Transnet Limited v Sechaba Photoscan (Pty) Ltd

Transnet Limited, a state-owned entity, invited public tenders for the purchase of its Transnet Production House printing division. Sechaba Photoscan (Pty) Ltd, an established printing company, submitted a tender and received strong indications during the evaluation process that it would be awarded the contract. Instead, the contract was unexpectedly awarded to another bidder, Skotaville Press (Pty) Ltd. Sechaba alleged that the tender process was fraudulent and that Transnet’s conduct unlawfully deprived it of a contract it would otherwise have been awarded. Transnet conceded liability for fraud and admitted that Sechaba suffered damages. The only issue before the High Court, and later on appeal, was the quantum of damages, specifically whether Sechaba could recover loss of prospective profits it would have earned had it acquired the business.

The appeal was dismissed with costs, including the costs of two counsel. The High Court’s award of R57 654 550 in delictual damages for loss of profits was upheld.

This case is a leading authority confirming that loss of prospective profits may be recovered as delictual damages in South African law, particularly where a party is fraudulently deprived of a public tender it would otherwise have secured. It clarifies that delictual damages are assessed using the comparative method and are not confined to out-of-pocket losses. The judgment is especially significant in the context of fraudulent conduct in public procurement processes.