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[2016] ZAGPPHC 688
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Big Five Duty Free (Pty) Limited v Airports Company South Africa Limited and Others (16829/15) [2016] ZAGPPHC 688 (5 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
Number: 16829/15
5/8/2016
Reportable:
Yes
Of
interest to other judges: Yes
Revised.
In
the matter between:
BIG
FIVE DUTY FREE (PTY)
LIMITED APPLICANT
and
AIRPORTS
COMPANY SOUTH AFRICA LIMITED 1
st
RESPONDENT
DFS
FLEMINGO SA (PTY)
LIMITED 2
nd
RESPONDENT
TOURVEST
HOLDINGS (PTY)
LIMITED 3
rd
RESPONDENT
Coram:
HUGHES J
JUDGMENT
HUGHES
J:
INTRODUCTION
[1]
The applicant, Big Five Duty Free (Pty) Limited (Big Five), seeks a
declaratory order in the following respects:
(a) Firstly,
declaring that the first respondent, Airports Company South Africa
Limited (ACSA) is bound to its decision of
26 August 2009 to award
the right to Big Five to operate Core Duty and VAT free stores in the
international departures and arrivals
airside terminals at O.R Tambo
International Airport, Cape Town International Airport and King Shaka
International Airport;
(b) Secondly, ACSA
be directed in terms of the Bid reference No.:CDFOB.05/2009, to
conclude the requisite written lease agreement
with Big Five within
30 days from the grant of this order;
(c) Thirdly, in
terms of Clause 13 of the Bid, ACSA be bound by the lease agreement
that came into effect on 13 or 20 June
2014;
(d) Fourthly, Big
Five requires this court to review and set aside ACSA's decision to
initiate a new tender process in respect
of this Bid; and
(e) Lastly,
directing the first respondent together with those opposing this
application to pay the applicant's costs.
[2]
On 26 August 2009 Big Five was named the successful bidder to provide
duty-free retail services at all international airports
within South
Africa. This has, to date, not been implemented primarily because one
of the bidders, the second respondent, namely
DFS Flemingo SA (Pty)
Limited (Flemingo), obtained an interim interdict from this Court
(Tolmay AJ (as she then was), to stay the
implementation of the award
whilst it took the decision to award the bid on review.
[3]
In the review proceedings this Court (Phatudi J) concluded that the
decision was
"...not in accordance with the system that is
fair
and transparent..."
This, he
found, amounted to a contravention of section 6(2)(c) and
6(2)(e)(iii) of the Promotion of Administrative Justice Act 3
of 2000
(PAJA) and section 217 of the Constitution of the Republic of South
Africa. Phatudi J accordingly set the decision of ACSA
to award the
bid to Big Five aside. The order of Phatudi J reads as follows:
"
ORDER
The
decision of the first and/or third respondent to award the tender for
the operation of the Core Duty and Vat-free Stores in
the
International Departures and arrival airside terminals at OR Tambo
International Airport at La Mercy (north of Durban KZN)
bid reference
number CDFOB.0512009 to the second respondent is set aside with
costs, such costs to include the costs of two counsel."
[4]
In these proceedings ACSA and Big Five opposed the relief sought by
Flemingo. Big Five was the only party that proceeded with
an
application for leave to appeal the decision of Phatudi J which
application was refused. On petition to the Supreme Court of
Appeal
(SCA) leave was accordingly granted to the full court of this
division. Even though ACSA was part of the review proceedings
before
Phatudi J they opted not to take part in the appeal before the full
court and merely abided by the decision of the full
court. The appeal
was argued and judgment was reserved however before the full court
handed down its decision a settlement agreement
was concluded between
Flemingo and Big Five. On 20 June 2014 this settlement agreement was
made an order of court.
[5]
For easy reference the order of the full court is set out below:
"HAVING
HEARD counsel for the parties and having read the record of appeal
against the judgment of the Honourable Mr Justice
PHATUDI
delivered on
17
MAY 2012
.
IT
IS
ORDERED
THAT
the Settlement Agreement between the parties filed of record and
marked
X",
be
and is hereby made an order of Court."
[6]
The crux of the settlement agreement is that Flemingo agreed to
abandon the review judgment in its favour and acknowledged that
ACSA
was free to implement the award of the bid to Big Five without
limitations, restrictions and any challenge thereto by Flemingo.
ACSA
took the stance that it could not implement the award to Big Five as
it would create the impression that it was taking the
law into their
own hands by ignoring the review decision. This culminated on 14
January 2014 with ACSA taking a decision to initiate
fresh tender
proceedings.
THE
SETTLEMENT AGREEMENT
[7]
Big Five submitted that ACSA was apprised of the developments at all
times regarding the settlement agreement. On 30 May 2014
Flemingo
sought that ACSA be cited as a party to the settlement agreement. On
the very same day having been advised that the parties
in the appeal
intended to conclude a settlement agreement ACSA, by way of
correspondence from its director, congratulated the parties
and
thanked them for the updates.
[8]
By 2 June 2014 ACSA's legal representative advised the parties as
regards the settlement agreement that:
'We all on (the) same
page!"
On the same day ACSA ultimately responded to the
request to be a party to the settlement agreement. It advised that it
needed the
board to convene and veto its participation to waive
claims against Flamingo; that a response will only be announced after
the
appeal was heard. The parties were advised by ACSA that they
could conclude the settlement agreement without its involvement or
wait upon the decision of the board. The parties chose the former and
concluded the settlement agreement on 13 June 2014.
[9]
On 17 June 2014 a copy of the signed settlement was sent to ACSA. A
meeting with the acting CEO of ACSA and their legal representative
was held on 19 June 2014 with Big Five as regards the signed
settlement.
[10]
On 20 June 2014 ACSA sent correspondence to Big Five thanking them
for the opportunity to discuss the settlement and advising
that they
still needed to consider their legal and financial positions before
giving their response to the settlement agreement.
ACSA on the other
hand, persists that the settlement agreement had not been canvassed
with them.
[11]
A compromise by disputing parties reached out of court amounts to a
settlement. Big Five and Flamingo are the parties to the
settlement.
The compromise settled all the disputes between them, inclusive of
the interim interdict, the review application, the
petition and the
appeal. By virtue of this settlement agreement it follows that new
rights and obligations arose between the two
parties. See
Lieberman
v Santam Ltd 2000(4) SA 321 (SCA) at paras [11] and [12].
[12]
ACSA persists that its decision to abide by the decision of the court
did not make it party to the agreement even though the
parties made
provision upon signature that ACSA may
"...implement the
award of its tender to the Appellant (Big Five) without limitation or
restriction and without any challenge
thereto
..." The
parties also made provision for the settlement agreement that was
envisaged to be made an order of court by the appeal
court ( the full
court) and agreed to be bound by the express terms ordered therein.
ABIDING
BY THE SETTLEMENT AGREEMENT MADE AN ORDER OF COURT
[13]
After the judgment of Phatudi J Big Five applied for leave to appeal
this was refused by Phatudi J. It petitioned the SCA for
leave which
was granted to the full court. Big Five correctly submits that the
judgment of Phatudi J is consequently suspended
in terms of Rule
49(11) of the Uniform Rules of Court.
Section 18
of the
Superior
Courts Act 10 of 2013
is not applicable at this stage.
[14]
Before concluding the settlement agreement Flemingo formally
abandoned the interim interdict of Tolmay AJ and the judgment
of
Phatudi J which were both in its favour. Flemingo also formally
withdrew its opposition to Big Five's appeal. Both steps enabled
Flemingo to enter the settlement agreement with Big Five without
reservation.
[15]
Adv. Trengrove SC representing Big Five argued that ACSA, having
opted to abide by the decision of the appeal court was bound
by the
settlement agreement which was made an order of that court. To the
contrary the crux of ACSA's argument by Adv. Marcus SC
on this point
is that since the judgment of Phatudi J had not been overturned on
appeal on the merits ACSA was still bound by that
judgment. The
settlement agreement, to which ACSA was by all accounts not a party,
was not binding on ACSA. Mr Marcus emphasised
that this court should
not lose sight of the concession made by Big Five in its heads of
argument that: 'The order of the full
bench did not expressly set
aside the review judgment.'
[16]
Adv. Swart SC for the third respondent, Tourvest Holdings (PTY)
Limited one of the unsuccessful bidders and a party in all
the
proceedings, aligned Tourvest Holdings' case with ACSA's submission
and went on to argue that the making of the settlement
agreement an
order of court did not nullify the judgment of Phatudi J. This being
the case, the argument went, the order by Phatudi
J's judgment stood
and ACSA was bound by it.
[17]
The dictum that is apposite to this aspect is located in the headnote
of
Gollach
&
Comperts (1967) (Pty) Ltd v Universal
Mills
&
Produce
Co
(Pty) Ltd and Others 1978 (1) SA
914 (A):
"Headnote:
A
transactio
is an agreement between two or more persons either
to end litigation or to prevent litigation resulting from the
differences between
them. It is most closely equivalent to a consent
judgment.
Whether
extra-judicial or embodied in an order of Court, it has the effect of
res judicata
and, like any other contract and
any order of Court, made by consent,
it may be set aside on the
ground that it was fraudulently obtained or on the grounds of
justus
error,
provided the
error
vitiated true consent and did
not merely relate to motive or to the merits of a dispute which it
was the very purpose of the parties
to compromise.
Voluntary
acceptance by parties to a compromise of an element of risk that
their bargain might not be as advantageous to them as
litigation
might have been is inherent in the very concept of compromise. This
is a circumstance which the Court must bear in mind
when it considers
a complaint by a dissatisfied party that, had he not laboured under
an erroneous belief or been ignorant of certain
facts, he would not
have entered into the settlement agreement."
(My
emphasis)
[18]
As regards what constitutes a settlement agreement
Gollach at
921A-D
stated:
'In
Cachalia v Herberer
& Co.,
1905
T.S.
457
at p.
462,
SOLOMON, J.. accepted the definition of transactio given by
Grotius, Introduction, 3.4.2., as
"an
agreement between litigants for the settlement of a matter in
dispute".
Voet,
2.15.1., gives a somewhat wider definition which includes settlement
of matters in dispute between parties who are not litigants
and
later, 2.15.10., he includes within the scope of transactio,
agreements on doubtful matters arising from the uncertainty of
pending conditions "even though no suit is then in being or
apprehended". (Gane's trans., vol. 1, p. 452.) The purpose
of a
transactio is not only to put an end to existing litigation but also
to prevent or avoid litigation. This is very clearly
stated by Domat,
Civil Law,
vol. 1, para. 1078, in a passage quoted in
Estate
Erasmus v Church,
1927 T.P.D. 20
at p. 24, but which bears
repetition:
"A
transaction is an agreement between two or more persons, who, for
preventing or ending a law suit, adjust their differences
by mutual
consent, in the manner which they agree on; and which every one of
them prefers to the hopes of gaining, joined with
the danger of
losing."'
[19]
ACSA and Tourvest Holdings were party to the main application of
Flemingo from where the judgment of Phatudi J emanated. Tourvest
Holdings' failure to partake in the appeal was at its own peril
having been granted ample opportunity to present its case. In my
view
Tourvest Holdings are in the same position as ACSA who had opted to
abide by the outcome of the process embarked upon.
[20]
In the result, taking the dictum of
Gollach
into account, the
settlement agreement concluded by the parties became the equivalent
to a consent judgment and as such has the
effect of
res judicata.
[21]
Big Five contended that the parties who opted to abide by the
decision of the appeal court are bound by its order. It referred
to
two decisions:
Eden Village (Meadowbrook) (Pfy) Ltd v Edwards
1995
(4)
SA
31
(A); and MEC for Health,
Eastern Cape v
Premier, KwaZulu-Natal: In Re Minister of Health v Treatment Action
Campaign
[2002] ZACC 14
;
2002 (5) SA 717
(CC) at para
[11]
('TACJ.
In the latter
case the Concourt stated:
"As
for the Premier, he did not note an appeal against the High Court's
order. He supported the relief that was granted and
the application
for leave to execute and abided this Court's decision on appeal. The
judgment and orders in the main appeal thus
bind the Premier, the MEC
and the government of KZN. Should leave to appeal be granted and the
Premier be successful in his proposed
appeal, he would still not be a
party to the appeal in the TAC case. It also follows that no useful
purpose would be served by
allowing the Premier to lodge any
additional evidence. "
I
agree with Big Five that the TAC decision is on point. The
Constitutional Court held that, the judgment and orders were binding
as the Premier opted to abide by the decision on appeal. Likewise in
this instance, ACSA and Tourvest Holdings who support the
relief
granted by the High Court elected to abide by the decision of the
full court on appeal and stand to be bound by it.
THE
ABANDONMENT BY FLAMINGO
[22]
Mr Swart posed the rhetorical question whether the abandonment by
Flemingo resulted in the judgment of Phatudi J 'disappearing',
that
is, whether the abandonment resulted in there no longer being a court
order in place, as Big Five contends. Counsel submitted
that in these
circumstances Flemingo could not abandon the judgment of Phatudi J as
it was a judgment
in rem
and not a judgment
in personam,
which affects the status of ACSA's award. This abandonment, so
the contention went, could not lead to
res judicata
and as
such would require an order for the judgment of Phatudi J to
'disappear'.
[23]
Mr Marcus supports Mr Swart on this score. He goes further to submit
that the abandonment by Flamingo has no effect on the
judgment of
Phatudi J, as it is one of those judgments which does not lose its
effect, unless successfully appealed against. Counsel
invoked
Du
Plessis v Du Preez
1916 TPD 125
at page 129
whereat it was held:
"But
the defendant abandoning the judgment in his favour dismissing the
plaintiffs summons, the plaintiff is not benefitted
in the way
desired. Mere consent of the defendant cannot reinstate the summons,
nor does it appear that the magistrate can reinstate
the proceedings
where they were before the order upholding the plea of prescription
and dismissing the summons. An order of court
is necessary, and the
magistrate cannot give such an order even with consent of parties. It
appears that in this particular case
the plaintiff-appellant was
bound to continue his appeal to get the order of the magistrate set
aside, and therefore the appellant
is entitled to the order he asks
for setting the magistrate's decision aside with costs of appeal and
wasted costs in the lower
court."
[24]
In conclusion, on this aspect, Mr Marcus submitted that Big Five
should have pursued the judgment of Phatudi J to its logical
conclusion instead of placing reliance on Flemingo's abandonment. Not
so, according to Mr Trengrove who submitted that Flemingo's
abandonment of the judgment which was in its favour led to there
being 'no court order in place reviewing and setting aside ACSA
decision'.
[25]
It is trite that judgments
in rem
are such that they determine
the status of a person or thing and are binding on all and not just
the parties to the dispute. See
Tshabalala v Johannesburg City
Council
1962 (4) SA 367
(T) 368H-370A.
In the premises if the
judgment has an effect on the status of a person or thing it cannot
be abandoned as it is binding on all.
It would necessitate a court
order instead as pronounced in
Du Plessis supra.
In this
instance, in my view, the judgment of Phatudi J declaring the process
of awarding the tender to Big Five as unfair and not
transparent has
an effect on the status of the award to Big Five and as such would
constitute a judgment
in rem.
[26]
If I am correct, then Flemingo cannot lawfully abandon the judgment
of Phatudi J. the meaning of this is that the
status quo ante
is
maintained. The judgment of Phatudi J would thus require an order
overturning it as per the dictum in
Du Plessis.
THE
ORDER OF THE FULL COURT
[27]
I find it apposite to commence my analysis of the full courts' order
with a pronouncement by the Concourt in
Eke v Parsons
2016 (3) SA
37
(CC) at 48 to 50:
"[28]
This in no way means anything agreed to by the parties should be
accepted by a court and made an order of court. The
order can only be
one that is competent and proper. A court must thus not be mechanical
in its adoption of the terms of a settlement
agreement. For an order
to be competent and proper, it must, in the first place, 'relate
directly or indirectly to an issue or
lis
between the
parties'...
[29]
Secondly, 'the agreement must not be objectionable, that is, its
terms must be capable, both from a legal and a practical point
of
view, of being included in a court order'. That means its terms must
accord with both the Constitution and the law. Also, they
must not be
at odds with public policy. Thirdly, the agreement must 'hold some
practical and legitimate advantage.' ...
[30]
Once a settlement agreement has been made an order of court, it is an
order of the court like any other. It will be interpreted
like all
court orders...
[31]
The effect of a settlement order is to change the status of the
rights and obligations between the parties. Save for litigation
that
may be consequent upon the nature of the particular order, the order
brings finality to the
lis
between the parties; the
/is
becomes res judicata (literally, 'a matter judged'). It changes
the terms of the agreement to an enforceable court order. The type
of
enforcement may be execution or contempt proceedings..."
[32]
Mr Trengrove argued that it matters not whether the parties to a
proposed settlement agreement in the end concluded it or not.
On
counsel's view the important factor is that Flemingo abandoned the
judgment of Phatudi J thus there is no
/is
that remains for
determination. In addition, Flemingo withdrew the review proceedings
in their entirety. The matter is considered
pro non scripto.
The
new terms were set out in the settlement agreement and were endorsed
by the full court when they made the settlement agreement
an order of
court. In these circumstances, so the argument goes, the only
conclusion is that there is nothing left of the judgment
of Phatudi J
and therefore ACSA is free to implement the award made in favour of
Big Five.
[33]
Finally, in this regard, it was argued by Mr Trengrove that ACSA
would have to implement the award to Big Five as it was bound
contractually and in terms of its administrative duty to do so.
Contractually, the bid document makes specific mention that on
the
award of the bid a contract comes into place with the successful
bidder. The terms of such contract are also attached to the
bid
document. The administrative decision to award Big Five the bid
further binds ACSA. This decision has legal consequences and
stands,
correctly or incorrectly, until it is set aside by a court of law.
See
Ouderkraal
Estates
(Pty) Ltd v City of Cape Town
2004
(6) SA 222
(SCA) at para [26] and [27].
[34]
Mr Marcus on the other hand submitted that because the process in
awarding the tender to Big Five was held to be in contravention
of
the Constitution and PAJA and the fact that no appeal judgment exists
overturning the judgment of Phatudi J therefore ACSA cannot
lawfully
implement the award. In addition, the judgment was a determination
made in respect of ACSA's award to Big Five being unlawful,
invalid
and unenforceable. This is validated or borne out by Big Five's
withdrawal of its appeal.
[35]
Both Mr Swart and Mr Marcus took refuge under the principle that
administrative processes involving an administrative organ
done in
breach of administrative justice dictates a public remedy and not a
private remedy. See
Steenkamp NO V Provincial Tender Board,
Eastern Cape
2007 (3) SA 121
(CC) at para [29]:
"It
goes without saying that every improper performance of an
administrative function would implicate the Constitution and
entitle
the aggrieved party to appreciate relief. In each case the remedy
must fit the injury. The remedy must be fair to those
affected by it
and yet vindicate effectively the right violated. It must be just and
equitable in the light of the facts, the implicated
constitutional
principles, if any, and the controlling law. It is nonetheless
appropriate to note that ordinarily a breach of administrative
justice attracts public-law remedies and not private-law remedies.
The purpose of a public-law remedy is to pre-empt or correct
or
reverse an improper administrative function ...Ultimately the purpose
of a public remedy is to afford the prejudiced party administrative
justice ..."
[36]
In this instance the settlement agreement is between two private
parties, Big Five and Flemingo, and is thus a private remedy
which
excluded the administrative organ, ACSA. It was submitted that in the
final analysis a court has a duty to 'advance efficient
and effective
public administration compelled by constitutional precepts and at a
broader level, to entrench the rule of law.'
See
Steenkamp supra
at para [29].
ANALYSIS
AND EVALUATION
[37]
It is unquestionable that in this case ACSA made an administrative
decision with its award of the bid to Big Five. This resulted
in a
breach of administrative justice according to the judgment of Phatudi
J accordingly, as per
Steenkemp,
a public-law remedy would be
required and not a private-law remedy such as the settlement
agreement.
[38]
In my view, the settlement agreement is a compromise between Big Five
and Flamingo. It in no way constitutes a public-law remedy
to the
parties in light thereof that the administrative organ, ACSA, who is
pertinent to the
lis
was not a party. ACSA had opted to abide
by the decision of the appeal. The status and ramifications of the
order are dealt with
below.
[39]
The abandonment of the interim interdict and the review judgment and
the further withdrawal of the review application would
ordinarily
have no force or effect as Flamingo could not implement the
abandonment as it involves a judgment
in rem
which has an
effect on the status of the award that is binding on all. However,
the enquiry does not end here, as this particular
settlement
agreement was made an order of court.
[35.1]
In order for a settlement agreement to be a proper and competent
order, it needs to be directly related to the
lis
between the
parties, which it does (See
Eke v Parsons supra).
[35.2]
Secondly, the settlement agreement must not be objectionable. In
short the terms must conform to both the Constitution and
the law
(ibid
Eke v Parsons).
This is where I find the settlement
agreement as an order of court to fall short.
[35.3]
In the third place, the Constitutional Court
(Eke v Parsons)
has
made it clear that conduct or transaction agreed upon should not be
made an order of court without ensuring that it is competent
and
proper. In this instance, it has been held by Phatudi J that the
award was in contravention of section 217 of the Constitution
and
other law as well as sections 6(2)(c) and 6(2)(e)(iii) of PAJA and
public policy. The award was held not to conform to the
systems in
place. The full court endorsed the settlement agreement knowing that
Phatudi J made these findings pertaining to the
award.
[40]
As was pointed out earlier the remedy which emerges from the
settlement agreement is one which is a private remedy between
two
parties, it does not in my view, constitute a public remedy. That
being my view the dictum in
Steenkamp
is binding on me. It is
certainly not acceptable for parties' litigation to bypass a finding
of unconstitutionality by a Court through
a settlement agreement that
on the face of it, nullifies that finding.
[41]
The settlement agreement which has been made an order of court in
respect of a private remedy is prejudicial to an affected
party as it
advocates that an award be implemented which does not conform to the
Constitution and the law. In the circumstances,
the order is at odds
with public policy as the award seeks to advance that which is
"not
in accordance with the system that is
f
air and
transparent".
[42]
I must reiterate though that the settlement agreement was made an
order under these circumstances,
"Having heard counsel for
the parties and having read the record of appeal against the judgment
of the Honourable Mr Justice
Phatudi delivered on 17 May 2012."
The order would have, accordingly, been made with due reflection
by the full court on the issues before it. I will return to this
aspect in due course.
[43]
Based on the view I take regarding the abandonment agreement by
Flamingo and Big Five that did not have the effect of setting
aside
or nullify Phatudi J's judgement as advocated for by Big Five. This
leaves us with an order of the full court from the appeal
process,
which ACSA and Tourvest Holdings opted to abide by. In my view, if
the order of the full court is competent and proper,
ACSA and
Tourvest Holdings would be by this order.
[44]
It has been held that the award is at odds with the Constitution, the
law and public policy. Surely an order of this nature
which has been
endorsed by the full court cannot be left in perpetuity. Cameron J
stated in
MEC for Health, Eastern Cape and Another v Kirland
Investments (PTY) Ltd tla Eye and Lazer Institute
2014 (3) SA 481
(CC) at [101] and {103]:
"[101]
The essential basis of
Ouderkraa/
was that invalid
administrative action may not simply be ignored, but may be valid and
effectual, and may continue to have legal
consequences,
until set
aside by proper process...
[103]
The fundamental notion - that official conduct that is vulnerable to
challenge may have legal consequences and may not be
ignored until
properly set aside - springs deeply from the rule of law. The courts
alone, and not public officials, are the arbiters
of legality. As
Khampepe J stated in
We/kom-
'(the)
rule of law does not permit an organ of state to reach what may turn
out to be a correct outcome by any means. On the contrary,
the rule
of law obliges an organ of state to use the correct legal process.'
For
a public official to ignore irregular administrative action on the
basis that it is a nullity amounts to self-help..."
THE
APPLICATION OF
STARE DECISIS
[45]
The meaning of the aforesaid legal principle
stare decisis et non
quieta movere,
is 'to stand by precedents, and not to disturb
settled points'. See Hahlo & Ellison Kahn,
The South African
Legal System and its Background (1968) at 214.
In laymen's terms,
this simply means that courts are bound to follow decisions handed
down by their courts or a court with higher
standing on similar legal
issues. It is the legal propositions arising from the facts of the
case, the
ratio decidendi
that is binding.
[46]
Ordinarily I would be bound by the decision of the full court and if
I sought to disturb the full court's decision I would
have to
demonstrate that it was clearly wrong.
See
Ex Parte Minister Of Safety And Security And Others: In Re S v
Walters
2002 (2) SACR 105
(CC) at para [58] where
Kriegler J
said:
'158]
The first reported instance in the constitutional era where the
doctrine came pertinently under scrutiny was in
Shabalala v
Attomey-General, Transvaal, and Another; Gumede and Others v
Attorney-General, Transvaal,
where counsel sought to persuade
Cloete J that
'where
a Court is called upon to interpret the Constitution, that Court can
depart from other decisions on the same point in the
same Division if
it disagrees with such other decisions. I cannot agree with this
submission.
It is settled law that a Court can only depart from
the previous decisions of a Court of equivalent status in the same
area of jurisdiction
where it is satisfied that the previous decision
is "clearly wrong": S
v Tarajka Estates (Edms)
Bpk
en
Andere
1963 (4) SA 467
(T) at
470A; and cf
R v Jansen
1937 CPD 294
at 297 and
Duminij v Prinsloo
1916 OPD 83
at 84 and 85.
I
see no reason to depart from this salutary principle simply because
the point at issue involves an interpretation of the Constitution.
I
appreciate that s 4(1) of the Constitution provides that "This
Constitution shall be the supreme law of the Republic . .
." and
that s 4(2) provides that "This Constitution shall bind all . .
. judicial organs of State at all levels of government";
but
those provisions do not in my view mean that the established
principles of
stare decisis
no longer apply. Such an approach
would justify a single Judge departing from a decision of a Full
Bench in the same Division because
he considered the interpretation
given to the Constitution by the Full Bench to be in conflict with
the Constitution, with resultant
lack of uniformity and certainty
until the Constitutional <I Court, whose decisions in terms of s
98(4) bind,
inter alia,
"all judicial organs of State",
had pronounced upon the question.'
The
Constitution that was under discussion there was the interim
Constitution75 and the point at issue was the correctness of a
previous interpretation of one of its provisions by another Judge in
the same Division."
[47]
In the present case I am of the view that the full court did not have
the opportunity to consider the issues that arose regarding
the terms
of the settlement agreement which were presented before me before
they proceeded to make the settlement agreement an
order of court. I
say so because the argument regarding the terms of the settlement
agreement and its consequences was not argued
before the full court.
I have in this Judgement dealt with these issues and the consequences
thereof. I am further of the view
that if the full court had the
benefit of the argument advanced and having had an opportunity to
examine same I believe they would
not have granted the settlement
agreement and made it an order. See
Harris and Others v Minister
of Interior and Another
1952 (2) SA 428
(A) at 470F to 4720.
[48]
Be that as it may I don't regard my Judgement as violating the
stare
decisis
principle. The Full Court did not hand down a Judgement
with reasons but simply accepted a settlement agreement between two
private
entities and made it an order of Court without applying its
mind to the consequences of so doing. In my view I cannot be bound by
an order as simple as that which is devoid of any reasons. In my view
that order did not displace the Judgement by Phatudi J.
[49]
Mr Trengrove painstakingly pointed out that the issues of Flemingo's
abandonment of the judgement of Phatudi J, Flemingo's
withdrawal of
the interim interdict and review in
toto,
like it never took
place, and the
lis
between Flemingo and Big Five having come
to an end, were issues before the full court as they were set out in
the settlement agreement.
He further argued that the full court
having had the settlement agreement before it went ahead with the
impo mater
of the full court, in granting the order and thus
the entire review process vanished.
[50]
In this instance it is obvious that there is no
ratio decidendi
as
the settlement agreement was merely made an order. Thus the
fact
that the issues set out in the settlement agreement were before
the full court does not, in my view, mean that
'counsel was heard
' on these issues for the full court to have made, with respect,
an informed decision to grant such an the order. I must also mention
that sight should not be lost of the fact that the Full Court heard
full argument and was pre-empted from doing a full Judgement
by the
presentation of the settlement agreement which it accepted and acted
upon without actually considering the consequences
thereof.
[51]
In
Thebus
&
another v S
[2003] ZACC 12
;
2003 (6) SA 505
(CC) para {28)
and [31)
it was said that where a court finds that a decision of
its court does not conform with the Constitution or its objective
normative
values system it then has a duty to depart from that
decision (ibid
Thebus para [28)).
In terms of section 173 of
the Constitution the courts have an inherent power to develop the
common law taking into account the
interest of justice in order to
reflect the changing social, moral and economic make-up of society (
ibid
Thebus para [31)).
[52]
It is apposite to quote that acknowledged by Innes J in
Habib
Matan v Transvaal Government
1904 TS 404
at 413:
"It is a
lesser evil for a court to override its own legal opinion, clearly
shown to be wrong, than indefinitely to perpetuate
its error."
In light of the aforesaid and my analysis and evaluation I am
fortified in my view that the Full Court should
have been slow to
accept the settlement agreement and make it an order. This is for the
reason that a Judge of this Court had handed
down a fully reasoned
Judgement in which he found that ACSA had followed a constitutionally
flawed process in awarding the bid
to Big Five and consequently set
aside the resultant award. I stand resolute in my view that the
making of the settlement agreement
in this instance an order of court
was, with respect, clearly wrong having been made without due
consideration of the issues arising
from the settlement agreement.
[53]
The injunction in the
Eke
judgement was clearly not taken into
account by the Full Court. The terms set out in the settlement
agreement which was made an
order of court clearly is at odds with
the Constitution and public policy in that the award of the tender to
Big Five had been
found by Phatudi J as being at odds with the
Constitution, the law and public policy. The decision taken to award
Big Five the
tender was an administrative process, as was the process
in
Steenkemp,
and as such the administrative breach requires a
public remedy and not the private remedy, that is the settlement
agreement between
two private entities.
[54]
I find that the order of the full court, is at odds with the
Constitution, the law and public policy, cannot stand, as the
order
is not competent and proper, and is objectionable in that it allows
the implementation of an award which was held by this
Court per
Phatudi J, to be contrary to the Constitution, the law and public
policy.
[55]
In my judgment, the review judgment of Phatudi J having not been set
aside by proper process stands and the parties remain
bound by it.
[56]
It stands to reason that the application by Big Five as set out in
its Notice of Motion must fail and be dismissed with costs.
Such
costs to include the employment of two counsel.
[57]
In the result the following order is made:
[57.1]
The application of the applicant, Big Five Duty Free (PTY) Limited,
is dismissed with costs. Such costs to include the employment
of two
counsel.
________________________
W.
Hughes
Judge
of the High Court,
Gauteng
Division, Pretoria
Appearances:
For
the Applicant: Wim
Trengove SC
Steven
Budlender
Jason
Mitchell
Mmakgomo
Maenetje
Instructed
by: Bouwer
Kobeli Morabe Attorneys
For
the 1
st
Respondent: Gilbert
Marcus SC
Byron
Anthony Morris
Instructed
by: Mkhabela
Huntley Adekeye Inc
For
the 3rd Respondent: Nic
Maritz SC
Instructed
by: Macrobert
Inc