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[2017] ZAFSHC 39
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Cybko Security Services CC v Dihlabeng Local Municipality and Others (A49/2016) [2017] ZAFSHC 39 (16 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
Case
number: A49/2016
In
the matter between:
CYBKO
SECURITY SERVICES
CC
Applicant
and
THE
DIHLABENG LOCAL MUNICIPALITY
1st Respondent
FOUR
RIVERS TRADING 82 CC t/a ZERO
TOLERANCE
SECURITY
2nd Respondent
CONFIGEN
CC
3rd Respondent
CORAM:
DAFFUE, J et CHESIWE,
AJ
HEARD
ON:
20 FEBRUARY 2017
JUDGMENT
BY:
DAFFUE,
J
DELIVERED
ON:
16
MARCH 2017
I
INTRODUCTION
[1]
The central issue for determination in this application is the
lawfulness of a tender process conducted by the Dihlabeng Local
Municipality. The review application by the unsuccessful bidder
was issued on 23 February 2016 and although it was meant
to be an
urgent application, several delays occurred in the litigation
process,
inter
alia
insofar as the entity which was eventually accepted to be the
successful bidder, Configen CC had to be joined as a party to the
proceedings. On 19 September 2016 the application was removed
from the roll, apparently as the application papers of one
of the
judges to whom the matter was allocated were not in order. The
matter was eventually set down for hearing on 20 February
2017.
II
THE PARTIES
[2]
The applicant is Cybko Security Services CC, a registered close
corporation specialising in the delivery of security services.
I shall refer to applicant as Cybko Security herein later.
[3]
First respondent is the Dihlabeng Local Municipality (“Dihlabeng”),
duly established in terms of the
Local Government: Municipal
Structures Act, 117 of 1998
.
[4]
Second respondent is cited as Four Rivers Trading 82 CC t/a Zero
Tolerance Security. This entity was incorrectly cited
as a
close corporation as it is common cause that it is a private
company. It is acknowledged under oath in the second
respondent’s
answering affidavit that it trades as Zero
Tolerance Security. This aspect will be dealt with
infra
.
[5]
Third respondent is Configen CC, a close corporation who also trades
as Zero Tolerance Security. Mr Tefo Warnick Montsitsi
(“Montsitsi”) is the sole director of second respondent
and the sole member of the third respondent. For the
sake of
convenience I shall hereinafter refer to second respondent as Four
Rivers and to third respondent as Configen.
III
THE RELIEF CLAIMED
[6]
Save for the prayer for condonation based on urgency which is
irrelevant at this stage, Cybko Security seeks the following relief
ex
facie
the notice of motion:
“
2.
The First Respondent’s decision of December 2015, alternatively
January 2016 to award Public Tender:
APPOINTMENT
OF SERVICE PROVIDER FOR THE PROVISION OF PHYSICAL SECURITY SERVICES
FOR A PERIOD OF THREE YEARS CONTRACT NO. MUN03/2015
to the second respondent is reviewed and set aside, alternatively is
declared unlawful and set aside.
3.
Any Service Level Agreement concluded between the First and Second
Respondent, dependent upon the
factual existence of the decision
mentioned in prayer 2 above and concluded in execution of said
decision, is struck down and set
aside, alternatively is declared
unlawful and set aside.
4.
The First Respondent is ordered to conclude a Service Level Agreement
with the Applicant, for the
services to be rendered and in accordance
which the Applicant’s tender.
5.
The Second Respondent is ordered to pay the costs of this
application. Alternatively, and
in the event of the First
Respondent opposing, then and in that case, that both the First and
Second Respondents be ordered to
pay the costs of the application,
jointly and severally, payment by one, the other to be absolved.”
It
will be evident to the reader that not a word is said of Configen.
Configen was joined as a party on receipt of Four Rivers’
answering affidavit. The application is opposed by Dihlabeng,
Four Rivers and Configen.
IV
THE
ESSENCE OF THE DISPUTE BETWEEN THE PARTIES
[7]
Initially it was Cybko Security’s case that the decision to
award the bid to Zero Tolerance was unlawful for the following
reasons. Instead of calculating a bid price for a period of
three years (thirty six months), Zero Tolerance made its calculations
based on a period of one month only. Dihlabeng decided to
simply multiply the monthly amount by thirty six on the assumption
that it could correct the arithmetical error. According to
Cybko Security this was unlawful in that all bidders were required
to
discount factors such as inflation, the increase of labour costs and
increase in sundry charges such as fuel prices, etc. in
submitting a
responsible and responsive bid. This, according to Cybko
Security, necessarily meant that bidders had to compute
different
rates for every year and incorporate these in the globular amount
ultimately tendered. It concluded therefore that
Dihlabeng
should have discarded the Zero Tolerance bid simply because it did
not adhere to the bid criteria and requirements.
The decision
to award the contract to Zero Tolerance was therefore irrational and
ultra
vires
an empowering provision of the Supply Chain Management Policy,
unfair, arbitrary and capricious. The acceptance of the bid,
as
Cybko Security submitted,
“
robbed
the process of attributes of fairness, openness and competitiveness.”
[8]
On receipt of the record of decision Cybko Security filed a
supplementary affidavit. It referred to the confusion apparent
from the bid document of Configen t/a Zero Tolerance. Details
of the confusing bid document will be provided when I evaluate
the
evidential material. What happened
in
casu
was so confusing that the bid was awarded to the wrong entity.
Although Dihlabeng tried to rectify the mistake by addressing
the
letter of 20 January 2016 to Configen, trading as Zero Tolerance and
confirming that its tender had been accepted, Dihlabeng
was not
prepared to accept the confusion and come clear on the issue.
Instead, it proceeded throughout the filing of papers
herein,
including heads of argument, to submit that the tender was in fact
awarded to Four Rivers and not Configen.
Such attitude,
to borrow from Leach JA in
Medirite
(Pty) Ltd v South African Pharmacy Council and Others
[2015]
ZASCA 27
at para
[14]
is “
shrouded
in mystery
.”
V
THE AUTHORITIES RELATING TO REVIEWS
[9]
Section 217 of the Constitution is the starting point for an
evaluation of the proper approach to an assessment of the
constitutional
validity of State procurement processes. It
reads as follows:
“
1.
When an organ of state in the national, provincial or local sphere of
government, or any other institution
identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is
fair,
equitable, transparent, competitive and cost-effective
.
2.
Subsection
(1) does not prevent the organs of state or institutions referred to
in that subsection from implementing a procurement
policy providing
for - (a) categories of preference in the allocation of contracts;
and (b) the protection or advancement
of persons, or categories of
persons, disadvantaged by unfair discrimination.
3.
National
legislation must prescribe a framework within which the policy
referred to in subsection (2) must be implemented.”
[10]
In order to comply with s 217(3) the legislature adopted the
Preferential Procurement Policy Framework Act, 5 of 2000 (“the
PPPFA”). “Acceptable tender” is defined in s
1 of the PPPFA as
“
any
tender which, in all respects, complies with the specifications and
conditions of tender as set out in the tender document”
.
In
Chairperson:
Standing Tender Committee and Others v JFE Sapela Electronics (Pty)
Ltd and others
[2005] 4 ALL SA 487
(SCA) at paragraph [19] Scott JA pointed out that
the definition of
“
acceptable
tender”
must
be construed against the background of s 217 of the Constitution
and continued as follows:
“
In
other words, whether the tender in all respects complies with the
specifications and conditions set out in the contract documents
must
be judged against these values.”
In
terms of s 2(1)(f) of the PPPFA
“
the
contract must be awarded to the tenderer who scores the highest
points
(calculated
in accordance with s 2(1)(b)),
unless
objective criteria in addition to those contemplated in paragraphs
(d) and (e) justify the award to another tenderer.”
[11]
The
Local Government: Municipal Finance Management Act, 56 of 2003
is
equally applicable. Procurement is dealt with in Chapter 11 and
the wording of
s 112(1)
echoes that of s 217(1) of the Constitution.
[12]
A tender process implemented by an organ of State is an
“
administrative
action”
within
the meaning of the Promotion of Administrative Justice Act, 3 of 2000
(“PAJA”). See:
Logbro
Properties CC v Bedderson NO and Others
2003
(2) SA 460
(SCA) at para [5]. Therefore the applicant
in
casu
was
entitled to a lawful and procedurally fair process.
Furthermore, it is well established that the executive in all spheres
are constrained by the principle that they may exercise no power and
perform no function beyond those conferred upon them by law.
This is the doctrine of legality. See:
Sapela
Electronics supra
at para [11].
[13]
The proper legal approach pertaining to procurement processes was set
out in the following
dictum
by Froneman, J in
Allpay
Consolidated v Chief Executive Officer, SASSA
2014 (1) SA 604
(CC) at para [22] which I quote:
“
[22]
This judgment holds that:
a.
The
suggestion that ‘inconsequential irregularities’ are of
no moment conflates the test for irregularities and their
import;
hence an assessment of the fairness and lawfulness of the procurement
process must be independent of the outcome of the
tender process.
b.
The
materiality of compliance with legal requirements depends on the
extent to which the purpose of the requirements is attained.
c.
The
constitutional and legislative procurement framework entails supply
chain management prescripts that are legally binding.
d.
The
fairness and lawfulness of the procurement process must be assessed
in terms of the provisions of the Promotion of Administrative
Justice
Act, 3 of 2000 (PAJA).
e.
Black
economic empowerment generally requires substantive participation in
the management and running of any enterprise.
f.
The
remedy stage is where appropriate consideration must be given to the
public interest in the consequences of setting the procurement
process aside.”
[14]
Froneman, J continued in
All
Pay
supra
at
paras [28] and [29] to summarise the approach to be followed by a
court considering a review application and I quote:
“
The
proper approach is to establish, factually, whether an irregularity
occurred. Then the irregularity must be legally evaluated
to
determine whether it amounts to a ground of review under PAJA.
This legal evaluation must, where appropriate, take into
account the
materiality of any deviance from legal requirements, by linking the
question of compliance to the purpose of the provision,
before
concluding that a review ground under PAJA has been established.”
Once
this exercise has been completed the court must consider the
practical difficulties which may flow from declaring the
administrative
action constitutionally invalid, bearing in mind the
just and equitable remedies provided for in the Constitution and
PAJA.
[15]
In
Bel
Porto School Governing Body and Others v Premier, Western Cape
[2002] ZACC 2
;
2002 (3) SA 265
(CC) Chaskalson CJ stated at para [89] for a decision
to be justifiable,
“…
.
it should be a rational decision taken lawfully and directed to a
proper purpose.”
Ponnan
JA, relying on
Pharmaceutical
Manufacturers Association of South Africa and Another: In re Ex
Parte President of the Republic of South Africa
and Others
[2000] ZACC 1
;
2000 (2) SA 674
(CC) expressed himself as follows:
“
It
is well established that an incident of legality is rational
decision-making. It is a requirement of the rule of law that
the exercise of public power should not be arbitrary. It
follows that decisions must be rationally related to the purpose
for
which the power was given.”
See
Minister
of Home Affairs v Somali Association of South Africa
2015 (3) SA 545
(SCA) at para [18]. However, as Nugent JA
pointed out in
Minister
of Home Affairs and Others v Scalabrini Centre
2013 (6) SA 421
(SCA) at para [65]:
“…
an
enquiry into rationality can be a slippery path that might easily
take one inadvertently into assessing whether the decision
was one
the court considers to be reasonable. As appears from the
passage above, rationality entails that the decision is
founded upon
reason - in contradistinction to one that is arbitrary - which
is different to whether it was reasonably made.
All that is
required is a rational connection between the power being exercised
and the decision, and a finding of objective irrationality
will be
rare.”
[16]
In
Metro
Projects CC v Klerksdorp Local Municipality
2004 (1) SA 16
(SCA) Conradie JA said the following in para [13]:
“
In
the
Logbro
Properties
case
supra
,
paras [8] and [9] at 466H - 467C, Cameron JA referred to the
'ever-flexible duty to act fairly' that rested on a provincial tender
committee. Fairness must be decided on the circumstances of each
case. It
may
in given circumstances be fair to ask a tenderer to explain an
ambiguity in its tender; it
may
be fair to allow a tenderer to correct an obvious mistake; it
may,
particularly in a complex tender, be fair to ask for clarification or
details required for its proper evaluation
.
Whatever is done may not cause the process to lose the attribute of
fairness or, in the local government sphere, the attributes
of
transparency, competitiveness and cost-effectiveness.”
(emphasis
added.)
In
Metro
Projects
the Supreme Court of Appeal set aside the award by the municipality
to the successful bidder and I quote from para [14]:
“
A
high-ranking municipal official purported to give the ninth
respondent
(the
eventual successful tenderer)
an
opportunity of augmenting its tender so that its offer might have a
better chance of acceptance by the decision-making body.
The
augmented offer was at first concealed from and then represented to
the mayoral committee as having been the tender offer.
It was
accepted on that basis. The deception stripped the tender
process of an essential element of fairness: the equal
evaluation of tenders. Where subterfuge and deceit subvert the
essence of a tender process, participation in it is prejudicial
to
every one of the competing tenderers whether it stood a chance of
winning the tender or not.”
See
also in this regard
Premier,
Free State and Others v Firechem Free State (Pty) Ltd
2000 (4) SA 413
(SCA) at para [30] in respect of the requirement that
competitors should be treated equally.
VI
EVALUATION
OF THE EVIDENCE
[17]
It is clear that Zero Tolerance did not bid as a joint venture, but
confirmatory documents were attached to the bid document
allegedly
indicating compliance by both Four Rivers, (a company) and Configen
(a close corporation). It is
inter
alia
alleged in the bid documents that Configen was a dormant entity and
therefore could not present financial statements, but in the
same
document reliance is placed on the fact that this entity’s
turnover for the previous financial year was R2m.
[18]
Certificates were attached to the bid document issued by the
Companies and Intellectual Property Commission in respect of both
Four Rivers and Configen. The same applies to certificates
issued by PSIRA (the Private Security Industry Regulatory
Authority).
In terms hereof the date of registration of
Configen is stated as 26 October 2015 and registration number 2525507
was allocated
to it. Four Rivers’ registration number
issued by PSIRA is 1271168. A further aspect causing confusion
is that
the two certificates were issued by PSIRA on the same day, to
wit 16 October 2015, indicating that Four Rivers had 34 active
employees
qualified as grade B to grade E security guards and exactly
the same number of employees with the same grading appears on the
certificate
of Configen. The trade name of Four Rivers is
indicated as Zero Tolerance and that of Configen as Zero Tolerance
and Private
Investigation.
[19]
On the first page of the bid document the bidder is required to set
out its full name and whether it is a close corporation,
company,
joint venture, consortium or sole entity. Whoever filled out
the form, incorrectly spelt Configen as “Confeogn”
and
referred to it as Zero Tolerance without any reference whatsoever to
the status of the enterprise or enterprise number.
Further on
in the bid document and on numerous occasions the name of the bidder
is referred to as Zero Tolerance and the position
of Montsitsi who
signed the various documents is indicated as director (instead of
member). I must say that the bid documents
indicate at various
places that the bidder is indeed a close corporation with reference
to the correct registration number thereof.
Notwithstanding the
auditor’s letter attached to the bid documents, indicating that
Configen was dormant and thus not trading,
it is recorded on page 27
of the documents that the turnover for the previous year was R2m and
the expected turnover for the current
financial year was R5m with
reference
inter
alia
to six contracts which the bidder was in the process of executing for
various organisations, including Dihlabeng. Notwithstanding
the
auditor’s allegation pertaining to a dormant entity, the bidder
attached two letters from third parties indicating that
Zero
Tolerance were handling their safety and security matters and could
be recommended. The versions of the auditor and
the bidder
cannot both be correct. The one version must be false.
[20]
The bidder also attached several screening validation reports from
EMPS, a credit bureau, but the client in all these reports
are
referred to as Four Rivers 82 t/a Zero Tolerance without indicating
whether this entity is a close corporation, company, etc.
No
doubt the certificates do not apply to Configen.
[21]
On 6 January 2016 Cybko Security filed an internal appeal against the
award of the tender to Zero Tolerance Security.
Two points were
raised,
inter alia
that the entity was not registered with the
Company’s Intellectual Property Commission or with PSIRA and
furthermore it objected
to the increase of the bidding price which
was indicated to be R1 138 720,00, but increased by Dihlabeng to
R40 993 920,00.
On receipt of the internal appeal,
the Acting Municipal Manager of Dihlabeng wrote a letter to Cybko
Security dated 19 January
2016 which I quote
verbatim
:
“
1.
Responsiveness
1.1
Please
note that the company Zero Tolerance Security it’s a trading
name under registration 2004/021689/07 Four Rivers Trading
82 it’s
a legal name.
1.2
The
company is also registered with PSIRA under registration 1271168.
2.
Tender bidding Price
In
terms of standard conditions of tender F.3.9 (ie Arithmetical Errors)
the Municipality is allowed to correct such errors.
In this
case the recommended bidder, calculated his price based on monthly
rates. Hence the municipality corrected it for
the full tender
period. (ie. R1 138,720,00 x 36 months = R40,993,920,00).”
[22]
The PSIRA registration number quoted in the letter of 19 January 2016
is that of Four Rivers Trading 82 (Pty) Ltd, registration
number
2004/021689/07. Clearly Dihlabeng and all its entities such as
the Bid Evaluation Committee and the Bid Adjudication
Committee were
under the impression that the successful bidder was Four Rivers, a
private company with the company and PSIRA registration
numbers as
stated in the letter. As indicated, this confusion created by
Dihlabeng caused Cybko Security to cite Four Rivers
as second
respondent, although incorrectly as a close corporation and not a
private company. Throughout the proceedings,
i.e. from the
filing of Dihlabeng’s answering affidavit to the filing of
heads of argument on its behalf, Dihlabeng maintained
that the bid
was awarded to Four Rivers. I quote the following from
Dihlabeng’s answering affidavit:
1.
“
The
fact of the matter is that the Second Respondent’s bid was in
all respects the best bid…”
[para
18.2]
2.
“
The
second Respondent submitted a bid for the three year period in the
amount R40 993 920,00 which was the lowest bid.”
(para
19.3)
3.
“
The
tender was awarded to the Second Respondent and the First Respondent
has no indication to abdicate its responsibilities or obligations
in
so far as this aspect is concerned.”
(para
58.3)
[23]
On 10 May 2016 first respondent’s heads of argument, prepared
by Adv FW Botes SC, were filed. At that stage Configen
was
still not a party to the proceedings. Throughout the heads of
argument various submissions were made that the bid was
awarded to
second respondent and I quote just one such submission from paragraph
[2] of the heads:
“
The
First and Second Respondents oppose this application on the basis
that the tender was correctly awarded to the Second Respondent,
by
virtue of the fact that the Second Respondent scored the highest
points.”
[24]
As strange as it may sound, Dihlabeng never tried to obtain leave to
file a further affidavit to set the facts straight and
no new heads
of argument were filed on behalf of its counsel, notwithstanding the
joinder of Configen and the evidential material
placed before the
court clearly showing the confusion.
[25]
When Configen was joined as a party to the proceedings it came up
with a totally different story. Strange as it may sound,
the
same person who deposed to the answering affidavit of Four Rivers,
Montsitsi, also deposed to the answering affidavit of Configen.
Just like Dihlabeng tried to do, Configen tried its best to show that
Cybko Security could in any event not be awarded the bid
because its
tax matters were not in order. No doubt Montsitsi was advised
that attack was the best form of defence.
I shall deal with the
allegations in respect of Cybko Security’s failure to comply
with its obligations towards SARS
infra
.
[26]
In paragraph 9 of Configen’s answering affidavit the following
is stated:
“
During
2015, and when the business affairs of both Configen and Four Rivers
were discussed with entities’ accountants, I was
advised to
separate the security services of Four Rivers from its other business
activities and to render those security service
activities in
Configen. Based upon the aforesaid advice, Configen was
re-instated on the 29
th
of September 2015, as it was at that stage in deregistration since
2013 as its annual returns were not submitted. After having
being re-instated, these activities in respect of the security
services were relocated to Configen in order for Configen to submit
a
bid in respect of the tenders that were called for by the
municipality.”
[27]
Although Montsitsi tried to persuade us that all relevant
certificates, such as those of PSIRA were issued to Configen and
not
Four Rivers, this is clearly not the case as shown
supra
.
Another disturbing factor is the fact that although a totally
different registration number was issued to Configen by PSIRA,
i.e.
2525507, Dihlabeng all its entities and Acting Municipal Manager were
so confused with the various certificates and documentation
presented
to them, that it was recorded that the bid had been awarded to Four
Rivers with its private company registration number
and PSIRA
registration number 1271168.
[28]
Montsitsi failed to explain how Configen which was deregistered for
about two years and dormant could execute security contracts
on
behalf of various organisations and even made a turnover of R2m for
the previous financial year and expected a R5m turnover
for the
current financial year. Although the advice of the auditors may
make sense from a financial point of view, it is
disturbing that
Configen failed to file a confirmatory affidavit from the financial
expert to confirm the advice. These facts
were also not placed
before the various committees of Dihlabeng. It should have been
disclosed, but the bidder failed to
explain this and/or to provide
any detail in the bid document.
[29]
I am satisfied that material irregularities have occurred during the
evaluation process. Dihlabeng, acting through its
Bid
Evaluation and Bid Adjudication Committees as well as its Acting
Municipal Manager were so confused with the bid documents
of Configen
that the bid was initially awarded to a different entity who
ex
facie
the documents placed before me did not even bid. In awarding
the bid to Four Rivers an irrational decision was taken.
Four
Rivers did not even submit a bid and therefore it did not submit
“
an
acceptable tender”
as
defined in s 1 of the PPPFA referred to
supra
.
The about-turn of the Acting Municipal Manager by stating in a later
letter that the bid was in fact awarded to Configen
(and not to Four
Rivers as communicated earlier) is contradicted by him in his
answering affidavit deposed to on behalf of Dihlabeng,
reiterating
that the bid was actually awarded to Four Rivers. Whatever
Dihlabeng decided, such decision is irrational, unlawful
and
hopelessly irregular and stands to be set aside.
[30]
The fact that Dihlabeng merely multiplied the bid price of Configen
by thirty six to get to a figure for a period of three
years appears
at first sight to be of a purely arithmetical nature. However,
as stated by Cybko Security it would be wrong
to do so and I am
satisfied with the reasons advanced by Cybko Security which I am not
going to repeat again. The effect
hereof is that Configen and
the other competitors such as Cybko Security were not treated
equally. See
Metro
Projects
and
Firechem
Free State supra
.
For this reason as well as the decision of Dihlabeng should be set
aside.
[31]
Adv Grobler who appeared for Cybko Security did not officially ask
for an amendment of the notice of motion to substitute second
respondent (Four Rivers) with third respondent (Configen) in
paragraphs 2 and 3 thereof. However the issue has been fully
canvassed and I am satisfied that the orders to be made in this
regard cannot prejudice any of the parties.
VII
SECTION 8 OF PAJA ENQUIRY
[32]
Bearing in mind the attitude of Dihlabeng towards applicant has
clearly set out in its answering affidavit, I considered granting
relief in terms of paragraph 4 of the notice of motion by directing
Dihlabeng to conclude a service level agreement with the applicant
in
respect of the rendering of security services. Dihlabeng went
as far to submit that Cybko Security is a
persona
non grata
.
There is little doubt that Dihlabeng is not interested to enter into
any agreement with applicant. In my view a clear
perception of
bias has been created. However, the issues raised in the next
paragraph cannot be disregarded.
[33]
Cybko Security tried to show that its tax affairs are in order, but I
am not convinced. It initially relied on a tax
clearance
certificate attached as annexure “REP1” to its replying
affidavit, but this document is inapplicable insofar
as it relates to
an entity known as Cybko Trading with a totally different
registration number. Although a tax clearance
certificate was
issued to Cybko Security with the correct registration number as is
apparent from the document attached to Configen’s
answering
affidavit, the correctness of this certificate is doubted, insofar as
judgment has been taken by SARS against Cybko Security
on 5 November
2014 for a total tax debt of R218 225,41 in respect of
outstanding PAYE, UIF and SDL. Cybko Security’s
allegation that it has settled its debt towards SARS in respect of
VAT might be correct, but it did not deal with the other three
taxes
for which judgment was obtained.
[34]
I considered the requirements set out in
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa Limited and Another
2015
(5) SA 245
(CC)
,
but
am not convinced that Cybko Security should be granted the relief
sought. It would be wrong to direct Dihlabeng to enter
into a
contract with Cybko Security whilst a cloud is figuratively speaking
hanging over its head.
[35]
Mr Grobler requested us, in the event of the court refusing to grant
relief in terms of paragraph 4 of the notice of motion,
to refer the
matter back to Dihlabeng, directing it to merely re-evaluate the bids
instead of embarking on a new bidding process.
Such approach
might not be fair, especially insofar as both Cybko and Configen will
have to present further documents, bearing
in mind the aspects
referred to
supra,
whilst
other potential bidders should be allowed an opportunity to lodge
fresh bids as well. It will be just, equitable and
fair to all
previous bidders as well as prospective bidders to allow everyone the
opportunity to present their bids once a fresh
invitation for tenders
has been advertised.
VIII
COSTS
[36]
Cybko Security has obtained substantial success in the application
and there is no reason why it should not be granted its
costs, such
costs to be paid by Dihlabeng and Configen, jointly and severally,
the one to pay the other to be absolved.
[37]
The application against Four Rivers cannot succeed merely because it
is common cause that Four Rivers was not the successful
bidder and
should not have been cited as a party to these proceedings.
However, it is apparent that both Dihlabeng and Four
Rivers should be
blamed for the fact that Four Rivers were cited, especially bearing
in mind Dihlabeng’s stance taken in
the answering affidavits as
well as prior to the filing of the application. Four Rivers caused
the confusion by allowing Configen
to rely on its documentation in
the bidding process. This confused Dihlabeng in particular.
When Configen was joined
and presented a different version than that
of Dihlabeng, Cybko Security decided probably out of caution to
maintain its position
and not to withdraw against Four Rivers.
In normal circumstances Cybko Security would be ordered to pay the
costs of Four
Rivers as the successful litigant. However,
matters are more complicated
in
casu
as
Dihlabeng continued throughout to rely on the version that the
contract was in fact and in law awarded to Four Rivers.
[38]
In exercising my discretion and bearing in mind that Four Rivers and
Configen are Montsitsi’s chosen vehicles for doing
business, he
being the sole director and shareholder of Four Rivers and the sole
member of Configen who also made use of the same
attorneys and
counsel, I have decided to make no costs order against Cybko
Security. I considered granting an order in terms
whereof
Dihlabeng and Configen be liable for all of Cybko Security’s
costs, but concluded that it would be more appropriate
and fair to
all the parties if such order is not made. Instead, these two
parties will be held liable for Cybko Security’s
costs incurred
in its application against Four Rivers until receipt of Four Rivers’
answering affidavit. Cybko Security
and Four Rivers shall be
liable for their own costs in respect of the application brought
against Four Rivers after receipt of
Four Rivers’ answering
affidavit.
[39]
The costs of 19 September 2016 has stood over for later
adjudication. All the parties were ready to argue the matter
on
that date, but unfortunately one of the judges’ application
papers were not 100% in order, causing them to decline to
hear the
matter as we were informed by counsel. The parties are
ad
idem
that they should accept responsibility for payment of their own costs
wasted in the process.
IX
ORDERS
[40]
Therefore the following orders are made:
1.
First
respondent’s decision to award a tender to third respondent for
the provision of physical security services for a period
three years
under contract number MUN03/2015 is reviewed, declared unlawful and
set aside.
2.
The
service level agreement concluded between first and third respondents
in execution of the decision in paragraph 1
supra
is declared unlawful and set aside.
3.
First
respondent is directed to re-advertise the aforesaid tender in
respect of security services within 60 days from the date of
this
order.
4.
The
orders of invalidity in paragraphs 1 and 2
supra
are suspended until completion of the tender process contemplated in
paragraph 3
supra
,
where after it will take effect.
5.
Each
party is responsible for the payment of its own costs in respect of
the events of 19 September 2016.
6.
First
and third respondents shall pay applicant’s costs of the
application, including the costs incurred in its application
against
second respondent until receipt of second respondent’s
answering affidavit, such costs to be paid jointly and severally,
the
one to pay the other to be absolved.
7.
Applicant
and second respondent shall be liable for their own costs pertaining
to the application brought against second respondent,
except for the
costs order made in paragraph 6
supra
.
______________
J.
P. DAFFUE, J
I
concur
______________
S.
CHESIWE, AJ
On
behalf of applicant:
Adv.
S.
Grobler
Instructed
by:
Willers
Attorneys
BLOEMFONTEIN
On
behalf of 1
st
respondent:
Adv. F.W. Botes SC
Instructed
by:
Phatsoane
Henney Attorneys
BLOEMFONTEIN
On
behalf of 2
nd
and 3
rd
Respondent:
Adv. W. J. Groenewald
with
Adv. C.D. Pienaar
Instructed
by:
Kramer
Weihmann & Joubert
/eb