REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
Case no: 7015/2006
In the matter between
THE MINISTER OF PUBLIC WORKS			                 Applicant 
(Respondent in Main Application)
And

MXN DEVELOPMENT CONSTRUCTION CC  		   Respondent
(Applicant in Main Application)

Coram:	Yekiso J
Delivered:	12 June 2007 
Summary:	
Temporary stay of proceedings – instances on basis of which proceedings could be temporarily stayed – a list of instances on basis of which proceedings could be temporarily stayed in no way could be exhaustive in the light of potential development of common law – courts entitled to invoke section 173 of the Constitution of the Republic of South Africa, 1996 to develop further remedies on basis of which proceedings could be temporarily stayed.

APPLICATION FOR TEMPORARY STAY OF PROCEEDINGS:
JUDGMENT DELIVERED ON 12 JUNE 2007

Yekiso J

[1]	This is an application for an order for a temporary stay of proceedings instituted out of this Court by MXN Development Construction CC (the applicant in the main application) in which proceedings MXN Development Construction CC, as applicant, seeks a declaratory order that the purported ‘retraction’ of the decision to award a bid, being Bid L20/2005, to MXN Development Construction CC, taken on or about 15 May 2005 is unconstitutional and inconsistent with the provisions of the Promotion of Administrative Justice Act, 3 of 2000.   The Minister of Public Works, as the respondent in the main application, opposes the order sought on a number of grounds to which I shall refer later in this judgment and has, by way of what is referred to in the papers as ‘counter review application’, sought to have the purported award of the bid to MXN Development Construction CC reviewed and set aside.   In this judgment I shall refer to the Minister of Public Works, who is the respondent in the main application, as the applicant, whilst MXN Development Construction CC, who is the applicant in the main application, as the respondent.

[2]	Briefly, the events which preceded the main application are as follows: on 13 April 2006 the respondent submitted a bid to the Department of Public Works in response to an invitation to the public to submit bids to purchase certain state properties.   The invitation was published in the Government Tender Bulletin dated 31 March 2006 and bearing serial number 2429.   In response to this invitation, the respondent submitted a bid to purchase a certain property situate in Wynberg, commonly known as 14 Cavan Road, Wynberg, being Erf 66347 measuring 2.1115 hectares in extent, together with the building thereon.   The property for which the respondent submitted a bid was identified in the advertisement under reference number L20/2005.

[3]	Once the bids were considered by the adjudication committee, the respondent was informed per a telefax transmission dated 28 April 2006 transmitted from the Ministry of Public Works that it (the respondent) had been recommended as a preferred bidder in respect of the property situate at 14 Cavan Road, Wynberg.   The letter goes on to say that the recommendation was subsequently approved by the Minister of Public Works on 12 May 2006.   This is incorrect as the purported approval of the recommendation was purportedly approved by the Minister of Public Works on 26 April 2006.   Whilst the respondent was in the process of complying with the conditions precedent to the implementation of the award of the bid, it was informed per yet a further telefax transmission dated 15 May 2006, on this occasion transmitted from the office of the Acting Regional Manager, Cape Town, advising that the implementation of the entire tender process was being put on hold as the Department was launching a comprehensive investigation into the entire tender process and that the tenderers would be informed of its final decision in due course.

[4]	Further communication with the Department of Public Works by the respondent, through its attorneys, demanding implementation of the decision to award the bid in respect of the Wynberg property in its favour, did not yield any positive results.   In view thereof, the respondent ultimately construed failure by the Department to respond to its communication and failure to implement the award as a retraction of the recommendation and approval thereof communicated to it as it was per the telefax transmission of 28 April 2006.   Fortified by the telefax transmission of 28 April 2006, advising it of a recommendation as the preferred bidder, on 26 July 2006 the respondent instituted proceedings out of this Court (the main application), on notice of motion, seeking a declaratory order that the retraction of the decision to award the bid to the respondent to be unconstitutional, illegal and inconsistent with the provision of the Promotion of Administrative Justice Act.   The applicant resisted the order sought, simultaneously launching counter review proceedings citing a number of irregularities in the tender process such as lack of compliance with the necessary procedures prior to the disposal of state properties and that the bid was ultra vires the provisions of the Public Finance Management Act, No 1 of 1999, the State Land Disposal Act, 48 of 1961 and the Preferential Procurement Policy Framework Act, 5 of 2000 amongst other grounds relied upon in resisting the respondent’s claim.

[5]	The matter was argued before me on 12 October 2006.   After hearing argument I reserved judgment.    On 25 October 2006 the present applicant launched review proceedings (the new review proceedings) out of this Court under case no: 11581/2006 in which the applicant seeks to have the entire tender process reviewed and set aside.   Four respondents are cited in the new review proceedings, the respondent in this application being cited as the fourth respondent.   Over and above the grounds for review already referred to in paragraph [4] above, the applicant seeks to have the purported approval of the respondent’s bid reviewed and set aside on the basis that no recommendation for approval thereof was made in the instance of the respondent.   In support of this contention the respondent relies on annexure “BA2” annexed to the founding affidavit in support of the application for a stay of the proceedings.   Annexure “BA2” is the internal memorandum within the Department of Public Works.  Paragraph 3 of  “BA2” sets out specific bids the adjudication committee submitted to the Minister of Public Works for approval.   The respondent’s bid does not appear amongst the bids submitted to the Minister.

[6]	The further ground relied upon to have the entire tender process reviewed and set aside is based on the contention that the late Ms Sigcau, who was then the incumbent Minister of Public Works, did not have the ministerial power to approve the recommendation of the bids submitted to her for approval.   In support of this contention the applicant relies on annexure “BA3” annexed to the founding affidavit in support of this application.   Annexure “BA3” is President’s Act No 130 dated at Pretoria on 26 April 2006.   In terms of this Presidential Act, Ms B P Sonjica was appointed an Acting Minister of Public Works with effect from 25 April 2006 to act as the Minister of Public Works during the absence of the then incumbent Minister of Public Works in the person of the late Ms Sigcau.   It is thus contended on behalf of the applicant that the then Minister of Public Works, in the person of Ms Sigcau, did not have the ministerial power to approve the recommended bids at the time she purportedly approved such recommendations at Durban on 26 April 2006.   The issues referred to in the two proceeding paragraphs, that is the absence of the recommendation to approve the respondent’s bid and the fact of an appointment of an Acting Minister effective from 25 April 2006 were not argued before me on 12 October 2006.   The explanation proffered on behalf of the applicant is that evidence relating to these issues was only uncovered in the course of preparation for the new review proceedings.

[7]	I have had sight of the founding affidavit in support of the new review.   I have since ascertained that the validity of the tender process is challenged on several grounds, these ranging from a misrepresentation on the part of one party to the tender process; that the tender process was not open and transparent; that certain procedures relating to disposal of state property were not complied with; lack of proper consultation with client departments and several other formalities which were not complied with prior to and during the tender process.   It is on basis of these grounds, apart from alleged failure to comply with the relevant provisions of the State Land Disposal Act, the Public Finance Management Act, the Preferential Procurement Policy Framework Act, the Broad Based Black Economic Empowerment Act, that I am asked to stay the proceedings in the main application pending the determination of those issues in the new review application launched out of this Court on 25 October 2006 under case number 11581/2006.

[8]	The respondent is opposing the relief sought on the basis that the proceedings which are sought to be stayed are neither vexatious, nor could they be described as the abuse of the court process, that the proceedings sought to be stayed are not founded on the same cause of complaint as in the new review application nor do the issues for determination in the new review application constitute an impediment in the determination of the issues in the proceedings sought to be stayed.    The respondent thus persists with its claim in terms of the notice of motion and the dismissal of the “counter-review”.

[9]	It is trite that the superior courts in this country possess inherent jurisdiction to prevent the abuse of their process by staying proceedings in certain circumstances, but that the power to do so will be used sparingly and only in exceptional cases.   (See Herbstein & Van Winsen: The Civil Practice of the Supreme Court of South Africa 4th Edition p245 and the authorities cited thereat)   Proceedings will be stayed when they are vexatious or frivolous or when their continuance, in all the circumstances of the case, is, or may prove, to be an injustice or serious embarrassment to one or other parties.   (Herbstein & Van Winsen, supra)

[10]	Herbstein & Van Winsen, supra, at p248 cite certain special circumstances in which the assistance of the court may be invoked to stay proceedings temporarily over and above the stay of proceedings on account of being vexatious or being the abuse of the court process.  The instances cited by the authors are lis pendens; pending criminal proceedings; previous unpaid costs; arbitration and other special matters.   Under heading ‘Special Matters’, the authors cite numerous instances where an order of stay of proceedings could be granted, ranging from companies in liquidation up to stay of proceedings pending payment of security for costs.   It is arguable if this list is exhaustive, particularly in view of the advent of constitutionalism in this country.   Various provisions in the Constitution of the Republic of South Africa, 1996 enjoin the courts, whenever it is in the interest of justice to do so, to develop the rules of common law and, in so doing, remedies unheard of before, may evolve which, either substantively, or under the heading ‘special matters’ may justify a stay of proceedings, either temporarily or permanently.   A person who may have been a fugitive of justice under the cloud of a charge of sodomy in the apartheid era may, as and when arrested, apply for a permanent stay of proceedings on the basis that sodomy is no longer a criminal offence, a remedy previously unheard of prior to the advent of constitutionalism.

[11]	In my view a stay of proceedings, either permanently or temporarily in the interest of justice, is one such remedy which may evolve.   After all, section 173 of the Constitution, under the heading ‘Inherent Power’, provides that the Constitutional Court, the Supreme Court of Appeal and the High Courts have the inherent power to protect and regulate their own process, and to develop the common law, taking into account the interests of justice.

[12]	In the new review application, the applicant’s complaint is based on non-observance, and as such, the violation of several Treasury Regulation and statutory provisions such as the State Land Disposal Act, The Public Finance Management Act, The Preferential Procurement Policy Framework Act, The Broad Based Black Economic Empowerment Act and the Public Finance Management Act in relation to the State Land Disposal Act, all of which appear to be relevant in State tender processes.   The respondent’s right, which he seeks to enforce in the main application, derives from a tender process which appears to have been subjected to the aforementioned statutory provisions and the financial regulations promulgated thereunder.   Should it be found, in the determination of those issues in the new review application, that the tender process which is the subject of the attack in the new review application was adjudicated upon in violation of one, more or all of the aforementioned statutory provisions and treasury regulations, such a finding may impact negatively on the respondent’s right which derives from the same tender process which is the subject of an attack in the new review proceedings.   These matters which, if determined in favour of the applicant, could lead to the entire tender process being set aside.   These issues are still to be determined, the respondent has been cited as a party in the action instituted for the determination of those issues, so that the respondent will have all the opportunity in the world to respond to the challenge of those issues.

[13]	Another aspect that has to be born in mind whenever there is a challenge based on non-observance or omission to comply with the law, be it law based on common law or statutory provision or even regulations promulgated thereunder, is that South Africa is a State founded on the supremacy of the Constitution and the rule of law.   All the organs of state have the responsibility to ensure that processes undertaken under auspices of programs set out by such organs of state, are undertaken in accordance with the law.   Should circumstances, therefore, arise which excite suspicion about the legality of any process undertaken under auspices of an organ of state, the organ of state concerned has the responsibility to be responsive  to such suspicious circumstances.   The judicial review of any process which is under a cloud of illegality is just but one of those responses.   In my view, the determination of the legality or otherwise of the entire tender process is more than enough to constitute those exceptional cases postulated by Herbstein and Van Winsen, supra.

[14]	Moreover, it is arguable if the award of the respondent’s bid is amongst those bids recommended for approval and purportedly approved by the late Minister Sigcau.   It is further arguable if the late Minister Sigcau had the necessary ministerial powers when she purportedly approved the bids submitted to her for approval.   I have already made a point elsewhere in this judgment that the respondent’s claim arises from the very same tender process which the applicant seeks to have reviewed and set aside.   The subject of the review in the new review application and the source of the respondent’s claim in the main application, are substantially the same.   In my view it is in the interest of justice if the proceedings in the main action are stayed pending the adjudication of those issues which raise doubts in the validity of the tender process.   In the result I am of the view that a case has been made out for the temporary stay of the proceedings instituted by the respondent. 

[15]	In the result, the following order is made:
a.	The application proceedings instituted by the respondent (applicant in the main application) for a declaratory order, are temporarily stayed pending the adjudication and determination of the issues raised in the review application instituted under case number: 11581/2006.
b.	No order for costs is made at this stage, same being left over for later determination.

………………………….
 N J Yekiso, J