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[2019] ZAKZPHC 51
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IIAH Indiza Aviation Service (Pty) Limited v Msunduzi Municipality and Another (6198/2018P) [2019] ZAKZPHC 51 (23 July 2019)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case Number:
6198/2018P
In
the matter between:
IIAH
INDIZA AVIATION SERVICE (PTY) LIMITED
Applicant
and
MSUNDUZI
MUNICIPALITY
First Respondent
XOLISISIZWE
TRADING AND PROJECT CC
Second Respondent
JUDGMENT
Delivered
on 23 July 2019
Mbatha
J
[1]
The applicant brought an application for review in terms of rule 53
of the Uniform
Rules of Court, whereby it sought the following
relief: a review and setting aside of the first respondent’s
decision to
appoint the second respondent as a service provider
pursuant to an award of a tender to provide technical and
non-technical infrastructure
services at the Pietermaritzburg
Airport; that the second respondent be disqualified from the tender;
that the first respondent
be directed to award the tender to the
applicant, and other ancillary relief.
[2]
The first respondent did not oppose the relief sought by the
applicant pertaining
to the review application, save for the order
for punitive costs sought against it, and an order to refund the fee
paid by the
applicant for the aborted internal appeal process.
The position of the first respondent was made clear in the answering
affidavit
wherein it concedes to the review and setting aside of the
award of the tender to the second respondent.
[3]
Though conceding to the relief sought by the applicant, the first
respondent did not
concede that the applicant’s bid was not
defective. The first respondent argued that the relief sought by the
applicant should
not preclude the second respondent from having an
opportunity to make out a case that it should be retained as a
contractor in
the interests of justice and equity, as the applicant’s
bid was also non-responsive in various respects. In the light of the
argument by the first respondent that the applicant’s bid had
deficiencies, the first respondent did not concede that the
tender be
awarded to the applicant, but sought to abide by the decision of the
court.
[4]
The second respondent failed to file an answering affidavit, and its
attorneys of
record withdrew on 11 October 2018. On the date of the
hearing of the opposed application, the following orders were taken
by consent
between the applicant and the first respondent:
‘
1.
that the applicant is exempted from exhausting internal remedies as
ordinarily
required by section 7(2)(c) of the Promotion of
Administrative Justice Act of 2000 (PAJA) before approaching the
court for review;
2.
that the decision of the first respondent to name and designate the
second respondent
as the preferred bidder in the tender be and is
hereby reviewed and set aside;
3.
that the first respondent be directed to refund to the applicant the
fee which
it paid for the aborted Internal Appeal process;
4.
that in so far as it may be necessary the applicant is granted an
extension of
time in terms of section 9(1)(b) of PAJA;
5.
that the costs of the application be costs on an opposed basis,
excluding the
costs of the preparation of the interdict for the new
tender such costs to be costs on a party and party scale.’
[5]
The only outstanding issues for determination by the court were
whether the court
should disqualify the second respondent from the
tender process, and whether to award the tender to the applicant.
[6]
The court was addressed on the reasons given by the Bid Evaluation
Committee (‘BEC’),
which led to the disqualification of
the applicant. Counsel for the applicant submitted that the criterion
required for the tender
was the assessment of price and the BBBEE
status of the applicant. According to the applicant’s counsel,
the report reflected
that the minimum required score mark for
functionality was 6 per cent, and the applicant was awarded 55 per
cent. The applicant
was not awarded any points for company
experience, aviation lighting, and electrical configuration. The
reason given by the BEC
was that though the applicant provided a list
of subcontractors, it did not submit any written and signed contracts
between the
applicant and the subcontractors. It was submitted by the
applicant that this was an irrelevant consideration as this was not a
requirement of the tender.
[7]
Secondly, the applicant was disqualified for not having submitted a
record of having
worked together with its subcontractors in similar
environments, or in any other contracts. In that regard the applicant
stated
that it appropriately, and fully described its prior
experience and relationship with the subcontractors. However, the
applicant
was not awarded any points for that.
[8]
The applicant’s submission was that the extensive experience of
the applicant
in the management of airports, as well as the relevant
experience of its subcontractors, was extensively set out in the
tender
documents. It is on this aforementioned basis and other
factors, which I do not see fit to repeat, that the applicant
contended
that it should have been awarded the tender instead of the
second respondent.
[9]
The first respondent’s averments refers to a fatal defect in
the bid proposal,
in that the BEC ought to have applied a tender
condition that the contract could only be awarded to tenderers
subcontracting a
minimum of 40 per cent to companies which are 100
per cent black owned. Counsel for the applicant stated that instead
of adhering
to the prescribed 51 per cent requirement, the first
respondent prescribed a 100 per cent black owned requirement, which
is irregular
and not supported by the enabling legislation. The
applicant’s submission was that it complied with the
Preferential Procurement Policy Framework Act 5 of 2000
and with
regulation 4(1)(c)(i)
[1]
which
provides that ‘a tenderer subcontracting a minimum of 30% to an
EME or QSE which is at least 51% owned by black people’.
[10]
The applicant found this to be irregular as the second respondent
appeared not to have met that
criterion either, as it did not file
any certificates to show compliance therewith. In conclusion, it was
submitted that the high
bar of 100 per cent by the first respondent
should be taken as
pro non scripto
, as it was not a
requirement in terms of the legislation. In that regard the applicant
asserts that it is entitled to the award.
[11]
The applicant’s view was that the second respondent should be
disqualified from the tender,
because it did not comply with the
mandatory conditions of the tender. It highlighted the following
non-compliance: that the BBBEE
certificate did not bear the
commissioner of oath’s signature; that the second respondent
failed to provide the subcontractors’
certificate; that the
second respondent had submitted an expired employment equity policy,
and that it had no aviation radio technician.
[12]
It is trite that the materiality of compliance with legal
requirements depends on the extent
to which the purpose of the
requirements is attained. The constitutional and legislative
procurement framework requires supply
chain management prescripts
which are legally binding.
[2]
This court accepts that material and mandatory conditions are legally
binding, and may not be disregarded at the whim of the state
organ.
[3]
[13]
The first respondent correctly conceded to the setting aside of the
tender award to the second
respondent, as the mandatory requirements
were not complied with by the second respondent. The most significant
challenge to the
process was the change of the BBBEE score
percentage, which was contrary to the legislative prescripts. The
judgment in
Dr
JS Moroka Municipality v Betram (Pty) Ltd
[4]
is relevant as the court held that:
‘
Essentially it was for the
municipality, and not the Court, to decide what should be a
prerequisite for a valid tender, and a failure
to comply with
prescribed conditions will result in a tender being disqualified as
an "acceptable tender" under by the
Procurement Act unless
those conditions are immaterial, unreasonable or unconstitutional.’
Similarly, the court also
held in
WDR
Earthmoving Enterprises & another v The Joe Gqabi District
Municipality & others
[5]
that:
‘
A failure to comply with
prescribed conditions would result in a tender being disqualified as
an acceptable tender under the Act,
unless those conditions were
immaterial, unreasonable or unconstitutional.’
[14]
The first respondent decided to play it safe by not consenting to the
order awarding the tender
to the applicant, and to the
disqualification of the second respondent from participating in the
difficult situation. The first
respondent only consented to the
review and setting aside the award of the tender to the second
respondent. It would have been
a different case had the first
respondent fully supported the decision to award the tender to the
second respondent. I consider
that it was a wise decision on the part
of the second respondent not to oppose the application. It has not
been shown by the applicant
that the second respondent played any
untoward role in the award of the tender to it.
[15]
I have to consider firstly if this court can grant the substitution
remedy in favour of the applicant
in terms of s 8(1) of PAJA.
[6]
Section 8(1)
(c)
(ii)
empowers the court to set aside the decision and in exceptional
circumstances substitute or vary the administrative action
or correct
a defect. Exceptional circumstances can include the following: Where
the end result is a foregone conclusion and it
would serve no purpose
to refer the matter back to the original decision maker; where
further delays would cause undue prejudice
to the applicant; where
the original decision maker exhibits bias or incompetence to such a
degree that it would be unfair to expect
the applicant to submit to
its jurisdiction again; where the court is in a good position as the
original decision maker to make
a decision; the willingness of the
administrator to re-apply its mind to the issues at stake and change
in circumstances. In this
case the applicant has failed to show any
circumstances that warrants an order in line with the provisions of s
8(1)
(a)
(ii)
read with the provisions of s 8(1)
(c)
(ii)
of PAJA. The doctrine of separation of powers requires that the court
should not be ‘so overzealous’ as to replace
the
decisions of the functionary or administrator with their own
decisions save in exceptional circumstances. In
Piet
Bok Construction CC v Minister of Public Works & others
[7]
the court quoting with
approval from Hefer AP in
Commissioner,
Competition Commission v General Council of the Bar of South Africa
and others
[8]
where it was held
(references omitted):
‘
It is not necessary to deal at
length with a reviewing Court's power to substitute its own decision
for that of an administrative
authority. Suffice it to say that the
remark in
Johannesburg City
Council v Administrator, Transvaal, and Another
that “the Court is slow to assume a discretion which has by
statute been entrusted to another tribunal or functionary”
does
not tell the whole story. For, in order to give full effect to the
right which everyone has to lawful, reasonable and procedurally
fair
administrative action, considerations of fairness also enter the
picture. There will accordingly be no remittal to the administrative
authority in cases where such a step will operate procedurally
unfairly to both parties. As Holmes AJA observed in
Livestock
and Meat Industries Control Board v Garda
“
. . . the Court has a
discretion, to be exercised judicially upon a consideration of the
facts of each case, and . . . although
the matter will be sent back
if there is no reason for not doing so, in essence it is a question
of fairness to both sides.”’
[9]
[16]
Having considered all the relevant facts in this case, this court is
not satisfied that the applicant
has shown exceptional circumstances
for the court to award the tender bid to the applicant. It is also
not persuaded that it should
bar the second respondent from
participating in the bid. The second respondent did not participate
in the evaluation of the tender
bids, and cannot be said to be the
author of his own misfortune. Furthermore, this court does not have
the necessary technical
skills for evaluation of tender bids and
finds that the best decision should be to refer the matter back to
the first respondent.
No prejudice will be suffered by the applicant
as it is currently services to the first respondent in terms of a
previous contract.
[17]
In light of the stance taken by the first respondent to abide by the
decision of the court in
respect of these two outstanding issues, it
is my view that each party should pay its own costs.
[18]
Accordingly I make the following order:
1.
The application is dismissed;
2. The
matter is remitted back to the first respondent to start the tender
process
afresh;
3. Each
party is to bear its own costs.
Mbatha
J
Date
of Hearing:
22 March 2019 (F
Court)
Date
of Judgment:
23 July 2019
Appearances
For
Applicant:
Adv N Lange
Instructed
by:
PKX ATTORNEYS
Suite 36
3
on Cascades Crescent
Montrose
Pietermaritzburg
For
the First Respondent:
Adv AL Christison
Instructed
by:
MATTHEW FRANCIS INC
Suite 4, 1
st
Floor
21A Cascades Crescent
Montrose
Pietermaritzburg
[1]
Preferential Procurement Regulations,
2017, GN R32,
GG
40553, 20 January 2017.
[2]
AllPay Consolidated Investment
Holdings (Pty) Ltd & others v Chief Executive Officer, South
African Social Security Agency
& others
2014 (1) SA 604 (CC).
[3]
Joubert Galpin Searle Inc &
others v Road Accident Fund & others
2014 (4) SA 148 (ECP).
[4]
Dr JS Moroka Municipality v Betram
(Pty) Ltd
[2013] ZASCA 186
para 10.
[5]
WDR Earthmoving Enterprises &
another v The Joe Gqabi District Municipality & others
[2018] ZASCA 72
para 30.
[6]
Promotion of Administrative Justice
Act 3 of 2000
.
[7]
Piet Bok Construction CC v
Minister of Public Works & others
[2012] ZAGPPHC 168
para 28.
[8]
Commissioner, Competition
Commission v General Council of the Bar of South Africa and others
2002 (6) SA 606
(SCA) para 14.
[9]
See also
Bato
Star
Fishing
(Pty)
Ltd
v
Minister
of
Environmental
Affairs
and
Tourism
and
others
[2004] ZACC 15
;
2004
(4) SA 490
(CC) paras 48 and 57.