Court name
Harare High Court
Case number
HC 8302 of 2011

MWI Zimbabwe (Pvt) Ltd v Ruwa Town Council & Anor (HC 8302 of 2011) [2011] ZWHHC 237 (01 September 2011);

Law report citations
Media neutral citation
[2011] ZWHHC 237

                                                                                                                                                   MWI ZIMBABWE (PVT) LTD

and

RUWA TOWN COUNCIL

and

WATERFLOW (PVT) LTD

 

 

 

HIGH COURT OF ZIMBABWE

KUDYA J

HARARE, 2 SEPTEMBER 2011

 

 

Urgent Chamber Application

 

L. Uriri, for the applicant

T. Magwaliba, for the first respondent

R.T. Maganga, for the second respondent

 

                         KUDYA J: On 2 September 2011 I dismissed with costs the provisional order sought by the applicant. I delivered a handwritten judgment in which I set out the reasons for my decision. On 5 September 2011 the applicant wrote a letter to the registrar requesting my written reasons. The letter was only brought to my attention on 18 October 2011 together with the applicant’s reminder of 10 October 2011.  I reproduce hereunder the full judgment I delivered on 2 September 2011.

The first respondent, Ruwa Town Council, floated a tender for the supply of water to Ruwa. It is common cause that at a meeting held on 18 July 2011, the full council rejected the recommendation of its technical committee in favour of the second respondent and by vote recommended to award the tender to the applicant.

While the applicant filed unsigned minutes, in its opposing affidavit the council filed the same copy of the minutes which were duly signed by the chairman on 24 August 2011. Those minutes in regards to the date of their signature put paid the submission by Mr Magwaliba that the minutes of council are approved at the next meeting. Those minutes were never approved at the meeting of 12 August 2011. However, of importance is that on 1 August 2011, the district administrator for Ruwa and Epworth wrote to the secretary of council. He, amongst other things, wrote that the resolution to award the tender be suspended in terms of s 314 (1)-(3) of the Urban Councils Act [Cap 29:15]. The letter indicated that he was suspending the minutes pending the resolution of the issue and requested to meet the full board and management of council by 3 August 2011. On 12 August 2011 at 0926 hours a special full board meeting was held on the issue by council. It was held at the behest of the district administrator’s letter. It was to rescind the resolution of 18 July 2011. A motion to rescind and then adopt the rejected technical committee’s report was moved.  The minutes of 12 August show that the resolution was rescinded and that the lowest bidder who was the second respondent was awarded the tender. The minutes’ further record under the resolution that confusion followed from those councillors who did not wish rescission to take place and the meeting was duly adjourned at 0950 hours. While the resolution rescinding the minutes refers to the wrong minute number of the minutes, the middle figure is given  as 8 instead of seven, it is clear that reference was being made to minutes of 18 July. On 16 August 2011, the minister of Local Government, Urban and Rural Development purportedly acting in terms of s 314 of the Urban Councils Act rescinded the resolution. He was as it turned out rescinding a resolution that had already been purportedly rescinded by council. He set out his reasons in that letter for the action that he took. He averred that the resolution violated s 211 of the Urban Councils Act as it was not in the best interests of the inhabitants of Ruwa who had not had safe and adequate water supply for a long time. He wrote in the last paragraph of that letter:

“In terms of section 314 of the Urban Councils Act, I hereby rescind resolution No FB 81/07/11 and instruct council to transparently and accountably handle the tender and report to me as soon as is practically possible.”

The first respondent proceeded to award the tender to the second respondent by letter dated 17 August 2011. The second respondent concluded contractual arrangements with an insurance company based on the letter in question.

On 25 August 2011 the applicant then filed the present application seeking an announcement of the results of the tender within 4 days of the order and interdict against the award of the tender to any party other than itself. On the return day it will seek a declaration of nullity of the rescission or attempted rescission of the tender and secondly that it be confirmed as the winner of the tender process. The applicant therefore seeks both an interim mandatory interdict and an interim prohibitory interdict. The essential elements are the same. I prefer the way the elements were set out in Airfield Investments (Pvt) Ltd v Minister of Lands & Ors 2004 (1) ZLR 511 (S) at 517 B-E where MALABA JA, as he then was, stated:

“It must be borne in mind that an interim interdict is an extraordinary remedy, the granting of which is at the discretion of the court hearing the application for the relief. There are, however, requirements which the applicant for interim relief must satisfy before it can be granted. In L F Boshoff Investments (Pty) Ltd v Cape Town Municipality 1969 (2) SA 256 (C) at 267A-F, Corbett J (as he then was) said an applicant for such temporary relief must show:

  1. That the right which is the subject matter of the main action and which he seeks to protect by means of interim relief is clear or, if not clear, is prima facie established though open to some doubt;
  2. That, if the right is only prima facie established, there is a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted and he ultimately succeeds in establishing his right;
  3. That the balance of convenience favours the granting of interim relief; and
  4. That the applicant has no other satisfactory remedy.”

I did not hear Mr Uriri, for the applicant; submit that the applicant had a clear right at all. Rather he started his submissions on the element that it had a prima facie right that may be open to doubt. Mr Magwaliba and MrMaganga both contended that the applicant did not have even a prima facie right open to doubt.  Both respondents abandoned the contention that the unsigned copy of minutes filed of record by the applicant was invalid. The signed copy as already alluded to was signed by council. The accuracy of those minutes and contents is demonstrated in the papers filed by council. Again, otherwise where it not so, the flurry of correspondence that followed in the wake of the meeting between council and the district administrator and the minister and even the applicant would not have been generated.  So those minutes, it is apparent, did exist. They say what the applicant says they contain. Mr Uriri contended that both the minutes and the resolution are valid. He further contended that the resolution still subsists and that it grants legitimate expectation to the applicant that it won the tender. Mr Magwaliba, for the council contended that the resolution was properly rescinded by council in terms of s 89 of the Urban Councils Act. Section 89 reads as follows:

“89 Rescission or alteration of resolutions of council and committees

(1) A resolution passed at a meeting of a council shall not be rescinded or altered at a subsequent meeting of the council—

(a) unless—

(i) a committee has recommended that the resolution he rescinded or altered; or

(ii) a notice of motion to rescind or alter that resolution has been given at least seven days before the subsequent meeting to the chamber secretary and the notice of motion has been signed by not less than one-third of the membership of the council;

     and

b) if the rescission or alteration occurs within six months from the date of the passing of the original resolution and the number of councillors present at such subsequent meeting does not exceed the number of councillors present when the original resolution was passed, unless at least two-thirds of the councillors or members, as the case may be, present at the subsequent meeting vote in favour of that rescission or alteration.

(2) The chamber secretary to whom any notice of motion has been given in terms of subsection (1) shall send a copy of the notice to each councillor at least two days before the subsequent meeting at which the motion is to be moved.

(3) Nothing in subsection (i) shall be construed as precluding a council from rescinding or altering a resolution passed at a previous meeting in a manner other than that recommended by the committee or specified in a notice of motion, as the case may be.

(4) A resolution passed at a meeting of a committee of a council may be rescinded or altered at any subsequent meeting of that committee”.

 

Mr Uriri contended that that process was not followed at all by the council. No committee was set up that recommended cancellation of the resolution. There was no evidence that a seven days notice of motion signed by not less than one-third of the membership of council was moved through the chamber secretary before the meeting of 12 August 2011. Rather the minutes indicate that the notice was raised on 11 August 2011. The councillors present at the meeting of 18 July 2011 were not given two days notice of the meeting of 12 August 2011. Mr Uriri attacked the process used to rescind by basically attacking the failures to abide by the provisions set out in s 89, that is, that it was given on 11 August and not seven days before nor  did the chamber secretary serve the notice on the councillors present at the first meeting two days before the meeting of rescission. It would therefore appear thatMrUriri is on firm ground when he avers that the resolution was not properly rescinded by council. I did not hear either Mr Magwaliba or Mr Maganga make any contrary averment on the impropriety of the intervention of the district administrator in the saga. It is clear that it appears that he does not have the authority to usurp the minister’s powers in s 314 of the Urban Councils Act. However, at least in that letter, the district administrator did not seek to rescind the resolution. He sought to suspend the resolution pending discussion. It however appears that he does not even have such powers to suspend the resolution. It also appears that neither is the minister enjoined by s 314 to rescind council resolutions. As worded s 314 reads:

 

“314 Minister may reverse, suspend, rescind resolutions, decisions, etc. of councils

(1) Where the Minister is of the view that any resolution, decision or action of a council is not in the interests of the inhabitants of the council area concerned or is not in the national or public interest, the Minister may direct the council to reverse, suspend or rescind such resolution or decision or to reverse or suspend such action.

(2) Any direction of the Minister in terms of subs (1) to a council shall be in writing.

(3) The council shall, with all due expedition, comply with any direction given to it in terms of subsection

(1)”.

 

My understanding of that subsection is that it is council that reverses, suspends or rescinds or does any such action directed by the minister. It is not the minister himself who does it. All that council is enjoined to do is to obey the minister; but the minister is not the one who rescinds the resolution of council as he purported to do in the instant matter. We have an unfortunate situation in this matter where the minister purportedly rescinded a resolution that council had rescinded.  I have already found that council did not properly rescind the resolution. The resolution was therefore not rescinded. It still subsists. In my view, the letter of the Minister of 16 August 2011 amounts to a directive to council to rescind the resolution. Council has, however, failed to act upon it with due promptitude.  The resolution SBF 81/07/2011 of 18 July 2011 is extant. It has not been rescinded. There is, however, no doubt that council is obliged, in terms of s 314, to rescind the resolution.

Mr Magwaliba, on the authority of Chirambasukwa v Minister of Justice, Legal and Parliamentary Affairs 1998 (2) ZLR 567 (SC) strongly argued that until the results of the tender were officially communicated to the applicant, the applicant did not have a prima facie right or any legitimate expectation of those rights to the award of the tender to itself. Mr Uriri argued to the contrary that council resolutions on tenders are public documents and that the process is held in the public domain where the public and press are allowed. He then distinguished the present case with the Chirambasukwa case on the basis that in the Chirambasukwa case the court was dealing with a cabinet resolution protected by the Official Secrets Act [Cap 11:09] and dealt with in secrecy. 

The minutes of 18 July 2011 do not show that the meeting was held in public. In fact, what they show is that after the technical experts had made their presentations, they were excused from the meeting, leaving the councillors to deliberate over the recommendations of the technical committee. The names of the councillor who attended the meeting are listed in the minutes. The fact that this was a private meeting is buttressed by the provisions of s 88 (6)(b) (ii)of the Urban Councils Act  that denies the public the right to inspect or obtain copies of minutes relating to a tender where the lowest bid is not the one accepted by council.

 

By parity of reasoning, there is therefore no differentiation between the present matter and the Chirambasukwa case. Until the offer was communicated to the applicant, it had no legitimate expectation that the tender would be awarded to it. That this is so is further buttressed by the unfortunate run of events that transpired after the meeting of 18 July 2011. In short, what the Urban Councils Act demonstrates is that the council itself or the minister have an oversight role to play in the award of a tender before or even after it is communicated to the winner. The minister can intervene and direct the rescission of the tender as he purported to do in this matter. The council can also rescind its decision as it purported to have done. The process of oversight by the minister or council over council decisions demonstrates the absence of any legitimate expectation by any tenderer in the process until the conclusion of the oversight role. Therefore, the resolution of 18 July 2011, subject as it was to review by the council or the minister granted no right of expectation of clinching the tender to the applicant.  I therefore agree with Mr Magwaliba that the absence of any official communication to the applicant deprived it of any derivative rights flowing from the resolution in question.  It had no rights of expectation towards landing the tender.   In the absence of such rights in the main claim, the applicant’s application for a provisional order must fail. This is because all the four factors that must be established by the applicant who seeks a temporary interdict are conjunctive and not disjunctive.

But for what it is worth, while irreparable harm and absence of a satisfactory remedy would have favoured applicant, I am satisfied from the submissions made by Mr Maganga that the balance of convenience favours the second respondent. In this unfortunate saga, the second respondent became the unintended victim of the bungling by the first respondent.  The second respondent demonstrated through the letter from council dated 17 August 2011 that it was officially notified that it had won the tender.  The result was that it concluded further contracts with other parties such as an insurance company to satisfy the tender requirements set out in the tender. The investment that the second respondent has made into the scheme thus far tilts the scales in the balance of convenience in its favour.  

In conclusion, I am satisfied that the applicant has failed to establish a prima facie case based on legitimate expectation for the interim relief it seeks.

The first respondent asked for costs on a legal practitioner and client scale whilst the second respondent asked for costs on the ordinary scale.  Costs are always in the discretion of the court. Were it not for the bungling exhibited by the first respondent in handling the resolution in issue, I would have granted its request for costs on the higher scale. While I will grant it its costs based on the principle that costs must follow the result, it is only fair and just that they be on the ordinary scale.

Accordingly, the application is dismissed on the merits with costs.

 

 

 

 

 

 

Dube Manikai and Hwacha,applicant’s legal practitioners

Magwaliba and Kwirira, first respondent’s legal practitioners

Maganga and Company, second respondent’s legal practitioners