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

• Jurisdiction: South Africa
• Citation: 2014 (4) SA 179 (CC)

Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others
2014 (4) SA 179 (CC)

2014 (4) SA p179

Citation	2014 (4) SA 179 (CC)
Case No	48/13; [2014] ZACC 12
Court	Constitutional Court
Judge	Moseneke ACJ, Cameron J, Dambuza AJ, Froneman J, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van Der Westhuizen J and Zondo J
Heard	February 11, 2014
Judgment	April 17, 2014
Counsel	G Marcus SC (with D Unterhalter SC, M du Plessis, C Steinberg and A Coutsoudis) for the applicants.; S Cilliers SC (with M Mostert) for the first and second respondents.; T Beckerling SC (with R Strydom SC, N Ferreira and J Bleazard) for the third respondent.; S Budlender (with M Townsend and L Kelly) for the first amicus curiae.; T Ngcukaitobi (with M Bishop) for the second amicus curiae.

Flynote : Sleutelwoorde B

Government procurement — Procurement process — Irregularities — Where C invalidating award — Appropriate remedy — Just and equitable order — Proper approach to determining just and equitable remedy in government procurement context — Constitution, s 172(1)(b).

Headnote : Kopnota

Section 172(1)(b) of the Constitution provides that following a declaration of D constitutional invalidity of any law or conduct that is inconsistent with the Constitution, a court 'may make any order that is just and equitable . . .'. This case concerns the determination of a 'just and equitable order' in the context of a government procurement contract that had been declared constitutionally invalid. [*] E

Held: Logic, general legal principle, the Constitution, and the binding authority of this court all pointed to a default position requiring the consequences of invalidity to be corrected or reversed where they can no longer be prevented. This corrective principle operated at different levels: first, it had to be applied to correct the wrongs that led to the declaration of invalidity F in the particular case; second, in the context of public-procurement matters generally, priority should be given to the public good. This meant that the public interest must be assessed not only in relation to the immediate consequences of invalidity — in this case the setting-aside of the impugned contract — but also in relation to the effect of the order on future procurement G and social-security matters. The primacy of the public interest in procurement and social-security matters must also be taken into account when the rights, responsibilities and obligations of all affected persons are assessed. The enquiry must therefore be multi-dimensional. Factual disputes, at a practical level, added another aspect to be considered. In these circumstances, a just and equitable remedy will not always lie in a simple H choice between ordering correction and maintaining the existing position. It may lie somewhere in between, with competing aspects assessed differently. The order at the end of this judgment was one of this kind. (Paragraphs [30], [32] – [33] and [39] at 188D, 189A – D and 190C.)

2014 (4) SA p180

Cases Considered

Annotations A

Case law

AAA Investments (Pty) Ltd v Micro Finance Regulatory Council and Another 2007 (1) SA 343 (CC) (2006 (11) BCLR 1255; [2006] ZACC 9): dicta in paras [40] – [41] and [89] applied

AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency, and Others 2014 (1) SA 604 (CC) ([2013] ZACC 42): dictum in para [56] applied B

Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others 2011 (4) SA 113 (CC) (2011 (3) BCLR 229; [2010] ZACC 26): dictum in para [85] applied

BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A): dicta at 420A – C, 421A and 427 applied C

Chirwa v Transnet Ltd and Others 2008 (4) SA 367 (CC) ((2008) 29 ILJ 73; 2008 (3) BCLR 251; [2008] 2 BLLR 97; [2007] ZACC 23): dictum in para [138] applied

Extel Industrial (Pty) Ltd and Another v Crown Mills (Pty) Ltd 1999 (2) SA 719 (SCA) ([1998] ZASCA 67): dictum at 731D – 732D applied D

Fose v Minister of Safety and Security 1997 (3) SA 786 (CC) (1997 (7) BCLR 851; [1997] ZACC 6): dictum in para [69] applied

Governing Body of the Juma Musjid Primary School and Others v Essay NO and Others (Centre for Child Law and Another as Amici Curiae) 2011 (8) BCLR 761 (CC) ([2011] ZACC 13): dictum in para [58] applied

Grey's Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others 2005 (6) SA 313 (SCA) (2005 (10) BCLR 931; [2005] 3 All SA 33; [2005] ZASCA 43): dictum in paras [26] – [28] applied E

Jajbhay v Cassim 1939 AD 537: dictum at 544 applied

Joseph and Others v City of Johannesburg and Others 2010 (4) SA 55 (CC) (2010 (3) BCLR 212; [2009] ZACC 30): dicta in paras [25] and [34] F applied

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; [2007] ZASCA 165): dictum in para [25] applied

Minister of Health and Others v Treatment Action Campaign and Others (No 2) 2002 (5) SA 721 (CC) (2002 (10) BCLR 1033; [2002] ZACC 15): dictum in para [13] applied G

Mittalsteel South Africa Ltd (formerly Iscor Ltd) v Hlatshwayo 2007 (1) SA 66 (SCA) ([2006] ZASCA 93): dicta in paras [8] – [22] applied

Mvumvu and Others v Minister for Transport and Another 2011 (2) SA 473 (CC) (2011 (5) BCLR 488; [2011] ZACC 1): dicta in paras [46] and [48] H applied

National Credit Regulator v Opperman and Others 2013 (2) SA 1 (CC) (2013 (2) BCLR 170; [2012] ZACC 29): dictum in para [101] compared

Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC) (2007 (3) BCLR 300; [2006] ZACC 16): dictum in para [29] applied

Van der Merwe and Another v Taylor NO and Others 2008 (1) SA 1 (CC) (2007 (11) BCLR 1167; [2007] ZACC 16): dictum in paras [71] – [72] applied. I

Statutes Considered

Statutes

The Constitution of the Republic of South Africa, 1996, s 172(1)(b): see J Juta's Statutes of South Africa 2012/13 vol 5 at 1-51.

2014 (4) SA p181

Case Information

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

S Cilliers SC (with M Mostert) for the first and second respondents.

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

S Budlender (with M Townsend and L Kelly) for the first amicus curiae. B

T Ngcukaitobi (with M Bishop) for the second amicus curiae.

The determination of a just and equitable remedy following a declaration of constitutional invalidity of a government procurement contract. The order is in para [78]. C

Judgment

Froneman J (Moseneke ACJ, Cameron J, Dambuza AJ, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van der Westhuizen J and Zondo J concurring):

Introduction D

[1] This judgment deals with the remedy that should follow upon the judgment on the merits. [1] This court declared the award of the tender by the South African Social Security Agency (SASSA) to the third respondent, Cash Paymaster Services (Pty) Ltd (Cash Paymaster), constitutionally invalid. [2] The declaration of invalidity was based on two grounds. E

2014 (4) SA p182

Froneman J (Moseneke ACJ, Cameron J, Dambuza AJ, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van der Westhuizen J and Zondo J concurring)

A The first was that SASSA failed to ensure that the empowerment credentials claimed by Cash Paymaster were objectively confirmed. [3] The second was that bidders notice 2 did not specify with sufficient clarity what was required of bidders in relation to biometric verification, [4] with the result that only one bidder was considered in the second stage of the B process. This rendered the process uncompetitive and made any comparative consideration of cost-effectiveness impossible. [5]

[2] Section 172(1)(b) of the Constitution provides that, following upon a declaration of constitutional invalidity, a court —

'may make any order that is just and equitable, including —

(i)

an order limiting the retrospective effect of the declaration of C invalidity; and

(ii)

an order suspending the declaration of invalidity for any period and on any conditions, to allow the competent authority to correct the defect'.

[3] Paragraph 4 of the order suspended the declaration of invalidity D pending the determination of a just and equitable remedy. In para 5 the parties were directed to provide factual information and written submissions for the purpose of determining a just and equitable remedy. A further oral hearing took place on 11 February 2014.

2014 (4) SA p183

Froneman J (Moseneke ACJ, Cameron J, Dambuza AJ, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van der Westhuizen J and Zondo J concurring)

[4] The structure of this judgment is as follows. First, I set out a A summary of the factual information provided by the parties and their submissions about the appropriate remedy. I then consider the proper legal approach to determining a just and equitable remedy in the procurement context. I will deal with each of the relevant aspects relating to that before coming to a final conclusion on the appropriate remedy. At B the outset it is necessary to say that the remedy will not disrupt the payment of existing grants.

Factual information and submissions

[5] The information provided by the parties and their submissions are C helpful. There are, however, disputes about the relevance and correctness of certain facts. The provisions allowing the receipt of factual information in this court [6] do not cater for the resolution of disputed evidence. The order we make is not dependent on any factual finding in relation to disputed facts. Nevertheless, the uncontested information provides a useful background for determining a...