Goodman Bros (Pty) Ltd v Transnet Ltd

• Jurisdiction: South Africa
• Judge: Blieden J
• Judgment Date: 21 April 1998
• Citation: 1998 (4) SA 989 (W)
• Docket Number: 98/5002
• Hearing Date: 26 March 1998
• Counsel: E Price for the applicant RD Levin (with him IV Maleka) for the respondent
• Court: Witwatersrand Local Division

Goodman Bros (Pty) Ltd v Transnet Ltd
1998 (4) SA 989 (W)

1998 (4) SA p989

Citation	1998 (4) SA 989 (W)
Case No	98/5002
Court	Witwatersrand Local Division
Judge	Blieden J
Heard	March 26, 1998
Judgment	April 21, 1998
Counsel	E Price for the applicant; RD Levin (with him IV Maleka) for the respondent

Flynote : Sleutelwoorde H

Constitutional law — Human rights — Right of access to State information in terms of s 32 in chap 2 of Constitution of the Republic of South Africa Act 108 of 1996 read with item 23(2)(a) of Schedule 6 to Constitution — Organ of State refusing to furnish reasons for rejection of applicant's tender — Unrestricted access to documents in possession of public body can lead to I abuse, especially where documents furnished by third parties in reasonable expectation that outsiders and competitors would not have unrestricted access — Applicant seeking access to such documents needing more than unsubstantiated apprehension of harm before entitled to access to information. J

1998 (4) SA p990

Constitutional law — Human rights — Right to administrative justice in terms of s 33 in chap 2 of Constitution of the Republic of A South Africa Act 108 of 1996 read with item 23(2)(b) of Schedule 6 to Constitution — Award of tender by organ of State — Adjudication of tenders an administrative act — Organ of State refusing to furnish reasons for rejection of applicant's tender — B Respondent's conditions of tender providing that it was not obliged to provide reasons for decision to unsuccessful tenderers — Such condition contrary to spirit of Constitution — Applicant not able to waive constitutional right — Respondent obliged to furnish reasons for decision.

Constitutional law — Constitution — Interpretation of — Constitution of the Republic of South Africa Act 108 of 1996 — Definitions in s C 239 — 'Organ of State' — Transnet Ltd performing public functions in terms of relevant legislation — Transnet not free agent in conduct of its business — Transnet an organ of State and subject to provisions of Constitution relating to such bodies.

Administrative law — Administrative act — What constitutes — Tenders — Consideration and adjudication of tenders by organ of D State an administrative act in sense referred to in ss 33 and 217 of Constitution of the Republic of South Africa Act 108 of 1996.

Transport services — Transnet Ltd — Nature and status of — Whether Transnet an organ of State in terms of s 239 of Constitution of the Republic of South Africa Act 108 of 1996 — Transnet performing public functions in terms of relevant legislation — Transnet E not free agent in conduct of its business — Transnet an organ of State and subject to provisions of Constitution relating to such bodies — As such obliged to furnish reasons to unsuccessful tenderer for its decision to reject tender — Section 33 of Constitution, read with item 23(2)(b) of Schedule 6 thereto.

Headnote : Kopnota

The applicant had unsuccessfully tendered to supply wrist watches to the respondent. Relying on s 32, read with item 23(2)(b) of Schedule 6, of the Constitution of the Republic of South African Act 108 of 1996, it subsequently applied for an order that a part of the tender conditions, which provided that the respondent would not 'assign any reason for the G rejection of a tender/quotation', was unconstitutional, that the respondent furnish reasons for rejecting the applicant's tender and that the respondent afford the applicant access to various documents, including tenders submitted by the other tenderers. The respondent opposed the application, inter alia, on the grounds that it was not an 'organ of State' as envisaged in s 217 of the Constitution and that its act of awarding the tender was not an administrative act. H

Held, that there was only one shareholder of the respondent, namely the Minister of Transport, and he was the party who appointed the respondent's board of directors, who in turn were responsible for the administration of the respondent. The I respondent was anything but a free agent in the conduct of its business. The respondent was required to provide a service that was in the public interest and could be directed by the Minister not to act contrary to the strategic and economic interests of the Republic. This brought it squarely within the definition of an organ of State as required by s 239 of the Constitution, in that it performed a public function in terms of relevant legislation. There was no doubt that the respondent was an organ of State and subject to the provisions of the Constitution relating to such bodies. (At 995H/I--996B.) J

1998 (4) SA p991

Held, further, that the fact that what had been required of the respondent at the relevant time was a decision as to whether A to accept a tender or not clearly fell within the ambit of the management of the affairs of the respondent. The respondent could not be treated as a normal contracting party. Under s 217 of the Constitution the respondent, as a Government organ, was enjoined by law to conduct its affairs in accordance with a system which was fair, equitable, transparent, competitive and cost-effective. The process by which a tender was to be considered had of necessity to be B classified as an administrative act on the part of the respondent. (At 996D--G.)

Held, further, that s 217 of the Constitution, read together with ss 32(1) and 33, made it plain that in addition to his common-law rights, any person dealing with a State organ such as the respondent, was entitled to expect fairness, C openness and equitable conduct from it in all its actions. The respondent was required to act in the spirit of the Constitution and the consequence of this was that in exercising its discretion to accept or reject any tender the respondent was required to act fairly, responsibly and honestly. (At 997B/C--D.)

Held, further, that the fact that the respondent had not been obliged to call for tenders did not change the position. It did D call for tenders and in the circumstances it had to deal with and adjudicate them fairly and in terms of the Constitution. The Constitution had changed the position where organs of State were involved in requisitioning tenders. Every person dealing with the State was now in a different position than he would have been in had he been dealing with non-State bodies which were only subject to the common law. (At 997E--G.) E

Held, accordingly, that the considering of tenders by the respondent had been an administrative act in the sense referred to in ss 33 and 217 of the Constitution. (At 997G.)

Held, further, that it was not open to the respondent to rely on the clause in the tender conditions which provided that it did not have to 'assign any reason for the rejection of a tender/quotation', even though the applicant may have agreed F thereto. It was contrary to the spirit of the Constitution for the respondent to have required anyone with whom it dealt to waive his constitutional rights. (At 997I/J--998A.)

Held, further, that the respondent was obliged to furnish the applicant with its reasons for rejecting its tender. Not only was it enjoined to do so in terms of the relevant section of the Constitution, but it was also enjoined to do so in G accordance with the requirement of fairness and transparency as stated in s 217 of the Constitution. (At 998J--999A/B.)

Held, further, that an unrestricted right of access to documents in possession of a public body could easily lead to abuse, especially where some of the information in the documents had been furnished by third parties in the reasonable H expectation that outsiders and competitors would not have unrestricted access to such information. The applicant needed to have more than just an unsubstantiated apprehension of harm to it before it was entitled to access to the information it sought. (At 999D--D/E and 1001D.)

Cases Considered

Annotations

Reported cases I

ABBM Printing & Publishing (Pty) Ltd v Transnet Ltd 1998 (2) SA 109 (W): followed but dictum at 118B--C not followed and dictum at 121F--122G distinguished

Aquafund (Pty) Ltd v Premier of the Province of the Western Cape 1997 (7) BCLR 907 (C): followed

Central South African Railways v McLaren 1903 TS 727: referred to J

1998 (4) SA p992

Community Development Board v Revision Court, Durban Central, and Another 1971 (1) SA 557 (N): dictum at A 565B followed

Directory Advertising Cost Cutters v Minister for Posts, Telecommunications and Broadcasting and Others 1996 (3) SA 800 (T): followed

Maharaj v Chairman, Liquor Board 1997 (1) SA 273 (N): dictum at 276J--277B followed B

McKinney v Board of Governors of University of Guelph and Attorney-General for Ontario [1990] 3 SCR 229: referred to

S v Frames (Cape Town) (Pty) Ltd and Another 1995 (8) BCLR 981 (C): dictum at 989E--J followed

Wells v South African Alumenite Co 1927 AD 69: referred to.

Statutes Considered

Statutes C

The Constitution of the Republic of South Africa Act 108 of 1996, ss 32, 33, 217, 239, Schedule 6 item 23(2)(a), (b): see Juta's Statutes of South Africa 1997 vol 5 at 1-174--1-175, 1-204, 1-206, 1-216.

Case Information

Application in terms of ss 32 and 33 of the Constitution of the Republic of South Africa Act 108 of 1996 for an order D directing the respondent to furnish reasons for its failure to award a tender to the applicant and an order declaring a certain tender condition unconstitutional. The facts appear from the reasons for judgment.

E Price for the applicant.

R D Levin SC (with him I V Maleka) for the respondent. E

Cur adv vult.

Postea (April 21).

Judgment

Blieden J:

The applicant was one of six unsuccessful tenderers to supply wrist watches to the respondent. The tender F was in fact awarded, but to a company other than the applicant. The applicant had been...