IN THE HIGH COURT OF SOUTH AFRICA NORTH WEST DIVISION ...

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IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION, MAHIKENG

CASE NUMBER: M379/2015

In the matter between:

NGAKA MODIRI MOLEMA DISTRICT MUNICIPALITY APPLICANT

And

NAPHTRONICS (PTY) LTD 1st RESPONDENT

ARBITRATION FOUNDATION OF SOUTHERN 2nd RESPONDENT

AFRICA

R.G. NAIR N.O. 3rd RESPONDENT

DATE OF HEARING : 15 MARCH 2018

DATE OF JUDGMENT : 25 MAY 2018

COUNSEL FOR APPLICANT : Adv. P Mokoena (SC)

With him Adv. E Mokutu

COUNSEL FOR 1st RESPONDENT : Adv. J L Van der Merwe (SC)

: With Him Adv. L K Van der Merwe

_____________________________________________________________________

JUDGMENT

_____________________________________________________________________

KGOELE J.

Reportable: YES / NO

Circulate to Judges: YES / NO

Circulate to Magistrates: YES / NO

Circulate to Regional Magistrates: YES / NO

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INTRODUCTION

[1] Cora Hoexter in his book “Administrative Law in South Africa

(2007, Juta report), page 226- page 232 remarked as follows:-

“Administrators have no inherent powers. Every incident of

public power must be inferred from a lawful empowering

source, usually legislation. The logical concomitant of this is

that an action performed without lawful authority is illegal or

ultra vires, that is to say, beyond the powers of the

administrator.

[2] Foundational to the exercise of any power by a Municipality is the

requirement that there should be a source in law for the power so

exercised. This fundamental principle was stated by the

Constitutional Court in the case of AAA Investments (Pty) Ltd v

Micro Finance Regulatory Council 2007 (1) SA 343 (CC) in

paragraph [68] as follows:-

“[68]…(t)he doctrine of legality which requires that power should have a source in law, is applicable whenever public power is exercised … public power … can be validly exercised only if it is clearly sourced in law.”

[3] It is settled in our law that the doctrine of legality dictates that a

Municipality may only act within the powers lawfully conferred upon

it. Organs of State are constrained by the doctrine of legality to

exercise only those powers bestowed upon them by the law. See:

Fedsure Life Insurance Ltd v Greater Johannesburg

Transitional Metropolitan Council and Others 1999 (1) SA 374

(CC).

[4] It is evident from the Fedsure decision already quoted in the

previous paragraph that the rule of law embraces the principle of

legality. The principle of legality requires the Government, the

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Legislature and the Courts to act in accordance with the legal

principles and rules that apply to them. It is therefore expected from

an Organ of State such as the applicant to comply with the law and

policies when concluding any agreements or even committing the

applicant with settlement agreements.

[5] The applicant, a Municipality as established in terms of the

enabling statutes, with its offices situated in Mafikeng, makes a

contention in its papers that it is obliged when acquiring and

procuring goods and services, to do so within the principles

espoused in Section 217 of the Constitution of the Republic of

South Africa (the Constitution). It further contends that it must

also do so as envisaged in the enabling statutes read with its

policy documents. In addition, it is obliged in terms of the

Constitution and enabling statutes to ensure that goods are

procured in terms of a competitive system that is fair, transparent,

lawful and cost-effective.

[6] Informed by these legal prescripts, the applicant initiated these

proceedings, seeking a declaratory order to the effect that the

decision of the third respondent (Mr Nair), who was at the relevant

time appointed as its Administrator, and the procedures he

followed in appointing the first respondent (Naphtronics), a

company duly incorporated and registered in accordance with the

Company laws of South Africa, to be declared unlawful. In

addition, the applicant is seeking that the Service Level Agreement

(SLA) dated 29 October 2014, purportedly concluded between the

applicant and the first respondent, be declared invalid, null and

void and be accordingly reviewed and set aside.

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[7] The first respondent is the only party opposing the granting of the

relief sought by the applicant. The third respondent did not oppose

the relief sought but filed an affidavit, after being requested by the

first respondent, to explain to the Court the actions that it had

taken in so far as they are relevant to this matter.

FACTUAL BACKGROUND

[8] On or about 9th June 2014, the applicant appointed Tshireletso

Professional Services (Tshireletso Security) to render security

services on various locations in Mahikeng, as identified in the SLA

concluded through a normal tender process. The appointment

was for a period of 3 (three) years commencing in June 2014 to

June 2017.

[9] Whilst Tshireletso Security was still rendering its security services

to the applicant, the applicant was placed under administration in

terms of Section 139(1)(c) of the Constitution on the grounds of

maladministration. As a result of this the third respondent was

appointed as the Administrator for the applicant, together with a

task team of experts to assist him. He was tasked to manage the

overall administration and to inter alia, investigate all recently

awarded contracts to establish the validity and legitimacy thereof.

[10] I pause here to indicate that, prior to the launch of this application,

there were several other cases already decided in this Division

relating to the unrest in the same Municipality. Furthermore, there

was also a matter that was heard by the Constitutional Court. The

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ones that are more relevant and almost similar to this applications

are:-

• Ngaka Modiri Molema District Municipality v

Azranite Investment (Pty) Ltd and R.G. Nair (Case

No. 409/15);

• Ngaka Modiri Molema District Municipality v Moto-

Tech (Pty) Ltd and R.G. Nair (Case no. CIV APP FB

12/2016);

• Ngaka Modiri Molema District Municipality v

Chairperson of the North West Provincial Executive

Committee and Others 2015 (1) BCLR 72 (CC).

[11] All these cases are relevant because the parties involved are the

same namely: the Municipality and the Administrator Mr Nair (third

respondent). Furthermore, they deal with the issues that were

occurring at the time the third respondent was serving as the

Administrator. But in particular, there is one thread that runs

across the three judgments which is to the effect that: there was a

major problem regarding the ability of the Municipality to render

services; that this failure led to protest which were sometimes quite

violent and resulted in damages to buildings. The protests spilled

over to include some officials at the Municipality as they were

hostile and opposed the appointment of the Administrator. The

dire situation necessitated emergency measures to be applied by

the Administrator in order for the Municipality to fulfil its

Constitutional mandate. It is for this reason that I will not repeat

the factual background that relates to how the situation was at that

particular time to avoid repetition of same. The second reason is

that as much as both parties in casu gave their version of the

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events at that particular time, there are instances where they differ.

In the main, they do not agree on the issue as to whether the

situation needed emergency attention. This dispute can be

summarily resolved in our matter by reliance on the Constitutional

Court matter and the Full Bench of this Division matter already

quoted above, wherein the two Courts had already made a finding

that an emergency situation existed at that particular time. It

therefore goes without saying that as a starting point, the judgment

of this Court will be decided on the first respondent’s facts and the

submission that, the situation at the Municipality at the time the

contract in casu was concluded, needed urgent intervention.

[12] Coming back to the factual background pertinent to this matter

which is common between the parties, on 8 October 2014, the

third respondent made a written offer to the first respondent to

provide emergency security services. It is apparent from the paper

trail of this matter that no “tender” was ever advertised as is normal

procedure and/or that any of the standard procedural processes

were followed when the offer was made. The contract was for a

period of three (3) years effective from 9 October 2014 to October

2017. A written SLA was also signed on 29 October 2014. This

contract for providing 24 hours services was concluded whilst

Tshireletso Security was still on contract with the applicant

Municipality, offering the same services.

[13] On 4 November 2014, the third respondent constituted a Special

Emergency Bid Adjudication Committee in order to approve the

appointment of the first respondent. The said committee eventually

approved the said appointment, subject to a qualification that the

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contract should be reviewed bi-annually. It appears that it was

only on 25 November 2014 that, the Administrator enquired from

Mr Mekoa, who was by then still a Manager in the Supply Chain

Management offices of the applicant, about Regulation 36 of the

Municipal Supply Chain Management Regulations issued in terms

of Section 168 of the Local Government: Municipal Finance

Management Act 56 of 2003, which provides for how goods and

services are to be procured in an emergency situation. The said

advice was attached to the papers as Annexure “N3”. On 20

January 2015, the Senior Manager Corporate Resource Support

Service, whom according to the applicant’s case was apparently

ignored by the third respondent and not consulted with when the

first respondent was appointed, despatched a letter to the

Manager Security Services, raising concerns that they as Advisory

Support Services were overlooked when the contract and the SLA

were concluded, further that they were given such agreements

after their conclusion. He indicated that the contract that was

awarded to the first applicant which he was asked to belatedly give

advice to was invalid and suggested that the first applicant be

asked to render such services on a month to month basis.

[14] Despite this advice, nothing was done by the applicant about the

contract and SLA which the first and third respondents concluded,

until the term of office of the third respondent came to an end on

28 February 2015, when a new Council was elected and a new

Acting Municipal Manager appointed. This appointment came

after the Municipal Manager who was there when the third

respondent was appointed as Administrator, Mr Mojaki, was on

suspension, after the third respondent put him on suspension on

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the October 2014 alleging gross in-subordination and corruption.

He resigned in January 2014.

[15] It appears that from this time the Municipality fell into arrears in

paying what was due to the first respondent. Various Acting

Municipal Managers and/or Administrators who were appointed

thereafter promised one after the other to pay, but payment was

not forth coming. In June 2015 the first respondent appointed A M

Vilakazi Tau Attorneys of Pretoria to claim from the applicant, all

the monies due in respect of the unpaid invoices. The first

respondent elected to refer the dispute to arbitration as provided

for in the SLA signed, and the applicant on the other hand, instead

of participating in the arbitration, resorted to bringing this

application to Court, to stay the arbitration proceedings pending

the reviewing and setting aside of the contract and Service Level

Agreement concluded, hence this application.

THE APPLICANT’S CASE

[16] The applicant’s main contention is that as a Municipality duly

established in terms of Section 12(1) read with Section 14(2) of the

Local Government; Municipality Structures Act 117 of 1998 (The

Structures Act) has, as provided in the Constitution, adopted and

implemented a Supply Chain Management Policy and a Code of

Conduct applicable to parties involved in its procurement

processes. These policies conform with the principles enshrined in

the Constitution. Further that, by virtue of the fact that the third

respondent was appointed in terms of Section 139(1)(c), of the

Constitution, his intervention is confined to failures to comply with

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executive obligations. The applicant argues that, true to

preserving the distinctiveness of a Municipality, intervention in the

legislative domain of a Council is not tolerated. The applicant

maintain that only in very exceptional circumstances may a

Council be dissolved and its Legislative function taken over by the

Province.

[17] As a starting point I fully agree with this proposition by the

applicant. However, this is not the case of the first respondent

either. The first respondent does not contest this issue. But the

contention of the applicant does not end here. The applicant raise

a further issue to the effect that the mere fact that the third

respondent was appointed as envisaged in Section 139(1)(c) of

the Constitution, does not in itself suggest that he is not bound by

the Constitution and the enabling statutes which are applicable to

the applicant. In fact, their proposition continues to the effect that,

when conducting the affairs of the applicant, and in particular when

procuring goods and services, the third respondent was obliged,

just like the Council of the applicant that was dissolved when he

was appointed, and/or any of its structures, to adhere to the

Constitution, the enabling statutes and the policy documents. I

fully agree with this proposition.

[18] Despite the fact that this application was brought before this Court

after the applicant had already paid partly in terms of the impugned

contract by the various Acting Municipal Managers / Administrator

as afore mentioned, I furthermore agree with the applicant that the

action, in particular, that of the current Municipal Manager, in

deciding to institute the current proceedings to set aside its

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appointment of the first respondent by the third respondent

including the SLA concluded, after conducting a due diligence

pertaining to the compliance issues, is sanctioned by our law and

the above mentioned legal principles.

[19] The pertinent issue raised in the applicant’s case is that the

appointment of the first respondent offends the principles of

legality. In the main, they contend that, the first respondent was

appointed without any lawful tender process being adhered to as

envisaged in Section 217 of the Constitution read with the enabling

legislation and the policy documents applicable to the applicant as

a Municipality. In addition, that the first respondent was appointed

at the time when the applicant was in fact having a Security

Company which was still offering those services. The applicant

demonstrated by annexing Annexure “N7”, a remittance advice of

both entities for a period of five months, which reveals an absurd

situation according to it that the applicant is faced with to wit:-

(a) A huge amount of fees charged as compared to those

charged by Tshireletso Security;

(b) Two security bills to pay for both companies which offer

the same security services

The applicant’s argument is that the situation could have been

resolved by extending the Tshireletso Security mandate if ever

there were more areas in the Municipality which needed urgent

security services as the first and third respondent contended.

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[20] The applicant’s Counsel submitted that it is evident from the papers

filed in this matter, that the third respondent appointed the first

respondent by a mere letter dated 4 November 2014, when infact

there were no grounds advanced by the third respondent in this letter

justifying why an open and transparent bidding process was not

followed as envisaged in section 217 of the Constitution read with the

applicant’s enabling legislation.

[21] He added that, it is apparent from the appointment letter that the third

respondent appointed the first respondent with total disregard of the

procurement processes which were applicable at the time.

Furthermore that, the first respondent was appointed without the

relevant procurement structures of the applicant being engaged,

including the relevant officials. No reason, at all is furnished for such

a deviation.

[22] Equally so, his arguments continued, upon perusal of the SLA

concluded between the first respondent and the third respondent, it

is important to highlight that no reason is furnished, at all, for the

deviation. The SLA simply records that:-

“WHEREAS the Supply Chain Policy of Ngaka Modiri Molema

District Municipality provides in Section 32 for procurement of

goods and services under a contract secured by another organ

of state.”

[23] According to him, what is recorded in the SLA does not justify the

departure from the normal procurement processes contrary to the

peremptory provisions of the Constitution, the Municipal Finance

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Management Act 56 of 2003 (MFMA) and the applicable policy

documents of the applicant.

[24] In expanding on the above submissions applicant’s Counsel

submitted that the third respondent appointed the first respondent

unlawfully and illegally without providing any reasons for deviating

from Treasury Regulation 16A6.4 which also provides as follows:-

“If in a specific case it is impractical to invite competitive bids,

the Accounting Officer or Accounting Authority may procure

the required goods or services by other means, provided that

the reasons for deviating from inviting competitive bids must

be recorded and approved by the Accounting Officer or

Accounting Authority.”

[25] Furthermore that, Practice Note 8 of 2007/2008 deals with Supply

Chain Management: Threshold values for the procurement of

goods, works and services by means of petty cash, verbal / written

price quotations or competitive bids, and provides at paragraph

3.4.3, as follows:-

“Should it be impractical to invite competitive bids for specific

procurement, eg in urgent or emergency cases, or in case of a

sole supplier, the Accounting Officer / Authority may procure

the required goods or services by other means, such as price

quotations or negotiations in accordance with Treasury

Regulation 16A6.4. The reasons for deviating from inviting

competitive bids should be recorded and approved by the

Accounting Officer / Authority or his or her delegate.

Accounting Officers / Authorities are required to report within

10 working days to the relevant Treasury and the Auditor-

General all cases where goods and services above the value

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of R1 million (VAT inclusive) were procured in terms of

Treasury Regulation 16A6.4. The report must include the

description of the goods or services, the name/s of the

supplier/s, the amount/s involved and the reasons for

dispensing with the prescribed competitive bidding process.”

[26] He relied on the case of Chief Executive Officer, South African

Social Security Agency, and Others v Cash Paymaster

Services (Pty) Limited 2012 (1) SA 216 (SCA), wherein the

Supreme Court of Appeal, in considering the meaning and effect of

Treasury Regulation 16A6.4, stated that:-

“[21]……First, there must be rational reasons for the

decisions. That is a material requirement. Second, the

reasons have to be recorded. That is a formal requirement.

The basis for these requirements is obvious. State organs are,

as far as finances are concerned, first of all accountable to the

National Treasury for their actions. The provision of reasons in

writing ensures that Treasury is informed of whatever

considerations were taken into account in choosing a

particular source and of dispensing with a competitive

procurement process. This enables Treasury to determine

whether there has been any financial misconduct and, if so, to

take the necessary steps in terms of regulation 33.”

[Emphasis added]

[27] He also referred the Court of the Constitutional Court case of Albutt

v Centre for the Study of Violence and Reconciliation, and

Others 2010 (3) SA 293 (CC) wherein it was stated that, rationality

is not about whether other means could have been used. In this

regard it drew a distinction between the test for reasonableness and

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the test for rationality and pointed out that review for reasonableness

is about testing ‘the decision itself’, whereas review for rationality is

about testing whether there is a sufficient connection between the

means chosen and the objective sought to be achieved.

[28] The last case he referred to was a Supreme Court of Appeal matter

of TEB Properties CC v The MEC, Department of Health and

Social Development, North West, an unreported judgment

(792/10) [2011] ZASCA 243 (1 December 2011), wherein the Court

had an opportunity to properly interpret section 217 of the

Constitution with regard to section 38 of the Public Finance

Management Act 1 of 1999 (PFMA) and Treasury Regulation

16A6.4 and held as follows:-

“[28] It was accordingly argued that regard being had to the fact

that: (i) Kgasi was, as the acting head of the department, its

accounting officer; and (ii) in that capacity, had the authority

to deviate from the bidding process, it was not incumbent

upon the appellant to enquire as to whether internal

procedural requirements pertaining to procurement of goods

or services without any reference to a bidding process had

been complied with by Kgasi. For these propositions the

appellant relied on, inter alia, two judgments of this court in

CEO, SA Social Security Agency NO & others and City of

Tshwane Metropolitan Municipality v R P M Bricks (Pty) Ltd.

[29] This argument cannot be sustained. In CEO, SA Social

Security Agency this court, in considering the import of s

217(1) of the Constitution, said the following: (paras 15 and

17)

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‘Section 217 (1) of the Constitution prescribes the manner in which

organs of State should procure goods and services. In particular,

organs of State must do so in accordance with a system which is

fair, equitable, transparent, competitive and cost effective. This

implies that a “system” with these attributes has to be put in place by

means of legislation or other regulation. The main object of the PFM

Act is to secure transparency, accountability, and sound

management of the revenue, expenditure, assets and liabilities of

the institutions to which the Act applies. . . The PMF Act, read with

the Treasury, Regulations, is such legislation . . .’

[30] When the head of a department, as the accounting officer,

deems it prudent to deviate from the requirements of the

bidding system he would nonetheless still be required to

provide ‘rational reasons for that decision’ as this is a material

requirement. The rationale for this requirement was described

as ‘obvious’ in Chief Executive Officer, SA Social Security

Agency NO

[31] Moreover the appellant’s reliance on City of Tshwane

Metropolitan Municipality is, in my view, misplaced for at least

three reasons. First, the requirements of s 217(1) of the

Constitution read with the provisions of s 38(1)(a)(iii) of PFMA

and Regulation 16A6.4 are not of a formal nature but are

material. Second, the provisions of s 217(1) are peremptory as

are the requirements of s 4 of the North West Provincial

Tender Board Act. Third the mischief that these statutory

prescripts seek to prevent would be perpetuated and the

objective that they seek to promote would be undermined ‘if

contracts were permitted to be concluded without reference to

them and without any resultant sanction of invalidity.’ As to the

provisions of s 4(1) of the North West Tender Board Act, they

make it plain that the exclusive power to, inter alia, arrange the

hiring and letting of anything on behalf of the Government

vests in the Provincial Tender Board. It is thus axiomatic, as

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this court in fact found in Eastern Cape Provincial Government

& others, that’s 4(1) disables the province from acting

autonomously in that regard’.”

[29] As far as the duration of the contract is concerned, the applicant’s

Counsel submitted that Regulation 36 read with the applicant’s

Supply Chain Management Policy contemplates deviation in order

to address an interim measure. Regulation 36, read with the

applicant’s Supply Chain Management Policy does not

contemplate that in addressing an emergency, an interim measure

can exist beyond the purported emergency.

[30] Based on this regulation he argued that a contract concluded for a

duration of three years clearly illustrates the point that no emergency

existed, but that the first respondent was preferred without any

justification, to the detriment of other service providers. A contract of

three years was not an interim measure but it perpetuated the

unlawful conduct of the third respondent to have appointed the first

respondent unlawfully. The third respondent has failed to adduce

evidence justifying its conduct for appointing the first respondent on

a three year contract and thereby denying other service providers to

bid for the services which were offered by the first respondent.

[31] To supplement on this proposition Advocate Mokoena SC

representing the applicant referred this Court to a case of Minister

of Transport NO v Prodibo [2015] 2 All SA 387 (SCA) wherein

the Supreme Court of Appeal went further to interpret section 217

of the Constitution having regard to section 38 of the PFMA, and

held as follows:-

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“[33] Section 38(1)(a)(iii) of the PFMA reads as follows:

“(1) The accounting officer for a department, trading entity or

constitutional institution –

(a) must ensure that that department, trading entity or

constitutional institution has and maintains –

(iii) an appropriate procurement and provisioning

system which is fair, equitable, transparent,

competitive and cost-effective.”

Mr Mahlalela was the accounting officer of the Department. It was

incumbent on him to have regard to constitutional principles, the

provisions of the sub-section set out above and other statutory

prescripts. The High Court erred by not having sufficient regard to

constitutional norms and statutory requirements and concluding that

the decision to produce the new licences in-house could only have

been facilitated by an extension of Prodiba’s contract and that a

competitive bid would not have been viable where the supply of

services would have been for a very limited duration. The High Court

ignored the very extensive period during which Prodiba enjoyed a

monopoly and did not properly appreciate that the five year extension

period was not of very limited duration. More importantly, the

agreement was one in respect of which Prodiba was required to

provide a new service dealing with new technology in respect of which

potential competitors were not engaged. Moreover, in describing

Prodiba as an innocent party which would be prejudiced if the

agreement was to be terminated, the court below ascribed to it a level

of naivety that was unjustified. At the outset it succeeded a successful

tenderer. In 2009 it was a bidder when a new tender was invited and

ultimately not proceeded with. Prodiba knew that new technology and a

new process was required and that the cost implications for the State

were enormous. It must have been obvious that what was required was

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a competitive process which was circumvented by the agreement

under discussion.”

[32] In further substantiating the applicant’s argument, Advocate

Mokoena SC also relied on two judgments of this Division already

mentioned above in demonstrating that the third respondent, even

though he filed an affidavit in this matter, could not justify his

unlawful, illegal and unconstitutional conduct in appointing the first

respondent. Specific reference was made to the following

paragraphs of the judgment of Gura J in the Azranite Investment

matter:-

“[22]During argument, Mr Davis for the respondent referred the Court

to a recent judgment by Landman J, and urged me to follow

that decision. The parties in that case were the same as in the

present except the first respondents. In that judgment the Court

found that a contract which was entered into in order to address

an emergency situation where the duration of the agreement

was 36 months was legally in order.

AND

“[23]I am unable to agree with my brother (Landman J) in this regard.

In my view, a contract entered into for emergency situations

must address the emergency situation now and in the not distant

future. The administrator must, forever keep in mind, that the

intervention in terms of section 139(1) of the Constitution is an

interim measure by the Provincial Government aimed at healing

or addressing the problems which the municipality finds itself in.

The administrator should not be allowed to bind the municipality

in a long term contract whilst masquerading under the cover of

an “emergency situation”. If he/she does enter into such a long

terms contract, there must be reasons why he/she cast his/her

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net so far into the future. How on earth, could the administrator

have known or foreseen, that thirty to thirty six months after the

conclusion of the agreement, the same emergency situation

would still be in existence? Incidentally, on 20 October 2017

Landman J granted the applicant leave to appeal specifically on

the finding relating to the duration of the contract, being 36

months.”

THE FIRST RESPONDENT’S CASE

[33] Advocate Van der Merwe SC appearing on behalf of the first

respondent in his submission mainly concentrated on trying to

show the Court that the applicant’s version relating to the issue

whether there was an emergency or not, should not, using the

Plascon Evans rule, be relied upon as it denied the existence of

an emergency situation when this contract was concluded. For

this submission, Advocate Van der Merwe SC relied heavily on the

affidavit that was filed by the third respondent explaining that his

appointment was made on an emergency basis, which

appointment is allowed in terms of regulation 36 of the Municipal

Supply Chain Management Regulation, 2005, read with Clause

12.2.2. of the Supply Chain Management Policy of the applicant.

[34] He further submitted that the applicant’s replying affidavit does not

deal with or address at all the details of the factual averments as

provided by the first respondent in these regards. He argued that

it is not for the first respondent in this matter to deal with the

evidence in other matters heard in this Division and to either show

that the respondents in those matters did not properly and

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thoroughly present their cases, or, possibly, that the factual

findings in those matters were not justified, which might also be

due to a variety of possible causes. One such possibility

according to him is that, the applicants in those cases perhaps

made incorrect statements as it did in this matter, and thereby

caused the Courts in those matters to make incorrect factual

findings.

[35] He submitted further that this Court should approach the factual

background supplied in this matter afresh, and thereafter only

apply the applicable legal principles to those facts. He opined that

regard to the legal principles of the other judgments from this

Division which the applicant relied upon may well be of

importance, but only in regard to the legal principles pronounced

upon them. He submitted that the applicant in this matter should,

in its replying affidavit, have conceded to the fact that its founding

affidavit contains incorrect factual allegations. Instead, the

replying affidavit attempts to confirm the incorrect statements in

the founding affidavit.

[36] The factual averments which Counsel for the first respondent

refers to and took much time deliberating on mainly refers to

whether there was an emergency situation or not at the time the

tender was awarded to the first respondent, an issue which I had

already pronounced on when I was dealing with the factual

background of this matter. I have already made a finding that in

view of the decision by the Constitutional Court and the two

judgments in this Division, I am prepared to accept the version of

the first respondent that was supported by that of the third

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respondent that the contract was concluded at the time the

emergency situation persisted.

[37] But the question this Court has to answer does not end here. To

bring itself within the aforementioned section and legislative

prescripts the third respondent will have to demonstrate, and not just

merely allege, that it was impractical for him to invite

competitive bids. On the supposition that the afore-going could be

done then, and only then, would the third respondent be justified to

deviate from the regular process, but in such a case the reasons for

the deviation must also be recorded and approved by the

Accounting Officer or Accounting Authority of the applicant, a

Constitutional institution, or public entity.

[38] I have already indicated that much of the submissions made by the

first respondent’s Counsel was devoted to the factual averments of

whether there was an emergency situation. However, the

submissions of the first respondent’s Counsel to answer the two

questions above were very brief even in his written heads of

argument. Quoting them verbatim they were couched as follows:-

“[86] It is clear that administrator and his team of experts were

justified to conclude an emergency placement which was to

the effect that visible steps should be taken to demonstrate to

the various communities that the administration was now

intending to restrict institutional and infrastructure service

delivery. Time was evidently of essence to have the

equipment repaired and replaced in order that water and

sanitation could be provided to the communities. That was

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the only way to restore law and order and to prevent loss of

life and serious damage to property;

[87] There are very little prescripts for the way in which urgent

procurement can be obtained under such urgent

circumstances;

[88] It is clear that there was no time to play with for the

Administrator and his team. The process followed has been

dealt with above. This was not the Administrator acting

clandestinely on his own. This was a team effort fully

canvassed with the team of experts appointed by the

Provincial Government and with an independent Emergency

Bid Adjudication Committee;

[89] The Administrator explained that the first respondent was

appointed provisionally on condition that it would have to be

approved by an Emergency Bid Adjudication Committee.

That explains why the services commenced prior to any

contract having been signed. The Service Level Agreement

was then signed in advance of approval by the Emergency

Bid Adjudication Committee. It was signed by one of the

team members as a witness. The final appointment letter was

written only on 4 November 2015 after the newly appointed

Emergency Bid Adjudication Committee approved that

appointment;

[90] We submit that there are features distinguishing this case

from the Moto-Tech judgment, where it was held that the

23

administrator in that instance did not act in a transparent

manner.

[91] There is nothing suspicious about the above sequence and

process. The Service Level Agreement, which was still

conditional, enabled the said committee to consider the

appointment with all the facts and terms of the proposed

contract available to the members thereof. First respondent

then accepted the qualification imposed by the said

committee;

[93] There is no suggestion that apart from Tshireletso any other

service provider should have been considered. The third

respondent explained in his affidavit that Tshireletso did not

render proper services during the first week of the

emergency and apparently sided with the previous

Councillors and officials. Therefore Tshireletso could not be

relied upon as it was also under suspicion whether it was

properly awarded;

[96] The Administrator confirmed that he and the panel were

of the opinion that Tshireletso was not able to render the

required service on short notice. The additional service was

required to stem the violence immediately. Note that first

respondent already commenced to render services within the

first two weeks of the Administrator taking office, when the

protest action of the officials was still ongoing;

24

[100]The period of three years is explained by the Administrator.

This would give security of tenure for the huge contingent of

qualified security personnel that the first respondent had to

appoint, and that had to be recruited. At the same time,

however, the appointment as finalized on 4 November 2014,

was on the basis that the contract could be reviewed twice per

annum. In the result there was an escape clause should a

reason arise to terminate the contract, or to scale it down;

[102] It is submitted that by placing a motivation before the

Emergency Bid Adjudication Committee, the recording

requirement of Regulation 36 of the Supply Chain

Management Regulations of the National Treasury, echoed by

Clause 12.22 of the Supply Chain Management Policy of the

applicant was complied with. The applicant, who placed only

parts of documents before court, does not react to the

challenge that the motivation be placed before the Court. It is

to be noted that the motivation was furnished before the

contract was finally concluded on 4 November 2014;

[104] We submit that any failure or insufficiency of the duty of the

official officials of the applicant to record the reasons for the

deviation from the ordinary procedures should not be construed

to have the effect of causing a validly entered into contract to be

invalidated. The recording duty is a separate self-standing

formal duty. See: Chief Executive Officer SA Social Security

Agency and O v Cash Paymaster Services (Pty) Ltd 2012 (1) SA

216 (SCA) at par 21. It is the duty of the official to report it to

the Accounting Officer, who is further required to report it to the

25

next meeting of the council. In this instance there was no

Council at the time and the Administrator was occupying the

office of Accounting Officer.

[105] There was at the least, substantial compliance.”

[39] Unfortunately I do not agree with the last submission by the first

respondent’s Counsel that there was substantial compliance. For a

number of reasons I fully agree with the applicant’s Counsel that the

appointment of the first respondent offends the principles of legality

in many respects even though the situation that was prevailing called

for an emergency. The decision to appoint the first respondent was

not in my view rational. It cannot be sustained legally or otherwise.

The third respondent circumvented the entire procurement processes

without any sound and/or valid reason and/or justification proferred. I

need not deal with the law that is the basis of this finding, as it was

thoroughly analysed in the three judgments of this Division referred to

and also because, the parties are ad idem that those are the

applicable legal principles the third respondent was to adhere to in

emergency situations.

[40] If one has regard to the sequence of the factual averments which

relates to the conclusion of the contract in question which are common

to both parties, it is quite clear that the third respondent acted

unilaterally to appoint the third respondent in the first place. It is

admitted by the first respondent that a written offer to the first

respondent was made on 8 October 2014, and the first respondent

started on 9 October 2014, the following day, with its contractual

duties. On 10 October 2014 the Municipal Manager Mr Mojaki was

26

suspended. Even if we can accept the fact that the third respondent

did unilaterally appoint the first respondent because Mr Mojaki was

insubordinate and undermining him, the fact remains that, the third

respondent could not do this function alone. He cannot make an offer

on his own, decide on the offer and appoint the service provided

himself despite how dire the situation was, more especially because

there were legal prescripts available to deal with the emergency

situation he found himself in. Contrary to what the legal Counsel of

the first respondent said in his submission that the prescripts were

very limited or non-existing, the applicant managed to show that they

were available.

[41] To this Court’s dismay, the third respondent claims that at that time

the team of experts who were assisting him were already appointed.

In his affidavit he talks about the fact that he consulted with them and

had a meeting with them prior to making an offer. The problem with

this averment is that no date was provided for this meeting. This

problem is exacerbated by the fact that from his affidavit and the

papers that he attached, we were not supplied with a date when the

purported Emergency Bid Adjudication Committee was elected and

appointed. We are only told about their Inaugural meeting which took

place on 4 of November 2014. But this Inaugural date is almost three

weeks after the contract was offered to the first respondent and the

guarding services already commenced, and worse, after the SLA was

already signed on 29 October 2014. A cherry on top is that the

purported copy of the minutes of the said Inaugural meeting is

attached to the papers before Court, but not even a single member of

this Committee, including the third respondent himself, signed same.

No reasons were proffered for all this anomalies. What is furthermore

27

noticeably and strikingly absent is a single confirmatory affidavit from

all these experts, to confirm what was said by the third respondent.

[42] The third respondent claims that he acted with full support and

authorization of the team but they are noticeably silent on this

important aspect. One wonders whether the third respondent did not

make them aware of all these series of cases that are against him.

The only time their signature appears is in the SLA but as indicated, it

was done long after the contract was concluded, in most probabilities,

as an effort to ratify what was already done illegally.

[43] I can do no better than quote paragraph 43 of the judgment of the Full

Court of this Division in the Moto-Tech judgment already quoted

above to emphasize that the third respondent did not have any power

to unilaterally take decisions or conclude contracts.

“[43] I share the sentiments raised by the Constitutional Court that the

dire situation necessitated emergency measures to be applied

by the Administrator in order for the Municipality to fulfil its

Constitutional mandate. However, the conduct of Mr Nair was

vitiated by the lack of transparency and accountability. He

assumed the responsibilities of the accounting officers and

usurped their powers and unilaterally concluded the service

level contract worth millions of rands (R2, 500 000-00) with

Moto-Tech. He is the only signatory to the written contract on

behalf of the Municipality. An interpretation that suggests that Mr

Nair had the sole authority to contract with service providers

without any checks and balances would be contrary to the rule

of law and the principles of legality and thus ultra vires and not

in accordance with his terms of reference.”

28

[44] I fully agree with the third respondent that it would have been futile for

the Administrator (himself) acting in the stead of the non-functioning

Accounting Officer, Mr Mojaki, to report the situation to himself,

although it is clear that he did same, as he appointed the first

respondent, informed them of his decision even before he appointed

the emergency Bid Adjudication Committee as alluded above. This

flies against what he said in his affidavit that approximately 40

employees were co-operative during this era. Furthermore, we are not

told that the Manager Supply Chain Management was approached

and he refused to co-operate too before the offer was made. Even

though there was an emergency situation that persisted, Section

139(1)(c) of the Constitution is not a license to anarchy.

[45] The other problem worth mentioning is that the purported Emergency

Bid Adjudication Committee appointment also fell outside the lawful

recognized structures of the applicant as found by Gura J in his

judgment.

[46] A further anomaly is that the first respondent was appointed while

Tshireletso was still offering security services on behalf of the

applicant. It was only on 25 November, long after the SLA was

allegedly concluded that, as an afterthought, an advice and

justification was sought from Mr Mekoa who was at all the times

available and overlooked, about Regulation 36. The last nail to the

coffin of the first respondent’s case in as far as the anomalies are

concerned, is the fact that the sequence of event reveals that the SLA

was concluded on the 29 October 2014, and a letter that officially

appointed the first respondent was dispatched by the third respondent

to the Director of the first respondent on 4 November 2014. It simply

29

cannot escapes one’s mind as to how a SLA could be signed on 29

October 2014,a date prior to the appointment of the service provider,

because the first respondent was appointed only on 4 November

2014. There is no plausible explanation for these glaring irregularities

coming from the first and/or third respondents.

[47] In our proceedings, apart from the fact that evidence or facts justifying

deviation from invoking the provisions of the prescripts of the applicant

in the case of procuring services in an emergency situation were not

recorded in writing by the third respondent as required, there was also

no motivation at all, from an authorized official of the applicant, let

alone the third respondent himself, justifying any form of deviation at

the time the tender was awarded. The relevant authorities and

structures were simply ignored and not engaged throughout the

unlawful process that led to the appointment of the first respondent.

[48] The duration of the contract instead of salvaging the case of the first

respondent added woes to it. I fully agree with the sentiments by

Gura J in his judgment already quoted above that a contract entered

into for emergency situation must address the emergency situation

now and not in the not distant future.

[49] In distinguishing the cases of this Division relied upon by the applicant

the respondent’s Counsel submitted that:-

49.1 In the matter between the Ngaka Modiri Molema District

Municipality as appellant, Moto-Tech (Pty) Ltd as first

respondent and Mr Nair NO as second respondent, a full

bench of the above this Court already quoted above, dealt

30

with another appointment made by the administrator, namely

Moto-Tech as a service provider to repair water and

sanitation infrastructure of the applicant. This appointment

was made on 10 October 2014. It speaks for itself that this

judgment thus relates to a comparable situation, because

Naphtronics was appointed inter alia to provide security for

this contractor and to guard the installations where this

contractor would render services in order to make service

delivery possible. The Court held that there was no reason

for the Administrator to bypass the Municipal Manager. He

submitted that it seems as if the Court was misled by the

Municipality to believe that the Municipal Manager was

willing and able to perform his functions – as also alleged in

this matter by the applicant. According to him that is

incorrect. This distinguishes the two matters but there are

other important differences as well;

49.2 It seems that the suspension of the Municipal Manager

pending his disciplinary hearing and charges of gross

insubordination and corruption was not brought to the

attention of the Court. The Court was apparently also not

made aware of the hostility of the senior officials of the

Municipality and was left under the impression that the

various Bid Adjudication Committees remained in place,

were fully functional and were above suspicion of being part

of the corruption of the past that brought the applicant to its

knees;

49.3 In paragraph 41 of their judgment the Full Court emphasizes

31

that regulation 36 specifically provides that the Municipal

Manager may invoke this regulation and that sub regulation

8 prohibits the delegation of this power by the Municipal

Manager. We submit that that is not applicable where the

Municipal Manager was hostile, had to be suspended, and

was in fact suspended on 10 October 2014. Clearly in such

case the Administrator would step into the shoes of the

Municipal Manager, until one is appointed again – which

happened during December 2014, when Mr Nair was

appointed as Acting Municipal Manager. Obviously if the

Court was aware that the Municipal Manager was

suspended the judgment would have been totally different on

this issue;

49.4 In this matter, on the evidence before Court that cannot be

doubted, it is clear that the Administrator did not act

unilaterally. The above differences already distinguish the

facts of the present matter from the facts upon which the full

Court decided the Moto-Tech matter;

49.5 In the result, furthermore, in this instance Mr Nair made it

abundantly clear that he involved the advisory team

appointed by the Provincial Government, throughout in the

decision making also in regard to the appointment of the first

respondent. The applicant elected not to refute this in the

replying affidavit. In the result, the facts in this matter are

totally different from the facts upon which judgment of the full

Court is based;

32

49.6 Gura J points out that the contract in that matter was not a

formal written contract. In this matter that is totally different.

Gura J was not prepared to accept that an emergency can

justify a contract that is entered into for three years. We

submit, with respect, that Gura J, on the available facts in

that matter was perfectly correct in taking that stance.

However in our matter the situation is different. There is

evidence before court that a good reason existed why that

contract had to be for a long time.

[50] I fully agree with the applicant’s Counsel that this Court has already

pronounced on the conduct of third respondent and on similar

contracts, and further that, although the facts are not exactly the

same, the analysis of the issues in those judgments and the legal

principles involved cannot be distinguished from our matter.

[51] One thread that certainly cuts across all these judgments is to the

effect that “to bring itself within the aforementioned section the Third

Respondent will have to demonstrate, and not just merely allege, that it was

impractical for it to invite competitive bids. On the supposition that the

foregoing could be done then, and only then, would the Administrator

(Third Respondent) be justified to deviate from the regular process: but in

such a case the reasons for the deviation must be recorded and approved

by the accounting officer or accounting authority of the Applicant,

constitutional institution, or public entity.” It is worth mentioning that

the Administrator talked about in those judgments is the same Mr

Nair, the third respondent in this matter and furthermore the

judgments dealt with the same period when the emergency situation

persisted.

33

[52] The following paragraph from the judgment of the Full Court

demonstrates this:-

“[39] The duty of the administrator was to put systems in place which

would enhance the performance of the accounting officers, and

the Municipality in general. This, Mr Nair had to do by utilising

the services of the Municipal Manager and all other relevant

officers. I have alluded to the fact that the Municipal Council has

the power to appoint a Municipal or Acting Municipal Manager. It

may also be assumed that this power was delegated to Mr Nair

as Administrator, as it appears in clause 1 and 2 of his letter of

appointment that he was to: “(1) Manage the overall

administration of the municipality; (2) Stabilise and improve

governance and administration within the Municipality (Council

and administration)”. I pause here to observe that on 4 June

2015, when Ms Nono Dince was appointed administrator of the

Municipality in terms of Section 139(1)(b), she appointed an

acting Municipal Manager and an Acting Chief Financial Officer.”

[My Emphasis]

[53] The circumstances leading to the agreement concluded between the

first and third respondents are not different from those already

pronounced upon by the various judgments of this Division referred

above, even though in our matter they were reformulated with the aim

of trying to get another bite of the same cherry. The reformulated

facts and those that are alleged to have not been disclosed to the

previous Courts in this Division are in my view insignificant, and

cannot even begin to warrant a different conclusion in this matter.

Equally so, the contract concluded between the first respondent and

the third respondent will as a matter of fact and premised on the sound

legal principle as enunciated in the various judgments of the

34

Constitutional Court, the Supreme Court of Appeal, including the three

judgments of this Division referred to above, is bound to be reviewed

and set aside.

[54] In this judgment, the following issues were not dealt with because they

were overtaken by events that took place before the hearing of this

matter:-

• Part A of this application

• Issue of Authority

• Issue of Pende Lite

• Counter-claim by the first respondent

35

JUST AND EQUITABLE REMEDY

[55] The first respondent contends that in the event this Court upholds any

ground of review, the question of an appropriate, just and equitable

remedy arises. Advocate Van der Merwe SC urged this Court to

exercise its remedial discretion and order the applicant to pay for the

services the first respondent allegedly rendered. He submitted further

that in this instance it cannot be disputed that the services that were

rendered were required by the applicant. In expanding on this

submission he argued that the officers of the applicant continued to

use the services of the first respondent even after the departure of the

third respondent and could not timeously review this contract.

[56] He mentioned the fact that it should be taken into account that

there was no way in which the first respondent could have known

that the contract was invalid because the first respondent

throughout dealt with the third respondent and a team appointed

by the North West Government to replace the Municipal

Management that was believed to have been corrupt. The first

respondent was only aware of the requirement that a newly

appointed Bid Adjudication Committee had to approve of the

contract before it would become unconditional and thus binding on

the applicant. There was thus no reason for the first respondent to

doubt the validity of the contract.

[57] He maintained further that, it appears that a large number of

employees who duly rendered services to the applicant via the first

respondent, but were not paid, are still suffering severe prejudice,

36

and that can only be alleviated by ordering the applicant to pay for

the services rendered.

[58] He submitted further that under these circumstances this is a case

where a just and equitable order is called for. He referred the

Court to the matter of Bengwenyama Minerals (Pty) Ltd and

others v Genorah Resources (Pty) Ltd and others 2011 (4) SA

113 (CC) where the following appears:

“[84] The discretionary choice may not precede the finding of

invalidity. The discipline of this approach will enable courts to

consider whether relief which does not give full effect to the

finding of invalidity is justified in the particular circumstances

of the case before it. Normally this would arise in the context

of …prejudice if the administrative action is set aside.”

He also indicated that the following cases can also be referred to

also: Allpay Consolidated Investment Holdings and Others v

Chief Executive Officer of the South African Social Security

Agency and Others 2014 (1) SA 604 (CC) at par 22 and 96; and

Allpay Consolidated Investment v CEO, SA Social Security

Agency, 2014 (4) SA 179 (CC) at par 29 to 33. See also:

Merafong City v Anglogold Ashanti Ltd 2017 (2) SA 241 at

paragraphs 33 to 37 and 80.

[59] According to him there is in this instance no reason advanced by

the applicant why the first respondent should not be compensated

for the services rendered to the applicant in good faith and under

promise of payment from many Senior representatives of the

applicant. He submitted that the applicant should not be allowed

37

to benefit at the costs of the first respondent and its employees

from its own failure to act correctly (if indeed it acted incorrectly,

which is by no means conceded). He urged the Court to take into

consideration that the applicant already in January 2015 was made

acutely aware of the situation and it was suggested by one of its

employees that a just solution could be to allow the services to be

rendered on a month to month basis.

[60] He urged this Court to order the applicant to pay, with a proviso

that the liquidator should first come and report as to whether the

first respondent made a profit or not. He however submitted that

prima-facie it does not look like the first respondent benefited from

the contract.

[61] Lastly, he reiterated the fact that all the facts which the applicant relied

on in this matter to substantiate the setting aside of the contract were

in fact within the third respondent, who was acting in the interest of or

on behalf of the applicant. Consequently, the first respondent was an

innocent contracting party, who cannot be held responsible if there

was no internal compliance as the applicant claims.

[62] In the case of Municipal Manager: Qaukeni Local Municipality

and Another v FV General Tracing CC 2010 (1) SA 356 (SCA), it

was held that the failure to implement a supply chain management

policy does not mean that a Municipality contracting with an external

supplier is therefore relieved of the obligation to act transparently

and to follow a fair, competitive and cost-effective bidding process

(paragraph [13] at 361 E-F). To the contrary: a failure to comply with

these precepts renders the contract invalid and open to nullification

38

by a Court, no matter the consequential harm suffered by the

external supplier (paragraph [14] and [16] at 361 F-H and 362 G). The

Municipality may not submit to an unlawful contract and must resist

the contractor's attempt to implement it. If the contractor applies for

an order enforcing performance of the contract, the Municipality may

ask for a declaration of unlawfulness by way of counter-application,

and need not proceed by way of an application for formal review

paragraph [26 at 365 F-H) [quote from the summary of the case].

[63] In Eastern Cape Provincial Government v Contractprops 25

(Pty) Ltd 2001 (4) SA 142 (SCA) at page 147 the Court held that:-

“[8] As to the mischief which the Act seeks to prevent, that too seems plain

enough. It is to eliminate patronage or worse in the awarding of

contracts, to provide members of the public with opportunities to tender

to fulfil provincial needs, and to ensure the fair, impartial, and

independent exercise of the power to award provincial contracts. If

contracts were permitted to be concluded without any reference to the

tender board without any resultant sanction of invalidity, the very

mischief which the Act seeks to combat could be perpetuated.

[9] As to the consequences of visiting such a transaction with invalidity,

they will not always be harsh and the potential countervailing

harshness of holding the province to a contract which burdens the

taxpayer to an extent which could have been avoided if the tender

board had not been ignored, cannot be disregarded. In short, the

consequences of visiting invalidity upon non-compliance are not so

uniformly and one-sidedly harsh that the legislature cannot be

supposed to have intended invalidity to be the consequence. What is

certain is that the consequence cannot vary from case to case. Such

transactions are either all invalid or all valid. Their validity cannot

39

depend upon whether or not harshness is discernible in the particular

case.”

[64] In Esorfranki Pipelines (Pty) Ltd and Another v Mopani District

Municipality and Others [2014] 2 All SA 493 (SCA) matter, the

Supreme Court of Appeal found as follows:

“[22] The decision of the high court to give effect to a contract

concluded pursuant to an unlawful tender award is flawed for

several reasons. First, the parties to that contract had acted

dishonestly and unscrupulously and the joint venture was not

qualified to execute the contract. The first order that the high

court made – that the award was unlawful – was undermined by

the order that the joint venture continue the work. The second

reason is that it was premised on the possible existence of a

number of unknown consequences which might follow upon an

order declaring the award of the tender unlawful. A decision

made in the exercise of the discretion in s 8 of PAJA must be

based on fact and not on mere speculation. The delay in the

finalization of the review proceedings brought about a change

in the factual position and it was the function of the court to

ensure that it be placed in a position to arrive at an informed

decision with regard to what an appropriate remedy would be.

This could and should have been addressed by an appropriately

worded order.” [Emphasis Added]

[65] In Bengwenyama Minerals (Pty) Limited and Others v Genorah

Resources (Pty) Limited and Others 2011 (4) SA 113 (CC) the

Constitutional Court in determining an appropriate remedy as envisaged

in section 172 of the Constitution held that:-

“[84] It would be conducive to clarity, when making the choice of a just and

equitable remedy in terms of PAJA, to emphasise the fundamental

constitutional importance of the principle of legality, which requires

40

invalid administrative action to be declared unlawful. This would

make it clear that the discretionary choice of a further just and

equitable remedy follows upon that fundamental finding. The

discretionary choice may not precede the finding of invalidity. The

discipline of this approach will enable courts to consider whether

relief which does not give full effect to the finding of invalidity, is

justified in the particular circumstances of the case before it. Normally

this would arise in the context of third parties having altered their

position on the basis that the administrative action was valid and

would suffer prejudice if the administrative action is set aside, but

even then the 'desirability of certainty' needs to be justified against

the fundamental importance of the principle of legality.”

[66] Taking into consideration all the authorities quoted in the preceding

paragraphs, the fact that there is no longer a contract that is existing

between the parties at the moment because of effluxion of time,

including the fact that at the time this contract was illegally concluded

there was an existing security contract which was still in operation, I

fully agree with Advocate Mokoena SC that there is no need to make

an Order as suggested by the first respondent’s Counsel. To make

such an Order will be undermining the conclusion that I reached

above.

[67] In addition, the circumstances of this matter are entirely different from

the one the Constitutional Court was dealing with in the case relied

upon by the respondent of Allpay Consolidated Investment

Holdings (Pty) Ltd and Others v CEO of SASSA and Others 2014

(1) SA 604 (CC). In Allplay the interest of the elderlies in the whole

Country was at stake and the Court were moved to exercise their

remedial discretion. Setting aside the decision in casu will not have

41

adverse effect to a large number of members of a public.

Furthermore, the interest of an innocent third party as was advanced

by Counsel for the first respondent regarding the profit or benefit

accrued are largely in the domain of the arbitration which the first

respondent had already embarked upon.

[68] There is therefore no grounds that exist for this Court to exercise its

discretion in the manner proposed by the first respondent after having

found the decision to be reviewable.

ORDER

[69] Therefore the following order is made:-

69.1 It is hereby declared that the decision of the third respondent

and the procedures followed to appoint the first respondent for

the provision of a 24 hour security services at all bulk water

reservoir, sanitation facilities (WWTP) and all water

infrastructure facilities, under contract number NMMDM:

14/15/38 TS, for a period of three (3) years, are unlawful;

69.2 It is further declared that the Service Level Agreement, dated 29

October 2014, purportedly concluded between the applicant,

represented by the third respondent (in his capacity as the

Administrator) and the first respondent is invalid, null and void ab

initio and are hereby reviewed and set aside;

69.3 The decision of the third respondent to appoint the first

respondent is reviewed and set aside;

42

69.4 The first respondent is ordered to pay costs including costs

occasioned by the employment of a Senior Counsel where

applicable, and those costs previously reserved if any.

________________

A.M. KGOELE

JUDGE OF THE HIGH COURT

ATTORNEYS

FOR APPLICANT : Motshabi & Modiboa Attorneys

No. 12 Havenga Street

Golf View

MAHIKENG

2745

FOR RESPONDENT : Koster Attorneys

C/O Nienaber & Wissing Attorneys

10 Tillard Street

MAHIKENG

2745