Belrex 528 CC v Chairperson, Cape Town Regional Bid Adjudication Committee and Others (39549/2016) [2017] ZAGPPHC 613 (27 September 2017)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 39549/2016

Reportable

Of interest to other judges

Revised.

27 September 2017

In the matter between

BELREX 528 CC Applicant

and

CHAIRPERSON, CAPE TOWN REGIONAL First Respondent

BID ADJUDICATION COMMITTEE

DIRECTOR-GENERAL,

DEPARTMENT OF PUBLIC WORKS Second Respondent

MINISTER OF PUBLIC WORKS Third Respondent

TR MECGHANICALS 786 CC Fourth Respondent

FENCE IT Fifth Respondent

HYMAN MASTERFENCE JV NAMIC WC Sixth Respondent

AMABAMBA FENCING (PTY) LTD Seventh Respondent

SA FENCE & GATE (PTY) LTD Eighth Respondent

GORDIAN FENCE SA (PTY) LTD Ninth Respondent

SPINKS TRADING CC Tenth Respondent

SHARON ROSE TRADING CC Eleventh Respondent

ABUREC FENCING Twelfth Respondent

NEDSTEEL Thirteenth Respondent

JIST TRADING Fourteenth Respondent

GATEWAY METALWORKS CC Fifteenth Respondent

JUDGMENT

MADIMA, AJ

[1] At its simplest, the dispute between the applicant on the one hand, the first, second and third respondent ("the respondents")

on the other, arises from a missing signature on a tender bid document. The respondents contend that the missing signature rendered

the whole of applicant's bid, non-responsive. Despite winning favor with the Bid Evaluation Committee and the Bid Adjudication Committee of the respondents, the resolution to award the tender to the applicant was rescinded. It is that decision to rescind, that applicant seeks reviewed and set aside.

[2] The fourth to the fifteenth respondent do not oppose this application. Only the twelfth respondent is mentioned in the answering affidavit. Not much turns on that reference. I shall return to deal with the twelfth respondent presently.

[3] The respondents have also counter-applied. They require me to consider their application only in the event that I uphold the

applicant's review application. I deal with the counter-application towards the end of this judgment.

Background

[4] On 16 February 2016 the first respondent's Regional Bid Adjudicating Committee ("RBAC") resolved to award a tender to the applicant. The latter's elation was short-lived.

[5] On 15 March 2016, following what it described as oral legal advice, the RBAC rescinded its decision of 16 February 2016. The reason for the reversal of applicant's good fortune was solely on the basis of the missing signature referred to above. The RBAC asserts that once the issue of the missing signature was brought to its attention, it had to act in the manner it did.

[6] The respondents conceded however that, but for the missing signature, the decision to rescind would not have been made, and the award to applicant would have stood. Apart from the above contention of the respondents, the parties have common cause on almost all of the other issues.

Did the respondents have a choice?

[7] Before me is a narrow point of law. The question is whether the respondent(s) have the discretion to condone the signature requirement of the bid? I wonder loudly if this is not one of those matters of form over substance. The applicant for its part maintains

throughout that the Standard Conditions of Tender afforded the RBAC the discretion to allow for the missing signature to be provided.

[8] Clause F.2.14 of the Standard Conditions of Tender deals with a bidder's obligation(s). In relevant parts it provides that bidder(s)

"...Accept that tender offers, which do not provide all of the data or information requested completely and in the form required, may be regarded by the employer as non-responsive". This then must naturally follow that a bidder accepts that if he does not provide "...all of the data or information requested completely and in the form required ", his bid could be treated by the employer as non-responsive. The use of the word "may" in Clause F.2.14 is indicative of a discretion on the part of the respondent with regard to the responsiveness or other- wise of a bid (my emphasis).

[9] The applicant referred to the deliberate us of language in Clause F.2.13.9 which precedes Clause F.2.14 in the Standard Conditions of Tender. The former provides that bidder(s)" ...Accept that tender offers submitted by facsimile or e-mail will be rejected by the employer, unless stated otherwise in the tender data". The applicant sub- mitted that the courts recognize that in the absence of a clear legislative intention to the contrary, a particular word should bear the same meaning whenever used in a statute. Head of Department, Mpumalanga Department of Education and Another v Hoerskool Ermelo and Another 2010 (2) SA 415 (CC) at para 70. Further, so submitted the applicant, a deliberate choice of different words in clauses in close proximity to each other can only mean, absent exceptional circumstances, that different meanings were intended. In this instance, where the one clause uses the phrase " ...will be rejected' ', and another using "...may be regarded ....as non-responsive", the latter cannot be read as granting anything other than a discretionary power (my emphasis).

[10] There can be no reason the employer uses the words "...may be regarded by the employer as non-responsive " and "...will be regarded by the employer as non-responsive or will be rejected ..." in the same document, albeit in separate clauses , if it did not intend the one to be discretionary and the other peremptory.

[11] In WDR Earthmoving Enterprises CC v Joe Gqabi District Municipality [2017] ZAECGHC 45 a similar distinction was drawn between Clause F.2.14 of the Standard Conditions of Tender on the one hand, and Clause F.2.14 of the relevant Tender Data Document on the other. The document issued by the municipality as part of the invitation to bid reads thus "....that failure on the part of the Tenderer to submit any one of the Returnable Documents listed in F.2.23 shall result in a tender offer being regarded as non-responsive". Plasket J, writing for a plural court, explained that "Clause F.2. 14 of the Standard Conditions of Tender" required that every tenderer accepted that bids that do not provide all the data or information requested completely and in the form required may be regarded by the employer as non-responsive. Clause F.2. 14 of the Tender Data adds to this. It requires a tenderer, in addition, to accept that failure on its part to submit any one of the Returnable Documents listed in F.2.23 shall result in a tender offer being regarded as non-responsive".

[12] The applicant's further submission was that the RBAC was not required to rescind its 16 February 2016 decision given that it had a discretion not to do so. This is because of the language employed in Clause F.2.14, affording the employer the discretion to condone the non-compliance with the signature requirement. The RBAC could still have called for the missing signature to be provided without affecting the validity of the bid. This view has Minister of Environmental Affairs and Tourism and Others v Pepper Bay Fishing (Pty) Ltd 2004 (1) SA 308 (SCA}, para 31, as authority. Here the Court held that " ...an administrative body ...will have a power to condone non­ compliance...if it has been afforded the discretion to do so".

[13] The further submission by the applicant was that Clause F.3.8.2 of the Standard Conditions of Tender contemplated a tender offer being capable of being corrected to ensure full compliance with all tender requirements. This is acceptable in circumstances where a deviation(s) and/or qualification(s) being corrected are not material. Clause F.3.8.2 provides thus "....a responsive tender is one that conforms to all the terms, conditions, and specifications of the tender documents without material deviation or qualification. A material deviation or qualification is one which, in the Employer's opinion, would (a) detrimentally affect the scope, quality, or performance of the works, services or supply identified in the Scope of Works, (b) significantly change the Employer's or the tenderer's risks and responsibilities under the contract, or (c) affect the competitive position of other tenderers presenting responsive tenders, if it were to be rectified. In addition, Clause F.3.8.2, states that the employer will "reject a non-responsive tender offer, and not allow it to be subsequently made responsive by correction or withdrawal of the non-conforming deviation or reservation." The language employed in Clause F.3.8.2 is clear enough and contemplates a discretionary correction.

[14] The respondents' retort in this regard was that the test to determine whether a test is responsive only applies to Clause F.3.8.1(c) and not to Clauses F.3.8.1(a) and F.3.8.1 (b). The respondents' position would seem to be that a bid ought to be disqualified irrespective of the nature or extent of non-compliance with the requirements of the Standard Conditions of Tender and in circumstances where there is any failure properly and fully to complete or sign a returnable document. This position seems to be at odds with the language employed in Clause F.3.8.2. Instructively, the respondent(s) has shied away from dealing with the "will and may" use of language in the Standard Conditions of Tender. This they did not, in the answering affidavit, and not in the heads of argument.

[15] An apt and comparable case is Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA). Here, the appellant's tender had been disqualified on the basis of the declaration of interest having been submitted without a signature.

The court held that "The defect relied on by the tender committee in this case is the appellant's failure to sign a duly completed form, in circumstances where it is clear that the failure was occasioned by an oversight'. The court went on and explained the meaning of an acceptable tender and stated that "....in determining whether this non-compliance rendered the appellant's tender unacceptable, regard must also be had to the purpose of the declaration of interest in relation to the tender process in question".

[16] The court went on and held that "Conditions such as the one relied on by the tender committee should not be mechanically applied with no regard to a tenderer's constitutional rights. By insisting on disqualifying the appellant's tender for an innocent omission, the tender committee acted unreasonably. Its decision in this regard was based on the committee's error in thinking that the omission amounted to a failure to comply with a condition envisaged in the Preferential Procurement Act. Consequently, its decision was materially influenced by an error of law contemplated in s 6(2)(d) of the Promotion of Administrative Justice Act 3 of 2000 ("PAJA'?, one of the grounds of review relied on by the appellant. Therefore, the tender process followed by the department was inconsistent with PAJA".

[17] There is an uncanny similarity between the missing signature on Form PA-15.1 in the Millennium case, supra, and the missing signature in the instant proceedings. To cure that omission, all the respondents needed to do was allow the applicant to provide it. The RBAC, by rescinding its 16 February 2016 decision, acted unreasonably and without regard to the constitutional rights of the applicant. The failure to sign a duly completed form was held by the Court in Millennium, to have been an oversight. I have no reason to believe otherwise is the case in the instant matter.

[18] The respondent sought to compare the instant proceedings with that of the Dr J.S Moroka Municipality and Others v Betram (Pty) Ltd and Another [2014] 1 All SA 545 (SCA). In that matter, the unsuccessful tenderer's bid was not considered because a copy of its tax certificate had been submitted, rather than the original. The tenderer's contention was that the Municipality ought to have condoned this non-compliance. The Court held that "...a failure to comply with prescribed conditions will result in a tender being disqualified as an acceptable tender under the Procurement Act unless those conditions are immaterial, unreasonable or unconstitutional".

[19] The respondents fail on all three of the conditions mentioned in Dr J. S Moroka Municipality, supra. The tenderer's bid in Dr J.S Moroka Municipality case was disqualified because of something that cannot be regarded as an innocent omission or over- sight. When the tenderer attached a copy of its tax certificate it was aware that the original was a requirement. The tenderer acted willfully in that case. It was not a mistake. The Court correctly found that the omission was material and could not be condoned. In the Millennium case, supra, the Court found that the missing signature on a declaration of interest form was not material, and correctly so. In

the instant proceedings the missing signature of the director of applicant cannot be regarded as material. No harm could be visited on any of the respondents if the non-compliance was condoned. Indeed the respondents state that but for the missing signature, the applicant's award would have stood.

Grounds of review

[20] The applicant advances the following four grounds of the review of the impugned decision ("the decision"):

20.1. the decision was unlawful because it was irrational and/or unreasonable.

20.2 the decision was unlawful because the RBAC had no legal authority to make it for the reasons advanced

20.3. the RBAC did not have the authority to rescind its prior approval of the bid at the time that it did; and

20.4. the applicant's bid was disqualified in a manner that was procedurally irrational and unfair

[21] Ideal briefly with these grounds in turn. Our law requires, no, demands, that the process by which a decision is made and the

decision itself, be rational. In this case, was the RBAC's decision of reversal of the award to applicant irrational, unreasonable or both? It is a trite principle of our law that the consequences of the doctrine of legality is that the exercise of public power must always be rational. Minister of Defense and Military Veterans v Motau and Others 2014 (5) SA 69 (CC), para 69, Democratic Alliance v President of the Republic of South Africa and Others 2013 (1) SA 248 (CC}, para 34. The sole reason for the rescission of its February 2016 decision proffered by the respondent(s) , was that the third respondent did not have an option but to disqualify applicant's bid, as "...the absence of the required signature ....constituted a material omission".

[22] The applicant submitted that the respondent was not required to disqualify the applicant even in the event it was entitled to do so. Clause F.2.14 of the Standard Conditions of Tender affords the third respondent a discretion to consider as respon- sive a bid that does " ...not provide all the data or information requested completely and in the form required". The respondent appears to have proceeded on the basis that it had no choice in the matter. That approach is wrong in law. It closed the respondents' minds to any other option available to them.

[23] The second ground of review is that the RBAC had no legal authority to make the impugned decision. The applicant submitted that a "defect” such as the missing signature does not rise to the level of a "material deviation or qualification" that would render the tender offer non-responsive. The missing signature does not, submitted the applicant "....detrimentally affect the scope, quality, or performance of the works, ser­ vices or supply identified in the Scope of Work'' contemplated in Clause F.3.8.2(a). Further the "defect” does not "significantly change the third [DPW 's] or applicant 's risks and responsibilities under the contract under the contract” envisaged in Clause F3.8.2(b). Similarly the missing signature does not "affect the competitive position of other tenderers presenting responsive tenders, if it were to be ratified' in terms of Clause F.3.2(c).

[24] The respondents' submission in their heads of argument, and not in the answering affidavit was inter alia, that if Clause F.3.8.2 applied to Clause F.3.8.1, then the missing signature in the bid constituted a material deviation and would " ...affect the competitive position of other tenderers presenting responsive tenders, if it were to be ratified". I should not be dealing with this "defence". It is not in the pleadings. I dismiss it on the added basis that it was not a consideration raised by the respondents when they withdrew the award.

[25] The third ground of review is that the RBAC did not have the authority to rescind its prior approval at the time it did, as it was already functus officio. The applicant con- tends that one, Mr Springfield ("Springfield"), whose authority is disputed by the respondents, informed the applicant that it had been awarded the tender. The nub of the applicant's submission in this regard is that even on the assumption

that Springfied had no authority to act in the manner he did, the RBAC's first decision, to award, was conveyed to the applicant before the impugned decision was taken. This made the RBAC's decision final.

[26] I turn to deal with the authority of Springfield. The applicant was required to communicate only with Springfield in terms of the tender conditions. He alone therefore had the authority to keep applicant informed about the evaluation and adjudication of its bid. Springfield informed the applicant during October 2015 that it had scored the highest points. There is no doubt that Springfield was the applicant's contact person in the department. He had the requisite authority to communicate the outcome of the RBAC findings to the applicant at the time and manner he did. It does not avail the respondent(s) to distance themselves from Springfield. It is a tad too late.

[27] The court citing with approval Hoexter C, Administrative Law in South Africa (Juta & Co, Cape Town, 2012), at page 278, in MEG for Health, Eastern Cape, V Kirland Investments (Pty) Ltd t/a Eye and Laser Institute 2014 (3) SA 219 (SCA) at para 15 stated that "In general, the functus officio doctrine applies only to final decisions, so that a decision is revocable before it becomes final. Finality is a point arrived at when the decision is published, announced or otherwise conveyed to those affected by if' . The decision-maker may also be functus officio even in the absence of the required formalities. Premier, Eastern Cape and Others v Ntlamo and Others 2015 (6) SA 400 (ECB), at para 62.

[28] Even in the event that the RBAC does not have the final say in the perking order of approvals, for example, where the Accounting Officer must still sign on the dotted line' the RBAC cannot reverse its own decision once made. Once made, the maker is bound by the decision.

[29] The final ground of review is that the applicant's bid was disqualified in a manner that was procedurally irrational and unfair.

The Court in Democratic Alliance v President of the Republic of South Africa 2013 (1) SA 248 (CC) at para 34, held that " The conclusion that the process must also be rational in that it must be rationally related to the achievement of the purpose for which the power is conferred, is inescapable and an inevitable consequence of the understanding that rationality review is an evaluation of the relationship between means and ends. The means for achieving the purpose for which the power was conferred must include everything that is done to achieve the purpose. Not only the decision employed to achieve the purpose, but also everything done in the process of taking that decision, constitutes means towards the attainment of the purpose for which the power was conferred".

[30] The applicant laments the fact that it was not afforded the opportunity to be heard on the nature of the failure and to submit a duly signed resolution. There is little doubt that the unsigned resolution of the Board of applicant constitutes a minor defect which can and should have been cured. The respondent(s) erred in treating the lack of the signature as material.

[30] I do not impute any kind of malice on the part of the respondent(s). The fact that they have not appointed any other service provider in the stead of the applicant is indicative of their bona tides. The only loser in the whole debacle is service delivery to the residence affected thereby. I hope that the respondent shall move with the requisite haste to ensure that the tender is issued and the project is commenced without further delay.

The counter-application

[31] The respondents require that I entertain their counter-application In the event I were to uphold the applicant's review application on the basis that " ....the respondent was already functus officio when it made the impugned decision". This much the respondents make clear in their heads of argument. The respondent(s) are seriously out of time for their review counter-application. Section 7(1)(b) provides that proceedings be "instituted without unreasonable delay and not later than 180 days after the date ... on which the person concerned was informed of the administrative action, became aware of the action and the reason for it or might reasonably have been expected to have become aware of the action and the reasons." This counter-application ought to have been launched at the very least by 16 August 2016.

[32] Be that as it may, the respondents submit in the alternative, that their decision to award the tender to the applicant was unlawful. The unlawfulness arises from the fact that applicants bid was incomplete and ought to have been disqualified at an earlier stage. The award to the applicant has thus resulted in an unfairness, particularly to the twelfth respondent. I have already dealt with the sentiments of the twelfth respondent regarding the review application. It does not oppose it. I must also state that the twelfth respondent's bid was disqualified for reasons that are not related to those of applicant. In other words, even if the applicant had not sought to bring its application, the twelfth respondent would not have benefitted therefrom.

[33] The respondents offer no explanation for the delay in bringing the counter-application . They have been aware since 23 March 2016 that the RBAC has made the impugned decision. The applicant's review application was served on the respondents on 20 May 2016. The respondents remained mute until 26 September 2016 when they filed a conditional counter application.

[34] The law is settled regarding the explanation required of a party seeking an ex- tension of time, or condonation thereof. In Camps Bay Ratepayers ' and Residents ' Association v Harrison [2010] ZASCA, 3 Maya JA as she then was states thus "Section 9(2) however allows the extension of these time frames where the interests of justice so require'. And the question whether the interests of justice require the grant of such extension depends on the facts and circumstances of each case: the party seeking it must furnish a full and reasonable explanation for the delay which covers the entire duration thereof and relevant factors include the nature of the relief sought, the extent and cause of the delay, its effect on the administration of justice and other litigants, the importance of the issue to be raised in the intended proceedings and the prospects of success".

[35] The respondent(s) do not take the court in their confidence and explain in detail the reasons for the delay. Condonation is simply not just there for the asking... and .... the taking. The applicant for condonation must say why their application was not on time. The explanation must provide credible reasons. This is very important. The Court must be satisfied that the applicant had little or no choice in the delay. Once past that huddle, the applicant must also demonstrate that it has an even or slightly more than an even chance of succeeding in its application or action. Any standard short of that will not do.

[36] The Court, in the exercise of its inherent judicial discretion will consider all the necessary facts, and look into the issues of fairness on the side of both the applicant and respondents. In United Plant Hire (Pty) Ltd v Hills 1976(1) SA 717 at 720 E-G, the Court held that "[l]t is well settled that, in considering application for condonation, the court has a discretion, to be exercised judicially upon a consideration of all the facts, and that in essence it is a question of fairness to both sides. In this enquiry, relevant considerations may include the degree of non-compliance with the rules, the explanation thereof, the prospects of success on appeal, the importance of the case, the respondent's interest in the finality of the judgment , the convenience of the court, and the avoidance of unnecessary delay in the administration of justice . The list is not exhaustive. These factors are not individually decisive but are interrelated and must be weighed one against the other, thus a slight delay and a good explanation may help to compensate for prospects of success which are not strong".

[37] The respondent(s) have fallen short in all of the criteria for condonation set out by the Courts over time. The reasons for the considerable delay have not been explained to the satisfaction of the Court. Erasmus: Superior Court Practice at B 1 : 359 – 360. Indeed the respondent have not been able to explain away the inordinate time it took them to bring their application.

[38] I thank counsel for the comprehensive heads of argument. They have greatly assisted me in writing this judgment. I further thank them for the professional manner in which they made their submissions.

[39] Having said all of that, I make the following order:

1. The application succeeds.

2. The decision of the RBAC of 15 March 2016 is reviewed and set aside.

3. The third respondent is ordered to award the tender to the applicant, and to do all things necessary to give effect to this order.

4. The third respondent to re-adjust the tender amount taking into account the rise in costs occasioned by the 18 months delay from date of award to date of this order.

5. The counter application is dismissed.

6. The third respondent to pay the costs of the applicant on a scale as be­ tween party and party.

__________________

T.S MADIMA

ACTING JUDGE OF THE HIGH COURT

On behalf of the Applicant: Adv J Berger

Instructed by: A Duplessis Attorneys

Pretoria

Tel: 012 42 4890/011 455-4339

On behalf of the 1st to 3rd Respondents: Adv S Yaccob

Instructed by: State Attorney

Cape Town I Pretoria

012 309-1662

Dates of Hearing: 10 August 2017

Date of Judgment: 27 September 2017