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[2020] ZASCA 87
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Resultant Finance (Pty) Ltd v Head of Department for the Department of Health, KwaZulu-Natal and Another (62/2019) [2020] ZASCA 87 (16 July 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case no: 62/2019
KP
Case Nos: 4536/2017P
10475/2017P
In
the matter between:
RESULTANT
FINANCE (PTY)
LTD APPELLANT
and
HEAD
OF DEPARTMENT FOR THE
DEPARTMENT
OF HEALTH, KWAZULU-NATAL FIRST
RESPONDENT
MEC
FOR HEALTH, KWAZULU-NATAL SECOND
RESPONDENT
KP
Case No. 10475/2017P
And
in the matter between:
RESULTANT
FINANCE (PTY)
LTD APPELLANT
and
MEC
FOR FINANCE IN THE PROVINCE OF
KWAZULU-NATAL THIRD
RESPONDENT
ARKEIN
CAPITAL PARTNERS (PTY) LTD SECOND
RESPONDENT
Neutral
citation:
Resultant Finance (Pty)
Ltd v Head of Department for the Department of Health, KwaZulu-Natal
and Another
(62/2019)
[2020] ZASCA 087
(16 July 2020)
Coram:
PETSE DP and CACHALIA, WALLIS, MBHA and MOLEMELA
JJA
Heard:
No oral hearing in terms of
s 19
(a)
of the
Superior Courts Act 10 of 2013
.
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ legal representatives by email, publication
on the
Supreme Court of Appeal website and release to SAFLII. The date and
time for hand-down is deemed to be 10h00 on 16 July
2020.
Summary:
Review of tender award
–
contract period of tender lapsed prior to hearing
of appeal – no substantial points of law or matters of
substance raised
– appeal dismissed by reason of mootness under
s 16(2)
(a)
(i)
of the
Superior Courts Act 10 of 2013
.
ORDER
On
appeal from:
KwaZulu-Natal Division of
the High Court, Pietermaritzburg (Mngadi J, sitting as court of first
instance):
The appeals are dismissed
with costs, including the costs occasioned by the employment of two
counsel.
JUDGMENT
Molemela JA (Petse DP
and Cachalia, Wallis and Mbha JJA concurring)
Introduction
[1] These appeals concern
a dispute emanating from the cancellation of a public procurement
contract concluded pursuant to a tender
that was awarded to Resultant
Finance (Pty) Ltd (the appellant) by the KwaZulu-Natal Provincial
Department of Health (the Health
Department).
Background facts
[2]
On 2 March 2015, the appellant submitted a bid
[1]
in response to a Request for Proposal (RFP) issued by the Health
Department for the provision of services to manage the leasing
of
medical and non-medical equipment. By letter dated 8 April 2015
addressed to the appellant, the Health Department informed the
appellant that its bid had been successful. On 13 April 2015, the
appellant accepted the terms and conditions of the contract.
On 22
April 2015, the Health Department signed a five-year contract (the
contract) in terms of which the appellant was formally
appointed as
the solution provider responsible for sourcing medical and
non-medical equipment through lease agreements. The contract
was
signed on behalf of the Health Department by its former Head of
Department (the HOD). It is common cause that upon the conclusion
of
the contract, no value was placed on it; instead, the percentage of
the value was agreed upon as a basis for the determination
of a
contract price. On the appellant’s estimation, it was envisaged
that the total value of the contract over the full contract
term of 5
years would amount to hundreds of millions of rand, if not in excess
of a billion rand.
[3]
The appellant contended that on 31 August 2015, the first respondent
approved an initial order for equipment and requested the
respondent
to commence with the acquisition process. The value of the scanners
was estimated to be in excess of R400 million. During
October 2015,
the PIC granted a facility of R1.7 billion to be advanced to the
appellant under certain conditions, amongst which
was the appellant’s
compliance with all procurement legislation.
[4]
On 26 January 2016, the Health Department addressed a letter to the
appellant asking it to show cause as to why the contract
should not
be cancelled on account of the appellant’s failure to perform
in accordance therewith. On 3 February 2016,
the appellant
responded to the Health Department’s letter, disputing that
there was any reason for cancellation of the contract.
In
August 2016, a forensic investigation into the bid process was
commenced at the instance of the Health Department. The
appellant was
duly informed of that investigation. The interim investigation report
was issued on 30 March 2017. On 21 April 2017
the appellant launched
an application in the KwaZulu-Natal Division of the High Court,
Pietermaritzburg on the basis that the Health
Department had breached
the contract (the first application). The HOD and the Member of the
Executive Council for the Department
of Health, KwaZulu-Natal (MEC
for Health) were cited as the first and second respondent,
respectively. The appellant sought a declaratory
order confirming the
existence of the contract and an order compelling the Health
Department to comply with its obligations thereunder.
[5]
On 13 June 2017 the Health Department cancelled the contract on the
basis that the appellant: had not met the bid requirements,
had
failed to secure funding to execute the contract, and was unable to
execute the works. On 23 June 2017, the final forensic
investigation
report was submitted to the Health Department. On 12 July 2017, the
HOD and the Health Department (together referred
to as the
respondents) filed an affidavit opposing the first application. The
respondents simultaneously filed a counter-application
seeking an
order declaring that the contract had been validly cancelled in June
2017.
[6]
On 14 September 2017, the Member of the Executive Council for
Finance, KwaZulu-Natal (MEC for Finance) launched review proceedings
in the High Court against the appellant (the second application),
asserting that the award of the tender was unlawful and invalid.
The
basis of that application was that the tender awarded by the Health
Department to the appellant had not complied with the tender
requirements set out in the RFP. The Health Department was not cited
as a party in the second application. The MEC for Finance
also sought
an order consolidating the first and second applications.
[7]
Both applications came before the High Court and were simultaneously
adjudicated upon by Mngadi J (the court a quo). The court
a quo
dismissed the first application. It found that the contract concluded
by the parties lacked specifics and reasoned that
various
issues needed to be resolved by the parties prior to the performance
of each party’s contractual obligations. The
court a quo also
dismissed the Health Department’s
counter-application, inter alia, on the basis that even if it were to
be accepted that the
award of the tender to the appellant was
irregular, it was not up to the Health Department to decide that the
tender was of no
force or effect, without bringing an application for
review of that award.
[8]
With regard to the second application, the appellant raised several
preliminary points in relation to the launching thereof.
The
appellant contended that the MEC for Finance had launched that
application after an unreasonable delay of two years and six
months
and, in any event, had no standing to review the administrative
action of another provincial department. It was also submitted
that
the failure by the MEC for Finance to join the Health Department in
the second application had rendered it irredeemably flawed.
[9]
It was submitted on behalf of the MEC for Finance that in bringing
the second application, she was acting in accordance with
an
agreement she had concluded with the Premier of KwaZulu-Natal and the
MEC for Health, in terms of which it was agreed that she
would launch
that application as a representative of the provincial government as
a whole.
[2]
Reasons were also
advanced to explain why the MEC for Finance had not launched the
second application earlier.
[10]
The court a quo dismissed all the preliminary points. As regards the
issue of standing, it accepted the MEC for Finance’s
assertion
that the provincial treasury was concerned with matters of
expenditure in the province and thus played a transversal
role within
the provincial government framework.
[3]
On that basis, it found that the MEC for Finance had a direct and
substantial interest in the subject matter and therefore had
locus
standi to bring the application for review. With regard to the issue
of non-joinder, it found that, since the MEC for Health
had deposed
to an affidavit supporting the MEC for Finance, the MEC for Health
did not wish to be joined in that litigation, with
the result that
the non-joinder of the MEC for Health in the second application was
of no consequence. It accepted the reasons
proffered by the MEC for
Finance and condoned the delay in launching the second application.
[11]
Concerning the merits, the court a quo found that the central issue
related to the requirements stipulated in clause 2.34 of
the RFP,
which stipulated that a bidder’s failure to submit proof of
registration with the Financial Services Board (FSB)
would invalidate
the bid.
[4]
It considered
non-compliance with that provision as an irregularity that tainted
the bid process.
[12] In upholding the
review sought in the second application, the court a quo expressed
itself as follows:
‘
The real issue, in
my view, relates to the requirement stipulated in clause 2.34 of the
[RFP]. . . . There was no ambiguity in the
requirement and it needed
no interpretation. It stated that the bidder was required to be a
registered financial services provider
with FSB. If it was a Joint
Venture or Consortium or Partnership it would suffice if one of its
members was so registered. It [is]
common cause that [the appellant]
made a bid alone. It was not a Joint Venture, Consortium or
Partnership. Clearly the award of
the tender to [the appellant] was
irregular. [The] Health [Department] had no authority to award the
bid to [the appellant] in
contravention of the Bid Specifications.
The awarding of the tender to [the appellant] was unfair in that it
favoured [the appellant]
over other entities not registered as
required and it deprived entities so registered of being awarded the
tender. It rendered
the process uncompetitive and unfair in that a
bidder who was supposed to be disqualified was awarded a tender. . .
. It was illegal
in that it contravened section 217 of the
Constitution, Treasury Regulations and the SCM policy of the
Department of Health. The
award of the tender to [the appellant]
allowed corrupt practices in that set published requirements were not
applied. It resulted
in an unfair process. See
AllPay Consolidated
v Chief Executive Officer SASSA
2014 (1) SA 604
(CC).
. . .
In my view, in this
application factors that carry more weight are the following: there
has been no delivery in terms of the contract;
the ground of review
is of substance; [the appellant] is the author of the established
ground of review; the contract was a high
value contract; there were
issues around the delivery in terms of the contract that had not been
resolved by the parties which
delayed delivery in terms of the
contract. In conclusion, the delay in lodging the review application
is condoned.
. . .
Once it is found that the
award of the tender to [the appellant] was unlawful, it is required
that it be considered what would be
the just and equitable remedy in
the circumstances. There has been no delivery in terms of the
contract. The affected parties are
[the appellant] and the [Health]
Department. There are no consequences of the award that are
irreversible. The non-compliance must
be placed at the door of [the
appellant] and in my view it was a substantial non-compliance. I find
that it is a just and equitable
remedy to set aside the award of the
tender to [the appellant].’
[13]
The court a quo granted the appellant leave to appeal against its
judgment on a limited basis. The appeal against the whole
judgment of
the court a quo is with the leave of this Court.
Issues raised in the
parties’ heads of argument
[14]
The parties’ heads of argument raised the following issues for
determination. Whether the contract that arose out of
the procurement
award was extant and should be enforced; whether the court a quo
correctly granted condonation in review proceedings
launched more
than two years after the impugned decision; whether the award made in
favour of the appellant, was irregular, unlawful,
ultra vires;
whether the court a quo correctly granted a review of that award on
the basis of the principle of legality;
[5]
and if so, whether the irregularities contended for were material to
warrant the setting aside of the award.
Submissions
made on behalf of the parties in this Court
[15]
It was submitted on behalf of the appellant that the court a quo’s
finding that the appellant had not delivered its performance
as
contemplated in the contract was incongruent with its finding that
the Health Department had failed to issue any purchase orders
despite
its contractual obligation to do so. The appellant argued that the
dismissal of its application flew in the face of the
principle that
where a party has proven a right and the breach thereof, a court has
no discretion to refuse to grant relief to
vindicate the breach of
the said right.
[6]
[16]
It was further submitted on behalf of the appellant that the court a
quo ought to have upheld the preliminary point on the
basis that it
is not the MEC for Finance’s personal knowledge that triggers
the duty to act, instead, the knowledge of those
who were involved in
the procurement process was imputed to the organ of state itself,
namely, the Department of Finance.
[17]
Concerning the merits, it was submitted on behalf of the appellant
that there was no justification for the cancellation of
the contract
by the Health. The appellant further contended that the Health
Department had deliberately made it impossible for
it to perform its
obligations under the contract in order to justify its subsequent
repudiation thereof.
[18]
In relation to the second application, it was submitted on behalf of
the appellant that the MEC for Finance had delayed unreasonably
in
bringing the review application. The court a quo was also criticised
for having found that the MEC for Finance was entitled
to seek the
review of the administrative acts of the Health Department.
[19]
It was contended on behalf of the appellant that, in finding that the
tender to the appellant was irregular, the court a quo
had ignored
objective evidence, namely, the content of the co-operation agreement
concluded between the appellant, Standard Bank
and STANLIB.
[20]
It was submitted on behalf of the respondents and the MEC for Finance
that the appellant had not submitted proof of registration
with the
FSB and had therefore failed to comply with clause 2.34 of the bid.
[21]
Given the view I take on this matter, it is not necessary for this
Court to analyse the parties’ submissions relating
to the
merits in any detail. Suffice it to emphasise that s
217
of the Constitution lays down the threshold requirements for a valid
procurement process
in
accordance with a system that is ‘fair, equitable, transparent,
competitive and cost-effective’.
[7]
Statutes, such as the PFMA and subordinate legislation made under
that Act, such as the Treasury Regulations, as well as the supply
chain management policies that have to be applied by organs of state,
all give effect to the constitutional injunction enunciated
s 217 of
the Constitution.
[8]
Section
172(1)
(a)
of the Constitution
[9]
obliges
every competent court to declare invalid law or conduct that is
inconsistent with the Constitution.
[10]
Following thereon, a court must, in terms of s 172(1)
(b)
make
an order that is just and equitable.
[22]
I
t is clear from the bid documents that only the name of the
appellant was reflected as the bidder. Furthermore, the appellant
was,
by its own admission, not registered with the FSB. The appellant
asserted that an employee of Standard Bank had mentioned at the
tender briefing meeting that Standard Bank would be in a joint
venture with the appellant for purposes of the bid. The appellant
contended that the requirements in clause 2.34 of the RFP had been
met, insofar as it had, on 27 February 2015, entered into a
‘co-operation agreement’ with Standard Bank and STANLIB,
which entities were registered with the FSB. It is undisputed
that no
proof of FSB registration, in relation to Standard Bank and STANLIB,
was attached to the appellant’s bid documents.
[23]
Significantly, clause 2.19.2 of the RFP, stipulated that in the case
of a joint venture, the names and particulars of each
company
participating therein had to be provided. In addition thereto, a
certified copy of the joint venture agreement had to be
attached to
the bid, specifying the percentage of the contract to be undertaken
by each company participating therein. It is apparent
from the bid
documents submitted by the appellant, that a line has been drawn
diagonally through the text appearing on the page
reserved for the
names and other details of the members of a joint venture; in other
words, the required information pertaining
to members of the joint
venture was not furnished. It is difficult to conceive of a
clearer indication that the appellant
was not acting on behalf of a
joint venture.
[24]
In terms of clause 2.34 of the RFP, failure to submit proof of
registration with the FSB would invalidate the bid.
[11]
The appellant’s non-compliance with clause 2.34 of the RFP,
which required the bidder (including a Joint Venture, Consortium
or
Partnership) to not only be registered with the FSB but also to
submit proof of such registration with its bid documents, is
self-evident. As stated before, s 172(1)
(a)
of the Constitution obliges every competent court to declare invalid
law or conduct that is inconsistent with the Constitution.
[25]
I interpose to refer to a directive issued by this Court and sent to
the parties prior to the date allocated for the hearing
of the
appeal. Having noted that the relief sought by the appellant was
specific performance of obligations in terms of the contract,
[12]
and having noted that the date of termination of the contract by
effluxion of time predated the date allocated for the hearing
of the
appeal, the parties were directed to file supplementary heads of
argument on the question of whether the decision sought
on appeal
would have a practical effect or result.
Mootness
[26]
Section 16(2
)(a)
(i)
of the
Superior Courts Act 10 of 2013
provides that where the issues
in an appeal are of such a nature that the decision sought will have
no practical effect or result,
the appeal may be dismissed on this
ground alone. It is trite that if there is no longer a live
controversy between the parties,
then there is no longer an appeal
that would have any practical effect.
[13]
Where the existing or live controversy is absent, the matter is moot.
This principle is based on the notion that judicial resources
should
be efficiently employed and not be used for advisory opinions or
abstract propositions of law.
[14]
In this matter, the relief sought by the appellant in its Notice of
Motion was for specific performance. The clear constraint is
that the
contractual term of the agreement has expired.
[27]
In their supplementary heads, the respondents and the MEC for Finance
submitted that the issues in dispute had been overtaken
by events and
that the resolution of that dispute would not afford the appellant
any practical relief.
[15]
The
appellant contended that the mere fact that the contract forming the
basis of its claim had been terminated by effluxion of
time was not,
in and of itself, sufficient to render the case moot. It pointed out
that dismissing the appeal on the grounds of
mootness would encroach
on its rights of access to the courts, as the respondents would raise
the defence of
res
judicata
if it tried to sue for damages. The appellant submitted that it was
important for this Court to hear the appeal, as an order in
its
favour would entitle it to proceed with a damages claim against the
Health Department.
[28]
I am mindful of the fact that the appellant had sought, in the
alternative, an order declaring the contract cancelled on the
basis
of the Health Department’s breach thereof. That relief was
misconceived, as it is for the parties to the contract to
elect to
cancel it and not for the court to declare it cancelled. Equally
misconceived is the appellant’s contention that
it needs to be
successful on appeal in order for it to proceed with a damages claim.
This is premised on the fact that it was always
open to the appellant
to seek damages as a remedy for the alleged breach of contract.
[29]
I consider next whether this appeal should be decided despite the
issues on the merits being moot. The judgment of the Constitutional
Court in
Normandien
Farms (Pty) Ltd v South African Agency for Promotion of Petroleum
Exportation and Exploitation (SOC) Ltd and Others
[16]
is instructive. The Constitutional Court re-affirmed that mootness is
not an absolute bar to the justiciability of an issue. Following
a
careful analysis of the principles applicable to mootness and the
attendant discretion to deal with matters despite their mootness,
it
enumerated factors that should form part of that enquiry. These
include:
‘
(a)
whether any order which it may make will have some practical effect
either on the parties or on others;
(b) the nature and extent
of the practical effect that any possible order might have;
(c) the importance of the
issue;
(d) the complexity of the
issue;
(e) the fullness or
otherwise of the arguments advanced; and
(f)
resolving the disputes between different courts.’
[30]
In relation to (a) and (b), the appellant, relying on this Court’s
judgment in
MEC:
Department of Police, Roads and Transport, Free State Provincial
Government v Terra Graphics (Pty) Ltd t/a Terra Works and
Another
(
Terra
Graphics
),
[17]
submitted that dismissing the appeal on the grounds of mootness would
have an undesirable result as the respondents would not account
for:
(a) their unconstitutional conduct of undermining a valid contract
based on a lawfully awarded tender; and (b) resorting to
‘tactical
manoeuvring’. It is evident from the averments made in the
appellant’s affidavits that the conduct
it considered to be a
manifestation of the ‘tactical manoeuvring’ included a
delay in processing the purchase orders,
the Health Department
launching a forensic audit under ‘dubious circumstances’
in which the forensic investigator asked
‘nefarious questions’,
a delay in filing the answering affidavits and the
counter-application, culminating in the MEC
for Finance’s
launching an application for review after what the appellant termed
‘an inordinate delay’.
[31]
In
Terra Graphics
,
the provincial government had awarded a tender in relation to a road
infrastructure programme and concluded an agreement with
the second
respondent as the main contractor for the supply of engineering
services. The provincial government also sanctioned
the appointment
of the first respondent as the subcontractor. After both respondents
had completed the work and received some payment,
the provincial
government refused to pay the balance owing, on the basis that the
work had not been budgeted for. Notwithstanding
that the provincial
government had received the benefits of the labour of the two
contractors, the provincial government contended
that the failure to
budget for the contemplated project in the year in which the
agreement with the main contractor was concluded,
amounted to a
contravention of the applicable regulatory statutory provisions. It
therefore considered itself entitled to refuse
to be held to its
obligations in terms of the concluded agreements. This Court found
that the provincial government had behaved
unconscionably and
conducted itself without integrity. It dismissed the provincial
government’s appeal.
[32]
In this matter, the respondents inter alia relied on the findings of
the forensic investigation for its decision to cancel
the contract.
In explaining its conduct in relation to the performance of its
obligations under the agreement, the respondents
asserted that the
irregular award of the bid to the appellant was as a result of
collusive conduct between the former HOD and a
small group of people,
who had concealed the irregularities. According to the respondents,
the irregularities only surfaced when
the new HOD was appointed. The
new HOD had raised concerns about a number of contracts, which
culminated in a forensic investigation
being initiated in August
2016. The interim report arising from the forensic investigation had
found that the award of the bid
to the appellant was irregular and
recommended that disciplinary action be taken against some officials.
The MEC for Finance
asserted that the final forensic
investigation report only came to her personal knowledge on 13 August
2017, which prompted her
to launch the second application.
[33]
The conduct of the officials in this matter bears similarities with
that of the officials in
Valor
IT v Premier, North West Province and Others (Valor IT)
,
[18]
which was captured as follows:
‘
It is clear that
officials in the Department played a pivotal role in the scheme, from
the initial award of the SDA to VIT to its
progressive extensions
thereafter. This ongoing involvement explains why the legality of the
scheme was not challenged prior to
the first cancellation. It was
only after the provincial government had been placed under
administration, with new officials looking
afresh at the relationship
between the Department and VIT, that that was done.’ (Footnotes
omitted.)
[34]
This Court in
Valor
IT
reaffirmed
that the determination whether condonation of an unreasonable delay
should be granted was
a
‘factual, multi-factor and context-sensitive’ enquiry in
which a range of factors are all considered and weighed
before a
discretion is exercised one way or the other.
[19]
Relying
on the approach laid down in various authorities, this Court found
that the court below was justified in overlooking the
unreasonable
delay.
[35]
Reverting to the facts of this matter, the reasoning of the court a
quo in relation to its decision to condone the delay in
launching the
second application is not out of sync with the applicable legal
principles. Moreover, its finding that the appellant
had not yet
procured any equipment on behalf of the Health Department is borne
out by the record.
[20]
I
am of the view that there is no clear evidence of unconscionable
conduct on the part of the respondents. The facts of this
case are
therefore distinguishable from those in
Terra
Graphics
.
[36]
In condoning the delay in launching the second application, the court
a quo exercised a discretion that can be justified on
appeal only on
narrow grounds.
[21]
Its
decision can only be set aside on appeal if it is found that it did
not exercise its discretion judicially,
[22]
in other words, if its decision was based on incorrect facts or wrong
legal principles.
[23]
This
does not appear to be the case. In my view, the objective facts of
this case, viewed against the backdrop of the statutory
provisions
and case-law canvassed earlier in this judgment, lead to an
ineluctable conclusion that a decision in this appeal will
serve no
practical effect.
[37]
I am also satisfied that this matter does not implicate a public
interest element that would otherwise impel this Court to
hear the
appeal despite mootness. As the appellant is merely advancing its own
commercial interest in this matter, the issues raised
for
determination are only of importance to the parties hereto.
Furthermore, the matter considered by the court a quo was not unduly
complex. The court a quo dismissed the appellant’s application
and granted the second application on clear and simple grounds.
The
appeal is fact-specific, relying on established principles. There is
a plethora of judgments pertaining to a review based on
the principle
of legality.
[24]
The law is
thus settled in this regard. Although argument in this matter was
full and comprehensive, there is no important point
or issue that
needs to be decided for future guidance.
[25]
T
his
Court’s decision will therefore have no precedential
importance.
[38]
I turn now to the appellant’s contention that the failure of
the court a quo to grant it a costs order remained a live
issue that
ought to be decided on appeal. The appellant submitted that there was
incongruity between the dicta making up the reasoning
of the court a
quo and its dismissal of the application. It contended that the court
a quo had unjustifiably denied it a costs
order. The judgment of this
Court in
RMR
Commodity Enterprises CC t/a Krass Blankets v The Chairman of the Bid
Adjudication Committee and Others
(
RMR
Commodity Enterprises
)
is apposite.
[26]
In that
matter, the term of the contract had expired by the time the appeal
was heard. The appeal was dismissed on the basis that
it would have
no practical effect as contemplated in s 21A(1) and (3) of the
Supreme Court Act 59 of 1959, which Act has since
been repealed.
[39]
The appellant in that matter had, as an alternative argument, urged
this Court to hear the appeal so as to determine the question
of
costs, notwithstanding its finding that the issues on the merits were
moot. This Court found that it was inappropriate to decide
academic
disputes where the issue of costs was the only remaining issue. It
found that the considerations relied upon by the appellant
(that the
respondents conduct was clearly calculated to cause delay) were
insufficient to constitute ‘exceptional circumstances’
contemplated in s 21A(3) of the Supreme Court Act.
[40]
Notably, s 16(2)
(a)
of the
Superior Courts Act
[27
]
mirrors the provisions of secs 21A(1) and (3) of the Supreme
Court Act. In this instance, too, there are no ‘exceptional
circumstances’ warranting that the appeal be decided purely for
purposes of ventilating the issue of costs. This is more
so because
first and second applications were intertwined. A discernible overlap
was that in their counter-application, the respondents
averred that
the appellant did not meet the tender requirements. It was on the
same basis that the MEC for Finance sought the review
of the award,
which was duly granted. It is against that background that the court
a quo did not make an order of costs in any
of the applications. That
being the case, I am not persuaded that this is an appropriate case
to decide an academic dispute purely
on the basis of the issue of
costs.
[41] For all the reasons
canvassed in the foregoing paragraphs, it follows that the appeals
must be dismissed on the grounds of
mootness.
Order
[42]
The appeals are dismissed with costs, including the costs occasioned
by the employment of two counsel.
_________________
M B
MOLEMELA
JUDGE
OF APPEAL
Appearances:
For
appellant: P L Mokoena SC (with him L Sigogo)
Instructed
by: DM5 Incorporated, Sandton
McIntyre
Van der Post, Bloemfontein
For
respondents: A J Dickson SC (with him R Athmaram)
Instructed
by: PKX Attorneys, Pietermaritzburg
Lovius
Block, Bloemfontein
[1]
One of the requirements of the tender was set out as follows in
clause 2.34 of the Request for Proposal:
‘
The
bidder must be a Registered Financial Services Provider registered
with the Financial Services Board (FSB).
The
relevant certificates must be submitted with bid, failure to comply
with this clause will invalidate your bid
.
If the bidder is a Joint Venture or Consortium or Partnership at
least member thereof must be registered with FSB
and
proof to that effect must be attached
.
Failure to submit will invalidate the
proposal submitted
and the bid will
not be considered for evaluation.’ (Own emphasis.)
[2]
The MEC for Finance averred that this was done in accordance with
the executive powers and functions imposed under s 125(2)
(b)
,
(c)
and
(g)
of
the Constitution.
[3]
Reliance was placed on
secs 17
and
18
of the
Public Finance
Management Act 1 of 1999
, which bestows on the MEC for Finance the
authority to head the provincial treasury and also empowers the
incumbent to intervene
and take appropriate steps to address
breaches of the Act by a provincial department or provincial public
entity.
[4]
See footnote 1 above.
[5]
The
reliance of the MEC for Finance on the principle of legality was
averred in her replying affidavit, filed on 1 December 2017.
This
clarification was made pursuant to the handing down of judgment on
14 November 2017 in
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Ltd
[2017] ZACC 40; 2018 (2) BCLR 240 (CC); 2018 (2) SA 23 (CC).
[6]
Chunguete
v Minister of Home Affairs and Others
1990 (2) SA 836
(W) at 848I-849A.
[7]
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Limited
[2019]
ZACC 15
;
2019 (6) BCLR 661
(CC);
2019
(4) SA 331
(CC)
para
89.
[8]
Valor
IT v Premier, North West Province and Others
[2020] ZASCA 62
para 40.
[9]
Section
172(1)
(a)
provides:
‘
(1)
When deciding a constitutional matter within its power, a court –
(a) must declare that
any law or conduct that is inconsistent with the Constitution is
invalid to the extent of its inconsistency.’
[10]
Notyawa
v Makana Municipality and Others
[2019] ZACC 43
;
2020 (2) BCLR 136
(CC);
[2020] BLLR 337
(CC); (2020)
41 ILJ 1069 (CC)
para
49.
[11]
See footnote 1 above.
[12]
The
relief sought was couched as follows:
‘
1.
Declaring as valid and extant the written contract between the
applicant and the Department of Health KwaZulu-Natal on 22 April
2015 for the appointment of the applicant as a solution provider to
manage the leasing of medical and non-medical assets for
the
KwaZulu-Natal Department of Health.
2. Directing immediate
specific performance by the respondents in terms of the contract for
the entire duration of the contract
period commencing on 22 April
2015 for a period of 5 years expiring on 30 April 2020. . . .’
There was other relief prayed
for, which was for various forms of
specific performance.’
[13]
Independent
Electoral Commission v Langeberg Municipality
2001 (9) BCLR 883 (CC); 2001 (3) SA 925 (CC).
[14]
JT
Publishing (Pty) Ltd v Minister of Safety and Security
[1996] ZACC 23
;
1997
(3) SA 514
(CC);
1996
(12) BCLR 1599
(CC)
para 15;
Normandien
Farms (Pty) Ltd v South African Agency for the Promotion of
Petroleum Exportation and Exploitation (SCO) Ltd and Others
[2020] ZACC 5
para 47.
[15]
Qoboshiyane
NO and Others v Avusa Publishing Eastern Cape (Pty) Ltd and Others
[2012] ZASCA 166
;
2013 (3) SA 315
(SCA) paras 5-6.
[16]
[2020]
ZACC 5
;
2020 (6) BCLR 748
(CC) para 50.
[17]
[2015]
ZASCA 116
;
[2015]
4 All SA 255
(SCA);
2016 (3) SA 130
(SCA).
[18]
Valor
IT
,
supra
paras
33-34.
[19]
Valor
IT
para
29-30;
Gqwetha
v Transkei Development Corporation Ltd and Others
[2006]
3
All SA 245
(SCA)
;
2006
(2) SA 603
(SCA)
para 33.
[20]
This
is a relevant factor in relation to any just and equitable remedy
that could conceivably require consideration. See
Buffalo
City Metropolitan Municipality
,
supra paras 54 and 148;
Notyawa
para
50.
[21]
Ibid para 40.
[22]
Ibid para 41.
[23]
Ibid.
[24]
AllPay
Consolidated v Chief Executive Officer South African Social Agency
and Others
2014
(1) SA 604
(CC);
Member
of the Executive Health, Eastern Cape and Another v Kirkland
Investments (Pty) Ltd
2014 (3) SA 481
(CC);
State
Information Technology Agency
;
Buffalo
City Metropolitan Municipality
;
Notyawa
;
Valor
IT
.
[25]
Notyawa
,
paras 49-50.
[26]
[2009]
ZASCA 2; [2009] 3 All SA 41 (SCA).
[27]
Section
16(2)
(a)
of the
Superior Courts Act provides
as follows:
‘
(i)
When at the hearing of an appeal the issues are of such a nature
that the decision sought will have no practical effect or
result,
the appeal may be dismissed on this ground alone.
(ii)
Save under exceptional circumstances, the question whether the
decision would have no practical effect or result is to be
determined without reference to any consideration of costs.’