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[2016] ZANCHC 52
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Jodan Construction (Pty) Ltd v Premier of the Northern Cape and Others (898/2016) [2016] ZANCHC 52 (25 May 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division, Kimberley)
Saakno
/ Case number:
898 / 2016
Datum
aangehoor / Date Heard:
19 / 05 / 2016
Datum
gelewer/Date delivered:
25 / 05 / 2016
In
the application of:
JODAN
CONSTRUCTION (PTY) LTD
Applicant
and
THE
PREMIER OF THE NORTHERN CAPE
First Respondent
THE
MEC FOR NC DEPARTMENT OF
ROADS
AND PUBLIC WORKS
Second Respondent
DOWN
TOUCH INVESTMENTS (PTY) LTD
Third
Respondent
Coram
:
Erasmus, AJ
JUDGMENT
ERASMUS,
AJ
INTRODUCTION:
[1]
The applicant (“Jodan”) lodged an urgent application
against first and second respondents (“the Premier”
and
“the Department” respectively) for an interim interdict
prohibiting the handing over of a road construction site,
to wit the
gravel section of MR947 road between Rusfontein and Laxing, Phase 2
(‘the tender’), pending the finalisation
of the review of
the award of the contract under the tender to the third respondent
(“Down Touch”).
[2]
vThe third prayer in the Notice of Motion is not in dispute and
pertains to the furnishing of the minutes and other documentation
relating to the proceedings, the decision and reasons for the
decision to award the contract to Down Touch. At the date of hearing
of this application the Department was in the process of delivery or
had already delivered the record to the Registrar of this
Court.
[3]
The fourth prayer pertains to the review and ancillary relief
pertaining to the decision of the Department.
BACKGROUND:
[4]
Jodan and Down Touch both submitted tenders for the contract under
the tender, which was to be awarded based on the highest
ranked
scoring, subject to certain conditions.
[5]
At a public meeting held during January 2016, the total bid price of
the tenderers was disclosed to those in attendance and
Jodan was
ranked first on the criterion of the total bid price, approximately
R6 million lower than its closest competitor.
[6]
The award of the contract had to take place by no later than 28 April
2016. On 20 April 2016, when perusing a certain
website, Jodan
noticed that the contract under the tender had been awarded to Down
Touch. As at 3 May 2016, the date on which
the founding
affidavit was deposed to, Jodan had not yet been informed that its
tender was unsuccessful. In terms of clause
F.3.16.2 of the
tender document, the Department was, after having notified the
successful tenderer, obligated to inform the other
tenderers that
their offers had been unsuccessful.
[7]
Having become aware of the award of the contract to Down Touch,
Jodan’s attorneys addressed a letter to the Department
on 21
April 2016. The Department was informed that Jodan had enjoyed
the most favoured bid status and that it was intending
to launch an
application to have the decision to award the tender to Down Touch
reviewed and set aside. Jodan sought an undertaking
that the
site would not be handed over to Down Touch. The Department did
not respond to the letter.
[8]
Jodan’s attorney contacted the head of the legal department of
the Department and informed him of the contents of the
letter dated
21 April 2016. It was communicated to the attorney that the
site would be handed over to Down Touch within seven
to fourteen
days. Jodan’s attorney was told to proceed with its
application.
[9]
On 29 April 2016 the Department informed Jodan’s attorney that
there was no further progress. Jodan then lodged the urgent
application on 3 May 2016. On 6 May 2016 it was postponed to 19
May 2016.
[10]
The Premier gave notice that it would abide by the decision of this
Court. The Department had initially opposed the application,
but
later withdrew its opposition. It consented to the relief for the
interim interdict and the delivery of the record to the Registrar,
but insisted that an additional paragraph be included in a draft
order, to wit that Jodan ‘
file
a review application within 15 days from the date of the information
so furnished
’.
It also insisted that the costs of the urgent application be costs in
the review application. Jodan agreed to the
proposed draft order.
[11]
Down Touch opposes the application although no relief was claimed
against it.
[12]
Down Touch did not pursue the issue of urgency and the merits of the
application for the interim interdict was argued
before me.
THE JOINDER OF DOWN
TOUCH:
[13]
It is stated in the founding affidavit that the applicant was advised
that it was not imperative to cite Down Touch in
the urgent
application as it does not have a direct and substantial interest,
i.e. a legal interest, in the outcome of the urgent
proceedings.
[14]
Adv. Vlok, on behalf of Jodan, submitted that the relief sought in
the urgent application before me had been settled
between Jodan and
the Department. It was submitted further that, as Jodan did not
claim any relief against Down Touch, there
is no
lis
between the
parties.
[15]
Down Touch opposes the application on the basis that it has a direct
interest in the outcome of the application as it
is the successful
contract. According to the deponent to the answering affidavit,
Down Touch had already had an agreement
with the Department and it
had taken several steps to execute upon the contract. It had
expended vast amounts of money and
would be severely prejudiced if
the implementation of a valid tender process were to be hindered or
delayed indefinitely.
[16]
It is trite that the test as to whether it is necessary to join a
party in proceedings depends
upon
the manner in which or the extent to which a court's order may affect
the interests of the third party. A party will
have a legal
interest
in
the subject matter of the litigation if the party will be affected
prejudicially by the judgment or by any order the court might
make,
or if such an order cannot be sustained or brought into effect
without prejudicing that party.
[1]
[17]
In this instance the contract was awarded to Down Touch and in terms
thereof it is entitled to be handed the site.
Any decision
which suspends or prohibits the handing over of the site will
necessarily prejudice Down Touch. This being so,
Jodan was
correct in joining Down Touch in the proceedings. Down Touch
has a direct and substantial interest in the outcome
of the interim
application and further litigation. As a party to the
proceedings it is entitled to oppose the relief sought
in these
proceedings before me.
THE INTERIM
INTERDICT:
[18]
The relief sought in this instance is a temporary measure which would
preserve the status quo pending the final determination
of the rights
of Jodan and Down Touch.
[19]
The requirements for an interim interdict are well established.
[2]
The applicant must show:
19.1
a
prima
facie
right,
even though open to some doubt;
19.2
a well-grounded apprehension of irreparable harm if the interim
relief is not granted;
19.3
that the balance of convenience favours the granting of the relief;
and
19.4
the absence of another remedy adequate in the circumstances.
[20]
An interim interdict is a discretionary remedy. The exercise of
the discretion entails judicial assessment of the
requirements and
more specifically the prospects of success in the main application
and the harm or prejudice that a party may
suffer, pending the
outcome thereof.
[3]
I must
seek to ensure, as far as is reasonably possible, that the party who
ultimately succeeds in the review application
will receive adequate
relief.
[4]
[21]
The difficulties facing a court having to exercise its discretion in
circumstances similar to these before me was eloquently
summarized by
Harms DP in
MOSEME
ROAD CONSTRUCTION CC v KING CIVIL ENGINEERING CC
[5]
:
“…
Courts
(including this court) are swamped with unsuccessful tenderers that
seek to have the award of contracts set aside and for
the contracts
to be awarded to them. The grounds on which these applications
are based are many. Sometimes the award
has been tainted with
fraud or corruption, but more often it is the result of negligence or
incompetence or the failure to comply
with one of the
myriad rules and regulations that apply to tenders.
Sometimes the successful tenderer is to be blamed for the
problem but then there are cases where he is innocent. Many
cases are bedevilled by delay, whether in launching the application
(and also because the facts were not readily available or easily
ascertainable) or because of delays and suspensions
inherent in the appeal procedure. If the applicant succeeds the
contract may have to be stopped in its tracks with possibly
devastating consequences for the government or the
successful tenderer or both. Conversely, if the works
are
allowed to be completed, the tenderer that should have been
awarded the tender would unjustly be deprived
of
the benefits of the contract. There are also cases where the
final judgment issues only after completion of the contract.
It
is not necessary to adumbrate further. Tendering has become a
risky business and courts are often placed in an invidious
position
in exercising their administrative discretion – a discretion
that may be academic in a particular case, leaving
a wronged tenderer
without any effective remedy.”
PRIMA
FACIE
RIGHT
[22]
In respect of the question whether an applicant has established a
prima
facie
right,
Conradie
J i
n
CORIUM
(PTY) LTD AND OTHERS v MYBURGH PARK LANGEBAAN (PTY) LTD AND OTHERS
[6]
summarized
the position as follows:
“
It
is not simply the right to bring the review proceedings. It is the
expectation of securing relief which, if it prima facie appears
to be legitimate, is entitled to protection.”
[23]
This Court is required to consider the merits and prospects of
success of the contemplated review proceedings. Should
such
prospect of success exist, a court should be inclined to exercise its
discretion to grant interim relief.
[7]
[24]
As stated by Smalberger JA in
SIMON
NO v AIR OPERATIONS OF EUROPE AB AND OTHERS
:
[8]
“
The
accepted test for a prima facie right in the context of an
interim interdict is to take the facts averred by the applicant,
together with such facts set out by the respondent that are not or
cannot be disputed and to consider whether, having regard to
the
inherent probabilities, the applicant should on those facts obtain
final relief at the trial. The facts set up in contradiction
by the
respondent should then be considered and, if serious doubt is
thrown upon the case of the applicant, he cannot succeed.”
[25]
Jodan, in its founding affidavit, alleged that it
had
scored the highest number of points in terms of the preferred scoring
method. There was no provision in the terms and
conditions of
the tender which had precluded or disqualified it from being awarded
the tender and that it stood to have been awarded
the contract. The
founding affidavit contains several references to the procurement
document. The deponent indicated that,
although not attached to
the founding affidavit because of the volume thereof, it would be
available during the hearing of the
application. The bound and
paginated document forms part of the application papers.
[9]
[26]
It
is Down Touch’s case that the applicant failed to establish
that it has a
prima
facie
right
to the relief, as it had submitted a non-responsive bid. It was
submitted that the applicant was disqualified because
it had not
disclosed other business interests, as provided for in clause 2.10 of
the tender document. In support, it had
attached copies of the
reports on the departmental bid evaluation committee meetings held on
4 and 7 April 2016 (Annexures ‘JC6’
and ‘JC7’
[10]
),
which were obtained from the Department on approximately 5 May 2016.
[27]
Jodan stated in
reply that it became aware that the Department had adjudicated the
bid as being non-responsive on perusal of Annexures
‘JC6’
and ‘JC7’, to the answering affidavit. Jodan
explained that it had indicated correctly that
it did not have any
interests in other related companies and that this was evident from
clause 2.10 from the procurement documents,
referred to earlier.
[28]
Mr. Grobler submitted that Jodan had to make out its case in its
founding affidavit. It could and should have obtained
the
minutes of the bid evaluation committee meetings before having lodged
the application. He submitted that the evidence
advanced in the
replying affidavit should be disregarded and, if not, Down Touch
should be given an opportunity to deal with it
in a second set of
answering affidavits.
[29]
Although it is trite that an applicant should make out its case in
its founding affidavit, this is subject to certain
exceptions.
The Department had not informed Jodan of the outcome of the tender
process. This application was lodged
on an urgent basis after
the Department had refused to accede to the request for undertaking
not to hand over the site to Down
Touch and having informed Jodan to
proceed with its application. The purpose of the application
was not only for the interim
interdict but also to obtain the record
of the decision making process for purposes of the review
application. Jodan was
not in possession of the record and thus
not aware of the reasons for its unsuccessful bid at the time the
founding affidavit had
been deposed to.
[30]
Jodan’s explanation in respect of the bid having incorrectly
been declared non-responsive, appears to be acceptable.
It
stated that it did not have other business interests to declare and
that it had indicated so in the tender documents.
This
explanation was in response to the issue raised in the answering
papers. Jodan proceeded with the application when the
handing
over of the site was imminent even though it was not in possession of
the relevant documentation at that stage.
[31]
From the papers, Jodan’s bid, calculated on the
preferred
scoring method contained in the terms and conditions of the tender,
appears
to have been the lowest in respect of price. There is no
indication in the papers
of
any other factor which precluded or disqualified it from being
awarded the tender.
[32]
In my view no serious doubt has been placed on Jodan’s case.
There is also nothing inherently improbable
in its version before me.
[33]
The Department, the organ of State clothed with the decision-making
powers in this instance, withdrew its opposition
and agreed to the
interim interdict being granted. It is thus not a clear
instance where judicial restraint against the exercise
of such powers
is required ahead of final adjudication of the case.
[11]
[34]
On the facts currently before me I conclude that Jodan should obtain
final relief.
I
am thus satisfied that it has established a
prima
facie
right,
although open to some doubt.
REASONABLE
APPREHENSION OF IRREPARABLE HARM
[35]
Irreparable harm or loss may be defined as the loss of property or
money in circumstances where recovery would be impossible
or
improbable.
[12]
[36]
Mr. Grobler submitted that the contract is re-measurable and as such,
Jodan can, if the contract is eventually awarded
to it, simply start
where Down Touch had left. The problem facing Jodan
then would be that, due to the passing
of time, it might become
impracticable to set aside the decision to award the tender to Down
Touch. It could also mean that
Jodan will not be paid for the
work already completed by Down Touch.
[13]
There
can be no doubt that it will then be improbable, if not impossible
for Jodan to recover any damages suffered as a result thereof.
THE
BALANCE OF CONVENIENCE
[37]
This requirement is closely linked to the other requirements set out
above. It is trite that a court must weigh
the prejudice to an
applicant if the interlocutory interdict is refused against the
prejudice to a respondent if it is granted.
This Court is
called upon to consider not only the interests of parties, but also
those of the general public whose members may
be affected.
[38]
The stronger the prospects of success in the review application, the
less need for the balance of convenience to favour
the applicant.
The weaker the prospects of success are, the greater the need for the
balance of convenience to favour the
applicant.
[14]
[39]
Mr. Grobler submitted
that
the balance of convenience does not favour Jodan. Down Touch had to
incur expenses in anticipation of the site handover and
in executing
upon the contract. It had to appoint sub-contractors and has
committed to the construction period of 12 months.
This is the
position any similar tenderer would be in.
[40]
Mr. Vlok submitted that the prejudice Jodan is to suffer will be far
greater than if Down Touch is allowed to execute
in terms of a
contract that was not awarded in accordance with the law.
Public interest requires that the tender be awarded
to the correct
tenderer and, in this instance, the lowest bidder.
[41]
If the review application does not succeed, Down Touch can proceed
with the contract. The only prejudice would have been
the delay
pending the finalization of the review proceedings. On the
other hand, if the interim relief is not granted and
the decision to
award the tender to Down Touch is set aside on review, Down Touch
would have executed and would have been paid
in terms of the contract
awarded to it by way of an invalid administrative act.
Prejudice to Jodan will be irreparable.
[42]
I do not agree with Down Touch’s contention in its answering
affidavit, that there appears to be no willingness to dispose
of the
review urgently. In this instance Jodan and the Department have
acted promptly. There appears to be no reason
why the review
application cannot be finalized without undue delay.
[43]
I am satisfied that
the
prejudice to Jodan, if the interlocutory interdict is refused, is
greater than the prejudice to Down Touch if it is granted
and that
the balance of
convenience therefor favours the granting of the interim relief.
NO
SUITABLE OR ADEQUATE ALTERNATIVE REMEDY
[44]
This requirement is closely linked with and follows as a
natural
corollary on proof of irreparable
harm.
The available alternative remedy
must
be adequate in the circumstances, be ordinary and reasonable, be a
legal remedy and also grant similar protection to a party.
[15]
[45]
The facts and decisions in
MOSEME
and
MILLENNIUM WASTE
supra
illustrate
the difficulties tenderers face in obtaining effective relief to
vindicate infringed rights. Given the facts of
this application
before me, I am satisfied that there is no suitable or adequate
alternative remedy available to Jodan.
[46]
It is in the interest of all parties and the public at large that the
review application should be adjudicated without delay.
Courts
should, to the extent possible, give priority to matters of this
nature and the Registrar should, when allocating a date
for the
review application, take cognisance hereof.
[16]
I
make the following order:
1.
Pending
finalisation of the review proceedings, set out in prayer 4 of the
Notice of Application dated 3 May 2016, the first and
second
respondents are interdicted and restrained from handing over to the
third respondent and/or any person or entity the site,
being the
gravel section of the MR947 Road between Rusfontein and Laxey, Phase
2, the upgrading of which is the subject of tender
number
DRPW044/2015 issued by the Northern Cape Department of Roads and
Public Works (‘the tender’).
2.
The first and second respondents are within 15 (FIFTEEN) days after
the date of this order, if it has
not yet been done, to furnish to
the Registrar of this Court the record of the proceedings and all
minutes and other documentation
relating to the proceedings, the
decision for awarding the contract under the tender, the award of the
contract under the tender
to the third respondent and reasons for the
aforesaid and to notify the applicant in writing when this has been
done.
3.
The applicant may within 10 (TEN) days after the Registrar has made
the record available, by delivery
of a notice and accompanying
affidavit, amend, add to or vary the terms of its notice of
application dated 3 May 2016 and supplement
the supporting affidavit.
4.
Further papers in the review application shall be filed strictly in
accordance with the prescribed periods.
5.
If the applicant fails to so apply to the Registrar to allocate a
date for the hearing of the review
application within the appropriate
prescribed periods, any respondent may do so immediately upon the
expiry of such period and
notify the applicant and any other party in
writing of the date allocated by the registrar.
6.
The costs relating to the proceedings of 6 May 2016 are reserved for
later determination.
7.
The costs relating to the proceedings of 19 May 2016 shall be costs
in the review application.
__________________
ERASMUS,
SL
ACTING
JUDGE
On
behalf of the Applicant:
Adv. J. Vlok
(oio Van de Wall & Partners)
On
behalf of 3
rd
Respondent:
Adv.
S. Grobler (oio Duncan & Rothman)
[1]
Standard
Bank of South Africa Ltd v Swartland Municipality
2011
(5) SA 257 (SCA)
par [9];
Collin
v Toffie
1944
AD 456
at
464;
Amalgamated
Engineering Union v Minister of Labour
1949
(3) SA 637
(A)
at
661
[2]
Setlogelo
v Setlogelo
1914
AD 221
[3]
Knox
D’Arcy Ltd v Jamieson
1996
(4) SA 348 (SCA)
[4]
Pikoli
v President and Others
2010
(1)
SA 400
(GNP) at 403-404
[5]
(385/2009)
[210] ZASCA 13 (15 March 2010) par [1]
[6]
1993
(1) SA 853
(C) at 856C; See also
Ladychin
Investments (Pty) Ltd v South African National Roads Agency Ltd
2001
(3) SA 344 (N)
[7]
Searle
v Mossel Bay Municipality
(1237/09)
[2009] ZAWCHC 9 (12 February 2009) para [6]
[8]
[1998] ZASCA 79
;
1999
(1) SA 217
(SCA) at 228G-H
[9]
VOL
1: P 30
– 101 and VOL
2: P 102
- 219
[10]
VOL
3: P 256 and P 263
[11]
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012
(6) SA 223
(CC)
[12]
Erasmus:
Superior Court Practice D6-19 to D6-20
[13]
Moseme
supra
para
[19] – [20];
Millennium
Waste Management (Pty) Ltd v Chairperson of the Tender Board:
Limpopo Province & others
2008
(2) SA 481 (SCA)
[14]
Camps
Bay Residents and Ratepayers Association v Augoustides
2009 (6) SA 190 (WCC)
[15]
Martin
v Kiesbeampte, Newcastle Afdeling, en 'n Ander
1958
(2) SA 649
(D)
at
654
[16]
Millennium
Waste
supra
para
[34]