Eden Security Services CC and Others v Cape Peninsula University of Technology and Others (17703/2013) [2014] ZAWCHC 148 (8 September 2014)

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[2014] ZAWCHC 148
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Eden Security Services CC and Others v Cape Peninsula University of Technology and Others (17703/2013) [2014] ZAWCHC 148 (8 September 2014)

IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO. 17703/2013
REPORTABLE
In
the matter between:
EDEN
SECURITY SERVICES CC
FIRST
APPLICANT
SECURITAS
SA (PTY) LTD
SECOND
APPLICANT
DE
TARGET SECURITY CC
THIRD
APPLICANT
PRO
EVENTS SECURITY SERVICES CC
FOURTH
APPLICANT
And
CAPE
PENINSULA UNIVERSITY
OF
TECHNOLOGY
FIRST
RESPONDENT
MAUEL
SECURITY CC
SECOND
RESPONDENT
MGEBE
SECURITY SERVICES CC
THIRD
RESPONDENT
BYERS
SECURITY
FOURTH
RESPONDENT
FIDELITY
SECURITY SERVICES
FIFTH
RESPONDENT
JUDGMENT
DELIVERED ON MONDAY, 08 SEPTEMBER 2014
DLODLO, J
INTRODUCTION
[1]
This application seeks to review and set aside the decision by the
First Respondent (“CPUT”)
to award the public tender CPUT
06/12 for the provision of physical guarding services (in papers also
referred to as “security
services”) at its various
premises to the Second to Fifth Respondents on or about 7 September
2013. The relief sought by
the Applicants is for the decision to be
remitted to the Technical Team, Tender Committee, Management
Committee, Financial Committee
and Council of CPUT in terms of the
schedule set out in paragraph 1.2 of the tender. All five Respondents
filed notices to oppose
the application but notably no Affidavits
have been filed on behalf of the Second Respondent.
[2]
An urgent application for an interim relief pending adjudication of
this review was set down for hearing
on 31 October 2013. On the
latter date an order was granted by my brother, Le Grange J.  This
was an order by agreement between
the Applicants on the one hand and
the First, Fourth and Fifth Respondents on the other. This order set
down the review application
for hearing on the fourth Division roll
on 9 December 2013 and withdrew the interim relief sought in
paragraph 4 of the Notice
of Motion. The agreed order also provides
that CPUT will not be entitled to rely on the point that the Second
to Fifth Respondents
had already taken over the security services as
from 1 November 2013, but that it shall be permitted to rely on steps
taken prior
thereto to implement the impugned decisions. The order
also set out a timetable in terms of which the Rule 53 record and the
parties’
further Affidavits were to be filed. It was, however,
not possible to adhere to the timetable for some reasons some of
which appear
from the condonation application subsequently filed on
behalf of the Applicants.
BACKGROUND
[3]
The First to Third Applicants won the previous tenders for providing
physical guarding services at CPUT’s
various campuses. The
First Applicant was reportedly founded in 1997 and has been
consistently providing security services in the
Western Cape area,
Northern Cape and the Garden Route since that time. Until it lost the
tender contract which is the subject matter
in this matter, the First
Applicant had been providing security services for over five years
since 1 July 2008 at the CPUT’s
campuses at Granger Bay, the
Thomas Patullo Building in Cape Town, Somerset Square, Waterside
Building and Long Street, Cape Town.
[4]
The Second Applicant as gathered from the Founding papers is part of
a nationwide group of companies
and has been providing security
services to CPUT at its Bellville campuses since 2008. The Second
Applicant also provides security
services to the University of the
Western Cape and “
considers itself to be somewhat of a
segment specialist”
in providing security to tertiary
education institutions. The Second Applicant also manages and
controls the surveillance system
of the City of Cape Town throughout
the whole Metropole as well as control room system of numerous public
open space environments
on behalf of various City improvement
districts.
[5]
The Founding papers reveal that the Second Applicant has a state of
the art training facility, substantial
infrastructure in terms
operation support, radio and tracking systems and it describes itself
as being one of the leading security
companies in the Western Cape in
terms of service, support mechanisms, training and general
operational systems. Its Managing Director
(Mr Sangster) has 33
years’ experience in the industry, and has been the
Vice-Chairperson of the South African Security Association
(“SASA”).
The Second Applicant’s Operations Director, Mr Wragg, has 10
years’ experience as Security Manager
at tertiary institutions.
[6]
The Third Applicant is a small exempt micro enterprise which has been
the security service provider
at CPUT’s Wellington campus for
the past 4½ years. CPUT was the Third Applicant’s
largest contract and it formed
a significant part of its annual
turnover. As a result of losing the contract under discussion (I am
told) the Third Applicant
had to retrench 44 employees thereby
adversely affecting the job opportunities they had created in the
local Wellington community.
The Fourth Applicant has in the past
provided ad hoc services to CPUT at functions and events.
[7]
During 2011 CPUT put out to public tender the provision of physical
guarding services at its campuses.
However, nothing came of this
tender and the First Applicant received a notice from CPUT that it
was to continue with its existing
contract. No explanation was given
as to why the tender process had been abandoned. During June 2012,
CPUT again put out to tender
the provision of physical guarding
services at its campuses. The First, Second and third Applicants
again submitted tenders and
were visited at their premises as part of
an evaluation process. The Second Applicant described the visit it
received in 2012 as
follows: (a) The Task Team introduced themselves
and first visited the human resources offices, where they randomly
drew three
staff files and examined contracts of employment, proof of
PSIRA registration and one or two additional documents. (b) They then

had an in-depth consultation with the directors of the company. (c)
They visited the operations office and the control room, and
also
acknowledged the general office and finance office. (d) Each of the
members of the Task Team had a score sheet on which notes
were made
during the inspection. (c) They stayed for about an hour.
[8]
It appears from the minutes of the Financial Committee of the Council
of CPUT dated 2 November 2012
that the First Applicant was
recommended by the Tender Committee to the Finance Committee to be
awarded the Cape Town campus and
the Second Applicant scored second
highest on the overall score with 75.3 out of 100 points. It scored
7.3 out of 10 for site inspection.
It is maintained that the Second
Applicant (after having scored so high on functionality during 2012)
was eliminated on this exact
criteria
the very next year.
Moreover, the Second Applicant claims that it subsequently upgraded
its infrastructure and processes. The Third
Applicant averred that it
has reason to believe that the 2012 tender process was abandoned due
to allegations of irregularities.
Of course (CPUT) denied this. On 28
March 2013 all CPUT’s security services providers (including
the Second and Third Applicants)
received a letter from CPUT
indicating that their existing contracts terminate on 31 March 2013
(3 days after the date of the notice)
but that CPUT would like to
extend the current contracts with an additional month until 30 April
2013. The security providers were
given until close of business on
the same day to accept this.
[9]
According to Ms Snelling of the First Applicant “
30 April
2013 came and went and the First Applicant simply continued to
provide the security services without further formal arrangement

being put in place.”
The  invitation for tender CPUT
06/12 was published on 15 June 2013. The closing date was 25 June
2013. Following publication
of the tender invitation, a mandatory
information session was held. At the information session, Mrs
Nicolene Andipatin, the Head
of Procurement and Stores of CPUT
discussed the tender documents in detail and highlighted the service
requirements. According
to the Founding papers (not disputed in
Answering papers) she stated
inter alia
that preference points
would be given to small, medium and micro-sized enterprises (“SMMEs”)
and also noted that the
meeting was compulsory for interested
parties.  All the Applicants submitted their tenders timeously.
After the deadline had
expired a “opening of tenders”
session was held at which the tender documents were opened. The names
of all the bidding
companies were read out along with their tender
prices. The First Applicant thereafter continued to provide the
security services,
and nothing was apparently heard from CPUT. The
First Applicant attempted on a number of occasions to contact CPUT’s
officials
who had been initially involved with the tender, namely Mrs
Andipatin and Mrs Thembeka Madondo but were eventually informed that

they had both resigned. The Second Respondent’s managing
director, Mr Sangster, states that Messrs Andipatin and Madondo
were
the two persons with whom he had a good relationship and that he
believes that they were somewhat compelled to resign.
[10]
An allegation is made by the Second Applicant that one Mr Schabir
Laing who was the head of campus protection of
CPUT was removed from
his post during about June 2013 (shortly before the tender process
was officially started). According to
Mr Sangster Mr Laing was
considered to have impeccable integrity and an inference is drawn
that he was removed to prepare the way
for a flawed process. Ms
Snelling of the First Applicant states that she became “
very
concerned about the situation due to the lack of communication and
uncertainty about the First Applicant’s contract with
the First
Respondent.”
The Second Applicant was the only one of
the Applicants that was visited for a site inspection. The Second
Applicant describes
this site inspection as follows: (a) It was
conducted haphazardly and lasted about twelve minutes. (b) The
members of the Task
Team only visited the control room. (c) They did
not have score sheets with them and indicated they had extremely
limited time.
[11]
On 11 September 2013, the First Applicant and the other existing
service providers received notice of a meeting
which was to be held
with CPUT’s officials on Friday 13 September 2013. The latter
meeting was hosted by the acting security
manager of CPUT, Mr Luyolo
Myanya, and the security supervisor for the Bellville campus, Mr
Etienne Saaiman. The tenderers present
were informed that their
tenders had been unsuccessful and that the tender had been awarded to
parties whom CPUT’s officials
refused to name. The reason
proffered was that the winners had themselves not yet been informed.
The First Applicant was notified
in writing on 16 September 2013 that
its contract would terminate on 31 October 2013 and that its tender
had been unsuccessful.
THE
CIRCUMSTANCES ADVANCED BY THE APPLLICANTS NECESSITATING THIS
APPLICATION
[12]
On 16 September 2013, the First Applicant sent various e-mails to the
various relevant officials at CPUT requesting
in terms of the
Promotion of Access to Information Act, 2 of 2000 (“PAIA”),
the names of the entities which had won
the tender as well as the
detailed processes followed in the adjudication of the tender.
Reportedly no response was forthcoming.
Subsequently on 1 October
2013 the First Applicant wrote to the above parties (copying the
other existing service providers) and
indicated that the information
is sought on the basis of concerns of certain irregularities in the
tender process. No response
was elicited by this writing either.
[13]
The Applicants’ attorney of record, one Mr Eben Klue thereafter
addressed a letter to CPUT and this letter
is dated 4 October 2013.
In this letter Mr Klue asked for the relevant information to be
supplied by 7 October 2013. This letter
is Annexure “CS13”
to the Founding papers. The letter highlighted the urgency of the
matter as the Applicants wanted
to establish whether or not the
tender process had been conducted fairly and honestly prior to the
termination of their then existing
service agreements on 1 November
2013. The response received was that the matter was receiving
attention. There was thereafter
a telephonic conversation between
attorney Klue and the legal department of CPUT. Mr Klue was advised
that the request for information
was still being processed and that
the tender has been awarded and that the new service providers would
start on 1 November 2013.
[14]
It is only thereafter that the Applicants launched this application
on urgent basis on 25 October 2013. I gather
from the Founding papers
that at the time of launching this application, the names of the
successful tenderers had still not been
disclosed to the Applicants.
According to the Founding papers the successful bidders had, however,
already been arriving at the
various sites claiming that they were
preparing to take over the contracts and actively recruiting
employees of the Applicants.
Papers reveal that the decision to award
the tenders to the Second to Fifth Respondents was taken by CPUT on 7
September 2013.
According to the Founding papers the
prima facie
evidence of irregularities was confirmed once the tender record was
received in terms of an order by this Court.
THE
TENDER RECORD
[15]
The tender record revealed that the First Applicant had been
eliminated on the basis of allegedly not submitting
all mandatory
documents (first phase process). Notably the First Applicant insists
that all mandatory documents had been submitted.
The Second Applicant
was advanced to the second phase of the tender process (the
functionality evaluation) but it failed to achieve
the 70 points
required despite its vast experience and previously achieved high
score in this
criterium
. The Third Applicant was also
eliminated in the first phase of the evaluation due to failure to
submit mandatory documents.
THE
ISSUES FOR DETERMINATION
[16]
The Applicants have brought these review proceedings in terms of the
Promotion of Administrative Justice Act 3
of 2000 (“PAJA”)
but the Respondents are of the view that PAJA does not apply to
CPUT’s decision in that, in
their contention CPUT is not an
“organ of state” or other entity contemplated in Section
1 of PAJA. Thus it is an issue
for decision whether or not CPUT is an
“organ of state” or other entity contemplated in Section
1 of PAJA. Put differently
the issue for determination is does the
impugned decision constitute “administrative action”?
Another issue for determination
is the challenge purportedly based on
the principle of legality?
IS
PAJA APPLICABLE TO DECISIONS MADE BY CPUT
[17]
Mr Joubert contended that yes, PAJA does apply to the decisions taken
by CPUT which are sought to be reviewed in
the instant matter.
Section 1 of PAJA defines “administrative action” as
follows:
“
Any decision
taken, or any failure to take a decision, by-
(a)
An
organ of state, when-
(i)
Exercising a power in terms of the Constitution or a
Provincial Constitution; or
(ii)
Exercising a public function in terms of any legislation; or
(b)
A
natural or juristic person, other than an organ of state, when
exercising a public power or performing a public function in terms
of
an empowering provision, which adversely affects the rights of any
person and which has a direct, external legal effect…..”

An “organ of State” in turn is defined as bearing the
meaning assigned to it in Section 239 of the Constitution. I
agree
that of the provisions contained in the definition of “organ of
state” in the Constitution for purposes of this
case only those
contained in (b) (ii) may be relevant. These are:
“
(b) any
functionary or institution –
(i)
……
..
(ii)
Exercising a public power or performing a public function in
terms of any legislation.””
[18]
Accordingly Mr Joubert submitted that CPUT is an institution, namely
a juristic person, that in general and in
its procurement processes,
performs a public function in terms of legislation and/or an
empowering provision, and accordingly is
(a) an organ of state in
terms of Section 239 of the Constitution, particularly (b) (ii) of
the definition of “organ of state”;
in the alternative Mr
Joubert contended that CPUT is a juristic person other than an organ
of state exercising a public function
in terms of an empowering
provision as contemplated by sub-paragraph (b) of the definition of
“administrative action”
in PAJA.
[19]
Mr Joubert enumerated the following as facts which, in his view,
underpinned his above submission: (a) CPUT is
a public higher
education institution as defined in, and governed by, the Higher
Education Act, 101 of 1997 (“the HEA”).
Section 27
provides that the institution must be governed by its council,
subject to the Act and the institutional statute. The
HEA also
provides extensively for representation of and oversight by the
Minister of Higher Education and Training. (b) CPUT, as
a public
higher educational institution, receives public funds in terms of
Section 38 G of the HEA. (c) CPUT is governed by an
institutional
statute drawn up in accordance with section 32 of the HEA published
by the Minister for Higher Education and Training
in Government
Gazette 33202 of 17 May 2010 (d) CPUT by its own account performs its
procurement in terms of various empowering
provisions of its
Procurement Policy which, in turn, is expressly stated to be subject
to certain legislation, policies and codes
of practice, including the
Preferential Procurement Policy Framework Act 97 of 2000 (“the
PPFA”), the Broad-based Black
Empowerment Act 53 of 2003
, and
the Public Finance Management Act 1 of 1999 (e) CPUT’s
Institutional Statute and the Procurement Policy qualify as an

“empowering provision” as defined in PAJA.
[20]
Mr Joubert relied heavily
on Simunye Development CC v Lovedale
Public FET College
2010 JDR 4568 (ECG), a decision which also
involved the judicial review of a tender award, the Respondent being
a college established
in terms of the Further Education and Training
Colleges Act 16 of 2006 (“the FET Act”). In this decision
the college
was held to be an organ of state as defined in the
Constitution. In that case the decision by the college to award a
tender was
held to have constituted an administrative act subject to
judicial review in terms of PAJA. The above judgment
inter alia
contains the following passage:
“
In
deciding whether or not a particular act constitutes administrative
action regard must be had, inter alia, to: the source of
the power
exercised; the nature of such power; its subject matter; whether it
involves the exercise of a public duty and how closely
it is related
to policy matters, which are not administrative, on the one hand and
the implementation of legislation on the other,
which is.
See: Pennington v Friedgood and Others
2002 (1) SA 251.
On this
test there can be little doubt that the first respondent, being an
institution which performs a public function, namely
teaching, is
funded by government and to a considerable extent controlled by it,
falls within this definition of an organ of state.
The act of
procuring for goods and services, whether in terms of the provisions
of the PPPFA or s.217 of the Constitution, must
of necessity be an
administrative act which is subject to judicial review. The
constitutional and/or legislative injunctions to
act fairly and
transparently would otherwise be devoid of any meaning.”
Mr Joubert is of the view
that exactly the same fact and considerations apply to CPUT. I have
been referred to a host of judgments
which, according to Mr Joubert,
support the
Simunye
case. These are:
Directory
Advertising Costs Cutters v Minister for Posts, Telecom­mu­nications
and Broadcasting and Others
1996 (3) SA 800
(T);
Lebowa
Mineral Trust v Lebowa Grannite (Pty) Ltd
2002 (3) SA 30
(TPD;
Minister of Education, Western Cape and Others v
Governing Body, Mikro Primary School and Another
2006 (1)
SA 1
(SCA);
Tirfu Raiders Rugby Club v South African Rugby
Union
[2005] 2 All SA 549
(C);
Max v Independent
Democrats
2005 (3) SA 112
(C);
Mittalsteel South Africa
Ltd (formerly Iscor Ltd) v Hlatshwayo
2007 (1) SA 66
(SCA);
Airports Company South Africa Ltd v Isoleisure OR Tambo (Pty)
Ltd and Another
2011 (4) SA 642
(GSJ);
Indwe Aviation v
Petroleum Oil and Gas Corporation of SA (No 1)
2012 (6) SA 96
(WCC)
[21]   I shall
fully consider Mr Joubert’s contention later on in this
judgment. It seems to me the question of
whether or not CPUT is an
organ of the State to which PAJA would apply is a vexed one. Before
leaving the case of
Simunye
supra
it is
important to note that the Court held further as follows:
“
Mr Ford has
correctly pointed to the fact that the definition of an "organ
of state" contained in the PPPFA differs from
that in the
Constitution...I agree with Mr Ford's submission that the first
respondent was therefore by law not compelled to procure
in terms of
the provisions of the PPPFA. In any event, being an organ of state as
defined in terms of the Constitution, the first
respondent was still
enjoined in terms of  s. 217 of the Constitution to contract for
goods or services, in accordance with
a system which is fair,
equitable, transparent, competitive and costs effective. Even though
the first respondent was not under
a legal compulsion to procure in
terms of the PPPFA, it has voluntarily adopted the scoring formulae,
adjudication principles and
criteria provided for in that Act and
prospective tenderers had submitted their tenders on the
understanding that their tenders
would be adjudicated in accordance
therewith. The tender could only have been fair and transparent if
their tenders were adjudicated
in terms of those stated criteria and
principles. There can therefore in my view be little doubt that a
failure on the part of
the first respondent to have substantially
complied with those principles would serve to vitiate any resultant
decision.”
Accordingly
Mr Joubert contended that in
casu
CPUT similarly voluntarily
adopted the principles set out in the PPPFA by incorporating
references thereto in its procurement policies.
[22]
Dealing with legal framework and principles Mr Joubert referred to
Section 35 (1) of the Constitution. This section
provides that
“
everyone has the right to administrative action that is
lawful, reasonable and procedurally fair.”
Even though I
shall deal in detail
infra
with the doctrine of legality in
passing one needs to mention that the common law principles of
administrative law continue to
inform post Constitutional
administrative law in the sense that what would have been
ultra
vires
under the common law is invalid under the Constitution, in
accordance with the doctrine of legality. See
Pharmaceutical
Manufacturers Association of SA and Others; in re Ex Parte
Application of President of the RSA and Others
[2000] ZACC 1
;
2000
(2) SA 674
(CC) at par 45; Cheadle
et
al
:
South
African Constitutional Law – the Bill of Rights
on
p. 27-7; Hoexter:
Administrative Law
in SA
pages 253 – 255. Of
course since the common law and the dictates of the principle
of legality have essentially been
codified in the grounds of review
set out in Section 6 of PAJA, it is always  to those grounds of
review that one ordinarily
turns first to establish the
lawfulness/validity of the action under consideration. Should any of
the grounds of review be found
to be present in a particular action,
it is invalid. Importantly, the principle of legality requires
invalid administrative action
to be declared thus and the
discretionary remedies provided by Section 8 of PAJA only follow upon
and do not precede a finding
of invalidity. See:
Bengwenyama
Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd
2011 (4) SA 113
(CC) at paras 84 & 85. In Mr Joubert’s
contention CPUT’s tender process had to comply with the
relevant enabling
provisions. He submitted and still relying on
Simunye
case
supra
that although CPUT does not qualify as an “organ of state”
in terms of the PPPFA, having voluntarily adopted the scoring

formulae, adjudication principles and criteria provided for in that
Act, had to substantially comply with its principles.
[23]
According to Mr Joubert’s submission CPUT’s internal
governance and policy documents provide the more
specific
requirements and principles to which its decision had to adhere in
order to be valid. In response to CPUT’s stance
in the latter
regard it was pointed out on behalf of the Applicants that to say
that internal documents serve merely as internal
guideline and afford
no rights to tenderers, this is based on a misconception of CPUT’s
own nature which Mr Joubert described
as that of a public body
performing a public function with public funds. In Mr Joubert’s
contention this misconception is
illustrated by CPUT’s denial
that its decisions constitute administrative action that is subject
to judicial review. Even
before this court decides on whether or not
such decisions in fact constitute administrative action and thus are
subject to judicial
review, it is important to mention in passing
that in matters dealing with tender irregularities- Courts are
inevitably called
upon to determine what degree of non-compliance
with the tender requirements results in the invalidity of the process
or decision.
Ordinarily a tenderer has a Constitutional right to
procedural fairness. See:
Millennium Waste Management v
Chairperson, Tender Board
2008 (2) SA 481
(SCA) at para 13.
[24]   The
PPPFA requires (as a precondition for application of the prescribed
formulae to a tender) that it must be an
“acceptable tender”.
The latter tender is defined as a tender “…
which, in
all respects, complies with the specification and conditions of
tender as set out in the tender document.”
See: PPPFA
sub-sections 1(i) and 2 (i) (b) and (c). The Supreme Court of Appeal
has dealt with the definition of “acceptable
tender” in
the PPPFA holding that such definition must be construed against the
background of the system envisaged by Section
217 (1) of the
Constitution, namely one which is “
fair, equitable,
transparent, competitive and cost effective and that as such
compliance issues must accordingly be judged against
those values”
.
See:
Chairperson: Standing Tender Committee and Others v JFE
Sapela Electronics (Pty) Ltd and Others
2008 (2) SA 638
(SCA)
at para 14.
[25]
Talking to the proper legal approach in matters of judicial review
recently the Constitutional Court enunciated
legal principles which
may be relevant in
casu
in
Allpay Consolidated Investment
Holdings (Pty) Ltd and Others v CEO of the South African Social
Security Agency and Others
2014 (1)
SA 604
(CC). The Constitutional Court held
inter
alia
that: “
(a)
The suggestion that ‘inconsequential irregularities’ are
of no moment conflates the test for irregularities and
their import;
hence an assessment of the fairness and lawfulness of the procurement
process must be independent of the outcome
of the tender process. (b)
The materiality of compliance with legal requirements depends on the
extent to which the purpose of
the requirements is attained. (c) The
Constitutional and legislative procurement framework entails supply
chain management prescripts
that are legally binding. (d) The
fairness and lawfulness of the procurement process must be assessed
in terms of the Promotion
of Administrative Justice Act 18 (PAJA).
(e) Black economic empowerment generally requires substantive
participation in the management
and running of any enterprise. (f)
The remedy stage is where appropriate consideration must be given to
the public interest in
the consequences of setting the procurement
process aside.”
I hope to return
to the principles set out in the above Constitutional Court judgment.
SOUTH AFRICAN CASE LAW
[26]
Regarding the scope of judicial review and the meaning of
administrative action in this Country it is of importance
to note
that our Courts have held
inter alia
: (a) In cases concerning
the scope of public law judicial review Courts have looked quite
consistently to the presence or absence
of features of the conduct
concerned that is governmental in nature. See:
Calibre Clinical
Consultants (Pty) Ltd v National Bargaining council for the Road
Freight Industry
2010 (5) SA 457
(SCA) at para 38. (b) Indeed
what has been considered to be of relevance is the extent to which
the functions concerned are “
woven into a system of
governmental control”
, or “
integrated into a
system of statutory regulation”
, or that the government
“
regulates, supervises and inspects the performance of the
function”
, or it is “
a task for which the public,
in the shape of the State, have assumed responsibility”
, or
it is “
linked to the functions and powers of government”
,
or it constitutes “
a privatisation of the business of
government itself”
, or it is publicly funded, or there is
“
potentially a governmental interest in the decision-making
power in question”,
or the body concerned is “
taking
the place of central government or local authorities”
, and
so on. See:
Calibre Clinical Consultants (Pty) Ltd v National
Bargaining council for the Road Freight Industry
supra
.
(c) While accepting that there can be no single test of universal
application to determine whether a power or function is of a
public
nature, the extent to which the power or function might or might not
be described as “governmental” in nature
and even if it
is not definitive, it is indeed a useful enquiry. This directs to
whether the exercise of the power or the performance
of the function
might properly be said to entail public accountability;
accountability to the public is exactly what judicial review
has
always been about. See:
Calibre Clinical Consultants (Pty) Ltd
v National Bargaining council for the Road Freight Industry
supra
.
[27]
Importantly, to show that there is quite a number of factors at play
in the latter case it was held as follows:
“
[59]
In my view, the question of whether conduct constitutes
administrative action, as contemplated in PAJA, can only be
determined
by having regard to a number of factors, such as, for
example, whether the body carrying out the function is publicly
funded, publicly
owned, performing functions that would otherwise be
performed by a ‘pure’ governmental organ such as a
department that
is part of the executive, controls public assets,
acquires liabilities that ultimately will have to be borne by the
public, or
acting in the public interest or is subject to the
regulation by statute such as PFMA or the ACSA Act. Where more than
one of these
factors co-exist it would be incorrect to hold that any
of them is individually decisive in determining whether the body’s

conduct constitutes administrative action. That, I believe, is the
only way to give effect to the provisions of the Constitution,

especially those contained in the Bill of Rights.”
[28]   The
procurement of goods and services is not necessarily a public
function. Accordingly in the same case of
Calibre Clinical
Consultants
supra
the following was held:
“
[44]
That the procurement of goods and services by the council – for
whatever purpose – is not a public function seems
to me to find
support in the constitution itself. Government and its agencies are
expected to be publicly accountable for the contracts
that they
conclude because they are spending public money, and there are two
principal reasons why that should be so. In the first
place the
public is entitled to be assured that its moneys are properly spent.
And secondly, the commercial public is entitled
to equal opportunity
to benefit from the bounty of the State to which they are themselves
contributories. The accountability of
government for procurement is
expressly provided for in s 217 of the constitution, which requires
that government bodies must contract
‘in accordance with a
system which is fair, equitable, transparent, competitive and cost
effective’, but that prescript
does not apply to a bargaining
council. It is not an ‘organ of State’ within the
narrower definition of that term in
s 217, nor is it an ‘institution
identified in national legislation’ to which that procurement
policy applies. I also
see no principal reason why it should be
publicly accountable for the contracts that it concludes. It is not
expending public money,
but money that emanates from its members and,
in some case, others in the industry, and it is to them, not the
public, that it
is accountable for the manner in which it does so.
More important, for present purposes, I can see no basis upon which
the commercial
public, who are not contributors to its funds, not
even indirectly, might justifiably be entitled to hold the council to
account
for the manner in which they are spent.
[46]
While it is true that the council ultimately owes its existence and
its powers to its enabling statute, that applies
as much to every
company, which ultimately owes its existence and its powers to
company legislation, and is by no means determinative
of whether it
is publicly accountable for its conduct through the remedy of
judicial review. Whatever the case might be in relation
to its other
functions, in my view the council, when managing its wellness fund
and procuring services for that purpose, was performing
a
quintessentially domestic function in the exercise of its domestic
powers, and its decisions that are now in issue are not subject
to
review at the instance of the appellants. On that ground alone the
application should have failed. But even had the decisions
of the
council been reviewable, which the court below assumed them to be, I
do not think the council can be said to have acted
unlawfully.”
[29]
It must always be borne in mind that a public power is vested in a
public functionary who is required to exercise
same in the public
interest and not in his or her own private interest or at his or her
own whim. See
Mobile Telephone
Networks (Pty) Ltd v Smit Trading CC
2012 (6) SA 638
(SCA) at par 31. I shall most certainly consider the
nature of power exercised by CPUT. In
Directory
Advertising Costs Cutters v Minister for Posts, Telecom­mu­nications
and Broadcasting and Others
1996
(3) SA 800
(T) the Court held that an organ of State is not an agent
of the State but that it is part of
government
(at
any of its levels). Notably, Section 233 (1) of the interim
Constitution included in the term ‘organ of State’ a

statutory body or functionary. The test laid down in
Baloro
and Others v University of Bophuthatswana
1995
(4) SA 197
(B) is whether the State had control. The latter approach
was followed in cases such as
Mistry
v Interim National Medical and Dental Council of South Africa and
Others
1997 (7) BCLR 933
(D) at
947B- 948C and
Wittmann v Deutsche
Schulverein, Pretoria and Others
1998 (4) SA 423
(T) at 454 B (in respect of the interim
Constitution).
Directory Advertising
Cost Cutters
(
supra
)
was also followed in respect of the new Constitution in
ABBM
Printing and Publishing (Pty) Ltd v Transnet Ltd
1998 (2) SA 109
(W) at 113A-G and
Goodman
Brothers (Pty) Ltd v Transnet Ltd
1998
(4) SA 989
(W) at 993G-994H.
[30]   In all
these above mentioned cases the test applied in order to determine
whether a body or functionary is an organ
of State is whether that
body or functionary is directly or indirectly controlled by the
State. See further
Inkatha Freedom Party v TRC
2000 (3)
SA 119
(C) also reported as
2000 (5) BCLR 534
;
Hogg
Constitutional Law of Canada
3rd ed 34-13;
McKinney v
University of Guelph
[1990] 3 SCR 229
;
Harrison v
University of British Columbia
[1990] 3 SCR 451
;
Stoffman
v Vancouver General Hospital
[1990] 3 SCR 483
;
Douglas
College v Douglas Kwantlen Faculty Association and Others
[1990] s SCR 570;
Ngubane v Meisch NO and Another
2001
(1) SA 425
(N);
Association of Chartered Accountants v
Chairman, Public Accountants and Auditors’ Board
2001
(2) 980 (W) and
Logbro Properties CC v Bedderson NO and Others
2003 (2) SA 460
(SCA). Before focussing intently on CPUT and its
position with regard to PAJA, I shall briefly set out
infra
decisions taken by Courts in foreign jurisdiction. I consider that
doing so may help throw light on this vexed question for
determination.
FOREIGN CASE LAW (ON
THE QUESTION WHETHER THE IMPUGNED DECISION CONSTITUTE ADMINISTRATIVE
ACTION)
[31]   In the
United States of America the question arose in the context of whether
an entity can be said to be “
an agency or instrumentality of
the United States”
. This was to determine whether
instituions are bound by the Constitution in the US. In
Lebron
v National Railroad Passenger Corporation
[1995] USSC 11
;
513 US 374
(1995),
the US Supreme Court held that “
(g)overnment – created
and controlled corporations are (for many purposes at least) part of
the Government itself”
,  for “
(i)t surely
cannot be that government, State or federal, is able to evade the
most solemn obligations imposed in the Constitution
by simply
resorting to the corporate form.”
The US Supreme Court held
that Amtrak, though a private corportation, was bound by the First
Amendment on the basis that it was
government itself. The Court
concluded that Amtrak “
is established and organised under
federal law for the very purpose of pursuing federal governmental
objectives, under the direction
and control of federal government
appointees”
.
[32]
Blum v Yaretsky
[1982] USSC 141
;
457
US 991
(1982) concerned as it were a class of medical aid patients
challenging decisions by nursing homes in which they resided to
discharge
or transfer patients without notice of an opportunity for a
hearing. The question was whether the State could be held responsible

for those decisions so as to subject them to the strictures of the
Fourteenth Amendment. The US Supreme Court had regard to the

following factors when determinig this leg of the case and coming to
conclusion that the decisions in question did not constitute
State
action: (a) The mere fact that a business is subject to State
regulation does not by itself convert its action. The complaining

party must also show that there is sufficiently close
nexus
between the State and the challenged action of the regulated entity
so that the action of the latter may fairly be treated as that
of the
State. (b) A State can normally be held responsible for a private
decision
only when it has exercised coercive power or has
provided such significant encouragement, either obvert or covert,
that the choice
must in law be deemed to be that of the State. (c)
The required
nexus
may be present if the private entity has
exercised powers that are “
traditionally the exclusive
prerogative of the State”
.
[33]
Greenya v George Washington University
512 F.2d 556
(D.C. Circ 1975) concerned the question of whether George Washington
University was a government entity subject to the US Constitution.

The court concluded that the under-mentioned factors were not
sufficient to constitute government involvement in the University
so
as to make it a government entity for Constitutional purposes: (a)
The University received a charter from the appropriate government

chartering authority. (b) The University is exempt from taxation
under Federal and local law. (c) The University receives federal

funding for certain of its programmes and capital expenditure. (The
Court noted in this regards that with the possible exception
of
racial discrimination by recipients of government funding, the more
financial support for particular projects represents insufficient

government involvement). In
George Washington University
the Court’s conclusions were predicated on the absence of any
showing that the Federal or District of Columbia Government
had
exercised any role in the management of George Washington University
or had adopted a pervasive scheme of statutes, conditions
and codes
which had the effect of regulating in detail the University’s
management.
[34]
The Canadian charter applies to all the activities of a government
entity whether those activities are described
as private or to
non-governmental entities when engaged in activities that are
governmental in nature. Two cases from the Canadian
Supreme Court
must perhaps be referred to. In
Douglas/Kwantlen Faculty
Association v Douglas College
[1990] 3 SCR 570
, the status of
a college was in issue. The question arose in the context of whether
the college’s determination of a mandatory
retirement age was
subject to the Canadian Charter. It was held that Douglas College:
(a) was founded in terms of a government
statute (the Act in question
made it clear that the college was a Crown Agency established by
government to implement government
policy); (b) under government
control; (c) performs an activity of government. Ultimately, the
Canadian Supreme Court held that
the College was a delegate through
which government operates a system of post-secondary education in the
province. The position
of the College was of course distinguishable
from other universities which, though largely dependent on government
funding, managed
their own affairs. The Canadian Supreme Court had
regard to the fact that although government may choose to permit the
College
Board to exercise a measure of discretion, the fact is that
the board was not only appointed and removable at the pleasure of
government,
but that government could at all times direct its
operation. The Court accordingly concluded that the College was
simply a part
of the apparatus of government both in form and in
fact.
[35]
In
McKinney v University of Guelph
[1990] 3 SCR was
concerned with a challenge to a university policy that imposed a
mandatory retirement age. The Court formulated
the following
questions about entities that are not self- evidently part of the
legislature, administrative branches of government:
(a) Does the
legislative, executive or administrative branch of government
exercise general control over the entity in question?
(b) Does the
entity perform a traditional government function or a function which
in more modern times is recognized as a responsibility
of the State?
(c) Is the entity one that acts pursuant to statutory authority
specifically granted to it to enable it to further
an objective that
government seeks to promote in the broader public interest? In
McKinney
case
supra
the Canadian Court applied
the abovementioned test and had regard to the factors I mention
infra
and came to the conclusion that the university was not a government
entity and nor was it a non-governmental entity which engaged
in
activities that are governmental in nature when determining a
mandatory retirement age. The factors taken into consideration
are:
(a) Although the fate of universities is largely in the hands of
government and universities are subject to important limitations
of
what they can do either by regulation or because of their dependence
on government funds, it by no means follow that they are
organs of
government. The court noted the fact that each university has its own
governing body and only a minority of its members
are appointed by
government and their duty is not to act in the direction of
government, but in the interests of the university.
(b) Government
has no legal power to control the universities even if it wished to
do so. Though universities are subject to government
regulations and
in large measure depend on government funds, they manage their own
affairs and allocate these funds. (c) The legal
autonomy of
universities is fully buttressed by their traditional position in
society. Though the legislature may determine much
of the environment
in which universities function, the reality is that they function as
autonomous bodies within that environment.
The Court acknowledged
that there may be specific activities where it can fairly be said
that the decision is that of government
or specific instances where
the government sufficiently partakes in the decision to make it an
act of government.
[36]
In
Harrison v University of British Columbia
[1990] 3
SCR 193
at 201, it was held that although certain legislation applies
to universities in that they monitor or regulate the expenditure of

public funds that a university receives, “
the fact that the
university is fiscally accountable under these statutes does not
establish government control or influence upon
the core functions of
the university and, in particular, upon the policy and contracts in
issue in this case”.
The Court applied the approach adopted
in
McKinney
supra
in coming to its conclusion on
this point. Importantly, the Court held that the fact that the
Lieutenant Governor appoints the
majority of the members of the
University’s Board of Governors or that the Minister of
Education may require the University
to submit reports or other forms
of information does not lead to the conclusion that the impugned
policies of mandatory retirement
constitute government action.
Lastly, in
Stoffman v Vancouver General Hospital
[1990]
3 SCR 215
which concerned the status of a hospital, the Court
concluded that the fact that the hospital is not autonomous when it
comes to
the use of money given to it by the government for specific
capital investments says little regarding the degree of autonomy it

enjoys overall. If anything, it suggests that direct government
involvement in hospital decision-making is the exception rather
than
the rule.
THE
POSITION OF CPUT
[37]
I agree with Ms Pillay that in addressing the question as to whether
CPUT’s procurement decisions constitute
“administrative
action” the point of departure must be section 217 (1) of the
Constitution providing as follows:
“
217 (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.” It was contended on behalf of
CPUT that CPUT is not an organ of State in the “national,

provincial or local sphere of government.”
In Ms Pillay’s
submission CPUT is also not an “
institution identified in
national legislation.”
In
order to comprehend the above contention one must perhaps have regard
to the relevant pieces of legislation that may talk to
the vexed
question under discussion. The Public Finance Management Act, 1 of
1999 (“the PFMA”) appear to be limited
in its application
to – (a) departments; (b) public entities listed in Schedule 2
or 3 thereof; (c) Constitutional institutions;
and (d) the provincial
legislatures, subject to subsection (2). Notably, in Schedule 2 and 3
thereof a range of major and other
public entities are identified.
Even though the Council on Higher Education is listed in Schedule 3
neither CPUT nor its Council
appear in these Schedules.
[38]
The Preferential Procurement Policy Framework Act, 5 of 2000 (“the
PPPF”) and its Regulations applies
to all public entities
listed in Schedule 2 of the same Act. We know how it defines “an
organ of State”. The Broad-based
Black Economic Employment Act,
53 of 2003 (“BBBEE”) also defines an organ of State.
These definitions do not, seemingly,
inform us in the slightest
degree that CPUT is or may well be an organ of State. One needs to
hasten to mention that the BBBEE
Act does not on its own terms apply
to CPUT.
[39]
The Higher Education Act, 101 of 1997 (“the
Higher Education
Act&rdquo
;) draws a distinction between public higher education
institutions on one hand and organs of State on the other. This
legislation
makes rather limited reference to the question of
contracting for goods and services. The Supplementary Affidavit filed
on behalf
of CPUT revealed that for the year ending 31 December 2012
the State subsidies and grants to CPUT amounted to 49.6% of the total

income earned by CPUT for the financial year 2012. From this it is
apparent that less than half of its income comes from government.
The
Minister of Higher Education and Training (“the Minister”)
determines the policy on higher education after consulting
the
Council on Higher Education (the CHE”). The CHE is indeed a
public entity and is listed in Schedule 3 of the PFMA. The
CHE may
advise the Minister on any aspect of higher education. The Minister
may in certain circumstances act without the advice
of the CHE. One
must mention that a university, technikon or college may be
established by the Minister after money has been appropriated
for
this purpose. What I have mentioned above may easily make it appear
that institutions such as CPUT are organs of State. However,
one must
also consider what I set out in the next paragraph.
[40]
The Council of a public higher education institution (not CHE) is
responsible for governing the public higher education
institution
subject to the Act and institutional statute. See:
Section 38 (H)
of the Act. The Senate of a public higher education institution is
accountable to the Council for the academic and research functions
of
the public higher education institution and must perform such other
functions as may be delegated or assigned to it by the Council.
See:
Section 28 (1)
of the Act.
[41]
The Principal of a public higher education institution is responsible
for the management and administration of
the public higher education
institution. See:
Section 30
of the Act. In terms of
Sections
34 (3)
and
37 (1)
the Council must appoint employees of a
public higher education institution and determine the conditions of
service, disciplinary
provisions, privileges and functions of
employees subject to the applicable labour laws. The Council of a
public higher education
institution (after consulting the Senate)
determines the admission policy of the public higher education
institution. Importantly,
the Act identifies every public higher
education institution as a juristic person.
The
afore-going observations extracted from the Act itself of course
militate against CPUT’s procurement decisions being classified

as administrative action.
[42]
Ms Carol Steinberg for the Fifth Respondent prefixed her submissions
by contending that the Applicants were the
incumbents before the
award of tender in that they provided security services at five
campuses.  In Ms Steinberg’s submission,
the Applicants
contend that they were entitled to continue to provide security
services notwithstanding that the prices at which
they tendered were
uncompetitive and significantly higher than those tendered by the
successful tenderers. I posed a question in
this regard to Mr Joubert
and I said seeing that the Applicants tendered at very high prices
compared to the successful tenderers,
is it not probable that by so
doing they marketed themselves out. However, Mr Joubert is of the
view that those prices tendered
are indeed market related. Dealing
with a point
in limine
whether the decision by CPUT
(constituted an administrative action) Ms Steinberg contended that
CPUT as a University does not fall
within the purview of section 217
of the Constitution and as such its decision is not an administrative
action for the purpose
of section 33 of the Constitution and PAJA.
[43]
Indeed section 217 of the Constitution governs the procurement of
goods and services by two classes of entities,
namely “
organs
of state in the national, provincial or local sphere of government”
and “
any other institution identified in national
legislation.”
Mr Joubert relies on the latter portion of
the aforementioned in contending that the CPUT decision constitutes
administrative action
which is reviewable. But then the difficulty I
am confronted with is that the national legislation to which section
217 refers
is the Public Finance Management Act 1 of 1999 (PFMA). But
in terms of Schedules 2 and 3 the PFMA governs department,
constitutional
institutions, major public entities and other public
entities. The University falls into none of these categories.
Accordingly
on that basis alone the University is not an “
institution
identified in national legislation.”
Importantly,
section 239 of the Constitution defines organ of state and this
definition does not relate to a University. In
Calibre
Clinical Consultants
supra,
the
Supreme Court of Appeal held that a bargaining council is “
not
an ‘organ of state’ within the narrower definition of
that term in section 217, nor is it an ‘institution
identified
in national legislation’ to which that procurement applies.”
This approach finds support in the jurisprudence of other comparable
jurisdictions to which reference has been made
supra
.
Of course the next vexed question is whether the CPUT’s
decision to appoint security service providers is subject to judicial

review under section 33 of the Constitution and the Promotion of
Administrative of Justice Act 3 of 2000 (PAJA). It shall be recalled

that section 33 (1) of the Constitution provides:
“
Everyone has
the right to administrative action that is lawful, reasonable and
procedurally fair.”
[44]
I hold that the fact that institutions like the University are
excluded from the ambit of section 217 is an indication
that their
procurement process should not be regarded as administrative action
for purposes of section 33 of the Constitution and
PAJA. In my view,
if I were to hold that CPUT’s procurement process was
administrative action, clearly the effect would be
to override and
ignore the Constitution’s deliberate exclusion of the
University from section 217 and the legislature’s
deliberate
exclusion of the University from the PFMA. In deciding what should
and should not be characterized as administrative
action for the
purposes of section 33, our Courts will need to draw “
difficult
boundaries ….carefully in the light of the provisions of the
Constitution and the overall constitutional purpose
of an efficient,
equitable and ethical public administration. This can best be done on
a case by case basis.”
See:
President of the RSA v SA
Rugby Football Union
2000 (1) SA 1 (CC) para 143.
“Administrative action” is defined in section 1 (i) of
PAJA. Even though I am persuaded
that with regard to section 1 (a)
for purposes of procurement, the constitution does not regard the
University as an organ of State,
in terms of section 1 (b), the
decision of a person other than an organ of State is administrative
action only when that person
is “
exercising a public power
or performing a public function in terms of an empowering provision.”
[45]
Indeed whether the conduct of CPUT (University) in procuring security
provision constitutes administrative action
therefore turns on
whether such action amounts to the exercise of public power or the
performance of a public function. In
Transnet Ltd v Goodman
Brothers (Pty) Ltd
2001 (1) SA 853 (SCA) para
34 at 865 A-J, the Supreme Court of Appeal held that: (a)
Administrative law is an incident of the separation
of powers under
which courts regulate and control the exercise of public power by the
other branches of government. (b) The question
relevant of section 33
of the Constitution is not whether the action is performed by a
member of the executive arm of Government,
but whether the task
itself is administrative or not and the answer to this is to be found
by an analysis of the nature of the
power being exercised. (c) What
falls to be considered is the source of the power exercised, the
nature of such power, its subject-matter,
whether it involves the
exercise of a public duty, and how closely it is related on the one
hand to policy matters which are not
administrative, and on the other
hand to the implementation of legislation, which is. The proper
question thus is not whether the
University (CPUT in the instant
matter) is a public body but whether the particular conduct at hand,
namely the procurement of
security provision or service constitutes
an exercise of public power. The focus, as it were, is on the
function and not the functionary.
See
President of the RSA v SA
Rugby Football Union
supra
. Needless to mention that
the same institution can exercise public powers for some purposes and
private powers for others. As pointed
out in
President of the
RSA v SA Rugby Football Union
supra
, the question of
whether a particular decision is administrative must be decided on a
case-by-case basis.
[46]
The best illustration is located in the case law. Our Courts have
indeed held that some of the decisions of the
President of the
Johannesburg Stock exchange, for instance, constitute administrative
action and others do not. In
Dawnlaan Beleggings (Edms) Bpk v
Johannesburg Stock Exchange and Others
1983 (3) SA 344 (W)
para 22 at 361 B-362A Goldstone J held that although the Stock
Exchange is not a statutory body, when it performs
a duty imposed by
the legislature that affects not only its members, but the general
public, its decisions are susceptible to review.
Hence the
application of the rules of the Stock Exchange (published in the
Government Gazette) constitutes administrative action.
Similarly in
Johannesburg Stock Exchange v Witwatersrand Nigel Ltd
1988 (3 ) SA 132 (A) para 26 at 152 F-H, the Court held that the
decision of the President of the JSE acting under section 17 of
the
Stock Exchange Control Act, was subject of review by the Courts.
[47]
However, in
Herbert Porter and Company Ltd v Johannesburg Stock
Exchange
1974 (4) SA 781 (T) at 788 A-E, the Court
distinguished the facts of that case from those of
Dawnlaan
Beleggings
and
Witwatersrand Nigel
supra
and found that the JSE’s refusal to approve a circular was not
reviewable as the nature of that power bore a closer function
rather
than to a public power. In
Calibre Clinical
Consultants
supra
the Supreme Court of Appeal (per Nugent JA) held
inter
alia
:
“
When
implementing such a project a bargaining council is not performing a
function that is ‘woven into a system of governmental
control’
or ‘integrated into a system of statutory regulation’.
Government does not ‘regulate, supervise
and inspect the
performance of the function’, the task is not one for which
‘the public has assumed responsibility’,
it is not
‘linked to the functions and powers of government’, it is
not ‘a privatization of the business of government
itself’,
there is not ‘potentially  a governmental interest in the
decision-making power in question’, the
council is not ‘taking
the place of central government or local authorities’, and,
most important, it involves no public
money. It is true that a
government might itself undertake a similar project on behalf of the
public at large – just as it
might provide medical services
generally and pensions and training schemes to the public at large –
but the council is not
substituting for government when it provides
such services to employees with whom it is in a special
relationship.”
(para 42)
[48]
It is important to note that even though the council in the above
case is a creature of statute (just like CPUT
in the instant matter)
in appointing a service provider the council was exercising its
domestic powers and its decisions in doing
so were not subject to
review. The Supreme Court of Appeal expressed itself as follows in
this regard:
“
While it is
true that the council ultimately owes its existence and its powers to
its enabling statute, that applies as much to
every company, which
ultimately owes its existence and its powers to company legislation,
and is by no means determinative of whether
it is publicly
accountable for its conduct through the remedy of judicial review.
Whatever the case might be in relation to its
other functions, in my
view the council, when managing its wellness fund and procuring
services for that purpose, was performing
a quintessentially domestic
function in the exercise of its domestic powers, and its decisions
that are now in issue are not subject
to review at the instance of
the appellants. On that ground alone the application should have
failed.”
(para 46)
[49]
I have mentioned earlier on in this judgment that the Applicants are
placing reliance on
Simunye
case
supra
. It is
not mine to say whether
Simunye
case was correctly or
wrongly decided. But it would appear that the proper question (as the
Constitutional Court made it plain
in the SARFU judgment) is not the
identity of the person taking the decision but the nature of the
function it is performing. Maybe
I must set out infra the words of
the Constitutional Court in
President of the Republic of South
Africa v South African Rugby Football Union and Others
2000
(1) SA 1 (CC) at para 141:
“
What matters is
not so much the functionary as the function. The question is whether
the task itself is administrative or not. It
may well be, as
contemplated in Fedsure, that some acts of a legislature may
constitute ‘administrative action’ is
not on the arm of
government to which the relevant actor belongs, but on the nature of
the power he or she is exercising.”
I
am of the view that the business of ensuring the safety of CPUT’s
staff, students and property is domestic in nature. CPUT
in inviting
tenders for security services at its various campuses was not acting
in terms of any section of the
Higher Education Act. In
my view when
CPUT ultimately appointed the Respondents who were successful
tenderers its decision to do so is not a public function
and is thus
not administrative action which is susceptible to judicial review.
[50]
It is important to note that CPUT’s Procurement Policy (“the
policy”) sets out the aims to be
achieved by the University
when it contracts for services. The policy states that:
(a)  The intent of
the policy is “
to ensure that the institution gets value for
money in line with the vision, mission and strategic plan of the
institution.”
(b)
“
The
overriding objective within CPUT’s purchasing activity is
obtaining best value for money”.
(c)  The University
aligns itself with the Government’s initiative in promoting
“
the economic unity of the nation, equal opportunity,
increased employment, a higher growth rate and an increase broad base
and effective
participation of black people in the economy.”
(d) The University adopts
an affirmative procurement policy that “
will aim to address
the imbalance by integrating eligible start-up, small and
micro-enterprises through targeted purchasing on goods
and services.
The Affirmative Procurement Policy will not compromise the quality
and efficiency of goods and services supplied
to the campus
community”.
[51]
It would appear that the final recommendation struck a rational and
reasoned balance between concerns mentioned
supra
. Accordingly
the clusters were awarded to four different companies, three of which
are small and/or which had significant size
and expertise and could
act as a safety net for the emerging companies. Ms Steinberg was at
pains in reminding this Court that
all the winning companies scored
within the top five for price and BEE in their particular clusters.
In her submission the only
reason the cheapest tender did not win in
each case was that the company had been awarded another cluster or it
was not the best
choice from an SMME and BEE perspective. It is
important that I mention that the applicants do not deny the above.
It must be accepted
as common cause.
[52]
I conclude that regard being had to the afore-going discussion,
Section 217 of the Constitution does not and is
not meant to be
applicable in its terms to CPUT. Thus due regard being had to the
principles established in South African and foreign
cases discussed
supra
, I am of the view that CPUT’s procurement
decisions do not fall within the purview of “administrative
action”
under PAJA.
A
CHALLENGE BASED ON THE PRINCIPLE OF LEGALITY
[53]
The Applicant also contended that notwithstanding the applicability
of PAJA, they are entitled to rely on the principle
of legality. The
principle of legality derives from the rule of law as provided for in
Section 1 of the Constitution. However,
the principle of legality
applies to public power. I would not say that the procurement
decisions by CPUT entail the exercise of
public power for reasons
already canvassed
supra
. However, the circumstances in which
the principle of legality have been held to apply are apparent in
cases I refer to
infra
.
[54]
In
Fedsure Life Assurance Ltd and Others v Greater Johannesburg
Transitional Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC) the Constitutional Court held as follows:
“
[58] It seems
central to the conception of our constitutional order that the
Legislature and Executive in every sphere are constrained
by the
principle that they may exercise no power and perform no function
beyond that conferred upon them by law. At least in this
sense, then,
the principle of legality is implied within the terms of the interim
Constitution. Whether the principle of the rule
of law has greater
content than the principle of legality is not necessary for us to
decide here. We need merely hold that fundamental
to the interim
Constitution is a principle of legality.
[59]  There is of
course no doubt that the common-law principles of ultra vires remain
under the new constitutional order.
However, they are underpinned
(and supplemented where necessary) by a constitutional principle of
legality. In relation to ‘administrative
action’ the
principle of legality is enshrined in s 24 (a). In relation to
legislation and executive acts that do not constitute
‘administrative
action’, the principle of legality is necessarily implicit in
the Constitution. Therefore, the question
whether the various local
governments acted intra vires in this case remains a constitutional
question.”
Similarly in
Gauteng Gambling Board and
Another v MEC for Economic Development, Gauteng
2013 (5) SA
24
(SCA). The Supreme Court of Appeal held as follows:
“
[1]
Our country is a democratic state founded on supremacy of the
Constitution and the rule of law. It is central to
the conception of
our constitutional order that the legislature, the executive and
judiciary, in every sphere are constrained by
the principle that they
may exercise no power and perform no function beyond that conferred
on them by law. This is the principle
of legality, an incident of the
rule of law. Public administration must be accountable and
transparent. All public office bearers,
judges included, must at all
times be aware that principally they serve the populace and the
national interest.”
[55]
Lastly, the Constitutional Court summarized the legal position
succinctly as follows in
Affordable Medicines Trust and Others
v Minister of Health and Others
[2005] ZACC 3
;
2006 (3) SA 247
(CC) at
paragraphs 48 and 49:
“
Our
constitutional democracy is founded on, among other values, the
(s)upremacy of the Constitution and the rule of law. The very
next
provision of the Constitution dictates that the Constitution is the
supreme law of the Republic; law or conduct inconsistent
with it is
invalid. And to give effect to the supremacy of the Constitution,
courts must declare that any law or conduct that is
inconsistent with
the Constitution is invalid to the extent of its inconsistency. This
commitment to the supremacy of the Constitution
and the rule of law
means that the exercise of all public power is now subject to
constitutional control. The exercise of public
power must therefore
comply with the Constitution, which is the supreme law, and the
doctrine of legality which is part of that
law. The doctrine of
legality, which is an incident of the rule of law, is one of the
constitutional controls through which the
exercise of public power is
regulated by the Constitution. It entails that both the legislature
and the executive are constrained
by the principle that they may
exercise no power and perform no function beyond that conferred upon
them by law. In this sense
the Constitution entrenches the principle
of legality and provides the foundation for the control of public
power.”
The
above cases demonstrates how, when and to which entity is the
doctrine of legality of application. The Applicants have not shown
or
established the legal basis on which to assert that the principle of
legality applies to non-public powers. In my view, reliance
on the
principle of legality is misplaced and cannot be sanctioned.
THE
GROUNDS OF REVIEW ADVANCED AND LEGAL PRINCIPLES APPLICABLE TO REVIEW
PROCEEDINGS
[56]
I have already made a finding
supra
that CPUT’s
procurement decisions do not constitute administrative action.
However, even though I am certain that my findings
are correct in
that they are premised on case authorities referred to
supra
,
it may well be that these findings are proved to have been wrongly
made. For that reason I deal
infra
with the grounds of review
advanced by the Applicants and I link these to the applicable legal
principles. In truth the Applicants
have mounted a wide ranging
review on a number of grounds: (a) The Applicants consider it
“inexplicable” that they
were not successful in their
tenders given the First Applicant’s track record in providing
services to CPUT for the last
five (5) years. To this end the
contention is advanced that CPUT failed to take this fact into
account as a relevant consideration.
(b) According to the Founding
papers certain persons on both the Tender Task Team and the Tender
Committee, which the Applicants
contend constitutes a “serious
irregularity” in the tender process. (c) Certain officials
within CPUT who served on
the adjudications committees were
personally acquainted with officials of the Third Respondent. To this
end, the Applicants allege
collusion and a reasonable suspicion of
bias. (d) CPUT omitted to inspect the First Applicant’s
facilities which it was allegedly
“required” to do in
terms of CPUT’s tender document. The Applicants contend that
this constituted a failure to
comply with a material procedure. (e)
According to the Founding papers the First Applicant was eliminated
at the first phase of
the assessment on the basis that it had failed
to submit its COIDA registration certificate. (f) The Second
Respondent (“Manuel”)
failed to comply with the
provisions of the Private Sector Provident Security Fund. To this end
it is contended that the Second
Respondent could not have been
validly awarded the tender. (g) It was “impossible” for
the Third Respondent to have
had a letter of good standing from the
Workmen’s Compensation Fund as at the tender closing date. (h)
Manuel has no “track
record” to fulfill the requirements
of the tender in respect of capacity and experience. As a result it
is contended that
Manuel could not have scored any of the 40 points
for those criteria and nor could it have attained the required
minimum 70 points
to progress to the next stage. Because Mgebe
operates from “an RDP house in Khayelitsha” it is
“
impossible….to have legitimately scored significant
points on its site inspection”
and scored above the
required 70 points to progress to the next stage. Two officials at
CPUT (the Vice Chancellor and Mr Mpambane)
are possibly well
acquainted with members of the Third Respondent, which represents a
conflict of interest. In this regard the
Founding papers allege bias
and collusion.
[57]
The Applicants also aver that improper outside influences were
wielded on the affairs of CPUT by SASCO and certain
student
representatives. In the Founding Affidavit it is alleged that there
is a strong inference of some prior collusion between
the Third to
Fifth Respondents and officials of CPUT, namely that they could
submit low tender prices in the knowledge that the
number of
personnel required would be reduced after the award of the tender
which would then allow them to make a profit. Sangster
who deposed to
the Founding Affidavit averred that it is “utterly incredible”
that the Second Applicant was eliminated
on the basis of not having
scored the prescribed minimum, 70 points on functionality given its
“state of the art training
facility”, substantial
infrastructure and other credentials.
[58]
It is alleged in the Founding papers that during the Second
applicant’s site visit the team did not have
scoring sheets or
any other scoring mechanism and therefore it could not have received
“a fair evaluation”. Manuel
and Mgebe are alleged to have
such a lack of experience that they could not have won the tenders.
It is also averred that Manuel
is not in good standing with the
Private Sector Security Provident Fund. The Founding papers also
state that given the Third Applicant’s
(“Target”)
tender amount it is “inexplicable” that it was not
awarded the tender. The allegation is also
made that “the
opening of tender” team was “incorrectly constituted”
because it did not consist of three
dedicated persons from the tender
committee which is required under CPUT’s procurement policy.
All tender documents as received
were not dated or numbered with a
sequential stamp, thereby constituting what the Applicants refer to
as “a further transgression
of CPUT’s procurement policy.
[59]
The Technical Team was incorrectly constituted according to the
Applicants, because in transgression of the procurement
policy the
Director: Finance was absent. It is contended that the First
Applicant was erroneously eliminated on the following four
bases: (a)
it had not submitted a VAT registration document; (b) it had
submitted financial statements for two years instead of
three years;
(c) its COIDA certificate had expired in April 2013; (d) it had
provided insufficient references. The Fourth Applicant
was
incorrectly eliminated on the following bases: (a) it had not
supplied evidence of membership of a Provident Fund; (b) it had
not
provided a copy of its Security Awareness Programme; (c) it had not
provided a police or other clearance certificate; (d) it
had not
provided a SASSETA certificate. But, according to the Supplementary
Founding Affidavit Manuel failed to submit the following
mandatory
documents and made a donation of R10 000 to CPUT: (a) A VAT
registration form; (b) its BBBEE score certificate; (c) proof
of
registration with COIDA; (d) a letter of good standing with COIDA;
(e)  proof of payment to the Provident Fund; (f) a sample
of a
Security Awareness Programme; (g) it failed to attend the compulsory
briefing sessions; (h) it did not provide proof of payment
of the
tender fees.
[60]
The following irregularities in relation to Mgebe appear in the
Supplementary Founding Affidavit: (a) it had provided
financial
statements for one year (as opposed to three); (b) its  tax
clearance certificate was valid only until 18 June 2013;
(c) it
failed to submit (i) a sample security awareness programme (ii) a
police or other official clearance certificate (iii) proof
of payment
of tender fees; (d) it could not have been classified as a QSE
(despite the rating received from the rating agency).
The Fourth
Respondent is alleged not to have submitted a sample security
awareness programme. The Fifth Respondent is alleged not
to have
submitted a detailed implementation plan. It is contended in the
Supplementary Founding Affidavit that the record provides
no details
of the functionality evaluation and that it constitutes “a
fatal flaw”.
[61]
A comparison of the scores achieved by the Second Applicant on the
one hand and the Third Respondent on the other,
(according to the
Supplementary Founding Affidavits) shows that the assessment could
not have been fair and unbiased, emphasis
being placed
inter alia
on the following: (a) the Second Applicant scored 5 out of 10 for
references whereas the Third Respondents scored 10 out of 10
which is
suggested not to have been feasible; (b) the Third Respondent and the
Second Applicant both scored 18 out of 25 for management
and
experience whereas the facts allegedly show that this could not
constitute “a fair and unbiased assessment”. (c)
the
Second Applicant scored 3 out of 5 for contract plan whereas the
Third Respondent scored 4 out of 5, (a “superficial

comparison”) shows that this could not have been a legitimate
score. (d) For site inspection, the Second Applicant scored
15 out of
20 compared to 20 out of 20 by the Third Respondent. Given the number
of offices that the Second Applicant allegedly
has, including its
“State of the art training facility” as compared to the
Third Respondent’s “bare office
in Khayelitsha point to
an “inescapable inference” that the Second Applicant was
deliberately awarded low points so
as to eliminate it at the stage of
functionality; (e) As regards management and control, the Second
Applicant scored 16 out of
20 whereas the Third Respondent scored 25
out of 30, which was allegedly “not feasible”. (f) The
same individuals served
on both the Technical Team and the Tender
Committee (in particular Messrs Mpambane and Manciya) which
constitutes an irregularity.
[62]
I am in agreement with Ms Pillay and Mr Stelzner (SC) that it is
apparent from the wide ranging grounds of attack
launched by the
Applicants that, in essence the Applicants are aggrieved by the fact
that CPUT did not identify them to be the
successful tenderers and
that clearly raised or must have raised the question as to the proper
domain of the review proceedings.
Some of the grounds of review are
somewhat speculative and are without factual basis, I would say.
Turning to the principles governing
application for review it first
must be mentioned that a review is not concerned with the correctness
of a decision made by a functionary,
but with whether the functionary
performed the function with which it/he/she was entrusted. See:
MEC
for Environment Affairs and Development Planning v Clairison’s
CC
2013 (6) SA 235
(SCA) at par 18. The primary focus (as it
were) is on the fairness of the process and not the correctness of
the outcome. See:
Allpay Consolidated Investment Holdings (Pty)
Ltd and Others v Chief Executive Officer, South African social
Security Agency and
Others
2014 (1) SA 604
(CC) at par 42.
[63]
When the law entrusts a functionary with a discretion it means that
the law gives recognition to the evaluation
made by the functionary
to which the discretion is entrusted, and it is not open to a Court
to second-guess his evaluation. See:
MEC for Environment
Affairs and Development Planning v Clairison’s CC
supra
par 18. Importantly, the weight or lack thereof to be attached to the
various considerations that go to making up a decision is
that given
by the decision-maker. The Court will merely require the
decision-maker to take the relevant consideration into account,
it
will not prescribe the weight that must be accorded to each
consideration, for to do so could constitute a usurpation of the

decision-maker’s discretion. See
MEC for Environment
Affairs and Development Planning v Clairison’s CC
supra
at par 20 and 22.
[64]
Indeed it is inevitable that administrative officials would uphold
the general policies of their department; in
this broad sense it
follows that they must be prejudiced against any individual who gets
in their way. But this departmental bias,
as it has been labeled, is
unavoidable and even desirable for good administration. It does not
necessarily prevent the official
concerned from being fair and
objective in deciding particular cases. See in this regard
MEC
for Environment Affairs and Development Planning v Clairison’s
CC
at par 30. Where there is a complaint by tenderers (just
as in
casu
) that a more detailed scoring process should be
used, it compels the complainant entity to indicate the prejudice it
suffers as
a result thereof. See
South African National Roads
Agency Ltd v Toll Collect Consortium
2013 (6) SA 356
(SCA) at
par 15 and 16. The latter case is also authority for the general
formulation that there is no obligation for the scoring
to be
disclosed. I fully agree with the formulation contained in the latter
case to the effect that the evaluation of many tenders
is a complex
process involving the consideration and weighing of a number of
diverse factors.
[65]
Under the Constitution there is no reason to conflate procedure and
merit. The proper approach is to establish,
factually, whether an
irregularity occurred. It is only thereafter that the irregularity
must be legally evaluated to determine
whether it amounts to a ground
of review under PAJA. This legal evaluation must, where appropriate,
take into account the materiality
of any deviance from legal
requirements by linking the question of compliance to the purpose of
the provision before concluding
that a review ground under PAJA has
been established. See
Allpay Consolidated Investment Holdings
(Pty) Ltd and Others v Chief Executive Officer, South African Social
Security Agency and
Others
supra
at par 28. Once a
finding of invalidity under PAJA review ground is made, the affected
decision or conduct must be declared unlawful
and a just and
equitable order must be made. It is at this stage that the possible
inevitability of a similar outcome, if a decision
is retaken may be
one of the factors that will have to be considered. See
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency and
Others
supra.
[66]
LEGAL PRINCIPLES
in relation to rationality as a ground of
review are well established. Rationality imposes a less onerous
standard than reasonableness.
See
Bel Porto School Governing
Body v Premier, Western Cape and Another
[2002] ZACC 2
;
2002 (3) SA 265
(CC)
at para 46;
Khosa v Minister of Social Development
[2004] ZACC 11
;
2004
(6) SA 505
(CC) para 67. See also
New National Party of South
Africa v Government of the Republic of South Africa
[1999] ZACC 5
;
1999 (3)
SA 191
(CC), in which the differing views of Yacoob J and O’Regan
J as to the outcome of the appeal were the result of their
disagreement
as to whether the appropriate standard was rationality
or reasonableness. Yacoob J held that the standard as rationality,
which
the legislation met. O’Reagan considered that the
standard was the higher one of reasonableness, which the legislation
did
not meet.
[67]
Pharmaceutical Manufacturers Association of SA and Another: In
re Ex parte President of the Republic of South Africa
[2000] ZACC 1
;
2000
(2) SA 674
(CC) is authority for the proposition that a Court cannot
interfere with a decision simply because it disagrees with it. In
this
regard the Constitutional Court in the latter matter held as
follows at paragraph 90:
“
[90]
Rationality in this sense is a minimum threshold requirement
applicable to the exercise of all public power by members of the

Executive and other functionaries… The setting of this
standard does not mean that the Courts can or should substitute their

opinions as to what is appropriate for the opinions of those in whom
the power has been vested. As long as the purposes sought
to be
achieved by the exercise of the public power is within the authority
of the functionary, and as long as the functionary’s
decision,
viewed objectively, is rational, a Court cannot interfere with the
decision simply because it disagrees with it, or considers
that the
power was exercised inappropriately.
It is precisely because
of the relatively undemanding nature of the test of rationality that
“
a decision that is objectively irrational is likely to be
made rarely”
. See
Pharmaceutical Manufacturers
Association of SA and Another: In re Ex parte President of the
Republic of South Africa
supra.
[68]
Actual or reasonable suspicion of bias
constitutes a
ground of review under PAJA. An Applicant must establish a reasonable
apprehension of bias. The threshold for finding
of real or perceived
bias is high. It has been held (albeit in the context of judicial
bias) that both the person who apprehends
bias and the apprehension
itself must be reasonable. See
Bernet v Absa Bank Ltd
2011 (3) SA 92
(CC) at par 34. I point out that on the facts of the
instant matter there has been no showing of actual bias. In any
event, the
suspicion of bias on the part of the Applicants is
unsubstantiated. Where the power to make findings of fact is
conferred on a
particular functionary – an ‘administrator’
as defined in PAJA – the material error of fact ground of
review
does not entitle a reviewing Court is free, without more, to
substitute its own view as to what the findings should have been i.e.

an appeal test. See
Dumani v Nair and Another
2013 (2)
SA 274
(SCA) at par 34. I hasten to add though that the Applicants do
not ask this Court in the notice of motion to substitute its own

decision in the place of that made by CPUT.
[69]
It is now well recognized that a material mistake of fact as a
potential ground of review, there are certain limitations.
For
instance in
Pepcor Retirement Fund and Another v Financial
Services Board and Another
2003 (6) SA 38
(SCA) at par 48 the
Supreme Court of Appeal held as follows:
“
Recognition of
material mistake of fact as a potential ground of review obviously
has its dangers. It should not be permitted to
be misused in such a
way as to blur, far less eliminate, the fundamental distinction in
our law between two distinct forms of relief:
appeal and review.
For
example, where both the power to determine what facts are relevant to
the making of a decision, and the power to determine whether
or not
they exist, has been entrusted to a particular functionary (be it a
person or a body of persons), it would not be possible
to review and
set aside its decision merely because the reviewing Court considers
that the functionary was mistaken either in its
assessment of what
facts were relevant or in concluding that the facts exist.
If it were, there would be no point in preserving the time-honoured
and socially necessary separate and distinct forms of relief
which
the remedies of appeal and review provide.”
(Underlining
added)
[70]
As regards the review ground of error of law, the Constitutional
Court has held as follows in
Johannesburg Metropolitan
Municipality v Gauteng Development Tribunal and Others
2010
(6) SA 182
(CC):
“
[91] However, a
mere error of law is not sufficient for an administrative act to be
set aside. Section 6 (2) (d) of the Promotion
of Administration of
Justice Act permits administrative action to be reviewed and set
aside only where it is ‘materially
influenced by an error of
law’. An error of law is not material if it does not affect
outcome of the decision. This occurs
if, on the facts, the
decision-maker would have reached the same decision, despite the
error of law.”
Therefore, in a summarized form the alleged
irregularities the Applicants contend must be held to have vitiated
the procurement
decisions of CPUT are actually only four in number,
namely (a) Non-compliance with CPUT’s regulatory framework. (b)
The erroneous
elimination of certain Applicants. (c) The erroneous
failure to have eliminated certain Respondents. (d) Actual or
perceived bias.
It is perhaps necessary in the interest of
completeness to briefly refer to these
infra
individually.
NON-COMPLIANCE
WITH REGUALTORY FRAMEWORK
[71]
As pointed out earlier on in this judgment the contention by the
Applicant is that the opening of tender team,
the task thereof
(referred to as the Technical Team) and the tender committee were all
incorrectly constituted in that they were
not authorized by the
empowering provision. As far as the chairing of the tender committee
is concerned the Applicants relied on
section 29 (4) of the
Institutional Statute which provides that the chairperson of a
committee may not be an employee or student
of a university. It was
submitted on behalf of CPUT that the Applicants have misconstrued
section 29 in that the limitation in
section 29 (4) applies only to
the committees referred to in section 29 (1). Regard being had to
section 29 (1) the Tender Committee
is not included therein.
The
opening of the tender team/box
:
[72]
In terms of the Procurement Policy, three dedicated persons from the
Tender Committee are responsible for opening the
tender box at the
specified closing date and time. It is common cause that Applicants
are correct in this regard in that CPUT did
not comply with this
requirement. The fact is that it was only one member of the Tender
Committee (Mr Manciya) who, together with
four other persons were
responsible for the opening of the tender. The explanation contained
in CPUT’s Answering papers is
that it was not possible to
comply with the strict letter of its Policy due to the commitments of
other members of the Tender Committee.
The explanation as amplified
is that the persons on the Tender Committee are relatively senior
personal and that their participation
in this exercise is sometimes
not possible. I would be slow in making a finding that this issue has
material bearing on the legitimacy
and fairness of the process as a
whole. No prejudice is pointed out which the Applicants suffered
consequent to this non-compliance.
Composition
of the technical/task team
.
[73]
Item 5.18.5 of the Procurement Policy provides that the sub-Tender
Task Team must consist of members  (a)
Procurement; (b)
Representative of Faculty, Department or Division; (c) Director of
Finance; (d) User. The Director: Finance was
absent from the
Technical Team. According to the Answering papers by CPUT the Task
Team evaluated the tender over a period of six
days and that the
Director: Finance, because of other commitments was not able to
accommodate this timeframe. It is contended in
the Answering papers
that the Director: Finance served on the Tender Committee and
accordingly his absence at the level of the
Task Team had no adverse
impact on the process. In my view, the process as a whole like any
other process was far from being perfect.
[74]
It was submitted on behalf of CPUT that reliance on alleged
non-compliance with CPUT’s Procurement Policy
does not found a
reviewable irregularity. Explaining the role of Policy CPUT explained
that while the Procurement Policy provides
the overall framework
against which the tender process is followed, by its very nature it
allows for a degree of fluidity and furthermore
that it is an
internal guideline to regulate the internal workings at CPUT as
opposed to affording rights to external parties against
CPUT. On
behalf of CPUT it was contended that none of these complaints have
any material impact on the ultimate fairness of the
tender process
and that the Applicants have not shown any prejudice that they
sustained as a result thereof.
ERRONEOUS
ELIMINATION OF CERTAIN APPLICANTS
[75]
CPUT explained in its Answering Affidavit that the expiry of the
COIDA certificate alone as far as it related to
the First Applciant
was of such a serious nature so as to justify the elimination of the
First Applicant. According to the Answering
papers, likewise its
submission of insufficient references on its own was sufficiently
serious so as to justify the First Applicant’s
elimination.
According to CPUT’s answering papers other entities were also
eliminated
inter alia
on these grounds. CPUT conceded that the
First Applicant had indeed submitted a VAT registration certificate
which had been “
inadvertedly overlooked in the process”.
However, one must consider this error against the backdrop of
CPUT’s stance in respect of the COIDA certificate and
references.
Importantly, CPUT required the tenderers to provide the
latest year audited accounts and/or bank statements.
[76]
According to CPUT the latter requirement was to show financial
stability on the part of the service provider. As
regards the First
Applicant CPUT explained that financial statements were submitted for
(a) year ended 28 February 2013; (b) year
ended 28 February 2011; and
no statements though were submitted for the year ended on 2012. The
First Applicant did not volunteer
the information in its Founding
papers that its COIDA certificate had expired. In this regard CPUT
addressed this complaint as
follows:
“
The tender
document required applicants to be up to date with the payment of
Workmen’s Compensation and provide a certificate
in respect of
that. Item 13 of the Mandatory Document Checklist requires “Proof
of registration: Workman’s Compensation/Occupational

Injuries…..The First Applicant’s COIDA certificate
expired on 30 April 2013 as is apparent from “AA19”);

this being even before the tender was advertised. The First Applicant
provided no explanation whatsoever as regards this outdated
COIDA
certificate in its tender submission….Furthermore, the First
Applicant attached two pages reflecting ABSA online notice
of
payments (also attached as part of “AA19”). In this
regard, the payment made to “Compensate” without
any
explanation as to who that is. Furthermore, the references reflect
2009 and 2010. The First Applicant now contends that these
were
erroneous dates arising from an administrative error. This however,
was not pointed out at all in its tender submission and
nor was the
alleged state of disarray…..I do not accept that it has become
“standard practice” (i.e. as a matter
of course) to show
evidence of proof of payment to the Compensation Fund. By way of
example, I point out that Mgebe managed to
attach a COIDA certificate
(dated 20 June 2013) (attached as “AA21”), thereby
showing that this requirement could indeed
have been complied with.”
It
is contended in the First Applicant’s head of argument that the
fact that the document submitted a COIDA certificate contained
a
remark “awaiting renewable from DOL” ought to have
indicated to CPUT that the failure to provide an updated certificate

was simply due to the administrative backlog. This assertion does not
found a reviewable irregularity. I am not persuaded that
the first
Applicant was erroneously eliminated as contended on behalf of the
First Applicant. Cleary the Applicants do not agree
with the basis on
which CPUT eliminated the First Applicant. This of course is hardly
sufficient to found a reviewable irregularity.
[77]
The Second Applicant
complains that it was erroneously
eliminated at the second stage (the functionary evaluation) in that
CPUT awarded it such low
marks “that it could not have been
rational”. In this judgment the law regarding rationality as a
ground of review
has been dealt with. It suffices to mention that it
imposes a very high threshold. In any event, according to the
Answering papers
the Second Applicant provided a table reflecting its
current client references leaving it to CPUT to contact those
references itself.
As I gather from the Answering papers this
approach did not have a bearing on the scoring that the Second
Applicant received. It
is contended by Ms Pillay on behalf of CPUT
that while it is correct that the Second Applicant has been rendering
services at CPUT,
but what was of particular importance were the
views of external reference who had been cited in the tender
documentation. There
is (I am told) nothing untoward, sinister or
unfair about the fact that both the Second Applicant and the Third
Respondent scored
18 out of 25 for management and experience.
[78]
It was contended on behalf of the Third Applicant that the latter
concedes that it did not submit letters of good
standing from PSIRA
and COIDA but that given its history of providing security services
to CPUT, it ought to have been considered
substantially responsive.
The problem with submissions just like the above one is that such
Applicants who were and had been rendering
security services to CPUT
previously appear to have thought that the invitation to tender was a
mere formality in that they were
certain they would again be awarded
the tender applied for. The position in respect of the Third
Applicant is addressed as follows
in the Answering papers:
“
There is
nothing “inexplicable” about the Third Applicant not
having been awarded the tender at the Wellington campus.
As I have
addressed elsewhere, the Third Applicant did not submit a letter of
good standing from PSIRA and did not include a COIDA
certificate, the
relevance of which I have already addressed. I attach the documents
that the Third Applicant did submit in response
to these requirements
as “AA25” and “AA26”, which self-evidently do
not meet the tender requirements. The
tender document requires: (a) a
PSIRA certificate; and (b) a letter of good standing from PSIRA. As
is apparent, AA25 reflects
a registration dated 2008 (as opposed to
it being current) but also does not include a letter of good standing
from PSIRA. By way
of example, I attach a copy of a letter of good
standing that was attached to the First Applicant’s submission
(as “AA26A”);
this is the tender requirement which the
Third Applicant failed to comply with. As is apparent, AA26 shows
confirmation of registration
with COIDA but does not constitute a
letter of good standing. I further point out that by all accounts the
Third Applicant itself
recognized that it had failed to comply with
these requirements by virtue of not having ticked them in the
mandatory checklist,
a copy of which is attached as “AA26B”.
I
reiterate, the Third Applicant has no entitlement to the award of the
tender and unless it can point to a reviewable irregularity
its
application must fail. As regards its price, I reiterate that it did
not proceed to the third stage of the process in order
to be assessed
on price.”
[79]
CPUT confirmed that the Fourth Applicant was eliminated on the
grounds that: (a) Provident fund was not included.
(b) Sample
Security Awareness Programme was not included. (c) Police or other
official clearance certificate was no included. (d)
SASSETA was not
included. However, in its Answering Affidavit CPUT has conceded that
it erred in concluding that the provident
fund proof of payment was
not included and it accepts that this document was in fact submitted.
It would appear that a wrong document
was submitted by the Fourth
Applicant instead of the Sample Security Awareness Programme. A
tender document requires “an
original police or other official
clearance certificate on the criminal record status of the company’s
employees”.
The submitted document did not meet the
requirements. According to the Answering papers a failure to provide
any one of the aforementioned
documents was fatal to a tender
submission and would result in the disqualification of a tenderer.
BIAS
[79]
The Applicants contended that Mr Mpambane quite blatantly applies
different standards and degrees of latitude to
the Applicants on the
one hand and the Respondents on the other. To this assertion it was
submitted on behalf of CPUT that the
Applicants proceed from the
erroneous premise that Mr Mpambane was the ultimate and sole
decision-maker in respect of the award
of the tender. We all know
that Mr Mpambane was not alone and could never have been alone.
Another assertion made by the Applicants
on their Founding Affidavit
is that Mr Mpambane owns a business in very close proximity to the
third Respondent and that he, the
vice Chancellor and Mr Mtwengwana
are part of the same church congregation in Khayelitsha. This was
addressed in the Answering
papers and in my view it does not require
further attention.
REMEDY
[80]
I have already made a finding that the impugned decisions do not
constitute administrative action and are not subject
to the principle
of legality. Even if I have wrongly decided as shown above but the
fact of the matter is that the Applicants have
failed in my view to
found any reviewable irregularity. The Applicants are certainly
aggrieved in that they were not awarded the
tender. Such a complaint
does not render the impugned decisions reviewable. Importantly, even
if the Applicants succeeded in establishing
a reviewable
irregularity, this Court remain clothed with a discretion in relation
to the question of remedy
. Allpay Consolidated Investment
Holdings (Pty) Ltd
supra
demonstrates the degree of
latitude that a Court is seized with in determining a just and
equitable remedy in maters such as the
instant one.
[81]
In the Applicant’s amended notice of motion they seek to have
CPUT’s decision set aside and for the
“entire tender
process [to] be initiated and completed afresh” subject to
certain directions. In the alternative I
am asked to make an order
remitting the matter for reconsideration. I have mentioned
supra
the existence of a discretion. In
Millennium
Waste Management v Chairperson, Tender Board: Limpopo Province &
Others
2008 (2) SA 481
(SCA), the
Supreme Court of Appeal held that in considering the question of
applicable relief a Court should strike a balance between
the
interest of the Applicant for administrative review and the interest
of the Respondents on the other hand. The Supreme Court
of Appeal
gave the following guiding formulation:
“
The
difficulty that is presented by invalid administrative acts, as
pointed out in this Court in ‘Oudekraal Estates’,
is that
they often have been acted upon by the time they are brought under
review. That difficulty is particularly acute when a
decision is
taken to accept a tender. A decision to accept a tender is almost
always acted upon immediately by the conclusion of
a contract with
the tenderer and that is often immediately followed by further
contracts concluded by the tenderer in executing
the contract. To set
aside the decision to accept the tender, with the effect that the
contract is rendered void from the outset,
can have catastrophic
consequences for an innocent tenderer, and adverse consequences for
the public at large in whose interest
the administrative body or
official purported to act. Those interested must be carefully weighed
against those of the disappointed
tenderer if an order is to be made
that is just and equitable.”
See:
para 23 of the Law Report.
[82]   In
Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd
2011 (4) SA 113
(CC) also reported as
[2011] (3) BCLR 229
, the
Constitutional Court found that, with reference to the provisions of
PAJA, a Court of review is not obliged to set aside administrative

action if it was taken unlawfully, but held that a Court of review is
conferred a discretion to make an order that is just and
equitable.
Indeed Section 8 of the PAJA provides for a wide range of just and
equitable remedies. A Court should, when making the
choice of a just
and equitable remedy emphasise the fundamental Constitutional
importance of the principle of legality but a Court
should also
consider whether relief which does not give full effect to the
finding of invalidity is justified in the particular
circumstances of
the case before it. Ordinarily this will arise in the context of
third parties having altered their position on
the basis that the
administrative action was valid and will therefore suffer prejudice
if the administrative action is set aside.
This “desirability
of certainty” needs to be justified against the fundamental
importance of legality. See paragraph
84 of
Bengwenyama
Minerals (Pty) Ltd
case
supra
. In
Allpay
case
supra
Froneman J held as follows: “…
..the
potential practical difficulties that may flow from declaring the
administrative action constitutionally invalid must be dealt
with
under the just and equitable remedies provided for by the
Constitution and PAJA. Indeed, it may often be inequitable to require

the re-running of the flawed tender process if it be confidently
predicted that the result will be the same.”
[83]
It is only hoped that the Applicants are not assuming that their
incumbency gives them additional rights relative
to tenderers. They
(Applicants) have been displaced from contracts which they appear to
believe they are entitled to and so seize
on every conceivable
irregularity as if it is fatal to the legality of the tender. In
truth, the Applicants are entitled to no
more than a fair process.
See
Esarfranki Pipelines and another v Mopani District
Municipality and Others
(SCA Case No. 40/13 delivered on 28
March 2014 at para 17. I am certain thereof that the applicants are
not asking this Court to
step into the shoes of CPUT in order to
second-guess its determinations of the criteria used to assess the
tenders, the weight
to be given to criteria, and the assessments made
by CPUT of the relative strengths and weaknesses of tenders. That
request would
be misplaced in that the Court’s role is merely
to ensure that the decisions of the administrator fall within the
bounds
of legality. In
Allpay Consolidated Investment Holdings
(Pty) Ltd and Others v Chief Executive Officer of the South African
social Security Agency
and Others
supra
, the
Constitutional Court clarified the approach to determining whether an
Applicant has established a ground of review in terms
of PAJA. It
held that firstly the Court must establish, factually, whether an
irregularity occurred. Secondly, the court must legally
evaluate the
irregularity to determine whether it amounts to a ground of review
under PAJA. The legal evaluation must take into
account the
materiality of any deviance from legal requirements by linking the
question of compliance to the purpose of the provision.
It is only if
the deviance from the legal requirement undermines the purpose of the
requirement, that a review ground under PAJA
has been established.
Indeed the Applicants have identified a host of irregularities in the
tender process but in my view, none
of these irregularities amounts
to a ground of review in terms of PAJA. No tender process is
absolutely clear of any deviance from
the legal requirements.
[84]
It is noteworthy that section 29 of the University’s
Institutional Statute is headed “Executive and
other Committees
of Council”. As mentioned earlier on its ambit is expressly
limited to committees of council. While the
Finance Committee is a
committee of Council, the Tender Committee and the Tender Task Team
are not. They are appointed by the Finance
Committee, as working
sub-committees with no final decision-making power.  The record
shows the Tender Committee merely made
recommendations to the
Management Committee. The Management Committee, in turn, merely made
recommendations to the Finance Committee.
The Finance Committee made
a recommendation to the Council. Council took the final decision. The
purpose of section 29 (4) is to
ensure that outsiders chair the major
committees of the University, in order to give them a degree of
independence. These are the
committees appointed by Council itself.
The requirement expressly does not apply to every committee and
sub-committee appointed
by the major committees.
[85]
The purpose of limiting the ambit of section 29 (4) to only those
committees appointed by council is to protect
the capacity of the
University to control and expedite its day-to-day administrative
functions. The logic of section 29 (4) therefore
two-fold: it
safeguards the independence of decision-making processes without
unduly encumbering the administrative process. It
is not contested
that Council took the final decision itself. It delegated the
administrative process to the Finance Committee,
who in turn
sub-delegated to various sub-committees. Our Courts have consistently
held that the decision-maker need not be acquainted
with each fact
herself, provided she does not rubber stamp the recommendation made
to her. What is important is that the administrator
is the one that
exercise the discretion. See
Minister of Environmental Affairs
and Tourism and Another v Scenematic Fourteen (Pty) Ltd
[2005] ZASCA 11
;
2005
(6) SA 182
(SCA) at para 20.
ORDER
[86]
In the circumstances, I make the following order:
(a)  The application
to review and set aside tender CPUT 06/12 is hereby dismissed with
costs as explained
infra
.
(b) The Applicants are
liable to pay costs of the Respondents jointly and severally (the one
paying the other to be absolved).
(c)  Payment of the
aforementioned costs shall include payment of costs associated with
the employment of two counsel by each
Respondent herein.
DLODLO,
J
APPEARANCES
FOR
1
ST
APPLICANT:
ADV.
DC JOUBERT [021] 426 2429
Instructed
by:
Eben
Klue Attorneys
16
First Avenue, Boston
BELLVILLE
(Ref.
E Klue/sw/E139)
C/o
Harmse Kriel Attorneys
Office
203, 2
nd
Floor
80
Strand Street
CAPE
TOWN
FOR
1
ST
RESPONDENT:
ADV.
K. PILLAY [021] 426 4052
ASSISTED
BY
:
ADV.
Z. TITUS [021] 424 6085]
Instructed
by:
Minde
Schapiro & Smith Inc.
TygerValley
Offce Par II
Cnr
Old Oak & Willie van Schoor Roads
BELLVILLE
(Ref.
S Solomons)
C/o
Gerald Shnaps
Room
606, 6
th
Floor
47
on Strand, 47 Strand Street
CAPE
TOWN
FOR
2
ND
& 3
RD
RESPONDENTS:
UNREPRESENTED
FOR
4
TH
RESPONDENT:
ADV.
RGL STELZNER (SC) [021] 424 6301
ASSISTED
BY
:
ADV.
PJ RABIE [021] 426 2653
Instructed
by:
Kessler
De Jager Inc.
171
Vasco Boulevard
GOODWOOD
C/o
Heyns & Partners
The
Chambers
50
Keerom Street
CAPE
TOWN
FOR
5
TH
RESPONDENT:
ADV.
C. STEINBERG (JHB BAR) [011] 217 5000
ASSISTED
BY
:
ADV.
N FERREIRA
Instructed
by :
Blake
Bester Inc.
[Tel.
No. 011 764 4643]
C/o
Strauss Daly Attorneys
15
th
Floor, The Terraces
34
Bree Street
CAPE
TOWN
[Tel.
No. 021 410 2203]