South Africa Judgment

High Courts - Gauteng

Lepogo Construction (Pty) Limited v City of Tshwane Metropolitan Municipality (16118/05) [2005] ZAGPHC 62 (6 June 2005)

Administrative Law Civil Procedure Tender Review Interim Interdict Fronting Allegations Preferential Procurement Irreparable Harm Absence of Alternative Remedy

Citation: [2005] ZAGPHC 62
Status: Judgment
Jurisdiction: South Africa
Court: High Courts - Gauteng
Panel: JCW van Rooyen
Case number: 16118/05

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Court: High Courts - Gauteng
Panel: JCW van Rooyen
Case number: 16118/05

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Source document

Holding and result

The court found that the applicant had established a prima facie right to have its tender considered fairly and lawfully, and that it was not afforded a proper opportunity to respond to allegations of 'fronting'. The respondent's decision was made without full investigation and without providing adequate reasons, resulting in procedural unfairness. The applicant would suffer irreparable harm if the tender was awarded to another party, as damages would not be an adequate remedy due to reputational harm and difficulties in proving loss of profit. The balance of convenience favoured the applicant, as any prejudice to the respondent was outweighed by the harm to the applicant. The court held that review proceedings were the only satisfactory remedy and granted the interim interdict prohibiting the respondent from awarding the tender to any other contractor pending final adjudication of the review application.

Court disposition

Interim interdict granted; respondent prohibited from awarding the tender to any other contractor pending review; costs awarded to applicant including costs of two counsel and costs of postponement.

Orders

Respondent is prohibited from awarding tender C78/43070 to any other contractor other than applicant pending the final adjudication of the application for review launched by applicant in this Court under case number 14991/05.
Respondent is ordered to pay the costs of this application, such costs to include the costs of two counsel as well as the costs occasioned by the postponement of the matter on 19 May 2005.

Material facts

Parties

Lepogo Construction (Pty) Limited

Applicant Counsel: PP Delport SC

City of Tshwane Metropolitan Municipality

Respondent Counsel: AT Ncongwane

Procedural history

Posture

Urgent Application / Interim Interdict Pending Review

Questions and positions

Legal issues

01
Whether the respondent's refusal to award the tender to the applicant was procedurally fair and lawful.
02
Whether the applicant was afforded a full opportunity to respond to allegations of 'fronting'.
03
Whether the requirements for an interim interdict pending review are satisfied.
04
Whether damages constitute a satisfactory alternative remedy to review proceedings.

Party arguments

Applicant: The applicant contended that the urgency of the matter was clear, as the tender would be awarded imminently unless the court intervened. It argued that it was not guilty of 'fronting', that it was not given a proper opportunity to respond to such allegations, and that its tender met all requirements and was recommended by all relevant departments. The applicant maintained that irreparable harm would result if the tender was awarded to another party, and that damages would not be an adequate remedy due to reputational harm and practical difficulties in proving loss of profit.
Respondent: The respondent disputed the urgency of the application and maintained that the applicant was guilty of 'fronting', justifying the refusal to award the tender. It argued that the applicant had caused the urgency through its own conduct and that the balance of convenience did not favour the granting of interim relief, citing potential prejudice to the municipality and residents if the tender process was delayed. The respondent also suggested that alternative remedies, such as damages, were available to the applicant.

Court’s reasoning

Legal principles

01
Setlogelo v Setlogelo 1914 AD 221 at 227; Knox D'Arcey Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A) at 372 D-I; Hix Networking Technologies v System Publishers (Pty) Ltd [1996] ZASCA 107; 1997 (1) SA 391 (A) at 398I-399E.

The requirements for an interim interdict are a prima facie right, a well-grounded apprehension of irreparable harm, a balance of convenience favouring the applicant, and the absence of any other satisfactory remedy.
02
Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA) at 471E-473D.

A party must be afforded a fair opportunity to respond to allegations affecting its rights and interests in administrative proceedings.
03
Olitzki Property Holdings v State Tender Board and Another 2001 (3) SA 1247 (SCA) at 1255 I-1.

Where a tender board irregularly fails to award a tender, the tenderer is entitled to review and an interdict, but not to damages for loss of profit or constitutional damages.
04
LC Diamond Cutting v Diamond Cutting Board 1983 (2) SA 760 (W) at 766B-767D.

The balance of convenience must weigh the prejudice to the applicant if relief is refused against the prejudice to the respondent if relief is granted.
05
Transnet Ltd v Goodman Bros (Pty) Ltd 2001 (1) SA 853 (SCA) at 871C-F (par 10) and 872A (par 16).

A claim for damages is not a satisfactory alternative remedy where reputational harm and practical difficulties in quantifying loss exist.

Ratio, limits and disposition

Ratio decidendi

The court found that the applicant had established a prima facie right to have its tender considered fairly and lawfully, and that it was not afforded a proper opportunity to respond to allegations of 'fronting'. The respondent's decision was made without full investigation and without providing adequate reasons, resulting in procedural unfairness. The applicant would suffer irreparable harm if the tender was awarded to another party, as damages would not be an adequate remedy due to reputational harm and difficulties in proving loss of profit. The balance of convenience favoured the applicant, as any prejudice to the respondent was outweighed by the harm to the applicant. The court held that review proceedings were the only satisfactory remedy and granted the interim interdict prohibiting the respondent from awarding the tender to any other contractor pending final adjudication of the review application.

Obiter and limits

The court noted that delays caused by the respondent's evasive and incomplete replies contributed to the urgency and justified the applicant's conduct.
It was observed that the water capacity problem in Hammanskraal West would likely persist for several months, and any prejudice to residents was not a bar to granting interim relief.
The court remarked that the employment of two counsel was warranted given the complexity and importance of the matter.

Court disposition

Interim interdict granted; respondent prohibited from awarding the tender to any other contractor pending review; costs awarded to applicant including costs of two counsel and costs of postponement.

Respondent is prohibited from awarding tender C78/43070 to any other contractor other than applicant pending the final adjudication of the application for review launched by applicant in this Court under case number 14991/05.
Respondent is ordered to pay the costs of this application, such costs to include the costs of two counsel as well as the costs occasioned by the postponement of the matter on 19 May 2005.

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High Courts - Gauteng

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Judgment text

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Source document

High Courts - Gauteng

Judgment

[2005] ZAGPHC 62

IN THE HIGH COURT OF SOUTH AFRICA(TRANSVAAL PROVINCIAL DIVISION)Date: 6 June

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number: 16118/05In the matter between:LEPOGO CONSTRUCTION (PTY) LIMITEDApplicantandCITY OF TSHWANE METROPOLITAN 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 law-omission to grant the applicant a full opportunity to explain questionsraised at the bid committee in regard to alleged so-called "fronting" in so far as it relatedto interests of previously disadvantaged persons in the applicant. Interim interdict granted.Remedy-no other remedy than application for review, a claim for damages not being aremedy in the circumstances.Van Rooyen AJ[1] Applicant applied on an urgent basis for an order in terms of which respondent wouldbe prohibited from awarding tender C78/43070, concerning the provision of water toHammanskraal South, to any other contractor other than applicant pending the finaladjudication of its application for review in this Court.[2] Applicant's counsel,Mr Delport,argued that urgency should not be in issue: unless anorder in terms of prayer 2 of the notice of motion is obtained before that time, respondent-2-will award tender C78/43070 to another tenderer on 9 June 2005. In the circumstancesand accepting the urgency of the application the learned Acting Deputy Judge President hasarranged for the application to be heard on 26 May 2005. Respondent's denial of theurgency of the application in par 26.1 of its answering affidavit (p 104) could, accordingly,not bebonafide. Mr Ncongwane,however, argued that urgency remained an issue. I do notagree : I have considered the question whether the applicant has not caused the urgencythrough its own lack of diligent conduct. It is true that some time elapsed since the newsthat the tender would not be awarded to any tenderer became known. However, the exactreasons as to why this happened only became clear later on and I do not believe, given thecircumstances, that the applicant was not diligent in its efforts to file the application assoon as possible.[3] The present application is an application for an interlocutory interdict. It is trite law thatthe requisites for an interlocutory interdict are: Aprima facieright; a well-groundedapprehension of irreparable harm if the interim relief is not granted and the ultimate reliefis eventually granted; a balance of convenience in favour of the granting of the interimrelief; the absence of any other satisfactory remedy.1Prima facie right[4] Applicant need not show a clear right or prove his right on a balance of probabilities. Itwill be sufficient if applicant's right isprima facieestablished although it is open to someISetlogelovSetlogelo1914 AD 221at227;Knox D'Arcey Ltd and OthersvJamieson and Others[1996] ZASCA 58;1996 (4) SA 348(A)at372 D -I;Hix Networking TechnologiesvSystem Publishers (Pty) Ltd[1996] ZASCA 107;1997(1) SA 391(A) at 3981 - 399E.Lepogo-uitspraak08/0612005 12:40 PM-3-doubt? I have no doubt that applicant has established aprima facieright in the presentproceedings: a list of the tenders considered by respondent's Bid Committee appears at p68 of the application; the tenders with numbers 6, 4, 8, 7, 5, 9, 2, 3 and 1 were alldisqualified for the reasons appearing from p 69 - 71 of the application; Applicant'salternative tender was not only the second lowest acceptable tender received by respondent,but it also obtained the third highest points in terms of the Preferential Procurement PolicyFramework Act. It complied in all respects to the tender specifications. All therespondent's relevant departments recommended that this tender should be accepted. It isclear that applicant has extensive experience of the building of reservoirs.[5] Respondent decided by a majority of three to two not to award tender C78/43070 toapplicant as it was of the view that applicant was guilty of so-called''fronting''.Thatrespondent was not guilty of"fronting"appears clearly from the founding affidavit in thereview application and in particular from the affidavit by its auditor. Although respondentrepeats the allegations of"fronting"in its answering affidavit, no factual foundationwhatsoever is laid for these allegations. A bald allegation of''fronting''in respondent'sanswering affidavit cannot detract from the positive evidence in applicant's foundingaffidavit in the review application. Applicant was not afforded the opportunity to counterthe allegations of"fronting"fully. These allegations are not denied in the answeringaffidavit. I do not agree that the mere fact that the persons who attended the interview with2WebstervMitchell,1948 (1) SA 1186(W)at118;Spur Steak Ranches LtdvSaddles Steak Ranch1996(3) SA 706C at 714 E). See also the qualification of this principle inGoalvMinister of Justice,1955 (2) SA 682(C) at 688.Lepogo-uitspraak08/06/2005 12:40 PM-4-the bid committee should necessarily have known the details of the financial management.It must have been clear that the persons interviewed were within the construction divisionof the applicant and that they were not well-informed as to the financial management of theapplicant. Applicant should have been informed that it was suspected of"fronting"andshould have been afforded the opportunity of properly countering these allegations.3Applicant was furthermore entitled to have received full reasons why its tender was notaccepted.4It is noted that even at this stage applicant has still not received the full reasonswhy its tender had not been accepted.A Well- grounded Apprehension of Irreparable Harmifthe Interim relief is not granted and the ultimate relief is eventually granted.[6] This requisite is clearly present in this application. I am convinced on the probabilities,as they feature within the mould of the present application, that the applicant will sufferirreparable harm if the tender is awarded to another tenderer on 9 June 2005.A Balance of Convenience in Favour of the Granting of the Interim Relief.[7]When considering this requisite I must weigh the prejudice to the applicant if the interiminterdict is refused against the prejudice to the respondent if it is granted. This requisitefrequently involves a consideration of the prospects of success in the main application: thestronger the prospects of success, the less need for the balance of convenience to favour theapplicant.5This requisite cannot be considered in isolation from the next requisite, namely3Logbro PropertiesCCv Bedderson NO and Others2003 (2) SA460 (SCA)atp471 E - 473D.4Transnet Ltdv Goodman Bros (Pty) Ltd2001(1) SA 853 (SCA) atp871 C -F (par 10) and again at p 872 A (par 16).5LC Diamond Cutting v Diamond Cutting Board1983 (2) SA 760(W) at p 766 B - 767 D.Lepogo-uitspraak08/0612005 12:40 PM-5-that of no other satisfactory remedy. If, as applicant submits in discussing the nextrequisite, it cannot claim the loss of profits that it will suffer if the tender is not awarded toit from respondent, this will be an important fact in tipping the scales towards applicant inconsidering the balance of convenience. Respondent avers that the balance of conveniencedoes not favour the granting of the interim interdict sought by applicant. The facts reliedupon by respondent for this submission are set out in the answering affidavit and relate tothe inconvenience which would result if the matter is not finalised now.There can be no doubt that when respondent made its decision in November 2004 not toaward the tender to applicant, it would have been aware that problems will arise with thesupply of water to residential stands in Hammanslcraal West. Yet it proceeded to take thedecision without investigating the matter properly and without affording applicant the fullopportunity to make representations to it in regard thereto. Respondent furthermore did nothesitate to delay matters by failing to give applicant full and proper reasons for its refusalto award the tender to it. I agree that the Respondent gave evasive replies to applicant'senquiries in several letters. It was only on 7 April 2005 that (incomplete) reasons werefurnished by respondent why applicant's tender had not been accepted. It am convincedthat had these reasons been given at the beginning of December 2004, this applicationwould have been brought at that time. In these circumstances and where the delay wascaused by respondent's evasive and incomplete replies, it does not behove respondent toAiroadexpressvDurban Local Road Transport Board,1984 (3) SA 65(NPD) atp70 C - ELepogo-uitspraak08/061200512:40 PM-6-complain that it or the residents of Hammanskraal West will be prejudiced by the delay. Itappears in any event that the water capacity problem in Hammanskraal West will onlybecome worse within the next eleven months.By that time the review application willprobably have been finally adjudicated upon. That the possibility exists that an additionalsectional steel tank may be erected to supply the residents of Hammanskraal West withwater.[8]Ininter aliathe following matters the Supreme Court of Appeal considered reviewapplications resulting from the refusal by a state organ to award a tender:Olitzki PropertyHoldingsvState Tender Board and Another,2001(3)SA1247(SCA);Logbro PropertiesCCvBedderson NO and Others, supra; Transnet LtdvGoodman Bros (Pty) Ltd, supra.Inall of these matters there was delay in completing the works forming the subject matter ofthe tender as a result of the review application. In none of these matters was the resultingdelay considered as being a bar to the review application. As appears from the discussionof the last requisite for an interim interdict, applicant will not be entitled to claim the lossof profit that it will suffer as a result of respondent's refusal to award the tender to it. Inthese circumstances there can be no doubt that the prejudice that applicant will suffer if theinterdict is not granted will outweigh any prejudice that respondent may suffer if theinterdict is granted.No Other Satisfactory Remedy[9] It was submitted byMr Delport,for the applicant, that apart from review proceedingsthe only other remedy that could in the circumstances of the present case possibly haveconstituted an alternative satisfactory remedy would have been an action for damages inLepogo-uitspraak08/06/2005 12:40 PM-7-which applicant could have claimed from respondent the loss of profit suffered by it as aresult of the fact that the tender had not been awarded to it. It was also submitted that evenif such a claim for damages had been available to applicant, it would in the circumstancesof the present case not have constituted a satisfactory alternative remedy to the reviewproceedings launched by applicant against respondent: the shadow cast over applicant'sreputation by the allegation that it is guilty of"fronting"would remain; the action fordamages will not only take a considerable time to finalise, but will also be costly; a highproportion of such costs will constitute attorney and client costs that cannot be recoveredfrom respondent; damages in the form of loss of profit will be difficult to prove andapplicant will receive no interest on any amount of damages that it may eventually prove.[10] InOlitzki Property Holdings v State Tender Board and Another(an unreportedjudgement of EloffJPin this division) it was held that where a tender board irregularly andunreasonably refused to award a tender, the tenderer would not be entitled to claim eitherconstitutional damages or loss of profit from the tender board. The learned judge was ofthe view that the availability to the plaintiff of a remedy of review precluded it fromclaiming damages for its loss of profit. See in this regard the judgment of the SCA inOlitzki Property Holdings v State Tender Board and Another,2001 (3) SA 1247(SCA) atp 1255 I -1(par [8]).InOlitzkythe SCA came to the same conclusion. It was held thatwhere a tender board irregularly failed to award a tender, the tenderer would be entitled toan interdict prohibiting the defendant from continuing the tender process and would beentitled to take the decision on review. The tenderer would, however, not be entitled toLepogo-uitspraak08/0612005 12:40 PM-8-claim either constitutional damages or loss of profit from the tender board. It is true thattheOlitzkycase was decided with reference to the Interim Constitution. The reasoning inthis case will, however, applya fortioriwith reference to the provisions of our presentConstitution.Costs[11] Iagree that this application warranted the employment of two counsel and thatrespondent should be ordered to pay the costs of the postponement on 19 May 2005. Thepostponement was occasioned by respondent's initial refusal to postpone the date on whichit would take a decision in respect of the award of the tender and took place at the requestof respondent.[I2J I make the following order:Respondent is prohibited from awarding tender C78/43070 to any other contractor otherthan applicant pending the final adjudication of the application for review launched byapplicant in this Court under case number 14991/05.Respondent is ordered to pay the costsof this application, such costs to include the costs of two counsel as well as the costsoccasioned by the postponement of the matter on 19 May 2005.JCW van Rooyen.....................Acting Judge of the High Court6 June 2005For the applicant: PP Delport SCLepogo-uitspraak08/061200512:40 PMFor the Respondent: adv AT NcongwaneLepogo-uitspraak08106/2005 12:40 PM-9-

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

REPORTABLE

LEPOGO CONSTRUCTION (PTY) LIMITED

CITY OF TSHWANE METROPOLITAN MUNICIPALITY

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Administrative law

omission to grant the applicant a full opportunity to explain questions

raised at the bid committee in regard to alleged so-called "fronting" in so far as it related

to interests of previously disadvantaged persons in the applicant. Interim interdict granted.

Remedy

no other remedy than application for review, a claim for damages not being a

remedy in the circumstances.

Van Rooyen AJ

[1] Applicant applied on an urgent basis for an order in terms of which respondent would

be prohibited from awarding tender C78/43070, concerning the provision of water to

Hammanskraal South, to any other contractor other than applicant pending the final

adjudication of its application for review in this Court.

[2] Applicant's counsel,

Mr Delport,

argued that urgency should not be in issue: unless an

order in terms of prayer 2 of the notice of motion is obtained before that time, respondent

-2-

will award tender C78/43070 to another tenderer on 9 June 2005. In the circumstances

and accepting the urgency of the application the learned Acting Deputy Judge President has

arranged for the application to be heard on 26 May 2005. Respondent's denial of the

urgency of the application in par 26.1 of its answering affidavit (p 104) could, accordingly,

not be

bona

ide. Mr Ncongwane,

however, argued that urgency remained an issue. I do not

agree : I have considered the question whether the applicant has not caused the urgency

through its own lack of diligent conduct. It is true that some time elapsed since the news

that the tender would not be awarded to any tenderer became known. However, the exact

reasons as to why this happened only became clear later on and I do not believe, given the

circumstances, that the applicant was not diligent in its efforts to file the application as

soon as possible.

[3] The present application is an application for an interlocutory interdict. It is trite law that

the requisites for an interlocutory interdict are: A

prima facie

right; a well-grounded

apprehension of irreparable harm if the interim relief is not granted and the ultimate relief

is eventually granted; a balance of convenience in favour of the granting of the interim

relief; the absence of any other satisfactory remedy.

Prima facie right

[4] Applicant need not show a clear right or prove his right on a balance of probabilities. It

will be sufficient if applicant's right is

established although it is open to some

ISetlogelovSetlogelo1914 AD 221at227;Knox D'Arcey Ltd and OthersvJamieson and Others[1996] ZASCA 58;1996 (4) SA 348(A)at372 D -I;Hix Networking TechnologiesvSystem Publishers (Pty) Ltd[1996] ZASCA 107;1997(1) SA 391(A) at 3981 - 399E.

Setlogelo

1914 AD 221

227;

Knox D'Arcey Ltd and Others

Jamieson and Others

[1996] ZASCA 58;1996 (4) SA 348(A)

[1996] ZASCA 58

1996 (4) SA 348

372 D -

I;Hix Networking Technologies

System Publishers (Pty) Ltd[1996] ZASCA 107;1997

[1996] ZASCA 107

1997

(1) SA 391(A) at 3981 - 399E.

Lepogo-uitspraak

08/0612005 12:40 PM

-3-

doubt? I have no doubt that applicant has established a

right in the present

proceedings: a list of the tenders considered by respondent's Bid Committee appears at p

68 of the application; the tenders with numbers 6, 4, 8, 7, 5, 9, 2, 3 and 1 were all

disqualified for the reasons appearing from p 69 - 71 of the application; Applicant's

alternative tender was not only the second lowest acceptable tender received by respondent,

but it also obtained the third highest points in terms of the Preferential Procurement Policy

Framework Act. It complied in all respects to the tender specifications. All the

respondent's relevant departments recommended that this tender should be accepted. It is

clear that applicant has extensive experience of the building of reservoirs.

[5] Respondent decided by a majority of three to two not to award tender C78/43070 to

applicant as it was of the view that applicant was guilty of so-called

''fronting''.

That

respondent was not guilty of

"fronting"

appears clearly from the founding affidavit in the

review application and in particular from the affidavit by its auditor. Although respondent

repeats the allegations of

in its answering affidavit, no factual foundation

whatsoever is laid for these allegations. A bald allegation of

''fronting''

in respondent's

answering affidavit cannot detract from the positive evidence in applicant's founding

affidavit in the review application. Applicant was not afforded the opportunity to counter

the allegations of

fully. These allegations are not denied in the answering

affidavit. I do not agree that the mere fact that the persons who attended the interview with

Webster

Mitchell,

1948 (1) SA 1186(W)

1948 (1) SA 1186

118;

Spur Steak Ranches Ltd

Saddles Steak Ranch1996

1996

(3) SA 706C at 714 E). See also the qualification of this principle in

Goal

Minister of Justice,

1955 (2) SA 682(C) at 688.

1955 (2) SA 682

08/06/2005 12:40 PM

-4-

the bid committee should necessarily have known the details of the financial management.

It must have been clear that the persons interviewed were within the construction division

of the applicant and that they were not well-informed as to the financial management of the

applicant. Applicant should have been informed that it was suspected of

and

should have been afforded the opportunity of properly countering these allegations.

Applicant was furthermore entitled to have received full reasons why its tender was not

accepted.

It is noted that even at this stage applicant has still not received the full reasons

why its tender had not been accepted.

A Well- grounded Apprehension of Irreparable Harm

the Interim relief is not granted and the ultimate relief is eventually granted.

[6] This requisite is clearly present in this application. I am convinced on the probabilities,

as they feature within the mould of the present application, that the applicant will suffer

irreparable harm if the tender is awarded to another tenderer on 9 June 2005.

A Balance of Convenience in Favour of the Granting of the Interim Relief.

[7]When considering this requisite I must weigh the prejudice to the applicant if the interim

interdict is refused against the prejudice to the respondent if it is granted. This requisite

frequently involves a consideration of the prospects of success in the main application: the

stronger the prospects of success, the less need for the balance of convenience to favour the

applicant.

This requisite cannot be considered in isolation from the next requisite, namely

Logbro Properties

v Bedderson NO and Others

2003 (2) SA460 (SCA)

471 E - 473D.

Transnet Ltd

v Goodman Bros (Pty) Ltd2001

(1) SA 853 (SCA) at

871 C -F (par 10) and again at p 872 A (par 16).

LC Diamond Cutting v Diamond Cutting Board

1983 (2) SA 760(W) at p 766 B - 767 D.

1983 (2) SA 760

-5-

that of no other satisfactory remedy. If, as applicant submits in discussing the next

requisite, it cannot claim the loss of profits that it will suffer if the tender is not awarded to

it from respondent, this will be an important fact in tipping the scales towards applicant in

considering the balance of convenience. Respondent avers that the balance of convenience

does not favour the granting of the interim interdict sought by applicant. The facts relied

upon by respondent for this submission are set out in the answering affidavit and relate to

the inconvenience which would result if the matter is not finalised now.

There can be no doubt that when respondent made its decision in November 2004 not to

award the tender to applicant, it would have been aware that problems will arise with the

supply of water to residential stands in Hammanslcraal West. Yet it proceeded to take the

decision without investigating the matter properly and without affording applicant the full

opportunity to make representations to it in regard thereto. Respondent furthermore did not

hesitate to delay matters by failing to give applicant full and proper reasons for its refusal

to award the tender to it. I agree that the Respondent gave evasive replies to applicant's

enquiries in several letters. I

t was only on 7 April 2005 that (incomplete) reasons were

furnished by respondent why applicant's tender had not been accepted. It am convinced

that had these reasons been given at the beginning of December 2004, this application

would have been brought at that time. In these circumstances and where the delay was

caused by respondent's evasive and incomplete replies, it does not behove respondent to

Airoadexpress

Durban Local Road Transport Board,

1984 (3) SA 65(NPD) at

1984 (3) SA 65

70 C - E

08/0612005

12:40 PM

-6-

complain that it or the residents of Hammanskraal West will be prejudiced by the delay. It

appears in any event that the water capacity problem in Hammanskraal West will only

become worse within the next eleven months.

By that time the review application will

probably have been finally adjudicated upon. That the possibility exists that an additional

sectional steel tank may be erected to supply the residents of Hammanskraal West with

water.

[8]In

inter alia

the following matters the Supreme Court of Appeal considered review

applications resulting from the refusal by a state organ to award a tender:

Olitzki Property

Holdings

State Tender Board and Another,2001

2001

(3)

1247

(SCA);

Bedderson NO and Others, supra; Transnet Ltd

Goodman Bros (Pty) Ltd, supra

.In

all of these matters there was delay in completing the works forming the subject matter of

the tender as a result of the review application. In none of these matters was the resulting

delay considered as being a bar to the review application. As appears from the discussion

of the last requisite for an interim interdict, applicant will not be entitled to claim the loss

of profit that it will suffer as a result of respondent's refusal to award the tender to it. In

these circumstances there can be no doubt that the prejudice that applicant will suffer if the

interdict is not granted will outweigh any prejudice that respondent may suffer if the

interdict is granted.

No Other Satisfactory Remedy

[9] It was submitted by

for the applicant, that apart from review proceedings

the only other remedy that could in the circumstances of the present case possibly have

constituted an alternative satisfactory remedy would have been an action for damages in

-7-

which applicant could have claimed from respondent the loss of profit suffered by it as a

result of the fact that the tender had not been awarded to it. It was also submitted that even

if such a claim for damages had been available to applicant, it would in the circumstances

of the present case not have constituted a satisfactory alternative remedy to the review

proceedings launched by applicant against respondent: the shadow cast over applicant's

reputation by the allegation that it is guilty of

would remain; the action for

damages will not only take a considerable time to finalise, but will also be costly; a high

proportion of such costs will constitute attorney and client costs that cannot be recovered

from respondent; damages in the form of loss of profit will be difficult to prove and

applicant will receive no interest on any amount of damages that it may eventually prove.

[10] In

Olitzki Property Holdings v State Tender Board and Another

(an unreported

judgement of Eloff

in this division) it was held that where a tender board irregularly and

unreasonably refused to award a tender, the tenderer would not be entitled to claim either

constitutional damages or loss of profit from the tender board. The learned judge was of

the view that the availability to the plaintiff of a remedy of review precluded it from

claiming damages for its loss of profit. See in this regard the judgment of the SCA in

Olitzki Property Holdings v State Tender Board and Another,

2001 (3) SA 1247(SCA) at

2001 (3) SA 1247

p 1255 I -

(par [8]).In

Olitzky

the SCA came to the same conclusion. It was held that

where a tender board irregularly failed to award a tender, the tenderer would be entitled to

an interdict prohibiting the defendant from continuing the tender process and would be

entitled to take the decision on review. The tenderer would, however, not be entitled to

-8-

claim either constitutional damages or loss of profit from the tender board. It is true that

the

case was decided with reference to the Interim Constitution. The reasoning in

this case will, however, apply

a fortiori

with reference to the provisions of our present

Constitution.

Costs

[

11] I

agree that this application warranted the employment of two counsel and that

respondent should be ordered to pay the costs of the postponement on 19 May 2005. The

postponement was occasioned by respondent's initial refusal to postpone the date on which

it would take a decision in respect of the award of the tender and took place at the request

of respondent.

[I2J I make the following order:

Respondent is prohibited from awarding tender C78/43070 to any other contractor other

than applicant pending the final adjudication of the application for review launched by

applicant in this Court under case number 14991/05.Respondent is ordered to pay the costs

of this application, such costs to include the costs of two counsel as well as the costs

occasioned by the postponement of the matter on 19 May 2005.

JCW van Rooyen

....................

Acting Judge of the High Court

6 June 2005

For the applicant: PP Delport SC

For the Respondent: adv AT Ncongwane

08106/2005 12:40 PM

-9-

Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

Setlogelo v Setlogelo 1914 AD 221

Case cited

Knox D'Arcey Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A)

Case cited

Hix Networking Technologies v System Publishers (Pty) Ltd [1996] ZASCA 107; 1997 (1) SA 391 (A)

Case cited

Webster v Mitchell 1948 (1) SA 1186 (W)

Case cited

Spur Steak Ranches Ltd v Saddles Steak Ranch 1996 (3) SA 706C

Case cited

Goal v Minister of Justice 1955 (2) SA 682 (C)

Case cited

Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA)

Case cited

Transnet Ltd v Goodman Bros (Pty) Ltd 2001 (1) SA 853 (SCA)

Case cited

LC Diamond Cutting v Diamond Cutting Board 1983 (2) SA 760 (W)

Case cited

Airoadexpress v Durban Local Road Transport Board 1984 (3) SA 65 (NPD)

Case cited

Olitzki Property Holdings v State Tender Board and Another 2001 (3) SA 1247 (SCA)

Case cited

Preferential Procurement Policy Framework Act

Legislation

Legislation referenced in the available case record.

Case-aware research

Ask AI about this case

The judgment and available research above are public. New questions open in a separate private conversation grounded in this case.

Lepogo Construction (Pty) Limited v City of Tshwane Metropolitan Municipality (16118/05) [2005] ZAGPHC 62 (6 June 2005)

Holding and result

Material facts

Parties

Procedural history

Questions and positions

Legal issues

Party arguments

Court’s reasoning

Legal principles

Setlogelo v Setlogelo 1914 AD 221 at 227; Knox D'Arcey Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A) at 372 D-I; Hix Networking Technologies v System Publishers (Pty) Ltd [1996] ZASCA 107; 1997 (1) SA 391 (A) at 398I-399E.

Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA) at 471E-473D.

Olitzki Property Holdings v State Tender Board and Another 2001 (3) SA 1247 (SCA) at 1255 I-1.

LC Diamond Cutting v Diamond Cutting Board 1983 (2) SA 760 (W) at 766B-767D.

Transnet Ltd v Goodman Bros (Pty) Ltd 2001 (1) SA 853 (SCA) at 871C-F (par 10) and 872A (par 16).

Ratio, limits and disposition

Court disposition

Source and reliance status

Judgment text

Authorities used by the court

Setlogelo v Setlogelo 1914 AD 221

Knox D'Arcey Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A)

Hix Networking Technologies v System Publishers (Pty) Ltd [1996] ZASCA 107; 1997 (1) SA 391 (A)

Webster v Mitchell 1948 (1) SA 1186 (W)

Spur Steak Ranches Ltd v Saddles Steak Ranch 1996 (3) SA 706C

Goal v Minister of Justice 1955 (2) SA 682 (C)

Logbro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA)

Transnet Ltd v Goodman Bros (Pty) Ltd 2001 (1) SA 853 (SCA)

LC Diamond Cutting v Diamond Cutting Board 1983 (2) SA 760 (W)

Airoadexpress v Durban Local Road Transport Board 1984 (3) SA 65 (NPD)

Olitzki Property Holdings v State Tender Board and Another 2001 (3) SA 1247 (SCA)

Preferential Procurement Policy Framework Act

Ask AI about this case