Abagibeli Insurance Administrators (Pty) Ltd v The SA Rail Commuter Corp Ltd

• Jurisdiction: South Africa
• Judge: Visser AJ
• Judgment Date: 23 May 2007
• Court: Transvaal Provincial Division
• Hearing Date: 17 May 2007
• Docket Number: 17184/06

Louis Visser AJ:

1.

By notice of motion the Applicant prays for orders in the following terms:

"1.

That the 1st respondent's decision taken during April 2006 whereby the contract in terms of tender RPF-275-38-04 was awarded to the 2nd and 3rd respondents as a joint venture, alternatively as contractor and subcontractor, be reviewed and corrected or set aside;

2.

That any new contract concluded by the 1st respondent as a result of a court order of this honourable court on 23 May 2006 under case number 14711/2006 be declared null and void and of no force and effect.

3.

That the contract in terms of the said tender be awarded to the applicant.

4.

That the 1st respondent be ordered to pay the cost of the application and in the event of any of the other respondents opposing the relief sought hereunder, it to be ordered, jointly and severally with the 1st respondent, to pay such costs.

5.

That the applicant be granted further and/or alternative relief."

2.

The Notice of Motion and founding affidavit, attested to by Ms Lange of the applicant, and annexures thereto were filed by the applicant on 30 May 2006. A supplementary affidavit by Ms Lange to the founding affidavit was filed on 8 November 2006. An Answering affidavit by the first respondent, attested to by a Mr Mchuba, was filed on 19 January 2007. No answering affidavit was filed by the other respondents. A replying affidavit by the applicant was filed on 13 March 2007, again attested to by Ms Lange.

3.

This review application is brought in terms of Rule 53 of the Uniform Rules of Court, in terms of which the first respondent was required to provide a record of the proceedings. Such record of the proceedings was filed on 25/6/2006. A supplementary record was filed on 25/10/2006.

4.

What appears to be common cause, or not disputed, are, inter alia, the following facts and circumstances:

-

In the past, prior to the invitation to tender, the applicant had made use of the services of Dalys and Associates (Pty) Ltd)

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("Dalys") as insurance brokers.

-

Dalys was first appointed in 1991 as insurance brokers for the first respondent for five years. The appointment was extended for a further five years on two occasions, terminating on the 31 May 2005, when the first respondent publicly invited tenders for the appointment of insurance brokers for the period after 31 May 2005.

-

Pending the completion of the tender procedure, Dalys' brokering mandate was extended to 31 August 2005. The tender procedure not having been completed by that time, the mandate was further extended to 31 May 2006 on a month-to-month basis.

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The applicant does business as an insurance brokerage firm. Dalys owns 49% shareholding in the applicant.

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Prior to 2003, Dalys performed the insurance brokerage function for the first respondent.

-

Between 2003 and 2005, the first respondent's brokering services had been performed by the applicant as understudy of Dalys with the first respondent's knowledge and consent. This consent was apparently given because the appearance on the scene of the applicant did not entail any major change in the identity of the personalities involved. The first respondent continued to liaise with the applicant, primarily, as before, through certain Mr E. Greene. It does not appear from the papers that a formal contract was entered into between the first respondent and the applicant.

-

In the foresaid capacity the applicant assumed responsibility for the placement, management and administration of the first respondent's insurance programme.

5.

The tender process commenced on 27th February 2005, when the first respondent published a "Request for Proposals". This was accompanied by certain "Conditions of Tender".

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THE "REQUEST FOR PROPOSALS":

6.

In the Request for Proposals, the first respondent invited tenderers to submit "a business profile, which would enable the SARCC (the applicant) to evaluate the ability to provide a professional insurance brokering for a period of three years" and to express their "willingness to participate in this project by the submission of a priced proposal in support of your appointment". It was a stated condition for tenderers to have a black equity ownership of at least 25%. Tenderers were advised that tenders would be evaluated for "financial viability, black equity ownership, security screening and technical capacity and ability". It was specifically stated that the first respondent would not be obliged to accept the lowest, or any tender.

It was further stated that a compulsory tender briefing would be held on 4 March 2005, at a specified address, and that tender documents would be ready for collection by 1 March 2005. The closing date for the tenders was stated to be Friday, 29 March 2005 at 10:00.

THE "CONDITIONS OF TENDER":

7.

As stated, the Request for Proposals was accompanied by "Conditions of Tender". Some of the provisions of the Conditions of Tender which have a bearing on the present application were the following:

-

It was provided that the representative of the first respondent and each tenderer who submitted a tender, "shall act as stated in his Conditions of Tender and in a manner which is fair, equitable, transparent, competitive and cost-effective".

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The document stated that the tenderers would be obliged to include the rates, prices and the total of the prices, all duties, taxes (except VAT) and other levies payable by the successful tenderer.

-

The tenderers were obliged to provide rates and prices which

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were fixed for the duration of the contract and not subject to adjustment, except as provided for in the conditions of contract, to be concluded with the successful tenderer.

-

In respect of prices it was stated that no change in the total of the prices would be permitted except as required by the first respondent's representative to confirm the correction of arithmetical errors discovered and that the total of the prices, as stated by the tenderer, as corrected by the first respondent's representative, shall be binding upon the tenderer.

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The document further stipulated that the first respondent undertook to disclose the evaluated tender price only to the relevant SARCC tender committee and undertook that it would not disclose information relating to the evaluation and comparison of tenders and recommendations for the award of a contract to tenderers or to any other person not officially concerned with the tender process.

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Under the heading "Tender Objectives" it was stated that it was required of tenderers to provide management fee structures for the provision of the following services to be rendered in connection with the insurance brokerage of the first respondent:

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General administration and annual placement;

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Claims Management;

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Risk analysis and management.

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In respect of the first respondent's insuring policy it was stated that it was the policy to "make this to use of the market capacity, expertise and underwriting experience of the Lloyd's market, supported by South African insurers if local market underwriting capacity is available or placement therein is appropriate".

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Tenderers were invited to make proposals in respect of an insurance programme for the first respondent and to provide a full description of a proposed strategy and plan of action, should the tenderer be appointed.

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The "Conditions of Tender" included a "Notice to Tenderers", to which various forms were attached, to be completed by the tenderer.

8.

Five proposals were received before the stipulated deadline of 29 March 2005. Of these, one did not qualify, leaving four remaining proposers. These four proposers were invited to submit tenders in terms of another "Notice to Tenderers". It is my understanding that the tenders were to be made in terms of and subject to, the provisions contained in the "Request for Proposal", and documents attached thereto.

9.

The second and third respondents submitted a joint tender, describing themselves as a joint venture. It is also stated that their relationship was really one of contractor and subcontractor. Nothing turns on this point. Hence, when referring in this judgment to the tenders of the second and third respondent, I shall simply refer to the tender of the second respondent, this to be understood as including reference to the third respondent.

10.

I shall later deal with the history of events which took place after 29 March 2005.

THE URGENT APPLICATION:

11.

Having been considered by the relevant committees, and after recommendations had been made, the Board of Control of the first respondent approved the tender of the second respondent on 24 April 2006.

12.

After being advised of this decision of the first respondent, the applicant moved an urgent application in this Court to interdict and restrain the first respondent from putting into effect any contract with the second respondent in consequence of the acceptance of the tender

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of the second respondent.

13.

Bertelsmann J made the following orders on 23 May 2006:

"1.

That the first, second and third respondents are hereby interdicted and restrained from implementing the contract in terms whereof second and third respondents were appointed as insurance broking firm for the first Respondent in terms of Tender RPF-275-38-04.

2.

That the applicant is to launch the review application with in 5 (five) days from the date of this order.

3.

That the applicant (is) to pay (the) taxed costs of the first respondent for Friday 19 May 2006.

4.

That the applicant (is) to pay the second and third respondent's (costs) including the costs...