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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
JUDICIAL REVIEW NO. HBJ0006J OF 2004S
BETWEEN:
THE STATE
v.
THE MAJOR TENDERS BOARD
RESPONDENT
EX-PARTE: FIJI BROADCASTING CORPORATION LIMITED
APPLICANT
COMMUNICATIONS FIJI LIMITED
1ST INTERESTED PARTY
THE CHIEF EXECUTIVE OF THE
DEPARTMENT OF INFORMATION,
MEDIA RELATIONS AND COMMUNICATIONS
2ND INTERESTED PARTY
Counsel for the Applicant: Ms G. Phillips: Munro Leys & Co.
Counsel for the Respondent &: J.J. Udit: Attorney-General’s
Second Interested Party S. Sharma Chambers
Counsel for the 1st Interested Party: H. Lateef: Lateef & Lateef
Date of Judgment: 13 January, 2005
Time of Judgment: 10.00 a.m.
JUDGMENT
This is a claim for judicial review by the Applicant against the decision of the Respondent made on 25 November 2003, to award the Public Service Broadcasting (PSB) nation-wide, in the Hindi language for the years 2004 – 2006, to the 1st Interested Party. This Court had, on 25 March 2004, granted leave and a stay. Thereafter, expedited procedure for hearing was ordered. In the meantime, upon the Second Interested Party’s application, heard on 14 April, 2004, its Chief Executive Officer, was granted authority to make temporary arrangements for the continuing provision for public service broadcasting that would otherwise be affected by the stay. Arising out of the exchange of affidavits, the Applicant made on 20 September, 2004 further application for discovery and leave to amend its Motion. I ruled in favour of the Applicant’s Summons and ordered that the Respondent disclose the Minutes of its hearing(s) and other relevant matters it took into account, including the Report of the Tender Evaluation Committee. I also granted leave to the Applicant to file additional grounds to its motion.
BACKGROUND
The PSB nation-wide before 1998 was provided by Government through the Fiji Broadcasting Commission established under the Broadcasting Commission Act, 1953 (Cap 105). Following its corporatisation, these services beginning in 1998 were contracted out. The initial 3-year contract (1998 – 2001) was given to Island Networks Corporation Limited, the predecessor of the Applicant. Similarly, the PSB from 2001 to 2004 was again awarded to the Applicant.
For the period 2004 to 2006 the 2nd Interested Party called for public tender through the normal process and for which the Respondent was responsible. The tender was called on 16th July and closed on 21 August 2003. The Terms and Conditions specified, inter alia, as follows:
“1. The Government Tender Conditions and the attached Special Conditions will apply to this Tender.
The “Special Conditions” referred to at paragraph 1 of the Tender Document above and attached to it outlined the “Guidelines for the Preparation of Public Service Broadcast Tender”. The documents sets out the objective and tasks of PSB, as well as the standards required programme contents, quarterly reports, limitation on advertisements and annual review of the contract. Paragraph 3 on “General Information” stated:
“Suppliers tendering for the contract should provide comprehensive information about their transmission capability and professional standards of broadcast content and presentation. (Power-point, video or audio tape of the proposed PSB facilities, including programme content and presentation of programmes in Fijian and Hindi should be presented to assist and form part of their presentation.)
Under the heading “The Tasks of PSB in Fiji” the Guideline elaborated that the “Public Service Broadcasting in Fiji is tasked with the following responsibilities –
On 21 August 2003, the Applicant submitted its tender. It submitted a combined Fijian/Hindustani PSB, a separate Fijian PSB and a separate Hindustani PSB. For the Fijian/Hindustani PSB, its price was $1.3m (VEP); for the separate Fijian PSB its price was $1.1m (VEP; and for the separate Hindustani PSB its price was $0.6m (VEP). The 1st Interested Party also submitted its tender in, but it tendered for the Hindustani PSB only. Its price was $438,750.00.
Grounds for Claim
The Applicant rely on the following grounds for its claim for judicial review of the Decision:
I shall deal with each ground in turn.
The issue is whether there was irregularity in the procedure adopted by the 1st Interested Party to such an extent that the process was a nullity. In support, the Applicant argued that the Decision was ultra vires the Supplies and Services Instructions and the Stores Instructions 1982 because:
“(a) it failed to tender specifically for each of the Fijian and Hindi language services and to offer a “package” for both and/or
(b) it failed to tender specifically for the Fijian language service and/or
(c) it failed to tender for the provision of services for the period 2004 – 2006, commencing 1 January 2004 and/or
(d) whereas the tender specifications were explicit in requiring national coverage and coverage of the entire population, the CFL tender appears to have been confined to the Hindustani speaking market.”
The Finance (Supplies and Services) (General) Regulations 1982 (“the Regulations”) and the Supplies and Stores Instructions 1982, were made by the Minister responsible for Finance, under The Finance Act (Cap 69) to facilitate the administration management and control of public finance.
The Control of tenders is governed by Regulation 12. It establishes the Major Tenders Board (“the MTB”) with the Deputy Secretary for Finance (Administration) as its Chairman. Amongst other duties and powers it is given it, under Regulation 12 (8) (a):
“shall consider and may authorise the acceptance of any tender called for by the Controller for the supply of goods and services or for the purchase of public stores where the price of those goods services or stores specified in the tender, or in any other tender relating to the same goods, services or stores exceeds twenty-five thousand dollars, and
(b) ....... ,
and, in considering any such tender, indent or order, shall conform with any appropriate instructions issued by the Board under paragraph (5) of regulation 11.”
Regulation 11 deals with the functions of the Supplies and Services Board (“the Board”) set up under Regulation 10, which acts in a supervisory capacity over the tenders, indents and orders of supplies of goods and services to or for the purchase of public stores for Government. Paragraph (5) of Regulation 11 states that the Board:
“(a) shall formulate a policy for standardisation or public stores and shall assess and select the most suitable sources of supply of goods and services; and
(b) may issue instructions to any other tenders board as respects compliance with such a policy and the purchase of goods and services from such sources.”
Regulation 12 (10) sets out the ultimate powers of the MTB. It states:
“(10) Where the Major Tenders Board is satisfied, after considering any tender, indent or order –
(a) that the tender is unreasonable or collusive; or
(b) that the indent or order is unjustifiable, it shall reject the tender or refuse to approve the issue of the indent or order, as the case may be.”
The Applicant has also referred to the Supplies and Services Instructions 1982, (“Instructions”) issued by the Minister responsible for finance, under section 3 of the Act. Instruction 1 states as follows:
“1. - (1) These Instructions, issued on the authority of the Minister under the provisions of section 3 of the Finance Act, 1981 (hereinafter referred to as “The Finance Act”) shall be read in conjunction with the Finance (Supplies and Services) (General) Regulations, 1982 made under the provisions of that Act, shall come into force on the 1st day of May 1982 and shall be observed by all the officers.”
In particular, the Applicant referred this Court to Instructions 48 (1), 50 (3) (4) and 53 (2) (5) (6) (9) of the 1982 Instructions, all dealing with tenders for the supplies of goods and services for the Government.
Instruction 48 (1) reiterates Regulation 16 that all tenders within Fiji shall be issued by the Controller.
Instruction 50 deals with invitations to tenderers. Instruction 50 (3) and (4) set out the procedure to be adopted where there are changes or amendments to the specifications of goods or services being tendered. They provide as follows:
“50. (3) Where any change is made to the specification of the goods or services to be supplied or the public stores offered for sale, a public advertisement shall be made advising potential tenderers of such alteration in the specifications or a fresh advertisement shall be published incorporating the revised specifications and cancelling the previous advertisement.
(4) Where any alteration is made to the date and time by which tenders shall be submitted, such information shall be submitted by way of advertisement.”
Instruction 53 describes the procedure and consideration and evaluation of tenders received. Of relevance to the Applicant’s submission are the following:
(3) .....
(4) .....
(5) All tenders received and opened shall be referred to the Controller who shall appoint officers of his department and, where necessary, technical or specialist officers from any other department to examine and evaluate such tenders.
(6) No tender which does not comply with the specification or conditions stated in the advertisement for such tender shall be considered as a valid tender.
(7) ......
(8) ......
(9) All persons from whom a tender is received, other than a person receiving a late tender whose identity is unknown, shall be informed as to whether their tender has been accepted or not, the name of the successful tenderer, if any, and the price offered by, and accepted from, that successful tenderer.”
The thrust of the Applicant’s argument under its first ground of claim, is that the Respondent had failed to comply with any or all of the procedural requirements above, in accepting the 1st Interested Party’s tender for the provision of PSB Hindustani programme. The tender documents, which includes the Advertisement itself and the Guidelines, according to the Applicant, makes clear that all tenderers were required to tender for both the Fijian and Hindustani programmes together as a package, and in addition also required to tender for each of the Fijian and Hindustani programme individually or separately. The specifications stating:
“suppliers are invited to tender for the provision of PSB programmes in Fijian and Hindi as a package.”
“suppliers are also required to tender for PSB programmes in each of the two vernacular languages, Fijian and Hindi separately”
must be read according to the Applicant, conjunctively. The two limbs, Counsel argued, are meant to be read together, if the second limb is to make any sense. In other words, Applicant contends, all tenderers must comply with both limbs of the specification.
Applicant also referred to the specifications requiring the PSB service to “provide national and regional coverage reaching the entire population.” It argued that the Respondent had not conformed to the specification by accepting the Respondent’s tender for a PSB Hindustani service, limited and confined to specific areas of Fiji only.
The Respondent disagreed with the conjunctive interpretation favoured by the Applicant. Government policy, according to the affidavit of the Chairman of the MTB of 17 June, 2004 favoured competition in the selection process of the provision of PSB. As such, the specifications in the tender must be presumed to be split and that the tenderers could have tendered for either the combined PSB or individually. Either tender was, according to the Respondent, valid.
The Respondent also argued that the Applicant was well aware of the possibility of splitting the PSB as it had made submissions specifically against it in its tender. In addition, the Applicant had in recognition of this, also submitted a split tender.
Finally, the Respondent argued that the Applicant should have sought clarification if it entertained any doubts on the details to be provided in the tender. This it failed to do.
Counsel for the 1st Interested Party submitted that it had specifically sought clarification from the 2nd Interested Party, as provided by the tender documents, on whether the specifications for the provision of PSB programmes were to be read together, or whether tenderers could tender separately for either the Hindi or Fijian programmes, without the package. It tendered for the PSB Hindustani programme, only after assurance from the 2nd Interested Party, that it could do so. At any rate, Counsel argued that the specifications for tenderers were merely directory, not mandatory. A tenderer may if it so wished, tender for only one of the PSB programmes and still qualify as a legal tender.
There is not a doubt in my view, that the so-called specifications contained in the tender document and in the Guidelines for the provision of PSB programmes must be read conjunctively, that is, together. A simple reading and interpretation of the specification and how it is set out, can only logically conclude that the two limbs are linked conjunctively. The “Suppliers” who are invited to tender for “the provision of PSB programmes in Fijian and and Hindi as a package” in the first limb are the same “suppliers” who by the use of the adverb “also” under the second limb, are invited to tender for the separate Fijian and Hindustani programmes. “Also” is defined in the Concise Oxford Dictionary (7th Ed.) as meaning “in addition, besides...”; and in the Shorter Oxford Dictionary (3rd Ed.) as “further, too ...” Not only must the tenderer tender under the first limb, but it is also, in addition, or further, required to tender under the second limb. One cannot apply independently of the other. This is the plain and simple meaning of the tender documents.
The 1st Interested Party was quite within its rights to seek further Clarification before it tendered. Obviously since it was not in a position to offer a package for the two vernacular programmes let alone the PSB Fijian programme, it needed the clarification from the 2nd Interested Party to proceed. Its action cannot be faulted.
The Applicant on the other hand did not find any clarification from the 2nd Interested Party necessary. So far as it was concerned, the tender document was clear and unambiguous. It submitted combined Fijian/ Hindustani PSB, a separate Fijian PSB, and a separate Hindi PSB, in accordance with the tender document and Guidelines requirements. Its action too cannot, be faulted.
It matters not as argued by the Respondent, that the Applicant was aware of the intention to split or sever the PSB programmes. That is not in question. Whether Government has already in place a policy that encourages competition and may lead to severance of the PSB, in my view, is also not relevant. The issue is whether the Respondent had complied with the Regulations and the Instructions given the requirements and specifications of the tender documents by its acceptance of the 1st Interested Party’s tender. Quite clearly in the light of the Court’s finding above, the Respondent may only accept a tender for the provisions of separate Fijian and Hindi PSB if the tenderer had already submitted a tender for the package PSB programmes. There is no question that the requirement of tendering for all and not only one or some was mandatory. A tenderer cannot tender for one or the other. It must make submissions on each. The acceptance by the Respondent of the 1st Interested Party’s only tender for a Hindi PSB there is not in accordance with the requirements as set out in the tender documents or the Guidelines.
The next question then arising is whether the Respondent’s non-compliance makes the process a nullity. In other words, whether the provisions of the Regulations are mandatory and that non-conformity with its requirements is fatal to the decision-making process of the Respondent. Instruction 53 (6) set out above, leaves no doubt that any tender that fails to comply with the specification or conditions of the tender as advertised shall not be considered as a valid tender. The use of the word “shall” makes the compliance with the specification or conditions mandatory. It is not optional.
In the light of the above, the Court finds that the Respondent had failed to comply with the requirements of Instructions which resulted in its acceptance of the 1st Interested Party’s tender for the PSB Hindustani programme only. The ground of procedural ultra vires as argued by the Applicant succeeds.
2. Whether the Respondent Had Failed to
take into Account Relevant Consideration
The Applicant, in support of its argument under this ground, submitted that the Respondent had not considered the fact that it already has in existence the infrastructure to provide a national service in both the Fijian and Hindi programme. The Guidelines stated categorically that the responsibilities for PSB suppliers were to “provide national and regional coverage reaching the entire population”. The Applicant was the only tenderer with the national infrastructure in place, that is able to provide the national coverage for the entire nation in both vernaculars. In its submission, the Applicant stated that the Respondent had failed to take into consideration this very important factor. This factor, the Applicant further argued, is conceded by the 1st Interested Party.
For its part the 1st Interested Party, while conceding that its present infrastructure does not yet permit national coverage, it understood “national” coverage for Hindustani PSB to mean Hindustani listeners, who in the main are restricted to the main islands of Fiji. In any case, the 1st Interested Party was already embarked on construction of a new radio network to cater for the tender it had won.
The Guidelines are equally a part of the tender conditions as are those in the primary documents. This is because they form part of the Special Conditions that were attached to Tender Conditions, and which paragraph 1 of the Tender stipulated specifically as follows:
“The Government Tender Conditions and the attached Special Conditions will apply to this Tender” (emphasis added)
In my view, the Respondent was obliged to consider the issue of whether a tender was capable of providing a “national and regional coverage reaching the entire population” as a relevant matter in its deliberation. Failure of it to do so, would make the decision fall foul of the Wednesbury principle.
The minutes and the Record of the Meetings of the Respondent provided to this Court does not unfortunately show anything to satisfy me that there were any serious discussions on the issue of national and regional coverage by PSB providers. This is notwithstanding that this matter was fully covered by the PSB Tender Evaluation Committee. In my view, the ability for both the PSB Hindustani and Fijian, to have a national, let alone, regional reach, was an essential and relevant issue to be considered. The fact that, as claimed by the 1st Interested Party, the majority of the Hindustani listeners are confined to the main islands is irrelevant. It is Government’s decision and policy that the two vernaculars both have national reach. It could very well be, that the 1st Respondent is undertaking to build a new radio network to broaden its reach to those areas of Fiji it still does not presently cover. The fact remains that there is no evidence from the record of the meetings of the Respondent that this important issue was ever raised nor discussed. It is not for this Court to say that the Respondent’s decision would have been different if it had taken the issue on board. It may have possibly arrived at the same decision it reached even if it had deliberated on the matter. The record shows that the Respondent had failed to show that it had considered it in any of its meetings, and the issue, this Court having decided it to be a relevant matter that should have been considered, its non-inclusion or omission from the discussion, gives merit to the Applicant’s claim.
On this ground, the Applicant also succeeds.
3. Whether the Respondent Took Into
Account Irrelevant Consideration.
There are a number of matters which the Applicant argued were irrelevant, yet taken into consideration by the Respondent. These are summarised in the Chairman, Major Tenders Board Shiri Chand’s affidavit of 17 June 2004 and specifically at paragraph 22. Paragraph 22 of Shiri Chand’s affidavit attempts to set out in detail the reasons for the Respondent’s decisions. The Minutes of the Respondent’s two (2) meetings of 28 October 2003 and 25 November 2003 however do not bear out these reasons. It could very well be, and I have no reservations whatsoever in accepting it, that the reasons enumerated by Mr Chand were elaborations of the discussions which took place at the meetings. What is nevertheless clear from the minutes of the 28 October 2003 meeting, and which it appears, a fuller discussion of the tender took place, is that, the Respondent, as argued by the Applicant, had taken into account irrelevant considerations. For example, the Respondent appeared moved by the view of a member that simply expressed that there should be competition and that “FBCL inherited everything from Government and have not invested anything to upgrade the system.” This in my view, is totally irrelevant to the tender process of which the Respondent is supposed to be charged with. The tender system is meant to be the competitive process, from which the Respondent selects the best and the most-merited for Government. Simply saying that there should be competition without giving reasons and alleging that one of the tenderers had inherited everything from the Government, are wholly irrelevant to the decision making process by the Respondent, and not in conformity with the tender specifications.
The reasons for the decision of the Respondent as conveyed in Mr Chand’s affidavit of 17 June 2004, are equally susceptible to the same argument of irrelevancy advanced by Counsel for the Applicant. Issues such as audit requirement, introduction of satellite and the need to develop the tenderers’ infrastructure, are irrelevant matters that should not have formed the basis for decision-making.
The Appellant submitted that, from the deliberations of the Respondent as evidence from the Minutes and correspondence made available to the Court, it would seem that certain members of the Board lacked the in-depth knowledge and appreciation of the subject matter.
The processing of tender documents for provisions of services in the broadcasting and telecommunications require some basic understanding and appreciation in these highly technical fields. There is always the danger that given the restrictive nature of the Major Tender Board’s membership, the decision making process may not be exposed to appropriate technical advise necessary. Under the circumstances, it is always advisable for the Board to Co-opt additional members who are able to assist it in reaching its decision in areas where additional technical expertise maybe required. This, the Board can as under Regulation 12(5).
In the end, this Court agrees that the Respondent had taken irrelevant considerations in making its decision of 25 November 2003, on PSB tenders. This ground succeeds.
4. Was there Improper Delegation by the Respondent
Under this ground the Applicant claims that the Respondent had failed to discharge its responsibilities as required under Instruction 53(9) quoted above, which requires the Respondent inter alia, to inform the successful tenderer of the price that had been accepted. Instead it, according to the Applicant, delegated this responsibility to the 2nd Interested Party.
In its letter to the Permanent Secretary for Information & Media Relations dated 27 November, 2003, the Secretary to the Respondent wrote:
“This is to advise that the Major Tenders Board in its meeting No. 16/2003 held on 25/11/2003 approved the above tender as follows:
1. PSB Fijian - Fiji Broadcasting Corporation Ltd.
2. PSB Hindi - Communications (Fiji) Ltd.
Price to be negotiated and total to be within your Budget of 1.3 million VIP.”
On the strict interpretations of Instruction 53(9) that states that all tenderers “shall” be informed of the name of the successful tenderer and also the price offered and accepted, it would seem that there is some valid ground for the Applicant’s arguments. First, the Respondent had already accepted the 1st Interested Party’s tender for the PSB Hindi for the price it offered namely, $438,750.00 VIP. Then it turned around and accepted the Applicant’s tender for PSB Fijian for $1.1m. Yet the Respondent, after accepting the two tenders directed the 2nd Respondent to contain the cost of both to a ceiling of $1.3m as budgeted. How was this to be done? Further negotiations, according to the letter of 27th November 2003, above.
In my view, the decision on the price of any tender remains the sole prerogative of the Respondent and no other. It is mandated under 53(9) to first decide on the price, amongst other things, before it “authorises the acceptance of any tender.” Its responsibility to negotiate further if necessary, to conform with certain Government requirement, in this case, financial constraint and a ceiling. Its failure to do so in this instance amounts to abdication of its responsibility. The Applicant’s submission is sustained.
There are in addition two arguments advanced by the Respondent in its defence, namely that the decisions it makes are not binding but subject to final Ministerial approval, and secondly that judicial reviews are not available in government commercial agreements.
First, on whether the Respondent’s decision is binding. Counsel for the Respondent argued that the Major Tenders Board is merely required to sift thorough and authorise the acceptance of a tender. It is then left to the appropriate Ministry or Department to enter into agreement with the successful tenderer. It is only after the agreement has been entered into, according to the Respondent, that the decision becomes final and legal obligation and duties arise. Until then, the Respondent’s decision is merely advisory.
The Major Tenders Board is established under regulation 12 of Finance (Supplies and Services) (General) Regulations. While its procedure is not prescribed and is left to regulate its own, regulation 12(8)(a) sets out its powers on tender as follows:
“(a) shall consider and may authorise the acceptance of any tender called by the Controller for the supply of goods and services, or the purchase of public stores where the price of those goods, services or stores specified in the tender, or in any other tender relating to the same goods, services or stores exceeds twenty-five thousand dollars;” (emphasis added)
It would appear from one’s plain reading of the above provision that the Respondent does not indeed have the final decision in the acceptance of a tender. This alongside the fact that contract is not entered until later, is the gist of the Respondent’s argument. However, the phrase “may authorise the acceptance of any tender” must be construed along and in harmony with the rest of the provisions of Regulation 12 creating and empowering the Respondent. For example, the Respondent has, in addition to the above, the power to reject outright any tender as set under regulation 12(10).
“(10) Where the Major Tenders Board is satisfied, after considering any tender, indent or order –
(a) that the tender is unreasonable or collusive; or
(b) that the indent or order is unjustifiable, it shall reject the tender or refuse the issue of the indent or order, as the case may be.” (emphasis added)
The Supplies and Services Instructions and Government Stores Instructions 1982, equally speak and refer to the “acceptance” of the successful tender by the Respondent. All of these point very clearly in my view, to the fact that the decision of the respondent has some air of finality in it. The fact that as is the case in this tender, that the agreement is yet to be signed by the successful tender and the 2nd Interested Party, does not make the decision of the Respondent any less binding. The reality given the ethics in good government of accountability and transparency, lends equal support to the argument that the Respondent’s authority to accept any tender amounts to a decision that is final and is therefore open to judicial review.
Finally, the Respondent argued that the scope of judicial review do not extend to Government’s commercial arrangements, where commercially sensitive and confidential matters are likely to be exposed. These are private law matters between the Government and the successful tenderer. There could very well be good grounds why the Court should not readily entertain applications for judicial review in such areas and involving such matters. The fact however remains that so long as there are bodies set up by statutes and performing public functions then the presumption is that the decisions of such bodies are susceptible to judicial review. This, together with the Court’s recent trend in extending judicial reviews to areas and activities that had not been subject to it in the past, with the overall objective of the need to control potential abuses of power, makes light of the Respondent’s argument. The direction of the trend is seen in R v. Panel on Takeovers and Mergers, ex p. Datafin plc [1986] EWCA Civ 8; [1987] QB 815, where the English Court of Appeal decided that an unincorporated association with no statutory, prerogative or common law powers, and did not owe its jurisdiction to any contractual source, was amenable in principle to judicial review. Quite apart from the new approaches to the definition of “public” taken by the Court, the Datafin case involved take-overs and mergers, which would certainly contain highly sensitive and confidential matters.
I do not agree with the Respondent’s argument, that the nature of the Respondent business does not lend itself to the process of judicial review. This Court believes that the very nature of the Respondent’s duties and responsibilities to the Government and to the public must make it amenable to judicial review.
In the final, the Court makes the following:
The temporary arrangements for the provision of public service broadcasting, to cover the interim period, the subject of my Order of 14 April 2004, is hereby extended until further orders.
Costs to the Applicant and the 1st Interested Party at $650 and $300 each respectively.
F. Jitoko
JUDGE
At Suva
13 January 2005
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