THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not reportable

Case No: 797/2022

In the matter between:

TRANSNET SOC LTD
APPELLANT

and

TIPP-CON (PTY) LTD
FIRST RESPONDENT

SA FENCE AND GATE (PTY) LTD
SECOND RESPONDENT

GORDIAN FENCE SA (PTY) LTD
THIRD RESPONDENT

SIYANOKU (PTY) LTD
FOURTH RESPONDENT

SINOVILLE FENCING SA (PTY) LTD
FIFTH RESPONDENT

COCHRANE PROJECTS (PTY) LTD
SIXTH RESPONDENT

SECUREMESH CC
SEVENTH RESPONDENT

Neutral Citation:
Transnet SOC Ltd v Tipp-Con (Pty) Ltd and Others (797/2022)
[2024] ZASCA 12 (31 January 2024)
Coram:
Petse DP and Meyer JA and Windell, Keightley and Siwendu
AJJA
Heard:

28 August 2023
Delivered:

31 January 2024
Summary:

Administrative law – legality review – self-review by state organ
– delay – whether delay unreasonable – whether delay should be overlooked.

____________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Mali J, sitting as a court
of first instance):
The appeal is dismissed with costs, including the costs of two counsel.

___________________________________________________________________

JUDGMENT
___________________________________________________________________

Windell AJA (Meyer JA and Keightley AJA concurring):

Introduction
[1] This is an appeal against the judgment and order granted by the Gauteng
Division of the High Court, Pretoria, per Mali J (the high court). The appeal is with
leave of the high court. The parties in this appeal are the appellant, Transnet SOC Ltd
(Transnet), and the first respondent, Tipp-Con (Pty) Ltd (Tipp-Con). The remaining
respondents did not participate in the high court proceedings and are not active parties
in this appeal.

[2] The high court dismissed an application by Transnet to self-review its decision
to award a tender to Tipp-Con (the review application). The tender was for the
manufacture, supply, and installation of a high security fence at Transnet’s City Deep,
Kascon and Kaserne premises (the premises). The premises had been the subject of
various incidents of crime, necessitating the installation of a security fence to protect
Transnet’s assets.

[3] After the tender had been awarded to Tipp-Con, the parties concluded a
contract and Tipp-Con proceeded to install the fence. During the installation of the
fence, disagreement arose between the parties regarding the fence’s specifications.
The dispute was referred to an adjudicator, (Mr Patrick Lane SC, the adjudicator), in
accordance with the dispute resolution mechanism of the contract. The adjudicator

found that the fence was installed according to contractual specification and Tipp-Con
was entitled to payment under the contract.

[4] Transnet purported to file a notice of dissatisfaction against the adjudicator’s
determination. Transnet was out of time, so it was unable to contest the ruling of the
adjudicator. Tipp-Con sought Transnet’s permission to return to the premises to
complete the installation of the fence, but Transnet refused. Tipp-Con launched an
application in the Gauteng Division of the High Court, Johannesburg, to make the
adjudication award an order of court. In response, Transnet launched the review
application in the Gauteng Division of the High Court, Pretoria.

[5] Transnet’s case on review was based on three grounds. The first ground related
to the award of the tender. Transnet’s complaint was that Tipp-Con provided a non-
compliant sample of the fence (the tender sample) during the tender evaluation
process (it was not ‘hot dip galvanized’), and even though the actual fence later
erected was hot dip galvanized, and therefore compliant with the terms of the contract,
the tender should be declared unlawful and set aside. Transnet’s second and third
grounds were aimed at the contract that was concluded between the parties after the
tender had been awarded to Tipp-Con. Transnet argued that the contract was not
lawfully concluded because Tipp-Con didn’t submit the test results on the tender
sample which was a pre-condition to the contract being concluded, and the fence
erected did not comply with the tender specifications and Tipp-Con’s ‘best and final
offer’. Thus, the contract was unlawful and must be set aside.

[6] In dismissing the review application, the high court agreed with Tipp-Con that
Transnet had delayed in initiating the self-review and only brought the review
application to ‘escape its contractual obligations’. It is this finding of the high court that
is now the subject of this appeal.

[7] First, Transnet argues that the high court failed to apply the two-stage inquiry
of first establishing whether there was an unreasonable delay in bringing the
application, and if so, whether the delay should be overlooked. As a result of
erroneously concluding that there was no explanation for the delay, the high court
failed to assess the reasonableness of the delay or engage in an enquiry whether the

delay should be overlooked. Secondly, despite the absence of corruption in the
awarding of the tender, the awarding of the tender was unlawful due to non-
compliance with the terms and conditions of the Request for Proposal (RFP) which
constitutes a violation of section 217 of the Constitution.1 Therefore, so it is argued,
the appeal should be upheld and both the award of the tender to Tipp-Con, as well as
the contract concluded between the parties, should be set aside.

[8] Consequently, this appeal involves two preliminary issues: first, whether the
delay in initiating the self-review was unreasonable; and second, if it was, whether the
delay should be overlooked. While the severity of the purported irregularities is a
determinant in the second phase of the inquiry, the merits of the review application will
only be considered if either preliminary point is decided in Transnet’s favour.

[9] Context is paramount. As in so many other cases involving self-review, the
peculiar facts of this case ultimately influence the outcome.

Background facts
[10] Commencing on 29 November 2018, Transnet invited interested parties to
submit tenders for the high security fence at the premises in terms of the RFP. Part 2
of the RFP in section ‘T2.2-47: Contractor’s Design and Technical Compliance’
provides as follows:
‘Note to tenderers:
Tenderers are to submit a sample of the fence in accordance to the specification. The
measurement of the sample should be 400mmx400mm.
The sample checked according to the specification listed below . . .
100% compliance is required, failure to comply will result in disqualification.’

[11] The tender sample provided would be evaluated for compliance with, inter alia,
the following specifications as set out in in the RFP under ‘C3: Scope of Work’: wire
diameter will be 3mm minimum; all panel fixtures shall be on the inside of fence line;

1 Section 217 of the Constitution provides: ‘When an organ of state in the national, provincial or local
sphere of government, or any other institution identified in national legislation, contracts for goods or
services, it must do so in accordance with a system which is fair, equitable, transparent, competitive
and cost-effective’.

and panel and fixtures shall be hot dip galvanised coatings on fabricated steel in
accordance with SANS121:2011. The latter is a process, (simply speaking) by which
a protective zinc coating is applied to steel or iron by dipping it in molten zinc to prevent
rusting.

[12] There were seven bidders that provided tender samples. Tipp-Con’s tender
sample was received on 21 January 2019. The tender sample met the criteria for the
scope of works in the RFP, save that it was not hot dip galvanized. Tipp-Con disclosed
this fact in its tender response and provided a reason for the non-compliance. It
explained that: ‘The sample is not hot dip galvanized coated due to time and closure
of the factory on holiday. However, the actual panels and fixtures will be hot dip
galvanized coated on fabricated steel. Ref SANS 121:2011.’

[13] Transnet accepted the explanation and unanimously rated Tipp-Con’s tender
sample as substantively responsive to the RFP on 30 January 2019. On 19 February
2019, the Tender Evaluation and Evaluation Committee produced a report. Under
‘Prequalification’ and ‘Substantial Responsiveness’ only Tipp-Con and ‘Securemesh
CC’ were compliant. Despite passing the technical evaluation, Securemesh CC was
disqualified at the functionality stage for failing to register with the Construction
Industry Development Board despite being given 21 days to do so. Tipp-Con was
recommended as the ‘highest ranked bidder on the Automated Scorecard’, and
authorization to negotiate with Tipp-Con was requested.

[14] Permission was apparently granted, as there was a meeting of the ‘tender
negotiation team’ on 2 April 2019. Tipp-Con’s price was above market related prices
and it was required to submit its best and final offer (the final offer). On 10 April 2019,
it submitted the final offer, being a total price of R34 371 970.15. It advised that the
final offer had effectively reduced its initial price by R4 862 450.79 and stated that it
was ‘still offering the High Quality Steel welded wire mesh Fencing with a 4mm wire
diameter and . . . using the H-beam posts’. On 11 July 2019, the Transnet Head Office
Acquisition Council met and approved the award of the tender to Tipp-Con. On 7
August 2019, Transnet notified Tipp-Con by letter that the latter had been appointed
the winning bidder. The letter continued by stating:

‘All business transactions emanating from this bid process shall be subject to the terms and
conditions of the bid document, your response thereto, other contractual conditions negotiated
thereafter and the following: Your acceptance of this letter by 9 August 2019.’

[15] Tipp-Con accepted its appointment as successful bidder on 8 August 2019. At
the 'kick-off meeting', Tipp-Con was informed that the project was an expedited one
that had to be completed within Transnet's fiscal year (by 31 March 2020) and that
execution of the works had to begin on 16 September 2019. To meet the anticipated
completion date and to finalize the program, Transnet advised Tipp-Con to initiate the
procurement process and obtain lead times for the material's supply. Concerns were
raised about Tipp-Con’s capacity to perform on time, given that this was the first project
in which Tipp-Con had been appointed to execute and complete works for Transnet.
Transnet proposed an inspection of the manufacturing facilities of Tipp-Con's suppliers
(to inspect capacity and quality control procedures).

[16] Arrangements were made to visit the locations of two material suppliers (these
being Cochrane, the current material supplier, and Bestfence, the supplier of the
tender sample). Transnet instructed Tipp-Con to construct full-scale samples of the
fences in accordance with the RFP's specifications (i.e. the works information
contained in C3: Scope of Work which provides for minimum wire thickness of 3mm).
Tipp-Con procured the installation of three full-size samples of the 3.6-metre-high
fence and two full-size samples of the 1.2-metre-high fence, and on 13 September
2019, representatives of Transnet and Tipp-Con attended the inspection.
Representatives of Transnet examined the physical properties of the samples and
chose one. The mesh wire diameter of the selected fence was 3mm horizontal and
4mm vertical, with a 13mm vertical flat bar per section. They remarked that the chosen
sample ‘complied with the minimum tender requirements’ and was superior to the
product described in the works information because it was modular (comprised of
sections) and featured a 13mm vertical flat bar and double post at the base that
provided increased strength and security. Tipp-Con was instructed to procure the
materials necessary for the construction of the selected sample.

[17] Following the selection of the fence to be erected, the ‘C1.1 Form of Offer’ was
signed and submitted to Transnet on 20 September 2019. The Form of Offer included,

among other things, the works information, the bill of quantities, and a ‘P&G summary’
(the preliminary and general costs not directly related to the building costs).
Significantly, the contract was not signed based on Tipp-Con's final offer of a
4mmx4mm wire diameter, but rather on the fence Transnet selected after inspecting
full-sized samples, namely a 3mm (horizontal) and 4mm (vertical) wire. It is not
disputed that although these specifications differed from Tipp-Con's final offer, it was
in compliance with the RFP that provided for a minimum of 3mm diameter. The initial
shipment of materials was delivered on site on 11 October 2019, and Transnet
accepted, invoiced, and paid for them on 20 November 2019.

[18] On 21 October 2019, Tipp-Con began installation of the fence, with Transnet's
approval. On 31 October 2019, Transnet delivered to Tipp-Con a copy of the contract
based on the June 2005 NEC 3 Engineering and Construction Contract (with
amendments in June 2006).

[19] On 26 November 2019, Transnet requested via email specific information
regarding ‘all tests performed’ on ‘the already installed fence’ (the test request email).
In this regard, Transnet relied on Section C3 of the RFP, which stated:
‘1.3
Description of the works
1.3.1 The works shall conform to the following specifications:
This description of works covers Transnet Freight Rail specification for perimeter fencing and
the galvanising of the material. The material needs to comply to the below specifications and
proof has to be provided that the material was tested by Contractor as stated below. The
security fence tendered must comply to the below tests. The submission of the test results or
test certificates will be a condition precedent for concluding the contract.
CSIR Test
SABS Test 2536/YM139
SABS 064’

[20] This email was responded to by Tipp-Con on 28 November 2019. It provided
Transnet with a document drafted by Cochrane that detailed the specifications and
working drawings for the wire used to construct the fence. Cochrane assured Transnet
that ‘all steel material shall be of good commercial quality, galvanized steel. All pipes
shall be galvanized. . . Zinc coating shall be smooth and essentially free from lumps,

globs or points. Miscellaneous material shall be galvanized and Alu coated. And the
wire diameter will be 3mm’. On 29 November 2019, representatives from Tipp-Con,
Transnet, and Cochrane attended a meeting and site inspection at the location to,
amongst other things, inspect the fence that had been erected at that point (the
November site inspection). During the meeting, Transnet revealed that a third party
had complained that the tender sample submitted by Tipp-Con differed from the actual
fence being erected, and that the actual fence was not galvanized and did not conform
to the specifications. On the surface, the meeting was productive, and Tipp-Con
continued installing the fence. Additionally, Transnet agreed to pay Tipp-Con's second
invoice dated 30 October 2019. Payment was received for this invoice on 4 December
2019.

[21] Tipp-Con submitted a third invoice to Transnet for R7 211 800.40 on 26
November 2019, which was due by 15 December 2019. The invoice was not paid. On
20 December 2019, Transnet's construction sites closed for the annual holiday break,
and Tipp-Con was required to re-establish and resume work on 13 January 2020.
Approximately 57% of the work had been completed by that point. On 7 January 2020
the Project Manager for Transnet issued a ‘Early Warning Notification’, in accordance
with the contract, in which Transnet complained about the specifications of the fence
being installed. It was stated that the final offer submitted to Transnet on 10 April 2019
was for a fence with a 4mm diameter, but what had been installed was entirely
different, as the thickness/diameter of the wire ranged from 2.95mm and 4mm and the
posts were not H beams. Tipp-Con was consequently instructed not to 're-establish
the site' until a risk-reduction meeting had taken place.

[22] At the risk reduction meeting held on 14 January 2020, the complaint remained
about the installation of the fence. The Acting Chief Engineer of Transnet explained
that:
‘The meeting was called because it has come to Transnet’s attention that the fence that is
currently being installed on site at City Deep is not the same as the sample that was submitted
by Tipp-Con when they tendered for the work and were successfully awarded based on the
sample submitted’.

[23] Mr Barbarossa Ntshingila from Transnet's legal department attended the
meeting. The parties were unable to resolve their issues and Transnet informed Tipp-
Con that it should not resume work. In the interim, Tipp-Con inquired about the third
outstanding invoice. Transnet responded on 27 January 2020, stating:
‘The invoice number 3 of amount R 7 211 800.40 was not approved and signed due to decision
taken in our meeting held in City deep on 29 November 11:00 to stop all the payment until we
resolve the issue of quality and standard of fence that was installed.’

[24] On 28 January 2020, Transnet issued a 'Project Manager's Instruction'
instructing Tipp-Con to 'restart stopped work' and to immediately remove the fence
already installed and install the fence according to the specifications on which Tipp-
Con was 'awarded the contract'. On 3 February 2020 Transnet notified Tipp-Con of
alleged defects in the fence, more particularly, that the mesh panels were not hot dip
galvanized and did not comply with SANS121:2011 standard.

[25] On 9 March 2020, Tipp-Con gave notice of the dispute in accordance with the
dispute resolution provisions of the contract. On 25 June 2020, Tipp-Con collected two
mesh wire fence panels (approximately 3m by 3m) from the City Deep site and
delivered them to the 'Hot Dip Galvanizers Association (Southern Africa)' for analysis
and evaluation. According to their report (dated 1 July 2020), the wire was hot dip
galvanized and compliant with SANS675:2009. The adjudicator ruled in favour of Tipp-
Con on 7 August 2020, noting that the average of the wire measurements taken was
marginally less than 3mm, which was insignificant and de minimis. On 7 October 2020,
Transnet initiated the review application.

Delay in bringing the review application.
[26] The principles governing delay in self-reviews by state organs are well
established. The court assesses delay according to a two-step analysis. In step one,
the question is whether the state organ unreasonably or unduly delayed in bringing
the review. If not, the court proceeds to the merits. If the delay was unreasonable, the
court proceeds to the second step: Should the unreasonable delay nevertheless be
overlooked?2

2 Khumalo and Another v Member of the Executive Council for Education: KwaZulu-Natal [2013] ZACC
49; 2014 (3) BCLR 333 (CC); 2014 (5) SA 579 (CC); State Information Technology Agency SOC Ltd v

[27] There is no fixed period within which to bring a legality review. In Buffalo City
Metropolitan Municipality v Asla Construction (Pty) Ltd (Asla),3 the Constitutional Court
stated that ‘the proverbial clock starts running from the date that the applicant became
aware or reasonably ought to have become aware of the action taken’.

[28] The high court determined that Transnet became aware of the alleged non-
compliance with the RFP when Tipp-Con submitted its tender sample on 21 January
2019. Transnet waited approximately 20 months, until October 2021, to launch the
review application. The high court found that the delay was unexplained and dismissed
the review application.

[29] In determining whether the delay was unreasonable, a court engages in a
factual inquiry in the nature of a value judgment, taking into account the relevant
circumstances.4 It exercises a strict discretion, which intimates that a court of appeal
may only interfere if the discretion was not exercised judicially.

[30] The high court seemingly found that there was an unreasonable delay in
bringing the review, but failed to consider whether the delay should nonetheless be
overlooked. The high court erred in this regard, and it is thus open for this Court, as a
court of appeal, to assess the delay afresh.5

[31] Transnet’s first complaint in the review application and basis for setting aside
the award, is that Tipp-Con’s bid was treated as compliant whilst its tender sample
was not hot dip galvanized and therefore should have been disqualified at the pre-
qualification stage. To determine whether Transnet’s delay was unreasonable, it is
therefore necessary to establish the date when Transnet became aware, or ought to

Gijima Holdings (Pty) Ltd [2017] ZACC 40; 2018 (2) BCLR 240 (CC); 2018 (2) SA 23 (CC); Department
of Transport and Others v Tasima (Pty) Ltd [2016] ZACC 39; 2017 (1) BCLR 1 (CC); 2017 (2) SA 622
(CC); Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd [2019] ZACC 15; 2019 (6)
BCLR 661 (CC); 2019 (4) SA 331 (CC).
3 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd [2019] ZACC 15; 2019 (6) BCLR
661 (CC); 2019 (4) SA 331 (CC) para 49.
4 Gqwetha v Transkei Development Corporation Ltd and Others [2005] ZASCA 51; [2006] 3 All SA 245
(SCA); 2006 (2) SA 603 (SCA) para 24.
5 Malan and Another v Law Society of the Northern Provinces [2008] ZASCA 90; [2009] 1 All SA 133
(SCA); 2009 (1) SA 216 (SCA) paras 12-13.

have become aware, of the fact that Tipp-Con’s tender sample was not hot dip
galvanized.

[32] Transnet’s second complaint on review is that the contract was concluded
without the requisite submission of the test results under section C3 of the RFP, which
was a condition precedent to the conclusion of a valid contract. It is thus necessary
also to establish the date when Transnet became, or ought to have become, aware of
the alleged breach of the tender prescripts in this regard.  Its third complaint is that the
fence that was erected does not comply with the tender specification, Tipp-Con’s final
offer, and the contract concluded between the parties.  This requires a consideration
of when Transnet became, or ought to have become, aware of such failure. It is with
reference to these dates that Transnet’s obligation to initiate its self-review
proceedings arose.

[33] Ms Jabosigo, the Executive Manager: Legal (Litigation) for Transnet, deposed
to the company's founding affidavit. She stated that she became aware of the alleged
irregularities only after Transnet had lost the case before the adjudicator. However,
this is not the test. What matters is the knowledge of the institution, not that of the
deposing legal advisor.6

[34] The evaluation committee that evaluated the bids and scored Tipp-Con as
compliant were all employed by Transnet and consisted of Mr Thakhani Shai
(Transnet's Engineering Manager), Mr Viwe Mshuqwana (Transnet's Technical
Manager), and Ms Monique Lee (Transnet's Senior Engineering Manager). They had
the requisite knowledge at the time that the tender sample was submitted, that it was
not hot dip galvanized and not compliant with section T2.2-47 of the RFP. Yet,
Transnet failed to secure an explanation from any of these employees. In answer to
this, Transnet tries to divert the attention away from this failure, by casting aspersion
on the conduct of the evaluation committee in awarding the tender to Tipp-Con.
Transnet suggests that it must be clear to this Court that there must have been some
mischief or collusion of some sorts during the award of the tender between the parties
and that is why it acted against the ‘wrongdoer’, Mr Shai, who was dismissed by

6 See State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd [2017] ZACC 40; 2018
(2) BCLR 240 (CC); 2018 (2) SA 23 (CC) paras 45-46.

Transnet for misconduct during July 2021. It is for this reason it could not produce a
version from the evaluation committee.

[35] Firstly, Transnet’s case is not based on corruption or fraud. In its founding
affidavit, it distanced itself emphatically from any manifestations of collusion or
corruption. Second, Mr Shai was not fired for his role in awarding the tender. He was
dismissed for his post-award conduct in failing to ‘correctly implement the contract in
accordance with the award of the tender’ and for deviating ‘from the awarded
specification of 4mm fence contrary to what was specified in the first respondent's best
and final offer as approved and awarded by Transnet’. In other words, he was
dismissed for mishandling a contract that (on Transnet’s case) should not have been
awarded. Thirdly, it does not explain why the other two officials who were part of the
evaluation committee and not disciplined for any misconduct were not approached to
give an explanation.

[36] In City of Cape Town v Aurecon South Africa (Pty) Ltd, 7 the Constitutional Court
rejected the explanation for the delay in instituting a self-review under similar
circumstances:
‘The distinction that the City attempts to draw between what is within its own knowledge and
what is within the knowledge of its committees is superficial. It is common cause that the BEC
and the BAC are committees mandated by the City for purposes of the tender procurement
process. These committees form part of an internal arrangement by the City. Accordingly, it
may reasonably be expected that all information regarding the tender process which is within
the knowledge of the BAC or BEC, may be deemed to be within the City’s knowledge. In my
view, that is a weak attempt by the City to deny knowledge of what it ought reasonably to have
known.’

[37] There is no legally relevant distinction to be drawn between Ms Jabosigo and
other officers of Transnet who had the requisite knowledge. The first complaint, that
the tender sample submitted was not hot dip galvanised, was raised for the first time
in the review application. As noted earlier, it was not a complaint before the adjudicator

7 City of Cape Town v Aurecon South Africa (Pty) Ltd [2017] ZACC 5; 2017 (6) BCLR 730 (CC); 2017
(4) SA 223 (CC) para 39.

and there is no explanation from Ms Jabosigo, or any member of the evaluating
committee as to why the alleged irregularity was not discovered and acted upon
earlier. This, even though Tipp-Con made no attempt to hide the fact that its tender
sample was not hot dip galvanised. Quite the contrary, it drew specific attention to this
fact and tendered rectification.

[38] As to the second complaint - that the test results were not submitted prior to the
contract being concluded - Transnet was aware of this alleged irregularity as early as
26 November 2019, the date the test request email was sent. In a similar vein, the
complaint that the fence erected did not comply with the tender specifications, the final
offer and the contract, was within Transnet’s knowledge prior to 28 November 2019,
when it was discussed at the November site inspection. The nearly year-long delay by
Transnet in initiating the review of the contract on these grounds remains unexplained.
Transnet maintained its stance in the arbitration despite having knowledge of at least
the third complaint upon review and having a reasonable expectation of being aware
of the others. It delayed initiating the review until it could no longer contest the
adjudicator’s award. Likewise, no explanation exists for the delay that this has caused.

[39] In the absence of any explanation from the evaluation committee or any of the
other officials that were involved in the meetings with Tipp-Con after the award of the
tender means that Transnet’s delay is unexplained. As remarked in Asla, if there is an
explanation for the delay, it must cover the entirety of the delay. If there is no
explanation for the delay, it will be necessarily unreasonable.8 In these circumstances
the delay was unreasonable.

Should the delay be overlooked?
[40] It is trite that for the efficient functioning of public bodies, a challenge to the
validity of their decisions by judicial review should be initiated without undue delay.9 In
Asla, it was emphasized that the approach to overlooking a delay in a legality review
is a flexible exercise that entails a legal evaluation considering a number of factors:

8 Asla para 52. See also Special Investigating Unit and Another v Engineered Systems Solutions (Pty)
Ltd [2021] ZASCA 90 (SCA) para 29.
9 Merafong City Local Municipality v AngloGold Ashanti Limited 2017 (2) SA 211 (CC), para 74, citing
Khumalo v Member of the Executive Council for Education: KwaZulu-Natal 2014 (5) SA 579 (CC) at
para 39-73.

Potential prejudice to affected parties as well as the possible consequences of setting
aside the impugned decision; the nature of the impugned decision, which essentially
requires a consideration of the merits of the legal challenge against that decision; and
the conduct of an applicant, taking into account that an organ of state is subject to a
higher duty to respect the law.10

The egregiousness of the alleged irregularities
[41] The review is, at its essence, about the tender sample provided by Tipp-Con
during the tender evaluation process. Transnet's first complaint is that the tender
sample was not hot dip galvanized, which was a requirement of the RFP. Notably, the
adjudicator has determined that the fence being erected conformed to the terms of the
contract and that it has been hot dip galvanized. The non-compliance with the RFP
was certainly not egregious. It had no adverse effect on the tender specifications or
the public purse and Tipp-Con had not displayed any improper conduct. In fact, Tipp-
Con drew attention to the issue, explained the shortcoming and confirmed that the
fence supplied would be hot dip galvanised as required. The evaluation committee
accepted this submission. As noted earlier, the lengthy delay on the part of Transnet
until it sought to review the award of the tender on this basis is unexplained. It is difficult
to escape the inference that the complaint was an afterthought called into action in an
effort to avoid the binding arbitration award in Tipp-Con’s favour.

[42] Furthermore, whilst it is so that ‘the test for irregularities and their import’ should
not be conflated,11 the ancient de minimis non curat lex – the law does not concern
itself with trifles – principle is an established part of our law.12 Looking at the totality of
the facts present here, this is a classic case where the de minimis non curat lex

10 In State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd [2017] ZACC 40; 2018
(2) BCLR 240 (CC); 2018 (2) SA 23 (CC), the Constitutional Court held that even where there is no
basis for a court to overlook an unreasonable delay, the court may nevertheless be constitutionally
compelled to declare the state's conduct unlawful (the Gijima principle). In Asla, Theron J recognised
the conflict between the Gijima principle and established principles regarding delay and remarked that
the Gijima principle must be interpreted narrowly and restrictively so as not to undermine the valuable
rationale underlying the rules on delay. This is achieved by balancing the objectives of the rules on
delay with those objectives of declaring unlawful conduct as such.
11 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South
African Security Agency and Others [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR (CC) paras
22, 28-9 and 56.
12 See: Cora Hoexter & Glenn Penfold Administrative Law in South Africa (3rd ed) at 546-7, 640 and
727, and the authorities therein referred to by the learned authors.

principle should be applied as far as the defect with Tipp-Con’s tender sample is
concerned.

[43] Additionally, Transnet complains that the submission of certain test results
(mentioned previously) was a condition precedent to the signing of the contract. It is
argued that due to the fact that the condition precedent was not met, the contract is
unlawful and should be set aside.

[44] On the facts, this argument is without merit for mainly three reasons: First,
Transnet had provided no evidence that it was ever concerned about the test results
prior to the contract's conclusion. It did not request these test results and there is no
allegation that Tipp-Con refused to provide them or was unable to do so. Second, the
contract was signed by Transnet. As with the first complaint, it provided no explanation
from any of the employees involved for why it signed before obtaining the test results.
There is no allegation that it was due to corruption or misrepresentation by anyone.
Without an explanation of why it signed, Transnet must accept responsibility for its
conduct. Third, on 13 September 2019, prior to the signing of the contract, Transnet
selected one of the samples to be erected (after inspecting their physical properties)
and instructed Tipp-Con to procure the materials for the erection of the selected
sample. Not only was it uninterested in the test results, but it also disregarded their
necessity.

[45] The third complaint from Transnet is that the contract between the parties was
different from the RFP, Tipp-Con’s bid, and its final offer. Therefore, so it is argued,
the contract ought to be set aside. The RFP itself contemplates that negotiations may
take place after the award of the tender. This was recognised by Transnet in its letter
of award dated 7 August 2019 referred to earlier. The letter of award came after Tipp-
Con’s final offer, which was made to Transnet on 10 April 2020. Tipp- Con’s final offer
(including the 4mm specification) was thus subject to negotiation. In circumstances
where the contract concluded is what was provided for in the RFP, there can be no
complaint that the contract breached the RFP or s 217 of the Constitution.

[46] In any event, as All Pay13 explains, not all deviances from the requirements of
a tender are material and require a declaration of illegality. An immaterial irregularity
does not establish a ground for review. The materiality of a deviation is gauged by
linking the question of compliance with the purpose of the provision. On the facts of
this case, the purpose of the tender was achieved: Transnet was supplied with a fence
that was hot dip galvanised; the diameter of the wires for all material purposes met the
requirements of the RFP; Transnet itself was satisfied with the superior quality of the
fencing it chose; Transnet secured the benefit of the superior fencing without additional
cost; and no other parties have been shown by Transnet to have been unfairly
prejudiced in the process that was followed. To the extent that there were any
deviations regarding the contract (or indeed in the grant of the tender), they were
immaterial.

Prejudice
[47] There are three categories of affected parties when assessing prejudice: the
state organ, the successful bidder, and the public. Transnet contended that it will be
prejudiced if it is compelled to accept a 3mm fence when Tipp-Con referred to a 4mm
fence in its bid and its final offer.

[48] The alleged prejudice Transnet complains about is attributable to the terms of
the contract and not to the awarding of the tender. Transnet cannot get away from the
fact that a 3mm fence was at all material times considered by it to be sufficient. That
is why the specification in the RFP was 3mm and why the contract refers to a   3mm
diameter fence. Transnet ignores this matter. It is incomprehensible that Transnet
could suffer any prejudice when it solicited bids for the supply of a 3mm fence and
ultimately contracted for exactly that. It did so after inspecting the erected samples
and satisfying itself of the quality. It then pronounced the selected fence to be superior.
The selection of the fence that was erected resulted in no change to the contract price.
In other words, Transnet paid the original negotiated contract price for a product that
it regarded as superior.

13 Ibid, paras 22, 28.

[49] Then, Transnet participated in the adjudication proceedings. In those
proceedings, there was no tender sample-related complaint. The complaint concerned
the installation of the fence. This position was made clear in Transnet's notice of
dissatisfaction, which outlined the grounds for appeal: (1) The fence should have been
hot dip galvanized; and (2) The adjudicator ought to have found that the ‘fence does
not comply with the specification provided for in the agreement’. The adjudicator found
the fence to be hot dip galvanised and any deviation from the 3mm diameter to be so
minor as to be de minimis.  It was only when the adjudicator held that Tipp-Con is
entitled to payment that Transnet raised an issue about the tender sample.

[50] Whilst no prejudice had been established by Transnet, Tipp-Con had shown
that it is not only suffering potential prejudice, but actual prejudice. To perform under
the contract Tipp-Con had incurred obligations. It owes approximately R 4 210 000 to
its suppliers. About 57% of the work, at a cost to Tipp-Con of more than R22 500 000
had been finalized. To date it has been paid R10 400 000, approximately only a third
of what it is owed. For as long as Transnet continues to delay payment to Tipp-Con, it
cannot pay its suppliers. It has been listed as a ‘defaulter’ by a credit insurer which
can potentially have a devastating effect on its viability. Tipp-Con’s directors are also
at risk of sanction under the Companies Act 71 of 2008.14 This imperils Tipp-Con’s
very existence.

[51] When it comes to the third category of affected persons (the public), counsel
for Transnet argued that it is in the public interest to overlook the delay and entertain
the review application. In support of this contention counsel relied, amongst other
cases, on Passenger Rail Agency of South Africa v Swifambo Rail Leasing (Pty) Ltd
(Swifambo).15 However, the facts in Swifambo are completely distinct from the facts in
the present case, so relying on this case is erroneous. In that matter, the court dealt
with multiple allegations of bid-rigging, collusion, and corruption. On appeal, this Court
observed that neither party was innocent and that the awarding of the contract to
Swifambo was corrupt.16 The delay was therefore excused in the interest of good

14 Sections 22 and 218 (2) of the Companies Act, 2008.
15 Passenger Rail Agency of South Africa v Swifambo Rail Agency (Pty) Ltd [2017] ZAGPJHC 177;
[2017] 3 All SA 971 (GJ); 2017 (6) SA 223 (GJ). Upheld on appeal Swifambo Rail Leasing (Pty) Ltd v
Passenger Rail Agency of South Africa [2018] ZASCA 167; 2020 (1) SA 76 (SCA).
16 Swifambo Rail Leasing (Pty) Ltd v Passenger Rail Agency of South Africa [2018] ZASCA 167; 2020

governance and justice.17 In the present case, Transnet denied relying on fraud or
corruption during the procurement process. Tipp-Con played open cards by disclosing
to Transnet that the tender sample was not hot dip galvanized when it submitted its
bid. Upon examining the full-size samples, Transnet chose the sample with ‘excellent
technical features’ and ‘superior to the product described in the works information’.
There are no facts to the contrary.

[52] In the present case, the alleged irregularity in the awarding of the contract does
not warrant judicial intervention ‘in the interests of justice and in the public interest’
and the ‘interests of clean governance’.18 The public interest overwhelmingly favours
Tipp-Con. City Deep Terminal is the largest land-based container port in the country
and its security indirectly affects the economy of the country. According to Transnet,
completion of the fence is urgent because an incomplete fence exposes Transnet's
assets to ‘increased criminal activity’. If this Court disregards Transnet's unreasonable
delay and set aside the tender award and contract, Transnet will be required to reissue
the tender and remove the already-erected fence. That would inevitably result in
significant delays and expenses.

Transnet’s conduct in the matter
[53] Consideration of Transnet’s conduct is an important factor in deciding whether
to overlook an unreasonable delay. As an organ of State, Transnet has a heightened
obligation to act properly.19

[54] Transnet not only delayed unreasonably, but also acted in an unreasonable
manner. It did not adhere to the constitutionally prescribed standard for state actors
and did not respect the rights of Tipp-Con. It refused to recognize the outcome of an
adjudicative process in which it had voluntarily participated. In fact, in the adjudication
before the adjudicator, Transnet sought to enforce the very contract it now seeks to

(1) SA 76 (SCA) paras 41-42.
17 Ibid, with reference to Aurecon South Africa (Pty) Ltd v Cape Town City [2015] ZASCA 209; [2016] 1
All SA 313 (SCA); 2016 (2) SA 199 (SCA).
18 Ibid.
19 Member of the Executive Council for Health, Eastern Cape and another v Kirland Investments (Pty)
Limited t/a Eye & Lazer Institute [2014] ZACC 6; 2014 (5) BCLR 547 (CC); 2014 (3) SA 481 (CC) para
82, see also Special Investigating Unit and Another v Engineered Systems Solutions (Pty) Ltd [2021]
ZASCA 90; [2021] 3 All SA 791 (SCA); 2022 (5) SA 416 (SCA).

annul. The only issue was the fence's alleged lack of hot dip galvanization and the
wire diameter. The adjudicator has rejected both issues.

[55] Having lost the preceding argument, Transnet seeks to circumvent the
adjudicator’s conclusion by focusing on the tender sample. It wants the court to
disregard all of Transnet's prior actions, including its decision to enforce the contract.
This conduct by Transnet is opportunistic, especially when concerns have been raised
in this Court about the growing reliance on legality reviews by state organs where
corruption is not involved. In Altech Radio Holdings Pty Ltd and Others v City of
Tshwane Metropolitan Municipality,20 Ponnan JA remarked as follows:
‘Search hard enough in public procurement cases, such as this, and one will surely find
compliance failures along the way. There will seldom be a public procurement process entirely
without flaw. But, perfection is not demanded and not every flaw is fatal. Nor does every flaw
in a tender process amount to an irregularity, much less a material irregularity. Public contracts
do not fall to be invalidated for immaterial or inconsequential irregularities. Indeed, as it has
been put, “(n)ot every slip in the administration of tenders is necessarily to be visited by judicial
sanction”.’

[56] Transnet cannot escape the facts. There is much to be said in response to Tipp-
Con's counsel's assertion that Transnet did not initiate the review because it sought to
vindicate clean and open governance, but rather to evade its contractual obligations.
Transnet was represented by the same attorneys before the adjudicator, who now
advised it to review the award of the tender. It is only after Transnet realized that it
could not appeal the decision of the adjudicator that, for the first time, it complained
about the tender sample and asserted that it was not hot dip galvanized.

[57] This is a cynical self-review. The purpose of an organ of state's self-
review should be to promote open, responsive, and accountable governance.
Transnet is required to promote these goals through its actions. Given the prejudice
suffered by Tipp-Con, the nature of Transnet’s complaints, the fact that the
irregularities were not egregious, and the unconscionable conduct of Transnet, the
unreasonable delay cannot be overlooked.

20 Altech Radio Holdings Pty Ltd and Others v City of Tshwane Metropolitan Municipality [2020] ZASCA
122; 2021 (3) SA 25 (SCA) para 54.

[58] In the result the following order is made:
The appeal is dismissed with costs, including the costs of two counsel.

_________________________
L WINDELL
ACTING JUDGE OF APPEAL

Siwendu AJA dissenting (Petse DP concurring):

[59] I have read the judgment by my colleague, Windell AJA (the main judgment).
Regrettably, I take a divergent view to the facts and the merits before the high court.
As a result, I differ in the approach to the exercise of the value judgment and discretion
to determine whether the Court should overlook the delay. In my view, the facts
overwhelmingly support a contrary finding that there was no delay, and if there was, it
was not unreasonable21 and it should therefore be overlooked. Besides, the
irregularities complained of cannot be considered in isolated components. They must
be viewed cumulatively to weigh their overall effect on a fair and transparent tender
process. I am constrained to write separately to explain the reasons for my
departure.22

[60] It has been consistently held that lawful procurement is patently a constitutional
issue.23 Although stated in the context of a PAJA review, in Allpay Consolidated
Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African
Social Security Agency and Others,24 Froneman J remind courts that:
‘The suggestion that “inconsequential irregularities” are of no moment conflates the test for
irregularities and their import; hence an assessment of the fairness and lawfulness of the
procurement process must be independent of the outcome of the tender process . . .
. . .
The proper approach is to establish, factually, whether an irregularity occurred . . .
. . .
This legal evaluation must, where appropriate, take into account the materiality of any
deviance from legal requirements . . . the potential practical difficulties that may flow from
declaring the administrative action constitutionally invalid must be dealt with under the just and
equitable remedies provided for by the Constitution and PAJA . . .

21 State Information Technology Agency SOC Limited v Gjiima Holdings (Pty) Limited [2017] ZACC 40;
2018 (2) SA 23 (CC); 2018 (2) BCLR 240 (CC) (Gjiima).
22 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Limited [2019] ZACC 15; 2019 (6)
BCLR 661 (CC); 2019 (4) SA 331 (CC) (Buffalo City) para 48.
23 Buffalo City supra para 35, referring to Steenkamp NO v Provincial Tender Board of the Eastern Cape
[2006] ZACC 16; 2007 (3) SA 121 (CC); 2007 (3) BCLR 300 (CC) (Steenkamp) para 20. See also
Minister of Finance v Afribusiness NPC [2022] ZACC 4; 2022 (4) SA 362 (CC); 2022 (9) BCLR 1108
(CC) para 19. Allpay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South
African Social Security Agency [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR 1 (CC) (Allpay)
para 4.
24 Allpay supra paras 22, 28, 29 and 56.

. . .
Once a finding of invalidity under PAJA review grounds is made, the affected decision or
conduct must be declared unlawful and a just and equitable order must be made.’

[61] It is necessary to place the irregularities complained of in their proper context.
Transnet mounted a two pronged attack of the decisions taken, before and after the
award of the tender to Tipp-Con. The particulars of the irregularities are in respect of:
(a) the sample submitted by Tipp-Con, which rendered the bid a ‘non-responsive
tender’; (b) Tipp-Con’s Best Final Offer (BFO) for a 4 mm x 4mm wire diameter fence
contrasted with; (c) the final terms of the NEC contract providing for a 3mm wire
diameter, which differed from the terms of the RFP and the BFO. The complaint after
the award of the tender concerns the implementation and installation of a fence of
between 3mm and 2.96mm. This was at variance from the terms of (a) the tender
specification, (b) the BFO and (c) the final NEC contract.

[62] The appeal raises important questions of public procurement law which involve
(a) the compass of the right to ‘negotiate’ the NEC contract contemplated in the RFP
after the award of the tender on terms outside those contemplated in the RFP, (b) if
such a right exists, who in the tender adjudication process has the authority to do so.
In the present matter, these questions implicate who had the right to negotiate or
authorise the selection of a fence other than the persons authorised to evaluate the
tenders. Another important question raised is whether this Court on appeal can,
without more, rely on the conclusion made by the Adjudicator that ‘any deviation from
the 3mm diameter to be so minor as to be de minimis’ as the reason to deprive
Transnet the right to a review.

[63] The Constitutional Court in Buffalo City Metropolitan Municipality v Asla,25
comprehensively clarifies the approach to delay in a self-review and lays to rest any
previous misconception that delay and the merits are discrete inquiries.26 This Court
in Valor IT v Premier, North West Province and Others27 pointed to a ‘factual, multi-

25 Buffalo City fn 2 para 40.
26 Buffalo City fn 2 paras 56 to 59 refers to other decisions as well.
27 Valor IT v Premier, North West Province and Others [2020] ZASCA 62; [2020] 3 All SA 397 (SCA);
2021 (1) SA 42 (SCA) para 30; also referred Department of Transport and Others v Tasima (Pty) Ltd
ZACC 39; 2017 (2) SA 622 (CC); 2017 (1) BCLR 1 (CC) para 144 and Khumalo and Another v MEC

factor and context-sensitive inquiry — in which a range of factors — the length of the
delay, the reasons for it, the prejudice to the parties that it may cause, the fullness of
the explanation, the prospects of success on the merits — are all considered and
weighed before a discretion is exercised one way or the other’ come into play.

[64] In the present matter, factors relevant to the question of delay, the
reasonableness thereof and whether it should be overlooked call into the inquiry: (a)
when the deviations occurred during the procurement process, (b) the manner in which
they occurred and (c) their materiality and cumulative effect on the overall tender
process. It merits emphasis that the bulk of the deviations occurred after the award of
the tender. Given the view I take, it is necessary to amplify additional relevant facts to
elucidate the points of departure from the main judgment.

[65] A discernment of the role of Transnet, as the holding company and custodian
of the group’s constitutional obligations, on the one hand, and Transnet Freight Rail
(TFR), a division of Transnet on the other is material in this case. TFR is the division
responsible for the rail transport of commodities for exports within the regional and
domestic markets. City Deep, Kascon and Kaserne, for whose benefit the security
fencing tender was procured, form part of the corridor of inland container terminals
managed by TFR. This is a crucial factor that has not been addressed in the main
judgment. Whilst the invitation for the bids admittedly went out in the name of Transnet,
there can be little doubt – a fact that emerges from the record – that TFR was in fact
at the forefront of the entire bidding process from beginning to end. I elaborate on this
in the paragraphs below.

[66] Although Transnet ‘as employer’ published the invitation to tender (RFP) for the
contract, it assigned TFR to act as ‘its agent’ to manage the tender evaluation process.
The bids were submitted to the TFR RME Acquisition Council. On 30 January 2019,
Mr T Shai (Project Manager); Ms M Lee (Senior Engineering Manager) and Mr V
Mshuqwana (Technical Manager) all employees at TFR, evaluated the bids. After the
evaluation, on 11 July 2019, the Transnet Head Office Acquisition Council (TAC)

for Education, KwaZulu-Natal [2013] ZACC 49; 2014 (3) BCLR 333 (CC); (2014) 35 ILJ 613 (CC); 2014
(5) SA 579 (CC) para 44.

supported recommendation to award the tender to Tipp-Con. The resolution by the
Head Office Acquisition Council records that:
‘The matter was before the Council previously in terms of which permission was sought to
negotiate the contract value with the recommended bidder. The CFET reported to the Council
that they had managed to negotiate with the bidder and ultimately obtain a savings of
R 4 862 450.79. The amended contract value thus came to R 34 371 970.15 and the approved
budget was thus adjusted to R 39 155 322.00.’ (Emphasis added.)

[67] The letter dated 7 August 2019, confirming the award and the terms thereof
advised Tipp-Con that, Mr Thakhani Shai (Mr Shai), an employee at TFR, was the
‘initial point of contact’. The letter reflects the ambit of Mr Shai’s responsibilities thus:
‘Management issues:
a)
. . .

performance monitoring of Supplier;

day-to-day service provider arrangements such as premise access and security
issues;

statutory compliance issues such as occupational health and safety, environmental,
industrial and human resources management issues;

payments and remuneration arrangements including invoice processing…’
The letter is consistent with the assignment of the implementation of the tender by
Transnet to TFR.

[68] The review proceedings were brought by the Executive Manager: Legal
(Litigation) of Transnet as the principal, and not by TFR. In the founding affidavit,
Transnet stated amongst others that the employees involved misrepresented the
status of the sample to the TAC, and certified that the sample was hot dip galvanised
when it was not. Tipp-Con’s tender was not a ‘responsive tender’. The Acting Head of
Litigation employed within the TFR division, filed a further affidavit in support of the
review by Transnet, detailing steps taken after the irregularities were uncovered. The
thrust of the further affidavit is that Transnet was misled to make an invoice payment
of R10 467 106.67 for a product which was not in accordance with the scope of work
it had assigned or the BFO it had accepted, flowing from the open tender process. She
confirmed that the resultant contract ought not to have been implemented in the
manner it was.

[69] Tipp-Con did not dispute the above averments. Instead, it focused on the
question of balance convenience, the prejudice it had endured, and the remedy.
However, as All Pay tells us, those matters are, as a matter of law, appropriately
considered and only germane in a separate inquiry and engage the remedial powers
of a court after the decision on the question of invalidity has been made.

[70] Insofar as it is said Transnet’s TAC approved the ‘non- responsive’ sample, I
am not persuaded that the TAC itself engaged the compliance aspects of the tender
before supporting the recommendation of Tipp-Con.28 The record of its deliberation
appeared to confine its involvement to financial negotiation, correctly, to ensure that
value for money accrued to Transnet. Transnet’s assertion that there was a
misrepresentation of compliance with the tender prescript by the employees of TFR
must be accepted. It must be viewed in the light of the principle in Chairperson,
Standing Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and
Others.29 In that case, the Court held that an acceptance by an organ of State of a
tender which is ‘not acceptable’ within the meaning of the prescribed legal framework
is an invalid act and falls to be set aside. Although that case dealt with the Preferential
Act, it makes clear that the requirement of acceptability is a threshold requirement.30
Regardless of the reasons for how it came about that Tipp-Con’s tender was accepted
it cannot, from what emerges from the record, however be gainsaid that it was patently
‘non-responsive’.

[71] Even if it said that Transnet is estopped from relying on the non-responsive
tender on account of the sample, that is not the end of the inquiry. The approach to
overlooking a delay in a legality review is flexible.

28 The resolution by the Head Office Acquisition Council records that: . . . ‘The matter was before the
Council previously in terms of which permission was sought to negotiate the contract value with the
recommended bidder. The CFET reported to the Council that they had managed to negotiate with the
bidder and ultimately obtain a savings of R4 862 450.79. The amended contract value thus came to
R34 371 970.15 and the approved budget was thus adjusted to R39 155 322.00.’ (Emphasis added.)
29 Chairperson: Standing Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others
[2005] ZASCA 90; 2008 (2) SA 638 (SCA); [2005] 4 All SA 487 (SCA).
30 Ibid para 11.

[72] Transnet stated that it was alerted to the irregularities by the contents of the
statement of claim filed by Tipp-Con in the arbitration proceedings. The deponent
states that she became aware of the irregularities after the adjudication process, which
prompted her investigation. A belated investigation and consequent discovery of
tender irregularities is not uncommon. In Swifambo Rail Leasing (Pty) Ltd v Prasa31
the review was brought some 793 days late. Although the length of the delay in the
present review is not comparable, and the period in the present case shorter, a lengthy
period is not in and of itself a bar to overlooking the delay.

[73] Significantly, TFR employees attended to the adjudication process which
completed on 7 August 2020. They claim to have received the ruling dated 4 August
2020 on 7 August 2020. They filed the notice of dissatisfaction with the Adjudicator’s
determination on 7 September rather than on 4 September 2020, thereby denying
Transnet the right to appeal the award. The above facts ineluctably point to yet another
mismanagement of the process by the employee (s) concerned and should not deprive
Transnet the right to a review.

[74] Furthermore, Transnet was not a direct participant in the arbitration process. It
looked at the irregularities retrospectively, similarly to the Prasa board in Swifambo.
Its unchallenged version in that regard must be accepted. The effect is that the
‘proverbial clock’ for computing the delay started ‘ticking’ from the date of the
completion of the arbitration, on 7 August 2020. Transnet instituted the review
application in October 2020. On the strength of the Court’s decision in Buffalo City,
there was no delay, alternatively, the delay was not undue or unreasonable.

[75] Even if it is found that the delay was undue or unreasonable which was not the
case here, that does not bring an end to the inquiry in a legality review. Skweyiya J
explained in Khumalo32 that ‘[a]n additional consideration in overlooking an
unreasonable delay lies in the nature of the impugned decision’. This entails analysing
the impugned decision and considering the merits of the legal challenge made against
that decision. The bulk of the irregularities of which Transnet complains occurred after

31 Swifambo Rail Leasing (Pty) Limited v Passenger Rail Agency of South Africa [2018] ZASCA 167;
2020 (1) SA 76 (SCA).
32 Khumalo fn 9 para 57.

the award of the tender, evidently, after the meeting of the TAC on 11 July 2019. How
the deviations pertaining to the installation of the fence occurred is important.

[76] It should be recalled that the letter of award envisaged that the start date of the
contract would be 16 August 2019, and the completion date 17 March 2020. According
to Tipp-Con, Transnet ‘approved’ the choice of a different sample on 13 September
2019, a month before the contract was signed. TFR signed the contract on 30 October
2019, and furnished it to Tipp-Con on 31 October 2019. Yet, the different sample
ostensibly ‘authorised’ before the signature of the contract was not embodied in the
subsequent contract. Tipp-Con conceded that its final offer was not carried over to the
NEC Contract, a matter I return to later. In any event, part of the complaint is that the
NEC contract deviated from the RFP.33

[77] Tipp-Con’s defence is that: ‘it had put up various samples and what it installed
was selected by Transnet’. It explains the background to the selection of a sample
other than the sample provided in the RFP or its BFO in this manner:
‘[C]oncerns were raised about Tipp-Con’s capacity to perform on time and Transnet enquired
from Tipp-Con who the supplier would be for the fencing material. It was suggested that an
inspection of Tipp-Con’s material supplier’s manufacturing facilities be conducted (so as to
inspect capacity and quality control procedures), given that Tipp-Con had indicated that it had
engaged more than one supplier at the time.’

[78] The first official engagement between Transnet and Tipp-Con after the award
of the tender occurred at a ‘project kick- off’ meeting on 28 August 2019. The concerns
referred to in the answering affidavit were not recorded in the minutes of the ‘project
kick-off’ meeting. The first reference to a need to install samples is in correspondence
from Tipp-Con dated 4 September 2019, by Mr Madiri (of Tipp Con) who wrote to Mr
Shai stating:
‘…We would like our suppliers to erect the fencing samples for your approval. This process
will assist the Quality Control of the fence to be erected. May you let us know the person to
coordinate this with and the place where we can construct the sample. Also indicate the sizes
and detail which must be shown by the samples.

33 Passenger Rail Agency of South Africa v Swifambo Rail Agency (Pty) Ltd 2017 (6) SA 223 (GJ) at
245.

Once we receive the details requested we will inform you the date for the sample construction.
However at the moment, we would like the supplies to erect the sample early next week on
Tuesday the 10th of September 2019 and then review them, the following day, the 11th
of September 2019 . . .’ (Emphasis added.)
Mr Shai wrote in reply on 9 September 2019.
‘Please use the sizes that are on the tender document including the specification.
You can erect the sample fence at the gate where we have a kick off meeting in City deep
terminal.’

[79] Of the two meetings recorded in Tipp-Con’s ‘meeting notes’ on 13 September
2019, the first of which was at the premises of a supplier, only two of TFR’s
representatives attended these meetings. There is no explanation why a meeting to
‘verify the production capacity’ of suppliers occurred after the award of the tender.
Since the tender had already been awarded, such a step is illogical. Members of the
bid evaluation structure were not present. Be that as it may, the recorded extract of
‘meeting notes’ supplied by Tipp-Con states that:
‘On the same day, Transnet’s representative selected one of the samples (after having
inspected their physical properties) to be erected on the sites and Tipp-Con was instructed to
proceed with the procurement of the materials for the erection of the sample so selected,
which had a mesh wire diameter of 3mm horizontal wire and 4mm vertical wire, and 13mm
vertical flat bar per section.
. . .
The Transnet representatives led by the Transnet Project Manager (Mr T Shai) identified and
approved Sample No 1 erected onsite, which also complied with the minimum tender
requirements. (Emphasis added.)
VN as the user client indicate that [the] he approves sample No 1 as it was economic in terms
of maintenance and possibility for other suppliers to be considered for supplying the size of
the panel. The modular joint provided extra rigidity and a solid joint to the panel. The 8mm flat
bar provided more steel and increased the delayed cutting time and the double posts improved
the stability of the fencing system.’

[80] On the other hand, the minutes of the risk reduction meeting attended by TFR
representatives on 14 January 2020 recorded that:
‘Mr. Siala stated the following: Post the award there was an issue whereby Tipp-Conn had to
engage with the technical team and during that time Tipp-Conn realised that there were other

things that they did not foresee. The Project Manager, Mr Shai requested that we install the
sample after we had a kick-off meeting attended by all the Stakeholders from Security and
end users. They emphasized that because it was a high risk area, security was of the utmost
importance. When we were requested to present a sample of what we were going to do we
then proposed two products that could be installed bearing in mind what the minimum
requirement should be. So we brought in these samples (Mr. Siala showed the samples to the
meeting). We had an alternative product which we considered to be a better product for such
a high risk security area. Mr. Siala said after he showed the two samples to the team on site
and demonstrated that the second sample is stronger and more durable, he then suggested
that this product would be better to install. Subsequently the sample was approved where-
after installation took place. In November 2019 we were questioned why we are installing
something different from the original sample and we responded that the product being installed
has much stronger features than the original sample.’ (Emphasis added.)

[81]  Tipp-Con unilaterally offered an alternative product outside of the sanctioned
tender process which was accepted by people who were not authorised. The
impression is that it had not fully considered the technical implications of its offer.
There is no evidence that Transnet as the principal authorised the deviations after its
acceptance of Tipp-Con’s BFO. Even if it did, the finding by this Court in State
Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd34 is that an organ
of state did not have the authority to contract outside of a competitive bidding process,
to do so contravenes s 217 of the Constitution. That it must comply with a mandatory
and material procedure prescribed has not changed, and applies with equal force in
this matter. All this falls to be evaluated against Tipp-Con’s undertaking during the
price negotiations and in the light of the price reduction it offered.

[82] The question of the ‘materiality’ of the deviations as well as that of Transnet’s
participation in the arbitration process has a twofold effect on the merits of the review
and why the Court should overlook the delay. Tipp-Con stated that: 'the 3 mm wide
diameter is within the tolerance of +/- 0.08 mm diameter as indicated by SANS
675:2011. In contrast, the tender evaluation criteria required that ‘panel and fixtures
shall be hot dipped galvanised coatings on fabricated steel SANS 121:2011.’ Tipp-

34 State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd [2016] 4 All SA 842 (SCA)
para 21.

Con in its bid undertook that “the actual panels and fixtures will be hot dip galvanised
coated on fabricated steel. Ref. SANS 121:2011.” The report by the GP Galvanizers
Association Southern Africa dated 1 July 2020 states that from the results of the
laboratory tests, they could surmise that on both panels the horizontal wires were
galvanized to SANS 675:2009-Class D, since the masses of about 60-80g/ correlate
to the requirements of this standard. On 3 February 2020, Ms Ndletyana confirmed
the non- compliance with SANS 121:2011. Even though I make no definitive finding in
this regard, these facts point to questions about the grade and quality of the product
offered to Transnet and installed at the premises. They are in addition to the complaint
about the ‘non-responsive’ tender. Thus, all of these shortcomings cannot redound to
the benefit of Tipp-Con.

[83] Prior to the negotiations after its selection as a preferred bidder, Tipp-Con’s
tender price was considered ‘above market related prices’. Tipp-Con’s BFO offer of
R34 371 970.15 entailed a reduction in its initial preliminary and general price by
R4 827 073.23. It stated that:
‘It should be noted that we have not made any changes to the Technical specification in our
offer. We are offering the High Quality Steel welded wire mesh Fencing with a 4mm wire
diameter and with Aperture of 12 x76mm and using the H-beam Posts’.

[84] As is now common cause, what Tipp-Con ultimately installed varied from its
BFO and as noted above, also varied from the quality assurance standard. That brings
me to the finding by the adjudicator that the variance was a ‘deminimis deviation’ and
the acceptance of this finding in the main judgment. The arbitration process was
conducted on paper without hearing evidence. In view of Transnet’s complaints and
their cumulative effect on the tender process and the impugned contract, such a
finding can only be supported if it was based on a proper consideration of inter alia
the: (a) agreed contract price; (b) impact on the direct cost of the fence; (c) effect on
the margin after the reduction of the bid contract price and (d) the incentive for Tipp-
Con to cut its costs to improve its margin. Accordingly, notwithstanding the differing
quality standard, the consequence of Tipp-Con’s defence, that 'the 3 mm wide
diameter was within the tolerance of +/- 0.08 mm diameter as indicated by SANS
675:2011, albeit on a SANS standard not stipulated in the RFP was never tested. In
my view, a determination of whether there was an incentive to cut costs and benefit

Tipp-Con’s margin on the one hand or whether on the other hand, Transnet
nevertheless obtained value for money, would have been necessary prior to
concluding that the deviation is ‘deminimis deviation’. In any event, the central focus
of the inquiry before the arbitrator was the contract concluded after the award of the
tender. Understandably, the arbitrator was acutely cognisant of the fact that his task
in the arbitration process was not to review the tender process as the power to do so
resides in the exclusive domain of the courts. Thus, the arbitrator's finding cannot avail
Tipp-Con in this case.

[85] It was submitted that Transnet initially sought to enforce the contract,
participated in the arbitration process and should be barred from instituting the review.
To the extent that this suggests that the review is a self-serving, reactive challenge
driven by a desire to avoid the consequences of the arbitration award, the above facts
point to the contrary. In any event, I cannot conceive of any reason why in the context
of the facts of this case Transnet should be precluded from challenging the award of
the tender by one of its divisions to Tipp-Con in circumstances where it subsequently
discovered cumulative irregularities in: (a) the selection of Tipp Con; (b) irregular
deviation from the terms of the RPF; and (c) a contract which deviates from the RFP,
and the accepted offer, leading to an installation of a fence it never tendered for. To
my mind, one ought not to lose sight of the fact that although it was Transnet that
published the RFP, it played a limited role in the process after approving the financial
terms, as is borne out by the record. TFR, independently conducted the entire bidding
process every step of the way from beginning to the end. And when disputes arose in
relation to the contract that precipitated the arbitration process, it was only the
employees of TFR who participated in that process. In these circumstances the finding
in the main judgment that Transnet was lackadaisical and dilatory in challenging the
propriety of the award is not justified. It has the effect of unduly constraining the ability
of a holding company like Transnet from investigating and undoing the consequences
of irregular award of its contracts.

[86] In sum: Transnet was obliged to resist the irregular award, and to set aside a
resultant contract which was not in accordance with a lawful tender process. In
particular, it was compelled to resist the implementation of a contract for goods not
contracted for. In my view, Transnet’s functionary acted in good faith or with the intent

to ensure clean governance.35 During argument, Tipp-Con’s counsel accepted that a
private party contracting with an organ of state has a reciprocal duty to ensure that it
complies strictly with the legislative prescripts and tender requirements. The
concession was well made and is consistent with the requirements for fairness,
transparency, competitiveness and cost efficiency, all of which were breached at every
turn through the tender mismanagement in this case. I therefore cannot subscribe to
the view that in instituting a self-review, Transnet acted otherwise than in good faith.

[87] In the result, I would have upheld the appeal and grant consequential relief with
costs of two counsel.

________________________
N T Y SIWENDU
ACTING JUDGE OF APPEAL

35 Buffalo City fn 3 para 62 referring to Tasima in fn 10.

APPEARANCES

For Appellant:

K N Tsatsawane SC (with him R Ramatselela)
Instructed by:

Chiba Attorneys, Johannesburg

Webbers Attorneys, Bloemfontein

For First Respondent:

L Sisilana (with him S Quinn)
Instructed by:

Van Rensburg Mabokwe Inc., Johannesburg

McIntyre van der Post Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:

31 January 2024
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not
form part of the judgments of the Supreme Court of Appeal
Transnet SOC Ltd v Tipp-Con (Pty) Ltd and Others (797/2022) [2024] ZASCA 12 (31 January 2024)
Today, the Supreme Court of Appeal (SCA), by a majority of three judges against two, dismissed an
appeal from the Gauteng Division of the High Court, Pretoria (high court). The appeal revolved around
a tender for the manufacture, supply and installation of a high security fence at certain premises of the
appellant. The respondent had been awarded the tender, but during installation of the fence, a dispute
arose regarding the fence’s specifications. This resulted in dispute resolution proceedings before an
adjudicator, as stipulated in the agreement between the parties. The adjudicator found in favour of the
respondent, namely that the fence was installed according to contractual specification and the
respondent was entitled to payment under the contract.

The appellant was unsatisfied with the outcome of the adjudicator and barred the respondent from
resuming with the fence’s installation. The respondent turned to the court to make the adjudicator’s
award an order of court, after which the appellant sough to review the order in the high court, claiming,
inter alia, that the contract entered into was unlawful because the respondent provided a non-compliant
sample of the fence (the tender sample) during the tender evaluation process (it was not ‘hot dip
galvanized’) and should therefore have been disqualified at the pre-qualification stage.  As such, the
contract ought to have been set aside. The high court dismissed the review application and held that
the appellant had delayed in initiating the self-review and only brought the review application to ‘escape
its contractual obligations’. The appellant approached this Court, disputing the high court’s decision.

The appellant appealed on two grounds. It held that, in relation to its tardiness, the high court erred
when it did not apply the two-stage inquiry required to determine whether the delay in question was
unreasonable, and secondly, that the award of the tender and the subsequent contract was a violation
of procurement prescripts set out in s 217 of the Constitution and should have been set aside. With
regards to the former, this Court held that the two-step approach entailed an assessment of whether
the delay was unreasonable, and if it was, to initiate the second step by determining whether the delay
could be overlooked. The high court complied with the first step but failed to determine whether the
delay could have been overlooked.

This Court found that the nearly year-long delay by the appellant in initiating the review of the contract
was not explained. In these circumstances the delay was unreasonable.  Regarding whether the delay
could be overlooked, this Court considered that the purpose of an organ of state's self-review should
be to promote open, responsive, and accountable governance and that the appellant was required to
promote these goals through its actions. Given the prejudice suffered by the respondent, the nature of
the appellant’s complaints, the fact that the irregularities were not egregious, and the unconscionable
conduct of the appellant, the unreasonable delay cannot be overlooked.

In the result, the Court found that the appellant did not only delay the matter unreasonably, but it also
acted unreasonably; it did not adhere to the constitutionally prescribed standard for state actors and did

not respect the rights of the respondent. It initially sought to enforce the very contract it later sought to
annul and refused to recognize the outcome of an adjudicative process in which it had voluntarily
participated. The appellant sought to circumvent the findings of the adjudicator by raising supposed
tender irregularities, thereby hoping that the Court would disregard all its prior actions.

On the contrary, the minority judgment held that the facts overwhelmingly support a contrary finding.
The irregularities Transnet complains of must be considered cumulatively rather than in discrete parts,
to assess their overall effect on a fair and transparent tender process, in line with the approach in
Khumalo and Another v MEC for Education, KwaZulu-Natal.

Transnet as the holding company assigned its divisions, Transnet Freight Rail (TFR), as ‘its agent’ to
manage the tender evaluation process. TFR employees misrepresented the status of the sample
submitted by Tipp-Con. It had submitted a ‘non-responsive tender.’ The review proceedings were
brought by the Executive Manager: Legal of Transnet as the principal, and not by TFR. Transnet was
alerted to the irregularities after the adjudication process, which prompted an investigation into the
award. The ‘proverbial clock’ for computing the delay started ‘ticking’ from the date of the completion of
the arbitration, on 7 August 2020. Transnet instituted the review application in October 2020. A belated
investigation and discovery of tender irregularities is not uncommon and is analogous with Swifambo
Rail Leasing (Pty) Ltd v Prasa. There was no delay, and if there was, it was not unreasonable and
should be overlooked.

Besides the misrepresentation of the sample, Tipp-Con’s Best Final Offer (BFO) of a 4 mm x 4mm wire
diameter fence compared with the final terms of the NEC contract providing for a 3mm wire diameter,
differed from the terms of the RFP and the BFO. After the award of the tender, Tipp-Con installed of a
fence between 3mm and 2.96mm. This was at variance from the terms of (a) the tender specification,
(b) the BFO and (c) the final NEC contract. It was also at variance from the SANBS standard prescribed
in the RFP. This raises questions about the grade and quality of the product offered and installed at the
premises. The bulk of the irregularities occurred after the award of the tender. The deviations were not
authorised by members of the bid evaluation structure. They fall within the proscription in State
Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd1 since they occurred outside of the
tender process.

The arbitrator's finding was conducted on paper without hearing evidence cannot avail Tipp-Con in this
case. Its central focus was the contract concluded after the award of the tender. The finding by the
adjudicator that the variance was a ‘deminimis deviation’ can only be supported if it was based on a
proper consideration of inter alia the: (a) agreed contract price; (b) impact on the direct cost of the fence;
(c) effect on the margin after the reduction of the bid contract price and (d) the incentive for Tipp-Con
to cut its costs to improve its margin. Whether there was an incentive to cut costs and benefit Tipp-
Con’s margin or whether Transnet nevertheless obtained value for money, would have been necessary
prior to concluding that it was a ‘deminimis deviation’.

Transnet was obliged to resist the irregular award which contravenes s 217 of the Constitution, and to
set aside a resultant contract which was not in accordance with a lawful tender process. Transnet’s
functionary acted in good faith or with the intent to ensure clean governance. In these circumstances,
the minority concluded that it would have upheld the appeal and grant consequential relief.

In the result, the SCA dismissed the appeal.

~~~~ends~~~~

1 State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd [2016] 4 All SA 842 (SCA)
para 21.