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[2016] ZAKZPHC 105
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Vusa-Isizwe Security (Pty) Ltd v HOD: KZN Provincial Government Department of Health and Others (8206/16P) [2016] ZAKZPHC 105 (29 November 2016)
THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 8206/16P
In the matter
between:
VUSA-ISIZWE
SECURITY (PTY)
Ltd
APPLICANT
and
HOD: KZN PROVINCIAL
GOVERNMENT:
DEPARTMENT OF
HEALTH FIRST
REPONDENT
MOZ GOLD
CC SECOND
REPONDENT
ATHOPASI
SECURITY THIRD
RESPONDENT
JUDGMENT
Delivered on
29/11/2016
POYO DLWATI J:
[1] This application
is about whether the applicant’s contract with the first
respondent was lawfully and properly terminated.
[2] The applicant
was awarded three tenders by the first respondent on 20 March 2012.
The tenders were for the provision of security
services in Northdale
and Edendale hospitals in Pietermaritzburg. The third tender was for
the provision of security services at
Kwa-Zulu Natal Nursing College,
also in Pietermaritzburg. The contract period was for three years
commencing on 1 April 2012 and
ending on 31 March 2015. The
respective bid numbers were ZNB 4460/2010-H, ZNB 4215/2010-H and ZNB
4136/2010-H.
[3] A new tender was
advertised during March 2015 for the provision of security services
at Northdale and Edendale hospitals under
bid number ZNB 4000/2015H.
The applicant submitted its tender on 25 May 2015. It is not in
dispute that these bids were not finalised
by 30 March 2015. As a
result, the first respondent, in a letter dated 30 March 2015,
annexed to the applicant’s founding
affidavit as ‘FA6’,
extended the applicant’s contract to 31 October 2015.
[4] It appears that
the bids were again not finalised by the end of October 2015.
According to the applicant it was advised by a
representative of the
first respondent, Mr Naidoo, that its contract would be extended
until the finalisation of the bids. It is
at this stage that the
applicant requested, and it was agreed, that it would be given a
reasonable period, at least 90 days from
the date of the award, to
terminate its services in the event that it was not successful. This
it requested in order to allow an
orderly handover of the sites to
the new service provider and for the applicant to have sufficient
time to consult with its employees
and where possible to facilitate
their redeployment in terms of Sections 197 (1) (a) and 197 (2) (a)
and (b) read with
Section 198
of the
Labour Relations Act 66 of 1995
.
[5] This is where
the dispute emanates and there is a material dispute of facts in this
regard. According to the first respondent,
when the new bids were not
finalised by 30 October 2015, it sent a letter, annexed to its
answering affidavit as MN1, to the applicant
and extended its
contract to 31 January 2016. Again the bids were not finalised by 31
January 2016. The first respondent caused
a letter to be sent on 5
February 2016 extending the applicant’s contract on a month to
month basis until the finalization
of new bids. It avers that when
the awards were made in June 2016 by the MEC for Finance, it then
sent the applicant the letter
dated 1 July 2016, annexure FA7 to the
applicant’s founding affidavit, and terminated its services.
[6] On the other
hand, the applicant disputes that any other communication was made
regarding the termination of the contract other
than the agreement
reached in October 2015. It averred that it was surprised to receive
the first respondent’s letter dated
1 July 2016 purporting to
cancel its contract by 1 August 2016. According to the applicant,
when this letter was received, it contacted
Ms Sthandiwe Mbotho of
the first respondent and enquired about the cancelation. It also
enquired why it was not given the 90 day
notice period as agreed in
October 2015.
[7] The applicant
alleged that it was advised by Mbotho to ignore the letter as it was
incorrect. Mbotho promised that a new letter
with the proper notice
period would be issued. However, no letter was forthcoming and
attempts to contact Mbotho were futile. The
applicant made enquiries
on 22 July 2016 about the status of the 2015 bids and from there it
learnt that there had been various
objections and appeals pertaining
to the bids. However, it ascertained that the Bid Appeals Tribunal
had made certain recommendations
which were accepted by the MEC for
Finance on 29 June 2016.
[8] The applicant
further alleged that after these awards by the MEC for Finance,
various irregularities occurred which included
the second and the
third respondents entering into various agreements with the first
respondent about the allocation and swapping
of sites where the
security services would be rendered contrary to what had been
recommended to and agreed by the MEC for Finance.
It also appeared
that there was some collusion by the second respondent and other
bidders, as the member of the second respondent
is a son of the
member of KSA Security Services. These issues, according to the
applicant, are part of the grounds of review application
launched by
the applicant.
[9] It was as a
result of the first respondent’s failure to adhere to the
agreement of giving the applicant 90 days’
notice before
terminating the contract and the irregularities referred to in
paragraph 8
supra
that the applicant launched an urgent
application seeking to interdict the first respondent from
terminating its 2012 contract
pending the outcome of the review
application to be launched by the applicant. The applicant also
sought that the first respondent
be ordered to comply with all of its
obligations in terms of the 2012 contract. A rule nisi was issued by
Mthembu AJ on 29 July
2016. It, however, became apparent during the
beginning of August 2016 that the rule nisi did not have a provision
for interim
relief.
[10]
When the applicant tried to have the order amended so as to include
interim relief, same was not agreed to by the
first respondent. It
became necessary that an application to vary the order be made by the
applicant and same was opposed by the
first respondent. I will not go
into detail with this save to say that I granted the order varying
the order made by Mthembu AJ
as to provide for an interim relief on
14 October 2016.
[11]
Perhaps it is significant to mention at this stage that there were
then further applications to be adjudicated
upon before a return date
could be determined. It was then agreed between the parties that on
28 October 2016, I would hear the
opposed joinder applications of the
second and third respondents. There were also opposed
rule 35(12)
and
(14) applications brought by the applicant against the second and
third respondents which were ripe for hearing. Attempts were
also
made before 28 October 2016 for parties to try and reach settlement
in respect of these applications but none were successful.
Various
undertakings were also made between the parties in an attempt to
curtail various interlocutory applications between the
parties.
[12] On
28 October 2016 I granted an order for joinder of the second and
third respondents. I dismissed the
rule 35(12)
and (14) applications
against the second and third respondents. Applicant’s counsel
sought leave to file a further supplementary
founding affidavit in
light of the joinder of the second and the third respondents.
However, I did not make such an order. It was
agreed between the
parties, and I ordered as such, that the return date would be 18
November 2016. It was expected and had been
emphasised that all
parties would co-operate in filing various affidavits so that the
matter could be heard on 18 November 2016.
[13]
However, to my surprise and by sheer coincidence, the matter was set
down on the unopposed roll on 10 November
2016. There were no papers
in the court file indicating what application was before court. It
only transpired when counsel addressed
the court that there was an
application in terms of
rule 35(12)
and (14) against the first
respondent which had been opposed. As there were no papers in the
court file pertaining to this application,
I adjourned that matter
sine die
and directed the parties to engage in discussions
about how the matter was to proceed further. It was however
reiterated that the
return date remained the 18 November 2016.
[14] On
18 November 2016, Mr
Solomon
SC, on behalf of the applicant
sought an adjournment of the matter on the basis that there was an
outstanding
rule 35(12)
and (14) application against the first
respondent. As a result the applicant had not been able to file its
replying affidavit as
certain information it needed to prepare its
affidavit had not been provided. There was also a contempt of court
application brought
by the applicant as the first respondent had
failed to make payments relating to the provision of services from 1
July to 30 October
2016. The applicant sought that the first
respondent not be heard on the 18
th
until the contempt had
been purged.
[15] The
application for the adjournment was opposed by the first, second and
third respondents. It was argued on behalf
of these respondents that
the applicant’s application for an adjournment was a delaying
tactic by the applicant and further
all of the documents required by
the applicant had either been furnished to the applicant or that they
were not relevant to the
current application. It was further
submitted that the applicant ought to have filed its replying
affidavit by 25 August 2016 and
it was out of time for filing same. I
refused the application for adjournment on the basis that after I had
considered the
rule 35(12)
and (14) application, the documents
required by the applicant from the respondent were not relevant for
the determination of this
application. Whatever documents were
relevant to the current application had been attached to the first
respondent’s answering
affidavit and to the applicant’s
founding affidavit.
[16]
Furthermore, it had been agreed between the parties that the return
date was 18 November 2016 and no party had
advised me that there was
still a further application to be adjudicated upon before the return
date. The applicant did not advise
me at that stage that it was
unable to prepare its replying affidavit due to the outstanding
documents. It was by sheer coincidence
that I became aware of that
application on 10 November 2016 and it was, technically speaking, not
before court as there were no
papers in the court file relating to
it. It is my view that the insistence on an outstanding
rule 35(12)
and (14) application was just a delaying tactic by the applicant to
avoid the hearing and finalization of the application.
In any
event, after I refused the adjournment, Mr
Solomon
SC was able
to argue the main application.
[17] The
issues to be determined are whether the applicant is entitled to the
relief sought. Furthermore, whether there
is any justification in
extending the interim relief pending the review application launched
by the applicant in September 2016.
It is trite that in order to be
granted a final interdict the applicant must show:
(a) a
prima facie
right;
(b) unlawful
interference with that right, actually committed or reasonably
apprehended; and
(c) the absence of
any other satisfactory remedy.
See
Setlogelo v
Setlogelo
1914 AD 221
at 227 and
Van Deventer v Ivory Sun
Trading 77(Pty) Ltd
2015 (3) SA 532
SCA para 26
.
[18] The
applicant claimed that it had a
prima facie
right to be given
90 days before its contract could be terminated. This, it was
contended, arose through an oral agreement between
the applicant and
the representatives of the first respondent. This has been disputed
outright by the representative of the first
respondent, Mr Naidoo,
who reiterated that no agreement was reached with the applicant.
There is therefore a dispute of fact in
this regard and the applicant
has not asked that the matter be referred for oral evidence.
[19] It
is trite that in proceedings on notice of motion, where disputes of
fact have arisen on the affidavits, a final
order, whether it be an
interdict or some other form of relief, may be granted if those facts
averred in the applicant’s
affidavits which have been admitted
by the respondent, together with the facts alleged by the respondent,
justify such an order.
See
Plascon – Evans Paints Ltd v Van
Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E –
635C. Applying the above principle in the circumstances of this case,
I am not persuaded that granting the
order sought by the applicant
would be justified.
[20]
That, however, is not the end of the enquiry on this point. The
applicant averred that initially its contract with
the first
respondent was extended in March 2015 up to 30 October 2015.
Thereafter the agreement about the 90 days’ notice
was reached.
It did not receive any other correspondence from the first respondent
other than the correspondence of 1 July 2016.
The first respondent on
the other hand, through Mr Morganathan Naidoo, a systems manager
employed at Edendale Hospital, has demonstrated
how the extensions
were communicated to the applicant. All of these letters, on close
examination, are similar to FA7 attached
to the applicant’s
founding affidavit. I, therefore, have serious doubt that the
applicant received FA7 but did not receive
MN1 and MN2.
[21] The
significance of MN2 is that the applicant’s contract was
extended on a month to month basis from 1 February
2016 until the new
bids were finalised. According to Mr Naidoo, it was delivered to the
applicant in the same way that FA7 was
delivered. In any event any
variation to the contract ought to have been in writing as per clause
17 of the 2012 Service Level
Agreement between the applicant and the
first respondent. I therefore reject the applicant’s contention
that there had been
an agreement that it would be given 90 days’
notice before its contract would be terminated. I accept the first
respondent’s
version of events that the applicant’s
contract would be extended on a month to month basis until the new
bids were finalised.
[22]
This leads me to the applicant’s further argument that the
finalisation of new bids also meant any reviews
to be launched
seeking to set aside the award of the tender. This argument is
nonsensical in my view. It was not in dispute that
various appeals
had been launched dealing with these new bids. The MEC for Finance
made an award to the second respondent on 29
June 2016 after
recommendations from the Bid Appeals Tribunal. This, in my view,
meant that the new bids had been finalised. At
the time that the
applicant was notified of the termination of the contract, all
appeals had been finalised. There was no review
application or action
launched at that stage pertaining to those bids. The first respondent
was therefore entitled to assume and
conclude that the new bids had
been finalised.
[23] The
applicant has therefore not established any right that entitled it to
provide services to the first respondent
beyond 1 August 2016. Even
the averment that the applicant had spoken to Mbotho who had
undertaken to send a correct letter with
an appropriate notice has
been disputed by Mbotho.
If there was no right in the first
place, then it follows that there was no interference or infringement
with any right and no resultant
prejudice. There could therefore not
have been any irreparable harm, as a result of the termination. The
balance of convenience
favours the first respondent as it has to
comply with its obligations in terms of the award made on 29 June
2016.
[24] If
the applicant persists with the contention that there are various
irregularities with regard to the award of
the tender, which I
believe it does, it ought to have appealed the decision in terms of
the Kwazulu Natal Supply Chain Management
Policy Framework. It was
submitted that it did not appeal because it had not been advised that
the award of the tender had been
made. However, clause 28.2 of
special terms and conditions relating to the 2015 tender provides
that ‘the intentions of award
of the bid will be advertised in
the same media as the invitations’. The applicant ought to have
been aware of this. There
was therefore no duty on the first
respondent to have notified the applicant of the award of the tender
especially because it was
not a successful tenderer. In any event the
applicant would have enquired from those that liaised with it about
the status of the
tender. Even in the review proceedings the
applicant will have to deal with this failure of exhausting the
internal remedies available
to it before launching the review.
[25] In
any event, because of the conclusions I came to in the above
paragraphs I do not believe that I ought to make
any findings in
respect of the prospects of success in the review application.
However, I am satisfied that the applicant can pursue
its review
application without the interim relief or rule being confirmed. There
is no justification or case made out for the continuation
of the
interim relief. On the applicant’s own version the 90 days’
notice period has come and gone and it must accept
that the contract
was lawfully terminated. To extend the rule would be tantamount to
reviving an expired contract, something which
was frowned upon by the
Supreme Court of Appeal in
Tasima (Pty) Ltd v Department of
Transport
(792/2015)
[2015] ZASCA 200
(2 December 2015) and the
Constitutional Court in
Department of Transport and Others v
Tasima (Pty) Limited
(CCT5/16)
[2016] ZACC 39
(9 November 2016).
Order
[26] Accordingly, I
make the following order
‘
the rule is
discharged with costs including costs of 2 counsel where employed.’
_________________
Poyo Dlwati J
APPEARANCES
Date
of Hearing
: 18 November 2016
Date
of Judgment
: 29 November 2016
Counsel
for Applicant
:
Adv R A Solomon SC with Adv A
MacManus
Instructed
by
: Vishal Junkeeparsad &
Company C/O
J
Leslie Smith
Counsel
for First Respondent : Adv
V M Naidoo SC with Adv S Jasat
Instructed
by
: State Attorney (KZN) C/O
Cajee Setsubi
Chetty
Inc
Counsel
for Second Respondent: Adv A J Rall SC
Instructed
by
: A P Ngubo Attorneys
Counsel
for Third Respondent : Adv
V Moodley
Instructed
by
: Siva Chetty and Company