MWI ZIMBABWE (PVT) LTD v RUWA TOWN COUNCIL & ANOR 2011 (2) ZLR 79 (H)

Flynote

Administrative law — review — grounds for — legitimate expectation — contractual matter — party awarded tender by town council — decision to award tender not communicated to party — no legitimate expectation that tender would be awarded

? Local government — urban council — resolution — rescission of — process to be followed — Minister of Local Government — no power to rescind resolution — may direct council to do so — district administrator — no power to rescind or suspend council resolution

Headnote

? The first respondent town council had invited tenders for the supply of water to the town. The council's technical committee had recommended that the tender be awarded to the second respondent, which was the lowest bidder, but the council resolved to award the tender to the applicant. The district administrator for the area wrote to the secretary of council, directing that the resolution to award the tender be suspended in termsof s 314(1) to (3) of the Urban Councils Act [Chapter 29:15]. A special full board meeting of the council was held on the issue as a result of the district administrator's letter. A motion to rescind the previous resolution and accept the technical committee's recommendation was adopted and the tender awarded to the second respondent. A week later, the Minister of Local Government, purportedly acting in terms of s 314 of the Act rescinded the resolution, which had already been purportedly rescinded by the council. He said that the resolution violated s 211 of the Act, as it was not in the best interests of the inhabitants of the town, who had not had safe and adequate water supply for a long time.

The applicant then filed an application, seeking an announcement of the results of the tender within four days of the order and an interdict against the award of the tender to any party other than itself. On the return day, it proposed to seek a declaration of nullity of the rescission of the tender and an order that it be confirmed as the winner of the tender process. It was argued for the applicant that the resolution still subsisted and that it granted a legitimate expectation to the applicant that it won the tender.

It was argued for the council that the resolution was properly rescinded by council in terms of s 89 of the Act. It was also 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.

Held, that the procedure for rescission of a council resolution is set out in s 89 of the Act. That procedure was not followed: no committee was set up that recommended cancellation of the resolution, nor was there evidence that seven' days notice of motion, signed by not less than one-third of the membership of the council, was moved through the chamber secretary before the meeting at which the resolution was purportedly rescinded.

Held, further, that the district administrator had no authority to usurp the Minister's powers in s 314 of the Act, nor did he have power to suspend the resolution pending discussion.

Held, further, that the Minister is not empowered by s 314 to rescind council resolutions. He may, if he 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 or is not in the national or public interest, may direct the council to reverse, suspend or rescind such resolution. It is the 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.

Held, further, that here, the rescission was not properly rescinded and was still extant. The council had yet to comply with the Minister's directive.

Held, further, that under s 88(6)(b)(ii) of the Act, the public has no right to inspect or obtain copies of minutes relating to a tender where the lowest bid is not the one accepted by the council. Accordingly, until the offer was communicated, the applicant had no legitimate expectation that the tender would be awarded to it. Further, the process of oversight by the Minister or council over council decisions demonstrated the absence of any legitimate expectation by any tenderer in the process until the conclusion of the oversight role.