IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA)
CASE NO.: 735A/2025
Reportable Yes/No
In the matter between:
MANYOBO GROUP Applicant
and
WINNIE MADIKIZELA-MANDELA LOCAL First Respondent
MUNICIPALITY
THE MUNICIPAL MANAGER Second Respondent
NIKHWE GROUP Third Respondent
JUDGMENT
Cengani- Mbakaza AJ
Introduction
[1] By way of notice of motion, filed of record and served to the respondents,
the applicant seeks an order in the following terms:
1. That the decision taken by the first respondent to award the tender to the
third respondent be reviewed and set aside for being procedurally unfair
and/unreasonable, alternatively on the grounds of legality;
2. That any contract pursuant to the award of the tender be declared to be
of no force and effect and be set aside;
3. That the tender process/ bidding be re -evaluated so that the procedure
for the consideration and subsequent award of the tender be started afresh;
4. Costs.
[2] The respondents oppose the application.
The parties
[3] The applicant is Manyobo Group CC (“Manyobo”), a juristic person, a
close corporation duly incorporated and registered in terms of the Close
Corporation Act 69 of 1984.
[4] The first respondent is Winnie Madikizela -Mandela Local Municipality
(“the Municipality”), an organ of the state in terms of s 2(a) of the Municipal
System’s Act 32 of 2000, a category B municipality as envisaged under s 155
(1) of the Constitution 1, regulated in accordance with Municipal Structures Act
117 of 1998.
[5] The second respondent is the municipal manager of Winnie Madikizela -
Mandela Local Municipality (“the municipal manager”), an accounting officer
duly empowered to exercise administrative functions on behalf of the first
respondent.
1 The Constitution of the Republic of South Africa, 1996
[6] The third respondent is Nikhwe Group (“Nikhwe”), a company and a
juristic person incorporated in accordance with the company laws of the
Republic of South Africa.
The salient facts
[7] In his papers, the municipal manager explains that dump sites are poorly
managed by inexperienced staff. They are generally characterised by
indiscriminately disposed heap of uncovered waste. Also common are open
burning, stagnant pools of polluted water, infestation by rats, scavenging by
domestic animals and rag -picking through the wast e by scavenging
communities.
[8] This has a major impact not only on the scavengers but also on the
employees as well. There are major risks and impacts of waste disposal sites
and ground water sources, rendering them unfit for human consumption.
[9] Because of the risks associated with this nuisance, inter alia, the
Municipality outsources this service. This is because it does not have employees
responsible for addressing this hazard on a daily basis. For this reason, the bid
advertisement was crucial to addressing the issue.
[10] It is undisputed that the name of the project in the matter at hand is
“Maintenance Ext.3 Disposal Site’ under contract number WMM -LM
22/10/25/02 EDS” (the impugned bid). The Municipality advertised the
impugned ‘Request for bid’ (RFB) as follows:
‘Bid ( sic) are hereby invited from suitably qualified and accredited service providers
who are interested to submit their tender responses for the above -mentioned project for
Winnie-Madikizela Mandela Local Municipality.
…Bids should sco re a minimum point of 70% on the functionality evaluation in order
to be considered for further evaluation.
The bids will be evaluated on the 80/20 or 90/10 scoring system.’
[11] The RFB also listed circumstances that would render the bids non -
responsive due to non -compliance. These are: A completed original document
issued by the Municipality, a copy of Entity Registration Documents, certified
ID copy(ies) of Director(s) (not older than 3 months), proof of CSD registration,
SARS Valid PIN Printout, BID documents MBD, MBD04, MBD6.1, MBD6.2,
MBD6.4, MBD8 and MBD9.
[12] Furthermore, the RFB specified that failure to submit billing clearing
certificate or statement of municipality ac counts would render the bid non -
responsive. Moreover, it was a mandatory requirement that in case of a joint
venture, an original valid tax compliance document be submitted. The
evaluation criteria was 80 or 90= Price, 20 or 10=Specific goals as MBD 6.1.
The minimum threshold for the local content of the project was 100%.
[13] On 8 June 2023, before the impugned bid was advertised, Manyobo was
awarded a contract for a period of 18 months pursuant to a different contract
titled “Rehabilitation and Maintenanc e for the Dumping site tender”, under a
different contract number. Manyobo’ s appointment was rate -based, with a
VAT-inclusive appointment.
[14] Manyobo accepted the contract on 21 June 2023. On 04 December 2023,
it was advised that the contract was exten ded for a further three months. The
project, as per extension granted, would end on 28 February 2025.
[15] While its contract was still in existence, Manyobo submitted its full
tender documents in respect of the impugned bid. On 17 February 2025, the
impugned bid was awarded to Nikhwe. On the same day, Manyobo lodged an
object to the tender with the Municipality but received no response.
[16] Manyobo contends that since it had already successfully completed a
previous tender in the same specific field with the same entity, the Municipality
ought to have awarded the tender to it, not Nikhwe.
[17] It argues that it was not only a prospective bidder, but had also already
been awarded the project and there was no notice of termination. Therefore, so
it is conte nded, there was a breach of the Constitutional imperatives of the
tender in relation to procurement processes.
[18] In contrast, the case for the Municipality and Nikhwe hinges on the fact
that Manyobo failed to submit a SARS TAX PIN printout, which would have
enabled the Municipality to verify its tax compliance directly with SARS.
Briefly, both the Municipality and Nikhwe deny that there was a breach of the
Constitutional imperatives.
[19] Nikhwe adds that Manyobo failed to comply with a basic requirement of
the tender and has itself to blame for the exclusion. Amongst other points, it is
avers that Manyobo claimed its VAT number was registered to a different
entity, according to SARS. Furthermore, the particular plant and equipment
Manyobo claimed ownership of was registered in the name of a different entity.
Issues
[20] The issues for determination are whether the disqualification of Manyobo
in the tender process was “procedurally unfair”, “unlawful” and “unreasonable”
and whether Manyobo ought to have been appointed as a successful tenderer.
The legal framework and discussion
[21] This application is launched in terms of PAJA. Manyobo seeks an
alternative order contending that even if PAJA were held inapplicable, the
decision remains reviewable under the principle of legality.
[22] The Constitutional Court (CC) in Fedsure Life Assurance Ltd v Greater
Johannesburg TMC 2 affirmed that the principle of legality requires that all
public power be lawful, rational and procedurally fair.
[23] The Gijima3 principle sets out a clear distinction between the reviews in
terms of PAJA and those contemplated under the principle of l egality. In its
interpretation, the CC concluded that s 33 of the Constitution created rights
enjoyed only to private persons, and that the bearer of the obligations under that
section is the state.4
[24] The CC added that, given such interpretation, the language of s 6 of the
PAJA does not extend to an organ of the state seeking to review its own
administrative action. In short, this means that PAJA would not be applicable in
self-review matters. Those reviews would be dealt with under the principle of
legality.5
[25] To recapitulate on this point, s 33 of the Constitution guarantees
everyone’s right to just administrative action that is “lawful”, “reasonable” and
“procedurally fair”. It is by now axiomatic that s 33 of the Constitutio n is
further implemented through s 6 of PAJA which empowers the persons,
including the juristic persons affected by an administrative action to approach
the court for a judicial review.
[26] Upon being satisfied, on the basis of facts and the law, that th e
administrative action was “unreasonable”, “unlawful” and “procedurally
2 1999 (1) SA 374 (CC); see also Pharmaceutical Manufacturers Association of SA in re: Ex part President of
the RSA 2000 (2) SA 674 (CC).
3 State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited (CCT254/16) [2017]
ZACC 40; 2018 (2) BCLR 240 (CC); 2018 (2) SA 23 (CC) (14 November 2017).
4 Supra para 29.
5 Supra paras 30-31.
unfair”, the court is required to consider and apply the remedies provided for in
terms of s 8 of PAJA, where necessary.
[27] A multitude of cases has pronounced that the solicitation, evaluation and
award of public tenders constitute “administrative action” within the meaning
of s 33 of the Constitution.6 In this instance, considering the fact the contentious
issues hinge, inter alia, on the procedural fairness of the administrative action
involving a competitive bid, PAJA is applicable.
[28] The provisions of s 217 of the Constitution which serve as a guide in
casu, provide that when embarking on procurement processes, the organs of t he
state must do so on a fair, transparent, equitable, competitive and cost -effective
basis.
[29] The Preferential Procurement Policy Framework Act 5 (PPPFA) and its
subordinate regulations7 aims to realise the Constitutional imperatives of s 217.
Amongst other things, the regulations were created to establish pre -qualifying
criteria for procurement processes.
The parties’ legal submissions
[30] Ms Brauns, Manyobo’s counsel, listed various grounds of review under
several key themes. She emphasised the provisions of ss 6(2)(e)(iii) and
6(2)(f)(ii)(cc) of PAJA arguing that the Municipality prioritised formalism over
substance and failed to apply the concept of materiality.
6 Transnet Ltd v Goodman Brothers (Pty)Ltd 2001 (1) SA 853 (SCA) para 39, para 9 ; see also Logbro
Properties CC v Bedderson NO 2003 (2) SA 460 (SCA) and Metro Projects CC v Klerksdorp Local
Municipality 2004(1) SA 16 (SCA).
7 Act 5 of 2000.
8 The Preferential Procurement Regulations, 2022.
[31] In amplification, she argued that the Municipality treated the missing
SARS TAX PIN printout as a critical defect. She highlighted that by so doing,
the Municipality applied an overly rigid approach in this regard.
[32] Counsel referenced to Millennium Waste Management (Pty) Ltd v
Chairperson, Tender Board: Limpopo P rovince (Millenium Waste
Management)9 arguing that trial defects should not lead to disqualification
especially when compliance can be verified without unfairly disadvantaging
other bidders.
[33] The second issue concerns the evaluation criteria. Counsel argued that the
Municipality misapplied the functionality criteria and overlooked key
considerations. The third point is that the Municipality did not engage with
Manyobo, denying it a chance to address concerns internally which goes against
the procedura l fairness principle. While the internal remedies do not negate
judicial review, so it was argued, they underscore the Municipality’s duty to act
fairly in the procurement processes.
[34] Ms Mashiya, counsel for the Municipality and the second respondent a s
well as Mr Barker for Nikhwe, presented similar arguments. They contended
that the National Treasurer’s circulars are not binding and therefore there is no
proof that the Municipality’s council had adopted circular 90 as referenced by
Manyobo’s counsel.
[35] In addition, so it was contended, the regulations require tax compliance
checks via SARS, so the National Treasurer’s confirmation does not meet these
requirements.
9 2008 (2) SA 481 (SCA), also Chairperson: Standing Tender Committee v JFE Sapela Electronics (Pty) Ltd
2008 (2) SA 638 (SCA); Logbro Properties CC v Bedderson NO 2003 (2) SA 460 (SCA) and Metro Projects
CC v Klerksdorp Local Municipality [2002] ZASCA 135; 2004 (1) SA 16 (SCA).
[36] Both counsel referenced to the SCA decision in Dr JS Moroka Local
Municipality v Betrum (Pty) Limited (Dr JS Moroka Local Municipality) 10,
arguing that the facts in this case are similar to those in Dr JS Moroka Local
Municipality. They also pointed out that the judgments Manyobo’s counsel
relied on were decided before the Dr JS Moroka Local Municipality judgment.
Analysis
[37] Until the SCA decision in Millenium Waste Management 11, a tender was
only considered acceptable if it meets the requirements set out in the RFB or
tender specifications. This accorded with the definition of ‘acceptable tender’ as
provided for in terms of s 1(i) of the PPPFA which provides:
‘…any tender which, in all respects complies with the specifications and conditions of tender
as set out in the tender document.’
[38] The SCA in Chairperson: Standing Tende r Committee v JFE Sapela
Electronics (Pty) Ltd 12, expressed its interpretation on the meaning of an
‘acceptable tender’ in the PPPFA and held that:
‘[t]he definition of the acceptable tender in the PPPFA must be construed against the
backdrop of the syst em envisaged by s 217(1) of the Constitution, namely one which is
“fair”, “transparent”, “competitive” and “cost effective”. In otherwords whether the tender in
all respects complies with the specification and conditions set out in the “contract
documents” must be judged against those values.’
[39] The SCA in Millenium Waste Management 13 adopted this approach.
Briefly, the case concerned the award of a tender by the Department of Health
and the second respondent (Social Development) for the services relating to
disposal of health waste material in Limpopo Province. The unsuccessful
10 [2013] ZASCA 186; [2014] 1 All SA 545 (SCA).
11 Supra fn 9.
12 Ibid.
13 Ibid.
tenderer asserted that its tender should not have been disqualified solely on the
basis of its failure to endorse a signature on the last page of one of the required
documents.
[40] The document referred to was a declaration of interest. Despite the lack
of a signature on the last page of the document, the unsuccessful tenderer had
initialled its page of the relevant document. The SCA reviewed the tender and
held that the Committee ought to have exercised its discretion and condoned the
unsuccessful tenderer’s omission. The SCA added that such condonation would
have served the public interest in that it would have facilitated a fair
competition amongst the bidders.
[41] Reverting to the facts of this case, I do not agree with Manyobo’s counsel
that disqualifying the tender due to the omission of a SARS TAX PIN printout
is a trivial defect. It is common cause that tax compliance has been long -
standing requirements in terms of the procurement processes.
[42] Paper-based tax clearance certificates were phased out i n 2015 and
replaced by an electronic system where taxpayers including bidders are
expected to provide a PIN to authorise third parties to verify tax compliance.
The Supply Chain Management framework, specifically regulation 43, prohibits
procurement from bidders who fail to submit proof of tax compliance.
[43] Pursuant to the Public Finance Management Act 15 and Local
Government: Municipal Finance Management Act 16, accounting officers in all
public entities are required to ensure that their institutions h ave effective,
efficient and transparent systems for managing financial risk. These include
financial risks associated with tax non -compliance which can lead to
reputational damage and cash flow issues due to unexpected tax liabilities.
15 Sec 38, Act 1 of 1999.
16 Section 62, Act 56 of 2003.
[44] It is therefor e evident that the SARS TAX PIN is a mandatory
requirement, serving to minimise these risks and those associated with the
fraudulent tax compliant documents. While it is true that the Central Supplier
Data Base (CSD) is one of the methods used for verifyin g tax compliance of a
bidder, there is no evidence before this court to confirm that the Municipality’s
system was integrated with MunSoft and/or the National Treasury system and
SARS. On that basis, any argument that the Municipality’s RFBs were skewed
lacks merit.
[45] Furthermore, the argument positing that the CSD was sufficient for tax
verification lacks merit. Instead, this ought to have been submitted along with
SARS TAX PIN printout as reflected in the RFB. In my view, the failure to
submit a SARS TAX PIN printout could not have been easily condoned, as such
condonation would have potentially compromised the fairness and transparency
principles of the tender process.
[46] It is noteworthy therefore that the facts of this case and those of
Millenium Management Waste17 are distinguishable. Instead, the present case is
on all fours with Dr JR Maroka Local Municipality 18 where the imperative
nature of tax verification was endorsed.
[47] Most importantly, it must be acknowledged that it is not within t he
purview of this court to prescribe the terms of the RFB, as such authority has
been delegated to the Municipality and this court cannot usurp the functions of
the Municipality through a judicial decree. 19 Consequently, this application
must fail.
17 Supra fn 9.
18 Supra fn 9.
19 Dr Moroka Local Municipality fn 9 above.
Costs
[48] This court finds no reason to deviate from the general rule which
specifically entails that the winning party is entitled to costs.
Order
[49] Resultantly, the following order shall issue:
1. The application is dismissed.
2. The applicant shall pay costs of this application on Scale “B” as contemplated
under Rule 67A read with Rule 69 of the Uniform Rules of Court. This shall
include the costs of two counsel so employed.
______________________
N CENGANI-MBAKAZA
ACTING JUDGE OF THE HIGH COURT
APPEARANCES:
Counsel for the applicant : Adv LR Brauns
Instructed by : NETTELTONS
Makhanda
Counsel for the 1st to 2nd respondents: Adv Z Mashiya
Instructed by : KB MABANGA INC.
East London
c/o Yokwana Attorneys
Makhanda
Counsel for the 3rd respondent : Adv Barker
Instructed by : Cost Yeats Attorneys
Makhanda
Heard on : 06 November 2025
Judgment Delivered on : 03 March 2026