IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case no: 12092/2021
In the matter between
LUVTHIS TRADING & INVESTMENTS (PTY) LTD Applicant
t/a INDAWO CONSTRUCTION
and
THE CITY OF CAPE TOWN 1st Respondent
AR PROJECTS & DEVELOPMENT (PTY) LTD 2nd Respondent
Hearing date: 20 May 2024
Delivered this 27th day of May 2024 by electronic mail to the parties.
JUDGMENT
NDITA, J et SIDAKI, AJ
[1] This is an application to review and set aside the decision of the First
Respondent to award a tender for the repair and maintenance of its buildings to the
Second Respondent. The Applicant also seeks to set aside the First Respondent’s
appeal authority ’s decision refusing the Applicant’s internal appeal . Thus, the relief
sought by the Applicant is couched in the following terms:
“1. An order reviewing and setting aside the decision taken by the first
respondent on 15 June 2000 awarding the tender issued under tender
number 345Q/2018/19: “Term tender for the repairs and maintenance of the
external façade and associated external works to City of Cape Town Buildings”
(the tender”) to the second respondent.
2. An order reviewing and setting aside the first r espondent’s appeal
authority’s decision dated 19 January 2021 refusing the applicant’s internal
appeal in terms of section 62 of the Local Government: Municipal Systems
Act 32 of 2000 against the award of the tender to the second respondent.
3. An order that any contract concluded between the first respondent and the
second respondent as a result of the award, be declared void ab initio,
alternatively, that any such contract be set aside.
4. An order that the bid adjudication process conducted under tender number
345Q/2018/19 be set aside, and that the first respondent be directed to consider
afresh the responsive bids in response thereto.
5. An order that the costs of this application be pai d by the first respondent,
alternatively, and in the event of the second respondent opposing the relief
sought, by the first and second respondents jointly and severally, the one paying
the other to be absolved.”
The parties
[2] The Applicant is Luvthis Trading & Investments (P ty) Ltd t/a Indawo
Construction, a company with limited liability duly incorporated in accordance with the
company laws of the Republic of South Africa, with its registered address situated at
Unit 2 Transnet Park, Robert Sobukwe Road, Bellville.
[3] The First Respondent is the City of Cape Town (“the City”) , a metropolitan
municipality as defined in section 1 of the Local Government : Municipal Structures
Act 117 of 1998, with its principal place of business situated within the jurisdiction of this
Court at the office of the City Manager, Civic Centre, 12 Hertzog Boulevard, Cape
Town.
[4] The Second Respondent is AR Projects & Developments (Pty) Ltd, a company
with limited liability duly incorporated in accordance with the company laws of the
Republic of South Africa, with its principal place of business situated at Unit 4, Glenkey
Mews, Sheffield Business Park, Purdey Road, Phillipi, Cape Town.
Factual background
[5] On 26 April 2019, the City advertised a tender for a framework contract for the
repair and maintenance to the exterior façade of the City’s buildings and associated
external works, under tender number 345Q2018/19 (“the tender”) . The duration of the
tender would be for a period of 36 months from the commencement date following the
award of the tender. The tender was divided into four areas, namely, Area 1, Area 2,
Area 3 and Area 4. The papers reveal that the Applicant tendered for all four areas,
although it indicated Area 1 as its preference, followed by Area 3, 2 and 4 respectively.
[6] According to the Applicant, the tender was a so -called “framework agreement
tender”, which means a tender for the supply of goods, services or construction work of
an ad hoc or repetitive nature, on “instructed basis”, where the terms are approved for
use over a predetermined period without a guarantee as to the extent of the expenditure
under the contract. The Applicant avers that nineteen bids were submitted, but
ultimately only three bids (including the applicant’s) were considered as responsive. On
15 June 2020, the City’s Bids Adjudication Committee (“BAC”) decided to award the
tender to the Second Respondent (“the decision”) and no standby tender was
appointed. The Applicant was informed on 30 June 2020 that its bid was unsuccessful.
On 20 July 2020, the Applicant lodged an internal appeal against the decision in terms
of section 62 of the Local Government: Municipal Systems Act 32 of 2000 (“the Act”).
The appeal was amplified on 24 August 2020 and again on 28 December 2020,
following receipt of the information requested from the First Respondent. However, the
appeal was dismissed on 19 January 2021 and the appellant so advised on the same
day.
[7] Pursuant to the dismissal of the appeal , the Applicant launched the present
proceedings seeking to review the decision of the City to award the tender to the
Second Respondent. The City opposes the application.
The grounds of review
[8] The Applicant advances the following grounds on the basi s of which it alle ges
that the tender process was flawed and, in the circumstances, the award must be
reviewed in terms of section 6 of the Promotion of Administrative Justice Act 3 of 2000:
8.1 A mandatory and material condition prescribed by an empowering
condition was not complied with in that the Second Respondent was not in good
standing with the Building Industry Bargaining Council (“BIBC”) when the tender
was awarded. According to the Appli cant, the mandatory Clause F.2.1.4.7 of the
tender document referred to as Part T1: Tender Notice and Invitation to Tender,
provides that a bidder must be in good standing with the BIBC at the time of the
award.
8.2 The Second Respondent was unfairly promoted ahead of the Applicant.
The Applicant had a better Broad-Based Black Economic Empowerment score.
8.3 The tender process and the award was procedurally unfair. This,
according to the Applicant , is so because clause F.3.11.1 of the Tender Bid
prescribes that each tenderer may be awarded a maximum of two areas. Yet, the
City awarded all four areas to the Second Respondent in the absence of any
evidence having been provided to it that the Second Respondent had the
capacity to service all those areas, and without affording the Applicant an
opportunity of presenting evidence of its own capacity in undertaking work in
multiple areas.
8.4 The award was made because irrelevant considerations were taken into
account and relevant considerations were not considered.
8.5 The award was not rationally connected to the information before the City.
8.6 The exercise of the power or the performance of the function authorised
by the empowering provision in pursuance to which the award was made, was so
unreasonable that no reasonable person could have so exercised the power or
performed the function; and
8.7 The tender process and the award was otherwise unconstitutional and
unlawful.
[9] The Applicant further avers that the City is under investigation by the
Commercial Crimes Unit in respect of several tenders similar to the present one.
[10] It is common cause that after the City had delivered the rule 53 record,
comprising in excess of 11 000 pages, two interlocutory disputes ensued. The Applicant
brought an application in terms of rule 30A for the production of certain document s it
contended ought to have formed part of the rule 53 record. The City also brought a rule
30(1) application seeking a declaration to the effect that the Applicant’s rule 30A
application constituted an irregular step. On 17 January 2023, the Applicant’s rule 30A
application was dismissed with costs on a punitive scale and the City’s rule 30(1)
application was equally dismissed but with no order as to co sts. After the judgment was
handed down, the Applicant had until 1 February 2023 to amend and/or supplement its
founding papers in the review application. It did not. On 21 November 2023, the City
delivered its notice in terms of rule 6(5)(d)(iii) of the Uniform rules of Court.
The City’s application in terms of rule 6(5)(d)(iii)
[11] In its notice, the City raises the following questions of law:
“1. Whether the application has become moot by virtue of the tender coming
to an end on 30 June 2023, as appears from the pleadings filed of record:
1.1 . . .
2. Whether the applicant’s review application still presents an existing or live
controversy, given that the applicant seeks an order reviewing the decision of the
first respondent to (1) award the tender to the second respondent, and (2) to
dismiss the applicant’s appeal against the award (notice of motion), paragraphs 1
and 2), in circumstances where the tender has lapsed and the any [sic] ruling
made by the court in respect of the appeal will have no practical effect.
3. Whether an order obtained in the applicant’s review application would
have a practical effect on either the parties or on others, given that:
3.1 The applicant seeks an order that any contract concluded between
the first respondent and the second respondent’s award be declare d void,
ab intio, alternatively that any such contract be set aside (notice of motion,
paragraph 3), in circumstances where the contract concluded pursuant to
an award came to an end by 30 June 2023.
3.2 The applicant further seeks an order that the bid adjudication
process conducted under the tender be set aside, and that the first
respondent be directed to consider afresh the responsive bids received in
response thereto (notice of motion, paragraph 4), in circumstances where
the contract concluded pursua nt to the tender has come to an end by
effluxion of time.
4. Whether the determination of the substantive relief sought by the applicant
in the review application will achieve legal certainty.”
[12] In light of this application, the City did not file an answering affidavit to the review
application.
Analysis
[13] It is evident from the aforegoing that before delving into the merits, should it
become necessary, this court must first determine whether notwithstanding the obvious
mootness, the determination of the merits is in the interests of justice. The approach to
be adopted in assessing whether an issue is moot is restated by the Constitutional
Court in Normandien Farms (Pty) Ltd v South African Agency for Promotion of
Petroleum Exportation and Exploitation SOC Limited and Others 2020 (4) SA 409 (CC)
at para 47-50 thus:
“[47] Mootness is when a matter “no longer presents a n existing or live
controversy”. The doctrine is based on the n otion that judicial resources ought to
be utilised efficiently and should not be dedicated to advisory opinion or abstract
propositions of law, and that courts should avoid deciding matters that are
“abstract, academic or hypothetical”.
[48] This Court ha s held that it is axiomatic that “mootness is not an absolute
bar to the justiciability of an issue [and that this] Court may entertain an appeal
even if moot, where the interests of justice so require. This Court “has
discretionary power to entertain even admittedly moot issues”.
[49] Where there are two conflicting judgments by different courts, especially
where an appeal court’s outcome has binding implications for future matters, it
weighs in favour of entertaining the moot matter.
[50] Moreover, this court has proffered further factors that ought to be
considered when determining whether it is in the interests of justice to hear a
moot matter. These include:
(a) whether an order which it may make will have some practical effect on
the parties or others;
(b) the nature and extent of the practical effect that any possible order
may have,
(c) the importance of the issue;
(d) the complexity of the issue;
(e) the fullness of the arguments advanced;
(f) resolving the dispute between different courts.
[14] In Minister of Justice and Correctional Services and Others v Estate Late James
Stransham-Ford and Others 2017 (3) SA 152 (SCA) at paragraph 22 , the Court
explained the discretionary power that a Constitutional C ourt ha s in deciding
whether a determination of a moot issue will have a practical effect, thus:
“… It is a prerequisite for the exercise o f the discretion that any order the
court may ultimately make will have some practical effect either on the
parties or on others. Other factors that may be relevant will include nature
and extent of the practical effect that any possible order might have, the
importance of the issue, its complexity and the fulness or otherwise of the
argument.”
[15] Counsel for the Applicant in the heads of argument contended that the
application still presents an existing or live controversy and will have a practical
effect on the parties as well as achieve legal certainty for the following reasons:
“[55] The grounds of review relate to the manner in which the City
interpreted its tender documents and whether it is permissible for the City
to apply hidden benchmarks;
[56] If left unaddressed the City will continue to interpret its tender
documents in the manner set out in its Appeal Authority’s notice of
decision, and will continue to be permitted to apply hidden benchmarks
and criteria which is at odds with the principle of transparency, fairness,
competitiveness, rationality, legality and equality;
[57] This is clearly not in the public interests and legal certainty is
therefore required to determine whether the City’s (i) interpretation of its
tender document and (ii) application of benchmarks and criterial based on
undisclosed /hidden “market related rates” and “capacity evaluations” pass
constitutional muster (the applicant submits that it is not).”
[16] According to th ese contentions, it is in the interests of justice for this court to
determine this matter regardless of the expiration of the contract as the benefit of the
court’s pronouncement on the manner in which the City conducts and applie s the
Preferential Procurement Policy Framework Act (PPPFA) will extend beyond the parties
themselves to the general public and will set the tone for the City’s future conduct.
[17] During argument, Counsel for the Applicant prudently placed on record that the
Applicant no longer pursues the relief set out in paragraph 3 and 4 of the notice of
motion, since they would have no practical effect, but persisted with the relief sought in
terms of paragraphs 1 and 2.
[18] Counsel for the City c ontended that an order by this court in this matter will have
no practical effect because (a) the impugned decision has run its course, (b) the tender
contract came to an end on 30 June 2023 and there is no extant contract to set aside;
and (c ) it would s erve no purpose whatsoever for the City to adjudicate all of the
original qualifying bids. Furthermore, the Applicant’s grounds of review are primarily
directed at the transparency of the bid evaluation process, and are specific and traverse
only factual issues and issues of interpretation, including:
18.1 whether the Second Respondent was in good standing with the BIBC;
18.2 the BBBEE requirements in this tender;
18.3 the capacity of ARP to undertake the works;
18.4 the BEC’s determination of market-related rates and the negotiations prior
to the award of the tender.
Accordingly, so concludes the City, the matter does not raise questions of general
importance and there is no discrete legal principle that requires the court t o decide the
merits. Thus, it is not in the interests of justice to resolve the issues raised in the review
application which have become moot.
[19] The Supreme Court of Appeal held in Spagni v The Director of Public
Prosecutions, Western Cape and Others (455/2022) [2023] ZASCA 24 (13 March
2023), para 10, that a s to the question of mootness, the general principle is that an
application is moot when a court’s ruling will have no direct p ractical effect ; The
reasoning behind this principle is that courts’ scarce resources must be used to
determine live legal disputes rather than abstract propositions of law ; Courts should
refrain from giving advisory opinions on legal questions that are me rely abstract,
academic or hypothetical and have no immediate practical effect or result (National
Coalition for Gay and Lesbian Equality v Minister of Home Affairs 2000 (2) SA 1
(CC)[1999] ZACC 17; 2000 (1) BCLR 39 (CC) para 21; JT Publishing (Pty) Ltd an d
Another v Minister of Safety and Security [1996] ZACC 23; 1997 (3) SA 514 (CC); 1996
(12) BCLR 1599 (CC) para 15))
[20] It is unquestioningly clear in these proceedings that the determination of the
review will not have any practical effect notwithstand ing the fact that the Applicant has
abandoned prayer s 3 and 4 of the notice motion. The same applies to the prayers
persisted with (prayers 1 and 2) for the setting aside of the decision awarding the tender
to the Second Respondent and the decision of the internal appeals authority dismissing
the Applicant’s appeal . The setting aside of the remaining prayers would also have no
practical effec t as the impugned decision has run its course and there is no longer a
contract to set aside. Therefore, regard being had to the factual background , the
decision and the relief sought by the Applicant would have no practical effect.
[21] The only issue that can be said to be live relates to costs of the review
application. Courts will not entertain a review application with no practical effect simply
because there is a n outstanding costs issue. Therefore, it would relate to the costs of
the review application.
[22] Counsel for the Applicant insisted that the merits of the review ought to be
determined because of the constitutional implications impacting on the tender process.
According to this contention, the court is required to castigate the City for flouting the
rules and this will have an impact on the future conduct of the City. The Applicants place
reliance on the decision of this court in Habitat Council v The City of Cape Town and
Others 2022 (6) SA 383 (WCC). There is no basis for relying on this matter at all as it
does not support the contentions raised by the Applicant. The converse is true. At
paragraph [77], the court deals with a similar contention and states:
“[77] What real purpose would such an order serv e? To tell the City that it was
wrong and that in future it should do its job properly? I am not sure that this is
quite what s 172 (1)(b) contemplates...”
[23] Gamble, J, then found that the review application was moot in that it raised no
live issues between the applicant and the City. Likewise, in the matter at hand calling
upon the court to castigate the City for acting improperly when there is no discrete legal
point of legal interest which would be affected does not constitute a ground for
determining a matter which is moot.
[24] In The Laser Transport Group (Pty) Ltd and Another v Elliot Mobility (Pty) Ltd and
Another (835/2018) [2019] ZASCA 140 (01 October 2019), the Court dismissed the
appeal on the basis that the four -year contract concluded with the respondents in 2015
would be expiring approximately three months from the date of the hearing of the
appeal, a decision that would have no practical effect, and that the application did not
concern a discrete point of public importance that would affect matters in the future. At
paragraph [20], it remarks as follows:
“[20] … the only way the decision sought would have a practical result or effect
would be by extension of the contract (based on the August 2015 tender) beyond
the November 2019 expiry date. As submitted on behalf of the respondents, the
result would be contrary to the terms of the August 2015 award and there could
be no basis, on the facts of this case, for the commencement date of the contract
to be on a date beyond the period of the contract. The tender was intended for
commencement in 2015 on terms and conditi ons (especially the pricing
conditions) that existed then. One hardly needs evidence to show that, four years
later such conditions have changed...”
[25] Regarding the Applicant’s argument that the consideration of the mat ter involves
constitutional issues impacting on the City’s procurement procedures, something that
might affect similar matters in the future, the Court in The Laser Transport Group case,
supra, held thus:
“[21] . . . even where constitutional issues are implicated, if the decision is case
specific, there are no grounds for the court to exercise its discretion in favour of
entertaining an appeal that is moot. Even if the assessment of objective factors
under s 2(1)(b)(i) of the PPPFA was incorrectly applied, or the tender process
was tainted by illegality or the Full Court’s substitution of the tender award was
wrong, no basis was laid for a conclusion that the matter raised issues of public
importance.”
[26] The issues in the present matter arise out of a contract which is specific to the
parties. On these papers, there is no justi fication for concluding that this matter raises
issues of public importance. This principle is reaffirmed in Mabotwane Security
Services CC v Pikitup SOC (Pty) & others (1027/20 18) [2019] ZASCA 164 (29
November 2019) as follows:
“[25] I find myself in no such dilemma. Allpay is no authority for the proposition
that a court is compelled, in terms of the Constitution, to review and set aside an
unlawful administrative act, where doing so will have no practical effect or result
in terms of s 16(2)(a)(i) of the Act. But, in any e vent, even if it were to be
assumed in favour of the appellant, that the conduct of the first respondent was
unlawful and that this court was legally obliged to declare it so, it would not be
just and equitable to grant the orders sought by the appellant , in terms of s 172
(1)(b) of the Constitution , when thy could have no practical effect or result in
terms of s 16(2)(a)(i) of the Act.”
[27] In this matter, it is our judgment that there is no important discrete question of
law of public importance.
[28] The conclusion reached above in relation to mootness renders it unnecessary to
make a determination on the merits of the review application. The Constitutional Court
cautioned in Albutt v Centre for the Study of Violence and Reconciliation, and Others
[2010] ZACC 4; 2010 (3) SA 293 (CC); 2010 (2) SACR 101 (CC); (2010 (5) BCLR 391)
para 82, that ‘[s]ound judicial policy requires us to decide only that which is demanded
by the facts of the case and is necessary for its proper disposal ’. In this case it has no t
been shown that the interests of justice nevertheless militate a consideration of the
matter on the merits of the review.
[29] It also cannot be ignore d that it is the Applicant who failed to amend its papers
and allowed the contract to lapse. Even, at the stage of the hearing, there was no
indication of the reason why the Applicant took no action to have this matter determined
whilst it was still live. It follows that the review application must be dismissed with costs.
[30] In the result, the following order is issued:
The application is dismissed with costs, including the costs of two counsel on the
“C” scale.
______________________
NDITA, J
_______________________
SIDAKI, AJ
Counsel for Applicant Adv Herna Beviss-Challinor
Instructing Attorney Barnaschone Attorneys
Counsel for 1st Respondent only Adv R Williams SC et
Adv T Sarkas
Instructing Attorney Fairbridges Wertheim Becker