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[2017] ZAFSHC 110
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Mofokeng v MEC: Department of Education. Free State Government (6011/2010) [2017] ZAFSHC 110 (29 June 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 6011/2010
In
the matter between:
MOSIUOA
ERNEST
MOFOKENG
Plaintiff
and
MEC:
DEPARTMENTOF EDUCATION,
FREE
STATE
GOVERNMENT
Defendant
JUDGMENT
BY:
DAFFUE, J
HEARD
ON:
10, 11 and 13 NOVEMBER 2015
26
– 29 JULY 2016
14
NOVEMBER 2016
DELIVERED
ON:
29 JUNE 2017
I
INTRODUCTION
[1]
A taxi operator and the Department of Education, Free State Province
are at loggerheads. Litigation has been dragged out
over a
period of six years.
[2]
The central issue emanates from a three year fixed term contract
entered into between the taxi operator and the Department of
Education following a tender process and in terms whereof the taxi
operator had to transport learners from their homes in the district
of Petrusburg to the Inoseng Primary School in the town of
Petrusburg, which contract has been terminated by the Department
during
the first half of the second year.
II
THE
PARTIES
[3]
The plaintiff is Mr Mosiuoa Ernest Mofokeng, a taxi operator of
Bloemfontein to whom I shall refer hereinafter as the plaintiff.
He was represented by Adv CD Pienaar, duly instructed by Phatshoane
Henney attorneys of Bloemfontein.
[4]
The Member of the Executive Council of the Department of Education,
Free State Province has been cited as defendant in his official
capacity. I shall hereinafter refer to the Department as the
defendant. Adv Khoza SC assisted by Adv TL Manye appeared for
the
defendant on instructions of the State Attorney although Adv Khoza
did not take part in the latter part of the proceedings.
III
RELIEF
CLAIMED
[5]
It is plaintiff’s case that defendant repudiated the contract
entered with him in that (a) defendant failed to give reasonable
notice of termination and (b) there were no lawful grounds for
termination. The following relief is claimed in the particulars
of claim as amended:
“
1. An order
declaring that the Department’s purported termination of the
contract on or about 27 April 2009 was in breach
of the terms and
provisions of the contract and thus unlawful.
2. An order declaring
that the contract concluded between the parties on 28 September 2007
is still in force and binding upon the
parties.
3. Payment of the amount
of R953 436.00 as from 1 May 2009 until the date on which the
contract expires or the date on which
the contract is lawfully
terminated.
4. Payment of the amount
of R3000.80 per school day as from 1 May 2009 until the date on which
the contract expires or the date
on which the contract is lawfully
terminated.
5. Interest on the
aforesaid amounts calculated at 11.5%,
a tempore morae.
6. Alternative relief.
7. Costs of suit.”
[6]
There are also two alternative claims, the one being for payment of
the amount of R361 845,80 plus interest and costs on
the basis
that the plaintiff’s claim for specific performance is
unsuccessful. The second alternative claim in the
same amount
of R361 845,80 is claimed on the basis of the court’s
finding that plaintiff had elected to cancel the contract
as a result
of defendant’s repudiation and breach of the contract.
[7]
At the commencement of the proceedings and by agreement between the
parties I granted an order in terms whereof the issues were
separated
on the basis that the
quantum
of plaintiff’s claim stood
over for later adjudication, if required. All other disputes
between the parties were to
be dealt with and adjudicated during the
hearing. As mentioned the main and material issue central to
the dispute between
the parties is whether defendant lawfully
terminated the contract or whether its purported termination
constituted repudiation,
entitling plaintiff to specific performance
and/or damages.
IV
THE
DEFENDANT’S DEFENCE ON THE MERITS
[8]
Two special pleas were raised, but have not been proceeded with.
It is therefore not necessary for purpose of this judgment
to deal
with these special pleas. The first special plea, being in
respect of alleged non-compliance with the provisions
of Act 40 of
2002, was waived during the pre-trial conference on 5 November 2015,
whilst the second special plea to the effect
that the parties had to
resolve their dispute by mutual consultation or mediation was
eventually waived at the commencement of
the trial on 10 November
2015.
[9]
Defendant pleaded as follows in respect of the main claim:
“
3.2 ad 5.4 Save to
admit that the Defendant cancelled the contract the remaining
allegations in this paragraph are denied.
3.3 ad 5.5 The Defendant
notes the allegations in this paragraph, however the Defendant pleads
that the Plaintiff did not have the
right to enforce the contract so
lawfully terminated.
…
3.6 The Defendant pleads
fluctuation of the number of learners
and changes which
necessitated review of the contract such as
hostels housing
learners having been erected and developed
by the Defendant’s
department.
3.7 Further the Defendant
pleads that at all relevant time the Defendant reserved the
right
to terminate the contract in the circumstances where there was
fluctuation of the number of learners
and other factors which
necessitated the review and cancellation of the contract.
3.8 The Defendant pleads
that the termination of the contract was lawful.”
(emphasis
added)
[10]
Based on the allegations contained in the plea defendant also denied
that plaintiff was entitled to succeed with the first
or second
alternative claim and prayed for judgment in its favour with costs.
[11]
In response to a request for further particulars defendant elaborated
on the reasons for termination of the contract and provided
certain
answers. It admitted that the number of learners transported by
plaintiff fluctuated between 6 and 13 from the date
of conclusion of
the contract to the 30
th
of April 2009, but insisted that the contract was cancelled “
because
there were no learners for the plaintiff to transport.”
The
crux of the issues between the parties is therefore whether
defendant’s written letter of termination dated 27 April 2009
lawfully terminated the contract or whether the purported termination
constituted repudiation as no lawful grounds or reasons for
termination existed.
V
ISSUES
NOT IN DISPUTE
[12]
Ex facie
the pleadings the following issues are not in dispute:
12.1 During 2007
defendant invited tenders for the rendering of transport services to
primary school learners in Xhariep district
for and on its behalf.
12.2 Plaintiff duly
tendered and his bid was accepted, whereupon the parties entered into
a written contract on 28 September 2007.
12.3 Certain material
terms of the contract are recorded herein, to wit:
(a)
Plaintiff would transport farm school learners on route 46 at a rate
of R18 per kilometre from their homes on farms in the district
of
Petrusburg to the Inoseng Primary School in Petrusburg and back on a
daily basis during the school term.
(b)
Defendant reserved the right to terminate the contract in certain
circumstances and for the purpose hereof the following paragraphs
of
the specifications for transport, being part and parcel of the
contract between the parties, read as follows:
“
27
.
Duration
of the contract:
The duration of the
contract is for three years on condition that all requirements of the
specifications are met. The offer
will be terminated if clause
31 is applied.
…
30. Fluctuation of the
number of learners and changes in contract conditions:
The allocated number of
schools and/or learners will not necessarily remain the same.
Other processes in the Department will
have an impact on this for
instance, the closing of schools, transfer of learners to hostels,
issuing of section 21 status and
other factors which may necessitate
the review of the contract. In case of any of these situations,
the Department reserves
the right to terminate the contract.
The Department of Education reserves the right to reshuffle transport
operators/bidders
as and when the need arises.
31. Variation order
In case the number of
kilometres changed due to migration, re-location and/or resettlement
of learners and closure of farm schools,
variation order will be
applied.”
12.4 The defendant’s
right to terminate the contract was subject to reasonable notice of
termination being given to plaintiff.
12.5 Plaintiff rendered
transport services in accordance with the contract from 9 January
2008 until 30 April 2009 and invoiced
defendant accordingly who
effected payment of plaintiff’s invoices pertaining to the
aforesaid period. Defendant purported
to summarily terminate the
contract with immediate effect in a letter dated 23 December 2008.
After negotiations the letter
of termination was withdrawn on 21
January 2009.
12.6 In a letter dated 27
April 2009 the defendant notified plaintiff of the termination of his
contract with effect from 30 April
2009.
12.7 It is not in dispute
that plaintiff was willing and able to carry on with his contractual
obligations.
VI
SUMMARY
OF THE EVIDENCE LED DURING THE TRIAL
[13]
Plaintiff testified in his case and two witnesses testified on behalf
of defendant. However, bearing in mind the time
lapse of
between six and seven years from the negotiations prior to
termination of the contract and the leading of evidence, it
is quite
understandable that the memories of the witnesses faded. They
had to rely to a great extent on the documentation
discovered and
handed in as part of two bundles, exhibits “A” and “B”
respectively.
[14]
This matter can be seen as a test case. Several similar
contracts were concluded by defendant with other taxi operators
for
the transport of learners on numerous other routes in the Xhariep
district and it appears from defendant’s presentation
to taxi
operators that contracts in respect of forty one routes had been
cancelled. I have reason to believe that many other
taxi
operators eagerly await the outcome of the present proceedings.
[15]
Plaintiff testified that in compliance with contractual obligations
the driver of his taxi on a daily basis completed delivery
notes in
which the relevant date, route number, number of learners to be
transported and number indeed transported, time of arrival
and time
collected, were recorded. These documents were signed by the
school principal on a daily basis and handed to the
defendant on a
monthly basis. The delivery notes were used to substantiate
plaintiff’s claim for payment.
[16]
On 8 January 2009 taxi operators, including plaintiff, were called to
a meeting held by defendant’s officials.
They were then
informed of the first letter of termination with immediate effect
dated 23 December 2009. During the negotiations
following upon
the first purported letter of termination, taxi operators were
informed that defendant could not afford to continue
with the various
contracts as
“
the
Department is not having money”
.
After meeting Mr Lioma of defendant, plaintiff received a letter from
him dated 21 January 2009 in which it was recorded
that
“
the
contracts of the affected transport operators will continue to be
valid until the outcome of discussions with the affected transport
operators.”
[17]
During January 2009 to March 2009 further negotiations took place
between plaintiff and certain taxi operators, they having
formed a
steering committee on behalf of all taxi operators affected by the
defendant’s intention to terminate their contracts.
Notwithstanding meetings, defendant issued letters of termination
dated 27 April 2009 to taxi operators, including plaintiff, notifying
them of the termination of their contracts with effect from 30 April
2009. Plaintiff did not rely on the letter sent to him,
but a
letter sent to a colleague, Mr Pati, but it is not in contention that
the contents of the letters were the same. The
defendant
inter
alia
recorded herein that the learners
“
have
been identified to be accommodated into hostels”
and therefore his route
“
will
be terminated as per Learner Transport Clause quoted in item 2
above”.
[18]
During a presentation in the meeting of 2 February 2009 between
the parties Mr Motsoeneng referred taxi operators to
a spread sheet
on his laptop stipulating that plaintiff’s contract and those
of several other taxi operators had to be terminated
because they
transported less than eight learners. Other reasons were
advanced in respect of others. No document was
handed out to
them at any stage, although a print-out of this document now forms
part of the evidential material. However,
it is clear that
although plaintiff was contracted to transport six learners only, he
with the knowledge of officials of defendant
often transported as
many as thirteen learners. During April 2009, i.e. from the
start of the second term on 15 April 2009,
he transported nine
learners, save for the first two days when he transported seven and
eight learners respectively. Plaintiff
carried on transporting
learners during the first week in May 2009, i.e. after the contract
had been terminated by defendant, but
the school principal refused to
sign the particular delivery notes. It must be borne in mind
that although plaintiff’s
contract made provision for the
transport of six learners on the particular route, he often
transported up to thirteen learners.
The number never
fluctuated below six. According to him he was in a position to
proceed with the contract for the remainder
of the three year period
and was in fact prepared to continue.
[19]
During cross-examination plaintiff explained that the defendant’s
version that it had run out of money could not be true
insofar as the
learner transport project was approved by the National Government and
Provinces were requested to co-ordinate the
project within their
boundaries. According to him sufficient money would have been
set aside for the transport needs of the
learners.
[20]
Ms N W Ngogodo employed by defendant as a district co-ordinator for
the Xhariep district and Mr T S Motsoeneng testified on
behalf of the
defendant. They testified in general terms and were not
specific in respect of the reasons why plaintiff’s
contract was
cancelled. When Ms Ngogodo did offer a reason, her version was
contradicted by the objective facts and defendant’s
own
documentation. She incorrectly mentioned that there were no
learners to transport in April 2009. She also incorrectly
testified that plaintiff’s route had to be closed as the number
of learners decreased. Their memories really faded
and, were it
not for the documentation to which they were referred during the
evidence and a summary of events prepared by an unknown
official from
which Mr Motsoeneng testified, it would be virtually impossible to
present any meaningful evidence. Defendant
attempted to justify
its purported termination of the contract between the parties based
on the fluctuation of the number of learners
which according to
plaintiff was not applicable
in casu.
If these
witnesses’ evidence is considered together with the
documentation relied upon, being prepared for and on behalf of
the
defendant, e.g. the report of Ms Ngododo dated 19 December 2008, the
minutes of the Bid Adjudication Committee (“BAC”)
dated
19 December 2008 and the BAC’s letter to Mr Lioma dated 30
March 2009, the only inference to be drawn is that the defendant
embarked on a cost-cutting exercise and that termination of the
contracts of all taxi operators were considered in general terms
without considering reasons for termination of the individual
contracts. Therefore the emphasis in the defendant’s
pleadings was on a fluctuation of numbers of learners. Mr
Motsoeneng testified that the Head of Department of Education (“HOD”)
was the only person that had the authority to terminate the contracts
of taxi operators. The HOD was not involved in any
of the
negotiations between defendant’s officials and the steering
committee of the taxi operators.
VII
SOME
RELEVANT AUTHORITIES
[21]
The issues in dispute between parties should be defined in the
pleadings. These must be clarified with precision
and
certainty. A party should not be allowed to rely on certain
issues in his pleadings and then try to canvass others at
the trial.
However, pleadings are made for the court and not the other way
round. See:
Imprefed
(Pty) Ltd v National Transport Commission
1993
(3) SA 94
(AD) 107 C – 108 D, relying
inter
alia
on
Robinson
v Randfontein
Estates GM Co Ltd
1925 AD 173
at 198.
[22]
Lewis, JA, writing for the full court, emphasised that a court must
examine all the facts – in context – in order
to
determine what parties intended when they contracted with each
other. This must be done
“
whether
or not the words of the contract are ambiguous or lack clarity.
Words without context mean nothing.”
See:
Novartis
SA v Maphil Trading
2016
(1) SA 518
(SCA) at paras [24] - [31] and [28] in particular.
In the process of interpreting a commercial document the court should
in general favour a commercially sensible construction, or as Wallis,
JA put it in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) at para [18]:
“
A
sensible meaning is to be preferred to one that leads to insensible
or unbusinesslike results or undermines the apparent purpose
of the
document.”
[23]
A fixed term contract was entered into between the parties for a
period of three years. It was terminated mid-stream.
The
authorities are clear. None of the parties to a fixed term
contract has the right to terminate the contract before expiry
of the
fixed period, unless there is a specific provision permitting
termination on notice during the contractual period.
Notice of
cancellation of a fixed term contract before the expiry date is a
repudiation because it does not in itself constitute
a contractually
permissible act of termination. See:
Air
Traffic and Navigation Services v Esterhuizen
(668/2013)
[2014] ZASCA 138
(25 September 2014) at para [17], citing with
approval the
dicta
of
Cheadle, AJ in
Lottering
v Stellenbosch Municipality
12
BLLR 1306
at paras [14] and [20]. Although the authorities
quoted deal with employment contracts, there is to my mind no reason
why
the principle should not apply to other fixed term contracts as
well.
[24]
The common law right to enforce a fixed term contract was confirmed
in
Fedlife
Assurance Ltd v Wolfaardt
2002 (1) SA 49
(SCA)
at
para [13]. The court held at para [16] that employees (in
submission also other innocent parties in non-employment matters)
had
a right to be fully compensated for damages they can prove they have
suffered by reason of an unlawful premature termination
of their
fixed term contracts.
[25]
Mr Manye referred me to
Plaaskem
(Pty) Ltd v Nippon Africa Chemicals (Pty) Ltd
2014
(5) SA 287
(SCA)
.
The
facts are totally distinguishable. In
Plaaskem
a contract of unspecified duration was the subject of dispute. The
contract did not contain an express term dealing with its duration,
although there was no indication that the parties intended to be
bound in perpetuity. Hancke, AJA considered all relevant
authorities and concluded at para [26] that in such case the
surrounding circumstances had to be taken into account as well as
commercial efficacy in order to import a tacit term to the effect
that the contract would be terminable on reasonable notice.
In
casu
the
parties are
ad
idem
in
the pleadings that defendant had to give reasonable notice of
termination. Therefore the principle applied in
Plaaskem
may be
relevant eventually. It will be considered
infra.
[26]
Repudiation is discussed in detail in
Christie’s
The Law of Contract in South Africa,
6
th
ed, 538 and further. Where one party to a contract, without
lawful grounds, indicates a deliberate intention no longer to
be
bound to the contract, it is regarded as repudiation. The test
is objective. Subjective intent of the party that
does not
fulfil his contractual obligations is immaterial. The objective
conduct of such person needs to be established.
See also:
Nash
v Golden Dumps (Pty) Ltd
1985
(3) SA 1
(AD) at 22 D - H and
Metalmil
(Pty) Ltd v Aeci Explosives and Chemicals Ltd
[1994] ZASCA 96
;
1994 (3) SA 673
(AD) at 684 I – 685 G.
[27]
Defendant did not plead a compromise or waiver, but it is deemed
apposite to consider authorities in this regard in light of
the
cross-examination of plaintiff and the minutes of the meeting of 25
March 2009 to which I shall refer again
infra
.
The
onus
is on
the party relying on compromise or waiver. See:
Christie’s
The Law of Contract,
6
th
ed at 473 and
Hepner
v Roodepoort-Maraisburg Town Council
1962
(4) SA 772
(AD) at 778. The issue of consent to a court order
being granted and waiver in particular was recently considered in
Occupiers
of Erven 87 & 88 Berea v CF de Wet NO
[2017]
ZASCA 18
at paras [29] – [33] with reliance on the
dicta
in
Laws
v Rutherford
1924
AD 261
at 263. It must have been informed consent in order to
be valid and for the consent to be legally effective, it must have
been given freely and voluntarily with full awareness of the rights
being waived.
[28]
The Free State Provincial Government and its Department of Education
in particular is a defendant in these proceedings.
Accordingly,
it is apposite to remember that Government should set an example and
not become lawbreakers or being ignorant of the
rights of parties
with whom they have contractual relationships. I therefore
regard it appropriate to quote extensively from
Free
State Province v Terra Graphics
2016
[3] SA 130 (SCA) para [21]:
“
[21]
It is important that governmental institutions respect the rights of
those with whom it transacts. Government should be a scrupulous
role
model. In this regard the following part of a dictum of the
Constitutional Court in
Mohamed
and Another v President of the Republic of South Africa and Others
(Society for the Abolition of the Death Penalty in South
Africa and
Another Intervening)
2001
(3) SA 893
(CC)
(2001 (2) SACR 66
;
2001 (7) BCLR 685
;
[2001] ZACC 18)
is apposite
(para 68):
'South
Africa is a young democracy still finding its way to full
compliance with the values and ideals enshrined in the
Constitution.
It is therefore important that the State lead by
example. This principle cannot be put better than in the celebrated
words of Justice
Brandeis in
Olmstead et al v United States
:
"In
a government of laws, existence of the government will be imperiled
if it fails to observe the law scrupulously. . . .
Government
is the potent, omnipresent teacher. For good or for ill, it teaches
the whole people by its example. . . . If the government
becomes a
lawbreaker, it breeds contempt for the law; it invites every man to
become a law unto himself; it invites anarchy.
'The
warning was given in a distant era but remains as cogent as ever.
Indeed, for us in this country, it has a particular relevance:
we saw in the past what happens when the State bends the law to its
own ends . . . . The legitimacy of the constitutional order is
undermined rather than reinforced when the State acts unlawfully.'”
VIII
EVALUATION
OF THE EVIDENCE AND SUBMISSIONS OF THE PARTIES
[29]
Mr Pienaar submitted that the contract was not lawfully terminated
and that defendant repudiated the contract. He emphasised
that
insofar as a contract was entered into in terms whereof plaintiff had
to transport six learners, defendant could not rely
on clause 30 to
terminate on the basis that plaintiff transported less than eight
learners. There was no fluctuation of numbers
less than
contractually agreed upon. In fact, plaintiff was still
transporting nine learners – more than contractually
required -
during the second term. According to him it is clear that the
defendant did not consider the individual contracts,
but merely took
a general decision. Nothing changed relating to the factual
position in plaintiff’s case that warranted
termination in
terms of clause 30.
[30]
Mr Manye requested me to make the following findings:, i.e. (a) that
without doubt hostels were developed and/or renovated;
(b) according
to the minutes of the meeting of 25 March 2009 there was a general
agreement and the parties were
ad
idem
(plaintiff
included) that the contracts would be terminated, including
plaintiff’s contract in respect of route 46; (c) the
termination of the contracts was communicated to taxi operators a few
days later and thereby giving effect to the
consensus
reached
and (d) the notice of termination was thus lawful. He
emphasised that defendant considered the interests of learners
and
this was the over-riding factor in coming to its conclusions.
[31]
The reader will remember that plaintiff
inter
alia
sought an order declaring that the contract between the parties
entered into on 28 September 2007 which would run for a period
of
three years from January 2008 was still in force and binding upon the
parties. The matter took an extremely long time
to be heard as
indicated
supra
.
By the time I heard the evidence of Mr Mofokeng in 2015, the three
year period for which the contract was concluded, had
expired some
four years earlier. It is therefore not competent for me to
make an order in terms of prayer 2 of the particulars
of claim.
[32]
Prayers 3 and 4 relate to claims for payment of money from 1 May 2009
until expiry of the contract or such date on which it
is lawfully
terminated. These amounts are claimed on the supposition that
plaintiff was entitled to specific performance
and/or damages.
The fact of the matter is that it is impossible to order specific
performance due to the time lapse.
In any event the amounts
claimed are in essence nothing but damages which by agreement I do
not have to consider at this stage
of the proceedings insofar as the
issue of damages stands over for later adjudication if necessary.
The first and second
alternative claims also deal with damages and do
not have to be adjudicated at this stage.
[33]
The only issue to be considered is whether defendant repudiated the
contract as relied upon by plaintiff or whether it was
lawfully
terminated as alleged by defendant. The words in clause 30 must
be read in context and in the process of interpreting
the contract
the court should favour a commercially sensible construction, or put
otherwise, not a construction that will lead
to insensible or
unbusinesslike results or undermines the apparent purpose of the
document. See:
Novartis
and
Endumeni
supra.
[34]
The time that lapsed since the dispute arose at the end of 2008 and
beginning of 2009 caused tremendous difficulties for the
witnesses.
They cannot be blamed for memory losses. No doubt, plaintiff’s
memory was not as affected as that
of defendant’s witnesses.
This is also understandable as plaintiff experienced the events on a
personal level, whilst
defendant’s witnesses acted in the
course and scope of their employment and apparently had to deal with
other work-related
matters at the same time. The documentation
provided to the court in two bundles and handed in as exhibits “A”
and “B” respectively, provides a useful paper trail of
the events leading to the termination of plaintiff’s contract.
The witnesses were referred to particular documents contained in the
bundles throughout their testimony. Insofar as a witness
disagreed with the contents of some of the documents, I shall be at
pains to establish which version to accept. Fact of the matter
is
that the reasoning of defendant’s officials in coming to the
conclusion that plaintiff’s contract should be terminated
appears from the documentation and it is shown to be clearly
untenable and invalid.
[35]
I reiterate that based on a conspectus of all the evidence and the
manner in which the witnesses presented themselves in the
witness
box, plaintiff made a much more favourable impression on me than the
two witnesses of defendant. I am also satisfied
that the
defendant’s witnesses testified about reasons for termination
which contradicted the defendant’s version as
pleaded. I
shall explain in the next paragraphs. Suffice to mention at
this stage that, as plaintiff testified, it
was not a contractual
term that defendant could lawfully terminate the contract
“
if
the Department runs out of money.”
However,
if one scrutinises the defendant’s documentation relied upon,
this was one of the primary reasons to get rid of the
taxi operators
such as plaintiff. I quote from paragraph 4.7 of the minutes of
the meeting of 19 February 2009:
“
The
fact is that it is too costly to run this transport operation and it
is not practical.”
The
same sentiments are echoed in the letter of Mr Motsoeneng to the
chairperson of the BAC, the recommendation contained therein
being
recommended by Mr Lioma on 5 March 2009 and I quote from paragraph
6.1:
“
Learner
Support Directorate does not have funds to continue to meet
contractual obligations of the affected routes.”
Contrary thereto,
defendant did not rely on cash flow problems and/or insufficient
funds for termination of the contract in its
pleadings. It
would be illogical to do so as one would expect it to budget properly
for expenses to be incurred.
[36]
The following resolutions appear from the minutes of a special
meeting of the BAC dated 12 March 2009:
“
Funds
are not available to continue meeting contractual obligations of the
affected routes. No costing had been done to determine
the
cost-effectiveness of accommodating learners in hostels versus
transporting them between home and school. The Section
does not
seem to have a clear plan for resolving this matter before the
schools re-open in April 2009.”
The
BAC did not make any recommendations and referred the matter to the
HOD for directions. A letter to this effect was also
sent to Mr
Lioma on 30 March 2009, stating
inter
alia
that
no feedback was received from the HOD.
[37]
It appears from the minutes of the meeting of 25 March 2009 as if an
agreement was reached between the defendant’s officials
present
and members of a steering group representing affected taxi
operators. Paragraph 4.4 reads as follows:
“
Mr
Lioma indicated that letters will be sent to individuals whose
transport contracts will be terminated as agreed in the meeting.”
There
is no indication as to the terms on which termination would be
effected. The HOD was not part of the meeting and there
is no
evidence or even a suggestion that the steering group had a mandate
to enter into any agreements. Plaintiff testified
that this was
not the final meeting and that a further meeting took place at which
occasion the spread sheet referred to
supra
was
presented to the steering committee. Therefore he denied that
the minutes are a true reflection of the discussions on
25 March
2009. According to him Mr Lioma instructed Mr Motsoeneng at
this meeting to arrange a further meeting for him to
present them
with the costing that defendant had done on all affected routes.
There was indeed such a further meeting.
Plaintiff never
mentioned this further meeting in the founding affidavit of the
aborted review application. It is possible
that plaintiff is
mistaken as to precisely when the spread sheet was shown to them, but
I am prepared to accept his version that
no agreement was entered
into. Surely, if that was the case, it could be conditional
only as the steering committee had to
go back to the other taxi
operators to obtain a mandate. Compromise or waiver was not
proven. If an agreement was entered
into on 25 March 2009 as
defendant’s witnesses want us to believe, I would have expected
the immediate issuing of letters
of termination. Nothing
happened for more than a month.
[38]
On 23 September 2009 the HOD presented written reasons for
termination of plaintiff’s contract which document was filed
in
the review application launched by plaintiff which was aborted
later. He stated the following:
“
Department
invoked the provisions of clause 30 above by transferring the
learners to the hostels in order to promote an efficient,
economic
and effective use of the Government resources as contemplated in
section 195 of the Constitution of the Republic of South
Africa.”
[39]
I am satisfied that even if it was anticipated that the learners
transported by plaintiff would eventually have to be hosted
in a
hostel, defendant failed to produce evidence that this is what in
fact occurred. Plaintiff testified that he proceeded
to
transport learners after the April school holidays and even during
the first week of May 2009 (and after receiving notice of
termination
effectively from 30 April 2009). According to defendant’s
records the affected learners were to be hosted
in the hostel in
Jagersfontein. This is contrary to the documentary evidence –
the delivery notes for April –
and plaintiff’s direct
evidence, but also appears to be illogical insofar as the learners at
all relevant times attended
the Inoseng Primary School in
Petrusburg. Neither of the two witnesses of defendant could
shed any light in this regard.
Ms Ngododo, in particular, was
extremely vague and uncertain of herself.
[40]
Plaintiff was initially awarded a further contract to transport
learners on route 99. He testified that this contract
was
cancelled by mutual agreement during 2008, the reason being that the
particular school was to be closed down at the end of
the particular
term. According to his memory he was given three months’
notice of termination. Unlike in that
case, plaintiff did not
receive any reason for termination which applied to his contract in
particular. If defendant presented
plaintiff with a particular
and valid reason for termination within the ambit of clause 30, which
it failed to do, plaintiff would
have been entitled to reasonable
notice and in that regard the judgment in
Plaaskem
supra
might
have been considered.
In
casu
defendant
initially purported to terminate the contracts in December 2008 with
immediate effect and on 27 April 2009 it purported
to terminate the
contracts as on 30 April 2009, i.e. with three days’ notice if
it could be accepted that letters were hand-delivered
the same day
which was not the case.
[41]
Ms Ngogodo’s letter to the BAC chairperson dated 19 December
2008 to which I referred
supra
serves
as overwhelming evidence that a general approach was adopted with
costs savings as a prime target. It is unnecessary
to quote
extensively from the letter. The impression is created that
termination of the 41 contracts was a foregone conclusion,
subject to
approval from the BAC. It is in this letter that the criteria
used to terminate contracts were mentioned.
These were the
following:
“
4.1
Long routes which are costly to run; 4.2 routes with less than eight
learners and less; 4.3 all routes which are 16 km and less;
4.4
routes where learners have been identified to be transferred to
hostels; 4.5 routes with learners from the township who are
attending
school in farm schools.”
[42]
As mentioned, according
to the spread sheet referred to, route 46 fell in the second
category, insofar as it was alleged that plaintiff
transported less
than eight learners. The reason given in the spread sheet is in
direct conflict with the reasons advanced
by the HOD on 23 September
2009 as mentioned
supra.
Both
these reasons cannot be reconciled with the reasons advanced in the
pleadings, to wit a fluctuation of learners. I have
considered
Mr Manye’s able submissions, but am unable to find in
defendant’s favour as submitted.
[43]
No doubt, the defendant was within its right to terminate plaintiff’s
contract if circumstances arose as described in
clause 30.
However, this clause should not be interpreted to give a right to
termination if plaintiff still carried on transporting
at least six
learners as agreed to. Defendant could not unilaterally decide
to terminate the contract because plaintiff’s
contract provided
for transportation of six learners only. No fluctuation
occurred on the basis that less than six learners
were transported
and none of the factors mentioned in the clause are applicable.
The opposite is true as mentioned: plaintiff
transported more than
the six learners agreed upon even after the notice of termination was
issued. I am satisfied that defendant
could not rely on clause
30 in the circumstances and that its purported termination of the
fixed term contract is unlawful and
consequently I find that it
repudiated the contract. I referred to
Air
Traffic and Navigation Services supra
and
emphasise that termination during the contractual period is not an
inherent feature of fixed term contracts and therefore it
requires
specific stipulation. As mentioned in
Terra
Graphics supra
governmental
institutions must respect the rights of those with whom they
transact. If government becomes a lawbreaker, it
breeds
contempt for the law and anarchy will follow.
[44]
It is not possible to grant specific performance for the reasons set
out
supra.
Plaintiff is entitled to claim damages as a
result of defendant’s repudiation and the premature termination
of the fixed term
contract. The
quantum
of his
damages is to be proven in a later hearing or to be agreed upon.
IX
ORDERS
[45]
The following orders are issued:
(1) Defendant’s
purported termination on 27 April 2009 of the contract between the
parties was unlawful and a repudiation
of the contract.
(2) Plaintiff is
entitled to such damages still to be proved or agreed to between the
parties.
(3) Defendant is
liable for plaintiff’s costs of the action to date hereof.
____________
J.P.
DAFFUE, J
On
behalf of the plaintiff: Adv. CD Pienaar
Instructed
by:
Phatshoane
Henney Inc
BLOEMFONTEIN
On
behalf of the defendant: Adv. TL Manye
Instructed
by:
State
Attorney
BLOEMFONTEIN