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[2016] ZAGPPHC 75
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VIP Consulting Engineers (Pty) Ltd and Others v Minister of Finance and Others (24799/2013) [2016] ZAGPPHC 75 (9 February 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
DATE:
9/2/2016
CASE
NO: 24799/2013
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
VIP
CONSULTING ENGINEERS (PTY)
LTD 1
ST
APPLICANT
REG
NO: 1997/0005608/07
IGNATIUS
WILHEN
HENNING 2
ND
APPLICANT
PIETER
VAN
IMMERZEEL 3
RD
APPLICANT
STEFANUS
PRINSLOO 4
TH
APPLICANT
JOHAN
JANSEN VAN
RENSBURG 5
TH
APPLICANT
JOSEPH
RAMATHLODI
RAMALOPE 6
TH
APPLICANT
GRAEME
ARTHUR LLOYD
AMDROSE 7
TH
APPLICANT
STRATFORD
FULTNER
POHL 8
TH
APPLICANT
IRVIN
BAFANA
SIBISI 9
TH
APPLICANT
And
THE
MINISTER OF FINANCE: MR PJ
GORDHAN 1
ST
RESPONDENT
In
his capacity as the responsible Minister for the
Department
of National Treasury
EKURHULENI
METROPOLITAN MUNICIPALITY 2
ND
RESPONDENT
DEPARTMENT
OF FINANCE:
EKURHULENI 3
RD
RESPONDENT
METROPOLITAN
MUNICIPALITY
THE
CHAIRPERSON OF THE BID ADJUDICATION
COMMITTEE:
EKURHULENI METROPOLITAN 4
TH
RESPONDENT
MUNICIPALITY
THE
CHAIRPERSON OF THE BID
EVALUATION 5
TH
RESPONDENT
COMMITTEE:
EKURHULENI METROPOLITAN
MUNICIPALITY
JUDGMENT
MSIMEKI,
J
INTRODUCTION
[1]
VIP Consulting Engineering (Pty) Ltd, as first applicant, together
with eight other applicants brought an application against
the first
respondent and four others seeking orders contained in the prayers
which form part of Part A and part B of applicants
Notice of Motion
dated 25 April 2013. Part A which was brought on an urgent basis was
not opposed and an order was accordingly
granted against first
respondent. Part B of the Notice of Motion now serves before me.
Second up to and including fifth respondent
oppose the application.
BRIEF
FACTS
[2]
First applicant and second respondent concluded an engineering
services contract in February 2007 as evidenced by a letter of
appointment dated 12 February 2007. Second respondent on 30 July 2007
contracted with Niloti Carpentry & Construction CC (the
contractor) for the construction of civil engineering infrastructure
in the Western portion of Etwatwa Extension 34 (the works).
The
construction of the civil engineering infrastructure was to be
administered by first applicant. Second up to and including
sixth
applicant are currently directors of first applicant while the others
were previous directors. Second respondent contends
that first
applicant breached the contract and that it (second respondent), as a
result, has terminated the contract. First and
second applicants’
names have been listed on the data base of restricted suppliers which
is kept and/or administered by the
Department of National Treasury
(first respondent). Applicants brought the application in Part B
seeking an order that the decision
and/or resolution adopted by
second respondent’s bid committees (fourth and fifth
respondents) to prohibit first applicant
from participating in
contracts involving organs of state with effect from 23 July 2012, be
reviewed and set-aside in accordance
with the provisions of Rule 53
of the Uniform Rules of Court and that the decision and/or resolution
adopted by second respondent’s
bid committees to publish and/or
list the Applicants’ names on the data base of restricted
suppliers which is kept and/or
administered by the Department of
National Treasury be reviewed and set-aside in accordance with the
provisions of Rule 53 of the
Uniform Rules of Court. Applicants also
seek an order that second up to and including fifth respondent be
ordered to pay the costs
of this application jointly and severally
the one paying the other to be absolved. For convenience, I shall
refer to the parties
as they are cited in the main review
application.
[3]
Respondents have delivered their answering affidavit and raised two
points
in limine.
These are that fourth and fifth respondents
were not supposed to have been joined in the proceedings (misjoinder)
and that the judicial
review proceedings have been brought outside
the 180 days period which means that they have been brought out of
time which, according
to them, is a bar to the bringing of such
review proceedings. Applicants, on the other hand, contend
differently. First respondent
abides the decision of the court and
has filed no answering affidavit.
[4]
Respondents also brought an application to have applicants’
replying affidavit struck out on the basis that it introduces
matters
not dealt with in applicants’ founding affidavit and that its
nature amounts to applicants abandoning their cause
of action and
substituting that with a new cause of action. Again applicants
disagree.
[5]
I shall deal first with the points
in limine
. The point
in
limine
relating to misjoinder, in my view, was correctly not
pursued.
[6]
COMPLIANCE WITH SECTION 7 (1) (b) of the Promotion Administrative
Justice Act 3 of 2000 (PAJA):
“
7
PROCEDURE FOR JUDICLIAL REVIEW
This section
provides:
(1)
Any
proceedings for judicial review in terms of section (1)
must
be instituted without unreasonable delay and not later than 180 days
after the date
_
(a)
.......
(b)
Where
no such remedies exist,
on
which the person concerned was informed of the administrative action,
became aware of the action and the reasons for it
or
might reasonably have been expected to have become aware
of
the action and the reasons
(
my emphasis)
[7]
Variation of time is covered by
section 9 of the Act.
Section
9 (1) (b) and 9 (2)
provides:
“
(1) The
period of,
(a)
90
days referred to in section 5 may be reduced; or
(b)
90
days or 180 days referred to in sections 5 and 7 may be extended for
a fixed period, by agreement between the parties or, failing
such
agreement, by a court or tribunal on application by the person or,
administrator concerned.
(2)
court or tribunal may grant an application in terms of subsection (1)
where the interests of justice so require”.
[8]
The respondents contend that section 7 of PAJA is applicable in this
matter. This is borne out by their reliance on section
7 in
paragraphs 20.2 and 21 of their answering affidavit. It is
respondents’ contention that applicants were duly informed
of
what was happening but failed to act in accordance with the
provisions of section 7 of PAJA.
[9]
Indeed, applicants, in their founding affidavit, did not specifically
refer to specific sections of PAJA. This, according to
respondents,
means that applicants, by dealing with PAJA in their replying
affidavit were introducing new matters which they had
not dealt with
in their founding affidavit. Applicants disagree.
[10]
Before dealing with the matter it is necessary to refer to page
D1-703 of Van Loggerensberg Erasmus: Superior Court Practice,
second
Edition where the authors say:
“
Although it
is not necessary for a litigant who seeks to review administrative
action to specify the provisions of PAJA relied on
such litigant
should identify clearly both the facts on which the cause of action
is based and the legal basis of such cause of
action:
At
page D1-704 the authors state that:
“
In a review
application if the rights of a member of the public were involved,
the latter was entitled
to have the full record before the court
and to have the reasons
for the impinged decisions available”
(See South African
Football Association v Stanton Woodrush (Pty) Ltd t\a Stan Smidt &
sons
2003 (3) SA 313
(SCA).
[11]
In Scott and Others v Hanekom and Others
1980 (3) SA 1182
(C) at
page
1193 C
Marais AJ said:
“
In my view,
the period of time within which review proceedings are brought forms
no part of an applicant’s cause of action”.
At
1193E-F the court said:
“
I recognise
that there may be cases (and they are likely to be rare) in which the
delay is so manifestly inordinate that an applicant
can be expected
to explain the delay in his founding affidavits. But, unless the
delay which has occurred does fall within this
extreme category of
case,
an applicant
should not be expected, as a matter of course, to explain, in advance
of any objection by the respondent or the Court,
any apparent delay
which may have occurred. If such an object is raised by the
respondent, the applicant can deal with it in his
replying
affidavits.”
(my
emphasis)
[12]
It was submitted by Mr Botes, for the applicants, that this aspect
was dealt with by the applicants in their replying affidavit
also
demonstrating that respondents had also failed to comply with the
provisions of sections 3 and 6 of PAJA by failing to provide
applicants with the reasons for the decision or resolution that was
adopted on 23 July 2012. It is applicants’ contention
that the
180 days period finds no application in this application.
[13]
It appears to me that certain of the issues in the main application
overlap with those in the second point
in limine
. This would
account for the manner in which the matter was argued.
[14]
Mr Botes, for the applicants, submitted that the respondents never
furnished the reasons for prohibiting Naloti Construction
and
Carpentry CC, its members and directors of first applicant from
participating in contracts involving any organ of state with
effect
from the resolution by the Bid adjudication committee, for a period
of (5) five years. Mr Botes submitted that Mr Mkize,
for respondents,
would not be able to provide an answer because the reasons were never
given.
[15]
Mr Botes submitted that applicants, in various letters, called for
such reasons without success. One such letter is from applicants’
attorneys to respondents’ attorneys dated 19 November 2012
(annexure VIP 12). The second paragraph thereof reads:
“
Please be so
kind as to revert to us with regards to the documentation considered
by the Bid Committee and the City Manager prior
to deciding to
terminate the VIP appointment and to have them and their directors
restricted from participating in contracts involving
organs of state
as well as the
reasons for taking the aforesaid decision.”
(my emphasis)
[16]
Respondents’ attorneys, in their letter to applicants’
attorneys, dated 20 November 2012 (annexure VIP 13) responded
saying:
“
We note the
contents of your aforesaid letter and we are taking instructions from
client and shall revert back to you in due course”.
No reasons
were furnished.
[17]
In annexure VIP14, the letter from applicants’ attorneys to
respondents’ attorneys dated 4 December 2012, the applicants’
attorneys in paragraph 2 of the letter said:
“
It is
absolutely imperative that we receive feedback from your office,
specifically with regards to information and documentation
considered
by the Bid Committee and the City Manager prior to deciding to
terminate the VIP appointment and to have them and their
directors
restricted from participating in contracts involving organs of
state.”
[18]
Mr Botes referred the court to the minutes of first respondent’s
Bid Adjudication Committee meeting on 23 July 2012.
Paragraph 12
thereof reads:
“
That
the request of VIP Consulting Engineering (Pty) Ltd to be allowed the
opportunity to further make presentations before any
decision is made
to prohibit VIP Consulting Engineering (Pty) Ltd from further
participating in organ of state contracts for a
period not exceeding
5 (five) years BE CONSIDERED.”(
my
emphasis)
This,
according to Mr Botes, appears not to have been done. It appears so.
[19]
Mr Botes further submitted that through the use of Rule 35 (14)
annexure VIP 44 was unearthed. VIP 44 is a letter from second
respondent to the Chief Director: Supply Chain Management dated 21
August 2012. The letter reads”
“
1. The Bid
Adjudication Committee, at its meeting held on 23 July 2012 resolved
that Niloti Construction and Carpentry CC and VIP
Consulting
Engineering and all its members/Directors be prohibited from doing
business with the Public Sector due to breach of
contract, with
effect from 23 July 2012 for a period of five years.” “With
effect from 23 July 2012 for a period of
five years” is in
bold. This, despite the fact that the same Bid Adjudication Committee
had resolved that “the request
of VIP Consulting Engineering
(Pty) Ltd to be allowed the opportunity to further make presentations
before any decision is made
to prohibit VIP Consulting Engineering
(Pty) Ltd from further participating in organ of state contracts for
a period not exceeding
5 (five) years BE CONSIDERED.” No where
do we see the consideration taking place. It appears first applicant
was simply slapped
with the sanction without having been given the
opportunity to address the Bid Adjudication Committee before the
sentence was passed.
If so, the Bid Adjudication Committee
unilaterally took the decision to prohibit first applicant from
further participation in
the business with the public sector. Mr
Botes submitted that the
audi
alteram partem
rule
was not observed and this, according to him, could not be done. He
is, in my view, correct.
[20]
The reasons for the decision to prohibit first applicant from further
participation in the business involving state organs
without
according first applicant, as the adjudication committee had
resolved, the opportunity to address it on the issue
appear not
to have been furnished to date.
[21]
Second respondent, according to first applicant, did not afford first
applicant a reasonable and/or fair opportunity to address
the issues
raised in its letter dated 22 February 2012 which is annexure “VIP
4.” This, according to first applicant,
ought to have been done
before first applicant was prohibited from further participation in
the business involving state organs.
Second respondent as a result
was not entitled to submit applicants’ names to first
respondent for purposes of placing them
on the data base of
restricted suppliers which is kept/or administered by the Department
of National Treasury. Without observing
its resolution to allow first
applicant to address it (Bid Adjudication Committee) on the issue
raised by applicant regarding the
sanction, the adjudication
committee was not entitled to slap first applicant and its directors
with the sanction in issue. This
offends the
audi alteram
partem
rule.
[22]
Mr Mkize, for second to fifth respondents, submitted that first
applicant had been afforded the opportunity it is complaining
about.
This cannot be correct. First, applicants submitted that the
representations that they had made had been inadequate. Second,
no
reasons were furnished to show why the
audi alterum partem
rule
was not observed. Third, the Bid Adjudication Committee saw the need
to allow applicants to address it on the issues before
they were
prohibited from further participating in organ of state contracts for
a period of 5 (five) years.
[23]
In “VIP 29” which is a letter from second to fifth
respondents’ attorneys to applicants’ attorneys
dated 22
April 2013 respondents attorneys said:
“
5.2. Our
client: (referring to second respondent)
5.2.1
has no legal obligation to actually list any person in terms of
the
relevant legal provisions
. And as a matter of fact -
5.2.3.
did not list your clients in the manner alleged – or at all.
The listing was done by the National Treasury
: as you yourself,
at times correctly pointed out in your letter.”(my emphasis)
This,
indeed, contradicts the contents of annexure “VIP 44”
which confirms that their client, indeed, was responsible
for the
listing of applicants’ names on the data base of restricted
suppliers.
[24]
Respondents’ ‘attorneys denials and non-observance of the
audi alteram partem
rule by respondents, according to Mr
Botes, prompted applicants to launch the main review application
which second to fifth
respondents oppose. The reasons for the taking
of the decision that the Bid Adjudication Committee took on 23 July
2012, to not
allow first applicant to address it on the
saction
,
before the
saction
was imposed, have still not been given.
First
respondent in the disclaimer which appears on each page of annexure
“VIP9” which is the list of the restricted
suppliers,
shows that first respondent was not involved when the resolution or
decision was adopted by the Bid Adjudication Committee.
This leaves
second respondent as the culprit. Mr Botes submitted that Mr Mkize’s
submission that the review application was
brought out of time in
light of the facts of the case cannot be correct. The submission, in
my view, appears to be correct. The
second point
in
limine
should be
dismissed.
THE
INTERLOCUTOTY APPLICATION
[25]
The application which seeks the striking out of the applicants
replying affidavit in its entirety is premised on Rule 6 (15)
of the
Uniform Rules of Court.
The
Rule reads:
“
(15) The
court may on application order to be struck out from any affidavit
any matter which is scandalous vexatious or irrelevant,
with an
appropriate order as to costs, including costs as between attorney
and client. The court
shall
not grant the application unless it is satisfied that the applicant
will be prejudiced in his case if it be not granted.
(
my emphasis)
[26]
Mr Mkize submitted that applicants’ replying affidavit
introduces new matter and amounts to the complete abandonment
of
applicants’ cause of action and submitting it with a complete
new cause of action. Mr Botes disagrees. I, for the reasons
that will
follow also disagree.
[27]
Mr Mkize submitted that applicants based their cause of action on
incorrect statute namely
Preferential Procurement Policy Framework
Act 5 of 2000
,
the regulations promulgated in accordance
therewith and practice note SCM5 of 2006. Mr Botes conceded that the
Act Regulations and
the practice note were incorrectly cited.
[28]
Respondents in their answering affidavit, cited the correct
legislation being the
Local Government Municipal Finance
Management Act 53 of 2003
,
the
Municipal Supply Chain Management
Regulations and
the Supply Chain Management Policy. Applicants
concede that that is in fact so. Respondents and their counsel are,
however, unhappy
with the reason furnished for the wrong citation by
applicants. This, in my view, is of no consequence.
[29]
It is important to keep in mind what applicants’ case is. Their
case is that the Bid Adjudication Committee which represented
second
respondent failed and/or neglected to afford first applicant a
reasonable and/or fair opportunity to address the issues
raised in
its letter dated 22 February 2012 (Annexure “VIP 4”) to
founding affidavit. Applicants contend that first
applicant was
denied a reasonable and/or fair opportunity to place its case before
fourth and fifth respondents and to ventilate
thoroughly and/or
comprehensively. Effectively, applicants’ case is that the
audi
alteram partem
rule was not observed by the committee and
effectively by second respondent. Second respondent effectively had
no valid and enforceable
right in law when it took the decision and
finally decided to submit applicants’ names to first respondent
(the Department
of National Treasury) for purposes of placing them on
the data base of restricted suppliers which is kept and/or
administered by
first respondent.
[30]
Respondents, in their answering affidavit, specifically referred to
PAJA and dealt with
section 7
thereof. Mr Botes submitted that
applicants, as a result, were entitled to deal with the provisions of
PAJA in their replying affidavit.
This, according to Mr Botes does
not amount to introducing new matter or changing the cause of action.
Erasmus:
Superior Court Practice at page D1-66 states that a court will
more
readily allow an applicant in his replying affidavit to utilize and
enlarge upon what has been revealed by the respondent and
to set such
additional ground for relief as might arise therefrom
”.
(my emphasis)
(See
Registrar of Insurance v Johannesburg Insurance CO LTD (1) SA
1962
(4) SA 546
(W)
.
This
shows that the rule that all the necessary allegations upon which
applicant relies must appear in his founding affidavit, as
he will
not generally be allowed to supplement the affidavit by adducing
supporting facts in a replying affidavit is not an absolute
one
.
(See Shepherd v Mitchell Cotts Seafreight (SA) (Pty)Ltd 1984 (3) 202
(TPD at 205F and Finishing Touch 163 (Pty) Ltd v BHP Billiton
Energy
Coal South Africa Ltd
2013 (2) SA 204
(SCA) at 212B-C and Shakot
Investments (Pty) Ltd v Town Counsil of the Barough of Stranger
1976
(2) SA 701
(D).
This
is so because
Rule 6
(15) uses the word “may” which
denotes that the court in exceptional circumstances has a discretion
to allow new matter
in a replying affidavit.
[31]
The questions which call for answers are:
(1) whether the fact
that applicants referred to incorrect legislation is fatal.
(2) whether
applicants introduced new matter and that that amounted to abandoning
their cause of action and substituting same with
a completely new
cause of action.
[32]
When answering the first question it is important to remind ourselves
that although applicants had initially relied on incorrect
legislation, respondents rectified that by referring to the relevant
legislation. This however, does not, change the cause of action
in
applicants’ matter. All it does, in my view, is to show whether
what applicants complain about was justifiable in terms
of the
correct legislation.
The
question, in my view, is whether applicants’ founding affidavit
contains sufficient allegations for the establishment
of their case.
This, the affidavit, in my view, has achieved. The facts in the
founding affidavit disclose that applicants set
out their full case
in the affidavit and thereby shifting the onus to respondents. This
is what applicants needed to establish
and they have done exactly
that. Reference to incorrect Act, Regulations and practice note, in
my view, has adequately been cured.
I do not, therefore, regard the
wrong citation of the law as fatal as the cause of action and the
facts remain the same.
[33]
As far as the second question is concerned, respondents, as shown
above, introduced PAJA in paragraphs 20.2 and 21 of their
answering
affidavit. All applicants did, after reference was made to PAJA by
respondents, was to enlarge on what respondents had
touched on. The
facts were there. It was only applicants who had not specified the
relevant sections of PAJA. This, in my view,
did not amount to
abandoning the cause of action by applicants and substituting that
with a completely new cause of action. The
sections which applicants
refer to in the replying affidavit are merely in line with the
aspects which applicants deal with in
their founding affidavit.
[34]
Section 6 (2) (a) (1) relates to an administrative action which was
not authorised. This has to do with the decision/resolution
which was
on 23 July 2012 taken by the Bid Adjudication Committee which it was
not authorised at the time, to take or adopt. Section
6 (2) (f) (i)
deals with an action which contravenes a law or is not authorised by
an empowering provision. These are administrative
actions which a
court or tribunal has the power to judicially review.
[35]
Section 3, too, has a bearing on the facts contained in applicants’
founding affidavit. Section 3 (2) (b) (1) (ii) and
3 (2) (b) (1) (v)
in particular deal with “a reasonable opportunity to make
misrepresentations and adequate notice of the
right to request
reasons in terms of section 5. Mr Botes submitted that applicants
were justified to deal with the sections of
PAJA in their replying
affidavit and that their reply ought not to be struck out in its
entirety. I agree. Applicants have not
changed their cause of action
which, in my view, has through and through remained the same.
[36]
Applicants introduced no new matter which amounted to a complete
change of their cause of action.
[37]
The facts of this case are akin to the facts of the case of
Chairman
State Tender Board v Digital Voice Processing (Pty) Ltd
2012 (2) SA
16
in which the State Tender Board had taken a decision to
blacklist a company. On discovering the blacklisting, the company
approached
the High Court and successfully challenged the decision as
procedurally unfair administrative action under section 6 of PAJA.
The
current case, in my view, is no different.
The
application to have the entire replying affidavit of first to ninth
applicants (in the main review application) attested to
and/or
commissioned on 18 June 2014 and served on respondents on 18 June
2014 struck out of the record of evidence should, in my
view, fail.
COSTS
[38]
Mr Mkize, upon taking instructions, appeared not to have problems
regarding the issue of costs.
[
39]
I, in the result, make the following order:
1. The second
point
in limine
is dismissed
with costs.
2. The
interlocutory application initiated by the second to the fifth
respondents (in the main review application) to strike the
applicant’s replying affidavit from the record is dismissed.
3. The Second,
Third, Fourth and Fifth respondents in the main review application
are ordered to pay the costs of the interlocutory
application
including the costs consequent upon employment of senior counsel.
MW
MSIMEKI
JUDGE
OF THE GAUTENG DIVISION, PRETORIA
Heard
on
:
26 & 27 JANUARY 2016
For
the Applicant
:
Adv F W BOTES
Instructed
by
:
WWB BOTHA ATTORNEYS
For
the Respondents
:
Adv L P MKIZE
Instructed
by
:
NKOSI NKOSANA INC
Date
of Judgment
: