IN THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH COURT, PRETORIA)

Transcription

1 IN THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH COURT, PRETORIA) Date: In the matter between: Case Number: 27974/2010 TELKOM SA LIMITED Applicant and MERID TRADING (PTY) LTD BIZ AFRICA 1944 (PTY) LTD PLESSEY/HEZEKI JOINT VENTURE COMPANY FORTEL INVESTMENTS CC BIHATI SOLUTIONS (PTY) LTD MTHIYANE SEYAMA PROJECTS First Respondent Second Respondent Third Respondent Fourth Respondent Fifth Respondent Sixth Respondent and Case Number: 25945/2010 BIHATI SOLUTIONS (PTY) LTD Applicant and TELKOM SA LIMITED PLESSEY (PTY) LTD HEZEKI CONTRACTING (PTY) LTD BIZ AFRICA 1944 (PTY) LTD FORTEL INVESTMENTS CC MERID TRADING (PTY) LTD t/a VUKA First Respondent Second Respondent Third Respondent Fourth Respondent Fifth Respondent

2 2 ENTERPRISES Sixth Respondent MTHIYANE CONSTRUCTION CC Seventh Respondent SEYAMA SOLUTION AND PLANT HIRE (PTY) LTD Eighth Respondent GIO CONSTRUCTION AND PLANT HIRE (PTY) LTD...Ninth Respondent WORLDTEL (PTY) LTD Tenth Respondent MOTATA TELECOMMUNICATIONS (PTY) LTD Eleventh Respondent JAPP CONSTRUCTION (PTY) LTD Twelfth Respondent JUDGMENT SOUTHWOOD J [1] In the application under case number 27974/2010 ( the main application ) the applicant seeks the following relief in terms of its amended notice of motion dated 17 November 2010: (1) An order reviewing and setting aside the applicant s decision taken on 14 November 2008 to accept the proposals submitted by the six respondents in terms of RFP0101/2007, and the award of RFP0101/2007 to the six respondents as communicated to them in the applicant s letter of 5 December 2008; (2) In the event that the court finds that this application falls within the ambit of section 7(1)(b) of the Promotion of Administrative Justice Act 3 of 2000 ( PAJA ), an order condoning the

3 3 applicant s failure to launch this application within 180 (one hundred and eighty) days after 14 of November 2008, in terms of the provisions of section 9 of PAJA; (3) An order declaring that the applicant s acceptance of the proposals submitted by the six respondents in terms of RFP010/2007 and the award of tender RFP0101/2007 to the six respondents is null and void and of no force or effect; (4) An order that the first and fifth respondents pay the costs of this application. Only the first and fifth respondents oppose the application. The fifth respondent, as applicant, in an application under case number 25945/2010 ( the related application ) seeks the following relief: (1) An order declaring that Telkom is bound by its decision taken on 5 December 2008 to award the said tender to the applicant (i.e. the fifth respondent in the main application); (2) An order that the first respondent (i.e. the applicant in the main application) in good faith and with due diligence and expedition, engage with the applicant (i.e. the fifth respondent in the main application) in a process of negotiation of any outstanding issues required for the implementation of its original decision to

4 4 award the tender to the applicant, including the negotiation of outstanding issues required for purposes of the formal agreement to be concluded between the parties, and to pursue and implement all remaining aspects of the tender process in that regard; (3) An order that the first respondent (i.e. the applicant in the main application) pay the costs of the application. The applicant in the main application opposes the grant of this relief and relies on the facts set out in the main application. [2] By agreement between the parties the two applications were enrolled and heard together. The parties agree that the main application must be decided first and that if the substantive relief is granted the fifth respondent will not be entitled to the relief which it seeks in the related application. For the sake of convenience the parties will be referred to as they are referred to in the main application. [3] The following facts are common cause or cannot be disputed: (1) The applicant is an organ of State as contemplated in section 239 of the Constitution of the Republic of South Africa 1996, and PAJA.

5 5 (2) The applicant is subject to the provisions of section 217 of the Constitution and accordingly, when it contracts for goods and services it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective. Pursuant to these constitutional obligations the applicant has adopted a procurement policy. (3) The applicant s procurement policy states with regard to Requests for Proposals ( RFP s ): This is an alternative procurement method that should be employed where goods or services are available from general sources and it differs from each other not only in price but in other aspects as well (i.e. quality, availability, features, etc.). A Request for Proposal (RFP) is typically used when the product or service cannot be defined with absolute specificity and further dialogue with suppliers concerning the subject of the RFP is expected. The information generally contained in a RFP is similar to that listed under paragraph 8.5 (RFB). (4) On 8 November 2007 the applicant published an open Request for Proposal ( RFP0101/2007 ) with a view to selecting and appointing service providers for the provisioning of Telkom Network Services (Construction Services) as and when required by the applicant.

6 6 (5) The RFP stipulated that the closing date for the submission of proposals was 12 December By the closing date the applicant had received 61 proposals in response to the RFP. (6) The RFP stipulated that the proposals submitted shall be open for acceptance by the applicant for a period of 120 days from the closing date (12 December 2007). The proposal signed by each proposer contains the following: I/we agree that the offer herein shall remain binding upon me/us and open for acceptance by Telkom SA Limited during the validity period indicated and calculated from the closing hour and date of the bid. (7) The 120 day period expired on or about 12 April The period of validity for proposals to be submitted was not extended at any time prior to 12 April 2008, either unilaterally by any of the proposers or by agreement between the applicant and the proposers who had submitted proposals. (The first respondent s counsel contends that prior to 12 April 2008 the applicant and the first respondent agreed that the validity period of the first respondent s proposal was extended but there is no factual basis for the contention.) (8) The evaluation of the 61 proposals received and the shortlisting of 15 proposals for further consideration took place in accordance with the applicant s procurement policy. On 28

7 7 February of the proposers who had submitted proposals were shortlisted and approved by the applicant s Procurement Review Council. (9) By 12 April 2008 the applicant had not accepted any of the proposals. (10) On 24 June 2008, after the validity period of the proposals had expired, the applicant sent an to each of the 15 proposers whose proposals had been shortlisted for further consideration and requested them to extend the validity period of their proposals. This reads as follows: Dear Proposer Please note that the validity period of RFP0101/2007 (Construction Services) has expired and we kindly request your permission to increase it with another 120 days from date of expiry as the tender evaluations are still ongoing. It will be appreciated if your confirmation can be received by no later than Thursday 26 June h00. (11) Several of the proposers to whom the message was sent, including the six respondents, agreed to extend the validity period by a further 120 days, which extended period expired on or about 12 August No further extensions were sought or agreed before or after that date. (The first respondent s counsel contends that after 12 August 2008 the parties agreed that the

8 8 validity period of the first respondent s proposal was extended for a reasonable time, at least until decision by the applicant s procurement bodies. Once again there is no factual basis for the contention. The first respondent does not even allege that the parties entered into such a tacit agreement. The fifth respondent alleges that at least by their conduct the applicant and the fifth respondent tacitly agreed to the further extension of the validity period of the tender. This allegation is extremely vague and unconvincing. It is not alleged what conduct is relied upon, who entered into this agreement and that they had the necessary animus contrahendi and for how long the validity period was extended. The existence of the tacit agreement must be inferred from all the relevant facts and circumstances see Standard Bank of South Africa Ltd v Ocean Commodities Inc 1983 (1) SA 276 (A) at 292B; Joel Melamed and Horwitz v Cleveland Estates (Pty) Ltd 1984 (3) SA 155 (A) at 165I. If an inference can be made from the conduct of the parties it is by no means clear that the most plausible probable conclusion (see Joel Melamed at 165I) is that the parties agreed to extend the validity period of the proposal. If the parties knew as they clearly did that the validity period had expired and no tender had been awarded, the most plausible probable conclusion is that the parties were engaging in a procurement process other than by way of public tender.)

9 9 (12) On 18 September, and after the agreed extended period of the proposals had expired, the applicant s Cross-Functional Sourcing Team, acting in accordance with the applicant s Procurement Policy, submitted a written memorandum to the applicant s Procurement Review Council ( PRC ) in which the award of the RFP to the six respondents was recommended. On 18 September 2008 the applicant s PRC supported the decision and decided to forward the memorandum to the applicant s Executive Committee for approval. (13) On 15 October 2008 the applicant s PRC submitted a recommendation to the applicant s Executive Committee for support of the recommendation and onwards submission to the applicant s Board of Directors for final approval. (14) On about 14 November 2008 the Executive Committee of the applicant submitted the recommendation of the PRC to the applicant s Board of Directors for acceptance of the recommendations to make the award of the tender to the six respondents. The applicant s Board of Directors approved the recommendation and resolved to award the RFP to the six respondents as service providers. (15) On 5 December 2008, pursuant to the decision taken by the applicant s Board of Directors on 14 November 2008, the

10 10 applicant sent a letter to each of the respondents advising them of their appointment as preferred service providers for the provisioning of Telkom Network Services (Construction Services). The award letters specified that any final award of business and the effective commencement date of the appointment as a preferred service provider was conditional upon the signature of an agreement within 45 days from 5 December 2008 incorporating the matter specified in the award letter. (16) The 45 day period calculated from 5 December 2008 expired on or about 20 January 2009, but no agreement as contemplated in the award letter was signed between the applicant and any one of the respondents. (17) After the issue of the award letters the applicant negotiated with the six respondents the terms of the final agreements but no agreements were concluded with any of the respondents. (18) By February 2009 the applicant had not informed the unsuccessful bidders that their proposals had not been accepted. (19) During February 2009 one or more of these unsuccessful bidders lodged a complaint with the office of the Public Protector

11 11 with regard to the procedure relating to the RFP. Correspondence ensued between the attorneys acting for the complainants, the Public Protector, and attorneys acting for the applicant. (20) Pursuant to these complaints and the correspondence which ensued between the applicant and the Public Protector, on 6 August 2009 the applicant sent identical letters to the six respondents advising them that the applicant had consulted with an external legal counsel and was considering what steps it should take in respect of the tender. (21) The applicant decided to suspend the further negotiation of agreements with the six respondents pending receipt of legal advice. The applicant received an opinion from Senior Counsel to the effect that an unsuccessful bidder who had been eliminated in the evaluation process could contend that the tender process had come to an end when the validity period had expired without any award having been made and that he should then be permitted to submit an approved bid in a subsequent public tender process in terms of a new RFP. (22) On 20 November 2009 the Executive Committee of the applicant submitted a recommendation to the applicant s Board of Directors for approval to set aside the award of RFP0101/2007

12 12 for the provision of Telkom Network Services (Construction Services). This memorandum specifically referred to the opinion obtained from legal counsel. (23) On 13 April 2010 the applicant addressed a letter to the second, third, fourth, fifth and sixth respondents in which the applicant advised them of its intention to bring this application. The applicant gave similar advice to the first respondent on 13 May (24) The fifth respondent launched the related application on 6 May 2010 and the applicant launched the main application on 18 May [4] The principal issue raised in this case is the legal consequence of a failure by a public body to accept, within the stipulated validity period for the (tender) proposals, any of the proposals received. [5] The applicant s primary contention may be summarised as follows: the proposals submitted constituted offers by the proposers to the applicant to supply the required services to the applicant on the terms set out in the proposal. Such offers were open for acceptance for a period of 120 days after the closing date (i.e. until 12 April 2008). The legal nature of the proposal was an option granted to the applicant (i.e. an offer coupled with an undertaking to keep the offer open for a

13 13 specified period of 120 days), and the applicant was entitled to exercise the option and accept the proposal within the validity period. After 12 April 2008 there was no longer a valid option open for acceptance by the applicant. On 24 June 2008, when the applicant requested the 15 shortlisted proposers to increase their validity period with another 120 days and the proposers agreed to the request, as a matter of law this could not constitute an extension of or amendment to the initial proposals and offers which had lapsed, but constituted new offers made by each of the proposers who agreed to the request, and which new proposals were on the same terms and conditions as the initial proposals, save that they were open for acceptance by the applicant until 12 August The applicant contends that as the validity period of the proposals had long since expired the applicant could not validly have accepted any of the proposals and that the other proposers must have appreciated by this time that their proposals, which were not open for acceptance beyond the stipulated period of 120 days, had long since lapsed. [6] According to the first respondent s answering affidavit and first respondent s counsel s heads of argument the first respondent opposes the application on the following grounds: (a) The applicant and the respondents concluded oral or, at least, tacit agreements to extend the second validity period from 8

14 14 August 2008 at least until the date of the award on 5 December 2008; (b) When the award was made an enforceable agreement came into existence between the applicant and each of the respondents; (c) After the award was made, the applicant and the first respondent (and, presumably, the other respondents too) in any event concluded an enforceable agreement with consensus on all material terms; (d) The applicant cannot rely upon its own refusal (following complaints by the unsuccessful bidders) to sign the written agreement in frustration of fulfilment of the simple conditions; (e) There is nothing unfair, unconstitutional, unlawful or reviewable about the negotiation and conclusion of the agreements with the successful bidders during the extended offer period (to the exclusion of the unsuccessful bidders who had not, even, met the applicant s minimum requirements); (f) On the contrary, if the award and consequent agreement is set aside, the first respondent (and, presumably, the other respondents too) would suffer immense prejudice and

15 15 themselves become the victims of unfair and unconstitutional treatment. [7] The fifth respondent contends that the court is precluded from granting the relief sought by the applicant because of the applicant s delay in instituting these proceedings. In this regard the fifth respondent relies on the provisions of section 7 of PAJA. (At the hearing the first respondent s counsel adopted the fifth respondent s argument.) With regard to the merits, the fifth respondent contends that the parties were free to extend the validity period of the bidders proposals and that there was nothing unfair about the applicant continuing to negotiate with the 15 bidders who had submitted acceptable tenders. According to the fifth respondent the tenderers who fell out of the race had their moment and the extension of the validity period by agreement with the 15 shortlisted tenderers who had submitted acceptable tenders, after the expiry of the validity period, cannot conceivably be said to be unfair to the tenderers who fell out of the race. The fifth respondent also contends that the court must consider all the relevant circumstances of the tender and adjudicate the matter on the basis of whether the applicant s decision to award the tender to the six respondents was reasonable (see Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC) paras 42 and 45) and taking into account that not every slip in the administration of a tender must be visited by judicial sanction (see Moseme Road Construction v King Engineering Construction 2010 (4) SA 359 (SCA) para 21).

16 16 Finally the fifth respondent contends that the applicant s letter of acceptance of 5 December 2008 does not contain a suspensive condition. [8] It will be convenient to deal first with the question of the applicant s delay in instituting these proceedings before considering the merits of the application. [9] The main application is partially an application for judicial review of an administrative action in terms of section 6 of PAJA. The applicant s counsels heads of argument rely on a number of grounds of review specified in section 6. The first and fifth respondents contend that the applicant did not bring its application within the 180 day period stipulated by section 7(1) of PAJA. However the applicant argues that section 7(1) of PAJA does not apply when the decision maker applies to set aside its own decision as the date of the decision maker s decision is not covered by paragraphs (a) and (b) of section 7(1) which provide for the date from which the 180 days must run. The applicant contends that the common law rule as enunciated in Wolgroeiers Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad 1978 (1) SA 13 (A) applies (i.e. the court must decide (a) whether the proceedings were instituted after the passing of a reasonable time and (b), if so, whether the unreasonable delay ought to be overlooked. In deciding (b) the court exercises a judicial discretion, taking into consideration all the relevant circumstances.)

17 17 [10] Section 7(1) of PAJA provides that Any proceedings for judicial review in terms of section 6(1) must be instituted without unreasonable delay and not later than 180 days after the date (a) subject to subsection (2)(c), on which any proceedings instituted in terms of internal remedies as contemplated in subsection (2)(a) have been concluded; or (b) where no such remedies exist, on which the person concerned was informed of the administrative action, became aware of the action and the reasons for it or might reasonably have been expected to have become aware of the action and the reasons. On the face of it the use of the word any indicates clearly that the section is intended to apply to all proceedings for judicial review but this interpretation may be affected by the context. As pointed out in Commissioner for Inland Revenue v Ocean Manufacturing Ltd 1990 (3) SA 610 (A) at 618H-I Any is a word of wide and unqualified generality. It may be restricted by the subject-matter or the context, but prima facie it is unlimited (Per Innes CJ in R v Hugo 1926 AD 268 at 271.). In its natural and ordinary sense, any unless restricted by the context is an indefinite term which includes all of the things to which it relates (Per Innes JA in Hayne & Co v Kaffrarian Steam Mill Co Ltd 1914 AD 363 at 371.) While PAJA appears to govern all proceedings for judicial review the failure of the Legislature to provide for a date

18 18 where the decision maker wishes to review its own decision indicates that section 7(1) was not intended to apply to such proceedings. As long ago as 1977 our (then) highest court held that a public body may not only be entitled but also duty bound to approach a court to set aside its own irregular administrative act see Transair (Pty) Ltd v National Transport Commissioner and Another 1977 (3) SA 784 (A) at 792H-793G. Even if the Legislature cannot be presumed to know the state of the law, the omission seems to be deliberate and the court must give effect to the Act as it stands. Furthermore, it seems to be clear that a court cannot read into the Act something that was overlooked by the Legislature see Jaga v Dönges NO & Another 1950 (4) SA 653 (A) at 664G. Counsel for the respondents had difficulty in suggesting the words which could fill the casus omissus and eventually, as I understood them, accepted the applicant s contention that where the decision maker seeks to review its own decision the common law rules must be applied. This means that all the relevant circumstances must be taken into consideration, particularly the strength of the case on the merits. Accordingly I turn to a consideration of the merits. [11] As appears from the parties opposing contentions they have diametrically opposed points of departure. The applicant s approach is that there has not been compliance with section 217 of the Constitution (i.e. the administrative process is flawed). On the other hand, the respondents approach is that the rules of contract apply, that the

19 19 parties were free to extend the validity period of their proposals, that they in fact did so and accordingly that the award of the tender is valid. For this approach the first and fifth respondents rely on the legal position set out in Manna v Lotter and Another 2007 (4) SA 315 (C) paras [12] The Constitution lays down minimum requirements for a valid tender process and contracts entered into following an award of a tender to a successful tenderer: the tender process, preceding the conclusion of contracts for the supply of goods and services, must be fair, equitable, transparent, competitive and cost-effective section 217 of the Constitution. The decision to award a tender constitutes administrative action and therefore the provisions of PAJA apply see Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA) para 4; Metro Projects CC v Klerksdorp Local Municipality 2004 (1) SA 16 (SCA) para 12; Logpro Properties CC v Bedderson NO and Others 2003 (2) SA 460 (SCA) para 5. Generally, once a contract has been entered into pursuant to the award of the tender the rules of contract apply see Cape Metropolitan Council v Metro Inspection Services CC 2001 (3) SA 1013 (SCA) para 18; The Law of Government Procurement in South Africa Phoebe Bolton Lexis Nexis Butterworths page 30 para 5. In accordance with the principle or doctrine of legality a contract entered into without complying with the prescribed tender processes is invalid and the court has no discretion

20 20 to enforce the contract or refuse to enforce it see Municipal Manager: Qaukeni v FV General Trading CC 2010 (1) SA 356 (SCA) paras 14, 15 and 16; Premier, Free State and Others v Firechem Free State (Pty) Ltd 2000 (4) SA 413 (SCA) para 30; Eastern Cape Provincial Government v Contractprops 25 (Pty) Ltd 2001 (4) SA 142 (SCA) paras 8 and 9. It follows that, even if no contract is entered into, all steps taken in accordance with a process which does not comply with the prescribed tender process are also invalid see section 2 and 172(1) of the Constitution: Pharmaceutical Manufacturers of South Africa: In re ex parte President of the Republic of South Africa 2000 (2) SA 674 (CC) para 48. [13] Once the applicant was advised that its tender process was irregular because it did not comply with the prescribed tender procedure the applicant was duty bound to approach a court to set aside its own irregular administrative act see Municipal Manager: Qaukeni v FV General Trading CC supra para 23. The applicant was under a duty not to submit itself to an unlawful contract and was obliged to ignore the award of the tenders and resist any attempt to enforce them see Premier, Free State and Others v Firechem Free State (Pty) Ltd supra para 36; Municipal Manager, Qaukeni v FV General Trading CC supra para 23. The applicant was entitled to bring an application to review and set aside the award of the tenders and/or apply for a declarator that the award of the tenders was null and void and of no

21 21 force and effect see Municipal Manager: Qaukeni v FV General Trading CC supra paras 25 and 26. [14] The question to be decided is whether the procedure followed by the applicant and the six respondents after 12 April 2008 (when the validity period of the proposals expired) was in compliance with section 217 of the Constitution. In my view it was not. As soon as the validity period of the proposals had expired without the applicant awarding a tender the tender process was complete albeit unsuccessfully and the applicant was no longer free to negotiate with the respondents as if they were simply attempting to enter into a contract. The process was no longer transparent, equitable or competitive. All the tenderers were entitled to expect the applicant to apply its own procedure and either award or not award a tender within the validity period of the proposals. If it failed to award a tender within the validity period of the proposals it received it had to offer all interested parties a further opportunity to tender. Negotiations with some tenderers to extend the period of validity lacked transparency and was not equitable or competitive. In my view the first and fifth respondent s reliance only on rules of contract is misplaced. [15] A further reason for finding against the first and fifth respondents is that they have not laid a basis for finding that the validity period of their proposals was lawfully extended until the tenders were awarded.

22 22 [16] Furthermore, the applicant s letters to the six respondents, all dated 5 December 2008, advising them that they were preferred service providers for the provisioning of Telkom Network Services (Construction Services) clearly does not contain an unqualified acceptance of the respondents proposals such as would give rise to a binding agreement. The letters clearly stipulate that Any final award of business including the effective commencement date will be contingent upon the signature of an Agreement, within 45 days from the date of this facsimile, incorporating, inter alia, the following: Telkom s Standard Terms and Conditions for Rendering (Turnkey) Services for Telkom An appropriate discount structure in line with the required 15 % saving on current Telkom cost as detailed in the original Proposal Bid conditions as detailed in the original Proposal BEE Commitment Plan (See e.g. Premier, Free State and Others v Firechem Free State (Pty) Ltd supra paras 21 and 35) [17] There is also no room for finding that the requirement of a written agreement signed by the parties was a condition which had been fictionally fulfilled. If the award process was flawed, as it has been found to be, the applicant was under a duty not to submit itself to an unlawful contract and was obliged to resist the respondents attempts to enforce such a contract see Premier, Free State and Others v Firechem Free State (Pty) Ltd supra paras 36 and 37.

23 23 [18] Insofar as it was suggested that the applicant is estopped from denying that an agreement had been entered into this would be contrary to what is required by law, namely that the contract be entered into pursuant to a tender process which is fair, equitable, transparent, competitive and cost-effective, and estoppel cannot operate see Eastern Cape Provincial Government and Others v Contractprops 25 (Pty) Ltd 2001 (4) SA 142 (SCA) paras 11 and 12. [19] As far as the declarator is concerned it must follow from the finding that the tender process was flawed, that the applicant s acceptance of the proposals submitted by the six respondents and the applicant s award of the tender to the six respondents were null and void and of no force or effect. As already mentioned a declarator is an appropriate remedy see Municipal Manager: Qaukeni v FV General Trading CC 2010 (1) SA 356 (SCA) para 26. The applicant is therefore entitled to the declarator which it seeks. This will also have an impact on the issue of unreasonable delay which must now be considered. [20] The respondents approach is that the delay which must be considered is from 14 November 2008, when the decision was taken to award the tenders, until 18 May 2010, when this application was launched (i.e. a period of 18 months). It seems to me that this is not correct. Until February 2009 the applicant clearly proceeded in the belief that it was acting properly in terms of a lawful process. It only became aware that

24 24 the tender process was flawed when it received counsel s opinion at about the beginning of August Thereafter the applicant complied with its internal procedures before the application was launched. On 20 November 2009 the applicant s Executive Committee submitted a recommendation to the applicant s Board of Directors for approval to set aside the award of RFP0101/2007. This recommendation incorporated a summary of counsel s opinion: that once the validity period of the proposals had expired with no extension of the period being arranged before the expiry of the validity period, there were no valid bids in existence and an award could not be validly made. The applicant does not say what the Board of Directors decided on that day and correspondence ensued about the delay in finalising the tender. At the end of January 2010 the applicant informed the Public Protector that the Board of Directors approval of the Executive Committee s recommendation of 20 November 2009 was still awaited. In a letter dated 13 May 2010 the applicant informed the first respondent s attorneys that it intended to apply for the review and setting aside of the award of the tender. From another letter dated 13 April 2010 it appears that by then the applicant s Board of Directors had resolved to review its decision to award the tenders and that the applicant was already preparing the application. The applicant eventually issued the application on 18 May [21] In the light of these facts the applicant contends that there was no unreasonable delay in instituting these proceedings. In argument the

25 25 applicant s counsel readily conceded that there are gaps in the narrative but contended that the applicant is a very large organisation and that it takes a long time to turn such a big ship around. I do not agree. There is no factual basis for the contention that it would take a long time for the applicant to reverse a decision previously taken. On the face of it all that was required was a recommendation by the applicant s Executive Committee to the applicant s Board of Directors and once the Board of Directors had taken its decision the papers could have been prepared. In my view once the applicant had received counsel s opinion that the tender process was flawed the applicant s Board of Directors could have taken the necessary decision and the application could have been prepared and launched within a period of about two to three months. A period of months is obviously unreasonable. [22] The question which remains is whether this unreasonable delay should be overlooked. In my view it should. The applicant is seeking to avoid the consequences of an unlawful tender process where no final agreement has been concluded and no party is acting pursuant thereto. As already pointed out where the tender procedures had not been complied with the applicant is duty bound to apply to set aside any resulting contract and not to submit the enforcement of any such contract. The applicant is entitled to a declarator to the effect that the acceptance of the proposals submitted by the six respondents and the award of the tender to the six respondents were null and void and of no

26 26 force and effect. It would therefore make no sense to refuse the relief sought in the review part of the application. I am mindful of the fact that the first and fifth respondents allege that they will suffer financial prejudice because of the delay in finalising the tender but these allegations are not convincing: there are no facts to support them. In my view the principle of legality must prevail. [23] The applicant is therefore entitled to the substantial relief sought in its amended notice of motion. [24] With regard to costs the applicant is not entitled to the costs of the whole founding affidavit. These papers run to 566 pages and include many documents which were not relevant to the case which the applicant sought to advance. In my view the founding affidavit should not have exceeded 200 pages and the costs of the remaining papers must be disallowed. [25] All the parties employed senior counsel although only the applicant employed two counsel. It was not argued that the applicant is not entitled to the costs of two counsel and in my view it is. The issues are of sufficient importance to warrant the employment of two counsel. [26] With regard to the related application the fifth respondent s counsel conceded that the court could not grant the relief set out in prayer 1 of the notice of motion for the simple reason that the application was

27 27 brought too late. A further reason was that there was no evidence that the decision sought to be reviewed and set aside was taken. As already mentioned the parties agree that if the applicant is granted substantive relief the related application must be dismissed. [27] The following orders are made I In the main application under case number 27974/2010: (1) The applicant s decision taken on 14 November 2008 to accept the proposals submitted by the six respondents in terms of RFP0101/2007, and the award of RFP0101/2007 to the six respondents as communicated to them in the applicant s letter of 5 December 2008 are reviewed and set aside; (2) It is declared that the applicant s acceptance of the proposals submitted by the six respondents in terms of RFP0101/2007 and the award of the tender RFP0101/2007 to the six respondents is null and void and of no force and effect; (3) The first and fifth respondents are ordered to pay the applicant s costs of this application, jointly and severally, the one paying the other to be absolved, such costs to

28 28 include the costs consequent upon the employment of two counsel but to exclude the costs of preparing 365 pages of the founding affidavit and annexures. II In the related application under case number 25945/2010: (1) The application is dismissed with costs, such costs to include the costs consequent upon the employment of two counsel. CASE NO: 27974/2010 B.R. SOUTHWOOD JUDGE OF THE HIGH COURT HEARD ON: 18 November 2010 FOR THE APPLICANT: ADV. N.G.D. MARITZ SC ADV. L.A. RETIEF INSTRUCTED BY: Maluleke Msimang & Associates FOR THE FIRST RESPONDENT: ADV. J. MARAIS SC INSTRUCTED BY: Macintosh Cross & Farquharson

29 29 FOR THE FIFTH RESPONDENT: ADV. L. HALGRYN SC INSTRUCTED BY: Jacobson and Levy Inc. DATE OF JUDGMENT: 7 January 2011 CASE NO: 25945/2010 HEARD ON: 18 November 2010 FOR THE APPLICANT: ADV. L. HALGRYN SC INSTRUCTED BY: Jacobson and Levy Inc. FOR THE FIRST RESPONDENT: ADV. N.G.D. MARITZ SC ADV. L.A. RETIEF INSTRUCTED BY: Maluleke Msimang & Associates FOR THE SIXTH RESPONDENT: ADV. J. MARAIS SC INSTRUCTED BY: Macintosh Cross & Farquharson DATE OF JUDGMENT: 7 January 2011