REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
CASE NO: 2024-001253
DATE : 14 April 2025
In the matter between:
THRU RAINBOW (PTY) LIMITED Applicant
and
NATIONAL TREASURY First R espondent
THE MINISTER OF FINANCE N O Second Respondent
ERESA AFRICA (PTY) LTD Third Respondent
ERESA (PTY) LTD Fourth Respondent
JOHANNES FREDERIK
JANSE VAN RENSBURG BRUMMER Fifth Respondent
KIMBERLEY DANIELLE ANANTHAN Sixth Respondent
TORINET (PTY) LTD Seventh Respondent
ERNESTIA BRUMMER Eighth Respondent
RENIER OCKERT SMIT Ninth Respondent
REINHARDT BODENSTEIN Tenth Respondent
Neutral Citation : Thru Rainbow v National Treasury and Other s (2024-
001253 ) [2025] ZAGPJHC --- (14 April 2025)
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Coram: Adams J
Heard : 6 and 7 March 2025
Delivered: 14 April 2025 – This judgment was handed down electronically by
circulation to the par ties' representatives by email , by being
uploaded to CaseLines and by release to SAFLII. The date and
time for hand -down is deemed to be 10:30 on 14 April 2025.
Summary: Administrative law – review – review application based on the
Promotion of Administrative Justice Act 3 of 2000 (PAJA) – public tender –
administrative action constituted by inter alia the award of a tender by a Public
Body – the applicant was an unsuccessful bidder – it contended that the tender
process and the award of the tender were invalid and unlawful –
An administrative organ or authority does not have the inherent power to
condone non -compliance with a peremptory requirement – a tender which did
not comply with a mandatory requirement was not an acceptable tender in
terms of the Procurement Act – the administrative authority , not the court ,
decide s what should be prerequisite for a valid tender – an award that contains
minor deviations that do not materially alter or depart from the conditions of a
tender , should not be invalidated – materiality of a ten derer’s non -compliance
with the compulsory tender requirements depends on the extent to which the
purpose of the requirements is attained – in casu non-compliance by tenderer
found not to relate to mandatory requirements –
Application dismissed.
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ORDER
(1) The third and sixth respondents’ interlocutory application dated 24 June
2024 to strike out certain portions and certain paragraphs of the
applicant’s founding affidavits, be and is hereby dismissed with costs.
(2) The third and sixth respondents, jointly and severally, the one paying the
other to be absolved, shall pay the applicant’s costs of the said
interlocutory application, including the costs of two Counsel (where so
employed) on scale ‘C’ of the applicable tariff provided for in the Uniform
Rules of Court .
(3) The applicant’s judicial review application is dismissed with costs.
(4) The applicant shall pay the first to tenth respondents’ costs of this
opposed application, such costs to include the costs consequent upon the
utilisation of two Counsel, one being Senior Counsel (where so employed),
on scale ‘C’ of the applicable tariff provided for in the Uniform Rules of
Court.
JUDGMENT
Adams J :
[1]. In this opposed applicat ion, which came before me as a Special Motion
on 6 and 7 March 2025, the applicant (‘Thru Rainbow’) applies for an order
reviewing and setting aside the award by the first respondent (‘National
Treasury’) to the third respondent (‘Eresa Africa’) and the seventh respondent
(‘Torinet’) of tender number TT4-2023, descriptively titled as a Bid for ‘The
Supply and Delivery of Emergency and Rescue Equipment to the State for a
period of 60 months’ (‘the Tender’). Thru Rainbow also applies for an order
4
setting aside any agreement or agreements concluded between Eresa Africa,
Torinet and National Treasury pursuant to the aforesaid award of the tender , as
well as for an order that the t ender be remitted to National Treasury for the
recommencement of the tender process de novo , subject to the proviso that
Eresa Africa and Torinet are precluded from participating in the de novo tender
process .
[2]. By the time the bid closed on 25 January 2023, there were in total fifty
bidders, including Thru Rainbow, Eresa Africa and Torinet. The decision to
award the tender to Eresa Africa and Torinet was taken by National Treasury on
8 September 2023. I interpose here to mention that what were in fact awarded
to Eresa Africa and Torinet were certain line items of the Tender . The Tender
consisted of 251 items that were awarded to a total of 23 suppliers. Of the 251
items, Torinet and Eresa Africa were awarded only the tender relating to the
supply of sixteen items – the same sixteen items being supplied by each one of
them. These line items, as I understand it, relate specifically to vehicular
emergency electric flashing response lightin g, such as those fitted to South
African Police Service and other official emergency vehicles like ambulances
and fire trucks .
[3]. The remaining respondents are individuals and entities alleged to be
related to Eresa Africa and Torinet . Thru Rainbow is aggrieved at not being
awarded the bid or that portion of the bid awarded to Eresa Africa and Torinet ,
hence its application for the judicial review of the decision by National Treasury
to award the tender to these two companies.
[4]. Thru Rainbow contend s that National Treasury’s decision to award the
Tender to Eresa Africa and Torinet was invalid, should be reviewed and set
aside in terms of s 6 of the Promotion of Administrative Justice Act 3 of 2000
(‘PAJA ’) for the following reasons . First, Thru Rainbow contends that Torinet
and Eresa Africa failed to comply with the mandatory requirements of the tender
relating to essential parts of it, and thus, National Treasury acted irregularly in
awarding the tender to those bidders, it having no discretion in the matter.
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Second, it is the case of Thru Rainbow that Torinet and Eresa Africa have
collaborated and colluded in preparing their applications, which were patent and
should have been detected by National Treasury who ought to have ruled out
those bidders on that basis.
[5]. Therefore, i n issue in this judicial review application is whether valid
grounds exist for the review and the setting aside of the decision by National
Treasury to award the tender in favour of Eresa Africa and Torinet. And, if so,
what just and equitable remedy should be granted.
[6]. The issues in this matter are to be decided with reference to the laws
relating to public procurement and the notion that public procurement is not a
mere showering of public largesse on commercial enterprises. It is the
acquisition of goods and services for the benefit of the public.
[7]. The procurement of goods and services by the state and other public
entities is subject to various legal constraints. Section 217(1) of the Constitution
requires all organs of state, when they contract for goods or services, to do so
‘in accordance with a system which is fair, equitable, transparent, competitive
and cost effective’. That is taken up in the Public Finance Management Act 1 of
1999 (‘the PFMA’), which provides in s 51(1)(a)(iii) that the accounting authority
of a public entity (which includes National Treasury ) ‘must ensure that the public
entity … has and maintains an appropriate procurement and provisioning
system which is fair, equitable, transparent, competitive and cost effective’. It
has also been held that public procurement constitutes ‘administrative action’ as
contemplated by the PAJA and must comply with the provisions of that Act.
[8]. Section 217 of the Constitution, the Preferential Procurement Policy
Framework Act 5 of 2000 (‘the Procurement Act’ or ‘the PPPFA’ ) and the PFMA
provide the constitutional and legislative framework within which administrative
action may be taken in the procurement process. The lens for judicial review of
these actions, as with other administrative action, is found in PAJA. The central
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focus of this enquiry is not whether the decision was correct, but whether the
process is reviewable on the grounds set out in PAJA.
[9]. Section 217, the PPPFA and National Treasury’s procurement policies all
constitute the framework for National Treasury’s procurement process in issue.
A National Government department’s procurement policies are not just its
internal prescripts. They have legal effect and must be complied with unless set
aside in proceedings for judicial review. As was held by the Constitutional Court
in AllPay Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer of the South African Social Security Agency and others
(Corruption Watch and another as amici curiae)1, at para 40:
‘Compliance with the requirements for a valid tender process, issued in accordance
with the constitutional and legislative procurement framework, is thus legally required.
These requirements are not merely internal prescripts that SASSA may disregard at
whim. To hold otherwise would undermine the demands of equal treatment,
transparency and efficiency under the Constitution. Once a particular administrative
process is prescribed by law, it is subject to the norms of procedural fairness codified in
PAJA. Deviations from the procedure will be assessed in terms of those norms of
procedural fairness. That does not mean that administrators may never depart from the
system put into place or that deviations will necessarily result in procedural unfairness.
But it does mean that, where administrators depart from procedures, the basis for
doing so will have to be reasonable and justifiable, and the process of change must be
procedurally fair.’
[10]. National Treasury , as a public entity listed in Schedule 2 of the PFMA , is
subject to the provisions of the PFMA, the National Treasury Regulations,
Guidelines, Circulars and Instruction Notes that regulate the procurement and
contracting of goods and services. These instruments are issued under statute.
They have legal effect unless and until set aside in proceedings for judicial
review. They have not been set aside. These are not proceedings to set them
aside. This is the inevitable consequence of the rule of law.
1 AllPay Consolidated Investment Holdings (Pty) Ltd and others v Chief Executive Officer of the
South African Social Security Agency and others (Corruption Watch and another as amici
curiae ) 2014 (1) BCLR 1 (CC);
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[11]. In AllPay the Constitution al Court emphasised that even treatment of all
bidders and complying with procedural formalities ensures fairness to
participants in the bid process, enhances efficiency, optimises the outcome and
guards against corruption. The court further stated that to evaluate whether a
deviance from legal requirements is reviewable under PAJA, its materiality must
be assessed against the purpose of the requirement and not whether
compliance, or allowing non -compliance with same in case, would lead to a
different result. It reasoned that process change must be procedurally fair,
reasonable and justifiable and that irregularities in process that affect the
outcome have the capacity to affect legal rights.
[12]. The Supreme Court of Appeal has, in several cases emphasised that for
fairness tenders must be evaluated equally, tenderers must be treated equally
and that a tender which is adjusted during the process resulting in the bid that is
accepted being different from one that was tendered initially , is unfair.
[13]. The Supreme Court of Appeal has also stated that ‘[f]air administrative
process depends on the circumstances of each case and in some cases, it is
indeed fair to afford a tenderer an opportunity to correct an obvious mistake, to
ask for clarification or further details, provided that the process on the whole
does not lose the attribute of fairness or, in the local government sphere, the
attributes of transparency, competitiveness and cost -effectiveness ’.
[14]. In Dr JS Moroka Municipality v Betram (Pty) Limited2, the SCA , relying on
Minister of Environmental Affairs and Tourism v Pepper Bay Fishing (Pty) Ltd;
Minister of Environmental Affairs v Smith3, re-iterated the general principle that
an administrative organ or authority does not have the inherent power to
condone non -compliance with a peremptory requirement. It reasoned that a
tender which did not comply with a mandatory requirement was not an
2 Dr JS Moroka Municipality v Betram (Pty) Limited 2013 JDR 2728 (SCA) .
3 Minister of Environmental Affairs and Tourism v Pepper Bay Fishing (Pty) Ltd; Minister of Environmental
Affairs v Smith 2004 (1) SA 308 (SCA) at para 31 .
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acceptable tender in terms of the Procurement Act and its regulations and
therefore did not pass the threshold to qualify for consideration.
[15]. It is for the administrative authority not the court, so held Betram , to
decide what should be prerequisite for a valid tender and what the
consequences of failure to comply therewith should be. Importantly, a Court
must guard against invalidating a tender, and by extension an award, that
contains minor deviations that do not materially alter or depart from the
characteristics, terms and conditions and other requirements set out in tender
documents. The materiality of a tenderer’s non -compliance with the co mpulsory
tender requirements depends on the extent to which the purpose of the
requirements is attained.
[16]. With this legislative framework in mind, I now turn to deal with the
grounds of review raised by the applicant . But before I do that , it may be
apposite at this point to set out the facts in the matter in very broad strokes.
[17]. On 15 December 2022, National Treasury invited members of the public
to submit bids in the tender. The closing date for the submission of the bids was
the 25 January 2023. Fifty bidders submitted their bids before the closing date
and time. According to the bid document the bids were to be evaluated in five
phases namely: Phase 1 – Prequalification; phase 2 – administrative
requirements; phase 3 – mandatory and other bid requirements; phase 4 –
technical specification; and phase 5 – price and specific goals.
[18]. On 18 January 2023 a compulsory briefing session was held with the
bidders. During the compulsory briefing session the bidders raised several
questions which were addressed in an annexure to a letter dated 19 January
2023. In the same letter the closing date and time for the bid was extended to
30 January 2023 at 11 :00.
[19]. The bid was subject to Special Conditions of Contract for RT4 -2023
(‘SCC’) . Clause 6 of the special conditions of contract deals with evaluation
9
criteria. Clause 6.2.1 of the special conditions of contract provides that it is a
condition of the bid that only bidders having BBBEE status level contributor 1 to
8 may respond to the bid. It further provides that bidders are required to submit
proof of BBBEE status level of contributor, that proof includes valid BBBEE
status level verification certificates or certified copies thereof or a sworn affidavit
signed by the EME/QSE representative and attested by a Commissioner of
Oaths, or BBBEE affidavit issu ed by Companies and Intellectual Property
Commission (CIPC). The clause further provides that non -compliance with the
requirements for prequalification will invalidate the bid.
[20]. The bid was also subject to the General Conditions of Contract, July
2010 (‘GCC’) . Clause 34 of the GCC provides for prohibition of restrictive
practices. In particular the clause provides that an agreement between or
consented practice by firms or a decision by association of firms is prohibited if
it is between parties in a horizontal relationship and if the bidders are involved in
a collusive bidding or bid rigging. The clause further mandates a purchaser, an
organ of state, where there are reasonable gr ounds or evidence that bidders
are involved in restrictive practice to refer the matter for investigation by the
Competition Commission in terms of the Competition Act 89 of 1998. The
clause further provides that if bidders are found guilty by the Competition
Commission of restrictive practice the purchaser, the organ of state in this
regard, may in addition to any other remedy invalidate the bids on the items
affected and/or may terminate the contract in whole or in part and/or restrict the
bidder or contr actors concerned from conducting business with the public sector
for a period not exceeding ten (10) years and/or claim damages from the bidder
or contractor concerned.
[21]. This means that an organ of state , like the National Treasury , must upon
obtaining evidence or upon detecting a possible fronting or bid rigging refer the
matter to the Competition Commission for investigation and that it is only upon a
finding made by the Competition Commission of the existence of such bid
rigging or fronting that the organ of state is entitled to act in terms of the
General Conditions of Contract, clause 34. Otherwise, absent any finding of
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guilt in this regard the organ of state may not disqualify a bidder nor may it
restrict a bidder from obtaining business from the government.
[22]. During the period between the 6 and 17 March 2023 the Bid Evaluation
Committee ( ‘the BEC ’) of National Treasury met to evaluate the bids. Thru
Rainbow was disqualified for the reason that some of the samples submitted for
evaluation were not to specification and there was no submission of samples for
categories B and C of the technical specifications. Its bid was found to be non -
compliant in this regard.
[23]. The next BEC meeting was on 24 to 25 May 2023 to consider and
evaluate the bids that had passed the phase 4 evaluation. On 22 June 2023 the
BEC prepared a memorandum for the Bid Adjudication Committee ( ‘the BAC ’).
The purpose of the memorandum is described as being to obtain approval from
the BAC for the appointment of suppliers for the supply and delivery of
emergency and rescue equipment to the state for a period 1 August 2023 to 31
July 2028. In the memorandum the BEC recommended the appointment of
twent y-three bidders , including Torinet and Eresa Africa , identified as bidders
number 20 and number 8, respectively, for various items of the bid. On 20 July
2023 and again on 21 September 2023 the BAC considered the
recommendation made by the BEC and approved the awards to the
recommended bidders.
[24]. That then brings me to t he applicant’s review grounds and the merits
thereof .
[25]. The applicant firstly contends, based on a number of alleged similarities
between the bid documents of Eresa Africa and Torinet and certain
assumptions made and inferences drawn , that there has been collusion
between these two entities and ‘bid -rigging’ by their collusion. Accordingly, so
the contention on behalf of Thru Rainbow goes, these companies should have
been disqualified from the tender process on the basis of the provisions of the
SCC, the GCC and the Competition Act.
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[26]. The fact of the foregoing alleged collusion and bid -rigging, so Thru
Rainbow argues, can and should be inferred from the fact, for example, that t he
compliance checklist in respect of the particulars of the bid for both Eresa Africa
and Torinet are materially similar, with verbatim references clearly apparent
throughout. Furthermore, b oth Torinet and Eresa Africa rely on the same
supplier, United Conscious (Pty) Limited (‘United Conscious’) , for the same
ManyWain products, in order to serve the tender. This is also reflected in the
Distributor Certificates, Warranty Certificates, Installation Manuals and Test
Reports, which are materially the same in respect of both Torinet and Eresa
Africa. Thru Rainbow furthermore contends that the ‘third party supplier’, being
United Conscious, was owned and controlled by the ninth respondent
(Mr Renier Smi t) and a Mr Charles Bodenstein, who are the directors of Torinet ,
and who, together with the eighth respondent (Ms Ernestia Brummer ) and the
fifth respondent (Mr Johanne s Brummer ), are all closely related family . It is also
argued by Thru Rainbow that the collusive conduct and bid -rigging are
evidenced by the fact that t he trading addresses of Eresa, Eresa Africa and
Torinet are all located at the same physical address, being Eland Avenue,
Koedoespoort, Pretoria.
[27]. Importantly, Thru Rainbow attaches significant weight to the fact that,
according to them, the difference in price in respect of every single product
between Torinet and Eresa Africa is equal to 2.7%, with Torinet products being
priced at 2.7% more than that of Eresa Africa. Moreover, t he local content
declaration for both parties were signed on the exact same day, 25 January
2023 , plus the fact that he third -party undertaking from United Conscious are
identical in their wording and are both dated 23 Januar y 2023.
[28]. Both Eresa Africa and Torinet deny collusion between them or that they
had made themselves guilty of bid -rigging. They explain that most of the
similarities result from the fact that they both make use of the same supplier to
source the products required to service the contract pursuant to the award of
the tender. These respondents deny, in the strongest possible terms, that the ir
bid documents were prepared together or in consultation with one another . The
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deponent to the answering affidavit of Eresa Africa, who is also the sixth
respondent (Ms Kimberley Ananthan), explains that she is the sole director and
sole shareholder of Eresa Africa. She states that until she saw the founding
papers of Thru Rainbow in this application, she was completely unaware of the
fact that Torinet was in fact also sourcing its products from United Conscious.
[29]. The dispute between the parties in relation to alleged collusion and bid -
rigging is, in my view, a factual one. On the one hand, Thru Rainbow avers that
it is apparent from the tender documents of both Eresa Africa and Torinet that
both bids submitted are substantially the same . This amounts to, so Thru
Rainbow contends, collusive tendering and to a breach of the declaration by
both Eresa Africa and Torinet as contained in the SBD4 Declarations , in which
the bidders declared inter alia that: -
‘3.3 The bidder has arrived at the accompanying bid independently from, and without
consultation, communication, agreement or arrangement with any competitor.
However, communication between partners in a joint venture or consortium s will
not be construed as collusive bidding.
3.4 In addition, there have been no consultations, communications, agreements or
arrangements with any competitor regarding the quality, quantity, specifications,
prices, including methods, factors or fo rmulas used to calculat e prices, market
allocation, the intention or decision to submit or not to submit th e bid, bidding with
the intention not to win the bid and conditions or delivery particulars of the
products or services to which this bids invitation relates.
3.5 The terms of the accompanying bid have not been, and will not be, disclosed by
the bidder, directly or indirectly, to any competitor, prior to the date and time of
the official bid opening or of the awarding of the contract.
… … …
3.6 I am aware that, in addition and without prejudice to any other remedy provided
to combat any restrictive practices related to bids and contracts, bids that are
suspicious will be reported to the Competition Commission for investigation and
possible imposition of administrative penalties in terms of section 69 of the
Competition Act No 89 of 1998 and or may be reported to the National
Prosecuting Authority (NPA) for criminal Investigation and or may be restricted
from conducting business with the public sector for a period not exceeding ten
13
(10) years in terms of the Prevention and Combating of Corrupt Activities Act No
12 of 2004 or any other applicable legislation, ’
[30]. The answering affidavits filed by Torinet and Eresa Africa do , in my view,
adequately explain the perceived similarit ies. Moreover, in the context of this
opposed application, which implies that the principle in Plascon Evans4 finds
application, it canno t be said that with any conviction that the version s of the
Eresa Africa and that of Torinet are so far -fetched and untenable that this Court
can reject it out of hand. Put another way, the version of these respondents on
the facts cannot and should not be rejected by this Court out of hand, as being
patently implausible and far -fetched.
[31]. If anything, the version of Eresa Africa and that of Torinet should be
accepted as being more probable than that of Thru Rainbow . As submitted by
Mr Harcourt SC, who appeared with Ms Maharaj on behalf of Eresa Africa and
Ms Ananthan, there is no direct evidence to support the assertion that there was
collusion between Eresa Africa and Torinet or price -fixing or bid -rigging by
these two bidders. Both Torinet and Eresa Africa have the same wholesale
supplier , which necessarily means that the wholesale costs would be the same
and the markup close. That is especially so in a keen and experienced market
where the competitive pricing is not even an open secret and freely available in
the marketplace . What is more is that the applicants’ allegation s of
collaboration , collusion and bid -rigging are nothing more than specul ation
supposedly based on inferential reasoning.
4 Plascon -Evans Paints (TVL) Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; [1984] 2
All SA 366 (A); 1984 (3) SA 623; 1984 (3) SA 620 at pp 634 and 635 held as follows: -
‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on
the affidavits, a final order, whether it be an interdict or some other form of relief, may be
granted if those facts averred in the applicant's affidavits which have been admitted by the
respondent, together with the facts alleged by the respondent, justify such an order. The
power of the Court to give such final relief on the papers before it is, however, not confined
to such a situation. In certain instances the denial by respondent of a fact alleged by the
applicant may not be such as to raise a real, genuine or bona fide dispute of fact … …
Moreover, there may be exceptions to this general rule, as, for example, where the
allegations or denials of the respondent are so far -fetched or clearly untenable that the Court
is justified in rejecting them merely on the papers ...’.
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[32]. Accordingly, I conclude that the ground of review based on collusion, bid -
rigging and/or price -fixing is without merit and should fail.
[33]. The second ground of review relates to a lleged ‘fronting ’ by Eresa Africa,
which, according to Thru Rainbow, is a front for the fourth respondent (‘Eresa ’)
based on the close similarity of their names, the fact that they share the same
address according to CIPC records and that Mr Johannes Brummer , a former
director of Eresa Africa , is now a director of Eresa. This claim, which by all
accounts is totally unsubstantiated, is denied by Eresa Africa and on the basis
of the same reasoning supra relative to coll usion and bid -rigging, this factual
dispute cannot possibly be decided in favour of the applicant.
[34]. The simple point is that it cannot possibly be suggested that the version
of Eresa Africa is to be rejected out of hand as so far -fetched and untenable .
Moreover, as with the contentions in relation to coll usion and bid -rigging, the
allegation of fronting is based on sheer speculation and fatally flawed inferential
reasoning.
[35]. Therefore, the second ground of review should also be rejected.
[36]. The third ground of review relates to the Broad Based Black Economic
Empowerment (B -BBEE) status of Torinet. Thru Rainbow placed in dispute the
B-BBEE Status of Torinet at Level 1, which entitled it to 100 B -BBEE points
during the adjudication of its bid.
[37]. The case on behalf of Thru Rainbow is that Torinet , in its bid documents,
has failed to comply with the requirements relating to the verification of its
B-BBEE status, which required of bidders to either file a sworn affidavit
indicating their B-BBEE status level or furnish a B -BBEE Certificate by South
African National Accreditation Society (‘SANAS’) accredited certifier. In that
regard, the statement by Eresa, which purported to be a sworn affidavit in
compliance with the foregoing requirement, was inadvertently not signed on
behalf of Torinet , although it was supposedly commissio ned by a Commissioner
15
of Oaths. As for the B -BBEE Certificate, the document furnished by Torinet in
purported compliance with the said requirement, was issued by a non -
accredited entity, although the individual who signed the certificate is a member
of a SANAS accredited entity.
[38]. The effect of the foregoing, so the argument on behalf of Thru Rainbow
goes, inter alia per clause 6.2.4 of the SCC, is that Torinet ought to have been
excluded from this bid. Clause 6.2 of the SCC provides as follows: -
‘6.2 Phase 1: Pre -Qualification Evaluation Criteria
6.2.1 It is a condition of this bid that only the bidders having a B -BBEE status level
contributor 1 to 8 may respond to this bid.
6.2.2 Bidders are required to submit proof of B -BBEE status level of contributor. Proof
includes valid B -BBEE status level verification certificates or certified copies
thereof or a sworn affidavit signed by the EME/QSE representative and attested
by a Commissioner of Oaths, or BBBEE affidavit issued by Companies and
Intellectual Property Commission (CIPC).
6.2.3 … … …
6.2.4 Non-compliance with the requirement for pre -qualification will invalidate the bid .’
(Emphasis added).
[39]. Thru Rainbow interprets the foregoing clause as a ‘ mandatory tender
condition ’ requiring as part of the bid documents either a valid B -BBEE status
level certificate or an affidavit by the bidder. Non-compliance with this
mandatory condition, so the argument on behalf of Thru Rainbow goes, would
result in disqualification from the bid. I do not agree with this interpretation. In
my view, the mandatory pre -qualification condition provided for in the clause –
textually, contextually and purposively interpreted – is the requirement that the
bidder must have a B -BBEE status level contributor 1 t o 8. The submission of
the B -BBEE status level verification certificate and/or the sworn affidavit by the
bidder is not, in my view, a mandatory pre -qualification condition. In that regard,
the use of the phrase ‘Proof includes …’ is telling.
[40]. The factual position is that, at the relevant time, Torinet was a Level 1
B-BBEE contributor, as evidenced by the Exempted Micro Enterprise (EME)
16
B-BBEE certificate by an entity by the name of Inspired Mentors, which is, by all
accounts, not SANAS accredited. The fact, however, remains that Torinet, on
the papers, is a Level 1 B -BBEE contributor. This is also confirmed by the
‘sworn statement’ by Mr Smit, who, by all accounts, had every intention to sign
same under oath before the Commissioner of Oaths, who in fact signed the
statement on the understanding that same had been signed by Mr Smit. The
reason that he did not sign was clearly , indubitably and undisputably due to an
inadvertent oversight on his part . This means that Torinet complied with the
mandatory requirement envisaged by clause 6.2 of the SCC. Moreover,
National Treasury had accepted the proof provided by Torinet of its B -BBEE
status level of contributor.
[41]. I therefore conclude that the applicant’s third ground of review lacks
merit. It therefore follows that the concession on behalf of National Treasury to
the contrary is, in my view, misplaced. It is so, as contended by Torinet, that the
failure to provide a proper proof of B-BBEE status is in any event not fatal to the
award of the tender.
[42]. There is another reason why Thru Rainbow’s review ground based on
the alleged failure by Torinet to submit proof of its B -BBEE Contributor 1 level
should be rejected. And that reason is to be found in the ratio decidendi in
Westinghouse Electric Belgium SA v Eskom Holdings (SOC) Limited and
Another 2016 (3) S A 1 (SCA), in which the Supreme Court of Appeal (per
Lewis JA) held as follows: -
‘[35] Carelse J in the court a quo considered that the strategic considerations –
“were relevant considerations for the selection of the successful bidder. None of
the six criteria applied can be said to be irrelevant considerations. ”
She held thus that the BTC's decision was not arbitrary or capricious, and that the
tender process was procedurally fair. In this regard she relied on Lawrence Baxter
Administrative Law (Juta 1984) at 446:
“Administrative action based on formal or procedural defects is not always
invalid. Technicality in the law is not an end in itself. Legal validity is concerned
not with technical but also with substantial correctness. Substance should not
17
always be sacrificed to form; in special circumstances greater good might be
achieved by overlooking technical defects. ”
That is doubtless still good law. In AllPay Consolidated Investment Holdings (Pty) Ltd
and Others v Chief Executive Officer, South African Social Security Agency and Others
2013 (4) SA 557 (SCA) ([2013] ZASCA 29) (AllPay SCA) para 21 this court said:
“There will be few cases of any moment in which flaws in the process of public
procurement cannot be found, particularly where it is scrutinised intensely with
the objective of doing so. But a fair process does not demand perfection and not
every flaw is fatal. ”
It is, of course, only immaterial flaws (termed “inconsequential ” by that court) that may
be overlooked. The judgment in AllPay SCA was reversed on appeal to the
Constitutional Court (the principles formulated by that court are discussed below) but,
as I understand it, that principle was not attacked. ’
[43]. The point about this authority is simply that an immaterial technical or
formal defect in an administrative action does not invalidate such action. The
missing signature on the ‘sworn statement’ by Torinet is, in my view, nothing
more than a ‘formal or procedural defect’ in the process leading up to the award
of the tender, which can and should be overlooked in the interest of the greater
good. I therefore reiterate that this ground of review should be dismissed.
[44]. The aforegoing reasoning apply equally to Thru Rainbow’s fourth ground
of review, that being that Torinet omitted to comply with the mandatory
requirement that it was to submit an organogram. In short, this clearly was not a
mandatory requirement and non -compliance could not have disqualified Torinet.
[45]. There are further grounds of review such as that based on an alleged
material non -disclosure by Torinet in relation to its shareholding , as well as an
alleged misrepresentation with respect to local production of products to be
supplied pursuant to the award of the tender and the subsequent conclus ion of
the supply agreement. There is no merit in any of these grounds of review. The
simple point with regard to local production of products is that , in the bid under
review , National Treasury did not exercise the power / right to consider and give
preference points for locally produced goods. The products were not part of the
18
designated sector. The goods did not have to be locally produced and there
was accordingly no basis to disqualify the bidders based on their statements in
the bid.
[46]. Lastly, Thru Rainbow attacks the award of the tender to Torinet on the
basis of its alleged non -compliant tax status. Torinet contends that, whilst it is
so that at the time of the adjudication of the bid its tax affairs were not in order,
it was entitled as per a National Treasury Instruction Note to remedy their
status, which they subsequently did. This ground of review therefore falls to be
dismissed.
[47]. In all of the circumstances and for the reasons mentioned above,
National Treasury’s impugned decision to award the tender to Eresa Africa and
to Torinet is not invalid and therefore cannot and should not be declared to be
constitutionally invalid or set aside. In the final analysis, the procurement
process followed by National Treasury and the subsequent award of the tender
to Eresa Africa and Torinet were ‘in accordance with a system which is fair,
equitable, transparent, competitive and cost effective’. It therefore complied with
the letter and the spirit of Section 217(1) of the Constitution.
[48]. In light of these findings, it is not necessary to consider the appropriate
relief to be granted, based on what is ‘just and equitable’.
Third and Sixth Respondents’ Application to Strike
[49]. There is one last issue which I need to deal with and that relates to an
interlocutory application by Eresa Africa and Ms Ananthan to have struck out –
in terms of Uniform Rule of Court 6(15) – certain portions and a number of
paragraphs of Thru Rainbow’s founding and supplementary founding affidavit s.
[50]. The said Rule 6(15) application to strike out certain allegations in Thru
Rainbow’s founding papers is based on the grounds that such allegations are
‘scandalous, vexatious or irrelevant (and in particular being scandalous and
irrelevant where they are hearsay) ’. So, for example, Eresa Africa and Ms
19
Ananthan apply to have struck out t he statement in paragraph 16 of the
applicant’s founding affidavit in which it is stated that ‘… the applicant seeks to
set aside the decision of the first respondent to award Tender No: RT4 -2023 …
to the first respondent ’ on the grounds that such allegation is meaningless
nonsense and therefore both so scandalous and vexatious. This, as argued by
the respondents, was clearly a typographical error and Thru Rainbow could and
should have regarded it as such. I agree with tha t contention. More often than
not a common -sense approach to these types of issues should trump an overly
technical and unnecessarily rigid formalistic approach.
[51]. Other examples of allegations which Eresa Africa and Ms Ananthan
apply to have struck out are: (a) The following portion of paragraph 17.1 of the
founding affidavit : ‘Unlawful conduct on the part of the successful tenderers, ... ’
on the grounds that such allegation is simply vague and embarrassing ;
(b) Paragraph 18.2.5 on the grounds that it is irrelevant ; (c) Paragraph 18.2.6 on
the grounds that it is irrelevant ; (d) Paragraph 18.2.7 on the grounds that it is
irrelevant to the present appli cation; (e) Para graph 18.2.8 on the grounds that it
is irrelevant to the present appli cation ; and (f) Paragraph s 18.2.9,18.2.10 &
18.2.11 on the grounds that the allegations contained therein are irrelevant to
the present application.
[52]. I am of the view that the said application should fail. It is ill-advised and
should be dismissed. The simple point is that most, if not all of the allegations
which Eresa Africa and Ms Ananthan wish to have struck out, are averments
and conclusions disputed by them. The foregoing point is aptly demonstrated by
para 25.2 of the founding affidavit, which Eresa Africa and Ms Ananthan apply
to have struck out on the grounds that the hearsay allegation that Mr Johannes
Brummer, the fifth respondent is married to Ms Ernestia Brummer , the eighth
respondent when, as a matter of fact they are brother and sister and not
married. Similarly, they want p ara 26.1 , which reads that ‘ l am personally aware
of these relationships given that I operate in the same industry that Eresa
operates in ’, on the basis that it is ‘no more than an assertion of hearsay and is
20
vexatious in particular when it is factually wrong (and discourteous to say the
least) ’.
[53]. This is the general tenet of the application to strike out – if Eresa Africa
and Ms Ananthan dispute or disagree with an averment in the founding
affidavits of Thru Rainbow, they seek to have same struck out. As I have
already indicated, there is no merit in the said application. The respondents do
not make out a case to have those portions of the affidavits struck out.
[54]. Rule 6(15) reads as follows: -
‘(15) The court may on application order to be struck out from any affidavit any
matter which is scandalous, vexatious or irrelevant, with an appropriate order as to
costs, including costs as between attorney and client. The court may not grant the
application unless it is satisfied that the applicant will be prejudiced if the application is
not granted .’ (Emphasis added).
[55]. In Helen Suzman Foundation v President of the Republic of South Africa
and Others5, the Constitutional Court held as follows at paras 27 and 28: -
‘[27] Is the additional evidence scandalous, vexatious or irrelevant? Two
requirements must be met before a striking -out application can succeed: (i) the matter
sought to be struck out must be scandalous, vexatious or irrelevant; and (ii) the court
must be satisfied that if such a matter is not struck out the party seeking such relief
would be prejudiced .
‘[28] “Scandalous” allegations are those which may or may not be relevant but which
are so worded as to be abusive or defamatory; a 'vexatious' matter refers to allegations
which may or may not be relevant but are so worded as to convey an intention to
harass or annoy; and “irrelevant” allegations do not apply to the matter at hand and do
not contribute one way or the other to a decision of that matter. The test for determining
relevance is whether the evidence objected to is relevant to an issue in the litigation.’
(Emphasis added).
[56]. There is, on the basis of this Constitutional Court authority, another
reason why the third and sixth respondents ’ strike out application should fail,
5 Helen Suzman Foundation v President of the Republic of South Africa and Others 2015 (2) SA 1 (CC).
21
that being that the applicants have failed to demonstrate prejudice in the event
of the offending paragraphs not being struck out.
[57]. Accordingly, the application to strike out certain paragraphs falls to be
dismissed with costs,
Costs
[58]. The general rule in matters of costs is that the successful party should be
given his costs, and this rule should not be departed from except where there
are good grounds for doing so , such as misconduct on the part of the
successful party or other exceptional circumstances. See: Myers v Abramson6.
[59]. I can think of no reason why I should deviate from this general rule. The
applicant should therefore b e ordered to pay the costs of the opposed
application of all of the respondents .
Order
[60]. In the result, I make the following order:
(1) The third and sixth respondents ’ interlocutory application dated 24 June
2024 to strike out certain portions and certain paragraphs of the
applicant’s founding affidavit s, be and is hereby dismissed with costs.
(2) The third and sixth respondent s, jointly and severally, the one paying the
other to be absolved, shall pay the applicant ’s costs of the said
interlocutory application, including the costs of two Counsel (where so
employed) on scale ‘C’ of the applicable tariff provided for in the Uniform
Rules of Court .
(3) The applicant’s judicial review application is dismissed with costs .
(4) The applicant shall pay the first to tenth respondents’ costs of this
opposed application, such costs to include the costs consequent upon the
utilisation of two Counsel, one being Senior Counsel (where so employed),
6 Myers v Abrahamson 1951(3) SA 438 (C) at 455
22
on scale ‘C’ of the applicable tariff provided for in the Uniform Rules of
Court.
_______________________ ___
L R ADAMS
Judge of the High Court
Gauteng Division, Johannesburg
23
HEARD ON: 6 and 7 March 2025
JUDGMENT DATE: 14 April 2025 – Judgment handed
down electronically
FOR THE APPLICANT : Y Alli , with S Mohammed
INSTRUCTED BY: Hajibey -Bhyat Mayet & Stein Inc,
Illovo , Sandton
FOR THE FIRST AND SECOND
RESPONDENT S: Z Z Matebese SC, with N Sibeko
INSTRUCTED BY: The State Attorney, Pretoria
FOR THE THIRD AND SIXTH
RESPONDENT S: A W M Harcourt SC, with I Maharajh
INSTRUCTED BY: Shaun Pillay Attorneys Incorporated,
Durban
FOR THE FOURTH, FIFTH AND
EIGHTH RESPONDENT S: H P West
INSTRUCTED BY: W Duursema Attorneys,
Sunward Park, Boksburg
FOR THE SEVENTH, NINTH AND
TENTH RESPONDENT S: H P West
INSTRUCTED BY: Kruger & Okes Attorneys, Nigel