Tainama Civils (Pty) Ltd v Makana Local Municipality and Another (362/2019) [2021] ZAECGHC 10 (28 January 2021)

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE PROVINCIAL DIVISION: GRAHAMSTOWN)

CASE NO: 362/2019

In the matter between

TAINAMA CIVILS (Pty) LTD

Applicant

AND

MAKANA LOCAL MUNICIPALITY

First Respondent

IMVUSA TRADING 595CC Second Respondent

JUDGEMENT

Maswazi AJ

Introduction

[1] The applicant seeks review of the decision of the first respondent to award a tender to the second respondent and the substitution thereof of the second respondent for the applicant in terms of section 8 of the Promotion of Administrative Justice Act, 2000 (PAJA). For obvious reasons the substitution relief, that is, the award of the tender to the applicant by this Court can only follow if the decision to award the tender to the second respondent is found to be liable to review

and is in fact reviewed. The applicant further seeks condonation for non-compliance with section 7 of PAJA in the form of the failure to exhaust internal remedies.

[2] No other parties and/or tenderers were in fact cited in these proceedings nor did any participate by seeking joinder to enter the fray, it is only the decision maker being the Municipality and the second respondent, the tender awardee that were cited and did in fact participate in this review application.

[3] The applicant has framed the relief it seeks thus in its notice of motion;

“1 The First Respondent’s decision to award Tender No. MLM/2019-20/INFRA/007: Replacement of Aging Asbestos Pipes in Makhanda-Phase 2 (the bid/the contract/ tender) to the Second Respondent is reviewed and set aside, alternatively’, is declared to be unlawful and is set aside;

2. In terms of section 8 of the Promotion of the Administrative Justice

Act 3 of 2000 (PAJA), the First Respondent is ordered to conclude an agreement with the applicant for the construction of the work to be performed and related to the bid mentioned in paragraph 1 above.

3 ………………………………….”

[4] The matter is opposed by both the first and second respondents who have filed all the requisite papers in execution of their opposition. That the review itself is one sought in terms of PAJA is not contested at all. In other words, there is no suggestion by any of the respondents that the decision to award a tender is not reviewable in terms of PAJA. This must be the reason why there is talk of internal remedies in terms of section 7(2) of PAJA. Interestingly, whilst in its notice of motion, the applicant seeks condonation for its failure to exhaust internal remedies, this issue has not been addressed at all in its founding affidavit.

[5] The second respondent has raised a point in limine impugning the authority of the deponent to the applicant’s founding affidavit to “institute the application and prosecute it to finality”. Whilst the second respondent did not press hard for the issue, I deem it necessary to get it out of the way instantly.

[6] When the law ascribes juristic personality to an entity, it accords authority and locus standi to such an entity to institute legal proceedings in its own name. In motion proceedings, and for practical purpose since a company cannot set in motion the requisite actions necessary to initiate such proceedings it is necessary that the company must authorise a person who shall depose to the founding affidavit and attest himself to be the natural person behind the launch of the proceedings. It is often sufficient for such a person to state that he is duly authorised to initiate or launch the proceedings on behalf of the company.

[7] That is the reason the applicable judicial precedent is to the effect that any qualm about the possible lack of authority of a natural person who represents a juristic person in legal proceedings must be dealt with in terms of rule 7(1) of the Uniform rules, failing which such a point may not be considered a material grievance at all in such proceedings.[1] The second respondent’s point in limine accordingly lacks substance. The SCA in the Ganes[2] case clarified this point by holding that it is not the authority of the deponent to depose to an affidavit that is contestable since a witness needs no authority to testify in court proceedings, it is rather the authority of the natural person to represent the company in such proceedings that is. It has accordingly been held that once the deponent attests to his authority to institute proceedings on behalf of the juristic person in his affidavit, any contestation thereof must take the form of rule 7(1) notice of the Uniform rules. The second respondent has not resorted to this requisite method of raising the nature of the objection he purports to raise. It must follow then that its objection is not valid in law.

The factual matrix

[8] On the 8th of November 2019, the first respondent advertised a tender for the replacement of ageing asbestos pipes in Makhanda. The clarification

meeting, which was compulsory was to take place on the 14th of November 2019, whilst the closing date for the submission of the tenders was the 25th of November 2019. Prior to that an entity by the name of Koen Consulting had been appointed as consulting engineers in respect of the procurement process, among other things.

[9] The applicant and second respondent were two in a total of ten companies that submitted their bids as an indication of their interests to undertake the work and demonstration of their capacity.

[10] The bid was evaluated by the Bid Evaluation Committee (BEC) of the first respondent at its meeting of the 26th of November 2019 and it made its recommendations to the Bid Adjudication Committee (BAC) recommending the second respondent as

the preferred bidder. There is a dispute in the papers as to whether the meeting of the BEC took place at an appropriate time. I shall deal with this dispute in due course since it lies at the core of one of the applicant’s grounds of review.

[11] The BAC meeting took place on the 6th of December 2019 and it confirmed the recommendations of the BEC and thus likewise preferred the second respondent as the winning bidder.

[12] By letter dated 13th December 2019, the applicant was advised by the first respondent that its bid was not successful on the basis that applicant did not score the highest points. Applicant was further advised through the same letter that if aggrieved by the decision of first respondent, it may lodge a written objection or complaint within fourteen days from the date of receipt of the letter.

[13] On the 18th of December 2019, applicant filed an internal objection as contemplated in the letter of rejection of its bid. It seems the objection was dismissed on the 5th of February 2020 and on the 14th of February 2020, the applicant launched the present proceedings.

[14] On the 9th of March 2020, after filing notice of opposition, the first respondent filed the rule 53(1)(b) record which comprised only

the bid documents in respect of both applicant and second respondent but not the documents material to the procurement process such the reports of the bid committees. It appears that applicant already had such information when it launched the present proceedings.

[15] It is necessary to deal with the issue ventilated to some extent in first respondent’s answering affidavit, namely, the failure of the applicant to exhaust internal remedies. This is because I lack jurisdiction to entertain the review if internal remedies have not been exhausted.[3] I must therefore decide this issue, as a precursor to entering the merits of the matter.

Failure to exhaust internal remedies.

[16] For the first time in its heads of argument, the first respondent raised the issue of the failure of the applicant to exhaust internal remedies. I must say that this issue was not ventilated at length during the hearing, I deal with it only to the extent it is a jurisdictional precursor towards the determination of the merits.

[17] The first respondent raises its objection based on the failure of the applicant to exhaust internal remedies as follows in its heads of argument;

“The applicant seeks condonation for its non-compliance with its failure to exhaust internal remedies on the alleged basis that it is in the interest of justice. The applicant has failed to, it is submitted, make out a case for this Honourable Court to exempt the applicant from such compliance.”

[18] The first respondent then goes on to reproduce the provisions of section 7(2) of PAJA. Conspicuous by its absence is even something as vague as factual reference to the existence of these internal remedies upon which the second respondent pins its objection to the applicant’s case.

[19] It follows from the provisions of PAJA particularly section 7(2) that the duty to exhaust internal remedies whilst arising from PAJA, the actual internal remedies may be located in some other statute or another regulatory instrument. This therefore requires that the person who raises an objection based on the failure of another party to exhaust internal remedies must demonstrate that such internal remedies in fact do exist.[4] It is no use to require a party to exhaust internal remedies which do not exist.

[20] Prior to the decision of the SCA in DDP Valuers v Madibeng Local Municipality[5], it was often thought that regulation 50 of the Municipal Procurement Regulations constitute the internal remedies contemplated in section 7(2) of PAJA. However, the SCA laid any possible confusion regarding this regulation to rest by holding that regulation 50 of the Municipal Procurement Regulations does not constitute internal remedy as contemplated in section 7(2) of PAJA.

[21] The relief sought by the applicant for the condonation for failure to exhaust internal remedies can only be granted if there are internal remedies factually available to be exhausted by the applicant. None have been shown to exist. Accordingly this objection must fail.

[22] I then proceed to deal with the merits of the matter as traversed in the applicant’s founding affidavit duly supplemented. The applicant has raised five grounds of review, namely and first, that the BEC report was premature, second, the rejection of the Consultant’s Report and recommendation was irrational and unreasonable, third, the second respondent’s bid was unacceptable, fourth, the second respondent’s bid was non-responsive, fifth and lastly, violation of section 217 of the Constitution. I deal with these grounds separately except for the third and fourth grounds which I shall deal with contemporaneously for reason that shall appear later.

The BEC report was premature.

[23] The essence of the objection under this ground is that when the BEC met, it had not as yet been favoured with the report of the Consultant who had been appointed to assist first respondent in the procurement process. It is articulated as follows in the applicant’s founding affidavit;

“47.1 The First Respondent’s BEC sat prematurely on the 26th of November 2019 without having received the consultant’s report dated December 2019.

47.2 The first respondent issued the applicant with a rejection letter prematurely, on17 December 2019 whereas BAC sat on 14 January 2020”.

[24] This ground of review can be best be understood to mean that if the first respondent appointed a Consultant, as it was entitled to, it was obliged to consider such report and recommendations thereof. According to the applicant, failure to consider a report by a Consultant duly appointed by the first respondent or at worst take a decision contrary to the recommendations of the Consultant, constitute an irregularity that renders the award liable to be set aside.

[25] In its supplementary founding affidavit, the applicant substantiate this ground as follows;

“9 According to the First Respondent’s Bid Evaluation Committee Minutes, the Bid Evaluation Committee (BEC) sat and dealt with the tender herein on 26 November 2019.

11 According to the attendance register provided by the First Respondent, the meeting in question was attended to by M Crous, L Dingani S Mpendu, S Makwedini and T Dukashe”

[26] The applicant goes on to assert that the BEC then subsequent to the meeting referred to above recommended the second respondent to the BAC as the preferred bidder.

[27] Dealing with the role of the Consultant and its report, the applicant pleads its case as follows;

“13 On 02 December 2019, Koen Consulting Engineers (“the Consultant”) issued a Tender Evaluation Report, as he was the duly appointed consultant”

14 The purpose of the consultant’s report was for the Bid Evaluation Committee to consider when making a recommendations to the Bid Adjudication Committee”

[28] It is clear from the applicant’s case and is not disputed by the first and/or second respondents that the Koen Consulting Report dated the 2nd of December 2019 recommended applicant for the appointment as the preferred bidder and rejected the second respondent’s bid as being unacceptable.

[29] To the above allegations the first respondent has answered by stating as follows;

“9 The Bid Evaluation Committee (BEC) met on 26 November 2019 and I attach hereto the minutes of that meeting as “AA3”. As will be noted from “AA3” five people were in attendance, namely;

9.1 Mr Crous (Chairperson)

9.2 Mr L Dingani (Member)

9.3 Ms S Mpendu (Supply Chain management)

9.4 Ms T Dukashe (Secretary)

9.5 Mr Makwedi (consultant) which should be spelt as

“Makwedini”

[30] The first respondent goes on to assert that Mr Makwedini was the representative of Koen Consulting which entity had been retained to assist the second respondent with expertise regarding the understanding of the technical intricacies of the project. The second respondent also states that Mr Makwedini, representing Koen Consulting, completed the scoresheet regarding all returnable documents and for functionality and was part of the BEC meeting only to answer any technical queries that could have arisen from any member thereof, he did not have a right to vote or deliberate.

[31] It also appears from scoresheets referred to above that the second respondent obtained the highest points in functionality and price. In the final analysis, the BEC identified four bidders as being eligible to proceed to adjudication as others fell by the way side for one reason or the other. Applicant was part of the bidders that were recommended for adjudication as was second respondent.

[32] Dealing with Koen Consulting report, the first respondents states as follows;

“14 Subsequent to the report, Mr Makwedini, without being requested or instructed to do so, compiled a report which is attached to the founding affidavit as “MB5” under cover of the letter dated 2 December 2019. It is noted that Mr Makwedini is candidate engineer”

[33] In reply, the applicant states that transparency demanded that the BEC ought to have convened again after the receipt of the Koen Consulting Report and deliberated on its contents.

[34] Two aspects from the applicant’s version are manifest in its replying affidavit, the first is that Mr Makwedini represented Koen Consulting in the meeting of the BEC and second is that Mr Makwdini was not commissioned to compile the report nor did he stop the meeting from finalising its recommendations to the BAC on the basis that he needed to compile a report. In addition, applicant does not dispute the version of the first respondent to the effect that Koen Consulting had compiled the scoresheet on the basis of which the BEC made and premised its recommendations to the BAC.

[35] These being motion proceedings where a final relief is sought, namely, the review of the decision of the second respondent, I can only reject the version of the second respondent on the basis that such a version is so untenable and far-fetched that it must be rejected on the papers.[6] I am not persuaded that second respondent’s version in relation to what happened at the BEC meeting is untenable and far-fetched.

[36] Accepting as I must therefore the version of the second respondent, it follows that this ground of review is totally unpersuasive to ground a basis for the review of the second respondent’s decision to award the tender in the manner it did. In any event, it would have been irregular for the BEC to consider the Koen Consulting report after it had made recommendations to the BAC, particularly when such a report was contrary to such recommendations. The BEC became functus officio its resolution as contained in its minutes.

[37] There was during the hearing, an attempt by Mr Madokwe, who together with Ms Masiza appeared for the applicant, to elevate the Koen Consulting Report above the deliberations of the BEC. This is a mistaken premise particularly when it is not accompanied by a submission that the BEC delegated its powers to evaluate bidders to Koen Consulting and such delegation was well founded in law. I now deal hereunder with the next ground of review.

The rejection of the Koen Consulting Report was unreasonable.

[38] Under this ground of review I understand the applicant’s argument to be that a prudent decision maker would have accepted the Koen Consulting Report and failure therefore on the part of the first respondent to accept such a report constitutes a reviewable irregularity.

[39] Drawing strength from the appointment of the Building Control Officer in terms of the National Building Regulations Act, 1977[7], Mr Madokwe submitted, citing the Supreme Court of Appeal decision in Paola v Jeeva[8], that the first respondent was under an obligation to at least consider the Koen Consulting Report, since the latter was in possession of the “relevant skill and expertise”.

[40] This argument would sound rather more palatable if it derived from the principle position that all local authorities are required to appoint consultants to oversee their procurement processes. That would, at the very least, demonstrate that as part of its oversight, Koen Consulting, in fulfilment of its statutory duties, was entitled to compile the report and having done so, it was owed a duty to consider such a report by first respondent. In a scenario as pointed out above, failure or even downright refusal of the first respondent to consider the report would constitute a reviewable irregularity. If

such a duty existed, it places the Consultant in the same position as the Building Control Officer established by section 5 of the National Building Regulations Act, 1977. This, however, is not the case in this matter, Koen Consulting was a product of the discretion on the part of the first respondent in recognition of its own shortcomings. Such shortcomings related, as already indicated, only to the technical aspects of the procurement and construction and not to the incapacity of its BEC to evaluate bids. The equivalence drawn between Koen Consulting and the Building Control Officer is thus misplaced.

[41] Accordingly, there was nothing unreasonable about the refusal of the first respondent to consider a belated report of a consultant which was contrary to the carefully considered recommendations of the BEC. This, is all the more significant when Koen Consulting reached its conclusion on the basis of the elimination of the second respondent prior to the evaluation, whilst the BEC accepted that the second respondent’s bid was worthy of an acceptance, in other words, it was responsive.

[42] Reasonableness of an administrative action is a pre-requisite for its validity in the same class as its lawfulness and procedural fairness. This is so because the Constitution entitles everyone to a right to an administrative action that is reasonable. How reasonableness is to be calibrated has been a controversial undertaking in our case law, particularly prior to the advent of the constitutional dispensation.[9] It has always been accepted, however, that an administrative act which is not reasonable is liable to judicial review.[10]

[43] Baxter[11], makes a distinction between dialectical and substantive reasonableness. He then posits that an administrative action is reviewable on the basis of its dialectical unreasonableness as opposed to its substantive unreasonableness. He reasons that the latter is more appropriate for an appeal than a judicial review. This is an interesting debate but it is one I am not prepared to enter into.

[44] What rather I must examine closely is whether the failure or even refusal of the first respondent to consider the Koen Consulting Report was unreasonable as contended by the applicant.

[45] The Promotion of the Administrative Justice Act, 2000, sets the standard for a review of a decision based on unreasonableness.[12] It renders reviewable an administrative action which is taken pursuant to an exercise of a power or the performance of a function

authorised by an empowering provision, in pursuance of which the administrative action was purportedly taken, which is so unreasonable

that no reasonable person could have so exercised the power or performed the function.

[46] In order to find in favour of the applicant, I must come to the conclusion that failure or refusal by the first respondent to consider the Koen Consulting report was so unreasonable that no reasonable person could have made such a decision.

[47] Two factors render the applicant’s argument in this regard unpersuasive. First, at the time when the BEC considered the bids and evaluated them at its meeting of the 26th November 2019, a representative of Koen Consulting was present. In that meeting, the second respondent’s bid, along with that of the applicant was found to be responsive and accepted, hence the recommendation to the BAC. The representative from Koen Consulting did not object to this and advise the BEC that they were mistaken, the second respondent’s bid ought to be found to be non-responsive. Second, Koen Consulting was not requested to review the recommendations of the BEC, which means its report that served before the BAC was totally unwarranted. The standard procedure is that the BAC must consider the recommendations of the BEC. Whether, in the instant matter, the BAC was allowed to consider information that was not part of the BEC recommendations that is not the case the applicant has made in its papers.

[48] In the premises, the contention that the failure by the first respondent to consider the Keon Consulting Report is unreasonable, lacks the factual and legal basis. It must thus fail.

The First Respondent’s bid was non-responsive

[49] I have stated above that I shall I deal with the third and fourth grounds of review contemporaneously. It will be recalled that under third ground, the applicant contends that the second respondent’s bid was unacceptable, whilst under the fourth ground, the contention is that second respondent’s bid was non-responsive.

[50] The Preferential Procurement Policy Framework Act, 2000 (PPPFA) defines an acceptable tender as one which, in all material respects, complies with the specifications and conditions of tender as set out in the tender document.[13]

[51] The tender documents which was filed as part of the rule 53 record defines a non-responsive tender as follows;

“A responsive tender is one that conforms to all the terms, conditions and specifications of the tender documents without material deviation or qualification. A material deviation or qualification is one which, in the Employer’s opinion, would:

a) Detrimentally affect the scope, quality or performance of the works, services or supply identified in the scope of Works.

b) Significantly change the employer’s or tenderer’s risks and responsibilities under the contract, or

c) Affect the competitive position of other tenderers presenting responsive tenders, if it were rectified.

[52] The above definition is followed by the instruction to reject non responsive tenders and that tenders must not be allowed to be made responsive through correction or withdrawal of the non-conforming deviation. Significantly, a tender which falls in any one of the factors mentioned from (a) to (c) becomes unresponsive and consequently, unacceptable.

[53] I have quoted elaborately from the PPPFA and the tender document, to make one simply point, namely that an unacceptable tender is non responsive. Hence I have opted to deal with these two grounds of review together and at the same time.

[54] The applicant, after providing a definition of the acceptable tender as already referred to above, articulates this ground as follows in the supplementary founding affidavit;

“25 according to the report by Koen Consulting Consortium, the consultant appointed by first respondent, Imvusa Trading, did not include the amendments of the tender notice 1 that was issued in their submission and they were thus disqualified from further evaluation”

[55] Before one considers the merit of the above statement, one must recall that this statement is contained in a report that was issued after the meeting of the BEC. One must also take into account that the BEC meeting recommended the second respondent to the BAC as the preferred bidder. What meaning then must be attached to the words “Imvusa Trading did not include the amendments of the tender notice 1 that was issued in their submission and they were thus disqualified from further evaluation”?

[56] The words quoted above record not what ought to have happened but rather what happened as a matter of fact. In their appearance, they must be referring to what happened at the BEC meeting of the 26th of November 2019. This is so because the Koen Consulting Report became available after the BEC meeting but before the BAC convened.

To examine the veracity of the above statement one must defer to the minutes of the BEC and to which applicant has made elaborate

references and whose authenticity has not been questioned at least not on the basis that what is contained therein is not a true

reflection of what happened at that meeting.

[57] At its meeting of the 26th of November 2019, the BEC considered all bids, disqualified all those that had to be disqualified. Second respondent was not amongst those that were disqualified. The statement then which emerged later in the report of Koen Consulting to the effect that second respondent was “disqualified” is patently false. So the BEC did not disqualify the second respondent, on the contrary, it recommended it to the BAC. Was the BEC correct to do so? I deal with that aspect next.

[58] As it will be recalled, the applicant’s case in this regard is that second respondent’s bid was not responsive, accordingly it ought not to have been accepted. This conclusion is based on the Koen Consulting Report.

[59] The BEC, after receipt of Koen Consulting Report regarding second respondent’s bid belatedly inserted the following;

“The committee noted that there was an addendum that was issued that had an additional of the Bill of Quantities. Imvusa Trading completed the page and returned with documents but did complete T2.1.20 Record of Addenda to tender documents and return acknowledgement form with their tender documents. The committee scrutinised this and came to a conclusion that, the addenda that was issued did not state that failure to return the acknowledgement and to complete the T1.1.20 would result into disqualification. Therefore Imvusa trading remained the recommended bidder”

[60] The belated addition to the BEC minutes is neutral in relation to the recommendation made by the BEC to the BAC. Had it led to the change in the substance of the recommendation, it would have constituted an irregularity, particularly when the first respondent itself states that the Koen Consulting Report was not officially commissioned. In any event the Supply Chain Policy of the second respondent which according to the tender documents the procurement process was going to be carried out, was not attached in any of the documents including the rule 53 record. I am thus not clear as to what that policy says about the role of external consultant invited to assist in the procurement process. But nothing turns on that in this matter given the manner in which the applicant has pleaded its case.

[61] The summary of the first respondent’s contention is that to the extent that there was an amendment of the Bill of Quantities about which the bidders were notified, the second respondent completed and submitted the amended pages of the Bill of Quantities in line with the instruction issued to all bidders.

[62] What the second respondent did not do, is to complete the acknowledgement portion of the tender document which only related to the question or aspect whether it had in fact completed its bill of quantities in terms of the amendment. The BEC took a view that this was not a disqualifying factor. I agree. The definition of the acceptable tender contained in the PPPFA and the tender document itself bear testimony to the fact that this was not a material deviation. The suggestion by the applicant that this means that the second respondent’s bid document was incomplete is rather overboard in view of the fact that the second respondent supplied all the information that was required to be supplied it only failed to confirm that it had done so.

[63] When the law requires compliance, it requires only substantial compliance as opposed to strict compliance. In Maharaj and Others v Rampersad 1964 (4) SA 631 AD at 641C-641E, the then Appellate Division[14] had the following to say about form and substance when it comes to a question of compliance;

“Before the description can be said to comply with the provision of reg 4(2) it must leave do doubt as to exact route to be followed. The inquiry, I suggest, is not so much whether there has been “exact,” “adequate” or substantial compliance with this injunction but rather whether there has been compliance therewith. This inquiry postulates an application of the injunction to the facts and the resultant comparison between what the position is and what, according to the injunction, it ought to be. It is quite conceivable that a court might hold that, even though the position as it is, is not identical with what it ought to be, the injunction has nevertheless been complied with. In deciding whether there has been compliance with the injunction the object sought to be achieved by the injunction and the question of whether this object has been achieved are of paramount importance”

[64] This legal position has found affirmation in many decisions of the Supreme Court of Appeal.[15]

[65] The failure then of the second respondent to endorse the tender as directed, in circumstances where it supplied all the requisite information in the tender document constitute substantial compliance that rendered its bid acceptable and thus responsive. Accordingly, this ground of review must similarly fail.

The section 217 challenge

[66] Here, the issue is that the manner in which the first respondent evaluated the bids was not in accordance with section 217 of the Constitution. The section calls on all organs of state when procuring for goods and services to do it in terms of systems which are fair, equitable transparent, competitive and cost-effective. The first respondent is the organ of state contemplated in section 217 of the Constitution.

[67] On the facts, applicant premised this ground on the absence of the Chairperson of the BEC at the meeting of the BAC to present the report as well as the failure of the BAC to record the interaction between itself and the Chairperson of the BEC regarding the discrepancies identified by the BAC.

[68] To relay, the discrepancies referred to herein relate to the disjuncture between the recommendation of the BEC and the Koen Consulting Report. The latter released a belated and unsolicited report stating that the second respondent was disqualified for being non-responsive. I have already found that the BEC did not disqualify the second respondent, on the contrary it recommended its bid to the BAC as a preferred bidder.

[69] The applicant takes issue with the fact that in the minutes of the BAC, the latter having noticed that there was inconsistency between the BEC recommendation and Koen Consulting Report, called the Chairperson of the BEC and at precisely the stage at which the Chairperson of the BEC was to address the BAC, the recording was switched off. This, so contend the applicant, is an indication of lack of transparency on the part of the first respondent.

[70] I am unable to accept this argument in view of the fact that it does not suggest that the scores allocated to the second respondent were not accurate thus it ought not to have been the preferred bidder. Once the explanation regarding how the Koen Consulting Report came about, it becomes impossible to come to the conclusion that such report ought to have persuaded the BAC to reject the recommendation of the BEC. The transparency argument would sound better if the BAC had been persuaded to accept the Koen Consulting Report contrary to the recommendation of the BEC and the BAC was unable to produce minutes and record regarding the discussion that took place in its meeting. In such a case the transparency argument would have more merits. As already indicated, that is not what happened. The reasons for the second applicant to be a preferred bidder are contained in

the minutes of the BEC which demonstrate that the second respondent fared better than the applicant in both price and functionality.

In the premises, this ground of review too falls to be rejected.

[71] The net effect of the above conclusions is that the application must fail. I need not deal with the section 8 relief in terms of which I am supposed to award the tender to the applicant. It is a remedy that is granted under exceptional circumstances. However more importantly, it is one that can only be granted if the award is reviewed as set aside. Since I am not persuaded that a case has been made for setting aside the award, awarding the tender to the applicant becomes automatically unavailable. This leaves only a question of costs as an outstanding issue between the parties. I now turn to that issue.

Costs

[72] Mr Madokwe addressed the question of costs from the perspective of the decision of Constitutional Court decision in Biowatch[16]. He then argued that in the event the applicant succeeds, the respondents must bear costs, whilst if the application fails, there must be no order as to costs. This, in essence, is a practical application of the Biowatch principle. The rationale for the principle was enunciated as follows by Sachs J;

“The rationale for this general rule is threefold. In the first place it diminishes the chilling effect that adverse costs orders would have on parties seeking to assert constitutional rights. Constitutional litigation frequently goes through many courts and the costs involved can be high. Meritorious claims might not be proceeded with because of fear that failure could lead to financially ruinous consequences. Similarly, people might be deterred from pursuing constitutional claims because of concern that even if they succeed they will be deprived of their costs because of some inadvertent procedural or technical lapse. Secondly, constitutional litigation, whatever the outcome, might ordinarily bear not only on the interests of the particular litigants involved but also the rights of all those in similar situations. In deed each constitutional case that is heard enriches the general body of constitutional jurisprudence and adds texture to what it means to be living in a constitutional democracy. Thirdly, it is the State that bears primary responsibility for ensuring both the law and the State conduct are consistent with the Constitution. If there should be a genuine, non-frivolous challenge to the constitutionality of law or State conduct, it is appropriate that the State should bear the costs if the challenge is good, but if it is not, the loosing non-State party litigant should be shielded from costs consequences of failure. In this way responsibility for ensuring that that the law and State conduct are constitutional is placed at the correct door”.

[73] At the hearing, being of the view that the instant matter might not necessarily fall within the Biowatch principle, I asked Mr Madokwe if he did not think that applicant was pursuing a pure commercial interest in challenging the decision of the first respondent to award the tender to the second respondent. His answer was that the Biowatch principle remains applicable as long as there is a constitutional issue raised. In deed that the applicant raised a constitutional issue is not in dispute, what is rather controversial is whether on the basis of the applicant’s cause of action, the respondents should be deprived of costs even if the application does not succeed.

[74] I have tried to ascertain from previous decisions of a similar cause, as to how the issue of costs has been handled by other courts. I have not found any case where a court applied the Biowatch principle in an application to review an award of a tender. Mr Madokwe referred me to none, except the text book on Public Procurement, which as I indicated to him is a secondary authority. In any event, it is woefully unhelpful with regard to the subject of costs in applications of this nature.

[75] The recent decision of the Supreme Court of Appeal in Afribusiness[17] did not quench my thirst since in that case there is no reference to Biowatch even though the matter dealt with the constitutionality of State conduct in public procurement. Many other decisions both in the

Supreme Court Appeal and Constitutional Court have not applied the Biowatch principle when dealing reviews of the nature I am dealing with.[18]

[76] The other issue which places matters of this nature outside the Biowatch principle is that invariably, it is not only the organ of state that opposes the review, the person or entity awarded the tender is often cited and is thus entitled to oppose the relief given its substantial interests in the proceedings. It would rather be cold comfort for such an entity or individual as the case may be, to deny costs on the basis that the application is directed against an organ of state whilst the private entity is cited as one of the parties. This is exactly what has happened in this matter. The second respondent had no choice but to oppose this application, after all, if applicant had succeeded, second respondent would lose a lucrative commercial opportunity. I also do not see second respondent’s opposition as being frivolous, if it was, that would be an important consideration regarding costs.

[77] For these reasons, I am persuaded that costs must follow the results.

[78] Accordingly, the following order shall issue;

(a) The application is dismissed with costs

_______________________________

B Maswazi

Judge of the high Court of South Africa (acting)

Heard: 12 November 2020

Handed down: 28 January 2021

For the applicant Adv Madokwe with Adv Masizi

Instructed by: MCWILLIAMS & ELLIOT

Port Elizabeth

C/o DULLABH

5 Betram Street

GRAHAMSTOWN

For the first respondents: Adv Watt

Instructed by WHITESIDES

53 Africa Street

For the second respondent: Adv Naidu

Instructed by: MENZIES NGXONGO & ASSOCIATES

Durban

C/o YOKWANA ATTORNEYS

10 New Street

[1] Ganes and another v Telkom Namibia [2004] 2 All SA (SCA) par 19; The Unlawful Occupiers of the School Site v The City of Johannesburg [2005] 2 All SA SCA par 14-16, is to the same effect.

[2] (supra)

[3] Kayabe v Minister of Home Affairs 2010(4) SA 327 (CC) para 48; see also Municipal Pension Fund v Grobler 2007(5) SA 629 (SCA) para 29-30. Section 7(2) (a) of PAJA provides; “(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of the Act unless any internal remedy provided for in any other law has been first exhausted.”

[3] Kayabe v Minister of Home Affairs 2010(4) SA 327 (CC) para 48; see also Municipal Pension Fund v Grobler 2007(5) SA 629 (SCA) para 29-30. Section 7(2) (a) of PAJA provides;

“(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of the Act unless any internal remedy provided for in any other law has been first exhausted.”

[4] Mamlambo Construction v Port Johns Local Municipality [2010]ZAECMHC 21( 24 June 2010); see also Jikijela v Mhlontlo Local Municipality [2011] ZAMHC 7 (9 May 2011)

[5]ZASCA (1 October 2015)

[6] Plascon-Evans v Van Riebeck Paints Pty Ltd 1984(3) SA 623 AD at 634F

[7] Section 5(1) of that Act obliges local authorities to appoint Building Control Officer Officers.

[8] 2004(1) SA 396 (SCA)

[9] Cora Hoexter, Administrative Law in South Africa [Second edition] page 327

[10] Johannesburg Consolidated Investment Co v Johannesburg Town Council 1903 TS 111 at 116

[11] Baxter, Administrative Law (1984)

[12] Section 6(2)(h) of the Promotion of Administrative Justice act 2000

[13] Section 1 of the Preferential Procurement Policy Framework Act, 2000

[14] Now the Supreme Court of Appeal

[15] See Unlawful Occupiers of School Site v City of Johannesburg 2005 (4) SA 199 SCA par 22, Moela v Shoniwe 2005 (4) SA 357 SCA par 8, Merry Hill Pty Ltd v Engelbrecht 2008 (2) SA 544 SCA par 23. See also Gcam-Gcam v Minsiter of Safety and Security [2017] ZAECMHC (12 September 2017) where Mbenenge ADJP ( as he then was) endorsed Maharaj (supra),

[16] Biowatch Trust v Registrar, Genetic Resources 2009(6) SA 232 para 23

[17] Afribusiness NPC v Minister of Finance [2021] 1 All SA (SCA)

[18] All Pay Consolidated Investments Holdings v Chief Executive Officer of South African 2014(6) BCLR 641, Aurecon South Africa Pty Ltd v City of Cape Town 2016(2) SA, Buffallo City v Asla 2019(4) SA 33 (CC) where Theron J addressed the issue of costs as follows; “Ordinarily in commercial matters like this even though there broad issues of public interest at stake costs would follow the result. Both parties have been partially successful. See also Trencon v Industrial Development Corporation of South Africa Limited and Another 2015(5)SA 245(CC)

[18] All Pay Consolidated Investments Holdings v Chief Executive Officer of South African 2014(6) BCLR 641, Aurecon South Africa Pty Ltd v City of Cape Town 2016(2) SA, Buffallo City v Asla 2019(4) SA 33 (CC) where Theron J addressed the issue of costs as follows;

“Ordinarily in commercial matters like this even though there broad issues of public interest at stake costs would follow the result. Both parties have been partially successful.

See also Trencon v Industrial Development Corporation of South Africa Limited and Another 2015(5)SA 245(CC)