Minister of Employment and Labour and Others v Nexus Forensic Services (Pty) Ltd (74499/2019) [2021] ZAGPPHC 58 (1 February 2021)

HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

(1) REPORTABLE: NO.

(2) OF INTEREST TO OTHER JUDGES: NO.

(3) REVISED.

DATE 1 FEBRUARY 2021

CASE NO: 74499/2019

In the matter between:

MINISTER OF EMPLOYMENT AND LABOUR

First Applicant

COMMISSIONER OF THE COMPENSATION FUND Second Applicant

DIRECTOR: SUPPLY CHAIN MANAGEMENT:

THE COMPENSATION FUND Third Applicant

MINISTER OF FINANCE Fourth Applicant

SAB & T CHARTERED ACCOUNTATNS INC

T/A NEXIA SAB & T

Fifth Applicant

DIRECTOR GENERAL: THE DEPARTMENT OF

EMPLOYMENT AND LABOUR

Sixth Applicant

and

NEXUS FORENSIC SERVICES (PTY) LTD Respondent

J U D G M E N T (Leave to Appeal)

This matter has been heard in terms of the Directives of the Judge President of this Division dated 25 March 2020, 24 April 2020 and 11 May 2020. The judgment and order are accordingly published and distributed electronically.

DAVIS, J

[1] Introduction

On 13 November 2020, this court reviewed and set aside the award of a tender for the rendering of forensic services to the Compensation Fund. The basis for the judgment was that the award had been made after the expiry of the tender validity period. The initial respondents, being the Minister of Employment and Labour (the Minister), the Commissioner of the Compensation Fund, the

Director: Supply Chain Management: The Compensation Fund and the director-General of the department of Employment and Labour (the DG) all seek leave to appeal the judgment.

[2] The relevant chronology

2.1 After an extension, the bids closed on 6 August 2018. No validity for the bids was determined or prescribed in any of the bid documents.

2.2 On 31 October 2018, at the request of the Supply Chain Manager of the Compensation Fund, the bidders agreed to the extension of the validity of their bids to 7 February 2019.

2.3 On 19 October 2018 the bid Evaluation Committee (BEC) made its recommendation to the Bid Adjudication Committee (BAC).

2.4 On 14 December 2018 the BAC approved the BEC’s recommendations albeit that the approval was in the convoluted fashion as quoted from the BAC minutes in paragraph 2.9 of the initial judgment. These minutes were signed on 26 February 2019.

2.5 On 21 March 2019 the DG approved the award of the tender to a company that was cited as the fifth respondent in the review application and addressed a letter to that effect to the said company.

2.6 Based on the aforesaid summary of the findings in the initial judgment, this court concluded as follows in paragraph 3.10 thereof:

“I therefore find that, upon the expiry of the extended validity period to which the remaining bidders had agreed, the tender process had unsuccessfully been completed. The subsequent “award” of the tender on 31 March 2019 by the DG and the contract signed thereafter and all subsequent steps, including the publication and implementation of the award, are unlawful and invalid”.

[3] The grounds upon which leave to appeal is sought

3.1 The principal ground upon which leave to appeal is sought, is based on the premises that the BAC took the decision to award the tender and not the DG.

3.2 Adv Matebese SC who appeared with his learned junior for the applicants in the application for leave to appeal readily (and, in my view, correctly) conceded that the DG as accounting officer is the one who takes decisions on the awards of tenders (and actually awards them). This “default position” accords with the terms of the bid documents which expressly reserved the right of the Department (represented by the DG) to make an award, make no award or even award the bid to the second highest bidder.

3.3 Adv Matebese SC’s argument in that, is the absence of evidence of whether the DG had delegated his decision-making authority to the BAC and similar absence of evidence indicating whether Departmental policies exist which accord such decision-making authority to the BAC (in similar fashion as in some local authorities such as the those which featured in the cases quoted (for different reasons) in paragraph 3.1 of the judgment), the review should have failed. I have difficulty in following the logic of this argument: if there is no evidence of a delegation, the default position would remain intact. Similarly, in the absence of a policy (or proof of the existence of such a delegating policy), the default position would remain undisturbed, i.e the DG retained his or her decision-making authority.

3.4 As an alternative, this court was criticized for having allowed the argument about the tender validity periods to proceed at all, since it had been raised in the replying affidavits for the first time. In my view a court would fail in its duty if it were to allow an invalid tender to stand, involving organs of state and huge public expenditure, simply because of a procedural aspect. Furthermore, one would have expected the Minister or the DG, should a delegation or policy document have indicated an abdication of the DG’s decision-making authority to the BAC, to simply produce such a document and to ask that it be allowed by way of a duplicating affidavit or a response to this point raised in reply. Had such documents existed, this would have been the proper response and not a simple procedural argument. In any event, the validity aspect had fully been argued when the matter was heard, without any attempt to postpone the matter or supplement the papers. I am still satisfied that the entertainment of this aspect had been a proper exercise of this court’s discretion.

[4] Conclusions

4.1 A court of appeal will not interfere with the exercise of discretion by a court a quo if unless such discretion was exercised arbitrarily, capriciously, in a biased fashion, based on a wrong principle or where the court “did not act for substantial reasons”. See: Ex parte Neethling 1951 (4) SA 331 (A) and the numerous annotation thereof, all confirming these same principles. The applicants argue that the discretion was exercised arbitrarily and contrary to the “trite principles of the law”. As set out in paragraph [3] above, this was not the case. I therefore find no reasonable prospect of success that a court of appeal would find that the issue of substantive invalidity of the award of a tender after the expiry of the validity period of the bids, should not have been entertained.

4.2 On the merits, it is clear that there was no evidence disturbing the “default position” referred to above. The consequence hereof is that the DG had awarded the tender beyond its validity period. On the facts of this case, I find no reasonable prospects of success on appeal against this finding.

4.3 Lastly, I point out that the respondent, being the initial applicant, did not formally oppose the application for leave to appeal, due to financial constraints. It was therefore only represented during the application for leave to appeal by an attorney with a watching brief. I therefore find it unnecessary to make a costs order in respect of this application.

[5] Order:

The application for leave to appeal is refused.

N DAVIS

Judge of the High Court

Gauteng Division, Pretoria

Date of Hearing: 28 January 2021

Judgment delivered: 1 February 2021

APPEARANCES:

For the Applicants: Adv. Z Z Matebese SC together Adv. A Gxogxa

Attorney for Applicants: The State Attorneys, Pretoria

For the Respondent: Attorney on watching brief

Attorney for Respondent: VZLR Attorneys, Pretoria