Mabotwane Security Services CC v Pikitup Soc (Pty) Ltd & others

The appellant, Mabotwane Security Services CC, had a fixed-term security contract with the first respondent, Pikitup Soc (Pty) Ltd (a municipal entity owned by the City of Johannesburg), due to expire on 30 November 2015. Pikitup issued a tender (first tender) on 5 July 2015 for security services for 36 months, with an approved budget of R78,674,000 (excluding VAT). The appellant's bid, which was the lowest, was R110,171,366.18. Due to budget insufficiency and other procedural irregularities identified by auditors, the first tender was cancelled on 16 October 2015, and a second tender was issued on 25 October 2015 with a reduced budget of R78 million and reduced scope. The appellant launched a first review application on 4 November 2015 seeking to interdict the second tender and review the cancellation of the first tender. The appellant mysteriously received confidential tender documents, leading Pikitup to cancel the second tender citing breach of confidentiality. To ensure continuity of security services, Pikitup appointed Sidas Security Guards (Pty) Ltd (second respondent) on a short-term contract from 1 December 2015 for 12 months, with optional extensions. The appellant then launched a second review application on 10 February 2016 to set aside Sidas' appointment. Both review applications were dismissed by the Gauteng High Court on 21 December 2017. Leave to appeal was granted on 15 August 2018. By 3 December 2018, the first respondent notified the appellant that the appeal had become moot because: (1) the 36-month tender period expired on 30 November 2018; (2) the contract with Sidas had expired; and (3) Pikitup had insourced security services and no longer required external providers.

• Whether the appeal has become moot pursuant to section 16(2)(a)(i) of the Superior Courts Act 10 of 2013, such that the decision sought would have no practical effect or result
• Whether the court should exercise its discretion to hear a moot appeal on the basis that it raises discrete legal issues of public importance
• What costs order should be made where an appeal becomes moot during the pendency of appellate proceedings
• Whether further evidence regarding supervening events (insourcing of security services) should be admitted on appeal
• The duties of legal representatives when an appeal becomes moot during the pendency of appellate proceedings

The appeal was dismissed in terms of section 16(2)(a)(i) of the Superior Courts Act 10 of 2013, with costs on the party-and-party scale, such costs to include the costs of two counsel.

The binding legal principles established are: (1) In terms of section 16(2)(a)(i) of the Superior Courts Act 10 of 2013, an appeal must be dismissed where the decision sought will have no practical effect or result. An appeal becomes moot when it no longer presents an existing or live controversy. (2) Supervening events that render relief sought on appeal practically impossible to implement are relevant to a determination of mootness, and evidence of such events may be admitted under section 19(b) of the Superior Courts Act where material, weighty, and uncontentious. (3) Even if administrative action was unlawful and the Constitution requires a declaration of unlawfulness, it is not just and equitable under section 172(1)(b) of the Constitution to grant orders that would have no practical effect or result. (4) The discretion to hear a moot appeal will only be exercised where a discrete legal issue of public importance arises that frequently occurs, affects matters in the future, and requires adjudication by the appellate court. (5) Where an appeal becomes moot during the pendency of appellate proceedings, litigants and their legal representatives are under a duty to contribute to efficient use of judicial resources by making sensible proposals to terminate proceedings. This requires taking into account factors including: prospects of success, extent of costs already incurred, additional costs if proceedings continue, size of the appeal record, and likely time required for adjudication. (6) Rejection of reasonable proposals to terminate moot proceedings and intransigent conduct by legal representatives may result in adverse costs consequences.

The court made the following non-binding observations: (1) Although the first respondent sought a punitive costs order on the attorney-and-client scale, when all facts were considered, such a punitive order was not justified, though the conduct warranted costs on the party-and-party scale including costs of two counsel. (2) The court emphasized with concern the "growing misperception that there has been a relaxation or dilution of the fundamental principle that Courts will not make determinations that will have no practical effect" (quoting Rand Water Board v Rotek Industries). (3) The court noted that the revelation of how the appellant obtained confidential tender documents (mysteriously received in an envelope from a security guard) was met with dismay by Pikitup given the appellant's role as incumbent security provider, though this breach of confidentiality was not ultimately determinative of the appeal. (4) The court indicated that even if the appellant's argument about a two-stage process (declaration of unlawfulness separate from equitable relief) were correct, there would be no basis for such a declaration as it could not itself have any practical effect or result. (5) The court observed that by the time leave to appeal was granted on 15 August 2018, with only three months remaining in the 36-month tender period, the award of the tender could "hardly be contended" to still be a "live issue."

This case is significant in South African law for clarifying the application of section 16(2)(a)(i) of the Superior Courts Act 10 of 2013 regarding moot appeals. It establishes that: (1) Courts will not make determinations that have no practical effect or result, even where administrative action may have been unlawful. (2) Supervening events (such as expiry of contract periods and material changes in operational requirements) are relevant and admissible on appeal to determine mootness. (3) The principle in Allpay requiring declaration of unlawful administrative action does not override the statutory prohibition against hearing moot appeals where relief would have no practical effect. (4) Legal representatives have a duty to take a realistic view when appeals become moot during pendency and to make sensible proposals to avoid wasting judicial resources. Failure to do so may result in adverse costs consequences. (5) The discretion to hear moot appeals will only be exercised where discrete legal issues of genuine public importance arise that frequently occur and affect future matters. The judgment reinforces efficient use of judicial resources and responsible conduct by legal practitioners in the appellate process, particularly in the context of public procurement litigation where temporal limitations are often inherent.