratione
domicilii
and the principle of
actor
sequitur forum rei
[10]
that underlies the principle of
ratione
domicilii
.
[22] Performing
the same exercise when considering whether section 21 of the Act
gives this court jurisdiction,
but now using PAJA in the stead of the
Act, it is evident that the KwaZulu-Natal Division of the High Court
does have jurisdiction.
The Western Cape Division of the High Court
would continue to have jurisdiction as the administrative action
occurred within its
area of jurisdiction and the principal place of
administration of the administrator is likewise within its area of
jurisdiction.
This court acquires jurisdiction arising out of the
fact that the applicant is both domiciled and ordinarily resident in
KwaZulu-Natal
and the adverse effect of the first respondent’s
decision will be experienced by the applicant within the jurisdiction
of
this court according to the applicant.
Case
law
[23] There
are few cases in which the issue of jurisdiction arising out of PAJA
has been considered.
[24]
In
National
Arts Council and another v Minister of Arts and Culture and
another,
[11]
the court held that the question of whether a court has jurisdiction
in review proceedings under PAJA has to be decided with reference
to
both the Supreme Court Act (being the applicable Act in place at the
time), read with the provisions of ss 1 and 6 of PAJA.
[12]
In that case, an application was brought in the Western Cape High
Court that sought the review of a decision taken by the Minister
of
Arts and Culture in Pretoria. The principal applicant was the
National Arts Council, which was ordinarily resident in Johannesburg.
The applicants were not domiciled or resident in the court’s
area of jurisdiction. The court found that it did not have
jurisdiction to hear the matter.
[25]
In
B.O.
Mahony NO and others v MEC, Health and Social Development, Eastern
Cape and others,
[13]
the applicants asked the Western Cape Division of the High Court to
decide whether it had jurisdiction to determine the main application,
which involved an application for a mandamus. The applicants resided,
and were domiciled, within the court’s area of jurisdiction.
The respondents were not: their respective principal places of
business were in the Eastern Cape. As in this case, the applicants
argued that the court had jurisdiction by virtue of the fact that
they resided and were domiciled in the court’s area of
jurisdiction. As in this case, the respondents conceded this point
but argued that in terms of the principle of convenience, the
matter
should be heard in the Eastern Cape Division of the High Court. The
court confirmed the approach in
National
Arts Council
that the question of whether it had jurisdiction was to be answered
with reference to the Act read with the provisions of ss 1
and 6 of
PAJA. The court accepted that the principle of convenience would have
a bearing on the issue of jurisdiction and applied
it, but held,
contrary to the respondents’ argument, that the principle of
convenience favoured the matter being heard in
the Western Cape
because of the specific facts of the matter. Ultimately the court
found that it had jurisdiction to hear the main
application.
[26]
In
TMT
Services and Supplies (Pty) Ltd v The MEC: Department of Transport,
KZN
,
[14]
the applicant brought a review of a tender for a traffic
contravention management system in the Western Cape Division of the
High
Court. The applicant had its registered office and principal
place of business in Cape Town, whilst four of the respondents,
including
the party that issued the tender, were based in
KwaZulu-Natal and the party that won the tender had its registered
office in Pretoria,
Gauteng.
The
respondents alleged that the Western Cape Division of the High Court
lacked jurisdiction to hear the matter, it being alleged
that it had
no connection to the dispute which arose in KwaZulu-Natal and that
none of the respondents were resident or domiciled
within the area of
jurisdiction of the Western Cape Division of the High Court. Given
the particular facts of that matter, the
respondents submitted that
it would be more convenient for the matter to be heard in
KwaZulu-Natal. The applicant submitted, to
the contrary, that once
jurisdiction is established in terms of PAJA, other considerations
such as effectiveness, convenience and
the like cease to apply and
are of no consequence. The court rejected this and found that even
where jurisdiction is based upon
PAJA, considerations of convenience,
effectiveness and common sense continue to remain relevant
considerations. The court found
that the dispute was territorially
connected to KwaZulu-Natal, the impugned decision was taken in that
province and the respondents
had their principal places of business
there. As a consequence, the application was dismissed.
Why
this court lacks jurisdiction
[27] The
reasoning employed in
TMT Services
commends itself to me.
The
following facts and circumstances are, in my opinion, pertinent and
militate against this court having jurisdiction to determine
the
urgent relief and the review application:
(a) the
respondents are based in the Western Cape;
(b) the
applicant has a presence in the form of an office in the Western
Cape;
(c) the
tender was issued in the Western Cape;
(d) the
tender was for the provision of a rural road asset management system
in the Western Cape;
(e) the
tender was to be evaluated in accordance with the provisions of the
Overberg District Municipality’s
supply chain management
policy;
(f) the
bid was adjudicated upon in Bredasdorp in the Western Cape;
(g) the
internal appeal afforded to the applicant was likewise adjudicated
upon in Bredasdorp in the Western
Cape;
(h) the
adverse decision complained of by the applicant was taken in
Bredasdorp in the Western Cape;
(i) the
person who was involved in the functionality evaluation of the
tender, a Mr van Eck,
is based in Worcester in the Western Cape. The
person involved in the appeal process, a Mr Mathee, also appears to
be based in
the Western Cape, having commissioned his affidavit in
Stanford, which is in the Western Cape. Both gentlemen came in for
some
trenchant criticism from the applicant regarding their
qualifications, expertise and impartiality in the bid evaluation
process;
and
(j) the
service that the winning bidder of the tender is required to render
is in the Western
Cape.
[28]
This
court has no connection whatsoever with the dispute between the
parties save for the fact that the applicant is resident at
Pinetown,
within this court’s area of jurisdiction. Notwithstanding the
fact that PAJA provides for an additional statutory
ground for the
establishment of jurisdiction, considerations of convenience and
common sense as well as effectiveness remain valid
considerations.
That these are valid considerations when considering the issue of
jurisdiction was commented upon by the Appellate
Division in
Estate
Agents Board v Lek
,
[15]
a matter decided prior to the advent of PAJA, where the court stated
that
‘
. . .
as
set out earlier in this judgment, convenience and common sense,
are,
inter
alia
,
valid considerations in determining whether a particular Division has
jurisdiction to hear and determine the particular cause.
’
[16]
[29] In
my view, a consideration of these factors leads ineluctably to the
conclusion that it is convenient for
the matter to be heard in the
Western Cape Division of the High Court, notwithstanding the
provisions of PAJA.
Section
27 of the Act
[30] In
its replying affidavit, the applicant made an alternative submission
that in the event of this court finding
that it lacked jurisdiction
to determine the matter, an order would be sought that the
application be removed to the Western Cape
Division of the High Court
in terms of the provisions of section 27 of the Act. My attention was
redrawn to this fact in argument
by Mr Gajoo, who indicated that
whilst it was not his first choice of order, it was an alternate
order that the applicant persisted
in. Section 27 of the Act provides
that
‘
(1) If
any proceedings have been instituted in a Division or at a seat of a
Division, and it appears to the court that
such proceedings—
(a)
should have been instituted in another Division or at another
seat of that Division; or
(b)
would be more conveniently or more appropriately heard or
determined:
(i)
at another seat of that Division; or
(ii) by
another Division,
that court may, upon
application by any party thereto and after hearing all other parties
thereto, order such proceedings to be
removed to that other Division
or seat, as the case may be.’
[31] In
my view, this application ought to have been brought in the Western
Cape Division of the High Court and
it will be more convenient for it
to be considered by that court.
Conclusion
[32]
I
am unpersuaded that this court has jurisdiction to hear the matter.
Convenience, effectiveness and a large dollop of common sense
dictates that this application should be considered by the Western
Cape Division of the High Court. I accordingly cannot find that
this
court has jurisdiction to hear the application for urgent interim
relief or for the review of the administrative decision
about which
the applicant makes complaint.
Order
[33]
I
accordingly make the following order:
2.
The
objection to the jurisdiction of the KwaZulu-Natal Division of the
High Court, Pietermaritzburg to determine this matter is
upheld;
3.
In
terms of
section 27(1)(a)
and (b) of the
Superior Courts Act 10 of
2013
, the matter is transferred to the Western Cape Division of the
High Court;
4.
The
applicant is directed to pay the costs of the application for relief
in terms of Part A of its notice of motion, such to include
the costs
of two counsel where so employed.
MOSSOP
AJ
APPEARANCES
Counsel
for the applicant: Mr
V Gajoo SC and Ms Z Qono
Instructed
by: V
Chetty Incorporated
6
Rydall Vale Crescent
Rydall
Vale Office Park
La
Lucia
Counsel
for the first respondent: Mr
A J Dickson SC and Mr
A Nacerodien
Instructed
by: Fairbridges
Wertheim Becker
16
th
Floor
South
Tower, The Towers
Heerengracht
Cape
Town
Counsel
for the second respondent: Mr
S. M. van Vuren
Instructed
by: Weavind
and Weavind
361
Oberon Street
Faerie
Glen
Pretoria
Date of
Hearing: 8
September 2021
Date of
Judgment: 16
September 2021
[1]
Promotion of Administrative Justice Act 3 of 2000
.
[2]
Superior Courts Act 10 of 2013
.
[3]
Veneta
Mineraria Spa v Carolina Collieries (Pty) Ltd (in liquidation)
1987 (4) SA 883
(A) at 886D.
[4]
Ewing
McDonald & Co Ltd v M&M Products Co
[1990] ZASCA 115
;
1991
(1) SA 252
(A)
at 256G-H.
[5]
Supreme Court Act
59
of 1959.
[6]
Gallo
Africa Ltd and others v Sting Music (Pty) Ltd and others
2010 (6) SA 329
(SCA) para 10.
[7]
Van
Wyk t/a Skydive Mossel Bay v UPS SCS South Africa (Pty) Ltd
[2020] 1 All SA 857 (WCC)
para
53.
[8]
Section
1 of PAJA.
[9]
Gallo
Africa Ltd and others v Sting Music (Pty) Ltd and others
2010 (6) SA 329
(SCA)
para
8.
[10]
Which means: ‘
The
plaintiff follows the defendant’s court’.
[11]
National
Arts Council and another v Minister of Arts and Culture and another
2006 (1) SA 215 (C).
[12]
Ibid
para 15.
[13]
B.O.
Mahony NO and others v MEC, Health and Social Development, Eastern
Cape and others
(WCC) unreported case number 1444/2015.
[14]
TMT
Services and Supplies (Pty) Ltd v The MEC: Department of Transport,
KZN
and
others
(WCC)
unreported case number 18339/2018 (6 March 2020).
[15]
Estate
Agents Board v Lek
1979
(3) SA 1048 (A).
[16]
Ibid at 1067E.