South Africa: High Courts - Gauteng

-2-
will award tender C78/43070 to another tenderer on 9 June 2005. In the circumstances
and accepting the urgency of the application the learned Acting Deputy Judge President has
arranged for the application to be heard on 26 May 2005. Respondent's denial of the
urgency of the application in par 26.1 of its answering affidavit (p 104) could, accordingly,
not be bona fide. Mr Ncongwane, however, argued that urgency remained an issue. I do not
agree : I have considered the question whether the applicant has not caused the urgency
through its own lack of diligent conduct. It is true that some time elapsed since the news
that the tender would not be awarded to any tenderer became known. However, the exact
reasons as to why this happened only became clear later on and I do not believe, given the
circumstances, that the applicant was not diligent in its efforts to file the application as
soon as possible.
[3] The present application is an application for an interlocutory interdict. It is trite law that
the requisites for an interlocutory interdict are: A prima facie right; a well-grounded
apprehension of irreparable harm if the interim relief is not granted and the ultimate relief
is eventually granted; a balance of convenience in favour of the granting of the interim
relief; the absence of any other satisfactory remedy. 1
Prima facie right
[4] Applicant need not show a clear right or prove his right on a balance of probabilities. It
will be sufficient if applicant's right is prima facie established although it is open to some

-3-
doubt? I have no doubt that applicant has established a prima facie right in the present
proceedings: a list of the tenders considered by respondent's Bid Committee appears at p
68 of the application; the tenders with numbers 6, 4, 8, 7, 5, 9, 2, 3 and 1 were all
disqualified for the reasons appearing from p 69 - 71 of the application; Applicant's
alternative tender was not only the second lowest acceptable tender received by respondent,
but it also obtained the third highest points in terms of the Preferential Procurement Policy
Framework Act. It complied in all respects to the tender specifications. All the
respondent's relevant departments recommended that this tender should be accepted. It is
clear that applicant has extensive experience of the building of reservoirs.
[5] Respondent decided by a majority of three to two not to award tender C78/43070 to
applicant as it was of the view that applicant was guilty of so-called ''fronting''. That
respondent was not guilty of "fronting" appears clearly from the founding affidavit in the
review application and in particular from the affidavit by its auditor. Although respondent
repeats the allegations of "fronting" in its answering affidavit, no factual foundation
whatsoever is laid for these allegations. A bald allegation of ''fronting'' in respondent's
answering affidavit cannot detract from the positive evidence in applicant's founding
affidavit in the review application. Applicant was not afforded the opportunity to counter
the allegations of "fronting" fully. These allegations are not denied in the answering
affidavit. I do not agree that the mere fact that the persons who attended the interview with
2 Webster v Mitchell, 1948 (1) SA 1186 (W) at 118; Spur Steak Ranches Ltd v Saddles Steak Ranch 1996 (3) SA 706 C at 714 E). See also the qualification of this principle in Goal v Minister of Justice, 1955 (2) SA 682 (C) at 688.
Lepogo-uitspraak
08/06/2005 12:40 PM

-4-
the bid committee should necessarily have known the details of the financial management.
It must have been clear that the persons interviewed were within the construction division
of the applicant and that they were not well-informed as to the financial management of the
applicant. Applicant should have been informed that it was suspected of "fronting" and
should have been afforded the opportunity of properly countering these allegations.³
Applicant was furthermore entitled to have received full reasons why its tender was not
accepted.⁴It is noted that even at this stage applicant has still not received the full reasons
why its tender had not been accepted.
A Well- grounded Apprehension of Irreparable Harm if the Interim relief is not granted and the ultimate relief is eventually granted.
[6] This requisite is clearly present in this application. I am convinced on the probabilities,
as they feature within the mould of the present application, that the applicant will suffer
irreparable harm if the tender is awarded to another tenderer on 9 June 2005.
A Balance of Convenience in Favour of the Granting of the Interim Relief.
[7]When considering this requisite I must weigh the prejudice to the applicant if the interim
interdict is refused against the prejudice to the respondent if it is granted. This requisite
frequently involves a consideration of the prospects of success in the main application: the
stronger the prospects of success, the less need for the balance of convenience to favour the
applicant. ⁵ This requisite cannot be considered in isolation from the next requisite, namely
3 Logbro Properties CC v Bedderson NO and Others 2003 (2) SA460 (SCA) at p 471 E - 473D.
4 Transnet Ltd v Goodman Bros (Pty) Ltd2001 (1) SA 853 (SCA) at p 871 C -F (par 10) and again at p 872 A (par 16).
5 LC Diamond Cutting v Diamond Cutting Board 1983 (2) SA 760 (W) at p 766 B - 767 D.
Lepogo-uitspraak
08/0612005 12:40 PM

-5-
that of no other satisfactory remedy. If, as applicant submits in discussing the next
requisite, it cannot claim the loss of profits that it will suffer if the tender is not awarded to
it from respondent, this will be an important fact in tipping the scales towards applicant in
considering the balance of convenience. Respondent avers that the balance of convenience
does not favour the granting of the interim interdict sought by applicant. The facts relied
upon by respondent for this submission are set out in the answering affidavit and relate to
the inconvenience which would result if the matter is not finalised now.
There can be no doubt that when respondent made its decision in November 2004 not to
award the tender to applicant, it would have been aware that problems will arise with the
supply of water to residential stands in Hammanslcraal West. Yet it proceeded to take the
decision without investigating the matter properly and without affording applicant the full
opportunity to make representations to it in regard thereto. Respondent furthermore did not
hesitate to delay matters by failing to give applicant full and proper reasons for its refusal
to award the tender to it. I agree that the Respondent gave evasive replies to applicant's
enquiries in several letters. It was only on 7 April 2005 that (incomplete) reasons were
furnished by respondent why applicant's tender had not been accepted. It am convinced
that had these reasons been given at the beginning of December 2004, this application
would have been brought at that time. In these circumstances and where the delay was
caused by respondent's evasive and incomplete replies, it does not behove respondent to
Airoadexpress v Durban Local Road Transport Board, 1984 (3) SA 65 (NPD) at p 70 C - E
Lepogo-uitspraak
08/0612005 12:40 PM

-6-
complain that it or the residents of Hammanskraal West will be prejudiced by the delay. It
appears in any event that the water capacity problem in Hammanskraal West will only
become worse within the next eleven months. By that time the review application will
probably have been finally adjudicated upon. That the possibility exists that an additional
sectional steel tank may be erected to supply the residents of Hammanskraal West with
water.
[8]In inter alia the following matters the Supreme Court of Appeal considered review
applications resulting from the refusal by a state organ to award a tender: Olitzki Property
Holdings v State Tender Board and Another, 2001 (3) SA 1247 (SCA); Logbro Properties
CC v Bedderson NO and Others, supra; Transnet Ltd v Goodman Bros (Pty) Ltd, supra .In
all of these matters there was delay in completing the works forming the subject matter of
the tender as a result of the review application. In none of these matters was the resulting
delay considered as being a bar to the review application. As appears from the discussion
of the last requisite for an interim interdict, applicant will not be entitled to claim the loss
of profit that it will suffer as a result of respondent's refusal to award the tender to it. In
these circumstances there can be no doubt that the prejudice that applicant will suffer if the
interdict is not granted will outweigh any prejudice that respondent may suffer if the
interdict is granted.
No Other Satisfactory Remedy
[9] It was submitted by Mr Delport, for the applicant, that apart from review proceedings
the only other remedy that could in the circumstances of the present case possibly have
constituted an alternative satisfactory remedy would have been an action for damages in
Lepogo-uitspraak
08/06/2005 12:40 PM

-7-
which applicant could have claimed from respondent the loss of profit suffered by it as a
result of the fact that the tender had not been awarded to it. It was also submitted that even
if such a claim for damages had been available to applicant, it would in the circumstances
of the present case not have constituted a satisfactory alternative remedy to the review
proceedings launched by applicant against respondent: the shadow cast over applicant's
reputation by the allegation that it is guilty of "fronting" would remain; the action for
damages will not only take a considerable time to finalise, but will also be costly; a high
proportion of such costs will constitute attorney and client costs that cannot be recovered
from respondent; damages in the form of loss of profit will be difficult to prove and
applicant will receive no interest on any amount of damages that it may eventually prove.
[10] In Olitzki Property Holdings v State Tender Board and Another (an unreported
judgement of Eloff JP in this division) it was held that where a tender board irregularly and
unreasonably refused to award a tender, the tenderer would not be entitled to claim either
constitutional damages or loss of profit from the tender board. The learned judge was of
the view that the availability to the plaintiff of a remedy of review precluded it from
claiming damages for its loss of profit. See in this regard the judgment of the SCA in
Olitzki Property Holdings v State Tender Board and Another, 2001 (3) SA 1247 (SCA) at
p 1255 I - 1 (par [8]).In Olitzky the SCA came to the same conclusion. It was held that
where a tender board irregularly failed to award a tender, the tenderer would be entitled to
an interdict prohibiting the defendant from continuing the tender process and would be
entitled to take the decision on review. The tenderer would, however, not be entitled to
Lepogo-uitspraak
08/0612005 12:40 PM

-8-
claim either constitutional damages or loss of profit from the tender board. It is true that
the Olitzky case was decided with reference to the Interim Constitution. The reasoning in
this case will, however, apply a fortiori with reference to the provisions of our present
Constitution.
Costs
[11]     I agree that this application warranted the employment of two counsel and that
respondent should be ordered to pay the costs of the postponement on 19 May 2005. The
postponement was occasioned by respondent's initial refusal to postpone the date on which
it would take a decision in respect of the award of the tender and took place at the request
of respondent.
[I2J I make the following order:
Respondent is prohibited from awarding tender C78/43070 to any other contractor other
than applicant pending the final adjudication of the application for review launched by
applicant in this Court under case number 14991/05.Respondent is ordered to pay the costs
of this application, such costs to include the costs of two counsel as well as the costs
occasioned by the postponement of the matter on 19 May 2005.
         JCW van Rooyen   .....................
Acting Judge of the High Court
6 June 2005
For the applicant: PP Delport SC
Lepogo-uitspraak
08/0612005 12:40 PM

For the Respondent: adv AT Ncongwane
Lepogo-uitspraak
08106/2005 12:40 PM
-9-