THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 1306/18
In the matter between:

AIRPORTS COMPANY SOUTH AFRICA SOC LTD

Appellant
and

IMPERIAL GROUP LTD

First Respondent

WOODFORD EXCLUSIVE RENTALS CC

Second Respondent

AAD CAR AND TRUCK RENTAL (PTY) LTD

Third Respondent
t/a CABS CAR AND TRUCK HIRE

UNITRANS AUTOMOTIVE (PTY) LTD

Fourth Respondent
trading through its division HERTZ RENT A CAR

iDRIVE CAR HIRE (PTY) LTD

Fifth Respondent
t/a VALUE CARE HIRE

CMH CAR HIRE (PTY) LTD

Sixth Respondent
t/a FIRST CAR RENTAL

McCARTHY LTD trading through

Seventh Respondent
its division BIDVEST CAR RENTAL

SPRINGS CAR WHOLESALERS (PTY) LTD

Eighth Respondent
t/a DOLLAR THRIFTY CAR RENTAL

BARLOWORLD SOUTH AFRICA (PTY) LTD

Ninth Respondent
trading through its division
RENT A CAR t/a AVIS BUDGET

LMR 707 CAR RENTAL (PTY) LTD

Tenth Respondent

AFRIRENT (PTY) LTD

Eleventh Respondent

CAPITAL CAR HIRE (PTY) LTD

Twelfth Respondent

Neutral citation:
Airports Company South Africa SOC Ltd v Imperial Group Ltd &
Others (1306/18) [2020] ZASCA 02 (31 January 2020)
Coram:

Ponnan, Cachalia, Tshiqi, Wallis and Molemela JJA

Heard:

17 September 2019

Delivered:

31 January 2020

Summary:
Procurement by organ of state – whether s 217 of the Constitution is
applicable to Request for Bids (RFB) for the granting of car rental concessions –
Language used in s 217 is clear and unambiguous – s 217 applicable when organ of
state contracts for goods or services even where organ of state is not incurring an
expenditure – preferential procurement policy reflected in RFB bears no relation to
requirements of legislation envisaged in s 217(3) – non-compliance rendering RFB
irrational, unlawful and invalid.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Gauteng Division of the High Court, Johannesburg (Coppin J sitting
as court of first instance):
The appeal is dismissed with costs, including the costs occasioned by the employment
of two counsel.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Molemela JA (Tshiqi JA concurring)
[1] The appellant, Airports Company South Africa Soc Ltd (ACSA), is a public
company created in accordance with the provisions of s 2 of the Airports Company Act
44 of 1993 (ACSA Act). It is an organ of state whose procurement processes involve
the exercise of public power as envisaged in s 239 of the Constitution.1 On 5
September 2017 ACSA published a Request for Bids (RFB) in terms of which members
of the public were invited to submit bids for the hiring of 71 car rental kiosks and parking
bays at nine airports operated by ACSA. The RFB indicated that each successful
applicant would be granted car rental concessions for ten years. The first respondent,
Imperial Group Ltd (Imperial), a car rental company, submitted a bid in response to the
RFB. Imperial operates the Europcar and Tempest car-rental divisions as separate
businesses.

[2] In terms of clause 5 of the RFB, bids were to be evaluated in a four-stage
process. At stage I, bids were to be evaluated to confirm that all mandatory
administrative requirements and all pre-qualification requirements had been met. At

1 See Airports Company South Africa v Big Five Duty Free (Pty) Limited & others [2018] ZACC 33; 2019
(5) SA 1 (CC) para 10.

stage II, the bids were to be evaluated for functionality or the technical aspect of the
bids relating to the skills and experience of the bidders. At stage III, the bids were to
be evaluated for price and preference. Transformation imperatives would be taken into
account at stage IV.

[3] The RFB stated that ACSA would have a briefing session at which the RFB’s
stipulations would be clarified to prospective bidders. It also invited prospective bidders
to submit written requests for clarification, should they be so inclined. Several bidders
sought clarification on a variety of issues. On 13 November 2017, Imperial wrote a
letter to ACSA seeking clarification regarding several aspects of the RFB and, in the
same letter, also expressed the view that certain provisions of the RFB were unlawful.
Imperial submitted its bid on 12 January 2018, with full reservation of its rights and
without waiver, novation or abandonment of any of its contentions regarding the validity
of the RFB and its publication.

[4] ACSA subsequently published a document on its website entitled ‘ACSA’s
responses to bidders’ questions’. Several revised versions of that document were
subsequently published in response to further queries raised by Imperial and other
bidders. A further exchange of correspondence between Imperial and ACSA
culminated in Imperial referring certain disputes arising from the RFB for arbitration,
which it subsequently withdrew. Nothing regarding that arbitration needs to detain this
appeal.

[5] Having formed the view that the pre-qualification criteria and several provisions
of the RFB contravened s 2172 of the Constitution and legislative prescripts related to
procurement, Imperial launched a two-pronged urgent application in the Gauteng
Division of the High Court, Johannesburg.  Under Part A of the application, Imperial
sought an order compelling ACSA to disclose the identities of all the entities that had
submitted bids in response to the RFB. Part A was essentially aimed at joining all
entities having an interest in the matter as co-respondents in the application. Part A
having been granted by a differently constituted court, Imperial successfully brought

2 Section 217 of the Constitution requires that all public procurement be in accordance with a system
which adheres to fairness, equitability, transparency, competitiveness and cost-effectiveness, while
promoting groups that were previously disadvantaged by unfair discrimination.

an application for joinder, as a result of which all the bidders that had responded to the
RFB became co-respondents with ACSA. This paved the way for the hearing of Part B
before Coppin J (the High Court).

[6] In Part B of the application, Imperial sought an order reviewing and setting aside
ACSA’s decision to issue and publish the RFB on the basis that it was unlawful,
unreasonable, inconsistent with the constitution and invalid. Imperial principally relied
on the Promotion of Access to Justice Act3 (PAJA), alternatively on the principle of
legality, for the relief it was seeking. Only ACSA opposed the application.

[7] ACSA submitted, inter alia, that Imperial’s application for review was premature
as it had not yet made a final decision pertaining to the bids. It pointed out that since
there was no final decision pertaining to the bids, it still had the discretion to amend
the RFB or even cancel the entire bid process at any time before an award was made.
In addition, it alleged that the decision it had made in relation to the RFB did not amount
to an administrative action and was thus not reviewable under PAJA. The High Court
held that the RFB and the decision to publish it were unlawful, inconsistent with the
Constitution and the legislative framework envisaged therein and invalid. Furthermore,
it held that ‘the RFB and the decision to publish the RFB are reviewed and set aside
under the principle of legality, alternatively in terms of s 6(2)(a)(i), and/or s 6(2)(b),
and/or s 6(2)e)(i), and or s 6(2)(f)(i), and/or s 6(2)(i) of PAJA’ and also ordered ACSA
to pay the costs of the application.  Aggrieved by that order, ACSA successfully applied
to the High Court for leave to appeal to this court.

[8] The main issues that arise for consideration by this court are two-fold: first, the
interpretation and applicability of s 217 of the Constitution together with the relevant
statutes falling under its legislative scheme; and, second, the rationality of several
provisions of the RFB (impugned provisions) as well as the process leading to the
decision to publish the RFB culminating with its publication.  There are two ancillary
issues, namely, whether the terms of the RFB are vague and whether ACSA committed
an error of law that impacts negatively on the RFB.

3 Act 3 of 2000.

Impugned provisions of the RFB
[9] I turn now to delineate the impugned provisions of the RFB with a view to
assessing whether they are in compliance with legislative prescripts. Clause 4.2.4 of
the RFB set out certain criteria as pre-qualification requirements. A failure to comply
with these pre-qualification criteria meant that the bidder in question would fall at the
first hurdle and would thus not be eligible to proceed to the second stage of the
evaluation process. Clause 4.2.4.1 required large entity4 enterprises such as Imperial
to meet certain minimum qualification criteria. Under the heading of ‘criteria’, the RFB
prescribed the minimum percentages of designated persons that each large entity was
expected to have at the level of ownership, enterprise, supplier development as well
as the management control of that entity.5 In its clarification statement relating to clause
4.2.4.1, ACSA advised prospective bidders that each large entity was expected to
satisfy all the specified minimum percentages applicable to the designated persons
listed in clause 4.2.4.1. The assessment of the prequalification criteria set out in clause
4.2.4.1 was to be done at stage I of the bid evaluation process. Imperial contended
that the inclusion of pre-qualification criteria imposing discriminatory minimum
ownership, enterprise and supplier development as well as management control
requirements based on race and gender were unlawful as they contravened s 217 of
the Constitution, the Preferential Procurement Policy Framework Act 5 of 2000 (the PP
Act) and the regulations promulgated under that Act, as well as the Broad-Based Black
Economic Empowerment Act 53 of 2003 (B-BBEE Act) read with the Tourism Code.

[10] Under the heading of ‘B-BBEE Provisions’, clause 4 of the RFB dealt with price
and preference (B-BBEE compliance). It provided, inter alia, that a maximum of 100
points would be allocated to a bid on the basis that: 20 points would be allocated for

4 The RFB described a ‘large entity’ as an entity with a turnover in excess of R45 million.
5 In clause 4.2.4.1 of the RFB, the requirements pertaining to ‘ownership’, ‘enterprise and supplier
development’ and ‘management control (aligned to ownership)’ are listed under the caption
‘transformation elements’. The criteria prescribed for the ownership component were as follows: ‘At least
30% of exercisable voting rights in the enterprise in the hand of black people’ and ‘at least 15% of
exercisable voting rights in the enterprise in the hands of black women’. The prescribed criteria for the
‘Enterprise and Supplier Development’ component were specified as follows: ‘At least 40% procurement
spend (excluding procurement of motor vehicles) from suppliers that are at least 51% black-owned’ and
‘at least 12% procurement spend (excluding procurement of motor vehicles) from suppliers that are at
least 30% black women owned’. The three criteria specified in relation to the management control
component are the following: ‘At least 30% Black executive management as a percentage of all
executive management within the car rental division of the entity’; ‘[a]t least 15% black female executive
management as a percentage of all executive management within the car rental division of the
entity’;’[a]t least 2% black employees with disabilities as a percentage of all employees’.

price in respect of rental offered for a kiosk, 30 points for price in respect of rental
offered for the parking bays required and 50 points for the bidder’s B-BBEE scorecard.
This essentially meant that at stage III, bids would be scored a maximum of 50 points
for price and 50 points for B-BBEE compliance. Imperial contended that the provisions
of this clause contravened the PP Act.

[11] Clause 1.7 of the RFB provided that at stage IV, a bid might be awarded to a
bidder other than the highest scoring bidder ‘where transformation imperatives allow’.
This clause was read with clause 5.6, which stated that ACSA’s transformation
imperatives for all the car-rental opportunities mentioned in the RFB were in line with
ACSA’s transformation policy which could be downloaded from ACSA’s website.
Imperial contended that clauses 1.7 read with clause 5.6 contravened the provisions
of the PP Act.

[12] For the sake of completeness, I interpose to mention, en passant, a clause of
the RFB that is no longer a subject of Imperial’s challenge in this court. Clause 5.6 of
the RFB embodied what the parties referred to as ‘the single opportunity rule’. After a
detailed analysis of the contents of that clause, the parties’ submissions relating thereto
and the applicable law, the High Court found that ACSA’s single opportunity rule was
rationally connected to the purposes that ACSA sought to achieve.6 As Imperial did not
persist with its attack on the single opportunity rule in this court, clause 5.6 will therefore
be excluded from the discussion relating to the impugned provisions of the RFB.
Suffice it to mention that the reasoning and finding of the High Court on this aspect are
supported.

[13] Before delving into an evaluation of the parties’ submissions and the legal
principles applicable to this matter, I must mention that at the hearing of this appeal,
both counsel urged us that in the event that we were inclined to find that the
applicability of s 217 was dispositive of the appeal, we should nevertheless deal with
all the grounds of review in our judgment. As authority for that request they relied on S
v Jordan & others (Sex Workers Education and Advocacy Task Force & others as amici

6 The compelling considerations that led the High Court to that conclusion are embodied in para 110-
116 of the judgment of the High Court.

curiae),7 where it was held that where a provision or decision is attacked on one ground
that is considered decisive of the matter, the other grounds raised in the matter should
nevertheless be ventilated and decided upon for the benefit of a court that may later
have to hear an appeal arising from that matter. In the light of that injunction of the
Constitutional Court, that is indeed the approach that will be followed in this judgment.

Submissions
[14] Imperial contended that the decision to issue and publish the RFB amounted to
the exercise of a public power  reviewable either in terms of PAJA or the principle of
legality, that it was invalid because it had no lawful basis, was irrational and
contravened the provisions of s 217 of the Constitution and the statutes envisaged in
that section8. Although ACSA acknowledged that PAJA applies to any tender award, it
maintained that PAJA was not applicable to the RFB. It relied on three main
contentions for that submission. First, because  it had not yet made a final award, with
the result that the mere issuance of the RFB had no direct external legal effect and
thus had no adverse effects on Imperial’s rights.9 ACSA thus contended that Imperial’s
review application was premature. Second, ACSA submitted that s 217 of the
Constitution does not apply to the RFB because it (ACSA) was merely granting
concessions to bidders who were paying it for those concessions and not ‘procuring’
anything from the bidders or ‘contracting for goods and services’.

[15] Third, ACSA contended that s 217 of the Constitution is, in any event, only
applicable where an organ of state is incurring an expense. As the nature of the
contract envisioned in the RFB would not result in ACSA incurring an expense, so the
argument went, it did not concern procurement for goods or services, thus making it
unnecessary for ACSA to comply with s 217 of the Constitution or the PP Act. ACSA
contended that even if it were to be found that s 217 was applicable to the RFB, the

7 S v Jordan & others (Sex Workers Education and Advocacy Task Force & others as amici curiae) 2002
(6) SA 642; 2002 (11) BCLR 1117 (CC) para 21.
8 It is undisputed that the Preferential Procurement Policy Framework Act 5 of 2000 and the Regulations
under it, as well as the Broad-based Black Economic Empowerment Act (Act 53 of 2003) as amended
by the Black Economic Empowerment Act 46 of 2013 are statutory provisions that form part of the
legislative scheme envisaged in s 217(3) of the Constitution.
9 As authority for this contention, ACSA relied on this court’s judgment in Grey’s Marine Hout Bay (Pty)
Ltd v Minister of Public Works 2005 (6) SA 313 (SCA); 2005 3 All SA 33 para 23. Compare n 12 below.

PP Act and its regulations would be patently inapplicable in a situation where ACSA
was not paying providers for goods and services.

Was the application for review brought prematurely?
[16] The correct starting point is to consider whether the issuance and publication of
the RFB constitutes an administrative action that can be challenged on review under
PAJA. The definition of ‘administrative action’ in s 1 of PAJA has seven components:
(a) there must be a decision of an administrative nature; (b) by an organ of state or a
natural or juristic person; (c) exercising a public power  or performing a public function;
(d) in terms of any legislation or empowering provision; (e) if that decision adversely
affects the rights of any person; (f) or has a direct, external legal effect; and (g) does
not fall under any of the exclusions listed in that section.10 It is evident from the
provisions of clause 5.111 and 5.312 of the RFB that a bidder who did not meet the
prescribed pre-qualification criteria would be automatically disqualified from the
evaluation process at stage I. It is also evident that the RFB did not allow ACSA to
exercise any discretion in that regard. It is undisputed that in the light of the pre-
qualification criteria set out in those clauses of the RFB, the self-evident outcome of
stage I of the evaluation process was that Imperial would be disqualified from further
evaluation.  Imperial’s assertion that it could not wait until after ACSA had made a final
award because it would, upon its disqualification from the bid, have to vacate ACSA’s
premises, was not refuted.

[17] As explained by this court in Chairman of the State Tender Board v Digital Voice
Processing (Pty) Ltd; Chairman of the State Tender Board v Sneller Digital (Pty) Ltd &
others:13
‘Generally speaking, whether an administrative action is ripe for challenge depends on its
impact and not on whether the decision-maker has formalistically notified the affected party of
the decision or even on whether the decision is a preliminary one or the ultimate decision in a

10 Minister of Defence and Military Veterans v Motau & others [2014] ZACC 18; 2014 (5) SA 69 (CC)
para 33.
11 Clause 5.1 inter alia states: ‘The requirements of any given stage must be complied with prior to
progression to the next stage.’
12 Clause 5.3 inter alia states: ‘Bidders must meet the pre-qualification criteria as specified in clause
4.2.4.’
13 Chairman of the State Tender Board v Digital Voice Processing (Pty) Ltd, Chairman of the State
Tender Board v Sneller Digital (Pty) Ltd & others [2011] ZASCA 202; 2012 (2) SA 16 (SCA) para 20.

layered process . . . Ultimately, whether a decision is ripe for challenge is a question of fact,
not one of dogma.’

The following dictum of the Constitutional Court in AllPay Consolidated Investment
Holdings v Chief Executive Officer, South African Social Security Agency14 is equally
apt:
‘The decision to exclude AllPay from the second, pricing stage certainly affected its rights and
legitimate expectations. Because of its exclusion we are not in a position to know what the
outcome of the pricing stage would have been; it is mere speculation. . . . [I]n Grey’s Marine it
was stated, with reference to the phrase “adversely affect the rights of any person” in section
1 of PAJA, that what “was probably intended [was] rather to convey that administrative action
is action that has the capacity to affect legal rights.” Irregularities in the process, which may
also affect the fairness of the outcome, certainly have the capacity to affect legal rights.’
(footnotes omitted)

[18] Fortified by the authorities mentioned in the preceding paragraph, I agree that
the automatic disqualification of Imperial at the first hurdle of the evaluation process
would have an external effect and adversely affected Imperial’s legal rights. Expecting
Imperial to wait until it was formally notified of the outcome before resorting to judicial
review in terms of PAJA would indeed be tantamount to putting form above substance.
I am thus satisfied that, on the facts of this case, the RFB constituted an administrative
action that was ripe for a judicial challenge. Imperial was therefore perfectly entitled to
resort to judicial review without having to await the formal notification of the outcome.

Is s 217 of the Constitution applicable to the RFB?
[19] I consider next the issue of the applicability of s 217 of the Constitution to the
RFB. Section 217 provides that:
‘(1)
When an organ of state in the national, provincial or local sphere of government, or any
other institution identified in national legislation, contracts for goods or services, it must do so
in accordance with the system which is fair, equitable, transparent, competitive and cost-
effective.

14 AllPay Consolidated Investment Holdings v Chief Executive Officer, South African Social Security
Agency [2013] ZACC 12; 2014 (1) SA 604 (CC); (AllPay) at para 60.

(2)
Subsection (1) does not prevent the organs of state or institutions referred to in that
subsection from implementing a procurement policy providing for -
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of persons, disadvantaged by
unfair discrimination.
(3)
National legislation must prescribe a framework within which the policy referred to in
subsection (2) must be implemented.’ (Own emphasis).

[20] In Steenkamp NO v Provincial Tender Board, Eastern Cape,15 the Constitutional
Court recognised that s 217 of the Constitution, which enjoins all spheres of
government and organs of state to contract for goods or services in accordance with a
system that is fair, equitable, transparent, competitive and cost-effective, is the source
of the powers and functions of a government tender board. That constitutional
imperative is echoed in a number of statutes. While s 217(2) of the Constitution makes
provision for organs of state to implement procurement policies that prefer ‘categories
of preference’ in the allocation of contracts and provides for the advancement of
persons disadvantaged by unfair discrimination, it is clear that the freedom conferred
on organs of state to implement preferential procurement policies is circumscribed by
s 217(3). That subsection provides that national legislation ‘must’ prescribe a
framework within which the preferential procurement policies ‘must’ be implemented.
The clear implication is that organs of state may implement preferential procurement
policies provided they do so within a framework prescribed by national legislation. It is
undisputed that the PP Act and the B-BBEE Act constitute the legislative scheme
envisaged in s 217(3).

[21] As stated already, ACSA contended that the provisions of s 217 of the
Constitution are not applicable to its RFB as it was merely granting concessions to
bidders and not contracting for goods and services for itself. It asserted that
‘procurement’ is confined to where goods or services are procured for one’s own use.

15 Steenkamp NO v Provincial Tender Board of the Eastern Cape [2006] ZACC 16; 2007 (3) SA 121
(CC) para 33.

In oral argument before us, it was submitted on behalf of ACSA that s 217 applies only
when an organ of state incurs an expenditure. It was contended that there was nothing
in the language of s 217 that indicated that the disposal and letting of state assets must
be subject to the same provisions as those concerning procurement. In support of
those assertions, ACSA relied on the provisions of ss 38(1)(a)(iii), 51(1)(a)(iii) and
76(4)(c) of the Public Finance Management Act 1 of 1999 (PFMA)16 which require
organs of state to have appropriate ‘procurement and provisioning’ systems. ACSA
contended that the usage of these two distinct words in that legislation served as proof
that there is a difference between procurement and provisioning. If there was no
distinction between procurement and provisioning, so the argument went, only the
word ‘procurement’ would have been employed in those sections.

[22] The Constitution is the supreme law of South Africa and all other law is subject
to it.17 Thus, its interpretation cannot depend on the legislation enacted under it. One
can accordingly not invoke the PFMA as a guide to the interpretation of the
Constitution. The language used in s 217 of the Constitution is clear and unambiguous.
It is now settled that when interpreting legislation, the point of departure is the provision
itself, read in context and having regard to the purpose of the provision.18 The ordinary
meaning of ‘procure’ is ‘obtain’.19 Notably, Article 2(j) of the UNCITRAL Model Law on
Public Procurement20 defines ‘procurement’ as ‘the acquisition of goods, construction
or services by a procuring entity’. It does not limit procurement to state expenditure.
Section 217(1) spells out what ‘procurement’ means, which is ‘to contract for goods or
services’. Section 217 does not restrict the means by which goods and services are
acquired.

[23] In any event, the comparison between procurement and provisioning cannot
avail ACSA, because the word ‘provisioning’ is equally wide. It simply means ‘to obtain

16 ACSA is one of the major public entities listed in Schedule 2 of the PFMA and to which the PFMA is
applicable.
17 Section 2 of the Constitution provides: ‘This Constitution is the supreme law of the Republic, law or
conduct inconsistent with it is invalid, and the obligations imposed by it must be fulfilled.’
18 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA) para 18.
19 South African Concise Oxford dictionary ‘obtain’; Webster’s dictionary: encyclopaedic edition ‘to
obtain’ Black’s Law dictionary 7 ed ‘the act of getting or obtaining something’.
20 United Nations document A/66/17, annex I, which was adopted by the United Nations Commission
on International Trade Law on 1 July 2011.

provisions’. It thus applies equally to obtaining goods and services for one’s own use
or for the use of others. Furthermore, the object of s 2 of the PFMA is to ‘secure
transparency, accountability, and sound management of the revenue, expenditure,
assets and liabilities of the institutions to which this Act applies.’ Obligations consistent
with these objects are therefore placed on the accounting authority of ACSA. Various
provisions of the PFMA attest to the fact that the acquisition of revenue by the state,
as opposed to incurring expenditure, is also envisaged as part of the procurement
process.21 ACSA cannot, therefore, rely on the provisions of the PFMA as support for
its contention that ‘procurement’ is confined to instances where the state is incurring
an expenditure. ACSA’s restrictive reading of s 217 simply finds no support in the plain
language of that section. It is in any event difficult to think of a reason why
‘procurement’ would relate only to when government is expending money.

[24] The objects22 of the ACSA Act are helpful in ascertaining whether the RFB
amounted to contracting for goods or services’. ACSA’s listed objects ‘the acquisition,
establishment, development, provision, maintenance, management, control or
operation of any airport, any part of any airport or any facility or service at any airport
normally related to the functioning of an airport’. It is evident that the concessions
envisaged in the RFB are aligned to ACSA’s objects and key to ACSA’s operations.
That ACSA, in inviting prospective bidders to bid for car-rental kiosks, parking bays
and to car-rental concessions for ten years, considered itself to be contracting for
services is evident from the following averment in its answering affidavit: ‘There is no
dispute that ACSA had a commercial need to ensure that it leases its premises to
successful bidders in order to ensure revenue generation.’ That averment must be
considered in the context of the following assertion made in the RFB:
‘ACSA is focused on creating and operating world-class airports measuring up to international
standards. . . ACSA’s purpose is to create a world-class car-rental environment providing the
highest level of service and convenience for car-rental users. . . Aligned to the company’s
strategy of creating stakeholder value and increasing revenue generation, the car rental
strategy is to continue to earn and grow rental revenues by optimally locating car rental facilities
on ACSA airports. In line with this, we would like to ensure that car rental at the airports remain

21 See ss 38 and 51 of the PFMA.
22 Section 4 of the ACSA Act.

a dominant intermodal mode of transport from air to road (and vice versa), maintaining > 60%
of car rental transactions in South Africa.’

[25] ACSA’s contention that it was effectively leasing its property to successful
bidders so that those bidders could engage in a direct relationship with members of
the public fails to take into account the assertions set out in the extracts above. Bearing
those assertions and ACSA’s strategy in mind, as well as the presentation ACSA made
to prospective bidders as part of the pre-tender roadshow, it cannot be gainsaid that
the essence of the transaction is that ACSA contracts with car-rental companies to
complete and enhance the services available to its customers at its airports in
accordance with its own mandate as contemplated in the ACSA Act.  In this case the
focus falls on what constitutes services in s 217 of the Constitution. The successful
operation of a modern airport is heavily dependent upon passengers on arrival being
able to secure transport to their ultimate destination and the ability to hire a car for
onward travel is essential. In order to ensure the availability of that service for its
passengers ACSA had to contract with car hire firms to provide it. The RFB proposes
to do that by leasing facilities at airports to car rental firms. ACSA’s suggestion that the
granting of concessions to car-rental as envisaged in the RFB did not equate to it
contracting for services with those bidders within the meaning of s 217 of the
Constitution thus amounts to the elevation of form over substance.

[26] Furthermore, the contention that the preposition ‘for’ after the word ‘contracts’
suggests that ‘procurement’ is confined to the procurement of goods or services for
one’s own use or benefit unnecessarily strains the ordinary meaning to be attached to
the words used in s 217. The RFB clearly envisages that the car-rental companies will
be performing a service on behalf of ACSA, thereby ‘promoting the reasonable
interests and needs’ of its users as contemplated in s 12(10)(b) of the ACSA Act.
ACSA’s stance that it is not, in terms of the RFB, procuring a service as contemplated
in s 217 of the Constitution is baseless. As I see it, what determines whether a
transaction amounts to procurement within the contemplation of s 217 of the
Constitution is the true nature of the entire transaction (the real substance) and not the

form or label attached thereto by the parties.23 For all the reasons stated in the afore-
going paragraphs, I find that the RFB was subject to s 217 of the Constitution. The
question is whether it complied with the requirements of that provision.

Is the RFB unlawful, irrational and invalid?
[27] Having reached that conclusion, I turn now to consider the lawfulness of the
RFB. There were two grounds of attack upon which Imperial contended that the
decision to issue and publish the RFB was irrational. First, Imperial submitted that the
procedure that preceded the issuance and publication of the RFB was fatally flawed,
as there was no research prior to the publication of the RFB. It contended further that
it was apparent from the record filed by ACSA in terms of Rule 53 of the Uniform Rules
of Court that there were no documents that evidenced that ACSA’s decision was
underpinned by consultation, advice, discussion, comment or debate. In response,
ACSA contended that there was no need for it to embark on separate research before
taking the decision to issue and publish the RFB, as the research done during the
course of the process that led to the promulgation of the Tourism Code also had to be
taken into account. It averred that the presentation made to prospective bidders during
its pre-tender roadshow demonstrated that ACSA had done sufficient research on the
matter.

[28] Second, Imperial submitted that there was no proper factual basis and proper
consideration of all the relevant facts showing that the prequalification criteria, scoring
methods or transformation criteria were necessary, feasible or achievable in the car-
rental market. It also contended that there was no demonstration of the correct
application of the law, thus rendering the decision to publish the RFB irrational. ACSA
contended that it was unquestionable that seeking to transform any industry was a
legitimate government purpose. It maintained that the impugned provisions of the RFB
were rationally connected to ACSA’s envisioned purpose of accomplishing
transformation of the car-rental industry.

23 Compare Helmut Müller (case C-451/08 Helmut Müller v Bundesanstalt für Immobilienaufgaben,
[2010] 3 C.M.L.R. 18); Faraday Development Ltd v West Berkshire Council ([2018] EWCA Civ 2532.

[29] Another ground forming the basis of Imperial’s rationality attack, relates to
ACSA’s erroneous reliance on the provisions of Reg 16A of the Treasury Regulations
issued pursuant to s 76 of the PFMA and Treasury’s Implementation Guide when
clarifying the RFB to prospective bidders.24 It is clear from the provisions of Reg
16A.2.1(c) that Reg 16A, which relates to the implementation of a supply chain
management system that inter alia relates to the disposal and letting of state assets,
applies only to the public entities listed in Schedules 3A and 3C of the PFMA. As ACSA
is classified as a major public entity listed in Schedule 2 of the PFMA, Reg 16A and
the Implementation Guide are not applicable to the RFB. In its written heads of
argument, ACSA conceded that Reg 16A and the Implementation Guide were not
applicable to the RFB but maintained that nothing turns on that error.

Discussion
[30] The principle of legality dictates that there must be a rational connection
between the decision taken and the purpose for which the decision was taken.25 For a
decision to be rational, there must be a rationally objective basis justifying the
impugned conduct.26 In the ordinary meaning of the term, a decision is ‘rationally’
connected to the purpose for which it was taken if it is connected to that purpose by
reason, as opposed to being arbitrary or capricious.27 As correctly observed by this
court, a determination of whether a decision is rationally connected to its purpose calls
for a factual enquiry blended with a measure of judgment.28 In terms of s 6(2)(f)(ii) of
PAJA, an administrative action is reviewable if it is not rationally connected, inter alia
to the purpose for which it was taken, the purpose of the empowering provision, the
information before the functionary who took the decision or the reasons advanced  by
the functionary who took it. The means for achieving a purpose for which the power
was conferred must include everything that is done in order to achieve that purpose.29

24 ACSA had maintained that Reg 16A distinguished between the acquisition of goods and services on
the one hand and the disposal and letting of state assets on the other.
25 Democratic Alliance v President of the Republic of South Africa & others [2012] ZACC 24; 2013 (1)
SA 248 (CC) para 32.
26 Merafong Demarcation Forum V President of the Republic of South Africa & others 2008 (5) SA 171
(CC) para 63.
27 Calibre Clinic Consultants (Pty) Ltd & another v National Bargaining Council for the Road Freight
Industry & another [2010] ZASCA 94; 2010 (5) SA 457 (SCA) para 58.
28 Minister of Home Affairs & others v Scalabrini Centre, Cape Town & others [2013] ZASCA 134; [2013]
4 All SA 571 (SCA) para 66.
29 Ibid paras 36 and 37.

[31] The Constitutional Court has recently explained that process-rationality cannot
be separated from substantive rationality; rather, the key question for rationality is
whether the means (including the process of making a decision) are linked to the
purpose or ends for which the decision was taken.30  In Democratic Alliance v President
of the Republic of South Africa & others the Constitutional Court stated as follows:31
‘The conclusion that the process must also be rational in that it must be rationally related to
the achievement of the purpose for which the power is conferred, is inescapable and an
inevitable consequence of the understanding that rationality review is an evaluation of the
relationship between means and ends. The means for achieving the purpose for which the
power was conferred must include everything that was done to achieve that purpose. Not only
the decision employed to achieve the purpose, but also everything done in the process of
taking that decision, constitutes means towards the attainment of the purpose for which the
power was conferred.’

[32] This court has also emphasised that in order to be rational, a decision must be
based on accurate findings of fact and a correct application of the law.32 A wrong or
mistaken interpretation of a provision in a statute constitutes an error of law that is
reviewable33 under s 6(2)(d) of PAJA. It is also reviewable under the principle of
legality.34 Although ACSA averred that it did not consider itself bound by the provisions
of Reg 16A and the Implementation Guide, its erroneous belief that those instruments
were applicable featured prominently in its answering affidavit setting out its reasons
for the RFB. The inescapable inference is that it in fact considered them to be binding.
The RFB was, thus, from the outset, based on a wrong premise. It is this wrong premise
that led ACSA not to comply with s 217 of the Constitution and the legislation envisaged
in it. This also explains the paucity of documentary evidence that would have informed
the content of the RFB. This ineluctably leads me to conclude that the process

30 National Energy Regulator of South Africa & another v PG Group & others Pty Ltd [2019] ZACC 28;
2019 (10) BCLR 1185 (CC) para 48.
31 Democratic Alliance v President of the Republic of South Africa & others [2012] ZACC 24; 2013 (1)
SA 248 (CC) para 36.
32 Chairman of the State Tender Board v Digital Voice Processing (Pty) Ltd; Chairman of the State
Tender Board v Sneller Digital (Pty) Ltd & others [2011] ZASCA 202; 2012 (2) SA 16 (SCA) para 40.
33 Ahmed & others v Minister of Home Affairs & another [2018] ZACC 39; 2019 (1) SA 1 (CC) para 44.
34 See in this regard Premier of the Western Cape & others v Overberg District Municipality & others
[2011] ZASCA 23; 2011 (4) SA 441 (SCA) paras 37-38, where this Court held that the provincial
executive had misconstrued the powers conferred on it under s 139(4) of the Constitution, which
offended against the principle of legality.

preceding the issuance of and the subsequent publication of the RFB was materially
tainted, thereby rendering the entire process irrational.

[33] ACSA acknowledged in its papers that, as an organ of state, it may only perform
those powers that are conferred on it by law. That is a correct encapsulation of the
principle of legality. Furthermore, ACSA conceded that the PP Act and the B-BBEE
Act are indeed the statutory provisions envisaged in s 217(2) and (3) of the
Constitution. ACSA, however, contended that the PP Act is inapplicable to the RFB
and further submitted that the B-BBEE Act did not preclude it from setting its own
qualification criteria. It is now convenient to consider the relevant provisions of those
two statutes in order to determine whether the PP Act is applicable to the RFB, and if
so, whether it (the RFB) passes muster in relation to the procurement provisions
stipulated in those two statutes.

[34] ACSA falls within the ambit of the B-BBEE Act because of the definition of
‘public entity’ in that Act. It is worth noting that prior to the amendment of the B-BBEE
Act in 2013,35 organs of state were merely required to take into account and apply the
Codes of Good Practice whenever it was ‘reasonably possible’ to do so. The preamble
attests to the fact that the amendment was mainly aimed at promoting compliance by
organs of state and public entities. In terms of s 9 of the B-BBEE Act, the Minister of
Trade and Industry (Minister) is empowered to issue Codes of Good Practice on black
economic empowerment (B-BBEE codes) that may include, inter alia, qualification
criteria for preferential purposes for procurement and other economic activities. The
provisions of s 9(2) read in conjunction with s 11(2) of the B-BBEE Act emphasise the
need to ensure that the preparation and issuance of B-BBEE codes by the Minister are
informed by a strategy  that provides for ‘an integrated, co-ordinated and uniform
approach to black economic empowerment’ by all the stakeholders, including the
organs of state. It is undisputed that the B-BBEE code that is relevant to the RFB is
the Amended Tourism B-BBEE Sector Code (Tourism Code) published on 20
November 2015.36  Its provisions are therefore binding on ACSA.

35 The Broad-Based Black Economic Empowerment Act 53 of 2003 was amended by the Broad-Based
Black Empowerment Act Amendment Act (Act 46 of 2013).
36 Amended Tourism Code of Good Practice, GN 1149, 20 November 2015. Clause 9.3.5 includes car-
rental companies in the list of travel-related services to which the Tourism Code applies.

[35] Section 9(6) provides that the Minister may permit organs of state or public
entities to specify qualification criteria for procurement and other economic activities
which exceed those set in the B-BBEE codes. That provision thus gives recourse to
organs of state that are not content with the standards of empowerment and
measurement set out in the B-BBEE codes. Section 10(1), in peremptory terms,
requires every organ of state and public entity to apply the relevant B-BBEE code when
determining, inter alia, the qualification criteria for the issuing of licences, concessions
or other authorisations in respect of economic activity and in developing and
implementing a preferential procurement policy. Section 10(2)(a) permits the Minister
to consult with organs of state or public entities and to, pursuant to that consultation,
exempt that organ of state from the requirements of the B-BBEE code or allow
deviation from it. It is abundantly clear from all the provisions of the B-BBEE Act
canvassed above that that Act is aimed at achieving uniformity of standards and
measurement.

[36] The following are aspects that loudly attest to the binding nature of the B-BBEE
codes. First, s 10(3) enjoins enterprises within a sector for which a B-BBEE code has
been issued, to measure entities for compliance with the requirements of B-BBEE only
in accordance with that code; second, there is an injunction to provide particular,
objectively verifiable facts or circumstances before the Minister can grant an exemption
or deviation from the provisions of the applicable B-BBEE code; third, deviation
requires the Minister’s express consent, as such consent, once granted, must be
published in the Gazette.37

[37] Against the background of the mandatory provisions discussed above, it is plain
that it is not open to an organ of state, without the Minister’s consent, to design its own
custom-made set of qualification criteria that deviate from the provisions of the
applicable B-BBEE code.  It must be borne in mind that the B-BBEE Act has created a
platform for the solicitation of views from stakeholders and for these views to reach the
Minister. Clause 6.3 of the Sector Code records that ‘the participation of all
stakeholders was encouraged and obtained in the form of public hearings and written

37 Section 10(2)(a).

submissions from various constituencies’ which formed the basis of the Tourism Code.
Given that stakeholders are given an opportunity to give an input that informs the
issuance and amendment of the B-BBEE codes, the B-BBEE Act’s demand for all
stakeholders to follow an integrated, co-ordinated and uniform approach is to be
expected.

[38] For each organ of state to be allowed to, without the Minister’s input, design its
own unique criteria that deviate from those laid down in the sector codes would render
the uniformity sought to be achieved by the strategies envisaged in the B-BBEE Act,
nugatory. Moreover, that would allow organs of state to impermissibly arrogate to
themselves a power that has been given to the Minister. It is undisputed that ACSA at
no stage obtained the consent of the Minister to deviate from the provisions of the
Code. To argue that the B-BBEE Act and the Tourism Code do not preclude ACSA
from setting out the qualification criteria laid down in the impugned provisions of its
RFB is to seek to place form ahead of substance. In so far as ACSA, by virtue of the
qualification criteria set out 4.2.1 of the RFB, deviated from the Tourism Code without
the Minister’s consent, it purported to exercise a power for which it was not authorised,
thereby offending s 6(2)(a)(i) of PAJA.

[39] ACSA contended that since the generic B-BBEE code and the Tourism Code
applicable merely cover the mechanism of calculation of an entity’s B-BBEE status
without specifying qualification or pre-qualification criteria, ACSA could set qualification
criteria within the context of the government’s policy imperatives. By specifying the
qualification criteria set forth in the RFB, so it was contended, ACSA had not deviated
from the provisions any B-BBEE code. Despite ACSA’s protestation to the contrary, it
is clear from the text of clause 10.1.1-10.1.3 of the Tourism Code that those provisions
specify qualification criteria.

[40] The biggest challenge for ACSA is that despite the fact that clause 4.2.4.1 of
the RFB uses similar headings to the B-BBEE priority elements laid down in clause
10.1.1-10.1.3 of the Tourism Code, giving an impression that it is aligned to the
Tourism Code, it (clause 4.2.4.1 of the RFB) deviates from clause 10.1.1 by not
factoring in the variables relating to the subminimum requirements of the ownership
element. Clause 10.1.1 makes a cross-reference to ‘Time Based Graduation Factor

provided in Annexe TSC100 (E)’. The latter in turn prescribes a formula that must be
applied for purposes of allocating points for B-BBEE compliance. The upshot is that
not all the information that relates to an entity’s B-BBEE status is factored in at stage I
of the evaluation process. It is thus clear that clause 4.2.4.1 of the RFB deviates
materially from the provisions of the B-BBEE Act.

[41] The peremptory nature of the provisions of the B-BBEE Act has already been
stressed in the preceding paragraphs. It is clear that deviation from the B-BBEE codes
is permissible only in the circumscribed circumstances alluded to earlier in the
judgment. While it is rational to set B-BBEE criteria for purposes of promoting
transformation, the choice of the specific criteria must be informed by reason. ACSA
could have approached the Minister for purposes of obtaining his consent for
exemption, deviation or the implementation of criteria that exceed those enunciated in
the Tourism Code. It chose not to do so. Moreover, ACSA has not proffered any
plausible explanation for setting criteria that are out of sync with those already
prescribed in the B-BBEE codes. The ineluctable inference is that it set the impugned
qualification criteria arbitrarily. In so far as ACSA, by contending that it was not
precluded from setting its own criteria, might be obliquely suggesting that it is impliedly
authorised to impose its own criteria, there is nothing that suggests that it had implied
authority to do so.

[42] ACSA asserted in clause 4 of the RFB that the 50/50 price and B-BBEE
compliance ratio was in accordance with the Tourism Code. This assertion is
misleading as the Tourism Code does not prescribe the price and B-BBEE compliance
ratio at all. For that matter, even the generic B-BBEE Code does not do so. The only
instrument that specifically deals with the allocation of points in respect of price and
preference (price-preference ratio) is the PP Act. It is now convenient to consider
whether the RFB complies with the provisions of the PP Act. As stated before, Imperial
contended that clause 4 of the RFB contravenes the PP Act.  ACSA steadfastly
contended that the PP Act is not applicable to the RFB. I must therefore determine
whether the PP Act is applicable to the RFB.

[43] ACSA again relied on the distinction between ‘procurement’ and ‘provisioning’
as the basis for contending that the PP Act is not applicable. There is no need to

traverse that proposition again as I have already found that it has no merit. Another
submission made in support of ACSA’s contention that the PP Act is not applicable to
the RFB is this. A key element of the scheme of the PP Act is, in terms of s 2 of that
Act, for a tender to be awarded to the bidder who has offered the lowest price. This
key element is not capable of being applied to the RFB, given the nature of the contract
envisaged in the RFB. Accepting the lowest price for the kiosks and parking bays would
not be cost-effective and would simply be at odds with government purpose. During
the exchange with the bench, counsel for ACSA said that the PP Act was a ‘straitjacket’
type of legislation, and the fact that it failed to provide for provisioning meant that the
legislature had failed to enact legislation that covered the field of provisioning as
contemplated in the RFB. On this aspect, it bears mentioning that the papers make it
abundantly clear that Imperial’s reliance on s 217 of the Constitution was not on the
basis that it regards the PP Act as insufficient to fulfil the obligations set out in s 217(2)
of the Constitution.38 On the contrary, Imperial has invoked both the PP Act and the B-
BBEE Act as a basis for asserting its rights because it, correctly in my view, considers
those statutes as completely fulfilling the obligation set out in s 217(3) of the
Constitution.

[44] I turn now to consider the provisions of the PP Act. In doing so, a rider that must
be borne in mind is that s 3(2) of the B-BBEE Act makes it clear that in the event of
any conflict between the B-BBEE Act and any other law in force immediately prior to
the date of commencement of the B-BBEE Act, the B-BBEE Act trumps the PP Act on
any matter that is specifically dealt with in the B-BBEE Act. The PP Act was enacted
before the B-BBEE Act and will accordingly be trumped by the B-BBEE Act if it conflicts
with the B-BBEE Act on any matter that the B-BBEE Act caters for. It bears mentioning
that, before us, it was not argued that any of the provisions of the PP Act are in conflict
with the B-BBEE Act.

[45] The PP Act, like any other legislation, must be interpreted purposively. The long
title of that Act states that its enactment was intended to give effect to s 217(3) of the
Constitution by providing a framework for the implementation of the procurement policy

38 Minister of Health & another v New Clicks South Africa (Pty) Ltd & others [2005] ZACC 14; 2006 (2)
SA 311 (CC). My Vote Counts NPC v Speaker of the National Assembly & others [2015] ZACC 31; 2016
(1) SA 132 (CC).

contemplated in s 217(2) of the Constitution. A purposive interpretation dictates that
the PP Act be read in the context of s 217 of the Constitution. The constitutional
imperatives of a cost-effective procurement must therefore be considered. It is clear
that a transaction of the kind contemplated in the RFB seeks to elicit bids for leases at
the highest possible rental. This interpretation is consistent with various provisions of
the PFMA, which enjoin the accounting authorities of organs of state to exercise sound
management of revenue and expenditure, to efficiently manage, safeguard and
maintain their assets and liabilities and generally to ensure that the organs of state
receive value for money. It stands to reason that when the provisions of s 2(1)(c) and
(f) of the PP Act are applied to ACSA’s RFB, that admonition must be kept in mind.
The assertion that the application of the PP Act entails accepting the lowest price
offered by the bidders clearly fails to take all these considerations into account. It also
fails to take into account that the RFB set out the lowest price that ACSA would accept
for the bids.

[46] A reading of the recently amended Regulations made in terms of the PP Act
(PP Regulations), which came into force on 1 April 2017, makes it pertinently clear that
the amendment was aimed at aligning the PP Act with the B-BBEE Act. Regulation
6(9) and 7(9) of the PP Regulations serve as safeguards and ensure that even where
an organ of state is not expending money but acquiring revenue, it is not cornered into
accepting a price that is not market-related. They emphasise that where the price
offered by a tenderer scoring the highest points is not market-related, the organ of state
may not award the contract to that bidder and has the option of negotiating a market-
related price with the bidder who scored the second highest points. If that fails, then
the organ of state can negotiate with the bidder scoring the third highest points. If no
agreement can be reached with the latter, then the organ of state must cancel the
tender. Against all the safeguards mentioned above, including those provided by the
PFMA, ACSA’s contention that applying the PP Act to the RFB would be at odds with
government purpose is devoid of any merit.

[47] The qualification criteria pertaining to the scoring of points for price and
preference (B-BBEE compliance) are prescribed in the PP Act: there is an 80/2039
ratio, with 80 points being for price and 20 points for preference (B-BBEE compliance)
and a 90/1040 ratio, with 90 points being for price and 10 for preference. The 50/50
price and B-BBEE compliance ratio stipulated in the RFB therefore contravenes
regulations 3(b) and 4 of the PP Regulations that govern pre-qualification criteria.
These criteria are binding save only to the extent that they may be in conflict with the
provisions of the B-BBEE Act. ACSA has not alleged that there is such a conflict. From
my point of view, the B-BBEE Act and the PP Act read with its regulations are
complementary to each other. The criteria set out in the B-BBEE codes are to be taken
into consideration under the ‘preference’ heading in the price-preference ratio and as
part of the objective criteria alluded to in s 2(1)(f) of the PP Act.

[48] Section 2(1)(f) of PP Act provides that a tender must be awarded to a tenderer
who scored the highest points unless objective criteria justify that it be awarded to
another tenderer. Regulation 11(2) of the PP Act Regulations in turn provides that if an
organ of state intends to apply objective criteria in terms of s 2(1)(f) of the PP Act, it
‘must’ stipulate the objective criteria in the tender documents. The requirement for
objective criteria is in line with the transparency imperative that is espoused in s 217(1)
of the Constitution.

[49] Clause 1.7 of the RFB provides that ACSA may award the contract to a bidder
other than the highest scoring bidder when transformation imperatives allow for this.
With regard to what would constitute such transformation imperatives, clause 5.6 of
the RFB incorporates ACSA’s Transformation Policy, and indicates that the
transformation imperatives may be downloaded. However, ACSA’s Transformation
Policy gives no indication as to what transformation imperatives it will consider at the
final stage of the evaluation of the bids. In Trencon Construction (Pty) Limited v
Industrial Development Corporation of South Africa Limited & another,41 the

39 Reg 3(b) of the PP Regulations. The 80/20 preference point system is applicable for procurement of
goods and services with a rand value of between R30 000 and R50 million.
40 Reg 4 of the PP Regulations. The 90/10 preference point system is applicable for procurement of
goods and services with a rand value exceeding R50 million.
41 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited &
another [2015] ZACC 22; 2015 (5) SA 245 (CC) (Trencon) para 65.

Constitutional Court emphasised the mandatory nature of the requirement of objective
criteria or justifiable reasons for not awarding the tender to the bidder who scored the
highest points. Since ACSA’s transformation policy sheds no light on the imperatives
it will consider at stage 4, clause 1.7 falls foul of the provisions of s 2(1)(f) of the PP
Act and is therefore unlawful.

[50] ACSA contended that the vagueness of clause 1.7 in so far as it did not set out
the transformation imperatives was not fatal to the entire RFB and should not lead to
its setting aside. It reasoned that it could amend any terms that it considered vague, or
even cancel the bid should the need arise, as it had reserved to itself the right to do
so. Its willingness to amend the impugned criteria before the finalisation of the bid
process was sufficient to remedy any vagueness, so the argument went. This
contention does not hold water, as ACSA has not expressed an intention of amending
any of the terms of the RFB. Bidders are entitled to know the applicable transformation
imperatives at the time of bidding. Without ACSA’s undertaking to amend a specific
provision of the RFB, it is impossible to determine the impact or extent of any prejudice
that bidders may suffer as a result of the envisaged amendment. It must be borne in
mind that the RFB, by its nature, sets out the rules that govern the bid process.42 The
ex post facto changing of applicable rules simply goes against the tenets of the
principle of legality. In my view, the undue vagueness regarding ACSA’s transformation
imperatives rendered the procurement process unlawful.43

[51] The submission that the tender could be withdrawn or cancelled before the
awarding of the bid is equally without merit, for the regulations under the PP Act
stipulate circumscribed circumstances under which a tender can be lawfully withdrawn
or cancelled.44 Crucially, the Constitutional Court in Trencon,45 cautioned that the
applicable regulations under the PP Act constrain the discretion afforded to an organ
of state by the terms of the tender document, with the result that a tender can only be
cancelled if the grounds specified in the regulations are extant. ACSA has not averred
that any of the circumstances set out in the Regulations under PP Act are applicable.

42 See n 41 above, para 4.
43 Ibid para 88.
44 See Regulation 13 of the PP Regulations.
45 See n 39 above, para 68.

Conclusion
[52] Against the background of all the legislative provisions discussed above, it is
clear that ACSA’s preferential procurement policy as reflected in its RFB bears no
relation to the requirements of s 217 of the Constitution as well as the B-BBEE Act and
the PP Act, being the legislation enacted to fulfil the obligation imposed by s 217(3) of
the Constitution. ACSA has also failed to show that all the qualification criteria
embodied in the impugned provisions of the RFB are rationally connected to the
purpose for which they were intended. As the impugned provisions of the RFB have
materially tainted the decision to issue and publish the RFB, that decision is unlawful
both in terms of PAJA and the principle of legality. What remains is to determine a just
and equitable remedy.

Remedy
[53] The following dictum in Bengwenyama Minerals v Genorar Resources46 is
instructive:
‘It would be conducive to clarity, when making the choice of a just and equitable remedy in
terms of PAJA, to emphasize the fundamental constitutional importance of the principle of
legality, which requires 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 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.’

[54] It is trite that the remedy must be fair to those affected by it and yet vindicate
effectively the right violated. It must be just and equitable in the light of the facts, the
implicated constitutional principles, if any, and the controlling law.47 Having considered
all the circumstances of this case, I am satisfied that a remedy that is just and equitable
under the circumstances is to set aside ACSA’s decision to issue and publish the RFB.

46 Bengwenyama Minerals v Genorar Resources [2010] ZACC 26; 2011 (4) SA 113 (CC) para 84.
47 Steenkamp NO v Provincial Tender Board, Eastern Cape [2006] ZACC 16; 2007 (3) SA (CC) 121
paras 29-33.

The High Court correctly found that the RFB is unlawful and invalid and thus correctly
set it aside. It follows that the appeal has to fail. With regard to costs, there is no
justification for departing from the principle that costs must follow the result. Counsel
did not attempt to persuade us otherwise.

[55] In the result, I would therefore make the following order:
The appeal is dismissed with costs, including the costs occasioned by the employment
of two counsel.

___________________
M B Molemela
Judge of Appeal

Ponnan JA (Cachalia and Wallis JJA concurring):

[56] I agree with my colleague Molemela JA that this appeal against a judgment of
Coppin J, which reviewed, set aside and declared unconstitutional the decision of the
appellant, Airports Company South Africa SOC Ltd (ACSA), to issue a request for bids
(RFB) for the awarding of various car rental concessions at airports, must fail. I feel
persuaded to write separately because both my approach and the line that I take in
endeavouring to resolve the appeal are, in their emphasis, different to that preferred
by my learned colleague.

[57] The RFB, which was published by ACSA on 5 September 2017, established car
rental opportunities for the letting of over 70 kiosks for a period of ten years. Bids were
invited for kiosks and parking bays at airports nationally. According to the RFB, bids
were to be evaluated in accordance with a four-staged approach. The first was the pre-
qualification stage, which comprised an initial assessment of each bid and an audit of
all mandatory administrative requirements. The second was the technical evaluation
stage. The third was the stage at which price was assessed and categories of
preference were considered. And, the fourth stage implicated transformation
imperatives.

[58] The first respondent, Imperial Group Ltd (Imperial), is a wholly owned subsidiary
of Imperial Holdings Limited, a JSE listed company. Imperial’s car rental division has
operated at ACSA’s airports for more than 32 years. It owns and operates two car
rental divisions: Europcar, a premium brand, operated pursuant to a franchise
agreement with a French company, Europcar International and Tempest, a low-cost
brand. In terms of the RFB, Imperial had to bid anew to retain its presence at the
airports.

[59] Imperial formed the view that, if implemented, the RFB would be calamitous for
its business. It accordingly approached the high court for relief in two parts. Under Part
A, Imperial successfully obtained an order compelling ACSA to disclose the identities
of all of the bidders, who were joined as the second to twelfth respondents.48 Under
Part B, Imperial sought to review and set aside the RFB. Only ACSA, who was cited
as the first respondent, opposed the application.

[60] In a judgment handed down in July 2018, the high court upheld the application
and set aside the RFB. It did so on five grounds.49 The first was that the RFB is in
breach of s 217 of the Constitution and the laws enacted thereunder, namely the
Preferential Procurement Policy Framework Act 5 of 2000 (the PP Act) and the
Preferential Procurement Regulations (the PP Regulations)50 (the Procurement Laws).

48 The second to twelfth respondents respectively are:
Woodford Exclusive Rentals Close Corporation, AAD Car and Truck Rental (Pty) Ltd t/a Cabs Car and
Truck Hire, Unitrans Automotive (Pty) Ltd trading through its division Hertz Rent a Car, iDrive Car Hire
(Pty) Ltd t/a Value Care Hire, CMH Car Hire (Pty) Ltd t/a First Car Rental, McCarthy Ltd trading through
its division Bidvest Car Rental, Springs Car Wholesalers (Pty) Ltd t/a Dollar Thrifty Car Rental,
Barloworld South Africa (Pty) Ltd trading through its division Rent a Car t/a Avis Budget, LMR 707 Car
Rental (Pty) Ltd, Afrirent (Pty) Ltd and Capital Car Hire (Pty) Ltd.
49 The high court approached the matter thus:
‘Counsel for Imperial contended that even if certain of the issues, including the issue of the applicability
of section 217 of the Constitution were decisive of the appeal, this court should, nevertheless, deal with
the other challenges. In support of that approach reference was made to what was held in, inter alia, S
v Jordan and Others. In essence, it has been held there that where a provision, or decision, is attacked
on multiple grounds and one of the grounds is considered decisive of the matter, the other grounds
should, nevertheless, be dealt with to facilitate the proper hearing of an appeal to a higher court, if any.
I propose to follow that approach and shall deal with the issues in turn after briefly sketching the
background to Imperial’s challenges.’
See S v Jordan & others (Sex Workers Education and Advocacy Task Force and others as amici curiae)
[2002] ZACC 22; 2002 (6) SA 642 (CC) para 21.
50 Preferential Procurement Regulations, 2017, gazetted under the Preferential Procurement Policy
Framework Act 5 of 2000 on 20 January 2017, effective from 1 April 2017. See GN R32 in GG 40553
of 20-01-2017.

The second was that the RFB is in breach of the laws enacted to promote black
economic empowerment (BEE), namely the Broad-Based Black Economic
Empowerment Act 53 of 2003 (the BEE Act) and the Tourism Sector Code of Good
Practice published thereunder (the Tourism Code) (the BEE Laws). The third was that
the RFB was produced by an arbitrary and irrational process, inasmuch as it was not
underpinned by any research, consultation, advice or input from interested parties. The
fourth was that the RFB was in part incurably vague and devoid of any meaningful
content. The fifth was that ACSA had made the RFB under a material mistake of law.
The appeal is with the leave of the high court.

[61] Imperial challenged three categories of provisions in the RFB. First, it attacked
the pre-qualification criteria set out in clause 4.2.4 of the RFB.51 It contended that the
criteria, which included that large entities such as it had to be at least 30% black owned
and at least 15% black women owned, were unlawful. In terms of the RFB, a bidder
that did not meet all of the pre-qualification criteria would immediately be disqualified.
As Imperial was unable to meet these criteria, its bid had to be disqualified. Second,
Imperial attacked the method of assessment of the bids as set out in clause 4.2 of the

51 Clause 4.2.4 provides:
‘The following pre-qualification criteria will be included as part of this bid:
4.2.4.1 Large Entities
Transformation Element
Criteria

Ownership

At least 30% of exercisable voting rights in the
enterprise in the hands of black people

At least 15% of exercisable voting rights in the
enterprise in the hands of black women

Enterprise and Supplier Development

(car rental sector purchases vehicles for foreign
owned
OEM’s,
therefore
car
purchases
themselves is excluded from calculation)

At least 40% procurement spend (excluding
procurement of motor vehicles) from suppliers
that are at least 51% black owned

At least 12% procurement spend (excluding
procurement of motor vehicles) from suppliers
that are at least 30% black women owned

Management Control

(aligned to ownership)

At least 30% Black executive management as a
percentage of all executive management within
the car rental division of the entity

At
least
15%
black
female
executive
management as a percentage of all executive
management within the car rental division of the
entity

At least 2% black employees with disabilities as
a percentage of all employees
‘

RFB.52 It contended that the method of assessment, in terms of which 50 points were
awarded for price and 50 points for BEE status, was unlawful. Third, Imperial attacked
the transformation criteria provisions of the RFB, which allowed ACSA to apply the
single opportunity rule’ in awarding the tender as set out in clauses 1.753 and 5.654 of
the RFB.

[62] Imperial’s core attack is that the RFB is subject to and in breach of s 217 of the
Constitution. ACSA contends that s 217 of the Constitution does not apply to the RFB,
inasmuch as ACSA is granting concessions to bidders who are paying for such
concessions. Accordingly, ACSA is not engaging in ‘procurement’ or ‘contracting for
goods and services’. In any event, so the contention goes, even if s 217 does apply to
the RFB, then the Procurement Laws are patently inapplicable. They, in their terms, so
the contention proceeds, can have no application to a situation such as the present.
Once this is so, according to ACSA, Imperial would then be left with impermissibly
challenging the RFB directly under the Constitution.

52 In terms of Clause 4.2:
‘Car rental companies fall within the travel and related services within the Amended Tourism B-BBEE
Sector Code, which came into effect on 20 November 2015.
The intention is to allocate the 50 points for B-BBEE in accordance with the Amended Tourism B-BBEE
Sector Code as detailed below. Bids will be scored on a 50/50 basis with 50 points being allocated to
Price and the remaining 50 points awarded for B-BBBEE.’
53 Clause 1.7, headed ‘Disclaimers’, provides as follows:
‘It must be noted that ACSA may:
a)  Award the whole or a part of this bid;
b)  Split the award of this bid;
c)  Negotiate with all or some of the shortlisted Bidders;
d)  Award the bid to a Bidder other than the highest scoring Bidder where transformation imperatives
(Point 5.6) allow;
e)  Cancel this bid;
f)   ACSA does not take any responsibility for expenses or loss, which may be incurred by any Bidder in
preparation of this bid.’
54 Clause 5.6 provides:
‘Transformation Imperatives
5.6.1  Amongst other criteria set out in this bid document, ACSA has set out Transformation imperatives
for all the Car Rental Opportunities in this bid in line with ACSA’s Transformation Policy. ACSA’s
Transformation imperatives can be downloaded at www.airports.co.za.
5.6.2  Bidders must first meet the Mandatory Administrative Requirements and Prequalification criteria
(Stage 1), minimum Functionality threshold (Stage 2) and have been scored for the 50/50 Preferential
points for Price and B-BBEE (Stage 3).
5.6.3  If a bidder has more than 1 kiosk opportunity post bid award at an airport, the bid will be awarded
to the next highest qualifying bidder;
5.6.4  Should it be that there are no other qualifying bidders who have 1 kiosk opportunity at the airport,
that opportunity may be awarded to bidders who have 1 or more opportunities.
5.6.5  Should there be unmatched kiosks and qualifying bidders, ACSA reserves the right to negotiate
with such bidders on agreed terms and conditions.’

[63] The language of s 217(1) is clear.55 It applies whenever an organ of state
‘contracts for goods or services’. These words are plain and unqualified. They make it
clear that the section applies whenever an organ of state contracts for goods or
services, whether for itself or for somebody else. ACSA’s restrictive reading thus finds
no support in the plain language of the section. ACSA suggests that the ambit of the
section is limited by the reference to the word ‘procurement’ in the heading and in s
217(2). The ordinary meaning of ‘procure’ is ‘obtain’.56 In any event, s 217(1) spells out
what the section means when it speaks of ‘procurement’, which is ‘to contract for goods
or services’. It thus places the meaning of the word beyond doubt. ACSA suggests that
the RFB is not directed at procurement but only at contracts for the lease of premises
to car rental companies, who provide their services directly to the public.  But, that is
to elevate form above substance. The substance of the transaction is that ACSA
contracts with car rental companies to provide a public service at its airports.57  That is
how ACSA itself described the transaction in the RFB.58

55 Section 217 is set out in paragraph 19 of Molemela JA’s judgment.
56 A Stevenson & M Waite (eds) Concise Oxford English Dictionary 12 ed (2011) at 1144.  According to
P B Gove (ed) Webster's Third New International Dictionary at 1809 ‘procure’ means ‘to obtain’. And, in
B A Garner (ed) Black's Law Dictionary 9 ed at 1327 it is defined as ‘the act of getting or obtaining
something’.
57 In Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books [2015]
ZAGPJHC 154; 2016 (1) SA 473 (GJ), ACSA sought to escape its contract with a bookstore at one of
its airports. Contrary to its stance in this matter, it there contended that the contract was subject to 217
of the Constitution. The high court held (para 63):
‘Whilst the letting of the shop involves the disposal by way of letting of a state asset, the effect of the
contract is to provide a service for those members of the public making use of the departure area at the
airport. Absent a private bookstore operator like Exclusive Books, ACSA would be expected to provide
a similar service itself. In my view that falls within the concept of “contracting for goods and services”,
particularly on the purposive approach that I am bound to adopt in the interpretation of the Constitution.’
In Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books [2016] ZASCA
129; 2017 (3) SA 128 (SCA), this court upheld the high court’s judgment. It noted (para 12) that ACSA
contended that its lease with the bookshop was subject to 217 of the Constitution but did not find it
necessary to decide whether it was so.
58 This is how ACSA described the transaction in the RFB:
‘3.1  . . . ACSA is focused on creating and operating world-class airports measuring up to international
standards. This is evidenced by ACSA’s participation in selected airport management . . .
3.2  ACSA’s purpose is to create a world-class car rental environment providing the highest level of
service and convenience for car rental users.
. . . .
3.7  Aligned to the company’s strategy of creating stakeholder value and increasing revenue generation,
the car rental strategy is to continue to earn and grow car rental revenues by optimally locating car rental
facilities on ACSA airports. In line with this, we would like to ensure the car rental at the airports remain
a dominant intermodal mode of transport from air to road (and vice versa), maintaining ˃60% of car
rental transactions in SA.
Attract Best Operators and Brands. Design world class facilities. Structure optimum win-win contracts.’

[64] The general rule under s 217 of the Constitution is that all public procurement
must be effected in accordance with a system that is fair, equitable, transparent,
competitive and cost-effective. The only exception to that general rule is that envisaged
by ss 217(2) and (3). Section 217(2) allows organs of state to implement preferential
procurement policies, that is, policies that provide for categories of preference in the
allocation of contracts and the protection and advancement of people disadvantaged
by unfair discrimination. Express provision to permit this needed to be included in the
Constitution in order for public procurement to be an instrument of transformation and
to prevent that from being stultified by appeals to the guarantee of equality and non-
discrimination in s 9 of the Constitution. The freedom conferred on organs of state to
implement preferential procurement policies is however circumscribed by s 217(3),
which states that national legislation must prescribe a framework within which those
preferential procurement policies must be implemented. The clear implication therefore
is that preferential procurement policies may only be implemented within a framework
prescribed by national legislation. It follows that the only escape for ACSA from the
reach of s 217(1) is if it is able to bring itself within ss (2) and (3).

[65] The PP Act is the national legislation envisaged by s 217(3). In terms of s 2(1)
of that Act, an organ of state must determine and implement its preferential
procurement policy within the framework prescribed by the section. Section 2(1) of the
PP Act reads in relevant part as follows:
‘An organ of state must determine its preferential procurement policy and implement it within
the following framework:
(a)  A preference point system must be followed;
(b) (i) for contracts with a Rand value above a prescribed amount a maximum of 10 points may
be allocated for specific goals as contemplated in paragraph (d) provided that the lowest
acceptable tender scores 90 points for price;
(ii)  for contracts with a Rand value equal to or below a prescribed amount a maximum of 20
points may be allocated for specific goals as contemplated in paragraph (d) provided that the
lowest acceptable tender scores 80 points for price;
(c)  any other acceptable tenders which are higher in price must score fewer points, on a pro
rata basis, calculated on their tender prices in relation to the lowest acceptable tender, in
accordance with a prescribed formula;
(d)  the specific goals may include—

(i)  contracting with persons, or categories of persons, historically disadvantaged by unfair
discrimination on the basis of race, gender or disability;
. . . .
(e)  any specific goal for which a point may be awarded, must be clearly specified in the
invitation to submit a tenderer;
(f)  the contract must be awarded to the tenderer who scores the highest points, unless
objective criteria in addition to those contemplated in paragraphs (d) and (e) justify the award
to another tenderer . . . .’

[66] This provision gives effect to the restriction imposed by s 217(3) of the
Constitution that permits a preferential procurement policy but only within a framework
prescribed by national legislation. In terms of the framework, a preferential
procurement policy may only allocate 10 or 20 preference points out of a total of 100
to transformation goals. It may not afford any greater weight to transformation
objectives. Any goal for which a point may be awarded, must be clearly specified in the
invitation to tender. It is so that s 2 clearly contemplates a conventional transaction by
which an organ of state purchases goods or services at the lowest possible price. It
accordingly allocates higher scores to lower prices. A transaction of the kind
contemplated by the RFB, on the other hand, seeks to elicit bids for leases at the
highest possible rental.

[67] Does it mean, as ACSA argues, that such a transaction is not subject to s 2? I
think not. Section 2 must be read and understood to be mutatis mutandis applicable to
such a transaction. It accordingly allows a scoring system which allocates more points
for higher rentals. The principle remains the same. As a general rule the words of a
statute must be given their ordinary, grammatical meaning in the context in which they
appear, unless to do so ‘would lead to absurdity so glaring that it could never have
been contemplated by the legislature or where it would lead to a result contrary to the
intention of the legislature as shown by the context or by such other considerations as
the Court is justified in taking into account’ (Venter v R).59 In that event the court may
depart from the ordinary effect of the words to the extent necessary to remove the
absurdity and give effect to the true intention of the legislature.

59 Venter v Rex 1907 TS 910 at 915.

[68] The principle laid down in Venter’s case has generally been used to ‘cut down’
the wide meaning of the words employed by the Legislature. However, as it was put
by Centlivres CJ in Barkett v SA Mutual Trust & Assurance Co Ltd:60
‘But there may, it seems, be exceptional cases where it is permissible for a court of law to
expand the literal meaning of words used by the Legislature. See Halsbury (2 ed., Vol. 31,
para. 635), where reference is made to the cases of Hewett v Hattersley, 1912 (3) K.B. 35 and
Swan v Pure Ice Co. Ltd., 1935 (2) K.B. 265.’
In Swan v Pure Ice Co Ltd,61 Roper LJ observed:
‘But they were, in my judgment, amply justified by the authorities, which are summed up in
Maxwell on the Interpretation of Statutes, 7th ed., p. 217, as follows:— “They (i.e., the
authorities) would seem rather to establish that the judicial interpreter may deal with careless
and inaccurate words and phrases in the same spirit as a critic deals with an obscure or corrupt
text, when satisfied, on solid grounds, from the context or history of the enactment, or from the
injustice, inconvenience, or absurdity of the consequences to which it would lead, that the
language thus treated does not really express the intention and that his amendment probably
does.”’

[69] In Summit Industrial Corporation v Claimants Against the Fund Comprising the
Proceeds of the Sale of the mv ‘Jade Transporter’,62 Corbett JA pointed out that our
courts have remarked in various judgments that ‘it is dangerous to speculate on the
intention of the Legislature’ and ‘the Court should be cautious about thus departing
from the literal meaning of the words of a statute. . . . It should only do so where the
contrary legislative intent is clear and indubitable’. Here, I think, there is such intent.
The legislation was enacted for the benefit of the national fiscus. In respect of what I
have described as the conventional transaction, an organ of state securing goods and
services at the lowest possible price would plainly operate for the benefit of the fiscus.
Quite the contrary for a non-conventional transaction such as the present. In this
instance transacting at the highest price would undoubtedly be to the benefit of the
fiscus. There is no sense in the legislation only applying to the conventional category
of transaction. It thus seems to me inconceivable that the legislature could have
intended such a result. In that regard the legislation does not say what was obviously

60 Barkett v SA Mutual Trust & Assurance Co Ltd 1951 (2) SA 353 (A) at 362H-363D.
61 Swan v Pure Ice Co Ltd 1935 (2) KB 265 at 276.
62 Summit Industrial Corporation v Claimants Against the Fund Comprising the Proceeds of the Sale of
the mv ‘Jade Transporter’ 1987 (2) SA 583 (A) at 596I-597B.

intended to be said. I am thus satisfied upon the construction of the provision and upon
authority, as also the purpose of the legislation and the absurdity of the consequences
to which a literal interpretation would lead, that the language of s 2 does not really
express the intention of the Legislature. Construing the provision literally would place
transactions of the kind encountered here beyond the reach of the Constitution and the
Procurement Laws. That could plainly not have been what the Legislature intended.

[70] Indeed, it has been recognised that ‘[w]here the main object and intention of a
statute are clear from the title, preamble, or otherwise, it should not be reduced to a
nullity by a literal following of language, which may be due to want of skill or knowledge
on the part of a draftsman, unless such language is intractable’.63 Halsbury’s Laws of
England points out that:
‘Although, as a rule, it is not permissible to supply omissions in a statute, even though they are
evidently unintentional, it may be possible in certain circumstances:—
(1)
To treat as rectified obvious misprints;
(2)
To reject words or phrases as surplusage;
(3)
To supply omitted words or expressions;
(4)
To substitute one word for another;
(5)
To read negative words as affirmative, or affirmative as negative; disjunctive as
conjunctive, and vice versa;
(6)
To put upon words a sense possible but not usually attributable to them;
(7)
To expand their literal meaning. (Footnotes omitted.)’64
After all, a court should presume that the legislature intended common sense to be
used in construing an enactment.65

[71] Interpretation is a far from academic exercise. ‘It is directed to a particular
statute, enacted at a particular time, to address (almost invariably) a particular problem
or mischief’ (see R (Quintavalle) v Secretary of State for Health).66 The pendulum has
swung towards purposive methods of construction.67 In Quintavalle, Lord Bingham of
Cornhill stated the position as follows:

63 Halsbury’s Laws of England 2 ed., (1938) Vol. 31, para 635.
64 Halsbury’s Laws of England 2 ed., (1938) Vol. 31, para 635.
65 Halsbury’s Laws of England 5 ed., (2018) Vol. 96, para 709.
66 R (Quintavalle) v Secretary of State for Health [2003] 2 AC 687 para 17.
67 Ibid para 21.

‘Such is the skill of parliamentary draftsmen that most statutory enactments are expressed in
language which is clear and unambiguous and gives rise to no serious controversy. But these
are not the provisions which reach the courts, or at any rate the appellate courts. Where parties
expend substantial resources arguing about the effect of a statutory provision it is usually
because the provision is, or is said to be, capable of bearing two or more different meanings,
or to be of doubtful application to the particular case which has now arisen, perhaps because
the statutory language is said to be inapt to apply to it, sometimes because the situation which
has arisen is one which the draftsman could not have foreseen and for which he has
accordingly made no express provision.
The basic task of the court is to ascertain and give effect to the true meaning of what Parliament
has said in the enactment to be construed. But that is not to say that attention should be
confined and a literal interpretation given to the particular provisions which give rise to difficulty.
Such an approach not only encourages immense prolixity in drafting, since the draftsman will
feel obliged to provide expressly for every contingency which may possibly arise. It may also
(under the banner of loyalty to the will of Parliament) lead to the frustration of that will, because
undue concentration on the minutiae of the enactment may lead the court to neglect the
purpose which Parliament intended to achieve when it enacted the statute. Every statute other
than a pure consolidating statute is, after all, enacted to make some change, or address some
problem, or remove some blemish, or effect some improvement in the national life. The court's
task, within the permissible bounds of interpretation, is to give effect to Parliament's purpose.
So the controversial provisions should be read in the context of the statute as a whole, and the
statute as a whole should be read in the historical context of the situation which led to its
enactment.’68

[72] In R v Z,69 Lord Woolf observed: [t]he proper approach, in my view, has been
admirably expressed in terms upon which I could not improve by Lord Bingham of
Cornhill in . . . Quintavalle. As Lord Carswell put it in that matter:
‘If the words of a statutory provision, when construed in a literalist fashion, produce a meaning
which is manifestly contrary to the intention which one may readily impute to Parliament, when
having regard to the historical context and the mischief, then it is not merely legitimate but
desirable that they should be construed in the light of the purpose of the legislature in enacting
the provision . . . .’70

68 Ibid paras 7 and 8.
69 R v Z [2005] UKHL 35 para 36.
70 Ibid para 49.

When this is done there can be no doubt that any other interpretation to that postulated
by me in this case would be absurd.

[73] It follows that the high court’s core conclusion that the RFB breached s 217 of
the Constitution and the PP Act cannot be faulted. Given ACSA’s approach that s 217
of the Constitution and the PP Act were simply inapplicable to the RFB, that conclusion
is dispositive of the appeal against it. I thus deem it unnecessary to consider the
remaining grounds that were also held to be decisive against ACSA. In the result, like
Molemela JA, I too would dismiss the appeal with costs, including those occasioned
by the employment of two counsel.

Order

[74] The appeal is dismissed with costs, including the costs occasioned by the
employment of two counsel.

______________
V M Ponnan
Judge of Appeal

APPEARANCES:
For the Appellant:
S Budlender SC (with M Musandiwa)

Instructed by:

Edward Nathan Sonnenbergs Africa, Sandton

Honey Attorneys Inc., Bloemfontein

For the First Respondent:
W Trengove SC (with him D Watson)
Instructed by:

Tugendhaft Wapnick Banchetti & Partners,
Sandown

McIntyre Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA
MEDIA SUMMARY - JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

Airports Company South Africa SOC Ltd v Imperial Group Ltd & Others (1306/18) [2020] ZASCA 02 (31
January 2020)
From:

The Registrar, Supreme Court of Appeal
Date:

31 January 2020
Status:
Immediate
Please note that the media summary is for the benefit of the media and does not form part of the
judgment of the Supreme Court of Appeal.
Today the Supreme Court of Appeal (SCA) dismissed the appeal by the appellant with costs including
the costs occasioned by the employment of two counsel.The appellant is Airports Company South
Africa Soc Ltd (ACSA), a public company created in accordance with the provisions of s 2 of the
Airports Company Act 44 of 1993 (ACSA Act). On 5 September 2017, ACSA published a Request for
Bids (RFB) in terms of which members of the public were invited to submit bids for the hiring of car
rental kiosks and parking bays operated by ACSA for a period of ten years. The cited respondents
submitted bids. The first respondent, Imperial, launched an urgent application in the Gauteng Division
of the High Court, Johannesburg (High Court). In Part B thereof, which is the subject of this appeal,
the first respondent sought an order reviewing and setting aside the decision to issue and publish the
RFB on the basis that it was unlawfull, unreasonable, inconsistent with the constitution and invalid. In
a judgment handed down in July 2018, the High Court held that the RFB and the decision to publish it
were unlawful, inconsistent with the Constitution and the legislative framework envisaged therein
invalid. It consequently reviewed and set aside the RFB and the decision to publish it. Aggrieved by
that order, ACSA successfully applied to the High Court for leave to appeal to the SCA.
Two main issues arose for consideration: first, the interpretation and applicability of s 217 of the
Constitution together with the relevant statutes falling under its legislative scheme; and, second, the
rationality of several provisions of the RFB (impugned provisions) as well as the process leading to
the decision to issue and publish the RFB. Imperial contended that that decision amounted to the
exercise of a public power reviewable either in terms of the Promotion of Access to Justice Act 3 of
2000 (PAJA) or the principle of legality, was irrational and contravened the provisions of s 217 of the
Constitution and the statutes envisaged in that section. Although ACSA acknowledged that PAJA
applies to any tender award, it maintained that PAJA was not applicable to the RFB.
The SCA held that the issuance and publication of ACSA’s RFB constitute an administrative action
that can be challenged on review under PAJA. Furthermore, it was emphasised that given the
automatic disqualification of Imperial at the first hurdle of the evaluation process, that disqualification
had an external effect and adversely affected Imperial’s rights.

In considering the issue of the applicability of s 217 of the Constitution to the RFB, the SCA pointed
out that s 217 does not restrict the means by which goods and services are acquired. It found that
what determines whether a transaction amounts to procurement within the contemplation of s 217 of
the Constitution, is the true nature of the entire transaction (the real substance) and not the form or
label attached thereto. Section 217(2) allows organs of state to implement preferential procurement
policies, that is, policies that provide for categories of preference in the allocation of contracts and the
protection and advancement of people disadvantaged by unfair discrimination. However, the freedom
conferred on organs of state to implement preferential procurement policies is, circumscribed by s
217(3). The clear implication, therefore, is that preferential procurement policies may only be
implemented within a framework prescribed by national legislation. The SCA found that s 217 of the
Constitution was applicable to the RFB and ACSA’s only escape from the reach of s 217(1) is if it is
able to bring itself within ss (2) and (3). In relation to the applicability of the Preferential Procurement
Policy Framework Act 5 of 2000 (PP Act), the SCA stated that it was one of the statutes envisaged in
s 217(3) of the Constitution. It found that s 2 thereof clearly contemplates a conventional transaction
by which an organ of state purchases goods or services at the lowest possible price. It found that in
the context of this matter, s 2 must be read and understood to be allowing a scoring system which
allocates more points for higher rentals. It held that all goals for which a point may be awarded must
be clearly specified in the invitation to tender. The SCA unanimously found that the preferential
procurement policy reflected in ACSA’s RFB breached s 217 of the Constitution and the provisions of
the PP Act. Ponnan JA (Cachalia and Wallis JJA concurring) held that, given ACSA’s approach that s
217 of the Constitution and the PP Act were simply inapplicable to the RFB, the SCA’s conclusion that
the RFB breached s 217 of the Constitution and the PP Act was dispositive of the appeal. They
therefore deemed it unnecessary to consider the remaining grounds of the appeal.
In a separate judgment, Molemela JA (Tshiqi JA concurring), acceding to the express request of the
parties, considered the other grounds of appeal. Regarding the applicability of the Broad-based Black
Economic Empowerment Act 53 of 2003 (B-BBBEE Act), they held that it, like the PP Act, constituted
national legislation that was enacted to fulfil the obligation imposed by s 217(3) of the Constitution.
Section 9(1) of the B-BBEE Act allows the Minister to publish codes of good practice on black
economic empowerment.  Those codes are expressly binding on public entities and organs of state,
which include ACSA. Deviations from that legislation and the applicable codes of good practice are
allowed, but only if ministerial consent has been obtained. In this matter, it was common cause that
the B-BBEEA and the Tourism Code are applicable to the RFB. ACSA was therefore obliged to
comply with the provisions of the B-BBEEA and the Tourism Code. Although ACSA claimed that its
RFB was in compliance with the B-BBEEA, the separate judgment pointed out several provisions
thereof which contravened the stipulations of that Act. It found that ACSA had failed to show that the
qualification criteria embodied in the impugned provisions of the RFB are rationally connected to the
purpose for which they were intended. It accordingly found that the impugned provisions of the RFB
had materially tainted the decision to issue and publish the RFB, thus rendering that decision unlawful
both in terms of PAJA and the principle of legality.