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[2016] ZAKZDHC 46
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Westwood Insurance Brokers (Pty) Ltd v Ethekwini Municipality (8221/16) [2016] ZAKZDHC 46 (8 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, DURBAN
CASE
NO: 8221/16
In the matter between:
WESTWOOD
INSURANCE BROKERS (PTY) LTD
APPLICANT
and
ETHEKWENI
MUNICIPALITY FIRST
RESPONDENT
CHAIRPERSON: ETHEKWENI
MUNICIPALITY
BID
EVALUATION COMMITTEE
SECOND
RESPONDENT
CHAIRPERSON: ETHEKWENI
MUNICIPALITY
BID
ADJUDICATION
COMMITTEE THIRD
RESPONDENT
NC SOUTH WEST BROKERS
CC FOURTH
RESPONDENT
WANDA FINANCIAL
CONSULTANTS (PTY) LTD FIFTH
RESPONDENT
WATERSURE (PTY)
LTD SIXTH
RESPONDENT
INDWE RISK SERVICES
(PTY) LTD SEVENTH
RESPONDENT
MDUDUZI
CHRISTOPHER NKOMO N.O.
[1]
EIGHTH
RESPONDENT
ORDER
The
following order is granted:
[1]
The first respondent Ethekwini shall serve a copy of this judgment
and order on the office of the Mayor, the office of the Municipal
Manager by 20 December 2016.
[2]
The Mayor and the Municipal Manager shall deliver affidavits
(attested to by themselves or any person having knowledge) in which
they furnish the name and contact details of the officials from the
insurance and treasury departments, the various SCM officials,
the
Contracts Manager and the Divisional Manager for Water and Sanitation
and any other person who participated in the awarding
Contract Number
WS6678 for ‘water loss insurance for underground water leaks of
individual dwelling units’ to the fourth
respondent
(NC South West Brokers CC) by 20 January 2017.
[3]
The Mayor and the Municipal Manager shall deliver a copy of this
judgment and order on the persons they name in the affidavits
referred to in the preceding paragraph, the fourth and eighth
respondents, Mr Sibusiso Shezi and Silindile Blose
by
20 January 2017.
[4]
The persons referred to in the preceding paragraph and any other
person who participated in the awarding the above Contract,
or
who have an interest or information about the awarding the above
Contract, are given leave to deliver affidavits giving evidence
to
assist the court to determine the reason for awarding the Contract.
[5]
The fourth and eighth respondents, Silindile Blose,
the
persons named in the affidavits delivered by the Mayor
and
the Municipal Manager and any other person who participated in
support of awarding the above Contract
to
the fourth respondent are directed to show cause on affidavit why an
order should not be made that:
he, she, it or they,
jointly or severally, the one paying the others to be absolved,
shall indemnify Ethekwini by paying all costs
de bonis propriis
Ethekwini incurred in this litigation.
Ethekwini shall serve
this order on the office of the Auditor-General established in terms
of s 181(1)(e) of the Constitution
of the Republic of South Africa,
1986.
Ethekwini
shall pay the applicant’s (Westwood’s) costs that were
reserved on 2 September 2016, 29 September 2016 and
7 October 2016.
[6]
Proof of service of the judgment and order in terms of paragraph 3
shall be filed in court by 31 January 2017.
[7]
The affidavits referred to in paragraphs 74 and 75 shall be served on
the court and all other persons affected by such affidavits,
in the
case of
paragraph
4 by 31 January 2017
paragraph
5 by 14 February 2017
[8]
Any person wishing to be heard in open court shall indicate by letter
to reach the office of the Registrar of the High Court,
Durban by 20
February 2017, failing which the matter will be disposed off in
chambers on the documents delivered by that date.
JUDGMENT
D
PILLAY J:
Introduction
[1]
The applicant Westwood Insurance Brokers (Westwood) applied to
interdict Ethekwini Municipality (Ethekwini) the first respondent
from awarding a tender to the fourth respondent, NC South West
Brokers CC (South West). It sought to interdict South West from
implementing the tender. The tender was for
‘
water
loss insurance for underground water leaks of individual dwelling
units (WS 6678)’. Only Ethekwini opposed the application.
[2]
I heard the parties first on 29 September 2016 when I interdicted
Ethekwini and
South West from implementing
the tender and any contract flowing from it. I granted a
status
quo
order for Westwood to continue
providing insurance brokering services until the return day. I
directed that the respondents to furnish
the court with the document
purporting to comply with clause 3 of the conditions and
specifications of the tender.
[3] On the return day 7
October 2016 after hearing the parties for the second time, I
adjourned the matter to my roll for 15
th
November 2016 for
adjudication of the review of the tender award. The
status quo
was extended to that date. Costs were reserved. The parties were
directed to email to Court by 10
th
October 2016 a proposed
order setting out abridged time periods in terms of Uniform Rule 53.
They did so and I granted the order
in chambers.
[4] On the return date 15
November 2016, the third hearing, Ethekwini’s counsel Mr
I
Pillay
informed the court that he had no mandate other than to
consent to certain relief. Consequently, I granted the following
order:
‘
1.
By consent:
(a) The award of the
tender described by the first respondent as “
Water loss
insurance for underground leaks of individual dwelling units (WS
6678)
” (hereinafter referred to as “the tender”)
by the first respondent to the fourth respondent is set aside.
(b) The decision of the
eighth respondent handed down on 15 June 2016 dismissing the appeal
against the first respondent’s
award of the tender to the
fourth respondent is set aside.
(c) The first respondent
is ordered to pay the costs of the application for the First Order
Prayed and the Second Order prayed,
such costs to include those
consequent upon the employment of senior counsel.
2. Not by consent:
(a) The first respondent
is directed to appoint the applicant as the successful tenderer under
the tender.
(b) The question is
reserved as to any further order that the Court may make regarding
the recovery of costs by the first respondent
from its officials
involved in the process of the tender.
(c) Any person having an
interest in the further order contemplated in the preceding paragraph
of this order may make written submissions
to the Court in this
regard by 22 November 2016.’
[5]
Ordinarily, Ethekwini’s consent would have obviated a reasoned
judgment. However, the concession of the review came only
after its
counsel vigorously defended the award on constitutional and other
grounds.
[2]
The matter is one of
public interest. Furthermore, Ethekwini did not consent to my order
awarding the tender to Westwood. Hence
the parties are entitled to
reasons; and I am obliged to justify the orders I granted and may
still grant. I turn first to sketch
the background and identify the
issue in dispute. Thereafter I respond to submissions made on 29
September 2016 that resulted in
the first order before scrutinising
the decisions of the second respondent, i.e. the Bid Evaluation
Committee (BEC) and the eighth
respondent who determined the appeal.
Background
[6] The Bid Specification
Committee approved the conditions and specifications of the tender on
23 April 2015. The tender was first
advertised on 4 May 2015 and
again on 29 May 2015 for reasons irrelevant to this application. By
the closing date of 26 June 2015
five tenderers had submitted
tenders. Although the BEC resolved to award the tender to South West
on 16 November 2015, more than
a month later a letter dated 25
January 2016 was faxed and posted by registered mail to unsuccessful
bidders informing them that
South West was the successful tenderer.
Westwood received the registered slip for this notification on 17
February 2016. On 19
February 2016 it collected its mail from its
post office box despite stipulating its physical address on the
tender form.
[7]
On 23 February 2016 Westwood objected to the award. It also protested
about the delay in receiving the notification, which resulted
in the
time expiring for noting an appeal. Furthermore, Ethekwini provided
no reasons to Westwood why South West’s tender
was successful
and Westwood’s was not. Wanda Financial Consultants (Pty) Ltd,
the fifth respondent received a similar response.
[3]
[8] On 29 February 2016
Westwood supplemented its appeal. Despite the eighth respondent
dismissing the appeal and upholding the
award to South West on 15
June 2016, Westbrook received the appeal judgment only on 25 July
2016.
[9] Westwood’s
attorneys wrote to Ethekwini on 4 August 2016 informing the latter of
its intention to ultimately apply to
review the outcome of the appeal
but requested in the meantime an undertaking not to proceed with the
award until the review was
finalised, otherwise it would apply to
interdict the award. On 10 August 2016 Ethekwini replied that it had
already entered into
a contract with South West and the contract was
due to start on 01 October 2016.
[10] On 23 August 2016
Westwood signed its affidavits and launched the application the
following day. On 2 September 2016 Moodley
AJ adjourned the matter to
19 September 2016 with directions for the exchange of pleadings. With
the leave of the senior judge
on duty the matter was enrolled on the
opposed motion roll during recess. As these dates were arranged by
agreement between the
parties the question of urgency fell away.
However, the chronology was necessary to determine whether Westwood
was entitled to
the remedy it sought by way of application
proceedings instead of review proceedings in terms of the
Promotion
of Administrative Justice Act 3 of 2000
and its rules. This question
too fell away to the extent that Ethekwini consented to the review.
The chronology remains relevant
to set the background for the orders
I made and intend to make.
Issue in dispute
[11] The singular
challenge to the award of the tender to South West is whether the
latter complied with clause 3 of the conditions
and specifications of
the tender. Clause 3 stipulated the following using a bold font for
emphasis:
‘
Registration
offers underwritten by insurance companies licenced to operate in
South Africa will only be considered. A letter of undertaking
from
the insurance company must accompany the offer.
The
underwriter must be registered with the Financial Services Board
(FSB)
.’
[12] On information
received from its sources in the marketplace Westwood contended that
South West failed to comply with clause
3 in that the letter it
submitted with its bid was not, firstly, underwritten by an insurance
company licenced to operate in South
Africa; secondly if the
underwriter was some entity bearing the name ‘Marsh’ it
was not registered with the FSB; and
thirdly the ‘Marsh’
letter did not amount to an undertaking to underwrite insurance for
water loss. Westwood was strengthened
in its contentions that South
West had failed to comply with condition 3 when it received a
memorandum from Mr Sibusiso Shezi dated
21 August 2015, which was
attached to the decision of the eighth respondent.
Submissions on 29
September 2016
[13] Counsel for
Ethekwini acknowledged that the contested process was a tender but
submitted that s 217 of the Constitution of
the Republic of South
Africa, 1996 did not apply to this kind of tender because the word
‘procurement’ in s 217 should
be interpreted to refer to
those transactions in which an organ of state or government
administration buys goods and services.
It does not apply to
transactions in which the administration or organ of state
facilitates the provision of services. Ethekwini
was importing the
services of an insurance broker; Ethekwini and not the broker was the
beneficiary. Ethekwini was not paying for
those services; it was
merely providing a desk on its premises for a broker to contract with
water users within the municipality.
So submitted counsel.
[14]
Ethekwini’s own literature confirms that the national
legislation contemplated in s 217(3) would apply to this transaction.
For instance, clause 16 of the specifications refers to the
Preferential Procurement Policy Framework Act 5 of 2000
; the long
title of this Act reads thus:
‘
To
give effect to section 217 (3) of the Constitution by providing a
framework for the implementation of the procurement policy
contemplated in section 217 (2) of the Constitution; and to provide
for matters connected therewith
.’
Consequently as a matter
of law, procurement of water loss insurance is a supply of services
expressly falling within procurement
law. Furthermore it would defeat
the aims of such law to give ‘procurement’ a restrictive
meaning.
[15] As for there being
no payment by Ethekwini to the successful bidder, it turned out
during argument that this was factually
incorrect. Ethekwini charges
a fee of 8.5% of the premiums collected from residents to cover its
administrative costs. In terms
of clause 9 of the tender conditions
Ethekwini collects each month the insurance premiums on behalf of the
successful tenderer
and pays over the net amount plus VAT. Both the
successful tenderer and Ethekwini receive financial reward for their
supply of
services.
[16] Additionally, there
is an incalculable value placed on the trust that residents bestow
upon Ethekwini as their municipality
to promote their best interests
in awarding a tender for the supply of insurance brokerage services
to protect them from losses
when water pipe leakages occur, losses
that the poor in the townships are unlikely to afford, providing
insurance cover that would
otherwise be beyond their reach.
[17] Initially counsel
maintained that no contract came into being between Ethekwini and the
broker, the only contract being between
the broker and the residents.
Eventually he conceded that the end of the tender process would lead
to a contract between the successful
tenderer and Ethekwini. This
much is obvious from clause 6 of the tender and its title ‘The
Conditions of Contract and Specifications
for this tender’.
[18] Counsel persisted
that residents were free to arrange their own water insurance; they
were not bound to use the broker to whom
Ethekwini awarded the
tender. This may be so legally. Practically, terminating the
insurance without notice and before they could
reinsure themselves
would have been highly prejudicial to the insured. Furthermore,
mainly the employed and well off would be able
to afford water loss
insurance.
[19] Consequently I found
that as a matter of law, fact and the letter and spirit of s 217 of
the Constitution, procurement of water
loss insurance was regulated
under procurement law.
[20] Ethekwini then
contended that clause 3 was peremptory. Counsel drew an analogy
between the tender in this case and the tenders
in the construction
industry where quotations and quantifications would emerge subsequent
to the tender being awarded. One has
to consider the wording of
clause 3, the nature of the tender and the context in which
procurement law is applied to assess whether
his interpretation is
sound.
[21]
The wording
‘
will only be considered’
and ‘must accompany the offer’ and the bold font to
emphasise that the underwriter must
be registered with the FSB leave
no room for any other interpretation but that clause 3 quoted above
was directory. If a tenderer
failed to comply strictly with clause 3
its bid should be disqualified instantly without any further
consideration. This was also
Mr Shezi’s unequivocal advice to
Ethekwini.
[22] Counsel for Westwood
submitted that Marsh Professional Indemnity Insurers form a part of
Marsh Insurance Brokers, which apparently
is a well-known
international firm of insurance brokers. However, neither was
registered in South Africa as an insurance company
when South West
lodged its bid. In substantiation Westwood attached to its founding
affidavit as Annexure C a list of insurers
registered with the FSB as
at 15 August 2016 at 5h48 pm. No entity named Marsh was on the list.
[23]
The legal advisor to Ethekwini who deposed to the opposing affidavit
on its behalf disputed
‘
the
authenticity or accuracy’
of
Annexure C contending that Westwood did not disclose from where it
procured this document
[4]
despite it stating clearly in its founding affidavit that it came
off
the FSB website. Instead she attached as EM1 ‘The Terms of
Engagement Agreement for Marsh (Pty) Ltd’ contending
that this
document
‘
clearly
refers to Marsh as a licenced financial service provider bearing
registration number FSB 8414.
’
[5]
[24] The legal advisor
substantiated neither her source of Annexure EM1 nor whether EM1 was
the document that South West submitted
in purported compliance with
the tender specifications. Seemingly she was not convinced of the
reliability of her own information
regarding Annexure EM1 when she
stated:
‘
If
this information is incorrect then the first respondent will need to
reconsider its position. However, the first respondent evaluated
the
tender on the strength of being informed that Marsh was a registered
financial services provider.’
[25]
Allowing for the urgency of delivering the answering affidavit one
would ordinarily accept this response. However, considering
that she
submitted it for the limited purpose of demonstrating March’s
FSB registration she should have checked Annexure
C’s veracity
against the list of insurers on the FSB website,
[6]
produced a list from her own search to discredit Westwood’s
list or explained why EM1 was more reliable. Any of Ethekwini
officials, the BEC and the eighth respondent could easily have
verified Annexure C by contacting the FSB. Furthermore Annexure
EM1
was dated 1 January 2014. That date was irrelevant for the purposes
of proving registration as at the date of submitting the
tender
effective from 1 July 2015. Therefore Ethekwini’s challenge to
Annexure C was not genuine.
[26] The entire dispute
turned on what document South West submitted and whether it was
responsive to clause 3 of the specifications.
Producing the document
would have been dispositive of the application. When Ethekwini was
unable to do so after the lunch adjournment
on 29 September 2016 I
directed that it produce the document before 7 October 2016 at 12h00
and adjourned the matter to that date.
[27]
Westwood’s supporting affidavits from Riaz and Althaf Rajab
settles any doubt as to whether South West had secured an
underwriter
in compliance with clause 3. From these supporting affidavits it
emerged that around April 2016 and subsequent to the
award, Mr
Mluleki Mathemba, managing director of South West, met the Rajab
brothers confidentially to request New National Insurance
Company
(New National), the incumbent provider of the underwriting services
on behalf of Westwood, to continue rendering such services
on behalf
of South West. In that meeting the Rajab brothers learnt that South
West was not satisfied with its erstwhile underwriter
because it did
not have a good BEE
[7]
rating.
Furthermore as South West did not have any infrastructure set up for
the water scheme in the way of technology, underwriting
and claims
handling, South West wanted New National’s assistance in this
regard too. The Rajab brothers on behalf of New
National refused to
underwrite South West and to become involved in its service delivery
to Ethekwini.
[28] Ethekwini had no
knowledge of these discussions. South West did not oppose the
application. Hence the allegations in the affidavits
of the Rajab
brothers went uncontested. The brothers’ evidence exposed the
inadequacy of South West’s underwriting
insurance provision. It
became clear from Westwood’s founding and supporting affidavits
that the award to South West did
not secure the residents and
ratepayers against water loss. Furthermore the award of the tender to
South West was, without more,
highly questionable.
[29]
Citing
City
of Tshwane Metropolitan Municipality v Afriforum and another
[2016] ZACC 19
[8]
Ethekwini
contended that in deference to the separation of powers harm the
court should not appoint a service provider. Who then
would protect
the residents and ratepayers against the risks of water loss?
This was a conundrum calling for a practical
and immediate solution.
[30]
As for the separation of powers harm, undoubtedly all institutions
including litigation, must do what they are meant to do.
[9]
But when litigating institutions fail to do what they are meant to
then litigation itself is strained to its limits. To this end
the
authorities are firmly set against a court substituting an
administration’s decision and appointing an unsuccessful bidder
except in the clearest of cases
[10]
or if the ‘tribunal or functionary has exhibited bias or
incompetence to such a degree that it would be unfair to require
the
applicant to submit to the same jurisdiction again.'
[11]
Substitution
‘
in
the context of what is just and equitable in the circumstances' is
authorised by s 172 of the Constitution.
[12]
[31]
The circumstances in this case meet all the requirements for the test
for substitution in
Trencon Construction (Pty) Ltd v Industrial
Development Corporation of South Africa Ltd and another
2015
(5) SA 245
(CC) para 34-47 and the cases cited there. My finding that
South West did not submit proof of underwriting insurance that met
the
peremptory requirements of clause 3 of the conditions of tender
left Westwood as the only responsive tender. Confirmation also came
from Mr Shezi who had narrowed down the potential awardees to South
West and Westwood. Thus if Ethekwini had to make the appointment
it
would also have had to appoint Westwood. Even if it elected to
restart the tender process afresh or take over the insurance
itself,
Ethekwini would have had to retain Westwood until a new insurer was
in place. I say ‘retain’ because Westwood
was the
incumbent insurer and Ethekwini had retained it after its previous
contract had expired and well into the period of the
current
contested bid. So the court was in as good a position as
Ethekwini to make the decision, which was a foregone conclusion.
[32]
A related consideration was the delay of implementing self-insurance
or restarting a tender afresh. The three-year tender
ends in
June 2017; so not only is any encroachment on Ethekwini’s
powers mitigated by the short duration of the court’s
substitution but it also gave Ethekwini the opportunity in the
remaining time of the tender to prepare for the next phase of
insurance.
[33]
Furthermore, the inefficiencies of some officials of Ethekwini
involved in this tender and their unexplained and unjustified
preference for South West were deterrents to deferring to Ethekwini
to correct the process and make a fresh appointment. Whatever
the
reasons for their decisions, be it bias, incompetence, negligence,
fraud or some other cause was immaterial for the purposes
of my
judgment; the lack of transparency and accountability of public
officials and persons performing public duty under the glare
of the
Constitution was decisive.
[34]
If I had simply set aside the award to South West there would have
been no insurer underwriting the risk of loss through water
leaks.
Exceptionally in this case, the majority of victims of the travesty
of this tender would have been the insured residents
and ratepayers
who ironically had no voice in these proceedings. Their interests had
to be protected. Regrettably not enough is
done to secure
participation of members of the public in matters that concern them.
[35]
The consequences of unconstitutional conduct by officials of
Ethekwini could not be bestowed upon the insured residents and
ratepayers. Neither could the court be held to ransom by deference to
the principle of separation of powers principle when institutions
violate their powers. Then the courts will step into the breach. In
these circumstances it is precisely:
‘
the
separation of powers [that] attributes responsibility to the courts
for ensuring that unconstitutional conduct is declared invalid
and
that constitutionally mandated remedies are afforded for violations
of the Constitution. This means that the Court must provide
effective
relief for infringements…. Hence, the answer to the
separation-of-powers argument lies in the express provisions
of s
172(1) of the Constitution. The corrective principle embodied there
allows correction to the extent of the constitutional
inconsistency…
.'
[13]
[36]
In all the circumstances a substitution order was just and equitable.
Hence, at the very first hearing I ordered that
the status
quo
of Westwood providing insurance broking services remain in force.
Subsequent documentation filed in court reinforced this order
and
resulted in it being made final at the third hearing. Substituting
Ethekwini’s award and even ordering costs in favour
of Westwood
would ordinarily have been dispositive of the dispute. However, the
prejudice to the tax paying public would not be
remedied without
enquiring into who should indemnify Ethekwini for all the costs
incurred in defence of in this wasteful litigation.
To this end I
turn to assess the conduct of the officials and decision-makers
involved.
The BEC decision
[37]
On 3 September 2015 the BEC considered the bid. It learnt that South
West was the most responsive tender having scored the
highest points
and lowest price. However it had not submitted a letter of
underwriting but a quotation of fees. The line department
had also
reported that the financials of South West were
‘
highly
doubtful’. The amount of the contract being estimated at R81
million, South West’s net profit of only R17 361.77
raised
concerns about its cash flow. Furthermore the loss ratio of the
current contract as at the end of June 2015 was a staggering
104%.
The BEC referred to legal advice but that report, which was attached
to the minute, was not before me. The BEC advised the
line department
to revisit the evaluation and consider South West and Westwood. The
minutes of the meeting of 28 October 2015 referred
to a meeting on 26
October 2015 at which the BEC recommended that the tender be
re-evaluated and the most responsive tender be
recommended.
[38] The next recording
of the BEC process appears to be minutes at which the BEC resolved to
support the awarding of the contract
for 36 months to South West. The
date of this meeting was on or about 16 November 2015.
[39] Westwood compiled a
bundle of the record even though Ethekwini had undertaken to do so in
the consent order of 10 October 2016
granted in chambers by consent.
However the bundle was incomplete. Crucially the minutes of the
meeting at which the concerns of
the BEC about South West’s
quotation for insurance and its cash flow problems were addressed
were missing from the record.
So too was the legal advice and the
report from the insurance and treasury departments.
[40] Ethekwini and its
BEC have much to explain. Any explanation that might have been
forthcoming was aborted once Ethekwini conceded
the review. Such
information was still relevant for determining whether I should
confirm the award of the tender to Westbrook.
Full disclosure was
also necessary in compliance with the constitutional duty of public
officials to function transparently and
accountably. Without
disclosure or at least an offer to disclose, if that would have been
more cost effective and convenient, the
inference that something
untoward had happened arose. Hence in my order of 15 November 2016 I
invited any person having an interest
in the further cost order I
contemplated to make written submissions to the Court by 22 November
2016. None has been forthcoming.
The Eighth
Respondent’s decision
[41] The starting point
of this enquiry is disturbingly at the most elementary level of any
tender irregularity investigation. What
document did South West
submit in response to clause 3? In his decision the eighth respondent
at about line 355 referred to ‘Marsh
Insurance’; at line
378 he referred to ‘Marsh Professional Indemnity Insurance’.
These are distinct legal entities.
Who then provided the letter of
indemnity?
[42]
The legal advisor who deposed to the answering affidavit added to the
confusion by stating that the
‘
actual
insurers as per its bid are Centric Insurance Co Ltd underwritten by
Manwood Underwriting Managers (Pty) Ltd in connection
with Marsh.’
[14]
If
the actual insurers were Centric Insurance Co Ltd and the
underwriters Manwood Underwriting Managers (Pty) Ltd what was her
purpose in proving that Marsh was registered by attaching EM1 to her
answering affidavit?
She
then flippantly dismissed queries about whether the ‘quotation’
that South West submitted met the requirements of
a ‘letter of
undertaking’ in clause 3 with: ‘The undertaking is just a
fancy word for a quotation’.
[15]
Was her response genuine ignorance or a clumsy attempt at covering up
illegalities?
[43]
Ethekwini could easily have put an end to any litigation by simply
producing at the outset the document that evidenced its
‘actual
insurers’.
It was foundational to the
dispute. Surprisingly, it did not even attach it to its answering
affidavit. Instead Ethewini urged that
this evidence of the insurers
should not be relegated to ‘supposition’ because it was
evidence:
‘
given
in consultation with the various SCM officials, the Contracts Manager
and the Divisional Manager for Water and Sanitation.
’
[16]
These
officials and those from the insurance and treasury departments had
‘debated
’
the quotation;
Ethekwini:
‘
gave
the issue proper consideration but concluded that [South West] had
complied with the conditions and specifications of condition
3. There
is no basis on which to exclude [South West].
’
[17]
[44] Not only did
Ethekwini’s answering affidavit compound confusion about who
provided the indemnity but also whether any
indemnity at all was
provided. Hence the order I granted on 29 September 2016 for any of
the respondents to produce to the court
before 7 October 2016 a copy
of the letter purporting to comply with clause 3. Eventually when
Ethekwini submitted the letter in
compliance with that order it
nailed its colours to the mast with Marsh’s ‘Professional
Indemnity Insurance’
letter. This letter did not bear the
words ‘quotation’. Therefore it could not have been the
letter that the
legal advisor stated under oath had been debated and
considered by the various officials and departments above.
[45] Furthermore, a
significant difference emerged between the documents Ethekwini and
South West delivered in compliance with my
order of 29 September. The
latter’s documents included an email from Marsh, the contract
of insurance and two letters from
Lion of Africa Insurance dated 15
June 2015.
[46] Significantly one of
the letters from Lion of Africa stated:
‘
It
is noted and confirmed that Lion of Africa Insurance Company Limited
offer its terms and conditions for the Insurance Programme
to
Ethekwini WATER AND SANITATION SERVICES based on the content of the
information supplied and submitted by Brokers for such terms
for the
2015/17 Insurance period.’
[47] If South West had
submitted Lion of Africa’s letter in response to clause 3 then
its bid would have been responsive to
clause 3. Whether this letter
served before the eighth respondent is doubtful as neither he nor
Ethekwini refer to it. South West’s
submission of the letter at
this stage raises another significant dispute of fact with Ethekwini
about its records. Did South West
submit the Lion of Africa letter
with its bid or was the letter procured subsequently as the evidence
currently suggests?
[48]
The eighth respondent appears to have had the email from Marsh which
is the only document that reflects the period of cover
as 1 July 2015
to 30 June 2016 and the retroactive date as 1 July 2013
[18]
which are incorporated in his decision. The insurance contract
confirms that the cover was for professional indemnity and related
insurance with no mention of insurance for water loss for metered
dwellings in Ethekwini municipal areas of supply as stipulated
in
clause 1 of the conditions of the tender.
[19]
[49]
The only document common to Ethekwini and South West was the letter
on the letterhead of Marsh and Centriq titled ‘Professional
Indemnity Insurance’.
[20]
The registration number of Marsh (Pty) Ltd as 1999/000348/07
and FSP 8414 appears on the
‘
Professional
Indemnity Insurance’.
By
no stretch of any linguistic or intellectual gymnastics could
professional indemnity insurance cover insurance for water loss
arising from underground leaks for individual dwelling units. The
officials in the insurance and treasury departments had to know
this
better than most others simply because they were relied upon as the
specialists in the insurance field. This apparent
cognitive
dissonance desperately calls for an explanation from the officials
who gave the opinion that resulted in South West being
awarded the
tender. None has been forthcoming.
[50] Equally intriguing
is the lack of explanations from all the officials including the
eighth respondent for rejecting Mr Shezi’s
memorandum, to which
I now turn.
[51]
Mr Shezi’s memorandum, compiled on the advice of the technical
assessment team within Ethekwini, confirmed that South
West had
failed to submit proof of underwriting insurance called for in clause
3; instead it had submitted
‘
a
Quotation for Professional Indemnity’ that was apparently
‘valued at R1.5 million.’
[21]
The
word ‘quotation’ does not appear on the Marsh-Centric
letter referred to above. Mr Shezi cited the
Preferential Procurement
Policy Framework Act 5 of 2000
as authority for requiring:
‘
a
municipality to implement a procurement policy by following a
preference point system in respect of any “acceptable tender”
… which, in all respects, complies with the specifications and
conditions of tender as set out in the tender document.’
He
continued to support his opinion with the decision of the Supreme
Court of Appeal in
Dr JS Moroka
Municipality and others v Betram (Pty) Limited and another
[2014] 1 All SA 545
(SCA) para 8,
quoting further from para 10 as follows:
‘
a
failure to comply with prescribed conditions will result in a tender
being disqualified as an “acceptable tender”
under the
Procurement Act unless those conditions are immaterial, unreasonable
or unconstitutional.
’
[22]
He
urged that there was
‘
nothing
unconstitutional, unreasonable, irrelevant or immaterial’
with the requirement in clause 3.
[52]
Mr Shezi also recorded that in his discussion with the technical
assessment team he had learnt that the team had sought the
views of
Ethekwini’s insurance department at treasury which had advised
that South West’s bid should be
‘
deemed
to have fully complied with the condition of contract and
specifications in question.’
[23]
Mr
Shezi expressed his difficulty with that opinion as follows:
‘
[I]t
presupposes a premise that there exists a discretion to condone a
failure to comply with any of the minimum qualifying requirements
set
out in tender invitation.“ As a general principle an
administrative authority has no inherent power to condone failure
to
comply with a peremptory requirement. It has only such power if it
has been afforded the discretion to do so.” (See
Minister
of Environmental Affairs
and
Tourism
v
Pepper
Bay
Fishing (Pty) Ltd
2004 (1) 308 SCA para 31.’
[24]
Accordingly Mr Shezi
concluded:
‘
that
a bid that does not satisfy the necessary prescribed minimum
qualifying criteria cannot be viewed as a bid validly submitted.
…
The fact that all bids validly submitted are to be taken into
consideration in clause 3 affords no discretion to condone
and take
into account bids not validly submitted.
It is
therefore my considered opinion that the bid by South West Consulting
be disqualified.’
[25]
[53] In the light of Mr
Shezi’s legal advice and compelling case for disqualifying
South West’s bid, those who supported
the bid cannot plead
ignorance of the law. The question for them is why did they support
the bid notwithstanding this advice.
[54] The eighth
respondent quoted Mr Shezi’s memorandum extensively but he
inappropriately footnoted it in ways that suggest
that he did not
understand its import. His lack of understanding is all the more
apparent when he attached it to his decision as
‘legal advice’
to support ‘without any justification’ condonation of the
fifth respondent’s bid.
Mr Shezi’s memorandum does no
such thing; instead it is advice to call for clarity on documentation
submitted in support
of clause 3 and certain other information.
[55]
The eighth respondent identified South West’s response to
clause 3 as being
‘
provided
by Marsh Insurance’.
[26]
Agreeing
with the opinion from the insurance and treasury departments of
Ethekwini he opined:
‘
On
closer scrutiny of this document it’s clear that it’s an
underwriting document which was entered into on 15 June
2015 and to
be effective as from 01 July 2015 ... The legal opinion seems to
suggest that the advice from the treasury department
sought to
condone the non-compliances with promontory [peremptory?]
requirements which is clearly not the case.
The Financial Services
Board registration by South West Consulting is just a straight
forward document which confirms the registration
by this tenderer
with the Financial Services Board under Licence Number 44365 as a
Financial Services Provider which registration
is with effect from 12
February 2013.
On the
letter provided by Marsh Professional Indemnity Insurance the
Financial Services Provider registration numbers for all parties
is
provided for in this document. Non-compliance with promontory
[peremptory?] provisions seem[s] to be a myth which I cannot find
any
explanation for. The bid evaluation committee raised the same
reservations towards these reports and voiced its opinion to
the
effect that the bidders were compliant and should be re-evaluated on
price and BBBEE.’
[27]
(
sic
)
The
eighth respondent (and the BEC) arrived at this decision despite
acknowledging the following reason for competitive bids:
‘
The
rationale behind competitive bidding would furthermore be defeated
if, after a public call for bids, a municipality is allowed
to
conclude a contract with the preferred bidder that differ[s] from
specifications advertised.’
[28]
(
sic
)
[56]
Counsel for Ethekwini conceded that the
‘
eighth
respondent’s judgment’
is not
only so poorly drafted that comprehending what he means is difficult,
but also that he failed to provide a coherent rationale
for his
decision. In contrast, Mr Shezi expressed his opinion clearly,
concisely, precisely and with reference to compelling authoritative
sources. Mr Shezi and the assessment team must be commended. If
Ethekwini, the BEC and ultimately the eighth respondent had
followed
their advice they would have avoided the unlawful award of the tender
to South West and this ensuing costly litigation
at the expense of
the public purse.
[57]
Regrettably the eighth respondent favoured of the opinion of the
insurance and treasury departments simply because they
‘
deal
with these kinds of undertakings on a regular basis.
’
[29]
Curiously,
the eighth respondent omitted to attach to his decision the
departments’ opinion that he relied on but attached
a copy of
Mr Shezi’s memorandum that he did not rely on, even though it
was an internal legal advisor’s memorandum.
[58] The mystery about
the departments’ opinion persists. Notwithstanding indications
from the bench during the hearings that
production of that opinion
was vital it has not been forthcoming. The parties had consented to
the review proceeding on 15 November
2016 for which production of the
record of the tender proceedings was also agreed. Ethekwini avoided
compliance with this part
of the consent order by conceding the
review without advancing reasons for its concession. Whilst Ethekwini
was free to adopt this
approach in litigation I doubt that it is
proper to be coy when constitutional obligations to be transparent
and accountable is
at stake. Inevitably, the lack of an explanation
freed me to draw my own inferences. One such inference is that
Ethekwini
realised that the departments’ opinion would not
support its defence of the award and that the award was indeed
indefensible.
[59] The eighth
respondent’s reasons for his decision that the document that
South West submitted offered underwriting insurance
compliant with
clause 3 of the tender conditions is irrational for the following
reasons:
a.
He failed to establish precisely what
documents South West submitted in response to clause 3.
b.
He offered no reasons for his decision. Nor
did he give reasons for accepting the departments’ opinion and
rejecting the legal
advice in Mr Shezi’s memorandum. In
Bel Porto School Governing Body and others V
Premier, Western Cape, and another
[2002] ZACC 2
;
2002
(3) SA 265
(CC) para 159 the Constitutional Court emphasized the
importance of giving reasons thus:
‘
[159]
The duty to give reasons when rights or interests are affected has
been stated to constitute an indispensable part of a sound
system of
judicial review. Unless the person affected can discover the
reason behind the decision, he or she may be unable
to tell
whether it is reviewable or not and so may be deprived of the
protection of the law. Yet it goes further than that. The
giving of
reasons satisfies the individual that his or her matter has been
considered and also promotes good administrative functioning
because
the decision-makers know that they can be called upon to explain
their decisions and thus be forced to evaluate all the
relevant considerations correctly and carefully. Moreover,
as in the present case, the reasons given can help to crystallise
the
issues should litigation arise.’ (
footnotes
omitted
)
So
important is the duty to give reasons that even if not expressed the
duty is implied by both the constitutional duty to exercise
powers in
a way that is not irrational or arbitrary and the fact that organ of
state is bound to the values of transparency and
accountability by s
195.
[30]
c.
He fettered his discretion by
unquestioningly accepting the opinion of the insurance and the
treasury departments of Ethekwini.
To prefer the departments’
opinion simply because of its expertise is not a rational choice. He
did not disclose the reasons
for the departments’ opinion,
which compounds the irrationality.
d.
He failed to appreciate the nature of and
material differences between professional indemnity insurance and
water loss insurance
for underground leaks in individual dwelling
units.
[60] For these reasons I
found that the eighth respondent’s decision was irrational and
unsustainable and set it aside.
Costs
[61]
The courts have long been sounding the caution that public officials
must be held accountable for acting unconstitutionally,
unlawfully,
dishonourably and unethically.
[31]
Importantly, care must also be taken not to trench on the rights of
potential transgressors, especially the rights to due process
and
fairness. These warnings emerged in
MEC
for Health, Gauteng v Lushaba
[2015] ZACC 16.
The Gauteng High Court granted an order:
‘
a
rule, calling upon the defendant to show cause on Tuesday 28 October
2014:
[1.1] why he should not
be held liable personally
de bonis propriis
on the attorney
and client scale, jointly and severally with the defendant, for the
costs;
[1.2] alternatively
should she of the view that she should not be held personally liable,
the defendant was called upon to identify
such persons in the
Department of Health of Gauteng, as well as such persons in the
office of the state attorney, who should be
held personally held
liable for the costs, as well as the reasons why they should be so
held liable.’
[32]
[62]
The Supreme Court of Appeal dismissed the petition.
[33]
The Constitutional Court set aside the cost order above for the
following reasons:
‘
[14] It was not
competent for the High Court to allow the MEC to be the judge of
whether he should be held personally liable and
if he should not be
held personally liable, to identify who should be. This does not
accord with section 165 of the Constitution
which declares that
judicial authority of the Republic is vested in the courts. Moreover,
the order breached a principle entrenched
in our law that no one
should be a judge in their own case.
…
[17]…These
officials [who were ordered to pay costs
de bonis propriis
]
were not at any stage joined as parties to the matter. Second, the
rule
nisi
… did not call any of them to show cause why
they should not be held liable. They deposed to affidavits in support
of the
MEC’s contention that he could not be held personally
liable. Therefore, there was no legal basis for the Court to exercise
its judicial authority over these officials.
[18] Another principle
breached is that without notice and opportunity to make
representations, the High Court punished the three
officials. It is a
fundamental principle of our law that no one should be condemned
without a hearing. This is part of the rule
of law which is
foundational to our constitutional order.’
The
Constitutional Court concluded that the order violated ‘the
officials’ right to a fair hearing guaranteed by section
34 of
the Constitution.
[34]
[63] I heed these
concerns as well as those of Counsel who urged me to guard against
making cost orders that could result in either
incurring more costs
or infringing the separation of powers principle. To address
Counsels’ first concern I intend to dispose
of the matter on
affidavit and in chambers unless a party wants to be heard in open
court.
[64] As for the second
concern, my order is not intended to usurp the supervisory and
disciplinary functions of the management of
Ethekwini or even the
political authority of its Council. On the contrary I intend by my
order to reinforce the role of those institutions.
I will
direct Ethekwini to serve a copy of my order on:
a. its
Mayor whose responsibilities include providing general political
guidance over the fiscal and financial affairs of Ethekwini
and
taking reasonable steps to ensure that Ethekwini performs its
constitutional and statutory functions within the limits of its
approved budget.
[35]
The Mayor
is also reminded of his functions and powers to ‘monitor the
management of the municipality's administration in
accordance with
the directions of the municipal council and oversee the provision of
services to communities in the municipality
in a sustainable
manner.
[36]
b. its
Municipal Manager. As the head of the administration of Ethekwini he
is responsible for the discipline of staff;
[37]
as its accounting officer he is responsible and accountable for all
income and expenditure, assets and liabilities and ‘proper
and
diligent compliance with the
Municipal
Finance Management Act.’
[38]
c.
the
Auditor-General established under s 181(1)(e) of the Constitution for
his information and action as he deems appropriate
‘
to secure
transparency, accountability, and sound management of the revenue,
expenditure, assets and liabilities of the institutions’
to
achieve the objective in
s 2
of the
Public Finance Management Act No.
1 of 1999
.
[65]
The Mayor, the Council he leads and the Municipal Manager are also
reminded of their responsibilities in terms of the
Local Government:
Municipal Systems Act 32 of 2000
to ensure ‘efficient,
effective and transparent local public administration that conforms
to the constitutional principles
’
and
the financial and economic viability of Ethekwini.
[66] My mandate comes
from s 172 (1)(b) of the Constitution which empowers the courts when
deciding a constitutional matter within
its power to ‘make any
order that is just and equitable’. In deference to the
separation of powers I confine the exercise
of my discretion to my
judicial powers to determine an appropriate order for costs in
execution of the role of the courts as guardians
of our Constitution.
[67] To apply the general
rule that costs should follow the result would lead to taxpayers
carrying the costs ultimately. They are
unsuspecting victims of the
illegalities perpetrated by officials appointed to serve their best
interests. A way has to be
found to indemnify them against all
costs that Ethekwini has to pay arising from this matter, including
its own attorney and client
costs.
[68] The officials of
Ethekwini who contributed to the decision to award the tender to
South West violated their constitutional
obligations under s 195.
Without Ethekwini providing the court with the opinion of the
insurance and treasury department, offering
reasons for finding that
South West’s bid complied with clause 3, for supporting the
bid, and for rejecting the advice of
Mr Shezi, I am unable to say
whether the officials were incompetent, negligent, fraudulent or
something else. Whatever their motives
were the irrationality of
their choice of South West is so obvious and egregious that it
ineluctably leads me to conclude that
the officials knowingly acted
unlawfully, unconstitutionally and unethically.
[69]
I cannot identify by name those officials who participated in the
unlawful award to South West. They would include the officials
from
the treasury and insurance departments who formed the opinion that
the tender should be awarded to South West. That opinion
persuaded
the eighth respondent to reject Mr Shezi’s opinion and award
the tender to South West. It would also include ‘the
various
SCM officials, the Contracts Manager and the Divisional Manager for
Water and Sanitation’
who
debated and considered the bid.
[39]
Silindile Blose, the legal advisor of Ethekwini defended an
indefensible award.
The
minutes of the BEC meetings do not disclose how the BEC abandoned its
reservations ventilated at its previous meetings and settled
for
awarding the tender to South West. The eighth respondent, although
not an employee of Ethekwini, was performing a public duty
when he
determined the appeal; he must explain his leaps of logic and gaps in
his reasoning.
[70] Finally counsel for
Westwood reminded me to deal with the costs that were reserved on 2
September 2016, 29 September 2016 and
7 October 2016 in this order.
Order
[71]
The first respondent Ethekwini shall serve a copy of this judgment
and order on the office of the Mayor, the office of the
Municipal
Manager by 20 December 2016.
[72]
The Mayor and the Municipal Manager shall deliver affidavits
(attested to by themselves or any person having knowledge) in
which
they furnish the name and contact details of the officials from the
insurance and treasury departments, the various SCM officials,
the
Contracts Manager and the Divisional Manager for Water and Sanitation
and any other person who participated in the awarding
Contract Number
WS6678 for ‘water loss insurance for underground water leaks of
individual dwelling units’ to the fourth
respondent
(NC South West Brokers CC) by 20 January 2017.
[73]
The Mayor and the Municipal Manager shall deliver a copy of this
judgment and order on the persons they name in the affidavits
referred to in the preceding paragraph, the fourth and eighth
respondents, Mr Sibusiso Shezi and Silindile Blose
by
20 January 2017.
[74]
The persons referred to in the preceding paragraph and any other
person who participated in the awarding the above Contract,
or
who have an interest or information about the awarding the above
Contract, are given leave to deliver affidavits giving evidence
to
assist the court to determine the reason for awarding the Contract.
[75]
The fourth and eighth respondents, Silindile Blose,
the
persons named in the affidavits delivered by the Mayor
and
the Municipal Manager and any other person who participated in
support of awarding the above Contract
to
the fourth respondent are directed to show cause on affidavit why an
order should not be made that:
a. he, she, it or they,
jointly or severally, the one paying the others to be absolved, shall
indemnify Ethekwini by paying all
costs
de bonis propriis
Ethekwini incurred in this litigation.
b. Ethekwini shall serve
this order on the office of the Auditor-General established in terms
of s 181(1)(e) of the Constitution
of the Republic of South Africa,
1986.
c. Ethekwini shall pay
the applicant’s (Westwood’s) costs that were reserved on
2 September 2016, 29 September 2016
and 7 October 2016.
[76]
Proof of service of the judgment and order in terms of para 73 shall
be filed in court by 31 January 2017.
[77]
The affidavits referred to in paragraphs 74 and 75 shall be served on
the court and all other persons affected by such affidavits,
in the
case of
paragraph
74 by 31 January 2017.
paragraph
75 by 14 February 2017.
[78]
Any person wishing to be heard in open court shall indicate by letter
to reach the office of the Registrar of the High Court,
Durban by 20
February 2017, failing which the matter will be disposed off in
chambers on the documents delivered by that date.
_________________
D. Pillay J
APPEARANCES
Counsel
for the Applicant
: A.G Jeffrey
SC
Instructed
by
: Larson
Falconer Hassan Parsee Inc
Tel:
(031) 534 1600
Ref:
yhassan@Ifhp.co.za
Counsel
for the 1
st
,2
nd
,3
rd
Respondent
:
I
Pillay
Instructed
by
: S.D
Moloi & Associates
Tel:
(031) 563 3231
Ref:
SDM/XSN/0461-16
Dates of Hearing
: 30
September, 7 October 2016,
15 November 2016
Date of
Judgment
: 8
December 2016
[1]
The
name of the eighth respondent must be omitted from publication of
this judgment.
[2]
MEC
for Education: Kwazulu-Natal and Others v Pillay
(CCT
51/06)
[2007] ZACC 21
;
2008 (1) SA 474
;
2008 (2) BCLR 99
(CC) (5
October 2007) para 32.
[3]
Page
39 of the pleadings; eighth respondent’s award.
[4]
Page
95 of the pleadings para 14 of Ethekwini’s answering
affidavit.
[5]
Page
95 of the pleadings read with annexure em1 at page 101 of the
pleadings.
[6]
https://www.fsb.co.za/Departments/insurance/Pages/listOfInsurers.aspx
[7]
Black
Economic Empowerment.
[8]
City of
Tshwane Metropolitan Municipality v Afriforum and another
(157/15)
[2016] ZACC 19
;
2016 (6) SA 279
;
2016 (9) BCLR 1133
(CC) (21 July
2016)
[9]
Lon
L. Fuller and Kenneth I. Winston
The
Forms and Limits of Adjudication Source
Harvard Law Review, Vol. 92, No. 2 (Dec., 1978), pp. 353-409 R URL:
http://www.jstor.org/stable/1340368Accessed: 13/09/2010 10:58
[10]
Gauteng
Gambling Board v Silverstar Development Ltd and others
2005
(4) SA 67 (SCA)
[11]
section
8(1)
(c)
(ii)
(aa)
of
the
Promotion of Administrative Justice Act 3 of 2000
;
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa
2015
(5) SA 245
(CC)
para
34-47 and authorities cited there including
Johannesburg
City Council v Administrator, Transvaal, and Another
1969
(2) SA 72
(T)
at 76D-G;
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency and
Others
2014
(4) SA 179 (CC)
paras 42 and 45.
[12]
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency and
Others
2014
(4) SA 179 (CC)
paras 42 and 45.
[13]
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency and
Others
para
42 and 45
[14]
Page
95 of the pleadings;
Para
11 of Ethekwini’s heads of argument.
[15]
Page
94 of the pleadings.
[16]
Para
11 of Ethekwini’s heads of argument.
[17]
Page
94 of the pleadings
.
[18]
Page
82 of the pleadings line 370-5; page 131 of Vol 2 of Westwood’s
bundle.
[19]
Page
29 of the pleadings.
[20]
Page
132 of volume 2 of Westwood’s bundle.
[21]
Page
47 of the pleadings.
[22]
Page
47 of the pleadings.
[23]
Page
48 of the pleadings.
[24]
Page
48 of the pleadings.
[25]
Page
48 of the pleadings.
[26]
Page
43 of the pleadings line 355.
[27]
Page
44 of the pleadings line 380.
[28]
Page
44 of the pleadings line 400.
[29]
Page
44 of the pleadings line 360.
[30]
Judicial
Service Commission and another v Cape Bar Council and another
2013
(1) SA 170
(SCA) para 46-51.
[31]
C
Plasket ‘Protecting the Public Purse: Appropriate relief and
costs orders against officials’
2000 SALJ 151
;
Gauteng
Gambling Board and another v MEC for Economic Development, Gauteng
2013
(5) SA 24
(SCA) para
41
– 43 and 48 – 54 ;
Mogale
City v Fidelity Security Services Ltd
2015
(5) SA 590
(SCA) para 21;
Kenton
on Sea Ratepayers Association and others v Ndlambe Local
Municipality and others
[2016]
ZAECGHC 45 (15 June 2016) para 35;
Mlatsheni
v Road Accident Fund
2009
(2) SA 401
(E) para 17;
Van
Niekerk v Pretoria City Council
1997 (3) SA 839
(T) at 850B–C;
Permanent
Secretary, Department of Welfare, Eastern Cape, and another v Ngxuza
and others
2001 (4) SA 1184
(SCA) para 12;
MEC
for Roads and Public Works, Eastern Cape and another v Intertrade
Two (Pty) Ltd
2006
(5) SA 1
(SCA) paras 20 – 21.
[32]
Lushaba
v MEC for Health, Gauteng
2015
(3) SA 616 (GJ).
[33]
MEC
for Health, Gauteng v Lushaba
para
2
[34]
Section 34 of the Constitution provides : ‘Everyone has the
right to have any dispute that can be resolved by the application
of
law decided in a fair public hearing before a court or, where
appropriate, another independent and impartial tribunal or forum.’
[35]
S
52 (a) and (c) of
Local Government: Municipal Finance Management Act
56 of 2003
.
[36]
S
56
(3)(e) and (f)
of
Local Government: Municipal Structures Act 117 of 1998
.
[37]
S
55
(1)(g) of
Local Government: Municipal Systems Act 32 of 2000
.
[38]
S
55
(2) of
Local Government: Municipal Systems Act 32 of 2000
.
[39]
Para
11 of Ethekwini’s heads of argument.