Hippo Transport (Pty) Ltd v Afrisam Lesotho(Pty) Ltd (CCA 46 of 16) [2016] LSHC 31 (28 June 2016)

IN THE HIGH COURT OF LESOTHO (Commercial Division) CCA/0046/2016 In the matter between: HIPPO TRANSPORT (PTY) LTD APPLICANT AND AFRISAM LESOTHO (PTY) LTD DAILY NEEDS ENTERPRISES (PTY) LTD DANKIE TRANSPORT (PTY) LTD SLITZ TRANSPORT (PTY) LTD SP LOGISTICS (PTY) LTD MEWS TRANSPORT (PTY) LTD MOTABO TRANSPORT (PTY) LTD 1ST RESPONDENT 2ND RESPONDENT 3RD RESPONDENT 4TH RESPONDENT 5TH RESPONDENT 6TH RESPONDENT 7TH RESPONDENT RULING Coram : L. Chaka-Makhooane J Date of Hearing : 17th June, 2016 and 20th June, 2016 Date of Ruling : 28th June, 2016 SUMMARY Urgent Application – Applicant seeking to restore the status quo in a process contract by an interim interdict as temporary relief – Respondents opposing the application on grounds that the applicant had failed to meet the requisites for an interim interdict – Having found that the applicant failed to establish a prima facie right – Application dismissed with costs. ANNOTATIONS CITED CASES 1. 2. 3. 4. Boshoff Investments (Pty) Ltd v Cape Town Manicipality1969 (2) 256 Caledon Street Restaurants CC v D’Aviera [1998] JOL 1832 (SE). Chopra v Avalon Cinemas SA (Pty) Ltd 1974 1 SA 469 (D). Juta & Co. V Legal and Financial Publishing Co. (Pty) Ltd 1969 4 SA 443. 5. LF Boshoff Investments (Pty) Ltd v Cape Town Municipality 1969 2 SA 256. 6. Mahao v LEC C of A (CIV) No 8/09. 7. Mlondleni v Amathole District Municipality [2009] ZAECGHC 2. 8. Molaoli and Others v Lesotho Highlands Development Authority (LHDA) LAC/A/06/05. 9. Olympic Passenger Service v Ramalagan 1957 2 SA 382. 10. Schweizer Reneke VleisMkpy (Edms) Bpk v Minister Van Landbou en andere 1971 91) PH F11 (T). 11. Setlogelo v Setlogelo 1914 AD 221. 12. Webster v Mitchel 1948 1 SA 1186. BOOKS Lexis Nexis, Christie’s Law of Contract in South Africa, 6th edition. [1] This matter came before me as an ex parte and urgent application, on the 15th June, 2016. The court ordered that all the parties be given notice and the matter was heard on the 17th June, 2016. [2] The prayers sought by the applicant were couched in the following terms: 1. 2. 3. Dispensing with the forms and service and time limits in terms of the Rules, and hearing the matter as one of urgency at such time and in such manner and in accordance with such procedure as to this Honourable Court seems meet. For purposes of this order, the phrase “applicant’s transport allocation” means 40% of the bagged volumes of Cementitious Products ordered by 1st Respondents’ Lesotho Customers for delivery to them, and 100% of the Bulk volumes of such Cementitious Products. A rule nisi is issued calling upon the Respondents to appear and show cause on a date as determined by this Honourable Court why an order in the following terms should not be made: 3.1 The 1st Respondent is interdicted from 3.1.1 Concluding any freight services contract with any of the 2nd to 7th Respondents of with any other company or person other than the applicant, for the transport of the applicant’s transport allocation or any part thereof, whether number CMD/LOG/LES/2016/01 or otherwise. pursuant tender to 3.1.2 Making use of a company or person other than the applicant for the transport of the applicant’s transport allocation. 3.2 It is declared that the process followed by the 1st Respondent in connection with tender number CMD/LOG/LES/2016/01 was materially irregular and unfear toward the applicant; 3.3 Tender number CMD/LOG/LES/2016/01 as issued by the 1st Respondent is declared to be invalid and is hereby set aside for irregular process; 3.4 The 1st Respondent is ordered to pay the Applicant’s costs of this application on the attorney and own client scale including the costs of three counsel if employed; 3.5 Any other party or person that may oppose this application is ordered to pay applicant’s costs, on such scale and on such basis as the Honourable Court may direct. 3.6 Further or alternative relief. 4. 5. 6. 7. 8. Paragraph 3.1 above operates as an interim interdict with immediate affect and shall remain in force until it may be discharged or set aside by this Court on the return date or thereafter. The Applicant may supplement its papers by way of a supplementary affidavit to be delivered by no later than…. Any respondent that wishes to show cause as contemplated in 3 above must file an answering affidavit by no later than ….and the applicant may file a reply within two weeks thereafter. The rights of the Respondents to anticipate the return day are not restricted in any way. This order and the application papers are to be served on the respondents by the sheriff. 9. Further or alternative relief. [3] The applicant and the 2nd – 7th respondents are in the transportation (carriage) business of large cargo. The 1st respondent is said to be the producer and distributor of cement throughout Lesotho. The applicant and 2nd – 6th respondents have existing contracts with the applicant, to transport cement. The contracts ran from May, 2015 to April, 2016. However, the applicant extended the contracts from April, 2015 to the end of June, 2016. [4] The applicant was awarded the contract for forty percent (40%) of the bagged volumes of the cement product, while the respondents were awarded to share the remaining sixty percent (60%). The applicant was also awarded a tender to transport hundred percent (100%) of the bulk volumes of cement through its specialised containers. [5] Sometime in February, 2016 the 1st respondent invited the applicant and the 2nd, 3rd, 4th, 6th and 7th respondents to submit tenders for transport services for the period after April, 2016. The respondents submitted their tenders under tender number CMD/LOG/LES/2016/01. [6] The applicant was later advised around the 10th May, 2016, that its tender had been unsuccessful. The applicant also found out that when the 1st respondent advised that the existing contracts would be extended to terminate at the end of June, it had also advised the other tenderers, to the exclusion of the applicant, that it was not satisfied with the tender offers it had received and had requested the tenderers to revise their tender prices down wards.1 This letter that was given to the tenderers was not given to the applicant. [7] It appears also that when the applicant was disqualified, so was the 3rd respondent. However, it is alleged that thereafter, the 3rd respondent was “secretly” given an opportunity by the applicant to revise its prices, thus 1 See Annexure “IM 05” at page 33 of the founding affidavit. providing the 3rd respondent with secret information on the other tenderers’ prices. [8] According to the applicant, by giving the other tenderers and not the applicant the opportunity to reduce their tender prices, the 1st respondent was acting in bad faith, it was unfair, unreasonable and it also acted improperly by discriminating against the applicant. [9] The applicant in his founding affidavit averred further that the tender process is regulated by various rights and obligations, even where the tender is invited by a private entity or body. According to the applicant, those rights and obligations arising out of the tender process, collectively constitute a process contract. Applicant contends therefore, that a process contract had come into existence, to regulate the rights and obligations in relation to the tender numbered CMD/LOG/LES/2016/01. The said rights and the 1st respondent’s corresponding obligations, included inter alia that; (a) the tender process must be fair and reasonable and must be governed by absolute good faith at all times; (b) those invited to tender must be treated fairly and equally. [10] The 1st respondent is said to have breached the process contract when it gave the other tenderers the opportunity to reduce their prices and the same opportunity was not afforded to the applicant. By its conduct the 1st respondent acted in bad faith as already shown elsewhere in the Ruling. As a result, a material term of the process contract namely, that all tenderers are entitled to equal treatment had been breached. [11] The 1st, 2nd, 3rd, 4th and 7th respondents oppose this application and they filed their answering affidavits. Generally the respondents are of the view that the matter is not urgent and that the applicant has not met the requisites for an interdict. [12] I must at this juncture make it clear that even though at the time the applicant appeared before me, no arguments had been advanced in relation to the issue of urgency, by allowing the matter to be heard within two (2) days, I effectively allowed this matter to be heard on urgent basis. [13] Apart from the question of urgency the 1st, 2nd and 4th respondents had raised other points in limine. These were in relation to the interim interdict. According to the said respondents the applicant had failed to prove a prima facie right. Mr Loubser counsel for the 1st respondent argued that the applicant was relying on a contract which in his own words expires at the end of June. Nothing in that contract entitled it to the relief it now seeks, because it has no rights post the end of June. According to counsel, the applicant was simply trying to hijack a new contract, against the principles of contract law. [14] Mr Loubser further argued that a call for tenders is normally no more than a request to submit offers, and each tender is an offer which the employer calling for tenders, may accept or reject at will.2 [15] Mr Nthontho counsel for the 2nd, 4th and 7th respondents argued that the applicant had not shown that he has a prima facie right to sustain its claim for an interim interdict, when clearly it did not tender for the 40% that they are now trying to claim as theirs. Like all others tenderers the applicant had tendered for a 100% of the tender. 2 Annexure “C” to the 1st respondent’s answering affidavit. [16] It was further argued on behalf of the respondents that the applicant had failed to show in his papers how he would suffer irreparable harm. Instead he is said to have referred to 3rd parties as a basis of his approach. Furthermore, it was argued that the applicant does have an alternative remedy by way of an action for damages against the 1st respondent, if it is found that the tender should have been awarded to the applicant. [17] On the point of the balance of convenience, Mr Loubser argued that what the applicant was asking the court to do was to interdict the 1st respondent to conclude any new contracts even though the existing ones are to lapse by the end of June, 2016. That means the applicant is asking the court to direct the 1st respondent to deal only with it, to the prejudice of the other respondents. According to Mr Loubser, the applicant had not addressed the prejudice they will suffer and the balance of convenience to them. [18] On the other hand, Mr Nthontho argued that the court cannot be asked to maintain the status quo if the current contract is to lapse by the end of June. Counsel further argued that on the basis of the applicant’s averments, the balance of convenience does not favour the granting of this application more so when the applicant has failed to show what kind of prejudice it is likely to suffer, if the interim interdict is not granted. The court was asked to weigh the prejudice the applicant will suffer if the interim interdict is not granted, against the prejudice the respondents will suffer if it is. The court was referred to the cases of Boshoff Investments (Pty) LTd v Cape Town Municipality3 and Olympic Passenger Service v Ramalangan.4 3 1969 (2) SA 256 4 1957 (2) SA 382 [19] I am not convinced that the applicant has met the requisites for an interim interdict in casu. It is trite that these requisites are: (a) (b) a prima facie right; a well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief is eventually granted; (c ) that the balance of convenience favours the granting of an interim interdict; and (d) that the applicant has no other satisfactory remedy.5 PRIMA FACIE RIGHT [20] I am unable to find anywhere in the founding affidavit proof of the facts that establish the existence of a right (s), enough to entitle the applicant the relief sought. In casu the applicant relies on the rights that it says have accrued under the process contract. The applicant contends that the 1st respondent violated those rights in relation to the tender, in tender number CMD/LOG/LES/2016/01. According to him he was discriminated against and that the tender process was not fair and it was not governed by absolute good faith. [21] In my view the applicant was informed since the 10th May, 2016 that he had been disqualified as a contender for the new tender. In that regard the applicant is already out of the race. Any dealings that the 1st respondent has with the other tenderers in clearly between the 1st respondent and those 5 Setlogelo v Setlogelo 1914 AD 221 at 227. tenderers. That he wants the court to preserve the status quo in relation to the 40% that it says belongs to it, is stretching it a bit far. [22] The process contract referred to, I am unconvinced that, this area of the law forms part of our law of contract, so far. Even if it was persuasive, in casu the 1st respondent had already short listed the companies that it wished to be contracted to. [23] A far as the current contract is concerned, this expires in June, 2016. Nothing so far shows that the 1st applicant has any rights that could be interpreted as extending beyond the life of the existing contract, that is beyond June, 2016. So that any reference to legitimate expectation and the process contract where these were not mentioned in the contract between the parties cannot be enforced.6 APPREHENSION OF IRREPARABLE HARM [24] The requisites for an interim interdict and should not be viewed in isolation. The applicant in its founding affidavit was unable to show how it would suffer irreparable harm should the relief not be granted. There was mention that the applicant bought trucks for M18 Million at the instance of the 1st respondent. I was unable to find anywhere from the facts where the 1st respondent intimated this. The 1st respondent has denied this. The contract does not refer to this. Infact what was clear was that the same trucks also did work for a rival company to the 1st respondent. Irreparable harm has not been established as a result. 6 See Molaoli And Others V LHDA LAC/06/2005. THE BALANCE OF CONVENIENCE [25] The balance of convenience must favour its granting. According to the applicant the balance of convenience means maintaining the status quo. In essence what the applicant is saying is that, the 1st respondent must be interdicted to conclude any new contracts even though at the end of June the existing contracts will lapse. Effectively this means the court is being asked to hold the 1st respondent’s hands to contract with tenderers of its choice, and to deal with the applicant to the prejudice of the companies that are likely to win the new tender. It is my opinion that in exercising my discretion, the balance of convenience in casu favours the respondents. The respondents will suffer more prejudice should the interim interdict be granted. NO ALTERNATIVE REMEDY [26] The applicant has other remedies except it chose not to explore them first. It has been suggested that the applicant has an option of an action for damages against the 1st respondent. However, the 1st respondent was very quick to dismiss it by saying that it would not be a suitable or a practical remedy. Be that as it may, the court is more inclined to exercise its discretion by refusing to grant the interim relief especially where the requisites have not been established.7 7 See Setlogelo v Setlogelo (supra). See also Plettenberg Entertainment (Pty) Ltd v Minister Van Wet & Orde 1993 (2) SA 396 ( C) [27] It is for these reasons that the interim interdict is not granted. The following order is made: 1. The application for the interim interdict is dismissed with costs on the ordinary scale. 2. Costs will be costs in the course. _________________________ L. CHAKA-MAKHOOANE JUDGE For the Applicant Assisted by For the 1st Respondent Assisted by For the 2nd , 4th and 7th Respondents For the 3rd Respondent For the 5th and 6th Respondents : : : : : : : Mr Edeling Mr Ndebele and Mr Rasekoai Mr Loubser Mr Frazier Mr Nthontho Mr Maieane No Representation. 12