IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

REPORTABLE

THERM AIRE INVESTMENTS (PTY) LTD
t/a IMPROVAIR 							APPLICANT

And

Coram :				DLODLO, J
Judgment by:				DLODLO, J

For the Applicant:        		ADV. I. JAMIE (SC) 
					ADV. N. DE JAGER
Instructed by:        			Webber Wentzel

				Heerengracht, Foreshore
				CAPE TOWN
				TEL. NO. (021) 431 7000
					(REF. R. Gootkin)

						ADV. K. PILLAY

Instructed by:				Cliffe Dekker Hofmeyer 

					11 Buitengracht Street 
					CAPE TOWN 
					TEL. NO. (021) 405 6111 
					(REF. Mr. S. Rajie)

					ADV. A. COETZEE

					3 St George's Mall 
					The Collosseum 
					CAPE TOWN 
					TEL. NO. (021)801 5240 

Date(s) of Hearing:			30 MARCH 2011

Judgment delivered on:		28 APRIL 2011

IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

REPORTABLE

THERM AIRE INVESTMENTS (PTY) LTD
t/a IMPROVAIR 							APPLICANT

And

		

DLODLO, J

[2] The Applicant instituted this application on an urgent basis on 9 March 2011. In this application the Applicant seeks urgent interim interdictory relief (pending the determination of relief in Part B) to:
a)	Restrain the First and/or Second and/or Third and/or Fourth Respondents from signing or concluding a contract with the Fifth Respondent, pursuant to which the Fifth Respondent is appointed to carry out the HVAC installation in connection with the extension and refurbishment of the Tygervalley Shopping Centre (project C/T346/M3) ("the works');
Restrain the First and/or Second and/or Third and/or Fourth Respondents from, in any manner implementing the award of the tender pertaining to the works.

BACKGROUND FACTS
[3] The First and Second Respondents are the registered co-owners of the Tygervalley Shopping Mall. There is no dispute that they are private entities and not organs of state. The First and Second Respondents are in the process of undertaking an extension and refurbishment of the Tygervalley Shopping Mall and have appointed a Joint Venture (which the Fourth Respondent forms part of) as the principal contractor in respect thereof. One of the subcontracts (and to which this application relates) is that of the Heating Ventilation and Air Conditioning ("HVAC') for the extensions and refurbishments of the Tygervalley Shopping Mall. The First and Second Respondents applied their Procurement Policy in order to secure subcontractor for the HVAC.

[4] On or about 6 October 2010. the First and Second Respondents issued a document entitled "Prequalification Documentation for the HVAC Installation at Tygervalley Shopping Centre - Master Development Plan: Phase 1" ("the prequalification document"). The prequalification documentation was sent to six entities that were prospective tenderers. The tender documentation was made available to prospective tenderers on 15 October 2010. The tender documentation included:
(a.) the Procurement Policy; (b) the tender specification. A pre-tender meeting took place on 20 October 2010 and a copy of those minutes is attached as DCE4 to the Founding Affidavit. Save for the Applicant and the Fifth Respondent, all of the other tenderers subsequently withdrew from the tender process.

[5] On receipt of the two tenders, the Third Respondent ("Trioc-on") did an initial assessment in respect of technical and financial compliance and recommended that the tender be awarded to Two Oceans. The Tender Evaluation Committee then verified the adjudication process used in terms of the Procurement Policy. The Tender Evaluation Committee scored Two Oceans 86.50 points and the Applicant 75.91 points and recommended Two Oceans for appointment. The tender was then referred to the Development Committee which made a recommendation to the Management Committee. The decision to award the tender to Two Oceans was taken by the Management Committee.

[6] On 7 March 2011 an agreement was concluded between the Joint Venture and Two Oceans pursuant to the award of the tender. I hasten to mention that there is a dispute between the parties with regard to the status and naming of the initial document that apparently set the whole bid in motion. The Applicant insists that its correct name is "the Bid Invitation" whilst the Respondents insist that it is a "Prequalification Documentation" for the HVAC Installation at Tygervalley Shopping Centre. The Applicant insists that the latter documentation formed part of the tender documentations  in this matter.  Importantly, the

Respondents hold a different view from, that of the Applicant. It is of paramount importance to note though that this documentation is indeed entitled "Prequalification Document".

THE COMPLAINT BY THE APPLICANT

(a) By having committed to its Procurement Policy, the First, Second and Third Respondents gave an "undertaking" that a bidder who submits a compliant bid acquires "the right" and the Respondents are obliged to have its tender adjudicated on that basis.
(b) Upon submission of its bid, it obtained the contractual right to have its bid adjudicated upon the terms set. forth in the Bid Invitation and Procurement Policy.
Consequently the Applicant contends in the Replying Affidavit and in oral submissions that the award of the tender and the conclusion of the contract pursuant thereto have occurred "in breach of the Applicant's contractual rights''.

DISCUSSION

"96. If the urgent interim relief is not granted and Two Oceans concludes such a contract pursuant to the award of the tender, then the final relief sought herein will be moot and. the applicant will effectively be deprived of the opportunity to enforce the rights which it is seeking to do in these proceedings. 
97. Upon concluding such a contract, Two Oceans will acqidre contractual rights to perform, the services for which it has tendered. Once that occurs, even were the applicant to have a. proper case for the final relief which it seeks (a. declaration that the tender process was flawed, and thai the Two Oceans bid ought to have been disqualified for failing to furnish a B-BBEE certificate issued, by a SANAS~accredited, agency), that relief would be rendered moot."

"[I3] Gevolglik net cms te make met twee aansprake op persoonlike regte, voorspruitend uit else vir spesifieke nakoming van twee kontrakte, wat met mekaar in botsing is. Die onderskeie regte waarop aanspraak gemaak word is  versoenbaar deurdat eiendomsreg en n saaklike serwituut naas mekaar kan bestaan. Nietemin is die aansprake onversoenbaar deurdat die eerste respondent oordrag van onbeswaarde titel eis wat uiteraard nie met  'n geregistreerde saaklike senvituut oor die eiendom versoenbaar is nie. " 

The Applicant's claim for specific performance lies against the First and the Second Respondents, and it bears on the Applicant's alleged entitlement that the bid process should be conducted according to what the Applicant argues were the agreed rules. The Fifth Respondent's right to specific performance is of a different character. It is a right enforceable against the Fourth Respondent,  entitling the Fifth Respondent to perform the services provided for in the sub-contract agreement. One is not dealing with competing claims for specific performance being advanced against one party who in the nature of things cannot perform fully in each case.

"[10] Secondly, Mr. Wagener argued on behalf of the appellants that the Court should not have issued an order for specific performance because, in the circumstances of this case, it cannot be carried out. The rule is set out in Shakinovsky v Lawson and Smulowitz (1904 TS 326 at 330) as follows: 'Now a plaintiff has  always  the right to claim, specific performance of a contact which the defendant has refused to carry out but it is in the discretion of the Court either to grant such an order or not. It will certainly not decree specific-performance where the subject-matter has been disposed, of to a bona fide purchaser, or where it is impossible for specific per[ormance to be effected; in such cases it will allow an alternative of damages.'" 

[95] The Constitution requires that its values be employed to achieve a careful balance between the unacceptable excesses of contractual freedom ' and securing a framework within which the ability to contract enhances rather than diminishes our self-respect and dignity. The issues in the present appeal do not imperil that balance. "

[13] It is so that the Applicant seeks to impugn the tender process notwithstanding the fact that it unreservedly accepts that the First, Second and Third Respondents:
(a) are private entities and not organs of state; (b) do not exercise a public power or perform a public function in terms of any empowering legislation.

"[111]       Section 6 (2) of the Promotion of Administrative Justice Act authorizes
'[a] court or tribunal ...to judicially review an administrative action if—

(b) a. mandatory and material procedure or condition prescribed by an empowering provision was not complied, with'.
As Hoexter J observes:
'It woidd of course be delightfully simple if the failure to comply with mandatory provisions inevitably resulted in invalidity while ignoring directoiy provisions never had this consequence, but the realitv is not so clear-cut. From, our case law one sees that some requirements classified as "mandatory" need not, in fact, be strictly complied with, but that "substantial" or "adequate" compliance may be sufficient. The reference in the PAJA to a "material" procedure or condition may indeed be read as recognizing this. ' (Footnote omitted.)
She goes on (correctly in my opinion) to support an approach which she believes sensibly links the question of compliance to the purpose of the provision, and quotes from Maharaj and Others v Rampersad where Van Winsen A.JA stated the following:
'The enquiry, I suggest, is not so much whether there has been "exact" "adequate" or "substantial" compliance with [the] injunction but rather whether there has been compliance therewith. This enquiry postulates an application of the injunction to the facts and a resultant comparison between what the position is and what, according to the requirements of the injunction, ought to be. It is quite conceivable that a court might hold that, even though the position as it is not identical with what it ought to be, the injunction has nevertheless been complied with. In deciding whether there has been a compliance with the injunction the object sought to be achieved by the injunction and the question whether this object has been achieved are of importance.' She notes with apparent approval the suggestion that this approach shows a trend away from the strictly legalistic to the substantive. Hoexter above n 3 at 263 quoting Van Dijkhorst J in Ex parte Mothuloe (Law Society, Transvaal, Intei-vening) 1996 (4) SA J131 (T) [1996] 2 ALL SA 342} at 1138 D/E-E (SA). See too Olivier J A in
Weenen Transitional Local Council v Van Dyk 2002 (4) SA 653 (SCA) ([2002] 2 ALL SA 482) in para 13. The importance of avoiding a narrowly textual and legalistic approach was underlined by this Court in African Christian Democratic Party v Electoral Commission and Others 2006 (3) SA 305 (CO (2006 (5) BCLR 579) in para 25. "

[14] The above, however, finds no application in the instant matter. We know the PAJA provisions are beyond the reach of the Applicant in this matter. The Application before me, however, exhibits features that compel me to perceive same as a disguised application of PAJA provisions to private entities. 1 know of no authority and none has been pointed out for my attention for the proposition that a Court may impugn a tender process in circumstances where Respondents are private entities (not organs of state) and as such do not exercise or purport to exercise a public power or perform a public function in terms of any empowering legislation. Because the First to Third Respondents are private entities (not organs of state) and do not exercise a public power or perform a public function in terms of any empowering legislation, any decisions taken by them or on their behalf cannot be challenged in terms of PAJA. This obstacle on the way of the Applicant is seemingly being overcome by the seeking of declaratory relief in Part B as opposed to the conventional reviewing and setting aside of an impugned decision. At the risk of repeating myself I mention that one would be forgiven if one views the relief sought in Part B as a thinly disguised attempt to afford the Applicant relief as if PAJA had applied. Importantly, this is not a case where the exercise of private power approximates public power or has a wide and public impact. The effect of the relief sought by the Applicant translates to an attempt to hold private entities liable to the same standard as organs of state. It shall not be forgotten that the standard to which organs of state are held in respect of tender process emanates (as it were) from the State's obligations under Section 217 of the Constitution of the Republic of South Africa. These obligations do not of cause apply to private entities. The Applicant seemingly seeks to hold the First and Second Respondents accountable to their own internal regulator}' framework.

[15]   The Applicant is seeking declaratory relief which will have no bearing whatsoever on its rights because:

"Centre Management reserves the following rights regarding acceptance of tenders;
9.9.1.	
9.9.2.	
9.9.3. The Management Committee decision in awarding a tender is final. "
(Own underling)
These provisions of the Procurement Policy should not under any circumstances be overlooked. Mr. Rosenberg submitted that in his view the Applicant is mistaken in contending that a B-BBEE certificate issued by a SANAS accredited agency is a peremptory requirement under the Procurement Policy and the tender documents. In his view the application by the Applicant is misconceived.

'Whilst we do not deny that the empowerment certificate submitted by Two Oceans may indeed be valid if viewed in terms of the ... [the notice], we are of the view that your client's ex-post facto reliance on the notice merely obfuscates the issue... "

18] There is merit on the submission by Mr. Jacobs that the provisions of the Procurement Policy read with the Tender Specification are by no means harmonious as regards the effect of non-compliance. Mr. Jacobs submitted as follows in this regard:

"(a) from 1 February 2010, only BEE verification certificates issued by Accredited Verification Agencies or Verification Agencies

[19] It is of paramount importance that the validity of a B-BBEE certificate submitted by Two Oceans was not [both in the Founding Affidavit and the Replying Affidavit] disputed by the Applicant save on one aspect only, namely that it was not issued by a SANAS accredited agency. An endeavour was made by Mr. Jamie to attack this certificate when he made his oral submissions. That obviously would not carry any weight because it was never the Applicant's case on the papers. There is indeed no need to spend time on the allegation that MPowerS agency that issued the Two Oceans B-BBEE certificate had been deregistered.

[21 ] According to Mr. Rosenberg the Applicant misconceived two things, namely the contractual terms that it relies on regarding the adjudication of its tender and the contractual terms regarding the SANAS accredited certificate. It is common cause that in respect of the contractual terms for the adjudication of its tender, the Applicant submits both in Founding papers and in oral submissions that it was "entitled as a matter of contractual right:
(a) "To assume that prospective bidders across the board would be required by the First and Second. Respondents to submit bids in accordance with the Bid. Invitation, Procurement Policy and Tender Specification.
(b) That the provisions and requirements of the First and. Second Respondents' Bid Invitation, Procurement Policy and. Tender Specification would be strictly, fairly and equitably applied; and
(c) To have its tender accepted and considered based upon, the Bid Invitation supported by the Procurement Policy, Bid Specifications and other relevant documentation.'"'
I would agree with Mr. Rosenberg that none of the above constitutes "contractual terms" upon which the Applicant could place reliance particularly given that (a) a deviation from tender requirements is permissible under the Procurement Policy: (b) The Procurement Policy provides for a reservation of rights in respect of decisions taken; (c) The Procurement Policy specifically provides that it shall not operate in such a way as to confer any enforceable rights on a third party in relation to those aspects of the policy that relate to internal Pareto matters regarding procurement; and (d) the Management Committee decision in awarding the tender is final.

"The court specifically held that there is an implied obligation not to award [the] contract except in accordance with the terms of the tender documents. The respondent's [the municipality *s] obligation under [the] contract was not to award the contract except in accordance with.
the terms of the tender call The stipulation that the lowest or any tender need not he accepted does not alter that. The respondent might award, no contract at all or it might award [the] contract to Tower, but it was under a contractual obligation to the appellant not to award Tower something other than [the] contract. "

"Seen in isolation, the invitation to tender is no doubt an offer made by an organ of state 'not acting from a position of superiority or authority by virtue of its being a public authority, and the submission of a tender in response to the invitation is likewise the acceptance of an offer to enter into an option contract by a private concern who does so on an equal footing with the public authority. "

"A tendering procedure of this kind is, in many respects, heavily weighted in favour of the invitor. The invitee may often, although not here, be put to considerable labour and expense in preparing a tender,
ordinarily without recompense if he is successful 	But
where, as here, tenders are solicited form selected parties all of them known to the invitor, and where a local authority's invitation prescribes a clear, orderly and familiar procedure... the invitee is in my judgment protected, at least to this extent: if he submits a conforming tender before the deadline he is entitled, not as a matter of mere expectation but of contractual right, to be sure that his tender will after the deadline be opened and considered in conjunction with all other conforming tenders or at least that his tender will be considered if others are. "

[24] Mr. Jamie submitted as follows after referring me to the above-mentioned three cases:

A WELL-GROUNDED APPREHENSION OF IRREPARABLE HARM IF THTE INTERIM RELIEF IS NOT GRANTED

"[21] The test in regard, to the second requirement is objective and the question is whether a reasonable man, confronted by the facts, would apprehend the probability of harm. The following explanation of the meaning of 'reasonable apprehension' was quoted with approval in Minister of Law and Order and Others v Nordien and Another: A reasonable apprehension of injury has been held to be one which a. reasonable man might entertain on being faced with certain, facts. The applicant for an interdict, is not required to establish that, on a balance of probabilities flowing from the undisputed facts, injwy will follow: he has only to show that it is reasonable to apprehend that injury will result. However the test for apprehension is an objective one. This means that, on the basis of the facts presented to him, the Judge must decide whether there is any basis for the entertainment of a reasonable apprehension by the applicant. "

(a) the contract has now been concluded and accordingly on the Applicant's own version, the final relief is rendered moot; (b) none of the relief sought in this application seeks to challenge the validity of the contract that was concluded between the Joint Venture and the Fifth Respondent - Two Oceans.

BALANCE OF CONVENIENCE

NO OTHER SATISAFACTORY REMEDY

ORDER:
[30]   In the result I make the following order:
(a) The application is dismissed.
(b) The Applicant shall pay the costs as follows: