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[2011] ZAECELLC 2
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Izingwe Properties (Pty) Ltd v Buffalo City Development Agency and Others (EL667/08, ECD1967/08) [2011] ZAECELLC 2 (11 March 2011)
IN THE HIGH COURT OF SOUTH AFRICA
(EAST LONDON CIRCUIT LOCAL
DIVISION)
Case No.: EL667/08
ECD1967/08
Date
heard: 24 August 2010
Date
delivered: 11 March 2011
In the matter between:
IZINGWE
PROPERTIES (PTY) LIMITED
Applicant
and
BUFFALO
CITY DEVELOPMENT AGENCY
First Respondent
NEPAD
DEVELOPMENT CONSORTIUM PTY LTD
Second Respondent
CROLABU
JOINT VENTURE
Third Respondent
BUFFALO
CITY MUNICIPALITY
Fourth
Respondent
J U D G M E N T
TSHIKI, J
:
A) INTRODUCTION
On 28 August 2008 applicant herein
filed the present application seeking an order in the following
terms:
[1.1] Reviewing and setting aside of
the decision of the first respondent to award the tender for the
purchase and development of
Portion of Erven 16225, 16226 and 27304,
East London, also known as the Marina Glen site, to the second
respondent.
[1.2] Directing that the tender for
the purchase and development of Portion of Erven 16225, 16226 and
27304 East London be awarded
to the applicant.
[1.3] Directing that the first
respondent pay the costs of the application for review.
[1.4] Directing that the second
respondent, only in the event of the second respondent opposing the
application for review, pay
the costs thereof, jointly and severally
with the first respondent, the one paying the other to be absolved.
At the time of the argument of the
application, applicant had abandoned prayer 1.2 above.
At the initial stage of the
proceedings there were only three respondents and for obvious
reasons there was no order sought against
the fourth respondent. The
fourth respondent (Buffalo City Municipality) [BCM] was later joined
in the proceedings albeit in
the application wherein the third
respondent herein applied
inter alia
, for an interdict
against fourth respondent.
On the date of argument of the main
application
Mr Cole
appeared for the applicant and
Mr Ford
SC
for the second respondent.
Before the argument could commence on
the main application it transpired that in the second application
brought by Crolabu Joint
Venture no heads of argument were filed by
the applicant (Crolabu Joint Venture) and there was also no
appearance for third respondent
either.
Mr W.R. Mokhere SC
with
Miss M.P. Mdalana
appeared for first and fourth respondent in
the second application referred to above. I then granted an order
dismissing the application
by Crolabu Joint Venture with costs which
costs included costs occasioned by the appointment of two counsel.
There will therefore
be no reason for me to give a detailed judgment
in respect of the application by Crolabu Joint Venture.
Applicant, second and third
respondents as well as others had tendered for the purchase and
development of the Marine Glen site
referred to above in Erven
16225, 16226 and 27304 and the tender was ultimately awarded to the
second respondent. Applicant’s
complaint is that it scored the
highest points in the bidding process and this entitled it to be
awarded the tender in terms
of section 2(1)(f) of the Preferential
Procurement Policy Framework Act 5 of 2000 (hereinafter referred to
as “the PPPF
Act”). It is the contention of the
applicant that in awarding the tender to the second respondent,
first respondent acted
unlawfully and unconstitutionally in that it
took cognisance of irrelevant considerations. It therefore launched
the present
proceedings.
All the respondents have opposed the
application doing so on similar grounds which are:
[7.1] That the applicant has
unreasonably delayed in filing the application for review and for
that reason the application should
be dismissed.
[7.2] That applicant has not proved
that it has authorised any of the persons, including its deponent to
the founding affidavit,
to institute the present proceedings on its
behalf.
[7.3] That the decision of the first
respondent attracts judicial deference.
[7.4] On the merits all respondents
filed answering affidavits which effectively deny all the allegations
by the applicant particularly
those which are germane to the
applicant’s complaint against the first to third respondents.
Most importantly respondents
have put in issue that the scores
awarded during interviews, as alleged by applicant, were correct and
their contention is that
applicant has misunderstood the way the
marks were scored during the interview. Respondents have annexed
copies of the score sheets
which show how the second respondent
obtained his highest marks and that on individual scoring two
panellists scored the third
respondent the highest whereas three
scored second respondent highest and therefore second respondent
obtained the highest marks
hence it was awarded the tender.
The issues raised
and averments contained in affidavits by the respondents are in
contrast with those alleged by the applicant
and therefore there is
a genuine and material dispute of fact. However, the parties in
particular the applicant has allowed the
matter to proceed without
availing itself of the remedies resorted to in the case of a
material and genuine dispute of fact.
In that regard the Court will
apply the well established rule of practise in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1
where at 634 H –
I the following dictum was stated by Corbett JA:
“
.
. . where in proceedings on notice of motion disputes of fact have
arisen on the affidavits, a final order, whether it be an interdict
or some other form of relief, may be granted if those facts averred
in the applicant's affidavits which have been admitted by the
respondent, together with the facts alleged by the respondent,
justify such an order.”
It therefore follows that if I have
to consider the factual situation with regard to the scoring by the
panellists during the
interviews I would consider the facts which
have been alleged by the respondents herein if such facts are in
contrast with those
alleged by applicant.
However respondents have attacked the
applicant’s case from all fronts which include the raising of
the points
in limine
. I refer here to the delay, lack of
locus standi
and the decision which is alleged by applicant
to have been made by the first respondent when in fact respondents
contend that
it was made by the fourth respondent. If any of the
points
in limine
which I will first deal with is successful
then the applicant’s case may crumble to an end even at that
stage. I shall
first deal with the alleged unreasonable delay.
B) UNREASONABLE DELAY
Applicant’s
review has been filed in terms of s 6(1) of the Promotion of
Administration of Justice Act
2
(PAJA). However,
section 7 of PAJA provides:
“
(1)
Any proceedings for judicial review in terms of section 6 (1) must be
instituted without unreasonable delay and not later than
180 days
after the date-
(a)
subject to
subsection (2)
(c)
, on which any proceedings instituted in
terms of internal remedies as contemplated in subsection (2)
(a)
have been concluded; or
(b)
where no such
remedies exist, on which the person concerned was informed of the
administrative action, became aware of the action
and the reasons for
it or might reasonably have been expected to have become aware of the
action and the reasons.”
Section 9 of PAJA provides:
“
(1)
The period of-
(a)
. . .
(b)
90 days or 180
days referred to in sections 5 and 7 may be extended for a fixed
period,
by agreement between the
parties or, failing such agreement, by a court or tribunal on
application by the person or administrator
concerned.
(2) The court or tribunal
may grant an application in terms of subsection (1) where the
interests of justice so require.”
Applicant having been informed by
first respondent of his unsuccessful bid to develop the Marine Glen
site it wrote a letter to
the first respondent’s Chief
Executive Officer requesting full reasons for the rejection of the
bid and that letter was
dated 22 June 2007. It is clear though that
the score sheets for the interviews were received by the applicant
on or about October
2007. Although, according to the applicant, the
score sheets upon which the adjudication of the tender was based are
replete
with errors and have led to a distorted result in the award
of the tender, applicant received them as early as October 2007. It
is the applicant’s contention that the scoring by the first
respondent’s panel during the interview is,
inter alia
,
the basis upon which he has sought the review of the first
respondent’s decision. It was therefore, even at that stage,
aware or ought to have been aware of the nature of its case against
first respondent and could therefore, on the information
available
at that stage, have been able to file proper papers in Court for the
relief sought in these proceedings. That the second
respondent had
not yet paid the purchase price of R34,500,000.00 was also known by
the applicant even at that stage. The salient
facts which form the
basis of applicant’s case is that it scored the highest
points, that the adjudication of the tender
process particularly the
interviews was flawed, the decision by second respondent to award
the tender to second respondent as
well as the latter’s
failure to pay the purchase price of the site were known by
applicant at the latest in October 2007
alternatively in March 2008.
In
Gqwetha
v Transkei Development Corporation Ltd and Others
3
Nugent JA, writing
for the minority judgment, stated as follows regarding the delay in
instituting review proceedings:
“
It
is important for the efficient functioning of public bodies (I
include the first respondent) that a challenge to the validity
of
their decisions by proceedings for judicial review should be
initiated without undue delay. The rationale for that longstanding
rule - reiterated most recently by Brand JA in
Associated
Institutions Pension Fund and Others v Van Zyl and Others
2005
(2) SA 302
(SCA)
at
321 - is twofold: First, the failure to bring a review within a
reasonable time may cause prejudice to the respondent. Secondly,
and
in my view more importantly, there is a public interest element in
the finality of administrative decisions and the exercise
of
administrative functions. As pointed out by Miller JA in
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978
(1) SA 13 (A)
at
41E - F (my translation):
'It is desirable and
important that finality should be arrived at within a reasonable time
in relation to judicial and administrative
decisions or acts. It can
be contrary to the administration of justice and the public interest
to allow such decisions or acts
to be set aside after an unreasonably
long period of time has elapsed -
interest reipublicae ut sit
finis litium
. . . . Considerations of this kind undoubtedly
constitute part of the underlying reasons for the existence of this
rule.' “
In the present case the challenged
decision was the decision to award the tender to purchase and
develop a vast area of land which
decision was taken a year and one
month before the present proceedings were instituted. What matters
most is not only that the
challenge against further bodies must be
initiated without undue delay but that the prejudice which the
Fourth Respondent and
most importantly the second respondent, the
company which was given the tender, would or is likely to suffer if
the decision
to award the tender is set aside. It should be noted
that a deed of sale between the fourth respondent and the second
respondent
was signed a few weeks after the tender was awarded to
the second respondent and that first respondent’s attorneys
were
instructed there and then to transfer the land in question to
the second respondent. In the meantime from the date of the award
of
the tender up to the date of service of the application papers a lot
must have taken place between the applicant and the Buffalo
City
Municipality towards the realization of the project, and most
importantly, expenses must surely have been incurred. The
project
sought to be achieved by the fourth respondent is in the interests
of the general public as the intended development
will obviously
create jobs for the benefit of the general public in that area. I
say so assuming that the applicant has a good
case against the
respondents. Should it transpire in my evaluation of the evidence
that in any event the applicant’s case
is for any reason not
strong that would sound a death knell to the applicant’s case.
Applicant in his founding affidavit,
has not given any reasons why he has delayed in the institution of
the review proceedings
except for alleging that first respondent
delayed the institution of the application by failing to provide
information pertaining
to the evaluation of the tenders and by
failing to provide the address of first and third respondents. This
alleged failure on
the part of the first respondent could not have
delayed the institution of the present proceedings for the simple
reason that
the information was furnished at the earliest in October
2007 and at the latest in March 2008. In my view the information
furnished
to the applicant in October 2007 annexures MWG 16-19 was
sufficient for the applicant to have to institute review proceedings
against all the respondents. What the applicant does not explain is
how the further information sought from the first respondent’s
attorneys was to advance its case for the purposes of instituting
the present proceedings. Any documents, even if they were necessary,
could have been sought by the applicants during the process of
exchange of affidavits or at least by way of a request for the
record of the interview proceedings.
Section 33 of the
Constitution guarantees to everyone “the right to
administrative action that, is unlawful, reasonable
and procedurally
fair”. PAJA upon whose procedure the review of all
administrative action must be based, is in substance
a codification
of the procedure to enforce the rights contained in section 33 of
the Constitution.
4
This was
emphasized in
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
5
at para 25 as
follows:
“
The
provisions of s 6 divulge a clear purpose to codify the grounds of
judicial review of administrative action as defined in PAJA.
The
cause of action for the judicial review of administrative action now
ordinarily arises from PAJA, not from the common law as
in the past.
And the authority of PAJA to ground such causes of action rests
squarely on the Constitution. It is not necessary
to consider here
causes of action for judicial review of administrative action that do
not fall within the scope of PAJA. As PAJA
gives effect to s 33 of
the Constitution, matters relating to the interpretation and
application of PAJA will of course be constitutional
matters.”
The above dictum
underscores what I have said above and the consequence of the
enactment of PAJA is that every application for
review of
administrative action must be brought within the provisions of PAJA.
In the present case the applicant, despite its
delay in taking
action against the respondents after the expiry of the period of 180
days as provided for by PAJA
6
,
it has failed to comply with the provisions of PAJA in applying for
the condonation of the late filing of the application. Without
the
application for condonation in terms of PAJA, whose provisions in
this regard appear to be peremptory, the Court cannot be
justified
in entertaining the application for review. If it does so it would
be acting contrary to the clear intention of the
provisions of the
statute (PAJA) and therefore would be acting illegally.
In fairness to the applicant, before
I can pronounce my final decision based on the delay rule it would
be appropriate for me
to deal exhaustively with the merits of the
application. Has the applicant satisfied the requirements for the
granting of the
order in its favour? In other words has applicant
proved that the first respondent when awarding the tender to the
second respondent:
[18.1] Acted unreasonably in that,
during the adjudication procedure, irrelevant considerations were
taken into account and failed
to consider relevant consideration
thereby rendering the ultimate decision irrational, incorrect and
consequently unconstitutional?
[18.2] In this regard applicant rely
on the fact that the individual officials who compiled the combined
score sheets failed to
apply their minds properly to the
transposition of scores from the individual score sheets, which led
to the distorted mathematical
outcome.
It is common cause that the applicant
did not join the Buffalo City Municipality (BCM) the fourth
respondent as a party to the
proceedings. Its refusal to do so was
that there was never any necessity to join the fourth respondent as
a party to the proceedings.
The fourth respondent having been
successfully joined at the instance of the third respondent it is
now a party to the present
proceedings and not at the instance of
the applicant. It is also important to note that even at this stage
and contrary to the
view expressed by the Court which granted the
joinder of the fourth respondent, that the applicant still insists
that there is
no place for the fourth respondent as a party to the
present proceedings. It seems to me that this contention by the
applicant
is based on ill-conceived considerations and does not take
into account the totality of the contents of the tender documents as
a whole including the contents of the draft Deed of Sale.
The following paragraphs taken from
the conditions contained in the tender documents titled “INFORMATION
AND INSTRUCTION
FOR TENDERS” are important to note.
“
1.
General
The Buffalo City
Development Agency hereby invites tenders for the purchase and
development of certain development areas located
along the East
London beachfront.
In doing so, the
Buffalo City Development Agency (BCDA)
acts on behalf of the
Buffalo City Municipality
and shall be responsible for the
administration of the tender.”
The effect of the
underlined portion above is that the BCDA was the agent of the BCM
and therefore any legal proceedings concerning
the tender procedure
unless specifically stated otherwise, would be instituted against
the known principal and not against the
agent. Where an agent, as in
the present case, has disclosed that he or she acts for a principal
and has acted within the scope
of the express or implied authority
conferred, a transaction effected by the agent with a third party,
or which affects the rights
of the third party is binding as between
the principal and the third person.
7
In such a case no
benefit or liability under the transaction attaches to the agent and
liability under transaction or contract
is imposed directly on the
principal who may also be sued by the third party.
8
Still on the same tender documents
which were issued to all the tenderers including the applicant under
the heading “SPECIAL
CONDITIONS OF CONTRACT” under
definitions a contract is defined as:
“
Means
the agreement concluded between the Buffalo City Municipality and the
successful tenderer with regard to the tender advertised
by the
Buffalo City Development Agency for the purchase and development of
the land.”
In the same document on page 7 the
tender documents include the following:
“
Information
and Instructions for Tenderers, Tender Notice, Special Conditions of
Contract, Specifications, Deed of Sale, Evaluation
and Adjudication
Criteria, General Conditions of Contract, Buffalo City Municipality’s
Procurement Policy, as amended. December
2001 . . .”
It is also important to state that
under “23 AWARD OF TENDER, AND FORMATION OF CONTRACT” it
has been specifically
stipulated as follows:
“
23.1
The BCM
shall
award the tender
upon
the basis of the evaluation and adjudication criteria contained in
the tender document . . .”
9
It follows from the wording of the
above conditions of tender that the award of the tender could only
be effected by the BCM and
not the first respondent as the applicant
has stubbornly suggested in both the papers and in argument. If that
is so and that
the only decision which the applicant seeks to be
reviewed being the award of the tender for the purchase and
development of
Portion of Erven 16225, 16226 and 27304, East London,
known as Marine Glen, to the second respondent, an act bestowed on
the
BCM, I can see no legal reason why the applicant failed to join
the fourth respondent in the first place. Fourth Respondent having
been joined as a party, applicant failed to amend its papers with a
view to seek an order against the fourth respondent, and
not against
first respondent, for the setting aside of the award of the tender
in the manner stated in prayer one of the notice
of motion. In the
absence of such amendment and in view of the fact that only the
fourth respondent should have made the decision
to award the tender
aforesaid to the second respondent there is no decision which this
Court could practically interfere with.
I have also observed that according
to item 36 of the tender documents under the heading “DISPUTES”,
the following
appears:
“
36.
DISPUTES
36.1 Any dispute arising
from the evaluation, adjudication or award of the tender shall be
settled by means of mutual consultation,
mediation or when
unsuccessful, in a South African Court of law.”
There is no allegation in the
applicant’s founding affidavit that the applicant has complied
with this requirement and neither
does it appear elsewhere in the
papers that there was ever an attempt to settle the dispute by way
of either mutual consultation
or mediation.
It is clear from the facts of the
case that in order to have acted on behalf of its principal in the
awarding of the tender and
therefore to be sued the agent (first
respondent) should have proved that it has actual authority from the
principal (BCM) to
make the decision to award the tender to the
successful bidder. Obviously in view of the fact that there was no
such authority
shown there was therefore no powers on the first
respondent to make the award and therefore it was imperative for the
applicant
to join and seek the order against the principal which it
has failed to do.
The case of the applicant crumbles
even on the issue of non-joinder of the BCM because there is no
order sought by the applicant
against the BCM to have the order of
awarding tender set aside. There is no evidence from the papers that
such a decision was
made by the first respondent, on the contrary,
the contention by the respondents is unanimous that the award of the
tender to
the second respondent was made by the fourth respondent.
However, for the sake of
completeness, I will deal with the allegation by applicant that the
scoring was wrong or that it was
manufactured. I agree with the
respondents that there is no evidence to substantiate the contention
of the applicant. On the
strength of the
Plascon-Evans
decision I will accept and am legally and procedurally bound to do
so that the fourth respondent made the award. Ordinarily I
would not
have to go further than this point because there is no order of the
fourth respondent which is sought to be reviewed.
However, I need to
show the applicant that it would have no valid case even if the
award was made by the first respondent. The
respondents’
affidavits raise a material dispute of fact.
Applicant contends that on receipt of
the score sheets its attorneys immediately attempted to analyse them
with a view to make
sense out of what is contained therein. It is
its contention that much confusion appears to exist when the score
sheets are closely
analysed. This resulted in queries raised with
the first respondent’s attorneys in a letter annexed and
marked “MWG17”.
On receipt of the explanation from first
respondent’s attorneys it appeared that the scores of Mr J
Eyles, Miss Nkonki
and Mr L Roodt appeared to have been correctly
transposed from their individual score sheets. On the other hand the
score sheets
of Mr Craig Sam, Mr Gaster Sharpley and Mrs Sokupe bear
no resemblance to the figures transposed under their names on the
combined
score sheet. If the example made in support thereof is that
on annexure “MWG19”, Mr Craig Sam scored 16 out of 40
for Thaba Construction, but a score of 14 appears on Annexure
“MWG25”, similarly, according to applicant, he scored
20
for the second respondent but a score of 25 appears on annexure
“MWG25”. Applicant also found similar anomalies
in
respect of entries of Messrs Sharpley and Sokupe. Consequently
applicant comes up with the average score for the applicant
of 35,
16 whereas the average score for the second respondent is 30, 16.
This ultimately concludes that applicant should have
scored 93, 16
and second respondent 89, 16 thus affording the applicant a clear
margin as the tenderer with the highest number
of points.
In response to these allegations by
applicant first respondent contends that the applicant did not score
the highest points during
the adjudication of the tender and that
the applicant was not recommended for appointment as a successful
tenderer either. He
then refers to the affidavit of Mr Louis Roodt
who has given more details about the scoring. In his affidavit he
states categorically
that various procedures were followed that
“
during the final evaluation process the tenderers were
evaluated afresh by each of the panellists without regard to the
points
which they allocated during the initial evaluation stage. He
goes on to suggest that during the final evaluation stage, the
tenderers
were evaluated on the basis of price (50 points),
functionality (40 points) and HDI (10 points). Accordingly, at the
final stage,
the prices tendered by the respective tenderers played
a more significant roll [role] than during the initial stage”.
His conclusion is that, based on the scores awarded, the
applicant did not score the highest points on final evaluation. His
view
is that Mr Goduka’s confusion was caused by his attempt
to reconcile first round scores with the combined score sheet which
related to the final evaluation stage. His ultimate conclusion is
that the panel based its final evaluation and recommendation
on the
unweighed average scores awarded in respect of the four shortlisted
tenderers and that the applicant did not score the
highest points on
the basis of this evaluation.
The above response
does not support the applicant’s allegation and instead
creates a material dispute of fact on the scoring
of points and the
manner of evaluation. This should have sounded alarm bells to the
applicant so as to weigh its options. I will
therefore decide the
matter on the evidence which, in the circumstances, I am legally
allowed to accept for the purposes of arriving
at a final decision.
10
Finally the question of the failure
by second respondent to provide the guarantee of R34,500,000.00, I
must say though that this
requirement has never been a condition
suspensive or otherwise contained in the tender documents. It cannot
therefore be used
by applicant for the purposes of seeking an order
of review of the proceedings in issue. There is also no such
condition in the
draft Deed of Sale which, if not complied with,
would result in the automatic cancellation of the contract of sale.
In the circumstances I am convinced
that even on the merits applicant has not presented evidence which
would persuade the Court
to find in its favour. He has not applied
for condonation of the late filing of the application and neither
has he provided valid
reasons for not doing so.
In the result I am of the view that
the applicant has not complied with the provisions of section 7 (1)
and 9 of PAJA and therefore
for that reason he is not properly
before Court. In the event that I am wrong in this regard there is
no acceptable evidence
on the merits to substantiate the applicant’s
case for the appropriate order sought.
In the result I make the following
order:
The application is dismissed with
costs, such costs to include, where applicable, the costs occasioned
by the employment of two
counsel.
_________________________
P.W. TSHIKI
JUDGE OF THE HIGH COURT
Appearances
:
For the applicant:
Mr S.H. Cole instructed by ABDO &
ABDO of East London
For the first and fourth respondent:
Adv W.R. Mokhare SC and Adv M.P.
Mdalana instructed by Ranamane & Phungo Inc of East London.
For the second respondent and third
respondent:
Adv E.A.S. Ford SC and Adv S.
Rugunanan instructed by Bax Kaplan Inc of East London.
1
[1984] ZASCA 51
;
1984
(3) SA 623
(A).
2
Act
3
of 2000.
3
2006
(2) SA 603
(SCA) at 612 para 22.
4
Republic
of South Africa Constitution Act 108 of 1996.
5
[2004] ZACC 15
;
2004
(4) SA 490
(CC);
2004 (7) BCLR 687
at para 25.
6
Section
7(1) of PAJA.
7
1909
TS 890
at 899, see also
SWA Amalgameerde Afslaers (Edms) Bpk v
Louw
1956 (1) SA 346
(A).
8
Wille
Principles of South African Law, 9
th
Edition by Francois du Bois
et
al
at page 998.
Myburgh
v Walters NO
2001 (2) SA
127
(C).
9
See
page 79 of the record and page 17 of the tender documents.
10
See
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
supra
(see footnote no. 1)