Lengane Investments (Pty) Ltd v Chairperson: Department Procurement Committee: Depaertment of Transport, Roads and Community Safety, North West Province (2955/2010) [2011] ZANWHC 91 (23 June 2011)

NORTH WEST HIGH COURT, MAFIKENG

CASE NO. 2955/2010

In the matter between:

LENGANE INVESTMENTS (PTY) LTD .........................................................APPLICANT

and

THE CHAIRPERSON: DEPARTMENTAL PROCUREMENT

COMMITTEE, DEPARTMENT OF TRANSPORT, ROADS &

COMMUNITY SAFETY NORTH WEST PROVINCE ..................................RESPONDENT

____________________________________________________________________________

JUDGMENT

GUTTA J.

[1] The applicant applied for an order against the Chairperson: Departmental Procurement Committee, Department of Transport, Roads & Community Safety North West Province, that:

1.1 the respondent be held in contempt of court;

1.2. the respondent be committed to goal for a period of 3 months, alternatively such period as determined by the above Honourable Court or such terms as are to the above Honourable Court meet;

1.3 the respondent be ordered to pay the costs of the application.

[2] The application was served on the office of the State Attorney on 17 December 2010, who on 13 January 2011 filed a notice of intention to oppose.

[3] The State Attorney also filed a notice in terms of Rule 30A for the striking of the matter due to non-compliance with the rules

pertaining to service. They did not persist with the said application.

[4] The matter was set down for hearing on 02 June 2011 and pursuant to the service of the notice of set down, the State Attorney withdrew as the respondent’s attorney of record and filed correspondence addressed to the applicant’s attorney.

[5] In the correspondence, the State Attorney states, inter alia, that their client, namely, the Department of Public Safety, is the successor in title of the Division of Community Safety of the former Department of Transport, Roads & Community Safety, North West (“the department”) and that pursuant to filing the notice of intention to oppose, they consulted with officials from the department and ascertained that Mr K. Odame Takyi (“Mr Takyi”) was in his capacity as Chief Financial Officer of the Department the Chairperson: Departmental Procurement Committee of the Department at the time when the order was granted and that he is no longer in the employment of the Provincial Government of the North West and his whereabouts are not known to their client.

[6] The State Attorney further stated, inter alia, that given the nature of the relief sought, namely, contempt of Court for failing to comply with a court order, that the application has to be served personally on Mr Takyi in accordance with the provisions of Rule 4(1)(a)(i) of the Uniform Rules of Court.

[7] Mr Paul Namate, the Director: Legal Services at the Department of Public Safety, North West also filed an affidavit, wherein he confirmed that Mr Takyi was the Chairperson: Departmental Procurement Committee of the Department when the order was granted and remained the chairperson after the order, when the decision was taken not to award the tender and to re-advertise it. He further confirmed that Mr Takyi’s employment with the Provincial Government was terminated. Mr Namate alleged that service of the application was effected on the State Attorney and not Mr Takyi, and that Mr Takyi’s whereabouts are not known to the Provincial Government.

[8] At the hearing of the matter, Mrs Zwiegelaar had a watching brief on behalf of the Department of Public Safety, North West.

[9] There are two questions that I have to consider, which will have a bearing on the order herein:

9.1. The first one is whether service of the application for contempt had to be effected on Mr Takyi, who was the Chief Financial Officer and the Chairperson: Departmental Procurement Committee of the Department when the order was granted.

9.2. The second question is whether the respondent has complied with the order and if he has not complied with the order, whether his non-compliance was willful and mala fide.

[10] Before considering the above two questions, it is necessary to repeat the order granted by the Court on 29 January 2009. It reads:

“1.1. That the First Respondent’s decision not to award the tender and to re-advertise the tender bearing tender reference number and description: “NWTR 113/07 – Assistance with Overload Control and Site Management of Koster Weighbridge” (“the tender”), be reviewed and set aside.

1.2. That the tender be remitted to the First Respondent for reconsideration.

1.3. That the First Respondent be ordered to comply with the following directions during the course and process of the reconsideration of the tender namely:

1.3.1. The First Respondent is to afford the Applicant an opportunity to amend its tender in accordance with a 16 hour service time period in respect of the tender for the Koster Weighbridge; and

1.3.2. That the Respondents reconsider the Applicant’s tender in accordance therewith.

1.4. That the First Respondent be ordered to pay the costs of this application on an unopposed scale.

1.5 That further and/or alternatively relief be granted.”

[11] The respondent in casu was cited as the first respondent and the North West Tender Board was cited as the second respondent.

SERVICE

[12] The modus operandi of the State and the respective government departments is for all intents and purposes virtually the same as that of a company or other legal person. It is only through its Ministers of State and other government officials that the State is able to carry out its functions. Thus, whether a Court’s order is complied with will depend on whether or not a Minister of State as well as some or other government official has carried out his or her respective duties. See East London Local Transitional Council v MEC for Health 2001 (3) SA 1133 (CkH) at paragraph [23] page 1139.

[13] The Court in East London Local Transitional Council v MEC for Health supra at paragraph [27] page 1140 held that a creditor of the State acquires the right to initiate contempt proceedings against the responsible Minister of the State, Member of the Executive Council of the Province, Divisional and Local Councils, including government officials at every level of government.

[14] The terms of the court order will enable the applicant to identify the person whose refusal or failure to comply with the order is punishable. But just as in the case of other offences, a person, if he contributes to the commission of the offence, can, without being the principal offender, be punishable as an accomplice. His liability is, however, accessory. See Höltz v Douglas & Associates (OFS) CC en Andere 1991 (2) SA 797 (O).

[15] In Höltz v Douglas & Associates (OFS) CC en Andere supra, an order was granted against a close corporation. The Court held that the close corporation can only comply with orders through its officers and be convicted of contempt of court if its officers, for whose conduct the corporation can be held legally liable, refuses or fails to obey the order. Where control of the close corporation by a member is terminated before the court order was granted, that member cannot be held legally liable for contempt of a court order and his conduct cannot be imputed to the close corporation.

[16] In the case of Minister of Water Affairs and Forestry v Stilfontein Gold Mining Co Ltd & Others 2006 (5) SA 333 (W), the applicant sought a contempt of court order against the first to the fifth respondents for failing to comply with an order of the Court. The second to fifth respondents were directors of the first respondent who, by the time of the hearing of the matter, had resigned en masse, while the first respondent was a gold mine. The Court held, inter alia, at paragraph 16.8 at 351H–I and 352A–B that “a director who, with knowledge of an order of court, caused the company to disobey the order, was himself guilty of contempt of court by resigning as they did, the respondents caused or were the principal cause of the first respondent’s failure to comply with the court order, and for that they had to be held accountable”.

[17] At paragraph [16.9] at 352H, the Court held further that “notwithstanding their resignation, the second to fifth respondents had to be held responsible for the first respondent’s non-compliance with the court order”.

[18] Mr Van Rooyen, counsel for the applicant, submitted that the order is against the Chairperson of the Department in his official capacity and that it was not necessary to serve the application on Mr Takyi. He submitted that the fact that Mr Takyi’s services had been terminated is irrelevant as the present incumbent holding the said position should be found to be in contempt.

[19] The fact is that the Department of Public Safety is now the successor in title of the division of Public of Safety of the Department. Can Mr Takyi’s conduct be imputed to the official in the Department of Public Safety? The Member of the Executive Council (“the MEC”) or any other official in the Department of Public Safety can only be liable for contempt of court if:

19.1. Mr Takyi in his capacity as the Chairperson: Departmental Procurement Committee failed to obey the order;

19.2. the MEC or another official in the absence of Mr Takyi, is the responsible incumbent to ensure that the order is complied with; and

19.3. the MEC or the said official had knowledge of the order and failed to comply with the order; and

19.4. the MEC or the said official was willful and mala fide in failing to comply with the order.

[20] The MEC in the Department of Public Safety and/or the official within the Department of Public Safety chairing the Departmental Procurement Committee should have been cited as parties in the application and the application should have been served on them.

[21] Further, the process followed is flawed as the relevant person who is the subject of the contempt of court proceedings, namely, Mr Takyi, has not been served with papers and is not aware of what is alleged and complained of by the applicant. See S v Mamabolo [2001] ZACC 17; 2001 (3) SA 409 (CC).

[22] Mr Takyi should have been afforded an opportunity to explain to the Court why an order of contempt of the court order should not be granted against him or the government official who is responsible to carry out the court order in his absence.

[23] Even though the application is flawed as stated in paragraphs [18] and [19] supra, I am also of the view that the applicant has not made out a prima facie case of contempt, as set out herein below.

WAS THERE COMPLIANCE WITH THE COURT ORDER?

[24] The requirements for contempt of court are the following:

24.1 that an order was made against the respondent;

24.2. the respondent has knowledge of the order, either as a result of service or notice;

24.3 the respondent has not complied with the order; and

24.4. the respondent’s non-compliance with the order is willful and mala fide.

See Faki N.O v CC II Systems (Pty) Ltd [2006] ZASCA 52; 2006 (4) SA 326 (SCA) paras 6–10.

[25] The first two requirements are met, in that an order was made against the respondent and the tender board and they had knowledge of the order.

[26] The next consideration is whether:

26.1 the respondent failed to comply with the court order; and

26.2. if the answer is in the affirmative, then was the respondent willful and mala fide in failing to comply with the order.

[27] The applicant bears the onus to prove that the respondent failed to comply with a court order that was within the knowledge of the respondent and once the applicant has established this, the applicant is prima facie entitled to a committal order. See Noel Lancaster Sands (Edms) Bpk v Theron en Andere 1974 (3) SA 688 (T).

[28] The onus then shifts to the respondent to prove on a balance of probability that they did not intentionally defy the order or did not act mala fide in doing so. See Putco Ltd v TV and Radio Guarantee Co (Pty) Ltd & Other Related Cases 1985 (4) SA 809 (A) at 836E.

[29] Contempt of court is the willful and mala fide refusal to comply with an order issued by the Court. See Clement v Clement 1961 (3) SA 861 (T) at 866A; Frankel Max Pollak Vinderne Inc v Menell Jack Hyman Rosenburg & Co Inc & Others [1996] ZASCA 21; 1996 (3) SA 355 (A) at 367H; East London Local Transitional Council v MEC for Health, Eastern Cape & Others 2001 (3) SA 1133 (CkH) at paragraph [16] page 1137.

[30] Mr Van Rooyen, counsel for the applicant, submitted that the respondent did not reconsider the tenders as was required in terms of the court order and instead delegated its obligation to the Provincial Supply Chain Management. That accordingly the respondent

did not comply with the order and is in contempt thereof.

[31] Mr Van Rooyen further submitted that the respondent delegated its obligation to the Provincial Supply Chain Management to whom the respondent did not make a full disclosure as they were not privy to material facts which would have had a bearing on the reconsideration

of the tender.

[32] As stated supra, the order granted on 29 January 2009 was against the respondent, as the first respondent and the North West Tender Board as the second respondent. The applicant made no reference to the North West Tender Board in the application.

[33] Paragraph 1.2 of the order reads that the tender be remitted to the first respondent for reconsideration. It is common cause that the respondent (first respondent), in compliance with paragraphs 1.2 and 1.3.1 of the order, addressed a letter dated 10 March 2009 to the applicant wherein he afforded the applicant an opportunity to amend its tender in accordance with a 16 hour service time period.

[34] Furthermore, the respondent states in the said letter that upon receipt of the documents, all documents shall be handed in to an independent evaluation committee, in accordance with the court order.

[35] Finally, paragraph 1.3.2 of the order states that the respondents reconsider the applicant’s tender in accordance therewith.

[36] I engaged counsel for the applicant that that the order was directed at both the first and second respondents and not only the respondent and he replied that reference to “the respondents” was a typographical error.

[37] I am not persuaded by Mr Van Rooyen’s argument as the order speaks for itself, it is clear that both the respondents (first and second) were directed to reconsider the applicant’s order.

[38] According to a correspondence from the Deputy Director General in the office of the Chief Directorate Community Safety, dated 26 November 2009, addressed to the applicant, he states the following:

“Following the Court Order that was granted to the effect, the Departmental Procurement Committee of the then Department of Transport Roads and Community Safety requested the guidance from the office of the Provincial Supply Chain Management (previously known as the North West Tender Board) regarding the evaluation of the above-mentioned Bid.

The Provincial Supply Chain Management evaluated the above-mentioned Bid and filed a report, a copy of which is hereto attached for your perusal. We further advise that at the end of the evaluation, the latter made recommendations as appears more fully at page 7 of its report. The relevant clause of the recommendations provides the following:

‘On the basis of the above, in particular, that the tender documents do not comply with PPPFA and that there was no responsive bidder. It is hereby recommended that the tender be cancelled. The Department may consider re-advertising the bid provided there is still a need for the service and that other normal SCM requirements are met.’

In the light thereof we advise that we concur with the analysis and recommendations of the Provincial Supply Chain Management and

therefore the above-mentioned tender shall be re-advertised in terms of the relevant prescripts.”

[39] The report from the Provincial Supply Chain Management, for Mr Takyi’s attention, is a comprehensive report dated 14 May 2009. On perusal of the report, it is apparent that the Provincial Supply Chain Management re-evaluated the bid and made the following observations:

“• From the departmental evaluation report dated 28 January 2008 (table on pa 3), there is no logical link between the points in the calculation table, the recommendation of the evaluation committee and the resolution of the Departmental Procurement Committee, minutes number 26 (2007/08) dated 19 February 2008. The fact is even though the calculation table does not have prices for bidders; all bidders were allocated 30 points for price. This means the recommendations and the award made were not in line with the PPPFA.

• The tender can only cancelled if there is no responsive bidder, and not if one bidder did not comply with a specific requirement, as stated in the resolution of the Departmental Procurement Committee.

• It should be noted that we are recommending that the tender be cancelled because there is no responsive bidder and that it is not evaluable. Even if originally the applicant quoted for 16 hours the same conclusion would be reached because of the defects in the bid documentation.

• If the tender was evaluable it should be noted that the validity period should also be taken into consideration, meaning that if the validity was extended it should have been determined from all the bidders whether their prices were still valid.

• We note in your records that there were negotiations entered between the department and tenderers regarding pricing. The standard practice is that price negotiations should be discouraged, it is only in exceptional and more complex bids that provides for price

negotiations.”

[40] The Provincial Supply Chain Management in conclusion stated that, “We have evaluated tender NWTR113/07 as per your request, the court order and SCM legal requirements and standards. All documents received from your office are accompanying with this report”.

[41] As stated supra, the Deputy Director General in the office of the Chief Directorate Community Safety, on 26 November 2009 concurred

with the analysis and the recommendations of the Provincial Supply Chain Management.

[42] Accordingly, I am of the view that there was compliance with the order and the respondent is not guilty of contempt of court.

[43] In view of the above, it is not necessary to consider the second leg of the enquiry, namely, whether the respondent was willful and mala fide in his conduct.

[44] In the result, I make the following order:

a) The application is dismissed with costs.

_________________

N. GUTTA

JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING : 02 JUNE 2011

DATE OF JUDGMENT : 23 JUNE 2011

COUNSEL FOR APPLICANT : ADV J. VAN ROOYEN

COUNSEL FOR RESPONDENT : ADV C. ZWIEGELAAR (Watching brief on behalf of

the Department of Public Safety, North West)

ATTORNEYS FOR APPLICANT : GERHARD MAREE ATTORNEYS

ATTORNEYS FOR RESPONDENT : THE STATE ATTORNEY