Abagibeli Insurance Administrators (Pty) Ltd v SA Rail Commuter Corp LTD and Others (17184/06) [2007] ZAGPHC 59 (23 May 2007)

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

CASE NUMBER: 17184/06

DATE OF HEARING: 17/05/2007

DATE OF JUDGMENT: 23/05/2007

UNREPORTABLE

In the matter of:

ABAGIBELI INSURANCE ADMINISTRATORS (PTY) LTD ....... APPLICANT

-and-

THE SA RAIL COMMUTER CORP LTD ......................... 1st RESPONDENT

ALEXANDER FORBES RISK & INSURANCE

SERVICES (PTY) LTD ......................... 2nd RESPONDENT

FARANANI RISK SOLUTIONS (PTY) LTD .....................3rd RESPONDENT

GIB HOLDING (PTY) LTD ......................... 4th RESPONDENT

VIKELA MARSH (PTY) LTD ......................... 5th RESPONDENT

JUDGMENT

LOUIS VISSER AJ:

By notice of motion the Applicant prays for orders in the following terms: “1. That the 1st respondent’s decision taken during April 2006 whereby the contract in terms of tender RPF-275-38-04 was awarded to the 2nd and 3rd respondents as a joint venture, alternatively as contractor and subcontractor, be reviewed and corrected or set aside; 2. That any new contract concluded by the 1st respondent as a result of a court order of this honourable court on 23 May 2006 under case number 14711/2006 be declared null and void and of no force and effect. 3. That the contract in terms of the said tender be awarded to the applicant. 4. That the 1st respondent be ordered to pay the cost of the application and in the event of any of the other respondents opposing the relief sought hereunder, it to be ordered, jointly and severally with the 1st respondent, to pay such costs. 5. That the applicant be granted further and/or alternative relief.” The Notice of Motion and founding affidavit, attested to by Ms Lange of the applicant, and annexures thereto were filed by the applicant on 30 May 2006. A supplementary affidavit by Ms Lange to the founding affidavit was filed on 8 November 2006. An Answering affidavit by the first respondent, attested to by a Mr Mchuba, was filed on 19 January 2007. No answering affidavit was filed by the other respondents. A replying affidavit by the applicant was filed on 13 March 2007, again attested to by Ms Lange. This review application is brought in terms of Rule 53 of the Uniform Rules of Court, in terms of which the first respondent was required to provide a record of the proceedings. Such record of the proceedings was filed on 25/6/2006. A supplementary record was filed on 25/10/2006. What appears to be common cause, or not disputed, are, inter alia, the following facts and circumstances: - In the past, prior to the invitation to tender, the applicant had made use of the services of Dalys and Associates (Pty) Ltd) (“Dalys”) as insurance brokers. - Dalys was first appointed in 1991 as insurance brokers for the first respondent for five years. The appointment was extended for a further five years on two occasions, terminating on the 31 May 2005, when the first respondent publicly invited tenders for the appointment of insurance brokers for the period after 31 May 2005. - Pending the completion of the tender procedure, Dalys’ brokering mandate was extended to 31 August 2005. The tender procedure not having been completed by that time, the mandate was further extended to 31 May 2006 on a month-to-month basis. - The applicant does business as an insurance brokerage firm. Dalys owns 49% shareholding in the applicant. - Prior to 2003, Dalys performed the insurance brokerage function for the first respondent. - Between 2003 and 2005, the first respondent’s brokering services had been performed by the applicant as understudy of Dalys with the first respondent’s knowledge and consent. This consent was apparently given because the appearance on the scene of the applicant did not entail any major change in the identity of the personalities involved. The first respondent continued to liaise with the applicant, primarily, as before, through certain Mr E. Greene. It does not appear from the papers that a formal contract was entered into between the first respondent and the applicant. - In the foresaid capacity the applicant assumed responsibility for the placement, management and administration of the first respondent’s insurance programme. The tender process commenced on 27th February 2005, when the first respondent published a “Request for Proposals”. This was accompanied by certain “Conditions of Tender”. THE “REQUEST FOR PROPOSALS”: In the Request for Proposals, the first respondent invited tenderers to submit “a business profile, which would enable the SARCC (the applicant) to evaluate the ability to provide a professional insurance brokering for a period of three years” and to express their “willingness to participate in this project by the submission of a priced proposal in support of your appointment”. It was a stated condition for tenderers to have a black equity ownership of at least 25%. Tenderers were advised that tenders would be evaluated for “financial viability, black equity ownership, security screening and technical capacity and ability”. It was specifically stated that the first respondent would not be obliged to accept the lowest, or any tender. It was further stated that a compulsory tender briefing would be held on 4 March 2005, at a specified address, and that tender documents would be ready for collection by 1 March 2005. The closing date for the tenders was stated to be Friday, 29 March 2005 at 10:00. THE “CONDITIONS OF TENDER”: As stated, the Request for Proposals was accompanied by “Conditions of Tender”. Some of the provisions of the Conditions of Tender which have a bearing on the present application were the following: - It was provided that the representative of the first respondent and each tenderer who submitted a tender, “shall act as stated in his Conditions of Tender and in a manner which is fair, equitable, transparent, competitive and cost-effective”. - The document stated that the tenderers would be obliged to include the rates, prices and the total of the prices, all duties, taxes (except VAT) and other levies payable by the successful tenderer. - The tenderers were obliged to provide rates and prices which were fixed for the duration of the contract and not subject to adjustment, except as provided for in the conditions of contract, to be concluded with the successful tenderer. - In respect of prices it was stated that no change in the total of the prices would be permitted except as required by the first respondent’s representative to confirm the correction of arithmetical errors discovered and that the total of the prices, as stated by the tenderer, as corrected by the first respondent’s representative, shall be binding upon the tenderer. - The document further stipulated that the first respondent undertook to disclose the evaluated tender price only to the relevant SARCC tender committee and undertook that it would not disclose information relating to the evaluation and comparison of tenders and recommendations for the award of a contract to tenderers or to any other person not officially concerned with the tender process. - Under the heading “Tender Objectives” it was stated that it was required of tenderers to provide management fee structures for the provision of the following services to be rendered in connection with the insurance brokerage of the first respondent: - General administration and annual placement; - Claims Management; - Risk analysis and management. - In respect of the first respondent’s insuring policy it was stated that it was the policy to “make this to use of the market capacity, expertise and underwriting experience of the Lloyd’s market, supported by South African insurers if local market underwriting capacity is available or placement therein is appropriate”. - Tenderers were invited to make proposals in respect of an insurance programme for the first respondent and to provide a full description of a proposed strategy and plan of action, should the tenderer be appointed. The “Conditions of Tender” included a “Notice to Tenderers”, to which various forms were attached, to be completed by the tenderer. Five proposals were received before the stipulated deadline of 29 March 2005. Of these, one did not qualify, leaving four remaining proposers. These four proposers were invited to submit tenders in terms of another “Notice to Tenderers”. It is my understanding that the tenders were to be made in terms of and subject to, the provisions contained in the “Request for Proposal”, and documents attached thereto. The second and third respondents submitted a joint tender, describing themselves as a joint venture. It is also stated that their relationship was really one of contractor and subcontractor. Nothing turns on this point. Hence, when referring in this judgment to the tenders of the second and third respondent, I shall simply refer to the tender of the second respondent, this to be understood as including reference to the third respondent. I shall later deal with the history of events which took place after 29 March 2005. THE URGENT APPLICATION: Having been considered by the relevant committees, and after recommendations had been made, the Board of Control of the first respondent approved the tender of the second respondent on 24 April 2006. After being advised of this decision of the first respondent, the applicant moved an urgent application in this Court to interdict and restrain the first respondent from putting into effect any contract with the second respondent in consequence of the acceptance of the tender of the second respondent. Bertelsmann J made the following orders on 23 May 2006: “1. That the first, second and third respondents are hereby interdicted and restrained from implementing the contract in terms whereof second and third respondents were appointed as insurance broking firm for the first Respondent in terms of Tender RPF-275-38-04. 2. That the applicant is to launch the review application with in 5 (five) days from the date of this order. 3. That the applicant (is) to pay (the) taxed costs of the first respondent for Friday 19 May 2006. 4. That the applicant (is) to pay the second and third respondent’s (costs) including the costs of Friday (19 May 2006) such costs to include the costs of 2 counsel.” Mr Mchuba submitted in his affidavit on behalf of the first respondent that the effect of the order of Bertelsmann J., properly interpreted, is that, pending the adjudication of the review application, the first , second and third respondents were interdicted and restrained from implementing the contract granted to the second respondent in terms of the said tender. I agree with this interpretation. GROUNDS FOR REVIEW: The present application for review was thereupon issued by the applicant. The alleged grounds for review, as stated in the founding affidavit of Ms Lange, include that the first respondent: - acted procedurally unfairly; - acted on relevant considerations; - failed to consider relevant considerations; - acted in bad faith or arbitrarily or capriciously; - did not apply its mind to the subject matter of the decision; - took a decision which was not rationally connected to the information that formed the basis of the decision; - failed to act according to the requirements of section 217 of the Constitution. “JURISDICTIONAL FACTS”: It is trite that an official who acts in an administrative capacity, can only exercise such powers, duties and functions as he or she is authorised to perform - the so-called “jurisdictional facts”. The Constitution of the Republic of South Africa, Act 108 of 1996 (“the Constitution”) provides in section 217 for “Procurement”. That section reads: “(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. (2) Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for_ (a) categories of preference in the allocation of contracts; and (b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. (3) National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.” The Preferential Procurement Policy Framework Act, 5 of 2000, assented to on 2 February 2000, which commenced on 3 February 2000, presents national legislation which prescribes a framework within which a policy of procurement must be implemented. In its introduction it is stated that the Act is to give effect to section 217 (3) of the Constitution by providing a framework for the implementation of the procurement policy, contemplated in section 217 (2) of the Constitution and to provide for matters connected therewith. Under “Definitions” in section 1, it is provided, inter alia, that “'acceptable tender' means any tender which, in all respects, complies with the specifications and conditions of tender as set out in the tender document; 'organ of state' means_ (a) a national or provincial department as defined in the Public Finance Management Act, 1999 (Act 1 of 1999); ....................... (f) any other institution or category of institutions included in the definition of 'organ of state' in section 239 of the Constitution and recognised by the Minister by notice in the Government Gazette as an institution or category of institutions to which this Act applies; 'preferential procurement policy' means a procurement policy contemplated in section 217 (2) of the Constitution .................” The Public Finance Management Act, 1999, provides in its definitions: “'national department' means_ (a) a department listed in Schedule 1 of the Public Service Act, 1994 (Proclamation 103 of 1994), but excluding a provincial administration; or (b) an organisational component listed in Schedule 3 of that Act.” and “'national government business enterprise' means an entity which_ (a) is a juristic person under the ownership control of the national executive; (b) has been assigned financial and operational authority to carry on a business activity; (c) as its principal business, provides goods or services in accordance with ordinary business principles; and (d) is financed fully or substantially from sources other than_ (i) the National Revenue Fund; or (ii) by way of a tax, levy or other statutory money.” Section 3 of the Public Finance Management Act, 1999, provides: “Institutions to which this Act applies (1) This Act, to the extent indicated in the Act, applies to_ (a) departments; (b) public entities listed in Schedule 2 or 3; (c) constitutional institutions; and (d) Parliament and the provincial legislatures, subject to subsection (2).” Schedule 2 of the Act lists “Transnet Limited”, which was the predecessor of the first respondent. Counsel for both sides were not certain as to whether the references above rendered the first respondent an “organ of state” as contemplated in section 217 of the Constitution, but they agreed, and I assume for purposes of this case, without deciding, that it does. Returning to the Preferential Procurement Policy Framework Act, it is observed that section 2 deals with “Framework for implementation of preferential procurement policy”. That section provides: “(1) An organ of state must determine its preferential procurement policy and implement it within the following framework: (a) A preference point system must be followed; (b) (i) for contracts with a Rand value above a prescribed amount a maximum of 10 points may be allocated for specific goals as contemplated in paragraph (d) provided that the lowest acceptable tender scores 90 points for price; (ii) for contracts with a Rand value equal to or below a prescribed amount a maximum of 20 points may be allocated for specific goals as contemplated in paragraph (d) provided that the lowest acceptable tender scores 80 points for price; (c) any other acceptable tenders which are higher in price must score fewer points, on a pro rata basis, calculated on their tender prices in relation to the lowest acceptable tender, in accordance with a prescribed formula; (d) the specific goals may include_ (i) contracting with persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender or disability; (ii) implementing the programmes of the Reconstruction and Development Programme as published in Government Gazette 16085 dated 23 November 1994; (e) any specific goal for which a point may be awarded, must be clearly specified in the invitation to submit a tender; (f) the contract must be awarded to the tenderer who scores the highest points, unless objective criteria in addition to those contemplated in paragraphs (d) and (e) justify the award to another tenderer; and (g) any contract awarded on account of false information furnished by the tenderer in order to secure preference in terms of this Act, may be cancelled at the sole discretion of the organ of state without prejudice to any other remedies the organ of state may have. (2) Any goals contemplated in subsection l (e) must be measurable, quantifiable and monitored for compliance.” Preferential Procurement Regulations have been published under section 5 of the Preferential Procurement Policy Framework Act, under Government Notice R725 in Government Gazette 22549 of 10 August 2001. The regulations deal, inter alia, with a preference system, the evaluation of tenders, the awarding of tenders, and other matters. Regulation 2 provides: “(1) Despite anything to the contrary contained in any law, these Regulations apply to organs of state as contemplated in section 1 (iii) of the Act.” The first respondent implements a tender and procurement policy as envisaged by the section 217 of the Constitution, read with the other provisions to which I have referred. Under the heading “Objective” the policy states that the SARCC aims at the implementation of systems and procedures which are open, competitive, transparent and fair, while creating accelerated opportunities for target groups. It further provides that the aim is to empower and develop historically disadvantaged individuals and entities and to promote the utilisation of national, regional and local suppliers before considering overseas suppliers. Amongst a host of other subjects, the first respondent’s Procurement Policy deals with the functions, duties and powers of various committees and subcommittees of the first respondent. Mr Mchuba related these functions, duties and powers in his affidavit, which can be summarised as follows: The first respondent’s Tender and Procurement Committee, (presently known as the Finance, Capital Investment and Procurement Committee, but to which I shall refer as the “Tender and Procurement Committee”) is authorised to approve tenders of between R10 million and R50 million. It may consider tenders of more than R50 million and make recommendations to the Board of Control for adjudication. The functions, duties and powers of the Tender and Procurement Sub-Committee are that it may adjudicate and approve tenders of up to R10 million. It may consider and recommend for adjudication to the Tender and Procurement Committee in respect of those tenders exceeding R10 million per tender transaction. Cross Functional Sourcing Teams are used for sourcing of goods, works and services for amounts of more than R150,000 in respect of operational expenses. These teams do not adjudicate or award tenders, but investigate tenders and give advice and recommendations to the relevant Tender Committee or Subcommittee. Lastly, the Procurement Policy of the first respondent makes provision for criteria for evaluating tenders. What is clear from the above, is that there is a ranking order. The lower ranking committees or subcommittees act in an investigative capacity and make recommendations to committees higher up and to the Board of Control. For easy reference, the ranking order is tabulated below: - the Board of Control; - the Tender and Procurement Committee; - the Tender and Procurement Sub-Committee; - the Cross Functional Sourcing Teams. The applicant has not alleged, nor is there any indication of the papers, that the first respondent acted ultra vires its jurisdictional facts or prescribed procedure. EVENTS AFTER 29 MARCH 2005: The Cross Functional Sourcing Team recommended to the Tender and Procurement Sub-Committee, on 1 October 2005: - That progressive self-insurance should be the model of choice for the (future) insurance business of the first respondent; - That a closed tender be issued for the four short listed proposers; - That a detailed specification be drawn around the chosen model with all necessary information to be made available to the tenderers; - That a contract for a period of two years be entered into with the successful tenderer with an option to extend the contract for one year; - That the short listed proposers be allowed to quote; - That the brokering contract with the successful tenderer be entered into on a month to month basis pending the finalisation of a contract. The Tender and Procurement Sub_Committee accepted this proposal on the 14th November 2005, with minor amendments. The recommendation of the Cross Functional Sourcing Team included a recommendation that a detailed specification and further quotes would be required from the four tenderers in respect of insurance premiums which they could obtain. This aspect had not been raised in the tender specifications and none of the tenderers had provided such a quote as part of their tender. In order to place the tenderers in the position to provide such quotes, it was accepted that they would have to be provided with full information of the risks which had to be insured as well as the first respondent’s claims history. As a consequence, a letter dated 8 March 2006 was addressed to each of the four tenderers, which dealt with two issues, namely the decision in respect of progressive self-insurance, and the requirement as to quotes. According to a further report by the Cross Functional Sourcing Team to the Tender and Procurement Sub_Committee the second respondent objected to the request in the letter on two grounds: Firstly because the time allowed for the said quotation was too short; and Secondly, that it was undesirable that four proposers would approach insurers for quotes for the same client. The second respondent also pointed out that it did not possess the necessary information, referred to above, in order to obtain quotes. The Tender and Procurement Sub_Committee considered the report of the Cross Functional Sourcing Team on 31 March 2006. The minute of that meeting reflects the following: - It was stated that it was not a good idea for the four tenderers to approach Lloyds of London for quotations. Different quotations may be provided to different tenderers, compared to the applicant, being the current service provider. - An apprehension was expressed that the first respondent’s reputation might be impacted upon negatively. Other concerns in this regard were also noted. - It was noted that a mere claims history was not good enough to have as information when approaching an underwriter. Strategic intent, company financial statements/books, and risk management would be needed. - There was a danger of different tenderers providing different answers to the same questions, asked by the underwriter. - It was noted that the tenderers have stated categorically that the claims history provided to then was not comprehensive enough. For each claim category, they needed all incidents in relation to that category. - Of the tenderers wanted to know the rationale behind being compelled to talk to Lloyds of London, given the fact that certain categories could be underwritten locally. - It was noted that the applicant’s representative was uncomfortable about the meeting, but that the chairperson stated categorically that the first respondent would provide information as it appears that the lack thereof would disadvantage tenderers. - The second respondent was noted to have requested to be provided with the number of incidents per each asset claim to enable it to quote for a brokering service fee. It was undertaken that this information would be provided. The Tender and Procurement Sub_Committee on the 13th April 2006 prepared a report for submission to the Board of Control. In this report an incorrect impression created in the Cross Functional Sourcing Team’s report of 22 March 2006, that the second respondent had not provided a quote in respect of its remuneration, was corrected. The report also dealt with security matters concerning the second respondent, and recommended that the second respondent be appointed for one year. The Board of Control considered the recommendation of the Tender and Procurement Sub_Committee on 13 April 2006, and resolved that the matter should be referred to the Tender and Procurement Committee meeting to be held on 18 April 2006 (which meeting in fact took place on 19 April 2006). On 17 April 2006 the Tender and Procurement Sub_Committee submitted a further report to the Tender and Procurement Committee, in which it was recommended that both the applicant and the second respondent be considered for the tender, and that they be given a detailed claims history in order for them to obtain a quote on premiums. The report was considered by the Tender and Procurement Committee on 19 April 2006. As it considered the recommendation not to be clear it requested a clear recommendation to be made to it for its meeting which was scheduled for 20 April 2006. The Tender and Procurement Sub_Committee reconsidered the matter and prepared a further report which was tabled at the meeting of the Tender and Procurement Committee on 20 April 2006. It was resolved to recommend that the second respondent’s tender be accepted. According to the affidavit of Mr Mchuba, the Tender and Procurement Committee took into account as far as the applicant and the second respondent were concerned, the following: - Their security standing; - Their status on black economic empowerment; - their adherence to the first respondent’s preferred model of progressive self-insurance; - Their financial viability and - The tender price. Mr Mchuba stated that the tender price of the second respondent was preferred above that of the applicant. This is by reason of the fact that the second respondent’s tender offered that it would charge: - an annual fee of R 4.5 million in respect of general administration, - for annual placement and service – R 1.35 million per annum; - for claims management – R 2.6 million per annum; and - a once off risk analysis and management fee in the amount of R550,000.00. The second respondent further undertook in his tender to remit to the first respondent 100% of all commission earned by it. The applicant’s tender entailed that it would charge no fees, but would remit to the first respondent only 50% of the commission which accrued to it. Also, the commission would be shared with a third party. In addition the applicant’s tender did not include the rendering of a claim management service. This structure of fees rendered the applicant’s tender R11,011,015.00 higher than that of the second respondent. In his affidavit, Mr Mchuba analysed the practical implications of the differences between the two tenders, which, because of its importance, is quoted in full. He states at p.493 of the application: “4.25.5.1 In respect of liability insurance, commission of 20% would be earned (i.e. an amount of R3,852,800.00). The applicant, in terms of its tender, would share this commission with SBJ Ltd. and would rebate 50% of the amount earned by it to the applicant (meaning the first respondent) i.e. an amount of R963,200.00. The second respondent would rebate the entire amount of R3,852,800. 4.25.5.2 In respect of personal accident insurance, 20% commission would be earned, which the applicant would share with SBJ Ltd. The applicant would accordingly rebate an amount of R7,263.60 to the first respondent whereas the second respondent would rebate R29,054.40. 4.25.5.3 In respect of motor comprehensive assurance, 12.5% commission would be earned, which the applicant would share with SBJ Ltd. It would accordingly rebate and amount of R94,893.72, whereas the second respondent would rebate R379,574.88. 4.25.5.4 In respect of SASRIA, commission of 7.5% would be earned. The applicant would rebate R25,850.40, whereas the second respondent would rebate R51,700.80. 4.25.5.5 In respect of contractor’s all risk insurance, commission of 20% would be earned. The applicant would rebate R150,750.00, whereas the second respondent would rebate R301,500.00. 4.25.5.6 In respect of assets insurance, 20% commission would be earned, which the applicant would share with SBJ Ltd. It would accordingly rebate an amount of R2,098,846.50, whereas the second respondent would rebate R8,395,386.40. 4.25.6 The applicant, in terms of its tender, would accordingly rebate and estimated amount of R3,340,803.50 to the first despondent whereas the second despondent in terms of its tender would rebate and amount of R13,010,015.68. Taking into account the fee of R 4.5 million to be charged by the second respondent, its tender would entail an net rebate to the first respondent of R8,510,015.68. 4.25.7 The above calculation does not take into account an amount of R 2.6 million of the second respondent’s fee related to claims management. If it is taken into account, the net rebate to the first respondent would be R11,110,015.00.” The stated information was confirmed by Mr Hancock in his affidavit in the urgent application as well. Mr Mchuba stated that in order to avoid a situation where the first respondent had no insurance cover after 31 May 2006, it concluded an agreement with the second respondent in terms of which the second respondent was appointed as broker of the first respondent until 30 November 2006, whereafter that contract has been extended on a month to month basis. THE APPLICANT’S CASE: Ms Lange referred to the letter of 8 March 2006, and stated that the tenderers were obliged to supply the information which was required in the letter, to the first respondent by no later than 12:00 on 13 March 2006. She alleges that the request was in respect of risk management, placing of policies and administration and servicing, but not in respect of claims management, which involves the investigation, management and settling of claims. She says that the function of claims management had been outsourced in the past by the first respondent to a third-party, and that there had been a tender request put out by the first respondent for claims management. Ms Lange indicated that the applicant complied with the request by submitting a further document. She indicated that the fourth and fifth respondents also complied but that the second and third respondents failed to comply with the request. Ms Lange referred to a letter by the second respondent to the first respondent dated 10 March 2006, in which the second respondent stated that its tender in July 2005 was on “a conceptual basis only”. She says that the award of the tender on something which was not part of the tender and which was conditional, stands to be reviewed. She also referred to a letter written by the second respondent to the first respondent, dated 13 March 2006, and she alleged that in that letter the second respondent withdrew from the tender process. Mr Louw submitted that this letter clearly indicated that the second respondent’s tender was not complete, but provisional. Ms Lange referred to the debriefing meeting, held on the 31st March 2006, to which reference has been made above. She stated that Mr Greene on behalf of the applicant, objected to an alleged preferential treatment of the second respondent. This objection was also embodied in a letter, written by Mr Greene to Mr Mchuba. By way of summary, Mr Greene’s complainants, as far as they relate to the present application, were the following: - having to discuss and debate issues with opponents during the course of the tender process; - the time spent at the meeting on the requests of the representative of the second respondent to be provided with an adequate portfolio claims experience, needed to facilitate the establishment of the second respondent’s proposed remuneration; - it was felt that because of the fact that the other respondents, apart from second and third respondents, had provided the information requested in the letter of 8 March 2006, and the second and third respondents had not, they should be excluded from the tender; - the apparent insistence of the representative of the second respondent, that the local South African market should be canvassed for quotations in spite of the “published choice and resolve of the Corporation to renew its portfolio in the Lloyd’s market with which the SARCC has had an enviable track record these past 15 years which should be respected without challenge”. In this letter, Mr Greene confirmed that it would have a negative effect to send four firms of brokers into the same market to obtain quotations. Ms Lange stated that by letter, dated 25 April 2006, the first respondent informed the applicant that its tender was not successful. She then refers to a meeting which was held on 3 May 2006 at which Mr Mchuba chaired the meeting. The minutes of the meeting included, inter alia, two alleged reasons why the second respondent was to be preferred above the applicant, namely - that the applicant/Dalys had been rendering the service to the first respondent for the previous 14 years and - that second respondent should be afforded an opportunity to ensure participation of other BEE companies in the business. On behalf of the applicant the contention that the second respondent had not submitted a pricing proposal as was requested in the letter of 8 March 2006, was raised. By letter dated 4 May 2006, the applicant’s attorney of record requested reasons for the decision not to award the contract to the applicant. In this letter it is stated, inter alia, that the applicant was not provided with “satisfactory explanations to the questions”. By letter dated 16 May 2006, the attorneys of record of the first respondent gave reasons for the first respondent having awarded the tender to the second respondent. Three reasons were given, of which I refer only to the third, which clearly stated that the tender of the second respondent was more competitive in that it included the rendering of claims management services. Further that the second respondent also tendered a remittance of 100% to the first respondent of commissions for the placement of policies. DISCUSSION OF THE APPLICANT’S CASE: Mr Louw submitted that it was really the Tender and Procurement Committee which took the decision on behalf of the first respondent to accept the tender of the second respondent. This decision, according to Mr Louw, was ratified by the Board of Control for reasons not disclosed to this Court. I have difficulty following this argument. The fact is that the Tender and Procurement

Committee did take a decision on the matter - one of recommending to the Board of Control to accept the tender of the second

respondent. It stated that Mr Mchuba is not a member of any of the bodies on behalf of which he made his affidavits. There is accordingly no first-hand evidence as to what motivated the Board of Control to “ratify the decision taken by the Tender and Procurement Committee”. Mr Louw further submitted that in the absence of an affidavit on behalf of the second respondent or on behalf of the Tender and Procurement Committee or the Board of Control, there is no first-hand evidence as to the true reasons for awarding of the tender to the second respondent before Court. Mr Louw, in making this submission, apparently ignores the affidavit of Mr Hancock, filed on behalf of the second respondent in the urgent application, which was incorporated by specific reference into the papers in this review application. In respect of the letter of 8 March 2006, the applicant’s case is that the second respondent failed to comply with the requirements of the letter. In respect of the applicant’s viewpoint that the second respondent had to be excluded from the tender process because it had failed to comply with the demand in the said later to provide a service preparation, Mr Mchuba stated that the first respondent, because of the problems which had arisen, waived that request. Whether “waiver” is the correct word to use, is open to debate. But the intention of what is said is clear, namely that the first respondent withdrew, or did not insist on, the requirement. This seems to me to be the complete answer to the criticism of Ms Lange of the second respondent not complying with the requirements of the letter. Mr Mchuba stated that none of the other tenderers had submitted a quotation in respect of premiums by 13 March 2006 or thereafter. He said that the applicant and the fourth and fifth respondents indeed submitted written confirmation that their brokering service fees remained unchanged. This, no doubt, is what Ms Lange was referring to in her affidavit. Ms Lange stated that the alleged waiver is unconvincing as that waiver is not reflected in the minutes of the meeting of the 31st March 2006, nor was it communicated to the applicant. It appears to me that this does not necessarily follow. The mere fact that the waiver was not communicated to the applicant, or minuted at a meeting, does that mean that it did not occur. If there was a waiver, there would be no motivation for the second respondent to have withdrawn from the tender process. There is objective corroboration on the papers for the allegation of Mr Mchuba that the requirements of the first respondent in the letter of 8 March 2006 were waved. In the recommendation of the Tender and Procurement Committee, dated 20 April 2006, reference is made to that letter in paragraph 2.4, and it is stated: “ On 8 March 2006, the SARCC informed service providers of a preferred insurance model and released claims history to the four short listed service providers to quote the underwriting premium for submission to the SARCC by 13 March 2006. This was done (to) ensure that all bidders are competing on the same level. However, all service providers could not provide a quote due to the fact that the claims history is not comprehensive enough. Furthermore, SARCC will have to provide service providers with strategic intent and accompany the service providers when engaging the underwriter. As a result thereof, this was not pursued with any further.” [The emphasis is mine]. But Ms Lange avers that even if it had been waived, the second respondent’s tender was not a proper tender in respect of the first respondent’s requirements. This appears to refer to her other allegations that the second respondent’s tender was both inadmissible and an incomplete tender for the following reasons: - the second respondent’s original tender was not based on a model of progress of self-insurance; - the tender was awarded on the basis of progressive self-insurance; - the acceptance by the first respondent of the second respondent’s tender was invalid and in contravention of its own policy and tender conditions. As to the insurance model, it is clear that no model was prescribed in the original tender documents. It was left to the tenderers to suggest a model. It was only after the tenders had been received, that a decision was taken by the first respondent that progressive self-insurance should be the model to be applied. I fail to see how this has any effect on the tender of the second respondent. I find that this criticism is without foundation. Mr Mchuba denies that the second respondent’s tender was incomplete and non-responsive in respect of the first respondent requirements. He reiterates that it was never a tender requirement that the tenderers must apply a progressive self-insurance model. The tender document supports this observation of Mr Mchuba. In the letter of the second respondent of 10 March 2006 to the first respondent, to which I have referred, the second respondent referred to the first respondent’s requirement of a premium quotation from Lloyds within three working days, stating that this was not possible. In the letter it was pointed out that the applicant had an unfair advantage in so far as he already had the existing structure and detailed claims experience as well as premium costs at his disposal. The letter further stated “our tender submission in July 2005 was on a conceptual basis only without approaching the insurance market......”. The letter

further stated that a meeting with the first respondent was requested for the same date, but that the second respondent was

informed that the first respondent was unavailable for such a meeting. The letter referred to information having been received from the first respondent the previous day, but pointed out that the information related to liability claims only and did not provide the information in respect of asset claims. It was stated that these were needed to provide a meaningful indication of the cost/remuneration of the second respondent. The letter contains the following sentence: “Also since the tender you have indicated that the basis of the programme has changed which will also have a meaningful effect on our remuneration model”. Other problems were pointed out on behalf of the second respondent. The second respondent adopted the view that the request in the letter was irregular and not permissible in view of the clear provisions of the tender. Basically the same problems were highlighted in the letter of the second respondent dated 13 March 2006. While it is argued on behalf of the applicant that these two letters constituted the withdrawal by the second respondent from the tender process, or indicated that his tender was not firm, that does not clearly appear to be the case. The second respondent had given a firm tender of R 4.5 million. Nowhere in the papers has the applicant attempted to deny this fact, or that the second respondent’s tender remained firm and open up to the point of the tender being considered by the Board of Control. Mr Louw conceded that he could not argue that the price of R 4.5 million did not remain firm throughout. In any event, it would have been silly for the first respondent to award a tender contract to a tenderer who had not tendered. The letters, referred to, appear to me to indicate that the “provisional” or “conceptual” nature of the tender meant that it was given on the assumption of the tender conditions remaining unchanged. What it intended to convey was that if the goal posts were moved, the tender might (or will) be affected. In respect of the allegation that the second respondent submitted a tender which was a “provisional one”, Mr Mchuba referred to the fixed amounts contained in its tender of R 4.5 million per annum. He says that it would not be open to the second respondent to increase that tended price, unless the first respondent decided not to avail itself of certain of the services offered, or if the second respondent were to be requested to render additional services, not required in the tender. In addition, Mr Hancock, in his affidavit in the urgent application, pointed out that the second and third respondents’ original tender did contain a pricing structure and that it would be incorrect to suggest otherwise. He stated that in the circumstances it was incorrect to suggest that the second respondent had not complied with the legitimate requests of the first respondent. He concluded: “If the first respondent attempted to disqualify or exclude the second/third respondent from the tender process on the basis of its non compliance with this request, the second/third respondent would immediately have approached the Court to review and set aside such a decision, which application would, we have been advised, probably have been successful.” In my view the qualification “provisional” or “conceptual” may well refer to other issues than that understood by Ms Lange. The obvious other possibility is that it referred to the fact that the tender was provisional upon the tender conditions not being changed. It appears to me that this statement goes no further than to say that if you alter your conditions of tender, it might conceivably affect our tender prices. This is confirmed, if regard is had to the affidavit of Mr Hancock, which was filed in the urgent application, where he stated: “The second respondent’s tender document contained a fixed quote, which may have been adjusted, were the first respondent’s requirements to change.” Ms Lange referred to the fact that the second respondent took the view that the request in the letter of 8 March 2006, was irregular. She referred to the fact that the second respondent’s representative complained about the time frame within which to provide the information requested and the fact that further information was needed in order to do so. All this is true. I fail to see how this has any relevance to the application. The only relevance it could have would be if it presented corroboration for the contention of the applicant that the second respondent withdrew from the tender process, which I have already found, the second respondent did not do. With reference to the request for quotes from underwriters in the letter of 8 March 2006, Mr Mchuba agrees with the second respondent that this constituted a new provision to the tender document. It was for that reason, as well as by reason of the complaints which had been made, that the request was waived. He points out that, seeing as the tender was awarded without any of the tenderers having submitted quotes as to the premiums which could be obtained, it should be blatantly clear to the applicant that the requirement had been waived. As indicated, Mr Louw submitted that in the absence of an affidavit on behalf of the second respondent or on behalf of the Tender and Procurement Committee or the Board of Control, there is no first-hand evidence as to the true reasons for awarding of the tender to the second respondent before Court. In this respect it is important that the decision to award the tender to the second respondent was taken on 20 April 2006, that the applicant was notified of the decision on 25 April 2006, that by letter dated 4 May 2006, the applicant’s attorney of record requested reasons for the decision, and that by letter dated 16 May 2006, the attorneys of record of the first respondent gave reasons for the first respondent having awarded the tender to the second respondent. It is therefore clear on the papers, that this was the first formal request for reasons, directed to the first respondent and on that occasion the reason of the economic considerations in favour of the tender of the second respondent was given. What had gone before, does not detract from this. The fact that Mr Mchuba previously referred to the period of time in which the applicant had rendered the service and/or any other consideration mentioned by him, is, to my mind, irrelevant. The committees acted in an advisory capacity to the Board of Control. And it is the Board of Control which ratified (resolved to award) the tender to the second respondent. It was argued that the first respondent ought to have filed an affidavit, confirming the contents of the first respondent’s letter in which he gave reasons. I do not believe that this was necessary, in view of the acceptance by the applicant that this letter was indeed written, and its reliance on the contents thereof in order to advance its arguments. In any event, it was only in her replying affidavit that Ms Lange for the first time stated that Mr Mchuba is not a member of either the Tender and Procurement Committee or the Board of Control. It is noted that she does not state that he was not present at the relevant meetings, although Mr Louw did advance that argument. Consequently, she submits that Mr Mchuba’s evidence in respect of what transpired at the meetings of those bodies, constitutes hearsay evidence, and, presumably, should be ignored. In so far as it was suggested that the financial aspect of the tender of the second respondent was not part of the deliberations in considering the tenders, Mr Mchuba stressed that he was present both at the meetings of the Tender and Procurement Sub_Committee and the Tender and Procurement Committee, and he confirms the fact that the financial implications and the importance thereof, were in fact discussed. On the other hand, the applicant cannot say what was on the table and what was considered at the time of the award of the tender, but can only speculate on probabilities. I find that there are no probabilities which appear from the papers to lead me to conclude that the Board of Control did not consider the prices of the tenders. Moreover, I have referred to the important consideration of the tender price in the relevant legislature and the Procurement and Tender Policy of the first respondent. It is hardly believable that the first respondent would not have considered price in its decision to award the tender. After all, the tender of the second respondent was in fact approximately R 11 million less than that of the applicant. Mr Louw conceded that he could not argue the contrary. Had the first respondent not considered the fact that the second respondent’s quote was cheaper than that of the applicant, it would have been guilty of a serious dereliction of responsibility, and it would have acted ultra vires the provisions to which I have referred above. Mr Hancock in his affidavit in the urgent application stated the obvious when he said “the tender price is by far the most important scoring category and outweighs points that can be allocated for a tenderer’s BEE profile”. Mr Mchuba pointed out in his affidavit that the first respondent is not obliged, nor entitled, to award the tender purely on the basis of Black Economic Empowerment (BEE) considerations. Points awarded in respect of BEE considerations, amount only to 20% of the total points. In the present case, says he, the difference between the preferential points score obtained by the applicant and second respondent was so small that it did not and could not, outweigh the financial benefits of the cheaper tender of the second respondent. In respect of the averment of the applicant that preference was to be given to the Small, Micro or Medium Enterprise (“SMME”) status of a tender, Mr Mchuba pointed out that in respect of the insurance brokering contract, where the financial status and stability of the intermediary is obviously of great concern, the first respondent did not consider it appropriate to favour a small or medium business enterprise. Furthermore it would have been improper for the first respondent to have taken the SMME status of a tender into account in the absence of any stipulation to that effect in the invitation to tender as being a relevant criterion. The criticism, raised by Ms Lange, that the applicant is a “Black Empowerment Company” and that the first respondent failed to take into account the applicant’s Black Economic Empowerment and SMME status, is effectively contradicted by what is stated above and on the papers. It is quite clear that these factors were taken into account and that the four tenderers basically scored equal points in this regard. Ms Lange stated that the tender document stated that no late tenders would be admissible under any circumstances. She apparently considers tenders of the second respondent to have been late. If she considers the non-compliance with the requirements of the letter of 8 March 2006 as being tantamount to a “late tender”, I disagree with the contention, for the reasons already mentioned. There is no other indication on the papers which supports the allegation that the tender of the second respondent was late. Ms Lange complained of the second respondent having received preferential treatment by the first respondent in view of the following: - the first respondent allowed the second respondent to obtain further information in order for it to submit a further quote; - in doing so the first respondent did not lay down the closing date for the submission of the further tender; - the second respondent, as a result, was placed in a position of undue advantage over the applicant and the fourth and fifth respondents; - the conduct of the first respondent shows bias in favour of the second respondent, alternatively a lack of fairness and transparency in that the alleged waiver was never communicated to the applicant. What Ms Lange apparently loses sight of, is the fact that the applicant was in the privilege position of having had access to all the relevant information, due to it having been the first respondent’s broker. If there was any question of an unfair advantage, it certainly was not the second respondent, on these papers, who received the advantage, but rather the applicant. Furthermore, Mr Mchuba stated that when he had telephonic conversations with representatives of all the tenderers, the other three tenderers all objected to the applicant having enjoyed an unfair advantage, since the applicant already had the first respondents detailed claims history at his disposal. As the result, he convened a meeting of the four tenderers on 31 March 2006. He stated that at that meeting, the information which the second respondent asked for, the applicant agreed to provide, precisely as he, as the present broker, had access to the information. This was the very basis of the complaints of the applicant having an unfair advantage. The information had to be given to the second respondent in order to neutralise this unfair advantage which the applicant had enjoyed. Ms Lange stated that it had come to her attention that during the course of the tender process the first respondent had acquired the shareholding of the third respondent. This statement later appeared to be incorrect. Mr Mchuba stated that at the time of the award of the tender to the second respondent, he was unaware of the second respondent having acquired the shares in the third respondent. He later became aware of this fact at a meeting held on 26 April 2006, when representatives of the second respondent advised him about it. He was assured that the black members of the third respondent would remain active in the management and board of directors. On 7 June 2006, the first respondent received notification of the said acquisition of shares. Mr Mchuba denies that the first respondent had misdirected itself. He states that even if the knowledge of acquisition of shares had been known to the first respondent at the time of the tender award, it would have had no bearing on the adjudication process. The true position therefore is that the second respondent, and not the first respondent, obtained the shareholding of the third respondent. It doesn’t seem to me as if anything turns on this point. After all, the situation precisely correlates to the relationship of the applicant and Dalys, from 2003 onwards. It is also a matter for comment that Mr Hancock referred to the acquisition of the shareholding by the second respondent in the third respondent, in his affidavit in the urgent application, which was incorporated by the applicant in these papers. This affidavit was filed before the replying affidavit of Ms Lange was filed, but in spite of that, Ms Lange makes no reference to it. Ms Lange complained of the fact that the first respondent took into account in awarding the tender to the second respondent, that the latter could provide the service of claims management, while the applicant did not. She says that the applicant never regarded this to be part of the tender. She referred to the fact that the first respondent, in September 2005, advertised for tenders for claims management which would indicate that the first respondent did not regard claims management to be part of the tender. In the course of the criticism, Ms Lange, however, failed to deal with the objective fact that claims management was specified in the Conditions of Tender. In his answering affidavit on behalf of the first respondent, Mr Mchuba stated that it is incorrect to say that the components associated with a progressive self-insurance programme necessarily exclude claims management. Non constat that progressive self-insurance was also not specified as a requirement in the Conditions of Tender. While he agreed that until July 2006 this function had been outsourced to a third party, he stated that there was nothing, in principle, which would preclude a tenderer from also rendering this function. Mr Mchuba could have stated it more forcefully, in so far as the Conditions of Tender clearly invited tenders in respect of claims management. One is perplexed by the assertion of Ms Lange that claims management was not part of the Conditions of Tender. I did not, however, understand Mr Louw to persist with this point. The issue concerning the insistence by the second respondent that the local South African market should be canvassed for quotations, raised by Mr Greene in his letter to which I have referred, and which is repeated by Ms Lange, is not also understood. In the Conditions of Tender specific reference was made to this very issue. In the first respondent’s Procurement & Tender Policy, specific provision is made for a policy to promote the utilisation of national, regional and local suppliers before considering overseas suppliers. However, because this aspect was not dealt with in argument, and apparently not pursued, I do not deal with it any further. I do not comprehend the significance of the attack in any event. DISPUTE OF FACT: The question which arises, is whether I can arrive at a final conclusion on the papers as they stand, including as they do,

disputes of fact, or whether I should recognise that the disputes of fact cannot be resolved on paper. Rule 6(5)(g) of the Uniform Rules of Court provides: "Where an application cannot properly be decided on affidavit the Court may dismiss the application or make such order, as to it seems meet with a view to ensuring a just and expeditious decision. In particular, but without affecting the generality of the aforegoing, it may direct that oral evidence be heard on specified issues with a view to resolving any dispute of fact and to that end may order any deponent to appear personally or grant leave for him or any other person to be subpoenaed to appear and be examined and cross_examined as a witness or it may refer the matter to trial with appropriate directions as to pleadings or definition of issues, or otherwise." [Emphasis supplied.] In Plascon_evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) per Corbett JA, Miller JA, Nicholas JA, Galgut AJA and Howard AJA, Corbett JA (as he then was) held at p634 E-635 C “Secondly, the affidavits reveal certain disputes of fact. The appellant nevertheless sought a final interdict, together with ancillary relief, on the papers and without resort to oral evidence. In such a case the general rule was stated by VAN WYK J (with whom De Villiers JP and Rosenow J concurred) in Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E-G, to be: "... where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant's affidavits justify such an order... Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted." This rule has been referred to several times by this Court (see Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Green Point) (Pty) Ltd 1976 (2) SA 930 (A) at 938A _ B; Tamarillo (Pty) Ltd v B N Aitkin (Pty) Ltd 1982 (1) SA 398 (A) at 430 _ 1; Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd en Andere 1982 (3) SA 893 (A) at 923G _ 924D). It seems to me, however, that this formulation of the general rule, and particularly the second sentence thereof, requires some clarification and, perhaps, qualification. It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact (see in this regard Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163 _ 5; Da Mata v Otto NO 1972 (3) SA 858 (A) at 882D _ H). If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross_examination under Rule 6 (5) (g ) of the Uniform Rules of Court (cf Petersen v Cuthbert & Co Ltd 1945 AD 420 at 428; Room Hire case supra at 1164) and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks (see eg Rikhoto v East Rand Administration Board and Another 1983 (4) SA 278 (W) at 283E _ H). Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far_fetched or clearly untenable that the Court is justified in rejecting them merely on the papers (see the remarks of BOTHA AJA in the Associated South African Bakeries case, supra at 924A).” [Emphasis supplied.] In Sewmungal & Ano NN.O. v Regent Cinema,1977(1) SA 814(N), a decision of the Full Bench per Fannin Hoexter and Leon JJ, in which Leon J gave the decision of the Court, after referring to the Room Hire case, (Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163 _ 5) held at 819F: "Despite the approach referred to above - which I have no doubt is the proper one - there has been a tendency in recent years for Courts to decide disputed questions of fact on the probabilities emerging from the affidavits without having any or any proper regard to the advantages of viva voce evidence Reed v Wittrup, 1962(4) SA 437(D), is an example of such a case. I suspect that this tendency owes its origin to the remarks of Preiss JP in Soffiantini v Mould, 1956(4)SA 150(E), where the learned Judge stated at p. 154 that: 'It is necessary to make a robust, common sense approach to a dispute on motion as otherwise the effective functioning of the Court can be hamstrung and circumvented by the most simple and blatant strategem. The Court must not hesitate to decide an issue of fact on affidavit merely because it may be difficult to do so. Justice can be defeated or seriously impeded and delayed by an over fastidious approach to a dispute raised in affidavits.'” [Emphasis supplied.] And at 820A the learned judge continued: "The application of the so-called robust approach to a case involving bare denials cannot be criticised in any way. And there are no doubt other cases where the mere allegation of a dispute of fact is not conclusive of its existence for in every case the Court must examine the alleged dispute of fact and see whether in truth there is a real issue of fact which cannot be satisfactorily determined without the aid of oral evidence (Peterson v Cuthbert & Co Ltd, 1945 A.D. 420 at 428). There may be cases where the correspondence is wholly inconsistent with a litigant's version or where that version is so inherently improbable that a Court will be able to assert with confidence that cross-examination will not disturb the balance of probabilities. The examples are not exhausted. Thus in Da Mata v Otto N.O., 1972(3) SA 858(AD) the Court was able to decide on the papers that there was no genuine dispute of fact which could not be resolved on the affidavit. But in that case the unsuccessful litigant had, in certain respects, contented himself with bold denials. Furthermore, certain conduct of his was found to be wholly inconsistent with the existence of an agreement upon which he relied.” [Emphasis supplied.] Although the situations referred to will mostly concern a respondent, the dictum equally applies to an applicant. In review proceedings, referral to oral evidence is permissible. Rule 53 review proceedings are dealt with as applications, mutatis mutandis. Review proceedings will, however, not ordinarily be referred to oral evidence, but only in exceptional circumstances - Johannesburg City Council V the Administrator, Transvaal, (1),1970(2) SA 89(T) at 93D-H per Marais J: "The Rules are intended to assist a party who bona fide and reasonably believes that he has been wrong and not to hamper the quest for justice. The terms of Rule 6(g) are as explicit as can be. Where a dispute of fact cannot be resolved on affidavit, the Court should, if the application is not dismissed, adopt that procedure which is best calculated to ensure that justice is done with the least delay." See, too: Hopf v Pretoria City Council,1947(2) SA 752 (T) and Daitsch & Ano v Osrin & ano (2), 1950(2) SA 343 (C). In Cape Town Municipality & Ano v Bethnal Investments (Pty) Ltd & Ano; 1972(4) SA 153(C), Watermeyer J (as he then was) dealt with an application by the Municipality applying for the demolition of an unauthorised "structure" in terms of the Town Planning Scheme; at 171D: "Whilst it must be conceded that it is an unusual course, it seems to me that there is no Rule of Law which prevents a Court in an appropriate case from allowing under Rule 6(5)(g) the cross-examination of the deponent to an affidavit, who is a member of such a body, with regard to the facts to which he has testified, in order to lay the foundation for an inference that the body did not properly apply its mind to the matter before it. It may well be that he cannot in Law be cross-examined as to the discussions which took place between the members of the body or the reasons which prompted them to come to their conclusions.” It is clear from the tenor of the judgment, that Watermeyer J considered a referral to oral evidence in those circumstances, to be permissible, but only in exceptional or unusual circumstances. There is also English authority for the proposition that review proceedings will only be referred to oral evidence in exceptional circumstances - R v Kent Justices ex Parte Smith,1928 Wn 137. In Regina v Stokesley Yorkshire Justices ex Parte Bartram, 1956 (1) AER 563 per Lord Goddard CJ: "I do not want this to be thought to be an easy precedent. We allowed cross-examination in this case because it is a case of a very remarkable character." See too: Khawaja v Secretary of State for Home Department,1983(1) AER 765 (HL) at 792D-F per Lord Bridge. While it is true that the court should be slow to adjudicate upon probabilities on paper, it is equally true that probabilities may sometimes be so strong that a court can conclude that oral evidence will not disturb those probabilities. In this respect, it is so completely improbable that the first respondent would not have taken serious note of the 75% difference in price of the tender of the applicant as opposed to that of the second respondent, that it does not seem to me to be a viable possibility. The Tender and Procurement Policy of the first despondent contains the following: “Value for money is a key policy objective to ensure that, when purchasing goods and services, the SARCC achieves the best possible outcome for the amount of money spent.” The argument presented on behalf of the applicant that the price difference was never what the first despondent took into consideration when deciding upon the tenders, and that it was only later thought of as an excuse by the first despondent, holds no water. The difference in price amounts to R11,110,015.00. Although the tender documents specified that the first respondent is not obliged to accept the lowest tender, it would, as stated, have constituted a gross dereliction of responsibility and duty, if the first respondent had not taken such a huge difference into consideration in its deliberations. In addition, the Preferential Procurement Policy Framework Act, which governed the present tender process, as pointed out earlier, provides that the lowest acceptable tender scores high points for price. Any other acceptable tenders which are higher in price must score fewer points, on a pro rata basis, calculated on their tender prices in relation to the lowest acceptable tender. In Cash Paymaster Services (Pty) Ltd v Eastern Cape Province and Others 1999 (1) SA 324 (CkH), Pickard JP held at 350H: “The very essence of tender procedures may well be described as a procedure intended to ensure that government, before it procures goods or services, or enters into contracts for the procurement thereof, is assured that a proper evaluation is done of what is available, at what price and whether or not that which is procured serves the purposes for which it is intended.” Apart from the ground for review that the second respondent’s tender was not complete and in order, and that the second respondent ought to have been disqualified from the tender, and/or that the second respondent had withdrawn from the tender, and that the second respondent’s tender was provisional, it appears that the predominant ground upon which the applicant relies, is the allegation that the first respondent failed to award the tender to the applicant upon grounds which are irrelevant to the subject matter. This turns on statements contained in the report of the Tender and Procurement Sub_Committee namely that the applicant had been doing the brokerage for 14/15 years, and that second respondent “be afforded an opportunity to ensure participation of other BEE companies in the business.” The question which presents itself is whether this presents exceptional circumstances in the present review which could serve as a basis for a referral of issues to oral evidence. I do not believe that it does. In her supplementary affidavit, Ms Lange referred to the report of the Cross Functional Sourcing Team to the Tender and Procurement Sub_Committee of 22 March 2006. In that report the applicant was recommended to be the successful tenderer. She points out that the Tender and Procurement Sub_Committee did not accept the report but raised certain concerns, which she tabulated. In respect of the Tender and Procurement Sub_Committee report to the Board of Control, dated 13 April 2006, it was recommended that the tender be awarded to the second respondent and not the applicant. She says that one is left in the dark as to why this change of heart came about, especially in view of the applicant’s attitude that the second respondent ought to have been disqualified by reason of its failure to supply the proposed basis of remuneration by the 13 March 2006 as was required in the letter of 8 March 2006. She points out that on 13 April 2006 the Board of Control did not accept the report, but instructed the Tender and Procurement Committee to consider certain matters, to wit: - the inconsistencies in the said report; - whether the procurement process was correct; - whether the criteria were consistently applied to all the service providers. Ms Lange drew attention to the fact that at the meeting of the Tender and Procurement Committee on 19 April 2006, it resolved that the recommendation of the Tender and Procurement Sub_Committee was not clear and precise and needed to be revised and a clear recommendation submitted the next day. However, says Mrs Lange, the report tabled the next day was identical to the previous report. Yet, on 20 April 2006 the Tender and Procurement Committee accepted the second report without comment or criticism as a “revised submission”, and submitted that report to the Board of Control on the 24 April 2006, which the latter accepted, on the strength of which the tender was awarded to the second respondent. I do not believe that these aspects give rise to any dispute arising on the papers, but if I am wrong in my view, I am of the opinion that such conflict does not constitute “a real dispute of fact”. Mr Louw severely criticised what was said at various meetings of committees. I do not intend to do with all those criticisms. As I pointed out before, they were ranking committees clearly only having authority to investigate and recommend in the present tender process. Whatever their reasoning might have been, need not necessarily have been the reasoning of the Board of Control which ratified the acceptance of the tender of the second respondent. As is the position in all such instances, the decision making body may accept or reject recommendations made to it. There is nothing on the papers presently before me to indicate that the Tender and Procurement Committee was bound, firstly to follow all recommendations made to it by the Tender and Procurement Sub_Committee, and secondly, even if those recommendations were accepted, that they were necessarily accepted upon the grounds or motivation advanced, or the reasons considered by the Tender and Procurement Sub_Committee. The same applies to the Board of Control. No irregularity appears from what transpired in the present case. What is clear, is that there were changes of heart from time to time, but that does not constitute a reviewable irregularity. Such is the nature of a decision making process of committees, consisting of different members, that the final conclusion will almost never be reached at the inception of the

inquiries and investigations of the committees. Members will, in the normal course, come to certain preliminary conclusions which may be influenced by events or facts which either come to their detention later as a result of inquiries, or were not properly or at all, considered earlier. It appears to be that these points are merely technical in nature, and are devoid of substance. Again I cannot find that any of the above criticisms constitute “a real dispute of fact” on the papers. Ms Lange stated, and Mr Louw argued, that because it is clear that the applicant was the alternative bidder for the tender, if the tender award to the second respondent is to be set aside, the court should order that the applicant be awarded the tender. She states that this is because, should the tender of the second respondent fall away, the same would follow as far as the third respondent is concerned. I do not believe that this is necessarily so. If the first respondent were to be ordered to reconsider the tenders, it may well again award the tender to the second respondent. However, in view of the conclusion to which I have come, it is unnecessary for me to deal with this argument. Mr Vivian legitimately complained about new matter, contained in the replying affidavit of Ms Lange. I do not deal was all of those instances, save to point out that the allegation that Mr Mchuba was unable to make affidavit on behalf of the first respondent, was first mentioned in the replying affidavit. Previously his authority in this regard was never challenged. This also does not present “a real dispute of fact”, as Mr Mchuba clearly stated that he was present at the meetings and deliberations of the Tender and Procurement Committee, and the Board of Control. This statement is attacked by Ms Lange and Mr Louw in his argument with reference to the fact that Mr Mchuba was not a member of either. But he could have attended as a non-member. Again, I refer to the fact that his authority was never challenged by the applicant up to the time of the replying affidavit. No “real dispute of fact” arises in this regard either. Mr Vivian, for the first respondent, has referred me to an unreported judgment in the Supreme Court of Appeal. It is one of the cases under case numbers 1891/06 and 2441/06, cited as the Minister of Social Development and others v Phoenix Cash & Carry-PMB CC, a judgment of the Supreme Court of Appeal, heard on 5 March 2007 and delivered on 26 March 2007, where Heher JA gave the judgment, concurred in by Scott, Cloete, Heher. Cachalia JJA and Theron AJA. I quote from the typed version of the judgment of Heher JA: “[1] The award of public tenders is notoriously subject to influence and manipulation. Section 217( 1) of the Constitution requires an organ of state to contract for goods or services 'in accordance with a system which is fair, equitable, transparent, competitive and cost-effective'. These principles must inspire all aspects of the process which makes provision for the conclusion of such a contract. Pursuant to s217(3) of the Constitution the legislature passed the Preferential Procurement Policy Framework Act 5 of 2000 ('the PPPF Act') setting up the framework in which the preferential procurement goals identified in s217(2) must be implemented. This, in turn, depends upon the submission of an 'acceptable tender' which is defined in s1 of the Act as 'any tender which, in all respects, complies with the specifications and conditions of tender set out in the tender document'. Here also the principles of s217(3) apply to any process which makes provision for the conclusion of a contract flowing from the submission of an 'acceptable tender'. Unfortunately, as experience in this Court proves, the high standards that the Constitution sets seem to be more honoured in the breach than in the observance. l2l Without attempting a comprehensive survey of the circumstances which will, offend against s217(1) certain general observations are demonstrated as true by the facts of the present case- (1) a tender process which depends on uncertain criteria lends itself to exclusion of meritorious tenderers and is opposed to fairness among tenderers, and between tenderers and the public body which supposedly promotes the public weal; (2) a process which lays undue emphasis on form at the expense of substance, facilitates corrupt practice by providing an excuse for avoiding the consideration of substance; it is inimical to fairness, competitiveness and cost effectiveness. By purporting to distinguish between tenderers on grounds of compliance or non-compliance with formality, transparency in adjudication becomes an artificial criterion. In saying this I do not suggest that the tender board is not entitled to prescribe formalities which, if not complied with, will render the bid invalid, provided both the prescripts and the consequences are made clear. What I am concerned to stress is the need to appreciate the difference between formal shortcomings which go to the heart of the process and the elevation of matters of subsidiary importance to a level which determines the fate of the tender. It follows that a public tender process should be so interpreted and applied as to avoid both uncertainty and undue reliance on form, bearing in mind that the public interest is, after giving due weight to preferential points, best served by the selection of the tenderer who is best qualified by price.” This dictum appears to be eminently applicable to the facts of the present application. Having applied the financial considerations to which I have referred, in order to award the tender to the second respondent, and which could not be denied by the applicant, it cannot be contended in my view that the first respondent acted in any way which is reviewable by this court. Nor does it require oral evidence to come to that conclusion, in view of the fact that it was conceded by Mr Louw that the applicant possesses of no evidence to the contrary. Other than that, the applicant’s assertion that claims management was never part of the tender, is patently wrong. Moreover, I find that the criticisms leveled by the applicant at the first respondent as to its decision-making process, are unfounded. They are disputed by the first respondent as well as by the second respondent in the urgent application, which papers have been incorporated into this application by the applicant, and the contentions of the applicant are not supported by the documentation or the objective probabilities in the case. This also does not give rise to a real dispute of fact on the papers. Mr Louw has taken a number of other points of a technical nature. One of which was argument that, because the applicant was not notified of the withdrawal of the requirements stated in the letter of the first respondent dated 8 March 2006, the first respondent breached his duty to ensure an open and fair process. I do not deal with those points, as I do not consider them to have any merit. In general, the attacks upon the tender process are based on bald statements, without substance. I find that all of those attacks are unfounded in fact as well as in law. They do not, in my view, constitute a real dispute of fact. In my view, no real dispute of fact arises in any of the main arguments, presented on behalf of the applicant. Mr Louw was unable to identify any exceptional circumstances which would justify any of the disputes to be referred to oral evidence. Nor am I able to identify any. Mr Louw in fact submitted that the disputes of fact were such that I should see my way clear to dispose of the matter on the papers. I agree. While I appreciate the effort made by both counsel with their heads of argument, in view of my findings in the present application, I find it unnecessary to deal in detail with the authorities quoted by them. None of the authorities quoted appear to me to militate against any of the conclusions at which I have arrived. I make the following orders:

By notice of motion the Applicant prays for orders in the following terms:

“1. That the 1st respondent’s decision taken during April 2006 whereby the contract in terms of tender RPF-275-38-04 was awarded to the 2nd and 3rd respondents as a joint venture, alternatively as contractor and subcontractor, be reviewed and corrected or set aside;

2. That any new contract concluded by the 1st respondent as a result of a court order of this honourable court on 23 May 2006 under case number 14711/2006 be declared null and void and of no force and effect.

3. That the contract in terms of the said tender be awarded to the applicant.

4. That the 1st respondent be ordered to pay the cost of the application and in the event of any of the other respondents opposing the relief sought hereunder, it to be ordered, jointly and severally with the 1st respondent, to pay such costs.

5. That the applicant be granted further and/or alternative relief.”

The Notice of Motion and founding affidavit, attested to by Ms Lange of the applicant, and annexures thereto were filed by the applicant on 30 May 2006. A supplementary affidavit by Ms Lange to the founding affidavit was filed on 8 November 2006. An Answering affidavit by the first respondent, attested to by a Mr Mchuba, was filed on 19 January 2007. No answering affidavit was filed by the other respondents. A replying affidavit by the applicant was filed on 13 March 2007, again attested to by Ms Lange.

This review application is brought in terms of Rule 53 of the Uniform Rules of Court, in terms of which the first respondent was required to provide a record of the proceedings. Such record of the proceedings was filed on 25/6/2006. A supplementary record was filed on 25/10/2006.

What appears to be common cause, or not disputed, are, inter alia, the following facts and circumstances:

- In the past, prior to the invitation to tender, the applicant had made use of the services of Dalys and Associates (Pty) Ltd) (“Dalys”) as insurance brokers.

- Dalys was first appointed in 1991 as insurance brokers for the first respondent for five years. The appointment was extended for a further five years on two occasions, terminating on the 31 May 2005, when the first respondent publicly invited tenders for the appointment of insurance brokers for the period after 31 May 2005.

- Pending the completion of the tender procedure, Dalys’ brokering mandate was extended to 31 August 2005. The tender procedure not having been completed by that time, the mandate was further extended to 31 May 2006 on a month-to-month basis.

- The applicant does business as an insurance brokerage firm. Dalys owns 49% shareholding in the applicant.

- Prior to 2003, Dalys performed the insurance brokerage function for the first respondent.

- Between 2003 and 2005, the first respondent’s brokering services had been performed by the applicant as understudy of Dalys with the first respondent’s knowledge and consent. This consent was apparently given because the appearance on the scene of the applicant did not entail any major change in the identity of the personalities involved. The first respondent continued to liaise with the applicant, primarily, as before, through certain Mr E. Greene. It does not appear from the papers that a formal contract was entered into between the first respondent and the applicant.

- In the foresaid capacity the applicant assumed responsibility for the placement, management and administration of the first respondent’s insurance programme.

The tender process commenced on 27th February 2005, when the first respondent published a “Request for Proposals”. This was accompanied by certain “Conditions of Tender”.

THE “REQUEST FOR PROPOSALS”:

In the Request for Proposals, the first respondent invited tenderers to submit “a business profile, which would enable the SARCC (the applicant) to evaluate the ability to provide a professional insurance brokering for a period of three years” and to express their “willingness to participate in this project by the submission of a priced proposal in support of your appointment”. It was a stated condition for tenderers to have a black equity ownership of at least 25%. Tenderers were advised that tenders would be evaluated for “financial viability, black equity ownership, security screening and technical capacity and ability”. It was specifically stated that the first respondent would not be obliged to accept the lowest, or any tender.

It was further stated that a compulsory tender briefing would be held on 4 March 2005, at a specified address, and that tender documents would be ready for collection by 1 March 2005. The closing date for the tenders was stated to be Friday, 29 March 2005 at 10:00.

THE “CONDITIONS OF TENDER”:

As stated, the Request for Proposals was accompanied by “Conditions of Tender”. Some of the provisions of the Conditions of Tender which have a bearing on the present application were the following:

- It was provided that the representative of the first respondent and each tenderer who submitted a tender, “shall act as stated in his Conditions of Tender and in a manner which is fair, equitable, transparent, competitive and cost-effective”.

- The document stated that the tenderers would be obliged to include the rates, prices and the total of the prices, all duties, taxes (except VAT) and other levies payable by the successful tenderer.

- The tenderers were obliged to provide rates and prices which were fixed for the duration of the contract and not subject to adjustment, except as provided for in the conditions of contract, to be concluded with the successful tenderer.

- In respect of prices it was stated that no change in the total of the prices would be permitted except as required by the first respondent’s representative to confirm the correction of arithmetical errors discovered and that the total of the prices, as stated by the tenderer, as corrected by the first respondent’s representative, shall be binding upon the tenderer.

- The document further stipulated that the first respondent undertook to disclose the evaluated tender price only to the relevant SARCC tender committee and undertook that it would not disclose information relating to the evaluation and comparison of tenders and recommendations for the award of a contract to tenderers or to any other person not officially concerned with the tender process.

- Under the heading “Tender Objectives” it was stated that it was required of tenderers to provide management fee structures for the provision of the following services to be rendered in connection with the insurance brokerage of the first respondent:

- General administration and annual placement;

- Claims Management;

- Risk analysis and management.

- In respect of the first respondent’s insuring policy it was stated that it was the policy to “make this to use of the market capacity, expertise and underwriting experience of the Lloyd’s market, supported by South African insurers if local market underwriting capacity is available or placement therein is appropriate”.

- Tenderers were invited to make proposals in respect of an insurance programme for the first respondent and to provide a full description of a proposed strategy and plan of action, should the tenderer be appointed.

The “Conditions of Tender” included a “Notice to Tenderers”, to which various forms were attached, to be completed by the tenderer.

Five proposals were received before the stipulated deadline of 29 March 2005. Of these, one did not qualify, leaving four remaining proposers. These four proposers were invited to submit tenders in terms of another “Notice to Tenderers”. It is my understanding that the tenders were to be made in terms of and subject to, the provisions contained in the “Request for Proposal”, and documents attached thereto.

The second and third respondents submitted a joint tender, describing themselves as a joint venture. It is also stated that their relationship was really one of contractor and subcontractor. Nothing turns on this point. Hence, when referring in this judgment to the tenders of the second and third respondent, I shall simply refer to the tender of the second respondent, this to be understood as including reference to the third respondent.

I shall later deal with the history of events which took place after 29 March 2005.

THE URGENT APPLICATION:

Having been considered by the relevant committees, and after recommendations had been made, the Board of Control of the first respondent approved the tender of the second respondent on 24 April 2006.

After being advised of this decision of the first respondent, the applicant moved an urgent application in this Court to interdict and restrain the first respondent from putting into effect any contract with the second respondent in consequence of the acceptance of the tender of the second respondent.

Bertelsmann J made the following orders on 23 May 2006:

“1. That the first, second and third respondents are hereby interdicted and restrained from implementing the contract in terms whereof second and third respondents were appointed as insurance broking firm for the first Respondent in terms of Tender RPF-275-38-04.

2. That the applicant is to launch the review application with in 5 (five) days from the date of this order.

3. That the applicant (is) to pay (the) taxed costs of the first respondent for Friday 19 May 2006.

4. That the applicant (is) to pay the second and third respondent’s (costs) including the costs of Friday (19 May 2006) such costs to include the costs of 2 counsel.”

Mr Mchuba submitted in his affidavit on behalf of the first respondent that the effect of the order of Bertelsmann J., properly interpreted, is that, pending the adjudication of the review application, the first , second and third respondents were interdicted and restrained from implementing the contract granted to the second respondent in terms of the said tender. I agree with this interpretation.

GROUNDS FOR REVIEW:

The present application for review was thereupon issued by the applicant. The alleged grounds for review, as stated in the founding affidavit of Ms Lange, include that the first respondent:

- acted procedurally unfairly;

- acted on relevant considerations;

- failed to consider relevant considerations;

- acted in bad faith or arbitrarily or capriciously;

- did not apply its mind to the subject matter of the decision;

- took a decision which was not rationally connected to the information that formed the basis of the decision;

- failed to act according to the requirements of section 217 of the Constitution.

“JURISDICTIONAL FACTS”:

It is trite that an official who acts in an administrative capacity, can only exercise such powers, duties and functions as he or she is authorised to perform - the so-called “jurisdictional facts”.

The Constitution of the Republic of South Africa, Act 108 of 1996 (“the Constitution”) provides in section 217 for “Procurement”. That section reads:

“(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.

(2) Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for_

(a) categories of preference in the allocation of contracts; and

(b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.

(3) National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.”

The Preferential Procurement Policy Framework Act, 5 of 2000, assented to on 2 February 2000, which commenced on 3 February 2000, presents national legislation which prescribes a framework within which a policy of procurement must be implemented. In its introduction it is stated that the Act is to give effect to section 217 (3) of the Constitution by providing a framework for the implementation of the procurement policy, contemplated in section 217 (2) of the Constitution and to provide for matters connected therewith.

Under “Definitions” in section 1, it is provided, inter alia, that

“'acceptable tender' means any tender which, in all respects, complies with the specifications and conditions of tender as set out in the tender document;

'organ of state' means_

(a) a national or provincial department as defined in the Public Finance Management Act, 1999 (Act 1 of 1999);

.......................

(f) any other institution or category of institutions included in the definition of 'organ of state' in section 239 of the Constitution and recognised by the Minister by notice in the Government Gazette as an institution or category of institutions to which this Act applies;

'preferential procurement policy' means a procurement policy contemplated in section 217 (2) of the Constitution .................”

The Public Finance Management Act, 1999, provides in its definitions:

“'national department' means_

(a) a department listed in Schedule 1 of the Public Service Act, 1994 (Proclamation 103 of 1994), but excluding a provincial administration; or

(b) an organisational component listed in Schedule 3 of that Act.”

and

“'national government business enterprise' means an entity which_

(a) is a juristic person under the ownership control of the national executive;

(b) has been assigned financial and operational authority to carry on a business activity;

(c) as its principal business, provides goods or services in accordance with ordinary business principles; and

(d) is financed fully or substantially from sources other than_

(i) the National Revenue Fund; or

(ii) by way of a tax, levy or other statutory money.”

Section 3 of the Public Finance Management Act, 1999, provides:

“Institutions to which this Act applies

(1) This Act, to the extent indicated in the Act, applies to_

(a) departments;

(b) public entities listed in Schedule 2 or 3;

(c) constitutional institutions; and

(d) Parliament and the provincial legislatures, subject to subsection (2).”

Schedule 2 of the Act lists “Transnet Limited”, which was the predecessor of the first respondent.

Counsel for both sides were not certain as to whether the references above rendered the first respondent an “organ of state” as contemplated in section 217 of the Constitution, but they agreed, and I assume for purposes of this case, without deciding, that it does.

Returning to the Preferential Procurement Policy Framework Act, it is observed that section 2 deals with “Framework for implementation of preferential procurement policy”. That section provides:

“(1) An organ of state must determine its preferential procurement policy and implement it within the following framework:

(a) A preference point system must be followed;

(b) (i) for contracts with a Rand value above a prescribed amount a maximum of 10 points may be allocated for specific goals as contemplated in paragraph (d) provided that the lowest acceptable tender scores 90 points for price;

(ii) for contracts with a Rand value equal to or below a prescribed amount a maximum of 20 points may be allocated for specific goals as contemplated in paragraph (d) provided that the lowest acceptable tender scores 80 points for price;

(c) any other acceptable tenders which are higher in price must score fewer points, on a pro rata basis, calculated on their tender prices in relation to the lowest acceptable tender, in accordance with a prescribed formula;

(d) the specific goals may include_

(i) contracting with persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender or disability;

(ii) implementing the programmes of the Reconstruction and Development Programme as published in Government Gazette 16085 dated 23 November 1994;

(e) any specific goal for which a point may be awarded, must be clearly specified in the invitation to submit a tender;

(f) the contract must be awarded to the tenderer who scores the highest points, unless objective criteria in addition to those contemplated in paragraphs (d) and (e) justify the award to another tenderer; and

(g) any contract awarded on account of false information furnished by the tenderer in order to secure preference in terms of this Act, may be cancelled at the sole discretion of the organ of state without prejudice to any other remedies the organ of state may have.

(2) Any goals contemplated in subsection l (e) must be measurable, quantifiable and monitored for compliance.”

Preferential Procurement Regulations have been published under section 5 of the Preferential Procurement Policy Framework Act, under Government Notice R725 in Government Gazette 22549 of 10 August 2001. The regulations deal, inter alia, with a preference system, the evaluation of tenders, the awarding of tenders, and other matters. Regulation 2 provides:

“(1) Despite anything to the contrary contained in any law, these Regulations apply to organs of state as contemplated in section 1 (iii) of the Act.”

The first respondent implements a tender and procurement policy as envisaged by the section 217 of the Constitution, read with the other provisions to which I have referred. Under the heading “Objective” the policy states that the SARCC aims at the implementation of systems and procedures which are open, competitive, transparent and fair, while creating accelerated opportunities for target groups. It further provides that the aim is to empower and develop historically disadvantaged individuals and entities and to promote the utilisation of national, regional and local suppliers before considering overseas suppliers.

Amongst a host of other subjects, the first respondent’s Procurement Policy deals with the functions, duties and powers of various committees and subcommittees of the first respondent. Mr Mchuba related these functions, duties and powers in his affidavit, which can be summarised as follows: The first respondent’s Tender and Procurement Committee, (presently known as the Finance, Capital Investment and Procurement Committee, but to which I shall refer as the “Tender and Procurement Committee”) is authorised to approve tenders of between R10 million and R50 million. It may consider tenders of more than R50 million and make recommendations to the Board of Control for adjudication.

The functions, duties and powers of the Tender and Procurement Sub-Committee are that it may adjudicate and approve tenders of up to R10 million. It may consider and recommend for adjudication to the Tender and Procurement Committee in respect of those tenders exceeding R10 million per tender transaction.

Cross Functional Sourcing Teams are used for sourcing of goods, works and services for amounts of more than R150,000 in respect of operational expenses. These teams do not adjudicate or award tenders, but investigate tenders and give advice and recommendations to the relevant Tender Committee or Subcommittee.

Lastly, the Procurement Policy of the first respondent makes provision for criteria for evaluating tenders.

What is clear from the above, is that there is a ranking order. The lower ranking committees or subcommittees act in an investigative capacity and make recommendations to committees higher up and to the Board of Control. For easy reference, the ranking order is tabulated below:

- the Board of Control;

- the Tender and Procurement Committee;

- the Tender and Procurement Sub-Committee;

- the Cross Functional Sourcing Teams.

The applicant has not alleged, nor is there any indication of the papers, that the first respondent acted ultra vires its jurisdictional facts or prescribed procedure.

EVENTS AFTER 29 MARCH 2005:

The Cross Functional Sourcing Team recommended to the Tender and Procurement Sub-Committee, on 1 October 2005:

- That progressive self-insurance should be the model of choice for the (future) insurance business of the first respondent;

- That a closed tender be issued for the four short listed proposers;

- That a detailed specification be drawn around the chosen model with all necessary information to be made available to the tenderers;

- That a contract for a period of two years be entered into with the successful tenderer with an option to extend the contract for one year;

- That the short listed proposers be allowed to quote;

- That the brokering contract with the successful tenderer be entered into on a month to month basis pending the finalisation of a contract.

The Tender and Procurement Sub_Committee accepted this proposal on the 14th November 2005, with minor amendments.

The recommendation of the Cross Functional Sourcing Team included a recommendation that a detailed specification and further quotes would be required from the four tenderers in respect of insurance premiums which they could obtain. This aspect had not been raised in the tender specifications and none of the tenderers had provided such a quote as part of their tender.

In order to place the tenderers in the position to provide such quotes, it was accepted that they would have to be provided with full information of the risks which had to be insured as well as the first respondent’s claims history. As a consequence, a letter dated 8 March 2006 was addressed to each of the four tenderers, which dealt with two issues, namely the decision in respect of progressive self-insurance, and the requirement as to quotes.

According to a further report by the Cross Functional Sourcing Team to the Tender and Procurement Sub_Committee the second respondent objected to the request in the letter on two grounds:

Firstly because the time allowed for the said quotation was too short; and

Secondly, that it was undesirable that four proposers would approach insurers for quotes for the same client.

The second respondent also pointed out that it did not possess the necessary information, referred to above, in order to obtain quotes.

The Tender and Procurement Sub_Committee considered the report of the Cross Functional Sourcing Team on 31 March 2006. The minute of that meeting reflects the following:

- It was stated that it was not a good idea for the four tenderers to approach Lloyds of London for quotations. Different quotations may be provided to different tenderers, compared to the applicant, being the current service provider.

- An apprehension was expressed that the first respondent’s reputation might be impacted upon negatively. Other concerns in this regard were also noted.

- It was noted that a mere claims history was not good enough to have as information when approaching an underwriter. Strategic intent, company financial statements/books, and risk management would be needed.

- There was a danger of different tenderers providing different answers to the same questions, asked by the underwriter.

- It was noted that the tenderers have stated categorically that the claims history provided to then was not comprehensive enough. For each claim category, they needed all incidents in relation to that category.

- Of the tenderers wanted to know the rationale behind being compelled to talk to Lloyds of London, given the fact that certain categories could be underwritten locally.

- It was noted that the applicant’s representative was uncomfortable about the meeting, but that the chairperson stated categorically that the first respondent would provide information as it appears that the lack thereof would disadvantage tenderers.

- The second respondent was noted to have requested to be provided with the number of incidents per each asset claim to enable it to quote for a brokering service fee. It was undertaken that this information would be provided.

The Tender and Procurement Sub_Committee on the 13th April 2006 prepared a report for submission to the Board of Control. In this report an incorrect impression created in the Cross Functional Sourcing Team’s report of 22 March 2006, that the second respondent had not provided a quote in respect of its remuneration, was corrected. The report also dealt with security matters concerning the second respondent, and recommended that the second respondent be appointed for one year.

The Board of Control considered the recommendation of the Tender and Procurement Sub_Committee on 13 April 2006, and resolved that the matter should be referred to the Tender and Procurement Committee meeting to be held on 18 April 2006 (which meeting in fact took place on 19 April 2006).

On 17 April 2006 the Tender and Procurement Sub_Committee submitted a further report to the Tender and Procurement Committee, in which it was recommended that both the applicant and the second respondent be considered for the tender, and that they be given a detailed claims history in order for them to obtain a quote on premiums.

The report was considered by the Tender and Procurement Committee on 19 April 2006. As it considered the recommendation not to be clear it requested a clear recommendation to be made to it for its meeting which was scheduled for 20 April 2006.

The Tender and Procurement Sub_Committee reconsidered the matter and prepared a further report which was tabled at the meeting of the Tender and Procurement Committee on 20 April 2006. It was resolved to recommend that the second respondent’s tender be accepted.

According to the affidavit of Mr Mchuba, the Tender and Procurement Committee took into account as far as the applicant and the second respondent were concerned, the following:

- Their security standing;

- Their status on black economic empowerment;

- their adherence to the first respondent’s preferred model of progressive self-insurance;

- Their financial viability and

- The tender price.

Mr Mchuba stated that the tender price of the second respondent was preferred above that of the applicant. This is by reason of the fact that the second respondent’s tender offered that it would charge:

- an annual fee of R 4.5 million in respect of general administration,

- for annual placement and service – R 1.35 million per annum;

- for claims management – R 2.6 million per annum; and

- a once off risk analysis and management fee in the amount of R550,000.00.

The second respondent further undertook in his tender to remit to the first respondent 100% of all commission earned by it.

The applicant’s tender entailed that it would charge no fees, but would remit to the first respondent only 50% of the commission which accrued to it. Also, the commission would be shared with a third party.

In addition the applicant’s tender did not include the rendering of a claim management service. This structure of fees rendered the applicant’s tender R11,011,015.00 higher than that of the second respondent.

In his affidavit, Mr Mchuba analysed the practical implications of the differences between the two tenders, which, because of its importance, is quoted in full. He states at p.493 of the application:

“4.25.5.1 In respect of liability insurance, commission of 20% would be earned (i.e. an amount of R3,852,800.00). The applicant, in terms of its tender, would share this commission with SBJ Ltd. and would rebate 50% of the amount earned by it to the applicant (meaning the first respondent) i.e. an amount of R963,200.00. The second respondent would rebate the entire amount of R3,852,800.

4.25.5.2 In respect of personal accident insurance, 20% commission would be earned, which the applicant would share with SBJ Ltd. The applicant would accordingly rebate an amount of R7,263.60 to the first respondent whereas the second respondent would rebate R29,054.40.

4.25.5.3 In respect of motor comprehensive assurance, 12.5% commission would be earned, which the applicant would share with SBJ Ltd. It would accordingly rebate and amount of R94,893.72, whereas the second respondent would rebate R379,574.88.

4.25.5.4 In respect of SASRIA, commission of 7.5% would be earned. The applicant would rebate R25,850.40, whereas the second respondent would rebate R51,700.80.

4.25.5.5 In respect of contractor’s all risk insurance, commission of 20% would be earned. The applicant would rebate R150,750.00, whereas the second respondent would rebate R301,500.00.

4.25.5.6 In respect of assets insurance, 20% commission would be earned, which the applicant would share with SBJ Ltd. It would accordingly rebate an amount of R2,098,846.50, whereas the second respondent would rebate R8,395,386.40.

4.25.6 The applicant, in terms of its tender, would accordingly rebate and estimated amount of R3,340,803.50 to the first despondent whereas the second despondent in terms of its tender would rebate and amount of R13,010,015.68. Taking into account the fee of R 4.5 million to be charged by the second respondent, its tender would entail an net rebate to the first respondent of R8,510,015.68.

4.25.7 The above calculation does not take into account an amount of R 2.6 million of the second respondent’s fee related to claims management. If it is taken into account, the net rebate to the first respondent would be R11,110,015.00.”

The stated information was confirmed by Mr Hancock in his affidavit in the urgent application as well.

Mr Mchuba stated that in order to avoid a situation where the first respondent had no insurance cover after 31 May 2006, it concluded an agreement with the second respondent in terms of which the second respondent was appointed as broker of the first respondent until 30 November 2006, whereafter that contract has been extended on a month to month basis.

THE APPLICANT’S CASE:

Ms Lange referred to the letter of 8 March 2006, and stated that the tenderers were obliged to supply the information which was required in the letter, to the first respondent by no later than 12:00 on 13 March 2006. She alleges that the request was in respect of risk management, placing of policies and administration and servicing, but not in respect of claims management, which involves the investigation, management and settling of claims. She says that the function of claims management had been outsourced in the past by the first respondent to a third-party, and that there had been a tender request put out by the first respondent for claims management. Ms Lange indicated that the applicant complied with the request by submitting a further document. She indicated that the fourth and fifth respondents also complied but that the second and third respondents failed to comply with the request.

Ms Lange referred to a letter by the second respondent to the first respondent dated 10 March 2006, in which the second respondent stated that its tender in July 2005 was on “a conceptual basis only”. She says that the award of the tender on something which was not part of the tender and which was conditional, stands to be reviewed. She also referred to a letter written by the second respondent to the first respondent, dated 13 March 2006, and she alleged that in that letter the second respondent withdrew from the tender process. Mr Louw submitted that this letter clearly indicated that the second respondent’s tender was not complete, but provisional.

Ms Lange referred to the debriefing meeting, held on the 31st March 2006, to which reference has been made above. She stated that Mr Greene on behalf of the applicant, objected to an alleged preferential treatment of the second respondent. This objection was also embodied in a letter, written by Mr Greene to Mr Mchuba. By way of summary, Mr Greene’s complainants, as far as they relate to the present application, were the following:

- having to discuss and debate issues with opponents during the course of the tender process;

- the time spent at the meeting on the requests of the representative of the second respondent to be provided with an adequate portfolio claims experience, needed to facilitate the establishment of the second respondent’s proposed remuneration;

- it was felt that because of the fact that the other respondents, apart from second and third respondents, had provided the information requested in the letter of 8 March 2006, and the second and third respondents had not, they should be excluded from the tender;

- the apparent insistence of the representative of the second respondent, that the local South African market should be canvassed for quotations in spite of the “published choice and resolve of the Corporation to renew its portfolio in the Lloyd’s market with which the SARCC has had an enviable track record these past 15 years which should be respected without challenge”.

In this letter, Mr Greene confirmed that it would have a negative effect to send four firms of brokers into the same market to obtain quotations.

Ms Lange stated that by letter, dated 25 April 2006, the first respondent informed the applicant that its tender was not successful.

She then refers to a meeting which was held on 3 May 2006 at which Mr Mchuba chaired the meeting. The minutes of the meeting included, inter alia, two alleged reasons why the second respondent was to be preferred above the applicant, namely

- that the applicant/Dalys had been rendering the service to the first respondent for the previous 14 years and

- that second respondent should be afforded an opportunity to ensure participation of other BEE companies in the business.

On behalf of the applicant the contention that the second respondent had not submitted a pricing proposal as was requested in the letter of 8 March 2006, was raised.

By letter dated 4 May 2006, the applicant’s attorney of record requested reasons for the decision not to award the contract to the applicant. In this letter it is stated, inter alia, that the applicant was not provided with “satisfactory explanations to the questions”.

By letter dated 16 May 2006, the attorneys of record of the first respondent gave reasons for the first respondent having awarded the tender to the second respondent. Three reasons were given, of which I refer only to the third, which clearly stated that the tender of the second respondent was more competitive in that it included the rendering of claims management services. Further that the second respondent also tendered a remittance of 100% to the first respondent of commissions for the placement of policies.

DISCUSSION OF THE APPLICANT’S CASE:

Mr Louw submitted that it was really the Tender and Procurement Committee which took the decision on behalf of the first respondent to accept the tender of the second respondent. This decision, according to Mr Louw, was ratified by the Board of Control for reasons not disclosed to this Court. I have difficulty following this argument. The fact is that the Tender and Procurement

Committee did take a decision on the matter - one of recommending to the Board of Control to accept the tender of the second

respondent.

It stated that Mr Mchuba is not a member of any of the bodies on behalf of which he made his affidavits. There is accordingly no first-hand evidence as to what motivated the Board of Control to “ratify the decision taken by the Tender and Procurement Committee”. Mr Louw further submitted that in the absence of an affidavit on behalf of the second respondent or on behalf of the Tender and Procurement Committee or the Board of Control, there is no first-hand evidence as to the true reasons for awarding of the tender to the second respondent before Court. Mr Louw, in making this submission, apparently ignores the affidavit of Mr Hancock, filed on behalf of the second respondent in the urgent application, which was incorporated by specific reference into the papers in this review application.

In respect of the letter of 8 March 2006, the applicant’s case is that the second respondent failed to comply with the requirements of the letter.

In respect of the applicant’s viewpoint that the second respondent had to be excluded from the tender process because it had failed to comply with the demand in the said later to provide a service preparation, Mr Mchuba stated that the first respondent, because of the problems which had arisen, waived that request. Whether “waiver” is the correct word to use, is open to debate. But the intention of what is said is clear, namely that the first respondent withdrew, or did not insist on, the requirement. This seems to me to be the complete answer to the criticism of Ms Lange of the second respondent not complying with the requirements of the letter. Mr Mchuba stated that none of the other tenderers had submitted a quotation in respect of premiums by 13 March 2006 or thereafter. He said that the applicant and the fourth and fifth respondents indeed submitted written confirmation that their brokering service fees remained unchanged. This, no doubt, is what Ms Lange was referring to in her affidavit. Ms Lange stated that the alleged waiver is unconvincing as that waiver is not reflected in the minutes of the meeting of the 31st March 2006, nor was it communicated to the applicant. It appears to me that this does not necessarily follow. The mere fact that the waiver was not communicated to the applicant, or minuted at a meeting, does that mean that it did not occur. If there was a waiver, there would be no motivation for the second respondent to have withdrawn from the tender process. There is objective corroboration on the papers for the allegation of Mr Mchuba that the requirements of the first respondent in the letter of 8 March 2006 were waved. In the recommendation of the Tender and Procurement Committee, dated 20 April 2006, reference is made to that letter in paragraph 2.4, and it is stated:

“ On 8 March 2006, the SARCC informed service providers of a preferred insurance model and released claims history to the four short listed service providers to quote the underwriting premium for submission to the SARCC by 13 March 2006. This was done (to) ensure that all bidders are competing on the same level. However, all service providers could not provide a quote due to the fact that the claims history is not comprehensive enough. Furthermore, SARCC will have to provide service providers with strategic intent and accompany the service providers when engaging the underwriter. As a result thereof, this was not pursued with any further.”

[The emphasis is mine].

But Ms Lange avers that even if it had been waived, the second respondent’s tender was not a proper tender in respect of the first respondent’s requirements. This appears to refer to her other allegations that the second respondent’s tender was both inadmissible and an incomplete tender for the following reasons:

- the second respondent’s original tender was not based on a model of progress of self-insurance;

- the tender was awarded on the basis of progressive self-insurance;

- the acceptance by the first respondent of the second respondent’s tender was invalid and in contravention of its own policy and tender conditions.

As to the insurance model, it is clear that no model was prescribed in the original tender documents. It was left to the tenderers to suggest a model. It was only after the tenders had been received, that a decision was taken by the first respondent that progressive self-insurance should be the model to be applied. I fail to see how this has any effect on the tender of the second respondent. I find that this criticism is without foundation. Mr Mchuba denies that the second respondent’s tender was incomplete and non-responsive in respect of the first respondent requirements. He reiterates that it was never a tender requirement that the tenderers must apply a progressive self-insurance model. The tender document supports this observation of Mr Mchuba.

In the letter of the second respondent of 10 March 2006 to the first respondent, to which I have referred, the second respondent referred to the first respondent’s requirement of a premium quotation from Lloyds within three working days, stating that this was not possible. In the letter it was pointed out that the applicant had an unfair advantage in so far as he already had the existing structure and detailed claims experience as well as premium costs at his disposal. The letter further stated “our tender submission in July 2005 was on a conceptual basis only without approaching the insurance market......”. The letter

further stated that a meeting with the first respondent was requested for the same date, but that the second respondent was

informed that the first respondent was unavailable for such a meeting. The letter referred to information having been received from the first respondent the previous day, but pointed out that the information related to liability claims only and did not provide the information in respect of asset claims. It was stated that these were needed to provide a meaningful indication of the cost/remuneration of the second respondent. The letter contains the following sentence: “Also since the tender you have indicated that the basis of the programme has changed which will also have a meaningful effect on our remuneration model”. Other problems were pointed out on behalf of the second respondent. The second respondent adopted the view that the request in the letter was irregular and not permissible in view of the clear provisions of the tender. Basically the same problems were highlighted in the letter of the second respondent dated 13 March 2006. While it is argued on behalf of the applicant that these two letters constituted the withdrawal by the second respondent from the tender process, or indicated that his tender was not firm, that does not clearly appear to be the case. The second respondent had given a firm tender of R 4.5 million. Nowhere in the papers has the applicant attempted to deny this fact, or that the second respondent’s tender remained firm and open up to the point of the tender being considered by the Board of Control. Mr Louw conceded that he could not argue that the price of R 4.5 million did not remain firm throughout. In any event, it would have been silly for the first respondent to award a tender contract to a tenderer who had not tendered. The letters, referred to, appear to me to indicate that the “provisional” or “conceptual” nature of the tender meant that it was given on the assumption of the tender conditions remaining unchanged. What it intended to convey was that if the goal posts were moved, the tender might (or will) be affected. In respect of the allegation that the second respondent submitted a tender which was a “provisional one”, Mr Mchuba referred to the fixed amounts contained in its tender of R 4.5 million per annum. He says that it would not be open to the second respondent to increase that tended price, unless the first respondent decided not to avail itself of certain of the services offered, or if the second respondent were to be requested to render additional services, not required in the tender. In addition, Mr Hancock, in his affidavit in the urgent application, pointed out that the second and third respondents’ original tender did contain a pricing structure and that it would be incorrect to suggest otherwise. He stated that in the circumstances it was incorrect to suggest that the second respondent had not complied with the legitimate requests of the first respondent. He concluded:

“If the first respondent attempted to disqualify or exclude the second/third respondent from the tender process on the basis of its non compliance with this request, the second/third respondent would immediately have approached the Court to review and set aside such a decision, which application would, we have been advised, probably have been successful.”

In my view the qualification “provisional” or “conceptual” may well refer to other issues than that understood by Ms Lange. The obvious other possibility is that it referred to the fact that the tender was provisional upon the tender conditions not being changed. It appears to me that this statement goes no further than to say that if you alter your conditions of tender, it might conceivably affect our tender prices. This is confirmed, if regard is had to the affidavit of Mr Hancock, which was filed in the urgent application, where he stated:

“The second respondent’s tender document contained a fixed quote, which may have been adjusted, were the first respondent’s requirements to change.”

Ms Lange referred to the fact that the second respondent took the view that the request in the letter of 8 March 2006, was irregular. She referred to the fact that the second respondent’s representative complained about the time frame within which to provide the information requested and the fact that further information was needed in order to do so. All this is true. I fail to see how this has any relevance to the application. The only relevance it could have would be if it presented corroboration for the contention of the applicant that the second respondent withdrew from the tender process, which I have already found, the second respondent did not do. With reference to the request for quotes from underwriters in the letter of 8 March 2006, Mr Mchuba agrees with the second respondent that this constituted a new provision to the tender document. It was for that reason, as well as by reason of the complaints which had been made, that the request was waived. He points out that, seeing as the tender was awarded without any of the tenderers having submitted quotes as to the premiums which could be obtained, it should be blatantly clear to the applicant that the requirement had been waived.

As indicated, Mr Louw submitted that in the absence of an affidavit on behalf of the second respondent or on behalf of the Tender and Procurement Committee or the Board of Control, there is no first-hand evidence as to the true reasons for awarding of the tender to the second respondent before Court. In this respect it is important that the decision to award the tender to the second respondent was taken on 20 April 2006, that the applicant was notified of the decision on 25 April 2006, that by letter dated 4 May 2006, the applicant’s attorney of record requested reasons for the decision, and that by letter dated 16 May 2006, the attorneys of record of the first respondent gave reasons for the first respondent having awarded the tender to the second respondent. It is therefore clear on the papers, that this was the first formal request for reasons, directed to the first respondent and on that occasion the reason of the economic considerations in favour of the tender of the second respondent was given. What had gone before, does not detract from this. The fact that Mr Mchuba previously referred to the period of time in which the applicant had rendered the service and/or any other consideration mentioned by him, is, to my mind, irrelevant. The committees acted in an advisory capacity to the Board of Control. And it is the Board of Control which ratified (resolved to award) the tender to the second respondent. It was argued that the first respondent ought to have filed an affidavit, confirming the contents of the first respondent’s letter in which he gave reasons. I do not believe that this was necessary, in view of the acceptance by the applicant that this letter was indeed written, and its reliance on the contents thereof in order to advance its arguments. In any event, it was only in her replying affidavit that Ms Lange for the first time stated that Mr Mchuba is not a member of either the Tender and Procurement Committee or the Board of Control. It is noted that she does not state that he was not present at the relevant meetings, although Mr Louw did advance that argument. Consequently, she submits that Mr Mchuba’s evidence in respect of what transpired at the meetings of those bodies, constitutes hearsay evidence, and, presumably, should be ignored. In so far as it was suggested that the financial aspect of the tender of the second respondent was not part of the deliberations in considering the tenders, Mr Mchuba stressed that he was present both at the meetings of the Tender and Procurement Sub_Committee and the Tender and Procurement Committee, and he confirms the fact that the financial implications and the importance thereof, were in fact discussed. On the other hand, the applicant cannot say what was on the table and what was considered at the time of the award of the tender, but can only speculate on probabilities. I find that there are no probabilities which appear from the papers to lead me to conclude that the Board of Control did not consider the prices of the tenders. Moreover, I have referred to the important consideration of the tender price in the relevant legislature and the Procurement and Tender Policy of the first respondent. It is hardly believable that the first respondent would not have considered price in its decision to award the tender. After all, the tender of the second respondent was in fact approximately R 11 million less than that of the applicant. Mr Louw conceded that he could not argue the contrary. Had the first respondent not considered the fact that the second respondent’s quote was cheaper than that of the applicant, it would have been guilty of a serious dereliction of responsibility, and it would have acted ultra vires the provisions to which I have referred above. Mr Hancock in his affidavit in the urgent application stated the obvious when he said “the tender price is by far the most important scoring category and outweighs points that can be allocated for a tenderer’s BEE profile”.

Mr Mchuba pointed out in his affidavit that the first respondent is not obliged, nor entitled, to award the tender purely on the basis of Black Economic Empowerment (BEE) considerations. Points awarded in respect of BEE considerations, amount only to 20% of the total points. In the present case, says he, the difference between the preferential points score obtained by the applicant and second respondent was so small that it did not and could not, outweigh the financial benefits of the cheaper tender of the second respondent. In respect of the averment of the applicant that preference was to be given to the Small, Micro or Medium Enterprise (“SMME”) status of a tender, Mr Mchuba pointed out that in respect of the insurance brokering contract, where the financial status and stability of the intermediary is obviously of great concern, the first respondent did not consider it appropriate to favour a small or medium business enterprise. Furthermore it would have been improper for the first respondent to have taken the SMME status of a tender into account in the absence of any stipulation to that effect in the invitation to tender as being a relevant criterion. The criticism, raised by Ms Lange, that the applicant is a “Black Empowerment Company” and that the first respondent failed to take into account the applicant’s Black Economic Empowerment and SMME status, is effectively contradicted by what is stated above and on the papers. It is quite clear that these factors were taken into account and that the four tenderers basically scored equal points in this regard.

Ms Lange stated that the tender document stated that no late tenders would be admissible under any circumstances. She apparently considers tenders of the second respondent to have been late. If she considers the non-compliance with the requirements of the letter of 8 March 2006 as being tantamount to a “late tender”, I disagree with the contention, for the reasons already mentioned. There is no other indication on the papers which supports the allegation that the tender of the second respondent was late.

Ms Lange complained of the second respondent having received preferential treatment by the first respondent in view of the following:

- the first respondent allowed the second respondent to obtain further information in order for it to submit a further quote;

- in doing so the first respondent did not lay down the closing date for the submission of the further tender;

- the second respondent, as a result, was placed in a position of undue advantage over the applicant and the fourth and fifth respondents;

- the conduct of the first respondent shows bias in favour of the second respondent, alternatively a lack of fairness and transparency in that the alleged waiver was never communicated to the applicant.

What Ms Lange apparently loses sight of, is the fact that the applicant was in the privilege position of having had access to all the relevant information, due to it having been the first respondent’s broker. If there was any question of an unfair advantage, it certainly was not the second respondent, on these papers, who received the advantage, but rather the applicant. Furthermore, Mr Mchuba stated that when he had telephonic conversations with representatives of all the tenderers, the other three tenderers all objected to the applicant having enjoyed an unfair advantage, since the applicant already had the first respondents detailed claims history at his disposal. As the result, he convened a meeting of the four tenderers on 31 March 2006. He stated that at that meeting, the information which the second respondent asked for, the applicant agreed to provide, precisely as he, as the present broker, had access to the information. This was the very basis of the complaints of the applicant having an unfair advantage. The information had to be given to the second respondent in order to neutralise this unfair advantage which the applicant had enjoyed.

Ms Lange stated that it had come to her attention that during the course of the tender process the first respondent had acquired the shareholding of the third respondent. This statement later appeared to be incorrect. Mr Mchuba stated that at the time of the award of the tender to the second respondent, he was unaware of the second respondent having acquired the shares in the third respondent. He later became aware of this fact at a meeting held on 26 April 2006, when representatives of the second respondent advised him about it. He was assured that the black members of the third respondent would remain active in the management and board of directors. On 7 June 2006, the first respondent received notification of the said acquisition of shares. Mr Mchuba denies that the first respondent had misdirected itself. He states that even if the knowledge of acquisition of shares had been known to the first respondent at the time of the tender award, it would have had no bearing on the adjudication process. The true position therefore is that the second respondent, and not the first respondent, obtained the shareholding of the third respondent. It doesn’t seem to me as if anything turns on this point. After all, the situation precisely correlates to the relationship of the applicant and Dalys, from 2003 onwards. It is also a matter for comment that Mr Hancock referred to the acquisition of the shareholding by the second respondent in the third respondent, in his affidavit in the urgent application, which was incorporated by the applicant in these papers. This affidavit was filed before the replying affidavit of Ms Lange was filed, but in spite of that, Ms Lange makes no reference to it.

Ms Lange complained of the fact that the first respondent took into account in awarding the tender to the second respondent, that the latter could provide the service of claims management, while the applicant did not. She says that the applicant never regarded this to be part of the tender. She referred to the fact that the first respondent, in September 2005, advertised for tenders for claims management which would indicate that the first respondent did not regard claims management to be part of the tender. In the course of the criticism, Ms Lange, however, failed to deal with the objective fact that claims management was specified in the Conditions of Tender. In his answering affidavit on behalf of the first respondent, Mr Mchuba stated that it is incorrect to say that the components associated with a progressive self-insurance programme necessarily exclude claims management. Non constat that progressive self-insurance was also not specified as a requirement in the Conditions of Tender. While he agreed that until July 2006 this function had been outsourced to a third party, he stated that there was nothing, in principle, which would preclude a tenderer from also rendering this function. Mr Mchuba could have stated it more forcefully, in so far as the Conditions of Tender clearly invited tenders in respect of claims management. One is perplexed by the assertion of Ms Lange that claims management was not part of the Conditions of Tender. I did not, however, understand Mr Louw to persist with this point.

The issue concerning the insistence by the second respondent that the local South African market should be canvassed for quotations, raised by Mr Greene in his letter to which I have referred, and which is repeated by Ms Lange, is not also understood. In the Conditions of Tender specific reference was made to this very issue. In the first respondent’s Procurement & Tender Policy, specific provision is made for a policy to promote the utilisation of national, regional and local suppliers before considering overseas suppliers. However, because this aspect was not dealt with in argument, and apparently not pursued, I do not deal with it any further. I do not comprehend the significance of the attack in any event.

DISPUTE OF FACT:

The question which arises, is whether I can arrive at a final conclusion on the papers as they stand, including as they do,

disputes of fact, or whether I should recognise that the disputes of fact cannot be resolved on paper.

Rule 6(5)(g) of the Uniform Rules of Court provides:

"Where an application cannot properly be decided on affidavit the Court may dismiss the application or make such order, as to it seems meet with a view to ensuring a just and expeditious decision. In particular, but without affecting the generality of the aforegoing, it may direct that oral evidence be heard on specified issues with a view to resolving any dispute of fact and to that end may order any deponent to appear personally or grant leave for him or any other person to be subpoenaed to appear and be examined and cross_examined as a witness or it may refer the matter to trial with appropriate directions as to pleadings or definition of issues, or otherwise."

[Emphasis supplied.]

In Plascon_evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) per Corbett JA, Miller JA, Nicholas JA, Galgut AJA and Howard AJA, Corbett JA (as he then was) held at p634 E-635 C

“Secondly, the affidavits reveal certain disputes of fact. The appellant nevertheless sought a final interdict, together with ancillary relief, on the papers and without resort to oral evidence. In such a case the general rule was stated by VAN WYK J (with whom De Villiers JP and Rosenow J concurred) in Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E-G, to be:

"... where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant's affidavits justify such an order... Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted."

This rule has been referred to several times by this Court (see Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Green Point) (Pty) Ltd 1976 (2) SA 930 (A) at 938A _ B; Tamarillo (Pty) Ltd v B N Aitkin (Pty) Ltd 1982 (1) SA 398 (A) at 430 _ 1; Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd en Andere 1982 (3) SA 893 (A) at 923G _ 924D). It seems to me, however, that this formulation of the general rule, and particularly the second sentence thereof, requires some clarification and, perhaps, qualification. It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact (see in this regard Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163 _ 5; Da Mata v Otto NO 1972 (3) SA 858 (A) at 882D _ H). If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross_examination under Rule 6 (5) (g ) of the Uniform Rules of Court (cf Petersen v Cuthbert & Co Ltd 1945 AD 420 at 428; Room Hire case supra at 1164) and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks (see eg Rikhoto v East Rand Administration Board and Another 1983 (4) SA 278 (W) at 283E _ H). Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far_fetched or clearly untenable that the Court is justified in rejecting them merely on the papers (see the remarks of BOTHA AJA in the Associated South African Bakeries case, supra at 924A).”

In Sewmungal & Ano NN.O. v Regent Cinema,1977(1) SA 814(N), a decision of the Full Bench per Fannin Hoexter and Leon JJ, in which Leon J gave the decision of the Court, after referring to the Room Hire case, (Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163 _ 5) held at 819F:

"Despite the approach referred to above - which I have no doubt is the proper one - there has been a tendency in recent years for Courts to decide disputed questions of fact on the probabilities emerging from the affidavits without having any or any proper regard to the advantages of viva voce evidence Reed v Wittrup, 1962(4) SA 437(D), is an example of such a case. I suspect that this tendency owes its origin to the remarks of Preiss JP in Soffiantini v Mould, 1956(4)SA 150(E), where the learned Judge stated at p. 154 that:

'It is necessary to make a robust, common sense approach to a dispute on motion as otherwise the effective functioning of the Court can be hamstrung and circumvented by the most simple and blatant strategem. The Court must not hesitate to decide an issue of fact on affidavit merely because it may be difficult to do so. Justice can be defeated or seriously impeded and delayed by an over fastidious approach to a dispute raised in affidavits.'”

And at 820A the learned judge continued:

"The application of the so-called robust approach to a case involving bare denials cannot be criticised in any way. And there are no doubt other cases where the mere allegation of a dispute of fact is not conclusive of its existence for in every case the Court must examine the alleged dispute of fact and see whether in truth there is a real issue of fact which cannot be satisfactorily determined without the aid of oral evidence (Peterson v Cuthbert & Co Ltd, 1945 A.D. 420 at 428).

There may be cases where the correspondence is wholly inconsistent with a litigant's version or where that version is so inherently improbable that a Court will be able to assert with confidence that cross-examination will not disturb the balance of probabilities. The examples are not exhausted. Thus in Da Mata v Otto N.O., 1972(3) SA 858(AD) the Court was able to decide on the papers that there was no genuine dispute of fact which could not be resolved on the affidavit. But in that case the unsuccessful litigant had, in certain respects, contented himself with bold denials. Furthermore, certain conduct of his was found to be wholly inconsistent with the existence of an agreement upon which he relied.”

Although the situations referred to will mostly concern a respondent, the dictum equally applies to an applicant.

In review proceedings, referral to oral evidence is permissible. Rule 53 review proceedings are dealt with as applications, mutatis mutandis. Review proceedings will, however, not ordinarily be referred to oral evidence, but only in exceptional circumstances -

Johannesburg City Council V the Administrator, Transvaal, (1),1970(2) SA 89(T) at 93D-H per Marais J:

"The Rules are intended to assist a party who bona fide and reasonably believes that he has been wrong and not to hamper the quest for justice. The terms of Rule 6(g) are as explicit as can be. Where a dispute of fact cannot be resolved on affidavit, the Court should, if the application is not dismissed, adopt that procedure which is best calculated to ensure that justice is done with the least delay."

See, too: Hopf v Pretoria City Council,1947(2) SA 752 (T) and Daitsch & Ano v Osrin & ano (2), 1950(2) SA 343 (C).

In Cape Town Municipality & Ano v Bethnal Investments (Pty) Ltd & Ano; 1972(4) SA 153(C), Watermeyer J (as he then was) dealt with an application by the Municipality applying for the demolition of an unauthorised "structure" in terms of the Town Planning Scheme; at 171D:

"Whilst it must be conceded that it is an unusual course, it seems to me that there is no Rule of Law which prevents a Court in an appropriate case from allowing under Rule 6(5)(g) the cross-examination of the deponent to an affidavit, who is a member of such a body, with regard to the facts to which he has testified, in order to lay the foundation for an inference that the body did not properly apply its mind to the matter before it. It may well be that he cannot in Law be cross-examined as to the discussions which took place between the members of the body or the reasons which prompted them to come to their conclusions.”

It is clear from the tenor of the judgment, that Watermeyer J considered a referral to oral evidence in those circumstances, to be permissible, but only in exceptional or unusual circumstances.

There is also English authority for the proposition that review proceedings will only be referred to oral evidence in exceptional circumstances - R v Kent Justices ex Parte Smith,1928 Wn 137. In Regina v Stokesley Yorkshire Justices ex Parte Bartram, 1956 (1) AER 563 per Lord Goddard CJ:

"I do not want this to be thought to be an easy precedent. We allowed cross-examination in this case because it is a case of a very remarkable character."

See too: Khawaja v Secretary of State for Home Department,1983(1) AER 765 (HL) at 792D-F per Lord Bridge.

While it is true that the court should be slow to adjudicate upon probabilities on paper, it is equally true that probabilities may sometimes be so strong that a court can conclude that oral evidence will not disturb those probabilities.

In this respect, it is so completely improbable that the first respondent would not have taken serious note of the 75% difference in price of the tender of the applicant as opposed to that of the second respondent, that it does not seem to me to be a viable possibility. The Tender and Procurement Policy of the first despondent contains the following:

“Value for money is a key policy objective to ensure that, when purchasing goods and services, the SARCC achieves the best possible outcome for the amount of money spent.”

The argument presented on behalf of the applicant that the price difference was never what the first despondent took into consideration when deciding upon the tenders, and that it was only later thought of as an excuse by the first despondent, holds no water. The difference in price amounts to R11,110,015.00. Although the tender documents specified that the first respondent is not obliged to accept the lowest tender, it would, as stated, have constituted a gross dereliction of responsibility and duty, if the first respondent had not taken such a huge difference into consideration in its deliberations. In addition, the Preferential Procurement Policy Framework Act, which governed the present tender process, as pointed out earlier, provides that the lowest acceptable tender scores high points for price. Any other acceptable tenders which are higher in price must score fewer points, on a pro rata basis, calculated on their tender prices in relation to the lowest acceptable tender.

In Cash Paymaster Services (Pty) Ltd v Eastern Cape Province and Others 1999 (1) SA 324 (CkH), Pickard JP held at 350H:

“The very essence of tender procedures may well be described as a procedure intended to ensure that government, before it procures goods or services, or enters into contracts for the procurement thereof, is assured that a proper evaluation is done of what is available, at what price and whether or not that which is procured serves the purposes for which it is intended.”

Apart from the ground for review that the second respondent’s tender was not complete and in order, and that the second respondent ought to have been disqualified from the tender, and/or that the second respondent had withdrawn from the tender, and that the second respondent’s tender was provisional, it appears that the predominant ground upon which the applicant relies, is the allegation that the first respondent failed to award the tender to the applicant upon grounds which are irrelevant to the subject matter. This turns on statements contained in the report of the Tender and Procurement Sub_Committee namely that the applicant had been doing the brokerage for 14/15 years, and that second respondent “be afforded an opportunity to ensure participation of other BEE companies in the business.” The question which presents itself is whether this presents exceptional circumstances in the present review which could serve as a basis for a referral of issues to oral evidence. I do not believe that it does.

In her supplementary affidavit, Ms Lange referred to the report of the Cross Functional Sourcing Team to the Tender and Procurement Sub_Committee of 22 March 2006. In that report the applicant was recommended to be the successful tenderer. She points out that the Tender and Procurement Sub_Committee did not accept the report but raised certain concerns, which she tabulated. In respect of the Tender and Procurement Sub_Committee report to the Board of Control, dated 13 April 2006, it was recommended that the tender be awarded to the second respondent and not the applicant. She says that one is left in the dark as to why this change of heart came about, especially in view of the applicant’s attitude that the second respondent ought to have been disqualified by reason of its failure to supply the proposed basis of remuneration by the 13 March 2006 as was required in the letter of 8 March 2006. She points out that on 13 April 2006 the Board of Control did not accept the report, but instructed the Tender and Procurement Committee to consider certain matters, to wit:

- the inconsistencies in the said report;

- whether the procurement process was correct;

- whether the criteria were consistently applied to all the service providers.

Ms Lange drew attention to the fact that at the meeting of the Tender and Procurement Committee on 19 April 2006, it resolved that the recommendation of the Tender and Procurement Sub_Committee was not clear and precise and needed to be revised and a clear recommendation submitted the next day. However, says Mrs Lange, the report tabled the next day was identical to the previous report. Yet, on 20 April 2006 the Tender and Procurement Committee accepted the second report without comment or criticism as a “revised submission”, and submitted that report to the Board of Control on the 24 April 2006, which the latter accepted, on the strength of which the tender was awarded to the second respondent. I do not believe that these aspects give rise to any dispute arising on the papers, but if I am wrong in my view, I am of the opinion that such conflict does not constitute “a real dispute of fact”.

Mr Louw severely criticised what was said at various meetings of committees. I do not intend to do with all those criticisms. As I pointed out before, they were ranking committees clearly only having authority to investigate and recommend in the present tender process. Whatever their reasoning might have been, need not necessarily have been the reasoning of the Board of Control which ratified the acceptance of the tender of the second respondent. As is the position in all such instances, the decision making body may accept or reject recommendations made to it. There is nothing on the papers presently before me to indicate that the Tender and Procurement Committee was bound, firstly to follow all recommendations made to it by the Tender and Procurement Sub_Committee, and secondly, even if those recommendations were accepted, that they were necessarily accepted upon the grounds or motivation advanced, or the reasons considered by the Tender and Procurement Sub_Committee. The same applies to the Board of Control. No irregularity appears from what transpired in the present case. What is clear, is that there were changes of heart from time to time, but that does not constitute a reviewable irregularity. Such is the nature of a decision making process of committees, consisting of different members, that the final conclusion will almost never be reached at the inception of the

inquiries and investigations of the committees. Members will, in the normal course, come to certain preliminary conclusions which may be influenced by events or facts which either come to their detention later as a result of inquiries, or were not properly or at all, considered earlier. It appears to be that these points are merely technical in nature, and are devoid of substance. Again I cannot find that any of the above criticisms constitute “a real dispute of fact” on the papers.

Ms Lange stated, and Mr Louw argued, that because it is clear that the applicant was the alternative bidder for the tender, if the tender award to the second respondent is to be set aside, the court should order that the applicant be awarded the tender. She states that this is because, should the tender of the second respondent fall away, the same would follow as far as the third respondent is concerned. I do not believe that this is necessarily so. If the first respondent were to be ordered to reconsider the tenders, it may well again award the tender to the second respondent. However, in view of the conclusion to which I have come, it is unnecessary for me to deal with this argument.

Mr Vivian legitimately complained about new matter, contained in the replying affidavit of Ms Lange. I do not deal was all of those instances, save to point out that the allegation that Mr Mchuba was unable to make affidavit on behalf of the first respondent, was first mentioned in the replying affidavit. Previously his authority in this regard was never challenged. This also does not present “a real dispute of fact”, as Mr Mchuba clearly stated that he was present at the meetings and deliberations of the Tender and Procurement Committee, and the Board of Control. This statement is attacked by Ms Lange and Mr Louw in his argument with reference to the fact that Mr Mchuba was not a member of either. But he could have attended as a non-member. Again, I refer to the fact that his authority was never challenged by the applicant up to the time of the replying affidavit. No “real dispute of fact” arises in this regard either.

Mr Vivian, for the first respondent, has referred me to an unreported judgment in the Supreme Court of Appeal. It is one of the cases under case numbers 1891/06 and 2441/06, cited as the Minister of Social Development and others v Phoenix Cash & Carry-PMB CC, a judgment of the Supreme Court of Appeal, heard on 5 March 2007 and delivered on 26 March 2007, where Heher JA gave the judgment, concurred in by Scott, Cloete, Heher. Cachalia JJA and Theron AJA. I quote from the typed version of the judgment of Heher JA:

“[1] The award of public tenders is notoriously subject to influence and manipulation. Section 217( 1) of the Constitution requires an organ of state to contract for goods or services 'in accordance with a system which is fair, equitable, transparent, competitive and cost-effective'. These principles must inspire all aspects of the process which makes provision for the conclusion of such a contract. Pursuant to s217(3) of the Constitution the legislature passed the Preferential Procurement Policy Framework Act 5 of 2000 ('the PPPF Act') setting up the framework in which the preferential procurement goals identified in s217(2) must be implemented. This, in turn, depends upon the submission of an 'acceptable tender' which is defined in s1 of the Act as 'any tender which, in all respects, complies with the specifications and conditions of tender set out in the tender document'. Here also the principles of s217(3) apply to any process which makes provision for the conclusion of a contract flowing from the submission of an 'acceptable tender'. Unfortunately, as experience in this Court proves, the high standards that the Constitution sets seem to be more honoured in the breach than in the observance.

l2l Without attempting a comprehensive survey of the circumstances which will, offend against s217(1) certain general observations are demonstrated as true by the facts of the present case-

(1) a tender process which depends on uncertain criteria lends itself to exclusion of meritorious tenderers and is opposed to fairness among tenderers, and between tenderers and the public body which supposedly promotes the public weal;

(2) a process which lays undue emphasis on form at the expense of substance, facilitates corrupt practice by providing an excuse for avoiding the consideration of substance; it is inimical to fairness, competitiveness and cost effectiveness. By purporting to distinguish between tenderers on grounds of compliance or non-compliance with formality, transparency in adjudication becomes an artificial criterion. In saying this I do not suggest that the tender board is not entitled to prescribe formalities which, if not complied with, will render the bid invalid, provided both the prescripts and the consequences are made clear. What I am concerned to stress is the need to appreciate the difference between formal shortcomings which go to the heart of the process and the elevation of matters of subsidiary importance to a level which determines the fate of the tender.

It follows that a public tender process should be so interpreted and applied as to avoid both uncertainty and undue reliance on form, bearing in mind that the public interest is, after giving due weight to preferential points, best served by the selection of the tenderer who is best qualified by price.”

This dictum appears to be eminently applicable to the facts of the present application.

Having applied the financial considerations to which I have referred, in order to award the tender to the second respondent, and which could not be denied by the applicant, it cannot be contended in my view that the first respondent acted in any way which is reviewable by this court. Nor does it require oral evidence to come to that conclusion, in view of the fact that it was conceded by Mr Louw that the applicant possesses of no evidence to the contrary.

Other than that, the applicant’s assertion that claims management was never part of the tender, is patently wrong. Moreover, I find that the criticisms leveled by the applicant at the first respondent as to its decision-making process, are unfounded. They are disputed by the first respondent as well as by the second respondent in the urgent application, which papers have been incorporated into this application by the applicant, and the contentions of the applicant are not supported by the documentation or the objective probabilities in the case. This also does not give rise to a real dispute of fact on the papers.

Mr Louw has taken a number of other points of a technical nature. One of which was argument that, because the applicant was not notified of the withdrawal of the requirements stated in the letter of the first respondent dated 8 March 2006, the first respondent breached his duty to ensure an open and fair process. I do not deal with those points, as I do not consider them to have any merit. In general, the attacks upon the tender process are based on bald statements, without substance. I find that all of those attacks are unfounded in fact as well as in law. They do not, in my view, constitute a real dispute of fact.

In my view, no real dispute of fact arises in any of the main arguments, presented on behalf of the applicant.

Mr Louw was unable to identify any exceptional circumstances which would justify any of the disputes to be referred to oral evidence. Nor am I able to identify any. Mr Louw in fact submitted that the disputes of fact were such that I should see my way clear to dispose of the matter on the papers. I agree.

While I appreciate the effort made by both counsel with their heads of argument, in view of my findings in the present application, I find it unnecessary to deal in detail with the authorities quoted by them. None of the authorities quoted appear to me to militate against any of the conclusions at which I have arrived.

I make the following orders:

The orders made by Bertelsmann J in the urgent application on 23 May 2006, are discharged, except that the cost orders which were made, remain intact. The review application is dismissed with costs. ....................................... Per: Louis Visser, AJ May 2007.

The orders made by Bertelsmann J in the urgent application on 23 May 2006, are discharged, except that the cost orders which were made, remain intact.

The review application is dismissed with costs.

.......................................

Per: Louis Visser, AJ

May 2007.