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[2017] ZANCHC 25
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Z J Business Enterprise CC v Unitrans Passenger (Pty) Ltd t/a Mega Bus and Coach (267/14) [2017] ZANCHC 25 (13 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE
DIVISION,
KIMBERLEY
Case
numbe
r
:
267/14
Z
J BUSINESS ENTERPRISE
CC
APPLICANT
And
UNITRANS
PASSENGER (PTY) LTD
T/A
MEGA
BUS
&
COACH
RESPONDENT
Coram
:
Matlapeng
AJ
JUDGMENT
[
1
]
The
responden
t
,
Unitrans
Passenger (Pty) Ltd
,
entered
i
nto
a written agreement with the
Department
of
Transpor
t
,
Roads and Public
Work
s
,
Northern Cape for the provision of
transport
services
.
One of
the
conditions
of
this
agreement was
that
the
respondent should
empower
local entrepreneurs.
In pursuance
thereof
,
the
respondent
called for tenders
from
the
local entrepreneurs
to subcontract
with
it
for the provision of transport service on a particular route.
One of the conditions of this tender was that the successful bidder
should own a 65 seater bus.
[2]
The appl
i
cant
,
Z J
Business Enterprise CC, submitted
i
ts
bid and was awarded
the
tender
.
During
the
interview,
the
applicant
disclosed
to
the
adjudication panel that
it
did not have the bus as required by the
tender.
However, the respondent indicated that
it
was
willing to lease
a
bus to the
applicant,
presumably to enable the appl
i
cant
to comply with the requirement of the
tender.
[3]
Pursuant
hereto
,
the
parties
entered
into
a
written subcontracting agreement.
Clauses 2, 5
,
and 16 are relevant to the resolution of
this
dispute.
They provide as
follows:
2.
Contract
Period
This
agreement is valid for the duration of th
e
current contra
c
t
which
operates on
a
month to
month basis
.
5
.
Ticketing Machine/Two-Way
Radio
The
sub
-
contractor
will hire
from MBC
a
Mercedes
Benz
1624 OF
Bus
,
an
electronic
ticketing
machine
including
a
tw
o
-
way
r
a
dio
at
R25
000.00 per
month. This includes
the provision
of
normal
wear and tear maintenance but
excludes damage caused by abuse
.
16.
Cancellation
of Contract
This
agreement
is subject to cancellation
by
either
party
under
the
following circumstances
:
i)
If
the
subcontractor fails
to
comply
with
the
conditions
set
out
in book
1 and 2 of the contract
NV
/
C
/
0033
.
ii)
If MBC fails to reimburse the
subcontractor
for
services rendere
d
.
iii)
If any
actions by
the subcontractor
threaten
the cancellation
of
the contract.
iv)
If
the
subcontractor
fails
to
operate
the trips as set out in the
timetable
.
v)
If the subcontractor
submits false claims to MBC.
vi)
If
the
subcontractor
interferes
or
competes
with
the
service
s
rendered
by MBC in the Kuruman and
Surrounding area
.
vii)
Notice of such
cancellation
must be in
writing at
lease
14(fourteen) days in advance
(sic)
.
[4]
On
11
October
2013,
the
applicant
received
a
letter
from
the respondent in
which
the
respondent
cancelled
the
subcontracting
agreement. In
the
letter
the
respondent
states
that
the
since
the
commencement
of the agreement
,
the
appl
i
cant
has failed to comply w
i
th
the clauses of the agreement which include
s
:
(a)
Non-participation
in
the
day
to
day
running
of
your
operating route
.
(b)
Non- involvement in the
commuter transport industry.
(c)
No
intention of
purchasing your own vehicle
was
shown.
(d)
C
are
l
essness
and reckless manner in which your
driver operates
the
Mega
B
u
s
vehicles.
(e)
Not acting in terms
of the
sub
-
contractor
rules
as
per
the
Department of Transport (DOT).
Data
for the
preceding
three years was
attached
to the
l
etter
which
according
to
the
respondent
shows
that
the
appl
i
cant
was
in
a
position
to buy its own
bus.
I
n
the
l
etter
the
respondent
still
reiterates that
the appl
i
cant
has failed to buy
i
ts
own bus
.
[5]
On 13
N
ovember
2013, the respondent through its
attorneys informed
the app
l
icant
that
due to
its fai
l
ure
to acquire
a
bus of its own
,
it
was
given
until
31
January
2014
to
acquire
the
bus.
Furthermore,
the
applicant was
requested upon failure to comply with
the letter aforesaid to return the
leased bus to the
respondent.
[6]
On 01 February 2014 the respondent
took
its
bus
back.
On
25
February 2014 the
applicant
l
aunched
the current
proceedings
to
be
placed in
the
same position
i
t
was
in
previously
.
This
appl
i
cation
started
its
life in
the
urgent cour
t
.
As certain appl
i
cations
took
place
in the
intervening
period,
both
parties
are
agreed
that
because
of
the
effluxion of time
,
urgency
i
s
no
l
onger
an
i
ssue.
[7]
I
n these
proceedings, both the
appl
i
cant
and the respondent,
in their papers
refer
to
a
l
ease
agreement.
Howeve
r
,
during
argument,
the applicant
submitted
that
what
is at
issue
is the
subcontracting
agreement
i
n which
the
l
ease
of the bus
i
s
i
ncorporated.
On behalf of the
respondent,
it was
submitted
that the
subcontracting
agreement remains extant. What was
cancelled was the lease of the bus and the
two
i
ssues
should remain
separate.
[8]
The question to be decided in this matter is whether the parties
entered into two distinct agreements, namely the subcontracting
agreement and the lease of a bus incorporated in the subcontracting
agreement. The second question is whether the respondent has
lawfully
terminated the lease agreement.
[9]
In
order
to arrive
at
an
answer,
the
starting
point is
the
written
agreement.
To the extent that this may relate to
the
interpretation
of the
agreement,
the
general
rule
in
the
interpretation
of written
contracts is as follow
s
:
"Now
this Court has accepted the rule that when
a
contract has been reduced
to
writing
,
the
writing
is
,
in genera
l
,
regarded
as
the
exclusive memorial of
the
transaction and
in
a
suit
between the parties
no evidence
to
prove
its terms may be given save the
document
or
secondary
evidence
of
its content
s
,
nor
may
the
contents
of
such
document
be
contradicted,
altered
,
added
to
or
varied
by
parol evidence
".
Union
Government v
Vianini Ferro
Concrete Pipes (Pty) Ltd
1941 AD
43
t 47
.
This
is what is known as
the
parol evidence rule
.
[10]
Howeve
r
,
it appears that
over the years the parol evidence
rule has
undergone some modification
s
.
There is
a
notable shift from the strict
adherence
to the rule
.
This significant shift was heralded in
Johnston
v Leal 1980
(3)
SA 927 (A)
where
the Appellant
Division
enunciated
the
new
approach
as
follows
at
pages
942-H
-
943
:
"
As
has
been indicated
,
the
parol
evidence rule is not
a
single rule.
It
in fact
branches into
two
independent
rules
,
or
sets
of
rules
:
(1)
the integration rule
,
described above
,
which
defines the
limits of the
contract
,
and (2) the rule
,
or set of rules,
which determines
when and
to what extent extrinsic evidence
may be adduced
to
explain or affect the
meaning
of
the
words
contained
in
a
written
contract:
see
,
for
example,
the
exposition
by
SCHREINER
JA
in
Delmas
Milling
Co Ltd
v
Du
Plessis
1955
(3)
SA
447
(A)
at
453-5
(for
convenience
I shall call
this latter rule
"
interpretation
rule
"
.)
Neither rule
,
in my
opinion
,
affects the matter under
consideration
"
.
[11]
In
this
case, I
was
urged by
the respondent to find that the second
set
of
rules expounded
i
n
Johnson v Leal
supra
are appl
i
cable
which
in
turn will lead to understanding the context under which the agreement
was
reached
.
[12]
I was further
referred
to
the
unreported judgment
of a case
heard
in
the
South
Gauteng
Local
Division
under
Case
No
.
6836/2013
which
was
handed
down
on 2
September
2014 at
paragraph
1
5
.
3
which
i
s
in line with the Johnson case supra
:
"
The
meaning of
a
provision
is determined with
reference to
its language
and in
the light
of its
factual
context,
which includes
what has previously
been referred
to as
"
background
circumstances
"
and
"
surrounding
circumstances
"
.
Since interpretation
is
"
one
unitary exercis
e
"
,
the
process
requires the court
"
from
the outset
"
to consider
the language and the context of
the
provision
together, whether or not there is any
possible ambiguity
"
.
[13]
After
much
debate
about
the
proper
judicial
approach
to
the
i
nterpretation
of contracts, the Supreme
Court
of Appeal
delivered
a seminal
judgment
in
Natal
Joint
Municipal
Pension
Fund
v
Endumeni
Municipality
2012
(4) SA
593
(SCA)
where
it stated
as
follows
at
paragraph
1
8
:
"....
The present state
of
the
law
can
be expressed as follows:
Interpretation is the
process
of attributing meaning
to
the
words
used
in
a
document,
be
it
legislation
,
some
other
statutory
instrument
,
or
contract
,
having
regard
to the context
provided
by reading
the particular
provision
or provisions
in the light of the document as a
whole and the circumstances attendant upon its coming
into
existence
.
Whatever
nature
of
the
document
,
consideration
must
be given
to the language
used in the light
of the
ordinary
rules
of grammar
and syntax
;
the context in
which the
provision
appears
;
the
apparent
purpose
to
which
it
is
directed
and
the material
known to those responsible for
its production
'
'
.
This is the
route that
I intend to follo
w
.
[14]
In the
present
case
,
the
main
cause
of
contention
is
clause
5 of
the
written
agreement.
This clause
l
anguidly
provides
:
"
the subcontractor will hire
a
bus
from
MBC
a
Mercedes
Benz
1624 OF Bus
,
electronic
ticketing machine
including
a
two-
way
radio at R25
000.00
per
month. This
includes the provision of normal wear
and tear
maintenance
but
excludes
damage
caused by
abus
e
".
The
l
anguage
used in this clause
is
clear and
unambiguou
s
.
It does
not
require
one
to
go
beyond
i
ts
every
day
grammatical use.
As
a
result
,
it
i
s
not necessary to deviate from the
ordinary meaning
of
the words
used
.
[15]
It
has
often been
said
that in
the
l
aw context
i
s
everything. In
l
ine
with Endumeni supra
I
am
obl
i
ged to
have regard to the context and the circumstances surround
i
ng
the conclusion of
this
agreement. These
are
:
15.1
the tender
required that the tenderer
should
have
a b
u
s
;
15.2
the applicant
'
s
tender
was
non responsive
in that
the
applicant
did
not have a bus;
15.3
this notwithstanding, the applicant was
awarded the tende
r
.
I
t
i
s
clear
to
me
that
even
at
the
conclusion
of
the
agreement
,
the respondent
knew
that
the
applicant
did
not
have
a
bus
of
its
own.
This
did
not stop
the
parties
from
entering
into the agreement.
Furthermore,
in order to enable the appl
i
cant
to honour its contractual obligations, the respondent
l
eased
one of its buses to the applicant.
[16]
As
a
result
the
applicant
was
able
to
perform
its
contractual
obligation
s
.
All these
happened with
the full
knowledge
and co
operation
of the
respondent.
Until the first letter of
11 October
2013,
the
respondent
never
raised any complaint that the appl
i
cant
failed to provide
i
ts
own bus
.
[17]
Nothing
in
the
subcontract
i
ng
agreement
gives
any
inkling
that
the
clause relating to the lease of the bus
is divisible from
the
agreement
and
taking
the
whole subcontracting agreement
into
accoun
t
,
I
see no
reason why
it should be divisible
.
The duration of the
l
ease
of the bus
i
s
linked to
the
duration
of
the
subcontract
period which
in turn
i
s
the same as the
main contract
namely
,
on
a
month to
month
basis. The
submission
by
the
respondent
that
this
should
be
the
case
i
s
therefore
rejected
without
substanc
e
.
[18]
The
subcontracting
agreement
makes
provision
for
circumstances
under which the
agreement
may be terminate
d
.
These
are
listed
in
clause
16
.
Possession of a bus by
the applicant was never essent
i
al
to the coming into being of the contract. That this
i
s
so
i
s not
hard to fathom as
the
appl
i
cant
declared
at
the interview
that
i
t
did
not
possess a bus and was awarded the contract notwithstand
i
ng
.
F
l
owing
from this,
i
t
seems clear to
me
that there was
no
obligation on
the
part of
the
applicant
to
purchase
i
ts
own bus
.
[19]
Based
on
the
above
exposition
,
I
would
dismiss
the
respondent
'
s
submission as mere
sophistry
.
According
to the evidence
,
the
respondent
knew that
by taking
the
bus
from
the
applicant
,
the
applicant would
not
be
able to
del
i
ver
the
service
as agreed.
I
t
follows that
the
respondent
knowingly
and
deliberately
caused
the
applicant
'
s
inabil
i
ty
to perfor
m
.
The
conclusion is
i
neluctable
that
the
respondent's
conduct
in the
circumstances is
both
mala
fide
an
unconscionable. I
am constrained to
find as I
hereby do, that
the
respondent's
termination of the
contract
is
therefore
unlawful.
[20]
The
respondent
further
submits
that
after
the
parties
were
granted
a
postponement
in order
to
attempt
to
settle their difference
s
,
the
applicant issued a summons
against
i
t
based on an alleged oral agreement.
As
this allegation
of
an oral agreement
is
at variance
with
the allegations in the current
proceedings, the respondent
argues that
this
new
alleged
oral
agreement
has substituted
the
written
agreement. This
defence by
the respondent
is
diversionary in
the
sense
that
no
existence
of
the
oral
agreement
has
been proved
.
The
mere
fact
that
an
allegation
is
made
in
the
particulars
of
claim
,
the
terms
of which the respondent
disputed,
does not make the existence
of
such
an
allegation
a
fact.
It
can
only
become
a
fact
i
f it
i
s
not dispute
d
.
[21]
In
the
circumstances
the
follow
i
ng
order
is
made.
1.
The
cancellat
i
on
on
11
October
2013
by
the
applicant of
the subcontracting
agreement which
was entered
i
nto
by
the
parties on
03
March 2010
i
s
declared
null
and void
.
2.
The respondent
i
s
ordered to place the appl
i
cant
i
n
immediate posses
s
i
on
of
the
bus
that
it
l
eased
in
terms
of
the
subcontracting agreement within 30 days of
this order or be placed in possession of a similar
bus.
3.
The
appl
i
cant
be allowed to
l
ease the
bus
described
above
from
the
respondent
on
the
same
terms
and
conditions
set
out
in
the
subcontracting
Agreement subject
to
the
necessary variations taking
into account
the changed
circumstances
.
4.
The
applicant
be allowed
to
render
transport
services
set
out
in
the
subcontracting
agreement
on
the
same
terms
and conditions set
out
in
the subcontracting agreement.
5.
The
respondent
i
s
ordered
to
pay
the
costs
of
this
application which
costs
shall
include the
costs
occasioned
by the postponement
of this
appl
i
cation
on 27
March
2016
.
________________________
D
I MATLAPENG ACTING JUDGE
Northern
Cape
High
Court
,
Kimberley
Counsel:
For
the Applicant:
Adv A .D Olivier
Instructed
by:
Hugo Mathewson & Oosthuizen Inc
For
the Defendant:
Adv W.B Pye
Instructed
by:
Fletcher's Attorneys
Date
of Hearing:
25 November 2016
Date
of Judgment:
13 March 2017