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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 40767/2019

Not reportable

In the matter between:

AIRPORTS COMPANY SOUTH AFRICA SOC LTD                                    Applicant

and

LEBOLEX (PTY) LTD                                                                       First Respondent

F&R CATAI TRANSPORTATION SOLUTIONS (PTY) LTD       Second Respondent

FUTURE AFRICA CONSULTING AND TRAINING (PTY) LTD      Third Respondent

GRIMMS AUTO SERVICES (PTY) LTD                                       Fourth Respondent

SKY ROCKET TRADING (PTY) LTD                                               Fifth Respondent

J U D G M E N T

MAIER-FRAWLEY J:

 

Introduction

1. The applicant, an organ of State, seeks the review and setting aside of its own decision to award a tender and contract for the provision of fleet maintenance services to the first respondent, Lebolex (Pty) Ltd (Lebolex).

2. On 21 May 2018, ACSA invited service providers to tender for the provision of vehicle maintenance and related services in respect of its fleet of 144 vehicles located at three identified sites, namely, OR Tambo international airport (ORTIA),[1] Cape Town International airport (CTIA) King Shaka International Airport (Durban) (KSIA). Lebolex was one of the tenderers who complied with all the requirements of the Request for Proposals (RFP). It is common cause that ACSA’s award of the tender and subsequent contract to Lebolex was made pursuant to a fair, transparent, equitable and competitive bidding process.

3. ACSA relies on two grounds of review. The first is that it committed a material mistake of fact during the bid evaluation process, which led to the tender being awarded to Lebolex and the resultant conclusion of a service agreement with Lebolex. The error made by it allegedly arose on account of its misunderstanding about what the price, as quoted by Lebolex in respect of its ‘monthly administration fees’, encompassed or embodied. ACSA says that it misunderstood the fact that the price quoted by Lebolex was calculable on a ‘per vehicle’ basis, as opposed to a ‘per site’ basis - which ACSA had mistakenly understood to be the case. On account of its own error, so it averred, Lebolex’s pricing was assessed by it on a ‘per site’ basis. On a per vehicle basis, the fixed monthly administration fee payable under the contract would amount to R237,600.00 (R1560 x 144 vehicles) per month, as opposed to a cost of R4,680.00 (R1560 x 3 sites) per month when calculated on a ‘per site’ basis. The error, says ACSA, resulted in it awarding the tender to the bidder (Lebolex) whose price (in respect of its monthly administration fees), as calculated on a ‘per vehicle’ basis, was higher than the prices quoted by the other qualifying bidders and who, but for the error, would have scored the lowest points on price. The error, says ACSA, ultimately rendered the contract not cost effective and as such, failed to comply with relevant statutory and constitutional prescripts, and is thus unlawful. The second, is based on an alleged material misrepresentation made by Lebolex as to its national and regional dealer footprint, which ACSA contends, entitles it have the award and contract set aside.

4. The second to fifth respondents are the bidders who were disqualified on the basis that their quoted prices were evaluated to be higher than that of Lebolex, based on Acsa’s alleged mistake in evaluating Lebolex’s bid (on a per site basis) as the cheapest of the five qualifying bids.  The second to fifth respondents were cited as interested parties in the proceedings but took no part therein. As an aside, no prejudice was claimed by them as a result of any error committed by ACSA in excluding their bids.

5. Prior to the hearing of the application, I requested the parties to file further written submissions on the question of whether or not the doctrine of peremption would apply in the context of the present proceedings. I did so unaware at the time that any application for a review of the Final arbitration Award granted in favour of Lebolex against ACSA had been instituted by ACSA.  I am grateful to the parties for their well-researched submissions that were provided in that regard. Upon receipt of the heads, I was apprised of the fact that a review application had been instituted by ACSA, which review application has however being held in abeyance, pending the outcome of these proceedings. In the result, the issue of peremption was not pursued at the hearing of the matter.

 

Condonation

6. ACSA seeks condonation for any delay in bringing its review application, should it be found that the application was brought ‘unreasonably out of time’. Lebolex opposed the condonation application. For purposes of adjudging whether there was any delay, the following facts are relevant:

7. ACSA’s decision to award the tender to Lebolex was made on 27 September 2018.  The review application was instituted on 18 November 2019. ACSA alleges that the date on which it became aware ‘of the fact that there was no meeting of the minds between itself and Lebolex and that Lebolex’s tender was not in fact the most cost effective and should never have scored the highest on price’ was when Lebolex delivered its ‘quotation’ on 15 March 2019, which evidenced that Lebolex’s contract administration fee had been computed on a per vehicle basis. ACSA sought to engage with Lebolex on the issue, whereafter it became clear that a material dispute had arisen between the parties as to whether or not ACSA had in fact made an error when awarding the tender and contract to Lebolex, and if it did, whether such an error was uncontentious. A dispute was declared under the provisions of the contract and arbitration proceedings were instituted by Lebolex on 14 June 2019.

8. On 16 July 2019, ACSA sought legal advice on whether the award by it of the contract to Lebolex was lawful, inter alia, for purposes of pursuing its opposition in the arbitration proceedings. A legal opinion was received on 31 July 2019, but, says ACSA, ‘There were several angles to the advice that ACSA received, and it required some time to consider these different permutations, while at the same time dealing with the arbitration proceedings. Between the period of 27 August 2019 and 2 October 2019 ACSA was delayed by the fact that it received what seemed to be conflicting legal advice from the initial legal representative who was placed on brief to prepare papers in respect of these proceedings.’

9. ACSA's points in limine were ventilated before the arbitrator on 11 October 2019.[2] It avers that it was only thereafter, that could it focus on this review application, which was launched on 18 November 2019, within a period of 9 months after it became aware of the error relied on by it in this application.

10. ACSA submits that it is in the interests of justice for this court to adjudicate this dispute. It further contends that there is no prejudice to Lebolex because ACSA has been making payment of the invoices for work that it has been doing, barring the line item in dispute - contract administrative fees - but that there would be a greater prejudice to ACSA's ‘limited budget and importantly the public fiscus’ if the review application was dismissed ‘on a narrow technicality that is time.’

11. In Khumalo,[3]  the constitutional Court cautioned courts to be ‘slow to allow procedural obstacles to prevent [them] from looking into a challenge to the lawfulness of an exercise of public power.’ Ultimately, the overriding factor is whether it is in the interests to grant condonation. [4] The Constitutional Court has also confirmed that, unlike a review in terms of The Promotion of Administrative Justice Act, 3 of 2000 (PAJA), a review under the doctrine of legality is not subject to a 180-day time bar. The guiding factor is whether the application has been brought within a reasonable time.[5]

12. I have decided to exercise my discretion in favour of granting condonation, given that: (i) ACSA has satisfactorily accounted for what it did during the 9 month period before launching this application,[6] and given the importance of the matter to ACSA; and (ii) the delay has been satisfactorily explained; and (iii) Lebolex has not substantiated what prejudice it has suffered or will suffer by what is ostensibly a three month delay in instituting these proceedings, that is, when regard is had to PAJA, which allows for a period of 180 days within which to launch a review application.

 

Contextual Setting

13. It is common cause that Lebolex commenced providing services under the Services Agreement (contract) it concluded with ACSA on 7 March 2019 for the provision of fleet maintenance services. It rendered its first invoice on 19 March 2019 (and further invoices in the months that followed) in which it claimed payment of its monthly administration fee, as calculated on a ‘per vehicle’ basis. ACSA disputed that it was obliged to pay the agreed management fee, as calculated on a per vehicle basis, alleging that it was only obliged to pay the alleged agreed fee, calculated on a ‘per site’ basis.

14. The initial monthly administration fee that had been quoted by Lebolex was R3117.15 per month. Prior to the award of the tender, the parties entered into negotiations for purposes of establishing Lebolex’s ‘best price’. The agreed fee of R1560.00 was the revised price proposed by Lebolex, which ACSA had accepted pursuant to its receipt of Lebolex’s Best and Final Offer (BAFO), dated 30 August 2018, in that amount.

15. Given that a dispute had arisen in respect of the amount owed by ACSA in respect of the monthly contract administration fee, Lebolex invoked its rights under clause 26 of the contract concluded between itself and ACSA, requiring ACSA to submit to binding arbitration under the auspices of AFSA. ACSA submitted to arbitration and an exchange of pleadings commenced in June 2018. 

16. ACSA raised two special pleas in the arbitration proceedings.[7] The first was that the arbitral tribunal lacked the requisite jurisdiction to determine the dispute inasmuch as the contract was alleged to be unlawful since it was concluded pursuant to an irregular procurement process (the jurisdictional challenge).[8] Thus, ACSA raised the invalidity of the contract (on account of a material mistake of fact committed by it in awarding the tender and subsequent contract to Lebolex) as a collateral challenge[9] (i.e., as a defence, not a frontal challenge) in the arbitration proceedings in which Lebolex sought specific performance and hence enforcement of the contract. The second was that the contract was void ab initio on account of a lack of consensus ad idem between the contracting parties apropos the price payable in respect of the monthly administration fee (the dissensus ad idem defence). The jurisdictional challenge was dismissed in the arbitrator’s first ‘Partial Award’, dated 11 March 2020.[10] The arbitration proceedings thereafter advanced to a hearing, where oral evidence was presented on behalf of both parties. The arbitration concluded with the arbitrator rendering a second ‘Final Award’ on 13 August 2020 in favour of Lebolex, in which the arbitrator dismissed the dissensus ad idem defence, finding, inter alia, that ACSA was at all material times aware that Lebolex’s ‘per vehicle’ pricing model was being considered during the negotiation phase of the evaluation process and that ACSA had understood and had acquiesced in Lebolex’s pricing model on a ‘per vehicle’ basis. The undisputed and unrefuted expert evidence presented by Lebolex at the arbitration hearing established that the award was cost effective, and the arbitrator’s Final Award acknowledged same by virtue of the factual finding made in that regard by the Arbitrator.[11] It bears mentioning that the Arbitrator also made a factual finding, based on the evidence presented at the arbitration, that no material misrepresentation had been made by Lebolex, such as to entitle ACSA to avoid the contract.

 

Present review premature?

17. If parties choose arbitration, courts endeavour to uphold their choice and do not lightly disturb it.^[12] As stated in Lufuno,[13] ‘The decision to refer a dispute to private arbitration is a choice which, as long as it is voluntarily made, should be respected by the courts. Parties are entitled to determine what matters are to be arbitrated, the identity of the arbitrator, the process to be followed in the arbitration, whether there will be an appeal to an arbitral appeal body and other similar matters.’

18. Axiomatically, the purpose of arbitration proceedings is to resolve a dispute by the production of an award by the designated arbitrator. In terms of section 28 of the Arbitration Act 42 of 1965 an award is binding on the parties. The exact consequences of an award are provided for as follows in that section, namely:

‘Unless the arbitration agreement provides otherwise, an award shall, subject to the provisions of this Act, be final and not subject to appeal and each party to the reference shall abide by and comply with the award in accordance with its terms.’

19. Section 31 of the Arbitration Act provides for the award to be made an order of court. In Lufuno[14], the court cautioned that ‘it should be borne in mind that arbitration awards are given effect by the ordinary courts. So if a party refuses to obey an award, the law provides for the enforcement of the award by the ordinary courts.’[15] The court further pointed out that “the extent to which the judiciary may scrutinise arbitration awards... is a matter which is regulated by section 33(1) of the Arbitration Act. This section provides relatively narrow grounds for setting aside an arbitration award as follows:

‘Where—

1. any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or umpire; or

2. an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded its powers; or

3. an award has been improperly obtained,

the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.’”[16]

20. ACSA has not sought to have its application to review and set aside the arbitrator’s awards determined before a hearing of the present review. Whilst ACSA has launched an application for the review of the arbitrator’s awards, its stance is that it has deliberately held such proceedings in abeyance, pending the outcome of this review. The insurmountable difficulty for ACSA in this regard is that there are presently two arbitration awards extant, which, as a matter of law, remain valid and binding on the parties until such time as they are reviewed and set-aside by a Court. I raised this aspect with counsel representing the parties at the outset of the hearing and queried whether it would not be premature for me to engage the present review, given that it would be futile to do so whilst the arbitration awards stand as valid and binding on the parties. ACSA insisted on proceeding with this review, notwithstanding that it had no cognizable answer in law to the fact that, as matters stand, it remains legally bound to an arbitration award, in which the validity of the contract it seeks to have set aside in these proceedings, was upheld.  Stated differently, assuming a decision favourable to ACSA is made in these proceedings, pursuant to which the contract awarded to Lebolex would possibly fall to be set-aside as unlawful (and possibly the arbitration clause contained therein), would such decision be capable of implementation in the light of the fact that two valid and binding arbitration awards, which dismissed the jurisdictional challenge brought by ACSA and which upheld the validity of the contract, is extant? I think not.

21. First, both arbitration awards exist in fact and have produced consequences in fact. The parties to the arbitration may ordinarily arrange their affairs according to expectations built on such decisions.  Second, the courts are the ‘arbiters of legality’.[17]  So, decisions upon which arbitration awards are premised cannot be ignored unless set aside by court.  They are effectual, even if they are invalid, at least, until set aside by court.  If indeed ACSA was aggrieved by any aspect of the arbitrator’s awards, its remedy was to challenge same by way of a review. It was not for it to set up a parallel process and then to adopt the stance that it preferred the outcome of a public review process and was thus free to ignore that which was conducted under the auspices the private arbitration in which it had consensually participated. Thus, as matters presently stand, absent a review, the arbitration awards are binding on ACSA.

22. Second, given the existence of the arbitration awards, and accepting that this court retains the competence to make a declaratory order pertaining to constitutional invalidity,[18] would it be proper to do so, given the elementary principle that courts should refrain from making orders that hold no practical or legitimate advantage or which cannot be enforced?[19] I think not. In circumstances where the arbitration awards have not been set aside by a court (which awards ACSA may possibly never succeed in having set aside, given the narrow grounds on which such a review is to be determined), in my view, even if a court could theoretically declare the contract in question to be invalid, it would have been far more opportune, for the reasons given, to have determined such aspect once the pending review of the arbitration awards had been determined. In the circumstances, in my view, the set down of the present review is premature.

23. Undeterred by the aforementioned constrictions, ACSA nonetheless persisted, with fairly intransigent insistence, that the merits of this review should be entertained and determined at this juncture. In the light of its stance, the respondent indicated during argument that it would seek a dismissal of the application on this ground too.

 

Merits of review

Broader factual matrix

24. The relevant background facts are largely common cause between the parties. On 21 May 2018, ACSA issued a request for proposals (RFP) issued under tender No. COR 197/2018 for the provision of fleet maintenance services including the supply of batteries, tyres and related maintenance in respect of its fleet of 144 vehicles based at OR Tambo (72 vehicles); ACSA’s corporate office (5 vehicles); CTIA (37 vehicles); and King Shaka Airport in Durban (30 vehicles). The objective of the RFP was ‘to maintain the serviceability of ACSA owned fleet vehicles in a sustainable matter at the lowest operating and maintenance costs.’

25. Bids were to be evaluated in four stages. For present purposes, stage 3 concerned an evaluation of price and preference (B-BBEE) whilst stage 4 provided for post-tender negotiations. Having complied with the requirements of the RFP, Lebolex advanced to stage 4 of the evaluation process.

26. In relation to price and BEE, in terms of the RFP, the evaluation would be based on the PPPFA preference point system of 80/20. Price would amount to 80 points, whilst preference would be 20 points. The award of business would be made to a bidder which has scored the highest overall points for this stage of the evaluation, unless objective criteria exist, justifying an award to another bidder or ACSA splits the award or cancels the tender.

27. The RFP stipulated that the failure by a bidder to submit a priced offer using the prescribed schedule (in the format attached to the RFP) would render the bid liable to disqualification. This was to enable ACSA to easily compare competing bids on price. The prescribed schedule[20] did not stipulate whether the price to be quoted therein was per vehicle or per site, although further stipulations contained therein made provision for a breakdown to be given by a bidder of its quoted price in the prescribed schedule in separate prescribed pricing documents.

28. Lebolex complied with the requirements of the RFP, including the prescribed schedule, and its bid was evaluated in accordance with the provisions of the RFP. Lebolex received the highest score on price and B - BBEE. On this basis, ACSA’s Bid Evaluation Committee (BEC) recommended to its Bid Adjudication Committee (BAC) that Lebolex be appointed to provide ACSA’s fleet maintenance and related services and that ACSA enter into negotiations with Lebolex, the object of which was to review, inter alia, the latter’s pricing for the contract.

29. As Lebolex’s quoted price in respect of its monthly contract administration fee appeared substantially lower than that of its competitors, the BAC did not accept the recommendation of the BEC. It required the BEC to obtain clarity from Lebolex as to how the monthly administration fee had been computed by it.

30. On 22 August 2018, correspondence was addressed to Lebolex, in which it was requested to indicate, inter alia, how its quoted monthly administration fees were calculated and to provide a breakdown ‘of what informs the monthly costs.’

31. On 28 August 2018, representatives of the parties attended a meeting at which Lebolex clarified its pricing and the format of its submission of its pricing.[21] It was agreed at this meeting that ACSA would forward a spreadsheet to Lebolex to complete so as to allow ACSA to compare pricing between two shortlisted bidders, one of which was Lebolex. Following this meeting, in a letter dated 29 August 2018,[22] Lebolex forwarded its written response to ACSA’s request for price clarification in respect of inter alia, the monthly administration fees quoted by it, utilising the format of the spreadsheet provided to it by ACSA for this purpose.[23] Lebolex’s letter contained a breakdown of its calculation of the monthly administration fee on a rate per vehicle basis. The schedule provided to ACSA and utilised by Lebolex in clarification of the price, made provision for a base price, number of vehicles to which it applied and the fixed cost per month, calculated by multiplying the base price with the number of vehicles to be serviced (144 vehicles).

32. The parties embarked on negotiations in respect of price, which culminated in Lebolex submitting its Best and Final Offer (BAFO) to ACSA, utilising the prescribed schedule provided for in the RFP, in which it reflected a reduced base price of R1560.00 in respect of the monthly contract administration fee.

33. On 27 September 2018, based on the BAFO, ACSA’s Central Bid Adjudication Committee (CBAC) considered and approved the appointment of Lebolex for the provision of the services as set out in the RFP.

34. On 4 October 2018, ACSA awarded the tender to Lebolex in accordance with the CBAC’s approval and on 8 October 2018, Lebolex accepted the award in writing.

35. On 7 March 2019, the parties concluded a ‘Services Agreement’ in terms of which Lebolex would provide services to ACSA, pursuant to the RFP, for a period of three years. Lebolex commenced providing the services on 1 March 2019. On 19 March 2019, it rendered an invoice to ACSA in respect of the contract administration fee, calculated on a per vehicle basis.

 

ACSA’s case

36. ACSA’s case, advanced in paragraph 76 of its founding affidavit, is the following: ACSA alleges that it ‘made a material mistake of fact in relation to the nature and/or total of Lebolex’s financial offer and, had ACSA construed Lebolex’s financial offer in the same way that Lebolex construed it, Lebolex would not have scored the highest points and would not have advanced to the post-tender negotiation phase and the conclusion of the contract.’ ACSA contends that its decision to award the tender and to conclude the contract with Lebolex is ‘contrary to law and thus void at root.’ This is so because the award of the tender and contract did not comply with section 217 of the Constitution (not being cost-effective) the Public Finance Management Act, 1 of 1999 (PFMA) or ACSA’s Supply Chain Management Policy (SCM policy).[24]

37. In paragraph 16 of the founding affidavit, ACSA alleges that when it awarded the contract to Lebolex, it was under the mistaken impression that the bid submitted by Lebolex was the most cost-effective. In particular, it believed that the fixed contract administration fee quoted by Lebolex was formulated on a per site basis, based on the number of sites at which Lebolex would be contracted to work.[25] On a calculation of the contract administration fee on a per site basis, Lebolex’s bid appeared to be the most cost-effective. Lebolex was thus the bidder that had scored the highest points on price (and B-BBEE). It further alleges that it discovered ‘for the first time’ that the price quoted by Lebolex was not in fact the lowest price but the highest price, rendering Lebolex’s tender the most expensive, and thus the least cost-effective, when it received Lebolex’s first invoice in March 2019, and then discovered that Lebolex’s quoted contract administration fee was computed on a per vehicle basis On a calculation of the price quoted on this basis, Lebolex’s price was far in excess of those quoted by the other bidders.

 

Lebolex’s case

38. On a proper reading of the answering affidavit, Lebolex opposes the application on the basis, inter alia, that:

38.1. ACSA failed to make out a proper case to demonstrate the error it relies upon or ‘where exactly is the mistake’ – in essence, this is a dispute about the identification by ACSA of an incontestable material fact relied on by it for its error; or, if it is to be said that the fact on which ACSA was mistaken about was that Lebolex’s quoted price pertaining to the fixed monthly administration fees was formulated on a ‘per site’ basis, whereas it was formulated on a ‘per vehicle’ basis and ought to have been assessed as such, then such fact remained in contention;  

38.2. ACSA failed to demonstrate that Lebolex’s pricing was not cost-effective and thus, its conclusion that its decision to award the tender and contract to Lebolex did not conform to the relevant statutory and constitutional prescripts, was not factually sustainable;

38.3. Lebolex submitted its bid and price offers to ACSA in compliance with the terms of the RFP. In terms of the RFP, bidders were required to only price in accordance with ACSA’s pricing schedule appendices to enable ACSA to compare priced offers. The pricing schedule appendices were set out in Appendix N to the RFP. Appendix ‘N’ inter alia, required bidders to complete a separate proposed rates and pricing schedule and include a complete cost and pricing data breakdown for labour costs in the pricing schedule. Lebolex complied with such requirement, as evidenced by Annexures ‘LEB3’ to the answering affidavit and ‘LN6’ to the founding affidavit, which comprise the relevant and valid pricing documents completed and submitted by Lebolex under the RFP. Its pricing document contained in ‘LEB3’ in any event made it clear that the price quoted for the monthly contract fee was a reference to a rate per vehicle, based on the number of vehicles to be serviced at each of the airports. Lebolex’s price in respect of the contract administration fee was also later specifically clarified as being calculable on a rate per vehicle basis. [26]

39. Accordingly, the error of fact alleged by ACSA to have been made by it, remained in contention on the papers filed in these proceedings. The question of whether the error was based on an uncontentious and verifiable material fact, such that it meets the required standard for review, also remained in dispute between the parties.

 

Evaluation

Mistake of fact

40. It is now well established, since Gjima,[27] that an organ of state who seeks to review and set aside its own decision must do so under the principle of legality.

41. In Fedsure, [28] it was said that ‘[i]t seems central to the conception of our constitutional order that the Legislature and Executive in every sphere are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law...it is a fundamental principle of the rule of law, recognised widely, that the exercise of public power is only legitimate where lawful.’

42. Our courts have recognised mistake of fact as a ground of review.[29] The principles governing a review on such ground were conveniently summarised by Unterhalter J in Tswelokgotso,[30] as follows:

“ In Pepcor, the SCA reasoned that a functionary cannot render a proper decision made in ignorance of material facts. But then cautioned that, in order to avoid collapsing the distinction between appeal and review, where the functionary is vested with the power to determine whether facts exist and whether facts are relevant, a court on review could not interfere if the functionary was in error as to these matters……the ambit of review for mistake of fact…rests on the proposition that a functionary may not lawfully make a decision based upon an error as to the material facts unless the functionary enjoys the power to establish those facts, in which event such an error is not reviewable.

In Dumani,…the SCA held that where the functionary enjoys the power to make findings of fact, mistake of fact as a ground of review is confined, following English law, to situations in which a mistake is made as to an existing material fact, established in the sense of being uncontentious and objectively verifiable.

Even where the functionary enjoys competence as the finder of facts, an error made as to a material fact that was established, in the requisite sense, is reviewable. The qualification in Pepcor ousted review for mistake of fact, even if material, where the functionary enjoyed the power to determine the relevant facts. In Dumani, a functionary, though empowered as a finder of fact, who renders a decision mistaken as to a material fact which was established as uncontentious and objectively verifiable, has made a reviewable error.

In sum, a court may interfere where a functionary exercises a competence to decide facts but in doing so fails to get the facts right in rendering a decision, provided the facts are material, were established, and meet a threshold of objective verifiability. That is to say, an error as to material facts that are not objectively contestable is a reviewable error.

The exercise of judgment by the functionary in considering the facts, such as the assessment of contested evidence or the weighing of evidence, is not reviewable, even if the court would have reached a different view on these matters were it vested with original competence to find the facts.

The articulation of mistake of fact as a ground of review in Pepcor and Dumani is rather more exacting as to what kind of facts a functionary would have to be mistaken about in order to give rise to reviewable error.

… to make out a case on review on the basis of mistake of fact, an applicant must show that the decision was vitiated by error as to a material fact that is uncontentious and objectively verifiable. (own emphasis)

43. As can be gleaned from the above, it is not the fact than an error was committed by ACSA (or the results of the error committed by ACSA) that must be objectively verifiable; it is the material fact about which ACSA was mistaken that is required to be uncontentious and objectively verifiable to meet the required standard for review.

44. The applicant contends that it erred factually when it concluded that Lebolex’s tender in respect of its monthly contract management fee was based on a cost per site (as opposed to a cost per vehicle at each site). Had it taken its decision based on the proper facts, it would not have concluded that Lebolex’s tender was (i) the cheapest comparative to other tenders being adjudicated or (ii) cost-efficient. Its factual error, so it contends, was material, as it was the direct cause of the decision to award the contract to Lebolex.

45. But what uncontentious and objectively verifiable material fact was ACSA mistaken about? Both in the arbitration proceedings and in its papers filed in support of this review, whether or not Lebolex’s bid was formulated or submitted on a cost per vehicle basis (the supposed material fact about which ASCA was allegedly mistaken) remained a hotly contested issue between the parties. ACSA argued that the pricing schedule that was submitted by Lebolex with its initial bid indicated that the monthly contract administration fee was R3117.15[31] in respect of each of the sites listed in the pricing schedule. ACSA alleged in these proceedings that Lebolex had not ‘clarified’ its pricing as such but had sought, in its response to ACSA’s request for clarification of the price quoted by it in respect of the monthly management fee, to depart from its initial response to the RFP where, in ACSA’s view, it had quoted a contract administrative fee per site. That specific averment was, however, in dispute on the papers. That Lebolex’s quote was based on a contract administrative fee per site thus remained in contention in these proceedings. It cannot therefore be said that ACSA’s error was in relation to an uncontentious and objectively verifiable material fact.  ACSA’s averments do not therefore meet the standard for reviewable errors of fact.

46. How or why the BAC came to fall into error on this score is in any event not explained by ACSA in circumstances where it had embarked upon a fact finding mission in seeking clarification of how the monthly management fee was computed, and given that it also had in its possession, Annexure ‘LEB3’ which indicated that the initial contract administration fee (R3117.15) depicted in Lebolex’s pricing document (Annexure ‘LN6’ to the founding affidavit) was based on a price per vehicle, as indicated in the breakdown provided by Lebolex in its further pricing document, annexure ‘LEB3’ to the answering affidavit.[32]  To borrow from the words of Unterhalter J,[33] ‘ACSA has failed to make a case on the basis of facts that are uncontentious and verifiable. Accordingly, if the BEC [or BAD] did fall into error, that error is not shown to be based on material facts that meet the required standard.’ Accordingly, this ground of review must fail.

 

Misrepresentation

47. The applicant relied on an additional ground of review based on a misrepresentation by Lebolex of its ‘National Footprint’ in its founding affidavit. Although this ground was not pursued at the hearing of the matter, nor were any oral submissions advanced in support thereof, I deal with it in so far as it was mentioned in the written argument presented on behalf of ACSA.

48. The case advanced by ACSA in the founding affidavit is tersely set out in as follows in the founding affidavit:

“ 81. Clause 2.3.2 of the RFP requires bidders to provide a detailed national footprint, especially in Johannesburg, Cape Town and Durban. Lebolex, in its technical proposal responded to this clause by stating as follows: ‘The BB Motor Group has an extensive dealership network in Gauteng and Limpopo. However, BB Motor Group has been able to source service agreements with other dealerships in Cape Town and Durban to help with the required service provision. Attached as Annexure is an agreement with the other dealerships in Cape Town and Durban.’

82. What Lebolex represented above, is contrary to what was happening at both CTIA and KSIA. Services at both airports were not being rendered on a continuous basis, as there were periods where nothing was happening and ACSA had to constantly follow up on outstanding purchase orders. We attach hereto correspondence sent to Lebolex as annexure (LN23) and (LN24), where ACSA communicated with Lebolex regarding its non-performance. Whilst ACSA acknowledges that Lebolex is currently rendering services at both CTIA and KSIA, such services are not as frequent as how they are rendered at OR Tambo International Office. Further, such services are not at the level as required by ACSA.

83. Accordingly, ACSA is of the view that Lebolex misrepresented to it that had a national and regional footprint.”

49. Lebolex disputed any non-performance or mal-performance by it in the answering affidavit. It averred that ‘Lebolex remains compliant with clause 2.3.2 of the RFP and has national/regional dealer footprint.’ It further averred that ‘contract performance issues’ are to be dealt with in terms of the contract, and are not relevant to the review application.

50. Lebolex’s allegations were not dealt with by ACSA in reply, but in any event, ACSA’s allegations remained unsubstantiated by primary facts upon which any conclusion of misrepresentation or sub-standard or non-performance was based.[34]

51. ACSA specifically submitted in its written argument that its application was not based on any non-compliance by Lebolex with the RFP. That concession carried the consequence that Lebolex’s bid complied in all respects with the specifications and conditions set out in the RFT. Lebolex would thus have satisfied ACSA of its national/regional dealer footprint in the bid it submitted, inter alia, of its claimed ‘extensive dealership network in Gauteng and Limpopo’ as well as ‘service agreements with other dealerships in Cape Town and Durban to help with the required service provision’.

52. ACSA has accordingly failed to establish that Lebolex misrepresented its national and regional dealer footprint, whether with same having had a direct impact on its performance, or at all, such as would entitled it to seek to review and set aside the award of the tender and contract to Lebolex on the ground of material misrepresentation. Accordingly, the review on this ground too, must fail.

 

Costs

53. ACSA relied on Merafong,[35] for its submission that it was legally obligated to seek redress for its (perceived) unlawful decision. It is correct that constitutional rights, duties and obligations were implicated in the present matter.

54. In Biowatch,[36] the Constitutional Court confirmed that the general rule for an award of costs in constitutional litigation between a private party and the state is that if the private party is successful, it should have its costs paid by the state, and if unsuccessful, each party should pay its own costs.

55. Lebolex having been successful in this litigation, it is entitled to its costs.

56. In the result, the following order is granted:

 

ORDER

1. The late institution of the application is condoned.

2. The application is dismissed with costs.

 

 

 

________________

MAIER-FRAWLEY J

 

Date of virtual hearing:                       7 October 2020

Judgment delivered                            10 November 2020

 

This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on Caselines and release to SAFLII. The date and time for hand-down is deemed to be have been at 10h00 on 10 November 2020.

 

APPEARANCES:

Counsel for Applicant:                        Ms N. Muvangua

Attorneys for Applicant:                     Mncedisi Ndlovu & Sedumedi Attorneys

Counsel for First Respondent:             Mr DA De Kock

Attorneys for First Respondent:          Mfusi & Co Attorneys

 

[1] Vehicles based at ACSAS’s corporate office in Bedfordview, Johannesburg, were included as part of ORTIA (Johannesburg).

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