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[2016] ZAGPJHC 146
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GL Events South Africa (Pty) Ltd v Sun International South Africa Limited (15259/2016) [2016] ZAGPJHC 146 (27 May 2016)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NO: 15259/2016
DATE: 27 MAY 2016
In the matter between:
GL EVENTS SOUTH AFRICA (PTY)
LTD
...........................................................................
Applicant
And
SUN INTERNATIONAL SOUTH AFRICA
LIMITED
.....................................................
Respondent
J U D G M E N T
KEIGHTLEY, J
:
[1] This case concerns the right to provide infrastructure services
for the 2016 Nedbank Golf Challenge (“the NGC”)
scheduled
to be held at the Gary Player Country Club, Sun City in November
2016.
[2] The applicant is GL Events South Africa (Pty) Ltd (“GLE”).
GLE asserts that it has the right to provide these
services in terms
of an existing agreement between it and the respondent, Sun
International (South Africa) Ltd (“SI”).
Further,
that SI has acted unlawfully, and in breach of this agreement, by
taking steps to grant the right to a third party.
[3] GLE seeks to enforce its agreement with SI. It prays for
the following relief:
[3.1] An order declaring that SI has appointed GLE as the supplier of
infrastructure services for the NGC held annually for the
period 2014
to 2016, and that such appointment remains of full force and effect.
[3.2] An order directing SI with immediate effect to take certain
designated steps for purposes of agreeing and finalising the
structural configuration for the 2016 NGC and implementing what is
called the zero base document for the tournament.
[4] The matter was brought by way of an urgent application. It
is clear from the notice of motion that GLE seeks mandatory
relief
based on the contractual remedy of specific performance.
[5] Urgency, or the lack thereof, was raised as an issue in the
supporting affidavits filed by the parties. However, by the
time the matter was heard, this was no longer a contested issue.
[6] The incident that directly precipitated the application occurred
on 18 March 2016 when SI published a closed tender request
for
proposals (“the RFP”) for the provision of infrastructure
services for the 2016 NGC. The RFP was sent to
GLE as well as
to third parties. SI’s right to do this was disputed by
GLE in light of what they contend is there existing
status as
appointed infrastructure service providers for 2016.
[7] GLE instituted its application when it became apparent that SI
intended to announce the award of the tender in terms of the
RFP on
19 May 2016. I pause to record that SI has given an undertaking
that it would delay the award of the tender until
judgment in this
matter is handed down.
[8] As regards GLE’s right to provide infrastructure services
for the NGC, it contends that it has a long-standing relationship
with SI dating back to 2002. Since then, it has provided the
infrastructure services for every annual NGC. Furthermore,
GLE
asserts that in 2014 SI awarded it the rights for the 2014, 2015 and
2016 specifically. This was initially done by way
of an oral
communication. However, in approximately September 2014, the
parties entered into a written agreement, known as
the
“Marquee-Production Facility Agreement” (the “marquee
agreement”). They recorded in this agreement
that GLE
would remain the supplier of infrastructure for the NGC for the
2014-2016 events.
[9] It is common cause that the marquee agreement dealt specifically
with the parties’ rights and obligations in respect
of two
marquees owned by GLE that were erected at Sun City, viz. a
double-decker marquee, and a production marquee. However,
there
are two aspects of the marquee agreement that render it relevant to
the broader dispute regarding GLE’s status as the
infrastructure services provider for 2016. These are:
[9.1] Clause 4.1, which provides that:
“
The parties wish to renew the Marquee and Production
facility agreement for a further period of 3 (three) years for 2014,
2015 and
2016, from signature hereof on the same terms and conditions
as contained in the agreement inclusive of the additional and / or
amended terms as cited herein. Note the renewal of any given
year will be directly subject and related to the renewal and
continuation of the Nedbank Golf Challenge Tournament year-on-year.
Should the tournament for what-so-ever reason not be
staged, this agreement shall become null-and-void
.
”
(emphasis added)
[9.2] Clause 4.3, which provides that:
“
For the avoidance of doubt,
(GLE) shall remain
the Infrastrucure supplier of the Nedbank Golf Challenge for the
2014. 2015 and 2016 events
. This shall be subject to
cost and quality approval of all products presented. The
costing shall remain the same on
a zero base model provided that the
obligations on (GLE) remain the same as in previous years
.”
(emphasis added)
[10] GLE contends that the terms of clause 4.3 are clear.
Although the marquee agreement did not deal generally with the
agreement between the parties that GLE would be the infrastructure
service provider, it specifically recorded this arrangement
in clause
4.3. This, says GLE, is binding on SI. SI has a
contractual obligation to honour its appointment of GLE as
the
infrastructure service provider for the 2016 NGC. It has acted
unlawfully in taking steps, through the RFP, to appoint
a different
infrastructure service provider in breach of GLE’s rights. GLE
is entitled to enforce its rights through the
remedy of specific
performance as detailed in the notice of motion.
[11] SI disputes that GLE is vested with the right to provide the
infrastructure services for the 2016 NGC. There is some
dispute
regarding the proper meaning and application of clauses 4.1 and 4.3
of the marquee agreement and whether it gives GLE the
right on which
it relies. However, the main thrust of SI’s case, as set
out in the answering affidavit, may be summarised
as follows:
[11.1]Up to and including 2015 the NGC operated on a very different
basis to that pertaining to the 2016 tournament.
[11.2]The NGC formed part of a South African series of golf events
known as the Sunshine Tour.
[11.3]In terms of an agreement between SI and Nedbank the latter was
the title sponsor of the NGC.
[11.4]In terms of the relationship existing between Nedbank and SI
under the pre-2016 NGC arrangement, SI ran the tournament in
the
capacity of a principal. This means that SI was the principal
contractor in respect of various aspects of the tournament,
including
infrastructure services.
[11.5]Nedbank’s contract as title sponsor of the NGC has now
run out. A new contract will have to be concluded with
Nedbank
if it wishes to continue being the title sponsor for 2016.
[11.6]This precipitated a series of negotiations between certain
interested parties, including Nedbank, SI and the European Tour
(“the
ET”).
[11.7]In 2015 the ET approached SI with a view to running a new golf
tournament in November 2016 as part of the ET’s year-long
“Race
to Dubai” series.
[11.8]This approach was on the basis that all of the rights in and to
the new tournament would be held by the ET, and not by SI.
[11.9]Thus, the title sponsorship agreement for 2016 would not be
between SI and Nedbank, but between the ET and Nedbank.
[11.10] In addition, SI would no longer act as the tournament
principal. Instead, the ET would be the tournament principal.
[11.11] It is envisaged that as part of the “Race to Dubai”,
the 2016 NGC will have an increased field of 72, rather
than 30
players. The qualification criteria will also be different.
The ET will procure the 72 players for the tournament.
[11.12] To fit in with the “Race to Dubai” programme, the
NGC will take place in the first part of November, rather
than the
first week in December as has previously been the case.
[11.13] The negotiations between SI, Nedbank and the ET are ongoing,
and no agreement has yet been concluded.
[11.14] However, SI contends that there is “every expectation”
that a new tournament will take place in 2016, with
Nedbank as the
title sponsor, and the ET as the principal, along the lines outlined
above.
[11.15] In light of this expectation, SI has been appointed “on
a handshake” by the ET to manage certain aspects, inter
alia,
the provision of infrastructure, for the 2016 NGC.
[11.16] SI’s role in this regard is subject to certain
limitations. These include new budgetary requirements.
[11.17] Further, all decisions SI intends making as regards the
provision of services has to be approved by the ET as principal.
To this end, a representative of the ET was part of the RFP process
of 18 March 2016. This was to enable the ET to benchmark
the
design, cost and quality of the infrastructure services proposed with
the ET’s international standards and expectations.
[11.18] On this basis, SI contends that the 2016 NGC is fundamentally
different to the “old” NGC held in the past.
[11.19] Accordingly, insofar as GLE relies on the marquee agreement
to establish its right to provide the infrastructure for the
2016
NGC, SI contends that the agreement is “null and void” in
terms of clause 4.1, cited above. In other words,
the
tournament envisaged in the marquee agreement is no longer being held
in 2016. Consequently, the terms of that agreement,
including
clause 4.3 regarding GLE’s right to provide the infrastructure
services is null and void.
[12] If GLE is unable to establish its right to provide the
infrastructure services for the 2016 NGC on the papers before me, it
will fall at the first hurdle of establishing its entitlement to the
relief it seeks.
[13] No doubt mindful of the onus it bears in application proceedings
in which final relief is sought, GLE is highly critical of
the stance
adopted by SI in its answering affidavit, and the version it puts
forward.
[14] GLE points out that SI’s response to GLE’s claim
that it holds the right to provide infrastructure was subject
to
constant shifting in the period leading up to the launch of the
application. First, SI denied that there was any agreement
between GLE and SI to this effect, then it called on SI to produce
documents to support its contention. When these were produced,
and shortly before the application was launched, SI’s attorneys
contended that the NGC would not be held in 2016. Finally,
in
its answering affidavit, SI avers that in all likelihood there will
be a 2016 tournament at Sun City, with Nedbank as the title
sponsor,
but that it will be a new look, and fundamentally different
tournament.
[15] GLE points to various press releases that have confirmed that
the NGC will be held at Sun City in November 2016, with Nedbank
as
the title sponsor. These same press releases refer to the
long-standing history of the tournament, with no indication
that
there is any fundamental change. Furthermore, GLE refers to the
fact that the RFP was issued by SI, not by the ET.
It
specifically stated that the purpose of the RFP was to “…
convey the requirements for
Sun International
”
(emphasis by the applicant) for the provision of infrastructure
services for the 2016 Nedbank Golf Challenge. GLE
also
highlights what it contends are contradictions in the answering
affidavit as to whether the NGC will proceed on the basis
averred by
SI, or whether this is still to be determined by way of agreements
yet to be concluded.
[16] It submits that the matrix of facts presented in the affidavits
reveals SI’s version to be untruthful, and self-contradictory.
Accordingly, GLE contends that I ought properly to disregard SI’s
version in accordance with the established exception to
the general
rule laid down in
Plascon-Evans Paints v Van Riebeeck Paints (Pty)
Ltd
.
[1]
In this case, submits GLE, the respondents version of the facts is so
far-fetched and untenable that it cannot prevail.
[17] GLE submits that the only justifiable conclusions to draw from
the evidence is that:
[17.1]the 2016 NGC will take place;
[17.2]SI has been appointed to manage the event; and
[17.3]GLE retains the right to act as the infrastructure service
provider.
[18] On this basis, GLE says that it has satisfied the onus of
establishing its right and SI’s breach thereof, and that it
is
entitled to the form of relief it has elected, viz. enforcement of
the agreement.
[19] On the view I take of the matter, it is not necessary for me to
decide whether or not GLE has established its right on the
papers
before me. Indeed, it may be unwise for me to attempt to reach
a final decision on this issue in circumstances where
the proceedings
are limited to affidavits, and where disputes of fact are
invevitable. I bear in mind, too, that the affidavits
on both
sides were prepared in haste, given the urgent nature of the
application. It may well be that in the fullness of
time this
issue will enjoy full ventilation by way of oral evidence and
cross-examination before another court. That court
would be
placed in a much better position to make a proper determination on
the nature and ambit of the legal relationship between
the parties
flowing from the agreement relied on by GLE.
[20] Accordingly, for purposes of this application I will assume,
without deciding, that GLE has established that it holds the
right to
provide infrastructure for the 2016 NGC.
[21] This is not the end of the matter, nor does it finally dispose
of the question of whether SI’s version of events should
prevail before me. Even on the assumption that GLE has
established its right and SI’s breach, it remains for me to
determine whether relief in the form of specific performance is
appropriate on the facts of this case.
[22] Where specific performance is concerned, the general principle
is that a plaintiff is always entitled to claim and be granted
this
form of relief if he or she makes out a proper case. However,
this entitlement is subject to the court retaining the
discretion to
determine whether specific performance ought to be awarded in a
particular case.
[2]
[23] The discretion must be judicially exercised. Although
certain situations are commonly cited as inviting the exercise
of the
discretion to refuse to grant specific performance, such as
impossibility of performance, undue hardship and the like, it
is not
confined to these situations. Nor is it circumscribed by rigid
rules. Each case must be judged on the basis
of its own
peculiarities.
[3]
[24] As a guiding principle, courts will be slow to subject a
defendant to the possibility of being held in contempt of a court
order in circumstances where the performance involved would be
difficult to enforce or insufficiently clear cut so as to render
it
unclear whether there had been performance or not in terms of the
order.
[4]
[25] The exercise of the discretion ought not to be regarded as a
mechanism through which a defendant may elect to pay damages
rather
than be required to make good his or her non-performance. The
onus rests on the defendant to satisfy the courts that
the
circumstances of the case are such that there are impediments to
specific performance.
[5]
[26] SI submits that such circumstances exist in the present case.
It points to the fundamentally changed role of SI in the
2016 NGC,
compared with previous years, as set out in the answering affidavit.
Critically, and as I have already indicated,
it is not envisaged that
SI will act as principal in managing the NGC. SI’s
version of the current state of play regarding
2016 is that the ET is
likely to be the principle, with SI being engaged to act on its
behalf and subject to its authority.
[27] If this version is accepted, there will be manifest difficulties
for SI in complying with an order of specific performance.
It
will be bound to give effect to an agreement entered into when it was
principal, in circumstances where, on its version, the
likelihood is
that it will no longer be the principle with authority to make its
own decisions. What will be the legal position
of SI if the ET
refuses to endorse the contract with GLE? Would SI be held to
be in contempt of the court order in these
circumstances?
[28] Furthermore, on SI’s version, the 2016 NGC will be a much
larger event, with more than double the previous field of
participants, and with different aesthetic and other requirements
laid down by the ET. If specific performance is ordered,
what
will the relative rights and obligations of the parties be, given
that GLE was not required previously to provide services
for a
tournament of this nature?
[29] These are some of the difficulties that may arise if an order of
specific performance is granted in this case.
[30] In short, the difficulty for GLE in terms of its prayer for
specific performance is that it presupposes that SI continues
to
enjoy the same rights, and that for all practical purposes the
tournament will proceed on the same basis, as in previous years.
[31] Faced with this difficulty, GLE submits that SI’s version
falls to be rejected on the basis that it is self-contradictory
and
untruthful. Further, that it rests on speculation in that, on
SI’s own version, final contracts with the ET and
Nedbank have
not been concluded.
[32] GLE points out that in the answering affidavit SI contradicts
itself by averring, in one paragraph that the ET “will
be”
the principal, whereas in another paragraph it states that no final
contracts have been concluded yet to this effect.
Reference is
also made to SI stating that it has been appointed to manage the 2016
NGC, and that the RFP was put out to give
effect to this.
[33] At face value it may be possible to identify contradictions in
the answering affidavit. However, whether or not SI’s
version should be rejected as being untenable must be determined on
the basis of giving consideration to the general tenor of that
version as gleaned from a reading of the document as a whole.
It is not helpful to try to make this determination on the
basis of
isolated comparisons between bits of one paragraph with bits of
another.
[34] Proceeding on this basis it seems to me that SI’s version
is clear: in short, it is currently in negotiations with the
ET and
Nedbank with a view to hosting the NGC in 2016, with the ET as the
principal and holder of all rights in the tournament.
While
these negotiations have not yet been finalised, they have advanced to
the point that SI feels confident about asserting that
in all
likelihood the tournament will proceed on the basis set out in its
answering affidavit. To this end, it has been unofficially
appointed (“on a handshake”) by the ET at this stage to
manage the tournament on the ET’s behalf.
[35] This version does not strike me as being
mala fide
or
untenable. GLE recognises the practical need to commence
preparations for the NGC well in advance of the event that is
scheduled to take place in November 2016. The event is a major
tournament, with international interest (even in the past).
From a commercial perspective I see nothing unreasonable or
suspicious in the fact that while the ET, Nedbank and SI are
negotiating
the final details of the envisaged contractual
relationship between them, the ET has by way of a “handshake”
agreement
requested SI to proceed with managing the preparations.
Without this, it is reasonable to expect that the preparations would
not be completed timeously. This also presents a practical
explanation for the RFP being put out in SI’s name in March
2016, based on the “handshake” informal arrangement in
place between SI and ET in the interim, pending the formalisation
and
finalisation of the relevant contracts.
[36] Significantly, GLE does not put up any facts to contradict the
averments made by SI regarding the current state of affairs
with the
2016 NGC. It points out that in terms of the marketing, the
tournament appears to be a continuation of the same
tournament held
in previous years. However, this does not go to the heart of
the matter, viz. whether the stakeholders in
the tournament will hold
the same rights and obligations they held previously. SI’s
contention that its rights and
those of the ET will not be the same
is not substantially or materially disputed by GLE. Nor, in my
view, is SI’s version
speculative. It states that it has
“every expectation” that the tournament will take place
on the basis set out.
Again, this is not materially
contradicted by GLE.
[37] Consequently, I am unable to agree with GLE that SI’s
version regarding the 2016 NGC is so untenable that it falls to
be
rejected. To do so I would have to dismiss SI’s version
as a fabrication. I cannot reasonably do so on what
I have
before me. Thus, I must base my decision on the version
presented by SI.
[38] For the reasons set out above, I find that SI has established
that impediments exist to its performance of the obligations
sought
to be enforced by GLE in the prevailing circumstances. In these
circumstances, it would be contrary to the interests
of justice to
grant an order of specific performance.
[39] This does not leave GLE without a remedy. For obvious
reasons, GLE did not include in its notice of motion an alternative
prayer for damages. As I indicated at the outset, the matter
came before me by way of an urgent application. It would
have
been wholly inappropriate to seek damages as an alternative form of
relief in those circumstances. I have made no determination
on
the question of whether GLE has established a right to provide
infrastructure services for the 2016 NGC, and a breach thereof
by
SI. It remains open to GLE to enforce its claim in this regard
by instituting appropriate proceedings.
[40] However, for the present, its urgent application for specific
performance must fail.
[41] I make the following order:
“The application is dismissed with costs”
R KEIGHTLEY
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Date Heard: 20 May 2016
Date of Judgment: 27 May
2016
Counsel for the
Applicants: Adv N Konstantinides SC
Adv D Williams
Instructed by: Marshall
Attorneys
Counsel for Respondent:
Adv T Massyn
Instructed by: Knowles Husain Lindsay Inc
[1]
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634A-I
[2]
Farmers’ Co-op Society (Reg) v Berry
1912 AD 343
at
350;
Thompson v Pullinger
(1894) 1 OR at 301
[3]
Haynes v Kingwilliamstown Municipality
1951 (2) SA 371
(A)
at 378G
[4]
Christie & Bradfield
Christie’s The Law of Contract in
South Africa
(6ed) pg 547
[5]
Christie, pg 54