South African Post Office v De Lacy and Another (19/08) [2009] ZASCA 45; 2009 (5) SA 255 (SCA) ; [2009] 3 All SA 437 (SCA) (13 May 2009)

South African Post Office v De Lacy and Another (19/08) [2009] ZASCA 45; 2009 (5) SA 255 (SCA) ; [2009] 3 All SA 437 (SCA) (13 May 2009)

The Supreme Court of Appeal found that the respondents failed to discharge the onus of proving that the award of the contract to Kumo was brought about by dishonesty or fraud on the part of SAPO officials. The evidence did not support allegations of bribery, manipulation, or conspiracy. The evaluation committee and tender board acted in good faith, and their decision to prefer Kumo's technology over Cornastone, despite the latter's higher BEE score, was rational and justifiable. Mere irregularities, incompetence, or negligence do not suffice to found a claim for damages in the absence of dishonesty. The claim for unjust enrichment also failed, as SAPO did not appropriate Cornastone's...

Citation
[2009] ZASCA 45
Parties
Appellant: South African Post Office; Respondent: Brian Patrick De Lacy; Respondent: Barry Jack Beadon
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
13 May 2009
Case Number
19/08
Procedural Posture
Civil Appeal / Appeal From High Court Pretoria
Outcome
Appeal upheld; cross-appeal dismissed. All claims by respondents dismissed with costs, including costs of two counsel.
Judges
Farlam, Navsa, Nugent, Van Heerden, Mlambo
Legal Topics
Public Tender Process, Delictual Liability, Dishonesty in Procurement, Unjust Enrichment, Black Economic Empowerment, Evaluation of Tenders
Commercial and Corporate Civil Procedure Delict Public Tender Process Delictual Liability Dishonesty in Procurement Unjust Enrichment Black Economic Empowerment +1 more

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Parties

South African Post Office

Appellant

Brian Patrick De Lacy

Respondent

Barry Jack Beadon

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Pretoria

Legal Issues

  1. 1 Whether the facts establish dishonesty or fraud in the award of the public tender.
  2. 2 Whether an unsuccessful tenderer may claim damages for loss of profit due to alleged irregularities in the tender process.
  3. 3 Whether SAPO was unjustly enriched by alleged appropriation of Cornastone's technology.

Ratio Decidendi

The Supreme Court of Appeal found that the respondents failed to discharge the onus of proving that the award of the contract to Kumo was brought about by dishonesty or fraud on the part of SAPO officials. The evidence did not support allegations of bribery, manipulation, or conspiracy. The evaluation committee and tender board acted in good faith, and their decision to prefer Kumo's technology over Cornastone, despite the latter's higher BEE score, was rational and justifiable. Mere irregularities, incompetence, or negligence do not suffice to found a claim for damages in the absence of dishonesty. The claim for unjust enrichment also failed, as SAPO did not appropriate Cornastone's...

Court Disposition

Appeal upheld; cross-appeal dismissed. All claims by respondents dismissed with costs, including costs of two counsel.

Orders

  • The appeal is upheld and the cross appeal is dismissed, in each case with costs, including costs occasioned by the employment of two counsel.
  • Costs associated with preparation and submission of original heads of argument by appellants, and costs for receipt and perusal of respondents' reply heads, are disallowed.