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FORM A

FILING SHEET FOR SOUTH EASTERN CAPE LOCAL DIVISION JUDGMENT

ECJ:

PARTIES: FIZIK INVESTMENTS (PTY) LTD t/a

UMKHOMBE SECURITY SERVICES

And

NELSON MANDELA METROPOLITAN UNIVERSITY

1. Registrar: 1210/08

2. Magistrate:

3. High Court: SOUTH EASTERN CAPE LOCAL DIVISION

DATE HEARD: 06/11/08

DATE DELIVERED: 18/11/08

JUDGE(S): JONES J

LEGAL REPRESENTATIVES –

Appearances:

1. for the Applicant(s): ADV: J.W. Eksteen

2. for the Respondent(s): ADV: R.G. Buchanan

Instructing attorneys:

1. Applicant (s): SCHOEMAN OOSTHUIZEN ATTORNEYS

2. Respondent(s): RUSHMERE NOACH INC.

CASE INFORMATION -

1. Nature of proceedings : APPLICATION FOR REVIEW

Not reportable

In the High Court of South Africa

(South Eastern Cape Local Division)

(Port Elizabeth High Court) Case No 1210/2008

Delivered:

In the matter between

FIZIK INVESTMENTS (PTY) LTD

t/a UMKHOMBE SECURITY SERVICES Applicant

and

NELSON MANDELA METROPOLITAN UNIVERSITY Respondent

SUMMARY: Application for review – interlocutory application for delivery of the record of the proceedings giving rise to the decision to be reviewed, and for the addition of a claim for costs – application opposed on the ground that the relief sought in the main application had been conceded, the review had been settled and the issues had become moot, and, that in those circumstances, the obligation to furnish the record had fallen away and an amendment to include a prayer for costs was not competent – held that the main application had not been shown to have been settled or the issues to have become moot – application granted.

JUDGMENT

JONES J:

[1] The applicant is a provider of security services. Until recently it had been contracted to provide security services for the respondent, having successfully tendered for the contract in 1999. Its contract has expired. The respondent is about to embark on a process of calling for tenders for the award of a new contract for the provision of security services. The applicant has been advised that as a result of the implementation of a process referred to in the papers as the respondent’s ‘expression of interest system’ the applicant was excluded from the group of interested persons whose tender for the new contract would be considered. It seeks to review the decision to exclude it from tendering, to set aside the tender adjudication process, and to require the respondent to comply, in its impending process of calling for tenders for the provision of security services, with the requirements of the Constitution of the Republic of South Africa, the Preferential Procurement Policy Framework Act 5 of 2000 read with the regulations, and with its own procurement and tender policy document.

[2] The precise wording of the relief in the applicant’s notice of motion in the main application is for an order:

2. reviewing and setting aside the respondent’s decision to prescribe, utilise and implement the Expression of Interest system (contained in MM 4 to the applicant’s founding papers), as amended on 22 February 2008 (as per MM9 to the founding papers), on the ground that the system is fundamentally flawed and legally invalid, alternatively unlawful;

3. reviewing and setting aside the tender adjudication process followed by the respondent and the decision not to approve the applicant’s submission, as conveyed on 23 April 2008, which has the effect of precluding the applicant from the further tender process for the provision of security services to the respondent;

4. declaring that the tender adjudication process followed by the respondent in respect of the provision of security services at the respondent did not comply with the requirements of the Constitution of the Republic of South Africa, the Preferential Procurement Policy Framework Act 5 of 2000 as read with the regulations promulgated thereunder, or, with the respondent’s own procurement policy document, in that the system followed was not fair, equitable, transparent; competitive and cost-effective, and was accordingly legally invalid, alternatively unlawful;

5. directing that any future tenders to be awarded by or on behalf of the respondent in respect of the provision of security services at premises of the respondent, shall be awarded only after proper compliance by the respondent with the Constitution of South Africa, the Preferential Procurement Policy Framework Act 5 of 2000, and with the regulations promulgated thereunder and with the respondent’s own procurement policy document (as amended from time to time), in accordance with a system which is fair; equitable; transparent and cost-effective.

[3] This relief does not include a prayer for costs. It turns out that this omission was a mistake by the attorney. The rest of the relief set out in paragraph 2 above is straight forward. In terms of section 8 of the Promotion of Administrative Justice Act 3 of 2000, which regulates these proceedings, the court now has the power the issue a declaration of rights and a mandatory interdict, both of which are sought in this case. The review summons was in the standard form prescribed by rule 53. It called upon the respondent to make available the record of the proceedings sought to be corrected or set aside within 15 days. The record was due by 8 July 2008. It has not been furnished.

[4] The applicant now brings an interlocutory application requiring the respondent to furnish the record, and for an order amending the notice of motion to include a prayer for costs. The application is opposed. The respondent is of the view that it has conceded the relief sought in the main application, that the issues in respect of that relief have become settled or are moot, and that in these circumstances the need to furnish the record has fallen away. Further, it contends that where there is in effect no longer a lis between the parties, it is not permissible to introduce a prayer for the ancillary relief of costs.

[5] The first issue in respect of both points raised in the interlocutory application is whether the respondent’s contention is correct that there is no longer a lis between the parties, or, put differently, whether the issues in the main application have become settled or are moot. The cornerstone of its argument is a letter written by the respondent’s attorneys to the applicant’s attorneys on 30 June 2008 (MM1) shortly after service of the main application. It states that although the respondent does not concede that its expression of interest procedure was inappropriate, it was not in its interests to become embroiled in a protracted legal dispute, and that it accordingly confirmed that it would not make ‘any award in respect of the provision of security services at its premises pursuant to the said Expression of Interest procedure’, and that it would ‘instead invite the submissions of tenders for the provision of security services in compliance with the provisions of its tender procedure’. It goes on to say: ‘In the circumstances, kindly confirm that the above application will not proceed’. Mr Buchanan argued for the respondent that this letter, read in the context of the rest of the correspondence that followed, effectively puts an end to the litigation.

[6] Mr Eksteen, for the applicant, did not agree. He submitted that the issues have not yet been finally formulated, let alone conceded. His argument is based on an analysis of the structure of rule 53, the rights conferred by the Constitution and the Preferential Procurement Policy Framework Act, the application of the respondent’s internal tender policy, the correspondence, and the history of what has happened up to now. I do not propose to set out the argument in detail.

[7] I think that for the following reasons Mr Eksteen’s contentions are correct. In formulating the reasons I am mindful that this is an interlocutory application and that some of the issues or arguments to which I refer may properly require determination when the main relief is determined in due course. I do not therefore propose giving full or detailed reasons.

[7.1] It is understandable that, because decisions affecting its rights and interests were taken in its absence, the applicant requires the documentary record of the process followed by the respondent during the past months to determine the extent of the invasion of its rights. In my view, it has a procedural right to the record in terms of rule 53(1)(b) and, importantly, rule 53(4) which states that an applicant may within 10 days after the registrar has made the record available to him, by delivery of a notice and accompanying affidavit, amend, add to or vary the terms of his notice of motion and supplement the supporting affidavit. This is underlined by Kriegler AJA’s explanation of the purpose of the rule in Jockey Club of South Africa v Forbes [1992] ZASCA 237; 1993 (1) SA 649 (A) 660 E-H. It is also precisely what the founding papers say the applicant wants to do. The deponent to the founding affidavit says, in terms,:

Once the respondent has furnished the applicant with the entire record of proceedings, which include all minutes of meetings, all resolutions taken by the executive management committee, the tender committee or any other committee relevant to the process, copies of the recording parameters employed, relevant portions of the tender register and any correspondence relating to the award of the tender, the applicant will, as it is entitled to in terms of rule 53 . . . amplify these papers.

It is only after the applicant has received the record that it can amplify the notice of motion and affidavits in the light of its contents, and only then is it required to formulate its allegations and its relief in final terms. Only thereafter is the respondent called upon to give notice of intention to defend in terms of rule 53(5). A respondent is not entitled to circumvent the applicant’s right to the record for these purposes merely by giving undertakings, and especially so where the undertakings are not given in terms acceptable to the applicant. Any talk of the relief being conceded, or the claims being settled, or the issues becoming moot, is premature. The point cannot arise until the applicant has sight of the record and is in a position to evaluate its position in the light of its contents.

[7.2] There has been no formal concession of relief or admission of facts in the pleadings or affidavits or by way of a notice, which might give rise to the unilateral disposal of an issue.

[7.3] There is also no evidence of any express agreement of settlement. At best for the respondent is Mr Buchanan’s argument that the correspondence gives rise to the inference of an implied settlement. In my view, however, it cannot be said that this is the most probable inference. Indeed, my opinion is that the correspondence contains at least some statements which point the other way with sufficient force to make such an inference doubtful rather than probable. The defence of settlement may, however, have to be revisited in the light of the respondent’s opposing affidavits and any annexures thereto.

[7.4] An issue is moot in the present context if it is of academic interest only and has no practical benefit or significance to the parties. In this case the applicant complains of having been unfairly treated and expresses a fear that this may be because of mala fides or bias by officials in the respondent’s employ. For that reason it seeks specific relief declaring certain past practices to have been unfair, and requiring that the tender process in the future should comply, inter alia, with specific legislation, namely the Constitution and the Preferential Procurement Policy Framework Act and regulations. The respondent did not admit unfairness and refused to give an undertaking which incorporates the specific legislation referred to. Its correspondence stated broadly that it will invite the future submission of tenders in compliance with the provisions of its current tender procedure, which it has the right to amend. When pressed with reference to the Constitution and the Preferential Procurement Policy Framework Act, it replied that the tender process will comply with all legal provisions applicable to it, and that no purpose would be served by further legal interrogation in that regard. It seems to me that the applicant is not obliged to accept this kind of general undertaking when it seeks the protection of more specific relief. It cannot therefore be said on these papers that the issues in the notice of motion are moot.

[8] I am satisfied that the matter is not, on these papers at any rate, shown to have been settled or to have become moot, and that the applicant is entitled to interlocutory relief for the production of the record. It follows that the objection to the amendment regarding costs falls away. I do not have to consider the question posed by Mr Buchanan, which is whether, once all issues have been settled and there is no longer a triable dispute between the parties, it is permissible for a party to amend to include a claim for costs, particularly in the light of the fact that the issue of costs is, in its nature, ancillary to some other dispute between the parties. With reference to the costs of this application, costs must follow the event. I am of the view that the costs should include the costs of two counsel. There is no sound basis for a punitive costs order.

[9] There will be the following order:

1. The respondent is ordered to furnish the Registrar of this Court with the record of the proceedings which are sought to be reviewed or set aside in the main application, together with such reasons as it is required or desires to give, within 5 court days of the date of this order, and to notify the applicant that it has done so.

2. There will be a further order amending the notice of motion by the addition of the two prayers 5 and 6 as set out in paragraph (b) of the notice of motion.

3. The respondent is ordered to pay the costs of this application, which shall include the costs of two counsel.

RJW JONES

Judge of the High Court

11 November 2008

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