THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

JUDGMENT

Case number: 092/08
No precedential significance
In the matter between:

RMR COMMODITY ENTERPRISE CC
t/a KRASS BLANKETS

APPELLANT

and

THE CHAIRMAN OF THE BID

ADJUDICATION COMMITTEE

FIRST RESPONDENT

AFRICHOICE TENDERS CC

SECOND RESPONDENT

THE MINISTER OF FINANCE

THIRD RESPONDENT

THE MINISTER OF CORRECTIONAL

SERVICES

FOURTH RESPONDENT

THE MINISTER OF SAFETY AND

SECURITY

FIFTH RESPONDENT

THE GOVERNMENT OF THE

REPUBLIC OF SOUTH AFRICA
SIXTH RESPONDENT

Neutral citation:
RMR Commodity Enterprise v The Chairman: Bid
Adjudication Committee (092/08) [2009] ZASCA 2 (20
February 2009)

CORAM:

Harms DP, Brand et Lewis JJA
HEARD:

20 February 2009
DELIVERED:
20 February 2009
CORRECTED:

SUMMARY:
Review of tender award – contract period of tender lapsed prior
to hearing of appeal – no substantial points of law or matters of
substance raised – appeal dismissed by reason of mootness
under s 21 A(1) and (3) of the Supreme Court Act 59 of 1959.

ORDER

On appeal from:

High Court, Durban

(Hugo J sitting as court of first instance)
1.
The appeal dismissed with costs, including the costs of two counsel
where employed.

Harms DP, Lewis JA concurred.

JUDGMENT

BRAND JA

[1] During October 2006 the National Treasury invited tenders for the supply
of over 183 000 blankets to the Department of Correctional Services and the
South African Police Service. Among those who submitted tenders were the
appellant ('RMR') and the second respondent, Africhoice Tenders CC
('Africhoice'). The tenders were submitted to a bid evaluation committee ('the
Evaluation Committee') which was obliged to make recommendations to a
committee under the chairmanship of the first respondent ('the Adjudication
Committee') on the award of the tender. Both these committees were
established under the auspices of the National Treasury, pursuant to the
provisions of the Public Finance Management Act 1 of 1999 and the regulations
promulgated under that Act.

[2] RMR tendered R108.30 per blanket, which was R3.65 per blanket less
than the price tendered by Africhoice. Moreover, RMR's bid also obtained the
highest number of preference points for equity ownership by historically
disadvantaged individuals, as envisaged by the provisions of the Preferential

Procurement Policy Framework Act 5 of 2000. In accordance with s 2(1)(f) of
the Act, clause 2.1(b) of the tender invitation provided that:
'a contract may, on reasonable and justifiable grounds, be awarded to a bid that did
not score the highest number of points.'
Relying on this exception to the rule, the Evaluation Committee recommended
that the contract be awarded to Africhoice and not to RMR. The Adjudication
Committee decided to endorse this recommendation. On 12 July 2007 the
National Treasury thus published on its website that the contract had been
awarded to Africhoice. This was relatively short notice, since the contract period
was destined to commence on 1 August 2007 and to endure until 31 March
2008.

[3] When RMR heard of these developments, it launched an urgent
application in the Durban High Court against the first two respondents as well
as the various Government Departments involved. The main relief sought in the
application was for an order that the Adjudication Committee's decision to
award the tender to Africhoice be reviewed and set aside. As an adjunct to the
main relief, RMR sought an interim interdict to the effect that, pending the
finalisation of the review application, the Department of Correctional Services
and the South African Police Service be restrained from placing any orders for
blankets under the contract with Africhoice. In motivating the application for the
interim interdict, RMR pointed out that the contract period was due to terminate
on 30 March 2008 and that the setting aside of the award after that date would
be of no consequence.

[4] On 17 August 2007 Rowan AJ granted the interim interdict sought,
pending the outcome of the review application, which he scheduled to be heard
by himself on 2 October 2007. As it happened, however, and for reasons no
longer relevant, the matter was heard in November 2007 by Hugo J who
dismissed the review application with costs. This, of course, also spelt the end
of the interim interdict. The appeal against that order is with the leave of the
court a quo.

[5] Only four of the respondents opposed the appeal. The others abided the
decision of this court. The first, third and fourth respondents, on the one hand,
and the second respondent, on the other, were represented by different
counsel. Yet, they all raised the preliminary issue that the appeal is moot in that
its outcome will have no practical impact on the parties, or, for that matter, on
anyone else.

[6] The factual basis for the argument is, of course, that the period of the
contract awarded to Africhoice terminated on 31 March 2008. As rightly pointed
out by the respondents, the relief claimed by the appellant in the court a quo
was that the award of the contract to Africhoice to be set aside and that it be
awarded to the appellant. But since the contract period has come and gone, so
the respondents argued, an award of that contract would be of no use to the
appellant or anybody else.

[7] The legal basis for the respondents' argument is to be found in s 21 A(1)
and (3) of the Supreme Court Act 59 of 1959. It provides:
'(1)
When at the hearing of any civil appeal to the [Supreme Court of Appeal] or
any Provincial or Local Division of the [High] Court the issues are of such a nature that
the judgment or order sought will have no practical effect or result, the appeal may be
dismissed on this ground alone.
. . .
(3)
Save under exceptional circumstances, the question whether the judgment or
order would have no practical effect or result, is to be determined without reference to
consideration of costs.'

[8] RMR's first answer was that a judgment in this appeal would indeed
have a practical effect. In motivating this answer RMR referred to its
unsuccessful tenders for the supply of blankets to the State in three preceding
years and its pending litigation with the National Treasury arising out of these
unsuccessful tenders. In this light, so RMR contended, a definitive decision by
this court on the matters in issue, would serve to properly inform and guide the
Bid Adjudication Committee and the officials of the National Treasury in their

handling of the appellant's future tenders, and thus avoid even further litigation
in years to come.

[9] The problem I have with this argument is that although it sounds correct
in the abstract, it is devoid of any factual foundation. The issues in the appeal
are inextricably bound to the review grounds relied upon by the appellant. Most
prominent amongst these is an alleged failure by the Adjudication Committee to
comply with the audi alteram partem principle ('the audi principle'). However, as
has been pointed out time and again by this court and others, there is no single
set of principles for giving effect to the rules of natural justice, including the audi
principle, which will apply to all investigations, enquiries and other exercises of
administrative power, regardless of their nature. On the contrary, courts have
recognised and restated the need for flexibility in the application of the
principles of fairness in a wide variety of different situations. In short, the
question whether or not the requirements of the audi principle had been
complied with in this case, is therefore entirely dependent on the facts.

[10] A further ground of review relied upon by RMR is that the Adjudication
Committee erred when it decided that a letter by the Department of Trade and
Industry included in the appellant's tender in compliance with clause 13 of the
tender conditions, did not in fact constitute compliance with this clause. Broadly
stated, RMR's contention is that this decision by the Adjudication Committee
resulted from a wrong interpretation of either clause 13 or the contents of the
DTI letter or both. It is unnecessary to analyse the argument in any detail. What
strikes me as relevant for present purposes is that both the clause and the
letter are peculiar to this tender. What is more, the clause and the letter stand
to be interpreted against the background of the facts and the dispute in this
case which will most probably be different from the next case.

[11] RMR's further ground of review relies on the allegation that the
Adjudication Committee should not have considered the tender by Africhoice,
because it did not comply with the tender conditions. But, as was pointed out in
Metro Projects CC v Klerksdorp Local Municipality 2004 (1) SA 16 (SCA) para
15, there are degrees of compliance with any standard and it is notoriously

difficult to assess whether less than perfect compliance falls on one side or the
other of the validity divide. Whether or not there can in any particular case be
said to have been compliance with the specifications and conditions of a
tender, must necessarily depend on the facts of that case.

[12] As its final review ground RMR relied on what it contended to be a
reasonable suspicion that the Adjudication Committee was biased against it. In
support of this contention it relied on the way in which the Adjudication
Committee conducted itself during both the tender proceedings and the
litigation that followed. From the very nature of the argument it is therefore clear
that a decision on this issue will again be inextricably bound to the facts of this
case. In the result there is, in my view, neither any matter of law or general
principle, nor any matter of great public importance that compels this court to
embark upon determination of a dispute that has become of academic interest
only.

[13] An alternative argument raised by RMR was that, even if the issues on
the merits were held to be moot, they should be decided in order to determine
the question of costs. Support for this argument was sought in the judgment of
this court in Chairperson, Standing Tender Committee v J F E Sapela
Electronics (Pty) Ltd 2008 (2) SA 638 (SCA). But in my view that was not a
case where this court decided academic disputes in order to determine the
question of costs. On the contrary, what was held in that case was that
although the decisions of the administrative authority were fatally flawed (paras
15 and 19) and although the setting aside of those decisions would have
practical consequences (para 24), the practical consequences were so
untenable (para 27) that the court should, in the exercise of its discretion, allow
the invalid administrative decisions to stand (paras 28 and 29). But, in the
circumstances, so the court held, there was no reason why the administrative
authority should not bear the costs of litigation. In a sense, the situation in J F E
Sapela was therefore the converse of what happened in this case, where the
setting aside of the administrative decision would have no practical
consequences and where the only outstanding issues relate to costs.

[14] Lastly, RMR sought to demonstrate on the record that whereas it had
done everything in its power to obtain a final decision in the court a quo, the
respondents' conduct was patently calculated to cause delay, and that for that
reason it was entitled to costs. I find it unnecessary to enter into this debate.
Even if the appellant were right, I believe that these considerations would, in
any event, be insufficient to constitute 'exceptional circumstances' as
contemplated by sub-section 21 A(3) so as to warrant the entertainment of the
appeal with the sole purpose of determining issues of costs.

[15] For these reasons the appeal is dismissed with costs, including the costs
of two counsel where employed.

………………..
F D J BRAND
JUDGE OF APPEAL
Concur:

HARMS DP
LEWIS JA