| IN THE HIGH COURT OF SOUTH AFRICA
| KWAZULU-NATAL DIVISION, PIETERMARITZBURG
CASE NO: 14789/2023P
|
| In the matter between:
| DEMOCRATIC ALLIANCE APPLICANT
and
|
MSUNDUZI MUNICIPALITY FIRST RESPONDENT
: COUNCIL OF THE MSUNDUZI MUNICIPALITY SECOND RESPONDENT
: MUNICIPAL MANAGER OF THE MSUNDUZI
MUNICIPALITY THIRD RESPONDENT
: ROYAL AM FOOTBALL CLUB FOURTH RESPONDENT
| LULAMILE MAPHOLOBA FIFTH RESPONDENT
| KWAZULU NATAL MEC FOR CO-OPERATIVE
| GOVERNANCE AND TRADITIONAL AFFAIRS SIXTH RESPONDENT
| ORDER
The following order is granted:
1. The decisions taken by the second respondent on 19 July 2023 are declared to be
unlawful and invalid and are reviewed and set aside. The decisions include the following:
2
14.1.1. to approve a sponsorship agreement between the first respondent and the fifth
| respondent, a Premier Soccer League club (as it was then), for a three-year period
| commencing in the 2023/2024 financial year;
1.1.2 to approve the payment of RQ million rand per annum, excluding VAT, to the fifth
: respondent in terms of the sponsorship contract;
| 1.1.3 to approve the first respondent being held liable under the sponsorship contract for the
annual maintenance of the Harry Gwala Stadium to ensure compliance with the
standards prescribed by the Premier Soccer League; and
4.1.4 to authorise the third respondent to sign the sponsorship contract; and
4.1.5 the decision by the third respondent to sign and enter into the sponsorship contract on
behalf of the first respondent.
| 2. The payment of any money to the fourth respondent under the sponsorship
contract is declared to be unlawful and is reviewed and set aside.
3. All payments made by the first respondent under the sponsorship contract to the
fourth respondent must immediately be repaid to the first respondent with interest from
the date of this judgment.
4. The costs of this application are to be paid jointly and severally by the first to third
respondents, on scale B.
a
JUDGMENT
a
Mlaba J
Introduction
(1] The applicant seeks, among other things, an order declaring that the decisions
taken by the second respondent to sponsor the fourth respondent to be unlawful and
irrational, and reviewable and set aside.
;
3
| Background
| [2] The first and second respondents decided to sponsor a football club for a three-
| year period. A three-year sponsorship agreement with Maritzburg United Football Club
| (MUFC) was entered into in 2014. The sponsorship agreement was renewed several
: times since then, but it was terminated when MUFC was relegated from the Premier
| Soccer League (PSL). The first and second respondents thereafter considered it
| appropriate to sponsor the fourth respondent, Royal AM Football Club (Royal AM).
|
|
| [3] During or about June 2023, after MUFC had been relegated, the third respondent
| presented a report to the second respondent for consideration, in which he motivated for
the sponsoring of Royal AM. The following recommendations were made to various
committees within the first respondent:
‘7.4. Council notes the opportunity to enter into a sponsorship agreement with the Royal AM
: Football Club (RAFC). :
7.2. Council grants approval for the sponsorship agreement between the Msunduzi Municipality
and the Royal AM Football Club for a period of three years commencing in the 2023/2024 financial
year.
7.3. The amount for the proposed sponsorship agreement for a period of three years is the
amount of RQ million rand per annum (VAT exclusive) plus CPI in the two outer years.
74 In addition to the cash sponsorship, the agreement will include the cost for the annual
maintenance of the Harry Gwala Stadium in order to keep it in compliance with PSL standards.
7.5 The City Manager is authorised to sign the sponsorship agreement between the Msunduzi
Municipality and the Royal AM Football Club for a period of three years, commencing in the
2023/2024 financial year.’
[4] On 19 July 2023, the second respondent deliberated on the matter at a council
meeting and approved the recommendations. A resolution to award the sponsorship to
Royal AM was taken. On the following day, 20 July 2023, the third respondent, on behalf
of the first respondent, entered into a sponsorship agreement with Royal AM, the effective
date being 20 July 2023. The agreement would be for a period of three years, in which
the first respondent would grant Royal AM an amount of R9 million annually and further
appoint a service provider to maintain the Harry Gwala Stadium, which would be Royal
AM’s home ground to use as its training facility, together with its offices and changing