Digital Horizons (Pty) Ltd v SA Broadcasting Corporation and Another (2008/19224) [2008] ZAGPHC 272 (8 September 2008)

IN THE HIGH COURT OF SOUTH AFRICA

WITWATERSRAND LOCAL DIVISION

In the matter between ~ Case No.: 2008/19224

DIGITAL HORIZONS (PTY) LTD APPLICANT

and

SA BROADCASTING CORPORATION FIRST RESPONDENT

SONY SOUTH AFRICA (PTY) LTD SECOND RESPONDENT

______________________________________________________________

JUDGMENT

Interim interdict – balance of convenience – award of tender not to preferred tender – court not setting award aside

MALAN J:

[1] This application for an order in terms of Part A of the notice of motion in which the applicant seeks interim relief pending the final determination of Part B. In Part B of this application, the applicant seeks an order, amongst others, that the first respondent’s decision to award tender SGE/07/15 (‘the tender’) to the second respondent be reviewed and set aside and that the first respondent be interdicted and restrained from giving effect or implementing its decision to award the tender to the second respondent. The applicant has indicated that it is not proceeding with prayer 7 in Part B that the tender be awarded to the applicant.

[2] The tender relates to the supply to the first respondent of 4 high density outside broadcast vehicles together with cameras and related equipment. When the matter was called on 22 July 2008 the respondents had not concluded a contract but in affidavits deposed to on behalf of the respondents and delivered on 27 August 2008, it is alleged that an agreement the conclusion of which is sought to be interdicted in Part A of the notice of motion was concluded on 12 August 2008. In view of the alleged conclusion of the agreement between the respondents, the applicant now seeks the relief contemplated in subparagraph 2.3 of Part A of the notice of motion ie that the respondent be interdicted and restrained from implementing the agreement pending finalization of Part B of the notice of motion.

[3] The applicant and the second respondent submitted tenders to the first respondent for the supply of the 4 HD Outside Broadcast vehicles. Both the applicant and the second respondent were short-listed by the first respondent as potential suppliers. Pursuant to being short-listed, the applicant and the second respondent were invited to make presentations to the first respondent on various aspects of the tender. The first respondent awarded the tender to the second respondent. The respondents now allege that they have concluded an agreement setting out the terms and conditions on which the first respondent’s decision to award the tender to the second respondent will be implemented. The first respondent contends that the decision sought to be reviewed and set aside has an impact on its capacity to broadcast two major soccer competitions ie the Confederation Cup to be held in 2009 and the Soccer World Cup to be held in 2010.

[4] In terms of s 217 of the Constitution of the Republic of South Africa Act 108 of 1996, the first respondent is required to procure goods and services pursuant to a process which is fair, equitable, transparent, competitive and cost effective. A tender process by the government or an organ of state is subject to the provisions of s 33 of the Constitution and as a result also subject to the provisions of the Promotion of Administrative Justice Act 3 of 2000.1 The evaluation of the tender is thus subject to the requirements of lawful and procedurally fair administrative action including the principle of legalilty.2 In terms of s 8(1)(e) PAJA, a court has the powers to grant the interim relief sought in Part A of this application.3 It provides:

‘The Court or tribunal, in proceedings for judicial review in terms of section 6(1), may grant an order that is just and equitable, including an order granting a temporary interdict or other temporary relief.’

[5] Blieden J remarked in the still unreported judgment of The New Reclamation Group (Pty) Limited v Eskom Holdings Limited and Kwanda Ferro-Alloy African Resources (Pty) Ltd4 that

‘the overriding consideration that applies to every tender is that of fairness … The fair procedure is not a matter of secondary importance; it goes to the very heart of the administrative process.’

In Logbro Properties CC v Bedderson NO and Others5 reference was made to the ‘ever flexible duty’ to act fairly. In Metro Projects CC v Klerksdorp Local Municipality6 it was said with reference to this duty:

‘Fairness must be decided on the circumstances of each case. It may in given circumstances be fair to ask a tenderer to explain an ambiguity in its tender; it may be fair to allow a tenderer to correct an obvious mistake; it may be fair to ask for clarification or details required for its proper evaluation. Whatever is done may not cause the process to lose the attribute of fairness or, in the local government sphere, the attributes of transparency, competitiveness and cost-effectiveness.’

[6] In terms of its own procurement policy, the first respondent is required to procure goods and services from enterprises with a Level 1 to 5 B-BBEE rating. This implies that the entities from which the first respondent is required to procure must have a significant shareholder ownership by black individuals. The second respondent has no B-BBEE rating and did not have it when the first respondent decided to award the tender to it. The whole of the second respondent’s issued share capital is held by Sony Japan the share capital of which is not held by black South Africans. The applicant has a Level 4 B-BBEE rating.

[7] In Fedsure Life Assurance v Worldwide African Investment Holdings (Pty) Ltd and Others 7 Cloete J stated the requirements for an interim interdict:

‘Where the right asserted on the strength of which an interim interdict is sought is not clear, the position is as follows according to Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton, and Another 1973 (3) SA 685 (A) at 691C-G:

“The granting of an interim interdict pending an action is an extraordinary remedy within the discretion of the Court. Where the right which it is sought to protect is not clear, the Court’s approach in the matter of an interim interdict was lucidly laid down by Innes JA in Setlogelo v Setlogelo 1914 AD 221 at 227. In general the requisites are –

a clear right which, ‘though prima facie established, is open to some doubt’;

a well grounded apprehension of irreparable injury;

the absence of ordinary remedy.

In exercising its discretion the Court weighs, inter alia, the prejudice to the applicant, if the interdict is withheld, against the prejudice to the respondent if it is granted. This is sometimes called the balance of convenience.

The foregoing considerations are not individually decisive, but are interrelated, for example, the stronger the applicant’s prospects of success the less his need to rely on prejudice to himself. Conversely, the more the element of ‘some doubt’, the greater the need for the other factors to favour him. The Court considers the affidavits as a whole, and the interrelation of the foregoing considerations, according to the facts and probabilities …”’

[8] Section 8(1)(c)(ii)(bb) PAJA provides that a court may only in exceptional cases award compensation.8 A claim in delict based on negligence against the first respondent would seem to be excluded.9 Where fraud is involved the position may be different.10 The applicant contends that it does not have another satisfactory remedy and this may very well be the position: there is no suggestion that the employees of the first respondent were acting in a fraudulent manner or that they were negligent. On the contrary, the impression I have is that the Board of the first respondent was, in view of the magnitude of the expenditure and the urgency of the matter, very concerned and in good faith referred the matter to the ad hoc committee for finalisation. But apart from this, it seems to me that, although the applicant may have had an expectation that the tender would be awarded to it, this was no legitimate expectation entitling it to relief in the form of a claim for damages should it not be awarded the tender.11

[9] The applicant contends that it will suffer irreparable harm if the Respondents are not interdicted and restrained from implementing the decision sought to be reviewed and set aside pending the final determination of Part B of the application: once the decision is implemented, no purpose would be served by reviewing and setting it aside; the first respondent would most probably at that time have received the HD Outside Broadcast Vehicles tendered for.

[10] The decision to award the tender to the second respondent was taken not by the Board of the first respondent but by an ad hoc committee appointed by it. The Board resolved on 25 March 2008 that the Procurement Committee had to meet to address matters raised at their meeting:

‘Once the Procurement committee has considered the matter, it should submit its recommendations to an ad hoc committee consisting of the Chairpersons of the Board, the Finance committee and the Procurement committees. This ad hoc committee will consider the matter and the recommendations of the Procurement committee and make a final decision on the matter.’

The Procurement Committee met on 7 April 2008 and reported that the procurement process and procedure were followed and recommended the adoption of the business plan subject to certain conditions relating mostly to the applicant’s tender but also to all three short-listed companies. The ad hoc committee met on 21 April 2008 (apparently not on 18 April 2008, the date reflected on the minutes) and awarded the tender to Sony South Africa, the second respondent.

[11] On behalf of the applicant it was submitted that the first respondent did not produce any evidence to establish that it was competent for the Board to delegate such a discretionary power. The effect of this, it was argued, is that the decision to award the tender to the second respondent was not taken by an authorized body rendering it reviewable in terms of s 6(2)(a) PAJA. I do not agree. Not only does the Broadcasting Act 4 of 1999 provide for the conversion of the old South African Broadcasting Corporation established under Act 73 of 1976 into a public company (s 8A(1) but it also invests the Board with the control of the affairs of the SABC (s 13(11)). In addition, the Articles of Association enable the Board to delegate its powers:

‘14.1.1 The management of the business and control of the Corporation shall be vested in the directors, who, in addition to, and without limitation of the powers expressly conferred upon them by the Broadcasting Act or these Articles, may exercise or delegate to any one or more persons all such power.

14.1.2 The Board may exercise or delegate the exercise of its powers as contained in the Broadcasting Act or the IBA Act to any one or more persons unless expressly prohibited from doing so by the Statutes, or by these Articles. The Directors shall at all times ensure that any decision taken and any exercise of management powers is not inconsistent with the Statutes or the Articles; and complies with the Statutes or any resolution passed by a General Meeting.’

[12] I am aware of the provisions of the ‘Delegation of Authority Framework’ contained in the first respondent’s ‘Group Supply Management & Preferential Procurement Policy’ document. This document is intended to provide for all of the SABC’s procurement activities (clause 1.2.3) and provides for a complex system of delegation of authority and the creation of a hierarchy of committees to evaluate and award tenders or bids. The document is, however, not intended to limit the authority of the Board in any way. Any changes to it must be approved by the Board (clause 1.3.5) and the Board expressly retains the power ‘to confirm, vary or revoke and decision taken in consequence of a delegation …’

(clause 5.1.3). The Board indeed awards ‘all bids not delegated’ (clause 6.13.1). The document thus provides for

the delegation of authority ‘downwards’ but contains no restriction on the Boards own statutory powers and those contained in the Articles. The Board, it follows, was thus entitled to delegate its powers to ‘finalise’ the award in question to the ad hoc committee.12

[13] Various committees of the first respondent advised on the tender. In addition, the first respondent’s Board considered the tender and delegated its finalisation to an ad hoc committee. At the meeting of the ad hoc committee a large number of reports of other committees were discussed and aspects of the tenders by the applicant and the second respondent considered. The committee awarded the tender to the second respondent despite its lacking B-BBEE credentials and the applicant being the preferred bidder.

[14] The first respondent is required to procure goods and services from Broad-Based Black Economic Empowerment entities. The first respondent’s Procurement Policy requires that the first respondent procures goods and services from entities with a Level 1 to 5 B-BBEE rating. The second respondent is not a B-BBEE entity and it does not have a B-BBEE rating. In terms of the

first respondent’s Group Supply Chain Management and Preferential Procurement Policy it is stated that the first respondent shall adhere to the directives contained in the B-BBEE Act 53 of 2003. Clause 4.3.2 provides as follows:

‘The SABC will procure from businesses with a level 1 to 6 B-BBEE rating till 31 March 2008 whereafter it will only procure from businesses with a level 1 to 5 B-BBEE rating’. [The award of the tender took place after 31 March 2008].

In addition, the Policy document provides:

‘3.7.1The SABC shall adhere to the directives contained in the B-BBEE Act, Act No 53 of 2003, as it affects the supply chain process …

3.7.2 The SABC shall also adhere to the directives as contained in the Broad-Based Black Economic Empowerment Strategy as well as the approved Codes of Good Practice issued in terms of the B-BBEE Act.’

Clause 4.2.1 states the overall objective and purpose of the Policy:

‘To ensure the efficient, effective and uniform planning for and procurement of all services and goods as well as the sale and letting of assets whilst developing, supporting and promoting broad-based black economic empowerment …’ [See also clauses 6.3.1 and 6.3.4.1].

[15] The first respondent’s Bid Evaluation Committee evaluated the tenders (their report is not dated but appears to have been written after February 2008 and is annexed to the replying papers as ‘R1’). Paragraph 6 of the report deals with the evaluation of bids submitted. As far as the applicant is concerned, it was ranked number one and it is recorded that the applicant ‘met the technical criteria set out by Tender SGE/07/15 closest. This bidder submitted a BBBEE Certificate (Level 4) with Tender reply.’ The second respondent was ranked number three and it is recorded that ‘3rd Best Compliance to technical Criteria; Good Value for Money; BBBEE template have been completed, but no certification have been submitted, 100% Shareholding by Sony JAPAN.’ It is apparent that the applicant fared much better than the second respondent on technical criteria set out by the tender, and much better than all the bidders on technical criteria set by the tenderer. The applicant is a Level 4 B-BBEE enterprise. The recommendations of the Bid Evaluation Committee, however, are precisely that – they are recommendations and nothing more. The recommendations are summarised as follows:

‘3.2 Summary

The BEC recommend the award of tender to Digital Horizons (Pty) Ltd for the procurement of 4 x HDTV Outside Broadcast Traillers each equipped with 18 Cameras … including the 10x HD Camera Chains and Lenses.

4 RECOMMENDATION

It is recommended that Tender no SGE/07/15 be awarded to Digital Horizon (Pty) Ltd for the supply and delivery of 4 HTDV OB Trailers and 10 MPU Camera Chains at the negotiated price of €31, 595, 000. 00 (R383, 563, 300. 00) excluding contingency

cost …

Permission to issue a letter of intent to the recommended bidder and make initial down payment, prior to conclusion of contract, so that the contract can immediately move into the execution phase.

5 SUMMARY OF NEGOTIATIONS

On the 27 February 2008, the SABC Group Executive Committee granted a mandate to negotiate with Digital Horizons and third party vendors with a view to reduce pricing and/or specified equipment in an attempt to bring the recommended bid in line with the initial approved budget.

The negotiations took place on the 29 February 2008 between:

SABC and Sony South Africa to negotiate and propose a right to free issue equipments,

SABC and Digital Horizons (Pty) Ltd to negotiate the better prices for all tendered prices,

SABC and EVS to negotiate better prices to be pass on to any supplier that SABC will appoint.’

[16] According to the minutes of the meeting of the ad hoc committee Mr Mbeki, the chairman of the procurement subcommittee, and a member of the ad hoc committee, is reported to have stated that clause 18.3.1 of the procurement policy provided that any bidder that had submitted less than the required information or documents by the close of the tender should be rejected. This included the tax clearance certificate, valid TV Licenses, proof of B-BBEE status etc. The second respondent, clearly, could not have complied with this requirement relating to its B-BBEE status. It also appears that although there was a discussion involving the B-BBEE status of the applicant there was no discussion concerning the B-BBEE status of the second respondent.

[17] It is common cause that the first respondent entered into negotiations with the applicant, which negotiations the applicant contends were aimed at the conclusion of a contract between the applicant and the first respondent to give effect to the tender. It was also engaged in negotiations with the second respondent. These negotiations, however, concerned different issues. It is now clear that the first respondent negotiated with the second respondent about the ‘right to free issue equipment’, ie cameras. The negotiations between the applicant and the first respondent concerned ‘better prices for the all tendered prices.’ None of the other tenderers were engaged in negotiations after the closing of tenders.

[18] Paragraph 5.2 of the report deals with legacy investment and confirms what is stated in the applicant’s founding affidavit as far as this issue is concerned. The Bid Evaluation Committee report noted the applicant’s proposed investment in South Africa relating to training and other aspects.

[19] Paragraph 6.2 of the report further records that the applicant was ‘most successful in meeting the technical criteria set out by Tender SGE/07/15’. Of importance, as far as the applicant’s ability to complete the project is concerned, the report records that: ‘Digital Horizons together with their Broadcast systems integrator in Germany have extensive experience in building OB Vehicles & integration of broadcasting equipment for the outside broadcast industry.’

[20] From the minutes of the meeting of the ad hoc committee it is apparent that the applicant had been determined as the recommended bidder. It is also so that negotiations took place only with the applicant in regard to a price reduction. The minutes themselves record: ‘If one bidder is afforded an opportunity to reduce the price the opportunity should be extended to all the bidders’.13 However, clause 18.18.3 allows negotiations ‘with prior approval’ with regard to ‘any aspect which may in any way affect the prices, ie that may change the order in which the quotes/bids will be ranked’ which, on the papers, was given.

[21] The terms of the tender allowed bidders to submit tenders that were not strictly in accordance with the technical specifications

(clause A 3) and stated further that

‘7.1 The Corporation applies a policy of Broad Based Black Economic Empowerment … in all its employment, programmes, practices and business relationships. In this regard bidders … are required to submit the Ownership, control … and decision-making processes of the business … on the attached SABC BBBEE form.

7.2 The Corporation does not bind itself to accept the lowest or any tender, nor shall it be responsible for or pay any expenses or losses which may be incurred by the Bidder in the preparation and delivery of his tender…’

The Procurement Policy also states,

’12.5.3 The contract must be awarded to the bidder who scores the highest points unless objective criteria as per the bid document justify the award to another bidder. Where the award is made to a bidder who is not the highest points scorer, the reasons for deviating from the policy will be specifically minuted at the committee meeting.’

It is common cause that the applicant scored the highest points when the tenders were evaluated: of the three short-listed tenders it scored 85 % as against 75 % by TSL (Inala) and 69 % by the second respondent. The minutes of the ad hoc committee meeting does not disclose why the second respondent’s lack of B-BBEE status was not discussed. This, however, does not mean that the ad hoc was unaware of it: they obviously knew that the second respondent was a corporation whose shareholding vested in foreign entities.

The resolution also contains a decision to negotiate

‘a better deal with Sony in respect of the technical quality of the equipment; SABC personnel exposure, the upgrading of technical specs to meet the SABC’s requirements.’

[22] In the answering affidavit it is said that whilst there were arguments that the applicant was technically superior, the first respondent favoured the second respondent’s bid on two bases, viz firstly price (the second respondent’s price was lower than that of the applicant) and secondly the reputation of the second respondent. Whilst the ad hoc committee itself did not minute the reasons they have now been provided.14 The issues raised are obviously serious considerations and I have difficulty in holding without more that there is no rational

connection between the decision to award the tender to the second respondent and not to the applicant. Rationality ’is a minimum threshold requirement applicable to the exercise of all public power …’. A court will not interfere with a decision because it disagrees with it or considers that the power was exercised inappropriately.15

[23] However, given the irregularities referred to that occurred in the tender evaluation process I am prepared to accept for the purposes of this judgment that the applicant has shown a prima facie right to the relief sought in the review: the award of the tender to the second respondent was made in circumstances that were not ‘fair’. The existence of these irregularities was not seriously contested by Mr van Blerk on behalf of the first respondent in argument.

[24] The real issue concerns the balance of convenience. The tender is one in terms of which the first respondent wishes to acquire four high definition television outside broadcasting trailers together with camera chains and lenses to be used in conjunction therewith. It is required to be fulfilled so that the first respondent will be able meet its commitments to provide three high definition outside broadcasting units (it has one only at this stage) for the purposes of the Confederations Cup, an international soccer tournament that is to commence in South Africa

in June 2009, and which is to serve as a dress rehearsal for the provision by the SABC of four high definition outside broadcast units for the Soccer World Cup, to commence in June 2010.16 The tender is one in terms of which the period for the delivery of the first two critical outside broadcast units will be approximately

12 months.17 The answering affidavit sets out the position:

‘5.5 Both the Confederations Cup and the World Cup are run under the auspices of the international soccer body, FIFA. While the Confederations Cup is itself a substantial event, the Soccer World Cup is a major event of proportions that are not always appreciated by the uninitiated: in terms of attendance and television broadcasting and television broadcasting audience (and in particular revenue) the Soccer World Cup is the biggest single international sporting event, being more significant than the Olympic Games.

5.6 It is for this reason that FIFA controls the operation of the television broadcasting of the matches at these two events strictly in order to ensure quality and uniformity of the signal that it sends to numerous national broadcasters which earns it, that is FIFA, very substantial revenue. For the past two World Cups it has employed an entity known as Host Broadcasting Services (‘HBS’) which is responsible for the international broadcast of the visual and audio signal for all of the soccer matches in the World Cup.

5.7 FIFA required the first respondent to provide three OB units for use during the Soccer World Cup and a fourth HBS will provide a ‘flyaway’ OB unit. It is with these OB units that the Soccer World Cup broadcasting will take place.

5.8 The first respondent, in common with other broadcasters, will be entitled, at a not inconsiderable fee, to link into the international broadcasting centre to obtain the visual and audio signal; but it will also, like some but not all of the other broadcasters, be entitled to have what are known as ‘unilateral facilities’ – that is its own cameras to record matters of local significance to include with the international signal. That facility is required to be prebooked and is only available to a limited number of broadcasters, but the first respondent will by reason of its position be allowed that benefit.

5.9 While the Confederations Cup is itself a major event, from a broadcasting point of view FIFA sees it as the trial run for the far greater exercise of the World Soccer Cup. If the first respondent is not able to fulfill its functions properly and fully by providing the three OB units for the Confederations Cup it stands to the serious risk that FIFA will not use the first respondent’s technical facilities, with the consequent substantial loss of revenue to the first respondent and loss of its beneficial position arising therefrom.

5.10 In simple terms, the outside broadcasting unit is a trailer which is moved by a horse. In order to be able to move the trailer without restrictions, it has to be within the parameters of what is permitted in terms of the road traffic regulations …

[I]t goes without saying that it contains highly sophisticated equipment - the very price that is paid for these items illustrates

this. …

5.12 It takes approximately 50 weeks to construct these units. The construction process commences firstly with construction of the ‘coach’ which houses the equipment and then the incorporation of the equipment therein.

5.13 There is at the moment a substantial demand for the construction of these OB units internationally as a result of the fact that many broadcasters are switching to digital systems. The result thereof is a shortage of facilities for the construction of

the coaches which house all the equipment. So much so, that in order merely to reserve its place in the queue of those waiting to have coaches manufactured, the first respondent has been required to pay to the second respondent for payment to the coach builders a deposit of R 2,5 million.

5.14 Indeed the need to move promptly with the construction of these OB units and reserve space therefor can be seen from the applicant’s own emails attached to the application.

5.15 It is vital in order for the first respondent to be ready to fulfill its engagements to FIFA that the process of construction of the first two OB units commence immediately and that the second two commence no later than April 2009. …

5.17 Even a delay of one month at this stage will cause serious prejudice to the first respondent and place it at risk that it will not be able to meet its engagements with FIFA to the serious financial and reputational prejudice to the first respondent and prejudice to the South African television audience who will be deprived of the benefit of the local link-up. As it emerges from the applicant’s own papers it [has] been aware of the urgency with which orders for the OB units are to be pursued.’

The case thus made out in the answering affidavit is that, if an interim interdict is granted pending the hearing of the review, then whatever the outcome, it will not be possible for the party to whom the tender is ultimately awarded to fulfil its obligations timously to enable the first respondent to comply with its obligations for the purposes of the Confederations Cup.

[25] The second respondent in paragraph 7 of its supporting affidavit dated 11 July 2008 made the point that ‘time is of the essence in relation to this matter’. It shows that

‘the time from placing an order to the time of commissioning such a unit is … twelve months. This does not include a period for a party taking delivery of such a vehicle to rehearse and get used to the workings of the vehicle and all of its components. In that regard, the Confederations Cup, a key football event is to be held in South Africa from 14 June 2009. The vehicles have to be ready and commissioned for this event. If the orders are not placed immediately, then it will be impossible for any party to fulfil their obligations properly in terms of an agreement to deliver those vehicles. In our view, the matter is already going to require a significant amount of work outside of ordinary work to enable proper and timely delivery of the vehicles to the SABC and any further delays will be significantly prejudicial.’

[26] The applicant in the founding papers indeed itself refers to the fact that ‘time was of the essence’ (paragraph

4.12) and in one of its email messages wrote that ‘I know that the timing is critical on this project so maybe you have ways of starting the process even though we will only officially get going once the order is in place’ (‘FA 12’). The applicant’s own tender provided for delivery within 14 months after conclusion of the contract (FA at 156).

[27] In assessing the balance of convenience, a court is required to weigh the prejudice which the applicant will suffer if the interim relief is not granted against the prejudice which the respondents will suffer if the interim relief is granted.18 Moreover, s 8 PAJA requires a court to make an order that is ‘just and equitable’. It was said in Millenium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo province and Others:19 ‘This guideline involves a process of striking a balance between the applicant’s interests, on the one hand, and the interests of the respondents, on the other. It is impermissible for the court … to confine itself to the interests of the one side only.’ The public interest is also a matter that should be considered. Moreover, Jafta JA continued:20

‘The difficulty that is presented by invalid administrative acts … is that they have been acted upon by the time they are brought under review. A decision to accept a tender is almost always acted upon immediately by the conclusion of a contract with the tenderer, and that is often immediately followed by further contracts concluded by the tenderer in executing the contract. To set aside the decision to accept the tender, with the consequence that the contract is rendered void from the outset, can have catastrophic consequences for an innocent tenderer, and adverse consequences for the public at large in whose interests the administrative body or official purported to act. Those interests must be carefully weighed against those of the disappointed tenderer if an order is made that is just and equitable.’

[28] It was submitted that if interim relief is not granted a complete defence to Part B of the application would be created in that the first respondent would be able to contend that the decision has already been fully implemented. This argument puts the cart before the horse: the first question to be answered is whether the balance of convenience supports the interim relief sought. In its answering affidavit, the first respondent contends that the grant of the interim relief sought by the applicant would jeopardize the televising of two soccer competitions. I agree. Nor do I consider the first respondents’ entering into an agreement with the second respondent as something of their own making entitling the applicant to interim relief. Rather, the fact that an agreement was entered into on 12 August 2008 illustrates the urgency of the matter and necessity to conclude the agreement. I think risk of the inability of the first respondent’s to televise the two soccer competitions far outweighs the applicant’s right to administrative justice. The applicant, it should be repeated, is wisely not claiming that the tender be awarded to itself, only that the award to the second respondent be set aside and the first respondent be interdicted from implementing the subsequent contract concluded between the respondents. The public obviously has an interest in the outcome of this application: a failure by the first respondent to comply with its FIFA obligations will not only be embarrassing but also affect international perceptions of the first respondent as a national broadcaster.

[29] The first respondent relies on a construction period of approximately one year for the units. This approximation, it was submitted on behalf of the applicant, cannot be accepted. I fail to see why not. Not only is the period confirmed by the second respondent but the applicant’s tender also provided for a 14 month period for construction after conclusion of the contract. Time is indeed of the essence. It was further submitted on behalf of the applicant that in light of the strong prospects of success in the review application first respondent should not be able to stymie the applicant’s entitlement to the interim relief sought. The decision not to award the tender to the applicant but to the second respondent appears to be founded on objective grounds. There have been, as I have said, irregularities committed in the adjudication process rendering it unfair. They establish a prima facie right albeit subject to some doubt. This alone does not entitle the applicant to relief. The balance of convenience must also favour granting of the interim interdict. This is not a case such as the one Blieden J dealt with in The New Reclamation Group (Pty) Limited v Eskom Holdings Ltd and Kwanda Ferro-AlloyAfrican Resources (Pty) Ltd21 where the successful tenderer posed a real financial and operational risk to Eskom and the tender was set aside. There is no suggestion that the second respondent poses any such risk. The risk in this matter is concerned with the first respondent’s ability to comply with its FIFA obligations should the interim relief be granted. To my mind the respondents have shown that this consideration outweighs the applicant’s right to administrative justice. It would, moreover, not serve the public good if the interim relief sought is given and in the circumstances not be ‘just and equitable’..

[29] I have considered the order made on 22 June 2008 reserving costs of the application. To my mind the first respondent should be ordered to pay those costs including the costs of two counsel.

The following order is made:

The application is dismissed with costs including the costs of two counsel.

The first respondent is ordered to pay the costs reserved on 22 June 2008 including the costs of two counsel.

_______

Malan J

Judge of the High Court

Counsel for the applicant: RA Solomon SC and KN Tsatsawane

Attorneys for applicant: Leslie Cohen & Associates

Counsel for first respondent: PJ van Blerk SC and S Gumede

Attorneys for first respondent: Chuene Incorporated

Date of hearing: 1 September 2008

Date of judgment: 8 September 2008

1 Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA) para 5.

2 Minister of Health and Another NO v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC) paras 92-105; Affordable Medicines Trust and Others v Minister of Health and Others [2005] ZACC 3; 2006 (3) SA 247 (CC) paras 48-49.

3 National Gambling Board v Premier, Kwazulu Natal [2001] ZACC 8; 2002 (2) SA 715 (CC) para 49: ‘In an application for an interim interdict the dispute is whether, applying the relevant legal requirements, the status quo should be preserved or restored pending the decision of the main dispute.’

4 Case 07/27391 (WLD) paras 17 and 18.

5 2003 (2) SA 460 (SCA) paras 8 and 9.

6 2004 (1) SA 16 (SCA) para 13. See also Blieden J in The New Reclamation Group (Pty) Limited v Eskom Holdings Ltd and Kwanda Ferro-Alloy African Resources (Pty) Ltd above at para 19.

7 2003 (3) SA 268 (W) para 25.

8 Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC) para 30: ‘Examples of public remedies suited to vindicate breaches of administrative justice are to be found in s 8 of the PAJA. It is indeed so that s 8 confers on a court in proceedings for judicial review a generous jurisdiction to make orders that are “just and equitable”. Yet it is clear that the power of a court to order a decision-maker to pay compensation is allowed only in “exceptional cases”. It is unnecessary to speculate on when cases are exceptional. … Suffice it for this purpose to observe that the remedies envisaged by s 8 are in the main of a public law and not private law character …’

9 Olitzki Property Holdings v State Tender Board and Another 2001 (3) SA 1247 (SCA); Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC).

10 Minister of Finance and Others v Gore NO 2007 (1) SA 111 (SCA) paras 81 ff.

11 Cf Administrator Transvaal and Others v Traub and Others [1989] ZASCA 90; 1989 (4) SA 731 (A) 754 ff.

12 See, in any event, clause 2.1 of the ‘Delegation of Authority’ document: ‘Control of the affairs of the SABC is vested in the Board of Directors appointed on the recommendation of Parliament, in terms of the Broadcasting Act. The Board … is ultimately accountable and responsible for the performance and affairs of the Corporation ...’ Clause 2.3: ‘The Board has created a series of Board committees, in terms of the Board Charter, to assist it in the execution of its role. These committees may be permanent or may be constituted on an ad hoc basis to deal with specific issues ...’ Clause 2.4: ‘Board committees are generally constituted with powers of recommendation only … [T]he Board may, in its discretion, delegate decision-making authority in any area to one or more of the Board committees.’

13 Cf Metro Projects CC and Another v Klerksdorp Local Municipality and Others 2004 (1) SA 16 (SCA) para 14.

14 Procurement Policy clause 12.5.

15 Pharmaceutical Manufacturers Association of South Africa: In re Ex parte President of the Republic of South Africa 2000 (2) SA 614 (CC) 709 para 90.

16 Answering affidavit p 520 para 5.2

17 Answering affidavit p 523 para 5.12

18 Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton & Another 1973 (3) SA 685 (A) 691 E.

19 2008 (2) SA 481 (SCA) para 22.

20 Para 23. See also Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) para 36 and Chairperson: Standing Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others [2005] 4 All SA 487 (SCA) 498 ff.

21 Supra note 4.