Transnet Soc Ltd v Mazothando (Pty) Ltd (13991/2016) [2017] ZAGPPHC 346 (9 May 2017)

Transnet Soc Ltd v Mazothando (Pty) Ltd (13991/2016) [2017] ZAGPPHC 346 (9 May 2017)

The court found that the applicant, as an organ of state, is bound by section 217 of the Constitution and its own supply chain management policy, which restricts the quotation system to non-repetitive purchases below R2 million. The procurement in question exceeded this threshold and was repetitive, rendering the process and resulting agreement constitutionally invalid and unlawful. The failure to specify the quantity in the RFQ compromised transparency and accountability, leading to irregular expenditure. The agreement was concluded contrary to the prescribed procurement policy and statutory requirements, and is therefore ultra vires and invalid. The court rejected the respondent's...

Citation
[2017] ZAGPPHC 346
Parties
Applicant: Transnet SOC Ltd; Respondent: Mazothando (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
9 May 2017
Case Number
13991/2016
Procedural Posture
Review Application / Judgment
Outcome
The application is granted. The decision to appoint the respondent and the agreement concluded are declared constitutionally invalid and unlawful and are set aside. The respondent is ordered to pay the costs of the application.
Judges
S C Mia
Legal Topics
Public Procurement, Constitutionality of Contract, Promotion of Administrative Justice Act, Ultra Vires, Unjust Enrichment
Administrative Law Commercial and Corporate Public Procurement Constitutionality of Contract Promotion of Administrative Justice Act Ultra Vires Unjust Enrichment

Case Brief

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Parties

Transnet SOC Ltd

Applicant

Mazothando (Pty) Ltd

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Whether the applicant's decision to appoint the respondent to supply and deliver B90 Black Loco Sand was constitutionally valid and lawful.
  2. 2 Whether the agreement concluded between the applicant and respondent for the supply and delivery of sand was constitutionally valid and lawful.
  3. 3 Whether the procurement process complied with section 217 of the Constitution and the applicant's supply chain management policy.

Ratio Decidendi

The court found that the applicant, as an organ of state, is bound by section 217 of the Constitution and its own supply chain management policy, which restricts the quotation system to non-repetitive purchases below R2 million. The procurement in question exceeded this threshold and was repetitive, rendering the process and resulting agreement constitutionally invalid and unlawful. The failure to specify the quantity in the RFQ compromised transparency and accountability, leading to irregular expenditure. The agreement was concluded contrary to the prescribed procurement policy and statutory requirements, and is therefore ultra vires and invalid. The court rejected the respondent's...

Court Disposition

The application is granted. The decision to appoint the respondent and the agreement concluded are declared constitutionally invalid and unlawful and are set aside. The respondent is ordered to pay the costs of the application.

Orders

  • The applicant's decision to appoint the respondent to supply and deliver B90 Black Loco Sand in 25 kg bags is declared constitutionally invalid and unlawful and is set aside.
  • The agreement concluded between the applicant and the respondent to supply and deliver B90 Black Loco Sand in 25 kg bags is declared constitutionally invalid and unlawful and is set aside.