Africure Pharmaceutical Namibia (Pty) Ltd v Cospharm Investment (Pty) Ltd and Others (SA 88/2024) [2025] NASC 12 (21 May 2025)

REPORTABLE

CASE NO: SA 88/2024

IN THE SUPREME COURT OF NAMIBIA

In the matter between:

AFRICURE PHARMACEUTICAL NAMIBIA (PTY) LTD	Appellant
and
COSPHARM INVESTMENT (PTY) LTD	First Respondent
CENTRAL PROCUREMENT BOARD OF NAMIBIA	Second Respondent
MINISTER OF HEALTH AND SOCIAL SERVICES	Third Respondent
NAMPHARM	Fourth Respondent
ERONGOMED HEALTH DISTRIBUTORS (PTY) LTD	Fifth Respondent
GENMED (PTY) LTD	Sixth Respondent
SUPREMO PHARMACEUTICALS (PTY) LTD	Seventh Respondent
MOZART MEDICAL SUPPLIERS (PTY) LTD	Eighth Respondent
CIRON DRUGS & PHARMACEUTICALS (PTY) LTD	Ninth Respondent
GEKA-PHARMA (PTY) LTD	Tenth Respondent
ELEMENT MEDICAL SUPPLIERS (PTY) LTD	Eleventh Respondent
ECONO INVESTMENTS (PTY) LTD	Twelfth Respondent
AFRIPHARM INVESTMENTS (PTY) LTD	Thirteenth Respondent
WAP PHARMACARE t/a WAP MEDICAL SUPPLIERS	Fourteenth Respondent
BROAD PHARMA (PTY) LTD	Fifteenth Respondent
CORANCE INVESTMENTS (PTY) LTD JV TRANSPHARM	Sixteenth Respondent
TALIINDJE INVESTMENT CC	Seventeen Respondent
SALUTEM MEDICALS (PTY) LTD	Eighteenth Respondent
HOODIA PHARMA (PTY) LTD JV GALEN SUPPLIES CC	Nineteenth Respondent
CAREMARQUE PHARMA CC	Twentieth Respondent
OSHAKATI PHARMACY CC t/a MEDEX PHARMA	Twenty-First Respondent
SHIPANGA MEDICAL SERVICES (PTY) LTD	Twenty-Second Respondent
INNOVA HEALTHCARE DISTRIBUTORS & WAREHOUSE (PTY) LTD	Twenty-Third Respondent
LANDULAMED WHOLESALER & DISTRIBUTORS CC	Twenty-Fourth Respondent
PFIZER LABORATORIES (PTY) LTD	Twenty-Fifth Respondent
WINDHOEK MEDICAL SOLUTIONS (PTY) LTD	Twenty-Sixth Respondent
CHAIRPERSON OF THE REVIEW PANEL	Twenty-Seventh Respondent
THE REVIEW PANEL	Twenty-Eighth Respondent
ATTORNEY-GENERAL OF THE REPUBLIC OF NAMIBIA	Twenty-Ninth Respondent

Coram: ANGULA JA, SMUTS AJA et FRANK AJA

Heard: 23 April 2025

Delivered: 21 May 2025

Summary: This appeal concerns the interpretation of key provisions relating to the bidding process in the Public Procurement Act 15 of 2015, as amended (the Act). On 29 April 2022, the Central Procurement Board advertised a tender, for the supply of pharmaceuticals worth approximately N$ 1.4 billion. About twenty six entities submitted bids for the tender. On 26 April 2023, the Board issued a notice of selection of award in which the appellant (Africure) was one of the successful bidders and was awarded about N$123 million worth of pharmaceuticals to be supplied. The bid for those items by the first Respondent in this appeal (Cospharm) was disqualified for the reason that it had made an “overwriting” of the bid price on the bid submission form without initialising next to the overwriting -a claim Cospharm disputed. Aggrieved by that disqualification, Cospharm on 2 May 2023 applied to the Board within the required seven day period for reconsideration of the award in terms of s 55(4A) of the Act.

After not receiving a response within seven days, on 24 May 2023, Cospharm lodged a review with the Review Panel. It was at this point that the Board discovered that Cospharm had not been notified of its decision in respect of Cospharm’s application for reconsideration which had been taken within seven days. On 26 May 2023, the Board then notified Cospharm that its application for reconsideration was successful and directed the Bid Evaluation Committee to recalculate Cospharm’s bid. Following this development, Cospharm on 6 June 2023 withdrew its review filed with the Review Panel. Learning of Cospharm’s withdrawal of its review, Africure through a letter addressed to the Chairperson of the Board contested the validity of this process, pointing out that the Board exceeded its powers by acting outside the seven day period and that the Board failed to notify them of Cospharm’s reconsideration, thereby breaching procedural fairness. The Board responded, stating that it had adjudicated upon the reconsideration application within the seven day period required by s 55(4A).

On 3 August 2023, the Board issued a revised notice of selection of procurement award which reduced Africure’s initial allocation amount to N$45 million, transferring the rest to Cospharm - the lowest bidder in those items and representing a significant saving of N$4, 87 million to the fiscus. This new notice of award prompted Africure to launch an urgent application in the High Court on 25 September 2023 seeking, to interdict the implementation of the award, pending a review of the decisions of the Board to grant three reconsideration applications including Cospharm’s, an order seeking to review and set aside the decision of the Review Panel dismissing Africure’s internal review as well as an order directing the Board to award the bids pursuant to its initial notice of selection dated 26 April 2023. A further order was sought to declare s 55(4A) unconstitutional in the event of the court finding that s 55(4A) denies a selected bidder an opportunity to make representations in respect of a reconsideration application.

After a detailed analysis of the Act and the statutory context of the bidding process, the court a quo held that the failure by the Board to notify Cospharm of its reconsideration decision within the prescribed seven days rendered the Board’s decision on the application for reconsideration a nullity. The court further found that the Board violated article 18 of the Namibian Constitution by failing to inform Africure and affording it an opportunity to be heard on Cospharm’s application for reconsideration. The court declined to grant an order directing the Board to award the contract in terms of the initial notice dated 26 April 2023. This is the basis for Africure’s appeal to this Court. The Board lodged a cross-appeal against the court a quo’s findings against it.

On appeal, this Court is tasked with determining the following issues: the effect of the Board’s failure to notify a bidder Cospharm of the outcome if its reconsideration application within seven days; whether Africure had a right to be heard in respect of that reconsideration application; and lastly whether the High Court should have directed the Board to award contracts to the bidders selected in its original notice of selection dated 26 April 2023.

Held that, Cospharm’s complaint concerning the disqualification of that portion of its bid and the decision that the bid was not responsive was rightly upheld within 7 days of being lodged. The non-compliance by the Board in failing to notify Cospharm of the outcome of the reconsideration application within seven days did not render the decision taken within that period a nullity.

Held that, Section 55(4A) does not require service of such an application upon other bidders. Had the Legislature intended an opportunity for them to be heard, service upon the other bidders would have been required. Section 55(4A) further requires that the Board is to notify the bidder ‘which applied and not the bidders who made bids’.

Held further that, procedural fairness including the right to be heard is not necessarily relevant to every exercise of public powers and that what procedural fairness requires would depend upon the circumstances of each particular case. Accordingly, the Board’s cross-appeal succeeded.

Consequently, the appeal was dismissed with costs and the cross-appeal upheld with costs.

APPEAL JUDGMENT

SMUTS AJA (ANGULA JA and FRANK AJA concurring):

1. This appeal concerns the interpretation to be given to key provisions relating to the bidding process in the Public Procurement Act 15 of 2015, as amended (the Act). Given the fact that the tender in question relates to the supply of pharmaceutical products for the Ministry of Health and Social Services, this appeal was heard expeditiously out of term.

Background facts

2. The tender was advertised by the Central Procurement Board (the Board) on 29 April 2022, inviting bids for the supply of the pharmaceutical products in question. The tender closed on 8 November 2022. Twenty-six entities submitted bids for the tender worth an estimated value of N$1.4 billion. On 26 April 2023 the Board issued a notice of selection for award.

3. The appellant (Africure Pharmaceutical Namibia (Pty) Ltd – Africure) was one of the successful bidders and was awarded about N$123 million worth of pharmaceuticals to be supplied. The bid for those items by the first Respondent in this appeal (Cospharm Investment (Pty) Ltd – Cospharm) was found to be unresponsive and was disqualified. The reason for the disqualification was that it had ‘made an “overwriting” of the bid price on the bid submission form without initialising next to the overwriting’. The actual ‘overwriting’ was denied by Cospharm which stated that it was not altered. It was also correctly pointed out that the ‘overwriting’ related only to 25 cents in its total bid exceeding N$1.4 billion. It was also pointed out that it had also submitted a typed form where the number was the same and had been merely repeated in the handwritten portion. Aggrieved by that finding in the notice of selection for award, Cospharm on 2 May 2023 applied to the Board within the required seven day period for reconsideration of the award in terms of s 55(4A) of the Act.

4. The Board did not respond to Cospharm’s application for reconsideration within the prescribed seven day period for doing so. Cospharm then proceeded with a review to the Review Panel under s 59 of the Act on 23 May 2023 as it was entitled to do. That review was opposed by the appellant.

5. Seven other bidders also submitted applications for the reconsideration of their bids. All the applications for reconsideration including Cospharm’s were only lodged with the Board, and not served on the other bidders.

6. The Board however on 26 May 2023 notified Cospharm that its application for reconsideration was successful and directed the Bid Evaluation Committee to recalculate Cospharm’s bid. The Board only discovered that Cospharm had not been notified of its decision when it received Cospharm’s review application (to the Review Panel) on 24 May 2023. Following this development, Cospharm on 6 June 2023 withdrew its review filed with the Review Panel.

7. Learning of Cospharm’s withdrawal of its review on 6 June 2023, Africure addressed a letter to the Chairperson of the Board, pointing out that the period for reconsideration (seven days) as provided for in s 55(4A) of the Act had lapsed and contended that the Board’s direction to the Bid Evaluation Committee was beyond its powers under the Act. The Board’s response on 12 June 2023 was to the effect that it had adjudicated upon the reconsideration application within the seven day period required by s 55(4A) and had done so on 9 May 2023.

8. One of the other reconsideration applications was unsuccessful and that bidder filed a review to the Review Panel which heard that review on 6 July 2023 and dismissed it on 17 July 2023.

9. On 3 August 2023, the Board issued a new notice of selection for award. In terms of this new notice, Africure’s award was reduced from N$123 million to N$45 million. The items removed from Africure’s allocation were awarded to Coshparm, whose pricing for those specific items was lower than Africure’s. This reallocation resulted in a significant saving of N$4.87 million to the fiscus.

10. Africure proceeded to lodge a review of that award to the Review Panel. That review was heard on 28 August 2023. It was dismissed on 29 August 2023 with the Board’s decision of 3 August 2023 confirmed.

11. Africure thereafter launched an urgent application in the High Court on 25 September 2023 to interdict the implementation of the award, pending a review of the decisions of the Board to grant three reconsideration applications including Cospharm’s and its decision of 3 August 2023 embodied in the selection of procurement awards (and thereafter varied and communicated on 27 September 2023 to bidders) and seeking to review and set aside the decision of the Review Panel dismissing its (Africure’s) internal review. Africure also applied for an order directing the Board to award the bids pursuant to its initial notice of selection for award dated 26 April 2023 in para 4 of its notice of motion.

12. A further order was sought to declare s 55(4A) unconstitutional (in violation of Art 18 of the Namibian Constitution) in the event of the court finding that s 55(4A) denies a selected bidder an opportunity to make representations in respect of a reconsideration application.

The approach of the High Court

13. In a thorough and well-researched judgment, the High Court succinctly identified the issues to be determined by it in the following way:

‘[20] In view of the parties’ contentions, I am of the view that three questions arise for determination in this application. Firstly, whether the failure to communicate the Board’s decision within the 7 days, as contemplated under s 54(4A) of the Act, is fatal. Secondly, whether the Board is obliged to inform bidders about a reconsideration application and to afford them an opportunity to comment on the reconsideration application. Thirdly, whether the Review Panel’s decision of 11 June 2023 is still valid.’

14. After a detailed analysis of the Act and the statutory context of the bidding process, the High Court found that the consequences of non-compliance with a statutory provision (whether classified as peremptory or directory) would ultimately depend upon the construction to be given to the provision in the context of the ascertained legislative intention. The court further found that the legislative framework contemplated that time was of the essence by compelling bidders to mount challenges to the process within a seven day standstill period after the announcement of the selection of procurement award. The court concluded that the objects of s 55(4A) would not be achieved if applicants for reconsideration are not notified of the outcome within the seven day prescribed period. The court held that the failure by the Board to notify them of its decision within that period undermined the objects of s 55(4A) and was fatal and resulted in the Board’s decision on the application for reconsideration being a nullity.

15. The court turned to the question as to whether other bidders are entitled to be informed of and be heard with regard to an application for reconsideration directed to the Board. The court emphasised the importance of the right to procedural fairness, constitutionally enshrined in Art 18 of the Namibian Constitution and that the principles of accountability, openness and transparency meant that procurement steps taken by public officials and agencies must be lawful and procedurally fair. The court concluded that the Board had an obligation and duty to treat every bidder fairly and to afford them an opportunity to be heard before any decision affecting their rights is to be taken, including applications for reconsideration under s 55(4A). The court found that the failure in the present instance to inform Africure of Cospharm’s application for reconsideration and afford it an opportunity to be heard in relation to it amounted to a failure to comply with its procedural fairness obligation outlined in Art 18 of the Namibian Constitution and rendered the reconsideration exercise invalid and to be set aside for that reason.

16. Turning to the question as to whether Africure was entitled to an order directing the Board to act in terms of s 55(5) and award contracts to bidders in terms of the first notice for selection of procurement award dated 26 April 2023, the court followed the approach of the Chief Justice in Waterberg Big Game Hunting Lodge Otjahewita (Pty) Ltd v Minister of Environment and Tourism¹ that a court would substitute its own decision for that of an administrative body only in exceptional circumstances. The High Court held that no exceptional circumstances required it to substitute its decision for that of the Board and declined to grant the order sought in para 4 of the notice of motion.

17. The Board and Cospharm were ordered to pay Africure’s costs jointly and severally.

This appeal

18. Africure appealed against the refusal by the court below declining to grant the order directing the Board to act in terms of s 55(5) and award the tender to those bidders in accordance with the 26 April 2023 selection.

19. The Board and Cospharm opposed the appeal. The Board also cross-appealed against the court’s finding that the failure of the Board to notify Cospharm of the outcome of the latter’s application for reconsideration within seven days invalidated the decision and resulted in a nullity.

20. The Board also cross-appealed against the finding that the Board’s failure to inform Africure of the reconsideration applications and afford it an opportunity to be heard amounted to a breach of Art 18 of the Namibian Constitution and rendered the reconsideration exercise invalid and liable to be set aside.

21. Cospharm did not cross-appeal the court’s judgment and orders.

Submissions on appeal

22. The appellant – Africure – supported the High Court’s judgment on the interpretation of the Act in respect of both the effect of the Board’s failure to notify a bidder who applied for reconsideration within the required seven day time period which rendered the process a nullity - and Africure’s right to be heard in heard in respect of reconsideration applications which also vitiated the decision-making.

23. Counsel for the appellant contended that the reconsideration process is terminated after the seven day standstill period and that the Act intends unsuccessful bidders should then move on to the next remedy provided for in the statutory scheme – a review application to the Review Panel. A decision on a reconsideration application not communicated within the seven day period was, according to counsel, of no force and effect. Counsel argued that statutory interpretation in Namibia post-Independence strongly supported that approach and the decision by the court a quo. The term ‘must’ used in s 55(4A) means, so it was submitted, that the duty was peremptory and that non-compliance resulted in a nullity.

24. It was contended that this approach supported the objects of the Act because the bidding process was time sensitive and where expeditious action by decision makers was paramount to prevent delays.

25. Counsel also contended that it did not assist the Board to argue that there was compliance because its decision was taken within the seven day period because it was required to communicate that decision within seven days.

26. Africure’s counsel also submitted that the reconsideration decision was invalid for a further reason – because Africure was not accorded the right to be heard in relation to it.

27. It was argued that the Board’s approach was contrary to the principles of acting with integrity, accountability and transparency.

28. Counsel also argued that the Board’s engagement with bidders in secret is neither fair nor transparent and in violation of Art 18 of the Namibian Constitution.

29. Counsel for Africure also argued that the High Court should have ordered the Board to award the contracts to the successful bidders in accordance with its notice of selection for award dated 26 April 2023 as sought in para 4 of the notice of motion. Counsel contended that once the court a quo set aside the Board’s decision on reconsideration, it meant that there were no reconsideration applications pending and no review before the Review Panel. Counsel argued that s 55(5) of the Act then became operative and the Board was required to act upon its selection set out on 26 April 2023 and award contracts to the successful bidders.

30. It followed, so counsel contended, that the relief sought in para 4, was in the form of a mandamus and not for a substitution as found by the High Court.

31. Counsel for Cospharm had filed written argument in respect of all these issues but only made oral submissions on the appeal against the order granting para 4 of the notice of motion because Cospharm had not filed a cross-appeal. Counsel submitted that the appeal should be dismissed and supported the Board’s cross-appeal.

32. It was argued on behalf of the Board that it could not have been the intention of the legislature to visit invalidity upon the Board’s failure to notify an applicant for reconsideration within seven days where its decision was taken within the required seven day period. Counsel submitted that this approach was supported by recent authority of this Court² as well as earlier case law.³ Counsel argued that there was no prejudice to Africure on the facts of this matter for the Board to communicate its decision outside the seven day time period and that the approach pressed for by Africure and adopted by the court below did not accord with the more modern approach to statutory construction geared to give effect to the purpose of legislation.

33. Counsel for the Board also contended that the legislature did not intend that other bidders should be served with and have an opportunity to be heard in relation to other bidders’ applications for reconsideration, taking into account the test, purpose and context of the provision within the Act. Section 55 (4A) does not require service of reconsideration applications upon other bidders and required only notification of the outcome to the bidder who applied for reconsideration. Aggrieved bidders would have the opportunity to file a review to the Review Panel under s 59 if aggrieved by the reconsideration and bidding process, according to counsel for the Board. Counsel also referred to practical difficulties if service of and the opportunity to be heard was to be accorded to bidders in respect of applications for reconsideration and that an unworkable bottleneck would result.

34. As to the appeal, counsel for the Board submitted that the High Court was correct in finding that substitution is an exceptional remedy and that Africure had not asserted any exceptional circumstances to justify an order in terms of para 4 of the notice of motion. That relief would furthermore not be just and equitable, according to counsel and would result in an award to Africure which had higher prices at considerable extra expense to the public purse.

Issues to be determined on appeal

35. It follows that the following similar issues, which had also been identified by the High Court, are to be determined in this appeal and cross-appeal:

1. the effect of the Board’s failure to notify a bidder (Cospharm) of the outcome of its reconsideration application within seven days;

2. whether Africure had a right to be heard in respect of that reconsideration application; and

3. whether the High Court should have directed the Board to award contracts to the bidders selected in its original notice of selection for award dated 26 April 2023.

36. Before addressing these questions in that sequence, it would be conducive to clarity to refer to the Act and its statutory scheme and the approach of this Court to interpretation of statutes.

The statutory scheme

37. At the outset of the Act (following the definitions contained in s 1 as is customary), s 2 sets out the objects of the Act. The first listed object of the Act in s 2(a):

‘2 Objects of Act

The objects of this Act are—

(a) to promote integrity, accountability, transparency, competitive supply, effectiveness, efficiency, fair-dealing, value for money, responsiveness, informed decision-making, consistency, legality and integration in the procurement, the letting and hiring of anything, the acquisition or granting of rights and the disposal of assets including, among others, to-

(i) harmonise procurement policies, systems and practices that apply to public entities and maximise economy and efficiency in public procurement to obtain best value for public expenditures;

(ii) set and review standards and practices for the public procurement system in Namibia;

(iii) monitor compliance by public entities; and

(iv) build procurement capacity in Namibia;

38. The other objects include promoting and strengthening measures to implement government policies on empowerment and industrialisation including job creation for Namibians and promoting Namibian tenderers.⁴

39. The Act applies to all procurement undertaken by the Board or public entities except where otherwise provided for in s 3.

40. The Board is established under s 8. Its principal objects are:

‘(a) to conduct the bidding process on behalf of public entities for the award of contracts for procurement or disposal of assets that exceed the threshold prescribed for public entities;

(b) to enter into contracts for procurement or disposal of assets on its own behalf or on behalf of public entities awarded by the Board as contemplated in paragraph (a); and

(c) to direct and supervise accounting officers in managing the implementation of procurement contracts awarded by the Board.’⁵

41. In s 9 which lists the Board’s powers, it is enjoined to (must) ‘strive to achieve high standards of transparency and accountability taking into account the objects of this Act and the need to obtain the best value for money’.⁶

42. Under its duties enumerated in s 10, board members are required to:

‘(a) act with fidelity, honesty, integrity and in the best interests of the Board and the procurement system;

(b) exercise a reasonable degree of care and diligence in the performance of his or her functions;

(c) strive to achieve the highest standard of transparency, accountability and the need to obtain best value for money; and

(d) . . . . ’

43. Pertinent to the present proceedings is Part 6 of the Act concerning the bidding process. A bid is to be submitted in writing, duly signed in a sealed envelope⁷ in accordance with the deadline set for bids.⁸ A bid is required by s 49 to remain valid for a period indicated in the bidding documents which may not be more than 180 days, although this can be extended with the agreement of the bidder concerned. The failure to meet specific criteria listed in s 50 will result in the disqualification of a bidder.

44. In accordance with s 51, bids are opened at a time, place and date designated in the bidding documents. At that occasion, the names of bidders and the total amounts of their respective bids are read out and recorded and a copy of the record is made available to each bidder.

45. The examination and evaluation of bids then proceeds by a bid evaluation committee in accordance with s 52. Of importance is s 52(9) which provides:

‘(9) Every bid is evaluated according to the criteria and methodology set out in the bidding documents and is compared with other bids to determine the lowest evaluated substantially responsive bid which meets the qualification criteria.’

46. Of relevance to these proceedings is s 55 concerning the award of procurement contracts. Section 55(1) requires that the Board or public entity must award a procurement contract to the bidder which had submitted the lowest evaluated responsive bid, meeting the specified qualification criteria, but only after the Board or entity has complied with subsections (3), (4), (4A), (4B), (4C), (4D) and (5). Subsection (3) is not relevant for present purposes.

47. In terms of s 55(4), the successful bidder is notified of its selection and the other bidders are notified of the successful bidder and the price, accompanied by an executive summary of the bid evaluation report.

48. Section 55(4A), (4B),(4C) and (4D) provide as follows:

‘(4A) A bidder referred to in subsection (4)(b) may, within seven days from the date of receipt of the notice referred to in subsection (4), apply to the Board or public entity to reconsider its selection of a bid for award and the Board or public entity must, within seven days from the date of receipt of the application, notify the bidder of its decision.

(4B) If the bidder referred to in subsection (4A) does not, in terms of that subsection, receive a response from or is not satisfied with a decision of the Board or public entity the unsuccessful bidder may within the seven days referred to in section 59 apply to the Review Panel for review of the decision or action as contemplated in section 59(1).

(4C) An accounting officer or the Chairperson of the Board where the Board is procuring on behalf of a public entity, may not award a contract or sign any agreement during the standstill period and any contract awarded or agreement signed during the standstill period is invalid ab initio.

(4D) A bidder who is aggrieved by a decision or action of the Board or public entity must exhaust remedies under this section before applying for review under section 59(1).’

49. Section 55(5) is to the following effect:

‘(5) If —

(a) no application for reconsideration is made by any bidder under subsection (4A); or

(b) after the Board or public entity has made a decision on an application under subsection (4A) and no application for review is made under section 59(1),

the accounting officer or the Chairperson of the Board where the Board is procuring on behalf of a public entity, must award the procurement contract to the successful bidder.’

50. Section 58 establishes a review panel to adjudicate upon reviews and other specified matters.⁹ A bidder may apply for review to the Review Panel within seven days after a bidder is notified of a decision. The panel is required to make its decision within 14 days. Bidders are required by s 59(4) to exhaust all available remedies under the Act before instituting proceedings in the High Court.

51. Unlike its predecessor legislation¹⁰ repealed by the Act,¹¹ integrity, accountability and transparency are set out as its fundamental objects at the very outset of the Act in s 2. Those principles are reflected in and exemplified in the Act by the provisions referred to above, including the principle of accepting the lowest responsive bid, ensuring that the scarce resources of the State are best employed in the public interest. The principles of accountability (together with integrity and transparency) are not only the stated objects of the Act but are central themes which are given effect to in the ensuing provisions of the Act and in turn give effect to the principle of accountability inherent to the Constitution.

52. As this Court has previously stressed, the value of accountability although not expressly referred to in the Constitution, is a necessary consequence of the principles of democracy, separation of powers, the rule of law and justice for all embodied in Art 1:¹²

53. The Deputy Chief Justice in Pamo Trading Enterprises CC 7 others v Tender Board of Namibia & others¹³ approved the following passage articulated by the Constitutional Court in South Africa.¹⁴

‘The Constitution carefully apportions powers, duties and obligations to organs of state and its functionaries. It imposes a duty on all who exercise public power to be responsive and accountable and to act in accordance with the law.’

54. The principles of separation of powers and democracy enshrined in Art 1 form the basis for the checks and balances as set out in the Constitution to ensure public accountability in executing the responsibilities of the respective powers, including the allocation and expenditure of resources by the State and public entities.

55. The principle of accountability is thus a value and principle inherent in and fundamental to the Constitution and governance in Namibia.

56. The statement by Cameron JA in Olitzki Property Holdings v State Tender Board & another¹⁵ finds equal application to our constitutional democracy:

‘. . . The principle of public accountability is central to our new constitutional culture, and there can be no doubt that the accord of civil remedies securing its observance will often play a central part in realising our constitutional vision of open, incorrupt and responsive government . . . .’

57. The powerful statement by the High Court in this appeal emphasising the centrality of accountability in the context of the Act is endorsed and bears repetition.

‘[57] The values and principles contained in our Constitution require of public entities, such as the Board, to act in a manner that promotes accountability, responsiveness, openness and fairness when fulfilling its constitutional and statutory obligations. Compliance by public entities with their procedural fairness obligations is therefore crucial, not only for the protection of citizens' rights, but also to facilitate trust in the public administration and in our participatory democracy. . . .’

58. Having set out the statutory scheme with its constitutional context of accountability, it is apposite to refer to the applicable principles governing statutory interpretation.

59. This Court in Namibian Association of Medical Aid Funds & others v Namibia Competition Commission and another¹⁶ recently summarised prior decisions and this Court’s approach to the interpretation of statutes and written documents in the following way:

‘[39] This court in Total Namibia (Pty) Ltd v OBM Engineering and Petroleum Distributors CC recently referred to the approach to be followed in the construction of text and cited the lucid articulation by Wallis JA of the approach to interpretation in South Africa in Natal Joint Municipal Pension Fund v Endumeni Municipality:

“Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed; and the material known to those responsible for its production. Where more than one meaning is possible, each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used.”

[40] In the Total matter, this court also referred to the approach in England and concluded:

“What is clear is that the courts in both the United Kingdom and in South Africa have accepted that the context in which a document is drafted is relevant to its construction in all circumstances, not only when the language of the contract appears ambiguous. That approach is consistent with our common-sense understanding that the meaning of words is, to a significant extent, determined by the context in which they are uttered. In my view, Namibian courts should also approach the question of construction on the basis that context is always relevant, regardless of whether the language is ambiguous or not.”

[41] To paraphrase what was stated by this court in Total, the approach to interpretation would entail assessing the meaning of the words used within their statutory context, as well against the broader purpose of the Act.’¹⁷

60. The purpose of the Act is expressly spelt out in s 2 setting out its objects. Public procurement is to be effected with integrity, accountability and transparency ensuring a competitor supply and value for money by requiring that the lowest responsive bid is accepted. Another central feature to the Act is that public procurement is to be expeditious, providing for tight time lines for bidders to challenge the process and for decisions being taken in respect of those challenges to further the statutory object of efficiency.

61. Having set out the statutory scheme and the purpose of the Act within the constitutional context of accountability, I turn to the questions raised in this appeal.

The effect of the Board’s failure to notify Cospharm of the outcome of its reconsideration application within seven days.

62. Section 55 (4A) firstly requires a bidder to apply to the Board to reconsider its selection of a bid for award within seven days and further requires that the Board notify that bidder of its decision within seven days.

63. The High Court ruled that a failure by the Board to notify Cospharm of its decision within the seven day period was fatal and resulted in the Board’s decision being a nullity. The court reasoned that the failure to notify timeously would undermine the objects of the Act of minimal disruptions and time being of the essence and mean that the objects would not be achieved.

64. The use of the term ‘must’ in s 55(4A) would in accordance with its ordinary meaning cast a clear obligation upon the Board to notify an applicant for reconsideration of the outcome of that application within the seven day period. It is thus mandatory for the Board to do so. The question arises as to the consequence in this case where the decision was taken within seven days but the applicant is not notified of that decision by the Board within seven days

65. This Court has in recent times had occasion to consider the consequence of the failure of public officials performing statutory duties within a required time period for performing that task in Kambazembi Guest Farm CC t/a Waterberg Wilderness v Minister of Lands and Resettlement & others¹⁸ and Torbitt v International University of Management & others.¹⁹ In both instances this Court held that the failure to do so would not necessarily vitiate the exercise of that power.

66. In Torbitt this Court made it clear that the intention of the legislature is to be sought in determining the consequence of non-compliance with a statutory injunction to perform a task within a required period. Torbitt approved of the approach in Volschenk v Volschenk²⁰ where it was held that there is no general rule that all statutory provisions setting time periods are necessarily obligatory and that the failure to comply strictly would result in nullifying all acts done pursuant to that late act. The court held that the intention of the legislature would need to be determined and ‘the reasons ascertained why the legislature should have wished to create a nullity’.²¹

67. In Torbitt, it was held that the failure to comply with a statutory duty upon an arbitrator under s 86(18) of the Labour Act 11 of 2007 to provide an award within 30 days of the conclusion of the arbitration proceedings, did not result in an award delivered after 30 days being a nullity. One of the principal reasons for reaching that conclusion was that it would lead to absurd results contrary to the intention of the Labour Act if arbitrators are disqualified by their own delay from performing their statutory duty. The court in Torbitt concluded that an approach by the court a quo in that matter nullifying the late performance of that statutory duty was to be rejected.

68. The approach of drawing distinctions between ‘mandatory’ or ‘peremptory’ provisions on the one hand and ‘directory’ on the other and mechanically deciding that non-compliance with the former would result in invalidity and requiring only substantial compliance with the latter has been discarded²² and given way to a more flexible approach, as intimated in Rally for Democracy and Progress & others v Electoral Commission of Namibia & others.²³ As stated in Allpay²⁴ in this context, ‘the central element is to link the question of compliance to the purpose of the provisions’.

69. The legislative purpose behind compelling the Board to decide a reconsideration and notify an applicant of the outcome is plainly to prevent delays occurring between selecting the successful bid and implementing that decision. The legislature does so by providing for a brief standstill period in s 55 (4C) after notifying the bidders of the bid selection and the exhaustion of remedies contained in s 55 (4A) and (4B) during which a contract may not be awarded.

70. Section 55(4A) does not expressly state the consequences of the failure to notify within the seven day period except to entitle an applicant who has not received a response within that period to essentially go to the next remedy and file a review to the Review Panel within seven days from that failure. Cospharm exercised that right on 23 May 2023 and, when it did so, the Board realised on 24 May 2023 that it had not notified Cospharm of the outcome of its reconsideration application.

71. The Review Panel had not yet by then heard Cospharm’s review at the time the latter was notified of the success of its reconsideration application on 26 May 2023. Nor had the Review Panel heard the review when Cospharm withdrew it on 6 June 2023.

72. In the circumstances, the delay in notifying Cospharm did not prejudice or delay the hearing of Cospharm’s review and thus the standstill period. Indeed it rendered that review unnecessary and it was withdrawn by Cospharm on 6 June 2023.

73. The purpose behind the inclusion of s 55(4A) affording bidders the right to apply for reconsideration would seem to be directed at addressing complaints about disqualification being dealt with expeditiously to obviate the need for a review of the Board’s selection of bid on that basis.

74. Cospharm’s complaint concerning the disqualification of that portion of its bid and the decision that the bid was not responsive was rightly upheld within 7 days of being lodged. The notification of that outcome beyond that seven day period occurred well in advance of a hearing by the Review Panel and meant that the Compharm’s review was no longer necessary.

75. The statutory objective of expeditious finalisation of internal remedies during the standstill period was thus not compromised by the late notification of the outcome of the reconsideration application in this instance and the underlying decision should not be nullified for this reason. Nullifying the timeous and plainly justified decision to reconsider in the circumstances of this case because it was notified outside the time period in s 55(4A) but where that lateness did not have an adverse impact upon the time lines or the hearing of the final remedy of review before the Review Panel would not in my view accord with the statutory purpose and objects of the Act construed as a whole. Such an approach would not accord with providing a sensible meaning as it would be insensible and unbusinesslike.

76. It would be another matter if the Review Panel had heard Cospharm’s review challenging its disqualification by the Board following the late notification. The late notification would by then have been overtaken by events and the reconsideration decision may then be of no effect and could be disregarded.

77. It follows that in this instance, on the facts of this matter, the non-compliance by the Board in failing to notify Cospharm of the outcome of the reconsideration application within seven days did not render the decision taken within that period a nullity.

78. There is a further reason why a court should not set aside the Board’s decision making in this instance. The nature of a judicial review is after all an equitable remedy. Cospharm had made its reconsideration application timeously. It had in turn been duly considered and determined timeously with the Board correcting a disqualification which called for correction but slipped up in failing to notify Cospharm of its decision within the required seven day period. Cospharm timeously filed a review to the Review Panel and withdrew it when notified of the outcome of its reconsideration application.

79. In the process of reconsideration, the Board had corrected a disqualification and a considerable saving was achieved by selecting Cospharm’s bid instead of the higher priced bid by Africure of those items. The statutory objective of selecting the lowest responsive price for those items was in the process achieved as well as the objects of fair dealing with Cospharm’s timeous and justified complaint having been addressed. It would counter the objects of the Act for Africure’s more expensive bid to be selected on such technical grounds after Cospharm had timeously exercised its remedies of both reconsideration and later a review to the Review Panel which it then withdrew.

80. It would furthermore thus be inequitable to set aside the Board’s decision to reconsider Cospharm bid and select it in the circumstances. The court below should have declined to do so in the exercise of its discretion for this reason as well.

Did Africure have the right to receive Cospharm’s reconsideration application and the opportunity to be heard in relation to it?

81. The answer to this question is dependent upon the interpretation to be given to s 55(4A), in the context of the Act.

82. This section entitles a bidder to apply to the board for reconsideration its selection and the Board is duty bound to notify the bidder of its decision. As the High Court correctly stated, the interpretation to be given to s 55(4A) is within the context of bidding and the awarding of procurement contracts in s 55 which has made time of the essence for the taking of steps after the selection of the successful bidder is known. The reconsideration application is to be considered in the context where the legislature has provided for the very speedy exercise of remedies so as not to delay and disrupt the awarding of contracts. After being provided with the executive summary of the bid evaluation report, an unsuccessful bidder has a mere seven day period within which to apply for reconsideration and is then to be notified of that outcome within a further seven day period. If unsuccessful, that applicant has a further seven day period to review the Board’s decision to the Review Panel which makes its decision within 14 days.

83. An application to reconsider under s 55(4A) is essentially to address the reason given for disqualification or unresponsiveness on the part of a bidder. That would be matter ordinarily within the peculiar knowledge of a bidder for it to address.

84. Section 55(4A) does not require that notice of such an application should be given to other bidders. There are sound reasons why the legislature chose not to require this. This tender demonstrates why this would be highly impractical and an impossibility for the Board to determine reconsideration applications within seven days. The bids in this tender each ran into several volumes for pharmaceutical supplies valued at some N$1,4 billion. There were 26 bidders. A reconsideration application would invariably have little meaning for other bidders in the absence of the full bid made by the applicant for reconsideration. To serve an application for reconsideration together with the bid upon 25 other bidders within seven days is well-nigh impossible. And then for other bidders to be afforded the opportunity to be heard in relation to that application, also within the same seven days period enters the realm of impossibility. In this instance there were furthermore multiple applications for reconsideration.

85. An application for reconsideration without the bid in question would render notice and the opportunity to be heard meaningless.

86. Section 55(4A) does not require service of such an application upon other bidders. Had the legislature intended an opportunity for them to be heard, service upon the other bidders would have been required. Section 55(4A) further requires that the Board is to notify the bidder ‘which applied’ and not the bidders who made bids’ of the outcome – and not the bidders. These are further indicators that the legislature intended to exclude the opportunity to be heard in respect of reconsideration applications.

87. The statutory purpose of an application contemplated by s 55(4A) read in the structure of s 55 read as a whole and with s 59 would not in my view include the opportunity to be heard (and notification of the terms of such an application) for other bidders.

88. Significantly Africure did not in any sense articulate what it would have said if it had the opportunity to be heard. This is of course not the test as to whether it had a right to be heard but is an indication of the limited nature of any input another bidder can make on a disqualification issue and that the right contended for would not arise.

89. Other bidders would have the right to review the decision of the Board taken upon a reconsideration application to the Review Panel under s 59. The other bidders would then have the opportunity to be heard in relation to that reconsideration application after the fact if it were to have succeeded. Other bidders thus have an opportunity to be heard within the statutory scheme in accordance with the fundamental right to administrative justice protected in Art 18 of the Constitution.

90. It has after all been held that procedural fairness including the right to be heard (audi) is not necessarily relevant to every exercise of public powers and that what procedural fairness requires would depend upon the circumstances of each particular case.²⁵

91. In Nelumbu & others v Hikumwah & others, the Deputy Chief Justice emphasised the flexibility of the right to be heard in the following way:

‘[52] The importance of specificity in relying on breach of audi under art 18 of the Constitution is accentuated by the fact that audi is not a one size fits all but a flexible principle. As has correctly been stated by Hoexter in Administrative Law in South Africa (2012) 2 ed at 362:

“(P)rocedural fairness is a principle of good administration that requires sensitive rather than heavy-handed application. Context is all important: the context of fairness is not static but must be tailored to the particular circumstances of each case. There is no longer any room for the all-or-nothing approach to fairness. . . . An approach that tended to produce results that were either overly burdensome for the administration or entirely unhelpful to the complainant.”

[53] Gauntlett JA (as he then was) stated the following in the Lesotho case of Matebesi v Director of Immigration and Others LCA C of A (Civ) 2/96 (31 July 1998):

“Whenever a statute empowers a public official or body to do an act or give a decision prejudicially affecting an individual in her liberty or property or existing rights, unless the statute expressly or by implication indicates the contrary, that person is entitled to the application of the audi alteram partem principle . . . .”

. . .

[54] His honour went on to add that:

“The right to audi is, however, infinitely flexible. It may be expressly or impliedly ousted by statute, or greatly reduced in its operation . . . .”’²⁶

92. It follows that Africure did not have the right to be heard in respect of the reconsideration application or service of it upon it.

93. It further follows that Africure’s application to review and set aside the Board’s decisions of 9 May 2023 communicated on 12 June 2013 in granting reconsideration applications referred to in para 1 of the notice of motion should have been dismissed. So too its application to review and set aside the Board’s decision, set out in the notice of selection of procurement award of 3 August 2023, should have been dismissed.

94. It accordingly follows that the Board’s cross-appeal accordingly succeeds.

The third issue

95. Given the outcome of the cross-appeal, Africure’s review application should have been dismissed. The question raised by the appeal as to whether the court a quo should have ordered the Board to award contracts to bidders in accordance with the selection notice dated 26 April 2023 falls away because the decisions should not have been set aside. The appeal against the refusal to grant such an order is accordingly dismissed.

Conclusion

96. The following order is made:

1. The appeal is dismissed with costs, including the costs of one instructing legal practitioner and two instructed legal practitioners where engaged.

2. The cross-appeal succeeds with costs on the same scale as in paragraph (a).

3. The order of the High Court is set aside and replaced with the following order:

‘The application is dismissed with costs, including the costs of one instructing and two instructed legal practitioners.’

______________________

SMUTS AJA

______________________

ANGULA JA

______________________

FRANK AJA

APPEARANCES

APPELLANT: N Bassingthwaighte (with R Katjijere)

Instructed by Brockerhoff &

Associates

FIRST RESPONDENT: L Ihalwa

Instructed by Sisa Namandje & Co Inc

SECOND RESPONDENT: T C Phatela (with him, E Nekwaya on the heads of argument)

Instructed by Government Attorney

TWENTY-SEVENTH & TWENTY-EIGHTH

RESPONDENTS: G L Kasper

Of Murorua, Kurtz & Kasper Inc