Airports Company South Africa SOC Ltd v Imperial Group Ltd and Others (1306/18) [2020] ZASCA 2; [2020] 2 All SA 1 (SCA); 2020 (4) SA 17 (SCA) (31 January 2020)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2020
>>
[2020] ZASCA 2
|

|

Airports Company South Africa SOC Ltd v Imperial Group Ltd and Others (1306/18) [2020] ZASCA 2; [2020] 2 All SA 1 (SCA); 2020 (4) SA 17 (SCA) (31 January 2020)

Links to summary

THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 1306/18
In
the matter between:
AIRPORTS
COMPANY SOUTH AFRICA SOC LTD

Appellant
and
IMPERIAL
GROUP
LTD

First Respondent
WOODFORD
EXCLUSIVE RENTALS   CC

Second Respondent
AAD
CAR AND TRUCK RENTAL (PTY) LTD

Third Respondent
t/a
CABS CAR AND TRUCK HIRE
UNITRANS
AUTOMOTIVE (PTY) LTD

Fourth Respondent
trading
through its division HERTZ RENT A CAR
iDRIVE
CAR HIRE (PTY)
LTD

Fifth Respondent
t/a
VALUE CARE
HIRE
CMH
CAR HIRE (PTY)
LTD

Sixth Respondent
t/a
FIRST CAR RENTAL
McCARTHY
LTD trading through

Seventh Respondent
its
division BIDVEST CAR RENTAL
SPRINGS
CAR WHOLESALERS (PTY) LTD

Eighth Respondent
t/a
DOLLAR THRIFTY CAR RENTAL
BARLOWORLD
SOUTH AFRICA (PTY) LTD

Ninth Respondent
trading
through its division
RENT
A CAR t/a AVIS BUDGET
LMR
707 CAR RENTAL (PTY) LTD

Tenth Respondent
AFRIRENT
(PTY)
LTD

Eleventh Respondent
CAPITAL
CAR HIRE (PTY) LTD

Twelfth Respondent
Neutral
citation:
Airports Company South Africa SOC Ltd v Imperial
Group Ltd & Others
(1306/18)
[2020] ZASCA 02
(31 January
2020)
Coram:
Ponnan, Cachalia, Tshiqi, Wallis and Molemela JJA
Heard:
17 September 2019
Delivered:
31 January 2020
Summary:
Procurement by organ of state – whether s 217 of the
Constitution is applicable to Request for Bids (RFB) for the granting

of car rental concessions – Language used in s 217 is clear and
unambiguous – s 217 applicable when organ of state
contracts
for goods or services even where organ of state is not incurring an
expenditure – preferential procurement policy
reflected in RFB
bears no relation to requirements of legislation envisaged in s
217(3) – non-compliance rendering RFB irrational,
unlawful and
invalid.
ORDER
On
appeal from:
Gauteng Division of the High Court, Johannesburg
(Coppin J sitting as court of first instance):
The
appeal is dismissed with costs, including the costs occasioned by the
employment of two counsel.
JUDGMENT
Molemela
JA (Tshiqi JA concurring)
[1]
The appellant, Airports Company South Africa Soc Ltd (ACSA), is a
public company created in accordance with the provisions of
s 2 of
the Airports Company Act 44 of 1993 (ACSA Act). It is an organ of
state whose procurement processes involve the exercise
of public
power as envisaged in s 239 of the Constitution.
[1]
On 5 September 2017 ACSA published a Request for Bids (RFB) in terms
of which members of the public were invited to submit bids
for the
hiring of 71 car rental kiosks and parking bays at nine airports
operated by ACSA. The RFB indicated that each successful
applicant
would be granted car rental concessions for ten years. The first
respondent, Imperial Group Ltd (Imperial), a car rental
company,
submitted a bid in response to the RFB. Imperial operates the
Europcar and Tempest car-rental divisions as separate businesses.
[2]
In terms of clause 5 of the RFB, bids were to be evaluated in a
four-stage process. At stage I, bids were to be evaluated to
confirm
that all mandatory administrative requirements and all
pre-qualification requirements had been met. At stage II, the bids

were to be evaluated for functionality or the technical aspect of the
bids relating to the skills and experience of the bidders.
At stage
III, the bids were to be evaluated for price and preference.
Transformation imperatives would be taken into account at
stage IV.
[3]
The RFB stated that ACSA would have a briefing session at which the
RFB’s stipulations would be clarified to prospective
bidders.
It also invited prospective bidders to submit written requests for
clarification, should they be so inclined. Several
bidders sought
clarification on a variety of issues. On 13 November 2017, Imperial
wrote a letter to ACSA seeking clarification
regarding several
aspects of the RFB and, in the same letter, also expressed the view
that certain provisions of the RFB were unlawful.
Imperial submitted
its bid on 12 January 2018, with full reservation of its rights and
without waiver, novation or abandonment
of any of its contentions
regarding the validity of the RFB and its publication.
[4]
ACSA subsequently published a document on its website entitled
‘ACSA’s responses to bidders’ questions’.

Several revised versions of that document were subsequently published
in response to further queries raised by Imperial and other
bidders.
A further exchange of correspondence between Imperial and ACSA
culminated in Imperial referring certain disputes arising
from the
RFB for arbitration, which it subsequently withdrew. Nothing
regarding that arbitration needs to detain this appeal.
[5]
Having formed the view that the pre-qualification criteria and
several provisions of the RFB contravened s 217
[2]
of the Constitution and legislative prescripts related to
procurement, Imperial launched a two-pronged urgent application in
the
Gauteng Division of the High Court, Johannesburg.  Under
Part A of the application, Imperial sought an order compelling ACSA

to disclose the identities of all the entities that had submitted
bids in response to the RFB. Part A was essentially aimed at
joining
all entities having an interest in the matter as co-respondents in
the application. Part A having been granted by a differently

constituted court, Imperial successfully brought an application for
joinder, as a result of which all the bidders that had responded
to
the RFB became co-respondents with ACSA. This paved the way for the
hearing of Part B before Coppin J (the High Court).
[6]
In Part B of the application, Imperial sought an order reviewing and
setting aside ACSA’s decision to issue and publish
the RFB on
the basis that it was unlawful, unreasonable, inconsistent with the
constitution and invalid. Imperial principally relied
on the
Promotion of Access to Justice Act
[3]
(PAJA), alternatively on the principle of legality, for the relief it
was seeking. Only ACSA opposed the application.
[7]
ACSA submitted, inter alia, that Imperial’s application for
review was premature as it had not yet made a final decision

pertaining to the bids. It pointed out that since there was no final
decision pertaining to the bids, it still had the discretion
to amend
the RFB or even cancel the entire bid process at any time before an
award was made. In addition, it alleged that the decision
it had made
in relation to the RFB did not amount to an administrative action and
was thus not reviewable under PAJA. The High
Court held that the RFB
and the decision to publish it were unlawful, inconsistent with the
Constitution and the legislative framework
envisaged therein and
invalid. Furthermore, it held that ‘the RFB and the decision to
publish the RFB are reviewed and set
aside under the principle of
legality, alternatively in terms of s 6(2)
(a)
(i), and/or s
6(2)
(b)
, and/or s 6(2)
e)
(i), and or s 6(2)
(f)(
i),
and/or s 6(2)
(i)
of PAJA’ and also ordered ACSA to pay
the costs of the application.  Aggrieved by that order, ACSA
successfully applied
to the High Court for leave to appeal to this
court.
[8]
The main issues that arise for consideration by this court are
two-fold: first, the interpretation and applicability of s 217
of the
Constitution together with the relevant statutes falling under its
legislative scheme; and, second, the rationality of several

provisions of the RFB (impugned provisions) as well as the process
leading to the decision to publish the RFB culminating with
its
publication.  There are two ancillary issues, namely, whether
the terms of the RFB are vague and whether ACSA committed
an error of
law that impacts negatively on the RFB.
Impugned
provisions of the RFB
[9]
I turn now to delineate the impugned provisions of the RFB with a
view to assessing whether they are in compliance with legislative

prescripts. Clause 4.2.4 of the RFB set out certain criteria as
pre-qualification requirements. A failure to comply with these

pre-qualification criteria meant that the bidder in question would
fall at the first hurdle and would thus not be eligible to proceed
to
the second stage of the evaluation process. Clause 4.2.4.1 required
large entity
[4]
enterprises such as Imperial to meet certain minimum qualification
criteria. Under the heading of ‘criteria’, the RFB

prescribed the minimum percentages of designated persons that each
large entity was expected to have at the level of ownership,

enterprise, supplier development as well as the management control of
that entity.
[5]
In its
clarification statement relating to clause 4.2.4.1, ACSA advised
prospective bidders that each large entity was expected
to satisfy
all the specified minimum percentages applicable to the designated
persons listed in clause 4.2.4.1. The assessment
of the
prequalification criteria set out in clause 4.2.4.1 was to be done at
stage I of the bid evaluation process. Imperial contended
that the
inclusion of pre-qualification criteria imposing discriminatory
minimum ownership, enterprise and supplier development
as well as
management control requirements based on race and gender were
unlawful as they contravened s 217 of the Constitution,
the
Preferential Procurement Policy Framework Act 5 of 2000 (the PP Act)
and the regulations promulgated under that Act, as well
as the
Broad-Based Black Economic Empowerment Act 53 of 2003 (B-BBEE Act)
read with the Tourism Code.
[10]
Under the heading of ‘B-BBEE Provisions’, clause 4 of the
RFB dealt with price and preference (B-BBEE compliance).
It provided,
inter alia, that a maximum of 100 points would be allocated to a bid
on the basis that: 20 points would be allocated
for price in respect
of rental offered for a kiosk, 30 points for price in respect of
rental offered for the parking bays required
and 50 points for the
bidder’s B-BBEE scorecard. This essentially meant that at stage
III, bids would be scored a maximum
of 50 points for price and 50
points for B-BBEE compliance. Imperial contended that the provisions
of this clause contravened the
PP Act.
[11]
Clause 1.7 of the RFB provided that at stage IV, a bid might be
awarded to a bidder other than the highest scoring bidder ‘where

transformation imperatives allow’. This clause was read with
clause 5.6, which stated that ACSA’s transformation imperatives

for all the car-rental opportunities mentioned in the RFB were in
line with ACSA’s transformation policy which could be
downloaded from ACSA’s website.  Imperial contended that
clauses 1.7 read with clause 5.6 contravened the provisions
of the PP
Act.
[12]
For the sake of completeness, I interpose to mention,
en
passant
,
a clause of the RFB that is no longer a subject of Imperial’s
challenge in this court. Clause 5.6 of the RFB embodied what
the
parties referred to as ‘the single opportunity rule’.
After a detailed analysis of the contents of that clause,
the
parties’ submissions relating thereto and the applicable law,
the High Court found that ACSA’s single opportunity
rule was
rationally connected to the purposes that ACSA sought to achieve.
[6]
As Imperial did not persist with its attack on the single opportunity
rule in this court, clause 5.6 will therefore be excluded
from the
discussion relating to the impugned provisions of the RFB. Suffice it
to mention that the reasoning and finding of the
High Court on this
aspect are supported.
[13]
Before delving into an evaluation of the parties’ submissions
and the legal principles applicable to this matter, I must
mention
that at the hearing of this appeal, both counsel urged us that in the
event that we were inclined to find that the applicability
of s 217
was dispositive of the appeal, we should nevertheless deal with all
the grounds of review in our judgment. As authority
for that request
they relied on
S
v Jordan & others (Sex Workers Education and Advocacy Task Force
& others as amici curiae)
,
[7]
where it was held that where a provision or decision is attacked on
one ground that is considered decisive of the matter, the other

grounds raised in the matter should nevertheless be ventilated and
decided upon for the benefit of a court that may later have
to hear
an appeal arising from that matter. In the light of that injunction
of the Constitutional Court, that is indeed the approach
that will be
followed in this judgment.
Submissions
[14]
Imperial contended that the decision to issue and publish the RFB
amounted to the exercise of a public power  reviewable
either in
terms of PAJA or the principle of legality, that it was invalid
because it had no lawful basis, was irrational and contravened
the
provisions of s 217 of the Constitution and the statutes envisaged in
that section
[8]
.
Although ACSA acknowledged that PAJA applies to any tender award, it
maintained that PAJA was not applicable to the RFB. It relied
on
three main contentions for that submission. First, because  it
had not yet made a final award, with the result that the
mere
issuance of the RFB had no direct external legal effect and thus had
no adverse effects on Imperial’s rights.
[9]
ACSA thus contended that Imperial’s review application was
premature. Second, ACSA submitted that s 217 of the Constitution
does
not apply to the RFB because it (ACSA) was merely granting
concessions to bidders who were paying it for those concessions
and
not ‘procuring’ anything from the bidders or ‘contracting
for goods and services’.
[15]
Third, ACSA contended that s 217 of the Constitution is, in any
event, only applicable where an organ of state is incurring
an
expense. As the nature of the contract envisioned in the RFB would
not result in ACSA incurring an expense, so the argument
went, it did
not concern procurement for goods or services, thus making it
unnecessary for ACSA to comply with s 217 of the Constitution
or the
PP Act. ACSA contended that even if it were to be found that s 217
was applicable to the RFB, the PP Act and its regulations
would be
patently inapplicable in a situation where ACSA was not paying
providers for goods and services.
Was
the application for review brought prematurely?
[16]
The correct starting point is to consider whether the issuance and
publication of the RFB constitutes an administrative action
that can
be challenged on review under PAJA. The definition of ‘administrative
action’ in s 1 of PAJA has seven components:
(a) there must be
a decision of an administrative nature; (b) by an organ of state or a
natural or juristic person; (c) exercising
a public power  or
performing a public function;  (d) in terms of any legislation
or empowering provision; (e) if that
decision adversely affects the
rights of any person; (f) or has a direct, external legal effect; and
(g) does not fall under any
of the exclusions listed in that
section.
[10]
It is evident from the provisions of clause 5.1
[11]
and 5.3
[12]
of the RFB that a bidder who did not meet the prescribed
pre-qualification criteria would be automatically disqualified from
the
evaluation process at stage I. It is also evident that the RFB
did not allow ACSA to exercise any discretion in that regard. It
is
undisputed that in the light of the pre-qualification criteria set
out in those clauses of the RFB, the self-evident outcome
of stage I
of the evaluation process was that Imperial would be disqualified
from further evaluation.  Imperial’s assertion
that it
could not wait until after ACSA had made a final award because it
would, upon its disqualification from the bid, have to
vacate ACSA’s
premises, was not refuted.
[17]
As explained by this court in
Chairman
of the State Tender Board v Digital Voice Processing (Pty) Ltd;
Chairman of the State Tender Board v Sneller Digital (Pty)
Ltd &
others
:
[13]
‘
Generally
speaking, whether an administrative action is ripe for challenge
depends on its impact and not on whether the decision-maker
has
formalistically notified the affected party of the decision or even
on whether the decision is a preliminary one or the ultimate
decision
in a layered process . . . Ultimately, whether a decision is ripe for
challenge is a question of fact, not one of dogma.’
The
following dictum of the Constitutional Court in
AllPay
Consolidated Investment Holdings v Chief Executive Officer, South
African Social Security Agency
[14]
is equally apt:
‘
The
decision to exclude AllPay from the second, pricing stage certainly
affected its rights and legitimate expectations. Because
of its
exclusion we are not in a position to know what the outcome of the
pricing stage would have been; it is mere speculation. .
. .
[I]n
Grey’s Marine
it was stated, with reference to the phrase “adversely affect
the rights of any person” in section 1 of PAJA, that
what “was
probably intended [was] rather to convey that administrative action
is action
that has the capacity to
affect legal rights
.” Irregularities
in the process, which may also affect the fairness of the outcome,
certainly have the capacity to affect
legal rights.’ (footnotes
omitted)
[18]
Fortified by the authorities mentioned in the preceding paragraph, I
agree that the automatic disqualification of Imperial
at the first
hurdle of the evaluation process would have an external effect and
adversely affected Imperial’s legal rights.
Expecting Imperial
to wait until it was formally notified of the outcome before
resorting to judicial review in terms of PAJA would
indeed be
tantamount to putting form above substance. I am thus satisfied that,
on the facts of this case, the RFB constituted
an administrative
action that was ripe for a judicial challenge. Imperial was therefore
perfectly entitled to resort to judicial
review without having to
await the formal notification of the outcome.
Is
s 217 of the Constitution applicable to the RFB?
[19]
I consider next the issue of the applicability of s 217 of the
Constitution to the RFB. Section 217 provides that:
‘
(1) When an organ
of state in the national, provincial or local sphere of government,
or any other institution identified in national
legislation,
contracts for goods or services, it must do so in accordance with the
system which is fair, equitable, transparent,
competitive and
cost-effective.
(2)
Subsection (1) does not prevent the
organs of state or institutions referred to in that subsection from
implementing a procurement
policy providing for -
(a)
categories of preference in the allocation of contracts; and
(b)
the protection or advancement of persons, or categories of persons,
disadvantaged by unfair discrimination.
(3)
National legislation
must
prescribe a framework within which the policy referred to in
subsection (2)
must
be implemented.’ (Own emphasis).
[20]
In
Steenkamp
NO v Provincial Tender Board, Eastern Cape
,
[15]
the Constitutional Court recognised that s 217 of the Constitution,
which enjoins all spheres of government and organs of state
to
contract for goods or services in accordance with a system that is
fair, equitable, transparent, competitive and cost-effective,
is the
source of the powers and functions of a government tender board. That
constitutional imperative is echoed in a number of
statutes. While s
217(2) of the Constitution makes provision for organs of state to
implement procurement policies that prefer
‘categories of
preference’ in the allocation of contracts and provides for the
advancement of persons disadvantaged
by unfair discrimination, it is
clear that the freedom conferred on organs of state to implement
preferential procurement policies
is circumscribed by s 217(3). That
subsection provides that national legislation ‘must’
prescribe a framework within
which the preferential procurement
policies ‘must’ be implemented. The clear implication is
that organs of state may
implement preferential procurement policies
provided they do so within a framework prescribed by national
legislation. It is undisputed
that the PP Act and the B-BBEE Act
constitute the legislative scheme envisaged in s 217(3).
[21]
As stated already, ACSA contended that the provisions of s 217 of the
Constitution are not applicable to its RFB as it was
merely granting
concessions to bidders and not contracting for goods and services for
itself. It asserted that ‘procurement’
is confined to
where goods or services are procured for one’s own use. In oral
argument before us, it was submitted on behalf
of ACSA that s 217
applies only when an organ of state incurs an expenditure. It was
contended that there was nothing in the language
of s 217 that
indicated that the disposal and letting of state assets must be
subject to the same provisions as those concerning
procurement. In
support of those assertions, ACSA relied on the provisions of ss
38(1)
(a)(
iii),
51(1)
(a)
(iii)
and 76(4)
(c)
of the Public Finance Management Act 1 of 1999 (PFMA)
[16]
which require organs of state to have appropriate ‘procurement
and provisioning’ systems. ACSA contended that the usage
of
these two distinct words in that legislation served as proof that
there is a difference between procurement and provisioning.
If there
was no distinction between procurement and provisioning, so the
argument went, only the word ‘procurement’
would have
been employed in those sections.
[22]
The Constitution is the supreme law of South Africa and all other law
is subject to it.
[17]
Thus,
its interpretation cannot depend on the legislation enacted under it.
One can accordingly not invoke the PFMA as a guide
to the
interpretation of the Constitution. The language used in s 217 of the
Constitution is clear and unambiguous. It is now settled
that when
interpreting legislation, the point of departure is the provision
itself, read in context and having regard to the purpose
of the
provision.
[18]
The ordinary meaning of ‘procure’ is ‘obtain’.
[19]
Notably, Article 2(j) of the UNCITRAL Model Law on Public
Procurement
[20]
defines ‘procurement’ as ‘the acquisition of goods,
construction or services by a procuring entity’. It
does not
limit procurement to state expenditure. Section 217(1) spells out
what ‘procurement’ means, which is ‘to
contract for
goods or services’. Section 217 does not restrict the means by
which goods and services are acquired.
[23]
In any event, the comparison between procurement and provisioning
cannot avail ACSA, because the word ‘provisioning’
is
equally wide. It simply means ‘to obtain provisions’. It
thus applies equally to obtaining goods and services for
one’s
own use or for the use of others. Furthermore, the object of s 2 of
the PFMA is to ‘secure transparency, accountability,
and sound
management of the revenue, expenditure, assets and liabilities of the
institutions to which this Act applies.’
Obligations consistent
with these objects are therefore placed on the accounting authority
of ACSA. Various provisions of the PFMA
attest to the fact that the
acquisition of revenue by the state, as opposed to incurring
expenditure, is also envisaged as part
of the procurement
process.
[21]
ACSA cannot, therefore, rely on the provisions of the PFMA as support
for its contention that ‘procurement’ is confined
to
instances where the state is incurring an expenditure. ACSA’s
restrictive reading of s 217 simply finds no support in
the plain
language of that section. It is in any event difficult to think of a
reason why ‘procurement’ would relate
only to when
government is expending money.
[24]
The objects
[22]
of the ACSA Act are helpful in ascertaining whether the RFB amounted
to contracting for goods or services’. ACSA’s
listed
objects ‘the acquisition, establishment, development,
provision, maintenance, management, control or operation of
any
airport, any part of any airport or any facility or service at any
airport normally related to the functioning of an airport’.
It
is evident that the concessions envisaged in the RFB are aligned to
ACSA’s objects and key to ACSA’s operations.
That ACSA,
in inviting prospective bidders to bid for car-rental kiosks, parking
bays and to car-rental concessions for ten years,
considered itself
to be
contracting
for services
is evident from the following averment in its answering affidavit:
‘There is no dispute that ACSA had a commercial need to
ensure
that it leases its premises to successful bidders in order to ensure
revenue generation.’ That averment must be considered
in the
context of the following assertion made in the RFB:
‘
ACSA is focused on
creating and operating world-class airports measuring up to
international standards. . . ACSA’s purpose
is to create a
world-class car-rental environment providing the highest level of
service and convenience for car-rental users.
. . Aligned to the
company’s strategy of creating stakeholder value and increasing
revenue generation, the car rental strategy
is to continue to earn
and grow rental revenues by optimally locating car rental facilities
on ACSA airports. In line with this,
we would like to ensure that car
rental at the airports remain a dominant intermodal mode of transport
from air to road (and vice
versa), maintaining > 60% of car rental
transactions in South Africa.’
[25]
ACSA’s contention that it was effectively leasing its property
to successful bidders so that those bidders could engage
in a direct
relationship with members of the public fails to take into account
the assertions set out in the extracts above. Bearing
those
assertions and ACSA’s strategy in mind, as well as the
presentation ACSA made to prospective bidders as part of the

pre-tender roadshow, it cannot be gainsaid that the essence of the
transaction is that ACSA contracts with car-rental companies
to
complete and enhance the services available to its customers at its
airports in accordance with its own mandate as contemplated
in the
ACSA Act.
In this case the focus falls on
what constitutes services in s 217 of the Constitution. The
successful operation of a modern
airport is heavily dependent upon
passengers on arrival being able to secure transport to their
ultimate destination and the ability
to hire a car for onward travel
is essential. In order to ensure the availability of that service for
its passengers ACSA had to
contract with car hire firms to provide
it. The RFB proposes to do that by leasing facilities at airports to
car rental firms.
ACSA’s suggestion that the granting of
concessions to car-rental as envisaged in the RFB did not equate to
it contracting
for services with those bidders within the meaning of
s 217 of the Constitution thus amounts to the elevation of form over
substance.
[26]
Furthermore, the contention that the preposition ‘for’
after the word ‘contracts’ suggests that ‘procurement’

is confined to the procurement of goods or services for one’s
own use or benefit unnecessarily strains the ordinary meaning
to be
attached to the words used in s 217. The RFB clearly envisages that
the car-rental companies will be performing a service
on behalf of
ACSA, thereby ‘promoting the reasonable interests and needs’
of its users as contemplated in s 12(10)(
b
)
of the ACSA Act. ACSA’s stance that it is not, in terms of the
RFB, procuring a service as contemplated in s 217 of the
Constitution
is baseless. As I see it, what determines whether a transaction
amounts to procurement within the contemplation of
s 217 of the
Constitution is the true nature of the entire transaction (the real
substance) and not the form or label attached
thereto by the
parties.
[23]
For all the
reasons stated in the afore-going paragraphs, I find that the RFB was
subject to s 217 of the Constitution. The question
is whether it
complied with the requirements of that provision.
Is
the RFB unlawful, irrational and invalid?
[27]
Having reached that conclusion, I turn now to consider the lawfulness
of the RFB. There were two grounds of attack upon which
Imperial
contended that the decision to issue and publish the RFB was
irrational. First, Imperial submitted that the procedure
that
preceded the issuance and publication of the RFB was fatally flawed,
as there was no research prior to the publication of
the RFB. It
contended further that it was apparent from the record filed by ACSA
in terms of Rule 53 of the Uniform Rules of Court
that there were no
documents that evidenced that ACSA’s decision was underpinned
by consultation, advice, discussion, comment
or debate. In response,
ACSA contended that there was no need for it to embark on separate
research before taking the decision
to issue and publish the RFB, as
the research done during the course of the process that led to the
promulgation of the Tourism
Code also had to be taken into account.
It averred that the presentation made to prospective bidders during
its pre-tender roadshow
demonstrated that ACSA had done sufficient
research on the matter.
[28]
Second, Imperial submitted that there was no proper factual basis and
proper consideration of all the relevant facts showing
that the
prequalification criteria, scoring methods or transformation criteria
were necessary, feasible or achievable in the car-rental
market. It
also contended that there was no demonstration of the correct
application of the law, thus rendering the decision to
publish the
RFB irrational. ACSA contended that it was unquestionable that
seeking to transform any industry was a legitimate government

purpose. It maintained that the impugned provisions of the RFB were
rationally connected to ACSA’s envisioned purpose of

accomplishing transformation of the car-rental industry.
[29]
Another ground forming the basis of Imperial’s rationality
attack, relates to ACSA’s erroneous reliance on the
provisions
of Reg 16A of the Treasury Regulations issued pursuant to s 76 of the
PFMA and Treasury’s Implementation Guide
when clarifying the
RFB to prospective bidders.
[24]
It is clear from the provisions of Reg 16A.2.1(c) that Reg 16A, which
relates to the implementation of a supply chain management
system
that inter alia relates to the disposal and letting of state assets,
applies only to the public entities listed in Schedules
3A and 3C of
the PFMA. As ACSA is classified as a major public entity listed in
Schedule 2 of the PFMA, Reg 16A and the Implementation
Guide are not
applicable to the RFB. In its written heads of argument, ACSA
conceded that Reg 16A and the Implementation Guide
were not
applicable to the RFB but maintained that nothing turns on that
error.
Discussion
[30]
The principle of legality dictates that there must be a rational
connection between the decision taken and the purpose for
which the
decision was taken.
[25]
For a decision to be rational, there must be a rationally objective
basis justifying the impugned conduct.
[26]
In the ordinary meaning of the term, a decision is ‘rationally’
connected to the purpose for which it was taken if
it is connected to
that purpose by reason, as opposed to being arbitrary or
capricious.
[27]
As correctly observed by this court, a determination of whether a
decision is rationally connected to its purpose calls for a factual

enquiry blended with a measure of judgment.
[28]
In terms of s 6(2)
(f)
(ii)
of PAJA, an administrative action is reviewable if it is not
rationally connected,
inter
alia
to
the purpose for which it was taken, the purpose of the empowering
provision, the information before the functionary who took
the
decision or the reasons advanced  by the functionary who took
it. The means for achieving a purpose for which the power
was
conferred must include everything that is done in order to achieve
that purpose.
[29]
[31]
The Constitutional Court has recently explained that
process-rationality cannot be separated from substantive rationality;

rather, the key question for rationality is whether the means
(including the process of making a decision) are linked to the
purpose
or ends for which the decision was taken.
[30]
In
Democratic
Alliance v President of the Republic of South Africa & others
the
Constitutional Court stated as follows:
[31]
‘
The conclusion
that the process must also be rational in that it must be rationally
related to the achievement of the purpose for
which the power is
conferred, is inescapable and an inevitable consequence of the
understanding that rationality review is an evaluation
of the
relationship between means and ends. The means for achieving the
purpose for which the power was conferred must include
everything
that was done to achieve that purpose. Not only the decision employed
to achieve the purpose, but also everything done
in the process of
taking that decision, constitutes means towards the attainment of the
purpose for which the power was conferred.’
[32]
This court has also emphasised that in order to be rational, a
decision must be based on accurate findings of fact and a correct

application of the law.
[32]
A wrong or mistaken interpretation of a provision in a statute
constitutes an error of law that is reviewable
[33]
under s 6(2)
(d)
of
PAJA. It is also reviewable under the principle of legality.
[34]
Although ACSA averred that it did not consider itself bound by the
provisions of Reg 16A and the Implementation Guide, its erroneous

belief that those instruments were applicable featured prominently in
its answering affidavit setting out its reasons for the RFB.
The
inescapable inference is that it in fact considered them to be
binding. The RFB was, thus, from the outset, based on a wrong

premise. It is this wrong premise that led ACSA not to comply with s
217 of the Constitution and the legislation envisaged in it.
This
also explains the paucity of documentary evidence that would have
informed the content of the RFB. This ineluctably leads
me to
conclude that the process preceding the issuance of and the
subsequent publication of the RFB was materially tainted, thereby

rendering the entire process irrational.
[33]
ACSA acknowledged in its papers that, as an organ of state, it may
only perform those powers that are conferred on it by law.
That is a
correct encapsulation of the principle of legality. Furthermore, ACSA
conceded that the PP Act and the B-BBEE Act are
indeed the statutory
provisions envisaged in s 217(2) and (3) of the Constitution. ACSA,
however, contended that the PP Act is
inapplicable to the RFB and
further submitted that the B-BBEE Act did not preclude it from
setting its own qualification criteria.
It is now convenient to
consider the relevant provisions of those two statutes in order to
determine whether the PP Act is applicable
to the RFB, and if so,
whether it (the RFB) passes muster in relation to the procurement
provisions stipulated in those two statutes.
[34]
ACSA falls within the ambit of the B-BBEE Act because of the
definition of ‘public entity’ in that Act. It is worth

noting that prior to the amendment of the B-BBEE Act in 2013,
[35]
organs of state were merely required to take into account and apply
the Codes of Good Practice whenever it was ‘reasonably

possible’ to do so. The preamble attests to the fact that the
amendment was mainly aimed at promoting compliance by organs
of state
and public entities. In terms of s 9 of the B-BBEE Act, the Minister
of Trade and Industry (Minister) is empowered to
issue Codes of Good
Practice on black economic empowerment (B-BBEE codes) that may
include, inter alia, qualification criteria
for preferential purposes
for procurement and other economic activities. The provisions of s
9(2) read in conjunction with s 11(2)
of the B-BBEE Act emphasise the
need to ensure that the preparation and issuance of B-BBEE codes by
the Minister are informed by
a strategy  that provides for ‘an
integrated, co-ordinated and uniform approach to black economic
empowerment’
by all the stakeholders, including the organs of
state. It is undisputed that the B-BBEE code that is relevant to the
RFB is the
Amended Tourism B-BBEE Sector Code (Tourism Code)
published on 20 November 2015.
[36]
Its provisions are therefore binding on ACSA.
[35]
Section 9(6) provides that the Minister may permit organs of state or
public entities to specify qualification criteria for
procurement and
other economic activities which exceed those set in the B-BBEE codes.
That provision thus gives recourse to organs
of state that are not
content with the standards of empowerment and measurement set out in
the B-BBEE codes. Section 10(1), in
peremptory terms, requires every
organ of state and public entity to apply the relevant B-BBEE code
when determining, inter alia,
the qualification criteria for the
issuing of licences, concessions or other authorisations in respect
of economic activity and
in developing and implementing a
preferential procurement policy. Section 10(2)
(a)
permits the
Minister to consult with organs of state or public entities and to,
pursuant to that consultation, exempt that organ
of state from the
requirements of the B-BBEE code or allow deviation from it. It is
abundantly clear from all the provisions of
the B-BBEE Act canvassed
above that that Act is aimed at achieving uniformity of standards and
measurement.
[36]
The following are aspects that loudly attest to the binding nature of
the B-BBEE codes. First, s 10(3) enjoins enterprises
within a sector
for which a B-BBEE code has been issued, to measure entities for
compliance with the requirements of B-BBEE only
in accordance with
that code; second, there is an injunction to provide particular,
objectively verifiable facts or circumstances
before the Minister can
grant an exemption or deviation from the provisions of the applicable
B-BBEE code; third, deviation requires
the Minister’s express
consent, as such consent, once granted, must be published in the
Gazette.
[37]
[37]
Against the background of the mandatory provisions discussed above,
it is plain that it is not open to an organ of state, without
the
Minister’s consent, to design its own custom-made set of
qualification criteria that deviate from the provisions of the

applicable B-BBEE code.  It must be borne in mind that the
B-BBEE Act has created a platform for the solicitation of views
from
stakeholders and for these views to reach the Minister. Clause 6.3 of
the Sector Code records that ‘the participation
of all
stakeholders was encouraged and obtained in the form of public
hearings and written submissions from various constituencies’

which formed the basis of the Tourism Code. Given that stakeholders
are given an opportunity to give an input that informs the
issuance
and amendment of the B-BBEE codes, the B-BBEE Act’s demand for
all stakeholders to follow an integrated, co-ordinated
and uniform
approach is to be expected.
[38]
For each organ of state to be allowed to, without the Minister’s
input, design its own unique criteria that deviate from
those laid
down in the sector codes would render the uniformity sought to be
achieved by the strategies envisaged in the B-BBEE
Act, nugatory.
Moreover, that would allow organs of state to impermissibly arrogate
to themselves a power that has been given to
the Minister. It is
undisputed that ACSA at no stage obtained the consent of the Minister
to deviate from the provisions of the
Code. To argue that the B-BBEE
Act and the Tourism Code do not preclude ACSA from setting out the
qualification criteria laid down
in the impugned provisions of its
RFB is to seek to place form ahead of substance. In so far as ACSA,
by virtue of the qualification
criteria set out 4.2.1 of the RFB,
deviated from the Tourism Code without the Minister’s consent,
it purported to exercise
a power for which it was not authorised,
thereby offending s 6(2)
(a)
(i) of PAJA.
[39]
ACSA contended that since the generic B-BBEE code and the Tourism
Code applicable merely cover the mechanism of calculation
of an
entity’s B-BBEE status without specifying qualification or
pre-qualification criteria, ACSA could set qualification
criteria
within the context of the government’s policy imperatives. By
specifying the qualification criteria set forth in
the RFB, so it was
contended, ACSA had not deviated from the provisions any B-BBEE code.
Despite ACSA’s protestation to the
contrary, it is clear from
the text of clause 10.1.1-10.1.3 of the Tourism Code that those
provisions specify qualification criteria.
[40]
The biggest challenge for ACSA is that despite the fact that clause
4.2.4.1 of the RFB uses similar headings to the B-BBEE
priority
elements laid down in clause 10.1.1-10.1.3 of the Tourism Code,
giving an impression that it is aligned to the Tourism
Code, it
(clause 4.2.4.1 of the RFB) deviates from clause 10.1.1 by not
factoring in the variables relating to the subminimum requirements
of
the ownership element. Clause 10.1.1 makes a cross-reference to ‘Time
Based Graduation Factor provided in Annexe TSC100
(E)’. The
latter in turn prescribes a formula that must be applied for purposes
of allocating points for B-BBEE compliance.
The upshot is that not
all the information that relates to an entity’s B-BBEE status
is factored in at stage I of the evaluation
process. It is thus clear
that clause 4.2.4.1 of the RFB deviates materially from the
provisions of the B-BBEE Act.
[41]
The peremptory nature of the provisions of the B-BBEE Act has already
been stressed in the preceding paragraphs. It is clear
that deviation
from the B-BBEE codes is permissible only in the circumscribed
circumstances alluded to earlier in the judgment.
While it is
rational to set B-BBEE criteria for purposes of promoting
transformation, the choice of the specific criteria must
be informed
by reason. ACSA could have approached the Minister for purposes of
obtaining his consent for exemption, deviation or
the implementation
of criteria that exceed those enunciated in the Tourism Code. It
chose not to do so. Moreover, ACSA has not
proffered any plausible
explanation for setting criteria that are out of sync with those
already prescribed in the B-BBEE codes.
The ineluctable inference is
that it set the impugned qualification criteria arbitrarily. In so
far as ACSA, by contending that
it was not precluded from setting its
own criteria, might be obliquely suggesting that it is impliedly
authorised to impose its
own criteria, there is nothing that suggests
that it had implied authority to do so.
[42]
ACSA asserted in clause 4 of the RFB that the 50/50 price and B-BBEE
compliance ratio was in accordance with the Tourism Code.
This
assertion is misleading as the Tourism Code does not prescribe the
price and B-BBEE compliance ratio at all. For that matter,
even the
generic B-BBEE Code does not do so. The only instrument that
specifically deals with the allocation of points in respect
of price
and preference (price-preference ratio) is the PP Act. It is now
convenient to consider whether the RFB complies with
the provisions
of the PP Act. As stated before, Imperial contended that clause 4 of
the RFB contravenes the PP Act.  ACSA
steadfastly contended that
the PP Act is not applicable to the RFB. I must therefore determine
whether the PP Act is applicable
to the RFB.
[43]
ACSA again relied on the distinction between ‘procurement’
and ‘provisioning’ as the basis for contending
that the
PP Act is not applicable. There is no need to traverse that
proposition again as I have already found that it has no merit.

Another submission made in support of ACSA’s contention that
the PP Act is not applicable to the RFB is this. A key element
of the
scheme of the PP Act is, in terms of s 2 of that Act, for a tender to
be awarded to the bidder who has offered the lowest
price. This key
element is not capable of being applied to the RFB, given the nature
of the contract envisaged in the RFB. Accepting
the lowest price for
the kiosks and parking bays would not be cost-effective and would
simply be at odds with government purpose.
During the exchange with
the bench, counsel for ACSA said that the PP Act was a ‘straitjacket’
type of legislation,
and the fact that it failed to provide for
provisioning meant that the legislature had failed to enact
legislation that covered
the field of provisioning as contemplated in
the RFB. On this aspect, it bears mentioning that the papers make it
abundantly clear
that Imperial’s reliance on s 217 of the
Constitution was not on the basis that it regards the PP Act as
insufficient to
fulfil the obligations set out in s 217(2) of the
Constitution.
[38]
On the contrary, Imperial has invoked both the PP Act and the B-BBEE
Act as a basis for asserting its rights because it, correctly
in my
view, considers those statutes as completely fulfilling the
obligation set out in s 217(3) of the Constitution.
[44]
I turn now to consider the provisions of the PP Act. In doing so, a
rider that must be borne in mind is that s 3(2) of the
B-BBEE Act
makes it clear that in the event of any conflict between the B-BBEE
Act and any other law in force immediately prior
to the date of
commencement of the B-BBEE Act, the B-BBEE Act trumps the PP Act on
any matter that is specifically dealt with in
the B-BBEE Act. The PP
Act was enacted before the B-BBEE Act and will accordingly be trumped
by the B-BBEE Act if it conflicts
with the B-BBEE Act on any matter
that the B-BBEE Act caters for. It bears mentioning that, before us,
it was not argued that any
of the provisions of the PP Act are in
conflict with the B-BBEE Act.
[45]
The PP Act, like any other legislation, must be interpreted
purposively. The long title of that Act states that its enactment
was
intended to give effect to s 217(3) of the Constitution by providing
a framework for the implementation of the procurement
policy
contemplated in s 217(2) of the Constitution. A purposive
interpretation dictates that the PP Act be read in the context
of s
217 of the Constitution. The constitutional imperatives of a
cost-effective procurement must therefore be considered. It is
clear
that a transaction of the kind contemplated in the RFB seeks to
elicit bids for leases at the highest possible rental. This

interpretation is consistent with various provisions of the PFMA,
which enjoin the accounting authorities of organs of state to

exercise sound management of revenue and expenditure, to efficiently
manage, safeguard and maintain their assets and liabilities
and
generally to ensure that the organs of state receive value for money.
It stands to reason that when the provisions of s 2(1)
(c)
and
(f)
of the PP Act are applied to ACSA’s RFB, that
admonition must be kept in mind. The assertion that the application
of the
PP Act entails accepting the lowest price offered by the
bidders clearly fails to take all these considerations into account.
It
also fails to take into account that the RFB set out the lowest
price that ACSA would accept for the bids.
[46]
A reading of the recently amended Regulations made in terms of the PP
Act (PP Regulations), which came into force on 1 April
2017, makes it
pertinently clear that the amendment was aimed at aligning the PP Act
with the B-BBEE Act. Regulation 6(9) and 7(9)
of the PP Regulations
serve as safeguards and ensure that even where an organ of state is
not expending money but acquiring revenue,
it is not cornered into
accepting a price that is not market-related. They emphasise that
where the price offered by a tenderer
scoring the highest points is
not market-related, the organ of state may not award the contract to
that bidder and has the option
of negotiating a market-related price
with the bidder who scored the second highest points. If that fails,
then the organ of state
can negotiate with the bidder scoring the
third highest points. If no agreement can be reached with the latter,
then the organ
of state must cancel the tender. Against all the
safeguards mentioned above, including those provided by the PFMA,
ACSA’s
contention that applying the PP Act to the RFB would be
at odds with government purpose is devoid of any merit.
[47]
The qualification criteria pertaining to the scoring of points for
price and preference (B-BBEE compliance) are prescribed
in the PP
Act: there is an 80/20
[39]
ratio, with 80 points being for price and 20 points for preference
(B-BBEE compliance) and a 90/10
[40]
ratio, with 90 points being for price and 10 for preference. The
50/50 price and B-BBEE compliance ratio stipulated in the RFB

therefore contravenes regulations 3(b) and 4 of the PP Regulations
that govern pre-qualification criteria. These criteria are binding

save only to the extent that they may be in conflict with the
provisions of the B-BBEE Act. ACSA has not alleged that there is
such
a conflict. From my point of view, the B-BBEE Act and the PP Act read
with its regulations are complementary to each other.
The criteria
set out in the B-BBEE codes are to be taken into consideration under
the ‘preference’ heading in the price-preference
ratio
and as part of the objective criteria alluded to in s 2(1)
(f)
of the
PP Act.
[48]
Section 2(1)
(f)
of PP Act provides that a tender must be
awarded to a tenderer who scored the highest points unless objective
criteria justify
that it be awarded to another tenderer. Regulation
11(2) of the PP Act Regulations in turn provides that if an organ of
state intends
to apply objective criteria in terms of s 2(1)
(f)
of
the PP Act, it ‘
must’
stipulate the objective
criteria in the tender documents. The requirement for objective
criteria is in line with the transparency
imperative that is espoused
in s 217(1) of the Constitution.
[49]
Clause 1.7 of the RFB provides that ACSA may award the contract to a
bidder other than the highest scoring bidder when transformation

imperatives allow for this.
With
regard to what would constitute such transformation imperatives,
clause 5.6 of the RFB incorporates ACSA’s Transformation

Policy, and indicates that the transformation imperatives may be
downloaded. However, ACSA’s Transformation Policy gives
no
indication as to what transformation imperatives it will consider at
the final stage of the evaluation of the bids. In
Trencon
Construction (Pty) Limited v Industrial Development Corporation of
South Africa Limited & another
,
[41]
the Constitutional Court emphasised the mandatory nature of the
requirement of objective criteria or justifiable reasons for not

awarding the tender to the bidder who scored the highest points.
Since ACSA’s transformation policy sheds no light on the

imperatives it will consider at stage 4, clause 1.7 falls foul of the
provisions of s 2(1)
(f)
of the PP Act and is therefore unlawful.
[50]
ACSA contended that the vagueness of clause 1.7 in so far as it did
not set out the transformation imperatives was not fatal
to the
entire RFB and should not lead to its setting aside. It reasoned that
it could amend any terms that it considered vague,
or even cancel the
bid should the need arise, as it had reserved to itself the right to
do so. Its willingness to amend the impugned
criteria before the
finalisation of the bid process was sufficient to remedy any
vagueness, so the argument went. This contention
does not hold water,
as ACSA has not expressed an intention of amending any of the terms
of the RFB. Bidders are entitled to know
the applicable
transformation imperatives at the time of bidding. Without ACSA’s
undertaking to amend a specific provision
of the RFB, it is
impossible to determine the impact or extent of any prejudice that
bidders may suffer as a result of the envisaged
amendment. It must be
borne in mind that the RFB, by its nature, sets out the rules that
govern the bid process.
[42]
The
ex
post facto
changing of applicable rules simply goes against the tenets of the
principle of legality. In my view, the undue vagueness regarding

ACSA’s transformation imperatives rendered the procurement
process unlawful.
[43]
[51]
The submission that the tender could be withdrawn or cancelled before
the awarding of the bid is equally without merit, for
the regulations
under the PP Act stipulate circumscribed circumstances under which a
tender can be lawfully withdrawn or cancelled.
[44]
Crucially, the Constitutional Court in
Trencon
,
[45]
cautioned that the applicable regulations under the PP Act constrain
the discretion afforded to an organ of state by the terms
of the
tender document, with the result that a tender can only be cancelled
if the grounds specified in the regulations are extant.
ACSA has not
averred that any of the circumstances set out in the Regulations
under PP Act are applicable.
Conclusion
[52]
Against the background of all the legislative provisions discussed
above, it is clear that ACSA’s preferential procurement
policy
as reflected in its RFB bears no relation to the requirements of s
217 of the Constitution as well as the B-BBEE Act and
the PP Act,
being the legislation enacted to fulfil the obligation imposed by s
217(3) of the Constitution. ACSA has also failed
to show that all the
qualification criteria embodied in the impugned provisions of the RFB
are rationally connected to the purpose
for which they were intended.
As the impugned provisions of the RFB have materially tainted the
decision to issue and publish the
RFB, that decision is unlawful both
in terms of PAJA and the principle of legality. What remains is to
determine a just and equitable
remedy.
Remedy
[53]
The following dictum in
Bengwenyama
Minerals v Genorar Resources
[46]
is instructive:
‘
It would be
conducive to clarity, when making the choice of a just and equitable
remedy in terms of PAJA, to emphasize the fundamental
constitutional
importance of the principle of legality, which requires invalid
administrative action to be declared unlawful. This
would make it
clear that the discretionary choice of a further just and equitable
remedy follows upon that fundamental finding.
The discretionary
choice may not precede the finding of invalidity. The discipline of
this approach will enable courts to consider
whether relief which
does not give full effect to the finding of invalidity is justified
in the circumstances of the case before
it. Normally this would arise
in the context of third parties having altered their position on the
basis that the administrative
action was valid and would suffer
prejudice if the administrative action is set aside, but even then
the “desirability of
certainty” needs to be justified
against the fundamental importance of the principle of legality.’
[54]
It is trite that the remedy must be fair to those affected by it and
yet vindicate effectively the right violated. It must
be just and
equitable in the light of the facts, the implicated constitutional
principles, if any, and the controlling law.
[47]
Having considered
all
the circumstances of this case, I am satisfied that a remedy that is
just and equitable under the circumstances is to set aside
ACSA’s
decision to issue and publish the RFB.
The
High Court correctly found that the RFB is unlawful and invalid and
thus correctly set it aside. It follows that the appeal
has to fail.
With regard to costs, there is no justification for departing from
the principle that costs must follow the result.
Counsel did not
attempt to persuade us otherwise.
[55]
In the result, I would therefore make the following order:
The
appeal is dismissed with costs, including the costs occasioned by the
employment of two counsel.
___________________
M
B Molemela
Judge
of Appeal
Ponnan JA (Cachalia
and Wallis JJA concurring):
[56]
I agree with my colleague Molemela JA that this appeal against a
judgment of Coppin J, which reviewed, set aside and declared

unconstitutional the decision of the appellant, Airports Company
South Africa SOC Ltd (ACSA), to issue a request for bids (RFB)
for
the awarding of various car rental concessions at airports, must
fail. I feel persuaded to write separately because both my
approach
and the line that I take in endeavouring to resolve the appeal are,
in their emphasis, different to that preferred by
my learned
colleague.
[57]
The RFB, which was published by ACSA on 5 September 2017, established
car rental opportunities for the letting of over 70 kiosks
for a
period of ten years. Bids were invited for kiosks and parking bays at
airports nationally. According to the RFB, bids were
to be evaluated
in accordance with a four-staged approach. The first was the
pre-qualification stage, which comprised an initial
assessment of
each bid and an audit of all mandatory administrative requirements.
The second was the technical evaluation stage.
The third was the
stage at which price was assessed and categories of preference were
considered. And, the fourth stage implicated
transformation
imperatives.
[58]
The first respondent, Imperial Group Ltd (Imperial), is a wholly
owned subsidiary of Imperial Holdings Limited, a JSE listed
company.
Imperial’s car rental division has operated at ACSA’s
airports for more than 32 years. It owns and operates
two car rental
divisions: Europcar, a premium brand, operated pursuant to a
franchise agreement with a French company, Europcar
International and
Tempest, a low-cost brand. In terms of the RFB, Imperial had to bid
anew to retain its presence at the airports.
[59]
Imperial formed the view that, if implemented, the RFB would be
calamitous for its business. It accordingly approached the
high court
for relief in two parts. Under Part A, Imperial successfully obtained
an order compelling ACSA to disclose the identities
of all of the
bidders, who were joined as the second to twelfth respondents.
[48]
Under Part B, Imperial sought to review and set aside the RFB. Only
ACSA, who was cited as the first respondent, opposed the application.
[60]
In a judgment handed down in July 2018, the high court upheld the
application and set aside the RFB. It did so on five grounds.
[49]
The first was that the RFB is in breach of s 217 of the Constitution
and the laws enacted thereunder, namely the Preferential Procurement

Policy Framework Act 5 of 2000 (the PP Act) and the Preferential
Procurement Regulations (the PP Regulations)
[50]
(the Procurement Laws). The second was that the RFB is in breach of
the laws enacted to promote black economic empowerment (BEE),
namely
the Broad-Based Black Economic Empowerment Act 53 of 2003 (the BEE
Act) and the Tourism Sector Code of Good Practice published

thereunder (the Tourism Code) (the BEE Laws). The third was that the
RFB was produced by an arbitrary and irrational process, inasmuch
as
it was not underpinned by any research, consultation, advice or input
from interested parties. The fourth was that the RFB was
in part
incurably vague and devoid of any meaningful content. The fifth was
that ACSA had made the RFB under a material mistake
of law. The
appeal is with the leave of the high court.
[61]
Imperial challenged three categories of provisions in the RFB. First,
it attacked the pre-qualification criteria set out in
clause 4.2.4 of
the RFB.
[51]
It contended that
the criteria, which included that large entities such as it had to be
at least 30% black owned and at least 15%
black women owned, were
unlawful. In terms of the RFB, a bidder that did not meet all of the
pre-qualification criteria would immediately
be disqualified.
As Imperial was unable to meet these criteria, its bid had to be
disqualified. Second, Imperial attacked
the method of assessment of
the bids as set out in clause 4.2 of the RFB.
[52]
It contended that the method of assessment, in terms of which 50
points were awarded for price and 50 points for BEE status, was

unlawful. Third, Imperial attacked the transformation criteria
provisions of the RFB, which allowed ACSA to apply the single
opportunity
rule’ in awarding the tender as set out in clauses
1.7
[53]
and 5.6
[54]
of the RFB.
[62]
Imperial’s core attack is that the RFB is subject to and in
breach of s 217 of the Constitution. ACSA contends that s
217 of the
Constitution does not apply to the RFB, inasmuch as ACSA is granting
concessions to bidders who are paying for such
concessions.
Accordingly, ACSA is not engaging in ‘procurement’ or
‘contracting for goods and services’.
In any event, so
the contention goes, even if s 217 does apply to the RFB, then the
Procurement Laws are patently inapplicable.
They, in their terms, so
the contention proceeds, can have no application to a situation such
as the present. Once this is so,
according to ACSA, Imperial would
then be left with impermissibly challenging the RFB directly under
the Constitution.
[63]
The language of s 217(1) is clear.
[55]
It applies whenever an organ of state ‘contracts for goods or
services’. These words are plain and unqualified. They
make it
clear that the section applies whenever an organ of state contracts
for goods or services, whether for itself or for somebody
else.
ACSA’s restrictive reading thus finds no support in the plain
language of the section. ACSA suggests that the ambit
of the section
is limited by the reference to the word ‘procurement’ in
the heading and in s 217(2). The ordinary meaning
of ‘procure’
is ‘obtain’.
[56]
In any event, s 217(1) spells out what the section means when it
speaks of ‘procurement’, which is ‘to contract
for
goods or services’. It thus places the meaning of the word
beyond doubt. ACSA suggests that the RFB is not directed at

procurement but only at contracts for the lease of premises to car
rental companies, who provide their services directly to the
public.
But, that is to elevate form above substance. The substance of the
transaction is that ACSA contracts with car rental
companies to
provide a public service at its airports.
[57]
That is how ACSA itself described the transaction in the RFB.
[58]
[64]
The general rule under s 217 of the Constitution is that all public
procurement must be effected in accordance with a system
that is
fair, equitable, transparent, competitive and cost-effective. The
only exception to that general rule is that envisaged
by ss 217(2)
and (3). Section 217(2) allows organs of state to implement
preferential procurement policies, that is, policies that
provide for
categories of preference in the allocation of contracts and the
protection and advancement of people disadvantaged
by unfair
discrimination. Express provision to permit this needed to be
included in the Constitution in order for public procurement
to be an
instrument of transformation and to prevent that from being
stultified by appeals to the guarantee of equality and
non-discrimination
in s 9 of the Constitution. The freedom conferred
on organs of state to implement preferential procurement policies is
however
circumscribed by s 217(3), which states that national
legislation must prescribe a framework within which those
preferential procurement
policies must be implemented. The clear
implication therefore is that preferential procurement policies may
only be implemented
within a framework prescribed by national
legislation. It follows that the only escape for ACSA from the reach
of s 217(1) is if
it is able to bring itself within ss (2) and (3).
[65]
The PP Act is the national legislation envisaged by s 217(3). In
terms of s 2(1) of that Act, an organ of state must determine
and
implement its preferential procurement policy within the framework
prescribed by the section. Section 2(1) of the PP Act reads
in
relevant part as follows:
‘
An organ of state
must determine its preferential procurement policy and implement it
within the following framework:
(
a
)  A
preference point system must be followed;
(
b
) (i) for
contracts with a Rand value above a prescribed amount a maximum of 10
points may be allocated for specific goals as contemplated
in
paragraph (
d
) provided that the lowest acceptable tender
scores 90 points for price;
(ii)  for contracts
with a Rand value equal to or below a prescribed amount a maximum of
20 points may be allocated for specific
goals as contemplated in
paragraph (
d
) provided that the lowest acceptable tender
scores 80 points for price;
(
c
)  any
other acceptable tenders which are higher in price must score fewer
points, on a
pro rata
basis, calculated on their tender prices
in relation to the lowest acceptable tender, in accordance with a
prescribed formula;
(
d
)  the
specific goals may include—
(i)  contracting
with persons, or categories of persons, historically disadvantaged by
unfair discrimination on the basis of
race, gender or disability;
. . . .
(e)  any specific
goal for which a point may be awarded, must be clearly specified in
the invitation to submit a tenderer;
(f)  the contract
must be awarded to the tenderer who scores the highest points, unless
objective criteria in addition to those
contemplated in paragraphs
(
d
) and (
e
) justify the award to another tenderer . . .
.’
[66]
This provision gives effect to the restriction imposed by s 217(3) of
the Constitution that permits a preferential procurement
policy but
only within a framework prescribed by national legislation. In terms
of the framework, a preferential procurement policy
may only allocate
10 or 20 preference points out of a total of 100 to transformation
goals. It may not afford any greater weight
to transformation
objectives. Any goal for which a point may be awarded, must be
clearly specified in the invitation to tender.
It is so that s 2
clearly contemplates a conventional transaction by which an organ of
state purchases goods or services at the
lowest possible price. It
accordingly allocates higher scores to lower prices. A transaction of
the kind contemplated by the RFB,
on the other hand, seeks to elicit
bids for leases at the highest possible rental.
[67]
Does it mean, as ACSA argues, that such a transaction is not subject
to s 2? I think not. Section 2 must be read and understood
to be
mutatis
mutandis
applicable
to such a transaction. It accordingly allows a scoring system which
allocates more points for higher rentals. The principle
remains the
same. As a general rule the words of a statute must be given their
ordinary, grammatical meaning in the context in
which they appear,
unless to do so ‘would lead to absurdity so glaring that it
could never have been contemplated by the
legislature or where it
would lead to a result contrary to the intention of the legislature
as shown by the context or by such
other considerations as the Court
is justified in taking into account’ (
Venter
v R
).
[59]
In that event the court may depart from the ordinary effect of the
words to the extent necessary to remove the absurdity and give
effect
to the true intention of the legislature.
[68]
The principle laid down in
Venter’s
case
has
generally been used to ‘cut down’ the wide meaning of the
words employed by the Legislature. However, as it was
put by
Centlivres CJ in
Barkett
v SA Mutual Trust & Assurance Co Ltd
:
[60]
‘
But there may, it
seems, be exceptional cases where it is permissible for a court of
law to expand the literal meaning of words
used by the Legislature.
See
Halsbury
(2 ed., Vol. 31, para. 635), where reference is
made to the cases of
Hewett v
Hattersley
,
1912 (3) K.B.
35
and
Swan v
Pure Ice Co. Ltd
.,
1935 (2) K.B. 265.
’
In
Swan v
Pure Ice Co Ltd
,
[61]
Roper LJ observed:
‘
But they were, in
my judgment, amply justified by the authorities, which are summed up
in Maxwell on the Interpretation of Statutes,
7
th
ed., p.
217, as follows:— “They (i.e., the authorities) would
seem rather to establish that the judicial interpreter
may deal with
careless and inaccurate words and phrases in the same spirit as a
critic deals with an obscure or corrupt text, when
satisfied, on
solid grounds, from the context or history of the enactment, or from
the injustice, inconvenience, or absurdity of
the consequences to
which it would lead, that the language thus treated does not really
express the intention and that his amendment
probably does.”’
[69]
In
Summit
Industrial Corporation v Claimants Against the Fund Comprising the
Proceeds of the Sale of the mv ‘Jade Transporter’
,
[62]
Corbett JA pointed out that our courts have remarked in various
judgments that ‘it is dangerous to speculate on the intention

of the Legislature’ and ‘the Court should be cautious
about thus departing from the literal meaning of the words of
a
statute. . . . It should only do so where the contrary legislative
intent is clear and indubitable’. Here, I think, there
is such
intent. The legislation was enacted for the benefit of the national
fiscus. In respect of what I have described as the
conventional
transaction, an organ of state securing goods and services at the
lowest possible price would plainly operate for
the benefit of the
fiscus. Quite the contrary for a non-conventional transaction such as
the present. In this instance transacting
at the highest price would
undoubtedly be to the benefit of the fiscus. There is no sense in the
legislation only applying to the
conventional category of
transaction. It thus seems to me inconceivable that the legislature
could have intended such a result.
In that regard the legislation
does not say what was obviously intended to be said. I am thus
satisfied upon the construction of
the provision and upon authority,
as also the purpose of the legislation and the absurdity of the
consequences to which a literal
interpretation would lead, that the
language of s 2 does not really express the intention of the
Legislature. Construing the provision
literally would place
transactions of the kind encountered here beyond the reach of the
Constitution and the Procurement Laws.
That could plainly not have
been what the Legislature intended.
[70]
Indeed, it has been recognised that ‘[w]here the main object
and intention of a statute are clear from the title, preamble,
or
otherwise, it should not be reduced to a nullity by a literal
following of language, which may be due to want of skill or knowledge

on the part of a draftsman, unless such language is intractable’.
[63]
Halsbury’s
Laws of England
points out that:
‘
Although, as a
rule, it is not permissible to supply omissions in a statute, even
though they are evidently unintentional, it may
be possible in
certain circumstances:—
(1)
To treat as rectified obvious misprints;
(2)
To reject words or phrases as surplusage;
(3)
To supply omitted words or expressions;
(4)
To substitute one word for another;
(5)
To read negative words as affirmative, or affirmative as negative;
disjunctive as conjunctive, and
vice versa
;
(6)
To put upon words a sense possible but not usually attributable to
them;
(7)
To expand their literal meaning. (Footnotes omitted.)’
[64]
After
all, a court should presume that the legislature intended common
sense to be used in construing an enactment.
[65]
[71]
Interpretation is a far from academic exercise. ‘It is directed
to a particular statute, enacted at a particular time,
to address
(almost invariably) a particular problem or mischief’ (see
R
(Quintavalle) v Secretary of State for Health
).
[66]
The pendulum has swung towards purposive methods of construction.
[67]
In
Quintavalle
,
Lord Bingham of Cornhill stated the position as follows:
‘
Such
is the skill of parliamentary draftsmen that most statutory
enactments are expressed in language which is clear and unambiguous

and gives rise to no serious controversy. But these are not the
provisions which reach the courts, or at any rate the appellate

courts. Where parties expend substantial resources arguing about the
effect of a statutory provision it is usually because the
provision
is, or is said to be, capable of bearing two or more different
meanings, or to be of doubtful application to the particular
case
which has now arisen, perhaps because the statutory language is said
to be inapt to apply to it, sometimes because the situation
which has
arisen is one which the draftsman could not have foreseen and for
which he has accordingly made no express provision.
The
basic task of the court is to ascertain and give effect to the true
meaning of what Parliament has said in the enactment to
be construed.
But that is not to say that attention should be confined and a
literal interpretation given to the particular provisions
which give
rise to difficulty. Such an approach not only encourages immense
prolixity in drafting, since the draftsman will feel
obliged to
provide expressly for every contingency which may possibly arise. It
may also (under the banner of loyalty to the will
of Parliament) lead
to the frustration of that will, because undue concentration on the
minutiae of the enactment may lead the
court to neglect the purpose
which Parliament intended to achieve when it enacted the statute.
Every statute other than a pure
consolidating statute is, after all,
enacted to make some change, or address some problem, or remove some
blemish, or effect some
improvement in the national life. The court's
task, within the permissible bounds of interpretation, is to give
effect to Parliament's
purpose. So the controversial provisions
should be read in the context of the statute as a whole, and the
statute as a whole should
be read in the historical context of the
situation which led to its enactment.’
[68]
[72]
In
R v
Z
,
[69]
Lord Woolf observed: [t]he proper approach, in my view, has been
admirably expressed in terms upon which I could not improve by
Lord
Bingham of Cornhill in
.
. . Quintavalle.
As
Lord Carswell put it in that matter:
‘
If
the words of a statutory provision, when construed in a literalist
fashion, produce a meaning which is manifestly contrary to
the
intention which one may readily impute to Parliament, when having
regard to the historical context and the mischief, then it
is not
merely legitimate but desirable that they should be construed in the
light of the purpose of the legislature in enacting
the provision . .
. .’
[70]
When
this is done there can be no doubt that any other interpretation to
that postulated by me in this case would be absurd.
[73]
It follows that the high court’s core conclusion that the RFB
breached s 217 of the Constitution and the PP Act cannot
be faulted.
Given ACSA’s approach that s 217 of the Constitution and the PP
Act were simply inapplicable to the RFB, that
conclusion is
dispositive of the appeal against it. I thus deem it unnecessary to
consider the remaining grounds that were also
held to be decisive
against ACSA. In the result, like Molemela JA, I too would dismiss
the appeal with costs, including those occasioned
by the employment
of two counsel.
Order
[74]
The appeal is dismissed with costs, including the costs occasioned by
the employment of two counsel.
______________
V
M Ponnan
Judge
of Appeal
APPEARANCES:
For
the Appellant:

S Budlender SC (with M Musandiwa)
Instructed by:
Edward Nathan Sonnenbergs
Africa, Sandton
Honey Attorneys Inc.,
Bloemfontein
For
the First Respondent:
W Trengove SC
(with him D Watson)
Instructed by:
Tugendhaft Wapnick
Banchetti & Partners,
Sandown
McIntyre Van der
Post, Bloemfontein
[1]
See
Airports
Company South Africa v Big Five Duty Free (Pty) Limited & others
[2018] ZACC 33
;
2019 (5) SA 1
(CC) para 10.
[2]
Section 217 of the Constitution requires that all public procurement
be in accordance with a system which adheres to fairness,

equitability, transparency, competitiveness and cost-effectiveness,
while promoting groups that were previously disadvantaged
by unfair
discrimination.
[3]
Act 3 of 2000.
[4]
The RFB described a ‘large entity’ as an entity with a
turnover in excess of R45 million.
[5]
In clause 4.2.4.1 of the RFB, the requirements pertaining to
‘ownership’, ‘enterprise and supplier development’

and ‘management control (aligned to ownership)’ are
listed under the caption ‘transformation elements’.
The
criteria prescribed for the ownership component were as follows: ‘At
least 30% of exercisable voting rights in the
enterprise in the hand
of black people’ and ‘at least 15% of exercisable voting
rights in the enterprise in the hands
of black women’. The
prescribed criteria for the ‘Enterprise and Supplier
Development’ component were specified
as follows: ‘At
least 40% procurement spend (excluding procurement of motor
vehicles) from suppliers that are at least
51% black-owned’
and ‘at least 12% procurement spend (excluding procurement of
motor vehicles) from suppliers that
are at least 30% black women
owned’. The three criteria specified in relation to the
management control component are the
following: ‘At least 30%
Black executive management as a percentage of all executive
management within the car rental division
of the entity’;
‘[a]t least 15% black female executive management as a
percentage of all executive management within
the car rental
division of the entity’;’[a]t least 2% black employees
with disabilities as a percentage of all employees’.
[6]
The compelling considerations that led the High Court to that
conclusion are embodied in para 110-116 of the judgment of the
High
Court.
[7]
S
v Jordan & others (Sex Workers Education and Advocacy Task Force
& others as amici curiae)
[2002] ZACC 22
;
2002 (6) SA 642
;
2002 (11) BCLR 1117
(CC) para 21.
[8]
It is undisputed that the
Preferential Procurement Policy Framework
Act 5 of 2000
and the Regulations under it, as well as the
Broad-based Black Economic Empowerment Act (Act
53 of 2003) as
amended by the Black Economic Empowerment Act 46 of 2013 are
statutory provisions that form part of the legislative
scheme
envisaged in s 217(3) of the Constitution.
[9]
As authority for this contention, ACSA relied on this court’s
judgment in
Grey’s
Marine Hout Bay (Pty) Ltd v Minister of Public Works
[2005] ZASCA 43
;
2005
(6) SA 313
(SCA);
2005 3 All SA 33
para 23. Compare n 12 below.
[10]
Minister
of Defence and Military Veterans v Motau & others
[2014] ZACC 18
;
2014 (5) SA 69
(CC) para 33.
[11]
Clause 5.1 inter alia states: ‘The requirements of any given
stage must be complied with prior to progression to the next
stage.’
[12]
Clause 5.3 inter alia states: ‘Bidders must meet the
pre-qualification criteria as specified in clause 4.2.4.’
[13]
Chairman
of the State Tender Board v Digital Voice Processing (Pty) Ltd,
Chairman of the State Tender Board v Sneller Digital
(Pty) Ltd &
others
[2011]
ZASCA 202
;
2012 (2) SA 16
(SCA) para 20.
[14]
AllPay
Consolidated Investment Holdings v Chief Executive Officer, South
African Social Security Agency
[2013]
ZACC 12
;
2014 (1) SA 604
(CC); (
AllPay
)
at para 60.
[15]
Steenkamp
NO v Provincial Tender Board of the Eastern Cape
[2006] ZACC 16
;
2007 (3) SA 121
(CC) para 33.
[16]
ACSA is one of the major public entities listed in Schedule 2 of the
PFMA and to which the PFMA is applicable.
[17]
Section 2 of the Constitution provides: ‘This Constitution is
the supreme law of the Republic, law or conduct inconsistent
with it
is invalid, and the obligations imposed by it must be fulfilled.’
[18]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) para 18.
[19]
South African Concise Oxford dictionary ‘obtain’;
Webster’s dictionary: encyclopaedic edition ‘to obtain’

Black’s Law dictionary 7 ed ‘the act of getting or
obtaining something’.
[20]
United Nations document A/66/17, annex I, which was adopted by the
United Nations Commission on International Trade Law on 1
July 2011.
[21]
See ss 38 and 51 of the PFMA.
[22]
Section 4 of the ACSA Act.
[23]
Compare
Helmut
Müller (
case
C-451/08
Helmut
Müller v Bundesanstalt für Immobilienaufgaben,
[2010]
3 C.M.L.R. 18)
;
Faraday
Development Ltd v West Berkshire Council
([2018]
EWCA Civ 2532.
[24]
ACSA had maintained that Reg 16A distinguished between the
acquisition of goods and services on the one hand and the disposal

and letting of state assets on the other.
[25]
Democratic
Alliance v President of the Republic of South Africa & others
[2012]
ZACC 24
;
2013 (1) SA 248
(CC) para 32.
[26]
Merafong
Demarcation Forum V President of the Republic of South Africa &
others
[2008] ZACC 10
;
2008 (5) SA 171
(CC) para 63.
[27]
Calibre
Clinic Consultants (Pty) Ltd & another v National Bargaining
Council for the Road Freight Industry & another
[2010]
ZASCA 94
;
2010 (5) SA 457
(SCA) para 58.
[28]
Minister
of Home Affairs & others v Scalabrini Centre, Cape Town &
others
[2013] ZASCA 134
;
[2013] 4 All SA 571
(SCA) para 66.
[29]
Ibid paras 36 and 37.
[30]
National
Energy Regulator of South Africa & another v PG Group &
others Pty Ltd
[2019]
ZACC 28
;
2019 (10) BCLR 1185
(CC) para 48.
[31]
Democratic
Alliance v President of the Republic of South Africa & others
[2012]
ZACC 24
;
2013 (1) SA 248
(CC) para 36.
[32]
Chairman
of the State Tender Board v Digital Voice Processing (Pty) Ltd;
Chairman of the State Tender Board v Sneller Digital
(Pty) Ltd &
others
[2011] ZASCA 202
;
2012 (2) SA 16
(SCA) para 40.
[33]
Ahmed
& others v Minister of Home Affairs & another
[2018] ZACC 39
;
2019 (1) SA 1
(CC) para 44.
[34]
See in this regard
Premier
of the Western Cape & others v Overberg District Municipality &
others
[2011]
ZASCA 23
;
2011 (4) SA 441
(SCA) paras 37-38, where this Court held
that the provincial executive had misconstrued the powers conferred
on it under s 139(4)
of the Constitution, which offended against the
principle of legality.
[35]
The
Broad-Based Black Economic Empowerment Act 53 of 2003
was
amended by the Broad-Based Black Empowerment Act Amendment Act (Act
46 of 2013).
[36]
Amended Tourism Code of Good Practice, GN 1149, 20 November 2015.
Clause 9.3.5 includes car-rental companies in the list of
travel-related services to which the Tourism Code applies.
[37]
Section 10(2)
(
a
)
.
[38]
Minister
of Health & another v New Clicks South Africa (Pty) Ltd &
others
[2005]
ZACC 14
;
2006 (2) SA 311
(CC).
My
Vote Counts NPC v Speaker of the National Assembly & others
[2015] ZACC 31; 2016 (1) SA 132 (CC).
[39]
Reg 3(b) of the PP Regulations. The 80/20 preference point system is
applicable for procurement of goods and services with a
rand value
of between R30 000 and R50 million.
[40]
Reg 4 of the PP Regulations. The 90/10 preference point system is
applicable for procurement of goods and services with a rand
value
exceeding R50 million.
[41]
Trencon
Construction (Pty) Limited v Industrial Development Corporation of
South Africa Limited & another
[2015] ZACC 22
;
2015 (5) SA 245
(CC)
(Trencon)
para 65.
[42]
See n 41 above, para 4.
[43]
Ibid para 88.
[44]
See Regulation 13 of the PP Regulations.
[45]
See n 39 above, para 68.
[46]
Bengwenyama
Minerals v Genorar Resources
[2010]
ZACC 26
;
2011 (4) SA 113
(CC)
para 84.
[47]
Steenkamp
NO v Provincial Tender Board, Eastern Cape
[2006] ZACC 16
; 2007 (3) SA (CC) 121 paras 29-33.
[48]
The second to twelfth respondents respectively are:
Woodford
Exclusive Rentals Close Corporation, AAD Car and Truck Rental (Pty)
Ltd t/a Cabs Car and Truck Hire, Unitrans Automotive
(Pty) Ltd
trading through its division Hertz Rent a Car, iDrive Car Hire (Pty)
Ltd t/a Value Care Hire, CMH Car Hire (Pty) Ltd
t/a First Car
Rental, McCarthy Ltd trading through its division Bidvest Car
Rental, Springs Car Wholesalers (Pty) Ltd t/a Dollar
Thrifty Car
Rental, Barloworld South Africa (Pty) Ltd trading through its
division Rent a Car t/a Avis Budget, LMR 707 Car Rental
(Pty) Ltd,
Afrirent (Pty) Ltd and Capital Car Hire (Pty) Ltd.
[49]
The high court approached the matter thus:
‘
Counsel
for Imperial contended that even if certain of the issues, including
the issue of the applicability of section 217 of
the Constitution
were decisive of the appeal, this court should, nevertheless, deal
with the other challenges. In support of
that approach reference was
made to what was held in, inter alia,
S
v
Jordan
and Others
. In essence, it has been held there that where a
provision, or decision, is attacked on multiple grounds and one of
the grounds
is considered decisive of the matter, the other grounds
should, nevertheless, be dealt with to facilitate the proper hearing

of an appeal to a higher court, if any. I propose to follow that
approach and shall deal with the issues in turn after briefly

sketching the background to Imperial’s challenges.’
See
S v Jordan & others (Sex Workers Education and Advocacy Task
Force and others as amici curiae)
[2002] ZACC 22
;
2002 (6) SA
642
(CC) para 21.
[50]
Preferential Procurement Regulations, 2017, gazetted under the
Preferential Procurement Policy Framework Act 5 of 2000
on 20
January 2017, effective from 1 April 2017. See GN R32 in
GG
40553
of 20-01-2017.
[51]
Clause 4.2.4 provides:
‘
The
following pre-qualification criteria will be included as part of
this bid:
4.2.4.1
Large Entities
Transformation
Element
Criteria
Ownership
At least 30% of
exercisable voting rights in the enterprise in the hands of black
people
At least 15% of
exercisable voting rights in the enterprise in the hands of black
women
Enterprise and
Supplier Development
(car rental sector
purchases vehicles for foreign owned OEM’s, therefore car
purchases themselves is excluded from
calculation)
At least 40%
procurement spend (excluding procurement of motor vehicles) from
suppliers that are at least 51% black owned
At least 12%
procurement spend (excluding procurement of motor vehicles) from
suppliers that are at least 30% black women
owned
Management Control
(aligned to
ownership)
At least 30% Black
executive management as a percentage of all executive management
within the car rental division of the
entity
At least 15% black
female executive management as a percentage of all executive
management within the car rental division
of the entity
At least 2% black
employees with disabilities as a percentage of all employees
‘
[52]
In terms of Clause 4.2:
‘
Car
rental companies fall within the travel and related services within
the Amended Tourism B-BBEE Sector Code, which came into
effect on 20
November 2015.
The
intention is to allocate the 50 points for B-BBEE in accordance with
the Amended Tourism B-BBEE Sector Code as detailed below.
Bids will
be scored on a 50/50 basis with 50 points being allocated to Price
and the remaining 50 points awarded for B-BBBEE.’
[53]
Clause 1.7, headed ‘Disclaimers’, provides as follows:
‘
It
must be noted that ACSA may:
a)
Award the whole or a part of this bid;
b)
Split the award of this bid;
c)
Negotiate with all or some of the shortlisted Bidders;
d)
Award the bid to a Bidder other than the highest scoring Bidder
where transformation imperatives (Point 5.6) allow;
e)
Cancel this bid;
f)
ACSA does not take any responsibility for expenses or loss, which
may be incurred by any Bidder in preparation
of this bid.’
[54]
Clause 5.6 provides:
‘
Transformation
Imperatives
5.6.1
Amongst other criteria set out in this bid document, ACSA has set
out Transformation imperatives for all the Car Rental
Opportunities
in this bid in line with ACSA’s Transformation Policy. ACSA’s
Transformation imperatives can be downloaded
at www.airports.co.za.
5.6.2
Bidders must first meet the Mandatory Administrative Requirements
and Prequalification criteria (Stage 1), minimum
Functionality
threshold (Stage 2) and have been scored for the 50/50 Preferential
points for Price and B-BBEE (Stage 3).
5.6.3
If a bidder has more than 1 kiosk opportunity post bid award at an
airport, the bid will be awarded to the next highest
qualifying
bidder;
5.6.4
Should it be that there are no other qualifying bidders who have 1
kiosk opportunity at the airport, that opportunity
may be awarded to
bidders who have 1 or more opportunities.
5.6.5
Should there be unmatched kiosks and qualifying bidders, ACSA
reserves the right to negotiate with such bidders on
agreed terms
and conditions.’
[55]
Section 217 is set out in paragraph 19 of Molemela JA’s
judgment.
[56]
A Stevenson & M Waite (eds)
Concise
Oxford English Dictionary
12
ed (2011) at 1144.  According to P B Gove (ed)
Webster's
Third New International Dictionary
at
1809 ‘procure’ means ‘to obtain’. And, in B
A Garner (ed)
Black's
Law Dictionary
9 ed at 1327 it is defined as ‘the act of getting or obtaining
something’.
[57]
In
Airports
Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive
Books
[2015] ZAGPJHC 154;
2016 (1) SA 473
(GJ), ACSA sought to escape its
contract with a bookstore at one of its airports. Contrary to its
stance in this matter, it there
contended that the contract was
subject to 217 of the Constitution. The high court held (para 63):
‘
Whilst
the letting of the shop involves the disposal by way of letting of a
state asset, the effect of the contract is to provide
a service for
those members of the public making use of the departure area at the
airport. Absent a private bookstore operator
like Exclusive Books,
ACSA would be expected to provide a similar service itself. In my
view that falls within the concept of
“contracting for goods
and services”, particularly on the purposive approach that I
am bound to adopt in the interpretation
of the Constitution.’
In
Airports Company South Africa Ltd v Airport Bookshops (Pty)
Ltd t/a Exclusive Books
[2016] ZASCA 129
;
2017 (3) SA 128
(SCA),
this court upheld the high court’s judgment. It noted (para
12) that ACSA contended that its lease with the bookshop
was subject
to 217 of the Constitution but did not find it necessary to decide
whether it was so.
[58]
This is how ACSA described the transaction in the RFB:
‘
3.1
. . . ACSA is focused on creating and operating world-class airports
measuring up to international standards. This is
evidenced by ACSA’s
participation in selected airport management . . .
3.2
ACSA’s purpose is to create a world-class car rental
environment providing the highest level of service and convenience

for car rental users.
.
. . .
3.7
Aligned to the company’s strategy of creating stakeholder
value and increasing revenue generation, the car rental
strategy is
to continue to earn and grow car rental revenues by optimally
locating car rental facilities on ACSA airports. In
line with this,
we would like to ensure the car rental at the airports remain a
dominant intermodal mode of transport from air
to road (and vice
versa), maintaining ˃60% of car rental transactions in SA.
Attract
Best Operators and Brands. Design world class facilities. Structure
optimum win-win contracts.’
[59]
Venter
v Rex
1907 TS 910
at 915.
[60]
Barkett
v SA Mutual Trust & Assurance Co
Ltd
1951 (2) SA 353
(A) at 362H-363D.
[61]
Swan v
Pure
Ice Co Ltd
1935 (2) KB 265
at 276.
[62]
Summit
Industrial Corporation v Claimants Against the Fund Comprising the
Proceeds of the Sale of the mv ‘Jade Transporter’
1987
(2) SA 583
(A) at 596I-597B.
[63]
Halsbury’s
Laws of England
2 ed., (1938) Vol. 31, para 635.
[64]
Halsbury’s
Laws of England
2 ed., (1938) Vol. 31, para 635.
[65]
Halsbury’s
Laws of England
5 ed., (2018) Vol. 96, para 709.
[66]
R
(Quintavalle) v Secretary of State for Health
[2003]
2 AC 687
para 17.
[67]
Ibid para 21.
[68]
Ibid paras 7 and 8.
[69]
R v Z
[2005]
UKHL 35
para 36
.
[70]
Ibid para 49.