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[2019] ZAKZPHC 64
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Rocla (Pty) Ltd v Zululand District Municipality and Others (14508/2016P) [2019] ZAKZPHC 64; [2019] 4 All SA 831 (KZP) (30 September 2019)

IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Reportable
Case
No: 14508/2016P
In
the matter between:
ROCLA (PTY)
LTD

Applicant
and
THE ZULULAND DISTRICT MUNICIPALITY

1
st
Respondent
THE SPEAKER OF THE MUNICIPAL
COUNCIL OF THE ZULULAND DISTRICT
MUNICIPALITY

2
nd
Respondent
THE MUNICIPAL MANAGER OF THE
ZULULAND DISTRICT
MUNICIPALITY

3
rd
Respondent
ZULUCRETE (PTY)
LTD

4
th
Respondent
THE MEC FOR FINANCE, KWAZULU-NATAL
PROVINCE

5
th
Respondent
CONRITE WALLS (PTY)
LTD

6
th
Respondent
PREFERRED PRE-CAST
& PROJECTS (PTY)
LTD

7
th
Respondent
ALLIED CABLE TRENCHING (PTY)
LTD

8
th
Respondent
HEXAGON TECHNOLOGIES AND
PROJECT ENTERPRISES (PTY)
LTD

9
th
Respondent
ORDER
The
following order issues:
1.       The decision
taken by the first and/or third respondents on 22 July 2016,
to award
tender number 002/2016 for the management of two pre-cast
concrete plants in Ulundi and Vryheid and the manufacture of
ventilated
improved pit latrine toilets for the first respondent’s
rural sanitation programme to the fourth respondent (the impugned

decision) is declared invalid and is reviewed and set aside.
2.       Any contract the
first respondent may have concluded with the fourth respondent
pursuant
to the impugned decision is declared invalid and of no force
and effect and is set aside.
3.       The first
respondent is directed to award tender number 002/2016 to the
applicant.
4.       The first
respondent is directed to pay the costs of the application on the
scale as between
attorney and client.
5.       The
counter-application of the sixth respondent is dismissed with costs.
JUDGMENT
GORVEN
J
[1]
The applicant, the fourth and the sixth to ninth
respondents responded to a call for tenders advertised by the first
respondent.
The project was to manage two pre-cast concrete plants at
Ulundi and Vryheid and to manufacture pre-cast concrete ventilated
improved
pit latrine toilets (VIPs) at the plants over a three-year
period (the project). Two envelopes were to be submitted. The first
contained technical proposals. Ten bids were received. The second
contained financial proposals. Of the initial ten, only the
applicant,
the fourth respondent and the sixth to ninth respondents
submitted these.
[1]
The project was awarded to the fourth respondent on 22 July 2016
(the impugned award).
[2]
The applicant appealed to the Municipal Bid
Appeals Tribunal (the Tribunal). The appeal was opposed by the first
and fourth respondents.
The Tribunal held a hearing in which those
three parties participated. The Tribunal requested them to respond in
writing to a list
of questions which arose during the hearing. The
applicant made submissions. The first respondent also did so
on 27 September 2016.
It asserted that paragraph 50A
of its Supply Chain Management Policy (SCMP) was
ultra
vires
the
Municipal Supply Chain Management
Regulations (the
Regulations) promulgated under the Local Government:
Municipal Finance Management Act (the MFMA).
[2]
As a result, it claimed that the Tribunal had no power to determine
the appeal. This was refuted in further submissions put up
by the
applicant. The fourth respondent furnished its submissions on
26 September 2016. It claimed that the procedure required
by the
SCMP to appoint the Tribunal was not followed. Accordingly, the
Tribunal was not properly constituted and could not decide
the
appeal. The applicant did not see this submission until after
26 October 2016 and was accordingly unable to respond.
[3]
After this, the Tribunal signed an award (the
first award) dated 17 October 2016. The issues raised by
the first and fourth
respondents in their written submissions were
rejected. The order was:
‘(i)
the Appeal succeeds;
(ii)
the award to ZuluCrete (Pty) Ltd is set aside;
(iii)
any contract which may have been concluded between the Municipality
and ZuluCrete (Pty)
Ltd, be and is hereby cancelled;
(iv)
the entire bidding process is to start
de novo
.’
[4]
On 26 October 2016, two of the three members of
the Tribunal signed another award (the second award). The second
award revisited
and dealt only with the written submissions made by
the first and fourth respondents concerning the competence of the
Tribunal
to deal with the appeal. It dismissed the contention of the
first respondent but upheld that of the fourth respondent. The second

award tersely stated that ‘there was no substantial compliance
with the provisions of paragraph 50A(2) of the [SCMP]’.
No
reasons were given for this finding. It concluded with an order that:
‘10.1
The point
in limine
of the [fourth] Respondent is upheld.
10.2
The Tribunal lacks the requisite authority to determine this
appeal.’
The
first respondent accepted the finding in the second award and
regarded the appeal process as at an end. It rejected requests
and
demands by the applicant to convene the Tribunal properly. Despite
submissions to the contrary by the applicant, it held fast
to the
view that the SCMP was
ultra vires
the Regulations. It held
fast to its view that, as a result, it could not set up a Tribunal.
[5]
The attitude of the first respondent ultimately
prompted the present application. It is one brought under the
Promotion of Administrative
Justice Act (PAJA).
[3]
The relief initially sought a review and, in the alternative, a
mandamus
requiring the
first respondent to appoint a Tribunal. This relief was later amended
and now reads:
‘1.
That the decision taken by the first and/or third respondents on 22
July 2016,
to award tender number 002/2016 for the management of two
pre-cast concrete plants in Ulundi and Vryheid and the manufacture of

VIP toilets for the first respondent’s rural sanitation
programme (the tender) to the fourth respondent (the impugned
decision)
be reviewed and set aside;
2.
That any contract the first respondent may have concluded with the
fourth respondent
pursuant to the impugned decision be declared
invalid and of no force and effect;
3.
The first respondent is directed to award tender number 002/2016 to
the applicant;
4.
Alternatively to paragraph 3 hereof, that the matter be remitted to
the first
and third respondents reconsideration, with directions to:
4.1
Reject the fourth respondents tender as ineligible;
4.2
Treat the applicant as its preferred bidder;
4.3
Consider whether the applicant has the capability and ability to
execute the contract and
whether acceptance of its tender would
constitute an unacceptable commercial risk, having regard to the
matters set forth in paragraph
F.3.13 of the Municipality’s
Standard Conditions of Tender;
4.4
Award the tender to the applicant in the event of the questions
referred to in 4.3 hereof
being answered in the affirmative.
5.
Further alternatively, the matter is remitted to the first respondent
for reconsideration
and the making of a fresh award.
6.
The first respondent is directed to pay the costs of the application.
7.
The sixth respondent’s counter application is dismissed with
costs.’
[6]
The first respondent initially opposed the
application. However, it failed to put up the record of the decision
or to furnish reasons
as is required by rule 53 of the Uniform
Rules of Court. It simply sent a number of email attachments to the
applicant, including
the second award. These did not comprise the
full record. In particular, they did not include the first award or
any part of the
bid of the sixth respondent. Shortly before the
hearing, the first respondent withdrew its opposition. The affidavit
covering the
withdrawal (the withdrawal affidavit) supports prayers 1
and 2 above. It goes on to submit that the project should be
advertised
afresh but abides the decision of this court on the entire
outcome.
[7]
The only party currently contesting part of the
relief sought by the applicant is the sixth respondent. It supports
prayers 1 and
2 but seeks to strike out certain averments in the
founding affidavit and opposes the balance of the prayers. In
addition, the
sixth respondent instituted a counter-application for
the project to be awarded to it.
[8]
The applicant, first respondent and sixth
respondent appeared at the hearing. During argument, the sixth
respondent conceded that
it had not submitted a tender. This was done
by a consortium, Conloo Construction (the consortium), of which the
sixth respondent
was one of four members. It was accepted that this
non-suited the sixth respondent as regards the counter-application.
This concession
is correct. If the sixth respondent did not submit a
tender, no award of the project can be made to it.
[9]
The fifth respondent deposed to an affidavit so
as to place relevant facts before the court. She put up a copy of the
first award.
She stated that one of the chairpersons of the Tribunal
had complained to her that, after the first award was signed, an
official
in the Provincial Treasury had put pressure on the Tribunal.
This official claimed that the Tribunal members had not been
appointed
in consultation with the third respondent. This was said to
afford grounds for a review of any award made by the Tribunal. The
chairperson who conveyed this to the fifth respondent was of the view
that, because the Tribunal had ‘handed down’
[4]
an award, it was
functus officio
and could not make any further decisions.
[5]
It had later come to the attention of the fifth
respondent that the second award had been signed by the remaining two
members of
the Tribunal. This affidavit was the first intimation to
the applicant of the first award.
[10]
It will be useful to provide some background to
the matter. Since inception, the first respondent has developed and
provided low
cost housing and rural sanitation to communities within
its area. During 2010, it put out to tender the establishment,
management
and use to manufacture VIPs of two pre-cast manufacturing
facilities in Vryheid and Ulundi. The VIPs and other pre-cast
concrete
products manufactured there would be used in these
developments. The applicant unsuccessfully tendered for this project.
It was
awarded to the sixth respondent around September 2010 for a
three-year period (the 2010 contract). When this period elapsed, no

new tender was advertised for the management of the plants and the
manufacture of VIPs. The sixth respondent continued to do so
well
beyond the expiry date of the 2010 contract. The applicant
strenuously objected to this. Only in January 2016 did the
first
respondent advertise a call for tenders for the project. It is this
process which led to the impugned decision.
[11]
The tenders of the consortium and the seventh and
eighth respondents were all rejected as a result of their failure to
submit their
annual financial statements. The tender by the ninth
respondent was, after re-evaluating functionality, allowed to proceed
to the
second evaluation stage. The consortium quoted R188 million,
the fourth respondent R191 million, the applicant R212 million,

the eighth respondent R248 million, the seventh respondent
R350 million and the ninth respondent R376 million.
[12]
When the present application was launched, the
applicant’s attorneys sought, and were given, an undertaking
that the impugned
decision would not be implemented pending the
adjudication of this application. Despite this, in June 2017, the
first respondent
contracted the sixth respondent to provide VIPs for
the sum of R4,3 million. This was done without invoking a competitive
bidding
procedure. The applicant objected and required an undertaking
that this contract would not be proceeded with. No such undertaking

was forthcoming. The first respondent admitted having contracted,
claimed that this was because service delivery would otherwise
be
adversely affected and indicated that the procurement had taken place
through the Harry Gwala Municipality.
[13]
The applicant then applied urgently to interdict
the continuation of this contract. The day before the application was
to be heard,
a brief affidavit was delivered by the first respondent.
It stated that the contract had been completed. This was the first
time
this had been communicated to the applicant, despite the
applicant having sought the undertaking. The application was struck
from
the roll for lack of urgency and the applicant was ordered to
pay the costs.
[14]
The first substantive issue is the relief
reviewing and setting aside the award to the fourth respondent. As
mentioned, all of the
parties agree that this should be done. There
may, however, be an obstacle in the way of granting any of the relief
sought. The
order made by the Tribunal in the first award purports to
set aside the award and to direct the first respondent to begin the
bidding
process
de novo
.
It is necessary to determine the effect of this order. If this has
legal effect, the application is moot.
[15]
The starting point is the powers of such a
Tribunal to deal with issues placed before it. This is dealt with in
the SCMP. Section 50A(3)
thereof reads:
‘The
powers, duties and functions of the Municipal Bid Appeals Tribunal,
and matters incidental thereto, are set out in the
Rules which are
appended to this Supply Chain Management Policy and marked Appendix
A.’
The
powers include the following:
‘8.8.1
The Tribunal –
. . .
8.8.1.2
must make a final binding decision to confirm, vary or set aside the
decision of the Bid Adjudication Committee or the Municipal
Manager;
8.8.2
If the award is varied or set aside, the Tribunal must make any order
it considers appropriate regarding
the manner in which the matter is
to be resolved.’
It
is clear that the Tribunal has the power to make a ‘final
binding decision’ varying or setting aside an impugned

decision. If it does so, it must make an ‘order it considers
appropriate
regarding the manner in which the
matter is to be resolved.’
[16]
The Tribunal thus had the power to grant the
order contained in the first award. If the first award has legal
effect, the impugned
award would already be set aside, any contract
arising from it cancelled and the matter remitted to the first
respondent to begin
the process again. In those circumstances, none
of the relief sought in this application can be granted unless the
first award
has been reviewed and set aside.
[6]
[17]
This raises a vexed question. At what point can
it be said that an award signed by the Tribunal has legal effect? If
the first award
has legal effect, this would have rendered Tribunal
functus officio
. In
that case, the second award would have had no legal effect as the
Tribunal would have lacked the power to issue it.
[18]
In order to obtain clarity on what took place
factually, an explanatory affidavit was procured from one of the
chairpersons of the
Tribunal. He clarified that awards are not handed
down by the Tribunal as is the case of judgments of courts. It is the
function
of the Provincial Treasury to ‘publish’ the
award to the parties. This is done by informing the parties to the
appeal
of the awards which have been made. The chairperson confirmed
that the first award was signed by all three members of the Tribunal.

As is the practice, it was then delivered to the Provincial Treasury.
The fifth respondent’s affidavit makes it clear that,
after the
first award was signed and forwarded, a Treasury official approached
the Tribunal. After that intervention, the second
award was signed,
delivered to the Treasury and communicated to the parties to the
appeal.
[19]
What is abundantly clear from the papers is that
the first award was never distributed or ‘published’ to
the parties.
If this had been done, the applicant, as one of the
parties, would have received a copy before finding out about it in
the affidavit
of the fifth respondent. Equally clear is that the
second award was distributed to the parties. It is this which
ultimately gave
rise to the present application.
[20]
The SCMP is silent on the issue of when it can be
said that the Tribunal has made a ‘final binding decision’.
The point
at which an award has legal effect must therefore be
determined without reference to the SCMP. The applicant submitted
that this
question was answered in
MEC for
Health, Eastern Cape, & another v Kirland Investments (Pty) Ltd
t/a Eye & Laser Institute
(
Kirland
SCA).
[7]
In that matter, two officials in the Health Department made different
decisions on applications to build and operate two private
hospitals.
The superintendent-general (the SG) decided to refuse them (his first
decisions) and instructed staff to draft letters
to that effect. The
letters were prepared but never signed or sent. The SG was then
placed on sick leave for six weeks. The person
appointed to act in
his absence approved the applications. The letter approving them was
sent to the respondent. On his return,
the SG purported to withdraw
the approvals. It was common ground that the approvals were flawed
because the replacement had simply
followed the instructions of the
MEC to do so and had not applied her own mind to the applications, as
she was obliged to do.
[21]
The Supreme Court of Appeal held that, because
the SG’s first decisions to refuse the applications had not
been communicated
to the respondent, they were not final and were
subject to change.
[8]
It was therefore open to the replacement to grant the applications.
Despite the flaws in their having been granted, those approvals
had
to stand because they had not been reviewed and set aside.
[9]
It was not open to the SG to withdraw them because he was
functus
officio
once the decisions of the replacement
had been communicated.
[22]
In arriving at this conclusion, the Supreme Court
of Appeal relied on two sources of authority. The first was
President of the Republic of South Africa &
others v South African Rugby Football Union & others
.
[10]
Here it was held:
‘In law, the appointment of a commission only takes place when
the President's decision is translated into an overt act,
through
public notification. In addition, the Constitution requires decisions
by the President which will have legal effect to
be in writing.
Section 84(2)
(f)
does not prescribe the mode of public
notification in the case of the appointment of a commission of
inquiry but the method
usually employed, as in the present case, is
by way of promulgation in the
Government Gazette
. The
President would have been entitled to change his mind at any time
prior to the promulgation of the notice and nothing
which he
might have said to the Minister could have deprived him of that
power. Consequently, the question whether such appointment
is valid,
is to be adjudicated as at the time when the act takes place, namely
at the time of promulgation.’
[11]
This,
of course, deals with legislation governing commissions, including
promulgation in the
Government Gazette
.
It deals, also, with Presidential decisions which must be reduced to
writing. But this does not apply to awards made by the Tribunal.

These are governed by general principles. The second authority relied
on in
Kirland
SCA,
more directly applicable to the present matter, is the general
proposition of Professor Cora Hoexter:
[12]
‘In
general, the
functus officio
doctrine applies only
to final decisions, so that a decision is revocable before it becomes
final. Finality is a point arrived
at when the decision is published,
announced or otherwise conveyed to those affected by it.’
Kirland
SCA was taken on appeal but this approach was not
contradicted by the Constitutional Court.
[13]
[23]
The first respondent submitted that the first
award of the Tribunal has legal effect. It reasoned that the first
award amounted
to a ‘decision’ as contemplated in PAJA
and has validity until set aside. A decision is defined as:
‘[A]ny
decision of an administrative nature made, proposed to be made, or
required to be made, as the case may be, under an
empowering
provision, including a decision relating to-
(a)     making, suspending, revoking or refusing
to make an order, award or determination;
(b)     giving, suspending, revoking or refusing
to give a certificate, direction, approval, consent or permission;
(c)     issuing, suspending, revoking or refusing
to issue a licence, authority or other instrument;
(d)    imposing a condition or restriction;
(e)     making a declaration, demand or
requirement;
(f)     retaining, or refusing to deliver up, an
article; or
(g)     doing or refusing to do any other act or
thing of an administrative nature,
and a
reference to a failure to take a decision must be construed
accordingly’.
The
first respondent sought authority from
Plover's
Nest Investment v De Haan.
[14]
Here, a letter drafted by an official who had not made, and could not
make, the decision in question, incorrectly conveyed the
decision
actually made. This was held to be a mere clerical act and did not
constitute administrative action which would substitute
the actual
decision of the council.
[24]
In dealing with the necessary elements of
administrative action,
Plover's Nest
accepted the seven main elements identified by Prof Hoexter,
summarising these as:
‘(a)
A decision; (b) by an organ of State (or natural or juristic person);
(c) exercising public power or performing a public
function; (d) in
terms of any legislation (or an empowering provision); (e) that
adversely affects rights; (f) and has a direct,
external legal
effect; and (g) which does not fall within one of the listed
exclusions (eg legislative, executive and judicial
functions).’
[15]
As
can be seen,
Plover's Nest
is entirely distinguishable from
the present matter. It is the ‘direct, external legal effect’
with which we are concerned
here, not whether or not a decision had
been made. According to
Kirland
SCA, a decision only has
external legal effect when communicated to those affected by it. I am
in respectful agreement with this
approach.
[25]
The position is thus clear. Because the first
award was not made known to the parties to the appeal, it had no
legal effect. The
decision of the Tribunal in the first award could
be revisited and changed by the Tribunal because it was not final.
There is no
dispute that it was sufficient for two of the three
members to make binding decisions on the part of the Tribunal. It is
accordingly
the second award which has legal effect. This means that
the Tribunal has not set aside the impugned decision or ordered that
the
bidding process begin
de novo
.
[26]
This means that the impugned decision stands
until set aside. As I have mentioned, the first respondent refused to
establish a properly
constituted Tribunal. As a result, as an
alternative to the review, the applicant initially sought a
mandamus
to require it to do so. This is no longer persisted in due to the
inordinate delays caused mostly by the obstructionist and dilatory

conduct of the first respondent. I do not consider it appropriate to
grant that kind of relief as a result and as a result of the

considerations set out below. In any event, the first respondent has
not opposed the review relief on the basis that the applicant
must
exhaust this internal remedy.
[27]
The reviewing and setting aside of the award to
the fourth respondent is sought pursuant to s 6 of PAJA. If
successful such
a review requires a declaration of unlawfulness.
[16]
This declaration is made in terms of s 172(1)
(a)
of the Constitution.
[17]
Section 172(1) reads:
‘When
deciding a constitutional matter within its power, a court-
(
a
)        must declare
that any law or conduct that is inconsistent with the
Constitution is
invalid to the extent of its inconsistency; and
(
b
)
may make any order that is just and equitable, including-
(i)         an order limiting
the retrospective effect of the declaration of invalidity;
and
(ii)       an order suspending the
declaration of invalidity for any period and on any conditions,
to
allow the competent authority to correct the defect.’
[28]
The first issue is whether the parties correctly
agree that the impugned decision should be set aside. I deal with
this because
the concession is not made by the fourth respondent,
even though it has not entered the lists. I do not propose to go into
much
detail. One of the requirements to qualify for being considered
was previous experience in manufacturing pre-cast concrete VIPs.
The
fourth respondent claimed to have five years’ experience in
doing so. It put up a letter in support. It contended that
this was
signed by both the fourth and sixth respondents. The letter purports
to appoint the fourth respondent in 2013 as a subcontractor
for the
2010 contract awarded to the sixth respondent. In it, the sixth
respondent ostensibly requires the fourth respondent to
manufacture
five VIPs per day over three years. In its affidavit, the sixth
respondent vigorously denied having sent that letter.
It correctly
pointed out that the letter is not on its letterhead. This is
contrary to the policy of the sixth respondent. Also,
the signature
purporting to be that of a director of the sixth respondent is not
that person’s signature. The fourth respondent
has not
challenged what the sixth respondent has said in this regard. If the
contention of the sixth respondent is correct, the
putting up of the
letter by the fourth respondent was fraudulent. It is also the only
basis put up in the bid of the fourth respondent
to support its claim
of experience. Both of these aspects would disqualify it for the
award of the project.
[29]
If that were not enough, the applicant points to
certain features of the financial statements put up by the fourth
respondent in
support of its tender. These show that the fourth
respondent only registered in 2013. It could therefore not have had
five years’
experience by 2016. For the two financial years
prior to February 2016, the only revenue source was from ‘rendering
of services’.
If it had manufactured the VIPs that it claimed
it did as subcontractor, its revenue would conservatively have been
R5.4 million
per year. In fact, its revenue amounted to R394 952
for the later year and R104 725 for the earlier. It only
incurred
employee costs of R59 243 and R16 022 respectively
for those two years. There are numerous other deficiencies which
ought
to have been immediately apparent to the first respondent. I do
not propose to detail them all. It is clear that the impugned
decision
must be reviewed and set aside. Paragraph 1 of the relief
sought must be granted.
[30]
Once a declaration of unlawfulness has been made
under s 172(1)
(a)
of the Constitution, the provisions of s 172(1)
(b)
are triggered. This empowers a court to grant an order which is just
and equitable.
[18]
It has been held that the content of a just and equitable order for
review matters is provided by s 8(1) of PAJA.
[19]
The relevant parts read:
‘The
court or tribunal, in proceedings for judicial review in terms of
section 6(1), may grant any order that is just and
equitable,
including orders -
. .
.
(c)
setting aside the administrative action and –
(i)         remitting the
matter for reconsideration by the administrator, with or without

directions; or
(ii)       in exceptional cases -
(aa)      substituting or varying the
administrative action or correcting a defect resulting from the

administrative action . . .
. . .
(f)
as to costs.’
[31]
I am aware that I am not confined to these
options. Section 8(1) of PAJA grants a wide discretion to make
an order which is
just and equitable. What is clear is that prayer 2
must be granted setting aside any contract which might have been
concluded pursuant
to the impugned decision. The real question before
me is whether to remit the matter for reconsideration in whole or in
part or
to substitute the impugned decision with one awarding the
project to the applicant.
[32]
The outcome of this question depends on the
existence or otherwise of factors making this an exceptional case.
These have been summarised
in the following terms:
[20]
‘The
first is whether a court is in as good a position as the
administrator to make the decision. The second is whether
the decision
of an administrator is a foregone conclusion. These
two factors must be considered cumulatively. Thereafter, a court
should still
consider other relevant factors. These may include
delay, bias or the incompetence of an administrator. The ultimate
consideration
is whether a substitution order is just and
equitable. This will involve a consideration of fairness to all
implicated parties.
It is prudent to emphasise that the exceptional
circumstances enquiry requires an examination of each matter on a
case-by-case
basis that accounts for all relevant facts and
circumstances.’
The
application of the exceptional case test guards against a court
falling foul of the separation of powers doctrine.
[21]
[33]
There are a number of matters to consider.
Although more than three years have passed since the impugned award
was made, the first
respondent has not said that a tender will not be
awarded. The first respondent has the two manufacturing plants. It
has made a
commitment to the manufacture of pre-cast concrete VIPs
for housing and rural projects. It went so far as to attempt to
re-advertise
the tender whilst this application was pending. In the
withdrawal affidavit, it makes no mention of any supervening
circumstances
which affect this commitment. In fact, in the
withdrawal affidavit, it argues that ‘the Tender itself should
be sent out
to re-advertisement.’ This signals its intention to
proceed with the project. Prior to its withdrawal of opposition, it
supported
the impugned award. If this application had not resulted in
the impugned award being set aside, the fourth respondent would have

been entitled and obliged to go ahead with the project. It can
therefore safely be accepted that the project will proceed.
[34]
The first respondent submits that the process
should begin again because the entire process was flawed. The only
averments made
in support of this submission are:
‘10.
In light of the nature of the allegations regarding the
irregularities the First Respondent
cannot guarantee that the
impugned conduct on its part was not a feature of the tender
adjudication process from the date all bids
(being responsive and
non-responsive) were received in response to the invitation to
tender.
11.
The First Respondent’s view is that the rights of all of the
bidders who participated
in the Tender are affected by the impugned
conduct and decision.’
This
provides no facts in support of its bare assertion that the entire
process was flawed. The applicant responded by pointing
out, without
challenge, that the only irregularities alleged in the papers are
those raised by the applicant. These disqualify
the fourth respondent
and the consortium. There are at least two major irregularities in
the bid of the consortium. It failed to
put up financial statements
of any members of the consortium. In addition, no members of the
consortium other than the sixth respondent
had any of the required
experience.
[35]
The case is earlier made out that none of the
other parties could be awarded the tender. The only one which
qualified was the ninth
respondent. But its price was R376 million,
more than one and a half times that of the applicant, whose price was
R212 million,
only slightly higher than that of the fourth
respondent. Accordingly, the applicant is the only tenderer to whom
the tender can
be awarded.
[36]
This brings into focus the capacity of the
applicant to perform its obligations. It has stated, without
challenge, that it is the
leading manufacturer of pre-cast concrete
products for infrastructure. It does so through an extensive network
of factories throughout
South Africa, Namibia and Botswana. Its
statement that the financial and technical capabilities of the
applicant are beyond dispute
has also not been challenged. The
financial statements put up support this. Its quote is the lower of
the two compliant tenderers.
It is in the ballpark of the quotes of
the non-compliant tenderers. If the tender is to be awarded, it is a
foregone conclusion
that is must be to the applicant. This much was
also conceded in argument by the first respondent.
[37]
It seems to me that I am in as good a position as
is the first respondent to award the tender. A further consideration
is that the
first respondent does not come to the court with clean
hands. In the withdrawal affidavit, it still does not want to award
the
tender to the only party demonstrably able to fulfil it. Not only
that, but it attempted to put blame on a previous municipal manager

when the applicant demonstrated that, during the course of the
dispute, a number of municipal managers have taken steps which
prejudiced the expeditious conclusion of the tender and this
application. The refusal at the outset to appoint a fresh Tribunal
is
one such issue. The refusal to acknowledge the clear inability of the
fourth respondent to be appointed is another. In those
circumstances,
there is a very real concern that there might be bias on the part of
the first respondent. If the matter were remitted,
it may well
generate a further application and further delay the delivery of this
critical service to the first respondent’s
communities. In the
light of all of these considerations, it is my view that the test for
exceptional circumstances is satisfied.
Paragraph 3 of the
relief sought must be granted.
[38]
The question of costs now comes into focus. Until
the withdrawal of the opposition of the first respondent, this
application was
opposed by it on the basis that there was in place a
valid award of the tender to the fourth respondent. The first
respondent has
engaged in sustained and obdurate obfuscation which
might well support an inference that persons representing it have
acted in
collusion with the fourth respondent. It unlawfully
contracted with the sixth respondent to manufacture VIPs at a time
when this
application was pending. It deliberately failed to disclose
to the applicant that the latter contract had been completed despite

a pertinent request for an assurance that it would not continue. This
resulted in an adverse costs order against the applicant.
The first
respondent later attempted to put the matter out to tender when the
outcome of this application had not been determined.
It refused to
comply with its obligations to furnish a complete copy of the record
of the proceedings leading to the impugned decision.
After it failed
to do so, when the applicant requested the documents of the sixth
respondent forming part of the record, it refused
to provide them. As
a result, the applicant was obliged to have recourse to the Promotion
of Access to Information Act.
[22]
When it did so, the first respondent did not respond within the 30
day period, requiring the applicant to lodge an appeal. Only
then did
the first respondent provide these records. In my view, this conduct
cries out for an expression of the displeasure of
the court. A
punitive costs order is appropriate.
[39]
As for the sixth respondent, it clearly had no
basis on which to seek the relief in the counter-application. This
must be dismissed
with costs. But it also opposed the relief sought
by the applicant that the tender should be awarded to the applicant.
It appeared
at the hearing and continued to oppose that aspect of the
relief. In this it made common cause with the first respondent.
Indeed,
it was the only party at the hearing which still actively
opposed that relief. It can be counted as fortunate indeed that the
applicant
does not seek a costs order against it in the main
application.
[40]
In the result, the following order issues:
1.       The decision
taken by the first and/or third respondents on 22 July 2016,
to award
tender number 002/2016 for the management of two pre-cast
concrete plants in Ulundi and Vryheid and the manufacture of
ventilated
improved pit latrine toilets for the first respondent’s
rural sanitation programme to the fourth respondent (the impugned

decision) is declared invalid and is reviewed and set aside.
2.       Any contract the
first respondent may have concluded with the fourth respondent
pursuant
to the impugned decision is declared invalid and of no force
and effect and is set aside.
3.       The first
respondent is directed to award tender number 002/2016 to the
applicant.
4.       The first
respondent is directed to pay the costs of the application on the
scale as between
attorney and client.
5.       The counter
application of the sixth respondent is dismissed with costs.
GORVEN
J
DATE
OF HEARING:
6 September 2019
DATE
OF JUDGMENT:
30 September 2019
FOR
THE APPLICANT:
JA Van der Westhuizen
instructed by Weavind & Weavind,
locally represented by Mason Incorporated.
FOR THE 1
ST
RESPONDENT: I Veerasamy
instructed by Stowell & Company.
FOR THE 6
TH
RESPONDENT: CB Edy
instructed by Prior & Prior Attorneys, locally
represented by J Leslie Smith & Company.
[1]
I will deal later with the status of the sixth respondent’s
tender.
[2]
Local Government: Municipal Finance Management Act 56 of 2003
.
[3]
Promotion of Administrative Justice Act 3 of 2000
.
[4]
I will deal with this issue later.
[5]
The chairperson referred in this regard to
MEC for Health,
Eastern Cape & another v Kirland Investments (Pty) Ltd t/a Eye &
Lazer Institute
2014 (3) SA 481
(CC) (
Kirland
CC).
[6]
Oudekraal Estates (Pty) Ltd v City of Cape Town & others
2004
(6) SA 222
(SCA)
.
[7]
MEC for Health, Eastern Cape, & another v Kirland Investments
(Pty) Ltd t/a Eye & Laser Institute (Kirland
SCA
)
2014
(3) SA 219 (SCA).
[8]
Kirland
SCA para 15.
[9]
Based on the principles established in
Oudekraal Estates
fn 6
above.
[10]
President
of the Republic of South Africa & others v South African Rugby
Football Union & others
2000 (1) SA 1
(CC) para 44.
[11]
References omitted. A reference was to the dictum to similar effect
in the matter of
Rajee v Zeerust Town Council
1938 TPD 283
at
290.
[12]
Cora Hoexter
Administrative Law in South Africa
2 ed (2012)
at 278.
[13]
In
Kirland
CC.
[14]
Plover's Nest Investment v De Haan
[2015] ZASCA 193
(30
November 2015).
[15]
Plover's Nest
para 19. The reference is to Cora Hoexter
Administrative Law in South Africa
2 ed (2012) at 197.
[16]
Allpay Consolidated Investment Holdings (Pty) Ltd & others v
Chief Executive Officer, South African Social Security Agency,
&
others
2014 (1) SA 604
(CC) para 25.
[17]
Constitution of the Republic of South Africa, 1996.
[18]
Bengwenyama Minerals (Pty) Ltd & others v Genorah Resources
(Pty) Ltd & others
2011
(4) SA 113
(CC)
paras 81-83.
[19]
Ibid.
[20]
Trencon Construction (Pty) Ltd v Industrial Development
Corporation of South Africa Ltd & another
2015 (5) SA 245
(CC) para 47.
[21]
Trencon
para 94.
[22]
Promotion of Access to Information Act 2 of 2000
.