City of Cape Town v Aurecon South Africa (Pty) Ltd

In 2008, the City of Cape Town's Spatial Planning and Urban Development Department invited tenders for a pre-feasibility study for redevelopment of the defunct Athlone Power Station site. The tender was awarded to a joint venture comprising Aurecon Engineering International (a wholly-owned subsidiary of Aurecon) and ODA Consulting. The joint venture completed a draft scope of work in 2010. Subsequently, in 2011, the City advertised two invitations to tender for project management of the decommissioning works (tenders 266C/2010/11 and 459C/2010/11). Aurecon tendered for both. On 31 October 2011, the City's Bid Adjudication Committee (BAC) resolved to accept Aurecon's tender for R9,748,973.15, subject to section 33 of the MFMA process. During a council meeting on 29 August 2012, concerns were raised about corruption and irregularities in the tender process, particularly regarding Aurecon's involvement in the pre-feasibility study giving it an unfair advantage. The Mayor commissioned Ernst & Young to investigate. On 22 October 2012, Ernst & Young submitted a forensic report recording irregularities, including Aurecon's inclusion in internal email communications, unauthorized BEC participation, incorrect evaluation stages, and improper BEC meeting constitution. The City then sought to review its own decision to award the tender to Aurecon, launching review proceedings on 16 April 2013, 532 days after the BAC's decision.

• Whether the City's review application was instituted within the 180-day period prescribed by section 7(1) of PAJA
• Whether the City made out a proper case for condonation in terms of section 9 of PAJA for the delay in instituting proceedings
• When does the 180-day period under section 7(1) of PAJA begin to run - from when the decision-maker becomes aware of the decision and its reasons, or from when it becomes aware of irregularities tainting the decision
• Whether the Supreme Court of Appeal exercised its discretion judicially in refusing condonation
• Whether an administrator's right to review its own decision is sourced in PAJA or the broader principle of legality (left open)
• Whether Aurecon was precluded from tendering due to prior involvement in the pre-feasibility study under regulation 27(4) of the SCM Regulations and clause 95 of the SCMP (not decided due to mootness)

Leave to appeal refused. The application dismissed with costs, including costs of two counsel.

The binding principles established are: (1) The 180-day period prescribed in section 7(1) of PAJA begins to run from the date on which the person concerned was informed of the administrative action, became aware of the action and the reasons for it, or might reasonably have been expected to have become aware of the action and the reasons - not from when the person becomes aware of irregularities tainting the decision. (2) Knowledge of committees mandated by an organ of state (such as the BEC and BAC) is imputed to that organ of state for purposes of calculating time periods under PAJA. (3) When seeking condonation under section 9 of PAJA, an applicant must provide a full and satisfactory explanation for the delay, considering factors including: the nature of relief sought, extent and cause of delay, effect on administration of justice and other litigants, reasonableness of explanation, importance of the issue, and prospects of success. (4) Organs of state are held to a higher standard in complying with procedural requirements and time periods due to their constitutional obligations under section 237 and their role as the Constitution's primary agents. (5) An appellate court may only interfere with a lower court's exercise of discretion if that discretion was not judicially exercised; there can be no question of interference where no discretion has been exercised by the lower court. (6) When assessing compliance with legal requirements in administrative action, courts must take into account the materiality of any deviance by linking the question of compliance to the purpose of the provision.

The Court made several important non-binding observations: (1) The question of whether an administrator's right to review its own decision is sourced in PAJA or the broader principle of legality remains open and uncertain in South African law. The Court declined to decide this issue without full argument from parties, noting: "It would be undesirable for this Court to attempt to answer this important administrative law question without the benefit of legal argument from the litigants. To proceed unaided with complex legal questions is likely to give rise to unpredictable and altogether unintended consequences." (2) The Court noted that in this particular case, the practical result would likely be the same under either PAJA or legality review, as the delay was both outside the 180-day period and unreasonable. (3) Sound judicial policy requires courts to decide only what is demanded by the facts and necessary for proper disposal, particularly in constitutional matters where jurisprudence should develop incrementally (citing Albutt). (4) Courts are not bound by legal concessions if they consider them wrong in law, but where the legal position is uncertain (as with PAJA versus legality review), it may be inappropriate to decide the issue without full argument. (5) If the irregularities had involved corruption, collusion or fraud, the Court might have been more inclined to condone delay in the interests of clean governance. (6) The Court exercised discretion not to decide the moot issue of "prior involvement" under regulation 27(4) and clause 95, despite requests from parties and amicus curiae, applying principles from Independent Electoral Commission that discretion to decide moot issues must be exercised according to the interests of justice.

This case is significant for: (1) Clarifying when the 180-day time period under section 7(1) of PAJA begins to run - from awareness of the decision and its reasons, not from awareness of irregularities. This promotes certainty and finality in administrative law. (2) Emphasizing that organs of state are held to a higher standard in complying with procedural requirements, as articulated in Kirland: "There is a higher duty on the state to respect the law, to fulfil procedural requirements and to tread respectfully when dealing with rights." (3) Reinforcing that courts will not condone unreasonable delay without a satisfactory explanation, even for public bodies seeking to review their own decisions. (4) Demonstrating judicial restraint in declining to decide moot issues (the substantive question of prior involvement) and abstract legal questions (whether review of own decisions is under PAJA or legality) without full argument from parties. (5) Affirming the principle from National Coalition that this Court does not pronounce on moot issues that would amount to advisory opinions, unless the interests of justice require it. (6) Applying Biowatch principles on costs against an unsuccessful state applicant. (7) Illustrating that not all procedural deviations in tender processes warrant setting aside decisions - materiality must be assessed in light of the purpose of the provisions.