Section 18(1) of the Superior Courts Act 10 of 2013 ("the Act") permits a court to make effective a decision pending an appeal under "exceptional circumstances". This will be ordered where a litigant, in terms of section 18(3) of the Act, is additionally able to show that he or she will suffer "irreparable harm" if the court does not order a suspension. A litigant must also show that the other party to the suit will not suffer "irreparable harm" if the court orders execution of the order, despite an application for leave to appeal.
In the case of Tyte Security Services CC v Western Cape Provincial Government and Others, the Supreme Court of Appeal ("the SCA") dealt with how sections 18(1) and 18(3) of the Act operate. The court specifically focused on what constitutes exceptional circumstances.
History of the litigation
The Western Cape Provincial Government ("the Provincial Government") contracts with security companies for the provision of security services for property owned by it. As such, the Provincial Government issued a tender on 25 March 2021 to Seal Security ("Seal") and Tyte Security Services ("Tyte"). An unsuccessful tenderer, Red Ant Security Relocation and Eviction Services (Pty) Ltd ("Red Ant"), successfully applied to the High Court to set aside the issuing of the tender to Seal and Tyte. Seal and Tyte continued to provide services to the Provincial Government as the order of invalidity was suspended pending the procurement of services by the Provincial Government.
The Provincial Government invited fresh bids for the tender and on 31 May 2023, the tender was awarded to Royal Security ("Royal"). A review application in respect of this award was pending. On 15 June 2023, Seal and Tyte made an urgent application in the High Court to interdict the Provincial Government from implementing the tender awarded to Royal pending the outcome of the review application. On 27 June 2023, the High Court ordered that Seal and Tyte could continue to render services to the Provincial Government pending the outcome of the review application.
On 21 February 2024, the High Court delivered its judgment and dismissed the review application launched by Seal and Tyte to set aside the tender awarded to Royal. The High Court ordered Seal and Tyte to hand over the operations to Royal within one month of its order. Subsequently, Tyte applied for leave to appeal this order.
The section 18 application: High Court's Findings
Royal made an application in terms of sections 18(1) and (3) of the Act in the High Court where they sought an order placing the 21 February 2024 order into operation, despite the pending application for leave to appeal. Tyte opposed Royal's section 18 application.
The High Court found that Seal and Tyte had the benefit of the entire period of the tender despite the award being unlawful. Royal was, on the other hand, denied the benefit of at least one year of revenue on not being permitted to perform under the tender lawfully awarded to it. The potential for irreparable harm was not present in any way in respect of Tyte.
The court ruled in favour of Royal. As such, the operation of the High Court's orders in the review application was to be implemented despite Tyte's application for leave to appeal the 21 February 2024 order. This permitted Tyte to appeal automatically to the SCA against the order in Royal's section 18 application.
The Section 18 application: SCA's findings
The court analysed the wording of sections 18(1) and (3) of the Act. In doing so, it held that the enquiry into exceptional circumstances is always determined on a case-by-case basis. There is no general rule to determine what constitutes exceptional circumstances which exist where something is rare, unusual or uncommon.
Furthermore, the exceptional circumstances enquiry is the overarching consideration, but it cannot be divorced from the irreparable harm determination. A determination as to whether the requirements of sections 18(1) and (3) of the Act are satisfied requires more than a compartmentalised or "tick box" approach. Instead, the absence or presence of irreparable harm is subsumed into the exceptional circumstances enquiry and will inform whether exceptional circumstances exist. Exceptional circumstances cannot exist without irreparable harm also existing and vice versa.
In terms of the determination of irreparable harm, a mechanistic approach is not adopted. Although a litigant is to prove irreparable harm, this does not strip the court of discretion. Ultimately, it is the court which must determine if irreparable harm is suffered. To strip the court of this discretion would undermine the rule of law and do away with the rationality, reasonableness and proportionality yardsticks that are prevalent in our jurisprudence.
Turning to the facts, the SCA concurred with the High Court. The court found that Tyte focused on the profits it would lose if the suspension were ordered and ignored the fact that it had received, and continued to receive, the fruits from an unlawfully awarded tender. Tyte failed to mention these facts and subsequently was not deemed to have suffered irreparable harm.
As a result, Tyte's appeal was dismissed with costs, including the costs of two counsel.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.