Hall Longmore (Pty) Ltd v Rand Water and Others (46994/2012) [2016] ZAGPJHC 316 (26 October 2016)

Hall Longmore (Pty) Ltd v Rand Water and Others (46994/2012) [2016] ZAGPJHC 316 (26 October 2016)

The court found that Rand Water's automatic exclusion of the applicant's tender based on the Financial Tolerance Principle was not supported by procurement legislation, regulations, or its own tender documents. The FTP was applied inconsistently, as API's tender was also below the threshold but was accepted. The prevailing steel price justified the applicant's lower tender, and Rand Water failed to properly assess or clarify this aspect. The balance of convenience and prospects of success favoured the applicant, as no irreparable harm would result to API or Rand Water if interim relief was granted. The court held that a tender awarded unlawfully must be set aside, even if the recipient is...

Citation
[2016] ZAGPJHC 316
Parties
Applicant: Hall Longmore (Pty) Ltd; Respondent: Rand Water; Respondent: Minister of Water and Sanitation; Respondent: Africa Pipe Industries (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
26 October 2016
Case Number
46994/2012
Procedural Posture
Urgent Application / Interim Interdict Pending Review
Outcome
Interim interdict granted in favour of the applicant; further performance of the contract between Rand Water and API is interdicted pending the outcome of the expedited review.
Judges
S Weiner
Legal Topics
Public Procurement, Automatic Exclusion Policy, Interim Interdict, Balance of Convenience, Unlawful Tender Award, Promotion of Administrative Justice Act
Administrative Law Civil Procedure Commercial and Corporate Public Procurement Automatic Exclusion Policy Interim Interdict Balance of Convenience Unlawful Tender Award +1 more

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Parties

Hall Longmore (Pty) Ltd

Applicant

Rand Water

Respondent

Minister of Water and Sanitation

Respondent

Africa Pipe Industries (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Interim Interdict Pending Review

Legal Issues

  1. 1 Whether Rand Water's automatic exclusion of tenders priced 25% below its estimate is lawful under procurement legislation and its own tender documents.
  2. 2 Whether the application of the Financial Tolerance Principle (FTP) was rational, reasonable, and procedurally fair.
  3. 3 Whether the balance of convenience and irreparable harm favours granting interim interdictory relief to the applicant.

Ratio Decidendi

The court found that Rand Water's automatic exclusion of the applicant's tender based on the Financial Tolerance Principle was not supported by procurement legislation, regulations, or its own tender documents. The FTP was applied inconsistently, as API's tender was also below the threshold but was accepted. The prevailing steel price justified the applicant's lower tender, and Rand Water failed to properly assess or clarify this aspect. The balance of convenience and prospects of success favoured the applicant, as no irreparable harm would result to API or Rand Water if interim relief was granted. The court held that a tender awarded unlawfully must be set aside, even if the recipient is...

Court Disposition

Interim interdict granted in favour of the applicant; further performance of the contract between Rand Water and API is interdicted pending the outcome of the expedited review.

Orders

  • Rand Water is interdicted from taking any steps to give effect to the tender, including concluding, finalising or signing a contract with API.
  • Rand Water is interdicted from executing, making payment under, or otherwise carrying out its obligations under any contract concluded with API arising from the tender.