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[2011] ZASCA 243
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TEB Properties CC v MEC, Department of Health and Social Development, North West (792/10) [2011] ZASCA 243; [2012] 1 All SA 479 (SCA) (1 December 2011)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 792/10
In the matter between:
TEB PROPERTIES CC
…...................................................................................
Appellant
and
THE MEC FOR DEPARTMENT
OF HEALTH & SOCIAL
DEVELOPMENT,
NORTH-WEST
…..............................................................
Respondent
Neutral citation
:
TEB Properties CC v The MEC, Department of Health and Social
Development, North West
(792/10)
[2011] ZASCA 243
(01 December 2011)
Coram:
LEWIS,
BOSIELO JJA and PETSE AJA
Heard
16 November
2011
Delivered:
01
December 2011
Summary:
Contract
– legality – whether contract concluded by acting head of
the Department of Health and Social Development in
breach of
prescribed tender procedures is valid – whether the decision of
acting head unsupported by rational reasons in
concluding such
contract is saved by Regulations 13.2 and 16A.6.4 of the Treasury
Regulations.
_______________________________________________________________________
ORDER
_____________________________________________________________________
On appeal from:
North-West High Court, Mafikeng
(Semenya AJ, sitting as court of first instance):
The appeal is dismissed
with costs which shall include the costs attendant upon the
employment of two counsel.
_______________________________________________________________________
JUDGMENT
_____________________________________________________________________
PETSE AJA (LEWIS and
BOSIELO JJA CONCURRING):
Introduction
[1] This appeal is
against the judgment of Semenya AJ sitting in the North West High
Court and is before us with his leave.
[2] It concerns the
validity of a lease agreement purportedly concluded in November 2008
between the appellant represented by its
managing member, Mr Tamsaqa
Emmanuel Bozwana (Bozwana), and the Department of Health and Social
Development (the department), represented
by its former acting head
Ms Kgasi (Kgasi) in respect of office accommodation. The lease was to
have commenced from 1 December
2009 and to terminate on 30 November
2014. The monthly rental was R3 241 800 excluding VAT.
[3] Before the respondent
took occupation of the leased premises Mr Malaka (Malaka), who had,
in the meantime, succeeded Kgasi as
acting head of the department
gave written notice to the appellant on 9 February 2010 –
through its attorneys – of
the department’s summary
termination of the purported lease agreement between the parties.
[4] In terminating the
lease Malaka offered three grounds of justification for doing so.
First, he relied on the basis that the
lease was irregular for want
of compliance with statutory prescripts. Second, he asserted that the
appellant ‘knowingly participated
in an irregular acquisition
of accommodation and/or office space’. Third, he claimed that
the appellant failed to ‘provide
any proof of his participation
in a public bidding [system] for the said office space’ nor
could it advance any cogent reasons
why the irregular lease should
not be terminated.
[5] Aggrieved at this
change of stance on the part of the department, the appellant
instituted legal proceedings on a semi-urgent
basis seeking an order
declaring the termination of the lease wrongful, and directing the
respondent to furnish it with the department’s
installation
requirements as contemplated in the lease and failing that, to pay
the agreed rental – limited at the time to
the office space
available for occupation – with effect from 1 December 2009.
[6] The respondent
opposed the appellant’s application on a number of grounds,
chief amongst which was that the lease agreement
sought to be
enforced by the appellant was invalid for want of compliance with
peremptory provisions of the Constitution, relevant
Acts
and Treasury Regulations.
It also filed a counter-application in which it sought an order
declaring the lease invalid for the same
reasons.
[7] In elaboration the
respondent contended that the department – to the knowledge of
the appellant – purported to enter
into a lease agreement
without first putting out the proposed lease to tender as is required
by s 217(1) of the Constitution, Public
Finance Management Act 1 of
1999 (PFMA), North West Tender Board Act 3 of 1994 and the Treasury
Regulations issued in terms of
PFMA and promulgated in Government
Notice No GNR225 in GG27388 of 15 March 2005. It was consequently
asserted that all these statutory
prescripts have a common objective,
which is to promote a ‘fair, equitable, transparent,
cost-effective and competitive’
process in the procurement of
goods or services from service providers.
[8] In the fullness of
time the matter came before Semenya AJ who upheld the respondent’s
contentions granting its counter-application
and consequently
dismissed the main application with costs.
Relevant statutory
matrix
[9] Before the facts in
this case are examined and the respective contentions of the parties
analysed, it is convenient to set out
the statutory matrix relevant
to the determination of the issues raised in this appeal.
[10] Section 217(1) of
the Constitution reads thus:
‘
When
an organ of state in the national, provincial or local sphere of
government, or any other institution 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
.’
[11] Section 4(1) of
North-West Tender Board Act, as far as is relevant, provides as
follows:
‘
Powers
of the board. – (1) The board shall have power to procure
supplies and services for the Government and, subject to
the
provisions of any other Act of the Legislature of the North West, to
arrange the hiring or letting of anything or the acquisition
or
granting of any right for or on behalf of the Government and to
dispose of movable Government property, and may for that purpose
–
(a)
on behalf of the Government,
conclude an agreement with a person within or outside the Province
for the furnishing of supplies and
services to the Government or for
the hiring or letting of anything or the acquisition or granting of
any right for or on behalf
of the Government property;
(b)
with a view to concluding an
agreement referred to in paragraph (a), in any manner it may deem
fit, invite offers and determine
the manner in which and the
conditions subject to which such offers shall be made;
(c)
inspect and test or cause to be
inspected and tested supplies and services which are offered or which
are or have been furnished
in terms of an agreement concluded under
this section, and anything offered for hire;
(d)
subject to the provisions of
section 6, accept or reject any offer for the conclusion of an
agreement referred to in paragraph (a);
(e)
on behalf of the Government,
resile from any agreement concluded under this section and, in
appropriate cases, claim damages;
.
. .
(h)
issue directives to departments
in regard to the procurement of supplies and services, the hiring or
letting of anything, the acquisition
or granting of any right, or the
disposal of movable property belonging to the Province in order to
achieve the objects of the
Act.’
[12] Section
38(1)(a)(iii) of PFMA provides that an accounting officer for a
department must ensure that the department has and
maintains ‘an
appropriate procurement or provisioning system which is fair,
equitable, transparent, competitive and cost-effective’
thus
echoing the provisions of s 217(1) of the Constitution.
[13] The Treasury
Regulations relevant for present purposes are regulations 13.2 and
16A6.4 which respectively provide as follows:
‘
Regulation
13.2 Lease transactions
13.2.1
For the purpose of this regulation, a lease is an agreement whereby
the lessor conveys to the lessee in return for a payment
or a series
of payments the right to use an asset for an agreed period of time.
13.2.2
A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership
of an
asset. Title may or may not eventually be transferred.
13.2.3
An operating lease is a lease other than a financial lease.
13.2.4
The accounting officer of an institution may, for the purposes of
conducting the institution’s business, enter into
lease
transactions
without
any limitations
provided
that such transactions are limited to operating lease transactions.
13.2.5
With the exception of agreements concluded in terms of Treasury
Regulation 16, the accounting officer of an institution may
not enter
into financial lease transactions.
Regulation
16 A 6.4
If
in a specific case it is impractical to invite competitive bids, the
accounting officer or accounting authority may procure the
required
goods or services by other means, provided that the reasons for
deviating from inviting competitive bids must be recorded
by the
accounting officer or accounting authority
.’
[14] In
Chief
Executive Officer, SA Social Security Agency
NO
& others v Cash
Paymaster Services
(Pty) Ltd
1
this court held that it is implicit in
the provisions of s 217(1) of the Constitution that a ‘system’
with the attributes
contemplated therein ‘has to be put in
place by means of legislation or other regulation. Once such a system
is in place
and the system complies with the constitutional demands
of section 217(1) the question whether any procurement is “valid”
must be answered with reference to the mentioned legislation or
regulation.’
[15] Thus the North-West
Tender Board Act 3 of 1994, Public Finance Management Act 1 of 1999
(PFM Act) and the Treasury Regulations
for departments, trading
entities, constitutional institutions and public entities issued in
terms of the PFM Act are clear examples
of legislation contemplated
in s 217(1) of the Constitution.
[16] As to the import of
regulation 16 A6.4 this court in
Chief
Executive Officer, S A Security Agency
2
said the following:
‘
The
regulation permits an accounting officer or the chief executive
officer to deviate from a competitive process subject to conditions.
As mentioned it is not contended that a “system” may not
provide for such deviations. First, there must be rational
reasons
for the decision. That is a material requirement. Second, the reasons
have to be recorded. That is a formal requirement.
The basis for
these requirements is obvious. State organs are as far as finances
are concerned first of all accountable to the
National Treasury for
their actions. The provision of reasons in writing ensures
that
Treasury is informed of whatever considerations were taken into
account in choosing a particular source and of dispensing with
a
competitive procurement process. This enables Treasury to determine
whether there has been any financial misconduct and, if so,
to take
the necessary steps in terms of regulation.’ . . .
Factual background
[17] The material facts
relevant to the issues in this appeal are relatively straightforward
and not in serious dispute. During
June 2008 the department was
looking for new office accommodation for its head office personnel as
its existing lease agreement
was due to
expire at the end of
August 2008. The department, through Kgasi, approached Bozwana
and invited the latter to
submit a rental proposal – on behalf of the appellant –
to what Bozwana stated was a departmental
task team headed by Kgasi.
This, Bozwana duly did. After intense negotiations spanning some six
months and an exchange of correspondence
between the appellant and
the department, a lease agreement was ultimately concluded in August
2008 in terms of which the department
hired office accommodation from
the appellant comprising 21612 square metres for a period of nine
years and eleven months at a
monthly rental of R3 241 800 exclusive
of VAT.
[18] Bozwana further
stated that during negotiations the appellant was assured by none
other than Kgasi herself that the procedure
adopted in the conclusion
of the lease was above board and regular and that due to the urgency
of the matter – given that
the existing lease was on the verge
of expiring by effluxion of time in August 2008–it was not
practicable to procure the
office accommodation required through a
system of open tender as is otherwise required in terms of the
requisite legal prescripts.
[19] As alluded to above
the respondent contended that the lease was invalid for the
reasons set forth in para
4 of this judgment. Moreover the department contended that the
appellant entered into
the lease agreement ‘with its eyes open’ for it was, even
during negotiations, aware that the
department of Public Works,
despite approving the lease, had expressed a firm view that ‘a
lease agreement of this magnitude
is normally subjected to an open
tender process with a view of maximizing good value for the
government and ensuring economic and
effective service from the
market’.
[20] A reading of the
record reveals that a detailed exposition of the factual background
is therefore not necessary. This is so
because it is common cause
that the conclusion of the lease under consideration came about
without any reference to the tender
board or open bidding process as
enjoined by s 217(1) of the Constitution read with both s 38 of the
PFMA and s 4 of the North
West Tender Board Act. It is for this
reason, amongst others, that the respondent sought to avoid the
consequences of having concluded
the lease in the first instance.
[21] Whilst accepting
that the lease was concluded without any reference to an open bidding
process as required by the law the appellant
contended that it was
nonetheless not invalid, because it was not practicable to do so in
this instance: concluding that the contract
was urgent as
contemplated in the very legislative prescripts upon which the
respondent relied in voiding the lease. But the respondent’s
counter to this contention is that the lease agreement was concluded
in November 2008 and was to commence on 1 December 2009. The
time
lapse between the conclusion of the lease and its commencement was
intended to afford the appellant time to construct the
office
accommodation let by it to the respondent. Thus, so the respondent
contended, the matter was not urgent and did not justify
non-compliance with or waiver of the peremptory statutory prescripts.
Nor could lack of proper planning – so it was contended
–
constitute urgency as contemplated in the Treasury Regulations.
[22] In
Eastern
Cape Provincial Government & others v Contractprops 25 (Pty) Ltd
3
this court said that the statutory
prescripts such as the ones under consideration in this appeal in
terms of which organs of State
are obliged, in concluding agreements
for the supply of goods or services, to act openly and in accordance
with a system that is
fair, equitable, competitive and cost-effective
are aimed at ‘ensuring good governance in the field of
procurement policies
and procedures and the priority accorded to fair
dealing and equitable relationships among parties to provincial
contracts. It
is difficult to see any room for the co-existence of a
power residing in other entities or persons within the provincial
administration
to do, without any reference whatsoever to the tender
board, that which . . .
empowers the tender board
to do. That the tender board acts “on behalf of the province”
in arranging to hire premises
or in concluding a lease . . . disables
the province from acting autonomously in that regard’.
[23] In this court it was
argued on behalf of the appellant that in determining the validity or
otherwise of the lease under consideration,
a clear distinction ought
to be drawn between the nature of the powers conferred on Kgasi by,
on the one hand, Treasury Regulation
13.2.4 and, on the other hand,
Treasury Regulation 16A6.4. This is necessary, so went the argument,
because on a proper construction
Regulation 13.2.4 confers powers on
an accounting officer, such as Kgasi was at the relevant time, to
enter into lease transactions
without any limitations, provided that
such transactions are limited
to operating lease
transactions. On the other hand Regulation 16A6.4 authorizes
the accounting officer or
accounting authority, if in a specific case it is impractical, to
invite competitive bids to procure the
required goods or services by
other means, provided that the reasons for deviating from inviting
competitive bids are recorded.
[24] Thus with respect to
Regulation 16A6.4 Kgasi was at liberty to deviate from following the
bidding process only if to do so
was impractical, whereas Regulation
13.2.4
gave her a free hand
untrammeled by the requirement of a bidding process for as long as
the ‘exercise of [her] discretionary
powers was fair and in
accordance with the law and …. with the requirements of
empowing legislation’. In support of
its contentions in this
regard the appellant relied on
Bel
Porto School Governing Body & other
s
v Premier, Western Cape &
another
4
.
Whilst I have no qualms with the dictum of the Constitutional Court
(para 87) which affirms a trite principle upon which the appellant
pins its hope, I should, however, say that it does not offer any
authority that is tenable in the context of this appeal. Accordingly
the argument that Kgasi was not obliged to follow the bidding process
required in matters of procurement is unsustainable.
[25] This is particularly
so if it is borne in mind that the perceived conflict or
inconsistency between
regulation 13.2.4 and regulation 16A6.4 is more apparent than real.
If these regulations are read purposively
– as we are enjoined
by sound judicial authority to do – it becomes plain that the
intention of the framers of these
regulations was to distinguish
between two different situations, the one falling within the purview
of regulation 13.2.2 which
precludes an accounting officer of an
institution from entering into a finance lease, and regulation 13.2.4
in terms of which the
accounting officer of an institution is
empowered to enter into lease transactions without limitations. To
construe the words ‘without
limitations’ to mean that
regulation 13.2.4 gives the accounting officer carte blanche would
not only lead to an anomalous
result but also fly in the face of
peremptory statutory prescripts dictating otherwise.
[26]
Counsel for the appellant also called in aid the
decision of this court in
Oudekraal Estates
(Pty) Ltd v City of Cape Town & others
2004
(6) SA 222
(SCA)
paras 27 – 31 in
support of the proposition that the decision taken by Kgasi to hire
office accommodation from the appellant
amounts to administrative
action, and as such ought to be given effect until it has been set
aside, which the respondent did not
do. I do not think that the
appellant’s reliance on
Oudekraal
avails it in the context of this case. In my view, that
the respondent filed a counter-application in the court below to have
the
lease declared unenforceable, is a clear indication that it
sought to prevent the implementation of the administrative action
concerned
on the ground that it was unlawful. Thus the practical
effect of the declarator granted by the court below is that the
administrative
action preceding the conclusion of the lease was of no
force and effect. Accordingly it is, under those circumstances,
illogical
to speak of administrative action that is extant as though
the declarator issued in relation to the juridical act flowing from
the administration action concerned counts for nothing. In the
circumstances there is, to my mind, much to be said for the view
that
where an organ of state seeks to have a contract, concluded pursuant
to administrative action, declared invalid a declaration
of
invalidity must have the effect of nullifying the administrative
action that is the fons et origo of the contract concerned.
[27] However, the
appellant had a second arrow to its bow. It argued in the alternative
that s 217(1) of the
Constitution provides no more than that when organs of State contract
for goods or services
they must do so ‘in accordance with a system which is fair,
equitable, transparent, competitive and
cost-effective’ without
further providing in terms that ‘every procurement contract
must comply with these requirements’.
It was consequently
contended with reference to a number of judgments of the
Constitutional Court and this court which held that
s 217(1) of the
Interim Constitution – which was in identical terms to s 217(1)
of the Constitution, ‘. . . contains
no direct prescription
regarding legislative content. It merely imposes a minimum desiderata
for the system to be created. The
content of that system is bound
only by the stipulation that it be “fair, public and
competitive”. The rest is left
undefined. Both the legislative
framework and its detail are left to the national and provincial
legislatures’.
5
The same, it was similarly argued, is
the situation in relation to s 38(1)(a)(iii) of the PFMA which in
essence echoes the words
of s 217(1) of the Constitution.
Consequently Treasury Regulation 16A6 which contains a number of
general provisions was the system
contemplated in both s 217(1) of
the Constitution and s 38(1)(a) of the PFMA which, inter alia, allows
for the procurement of goods
or services by organs of State either by
way of a competitive bidding process or by way of quotations which
need not be competitive;
Regulations 16A6.2 and 16A6.3 set out the
requirements for a competitive bidding system for the procurement of
goods or services;
Regulation 16A6.4 permits of exceptions in
circumstances where it would be impractical to invite competitive
bids.
[28] It was accordingly
argued that regard being had to the fact that: (i) Kgasi was, as
the acting head of the
department, its accounting officer; and (ii) in that capacity, had
the authority to deviate from the bidding
process, it was not
incumbent upon the appellant to enquire as to whether internal
procedural requirements pertaining to procurement
of
goods or services without
any reference to a bidding process had been complied with by Kgasi.
For these propositions the appellant
relied on, inter alia, two
judgments of this court in
CEO,
SA Social Security Agency NO & others
6
and
City
of Tshwane Metropolitan Municipality v R P M Bricks (Pty) Ltd.
7
[29] This argument cannot
be sustained. In
CEO, SA
Social Security Agency
8
this court, in considering the import
of s 217(1) of the Constitution, said the following: (paras 15 and
17)
‘
Section
217 (1) of the Constitution prescribes the manner in which organs of
State should procure goods and services. In particular,
organs of
State must do so in accordance with a system which is fair,
equitable, transparent, competitive and cost effective. This
implies
that a “system” with these attributes has to be put in
place by means of legislation or other regulation. The
main object of
the PFM Act is to secure transparency, accountability, and sound
management of the revenue, expenditure, assets
and liabilities of the
institutions to which the Act applies. . . The PMF Act, read with the
Treasury, Regulations, is such legislation
. . .’
[30] When the head of a
department, as the accounting officer, deems it prudent to deviate
from the requirements of the bidding
system he would nonetheless
still be required to provide ‘rational reasons for that
decision’ as this is a material
requirement. The
rationale for this
requirement was described as ‘obvious’
in
Chief Executive Officer, SA Social Security Agency
NO
9
[31] Moreover the
appellant’s reliance on
City
of Tshwane Metropolitan Municipality
is,
in my view, misplaced for at least three reasons. First, the
requirements of s 217(1) of the Constitution read with the provisions
of s 38(1)(a)(iii) of PFMA and Regulation 16A6.4 are not of a formal
nature but are material. Second, the provisions of s 217(1)
are
peremptory as are the requirements of s 4 of the North West
Provincial Tender Board Act. Third the
mischief that these
statutory prescripts seek to prevent would be perpetuated and the
objective that they seek to promote would
be undermined ‘if
contracts were permitted to be concluded without reference to them
and without any resultant sanction of
invalidity.’
10
As to the provisions of s 4(1) of the
North West Tender Board Act, they make it plain that the exclusive
power to, inter alia, arrange
the hiring and letting of anything on
behalf of the Government vests in the Provincial Tender Board. It is
thus axiomatic, as this
court in fact
found in
Eastern
Cape Provincial Government & others
11
,
that ‘s 4(1) disables the province from acting autonomously in
that regard’.
The Turquand rule
[32] In
Niewoudt
& another NNO v Vrystaat Mielies (Edms) Bpk
2004
(3) SA 486
(SCA)
para 8, this court,
quoting
Lord Simmons in
Morns v Kanssen
[1946] AC
459
at 474 in the
course of considering
whether a contract signed on behalf of a Trust which had two trustees
was binding, despite that it had been
signed by one Trustee only
said, with respect to the modern formulation of the rule, that
‘[P]ersons contracting with a company
and dealing in good faith
may assume that acts within the constitution and powers have been
properly and duly performed, and are
not bound to inquire whether
acts of internal management have been regular.’ The gist of the
argument advanced by the appellant,
under the rubric of the Turquand
rule, is that logic dictated that the decision taken by Kgasi that it
was impractical for the
department to procure accommodation through a
bidding system was, an internal matter. Consequently, so went the
argument, the appellant
was in no position to evaluate it to
determine its rationality. For this proposition the appellant relied
on a number of judgments
of this court.
12
To my mind the concession made by the
appellant that the Turquand rule only operates in favour of third
parties who act in good
faith and does not avail a third party who
knew that the internal formalities had not been complied with, or was
put on inquiry
which he failed to make, is fatal to the appellant’s
argument on this score. I say this because in
Eastern
Cape Provincial Government & others
13
,
which concerned the
validity of two lease agreements of immovable property concluded
without any reference to the provincial tender
board – and thus
peremptory statutory prescripts – this court said the
following: ‘
This
is not a case in which “innocent” third parties are
involved. It is a case between the immediate parties to leases
which
one of them had no
power
in law to conclude and had been deprived of that power (if it ever
had it) in the public interest. The fact that respondent
was misled
into believing that the department had the power to conclude the
agreement is regrettable and its indignation at the
stance now taken
by the department is understandable. Unfortunately for it, those
considerations cannot alter the fact that leases
were concluded which
were
ultra
vires
the
powers of the department and they cannot be allowed to stand as if
they were
intra
vires
.’
[33] Although this dictum
was made in the context of the doctrine of estoppel there is no
reason in principle why it should not
apply with equal force to the
situation now under consideration, for even on the facts of this case
Kgasi, in concluding the impugned
lease with the appellant, and for
reasons that are neither cogent nor rational, breached peremptory
statutory prescripts which
are ‘designed to ensure a
transparent, cost-effective and competitive tendering process in the
public interest’. The
resultant lease is therefore invalid and
cannot be enforced.
14
Estoppel
[34] I turn now to deal
with the last of the appellant’s contentions that the lease is
valid. The foundation for this contention
is that the department –
through Kgasi – represented to the appellant by conduct and
otherwise that, inter alia, the
conclusion of a lease agreement
without reference to a bidding process was regular. And relying on
such representations the appellant
altered its position to its
prejudice in that it, inter alia, agreed to construct an office block
at great expense in the expectation
that it would be able to repay a
Bank loan extended to it for the construction of the offices.
[35] This argument cannot
be sustained. In dealing with a situation analogous to that raised in
this appeal Marais JA, in considering
the respondent’s reliance
on the doctrine of estoppel in
Eastern
Cape Provincial Government & others,
15
said the following:
‘
It
remains to consider an alternative contention advanced by counsel for
respondent: estoppel. There are formidable obstacles in
the way of a
successful invocation of estoppel. However, even if it be assumed in
favour of respondent that estoppel was pertinently
raised in the
papers (the matter came before the Court
a
quo
by
way of motion proceedings) and that all the necessary factual
requirements
for the doctrine to be applicable were canvassed, this is not a case
in which it can be allowed to operate. It is settled
law that a state
of affairs prohibited by law in the public interest cannot be
perpetuated by reliance upon the doctrine of estoppel.
(
See
Trust
Bank van Afrika Bpk v
Eksteen
1964
(3) SA 402
(A) at 411H – 412B. This is such a case. It was not
the tender board which conducted itself in a manner which led
respondent
to act to its detriment by concluding invalid leases of
property specially purchased and altered at considerable expense to
suit
the requirements of the department. It was the department. If
the leases are, in effect, “validated” by allowing
estoppel
to operate, the tender board will have been deprived of the
opportunity of exercising the powers conferred upon it in the
interests
of the taxpaying public at large. Here again the very
mischief which the Act was enacted to prevent would be perpetuated.
(Compare
Strydom
v Die Land-en Landboubank van Suid-Afrika
1972
(1) SA 801
(A) at 815E–F)’
(See also
City
of Tshwane Metropolitan Municipality
.)
16
The
counter-application
[36] As to the
respondent’s counter-application the appellant relied on a
number of
grounds for the
proposition that it should have been dismissed. I do not propose to
deal
with those grounds in
this judgment for in the light of what has been set out above, the
conclusion reached by the
court below cannot be faulted. It therefore follows that for all the
foregoing reasons the court below
rightly dismissed the main
application and correctly upheld the counter-application. In the
circumstances I am satisfied that the
appeal must fail.
Order
[37] The following order
is made:
The appeal is dismissed
with costs which shall include the costs attendant upon the
employment of two counsel.
____________________
X M Petse
Acting Judge of Appeal
APPEARANCES
APPELLANTS: J H F Pistor
SC
C J Zwiegelaar
Instructed by Nienaber &
Wissing Attorneys, Mafikeng
McIntyre & van der
Post, Bloemfontein
RESPONDENT: H Lever SC
S J Senatle
Instructed by The State
Attorney, Mafikeng and Bloemfontein
1
Chief
Executive Officer, SA Social Security Agency NO & others v Cash
Paymaster Services (Pty) Ltd
[2011] 3 All SA 23
(SCA) para 15.
2
Para
14.
3
Eastern
Cape Provincial Government v Contractprops 25 (Pty) Ltd
2001 (4)
SA 142
(SCA) paras 7-8.
4
Bel
Porto School Governing Body & others v Premier, Western Cape &
another
[2002] ZACC 2
;
2002 (3) SA 265
(CC) para 87.
5
Olitziki
Property Holdings v State Tender Board
2001 (3) SA 1247
(SCA)
para 23;
Steenkamp v Provincial Tender Board, Eastern Cape
2007 (3) SA 121(CC)
para 33;
City of Tshwane Metropolitan
Municipality v RPM Bricks
2008 (3) SA 1
(SCA) para 15.
6
Para
15.
7
Para
11.
8
Para
21.
9
Para
21.
10
Eastern
Cape Provincial Government & others v Contractprops 25 (Pty) Ltd
2001 (4) SA 142
(SCA) para 8;
Municipal Manager: Qaukeni Local
Municipality & another v F V General Trading CC
2010 (1) SA
356
(SCA) para 11.
11
Para 7.
11
12
The Mineworkers Union J J Prinsloo
1948 (3) SA 831
(A)
847;
National and Overseas Distributions Corporation v Potato
Board
1958 (2) SA 473
(A) 480;
Potchefstroom se Stadsraad v
Kotze
1960 (3) SA 616
(A) 623;
Grundling v Beyers
1967
(2) SA 131
(W) 139;
Strydom v Die Land-en-Landboubank van SA
1972 (1) SA 801
(A) 815
; Sanlam v Rainbow Diamonds
1982 (4)
SA 633
(C) 641.
13
Para 13.
12
13
14
Paras
11-12.
15
Paras
11 – 12.
16
Para
13.