---

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”) 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 1ST 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, 2nd Floor
	80 Strand Street
	CAPE TOWN
FOR 1ST 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, 6th Floor
	47 on Strand, 47 Strand Street
	CAPE TOWN
FOR 2ND & 3RD RESPONDENTS:	UNREPRESENTED
FOR 4TH 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 5TH 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
	15th Floor, The Terraces
	34 Bree Street
	CAPE TOWN
	[Tel. No. 021 410 2203]

---