IN THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH ... THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH COURT, PRETORIA) NOT ... the possible loss of profit while Telkom ... on paragraph 7.3.2 of the PRC

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  • IN THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG HIGH COURT, PRETORIA)

    NOT REPORTABLE Date: 2009-04-17

    Case Number: 597/09

    In the matter between:

    MAREDI TELECOM & BROADCASTING (PTY) LIMITED Applicant and

    ERICSSON SOUTH AFRICA (PTY) LIMITED First Respondent TELSAF DATA (PTY) LIMITED Second Respondent TELKOM SA LIMITED Third Respondent

    JUDGMENT

    SOUTHWOOD J

    [1] This is an urgent application in which the applicant (Maredi) seeks

    interim relief interdicting the third respondent (Telkom) from entering

    into a contract with the first respondent (Ericsson) and the second

    respondent (Telsaf), alternatively, Ericsson, alternatively, Telsaf,

    pursuant to the tender by Ericsson and Telsaf to Telkom under tender

    number RFP085/07 (the tender) and interdicting Telkom from ordering

    from Ericsson and Telsaf any goods or services pursuant to the award

  • 2

    by Telkom to Ericsson and Telsaf of the tender pending the final

    determination of Maredis application to review and set aside the award

    of the tender by Telkom to Ericsson and Telsaf and remitting the tender

    back to Telkom for it to reconsider the award.

    [2] The award of the tender by Telkom to Ericsson and Telsaf was the

    culmination of a 16 month long process during which tenders were

    invited, received and evaluated at four levels by representatives of

    Telkom. On 1 December 2008 Telkom notified Ericsson and Telsaf

    that their tenders were successful and that they were awarded the

    tender in the ratio 40 % to 60 % respectively. On the same date

    Telkom notified Maredi that it was not successful. Maredi immediately

    took legal advice and requested Telkoms reasons for awarding the

    tender. On being informed that it failed to meet certain critical criteria

    Maredi prepared and served this urgent application on Ericsson, Telsaf

    and Telkom. Only Ericsson and Telkom oppose the application. Telsaf

    has not given notice of intention to oppose or filed an answering

    affidavit.

    [3] The parties have filed compendious affidavits which deal in great detail

    with the tender process with particular reference to the physical

    evaluation of the products and the final decision to award the tender.

    Maredis case in the founding affidavit is that in awarding the tender

    Telkom acted in breach of various provisions of the Promotion of

  • 3

    Administrative Justice Act, 3 of 2000 (PAJA) (which, it is common

    cause, applies to the award of tenders by Telkom).

    Maredi alleges that Telkom was biased in favour of Ericsson and says

    that Telkom ignored its own procedures to ensure that the tender was

    awarded inter alia to Ericsson and deliberately misrepresented the

    results of the technical testing that took place to ensure that the tender

    was not awarded to Maredi but inter alia to Ericsson. During the

    hearing, Maredis counsel informed the court that Maredi would not

    persist in the allegations of dishonesty in the papers. It accordingly

    became common cause that Maredi will have no right to claim

    damages from Telkom if Telkom wrongfully awarded the tender to

    Ericsson and Telsaf see Olitzki Property Holdings v State Tender

    Board & Another 2001 (3) SA 1247 (SCA) para 42; Steenkamp NO

    v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC)

    paras 55 and 56; Premier, Western Cape v Fair Cape Property

    Developers (Pty) Ltd 2003 (6) SA 13 (SCA) paras 40-49 and 50-59.

    [4] The applicant seeks interim relief. The applicant must therefore

    establish:

    (1) a clear right or, if not clear, that it has a prima facie right;

  • 4

    (2) that there is a well-grounded apprehension of irreparable harm if

    the interim relief is not granted and the ultimate relief (by way of

    the review proceedings) is eventually granted;

    (3) that the balance of convenience favours the grant of an interim

    interdict; and

    (4) that the applicant has no other satisfactory remedy. (LF Boshoff

    Invesments (Pty) Ltd v Cape Town Municipality; Cape Town

    Municipality v LF Boshoff Investments (Pty) Ltd 1969 (2) SA

    256 (C) at 267B-E.)

    When an applicant cannot show a clear right, and more particularly

    where there are disputes of fact relevant to a determination of the

    issues, the Courts approach in determining whether the applicants

    right is prima facie established, though open to some doubt, is to take

    the facts set out by the applicant, together with any facts set out by the

    respondent which the applicant cannot dispute, and to consider

    whether, having regard to the inherent probabilities, the applicant

    should (not could) on those facts, obtain final relief at the trial of the

    main action. The facts set out in contradiction by the respondent

    should then be considered and if serious doubt is thrown upon the case

    of the applicant it cannot succeed. (Webster v Mitchell 1948 (1) SA

    1186 (W); Gool v Minister of Justice and Another 1955 (2) SA 682

    (C) at 688C-E; LF Boshoff Investments (Pty) Ltd v Cape Town

  • 5

    Municipality (supra) at 267E-G; Beecham Group Ltd v B-M Group

    (Pty) Ltd 1977 (1) SA 50 (T) at 55B-E.)

    In Beecham Group Ltd v B-M Group (Pty) Ltd (supra) the court said

    with regard to the various factors which must be considered:

    I consider that both the question of the applicants prospects of

    success in the action and the question whether he would be

    adequately compensated by an award of damages at the trial

    are factors which should be taken into account as part of a

    general discretion to be exercised by the Court in considering

    whether to grant or refuse a temporary interdict. Those two

    elements should not be considered separately or in isolation, but

    as part of the discretionary function of the Court which includes

    a consideration of the balance of convenience and the

    respective prejudice which would be suffered by each party as a

    result of the grant or the refusal of a temporary interdict.

    Where the applicants right is clear and the other requisites of an

    interdict are present no difficulty presents itself about granting an

    interim interdict. Where, however, the applicants prospects of ultimate

    success are nil, obviously the Court will refuse an interdict (Olympic

    Passenger Services (Pty) Ltd v Ramlagan 1957 (2) SA 382 (D) at

    383C-D; Beecham Group Ltd v B-M Group (Pty) Ltd (supra) at

    54H-55B.

    [5] In the absence of a claim for damages, if Maredi establishes a prima

    facie right (i.e. a prima facie right to an order setting aside Telkoms

  • 6

    award of the tender to Ericsson and Telsaf) it will follow that there will

    be a well-grounded apprehension of irreparable harm if the interim

    relief is not granted and the ultimate relief is eventually granted. There

    is clearly no balance of convenience in favour of the applicant. In fact

    the balance of convenience is overwhelmingly in favour of the

    respondents. The applicant can point to no prejudice to it other than

    the possible loss of profit while Telkom has dealt extensively with the

    impact which interim relief will have on its business. It will not be able

    to proceed with its expansion and development plans and this will

    result in losses of approximately R50 million per month while the order

    is in force. It is fair to accept that it will take six to eight months to file

    the record and affidavits and obtain a date for the hearing of the main

    application. In addition to this time there is the time it would take to

    have the matter decided on appeal. Maredis counsel did not contend

    otherwise. The real issue is therefore whether Maredi established a

    sufficiently strong right to justify the court granting an interim interdict.

    Maredi contends that it has established a clear right whereas the

    respondents contend the opposite. This questions turns primarily on

    whether Maredi was properly excluded from consideration.

    [6] It must be recorded that in reply Maredis counsel handed to the court a

    written undertaking given by Maredi addressed to Ericsson, Telsaf and

    Telkom in which Maredi undertakes

  • 7

    RE: MAREDI TELECOM & BROADCASTING (PTY)

    LIMITED/ERICSSON SOUTH AFRICA/TELSAF DATA/TELKOM

    SA LIMITED CASE NO: 579/09

    We undertake that in the event that the interim interdict sought

    in case number 579/09 being granted to us and in the event that

    the review under the same case number ultimately fails we shall

    reimburse Ericsson, Telsaf Data and Telkom for any loss proved

    to have been sustained as a consequence of the granting of the

    interim interdict.

    This undertaking which is dated 20 February 2009 was marked A

    (p1373) by the court. I agree with Telkoms counsel that this

    undertaking does not affect the balance of convenience. It is given by

    a private company, apparently the subsidiary of the Japanese parent

    company, and there is no indication that this company will be able to

    reimburse any of the respondents for the loss they suffer as a

    consequence of the granting of the interim interdict.

    [7] In its founding affidavit Maredi alleges that the decision to awar

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