SUPREME COURT JUDGMENTS ON CHALLENGES TO ADMINISTRATIVE ACTS AND TENDER AWARDS
Namibia Airports Company Ltd v Fire Tech Systems CC (SA 49- 2016) [2019] NASC (12 April 2019) – Review of administrative acts, remedies thereof, and costs
The first respondent (Fire Tech) sought to set aside a decision of the appellant (NAC) in awarding a tender to the second respondent. The High Court dismissed the application and found that the award of the tender to the fourth respondent was unlawful and irregular, but did not set it aside; and ordered, among others¸ that the applicant was granted leave to institute (if so advised) an action for damages against NAC because of the company’s infringement of the applicant’s right to fair administrative action as envisaged in Article 18 of the Constitution.
The appellant appealed against the whole judgement of the court a quo and the first respondent noted a cross-appeal in respect of paragraph 2 of the order of the court a quo not setting aside the award of the tender to the fourth respondent (the second respondent on appeal).
On appeal, the Supreme Court stated that:
In the review application, the court a quo mero motu granted the first respondent leave to institute an action for damages based on the provisions of Article 25 of the Namibian Constitution. It was common cause that damages were never sought by the first respondent – neither in affidavits nor in oral arguments. No mala fides were suggested by the first respondent and there was no indication in the judgment of the court a quo that the appellant had acted for ulterior reasons or extraneous to its empowering statute.
The general principle is that a court is competent to grant orders which were asked for by the litigants. It is wrong for a judicial officer to rely on his or her decision on a matter not put before him or her by the litigants either in evidence or written submissions. Where a judge comes across a material point not argued before him or her it is his or her duty to inform counsel on both sides and invite them to submit arguments either for or against the judge’s point. Ordinarily, a breach of administrative justice attracts public law remedies, not private law remedies. A claim for damages is a private law remedy.
In respect of the cross-appeal, it is common cause that by the time the review application was heard by the court a quo, the appellant and second respondent had already performed in terms of a contract signed by them. At the stage when the first respondent became aware of the fact that the tender had not been awarded to itself, it failed to seek to interdict performance under the contract neither did it institute urgent proceedings. In these circumstances, the appellant was entitled and obliged to give effect to an extant administrative act.
The procedure where a litigant seeks the reviewing and setting aside of an alleged unlawful administrative act is two-fold. Firstly, a court is required to make a finding of validity or invalidity. Where a declaration of invalidity is made, the court may proceed to the second stage where the court considers the effect of the declaration of invalidity on the parties and other stakeholders. At this second stage, a court enjoys discretionary power and must make an order which is just and equitable in the circumstances.
A court in the exercise of its discretion may face practical challenges and may thereafter decide not to set aside an administrative act where doing so will achieve no practical purpose. To set aside a tender award can have catastrophic consequences for an innocent tenderer and adverse consequences for the public at large.
Held that the court a quo did not err or misdirect itself in applying the principles enunciated in the Oudekraal and Sapela matters in not setting aside the award of the tender to the second respondent.
As a result, the appeal succeeded.
Pamo Trading Enterprises CC v Chairperson of the Tender Board of Namibia (SA 60-2017) [2019] NASC (3 July 2019) – Lawfulness of decision to cancel tender before the decision to award is communicated to bidders and without hearing such party
Tender Board of Namibia (the Board) awarded a food tender to certain bidders including the first and second appellants (Pamo Trading) on 2 October 2014 in respect of the Khomas and Otjozondjupa catering regions, respectively. However, the entire tender was canceled before the decision to award was communicated to them without being heard. Additionally, the decision to award was not reviewed and set aside. The appellants contended that their fair process rights were violated because they were not afforded an opportunity to be heard and that the Board failed to comply with statutory prescripts under section 16 of the Tender Board Act 16 of 1996 (Tender Act), among others, notifying them in writing of the acceptance of their tenders.
The appellants unsuccessfully challenged the lawfulness of the administrative decision to cancel the tender in the High Court. In dismissing the application, the High Court held, among other things, that the cancellation was not unreasonable and irrational. Regarding the fair process challenge, the Court a quo held that the Board was duty bound to cancel the tender and that when it did so without affording the tenderers (including the appellants) an opportunity to be heard it did not act unfairly because the allegations of impropriety, corruption and irregularity were not leveled against any of the tenderers but against the officials of the ministry.
This opposed appeal was against the decision of the High Court dismissing the appellants’ application challenging, in the main, the cancellation of the food tender on procedural and substantive grounds. The Supreme Court considered it as follows.
In upholding the appeal, the appeal court stressed the need to uphold the rule of law and to protect and enforce entrenched rights. Following analysis on whether the cancellation of the tender was irrational and unlawful the court held that:
The High Court misdirected itself in concluding that the cancellation of the tender was, in the circumstances, rational and, as regards the appellants’ fair process rights, that the Board did not act unfairly and consequently dismissed the application.
The Board failed to comply and ought to have complied with section 16 of the Tender Act after awarding the tender to the successful bidders, including the appellants: it should have notified them in writing of the award. It held that the Board acted unlawfully in failing to do so. The court further held that the Board acted in breach of the appellants’ fair process right by failing to afford them a hearing (audi alteram partem) or at least invite them to make written representations before the tender was canceled.
No reasons were raised as to why the ministry did not approach a competent court to review and set aside the tender and the decision awarding the tender to the successful bidders, including the appellants, when the allegations of impropriety and corruption surfaced. The decision awarding the tender thus remained extant. The court further held that, based on the revealing uneasiness and statements made by the members of the Board at its meeting before the cancellation of the tender, the contention of the appellants that the decision to cancel was that of the ministry and not of the Board was not far-fetched.
Regarding the ancillary relief sought, granting the relief would be inappropriate in the circumstances particularly because the appellants failed to make a case for same.
Consequently, the appeal succeeded in part (with costs against the government respondents also in relation to the ancillary relief based on the Biowatch principles) with the result that the order of the High Court was set aside and substituted with an order setting aside the decision of the Board canceling the tender and referring the matter back to the appropriate functionary − the successor to the Tender Board of Namibia in terms of the Public Procurement Act, 15 of 2015.
Appropriate costs order against the appellants and in favour of the further respondents who opposed the appeal, particularly in relation to the ancillary relief sought, was made, being:
‘5. The appellants are ordered to pay the further respondents’ costs on appeal jointly and severally, including costs of one instructing attorney and of two instructed counsels, if any.’
Namibia Financial Exchange (Pty) Ltd v Chief Executive Officer of NAMFISA (SA 43-2017) [2019] NASC (31 July 2019) – Whether a party seeking relief against the administrative body is compelled to proceed under the review rule – rule 76
Proceeding under the general applications rule – rule 65, NFE sought relief in the High Court against Namfisa principally for a declarator and mandamus relative to a failed application to be registered as a stock exchange. Namfisa objected to the relief on grounds that it was irregular, as it should have been brought in terms of the review rule. The High Court upheld the objection and struck NFE’s application from the roll, with costs, and reasoned that rule 76 aims to delineate separate procedures for the various forms of applications taking into account the nature, scope, and purpose of a specified form of application that comes to the court and that it was, therefore, the intention of the rule maker that each application be dealt with accordingly. The High Court concluded that rule 76(1) obligates, in peremptory terms, that every application to challenge administrative action must be brought under the review rule and that failure to do so renders the application a nullity.
On appeal, one issue for determination by the Supreme Court was whether a party seeking relief against an administrative body is compelled to proceed under the review rule. The Supreme Court distinguished the purpose of separate rules for POCA applications and election disputes which do not fall within the normal jurisdiction of the High Court and held that since the provisions of rule 76 are not couched in peremptory terms, the review rule exists for the benefit of an applicant who has the right to waive it. Accordingly, and in conformity with the long-standing common law position on the review rule, the court held that it is not peremptory and does not attract nullity if not used in challenging administrative decision-making and that to deploy rule 61 sanctions if not used would be denying an applicant a right it otherwise enjoys. Accordingly, there is no reason that a principle now firmly embedded in our common law should be changed. Held that:
The order made by the court a quo was not procedural simpliciter and involves the denial of a right to make an election among procedural avenues open to a litigant; that an authoritative interpretation of a statutory provision met the criterion of finality, could not be altered by the High Court and, therefore, appealable.
As a result, the appeal succeeded, and the order of the High Court was set aside, and the matter was remitted to the High Court for further case management. The first and second respondents were ordered to bear the costs of the appeal, jointly and severally, the one paying the other to be absolved, to include the costs of one instructing and two instructed counsels.
However, the applicant’s costs in respect of the heads of argument were limited to 90% of the taxed costs. This was because NFE’s heads of argument were in excess of 40 pages contrary to rule 17(7)(k) of the Rules of the Supreme Court, which directs that heads of argument must not exceed 40 pages unless the court directs otherwise. NFE did not obtain the court’s permission to file heads of argument in excess of what the rule requires.
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The Promotion of Law and Access to Justice Project, fedden@consultfasz.com.