K2011148986 (South Africa) (Pty) Ltd v State Information Technology Agency SOC Limited and Others (3996/2019) [2020] ZAFSHC 135 (18 August 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 3996/2019

In the matter between:

K2011148986 (SOUTH AFRICA (PTY) LTD Applicant

And

STATE INFORMATION TECHNOLOGY

AGENCY SOC LIMITED 1ST Respondent

THE MEMBER OF THE EXECUTIVE

COUNCIL FOR THE DEPARTMENT OF

TREASURY OF THE FREE STATE

PROVINCIAL GOVERNMENT 2ND Respondent

THE HEAD OF THE DEPARTMENT OF

PROVINCIAL GOVERNMENT 3RD Respondent

ALENTI 220 (PTY) LTD

(REGISTRATION NUMBER: 2009/000902/07) 4TH Respondent

BHR BUSINESS SYSTEMS (PTY) LTD

(REGISTRATION NUMBER: 1995/001900/07) 5TH Respondent

GEROX TRADING CC

(REGISTRATION NUMBER: 2009/152076/23) 6TH Respondent

KRUGER MANGAUNG (PTY) LTD

(REGISTRATION NUMBER: 2016/217000/07)

7TH Respondent

LEROSTYLE (PTY) LTD

(REGISTRATION NUMBER: 2012/000018/07)

8TH Respondent

LESEDI ICT (PTY) LTD

(REGISTRATION NUMBER: 2016/116775/07) 9TH Respondent

OLIVESTMENTS JOSEVIO-TOL

DISTRIBUTORS JOINT VENTURE 10TH Respondent

CORAM: NAIDOO, J et CHESIWE, J

HEARD ON: 25 MAY 2020

JUDGMENT BY: CHESIWE, J

DELIVERED ON: 18 AUGUST 2020

INTRODUCTION

[1] This is a review application in which the Applicant seeks the review and setting aside of a decision of the first respondent and/or the second defendant and/or the third respondent, not to award it the tender relevant to this matter, in respect of the provision of office equipment and technical support. The tender was awarded to the Fourth to Tenth Respondents. Adv. CD Pienaar represented the applicant, Adv. M Tshivhase represented the first respondent, Adv. PT Masihleho the second and third respondents, Adv. C Snyman the fourth respondent, Adv. S Grobler SC the eighth respondent and Adv. N Snellenburg the tenth respondent. The fifth, sixth, seventh and ninth respondents were not represented and appeared to play no part in this application.

[2] At the commencement of proceedings, the applicant informed the court that he was not pursuing any relief against the eighth and tenth respondents. He was also not seeking any order for costs against them, including the costs of 9 March 2020. Adv. Grobler and Adv. Snellenburg were thereafter excused from attending court. The amended Notice of Motion was further amended, and the relief sought by the applicant is set out hereunder.

THE RELIEF CLAIMED

[3] The Applicant seeks the following relief ex facie the amended Notice of Motion:

“1. That the applicant’s non-compliance with the provisions of Rule 53 of the Uniform Rules of Court be condoned and that this application be heard as an urgent review application in accordance with the time periods as set out in the notice of motion;

2. That the first respondent’s decision to disqualify the applicant’s tender, submitted in response to public tender

‘RFB1818/2018: Request for Pre-Qualification for the Supply, Delivery, Installation, Commissioning and Maintenance of Office

Automation Solutions to Free State provincial Treasury (“the tender”) be reviewed and set aside;

3. That the decisions by the first respondent and/or the second respondent and/or the third respondent not to award the tender to the applicant be reviewed and set aside;

4. That it be declared that the applicant’s tender, submitted in response to the public tender complies with the technical mandatory requirements as stipulated in Annex A.2 of the tender specifications;

5. That the decisions referred to in paragraphs 2 and 3 above be substituted with a decision whereby the tender is awarded for a 3 year period to the applicant.

5.1 Alternatively, that the tenders be referred back for re-evaluation by the first respondent, within 30 days after the granting of the order, in accordance with the tender specifications, the first respondent’s supply chain management policy..

6. That the decisions by the first respondent and/or second respondent and/or the third respondent to award the tenders to and to conclude contracts with the fourth to tenths respondents, alternatively the fourth respondent, the sixth respondent, the seventh respondent, the eighth respondent and the tenth respondent be reviewed and set aside;

7. That the first respondent be ordered to pay the costs of this application;

8. In the event that the application is opposed by any of the other respondents, that such respondent and/or respondents be ordered to pay the cost of the application jointly and severally with the first respondent. No order for costs is sought against the eighth and tenth respondents”

BACKGROUND

[4] The first respondent (SITA) issued a tender on 9 November 2018 calling upon interested parties to submit a bid for Public Tender

RFB1818/2018. The tender was for suppliers to submit bids for prequalification accreditation for supply, installation, commissioning and maintenance of office automation solutions for the Free State Provincial Government. The tender document clearly stated that: “The bidder must be a registered OEM (Original Equipment Manufacturer) partner/reseller to supply, delivery (sic), install, configure, commission, support and maintain shredders.” In terms of the invitation, a compulsory briefing

was held on 11 December 2018 and tenderers had to submit their tenders by no later than 18 January 2019.

[5] On 14 March 2019, SITA requested from the applicant clarification in respect of its B-BBEE status. On 29 March 2019, the Technical Evaluation Committee (“the TEC”) submitted the evaluation report, in terms of which the TEC disqualified the applicant’s bid from proceeding to the final stages of evaluation due to non-compliance with the technical mandatory requirements. The TEC in the report concluded that the fourth to tenth respondents complied with the mandatory and functional requirements, and recommended that the tender be awarded to the fourth to tenth respondents. On 10 May 2019 the third respondent notified the fourth to tenth respondents that their respective tender bids had been accepted. On 17 May 2019 the Acting Head of the Treasury informed the Head of SITA that the tender has been finalised and the successful bidders will commence with the contract on 1 June 2019.

[6] According to the Applicant, during May 2019, it came to its attention that six (6) tenderers were appointed by SITA and Nashua was the unsuccessful tenderer. The Applicant immediately instructed Peyper Attorneys to request from SITA the reasons for the unsuccessful tender.

[7] SITA did not respond timeously to the request. The applicant proceeded to institute an application on 19 June 2019 under case number 2721/2019, applying for an order that directed SITA to furnish written reasons as to the applicant’s failure to secure the tender, as well as provide documentation regarding the evaluation of the tender process. SITA in the records for reasons provided the applicant with the following reasons that: “K2011148986 (SA) Pty Ltd‘(SA) Pty Ltd t/a Nashua Bethlehem – the bidder did not comply with technical mandatory, functionality and proof of concept requirements;

2.1 Section 6.2.2 Technical Mandatory Requirements for Shredders, and

2.2 Section 6.2.3 Technical Mandatory Requirements for Fax mail machine, in that the bidders OEM’s letters did not mention Nashua Bethlehem as the tendering entity.”

[8] The respondents raised a number of points in limine which have to be determined by this court. The issues for determination being whether the deponent to the founding affidavit has locus standi to institute the proceedings without any evidence of authority; whether the application is urgent; whether the Applicant’s

failure to join the relevant Provincial Departments who have an interest in the outcome of this application, is fatal to the application.

URGENCY

[9] Adv. Pienaar, on behalf of the Applicant, submitted that events had overtaken urgency. Truncated time periods, for filing of their papers, were agreed with the respondents, and they cannot pursue the point of urgency now. He submitted that the Applicant had made out a case for urgency. Counsel on behalf of the Respondents disputed that the Applicant has made out a case for urgency, submitting that it was self-created and moved for the matter to be struck from the roll.

[10] Rule 6(12) provides that in an urgent application, the court may condone non-compliance with the Rules regarding forms and

service.[1] The court, in dispensing with the forms and service provided for in the Rules, may also make such orders as it deems fit. However, the procedure set out in rule 6(12) is not there for the taking. An applicant has to set forth explicitly the circumstances which he avers render the matter urgent. More importantly, the applicant must state reasons why he claims that he cannot be afforded substantial redress at a hearing in due course. The question of whether a matter is sufficiently urgent to be enrolled and heard as an urgent application is underpinned by the issue of absence of substantial redress. The Rules allow the court to come to the assistance of such a litigant where, if the latter were to follow, the normal course laid down by the Rules, will not obtain substantial redress. An applicant must make out his case in that regard.

[11] In terms of Rule 14 of the Rules of Procedure forJudical Review of Adminsitrative Action,[2] (“the PAJA Rules”) the court may shorten a period prescibed in the PAJA Rules regarding review proceedings before court.

[12] In Millenium Waste Management v Chairperson, Tender Board,[3] the SCA said the following: “It appears that in some cases, applicants for review approach the High Court promptly for relief but these cases are not expeditiously heard and as a result by the time the matter is finaly determined, practical problems militating

against the setting aside of the challenged decision would have arisen. Consequenlty the scope of granting an effective relief

to vindicate the infringed rights becomes drastically reduced. It may help if the High Court to an extent possible, gives priority to these matters.” (my emphais)

[13] During May 2019, the applicant discovered that, the application for the tender bid was unsuccessful and immediatley requested its legal representative to request reasons from SITA. SITA failed to respond to the request. The applicant on 19 June 2019, launched an application, under case number 2721/2019, for an order directing SITA for written reasons. On 29 July 2019, SITA provided the applicant with documents and reasons for its decision. SITA did not deliver all the documents as requested by the applicant. According to SITA, the documents contain information of the other tenderers that could not be disclosed. On 28 August 2019, the applicant proceeded with the urgent application for a review and enrolled it for hearing on the 2 December 2019. All the respondents filed their notice of intetion to oppose the application. As the documents were not completed, SITA delivered to the applicant new documents, that prompted the applicant to file its amended notice of motion and first supplementary affidavit.

[14] From the correspondence of the applicant’s attorney, annexure “FA9”, dated 1 August 2019, it is noted that due to the failure of SITA to furnish the record on time, the applicant had to proceed with an application to compel. The following is noted on the annexure ”FA9”: “1. We confirm that the application to compel delivery of the reasons and documents were removed from the roll this morning and an order in terms of the agreed draft order was made an order of court.”

[15] Rule 53 (b) provides that within 15 days after receipt of the Notice of Motion the applicant is to be supplied with the record of the proceedings. From the date on which the Review Application was launched, SITA furnished the applicant with the an incomplete record of the proceedings. The applicant cannot be faulted for having approached this court with an Application to Compel, though it was removed by agreement between the parties. The applicant was within its constitutional rights to obtain the record of proceedings as it is imperative to have the record for purposes of the review application. The applicant did not comply with the truncated time periods as set out in the notice of motion, as such truncated times had to be revised due to the late delivery of the the tender documents of the fourth to tenth respondents. It has been emphasized by the courts in several review matters that without the records, a court cannot perform its constitutionally

entrenched review function.[4] The consequences of lack of such information will, in turn, affect a litigant’s rights in terms of section 34 of the Constitution, and thus violate those rights; such a litigant will not have a fair public hearing before court, without the record of proceedings. Consequently, I find that the applicant’s

application fell to be treated as urgent, as tenders generally have a limited lifespan. In this case, the contract for the tender is only for a period of three years.

AUTHORITY TO INSTITUTE THE REVIEW APPLICATION

[16] SITA and the fourth respondent (Alenti 220), in their Answering Affidavits as well as in their Heads of Argument disputed that the deponent, Mr Mario Engelbrecht had the authority to launch the review proceedings on behalf of the applicant, in that the deponent failed to attach (to his Founding Affidavit) the resolution granting him authority. The Applicant’s contention in its Heads of Argument is that, Mr Engelbrecht was duly authorised to launch the proceedings and this was supported and proven by the resolution of the directors that was attached to the replying affidavit.

[17] The question is whether the applicant was duly authorised to launch the review application. In M & V Tractor & Implement Agencies BK, the court considered three cases simultaneously, where M & V was the applicant against three different respondents, namely, Vennotskap D S U Cilliers & Seuns, Hoogkwartier Landgoed (Edms) Bpk and Olierivier Landgoed (Edms) Bpk, with Kelrn Vervoer (Edms) Bpk as the intervening party[5] In the context of liquidation and sequestration proceedings, Olivier AJ, said (and which was succinctly paraphrased in the Headnote of that matter): “…. Therefore, where the deponent acting on behalf of an applicant company lacks capacity to launch sequestration and liquidation proceedings on behalf of the company, and the respondent objects thereto, that want of capacity cannot later be remedied by a decision of the directors of the company which did not exist at the stage when the application was launched. Such a later decision will also not serve as a ratification of, and give retrospective effect to, the capacity to launch such application.”

[18] In my view this would apply to any application being launched on behalf of a company or other legal entity. The court in M & V referred to the matter of Interboard SA (Pty) Ltd v Van Den Berg,[6] where an objection was raised against the locus standi of a financial manager bringing an application on behalf of a company. He, at that stage, had no authority to act for the company, as no resolution was taken authorising him to do so The company later passed a resolution conferring the necessary authority on him and ratifying his action in bringing the application Such ratification was held not to be sufficient to defeat the objection to locus standi.

Hattingh J, in Interboard said at 168D “Miles had no authority to launch the sequestration proceedings. He cannot, after objection has been taken, amend or seek to amend his founding affidavit by relying upon a resolution that did not exist when the objection was taken”. Hattingh J followed the reasoning and judgment in South African Milling Company (Pty) Ltd v Reddy. [7]

[19] SITA and Alenti 220 raised their objection with regard to the authority of the deponent in their respective Answering Affidavits,

dated 17 February 2020 and 19 February 2020. The applicant attached the company resolution letter to its Replying Affidavit, as annexure “R1”on page 943. The resolution letter is dated 28 February 2020; according to the court stamp, the Notice of Motion was issued on 28 August 2019 and the amended Notice of Motion is dated 11 December 2019. The Founding Affidavit was deposed to on 28th August 2019. Thus the company resolution was not attached to the Founding Affidavit, and in any event the resolution letter is dated six months after the Founding Affidavit was deposed to. It was only attached after an objection was raised by SITA in its Answering Affidavit dated 19 February 2020 and Alenti 220 in its Answering Affidavit dated 17 February 2020. As stated in Interboard a deponent cannot be clothed with authority to bring an application by relying on a resolution that was not taken when the application was launched.

[20] The deponent in the founding affidavit only mentioned the following: “4. I am duly authorised to launch these proceedings on behalf of the applicant.

5. I am, as director, personally involved in the business activities of the applicant and the documents and records which relate to the subject matter of this application, as referred to herein, fall under my personal control. I have acquainted myself with the contents hereof.”

[21] The Founding Affidavit makes no mention of the company resolution. The deponent sought to amend this defect in the Replying Affidavit by attaching the resolution

that simply said: “2. All steps previously taken by Mario Engelbrecht on behalf the company is hereby rectified as it may be necessary” As mentioned in Interboard, a later decision will not serve as a ratification of or give retrospective authority for the launching of the application. Rule 6 of the Uniform Rules of Court provides that the Applicant’s right/authority to apply, that is, the applicant’s locus standi, should be established in the Founding Affidavit and not in the Replying Affidavit. The deponent to the affidavit need not be

authorised by the party concerned to depose thereto, it is the institution of the proceedings thereof that must be authorized. In my view and taking into consideration the above, the applicant cannot rectify the defect in its application retrospectively. The court cannot therefore find that Mario Engelbrecht had the necessary authority to bring the review application in this matter.

NON-JOINDER

[22] I now turn to deal with the non-joinder of the Provincial Government Departments. SITA and Alenti 220’s contention is that the applicant did not join the Provincial Government Departments which have a direct and substantial interest in the matter. The applicant’s contention is that the alternative relief it sought against SITA in the amended notice of motion will not affect the provincial departments nor prejudice them.

[23] Rule 10 (3) of the Uniform Rules of Court deals with who should be joined or cited as Applicants/Respondents. In Judicial Service Commission and Another v Cape Bar Council and Another,[8] the court held that: “it has by now become settled law that the joinder of a party is only required as a matter of necessity – as opposed to a matter of convenience – if that party has a direct and substantial interest which may be affected prejudicially by the judgment of the court in the proceedings concerned.”

This matter was cited with approval in Fluxmans Incorporated v Lithos Corporation of SA (N0. 2),[9] where the court said at para 5: “Parties may only be joined as a matter of necessity and not convenience. It is only necessary if the parties sought to be joined would be prejudicially affected by the judgment of the court in the proceedings.”

[24] Adv. Pienaar submitted that the applicant should be added to the list of the successful tenderers, so that they are on the list should their services be required by any of the Provincial Departments and that this will not prejudicially affect the Provincial Departments. The different Heads of the Provincial Departments are for obvious reasons confined to the budget that was allocated to his/her respective department when the tender was approved and published. The funds would have accordingly been utilised to meet the requirements of the successful tenderer in respect of that department. To simply add on the applicant would indeed affect the department’s budget, including the contract obligations that the Heads of the Departments have already signed with the successful tenderers. There would, therefore, be no purpose in adding the applicant to such a list.

[25] Furthermore, the Free State Provincial Government Departments have a direct and substantial interest in this matter, as they are the end users of the contracts that were awarded. Any court order in this matter will affect them. The relief sought by the applicant will have a direct impact on their rights as end users, making it imperative that they are joined in this application. The departments will be bound by the new contract, bearing in mind the possible adverse financial implications that those departments will suffer as the whole process must be kept in abeyance to the resolve the applicant’s tender dispute.

[26] In City of Johannesburg and Others v South African Local Authorities Pension fund and Others,[10] the SCA held that: “As to the relevant principles of law, it has now become well established that, in the exercise of its inherent power, a court will refrain from deciding a dispute unless and until all persons who have a direct and substantial interest in both the subject-matter and the outcome of the litigation, have been joined as parties.”

[27] The non-joinder of the Provincial Departments and their accounting officers would indeed constitute a defect in the application. I am satisfied that the court order, if granted in favour of the applicant, would prejudice the Provincial Departments who have already entered into contracts with the fourth to tenth respondents. It will be just, equitable and fair that all Free State Provincial Departments, who have an interest in this matter be allowed the opportunity to present their cases before court. In my view, the non-joinder of such parties renders this application defective. Had it not been for the applicant’s deponent lacking authority to bring this application, the applicant may well have been allowed to join the relevant Provincial Departments, if it were practical to do so.

CONCLUSION

[28] The applicant and respondents presented extensive arguments in respect of the merits of the application and the grounds relied upon by the applicant for this review. It is unnecessary to deal with the merits or the grounds for review, in view of my findings in respect of the points in limine, set out above, which are dispositive of the application.

COSTS

[29] The basic rule is that costs are in the discretion of the court. This discretion is wide, though not unfettered, and must be exercised judicially upon consideration of all the relevant facts. Having considered that the application must be dismissed, there is no reason why the applicant should not be ordered to pay the costs of the application.

[30] The costs of 9 March 2020 stood over for later adjudication. It appears on the papers that on the mentioned day all the parties were ready to argue the matter, but the applicant was not ready and the matter had to be postponed to 25 May 2020. It is therefore fair that the applicant be ordered to pay the costs of 9 March 2020.

ORDER

[31] Therefore the following order is made:

1. The application is dismissed with costs, including costs of the postponement of 9 March 2020.

______________

S. CHESIWE, J

I concur

S. NAIDOO, J

On behalf of Applicant: Adv. CD Pienaar

Instructed by: Peyper Attorneys BLOEMFONTEIN

(Ref: G. Steenkamp/ck)

On behalf of 1st Respondent: Adv. MA Tshivhase

Instructed by: Phatshoane Henney Attorneys

BLOEMFONTEIN

(Ref:STA40/0002/LEC/ew

On behalf of 2nd and 3rd

Respondent: Adv. PT Masihleho

Instructed by: Office of the State Attorney

11th Floor Fedsure Building BLOEMFONTEIN

(Ref: 532/20191021/P3K)

On behalf of the 4th Respondent: Adv C Snyman

(Ref: ITE6/0057/LEC/ew)

On behalf of 8th Respondent: Adv. S Grobler SC

Instructed by: Kramer Weihmann & Joubert Attorneys

(Ref: D Muller/jvdw/TLj118)

On behalf of 10th Respondent: Adv. N Snellenberg SC

Instructed by: Jacobs Boucher Attorneys

(Ref: N Boucher/N0004)

[1] Commissionner, SARS v Hawker Air Services (Pty) Ltd [2006] ZASCA 51; 2006 (4) SA 292 at 299 par 9.

[2] Promulgated in Government Notice R966 of 9 October 2019 in accordance with section 7(3) of the Promotion of Administrative Justice Act 2000, (PAJA).

[3] 2008 (2) SA 481 (SCA), par 34

[4] Democratic Alliance v The Acting National Director of Public Prosecution (288/11) 2012 ZASCA 15 20 March 2012.

[5] 2000 (2) SA 573 at 579H/I-580D/E

[6] 1989 (4) SA 166

[7] 1980(3) SA 431 (SE)

[8] 2013(1) SA 170 (SCA) at para [12]

[9] 2015(2) SA 322 (GJ)

[10] [ 2015] JOL 32956 (SCA) at par [9]