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[2020] ZASCA 4
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South African Football Association v Fli-Afrika Travel (Pty) Limited (1317/2018) [2020] ZASCA 4; [2020] 2 All SA 403 (SCA) (4 March 2020)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 1317/2018
In
the matter between:
SOUTH
AFRICAN FOOTBALL ASSOCIATION
APPELLANT
and
FLI-AFRIKA
TRAVEL (PTY) LIMITED
RESPONDENT
Neutral
citation:
South African Football
Association v Fli-Afrika Travel (Pty) Limited
(1317/2018)
[2020]
ZASCA 4
(4 March 2020)
Coram
:
Ponnan, Saldulker, Plasket and Mbatha JJA and Eksteen AJA
Heard
:
20 November 2019
Delivered:
4 March 2020
Summary:
Contract – interpretation – whether obligation
contended for by respondent an express or tacit term –
settlement
agreement – effect of settlement.
Order
On
appeal from:
Gauteng Division of the
High Court, Johannesburg
(Carelse, Mabusele
JJ and Malungana AJ sitting as court of appeal).
1
The appeal is upheld with costs, including the costs of two counsel.
2
The order of the court below is set aside and replaced with the
following order:
‘
The
appeal is dismissed with costs, including the costs of two counsel.’
JUDGMENT
Plasket
JA (Ponnan, Saldulker and Mbatha JJA and Eksteen AJA concurring)
[1]
The appellant, the South African Football Association (SAFA), and the
respondent,
Fli-Afrika Travel (Pty) Ltd (Fli-Afrika), have had a
long-standing business relationship that commenced in the 1990s. SAFA
administers
football in the country. Fli-Afrika was SAFA’s
travel agent. Shortly before South Africa was to host the 2010
Federation
Internationale de Football Association World Cup (the
World Cup), the parties entered into a joint venture agreement with a
view
to exploiting possibilities that the World Cup would offer.
[1]
It is that agreement, concluded on 23 January 2009, that is the
subject of this appeal, as well as a subsequent agreement, concluded
on 16 April 2010, that the parties styled a settlement agreement.
[2]
The litigation that culminated in this appeal commenced in a trial in
the Gauteng
Division of the High Court, Johannesburg, Fli-Afrika
having claimed substantial damages on the basis of what it alleged
was a breach
of the joint venture agreement on the part of SAFA.
Matojane J dismissed Fli-Afrika’s claim with costs. His order
was set
aside by Mabesele J, with whom Carelse J and Malungana AJ
concurred, in a subsequent appeal to a full court of that division.
In
place of the order of Matojane J, the full bench ordered SAFA to
pay Fli-Afrika R13 989 452.78, interest on that amount
and
costs. Special leave to appeal was granted to SAFA by this court.
The background
[3]
Prior to the parties entering into the January 2009 agreement, they
had, on 10 July
2007, concluded what they termed a memorandum of
understanding (the MOU). It was to endure for a period of four years.
The MOU
recognized ‘the commonality of interest and objectives,
and the benefits of mutual co-operation arising between SAFA and
FLI-AFRIKA TRAVEL in regard to travel arrangements for SAFA and its
Members’. It created a framework for SAFA and Fli-Afrika
to
cooperate in the future.
[4]
The MOU recorded that Fli-Afrika was SAFA’s ‘
official
travel agency
’ and was
‘
responsible for all travel
arrangements both locally and internationally
,
inclusive of the Executive’s and various Regions’
arrangements
for the 2010 FIFA World
Cup
’. Two of three conditions for
Fli-Afrika’s right to be SAFA’s official travel agent
were that SAFA was to be
able to ‘participate in various travel
ventures and/or programmes’ which may present themselves,
provided that it did
so through Fli-Afrika; and that Fli-Afrika could
benefit from its association with SAFA ‘through its membership,
family of
sponsors and third party agreements which are currently in
force’.
[5]
It was agreed that in any joint venture that arose, SAFA would ‘share
the benefits
which may accrue after inception of the partnership, in
the ratio of 40% - SAFA/ 60% - FLI-AFRIKA TRAVEL, net after payment
of
all expenses relating to the FIFA 2010 World Cup’.
[6]
The MOU was followed by the agreement of 23 January 2009. The parties
called it a
service level agreement, or SLA.
[7]
The effect of the SLA was to form a joint venture between SAFA
(referred to in the
SLA as ‘the Association’) and
Fli-Afrika for a specific project. The heart of the agreement is
contained in clause
3. It provides:
‘
3.1
The Association requires Fli-Afrika to source and supply 2 500
(two thousand five hundred) Football World Cup 2010 “Packages”
per week for and on behalf of the Association, its VIP’s and
various international Football Federations referred to Fli-Afrika
Travel by the Association.
3.2 These Football World
Cup 2010 Packages are to include accommodation in various host
cities, tickets to various Football World
Cup Games, and return
transport from the accommodation provided in terms of the Package to
the Stadium where the games are played.
3.3 The Association
irrevocably undertakes to supply Fli-Afrika Travel with 2 500
(two thousand five hundred) tickets per week
to various World Cup
Games.
3.3.1 The Association
further irrevocably undertakes to make payment to Fli-Afrika Travel
of the balance of any weekly unsold Packages
in the event that
Fli-Afrika is not able to sell 2 500 Packages per week.
3.4 All such amounts as
shall become payable by the Association to Fli-Afrika Travel from
time to time shall be paid by not later
than the 7
th
day
of the next succeeding month in which the debt arose.
3.5
Insofar as consulting services which may be rendered by Fli-Afrika
Travel to and/or for and on behalf of the Association from
time to
time is concerned, as contemplated in this agreement, Fli-Afrika
Travel shall be paid the agreed fee of R2 000 (two
thousand
rand) per hour or part thereof in respect of necessary time spent by
Fli-Afrika Travel for and on behalf of the Association
in supplying
such consulting services.’
[8]
Clause 4 is also of importance. It provides, in relevant part:
‘
FLI-AFRIKA
TRAVEL will be responsible for the day-to-day running of its finance
and administrative affairs, and as such will implement
travel
arrangements and ensure that the necessary costs of such travel
arrangements are submitted to the Association, who in turn
will
arrange for payment of same in terms of the current payment
structure.
’
[9]
It would appear from clause 2.6, which defined the term ‘services’,
that
SAFA planned to provide the tickets for the joint venture from
its allocation of tickets from the Federation Internationale de
Football Association (FIFA), the international governing body for
football.
[2]
Clause 2.6.3
recorded that SAFA ‘receives certain hospitality and ticketing
packages from FIFA and/or Match in terms of its
requirements for both
its membership and for distribution and sale to international
visitors inclusive of the “Footballing
Family” who may
wish to avail themselves of the ticketing benefits available to the
Association as the host Association of
both the 2010 FIFA World Cup
and the 2009 FIFA Confederations Cup’.
[3]
[10]
When the SLA had been signed, and hence came into operation,
Fli-Afrika set about making bookings
of hotel rooms with a view to
‘completing’ the packages once SAFA supplied the tickets.
To this end, it expended R27 698 839.26.
SAFA failed to
deliver a single ticket, with the result that no packages could be
sold and Fli-Afrika was left holding a vast number
of hotel bookings.
It managed to mitigate its loss to an extent by selling hotel
bookings to the value of R13 709 346.
48.
[11]
SAFA did not provide any tickets, as it had undertaken to do, because
it was precluded from doing
so by the terms of the Organising
Association Agreement, the agreement in terms of which FIFA granted
SAFA the right to host the
World Cup. Only FIFA and its agent, Match,
were entitled to sell tickets.
[12]
With the World Cup looming and no sign of any tickets being provided
by SAFA, Mr Nazeer Camaroodeen,
Fli-Afrika’s managing director,
had begun to engage with SAFA officials as early as the beginning of
2010. This engagement
took the form of meetings as well as the
exchange of correspondence.
[13]
In a letter from Mr Camaroodeen to Mr Leslie Sedibe, SAFA’s
chief executive officer, dated
1 February 2010, Mr Camaroodeen
threatened litigation against SAFA if it did not comply with its
contractual obligation to supply
tickets. He also recorded that
Fli-Afrika had incurred ‘considerable expenses’ securing
accommodation for the joint
venture contemplated by the SLA. He
warned SAFA that if it did not comply with its obligation to supply
the tickets, Fli-Afrika
would ‘sustain considerable damages’.
[14]
SAFA’s response to this letter was complicated by the fact that
Mr Sedibe had only recently
been appointed to his position and was
not, understandably, fully aware of all of SAFA’s contractual
obligations. This problem
was aggravated by Mr Camaroodeen’s
inexplicable reluctance to provide Mr Sedibe with a copy of the SLA.
Mr Sedibe consulted
with his predecessor who appeared to know nothing
about the SLA, but his attention was drawn to the MOU and an addendum
to it.
He wrote in response to Mr Camaroodeen’s letter of 1
February 2010:
‘
If
you don’t mind, I would really appreciate a copy of the joint
venture agreement between SAFA and Fli-Afrika to which the
addendum
to the JV Agreement relates.’
He
added that if he was provided with a copy of the SLA that would
‘avoid an endless exchange of correspondence on an issue
that
could be resolved by perusing the agreements’.
[15]
As far as the demand for the delivery of tickets was concerned, Mr
Sedibe wrote:
‘
As
you are no doubt aware, FIFA is the owner and seller of tickets to
matches of the 2010 FIFA World Cup South Africa and accordingly
(and
this is without admission of the correctness of your allegation that
SAFA has a duty to deliver tickets to Fli-Afrika), in
order for SAFA
to acquire tickets on your behalf, SAFA would have to purchase the
tickets from FIFA and as the Accounting Officer
of SAFA, I can assure
you that SAFA is not in a financial position to purchase such tickets
unless FIFA approves an extra ordinary
payment procedure. Accordingly
any threat to institute legal action against SAFA would be premature
in my view.’
[16]
While it appears that a copy of the SLA was still not forthcoming, at
a meeting between Mr Camaroodeen,
on the one hand, and Mr Sedibe and
Mr Gronie Hluyo, SAFA’s financial director, on the other, SAFA
asked to see Fli-Afrika’s
contracts for accommodation with
various hotels, and proof that it had paid for that accommodation.
These documents were provided
by Fli-Afrika.
[17]
On 5 March 2010, Mr Camaroodeen wrote to Mr Sedibe to say that the
World Cup was to commence
in 96 days and ‘we are unable to sell
packages without your confirmation that you will supply the event
tickets as you are
obliged to do’; and that Fli-Afrika was
losing business as a result and ‘will suffer a potentially huge
loss of revenue
should the current impasse continue’. The
letter concluded by demanding that SAFA state its ‘position and
intentions
regarding the ticket allocation’, and that it do so
within five days.
[18]
Mr Camaroodeen then consulted an attorney. On 15 March 2010, the
attorney wrote to Mr Sedibe
to demand a written undertaking, within
two days, that SAFA would obtain the necessary tickets from FIFA and
supply them to Fli-Afrika.
[19]
On 18 March 2010, SAFA’s attorney wrote to Mr Camaroodeen. This
letter appears to be a
response to Mr Camaroodeen’s letter of 5
March 2010. The attorney complained that SAFA had tried in vain to
‘obtain
clarity on the obligation you require our client to
fulfil and in terms of what agreement our client is to fulfil this
obligation’.
He asked for a copy of the agreement that
Fli-Afrika relied on.
[20]
Once again, instead of providing the clarity sought by SAFA’s
attorney, Fli-Afrika’s
attorney responded, on 30 March 2010,
with yet more belligerence and no assistance in ending the impasse.
He wished, he said, to
make it ‘abundantly clear’ that
Fli-Afrika was of the view that SAFA was in breach of the SLA. He
stated, however,
that Fli-Afrika had begun to source tickets from
elsewhere, but reserved Fli-Afrika’s rights to claim damages
from SAFA in
due course. Mr Camaroodeen explained in his evidence
that by this stage Fli-Afrika had approached Match for tickets.
[21]
In response, SAFA’s attorney, in a letter dated 13 April 2010,
expressed the view that
‘a formal Joint Venture Agreement’
had to be concluded, that Fli-Afrika, as a registered tour operator
for the World
Cup was entitled to an allocation of tickets (from
Match) and that SAFA would assist it to acquire the tickets it
required.
[22]
Mr Camaroodeen testified that the tickets that Fli-Afrika wished to
obtain from Match were in
addition to the allocation it was entitled
to as a registered tour operator. That allocation was insufficient to
meet the additional
needs created by the joint venture that it had
entered into with SAFA to create and sell packages.
[23]
It appears that while Fli-Afrika and SAFA were exchanging
correspondence, Match became involved
in an effort to resolve the
problem that had arisen between Fli-Afrika and SAFA and which,
judging from the correspondence, was
otherwise not going to be
resolved. What was proposed by Match, in essence, was that Match
would endeavor to supply the tickets
that SAFA was supposed to have
supplied to Fli-Afrika in terms of the SLA, and Fli-Afrika and SAFA
would enter into a settlement
agreement.
[24]
The proposal was encapsulated in a letter dated 15 April 2010,
written by Mr Jaime Byrom, the
executive chairman of Match. It was
addressed to Mr Sedibe and Mr Camaroodeen. It referred to ‘numerous
discussions’
between the parties ‘over the last few
months’ regarding the ticket allocation requested by
Fli-Afrika. It also referred
to the letter of 13 March 2010 written
by SAFA’s attorney.
[25]
Paragraph 2 of the letter, while not completely accurate in one
respect, explained the involvement
of Match in the dispute. It
stated:
‘
There
seems to be an intention by the parties to enter into a formal joint
venture agreement at some time in the future. However,
given the
commencement of the Last Minute Sales Phase today, and the need to
resolve matters before it becomes impossible to satisfy
the ticket
requirements of Fli-Afrika, the parties have requested MATCH to
assist in an effort to resolve this long-standing impasse.’
(The
inaccuracy that I referred to is the statement that Fli-Afrika and
SAFA intended to enter into a joint venture agreement in
the future.
As Mr Camaroodeen pointed out in his evidence, they had, by that
time, already done so. That agreement was the SLA.)
[26]
In paragraph 3, reference was made to a spreadsheet containing
details of tickets that either
had been allocated to Fli-Afrika, were
to be allocated to it or were hopefully to be allocated to it.
Paragraph 4 referred to two
annexures, namely an agreement between
Fli-Afrika and Match ‘which confirms the special terms of
payment that shall apply
to tickets identified in Schedule A’
and an agreement in full and final settlement in respect of the
dispute between Fli-Afrika
and SAFA. (Schedule A contained a list of
5 907 tickets for Fli-Afrika that had already been confirmed.)
[27]
The letter ended with a request to Mr Sedibe and Mr Camaroodeen to
‘review’ the annexures
and, if they had no queries about
them, to return signed copies of the settlement agreement to Mr Byrom
by the following evening.
[28]
Mr Sedibe wrote back to Mr Byrom on the same day enclosing a signed
copy of the settlement agreement.
He undertook to arrange for
Fli-Afrika to sign the agreement before the deadline. Fli-Afrika duly
signed both the agreement with
Match and the settlement agreement
with SAFA.
[29]
The agreement with Match contains a preamble that explains the
circumstances that led to it coming
into existence. It recorded, in
the first place, that Fli-Afrika and SAFA had ‘entered
discussions to establish a joint venture’
in terms of which
Fli-Afrika would sell World Cup travel packages, ‘such packages
consisting of match tickets sourced by
SAFA, and certain other
services including but not limited to accommodation and travel
elements sourced by Fli-Afrika’. It
also recorded that
Fli-Afrika and SAFA wished to ‘conclude and adjust as necessary
the basis of their arrangements’
in respect of their joint
venture and to ‘deal with this by way of a full and final
settlement letter’. The preamble
concluded as follows:
‘
As
a consequence of its adjusted arrangements with SAFA and in view of
the fact that the Last Minute Sales Phase for tickets to
the 2010
FIFA World Cup South Africa commences on 15
th
April 2010, Fli-Afrika wishes to finalise its requirements to source
tickets directly from 2010 World Cup Ticketing without delay
to avoid
the risk of diminishing availability of tickets.’
[30]
The heart of the agreement is contained in clauses 1 and 2. They
provide:
‘
1
MATCH, as the operator of the TOP on behalf of FIFA, will allocate
and supply
to Fli-Afrika the tickets identified at Schedule A to this
agreement and will endeavour to source, allocate and supply
Fli-Afrika
a second tranche of tickets as identified in Schedule B to
this agreement
SUBJECT TO
the
prior fulfilment by Fli-Afrika of the following two conditions:
1.1
Receipt by MATCH of the fully executed Full and Final Settlement
substantially in the form
appearing in Schedule C.
1.2
Receipt by 2010 FIFA World Cup Ticketing of payment by no later than
Wednesday 21
st
April of One Million Five Hundred Thousand
South African Rand in part payment for the tickets identified at
Schedule A and for
the balance due for such tickets on the earlier of
1
st
June or seven days prior to the collection of such
tickets.
2
The allocation of any such tickets to Fli-Afrika shall at all times
be made
strictly subject to Fli-Afrika’s continuing compliance
with all of its obligations pursuant to its appointment as a
Participating
Tour Operator.’
[31]
The settlement agreement between Fli-Afrika and SAFA is described in
the heading to the document
as a ‘FULL AND FINAL SETTLEMENT
AGREEMENT’. Its operative clauses read as follows:
‘
BACKGROUND
A
Fli-Afrika and SAFA have together been engaged in certain discussions
and/or
arrangements which include the provision by SAFA to Fli-Afrika
of match tickets for the 2010 FIFA World Cup South Africa.
B
Fli-Afrika and SAFA wish to confirm by the execution of this full and
final
settlement agreement that no such commitments for the provision
of tickets by SAFA to Fli-Afrika are continuing from the date hereof.
THEREFORE IT IS AGREED AS
FOLLOWS:
‘
1
SAFA hereby confirms that Fli-Afrika has no continuing commitment of
whatever
kind to acquire tickets for the 2010 FIFA World Cup South
Africa from or through SAFA.
2
Fli-Afrika hereby confirms that SAFA has no continuing commitments of
whatever
kind to provide tickets for the 2010 FIFA World Cup South
Africa to Fli-Afrika.
3
The parties therefore release each other from any obligations implied
or
otherwise that may exist in connection with any such commitments.’
The issues
[32]
Fli-Afrika’s case was that SAFA was not only under an
obligation, in terms of the SLA,
to provide Fli-Afrika with tickets,
but that it was also under an obligation, in terms of the SLA, to pay
for the accommodation
and other travel arrangements that Fli-Afrika
had already made and paid for.
[33]
The heart of its claim, and the alleged basis of SAFA’s
obligation to pay Fli-Afrika is
to be found in paragraphs 8 and 9 of
the particulars of claim. They read:
‘
8
On a proper interpretation of clauses 3.2 and 4 of the agreement, the
Plaintiff
would lay out money for all travel arrangements, including
accommodation and would be reimbursed therefor on submission of the
expenditure to the Defendant.
9
Alternatively, it was a tacit term of the agreement that, in
complying with
its obligations in terms of clause 3.2, the Plaintiff
would lay out money for hotel accommodation and would as contemplated
by
clause 4, be reimbursed by the Defendant for the costs of all
travel arrangements.’
[34]
SAFA’s plea to each of these paragraphs is identical. It denied
the content of the paragraphs
and pleaded that the interpretation of
clauses 3.2 and 4 contended for by Fli-Afrika was erroneous.
[35]
In addition, SAFA raised a number of special pleas, including
impossibility of performance and
prescription. All but one these
special pleas can safely be left out of account. The only one I shall
deal with is the special
plea that the settlement agreement, when
properly construed, constituted a ‘mutual
termination/cancellation’ of the
SLA or a waiver on the part of
Fli-Afrika of any right to claim from SAFA.
[36]
Both of the issues that I have identified require an interpretation
of the applicable agreement,
the SLA in the first instance and the
settlement agreement in the second instance. The proper approach to
the interpretation of
written documents, including contracts, has
been set out by this court in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[4]
in which it was held:
‘
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 the
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. Where more than one meaning is possible each possibility
must be weighed in the
light of all these factors. The process is
objective, not subjective. A sensible meaning is to be preferred to
one that leads to
insensible or unbusinesslike results or undermines
the apparent purpose of the document. Judges must be alert to, and
guard against,
the temptation to substitute what they regard as
reasonable, sensible or businesslike for the words actually used. To
do so in
regard to a statute or statutory instrument is to cross the
divide between interpretation and legislation; in a contractual
context
it is to make a contract for the parties other than the one
they in fact made. The “inevitable point of departure is the
language of the provision itself”, read in context and having
regard to the purpose of the provision and the background to
the
preparation and production of the document.’
The
interpretation of the SLA
[37]
Fli-Afrika’s case is that it was obliged, in terms of clauses
3.2 and 4 of the SLA, either
expressly or tacitly, to pay for
accommodation and travel in advance, and SAFA, in turn, was required
to reimburse it for what
it had expended. Whether this is correct
depends upon an interpretation of these clauses within their context.
[38]
Clause 3.1 imposed an obligation on Fli-Afrika to source and supply
2 500 packages per week
on behalf of SAFA, its VIPs and ‘various
international Football Federations’ that were to be referred to
Fli-Afrika
by SAFA. Clause 3.2 defined what those packages comprised
of – accommodation in various host cities, tickets for games
and
transport. In clause 3.3, SAFA undertook to supply the tickets
and to pay Fli-Afrika ‘the balance of any weekly unsold
Packages
in the event that Fli-Afrika is not able to sell 2 500
Packages per week’. Clause 3.4 provided for a process for
payment
and clause 3.5 provided for a fee of R2 000 per hour in
respect of any consulting services provided by Fli-Afrika to SAFA.
Clause 4 provided that Fli-Afrika would be responsible for running
its day-to-day financial and administrative affairs and that,
when it
implemented ‘travel arrangements’ it was to ensure it
billed SAFA which, in turn, would arrange for payment
in terms of its
‘current payment structure’.
[39]
What is clear from my summary of clauses 3 and 4 is that the parties
did not provide expressly
that prior to SAFA supplying tickets,
Fli-Afrika was obliged to expend money, recoverable from SAFA, for
accommodation and other
travel arrangments. That is certainly not
what clause 3.2 said. Fli-Afrika’s primary obligation was to
provide packages,
not to the public in general, but to SAFA, its VIPs
and football governing bodies of SAFA’s choice. It could only
do so once
it had the tickets to which it could then match the
accommodation and transport, thus forming the package. By way of
illustration,
it could only book accommodation once it knew that a
ticket had been given by SAFA to an official of a football governing
body,
for instance, for a particular game to be played at a
particular stadium in a particular city. In other words, it was only
after
a ticket had been supplied that a package could be completed.
[40]
The focus of clause 3 was on packages, and the obligations of the
parties in relation to the
packages. All that clause 3.2 did was to
define the packages. It did not create an obligation for Fli-Afrika,
without knowledge
of the recipients of tickets, to book accommodation
in advance. Clause 4 did no more than provide for payment in respect
of unsold
packages.
[41]
Paragraph 9 of the particulars of claim alleged in the alternative
that it was a tacit term of
the SLA that Fli-Afrika was obliged to
pay for accommodation prior to the tickets being supplied. A
tacit term must be ‘inferred
by the Court from the express
terms of the contract and the surrounding circumstances’.
[5]
[42]
It seems to me that a tacit term to the effect contended for by
Fli-Afrika is not tenable because
the packages were specific to SAFA,
its VIPs and its chosen allies in football governance: an obligation
on the part of Fli-Afrika
to book accommodation prior to receiving
the tickets would place the cart before the horse. I can consequently
see no logical reason
why the unexpressed common intention of the
parties, when they defined what a package was in clause 3.2, should
have been, as the
tacit term was formulated by counsel for
Fli-Afrika, that ‘in the event that Fli-Afrika sourced and paid
for accommodation
in anticipation of SAFA supplying tickets, and SAFA
does not supply the tickets, then SAFA would be obliged to reimburse
Fli-Afrika
for any wasted accommodation’.
[6]
In any event, given the express terms of the agreement that I have
alluded to, there plainly can be no room for importing the alleged
tacit term asserted by Fli-Afrika.
[7]
[43]
I conclude that the interpretation of clause 3.2 and 4 of the SLA
contended for by Fli-Afrika
cannot be supported. Fli-Afrika has
consequently not established a basis, that can be sourced either
expressly or tacitly in the
SLA, for the recovery of money expended
by it in anticipation of SAFA supplying tickets. No such obligation
was imposed upon SAFA
by the SLA properly construed. This conclusion
is dispositive of the appeal against Fli-Afrika. For the sake of
completeness, however,
I shall also address the effect of the
settlement agreement.
The
interpretation of the settlement agreement
[44]
SAFA pleaded, inter alia, that the settlement agreement, being either
a ‘mutual termination/cancellation’
of the SLA, a waiver
of any claim that Fli-Afrika may have had in terms of it or a
variation of it, had the effect of ‘barring’
Fli-Afrika
‘from claiming any payment of any sum of money arising from’
the SLA. In its replication, Fli-Afrika pleaded
that the settlement
agreement, ‘on a proper interpretation’, only
extinguished obligations that arose after the date
on which it was
signed, leaving unaffected those obligations that had arisen prior to
the date on which it had been signed.
[45]
I have sketched, in some detail, the background to and context in
which the settlement agreement
came to be concluded. That background
and context is important for purposes of interpreting the agreement
and determining its scope
and purpose.
[46]
As important, however, are the words used by the parties. The
agreement described itself as an
agreement in full and final
settlement. The dispute that it settled related to SAFA’s
obligation in terms of the SLA to provide
tickets. It put an end to
that obligation and Fli-Afrika’s obligation to acquire tickets
from SAFA. Clause 3 then provided:
‘
The
parties therefore release each other from any obligations implied or
otherwise that may exist in connection with any such commitments.’
[47]
There can be no doubt that the settlement agreement was concluded as
a result of SAFA’s
inability to provide tickets and the
commitments that Fli-Afrika had undertaken when it booked
accommodation in advance of obtaining
the tickets. The driving force
behind the settlement agreement was, without doubt, Match which had
an interest, as FIFA’s
agent concerned specifically with
administering the distribution of tickets, to ensure that the World
Cup ran smoothly and efficiently.
It wanted to avoid what had the
potential of being a most destructive and unseemly dispute between
the host of the World Cup and
one of its long-term commercial
partners.
[48]
In order to avoid this result, Match stepped into the breach to
supply Fli-Afrika with tickets.
It imposed a condition on Fli-Afrika:
if it wanted to obtain tickets, Fli-Afrika had to settle its dispute
with SAFA. When Fli-Afrika
entered into the agreement with Match, it
agreed to that condition and entered into the settlement agreement on
the same day. The
agreement between Match and Fli-Afrika, on the one
hand, and SAFA and Fli-Afrika, on the other, are complementary in the
sense
that the conclusion of a settlement agreement was a condition
of Fli-Afrika being able to obtain tickets from Match.
[49]
The effect of Fli-Afrika’s agreement with Match was that
Fli-Afrika was able to obtain
tickets – insufficient in number
compared to its accommodation commitments, as it happened – so
that it could make
packages that it could sell, not to the persons
that SAFA had undertaken to refer to it in terms of the SLA, but to
the public
in general. In this sense, the agreement contemplated
Match more or less stepping into SAFA’s shoes so that
Fli-Afrika could
complete what it had started. The price it had to
pay for this was to agree to the condition that it had to settle its
dispute
with SAFA. By concluding the settlement agreement, it
indicated its willingness to do so – to abandon the SLA and
‘any
obligations implied or otherwise’ that may have
existed. The agreement between Match and Fli-Afrika was subject to a
suspensive
condition that Fli-Afrika would conclude a ‘fully
executed Full and Final Settlement agreement’ with SAFA,
substantially
in the form proposed by Match. There clearly could be
no agreement between Match and Fli-Afrika absent this settlement
agreement.
[50]
The settlement agreement identified the bone of contention between
the parties to the SLA –
SAFA’s inability to provide the
tickets it had undertaken to supply – and then settled the
dispute with three inter-locking
clauses: first, it was agreed that
SAFA no longer had to supply tickets; secondly, it was agreed that
Fli-Afrika was no longer
obliged to take tickets from SAFA; and
thirdly, it was agreed that each party released the other from ‘any
obligations’
in connection with ‘any such commitments’.
When the words used in the settlement agreement are construed
within
the context I have outlined, and bearing in mind its purpose,
it is clear that the agreement was, as it proclaimed, in full and
final settlement of all obligations that had arisen, including any
claims for damages that may have arisen by the time it was concluded.
[51]
Given the history of the dispute between SAFA and Fli-Afrika, which I
have sketched in some detail,
it plainly would not have made any
sense for them to conclude a settlement agreement that only purported
to regulate any future
relationship between them. The settlement
agreement expressly recorded that neither Fli-Afrika nor SAFA had any
‘continuing
commitment of whatever kind’ to acquire
tickets, in the case of Fli-Afrika, or provide tickets, in the case
of SAFA. That
being so, it is difficult to understand what future
contractual obligations remained that fell to be regulated by the
settlement
agreement. And, as I demonstrated, the tickets were
integral to the packages. If that primary reciprocal obligation no
longer remained,
it ought to follow that any subsidiary obligations
could likewise no longer be enforced.
Conclusion
[52]
In summary, the SLA did not impose an obligation on Fli-Afrika to
book and to pay for accommodation
prior to obtaining tickets from
SAFA, and no obligation was imposed by the SLA on SAFA to pay
Fli-Afrika for the accommodation
that it had booked. Secondly, even
if such a set of obligations had been created by the SLA, they were
all extinguished by the
settlement agreement which was concluded by
SAFA and Fli-Afrika, on the insistence of Match. The result is that
the appeal must
succeed.
[53]
I make the following order:
1 The appeal
is upheld with costs, including the costs of two counsel.
2 The
order of the court below is set aside and replaced with the following
order:
‘
The appeal is
dismissed with costs, including the costs of two counsel.’
___________________
C Plasket
Judge
of Appeal
APPEARANCES
For the
appellant: N
Arendse SC and S Fergus
Instructed by:
Dikotope Attorneys,
Benoni
Matsepes
Inc, Bloemfontein
For the
respondent: A
Gautschi SC and R G Cohen
Instructed by:
Glynnis Cohen Attorneys,
Johannesburg
Lovius
Block, Bloemfontein
[1]
On
SAFA generally, and on its role in hosting the 2010 World Cup, see
M
& G Media Ltd & others v 2010 FIFA World Cup Organising
Committee South Africa Ltd & another
2011 (5) SA 163
(GSJ) paras 84-89.
[2]
On
FIFA generally, and its role in relation to World Cups, see
M
& G Media Ltd & others v 2010 FIFA World Cup Organising
Committee South Africa Ltd & another
(note 1) paras 76-83. See too Plasket ‘The Fundamental
Principles of Justice and Legal Vacuums: the Regulatory Powers of
National Sporting Bodies’
(2016) 133
SALJ
569
at 571-572.
[3]
Match
is Match Event Services (Pty) Ltd, FIFA’s agent in
administering the Tour Operator Program, or TOP. In this capacity
it
allocated and supplied tickets for games to participating tour
operators, such as Fli-Afrika.
[4]
Natal
Joint
Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA) para 18.
[5]
Alfred
McAlpine & Sons (Pty) Ltd v Transvaal Provincial Administration
1974
(3) SA 506
(A) at 531H-532A.
[6]
Reliance
on the tacit term was initially abandoned but was revived during the
hearing of this appeal. I have quoted the term as
counsel for
Fli-Afrika formulated it during his argument.
[7]
Ashcor
Secunda (Pty) Ltd v Sasol Synthetic Fuels (Pty) Ltd
[2011]
ZASCA 158
para 13-14.