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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

(1)    REPORTABLE: NO

(2)    OF INTEREST TO OTHERS JUDGES: NO

(3)    REVISED: YES

Case No: 38439/2021

 

In the matter between:

ADBOOL KADER ESSA N.O                                                                        1^ST  APPLICANT

MOHAMED IRSHAD ESSA N/O                                                                   2^ND APPLICANT

ZULEKA BIBI JEEWA N.O                                                                            3^RD APPLICANT

and

NATIONAL REGULATOR

FOR COMPULSORY SPECIFICATIONS                                                    1^ST RESPONDENT

EDWARD MAMDISE                                                                                      2^ND RESPONDENT

LULAME QUPE                                                                                              3^RD RESPONDENT

HAZELSIDE PROPERTIES (PTY) LTD                                                      4^TH RESPONDENT

(This judgment is handed down electronically by circulation to the parties’ legal representatives by email and by uploading it to the electronic file of this matter on CaseLines.  The date for hand-down is deemed to be 20 October 2021.)

JUDGMENT

MALINDI J

[1]         The applicants are trustees of the ZAFS Trust, Registration No IT922/PMB (“the Trust”). The second applicant deposed to the founding affidavit as authorised.

[2]         The first respondent is the National Regulator for Compulsory Specifications (“the NRCS”), an entity of the Department of Trade and Industry and Competition (“DTIC”) established in terms of section 3 of the National Regulator for Compulsory Specifications Act, 5 of 2008 (“the Act”).

[3]         Mr Lefao Edward Mamadise, the second respondent and the Chief Executive Officer of the NRCS, deposed to the answering affidavit.

[4]         The applicants seek an order interdicting and restraining the NRCS from implementing the award of a tender to the fourth respondent, Hazelside Properties, in which the Trust was a tenderer at two stages of it being advertised in 2018 and 2020. In 2018 the Trust was the only tenderer but the tender was withdrawn. After it was reinstated in 2020 it competed against eight others including the fourth respondent (“Hazelside”). The Trust had been eliminated at the second stage of adjudication, that is at the bid evaluation stage of the Bid Evaluation Committee (“BEC”) stage with seven others bidders.

Background facts

[5]         The salient background is set out in the chronology of events as set out by the applicants, with my emphasis, as follows:

5.1            01/03/2009: Commencement of 10-year lease – Cedar Park Property

5.2            February 2010: Hazelside sells Cedar Park Property to ZAFS & cedes 10-year lease

5.3            26/10/2018 (Bid closing  date 19/11/2018): New tender advertised NRCS 001-2018/2019 (Request for bids)

5.4            15/11/2018: ZAFS submits bid

5.5            Early 2019: Tender cancelled NRCS

5.6            28/02/2019: Expiry of initial 10-year lease

5.7            01/03/2019: Commencement of 1-year lease extension

5.8            06/09/2019: BAC rejects specifications of BSC tender

5.9            18/11/2019: BAC rejects specifications of BSC tender

5.10         21/02/2020: BAC approves advertising of tender

5.11         29/02/2020: Expiry of 1-year lease extension

5.12         01/03/2020: Month-to-month lease

5.13         03/07/2020: Tender advertised NRCS 001-2018/2019 (Request for bids)

5.14         22/07/2020: ZAFS submits bid

5.15         04/11/2020: BEC conduct Phase 2 Functionality Evaluation at ZAFS building

5.16         05/11/2020: BEC conduct Phase 2 Functionality Evaluation at Hazelside building

5.17         18/03/2021 to 23/03/2021: NRCS commences price negotiations with  Hazelside

5.18         09/04/2021: BEC signs evaluation and recommendation report

5.19         14/04/2021: BAC recommends price negotiation team to negotiate with Hazelside

5.20         14/05/2021: BEC amends its report

5.21         19/05/2021: BAC considers and approves amended BEC report

5.22         28/05/2021: ZAFS informed of unsuccessful bid

5.23         08/06/2021: ZAFS ascertains identity of successful bidder through NRCS website

5.24         14/06/2021 (dated 10/06/2021): ZAFS sends letter to NRCS requesting reasons and documents

5.25         18/06/2021: NRCS responds to ZAFS letter stating they are consulting with SCM and are guided by PAJA timeframes

5.26         23/06/2021: ZAFS sends second letter to NRCS requesting information and an undertaking that tender implementation be halted

5.27         02/07/2021: NRCS responds to ZAFS second letter stating no appeal process is available and they are still in consultation with SCM

5.28         13/07/2021: NRCS signs lease agreement with Hazelside

5.29         22/07/2021: NRCS sends letter notifying ZAFS that it would be vacating the Cedar Park Property on 31  August 2021

5.30         02/08/2021: Urgent Application launched

5.31         16/08/2021: Answering affidavit delivered

5.32         01/09/2021: Lease agreement commencement date between NRCS and Hazelside

[6]         The Trust seeks two main orders in terms of the amended notice of motion, being the interdict referred to above on an urgent basis pending the finalisation of a review application to be instituted within a period of 60 (sixty) days from the date of the order. In the circumstances, a determination has to be made whether this matter is urgent and whether on the merits a case has been made for an interdict.

Urgency

[7]         The matter was initially enrolled for 10 August 2021 in the Urgent Court. The matter became opposed and it was removed from the roll in order to allow the respondents adequate time to file an answering affidavit and for the applicant to reply thereto. It was re-enrolled for 24 August 2021.

[8]         On 23 August 2021 the respondents had indicated that they intend filing a further affidavit to which the applicants have indicated their opposition.

[9]         The applicants have submitted that they have met the requisites of obtaining urgent interdictory relief which has an effect of final relief, that is, a clear right to the relief sought; injury committed or reasonably apprehended; and no other remedy.

[10]      The respondents have submitted that the applicants’ application stands to be dismissed on the ground that it is not urgent or that the urgency is self-created. The applicants threatened bringing an urgent application on 23 June 2021 if the respondents failed to provide reasons for the first respondent’s decision to award the contract to the fourth respondent and not to the Trust.

[11]      On 28 May 2021 the Trust received a letter from the NRCS which informed the Trust that its bid had been unsuccessful.[1]

[12]      The Trust had submitted the lowest price in its bid of R22 679 736,00 (twenty-two million six hundred and seventy-nine thousand seven hundred and thirty-six rand) whereas Hazelside had submitted a price of R32 892 311,98 (thirty-two million eight hundred and ninety-two thousand three hundred and eleven rand and ninety-eight cents. However, the final contract price was negotiated down to R26 480 159,11 (twenty-six million four hundred and eighty thousand one hundred and fifty-nine rand and eleven cents) after the award was made.

[13]      Upon scrutinising the NRCS website on 8 June 2021 the applicants formed a view that they must challenge the award for the following reasons:

“23.      Myself and the other trustees of the Trust were concerned about the awarding of the tender to the Fourth Respondent in that the Trust had submitted the lowest tender price and the Fourth Respondent had submitted the third highest tender price as per the bid documents. Furthermore, what is also highly disconcerting and irregular is that the contract price of the Fourth Respondent, as per the table of awarded tenders, did not accord with the tender price as submitted in the bid documents and set out in annexure “ZA7”. In this regard, the Trust had never received any communication that bidders were allowed to change the bid price subsequent to the lodging of the bids and the closing date of the tender on 27 July 2020.

24.       What is furthermore worrisome is that the successful bidder received a points total of 68 out of the total 100 available. It goes without saying that this points total is not very high.

25.       It was considered prudent by all the applicants to challenge the award of the tender to the Fourth Respondent and, as such, we approached our current attorneys of record to initiate proceedings to challenge the award of the tender.”

[14]      On 10 June 2021 the applicants sought reasons why the Trust was unsuccessful and documents relevant to the decision making process.[2] On 18 June 2021, a deadline set by the applicants for the NRCS to respond by, the Trust received a response to the effect that the NRCS was still on consultation with its Supply Claim Management (“the SCM”) business unit and that a response would be provided “in due course”. It stated further that its responses will be in terms of the timeframes as provided by the Promotion of Administrative Justice Act, 3 of 2000 (“PAJA”) and the Promotion of Access to Information Act, 2 of 2000 (“PAIA”).

[15]      After not having received any response by 23 June 2021 the Trust addressed a further letter to the NRCS in which it threatened an urgent application for an interdict if no undertaking is made by 2 July 2021 that it would not implement the tender “or take any steps pursuant to the granting of the tender to Hazelside Properties prior to the provision of written reasons to our client ant prior to affording our client the opportunity to appeal the administration decision”.[3]

[16]      At this stage the applicants had already formed a view as aforesaid that they wished to challenge the award on the grounds set out in paragraphs 23 to 24 of their letter of 8 June 2021 and that they wished to exercise any available right to appeal before the implementation of the award.

[17]      Upon receipt of a “non-response” on 2 July 2021 and a clear indication that no undertaking would be made by the NRCS and that the long timeframes provided in PAJA and PAIA for the provision of reasons and access to the record would be utilised, the applicants considered writing a further letter to demand the undertaking that was not forthcoming. This further letter was not written and on 22 July 2021 the NRCS gave notice of termination of the lease agreement with effect from 31 August 2021 with the applicants.

[18]      The application was eventually launched on 2 August 2021 after receipt of the termination letter of 22 July 2021.

[19]      The respondents have submitted that the application be dismissed for lack of urgency alternatively that the urgency is self-created, and that no explanation has been provided for the inordinate delay.[4] The Trust deals with these averments in its replying affidavit.[5] The gist of its reply is that it could not bring review proceedings under Rule 53 of the Uniform Rules of Court because it would be required to state its grounds of review therein. In oral argument Counsel for the Trust reiterated this view and submitted that new reasons for decision have been provided on the answering affidavit and therefore the Trust can simply proceed in terms of Rule 6.

[20]      This legal strategy still does not explain the delays in between every step taken by the Trust and the respondents’ responses thereto. Furthermore, there was no answer as to the expedition that Rule 53 would have provided for the respondents to deliver the record within fifteen (15) days and the Trust to supplement its grounds that it had already articulated on 8 June 2021. The Rule 53-application would have been accompanied by this current application praying for a stay of the implementation of the award pending the review application.

[21]      The delay and lack of explanation therefore is fatal to this application. In National Council of Societies for the Prevention of Cruelty to Animals v Peter Openshaw[6] the Supreme Court of Appeal found that long delays for which no explanation had been given and no action had been instituted an application for an interdict pending litigation rendered the application fatally flawed and that the applicant had forfeited its right to the temporary relief prayed for. In the current application the applicants seek temporary relief pending the launching of review proceedings. The envisaged review proceedings would by now have progressed significantly had Rule 53 been followed.

[22]      The applicants aver that the delays were caused mainly by their pursuit of negotiations with the respondents. The respondents deny that such negotiations took place. Even if it were so parties are required to adhere to procedural rules while they pursue resolving disputes by alternative means.[7]

[23]      The process followed by the applicants is such that substantive issues of law and facts have to be traversed in an urgent manner. This is undesirable. In the event that I am wrong in finding that the applicants have forfeited their right to bring this application on an urgent basis, I deal with one narrow issue on the merits.

[24]      The respondents submit that the Trust has not established a prima facie right, let alone a clear right to entitle them to an interdict. This argument is based on the allege exclusion of the Trust at Phase 2 of the adjudication process and therefore that the only bidders are the ones who had advanced to Phase 3.

[25]      The Trusts right is pinned on the fact that its tender price was R22 million which should have been accepted instead of Hazelside’s R32 million. It submits that even with Hazelside’s adjusted contract price of R26 million the Trust’s price remains cheaper.

[26]      The NRCS answers to the effect that because the Trust had been eliminated at Phase 2 of the adjudication process, that is at the Functionality Evaluation Stage of the Bid Evaluation Committee (BEC), besides price not being the only criterion, its price was not relevant at the Phase 3 Stage by the Bid Adjudication Committee (BAC) stage because it was no longer a contender.[8] At Phase 3 only Hazelside and one other bidder remained who withdrew its bid before the conclusion of the process, thereby leaving Hazelside in an uncontested position.

[27]      This leaves the Trust not only having not established its right as a contender if its elimination at Phase 2 (BEC) level made its price irrelevant at Phase 3 (BAC) level, but the whole issue raises a genuine dispute of fact which is incapable of resolution on paper. A bit of time was taken in argument regarding whether the Trust had met the functionality criteria or whether those criteria had been enumerated as required. These issues are for the Court hearing the review application to resolve.

[28]      The NRCS filed a further affidavit which was mainly dedicated to explaining the why and the how the Trust was eliminated at Phase 2. I was also referred to terms of reference and score sheets in respect of both parties. There is deep disagreement as to the applicability of the terms of reference and the meaning of some of the comments made by the BEC members in their scoresheets which are adverse to the Trust. In its supplementary affidavit the Trust vehemently argues that the NRCS is not at liberty to introduce new criteria other than that stipulated in the tender documents and that the questions contained in the scoresheets were vague and arbitrary. This also introduces a dispute that is incapable of resolution on paper.

[29]      After having considered this particular aspect, having heard Counsel and considered the applicants’ supplementary heads of argument, I have no doubt that at least two genuine disputes of fact have arisen and that the applicants have failed to establish a prima facie right entitling them to the relief sought. I need not traverse other issues on the merits which also raise significant disputes of fact which will require oral evidence merely to deal with this application and further delay the launching of review proceedings. I therefore exercise my discretion in favour of the respondents, that is by not finding this application as deserving of being heard in the Urgent Court.

ORDER

[30]      In the circumstances I make the following order:

1.        The application is struck from the Urgent Court roll.

2.        The applicants are to pay the cost of this application on a party and party scale, jointly and severally, the one to paying the others to be absolved.

 

G MALINDI

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

APPEARANCES:  

Appearance for the applicants                                     :          Adv A Vorster

:           Adv D Hewitt

Instructed by                                                               :           ENS Africa

 

Appearance for the respondent                                   :           Adv S Hussein-Yousuf

Instructed by                                                               :           Mothle Jooma Sabdia Inc

                                                                                               

Date of Hearing                                                          :           27 August 2021

Judgment Reserved On                                              :           27 August 2021

Date of Judgment                                                       :           20 October 2021

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