MEC for Roads and Public Works, Eastern Cape, and Another v Intertrade Two (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Howie P, Farlam JA, Heher JA, Van Heerden JA and Maya AJA
• Judgment Date: 27 March 2006
• Docket Number: 047/2005
• Hearing Date: 23 February 2006
• Counsel: R G Buchanan SC and S V Notshe SC for the appellants. K J Kemp SC (with I Pillay) for the respondent.
• Court: Supreme Court of Appeal

Maya JA:

[1] This appeal concerns the right of an unsuccessful tenderer who has instituted review proceedings in terms of Uniform Rule 53 C against the public body that called for tenders, to obtain information relating to the tender adjudication process from such body.

[2] The respondent, Intertrade Two (Pty) Ltd (Intertrade), is a supplier and repairer of mechanical and electrical plant and equipment. It instituted application proceedings in the Bisho High D Court (Dhlodhlo ADJP) seeking various forms of relief, inter alia, the review of the appellants' tender process, in which it was a tenderer, on the grounds of irregular conduct on the part of the appellants' officials. In addition to the record envisaged by Rule 53(1)(b), Intertrade requested a wide range of documents E relating to the tender process to enable it properly to formulate its case. The appellants raised a question of law in terms of Rule 6(5)(d)(iii), challenging the validity of the procedure adopted by Intertrade. The objection was aimed at Intertrade's request for additional documents on the basis that its invocation of Rule 53 confined it to the production of only those documents falling within the ambit of the record envisaged by the Rule. The appellants contended F that s 7 of the Promotion of Access to Information Act 2 of 2000 (PAIA) precluded Intertrade from demanding such additional documents before it had exhausted its procedural remedies under both Rule 53 and Rule 35(12). Dhlodhlo ADJP dismissed the objection and granted the relief sought. The appellants appeal against that order with his G leave.

[3] The facts on which Intertrade based its application were not in dispute. In March 1997 the first appellant (the department) awarded a tender to Intertrade's corporate predecessor for a two-year contract for preventative maintenance and repairs of plant and equipment at various provincial hospitals in the Eastern Cape. Prior to the H expiration of the contract, the parties agreed to extend it for a further one-year period on the same terms. Similar extensions followed until 31 March 2003. After the expiry of the initial contract in March 1999, the department had, in three successive tender processes, invited tenders for the contract in different formats in an attempt to I include other suppliers. Intertrade was the only tenderer on each occasion but the contract was not awarded. This occurred again in 2002, despite the department's recommendation in favour of Intertrade. The second appellant (the Tender Board) rejected the recommendation and instructed the department to 'rephrase the tender specifications' - which had, in fact, been done in the previous J

Maya JA

processes - and re-advertise the tender to accommodate other service providers. The tender was once again not A awarded.

[4] In September 2003 the department invited tenders, valid for 90 days, for four contracts - two for mechanical and electrical work (the ME contracts) and two for laundry and kitchen repairs and maintenance (the LK contracts) at provincial hospitals in B certain municipal districts. Intertrade was the only tenderer for the ME contracts and one of two tenderers for each of the LK contracts. When the Tender Board did not make a decision on the tenders within the stipulated time, Intertrade complained to it and to the department in a number of letters. In its reply, the department expressed surprise that Intertrade had not been awarded the contracts. Intertrade then wrote to C the Premier of the Province, subsequently cited as one of the respondents in the Court a quo, seeking his intervention. The Premier asked the Provincial Strategy Planning Division (the PSPD) to investigate the matter. In its report to the Premier in March 2004, the PSPD had expressed dismay at the undue D delay, referring to its 'desperation and frustration after having had no appropriate response' from the relevant officials. It also raised concern at the death of patients and other problems which had resulted from the failure to maintain the relevant hospital equipment. At a related meeting of the relevant heads of department, it was apparently concluded that Intertrade had not been treated fairly and the Premier E apparently expressed the view that the contracts should have been awarded to it.

[5] The 2004 national elections, which brought a new Minister for the department and a new Premier in the province, appear to have interrupted the process. In May 2004 the department informed Intertrade F in writing that one of its tenders had not been approved because it was overpriced. This raised suspicion on the part of Intertrade that its tender prices had been tampered with after the closure of tenders as its prices as tendered had been lower than the tender estimates on submission. Strangely, this departmental communication was subsequently G telephonically withdrawn by one of the department's officials without explanation. Having informed Intertrade that it had decided to award one of the LK contracts to the other tenderer concerned (who was also cited as a respondent in the Court a quo), the department then requested Intertrade to extend the validity of its tenders in respect of both LK contracts. Intertrade agreed to do so. In H a bizarre turn of events, Intertrade was, at this...