TEB Properties CC v MEC, Department of Health and Social Development, North West (792/10) [2011] ZASCA 243; [2012] 1 All SA 479 (SCA) (1 December 2011)

TEB Properties CC v MEC, Department of Health and Social Development, North West (792/10) [2011] ZASCA 243; [2012] 1 All SA 479 (SCA) (1 December 2011)

The Supreme Court of Appeal held that the lease agreement between TEB Properties CC and the Department of Health and Social Development, North West, was invalid as it was concluded without compliance with mandatory statutory procurement procedures. The department failed to refer the lease to the tender board or follow an open bidding process as required by section 217(1) of the Constitution, the PFMA, and the North West Tender Board Act. The court rejected the appellant's reliance on Treasury Regulation 13.2.4, finding that it does not grant carte blanche to accounting officers to bypass competitive procurement. Regulation 16A6.4 allows deviation only where impractical, and such deviation...

Citation
[2011] ZASCA 243
Parties
Appellant: TEB Properties CC; Respondent: MEC, Department of Health and Social Development, North West
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 December 2011
Case Number
792/10
Procedural Posture
Civil Appeal / Appeal From North West High Court, Mafikeng
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Lewis, Bosielo, Petse
Legal Topics
Public Procurement, Invalid Contract, Tender Board Powers, Treasury Regulations, Estoppel, Administrative Action
Commercial and Corporate Administrative Law Public Procurement Invalid Contract Tender Board Powers Treasury Regulations Estoppel Administrative Action

Case Brief

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Parties

TEB Properties CC

Appellant

MEC, Department of Health and Social Development, North West

Respondent

Procedural Posture

Civil Appeal / Appeal From North West High Court, Mafikeng

Legal Issues

  1. 1 Whether the lease agreement concluded without compliance with prescribed tender procedures is valid.
  2. 2 Whether the acting head of department's decision to conclude the lease without competitive bidding is saved by Treasury Regulations 13.2 and 16A6.4.
  3. 3 Whether the appellant can rely on the Turquand rule or estoppel to enforce the lease.

Ratio Decidendi

The Supreme Court of Appeal held that the lease agreement between TEB Properties CC and the Department of Health and Social Development, North West, was invalid as it was concluded without compliance with mandatory statutory procurement procedures. The department failed to refer the lease to the tender board or follow an open bidding process as required by section 217(1) of the Constitution, the PFMA, and the North West Tender Board Act. The court rejected the appellant's reliance on Treasury Regulation 13.2.4, finding that it does not grant carte blanche to accounting officers to bypass competitive procurement. Regulation 16A6.4 allows deviation only where impractical, and such deviation...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs attendant upon the employment of two counsel.