DDP Valuers (Pty) Ltd v Madibeng Local Municipality and Another

Madibeng Local Municipality invited tenders for the compilation of a General and Supplementary Valuation Roll for 2014–2018. DDP Valuers (Pty) Ltd, the incumbent municipal valuer, and Dijalo Property Valuers were shortlisted. The Municipality awarded the tender to Dijalo. DDP Valuers objected under regulation 49 of the Municipal Supply Chain Management Regulations, alleging irregularities in the evaluation process and requesting dispute resolution under regulation 50. The Municipality did not engage with the objection. DDP Valuers then instituted review proceedings in the High Court to set aside the tender award. The Municipality and Dijalo raised a preliminary point that DDP Valuers had failed to exhaust internal remedies under section 7(2) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). The High Court upheld this point and dismissed the review. DDP Valuers appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the point in limine with costs. The matter was remitted to the High Court for determination of the merits of the review application.

This case clarifies the meaning of 'internal remedy' under section 7(2) of PAJA in the context of municipal procurement. It establishes that the dispute resolution mechanism in regulation 50 of the Municipal Supply Chain Management Regulations is not an internal remedy that must be exhausted before judicial review. The judgment is significant for unsuccessful tenderers, confirming their right to approach courts directly where no effective internal appeal or review mechanism exists.