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[2019] ZASCA 140
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Laser Transport Group (Pty) Ltd and Another v Elliot Mobility (Pty) Ltd and Another (835/2018) [2019] ZASCA 140 (1 October 2019)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not-Reportable
Case
no: 835/2018
In
the matter between:
THE
LASER TRANSPORT GROUP (PTY)
LTD FIRST
APPELLANT
GIN
HOLDINGS (PTY)
LTD SECOND
APPELLANT
and
ELLIOT
MOBILITY (PTY)
LTD FIRST
RESPONDENT
NEO
THANDO / ELLIOT MOBILITY
(PTY)
LTD JOINT
VENTURE SECOND
RESPONDENT
Neutral
citation:
The Laser Transport Group (Pty) Ltd & another v
Elliot Mobility (Pty) Ltd & another
(835/2018)
[2019] ZASCA
140
(01 October 2019)
Coram:
Ponnan, Wallis, Dambuza and Mocumie JJA and Dolamo AJA
Heard:
30 August 2019
Delivered:
01 October 2019
Summary:
Administrative law – review of a tender award –
four-year contract concluded pursuant to a tender award challenged
for
non-adherence to provisions of the
Preferential Procurement
Policy Framework Act 5 of 2000
.
Mootness
– with about three months before expiry of the contract period
a decision on appeal would have no practical effect
- no discrete
point of public importance that would affect matters in the future –
appeal dismissed with costs.
ORDER
On
appeal from
: Gauteng Division of the High Court, Pretoria
(Pretorius J, with Molopa- Sethosa and Mngqibisa-Thusi JJ concurring,
sitting as
court of appeal):
The
appeal is dismissed with costs, which costs shall include those
consequent upon the employment of two counsel.
JUDGMENT
Dambuza
JA (Ponnan, Wallis and Mocumie JJA and Dolamo AJA concurring):
[1]
On 30 August 2019 we dismissed this appeal in terms of
s
16(2)
(a)
(i) and undertook to furnish the reasons at a later
stage together with our order for costs. These are our reasons. The
appeal is
against the judgment of the Full Court of the Gauteng
Division of the High Court, Pretoria (Pretorius, Molopa-Sethosa and
Mngqibisa-Thusi
JJ) (full court), sitting as a court of appeal from a
decision by a single judge in the high court. The high court had set
aside
on review the award of a tender and the appeal against that
order succeeded. In the result an application by the appellants to
have a decision to award a tender in favour of the respondents set
aside, was dismissed with costs. The appeal is with the special
leave
of this court.
[2]
In March 2015 the first appellant, The Laser Transport Group
(Pty) Ltd t/a Stuttaford Van Lines (The Laser Group) together with
the second appellant, Gin Holdings Proprietary Limited (Gin
Holdings), both conducting business as furniture removers, submitted
a bid removals under the name ‘Laser Transport Group (Pty) Ltd
t/a Stuttaford Van Lines and Gin Holdings Business Unit Venture
(the
appellants), in response to a tender invitation issued by the
Department of International Relations and Co-operation (DIRCO).
The
tender was issued on 11 March 2015 under the reference DIRCO
13/2014/15 (the first tender). It invited bids for removal and
insurance services for household goods and vehicles belonging to
DIRCO officials transferred to and from diplomatic missions within
South Africa and abroad. From 2011, these services had been rendered
by Stuttaford Van Lines (Pty) Ltd, a division of the Laser
Transport
Group, together with Gin Holdings. The four-year contract in terms of
which they performed those services expired by
effluxion of time on
31 March 2015
[3]
The first and second respondents, Elliot Mobility (Pty) Ltd
and Neo Thando/Elliot Mobility (Pty) Ltd also submitted a bid. A
third
‘bid’, submitted by Crown Relocation Worldwide
Move, turned out to be only an objection to certain clauses in the
tender.
[4]
On 26 March 2015, the day on which the tender closed, the
appellants’ tender price was announced as R117 673 286.00. The
respondents’
was R215 882 882.00. Having heard nothing from
DIRCO about the results of the tender, on 30 June 2015 the appellants
wrote to the
department expressing their discomfort and suspicions
regarding the delay in the awarding of the tender. They suspected
that it
would be cancelled and warned that its cancellation would be
unlawful because there were no valid or lawful reasons for such
cancellation.
[5]
It appears that there was no response to the appellants’
letter. Instead, on 6 August 2015 the Director-General in DIRCO wrote
to the appellants advising that the tender had been cancelled and
would be re-advertised. Apart from stating that the Terms of
Reference of the tender would be revised, no reasons were given for
the cancellation. Indeed, a second invitation to tender was
advertised on 11 August 2015 (the second tender) under reference no
DIRCO 05/2015/16. The Terms of Reference, as they had appeared
in the
first tender, had been revised. Both the appellants and the
respondents were, again, amongst those who responded to the
invitation by submitting bids.
[6]
As with most government tenders the consideration of the
second tender consisted of four ‘phases’. The first phase
entailed
an assessment of compliance by the bidders with mandatory
submission requirements. Based on such compliance the bid would be
considered
either ‘responsive’ or ‘non-responsive’.
The second and third phases entailed assessment of stipulated
‘functionality criteria’. The bidders would be scored out
of 100 points, split into 70 points for capacity, systems,
skills and
international membership and accreditation, and 30 points for
facilities and vehicles. In phase four, bids were allocated
price and
performance points in terms of the Preferential Procurement Policy
Framework Act 5 of 2000 (PPPFA). Ninety points were
allocated for
price and ten points for the bidder’s Broad Based Black
Empowerment status.
[7]
In phase 1 both the appellants’ and the respondents’
bids were assessed as responsive and therefore progressed to the
next
stages. In the final result, the overall score for the appellants’
bid was 95 points, whilst that of the respondents
was 73 points. On 3
November 2015 the tender was awarded to the respondents. On 5
November 2015 DIRCO concluded a contract with
the respondents based
on their tender. On 6 November 2015 DIRCO informed the appellants
that their bid for the second tender had
been unsuccessful. On 10
November 2015 DIRCO advised them that the month to month contract
which had been concluded on expiry of
the 2011 contract, had come to
an end and that a new contractor had been appointed.
[8]
The duration of the contract concluded with the respondents in
November 2015 was four years, with DIRCO reserving the right to
‘request
an extension’ of the period up to a maximum
period of 12 years. The agreement would therefore expire during
November 2019.
Although couched as a single contract, the scope of
work consisted of packing, storage, shipment and unpacking of each
transferred
official’s household goods and personal effects or
departmental equipment. As such there would be individual contracts
in
relation to each transferred official.
[9]
Aggrieved by losing the tender, the appellants approached the
Gauteng Division, Pretoria (high court), seeking a review of the
decisions
taken by DIRCO in relation to both the first and the second
tenders. They also sought interim relief that DIRCO be restrained
from
implementing the agreement concluded with the respondents.
[10]
The essence of the
appellants’ complaint was that DIRCO had been obliged to award
the tender in their favour as the highest
scoring bidders with the
lowest bid price. They contended that there were no objective
criteria justifying the award to the respondents.
[1]
They also asserted that the first tender was cancelled unlawfully in
that the cancellation was for reasons other than those stipulated
in
Regulation 10(4) of the Regulations issued
under the PPPFA.
[2]
Also, their price schedule for that tender had been made public to
their competitors, giving them an unfair advantage and an opportunity
to adjust their prices in the second tender, and thus robbing the
appellants of any competitive advantage they would have had going
into the second tender. The appellants also contended that the
respondents had failed to furnish a bank guarantee as required in
the
Terms of Reference of the first tender.
[11]
DIRCO’s response
was that the first tender was cancelled in response to complaints
received from other contractors in the
industry about DIRCO’s
indirect exclusion of Previously Disadvantaged Movers (PDM’s)
from DIRCO tenders. The complaint,
as expressed by Crown Relocation
Worldwide Move
[3]
and Baxter International Movers,
related to requirements, in the
tender Terms of Reference, that bidding companies should be in
possession of international membership
certificates. The requirement
was criticised as exclusionary of PDI’s because they were
unlikely to be in possession of the
required certificates, as they
would not previously have participated in the international movers’
market.
[12]
As to the appellant’s higher score, DIRCO contended that
there was no reason why the respondents, having met the minimum
threshold
for functionality, could not be awarded the tender. DIRCO
insisted that a tender could be properly awarded to a tenderer other
than the one with the lowest price if objective criteria justified
that decision; for example, if DIRCO ‘objectively viewed
that,
notwithstanding the lowest price, realistically speaking the
respondent’s price was still reasonable in the circumstances.’
In this instance DIRCO had concluded that the appellants’ price
was unsustainable as the lowest item in its price schedule
was below
an average price as determined by DIRCO by calculating the average
prices of the five bidders who had responded to the
invitation to
tender, including those whose bids were unresponsive.
[13]
In the high court the application was heard in two sittings.
On 12 December 2015 Pretorius J ordered that the application for
interim
relief be struck off the roll for lack of urgency. A year
later, on 11 December 2016 Van der Westhuizen AJ granted an order
setting
aside the tender award to the respondents and awarding it to
the appellants based on the reasons for which they had challenged the
award. In terms of that court order, the individual contracts
concluded with the respondents would be honoured, but new contracts
would be concluded with the appellants.
[14]
On appeal, the Full Court set aside the order granted by Van
der Westhuizen J and ordered that it be replaced with a dismissal of
the appellants’ application, together with a concomitant costs
order. On appeal in this court, the dispute had crystalized
to the
lawfulness of awarding the tender to the respondents despite the
appellants’ bid price having been the lowest. DIRCO
did not
participate in this appeal.
[15]
In anticipation of the appeal hearing, the parties were
invited to make submissions in relation to whether any decision in
the appeal
would have any practical effect as contemplated in s
16(2)
(a)
(i) of the Superior Courts Act 10 of 2013 (the Act).
This was because the four-year contract concluded with the
respondents in 2015
would be expiring in approximately three month
from the date of the hearing of the appeal. In that regard s 16
(2
)(a
) provides:
‘
(i) When at the hearing of an
appeal the issues are of such a nature that the decision sought will
have no practical effect or result,
the appeal may be dismissed on
this ground alone.
(ii) Save under exceptional
circumstances, the question whether the decision would have no
practical effect or result is to be determined
without reference to
any consideration of costs.’
[16]
The appellants’ submission was that the appeal was not
necessarily moot. The question whether the decision of this court
would
have a practical effect depended on the judgment of this court
on the merits of the appeal. ‘If it is found that the tender
should have been awarded to the appellants they would be entitled to
a four year appointment by DIRCO from the date of the final
decision
to that effect’, so it was submitted.
[17]
This court has, on
numerous occasions, pronounced on the guiding principles for
determining whether an appeal should be entertained
where a decision
thereon will have no practical effect or result. The main principle
is that courts of law ought not to decide
issues purely for academic
interests. They ‘exist for the settlement of concrete
controversies and actual infringements of
rights, not to pronounce
upon abstract questions or to advise upon differing contentions,
however important’.
[4]
The purpose of s 16(2
)(a)
of
the Act
,
which
is in identical terms to its predecessor, s 21A(1) to (3) of the
Supreme Court Act 59 of 1959,
[5]
is to entrench this principle and thus to alleviate the heavy
workload of courts of
appeal.
[6]
[18]
This court has a
discretion to refuse to consider merits where an appeal is moot, or
to entertain an appeal even though it is moot,
where there is a
discrete legal issue of public importance which would affect matters
in the future.
[7]
In
Minister of Justice and
others v Estate Stransham-Ford
[8]
this court explained the
principle as follows:
‘
It is a prerequisite for the
exercise of the discretion that any order that the court may
ultimately make will have some practical
effect either on one of the
parties or others. Other factors that may be relevant will include
the nature and extent of the practical
effect that any possible order
might have, the importance of the issue, its complexity and the
fullness or otherwise of the argument.
The common feature of the cases where
the Constitutional Court has heard matters notwithstanding the fact
that the case no longer
presented a live issue, is whether the order
had a practical impact on the future of one or both of the parties to
the
litigation…’.
[9]
[19]
In
Qoboshiyane,
whilst accepting that the cases raised
issues under the Constitution in the context of the Promotion of
Access to Information Act
2 of 2000 (PAIA), this court found that the
court decision on the interests of the public in disclosure of the
information concerned
was fact specific.
[20]
Turning to this appeal, the appellants’ first submission
was fundamentally flawed because it rested on an incorrect
application
of s 16(2)
(a)
(i). It advocated an approach that
would make nought of the purpose of the section, which is to avoid
fruitless usage of the court’s
resources where the decision
sought will have no practical effect or result and is of no
significant importance to the public.
On this argument the test would
be whether on the merits the appeal should succeed. An additional
difficulty with the appellants’
submission is that if the
appeal was entertained and the decision sought was determined in
favour of the appellants, the only way
the decision sought would have
a practical result or effect would be by extension of the contract
(based on the August 2015 tender)
beyond the November 2019 expiry
date. As submitted on behalf of the respondents, the result would be
contrary to the terms of the
August 2015 award and there could be no
basis, on the facts of this case, for the commencement date of the
contract to be on a
date beyond the period of the contract. The
tender was intended for commencement in 2015 on terms and conditions
(especially pricing
conditions) that existed then. One hardly needs
evidence to show that, four years later such conditions have changed.
This court
would therefore have to create a contract for DIRCO and
the appellants.
[21]
As shown above, this
court has exercised its discretion to determine appeals which are
moot where issues arising involve a discrete
legal point of public
importance that would affect matters in the future. In their
alternative submission, the appellants argued
that this court should
exercise its discretion to entertain this appeal because the issues
that arise ‘could or should’
affect similar matters in
the future. They contended that the interpretation of s 2(1)
(a)
of the PPPFA involved
Constitutional issues
[10]
that impacted on public procurement, just administrative action, and
access to courts.
Qoboshiyane
provides no support for the
appellants’ submissions. If anything, that case illustrates
that even where Constitutional issues
are implicated, if the decision
is case specific, there are no grounds for the court to exercise its
discretion in favour of entertaining
an appeal that is moot. Even if
the assessment of objective factors under s 2(1)
(b)
(i)
of the PPPFA was incorrectly applied, or the tender process was
tainted by illegality or the Full Court’s substitution
of
tender award was wrong, no basis was laid for a conclusion that the
matter raised issues of public importance.
[22]
Further, as to whether exceptional circumstances existed for
exercise of the court’s jurisdiction under s 16(2)
(a)
(ii)
the assertions by the respondents that they had raised the question
of mootness when the application for leave to appeal was
heard,
cannot be ignored. And thereafter the appellants did not seek a
preferential date for the appeal to be heard. It was in
consideration
of these factors that we dismissed the appeal with costs.
[23]
No warrant exists for departing from the rule that costs
follow the result. Consequently, the costs in this appeal, including
the
costs of two counsel, are awareded in favour of the respondents.
________________
N
Dambuza Judge of Appeal
APPEARANCES
For
Appellant: W R E Duminy SC
Instructed
by:
Webber
Wentzel, Cape Town
Symington
De Kok, Bloemfontein
For
Respondent: A Subel SC (with M Nowitz)
Instructed
by:
Nochumsohn
& Teper, Pretoria
Phatsoane
Henny Attorneys, Bloemfontein
[1]
Section 2(1)(f) of the PPPFA reads as follows:
‘
An organ of state must
determine its preferential procurement policy and implement it
within the following policy:
…
(f) the contract must be awarded to
the tenderer who scores the highest points, unless objective
criteria in addition to those
contemplated in paragraph (d) and (e)
justify the award to another tenderer….’
[2]
Regulation 10 (4) provides that:
‘
(4) An organ of state may,
prior to the award of a tender, cancel the tender if-
(a) due to changed circumstances,
there is no longer a need for the goods or services tendered for;
or
(b) funds are no longer available to
cover the total envisioned expenditure; or
(c) no acceptable tenders are
received.’
[3]
See para 3 above.
[4]
Geldenhuys and Neethling v Beuthin 1918 (AD) 426 at 441. See also
Van Loggerenberg et al Erasmus Superior Court Practice (2 ed,
looseleaf) Vol 1, A2-49 (Original Service, 2015); Coin Security
Group (Pty) Ltd v SA National Union of Security Officers and
others
[2000] ZASCA 137
;
2001 (2) SA 872
(SCA) para 7; Radio Pretoria v Chairman, Independent
Communications Authority of South Africa & Another 2005 (1) SA
47 (SCA).
[5]
Which provided that:
‘
When at the hearing of any
civil appeal to the Appellate Division or any Provincial or Local
Division of the Supreme Court the
issues are of such a nature that
the judgment or order sought will have no practical effect or
result, the appeal must be dismissed
on this ground alone’.
[6]
Erasmus Superior Court Practice at A2-49.
[7]
See Qoboshiyane NO and Others v Avusa Publishing Eastern Cape (Pty)
Ltd and Others [2012] ZASCA166;
2013 (3) SA 315
(SCA) para 5.
[8]
In Minister of Justice and others v Estate Stransham-Ford [2016]
ZASCA 197; 2017 (3) SA 152 (SCA).
[9]
Ibid paras 22-23.
[10]
Under ss 217, 33 and 34 of the Constitution of the Republic of South
Africa, 1996.