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2024
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[2024] ZAFSHC 237
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Tau Pele Infrastructure (Pty) Ltd v University of the Free State and Another (3627/2024) [2024] ZAFSHC 237 (6 August 2024)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Case
number: 3627/2024
In
the matter between:
TAU
PELE INFRASTRUCTURE (PTY) LTD
Applicant
And
UNIVERSITY
OF THE FREE STATE
1
st
Respondent
CECIL
NURSE (PTY) LTD
2
nd
Respondent
HEARD
ON:
12 JULY 2024
JUDGMENT
BY:
DANISO, J
DELIVERED
ON:
This judgment was handed down in court and
electronically by circulation to the parties’ legal
representatives
via
email and release to SAFLII on 06 August 2024. The date and time of
hand-down is deemed to be 09H30 on
06 August
2024.
[1]
The applicant, (Tau Pele) seeks an urgent interim interdict (PART A
of the Notice of Motion) to
restrain the respondents (the University)
and (Cecil Nurse) from implementing
Project No 83772-901: Sasol
Library Level 3 & 8 New Furniture, Bloemfontein Campus
(the
tender) awarded by the University to Cecil Nurse pending review
proceedings (PART B of the Notice of Motion) that Tau Pele
as an
aggrieved tenderer intends to institute to declare the University’s
decision to award the tender to Cecil Nurse invalid.
[2]
It is common cause that the University is an organ of state as
envisaged in section 239 of the
Constitution and is accordingly
subject to the provisions of section 217 (1) of the Constitution
which direct that:
“
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 a system which is fair, equitable, transparent,
competitive and cost-effective.”
[3]
The application is opposed by the University.
[4]
On 18 April 2024, Tau Pele submitted a tender in response to the
University’s tender invitation
for the supply, delivery and
installation of furniture for the University’s library. The
tenderers were required to price
their offers per unit of furniture
and for delivery and installation of the furniture. Five bids were
submitted including that
of Tau Pele and Cecil Nurse. Tau Pele and
Cecil Nurse went through to the tender assessment to determine the
successful bidder.
[5]
The tender closed on 19 April 2024. However, by 7 June 2024 Tau Pele
had not received a response
with regard to its tender as a result,
Tau Pele’s representative (Mr Van Zyl) contacted Ms Belinda
Qhesi, the University’s
project manager and enquired about the
outcome of its tender. Ms Qhesi’s response was simply that she
could not divulge such
information as it was a “sensitive
topic.”
[1]
Information
then came to Tau Pele’s attention from an anonymous “whistle
blower” that the tender had been awarded
to Cecil Nurse
prompting Tau Pele’s attorney (Ms Pienaar) to also address a
letter to the University on 10 June 2024 in the
quest to obtain
confirmation of whether the tender had been awarded and if it was
awarded, reasons for the rejecting Tau Pele’s
tender were also
requested in terms of section 5 of the Promotion of Administrative
Act (PAJA).
[2]
In its
response dated 20 June 2024, the University stated that Tau Pele’s
tender was rejected on the basis of functionality
as a criterion. The
University further explained that since the nature of Tau Pele’s
business is road construction and rehabilitation,
the University in
the exercise of its discretion in the evaluation of the tenders
awarded the tender to Cecil Nurse as it specializes
in manufacturing,
supply and installation of furniture. About a week later on 1 July
2024, the University transmitted an email
to Tau Pele containing
additional reasons stating that Tau Pele’s tender was also
rejected based on pricing.
[3]
[6]
Tau Pele is aggrieved by the University’s decision to reject
its tender and submits that
the decision was arrived at arbitrarily,
it was procedurally unfair, irrelevant considerations were
considered; relevant considerations
were disregarded. The decision
was influenced by an error of law.
[4]
Tau Pele contends that it is clear that the reasons provided by the
University are simply conjured up as an afterthought because,
functionality was not part of the tender criteria. The finding that
Tau Pele specialises in road construction only is factually
incorrect
and the pricing was not considered because Tau Pele outscored Cecil
Nurse. In the submitted tender, Tau Pele scored 87,774
preferential
points higher than Cecil Nurse’s 87,668, therefore the tender
should have been awarded to the highest scoring
bidder if pricing was
considered. The purported retained discretion in the evaluation of
the tender was not exercised properly
against Tau Pele, because
functionality was not part of the tender criteria.
[7]
It is Tau Pele’s contention that the award of the tender to
Cecil Nurse without any competitive bid
pursuant to the
disqualification of Tau Pele was based on unlawful reasons it is
accordingly invalid and reviewable.
[8]
As regards the urgency of the matter, Tau Pele contends that reviews
of this nature are by their very nature
urgent. The University has
refused to provide an undertaking that the tender will not be
implemented until Tau Pele’s grievances
have been determined
through the review process, and if the University and Cecil Nurse are
not interdicted from implementing the
tender, Tau Pele will suffer
irreparable harm as it would not obtain full redress at the hearing
which flows from the ordinary
process of the Court. The public purse
will be eroded too by the double payment that will result when the
impugned decision is
ultimately set aside.
[9]
On the other side, University submits that Tau Pele has failed to
show why it will not be able
to obtain substantial redress at a
hearing in due course because, section 8 of PAJA grants the review
court wide powers to fashion
an equitable relief which may include
any damage that Tau Pele is able to prove as a result of alleged
irregular award of the tender,
the application must thus be struck
off due to lack of urgency.
[10]
In terms of rule 6(12) of the Uniform Rules of Court, the court may
permit an applicant to bypass the rules
applicable to ordinary
adjudication in relation to forms and service as contemplated in rule
6(5)(a)(b)(iii).
[5]
The
applicant must satisfy the court that the matter is so urgent that if
the applicant had to wait for the next motion court day,
the
applicant would not receive substantial redress at the hearing in due
course.
[11]
There is no merit to the University’s contention that an award
of damages that Tau Pele
could obtain in the event the tender is set
aside constitutes the presence of substantial redress. It is trite
that a compensatory
order is not an absolute remedy to an aggrieved
tenderer. The relief is
granted
only in exceptional circumstances
at the judicial review of the matter.
[6]
[12]
The application was launched without delay on 2 July 2024 as soon as
it became clear that the
University and Cecil Nurse intended to
proceed with the implementation of the tender despite being requested
not to implement the
tender pending a review. I am thus satisfied
that the provisions of rule 6(12) have been met, the matter qualifies
to be enrolled
and heard as an urgent application.
[13]
With regard to the merits of the application, Tau Pele states that it
will suffer irreparable harm if the
interdict is not granted as the
continued performance of the works under the unlawful tender will
diminish the remedy available
to it on review and since damages are
not readily feasible in respect of works already performed, Tau Pele
will also be deprived
redress for not performing in terms of the
tender itself. The balance of convenience also favours Tau Pele as no
irreparable harm
will ensue to the University and Cecil Nurse if the
interim relief is granted. According to Tau Pele’s information,
the agreement
following the award has not been concluded, as a result
Cecil Nurse may have not started with manufacturing and/or delivering
any
of the furniture however, in the event that the tender is
ultimately awarded to Tau Pele and there is proof of expenses
incurred
by Cecil Nurse for the purchase of the material, Tau Pele
tenders to purchase the said material from Cecil Nurse. As regards
the
inconvenience which may befall the students due to the suspension
of the works. Tau Pele argues that the students’
discomfort cannot trump the provisions of PAJA. The fact that the
application was launched on truncated time periods will also result
in the resolution of the dispute in a very short period of time. The
good prospects of success at the review and the absence of
another
satisfactory remedy pending review tips the scales in favour of the
granting of the interim relief.
[14]
The University insists that due to the fact that Tau Pele is
in the business of civil engineering and the tender called for
entities
who manufacture, supply and install furniture, it
accordingly applied its discretion in favour of awarding the tender
to Cecil
Nurse as it is in the business manufacturing, supply and
installation of furniture. The University avers that an award
to
a tenderer without a demonstrable functionality would be
irrational and risky.
[15]
It is conceded that despite the reasons provided to Tau Pele for
rejecting its tender,
functionality was not part of the tender
criteria and indeed Tau Pele also outscored Cecil Nurse.
[16]
It is however denied that the balance of convenience favour Tau Pele.
The University states that it has already
issued a purchase order to
Cecil Nurse to commence with the works and as on 10 June 2024, Cecil
Nurse had incurred over R300 000.00
for the manufacturing of the
furniture items and due to the unique design and specification of the
furniture, it would be difficult
if not impossible for Cecil Nurse to
recoup its costs if the implementation of the tender is halted.
[17]
The supporting affidavit deposed by Cecil Nurse details the status of
the furniture manufacturing process. The
explanation is that the
required wooden panels and the fabrics have been procured and are in
the process of being cut. The upholsterers
are in the process of
building the relevant frames in anticipation of receiving the fabric,
the required hardware such as doors,
handles, drawers, lights and
edging have been ordered.
[18]
Counsel for the University
argues that the
interdict will result in wasted resources for both the
University and Cecil Nurse. Interdicting the implementation of the
tender
will also seriously inconvenience the University’s
students as the furniture is intended for a library which is to be
used
by the students whereas Tau
Pele will suffer
no irreparable harm if the interdict is not granted because it can
claim damages upon the review and setting aside
of the alleged
irregular award of the tender. Based on all these reasons, the
application must be dismissed with costs on scale
B.
[19]
The requirements that must be satisfied by an applicant in
applications of this nature are trite: the applicant
must establish a
prima
facie
right
even if it open to some doubt; a reasonable apprehension of
irreparable harm that is likely to ensue if the interim interdict
is
not granted; the balance of convenience favouring the granting of the
interdict and the absence of a similar protection.
[7]
It has also been pointed out that an interim interdict is a
discretionary remedy.
[8]
[20]
On the facts germane to this matter, Tau Pele’s right is
asserted in the University’s evaluation of
the tender against
altered criteria.
With regard to the University’s
contention that Tau Pele will suffer no irreparable harm due to the
prospects of an award
of damages at judicial review, I have already
alluded to the fact that wh
ether Tau Pele will be able obtain
compensatory damage at judicial review will be determined on the
facts presented at the said
forum.
[21]
According to Tau Pele, the continued performance of the works will
deprive it of any prospects of performing the
works itself arising
from an unlawful and invalid administrative action. I agree. The
prospects of loss of profit is the type of
harm that warrants
protection by an interdict. I am persuaded that irreparable harm
would ensue to Tau Pele if the interim interdict
is not granted.
[22]
Regarding the balance of convenience, on Cecil Nurse’s own
version, the
required
materials
have
been ordered and procured but not yet delivered, the
works
have thus not commenced. The delay in the commencement of the
works has not been explained and it is clear on the papers
that the
University refused to halt the implementation of the tender for that
reason, it cannot be said that the suspension of
the implementation
of the tender will inconvenience the students. It is also important
to note that interim interdicts are meant
to maintain the status
quo
pending the resolution of a dispute.
They also eliminate or curb the financial loss to an aggrieved
tenderer therefore, the discontinuation
of the implementation of the
tender will also benefit the University.
[23]
On the authority of
OUTA
, in exercising its discretion to
weigh up where the balance of convenience rests where an interim
order is sought against a state
functionary or organ of state:
“
the test must
be applied cognisant of the normative scheme and democratic
principles that underpin our Constitution. This
means that
when a court considers whether to grant an interim interdict it must
do so in a way that promotes the objects, spirit
and purport of the
Constitution.”
The
court must also:
“
carefully
probe whether and to which extent the restraining order will
probably intrude into the exclusive terrain of another
branch of
government. The enquiry must, alongside other relevant harm, have
proper regard to what may be called separation of powers
harm. A
court must keep in mind that a temporary restraint against the
exercise of statutory power well ahead of the final adjudication
of a
claimant's case may be granted only in the clearest of cases and
after a careful consideration of separation of powers harm.
It is
neither prudent nor necessary to define 'clearest of cases'. However,
one important consideration would be whether the harm
apprehended by
the claimant amounts to a breach of one or more of the
fundamental rights warranted by the Bill of Rights
.”
[9]
[24]
Good prospects of success in the review play a role in evaluating
where the balance of convenience rest in
the context of this matter.
The complainant relating to the evaluation of a tender against
altered criteria violates the provisions
of Section 217 of the
Constitution which require that tenders must specify clear and
certain criteria for that reason, there are
reasonable prospects that
the review will be successful.
[25]
It is for these reasons above that I conclude that
there is no other remedy available to Tau Pele with a similar
protection. Having regard to the facts of this matter and the case
law to be applied, I am satisfied that
Tau Pele
has
made out a case for the interim relief sought.
[26]
There is no reason why the costs should not follow the result.
[27]
I accordingly make the following order:
1.
The matter is heard as one of urgency in
terms of the provisions of rule 6(12) of the uniform rules of court
and that the applicant’s
non-compliance with the forms and
requirements as to service set forth in rule 6(5) is hereby condoned.
2.
Pending the final determination of the
review application in
PART B
,
the respondents are interdicted and restrained from implementing,
executing on, or taking any further steps pursuant to the awarding
of
Project No 83772-901: Sasol Library
Level 3 & 8 New Furniture, Bloemfontein Campus
(“the
tender”) for the supply, delivery and installation of new
furniture for levels 3 and 8 of the Sasol Library, Bloemfontein
Campus to the second respondent, such to include the conclusion of an
agreement pursuant of the award of the tender and rendering
any
performance thereunder, in any manner giving effect to the award of
the contract, implementing the provisions thereof or permitting
the
execution thereof.
3.
The order in paragraph 2 above shall
operate as an interim interdict with immediate effect.
4.
The costs of the application for urgent
interim relief shall be paid by the first respondent on scale C.
NS
DANISO, J
APPEARANCES:
Counsel
on behalf of Applicant:
Adv.
C. Zietsman SC
Instructed
by:
Peyper
Attorneys
BLOEMFONTEIN
Counsel
on behalf of First Respondent:
Adv.
MS Mazibuko
Instructed
by:
Poswa
Attorneys.
BLOEMFONTEIN
[1]
Annexure “TP3” of the applicant’s founding
affidavit is Mr van Zyl’s confirmatory affidavit in that
regard.
[2]
Act 3 of 2000.
[3]
Annexures “TP4.2 to TP4.4.”
[4]
S6(2)(a)(i), (c), (d), (e) (i)(ii)(iv)(vi), (f),(h), (i) PAJA.
[5]
6 (5) (a): “
Every
application other than one brought ex parte must be brought on
notice of motion as near as may be in accordance with Form
2(a) of
the First Schedule and true copies of the notice, and all annexures
thereto must be served upon every party to whom notice
thereof is to
be given.
(b) In a notice of
motion the applicant must—
(iii) set forth a
day, not less than 5 days after service thereof on the respondent,
on or before which such respondent is required
to notify the
applicant, in writing, whether respondent intends to oppose such
application, and must further state that if no
such notification is
given the application will be set down for hearing on a stated day,
not being less than 10 days after service
on the said respondent of
the said notice:...
”
[6]
Section
8(1)(c) (ii)(bb) of PAJA;
Olitzki
Property Holdings v State Tender Board and Another
2001 (3) SA
1247
(SCA) para 24 to 31.
[7]
Setlogelo
v Setlogelo
1914
AD 221
at 227;
Webster
v Mitchell
1948 (1) SA 1186
at 1186 to 90;
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012 (6) SA 223
(CC) (
OUTA
)
paras 41 to 50.
[8]
Knox
D'Arcy Ltd and Others v Jamieson and Others
1996 (4) SA 348 (A).
[9]
Supra fn 7 at paras 45 and 47.