THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case no: 511/04
In the matter between:
THE CHAIRPERSON: STANDING TENDER
COMMITTEE FIRST APPELLANT
DEPARTMENT OF PUBLIC WORKS SECOND APPELLANT
THE DIRECTOR GENERAL:
DEPARTMENT OF PUBLIC WORKS THIRD APPELLANT
THE MINISTER OF PUBLIC WORKS FOURTH APPELLANT
and
JFE SAPELA ELECTRONICS (PTY) LTD FIRST RESPONDENT
JFE POWER DISTRIBUTION (PTY) LTD SECOND RESPONDENT
t/a JFE RETICULATION
NOLITHA ELECTRICAL & CONSTRUCTION
(PTY) LTD THIRD RESPONDENT
THE STATE TENDER BOARD FOURTH RESPONDENT
_________________________________________________________________________
Coram : SCOTT, CAMERON, MTHIYANE, LEWIS JJA et MAYA AJA
Date of hearing: 2 SEPTEMBER 2005
Date of delivery: 26 SEPTEMBER 2005
Summary: Review of decisions to award tenders for repair and maintenance work at prisons
- decisions invalid at time they were made - by reason of effluxion of time and considerations
of practicality relief not granted - successful appellants ordered to pay costs.
_________________________________________________________________________
JUDGMENT
_________________________________________________________________________
SCOTT JA/…
2
SCOTT JA:
[1] Nolitha Electrical and Construction (Pty) Ltd (‘Nolitha’) was the
successful tenderer for three separate contracts with the Department of
Public Works (‘DPW’) for work to be executed at the Drakenstein,
Worcester and Helderstroom prisons res pectively in the Western Cape.
The work related to fac ilities such as steam and hot water generation,
electrical infrastructure, kitchen and laundry equipment and the like. It
comprised both a repair and mainte nance component. The first
respondent, JFE Sapela Electronics (P ty) Ltd (‘Sapela’) unsuccessfully
tendered for the Worcester and He lderstroom contracts, while the
second respondent, JFE Power Distri bution (Pty) Ltd, trading as JFE
Reticulation, (‘Reticulation’), unsuccessfully tendered for the Drakenstein
contract. Sapela and Reticulation challenged the award of the three
tenders to Nolitha. The challenge was upheld in the Cape High Court by
H J Erasmus J who, in addition to other relief, set aside the award of the
tenders to Nolitha and declared the contracts enter ed into between
Nolitha and the DPW to be null and void. The present appeal is with the
leave of the court a quo.
[2] The first appellant is the chairperson of the DPW’s Standing
Tender Committee (‘STC’) which functions at the DPW’s head office.
The tenders in the present case were both called for and awarded by the
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STC. The DPW, which is the second appellant, also has standing tender
committees at each of its regional offi ces. The significance of these will
become apparent later. The standing tender committees all exercise
powers delegated to them by the State Tender Board established in
terms of the State Tender Board Act 86 of 1968. The State Tender
Board, the Director General of the DP W, the Minister of Public Works
and Nolitha were all cited as respondents in the court below but took no
part in the proceedings.
[3] Before turning to the complain ts levelled at the award of the
tenders to Nolitha it is necessary to describe briefly the tender process
that is adopted in the case of contracts of the type in question. A
consulting engineer is appointed for each contract. The function of the
consultant is first to design the works and prepare the necessary
documents, including specifications, drawings, and a schedule of
quantities for inclusion in the tende r documents. Once the tenders are
opened, which takes place in public, they are scrutinized by the
consultant to ensure they are comple te and comply with the formal
requirements of the tender documents. He also checks the priced
schedule of quantities and corrects any calculation errors that he finds.
Thereafter he prepares a draft report (there may be more than one) in
which he sets out his ana lysis and assessment of the tenders as well as
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his recommendations as to which should be successful. The draft is
discussed with what was referred to in the papers as the ‘private’ project
manager and ultimately finalized in the form of a report by the
‘departmental’ project manager which is signed by him and which
contains a recommendation to the STC as to which of the tenders ought
to be accepted. The pr ivate project manager in the case of all three
contracts was Africon Engineering Int ernational (Pty) Ltd (‘Africon’). This
company was not appointed on an ad hoc basis. It has an on-going
relationship with the DPW and has fu lfilled the function of a private
project manager for more than 20 years.
[4] It is convenient to begin with the Drakenstein tender. The relevant
facts on which Reticulation based its attack on the award of the tender to
Nolitha can be shortly stated. The repair work related to 11 installations.
Installation A was headed ‘Steam Generation’. Nolitha quoted a total of
R146 664,00 for this part of the work. The amount was made up of a
mere R4 164 for the actual repair work and R142 500 for the remainder
of the items such as operating a nd maintenance manuals, statutory
inspections and tests, logging, training and recording. The amount of R4
164 was clearly not market related. An examination of Nolitha’s priced
schedule of quantities revealed that it had quoted a nominal amount of
R2 for each and every item of actual repair work for this installation,
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hence a total of only R4 164,00. By contrast, Reticulation’s quotation for
the repair work was R455 719,78. The difference between the two ie
R451 555,78, exceeded the amount by which Nolitha’s overall tender
exceeded that of Reticulation. Re ticulation’s tender was the second
lowest. It also gained, after Nolitha, the second highest number of points
calculated in terms of a points system to which I shall refer later.
[5] The reason for Nolitha tendering as it did was readily apparent.
The Drakenstein tender was advertised in the Government Tender
Bulletin on 12 September 2003. The closing date for tenders was 8
October 2003. Unbeknown to the ST C and the DPW’s head office, the
DPW’s regional tender committee in Cape Town had advertised for
tenders on 23 May 2003 for work involving the replacement of the steam
operated boilers at the Drakenstein pris on with electric colorifiers. The
local tender was awarded to Bambama Construction (Pty) Ltd which
ultimately executed the work. The consequence of the Bambama
contract was to render the repair work itemized in the schedule of
quantities unnecessary. Nolitha was obvio usly aware of this and for this
reason tendered in the manner it did.
[6] The consulting engineer for the Drakenstein contract (and the
Worcester contract) was Mashura Consulting (Pty) Ltd. Mr Aslam Ogier,
a director, was the engineer actually involved in the project. He prepared
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several drafts for the report which the departmental project manager
would ultimately be required to sign and submit to the STC. This report,
as previously mentioned, contain ed the recommendation as to which
tender ought to be accepted. Ogier’s drafts were all submitted to Africon
(the ‘private’ project manager) for discussion. Significantly, in all but one
of these he recommended that Reticulation, and not Nolitha, be awarded
the contract. He clearly had some knowledge of the earlier tender. In his
initial drafts he referred to Nolitha’s ‘abnormally low’ price for the repair
section of Installation A and commented:
‘In our opinion the low rates are misleading or the tenderer used low rates to justify a
low installation cost based on the speculation that electr ical heaters will replace the
entire steam installation.’
Nonetheless the final draft which became the report dated 4 December
2003 and submitted to the STC by the departmental project manager
recommended that Nolitha’s tender be accepted on the basis that it was
the lowest and gained the highest number of points. The report
contained no reference to the abnormally low tender price for Installation
A or to the overlapping of tenders. No explanation was given for this
omission save that the acceptanc e of Nolitha’s tender was regarded as
not involving an ‘unacceptable financial risk’ for the DPW and there were
‘insufficient grounds to out motivate Nolitha’.
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[7] Reticulation’s complaint was that Nolitha’s tender was
unacceptable and should have been rejected. It contended that by failing
properly to price a section of t he work Nolitha had gained an unfair
advantage over other te nderers and had thereby also prejudiced the
State. But before dealing with the legal principles involved it is
convenient to set out briefly the ci rcumstances of the Worcester tender
which was the subject of a similar complaint by Sapela.
[8] In its Worcester tender Nolitha quoted a mere R1 606 for section 3
of Installation A. The section was headed ‘Hot Water Generation’.
Sapela quoted R203 964,68 for this se ction. As in the case of the
Drakenstein tender, the amount of R1 606 was clearly not market
related. The priced schedule of quant ities for the section shows that
Nolitha quoted a nominal price of R11 for each and every item save for
two. The lowest tender was that of M & D Engineering but its tender was
excluded for want of completion. Nolitha’s was the second lowest and
Sapela’s the third lowest.
[9] Once again the reason for Nolitha quoting nominal prices for the
section in question was apparent. The closing date for the Worcester
tenders was 10 September 2003. Here to o, unbeknown to the STC and
the DPW head office, the DPW’s regional office on 5 September 2003
advertised for tenders for work invo lving the installation of a new hot
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water service at the Worcester pri son. This tender was subsequently
also granted to Nolitha. The effect of the latter tender was to render the
repair work under section 3 unnecessary . Nolitha was obviously aware
of the regional office’s tender.
[10] Again the consulting engineer had knowledge of the earlier tender
and appreciated the reason for the no minal amounts quoted in Nolitha’s
tender. The two draft rep orts prepared by Ogier contained the following
statement.
‘Abnormally low rates; lower than market related rates appear in Installation A – Hot
Water Generation Systems. Average price fo r this installation is R194 000.00
(tenders 4 & 5) whilst Nolitha’ s price is R1 606.00. We ar e of the opinion that the
reason for these low rates is due to the tenderer’s speculation that some of these
installations shall fall away or be part of a different PWD contract in the near future.’
As in the case of the Drakenstein tender, the final report submitted to the
STC contained no reference to th e abnormally low tender price for
section 3 of Installation A or to the overlapping of tenders. Sapela’s
complaint was similar to that of Reticulation, although in this instance the
amount by which Sapela’s tender for section 3 exceeded that of Nolitha
did not exceed the difference between the two overall tenders.
[11] The starting point is the Constitution. Section 217 reads:
‘(1) When an organ of state in the national, provincial or local sphere of
government, or any other instit ution identified in national legislation, contracts for
9
goods or services, it must do so in accordance with a system which is fair, equitable,
transparent, competitive and cost-effective.
(2) Subsection (1) does not prevent the organs of state or institutions referred to
in that subsection from implementing a procurement policy providing for -
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of persons,
disadvantaged by unfair discrimination.
(3) National legislation mu st prescribe a framework within which the policy
referred to in subsection (2) must be implemented.’
The national legislation contempl ated in ss(3) is the Preferential
Procurement Policy Framework Act 5 of 2000 Act (‘the Preferential Act’).
In terms of s 2 an organ of state is r equired to determine its ‘preferential
procurement policy’ and implement it in a framework embodying a
‘preference point system’. That system, in turn, is to distinguish between
contracts having a Rand value above or below a prescribed amount. In
the upper category a maximum of 10 points may be allocated for specific
goals relating in effect to categor ies of historica lly disadvantaged
persons, ‘provided that the lowest acceptable tender scores 90 points for
price’. In the case of the lower ca tegory 20 points may be allocated for
the specific goals referred to above, ‘provided that the lowest acceptable
tender scores 80 points for price’. In terms of s 2(1)(f) the contract is to
be awarded to the tenderer who score s the highest points, unless
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certain specified criteria justify the award to anoth er tenderer. These
criteria are not relevant to the prese nt inquiry. The reason is that for a
tender to be eligible for consideration, ie for the allocation of points, it
must in terms of s 2(1) be an ‘acceptable tender’. An ‘acceptable tender’
in turn is defined in s 1 as meaning:
‘any tender which, in all respects, complies with the specificat ions and conditions of
tender as set out in the tender document.’
It is well established that the legi slature and executive in all spheres are
constrained by the principle t hat they may exercise no power and
perform no function beyond those conf erred upon them by law. This is
the doctrine of legality. See Pharmaceutical Manufacturers Association
of SA : in re ex parte President of the Republic of South Africa 2000 (2)
SA 674 (CC) paras 17 and 50; Gerber v Member of the Executive
Council for Development Planning & Local Government, Gauteng 2003
(2) SA 344 (SCA) para 35. The accept ance by an organ of state of a
tender which is not ‘acceptable’ wi thin the meaning of the Preferential
Act is therefore an invalid act and falls to be set aside. In other words,
the requirement of acceptability is a threshold requirement. This was
common cause between the parties.
[12] The STC clearly awarded all th ree contracts on the basis of a
points system as envisage d in s 2 of the Preferential Act. All three fell
11
into the upper category. There was, however, a dispute on the papers as
to whether a document entitled ‘Conditions Pertaining to Targeted
Procurement’ produced by the res pondents constituted the DPW’s
‘preferential procurement policy’ and, if so, what weight was to be
attributed to it. In terms of claus e 4.1 of the document employers are
required, prior to a detailed evaluati on of tenders, to determine whether
each tender is inter alia a ‘responsive tender’. A fairly comprehensive
definition of that expression then follo ws. Its object, no doubt, is to give
content to the concept of ‘acceptability’. But it is the latter that is the
statutory, and therefore the decisi ve, threshold requirement. In the
circumstances, it is unnecessary to resolve the dispute between the
parties as to the relevance of, or th e weight to be attributed to, the
document. What must be decided is whether Nolitha’s Drakenstein and
Worcester tenders were ‘acceptable tenders’ within the meaning of the
Preferential Act.
[13] Counsel for the appe llant submitted in this court that the failure on
the part of a tenderer to price each and every item of the schedule of
quantities did not amount to non-compliance ‘with the specifications and
conditions of tender as set out in the tender documents’ within the
meaning of the definition of ‘acc eptable tender’. In support of this
contention he referred to various provisions in the tender documents and
12
in particular to clause 6 to the preambl e to the schedule of quantities. It
reads:
‘An amount or rate shall be entered against each item in the Schedule of Quantities,
whether or not quantities ar e stated. An item against wh ich no amount or rate is
entered will be considered to be covered by the other amounts or rates in the
Schedule.
Should the Tenderer group a number of items together and tender one lump sum for
such group of items, the single tendered lump sum shall appl y to that group of items
and not to each individual item , or should he indicate ag ainst any item that full
compensation for such item has been included in another it em, the rate for the item
included in another item shall be deemed to be nil.’
In my view this provision and the others to which counsel referred do not
assist in justifying the award to Nolit ha. It is no doubt true that the failure
to price each and every item in the schedule of quantities would not
necessarily be fatal to the tender. But this is not the issue. Clause 7.1 of
the Conditions of Tender reads:
‘We undertake to submit our Bills of Quant ities with all items duly priced, extended
and cast in ink together with our tender and the full set of tender documents and
drawings.’
What is required is that the tender re late to the entire work itemized in
the schedule of quantities. This mu ch is clear from clause 6 to the
preamble; an item not priced will be considered to be covered by the
other items. But this is not the basis upon which Nolitha tendered. It
13
tendered nominal amounts for items cov ering entire sections of the work
and it did so on the understanding that the work would not be required.
[14] The definition of ‘acceptable t ender’ in the Preferential Act must be
construed against the background of the system envisaged by s 217(1)
of the Constitution, namely one which is ‘fair, equitable, transparent,
competitive and effective’. In othe r words, whether ‘the tender in all
respects complies with the specifications and conditions of tender as set
out in the contract documents’ must be judged against these values.
Merely because each item is pric ed does not mean that there was
proper compliance. What the Preferential Act does not permit a tenderer
to do is in effect omit from his tender a whole section of the work
itemized in the bill of schedules and required to be performed. A
tenderer who is permitted to do th is has an unfair advantage over
competing tenderers who base their tenders on the premise, inherent in
the tender documents, that all the work itemized in the schedule of
quantities is to be performed. Whether work may later be omitted is of
no consequence. What is imperative is that all tenderers tender for the
same thing. By tendering on the basis that certain work will not be
required a tenderer is able to reduce his price to the detriment of other
tenderers, and almost certainly also to the detriment of the public purse
since he is likely to load other items to the detriment of the employer.
14
Such a tender offends eac h of the core values which s 217 (1) of the
Constitution seeks to uphold. It would not be a tender which is
‘acceptable’ within the meaning of the Preferential Act.
[14] It follows that in my view both Nolitha’s Drakenstein tender and
Worcester tender were unacceptable and should have been rejected. It
follows too that the award of those contracts to Nolitha was invalid. In
view of this conclusion it is unnec essary to deal with a further ground
upon which Reticulation challenged the validity of the Drakenstein
tender.
[16] I turn now to the Helderstroom tender. When the tenders were
opened in public it appeared that Sa pela’s tender was the lowest. But
after the tenders had been exami ned by the consulting engineer,
Nolitha’s tender was reduced by no less than some R900 000 as a result
of what was said to be ‘arithmetical errors’. The effect was to make
Nolitha’s tender the lowest. Not surpri singly this caused some disquiet
amongst the other tenderers. However, the main thru st of the attack on
the award of the contract to Nolitha related to something different.
[17] It appears that Nolitha misunders tood two items in the schedule of
quantities (items 100.2 and 100.3) requiring the maintenance of a call
centre. It quoted for the maintenance of the call centre itself instead of
the cost of being in a position to receive and respond to call-outs for the
15
repair of electrical and me chanical installations at the prison. The error
was reflected in the amounts quoted f or these two items. While Sapela
and another tenderer, M & D Engi neering, quoted under R20 000 for
both items, Nolitha quoted R1 693 000 for the one item and R63 000 for
the other.
[18] In four draft reports dated res pectively 17 October, 30 October and
31 October 2003 (two are dated 31 October) the consulting engineer, B
N Buziba & Associates Cape CC, recommended that Sapela’s tender,
being the second lowest, be accept ed. In the drafts the engineer
referred to the unbalanced nature of the Nolitha tender and expressed
the view that the acceptance of th e tender would involve ‘a substantial
financial risk to the Department’. On 6 November 2003 the engineer
wrote to Africon expressing the view that Nolitha had ‘misunderstood the
meaning of items 100.2 and 100.3’ and that it ha d ‘under-quoted on
most of the remaining maintenance items for Installations A to P’. The
following day, 7 November 2003, the engineer wrote to Nolitha regarding
these items and suggested that:
‘. . . these two maintenance items be m easured monthly as a weighted average
(according to value) of the achieved scores on all the installations.’
Nolitha’s acceptance of the suggest ion was subsequently (but on the
same day) recorded in writing and signed on behalf of Nolitha on the
16
same letter. The final report dated 17 November 2003 addressed by the
departmental project manager to the chairman of the STC
recommended that Nolitha’s tender be accepted. It contained no
reference to the comments adverse to Nolitha in the engineer’s earlier
drafts.
[19] It is well established that a tender process implemented by an
organ of state is an ‘administrative ac tion’ within the meaning of the
Promotion of Administrative Justic e Act 3 of 2000 (‘PAJA’). See eg
Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460
(SCA) para 5 and the cases there cit ed. As observed by Cameron JA
‘This entitled the appellant . . . to a lawful and procedurally fair process .
. . .’ What is fair administrative process ‘depends on the circumstances
of each case’ (s 3(2)(a) of PAJA). In Metro Projects CC v Klerksdorp
Local Municipality 2004 (1) SA 16 (SCA) para 13 Conradie JA said:
‘It may in given circumstances be fair to ask a tenderer to explain an ambiguity in its
tender; it may be fair to a llow a tenderer to correct an obvious mistake; it may,
particularly in a complex tender, be fair to ask for clarification or details required for
its proper evaluation. Whatever is done may not c ause the process to lose the
attribute of fairness or, in the local government sphere, the attributes of
transparency, competitiveness and cost-effectiveness.’
In the present case, what in effect occurred is that Nolitha’s tender, with
the latter’s written consent, was adjusted by the reallocation of an
17
amount over-quoted for one, or rather two items, to ‘most of the
remaining maintenance items for Installations A - P’ for which Nolitha
had under-quoted. The effect was apparently to convert a tender from
one regarded by the engineer as unbalanced and a financial risk to one
which was acceptable. But the offer made by Nolitha, as embodied in its
tender, was not the one ultimately ac cepted. What was accepted was in
truth an offer that was made on 7 November 2003, some two months
after the closing date for tenders. In my view this was enough to strip the
tender process of the element of fairness which requires the equal
evaluation of tenders. It follows that the acceptance of the Nolitha tender
and the award of the cont ract were correctly held by the court a quo to
be reviewable.
[20] However, that is not the end of the matter. Had the application in
the court below been adjudicate d when proceedings were launched
Sapela and Reticulation (‘the respo ndents’) would no doubt have been
entitled to the relief they sought. But given the inevitable effluxion of time
and the extent of the work performed by Nolit ha between the launching
of proceedings and the granting of judgment, the question that arises is
whether the relief sought, and granted, was capable of practical
implementation. It is necessary firs t to trace briefly the events between
the award of the tenders and the judgment of the court a quo.
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[21] The Helderstroom tender wa s awarded to Nolitha in early
December 2003. The Drakenstein and Worcester tenders were awarded
on 19 January 2004 and early F ebruary 2004 respectively. On 8
December 2003 Sapela wrote to the Ministry of Public Works expressing
its concern about the adjudication of tenders and se eking an urgent
meeting. There was no response. On 15 January 2004 Reticulation
wrote to the Department of National Treasury in which it raised similar
concerns regarding the tender process. The National Treasury
responded in a letter dated 20 January 2004 and enquired whether
Reticulation had asked the DPW for reasons for the award to Nolitha.
Reticulation replied the same day, saying that without sight of the
tenders themselves the reasons would be of little assistance. Also on 20
January 2004 the respondents lodged a complaint with the Public
Protector. The latter responded on 22 January and suggested that the
respondents request the DPW to suspend the award of further contracts
pending receipt of information to enab le them to consider their options.
On 26 January Sapela requested reas ons from the DPW for the
decisions not to award the respond ents the Helderstroom, Worcester
and Drakenstein tenders. In addition it sought information and
documents, such as engineers’ reports, to enable it to evaluate those
reasons. Also on 26 January it addressed another letter to DPW
19
requesting that the award of the Drak enstein prison be suspended until
the requested information had been received. On 2 February 2004 the
respondents received three letters from the DPW. The reasons given for
the acceptance of Nolitha’s tenders c onsisted of little more than a bald
statement that Nolitha had scored the highest number of points. The
information and copies of the do cuments requested were refused on the
grounds of privilege. In the third le tter, dated 2 February 2004, the DPW
stated that the request to suspend the handing over of the Drakenstein
site to Nolitha could not be considered. At that stage the respondents
consulted attorneys. On 4 February the latter wrote to the DPW
requesting information in terms of the Promotion of Access to
Information Act 2 of 2000 regarding the award of the tenders to Nolitha.
A response was received on 26 F ebruary 2004 but the information
furnished was insufficient to enable the respondents to evaluate their
position. The next day, 27 February 2004, the respondents launched the
review proceedings which are the subject of this appeal.
[22] The application was brought as a matter of urgency and was set
down for hearing on 4 March 2004. As the matter was opposed, it could
not be heard on that day an d by agreement it was referred to the semi-
urgent roll for hearing on 24 May 2004. The first and second
respondents (now first and second a ppellants) were ordered to dispatch
20
‘the records of the proceedings’ to the Registrar on or before 23 March
2004. On 6 April 2004 the respondents gave notice of their intention to
apply on 24 May 2004 for an order restraining the DPW from giving
access to any new installations to perform work pending the final
determination of the review proceedings. In the event the interdict was
not sought.
[23] Judgment was delivered on 12 July 2004. Erasmus J observed
that by the time the application was heard in May 2004 much of the
repair work pursuant to the respect ive contracts would already have
been done. But, he said, the mainte nance component of the contracts
remained and the disruptive effect of declaring the contracts null and
void could ‘be mitigated by suspending the coming into operation of the
orders made so as to enable the parties to make appropriate
arrangements for phasing out of work on the tenders, and completing
particular facets of work which are in complete’. Whether this was at all
practical was not considered.
[24] When the appellants applied to the court a quo for leave to appeal
the respondents countered with an application for an order in terms of
Rule 49 (11) to the effect that pending the appeal the orders made in the
court’s judgment of 12 July 2004 were not to be suspended but were to
be put into effect as from 1 February 2005. The reason for the latter date
21
was that by then all the repair work would have been completed. What
the respondents had in mind was th at the maintenance component be
separated from the repair componen t. The application was, however,
refused. Erasmus J pointed out that both components had been the
subject of a single tender and were to an extent inextricably interrelated;
for example, the 12 month guarante e furnished by Nolitha covered all
equipment and parts supplied and installed and formed an essential part
of the maintenance programme. The extent of the maintenance would,
no doubt, also depend upon the quality of the repair work. By now, of
course, a substantial part of even the maintenance period has expired.
[25] Counsel for the appellant submitted that the court a quo ought to
have declined to set aside the contra cts, if for no other reason because
it was not possible to reverse what had already been done, and because
by the time judgment was delivered it was no longer practicable to start
the tender process over again for the outstanding work. It was submitted
further that this state of affairs was attributable to the respondents’
failure to institute review proceeding s timeously and to seek an interim
interdict preventing the work from proceeding.
[26] There is no merit in counsel’s further submission. Within a day or
two of becoming aware of the award of the Helderstroom tender the
respondents wrote to the Ministry expressing their concern over the
22
tender process. As early as 26 January 2004 they wrote to the DPW
requesting the documents necessary to enable them to ascertain their
rights with regard to a possible re view. The request was refused. A
subsequent attempt to invoke the pro visions of the Promotion of Access
to Information Act was similarly unsuccessful. Ultimately they were
obliged to institute proceedings even before they were fully apprised of
the facts necessary to substantiate the review. The documents they
sought were eventually furnished to them on 23 March 2004, almost two
months after their initial request. It was only then that t hey were able to
file a supplementary affidavit properl y substantiating the relief they
sought. In my view they were not in any way to blame for a delay in
initiating proceedings or bringing them to finality. Nor were they at fault
for failing to stop the work from proceeding. The DPW made it quite
clear in correspondence that it was not prepared to suspend the work or
to withhold from Nolitha access to any of the installations. It is true that
the respondents did not proceed with their threatened interdict but, as
explained in the replying affidavit, access to all the installations had by
then (10 April 2004) been granted to Nolitha. Any application for an
interdict would in any event have been opposed by the appellants.
[27] However, the appellants’ stance on the impracticability of
attempting to start the tender process over again for the completion of
23
the remaining work strikes me as co rrect. As observed by Erasmus J,
the repair and maintenance components of the contracts are
interrelated. The order of the court a quo , if implemented, is likely not
only to be disruptive but also to give rise to a host of problems not only
in relation to a new tender process but also in relation to the work to be
performed.
[28] In appropriate circum stances a court will decline, in the exercise of
its discretion, to set aside an invalid administrative act. As was observed
in Oudekraal Estates (Pty) Ltd v City of Cape Town 2004 (6) SA 222
SCA para 36 at 246D:
‘It is that discretion that accords to judici al review its essential and pivotal role in
administrative law, for it constitutes the indispensable moderating tool for avoiding or
minimising injustice when legality and certainty collide.’
A typical example would be the case where an aggrieved party fails to
institute review proceedings within a reasonable time. See eg
Wolgroeiers Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad 1978 (1)
SA 13 (A); see also s 7(1) of PAJA which gives statutory recognition to
the rule. In a sense, therefore, the effe ct of the delay is to ‘validate’ what
would otherwise be a nullity. See Oudekraal Estates (Pty) Ltd , supra,
para 27 at 242E-F. In the present case, as I have found, there was no
culpable delay on the part of the re spondents. But the object of the rule
24
is not to punish the party seeking the review. Its raison d’être was said
by Brand JA in Associated Institutions Pension Fund v Van Zyl 2005 (2)
SA 302 (SCA) at para 46 to be twofold:
‘First, the failure to bring a review within a reasonable time may cause prejudice to
the respondent. Secondly, there is a public interest element in the finality of
administrative decisions and the exercise of administrative functions.’
Under the rubric of the second I would add considerations of
pragmatism and practicality.
[29] In my view, the circumstance s of the present case as outlined
above, are such that it falls within the category of those cases where by
reason of the effluxion of time (and intervening event s) an invalid
administrative act must be permitted to stand. While the court a quo
correctly found that the award of ea ch of the three tenders was invalid
when made, it appears not to have appreciated that it had a discretion to
decline to set aside those awards. It follows that in my view the court a
quo erred in making the order it did and this court is free to set aside that
order.
[30] I turn to the question of cost s. It is clear that the respondents’
attempts to finalise the review as qu ickly as possible were frustrated by
the appellants’ refusal to let them have the necessary information and
documentation. This was made avail able only on 23 March 2004. It is
25
also clear that the appellants were not prepared to delay the handing
over of the sites or the execution of the work pending the receipt by the
respondents of the necessary information. In the event, the respondents
took the risk of launching proceedi ngs even before they were able to
properly substantiate their grounds of review. This they did in a
supplementary affidavit filed after receipt of the
information. Had the matter been adjudicated when the review
proceedings were launche d it would in all probability still have been
practicable to grant the respondents re lief. Through no fault of their own
this is now denied them. It is true that in the answering affidavit filed on
behalf of the appellants the point wa s taken that the matter had become
academic, but the main thrust of their resistance to the relief sought both
in this court and in the court bel ow was always that the respondents’
complaints had no substance. In the special circumstances of the case it
seems to me to be appropriate for the appellants to be ordered to pay
the respondents’ costs both in this court and in the court below.
[31] The following order is made:
(1) The appeal is upheld. The first and second appellants are
however ordered to pay the costs of appeal of the first and
second respondents.
26
(2) The order of the court a quo is set aside and the following is
substituted in its place:
‘(i) The application is dismissed.
(ii) The first and second res pondents are orde red to pay
the costs of the first and second applicants.’
__________
D G SCOTT
J U D G E O F A P P E A L
CONCUR:
CAMERON JA
MTHIYANE JA
LEWIS JA
MAYA AJA