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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 2024 -032979
In the matter between:
CITY OF TSHWANE METROPOLITAN MUNICIPALITY Plaintiff/Respondent
and
NAMADZAVHO CALIFORNIA PHANYANE First Defendant
STEPHENS NOTOANE Second Defendant
FRANCOIS PIERRE COETZEE Third Defendant/Excipient
FAIEK ALEXANDER Fourth Defendant
(1) Reportable: No
(2) Of interest to other judges: No
(3) Revised: Yes
Date: 30 May 2025
This judgment was handed down electronically by circulation to the parties and/or their
legal representatives by email and by being uploaded onto CaseLines. The hand -down
date is deemed to be 30 May 2029.
___________________________________________________ ________________
JUDGMENT
___________________________________________________________________
DU PREEZ, AJ
INTRODUCTION
1. The plaintiff sued the defendants, among other things, for a declaratory order
that the defendants breached section 32 of the Municipal Finance
Management Act [the main claim ] and their respective employment contracts
[the alternative claim ], and payment of R21,645,090.00 for irregular
expenditure.
2. The third defen dant excepted to the alternative claim under Rule 23(1) on the
basis that the plaintiff’s particulars of claim lack averments necessary to
sustain a cause of acti on.
THE ALLEGATIONS IN THE PARTICULARS OF CLAIM REGARDING THE
PLAINTIFF’S MAIN CLAIM
3. In the particulars of claim, the plaintiff bases its main claim on the defendants’
breach of section 78 (read with section 32) of the Municipal Finance
Management Act 56 of 2003 [ the MFMA ] by failing to take all reasonable steps
to prevent irregular expenditure as defined in the MFMA and the damages in
the amount of R21,645,000.00 as a result thereof .
4. The plaintiff alleges , among other things, that:
4.1 The defendants, who were member s of the Bid Evaluation
Committee [ the B EC] that evaluated Tender U[...] [the tender ], failed
to fulfil their function and duty properly by:
4.1.1 Not excluding the winning bidder by disqualification for
failure to meet the functionality test;
4.1.2 Not complying with the requirements of the Broad -Based
Black Economic Empowerment Act 53 of 2003 ;
4.1.3 Not enforcing the requirements of the tender document;
and
4.1.4 Failing to evaluate the bid under the specifications for a
specific procurement under regulation 28 of the Municipal
Supply Chain Management Regulations and
subparagraph 8.8 of the Supply Chain Management Policy
[the defendants’ conduct ].
4.2 The defendants breached section 78 (read with section 32) of the
MFMA because they failed to take all reasonable steps t o prevent the
resultant irregular expenditure ;
4.3 The Auditor General determined the irregular expenditure to be
R21,645,0 00.00; and
4.4 The plaintiff thus suffered “harm” with the financial consequences
befalling the plaintiff.
5. The third defendant did not except to the plaintiff’s main claim.
THE ALLEGATIONS IN THE PARTICULARS OF CLAIM REGARDING THE
PLAINTIFF’S ALTERNATIVE CLAIM
6. The plaintiff bases its alternative claim on the following allegations:
6.1 The plaintiff and the defendants (respectively and each re presenting
himself, separately) concluded a contract of employment [the
contract ];
6.2 The material express, alternatively implied, further alternatively tacit
terms of the contract were:
6.2.1 The defendants would be employed within the plaintiff as
senior employees and within management;
6.2.2 The defendants would serve the plaintiff, as and when,
within its procurement processes and, in particular, serve
as members of the BEC;
6.2.3 The defendants would acquaint themselves with all
processes relating to the plaintiff’ s procurement processes
and execute their duties and functions in accordance with
law and the requirements of the plaintiff’s Supply Chain
Management Policy;
6.2.4 The defendants would ensure and maintain a culture of
fairness, equitability, competitiveness, cos t-effectiveness,
and transparency;
6.2.5 The defendants would evaluate the bids in accordance
with the specifications for a specific procurement;
6.2.6 The defendants would exercise due care in respect of
evaluating the bids in accordance with the specification for
the specific procurement; and
6.2.7 The plaintiff would afford training and remuneration to the
defendants.
6.3 The plaintiff has duly complied with its obligations under the contract.
6.4 The defendant, in breach of their obligations under the contract,
failed to:
6.4.1 Ensure that the procurement process under the tender
was fair, transparent, equitable, and competitive because
the defendants failed to disqualify the winning bidder when
they ought to have;
6.4.2 Awarded and allocated B -BBEE points when the winning
bidder did not mee t the requirements of the tender , in that
the winning bidder is an unincorporated joint venture and
ought to have submitted a consolidated B -BBEE
scorecard, the defendants accepted and allocated B -
BBEE points on an individual basis;
6.4.3 The defendants awarded the winning bidder functionality
points as follows:
(1) In respect of the criterion, proof of experience in the
supply, installation, testing and commissioning of
Meter Data Management System, bidders were to
submit authentic letters of recen t successfully
completed projects with contact details, and a
maximum of 25 points were to be allocated;
(2) Whereas the defendants scored the bidder a
maximum of 25 points even though the winning
bidder provided only two letters which complied with
the criteria and consequentl y, ought to have been
scored no more than 15 points;
(3) In respect of the criterion, proof of experience in
supply, installation, testing, and commissioning of
Head End System and requirement to submit
authentic signed letters with a maximum of 20
available for allocation, the winning bidder was
appropriately scored by the defendants and allocated
the full complement of 20 points;
(4) In respect of the criterion of proof of experience in
supply, installation, testing, and commissioning of the
Online Ven ding System, the tender document
required the sub mission of three authentic, signed
letters of a recently successfully completed project
with contact details for a maximum points tally of 25;
(5) Whereas the defendants scored the winning bidder
25 points despi te the winning bidder submitting only
one authentic signed letter (alternatively, reference
letter) and thus should only have obtained an
allocation of no more than five points;
(6) In respect of the criterion for the Team Leader with
experience in the development of the Meter Data
management System, the Head End System and the
Online Vending System, bidders were required to
submit a curriculum vitae with relevant ICT
qualification, together with reference letters of
successfully completed projects for a maximum
points tally of 15 points;
(7) Whereas the defendants scored the winning bidder
the full points complement of 15 points despite the
winning bidder’s curriculum vitae showing the staff
member with only a BSc Industrial Engineering
without any relevant ICT qualification as required per
the functionality evaluation criterion, and further, the
winning bidder failed to provide any reference letter
of successfully completed projects and must have
been a score of zero;
(8) In respect of the criterion for Team Mem bers with
experience in the development of the Meter Data
Management System, the Head End System and the
Online Vending System, bidders were required to
submit a curriculum vitae with relevant ICT
qualification and four reference letters of successfully
projects with a maximum points tally of 15 points to
be allocated;
(9) Whereas the winning bidder submitted two
curriculum vitae for a trainer with a software
engineering qualification and a solution architect with
a BSc in Computer and Software Engineering, and
while these curriculum vitae did have the relevant
qualification, no accompanying reference letters were
submitted and for that reason, the bidder ought to
have been allocated zero points;
(10) In the result, the defendants properly fulfilled their
function an d duty; they would have scored the
winning bidder no more than 40 points instead of the
100 points they scored and allocated to the winning
bidder; and
(11) Consequently, the winning bidder ought to have
been excluded by disqualification for failure to meet
the functionality test.
6.4.4 The above scoring was in breach of the defendants’ duties
and obligations towards the plaintiff under their contract.
6.5 Due to this breach, the plaintiff has suffered damages in that its
process received a negative report and/or audit f inding from the
Auditor General, South Africa, in which the procurement was found to
be irregular and the resultant expenditure was irregular .
6.6 The defendants knew, alternatively ought to have known, that failing
to carry out their duties in line with the c ontract's requirements would
affect the plaintiff’s outlook within government and , in particular ,
result in negative audit findings .
6.7 The defendants knew, alternatively ought to have known, that
negative audit findings by the Auditor -General South Africa ha ve
financial implications on and in relation to the plaintiff’s budget and
future allocations.
6.8 As a result, the plaintiff suffered irregular expenditures of
R21,646,000.00, and the defendants are jointly and severally liable
therefor , the one paying and th e others being absolved.
6.9 Despite demand, alternatively, the combined summons constituting
demand, the defendants have failed to make payment of the irregular
expenditure.
THE RELIEF CLAIMED BY THE PLAINTIFF
7. The plaintiff then claims judgment against the defendants, jointly and severally
(in respect of money judgment, the one paying the others being absolved) for
an order:
7.1 Declaring that the defendants breached the MFMA and the plaintiff’s
procurement processes;
7.2 Declaring that the plaintiff is entitled to recover a penalty from the
defendants under section 32 of the MFMA;
7.3 Declaring that the defendants are in breach of the MFMA and their
respective employment contracts and ordered to pay
R21,1645,0 00.00 in respect of the irregular ex penditure;
7.4 Directing, to the extent that the defendants fail to make full and timely
payment before their retirement and/or resignation (as the case may
be), the plaintiff is entitled and authorised to approach and endorse
the defendants’ pension/provident fund accordingly; and
7.5 Ancillary relief .
THE THIRD DEFENDANT’S EXCEPTION
8. The third defendant’s exception is based on :
8.1 The plaintiff’s alternative claim not complying with Rules 18(4),
18(10), and 20(2) [‘the first exception ’]; and
8.2 The plaintiff’s failur e to allege, insofar as the alternative claim is
concerned, that it had suffered “ any loss or damage because of the
deliberate or negligent unlawful actions ” of any of the defendants,
including the third defendant [‘the second exception ’].
9. The third defend ant alleges that he is thus prejudiced because:
9.1 The alternative claim does not contain a clear and concise statement
of the material facts upon which the plaintiff relies for such claim, with
sufficient particularity to enable the third defendant to reply thereto;
and does not set out the damages purpor tedly claimed by the plaintiff
in a manner that enables the third defendant to assess the quantum
thereof reasonably;
9.2 The facts stated by the plaintiff in the alternative claim do not support
the conclusion of law which the plaintiff seeks to deduce from s uch
facts; and
9.3 The third defendant is, as far as the alternative claim is concerned,
unable to determine what case it is called upon to meet.
10. The third defendant seeks an order that the exception be upheld with costs
and the plaintiff’s alternative be set aside.
DISCUSSION
GENERAL REMARKS
11. When a plaintiff pleads a cause of action, the particulars of claim must contain
every fact which would be necessary for the plaintiff to prove, if traversed, to
support the plaintiff’s right to judgment. It does not compr ise every piece of
evidence needed to prove each fact, but every fact necessary to be proved.1
12. On a proper reading of the amended particulars of claim, it appears that the
plaintiff’s alternative claim is based on a breach of contract, as may be
gleaned f rom the following:
12.1 It bears the heading “ ALTERNATIVELY – BREACH OF CONTRACT ”;
and
12.2 The plaintiff alleges that:
12.2.1 The conclusion of employment contracts with the
defendant and their terms and conditions;
12.2.2 The plaintiff complied with its obligations under the
employment contracts;
12.2.3 The defendants breached their employment contracts for
the reasons stated above; and
12.2.4 The plaintiff suffered damages because the defendants
breached their employment contracts.
1 Living Hands (Pty) Limited and Another v Ditz and Others 2013 (2) SA 368 (GSJ) [15]; Merb
(Pty) Ltd and Others v Matthews and Others (2020/15069) [2021] ZAGPJHC 693 (16 November
2021) [12].
13. A party wishing to claim damages resulting from a breach must allege and
prove:2
13.1 The contract;
13.2 The breach of the contract;
13.3 Damages;
13.4 A causal link between the breach and damages; and
13.5 That the loss was not too remote, i.e., general or special damages.
14. As the plaintiff’s claim is based on alternative causes , the third defendant is
entitled to except to one or more of the alternatives.3
15. The third defendant has excepted to the plaintiff’s alternative claim on the
basis that it lacks averments necessary to sustain a cause of action, and
accordingly, he must:
15.1 Confine his complaint to the stated grounds of his exception;4 and
15.2 Show that upon every interpretation th e alternative claim can
reasonably bear, no cause of action is disclosed.5
THE FIRST EXCEPTION
16. The third defendant’s first exception is premised on the mere allegation that
the alternative claim does not comply with the provisions of Rule s 18(4) ,
18(10), and 20(2) of the Uniform Rules of Court. He does not state in which
respect the alternative claim does not comply with the provisions of these
Rules.
2 Alfred McAlpi ne & Son (Pty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (T)
348; Combined Business Solutions CC v Courier & Freight Group (Pty) Ltd t/a XPS [2011] 1 All SA 10
(SCA); Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd 1977 (3) SA 6 70 (A) 687.
3 Du Preez v Boetsap Stores (Pty) Ltd 1978 (2) SA 177 (NC) 181F.
4 Feldman NO v EMI MusicSA (Pty) Ltd; Feldman NO v EMI Music Publishing S A (Pty) Ltd
2010 (1) (SCA) 5A.
5 Trustees for the time being of the Burmilla Trust v President of the RSA [2022] 2 All SA 412
(SCA) [7].
17. During argument, the third defendant’s counsel argued that :
17.1 The consequences of the plaintiff’s non -compliance are, among
others, that the plaintiff does not allege a causal link between the
breach of contract and the damages allegedly suffered .
17.2 The plaintiff claims damages in an amount equal to the amount of the
penalty imposed by the Auditor -General (and relied on in the main
claim).
17.3 This penalty does not necessarily equate to the contractual damages
suffered by the plaintiff , and the plaintiff had to plead something more
to link the penalty amount to the breach of contract [‘the argued
exception ’].
18. The argued exception is not one of the grounds upon which the third
defendant’s first exception is based. The third defendant is bound by the
grounds stated in the first exception, namely that the mere non -compliance
with Rule 18(4), 18(10), and 20(2) renders the alternative claim excipiable . He
cannot , in argument , expand the grounds of the first exception. He should
have expressly stated the argued e xception to have relied on it as a ground
for his first exception.
19. Even if the court is wrong in this regard, there is an alternative interpretation,
namely that the penalty indeed constitutes the plaintiff’s contractual damages.
The plaintiff may prove these damages at trial.
20. Although the alternative claim can be read in two or more ways because of the
omission of a necessary allegation, one of these readings discloses a cause
of action, and the pleading is thus not excipiable.6
21. The third defendan t’s first exception stands to be dismissed with costs.
THE SECOND EXCEPTION
6 Fairlands (Pty) Ltd v I nter-Continental Motors (Pty) Ltd 1972 (2) SA 270 (A).
22. The third defendant’s second exception is based on t he plaintiff’s failure to
allege, insofar as the alternative claim is concerned, that it had suffered “ any
loss or damage becaus e of the deliberate or negligent unlawful actions ” of any
of the defendants, including the third defendant .
23. A contract gives rise to obligations, which means the parties to the contract
are subject to duties which they must comply with.7
24. Contractual auton omy must be respected. When parties conclude a contract,
their rights and obligations must be found in the contract , subject to the
obligations imposed and rights created by law .8
25. A breach of contract occurs when a party to a contract fails to fulfil a
contractual obligation, whereas delict relates to other forms of wrongful
conduct.9
26. Although s ome commentators claim that breach of contract entails wrongful
conduct and is a delict,10 if a breach of contract were only a particular form of
delict , the requirements for breach of contract and delict would have been the
same.
27. A plaintiff claiming damages based on a breach of contract does not have to
allege fault, i.e., the defendant acted intentionally or negligently. However, a
party claiming damag es because of a delict must allege and prove fault.
28. The conduct that constitutes the breach of contract may also constitute a
delict (i.e., it may infringe rights of the other party that exist independently of
7 Van der Merwe ( et al) Contract General Principles Third Edition p 328.
8 Devland Cash & Carry (Pty) Ltd v G4S Cash Solutions SA (Pty) Ltd (GJ) (2020/19610) [2023]
ZAGPJHC (3 July 2023) [17].
9 Van der Merwe ( et al) (supra) p 332 with reference to Van Aswegen Die sameloop van aksies
om skadevergoeding uit kontrakbreuk en delik Thesis (1991) 300 – 3008; Van Aswegen 1992 THRHR
271 273.
10 Van der Merwe 1978 SALJ 317; Van der Merwe & Olivier Die onregmatige daad in die Suid -
Afrikaanse reg (1989) 479.
the contract).11 In such an instance, the plai ntiff may claim either on breach of
contract or delict, or in the alternative.12
29. Nevertheless, no claim is maintainable in delict where the negligence relied on
consists in the breach of a contract term.13
30. The plaintiff, whose alternative claim for damages is based on a breach of
contract, does not have to allege that the damages were caused by “the
deliberate or negligent unlawful actions ” of any defendants .
31. The third defendant’s second exception is thus without merit and must be
dismissed with costs.
CONCLUSION
32. The court grants the following order:
The third defendant’s exception is dismissed with costs on Scale A .
_________________________
DB DU PREEZ
Acting Judge of the High Court
Gauteng Division, Pretoria
Date of Hearing: 26 May 2025
Date of Judgment: 30 May 2025
Appearances
11 Hutchison ( et al) The Law of Contract in South Africa Third Edition 326.
12 Lillycrap, Wassenaar & Partners v Pilkington Bros (SA) (Pty) Ltd 1985 (1) SA 475 (A);
Holtzhausen v Absa Bank Ltd 2008 (5) SA 630 (SCA).
13 Lillycrap, Wassenaar & Partners v Pilkington Bros (SA) (Pty) Ltd (supra ) 499A -501H ;
Holtzhausen v Absa Bank Ltd (supra ) [6].
On behalf of the excipient/third defendant: Adv J Malan
Instructed by:
Paul du Plessis Attorneys
Attorneys for the Applicant/Excipient
3RD Floor, 3 Melrose Boulevard
568 Norval Street
Moreleta Park
Pretoria
Tel: 012 997 5368/9
Fax: 086 565 2726
Ref: PJ DU PLESSIS/PC/PC0368
Email: paula@pduplessislaw.co.za
miso@pauplessislaw.co.za
On behalf of the respondent/plaintiff: Adv K Mvubu
Instructed by:
Ncube Incorporated Attorneys
Attorneys for the Respondent
JSL Towers, Office SO304
255 Pretorius Street Pretoria
0002
TEL: 011 880 4204
Email: Cleo@ncubeinc.co.za