The badly managed eThekwini municipality in KwaZulu-Natal has lost another massive tender lawsuit, and it may have to cough up R100-million to a Durban-based company whose tender was unlawfully cancelled but whose equipment has been used for years.
This comes after the Durban High Court ruled on Wednesday that the ANC-EFF-IFP-NFP-run municipality is liable to pay Bless Joe Trading CC R73-million plus interest and legal fees after the latter roped in three senior counsels to fight the epic legal battle for almost four years.
The legal setback comes after the same municipality lost against Pholobas Projects in the Constitutional Court, and it now has to cough up about R52-million.
The latest legal battle started when Bless Joe Trading won a tender to supply temporary shelter for people who were displaced by floods in an informal settlement in the south of Durban in 2019.
After applying emergency procurement rules and winning the tender, the company provided marquees, flooring, and public toilets for 150 displaced people.
Initially, the tender agreement stipulated a 14-day duration at a cost of R208 000 per day, an increase from the initial agreement of R190 000 per day.
However, eThekwini extended the tender while arranging alternative accommodation.
During this period, eThekwini officials attempted to persuade the company to reduce the daily service fee by 40%, but the company steadfastly declined.
Municipality ignored invoices
It appears from the court papers that the municipal officials got spiteful and decided to cancel the tender.
As a result, on March 31, 2020, Bless Joe Trading received an email from eThekwini, terminating the contract and indicating that alternative shelter would be arranged for displaced people.
However, despite eThekwini indicating that the people would be placed in an alternative shelter, the marquee and ablution facilities were not removed from the premises, and the municipality did not provide alternative accommodation for displaced people.
As a result, Bless Joe Trading continued submitting invoices for the provision of services to eThekwini in respect of its facilities, which were used by the occupants after the termination of the contract, but the invoices were ignored.
On the date of the institution of the lawsuit, Bless Joe claimed a payment of R73-million plus value-added tax at 15% and interest.
The court ruled in its favour by including legal fees, bringing the final figure to almost R100-million.
During the hearing, eThekwini municipality frantically tried to defend the case, claiming the company was not prevented from removing its equipment.
Covid-19 lockdown
But municipal officials testified that even if the company was not stopped, the displaced would have nowhere to go due to the Covid-19 lockdown.
“However, in light of the evidence by the defendant’s own witness that even if the plaintiff was not prevented by the occupants from removing the tent, the defendant would not have moved the people because there was no alternative accommodation, the issue of whether the people remained in the tent because they prevented the plaintiff from taking possession thereof has become academic,” the judge ruled.
eThekwini also attempted to claim that Bless Joe Trading charged it for electricity; however, the electricity was actually being drawn from the nearby Tehius hostel, which receives it for free from the municipality. The court dismissed that counterclaim.
“The defendant was in a good position to investigate these issues and place evidence before court regarding irregularities committed during the procurement process, if any.
“In light of the defendant’s own witnesses confirming that the tender process was correctly followed and no irregularities were committed, and in the absence of any evidence to the contrary, this court has no basis to conclude that the award of the tender to the plaintiff during the state of disaster was illegal. For that reason, the counterclaim must fail,” the court ruled.
