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[2015] ZAGPPHC 25
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DDP Valuers (Pty) Ltd v Madibeng Local Municipality and Another (1066/2014) [2015] ZAGPPHC 25 (4 February 2015)
/SG
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
DATE: 4 FEBRUARY
2015
CASE NO: 1066/2014
NOT REPORTABLE
OF INTEREST TO OTHER
JUDGES
In the matter
between:
DDP VALUERS (PTY)
LTD
........................................................................................
APPLICANT
And
MADIBENG LOCAL
MUNICIPALITY
...........................................................
1
ST
RESPONDENT
DIJALO PROPERTY
VALUERS
......................................................................
2
nd
RESPONDENT
JUDGMENT
MAKGOBA. J
[1] The applicant
seeks the review and setting aside of the first respondent’s
decision to award Tender Number RFT10/3/2013
for the Complication of
a New General and Supplementary Valuation Roll for the period
2014-2018 (“the Tender”) to the
second respondent. The
applicant also asks the court for an order declaring that it be
substituted as the successful bidder.
[2] The applicant
has also brought an interlocutory application to strike out certain
portions of the second respondent’s
answering affidavit on the
grounds that they constitute opinion evidence and are irrelevant and
also on the grounds that they constitute
hearsay evidence.
[3]
The interlocutory application was opposed by the second respondent
and was extensively argued before 1 me. However, in view
of the
decision I have arrived at regarding the point
in
limine
raised
by both the first and second respondents, it is immaterial to make
any ruling on the interlocutory application.
[4] The first
respondent (“the Municipality”) issued an invitation to
tender (“RFP”) for the compilation
of a New General and
Supplementary Valuation Roll for the period 2014-2018 on 10 May 2013.
Fifteen bidders responded to the RFP.
Both the applicant and second
respondent (“Dijalo”) were shortlisted.
[5] Dijalo submitted
its bid on 10 June 2013. It was ultimately successful in its bid and
was awarded the tender. Dijalo was appointed
to perform the services
listed in the agreement with effect from 9 September 2013 until 30
June 2018 in terms of the Service Level
Agreement signed on 25
September 2013.
[6] The applicant is
the former municipal valuers of the Madibeng Municipality for the
period preceding September 2013. The applicant
was one of the
unsuccessful tenderers in the tender under review.
[7] The applicant
seeks the review and setting aside of the award of the tender to
Dijalo on the following grounds:
7.1 That the Bid
Evaluation Committee (“BEC”) evaluated the tender on
criteria in respect of functionality that differ
from that stated in
the Tender Documentation.
7.2 That a perusal
of Table 2 makes it clear that there were huge discrepancies in the
points awarded to both the applicant and
to Dijalo.
7.3 An ad hoc
committee comprising of three members evaluated the tender on
functionality. Because the BEC did not have the requisite
expertise
to evaluate the tender on functionality, the BEC simply rubberstamped
the recommendation of the ad hoc committee.
7.4 That contrary to
the dictates of Regulation 4(5) of the Preferential Procurement
Regulations the BEC subjected the tender for
a further evaluation on
responsiveness instead of evaluating the tender in terms of the
preference points system prescribed in
PP Regulations 5 and 6.
[8]
The respondents raised a point
in
limine
that
the applicant has not exhausted its internal remedies against the
Municipality before launching the judicial review proceedings.
They
argued that the upholding of the point
in
limine
will
be dispositive of the whole case before me.
[9] Section 7(2) of
the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”)
provides:
“
2(a)
Subject to paragraph (c), no court or tribunal shall review an
administrative action in terms of this Act unless any internal
remedy
provided for in any other law has been exhausted.
(b) Subject to
paragraph (c), a court or tribunal must, if it is not satisfied that
any internal remedy referred to in paragraph
(a) has been
exhausted, direct that the person concerned must first exhaust such
remedy before instituting proceedings in a court
or tribunal for
judicial review in terms of this Act.
(c) A court or
tribunal may, in exceptional circumstances and on application by the
person concerned, exempt such person from the
obligation to exhaust
any internal remedy if the court or tribunal deems it in the interest
of justice. ”
[10] Section 7(2) of
PAJA essentially provides that unless exceptional circumstances are
found to exist by a court on application
by the affected person,
PAJA, which has a broad scope and applies to a wide range of
administrative actions, requires that available
internal remedies be
exhausted prior to judicial review of an administrative action.
[11]
The Supreme Court of Appeal has noted in
Nichol
and Another v Registrar of Pensions and Others
2008
1 SA 383
(SCA) at [15]:
“
It
is now compulsory for the aggrieved party in all cases to exhaust the
relevant internal remedies unless exempted from doing so
by way of a
successful application under s 7(2)(c). Moreover, the person seeking
exemption must satisfy the Court of two matters:
first that there are
exceptional circumstances and second, that it is in the interest
ofjustice that the exemption be given”
[12] Upon being
advised that the tender was awarded to Dijalo, the applicant
exercised its rights in terms of the provisions of
Regulation 49 and
50 of the Preferential Procurement Regulations, 2011, promulgated
under the
Preferential Procurement Policy Framework Act 5 of 2000
and
published under GN R502 in Government Gazette 34350 of 8 June 2011,
and directed a letter of objection dated 1 October 2013
to the
Municipality.
[13] The contents of
the said letter is of paramount importance hence portions thereof are
reproduced hereunder.
The heading of the
letter reads thus:
“
OBJECTION
IN TERMS OF REGULATION 49 OF THE SUPPLY CHAIN MANAGEMENT REGULATIONS,
AGAINST THE DECISION OF THE MUNICIPALITY IN TENDER
NO RFT 10/03/2013:
COMPILATION OF GENERAL AND SUPPLEMENTARY VALUATION ROLL.”
The contents of the
letter reads:
“
1.
...
2. Please take
note that we hereby formally submit an objection/complaint to the
Municipality, with the appointment of the new municipal
valuer, in
terms of Regulation 49 of the Supply Chain Management Regulations and
to have the dispute/objection/complain resolved
as is providedfor in
Regulation 50 of the SCM Regulations.
3.
It
was ruled in the Supreme Court of Appeal Judgment of
Tetra
Mobile Radio (Pty) Ltd v The MEC for Works and others
2008 1 SA 438
(SCA)
that an
unsuccessful bidder is entitled to have at least the information to
enable it to formulate its appeal properly.
On the authority
of the SCA judgment and to enable us to properly formulate the
objections and complaints the following information
is required:-
…
.................................................................................................
…
...................................................................................................
5. Please note
that this letter already constitutes the lodging of an
objection/complaint in terms of
Regulations 49
and
50
of the
Municipal Supply Chain Management Regulations that
is binding on the
Municipality.
6. We further
require the Municipality:
(a) to provide
this office with the information listed in paragraph 4 above on or
before 14 October 2013.
(b) that the
Municipality in terms of Regulation 50 of the Supply Chain Management
Regulations appoint a competent and qualified
person to assist in
resolving the dispute between ourselves and the Municipality; and
(c) that the
Municipality pends or place the successful bidder on hold in doing
any work until the due and proper resolution of
the dispute.”
[13] There is no
doubt that the abovementioned letter constitutes an objection,
complaint or appeal against the decision of the
Municipality to award
the tender to the successful bidder. The applicant even goes on to
call upon the Municipality to “appoint
a competent and
qualified person to assist in resolving the dispute”. Clearly,
the applicant was quite aware of its rights
and did in fact initiate
the process to exhaust its internal remedy.
It is surprising
that along the way the applicant abandoned this due process and
embarked on the legal process of launching the
present judicial
review proceedings.
[14] In an effort to
justify its failure to exhaust the internal remedy Counsel for the
applicant relied on regulation 50(7) which
provides that:\
“
(7)
T
h
is
regulation
must not be read as affecting a person’s rights to approach a
Court at any time”
The reliance on the
above provision is misplaced. Section 7(2) of PAJA is peremptory and
the provisions of the above regulation,
being a subordinate
legislation, cannot override a statutory enactment such as section
7(2) of PAJA. In any event the applicant
should still have approached
this court on application for an exemption as required in terms of
section 7(2)(c) of PAJA.
[15] It seems that
an official of the municipality was unwilling to correspond directly
with the applicant after receipt of the
objection letter. However,
the official of the municipality did not appear to have made a
decision for or against the applicant
in respect of the
objection/complaint or appeal nor does the applicant allege that such
a decision was made. Whatever the merits
of the dispute about the
lack of correspondence from the municipality, it does not absolve the
applicant from complying with the
requirement that it exhaust its
internal remedies in terms of section 7(2)(c) of PAJA.
[16]
The Constitutional Court has described the requirement of exhausting
internal remedies as “valuable and necessary”
and held as
follows in
Koyabe and Others v Minister of Home
Affairs and Others
2010
4 SA 327
(CC):
“
[35]
Internal remedies are designed to provide immediate and
cost-effective relief giving the executive the opportunity to utilise
its own mechanisms rectifying irregularities first, before aggrieved
parties resort to litigation. Although Courts play a vital
role in
providing litigants with access to justice, the importance of more
readily available and cost-effective internal remedies
cannot be
gainsaid.
[36] First,
approaching a court before the higher administrative body is given
the opportunity to exhaust its own existing mechanisms
undermines the
autonomy of the administrative process. It renders the judicial
process premature, effectively usurping the executive
role and
functions.”
See
also
Bato Star Fishing (Pty) Ltd v Minister of
Environmental Affairs and Others
[2004] ZACC 15
;
2004
4 SA 490
(CC) at
[45]
.
[17] Allowing an
internal appeal under regulation 49 and 50 in the circumstances of
this case would enhance the autonomy of the
administrative process
and provide the possibility of immediate and cost-effective relief
prior to aggrieved parties resorting
to litigation. An internal
appeal process would also allow the municipality to develop
guidelines for the proper application of
the Supply Chain Management
policy in future decisions on tenders.
Compare:
Bengwenyama Minerals (Pty) Ltd and Others v
Genorah Resources (Pty) Ltd and Others
2011
4 SA 113
(CC) at [50].
[18] The duty to
exhaust internal remedies is a valuable and necessary requirement in
our law. However, that requirement should
not be rigidly imposed nor
should it be used by administrators to frustrate the efforts of an
aggrieved person or to shield the
administrative process from
judicial scrutiny. PAJA recognised this need for flexibility,
acknowledging in section 7(2)(c) that
exceptional circumstances may
require that a court condone non-exhaustion of the internal process
and proceed with judicial review
nonetheless. Such condonation can
only be granted upon application by the party seeking judicial
review.
[19] It is common
cause that in the present case the applicant failed to bring an
application for condonation in terms of section
7(2)(c) of PAJA. The
applicant’s contention is that it could not continue to embark
on the process it initiated in its letter
of objection dated 1
October 2013 because the first respondent refused or was reluctant to
communicated with it through further
correspondence. There is no
merit in the applicant’s contention. The fact remains that the
applicant did not bring an application
for condonation before this
court and shows no exceptional circumstances as a basis for a claim
to be exempted from exhausting
the available internal remedies.
[20]
The applicant’s further contention is that the purported
internal remedy would not be effective and/or its pursuit would
be
futile in that the internal tribunal would not have the powers to
declare the award of the tender invalid and set it aside.
In my view,
it was still incumbent upon the applicant to approach this court on
application for exemption in which event this court
may permit the
applicant to approach the court on review directly. So too where an
internal appellate tribunal has developed a
rigid policy which
renders exhaustion futile. See
Koyabe
case,
supra
at
paragraph [39].
[21]
The applicant’s Counsel relied on the decision in
Reed
and Others v Master of the High Court of SA and Others
[2005]
2 All SA 429
(E)
and argued that it was not necessary for the applicant to exhaust
internal remedies before launching review proceedings. In that
case a
point was raised that as this was an application to review an
administrative action, the applicants were obliged in terms
of
section 7(2) of PAJA to exhaust internal remedies before launching
review proceedings. This point failed and it was held that
the
Administration of Estates Act 66 of 1965
did not provide any internal
remedies.
The case is clearly
distinguishable from the present case. In the present case there are
regulations, namely Preferential Procurement
Regulations, 2011
promulgated under the Preferential Procurement Policy Framework Act 5
of 2000, specifically providing internal
remedies in regulations 49
and 50.
The
reliance on the
Reed
case
is therefore misplaced.
[22] I accordingly
make a finding that the applicant’s judicial review application
is premature and the applicant was first
required to exhaust the
available internal remedies. In the light of the provisions of
section 7(2)(b) of PAJA the applicant is
directed to proceed with the
exhaustion of internal remedies before it embarks on a judicial
review, if necessary.
[23] Having decided
that the applicant has failed to exhaust internal remedies and thus
launched these review proceedings prematurely,
I am of the view that
this issue is dispositive of the whole case before me. It is
therefore unnecessary to consider the merits
of the review
application.
[24] In the result
the application is dismissed with costs.
E M MAKGOBA
JUDGE OF THE
GAUTENG DIVISION. PRETORIA
Heard
on
:
27-28 January 2015
For
the Applicant
:
Adv BC Stoop SC
Instructed
by
:
Coetzer & Partners
For
the 1
st
Respondent
:
Adv MA Dewrance
Instructed
bv
:
Kunene Ramapala & Botha Inc
For
the 2
nd
Respondent
:
Adv N Rajab-Budlender
Instructed
bv
:
Edward Nathan Sonnenbergs c/o Gerhard Botha & Pamers
Date
of Judgment
:
4 February 2015