Steenkamp NO v Provincial Tender Board, Eastern Cape

Balraz Technologies (Pty) Ltd submitted a tender for the provision of services relating to an automated cash payment system for social grants in the Eastern Cape. At the time of submission, Balraz had not yet been incorporated. The Provincial Tender Board nonetheless awarded the tender to Balraz in March 1996, despite reservations from technical committees about its capacity. Balraz incurred substantial out-of-pocket expenses in preparation to perform the contract. In June 1997, following a review application by a disappointed tenderer, the High Court set aside the tender award on the basis of administrative irregularities. Balraz was subsequently liquidated. Its liquidator, Steenkamp NO, sued the Tender Board in delict for purely economic loss, alleging negligent and wrongful performance of its statutory functions.

Leave to appeal was granted, but the appeal was dismissed. The decision of the Supreme Court of Appeal was upheld, and no delictual damages were awarded to the applicant.

This case is a leading authority on the interface between administrative law and delict in South Africa. It establishes that a successful review of administrative action does not automatically entitle an aggrieved party to delictual damages, particularly for purely economic loss. The judgment clarifies the limits of state liability in public procurement and reinforces the primacy of public law remedies for unlawful administrative action.