Electoral Commission v Abland (Pty) Ltd and Others (73405/2014) [2017] ZAGPPHC 503 (3 August 2017)

IN

THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case No: 73405/2014

3/08/17

REPORTABLE:

NO

OF INTEREST TO OTHER JUDGES: NO

REVISED:

YES

In the matter between:

THE

ELECTORAL COMMISSION Applicant

and

ABLAND (PTY) LTD First Respondent

PIVOTMAN (PTY) LTD N.O. Second Respondent

KHWELA CITY PROPERTY SERVICES (PTY) LTD Third Respondent

PIVOTAL

FUND LTD Fourth Respondent

JUDGMENT

D S FOURIE, J:

[1] This is an application by the Electoral Commission ("Commission") for an order reviewing and setting aside some of its own decisions and for certain ancillary relief in support thereof. The Commission also seeks condonation for the late filing of this application. The application is opposed by the first, second and fourth respondents.

[2] The Commission is a state institution established in terms of section 181(1)(f) of the Constitution and section 3 of the Electoral Commission Act, No 51 of 1996. The first respondent ("Abland") is a property developer who acted on behalf of a consortium of which it was a part when it submitted a bid to let office premises to the Commission. The second respondent is a trustee of the Riverside Office Park Trust ("the Trust") which is the owner of the property where the office park is situated. The third respondent is an unsuccessful bidder which also participated in the procurement process for the letting of office premises to the Commission. The fourth respondent is the sole income and capital beneficiary of the Trust. Of all these parties the Commission, Abland and the Trust are the main role­- players.

BACKGROUND

[3] In 2005 the Commission adopted a procurement policy in accordance with its obligations under the Public Finance Management Act, No 1 of 1999 and the Preferential Procurement Policy Framework Act, No 5 of 2000. The procurement policy provides, inter alia, that the Chief Electoral Officer ("CEO") must appoint a procurement committee which will sit on a permanent basis to make recommendations on procurement decisions. For bids in excess of R100 000.00 a competitive tender process must be followed and an evaluation committee must be appointed to evaluate bids and to make recommendations to the procurement committee which will, in turn, make a recommendation to the CEO.

[4] In 2008 the Commission identified a need for new premises.

During February 2009 a process was initiated for the procurement of a new lease. Abland and Khwela City (third respondent), amongst others, participated in the process. After Khwela City was excluded, the Executive Committee of the Commission shortlisted four bidders and invited them to make representations on 19 June 2009. After having considered these representations (which also included site visits), the Commission decided on 6 July 2009 to award the lease to Abland. On 24 August 2009 a lease agreement was concluded between the Abland Consortium and the Commission.

[5] On 12 April 2010 the CEO signed the first addendum to the lease agreement which allowed for the procurement of movable goods and services for the fitting out of the building to meet the Commission's needs and to pass onto the Commission the cost thereof. This addendum also made provision for the substitution of the joint landlords (Abland Consortium) with the Trust which then took transferon 29 March 2010 of the property on which the new building was to be constructed. On 6 April 2011 the CEO signed a second addendum to the lease agreement which made provision for, inter alia, the procurement of immovable goods as well as certain amendments to the schedule relating to the area size and monthly rental of the leased premises.

[6] On the strength of the decision to award the lease to the Abland Consortium and to enter into the first and second addendum to the lease agreement, the building that houses the National Head Office of the Commission was designed, built and furnished with movable and immovable fittings to suit the Commission's organisational structure and constitutional function. The Commission took occupation of the new building on 13 September 2010 and is still occupying it. The lease agreement will terminate on 31 August 2020.

[7] The decisions which are the subject-matter of this review application are the following:

(a) the decision taken on 6 July 2009 to accept a bid submitted by the Abland Consortium for a tender in connection with leased premises

for the Commission;

(b) the decision taken on 12 April 2010 to conclude the first addendum to the lease with the Trust; and

(c) the decision taken on 6 April 2011 to conclude the second addendum to the lease with the Trust.

THE

DELAY

[8] The respondents accept the principle that organs of State, including the Commission, have the power and duty to approach a Court, when necessary, to review and set aside their own decisions (cf. Khumalo & Another v MEG for Education, KwaZulu-Natal 2014 (5) SA 579 (CC) at par 35). However, it is in dispute whether the Commission is entitled to condonation for the delay in bringing the application. In view of the lengthy passage of time since the Commission took the decisions that are the subject-matter of this application, it is necessary for the Commission to seek condonation for its delay in bringing the application.

[9] The relevant part of section 7(1) of the Promotion of Administrative Justice Act No 3 of 2000 ("PAJA") provides that any proceedings for judicial review must 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 it or might reasonably have been expected to have

become aware of it. Section 9(1) makes provision for the extension of time-periods. It provides that the 180-day period may be extended for a fixed period, by agreement between the parties or, failing such agreement, by a Court on application by the person or administrator concerned. In terms of section 9(2) the Court may grant such an application "where the interests of justice so require”.

[10] Two different stages are envisaged by section 7(1), i.e. a stage before the effluxion of 180 days and another one thereafter. It has been explained as follows by Brand JA in Opposition to Urban Tolling Alliance v SANRAL [2013] 4 All SA 639 (SCA) par 26:

"Before the effluxion of 180 days, the first enquiry in applying section 7(1) is still whether the delay (if any) was unreasonable. But after the 180-day period the issue of unreasonableness is pre­ determined by the Legislature; it is unreasonable per se. It follows that the Court is only empowered to entertain the review application if the interest of justice dictates an extension in terms of section 9. . Absent such extension the Court has no authority to entertain the review application at all. Whether or not the decision was unlawful

no longer matters. The decision has been 'validated' by the delay... .".

[11] The onus is on an applicant who has delayed in bringing review proceedings to make out a proper case that the delay be condoned in

the interests of justice. An application for condonation must give a full explanation for the delay. In addition, the explanation must cover the entire period of the delay. In short, a reasonable explanation must be given (Van Wyk v Unitas Hospital & Another [2007] ZACC 24; 2008 (2) SA 472 (CC) par 22). The other factors ordinarily considered by a Court in deciding whether " the interests of justice so require" are the nature of the relief sought, the extent and cause of the delay, its effects 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 (Camps Bay Ratepayers' and Residents' Association v Harrison [2010] 2 All SA 519 (SCA) par 54). Also relevant is the extent to which the administrative act has been acted upon subsequently, and if prejudice is held to exist, the nature and extent thereof as well as the prejudicial consequences to affected parties that arise and which cannot be undone (Oudekraal Estates & Others v City of Cape Town & Others 2004 (6) SA 222 (SCA) par 46 and Camps Bay Ratepayers' and Residents' Association v Harrison, supra, par 57).

[12] The Commission launched the present application on 2 October 2014. The launch of the application was five years after the taking of the first impugned decision (to award the lease to the Abland Consortium), almost four and a half years after the decision to

conclude the second impugned decision (the signing of the first addendum to the lease) and almost three and a half years after the taking of the third impugned decision (to conclude the second addendum to the lease). Having regard to the dictum of Brand JA in OUTA (par 10 supra) it means that in this matter the application for condonation fits into the second stage or category of delay (after the 180-day period) where the issue of unreasonableness is pre-determined by the Legislature and the Court is only empowered to entertain the review application if the interest of justice dictates an extension in terms of section 9 of PAJA.

REASONS

FOR THE DELAY

[13] The section dealing with condonation in the founding affidavit (following the grounds of review and the relief sought) consists of fourteen short paragraphs covering about two and a half pages. This does not take into account the merits of the review application to which I shall refer later when considering the prospects of success for purposes of the application for condonation. The explanation

given by the Commission is that the delay is linked to the position of Adv Tlakula “in relation to the Commission”. She was the former CEO and since November 2011 the chairperson of the Commission. The reasons pleaded for the delay are the following:

(a) the decisions which the Commission seeks to have reviewed and set aside are decisions in which Adv Tlakula was centrally involved in her previous capacity as CEO of the Commission;

(b) the facts giving rise to this application were drawn to the attention of the commissioners only in the course of the investigation by the Public Protector and after Adv Tlakula took office as chairperson of the Commission in November 2011;

(c) since November 2011, Adv Tlakula has been chairperson of the Commission and the existing commissioners have held office in an institution headed by her;

(d) this situation changed for the first time, in the first week of July 2014, when Adv Tlakula took leave of absence from the Commission pending her appeal to the Constitutional Court from the decision of the Electoral Court;

(e) prior to taking leave of absence, Adv Tlakula was contesting the Electoral Court proceedings and had launched review proceedings to set aside the findings against her in the Public Protector's report;

(f) Adv Tlakula had properly recused herself from all proceedings of the Commission relating to the Public Protecto'rs report and the Electoral Court litigation. Nevertheless, as long as she remained the active chairperson of the Commission, the remaining commissioners would have compromised their working relationships with their chairperson if they had brought this review application;

(g) that difficulty was removed temporarily only when Adv Tlakula took leave of absence from the Commission in the first week of July 2014 and finally when she resigned from her position as chairperson of the Commission on 2 September 2014.

[14] These reasons, when reduced to its essential features, can for practical purposes be regarded to fall into two main categories.

First, the commissioners only became aware of the facts giving rise to the review after Adv Tlakula became the chairperson of the

Commission in November 2011. Second, Adv Tlakula was centrally involved in the decisions that were made and the commissioners would

have compromised their working relationship with their chairperson if they had brought the review before Adv Tlakula resigned from her position on 2 September 2014.

[15] I shall first consider the allegation that the commissioners only became aware of the facts giving rise to the review application in November 2011. According to the respondents the Commission was aware of what it perceived to be defects and irregularities in the impugned decisions already as far back as 1 June 2011. It is alleged that the Commission not only decided not to set the impugned decisions aside, but on the contrary, to uphold them and seek condonation to the extent necessary. Attached to the answering affidavit is a letter in this regard dated 1 June 2011 by the Chief Financial Officer of the Commission addressed to the Director-General of National Treasury requesting condonation for "irregular expenditure 20101 2011". Under the heading "Riverside Office Park" the following disclosure was made:

"Ultimately, in the main due to timing issues, a turnkey solution was accepted from the successful bidder. This amount of R71 819 569

... is disclosed as irregular as a number of technical issues in respect of compliance arose. These include failure to advertise in the Government Gazette and failure to advertise for 21 days. (Although the CEO was aware of the deviation her approval was not evidenced in writing, and we failed to make the appropriate notification to you and the Auditor-General of the deviation approval.)"

[16] Further on in the same letter the request for condonation was motivated as follows:

"There was no financial misconduct; it was only a matter of non­ compliance. All senior officials and commissioners were involved in the negotiations in respect of the new lease, and none has any interest in any of the third parties that were contracted. The rental is market related in our view, as were the once off relocation and furnishing costs - the successful bidder having direct contact with a furniture factory, meaning that the 30% - 65% mark-ups normally charged by office furniture suppliers were saved."

[17] The Commission filed a replying affidavit during August 2015.

save to maintain that the Commission could not reasonably have been expected to institute review proceedings while it was still under the leadership of Adv Tlakula and pointing out that she only resigned in September 2014, no attempt was made to reply to the allegations made in the answering affidavit or to explain whether or not the commissioners were aware of the contents of the letter dated 1 June 2011. This is an important issue as it may have a direct bearing on credibility. One would have expected a proper explanation by the Commission in this regard, more particularly if one takes into account that the deponent to the founding affidavit is the deputy chairperson of the Commission. Taking into account the uncontested explanation given in the answering affidavit, one gets the impression that the Commission must have been aware of the alleged defects and irregularities long before November 2011. In the absence of a proper explanation covering the entire period of the delay I am unable to find that a full and reasonable explanation has been given in this regard.

[18] I shall now consider the allegation that Adv Tlakula was centrally involved in the decisions that were made and this would have compromised the working relationship. It was contended on behalf of the Commission that the delay in bringing this application is linked to the fact that Adv Tlakula (who later became the chairperson) was centrally involved (as CEO) in the facts relevant to the grounds of review and therefore the remaining commissioners were unable to decide freely on the need to review the impugned decisions as she was directly implicated therein.

[19] According to the respondents the Rand Merchant Bank, before it was willing to agree to provide a further facility to the Trust, called upon the Commission to confirm the existence and terms of the lease agreement as well as the agreement for the procurement of certain immovable equipment. The Commission duly responded on 31st March 2010 (long before Adv Tlakula became the chairperson in November 2011) by providing a letter, duly signed by the chairperson of the Commission as well as Adv Tlakula (in her capacity as the CEO) and Mr Du Plessis, the Deputy CEO. The context in which this letter has been referred to in the answering affidavit was to explain that neither Abland, nor the Trust had reason to believe that the lease agreement and addenda thereto were not legally valid.

[20] The relevant part of the letter, under the heading "Accommodation: Riverside Office Park", reads as follows:

"This is to confirm that the Commission at its meeting on 6 July 2009 agreed to relocate from its present office in Sunnyside to the Riverside Office Park in Centurion from 1 September 2010.

The Commission concurred with the Chief Electoral Officer, Adv F D P Tlakula, the accounting officer of the Commission ... entering into a 10 year lease agreement with a base rental of approximately R115 per square metre. A final rental amount will be agreed with the landlord once additional tenant fit out requirements ... which is of an immovable nature and has to be rentalised, has been determined.

The cost of these additional fit out requirements has been estimated to be and has been capped at R20 million. This is expected to increase the lease rental by about R23.00 - R24.00 per square metre.

For easy reference specimen signatures of the Chief Electoral Officer as well as that of the Deputy Chief Electoral Officer, who has been delegated to deal with matters relating to the project, appear below."

[21] Again, nothing is said about this letter in the replying affidavit. It has neither been admitted, nor denied or explained. Taking into account the context of this letter, its contents and the absence of any further explanation with regard to it, this letter creates the impression, at least prima facie, that between 6 July 2009 (before the first impugned decision was taken) and 3151March 2010 (when the letter was written), the Commission was not only properly represented but also involved in the procurement process and aware of certain of the financial implications, such as "additional tenant fit out requirements" and the expected increase of the rental in future. This impression is supported by the letter of the Chief Financial Officer, dated 1 June 2011, where it is pertinently stated that "all senior officials and commissioners were involved in the negotiations in respect of the new lease" (par 16 supra). It therefore appears that Adv Tlakula was not the only person centrally involved and directly implicated in the decisions that the Commission now seeks to review. All senior officials and commissioners were also centrally involved in the whole process and are directly linked to the impugned decisions. This explanation therefore does not take the matter any further.

[22] It was also contended that as long as Adv Tlakula remained the active chairperson of the Commission, the remaining commissioners were unable to decide freely on the need to review the impugned decisions as it would have compromised their working relationship with her if they had brought the review application. I am not convinced that this is a reasonable explanation for the delay. First, it is doubtful whether this explanation also applies to all the other commissioners as no confirmatory affidavit by them has been filed. Second, and more importantly, section 9(1)(a) of the Electoral Commission Act provides that every member of the Commission shall serve impartially and independently and perform his or her functions as such in good faith and without fear, favour or prejudice. It does not allow commissioners to become subjected to fear or to become intimidated.

They must serve impartially and independently without fear, favour or prejudice failing which their conduct may amount to a dereliction of duty and may even be regarded as unconstitutional (section 181(2) of the Constitution). Therefore, this explanation about fear for a compromised relationship is, in my view, unacceptable.

[23] Taking into account all the above considerations, I am not convinced that a full and reasonable explanation has been given by the Commission for the extraordinary long delay in bringing these review proceedings. However, a reasonable explanation (or the absence thereof) for the delay is not the only consideration in deciding whether the interests of justice require that condonation be granted. Other factors to be considered include, for instance, the prospects of success, the nature of the relief sought, the consequences of the delay and any possible prejudice.

THE

PROSPECTS OF SUCCESS

[24] When considering the prospects of success the merits with regard to the impugned decision(s) should also be taken into account. This requires a consideration of the merits, not their determination. (Asia Construction (Pty) Ltd v Buffalo City Metropolitan Municipality [2017] ZASCA 23 par 12). I shall now consider the merits and prospects of success with regard to each of the impugned decisions.

THE

LEASE AGREEMENT

[25] It is alleged in the founding affidavit that the procurement process did not follow the requirement in clause 7.12 of the procurement

policy that bidders should have a minimum of 14 working days to respond to a notice advertising the tender. The tender was first

advertised on 27 February 2009 and had a closing date of 9 March 2009. According to the Commission the 14 day requirement is, itself,

a departure from the 21 day requirement in Treasury Regulation 16A(6) that may be departed from only in cases of urgent bids.

[26] It is also alleged that the procurement process departed from the requirements of the procurement policy in that it made no provision for a bid evaluation committee and, instead, the Exco of the Commission performed the functions assigned to the Bid Evaluation

Committee. When the Exco met on 15 May 2009 to consider the bids, it did not perform the detailed evaluation ordinarily

expected of the Bid Evaluation Committee. Instead, it relied on a summary spreadsheet prepared by Mr Langtry, the office manager of the CEO. Having relied on Mr Langtry's schedule Khwela City was irregularly excluded as a bidder. It is contended that if Khwela City had not been irregularly excluded from the process, its bid ought to have been accepted in preference to that of Abland.

[27] It is further alleged that Adv Tlakula had an undisclosed conflict of interest in relation to Abland. In this regard it is pointed out that a certain Mr Mufamadi is the chairperson of Manaka Property Investments (Pty) Ltd which held a 20% stake in Abland. Mr Mufamadi was also a co-director with Adv Tlakula and executive chairperson of Lehotsa Investment (Pty) Ltd. Adv Tlakula did not dispute to the Public Protector that she had introduced Mr Mufamadi to colleagues at the Commission as her business partner.

[28] Having regard to these alleged irregularities it appears that the following grounds of review (paraphrased by myself and reduced to its essential features) are relied upon:

(a) the procurement process by which the lease was awarded to Abland was procedurally unfair and the award falls to be reviewed and set aside;

(b) the Exco members not only relied on the incorrect schedule of Mr Langtry to exclude the Khwela City bid without considering it, but its bid was also objectively better than that of Abland and therefore the exclusion of Khwela City is unjustifiable;

(c) by virtue of Adv Tlakula's undisclosed past business relationship with Mr Mufamadi, competing bidders may have entertained a reasonable apprehension of bias on her part in favour of the Abland bid.

First ground of review

[29) With regard to the alleged procedural unfairness it is contended in the answering affidavit that the procurement process was not procedurally unfair within the meaning of section 6(2)(c) of PAJA as the lease agreement is an "operating lease" within the meaning of Treasury Regulation 32.2.3 and also because the 21 day period prescribed by the Treasury Regulation is not peremptory. According to the respondents the securing of alternative accommodation by the Commission was urgent within the meaning of Treasury Regulation 16A6.3 (which makes provision for urgent cases), taking into account the prevailing circumstances at the time, such as unsafe premises, inadequate ablutions, soiling of carpets by sewerage and an expected increase in rental by 42%.

[30) It was also emphasised that the Commission had to leave these premises as soon as possible and be accommodated in new premises on time for the next municipal elections in 2011. It was pointed out that, notwithstanding the abbreviated period of 1O days advertising

the tender, there were no less than 10 bids submitted by entities and consortia within the confined market of Pretoria and Centurion. There is no allegation by the Commission that, because of this abbreviated time-period, there were other prospective bidders who were unable to submit proposals and were therefore unfairly excluded. Again, these allegations are not contradicted in the replying affidavit.

[31] With regard to the allegation that the procurement process did not make provision for a bid evaluation committee, the respondents refer in their answering affidavit to an affidavit of Mr Langtry, the officer manager of the CEO, deposed to on 29 November 2013 in response to a previous investigation, in which it is explained that the Exco, as a committee, was "representing the evaluation committee". Mr Langtry also confirmed that the Exco, as a committee, considered his schedule and the representation of facts disclosed therein.

[32] The allegation that the Exco did not perform a detailed evaluation and relied on a summary spreadsheet prepared by Mr Langtry only, is also disputed in the answering affidavit. Reference is made to an affidavit of Mr Du Plessis, the Deputy CEO deposed to on 9

December 2013 in response to another investigation, in which he states that the schedule of Langtry "was by no means the only basis upon which the options were evaluated. Documentation was available and was frequently referred to/consulted by individual members of the Committee". Mr Langtry, also present at the meeting, explains in his affidavit that although he cannot recall whether the members of the Exco examined the proposals of all the bidders, he does seem to recall "that some of them examined some of the proposals" although he is not certain whether this was confined to the proposals of bidders that met all the requirements. Again, this evidence is not contradicted by the Commission in reply.

The second ground of review

[33] The second ground of review relates to the exclusion of the Khwela City bid. It is explained in the answering affidavit that it was a requirement in the request for proposals that prospective bidders should be able to offer occupation by 1 April 2010. Taking into account the closing date of 9 March 2009 for proposals, it means that the Commission required a bidder to give the Commission operating occupation within one year after the closing date of the bid.

[34] It was then pointed out that Mr Du Plessis (the Deputy CEO) said the following in his affidavit of 9 December 2013 in this regard:

"The schedule of options presented by Stephen Langtry did serve as a guide for the Exco meeting but was by no means the only basis on which the options were evaluated. Bid documentation was available and was frequently referred to/consulted by individual members of the Committee. I cannot recall who looked at which bids but the primary aim was to select options that had the size of the building we needed and offered an occupation date of no later than 1 April 2010.

I cannot recall if the error in the Langtry schedule relating to the size of the building in the Khwela City offer was identified during the evaluation or not. That is, however, not the sole element on which they were disqualified from further consideration. The occupation date did not meet our requirements and no offer was shortlisted that had an occupation date of later than 1 April 2010 and that was the basis of their exclusion. I confirm that I personally verified at least the occupation date of each of the submissions but did not look at the rest of the proposal if the 1 April 2010 occupation date was exceeded."

[35] It is contended by the respondents that, according to the explanation given by Mr Du Plessis, the main reason for the exclusion of Khwela City was its inability to comply with 1 April 2010 as the occupation date. It was by means of this initial screening process, that the number of bidders was reduced from 1O to 4. The 4 shortlisted bidders were invited to make representations to the Exco on 19 June 2009 where further bid evaluation and elimination would take place. According to the respondents no procedural unfairness or irregularity is disclosed within the meaning of PAJA. Again, the evidence referred to by the respondents is not contradicted in the replying affidavit.

The third ground of review

[36] The third ground of review is premised on a reasonable apprehension of bias on the part of Adv Tlakula in favour of the Abland bid. It was contended by the respondents that this ground of review should fall at the first hurdle, i.e. the decision to award the lease was not that of Adv Tlakula, but of the Commission. It was pointed out that Adv Tlakula was not a member of the Commission at that stage. She was the CEO and head of administration. With reference to the minutes of the meeting of 15 May 2009, it appears that she was not even present at the Exco meeting when the shortlist of bidders was prepared.

[37] According to the respondents it goes further. The BEE component in the Trust is held by Manaka Property Investments (Pty) Ltd. The shareholders are J Mathebula, T Mufamadi and the Moolman family through juristic entities held by them. It was pointed out that Adv Tlakula has no shareholding in Manake and no interest in any of the entities that hold shares in Manaka. She only held shares and was a director in a dormant company, Lehotsa Investments (Pty) Ltd of which Mr Mufamadi was also a shareholder and director. This company, according to the respondents, was and is entirely unrelated to Manaka and has nothing to do with the Riverside Office Park Trust. Again, these allegations are not contradicted by the Commission in its replying affidavit.

Prospects of success with regard to first impugned decision (lease agreement

[38] When considering the prospects of success, the proper approach is to establish, factually, whether an irregularity occurred. Then the irregularity must be legally evaluated to determine whether it amounts to a ground of review under PAJA (Al/pay Consolidated v Chief Executive Officer, SASSA 2014 (1) SA 604 (CC) par 28). It would have to include a consideration of whether the irregularity or non-compliance was material or, put differently, egregious (SANRAL v Cape Town City 2017 (1) SA 468 (SCA) par 81). Having said that, I still bear in mind, when considering the application for condonation, that this requires a consideration of the merits, not a determination thereof.

[39] It is factually correct that the invitation for tenders was only advertised for 10 days and that this constituted a departure from the 21 day period ordinarily prescribed by Treasury Regulations. It is also correct that a procurement committee was not appointed in terms of the procurement policy to make recommendations on procurement decisions. In both these instances and due to a failure to comply with the requirements of the Regulations and procurement policy, an irregularity occurred. Without deciding the issue, I must now consider whether these irregularities would amount to a ground of review under PAJA.

[40] The materiality of compliance with legal requirements will depend on the extent to which the purpose of the requirements was attained and by assessing whether the purpose the tender requirements were intended to serve, had been substantially achieved (Allpay Consolidated v Chief Executive Officer, SASSA, supra, par 28-30). It seems to me that the purpose of the first requirement is to allow sufficient time for prospective bidders to prepare, to submit their bids timeously and to ensure that a competitive tender process will be followed. Taking into account that the tender was advertised for an abbreviated period of 10 days, that no less than 1O bids were submitted and that there is no evidence to indicate that other prospective bidders were unable to submit proposals, it appears to me that the intended purpose had been substantively achieved. This irregularity is therefore, in my view, neither of a material nature, nor procedurally unfair within the meaning of PAJA.

[41] The same applies, in my view, to the allegation that the procurement process did not make provision for a bid evaluation committee.

Notwithstanding the fact that an irregularity in fact occurred, it was explained by Mr Langtry that the Exco, as a committee, was

representing the evaluation committee and it also appears from the evidence of Mr Du Plessis, read with that of Mr Langtry, that the Exco performed the functions assigned to the bid evaluation committee. In other words, this phase in the evaluation process and the functions assigned to the evaluation committee were not overlooked or neglected, but had been performed by another committee

of the Commission. It therefore appears that the purpose of the requirement had been substantially achieved.

[42] The allegation that the Exco did not perform a detailed evaluation and relied on a summary spreadsheet prepared by Mr Langtry only, is disputed by the respondents. According to the evidence of Mr Du Plessis the schedule of Mr Langtry was by no means the only basis upon which the options were evaluated. Other documentation was also available and was frequently referred to or consulted by individual members of the committee. This explanation is, at least to a certain extent, confirmed by Mr Langtry. Taking into account this undisputed evidence, it would be difficult to conclude that an irregularity or non-compliance in fact occurred.

[43] With regard to the third ground of review it is contended that competing bidders may have entertained a reasonable apprehension of bias on the part of Adv Tlakula in favour of the Abland bid. This is premised on an undisclosed conflict of interest in relation to Abland as more fully set out above. However, it is pointed out by the respondents that the decision to award the lease to Abland was not that of Adv Tlakula, but of the Commission and that Adv Tlakula was not a member of the Commission at that stage. It is then also explained that Adv Tlakula has no shareholding in Manaka Property Investments (Pty) Ltd as suggested by the Commission. She held shares and was a director in a dormant company, Lehotsa Investments (Pty) Ltd of which Mr Mufamadi was also a shareholder and director. However, according to the respondents, this company was and still is entirely unrelated to Manaka and has nothing to do with the Riverside Office Park Trust.

[44] Section 6(2)(a)(iii) of PAJA provides that a Court has the power to judicially review an administrative action if the administrator who took it was biased or unreasonably suspected of bias. This sub-section specifically refers to the administrator who took the

administrative action, i.e. the decision concerned. In this matter the decision was taken by the Commission, not Adv Tlakula. Furthermore, she was not even a member of the Commission when the decision was taken. For this reason alone, I find it difficult to understand how the allegations made by the Commission about Adv Tlakula, can justify a conclusion that an irregularity occurred. In my view the facts are insufficient to justify such a conclusion.

[45] Taking into account the facts, all the above considerations and the onus of proof, I am not convinced that a reasonable prospect of success on the merits with regard to the first impugned decision (the lease agreement) has been demonstrated. However, this is not the end of the matter. I still have to consider the prospects of success with regard to the second and third impugned decisions.

THE

FIRST AND SECOND ADDENDA TO THE LEASE AGREEMENT

[46] It is alleged in the founding affidavit that the advertisement for bids had not stipulated requirements in relation to fitting out expenses. It is also pointed out that despite the fact that no competitive procurement process had been followed in relation to goods and services for the fitting out of the building, on 12 April 2010 Adv Tlakula signed the first addendum to the lease agreement which allowed the Trust (which had by now succeeded the Abland Consortium as lessor) to procure these items and to pass on to the Commission the cost thereof. Furthermore, although the first addendum placed an upper limit of R20 million for the additional immovable fitting out expenses, Adv Tlakula ultimately authorised expenditure of R22 603 373.00 (VAT exclusive) on additional immovable fitting out expenses, and amended this provision accordingly in the second addendum to the lease agreement.

[47] Having regard to these alleged irregularities it appears that the following grounds of review (reduced to its essential features) are relied upon:

(a) No fair, transparent or competitive procurement process was followed by Adv Tlakula before concluding the first addendum to the lease agreement and before purporting to authorise an aggregate expenditure of R59 918 380.00 on movable fitting out expenses;

(b) No fair, transparent or competitive procurement process was followed by Adv Tlakula before concluding the second addendum to the lease agreement and before purporting to authorise an expenditure of R22 603 373.00 on additional immovable fitting out expenses;

(c) The decisions to do so were plainly unlawful and fall to be reviewed and set aside in terms of section 6(2)(c) and 6(2)(i) of PAJA.

[48] According to the respondents the procurement of movable fittings and furniture for the building was introduced into the lease agreement by the first addendum whereas the procurement of immovable fittings was introduced by the second addendum. The immovable fittings are in addition to the ordinary tenant installation allowance and were required by the Commission for the purpose of carrying out its special business and performing its function as a constitutional institution.

[49] It was also explained that the movable fittings were procured by the Trust on behalf of the Commission at its special instance and request at reasonable and market-related prices approved by the Commission in each instance. These fittings have long since been paid for and ownership has vested in and been enjoyed by the Commission for over four years now. With regard to these movables it is pointed out, with reference to the letter dated 1 June 2011 (par 15 and 16 supra), that the request for condonation has been dealt with as follows by National Treasury in their letter dated 28 July 2011:

"It was indicated in your application that although the CEO was aware of the deviation, her approval was not evident in writing. The National Treasury does not condone an institution's decision to deviate from the prescribed bidding processes. Treasury Regulation 16A 6.4 delegates the approval for deviation from the required prescripts to the relevant accounting authority.

To this end, paragraph 3.3 of the National Treasury's Practice Note No 4 of 2008/2009 states that the accounting authority or the functionary to whom the power was delegated to is empowered to condone irregular expenditure incurred as a result of institutions procuring goods or services by means other than through competitive bids and where the reasons for deviating from inviting competitive bids have not been recorded and approved by the accounting authority. You are, therefore, directed to deal with this matter accordingly. "

[50] Attached to the answering affidavit is a copy of a document, dated 9 February 2012 and signed by the Acting Chief Electoral Officer, in terms whereof the expenditure of the Commission on movable fittings was condoned in the context of "deviation from competitive bidding in respect of furniture, fittings and other once off set-up costs". It is then pointed out that, whereas the procurement of movables was dealt with and condoned in terms of paragraph 3.3 of National Treasury's Practice Note No 4 of 2008/2009, it is not clear why the procurement of immovable fittings and expenditure (the second

addendum) was not dealt with likewise. Again, neither was this evidence contradicted by the Commission in its replying affidavit,

nor was any explanation given why the procurement of immovable fittings and expenditure could not also have been condoned by the

accounting officer of the Commission.

[51] According to the respondents the procurement of both movable and immovable fittings for the new building was carried out in the manner it was, because it was not only impractical, but indeed impossible to conduct ordinary competitive bidding processes in the circumstances. The Commission could not achieve the goal of occupying and commencing operations in the new building without the Commission making use of Abland, its professional team and consultants to assist in the procurement of movable and immovable fittings. Again, this evidence is not contradicted by the Commission in its replying affidavit.

Prospect of success with regard to second and third impugned decisions (first and second addenda)

[52] It is factually correct that no competitive procurement process was followed before concluding the first and second addenda to the lease agreement and also before purporting to authorise the related expenditure with regard to both movable and immovable fittings. This failure appears to be in contravention of the requirements of the procurement policy and should therefore be regarded as an irregularity. This explains why the Chief Financial Officer of the Commission requested condonation from National Treasury in his letter dated 1 June 2011.

[53] This irregularity must now be legally evaluated to determine whether it would amount to a ground of review under PAJA. Without deciding the merits, it is, in my view, important to consider the following: First, National Treasury pertinently refers in their letter dated 28 July 2011 to Treasury Regulation 16A 6.4 and Practice Note No 4 of 2008/2009. Treasury Regulation 16A 6.4 reads as follows:

"If in a specific case it is impractical to invite competitive bids, the accounting officer or accounting authority may procure the required goods or services by other means, provided that the reasons for deviating from inviting competitive bids must be recorded and approved by the accounting officer or accounting authority."

In terms of paragraph 3.3 of the Practice Note, the power of the accounting officer of a constitutional institution to condone irregular expenditure, is confirmed in the following circumstances:

"Irregular expenditure incurred as a result of institutions procuring goods or services by means other than through competitive bids

and where reasons for deviating from inviting competitive bids have not been recorded and approved by the accounting officer or accounting authority (contravention of Treasury Regulation 16A 6.4)."

[54] Second, the expenditure incurred by the Commission in respect of the first addendum (movable fittings) has in fact been condoned by the accounting officer on 9 February 2012 in terms of these Treasury Regulations. That administrative act stands until reviewed and set aside. The Commission has made no attempt to impugn it and therefore this irregularity, after it was condoned, can no longer be regarded as a ground of review under PAJA. It has fallen away.

[55] Third, having regard to the provisions of the Treasury Regulation and Practice Note as well as the letter of National Treasury dated 28 July 2011 {par 49 supra ), I fail to see why the expenditure incurred in terms of the second addendum (immovable fittings) could not have been dealt with in a similar way. It appears (at least prima facie and in the absence of any explanation by the Commission in its replying affidavit) that there was no reason why the expenditure incurred in terms of the second addendum could not have been condoned by the Chief Financial Officer of the Commission. If it was within his power to do so, why must it now be set aside? In cases where the existing legal framework makes provision for condonation to be granted, this may be tantamount to an internal remedy, within the meaning of section 7(2) of PAJA, which must first be exhausted.

[56] Finally, taking into account the undisputed explanation in the answering affidavit that it was impossible to conduct ordinary

competitive bidding processes with regard to both the addenda, it appears to me, at least prima facie, that the remaining irregularities complained of should be regarded as immaterial. This impression is supported by the fact that the Treasury Regulations make provision for condonation under these circumstances As a matter of fact, the Chief Financial Officer of the Commission was directed by National Treasury "to deal with this matter accordingly". The impression is created that this kind of irregularity is not regarded as serious or egregious and may therefore be dealt with

internally by the institution itself.

[57] Taking into account the evidence, the undisputed facts and all the above considerations, I am of the view that none of the remaining irregularities with regard to each of the impugned decisions, amount to a ground of review under PAJA. These irregularities appear not to be material or, put differently, egregious. Therefore, in my view, there are no reasonable prospects of success with regard to any of the said decisions. Notwithstanding this conclusion, I shall now proceed to consider the nature and extent of the relief sought, more particularly certain of the ancillary relief.

THE

RELIEF SOUGHT

[58] Then considering an application for condonation, another factor to be taken into account in deciding whether "the interests of justice so require", is the nature of the relief sought. This is relevant with regard to, inter alia, the extent to which the impugned decision has already been acted upon, whether a meaningful result will be achieved and what the prejudicial consequences, if any, will be.

[59] The relief sought (save for seeking condonation) falls into five different categories:

(a) reviewing and setting aside the decisions relating to the lease agreement as well as the first and second addenda thereto;

(b) an order directing the Commission to institute a new procurement process to conclude a (new) lease for the Commission;

(c) an order suspending the invalidation of the existing lease agreement between the Commission and the Riverside Office Park Trust;

(d) an order directing, within a specified period, the first and fourth respondents to file an audited statement of their respective income received, expenses incurred and profit made in connection with the existing lease agreement

(e) determining, in the event that anyone of the parties has been enriched at the expense of the other, that the party who has been enriched shall be liable to pay to the other an amount equal to the extent of its enrichment.

[60] According to the Commission the relief sought is designed to ensure that the irregular procurement process will be cured as soon as the Commission is freed from its contractual obligations. The Commission will remain in occupation of its existing leased premises while it is attempting to procure new premises through legally correct procedures. Once properly procured leased premises has been obtained, the existing lease agreement will be invalidated. The parties will then have to adjust their positions taking into account the profit or loss that they have respectively made on the existing lease.

[61] These considerations may be relevant with regard to the question whether a meaningful result will be achieved. However that is not the only consideration to be taken into account. Unfortunately very little if any, has been said in the founding affidavit with regard to the extent to which the impugned decisions have already been acted upon and what the prejudicial consequences, if any, will be. I shall now consider each of these factors separately.

Consequences of impugned decisions

[62] When considering the consequences or the extent to which the impugned decisions have already been acted upon, it is important to take into account that these decisions (to enter into the lease agreement and to conclude the addenda thereto) have already become inseparable long ago. The lease agreement was concluded on 24 August 2009, the first addendum thereto on 12 April 2010 and the second addendum on 6 April 2011. It has been pointed out in the answering affidavit that on the strength of these decisions, the building that houses the National Head Office of the Commission was designed, built and furnished with movable and immovable fittings to suit the Commission's organisational structure and constitutional function. It is not in dispute that the Commission took occupation of the new building already on 13 September 2010 and is still occupying it. The lease agreement will terminate on 3151 August 2020.

[63] It is therefore clear that what has already been done, cannot now be undone. It has been contended by the Commission that an order should be granted suspending the invalidation of the existing lease agreement. This appears to be a request to suit the Commission only as it will obviously be without accommodation if the lease agreement were to be terminated immediately. Furthermore, it would be important to ascertain for how long should the invalidation of the existing lease agreement be suspended. It may take months or even years for a new procurement process to be finalised, not to contemplate another new building to be constructed in the meantime. The Commission has once again failed to provide any meaningful information in this regard.

Meaningful result

[64] The next question to be considered is whether a meaningful result will be achieved if the relief sought would be granted. It was contended by the Commission that if the decisions concerned are to be set aside, it will enable the Commission to institute a new procurement process to conclude a new lease agreement and to determine the extent to which the parties have been enriched. Save for this contention, no facts have been pleaded by the Commission to explain whether any meaningful result will be achieved if the relief sought would be granted. In this regard it is important to take into account the financial implications, not only for the respondent, but also for the Commission if it were to institute a new procurement process to conclude a new lease agreement. Again, no meaningful information has been provided.

[65] It was contended on behalf of the respondents that in the absence of any evidence in this regard, there is no guarantee that the lease of new accommodation will not come at a greater cost than the public is currently paying. It has also been pointed out in the answering affidavit that the building now being occupied by the Commission is by no means an ordinary office building. It is a building especially designed and built to suit the organisational structure and special constitutional function of the Commission. Taking into account these facts, it has been contended that the Commission and the public will probably again have to pay for all the movable and immovable fittings necessary to furnish the Commission's new accommodation to suit its special needs. Nothing has been put forward to counter this contention.

Prejudice

[66] It was alleged in the founding affidavit that the ancillary relief sought by the Commission has been tailored to ensure that Abland and the Trust will not suffer prejudice as a result of the delay in bringing this application. It was also alleged that it must have been clear to Abland and the Trust that the procurement of additional movable and immovable fitting out expenses in terms of the lease was patently unlawful in that it was subject to no public, transparent or competitive bidding process. Finally, according to the Commission it is not in the public interest for public funds to continue to be wasted on excessive expenditure on a lease that has been irregularly awarded.

[67] This is denied by the respondents According to them the Trust will suffer severe prejudice. First, it will suffer a massive loss of the rental it would otherwise have received for the remainder of the lease agreement and, second, the Trust will incur massive accelerated obligations in terms of two finance agreements with the financier, Rand Merchant Bank, which are intimately linked to the lease agreement.

[68] It was pointed out that the Abland Consortium, now the Trust, built the head office especially for the Commission to suit its unique organisational structure. Because of its size, finding a tenant (or tenants willing to share occupation) for this building will be a difficult task that will almost inevitably take longer than one year. Should the lease agreement be prematurely terminated, the special features of the building will for the most part be wasted and taxpayers will again have to pay for the construction of a new building with all of these features. According to the respondents the present building would not be occupied by another tenant (or tenants) in its current configuration. The interior would have to be redesigned and refurbished at great cost before it can be utilised again. The cost of refurbishing will be approximately R15 205 607.00. The overall loss of rental income, should a new tenant be found in one year, will be approximately R58 008 283.00. These allegations are not contradicted by the Commission in its replying affidavit.

[69] According to the respondents the financier, Rand Merchant Bank, has extended two loan facilities to the Trust in the total amount of R171 521 268.00. The outstanding amount in terms of the loan agreement as at 2 March 2015, was R128 196 654.00. In terms of the finance agreement the invalidity or termination of the lease for any reason whatsoever constitutes an event of default which would entitle Rand Merchant Bank to claim and recover from the Trust immediate repayment of all amounts owing in connection with the finance agreement. Again, these allegations are not contradicted by the Commission in its replying affidavit.

Discussion

[70] It was contended on behalf of the Commission that a flexible remedial jurisdiction is conferred on Courts by section 172(1) of the Constitution and section 8 of PAJA. Counsel for the Commission strongly relied on the Allpay­ decision (par 38 supra) where the Constitutional Court set aside an irregular award to Cash Paymasters of a tender for the administration of social grants.

In that case Cash Paymasters had been administering grants for several years and the South African Social Security Agency would not have been able immediately to take over the administration of grants if the involvement of Cash Paymasters was terminated. The Court accordingly called for a dedicated hearing on the appropriate remedy to be handed down alongside the order setting aside the award of the tender to Cash Paymasters (par 96 of the judgment).

[71] Counsel for the Commission also relied on the subsequent judgment of the Constitutional Court, generally referred to as the Al/pay remedy judgment (Allpay Consolidated v Chief Executive Officer, SASSA 2014 (4) SA 179 (CC)). It was contended that in terms of this latter judgment two important principles are to be taken into account. First, no party should profit at the public expense from a contract that has been awarded through an unlawful tender process and, second, the Courts have an obligation to exercise their flexible remedial powers under section 172(1) of the Constitution and section 8 of PAJA to give effect to the first principle without disrupting the performance of public functions.

[72] This argument as well as the nature and extent of the relief sought must be considered within the context of what is relevant at this stage. I am not now called upon to determine the merits of the relief sought, but to consider the nature thereof for purposes of deciding the application for condonation. Put differently, this is not the stage where I have to exercise my remedial powers under section 172(1) of the Constitution and section 8 of PAJA. It appears to me that counsel for the Commission, when relying on the Al/pay-decisions, did not always keep this context in mind during his able argument. The two principles flowing from the Allpay remedy judgment, as pointed out by him, should also be understood within this context. These principles may be decisive to determine what form of relief should ultimately be granted, but not when considering an application for condonation. If this were to be the position, it would effectively, in principle, preclude a finding that an application for condonation should be refused. This, in my view, could never have been the intention.

[73] When considering the extent to which the impugned decisions have already been acted upon, it is clear that finality in the execution thereof has already been achieved long ago. The Commission took occupation of the new building on 13 September 201O and is still occupying it. These transactions cannot be reversed after five years in which the Commission has enjoyed occupation and used all the equipment within the course of its business. The request of the Commission that an order be granted suspending the invalidation of the existing lease agreement will, in my view, result in a great deal of uncertainty. There is no evidence to indicate for what period the order should be suspended, taking into account that of a ten year lease agreement only about three years are left.

[74] The relief sought indicates not only a review and setting aside of the impugned decisions, but that a new procurement process will also have to be instituted. No facts have been pleaded by the Commission to explain whether any meaningful result will be achieved if the relief sought, is granted. It was contended on behalf of the respondents that in the absence of any evidence in this regard, there is no guarantee that the lease of new accommodation will not come at a greater cost than the public is currently paying. I agree with this submission. The absence of evidence with regard to additional costs in this regard is again causing a great deal of uncertainty. It is possible, if not probable, that no meaningful result will be achieved.

[75] When considering the possibility of prejudice, very little, if any, has been said in the founding affidavit with regard to this subject. On the other hand, a detailed explanation has been given by the respondents about not only potential prejudice, but also actual prejudice to be suffered by them. Taking into account the amounts involved the prejudice appears to be extensive. This does not only apply to the Trust, but possibly also to the public in general. Should the lease agreement be prematurely terminated, the special features of the building will probably for the most part be wasted and taxpayers will have to pay again for the construction of a new building with all of these features. Having regard to these considerations, it appears unlikely that a meaningful result will be achieved. There are too many questions without any answers.

THE

KHWELA CITY RESPONSE

[76] Khwela City (the third respondent) did not file a notice of intention to oppose the application. However, on 19 August 2015 an affidavit was filed by Khwela City which is ten months after the Commission had launched this application and four months after the filing of the resondent's answering affidavit.

[77] The Khwela City affidavit purports to be a neutral affidavit by a party that has elected to abide the decision of the Court. It has been alleged that Abland and Khwela City had a long business relationship prior to participating in the procurement process.

According to Khwela City certain discussions took place with regard to the size of buildings, occupation dates and the fact that Khwela City "were submitting the proposal to the applicant on behalf of inter alia the first respondent and its other partners in the West

End Office Park Development”. The explanation given by Abland is that it was not privy to the bid prepared and filed by Khwela City in respect of the West End Property and also did not play a role in formulating the Khwela City proposal or was aware of its contents prior to it being submitted to the Commission.

[78] Khwela City was not represented during argument. Counsel for the Commission submitted that if the version of Khwela City is correct, Abland and Khwela City effectively engaged in collusive tendering and BEE fronting in which neither Abland nor Khwela City disclosed their true relationship to the Commission. He pointed out that it is not possible to determine this dispute of fact on the papers and requested, in the event that this Court is unable to set aside the original award of the lease to Abland, that this dispute of fact be referred to oral evidence so that it can be established whether Abland was guilty or innocent of any wrongdoing.

[79] It was contended on behalf of the other respondents that the filing of the Khwela City affidavit is not only irregular, but also an attempt by the Commission to introduce a new ground of review. It was pointed out that the Khwela City affidavit is in fact an attempt to support the Commission and that this affidavit "is the product of obvious cooperation between it and the Commission".

[80] Fortunately, I need not have to deal with these allegations for two obvious reasons. First, Abland, Khwela City and the Trust are all respondents and there is no lis or pending proceedings between them in this matter. Khwela City has not been joined as an applicant and is not seeking any relief against the other respondents It is therefore not necessary to consider any dispute which may exist between them or to refer this application to oral evidence.

[81] Second, if reference to the Khwela City affidavit is intended to incorporate a new ground of review, such an attempt should not be allowed in the absence of good cause shown. The general rule, which has been laid down repeatedly, is that an applicant must stand or fall by his founding affidavit and the facts alleged therein. It is pertinently stated by the deputy chairperson in the Commission's replying affidavit that "I have no knowledge of whether Mr Delport (on behalf of Abland) or Ms Brown (on behalf of Khwela City) is telling the truth". If it was the intention to introduce another ground of review, this is a very speculative way of doing so. But more importantly, in view of the deputy chairperson's remark there appears to be no dispute of fact between the Commission and the Trust: For these reasons also, the request that the application be referred to oral evidence cannot be allowed.

CONCLUSION

ON CONDONATION

[82] I must now finally decide whether it will be in the interests of justice to grant condonation and to allow for an extension of time as envisaged by section 9 of PAJA. In this regard I take into account the excessive delay prior to the bringing of the application, the inadequate explanation for the delay given by the Commission and the absence of reasonable prospects of success on the merits with regard to the impugned decisions. I also take into account that the relief sought is not only extensive with regard to the nature and extent thereof, but also that it lacks any meaningful result and will most probably, if ultimately granted, cause severe prejudice to the Trust. Furthermore, a proper consideration of the relief sought has already indicated that a great deal of uncertainty will follow if this relief were to be granted.

[83] In this regard it is important to point out that there is also a public interest element in the finality of administrative decisions and the exercise of administrative functions. To this one should also add considerations of pragmatism and practicality ( Chairperson , Standing Tender Committee & Others v JFE Sapela Electronics (Pty) Ltd & Others 2008 (2) SA 638 (SCA) par 28). Ultimately, the decision whether to condone a delay is based on whether the interests of justice so require. In my view that has not been demonstrated.

ORDER

In the result I make the following order:

(1) The application for condoning the late filing of the applicant's review application is refused;

(2) The main application is dismissed with costs, including the costs consequent upon the employment of two counsel.

____

JUDGE

OF THE HIGH COURT

PRETORIA

Date: 3/8/2017