IN THE HIGH COURT OF SOUTH AFRICA EAST LONDON CIRCUIT LOCAL DIVISION HEMIPAC INVESTMENTS (PTY) LTD THE INDEPENDENT ELECTORAL COMMISSION

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1 1 IN THE HIGH COURT OF SOUTH AFRICA EAST LONDON CIRCUIT LOCAL DIVISION CASE NO: EL1219/16 In the matter between: HEMIPAC INVESTMENTS (PTY) LTD Appellant and THE INDEPENDENT ELECTORAL COMMISSION First Respondent CRANE CREST INVESTMENTS 71 (PTY) LTD t/a NOVATE PROPERTY INVESTMENTS HARBOUR POINT FUELS (PTY) LTD Second Respondent Third Respondent 69 FRERE ROAD TRUST Fourth Respondent BALLUSTRADE PROPERTIES (PTY) LTD STHATHU FUNDING (PTY) LTD FINISHING TOUCH TRADING 260 (PTY) LTD Fifth Respondent Sixth Respondent Seventh Respondent JUDGMENT - LEAVE TO APPEAL MAGEZA AJ [1] This is an application for leave to appeal against this Court s decision dismissing appellant s application for a review and setting aside of the first respondent s decision to disqualify two of its bids/tenders for the leasing out of two buildings to the first respondent. These bids are referred to in the judgment as the Waverley and the BBC bids. The closing date for the submission of the bids was 3

2 2 July 2015 and first respondent awarded the bids to the second respondent in April [2] The disqualification centred on the bid specifications and material conditions read with the applicant s bids and covering letters in which the following was, inter alia, conveyed: Due to the fact that we do not have your specific needs requirements for a back-up generator, the costs thereof, have not been included in this offer. We will however, upon receipt of your specific needs requirements for a back-up generator, spec same and obtain a quote, the costs of which can be amortized into the Lease Agreement, unless you choose to pay us upfront. We however confirm that an emergency electrical power generator will be provided. [3] The two grounds for the disqualification provided by first respondent were that: The bids did not meet the minimum key requirements with regard to the provision of emergency power as part of the all-inclusive cost to be tendered; and The bids did not meet minimum key requirements with regard to tenders not to be subject to qualifications and/or conditions and/or additional terms to be negotiated after submission. [4] After having heard argument over two days (30 March and 21 April 2017), I handed down judgment on 12 July 2017, dismissing the review application. These reasons are set out in the judgment and I do not propose to revisit them save to state that the tender specifications and conditions required as one minimum condition that

3 3 each building was to have a single 250KVA emergency power generator whose price was to be included in the bid-price quoted. [5] At paragraph [35] of the judgment the following is stated: Indeed even a cursory reading of the bid specifications does not permit for the contention that more than one generator (an emergency and a back-up power generator) was specified, required or contemplated by the first respondent. The specifications set out are all material and reasonable and do not accommodate more than one power generator by any interpretation no matter how strained. In those circumstances it is not unreasonable for a reader to impute an interpretation which leads to the conclusion which the first respondent arrived at. [6] On behalf of the applicant for leave to appeal, Mr Pretorius contended that based on some (or all) of the applicant s grounds of appeal, another court may reasonably come to a different conclusion. The grounds of appeal relied upon by applicant remain primarily procedural unfairness and the taking into account of irrelevant considerations - Sections 6(2)(c) and (6)(2)(e)(iii) of the Promotion of Administrative Justice Act, 3 of 2000 (PAJA). [7] Mr Pretorius makes the further submission that this court erred in finding, that the applicant contended that the first respondent s bid specifications allowed for two generators ; that the central dispute revolves around the interpretation of paragraph 9 on page 3 of the applicant s covering letters to its bids without, in addition, finding that the applicant s bids as a whole, and not the cover letters in isolation, should have been considered ; in not finding that, had the first respondent considered the applicant s bid in their entirety, i.e. all the pages of the bids the first respondent could not have reasonably disqualified the applicant s bids for this reason. There are other contentions made and it is not necessary to recount all of

4 4 these. [8] The test this Court has to apply in considering leave to appeal is set out in section 17(1) of the Superior Courts Act 10 of 2013 as follows: "Leave to appeal may only be given where the judge or judges concerned are of the opinion that- (a) (i) the appeal would have a reasonable prospect of success: or (ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration: (b)..." (emphasis provided). [9] Mr de Villiers argued before me that the threshold for the test has since been raised and a higher stringent test must be overcome by an applicant for leave. He went on to argue that there must be a measure of certainty that another Court s decision will differ from that of the Court whose judgment is sought to be appealed against. In support, reliance is placed on a fairly recent judgment of Bertelsman J in The Mont Chevaux Trust (IT 2012/28) v Tina Goosen and 18 Others LCC14R/2014. There the learned Judge stated at para [6]: It is clear that the threshold for granting leave to appeal against a judgment of a High Court has been raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion, see Van Heerden v Cronwright & Others 1985 (2) SA 342 (T) at 343 H. The use of the word would in the new statute indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against [10] This approach, it was argued before me, has been held to be correct in the

5 5 Gauteng North Division in Acting National Director of Public Prosecutions and Others v Democratic Alliance, In Re: Democratic Alliance v Acting National Director of Public Prosecutions and Others, a judgment by Ledwaba DJP, Pretorius J and Mothle J concurring. [11] The reference to the judgment of Moshidi J in Investec Bank Limited v Karel & Another (2013/34683) [2016] ZAGPJHC 171 (15 June 2016), deals with Section 17(1)(a)(ii) and not (i). At para 14, the learned Judge therein went on to say: I revert to the instant application for leave to appeal the above order. I have considered carefully the various grounds of appeal, as well as the argument advanced in support thereof. There are plainly no reasonable prospects of success on appeal. In addition, it is clear that the threshold to grant leave to appeal in matters of this nature has been raised by the provisions of Section 17(1)(a)(ii) of the Superior Courts Act 10 of The applicant must show that there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under discussion. [12] The reference to the decision in Notshokovu v S (157/15) [2016] ZASCA 112 (7 September 2016) is not a model of clarity. In paragraph 2 of the decision, Shongwe JA acknowledged that what was before that Court was the reconsideration and, if necessary, variation of the decision of two judges who dismissed the application for special leave An appellant, on the other hand, faces a higher and stringent threshold, in terms of the Act compared to the provisions of the repealed Supreme Court Act 59 of (See Van Wyk v S, Galela v S [2014] ZASCA 152; 2015 (1) SACR 584 (SCA) para [14]). Paragraph 14 referred to in Van

6 6 Wyk of the decision states, As pointed out by this court in S v Matshona 2013 (2) SACR 126 (SCA) para 4, the issue to be determined is not whether the appeal against conviction and sentence should succeed, but whether the high court should have granted leave, which in turn depends upon whether the appellant could be said to have reasonable prospects of success on appeal. [13] I agree with Mr de Villiers that the Bertelsmann J approach has not found favour with His Lordship Justice Smith in this division (See Valley of Kings, Thaba Motswere (Pty) Ltd v Al Mayya International (EL: 926/2016; 2226/2016) [2016] ZAECGHC 137 (10 November 2010)). One of my difficulties expressed at the hearing of the leave to appeal stems from the numerous contentious and varied disputes that arise in the context of procurement based reviews and litigation. The law reports stand as a testament to numerous procurement review cases in which interpretations and findings have differed. [14] In so far as the manner in which applicant has set out the grounds of appeal, it is so in my view that the attack is multi-pronged and wide ranging incorporating as it spreads, inter alia, the second respondent s BEE status or alleged non-compliance or lack thereof. I agree with Mr de Villiers that an appeal lies against the substantive decision and applicant s broad and full-frontal fault-finding approach is undesirable. I am nevertheless unable to rule out the reasonable prospect of another Court reaching a different finding.

7 7 [15] Having said so I also do align myself fully with the dictum of Smith J in the Valley of Kings decision in this division in which he finds at para 4: There can be little doubt that the use of the word would in section 17 (1)(a)(i) of the Superior Courts Act implies that the test for leave to appeal is now more onerous. The intention clearly being to avoid our courts of appeal being flooded with frivolous appeals that are doomed to fail. I am, however, of the respectful view that the measure of certainty standard propounded by the learned judge in Mont Chevaux Trust (supra) may be placing the bar too high. It would, in my respectful view, be unreasonably onerous to require an applicant for leave to appeal to convince a judge who invariably would have provided extensive reasons for his or her findings and conclusions that there is a measure of certainty that another court will upset those findings. It seems to me that a contextual construction of the phrase reasonable prospect of success still requires of the judge, whose judgment is sought to be appealed against, to consider, objectively and dispassionately, whether there are reasonable prospects that another court may well find merit in arguments advanced by the losing party [16] In the result I make the following order: 16.1 The application for leave to appeal succeeds The appeal is to the full court of this division The costs of this application are to be costs in the appeal.

8 8 MAGEZA AJ Heard: 19 September 2017 Delivered: 22 September 2017 For the appellant: Attorneys for applicant: Advocate Pretorius SIM & BOTSI ATTORNEYS Tel: (011) Ref: M Nel c/o GRAVETT SCHOEMAN INC The Hub, Bonza Bay Road Beacon Bay, East London Ref: I Theophilus Tel: (043) For first respondents: Adv DP de Villiers Attorneys for first respondent: DMO ATTORNEYS First Respondent s Attorneys Block B, 38 Grosvenor Road Bryanston Tel: (011) Ref: Mrs Oliphant c/o ABDO & ABDO