---

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 27907/2018

In the matter between:

JL EXCAVATORS (PTY) LTD                                                    Applicant

and

THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY  First Respondent

DR MOEKETSI MOSOLA                                                         Second Respondent

MUSA KHUMALA                                                                      Third Respondent

VELAPHI NGCOBO                                                                    Fourth Respondent

UBUNTU TRANSPORT LOGISTICS (PTY) LTD                      Fifth Respondent

X MOOR TRANSPORT (PTY) LTD                                           Sixth Respondent

JUDGMENT

Maier-Frawley AJ:

Introduction

1.        In this urgent application the applicant seeks to interdict the first respondent from procuring goods and services from the fifth and sixth respondents in a constitutionally invalid manner.[1] The interdictory relief sought in application is said to be 'aimed at ordering the first respondent to comply with the principles of legality and to place orders in terms of Tender 46 in a legal manner.'

2.        The first respondent did not oppose the application but instead filed a Notice to Abide. Only the sixth respondent filed an answering affidavit and continued to oppose the application. During oral argument presented at the hearing of the application, the sixth respondent indicated that it was not principally opposed to the first respondent being interdicted from acting in breach of its obligations[2] but that it was rather opposed to the way in which the relief was framed in prayers 4 and 5 of the notice of motion, the broad contention being that any reference therein to the sixth respondent ought to be removed, and that the first respondent should instead be ordered to comply with the terms of the written Service Level Agreement[3] concluded by it with the Applicant and interdicted from deviating from the provisions of clause 9 thereof.

3.        The sixth respondent raised two objections to the hearing of the matter, the first of which related to the question of urgency and the second of which amounted effectively to a plea of non-joinder.

4.        The sixth respondent also brought an application to strike out certain allegations from the founding affidavit which are alleged to be vexatious and irrelevant, containing as they do, a reference to a named family whose members control the fifth and sixth respondents and which the sixth respondent contends carry imputations of dishonesty against the family.

5.         The material facts relevant to the issues before me are either common cause or not seriously disputed. The first respondent published an invitation to tender in respect of the corporate hire of various types of vehicles, equipment and machines. It was a requirement of the tender that a tenderer had to indicate specifically how many vehicles or machines it had available in respect of each type of vehicle and/or machine. The tender became known as 'Tender 46'. Pursuant thereto, numerous service providers were awarded the tender, including the applicant, the 5^th and the 5^th respondents, in relation to each individual type of vehicle or machine as provided for in Tender 46. This was done on the basis that the tenderer that scored the highest points (ordinarily the cheapest tenderer) was appointed as the preferred bidder. After the preferred bidder, numerous alternate bidders were appointed. Alternate tenderers were appointed on the basis that the alternate tenderer who had scored the highest points would be appointed as first alternate tenderer with the remaining alternate tenderers thereafter being appointed in a descending order on a sliding scale, based on the number of points scored by each of them. All the tenderers were appointed in terms of the Preferential Procurement Policy Framework Act, 5 of 2000 ('the PPPFA'), in particular, on the basis of a 90/10 preference point system. [4] Almost without exception, the cheapest tenderer was appointed as the preferred tenderer. The first alternate tenderer was the second cheapest and so forth down the scale. In certain categories of services, the applicant was appointed as the preferred bidder whilst in others, as alternate bidder. Pursuant to the award of the tender to the applicant the applicant, the first respondent concluded a written Service level Agreement ('the SLA') with the applicant, which inter alia, provided[5] for the procedure to be followed by the first respondent when placing orders for the procurement of services from service providers.

6.       The applicant's case (as pleaded in the founding affidavit) is that the first respondent has made use of the services of the 5^th and 5^th respondents in a manner which is in clear breach of the first respondent's obligations in terms of section 217 of the Constitution,[6] the PPPFA,[7] including the SLA[8] in that it has procured services from the 5^th and 5^th respondents (i) for more vehicles for which the 5^th and 5^th respondents had submitted a tender and (ii) without first submitting an order to a tenderer appointed ahead of the 5^th and/or 5^th respondents.

7.        The applicant alleges that the first respondent is almost exclusively utilizing the services of the 5^th and 5^th respondents, notwithstanding that this is costing the first respondent 'millions of Rands more per month/ and further that in instances where the 5^th and 5^th respondents were appointed as alternate tenderers, the first respondent is 'simply ignoring the preferred tenderer or the alternate tenderers appointed ahead' of the 5^th and 5th respondents.[9]

8.         The applicant is not aimed at forcing the first respondent to place orders with the applicant, only to order the first respondent to place orders in terms of Tender 46 in a legal manner, that is, by always approaching the higher ranking bidder first and thereafter the next bidder in line, on the basis that it is only if the higher ranking bidder is unwilling or unable to acccept the order that the first respondent is entitled to approach the next in line.

Urgency

9.         The sixth respondent objected to matter being heard on an urgent basis, contending that the applicant's case against the first respondent is, on a proper construction, one for specific performance of contract [the SLA], which had been

concluded pursuant to a fair tender process which had taken place within the precepts of section 217 of the Constitution.[10]

10.       The sixth respondent contends that the mere fact that contractual obligations have been breached by the first respondent does not in itself create a basis for urgency - this coupled with the fact that the alleged urgency arises only with regard to the applicant's financial state and its fears of bankruptcy, does not establish the requisite degree of urgency such as would entitle the applicant to be heard ahead of other litigants suffering actual or potential financial toss, but who have to wait their turn in the queue before being heard.

11.       The applicant's case is that the first respondent has been utilizing the services of the fifth and sixth respondents for the provision of more vehicles for which the fifth and sixth respondents submitted a tender and without first submitting an order to a tenderer appointed ahead of the fifth and/or sixth respondents, such conduct being in breach of the first respondent's contractual obligations under the SLA[11] but which is moreover in conflict with the overriding constitutional imperatives set out in section 217 of the Constitution,[12] and as such, unlawful. The orders placed in the manner described above are also alleged to be invalid.[13] It is common cause on the papers that during the month of April 2018 alone, the first respondent placed orders with the sixth respondent for the provision of 10 cube tipper trucks to the value of approximately R1.8 million. It is also common cause that the applicant was appointed as the second alternate tenderer in respect of this category of service, whereas the sixth respondent was appointed only as the eighth alternate tenderer. Moreover, the applicant' s tendered price for the provision of the 10 cube tipper trucks was cheaper than that of the sixth respondent. It is also not in dispute that the first respondent did not approach the applicant with an order in respect of the provision of 10 cube tipper trucks.

12.      The applicant avers that the first respondent's unlawful conduct is financially prejudicing the applicant. Should it be allowed to continue unabated, it will likely lead to the applicant ' s financial ruin and thereby undoubtedly adversely impact upon the financial stability of its 170 employees and their households. What is more, the applicant states that should the application be heard in the ordinary course, it will not be able to survive financially. Its finances have already reached a stage where it will have to lay off numerous employees.

13.       In Safcor Forwarding (Johannesburg) (Pt y) ltd v National Transport Commission,[14] Corbett JA held that '[n]aturally it is for the Court to decide whether the matter is really one of urgency and whether the circumstances warrant a departure from the normal procedures.'

14.       Having regard to the specific facts and circumstances, I am of the view that the matter was of sufficient urgency to justify the applicant approaching the Court on the notice provided for in the notice of motion. It should be borne in mind that the allegations against the first respondent involve ongoing unlawful conduct. Each month that the first respondent continues with its unlawful conduct, the applicant continues to suffer financially. It has long been recognized that the urgency of commercial interests may justify the invocation of Uniform Rule of Court 6(12) no less than any other interests,[15] although I add that each case depends on its own special facts and circumstances .

15.      I am consequently of the view that the challenge to the urgency of the application must fail.

Non-Joinder

16.       The applicant alleged in paragraph 12 of its answering affidavit that the applicant was awarded the tender as preferred provider in respect of five items, and as an alternative provider in respect of all others. The applicant's 'ranking' as alternate provider, ranges between 2 and 19. In certain instances therefore there may thus be 19 other 'higher ranking' providers than the applicant (the preferred bidder and 18 alternates). The sixth respondent submits that the relief sought by the applicant has a potential impact on the other 'higher ranking providers and as such, the applicant was obliged to join them to these proceedings.'

17.      Quoting from the case of Judicial Services Commission and Another v Cape Bar Council and Another,[16] in SSG Security Solutions (Pty) Ltd v Vaal University of Technology and Another,[17] Tuchten J stated as follows : ' Joinder of a party is only required as a matter of necessity, as opposed to convenience, if that party has a direct and substantial interest which may be affected pre judicially by the judgment of court in the proceedings concerned.' In para 35, the court went on to say that '... joinder must be examined in the light of the relief actually sought by the applicant in its notice of motion. Whether the applicant has claimed relief which is competent or whether the applicant will or will not in due course succeed is of no relevance to this enquiry.'

18.       In Judicial Services supra, Brand JA stated the following: 'The mere fact that a party may have an interest in the outcome of the litigation does not warrant a non -joinder plea. The right of a party to validly raise the objecti on that other parties should have been joined to the proceedings, has thus been held to be a limited one (see eg G Burger v Rand Water Board and Another 2007 (1) SA 30 (SCA) para 7;...'

19.       The applicant's case is that it is mainly the 5^th and 6^th respondents who are benefitting from the first respondent's unlawful conduct and it therefore became necessary to seek a mandatory interdict in order to prevent the harm thereby caused to the applicant from continuing.

20.       The applicant submits that the relief sought will not affect the other tenderers negatively. It will only force the first respondent to act lawfully. The argument is persuasive. The relief will not prejudice the 5^th or 6^th respondents (or any other tenderer) in the sense that they will not be deprived of anything to which they would otherwise not be entitled, however, they would still be able to secure that to which they are entitled, should the first respondent be ordered to implement its procurement processes in a correct and lawful manner. Seen from this perspective, where no rights are sought to be taken away from the tenderers, it cannot be said that there is a direct and substantial interest which may be affected prejudicially by the judgment of court. Accordingly, the point concerning

non-joinder must fail.

Striking Out Application

21.      The sixth respondent seeks an order in the following terms:

21.1.     That the last sentence in paragraph 7.10 and the contents of paragraph

7.24 in the founding affidavit be struck out as constituting vexatious averments;

21.2.     That the contents of paragraph 7.23 of the founding affidavit be struck out as constituting irrelevant averments;

21.3.     Costs of the striking out application.

22.    The last sentence in paragraph 7.10 reads as follows 'The first respondent is contractually obliged to firstly place an order with the recommended tenderer and thereafter with the next in line tenderer as it appears on the relevant list.' There is nothing vexatious about these averments and the sixth respondent correctly did not pursue this point in oral argument.

23.      In paragraph 7.23 of the founding affidavit, reference is made to pending proceedings against the 5^th and 6^th respondents respectively (in which the court is asked to set aside Tender 46 awarded to each of them) and in which proceedings, it is common cause that the first respondent had procured more vehicles from the 5^th and 5^th respondents than each of them had tendered for. In the present proceedings, the first respondent has not disputed that it procured more vehicles from the 5^th or 6^th respondents than what they tendered for, and the applicant therefore seeks to prevent the continuation of such unlawful conduct.

24.     In paragraph 7.24 of the founding affidavit the applicant goes on to aver that 'It was again only in respect of the two companies where the Naicker family is involved that the first respondent made the "gratuitous mistake" to appoint the fifth and sixth respondents for more vehicles than which was tendered for.'

25.     The applicant submits that a reference to the Naicker family carries a 'sting' and is suggestive of dishonesty because, as I understand the argument, the applicant 'hints' that the respondent's unlawful conduct is somehow linked to the Naicker family and the companies with which they are involved.

26.     The sixth respondent's argument must be assessed in the light of the applicant's case. In paragraph 7.20 of the founding affidavit, the applicant avers that 'The first respondent is currently almost exclusively utilizing the services of the fifth and sixth respondents notwithstanding that this is costing the first respondent millions of Rands more per month, it is not without coincidence that the fifth and sixth respondents are currently under the control of different members of the Naicker family.' (emphasis added).

27.     The applicant's argument in riposte, as I understand it, is that the relevance of the reference to the Naicker family is that first respondent's unlawful conduct (in procuring services from the companies that are controlled by members of the Naicker family) is, in the first instance, that such unlawful conduct will more than likely continue, unless the first respondent is interdicted therefrom; In the second instance, the first respondent's mistake in procuring more vehicles than was tendered for, from only the companies in which the Naicker family hold interests, remains unexplained;[18] In the third instance, it therefore cannot be a coincidence that the first respondent has utilized the services of the 5^th and 5^th respondents; and in the fourth instance, the applicant has demonstrated that the first respondent has failed to follow fair and proper procedures in procuring

services from the 5^th and 6^th  so that the cautionary remarks of the Constitutional

Court in Allpay[19] cannot be ignored.

28.     It is noteworthy that the allegations (underlined within the quotation above) were neither addressed, nor disputed in the answering affidavit. It is further noteworthy that no objection has been levelled by the sixth respondent against the relief sought in paragraphs 2 and 3 of the notice of motion (relating to the first respondent's conduct vis a vis the 5th respondent), which company is also said to be controlled by members of the Naicker family, and which relief is the same as the relief sought in paragraphs 4 and 5 of the notice of motion (relating to the first respondent's conduct vis a vis the 6^th respondent).

29.       In Maharaj v Mandag Centre,[20] the following was said:

" ...even if it could properly be said that some or other part of the founding affidavit was irrelevant, it does not follow that the application to strike out should succeed. I am not persuaded that the appellants suffered any prejudice on account of the impugned portions of the founding affidavit not having been struck out. For, even if material is indeed scandalous, vexations or irrelevant, relief will not be granted if an applicant cannot prove that he or she will be prejudiced if the offending matter is not struck out. No such prejudice was relied on in argument before us. The applicant was heard by a Judge, not a layperson. She would have been able to disabuse her mind of any vexatious, scandalous or irrelevant matter contained in the affidavit. I accordingly concluded that the strike out appeal is without merit and accordingly falls to be dismissed with costs."

30.      As correctly pointed out by the applicant's counsel in oral argument, no finding can be made in these proceedings to the effect that the 6^th respondent was party to a fraud or otherwise itself involved in a process which may possibly be skewed by corruption. I am inclined to agree with the submission. Any negative imputation against the Naicker family would thus not arise. In my view, the allegations in the founding affidavit , which contain a reference to the Naicker family, were made in relation to the alleged unexplained unlawfulness in relation to the first respondent's conduct. The interdict sought against the first respondent is inter alia, to prevent it from giving the 5^th respondent more orders than what the 6t h respondent tendered for. The 5^th respondent could hardly complain that it will be prevented from getting orders for more than it tendered for, and the orders sought in paragraphs 4 and 5 of the notice of motion would thus not result in any prejudice to the 5^th respondent.

31.     In my view, it has. not been established that the 6th respondent will be prejudiced if the offending matter is not struck out. Accordingly it follows that the striking out application lacks merit and falls to be dismissed with costs.

Relief in Notice of Motion

32.      I bears repeating that the first respondent has not disputed that it has procured services from the 5^th and 6^th respondents in conflict with the overriding constitutional imperatives as set out in sect ion 217 of the Constitution and the provisions of section2(1)(f) of the PPPFA. The SLA, insofar as it provides for a procurement process and the procedure that would be followed in implementing it, was ostensibly concluded to advance and accord with the relevant constitutional objectives.

33.      In the present matter, the applicant's complaint is not about whether or not the first respondent correctly followed its procedures (provided for in clause 9 of the SLA) as much as it is about the implementation of constitutional imperatives.

34.     The applicant submits that the order proposed by the 6^th respondent, namely, an order mandating the first respondent to comply with the provisions of section 9 of the SLA, would be ineffectual in light of the fact that the applicant's complaint is not about whether or not the first respondent correctly followed the internal procedure it undertook to employ for the placement of orders with service

providers . [21] The first respondent is constitutionally obliged to implement a fair, equitable, transparent, competitive and cost-effective procurement policy, in line with the provisions of the PPPFA. When it fails in this regard, it acts unlawfully. Neither the first respondent nor the sixth respondent have contested the correctness of such principle.

35.     Insofar as the sixth respondent contends that the applicant has alternate remedies available to it (in instances where it out-ranked the sixth respondent and where the sixth respondent was given work by the first respondent which it should not have received) by means of a claim for specific performance of the SLA with an alternative claim for damages or for a referral of the dispute to arbitration under the provisions of clause 29 of the SLA, only the following need be said: There appears, on the papers before me, to be no arbitral dispute as between the applicant and the first respondent.[22] In any event, the first respondent has elected not to oppose the application or to dispute the allegations pertaining to the unlawfulness of the first respondent's conduct.

36.     The applicant should not have to suffer the risk of the demise of its business whilst waiting for an action to be finalized. I agree with the applicant's submission in the replying affidavit that the SLA (procurement contract) must be interpreted through the prism of section 217 of the Constitution. The relevant statutory precepts oblige a municipality concluding a service delivery agreement with an external supplier to act openly and in accordance with a fair, equitable, competitive and cost-effective system, and in terms of a policy designed to have that effect.[23]

37.     The award of interdictory relief is in the court's discretion.[24] A mandatory interdict is an order requiring a person to do some positive act to remedy a wrongful state of affairs for which he is responsible, or to do something which he ought to do if the complainant is to have his rights. It has been said that a mandatory interdict can serve 'to compel the performance of a specific statutory duty and to remedy the effects of unlawful action already taken.[25] It is entirely apposite in the circumstances of the present matter, to grant an interdict in order to prevent the perpetuation of wrongful conduct on the part of the first respondent.

Conclusion

38.     The first respondent has not contended that it is legally entitled to act contrary to what is sought in the notice of motion, nor has the sixth respondent contended that the first respondent is so entitled to act.

39.     I am persuaded that the applicant has succeeded in establishing an entitlement to the relief sought in the notice of motion.

40.     The general rule is that costs follow the result. No reasons have been advanced by the parties to justify a departure therefrom.

41.      A draft order was handed up by the applicant ' s counsel at the hearing of the matter, which I propose making an order of court .

42.      I accordingly grant an order in the following terms:

ORDER

1.      The matter is urgent.

2.     In regard to the main application, an order is made in terms of the draft marked "X".

3.      The striking out application is dismissed with costs.

A.MAIER-FRAWLEY

ACTING JUDGE OF THE HIGH COURT

Counsel for Applicant:       AP J Els

Instructed by:                    Albert Hibbert Attorneys (Ref: A. Hibbert)

Counsel for Respondent:   M. Collins

Instructed by:              Naidoo" Maharaj Inc c/o Macrobert Attorneys (Ref: W. Gani)

 

Date of Hearing:                  30 May 2018

Judgment Delivered:           13 June 2018

THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

On this 29th day of May 2018

Before the Honourable Judge Maier-Frawley AJ

CASE NO.:

In the matter between:

JL EXCAVATORS (PTY) LTD                                                     Applicant

(Registration No. 1995/013650/07)

And

THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY  First Respondent

DR MOEKETSI MOSOLA                                                          Second Respondent

MUSA KHUMALO VELAPHI NGCOBO                                     Third Respondent

VELAPHI NGOBO                                                                       Fourth Respondent

UBUNTU TRANSPORT LOGISTICS (PTY) LTD                        Fifth Respondent

(Registration No.: 2005/032268/0)7

X MOOR TRANSPORT (PTY) LTD                                           Sixth Respondent

(Registration No.: 2014/285346/07)

DRAFT ORDER

The Court orders as follows:

1.     The first respondent is interdicted from issuing any purchase order to the fifth respondent for vehicles or machines in excess of the number of vehicles or machines tendered for by the fifth respondent in terms of Tender CSS46-2014/14 ("Tender 46");

2.    The first respondent is interdicted from issuing any purchase order to the fifth respondent pursuant to Tender 46 contrary to the following:

2.1     In the event that any other service provider or service providers was/were appointed ahead of the fifth respondent in any category, the first respondent should first offer the services to such service provider or providers appointed ahead of the fifth respondent

2.2     The first respondent may only place an order with the fifth respondent if the service provider or providers appointed ahead of the fifth respondent is/are unable or unwilling to render the service required by the first respondent or if the volume of services required by the first respondent exceeds the capacity of the service provider or providers appointed ahead of the fifth respondent;

3.      The first respondent is interdicted from issuing any purchase order to the sixth respondent for vehicles or machines in excess of the number of vehicles or machines tendered for by the sixth respondent In terms of Tender 46;

4.      The first respondent is interdicted from issuing any purchase order to the sixth respondent pursuant to Tender 46 contrary to the following:

4.1       In the event that any other service provider or service providers was/were appointed ahead of the sixth respondent in any category, the first respondent should first offer the services to such service provider or providers appointed ahead of the sixth respondent;

4.2      The first respondent may only place an order with the sixth respondent if the service provider or providers appointed ahead of the sixth respondent is/are unable or unwilling to render the service required by the first respondent or if the volume of services required by the first respondent exceeds the capacity of the service provider or providers appointed ahead of the sixth respondent;

5.       The first respondent is ordered to pay the costs of this application, jointly and severally together with the sixth respondent.

THE REGISTRAR

---