Lornavision (Pty) Ltd v South African Broadcasting Corporation SOC Limited (19502/17) [2017] ZAGPJHC 208 (1 August 2017)

REPUBLIC

OF SOUTH AFRICA

THE

HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 19502/17

Not reportable

Not of interest to other judges

2/8/2017

In the matter between:

LORNAVISION (PTY) LIMITED Applicant

and

SOUTH

AFRICAN BROADCASTING CORPORATION

SOC LIMITED Respondent

JUDGMENT

SHANGISA AJ:

Introduction

1. This matter initially came to court by way of urgency. Both parties were agreed that the application and the counter-application needed to be heard as a matter of urgency. That was the case since the agreement which is the subject-matter of these proceedings was due to lapse on 31 July 2017. On 11 July 2017 the order of urgency in respect of both the main application and the counter-application was granted. The parties approached the Acting Deputy Judge-President for a special allocation of the matter. As a result, the matter was argued before me in the urgent court on 14 July 2017. The exceptional circumstances of the matter warranted that the order be made before the expiry of the agreement on 31 July 2017. Accordingly, on 26 July 2017 I issued an order in the following terms:

“An order is granted in the following terms:

Lornavision’s main application is dismissed;

Condonation is granted to the SABC for the late bringing of the counter-application;

The appointment of Lornavision as a service provider to the SABC and the agreement concluded between the parties on 10 July 2015 is reviewed and set aside;

4. Lornavision is to pay the costs of the main application and the counter-application, including costs consequent upon the employment

of two counsel.”

2. What follows are the reasons.

Factual Matrix

3. On 10 July 2015, the applicant, Lornavision (Pty) Ltd (“Lornavision”) and the respondent, the South African Broadcasting Corporation (“the SABC”), entered into a written services agreement, (“the agreement”). The express material terms of the agreement entailed, among other things, that Lornavision would assist the SABC with the collection of debt relating to the payment of television licences. When the agreement was signed, Lornavision was represented by one of its directors Mr. Kubentheran Moodley, (“Moodley”),

and the SABC was represented by its then Chief Financial Officer (“CFO”), Mr. James R Aguma (“Aguma”), as well as the head of its legal department, Mr. Mbulu Mepfunbada (“Mepfunbada”).

4. On 23 June 2016 Lornavision and the SABC signed an addendum to the services agreement, (“the addendum”), which recorded that Lornavision had successfully established itself towards “the pilot phase” as was contemplated in the main agreement.

5. It is not necessary to restate the terms of the services agreement, save to mention that the parties expressly agreed that Lornavision would render collections of television licence debt, including collection on 330 000 account renewals per month. In turn, the SABC agreed to make payment in consideration for the services rendered. In that connection, the payment had to be made within 30 days of presentation of a valid tax invoice, in full, free of set-off, bank exchange, commission or any other deduction.

6. It is common cause that, as at 30 April 2017 the amount of R19, 234, 509.26 was due, owing and payable by the SABC to Lornavision in terms of the agreement. Of the aforesaid amount Lornavision had delivered to the SABC invoices in the amount of R15,983,608.17 (fifteen million, nine hundred and eighty-three thousand, six hundred and eight Rand and seventeen cents).

7. The SABC made its last payment to Lornavision in terms of the services agreement on 16 February 2017, after which it simply ceased to make any further payments. This resulted in Lornavision launching the present application demanding payment of the amount of R15, 983,608.17. For its part, the SABC strenuously opposes the application and in turn has launched its own counter-application

which seeks the review and setting aside of the services agreement as unlawful.

8. Accordingly, there are two applications before this Court:

8.1. An application by Lornavision seeking an order that the SABC make payment to it, on an urgent basis, of the sum of R15 983 608,17 (“the main application”);

8.2. An application by the SABC seeking that the appointment of Lornavision as a service provider to the SABC and the agreement concluded pursuant thereto be reviewed and set aside (“the counter application”). This, in the language of the Constitutional Court, is called a reactive challenge (see for example Merafong City Local Municipality v AngloGold Ashanti Limited [2016] ZACC 35, 2017 (2) 211 (CC)).

9. The nub of the matter hinges on the following set of facts. Lornavision’s claim is premised upon an alleged entitlement to payment pursuant to performance under the services agreement, while on the other hand, the SABC asserts that the agreement is unlawful as it was concluded in contravention of the SABC’s Supply Chain Management and Preferential Procurement Policy (“SABC’s policy”). Consequently, the SABC contends that it is not obliged to make payment under an illegal agreement. For its part, Lornavision invokes the legal doctrine of estoppel as its answer to the SABC’s contention of unlawfulness of the agreement. Later, I will return to a brief consideration of the issue of estoppel.

Lawfulness of the Agreement

10. The golden thread running through the main application and the counter-application concerns the lawfulness of the agreement between

Lornavision and the SABC. At the heart of the dispute lies the perennial issue of procurement of goods and services by a public

entity. Accordingly, it is worth paying regard to the legal framework and legislative prescripts that govern state or public entities when entering into contracts of goods and services.

11. It is common cause that the SABC is a public entity as contemplated in section 1 read with schedule 2 of the Public Finance Management

Act[1], ("PFMA”). In the nature of things, it owes its survival to the public purse. Like all other public entities, the SABC is duty-bound to discharge all its duties and functions in accordance with the law. Its conduct should be beyond reproach and is expected to measure up to its policy and legislative prescripts that concern the procurement of goods and services by public entities.

12. To appreciate the issues at hand, I deem it appropriate to consider the broad principles that underlie the importance of lawful conduct on the part of public statutory bodies when discharging their public duties. In that regard, a brief survey of the applicable constitutional and legislative principles underscoring the importance of a transparent and open public tender process is merited.

13. In Head of Department, Department of Education, Free State Province v Welkom High School 2014 (2) SA 228 (CC), at paragraphs 1 and 86, respectively, the court emphasised the importance of lawful conduct on the part of public bodies. It enunciated the underlying principles as follows:

“State functionaries, no matter how well intentioned, may only do what the law empowers them to do. That is the essence of the principle of legality, the bedrock of our constitutional dispensation, and has long been enshrined in our law.”

“The rule of law does not permit an organ of state to reach what may turn out to be a correct outcome by any means. On the contrary, the rule of law obliges an organ of state to use the correct legal process.”

14. In the present matter, although the SABC contends that its agreement with Lornavision is unlawful, it nonetheless recognizes that in law, it remains binding until it is reviewed and set aside. In that connection, its counter-application is predicated on the premise that it is not in the public interest to saddle the public purse with an unlawful contract. Consequently, the SABC seeks to review and set aside its main agreement with Lornavision.

15. Our courts have repetitively stated the principle that an unlawful act can produce legally effective consequences unless it is reviewed and set aside. In ordinary parlance, this has come to be commonly known as the Oudekraal principle. In Merafong City Local Municipality v Anglo Gold Ashanti Limited [2016] ZACC 35, 2017 (2) 211 (CC) the court set out the principle, at para [41], as follows:

[41] The import of Oudekraal and Kirland was that government cannot simply ignore an apparently binding ruling or decision on the basis that it is invalid. The validity of the decision has to be tested in appropriate proceedings. And the sole power to pronounce that the decision is defective, and therefore invalid, lies with the courts. Government itself has no authority to invalidate or ignore the decision. It remains legally effective until properly set aside. (Own emphasis)

16. It is against the backdrop of the Oudekraal principle that the SABC launches its reactive challenge to the lawfulness of its agreement with Lornavision and seeks to have it reviewed and set aside.

17. In Pharmaceutical Manufacturers Association of SA and Another: In re: ex parte President of the Republic of South Africa and others 2002 (SA) 674 (CC) at para 44, it was stated that:

“there is only one system of law. It is shaped by the Constitution which is the supreme law, and all law including the common law derives its force from the Constitution and is subject to constitutional control”.

18. The aforegoing principles are premised on the supremacy of the Constitution and the rule of law.[2] The principle of legality is an aspect of the rule of law and the exercise of public power is only legitimate where lawful.[3]

19. The principle of legality requires that the exercise of public power must be rationally related to the purpose for which the power was given.[4] This lies at the heart of the rationality test. Our courts have consistently held that rationality is a minimum requirement

applicable to the exercise of public power in that “decisions must be rationally related to the purpose for which the power is given otherwise they are in effect arbitrary and inconsistent with the requirement of rationality”.[5] The rational connection means that “objectively viewed, a link is required between the means adopted by the person exercising the power and the end sought to be achieved.”[6]

20. The test therefore in relation to rationality requirements is twofold, being, first, that the decision-maker must act within the law and in a manner consistent with the Constitution, entreated not to misconstrue the nature of his or her powers and, second, that the decision must be rationally related to the purpose for which the power was conferred. This is because if it is not, the exercise of power would, in effect, be arbitrary and at odds with the rule of law.[7]

21. It is with this in mind that it must be remembered: “section 217 of the Constitution is the source of the powers and function of a government tender board. It lays down that an organ of state in any of the three spheres of government, if authorised by law, may contract for goods and services on behalf of the government. However, the tendering system it devises must be fair, equitable, transparent, competitive and cost-effective. This requirement must be understood together with the constitutional precepts on administrative justice in section 33 and the basic values governing public administration in section 195(1)”. (emphasis added)[8]

22. The “... Constitution lays down minimum requirements for a valid tender process and contracts entered into following an award of a tender to a successful tenderer (s 217). The section requires that the tender process, preceding the conclusion of contracts for the supply of goods and services, must be ‘fair, equitable, transparent, competitive and cost-effective’. Finally, as a decision to award a tender constitutes an administrative action it follows that the provisions of PAJA apply to the process.”[9]

23. Thus, the starting point for an evaluation of the proper approach to an assessment of the constitutional validity of outcomes under the state procurement process is thus section 217 of the Constitution.[10]

24. To achieve the constitutional imperative in relation to procurement, various pieces of national legislation have been implemented

including, inter alia, the Preferential Procurement Policy Framework Act, 5 of 2000, and the Public Finance Management Act, 1 of 1999. The object of the various pieces of legislation is to give effect to the constitutional provisions in securing transparency, accountability and sound management of the revenue, expenditure, assets and liabilities of the institutions to which it applies.[11] Further, the import of the requirements found in section 217 has also been recognized by the English Court of Appeal in R (on the application of the Law Society) v Legal Services Commission; Dexter Montague & Partners (a firm) v Legal Services Commission [2008] All ER 148 (CA), at paras 42-43, which stressed the requirements of impartiality and the promotion of a “level playing field enabling all tenderers to know in advance on what criteria their tenders will be judged.”[12]

25. In our jurisprudence, Froneman J in Nelson Mandela Bay Municipality v Afrisec Strategic Solutions (Pty) Ltd & Others [2007] JOL 20448 (SE) at paras 29-30 affirmed the importance of transparency in tender processes.[13] In the same vein, the learned academic writer, Professor Bolton has expressed the view that: “Transparent procurement procedures encourage good decision making and, to a large extent, serve to combat corrupt procurement practices. It is a well-known phenomenon that corruption thrives in the dark. Transparency also fosters competition because it allows interested

parties to participate in the procurement process. Competition, in turn, to a large extent ensures the attainment of value for money.” [14]

26. The learned academic writer, Professor Bolton further puts the point thus in her work on government procurement:

“One of the primary reasons for the express inclusion of the five principles in section 217(1) of the Constitution is to safeguard the integrity of the government procurement process. The inclusion of the principles, in addition to ensuring the prudent use of public resources, is also aimed at preventing corruption.”[15]

27. In Choice Decisions v MEC, Department of Development, Planning and Local Government, Gauteng (no 2) 2003 6 SA 308 (W), at para 12, it was held that:

"It is in the public interest that officials comply diligently with regulations and other directives, especially when those directives

have in mind the attainment of transparency and accountability and the prevention of corrupt practices".[16]

28. Compliance with the requirements of a valid tender process, issued in accordance with the constitutional and legislative procurement framework, is thus legally required and it is not open to a state entity to simply disregard these at a whim as, to hold otherwise, would undermine the demands of equal treatment, transparency and efficiency under the Constitution.[17]

29. These all punctuate the necessity of ensuring that, through the various mechanisms implemented to do so, the imperative of section 217 is met.

30. Accordingly, once a particular administrative process is prescribed by law, it is subject to the norms of procedural fairness, codified in PAJA and deviations from the procedure will be assessed in terms of those norms of procedural fairness.[18]

31. Of course, this is not to say that administrators may never depart from the system put in place, or that deviations will necessarily result in procedural unfairness. However, where administrators do depart from procedures, the basis for doing so will have to be reasonable and justifiable, and the process of change must be procedurally fair.[19]

32. Under the Constitution there is no reason to conflate procedure and merit and the proper approach is to establish, factually, whether an irregularity occurred.[20] Once it is established that an irregularity occurred, it must be legally evaluated to determine whether it amounts to a ground of review.[21] If a ground of review is established, the decision must be set aside.

33. The aforementioned decisions give effect to the necessity of ensuring that public bodies act within the prescripts of the frameworks

empowering them. Where appointments are effected unlawfully and contracts are concluded unlawfully, outside of those frameworks, they must be set aside on this basis alone.

SABC’s Procurement Policy

34. Both parties are ad idem that the appointment of Lornavision was pursuant to a deviation from the prescripts of the SABC’s Procurement Policy. Put

differently, Lornavision’s appointment as a service provider did not follow a public bid process prescribed in the SABC’s

Procurement Policy. However, they disagree on the lawfulness of such deviation from normal procurement policy. Accordingly, the only issue that merits further consideration concerns whether or not such a deviation from the SABC’s Policy was competent, in the circumstances of this matter.

35. It is important to consider the SABC’s contention that Lornavision was appointed pursuant to an unsolicited bid. In that regard, the primary focus of the enquiry should be directed to the provisions of clause 13.19 of the SABC’s Policy. In that connection, the appointment of Lornavision should be tested against the provisions of clauses 13.14 and 13.19 of the SABC’s Policy.

36. As already mentioned, the SABC is a public entity and is bound by the provisions of the PFMA. To give effect to its obligations thereunder the SABC implemented its own group supply chain management and preferential procurement policy.

37. In terms of the policy, the SABC was required, when contracting for sums in excess of R2 million, to adopt a competitive bidding process. It is common cause that the services contracted to Lornavision exceeded the sum of R2 million. As part of the agreement, Lornavision undertook to collect on behalf of the SABC sums of approximately R500 million a year in licence fees. Lornavision would then receive commission fees of 10% in respect of amounts collected. On Lornavision’s own version, the amount of R62 733 556, 61 has already been paid to it by the SABC. That being the case, it follows that a competitive bidding process was mandatory in the circumstances of Lornavision’s appointment as a service provider.

38. To the extent that the appointment of Lornavision constituted a deviation from the provisions of the SABC’s policy, a fact accepted by Lornavision, the appointment is governed by two aspects thereof:

38.1. First, the circumstances under which the SABC would have been entitled to consider an unsolicited bid, that is a bid that is adjudicated

outside of a competitive bidding process, are governed by the provisions of section 13.14 of the policy.[22] In this regard the SABC was entitled to consider Lornavision only in the event of the services provided by it to have been (i) demonstrably

proven to involve a unique or innovative concept; (ii) exceptionally beneficial or have exceptional cost advantages to the SABC and (iii) that Lornavision was the sole provider of the services. Further, it would have had to have been demonstrated that the reasons

for not going through the normal bidding processes were found to be sound by and to have been considered by the Bid Adjudication

Committee or a higher level.

38.2. Second, and in any event, the circumstances under which the SABC would be entitled to deviate from the bidding process are set out at section 13.19 of the policy.

39. Lornavision takes no issue with either the SABC’s policy or its peremptory provisions. Indeed it is Lornavision’s contention that, accepting both the existence and the peremptory nature of the SABC policies, it was appointed in terms of a permissible deviation from such procurement policies.

40. Accordingly, all that is required in order to determine whether or not Lornavision’s appointment was lawful is a factual analysis to determine whether any deviation was competent having regard to the prescripts of the SABC’s policy. It should be borne in mind that the SABC’s procurement policy falls within the purview of the requirements set out in the PFMA and PPPF Act, which in turn, give expression to the constitutional procurement framework set out in section 217.[23]

41. Significantly, the procurement policy of the SABC makes it clear that deviation from the normal bidding processes is only allowed in exceptional, urgent and emergency cases. It also applies in cases where there is a proven limited competition in the market and good reason exists to restrict bids to only a few businesses and where no competition exists and it is proven that only one bidder exists.

42. The necessity of the frameworks set out in the SABC’s policy, ensure that, insofar as is practically possible, it is important to attract the largest possible pool of competitors and ensure the achievement of both the provision of equal opportunity to all prospective competitors and thus ensure the most cost-effective method of procuring services. This, in turn, ensures that the SABC attains cost-effectiveness in the performance of its mandate and value-for-money when it does so in the utilization of external

service providers, an imperative that ensures proper use of public funds.

43. On its own version, before its appointment as a service provider, Lornavision approached the SABC. This resulted in negotiations between the parties which spanned over a period of thirty months. To the extent that it readily admits to have approached the SABC, Lornavision’s bid bears the hallmark of an unsolicited bid as contemplated in the policy of the SABC. I pause to mention that the SABC policy expressly prohibits such unsolicited bids. Accepting, as a point of departure, that it is undesirable to deviate from the prescribed procurement policies, unsolicited bids, such as Lornavision’s, require a substantially higher threshold of scrutiny in their consideration and approval. The reason for this is because a consideration of tenders outside of the normal procurement framework has the potential to defeat compliance with the principles of competitiveness, fairness and transparency.

44. On the common cause facts of this matter, it has not been shown that, when Lornavision was appointed, exceptional, urgent or emergency

circumstances existed which warranted a deviation from the normal procurement policies of the SABC. Nor is there any

objective proof that Lornavision’s appointment was beneficial to the SABC.

45. Indeed, to meet the strictures of SABC’s policy on deviation, it is an important requirement that the services be exceptionally beneficial or of an exceptional cost advantage to the SABC. In my view, there was no evidence at the time of the conclusion of the agreement that Lornavision’s services would be exceptionally beneficial to the SABC or have exceptional cost advantages for the SABC. In any event, other external services providers had already been procured to assist the SABC with the rendering of the same services. What is more, the SABC also had an internal division that was fully staffed and rendered the same services.

46. In the main, Lornavision’s services largely consisted of debt collection of outstanding television licence fees. There is nothing that demonstrates that Lornavision’s product was in any way unique or that it was the sole provider of this type of services. Its debt collection drive could hardly be categorized as being unique or innovative. In my view, the nature of the services provided by Lornavision fall outside the scope of unique, innovative or exceptional circumstances that are contemplated in section 13.14 of the SABC’s Policy. In the same vein, it is difficult to discern any exceptional cost benefit the agreement brought to bear on the SABC.

47. Insofar as the provisions of clause 13.19 are concerned, it is worth considering the competence of Lornavision’s appointment. In that regard, the question as to whether any urgency existed at the time of the agreement which warranted a deviation from the prescribed procurement policies of the SABC, is of cardinal importance. I pause to mention that the urgency contemplated in clause 13.19 is qualified by the requirements that “the standard procurement process is impossible or impractical” and in certain cases further qualified to exclude cases where planning could not done in time.

48. To bolster its contention that there was urgency that warranted deviation, Lornavision relies on the qualified audit findings by the Auditor-General against the SABC. The relevant portions of the Auditor-General’s finding are that:

“The SABC did not record revenue on an accrual basis, as required by the accounting standard but rather recorded revenue on a cash basis. In addition, the SABC made use of agents to collect a significant amount of cash for TV licences without obtaining any assurance report from an independent auditor to confirm the correctness of the amount paid over to the SABC by the respective agents.” (emphasis added)

49. Following the aforementioned adverse findings of the Auditor-General, on 25 September 2013 the audit committee of the SABC’s Board passed a resolution that sought the procurement of an external services provider to address the aforementioned audit concerns of the Auditor-General.

50. However, it was only some two years later, on 17 June 2015, that a special group executive committee meeting of the SABC passed a resolution purporting to mandate the conclusion of an agreement between Lornavision and the SABC, ostensibly to address the concerns raised by the Auditor-General.

51. The resolution of 17 June 2015 defies logic. There was no factual basis warranting the passing of that resolution. It could not sanction an agreement on procurement of goods and services that fell outside the scope of the legal framework that governed the SABC as a public entity. On Lornavision’s own version, its appointment was the culmination of a period of negotiations spanning a period of 30 months prior to its appointment in terms of the agreement in July 2015. In my view, it is difficult to see how Lornavision’s appointment could have been triggered by the Auditor-General’s concerns expressed some two years earlier. In any event, there is no factual basis for suggesting that Lornavision’s appointment was actuated by any urgency. After the Auditor-General’s adverse findings in 2013, the SABC had adequate time to appoint a suitable service provider in terms of its own normal procurement policies. That it sat on its hands and apparently did nothing for a period of two years, cannot redound in favour of the unlawful contract it later signed with Lornavision. No plausible explanation has been proffered for failure to comply with the strictures of the procurement policy when Lornavision was appointed.

52. In any event, the audit finding as relied upon by Lornavision appear to be purely related to the accounting recognition of the licence fees once collected and the systems in relation to that recognition. Put differently, the Auditor-General’s complaint was with the SABC’s accounting policies. There is no plausible suggestion that only Lornavision had the exclusive means to assist the SABC to address the adverse findings of the Auditor-General.

53. At any rate, on the common cause facts, Lornavision has failed to demonstrate that its processes have addressed the audit concerns of the Auditor-General or that its appointment was in accordance with the peremptory nature of the SABC’s procurement policy. It follows, therefore, that Lornavision’s appointment as a service provider was illegal, and this renders the contract concluded between Lornavision and the SABC susceptible to judicial review on the principle of legality.

54. Even if one were to consider the alternative submissions which turn on the principles of the Promotion of administrative Justice Act, 3 of 2000 (“PAJA”), it seems to me that the same outcome is inevitable. The fact remains that the SABC’s policy, constituting a mandatory and material procedure or condition required to be complied with in the appointment of Lornavision was breached, thus rendering Lornavision’s appointment liable to be set aside. The interests of justice warrant that outcome.

55. A further point of concern relates to the involvement of Aguma in the process of concluding the agreement. It is common cause that the head of the SABC’s Audience Services Division (“ASD”), Ms. Sylvia Nikiwe Tladi (“Tladi”) was not party to the signing of the agreement and its subsequent management. Some context is merited. The ASD of the SABC is tasked with the provisions of section 27 of the Broadcasting Act 4 of 1999 which prescribe that no person may use any television set unless such person is in possession of a television licence issued by the SABC against payment of a prescribed fee per set.

56. Tladi stated that she had expressed reservations about the process followed in the appointment of Lornavision. In any case, she asserted that there was no cogent reason for the appointment of Lornavision since the SABC already had the resources to render the same services that Lornavision purported to offer. In that regard, she pointed out that, following a public tender process, in 2014 the SABC had appointed seven Debt Collection Agencies (“DCA’s”) that were tasked with collecting outstanding licence fee from SABC’s customers.

57. In February 2015, the SABC published a Request for Proposal (“RFP”) in respect of the inspectorate services for a period of three years. There were various bids received in respect of the RFP. However, in May 2015 Aguma inexplicably cancelled the RFP. Nothing was explained to Tladi as the head of ASD. Ordinarily, Tladi would have been in charge of that process. However, in this instance, Aguma took charge of the process. In June 2015, Aguma summoned Tladi to an unscheduled meeting with Lornavision. The purpose of the meeting was ostensibly to entertain a presentation by Lornavision in relation to the manner in which Lornavision was able to assist the SABC in the revenue collection of ASD.

58. It is common cause that at the unscheduled meeting of June 2015, Lornavision made an approach to be awarded a contract to fulfil the role played by both a TV licence inspectorate as well as a DCA. This did not make any logical sense given that the SABC had, in any event, recently appointed seven DCA’s. Worse still, this occurred soon after the unexplained cancelation of the RFP by Aguma.

59. Consequently, Lornavision was appointed in terms of the agreement of July 2015. In light of the aforegoing circumstances, this appointment did not make any sense if one considers the factual background I have sketched out. What is more, the SABC had its own internal resources and staff which were capable of executing some of the tasks for which Lornavision had been appointed.

60. It is worth noting that, although Lornavision had undertaken to collect R500m for the SABC, on its own version, it only collected approximately R200m which fell substantially short of the initially agreed target. Properly construed, its performance was underwhelming. By its own admittance, Lornavision could only muster the above-mentioned collection which fell short of the agreed target.

61. Insofar as Aguma and the SABC may have laboured under the apprehension that they were entitled to dispense with the provisions of the procurement policy, it seems to me that such an apprehension amounted to no more than a reviewable error of law. This is so because Aguma and the SABC were not entitled to so act and, in any case, the agreement is therefore reviewable under the provisions of section 6(2)(d) of PAJA. In the same breadth, Lornavision’s appointment was, for the reasons set out above, not authorised by the SABC’s policy, and is accordingly susceptible to review under the provisions of section 6(2)(f)(i) of PAJA. The factual matrix of this matter makes it crystal clear that none of the prerequisites of the SABC’s policy that must be present to justify deviation were not complied with when Lornavision was appointed. That much is clear from the common cause facts.

62. In sum, the SABC’s appointment of Lornavision was not and could not have been rationally connected to the purpose of the SABC’s

policy; and the information before the SABC, its executives and Aguma at the time of Lornavision’s appointment.

63. Further, having regard to the inability of Lornavision to demonstrate that its appointment fell within the ambit of the provisions of the SABC’s policy, the inescapable inference is that the decision could only have been taken by the taking into account of irrelevant considerations or the failure to take into account relevant considerations, thus rendering Lornavision’s appointment

susceptible to review under the provisions of section 6(2)(e)(iii) of PAJA.

64. In any event, having regard to the unlawful nature of Lornavision’s appointment as set out above, I find that that the agreement is, in any event, reviewable under the provisions of section 6(2)(i) of PAJA.

65. The effect of the aforegoing is that Lornavision’s application falls to be dismissed.

CONDONATION

66. There is a legal obstacle to the SABC’s counter-application, to have the agreement reviewed and set aside, which merits some consideration. It relates to the SABC’s delay in launching the review proceedings and have the agreement set aside. In what follows, I turn to consider the issue of condonation of the SABC’s late counter-application to have the agreement reviewed and set aside.

67. The SABC explains that at all material times, until his suspension, Aguma was effectively in charge of the contract with Lornavision. It is common cause that Aguma was only suspended during the latter part of May 2017 pursuant to Parliament’s Standing Committee on Public Accounts calls for his suspension. It was only after his suspension, so the argument goes, that the SABC was able to uncover the irregularities relating to the present contract with Lornavision. Before his suspension, officials such as Tladi could not do anything because, despite their expressed reservations and misgivings, they were effectively subordinate to Aguma.

68. Although Lornavision does not oppose the SABC’s condonation for the delay in launching its counter-application, it is trite that the counter-application may only be entertained if it meets the legal threshold for condonation for the late launching of proceedings in similar circumstances. The question arises as to whether one should deal with the counter-application under the principle of Legality or in terms of PAJA. In my view, as appears elsewhere in this judgement, either approach inevitably results in the same outcome.

69. At the outset, it is worth mentioning that our law is unsettled on whether reviews of the kind contemplated in this matter should be adjudicated either under the principle of legality or PAJA. The Constitutional Court left the question open in the matter of City of Cape Town v Aurecon South Africa (Pty) Ltd [2017] ZACC 5[24] (“City of Cape Town”). The court, however, based on the pleadings and the approach taken by the parties, determined the matter within the strictures of PAJA without deciding whether the litigants’ reliance on it was appropriate.

70. What the Constitutional Court decided however in the City of Cape Town was the point at which the 180-day period begins to run. It held that the clock starts to run with reference to the date on which the reasons for the administrative action became known (or ought reasonably to have become known) to an applicant, thereby rejecting the argument that the clock should start ticking from the date of knowledge of the irregularities.[25]

71. Few points emerging from the City of Cape Town merit some consideration. In that matter the applicant had launched its application some 532 days after the decision to award the tender to Aurecon was made, less the 180 day allowed by PAJA. The application was therefore late by a total of 352 days. In addition to the inadequacies of its condonation argument, the City had no prospects of success in the application on the merits.

72. Notably, in proffering an explanation for the delay in that matter, the City merely stated that: “it will be in the interests of justice to grant condonation”.[26] Needless to say, the City’s approach proved inadequate and was frowned upon by both the Constitutional Court, and the Supreme Court in earlier proceedings.

The applicable test in determining the reasonableness of the delay

73. It is common cause that the SABC brought its review application outside the prescribed 180 days contemplated in PAJA. The question to be determined is whether the SABC has demonstrated that it would be in the interests of justice for condonation to be granted.

74. I have already found that the appointment of Lornavision was in pursuance of an unlawful agreement. That was the case since the deviation fell short of the strictures of the SABC’s procurement policies and procedures. It follows therefore that the SABC has demonstrated that it has good prospects of success on the merits. That being so, it would be in the interests of justice to grant condonation for the late launching of the counter-application.

75. Even if one were to consider the matter on the PAJA footing, it seems to me that the enquiry would yield the same outcome. The correctness of this approach finds support in the fact that our courts have repeatedly held that there is no difference between the common law delay rule and the procedure set out in ss7 and 9 of PAJA. The Supreme Court of Appeal confirmed as much in Beweging vir Christelik-Volkseie Onderwys & Others v The Minister of Education & Others 308/2011) [2012] ZASCA 45 (29 March 2012) where, at para 46, it held that:

“In the application of both the delay rule and ss 7 and 9 of the PAJA, a two-stage approach is required. That is the way of the courts have always applied the delay rule and the structure of the PAJA requires two distinct inquiries. The first question that arises is whether the delay in launching an application was unreasonable, or whether it was launched more than 180 days after internal remedies had been exhausted or the applicant had been informed of, had knowledge of or ought to have had knowledge of the administrative action under challenge. The second question is whether, if the first question is answered in the affirmative, the delay ought to be condoned or whether it is in the interests of justice that the 180-day period be extended (or the failure to bring the application timeously should be condoned).” (emphasis added)

76. This aforementioned statement was preceded by the court’s dictum at paragraph 41, where it stated that:

“Despite the differences between the formulation of the delay rule and the time limit and condonation provisions of the PAJA, however, the approach to the application of both is similar and the approach to the latter is, in truth, inspired by the delay rule.”[27]

77. As was the case under common law, the relevant factors under section 9 include the nature of the relief sought, the extent and cause of the delay, the nature and cause of any other defect in respect of which condonation is sought, the effect on the administration of justice, prejudice and the reasonableness of the applicant’s explanation for the delay or defect.[28] Whether to grant condonation or not however depends on the facts and circumstances of each case.[29]

78. These factors are however not individually decisive. Relying on the locus classicus of Melanie v Santam, in Mhlontlo Local Municipality v Jikijela 2012 JDR 2277 (ECM) at para 22, the court enunciated the principle as follows:

“It seems to me therefore that in dealing with condonation pursuant to the provisions of section 9(1)(b) of the Act, a court should not mechanically tick off the various factors involved but should accord due weight to each factor in accordance with the circumstances of the matter. Thus, as expressed by Holmes JA in the above-mentioned passage, ‘…the importance of the issue and strong prospects of success may tend to compensate for a long delay’. Clearly, in such circumstances, more weight is accorded to the facts that the issue is an important one and that there are strong prospects of success than is accorded to the question of a long delay and, I might add, a weak explanation therefor.” (emphasis added)

79. In the Mhlontlo judgment (supra), the applicants had delayed institution of the review proceedings for a period of a year and five months after they became aware of the administrative action, and for a period of 11 months after the period provided for in PAJA had expired.[30] The court held that such delay was long and had not been fully explained by the applicants.

80. Upon weighing up the relevant factors, the court stated that:

a. It must be borne in mind that there can be little if any prejudice to the respondents by the granting of such condonation.

b. No indication has been forthcoming from the respondents to the effect that the delay resulted in their being prejudiced in the presentation of their defence to the action.

c. The respondent put up extensive evidence to establish its case, both documentary and by affidavit.

d. One cannot escape the conclusion that the applicants had very strong prospects of success on the merits and this is an aspect that must weigh heavily in considering whether or not the lengthy delay in instituting the application ought to be condoned.[31]

81. Having considered these factors, the court in Mhlontlo concluded that:

“In my judgment this is a case where the fact that the respondents have a strong case on the merits and where there is little, if any, prejudice to the appellant, must outweigh any deficiencies in their explanation for the lengthy delay.”[32] (emphasis added)

82. In the present matter, Lornavision has suffered no prejudice in meeting the claim because of the very nature thereof that the agreement was void ab initio and there could not have been any different consequence had there been no delay. Moreover, I have already found that the awarding of the contract to Lornavision was at variance with the constitutional injunctions stipulated in s217 of the Constitution, and the deviation was at odds with the prescripts contemplated in the SABC’s Supply Chain Management and Preferential Procurement Policy.

83. Regarding the reasonableness of the SABC’s explanation for its delay in bringing the counter-application, it seems to me that, taken on its own, the explanation may conceivably be deemed as inadequate. This is because in law, it is of no moment that the SABC only discovered the irregular contract after Aguma’s suspension. The 180 days started running the moment the impugned agreement came into effect.

84. However, the fact that the explanation proffered by the SABC is unsatisfactory does not spell the end of the enquiry. The next leg of the enquiry concerns the consideration of the merits of the SABC’s case and its prospects of success. In that regard, the approach adopted by the court in Tedcor (Pty) Limited v Mbombela Local Municipality 2006 JDR 0493 (T), is instructive. At paras 30 – 31 the court expounded the appropriate test as follows:

“The learned judge did not, in the course of his judgment refer to, or discuss, the merits of the appellants’ case. He was not impressed by the explanation offered by the appellants for the delay in the bringing of the application and his views about the prejudice that would be suffered by the second respondent and the community if an extension of time were permitted, were decisive in refusing to extend the period of 180 days.

The next question to be considered is whether the appellants have made out a case for the relief that they seek, namely, to remit the matter to the first respondent for reconsideration of the decision to award the tender to the second respondent. This question entails a consideration of the merits of the appellants’ case. The court a quo did not deal with this aspect because of the finding that the appellants’ unreasonable delay should not be condoned. The approach of the court a quo was unduly narrow. It should have considered the prospects of the appellants succeeding on the merits and the prospect of them succeeding to achieve a meaningful result, before it could finally decide whether the prejudice that the second respondent and the community would suffer, outweighed the other factors and whether or not it should, in its discretion, refuse to condone the delay. See Gqwetha v Transkei Development Corporation Ltd and Others 2006 2 SA 603 (SCA) 609H-I, 611I-612B; 614J-615B, 615E-F.” (emphasis added)

85. This approach was also followed by the Supreme Court of Appeal in Aurecon where the court proceeded to consider the merits of the review application, notwithstanding its view that the explanation for delay

was terse and scanty and thus inexcusable. It enunciated the correct approach as follows:

“Despite this finding [re inexcusable delay], it is necessary to deal with the alleged irregularities, with which the City persisted on appeal so as to assess if the fair process demanded by the constitutional and legislative procurement framework to ensure even treatment of all the tenderers and the best outcome was followed. As stated above, the City’s counsel relied on what he labelled glaring irregularities in the procurement process and the City’s obligation to comply with s 217 of the Constitution for his submission that the interests of justice warranted the grant of the extension of the 180 day time limit.”[33] (emphasis added)

86. In the same vein, in City of Cape Town (supra) the Constitutional Court followed the same approach, on appeal, and held, at para 49, that:

“Nonetheless, due regard must also be given to the importance of the issue that is raised and the prospects of success. In this case, that means considering the significance of the alleged procedural irregularities that were raised in the Ernst & Young report. It should be borne in mind that, when carrying out a legal evaluation a court must, where appropriate, ‘take into account the materiality of any deviance from legal requirements, by linking the question of compliance to the purpose of the

provision’.”(emphasis added)

87. It is clear from the aforegoing that a review application can accordingly not be dismissed solely on account of insufficient or unsatisfactory explanation for the delay. More is required. All other relevant factors must still be considered. In the present matter, the prospects of success on the merits militate in favour of granting the SABC condonation for instituting its reactive challenge late.

88. In sum, therefore, proceedings for judicial review under s7(1) of PAJA must be instituted without undue delay and before the expiry of 180 days from the date of the administrative action sought to be reviewed. However, s9 empowers a court to extend the prescribed period where the interests of justice so require.

89. The SCA has held that whether the interest of justice require the extension of the time frames for the institution of review proceedings in terms of s9 of PAJA depends on the facts and circumstances of each case: the party seeking it must furnish a full and reasonable explanation for the delay which covers the entire duration thereof and relevant factors including the nature of the relief sought, the extent and cause of the delay, its effect 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.[34]

90. Whether the interests of justice require the granting of an extension under s9 entails the exercise by the court of a judicial discretion, and the factors to be considered in that enquiry will depend on the nature of the case.[35] In City of Cape Town, the court explained that an assessment of what the interests of justice require is “particularly case-specific”[36] and that “a wide range of considerations” are relevant to the enquiry.[37]

91. The Constitutional Court has made clear that the test to be applied in condonation applications is the interests of justice. In Glenister v President of the Republic of South Africa and Others 2011 (3) SA 347 (CC) (“Glenister 2”) at para 41 the Constitutional Court authoritatively enunciated the test as follows:

“The test for determining whether condonation should be granted is the interests of justice. Factors that are relevant to this determination

include, but are not limited to, the nature of the relief sought, the extent and cause of the delay, the effect of the delay on the administration of justice and other litigants, the reasonableness of the explanation for the delay or defect, the nature and cause of any other defect in respect of which condonation is sought, the importance of the issue to be decided in the intended appeal and the prospects of success.”

92. The interests of justice test thus requires due consideration of all relevant factors.

93. Condonation may even be granted in instances where the sufficiency of the reasons for the late filing may, when viewed in isolation, not be deemed to be particularly strong, if the merits of the application have strong prospects of success and if the application determines a question of fundamental importance.

94. In Glenister 2 (supra) the application had been filed 62 days late. While the Constitutional Court differed markedly on the merits, it was unanimous in relation to granting condonation. It held:

“The explanation furnished for the delay is utterly unsatisfactory. Ordinarily, this should lead to the refusal of the application for condonation. However, what weighs heavily in favour of granting condonation is the nature of the constitutional issues sought to be argued in the intended appeal, as well as the prospects of success. This case concerns the constitutional authority of Parliament to establish an anti-corruption unit, in particular the nature and the scope of its constitutional obligation, if any, to establish an independent anti-corruption unit. These are constitutional issues of considerable importance ….

It is, therefore, in the interests of justice to grant condonation.”[38] (emphasis added)

95. In my view, the present application is an exceptional case in which the SABC’s prospects of resisting Lornavision’s application and setting the agreement aside are overwhelming and the questions being determined are of immense public importance. Moreover, the questions before the court do not only affect the immediate parties to the dispute but the public in general.

96. In this context, the Constitutional Court’s decision in Minister of Defence and Military Veterans v Motau and Others 2014 (5) SA 69 (CC) is of assistance. In that matter the court held that:

“[i]t would not be in the interests of justice to refuse condonation in this case. This is a matter of great public importance, and we should be slow to refuse argument that might provide assistance on complex issues.”[39]

The duty on organs of state to investigate corruption would be undermined if condonation is refused

97. The Constitutional Court has also emphasised that both corruption and maladministration have a destructive effect on this country.

98. In South African Association of Personal Injury Lawyers v Heath and others 2001 (1) SA 833 (CC) at para 4the Constitutional Court held:

“Corruption and maladministration are inconsistent with the rule of law and the fundamental values of our Constitution. They undermine the constitutional commitment to human dignity, the achievement of equality and the advancement of human rights and freedoms. They are the antithesis of the open, accountable, democratic government required by the Constitution. If allowed to go unchecked and unpunished they will pose a serious threat to our democratic state.” (emphasis added)

99. In Glenister 2 (supra) the Constitutional Court sounded a similar warning and, at para 166, cautioned:

“There can be no gainsaying that corruption threatens to fell at the knees virtually everything we hold dear and precious in our hard-won constitutional order. It blatantly undermines the democratic ethos, the institutions of democracy, the rule of law and the foundational values of our nascent constitutional project. It fuels maladministration and public fraudulence and imperils the capacity of the State to fulfil its obligations to respect, protect, promote and fulfil all the rights enshrined in the Bill of Rights. When corruption and organised crime flourish, sustainable development and economic growth are stunted. And in turn, the stability and security of society is put at risk.”

100. The learned academic, Professor Bolton, notes that corruption “leads to the slackening of competition for government contracts and impacts negatively on the government’s ability to obtain the best possible value for money.”[40] Accordingly, it is appropriate that the SABC noted in its submission that it has since referred the matter to the Special Investigating Unit, an investigative organ of state, for further investigations. For our present purposes, it is not necessary to make any specific

pronouncements on such intimated investigations. However, it suffices to note that the jurisprudence of our courts makes it clear that state organs and public entities have an obligation to take active steps against malfeasance or instances of irregularities wherever these rear their heads.

The importance of the matter

101. There can be no gainsaying that the issues raised in this matter are of significant importance. They concern a flagrant breach of the constitutional and legislative injunction that requires that an organ of state, such as the SABC, must procure goods and services in accordance with a system that is fair, equitable, transparent, competitive and cost effective. The facts of this matter indicate

that none of these requirements were complied with when the agreement was concluded with Lornavision.

102. As already mentioned, section 217 of the Constitution stipulates how Government’s supply chain management system should be managed and also confers a “constitutional right on every potential supplier to offer goods and services to the public sector when needed.”[41] In that regard, the National Treasury Practice Note 6 of 2007/2008 (“Practice Note 6”) is equally instructive.

103. What is more, the SABC’s own internal Supply Chain Management process of procuring goods and services by means of public advertisement gives effect to the Constitution’s prescripts that “all potential suppliers should be afforded the right to compete for public sector business through competitive bidding”.[42]

104. As held by the Constitutional Court in Allpay (supra):[43]

“Compliance with the requirements for a valid tender process, issued in accordance with the constitutional and legislative procurement

framework, is thus legally required. These requirements are not merely internal prescripts that SASSA may disregard at whim. To hold otherwise would undermine the demands of equal treatment, transparency and efficiency under the Constitution…” (emphasis added)

105. The failure to even comply with the deviation peremptory requirements renders the resultant contract between Lornavision and the

SABC unlawful, the enforcement of which the SABC is duty bound to resist.[44] In the same vein, the very resolution taken by the SABC that purported to sanction the agreement with Lornavision was itself in breach of the legal framework that govern the SABC as a public entity in its procurement of goods and services.

106. It is trite that one does not need to prove corruption per se before an order can be made setting an invalid procurement aside. This is so because deviations from fair process, as it happened in this matter may all too often be symptoms of corruption or malfeasance in the process.[45]

107. The relief sought, and as such the application in support thereof, has been brought both in terms of PAJA and the principle of legality. In my view, it is immaterial whether one disposes of this matter under the doctrine of legality or PAJA. On the facts of the present matter, the agreement between Lornavision and the SABC simply does not pass muster. The deviation from the procurement policies was at odds with the set strictures of the SABC’s policy. Consequently, it falls short of the stringent requirements of SABC’s policy on procurement of goods and services.

108. In my view, as the test expounded by our courts entails, the interests of justice require that an unlawful contract be set aside. That is so because it would be unfair to saddle the public purse with payments which are a result of unlawful contracts. Once it is proven that the contract with Lornavision was awarded contrary to the stipulated requirements of public procurement policies, the interests of justice require that it be reviewed and set aside. Accordingly, having regard to the merits of the present matter, it follows that the SABC’s reactive challenge must succeed.

Defence of Estoppel

109. In response to the SABC’s counter-application, Lornavision has invoked the doctrine of estoppel. It also sought to make something of the SABC’s purported cancellation of the contract. The principles of estoppel are trite, and I do not propose to rehash them here. However, in determining the appropriateness of raising estoppel in the circumstances of this matter, I can do no better than refer to the applicable test enunciated by the SCA in City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd [2007] SCA 28 (RSA). At para 13 Ponnan JA held as follows:

“failure by a statutory body to comply with provisions which the legislature has prescribed for the validity of a specified transaction cannot be remedied by estoppel because that would give validity to a transaction which is unlawful and therefore ultra vires.”

110. In my view, on the authority of RPM Bricks (supra), the doctrine of estoppel cannot avail Lornavision. That is because the contract it signed with the SABC woefully fell short of the

requirements of applicable legislative prescripts such as the PFMA which set the applicable minimum standards for a lawful tender

process by public entities. What is more, the deviation from the processes was unwarranted and constituted a flagrant breach of the SABC’s procurement policies. In the event, Lornavision’s defence of estoppel must fail.

111. By a parity of reasoning, it seems to me that because the contract was void ab initio, other similar defences, such as cancellation, may not be invoked. Once one finds that Lornavision may not raise estoppel, then it becomes unnecessary to deal with the events of May 2017.

112. In the circumstances, the agreement between Lornavision and the SABC was unlawful. That being the case, it falls to be reviewed and set aside.

Costs

113. The issues raised in the matter warranted the employment of two counsel. This was justified given the nature of the application and counter-application, and the issues involved. It seems to me that since the SABC has been successful in both the main and the

counter-application, it follows that it should be entitled to its costs.

114. That is the judgment.

________

SHANGISA AJ

Acting Judge of the High Court,

Gauteng Local Division, Johannesburg

DATE OF HEARING: 14 July 2017

Order Delivered: 26 July 2017

Date of Reasons: 01 August 2017

APPEARANCES:

COUNSEL FOR THE APPLICANT: Adv JA Swanepoel

INSTRUCTED BY: BASSON VAN ZYL INC

COUNSEL FOR THE RESPONDENT: Adv T Motau SC with D Hodge

INSTRUCTED BY: WERKSMANS ATTORNEYS

[1] Act 1 of 1999 as amended by Act 29 of 1999.

[2] Section 1(c) of the Constitution.

[3] Fedsure Life Assurance Ltd and others v Greater Johannesburg Transitional Metropolitan Council and others [1998] ZACC 17; 1999 (1) SA 374 (CC) at para 56.

[4] Affordable Medicines Trust and others v Minister of Health and others [2005] ZACC 3; 2006 (3) SA 247 (CC) at para 75.

[5] Pharmaceutical Manufacturers Association of SA and Another: In re: ex parte President of the Republic of South Africa and others 2002 (SA) 674 (CC) at para 90.

[6] Merafong Demarcation Forum and others v President of the Republic of South Africa and others [2008] ZACC 10; 2008 (5) SA 171 (CC) at para 62.

[7] Moseneke DCJ in Masetlha v President of the Republic of South Africa and Ano [2007] ZACC 20; 2008 (1) SA 566 (CC) at para 81.

[8] Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC) at para 33.

[9] Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and others 2008 (2) SA 481 (SCA) at para 4.

[10] Section 217 records: “(1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national

legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent,

competitive and cost-effective. (2) Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement

policy providing for ­- (a) categories of preference in the allocation of contracts; and (b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination. (3) National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.” See also AllPay Consolidated Investments Holdings (Pty) Ltd and others v Chief Executive Officer South African Social Security Agency and others 2014 (1) SA 604 (CC) at para 32 (“AllPay”).

[10] Section 217 records:

“(1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national

legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent,

competitive and cost-effective.

(2) Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement

policy providing for ­-

(a) categories of preference in the allocation of contracts; and

(b) the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.

(3) National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.”

See also AllPay Consolidated Investments Holdings (Pty) Ltd and others v Chief Executive Officer South African Social Security Agency and others 2014 (1) SA 604 (CC) at para 32 (“AllPay”).

[11] AllPay para 36.

[12] This submission was advanced by the applicants in AllPay.

[13] See also GVK Siyazama Building Contractors (Pty) Ltd v Minister of Public Works and others [2007] 4 All SA 992 (D) at paras 41-43, paras 89 – 91; Dexter Montague & Partners supra at para 40 – 43.

[14] Bolton, The Law of Government Procurement in South Africa, 2007, page 54.

[15] Bolton, The Law of Government Procurement in South Africa 2007, pg 57; see also Williams, S & Quinot, G, 'Public procurement and corruption: the South African response', (2007) 124 S. African L.J. 339, see further Glenister v President of the Republic of South Africa and Others 2011 (3) SA 347 (CC) paras para 57, para 83, and 175, and Prevention and Combating of Corrupt Activities Act 12 of 2004.

[16] Choice Decisions v MEC, Department of Development, Planning and Local Government, Gauteng (no 2) 2003 6 SA 308 (W) at para 12.

[17] AllPay para 40; Bolton The Law of Government Procurement in South Africa (Lexis Nexis Butterworths, Cape Town) 2007 at 57 where it is opined that: “One of the primary reasons for the express inclusion of the five principles in section 217(1) of the Constitution is to safeguard the integrity of the government procurement process. The inclusion of the principles, in addition to ensuring the prudent use of public resources, is also aimed at preventing corruption.” See also: (On the application of the Law Society) v Legal Services Commission; Dexter Montagu and Partners (a firm) v Legal Services Commission [2007] EWCA Civ 1264; 2008 (2) All ER 148 (CA) at paras 42-43; Currie The Promotion of Administrative Justice Act: A Commentary (Cyber Inc Johannesburg) 2007 at 113-114) where the following is said in regard to section 3(5) of PAJA, which allows an administrator discretion to follow procedures that are “fair but different” from the ones mandated in s 3(2): “Only procedures and empowering provisions can qualify as fair but different. An empowering provision is defined as ‘a law, a rule of common law, customary law or an agreement, instrument or other document in terms of which administrative action was

purportedly taken.’ Some empowering materials – such as internal development circulars – are not generally publicly assessible. At least for the purpose of the fair but different provision, it is submitted that an empowering provision can only qualify as ‘fair’ if it is itself publicly accessible. A law that is not publicly accessible cannot provide publicly known and thus fair procedures.”

[17] AllPay para 40; Bolton The Law of Government Procurement in South Africa (Lexis Nexis Butterworths, Cape Town) 2007 at 57 where it is opined that:

“One of the primary reasons for the express inclusion of the five principles in section 217(1) of the Constitution is to safeguard the integrity of the government procurement process. The inclusion of the principles, in addition to ensuring the prudent use of public resources, is also aimed at preventing corruption.”

See also: (On the application of the Law Society) v Legal Services Commission; Dexter Montagu and Partners (a firm) v Legal Services Commission [2007] EWCA Civ 1264; 2008 (2) All ER 148 (CA) at paras 42-43; Currie The Promotion of Administrative Justice Act: A Commentary (Cyber Inc Johannesburg) 2007 at 113-114) where the following is said in regard to section 3(5) of PAJA, which allows an administrator discretion to follow procedures that are “fair but different” from the ones mandated in s 3(2):

“Only procedures and empowering provisions can qualify as fair but different. An empowering provision is defined as ‘a law, a rule of common law, customary law or an agreement, instrument or other document in terms of which administrative action was

purportedly taken.’ Some empowering materials – such as internal development circulars – are not generally publicly assessible. At least for the purpose of the fair but different provision, it is submitted that an empowering provision can only qualify as ‘fair’ if it is itself publicly accessible. A law that is not publicly accessible cannot provide publicly known and thus fair procedures.”

[18] AllPay para 40.

[19] AllPay para 40.

[20] AllPay para 28.

[21] AllPay para 28.

[22] Definition unsolicited bid provided for in National Treasury Practice Note 11 of 2008-2009.

[23] AllPay para 33.

[24] At para [36].

[25] At paras [38]-[42].

[26] At para [51].

[27] See also, City of Cape Town v Aurecon South Africa (Pty) Ltd (2017) ZACC 5 (Aurecon CC) para 37.

[28] Brummer v Gorfil Brothers Investments (Pty) Ltd and Others (CCT45/99) [2000] ZACC 3; 2000 (5) BCLR 465; 2000 (2) SA 837 (CC) (30 March 2000) para 3.

[29] Van Wyk v Unitas Hospital and Another (CCT 12/07) [2007] ZACC 24; 2008 (2) SA 472 (CC); 2008 (4) BCLR 442 (CC) (6 December 2007) at paras 20 – 21.

[30] Mhlontlo Local Municipality supra at para 23.

[31] Mhlontlo Local Municipality supra at paras 27 – 28.

[32] Mhlontlo Local Municipality supra at para 29.

[33] Aurecon SCA, para 20.

[34] Camps Bay Ratepayers’ and Residents’ Association v Harrison [2010] 2 All SA 519 (SCA) at para 54; Aurecon South Africa (Pty) Ltd v The City of Cape Town (supra ) at para 17.

[35] Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2010 (1) SA 333 (SCA) at para 82; City of Cape Town v South African National Roads Agency Ltd and Others (2165/2013) [2015] ZAWCHC 135 (30 September 2015) at para 21.

[36] City of Cape Town (supra) at para 22. In para 22 the court went on to observe that, “the broad nature of the exercise enjoins the court to have regard, amongst other matters, to what the review application is about, its prospects of success and the broader consequences, in the context of delay, of it being upheld or turned away.”

[37] City of Cape Town (supra) at paras 25 and 30.

[38] Glenister 2 (supra) at paras 49 - 50

[39] Motau (supra) at para 24.

[40] P Bolton - The Law of Government Procurement in South Africa (2007: LexisNexis) at p 59.

[41] National Treasury Practice Note 6 of 2007/2008 (“Practice Note 6”) paragraph 2.1.

[42] Practice Note 6 paragraph 2.2.

[43] See Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others 2014 (1) SA 604 (CC) para 40.

[44] Municipal Manager: Qaukeni Local Municipality & another v FV General Trading CC 2010 (1) SA 356 (SCA) para 26; see also: Pepcor Retirement Fund and Another v Financial Services Board and Another 2003 (6) SA 38 (SCA) ([2003] 3 All SA 21) at para 10; Premier, Free State and Others v Firechem Free State (Pty) Ltd 2000 (4) 413 (SCA) at para 36.

[45] Allpay (supra) at para 92.