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IN THE HIGH COURT OF SOUTH AFRICA

(NORTH WEST DIVISION, MAHIKENG)

CASE NO.: 1857/2013

In the matter between:

UMSO CONSTRUCTION (PTY) LIMITED.............................................................APPLICANT

and

THE RUSTENBURG LOCAL MUNICIPALITY...........................................1^ST RESPONDENT

M CIVILS (PTY) LTD......................................................................................2^ND RESPONDENT

DOWN TOUCH INVESTMENTS (PTY) LTD..............................................3^RD RESPONDENT

LONEROCK CONSTRUCTION (PTY) LTD...............................................4^TH RESPONDENT

ROUCOMM SYSTEMS CC...........................................................................5^TH RESPONDENT

GROUP 5/ENZA JV......................................................................................... 6^TH RESPONDENT

CIVCON/MOGAKI JV....................................................................................7^TH RESPONDENT

UDUMO TRADING 26 (PTY) LTD...............................................................8^TH RESPONDENT

JUDGMENT

GURA J:

[1] The relief sought by the applicant is an urgent interdict pending finalisation of an application for leave to appeal to the Full Bench of this Court or the Supreme Court of Appeal.  The respondents oppose the application.  They contend that the matter is not urgent and that the applicant has not satisfied the requirements for an interim interdict.  This matter specifically pertains to tender RLM/MM/0099/2012/2013 for the construction of the Rustenburg Rapid Transport East Corridor (“the RRT”) at the total cost in excess of R1 billion.  The tender was for performance of contracts A, B, C and D of the RRT.  Eight tenders were received by the first respondent, including the tenders by the applicant and the second respondent.

[2] On 30 April 2013 the entire tender (comprising contracts A, B, C and D) for the total sum of R1 041 552 631.73 was awarded to the second respondent

[3] The applicant telephoned the second respondent and at the applicant’s request they held a meeting on 8 May 2013.  The applicant said to the second respondent at the meeting that it had heard that the second respondent had been awarded all the contracts and it wanted to be a subcontractor on contract B.  The request was not taken any further.  On 13 May 2013 the applicant’s attorney (Markram) wrote a letter to the first respondent in which it stated that:

3.1 it was advised that contracts A to E had all been awarded to the second respondent;

3.2 the second respondent’s B-BBEE certificate was defective;

3.3 it (the applicant) should have been the preferred bidder;

3.4 it (the applicant) reserved its rights to bring an application for review; and

3.5 it (Markram) requested the first respondent to supply all relevant information at its disposal in connection with the second respondent’s application.

[4] On the same day, 13 May 2013, Markram wrote another letter in which it referred to its first letter of that day and said that its instructions were that its client was open to an “amicable settlement” of the matter and that if the first respondent was open to discussions pertaining to an amicable settlement it should contact their client’s representative.

[5] On 17 May 2013 the applicant sent a sms to the second respondent requesting it to meet with the applicant in an attempt to reach an amicable solution.  A meeting was held on 17 May 2013 where representatives of all the parties (the applicant, the first and second respondent) were present and at which an oral compromise was reached in terms of which:

5.1 the second respondent would be awarded contracts A, C and D and applicant contract B;

5.2 the applicant would withdraw its objection to the award to the second respondent;

5.3 the second respondent would decline the award of contract B;

5.4 the first respondent would issue a letter of appointment to the applicant for contract B and to the second respondent for contracts A, C and D.

[6] What was agreed was then duly implemented by the parties and on 20 May 2013 Markram wrote a letter to the first respondent in which it stated that:

“1. We refer to our letter of 13 May 2013.

2. We are instructed that the matter has become settled between the parties, in light of the settlement, the contents of our letter of 13 May are hereby withdrawn.

3. We trust you find the above to be in order.”

[7] In accordance with the compromise the second respondent on 20 May 2013 declined the award of contract B and the first respondent issued a letter of appointment on 21 May 2013 of contracts A, C and D to the second respondent and issued a letter of appointment to the applicant for contract B.  The applicant accepted the award of contract B.

[8] The terms and conditions of the compromise of 17 May 2013 were fully performed by the first and second respondents.  The applicant then breached the compromise and instituted review proceedings only after commencing work on contract B and only in November 2013.

[9] The application for review of this matter was dismissed by my brother Landman J.  A subsequent application for leave to appeal also failed.  The applicant then lodged the present urgent application seeking an interdict pending the finalisation of the application for leave to appeal the judgment of Landman J.

[10] There are two issues which call for decision:

10.1 urgency; and

10.2 whether or not the requisites of an interim relief have been proved by the applicant.

[11] Urgency involves mainly the abridgment of times prescribed by the rules, and secondarily, the departure from established filing and sitting times of court (Luma Meubel Vervaardigers (Edms) Bpk v Makin t/a Makin’s Furniture Manufacturers 1977 (4) SA 135 (W) at 136H.  In The Law & Practice of Interdicts (Prest) (Juta) at 229 the learned author remarked as follows with regard to “urgency”

“When the applicant seeks to dispense with the ordinary procedure provided by the rule of court 6 on the ground that the matter is one of urgency falling under sub-rule (12), he should refer explicitly to the circumstances on which he bases his allegation and the reasons why he claims he could not be afforded substantial relief at the hearing in due course.  A mere request for the matter to be treated as one of urgency is not in itself sufficient. . . . . .

. . . . .careful attention must be given to the requirements of rule 6(12)(b) ie an applicant must make out a case in the founding affidavit to justify the particular extent of departure from the normal procedures. There is little doubt that all too frequently urgent applications are set down on the simple basis that just any of urgency justifies them being set down at any time without any consideration to whether the matter is of an urgent nature that is envisaged by the provisions of rule 6(12).  This practice is to be deprecated.”

[12] The judgment in the review application was handed down on 15 April 2014.  On 21 May 2014 the application for leave to appeal was filed with the Registrar and judgment was handed down on 3 July 2014.

[13] On 4 July 2014 Markram wrote a letter to the second respondent’s attorneys asking them that their client should stop the execution of contract D whilst it (the applicant) was pursuing the petition to the SCA.  In this letter, the applicant warned the second respondent of an urgent court relief if it did not cooperate.  This plea by the applicant was unacceptable to the second respondent and this message was conveyed by the latter to applicant through a letter dated 7 July 2014.  The present application was launched on 5 August 2014.

[14] On page 20, paragraph 26, the applicant addressed the question of urgency as follows:

“. . . . . this matter is urgent and the Applicant will not get redress if the matter is to be heard in the ordinary course.  It would take at least a month or two for this application to be heard in the ordinary course, by which time the Respondents would have gone some way towards executing and implementing contract D.  This will be detrimental to all the parties and will be a waste of taxpayers’ money should the application for leave to appeal (and the appeal) ultimately be successful.  If it is not, then no irretrievable harm would have come to RRT project or to the Second Respondent’s business.  It is accordingly submitted that this matter is urgent and should be dealt with as such.”

[15] The counsels for the respondents submitted in unison that no urgency had been proved and if there was any, then it was self created.  The gist of their concern was that the applicant allowed them at least four days in which to file the opposing affidavits whereas it (the applicant) took ten days to file its replying affidavit.

[16] Despite these concerns by the defence team, I am convinced that the facts of this case point towards urgency.  From the time that its application for leave to appeal was dismissed, the applicant promptly took the necessary steps to bring this application.  It cannot be blamed for taking about one month from the time of receipt of the last letter from the second respondent until launched the application because the papers in this application are prolific.  It needed time to go through all these bulky papers.  The fact of the matter is that on the day when argument was heard relating to this application, the applicant produced, for the court’s information, a copy of the petition as proof that it had been dispatched to the Supreme Court of Appeal.

[17] I am satisfied therefore that the matter is urgent and the court rules accordingly.

[18] In order to succeed in an application for an interim interdict, the applicant must prove:

18.1 the existence of a prima facie right;

18.2 a well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief is eventually granted;

18.3 a balance of convenience in favour of the granting of the interim relief and

18.4 the absence of any other satisfactory (legal) remedy.

[19] The applicant’s alleged clear right was adjudicated upon by the Court in the review application. Landman J held that no such right exists because the applicant’s right was compromised and discharged. The court a quo had a second chance to reconsider its ruling in the application for leave to appeal. Even then, the court still was of the view that there were no reasonable prospects on the proposed appeal.

[20] In my view, the applicant’s hurdle is the compromise.  It (the applicant) is the author of its own misfortune. To try to deny the existence of such an arrangement by the applicant is a sign of dishonesty on a grand scale. I am of the view that on this ground alone, the present application falls to be dismissed.

[21] The second requirement is that of “a well-grounded apprehension of irreparable harm”.  In WJ Building and Civil Engineering Contractors CC v Umhlathuze Municipality and Another 2013 (5) SA 461 (KZD) at para 17 the court held that the applicant’s right which it had to be treated fairly in the adjudication of the tender bid, and which was frustrated indicated that this requirement had been established.  However, in the case before me the applicant exercised its rights fully and chose to settle for a compromise above a court application to declare the award to the second respondent invalid.

[22] The execution of contract D to finality is a matter which will take a long time.  The probability is that when the SCA finally speaks on the application, the work will still be proceeding.  In the past, courts have at times exercised a discretion in terms of section 8 of the Promotion of Administrative Justice Act, set the award aside or granted applicant appropriate relief (Millenium Waste Management (Pty) Ltd v Chairperson, Tender Board Limpopo Province and Others 2008 (2) SA 481 (SCA) para [23] and [24].

[23] The applicant has failed to point out a single perceived irreparate harm which it is likely to suffer.  See Steel and Engineering Industries Federation and Others v National Union of Metal Workers of South Africa, supra.

[24] The third requirement which the applicant must prove is the balance of convenience.  For the following reasons, the applicant feels that the balance of convenience favours it:

“The Applicant is simply seeking an interim interdict which would in its effect endure for a relatively short period of time in relation to the importance of the matter and the public funds involved.  By the time that this interim interdict is heard, the Applicant would have already filed its application for leave to appeal to the Supreme Court of Appeal.  The Respondents will no doubt answer the application to the Supreme Court of Appeal with due haste and the Applicant has ten days within which to file a replying affidavit to the Respondents’ answer.  The application for leave to appeal would probably be finalised well within a period of two to three months from now.  There has been no urgency on the side of the First Respondent to proceed with contract D and it is submitted that there will be no prejudice to the Respondent should the order be granted and should the implementation of the contract be delayed for a relatively short period of time.  I am advised that appeals dealing with tenders can be heard expeditiously in this Division.  I accordingly submit that the balance of convenience favours the Applicant”.

[25] The two respondents set out in detail facts upon which they feel that the balance of convenience militates against work stoppage:

25.1 The Rustenburg Rapid Transport (“RRT”) system of which contract D is part is an advanced project to solve Rustenburg’s transport needs for the future. The first respondent, the general public and the citizens of Rustenburg will be prejudiced if the project is not completed as planned or is delayed;

25.2 If the interdict is granted there will be an increase in the cost of material and labour for contract D only for R4 634 529.00 (for a four month’s delay) and R43 417 406 (for an 18 month’s delay).  If the cost increases by R43 417 406.00, that may jeopardise the feasibility of the entire RRT project;

25.3 Contract D is pivotal to the whole RRT project and to contracts A, B and C as it is at the end of the road and involves bus stops and turning circles.  Without contract D the whole RRT bus route is unusable and the entire costs of ±R1bn will be fruitless expenditure.  The funds for the project are made available by the National Treasury and it is inconceivable for such value to be made unusable;

25.4 The funds are made available on condition they are used within a specified time limit and if the project is delayed for at least 18 months there is a serious and significant risk that National Treasury will not extend the funding;

25.5 The second respondent has taken possession of the site and has already carried out certain work. If the work is stopped, open excavations will remain in place constituting a danger to pedestrians and to road traffic.  To leave concrete barriers in place, will cost R20 000.00 per month.

25.6 The balance of convenience also favours the second respondent.  This includes:-

25.6.1 the second respondent has already had a performance bond issued;

25.6.2 the second respondent has already taken out the required insurance policy;

25.6.3 an independent surveyor has already commenced work;

25.6.4 the second respondent’s monthly expenses are R6 252 269.  There will also be an additional amount of R974 000.00 per month;

25.6.5 the second respondent could be liable for penalties of R150 000.00 per month;

25.6.6 the second respondent’s employees will be adversely affected;

25.6.7 the subcontractors will be adversely affected; and

25.6.8 the second respondent’s empowerment partners (certain employees of the second respondent – at least 72) will be prejudiced.

[26] It is my view that the stakes are high against any suggestion of the suspension of work on contract D. The harm which is likely to be suffered by the general public by far outweighs an individual’s interest.

[27] It was due to the reasons aforesaid that the application was dismissed with costs on 8 August 2014.

SAMKELO GURA

JUDGE OF THE HIGH COURT

APPEARANCES:

DATE OF HEARING : 08 AUGUST 2014

DATE OF JUDGMENT : 08 AUGUST 2014

DATE OF REASONS FOR JUDGMENT : 28 NOVEMBER 2014

COUNSEL FOR APPLICANT : ADV STAIS SC WITH HIM ADV H C BOTHMA

COUNSEL FOR 1^ST RESPONDENT : ADV B W BURMAN SC

COUNSEL FOR 2^ND RESPONDENT : ADV P A SWANEPOEL

ATTORNEYS FOR APPLICANT : NIENABER & WISSING

ATTORNEYS FOR 1^ST RESPONDENT : KGOMO MOKHETLE & TLOU

ATTORNEYS FOR 2^ND RESPONDENT : MINCHIN & KELLY

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