---

REPUBLIC OF SOUTH AFRICA

THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

 Case No: 2017/7509

Reportable: No

Of interest to other judges: Yes

Revised.

30/3/2017

In the matter between:

BIDVEST PROTEA COIN (PTY) LTD	Applicant
and
AIRPORTS COMPANY OF SOUTH AFRICA SOC LTD	First Respondent
VENUS SECURITY SOLUTIONS (PTY) LTD	Second Respondent
MAFOKO SECURITY PATROLS (PTY) LTD	Third Respondent
FIDELITY SECURITY SERVICES (PTY) LTD	Fourth Respondent
RESHEBILE AVIATION AND PROTECTION SERVICES (PTY) LTD	Fifth Respondent
BOSASA SECURITY (PTY) LTD	Sixth Respondent
SECURITAS SPECIALISED SERVICES (PTY) LTD	Seventh Respondent
G4S AVIATION SECURITY (SA) (PTY) LTD	Eighth Respondent
CHECKPORT SA (PTY) LTD	Ninth Respondent

JUDGMENT

HEADNOTE

Urgent application for interim relief by way of designating the applicant, a security provider, as a member of a panel of security providers authorised to undertake security services at SA airports on behalf of other service providers who operated on the premises of airports operates by ACSA, pending a review of the decision by ACSA to not select the applicant, in a competitive process, as one of several providers for a five-year term 

Common cause that applicant was top scoring loser for selection to a panel of 8 providers - applicant’s case premised on two providers selected by ACSA being wrongfully selected because they failed to meet the specifications prescribed and had made false representations to procure selection – one such provider alleged to have forged a certificate from the industry provident fund, the other alleged to have misrepresented that its members were covered by the provident fund

The prima facie case of fraud and misrepresentation meriting their disqualification was strong and the prospects of success in achieving a setting aside of their selection on review were equally strong

Applicant contending that ACSA, having committed to a panel of 8, would have to select the applicant once the two disqualified providers’ selection had been set aside, as it was the top scoring loser – in the circumstances a likely outcome

Urgency and irreparable harm were present because the period during which service providers requiring security service would be seeking to conclude 5 year contracts was imminent, and if excluded, the applicant would be shut out for five years from the closed market, and in particular, would not even be able to contract with its filial companies in the Bidvest Group – the extinction of the business enterprise of aviation security was seriously threatened and in consequence the wholesale retrenchment of the workforce of some 750 persons

Parties in agreement that the notion that mere economic or financial harm not being sufficient to establish urgency was an exaggeration – ACSA contention that on the facts this was not a suitable case to grant relief rejected

Held: the necessary requirements for interim relief were met – order granted

Quaere: was this a case where the threshold test to set aside a decision of an organ of state (which ACSA was) as stipulated in Gool v Minister of Justice and commented on in Outa applied ? – whether the decision was, on the facts, properly characterised as an administrative decision pursuant to a statutory power or a principally commercial decision made pursuant to the fulfilment by ACSA of its stutory obligations to ensure appropriate security was provided at Airports in terms of the National Key Points Act-

Held: that the selection of a limited number of security providers was not the exercise of a statutory power as envisaged by Gool or Outa and the higher threshold did not apply

Quaere: because the decision was not a procurement decision as envisaged in section 217 of the Constitution, despite resembling such a decision in some respects, it was not obvious that section 217 applied

 

Sutherland J

Introduction:

[1] An urgent application for interim relief has been brought by the applicant (Bidvest[1]) pending a review of decisions taken by the first respondent (ACSA). The nub of the dispute is whether Bidvest should be granted a concession (sometimes called a licence) by ACSA. The concession is in effect a permission to conclude contracts for security services with entities that render services at airports. Such a permission follows on an accreditation process in which ACSA ascertains the suitability of private security contractors to meet various standards.  These concessions are granted for five year terms. The 2012-2017 term ends on 31 May 2017, and new selections have been made for 2017-2022.  ACSA has chosen to limit the accreditations to 8 service providers; the previous term had 9 accredited service providers. Bidvest was one of the nine. Bidvest lost out on the selection for 2017-2022. Bidvest alleges that irregularities occurred in the applications of two of the respondents; ie the third respondent (Mafoko) and the fifth respondent (Reshebile). The irregularities should, so it is alleged, result in the disqualification of both.  Bidvest alleges that upon such disqualification, it is a most likely candidate for selection. The review court shall be asked to either select Bidvest or direct ACSA to select it for the next term of five years.

[2] The form of the urgent interim relief, pending the review, is to either grant to Bidvest a concession as the 9^th service provider, or extend the old concession beyond 2017. In one or other fashion, this would mean that (subject to a reversal in the pending review) Bidvest would be able, in the interim, to compete with the other eight for contracts.

[3] The relief is for an interim interdict and Bidvest must therefore satisfy the usual requirements of a prima facie right, threatened by irreparable harm absent the relief, no alternative effective remedy and the balance of convenience in its favour.[2] In addition, the question of the status of ACSA’s decision-making about the selection of security service providers is raised; is it a statutory power being exercised, and if so, does the elevated threshold to justify interference by a court apply, as contemplated in the decisions in Gool v Minister of Justice 1955 (2) SA 682 (C)at 688F and in National Treasury & Others v Opposition to Urban Tolling Alliance & Others 2012 (6) SA 201 (CC) (The Outa case) at esp [26] and [44]. In applications for interim relief pending a review, in Pikoli v President, Republic of South Africa 2010 (1) SA 400 (GP) at 404 it was held that:

“When considering whether to grant or refuse an interim interdict, the court seeks to protect the integrity of the proceedings in the main case. The court seeks to ensure, as far as is reasonably possible, that the party who is ultimately successful will receive adequate and effective relief. The court itself has an interest to ensure that it will ultimately be in a position to grant effective relief to the successful party.”

[4] The several elements are addressed in turn.

 

The context in which the controversy arose

[5] The accreditation process commenced on 13 July 2016 with the publication of a request for bids (RFB). Bidvest was one several bidders. On 6 October 2016, the names of 6 successful bidders was announced; two places were unfilled. Included among the successful were Mafoko and Reshebile.  However, prior thereto, on 26 September 2016, Bidvest had been told it had been disqualified because its bid was not compliant with the formalities required. Bidvest disputed the non-compliance.

[6] After the selections, the 8^th respondent (G4S) launched an urgent application to have its bid re-evaluated. ACSA acquiesced and on 6 December 2016, ACSA called for bids to fill the remaining two places and invited the several losers, including Bidvest to reapply. The invitation was limited to the failed bidders, an aspect that has implications for the propriety of challenging decisions made in round one.  Bidvest did reapply. The aspects of its first bid that were perceived to be non-compliant were now resolved, and the second bid did not differ in substance from that of its first bid, although it is fair, as ACSA states, that Bidvest supplemented its bid by clarifications.

[7] There were two issues to clarify. The first had to do with a compliance certificate from the the Private Security Industry Regulatory Authority. (PSIRA). The initial information supplied by PSIRA about Bidvest was that it was non-compliant. This was incorrect. However, when ACSA queried the point, one Jordaan of Bidvest, failed to respond, creating the impression that ACSA’s request for clarification had been ignored.  Jordaan’s excuse was that his computer was stolen and he did not catch-up on emails until it was too late. The veracity of the excuse is unimportant; ACSA is not be faulted for drawing the adverse inference on the strength of the information it had to hand.  The second issue was more complex and has two legs. The RFB called for the last three years audited financial accounts. The business of aviation security that is located in the corporate entity ‘Bidvest Protea Coin (Pty) Ltd’ was an amalgam of companies acquired by the Bidvest Group from Coin, another operator in years past, and the business had been transferred as a going concern from one corporate entity to another within the Bidvest Group. As a result, the recent history was a smorgasbord of transactions and absent an awareness of this history, a source of confusion. The last three years’ financial accounts could not presented as a neat coherent package. ACSA’s inability to appreciate this without a full description of the relevant events was understandable. If anything, Bidvest stands to criticised for not anticipating that confusion in advance. As a result, ACSA saw Bidvest as non-compliant. However, the controversy is amplified by the question of whether the RFB made the accounts a mandatory requirement. Bidvest says it was not, and indeed the relevant text of paragraph 5.1 which addresses a list of mandatory requirements makes no reference to such accounts. (In my view, Bidvest is on strong ground to dispute the view taken by ACSA that it was mandatory) In round two, ACSA did not insist on this point.)

[8] On 17 January 2017, the results of round two were announced. Bidvest was not selected. Bidvest was told it lost because it scored less than the two bidders, the 8^th respondent (G4S) and the 9^th respondent (Checkport) who were selected. Bidvest adopted the view that it must have been in the top ten, a stance later vindicated. (In ACSA’s Answering affidavit, it was subsequently revealed that Bidvest came third in the second round; ie, the top scoring loser.)

[9] Bidvest’s perception of its ranking was critical to its further course of conduct. The application launched by Bidvest sought to establish that Mafoko and Reshebile were both wrongly selected in the first round, and upon that premise Bidvest would at worst, be ranked as number 8 and, objectively, be entitled to selection. This is the proposition upon which the Bidvest review case is founded. The procurement of an interim licence or concession is thus dependent on there being prospects of establishing the fact of the irregularities and the probability of Bidvest being promoted into contention for one of the two leftover places.

[10] ACSA takes the stance that having acquiesced in round one by participating in round two, there ought to some sort of waiver or estoppel against challenging the outcome of round one. Superficially, that proposition looks attractive. However, it ignores the true nature of the developments. Round two cannot be construed as a separate bidding process. It was after all open only to the failed bidders from round one. It was embarked on, first, in response to the G4S application, arising from a complaint about round one, and, second, on the probabilities, it would have been necessary, anyway, to fill the two vacant places. ACSA itself describes round two as piggy-backing on the evaluations in round one. The grievances of the losers were not abandoned in the elongation of the process. In my view, a holistic assessment of the circumstances cannot justify disaggregating the two rounds.

 

The allegations of irregularities concerning Mafoko and Reshebile

[11] The critical allegation against Mafoko and Reshebile is that they were not compliant with the RFB peremptory requirement to produce, at the time of lodging a bid, a certificate of good standing from the Private Security Sector Provident Fund (PSSPF). The RFB prescribed in paragraph 5.1:

“ACSA will disqualify from the process any bidder that has failed to submit mandatory returnable documents and information on the closing date and time…. The mandatory documents and information are as follows:

…..

Valid letter of good standing from provident fund (full compliance with the provident fund (copy of the Private Security Sector Provident Fund compliance certificate or any approved provident fund compliance certificate) (sic)

….”

[12] Bidvest alleged neither was in good standing, and thus they could not have submitted the requisite certificate.  In alleging this ‘fact’ Bidvest relied on a letter from Soonder Incorporated, the attorney of PSSPF, dated 29 November 2016. (ie the allegation was made before the invitation to bid in round two). Soonders categorically denied on behalf of PSSPF that the fund had issued to either Mafoko or Reshebile a certificate of good standing. Moreover, it was stated, importantly, that as at 12 August 2016, neither were compliant, which meant that it was impossible to have submitted certificates with their applications. However, when ACSA answered, it alleged both Mafoko and Reshebile had indeed complied. It attached the documents received by it to prove ‘compliance’. The disclosure of these documents in purported compliance then became the focus of controversy.

 

In re Mafoko

[13] Bidvest replied by attacking the document submitted by Mafoko as a fraud. The document per se was said to be deficient for want of a serial number.  The document was dated 8 August but the stamp on it was 1 August 2016, a self-evident anomaly. It purported to have been signed by the principal officer of the fund, Mzwandile Zibi, who swore to an affidavit denying he had signed the document. Even more damning, Zibi set out details to show that a certificate of good standing could not have been legitimately issued because, as a fact, Mafoko was not in good standing and had been in default as far back as July 2016. In particular, Zibi flatly contradicts the document’s assertion that payments due on 8 August were made, and states that they were not made.

[14] ACSA then, in a ‘replication’ affidavit alleged that it had checked the validity of the document. One Mhlongo of ACSA telephoned one Thai, of PSSPF. The date is not mentioned. After the initial call, further discussions took place on Thai’s cell. No affidavit was forthcoming from Thai.  In addition, Mafoko was asked for an explanation. Again, it is not stated when this supposedly occurred, save it was after Soonder’s letter which apparently provoked the enquiry. Mafoko then admitted to ACSA that it was in default with PSSPF and had concluded an Acknowledgement of Debt (AOD) which it was ‘servicing’. The notion advanced, by implication, is that this hitherto undisclosed fact, of no little importance, somehow overcame the problem. Ostensibly, ACSA, with no apparent appreciation of its significance, accepted the explanation.

[15] In a supplementary relying affidavit, Bidvest then exploded that explanation as false. Again, Zibi on affidavit testified that Makoko signed the AOD in March 2016, and remains in default with current contributions. A schedule of the account of Mafoko with PSSPF was attached, bearing out the allegations of default since March 2016. In addition, Zibi points out that the very format of the document submitted to ACSA is inconsistent with a computer-generated document, replete with serial number, which is said to be the sole manner in which such certificates ware produced. Moreover, any employer who has an AOD will not be issued a certificate of good standing. Hence, so it said, the document is a fraud. Thai is recognised as an employee of PSSPF with no authority in respect of the issue of certificates. The appropriate contact person to enquire about certificates is the Compliance officer, Thabisa Mokheti.

[16] Mafoko’s affidavit, denies, without substantiation, that it is in arrears. It claims it dealt with a compliance officer to procure the document. Who that person is, is not stated.  The weakness and evasiveness of the allegations is manifest.

[17] In my view, it is difficult to imagine a stronger case for non-compliance and fraud.  Absent revelations of an unimaginable nature, the probabilities that Mafoko is headed for disqualification, and perhaps worse, seem overwhelming.

[18] ACSA complains that the case of Bidvest has evolved illegitimately through the exchange of affidavits and it ought to be held to the case it made out in the founding affidavit. The complaint is mistaken. The Bidvest case is that Mafoko was not compliant; the evidence of the fraud that emerged was rightly addressed in that context, and was provoked by the assertions in answer that rightly called for a rebuttal. What is truly an oddity, is ACSA’s stout defence of Mafoko in the face of these facts, an aspect which has implications for the relief likely to be granted in the review.  These characteristics distinguish this case from the mischief addressed in Gidani (Pty) Ltd v Minister of Trade and Industry & Others (Unreported; 2014/81420 (GP) 9 December 2014 per Tuchten J) at [17] – [18] which I was encouraged to follow. In that case, new grounds were contrived from the facts adduced in answer which it was considered presented a case that respondent had no notice of and had not answered to address them.[3] In the present case that sort of problem does not arise. The evidence later adduced served to substantiate the initial cause of action; ie non-compliance.

 

In re Reshebile

[19] ACSA’s answer confirmed that no certificate of good standing had been submitted by Reshebile. However, a certificate emanating from the Security Employees National Provident Fund (SENPF) was exhibited to show Reshebile had complied, relying on the text of paragraph 5.1 of the RFB (cited above) as to ‘any approved provident fund certificate’. This SENPF document, dated 10 August 2016, recorded that Reshebile had 821 members of that fund in June 2016. This morsel of information then provoked another controversy.

[20] Reshebile itself answered the allegations made by Bidvest. It asserts that it has a PSSPF certificate, despite the Soonder allegation that there is no such certificate. Reshebile do not exhibit it. Instead, it invokes the supposed disjunctive text of paragraph 5.1 of the RFB to allege (with ACSA) that such alternative fund certificate met the requirements. Moreover, it relies on the idea that if ACSA wanted more, it was under an obligation to ask for it.

[21] Reshebile then addresses another point of importance, the impact of the provisions of the Security Sector Determination.[4] This determination makes it compulsory for security operators to belong to the PSSPF, save that certain employers, in terms of a grandfather clause, are exempted. The contention is advanced by Reshebile that the exemption clauses are unconstitutional because they promote uncompetitive conduct. By inference, Reshebile concedes that it does not have an exemption, indeed it did not exist when the class of employers with vested rights was ring-fenced. Why this argument is thought necessary if Reshebile is a member of PSSPF and in good standing is obscure. The failure to produce the certificate from PSSPF, which it claims to exist ,and Spoonders denial that it exists, warrants an adverse inference against Reshebile.

[22] An additional controversy to which both Reshebile and ACSA make themselves party is the interpretation of the RFB stipulation. The problem is this: if it is compulsory to belong to PSSPF (unless exempted) and Reshebile is not exempt, how could the RFB be understood to be satisfied by an employer not proving it is a member, which would imply that the employer is in contravention of the determination? Could it be seriously be believed that the RFB be read to be satisfied in such a way that employers who breach peremptory statutory requirements are fit to be included in the selections when the very purpose of the accreditation process is to weed out all but the best in the field? If there is a prudent interpretation that could support that outcome it has not been advanced in these proceedings. Instead, what is argued is that ACSA’s RFB is disinterested in such a matter which ought to be the subject of other proceedings. This line of argument is, in my view, astonishing.

[23] There is a further complication. This is the mandatory requirement of the RFB to be able to deploy not less than 1000 officers.  Obviously, the SENPF certificate referring to 821 does not support that requirement having been satisfied.   But the question of staff numbers is not addressed only there.  Reshebile submitted a certificate from the Private Security Sector regulatory authority (PSIRA) dated 18 May 2016. The certificate is valid for the period to 16 August 2016. This document declares that Reshebile has 3129 registered and active members. If so, what is the position regarding the provident fund needs of the 2308 members who are not members of SENPF? This constitutes 73.7% of the staff. Are these persons members of PSSPF? If so, why offer a SENPF certificate for 26% of the staff? Moreover, given the very objective of the requirement in the RFB, why did not the officials of ACSA apply their minds to whether the cover was indeed in place and adequate? Even more astonishing is why in the light of the allegations, ACSA has not demanded sight of the certificate Reshebile says exists but Soonders and the PSSPF deny exists? Instead ACSA mounts a substantive defence of a plainly nonsensical attitude adopted by Reshebile. This attitude of blind loyal support provokes suspicions about ACSA’s true motives and its ostensibly infantile responses to defects and shortcomings in the applications received in the process.

[24] In my view, the case of Reshebile to demonstrate compliance is shaky and its omission to make full disclosure pours doubt on its bald denial that no certificate exists. Even if the text of the RFB can be read in the way ACSA claims to believe it can be read, the failure to verify the provident fund position of the whole staff is wholly inadequate and is likely to be severely criticised in the review. This is the real significance of the information derived from the two documents, rather than the failure to be able to deploy 1000 officers.

 

Conclusions

[25] Given the traverse of the relevant facts and allegations, in my view a prima facie case to disqualify both these bidders is strong.

 

What are the consequences of disqualification of Mafoko and Reshebile on Bidvest’s interests?

[26] Once the two non-compliant bidders are expelled, self-evidently, there shall be two vacant places. What are the probabilities that Bidvest shall fill one of those spaces?

[27] The argument advanced is that as the top scoring loser the odds must be excellent. Those odds are excellent on two scenarios. First, ACSA, voluntarily or under compulsion by a court order, selects the next two best candidates. Second, a third round is opened in which the likelihood of a fair evaluation means the top scoring loser must be the favourite. This seems a fair prognosis. ACSA having publicly committed to 8 concessions in paragraph 3.1 of the RFB can hardly backtrack on that without sparking suspicion about ulterior motives.

 

What need is there for interim relief?

[28] The question of the utility of interim relief and urgency are bound together. The urgency is triggered by the fact that the new concession term begins on 1 June 2017. Obviously, entities that require security services shall in the intervening two months from now be seeking to conclude contracts in advance of that date. It is suggested that there is a rush to meet a 31 March prudential deadline, a not improbable target date.

[29] Unless Bidvest obtains a permission now, it shall be unable to bid for work for the period after 31 May. If the review takes longer than two months to reach finality, a not unlikely prospect, Bidvest will be shut out of this field of work in some respects for as long as five years. It is indeed problematic whether any arms-length contracts are likely to be concluded when the risk of having to unwind the contract may eventuate, should the review not result in Bidvest obtaining a concession permanently for the next term. However, some 40 % of its existing clients are companies in the Bidvest Group, who on the probabilities will do so. Even if these companies concluded short term contracts with strangers in the expectation of concluding a longer contract later with Bidvest, it is rightly said that they are unlikely to do deals on that basis for less than a year, thus excluding Bidvest for at least that time. The prospect of Bidvest mitigating the loss of business is slim because the entire aviation security field is a closed market. The idea that it could redeploy staff in other security fields quickly enough, if at all, to minimise retrenchments is speculative; still less, maintain a capacity to compete in the aviation security market when the review is concluded in its favour and it can resume business.

[30] Accordingly, the plight in which Bidvest finds itself is plain.

[31] In my view, the urgency of relief is established. It was argued that all that is at stake is financial loss. It was conceded on behalf of ACSA that not every case involving financial distress must be denied a case for urgency and that no general rule excludes that factor from justifying urgency, depending upon all the relevant circumstances.[5]  However, it is argued that these circumstances do not satisfy the threshold. I disagree. The case made out is financial ruin for the entire aviation division of the business, and an inability to even do business with filial companies. The retrenchment of many workers shall follow. The riposte is offered that only 3% of the workforce shall be affected, some 650 people.  Apart from that being cold comfort to their families, it seems to me to be a relevant factor, and although such a consequence cannot always be avoided, it must be weighed. This matter is not merely a case of a creditor pursuing a debtor. The dynamics of the dispute are not correctly described by trying to reduce it to such a set of circumstances. On a holistic basis, the need for urgent relief is established.

[32] The argument about dilatoriness by Bidvest is not sound. The conduct of the parties has been fully traversed. The principal explanation for the course of conduct of Bidvest is the paucity of relevant information disgorged by ACSA, whose approach was not transparent. Moreover, the advent of round two, precipitated as much by an urgent application by the 8^th respondent (G4), as any other reason, shifted the need to pursue the irregularities, alleged to have been committed by Mafoko and Reshebile. These irregularities were already known at that time by Bidvest and ACSA. But for the second round, the course of events may have taken a different path, like that adopted by G4S. Had Bidvest, in the face of round two, nevertheless gone to court, it might have, itself, faced an argument that it was acting prematurely. Allowing ACSA an opportunity to repair alleged damage cannot be equated to dilatoriness.

[33] What ‘right’ might Bidvest invoke that has been irreparably harmed if no interim relief is granted? It is rightly argued that no legitimate expectation, still less a right, exists to a renewed concession per se. However, as a bidder, Bidvest is entitled to fair treatment in what is, supposedly, an even playing field. To allow non-compliant bidders to pip compliant bidders in a competitive process is intolerable. The implied undertaking by ACSA to select the top scorers is plain. ACSA must honour that undertaking.

[34] The absence of alternative effective relief is self-evident. The only contention to the contrary is an expedited review hearing. It is far from obvious that those proceedings shall be over within two months. ACSA has taken no steps to approach the judge president to set that in motion. Moreover, access to the market is required now, not on the eve of 31May.

[35] The balance of convenience is plainly in favour of Bidvest. Its prejudice is self-evident. ACSA suffers no inconvenience whatsoever. To have a 9^th security provider for the foreseeable future does not inhibit any requirement it might have. As 9 providers were in play for the past five years, that fact illustrates precisely that. If airport service providers do not want to use Bidvest that shall be of no account to Bidvest. If they do, and have to change later, there is no reason why the transition cannot be prudently managed. A hiatus is extremely unlikely. The review court shall, if the need arises, give directions, in the same vein that it shall give directions about how to unwind the contracts that Mafoko and Reshebile have concluded or may conclude before the review, should it hold, as is likely, that Mafoko and Reshebile ought to be disqualified. The notion that a temporary contract will be disruptive is unfounded. In the ordinary course, if an airports service provider become discontented with its security service, it may for good cause cancel the contract, precipitating exactly the same issue of a transition to a new contractor.

[36] The notion that relief in the form sought is in effect final relief is incorrect. Nothing by way of a contract concluded now cannot be unwound.

 

Is ACSA exercising statutory authority?

[37] It was argued that Outa applies.[6] The proposition is that to interdict the exercise of a statutory power is exceptional and that caution is to be exercised in trespassing into the realm of the statutory decision maker, thereby violating the proper separation of executive and judicial authority.

[38] ACSA exists by virtue of the Airports Company Act 44 of 1993 (ACSA Act). It is established as a public company having a single shareholder, the state. As such it is an organ of State, and is listed, among other entities, in schedule II to the Public Finance Management Act 1 of 1999 as a ‘major public entity’.

[39] ACSA’s functions are set out in section 5.[7]  Nothing is there stated about security per se. Still less is there any provision in the ACSA Act which regulates who may render security services or upon what terms. The decision to restrict the number of security providers and impose conditions for accreditation is thus not the type of decision taken by a Minister of State or a regulatory authority, which was the burden, respectively, of Gool and of Outa.

[40] It was argued that the security steps are taken by ACSA pursuant to duties imposed on ACSA as the owner of the airports in terms of section 3 of the National Key Points Act 102 of 1980.[8] The very fact that ACSA is the owner of the airports and not a regulator is significant. Because airports are such key points, certain duties as to security are imposed on the owner. But this is a statutory duty owed by ACSA, rather than an enabling injunction conferring on ACSA statutory regulatory powers over security providers.

[41] Section 5(g) of the ACSA Act refers to the “[taking of] all the necessary steps to facilitate the exercise of any power or the performance of any duty by any department of State at a company airport in terms of any law”. However, the accreditation process does not flow from any such power.

[42] Accordingly, there is no justification to be found for treating the decisions of ACSA about the panel of security providers as if it was exercising regulatory functions in doing so. No statute would be transgressed if ACSA allowed a free for all in the market for aviation security services. ACSA’s motives for imposing this process are addressed in these papers, and insofar and any inference may properly be made, the motives to impose the accreditation system derive from principally business considerations. Airport security is obviously sensitive and critical to the safety of everyone. The idea of restricting the panel to 8 operators is said to be to ease the burden of monitoring by ACSA, and no less significant, to create opportunity for fewer operators to share more of the available commercial pot.

[43] I was referred to the decision in Airfrance-KLM SA and another v SAA Technical SOC Ltd [2016] ZAGPPHC 877. It is contended that that decision which applied the Outa test should be followed. That case was about a tender to supply aircraft components, and the discretion exercised by the decision maker in choosing with whom to contract for services to be rendered to it. An evaluation committee had recommended Air France but the Board of the respondent chose another bidder, influenced chiefly, by considerations of price. The present case is not that kind of case. No conventional ‘contract’, in the usual sense that term is employed, comes into being in consequence of the grant of the concession or licence, rather it is an authorisation to do business on ACSA’s property subject to certain terms. ACSA has chosen to sieve the possible security providers and award the most meritorious exclusivity for a term.

[44] ACSA is not conducting a procurement process, as ordinarily understood. It is not apparent to me that section 217 of the Constitution necessarily applies to this accreditation process, albeit that the matter was argued on the basis that it could.[9]  It could be expected that the ethical norms stipulated in that section ought to be followed, whether it applied or not, but it is unnecessary to decide the question.

[45] In any event, the injunction in Outa is to exercise caution, not allow a statutory body or other organ of state to enjoy a margin of capriciousness in its dealings.[10] Even were Outa were to be applicable, I am of the view that the test is satisfied, given the egregious consequences which the interdict is sought to avoid and the absence of inconvenience or intrusion that shall follow.

 

Conclusions

[46] Accordingly, the application should succeed.

[47] As to the form of the relief, the model of a temporary permission on all fours with the current selectees is preferable to an extension of the old and expired permission, to avoid the possibility of some nuanced distinction between the terms and conditions imposed for 2017 – 2022 and those for the previous term.

[48] Mafoko filed an answer but did not participate in the proceedings in terms of an agreement between it and Bidvest, choosing to abide the outcome in part A of the matter.  Reshebile filed an affidavit too, and Counsel was present to observe but did not participate, reserving for itself the opportunity to do so in part B.

[49] The costs of this application ought to be costs in the review.

 

The Order

1. The applicant is awarded, pending the outcome of a review application pursuant to part 2 of the relief sought in the notice of motion, a licence or concession to provide security services at airports operated by the first respondent.

2. The licence or concession shall be on the same terms and conditions as those granted to other respondents, save for its interim character, and as such, the applicant shall be one of nine authorised service providers of security services.

3. The costs of this application shall be costs in the cause of the review proceedings.

 

___________________________

Roland Sutherland

Judge of the High Court,

Gauteng Local Division, Johannesburg

 

Heard: 24 March 2017

Delivered: 30 March 2017

 

For the Applicant:

Adv Matthew Chaskalson SC, with him

Adv Katherine Harding,

Instructed by Baker McKenzie

Ref: J Bell

For the First Respondent:

Adv Ngwato Maenetjie SC, with him,

Adv Mkhululi Stubbs,

Instructed by Bowmans,

Ref: W Mandlana

 

---