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[2013] ZAECBHC 10
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Freedom Stationery (Pty) Ltd v MEC for Education, Eastern Cape and Another (280/2011) [2013] ZAECBHC 10 (9 September 2013)
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Certain
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IN THE EASTERN CAPE
HIGH COURT, BHISHO
CASE No.: 280/2011
In the matter between:
FREEDOM
STATIONERY (PTY) LIMITED
Plaintiff
and
THE
MEMBER OF EXECUTIVE COUNCIL FOR EDUCATION
1
st
Defendant
THE
SUPERINTENDENT GENERAL OF THE DEPARTMENT
OF
EDUCATION, EASTERN CAPE PROVINCIAL GOVERNMENT
2
nd
Defendant
JUDGMENT
Y EBRAHIM J:
[1]
The plaintiff has instituted action against
the first and second defendants for damages in the sum of
R3 788 762,64 for
loss of profit. The plaintiff
claims that it suffered such loss due to the failure of the
Department of Education, Eastern
Cape, (‘the Department’)
to award the plaintiff a contract, or any part thereof, pursuant to a
tender advertised by
the Department.
[2]
I
outline briefly the common cause details of the historical background
to this action. Prior to September 2010, the Department
advertised a tender under contract no. SCMU6 10 11 0005
for the manufacture, packaging and supply of scholastic
stationery
for grades R to 12 to local distribution centres in the
Eastern Cape. The plaintiff and other bidders
submitted tenders
for this contract and in a letter dated 17 December 2010
[1]
the Eastern Cape Provincial Treasury informed the second defendant
that the Interim Bid Advisory Committee supported the recommendation
of the Department to award the contract to a group of six qualifying
bidders, which included the plaintiff.
[3]
On
11 January 2011 a notice appeared in the Daily Dispatch
newspaper cancelling the tender process. The plaintiff and
another bidder, Power Stationery (Pty) Ltd, thereupon instituted
urgent proceedings against the first and second defendants, and
other
affected parties, to review the second defendant’s decision to
cancel the tender and to award the contract, or parts
thereof, to two
other suppliers. On 17 March 2011, by agreement between the
parties, an order was issued setting aside
the cancellation of
the tender and the award of the tender to the other affected parties,
and the second defendant was directed
to adjudicate on the tender for
contract no. SCMU6 10 11 0005 from the stage when the
Interim Bid Advisory Committee
addressed the letter dated 17 December
2010 to the second defendant.
[2]
[4]
In
a letter dated 1 April 2011
[3]
the second defendant conveyed to the plaintiff,
inter
alia
,
that:
‘
[T]he
accounting officer of the Department of Education must take all
reasonable steps to prevent abuse of the supply chain management
process, including investigating any allegations against an official
or other role player of corruption, improper conduct or failure
to
comply with the supply chain management process.
……
T
he letter dated 17
December 2010, which was addressed to Advocate Mannya, is an internal
document intended for the consumption of
Advocate Mannya in his
capacity as accounting officer for the Department of Education.
I
n order for the
accounting officer of the Department to determine whether Freedom
Stationery and/or any official of the department
has abused the
supply chain management process of the Department or conducted
itself/herself/himself in an improper manner, Freedom
Stationery is
hereby called upon to furnish the Department with detailed
particulars regarding how, when and from whom it obtained
possession
of the letter dated 17 December 2010. You are further
informed that the failure to make a proper disclosure
……
may be construed as being tantamount to influencing the supply chain
process.
’
[5]
Shepstone
& Wylie Attorneys, representing the plaintiff, informed the
second defendant in a letter dated 4 April 2011,
[4]
despatched via facsimile transmission and e mail, that the
plaintiff received a copy of the letter from a competitor and did
not
know how the competitor came into possession thereof. The
attorneys referred the second defendant to an affidavit of
a
Mr Vishal Seebram (filed in Case No. 59/2011) wherein he
said the letter dated 17 December 2010 was sent on the
same day
(according to the attorneys presumably by a Mr Tolisa of the
Department). The attorneys pointed out that the
second
defendant had attested in an affidavit dated 17 February 2011
that this constituted a compromise of the supply chain
management
system by Paper Active (Pty) Ltd and African Paper Products (Pty)
Ltd, not their client (the plaintiff). The attorneys
said: ‘It
cannot conceivably be improper conduct on our client’s part to
receive a copy of a letter confirming that
it is the number 1
supplier recommended by your treasury department. Our client
certainly did not solicit private information
from the Department.
Nor do we believe that possession of documentation of the bid process
can be regarded as affecting the
outcome of the process. We
note the requirement of section 217 of the Constitution that all
State procurement processes be
transparent. …… We
accordingly deny that there has been any improper conduct on our
client’s part and
we continue to assert that no lawful reason
exists why our client should not be awarded the tender or part
thereof. Furthermore,
should the Department award the contract
contrary to law, our client shall not hesitate once more to challenge
any unlawful decision.
’
[5]
[6]
The
second defendant, not satisfied with this reply, informed the
plaintiff’s attorneys in a letter dated 12 April 2011,
[6]
sent by facsimile transmission, that:
‘
Y
our
client’s failure to give full particularity on how, when and
from whom it received a copy of the letter dated 17 December
2010 addressed by the Interim Advisory Award Committee [
sic
]
to Advocate Mannya leaves the Department with no alternative but to
conclude that your client’s possession of the said letter
came
about through an abuse of the supply chain management processes of
the Department or improper conduct. In view thereof,
the
accounting officer of the Department intends rejecting your client’s
bid in accordance with regulations 16A9.2(a)(i)
and (ii) of the
Treasury Regulations, 2005 which permits the accounting officer to
disregard the bid of any bidder if that bidder,
or any of its
directors have abused the Department’s supply chain management
system or have committed any other improper
conduct in relation to
such system.
Your client is once again
afforded the opportunity of stating, in writing by no later than
13H00 on 12 April 2011, of how, when
and from whom it obtained a copy
of the letter dated 17 December 2010 addressed by the Interim
Advisory Award Committee (
sic
) to Advocate Mannya before a
final decision is taken on the matter.
All correspondence should
be addressed to Adv. M. Mannya, Superintendent General of the Eastern
Cape Department of Education, at
the following address Steve Vukile
Tshwete Complex, Zone 6 Zwelitsha, 5608, Private Bag X0032, Bhisho,
Fax: 040 608 4249.’
[7]
The
same day the plaintiff’s attorneys replied in a letter
[7]
sent by facsimile transmission.
[8]
However, the letter was incorrectly dated and the attorneys sent a
further letter with the correct date by facsimile transmission
and
e mail,
[9]
which read as
follows:
‘
We
refer to your telefax dated April 12 2011 which was sent to us this
morning.
A copy of the December 17
letter was sent to the writer by Power Stationery on February 8 2011
while the writer was taking instructions
with regard to the interdict
proceedings which were then taken against your Department to confirm
our client had been shortlisted.
Our
client’s position is that it cannot be contended on any basis
that is (
sic
)
guilty of “improper conduct” or has “abused”
your supply chain management processes as you allege.
’
[8]
The
Chief Financial Officer of the Department in a letter dated 19 April
2011
[10]
informed the
plaintiff that ‘[i]t is regretted that your company has not
been successful in Bid SCM 6-10/11-0005 which is
on (
sic
)
supply of stationery to section 20 schools in 2011 academic year in
the Province of the Eastern Cape.’
[9]
The
plaintiff’s attorneys responded on 20 April 2011
[11]
requesting the second defendant to furnish reasons for the plaintiff
being unsuccessful with its bid.
[10]
The
State Attorney, Bisho replied on behalf of the second defendant and
in a letter dated 21 April 2011
[12]
detailed the reasons for the second defendant’s decision to
reject the bid of the plaintiff.
[11]
Subsequent thereto the plaintiff instituted
these proceedings against the defendants.
[12]
The principal averments of the plaintiff’s
cause of action are set out in the following paragraphs of the
plaintiff’s
particulars of claim:
’
20.
When Second Defendant made his decision on 13 April 2011 he was in
receipt of Plaintiff’s reply of 12 April 2011.
The reason given for Second Defendant’s rejection of Plaintiff
from the tender process, namely that Plaintiff had not replied
to
inquiry dated 12 April 2011 was not correct.
21.
In the circumstances the ignoring of Plaintiff’s response was
arbitrary and unreasonable.
22.
The reasons furnished by Second Defendant as to why Plaintiff had
been unsuccessful in the tender were unfounded and irrational.
23.
Second defendant awarded part of the tender to Power, which was
identified in Plaintiff’s response of 12 April 2011 as
Plaintiff’s source of “A”.
24.
The inference arising from Second Defendant’s ignoring of
Plaintiff’s response of 12 April 2011 and the award
of
part of the tender to Power and from the reasons given by Second
Defendant for Plaintiff’s exclusion is that the decision
was
made in bad faith and with the express intention of excluding
Plaintiff from the tender process.
25.
In the result the decision to exclude Plaintiff from the tender
process was wrongful and founds an action on behalf of Plaintiff
against the Defendants in damages.
’
[13]
[13]
The defendants have denied liability and
the crux of the defence of the defendants is contained in the
following paragraphs of their
plea:
‘
8.2
In terms of the Treasury Regulations issued in terms of the Public
Finance Management Act, 1999
(Act 1 of 1999) published under GN R225
in GG 27388 of 15 March 2005 (the Regulations) an accounting
officer, such as
is the second defendant, may disregard the bid or
tender of any bidder if that bidder, or any of its directors have
abused the
institution’s supply chain management system.
8.3
The second defendant had information at his disposal pointing to the
plaintiff having abused the
supply chain management system.
8.4
The plaintiff was afforded an opportunity to make written submissions
anent the information referred
to in paragraph 8.3.
8.5
The plaintiff did not advance facts and reasons showing that it had
not abused the supply chain
management system.
8.6
In view thereof, the plaintiff’s bid was disregarded in terms
of regulation 16A9.2(a)(i)
of the Regulations.
8.7
The defendants particularly deny having been in possession or receipt
of annexure F either before
or after a decision was taken on 13 April
2011 in respect of the award of the tender. The defendants also
deny the correctness
and authenticity of the fax transmission report
marked “F”.
8.8
In the circumstances, the defendants deny that –
8.8.1
the decision of the second defendant was arbitrary, unreasonable,
unfounded and irrational; and
8.8.2
the second defendant acted in bad faith either as alleged or at all,
and put the plaintiff to the proof
thereof.
’
[14]
Pursuant to an order issued at a previous
hearing the merits and quantum of the plaintiff’s claim have
been separated and
the only issue for determination at present is the
merits.
[15]
Mr Paterson SC, with Ms Watts,
appeared for the plaintiff and in presenting the plaintiff’s
case stated in his opening
address that the essence of the
plaintiff’s cause of action was encapsulated in paragraph 24 of
the particulars of claim.
[16]
A list of admissions was handed in by Mr
Paterson and by agreement between the parties admitted into evidence.
The admissions
are:
‘
1.
The Defendants admit the content of the Rule 36(9)(b) Notice, dated
27 July 2012 and
the supplementary notice, dated 31 August 2012,
of Garry Jevons is true and correct and that the expert notices may
be admitted
into evidence at the trial without calling the witness.
2.
The Defendants admit that the content of the Rule 36(9)(b) Notice of
Mathys Jacobus
Blignaut, dated 27 July 2012, is true and correct and
that the expert notice may be admitted into evidence at the trial
without
calling the witness.
3.
The Defendants admit that on 4 April 2011 Ms Rose Lorimer, an
employee of Shepstone
& Wylie Attorneys, sent the facsimile
attached to the Particulars of Claim as “D” to facsimile
number 040 […],
being the facsimile number of the Second
Defendant, and that such facsimile was received by the Second
Defendant.
4.
The Defendants admit that on 12 April 2011 at 13H19 Ms Rose Lorimer,
an employee of
Shepstone & Wylie Attorneys, sent the facsimile
attached to the Particulars of Claim as “F1” to facsimile
number
040 […], being the facsimile number of the Second
Defendant.
4.1
That the facsimile was received by the facsimile machine of the
Second Defendant.
5.
The Defendants admit that on 12 April 2011 at 13h44 Ms Rose Lorimer,
an employee of Shepstone & Wylie
Attorneys, sent the facsimile
attached to the Particulars of Claim as “F2” to facsimile
number 040 […],
being the facsimile number of the Second
Defendant.
5.1
That the facsimile was received by the facsimile machine of the
Second Defendant.
6.
The Defendants admit that on 12 April 2011 at 13H36 Ms Rose Lorimer,
an employee
of Shepstone & Wylie Attorneys, sent an email which
attached “F1” to the email address
g[...]@edu.ecprov.gov.za
.
7.
The Defendants admit that on 12 April 2011 at 13H34 Ms Rose Lorimer,
an employee
of Shepstone & Wylie Attorneys, sent an email which
attached “F1” to the email address
N[...]@webmail.co.za
.
8.
The Plaintiff admits the content of the report of Mornay van Staden,
dated 13 August
2012 is true and correct, and that the expert
notice may be admitted into evidence at the trial without calling the
witness.’
[17]
After elucidating on the aforesaid
admissions Mr Paterson closed the case for the Plaintiff.
[18]
A further admission was admitted into
evidence, by agreement, after the defendants had closed their case,
namely: ‘9. The Defendants
admit that
Exhibit “A” is an authentic record of the email received
by Rose Lorimer, as appears in Exhibit “A”.’
[19]
Mr Mbenenge SC, with Ms Da Silva, appeared
for the defendants and adduced the evidence of Ms Gcobisa Katikati
and Mr P Zokwe.
[20]
The
substance of the testimony of Ms Gcobisa Katikati was that during
April 2011 she was the assistant professional assistant to
the second
defendant. One of her duties was to acknowledge receipt of
e mails that were sent to her e mail address
–
g[...]@edu.ecprov.gov.za
,
print these out and hand them to Mr P Zokwe, who was responsible
for incoming and outgoing correspondence in the office of
the second
defendant. He then captured the e mails on the system
before passing them on to the other officials in the
office.
[21]
According
to Ms Katikati, the second defendant did not share her e mail
address and had his own e mail address, which
to her
recollection was
m[...]@gmail.com
.
The second defendant did not have a fax (facsimile) machine in
his own office and fax number 040 608 4249 was that of the
machine
located in the main reception area of the office of the second
defendant. Neither she nor the receptionist named
Mamubolekwa
dealt with faxes they received as these were the responsibility of
Mr Zokwe.
[22]
Ms Katikati stated she did not receive the
e mail letter dated 12 April 2011 from Shepstone & Wylie
Attorneys. Had
she received it she would have replied by
acknowledging receipt, printing it out and giving it to Mr Zokwe
to capture on the
system. Mr Zokwe would then pass it on to the
senior professional assistant (PA) to hand to the second defendant as
the PA
had access to him.
[23]
Cross examined
by Mr Paterson, Ms Katikati said she did not receive the letter dated
4 April 2011 (Annexure “D”)
on which her e mail
address and the e mail address
N[...]@webmail.co.za
appeared. She did not receive it on 4 April 2011 or at any
time thereafter.
[24]
Asked if she read each document she
received Ms Katikati said that due to the volume of correspondence
received by the office of
the head of department (HOD) she did not
have the time to go through document but knew from whom an e mail
came including
the date, subject and address. She acknowledged
receipt by pressing reply, printing out the e mail and giving it
to
Mr Zokwe. He placed a date stamp on it and captured the
e mail on the system before handing it over to the PA and kept
a
record of all e mails, faxes and correspondence received by the
office of the HOD and scanned the documentation.
[25]
On
being shown a copy of an e mail dated 4 April 2011
[14]
that read, ‘Confirmed receipt of your e mail and have
forwarded to the relevant official
’
,
which Ms Rose Lorimer of Shepstone & Wylie Attorneys had
received, Ms Katikati replied she could not confirm typing
the
acknowledgement as she did not recall receiving the e mail sent
by Shepstone & Wylie Attorneys. A search
had been
conducted on her computer for their e mail but it could not be
found.
[26]
Ms Katikati denied receiving either
Annexure “F1” or Annexure “F2” that were
e mailed to her e mail
address on 12 April 2011 and
also transmitted by facsimile by Shepstone & Wylie Attorneys.
She said she clearly
remembered not receiving these as it was not the
first time the question of receipt of these had arisen. In July
or August
2011 the staff members in the office were asked to look for
the e mails and confirmed they were not received.
[27]
She could not recall being asked on
12 April 2011 to look out specifically for a letter or e mail
from Shepstone &
Wylie Attorneys. She was not sure if she
was at work on 12 April 2011 but if she was she would constantly have
updated the
e mails on her computer. She had a laptop
which was open the whole time and e mails would automatically
appear
on it in minimised form until she opened the e mail.
[28]
Questioned on whether she knew what a
server was, Ms Katikati replied she did not understand how it
functioned and that it stored
e mails she received on her
computer. Asked to explain why the particular e mail from
Shepstone & Wylie Attorneys,
which the defendants admitted was
received by the server, had not reached her computer she replied she
could not and that it was
for an IT expert to explain how this
occurred. She refuted her denials were based on subsequent
investigations she conducted
and her not finding the e mails and
said it was based on the fact that she did not receive the e mails.
[29]
Mr Pilasande Zokwe testified that during
April 2011 he was employed as a state accountant in the Education
Department. His
duties entailed receiving faxes, date stamping
and scanning these and capturing the faxes on the system. He
would then take
the faxes to the PA of the HOD for distribution to
the intended recipients.
[30]
Mr Zokwe stated he did not receive
Annexure “F”, the letter dated 12 April 2011 that
Shepstone & Wylie Attorneys
addressed to ‘
Office
of the Head: Education Eastern Cape
’
.
He kept a register of all incoming and outgoing correspondence,
including e mails, and if he had received the letter
he would
have scanned it and passed it on to the PA.
[31]
He was shown a document by Mr Mbenenge and
confirmed it was a photocopy of the register of 12
th
and 13
th
April 2011 of incoming and outgoing documents. He reiterated he
did not receive Annexure “A” and said he had
not handed
it to the second defendant.
[32]
During cross examination by Mr
Paterson, Mr Zokwe said he could not recall seeing Annexure “C”,
the letter dated
1 April 2013 the second defendant addressed to
the plaintiff. He could also not recall seeing Annexure “D”
and denied receiving it as an e mail or a fax. Questioned
about Annexure “E” (the second defendant’s
reply to Annexure “D”) he denied seeing it before.
When asked how the second defendant could have replied to
Annexure
“D” (the letter sent by Shepstone & Wylie Attorneys)
if the second defendant had not received their letter,
Mr Zokwe
replied that if he had received Annexure “D” it would
have been on his system. He conceded, however,
that on
occasions the second defendant had dealt with correspondence through
his PA and not through him.
[33]
Mr Zokwe said he read incoming documents as
he needed to know the subject being dealt with so that he could enter
this in the register.
He, and not the secretary, collected the
incoming faxes and scanned them. It was not possible for a PA
to take a fax directly
to the second defendant as ‘
most
of the times
’
each fax that came in
had to go through him to the second defendant. It was put to
Mr Zokwe that his use of the phrase
‘
most
of the times
’
indicated there were
exceptions but he replied this was not possible.
[34]
Mr Paterson referred to the fact that the
defendants admitted Annexure “F” was received by
facsimile machine with
number 040 608 4249, and put to Mr Zokwe that
as Annexure “F” had not been entered in his register
it must have
been delivered to the second defendant without passing
through him. Mr Zokwe’s reply to this was that he
had no
knowledge thereof and he received every fax that came in and
took the fax to the relevant official.
[35]
He did not remember anyone alerting him on
12 April 2011 to look out at 13h00 for a faxed reply to
Annexure “E”.
The second defendant had not at any
time asked him if a fax had come in from Shepstone & Wylie
Attorneys.
[36]
In reply to a question from the Court, Mr
Zokwe said there were occasions when someone asked for a particular
fax or e mail
and he informed the person he had no record
thereof. Usually it was the PA who would ask for the documents.
This concluded
the case for the defendants.
[37]
At issue in this matter is whether or not
the second defendant was in receipt of Annexure “F”
(plaintiff’s
reply dated 12 April 2011) prior to his taking the
decision on 13 April 2011 to reject the plaintiff’s bid in
tender
contract no. SCMU6 10 11 0005.
[38]
Mr
Paterson submitted that a process of inferential reasoning
[15]
was to be used in analysing the evidence and this would lead to the
conclusion that the answer to the aforementioned question was
in the
affirmative. I did not understand Mr Mbenenge to
differ with this approach save that Mr Mbenenge submitted
that
the inference contended for by Mr Paterson was not justified on
the evidence.
[39]
The nub of Mr Paterson’s submissions
was that the plaintiff had shown that the facsimiles were received in
the office of the
second defendant and could go no further than this
as it did not have insight into the internal mechanisms of the office
of the
second defendant. Reliance could however be placed upon
the reliability of the previous means of communication utilised by
the parties, namely e mails and facsimile transmissions, to show
there had not been any difficulties or a breakdown in communication.
The previous exchange of correspondence between the parties confirmed
this to be so. The second defendant had designated
the
plaintiff should reply via facsimile and the plaintiff had done
this. Mr Paterson submitted that given the reliability
of
the previous line of communication and the irrationality of the
denials, the inference to be drawn, that was consistent with
all the
proved facts, is that it is more probable than not that the
facsimiles were received by the second defendant.
[40]
Mr
Mbenenge’s submissions succinctly were that the case the
defendants had been called upon to meet was that the decision
taken
by the second defendant on 13 April 2011 was arbitrary and
unreasonable. The plaintiff averred in the particulars
of claim
that the second defendant was in receipt of the plaintiff’s
letter of reply dated 12 April 2011 when he made
his decision on
13 April 2011. It was Mr Mbenenge’s contention
that the onus was on the plaintiff to prove
that the second defendant
himself, and not merely the facsimile machine, had in fact received
and was in possession of the plaintiff’s
reply when he took the
decision in question. He submitted the plaintiff had failed to
discharge this onus, and the inferences
the plaintiff urged upon the
Court to draw could not, on application of the two cardinal
principles enunciated in
R
v Blom
,
[16]
be drawn and the plaintiff’s action had to fail.
[41]
I turn to consider the evidence with the
admissions made by the defendants and the submissions of counsel.
[42]
During her testimony Ms Katikati
denied receiving Annexure “D” on 4 April 2011 or any
other date, either by
e mail or facsimile. Annexure “D”
is the reply Shepstone & Wylie Attorneys sent to the letter
(Annexure
“C”) second defendant had addressed to the
plaintiff. The admission of the defendants that Annexure “D”
was received by facsimile machine with facsimile number 040 608 4249
and that the facsimile was received by the second defendant
contradicts the denial of Ms Katikati. Her denial is, in
addition, contradicted by her own actions since she sent an e mail
to Ms Lorimer acknowledging she received her e mail and was
forwarding it to the relevant official. In the circumstances,
her denial is rendered valueless.
[43]
Ms
Katikati also denied receiving Annexure “F1” or
Annexure “F2” as e mails. Although
the
defendants admit Ms Lorimer of Shepstone & Wylie Attorneys
transmitted Annexure “F1” on 12 April
2011 at
13h19 to facsimile machine with the number 040 608 4249 and
that she sent Annexure “F1” at 13h36
to Ms Katikati’s
e mail address they do not admit receipt of either and deny the
second defendant received Annexure
“F1”. The fact
that Ms Lorimer sent Annexure “F1” to the
e mail address:
N[...]@webmail.co.za
is also admitted.
[44]
Mr Mbenenge has recognised there are
contradictions in the testimony of Ms Katikati and particularly
her disavowal of authorship
of the acknowledgement (Exhibit ‘A’)
sent to Ms Lorimer on 4 April 2011. Mr Mbenenge submitted,
however,
that this did not mean that all of her evidence was to be
rejected.
[45]
The difficulty I have with the testimony of
Ms Katikati is that she was not willing to admit to any fact or
concede any proposition
that might reflect adversely on her diligence
in carrying out her tasks. She denied whatever concession
counsel sought to
obtain even if it obviously was in contradiction of
the admissions made by the defendants. She claimed her denial
was based
on her actual recollection of not receiving the e mail
and not as a result of an investigation she and staff members
conducted
a few months later that failed to locate the e mails.
[46]
If Ms Katikati indeed had an
independent memory of the receipt or the sending off of e mails
I would have expected
her to have remembered sending Exhibit ‘A’
which clearly originated from her computer. Even in the
face
of the admission by the defendants that Ms Lorimer
received, Exhibit ‘A’, Ms Katikati persisted in
denying
receipt of the e mail from Ms Lorimer to which
Exhibit “A” was Ms Katikati’s reply. Her
explanation that she did not recall receiving Ms Lorimer’s
e mail and therefore could not admit sending the e mail
acknowledging receipt is evasive and indicates a refusal to accept
the established fact that she had indeed sent this e mail
to
Ms Lorimer.
[47]
I am not persuaded that the lack of candour
by Ms Katikati on issues peripheral to the main question of
whether or not the
second defendant received Annexure “F1”
does not reflect adversely on her credibility as a witness as a
whole.
There was no reason for her to be evasive regarding such
issues. In my view, her denial of receipt of the e mails
to
which Annexure “F1” was attached cannot be
afforded any weight.
[48]
The testimony of Mr Zokwe was similarly
unsatisfactory. He, like Ms Katikati, would not concede
anything which he considered
brought into question his diligence in
carrying out the tasks for which he was responsible.
[49]
Mr Zokwe was adamant that all e mails,
facsimiles and correspondence, received by, or sent from, the office
of the second defendant
were recorded in his register before being
passed on to the relevant official. Yet, it became apparent
during cross examination
that this was not the case. Even
though the defendants admitted that Annexure “D” was
received by facsimile
machine with the number 040 608 4249
he denied receiving it and had no recollection or record of it or
Annexure “C”.
When confronted with the fact that
the second defendant had replied to Annexure “D”,
despite there not being any
record of it in his register, he was
constrained to concede that someone else must have collected the
facsimile and taken it directly
to the second defendant.
[50]
The explanation furnished by Mr Zokwe
for the absence of any record in his register of receipt of the
facsimile of Annexure
“F’ was by no means satisfactory.
All he could proffer was that he had no knowledge of the facsimile
and no one
else could have delivered it to the second defendant since
he alone collected the faxes received and took them to the relevant
officials. This obviously contradicted his previous explanation
for not having recorded receipt of Annexure “D”,
namely that someone may have collected it.
[51]
I am of the view that the evidence of
Mr Zokwe should be treated with circumspection. I am not
persuaded that his testimony
can be accorded the weight Mr Mbenenge
contended it should. The issue is not whether he was untruthful
or not.
His testimony, in my view, was of such a nature that
the probability that someone else could have attended to a facsimile
received
in the office of the second defendant without his
(Mr Zokwe’s) knowledge cannot be excluded.
[52]
It is against this background that I
consider what inferences may be drawn from the evidence as a whole
and the admissions made
by the second defendants.
[53]
In his letter dated 12 April 2011 addressed
to the plaintiff the second defendant stipulated that correspondence,
namely the plaintiff’s
reply, should be addressed to
‘
Adv. M Mannya,
Superintendent General of the Eastern Cape Department of Education,
at the following address Steve Vukile
Tshwete Complex, Zone 6
Zwelitsha, 5608, Private Bag X0032, Bhisho, Fax: 040 608 4249.
’
[54]
It is admitted that Ms Lorimer sent
Annexure “F1” on 12 April 2011 at 13h19 as a facsimile to
facsimile machine
with the number 040 608 4249, which is
the second defendant’s facsimile number, and the fax number to
which the
second defendant had stipulated the reply should be sent.
It is admitted further that the facsimile was received by the
particular
facsimile machine. It is similarly not in dispute
that Ms Lorimer also sent Annexure “F2” on
12 April
2011 at 13h44 as a facsimile to the second defendant’s
facsimile machine and that it was received. What the parties
are at variance about is whether or not the second defendant received
the facsimiles.
[55]
If the facsimile was received by the
facsimile machine stipulated by the second defendant does the
plaintiff nevertheless bear the
onus of proving that the facsimile
was also received by the second defendant personally?
In my view, the plaintiff
does not attract such an onus. The
second defendant had stated in his letter that the reply should be
addressed to him at
a particular address and provided a facsimile
machine number to which it should be sent. There was no
stipulation that the
plaintiff was also required to ensure that the
reply was received personally by the second defendant.
[56]
The manner in which facsimiles were dealt
with on receipt thereof in the office of the second defendant was not
within the knowledge
of the plaintiff. The internal procedures
staff members were required to apply are peculiarly within the second
defendant’s
knowledge and control. I cannot see on what
basis the plaintiff should be called upon to account for any failure
on the part
of staff members to adhere to internal office
procedures. In my view, it would be unjust to place an
obligation on the plaintiff
to explain what happened to the facsimile
after it was received by the specified facsimile machine.
Moreover, as the plaintiff
had complied with the second defendant’s
stipulated mode of communication, I do not consider the plaintiff was
compelled
to do anything more than ensure that his reply was received
by the second defendant via the means specified by him.
[57]
I am satisfied that the plaintiff has
proved that both Annexure “F1” and Annexure “F2”,
sent by the plaintiff
via facsimile transmission, were properly
delivered to the specified facsimile machine. The admissions,
taken with the evidence
as a whole, establish
prima
facie
that the office of the second
defendant received the plaintiff’s reply dated 12 April
2011.
[58]
I
turn to Mr Paterson’s submission that as the plaintiff had
made out a
prima
facie
case an unfavourable inference can be drawn from the failure of the
second defendant to testify and rebut the plaintiff’s
case.
[17]
As certain
facts were within the second defendant’s personal knowledge he
attracted an evidential duty of rebuttal.
It was thus necessary
for the second defendant to substantiate his denial of receipt of the
plaintiff’s reply or furnish
some other explanation.
Unlike a witness who may not have been available to the defendants,
the second defendant is a party
to this action and available to
testify. I find merit in this argument. I am in agreement
that in the absence of second
defendant testifying and rebutting the
prima
facie
case made out by the plaintiff, the
prima
facie
case is strengthened and becomes conclusive against the second
defendant and, by corollary, against the first defendant too.
[18]
[59]
On
an evaluation of all the evidence the most readily apparent and
acceptable inference is that the plaintiff’s letter dated
12 April 2011 (Annexure “F”) was received not only
by the office of the second defendant but by him.
[19]
When considered against the probabilities it is ‘the
more natural, or plausible, conclusion from amongst several
conceivable ones
’
.
[20]
[60]
Mr
Mbenenge requested an opportunity to file supplementary heads of
argument as to whether the plaintiff would be entitled to damages
in
the absence of evidence to sustain its allegations in paragraph 19
of the particulars of claim.
[21]
This was granted and Mr Paterson was afforded a similarly opportunity
of filing supplementary heads of argument.
[61]
It
is submitted briefly in the defendants’ supplementary heads of
argument that the plaintiff should have lead evidence in
support of
the allegations in paragraph 19 to sustain a delictual cause of
action. As the plaintiff had not done so,
the action had to
fail. In substantiation of this submission the defendants
referred to what the Court said in
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
.
[22]
[62]
In
the plaintiff’s supplementary heads of argument Mr Paterson
is emphatic in his criticism of the defendants’
submission and
disputes the relevance of the authority quoted by the defendants.
The central issue Mr Paterson raised
in his extensive
submissions in reply to those of the defendants is that a further
interdict and review of the second defendant’s
decision in
April or May 2011 would have been an infringement of the
constitutional rights of learners since this would have resulted
in
the supply of scholastic stationery to learners being delayed.
Since the rights of learners had to trump the potential
and
unqualified prejudice to the commercial interests of the plaintiff,
an application for a further interdict and the concomitant
review
would have been dismissed by the Court. The consideration of
public interest is well established in our law and by
April/May the
balance of convenience had swung in favour of the overwhelming
interest of the learners requiring the stationery.
Mr Paterson
quoted a series of cases in support of his submissions.
[23]
[63]
Mr
Paterson submitted that the
Oudekraal
case was not apposite as it did not relate to a claim in damages.
In the present instance the plaintiff’s action was
not for the
purpose of impugning the decision of the second defendant but to
claim damages because of the decision. The case
of
Millenium
Waste Management v Chairperson, Tender Board
[24]
was far more pertinent authority, and there the Court said, reviews
had to be brought timeously to avoid prejudice to the public
arising
from a successful review. Relevant to the decision as to
whether to grant a review was prejudice to third parties
and to the
public.
[64]
I am not persuaded that the argument
postulated by the defendants in their supplementary heads of argument
has merit. I, as
in the case of Mr Paterson, am unable to
discern the relevance of the passage in the
Oudekraal
matter that the defendants quoted in substantiation of their
argument. On the other hand, the plaintiff’s argument
is
persuasive and must prevail.
[65]
I accept that a further interdict at that
late stage in the school year for the purpose of reviewing the second
defendant’s
decision would have infringed the constitutional
rights of learners and been severely detrimental to their interests.
An
application for an interim interdict would probably have been
dismissed as the balance of convenience would have been in favour
of
the defendants and the public interest far outweighed any potential
economic loss the plaintiff might suffer.
[66]
In the circumstances I do not uphold the
submission by the defendants that for this reason alone the
plaintiff’s action falls
to be dismissed.
[67]
This brings me to the question of whether
the plaintiff’s possession of the letter dated 17 December
2010, addressed
by the Eastern Cape Provincial Treasury to the second
defendant, could ‘
be construed as
being tantamount to influencing the supply chain process
’
of the Department or ‘
an
abuse of the supply chain management process
’
by
the plaintiff, as claimed by the second defendant in his letter dated
4 April 2011.
[68]
Prior to the plaintiff receiving the letter
from Power Stationery, the second defendant had attested on oath, in
another matter,
that Paper Active (Pty) Ltd and African Paper
Products (Pty) Ltd had compromised the supply chain management
process by being in
possession of the letter which apparently was
sent by a member of the Department. As the process had already
been compromised
by the conduct of the two companies, any subsequent
possession of the letter by someone else could certainly not be
considered
as compromising the process, and even much less ‘
as
being tantamount to influencing the supply chain process
’
or ‘
an abuse of
the supply chain management process
’
.
In addition, the plaintiff received the letter from another bidder
and not through any conduct on the part of the plaintiff
involving a
member of the Department or any other individual in the supply chain
management process. I am unable to find support
for the second
defendant’s allegations against the plaintiff.
[69]
It follows, that there was no justification
for the second defendant drawing an adverse inference from the
plaintiff’s possession
of the letter of the Eastern Cape
Provincial Treasury dated 17 December 2010 that the plaintiff had
influenced and/or abused the
Department’s supply chain
management process. In my view, the inference that the second
defendant acted
mala fide
in doing so is inescapable.
[70]
Upon due consideration of all the evidence
I find the plaintiff has established, on a balance of probabilities,
that the second
defendant was in receipt of the plaintiff’s
letter dated 12 April 2011 when he made the decision on 13 April
2011 to exclude the plaintiff from the tender process.
[71]
I find, further, that the second defendant
acted arbitrarily and unreasonably in ignoring the plaintiff’s
reply and that the
decision was made in bad faith and with the
express intention of excluding the plaintiff from the tender
process. I find,
too, that the decision to exclude the
plaintiff from the tender process was wrongful.
[72]
The first defendant and the second
defendant are consequently liable to the plaintiff for such damages
as the plaintiff may prove.
[73]
In regard to costs, there is no reason not
to grant costs in favour of the plaintiff as the successful
litigant. The costs
of the action are to include the costs of
an application to compel the defendants to grant access to the
computers and the attendant
inspection thereof. Mr Mbenenge has
not advanced reasons in opposition to this and such an order will
ensue. The parties
have also agreed that the plaintiff is
entitled to an order for costs omitted from an order issued on a
previous occasion when
an exception was argued and the trial was
postponed.
[74]
In the result, there is an order in the
following terms:
1.
The first and second defendants are liable
to the plaintiff for such damages as the plaintiff may prove;
2.
The first and second defendants are liable
jointly and severally, the one paying the other to be absolved, for
the costs of the
action which includes the costs of an application to
compel, and inclusive further of the costs consequent upon the
employment
of two counsel;
3.
The first and second defendants, jointly
and severally, the one paying the other to be absolved,
are to pay the wasted
costs of suit of the postponed trial occasioned
by the Exception, as between party and party on the High Court scale,
as taxed
or agreed, such costs to include, but not be limited to:
2.1
the costs consequent upon the employment of two counsel;
2.2
the reasonable qualifying expenses, if any, of the expert witnesses
of the plaintiff, namely Garry Jevons
and Thys Blignaut, in respect
of whom the plaintiff filed Rule 36(9)(a) & (b) notices.
4.
Rose Latimer is declared a necessary witness.
pp Y EBRAHIM
9 September 2013
JUDGE OF THE HIGH
COURT, BHISHO
Judgment delivered on:
12 September 2013
Counsel
for the Applicant:
T
J M Paterson SC
with
Ms Watt
Attorneys
for the Applicant:
Gordon
McCune Attorney
King
Williams Town
Counsel
for the First Respondent:
S
M Mbenenge SC
with
Ms Da Silva
Attorneys
for the First Respondent:
State
Attorney
EAST
LONDON
Freedom
Stationery (Pty) Ltd v MEC Dept of Education, EC & Ano.CVJ
[1]
Annexure “A” of the papers
[2]
Annexure “B” of the papers
[3]
Annexure “C” of the papers
[4]
Annexure “D” of the papers
[5]
Annexure “D” of the papers
[6]
Annexure “E” of the papers
[7]
Annexure “F” of the papers
[8]
Annexure “F1” of the papers
[9]
Annexure “F2” of the papers
[10]
Annexure “G” of the papers
[11]
Annexure “H” of the papers
[12]
Annexure “I” of the papers
[13]
Paragraphs 20 to 22 of the particulars of claim at p 10 of the
papers
[14]
Exhibit ‘A’
supra
[15]
See
S A
Post Office v De Lacy and Another
2009 (5) SA 255
(SCA) at para [35]; See further
Macleod
v Rens
1997 (3) SA 1039
(E),
AA
Onderlinge Assuransie Assosiasie Bpk v De Beer
1982 (2) SA 603
(A),
Administrator
Transvaal and First Investments v Johannesburg City Council
1971 (1) SA 56
(AD) at 80A F,
Cooper
and Another NNO v Merchant Trade Finance Ltd
2000 (3) SA 1009
(SCA) and
Ocean
Accident and Guarantee Corporation Ltd v Koch
1963 (4) SA 147 (A)
[16]
1939 AD 188
at 202 to 203
[17]
Galante
v Dickinson
1950 (2) SA 460 (A)
[18]
S v
Boesak
[2000] ZASCA 112
;
2000 (3) SA 381
(SCA); See also
Union
Government Minister of Railways v Sykes
1913 AD at pp 173 and 174
[19]
See fn 16
supra;
See
further
Govan
v Skidmore
1952 (1) SA 732
(N) at 734A D and
AA
Onderlinge Assuransie Bpk v De Beer
1982 (2) SA 603
(A) at 614H 615B
[20]
See fn 15 –
S
A Post Office v De Lacy and Another
at para 35 and
Ocean
Accident and Guarantee Corporation Ltd v Koch
1963 (4) SA 147
(A) at 159B D quoted there
[21]
At page 10 of the papers:
‘
19.
Due to the urgency of the matter and the requirement not to further
negatively affect the constitutional rights
of learners, it was not
open to plaintiff to institute a further urgent interdict and review
to set aside the decision of the
second defendant to exclude
Plaintiff from the tender process.’
[22]
2004 (6) SA 222
(SCA) at para [26]
[23]
In particular:
Ferreira
v Lewin NO and Others
;
Vryenhoek
and Others v Powell NO
and Others
1995 (2) SA 813
(W) at 841F 842C and
Reitzer
Pharmaceuticals (Pty) Ltd v Registrar of Medicines
1998 (4) SA 660
(T) at 690E-691E with reference to the Canadian
cases cited there
[24]
2008 (2) SA 481
(SCA) at 490E and 491F