Abbm Printing & Publishing (Pty) Ltd v Transnet Ltd

• Jurisdiction: South Africa
• Judge: Schwartzman J
• Judgment Date: 31 July 1997
• Counsel: P Jammy for the applicant IV Maleka for the respondent
• Docket Number: 97/016109
• Court: Witwatersrand Local Division

Schwartzman J:

[1] The applicant company is a printer and publisher. B

[2] The respondent is a company created in terms of the Legal Succession to the South African Transport Services Act 9 of 1989 ('the Act'). It is the successor-in-title to the South African Transport Services which was in turn a part of the Department of Transport. Although the respondent is registered as a public company in terms of the C Companies Act, it is clear from a number of provisions of the Act, which I need not detail, that it remains wholly controlled and owned by the State. The reason I need not detail the provisions of the Act is that Mr Maleka, who appeared for the respondent, conceded that for purposes of argument the respondent is an organ of the State. This concession, the relevance of which will appear hereafter, was based on the judgment of Van Dijk- horst J in D Directory Advertising Cost Cutters v Minister for Posts, Telecommunications and Broadcasting and Others 1996 (3) SA 800 (T). In making this concession Mr Maleka reserved the respondent's right in any subsequent proceedings to challenge the correctness of this decision. E

[3] Before the Act was passed, South African Airways ('SAA') was part of the South African Transport Services. When the Act came into operation South African Airways became a division of the respondent. As part of a service to customers flying its domestic and international routes, South African Airways provides a leisure magazine. For F the past 16 years, the applicant has produced, printed and published this magazine in terms of written contracts concluded from time to time which followed calls for tenders to produce, print and publish the magazine. Over this period the applicant achieved an unblemished record in the fulfilment of its obligations. G

[4] The applicant's existing contract expires on 30 September 1997. On 2 December 1996 and in anticipation of this event and in accordance with past practice the respondent called for tenders for the printing, production and publication of the magazine. All tenders were to be addressed to the chairman of the respondent's tender board. The closing date for tenders was 7 January 1997. On this date the respondent extended the closing date to 21 H January 1997.

[5] The applicant, Mafube Publishing (Pty) Ltd and two other companies submitted tenders. The respondent assessed and evaluated the tenders and recommended to its tender board that the tender be awarded to Mafube Publishing (Pty) Ltd. This recommendation was accepted and on or about 20 June 1997 the applicant was I informed that its tender had been unsuccessful.

[6] Disappointed at the failure of its tender the applicant sought reasons from the respondent. In a telephone discussion it was orally advised by the deputy chairman of the respondent's tender board that no further J

Schwartzman J

A comment on the respondent's internal processes in connection with the tender would be given. On 20 June 1997 the applicant was advised in writing that 'South African Airways does not bind itself to accept the lowest or any tender nor will it assign any reason for rejection of a tender'. The applicant then consulted its attorneys who wrote a B letter to the respondent on 26 June 1997 the relevant portion of which reads as follows

'2. For reasons it is not necessary to record in this letter, our client wishes to confirm that the tender process and its outcome has not infringed its right or legitimate expectation that the Transnet tender board would fairly, responsibly and C honestly consider all tenders submitted and would properly apply its mind in arriving at a decision regarding the award of the tenders. In this regard the process of consideration of tenders constitutes administrative action and our client is entitled to all information it may reasonably require to establish whether or not its right to lawful administrative action has been violated. In the absence of such information our client is not able to establish whether its rights have been infringed, and will clearly be prejudiced.

D 3. In order to establish whether or not its right to lawful administrative action has been violated, our client reasonably requires the following documents:

3.1

copies of all tenders received by the chairman of the Transnet tender board in response to the written invitation for tenders dated 2 December 1996 bearing reference number AIR/MS.40;

3.2

E all reports, minutes or other documents recording an evaluation by South African Airways for the Transnet tender board of the tenders submitted in response to the invitations referred to above;

3.3

a copy of any contract concluded with the party whose tender, in response to the invitation referred to above, was accepted.'

[7] The relevant part of the respondent's reply dated 3 July 1997 is in the following terms:

F 'It is hereby confirmed that the Transnet tender board concurred on 11 June 1997 in the recommendation of the executive director of Transnet Ltd under whose responsibility South African Airways resorts that tender AIR/MS40/1997 be awarded to Mafube Publishing (Pty) Ltd.

It is not the policy of the Transnet tender board to provide reasons for its decision to unsuccessful tenderers and tenderers G are informed of this policy in the tender conditions - see clause 10.1 of the Conditions of Tender that had previously been sent to your client.'

Clause 10.1 of the tender conditions is in the following terms:

'SAA does not bind itself to accept the lowest or any tender, nor will it assign any reason for the rejection of a tender.'

H [8] On 8 July 1997 the applicant's attorneys wrote as follows to the respondent:

'We have been instructed to reply to your fax of 3 July 1997 as follows:

1.

Our client wishes to establish that the tender process undertaken by the Transnet tender board and its outcome have I not infringed its right to administrative action that is "lawful, reasonable and procedurally fair" in terms of s 33 of the Constitution of the Republic of South Africa Act 108 of 1996 (hereinafter referred to as "the Constitution"). The tender board is an administrative body of an organ of the State, namely Transnet Ltd, which falls within the definition of such being a functionary or institution "exercising a public power or performing a public function in terms of any J legislation".

Schwartzman J

2.

The administrative action undertaken by the Transnet tender board has had an adverse effect on our client's rights or A legitimate expectations and our client is entitled to written reasons for the decisions of the tender board in terms of s 33(2) of the Constitution.

3.

Our client is also entitled to the documentation requested in our letter of 26 June 1997 in the exercise of its right of access to information in terms of s 32 of the Constitution, which documentation is reasonably required for the B protection or exercise of any of its rights or legitimate expectations.

4.

If we do not receive an unconditional undertaking to provide our client with the information and requested documents by 12:00 on 10 July 1997, our client will approach the High Court for appropriate relief.

5.

This letter is not intended to be exhaustive of our client's contentions, which shall be dealt with more fully in the C appropriate forum. All our client's rights are reserved.'

[9] On 11 July 1997 and in the absence of a response to this letter the applicant brought this urgent application in which it is seeking the following relief: D

'2. Declaring para 10.1 of the respondent's conditions of tender to be in conflict with the provisions of s 33 and/or s 217 of the Constitution of the Republic of South Africa Act 108 of 1996 and hence to be invalid.

3. Ordering the respondent to provide to the applicant written reasons for the rejection of its tender for the contract for the publishing and printing of South African Airways Inflite Magazine (tender No AIR/MS40) within 24 hours of the granting of E this order.

4. Ordering the respondent to provide to the applicant within 24 hours of the grant of this order

(a)

copies of all tenders received by the chairman of the Transnet tender board in response to the written invitation for tenders dated 2 December 1996 under reference No AIR/MS40; F

(b)

copies of all reports, minutes and other documents recording an evaluation by South African Airways or the Transnet tender board of tenders submitted in response to the invitation referred to above;

(c)

a copy of any contract concluded with the party whose tender in...