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[2012] ZAGPPHC 314
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Goodhope Textile Corporation (Pty) Ltd Trading as Da Gama Textiles v Government of the Republic of South Africa and Others (63108/2012) [2012] ZAGPPHC 314 (27 November 2012)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
DATE:27/11/2012
CASE
NO: 63108/2012
In
the matter between:
THE
GOODHOPE TEXTILE CORPORATION
(PTY)
LTD TRADING AS DA GAMA
TEXTILES
...............................................
APPLICANT
And
THE
GOVERNMENT OF THE REPUBLIC OF
SOUTH
AFRICA
...................................................................................................
1st
RESPONDENT
SEARDEL
INVESTMENT CORPORATION (PTY) LTD
................................
2nd
RESPONDENT
SEARDEL
GROUP TRADING (PTY)
LTD
.......................................................
3rd
RESPONDENT
EYE
WAY TRADING (PTY)
LTD
.........................................................................
4
th
RESPONDENT
JUDGMENT
MAKGOBA.
J
[1]
The applicant approached this court on urgent basis to interdict the
first and fourth respondents from giving effect to the
further
implementation of a tender contract awarded to the fourth respondent
in respect of tender contract RT60/2012T, pending
the finalisation of
the review application brought by it in case number 48769/2012
wherein an order is sought to review and set
aside the award of the
tender to the fourth respondent.
The
tender concerns the supply of textile products involving the use of
poly-cotton yarn in the weaving of material known as greige.
[2]
The application is opposed by all the four respondents.
Factual
Background
[3]
On or about 19 March 2012 the National Treasury (which is the
Government department that was tasked with the implementation
of the
tender process in question) notified the fourth respondent that it
(the fourth respondent) had been successful in its bid
in respect of
eight of the sixteen tender contract items contained in tender
contract RT60-2012T .
[4]
The tender contract is for the supply and delivery of fabric to
various state departments for the period 1 April 2012 to 31
March
2013. Each
contract
is for a specific quantity of fabric finished in accordance with the
governments' detailed specifications.
The
remaining eight contract items were awarded to entities that are not
parties to these proceedings or the review proceedings.
[5]
The implementation of the tender contract is in process and
continuing. Almost nine months of the twelve months contract period
have now passed and the fourth respondent is supplying the product in
terms of the tender contract.
[6]
The applicant was not successful in respect of any of the contract
items for which it tendered. It now seeks to stop the further
implementation of the eight tender contract items awarded to the
fourth respondent.
[7]
Clause 20.1 of the Special Conditions of Contract provides:
"Only
locally manufactured products from local raw materials or input wilt
be considered. If the raw material or input to be
used is not
available locally. contractors should obtain written
confirmation
from the Department of Trade and Industry ('the DTI')."
[8]
Approximately five months after the award of the tender to the fourth
respondent, the applicant brought a review application
before this
court on 24 August 2012 to review and set aside the decision of the
National Treasury to award the tender to the fourth
respondent.
As
a ground for the review application the applicant avers that the
winning bidder, being the fourth respondent, was not compliant
with
the tender specifications in that the fabric supplied by the fourth
respondent is not locally produced in South Africa. The
applicant
asserts that the supply of the fabric by the fourth respondent was
contrary to the requirements for local content contemplated
in the
conditions of the tender.
[9]
The current urgent application is based on the same complaints as
those raised in the review proceedings.
Issues
[10]
There are two main issues for determination in this matter, namely:
10.1
Whether the matter is urgent; and
10.2
Whether the applicant has made out a case for the relief it now
seeks.
Urgency
[11]
It is common cause that the tender in casu was awarded to the fourth
respondent on 19 March 2012 in respect of the eight items
published
under tender contract RT60-2012T.
The
applicant raised its concerns with regard to the tender process and
the allocation of the tender to the fourth respondent for
the first
time on 16 April 2012.
[12]
Various communications and correspondence were exchanged between the
applicant and the first respondent and the applicant's
attorneys of
record were eventually notified on 31 July 2012 that National
Treasury is:
"...
satisfied that the successful bidder had complied with the bid
specification and therefore there would not be any reasonable
grounds
for the termination of the contract
[13]
As a result of the above, the applicant served a review application
in the ordinary course under case number 48769/12 on 24
August 2012.
The
present urgent application was only served on 2 November 2012 - more
than three months after the National Treasury's letter
dated 31 July
2012.
[14]
One of the material requirements prescribed in rule 6(12)(b) of the
Uniform Rules of Court is that the applicant must, in the
founding
papers-
“
Set
forth explicitly... the reasons why he claims that he could not be
afforded substantial redress at a hearing in due course “
In
papers before me, the applicant failed to set out explicitly the
circumstances rendering this matter urgent and also the reasons
why
it will not be afforded substantial redress at a hearing in the
ordinary course as required by rule 6(12)(b) of the Uniform
Rules.
There
is no explanation for the applicant's failure to bring this
application immediately after receipt of the National Treasury's
letter dated 31 July 2012 nor did the applicant explain why it did
not combine the review and urgent application in its application
served on 24 August 2012.
[15]
In Commissioner for SARS v Hawker Air Services (Pty) Ltd; In Re
Commissioner for SARS v Hawker Aviation Services Partnership
and
Others
[2006] 2 All SA 565
(5CA) 569
[2006] ZASCA 51
; ;
2006 4 SA 292
(SCA) 299H-300A
CAMERON JA held as follows:
"Urgency
is a reason that may justify deviation from the times and forms the
rules prescribe ... Where the application lacks
the requisite element
or degree of urgency, the court can for that reason decline to
exercise its powers under Rule 6(12)(a). The
matter
is then not properly on the court's roll, and it declines to hear it
The appropriate order is generally to strike the application
from the
roll”
[16]
In casu three months before deposing to the founding affidavit on 26
October 2012 the applicant was in possession of all the
facts on
which it now relies for its urgency (this is three full months before
it lodged this urgent application) and indeed more
than three weeks
before it launched its review application on 24 August 2012.
Given
the applicant's delay in launching this application, any purported
urgency relied upon is entirely self-created. In the circumstances
the application should either be struck from the roll or be
dismissed.
[17]
I have, irrespective of my finding that the matter is not urgent,
found it appropriate to go into the merits of the case.
Prima
Facie Right
[18]The
applicant seeks to rely on its alleged right to have the tender
contract set aside. In this regard, it contends that the
material
supplied by the fourth respondent does not accord with the tender
conditions relating to the use of local inputs.
[19]
Condition 20.1 of the Special Conditions of Contract RT60-2012T
provides as follows:
"Only
locally manufactured products with local raw material or inputs will
be considered. If the raw material or input to be
used is not
available locally, contractors should obtain written confirmation
from the Department of Trade and Industry (the DTI)."
[20]
The facts of this case show that the fourth respondent procures the
fabric it supplies to the State from Berg River Textiles.
Berg River
Textiles is based in Paarl in the Western Cape and it converts greige
fabric supplied to it by Hextex into the final
product in dyed and
printed form. Hextex is based in Worcester in the Western Cape where
it weaves the greige fabric. In other
words, Berg River Textiles
which is a local manufacturer sources it primary input, the greige
fabric from Hextex which is also
a local manufacturer. For this
reason the final product of Berg River Textiles is locally
manufactured in compliance with condition
20.1.
[21]
The Record of Decision reveals that had the contract items not been
awarded to the fourth respondent the applicant would still
not have
received any of the contract items. There were five bidders who
participated in the bid. The applicant scored the lowest
in the
evaluation of the tender. Bearing in mind how poorly the applicant
fared in the tender evaluation there is no realistic
prospect of it
being successful in being awarded the tender should the assailed
tender award be set aside.
[22]
On the facts set out above the applicant failed to show that it has a
prima facie right that needs to be protected. In Webster
v Mitchell
1948
1 SA 1186
(W), CLAYDEN J held as follows:
"in
an application for a temporary interdict; the applicant's right need
not be shown by a balance of probabilities; it is
sufficient if such
right is prima facie established, though open to some doubt. The
proper manner of approach is to take the facts
set out by the
applicant
together with the facts set out by the respondent which applicant
cannot dispute and to consider whether, having regard
to the inherent
probabilities, the applicant could on those facts obtain final relief
at a trial. The facts set up in contradiction
by respondent should
then be consideredand if serious doubt is thrown upon the case of
applicant he could not succeed"
[2]
The fact that there is no realistic prospect of the applicant being
successful in being awarded the tender is a sound reason
for me to
exercise my discretion against granting the relief sought.
Irreparable
Harm
[3]
The applicant does not specifically show that it will suffer
irreparable harm if the interdict is not granted. Instead it contends
that "irreparable harm will be occasioned to the public purse
and the end user of the product".
In
my view, given the applicant's poor performance in the tender
evaluation (it came last amongst five bidders) even if the interdict
were to be granted, it is highly unlikely that it would be awarded
the contract.
In
the circumstances the applicant has not even established a basis on
which it may suffer prejudice let alone irreparable harm.
Balance
of Convenience
[25]
The applicant contends that the balance of convenience favours the
grant of the relief because it stands ready to supply the
balance of
the tender contract.
This
contention does not hold water. It is a fact that amongst all the
five bidders the applicant performed the worst in the evaluation
of
the tender.
[26]
The balance of convenience must be assessed taking into account also
the respective p&sition of all the parties that are
affected as
well as the delays on the part of the applicant in launching this
application.
[27]
In Chairperson, Standing Tender Committee and Others v JFE Sapela
Electronics (Pty) Ltd and Others
2008 (2) SA 638
(SCA) the applicant,
having established the invalidity of the tenders in question was
effluxion of time and the work that had already
been performed under
the tenders.
[28]
In casu a substantial number of contract items awarded have already
been completed and the remaining portion of the uncompleted
contract
items will be completed by March 2013, a period of hardly four months
from now. In my view the late changes at this stage
will disrupt the
supply of fabric to the State.
Furthermore,
the prejudice to the first respondent and the fourth respondent if
the interdict is granted will far outweigh the prejudice
to the
applicant if the interdict is refused.
See Erickson Motors (Welkom) Ltd v
Protea Motors, Warrenton and Another
1973 3 SA 685
(AD) 691D-F.
Alternative
Remedy
[29]
In paragraph 18.4 of its founding affidavit applicant merely alleges
that it has no other satisfactory remedy without stating
explicitly
the basis thereof.
There
is no suggestion that any of the respondents would be unable to meet
a claim for damages. The applicant has an alternative
remedy by
instituting a claim for damages. This of course will depend on its
success in the pending review proceedings.
Application
to strike out by fourth respondent
[30]
At the hearing of this matter the fourth respondent brought an
application to strike out the contents of paragraphs 44, 45,
46, 47,
56, 64.10 and 65 of the applicant's initial replying affidavit and
paragraphs 30, 31, 32, 40, 45, 46, 47, 48 and 49 of
the applicant's
supplementary replying affidavit in so far as it relates to the issue
of "fronting".
The
essence of the allegations is that the fourth respondent is doing
business as a front for Berg River Textiles and/or the third
respondent.
[31]
In its founding affidavit in this urgent application the applicant
made absolutely no mention of the issue of alleged "fronting'7.
Instead, in the founding affidavit in the urgent application the
applicant limited itself entirely to the issue raised in the founding
affidavit of the review application, namely the matter of local
content which is dealt with above in this judgment.
The
applicant for the first time introduced the issue of alleged
''fronting" as a relevant consideration in the urgent
application
through its replying affidavit and supplementary replying
affidavit.
[32]
I agree with the submission by counsel for the fourth respondent that
the fourth respondent is prejudiced by the attempt of
the applicant
to introduce the issue of ''fronting" in the replying affidavit
since the fourth respondent would not have the
opportunity to file
any further affidavit to refute the new allegations. It is trite law
that an applicant must raise the issues
upon which it would seek to
rely in the founding affidavit. The parties must know the case that
must be met and in respect of which
they must adduce evidence in the
affidavits.
See:
Swissborough Diamond Mines (Pty) Ltd and Others v Government of the
Republic of South Africa and Others
1999 (2) SA 279
(T);
MEC
for Health, Gauteng v 3p Consulting (Pty) Ltd
2012 (2) SA 542
(SCA).
[33]
The contents of the abovementioned paragraphs of the applicant's
replying affidavits are accordingly struck out as irrelevant
to the
present proceedings and that it constitutes an irregular attempt to
introduce new matter to this urgent application.
[34]
On the evidence before me there is absolutely nothing untoward in the
business model of the fourth respondent and the manner
in which it
conducts its business is expressly provided for in the tender process
of the State.
There
is nothing irregular or improper in the fourth respondent's business
relationship with various manufacturers and wholesale
suppliers
including Berg River Textiles and/or the third respondent. I am
satisfied that the fourth respondent conducts its business
at arms
length.
Conclusion
[35]
The application lacks urgency. Furthermore the application should be
dismissed on the grounds that the applicant failed to
establish a
prima facie right, a well-grounded apprehension of irreparable harm,
that the
balance
of convenience favours the granting of an interim interdict and that
it does not have an alternative remedy.
[36]
The application is accordingly dismissed with costs of two counsel
for the first, third and fourth respondents, such costs
to include
the costs occasioned by the postponement of this matter on 20
November 2012.
E
M MAKGOBA
JUDGE
OF THE NORTH GAUTENG HIGH COURT
63108/7012/sg
Heard
on:27 November 2012
For
the Applicant: Adv IJ Smuts SC and HP Joubert
Instructed
by:Bate Chub and Dickson Inc c/o Julian
Knights
and Associates, Pretoria
For
the 1st Respondent:Adv TV Norman SC and BM Lecoge
Instructed
by:The State Attorney
For
the 2nd and 3rd Respondents: PB Hodes SC and MR Townsend
Instructed
by: Edward Nathan Sonnenbergs c/o
Friedland
Hart Solomon and Nicolson
For
the 4th Respondent:Adv SD Wagener SC and J Barnardt
Instructed
by: Jacques Roets Inc.
Date
of Judgment: