THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 340/2024
In the matter between:
MAXIMUM PROFIT RECOVERY (PTY) LTD APPELLANT
and
NALEDI LOCAL MUNICIPALITY FIRST RESPONDENT
TRIPLE M ADVISORY SERVICES (PTY) LTD SECOND RESPONDENT
SEGAPO MODISENYANE THIRD RESPONDENT
Neutral citation: Maximum Profit Recovery (Pty) Ltd v Naledi Local Municipality &
Others (340/2024) [2025] ZASCA 83 (10 June 2025)
Coram: HUGHES, KATHREE -SETILOANE, SMITH and KEIGHTLEY JJA and
HENNEY AJA
Heard : 21 May 2025
Delivered : This judgment was handed down electronically to circulation to the
parties’ representatives by email, publication on the Supreme Court of Appeal website
and released to SAFLII. The date and time for hand -down of the judgment is deemed
to be 11h00 on 10 Ju ne 2025.
Summary: Section 16(2)( a)(i) of the Superior Courts Act 10 of 2013 (the Superior
Courts Act) – whether in the interest of justice to hear moot appeal – factors to be
considered – s 16(2)( a)(ii) of the Superior Courts Act – no exceptional circumstances
present to justify hearing of appeal to determine question of costs only – appeal
dismissed for mootness.
2
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from : North West Division of the High Court, Mahikeng, (Djaje AJP sitting
as court of first instance):
1 The appeal is dismissed.
2 The parties shall bear their own costs.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
Smith JA (Hughes, Kathree -Setiloane and Keightley JJA and Henney AJA
concurring):
Introduction
[1] This appeal concerns the validity of a contract for the provision of Value Added
Tax (VAT) recovery services, which the first respondent, the Naledi Local Municipality
(the municipality), awarded to the second respondent, Triple M Advisory Services (Pty)
Ltd (Triple M), in April 2022. The contract was awarded for a period of three years,
commencing on 5 April 2022 and terminating on 4 April 2025.
[2] On 22 April 2022, the appellant, Maximum Profit Recovery Services (Pty) Ltd
(Maximum Profit), launched an application in the North West Division of the High
Court, Mahikeng (the high court), for an order reviewing and setting aside the contract.
It con tended that the tender procedure adopted by the municipality in awarding the
impugned contract to Triple M was unfair, untransparent and uncompetitive. The
contention thus advanced is that the award, consequently, did not comply with the
prescripts of s 21 7 of the Constitution, the Preferential Procurement Policy Framework
Act 5 of 2000 (the PPPFA) or the municipality’s Supply Chain Management
Regulations.
[3] The high court (per Djaje J), in its judgment delivered on 15 September 2023,
found that Maximum Profit had failed to establish that the award was reviewable on
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any of the contended grounds. It consequently dismissed the application with costs.
Maximum Profit appeals against that judgment with the leave of the high court.
[4] Both Maximum Profit and Triple M are duly registered companies which
specialise in financial advice and revenue recovery services. Triple M was not involved
in either the proceedings before the high court or in this appeal. The municipality is a
local muni cipality, established in terms of the Local Government: Municipal Structures
Act 117 of 1998. The third respondent, Mr Modisenyane Segapo (Mr Segapo), is cited
in his official capacity as the municipality’s municipal manager. I refer to the
municipality an d Mr Segapo collectively as the respondents, where the context so
requires.
[5] The following issues require consideration:
(a) Whether the appeal has become moot because the impugned contract had
terminated on 4 April 2025;
(b) If so, whether the appeal should nevertheless be heard in the interests of
justice; and
(c) If the question in (b) is answered in the affirmative, then was the procurement
procedure followed by the municipality in awarding the contract to Triple M fair,
transparent and competitive.
The facts
[6] The circumstances which resulted in the award of the contract to Triple M are
briefly as follows. On 23 June 2021, the municipality published a tender notice inviting
service providers to submit bids for appointment to a panel that would provide divers e
financial services, including VAT reviews and auditing services, to the municipality for
a period of three years. By the closing date, namely 7 July 2021, sixteen bids had been
submitted, including those of Maximum Profit and Triple M.
[7] All the bidders were notified on 6 September 2021 that their bids had been
successful and they were required to accept their appointments in writing. Only
Maximum Profit, Triple M and seven other bidders accepted their appointments.
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[8] On 23 March 2022, the municipality invited four of the panellists (including Triple
M) to quote for VAT recovery services. It is common cause that Maximum Profit was
not invited to submit a quotation, nor was it informed of the municipality’s intention to
appoint one of the panellists to render those services exclusively.
[9] The letter inviting Triple M to submit proposals stipulated the applicable rate on
which its quotation should be based. As stated earlier, the municipality subsequently
awarded the contract to Triple M for a period of three years, which terminated on
4 April 2025.
[10] Although Maximum Profit launched the application because it was aggrieved
by the manner in which Triple M was appointed to render the VAT advisory services,
its notice of motion was ambiguous regarding the decision it sought to impugn. The
order sough t in its notice of motion was for the review and setting aside of ‘the decision
to award Tender NLM2021 -009A: Provision of Panel for the Financial Services for 3
years (‘the tender’) to the second respondent [Triple M].’ The municipality was,
understandabl y, under the impression that the attack was directed at its initial decision
to appoint the panel and only filed the rule 53 record pertaining to that decision.
[11] Consequently, the rule 53 record in respect of the decision to appoint Triple M
for the provision of VAT recovery services was not before the high court, and nor is it
before this Court. I explain the significance of this omission below.
[12] On 16 April 2025, the respondents’ attorneys, being of the view that the appeal
had become moot, wrote to Maximum Profit’s attorneys proposing that they withdraw
the appeal and tender costs. They explained that the offer was made in the belief that
they bore the duty, where an appeal has become moot, to make a sensible settlement
proposal to contribute to the ‘efficient use of judicial resources’.
[13] Maximum Profit’s attorneys replied to that letter on 16 May 2025, taking issue
with the assertion that the appeal had become moot. Its view was that because the
contract had been extended beyond the expiry date, the dispute between the parties
remaine d extant. Consequently, they contended that the relief sought would have
practical effect.
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The parties’ submissions
[14] In its founding papers, Maximum Profit asserted that the tender documents
envisaged that the municipality would invite all the panellists to submit quotations as
and when it required financial advisory services. This would have ensured that a
service provider was appointed pursuant to a fair, transparent and competitive
procurement process.
[15] The municipality’s decision to invite only four panellists to submit proposals,
without allowing others the same opportunity, was consequently unfair, irregular and
contrary to the provisions of the s 217 of the Constitution, the PPPFA and the
municip ality’s Supply Chain Management Regulations. This rendered the process
procedurally unfair and reviewable under s 6(2)( c)1 of the Promotion of Administrative
Justice Act 3 of 2000.
[16] Maximum Profit further submitted that the municipality committed a material
procedural irregularity by prescribing the rate on which Triple M’s quotation should be
based. The award of the contract to Triple M, so argued Maximum Profit, was
accordingly unlawful, invalid and fell to be reviewed and set aside.
[17] In argument before us, counsel for Maximum Profit conceded that the issue
whether the contract had been extended was not properly before us. He submitted,
however, that it is nevertheless in the interest of justice that the appeal should be heard
as there are conflicting judgments2 on the issue of whether an organ of state, which
has appointed a panel of service providers pursuant to a public procurement process,
is entitled or has the discretion, to invite only certain members of the panel to submit
quotations for specific services .
1 Section 6(2)( c) of PAJA provides that a court has the power to judicially review an administrative action
if the action was procedurally unfair.
2 On 23 May 2025 the Kwazulu -Natal High Court, Durban handed down judgement in Maximum Profit
Recovery (Pty) Ltd v Umkhanyakude Distrcit Municipality and Another (D12061/2024) [2025] ZAKZDHC
32 (23 May 2025), where Maximum Profit also challenged an award by the municipality to a competitor
in substantially similar circumstances. In that matter, the municipality also contended that it had a
discretion to invite only certain members of a panel to submit quotations. The high court reviewed and
set aside the impugned contract based on its finding that the procedure adopted by the municipality did
not accord with the provisions of s 217 of the Constitution and the PPPFA.
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[18] More importantly, so submitted Maximum Profit, it is in the interests of justice
for this Court to determine the appeal on the basis, which is common cause, that the
municipality had readvertised the tender, and has again appointed a panel of service
providers, which include Triple M and Maximum Profit. Absent guidance from this
Court, Maximum Profit asserts, the respondents will act on the view, endorsed by the
high court, that they have a discretion to invite only selected panellists to submit
quotat ions without following due process. The point made was that the respondents
were likely, once again, to commit the same irregularity. For this submission, Maximum
Profit relied on the judgment of the Western Cape High Court (per Rogers J) in WWF
South Africa v Minister of Agriculture, Forestry and Fisheries and Another3 (WWF
South Africa ). In that matter, the applicant challenged the determination of the total
allowable catch for the 2017/18 season under the Marine Living Resources Act 18 of
1998. The respondents argued that the matter had become moot because the 2017/18
season had alread y closed. Rogers J, however, found that the order sought by the
applicant would have practical effect because ‘a previous year’s determination may be
relevant to the succeeding year’s determination.’4
[19] In addition, Maximum Profit argued that monies paid to Triple M pursuant to an
invalid contract may constitute irregular or unauthorised spending in terms of the Local
Government: Municipal Finance Management Act 56 of 2003 (the Municipal Finance
Mana gement Act). An order by this Court declaring the contract invalid would oblige
Triple M to repay all monies paid to it by the municipality. The order sought in its notice
of motion would consequently also have practical effect in this regard.
[20] The respondents took issue with those contentions and asserted that the
appeal has been rendered moot by the fact that the contract awarded to Triple M had
expired on 4 April 2025. They argued that any order granted by this Court will therefore
have n o practical effect.
[21] The respondents further argued that the process the municipality followed in
appointing Triple M, in any event, complied with the applicable legislation and its own
3 WWF South Africa v Minister of Agriculture, Forestry and Fisheries and Another [2018] ZAWCHC 127;
[2018] 4 All SA 889 (WCC); 2019 (2) SA 403 (WCC).
4 Ibid para 71.
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Supply Chain Management Regulations. The municipal regulations sanction the two -
stage bidding process, which resulted in Triple M’s appointment. The municipality was
entitled, in the first stage, to invite and consider proposals on ‘conceptual design’ and
performance specifications. It was only during the second stage that it was required to
consider final technical proposals and priced bids.
[22] While in their answering affidavit the respondents contended that the
municipality had a discretion to invite only certain members of the panel to submit
quotations, in argument before us, their counsel conceded that the exclusion of the
other panelli sts from that process was irregular. Counsel argued, however, that the
irregularity was not material in the context of the award, particularly because the tender
was based on a two -stage bidding process.
Analysis and discussion
[23] I will deal first with the mootness point, as it may well be dispositive of the
appeal. In my view, the appeal is self -evidently moot because the impugned contract
terminated on 4 April 2025. Maximum Profit conceded this. The question which then
remai ns for consideration is whether this Court should, nevertheless, hear the appeal
in the interests of justice.
[24] Section 16(2)( a)(i) of the Superior Courts Act 10 of 2013 (the Superior Courts
Act) provides that where issues, which fall for decision in an appeal, are of such a
nature that the order sought will have no practical effect or result, the court hearing the
appeal may dism iss it on this ground alone. In Normandien Farms (Pty) Ltd v South
African Agency for Promotion of Petroleum Exploration and Exploitation SOC Ltd and
Others5, the Constitutional Court held that a court of appeal, when exercising its
discretion, in the interests of justice, to hear an appeal that has become moot, must
have regard, among others, to the following factors: whether the order sought will have
any pr actical effect for the parties or others; the importance of the matter; the
complexity of the issues; the fullness or otherwise of arguments advanced; and the
need to resolve conflicting judgments.
5 Normandien Farms (Pty) Ltd v South African Agency for Promotion of Petroleum Exp loration and
Explo itation SOC Ltd and Another [2020] ZACC 5; 2020 (6) BCLR 748 (CC) ; 2020 (4) SA 409 (CC)
para 50.
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[25] I find that none of these factors are present in this appeal. First, it is not the
function of courts to provide legal advice to litigants. Maximum Profit’s reliance on
WWF South Africa for the contention that the order sought will have practical effect
because a pronouncement by this Court will provide guidance to the municipality in
respect of future awards, is misplaced.
[26] WWF South Africa is distinguishable on the facts. In that matter Rogers J found
that the case raised ‘important questions about alleged non -compliance by the DDG
[Deputy Director General] with binding constitutional and statutory objectives and
principles in determining t he TAC [total allowable catch] of a highly depleted
resource.’6 The present case is fact specific and does not implicate any constitutional
issues or the rule of law.
[27] Second, the public procurement of goods and services is extensively regulated
by the Constitution, the PPPFA and – in this case – also by the municipality’s own
Supply Chain Management Regulations. Moreover, our courts have over the years
carefully conside red and pronounced on almost every facet of procurement law. The
applicable legal principles are thus well established. I therefore find that it will not serve
any practical purpose for this Court to pronounce on issues that will effectively only
confirm e stablished jurisprudence.
[28] Third, the existence of conflicting judgments on a disputed issue is but one of
the factors a court must consider in deciding whether it is in the interests of justice to
hear a moot appeal.7 I am, however, mindful of the Constitutional Court’s dictum in
Normandien Farms that ‘[w]here there are two conflicting judgments by different
courts, especially where an appeal court’s outcome has binding implications for future
matters, it weighs in favour of entertaining a moot matter’.8
[29] In this appeal there are compelling reasons why that consideration must yield
to other factors, which overwhelmingly militate against the appeal being heard. These
are that although the tender was readvertised and a new panel has been appointed
6 Ibid para 78.
7 Normandien Farms fn 2 para 50.
8 Ibid para 49.
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for a period of three years, the municipality has conceded, rightly so, that it does not
have the discretion to invite only certain panel members to quote for specific services.
More importantly, the full rule 53 record pertaining to the impugned decision is not
before us and we do not know why, or by what process, the four panellists were
selected to submit quotations or how Triple M ultimately was selected. This means that
there is no proper factual basis to enable this Court to pronounce authoritatively on
the disputed issue.
[30] Fourth, there is the question whether the setting aside of the contract would
have financial consequences for Triple M and the municipality because, Maximum
Profit submitted, the contract payments would then be categorised as unauthorised
and wasteful expenditure under the provisions of the Municipal Finance Management
Act. Maximum Profit contended that this engaged this Court’s constitutional powers to
grant just and equitable relief in appropriate circumstances and was an additional
reason why the ap peal should be considered. This issue was not, however, properly
canvassed in this appeal. It was not raised in the founding papers, nor were any facts
alleged that would enable this Court to make any sensible determination on what just
and equitable relie f should follow in the event of the appeal being heard.
[31] In making these findings, I am fortified by this Court’s judgment in Laser
Transport Group (Pty) Ltd and Another v Elliot Mobility (Pty) Ltd and Another . 9 In that
matter, this Court dismissed an appeal on a point of mootness although there were
still three months of the contract period left. For the abovementioned reasons, I find
that the appeal is moot and that there are no compelling circumstances which r equire
the matter to be heard in the interests of justice.
Costs and order
[32] Regarding the issue of costs, I am mindful of the injunction in s 16(2)( a)(ii) of
the Superior Courts Act, which provides that ‘[s]ave under exceptional circumstances,
the question of whether the decision would have no practical effect or result is to be
9 Laser Transport Group (Pty) Ltd and Another v Elliot Mobility (Pty) Ltd (835/2018) [2019] ZASCA 140
(1 October 2019) .
10
determined without reference to any consideration of costs.’ For the reasons stated
above, I find that there are no such exceptional circumstances present in this matter.
[33] Maximum Profit was timeously alerted to the fact that the respondents would
raise the issue of mootness at the hearing of the appeal. Apart from the letter of 16
April 2025, the respondents had raised the issue squarely in their heads of argument,
filed in September 2024. Maximum Profit nonetheless persisted with the appeal, thus
assuming the risk of an adverse costs order in the event of the appeal being dismissed
for mootness.
[34] The respondents are, however, not blameless. They conceded that it was
irregular for the municipality to invite only four of the panellists to submit quotations.
Therefore, although they argued that the irregularity was not material and did not
vitiate the award of the contact to Triple M, Maximum Profit’s challenge was not without
merit. If that concession had been made earlier, the proceedings may well have taken
a different course. The appropriate order would therefore be for the parties to bear
their own costs.
[35] In the result I make the following order:
1 The appeal is dismissed.
2 The parties shall bear their own costs.
J E SMITH
JUDGE OF APPEAL
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Appearances
For the appellant: APJ Els SC and AA Basson
Instructed by Albert Hibbert Attorneys, Pretoria
Webbers Attorneys, Bloemfontein
For the 1st & 3rd respondents: T Moretlwe and B Nthambeleni
Instructed by: Modiboa Attorneys, Mahikeng
McIntyre Van der Post Attorneys,
Bloemfontein.