A conflict between SAA’s Air Chefs company and Mantelli’s Biscuits over a tender for savoury crackers has ended up in the Johannesburg high court, where Air Chefs lost its application and Mantelli’s Biscuits its counter-application.
The case saw Air Chefs being reported to the public protector by Mantelli Biscuits for irregular procurement processes and allegations of maladministration, corruption and improper conduct by a state entity. Air Chefs in turn applied for a judicial review of the public protector’s decision, which was countered by Mantelli.
The case dates back to April 2013 when state-owned company Air Chefs invited suppliers to bid for the supply of various dry snacks — one of them being dry crackers.
Simon Mantell, sole proprietor of the business Mantelli’s Biscuits, submitted a bid offering Mantelli’s Wheat Crackers, and the offer was accepted by Air Chefs, who awarded him the tender in a letter signed on February 17 2014.
But on February 24 that year, Air Chefs had a change of heart and advised Mantelli’s telephonically that, despite the clearly worded letter informing them that they were the preferred supplier, Air Chefs had instead decided to go with their current supplier, Ciro Beverages Solutions, which was supplying them more than 90% of their savoury cracker procurement with Wheatsworth crackers.
In the meanwhile, Mantelli’s had signed their letter of acceptance on the deal and waited for a supplier agreement from Air Chefs, which never came.
But on March 11 2014, after having formally withdrawn the offer they had made to Mantelli’s, Air Chefs said because 95% of their cracker supplies were already coming from Ciro, there was now effectively no business for Mantelli’s.
Feeling aggrieved, two weeks later, Mantelli’s lodged a complaint against Air Chefs with the public protector. The investigation went on for three years, during which time Mantelli’s supplied further documentation showing what it believed to be illegal and ultimately fraudulent conduct on the part of numerous parties involved in the matter.
Almost six years later, the public protector published her final report on the matter in January 2020. She found that the decision taken by Air Chefs to “revise” their offer to Mantelli’s was irregular and constituted improper conduct and/or maladministration, finding that Air Chefs had put out a tender to provide services and not an invitation for a bidder to become one of a panel of service providers.
The public protector found that by changing the wording of the offer, the acting CEO of Air Chefs had acted improperly and was guilty of maladministration.
At first blush, the relief sought by Mantelli’s is wholly incompetent for the simple reason that his counter-application is in the nature of a judicial review of an administrative decision, in which is sought an exceptional substitution order.
— Judge Leicester Adams
She found that unlawful conduct on the part of Air Chefs and SAA had resulted in Mantelli’s being unlawfully and improperly prejudiced in the form of financial loss or expenses incurred in preparing and submitting the bid documents, as well as other related expenses.
The public protector directed the chairperson of the SAA board of directors to apologise to Mantelli’s and its proprietor within 10 working days of the issue of her report for subjecting them to unnecessary litigation. She also instructed the airline to reimburse Mantelli’s for all proven out-of-pocket expenses relating to meetings, travelling, accommodation, exchange of correspondence with SAA, seeking legal opinion and representation in his long-standing dispute with SAA within 30 days.
In October last year, aggrieved by the public protector’s findings, Air Chefs applied for a judicial review to have the public protector’s report set aside, as well as the findings and remedial action ordered.
Mantelli’s responded with a counter-application against Air Chefs, seeking an order for the allegations of procurement irregularities and maladministration to be properly investigated. Air Chefs also asked that instead of being compensated only for proven out-of-pocket expenses, that Air Chefs and SAA be ordered to pay Mantelli’s damages of R5.3m.
“At first blush, the relief sought by Mantelli’s is wholly incompetent for the simple reason that his counter-application is in the nature of a judicial review of an administrative decision, in which is sought an exceptional substitution order. The public protector does not have the power to judicially review administrative decisions,” judge Leicester Adams said in a judgment passed on Friday.
Air Chefs contended that the findings by the public protector, and the remedial action recommended by her should be declared unlawful, reviewed and set aside on the basis that it was irrational as the findings cannot be reconciled with the objective material that was placed before her.
Air Chefs argued that the problems with the flawed tender were systemic and had been confirmed in a Treasury report. It said there was no basis for a finding of maladministration guilt and there had been no ongoing prejudice to Mantelli’s. The withdrawal of the business offer had been the correction of a patent error in the bidding process and there had been no malice.
Air Chefs said that the remedial action ordered was therefore irrational and baseless.
The court dismissed Air Chefs request for a judicial review of the public protector’s remedial action, saying that her findings were justified and rational insofar as they relate to maladministration and improper conduct.
There had been no findings of dishonesty or fraud in the report, and the remedial action ordered was held to be rational.
Mantelli’s counter-application was also dismissed as “wholly incompetent” in seeking “an exceptional substitution order” in a situation where the public protector does not have judicial review powers. The report was said to be the findings of an investigation and “not a process to recover contractual or delictual damages”.
The parties were ordered to each pay their own costs.
