Moniel Holdings (Pty) Ltd v Premier of Limpopo Province and Others (7627/2006) [2007] ZAGPHC 7; [2007] 3 All SA 410 (T) (5 March 2007)

IN THE HIGH COURT OF SOUTH AFRICA /ES

(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 7627/2006

DATE: 5/3/2007

REPORTABLE

IN THE MATTER BETWEEN:

MONIEL HOLDINGS (PTY) LTD PLAINTIFF

AND

PREMIER OF LIMPOPO PROVINCE FIRST DEFENDANT

MEC FOR FINANCE SECOND DEFENDANT

LIMPOPO PROVINCIAL GOVERNMENT

CENTRAL PROCUREMENT COMMITTEE THIRD DEFENDANT

MEC FOR HEALTH AND SOCIAL DEVELOPMENT FOURTH DEFENDANT

JUDGMENT

SITHOLE, AJ

A INTRODUCTION

[1] This is an exception which has been raised by the defendants against the plaintiff's particulars of claim emanating from an award of a procurement contract pursuant to a tender proceeding in the Limpopo province.

B THE PARTIES

[2] The plaintiff is Moniel Holdings (Pty) Ltd, a company with limited liability, duly registered and incorporated in accordance with the company laws of the Republic of South Africa, conducting business as coal merchants and having its principal place of business situated at 2956 Unit B, Lebowakgomo, Limpopo province.

[3] The first defendant is the Premier of Limpopo province, who has been cited in his official capacity as the head of the Limpopo Provincial Administration and having his offices situated at Hans van Rensburg Street, Polokwane.

[4] The second defendant is the MEC for Finance, Limpopo Provincial Administration, who has been cited in her official capacity as the head of the Limpopo Provincial Treasury, of care of, the Department of Treasury, Limpopo Provincial Government Supply Chain Management 0ffice at 56 58 Paul Kruger Street, Polokwane.

[5] 5.1 The third defendant is the Limpopo Provincial Government Central Procurement Committee, an organ of state established on or about 0ctober 2005 to administer and regulate the award of tenders on behalf of various departments of the Limpopo Provincial Administration having its offices at the Provincial Supply Chain Management 0ffice, 56 58 Paul Kruger Street, Polokwane.

5.2 The third defendant replaced and is the successor in title to the erstwhile Northern Transvaal Tender Board ("the Board") which was dissolved in terms of section 2 of the Northern Transvaal Tender Board Repeal Act 1 of 2005, which act came into operation on 1 August 2005.

[6] 6.1 The fourth defendant is the MEC for Health and Social Development of the Limpopo Provincial Administration who has been cited in his official capacity as the Head of the Department of Health and Social Development, Limpopo Province, and having his offices at care of the Department of Health and Social Development, College Street, Polokwane.

6.2 In terms of section 4(3) of the Northern Transvaal Tender Board Repeal Act, the rights and obligations resulting from the actions of the Board vest in the Department of Health and Social Development on behalf of which the Board exercised its powers in terms of the (now repealed) Northern Transvaal Tender Board Act, 2 of 1994.

[7] All the parties are legally represented. Counsel for the plaintiff is Mr L Nowosenetz duly instructed by Attorneys Mahlase, Nonyane-Mahlase of Polokwane, and counsel for all the defendants is Mr S J Maritz SC, with him is Mr S A Nthai (as he was then) duly instructed by the State Attorney, Pretoria.

C FACTUAL BACKGROUND

[8] In this judgment I shall, with the necessary slight changes being made, adopt the summary of the factual background as narrated by VAN DER MERWE, J in his judgment dated 27 0ctober 2005 in case no 31889/03 (hereinafter referred to as "the review judgment"). Sometime during March 2003 the third defendant published a notice in its tender bulletin calling for tenders for the supply of coal to hospitals in various regions in the Limpopo Province. It would appear that the normal practice is that either the Secretariat of the third defendant or some other committee evaluates the tenders and then makes certain recommendations. It would also appear that in casu the evaluation was conducted by the Secretariat of the third defendant and a committee set up by the third defendant to evaluate the tenders.

The tenders first served before the third defendant on 28 September 2003. It would further appear that certain queries were directed by the third defendant to the body that evaluated the tenders in respect of why the highest point scorer was not recommended in some of the six regions; what the actual consumption of coal and anthracite in its district was; and what the current price paid by the end user was. It becomes obvious that a further investigation and evaluation was made.

At that stage the plaintiff was disqualified on the basis that it failed to comply with clause 3 of the General and Special Conditions, in that it failed to submit a copy of the public indemnity insurance policy. Certain other tenderers were also disqualified, some tenderers on exactly the same grounds and some others on various other and additional grounds.

It would appear that on or about 15 March 2005, one Mr Xalaba Alfred Rampola, the then chairperson of the Tender Board filed an affidavit on behalf of the third defendant that the plaintiff, together with other tenderers, should not have been disqualified because the successful tenderer, including that of a certain Muntu Coal Merchants CC, did not comply with clause 3 of the General and Special Conditions of the tender, in that they failed to submit copies of public indemnity insurance policies. The third defendant apparently considered that this fact was never disclosed to the Tender Board and therefore an error was made. It therefore appears that not a single tenderer complied in all respects with what was required of them.

0n 9 October 2003, however, the third respondent decided to award the coal and anthracite tender to Muntu Coal Merchants CC ("Muntu") in respect of Capricorn, Sekhukhune, Waterberg and Mopani districts and the other tenderers, to wit, Mpho Coal Yard and Rubbytad CC were awarded the Bohlabela and Vhembe districts respectively. The plaintiff thus became an unsuccessful tenderer.

D THE PLEADINGS BY PLAINTIFF

[9] In its particulars of claim the plaintiff states, inter alia, the following:

"9. 9.1 In terms of section 2(1)(f) of the Preferential Procurement Policy Framework Act (no 5 of 2000) the contract must be awarded to the tenderer who scored the highest points …

9.2 The adjudication/evaluation criteria for the tenderer as published in the said tender bulletins were as follows:

• adherence to tender specification

• compliance with tender conditions

• firmness of prices and delivery periods

• physical existence of the tenderer

• location of the tender

• tender price

• tax clearance certificate.

10. 10.1 The plaintiff scored the highest points in all the regions save for Mopani where Muntu scored the highest points and the plaintiff scored the second highest points. However, the plaintiff offered a 10% discount (in all regions which would have made it the cheapest tenderer for the Mopani region as well).

10.2 The plaintiff was the most successful tenderer in all the six (6) regions and the Board should have awarded the aforesaid tenders to plaintiff.

10.3 0n the contrary, the Board acted unlawfully, wrongfully, unreasonably, irrationally and capriciously in awarding the tenders as set out in paragraph 8 above (sic), thereby infringing on the plaintiff's rights to fair administrative action as enshrined in terms of the provisions of the Republic of South Africa Constitution Act (no 108 of 1996) read with the Promotion of Administrative Justice Act (no 200 of 2000)."

In so far as the third defendant's concession about the error referred to above, the plaintiff pleaded that:

"14. The Board hereby made an election and waived item 3 of the Special Conditions of the tender. The effect of the above stated waiver is that the plaintiff would have emerged the successful tenderer in all regions.

15. As a result of the wrongful and unlawful actions of the Limpopo Provincial Tender Board for which all the respondents are liable, plaintiff has suffered damages in the sum of R34 000 000,00 (thirty four million rands) in respect of the loss of profit which it would otherwise have derived from the said tenders.

16. The aforesaid damages claimed by the plaintiff flow naturally and generally from the tender contracts awarded as set out in paragraph 8 above (sic)."

The defendants have excepted to the above given particulars of claim on the following grounds:

"1. 0n the factual basis pleaded by the plaintiff, there is no claim in delict for pure economic loss.

2. In the premises, the plaintiff's claims are bad in law."

E THE QUESTION TO BE DECIDED

[10] The basic issue to be decided by this Court is whether, in the light of the above given factual background, the plaintiff's particulars of claim are excipiable for the reasons stated by the defendants. Stated otherwise, the issue for this Court is whether, in the circumstances described above, the conduct of the third respondent (and by implication of all the defendants) is wrongful and unlawful in the sense that it could give rise to liability for delictual or constitutional damages in respect of the plaintiff's loss of profit.

F SUBMISSIONS ON BEHALF OF THE PLAINTIFF

[11] Counsel for the plaintiff contended and submitted that:

11.1 Tender processes constitute administrative action to which the constitution's administrative justice provisions are applied. As authority for this proposition he referred the court to Logbro Properties CC v Bedderson NO and 0thers 2003 2 SA 460 (SCA) 465G 466A;

11.2 The Court may grant appropriate relief in order to enforce a right in the Bill of Rights, and it is possible that an award of constitutional damages may be made in appropriate cases. As authority for this proposition he referred the court to Fose v Minister of Safety and Security [1997] ZACC 6; 1997 3 SA 786 (CC), as well as the unreported case no 29635/2000 Nu Vita Stationery Manufacturers (Pty) Ltd v Mr T Mufamadi and three others TPD;

11.3 An award of constitutional damages should only be considered where no common law or delictual remedy is available to avoid overcompensation. Further, that "constitutional damages" as discussed in Fose's case supra, might be awarded as appropriate relief where no statutory remedies have been given or no adequate common law remedies exist. Where the lawgiver has legislated statutory mechanisms for securing constitutional rights and provided, of course, that they are [not] constitutionally objectionable they must be used. This proposition apparently originates from the case Jayiya v MEC for Welfare, Eastern Cape 2004 2 SA 611 (SCA);

11.4 As a consequence of the foregoing, it is clear, at least in principle, that constitutional damages exist as an alternative to delictual damages and the plaintiff has, therefore, pleaded a cause of action independent of delict. This implies that the plaintiff does not need to rely on delict to sustain its particulars of claim and therefore the defendants' exception should fail for this reason;

11.5 In so far as delictual damages are concerned the right of action of such damages arising from a fraudulent tender process was recognised in Transnet Ltd v Sechaba Photoscan (Pty) Ltd 2005 1 SA 299 (SCA), wherein the Court held specifically that a loss of profits may be recoverable in delict irrespective of whether the loss was caused by fraud or negligence;

11.6 The Court in Steenkamp NO v Provincial Tender Board, Eastern Cape 2006 3 SA 151 (SCA) held, however, that no action for damages in delict is available to a tenderer against a Tender Board;

11.7 Even if there is no action in delict it is not possible to sever the pleadings and strike out the common law action while still leaving the constitutional claim. It is, therefore, submitted by the plaintiff that the exception cannot succeed. Further, that for the reasons given above, it is not well founded and should be dismissed with costs.

G SUBMISSIONS ON BEHALF OF DEFENDANTS

[12] Counsel for the defendants contended and submitted that:

12.1 The exception raised by the defendants is based on the recent judgment by the Supreme Court of Appeal in Steenkamp NO v Provincial Tender Board, Eastern Cape 2006 3 SA 151 (SCA). (It should be pointed out that at the time this matter was heard that the Steenkamp case supra was heard on appeal by the Constitutional Court on 11 May 2006 and decided on 28 September 2006. I shall revert to it at the appropriate moment.);

12.2 The Supreme Court of Appeal, per HARMS, JA expressed itself at p169D F in the following terms:

"Weighing up these policy considerations I am satisfied that the existence of an action by tenderers, successful or unsuccessful, for delictual damages that are purely economic in nature and suffered because of a bona fide and neligent failure to comply with the requirements of administrative justice cannot be inferred from the statute in question. Likewise, the same considerations stand in the way of the recognition of a common law legal duty in these circumstances.";

12.3 The tender in question served on review in the Pretoria High Court before VAN DER MERWE, J under case no 31889/2003 as is confirmed in paragraph 13 of the plaintiff's particulars of claim. A copy of the judgment is attached to the defendants' heads of argument;

12.4 The issues on review are res judicata and cannot be revisited more so that VAN DER MERWE, J in the review matter upheld the concession by the Tender Board that it disqualified the plaintiff as a tenderer because of a bona fide oversight and that the award of the tender fell to be set aside, which was so ordered;

12.5 The allegations in paragraph 10.3 of plaintiff's particulars of claim are to be read in context with paragraphs 11, 12, 13 and 14 thereof, as well as the judgment of VAN DER MERWE, J;

12.6 The only reasonable inference from the factual context pleaded and as further set out in the judgment of VAN DER MERWE, J is that the Tender Board committed a bona fide error in adjudicating upon the tender;

12.7 The contract in question expires (sic) on 31 0ctober 2006 and has therefore been largely performed. This is apparent from p16 lines 11 19 of the judgment of VAN DER MERWE, J;

12.8 In the Steenkamp case supra the court at p165D held that:

"Holding that an unsuccessful tenderer is not entitled to recover damages (at least not for lost profits) in delict is not a quirk of local jurisprudence."

And at p165G where the Court referred to a situation where the public will be forced to pay twice for the same product, the present case is a comparable one;

12.9 It is submitted that the present matter is on all fours with the judgment in Steenkamp (supra) and that the exception should be upheld with costs;

12.10 As to costs, the amount claimed is very large (R34 million) and the issues are of sufficient importance to justify the costs occasioned by the employment of two counsel.

H ANALYSIS AND FINDINGS

[13] Having read the papers as well as the relevant case law, and having heard argument being presented on behalf of the respective parties, I make the following findings:

13.1 Since the exception raised by the defendants is based on the Steenkamp case supra and the argument thereon is based on what was decided by VAN DER MERWE, J in the review application, I shall make constant reference to the two cases.

13.2 Before one can get to the issue to be decided, it would, in my opinion, be useful to first deal with certain allegations which are raised by the plaintiff in its particulars of claim. These are, in the first instance, whether the plaintiff is a successful tenderer or not and secondly whether there was, in fact, a waiver made by the third defendant or not.

Was plaintiff a successful tenderer?

13.3 The plaintiff has alleged that it was the most successful tenderer in all the six regions and the Tender Board should have awarded the tenders to it. In support of this allegation the plaintiff states that it scored the highest points in all the regions except for Mopani where it scored the second highest points and that it offered a 10% discount in all regions, which would have made it the cheapest tenderer for the Mopani region as well. In dealing with the foregoing allegations, VAN DER MERWE, J in his judgment to remit the plaintiff's matter for reconsideration in terms of section 8(1)(c)(i) of the Promotion of Administrative Justice Act 200 of 2000 ("PAJA"), inter alia, said:

"I am not prepared to make any decision whether to remit or not dependent on the claim for damages, the outcome of which I do not know. I have already referred to the fact that various other tenderers, in fact it appears to me all tenderers, failed to comply in full with the requirements for the tender.

If I now decide to award the tender to one of the tenderers not complying with the requirements (sic) may object and ask why I choose one. The fact that the applicant alleges that it scored the highest points between itself and the successful tenderer means nothing. The scoring of the highest points is not the only criteria, but there was no comparison between the tenderers referred to by the applicant and those tenderers that were not shortlisted. I do not know what the eventual outcome of the process would have been had the third respondent not disqualified the tenderers it did."

In my opinion, it is important to know whether a particular tenderer is a successful one or not, for the two cannot be tarred with the same brush. The essential difference between the two lies in the fact that, depending on the circumstances of the case, a Tender Board owes a successful tenderer a legal duty not to act negligently in the adjudication of the tender. As was, in my view, rightly stated in the dissenting judgment of LANGA, CJ and O'REGAN, J in the Steenkamp case:

"In our view, the notion that a successful tenderer should be entitled to recover for actual money spent in good faith by it in pursuance of contractual obligations is quite different to an unsuccessful tenderer being able to recover fully both profits it cannot realise as a result of an improper tender award. The former entitles an applicant to reimbursement for expenses it undertook for the benefit of the government. The latter does in a real sense constitute a 'windfall' claim, as the disappointed tenderer will not need to do anything other than litigate to put itself in the position it would have been if it had performed the contract."

(Steenkamp NO v Provincial Tender Board, Eastern Cape 2007(3) BCLR 300 (CC) at paras [84] and [89].

In the premises, I find that in casu the plaintiff is an unsuccessful tenderer who is not owed any legal duty by the third defendant or any of the defendants. Besides, an unsuccessful tenderer who considers the tender award to have been unlawful or improper (as in casu) always has a remedy of judicial review to set aside the tender and thereafter to reapply if the tender is advertised. In casu VAN DER MERWE, J reviewed the matter and ordered that it be remitted for reconsideration and the applicant (now plaintiff) was ordered to pay all costs. A successful tenderer, on the other hand, does not have this remedy and indeed is a bearer of obligations to comply with the contractual obligations it undertakes once the tender has been awarded. The plaintiff, in casu, is definitely not a bearer of such obligations.

Was there any waiver by the third defendant?

13.4 The next question to arise is whether, as alleged by the plaintiff, there was any waiver on the part of the third defendant.

At law the word "waiver" denotes the passing by or declining to take advantage of a legal right whereby such legal right becomes lost. (The South African Judicial Dictionary by J J L Sisson QC p851.) As was stated by DE VILLIERS, CJ in Stewart v Ryall 5 SC 153,

"A waiver of a condition precedent amounts to a renunciation of a right, and such a renunciation cannot be inferred except from clear evidence."

Also, as was pointed out by the court in Roodepoort-Maraisburg Town Council v Eastern Properties Ltd, 1933 WLD 226, waiver is a form of contract and it is necessary that there should be an intention to waive (Gompels v Skodawerke of Prague 1914 TPD 184.) Cf the dictum of DAVIS, AJA in Moyce v Estate Taylor 1948 3 SA 829 (AD), that election stands on the same footing as waiver. Waiver is never presumed [Stoltz v HO Kee 1974 3 SA 695 (A) 698. Lastly, the onus of proving waiver is strictly on the party alleging it [Ellis v Laubscher 1956 4 SA 692 (A) at 702.]

In the review judgment VAN DER MERWE, J also touched upon the alleged waiver by the third defendant in the following terms:

"As stated earlier, it was the third respondent's attitude that an error was made and that the applicant should not have been disqualified together with certain other tenderers. What is, however, clear is that apparently not a single tenderer complied with all the respects with what was required of them." (p10 lines 16 20)

The learned judge further stated:

"The third respondent states that the non disclosure of the facts to it caused the third respondent to commit a genuine error of fact in not disqualifying the fifth respondent (Muntu) as well as other tenderers who also did not comply with clause 3 of the conditions of the coal tender." (p10 lines 25-26 and p11 lines 1-3)

“In this respect applicant contends that the third respondent was fully aware of all the irregularities in awarding the tender to the fifth respondent and the other two tenderers and did not on its own re adjudicate the matter after it was brought to their attention. That, according to the applicant, amounts to unfair treatment and that shows bad faith on the part of the third respondent.

In the replying affidavit, the applicant's attorney launches an attack on the chairperson of the third respondent, sic Ms Ramapola. He says that there was no reason to believe that sic Ramapola was ignorant of the irregularities, but no evidence was placed before me to substantiate that perception.

In contrast sic Ramapola stated that the body or the secretariat who evaluated the tenders, did not inform the Board of the shortcomings. That was then the error of fact on the part of the third respondent and that was then the reason why the concession was made." (p13 lines 15-26 and p14 lines 1-4)

Regard being had to the principles enunciated in the foregoing case law as well as what was stated by VAN DER MERWE, J in the review application of the same parties, I find that the plaintiff's allegation that the Tender Board made an election and waived item 3 of the special conditions of the tender, cannot stand, more so that there was no intention to waive. Besides, for the plaintiff to state that the effect of the said waiver is that it (the plaintiff) would have emerged the successful tenderer in all regions is a far fetched non sequitur.

13.5 Having found that the plaintiff is an unsuccessful tenderer, much, perhaps, against the obiter dictum of MOSENEKE, DCJ that to differentiate between tenderers is "to allot different legal rights to parties to the same tender process" (see majority decision of the Constitutional Court in the Steenkamp appeal, supra, at par 54), it remains for me to determine whether the plaintiff is entitled to delictual damages or constitutional damages.

The question of delictual damages in circumstances such as those in casu has been settled by the Constitutional Court when it dismissed the Steenkamp appeal on the ground that one Balraz is owed no duty of care by the Tender Board of the Eastern Cape, The relevant facts are to be found in that case and need not be narrated here. Suffice it to say that the majority Court per MOSENEKE, DCJ at par 55 expressed agreement with several significant findings and conclusions of the Supreme Court of Appeal, in the same matter, on why a duty of care is not owed to Balraz and in particular that:

13.5.1 Compelling public considerations require that adjudicators of disputes, as of competing tenders, are immune from damages claims in respect of their incorrect or negligent but honest decisions. However, if an administrative or statutory decision is made in bad faith or under corrupt circumstances or completely outside the legitimate scope of the empowering provision, different public considerations may well apply. [See Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 1 SA 461 (SCA) at paras 13-14. Also, Minister of Safety and Security v Van Duivenboden 2002 6 SA 431 (SCA) at para 12.

13.5.2 Legislation governing the Tender Board in this case is primarily directed at ensuring a fair tendering process in the public interest. Where legislation has a manifest purpose to extend protection to individual members of the public or groups, different considerations may very well apply. Again whether or not delictual liability ought to attach even in that case will be dependent on the factual context and relevant policy considerations.

13.5.3 Imposing delictual liability on the negligent performance of functions of Tender Boards would open the prospect of potential claims of tenderers who had won initially. This will be to the detriment of the invaluable public role of Tender Boards. A potential delictual claim by every successful tenderer whose award is upset by a court order would cast a long shadow over the decisions of Tender Boards. Tender Boards would have to face review proceedings brought by aggrieved unsuccessful tenders. And should the tender be set aside it would then have to contend with the prospect of another bout of claims for damages by the initially successful tenderer. In my view this spiral of litigation is likely to delay, if not to weaken the effectiveness of or grind to a stop the tender process. That would be to the considerable detriment of the public at large. The resources of our state treasury, seen against the backdrop of vast public needs, are indeed meagre. The fiscus will ill afford to recompense by way of damages disappointed or initially successful tenderers and still remain with the need to procure the same goods or service.

The Court (at para 56) couched its conclusion in the following terms:

"In all the circumstances I am satisfied that in considering the tenders submitted by Balraz and others, the Tender Board did not owe Balraz a duty of care and therefore its conduct in avoiding the tender was not wrongful. I cannot find public policy considerations and values of our Constitution which justify adapting or extending the common law of delict to recognise a private law right of action to an initially successful tenderer who has incurred a financial loss on the strength of the award which is subsequently upset on review by a court order."

In the light of the foregoing findings, considerations and dictum of MOSENEKE, DCJ I conclude, without any further ado, that no delictual remedy exists for a party who is an unsuccessful tenderer, such as the plaintiff. Stated otherwise, no action for damages in delict is available to a tenderer against a Tender Board.

13.6 It was contended and submitted on behalf of the plaintiff by Mr Nowosenetz that the plaintiff has pleaded a cause of action independent of delict and does not rely on delict to sustain its particulars of claim. This obviously raises the question of constitutional damages. I may, at the outset, point out that other than the wording of paragraph 10.3 of the plaintiff's particulars of claim quoted in paragraph 10 supra, the statement of facts and conclusions of law supporting constitutional damages in the alternative are not obvious from the pleadings but are adumbrated in extenso in the plaintiff's heads of argument. Also, it would appear that the defendants' exception is solely aimed at the delictual action for damages. This is apparent from the tenor of the argument presented by Mr Maritz SC on behalf of the defendants. In my view, it all raises the question whether the exception should be dismissed simply for not addressing both delictual and constitutional claims. Phrased otherwise, should the plaintiff's papers stand in the absence of an exception dealing with constitutional damages? Frankly, I do not think so because there are other important considerations that come into play. These are given below.

13.6.1 Firstly, it should be borne in mind that the relevant service level contract which was tendered for came to an end on 31 0ctober 2005 and that the successful tenderer has, in all probability, fulfilled it and has been duly paid for providing the services which were tendered for.

13.6.2 Secondly, in the review application of the same parties which was heard by VAN DER MERWE, J the learned judge, apart from ordering that the matter be remitted for reconsideration by the Tender Board, declined to exercise his discretion of granting prayer 2 of the relevant notice of motion which had to do with substituting the Tender Board's decision or ordering the payment of compensation in terms of section 8(1)(c)(ii) of PAJA.

13.6.3 Thirdly, counsel for the plaintiff conceded, rightly in my view, that he was unable to find any reported decisions wherein a court has awarded constitutional damages. 0ne cannot think of any convincing reason for this state of affairs other than that up to now no plaintiff has been able to prove to the satisfaction of a court "the exceptional cases" referred to in section 8(1)(c)(ii) of PAJA.

13.6.4 Lastly and a fortiori, the plaintiff's claim in casu has been found to be a "windfall" one, a term coined by CAMERON, JA in 0litzki Property Holding v State Tender Board and Another 2001 3 SA 1247 (SCA) at para 41. In my considered opinion public policy and socio-economic considerations by far outweigh and militate against the granting of such claims. As ACKERMANN, J in Fose v Minister of Justice [1997] ZACC 6; 1997 3 SA 786 (CC); 1997 (7) BCLR 851 (CC) at para 72 succinctly put it:

"In a country where there is a great demand generally on scarce resources, where the government has various constitutionally prescribed commitments which have substantial economic implications and where there are 'multifarious demands on the public purse and the machinery of government that flow from the urgent need for economic and social reform', it seems to me to be inappropriate to use these scarce resources to pay punitive constitutional damages to plaintiffs who are already fully compensated …" (Footnotes omitted.) (My underlining for emphasis.)

Suffice it to say that in casu the plaintiff is not "already fully compensated" but is an unsuccessful tenderer ab initio.

I CONCLUSION

[14] In the light of the foregoing analysis and findings, I am constrained to arrive at the ineluctable conclusion that the plaintiff, in its papers, has not made out a cause of action which is sustainable at law. It follows that the exception raised by the defendants has to be upheld.

J THE ORDER AND COSTS

[15] In so far as costs are concerned, I take note of the fact that the majority of the judges of the Constitutional Court in the Steenkamp case decided not to make an order as to costs because, inter alia, the Court found no valid reason to mulct the applicant, in his representative capacity as the liquidator of Balraz, in costs. Besides, the applicant therein had raised matters of considerable public importance and had sought to vindicate a constitutional right to administrative justice and to have the common law developed to expand the reach of delictual liability related to government tenders. In my opinion, the plaintiff in casu is not in the same position as the applicant in that case. In the result, and for reasons already given, the following order is made:

15.1 the exception is upheld with costs; and

15.2 the plaintiff is ordered to pay the costs of suit, which shall include the costs consequent upon the employment of two counsel.

M N S SITHOLE

ACTING JUDGE OF THE HIGH COURT

7627-2006

Date heard: 2 June 2006

For the Plaintiff: Adv L. Nowosenetz

Instructed by: Mohlase Nonyane – Mahlase Att, Pretoria

For the Defendants: Adv. S. J. Maritz SC & Adv S. A. Nthai

Instructed by: The State Attorney, Pretoria