Open Edge Technologies SA (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others (53770/2015) [2015] ZAGPPHC 1087 (9 December 2015)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

DATE: 9/12/2015

CASE NO: 53770/2015

DATE OF HEARING:

NOT REPORTABLE

In the matter between:

OPEN EDGE TECHNOLOGI ES SA (PTY) LTD

Applicant

and

CITY OF TSHWANE METROPOLITAN MUNICIPALITY

First Respondent

THE MUNICIPAL MANAGER OF THE CITY OF

TSHWANE METROPOLITAN MUNICIPALITY MR

JASON NGOBENI

Second Respondent

THE CHIEF INFORMATION OFFICER OF THE

CITY OF TSHWANE METROPOLITAN MUNICIPALITY

Third respondent

VODACOM LTD

Fourth respondent

CITY POWER JOHANNESBURG (SOC) LTD

Fifth respondent

J U D G M E N T

NKOSI, AJ

INTRODUCTION

1. Applicant instituted motion proceedings against the First Respondent and second third fourth and fifth respondent divided into Part A and Part B. Part A was the urgent application where Applicant sought a relief to interdict and restraint First to Fourth Defendants from implementing, erecting, rendering or receiving a service and I or providing any goods in terms of the contract entered into between them on 2December 2010 or any ancillary relief or amended contract thereto pending the finalization of Part B of this application. Part A was struck off the roll for not being urgent, on 28 July 2015.

2. Part B of the application was a review and setting aside of the decision to award a contract to Vodacom, and to declare it invalid ab initio. It was the decision to award a contract to Vodacom, alternatively to procure the services of Vodacom, the Fourth respondent, "under" or through a contract between City Power, Fifth Respondent, which was the dispute currently in court.

3. Applicant's submissions were as follows

COMMON CAUSE FACTS

3.1. The City of Tshwane (hereinafter referred to as "the municipality") appointed the Fourth · respondent, Vodacom, as a service provider for 3G services. This appointment was done "under" or "through" another contract.

3.2. The other contract referred to above came as a result of a tender process embarked upon by City Power, the Fifth Respondent.

3.3. The appointment of Vodacom by the municipality took place on the 18th December 2014 by means of a letter from the City Manager's office.

3.4. It simply stated that -

"I have the pleasure to inform you that the City Manager on 18 December 2014 has approved through Regulation 32 of the Municipal Supply Chain Regulations, that Vodacom be appointed as a preferred service provider for 3G services in the city, over a three (3) year period, subject to the signing of a SLA with the relevant department prior to the commencement of your contract ...."

3.5. Applicant, when hearing of this appointment on approximately 6 January 2015 started making enquiries and submitted two applications for information in terms of the Promotion of Access to Information Act, 2 of 2000 (hereinafter referred to as "PAIA"). The one was submitted to the municipality and the other to City Power to obtain copies of the contracts entered into between City Power and MTN and Vodacom.

3.6. The municipality failed to provide the documentation and City Power only made available a blank tender document and an invitation to bid (advertisement).

3.7. Applicant thereupon appealed the aforegoing deemed refusal and decision not to make available the remainder of the documentation. The Appeal process ran its course and no decision was made within the required 30 days.

3.8. The Applicant thereafter launched an urgent proceeding urider case number 29379/2015 to obtain the relevant documentation, alternatively an interdict, pending obtaining the documentation.

3.9. The municipality sought an extension of the time period, which was granted as the current contract between Applicant and the municipality was extended for a further three month period.

3.10. Hereafter the municipality 1n its answering affidavit conceded that it was obliged to provide the relevant documentation. A court order to that effect had to be obtained at the hearing of the application in spite of the aforegoing. The documentation was eventually provided by the municipality on 11 June 2015.

3.11. Without an order, the First respondent, suddenly and whilst still opposing the relief sought under case number 29379/2015, provided the bulk of the documentation sought in terms of PAJA on 29 June 2015.

3.12. Applicant thereafter launched the review proceedings, together with the A part of the application on 10 July 2015 to be heard on 29 June 2015.

3.13. Answering affidavits had been filed by the municipality, as well as Vodacom. As already stated Vodacom is not opposing the relief sought and it is submitted that Vodacom's affidavit cannot and should not be filed in terms of the rules of court.

3.14. On 28 July 2015 the A Part of the application was struck, as already indicated hereinbefore

3.15. It is furthermore common cause that the municipality had previously embarked on tender processes to procure the services for the supply of fixed line internet as well as mobile (3G) services.

3.16. Applicant interdicted the execution of the one of such contracts under reference number CB 106/2012.

3.17. Subsequent thereto the municipality alleged to have cancelled the contract under that tender reference number, issued a new tender for the fixed line services and received a proposal from Vodacom to provide these services.

3.18. The proposal of Vodacom is attached to the founding papers and dated 9 December 2014, as Annexure "JB12".

3.19. The municipality obtained the permission of City Power, Johannesburg SOC, the Fifth Respondent, to procure "under" and "through" its contract on 3 December 2014.

3.20. The letter from City Power authorising such procurement specifically mentions that "City of Tshwane will have to come to an agreement with MTN Service Provider (Pty) Ltd and Vodacom (Pty) Ltd for the contract to materialise based on the same terms and conditions as appointed by City Power Johannesburg SOC Limited.

3.21. The appointment letter from the municipality, as already indicated, was dated 18 December 2014, after the executive acquisition committee of the municipality decided to contract with Vodacom in terms of the provisions of Regulation 32 of the Municipal Supply Chain Management Regulations, issued in terms of Section 112, as read with Section 68 of the Municipal Finance Management Act, Act 34 of 2005.

3.22. The municipality, subsequently on 2 February 2015 signed an agreement with Vodacom on the terms and conditions as proposed by Vodacom dated 9 December 2014.

3.23. The municipality subsequently hereto and having become aware of the fact that the contract does not contain the same terms and conditions as the agreement between Vodacom and MTN on the one hand and City Power on the other hand, changed the terms and conditions.

3.24. Vodacom has in the meantime given an undertaking and filed an affidavit that it will not utilise the equipment of the applicant in the execution of their contract and started rolling out the contract by the end of July 2015 to render the services to the municipality.

4. THE REQUIREMENT OF AN APPOINTMENT IN TERMS OF REGULATION 32

4.1. Regulation 32 reads as follows:

"(1) A supply chain management policy may allow the accountant of groups of services for the municipality or municipal entity under the contract secured by another organ of state, but only if -

(a) The contract has been secured by that organ of state by means of a

competitive bidding process applicable to that organ of state;

(b) The municipality or entity has no reason to believe that such contract was not validly procured;

(c) There are demonstrable discounts and benefits for the municipality or entity to do so; and

(d) That other organ of state and the provider have consented to such procurement in writing. ..."

4.2. As can be seen from what is stated above, there are certain jurisdictional thresholds that need to be crossed before the procurement under Regulation 32 may be utilised.

5. THE CONTRACT HAS BEEN SECURED BY MEANS OF A COMPETITIVE BIDDING PROCESS:

5.1. It is common cause that a competitive bidding process had been embarked upon by City Power in leading and up to the award of a contract to Vodacom and MTN. It is, however, not admitted by the

Applicant that the process was valid and the appointment of Vodacom and MTN was valid in terms of the contract.

5.2. The municipality or entity has no reason to believe that such contract was not validly procured. The municipality in the circumstances did not even enquire as to the validity of the procurement or whether the appointment was valid. It is simply sought from City Power authority to procure under the contract.

5.3. The aforegoing is borne out by the fact that the municipality did not even have a copy of the contract entered into between Vodacom and MTN on the one hand and City Power on the other, when receiving the proposal from Vodacom, when considering the proposal from Vodacom,

when deciding to procure through the between Vodacom and City Power and when signing the first agreement with Vodacom.

5.4. The municipality could not simply state that it has no duty to investigate as to the validity of that procurement process. It did not take any steps to do so and simply states that it had no reason to believe that it was not validly procured.

5.5. To follow the simple route of asking no questions and therefore can be told no lies, would not suffice in the circumstances.

6. THERE ARE DEMONSTRABLE DISCOUNTS OR BENEFITS FOR THE MUNICIPALITY OR ENTITY TO DO SO:

6.1 Clearly the municipality's officials tried to persuade the Executive Acquisition Committee and the Municipal Manager to believe that there are demonstrable discounts. This is however far from the truth if regard is had to the proposed discounts where it has not even been compared with the pricing of the Applicant. Apart from the aforegoing, the demonstrable discounts are not vis-a­ vis the process of the Applicant and the prices of the Applicant, but demonstrable discounts in going out on a tender process, ie. it must be cheaper to procure under the current contract between Vodacom and City Power than what would be obtained during an open, competitive and transparent tender process. The alternative is the other benefits to the . municipality to have done so.

6.2 This has not been indicated by the municipality in the Answering Affidavit nor in any of the documentation that was before the executive acquisition committee or the Municipal Manager.

7. THE ORGAN OF STATE AND THE PROVIDER HAVE CONSENTED IN WRITING TO THE PROCUREMENT

7.1 City power specifically limited their undertaking to their permission to what is stated in the letter of 3 December 2014. It specifically indicated that the agreement that needed to have been entered into should be between MTN Service Provider (Pty) Limited and Vodacom (Pty) Limited on the one hand and that if forewarned the municipality

that it had, in terms of the same terms and conditions as appointed by City Power SOC Limited. If the contracts are compared, it is abundantly clear that even the stage of proposing to the Executive Acquisition Committee the appointment of Vodacom, it had never provided for the appointment of MTN. the permission was however, so it is submitted. Limited specifically to appointing both MTN and Vodacom. Secondly, it was forewarned that the contract must be on the same terms and conditions.

7.2 The appointment of Vodacom on 18 December 2014 is specifically in terms of the proposal of 9 December 2014, provided for the provision of "VPN national connection" at a rate of R62 767.58 at Centurion and a similar amount at Sammy Marks. These were never required by the City Power. As a matter of fact it is a much wider and higher rated service than that supplied by City Power. The reason therefore for being VPN delegated internet Breakout priced at R62 118.02 was made on the solution name of 40 megabytes per second (MBPS). That provided to City Power was 2 MBPS.

7.3 Apart from the aforegoing, the proposal made provision in paragraph 1.6 thereof that a channel partner would be appointed with the following services. The services listed, inter alia, project management, sim card replacement, etc in an amount of R4 212 300.00 as a once off payment and a recurring payment of R809

400.00 per month. No appointment had been made of any channel partner in the appointment between City Power and Vodacom.

7.4 These are payments that were to have been made in excess of what was paid to Vodacom.

7.5 The municipality specifically states that it did not realise that the aforegoing was there, and changed the contract thereafter. However, such answer does not suffice in circumstances where the terms and conditions of the contract are not identical. When procuring "under" or "through" a contract which is required by the terms of section 112 Municipal Finance Management Act, it has to be identical, so it is submitted.

7.6 When procuring under a contract it simply means that in terms of that very same contract, goods or services are also provided to the other entity. A new contract is not envisaged.

7.7 Be that as it may the municipality subsequently changed the terms of the alleged appointment without being authorised thereto by the Acquisition Committee or the Municipal Manager.

7.8 That, so it is submitted, does not help the municipality in its plight to save the appointment and contract with Vodacom to be declared invalid.

7.9 It furthermore needs to be pointed out that in the proposal from the relevant department headed by the Third Respondent to the Executive Acquisition Committee and the Municipal Manager; it stated that the savings would even be greater than those which are afforded to City Power. That is similarly contradictory to the requirements of procuring "under" or "through" a contract. It is impossible to simply state that the same services are delivered., that the tariffs differ, that the type of product delivered differs in so far as it entails different specifications of the service, for instance 40 MBPS lines instead of 2 MBPS lines which is more than R50 000.00 more expensive per month.

7.10 Apart from the aforegoing, further savings which will be built in over and above that which was afforded to City Power.

7.11 It needs furthermore to be pointed out that the aforesaid deficiencies and discrepancies do not authorise the municipality to enter into a new contract with a service provider after simply having been authorised to do so by the other entity.

7.12 In terms of the provisions of Section 112 of the Municipal Finance Management Act provides therefore that a municipality must comply with a prescribed regulatory framework for the municipal supply management which must at least cover "the procurement of goods and services by municipalities or municipal entities" through contracts procured by other organs of state.

7.13 It is submitted that procuring "through" a contract simply means that procurement is to take place in terms of that specific contract that has already been concluded. The contract cannot be for a longer period, it cannot enter into a new contract, but the services to be provided and specifications thereof should be identical.

7.14 In that respect the appointment of Vodacom simply did not meet the requirements as set out in Regulation 32 as read with Section 112(0) of the Municipal Finance Management Act, Act 56 of 2003.

8 CONCLUSION

8.1 As a result of the aforegoing it is abundantly clear that the Applicant is entitled to an order in terms of Part B of the Notice of Motion.

8.2 The contract between Vodacom and the municipality was void ab initio. The process was not properly followed and the court, so it is submitted, has no alternative but to set aside the procurement and declare the contract as void. See Joubert Galpin Searle v The Road Accident Fund, 2014(4) SA 148 (ECP) at paragraph 68.

8.3 In the matter of Joubert Galpin & Searle, Mr Justice Plascard referred in paragraph 68 to the Telkom matter as follows:

"In deciding this issue, Southwood J's starting point was for inter-related propositions. They are that:

(a) The decision to award a tender is an administrative action and the

PAJA therefor applies;

(b) Generally speaking, once a contract has been entered into following the award of a tender, the law of contracts apply;

(c) That a contract entered contrary to prescribed tender procedures is invalid; and

(d) Consequently, even if a contract is entered into, all steps taken in accordance with the process which does not comply with the prescribed tender process are also invalid. "

8.4 See Telkom, supra, [paragraph 12 and the authorities cited therein.

8.5 As a result of the aforegoing and the abuse of the tender process where the municipality, inter alia, did not procure through the contract between Vodacom and City Power, did not even have a copy of the contract entered into between City Power and Vodacom, accepted a proposal by Vodacom which is contrary to the provisions of the contract entered into between Vodacom and City Power and still persisted in rolling out the tender in spite of warnings not to as to the validity of the matter.

9.

9.1 The First to Third Respondents were duly represented by Adv Tsatsawane. The fourth Respondent filed an affidavit only without being represented in court. The content of its affidavit

basically opposes the Applicant's averments.

9.2 The relief which was sought by the Applicant was opposed by the City on the ground that the Applicant has not made out a case for the relief it seeks in that it has not established that the city did not fully comply with the requirements of clause 16 of the City's supply chain management policy.

10 THE APPLICANT'S CASE FOR REVIEW

10.1 The applicant's case is based on an allegation that the City's procurement of goods and services from Vodacom under a contract concluded between Vodacom and City Power is unlawful. There is no merit in this allegation.

10.2 The applicant contends that the City did not comply with Clause 16 of the policy read with Regulation 32 in that:

10.2.1 there are no demonstrable discounts or benefits which the City stands to derive from the procurement in that Vodacom's rates are higher than those charged by the applicant;

10.2.2 the City did not obtain the written consent of MTN;

10.2.3 the City did not embark on a public competitive tender process;

10.2.4 the City's conduct amounts to a deviation from the normal prescribed process and that the City did not follow the correct deviation procedure provided for in Regulation 36.

10.3 It was submitted that there is no merit in the applicant's case for the following reasons:

10.3.1 the City has demonstrated that there are demonstrable discounts or benefits in procuring from Vodacom in the manner in which it did;

10.3.2 the City was not obliged to obtain the consent of MTN due to the fact that it is procuring the relevant goods and services under a contract between City Power and Vodacom and that MTN is not a party to such contract;

10.3.3 the City did not have to embark on another public competitive tender process for purposes of clause 16 of the policy (because clause 16 of the policy does not require it to do so);

10.3.4 the procurement of goods and services in terms of clause 16 of the policy does not amount to a deviation from the procurement process - it is one of the procedures which the City is in law entitled to invoke.

10.4 In order to succeed it was submitted that the applicant must establish that the clause 16 procurement in issue is unlawful and that its right in relation to that procurement process will be infringed if the relief sought is not granted. The applicant has not made out such a case. The applicant was not even a participant in the clause 16 procurement process and has no rights to protect in relation thereto.

11 THE BASIS OF OPPOSITION

11.1 The procurement in issue was made in terms of clause 16 of the policy read with Regulation 32.

11.2 Clause 16 of the policy provides that:

"16. PROCUREMENT OF GOODS AND

SERVICES UNDER CONTRACTS SECURED BY OTHER ORGANS OF STATE

16.1 The municipality may procure goods or services under a contract secured by another organ of state, but onlv if:

(a) the has been secured by that organ of state by means of a

(b) there is no reason to believe that such a contract was not validly procured

(c) there are demonstrable discounts or benefits in doing so; and

(d) that other organ of state and the provider have consented to such procurement in writing"

11.3 For purposes of clause 16 of the policy, the Coty is not obliged to proceed in terms of a competitive bidding process. Clause 16 was designed to enable the City to procure goods and services other than in terms of a competitive bidding process.

The applicant has no interest in the Vodacom procurement

11.4 The applicant was not a participant in the clause 16 procurement process. It has no interest in that process and it is on law not entitled to review a decision which does not adversely affect its rights. It does not have the necessary standing to do so.

11.5 The applicant was the incumbent service provider when it launched the present application. The relief which it failed to obtain in Part A of this application was intended to entrench its position as the incumbent service provider even though its then contract was not lawfully extended. It sought to create a position to procure services from it - failing which the City's ability to provide certain services to its residents would have been compromised.

11.6 The nature of the Clause 16 procurement process is such that there is no involvement of third parties. The role players are the organs of state involved and the service provider appointed by the one participating organ of state. Competitors are not in any way involved in that process - even those that were . successful in the initial or original procurement process and not involved in that process and they do not have the necessary standing to challenge the validity of the process. The applicant is a complete stranger to the process in issue.

11.7 The applicant's relevant contract with the City came to an end by the effluxion of time - not by the decision which is sought to be reviewed and set aside. Accordingly, the decision which is sough to be reviewed and set aside did not adversely affect the applicant's right and did not have a direct and immediate impact upon the applicant. The applicant no doubt continues to render services to the City in terms of its other existing and continuing contract.

11.8 In order to be entitled to seek the relief which it seeks in this application, the applicant has to establish that the City's decision to procure from Vodacom adversely, directly and immediate affected its right and that it has the necessary standing to seek such relief. The applicant has failed to establish this. This trite

position was restated by the Surplreme Court of Appeal in Oudekraal Estates (Ptvl Ltd v City of Cape Town 2004 (6) SA 222 (SCA) in the following terms:

"The truth of the matter is that the Court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. The order may be hypothetically a nullity, but the court may refuse to quash it because of the plaintiff's lack of standing . . ."

11.9 In its founding affidavit, the applicant says that the City's decision is reviewable in terms of PAJA Whilst it is correct that the administrative action is reviewable under PAJA, the applicant does not have an interest in the present decision and it is for this reason not entitled to relief under PAJA due to the fact that none of its rights are implicated.

11.10 The definition of administrative action in section 1 of PAJA contemplates that that such action "adversely affects the rights of any person and ... has a direct, external legal effect." The City's decision does not adversely affect the applicant's rights. In Grey's Marine Hout Bay (Pty)Ltd v Minister of Public Works [2005] ZASCA 43; 2005 (6) SA 313 (SCA) it was held that administrative action must indeed "adversely affects the rights of any person" and must have "a direct, external legal effect" and that it is an action which "impacts directly and immediately on individuals."

11.11 The decision sought to be reviewed and set aside was taken in December 2014. The applicant has not demonstrated how the decision has adversely affected its rights. the position would have been different if the decision resulted in the termination of the applicant's contract or the like. This is not so. The applicant's contract came to an end by the effluxion of time after it had been extended many times (even after the decision sought to be reviewed and set aside had been taken). Similarly, the appointment of Vodacom and the rendering of services by Vodacom to the City has not had any adverse effect on any of the applicant's rights so as to clothe it with the necessary standing to bring this application.

11.12 In Giant Concerts CC v Rinaldo Investments (Pty) Ltd 2013 (3) BCLR 251 (CC) the Constitutional Court confirmed that Greys Marine Hout Bay was correctly decided and held that:

"[30] The Supreme Court of Appeal has rightly suggested that "adversely affects" in the definition of administrative action was probably intended to convey that administrative action is action that has the capacity to affect legal rights, and that impacts directly on individuals. The effect of this is that Giant, as an own

interest litigant, had to show that the decisions it seeks to attack had the capacity to affect its own legal rights or its interests.

[31] In seeking to assert this right, Giant has never claimed to be acting on behalf of someone else who was incapacitated, or as a member of, or in the interest of, a group or class of persons, or in the public interest, or in the interest of a member of an association. The sole interest it claims to assert is its own which during argument its counsel described as commercial. It is that interest we must examine to see whether it affords Giant title to challenge the transaction.

[32] And in determining Giant's standing, we must assume that its complaints about the lawfulness of the transaction are correct. This is because in determining a litigant's standing a court must, as a matter of logic, assume that the challenge the litigant seeks to bring its justified . ...(which I agree with)

[33] The separation of the merits from the question of standing has two implications for the own-interest litigant. First, it signals that the nature of the interest that confers standing on the own-interest litigant is insulated from the merits of the challenge he or she seeks to bring. An own-interest litigant does not acquire standing from the invalidity of the challenged decision or law, but from the effect it will have on his or her interest or potential interests. He or she has the standing to bring the challenge even if the decision or the law is in fact valid. But the interests that confer standing to bring the challenge, and the impact the decision or law has on them, must be demonstrated.

[34] Second, it means that an own-interest litigant may be denied standing even though the result could be that an unlawful decision stands. This is not illogical. As the Supreme Court of Appeal points out, standing determines solely whether this particular litigant is entitled to mount the challenge: a successful challenge to a public decision can be brought only if 'the right remedy is sought by the right person in the right proceedings." To this observation one must add that the interest of justice under the Constitution may require courts to be hesitant to dispose of cases on standing alone where broader concerns of accountability and responsiveness may require investigation and determination of the merits. By corollary, there mat be cases where the interest of justice or the public interest might compel a court to scrutinise action even if the applicant's standing is questionable. When the public interest cries out for relief, an applicant should not fail merely for acting in his or her own interest.

[35] Hence, where a litigant acts solely in his or her own interest, there is no broad or unqualified capacity to litigate against illegalities. Something more must be shown.

[43] The own-interest litigant must therefore demonstrate that his or her interest or potential interests are directly affected by the unlawfulness sought to be impugned.

[57] Section 217 of the Constitution, on which Giant relied, does not give stronger warrant to its claim. This is because Giant never gave substance to its complaint that the process should have involved competitive tendering be even minimally showing in the review proceedings that it had the capacity to make a competitive alternative proposal. Ultimately this is why ·it should be denied standing."

11.13 As stated above, the applicant was not involved in the procurement process in issue and could not have been involved. In addition, the applicant has not established that any of his rights have been adversely affected or that they are going to be affected in future. Of importance, if the relief which the applicant seeks is granted, the City will have to reconsider that matter - without the applicant in any way being involved in that process This being the case, the relief which the applicant seeks, if it is granted, would be of no consequence to it in that it would not in any way give any protection to its rights.

11.14 In the circumstances, the application ought to be dismissed on the ground that the applicant does not have the necessary locus standi.

THE REQUIREMENTS OF THE CLAUSE 16 PROCUREMENT PROCESS

11.15 When the Municipality procures goods and services in terms of clause 16 of the policy, it is required to satisfy the following conditions:

11.15.1 the contract under which the goods and services are procured must have been secured through a competitive bidding process applicable to the organ of state;

11.15.2 the Municipality must not have reason to believe that such a contract was not validly procured;

11.15.3 there are demonstrable discounts or benefits for the first respondent to procure in that manner, i.e. under a contract secured by another organ of state;

11.15.4 the other organ of state (which secured the contract) and the service provider must have consented to such procurement in writing.

11.16 All of the above conditions have been fulfilled. In order to obtain relief which it seeks, the applicant must demonstrate, by way of admissible evidence, that the above conditions have been fulfilled. Without such demonstration, the applicant ought not to be granted the relief which it seeks.

11.17 Insofar as the applicant's challenge is concerned:

11.17.1 MTN's written consent is not required due to the fact that it is not a party to the contract between Vodacom and City Power. The fact that City Power concluded two separate contracts with both MTN and Vodacom is no longer disputed by the applicant. The fact that such contracts were concluded pursuant to one tender process does not impose an obligation upon the City to obtain the consent of MTN. the fact remains that it is under the Vodacom and City Power contract that the City is procuring from Vodacom.

11.17.2 The adoption of the procurement process provided for in clause 16 of the policy dispenses the requirement to embark on a public competitive tender process. It is for this reason that the City did not embark on such a process and it was in law not required to embark on such a process because City Power has already done so.

11.17.3 For purposes of clause 16 of the policy, all that is required is for the Municipality to meet the requirements prescribed thereunder. There are no additional requirements - and there is no basis upon which the applicant herein can add other requirements in addition to those prescribed under clause 16 of the policy.

11.17.4 Insofar as the applicant does not challenge the validity of clause 16 of the policy, it cannot complain when such clause is invoked by the City unless it is able to demonstrate that the four requirement prescribed thereunder were not complied with - something which it has failed to do.

11.17.5 In paragraph 36 of its replying affidavit, the applicant correctly concedes that its attack "was never that the City Power contracts or bid was not validly procured." This being the position, there is no further basis upon which the applicant could contest the validity of the City's reliance on clause 16 of the policy.

1i.17.6 The Municipality is satisfied that there are demonstrable discounts and benefits from the contract between Vodacom and City Power. The applicant has not placed any admissible evidence before the Court to show that there are no demonstrable discounts and benefits from the contract between Vodacom and City Power.

11.17.7 The contents of Annexure AA5 to the City's answering affidavit and annexures thereto show that the City is not receiving any benefits from the applicant and that the Municipality is much better-off procuring the services in issue from Vodacom.

THE SUBMISSION THAT THERE ARE NO GROUNDS FOR REVIEW

11.18 In paragraph 40 of its founding affidavit, the applicant has listed what it says are the ground for review. There is no merit in what the applicant says are its grounds for review.

11.19 The question whether the decision sought to be reviewed and set aside is reviewable must be answered with reference to the requirements for such decision prescribed in clause 16 of the policy.

11.20 The evidence before the Court shows that the City has fully complied with the requirements prescribed in clause 16 of the policy. In addition, the evidence before the Court shows that the City is getting a better deal from Vodacom as compared to what it was getting from the applicant. No evidence has been placed before the Court to suggest that a better deal ncould have been obtained from another service provider - even if it is not the applicant.

11.21 In its grounds for review, the applicant has simply reproduced the contents of section 6 of PAJA and listed the grounds provided for therein without producing factual evidence to substantiate its contentions. Without evidence to substantiate its purported grounds of review, the application cannot succeed and should be dismissed with costs including the costs occasioned by the employment of two counsel.

11.22 It was further submitted by way of an example that no case has been made by the applicant in respect of the following grounds of review relied upon:

11.22.1 Procedural fairness - no case has been made as to what procedure the City failed to follow on the basis of which it is now contended that the decision in issue was arrived at "in an procedural unfair manner". For this ground to succeed, the applicant must first state the prescribed procedure which the City was supposed to follow and show that such procedure was not followed. The applicant has not mad out such a case;

11.22.2 There is no evidence of errors of law which influenced the taking of the decision in issue. There is no other law involved which the City did not apply correctly

in arriving at the decision in issue. This being the case, it cannot be said that the decision was influenced by an error of law;

11.22.3 There is no evidence of the errors of fact which influenced the taking of the decision in issue. On the factual evidence before the Court, there are no errors of fact which influenced the decision - all the factual issues upon which the applicant relies in its founding affidavit have been shown to be incorrect;

11.22.4 There is no evidence to substantiate any of what is alleged in paragraphs 40.1.4.4 and 40.1.4.5 of the founding affidavit.

11.23 The fallacy of the applicant's ground of review lies in the fact that the applicant has relied on every possible ground of review provided for in section 6 of PAJA without any evidence to substantiate such grounds. The reliance upon every possible ground for review provided for in section 16 of PAJA is an indication that the application has no merit.

11.24 The applicant seeks to make out a new case in its head of argument. This is not permitted.

11.24.1 In paragraph 5.1 of its head of argument, the applicant tries to question the validity of the procurement process conducted by City Power pursuant to which Vodacom was appointed. This is contrary to what is said in its affidavits filed on record. In paragraph 36 of its replying affidavit, the applicant clarified its position as follows:

"The Applicant's attack was never that the City Power contracts or bid was not validly procured."

11.24.2 In the light of the contents of paragraph 36 of its replying affidavit, the applicant cannot contest the validity of the City Power and Vodacom procurement process.

11.24.3 The City did not have to enquire into the validity of the City Power procurement process so as to decide on the validity or lawfulness of such process. Only a Court can conduct such an inquiry. All that the City was required to do was not to have a reason that the City Power procurement process was not valid. The applicant has not made out a case to show that the facts before the City, it ought to have had a reason to believe that the procurement process was invalid. The applicant cannot say so because it does not have evidence to substantiate that.

11.24.4 In addition to the above, the applicant cannot now in its head of argument seek to make out a new case that the City did not take any steps to investigate the validity of the City Power procurement process. The City was never called upon to state or to justify the steps taken by it before arriving at the conclusion that there was no reason to believe that the City Power process was not valid. The City would have done so if it had been called upon to do so - and cannot be expected to deal with such a factual issue in its counsel's head of argument.

11.24.5 As far as demonstrable benefits are concerned, the applicant has not placed any evidence before the Court to suggest that a better deal would have been obtained had the City not contracted with Vodacom in terms of clause 26 of the policy. The City is satisfied that there are benefits and it has demonstrated that to be the position in its answering affidavit. This being the case, the applicant is clearly not in a position to assist the Court in arriving at a different conclusion on this issue since it has not produced any evidence to assist the Court in that enquiry.

11.24.6 The suggestion that the phrase "under a contract secured by another organ of state" means that the same quantity of services at the same rate must be procured is incorrect. Organs of state do not have the exact same needs and do not require the same quantity of services. In this case, City Power clearly does not require the same amount of 3G cards as the City needs. For this reason, the City cannot procure only that exact number of 3G cards which the City Power procured from Vodacom because they may be more or they may be less.

11.24.7 A case is made in the City's answering affidavit that no payment of R4.2 million was made by it to Vodacom, nor was such payment ever required by Vodacom. Furthermore, there is no need for a channel partner in the relevant and applicable terms and conditions.

11.25 The applicant does not seek an order that the contract concluded between the City and Vodacom should be set aside nor has it given an indication that it would require an opportunity to supplement its papers to make out such. a case. In the circumstances, the dismissal of the application would bring the whole matter to an end.

11.26 For the reasons stated above the respondents submitted that the application should be dismissed with costs including the costs occasioned by the employment of two counsel.

CONSIDERATION OF ALL SUBMISSIONS

12.1 Having considered both submissions by the applicant and respondents I could not be persuaded that much on Applicant's arguments and the quoted

case law could not support its intended relief. The Applicant's submission is found to lack the merit to justify its claim and therefore not accepted.

12.2 The Court agrees with the Respondents submissions on a balance of probabilities more especially that there was no proven acts of ma/a fides and/or any violation of the Applicant's rights in the procurement process. This was supported by the view that applicant did not take part to that process and that it could demonstrate as to how its non-participation to the procurement process could give a rise to the challenge it made. Respondents' submissions are therefore accepted as supported by the quoted case law.

Consequent upon the above the court orders as follows:

13. Applicant's case is dismissed with costs, including costs occasioned by employment of two counsel.

____________________

VPSN NKOSI, AJ

ACTING JUDGE OF THE HIGH COURT

NORTH GAUTENG HIGH COURT

PRETORIA

Representation for the Applicant:

Counsel: Adv M. Snyman

Instructed by

Representation for Respondents:

Counsel: Adv Tsatsawane

Instructed by: