Manong and Associates (Pty) Ltd v City of Cape Town and Another (457/09) [2010] ZASCA 169; 2011 (2) SA 90 (SCA) ; 2011 (5) BCLR 548 (SCA) ; [2011] 2 All SA 383 (SCA) (1 December 2010)

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[2010] ZASCA 169
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Manong and Associates (Pty) Ltd v City of Cape Town and Another (457/09) [2010] ZASCA 169; 2011 (2) SA 90 (SCA) ; 2011 (5) BCLR 548 (SCA) ; [2011] 2 All SA 383 (SCA) (1 December 2010)

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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 457/09
MANONG AND ASSOCIATES (PTY) LTD
.................................................................
Appellant
and
CITY
OF CAPE TOWN
...................................................................................
First
Respondent
FUTUREGROWTH
PROPERTY DEVELOPMENT
COMPANY
(PTY)
LTD
.............................................................................
Second
Respondent
______________________________________________________________
Neutral citation:
Manong v
City of Cape Town
(457/09)
[2010] ZASCA 169
1 December 2010)
CORAM:
Navsa, Cloete, Van Heerden and Mhlantla JJA and Ebrahim AJA
HEARD:
15 November 2010
DELIVERED:
1 December 2010
SUMMARY: Unfounded complaints in
Equality Court ─ formulation of complaints not in accordance
with the manner envisaged by
the
Promotion of Equality and Prevention
of Unfair Discrimination Act 4 of 2000
─ costs in matters
concerning the assertion of constitutional rights ─ manner in
which litigation conducted justifying
costs order against complainant
─ concerns expressed about irrelevant and outrageous statements
by complainant during course
of enquiry.
______________________________________________________________
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
Western Cape
Equality Court (Cape Town) (Moosa J sitting as court of first
instance).
1. The appellant’s appeals in
respect of its exclusion from the CBD project and the upholding by
the court below of the second
respondent’s plea of misjoinder
in relation to the Setsing project are dismissed with costs,
including the costs of two counsel.
2. The cross-appeal by the first
respondent in respect of the broader Khayelitsha enquiry is upheld
with costs, including the costs
of two counsel.
3. The cross-appeals by the first and
second respondents, in relation to the costs order in both cases, are
upheld with costs, including
the costs of two counsel.
4. The finding of the court below set
out in para 36 and the costs order contained in para 64 of the
judgment dated 12 November
2008 are set aside and substituted as
follows:
‘
1.
The applicant’s complaint that it was discriminated against in
general by the first respondent and its predecessor in the
allocation
of contracts in Khayelitsha is dismissed with costs, including the
costs of two counsel and such costs are to include
the costs reserved
on 18 August 2007.
2. The applicant is
ordered to pay the first and second respondents’ costs in
relation to the complaint concerning its exclusion
from the CBD
project, including the costs of two counsel and such costs are to
include the costs reserved on 18 August 2007, which
also encompass
the second respondent’s costs in relation to the Setsing
project.’
5. The appellant is ordered to pay the
respondents’ wasted costs occasioned by the postponement of the
appeal on 20 August
2010.
______________________________________________________________
JUDGMENT
______________________________________________________________
NAVSA and MHLANTLA JJA (CLOETE, VAN
HEERDEN JJA and EBRAHIM AJA concurring)
[1] This case implicates the right to
equality in the procurement of State related (municipal) contracts.
The Constitution guarantees
equality before the law and prohibits
unfair discrimination by the State and/or individuals directly or
indirectly on one or more
grounds, including race, gender, sex,
pregnancy, marital status, ethnic or social origin, colour, sexual
orientation, age, disability,
religion, conscience, belief, culture,
language and birth. Section 9(3) of the Constitution obliges the
State to enact national
legislation to prevent or prohibit unfair
discrimination. The Promotion of Equality and Prevention of Unfair
Discrimination Act
4 of 2000 (the Act), which came into operation on
16 June 2003, is an important statute to that effect. Its purpose is
to prevent
or prohibit unfair discrimination and to promote equality.
[2] The promotion of equality is a
noble goal and as we transform our society and meet the myriad
challenges associated with change
we should always act on a
principled basis. Where there are legitimate grievances based on
racial exclusion, we should deal with
them promptly and firmly.
Racism was the scourge of our nation and we should, where it is shown
to exist, resist it strenuously
and take all the necessary steps to
eliminate it from our midst. Courts, when faced with legitimate
complaints of racial exclusion
should not hesitate to show their
disapproval by means of appropriate orders. On the other hand, given
South Africa’s peculiar
history, racism is such a serious
charge that care should be taken to ensure that such a complaint is
well-founded. A contrived
charge is equally deserving of censure. In
this case we have to decide on which side of the dividing line the
appellant’s
complaint in the Equality Court falls. The evidence
and issues in this case demonstrate the complex challenges facing the
State
in its management and promotion of fundamental change in
society.
[3] The procurement of State-related
contracts for the acquisition of professional or other services,
whether by way of tender or
otherwise, has become a hotly contested
field with courts frequently being the battleground. Litigation has
included a range of
legal issues, including but not limited to
charges by unsuccessful service-providers of being victims of racial
discrimination
or bias. The question in the present appeal is whether
the complaint of racism brought by the appellant in the Equality
Court (Cape
Town) in relation to the procurement of municipal
contracts was warranted. The appeal is before us with the leave of
that court.
The two judgments of the court below which are the
subject of the present appeal and cross-appeal are reported as
Manong
and Associates (Pty) Ltd v City of Cape Town & others
2008
(2) SA 601
(C) and
Manong and Associates (Pty) Ltd v City Manager,
City of Cape Town, & others
2009 (1) SA 644
(EqC). The first
judgment deals with practice directions and preliminary points.
[4] The appellant, Manong and
Associates (Pty) Ltd, describes itself as a national company
specialising in civil, structural and
development engineering. The
engineering practice progressed from initially operating only in Cape
Town as a one person practice,
to operating as a close corporation,
and ultimately expanding its presence as a national company to Port
Elizabeth, Johannesburg,
East London and Mthatha. Notwithstanding its
national footprint the company has a fairly limited professional
staff complement
comprising four full time directors who are
qualified engineers, four professional associates and eleven
professional technical
staff.
[5] The driving force behind the
appellant is Mr Mongezi Stanley Manong (Manong), who is its
managing director and a professional
engineer. The complaint in the
court below leading up to the present appeals is the culmination of a
deep sense of injustice on
the part of Manong, which appears to have
developed over many years based on his perception of treatment meted
out to him by officialdom.
Unless the context otherwise requires, we
shall refer to the engineering practice headed by Manong in its
various forms over the
years as ‘the company’.
[6] The company’s complaint as
initially formulated in its founding affidavit was that it was
discriminated against by the
first respondent, the City of Cape Town
(CCT), and its predecessor, the City of Tygerberg (COT), by being
generally excluded from
municipal contracts in relation to
Khayelitsha and specifically in relation to a proposed retail
development in the Central Business
District (CBD) in that township.
The company alleged that the CCT and the COT implemented policies and
practices designed to exclude
and limit its access to municipal
projects. Interestingly, even though the COT and
the CCT were implicated in relation to
the CBD complaint no relief was claimed against the CCT. As regards
the CBD, the company
alleged that the second respondent, Futuregrowth
Property Development Company (Pty) Ltd (FG) discriminated against it
by excluding
it from that development. The company also complained
that FG had excluded it from the ‘Setsing project’ in the
Free
State and had again discriminated against it by doing so.
Manong’s founding affidavit comprised 92 paragraphs extending
to
30 pages. The characterisation of the complaint, outlined earlier
in this paragraph, is our best attempt at encapsulating what is
set
out by Manong in rather convoluted form. Manong’s method of
formulating a complaint is criticised later in this judgment.
[7] In the replying affidavit, after
being invited by the respondents to state the basis of the company’s
complaint more precisely,
Manong relied on the provisions of ss 7(c)
and (e) of the Act, which read as follows:
‘
Prohibition
of unfair discrimination on ground of race
Subject to section 6, no
person may unfairly discriminate against any person on the ground of
race, including-
(a) . . .
(b) . . .
(c) the exclusion of
persons of a particular race group under any rule or practice that
appears to be legitimate but which is actually
aimed at maintaining
exclusive control by a particular race group;
(d) . . .
(e) the denial of access
to opportunities, including access to services or contractual
opportunities for rendering services for
consideration, or failing to
take steps to reasonably accommodate the needs of such persons.’
[8] The factual
basis for the complaint was set out by Manong.
1
He blamed the
company’s exclusion from opportunities in Khayelitsha on
Mr Hendrik Barnard, employed by CCT as a civil
engineering
technologist. For the greater part of his career with the COT and
CCT, Barnard was involved with the allocation and
administration of
municipal contracts in Khayelitsha. According to Manong, the
antagonism between Barnard and the company arose
as a result of
Barnard’s contrived complaint concerning the quality of
services provided by the company to COT in relation
to a contract
involving the installation of a boardwalk leading to a platform with
a sea view at a site on Lookout Hill in Khayelitsha.
Barnard was
accused of being racist and of conspiring with others to ensure that
only white-controlled institutions received municipal
work.
[9] As the enquiry
progressed in the court below, the company’s case crystallised
as follows: Barnard, driven by racism, fabricated
and/or exaggerated
the complaint referred to in the preceding paragraph, and then, using
it as a reason, vowed never again to allocate
any municipal work in
Khayelitsha to the company. Barnard conspired with other like-minded
officials of the COT and CCT to achieve
that end. Accordingly, in
respect of the CBD project, Barnard conspired with other CCT
officials and with employees of FG to exclude
the company. This was
achieved through privatising the CBD project so as to have it
developed on a turnkey ‘design, develop
and deliver’
basis.
2
This enabled the
CCT to shift the blame for the company’s exclusion to FG. In
short, the company’s case was that the
CCT, in order to exclude
him from the CBD contract, decided to develop the CBD project on a
turnkey basis enabling the principal
contractor to appoint the
consulting engineers and others without having to comply with State
procurement requirements and that
this was done solely to exclude the
company.
[10] In the court below the company
sought an order against the CCT in terms of which the latter would be
prohibited from excluding
the company from procurement opportunities
in Khayelitsha and would be obliged to make such opportunities
available to it. The
company also sought an order in terms of which
the CCT would be required to compensate it for financial losses
sustained as a result
of being ‘deliberately marginalised . . .
in Khayelitsha’. Against FG, the company sought compensation in
the sum of
R1.74 m which it alleged was the financial loss it
suffered as a result of being unfairly excluded from the CBD project.
Additionally,
it sought compensation from FG in the sum of R240 000
which it claimed represented the loss it suffered as a result of
cancellation
by FG of a contract to be a consultant on the ‘Setsing
Project’ in the Free State. It is difficult to discern the
basis
on which this latter claim falls within the jurisdiction of the
Equality Court. Later, when we set out the background in greater

detail and evaluate the evidence, its lack of relevance will become
clear.
[11] Although stating early on in the
judgment that a complainant bears the onus to establish
discrimination on the basis of race,
the court below (Moosa J
sitting with two assessors), in evaluating the evidence presented
during the enquiry, at the outset,
adopted the wrong approach. It
held that the CCT was ‘burdened with the onus of showing on a
balance of probabilities that
the discrimination did not take place
or that the impugned conduct was not based on race or that the
discrimination was fair’.
The court below considered that the
thrust of the CCT’s case was that the discrimination did not
take place. It was on that
basis that the evidence was evaluated. As
we will show later, this inverts the approach that should be followed
when a case of
discrimination is adjudicated.
[12] In assessing
the evidence the court below took the view that the CCT’s
complaint in relation to the quality of work on
the first phase of
the Lookout Hill project had never been formally communicated to the
company and that it had in any event been
shown that such issues that
had arisen had been resolved at a meeting in February 2002. The court
below stated that Barnard gave
no reason for not appointing the
company to the second phase of the Lookout Hill project. Compounding
the erroneous approach referred
to in the preceding paragraph the
court below held it against the CCT that it had failed to conduct a
formal performance evaluation
on the work done by the company on the
first phase of the Lookout Hill project. A formal performance
evaluation is required by
the procurement policy adopted by the CCT
pursuant to the
Preferential Procurement Policy Framework Act 5 of
2000
─ but that only applied from September 2003, which was
after the first phase of the Lookout Hill project had been
completed.
3
The court below
took into account that the company received no further work in
Khayelitsha and concluded as follows:
‘
From
the objective facts the only reasonable inference we can draw is that
the complainant was excluded from the second phase of
the Lookout
Hill project on the basis of race and such exclusion continued on
subsequent appointments.’
[13] Having arrived at the conclusion
referred to in the preceding paragraph, the court below nevertheless
proceeded to consider
affirmative action measures adopted by the CCT
and its predecessor, the COT, in relation to Cape Town in general and
to Khayelitsha
in particular. It had regard to targets that were set
and the database of consultants which it is common cause had
shortcomings.
The court below took into account the reappointments of
consultants other than the company on Khayelitsha projects within
particular
timeframes and the CCT justification, namely, that they
had been reappointed because they had the exposure to the first phase
of
particular developments or that they had special expertise and
skills that were required on the second phase. This, according to
the
CCT, was done to retain expertise and to ensure continuity.
[14] The court below concluded that
such policies and practices as were resorted to by the CCT in the
allocation of municipal contracts,
although appearing to be
legitimate on the face of it, perpetuated unfair discrimination on
the basis of race and had the effect
of maintaining exclusive control
of such professional work in the hands of white professional
consultants (see para 30 of the judgment
of the court below). In
effect, the court below held that the company’s complaint of
being racially discriminated against
generally, in respect of the
allocation of work in Khayelitsha, was justified in respect of
ss 7(c) and (e) of the Act.
[15] In respect of the company’s
exclusion in relation to the CBD development, the court below had
regard to its progression
from inception to completion. It concluded
that although the processes followed by the CCT in initiating and
promoting the development
were suspect, from an administrative law
point of view, the conspiracy relied on by Manong referred to in
paras 8 and 9 above was
not proved and consequently held that the
complaint in terms of either of the sections of the Act referred to
above could not be
upheld.
[16] The effect of the court’s
findings was that the quantum of the compensation the company sought
against the CCT in relation
to its exclusion generally from municipal
projects in Khayelitsha based on the CCT’s racism stood over
for later adjudication.
[17] In the first judgment referred to
in para 3 above, the court below held that FG had no connection to or
involvement in the
Setsing project and that there had been a
misjoinder. The court had found that the company had made no attempt
to join the entities
to which the Setsing project was related, namely
Futuregrowth Asset Management (Pty) Ltd and Community Property
Company (Pty) Ltd.
The costs relating to that dispute was held over
for ‘later determination’.
[18] After disposing of the issues set
out above, the court below dealt with the question of costs. It took
the view that an equality
court should be careful to avoid deterring
bona fide litigants from asserting constitutional rights to equality
by making costs
orders against unsuccessful parties and consequently
made no order as to costs. That costs order appears to have
encompassed the
costs referred to at the end of the preceding
paragraph.
[19] The company appeals against the
finding of the court below in respect of its exclusion from the CBD
project. It also appeals
against the finding of misjoinder as set out
in para 17 above. The CCT cross-appeals against the conclusion by the
court below
that it had discriminated against the company on the
basis of race in the allocation of civil engineering contracts for
the area
of Khayelitsha generally. Furthermore, it appeals against
the finding that its practices and policies had been designed to
maintain
exclusive control by white professional consultants. The CCT
and FG appeal against the costs order in the court below, submitting

that although courts should be careful not to mulct parties who bona
fide seek to assert constitutional rights, this case was an
abuse and
was brought solely to promote the company’s commercial
interests. A further issue that we will deal with in due
course is
the costs of the postponement of the appeal on 20 August 2010, when
senior counsel representing the company suddenly
took ill and had to
be hospitalised.
[20] Thankfully, the following
questions are no longer in issue:
(a) whether entities such as the
company can be discriminated against on the ground of race;
(b) whether a Trust established by the
CCT and the company which it controlled are municipal entities and as
such are organs of
state;
(c) whether the Act has retrospective
effect.
In relation to the last question the
parties were agreed that the historical enquiry into racism was
relevant only to the extent
that it could be shown to have existed in
the first place and to have continued to periods after the
commencement of the Act.
[21] The assessment by the court below
of the evidence adduced was terse and it made no credibility
findings. The proceedings in
the court below endured over a period of
more than three years. The record extended over 34 volumes comprising
more than 3000 pages.
A considerable part of the record contained
irrelevant material, an aspect to which we will revert later in this
judgment. The
court below ought to have conducted a more thorough,
comprehensive and accurate evaluation of the evidence. That exercise
is one
we now embark on. We will also determine whether the reasoning
and the conclusions reached by the court below are correct.
[22] At the outset it is necessary to
record that when Manong testified, a persistent theme was that both
the CCT and the COT were
reluctant to appoint him over a period
spanning almost ten years. Throughout his testimony he sought to
emphasise that officials
partial to the apartheid regime and
presently in the employ of the CCT were intent on preserving the
privilege of white persons
and institutions, consequently denying him
the opportunity of procuring municipal contracts. We interpose to
state that Manong
produced irrelevant documentation and often made
speeches about the injustices of the past and on occasion made
outrageous statements,
thereby detracting from a proper enquiry and
protracting the proceedings. When it was put to Manong under
cross-examination that
his allegations about racial discrimination
were unsustainable because the parties who were appointed to a
particular project instead
of the company were black persons or
entities controlled by black persons, he invariably responded by
stating that he was principally
concerned to promote the company’s
interests.
[23] Another feature of Manong’s
testimony is that he often relied on allegations made by himself in
letters sent to various
individuals including the Presidency and
commercial and other entities as ‘proof’ of his
complaint. He also made references
to newspaper articles.
Furthermore, he repeatedly resorted to other hearsay evidence which
was never substantiated and was plainly
shown to be unreliable.
[24] Manong initially operated an
engineering practice under the style of a close corporation. It
started business operations in
1995. The appellant was formed in 2002
and took over the business formerly run by the close corporation.
When the close corporation
started its operations, Manong was the
only professional employed by it. Almost immediately after the close
corporation started
conducting business, it was appointed to a
municipal project by the CCT. The close corporation added to its
staff as it procured
more projects. It is undisputed that from 1996
to 2002 the close corporation and thereafter the company procured
municipal work
from the CCT in at least 15 projects, the total value
of which is approximately R137 m. From 2003 until the complaint in
the court
below the company procured ten more contracts to do
municipal work for the CCT. The total fees paid to it in respect of
the latter
contracts amounted to R1 523 221.27. To sum up, between
1996 until the beginning of 2005 the CCT awarded the company a total
of
25 projects outside of Khayelitsha. That equates to approximately
2.8 projects per annum.
[25] Before the COT was incorporated
as part of the CCT in 2000 it alone was responsible for awarding
municipal contracts in Khayelitsha,
which at that time fell under its
jurisdiction. It is common cause that Manong formally introduced
himself and the company to the
COT for the first time in 1997, by way
of a letter in which he extolled the company’s skills,
experience and virtues. Between
1998 and 2000 the company was awarded
two municipal contracts to do work in Khayelitsha. Those projects are
all relevant to Manong’s
perception of being unfairly
discriminated against and they deserve closer attention. They are as
follows:
(a) The Mew Way Sports project ─
the fee was R25 000.
(b) The Lookout Hill project phase 1 ─
the total value of the project was R1.5 m.
[26] In 1998, shortly after Manong had
introduced himself to the COT, Barnard himself thought it might be
worthwhile to award a
small project in Khayelitsha to the company to
see what it was capable of. That was how the company became involved
in the Mew
Way project, which is described hereafter. The COT
appointed the company to this project jointly with Wouter
Engelbrecht, an established
white-controlled engineering firm, which
had vast experience in sport facility development. Their brief was to
prepare a master-plan
for the development of sport facilities in
Khayelitsha. When he was cross-examined about being given this
opportunity Manong was
dismissive, suggesting that the Mew Way
project was awarded to set him up for failure, since the company had
no prior experience
in the development of sporting facilities. He was
especially disparaging concerning the total amount of fees which had
to be shared
equally with Wouter Engelbrecht, namely R50 000. He
was adamant that there was no empowerment potential of any kind in
this
project. We pause to state that counsel for the company rightly
found themselves unable to contend that the awarding of the project

was designed to ensure the company’s failure.
[27] Manong himself was contradictory
when he contended that on other projects where the company did not
have the necessary experience,
the CCT or its predecessor ought to
have considered pairing it with established entities which had
specialised skills and experience.
[28] From 2000 to 2005 only 12 new
projects were awarded to consultants in Khayelitsha by Barnard,
acting with a colleague, Mr Tertius
de Jager. Barnard’s
evidence that the clamour for work in Khayelitsha by a host of
consultants is far in excess of available
projects was not
contradicted. Of the 12 new projects, one was awarded in 2000 to the
company, namely, the first phase of the Lookout
Hill project.
[29] As stated above, the first phase
of the Lookout Hill project contemplated a boardwalk leading to a
platform with a sea view.
According to Manong, a key black employee
of the COT, acting on his behalf, to his knowledge falsely
represented to Barnard that
the company had done work on the project
on risk. Impressed by this, Barnard appointed the company as an
engineering consultant
on the first phase of the Lookout Hill
project. Barnard was thus instrumental in awarding the Mew Way
Project and the first phase
of Lookout Hill to the company.
[30] It is now necessary to look at
the problems that arose in relation to the first phase of the Lookout
Hill project. It is common
cause that the company was responsible for
the technical information to be provided to prospective tenderers on
the project. It
had to ensure that the information was such that a
person or entity wishing to tender for the construction of the
boardwalk could
draw up a bill of quantities so as to put a price to
a tender. It is common cause that the thickness of the slurry on
which the
boardwalk had to rest had not been provided in the
documents on which tenders had to be based. Furthermore, it is common
cause
that no provision had been made for handrail specifications
which also would have caused a difficulty in drawing up a bill of
quantities.
It is uncontested that the timber for the boardwalk that
was delivered to the site and accepted was not in accordance with
specification.
What is instructive in this regard is the initial
testimony of an important figure in the company, namely, Mr Lyndon
Davids, who
at the outset accepted that the company bore the overall
and ultimate responsibility for ensuring that the documents that went
out to tender were complete. He initially accepted responsibility on
behalf of the company for the failures referred to above. Later
he
retracted that evidence and both he and Manong attempted to shift the
blame to the landscape architect who had been employed
on the
project, namely, Mr Eamonn O’Rourke. That exercise proved
unconvincing, particularly if one has regard to the written

recommendation made by Barnard to the COT, which reads as follows:
‘
7.1
That Manong and Associates be appointed for the design-,tender- and
construction supervision stages of the first phase of the
civil
engineering works associated with the Look-out Hill Tourism Facility
in Khayelitsha.’
[31] It is clear from the relevant
documentation, including the fees charged by the company and the
manner of calculating those
fees, the testimony of Barnard and the
initial concessions by Davids that, as the consulting engineers, the
company bore the responsibility
to ensure that the document that went
out to prospective tenderers was accurate and complete. It also bore
responsibility for ensuring
that the timber and other materials
received on site were as specified in the relevant plans. It is
difficult to make sense of
Manong’s grievance that he had not
received a letter of appointment from Barnard in respect of the first
phase of Lookout
Hill. It appears that he was suggesting that this
failure is somehow connected to the conspiracy to undermine the
company and to
exclude it from further work in Khayelitsha. Barnard
testified that he could not recall whether a letter of appointment
was sent
to the company but stated that if that had not been done it
was purely an oversight and that there was no sinister motive behind

it. There is no other evidence from which it can be inferred or
concluded that Barnard was untruthful on this aspect.
[32] From the minutes of site meetings
and the evidence referred to in paras 30 and 31 it is palpably clear
that the concerns expressed
by Barnard, about the quality of the work
done by the company in respect of the first phase, were genuine and
justified. They certainly
were not contrived. The conclusion of the
court below that these concerns were never communicated to the
company is therefore incorrect.
[33] Manong complained that the
company was excluded from the second phase of the Lookout Hill
project because of Barnard’s
racism. It is necessary to
consider the facts. The boardwalk referred to above was to form part
of a tourist centre with a parking
area. The work beyond the
boardwalk comprised the second phase of the project. Before decisions
were finally made by the architect,
Dr Mlamli Magqwaka, about
the composition of his project team on the second phase of the
Lookout Hill project, including the
consulting engineer, he happened
to have an informal discussion with Barnard. The latter mentioned the
problems he had encountered
with the company on the first phase.
Magqwaka said that he knew Manong, had worked with him in the past
and was comfortable with
him. Barnard replied that it was up to
Magqwaka to make the final decision about whether to persevere with
Manong. Magqwaka’s
recollection of that conversation was hazy.
He did not contradict Barnard, save that he stated that the nature of
the opposition
was such that he thought it best not to endanger his
own reputation and appointed in the company’s stead an entity
called
Iliso Consulting, which was 67 per cent black-owned. Barnard
was not responsible for appointing the consulting engineer on the
second phase of the project.
[34] Given that the engineering
consultant appointed to the second phase of the Lookout Hill project
was black-controlled, the suggestion
that the motive for excluding
Manong was racist is ill-conceived. In any event, the final decision
to exclude the company appears
to have been made by Magqwaka. That
the first phase was completed within budget was fortuitous and
occurred despite the company’s
shortcomings. In a project with
a greater value and with greater dimensions the failures referred to
above could have had disastrous
financial consequences.
[35] A further complaint by the
company was that a number of consultants had been reappointed to
projects in Khayelitsha, thus denying
other consultants an
opportunity of doing work in Khayelitsha. It will be recalled that
the court below thought that this was a
significant factor indicating
racial bias.
[36] In dealing with the multifarious
and rambling nature of the company’s complaint of
discrimination extending over a number
of years, including a time
when the COT was still in existence and later after it had been
absorbed into the CCT, Barnard was compelled
to reconstruct records
of allocations of contracts in Khayelitsha because many officials had
left the department and relevant documents
could no longer be
located. When Barnard was cross-examined on the reasons for the
reappointment of certain consultants he stated
that generally the
reasons were to ensure continuity, to capitalise and build on the
consultant’s exposure to first phases
of particular projects
and to use the specialised skills of particular consultants. He could
not provide specific motivations for
each project on which there had
been a reappointment of contractors because contemporaneous notes
were not always available. It
is clear that a number of firms with a
majority black shareholding were also reappointed during particular
cycles.
[37] We turn to deal with the
affirmative action policies and practices of the COT and the CCT over
the relevant period. It is common
cause that one of the measures
adopted by the COT and CCT to promote transformation, was that a
minimum quota of 30 per cent of
municipal work was reserved for
allocation to historically disadvantaged individuals or entities.
Another measure was that the
companies to whom such work had to be
allocated were required to have a minimum 30 per cent shareholding by
previously disadvantaged
individuals. These measures were resorted to
in order to promote transformation. Section 217(1) and (2) of the
Constitution provide:
‘
(1)
When an organ of state in the national, provincial or local sphere of
government, or any other institution identified in national

legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,

competitive and cost-effective.
(2) Subsection (1) does
not prevent the organs of state or institutions referred to in that
subsection from implementing a procurement
policy providing for ─
(a)
categories
of preference in the allocation of contracts; and
(b)
the
protection or advancement of persons, or categories of persons,
disadvantaged by unfair discrimination.’
[38] The Broad
Based Black Economic
Empowerment Act 53 of 2003
, which came into
operation on 21 April 2004, established a legislative framework for
the promotion of Black Economic Empowerment.
It uses the expression
‘Black people’ as ‘a generic term which means
Africans, Coloureds and Indians’.
4
Manong laid great
store by the fact that the company is a hundred per cent
African-owned. He repeatedly emphasised that the company
was the only
engineering practice in the Western Cape which was a hundred per cent
African-owned. Manong and Magqwaka testified
about the difficulties
faced by black Africans to overcome obstacles and prejudices in the
Western Cape which historically was
‘a Coloured preference
area’. In this latter contention they cannot be faulted.
[39] Some government departments have
in the recent past adopted measures to prefer black Africans to other
segments of the black
population of South Africa in the allocation of
contracts. The parties were agreed that during the timeframe relevant
to the present
appeal that preference did not apply.
[40] Following the issue by the CCT of
a Procurement Policy Initiative dated September 2003, a database was
used in an attempt to
ensure a fair spread of contractual
opportunities. It is unchallenged that the database was ineffective.
This was due to it being
technically deficient. There is no
sustainable evidence that it was designed to favour anyone or
discriminate against any person
or entity. It is abundantly clear
that whilst the targets initially set by the COT and CCT might be
susceptible to the criticism
that they were not sufficiently
ambitious, the transformation thrust nevertheless gained momentum
over the years leading up to
the time when the complaint was lodged.
A greater percentage of the total value of the municipal work was
allocated to previously
disadvantaged individuals. The graph was
decidedly moving upwards and at an accelerated pace.
[41] Barnard testified with reference
to a schedule compiled in conjunction with counsel representing the
CCT that in 2002/2003
seventy-one per cent of projects in Khayelitsha
was awarded to firms comprising a black shareholding of more than 50
per cent.
For the year 2003/2004 eighty-nine per cent went to
black-controlled firms. In 2004/2005 seventy per cent was allocated
in this
way. In 2005/2006 seventy-five per cent was awarded to
black-controlled firms. Significantly, most of these appointments
were made
by Barnard.
[42] More importantly, the evidence of
Barnard, which did not enjoy sufficient attention in the court below,
was that the CCT did
not deal with Khayelitsha in isolation. In
attempting to ensure the fairest spread of work and employing the
measures referred
to earlier, the frequency and value of work
allocated to consultants were measured across the entire metropole.
As can be seen
from the allocation of work to the company from 1996
to the beginning of 2005 a total of 27 projects, including
Khayelitsha, was
awarded to the company. This approximates to 3
contracts per annum. The total value is considerably more than
R140 m. Not
only is this a hugely significant number of valuable
contracts but it also reflects that the company must have been
reappointed
in any given annual cycle.
[43] We now turn to deal with the
background to the CBD project. In 1999 the COT called for expressions
of interest in the development
of a CBD in Khayelitsha. A series of
consultations and interaction with interested parties and community
organisations followed.
This culminated in the conclusion of a
framework agreement, to which attendees subscribed. A provision in
this framework agreement,
whilst committing to fair and transparent
procurement procedures, nevertheless purported to grant the
signatories preference in
the procurement process. The company was
one such signatory.
[44] Having absorbed the COT in 2000,
the CCT accepted the broad principles contained in the framework
agreement but not all the
details. The land owned by the CCT and
earmarked for the CBD was sold to a Trust which the CCT had
established and controlled.
The Trust held 100 per cent of the shares
in KBD Management (Pty) Ltd which was the vehicle that would receive
the financing for
the project by way of a loan from a bank. KBD
Management (Pty) Ltd established KBD Retail (Pty) Ltd for the sole
purpose of developing
and constructing the CBD. KBD Retail in turn
appointed FG as project managers for the development and construction
of the CBD.
[45] Manong repeatedly stated, without
substantiation, that there had been keen interest shown by a number
of banks to finance the
project. The truth is that only one bank was
prepared to do so, namely Rand Merchant Bank (RMB). That bank
insisted that the building
contractor commissioned to construct the
CBD be one of the big four building contractors in South Africa and
that the project be
completed on a turnkey basis. This led to WBHO
(Pty) Ltd (WBHO) being appointed as the contractor. WBHO, because it
bore the risk
and the cost of development up until delivery of the
project, insisted, as is usual in turnkey projects, that it have a
free hand
in appointing consultants, including the engineers. This
was of course subject to transformation targets being met, namely,
that
at least 30 per cent of consultants be made up of previously
disadvantaged persons.
[46] Because of the
conditions set by RMB and WBHO, referred to in the preceding
paragraph, FG and the CCT effectively played no
further part in the
development of the CBD. However, the Trust that the CCT initially
controlled
5
would ensure, after
construction and after the loan was repaid, that the community of
Khayelitsha would reap the financial benefits
of the project.
[47] The engineering entity that was
appointed by WBHO to the CBD project, namely, Axis Consulting, was
black-owned, albeit by a
person who is coloured. It is preposterous
to suggest, as Manong does, that the arrangement involving RMB and
WBHO was designed
specifically to exclude him. It is a proposition
that merely has to be stated to be rejected. Regrettably, it took
almost five
years for this proposition to be finally rejected.
[48] Manong contended further that the
company had been appointed to the CBD project as the engineering
consultant by Mr Van
Der Vent, a director of FG, and that it had
subsequently been excluded by some form of racist conspiracy between
Barnard and Van
der Vent. According to Manong he had a legitimate
expectation that he would be part of the CBD project team. This,
however, was
not borne out by the evidence. When Van der Vent and
Barnard testified, they both denied that Van der Vent had in fact
appointed
the company to the CBD project and also that Van der Vent
had made a public announcement to that effect. The overwhelming
weight
of evidence is that RMB insisted on the turnkey arrangement
and that Van der Vent had no authority to appoint consultants.
Furthermore,
the main consultants that were appointed to the CBD
project were black. Magqwaka was the architect, Axis Consulting,
which was
black-owned, was the engineering consultant and the
electrical consultants were Johaardien and Associates, also a
black-controlled
entity. There is not a tittle of evidence to support
Manong’s allegations of a conspiracy of any sort to exclude the
company.
[49] The legal advice received by the
COT and CCT on how to deal with the disposal of the land on which the
CBD was to be developed,
and the privatisation of the project without
tender or other prescribed procedures being followed, does appear to
be suspect from
an administrative law point of view. However, it does
not follow that there was a racist motive for the development
proceeding
as it did. Put differently, the charge of racism appears
unfounded in relation to the manner in which the development
proceeded.
In order for the company to succeed in the court below
that charge had to be proved.
[50] Without condoning the CCT’s
apparent failure to follow proper tender or other prescribed
procedures for the disposal
of the land on which the CBD was to be
developed, the reality is that the development would probably never
have seen the light
of day had the measures referred to above not
been employed. The principle of legality in relation to the
establishment of the
Trust and the company that it controlled and the
manner in which the COT and the CCT were involved in the CBD project
prior to
the final agreement for its construction is not what the
court below was constrained to adjudicate upon. It was called upon to
decide whether a charge of racial discrimination was properly
brought.
[51] We now turn our attention briefly
to the Setsing project. In the first judgment of the court below
dealing with practice directions
and preliminary points, it held that
FG’s plea of misjoinder was well-founded. It accepted FG’s
assertion that it had
no connection to the Setsing project and
pointed out that the entities responsible for that project were
Futuregrowth Asset Management
(Pty) Ltd and Community Property
Company (Pty) Ltd. Before us the company adopted the view that, since
Van der Vent was a director
of all three companies, the court below
ought to have held that at material times he was representing FG.
That submission is somewhat
confusingly tied to a further contention
on behalf of the company, namely, that the court below ought to have
directed that the
two companies responsible for the Setsing project
be joined in the proceedings.
[52] A careful examination of the
complaint and the evidence adduced by Manong reveal that his baseless
perception was that Van
der Vent had offered him an opportunity to be
a consultant on the Setsing project in the Free State as a trade-off
for ending his
crusade in relation to the CBD project. The total
value of the Setsing project was R12 m, two per cent of which would
have accrued
to the company as fees. According to Manong, this offer
was made to the company when he confronted Van der Vent, after he had
been
informed by Magqwaka that the company was not going to be part
of the CBD project team. After an acrimonious exchange of
correspondence
concerning the Setsing project, the relationship
between Manong and Van der Vent broke down and that put paid to any
further involvement
by the company in the Setsing project.
[53] In his testimony Van der Vent was
adamant that the Setsing project was unconnected to the CBD venture.
He was emphatic that
he had offered the project to the company in
line with his commitment to transformation and to making
opportunities available to
black consultants. He referred to his
track record in this regard. Even Manong conceded that Van der Vent
had an admirable transformation
record, but stated that he had become
disillusioned with Van der Vent after the company was excluded from
the CBD project. Manong
was unable to substantiate his allegations in
relation to the Setsing project. They amounted to nothing more than
(at best for
him) unfounded supposition.
[54] As stated early in this judgment,
the court below approached the evidence on the basis that it was for
the CCT to prove that
it had not discriminated against the company.
The burden of proof in cases of discrimination brought in the
Equality Court is dealt
with in s 13 of the Act. The relevant part of
s 13(1) provides:
‘
(1)
If the complainant makes out a
prima
facie
case
of discrimination─
(a)
the
respondent must prove, on the facts before the court, that the
discrimination did not take place as alleged; . . .’
‘
Discrimination’
is defined in s 1 of the Act as follows:
‘
[It]
means any act or omission, including a policy, law, rule, practice,
condition or situation which directly or indirectly─
(a)
imposes
burdens, obligations or disadvantage on; or
(b)
withholds benefits, opportunities or advantages from,
any person on one or more of the prohibited grounds.’
The prohibited ground of unfair
discrimination relied on by the company is race and as pointed out
above it relied specifically
on ss 7(c) and (e).
[55] In
Prinsloo v Van der Linde &
another
1997 (3) SA 1012
(CC) para 23, the Constitutional Court,
in dealing with the equality clause in the interim Constitution (s
8), said the following:
‘
The
idea of differentiation (to employ a neutral descriptive term) seems
to lie at the heart of equality jurisprudence in general
and of the s
8 right or rights in particular.’
In
Harksen v Lane NO & others
[1997] ZACC 12
;
1998 (1) SA 300
(CC) para 42 the following appears:
‘
Where
s 8 is invoked to attack a legislative provision or executive conduct
on the ground that it differentiates between people
or categories of
people in a manner that amounts to unequal treatment or unfair
discrimination, the first enquiry must be directed
to the question as
to whether the impugned provision does differentiate between people
or categories of people.’
[56] Thus, to even begin to get off
the ground the company must at the very least show that it was
treated differently to other
engineering consultants in relation to
COT or CCT projects. The company had to show that in the totality of
City projects, it received
disproportionately fewer contracts so in
relation to other consultants. Since the very premise of the
company’s case was
race it had to establish a prima facie case
that the differentiation was race-based.
[57] The litigation in the court below
was preceded by litigation in the Cape High Court in terms of which
the company sought an
interdict against CCT and FG in terms of which
they would be prohibited from continuing to construct the CBD in
Khayelitsha pending
the furnishing of information by them. Although
that litigation was withdrawn with the company tendering costs it is
clear that
Manong considered it a worthwhile exercise. According to
him he received ‘crucial information’ to assist him in
lodging
the complaint in the court below. It is clear from that
statement by Manong and the manner in which the enquiry was conducted
by
him, including the paucity of substantiating evidence, that he and
the company were on a fishing expedition, hoping somehow that
the
complaint would ultimately be proved. The following part of his
evidence shows that the complaint was contrived:
‘
I
just went in there with eyes closed, literally. But the papers that
came from the interdict gave me more hope that I’ve
got a case
here, that’s why I did not even continue to argue the case, I
said okay, let us pay the costs and start a new
fresh ─ a fresh
case, based on the answering affidavit of the interdict. In fact, in
the beginning of my founding papers
I said based on the information
that we received from the interdict papers, then we are doing this,
instituting this litigation.
Okay, so let’s just
take it one step at a time then. On your own evidence you took a shot
in the dark with the interdict application?
--- Absolutely.’
[58] As stated earlier, the court
below made no credibility findings. In our view, Barnard and Van der
Vent were credible and reliable
witnesses as were other material
witnesses who testified on behalf of the respondents. Manong was an
unsatisfactory witness. He
clearly made up his case as he went along.
He made scandalous allegations that he could not justify, he drew
conclusions that were
unwarranted and he was unable to provide any
concrete evidence supporting the company’s case. Insofar as
Davids’ evidence
was in conflict with Barnard’s,
particularly in relation to the latter’s concerns about the
quality of the company’s
work on the first phase of Lookout
Hill, Barnard’s evidence is to be preferred. The detailed
analysis of the evidence set
out above shows that the company’s
case did not get out of the starting stalls.
[59] It is clear that at the end of
the company’s case on the merits in the court below, it had
failed to establish a prima
facie case, either in respect of its
complaint of being discriminated against in general in relation to
work in Khayelitsha, or
in regard to its exclusion from the CBD
project. Its case consisted mostly of self-serving and
unsubstantiated statements by Manong.
The evidence he had indicated
that would be forthcoming in substantiation of his case did not
materialise. For example, he had
indicated that Magqwaka would
testify that Barnard had excluded him from the second phase of the
Lookout Hill project on the basis
of race. According to Manong,
Magqwaka had telephoned him and told him that Barnard had said that
for as long as he (Barnard) was
responsible for awarding work in
Khayelitsha the company ‘will never be appointed for any
project full stop’. Magqwaka
did not testify to that effect.
[60] Furthermore, in respect of its
complaint that it was discriminated against in general by the CCT in
respect of Khayelitsha,
the company failed to bring into account all
the projects that had been awarded to it across the metropole. Manong
was dismissive,
without justification, of the CCT’s claims that
projects in Khayelitsha were not considered in isolation and that the
fair
distribution of work to consultants was weighed citywide. In
deciding that the company suffered racial discrimination in respect

of the allocation of work in Khayelitsha generally, the court below
was clearly wrong.
[61] At the end of the company’s
case of general discrimination in respect of projects in Khayelitsha,
the CCT unsuccessfully
applied for absolution from the instance. It
ought to have succeeded.
[62] In our view, the court below was
correct in its conclusion on the company’s exclusion from the
CBD project. As demonstrated
above the exigencies of a successfully
funded development in Khayelitsha drove the turnkey arrangement. The
main consultants appointed
by WBHO in accordance with set Black
Economic Empowerment targets were all black. It is preposterous to
suggest, as Manong did,
that the final agreement which gave WBHO the
right to appoint consultants was a ploy to exclude him and was
racially motivated.
[63] Section 7(c) of the Act provides
that the impugned rule or practice, although appearing legitimate,
must be ‘aimed’
at maintaining exclusive control by a
particular race group. The targets set by the COT and the CCT were
intended to have the opposite
effect. They were not proved to have
been applied in a manner calculated to maintain exclusive control by
a particular race group.
Section 7(e) of the Act prohibits the denial
of access to opportunities to particular categories of persons. Under
this section
unfair discrimination may include the failure to take
steps to reasonably accommodate the needs of particular categories of
persons.
The company’s case, based on this section, was also
not established.
[64] In our view
the court below was undoubtedly correct in upholding the plea of
misjoinder of FG in relation to the Setsing project.
The court below
made that decision after being informed that FG had no connection to
the Setsing project. Counsel on behalf of
FG disclosed the identities
of the entities responsible for that project. It was contended before
us that because the litigation
occurred in the Equality Court there
was a duty on the court below to have had those entities joined in
the proceedings. We have
difficulty in understanding this
proposition. First, Manong made no complaint of racist conduct on the
part of those entities.
Second, his misconception that the Setsing
project was a trade-off, which was central to his complaint ─
such as it is ─
against FG, can hardly hold sway against these
other entities. Third, Manong is no ordinary lay litigant. He is
correctly described
by counsel for the respondents as a serial
litigant.
6
He has been quick
to resort to litigation when the company has a grievance against any
person or entity. When he was informed of
the identities of the
entities connected to the Setsing project, he had to choose whether
he could make a sustainable case against
them in the Equality Court.
It does not behove the company to lay the blame at the door of the
court below for not joining them.
Fourth, the relevant evidence in
relation to Setsing shows that it has no bearing on his complaint of
racism. This means that the
joinder he contends should have occurred
would have been pointless.
[65] Before turning
our attention finally to the question of costs, we briefly address
related issues of concern. As this court
observed in
Manong
& Associates (Pty) Ltd v Department of Roads and Transport,
Eastern Cape, & others
(No
2)
2009 (6) SA 589
(SCA) paras 53 and 57, the Equality Court was
established in order to provide easy access to justice to enable even
the most disadvantaged
individuals or communities to walk off the
street, as it were into the portals of the Equality Court to seek
speedy redress against
unfair discrimination through less formal
procedures.
7
[66] Section 20(2) of the Act provides
that a person wishing to institute proceedings in terms of or under
the Act must, in the
prescribed manner, notify the clerk of the
Equality Court of their intention to do so. Regulation 6 of the
Regulations governing
proceedings in the Equality Court provides for
a prescribed form to be completed in which the complaint is to be
formulated. It
is clear that a succinct statement of complaint is
required. In response, the person or entity against whom or which the
complaint
is lodged similarly has to complete a prescribed form in
which information in limited form is required. It also requires any
documentation
on which reliance is to be placed to be attached. This
is clearly intended to focus the minds of the parties and the court
leading
to expedition.
[67] As stated earlier, Manong,
instead of using the prescribed form, resorted to a rambling 30 page
exposition. If his annexures
are included his complaint took up a
total of almost 100 pages. It is therefore unsurprising that the
enquiry in the court below
extended over more than three years.
[68] Included in the documentation
presented to the court below was documentation relating to alleged
racism in the judiciary and
the church. Allegations implicating the
media and copies of court judgments were included. Before the hearing
of this appeal, this
court directed the parties to consider more
carefully which parts of the record it was necessary to read. A note
by the respondents
indicated that approximately 750 pages of record
that had been filed were unnecessary to read. These parts of the
record were filed
despite an agreement between the parties that they
were unnecessary. Before us counsel representing the company
apologised for
this and disavowed any involvement in how this had
occurred. By the time the record was filed the company was
represented by attorneys.
In
Manong
& Associates (Pty) Ltd v Department of Roads and Transport,
Eastern Cape & another (No 1)
2009
(6) SA 574
(SCA) para 44, this court commented unfavourably on the
unnecessary parts of the record filed by the company in that case. It
is
unacceptable that the same litigant conducts litigation in this
court repeatedly in this unsatisfactory manner.
[69] If litigation is to be conducted
in the Equality Court on this basis rather than in the intended
manner, the envisaged expedition
and easy access to justice will be
undone. A factor that may require legislative attention is whether
entities that are financially
able to litigate on a grand scale
should be able to use the machinery of the Equality Court to clog up
a system intended to benefit
particularly lay litigants and the
public at large.
[70] Of course, government must be
held to account and where the principle of legality or other
fundamental constitutional principles
have been breached by the
State, appropriate relief should be afforded to a complainant.
However, it does not follow that procedures
intended to benefit lay
litigants and to have legitimate complaints speedily adjudicated
should be allowed to be abused to the
extent that government is
unnecessarily tied up in extended litigation.
[71] During his testimony in the court
below and whilst he was conducting the company’s case, Manong
made a number of outrageous
and irrelevant statements deserving of
censure. At one stage, whilst being cross-examined by counsel for FG,
Manong testified that
black Africans will not deal with other
Africans ‘unless they get kickbacks’. He went on to say
‘they’ll
prefer Whites’. He stated that that was a
reason he had ‘cases’ in the Eastern Cape.
[72] At one stage in his
cross-examination of Barnard, Manong stated that in all the problems
he encountered concerning procurement,
the common denominator was
Afrikaans speakers. When Barnard testified about interacting with
certain individuals and offered up
names including those against whom
no charge of racism was levelled by Manong, the latter asked whether
that person was an Afrikaner,
suggesting collusion in the racist
conspiracy. This, not surprisingly, resulted in an objection by
counsel for the CCT that Manong
was resorting to racial stereotypes.
[73] Manong was not short on threats
either. When he was cross-examined by counsel for FG and was reminded
that the company had
received work from the COT on Lookout Hill and
was asked to confirm that fact, Manong’s response was:
‘
Don’t
involve yourself, otherwise I will join you and ask damages. . . ’
[74] Manong accused Van der Vent of
deliberately defacing an FG letterhead in a telefacsimile in which
Van der Vent informed him
that his services were no longer required
on the Setsing project. Manong surmised that this was calculated to
prevent the company
from ascertaining Futuregrowth Asset Management
(Pty) Ltd’s particulars and designed to enable FG to raise the
plea of non-joinder.
Manong labelled the ‘deliberate’
distortion a criminal offence in terms of the Companies Act. This
accusation is ridiculous.
That company appears to be well-known and
is registered in accordance with company legislation. Van der Vent
testified that the
distortion that obfuscates the names of directors
at the bottom of the letterhead was probably due to a problem
encountered in
the transmission of the telefacsimile. Since it had no
such distortions on the dispatching end it might even be due to
problems
at the receiving end. This unwarranted allegation of
criminal conduct against Van der Vent is not atypical.
[75] At one stage of his evidence,
Manong, consistent with his stance of making up his case as he went
along and in line with being
a conspiracy theorist, said, without any
prior warning, that he had information from State agencies, including
the office of the
Presidency, the National Intelligence Agency and
the Scorpions, a police investigative unit, that the company was
being specifically
targeted by government officials, including those
within the CCT and the Western Cape Provincial Government. When
counsel for the
CCT asked about the basis for this general
conspiracy, Manong’s response was that it was based on
correspondence that he
had written to these agencies. Questioned
further he stated that he had reports from the National Intelligence
Agency. The following
is a part of his evidence in this regard:
‘
These
reports, we got them from the National Intelligence Agency. Somebody
from the National Intelligence Agency said: “Look,
be careful.
Your company is specifically targeted by these individuals and State
organisations.” ‘
[76] On top of all of this is a
bizarre moment when Manong, interrupting his cross-examination of
Barnard, asked for a minute to
pay tribute to Dr Piet Koornhof, a
former Minister in the apartheid government. He had just heard of Dr
Koornhof’s death.
The following are extracts from the record on
this aspect:
‘
[L]ast
night I heard the sad news that Dr Piet Koornhof passed away I want
just for one minute to pay tribute to him how it also
affected my
life, just one minute I won’t take much of the Court’s
time. In 1971 Dr Piet Koornhof was the Minister
of Bantu Affairs and
Development. Now his Department was in charge of forced removals and
so on, now why I am mentioning this because
at that stage in fact
Africans were staying in the Karoo because I’m from Victoria
West, they started with Beaufort West
and Middelburg in the Cape,
they moved them to Thembaza. Now the Daily Despatch that was under
the editorship of Donald Woods at
that time . . .’
At that stage the court below
questioned the relevance of these statements. Unflustered, Manong
went on to say the following:
‘
No
it’s not relevant but about him, the good part of him, only to
say the good heart of Dr Koornhof in that process but if
the Court
feels I’m going to clutter the record . . .’
The court then put it to Manong that
he was saying that Dr Koornhof was a good man to which he replied:
‘
Yes
because when he was sent there to Thembaza and saw the situation he
literally cried and said this policy is inhuman.
. . .
After a week when he went
to Pretoria he was removed from the position. I am just saying that
was the type of person he was, although
he was serving that
Government but he had the human heart in him.’
[77] These statements and this kind of
conduct should not be tolerated in any court, least of all the
Equality Court. Even accepting
that the Act envisages a less formal
manner of conducting enquiries, this manner of leading evidence and
conducting a case is beyond
the pale.
[78] It is not lost on us that Manong
himself was not averse to being expedient. As pointed out above,
whilst ostensibly championing
fair and transparent procurement
procedures, Manong nevertheless sought to assert a dubious claim by
the company to preferential
treatment in terms of the framework
agreement relating to the CBD project. The same applies to Manong’s
assertion that he
was awarded the Elsies River depot project by
virtue of the ‘intervention’ of a black COT councillor.
In the same vein
he saw nothing wrong with engaging a key employee of
the COT fraudulently to misrepresent that he had done work on risk on
the
first phase of Lookout Hill in order to facilitate an appointment
to that project. Despite his assertion that he was championing
social
justice he was dismissive of socially meritorious projects such as
Mew Way because the financial rewards were small. Whilst
asserting
emphatically that the company is the only wholly-African owned
engineering practice in the Western Cape, Manong conveniently
chose
to ignore or downplay the prominent role in the company played by
Davids, a coloured person. It is common cause that on one
of the
biggest projects that the company undertook, namely, the Stanhope
Bridge Project in Claremont, Davids was the principal
actor on behalf
of the company. From Davids’ own evidence he was so busy seeing
to the company’s affairs that it took
him several more years
than usual to obtain his professional accreditation. This is yet
another example of double standards by
Manong.
[79] Manong, having had the experience
of that case and the others listed earlier in this judgment,
continues unabatedly to litigate
in shotgun fashion. He can no longer
elicit any sympathy or goodwill on the basis of being a lay litigant.
[80] Our comments in respect of the
merits in this case are not intended to minimise the problems facing
government in the Western
Cape. Deeply embedded prejudice is
difficult to overcome. It is clear that black Africans suffered
severe prejudice in the Western
Cape in the past. Much effort, time
and resources are required to overcome that disadvantage. We express
the hope that all role
players will do their utmost to undo the
ravages of the past and that everyone concerned will understand that
it is in the national
interest to be inclusive.
[81] It is now necessary to deal with
costs. Section 21(2)
(o)
of the Act provides:
‘
After
holding an inquiry, the court may make an appropriate order in the
circumstances, including an appropriate order of costs
against any
party to the proceedings.’
Thus, it is clear that in respect of
costs an equality court exercises its discretion in the light of all
the circumstances.
[82] It was submitted on behalf of the
company that an order by this court reversing the costs order by
Moosa J in respect of both
appeals would have a chilling effect on
future complaints that could legitimately be brought in the Equality
Court. It was submitted
that particularly where constitutional rights
were being asserted a court should be slow to order a litigant to pay
costs.
[83] In
Biowatch Trust v Registrar,
Genetic Resources
2009 (6) SA 232
(CC), the Constitutional Court
said the following (para 16):
‘
Equal
protection under the law requires that costs awards not be dependent
on whether the parties are acting in their own interests
or in the
public interest. Nor should they be determined by whether the parties
are financially well-endowed or, as in the case
of many NGO’s,
reliant on external funding. The primary consideration in
constitutional litigation must be the way in which
a costs order
would hinder or promote the advancement of constitutional justice.’
[84] At para 22 of
Biowatch
the Constitutional
Court referred to its earlier judgment in
Affordable
Medicines Trust & others v Minister of Health & others
[2005] ZACC 3
;
2006
(3) SA 247
(CC) which established the principle that ordinarily, if
the State loses, it should pay the costs of the other side and if the
government wins, each party should bear its own costs.
[85] At para 23 of
Biowatch
the court stated:
‘
If
there should be a genuine, non-frivolous challenge to the
constitutionality of a law or of State conduct, it is appropriate
that the State should bear the costs if the challenge is good, but if
it is not, then the losing non-State litigant should be shielded
from
the costs consequences of failure. In this way responsibility for
ensuring that the law and State conduct are constitutional
is placed
at the correct door.’
[86] However, in the paragraph that
follows the Constitutional Court qualified that statement and said
the following:
‘
If
an application is frivolous or vexatious, or in any other way
manifestly inappropriate, the applicant should not expect that
the
worthiness of its cause will immunise it against an adverse costs
award. Nevertheless, for the reasons given above, courts
should not
lightly turn their backs on the general approach of not awarding
costs against an unsuccessful litigant in proceedings
against the
State, where matters of genuine constitutional import arise.
Similarly, particularly powerful reasons must exist for
a court not
to award costs against the State in favour of a private litigant who
achieves substantial success in proceedings brought
against it.’
(Footnotes omitted.)
[87] In
Biowatch
,
the Constitutional Court warned that the mere labelling of litigation
as constitutional and the dragging in of specious references
to
sections of the Constitution would of course not be enough, in
itself, to invoke the general principle that ordinarily, if
government wins in a constitutional case, each party should bear its
own costs. It stated that the issues must be genuine and substantive

and truly raise constitutional considerations relevant to the
adjudication.
8
[88] In
Affordable Medicines
the Constitutional Court said the following at para 138:
‘
There
may be circumstances that justify departure from this rule such as
where the litigation is frivolous or vexatious. There may
be conduct
on the part of the litigant that deserves censure by the Court which
may influence the Court to order an unsuccessful
litigant to pay
costs. The ultimate goal is to do that which is just having regard to
the facts and circumstances of the case.’
[89] In
Weare v Ndebele NO
[2008] ZACC 20
;
2009
(1) SA 600
(CC) para 78, the Constitutional Court stated the
following:
‘
The
ordinary rule in the court is that where litigants unsuccessfully
raise important constitutional issues against the State, costs
will
not be awarded against them. There is an exception to this rule; this
is when the litigation is pursued for private commercial
gain.’
(Footnote omitted.)
There appears to be a tension between
that conclusion and what is set out in the first sentence of the
dictum referred to in para
83 above. In
Weare
, notwithstanding
the exception referred to in the dictum set out above, the
Constitutional Court did not order costs against the
losing litigant,
a business-man who had embarked on a commercial venture and where, no
doubt, the litigation was pursued for commercial
gain. In
Weare
,
the Premier of KwaZulu-Natal had no objection to each party paying
its own costs.
[90] Moosa J, in making the costs
order in the court below, considered the general principle referred
to in the judgments of the
Constitutional Court, cited in the
preceding paragraphs. The learned judge stated that the principle
could only be departed from
in ‘exceptional circumstances’.
He took into account in the company’s favour that it had done
some work on the
CBD project on risk and thought that it had a
legitimate expectation to be appointed. Against that, he reasoned
that because of
matters beyond the control of the CCT, the company
had lost out on that opportunity. In conclusion the court below said
the following:
‘
In
the light of these circumstances, the court is of the opinion that
equity and fairness demand that the court applies the spirit
and
ethos of the Equality legislation by making no order as to costs.’
[91] In the case dealing with practice
directives and preliminary points where FG’s plea of misjoinder
was upheld, the question
of costs was held over for ‘later
determination’. As we have said, it appears that the order
referred to at the end
of the preceding paragraph encompassed those
costs. We shall assume in the company’s favour that it did. If
it did not, this
court is entitled to make an appropriate costs order
itself.
[92] The discretion exercised by a
court in making a costs order is not a ‘broad’ discretion
or a ‘discretion
in the wide sense’ or a ‘discretion
loosely so called’, where a court of appeal is at liberty to
substitute its
decision for the decision of the court below simply
because it considers its conclusion more appropriate. The discretion
in relation
to costs is a discretion in the strict or narrow sense,
which is also described as a ‘strong’ or a ‘true’

discretion. In such a case, the power to interfere is limited to
cases in which it is found that the court vested with the discretion

did not exercise the discretion judicially, which can be done by
showing that the court of first instance exercised the power
conferred on it capriciously or upon a wrong principle, or did not
bring its unbiased judgment to bear on the question or did not
act
for substantial reasons. See
Naylor & another v Jansen
2007 (1) SA 16
(SCA) para 14.
[93] In
National Coalition for Gay
and Lesbian Equality & others v Minister of Home Affairs &
others
2000 (2) SA 1
(CC) para 11, the Constitutional Court, in
dealing with a similar kind of discretion in relation to a
postponement, said the following
about the powers of a court of
appeal:
‘
[I]t
may interfere only when it appears that the lower court had not
exercised its discretion judicially, or that it had been influenced

by wrong principles or a misdirection on the facts, or that it had
reached a decision which in the result could not reasonably
have been
made by a court properly directing itself to all the relevant facts
and principles.’ (Footnote omitted.)
[94] In the present case the court
below did not, as stated above, conduct an exhaustive analysis of the
evidence. It did not take
into account, as it was obliged to, that
the complaint was contrived and that Manong representing the company
made up its case
as he went along. The court below did not consider
the reprehensible manner in which the litigation was conducted.
Despite the
pretention that the complaint in the court below was
constitutionally founded, it was in fact purely mercenary. The
sympathy of
the court below expressed in respect of the CBD project
is in our view misplaced. It is thus clear that the court misdirected
itself
in this regard. Notwithstanding that the court found in the
company’s favour in respect of the complaint of general
discrimination
in respect of the allocation of work in Khayelitsha,
the court below did not follow the general rule that the State should
pay
the winning litigant’s costs. It is clear that the court
misdirected itself in all the respects listed above and that this

court is entitled to interfere with the order it made in respect of
costs. In our view, it would indeed be appropriate to set aside
the
costs order made by the court below and to hold the company liable
for the respondents’ costs, including the costs of
two counsel.
The same result should ensue in respect of the costs in this court.
[95] We now address the costs of the
postponement occasioned by the ill-health of the company’s
senior counsel hours before
the scheduled hearing of the appeal on 20
August 2010. The heads of argument had been drawn by junior counsel.
It is necessary
to record that on that day junior counsel
representing the company informed the court that the company insisted
that it be represented
by the senior counsel it had retained and his
instructions were that he should not present the company’s case
on his own.
In
Cape Law Society v Feldman
1979 (1) SA 930
(E),
the respondent was confined to hospital and too ill to attend the
hearing necessitating a postponement. In that case, there
was a
dispute concerning liability for the wasted costs. The court, in
dealing with the contention that the award of costs should
depend on
the outcome of the case on the merits, stated the following (at
934A-C):
‘
Because
of the enforced absence of the respondent this case has had to be
postponed
sine
die
.
To that substantial extent the respondent’s rights have been
safeguarded and to that extent he has benefited but to that
same
extent the applicant has been prejudiced. It would be manifestly
inequitable to prejudice the applicant further by placing
it in a
potentially vulnerable position of having to pay the costs of
postponement if it should lose the main case.’
[96] That approach should be followed.
The present is an
a fortiori
case, because a postponement of
the appeal was not inevitable. The company sought an indulgence,
which was granted. Its rights were
thereby safeguarded. In light of
the view we take in regard to costs generally in this matter, as set
out above, the company should
also pay the costs occasioned by the
postponement.
[97] The following order is made:
1. The appellant’s appeals in
respect of its exclusion from the CBD project and the upholding by
the court below of the second
respondent’s plea of misjoinder
in relation to the Setsing project are dismissed with costs,
including the costs of two counsel.
2. The cross-appeal by the first
respondent in respect of the broader Khayelitsha enquiry is upheld
with costs, including the costs
of two counsel.
3. The cross-appeals by the first and
second respondents, in relation to the costs order in both cases, are
upheld with costs, including
the costs of two counsel.
4. The finding of the court below set
out in para 36 and the costs order contained in para 64 of the
judgment dated 12 November
2008 are set aside and substituted as
follows:
‘
1.
The applicant’s complaint that it was discriminated against in
general by the first respondent and its predecessor in the
allocation
of contracts in Khayelitsha is dismissed with costs, including the
costs of two counsel and such costs are to include
the costs reserved
on 18 August 2007.
2. The applicant is
ordered to pay the first and second respondents’ costs in
relation to the complaint concerning its exclusion
from the CBD
project, including the costs of two counsel and such costs are to
include the costs reserved on 18 August 2007, which
also encompass
the second respondent’s costs in relation to the Setsing
project.’
5. The appellant is ordered to pay the
respondents’ wasted costs occasioned by the postponement of the
appeal on 20 August
2010.
_________________
M S NAVSA
JUDGE OF APPEAL
_________________
N Z MHLANTLA
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: M Madlanga SC
T
Masuku
Instructed
by
Nongogo
Nuku Inc, Cape Town
E
G Cooper Majiedt Inc, Bloemfontein
For
1
st
Respondent: I Jamie SC
R
Paschke
Instructed
by
Webber
Wentzel, Cape Town
Webbers, Bloemfontein
For
2
nd
Respondent: N Arendse SC
M
Janisch
Instructed
by
Cliffe
Dekker Hofmeyr Inc, Cape Town
Honey Attorneys, Bloemfontein
1
In
his replying affidavit under the heading ‘CAUSE OF ACTION’,
inter alia, the following appears:
’
40.
Advocate Jamie SC representing the first and third respondents
during the directions hearing of 06 March 2007 issued a practice

note directing the complainant to explain some issues that would
clarify its cause of action against the first respondent. The

complainant sets out its reply to the queries raised by the first
respondent.
40.1 The complainant in
its complaint of unfair discrimination against the first respondent
relies on its exclusion from the procurement
process in Khayelitsha
on direct discrimination against the complainant as witnessed by the
behaviour of Barnard in the Lookout
Hill project;
40.2 On the Khayelitsha
CBD project the complainant relies on both on an act and omission on
the part of the first respondent
as fully described under the
preliminary issues of this affidavit;
40.3
The policy of the first respondent of appointing consultants “HCB1”
found on page 166 of the record is deemed
to be imposing conditions
which are unfairly discriminating to the complainant.’
2
A
turnkey development is one where for an agreed sum the contractor
appointed undertakes to provide a fully operational facility
on an
agreed date. The contractor is accordingly at risk should the
deadline not be met or should there be any defects in the
design or
construction.
3
The
Preferential Procurement Policy Framework Act 5 of 2000
is
legislation contemplated by s 217(3) of the Constitution which
provides that national legislation must prescribe a procurement

policy that allows for categories of preference in the allocation of
contracts and the protection or advancement of persons previously

disadvantaged.
4
See
s 1 of the Act.
5
City
councillors, because of later regulatory legislation, were forced to
resign as trustees.
6
In
Manong & Associates v
Minister of Public Works
2010
(2) SA 167
(SCA) this court dismissed an appeal against a judgment
of the Equality Court (TPD) in terms of which an application by the
company
for an interim interdict preventing the Director-General and
the Minister of Public Works from implementing a Professional
Services
Supplier Register was rejected. The company had submitted
in the Equality Court that the abandonment by the Department of
Public
Works of a roster in favour of the register referred to above
would prejudice particularly African professional consultants. The

Department justified the departure on the basis that its policy to
promote transformation had to be in line with the
Public Finance
Management Act 1 of 1999
and the
Preferential Procurement Policy
Framework Act 5 of 2000
. The Department sought by way of the
register to expand the categories of formerly disadvantaged persons
who would benefit from
its transformation policy. In dismissing the
appeal this court stated (at para 1) that the application in the
Equality Court
was ‘somewhat ambitious’.
In
the two other judgments of this court involving the company referred
to elsewhere in this judgment the company succeeded on
procedural
aspects and the matter was referred back to the Equality Court for
adjudication. In one of the judgments, this court
commented
unfavourably on the extent of the record filed on behalf of the
company.
7
In
that case the company’s complaint was that it was unsuccessful
in a tender process on the basis of experience requirements
which
Manong contended discriminated against black engineers who
historically did not have an opportunity to develop experience.
In
the absence of directions by the court below, the enquiry did not
sufficiently explore whether a scoring and roster system
provided
sufficient opportunity for developing the required experience. In
that case this court referred the matter back to the
Equality Court
for further exploration. This court was sympathetic to the company
in that case on the basis that Manong who drove
the litigation was a
lay litigant and on the information before it took the view that the
Equality Court ought to have been of
greater assistance.
8
See
para 25.