REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
LIMPOPO DIVISION, POLOKWANE
(1)
(2)
(3) REPORTABLE : ~/NO •
OF INTEREST TO THE JUDGES: riNO
REVISED . CASE NO: 13528/2022
In the matter between:
MAXIMUM PROFIT RECOVERY (PTY) LTD
(Registration number: 2001/005576 /07)
And
MOGALAKWENA LOCAL MUNICIPALITY
THE MUNICIPAL MANAGER,
MM MALULEKE
PK FINANCIAL CONSULTANTS
(Registration no: 2001/037349/23)
1 APPLICANT
FIRST RESPONDENT
SECOND RESPONDENT
THIRD RESPONDENT
JUDGMENT-APPLICA TION FOR LEAVE TO APPEAL
MASHAMBAAJ
INTRODUCTION
[1] The Applicant made an application for leave to appeal against the orders and judgment
granted by the above honourable court on the 13th September 2024. The application is
opposed by the First Responden t, Mogalakwena Local Municipality, Second Respondent, Mr
Maluleke, the Municipal Manager and Third Respondent, PK Financial Consultants ("the
Respondents").
[2] This application is premised on the grounds set out in the application for leave to appeal filed
on the 02nd October 2024. In brief the grounds of appeal are as follows;
2.1 that the learned judge erred in finding that the First Respondent did not commit any
irregularity in disqualifying the Applicant from the tender.
2.2 that the learned judge erred in finding that the Applicant should approach the appropriate
forum to investigate the allegation of tender fraud and that the effect of the judgment of the
court a quo is that tender fraud and / or serious irregularities will be allowed to stand.
[3] The application was set down for hearing on the 29th of January 2025.
FACTUAL BACKGROUND
[4] The First Respondent advertises a tender for the appointment of a panel of service providers
for the specific disciplines . One of the disciplines included in the tender was VAT recovery and
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review of VAT returns ("the tender"). The Applicant submitted the tender in respect of the VAT
recovery portion. The Applicant did not succeed with his bid for the tender, as he was
disqualified. The Applicant was furnished with reasons for his disqualification. The first reason
was that the Applicant did not complete full rates on the MBD 3.1 Form (pricing schedule) . The
Applicant only proposed a percentage rate for VAT recovery/review and left blank space for
the required percentage for the amount recovered1. The second reason was that the
Applicant's Senior Manager did not meet the qualification requirements as per the tender
document.
[5] The tender required the following qualification for 40 points;
5.1 Senior Manager (qualified CA's, SAIPA, Internal Auditor, Tax Practitioner: (10 years'
experience);
5.2 Senior Manager (qualification CA's, SAIPA, internal Auditor, Tax Practitioner); 5-9
years post qualification relevant experiences ;
5.3 Senior Manager (qualified CA's, SAIPA, Internal Auditor, Tax Practitioner): 4 years or
less post qualification relevant experience each (no points will be awarded without a CV,
certified copies of qualification .
[6] The Applicant neglected to attach crucial qualification which led to the tender adjudicators to
disqualify his tender application. The Applicant got zero point on functionality. The Applicant
did not attach CFA membership certificate of the senior manager2. The Applicant failed to send
a complete record of his senior manager's qualifications as per the tender requirements. The
referred CFA membership certificate of the Senior Manager was only provided in the
Applicant's replying affidavit but did not form part of the records which was before the tender
adjudicators.
1 Index to application, vol 6, page 597
2 Index to application, vol 7, page 609-610, annexure SA6a-SA6aa.
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[7] It is undisputed that the Third Respondent satisfied the tender requirements as he properly
completed the MBD 3.1 Form (pricing schedule) and further attached all required
qualifications.
[8] The Applicant made a review application to the court a qua in terms of the Promotion of
Administrative Justice Act3 ("PAJA") for an order to review and to set aside the decision of the
First Respondent to award the tender in respect of VAT recovery and review VAT returns to
the Third Respondent. The Applicant further requested the court a qua to declare that the
appointment of the Third Respondent in respect of VAT recover is constitutionally invalid, to be
reviewed and to be set aside. The Applicant requested the court a qua to grant a substitution
order, allowing him to replace the Third Respondent and continue with the tender. The
Applicant alleged that the Responde nts committed fraud because they failed to comply with
section 217 of the Constitution of the Republic of South Africa4, ("the constitution") and the
Preferential Procurement Policy Framewor k (PPPFA)5. The court a qua dismissed the review
application with cost, attorney and client cost, including the cost of two counsel. The court a
qua concluded that there are no proof of irregularities committed by the Respondents. In
exercising his rights, the Applicant made an application for leave to appeal before this Court.
LEGAL PRINCIPLES
[9] Applications for leave to appeal are governed by the provisions of section 17 of
the Superior Courts Act6 10 of 2013. Section 17(1) provides as follows:
"(1) Leave to appeal may only be given where the judge or judges concerned are of the
opinion that:
(a) (i) the appeal would have reasonable prospect of success; or
3 Promotion of Administrative of Justice Act 3 of2000
4 The Constitution of the Republic of South Africa, Act I 08 of 1996, as amended
5 Preferential Procurement Policy Framework Act, 5 of2000
6 The Superior Courts Act 10 of2013
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(ii) there is some other compelling reason why the appeal should be heard, including
conflicting judgments on the matter under consideration;
[1 0] The traditional test that was applied by the courts in considering leave to appeal applications
have been whether there is a reasonable prospect that another Court may come to a different
conclusion to the one reached by the court a quo as said in Commissioner of Inland
Revenue v Tuck 1989 (4) SA 888 (T) at 8908. With the enactment of section 17, the test
obtained statutory force. In terms of section 17(1 )(a)(i) leave to appeal may now only be
granted where the Judge or Judges concerned is of the view that the appeal would have a
reasonable prospect of success, which made it clear that the threshold to grant leave to appeal
has been raised.
[11] In Mont Chevant Trust v Tina Goosen and 18 Others supra, at para 6, it was held that:
"It is clear that the threshold or granting leave to appeal against a judgment of a High Court
has been raised in the new Act. The former test whether leave to appeal should be granted
was a reasonable prospect that another Court might come at a different conclusion , see Van
Heerden v Cronwright & others 1985 (2) SA 342 (T) at 342H. The use of the word "would" in
the new statute indicates a measure of certainty that another Court will differ from the Court
whose Judgment is sought to be appealed against." In Notshokuvu v S (2016) ZASCA 112 at
para 2, it was indicated that an Appellant faces a "higher and stringent" threshold under
the Superior Courts Act. Thus, in relation to the said section 17, the test for leave to appeal is
not whether another Court "may" come to a different conclusion, but "would" indeed come to a
different conclusion.
[12] With regard to the meaning of reasonable prospects of success, it was held in S v
Smith 2012 (1) (SCA) 570, at para 7, as follows:
"What the test of reasonable prospects of success postulates is a dispassionate decision, based on the
fact and the law, that a court of appeal could reasonably arrive at a conclusion different to that of the
trial court. In order to succeed, therefore, the appellant must convince this court on proper grounds that
he has prospects of success on appeal and that those prospects are not remote but have a realistic
chance of succeeding . More is required to be established than that there is a mere possibility of
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success, that the case is arguable on appeal or that the case cannot be categorised as hopeless.
' There must in other words, be a sound, rational basis for the conclusion that there are prospects of
success on appeal. "
(13] In the decision of Ramakatsa v ANC which it was [(724/2019) [2021] ZASCA 31 (31
March 2021)] it was held that:
"I am mindful of the decision at High Court level debating whether the use of the word "would" as
oppose to "could" possible mean that the threshold or granting the appeal has been raised. If a
reasonable prospect of success is established, leave to appeal should be granted... The test of
reasonable prospect of success postulates a dispassionate decision based on the facts and the law
that a Court of Appeal could reasonably arrive at a conclusion different to that of the trial court' [at para
1 O].
SUBMISSIONS
[14] The Applicant argued that the tender should have been awarded to him due to his lower
tendered rate of 4.3% when compared to the Third Respondent tendered rate of 12.5%. The
Applicant further alleged that the Respondents committed fraud due to the First Respondent's
failure to consider a low rate and tendered with the Third Respondent who quoted the higher
rate. The Applicant further alleged that the service agreement between the First and Second
Respondent was entered into with a tendered rate of 15%, which should be considered
exorbitant.
(15] The Applicant submitted that section 217 of the Constitution, inter alia, demands fair
competition and cost effectiveness . The Applicant indicated that he should have been given
preference since he had tendered with a low rate and that when there is honest competition, a
low rate should ordinarily result in cost-effective procurement.
[16] The Respondents argued that the Applicant failed to submit the required qualifications as per
the tender requirements and that the tender adjudicators cannot be faulted for their decision to
disqualify the Applicant. The Respondents further submitted that the Applicant did not properly
complete the tender document as required. The Respondents emphasised that there was no
fraud committed and that the Third Respondent complied with all necessary requirements.
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[17] The Third Respondent submitted that the PPPFA7 provides that procuring entities should
consider only "acceptable" tenders. An acceptabletender is defined in section 1(i) of PPPFA
as:
"1,,,any tender which, in all respects, complies with the specifications and conditions of tender as set
out in the tender documents ."
[18] The Third Respondent further submitted that section 2 (1 )(f) of PPPFA allows an entity to
award a contract to a bidder who has the highest scoring bidder unless where objective criteria
in addition to those contemplated in paragraphs (d) and (e) justify it. The Applicant did not
make a case that he was the highest scoring bidder among all the companies appointed to the
panel.
[19] The Third Respondent further submitted that in the entire submissions made by the Applicant ,
the Applicant failed to show that he has a reasonable prospect of success in the appeal as
required by Section 17 (1) of the Superior Courts Act8. The Applicant did not show that there is
some other compelling reason why the appeal should be heard.
THE DISCUSSIONS AND COURT'S FINDINGS
[20] The Applicant did not deny that certain important qualifications of their Senior Manager were
not forming part of the records before the tender adjudicators. Although the Applicant argued
that they completed tender MBD 3.1 form as required, the court noted that the referred form
was not properly complete .
[21] The claim of fraud against the Respondents remains a speculation without proof. The court
finds that the Applicant cast aspersion on the Respondents because he was disqualified. The
main concern raised by the Applicant was that the service agreement entered into between the
Respondents have a fee rate of 15% which he considers very high compared to his rate of
4.3%. The Applicant's submission was that due to their lower rate of 4.3% they should have
been appointed because of cost effectiveness as required by section 217 of the constitution.
The Applicant further indicated that the Third Respondent rate was at 12.5% was altered to
15%, which is against the principles in section 217 of the constitution.
7 Preferential Procurement Policy Framework Act, No. 5 of 2000.
8 Ibid page 4
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[22) The Applicant did not request reasons in terms of section 5(1), of PAJA9, from the
' Respondents as to why the tender rate was altered'from 12.5 % to 15% as appears in the
service agreement. The Applicant submitted that the request for reasons was not made but the
fraud committed by the Respondents is clear. The court is of the view that there is no clear
fraud committed by the Respondents as alleged by the Applicant.
[23) The court finds that the issues regarding tender fraud is a triable issue. The court a qua
could not have decided the issue of fraud on papers. Therefore , the Applicant's tender fraud
against the Respondents remains unfounded speculation. The Respondents vehemently
denied committing fraud in the tender process, and because of the conflicting version of the
event, the version of the Respondents is to be accepted, unless in the opinion of the court the
Respondents did not raise a genuine dispute of fact. This court is of the opinion that there is no
fraud committed by the Respondents during the tender processes. The court considered the
following case of Wightman tla JW Construction v Headfour (Pty) Ltd and Another 10, the
approach adopted was as follows:
"An applicant who seeks final relief on motion must in the event of conflict, accept the version set up by
his opponent unless the latter's a/legations are, in the opinion of the court, not such as to raise a real,
genuine dispute of fact or are so far-fetched or clearly untenable that the court is justified in rejecting
them merely on the papers".
[24) The court a quo ordered that the Applicant pays attorney and client cost to the Respondents,
including the cost of two counsel due to the fact that the Applicant's case was found to be very
week and that the Responden ts had to waste their scarce resources due to unnecessary
litigation.
[25) The court finds that the appeal has no reasonab le prospect of success and that no other court
would come to a different conclusion . The Applicant did not show that there are some
compelling reasons why the appeal should be heard. I am therefore of the view that the
application for leave to appeal should be refused.
9 Promotion of Administrative Justice Act, 3 of2000 as amended
10 Wightman t/a JW Construction v Headfour (Pty) Ltd and Another 2008 (3) SA 371 (SCA) at para 12
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[26] The cost of this application should follow the successful party, unless there is any
reason to deviate from the general rule. This court~is of the view that the Applicant should
pay the cost.
ORDER
[27) In the circumstances, I make the following order;
1. The application for leave to appeal is dismissed .
2. The Applicant is ordered to pay party and party costs, incurred by the first, second and third
respondent, including counsel fee, scale B.
APPEARANCES ~
E MASHAMBA
ACTING JUDGE OF THE HIGH COURT, POLOKWANE,
LIMPOPO DIVISION
FOR THE APPLICANT: ADV APJ ELS SC
INSTRUCTED BY: ALBERT HIBBERT ATTORNEYS
EMAIL: albert@hibbertlaw .co.za ; jaco@hibbertlaw.co.za
FOR THE FIRST AND SECOND RESPONDENT: ADV D WILLIAMS SC
INSTRUCTED BY: P MAAKE ATTORNEYS
EMAIL: admin@pmaakeattorneys.co.za ; pcmaake@pmaakeattorneys.co.za
FOR THE THIRD RESPONDENT: ADV L.M MAUNATLALA
INSTRUCTED BY: NCUBE INCORPORATED
EMAIL: lebo.m@ncubeinc.co.za ; matjitji@group621.co.za
DATE OF HEARING: 29th January 2025
DATE OF JUDGEMENT: 28th February 2025
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