Government of the Republic of South Africa v Thabiso Chemicals (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Harms ADP, Brand JA, Maya JA, Boruchowitz AJA and Kgomo AJA
• Judgment Date: 25 September 2008
• Docket Number: 148/2007
• Hearing Date: 05 September 2008
• Counsel: BR Tokota SC (with NAR Nqoepe) for the appellant. MM Ripp SC (with PJ Vermeulen) for the respondent.
• Court: Supreme Court of Appeal

Government of the Republic of South Africa v Thabiso Chemicals (Pty) Ltd
2009 (1) SA 163 (SCA)

2009 (1) SA p163

Citation	2009 (1) SA 163 (SCA)
Case No	148/2007
Court	Supreme Court of Appeal
Judge	Harms ADP, Brand JA, Maya JA, Boruchowitz AJA and Kgomo AJA
Heard	September 5, 2008
Judgment	September 25, 2008
Counsel	BR Tokota SC (with NAR Nqoepe) for the appellant.; MM Ripp SC (with PJ Vermeulen) for the respondent.

Flynote : Sleutelwoorde B

Tender board — Tender process — Cancellation of tenders — Misrepresentation by tenderer — Ordinary principles of contract applicable — Administrative law playing no role — Implied misrepresentation by conduct also covered. C

Headnote : Kopnota

The respondent sued the appellant out of the High Court for damages arising out of the alleged wrongful cancellation by the State Tender Board (representing the appellant) of a contract for which the respondent had been the successful tenderer. In its defence, the appellant denied that its cancellation D of the contract was wrongful. It alleged that, in terms of clause 24.8.2 of the General Conditions to which the tender was subject, the contract had been awarded on the strength of information impliedly furnished by the respondent which, after conclusion of the contract, had been proved to be incorrect; thus entitling the tender board to cancel the contract. The alleged incorrect information was that the respondent was an SABS-listed company; the E information was allegedly furnished by implication when the respondent failed to submit an SABS report from which only SABS-listed companies were exempt. After a separation of the issues of wrongfulness and quantum, the High Court found that the respondent had never alleged that it was an SABS-listed company and that the subsequent cancellation was thus F wrongful. The appellant appealed against that decision to the Supreme Court of Appeal.

Held, that the essential element of clause 24.8.2 was the furnishing of information, ie a representation by the tenderer, which influenced the award of a tender in his or her favour, but which subsequently turned out to be incorrect. (Paragraph [12] at 167E-F.) G

Held, further, that it was generally accepted that the effect of an implied misrepresentation by conduct was equivalent to a misrepresentation by express words. That general principle also found application in an enquiry under clause 24.8.2. Thus understood, information conveyed impliedly by conduct would, for the purposes of that provision, be the equivalent of furnishing information by express words. (Paragraph [14] at 168A-C.) H

Held, further, that the most probable inference from the respondent's failure to submit an SABS report was that it was an SABS-listed company. (Paragraph [16] at 168H.)

Held, further, that the appellant had thus established the incorrect information upon which it relied to cancel the contract. It followed that the appeal had I to succeed. (Paragraph [17] at 168H.)

Held, further, that, the principles of administrative law had no role to play in the outcome of the present dispute. After the tender had been awarded, the relationship between the parties was governed by the principles of contract law. (Paragraph [18] at 168J-169B.) Appeal upheld. J

2009 (1) SA p164

Cases Considered

Annotations A

Reported cases

Cape Metropolitan Council v Metro Inspection Services (Western Cape) CC and Others 2001 (3) SA 1013 (SCA) (2001 (10) BCLR 1026): dictum in para [18] applied

Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA) ([2001] 1 All SA 581): dictum in para [28] applied B

Standard Bank of South Africa Ltd v Coetsee 1981 (1) SA 1131 (A): referred to

Steenkamp NO v Provincial Tender Board, Eastern Cape 2006 (3) SA 151 (SCA) ([2006] 1 All SA 478) - [12]: dictum in paras [11] - [12] applied.

Case Information

C Appeal from a decision in the Transvaal Provincial Division (Botha J). The facts appear from the judgment of Brand JA.

BR Tokota SC (with NAR Nqoepe) for the appellant.

MM Ripp SC (with PJ Vermeulen) for the respondent.

Cur adv vult. D

Postea (September 25).

Judgment

Brand JA: E

[1] Preliminary issues in this appeal arose from a condonation application by the respondent for the late filing of its heads of argument. I find it appropriate to deal with these preliminary issues at the end of the F judgment. As to the merits, proceedings started when the respondent (Thabiso) instituted action against the appellant (the government) in the Pretoria High Court. According to the particulars of claim, its claim was for damages in the amount of R15 016 846, allegedly arising from the wrongful cancellation by the State Tender Board (the tender board), G representing the government, of a contract between the parties. In its plea, the government admitted both the contract and its cancellation by the tender board, but denied that the cancellation was wrongful.

[2] At the commencement of the trial, the parties asked the court a quo (Botha J) to order a separation of issues. In terms of the separation order, H the issues surrounding the wrongfulness of the tender board's purported cancellation were decided first, while the quantum of Thabiso's alleged damages stood over for later determination. The preliminary issues were decided in favour of Thabiso. Hence the court declared that the cancellation of the contract by the tender board was wrongful and ordered the government to pay the costs of the preliminary proceedings. I The government's appeal against that judgment is with the leave of the court a quo.

[3] It is common cause that the contract between the parties originated from an invitation by the tender board for tenders to deliver cleaning materials to various government departments. In terms of the invitation, J the closing date for tenders was 10 April 2001. Thabiso's tender was

2009 (1) SA p165

Brand JA

submitted in time. In due course it was notified by the tender board that A its tender had been accepted. In accordance with the invitation, the tender was expressly made subject, firstly, to the...