Olitzki Property Holdings v State Tender Board and Another

In 1995 the Gauteng provincial government invited tenders for office accommodation as part of a relocation project. Olitzki Property Holdings obtained an option to purchase a building and tendered to provide office space, but its tender was not accepted. Olitzki alleged that the tender process was conducted irregularly, unreasonably and arbitrarily, including improper involvement by the provincial government in advising the State Tender Board and a failure by the Board to act independently and impartially. Olitzki claimed damages for lost profits it would have earned had it been awarded the tender.

The appeal was dismissed. The order of the court a quo setting aside Olitzki’s claims for damages and granting leave to amend the particulars of claim was upheld, with costs.

The case is a leading authority on the limits of constitutional and statutory breaches as sources of delictual liability. It clarifies that the procurement provisions of the interim Constitution do not create a right to claim damages for lost profit, and that constitutional damages are exceptional and generally unavailable where adequate alternative remedies exist. The judgment significantly influenced South African procurement and administrative law by confining disappointed tenderers primarily to public-law remedies.