Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency, and Others

• Jurisdiction: South Africa
• Citation: 2013 (4) SA 557 (SCA)

Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency, and Others
2013 (4) SA 557 (SCA)

2013 (4) SA p557

Citation	2013 (4) SA 557 (SCA)
Case No	678/12; [2013] ZASCA 29
Court	Supreme Court of Appeal
Judge	Nugent JA, Ponnan JA, Theron JA, Petse JA and Southwood AJA
Heard	February 15, 2013
Judgment	March 27, 2013
Counsel	G Marcus SC (with D Unterhalter SC, M du Plessis, C Steinberg and A Coutsoudis) for the appellant.; SA Cilliers SC (with NA Cassim SC, MC Erasmus SC, M Mostert and A Higgs) for the first and second respondents.; TW Beckerling SC (with R Strydom SC, N Ferreira and J Bleazard) for the third respondent.; T Ngcukaitobi (with Z Gumede and M Bishop) for the amicus curiae.

Flynote : Sleutelwoorde B

Government procurement — Procurement process — Irregularities — Whether C invalidating award — Invalidating public contracts for inconsequential irregularities would be gravely prejudicial to public interest — Irregularities only invalidating awards when in conflict with law and therefore unable to produce legally valid result.

Government procurement — Procurement process — Irregularities — Where D invalidating award — Appropriate remedy — At most re-evaluation of bids without irregularities could be ordered — However, such order pointless where outcome of award would be same.

Headnote : Kopnota

It would be gravely prejudicial to the public interest if the law were to invalidate E public contracts for inconsequential irregularities. An act is not 'irregular' for purposes of the law simply because one chooses to call it that. An irregularity that leads to invalidity is one that is in conflict with the law and therefore not able to produce a legally valid result. In the present case there were no unlawful irregularities. (Paragraphs [21], [58] and [96] at 562F – G, 569F – G and 576I – 577B.)

Even if there had been fatal irregularities in the evaluation of the bids, at most a F re-evaluation of bids without the irregularities could be ordered. However, where (as in the present case) the outcome would be the same (because only the winning bid offered the desired solution) no point would be served by such an order. (Paragraphs [104] – [105] at 578E – H.)

Cases Considered

Annotations G

Case law

Acting Chairperson: Judicial Service Commission and Others v Premier of the Western Cape Province 2011 (3) SA 538 (SCA): distinguished

Administrator, Transvaal, and Others v Traub and Others 1989 (4) SA 731 (A): referred to H

Dormell Properties 282 CC v Renasa Insurance Co Ltd and Others NNO 2011 (1) SA 70 (SCA): referred to

Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA) (2008 (5) BCLR 508; [2008] 2 All SA 145): dictum in para [23] applied I

Minister of Social Development and Others v Phoenix Cash & Carry – PMB CC [2007] 3 All SA 115 (SCA): referred to

Moseme Road Construction CC and Others v King Civil Engineering Contractors (Pty) Ltd and Another 2010 (4) SA 359 (SCA): referred to

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): referred to J

2013 (4) SA p558

Premier, Free State, and Others v Firechem Free State (Pty) Ltd 2000 (4) SA 413 (SCA) ([2000] 3 All SA 247): distinguished A

Ruyobeza and Another v Minister of Home Affairs and Others 2003 (5) SA 51 (C) (2003 (8) BCLR 920): distinguished

S v N 1988 (3) SA 450 (A): dictum at 458I – 459A applied

Schierhout v Union Government (Minister of Justice) 1919 AD 30: B distinguished

Watchenuka and Another v Minister of Home Affairs 2003 (1) SA 619 (C) (2003 (1) BCLR 62): distinguished

Yates v University of Bophuthatswana and Others 1994 (3) SA 815 (B): distinguished.

Case Information

G Marcus SC (with D Unterhalter SC, M du Plessis, C Steinberg and A Coutsoudis) for the appellants. C

SA Cilliers SC (with NA Cassim SC, MC Erasmus SC, M Mostert and A Higgs) for the first and second respondents.

TW Beckerling SC (with R Strydom SC, N Ferreira and J Bleazard) for the third respondent.

T Ngcukaitobi (with Z Gumede and M Bishop) for the amicus curiae. D

An appeal against an order of the North Gauteng High Court to not set aside a tender awarded in terms of a tender process it had declared 'illegal and invalid', and a cross-appeal against such declaration.

Order E

1.

The appeal is dismissed with costs.

2.

The cross-appeal is upheld with costs. The orders of the court below are set aside and substituted with an order dismissing the application with costs.

3.

F Both in this court and in the court below the costs are to include the costs of three counsel where three counsel were employed.

Judgment

Nugent JA (Ponnan JA, Theron JA, Petse JA and Southwood AJA G concurring):

[1] This is yet another case concerning a public tender. On this occasion the tender was for the payment of social grants. The body that invited the tenders was the South African Social Security Agency (SASSA) established under Act 9 of 2004. SASSA and its chief executive officer are the second and first respondents respectively. The contract was awarded to Cash H Paymaster Services (Pty) Ltd (CPS) — the third respondent. AllPay Consolidated Investment Holdings (Pty) Ltd — the first appellant — also tendered but was unsuccessful.

[2] Aggrieved at the award of the contract, AllPay and various associated companies [1] — I will refer to them collectively as AllPay — applied to the I North Gauteng High Court for orders setting aside the decision to appoint CPS and the contract that followed upon that decision. The relief sought was amended in the course of the hearing before the court below and I deal with that later in this judgment. For the moment it is sufficient

2013 (4) SA p559

Nugent JA (Ponnan JA, Theron JA, Petse JA and Southwood AJA concurring)

to say that the court below (Matojane J) declared 'the tender process [to A be] illegal and invalid', but also ordered that 'the award of the tender to [CPS] is not set aside'. AllPay now appeals the latter order and CPS cross-appeals the former order, in both cases with the leave of that court.

[3] It is as well at the outset to clear the atmosphere in which this case has been conducted so as to have certainty on what is before us. B

[4] Whatever place mere suspicion of malfeasance or moral turpitude might have in other discourse, it has no place in the courts — neither in the evidence nor in the atmosphere in which cases are conducted. It is unfair, if not improper, to impute malfeasance or moral turpitude by C innuendo and suggestion. A litigant who alleges such conduct must do so openly and forthrightly so as to allow the person accused a fair opportunity to respond. It is also prejudicial to the judicial process if cases are adjudicated with innuendo and suggestion hovering in the air without the allegations being clearly articulated. Confidence in the process is built on transparency and that calls for the grounds upon which cases are argued and decided to be openly ventilated. D

[5] The affidavits of AllPay evoke suspicion of corruption and dishonesty by innuendo and suggestion but without ever making the accusation directly, and to a degree that has carried over to the heads of argument filed on its behalf. To clarify the position AllPay's counsel was asked at E the outset of the hearing whether corruption or dishonesty was any part of its case, and that was unequivocally disavowed. It confined its case to what were said to have been fatal irregularities and it was on that basis that the appeal proceeded.

[6] But there have been many twists and turns in the case and there was F to be another twist even after the appeal had been heard. Some three weeks after the hearing there arrived, unannounced, an application on behalf of AllPay to introduce further evidence into the appeal. AllPay said that the evidence establishes that the tenders were evaluated dishonestly. Its explanation for its earlier disavowal was that the evidence came to hand in admissible form only after the appeal had been heard. G

[7] It is the practice of this court that parties may not file new material after the hearing of an appeal without the leave of the court. There must be finality in litigation and finality comes for the litigants once the appeal has been heard. That was conveyed to the attorneys of all the parties and H they were directed to refrain from doing so. The response from AllPay's attorneys was to ask our leave to file the application formally. After reading the application we refused the request because even on its face, without hearing the other parties, there is no possibility that the application could succeed. I give the reasons for that briefly.

[8] The evidence sought to be introduced was an affidavit of a certain I Mr Kay. He related a clandestine meeting with Mr Tsalamandris — an employee of SASSA who had provided administrative assistance when the tenders were evaluated — at a restaurant a year ago. In preparation for the meeting Mr Kay purchased a device with which he recorded their conversation. J

2013 (4) SA p560

Nugent JA (Ponnan JA, Theron JA, Petse JA and Southwood AJA concurring)

A [9] On the same day, after the conversation, Mr Kay wrote to the attorneys for AllPay. He told them in broad terms what Mr Tsalamandris had said and that he had a recording of the conversation. About a month later an anonymous account of the conversation was published in a Sunday newspaper.

B [10] AllPay's attorneys listened to the recording shortly before its final affidavit was filed. They said 'they understood the position to be that Mr Kay was, at least at that stage, not willing for the content of the recording to be made public or placed before the court' and for that...