IN THE HIGH COURT OF SOUTH AFRICA(NORTH GAUTENG HIGH COURT, PRETORIA)

Date: 2011-01-07

Case Number: 27974/2010

In the matter between:

TELKOM SA LIMITED Applicant

and

MERID TRADING (PTY) LTD First Respondent

BIZ AFRICA 1944 (PTY) LTD Second Respondent

PLESSEY/HEZEKI JOINT VENTURE COMPANY Third Respondent

FORTEL INVESTMENTS CC Fourth Respondent

BIHATI SOLUTIONS (PTY) LTD Fifth Respondent

MTHIYANE SEYAMA PROJECTS Sixth Respondent

and

Case Number: 25945/2010

BIHATI SOLUTIONS (PTY) LTD Applicant

and

TELKOM SA LIMITED First Respondent

PLESSEY (PTY) LTD Second Respondent

HEZEKI CONTRACTING (PTY) LTD Third Respondent

BIZ AFRICA 1944 (PTY) LTD Fourth Respondent

FORTEL INVESTMENTS CC Fifth Respondent

MERID TRADING (PTY) LTD t/a VUKA

ENTERPRISES Sixth Respondent

MTHIYANE CONSTRUCTION CC Seventh Respondent

SEYAMA SOLUTION AND PLANT HIRE (PTY) LTD Eighth Respondent

GIO CONSTRUCTION AND PLANT HIRE (PTY) LTD.........Ninth Respondent

WORLDTEL (PTY) LTD Tenth Respondent

MOTATA TELECOMMUNICATIONS (PTY) LTD Eleventh Respondent

JAPP CONSTRUCTION (PTY) LTD Twelfth Respondent

JUDGMENT

SOUTHWOOD J

[1] In the application under case number 27974/2010 (‘the main

application’) the applicant seeks the following relief in terms of its

amended notice of motion dated 17 November 2010:

(1) An order reviewing and setting aside the applicant’s decision

taken on 14 November 2008 to accept the proposals submitted

by the six respondents in terms of RFP0101/2007, and the

award of RFP0101/2007 to the six respondents as

communicated to them in the applicant’s letter of 5 December

2008;

(2) In the event that the court finds that this application falls within

the ambit of section 7(1)(b) of the Promotion of Administrative

Justice Act 3 of 2000 (‘PAJA’), an order condoning the

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applicant’s failure to launch this application within 180 (one

hundred and eighty) days after 14 of November 2008, in terms

of the provisions of section 9 of PAJA;

(3) An order declaring that the applicant’s acceptance of the

proposals submitted by the six respondents in terms of

RFP010/2007 and the award of tender RFP0101/2007 to the six

respondents is null and void and of no force or effect;

(4) An order that the first and fifth respondents pay the costs of this

application.

Only the first and fifth respondents oppose the application. The fifth

respondent, as applicant, in an application under case number

25945/2010 (‘the related application’) seeks the following relief:

(1) An order declaring that Telkom is bound by its decision taken on

5 December 2008 to award the said tender to the applicant (i.e.

the fifth respondent in the main application);

(2) An order that the first respondent (i.e. the applicant in the main

application) in good faith and with due diligence and expedition,

engage with the applicant (i.e. the fifth respondent in the main

application) in a process of negotiation of any outstanding

issues required for the implementation of its original decision to

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award the tender to the applicant, including the negotiation of

outstanding issues required for purposes of the formal

agreement to be concluded between the parties, and to pursue

and implement all remaining aspects of the tender process in

that regard;

(3) An order that the first respondent (i.e. the applicant in the main

application) pay the costs of the application.

The applicant in the main application opposes the grant of this relief

and relies on the facts set out in the main application.

[2] By agreement between the parties the two applications were enrolled

and heard together. The parties agree that the main application must

be decided first and that if the substantive relief is granted the fifth

respondent will not be entitled to the relief which it seeks in the related

application. For the sake of convenience the parties will be referred to

as they are referred to in the main application.

[3] The following facts are common cause or cannot be disputed:

(1) The applicant is an organ of State as contemplated in section

239 of the Constitution of the Republic of South Africa 1996, and

PAJA.

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(2) The applicant is subject to the provisions of section 217 of the

Constitution and accordingly, when it contracts for goods and

services it must do so in accordance with a system which is fair,

equitable, transparent, competitive and cost effective. Pursuant

to these constitutional obligations the applicant has adopted a

procurement policy.

(3) The applicant’s procurement policy states with regard to

Requests for Proposals (‘RFP’s’):

‘This is an alternative procurement method that should be

employed where goods or services are available from

general sources and it differs from each other not only in

price but in other aspects as well (i.e. quality, availability,

features, etc.). A Request for Proposal (RFP) is typically

used when the product or service cannot be defined with

absolute specificity and further dialogue with suppliers

concerning the subject of the RFP is expected. The

information generally contained in a RFP is similar to that

listed under paragraph 8.5 (RFB).’

(4) On 8 November 2007 the applicant published an open Request

for Proposal (‘RFP0101/2007’) with a view to selecting and

appointing service providers for the provisioning of Telkom

Network Services (Construction Services) as and when required

by the applicant.

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(5) The RFP stipulated that the closing date for the submission of

proposals was 12 December 2007. By the closing date the

applicant had received 61 proposals in response to the RFP.

(6) The RFP stipulated that the proposals submitted shall be open

for acceptance by the applicant for a period of 120 days from the

closing date (12 December 2007). The proposal signed by each

proposer contains the following:

‘I/we agree that the offer herein shall remain binding upon

me/us and open for acceptance by Telkom SA Limited

during the validity period indicated and calculated from

the closing hour and date of the bid’.

(7) The 120 day period expired on or about 12 April 2008. The

period of validity for proposals to be submitted was not extended

at any time prior to 12 April 2008, either unilaterally by any of the

proposers or by agreement between the applicant and the

proposers who had submitted proposals. (The first respondent’s

counsel contends that prior to 12 April 2008 the applicant and

the first respondent agreed that the validity period of the first

respondent’s proposal was extended but there is no factual

basis for the contention.)

(8) The evaluation of the 61 proposals received and the shortlisting

of 15 proposals for further consideration took place in

accordance with the applicant’s procurement policy. On 28

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February 2008 15 of the proposers who had submitted

proposals were shortlisted and approved by the applicant’s

Procurement Review Council.

(9) By 12 April 2008 the applicant had not accepted any of the

proposals.

(10) On 24 June 2008, after the validity period of the proposals had

expired, the applicant sent an e-mail to each of the 15 proposers

whose proposals had been shortlisted for further consideration

and requested them to extend the validity period of their

proposals. This e-mail reads as follows:

‘Dear Proposer

Please note that the validity period of RFP0101/2007

(Construction Services) has expired and we kindly

request your permission to increase it with another 120

days from date of expiry as the tender evaluations are still

ongoing. It will be appreciated if your confirmation can be

received by no later than Thursday 26 June 2008 12h00.’

(11) Several of the proposers to whom the message was sent,

including the six respondents, agreed to extend the validity

period by a further 120 days, which extended period expired on

or about 12 August 2008. No further extensions were sought or

agreed before or after that date. (The first respondent’s counsel

contends that after 12 August 2008 the parties agreed that the

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validity period of the first respondent’s proposal was extended

‘for a reasonable time, at least until decision by the applicant’s

procurement bodies’. Once again there is no factual basis for

the contention. The first respondent does not even allege that

the parties entered into such a tacit agreement. The fifth

respondent alleges that ‘at least by their conduct the applicant

and the fifth respondent tacitly agreed to the further extension of

the validity period of the tender’. This allegation is extremely

vague and unconvincing. It is not alleged what conduct is relied

upon, who entered into this agreement and that they had the

necessary animus contrahendi and for how long the validity

period was extended. The existence of the tacit agreement

must be inferred from all the relevant facts and circumstances –

see Standard Bank of South Africa Ltd v Ocean

Commodities Inc 1983 (1) SA 276 (A) at 292B; Joel Melamed

and Horwitz v Cleveland Estates (Pty) Ltd 1984 (3) SA 155

(A) at 165I. If an inference can be made from the conduct of the

parties it is by no means clear that ‘the most plausible probable

conclusion’ (see Joel Melamed at 165I) is that the parties

agreed to extend the validity period of the proposal. If the

parties knew – as they clearly did – that the validity period had

expired and no tender had been awarded, the most plausible

probable conclusion is that the parties were engaging in a

procurement process other than by way of public tender.)

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(12) On 18 September, and after the agreed extended period of the

proposals had expired, the applicant’s Cross-Functional

Sourcing Team, acting in accordance with the applicant’s

Procurement Policy, submitted a written memorandum to the

applicant’s Procurement Review Council (‘PRC’) in which the

award of the RFP to the six respondents was recommended.

On 18 September 2008 the applicant’s PRC supported the

decision and decided to forward the memorandum to the

applicant’s Executive Committee for approval.

(13) On 15 October 2008 the applicant’s PRC submitted a

recommendation to the applicant’s Executive Committee for

support of the recommendation and onwards submission to the

applicant’s Board of Directors for final approval.

(14) On about 14 November 2008 the Executive Committee of the

applicant submitted the recommendation of the PRC to the

applicant’s Board of Directors for acceptance of the

recommendations to make the award of the tender to the six

respondents. The applicant’s Board of Directors approved the

recommendation and resolved to award the RFP to the six

respondents as service providers.

(15) On 5 December 2008, pursuant to the decision taken by the

applicant’s Board of Directors on 14 November 2008, the

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applicant sent a letter to each of the respondents advising them

of their appointment as preferred service providers for the

provisioning of Telkom Network Services (Construction

Services). The award letters specified that any final award of

business and the effective commencement date of the

appointment as a preferred service provider was conditional

upon the signature of an agreement within 45 days from 5

December 2008 incorporating the matter specified in the award

letter.

(16) The 45 day period calculated from 5 December 2008 expired on

or about 20 January 2009, but no agreement as contemplated in

the award letter was signed between the applicant and any one

of the respondents.

(17) After the issue of the award letters the applicant negotiated with

the six respondents the terms of the final agreements but no

agreements were concluded with any of the respondents.

(18) By February 2009 the applicant had not informed the

unsuccessful bidders that their proposals had not been

accepted.

(19) During February 2009 one or more of these unsuccessful

bidders lodged a complaint with the office of the Public Protector

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with regard to the procedure relating to the RFP.

Correspondence ensued between the attorneys acting for the

complainants, the Public Protector, and attorneys acting for the

applicant.

(20) Pursuant to these complaints and the correspondence which

ensued between the applicant and the Public Protector, on 6

August 2009 the applicant sent identical letters to the six

respondents advising them that the applicant had consulted with

an external legal counsel and was considering what steps it

should take in respect of the tender.

(21) The applicant decided to suspend the further negotiation of

agreements with the six respondents pending receipt of legal

advice. The applicant received an opinion from Senior Counsel

to the effect that an unsuccessful bidder who had been

eliminated in the evaluation process could contend that the

tender process had come to an end when the validity period had

expired without any award having been made and that he

should then be permitted to submit an approved bid in a

subsequent public tender process in terms of a new RFP.

(22) On 20 November 2009 the Executive Committee of the applicant

submitted a recommendation to the applicant’s Board of

Directors for approval to set aside the award of RFP0101/2007

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for the provision of Telkom Network Services (Construction

Services). This memorandum specifically referred to the opinion

obtained from legal counsel.

(23) On 13 April 2010 the applicant addressed a letter to the second,

third, fourth, fifth and sixth respondents in which the applicant

advised them of its intention to bring this application. The

applicant gave similar advice to the first respondent on 13 May

2010.

(24) The fifth respondent launched the related application on 6 May

2010 and the applicant launched the main application on 18 May

2010.

[4] The principal issue raised in this case is the legal consequence of a

failure by a public body to accept, within the stipulated validity period

for the (tender) proposals, any of the proposals received.

[5] The applicant’s primary contention may be summarised as follows: the

proposals submitted constituted offers by the proposers to the

applicant to supply the required services to the applicant on the terms

set out in the proposal. Such offers were open for acceptance for a

period of 120 days after the closing date (i.e. until 12 April 2008). The

legal nature of the proposal was an option granted to the applicant (i.e.

an offer coupled with an undertaking to keep the offer open for a

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specified period of 120 days), and the applicant was entitled to

exercise the option and accept the proposal within the validity period.

After 12 April 2008 there was no longer a valid option open for

acceptance by the applicant. On 24 June 2008, when the applicant

requested the 15 shortlisted proposers to ‘increase their validity period

with another 120 days’ and the proposers agreed to the request, as a

matter of law this could not constitute an extension of or amendment to

the initial proposals and offers which had lapsed, but constituted new

offers made by each of the proposers who agreed to the request, and

which new proposals were on the same terms and conditions as the

initial proposals, save that they were open for acceptance by the

applicant until 12 August 2008. The applicant contends that as the

validity period of the proposals had long since expired the applicant

could not validly have accepted any of the proposals and that the other

proposers must have appreciated by this time that their proposals,

which were not open for acceptance beyond the stipulated period of

120 days, had long since lapsed.

[6] According to the first respondent’s answering affidavit and first

respondent’s counsel’s heads of argument the first respondent

opposes the application on the following grounds:

(a) The applicant and the respondents concluded oral or, at least,

tacit agreements to extend the second validity period from 8

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August 2008 at least until the date of the award on 5 December

2008;

(b) When the award was made an enforceable agreement came

into existence between the applicant and each of the

respondents;

(c) After the award was made, the applicant and the first

respondent (and, presumably, the other respondents too) in any

event concluded an enforceable agreement with consensus on

all material terms;

(d) The applicant cannot rely upon its own refusal (following

complaints by the unsuccessful bidders) to sign the written

agreement in frustration of fulfilment of the simple conditions;

(e) There is nothing unfair, unconstitutional, unlawful or reviewable

about the negotiation and conclusion of the agreements with the

successful bidders during the extended offer period (to the

exclusion of the unsuccessful bidders who had not, even, met

the applicant’s minimum requirements);

(f) On the contrary, if the award and consequent agreement is set

aside, the first respondent (and, presumably, the other

respondents too) would suffer immense prejudice and

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themselves become the victims of unfair and unconstitutional

treatment.

[7] The fifth respondent contends that the court is precluded from granting

the relief sought by the applicant because of the applicant’s delay in

instituting these proceedings. In this regard the fifth respondent relies

on the provisions of section 7 of PAJA. (At the hearing the first

respondent’s counsel adopted the fifth respondent’s argument.) With

regard to the merits, the fifth respondent contends that the parties were

free to extend the validity period of the bidders’ proposals and that

there was nothing unfair about the applicant continuing to negotiate

with the 15 bidders who had submitted acceptable tenders. According

to the fifth respondent the tenderers who fell out of the race had their

moment and the extension of the validity period by agreement with the

15 shortlisted tenderers who had submitted acceptable tenders, after

the expiry of the validity period, cannot conceivably be said to be unfair

to the tenderers who fell out of the race. The fifth respondent also

contends that the court must consider all the relevant circumstances of

the tender and adjudicate the matter on the basis of whether the

applicant’s decision to award the tender to the six respondents was

reasonable (see Bato Star Fishing (Pty) Ltd v Minister of

Environmental Affairs 2004 (4) SA 490 (CC) paras 42 and 45) and

taking into account that not every slip in the administration of a tender

must be visited by judicial sanction (see Moseme Road Construction

v King Engineering Construction 2010 (4) SA 359 (SCA) para 21).

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Finally the fifth respondent contends that the applicant’s letter of

acceptance of 5 December 2008 does not contain a suspensive

condition.

[8] It will be convenient to deal first with the question of the applicant’s

delay in instituting these proceedings before considering the merits of

the application.

[9] The main application is partially an application for judicial review of an

administrative action in terms of section 6 of PAJA. The applicant’s

counsels’ heads of argument rely on a number of grounds of review

specified in section 6. The first and fifth respondents contend that the

applicant did not bring its application within the 180 day period

stipulated by section 7(1) of PAJA. However the applicant argues that

section 7(1) of PAJA does not apply when the decision maker applies

to set aside its own decision as the date of the decision maker’s

decision is not covered by paragraphs (a) and (b) of section 7(1) which

provide for the date from which the 180 days must run. The applicant

contends that the common law rule as enunciated in Wolgroeiers

Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad 1978 (1) SA 13

(A) applies (i.e. the court must decide (a) whether the proceedings

were instituted after the passing of a reasonable time and (b), if so,

whether the unreasonable delay ought to be overlooked. In deciding

(b) the court exercises a judicial discretion, taking into consideration all

the relevant circumstances.)

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[10] Section 7(1) of PAJA provides that –

‘Any proceedings for judicial review in terms of section 6(1) must

be instituted without unreasonable delay and not later than 180

days after the date –

(a) subject to subsection (2)(c), on which any proceedings

instituted in terms of internal remedies as contemplated in

subsection (2)(a) have been concluded; or

(b) where no such remedies exist, on which the person

concerned was informed of the administrative action,

became aware of the action and the reasons for it or

might reasonably have been expected to have become

aware of the action and the reasons.’

On the face of it the use of the word ‘any’ indicates clearly that the

section is intended to apply to all proceedings for judicial review but

this interpretation may be affected by the context. As pointed out in

Commissioner for Inland Revenue v Ocean Manufacturing Ltd

1990 (3) SA 610 (A) at 618H-I ‘Any is “a word of wide and unqualified

generality. It may be restricted by the subject-matter or the context, but

prima facie it is unlimited’ (Per Innes CJ in R v Hugo 1926 AD 268 at

271.). ‘In its natural and ordinary sense, any – unless restricted by the

context – is an indefinite term which includes all of the things to which it

relates’ (Per Innes JA in Hayne & Co v Kaffrarian Steam Mill Co Ltd

1914 AD 363 at 371.)’ While PAJA appears to govern all proceedings

for judicial review the failure of the Legislature to provide for a date

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where the decision maker wishes to review its own decision indicates

that section 7(1) was not intended to apply to such proceedings. As

long ago as 1977 our (then) highest court held that a public body may

not only be entitled but also duty bound to approach a court to set

aside its own irregular administrative act – see Transair (Pty) Ltd v

National Transport Commissioner and Another 1977 (3) SA 784 (A)

at 792H-793G. Even if the Legislature cannot be presumed to know

the state of the law, the omission seems to be deliberate and the court

must give effect to the Act as it stands. Furthermore, it seems to be

clear that a court cannot read into the Act something that was

overlooked by the Legislature – see Jaga v Dönges NO & Another

1950 (4) SA 653 (A) at 664G. Counsel for the respondents had

difficulty in suggesting the words which could fill the casus omissus and

eventually, as I understood them, accepted the applicant’s contention

that where the decision maker seeks to review its own decision the

common law rules must be applied. This means that all the relevant

circumstances must be taken into consideration, particularly the

strength of the case on the merits. Accordingly I turn to a consideration

of the merits.

[11] As appears from the parties’ opposing contentions they have

diametrically opposed points of departure. The applicant’s approach is

that there has not been compliance with section 217 of the Constitution

(i.e. the administrative process is flawed). On the other hand, the

respondents’ approach is that the rules of contract apply, that the

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parties were free to extend the validity period of their proposals, that

they in fact did so and accordingly that the award of the tender is valid.

For this approach the first and fifth respondents rely on the legal

position set out in Manna v Lotter and Another 2007 (4) SA 315 (C)

paras 12-29.

[12] The Constitution lays down minimum requirements for a valid tender

process and contracts entered into following an award of a tender to a

successful tenderer: the tender process, preceding the conclusion of

contracts for the supply of goods and services, must be ‘fair, equitable,

transparent, competitive and cost-effective’ – section 217 of the

Constitution. The decision to award a tender constitutes administrative

action and therefore the provisions of PAJA apply – see Millennium

Waste Management (Pty) Ltd v Chairperson, Tender Board:

Limpopo Province and Others 2008 (2) SA 481 (SCA) para 4;

Metro Projects CC v Klerksdorp Local Municipality 2004 (1) SA 16

(SCA) para 12; Logpro Properties CC v Bedderson NO and Others

2003 (2) SA 460 (SCA) para 5. Generally, once a contract has been

entered into pursuant to the award of the tender the rules of contract

apply – see Cape Metropolitan Council v Metro Inspection

Services CC 2001 (3) SA 1013 (SCA) para 18; The Law of

Government Procurement in South Africa Phoebe Bolton Lexis

Nexis Butterworths page 30 para 5. In accordance with the principle or

doctrine of legality a contract entered into without complying with the

prescribed tender processes is invalid and the court has no discretion

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to enforce the contract or refuse to enforce it – see Municipal

Manager: Qaukeni v FV General Trading CC 2010 (1) SA 356

(SCA) paras 14, 15 and 16; Premier, Free State and Others v

Firechem Free State (Pty) Ltd 2000 (4) SA 413 (SCA) para 30;

Eastern Cape Provincial Government v Contractprops 25 (Pty) Ltd

2001 (4) SA 142 (SCA) paras 8 and 9. It follows that, even if no

contract is entered into, all steps taken in accordance with a process

which does not comply with the prescribed tender process are also

invalid – see section 2 and 172(1) of the Constitution:

Pharmaceutical Manufacturers of South Africa: In re ex parte

President of the Republic of South Africa 2000 (2) SA 674 (CC)

para 48.

[13] Once the applicant was advised that its tender process was irregular

because it did not comply with the prescribed tender procedure the

applicant was duty bound to approach a court to set aside its own

irregular administrative act – see Municipal Manager: Qaukeni v FV

General Trading CC supra para 23. The applicant was under a duty

not to submit itself to an unlawful contract and was obliged to ignore

the award of the tenders and resist any attempt to enforce them – see

Premier, Free State and Others v Firechem Free State (Pty) Ltd

supra para 36; Municipal Manager, Qaukeni v FV General Trading

CC supra para 23. The applicant was entitled to bring an application

to review and set aside the award of the tenders and/or apply for a

declarator that the award of the tenders was null and void and of no

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force and effect – see Municipal Manager: Qaukeni v FV General

Trading CC supra paras 25 and 26.

[14] The question to be decided is whether the procedure followed by the

applicant and the six respondents after 12 April 2008 (when the validity

period of the proposals expired) was in compliance with section 217 of

the Constitution. In my view it was not. As soon as the validity period

of the proposals had expired without the applicant awarding a tender

the tender process was complete – albeit unsuccessfully – and the

applicant was no longer free to negotiate with the respondents as if

they were simply attempting to enter into a contract. The process was

no longer transparent, equitable or competitive. All the tenderers were

entitled to expect the applicant to apply its own procedure and either

award or not award a tender within the validity period of the proposals.

If it failed to award a tender within the validity period of the proposals it

received it had to offer all interested parties a further opportunity to

tender. Negotiations with some tenderers to extend the period of

validity lacked transparency and was not equitable or competitive. In

my view the first and fifth respondent’s reliance only on rules of

contract is misplaced.

[15] A further reason for finding against the first and fifth respondents is that

they have not laid a basis for finding that the validity period of their

proposals was lawfully extended until the tenders were awarded.

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[16] Furthermore, the applicant’s letters to the six respondents, all dated 5

December 2008, advising them that they were preferred service

providers for the provisioning of Telkom Network Services

(Construction Services) clearly does not contain an unqualified

acceptance of the respondents’ proposals such as would give rise to a

binding agreement. The letters clearly stipulate that –

‘Any final award of business including the effective commencement

date will be contingent upon the signature of an Agreement,

within 45 days from the date of this facsimile, incorporating, inter

alia, the following:

• Telkom’s Standard Terms and Conditions for

Rendering (Turnkey) Services for Telkom

• An appropriate discount structure in line with the

required 15 % saving on current Telkom cost as

detailed in the original Proposal

• Bid conditions as detailed in the original Proposal

• BEE Commitment Plan’

(See e.g. Premier, Free State and Others v Firechem Free

State (Pty) Ltd supra paras 21 and 35)

[17] There is also no room for finding that the requirement of a written

agreement signed by the parties was a condition which had been

fictionally fulfilled. If the award process was flawed, as it has been

found to be, the applicant was under a duty not to submit itself to an

unlawful contract and was obliged to resist the respondents’ attempts

to enforce such a contract – see Premier, Free State and Others v

Firechem Free State (Pty) Ltd supra paras 36 and 37.

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[18] Insofar as it was suggested that the applicant is estopped from denying

that an agreement had been entered into this would be contrary to

what is required by law, namely that the contract be entered into

pursuant to a tender process which is ‘fair, equitable, transparent,

competitive and cost-effective’, and estoppel cannot operate – see

Eastern Cape Provincial Government and Others v Contractprops

25 (Pty) Ltd 2001 (4) SA 142 (SCA) paras 11 and 12.

[19] As far as the declarator is concerned it must follow from the finding that

the tender process was flawed, that the applicant’s acceptance of the

proposals submitted by the six respondents and the applicant’s award

of the tender to the six respondents were null and void and of no force

or effect. As already mentioned a declarator is an appropriate remedy

– see Municipal Manager: Qaukeni v FV General Trading CC 2010

(1) SA 356 (SCA) para 26. The applicant is therefore entitled to the

declarator which it seeks. This will also have an impact on the issue of

unreasonable delay which must now be considered.

[20] The respondents’ approach is that the delay which must be considered

is from 14 November 2008, when the decision was taken to award the

tenders, until 18 May 2010, when this application was launched (i.e. a

period of 18 months). It seems to me that this is not correct. Until

February 2009 the applicant clearly proceeded in the belief that it was

acting properly in terms of a lawful process. It only became aware that

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the tender process was flawed when it received counsel’s opinion at

about the beginning of August 2009. Thereafter the applicant complied

with its internal procedures before the application was launched. On

20 November 2009 the applicant’s Executive Committee submitted a

recommendation to the applicant’s Board of Directors for approval to

set aside the award of RFP0101/2007. This recommendation

incorporated a summary of counsel’s opinion: that once the validity

period of the proposals had expired with no extension of the period

being arranged before the expiry of the validity period, there were no

valid bids in existence and an award could not be validly made. The

applicant does not say what the Board of Directors decided on that day

and correspondence ensued about the delay in finalising the tender. At

the end of January 2010 the applicant informed the Public Protector

that the Board of Directors’ approval of the Executive Committee’s

recommendation of 20 November 2009 was still awaited. In a letter

dated 13 May 2010 the applicant informed the first respondent’s

attorneys that it intended to apply for the review and setting aside of

the award of the tender. From another letter dated 13 April 2010 it

appears that by then the applicant’s Board of Directors had resolved to

review its decision to award the tenders and that the applicant was

already preparing the application. The applicant eventually issued the

application on 18 May 2010.

[21] In the light of these facts the applicant contends that there was no

unreasonable delay in instituting these proceedings. In argument the

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applicant’s counsel readily conceded that there are gaps in the

narrative but contended that the applicant is a very large organisation

and that ‘it takes a long time to turn such a big ship around’. I do not

agree. There is no factual basis for the contention that it would take a

long time for the applicant to reverse a decision previously taken. On

the face of it all that was required was a recommendation by the

applicant’s Executive Committee to the applicant’s Board of Directors

and once the Board of Directors had taken its decision the papers

could have been prepared. In my view once the applicant had received

counsel’s opinion that the tender process was flawed the applicant’s

Board of Directors could have taken the necessary decision and the

application could have been prepared and launched within a period of

about two to three months. A period of 10-12 months is obviously

unreasonable.

[22] The question which remains is whether this unreasonable delay should

be overlooked. In my view it should. The applicant is seeking to avoid

the consequences of an unlawful tender process where no final

agreement has been concluded and no party is acting pursuant

thereto. As already pointed out where the tender procedures had not

been complied with the applicant is duty bound to apply to set aside

any resulting contract and not to submit the enforcement of any such

contract. The applicant is entitled to a declarator to the effect that the

acceptance of the proposals submitted by the six respondents and the

award of the tender to the six respondents were null and void and of no

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force and effect. It would therefore make no sense to refuse the relief

sought in the review part of the application. I am mindful of the fact

that the first and fifth respondents allege that they will suffer financial

prejudice because of the delay in finalising the tender but these

allegations are not convincing: there are no facts to support them. In

my view the principle of legality must prevail.

[23] The applicant is therefore entitled to the substantial relief sought in its

amended notice of motion.

[24] With regard to costs the applicant is not entitled to the costs of the

whole founding affidavit. These papers run to 566 pages and include

many documents which were not relevant to the case which the

applicant sought to advance. In my view the founding affidavit should

not have exceeded 200 pages and the costs of the remaining papers

must be disallowed.

[25] All the parties employed senior counsel although only the applicant

employed two counsel. It was not argued that the applicant is not

entitled to the costs of two counsel and in my view it is. The issues are

of sufficient importance to warrant the employment of two counsel.

[26] With regard to the related application the fifth respondent’s counsel

conceded that the court could not grant the relief set out in prayer 1 of

the notice of motion for the simple reason that the application was

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brought too late. A further reason was that there was no evidence that

the decision sought to be reviewed and set aside was taken. As

already mentioned the parties agree that if the applicant is granted

substantive relief the related application must be dismissed.

[27] The following orders are made –

I In the main application under case number 27974/2010:

(1) The applicant’s decision taken on 14 November 2008 to

accept the proposals submitted by the six respondents in

terms of RFP0101/2007, and the award of

RFP0101/2007 to the six respondents as communicated

to them in the applicant’s letter of 5 December 2008 are

reviewed and set aside;

(2) It is declared that the applicant’s acceptance of the

proposals submitted by the six respondents in terms of

RFP0101/2007 and the award of the tender

RFP0101/2007 to the six respondents is null and void

and of no force and effect;

(3) The first and fifth respondents are ordered to pay the

applicant’s costs of this application, jointly and severally,

the one paying the other to be absolved, such costs to

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include the costs consequent upon the employment of

two counsel but to exclude the costs of preparing 365

pages of the founding affidavit and annexures.

II In the related application under case number 25945/2010:

(1) The application is dismissed with costs, such costs to

include the costs consequent upon the employment of

two counsel.

_______________________B.R. SOUTHWOOD

JUDGE OF THE HIGH COURTCASE NO: 27974/2010

HEARD ON: 18 November 2010

FOR THE APPLICANT: ADV. N.G.D. MARITZ SC ADV. L.A. RETIEF

INSTRUCTED BY: Maluleke Msimang & Associates

FOR THE FIRST RESPONDENT: ADV. J. MARAIS SC

INSTRUCTED BY: Macintosh Cross & Farquharson

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FOR THE FIFTH RESPONDENT: ADV. L. HALGRYN SC

INSTRUCTED BY: Jacobson and Levy Inc.

DATE OF JUDGMENT: 7 January 2011CASE NO: 25945/2010

HEARD ON: 18 November 2010

FOR THE APPLICANT: ADV. L. HALGRYN SC

INSTRUCTED BY: Jacobson and Levy Inc.

FOR THE FIRST RESPONDENT: ADV. N.G.D. MARITZ SC ADV. L.A. RETIEF

INSTRUCTED BY: Maluleke Msimang & Associates

FOR THE SIXTH RESPONDENT: ADV. J. MARAIS SC

INSTRUCTED BY: Macintosh Cross & Farquharson

DATE OF JUDGMENT: 7 January 2011

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