In 1995 the KwaZulu-Natal provincial government invited tenders for the sale of a Richards Bay property. The highest tender, submitted by Naidoo, was accepted, while Logbro Properties CC’s tender was rejected. Logbro successfully challenged the award in the Natal Provincial Division on the basis that Naidoo’s tender did not comply with the tender conditions. In 1997 the High Court set aside the award and ordered the provincial assets committee to reconsider only compliant tenders. When the committee reconsidered the matter in 1997, Logbro’s tender was the highest, but the committee declined to accept any of the original tenders and instead decided to call for fresh tenders, citing increased property values since 1995. Logbro again approached court, arguing that the committee was not entitled to take supervening circumstances into account and, alternatively, that it should at least have been given an opportunity to be heard before the decision to re-advertise was taken.
The appeal was upheld in part. The decision of the KwaZulu-Natal assets committee of 4 March 1997 to re-advertise the property was set aside. The matter was remitted to the appropriate authority to reconsider the compliant tenders after affording the appellant and other compliant tenderers an opportunity, at least in writing, to make representations on any relevant supervening considerations. Costs were awarded in favour of the appellant.
This case is a leading authority on the application of constitutional administrative justice principles to governmental tender processes. It confirms that public bodies cannot avoid public law duties by relying on contractual characterisations of tenders, overrules Mustapha v Receiver of Revenue to the extent that it separated contractual power from public power, and clarifies that fairness may allow consideration of supervening circumstances, provided affected parties are afforded audi alteram partem.