THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 1186 /2023
In the matter between:
EKURHULENI METROPOLITAN MUNICIPALITY APPLICAN T
and
BUSINESS CONNEXION (PTY) LTD RESPONDENT
Neutral citation: Ekurhuleni Metropolitan Municipality v Business Connexion (Pty)
Ltd (1186 /2023) [202 5] ZASCA 41 (10 April 2025 )
Coram: NICHOLLS , SMITH , KEIGHTLEY and BAARTMAN JJA and
MODIBA AJA
Heard: 17 March 2025
Delivered : This judgment was handed down electronically by circulation to
the parties’ representatives by email, publication on the Supreme
Court of Appeal website and released to SAFLII. The date and
time for hand -down of the judgment is deemed to be 11h00 on 10
April 2025
Summary : Section 17(2) (f) of the Superior Courts Act 10 of 2013 –
contractual claim – software and licences – whether there was
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delivery of the licence s – budget cuts reason for cancellation – no
grave injustice – matter struck from the roll.
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ORDER
On appeal from: Gauteng Division of the High Court, Johannesburg (Dlamini J sitting
as court of first instance):
The matter is struck from the roll and the applicant is to pay the costs of the
reconsideration including the costs of two counsel .
JUDGMENT
Nicholls JA (Smith, Keightley and Baartman JJA and Modiba AJA concurring):
[1] This matter comes before th is Court pursuant to an application for
reconsideration to the President in terms of s 17(2) (f) of the Superior Courts Act 10 of
2013 (the Act). On 31 January 2023 , the Gauteng Division of the High Court,
Johannesburg (the high court) found that there was a valid and binding agreement
between the Ekurhuleni Metropolitan Municipality (the Municipality) , the applicant, and
the respondent , Business Connexion (Pty) Ltd (BCX) . It ordered the Municipality to
pay to BCX the sum of R85 479 535.2 6 plus interest for the purchase of software
licences and related services. The high court refused an application for leave to appeal
by the Municipality , as did two judges of this Court on petition.
[2] The first consideration is whether this Court has jurisdiction to hear the appeal.
The power conferred on the President in terms of s 17(2) (f) is to determine whether
there are exceptional circumstances that warrant a reconsideration of the matter.1 If
1 Section 17(2) (f) of the Superior Courts Act 10 of 2013, was amended in Government Gazette No.
50430, with effect from 3 April 2024, and reads as follows:
‘…
(f) The decision of the majority of the judges considering an application referred to in paragraph (b), or
the decision of the court, as the case may be, to grant or refuse the application shall be final: Provided
that the President of the Supreme Court of Appeal may, in circumstances where a grave failure of justice
would otherwise result or the administration of justice may be brought into disrepute, whether of his or
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the President exercises her discretion in favour of the applicant, the matter is then
referred to five judges. This Court has held in Motsoeneng v South African
Broadcasting Corporation Soc Ltd and Others ,2 and more recently in Bidvest Protea
Coin Security (Pty) Ltd v Mabena ,3 that it is the court to which a referral is made in
terms of s 17(2) (f) that must decide whether there are exceptional circumstances. Only
if exceptional circumstances are established does this Court have jurisdiction.4
[3] Although there is a reluctance to define what exceptional circumstances entail
as each case must be considered on its own merits, it is generally accepted that it
must encompass something out of the ordinary. This Court in Avnit v First Rand Bank,5
emphasised that what is not contemplated is a re -hashing of old arguments ‘unless it
is strongly arguable that justice will be denied unless the possibility of an appeal can
be pursued ’,6 or there must be a matter of some importance that has been overlooked.
[4] The issues in this application for reconsideration do not raise any important or
disputed question s of law. The disputes are largely factual. The thrust of the
Municipality’s application is essentially that there was a factual basis to claim non -
performance of the contract which warrants a reconsideration. It remains to determine
whether there is a risk of a grave failure of justice , which this Court is obliged to
remedy.
[5] It is not disputed that the Municipality entered into an agreement with BCX for
the purchase of software and licences for the sum of R85 479 535.26. The question is
whether there was non -performance of the contract by BCX , which absolves the
Municipality from making payment. T he Municipality relies primarily on two defences .
The first is that BCX failed to show that there was delivery of the said licences and the
software, which it was obliged to do in order to succeed in its claim. The second is the
timing of the delivery , which the Municipality contends should have taken place only
her own accord or on application filed within one month of the decision, refer the decision to the court
for reconsideration and, if necessary, variation. ’
2 Motsoeneng v South African Broadcasting Corporation Soc Ltd and Others [2024] ZASCA 80 ; 2024
JDR 2195 (SCA) para 14.
3 Bidvest Protea Coin Security (Pty) Ltd v Mabena (Bidvest) [2025] ZASCA 23 ; 2025 JDR 1325 (SCA)
para 12.
4 Ibid para 12.
5 Avnit v First Rand Bank [2014] ZASCA 132 ; 2014 JDR 2014 (SCA) paras 6 and 7 .
6 Ibid para 6 .
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once its infrastructure had been upgrade d to a more stable environment. As such t he
Municipality contends that the software was to be purchased on an ‘as-and-when -
required’ basis.
[6] In March 2020 , Oracle Corporation (South Africa) (Pty) Ltd (Oracle) assessed
the Municipality’s information system and advised that it needed to upgrade its
infrastructure. As a result , in May 2020 the Municipality embarked on a process to
establish a panel of accredited service providers to renew the existing software
licences and to procure new software licences from Oracle. BCX was appointed by
the Municipality to its panel of service providers .
[7] On 5 August 2020 , the Municipality sent a Request for Quotation (RFQ) to
each of the Oracle partners on the list, including BCX . The heading of the letter largely
mirrors that of the letter of appointment and stipulates that it is ‘…for the acquisition of
additional software licences, software licence renewal, software maintenance,
implementations and enhancements for Oracle Software that is in use from date of
award until 30 June 2023 ’. BCX‘s bid was successful .
[8] On 27 August 2020 the Municipality sent the agreement to be signed by BCX.
This was ti tled, ‘ICT Instruction to Perform Work ’ (IPW) . Once again , the heading is
identical to the RFQ. The licence specification s and prices are set out with a total sum
provided for in the amount of R85 479 535.2 6. The IPW was followed by a letter from
the Municipality to Oracle SA confirming the ‘execution’ of the agreement with BCX
and setting out the Oracle products to be purchased. Believing that they had been
awarded the tender, on 28 August 2020, BCX procured the specified licences and
made payment. On 1 September 2020 , Oracle sent a welcome letter to the
Municipality ‘C/O Business Connexion (Pty) Ltd’ confirming the purchase and the
availability of the licences , as well as technical support services. The letter was
emailed to Ms Musa Tleane (Ms Tleane) at BCX and to Mr Peter Paulos Moloko
Monye pao (Mr Monyepao) at the Municipality. Mr Monyep ao is the deponent to the
Municipality’s answering affidavit.
[9] On 23 September 2020 , Ms Matlhodi Senyatsi from the Municipality sent an
email to Ms Tleane at BCX stating that they ‘would like to place the order for
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procurement of additional licences on hold, while the City determines if the modules
intended to be used by these licences will be required going forward’. M s Tleane
responded that BCX had ordered and procured the licences as per the Municipality’s
instruction of 27 August 2020. It was therefore impossible to put t he procurement on
hold. A couple of days later , on 25 September 2020, Mr Monyepao sent an email
stating that due to budget cuts , the Municipality was unable ‘to honour the order for
additional licences ’ and that they had not received delivery of the licences. They would ,
however , proceed with the procurement of the Taleo and compliance licences which
is the first line item on the IPW. Ms Tleane responded that the licences were emailed
to Mr Monyepao between 29 and 30 August 2020 , consist ing of the welcome pack
from Oracle with all the entitlements attached to the software, as per the IPW.
[10] On 29 October 2020 , the Municipality sent a letter to BCX in the following terms
(letter of cancellation):
‘SUBJECT: REQUEST FOR CANCELLATION OF ORDER
City of Ekurhuleni placed an order with BCX on 27 August 2020 for procurement of additional
Oracle software, which includes acquisition of Taleo subscription and technical licen ces to
allow migration of software licences to a new environment and cater for the expansion of
additional modules. Refer to the attached Annexure .
The City hereby request s for cancellation of the order, the only licen ce which the City would
like [to] proceed with is the acquisition of the Taleo Licences. Due to the Covid -19 pandemic,
the City has been struggling with revenue collection and as a result, budgets have been
drastically cut.
Departments have been instructed to reprioritise the maintenance of existing solutions. The
City has also been struggling with the successful implementation of these Oracle Modules
since 2017; despite engaging the Original Equipment Manufacturer (OEM) .’
[11] BCX responded in a letter dated 27 January 2021 , setting out how Oracle
processed the order from BCX and issued an electronic entitlement copy to the
Municipality via the email address of Mr Monyepao. The letter confirmed that the order
was non -cancellable, BCX had paid for the licences and it would be impossible to
reverse the transaction . It was noted that ‘ …the proposed cancellation is of a
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commercial budget nature’ and BCX offered to come to some workable payment
arrangements. When no agreement could be reached, BCX launched th is application
on 14 October 2021.
[12] The high court rejected the Municipality’s defences. Firstly, it rejected the
argument that Mr Benjamin Strydom , the deponent to BCX’s founding and replying
affidavits, had no personal knowledge of the matter. It held that as the man aging
executive of BCX to whom all Oracle units report ed, he had sufficient knowledge of
the matter . Secondly, the high court found that there was ‘no legal basis ’ for the
Municipality’s contention that the licences were not delivered . On the facts , the keys
were made available for utilisation by the Municipality on 28 August 2020. Moreover ,
said the high court, the Municipality did not deny it received the Taleo licences which
were delivered at the same time. It ha d tendered to pay R6 933 948 in respect of the
Taleo licences on receipt of a proper invoice. Finally, the high court did not accept that
it was a tacit term of the agreement that the licences were not require d immediately
but at some future date when the Municipality had migrated from an outdated, unstable
and unsupported IBM environment to a more stable Huawei environment .
[13] As indicated , in the application for reconsideration , too, the primary focus was
the non -delivery of the licences and what was referred to as the timing of the delivery.
In respect of the latter , the Municipality sought to bolster its argument that the licences
were not to be delivered until the upgrades had taken place, by referring to paragraph
2 of the RFQ , which provides as follows:
‘Acquisition of additional software licences
The department intends to migrate the current Oracle solution to a more stable and supported
Huawei environment . …The service providers will be requested to provide a quotation to
procure additional infrastructure licences to cater for this migration .’
[14] This, said the Municipality, shows that the intention to acquire the licences at
some future date , rather than immediately , was expressly contemplated in the RFQ. It
is common cause that a reques t for a ‘service quotation’ was never forthcoming from
the Municipality . In any event, t his interpretation is at odds with the language employed
in the IPW and the confirmation of execution letter. There is no express or implied term
that the appointed service provider was obliged to ascertain the Municipality’s licence
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needs prior to procurement . Furthermore, the IPW did not explicitly state that the Taleo
licences would be required immediately, while the ot hers would not be . The IPW in its
terms presents one order for all the licences listed therein.
[15] If it were indeed the intention of the parties that the contract would be executed
as and when certain upgrades were made, this would have been clearly and
unambiguously stipulated in the agreement. Nor would the tender office of the
Municipality have written to confirm the rates for 12 months after approval if it had not
anticipated that the procurement would be within the year. In the email exchange
between the parties, at no point did t he Municipality positively assert that the
agreement between the part ies was to procure the licences as and when required.
Significantly this is not one of the grounds for the purported cancellation of the
agreement. The high court was quite correct in dismissing this defence.
[16] On the question of non -delivery, the Municipality contends that BCX did not
provide proof that it had provided the licences. For this it relies on the fact that the
welcome letter was sent by Oracle to the Municipality ‘C/O BCX ’. This is of little
moment , the lic ences were delivered by email to Mr Monyepao, as was confirmed in
an email to him almost four weeks later. Delivery by email to Mr Monyepao was also
confirmed by Mr Anees Mayet who was employed by Oracle.
[17] Mr Monyepao does not directly deny receiving the email with the licences but
rather puts BCX to the proof thereof. As this Court has re -iterated on numerous
occasions, a genuine dispute of fact only exists where the party who raises the dispute
seriously and unambiguously addresses the disputed facts. A bare denial is only
sufficient where there is no other way open to the disputing party.7 This is not such a
case. The Municipality set out no details as to what steps it took to confirm that the
key codes did not grant it access to the licences. Nor is it explained how the Taleo
licences, which it was conceded were made available on the same basis, were
accessible on receipt of the welcome letter but the remaining licences were not.
7 Wightman t/a JW Construction v Headfour (Pty) Ltd and Another [2008] ZASCA 6; [2008] 2 All SA
512 (SCA); 2008(3) SA 371 (SCA) paras 13 and 14 .
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[18] It is the letter of cancellation that sets out in the clearest terms the reason for
the Municipality’s refusal to pay. Nowhere is the non -delivery of the licences
mentioned, or that the common understanding was that the licences would only be
require d once certain upgrades were complete d. The sole reason provided is that the
Municipality did not have the money to pay the purchase price because their revenue
had been drastically reduced due to Covid -19. It was conceded by the Municipality in
argument that the reason it did not want the licences was because it was unable to
pay for them.
[19] Inability to pay for a contract freely and voluntarily entered into is no defence in
these circumstances. It is undisputed that BCX procured the licences and paid for
them on the instruction of the Municipality. BCX will be out of pocket to the tune of R85
479 535.26 should the appeal succeed. The high court cannot be faulted for dismissing
both of these defences .
[20] The judgment of the high court led to no grave injustice and did not bring the
administration of justice into disrepute . Consequently, given also that I have found that
there is no disputed question of law that arises for consideration , there are no
exceptional circumstances that warrant our reconsideration of the decision of this
Court to decline leave to appeal. This matter accordingly does not engage the
jurisdiction of this Court.
[21] The following order is made:
The matter is struck from the roll and the applicant is to pay the costs of the
reconsideration including the costs of two counsel.
C E HEATON NICHOLLS
JUDGE OF APPEAL
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Appearances
For the applicant : G I Hulley SC (with N Strathern)
Instructed by: Du Plessis, De Heus Van Wyk and
Chiba Attorneys , Benoni
Symington De Kok Attorneys, Bloemfontein
For the respondent: M S Baloyi SC (with M Phukubje)
Instructed by: Motsoeneng Bill Attorneys Inc , Sandton
Honey Attorneys , Bloemfontein.