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[2017] ZACC 5
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City of Cape Town v Aurecon South Africa (Pty) Ltd (CCT21/16) [2017] ZACC 5; 2017 (6) BCLR 730 (CC); 2017 (4) SA 223 (CC) (28 February 2017)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 21/16
In the matter
between:
CITY OF CAPE
TOWN
Applicant
and
AURECON SOUTH
AFRICA (PTY)
LTD
Respondent
and
CONSULTING
ENGINEERS SOUTH
AFRICA
Amicus Curiae
Neutral
citation:
City
of Cape Town v Aurecon South Africa (Pty) Ltd
[2017]
ZACC 5
Coram:
Nkabinde ACJ, Cameron J, Froneman J, Jafta J,
Khampepe J, Madlanga J, Mbha AJ, Mhlantla J, Musi AJ and Zondo J
Judgments:
Mbha AJ (unanimous)
Heard on:
3 November 2016
Decided on:
28 February 2017
Summary:
Judicial review — 180-day period
— Promotion of Administrative Justice Act 3 0f 2000 —
condonation — true
discretion — unsatisfactory
explanation for delay — leave to appeal refused
ORDER
On appeal from the Supreme
Court of Appeal (hearing an appeal from the High Court of South
Africa, Western Cape Division, Cape Town):
1.
Leave to appeal is refused.
2.
The application is dismissed with costs, including the costs of two
counsel.
JUDGMENT
MBHA AJ (Nkabinde ACJ,
Cameron J, Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla
J, Musi AJ and Zondo J concurring):
Introduction
[1]
This is an application for leave to
appeal against a judgment and order of the Supreme Court of Appeal
(SCA).
[1]
The matter started as a review application in the High Court of South
Africa, Western Cape Division, Cape Town (High Court).
[2]
The applicant, the City of Cape Town (City), seeks to review its own
decision in terms of which the respondent, Aurecon South
Africa (Pty)
Ltd (Aurecon), was awarded a tender for the decommissioning of the
Athlone Power Station.  Relying on the provisions
of the
Promotion of Administrative Justice Act (PAJA),
[3]
the City contends that its decision ought to be set aside on the
basis of procedural irregularities in its award of the tender
to
Aurecon.
[2]
Consulting Engineers South Africa
(CESA) was admitted as
amicus curiae
(friend of the court).  CESA is a voluntary association of
independent consulting engineers in private practice.  It
has
about 540 members.  Given its involvement in the consulting
engineering industry, it sought to advance submissions in
promotion
of the public interest and the interests of the industry.
Factual background
[3]
In 2008, the City’s Spatial
Planning and Urban Development Department published an invitation to
tender for the performance
of a high-level pre-feasibility study in
respect of the redevelopment of the site on which the defunct Athlone
Power Station is
situated.  The tender was awarded to a joint
venture which comprised Aurecon Engineering International (Pty) Ltd
(a wholly-owned
subsidiary of Aurecon), and ODA Consulting (Pty)
Ltd.  The brief given to the joint venture involved a study of
the site for
redevelopment, a compilation of a scope of work and
specifications for the decommissioning of the power station.  In
2010,
the joint venture completed its draft scope of work.
[4]
Initially, the City considered
expanding the joint venture’s brief to include preparation of
tender documents for the decommissioning
of the power station.
However, City officials established that the City had the necessary
skills to perform the task internally
and the idea was aborted.
Ultimately, the joint venture did not assist in compiling the tender
documents.  It appears
that there was an expectation that
Aurecon would tender for the project management of the
decommissioning works.  During a
meeting which was held in the
Electrical Services Department of the City on 1 April 2010, and in
subsequent email correspondence,
the City’s head of electricity
generation, Mr Davidson, informed Aurecon’s project manager, Mr
Webb, of that assumption.
Mr Davidson added that this would not
give rise to a conflict of interest so long as Aurecon did not
provide input regarding the
“structure of preference”,
and so long as it was not represented on the City’s Bid
Evaluation Committee (BEC)
or Bid Adjudication Committee (BAC).
[5]
Two invitations to tender for the
project management of the decommissioning works were advertised by
the City after the completion
of the joint venture's pre-feasibility
study: tender 266C/2010/11, which was advertised on 11 February 2011
and cancelled on 13
May 2011; and tender 459C/2010/11, which was
advertised shortly thereafter.  Aurecon tendered for the project
on both occasions.
Five other tenders were submitted to the
City. However, the BAC found them to be non responsive to the
tender requirements.
Only Aurecon’s tender was deemed
responsive.
[6]
On 31 October 2011, the BAC resolved
to accept Aurecon’s tender in the amount of R9 748 973.15,
subject to the conclusion
of the process contemplated in section 33
of the Local Government: Municipal Finance Management Act (MFMA).
[4]
Aurecon was duly notified of the BAC’s decision.  The
award was subject to a 21-day appeal period as envisaged
by the
Municipal Systems Act
[5]
pursuant to which Aurecon would be notified if any appeals had been
lodged against the decision.  A few days later, Aurecon
was
informed that an appeal had been lodged against the award, but it was
being resolved and Aurecon would be informed of the commencement
date
of the contract once that process was finalised.
[7]
On 17 January 2012, Aurecon received
two letters from the City’s Director of Supply Chain
Management, Mr Shnaps.  The
first advised that the appeal
against the award of the tender had been resolved and that Aurecon
would be contacted by the project
manager for implementation of the
project.  The second reiterated that the commencement of the
contract was subject to the
conclusion of the process under section
33 of the MFMA, and that Aurecon would be notified once that process
had been completed.
[8]
On 29 August 2012, and in compliance
with the provisions of section 33 of the MFMA, the approval of the
award served before the
City’s council meeting.  Concerns
were raised by some council members that the tender process was
tainted by corruption
and irregularities.
[6]
These concerns stemmed from Aurecon’s involvement in the
pre-feasibility study, as well as its participation in drafting
the
applicable scope of work.  It was alleged that Aurecon’s
involvement gave it an unfair advantage over the other
tenderers who
had taken part in the procurement process.  Following these
developments, the City’s Mayor commissioned
Ernst & Young
(auditors) to investigate and make appropriate recommendations
regarding both the process followed in Aurecon’s
appointment
and whether, during the course of the tendering process, there was
compliance with the relevant legislation and procurement
policies of
the City.
[9]
On 22 October 2012, the
auditors submitted a forensic report.  The report recorded a
number of irregularities that
had allegedly taken place during the
procurement process.  It concluded that Aurecon had received an
unfair advantage over
the other tenderers.  This was owing to a
number of reasons including the fact that: Aurecon was included in
the City’s
internal email communication concerning the tender;
an unauthorised member of the BEC participated in the scoring which
was in
breach of the Rules of Order;
[7]
the correct evaluation stages were not adhered to in scoring the
bids; and the BEC meeting of 5 August 2011 had no chairperson
and was
therefore not properly constituted and in breach of clause 200 of the
Supply Chain Management Policy (SCMP).
[10]
Once the City received the forensic
report, it furnished a copy to Aurecon and notified Aurecon that it
was precluded from bidding
for that tender and any future tenders
based on the draft scope of work prepared by the joint venture.
Furthermore, the City
invited Aurecon to make representations as to
why the award should not be invalidated.  Aurecon submitted
representations
on 31 January 2013, but it never received a response.
Instead, what followed was the launch of review proceedings on
16 April
2013.
Litigation History
High Court
[11]
The City sought the following relief
in the High Court:
“
1.
an order, insofar as it may be necessary, condoning the applicant’s
failure to
adhere to the 180-day period prescribed in section 7 of
the Promotion of Administrative Justice Act 3 of 2000 for the
institution
of these proceedings;
2.
an order reviewing and setting aside the award dated 31 October 2012
by the [City’s]
Supply Chain Management Bid Adjudication
Committee of
Tender No. 459C/2010/11: Provision of Professional
Services: Decommissioning of Athlone Power Station to the respondent
;
2A.
in the event of an order being granted in terms of paragraph 2 above,
an order that any
contract that may have come into existence between
the applicant and the respondent as a result of the award, be
declared void
ab initio; alternatively, that any such contract be set
aside.”
[12]
Aurecon’s opposition was based
on several grounds.  It instituted a counter application,
in which it sought a declaratory
order that it was not precluded in
terms of clause 95 of the SCMP from bidding for that tender or for
any other tender relating
to the decommissioning of the Athlone Power
Station.
[8]
The City opposed the counter application.
[13]
The High Court granted the City’s
application and dismissed Aurecon’s counter-application.
It held that Aurecon
should have been precluded from tendering for
the contract due to its involvement in the preparation of the draft
scope of work.
As such, the inclusion of its tender rendered
the procurement process unfair and constituted a ground for review
under section
6(2)(c) of PAJA.
[14]
The High Court found that the BAC
failed to take relevant considerations into account and that the
decision to award the tender
thus fell to be reviewed and set aside
in terms of section 6(2)(e)(iii) of PAJA.
[9]
Regarding clause 95 of the SCMP and regulation 27(4) of the Supply
Chain Management Regulations (SCM Regulations), the High
Court held
that—
“
whilst
members of the Bid Specification Committee and the Bid Evaluation
Committee may have bona fide believed that allowing the
respondent to
participate in the procurement process does not violate clause 95 and
Regulation 27(4), such approach, in my view,
is not only incorrect,
wholly unreasonable, but [is] also inconsistent with the value
underpinning fairness.”
[10]
[15]
The High Court also found that the
City’s application had been instituted within the 180-day
period prescribed by sections
7(1) and 9 of PAJA.
[11]
Supreme Court of Appeal
[16]
In the SCA, Aurecon contested all
the findings of the High Court and disputed that it had enjoyed an
unfair advantage over the other
tenderers.  In anticipation of a
possible finding that its application was late, the City contended
that it had made a proper
case for the extension of the time period
prescribed in PAJA.  It also submitted that the High Court’s
interpretation
of regulation 27(4) of the SCM Regulations and clause
95 of the SCMP was correct in that the provisions disqualified
Aurecon from
bidding for the tender due to its previous involvement
in the pre feasibility study.  Aside from this, the City
submitted
that the irregularities in the procurement process
warranted the review and setting aside of the tender that was awarded
to Aurecon.
[12]
[17]
After scrutinising the provisions of
PAJA, the SCA observed that judicial review proceedings must be
instituted without undue delay
and before 180 days have elapsed since
the date of the administrative action in issue.
[13]
This is subject to the proviso that PAJA empowers a court to extend
the stipulated period if the interests of justice so
require.
[14]
The SCA noted that the City had launched its application 532 days
after the decision to award the tender to Aurecon
was made.
[15]
[18]
The SCA dispelled the High Court’s
suggestion that the 180-day period begins to run only once the party
seeking the review
becomes aware of the fact that the administrative
action is tainted by irregularity.
[16]
In considering whether the City had made out a case for condonation,
the SCA stated that whether it is in the interests of
justice to
condone a delay depends entirely on the facts and circumstances of
each case.  Ultimately, the SCA held that the
City had not made
out a proper case for condonation and that that was dispositive of
the matter.
[17]
Nevertheless, it proceeded to analyse each of the alleged procedural
irregularities.
[19]
Turning to the question whether
clause 95 of the SCMP and regulation 27(4) of the SCM Regulations
were contravened, the SCA had
regard to the uncontroverted evidence
of Mr Silbernagl, an engineering consulting expert.  His
evidence was that preventing
engineers, who have an intimate
knowledge of a particular project because of their prior involvement,
from tendering would lead
to unnecessary and wasteful expenditure.
This would be to the detriment of taxpayers and organs of state.
The SCA said
that this approach had support in the Treasury
Guidelines, which allow for consultants, who were involved in
previous work, to
participate in any competitive process for
“downstream” assignments.
[18]
The SCA then interpreted the words “involved with”
according to their ordinary grammatical meaning.  It
held that
the provisions were meant to ensure a fair, equitable, transparent
and competitive procurement process to combat nepotism
and
corruption.  In its view, the City’s wider interpretation
was commercially unsound and contrary to standard engineering

practice.
[19]
[20]
The SCA meticulously assessed each
of the grounds under review.  These included: the issue of the
bids not being evaluated
collectively; the participation of a
non-member in the BEC meetings; the withdrawal of the indemnity
qualification by Aurecon;
the initial reluctance by Aurecon to
provide financial statements; the irregular extension of the validity
period of Aurecon’s
bid; and the alleged material defects in
the report
prepared
by the BEC for the BAC’s consideration.  The
SCA
held that none of the alleged irregularities constituted
irregularities at all.  Aurecon’s tender was the only one

found to be responsive and the alleged irregularities only occurred
after all the other tenders had been found to be ineligible.
No
other tenderer could have been prejudiced and it was only Aurecon
that suffered prejudice due to the City’s missteps.
[20]
The SCA upheld the appeal and set aside the High Court’s
decision.
In this Court
The City’s
submissions
[21]
The City contended that the SCA
should have dismissed Aurecon’s appeal with costs, particularly
when looking at (i) whether
the City required condonation in terms of
section 9, read with section 7 of PAJA, and (ii) whether Aurecon had
been entitled to
tender for the contract in terms of clause 95 of the
SCMP.  The City also appealed the findings of the SCA in respect
of the
various grounds of review, and relied substantially on the
same reasons it had advanced in the SCA.
[22]
In addressing its first point, the
City contended that the High Court was correct in finding that the
180-day period, contemplated
in section 7, only began to run once the
City had become aware of the irregularities through the Ernst &
Young report on 22
October 2012.  Therefore the City did
not need to apply for condonation because the time period had not yet
lapsed.
[23]
On the second point, the City
persisted with its contention that, on a proper interpretation of
clause 95 and regulation 27(4)
of the SCM Regulations, it was
not necessary to show that a tenderer actively participated in the
actual proceedings of the Bid
Specification Committee (BSC); or
actively attempted to influence the design or content of the
specifications; or even that the
tenderer intended or hoped to
influence the outcome of the tender process, let alone that the
outcome was indeed so influenced.
To establish that the
tenderer was “involved with” the BSC was a sufficient bar
to that tenderer’s participation
which, read within the
statutory and constitutional context, ensured transparency, equity
and fairness.  In the City’s
view, allowing a party to bid
for a contract when the same party had, to a significant extent,
determined the specifications of
that contract would subvert the
requirements of fairness and lawfulness.
Aurecon’s
submissions
[24]
In addition to a point
in
limine
(preliminary issue),
[21]
Aurecon further submitted that the review application was brought 532
days after the decision was made and the reasons for the
decision
were (or ought to have been) within the City’s knowledge the
moment the decision was taken by the BAC to award the
tender to
Aurecon.  The application was therefore brought after the expiry
of the 180-day period prescribed by section 7(1)
of PAJA.  The
City’s contention that the 180-day period only commenced when
it was provided with full details of the
irregularities which had
allegedly been committed in the tender process, as opposed to the
reasons for the decision was, according
to Aurecon, without merit.
[25]
According to Aurecon, given that the
City did not contend that the SCA erred or misdirected itself in
refusing the extension it
applied for in terms of section 9(1) of
PAJA, that should be the end of the enquiry.  Aurecon submitted
that should this Court
find it necessary to address the issue of
condonation, the City had failed to provide a full and reasonable
explanation for its
delay.  Thus it failed to make out a proper
case for condonation as envisaged in section 9(1) of PAJA.
Aurecon further
denied that any irregularities were committed by the
City during the tender process that culminated in the decision to
award the
tender in question to it.
CESA’s submissions
[26]
CESA contended that clause 95 of the
SCMP and regulation 27(4) of the SCM Regulations are capable of two
interpretations.
In terms of the strict interpretation, it is
always unlawful for a tenderer that was involved in preparatory work
which is incorporated
into a subsequent tender to be awarded the
tender.  On the other hand, the flexible interpretation requires
the relevant municipality
to determine, on a case-by-case basis,
whether a tenderer who did preparatory work should be disqualified
from being considered
for a subsequent tender.
[27]
CESA submitted that on a correct
interpretation the provisions do not entail a strict rule of
disqualification.  A strict interpretation
would be inimical to
section 217 of the Constitution
[22]
because it produces results which are unfair, inequitable,
anti-competitive and not cost-effective.  It requires the
disqualification
of tenderers who may be able to provide an excellent
service, at competitive prices, and who have not in any way been
advantaged
by their involvement in the preparatory work.  CESA
argued that the provisions require municipalities to make a flexible,
fact-specific determination of whether involvement in preparatory
work requires the disqualification of a tenderer from consideration

for the subsequent tender.  In CESA’s view such an
interpretation accords with section 217, and the purpose of the
provisions.  It contended that the flexible approach advances
competition and cost-effectiveness because a case-by-case
determination
of whether a tenderer should be precluded from bidding
for the subsequent contract will foster fair competition, which will
ultimately
benefit the municipalities and the public.  CESA
submitted that this flexible approach also gives better expression to
the
constitutional values of fairness and equity.  The European
Court of Justice has also endorsed the flexible interpretation
in the
context of a similar provision.
[23]
[28]
CESA concluded that in the interests
of certainty, it would be appropriate for this Court to pronounce on
the proper interpretation
of the provisions even if it dismisses the
appeal on the grounds of the City’s unreasonable delay in
launching the review
application.
Preliminary issues
Condonation
[29]
Aurecon raised a point
in
limine
regarding the City’s
non-compliance with rule 19(2) of this Court’s rules.
It stated that the SCA’s
decision was handed down on 9 December
2015.  In terms of rule 19(2) of the Rules of the Constitutional
Court—
“
[a]
litigant who is aggrieved by the decision of a court and who wishes
to appeal against it directly to the Court on a constitutional
matter
shall, within 15 days of the order against which the appeal is sought
to be brought and after giving notice to the other
party or parties
concerned, lodge with the Registrar an application for leave to
appeal: Provided that where the President has
refused leave to appeal
the period prescribed in this rule shall run from the date of the
order refusing leave.”
Thus, according to
Aurecon, the
dies
(period)
expired on 4 January 2016.  Since the City filed its application
on 18 January 2016, and in the absence of an application
seeking
condonation from this Court, Aurecon contended that this procedural
defect was dispositive of the matter.
[30]
However, it should be noted that in
accordance with rule 32(2), this Court issued a practice
directive specifying that the
period between 16 December 2015 and
13 January 2016, inclusive of both dates, was not counted for
dies non
(effluxion
of time periods).  Taking the practice directive into account,
the
dies
expired
only on 18 January 2016.  Therefore the City was within time in
filing its application and an application for condonation
was not
necessary.  Aurecon’s point
in
limine
therefore fails.
Leave to appeal
[31]
Jurisdiction in this Court is
determined according to section 167(3)(b) of the Constitution which
provides that this Court may hear
either (i) a constitutional matter;
or (ii) any other matter which raises an arguable point of law of
general public importance
that this Court should consider.  It
must also be in the interests of justice for the Court to hear the
matter.
[24]
[32]
From the submissions made by the
parties, it is evident that two issues arise in this matter, namely,
(i) the calculation of the
180-day period contemplated in section 7
of PAJA; and (ii) the prior involvement of a prospective tenderer
(which, on the City’s
submissions, also implicates section 217
of the Constitution).  The first issue raised is a
constitutional matter given that
it requires the interpretation of
PAJA which was enacted to give effect to section 33 of the
Constitution.
[25]
The second issue regarding prior involvement is an arguable point of
law of general public importance.
[33]
In order to determine whether leave
should be granted, we have to consider the prospects of success and
determine whether it is
in the interests of justice for this Court to
determine the matter.
PAJA or legality?
[34]
An interesting question arose during
the hearing: Is an administrator’s right to review its own
decision sourced in PAJA or
the broader principle of legality?
The position in our law on this question is presently uncertain.
[26]
Despite this, both the City and Aurecon were quite content to pursue
the matter within the confines of PAJA.  The litigants
expressly
relied upon PAJA in the High Court, the SCA and before this Court.
In effect, this may be termed an “inadvertent
legal
concession”.  Several of this Court’s decisions have
held that it is trite that a court is never bound by
a legal
concession if it considers the concession to be wrong in law.
[27]
However, I am of the view that this case presents a certain nuance
that militates against venturing into a judicial inquisition.

The main reason is that it cannot be said for certain that the
litigants’ reliance on PAJA is “wrong in law”

because the law on the issue has not been settled.
[35]
While it is tempting to launch a
legal expedition and settle the question, I am of the view that this
case is an inappropriate channel
through which to do so.  As was
aptly put in
Ferreira
,
“it is important that this Court should not be required to deal
with abstract or hypothetical issues, and should devote
its scarce
resources to issues that are properly before it”.
[28]
It would be undesirable for this Court to attempt to answer this
important administrative law question without the benefit
of legal
argument from the litigants.  To proceed unaided with complex
legal questions is likely to give rise to unpredictable
and
altogether unintended consequences.  In
Albutt
,
this Court observed:
“
Sound
judicial policy requires us to decide only that which is demanded by
the facts of the case and is necessary for its proper
disposal.  This
is particularly so in constitutional matters, where jurisprudence
must be allowed to develop incrementally.
At times it may be
tempting, as in the present case, to go beyond that which is strictly
necessary for a proper disposition
of the case.  Judicial wisdom
requires us to resist the temptation and to wait for an occasion when
both the facts and the
proper disposition of the case require an
issue to be confronted.  This is not the occasion to do so.”
[29]
[36]
The benefit of full argument is
indispensable in the decision-making process.  I am therefore of
the view that the issue ought
to be left open until the opportunity
properly presents itself.  For now, determining the matter
within the strictures of
PAJA, without deciding whether the
litigants’ reliance on it is appropriate, is the way in which
this judgment proceeds.
[37]
While it is so that the case cannot
be decided on an assumption of the appropriateness of PAJA as a
regulatory framework if legality
review might yield a different
result, this need not be an insurmountable hurdle to disposing of the
present matter within the
confines of PAJA.  It may well be that
there are differences, even significant differences, between
condonation in terms of
section 9 of PAJA and unreasonable delay
under legality review in some cases, but this is not so here.
[30]
In the present matter, for reasons set out below, the delay is found
to be both unreasonable and outside of the 180-day time
limit.
[31]
The practical implication is that, on these particular facts, it is
essentially the same enquiry conducted by the Court as
would be the
case if assessing the application for condonation within the
framework of legality review.  The delay in instituting
review
proceedings in terms of the principle of legality would have been
unreasonable and would not have been met with condonation,
for the
same reasons that are set out below.
Khumalo
confirmed that unreasonable delay in
legality review proceedings must be considered in the broader context
of the matter, including
the prejudice that would result for other
parties and the consequences of setting aside an action or
decision.
[32]
At what point does the
180-day period begin to run?
[38]
During the hearing, the City
submitted that it no longer stood by the concession that it had made
before the SCA, i.e. “that
it could not be argued that [the
City] was unaware of Aurecon’s involvement in the
pre-feasibility exercise from the onset”.
[33]
The City contended that knowledge by the BEC of Aurecon’s
involvement in the pre feasibility study could not be
imputed to
the BAC and subsequently to the City.  On its own admission, it
nailed its colours to this mast.  The City
conceded that should
this Court find that the BAC was vested with the knowledge of the
BEC, then the City’s contention fails.
[39]
The SCMP defines the “City”
as “the municipality of the City of Cape Town or any person(s)
or committee delegated with the
authority to act on its behalf
”.
[34]
The distinction that the City attempts to draw between what is within
its own knowledge and what is within the knowledge
of its committees
is superficial.  It is common cause that the BEC and the BAC are
committees mandated by the City for purposes
of the tender
procurement process.  These committees form part of an internal
arrangement by the City.  Accordingly,
it may reasonably be
expected that all information regarding the tender process which is
within the knowledge of the BAC or BEC,
may be deemed to be within
the City’s knowledge.  In my view, that is a weak attempt
by the City to deny knowledge of
what it ought reasonably to have
known.
[40]
The City also attempted to
distinguish its knowledge of “reasons” from its knowledge
of “irregularities”.
In this regard, the City was
of the view that the reference to “reasons” in section
7(1)(b) of PAJA does not refer
to formal reasons furnished in terms
of section 5 of the Act but merely to “the relevant events
giving rise to the particular
decision and which render it
susceptible to review”.
[41]
On a textual level, the City’s
contention confuses
two discrete concepts:
reasons
and
irregularities
.
Section 7(1) of PAJA does not provide that an application must be
brought within 180 days after the City became aware that
the
administrative action was tainted by irregularity.  On the
contrary, it provides that the clock starts to run with reference
to
the date on which the reasons for the administrative action became
known (or ought reasonably to have become known) to an applicant.
[42]
On a purposive level, the City’s
interpretation would give rise to undesirable outcomes.
As
the SCA pointed out, the City’s interpretation would—
“
automatically
entitle every aggrieved applicant to an unqualified right to
institute judicial review only upon gaining knowledge
that a decision
(and its underlying reasons), of which he or she had been aware all
along, was tainted by irregularity, whenever
that might be.
This result is untenable as it disregards the potential prejudice to
[Aurecon] and the public interest in
the finality of administrative
decisions and the exercise of administrative functions.”
[35]
[43]
In my view, the City cannot suggest
that it “was not aware of the reasons for the decision prior to
receipt of the [Ernst
& Young] report”.  The decision
was taken by the BAC which approved the BEC’s report without
qualification.
The resolution of the BAC records that it
awarded the tender to Aurecon “for the reasons set out in the
[BEC’s] report”.
Since the BEC’s report
served before the BAC, the BAC must have been aware of those reasons
when it made its decision.
[44]
What emerges from this discussion is
that the City clearly brought its application outside the 180-day
period prescribed by section
7(1) of PAJA.  However, this does
not necessarily mean that its review application cannot be
entertained.  Section 9
of PAJA allows the Court to shorten or
extend the periods relating to non compliance with the
stipulated time periods “where
the interests of justice so
require”.  What follows is an assessment of the City’s
case for condonation.
Condonation in terms of
section 9 of PAJA
[45]
The City launched its application
532 days after the decision to award the tender to Aurecon was made.
Taking the 180-day
period into account, its application was 352 days
late.  The question is whether the City has made a proper case
for condonation.
This will invariably require determining
whether the City offered a satisfactory explanation that necessitates
a relaxation of
the rules in the interests of justice.
[46]
Section 237 of the Constitution sets
out that “[a]ll constitutional obligations must be performed
diligently and without delay”.
In
a similar vein, section 7(1) of PAJA states that “[a]ny
proceedings for judicial review . . . must be instituted
without
unreasonable delay
”.  The
SCA, relying on this Court’s decisions in
Van
Wyk
[36]
and
eThekwini
,
[37]
adeptly set out the factors that need to be considered when granting
condonation as follows:
“
Factors
that are relevant to this enquiry include but are not limited to the
nature of the relief sought, the extent and cause of
the delay, the
effect of the delay on the administration of justice and other
litigants, the reasonableness of the explanation
for the delay, the
importance of the issue to be raised in the intended appeal and the
prospects of success.”
[38]
[47]
In considering whether condonation
should be granted to the City, the following principle enunciated in
the majority decision of
Kirland
should
be borne in mind:
“
There
is a higher duty on the state to respect the law, to fulfil
procedural requirements and to tread respectfully when dealing
with
rights.  Government is not an indigent or bewildered litigant,
adrift on a sea of litigious uncertainty, to whom the
courts must
extend a procedure-circumventing lifeline.  It is the
Constitution’s primary agent.  It must do right,
and it
must do it properly.”
[39]
[48]
The City’s application was
nearly a year late.  The City was questioned during the hearing
specifically on the seven
month delay from 17 January 2012 to
29 August 2012.  The former was the date on which
Aurecon was informed
that a pending appeal against the award of the
tender had been resolved.  The latter was the date on which the
City tabled
the award for consideration in terms of section 33 of the
MFMA.  Its counsel could not offer any reason for the delay
other
than ascribing it to bureaucratic governmental processes.
Suffice to say, this explanation is unsatisfactory.
[49]
Nonetheless, due regard must also be
given to the importance of the issue that is raised and the prospects
of success.  In
this case, that means considering the
significance of the alleged procedural irregularities that were
raised in the Ernst & Young
report.  It should be
borne in mind that, when carrying out a legal evaluation a court
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”.
[40]
[50]
The SCA held that the procedural
irregularities as alleged were not in fact irregularities at all and,
before this Court, the City
did little to assuage that finding.
[41]
If the irregularities raised in the report had unearthed
manifestations of corruption, collusion or fraud in the tender
process, this Court might look less askance in condoning the delay.
The interests of clean governance would require judicial

intervention.  However, this is not such a case and a weighing
of factors leans decidedly against granting condonation.
[51]
Over and above the City’s
inadequacies on the merits of its condonation argument, it also
failed to root its discretionary
challenge properly.  Although
the City asked for condonation in its notice of motion, it does not
challenge the SCA’s
exercise of discretion to refuse the
granting of condonation in its papers before this Court.  In
proffering an explanation
for the delay, the City merely states that
“it will be in the interests of justice to grant condonation”.
The
rest of the condonation argument is effectively a disavowal
of the SCA’s interpretation.  No doubt, this explanation

is completely inadequate and unsatisfactory.  Since the City
does not suggest that the SCA erred in refusing to grant condonation

that is the end of the enquiry.  On this ground too, the appeal
should be dismissed.  Although the matter has been decided
on
the basis of PAJA, the City’s claim would have nevertheless
failed under legality because, even on those terms, the delay
was
unreasonable.
[42]
[52]
On an aside, the City also tried to
persuade us that the SCA had unduly interfered with what it termed
the “true discretion”
of the High Court in refusing
condonation when the High Court would have, in counsel’s terms,
granted it.  This submission
was incorrect.  The High Court
had found it unnecessary to consider condonation since, on its
interpretation, the 180-day
period had not yet lapsed.  There
can be no question of undue interference by the SCA where no
discretion to grant condonation
has been exercised by the High
Court.  If anything, the SCA had exercised a narrow discretion
in refusing to grant condonation.
[43]
As was recently held by this Court, “[i]nterference on appeal
in a lower court’s exercise of a discretion is
possible only if
the discretion was not judicially exercised”.
[44]
[53]
In the result, the City has not
advanced any persuasive submission that the SCA’s discretion
was not exercised judicially.
Prior involvement of a
prospective tenderer
[54]
Given that this matter is disposed
of on the basis that the City was out of time and failed to make out
a proper case for condonation
in terms of section 9 of PAJA, it is
not necessary to venture into the arguable point of law raised,
namely the prior involvement
of a prospective tenderer.
Although the applicant and CESA implored this Court to pronounce on
the proper meaning of “involved
with” as contained in
regulation 27(4) of the SCM Regulations and clause 95 of the SCMP,
the general principle as set out
by this Court in
National
Coalition
is that this Court does not
pronounce on issues which are moot (which essentially would equate to
providing an advisory opinion).
[45]
The question of “involved with” becomes moot by virtue of
the fact that the City failed to make a case for condonation.

However, the determination by the Court that a matter is moot is a
discretion that must be exercised taking the interests of justice

into account.
[46]
In
Independent Electoral Commission
,
the Court held as follows:
“
This
Court has a discretion to decide issues on appeal even if they no
longer present existing or live controversies.  That
discretion
must be exercised according to what the interests of justice
require.  A prerequisite for the exercise of the discretion
is
that any order which this Court may make will have some practical
effect either on the parties or on 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
advanced.  This does not mean, however, that once
this Court has
determined one moot issue arising in an appeal it is obliged to
determine all other moot issues.”
[47]
[55]
I accordingly will not be venturing
into any discussion on prior involvement.  In the result, the
application falls to be dismissed.
Costs
[56]
Since the City is unsuccessful in
seeking leave to appeal, the ordinary
Biowatch
principles apply.
[48]
Aurecon is entitled to its costs, including the costs of two counsel,
which are warranted given the complexity of the matter.
Order
[57]
In the result, the following order
is made:
1.
Leave to appeal is refused.
2.
The application is dismissed with costs, including the costs of two
counsel.
For the
Applicants:

A Katz SC and P S van Zyl instructed by Cliffe Dekker Hofmeyr
For the
Respondent:
A Cockrell
SC and J A van der Westhuizen instructed by Weavind &
Weavind
For the Amicus
Curiae:
N Ferreira and L Nyangiwe instructed by
Hogan Lovells (South Africa)
Inc
[1]
Aurecon South Africa (Pty) Ltd v City of Cape
Town
[2015] ZASCA 209
;
2016 (2) SA 199
(SCA) (SCA judgment).
[2]
City of Cape Town v Aurecon South Africa (Pty)
Ltd
[2014] ZAWCHC 51
(High Court
judgment).
[3]
3 of 2000.
[4]
56 of 2003.  Section 33 provides:
“
(1)
A municipality may enter into a contract which will impose financial
obligations
on the municipality beyond a financial year, but if the
contract will impose financial obligations on the municipality
beyond
the three years covered in the annual budget for that
financial year, it may do so only if—
(a)
the municipal manager, at least 60 days
before the meeting of the municipal council at which the contract is
to be approved—
(i)
has, in accordance with section 21A of the Municipal Systems
Act—
(aa)
made public the draft contract and an information statement
summarising the
municipality’s obligations in terms of the
proposed contract; and
(bb)
invited the local community and other interested persons to submit
to the
municipality comments or representations in respect of the
proposed contract; and
(ii)
has solicited the views and recommendations of—
(aa)
the National Treasury and the relevant provincial treasury;
(bb)
the national department responsible for local government; and
(cc)
if the contract involves the provision of water, sanitation,
electricity,
or any other service as may be prescribed, the
responsible national department;
(b)
the municipal council has taken into account—
(i)
the municipality’s projected financial obligations in
terms of
the proposed contract for each financial year covered by the
contract;
(ii)
the impact of those financial obligations on the municipality’s

future municipal tariffs and revenue;
(iii)
any comments or representations on the proposed contract received

from the local community and other interested persons; and
(iv)
any written views and recommendations on the proposed contract by
the
National Treasury, the relevant provincial treasury, the
national department responsible for local government and any
national
department referred to in paragraph (a)(ii)(cc); and
(c)
the municipal council has adopted a resolution in which—
(i)
it determines that the municipality will secure a significant

capital investment or will derive a significant financial economic
or financial benefit from the contract;
(ii)
it approves the entire contract exactly as it is to be executed;
and
(iii)
it authorises the municipal manager to sign the contract on behalf
of the municipality.
(2)
The process set out in subsection (1) does not apply to—
(a)
contracts for long-term debt regulated in terms of section 46(3);
(b)
employment contracts; or
(c)
contracts—
(i)
for categories of goods as may be prescribed; or
(ii)
in terms of which the financial obligation on the municipality
is
below—
(aa)
a prescribed value; or
(bb)
a prescribed percentage of the municipality’s approved budget
for the
year in which the contract is concluded.
(3)
(a)

All contracts referred to in subsection (1) and all other contracts
that impose
a
financial obligation on a municipality—
(i)
must be made available in their entirety to
the municipal council;
and
(ii)
may not be withheld from public scrutiny except
as provided for in
terms of the Promotion of Access to Information Act, 2000 (Act No. 2
of 2000).
(b)
Paragraph (a)(i) does not apply to contracts in respect of which
the
financial obligation on the municipality is below a prescribed
value.
(4)
This section may not be read as exempting the municipality from
the
provisions of Chapter 11 to the extent that those provisions are
applicable in a particular case.”
[5]
32 of 2000.
[6]
No allegations of corruption were in fact made.
See [50] below.
[7]
Clause 200 of the Supply Chain Management Policy
requires that BEC meetings be conducted in accordance with the
applicable Rules
of Order regulating the conduct of meetings of the
Bid Specification Committee (BSC), BEC and BAC.
[8]
Regulation 27(4) of the SCM Regulations and
clause 95 of the SCMP both provide:
“
No person,
advisor or corporate entity involved with the bid specification
committee, or director of such a corporate entity,
may bid for any
resulting contracts.”
[9]
High Court judgment above n 2 at para 77.
[10]
High Court judgment above n 2 at para 60.
[11]
Section 7(1) of PAJA provides:
“
Any
proceedings for judicial review in terms of section 6(1) must be
instituted without unreasonable delay not later than 180
days after
the date—
(a)
subject to subsection (2)(c), on which any proceedings instituted
in
terms of internal remedies as contemplated in subsection (2)(a) have
been concluded; or
(b)
where no such remedies exist, on which the person concerned was

informed of the administrative action, became aware of the action
and the reasons for it or might reasonably have been expected
to
have become aware of the action and the reasons.”
Section 9 of PAJA, in
relevant part, reads:
“
(1)
The period of—
. . .
(b)
90 days or 180 days referred to in
sections 5 and 7 may be extended for a fixed period, by agreement
between the parties or, failing
such agreement, by a court or
tribunal on application by the person or administrator concerned.
(2)
The court or tribunal may grant an application in terms of
subsection
(1) where the interests of justice so require.”
[12]
SCA judgment above n 1 at para 12.
[13]
Section 7(1) of PAJA.
[14]
Section 9 of PAJA.
[15]
SCA judgment above n 1 at para 14.
[16]
Id at para 16.
[17]
Id at paras 19-20.
[18]
The SCA used the example of paragraph 5.9.5.5 of
the National Treasury MFMA Circular No 53: Amended Guidelines in
respect of Bids
that include Functionality as a Criterion for
Evaluation dated 3 September 2010.
[19]
SCA judgment above n 1 at para 41.  The City
preferred an interpretation of the term “involved with”
to the effect
that any involvement by a potential bidder in a
project would result in its disqualification from the tendering
process.
The SCA termed this a “wider interpretation”.
[20]
Id at para 44.
[21]
See [29]-[30] below.
[22]
This section provides:
“
(1)
When an organ of state in the national, provincial or local sphere
of government,
or any other institution identified in national
legislation, contracts for 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 must prescribe a framework within which the

policy referred to in subsection (2) must be implemented.”
[23]
See
Fabricom SA v
État Belge
[2005] ECR I-1559
,
ECJ;
[2005] All ER (D) 67
(Mar)
.
[24]
Paulsen v Slip Knot Investments 777 (Pty) Ltd
[2015] ZACC 5
;
2015 (3) SA 479
(CC) at paras 12-31.
[25]
This section reads as follows:
“
(1)
Everyone has the right to administrative action that is lawful,
reasonable
and procedurally fair.
(2)
Everyone whose rights have been adversely affected by administrative

action has the right to be given written reasons.
(3)
National legislation must be enacted to give effect to these rights,

and must—
(a)
provide for the review of administrative action by a court or, where

appropriate, an independent and impartial tribunal;
(b)
impose a duty on the state to give effect to the rights in
subsections
(1) and (2); and
(c)
promote an efficient administration.”
[26]
In
Khumalo v MEC for
Education: KwaZulu-Natal
[2013] ZACC
49
;
2014 (5) SA 579
(CC);
2014 (3) BCLR 333
(CC), this Court
considered the nature of an application that was made in terms of
section 158(1)(h)
of the
Labour Relations Act 66 of 1995
to review
the administrative acts of decision making officials.  At
para 28, the majority found that the “true
nature of the
application [was] one for judicial review under the principle of
legality”.  The minority, on the other
hand, at para 92,
found that “the procedure for bringing [the] application to
Court was governed by the PAJA”.
More generally, the
interplay between review under PAJA and legality review has been
extensively discussed and has, at times,
given rise to differing
interpretations in this Court’s jurisprudence.  See the
cases of:
Pharmaceutical Manufacturers
Association of South Africa: In re Ex Parte President of the
Republic of South Africa
[2000] ZACC
1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241
(CC);
Minister
of Health v New Click South Africa (Pty) Ltd
[2005]
ZACC 14
;
2006 (2) SA 311
(CC);
2006 (1) BCLR 1
(CC);
Masetlha
v President of the Republic of South Africa
[2007]
ZACC 20
;
2008 (1) SA 566
(CC);
2008 (1) BCLR 1
(CC);
Albutt
v Centre for the Study of Violence and Reconciliation
[2010] ZACC 4
;
2010 (3) SA 293
(CC);
2010 (5) BCLR 391
(CC).
[27]
See for example
Azanian
Peoples Organization (AZAPO) v President of the Republic of South
Africa
[1996] ZACC 16
;
1996 (4) SA 671
(CC);
1996 (8) BCLR 1015
(CC) at para 16;
Matatiele
Municipality v President of the Republic of South Africa
[2006]
ZACC 2
;
2006 (5) SA 47
(CC);
2006 (5) BCLR 622
(CC) at para 67.
[28]
Ferreira v Levin NO; Vryenhoek v Powell NO
[1995] ZACC 13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) at para 165.
[29]
Albutt
above n
26 at para 82.
[30]
This may be because of the wording of
section
7(1)
of PAJA which reads:
“
Any
proceedings for judicial review in terms of
section 6(1)
must be
instituted without unreasonable delay and no later than 180 days . .
.”
Courts, when assessing
“unreasonable delay” under PAJA may be guided by the
outer-limit of 180 days set in
section 7(1)
, while no such limit
exists under legality review.
[31]
See [45]-[53].
[32]
See this Court’s approach to unreasonable
delay in the context of legality review in
Khumalo
above n 26 at para 52.  In
Gqwetha v Transkei Development
Corporation Ltd
[2005] ZASCA 51
;
2006
(2) SA 603
(SCA), the majority of the SCA held that when considering
a plea of undue delay, the Court should assess: (1) whether the

delay is unreasonable or undue (a factual enquiry upon which a value
judgment is made in the light of “all the relevant

circumstances”); and if so (2) whether the court’s
discretion should be exercised to overlook the delay and
nevertheless
entertain the application.
[33]
SCA judgment above n 1 at para 15.
[34]
Clause 1.6 of the SCMP.
[35]
SCA judgment above n 1 at para 16.
[36]
Van Wyk v Unitas Hospital
[2007]
ZACC 24
;
2008 (2) SA 472
(CC);
2008 (4) BCLR 442
(CC) at
para 20.
[37]
eThekwini Municipality v Ingonyama Trust
[2013] ZACC 7
;
2014 (3) SA 240
(CC);
2013 (5) BCLR 497
(CC) at para 28.
[38]
SCA judgment above n 1 at para 17.
[39]
MEC for Health, Eastern Cape v Kirland
Investments (Pty) Ltd
[2014] ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC) (
Kirland
)
at para 82.
[40]
Allpay Consolidated Investment Holdings (Pty)
Ltd v Chief Executive Officer of the South African Social Security
Agency
[2013] ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) at para 28.
[41]
SCA judgment above n 1 at para 43.
[42]
See
Wolgroeiers
Afslaers v Munisipaliteit van Kaapstad
1978
(1) SA 13
(A) and more recently,
Khumalo
above n 26
at
para 44 where this Court held that “it is a long-standing rule
that a legality review must be initiated without undue
delay and
that courts have the power (as part of their inherent jurisdiction
to regulate their own proceedings) to refuse a review
application in
the face of an undue delay in initiating proceedings”.
[43]
Trencon Construction (Pty) Ltd v Industrial
Development Corporation of South Africa Ltd
[2015]
ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC).
[44]
Psychological Society of South Africa v
Qwelane
[2016] ZACC 48
at para 42.
[45]
National Coalition for Gay and Lesbian
Equality v Minister of Home Affairs
[1999]
ZACC 17
;
2000 (2) SA 1
;
2000 (1) BCLR 39
(
National
Coalition
) at para 21 footnote 18.
[46]
Sanderson v Attorney-General, Eastern Cape
[1997] ZACC 18
;
1998 (2) SA 38
(CC);
1997 (12) BCLR 1675
(CC) at
para 17.
[47]
Independent Electoral Commission v Langeberg
Municipality
[2001] ZACC 23
;
2001 (3)
SA 925
(CC);
2001 (9) BCLR 883
(CC) at para 11.
[48]
Biowatch Trust v Registrar Genetic Resources
[2009] ZACC 14
;
2009 (6) SA 232
(CC);
2009 (10) BCLR 1014
(CC) (
Biowatch
)
at para 43.