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[2017] ZAFSHC 179
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France N.O. and Another v Matjhabeng Local Municipality (3634/2016) [2017] ZAFSHC 179 (12 October 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION,
BLOEMFONTEIN
Case
number:
3634/2016
In
the matter between:
PETER
FRANCE
N.O.
1
st
Plaintiff
GERALD
JACK
FRIEDMAN
N.O.
2
nd
Plaintiff
and
MATJHABENG
LOCAL
MUNICIPALITY
Defendant
HEARD
ON:
18 AUGUST
2017
JUDGMENT
BY:
VAN SCHALKWVK, AJ
DELIVERED
ON:
12 OCTOBER
20
17
[1]
The Defendant files for a notice of exception to the Plaintiffs'
particulars of claim in that it lacks the necessary averments
to
sustain a cause action.
•
There is no allegation
contained in the particulars of claim specifying the time, terms,
backgrounds and circumstances of any procurement
sought by the
Defendant, to which the plaintiffs' tendered and became the
successful tenderer(s).
•
The Plaintiffs'
particulars of claim do not disclosed the allegation(s) that the
Plaintiffs' submitted tender documents to procure
the rendering of
services in accordance with the applicable law(s) regulating
procurement of services by an Organ of State like
the Defendant.
•
The Plaintiffs'
particulars of claim do not disclose allegation(s) to the effect that
the Plaintiffs' became the successful tenderer(s).
•
The Plaintiffs have
therefore concluded invalid, irregular, unlawful and abstract
agreements with the Defendant.
•
The Defendant, as an
Organ of State, does not contract for services in a manner alleged by
the Plaintiffs'.
[2]
The Defendant, as an independant Organ of State like a private entity
has a right to regulate its own procedure hence the MFMA
Act. In
Louw
v TLC of Greater Germiston 1997 (8) BCLR at
1062 Wat 1064
A, Roux J
held:
"A
convenient starting in the untrammelled right of anybody, private or
statutory, to regulate its own procedure".
[3]
Of more significance is the Defendant's right to effectuate a policy
it adopted in
R v Port of London Authority, Ex Parte Kynoch Ltd
(1919) 1 KB
176
at
184,
the Court
said:
"there
are on the one hand cases where a tribunal in the honest exercise of
its discretion has adopted a policy ..., if the
policy has been
adopted for reasons which the tribunal may legitimately entertain, no
objection could be taken to such a
course".
[4]
The conduct of the Defendant in contracting with the Plaintiffs' is
provided for and regulated by the Supply Chain Management
Policy.
[5]
In
Municipal Manager: Qaukeni Local Municipality and Another v FV
General Tracing CC
201O (1) SA 356
(SCA) at 361, para 13
E
-
F,
it was held that failure to implement a supply chain
management policy does not mean that a municipality contracting with
an external
supplier is therefore relieved of the obligation to act
transparently and to follow a fair, competitive and costs
effective
bidding process. To the contrary: a failure to comply with
these precepts renders the contract invalid and open nullification by
a Court, no matter the consequential harm suffered by the external
supplier. The municipality may not submit to an unlawful contract
and
must resist the contractor's attempt to implement it. If the
contractor applies for an order enforcing performance of the
contract, the municipality may ask for a declaration of unlawfulness
by way of a counter-application and need not proceed by way
of an
application for a review.
[6]
The Defendant is a Municipality established in terms of Chapter 7,
ie, section 155 of the Republic of South Africa Constitutional
Act
108 of 1996; "the Constitution" read with the applicable
provisions of the Local Government Structures Act 117 1998
"Structures Act''.
[7]
The Defendant is an Organ of State as defined in section 239 of the
Constitution collated with section 195 (2) of the Constitution.
[8]
When an Organ of State like the Defendant contracts for goods or
services, it must do so in terms of Section 217 of Constitution
conflated with section 195 of the Constitution collated with the
applicable provision of the Local Government: Municipal Finance
Management Act 56 of 2003, "MFMA".
[9]
The Plaintiff contends that a contract between an Organ of State such
as the defendant and a supplier amounts to administrative
action.
See:
Kwa Sani Municipality v Underberg-Symbol Community Watch
Association (180/2014) [20151 ZASCA 24 (20 March 2015) at para 31;
Municipal
Manager: Qaukeni Local Municipality & Another v FV General
Trading CC
201O (1) SA 356
(SCA) at para 26;
State
Information
Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd
2017 (2) SA 63
(SCA) at para 16;
[10]
The First four of the agreements where concluded in 2008 and the
fifth was concluded in 2009. Accordingly, the administrative
action
taken by the Defendant in awarding such contracts occurred either in
2008 or 2009.
[11]
It is a basic principle that a pleading should be so phrased that the
other party may reasonably and fairly be required to
plead thereto.
See:
Trope v South African Reserve Bank
1992 (3) SA 208
(T) AT 210G;
[12]
Pleadings must therefore be lucid and logical and in an intelligible
form. The cause of action must plainly appear from the
factual
allegations made.
[13]
It is incumbent upon the Plaintiff only to plead a complete cause of
action which identifies the issues upon which she seeks
to rely and
on which evidence will be led.
See:
Cilliers et al Herbstein & Van Winsen: The Civil
Practice
of the High Courts of South Africa (fifth edition) Volume 1 at
page 635.
[14]
Each cause of action which the Plaintiff seeks to rely upon should
have been set out separately in such a way as to enable
the Defendant
to assess what was claimed from it in each case.
See:
Stafford v Special Investigating Unit
1999 (2) SA 130
(E) at 138
.
"Causes
of action are not in the first instance dependent on questions of
law. They require the application of legal principle
to a particular
factual matrix. The test on exception is whether on all possible
readings of the facts, no cause of action is made
out. It is for the
Defendant to satisfy the court that the conclusion of law for which
the Plaintiff contends cannot be supported
upon every interpretation
that can be put to the facts."
[15]
In Mc Kelvey v Cowan N.O.
1980 (4) SA 525
(Z) at 5 - 6 it is stated
that:
"it
is a first principal in dealing with matters of exception that, if
evidence can be led which can disclose a cause of action
alleged in
the pleadings, that particular pleading is not excipiable. A pleading
is only excipiable on the basis that no possible
evidence led on the
pleading can disclose a cause of action."
[16]
The excipient has the duty to persuade the court that upon every
interpretation which the pleading can reasonably bear, no
cause of
action is disclosed.
See:
Amakhaya Construction v
Nelson Mandela Metropolitan Municipality
2004 (2) ALL SA
619
(SE) at 623
F
[17]
Besides the fact that a party wishing to rely on illegality must,
plead it, the issue as to whether or not the original agreements
are
irregular cannot be dealt with by way of exception.
See:
Harms Amlers Precedents of Pleadings
8
th
Edition at 123
[18]
It is now trite law that if a public body believes one of its
administrative acts is invalid it may not simply ignore it. The
rationale for this is that even invalid administrative acts are
treated as valid until they are set aside.
[19]
A public body such as the Defendant when contending for invalidity is
thus duty bound to approach the court to have it
set aside.
See:
MEC for Health, Eastern Cape & Another v Kirland Investments
(Pty) Ltd t/a Eye & Laser Institute 2014 (3)
SA
481 (CC)
[20]
In the Constitutional Court Justice Cameron stated as follows:
"Once
the subject has relied on a decision, government cannot, barring
specific Statutory authority, simply ignore what it
has done. The
decision, despite being defective, may have consequences that make it
undesirable or even impossible to set aside.
That demands a proper
process, in which all factors for and against are properly weighed."
[21]
The Defendant would have to apply in terms of PAJA for an order
setting aside the administrative action but due to the
inordinate delay since the contracts were concluded it is doubtful
whether any such application would ever be successful or in
the
unlikely event of the 180 day time period being extended,
the court in all probability will exercise its
discretion in
refusing to grant a review application, having regard to the
principle of finality, prejudice to the
other contracting
party and the delay.
See:
Chairperson: Standing Tender Committee
v
JFE
Sapela
Electronics (Pty) Ltd
2008
(2) SA 638
(SCA) at
para
28
[22]
In the case of
Aurecon South Africa (Pty) Ltd v City of Cape Town
(2038/2014)
[20151
ZAQSCA 209
(9
December2015)
The
municipality launched a review application 532 days after the award
of a tender. In regard to the delay and to the knowledge
of the Organ
of State, the following was stated by Maya ADP at para 16:
"[16)
The decision challenged by the City and the reasons therefore were
its own and were always within its knowledge. Section
7(1)
unambiguously refers to the date on which the reasons for
administrative action become known to the parties seeking
its
judicial review. The plain wording of these provisions simply does
not support the meaning ascribed to them by the court
a quo,
ie that the application must be launched within 180 days after
the party seeking review became aware that the administrative action
in issue was tainted by irregularity. That interpretation would
automatically entitled every aggrieved applicant to an unqualified
right to institute judicial review only upon gaining knowledge that a
decision (and its underlying reasons) of which he or she
had been
aware all along, was tainted by irregularity, whenever that might be.
This result is untenable as it disregards the potential
prejudice to
the respondent (the appellant here) and the public interest in the
finality of administrative decisions and the exercise
of
administrative functions. Contrary to the court
a quo's
finding
in this regard the City far exceeded the time frames stipulated in
s7(1) and did not launch the review proceedings within
a reasonable
time. In that case, it clearly needed an extension as envisaged in
9(1)(b) without which the court
a quo
was otherwise precluded
from entertaining a review application."
[23]
For obvious reasons the court was not prepared to condone the delay.
[24]
in addition to the aforegoing, the
mere
fact that there has
been non-compliance with Legislative and Regulatory procedures, does
not in itself ineluctably lead to the conclusion
that the contract is
irregular, unlawful and should be set aside.
[25]
I am therefore convinced that an unlawful administrative action
cannot indirectly be challenged by way of an exception and,
therefore
the Defendant has to plead that the agreements were concluded in
contravention of procurement systems.
[26]
The following order is issued:
The
exception is dismissed with costs.
_____________________
VAN
SCHALKWYK, AJ
On
behalf of the 1st & 2nd Plaintiffs' :
Adv A BEYLEVELD SC
Instructed by:
MATSEPES INC
BLOEMFONTEIN
On
behalf of the Defendant
Adv TK MATHOPO SC
Adv SM LEBALA
Instructed by:
MOROKA ATTONREYS
BLOEMFONTEIN