Serjeant at the Bar

On the incoherence of jurisprudence for self-review of state tender awards

2019-04-26 09:20
The country’s highest court has overturned an apartheid era section of the Divorce Act that sometimes left divorced women in the Transkei destitute. (Ashraf Hendricks, GroundUp)

The country’s highest court has overturned an apartheid era section of the Divorce Act that sometimes left divorced women in the Transkei destitute. (Ashraf Hendricks, GroundUp)

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Where an organ of state engages in self-review of its tender processes after a lengthy delay, it carries a conflict between the need to enforce the principle of public power being exercised legally and the need for certainty, writes Serjeant at the Bar.

The award of tenders by government, no matter the level thereof, is one of the most obvious sources of corruption and hence of theft of precious state resources.

Pieter-Louis Myburgh's book on the record of Ace Magashule as premier of the Free State, if proven in court, provides yet another depressing but luminous illustration of the destruction of the constitutional dream of ensuring substantive transformation of the infrastructure of the country to the benefit of the millions who were regarded as non-citizens by the apartheid regime.

It is therefore not surprising that the courts have been flooded with challenges to the legality of tender awards. Recently, there has been a novel form of application in a number of cases in which the organ of government which granted the award has sought to review its own decision. As Justice Leonie Theron remarked in her judgment in the case of Buffalo City Metropolitan Municipality v Asla Construction, these challenges are to be expected when municipalities seek to "clean house" and restore a level of integrity to the governance of the municipality.

READ: Political morality continues to lag behind promises of the Constitution

Unfortunately, the jurisprudence which has been developed in response has, to be polite, been devoid of coherence. The Buffalo Municipality case is the latest example.

Briefly stated, the case involved an award of a contract for the construction of houses for those in desperate need which, it was clear, ran counter to the requirements for a constitutionally valid contract in terms of Section 217 of the Constitution. The problem in this case was that the award was made in September 2014 but the municipality only sought to have it set aside in November 2015, some 14 months later.

There exist two routes by which to review and set aside this kind of contract. In the first place, reliance can be placed on the provisions of the Promotion of Administrative Justice Act (PAJA) in terms of which a review must be brought within 180 days of the decision which is sought to be impugned. The second route is to invoke the principle of legality, a test developed by the courts from the constitutional principle that all power must be exercised legally. Here, no time limit to launch the review is prescribed, save that the delay in bringing the review must not be unreasonable.

In a landmark decision in 2017 in a case known as "Gijima" the Constitutional Court decided that an organ of state could not invoke the provisions of PAJA to review its own decisions but could only do so under the principle of legality. This decision has been the subject of excoriation in the pages of the South African Law Journal and this clearly concerned the Constitutional Court in this case where thanks to Gijima, the 180-day default ruler regarding delay was not available as a default position.

Justice Theron in her majority judgment accepted that the 14-month delay in bringing this review was unreasonable and that no cogent explanation had been offered by the municipality for why it had only reacted 14 months after the illegal award of the tender. However, the decision to award the contract to Asla Construction was so egregious that a constitutionally compliant society could not permit this contract to be lifted into the realm of legality.

But Asla, unusually in this kind of case, was an innocent party. So the court ordered that the contract was invalid but that Asla was entitled to rely on the contract for work already done. The principle articulated by Justice Theron as the basis for her approach was: "The important principle at play in this matter is how this Court manages complex institutional settings of corruption and maladministration, particularly at local government level and where the organ of state has not taken the Court into its confidence."

In a separate judgment, Justice Edwin Cameron and Johann Froneman sought to deal with the problem of an organ of state embarking on a self-initiated review of a decision where the lengthy delay before initiating its review remained unexplained by way of the following principle: "in the absence of adequate explanation for unreasonable delay, courts should not intervene to inquire into a final and determinative holding into unlawfulness, unless the seriousness of the unlawfulness at issue warrants overlooking the manifest deficiencies in the state actor's case".

On this basis, the two justices found that the municipality could not, like Rip Van Winkle, suddenly awake after a lengthy slumber and demand that its illegal act must now be set aside by a court, particularly as in this case where the other party had been entitled to rely on the conduct of the municipality in granting it a contract would now be severely and unfairly prejudiced by an order setting the contract aside. This would extinguish contractual rights which otherwise would have accrued to Asla for work already performed.

There can be little doubt that these cases, where an organ of state engages in self review of its tender processes after a lengthy delay, induces a conflict between the need to enforce the principle of public power being exercised legally and the need for certainty. For this reason, this decision required a measure of legal dexterity. But for so important an area of law, being the review of state conduct where tenders are involved with all the corrupt consequences which flow therefrom, this decision leaves the law in a truly uncertain position.

The outcome all depends on how egregious the court considers the breach of the applicable law that was committed by the organ of state. And this problem in turn may finally compel the Constitutional Court to revisit its judgment in Gijima and bring some much need certainty of principle back to this important area of law.

- Serjeant at the Bar is a senior legal practitioner with a special interest in constitutional law.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    corruption  |  constitutional court


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