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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG LOCAL DIVISION,

JOHANNESBURG

CASE NO: 33992/2019

In the application for leave to appeal and the application in terms of section 18 (2) and (3) of the Superior Courts Act 10 of 2013:

TFM INDUSTRIES                                                          First applicant/ Second respondent

CITY OF JOHANNESBURG

METROPOLITAN MUNICIPALITY                                 Second applicant/ First respondent

And

MARCÉ PROJECTS (PTY) LTD                                          First respondent/ First applicant

MARCÉ FIRE FIGHTING TECHNOLOGY

(PTY) LTD                                                                  Second respondent/ Second applicant

 

JUDGMENT

 

MODIBA J:

INTRODUCTION

[1] On 18 November 2019, I granted an interim interdict against the further implementation of a tender the City of Johannesburg (“the City”) awarded to TFM Industries (“TFM”) for the supply of fire-fighting fleet, pending the review of the tender. TFM applies for leave to appeal that order to the Full Bench of this division. TFM and the City also apply for a suspension of the interim order in terms of section 18 (2) and (3) of the Superior Courts Act[1] (“section 18 application”).

[2] The detailed background facts to the dispute between the parties are set out in reasons for the interim interdict furnished to the parties on 17 December 2019 (“the judgment”). Therefore, I will not regurgitate them here.

[3] For convenience, I use the same nomenclature for the parties as used in the judgment. 

[4] I heard argument in respect of both applications in tandem. I therefore hand down one judgment in respect of both applications.

[5] I first deal with the application for leave to appeal because the launching of this application is the jurisdictional basis for the relief in terms of section 18(2) and (3). If I dismiss it, the section 18 application becomes incompetent because the jurisdictional foundation upon which it is based falls away.

 

THE APPLICATION FOR LEAVE TO APPEAL

[6] The issues that arise in respect of this application are:

[6.1] whether the interim interdict is appealable. If it is,

[6.2] whether there are prospects of success on appeal.

[7] It has become trite that the inflexible common law test for the appealability of interim orders, colloquially referred to as the Zweni test, has become a thing of the past. Previously, such an order would only be appealable if it has a final effect, is definitive of the parties’ rights or dispositive of a substantial part of the relief claimed in the main application.[2] Influenced by the interest of justice test in Khumalo Constitutional Court[3], the Supreme Court of Appeal, subsequently affirmed by the Constitutional Court in many other cases that followed, has since held that these factors are not exhaustive.[4] The interest of justice test has become the cardinal test in such applications. There is no definite standard for this test. What is in the interest of justice in any given case depends on its peculiar facts.

[8] Expounding on this test in OUTA[5], the Constitutional Court said the trite factors in Zweni remain an important and relevant consideration but are not decisive. In each case, what best serves the interests of justice dictates whether an appeal against an interim order should be entertained. It further postulated the following considerations:

[8.1] when determining what the interests of justice require in each case, the court must have regard to and carefully weigh all the germane circumstances;

[8.2] it is important to assess whether the temporary restraining order has an immediate and substantial effect, including whether the harm that flows from it is serious, immediate, ongoing and irreparable;

[8.3] whether the temporary restraining order would unduly trespass upon the sole terrain of other branches of government even before the final determination of review grounds;

[8.4] whether deciding an appeal against the interim order, the appeal court would usurp the role of the review court.

[9] During argument, to persuade this court that the interim interdict is appealable, counsel for TFM placed heavy reliance on ACSA[6], where the Full Court set aside an interim interdict restraining ACSA from permitting the successful bidder to continue to erect a perimeter fence at the East London Airport pending the finalization of a review application. Arguing that this case is on all fours with ACSA and for that reason, this court should find that the interim interdict is appealable, he specifically placed reliance on paragraphs 6, 8 and 9 of the judgment where the Full Court said:

‘[6] The argument on behalf of the appellant is that the interests of justice dictate that this appeal should be entertained. The reasons being that (i) the order of the court below trespasses into the sole terrain of the executive branch of government that procure goods and services and (ii) it prevents the appellant from complying with the aviation security regulations that require the assets, aircrafts and passengers at the airport to be protected. It was argued that without the airport being fenced, the security at the airport is under threat and as such, forces the appellant to erect a perimeter fence on an ad how basis and at a higher cost.’

[8] It is not in dispute that the appellant is currently erecting a perimeter fence around the airport on an ad how basis and at high costs [sic], thereby experiencing overspending of public funds. This is contrary to the practice and policy of the organs of state and state-owned entities to strive to achieve their so-called ‘maximum with the minimum’. In addition, the order prevents the appellant from complying with security regulations as required by the International Civil Aviation Organization.

[9] For these reasons, it is in the interest of justice that this Court should entertain this appeal.’

[10] Undoubtedly, there are material similarities between the present case and ACSA. Like Marcè, in ACSA, Cochrane’s bid for the tender was unsuccessful because it did not meet the minimum requirements as specified in the published RFP document. Aggrieved by ACSA’s decision to award the tender to another bidder, Cochrane successful obtained an interim interdict, prohibiting the implementation of the tender pending the review of the tender. When the interim interdict was granted, ACSA was implementing the tender at a high cost utilizing public funds. The interim interdict prevented ACSA from complying with security regulations as required by the International Civil Aviation Organization. ACSA appealed against the granting of the interim interdict.

[11] The similarities between ACSA and the present case are not determinative of the present application for leave to appeal, as several difficulties arise from the TFM’s reliance on the judgment in ACSA.

[12] The primary difficulty that arises is that in respect of the issues that stand to be determined in the present applications, ACSA does not set a new precedent. ACSA applies established law on whether an interim interdict is appealable – which I have outlined in paragraphs 9 and 10 above, and on whether the court in ACSA correctly granted the interdict. In respect of the latter issue, the locus classicus test for an interim interdict in Setlogelo, as modified by the Constitutional Court in OUTA remains the operative law. So is the prospects of success test in terms of section 17(1) (a)(i) of the Superior Court’s Act.[7] I will deal with the Full Court’s application of this test under the prospects of success question, since that is where it is relevant.

[13] Therefore, the conclusions that the Full Court makes in ACSA flow from the application of the established law to the facts in that case and not from any new legal principle that it established. The precedent doctrine does not require this court to arrive at the same conclusion when applying the applicable legal principles to the facts in the present application. Further, as will be evident below, there are unique facts to be brought to bear here, that are not reflected in the Full Court judgment. I also differ with respect on the Full Court’s application of the applicable legal principles in ACSA.

[14] Another difficulty is that on the appealability question, TFM relied on the Full Court’s reasoning on an issue that was not for that court to determine, namely, whether the interim interdict is appealable. It clearly appears from paragraph 1 of the judgment that the appeal in ACSA was with the leave of the court a quo. Therefore, it is unclear why the Full Court considered it necessary to determine whether the interim order was appealable, as that question is only relevant in an application for leave to appeal. With leave to appeal having been granted by the court a quo, the Full Court’s view on the question was immaterial. It had to determine the appeal.

[15] This court has not been appraised of the basis on which the court a quo in ACSA came to the conclusion that the interim interdict in that case is appealable.

[16] Therefore, given that ACSA does not set new law and that the basis on which the court a quo granted leave to appeal is not known, this court is unable to derive any guidance from ACSA.

[17] I now proceed to apply the Zweni test and the interest of justice tests to the present facts, guided by the factors enumerated in OUTA.

[18] I find that TFM fails to meet these tests. 

[19] The interim interdict is not final in effect. This can hardly be in dispute given that TFM has brought an application in terms of section 18 (2) of the Superior Courts Act. This section applies to interim orders that are not of final effect. To the extent that counsel for TFM, in an attempt to persuade this court that the interim interdict is prejudicial to TFM as its contract with the City will expire in 2020, by which time appeal processes will not be exhausted, he reprobates and approbates.

[20] The interim interdict preserves the status of the tender as at 18 November 2019 by not allowing the further implementation of the tender pending the review. The importance of preserving the implementation status is fully dealt with in paragraphs 56 to 65 and 85 to 86 of the judgment. TFM’s contention that there is nothing to preserve as the City has already awarded the tender to TFM misses the point. In the event that the review court sets aside that decision in terms of section 172 (1) (a) of the Constitution, it will proceed to deal with the consequences of the declaration of unlawfulness by making a just and equitable order in terms of section 172 (1) (b) of the Constitution. The interim interdict only serves this limited purpose. In its absence, the review court’s jurisdiction in terms of section 172 (1) (b) of the Constitution will be rendered ineffective.

[21] The interim order does have an immediate effect as it halted the further implementation of the tender with effect from 18 November 2019. As already stated, this is necessary to ensure that the review court’s jurisdiction in terms of section 172 (1) (b) of the Constitution is not rendered nugatory.

[22] The review application is being case managed on an expedited basis and is scheduled for hearing in the second week of February 2020. Therefore the negative impact and effect of the interdict will not endure for long.

[23] Counsel for TFM could not set out reasons what prejudice TFM would suffer if the interim interdict continues to endure until the review court delivers its judgment. The prejudice that TFM complains about is that if the interdict remains in place until all the appeal processes are exhausted, the contract will expire in the meantime, to TFM’s financial demise. Under the present circumstances, an applicant’s financial demise does not trump the interests of justice.

[24] The City’s non-compliance with the SANS standard does not render the appeal to be in the interest of justice because the City has never complied with the SANS standard. The urgency with which it now seeks to comply, at the expense of the integrity of the review process can hardly be in the interests of justice.

[25] Other factors that ameliorate the substantive impact of the interdict are dealt with at paragraphs 63 to 64 and 90 to 94 of the judgment. These factors remain valid.

[26] In OUTA, the Constitutional Court warned courts to be slow to restrict the exercise of executive and legislative powers before the review grounds have been determined, provided they act lawfully (emphasis added).  The present circumstances are hit by this proviso. Justification for the encroachment of the City’s powers to implement the tender as set out in paragraph 87 and 88 of the judgment is consistent with this proviso.

[27] The risk of the appeal court usurping the role of the review court when determining the appeal is unlikely to arise as the hearing of the review application is eminent. If the interim order is appealable, it is unlikely that the appeal court would determine the appeal before the review application is determined.

[28] I find that rather, it is in the interests of justice that the interim interdict remains in place until the court has determined a just and equitable remedy in terms of section 172 (1) (b). 

[29] I also find that TFM also fails to meet the interests of justice test. Therefore, the interim interdict is not appealable.

[30] In the premises, the application for leave to appeal stands to fail.

 

PROSPECTS OF SUCCESS

[31] I find that even if the interim order was appealable, there are no prospects of success on appeal. I fully stand by the reasons for granting the interim interdict as set out in the judgment.

[32] Given that ACSA was also relied upon in respect of the prospects of success question, and that it was not relied upon when the interim interdict was argued, it is prudent that I address the argument advanced in that regard.

[33] The Full Court in ACSA, guided by the trite test in Setlogelo, referencing Webster v Mitchell[8], found that the interim interdict was incorrectly granted. TFM relied on the Full Court reasoning to contend that I wrongly granted the interim interdict and that there are prospects of success on appeal.

[34] When determining whether Cochrane, the applicant in ACSA, met the test in Setlogelo, the Full Court relied on the application of the Setlogelo test in paragraph 50 of OUTA. It also referred to Allpay Constitutional Court[9] in relation to the effect of a declaration that a tender is unlawful in terms of section 172 (1) (a) of the Constitution and the applicable remedy in terms of section 172 (1) (b).

[35] I am respectfully unable to agree with the Full Court’s interpretation of the Constitutional Court decisions in OUTA and Allpay.  

[36] I am respectfully of the view that paragraph 50 and 51 of OUTA, which the Full Court relies on (and which the respondents relied on in the application for the interim interdict), does not set a new test for interim interdicts but sets out an application of the facts in OUTA to the revised test for interim interdicts as set out in paragraphs 41 to 47 of OUTA. As evidenced by the heading, “High Court judgment” and “Prima facie right” from paragraph 48, in paragraph 50 and 501, the Constitutional Court was dealing with the High Court’s judgment in OUTA and not with the test for interim interdicts.

[37] When paragraphs 50 and 51 in OUTA are applied to the present facts, it leads to an absurd conclusion because in OUTA, the court was not faced with the implementation of a tender allegedly awarded unlawfully, but the implementation of a decision taken lawfully in the context of implementing government policy framework; a material distinction which the Full Court failed to make. On the Full Court’s interpretation of OUTA, once implementation commences, a tender may not to be interdicted. The Constitutional Court, with respect, did not create such a principle in OUTA.

[38] Further, I am of the view that in paragraph 16, the Full Court incorrectly found on the basis of section 172 (1) (a) that the court a quo in ACSA misdirected itself when it took into account the prejudice that will face the review court if the tender is partially or fully implemented when the review application is determined. Here, the court a quo was dealing with the review court’s powers to grant just and equitable relief in terms of 172 (1) (b) and not the power to set aside the decision to award a tender in terms of section 172 (1) (a).  

[39] The effect of the implementation of a tender on review proceedings is an important consideration to make by a court ceased with an application for an interim interdict pending the review of the tender, to ensure that section 172 (1) (b) is adequately given effect to by the review court. Despite how important this consideration is given the purpose of an interim interdict in review applications involving tenders, evidently from its judgment, the Full Court respectfully failed to take it into account.

[40] I quote the relevant paragraphs of the judgment in ACSA below:

“[14] The court a quo further misdirected itself in finding that because the tender may have been partially or completely executed was a factor ‘that might also prejudice or negatively impact on even the considerations at the hearing of the review application. Counsel for the appellant, Mr Tsatsawane SC, in my view, correctly contends that it would render the whole review procedure irrelevant and would necessarily mean that an interim interdict must be granted every time that there is a review application simply because a review application would become redundant if an interim interdict is not granted. If the first respondent makes out a case and establishes that its tender was wrongly disqualified, then the review court has no discretion but to review and set aside the decision to disqualify its tender, regardless of the stage of the implementation of the decision.

[15] In Allpay Consolidated v CEO, SASSA the Constitutional Court held as follows:

“[25] Once a ground of review under PAJA has been established there is no room from shying from it. Section 172 (1) (a) of the Constitution requires the decision to be declared unlawful. The consequences of the declaration of unlawfulness must then be dealt with within a just and equitable order under s172 (1) (b).

[16] This necessarily means that the fact that that a tender may have been partially executed does not prevent a review court to review and set aside the decision to award the tender and it also does not constitute a negative factor to be used against the first respondent in the review application.”

[34] A concern which the Full Court heeds, that a review application will always be redundant if an interim interdict is not granted is an incorrect consideration because each application for an interim interdict will be determined based on the Setlogelo test as refined in OUTA, applied to the facts of each case. OUTA is not authority for the proposition that an interim interdict may never be granted after a decision to award a tender has been made.

[35] I find that there are no prospects that another court, applying the Setlogelo test as refined in OUTA to the present facts, will find that the interim interdict was wrongly granted.

[36] Therefore, the application for leave to appeal stands to be dismissed with costs.

 

APPLICATION IN TERMS OF SECTION 18 (2) AND (3)

[37] The City hinged its section 18 application on TFM’s application for leave to appeal. It did not bring its own application. With TFM’s application for leave to appeal dismissed, the question arises whether the respondents have the jurisdictional basis for the section 18 application.

[38] Section 18 provides:

“ 18 Suspension of decision pending appeal

(1) Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.

(2) Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal.

(3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders.” (Emphasis added).

[38] Having found that the interim interdict is not appealable, the respondents lack the jurisdictional basis for this application. This consideration is different from the mechanical approach the Full Court warned against in Fidelity Security Services[10]  as the facts in the two cases are materially distinguishable. There, an application for leave to appeal was pending when the court a quo considered the section 18 application. The Full Court had to consider whether the court a quo was correct to ignore the fact that the application for leave to appeal had not been filed when the section 18 (1) was filed. It found that the court a quo correctly considered the application. The dismissal of TFM’s application for leave to appeal under the present circumstances is dispositive of the section 18 application.

[39] In the premises, the section 18 application stands to be dismissed with costs. Therefore, the following order is made:

 

ORDER

1. The application for leave to appeal is dismissed with costs.

2. The applications in terms of section 18 (2) and (3) of the Superior Courts Act 10 of 2013 are dismissed with costs.

 

            __________________________

MADAM JUSTICE L T MODIBA

JUDGE OF THE HIGH COURT,

GAUTENG LOCAL DIVISION, JOHANNESBURG

 

 

APPEARENCES

Counsel for the respondents/ applicants:            Advocate K Pillay SC assisted by 

                                                                                  Advocate Y Ntloko  

Attorney for the respondents/ applicants:            Dlamini Attorneys    

Counsel for the second applicant/

first respondent:                                                       Advocate M Sello assisted by

                                                                                    Advocate M Seape

Attorney for the second applicant/

first respondent:                                                       Mkhabela Huntley Attorneys Inc.

Counsel for first applicant/

second respondent:                                                 Advocate L Hollander

Attorney for first applicant/

second respondent:                                                 Thomson Wilks Inc.

Date of hearing:                                                       14 January 2020

Date of judgment:                                                    30 January 2020

 

[1] 10 of 2013

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