About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Constitutional Court
SAFLII
>>
Databases
>>
South Africa: Constitutional Court
>>
2018
>>
[2018] ZACC 33
|

|

Airports Company South Africa v Big Five Duty Free (Pty) Limited and Others (CCT257/17) [2018] ZACC 33; 2019 (2) BCLR 165 (CC); 2019 (5) SA 1 (CC) (27 September 2018)

Links to summary

Heads of arguments

CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT
257/17
In the matter
between:
AIRPORTS COMPANY
SOUTH
AFRICA
Applicant
and
BIG FIVE DUTY
FREE (PTY)
LIMITED
First
Respondent
DFS FLEMINGO SA
(PTY)
LIMITED
Second
Respondent
TOURVEST HOLDINGS
(PTY)
LIMITED
Third
Respondent
Neutral citation:
Airports Company South Africa v Big Five Duty Free (Pty) Limited
and Others
[2018] ZACC 33
Coram:
Cachalia AJ, Dlodlo AJ, Froneman J, Goliath AJ, Jafta J, Khampepe J,
Madlanga J, Petse AJ and Theron J
Judgments:
Froneman J (majority): [1] to [64]
Jafta J
(concurring): [65] to [83]
Cachalia AJ
(dissenting): [84] to [111]
Heard on:
22
May 2018
Decided on:
27 September 2018
Summary:
Interpretation of contracts — Judgments
in rem
—
When can settlement agreements be made an order of court
Agreements between
private parties — setting aside a court order — Section
217 of the Constitution
ORDER
Application for
leave to appeal from the Supreme Court of Appeal (hearing an appeal
from the High Court of South Africa, Gauteng
Division, Pretoria):
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order made by the Supreme Court of Appeal is set aside.
4. The order in the High Court under case number 16829/15, dismissing
the application of Big Five Duty Free (Pty) Limited with
costs,
including the costs of two counsel, is reinstated.
5. The first respondent is to pay the costs of the application in
this Court and Supreme Court of Appeal, including the costs of
two
counsel.
JUDGMENT
FRONEMAN J (Dlodlo
AJ, Goliath AJ, Khampepe J, Madlanga J, Petse AJ and Theron J
concurring):
Introduction
[1]
This judgment makes clear two legal propositions.  The
first is that a judgment
in rem
may not be set aside by only a
settlement agreement between the litigating parties in an appeal
against that judgment.  For
a judgment
in rem
to be set
aside by a settlement agreement, the court hearing the appeal must
give its sanction to the agreement being made an order
of court on
the basis that the setting aside is justified by the merits of the
appeal.  The second is that the court sanctioning
the settlement
agreement should give its reasons for doing so.
[2]
A judgment
in rem
determines the objective status of a
person or thing.
[1]
This Court has adopted an objective theory of invalidity
regarding the exercise of public power.
[2]
A judgment that declares a tender invalid, because it is
unlawful in contravention of section 217 of the Constitution,
[3]
is an objective pronouncement on the constitutional validity of an
administrative act.  That kind of judgment has a public

character that transcends the interests of only the litigating
parties. It is a specific kind or example of a judgment
in rem
.
[3]
Our law already recognises that
judgments
in rem
are not subject to mere settlement on appeal.  In the context of
intellectual property law the Supreme Court of Appeal held,
in
Marine
3 Technologies,
that the judgment
appealed against was “one
in rem
in that it [affected] a public register, . . . notwithstanding the
settlement of the matter, [Marine 3 was] constrained to proceed
with
the appeal”.
[4]
The implication is clear: unless the appeal court determines
that the merits of the appeal accords with the outcome of the

settlement agreement it cannot make the settlement agreement an order
of court.  And a court must give reasons for its decisions,
[5]
especially when it gives its approval to a settlement agreement on
appeal that sets aside a trial court’s judgment
in rem
.
[4]
This is an application of what this Court held in
Eke
[6]
to be one of the requirements for a settlement agreement to be made
an order of court, namely that “its terms must accord
with both
the Constitution and the law [and] must not be at odds with public
policy”.
[7]
[5]
The dispute in this case revolves around the meaning and
effect of a settlement agreement and the import of sanctioning it as
an
order of court.
Factual
background
[6]
After a competitive bidding process, the applicant, Airports
Company South Africa (ACSA) awarded a contract to the first
respondent
(Big Five) to operate duty free shops at its
international airports for ten years.  The second and third
respondents
(Flemingo and Tourvest) were unsuccessful bidders for the
same contract.  Flemingo took the award on review.  Both
ACSA
and Big Five opposed the application for review.  Phatudi J
upheld the review and set aside the tender (Phatudi J order).
[7]
Big Five appealed to a Full Court of the High Court of South
Africa, Gauteng Division, Pretoria (High Court).  ACSA abided
the outcome of the appeal.  After the appeal had been heard but
before judgment, Big Five and Flemingo settled the case.
In
terms of the settlement, Flemingo abandoned the Phatudi J order and
withdrew the review.  The Full Court made the settlement
an
order of court on 20 June 2014.
[8]
No reasoned judgment accompanied the Full Court order.  No
further leave was sought to appeal the order.
[8]
Seven months later ACSA announced that it was not bound by the
Full Court order, that it remained bound by the Phatudi J order
setting
the contract aside, and that it intended to embark on a
bidding process to award the contract afresh.
[9]
Big Five launched an application in the High Court for orders
declaring that ACSA remains bound by its original award of the
contract
to Big Five because the Phatudi J order had been overturned
by the Full Court order.  The High Court, per Hughes J,
dismissed
the application.
[9]
Big Five appealed to the Supreme Court of Appeal.  It
upheld the appeal and declared that ACSA remained bound by its

original award of the contract to Big Five.
[10]
ACSA seeks leave to appeal to this Court against the Supreme
Court of Appeal’s order.
Jurisdiction and
leave to appeal
[10]
ACSA is an organ of state whose procurement processes involve
the exercise of public power, which must in terms of the Constitution

be fair, equitable, transparent, competitive and cost-effective.
[11]
The Phatudi J order declared the tender award constitutionally
invalid.
[12]
Whether that kind of order has the effect of an order
in
rem
, and to what extent private settlement agreements seeking to
set aside orders of that kind may be made orders of court also raise

important constitutional and other legal issues over which this Court
has final jurisdiction.
[13]
[11]
Resolution of these constitutional legal issues will have an
impact beyond the present litigation between the parties.
Furthermore,
the applicant also has reasonable prospects of
success on the immediate issue between the parties.  It is thus
in the interests
of justice that leave to appeal must be granted.
Discussion and
analysis of the issues
[12]
ACSA contends that the settlement agreement does not have the
effect of setting aside the Phatudi J order.  Big Five says that

it has precisely that effect.
[13]
Although all parties now accept that: (1) as laid down in
Eke
,
a settlement agreement between litigating parties can only be made an
order of court if it conforms to the Constitution and the
law; and
(2) private parties cannot, by agreement, set aside a judgment
in
rem
.  These legal principles were not expressly articulated
in either the Full Court or Supreme Court of Appeal orders.  It

is also by now common cause that the Phatudi J order was indeed an
order
in rem
.
[14]
The problem then lies in the application of these principles
to the settlement agreement and its incorporation as an order of
court
by the Full Court and the Supreme Court of Appeal.  A
number of possibilities exist, depending on the interpretation of the

agreement, as well as the interpretation of the courts’
approval of the settlement agreement as an order of court:
(a) One is that the agreement does not have the effect of setting
aside the Phatudi J order and that the sanction of this private

agreement does not infringe the Constitution or law in any way.  The
Phatudi J order remains legally valid and the only effect
of the
settlement agreement is that the dispute between Big Five and
Flemingo has been settled between them as private parties.
ACSA’s
appeal must succeed if this interpretation is accepted.
(b) Another is that the agreement does have the effect of setting
aside the Phatudi J order.  Big Five says once that is found
it
must succeed and the appeal must be dismissed.  The issue of
whether the Full Court’s sanction of the agreement was
a proper
one involving consideration and sanctioning the merits of the appeal,
namely the setting aside of the Phatudi order, must
then be accepted
without further ado, as there was no further appeal lodged against
the sanctioning of the settlement agreement
as an order of court.
(c) If, however, one gets past the procedural obstacle of a failure
to lodge an appeal against the Full Court order, one must then

determine whether the Full Court’s and the Supreme Court of
Appeal’s sanction of the settlement agreement also involved
a
determination of the merits of the appeal, namely that the Phatudi J
order should be set aside.  If the Full Court order
amounted to
that, then Big Five succeeds.  If it is clear that it does not
amount to a sanction on the merits, then ACSA succeeds.
(d) But what if the interpretation of the agreement and the
intentions of the Full Court are unclear?  Are we bound to a
definitive interpretation based on the limited information available
to us, or is there another remedy available?
Interpretation or
remittal?
[15]
It is possible to approach the issues as merely ones of
interpretation, first, of the settlement agreement and, second, of
the court
sanction of the agreement as an order of court.  The
purely interpretative approach may, however, be somewhat problematic.
[16]
The Full Court only made an order incorporating the settlement
agreement as the order of court, without any reasoned judgment.  From

that material it is difficult, if not impossible, to determine what
interpretation it gave to the meaning and import of the settlement

agreement, whether it considered its interpretation of the agreement
to have any impact on the
in rem
Phatudi J order and, if so,
whether it was satisfied that the appeal should have been upheld and
the Phatudi J order set aside.
[17]
The Supreme Court of Appeal interpreted the settlement
agreement as intended to set aside the Phatudi J order.  That
Court
also found that the Full Court intended the same:
“What was the purpose of the withdrawal and abandonment,
coupled with the agreement of settlement, if not to set aside the

order of Phatudi J?  It could be none other than to agree that
the award to Big Five by ACSA was to stand.  There is
no other
purpose that the parties could have intended to achieve.
The argument that the full court did not, independently of the
parties, intend to set aside the Phatudi J order cannot be accepted.

The court order was made to give effect to the agreement
between Big Five and Flemingo.  Any distinction between the

parties' intention and that of the full court is thus obviously
false.  If one asks what the parties intended to achieve in

context – the facts known to them, the reasons for the
agreement, the clear statement of Flemingo that it withdrew the
review
application in its entirety and abandoned any right in the
order – the only answer could be that the parties did not
intend
the Phatudi J order to stand.  It was a necessary
implication of what they expressly stated.  There is no other
sensible
construction of the agreement.”
[14]
[18]
The difficulty, even with the Supreme Court of Appeal’s
fuller, reasoned, judgment, is that in the end the Phatudi J order

was set aside without any reasoned consideration of whether it was
correct on the merits.  On the face of it this approach
is in
conflict with the principle that a judgment
in rem
may not be
set aside by a settlement agreement between the litigating parties in
an appeal against that judgment, without the court
giving its
sanction to the agreement on the basis that the setting aside is
justified by the merits of the appeal.
[15]
[19]
One way out of this difficulty would be to uphold the appeal
on the grounds that there was insufficient information on the
background
context to the settlement agreement, as well as the Full
Court order sanctioning it, for the Supreme Court of Appeal to come
to
any definitive conclusion on the interpretation of the agreement
and particularly the correctness of the setting aside of the Phatudi

J order by the Full Court.  A just and equitable remedy may
then be to remit the matter to the Full Court to provide,
in a
reasoned judgment, its interpretation of the settlement agreement,
whether it impacted on the
in rem
order made by Phatudi J and,
if so, whether it was satisfied that the appeal should have been
upheld and the Phatudi J order set
aside.  This would not
involve any rehearing of the appeal, because it was already fully
argued before the Full Court.
Nor would it amount to an
appeal against the Full Court order, because it would not pronounce
upon the correctness of the
order, but only seek reasons for it.
This would underline the need for full reasons by an appellate
court when making settlement
agreements orders of court, especially
where they might impact on
in rem
orders that had been granted
in the court from which the appeal comes.
[20]
Would remittal be a just and equitable way to resolve the
matter?
[21]
This Court has on a number of occasions ordered that matters
be remitted to a lower court.  This is because it was just and

equitable in the circumstances to do so.
Mdeyide
,
[16]
Merafong
[17]
and
Qhinga
[18]
are examples of cases in which remittal was ordered.
[22]
In
Mdeyide
, a case involving the issue whether the
plaintiff had the necessary capacity to litigate,  this Court
held that:
“In light of the above, regrettably, it is necessary to set
aside the order of the High Court in its entirety and remit
the
matter.  It is open to an appellate court, in appropriate
circumstances, to remit a matter for evidence to be obtained
on
matters that have been left obscure on the record.”
[19]
[23]
Florence
[20]
and the majority judgment in
Everfresh
[21]
are instances where remittal was refused.  In
Florence,
Van der Westhuizen J came to a different conclusion on the outcome
than he did in
Mdeyide
:
“It is tempting to remit the matter to the Land Claims Court to
consider further evidence on the current value of the property
as
well as other relevant factors to reach a decision in light of the
guidance provided by this judgment.  It is open to an
appellate
court, in appropriate circumstances, to remit a matter for evidence
to be obtained in the hope that, in doing so, the
issues will be
fully ventilated.  This Court, however, will be disinclined to
remit, when doing so would be speculative or
would involve wasted
costs and energy on further legal contests.”
[22]
[24]
In
Everfresh
Moseneke DCJ, writing for the majority,
held that:
“It is not good enough to ask the court a quo whether the
common law needs to be developed.  That hypothetical question

arises in every single case involving the common law.  The
[minority] judgment . . . eschews the merits and requires the High

Court to do that preliminary enquiry.  I thus hold that it is
not in the interests of justice to remit unless there is a reasonable

prospect that the court to which the matter is remitted is likely to
hold that the common law needs to be adapted.  Otherwise
the
remittal may be said to be speculative.”
[23]
[25]
From these cases it is possible to draw a few conclusions.
Firstly, this Court will remit a matter to the lower courts if it

involves a question that would taint the legitimacy of the decision
made
-
where for example one party may
possibly not have legal capacity to litigate.  Secondly, it will
remit a matter to the lower
courts if it determines that a legal
question that necessitates pronouncement upon was ignored by the
lower courts with the effect
that this Court does not have the
necessary information before it in order to answer the question
properly.  Thirdly, matters
will only be remitted if it makes
practical sense to do so.  It will not remit matters in a
speculative way without ascertaining
that there are reasonable
prospects of the lower court reaching a different decision to its
original one once it has considered
the new information.
Moreover, the additional costs involved in prolonged litigation must
also be considered.
[26]
This is a matter where the second factor – in this case
the lack of a reasoned definitive determination on the merits of
sanctioning
the setting aside of the Phatudi J order by the Full
Court and the Supreme Court of Appeal – comes into play.  To
be
weighed up against it are a number of practical considerations,
including, the important fact that ACSA failed to avail itself of
the
opportunity to appeal against the Full Court order; that a
considerable period of time has passed; that it is uncertain
whether
all the members of the Full Court are still available and will be
able to reconstruct the reasons for their original order;
that
further remittal will incur further costs; and that courts are often
called upon to interpret agreements and orders on the
only available
information placed on record before them.  It is not without
some hesitation and regret that I conclude that
remittal is not the
appropriate course here.  What it underscores though, is the
necessity for a reasoned judgment when making
a settlement agreement
an order of court on appeal where the settlement agreement impacts
upon a court order
in rem
already made.
[27]
I have had the pleasure and benefit of reading the concurrence
of my brother Jafta J (second judgment).  It appears to me that

there is little difference between us on the proper interpretation of
the agreement.
[24]
The second judgment then goes on to say that because—
“the award of the tender was in breach of section 217 of the
Constitution, [the agreement] could not be implemented.
The
reversal of Phatudi J’s order if it were to be done
competently, could not cure the inconsistency and the invalidity
.
The invalidity of the tender stemmed from its inconsistency with the
Constitution.”
[25]
This inconsistency
“rendered the order of the Full Court invalid.
Consequently, the order of the Full Court did not
overturn the order
of Phatudi J and as a result Hughes J was right to dismiss Big Five’s
application”.
[26]
This seems to assume that the merits of the Phatudi J order
could not have been assessed by the Full Court in determining

whether to make the agreement an order of court.  For the
reasons set out earlier, I am of the view that it was open for the

Full Court to make that assessment if the agreement had the
effect of seeking to set aside the Phatudi J order.  But

logically I cannot see how that issue
-
the Full Court’s assessment on the merits of setting aside the
Phatudi J order
-
can be settled
before determining whether the agreement purports to set aside the
Phatudi J order.
[28]
The reality is that courts are often forced to interpret
documents in less than ideal circumstances.  This is another one
of
those occasions.  I turn now to that task.
The proper
interpretation of the settlement agreement
[29]
There is no dispute about the principles of interpretation.
The correct approach to the interpretation of documents was
summarised
by the Supreme Court of Appeal in
Endumeni
Municipality
:
“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.”
[27]
(Footnotes omitted.)
[30]
I begin then with the “inevitable starting point”,
the language of the settlement agreement itself.  Section 1 of

the agreement sets out the fundamental point that the agreement was
in full and final settlement of all “claims which the
parties
have against each other” arising out of the present course of
litigation.  Sections 3 and 4 are most relevant
to the issues at
hand and I quote them in full below.  Section 5 concerns
representation and indemnification.  Finally,
section 6 contains
several general clauses.
[31]
Section 3 deals with the review application and clause 3.1
states:
“The Respondent [Flemingo] abandons the order of Phatudi J
granted on 17 May 2012 in the review application. Pursuant hereto
and
on signature hereof by Respondent it will serve a notice of
abandonment of this order in terms of rule of court 41(2).  Without

limiting the generality of the terms ‘abandon’ the
Respondent in addition waives and abandons all rights, title and

interest in and to this order.”
[32]
Nowhere does the agreement say that it has the effect of
setting aside the judgment of Phatudi J.  Instead of explicit
wording
to that effect, Big Five relies on two clauses of the
settlement agreement:
“3.3 The Respondent [Flemingo] hereby withdraws in its entirety
the review application proceedings on the basis of and having
the
effect that these proceedings were never instituted and/or proceeded
with and will serve on signature hereof a notice of withdrawal

reflecting therein that the matter is settled.
. . .
3.8 Upon signature of this agreement by the parties [Flemingo]
acknowledges that ACSA is free to and can now implement the award
of
its tender (as referred to in this paragraph) to [Big Five] without
limitation or restriction and without any challenge thereto

whatsoever by [Flemingo].”
[33]
However, it is not clear that the wording of either of those
clauses has the effect of setting aside the Phatudi J order.
[34]
Clause 3.8 states that Flemingo acknowledges that ACSA is free
to implement the tender award absent Flemingo’s opposition
.
At its highest, it is a promise made by Flemingo that it will not
interfere with the implementation of the tender by ACSA.
More
realistically, its function is to spell out the consequences of the
promises Flemingo has bound itself to – it will
no longer
concern itself with the contract, its validity, or its
implementation.  That reading gives meaning to the verb
“acknowledges”.
[35]
Ultimately, it does not matter whether clause 3.8 is properly
read as Flemingo acknowledging the consequences of its promises or
as
Flemingo making a wholly new promise to step out of the fray.
Neither its acknowledgment nor its promise to step aside
is
sufficient to set aside the Phatudi J order.
[36]
The centre of the interpretative dispute is really clause
3.3.  Unfortunately, it is difficult to know what that clause
means.
The problems with the clause are myriad.
[37]
Flemingo claims to withdraw “in its entirety the review
application proceedings . . . and will serve on

signature hereof a notice of withdrawal reflecting therein that the
matter is settled”.  However, withdrawal, in the
ordinary
legal sense of that word, can have nothing to do with the proceedings
before Phatudi J.  Those proceedings were complete
and Flemingo
could not withdraw from proceedings which had already concluded.
[28]
Clause 3.3 might then refer only to withdrawal from the proceedings
before the Full Court.  The problem with that interpretation
is
that the appeal proceedings appear to be covered by section 4 of the
agreement.
[29]
[38]
A less literal interpretation also gives rise to difficulty.
We could interpret “withdrawal” from proceedings to

include abandonment – the analogue of withdrawal where
proceedings have already concluded.  On that interpretation,

clause 3.3 captures Flemingo’s promise to withdraw from the
proceedings before the Full Court and to abandon the Phatudi
J
order.  But, as both parties agreed before this Court, the
abandonment of a judgment
in rem
does not have the effect of
setting it aside.
That must be right.  By
abandoning a judgment, a party gives up any rights it had by virtue
of that judgment – for example,
the right to be paid by another
party.  A party cannot unilaterally affect the rights of others
or change an objective fact
– like whether or not an
administrative act was unlawful – by giving up their own
rights.
Moreover, abandonment appears to be covered by
clause 3.1 of the settlement agreement in which Flemingo explicitly
states
that it abandons the Phatudi J order.
[39]
The meaning of “withdraw” in the clause is
opaque.  Unfortunately, the problems with clause 3.3 do not end
there.
[40]
Flemingo purported to withdraw “on the basis of and
having the effect that these proceedings were never instituted and/or
proceeded with”.  From an interpretative standpoint, that
statement is highly problematic.  The grammar of the sentence
is
poor but there are two discernible propositions in it:
(a) that the basis for the withdrawal was that the proceedings were
never instituted and/or proceeded with; and
(b) that the withdrawal is to have the “effect that these
proceedings were never instituted and/or proceeded with”.
The first
proposition appears to be meaningless.  Clause 3.3 can thus only
mean that the withdrawal is to have the effect that
these proceedings
were never instituted and/or proceeded with.
[41]
An immediate problem is that the phrase “these
proceedings” is ambiguous.  It could mean either “the
proceedings
before the Full Court”, or “the proceedings
before both Phatudi J and those before the Full Court”.
While
the headings of sections 3 and  4 of the agreement support
the latter reading, the consequences of that reading are surprising

at best.
[42]
The stipulated consequence makes perfect sense where “these
proceedings” refers only to the appeal.  Flemingo’s

withdrawal from the proceedings before the Full  Court, together
with the fact that the matter was then settled by agreement
rather
than by a judgment, would have the effect that those proceedings were
never instituted and/or proceeded with.
[43]
On the alternative interpretation, the consequences would be
entirely novel – so novel as to border on the absurd.
Clause
3.3 would mean that Flemingo’s withdrawal (whatever that
means) from the proceedings before Phatudi J had the effect that

those proceedings were never instituted and/or proceeded with.
But not even successful appeals have that effect.  Where
the
order of a court is set aside by a higher court, the earlier judgment
does not vanish in a puff of smoke.
[44]
What then are we to make of clause 3.3?  Looking at the
agreement as a whole, it seems that its drafters were trying to
indicate
that Flemingo was doing everything within its power to
withdraw from the fray – that Flemingo was to take all possible
actions
to remove itself and that it acknowledged its role in the
tender process had definitively come to an end.  Furthermore,
the
parties were trying to do what they could to unwind the process
that had begun with the review application.  But it was never
in
their gift to set aside the Phatudi J order.
[30]
That could not have been the effect of the settlement agreement
without court approval, which had to be done on the basis
of an
independent assessment of the correctness of the Phatudi J order.
[45]
For Big Five to succeed on the interpretative point,
“withdraw” must be read to have the effect of setting
aside a judgment
in rem
.  In the absence of a clear
indication from the Full Court that their order was intended to give
“withdraw” that
meaning, that is not possible.  At
least not without resorting to the authority famously referred to by
Lord Atkin in
Liversidge
.
[31]
This is not Wonderland.
[32]
[46]
Notwithstanding the heading of section 3, “Review
Application”, the best way to make sense of “withdrawal”

and its effects in clause 3.3 is in relation to the appeal
proceedings.  Paying heed to that heading, it is also necessary

to read “withdrawal” to mean “abandonment”
where it makes sense to do so.
[47]
It therefore seems that the best interpretation of clause 3.3
is as follows:
(a) Flemingo withdraws its opposition to the appeal and abandons the
judgment of Phathudi J in the review application.
(b) Where possible, the terms of this agreement will have the effect
that the relevant proceedings were never instituted and/or
proceeded
with.
(c) Where possible, Flemingo’s withdrawal will have the effect
that the relevant proceedings were never instituted and/or
proceeded
with.
[33]
(d) Flemingo promises to serve a notice of withdrawal reflecting that
the matter is settled when the agreement is signed.
[48]
While that interpretation makes the settlement agreement
somewhat repetitious, it is consistent with the parties’ belt
and
braces approach.
[49]
Most importantly in this matter, that interpretation clearly
leaves in place the Phatudi J order.  On its proper
construction,
the settlement agreement does not purport to set aside
a judgment
in rem
.  That is sufficient to decide the
matter and it is not necessary to delve further into the parties’
alternative arguments.
[50]
For the sake of completeness, it remains to deal directly with
the most plausible arguments made in favour of Big Five’s
interpretation.
The reasoning of
the Supreme Court of Appeal
[51]
The Supreme Court of Appeal reasoned as follows:
“[T]he agreement must be construed in the light of the
circumstances attendant upon it – the factual matrix

or context.  This is now settled law and I do not propose to
repeat the recent authorities that state that an agreement must
be
construed in context.  The context here was that Flemingo and
Big Five, amongst others, had made bids for the lease of
the duty
free shops at three international airports on the terms set out in
ACSA's invitation to tender. ACSA awarded the tender
to Big Five.
One of the unsuccessful bidders, Flemingo, took the award on
review.  It argued that the award was unlawful.
Phatudi J found
that it was unlawful for reasons that may or may not be good.  Big
Five appealed against the order with the
leave of this Court.  Before
the appeal was heard, Flemingo and Big Five agreed that the appeal
would not be prosecuted to
finality but that Flemingo would abandon
the order and withdraw the review proceedings – as if they had
never happened.
What was the purpose of the withdrawal and abandonment, coupled with
the agreement of settlement, if not to set aside the order
of Phatudi
J?  It could be none other than to agree that the award to Big
Five by ACSA was to stand.  There is no other
purpose that the
parties could have intended to achieve.
The argument that the full court did not, independently of the
parties, intend to set aside the Phatudi J order cannot be accepted.

The court order was made to give effect to the agreement
between Big Five and Flemingo.  Any distinction between the

parties' intention and that of the full court is thus obviously
false.  If one asks what the parties intended to achieve in

context – the facts known to them, the reasons for the
agreement, the clear statement of Flemingo that it withdrew the
review
application in its entirety and abandoned any right in the
order – the only answer could be that the parties did not
intend
the Phatudi J order to stand.  It was a necessary
implication of what they expressly stated.  There is no other
sensible
construction of the agreement.”
[34]
[52]
That reasoning places inordinate weight on the intention of
the parties and pays little heed to the unrealistic meaning that such

an interpretation would attribute to the actual words of the
agreement, particularly clause 3.3.
[53]
Of course, the intention of the parties is relevant to the
interpretation of the settlement agreement, but ultimately the
meaning
of the agreement is borne out by the words used.  And
words do not mean whatever the parties later say they mean: “[w]hile

the intention of the speaker is a vital component of the interpretive
enquiry, the basic unit of meaning is the sentence employed”.
[35]
[54]
One reason to be wary of placing weight upon the intention of
Big Five and Flemingo to set aside the Phatudi J order is that we
simply do not know their true intention.  The agreement itself
does not explicitly state that intention.  Big Five and
Flemingo
do not explicitly say that they intend to set aside the judgment
below.  And there are many reasons to enter a settlement

agreement.  Whenever a settlement is entered into, the
resolution of the dispute is brought back into the hands of private

parties.  No reasons need to be given and whatever factors
induced the settlement will usually remain unknown to the public
and
the court.  In the face of uncertainty, it is a mistake to place
the entire weight of the interpretative exercise on what
the court
thinks the parties’ intention might have been.
[36]
[55]
Even if the parties actually intended to set aside the Phatudi
J order, that does not mean that they gave effect to that intention

by entering into the settlement agreement.
[56]
We know that Big Five was labouring under a mistaken view
about the consequences of abandonment.  Previously it argued
that,
even in the absence of the settlement
agreement having been made an order of the Full Court, the review was
abandoned by Flemingo
and therefore it had no legal effect.
In
argument before us it was conceded that abandonment alone could not
have nullified the Phatudi J order.
[57]
It might well be that Big Five and Flemingo were wrongly
relying on the effect of abandonment to set aside the earlier
judgment.
If that is right, then their failure to craft an
agreement that actually set aside the Phatudi J order is easily
explained – they
misunderstood the consequences of
withdrawal and abandonment on judgments
in rem
.
[58]
Regardless of their true intention, the words used in the
settlement agreement do not have that effect.
The role of Eke
in the interpretative arguments
[59]
Both ACSA and Big Five attempted to deploy this Court’s
reasoning in
Eke
to their advantage.  The relevant part
of
Eke
reads:
“This in no way means that 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’.  Parties
contracting outside of the context of litigation may not approach a
court and ask that
their agreement be made an order of court.
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.’”
[37]
(Footnotes omitted.)
[60]
Big Five reasoned that if the
Full Court had followed the requirements set out in that case,
then the court must have been
satisfied that the merits of the case
warranted setting aside the Phatudi J order.  ACSA reasoned that
if the Full Court had
followed those requirements, they would not,
without comment, have made an agreement setting aside the Phatudi J
order an order
of court.
[61]
Both parties then relied on the same
second premise: we must presume that the Full Court adhered to the
requirements set out in
Eke
.
In that way, Big Five deployed
Eke
to make more palatable its claim that the Full Court order set aside
the Phatudi J order and ACSA deployed
Eke
to bolster their interpretation of the
order.
[62]
Those arguments suffer the same defect.
The first if/then premise each side prefers predetermines the
conclusion at which
they arrive.  The conclusion of the argument
is effectively assumed by the first premise.  That is not valid
legal reasoning.
For that reason, I have eschewed reliance on
Eke
in
determining this case.
Costs
[63]
While ACSA is a public functionary, the heart of the matter is
an interpretative dispute and Big Five is acting in its commercial

interests.  Flemingo and Tourvest took
no active part in
the matter before this Court.  The
Biowatch
principle
does not apply.  Costs are to follow the result.
Order
[64]
The following order is made:
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order made by the Supreme Court of Appeal is set aside.
4. The order in the High Court under case number 16829/15, dismissing
the application of Big Five Duty Free (Pty) Limited with
costs,
including the costs of two counsel, is reinstated.
5. The first respondent is to pay the costs of the application in
this Court and Supreme Court of Appeal, including the costs of
two
counsel.
JAFTA J:
[65]
I have had the advantage of reading the judgment of my
colleague Froneman J (first judgment).  Having concluded
that the
Phatudi J order was a judgment
in rem
which was
not subject to, without more a settlement on appeal, the first
judgment holds that the dispute revolves around the meaning
and
effect of a settlement agreement.
[66]
However, as I see it, the antecedent question must be whether
it was competent for the Full Court to make the settlement agreement

an order of court in the present circumstances.  For if it was
not, whatever the terms of that order may mean would be irrelevant
to
the question whether the tender that was competently set aside by
Phatudi J was revived.  It was only if that tender
was
properly revived that the relief sought by Big Five could succeed.
In other words, the order of the Full Court will have
the legal
consequences of reviving the tender only if it was itself competently
granted.
[67]
I am grateful to the first judgment for its exposition of the
facts which I will not repeat here except to the extent necessary for

the conclusion I reach.  A good place to start the enquiry into
whether in the present circumstances it was competent for
the
Full Court to make the settlement agreement an order of court is
the Constitution.
Section 172(1) of
the Constitution
[68]
Section 172(1) of the Constitution affirms the role played by
courts in ensuring that public power is properly exercised.
[38]
In addition, this provision enhances the capacity of courts to uphold
and enforce the Constitution.  In mandatory terms,
it obliges
courts to declare invalid laws or conduct that is not in line with
the Constitution.  It provides:
“When deciding a constitutional matter within its powers, a
court
¾
a.
must declare that any law or conduct that is inconsistent with the
Constitution is invalid to the extent of its inconsistency.”
[69]
Therefore, when it was established to the satisfaction of the
High Court that ACSA had awarded the tender to Big Five in
contravention
of section 217 of the Constitution, Phatudi J had no
option but to declare the award invalid and set it aside.
[39]
This much is clear from the text of section 172(1)(a).  What is
also evident from this section is the fact that the
power to declare
conduct that is inconsistent with the Constitution invalid is
reserved for courts.  Even so, it is only courts
with the
necessary competence which may exercise the power to nullify conduct
that is inconsistent with the Constitution.
[40]
[70]
The question that arises for consideration here is whether,
once a competent court has exercised judicial power and declared
conduct
that is inconsistent with the Constitution invalid, litigants
may seek to reverse this declaration by agreement.  As the first

judgment rightly observes, the Phatudi J order transcended interests
of parties in that litigation and as a matter of law it could
not be
overturned by parties’ settlement agreement on appeal, without
overruling the legal conclusions on which that order
rested.
[41]
[71]
What happened here is this: Following the Phatudi J order, Big
Five appealed to the Full Court which heard full argument on 4 June

2014 but reserved judgment.  But before the hearing, settlement
negotiations between Big Five and Flemingo were at an advanced

stage.  The settlement was concluded on 13 June 2014 and a copy
of the signed agreement was sent to ACSA on 17 June 2014.

Flemingo wanted the settlement agreement to incorporate claims
against it by ACSA.  However, this did not materialise because

ACSA was not willing to waive its claims against Flemingo without
board approval.
[72]
On 19 June 2014, Flemingo delivered at the High Court several
notices, some of which were drawn in terms of rule 41(2) of the
Uniform
Rules of Court.
[42]
In terms of the rule 41(2) notices, Flemingo abandoned judgments of
Tolmay J and Phatudi J.  Tolmay J had granted an
interim
interdict against Big Five and in favour of Flemingo which later
succeeded in the review before Phatudi J.  In addition,
Flemingo
filed a notice which purportedly withdrew the review application.
This was done even though the matter had reached
an appeal stage and
the appeal had already been heard.
[73]
It is not clear from the papers why Flemingo had to file the
notices on matters that were addressed in the settlement agreement.

For example, the agreement records that Flemingo withdraws the review
application and the appeal.  In it Flemingo also abandons
the
orders of Tolmay J and Phatudi J.  But more significantly,
clause one of the agreement reveals the intention of the parties
to
it.  It stipulates:
“This agreement is in full and final settlement and compromise
of all or any claims (including for losses, damages and costs)
which
the parties have against each other arising out of the institution of
the interim interdict application, review application
by [Flemingo]
against [Big Five], ACSA and the Tender Board of ACSA and the appeals
to date.”
[74]
This is contrary to what was held by the Supreme Court of
Appeal in its judgment.  That Court concluded that the purpose
of
the agreement was to set aside the Phatudi J order.  It
stated:
“What was the purpose of the withdrawal and abandonment,
coupled with the agreement of settlement, if not to set aside the

order of Phatudi J?  It could be none other than to agree that
the award to Big Five by ACSA was to stand.  There is
no other
purpose that the parties could have intended to achieve.
The argument that the [Full Court] did not, independently of the
parties, intend to set aside the Phatudi J order cannot be

accepted.  The court order was made to give effect to the
agreement between Big Five and Flemingo.  Any distinction
between the parties’ intention and that of the Full Court is
thus obviously false.  If one asks what the parties intended
to
achieve in context – the facts known to them, the reasons for
the agreement, the clear statement of Flemingo that it withdrew
the
review application in its entirety and abandoned any right in the
order – the only answer could be that the parties did
not
intend the Phatudi J order to stand.  It was a necessary
implication of what they expressly stated.  There is no
other
sensible construction of the agreement.”
[43]
[75]
In so concluding the Supreme Court of Appeal overlooked a
number of things.  First, that Court overlooked the facts.  In

the founding affidavit filed in the High Court, Big Five had averred:
“Pursuant to the settlement agreement, Flemingo abandoned the
interdict and review judgment in their entirety by delivering
notices
in terms of rule 41(2) on 19 June 2014.  The Full Court,
mero
motu
made the settlement agreement an order of court on
20 June 2014.  That order, incorporating the
settlement agreement
is annexed as FA 17.”
[76]
It is evident that the parties never asked the Full Court to
make their settlement agreement an order of court.  Instead, the

Full Court acted of its own accord (
mero
motu
).
If the parties had intended to set aside the Phatudi J order, they
would have expressly said so in their settlement agreement
and they
would have asked the Full Court to make that agreement an order
of court.  They did none of this.
[77]
Second, the Supreme Court of Appeal disregarded the question
whether it was competent for the Full Court in present circumstances

to make the settlement agreement an order of court.  A perusal
of the settlement agreement shows that it was not.
[78]
Clause 3.8 of the agreement stipulates:
“Upon signature of this agreement by the parties [Flemingo]
acknowledges that ACSA is free to and can now implement the award
of
its tender (as referred to in this paragraph) to [Big Five] without
limitation or restriction and without any challenges thereto

whatsoever by [Flemingo].”
[79]
This clause implies that as from 13 June 2014 at the time the
agreement was signed by Flemingo, ACSA was free to implement the
tender
that had been set aside.  In law this was not competent.
Litigants cannot overturn a court order by private treaty.
What
was suggested in clause 3.8 was inconsistent with the Constitution in
a number of respects.  As the award of the tender
was in breach
of section 217 of the Constitution, it could not be implemented.
The reversal of the Phatudi J order if it
were to be done
competently, could not cure the inconsistency and the invalidity.
The invalidity of the tender stemmed from
its inconsistency with the
Constitution.
[80]
Section 2 of the Constitution affirms the supremacy of the
Constitution and declares that law or conduct inconsistent with it is

invalid.  In terms of the principle of objective constitutional
invalidity, the tender in question became invalid the moment
it was
awarded in breach of the Constitution.  Phatudi J merely
confirmed an existing objective fact.
[44]
[81]
Moreover, the present settlement agreement did not meet the
requirements for making such agreements an order of court.  The

Full Court overlooked this and readily made the agreement an order of
court.  Before the parties’ agreement is made
an order of
court, the court contemplating to do so must be satisfied that the
order it is about to make is “competent and
proper” and
that it is consistent with the Constitution and the law.  This
was affirmed in
Eke
where it was stated:
“This in no way means that 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.
That means its terms
must accord with both the Constitution and the law.”
[45]
[82]
As stated, the terms of the settlement agreement we are
concerned with here are inconsistent with the Constitution and this
rendered
the order of the Full Court invalid.  Consequently, the
order of the Full Court did not overturn the Phatudi J order and as
a
result Hughes J was right to dismiss Big Five’s application.
[83]
For all these reasons I support the order made in the first
judgment.
CACHALIA AJ:
[84]
The first judgment would overrule the Supreme Court of
Appeal’s judgment on the ground that it erred in interpreting
the settlement
agreement as having the effect of setting aside the
Phatudi J order.  The second judgment would also uphold the
appeal, but
on the ground that the Supreme Court of Appeal overlooked
the fact that it was not “competent and proper” for the
Full
Court to have incorporated the agreement in its order.  I
regret that I am unable to agree with either of the two judgments.

In my view, the Supreme Court of Appeal correctly found that the
purpose of the agreement was to set aside the Phatudi J order.

And, with one proviso, which I shall discuss in due course, it also
correctly concluded that it was lawful for the Full Court to
include
an agreement having this effect in its order.
[85]
Before considering the issues in this appeal, it is necessary
to set out the facts fully to understand the relevant background more

clearly.  I repeat some of the facts mentioned in the first two
judgments so as to make this judgment easier to read.
[86]
Following a competitive bidding process, ACSA awarded the
contract to Big Five on 26 August 2009.  The contract would
endure for ten years.  A month later, Flemingo, one of the two
unsuccessful bidders, applied to interdict the implementation
of the
contract pending a review of ACSA’s decision in the High
Court.  The High Court granted the interim interdict
on 11
December 2009.  ACSA and Big Five opposed the review.  On
17 May 2012, Phatudi J upheld the review and set aside
the decision
to award the contract to Big Five.  He also dismissed an
application for leave to appeal by Big Five on 2 October
2012.
ACSA did not apply for leave to appeal at this stage.
[87]
On 21 November 2012, the Supreme Court of Appeal granted Big
Five leave to appeal to the Full Court.  The appeal was set down

for 4 June 2014.  ACSA was content to abide by whatever the
outcome might be.
[88]
By May 2014, settlement negotiations between Big Five and
Flemingo had advanced rapidly.  Flemingo was concerned to avoid
any
claims against it by ACSA and therefore wanted the latter to be
party to the settlement agreement.  The draft agreement was
sent
to ACSA’s Group Executive, who supported it.  However, as
the approval of ACSA’s Board could not be obtained
before 4
June 2014, the appeal proceeded without its concurrence.
[89]
The appeal was fully argued and judgment reserved.  A
week later, before judgment was delivered, Big Five and Flemingo
concluded
the agreement, without providing for a waiver of claims
against Flemingo.
[90]
In terms of clause 3.3 of the agreement, Flemingo withdrew “in
its entirety the review application proceedings on the basis
of and
having the effect that these proceedings were never instituted”.
And, under clause 3.8, Flemingo accepted that
“ACSA is free to
and can now implement the award of its tender . . . to [Big Five]”.
Clause 6.4 stated that they
consented to the agreement being made an
order of court.
[91]
The agreement was delivered to ACSA on 17 June 2014.  On
19 June 2014, Flemingo filed notices in terms of rule 41(2) in which

it formally abandoned the interdict and review judgments.  On 20
June 2014, ACSA indicated by email that it would respond
formally
after it had assessed the legal and financial impact of the
agreement.  The Full Court incorporated the agreement
in its
order of 20 June 2014.
[92]
Following the Full Court order, Big Five repeatedly, but
unsuccessfully, attempted to obtain clarity from ACSA on the
implementation
of the tender.  On 14 January 2015, almost
seven months later, ACSA announced its intention to initiate a fresh
tender
process.  In response, Big Five launched the present
application on 6 March 2015 to compel ACSA to implement the
original
award of the tender to Big Five.  The application
failed in the High Court, but that ruling was reversed on appeal to

the Supreme Court of Appeal.  ACSA now appeals to this Court.
It is against this background that the issues in dispute
in this
appeal must be decided.  I first consider the status of the Full
Court order.
Status of the
Full Court order
[93]
Once a settlement agreement is made an order of court, it has
the same standing and qualities as any other court order.
[46]
Its effect is to finally determine the status of the rights and
obligations between the parties and the issues covered by
the
dispute.
[47]
It is enforceable like “any other” court order.
[48]
This means that it may only be impugned through a “legally
cognisable” process such as rescission or appeal.
[49]
[94]
ACSA abided by the order of the Full Court and made no attempt
to rescind or appeal it.  This, despite the fact that it was

aware of the order and, importantly, that Big Five believed that
its consequence was to revive the tender.  Yet, it now
contends
that it is not bound by it.
[95]
ACSA’s argument proceeds as follows: As an organ of
state, ACSA has a duty to uphold its constitutional obligations and
the
rule of law.  Once Phatudi J had found the award of the
tender to be unconstitutional and invalid, ACSA accepted that it
could
not proceed with the award of the tender to Big Five.  It
therefore elected to abide by the appeal, but not a private
settlement
agreement to which it was not party.  This is because
the order of constitutional invalidity was an order
in rem
,
binding on everyone, and incapable of being abandoned or set aside by
private agreement.  So, properly understood, ACSA only
abided by
the outcome of a reasoned judgment on the merits and not the order of
the Full Court that merely recorded the private
settlement agreement
between Big Five and Flemingo.
[96]
But ACSA’s contentions do not bear scrutiny.
First, the order of the Full Court was an order
in rem
binding
on everyone, no less than the Phatudi J order.  This is because
it finally determined the status of the Phatudi J
order and the
underlying administrative action that gave rise to it.  It did
so for all concerned, including ACSA.  ACSA
could not ignore the
order.
[50]
If it felt that it was not bound by the order, it had a duty to
either appeal the order or have it rescinded.
[97]
Second, the facts are against ACSA.  It did not agree to
be bound only by a reasoned judgment on appeal, as it would have us

believe.  It agreed to abide by the decision of the Full Court
without more.  It was aware of and encouraged the settlement

negotiations between Big Five and Flemingo and did not demur after
being informed that the agreement had been made an order of
court.
It strung Big Five along for seven months until the latter was
compelled to approach the High Court to enforce
its contractual
rights.  It cannot now be heard to contend otherwise.
[98]
Third, Big Five contended that the Full Court had not merely
recorded the settlement agreement in its court order but had made the

order after hearing full argument by the parties, having regard to
the record and both judgments of the High Court.
This
necessarily implies that the Full Court considered the merits of the
dispute.
[51]
It added that the Full Court “was thus satisfied that the
outcome envisaged in the settlement agreement was correct
and in the
interests of justice”.  Put differently, it contended that
the Full Court must be taken to have made an order
that it was
properly and competently entitled to make, which accorded with both
the Constitution and the law and was not inimical
to public
policy.
[52]
[99]
Yet, in its answering affidavit, ACSA adduced no facts to
gainsay this assertion; it merely stated that this was a matter for
legal
argument.  But it could not adopt this stance for the onus
rested upon ACSA – not Big Five – to demonstrate that
the
order was not competently and properly made.  ACSA therefore
cannot impugn the order of the Full Court.  It follows
too that
I am unable to agree with the second judgment’s holding in this
regard.
[53]
[100]
I do not take issue with the obiter dictum in the first
judgment that a court “should” give reasons when
sanctioning
a settlement agreement on appeal that sets aside a
judgment
in rem
of a court of first instance.
[54]
However, it does not follow that because reasons are not given, an
order incorporating a settlement agreement is not competent.
If
reasons are not given at the time the order is made, the parties may
request reasons afterwards, especially if intended to impugn
the
order.  ACSA could and should have adopted this course had it
intended to challenge the order through some legally cognisable

process.  It cannot take issue with the absence of a reasoned
judgment in these proceedings.
Interpreting the
Full Court’s order incorporating the settlement agreement
[101]
This brings me to the second issue in this appeal: The proper
interpretation of the order of the Full Court incorporating the
settlement
agreement.  In this regard, the key dispute is
whether that order had the effect of setting aside the Phatudi J
order.
If it did, as the Supreme Court of Appeal found it had,
the appeal must be dismissed.  If on the other hand it did not
do
so, which means that the order remains extant, as the
first judgment finds, the appeal must fail.  I proceed to
interpret
the settlement agreement.
[102]
The first judgment cites
Endumeni Municipality
[55]
as summarising the proper approach to interpreting a written
agreement.
[56]
To that, I would add the later dictum of the Supreme Court of Appeal
in
Bothma-Batho Transport
:
[57]
“Whilst the starting point remains the words of the document,
which are the only relevant medium through which the parties
have
expressed their contractual intentions, the process of interpretation
does not stop at a perceived literal meaning of those
words, but
considers them in the light of all relevant and admissible context,
including the circumstances in which the document
came into being.
The former distinction between permissible background and
surrounding circumstances, never very clear, has
fallen away.
Interpretation is no longer a process that occurs in stages but
is ‘essentially one unitary exercise’.”

(Footnote omitted.)
[103]
The Supreme Court of Appeal unanimously held that the purpose
of the settlement agreement was none other than to agree that the
award to Big Five by ACSA was to stand.  There was no other
purpose that the parties could have intended to achieve, it said.
[58]
[104]
However, ACSA contends that textually the settlement agreement
does not have that effect.  It maintains that the Full Court

order does not expressly uphold the appeal, set aside the Phatudi J
order, and settle the merits of the judgment or the validity
of the
tender award.  It goes no further, says ACSA, than to
acknowledge that it is free to implement the tender without
obligating it to do so.
[59]
[105]
The first judgment endorses ACSA’s contention and takes
issue with the Supreme Court of Appeal’s reasoning as having

placed “inordinate weight on the intention of the parties”
instead of examining the meaning of the actual words used.
Where
the intention of the parties is not explicit from the language, the
judgment continues, it is incorrect for a court
to place the entire
interpretative exercise on what the court imagines the intention of
the parties might have been.
[60]
[106]
On this approach, and regardless of their true intentions, the
reasoning continues, ACSA misunderstood the consequences of the true

import of the language used in clause 3.3 because neither the
withdrawal nor the abandonment of the Phatudi J order had the

legal effect of setting it aside.
[61]
[107]
I do not think that the criticism of the Supreme Court of
Appeal’s approach to the interpretation of the settlement
agreement
is warranted.  As is clear from
Endumeni
Municipality
and
Bothma-Batho Transport
above,
the
point of departure in an interpretive process is always the language
of the agreement in what is ultimately a unitary exercise.
But
it is only the starting point in an exercise to establish the
contractual intention of the parties.  Equally important
in this
analysis is the context within which the language is used in the
light of the document as a whole, the circumstances attendant
upon
its coming into existence, the apparent purpose to which it is
directed and the material known towards those responsible for
its
production.  Importantly, a sensible meaning is to be preferred
to one that leads to “unbusinesslike” results
or
undermines the apparent purpose of the document.
[108]
In my view, the error in the approach of the first judgment is
to fixate on the words used in the relevant clauses without weighing

them in the light of the other factors.  From this incorrect
premise it concludes that the agreement went no further than
to
settle the dispute between Big Five and Flemingo while leaving the
Phatudi J order in place.
[62]
[109]
But as I have said, this ignores the other factors.
First, the dispute was primarily about the award of the tender to Big
Five.  That was what the Phatudi J order set aside and what
the parties to the settlement agreement sought to undo.
The
agreement made clear in its preamble that its purpose was to settle
the review in which the Phatudi J order had been made.
To
that end, Flemingo expressly abandoned the Phatudi J order and
waived “all rights, title and interest in and to this
order”.
It also withdrew its application for review with the effect that
“these proceedings were never instituted”.

Importantly, the parties acknowledged that the effect of their
agreement was “that ACSA is free to and can now implement
the
award of its tender” to Big Five.  This could only
mean that the purpose of the agreement was to set aside
the Phatudi J
order so that the original award of the tender could be reinstated.
Second, the interpretation preferred
by the first judgment, which is
aimed at preserving the
in rem
judgment of Phatudi J,
rather than giving effect to the purpose of the document, is
insensible and leads to an “unbusinesslike”
result, which
is not what the parties wanted to achieve by this agreement.
[110]
To conclude: having regard to the factors enumerated, which
take account of the language used in its proper context, the
circumstances
attendant upon which the agreement was concluded and
made an order of court, the purpose to which it was directed and its
commercial
efficacy, it is quite clear that the parties intended that
their agreement would effectively set aside the Phatudi J order.

It ill behoves ACSA, which is a stranger to the agreement by which it
had agreed to abide, to now opportunistically contend that
it means
something other than what the parties themselves say it means.
[63]
[111]
I would accordingly dismiss the appeal with costs, including
the costs of two counsel.
For the Applicant: G
Marcus SC, B Morris, J Grant and A Armstrong instructed by
Norton Rose Fulbright South Africa Inc.
For the First
Respondent: W Trengove SC, S Budlender and A Msimang instructed
by CRD Attorneys.
[1]
Tshabalala v Johannesburg City Council
1962 (4) SA 367
(T) at
368H.
[2]
Shoprite Checkers (Pty) Ltd v MEC for Economic Development,
Eastern Cape
[2015] ZACC 23
;
2015 (6) SA 125
(CC);
2015 (9) BCLR
1052
(CC) at para 31;
Ferreira v Levin
N.O.; Vryenhoek v
Powell N.O.
[1995] ZACC 13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR
1
(CC) (
Ferreira
) at para 26.
[3]
Section 217 of the Constitution states:
“(1) When an organ of state in the national, provincial or
local sphere of government, or any other institution identified
in
national legislation, contracts for goods or services, it must do so
in accordance with a system which is fair, equitable,
transparent,
competitive and cost-effective.
(2) Subsection (1) does not prevent the organs of state or
institutions referred to in that subsection from implementing a

procurement policy providing for—
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of
persons, disadvantaged by unfair discrimination.
(3) National legislation must prescribe a framework within which the
policy referred to in subsection (2) must be implemented.”
[4]
Marine 3 Technologies Holdings (Pty) Ltd v
Afrigroup Investments (Pty) Ltd
[2014]
ZASCA 208
;
2015 (2) SA 387
(SCA) (
Marine
3 Technologies
) at para 6.
The
terms of the settlement agreement in
Marine
3
Technologies
acknowledged that “[t]his is a
judgment in the public interest that cannot be abandoned by
Afri-Group” at para 5.
The agreement therefore merely
recorded that Afri-Group saw no reason why the Supreme Court of
Appeal should not find in
favour of the appellant and that it would
not oppose the appeal.  The parties did not purport to
determine the outcome of
the appeal.  The Supreme Court of
Appeal reached a decision on the merits, taking into account the
parties’ settled
position.  This approach was also
applied by the Supreme Court of Appeal in
The
GAP Inc v Salt of the Earth Creations (Pty) Ltd
[2012] ZASCA 68
;
2012 (5) SA 259
(SCA) at para 2.
[5]
Stuttafords Stores v Salt of the Earth Creations
[2010] ZACC
14
;
2011 (1) SA 267
(CC);
2010 (11) BCLR 1134
(CC) at paras 10-2.
[6]
Eke v Parsons
[2015] ZACC 30; 2016 (3) SA 37 (CC); 2015 (11)
BCLR 1319 (CC).
[7]
Id at para 26.
[8]
Big Five Duty Free (Pty) Ltd v DFS Flemingo SA (Pty)
Ltd
,
unreported order in the High Court under case no A887/2012 (Full
Court order).
[9]
Big Five Duty Free (Pty) Limited v Airports Company South Africa
Limited
[2016] ZAGPPHC 688 at para 57.1.
[10]
Big Five Duty Free (Pty) Limited v Airports Company South Africa
Limited
[2017] ZASCA 110
;
[2017] 4 All SA 295
(SCA) (SCA
judgment) at para 29.
[11]
Section 217(1) of the Constitution.
[12]
D F S Flemingo SA (Pty) Ltd v Airports Company South Africa Ltd
[2012] ZGPPHC 66 at paras 21-2.  That kind of order in
itself raises a sufficient constitutional issue within this Court’s

jurisdiction:
AllPay Consolidated Investment Holdings (Pty) Ltd v
Chief Executive Officer, South African Social Security Agency
[2013] ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) at para
4.  See also
Department of Transport v Tasima (Pty) Limited;
Tasima (Pty) Limited v Road Traffic Management Corporation
[2018]
ZACC 21
at para 37; and
Trencon Construction (Pty) Ltd v
Industrial Development Corporation of South Africa Ltd
[2015]
ZACC 22
;
2015 (5) SA 245
(CC);
2015 (10) BCLR 1199
(CC) at para 1.
[13]
Sections 165(5), 167(3)(b)(i) and (ii) of the Constitution
establishes this Court’s jurisdiction in this matter.

See further
Eke
above n 6 at para 1.
[14]
SCA judgment above n 10 at paras 26-7.
[15]
See [1] above.
[16]
Road Accident Fund v Mdeyide (Minister of Transport intervening)
[2007] ZACC 7
;
2008 (1) SA 535
(CC);
2007 (7) BCLR 805
(CC)
(
Mdeyide
) at para 43.
[17]
Merafong City Local Municipality v Anglogold Ashanti Limited
[2016] ZACC 35
;
2017 (2) SA 211
(CC);
2017 (2) BCLR 182
(CC)
(
Merafong
) at para 68.
[18]
Qhinga v S
[2011] ZACC 18
;
2011 (2) SACR 378
(CC);
2011 (9)
BCLR 980
(CC) at para 35.
[19]
Mdeyide
above n 16 at para 43.
[20]
Florence v Government of the Republic of South Africa
[2014]
ZACC 22; 2014 (6) SA 456 (CC); 2014 (10) BCLR 1137 (CC).
[21]
Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd
[2011] ZACC 30
;
2012 (1) SA 256
(CC);
2012 (3) BCLR 219
(CC)
(
Everfresh
).
[22]
Florence
above n 20 at para 91.
[23]
Everfresh
above n 21 at para 79.
[24]
[73]-[78] below.
[25]
[79] below.
[26]
[82] below.
[27]
Natal Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA) (
Endumeni Municipality
)
at para 18.  Approach to interpretation cited with approval in
the judgment of Cameron J in
National Credit Regulator v
Opperman
[2012] ZACC 29
;
2013 (2) SA 1
(CC);
2013 (2) BCLR 170
(CC) at fn 105 and see also see para 93-94.  Later cited with
approval and discussed in the majority judgment of Cameron J
in
AMCU v Chamber of Mines of South Africa
[2017] ZACC 3
;
2017
(3) SA 242
(CC);
2017 (6) BCLR 700
(CC) at fn 28.
[28]
It is quite clear from the Uniform Rules of Court that withdrawal is
open to the parties before a judgment is given, but not

subsequently:
“41
Withdrawal
, Settlement, Discontinuance,
Postponement and Abandonment:
(1)(a) A person instituting any proceedings may at any time before
the matter has been set down and thereafter by consent of
the
parties or leave of the court withdraw such proceedings, in any of
which events he shall deliver a notice of withdrawal and
may embody
in such notice a consent to pay costs; and the taxing master shall
tax such costs on the request of the other party.
. . .
(2) Any party in whose favour any decision or judgment has been
given, may abandon such decision or judgment either in whole
or in
part by delivering notice thereof and such judgment or decision
abandoned in part shall have effect subject to such abandonment.

The provisions of subrule (1) relating to costs shall mutatis
mutandis apply in the case of a notice delivered in terms of this

subrule.
(3) If in any proceedings a settlement or an agreement to postpone
or withdraw is reached, it shall be the duty of the attorney
for the
plaintiff or applicant immediately to inform the registrar
accordingly.
(4) Unless such proceedings have been withdrawn, any party to a
settlement which has been reduced to writing and signed by the

parties or their legal representatives but which has not been
carried out, may apply for judgment in terms thereof on at least

five days' notice to all interested parties.”
[29]
Section 4 of the agreement is entitled “[t]he Appeal
Proceedings” and clause 4.1 states:
“The Respondent withdraws its opposition to the appeal and any
rights it may acquire and have acquired in respect of the
appeal
against the Appellant.  The Appellant thereafter withdraws its
appeal against Respondent.  Appellant and Respondent
agree to
bear and pay their own legal costs and disbursements.”
[30]
See [1] on the proposition that parties can’t set aside
judgments
in rem
by agreement.
[31]
Liversidge v Anderson
[1942] AC 206; [1941] UKHL 1l; [1941] 3
All ER 338.
[32]
“‘When
I use a word’, Humpty Dumpty said, in rather a scornful tone,
‘it means just what I choose it to
mean
-
neither
more nor less’.  ‘The question is’, said
Alice, “whether you can make words mean so
many different
things’.  ‘The question is’, said Humpty
Dumpty, ‘which is to be master
-
that’s
all’”.  L Carroll
Through the Looking-Glass
(Macmillan and Co, London 1872) chapter 6, quoted in
Liversidge
,
above n 32 at 245.
[33]
But see above n 30.
[34]
SCA judgment above n 10 at paras 25-7.
[35]
Commissioner for the South African Revenue Service v The
Executors of Estate of Late Sidney Ellerine
[2018] ZASCA 39
at
para 31.
[36]
See above n 27.
[37]
Eke
above n 6
at paras 25-6.
[38]
Mpumalanga Department of Education v Hoërskool Ermelo
[2009] ZACC 32
;
2010 (2) SA 415
(CC);
2010 (3) BCLR 177
(CC) at para
96.
[39]
Mvumvu v Minister of Transport
[2011] ZACC 1
;
2011 (2) SA 473
(CC);
2011 (5) BCLR 488
(CC) at para 40.
[40]
Justice
Alliance of South Africa v President of Republic of South Africa
[2011] ZACC 23
;
2011 (5) SA 388
(CC);
2011 (10) BCLR 1017
(CC) at
para 33;
Fose v Minister of Safety and Security
[1997] ZACC
6
;
1997 (3) SA 786
(CC);
1997 (7) BCLR 851
(CC) at para 96.
[41]
See above [3].
[42]
See rule 41(2) above n 28.
[43]
SCA judgment above n 10 at paras 26-7.
[44]
Ferreira
above n 2 at para 28.
[45]
Eke
above n 6 at paras 25-6.
[46]
Eke
above n 6 at para 29.
[47]
Id at para 31.
[48]
Id at para 29.  See also
Moraitis Investments (Pty) Ltd v
Montic Dairy (Pty) Ltd
[2017] ZASCA 54
; 2017 (5) 508 (SCA) at
paras 10 and 16.
[49]
Provincial Government: North West Province v Tsoga Developers CC
[2016] ZACC 9
; 2016 JDR 0553 (CC);
2016 (5) BCLR 687
(CC) at
para 52.
[50]
Department of Transport v Tasima (Pty) Ltd
[2016] ZACC 39
;
2017 (2) SA 622
(CC);
2017 (1) BCLR 1
(CC) at paras 177-99.
[51]
To the extent that the SCA judgment above n 10 holds that an appeal
court making a settlement agreement an order of court having
the
effect of setting aside judgment
in rem
need not have regard
to the underlying merits of the dispute, I respectfully disagree.
[52]
Eke
above n 6 at paras 25-6.
[53]
See [82] above.
[54]
See [1].  However at [3] it is said that a court “must”
give reasons when a court on appeal approves a settlement
agreement
that sets aside a judgment
in rem
.  I do not read this
paragraph to mean that an order not accompanied by reasons would be
incompetent.
[55]
Endumeni Municipality
above n 18.
[56]
See [29].
[57]
Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport
(Edms) Bpk
[2013] ZASCA 176
;
2014 (2) SA 494
(SCA) (
Bothma-Batho
Transport
) at para 13.
[58]
SCA judgment above n 10 at para 26.
[59]
The relevant clauses of the settlement agreement are set out at [30]
to [34].
[60]
See [51] to [54] above.
[61]
See [55] to [58].
[62]
See [44] to [48].
[63]
Compare
Aussenkehr Farms (Pty) Ltd v Trio Transport
[2002]
ZASCA 28
;
2002 (4) SA 483
(SCA) at para 25.