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Down Touch Investments (Pty) Ltd and Another v South African National Road Agency SOC Limited and Another (2064/2020) [2020] ZAECGHC 120 (29 October 2020)

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IN THE HIGH COURT OF SOUTH AFRICA

[EASTERN CAPE DIVISION: GRAHAMSTOWN]

                                                                                                Case No. 2064/2020

In the matter between:

DOWN TOUCH INVESTMENTS (PTY) LTD                                        1st Applicant

MAMLAMBO CONSTRUCTION (PTY) LTD                                         2nd Applicant

And

THE SOUTH AFRICAN NATIONAL ROAD AGENCY

SOC LIMITED                                                                                       1st Respondent

TAU PELE CONSTRUCTION (PTY) LTD                                             2nd Respondent

JUDGMENT

JOLWANA J:

Introduction

[1] This application was brought on an urgent basis, the applicants seeking cessation orders in the implementation of the first respondent’s decision to award the bid for the special rehabilitation of a 36,7km national route R56 section 5 from Dordrecht to Indwe (the tender) to the second respondent.  The interdictory relief is sought pending a review application for the setting aside of the decision of the first respondent to disqualify the applicants’ bid from the tendering process and other relief as may be necessary.

[2] The first respondent opposes this application and part of its opposition is in no small measure and in addition to the facts on which its opposition is based, the institutional purpose for its establishment in its founding legislation.  I deal with this issue later on.  The second respondent does not oppose the application nor has it filed an affidavit, even if only to bring certain facts to the attention of this court.  Its nonchalant posture considering that it was to it that the impugned tender was eventually awarded following what the first respondent describes as a rigorous tendering process is raised by the applicants as one of the weighty considerations.

The parties

[3] The first and second applicants are two independent construction companies registered and incorporated in South Africa with Construction Industry Development Board (CIDB) grading 9CE and a BBBEE certified status level 1 in respect of the first applicant and CIDB grading 8 CEPE and a BBBEE certified status level 1 in respect of the second applicant.  They formed a joint venture for the purpose of this tender and submitted joint bid.  Unless indicated otherwise I refer to the two applicants simply as the applicant hereinafter.

[4] The first respondent is a state owned entity and therefore an organ of state formed and established in terms of a statute, inter alia, for the construction and maintenance of national roads in this country.  The second respondent is a registered construction company.  Its CIDB and BBBEE grading are not in issue in these proceedings.

The facts

[5] The first respondent invited tenders for the special rehabilitation of the national route R56 section 5 from Dordrecht to Indwe.  The tenders were to be submitted by 14h00 on 7 February 2020.  The applicant timeously submitted what it says was a bid that was compliant in all respects.  However, whether the tender of the applicant was in fact compliant is a hotly contested issue.

[6] Paraphrased, some of the conditions of the tender were that the tender was estimated to be in excess of R200 million and therefore the tenderers were required to have a 9CE or 8CEPE CIDB grading.  The 90/10 point scoring system was going to be used in awarding points and the tender was to be awarded to the company or tenderer that scored the most points.  Eligible tenders were to be evaluated for functionality.  An unincorporated joint venture such as the applicant was required to have a tender specific BBBEE certificate indicating its BBBEE status.

[7] When the applicant had not heard anything about the awarding of the tender it wrote a letter to the first respondent on 17 August 2020 asking for a progress report.  The first respondent confirmed that the award had not yet been made at that stage.  About ten days later rumours started circulating that the tender had been awarded to the second respondent.  It then instructed its attorneys to write a letter to the first respondent in which it asked for written reasons in terms of section 5 of PAJA[1].  That letter is dated 27 August 2020 and it asked the first respondent to agree to provide such reasons within seven days and to confirm if indeed the second respondent had been awarded the tender.  The first respondent was also requested to bring to the attention of the successful bidder that in whatever steps it took to implement the tender it should take into account the applicant’s request for reasons as it would decide what to do depending on the reasons the first respondent would have provided.

[8] When the applicant became aware that the first respondent had instructed its attorneys on the matter, it again wrote a letter dated 4 September 2020 to the first respondent’s attorneys again asking for the reasons for the award of the tender to the successful bidder.  It also requested an undertaking for the suspension of the implementation of the award pending expedited review proceedings.

[9] The first respondent, through its attorneys provided the reasons on 11 September 2020 but it declined to provide the undertaking.  The reasons in a nutshell were that the applicant did not meet the eligibility criteria resulting in it being deemed non-responsive and was therefore disqualified.  The reasons are briefly encapsulated below.

[10] First, the applicant failed to submit a consolidated SANRAL accredited BBBEE construction sector scorecard and certificate.  The scorecard it submitted had an incorrect project number.  Second, the applicant did not meet the requirements pertaining to specific construction and project management experience in that it submitted only two projects which were successfully completed in the recent past with the requisite value of R200 million or more as against the required three projects of that value.  Third, the applicant submitted only one CIDB contractors performance report which was in the prescribed format D5.1 and D5.2.

[11] The applicant contends that the foundation of its exclusion is factually incorrect and therefore the decision to declare it non-compliant is consequently unlawful.  Furthermore and in any event, the criteria for functionality assessment leading to its unlawful exclusion was incorrectly and prematurely applied.

[12] This, it submits is the case for reasons that follow below.  The first one is that it is factually incorrect that it failed to submit a tender specific consolidated BBBEE construction sector scorecard.  It annexed to its founding affidavit as annexure JJ6, a certificate reflecting tender number R.056.050.2026/1 which is the correct tender number.  Furthermore, and in any event even if its certificate had reflected an incorrect tender number which was not the case, the first respondent was wrong and therefore its conduct unlawful to disqualify its bid at that stage on this basis because the legislative framework does not permit this.

[13] The second reason is that it is factually incorrect that the applicant had failed to comply with the requirement of submitting proof of past work experience of a minimum value of R200 million or more.  It annexed as annexure JJ7 extracts of its bid to prove that the joint venture had in fact jointly completed three projects of over R200 million rand each.  For this reason the applicant contends that its exclusion on this basis was done based on a factual error.  Once again the applicant contends that in any event even if the factual error did not exist, the first respondent could, at bests, have dealt with this issue at the functionality assessment stage.  Therefore, its outright disqualification, even if it was based on the correct facts, was not authorised by Regulation 5 of the Preferential Procurement Regulations, 2017 and was therefore unlawful.

[14] The last reason for the applicant’s contention that its disqualification was unlawful relates to the scorecard issued for past contract performance.  In this regard the applicant’s case is that tenderers were required to submit signed CIDB performance rating forms for each completed project required under form D5.1.  The applicant avers that the first respondent is the only state entity in the road construction industry in this country that issues performance rating forms in that prescribed format.  The second applicant had submitted one such rating form in the prescribed format which is annexed in the founding affidavit as JJ8.  Two of the three required projects which the first applicant submitted were issued by the relevant consulting engineer or the relevant employer and were in line with the CIDB as required.  Certificates of completion of those two completed projects which the first applicant submitted are annexed to the founding affidavit as annexures JJ9 and JJ10 respectively.  Therefore it was not the case that the certificates of completion of three projects that were in excess of R200 million were not submitted by the applicant.  It was only that two of the three projects even though they were CIDB compliant, were not related to a project of the first respondent.  Therefore and on this basis as well the disqualification was prematurely made at the eligibility assessment stage whereas it should have formed part of the overall assessment at the functionality assessment stage.

[15] For these reasons the applicant contends that its disqualification was unlawful. The tender process was therefore both unlawful and tainted with illegality committed by the first respondent.  The implementation of the award cannot be allowed to continue hence this urgent application for an interdict pending review proceedings to be instituted within 5 days of the interdict, if granted.

[16] The facts in this matter are largely common cause.  I see no point in the regurgitation of the same save where it becomes necessary to clarify the first respondent’s contentions about them in its opposition to the granting of the interdictory relief.

[17] The first respondent contends that its decision to disqualify the applicant from the onset at the eligibility stage was informed by a rigorous procurement process which complied with all the legal prescripts.  The evaluation process was in accordance with the procedure and principles set out in its tender document which it annexed to the answering affidavit.  It is that tender document which set out the standard conditions binding to all interested parties particularly the employer itself and the tenderers.

[18] The first respondent sets out the test for responsiveness in the answering affidavit which is contained in the tender document which is also largely common cause as follows:

15. Clause 5.7 provides that a tenderer who engages in corrupt or fraudulent practices will be disqualified.  Clause 5.8 sets out the test for responsiveness.  This is an important clause for this application because the applicant’s complaint is based on the fact that the tender submitted was deemed non-responsive.  At this stage, the first respondent:

15.1 Determines, after opening and before detailed evaluation, whether each tender offer that was properly received (a) complies with the requirements of the standard conditions of tender in this part of ISD 10845 (b) has been properly and fully completed and signed, and (c) is responsive to the other requirements of the tender documents.

15.2 A responsive tender is one that conforms to all the terms, conditions, and scope of work of the tender documents, without material deviation or qualification.  A material deviation or qualification is one which, in the employer’s opinion would (a) detrimentally affect the scope, quality or performance of works, services or supply identified in the scope of work, (b) significantly changes the employer’s, or the tenderer’s risks and responsibilities under the contract, or (c) affects the competitive position of other tenderers presenting responsive tenders, if it were to be rectified.”

[19] On the disqualification of the applicant’s tender the first respondent makes the following averments:

28. The applicants did not meet the specifications of the prequalification criteria and therefore was non-responsive.  The reasons for the decision to reject its bid are set out in annexure MP1 [the reasons letter] above.  They are the following:

28.1 The tenderer contrary to the clause of 5.11.8 submitted a consolidated SANRAL accredited Level 1 BBBEE Construction Sector scorecard.  The consolidated scorecard quoted was for project number R.063-130-2015/1.  The project under consideration is R.056-050-2016/1.

28.2 The tender submitted by the applicants did not comply with clause 4.1.1(b)(iv) for a JV in that its Form D5.1 of the three projects listed, only two are above the value of R200 000 000.00 that was required.

28.3 Furthermore, the tenderer only provided one CIDB Contractor’s Performance Report for Project NRA R.067-020-2015/1 Grahamstown to Fort Beaufort.  The other two projects listed lack CIDB Contractor’s Performance Report which is required.

28.4. The tender submitted had irreconcilable discrepancies in that the COPY CD submitted received on 25 February 2020 contained information that was different to the ORIGINAL copy.  What happened was that when the COPY CD was opened certain information was missing.  In order to facilitate the evaluation process, a further copy of the CD was requested by the engineer.  Since the duplicate CD copy has no precedence over the Original CD in terms of Clause 4.13.1, it was entirely reasonable to reject as non-responsive the bid in terms of clause 5.8.”

[20] What can be gleaned from these reasons as contained in the answering affidavit is that they are not anything more than what is contained in the reasons letter.  They are simply a regurgitation thereof without any elaboration whatsoever.  This is rather regrettable because this was a perfect opportunity for the first respondent to give more content to the reasons instead of merely repeating them.  I deal with why this poses some difficulties more comprehensibly below.

[21] In the founding affidavit the applicant referred to and annexed the documents it claims to have been part of the hard copy tender document that was submitted to the first respondent.  In particular the applicant annexed the documents required in respect of the first and second reasons for the disqualification, to show that it had submitted those documents.  These were annexures JJ6 and JJ7 to the founding affidavit.  They appear to be the correct documents as specified in the tender specifications.  If they are the correct documents as the applicant contends and insists that they are the replicas of the actual documents submitted, it must follow that the applicant should not have been excluded on account of failing to submit them.

[22] This is very important because it was also or even mainly the alleged failure to submit them that was the basis of the disqualification for non-responsiveness.  Regrettably, it was only during submissions by the first respondent’s counsel that clarity was given about the underlying contentions.    The clarification was that as indicated in the reasons letter the consolidated SANRAL accredited level 1 BBBEE construction sector scorecard reflected an incorrect project number R.063-130-2015/1 not the required project number R.056-050-2016/1.  What the first respondent did not do in its answering affidavit was firstly to deal with annexure JJ6 and state clearly that that is not the document that was submitted with the applicant’s tender.  It also astonishingly failed to annex a copy of the BBBEE level 1 construction scorecard it allegedly received nor did it specifically say that it did not receive JJ6, the correct document annexed to the founding affidavit.

[23] The same applies with annexure JJ7 to the applicant’s founding affidavit.  The first respondent’s response thereto is as terse as it is with respect to the other annexures.   It said that it received only two instead of three listed completed projects to the value of R200 million.  Again the first respondent did not make it clear that it did not receive JJ7 which it was admitted during argument that it contained the required three projects.  Again it astoundingly did not annexe to its answering affidavit a copy of the document it received as against merely referring to it with the glibness that it did.

[24] It was submitted during the hearing in court that access to the original tender documents was limited because of the security environment in which the original tender documents are kept.  Firstly nowhere in the answering affidavit did the first respondent explain this.  Secondly it is not clear why it could not have sought an agreement with the applicant on how that problem could be dealt with and make those documents available without compromising the integrity of the security of the environment in which they are kept.  The point is that the reasons why the incorrect documents which it was submitted, were with the original applicant’s tender document in hard copy were not annexed to the answering affidavit were not explained at all.  It was explained and clarified during submissions by counsel for the first respondent during the hearing in court.

[25] That those documents are very important goes without saying.  The fact that the applicant annexed to the founding affidavit the documents it alleged were part of the original tender document called for a clear and comprehensive disavowal from the first respondent if it seriously intended to deny receiving them.  There are many reasons for this but at least two immediately come to mind.  The first is that if indeed the documents in the original tender submission are not the ones annexed to the founding affidavit that must mean one of two things.  The first one is that the applicant must be misleading the court in the founding affidavit and thus committing the crime of perjury in an attempt to deliberately cloud in unnecessary controversy an otherwise lawful tender process for some unfathomable reasons. 

[26] If that is not the case then the alternatives are too ghastly to contemplate but include the fact that the first respondent’s security environment in which the documents are kept after submission is seriously compromised and open to possibly corrupt tempering and influence.  Either way, in my view it should have set the first respondent’s alarm bells ringing precisely for these reasons amongst others.  This is so even if it correctly believed in the intergrity of the security of the environment in which the documents are kept because it has a duty to instill public confidence in its tender processes.  That would surely mean that it is the applicant that conducted itself in a possibly corrupt manner by submitting incorrect tender documents and falsely pretending to this court that it had submitted the correct ones.  This would have been done so that it can dishonestly interdict a national project that will contribute to the reduction of the road carnage in this country.  All of these possibilities are very serious considerations that called upon the first respondent especially as a state institution to seriously challenge and disprove in a very firm and decisive manner the applicants evidence.  Unsubstantiated and vague denials are neither enough nor appropriate.

[27] That the first respondent should have made efforts to annex the documents it alleges to have is an important evidentiary matter.  Documents that are referred to in affidavits must, where possible, be annexed as a matter of course.  If this is impossible, it must be explained that they could not be annexed for whatever reason.  This becomes even more important in respect of disputed documents such as the ones referred to herein.  The implications of what is said above about the first two reasons for the disqualification of the applicant are that the applicant might have lied under oath.  The alternative proposition is that the first respondent’s tender submission and control security system may have been corruptly tempered with.  These possibilities are so huge that the other points, though important on their own in terms of the legal framework, pale into significance in my view.  I sincerely hope that none of the two possibilities is true but I am perturbed that they cannot be both correct and legally sensible.  Where the truth lies is difficult to tell at this stage.

[28] On the third reason for its disqualification the applicant contends that it was also unlawful for it to be disqualified as it had submitted three CIDB compliant contract performance certificates as required.  The first one being the one issued to the second applicant because it had done a project of the first respondent and could be issued with such certificate in that format.  The other two completion certificates were also CIDB compliant and correct but for the fact that they were not issued by the first respondent.  There is no issue with the first one marked JJ8 as it related to a project of the first respondent that the second applicant had successfully completed.  As to the other two which were for projects done by the first applicant and which were also CIDB compliant, it is clear that the first respondent’s reason for disqualification was that they were not its projects. 

[29] It is clear from the relevant certificates that those projects objectively qualified, the only problem that the first respondent had being the fact that they were not its projects.  The applicant submits that it was erroneous for the first respondent to say that the relevant certificates being JJ9 and JJ10 were not for compliant projects.  This is so because only the first respondent issues the certificates for past contract performance evaluation in that format in the road construction industry.  It was therefore unreasonable and unlawful for it to require not just CIDB compliant certificates but the ones only it issues for its completed projects as that excluded other compliant certificates and therefore bidders.

[30] The last issue related to the issue of the original CD as against the copy CD.  The first respondent alleged that it noticed discrepancies in the original CD and asked the applicant to submit a copy CD which did not have the discrepancies and the applicant did that.  On what logical and sensible bases, contends the applicant, was it still disqualified for the same discrepancies between the two CDs?  Why was it asked to submit a copy CD if the first respondent could still rely on the original CD for rejecting its bid?  In my view, both CDs submitted should have been compared with the original hard copy that had been submitted which, it was common cause, took precedence over the electronic submissions.  The comparison and exclusion based on discrepancies between the original CD and the copy makes the hard copy redundant and lose its relevance if it is not given precedence.

[31] The applicant’s submissions on the whole were that the reasons for disqualification at the eligibility stage was that they were all unlawful and also not even permissible in terms of Regulation 5 of the PPPFA 2017 Regulations[2] and therefore unlawful also for this reason.

[32] Regulation 5 reads:

5 (1) An organ of state must state in the tender documents if the tender will be evaluated on functionality.

  (2) The evaluation criteria for measuring functionality must be objective.

(3) The tender documents must specify –

            (a) the evaluation criteria for measuring functionality,

              (b) the points for each criteria and, if any, each sub-criterion, and

              (c) the minimum qualifying score for functionality.

(4) The minimum qualifying score for functionality for a tender to be considered further-

              (a) must be determined separately for each tender; and

            (b) may not be so –

(i) low that it may jeopardise the quality of the required goods or services; or

(ii) high that it is unreasonably restrictive.

(5) Points scored for functionality must be rounded off to the nearest two decimal places.

(6) A tender that fails to obtain the minimum qualifying score for functionality as indicated in the tender documents is not an acceptable tender.

(7) Each tender that obtained the minimum qualifying score for functionality must be evaluated further in terms of price and preference point system and any objective criteria envisaged in regulation 11”

[33] The common cause facts in this matter include the fact that the applicant was disqualified at the eligibility stage and was never assessed at the next stage which is the functionality stage.  Some of the reasons for the disqualification dealt with in some detail above were clearly for a functionality assessment that was done at the eligibility assessment stage.  The first respondent admits to having performed a functionality assessment at the eligibility assessment stage of the evaluation process.  This is how this admission is couched in the answering affidavit:

62. The JV failed to meet the functionality requirements in that it did not submit information about its record as a JV, of having completed similar projects.  This requirement is rational and reasonable.  The disqualification of a bid on the basis that a bid does not have evidence of technical experience is reasonable.”

[34] It is clear even from the answering affidavit that the first respondent seems to have misconstrued the applicant’s case in this regard and it is not addressed anywhere else in the answering affidavit.  The issue is three fold.  First, the question is whether or not it is lawful to perform a functionality assessment at the eligibility stage and not allocate points even if it is a zero.  The answer is clearly in the negative.  This is clear from Regulation 5 itself.  The second issue is that to the extent that in the bid document or standard conditions the first respondent created a situation in which it could perform a functionality assessment at the eligibility stage, and not do it in the manner prescribed by Regulation 5, that creates issues of legality.  Third, in any event, functionality assessment, even where it is performed at the correct stage, namely the functionality assessment stage, Regulation 5(6) provides in clear terms that “a tender that fails to obtain the minimum qualifying score for functionality as indicated in the tender documents is not an acceptable tender.”

[35] This in my view clearly means that the first respondent was required to allocate points and only where a tender does not reach the required threshold could it be said to be a “not an acceptable tender.”  There is no evidence of the points that were given to the applicant for functionality and whether those points reached the required minimum threshold.  The reason for the absence of this evidence is that the first respondent clearly confused itself by purportedly doing both the eligibility and functionality assessments at the eligibility stage.  This was clearly not lawful and is in any event not authorised by the legislative framework especially Regulation 5.  Alternatively, it is not enough for the respondent to say that it performed a functional assessment without showing transparently, how that assessment was done in compliance with Regulation 5?

Requirements for an interdict

[36] This court is not sitting as a court of review.  I am only required to determine whether or not a prima facie right has been established.  There is no doubt that a decision to declare a tender responsive or non-responsive is a reviewable decision.  I am mentioning this point because what the applicant seeks is an order of cessation of performance of the award pending review proceedings to be instituted shortly.  Its case is that it was unlawfully disqualified as being non-responsive and excluded from further participation in the tender process.

[37] In WDR Earthmoving Enterprises[3] Swain JA stated the legal position as follows:

The third respondent accordingly erred in concluding that the bid of the fourth respondent was responsive.  The decision by the second respondent to accept the recommendation of the third respondent to award the tender to the fourth respondent and thereafter award the tender to the fourth respondent, accordingly falls to be reviewed and set aside.  In the result, the first respondent will have to commence the tender process afresh and invite tender offers from suitably qualified contractors, for the construction of the internal gravity sewer system in Jamestown.  The appellants accordingly qualify for the grant of special leave to appeal from the judgment of the full court of the Eastern Cape Division, Grahamstown, to this court.”

[38] This clearly means that if the applicant makes out a case for an interdict it should be granted the interim relief to interdict further performance of the contract.  The second respondent, as it is entitled to, has decided not to participate in these proceedings.  Therefore, there is no evidence from it on whether or not the contract has already been signed, if so to what extent has work progressed and therefore to what extent would it be inconvenienced if the interdict is granted.  On the other hand, the first respondent is inexplicably cagey about most of these facts that should ordinarily be known to it.  For instance it goes no further than alleging that the second respondent has started on the construction process and that the granting of a cessation order would be highly prejudicial.

[39] For the court to assess the prejudice that might be suffered, facts ought to have been brought before court to facilitate the proper adjudication of the issues.  For instance, I have no idea what is meant by “the second respondent has started on the construction process”.  Does it mean that site establishment has been done or does it mean that the actual works have already started and are already underway and to what extent.  None of this is clear because of the paucity of detail in the evidence of the first respondent.

[40] It was argued quite at length that the applicant has not shown any prima facie right for it to be granted the interim orders it seeks.  The law on interim interdicts has recently been restated by the Constitutional Court in Urban Tolling Alliance[4](OUTA).  The court said:

The High Court relied on the well - known requirements for the grant of an interim interdict set out in Setlogelo and refined 34 years later, in Webster.  The test requires that an applicant that claims an interim interdict must establish (a) a prima facie right even if it is open to some doubt; (b) a reasonable apprehension of irreparable and imminent harm to the right if an interdict is not granted; (c) the balance of convenience must favour the grant of the interdict and (d) the applicant must have no alternative remedy.”

[41] There can be no argument that the applicant, like all construction companies is entitled to participate in the tender process subject to the rules created within the legal framework.  It follows that the exclusion from participation must also be informed and grounded on a sound and lawful foundation undergirded by the legal framework and permeated by considerations of fairness.  If this is not done and an exclusion appears to be neither fairly nor lawfully grounded, it follows that the applicant would have a prima facie right and would have an apprehension of imminent irreparable harm.  Public good or interest suffers where a state organ such as the first respondent which is constitutionally obliged to encourage and assist in ensuring that the constitutional value system as applies in this country is observed and promoted.  This on its own may entitle a wronged tenderer to challenge the process and if a prima facie right is established, to be granted an interdict pending the review depending on the facts of each case.

[42] I have already referred to the paucity of evidence provided by the first respondent above.  The evidence, had it been provided, would have assisted this court to assess properly the balance of convenience.  To the extent that it is the first respondent’s case that the balance of convenience militates against the granting of the interim interdict, unfortunately that submission was made in vacuum without any facts pertaining to the performance of the works and the extent to which such works has commenced and progressed.

[43] The first respondent sought to place a lot of emphasis on its unique position as a state organ which is constitutionally obliged to do its work and should do so unhindered because of its statutory institutional position.  A lot of submissions were made about the importance of the work the first respondent is statutorily empowered and obliged to perform and the public good it serves.  In this regard I was referred to Urban Tolling Alliance[5] where Moseneke DCJ said:

[2] This early I would like to delineate the powers and responsibilities of SANRAL.  Its main functions and responsibilities include all strategic planning, design, construction, management, control, maintenance and rehabilitation of national roads.  It also bears the responsibility of arranging financing for those activities.  For present purposes it is important to record that SANRAL is obliged to exercise its powers and execute its responsibilities “within the framework of government policy.”  The SANRAL Act prescribes the funding options available to SANRAL.  The funding options relevant to the present dispute include loans granted to or raised by SANRAL, levies charged on the sale of fuel toll and monies appropriated by Parliament.

[65] When it evaluates where the balance of convenience rests, a court must recognise that it is invited to restrain the exercise of statutory power within the exclusive terrain of the Executive or Legislative branches of Government.  It must assess carefully how and to what extent its interdict will disrupt executive or legislative functions conferred by the law and thus whether its restraining order will implicate the tenet of division of powers.  Whilst a court has the power to grant a restraining order of that kind, it does not readily do so except when a proper and strong case has been made out for the relief and, even so, only in the clearest of cases.

[66] A court must carefully consider whether the grant of the temporary restraining order pending a review will cut across or prevent the proper exercise of a power or duty that the law has vested in the authority to be interdicted.  Thus courts are obliged to recognise and assess the impact of temporary restraining orders when dealing with those matters pertaining to the best application, operation and dissemination of public resources.  What this means is that a court is obliged to ask itself not whether an interim interdict against an authorised state functionary is competent but rather whether it is constitutionally appropriate to grant the interdict[6].”

[44] The first point to be made about OUTA is that the court was dealing with challenges to policy laden executive decisions and not an administrative action as it is the case in this matter.  Secondly even if that was not the case I have already indicated the glaring shortfalls in the evidence of the first respondent.  If there is a challenge in the conduct of the first respondent and it does not confront the challenge with evidence the court is entitled to take a robust view of the matter.  This case is in my view, not a case in which OUTA could be the basis for refusing an interdict lest a constitutionally inappropriate conduct becomes entrenched.  In fact OUTA calls for the granting of the interdict in constitutionally appropriate cases. 

[45] Our constitutional doctrine of legality[7] allows no room or debate or doubt about whether or not unlawful conduct should not be interdicted in appropriate cases.  In my view, it would not be correct to read and construe OUTA to mean that there is room for unlawfulness to be tolerated or accommodated even by a state organ such as the first respondent.  There is nothing in the answering affidavit that shows that the balance of convenience calls for the refusal of the interdict.  In Cash Paymaster Services[8] Tshiqi JA said:

In any event this court in Moseme Road Aconstruction CC and Others v King Civil Engineering Contractors (Pty) Ltd and Another [2010 (4) SA 359 [SCA] held that (n)ot every slip in the administration of tenders is necessarily to be visited by judicial sanction (para 21).  Considerations of public interest, pragmatism and practicality should inform the execution of a judicial discretion whether to set aside administrative action or not.”

[46] The submissions made both in the answering affidavit and during arguments in court about the public interest considerations in light of the statutory position of the first respondent and considerations of the doctrine of separation of powers are clearly misplaced.  What was missing however, were averments and submissions on pragmatism and practicality on which in the factual matrix public interest considerations must be looked at in the exercise of judicial discretion even assuming the questions of separation of powers were relevant.

[47] Besides the fact that I am not aware of any authority and I was not referred to any for the view that a tenderer who is unlawfully disqualified is necessarily entitled to sue and recover damages[9], there is another problem bigger than that.  There is the very important question of whether or not, it is permissible to allow a constitutionally invalid conduct to continue and thus undermine the constitutional value of legality referred to above.  I am of the view that it is only in exceptional cases should constitutionally invalid conduct be allowed and for very clear reasons.  All of these considerations must, in my view, be weighed up as part of the exercise of the wider judicial discretion of whether or not it is appropriate in a particular case to interdict unlawful conduct.  An interim interdict would allow the review process to delve deeper into the intricase issues entangled in a particular case.  It must be remembered that it might very well be well nigh impossible to unscramble the consequence of an unlawful administrative action once it is allowed to reach a certain point.

Urgency

[48] This brings me to the last issue, which though not pursued with vigour and correctly so I might add, was not abandoned, the issue of urgency.  The applicant has given a factual account of what it has been doing since becoming aware on 27 August 2020 from rumours, that the tender had been awarded to the second respondent up to the launching of these proceedings on the 01 October 2020.  It is clear that most of the delay is attributable to the applicant asking for reasons for its disqualification.  It thereafter sought to find common ground with the first respondent on the suspension of the implementation of the award.  The applicant cannot, on the facts of this matter, be faulted for taking time and reasonable steps time to seek an agreement on the suspension of the implementation pending urgent review proceedings to avoid burdening this court with a costly urgent application.  This was not only justified but was necessary to avoid these proceedings.  Therefore and on the facts of this case there is sufficient urgency to justify the applicant’s non-compliance with the time frames prescribed in rule 6(5) and in terms of rule 6(12) of the Uniform Rules of Court, to grant condonation for such non-compliance.

The results

[49] The applicant must therefore succeed in this application.  In the result the following order shall issue:

1. Pending the finalisation of the urgent review proceedings to be instituted in accordance with prayer 4 below:

1.1 The respondents are interdicted and restrained from in any way further implementing the first respondent’s decision to award Bid R.056-050-2016/1: THE SPECIAL MAINTENANCE ON NATIONAL ROUTE R56 SECTION 5 FROM DORDRECHT TO INDWE (36,7 KM) to the second respondent.

1.2 The respondents are likewise interdicted and restrained from concluding and/or giving any further effect to any service level agreement they may have concluded pertaining to the works mentioned in prayer 2.1 above and by the time this application is heard.

1.3 The respondents are interdicted and restrained from performing any construction related activity related to either the decision or the contract.

2. The order contained in prayer 1.1 to 1.3 above is to serve as an interim interdict with immediate effect.

3. The applicants are ordered to institute a review application in accordance with the practice directives of this court within 5 days after the date of granting of this order, for such relief as they may be advised is necessary and which will include the review and setting aside of the first respondent’s decision to exclude the applicants’ bid from the tender mentioned in prayer 2 above, alternatively and/or to review and set aside the request for tenders for the abovementioned works on the criteria the first respondent determined.

4. The costs of this application are reserved for later determination by the court hearing the review application.

_______________________

M.S. JOLWANA

JUDGE OF THE HIGH COURT

Appearances:

Counsel for the Applicants: ADV S. GROBLER SC

Instructed by: JOUBERT GALPIN & SEARLE

c/o HUXTABLE ATTORNEYS

Grahamstown

Counsel for the Respondent: ADV T. MASUKU SC

Instructed by: DM5 INCORPORATED

c/o WHEELDON, RUSHMERE & COLE INC

Grahamstown

Heard on: 22 October 2020

Delivered on: 29 October 2020

[1] Promotion of Administrative Justice Act 3 of 2000: Section 5(2) of PAJA provides that “The administrator to whom the request is made must, within 90 days after receiving the request, give that person adequate reasons in writing for the administrative action.”

[2]Preferential Procurement Regulations 2017 issued by the Minister of Finance in Government Gazette No. 40553 dated 20 January 2017 in terms of the Preferential Procurement Policy Framework Act 5 of 2000.

[3] WDR Earthmoving Enterprises & Another v The Joe Gqabi District Municipality & Others (392/2017) [2018] ZASCA 72 (30 May 2018) para 45

[4] National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (6) SA 223 (CC) para 41.

[5] Note 4 above.

[6] My emphasis.

[7] Section 2 of the Constitution of the Republic of South Africa, 1996 provides that:

This Constitution is the supreme law of the Republic, law or conduct inconsistent with it is invalid and the obligations imposed by it must be fulfilled.”

[8] Chief Executive Officer, South African Social Security Agency, and Others v Cash Paymaster Services (Pty) Ltd 2012 (1) SA 216 (SCA) at 225 C-D.

[9] In Moseme referred to in para 45 above, it was held that “Tendering has become a risky business and courts are often placed in an invidious position in exercising their administrative law discretion – a discretion that may be academic in a particular case, leaving a wronged tenderer without any effective remedy.”