THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case no: 378/2025
In the matter between:
SMADA SECURITY SERVICES (PTY) LTD APPELLANT
and
THE DEPARTMENT OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT RESPONDENT
Neutral citation: Smada Security Services (Pty) Ltd v The Department of Justice and
Constitutional Development (378/2025) [ 2026] ZASCA 90 (24 June
2026)
Coram: NICHOLLS and KOEN JJA and DIPPENAAR, KOOVERJIE and MOOKI
AJJA
Heard: 11 May 2026
Delivered: This judgment was handed down electronically by circulation to the parties’
representatives by email, publication on the Supreme Court of Appeal website and
release to SAFLII. The date and time for hand -down of the judgment is deemed to be
11h00 on 24 June 2026.
Summary: Administrative law — judicial review of an award of a tender at the behest
of the successful tenderer — challenge based on an alleged material error of fact —
reliance on s 6(2)(e)(iii) and 6(2)(f)(ii)(cc) of the Promotion of Administrative Justice Act 3
of 2000 — whether the decision maker acted on the basis of a material mistake of fact —
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whether the appellant established a reviewable irregularity warranting the setting aside of
the award.
3
ORDER
On appeal from: Gauteng Division of the High Court, Pretoria (Holland-Muter J sitting as
the court of first instance):
The appeal is dismissed with costs.
JUDGMENT
Dippenaar AJA (Nicholls and Koen JJA, Koovertjie and Mooki AJJA concurring):
[1] This appeal concerns whether the Gauteng Division of the High Court , Pretoria
(the high court), erred in dismissing an application by the appellant, Smada Security
Services (Pty) Ltd, to review and set aside the award of a tender to it by the respondent,
the Department of Justice and Constitutional Development. The tender was for the
appointment of a service provider to render guarding, protective, and close protection
security services at the Department of Justice and Constitutional Development (DOJ &
CD), the Office of the Chief Justice (OCJ) and the National Prosecuting Authority (NPA)
(the securi ty services) for a period of 36 months in respect of Gauteng Province,
Cluster A.
[2] The central issue in the appeal is whether the respondent made a material error of
fact and thereby committed a reviewable error under s 6(2)(e)(iii) or s 6(2)(f)(ii)(cc) of the
Promotion of Administrative Justice Act 3 of 2000 (PAJA) in the award of the tender. The
high court held that no reviewable irregularity was established. The appeal is with leave
of the high court.
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[3] By the time the appeal was heard, various issues had become moot. The appellant
accordingly did not persist with all the relief sought in its notice of motion. It persisted with
an order upholding the appeal with costs and that the order of the high court be substituted
with an order in the following terms:
‘1. The decision of the respondent to award tender RB 2022O4; Appointment of Service
Provider(s) for the rendering of guarding, protective and close protection security services at the
Department of Justice and Constitutional Development (DOJ and CD), Office of the Chief Justice
(OCJ) and the National Prosecuting Authority (NPA) for a period of thirty -six (36) months in
respect of Gauteng Province Cluster A (“the Tender”) at the specific rates set out in the letter of
award dated 5 April 2023, is declared constitutionally invalid, reviewed and set aside;
2. The respondent is ordered to effect payment to the applicant for all security services rendered
in terms of the tender award based on the Illustrative Pricing Guide published by the Private
Security Industry Regulatory Authority (PSIRA);1
3. The respondent is ordered to pay the applicant’s costs, including the cost of counsel on
scale C.’
[4] The background facts are not contentious. On 26 October 2022, the respondent
published an invitation to tender for security services in all nine provinces. The larger
provinces, including Gauteng, were divided into two clusters , A and B . The appellant
submitted its bid documents, including pricing schedules for all nine provinces within the
bid period during November 2022.2 Of relevance are its bids for both Cluster A and Cluster
B, Gauteng. The appellant’s pricing schedules were not ‘referenced’ as required by the
bid specifications and were not clearly marked as Cluster A and Cluster B, Gauteng on
the hard copy bid submitted . In sequence , the pricing schedule pertaining to Cluster B
preceded the schedule for Cluster A in the b id. The s ame rates were applied by the
preceded the schedule for Cluster A in the b id. The s ame rates were applied by the
appellant to both pricing schedules, being the 2023 Illustrative Guide published by PSIRA,
on its version, as the tender would take effect during May 2023. The number of guards
for the respective clusters was different, with Cluster A being for 442 security officers and
Cluster B for 379 security officers.
1 In its notice of motion, it was articulated thus: ‘that the respondent be ordered to effect payment to the
applicant based on the tendered prices of the applicant, alternatively based on the Illustrative Pricing Guide
published by PSIRA for the duration of the period for which th e applicant renders security services to the
respondent.’
2 Dated 7 November 2022.
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[5] The bid request required the bids submitted by the tenderers to be inclusive of all
costs and to be strictly compliant with the conditions and specifications in the bid request.
Clause 1.9 of the special conditions of the contract provided: ‘The bid price must be
inclusive of all costs in terms of the PSIRA illustrative pricing schedule and in accordance
with areas as determined by the Sectorial Wage Determination guidelines as issued from
time to time by the Department of Labour, as well as the running costs , public liability,
insurance and equipment’. That wording is substantially mirrored in para 1.9 of the
evaluation criteria. The bid pricing schedules were to be marked per p rovince and per
cluster and be clearly referenced.
[6] A contract form SBD 7.2 had to be signed by the successful bidder once a bid was
awarded and accepted. Electronic copies of the bids were to be provided for verification
purposes. The wording ‘Cluster A’ and ‘Cluster B’ appeared in the electronic copy of the
pricing schedules provided by the appellant , albeit not in the same place nor at the
commencement of the schedules.
[7] The respondent evaluated the appellant ’s bid in the sequence in which it was
submitted. The pricing schedules were presented in the following sequence: the first
schedule was in the amount of R187 663 593.60, with the second schedule in the amount
of R230 239 471.81. The appellant submitted the most competitive bid in respect o f
Cluster A , Gauteng . On 5 April 2023, the respondent issued a letter of award to the
appellant in an amount of R187 663 593.60, made up a s follows: Guarding direct cost
(D1) R172 625 914.08 and Guarding indirect cost (D2) R15 037 679.52. Pricing for
optional services was also provided. The appellant was requested to sign the attached
contract form (SBD 7.2) which was already completed and return it to the respondent.
The appellant did so on 12 April 2023.
[8] In relevant part, the letter provided:
The appellant did so on 12 April 2023.
[8] In relevant part, the letter provided:
‘I … (Representative) hereby undertake to render services described to DOJ & CD in accordance
with the requirements and task directives bid specifications in DOJ & CD RFB 2022 04 at the
quoted price. My offer/s remains binding upon me and open for acceptance by the Purchaser
during the validity period indicated and calculated from the submission date of this proposal.
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1. The following documents shall be deemed to form and be read and construed as part of this
agreement:
Engagement documents, viz
-Bid documents;
- Tax clearance certificate;
-Pricing schedule(s); …
- Filled in task directive/proposal
- Preference claims for broad Based Black Economic Empowerment Status Level of contribution
in terms of the Preferential Procurement Regulations 2017;
- Declaration of interest;
- Declaration of bidder’s past SCM practices;
- Certificate of independent Bid Determination;
-Special Conditions of Contract; and
-General Conditions of Contract.
2. I confirm that I have satisfied myself as the correctness and validity of my proposal; that the
price(s) and rate(s) quoted cover all the services specified in the proposal documents; that the
price(s) and rate(s) cover all my obligations and I accept that any mistakes regarding price(s) and
rate(s) and calculations will be at my own risk.
3. I accept full responsibility for the proper execution and fulfilment(sic) of all obligations and
conditions devolving on me under this agreement as the principal liable for the due fulfilment of
this contract. . .’
[9] The appellant’s case is premised on the contention that, after signing the contract,
it discovered that the respondent had made a reviewable error in that its tender for Cluster
A was awarded to it at what was its bid price of R187 663 592.60 for Cluster B . It
contended that its bid for Cluster A should be for R230 239 471.81, as per the second
pricing schedule in the sequence of documents submitted. It maintains that the
respondent would have established this fact if it had properly scrutinised the bids or
clarified the position . According to the appellant , it signed the award in error and
approached th e respondent with a request ‘to rectify its error’ , namely to change the
award to a price of R230 239 471.81. The appellant accepts that the respondent acted
bona fide but contends that it was the appellant that made a mistake in accepting the
bona fide but contends that it was the appellant that made a mistake in accepting the
tender award.
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[10] The respondent refused to change the price, contending that it had not made any
error in evaluating the appellant’s bid in the sequence in which it was submitted and that
a valid contract had been concluded between the parties . According to the respondent,
any price adjustments after the award would fall foul of s 217 of the Constitution and be
prejudicial to the other tenderers. Its stance was that the appellant had been awarded the
tender for Cluster A at the price reflected in its bid, as its price was the most competitive.
At the price of R230 239 471.81, the appellant’s bid would not have been the most
competitive, and the appellant would not have been awarded the tender.
[11] Thus, the battlelines were drawn. After various unsuccessful attempts at resolving
the impasse, the appellant instituted the review proceedings. On advice, it elected not to
repudiate the contract in view of a potential damages claim by the respondent, but to
pursue a review on the basis that the appellant was prejudiced by the award . It would
make substantial losses if forced to provide services at the awarded price and would not
be able to pay the employees’ remuneration at the relevant PSIRA rates. Ultimately, the
appellant rendered security services to the respondent until the contract expired during
April 2026 at the rates in the award, as agreed between the parties, as an interim measure
pending determination of the review.
[12] The central issue is whether the respondent committed a reviewable irregularity in
awarding the tender to the appellant at the prices it did. The respondent, as an organ of
state, is required to evaluate tenders strictly in accordance with the terms of the invitation
to tender or bid request. Section 217 of the Constitution requires an organ of state to
contract for goods or services ‘in accordance with a system which is fair, equitable,
transparent, competitive and cost-effective’. An acceptable tender must, under s 1 of the
transparent, competitive and cost-effective’. An acceptable tender must, under s 1 of the
Preferential Procurement Policy Framework Act 5 of 2000 comply in all respects with the
specifications and conditions of tender set out in the tender.3
3 The Minister of Social Development and Others v Phoenix Cash and Carry PMB CC 2007 JDR 0181
(SCA); [2007] ZASCA 26; [2007] 3 All SA 115 (SCA); 2007 (9) BCLR 982 (SCA) para 1.
8
[13] It was common cause between the parties that the decision to award the tender
constituted administrative action as defined in PAJA.4 The proper approach to reviews of
this nature is set out in Allpay Consolidated Investment Holdings (Pty) Ltd and Others v
Chief Executive Officer, South African Social Security Agency and Others (Allpay)5 as
follows:
‘Under the Constitution there is no reason to conflate procedure and merit. The proper approach
is to establish, factually, whether an irregularity occurred . Then the irregularity must be legally
evaluated to determine whether it amounts to a ground of review under PAJA. Th is legal
evaluation must, where appropriate, take into account the materiality of any deviance from legal
requirements, by linking the question of compliance to the purpose of the provision, before
concluding that a review ground under PAJA has been established.’6
[14] Following Allpay, the enquiry on review is directed at the lawfulness of the process,
not the correctness of the outcom e.7 It involves the standard of rationality , not
correctness. What must be considered is whether the decision is rationally connected to
the information before the decision-maker.8
[15] In relying on s 6(2) (e)(iii) of PAJA, 9 the appellant subm itted that either relevant
considerations were not taken into account or irrelevant considerations were considered,
in that the respondent committed a material error of fact in not correctly identifying the
pricing schedules, given that they were not marked, and in failing to clarify the position. It
relied on the fact that Cluster A required significantly more personnel than Cluster B, that
the sites were different , and that the pricing schedules were objectively verifiable at
compliant PSIRA rates. The appellant submitted that, at the very least, the respondent
was obliged to clarify the position with it.
4 Grey’s Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others 2005 (6) SA 313
(SCA); [2005] 3 All SA 33 (SCA); 2005 (10) BCLR 931 (SCA) para 23.
5 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African
Social Security Agency and Others [2013] ZACC 42; 2014 (1) SA 604 (CC) .
6 Allpay para 28.
7 Ibid para 42.
8 Bato Star Fishing (Pty) Ltd v Minister of Environm ental Affairs and Tourism and Others 2004 (4) SA 490
(CC) para 45.
9 Section 6(2)(e) in relevant part provides: ‘A court or tribunal has the power to judicially review an
administrative action if (e) the action was taken – (iii) because irrelevant considerations were taken into
account or relevant considerations were not considered;’
9
[16] In South Durban Community Environmental Alliance v MEC for Economic
Development, Tourism and Environmental Affairs, KwaZulu-Natal Provincial Government
and Another, this Court held that:
‘[A] court may interfere where a functionary exercises a competence to decide facts but in doing
so fails to get the facts right in rendering a decis ion, provided the facts are material, were
established, and meet a threshold of objective verifiability. That is to say, an error as to material
facts that are not objectively contestable is a reviewable error . . .’10
Where a functionary enjoys the power to make findings of fact, mistake as a ground of
review is thus confined to situations in which the mistake is made as to an existing
material fact, established in the sense of being uncontentious and objectively verifiable.11
[17] On the facts, the appellant did not establish these requirements. It further did not
establish that any relevant considerations were not taken into account or that irrelevant
considerations were taken into account. The appellant’s bid was evaluated in the format
and sequence in which the bid documents, including the pricing schedules , were
submitted. The respondent was entitled to consider the bid in the sequence in which the
pricing schedules were submitted. Moreover, the appellant’s submissions disregard that
the bid was for a composite price, inclusive of direct and indirect costs and profit. It is not
for the re spondent to interrogate the commercial rationale of any particular bid or to
analyse its contents in minute detail to consider whether it includes the applicable PSIRA
rates. It was further not required of t he respondent to compare the hard copy of the bid
documents with the electronic copy, as this was not a bid requirement.
[18] As held by this Court in Millenium Waste Management v Chairperson Tender
Board, Limpopo Province,12 allowing post-submission clarifications would undermine the
Board, Limpopo Province,12 allowing post-submission clarifications would undermine the
10 South Durban Community Environmental Alliance v MEC for Economic Development, Tourism and
Environmental Affairs, KwaZulu-Natal Provincial Government and An other [2020] ZASCA 39; [2020] 2 All
SA 713 (SCA); 2020 (7) BCLR 789 (SCA); 2020 (4) SA 453(SCA) para 23.
See also quoting with approval Airports Company South Africa v Tswelokgotso Trading Enterprises CC
[2018] ZAGPJHC 476; 2019 (1) SA 204 (GJ) para 12.
11 Dumani v Nair and Another [2012] ZASCA 196; 2013 (2) SA 274 (SCA); [2013] 2 All SA 125 (SCA) paras
32-33.
12 Millenium Waste Management (Pty) Ltd v Chairperson , Tender Board: Limpopo Province and Others
[2007] ZASCA 165; 2008 (2) SA 481 (SCA); [2008] 2 All SA 145 SCA.
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competitiveness and fairness of the tender process. The submission that there was an y
obligation on the respondent to clarify the pricing schedules with the appellant, thus lacks
merit. If there was a ny factual error, it was made by the appellant by not properly
referencing and identifying its pricing schedules in its bid, exacerbated by its conduct in
concluding the contract in its terms.
[19] The appellant’s contention that the conclusion of the contract (SBD 7.2) is
irrelevant does not pass muster. It is common cause that such contract was concluded
as part of the finalisation of the award. In terms thereof the appellant confirmed the award
in its terms, acknowledged that it would perform the security services at the rates and
amounts awarded and acknowledged that it bore the risk pertaining to any mistakes
regarding prices, rates and calculations. It cannot avoid these undisputed consequences
by attacking the award.
[20] In oral argument it was contended that if the respondent had used the correct facts,
Cluster A would not have been awarded to the appellant and that its bid should have been
found not to be responsive, and thus reviewable on that basis . However, that case was
not made out in the appellant’s papers. It accordingly does not require consideration. The
appellant cannot be permitted to make out a whole new case in argument on appeal , to
which the respondent was not afforded an opportunity to respond.
[21] In relying on s 6(2)(f)(ii)(cc) of PAJA ,13 the appellant contended that the
administrative action was not rationally connected to the information be fore the
respondent, in that the respondent did not consider that the amounts reflected on the
pricing schedule did not meet the minimum requirements of the PSIRA rates as specified
in the bid requirements.
[22] The high-water mark of the appellant’s submission s during the hearing was that,
had the respondent properly evaluated the pricing schedules, it would have established
had the respondent properly evaluated the pricing schedules, it would have established
that the direct cost component, referring to the wages of the security officers, did not meet
13 Involving that ‘the action itself - (f) is not rationally connected to (cc) the information before the
administrator.’
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the PSIRA guidelines as required by the bid calculations. Thus, so t he argument goes ,
there is no rational connection between the respondent’s conduct and the purpose of the
award. This argument disregards that the appellant was required to provide a composite
price in terms of the bid requirements, specifically clause 1.9 of the special conditions of
contract, inclusive of all costs . It has already been pointed out that the respondent was
not obliged to approach the appellant to verify the pricing schedules.
[23] As previously stated, t he appellant failed to establish what ex isting fact the
respondent was mistaken about. There was no indication in the bid documents submitted
to the respondent that the appellant intended to bid a price of R230 239 471.81 for Cluster
A, Gauteng. Neither was there any indication that the applicable PSIRA rates were not
met in the bid price . The appellant’s professed subjective intention to submit the higher
price for Cluster A was only disclosed after the award was made and accepted . The
conduct of the appellant at the time in submitting the tender in the format and
chronological sequence which it did, and in confirming the award of the tender by signing
the contract form SBD 7.2 , militates against the existence of any factual mistake at the
relevant time. An undisclosed intention on the part of the appellant cannot be elevated to
a material mistake of fact on the part of the respondent.
[24] In assessing the conduct of the respondent and the lawfulness and fairness of the
procurement process, it must be concluded that it was compliant with the statutory
requirements of s 217 of the Constitution and the requirements of the bid request, viewed
in light of their purpose.14 The respondent’s conduct in evaluating the bid as submitted in
a competitive process , awarding the bid to the most competitive bid , and its refusal to
engage the appellant after the award to alter the price, cannot be faulted. The appellant
engage the appellant after the award to alter the price, cannot be faulted. The appellant
has not established any irrationality on the part of the respondent. This ground of review
must fail.
[25] In summary, the appellant failed to make out a case for review on the grounds
relied on and failed to establish a material mistake of fact which is uncontentious and
verifiable. The contractual issues between the parties were not before this Court for
14 Allpay para 30.
12
determination. It follows that the conclusion and order of the high court is unassailable
and that the appeal must fail. Costs follow the result. Although the costs of two counsel
were sought, in my view only the costs of one counsel is justified.
[26] Even if there had been a reviewable error , the appellant would not have been
entitled to the relief sought. The agreement has run its course and terminated by effluxion
of t ime on 8 April 2026. The just and equitable re lief sought by the appellant under
s172(1)(b) of the Constitution is inconsistent with relief aimed at setting aside the award
of the tender. That relief would amount to the enforcement of the agreement at a higher
price. Such relief is not what the section envisages; it is neither restitutionary nor justifiably
compensatory, as explained by this Court in Central Energy Fund SOC and Another v
Venus Rays Trade (Pty) Ltd and Others.15
[27] In the result, the following order is granted:
The appeal is dismissed with costs.
___________________
E F DIPPENAAR
ACTING JUDGE OF APPEAL
15 Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others 2022 (5) SA 56
(SCA); [2022] ZASCA 54; 2022 (5) SA 56 (SCA) paras 36-43.
13
Appearances
For the Appellant: A P J Els SC
Instructed by Jansen Van Rensburg & Partners Inc.
Symington De Kok Attorneys,
Bloemfontein
For the Respondent: R Ramawela SC with E N Gaisa
Instructed by: State Attorney, Pretoria
State Attorney, Bloemfontein.