MEC for Department of Community Safety and Transport Management North West v Uniplate Group and Others (M489/15;M512/15) [2018] ZANWHC 84 (9 March 2018)

“IN THE HIGH COURT OF SOUTH AFRICA”

NORTH WEST DIVISION, MAHIKENG

CASE NO: M489/15 & M512/15

In the matter between:

MEC FOR DEPARTMENT OF COMMUNITY SAFETY

AND TRANSPORT MANAGEMENT NORTH WEST

APPLICANT

and

UNIPLATE GROUP First Respondent

NEW NUMBER PLATE REQUISITES CC Second Respondent

MINISTER OF TRANSPORT Third Respondent

RETRONE ROAD AND TRAFFIC SOLUTIONS (PTY) LTD Fourth Respondent

SOUTH AFRICAN NUMBER PLATE ASSOCIATION Fifth Respondent

ARGA PLATES & SIGNS (PTY) LTD

Sixth Respondent

In re: CASE NO: M 489/15

UNIPLATE GROUP (PTY) LTD

Applicant

MEMBER OF EXECUTIVE COUNCIL FOR

DEPARTMENT OF COMMUNITY SAFETY AND

TRANSPORT MANAGEMENT: NORTH WEST First Respondent

MINISTER OF TRANSPORT

Second Respondent

RETRONE ROAD AND TRAFFIC SOLUTIONS (PTY) LTD Third Respondent

SOUTH AFRICAN NUMBER PLATE ASSOCIATION Fourth Respondent

NEW NUMBER PLATE REQUISITES CC Fifth Respondent

ARGA PLATES & SIGNS (PTY) LTD Sixth Respondent

and

CASE NO. M512/15

NEW NUMBER PLATE REQUISITES CC

Applicant

MEMBER OF THE EXECUTIVE COUNCIL FOR

TRANSPORT MANAGEMENT: NORTH WEST

First Respondent

MINISTER OF TRANSPORT

Second Respondent

RETRONE ROAD AND TRAFFIC SOLUTIONS (PTY) LTD Third Respondent

SOUTH AFRICAN NUMBER PLATE ASSOCIATION

Fourth Respondent

UNIPLATE GROUP (PTY)

Fifth Respondent

ARGA PLATES & SIGNS (PTY) LTD

Sixth Respondent

LEAVE TO APPEAL

GUTTA J.

A. INTRODUCTION

[1] The applicant, the MEC for Department of Community Safety and Transport Management, North West (the MEC) applies for leave to appeal to the SCA or the full bench of this division, the whole of my judgment and order handed down on 19 October 2017 which reads:

1.1 The determinations made by the first respondent in Provincial Notice 33 as contained in the North West Provincial Gazette No. 7515 dated 11 August 2015 are hereby reviewed and set aside;

1.2 The determinations made by the first respondent in Provincial Notice 22 of 2017 as contained in the North West Provincial Gazette No. 7732 dated 14 February 2017 are hereby reviewed and set aside;

1.3 The invitation for bid dated 24 October 2013 under DPS/15/13/14 and the award of the bid to the third respondent on or about 18 February 2014 is hereby reviewed and set aside; and

1.4 The first respondent to pay the costs of the applications including the costs of NNPR’s two counsel.

[2] At the hearing, the Uniplate sought an amendment to prayer 1.4 supra of my order which amendment was not opposed. The Court granted the amendment as it was an inadvertent error relating to the cost order. Prayer 1.4 was accordingly amended to read, “the first respondent to pay the costs of the application including the costs of Uniplate’s two counsel”.

B. LEAVE TO APPEAL

[3] Section 17(1) of the Superior Courts Act reads as follows:

“Leave to appeal may only be given where the Judge or Judges concerned are of the opinion that:

a) (i) the appeal would have a reasonable prospect of success; or

(ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration

b) the decision sought on appeal does not fall within the ambit of Section 16(2)(a) and

c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties”.

[4] The test for reasonable prospects of success on appeal has been stated in S v Smit v S[1] where Plasket AJA held:

“What the test of reasonable prospects of success postulates is a dispassionate decision, based on the facts and the law, that a Court of appeal could reasonably arrive at a conclusion different to that of the Trial Court. In order to succeed, therefore, the appellant must convince this Court on proper grounds that he has prospects of success on appeal and that those prospects are not remote but have a realistic chance of succeeding. More is required to be established that that there is a mere possibility of success, that the case is arguable on appeal or that the case cannot be categorised as hopeless. There must, in other words, be a sound, rational basis for the conclusion that there are prospects of success on appeal”.

[5] The test which was applied previously in applications of this nature was whether there were reasonable prospects that another Court may come to a different conclusion[2]. The threshold to grant a party leave to appeal has been raised in Section 17(1). In The Mont Chevaux Trust v Tina Goosen & 18 Others[3], Bertelsmann J held as follows:

“It is clear that the threshold for granting leave to appeal against a judgment of a High Court has been raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another Court might come to a different conclusion, see Van Heerden v Cronwright & Others 1985(2) SA 342 (T) at 343H. The use of the word “would” in the new statute indicates a measure of certainty that another Court will differ from the Court whose judgment is sought to be appealed against”.

[6] The MEC must accordingly establish that he “would” or “will” have a reasonable prospect of success in another Court.

C. GROUNDS FOR APPEAL

[7] The MEC raised seven grounds for appeal which are dealt with seriatim hereinbelow

Non-compliance by NNPR with the provisions of Section 7 and 9 of PAJA

[8] The MEC submitted inter alia that:

8.1 The Court erred in law and in fact by dismissing the point in limine raised by the MEC in relation to the failure by NNPR to launch the application to review and set aside the invitation to bid and the award of the tender of Retrone within the period of 180 days as prescribed by Section 7(1) Promotion of Administrative Justice Act 3 of 2000 (PAJA) which requires that any proceedings for judicial review in terms of Section 6(1) thereof must be instituted without any unreasonable delay and not later than 180 days after the person became aware of the administrative action.

8.2 NNPR failed to launch a substantive application for condonation and an extension of time in respect of such default or delay as so enjoined by the provisions of Section 9(1) of PAJA, permitting the period of 180 days to be extended on application where the interest of justice so require.

8.3 The Court after finding that NNPR failed to make the necessary averments in support of the condonation for an extension of time, should have found that there was no proper application for condonation and an extension of time.

8.4 The Court erred or misdirected herself in interpreting the prayer of relief so sought by NNPR “as an application for an extension of time as provided in Section 9 of PAJA”.

8.5 The Court erred or misdirected itself by placing reliance on the principles outlined in the South African National Road Agency Ltd vs Cape Town City(Sanral)[4] and the National Treasury and Others v Opposition to Urban Tolling Alliance and others (OUTA) [5]” in finding that it was in the interest of justice to condone NNPR’s late launching of its application to review and set aside the tender awarded to Retrone, by virtue of the fact that Sanral and OUTA are distinguishable in that there were applications for condonation in these two cases whereas in casu there was no such application for condonation and extention to time.

8.6 The Court erred alternatively misdirected itself by making findings on the merits of the matter (prior to traversing the merits) in reaching the conclusion that it was in the interest of justice to condone non-compliance with the provisions of Section 9(1)(b) of PAJA.

8.7 The Court erred in not following the SCA decision in Aurecon South Africa (Pty) Ltd v Cape Town City[6] approved by the Constitutional Court in Cape Town City and Aurecon SA (Pty) Ltd[7] and in not following the SCA decision in Camps Bay Ratepayers’ and Residents’ Association and Another v Harrison and Another[8] as to the manner in which the discretion to extend the statutory time period should be exercised.

[9] Counsel for the applicant relied on the authorities listed hereinbelow to submit that NNPR was obliged to file a substantive application supported by an affidavit wherein all the facts are outlined to explain the delay and demonstrate the interests of justice.

a) Passenger Rail Agency of South Africa v Siyangena Technologies (Pty) Ltd and others[9](Siyangena);

b) Passenger Rail Agency of South Africa v Swifambo Rail Agency (Pty) Ltd[10](Swifambo);

c) State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Ltd[11](Gijima Holdings);

d) Alsa Construction (Pty) Ltd v Buffalo City Metropolitan Municipality[12](Alsa Construction)

[10] NNPR submitted inter alia that:

10.1 The entire basis for this ground is ill-founded. Firstly, no application for condonation in terms of Section 9 of PAJA was necessary, and to the extent that one was required, it was in any event made.

10.2 To the extent that condonation was necessary, it is not correct that a separate substantive application is required. Swifambo[13] supra and Siyangena and Others[14] supra.

10.3 NNPR’s prayer for relief in terms of Section 9 of PAJA was in the Notice of Motion. NNPR relied on the Swifambo supra, where PRASA had not initially made out a case in its founding papers and subsequently did so in its reply. Francis J, in dealing with whether it was appropriate or not to consider the allegations in reply ultimately found that it was in the interests of justice that it do so. Clearly therefore, a separate substantive application was not brought and is not required.

10.4 NNPR, in its founding affidavit explained that it had not brought the review application in respect of the award of the bid sooner as it did not realize the effect of the award of the bid until it started to be implemented. In Gijima Holdings[15] supra the basis for the Court exercising the discretion to extend the period of time in the interests of justice is to “…. be gleaned from facts placed before us by the parties or objectively available factors”.

10.5 In the founding affidavit NNPR set out in detail the sequence of events in regard to the bid being awarded to Retrone culminating in the promulgation of the Notice. Ultimately, it was only when the Notice was promulgated that the full effect of the award of the bid to Retrone was realized.

10.6 However, to the extent that the Court found that NNPR omitted in its affidavit to make any allegations in support of the prayer for an extension, that finding must be read in context. It is correct that NNPR did not deal with this under a separate heading relating specifically to their prayer. To do so would have been mere repetitions and NNPR would refer to what it had stated previously in the affidavit in dealing with the extension of time.

10.7 The test to determine whether an extension in terms of Section 9 should be granted, namely where it is in the interest of justice, was reaffirmed by the Supreme Court of Appeal in Asla Construction[16] supra. Considering whether to overlook the delay or not is clearly a balancing exercise, taking into account all the various aspects and weighing them against each other.

[11] A good starting point is the provisions of Section 7 of PAJA, which read as follows:

“7 Procedure for judicial review

(1) Any proceedings for judicial review in terms of Section 6(1) must be instituted without unreasonable delay and not later than 180 days after the date-

a) subject to subsection (2)(c), on which any proceedings instituted in terms of internal remedies as contemplated in subsection (2)(a) have been concluded; or

b) where no such remedies exist, on which the person concerned was informed of the administrative action, became aware of the action and the reasons for it or might reasonably have been expected to have become aware of the action and the reasons”.

[12] Section 7 of PAJA requires that the reasons for the decision must first be obtained before the time period can commence to run as one cannot review a decision if one does not know what the reasons are. There cannot be an obligation to review a decision until either those reasons are furnished or it is apparent that no further reasons will be forthcoming.

[13] It is common cause that there were no internal remedies. As confirmed in the matter of Siyangena supra[17], the time period of 180 days only began to run once NNPR was aware not only of the decision to award the bid to Retrone, but also, and more importantly, was aware of the reasons for it. NNPR in their founding affidavit said “Moreover the manner in which the purported allocation of the bid has been varied has only become apparent during the implementation process. Once the record is made available I intend to amplify the grounds upon which the original tender should also be set aside”. Thus at the time NNPR delivered its founding affidavit it was not aware of the reasons for the award of the bid. It is common cause that the reasons for the decisions were delivered as part of the record on 12 February 2016. Thus the 180 days only started to run from the said date and NNPR application was accordingly launched timeously in terms of Section 7(1)(b) of PAJA.

[14] Upon receipt of the reasons, NNPR supplemented its founding papers in terms of the provisions of Rule 53(4) of the Uniform Rules of Court and addressed the reasons for the decision in such supplementary affidavit.

[15] Furthermore, I accept and agree with NNPR’s explanation that, that was the reason why their prayer for condonation was framed as to only be sought “to the extent necessary”. I further agree that I erred in my finding that NNPR omitted in its affidavit to make any allegations in support of the prayer for an extension as NNPR in its founding affidavit alleged that:

“59 It is submitted that given the facts set out herein above that it would also be appropriate to set aside the purported award of the tender to Retrone in the first place.

60 Insofar as that award was made more than 180 days ago it is submitted that the significance of that award only becomes apparent when all the facts and circumstance set out herein are considered.

61 In these circumstances it is submitted that it is appropriate to grant an extension of time within which to bring this application as provided for in Section 9(1)(b) of the said Act in as much as it is in the interests of justice to do so.

62 Moreover the manner in which the purported allegation of the bid as has been varied is only become apparent during the implementation process. Once the record is made available in intend to amplify the grounds upon which the original tender should also be set aside”.

[16] Accordingly when considering the aforegoing, I am in agreement with NNPR that this Court erred by not paying due regard to the date when NNPR was furnished with the reasons and the explanation proferred in its affidavit. Having said that, the aforegoing lends more support and weight to my finding that it was in the interest of justice when considering the facts in totality and in context to grant NNPR the extension as prayed for in its Notice of Motion.

[17] For the reasons stated supra, I am affirmed in my belief that another Court would not come to a different conclusion but to dismiss the point in limine. Hence I am of the view that there are no reasonable prospects that another Court would arrive at different finding.

The award of the tender

[18] The applicant submitted inter alia that, this Court erred in fact and in law in reviewing and setting aside the award of the tender to Retrone on the basis of a purported

failure on the part of the MEC to consult with stakeholders and/or follow due process prior to the advertising of the tender or the invitation to bid by the Department for the following reasons:

18.1 there exist no statutory, common law or Constitutional law authority enjoining an organ of state to consult with stakeholders/role players/service providers prior to advertising a tender of issuing an invitation to bid;

18.2 the Court failed to provide any legislative or established legal principle in support of such reasoning, finding or conclusion concerning a need to consult with stakeholders prior to the advertising of the tender or issuing the invitation to bid;

18.3 the relevant legislative and policy prescripts regulating public procurement in the public sector do not contemplate a process whereby potential service providers and stakeholders in the particular industry need to be consulted prior to the advertising of the tender or issuing of the invitation to bid.

[19] The applicant submitted further that:

19.1 The Court erred in determining the validity, legality and propriety of the award of the tender to Retrone primarily on the basis of a purported procedural requirement preceding the advertisement of the tender or invitation to bid by the Department.

19.2 The Court erred in not determining the validity, legality or propriety of the tender so awarded to Retrone on the basis of the non-compliance by Retrone with the tender requirements, specifications or criteria so specified in the tender documentation.

19.3 The Court erred in so reviewing and setting aside the award of the tender to Retrone notwithstanding the fact that the Court did not find any evidence indicating or establishing or proving:

a) that Retrone did not qualify for the award of the tender, that is, did not comply with the tender requirements

b) that Retrone’s bid was unsatisfactory and that it had no capacity to deliver the securitised number plate system as appointed by the first respondent.

19.4 The Court erred or misdirected itself by engrafting a duty on government or organs of state to consult with stakeholders/role players/service providers, prior to advertising the tender or issuing any invitation to bid in that:

a) A call for tenders does not as a general rule give rise to the conclusion of a contract. It merely serves as an invitation to do business.

b) A call or advertisement for tenders or the issuing of an invitation to bid is in essence an invitation to do business and the submission of a tender in response thereto amounts to an offer on the part of such service provider with the attendant consequences that only once a tender has been accepted and such acceptance has been communicated to the service provider or tenderer does a contract come into existence between the service provider and the organ of state.

c) With regard to government procurement in South Africa, organs of state are enjoined to act within the confines of their constitutional and statutory powers which are regulated by PAJA, other statutory provisions and the Constitution, in particular the provisions of Section 217 of the Constitution providing for a procurement system which is “fair, equitable, transparent, competitive and cost effective”. This entails that the procurement system of organs of state must comply with principles such as fairness, equity, transparency, competitiveness and cost effectiveness when acquiring goods or services.

19.5 The Court erred in fact and in law in reviewing and setting aside the award of the tender to Retrone on the basis of or by placing reliance on certain alleged utterances by a certain Williams, which preceded the issuing of the tender or invitation to bid as indicative of pre-knowledge and irregularity which marred the entire tender process that culminated in the award of the tender to Retrone, for the following reasons:

a) The allegations relating to prior knowledge by Williams of the advertisement or issuing of the tender or invitation to bid and the possible ulterior and/or improper motive attached thereto should not have influenced the Court to make a finding on this disputed aspect without having applied the Plascon-Evans test to NNPR’s version against Retrone’s version as maintained in its affidavit filed under Part A of the application.

b) The Court ought to have referred this disputed limited aspect to oral evidence before making any such findings which are tantamount to credibility findings. Put otherwise such findings ought to have been made by the Court after hearing oral evidence in this regard.

c) Such findings of pre-knowledge or irregularity arising from such alleged utterances by Williams having been so disputed were not capable of resolution on paper before referring same to oral evidence.

d) Such finding of ulterior purpose or motive was made without the Court specifying the nature and extent thereof let alone a factual basis therefore.

19.6 The Court further erred in finding that; “The process followed is in the circumstances irregular, unfair and offensive to the constitutional rights of not only the blankers but the number plate industry at large” without specifying the nature and extent of the alleged irregularity or unfairness or which specific “constitutional rights of the blankers and number plate industry at large” were offended.

19.7 Furthermore, the Court erred by reviewing and setting aside; “The bid and awarding of the tender to Retrone under Section 6 of PAJA” without specifying which provisions of Section 6 of PAJA have been violated, having regard to the over-arching and broadness of the provisions of Section 6 of PAJA which are mutually exclusive.

[20] NNPR submitted inter alia that:

20.1 The MEC has not had due regard to all the reasons set out in the judgment for setting aside the tender, but has sought to argue that the Court has decided that a failure to consult in respect of the bid will cause it to be set aside. The Court considered all the relevant facts and circumstances.

20.2 The Court held that what was being proposed was not just an ordinary bid but disruption of the entire number plate industry without following due process.

20.3 The MEC further ignores that the administrative action was taken arbitrarily and capriciously and for an ulterior motive. Moreover it was done contrary to the existing legislation at the time.

20.4 One has to question the applicant’s motive in seeking to set aside the tender particularly in circumstances where the award of tender preceeded the proclamation which proclamations the Court has now reviewed and set aside.

[21] Although there may not be any statutory or constitutional law authority enjoining an organ of state to consult with stakeholders/role players/ service providers prior to advertising a tender or issuing an invitation to bid this does not mean that a Court must ignore the unique facts and circumstances in a case such as the facts in casu which cry out for consultation. A Court is enjoined to consider the facts within the constitutional framework of a “fair,

equitable, transparent, competitive and cost effective” procurement system which I considered before arriving at my finding

that the MEC should have consulted before publishing the bid. To reiterate what I said in my judgment:

“Consultation with all relevant stakeholders prior to publishing the bid was in my view necessary as the first respondent intended as was apparent subsequent to the appointment of Retrone, to make radical change to the number plate industry in the North West Province through the introduction of a distributor. What was essentially a private industry regulated by law in terms of specifications and standards was to be transformed which ultimately would affect the NNPR and Uniplate market share and its business…”

[22] Counsel for applicant is correct in his submission that neither the advertising of a tender nor the issuing of an invitation to bid gives rise to contractual obligations. The contractual obligations arose when the bid was accepted and the tender awarded to Retrone. At that stage the parties were not aware of the MEC’s intention to drastically change the face of a private industry and the only recourse for the aggrieved parties was to approach the Court for review which could and should have been avoided through consultation.

[23] Furthermore this Court considered all the relevant facts and circumstances, particularly that there was no legislation in place to give effect to the tender and that the administrative action was taken arbitrarily and capriciously. In so far as the Court attached weight to the utterances of Williams, there was no request for a referral to oral evidence. In my view the entire process was tainted from the onset. Having said that, when considering the test for reasonable prospects of success on appeal as stated supra, I am of the view that there is a possibility that another Court would agree with the applicant that this Court erred or misdirected itself by engrafting a duty on government or organs of state to consult with stakeholders prior to advertising the invitation to bid or the tender. For that reason, I will grant the applicant leave to appeal the order reviewing and setting aside the tender to Retrone.

Remaining grounds for leave to appeal

[24] In respect of the remaining grounds for leave to appeal, set out infra, full reasons were advanced in my written judgment for my findings and I am of the view that there are no reasonable prospects of success on appeal and no compelling reasons why the appeal should be heard.

a) Locus standi

b) Non joinder;

c) The unconventional manner of launching the application;

d) The failure to consult prior and to publication of the determination;

e) The cost order.

D. ORDER

[24] In the result:

a) Leave to appeal prayers 1.1, 1.2 and 1.4 (save for NNPR costs in relation to prayer 1.3) is dismissed with costs, which costs are to include the costs of Uniplate’s two counsel.

b) Leave to appeal prayer 1.3 and the consequent cost order awarded to NNPR is granted to the full bench of this division.

________________

N. GUTTA

JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING

: 23 FEBRUARY 2018

DATE OF JUDGMENT

: 09 MARCH 2018

ADVOCATE FOR APPLICANTS : ADV MOGAGABE (SC)

ADV CHWARO

ADV FOR RESPONDENTS - NNPR : ADV SAINTS (SC)

ADV SAINTS

ADV FOR RESPONDENT - UNIPLATE : ADV BOTHA

ATTORNEYS FOR APPLICANT : STATE ATTORNEY

ATTORNEYS FOR RESPONDENT – UNIPLATE : SMIT STANTON ATTORNEYS

(Instructed by Saints Attorneys)

ATTORNEYS FOR RESPONDENT - NNPR : NIENABER & WISSING

(Instructed by Blake Bester De Wet & Jordaan Inc.)

ATTORNEYS FOR THIRD & SIXTH RESPONDENTS: VAN ROOYEN TLHAPI WESSELS

(Instructed by A J Kachelhoffer Attorneys)

[1] 2012(1) SACR 567 (SCA) 570 at para [7]

[2] Commissioner of Inland Revenue v Tuck 1984(4) 888 (T) at 8908

[3] 2014 JDR 2325 (LCC) at para [16]

[4] 2017(1) SA 468 (SCA)

[5] 2012(6) SA 223 (CC)

[6] 2016(2) SA 199 (SCA)

[7] 2017(4) SA 223 (CC) para 40 - 44

[8] [2010] 2 All SA 519 (SCA)

[9] Unreported judgment [2016] 7839 [2017] ZAEPPHC 138 delivered on 3 May 2017

[10] 2017(6) SA 223 (GJ) at para 30

[11] (2017) ZACC decided on 14 November 2017 at para 49

[12] 2017(6) SA 360 (SCA) at para 9-10

[13] 2017(6) SA 223 (GJ)

[14] GP 7839/2016 delivered on 3 May 2016

[15] [2017] ZACC 40 at para 49 delivered on 14 November 2017

[16] (894/2016) [2017] ZASCA 23 (24 March 2017)

[17] GP 7839/2016 delivered on 3 May 2016