About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, East London Local Court
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, East London Local Court
>>
2013
>>
[2013] ZAECELLC 2
|
|
Continental Outdoor Media (Pty) Ltd v Buffalo Metropolitan Municipality and Another (EL 1258/12, ECD 2958/2012) [2013] ZAECELLC 2 (8 January 2013)
IN THE
HIGH COURT OF SOUTH AFRICA
(EAST
LONDON CIRCUIT LOCAL DIVISION)
CASE No.: EL 1258/12
ECD 2958/2012
In the
matter between:
CONTINENTAL
OUTDOOR MEDIA (PTY) LIMITED
.......................................
Applicant
and
BUFFALO
CITY METROPOLITAN MUNICIPALITY
..............................
1
st
Respondent
HLUMA
STATIONERS CC
....................................................................
2
nd
Respondent
___________________________________________________________________
JUDGMENT
Y
EBRAHIM ADJP:
This
application was brought on an urgent basis for the following relief:
‘
PART
A
that the rules relating to
forms and service as required in accordance with the provisions of
rule 6(12)(a) of the Uniform Rules
of Court be dispensed with and
that this matter be heard as one of urgency;
pending:
the final determination of the
review sought in Part B hereof; and
the applicant launching an
application within 10 days of the first respondent having delivered
the documentation referred to
in paragraphs (n), (o) and (p)
hereafter;
alternatively
within 10 days of the date of
hereof; inter alia to intervene in the application launched by the
second respondent against
the first respondent under case number EL
314/2012 ECD 814/2012 and to rescind the order granted by Dukada J
on 24 July 2012,
the first respondent is
interdicted and restrained from:
implementing contract number
89(e), described in the first respondent’s tender invitation
as “tender for the sole
rights for the supply, erection and
maintenance of advertising billboard within the area of
jurisdiction of the Buffalo City
Municipality”, purportedly
awarded to the second respondent (‘the tender”);
removing or interfering with
in any way the advertising billboards erected and owned by the
applicant and situated within the
area of jurisdiction of the
Buffalo City Municipality;
that the costs of this
application be costs in Part B hereof, save and in the event of any
of the respondents opposing the relief
sought;
further and/or alternatively
relief.
’
Part
B in the notice of motion details the relief the applicant intends
seeking in review proceedings it will institute, namely
to review
and set aside the decision of the first respondent to reinstate the
tender and award it to the second respondent.
The
first respondent delivered notice of intention to oppose the
application for urgent interdictory relief but did not file an
answering affidavit. The second respondent did not respond to
service of the application on it.
Mr
Nongugo, the attorney representing the first respondent, in the
absence of Mr Kubukeli who had been instructed to appear
for
the first respondent, applied from the bar for the urgent
application to be postponed to afford the first respondent time
to
file an answering affidavit. Mr Eyles, with Ms Dreyer, who appeared
for the applicant opposed the application for a postponement.
Mr Kubukeli, on arriving later, was afforded an opportunity to
make further submissions in support of the application for
a
postponement. Due to the limited and unpersuasive reasons advanced
on behalf of the first respondent, the application for a
postponement was refused with costs.
Mr
Eyles proceeded with the urgent application and submitted argument
in support thereof. Mr Kubukeli, on the other hand,
informed
the Court he was not presenting any argument in opposition. At the
conclusion of argument I granted an order substantially
in the form
prayed for in the notice of motion and indicated that reasons for my
decision would follow in due course. These are
the reasons.
I set
out briefly the factual circumstances giving rise to this
application. During March 2011 the first respondent invited
interested parties to tender for the sole rights for the supply,
erection and maintenance of advertising billboards within the
area
of jurisdiction of the Buffalo City Municipality. Tenders were to be
submitted before 12h00 on 3 May 2011. The first respondent
also
placed an advertisement in the Sunday Times Newspaper in relation to
the tender and indicated therein that tenders were
to be submitted
before 12h00 on 6 May 2011. The applicant, on the basis of this
information, submitted its tender on 6 May
2011 while the second
respondent submitted its tender on 5 May 2011. Both tenders
were, therefore, submitted after 3 May
2011, the closing date
specified in the official documents.
On 18
November 2011 the first respondent addressed a letter to the
applicant to inform it of ‘
the
withdrawal of this contract due to technical reasons
’
and requested the applicant to ‘
indicate
acknowledgement by signing below and returning the document
......’. The applicant duly complied with this request. The
first respondent did not elucidate on the technical reasons
for the
withdrawal of the contract but stated that the contract would be
re advertised.
There
were no further developments until the second respondent, in a
letter dated 24 August 2012, informed the applicant that:
‘
In
terms of the Court Order delivered on the 24
th
July
2012 in the EL Circuit Local Division. (
sic
)
In the matter between Hluma Stationers cc and Buffalo City
Metropolitan Municipality under case no. EL314/2012 ECD814/2012, it
was ordered that:
1. That the purported withdrawal
of the bid known as “Contract no. 89E: Sole Rights for the
Supply, Erection and Maintenance
of Billboards Advertising Signs
within the Area of Jurisdiction of the Buffalo City Municipality”
by the respondent on 18
November 2011, ............... be and is
hereby set aside.
2. That the respondent finalise
the said bid process.
3. That the bidders be informed
of the outcome of the bid process within one month of the granting of
this order.
Pursuant to the above order the
BAC re considered the bid and has resolved on the matter. This
therefore serves to inform you
that the bid your company submitted
has been unsuccessful.
Buffalo City Metropolitan
Municipality hereby wish you all the best for all future endeavours.
Yours faithfully
A FANI
CITY MANAGER
’
In a
letter to the applicant dated 6 September 2012 the first respondent
stated:
‘
TERMINATION
OF BILLBOARD ADVERTISING CONTRACT: BUFFALO CITY METROPOLITAN
MUNICIPALITY AND CONTINENTAL OUTDOOR MEDIA (PTY) LTD
My letter dated 12 November 2004
refers. (Copy attached for your reference)
You are hereby kindly advised
that a contract for billboard advertising within the Buffalo City
Metropolitan Municipality’s
area of jurisdiction for a period
of three years has recently been awarded to the successful bidder.
You are therefore requested to
remove all billboard advertising structures within the Buffalo City
area as advised in my previous
correspondence. Your contract was
terminated on 28 September 2004 as per Council resolution.
It is requested that you remove
your structures within 30 days from the date of this letter, failing
which Council will remove them
and you will be liable for the costs
of removal thereof.
Should you require any
additional information in this regard please do not hesitate to
contact Mr Mbewu Mbolekwa at the above telephone
number.
Yours faithfully
N. MABLI MAJENG
DIRECTOR OF PLANNING AND
ECONOMIC DEVELOPMENT
’
In
response to this communication the applicant’s attorneys
informed the first respondent in a letter dated 11 September
2012 that they had been instructed to apply to court for the review
of the decision to award the tender to the second respondent
and
required a written undertaking that the first respondent would not
implement the tender or remove the billboards, structures
and
advertising of their client, failing which application would be made
for an urgent interim interdict. The first respondent
did not reply
to this letter nor a further letter dated 28 September 2012 and
the applicant thereupon launched these proceedings.
The
first respondent has not contested the factual circumstances set out
in the applicant’s founding affidavit and elected
not to
present argument to counter the submissions Mr Eyles made on
behalf of the applicant. On the basis of the facts set
out in the
founding papers, which the submissions of Mr Eyles have underscored,
it is evident that the entire tender process
was flawed. As a result
of the inconsistency between the official tender documents and the
advertisement regarding the closing
date for submission of tenders,
the bids of both the applicant and second respondent were submitted
late. The decision of the
first respondent not to proceed with the
contract and to withdraw it was in the circumstances correct. Even
though the second
respondent stated at first that this was for
‘
technical reasons
’
and later that it had become ‘
apparent
to the [first] respondent that the tender evaluation process had
been compromised and for that reason it was decided
by the Bid
Evaluation Committee on 15 November 2011 that the tender be
withdrawn and the process started afresh
’, I do not
consider the differing explanations vitiate the second respondent’s
decision to withdraw the tender since
the process was clearly
flawed.
The
order Dukada J issued was in terms of an agreement between the first
and second respondents and had its genesis in an application
launched by the second respondent to compel the first respondent to
grant it access to certain documentation relating to the
withdrawal
of the tender. The order, however, bore no resemblance to the relief
sought, or the cause of action made out, by the
second respondent in
its application which was premised on the provisions of s 18(1)
of PAIA.
1
The
first respondent had withdrawn the tender process and informed
tenderers it would re advertise the invitation to tender.
It
was, therefore, not in a position to conclude an agreement with the
second respondent to reinstate the tender and, even less
so, to
award it to the second respondent. The first respondent was obliged
to comply with the procedures provided for in its
own supply chain
management policy in regard to the advertising and awarding of
tenders. In the absence thereof the tender of
the second respondent
was not an acceptable one
2
and the first respondent’s decision to agree to reinstate the
tender and award it to the second respondent was consequently
manifestly unlawful.
3
The
first respondent’s demand that the applicant remove all
billboard advertising structures within the Buffalo City area
within
30 days and the concomitant threat that it would do so itself if the
applicant did not comply lacked legal validity.
I
accordingly agree with the submission of Mr Eyles that the applicant
has established it has a
prima facie
right to the relief
sought, if not a clear right,
4
and has shown there is a well grounded apprehension of
irreparable harm if the relief is not granted. Should the applicant
have to remove the advertising structures it will be at considerable
cost and inconvenience and it will be precluded from earning
revenue. The applicant would also be in breach of its contractual
obligations to advertisers and run the risk of them terminating
their contract with the applicant. In addition, the applicant’s
good name and reputation would be tarnished, possibly irreparably.
I am
satisfied that the applicant has shown that the balance of
convenience favours the granting of an interim interdict. It is
apparent that the applicant will suffer prejudice should it not be
granted whereas the first respondent will not be prejudiced
thereby.
Even if there may be prejudice to the first respondent, and in my
view there can be none, it is responsible for this.
The second
respondent is duty bound to proceed with the tender process afresh,
which it conveyed to tenderers would be done,
and to ensure that the
process is conducted in accordance with its own supply chain
management policy governing the advertising
and awarding of tenders.
In circumventing this policy the second respondent acted
unlawfully.
5
I am
also satisfied that the applicant has shown that no other
satisfactory remedy is available to it. The applicant attempted
on
three occasions, through letters addressed to the first respondent,
to obtain reasons for the first respondent’s decision
to award
the tender including an undertaking not to implement it but these
did not elicit any response. I can only infer from
the silence of
the first respondent that it is unable to proffer a proper
explanation for its decision. The applicant contends
that it would
be very difficult to compute and quantify the reputational damages
it will suffer if its structures are removed
and third parties
cancel the contracts they concluded with it. At this stage, there is
nothing to gainsay this contention and
I therefore accept same.
In
the circumstances, I am satisfied that the applicant has made out a
proper case for the relief as prayed for in the notice
of motion.
In
regard to costs Mr Eyles submitted that the first respondent should
be liable for the applicant’s costs on an opposed
scale
including the costs of two counsel. Despite the first respondent not
filing an answering affidavit and electing not to
present argument
the first respondent persisted with its opposition to the
application for urgent interim interdictory relief
even after its
application for a postponement was refused. The first respondent
could have abandoned its opposition but chose
not to do so. I am
thus persuaded that costs be awarded as contended for by Mr Eyles.
In
the result, I confirm the order issued on 18 October 2012, which
reads as follows:
‘
1.
Pending
the
final determination of the review sought in Part B hereof, and
pursuant
to the applicant having launched an application on 17 October
2012 to intervene in the application launched by
the second
respondent against the first respondent under case number EL
314/2012 ECD 814/2012 to rescind the other granted
by Dukada J;
the first respondent is interdicted and restrained from:
implementing
contract number 89(e), described in the first respondent’s
tender invitation as “tender for the sole
rights for the
supply, erection and maintenance of advertising billboard within
the area of jurisdiction of the Buffalo City
Municipality”,
purportedly awarded to the second respondent (“the tender”);
removing
the advertising billboards erected and owned by the applicant and
situated within the area of jurisdiction of the Buffalo
City
Municipality;
2. that the first respondent pays the costs of this application on an
opposed scale including the costs of two counsel.’
_________________
JUDGE Y EBRAHIM 3 January 2013
ACTING
DEPUTY JUDGE PRESIDENT, BHISHO HIGH COURT
Heard on: 18 October 2012
Judgment delivered on: 8 January 2013
Counsel for the Applicant: A J Eyles with C J Dreyer
Attorneys for the Applicant: Bate Chubb & Dickson Inc
EAST LONDON
Counsel for the First Respondent: L Kubukeli
Attorneys for the First Respondent: Nongogo, Nuku Inc
EAST LONDON
Continental Outdoor Media (Pty)
Ltd v BCM & Ano.CVJ
1
Promotion
of Access to Information Act 2 of 2000
2
Transnet
Ltd v Rubenstein
2006 (1) SA 591
(SCA);
The Nelson Mandela
Metropolitan Municipality v Greyvenouw CC and Others
2004 (2) SA
81
(SECLD);
Chairperson, Standing Tender Committee & Others v
JFE Sapela Electronics (Pty) Ltd & Others
[2005] JOL 15567
(SCA)
3
Sanyathi
Civil Engineering and Construction (Pty) Ltd and Another v Ethekwini
Municipality and Others; Group Five Construction
(Pty) Ltd v
Ethekwini Municipality and Others
[2010] 1 All SA 200
(KZP)
4
Simon
v Air Operations of Europe AB
[1998] ZASCA 79
;
1999 (1) SA 217
(SCA) at 228G-H
5
Eriksen
Motors (Welkom) Ltd v Protea Motors, Warrenton
1973 (3) SA 685
(A)