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REPUBLIC OF NAMIBIA

NOT REPORTABLE

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

Case no:HC-MD-CIV-MOT-GEN-2020/00321

In the matter between:

PIS SECURITY SERVICES CCAPPLICANT

and

CHAIRPERSON OF THE CENTRAL 1st RESPONDENT

PROCUREMENT BOARD OF NAMIBIA

THE CENTRAL PROCUREMENT BOARD2nd RESPONDENT

THE REVIEW PANEL3rd RESPONDENT

NAMIBIA UNIVERSITY OF SCIENCE AND 4th RESPONDENT

TECHNOLOGY

NAMIBIA PROTECTION SERVICES (PTY) LTD 5th RESPONDENT

Neutral citation:PIS Security Services CC v Chairperson of the Central Procurement Board of Namibia (HC-MD-CIV-MOT-GEN-2020/00321) [2021] NAHCMD 1 (18 January 2021)

Coram:SCHIMMING-CHASE, AJ

Heard:26 October 2020

Order Made:17 November 2020

Reasons:18 January 2021

Flynote:Practice - Applications and motions – Urgency - Requirements for - Urgent application to set aside an ultra vires decision of the Review Panel established in terms of the Procurement Act, 15 of 2015. Basis for review was that the Review Panel’s decision was ultra vires section 60(c) of the Act. Explanation of facts giving rise to urgent relief sought satisfactory in the circumstances.

Practice — Applications and motions — Doctrine of 'unclean hands' — When applicable — applicant admitting non-compliance with the provisions of the Labour Act, 11 of 2007 (relating to minimum wage) in respect of a contract with one of 60 entities to which applicant provided security services as part of its business. However, no evidence of dishonesty, fraud or mala fides — Not appropriate to apply doctrine of 'unclean hands' in such circumstances.

Administrative Law - Review Application to review and set aside administrative decision- such decision ultra vires the Procurement Act.

Statute — Interpretation — Procurement Act, 15 of 2015, sections 47 and 55(4) — Interpretation should take scope and purpose of Act into account — Word 'must' directory and permissive, requiring substantial compliance only and not peremptory — approach that a peremptory enactment must be obeyed exactly and that it is sufficient if a directory enactment is obeyed or fulfilled substantially rigid and inflexible.

Summary:A bid for the procurement of security services for the fourth respondent was formally advertised by the Central Procurement Board as the cost estimate was above the applicable threshold. The Board conducted the bidding on the fourth respondent’s behalf in terms of the Procurement Act. The applicant was awarded the bid for the provision of security services. The Board issued a notice of selection of award in terms of section 55(4) of the Act. The notice of selection of award was signed by the Chairman of the Procurement Board, as its accounting officer. It provided inter alia, that dissatisfied bidders could apply for a review of the selection to the Procurement Board within the standstill period, failing which the Board would award the contract to the person selected.

The fifth respondent and another unsuccessful bidder applied for a review of the applicant’s selection. The fifth respondent’s review was filed outside the standstill period. After considering the review, the Central Procurement Board resolved to award the bid to the applicant and issued a notice of award in terms of section 55(5). The fifth respondent applied for a review of this decision to the Review Panel in terms of section 59 of the Act. After a hearing, the Review Panel set aside the decision of the Board. The applicant then launched an urgent application to review inter alia, the decision of the Review Panel to set aside the Procurement Board’s decision, for want of compliance with section 60(c) of the Act which provides that the Review Panel can set aside a decision of the Procurement Board, other than a decision or action bringing the procurement contract into force. It was contended in this regard that the notice of award gave rise to a procurement contract.

The fifth respondent launched a conditional application, to the effect that, in the event that the Review Panel’s decision is set aside, that the entire bid be referred back to the procurement Board to consider de novo. The basis for the counter application was that the bid was non-compliant with the provisions of section 47 of the Act (the advertisement period was 29 days instead of 30 days), and non-compliant with section 55 of the Act (the definition in the Act of accounting officer refers to the accounting officer of a public entity, and not the first respondent) resulting in the notice being a nullity.

Held The applicant satisfactorily explained the reasons why the application was urgent. The degree of urgency and all steps, including the dates of the steps taken (which included requesting reasons by the Review Panel which were not provided, consultations with counsel, provision of instructions, drafting, finalisation and filing of the application and time given for considered opposition). The nature of the Review Panel’s decision also taken into consideration. Non-compliance with Rule 73(3) condoned in the particular circumstances.

Held Following the decision in Central Procurement Board v Nangolo NO (HC-MD-CIV-MOT-REV-2017/00441) (9 November 2018) that the Review Panel may not set aside a decision or an order that brings a procurement contract or the framework agreement into force.

Held The provisions contained in sections 47 and 55 directory in the circumstances. In any event, there was substantial compliance with the legislation. Failure to strictly comply with the provision did not result in a nullity in the circumstances. The Bid was advertised and awarded by the Central Procurement Board in line with its legislative objectives. Counter application dismissed.

ORDER

1. The applicant's non-compliance with the requirements relating to forms and service is condoned, and this matter is heard as one of urgency as contemplated in the Rule 73(3) of the Rules.

2. The decision of the third respondent (“the Review Panel”) dated 10 August 2020 in respect of Bid No NCS/ONB/CPBN/01/201 is hereby set aside.

3. The second and fifth respondents[footnoteRef:1] are ordered to pay the applicant’s costs jointly and severally, the one paying the other to be absolved, such costs to include the costs of one instructing and one instructed legal practitioner. [1: The order is mero moto is corrected to reflect that only the second respondent and not the first respondent (as representative of the second respondent) is liable for costs as ordered. ]

4. The costs in paragraph 3 of this order are to be apportioned as follows: one third of the costs are to be paid by the second respondent. Two thirds of the costs are to be paid by the fifth respondent.

5. The fifth respondent’s conditional counterapplication is dismissed with costs, such costs to include the costs of one instructing and one instructed legal practitioner.

6. The matter is regarded as finalised and is removed from the roll.

REASONS

SCHIMMING-CHASE, AJ

Below are the reasons for the order made on 17 November 2020.

Introduction

The applicant in this matter (on an urgent basis) seeks final relief, namely an order that the decision taken by the third respondent on 10 August 2020 in respect of Bid No NCS/ONB/CPBN/01/2019 is reviewed and set aside.

The parties

The applicant is PIS Security Services CC (“PIS”), a close corporation duly established as such in terms of the applicable close corporation laws of the Republic of Namibia. As its main business, PIS provides security services to various entities, and was selected as the successful bidder (in Bid No NCS/ONB/CPBN/01/2019) to provide those services to the fourth respondent on 19 December 2019 and later on 21 July 2020 by the second respondent.

The first respondent is the Chairperson of the Central Procurement Board of Namibia (“the Chairperson”), a juristic person established in terms of the provisions of sections 8 and 9 of the Public Procurement Act, 15 of 2015 (“the Act”).

The second respondent is the Central Procurement Board (“the Board”), a juristic person established in terms of the provisions of section 8 of the Act.

The third respondent is the Review Panel a juristic person established in terms of the provisions of section 58 of the Act.

The fourth respondent is the Namibia University of Science and Technology (“NUST”), a juristic person and tertiary institution established in terms of the provisions of section 2 of the Namibia University of Science and Technology Act, 7 of 2015. NUST was cited for the interest it has in the relief sought. No relief was sought against it and it abides the decision of the court.

The fifth respondent is Namibia Protection Services (Pty) Ltd (“NPS”), a private company with limited liability duly registered and incorporated in accordance with the applicable company laws of the Republic of Namibia. NPS previously and at all material times provided security services to NUST. It was one of the unsuccessful bidders in the bid under consideration. NPS continued to provide those services to NUST by separate contract until September 2020, and extended from time to time, pending finalisation of these proceedings.

Mr Chibwana appears for PIS. Mr Ncube of the Government Attorney appears for the Board and its Chairperson. The Review Panel initially opposed the matter through the Government Attorney. Given the position taken by the Board, the Review Panel could no longer be represented by the Government Attorney. Despite this, the Review Panel has made no effort to oppose this matter through different attorneys, or to file answering papers. Mr Luvindao, holding a watching brief, appears for NUST. Mr Heathcote SC, assisted by Mr Jacobs, appears for NPS.

Background

This matter concerns a bid for the procurement of security services for NUST. As the cost estimate was above the applicable threshold, the Board conducted the bidding on NUST’s behalf in terms of the Act. The bid was advertised on 5 August 2019 and closed on 3 September 2019. The bids were opened on 3 September 2019. PIS and NPS (the fifth respondent, who previously provided these services to NUST) participated in the bidding process together with other entities for the provision of the security services to NUST.

Subsequent to the evaluation of the bids and on 4 December 2019, the Board issued a Notice for Selection of Procurement Award (“the Notice”). The Notice was issued under signature of the Chairperson of the Procurement Board. It informed[footnoteRef:2] that PIS was the successful bidder for the provision of security services in terms of section 55 of the Act read with Regulation 38(1) of the Public Procurement Regulations. [2: In Part A of the Notice of Motion. ]

In part B of the Notice, unsuccessful bidders were informed that

‘…if you are not satisfied with the selection for the award made by the Central procurement Board of Namibia (CPBN) you may make an application for the review of the selection within seven (7) days of this notice and in the absence of an application for review the Accounting Officer of CPBN will award the contract to the person (s) selected for the award.’

The 7 day period (referred to as “the standstill period”) was formally expressed in the Notice to run from 11 December 2019 to 17 December 2019.

Following issue of the Notice, one of the unsuccessful bidders, Shilimela Security and Debt Collection CC (“Shilimela Security”) and NPS applied for a review of the selection with the Board. It is common cause that Shilimela Security applied for review within the 7 day stand-still period, whilst the application of NPS was made outside the stand-still period prescribed by the Notice. Both unsuccessful bidders requested the Board to reconsider the selection of PIS as the preferred bidder.[footnoteRef:3] [3: In terms of Regulation 38(2)(c).]

During its meeting of 23 January 2020, the Board considered and declined both applications of Shilimela Security and NPS. The decision was transmitted to the affected bidders on 15 July 2020.

Following this decision and on 21 July 2020, the Board issued a “Notice of Award” (again under signature by the Chair) in terms of section 55(5) of the Act read with Regulation 39(1). In the terms of this Notice, bidders had a further 7 days (from 23 July 2020 to 29 July 2020) to approach the Review Panel,[footnoteRef:4] if they were still aggrieved with the decision of the Board. [4: In terms of section 59 of the Act.]

After receipt of the Notice of Award, NPS approached the Review Panel in terms of section 59 of the Act. The Review Panel then heard the matter on 10 August 2020 and made the following decision:

‘The Board failed to comply with Regulation 35 of the Regulations, in that the deadline for the bids to close was 29 days instead of the mandatory 30 days from the publication of the invitation to bid.

Non-compliance with section 52 of the Act – the Board used an evaluation criteria and methodology that was not set out in the bidding document. The evaluation of the bids was not completed in accordance with the criteria set out in the bidding document.’

The Review Panel made an order that in accordance with section 60(f) of the Act, the procurement proceedings be terminated and start afresh.

PIS then requested the Review Panel for the reasons for its decision, but such reasons were not forthcoming.

Aggrieved by the decision, PIS launched this urgent application in terms of which it amongst other orders, sought an order:

‘2.That the decision by the third respondent dated 10 August 2020 in respect of Bid No. NCS/ONB/CPBN/01/2019 be and is hereby reviewed and set aside and is declared null and void and of no force and effect.

3.That the decision by the first and second respondent dated 21 July 2020 in respect of Bid No. NCS/ONB/CPBN/01/2019 be and is hereby reviewed and corrected; by the removal and deletion of paragraphs 3 and 4 of the Notice of Procurement Award.

4.That it is hereby declared that regulation 38 (3) of the Public Procurement Regulations is ultra-vires sections 58 (1) (b) (i), 59 and 79 (1) (a) of the Public Procurement Act 15 of 2015 and is null and void and of no force and effect.’

Notwithstanding the orders initially sought in the notice of motion, the applicant did not pursue all at the hearing, and restricted its relief on the merits to an order that the decision taken by the Review Panel in respect of Bid No NCS/ONB/CPBN/01/2019 be reviewed and set-aside and declared null and void and of no force (paragraph 2 of the notice of motion).

The application is opposed by the Board (through the Chairman) and by NPS.

Initially the Review Panel was also represented by the Government Attorney, however in view of the stance taken by the Board, separate representation became necessary.

The Review Panel, disappointingly, did not file answering papers. The court did not have the benefit of a considered, or any response at all by the Review Panel on the various allegations made on the papers, especially those delivered by PIS and NPS.[footnoteRef:5] In addition, it is also common cause that the Review Panel failed to provide any reasons for the decision sought to be set aside in spite of being requested to do so. This conduct is to be frowned upon, given the important statutory functions and obligations placed on the Review Panel. [5: Similar dissatisfaction was expressed by Masuku J in Central Procurement Board v Nangolo NO (HC-MD-CIV-MOT-REV-2017/00441) [2018] NAHCMD 357 (9 November 2018) at par [8 and [16].]

NPS based its opposition on a number of grounds, namely:

the applicant came to court with unclean hands;

the application is not urgent;

the relief sought is incompetent;

fatal non-compliance with sections 47 and 55(5) of the Act.

In addition, NPS sought an order via provisional counter application that in the event that the decision reached by the Review Panel is set aside, that the entire procurement proceedings be declared null and void and set aside (for want of compliance with sections 47 and 55(4) of the Act) and should start afresh.

The Board mainly took the point of urgency, alleging that same was self-created.

NPS also initially took the point of non-joinder. In this regard, the court on 2 October 2020 granted an order joining the sixth to twenty third respondents to the application. The court also ordered that these respondents deliver answering papers (should they wish) by 9 October 2020, and the matter was postponed to 14 October 2020 for hearing. However, on this date, it came to light that the joined respondents did not have judicial notice of the hearing as the court order of 2 October 2020 was not served on them. The matter was postponed again, with PIS bearing the wasted costs of the day to 26 October 2020. None of the joined respondents opposed the application.

The points raised are dealt with below.

Unclean hands

This point was raised up front by NPS, with the submission that PIS’s “unclean hands” precluded it from seeking any form of relief before this court. (emphasis supplied)

The complaint of unclean hands stems from NPS’s allegation that PIS breaches labour laws, most importantly, that it does not pay minimum wage to some of its employees. This issue was also raised at the proceedings in front of the Review Panel. It was submitted (by NPS) that this information was not disclosed during the bidding process. PIS accordingly misrepresented its compliance with labour laws in its bidding documents and should not have been awarded the Bid. In support of the submission, reliance was also placed on statements attributed to Mr Hangula on behalf of PIS at the Review Panel hearing where he stated that PIS pays its guards N$7 per hour.

In this regard it was submitted that PIS was dishonest, and therefore the court should not come to its assistance.

PIS denies this allegation and submits that the statements made by Mr Hangula at the Review Panel hearing[footnoteRef:6] were taken entirely out of context. In this regard it was submitted that Mr Hangula sought to explain that the issue of the minimum wage calculation, was in relation to one of the sites where PIS provides security services by agreement, namely the Anti-Corruption Commission. Mr Hangula also stated that the situation was of a temporary nature, related to only one out of the 60 clients it services, and further that in that one instance with the Anti-Corruption Commision, it engaged its employees on the issue and covered costs such as transport and uniforms so as to cover the difference. [6: As transcribed by Jacobus Visser Junior.]

It was further stated that by way of its tender bid, PIS made an undertaking in terms of sections 138(2) and 138(3) of the Labour Act (which undertaking PIS stands by) which formed part of the evaluation criteria and pointed out that NPS did not attach a copy of its (PIS’s) bid to establish dishonesty or fraud.

The Supreme Court in Shaanika and Others v The Windhoek City Police and Others[footnoteRef:7] restated the principles relating to the doctrine of unclean hands, and pointed out that the doctrine has found application mainly in the field of unlawful competition law where its effect is that an applicant is prevented from obtaining relief where he or she has behaved dishonestly. [7: Shaanika and Others v The Windhoek City Police and Others 2013 (4) NR 1105 (HC).]

The doctrine is applied in instances where the litigant has therefore acted dishonestly or fraudulently and not merely unlawfully.[footnoteRef:8] [8: Shaanika supra at par [27] and [30]; See also Minister of Mines and Energy v Black Range Mining (Pty) Ltd 2011 (1) NR 31 (SC) at par [46] and [50].]

On the facts presented the court is not convinced that PIS acted dishonestly. It appears from the record, from the statements attributed to Mr Hangula for the applicant, that he did not deny that the effect of the agreement with the Anti-Corruption Commission, renders the applicant wanting in relation to minimum wage. This would bring about an unlawful result, which Mr Hangula said was temporary. It is also not disputed that undertakings were made in terms of sections 138(2) and 138(3) of the Labour Act, or that out of the sixty companies the applicant services, the issue, as explained, related to one company based on the contract concluded with that company.

In light of the foregoing it is found that the doctrine of unclean hands does not apply in this instance.

Urgency

Both respondents opposing took the point of urgency, submitting that the urgency was self-created.

In support of its opposition, the Board, represented by its Chair, averred that the decision of the Review Panel was made on 10 August 2020. From the date that PIS received the decision, namely 24 August 2020, 11 days transpired after the decision sought to be impugned was arrived at.

It was pointed out further that the matter was set down for hearing on 21 September 2020, which was 31 days after the decision was made. It was also argued that PIS failed to articulate reasons why it claimed it could not be afforded substantial redress at a hearing in due course.

The Board and NPS also raised the issue of delays encountered as a result of the failure to initially join all the bidders. This resulted in an application for joinder. However, PIS’s legal representatives failure to serve the order, resulting in the application being heard on 26 October 2010.

NPS argued that upon PIS being selected as the successful tenderer on 21 July 2020, it then and there obtained the right to do the bidding works, and be paid. Thus, so it was argued, PIS’s right to enforce its selection arose on 21 July 2020, and it followed that PIS impermissibly delayed in bringing this application for a month and a half.

It is PIS’s case for urgency is that it only received the Review Panel’s decision on 24 August 2020. Specifically it was averred by Mr S Hangula (on behalf of PIS) that no decision was handed down on 10 August 2020 by the Review Panel, at which he was present.

PIS stated that on Friday, 21 August 2020 it became aware of an order made by the Review Panel circulating through the rumour mill.

On Monday, 24 August 2020, the applicant’s Mr S Hangula contacted the Review Panel to enquire whether the decision had been made. He subsequently received the decision on 24 August 2020, but was shocked to find out that the decision had been transmitted to other parties much earlier.

It would appear from the papers delivered in this matter, that the Review Panel had difficulties to contact PIS to notify it of its decision due to an inability to decipher (due to illegible handwriting) the contact details of the representative of PIS. This is not confirmed by the Review Panel as it failed to file papers in this matter, but this appears ex facie correspondence emanating from the Review Panel, the content of which is not disputed by the parties.

Also on Monday, 24 August 2020, PIS consulted with its legal practitioners. A decision was then made to engage the services of counsel to consider the matter. On instructions of counsel, PIS was advised to request reasons for the decision. The requests for reasons were made on 25 and 26 August 2020 and a response was provided by the Review Panel on Friday, 28 August 2020. It is not in dispute that no reasons were provided by the Review Panel, and it is apparent from the response that no reason would be forthcoming, the advice being to approach the High Court if PIS did not agree with the decision of the Review Panel.

On Monday, 31 August 2020, counsel was instructed to prepare the application. Drafting commenced on 1 September 2020, submitted in draft on 2 September 2020. PIS was requested to provide additional documentation and information which was provided in the late afternoon on 2 September 2020. The application was commissioned and filed on 3 September 2020.

In support of the absence of substantial redress in due course, it was alleged that the tender period runs for 3 years and that as a bidder, the applicant cannot claim damages arising from a public procurement process. PIS also submitted that it was difficult to establish the grounds necessary to claim damages emanating from a public procurement process. In addition it was submitted that a review in the normal course would not place the applicant in a position it should have been as a result of a procurement award. In this regard PIS would have to wait until it found itself in a position to retender and await the outcome of the new procurement process, in circumstances where at law and in fact, PIS should have been executing the services.

Also PIS submitted that its central complaint is that the Review Panel has acted unlawfully and beyond its powers and that it suffers as a result of unlawful and wrongful administrative action. The unlawful administrative action violated the principle of legality, justifying the invocation of Rule 73(3).

In terms of Rule 73, a court has discretion to hear an application as one of urgency. In the matter of Shetu Trading CC v The Chair of the Tender Board for Namibia and Others[footnoteRef:9] Heathcote AJ (as he then was) succinctly summarised the position as follows: [9: Shetu Trading CC v The Chair of the Tender Board for Namibia and Others (A 352/2010) 23 June 2011.]

‘It admits of no doubt that it falls within the discretion of the judge to condone non-compliance with the rules or not. In exercising that discretion, all or any of the principles enunciated in Mweb may find application; depending on the facts of the case. In turn, the principles explained in Mweb are not all-encompassing. Exercising a discretion judicially; “is by no means the same as general intuition” as “a judge who decides merely as he thinks fit without reference to existing legal rules, is to be feared more than dogs and snakes … the discretion may not be exercised according to the “whim of the judge’s own brain.’

Further in an unreported judgment of a full bench of this court[footnoteRef:10], the court set out the principles relating to the ambit of Rule 73, which are: [10: Stocks & Stocks Leisure (Namibia) (Pty) Ltd v Swakopmund Station Hotel (Pty) Ltd (HC-MD-CIV-MOT- GEN-2020/00315) [2020] NAHCMD 519 (12 November 2020) at par [15].]

failure to set out the circumstances upon which a party relies that it is an urgent matter or why he or she claims that he or she could not be afforded substantial redress at the hearing in due course may be fatal to the application and that 'mere lip service' is not enough;[footnoteRef:11] [11: See also Salt and Another v Smith 1990 NR 87 (HC) at 88 (1991 (2) SA 186 (Nm) at 187D–G).]

the fact that irreparable damages may be suffered is not enough to make out a case of urgency. Although it may be a ground for an interdict, it does not make the application urgent;

an applicant has to show good cause why the times provided for in the rules must be abridged and why the applicant cannot be afforded substantial redress at the hearing in due course;[footnoteRef:12] [12: See also IL & B Marcow Caterers (Pty) Ltd v Greatermans SA Ltd and Another; Aroma Pty Ltd v Hypermarket (Pty) Ltd and Another 1981 (4) SA 108 (C) at 110H–111A.]

in exercising its discretion, a court must keep in mind that there are varying degrees of urgency;[footnoteRef:13] [13: See also Bergmann v Commercial Bank of Namibia Ltd and Another 2001 NR 48 (HC).]

although Rule 73 allows a deviation from the prescribed procedures and time periods in urgent applications, parties and legal practitioners must, as far as practicable give effect to the objective of procedural fairness when determining the procedure to be followed in such instances to afford a respondent reasonable time to oppose the application.[footnoteRef:14] [14: See also Petroneft International and Others v The Minister of Mines and Energy and Others [2011] NAHC 125.]

Having considered the facts and submissions, the court finds that the applicant has satisfied the necessary requirements, and the non-compliance with Rule 73(3) is condoned.

PIS set out in detail the facts giving rise to launching of the urgent proceedings. The decision sought to be set aside was that of the Review Panel of 10 August 2020. The allegations of Mr Hangula on behalf of PIS, to the effect that they did not become aware of the decision until 24 August 2020 are not meaningfully disputed. Reference is also made to correspondence emanating from the Review Panel (dated 28 August 2020) that due to being unable to discern (as a result of illegible handwriting), the decision was not communicated earlier to PIS.

PIS was entitled to ask for reasons from the Review Panel, which it did on 25 August 2020. A response was received on 28 August 2020, resulting in the engagement of counsel, consultations, drafting and finalisation of founding papers with annexures, all being filed on 3 September 2020.

The court is also guided in this regard by the factors referred to in Keya v Chief of the Defence Force and Others[footnoteRef:15] as follows: [15: (SA-2009/7) [2013] NASC 2 (19 March 2013).]

‘It is now judicially accepted that an applicant for review need not rush to Court upon his cause of action arising as he is entitled to first ascertain the terms and effect of the offending decision; to ascertain the reasons for the decision if they are not self-evident; to seek legal counsel and expert advice where necessary; to endeavour to find an amicable solution if that is possible; to obtain relevant documents if he has good reason to think they exist and they are necessary to support the relief desired; consult with persons who may depose to affidavits in support of the review; and then to consult with counsel, prepare and lodge the launching papers. The list of possible preparatory steps and measures is not exhaustive; but in each case where they are undertaken they should be shown to have been necessary and reasonable. In some cases it may be required of the applicant, as part of the preparatory steps, to identify and warn potential respondents that a review application in contemplated. Failure to so warn a potential respondent may lead to an inference of unreasonable delay.’[footnoteRef:16] [16: At par [17] approved in Arandis Power v President of the Republic of Namibia 2018 (2) NR 567 (HC) at 575B-D.]

As part of the consideration in the determination of urgency in this matter, the actions of the Review Panel fall within the circumstances where unlawful administrative action also founds a basis for urgency.[footnoteRef:17] Further, the degree of urgency alleged to exist was catered for in the times set for delivery of answering and replying affidavits as well as all actions taken preceding the institution of this application. (emphasis supplied) [17: Sheehama v Inspector General Namibian Police 2006 (1) NR 106 (HC) at 108.]

Merits

Taken into consideration is the concession by the Board and Chair that the decision of the Review Panel was ultra vires section 60(c) of the Act, because the Review Panel did not have jurisdiction to set aside the decision of the Board.

The basis for this, as alleged by the Chair, is that the notice of award created a contractual relationship between the bidder and the second respondent. This was specifically set out in the bidding document which provided that:

‘The issue of a notification of award will constitute the formation of contract subject to the provisions of section 55(5), (6) and (7) of the Public Procurement Act 2015 (Act 15 of 2015) as read with Regulation 38 of the Public Procurement Regulation.’

The Board also referred the court to section 60 of the Act which deals with the powers of the Review Panel, and it was submitted that the decision of the Review Panel was ultra vires the law for want of compliance with section 60(1)(c) of the Act.

Section 60 is quoted in full:

‘Decisions of Review Panel

60. Upon receipt of the application for review referred to in section 59, the Review Panel may -

(a) dismiss the application;

(b) direct the Board or the public entity that has acted or proceeded in a manner that is not in compliance with this Act to act or proceed in a manner that is in compliance with this Act;

(c) set aside in whole or in part a decision or an action of the Board or public entity that is not in compliance with this Act, other than any decision or action bringing the procurement contract or the framework agreement into force, and refer the matter back to the Board or public entity for reconsideration with specific instructions;

(d) correct a decision or action by the Board or public entity that is not in compliance with this Act;

(e) confirm the decision of the Board or public entity; or

(f) order that the procurement proceedings be terminated and start afresh.’ (emphasis supplied)

As further submitted on behalf of the Board, the Review Panel could not set aside a decision or action that brings a contract into force. It was argued, relying on the case of Central Procurement Board v Nangolo NO[footnoteRef:18] that within the meaning of section 60(1), a contract was concluded and the Review Panel did not have the jurisdiction to cancel the tender. [18: Central Procurement Board v Nangolo NO (HC-MD-CIV-MOT-REV-2017/00441) [2018] NAHCMD 357 (9 November 2018).]

In Central Procurement Board v Nangolo NO, Masuku J held that section 60 proscribed the various orders or decisions that the Review Panel may make in terms of section 60 of the Act, and specifically that the Review Panel may not set aside a decision or an order that brings a procurement contract or the framework agreement into force.[footnoteRef:19] The court follows the decision reached in this matter. [19: At par [51].]

In light of the foregoing, and the change in tack by PIS to only seek to set aside the decision of the Review Panel, the decision in Central Procurement v Nangolo would stand. It is also necessary to reiterate the sentiments of the court regarding the failure by the Review Panel to put any papers before court, to defend its decision, or to guide the court on any relevant aspects relating to its decision. The court is left without the benefit of considered argument. Equally and if not more concerning is the failure by the Review Panel to even provide reasons for its decision, despite being expressly requested to.[footnoteRef:20] [20: See President of the Republic of Namibia and Others v Anhui Foreign Economic Construction Group Corporation Ltd and Another 2017 (2) NR 340 (SC) at par [36].]

The conditional counter application

Given the decision to set aside the decision of the Review Panel application, the court must consider the counter application, the terms of which are that the procurement proceedings in terms of the bid in question be declared null and void, and that the Board be ordered to start those proceedings afresh.

The grounds for the counter application as alleged by NPS are the following:

non-compliance with section 47 of the Act;

non-compliance with section 55(4)(a) of the Act.

Section 47 non-compliance

Section 47(1) of the Act reads as follows:

‘The Board or a public entity must set a deadline for the submission of bids, applications for pre-qualification and expressions of interest so as to allow sufficient time for the preparation and submission, with a view to maximizing competition, which may not be less than the prescribed minimum period.’ (emphasis supplied)

Regulation 35 prescribes the minimum period, which may not be “less than 30 days from the date of such invitation”.

On behalf of NPS, it was submitted that period between the publication and closing date of the bid was 29 days.

The calculation of days is to be determined in terms of the Interpretation of Laws Proclamation 37 of 1990 (because day is not referred in the Act or Regulations). In terms thereof, day(s) means calendar days “reckoned exclusively of the first and inclusively of the last day”, unless the last day falls on a Sunday or public holiday, in which case the time shall be reckoned exclusively of the first day and exclusively of every such Sunday or public holiday.

The advertisement inviting the submission of bids was placed on 5 August 2019 and the deadline for the submission of bids was 3 September 2019.

Properly calculated that is a period of 29 days.

It was submitted that in light of the foregoing, this non-compliance with the Act and Regulations is fatal and that (for that reason alone) the applicant has no prospect of succeeding on the merits in the application. In the result and without even considering the remaining issues, the application should be dismissed with costs.

In support of this contention, counsel for NPS relied on the decision of Schierhout v Minister of Justice[footnoteRef:21] where it was held that it is a fundamental principle of law that a thing done contrary to a direct prohibition of law is void and of no effect, resulting in that which has been done contrary to the prohibition, being regarded as never having been done – and that whether the law has expressly so decreed or not, the mere prohibition operates to nullify the act. [21: Schierhout v Minister of Justice 1926 AD 99 at 106-107.]

Counsel for NPS also relied on the decision of the Namibian Supreme Court in Auas Diamond Company v Minister of Mines and Energy[footnoteRef:22]. [22: Auas Diamond Company v Minister of Mines and Energy 2017 (2) NR 418 (SC) at 426D-F at par [25] and [26].]

It is noted at this stage that the principle adopted in Schierhout and approved in Auas Diamond Company specifically related to non-compliance with clearly peremptory legislative provisions (containing direct prohibitions). The court[footnoteRef:23] also stated that: [23: At par [25].]

‘[26]It appears that in the absence of an express provision within a statute, not all non-compliances with statutory provisions will necessarily invalidate such an act. It all depends on the intention of the Legislature. Where there is no express invalidation, the intention of the Legislature must be sought from the words used and the subject matter of the rule. However, in this particular case there is express invalidation and it is therefore not necessary to ascertain the intention of the Legislature from the surrounding facts or the language of the legislation.’

In this regard, the relevant provisions of the Minerals (Prospecting and Mining) Act, 33 of 1992 addressed by the Supreme Court in Auas Diamond Company were held to be peremptory and also contained express invalidation.

Counsel for PIS submitted that the provisions of section 47 read with Regulation 35 properly interpreted were not peremptory. Reliance was placed on the Supreme Court decision in Torbitt v International University of Management[footnoteRef:24] where the approach to interpretation of statutes was set out in the following manner: [24: Torbitt v International University of Management 2017 (2) NR 233 (SC).]

‘[25]As a point of departure it must be emphasised that what was stated by this court in Minister of Justice v Magistrates Commission correctly reflects the approach in the interpretation of statutes where this court expressed itself as follows at para 27:

‘The respective roles of the minister and the commission can be determined on a proper interpretation of the words “may” and “must” as used in ss 13 and 21(3)(a). In terms of what is commonly referred to as the cardinal rule of interpretation, where the words of a statute are clear, they must be given their ordinary, literal and grammatical meaning unless it is apparent that such an interpretation would lead to manifest absurdity, inconsistency or hardship or would be contrary to the intention of the legislature.’

and:

[30]The approach that a peremptory enactment must be obeyed exactly and that it is sufficient if a directory enactment is obeyed or fulfilled substantially has been described as rigid and inflexible and “that the modern approach manifests a tendency to incline towards flexibility”.’ (emphasis supplied)

The court was further referred to the decision in Sutter v Scheepers[footnoteRef:25], (applied in Torbitt supra)[footnoteRef:26] where useful but non-exhaustive guidelines were provided to arrive at the real intention of the legislature. The test[footnoteRef:27] was set out as follows: [25: Sutter v Scheepers 1932 AD 165 at 173-174.] [26: Rally for Democracy and Progress and Others v Electoral Commission of Namibia and Others 2010 (2) NR 487 (SC) at footnote 79.] [27: At par [28].]

‘1.The word ‘shall’ when used in a statute is rather to be considered as peremptory, unless there are other circumstances which negative this construction.

2.If a provision is couched in a negative form, it is to be regarded as a peremptory rather than a directory mandate.

3.If a provision is couched in positive language and there is no sanction added in case the requisites are not carried out, then the presumption is in favour of an intention to make the provision only directory.

4.If when we consider the scope and objects of a provision, we find that its terms would, if strictly carried out, lead to injustice and even fraud, and if there is no explicit statement that the act is to be void if the conditions are not complied with, or if no sanction is added, then the presumption is rather in favour of the provision being directory.

5.The history of the legislation also will afford a clue in some cases.’

In this regard, it was submitted on behalf of PIS that the provisions are directory as no sanction is provided for non-compliance therewith. Further argument was provided on the role of the Board, the objects of the Procurement Act and the reasons why a certain time was prescribed for preparation and submission of bids with a view to maximising competition.[footnoteRef:28] [28: Torbitt supra at par [55].]

There are no allegations in the papers that any bidder, or the Board suffered any prejudice whatsoever. Also the word used in section 47 is ‘may’, and the provision is also not cast in a negative form. There is no direct prohibition contained in section 47.

This piece of legislation is also recent, and as stated by Masuku J in Central Procurement Board v Nangolo supra has some teething problems,[footnoteRef:29] but it is apparent from the facts that there is no injustice, or fraud present by the fact that the bidding process effectively closed one day earlier. Not a single bidder suffered prejudice by the period being 1 day short. On the contrary, setting aside an entire bidding process on this basis would be a waste of resources not only for the bidders, but also for the Board. [29: At par [6].]

The court finds this provision to be directory and in the result the one day short is not fatal, and does not result in a nullity, as submitted on behalf of NPS. There was substantial compliance with the purpose for which the statutory provision was enacted. It contains no direct prohibition and no sanction for non-compliance.

The second portion of the relief sought in the counter application relates to non-compliance with section 55 of the Act. The provision is repeated below for ease of reference.

‘Award of procurement contracts

55.(1)The Board or a public entity must award a procurement contract to the bidder having submitted the lowest evaluated substantially responsive bid which meets the qualification criteria specified in the pre-qualification or bidding documents, following the steps outlined in subsections (3) and (4).

(2)There is no negotiation between the Board or a public entity and a selected bidder, except in such special circumstances as the Minister may determine.

(3)The Board or public entity, where special circumstances contemplated in subsection (2) apply, must initiate and oversee the negotiation between the Board or a public entity and a selected bidder.

(4)An accounting officer must, in the prescribed manner and form, notify -

(a)the successful bidder of the selection of its bid for award; and

(b)the other bidders, specifying the name and address of the successful bidder and the price of the contract.

(5)In the absence of an application for review by any other bidder within 7 days of the notice referred to in subsection (4), the accounting officer must award the contract to the successful bidder.

(6)A successful bidder may be requested to submit a performance security and sign a contract within the period specified in the bidding documents.

(7)Where the bidder whose bid has been accepted -

(a)fails to sign a contract, or

(b)fails to provide any required security for the performance of the contract,

within the prescribed period, the Board or public entity may select another bidder from amongst the remaining valid bids, and subsections (4) to (6) apply to the new selection.

(8)The Board or public entity must promptly in a prescribed manner publish a notice of every procurement or disposal award together with the executive summary of the bid evaluation report.’

Counsel for NPS submitted that the non-compliance was similarly fatal, based on the principle set out in Schierhout supra[footnoteRef:30]. In support of the argument reliance was placed on the following: [30: At 106-107.]

in terms of section 55(4)(a) of the Act an “accounting officer must, in the prescribed manner and form, notify – the successful bidder of the selection of its bid for award”; (emphasis supplied)

in terms of section 1 of the Act an account officer “means the accounting officer of a public entity” and the term public entity does not include the Board;

for that reason Regulation 1(2) of the Act provides that “For the purposes of these regulations, unless the context otherwise indicates, any reference to a public entity under these regulations, includes the Board”;

the Regulations cannot change the definition in the Act and for that reason, section 55(4)(a) requires that the account officer of the public entity and not the Board must issue the notice informing the successful bidder of the selection of its bid;

the notice dated 4 December 2019 and the notice dated 21 July 2020 were not signed by the accounting officer of NUST. Instead there notices were signed by the Chairman of the Board;

the relief sought by the applicant cannot therefore no be granted if the applicant cannot show that its bid was validly selected in terms of the provisions of the Act;

in the result and without even considering the remaining issues, the application should be dismissed with costs.

The Board in its answering papers pointed out the objects of the Act, which were to promote integrity, accountability, efficiency, fair dealing, responsiveness, informed decision making, consistency, legality and integration in the procurement of assets, works and services.

It submitted that in light of Article 18 of the Constitution and the above objects (set out in section 2) the Board has the principal objective to conduct the bidding process on behalf of public entities for the award of contracts for procurement or disposal of assets that exceed the threshold prescribed for public entities. This included, amongst others, to enter into contracts for procurement.[footnoteRef:31] [31: See section 8(a) of the Act.]

The Board confirmed that the bid was advertised on 5 August 2019 and closed on 3 September 2019 and that evaluation of the bids commenced on the same day in terms of Regulation 7. The Board further confirmed the issue of the notice of award on 4 December 2019 and on 21 July 2020.

The Board confirmed that, in line with its power to approve the award of the bid, it properly considered all bids and resolved to award the bid to PIS. The notification was a manifestation of the Board’s decision, resulting in the issue of a Notice of Award. This Notice of Award has not been set aside.

The Chair of the Board confirmed that he signed both Notices and that, in terms of the bidding documents, once the Notice of Award is issued there is a contract between the Board and the bidder. Further, that the parties are considered ad idem and a contract concluded in the circumstances. In other words, a Notice of Award is a decision or action that would bring the procurement contract into force.

The Chair also pointed out that in spite of NPS applying for review outside the standstill period, that the Board at its meeting, considered and declined both applications for review, which decision was transmitted to NPS and Shilimela Security. No further submissions were made by or on behalf of the Board in the terms of the relief sought in the counter application.

Counsel for PIS, conceded that on the face of it, the accounting officer of the public entity should sign the notice of the award as prescribed and read with Regulation 35. However, it was submitted that a strict interpretation of same being a nullity, as advanced on behalf of NPS, would amount to an absurdity and injustice for the reason that the effect would result in a situation where the accounting officer for the entity that in law, properly considered and determined the tender, award cannot announce the decision made by the entity.

It was also submitted that for purposes of determining whether non-compliance is a nullity that should be taken into consideration that Regulation 1(2) of the Regulations specifically provides that “any reference to a public entity under the regulations includes the Board”.

Further argument was addressed by counsel for PIS on the context within which section 55 (4) and (5) of the Act must be understood in order to determine whether the signature thereof by the Chair amounted to a nullity. The Act contemplates two different procurement processes. There is on the one hand the procurement by a public entity without involvement of the Board and there is, on the other hand, the procurement by the Board when the threshold is exuded, as in this case.

Where the public entity procures goods and services without going through the Board, the process followed is that the bid evaluation committee of the public entity in terms of section 26(4)(a) and (b) of the Act evaluates the bids received and forwards an evaluation report to the Procurement Committee of the public entity, which reads as follows:

‘(4) A bid evaluation committee established under subsection (1) is responsible for -

(a) the evaluation of pre-qualifications, bids, proposals or quotations; and

(b) the preparation of evaluation reports for submission to the procurement committee as provided under this Act.’

The duties and functions of the Procurement Committee of a public entity are as specified in Regulation 6(1) and (2) of the Public Procurement Regulations. This regulation reads verbatim as follows:

‘A procurement committee oversees the procurement process conducted by a public entity.

(2) A procurement committee, in accordance with the provisions of the Act, must –

(a) recommend to the accounting officer the bidding process of a public entity;

(b) review the evaluation of pre-qualification or bid for procurement made and submitted to it by the bid evaluation committee;

(c) attend to clarification of the issues pertaining to bidding during bidding stage and evaluation stage;

(d) …

(f) recommend to the accounting officer the approval for the award of the procurement contract; and’ (emphasis supplied)

Subject to the Procurement Committee making a recommendation to the accounting officer, it was submitted that the accounting officer of a public entity thereafter has a wide decision-making discretion as to whether s/he may accept the recommendation by the Procurement Committee for the public entity, for the purpose of making a procurement award.[footnoteRef:32] [32: See Regulation 6(3) of the Regulations: “(3) An accounting officer may accept the recommendation for the award of the procurement contract made under subregulation (2)(f) or request the bid evaluation committee to re-evaluate the bids submitted to the public entity and to re-submit to the procurement committee for reconsideration and recommendation.” (emphasis supplied)]

The duties and functions of the Board on the other hand are specified in section 55(1)(4) of the Act.[footnoteRef:33] [33: Ibid.]

Counsel for PIS argued that the decision to make an award is that of the Board where the Board directly adjudicates whether or not to grant a procurement award as it happened in this matter. The accounting officer of the Board only communicated the decision of the Board. This is different to when an accounting officer communicates his/her procurement decision in terms of the Act.

The court was referred to the decision of the South African Supreme Court of Appeal in Plover’s Nest Investments v De Haan[footnoteRef:34] where it considered and adjudicated on the question ‘of the consequences of the failure of an official of the municipality to communicate a decision of the municipal council correctly and whether the action of that official constitutes administrative action. The court determined the question as follows: [34: Plover’s Nest Investments v De Haan (20590/2014) [2015] ZASC (193) (30 November 2015).]

‘[27] …. In my view, it cannot be said that Geyer made any decision when regard is had to the introductory part of the letter. He did not evaluate the council’s decision but merely conveyed it. The act of writing the letter was a notification that followed on a decision. It has to be borne in mind that he had a duty to notify Plover’s Nest of the municipal council decision and the conditions imposed and that he was not vested with any authority to take a decision. It is clear that Geyer did not intend to do anything other than communicate the decision of the council. He performed a clerical act and in the process committed an error. The communication of the decision had nothing to do with the decision – only the notification was defective. His error cannot be imputed to the council and elevated as the decision of council. It follows that the clerical error does not constitute administrative action that would substitute the resolution of the municipality. In the result, the resolution of council dated 30 January 1995 is valid and binding on the municipality. It follows that the decision of the municipality on 13 February 2013 to grant approval to Plover’s Nest’s building plans is fatally flawed and stands to be reviewed and set aside.’ (emphasis supplied)

On the principles enunciated in Torbitt supra and Rally for Democracy supra the court finds that the non-compliance (in line with the definition of accounting officer) is not such as to render the notice of award a nullity in these circumstances. There was substantial compliance, given that it was signed by the accounting officer of the entity that was tasked with considering and awarding the tender on behalf of the public entity.

Costs

The applicant has substantially succeeded in its application. It is trite that the normal rule is that the award of costs is in the discretion of the court and that the costs must follow the course. The court may only divert from the normal rule for good reason in the exercise of its discretion that the successful party be deprived of those costs.

The substantial portion of the opposition to PIS’s application came from NPS’s opposition. The Board essentially only opposed the question of urgency, and pointed out that the decision of the Review Panel was ultra vires. In view of this, NPS should bear the larger portion of the costs awarded in favour of PIS.

____________________

EM SCHIMMING-CHASE

Acting Judge

APPEARANCES

APPLICANTT Chibwana and A Shimakeleni

Instructed by Appolus Shimakeleni

Windhoek

1st AND 2nd RESPONDENTSJ Ncube

Instructed by Government Attorney

Windhoek

5th RESPONDENTR Heathcote SC and SJ Jacobs

Instructed by Koep & Partners

Windhoek