Spartan
Caselaw
CASE LAW UPDATE
25 October 2024
ADMINISTRATIVE – Tender – Scoring and B-BBEE – Lawfulness of new preferential procurement scoring system – Alleged non-compliance with implementation guideline meritless – Decisional rationality challenge misplaced – City was empowered to determine and implement its own procurement policy and specific goals for system of preference – No basis established to set aside new scoring system nor for directing City to return to and implement previous system – Application dismissed.
Facts: The City of Cape Town’s new scoring system allocates preference points to bidders based on ownership of the bidding entity by women, Black people, disabled people and the extent to which the bidding entity has promoted small and micro enterprises. The applicants have brought a wide-ranging substantive and procedural challenge to the legality of the new scoring system. Their central complaint is that it is not only irrational and unconstitutional but exclusionary in both its form and effect. The applicants contend that given what they say are the already small margins in construction work, the City’s new scoring system establishes an insurmountable threshold to their participation in bids for tenders to which the new scoring system applies. The key difference between the 2022 (new) and 2017 (old) Procurement Regulations, is that the 2022 regulations do not regulate how organs of State are required to award the 10 or 20 preference points for specific goals. Regulation 3 of the 2022 Procurement Regulations records that it is for an organ of State to stipulate in its tender documents the applicable preference point system as envisaged in regulations, 4, 5, 6 or 7.
Application: The application requires the court to decide whether the new preferential procurement scoring system introduced by the City in relation to bids for tenders in the construction sector and its application to two construction tenders advertised by the City, is lawful and consistent with the Constitution.
Discussion: The City states that following the publication of the 2022 Procurement Regulations in November 2022, its SCM Department convened immediately to address the impact of the regulations on the City’s SCM policy, which required amendment to address the changes in the regulatory landscape. The SCM Department commenced working on amendments to the SCM Policy in November 2022 by considering the kinds of specific goals that it intended advancing through the award of preference points. According to the City, during this process it consulted broadly and internally with other City departments in the consideration of the specific goals to be advanced. The consultation process also included meetings with officials in the Mayor’s office. The decision-making process, which resulted in the development of the City’s Implementation Guideline, amounts to the creation or formulation of policy relating to preferential procurement, not the implementation of existing policy. The City states that before formulating the Implementation Guideline, it had followed a careful process of obtaining legal advice on a range of matters relevant to the implementation guideline and had considered the points to be awarded for specific goals in each category of the 20 or 10 preference points to be allocated for tenders. The City’s decision to devise and introduce a new preferential procurement scoring system did not impose an obligation on the City to ensure that the applicants were heard before the new scoring system came into effect.
Findings: It would be untenable to suggest that thousands of organs of State across the country would be required to embark on a process of public participation when devising or amending their preferential procurement policies. The applicant’s procedural fairness argument is without merit. The process followed by the City was a careful, considered and rational process. The absence of a pre-decision hearing being afforded to the applicants in the process which the City followed in introducing its new scoring system, does not establish a review ground based on process irrationality. The applicants contended that the new scoring system is irrational and unlawful in that it awards points awarded for gender and micro and small enterprises, which are not measurable. It is clear from the evidence required for the claiming of preference points that the City can determine the percentage of female ownership of a company from a Company Registration Certificate or Central Supplier Database report. The evidence also shows that the City will be able to determine the micro or small enterprise specific goals from the financial statements of the micro and small enterprise, or its B-BBEE status level. No basis has been established by the applicants to set aside the new scoring system nor for the extraordinary proposition that it is open to the court to grant relief directing the City to return to and implement its previous scoring system.
Order: The application is dismissed with costs.
MAGARDIE AJ
CIVIL PROCEDURE – Summary judgment – National Credit Act – Instalment sale agreement for vehicle – Defendant missing four payments – Making payment equal to two instalments on delivery of summons – Bank electing to unilaterally cancel credit agreement –Such remedy would create serious and unjust outcome – Contrary to objectives of National Act – Appropriate remedy is specific performance – Application for summary judgment refused – National Credit Act 34 of 2005.
Facts: In 2023, the plaintiff (Nedbank) and the defendant (Mr Matshethe) entered into a written instalment vehicle sale agreement. The plaintiff provided credit to the defendant to purchase a Kia Picanto 1.0 LX. The defendant breached the credit agreement by failing to pay four consecutive monthly instalments. The National Credit Act 34 of 2005 applies to the agreement. The plaintiff delivered a section 129 notice to the defendant of his breach of the agreement and the amount outstanding and due in terms of the agreement and, on failure by the defendant to pay, of its intention to cancel the agreement.
Application: An application for summary judgment, enrolled on the unopposed roll. The plaintiff sought an order confirming the cancellation of the vehicle financing agreement, the return of the vehicle, and costs for the application on the attorney-and-client scale.
Discussion: Upon delivery of the combined summons, the defendant made payments equalling two monthly instalments and sent the plaintiff proof of the same. Notwithstanding the payments received after the summons were delivered, the plaintiff proceeded to institute an application for summary judgment. Plaintiff’s counsel submitted that the court was bound to the plaintiff’s election of the remedy for breach and further that the court had no discretion to interfere with or alter the plaintiff’s choice of remedy in case of unilateral cancellation of a credit agreement regulated in terms of the National Credit Act. The court notes that the plaintiff did not have any proof that it delivered on the defendant the summary judgment application, and no condonation application, nor was there an affidavit from the instructing attorney explaining the failure to have the application served by the sheriff or on the defendant at all.
Findings: The plaintiff’s choice to unilaterally cancel the credit agreement, despite the brief period during which the defendant was in breach and the defendant's subsequent efforts to resolve the outstanding arrears, weighed in favour of allowing the contract to continue. Cancelling the credit agreement in such circumstances would result in a severe injustice, potentially leaving the debtor in a deeper financial crisis. This situation highlights the irrationality of electing to cancel the credit agreement and reclaim the vehicle, particularly under an agreement regulated by the National Credit Act. Such a remedy would create a serious and unjust outcome, contrary to the facts of the case and the underlying objectives of the National Credit Act. Cancellation of a contract is an extraordinary remedy. The court is not convinced that the applicant has made a case for cancellation, despite the existence of a cancellation clause. The appropriate remedy is specific performance, and a case has not been made as to why specific performance would not be appropriate.
Order: The plaintiff’s application for summary judgment lacks the necessary procedural compliance with the relevant provisions of the Practice Manual, Uniform Rules of Court, and National Credit Act. The founding affidavit in the interlocutory summary judgment application, and particulars of claim in the main action, lack the necessary averments to support the cause of action and relief sought. The application for summary judgment is refused. There is no order as to costs. The plaintiff must cause a copy of this judgment and order to be served on the defendant prior to the enrolment of the main action proceedings, in the event they resume. The Registrar must provide the Legal Practice Council (both provincial and national) with a copy of this judgment.
MORGAN AJ
COSTS – Party and party – Uniform Rule 67A – Claim for damages of R2,022,663 arising out of fall at mall premises – Order for payment of R915,125 – Value of claim is substantial – Architectural aspect takes claim out of ordinary and adds complexity – Relief sought is important to both plaintiff and community accessing Boardwalk Mall – However, the matter did not involve determination of unusual or novel aspects of the law or the interpretation of new legislation to warrant costs on scale C – Costs of counsel on High Court scale B awarded.
Claim: The plaintiff fell headlong down a flight of stairs while leaving the Boardwalk Mall after shopping. The plaintiff alleged that she suffered damages as a result of act and or omissions on the part of the defendant in relation to the mall premises. That defendant had a duty to take all necessary steps to ensure that walkways, passages and steps did not pose a danger to anyone. Plaintiff contends that they failed to carry out this duty of care with particular reference to the design of the ramp, steps, colour of tiles and the edging. The defendant was referred to a comprehensive report that was compiled by architect detailing the defects. The plaintiff initially claimed damages of R2,022,663. The defendant raised a number of defences, inter alia, that plaintiff’s fall was due to her sole negligence, alternatively contributory negligence. Also raised by the defendant was a contractual defence, namely that notices were displayed on notice boards to the effect that persons entering the premises in question did so at own risk and that the defendant’s liability was excluded.
Uniform Rule 67A: By agreement between the parties, the court issued an order for the defendant to pay the plaintiff the sum of R915,125. Even though the parties were in agreement that the defendant should pay the party and party costs of the plaintiff’s action, they could however not agree on the scale of such costs, as to which of the recently introduced rungs of scales A, B or C should apply. Plaintiff contends that the matter was complex and that the appropriate scale should be scale C, whilst the defendant contends that the appropriate scale should be scale B.
Importance of relief sought: There can be no doubt that shoppers or visitors accessing a mall, in particular Boardwalk Mall, have an interest or need to be assured that care will be taken by management or owners of the mall that they will be safe from harm and that the facilities at the mall do not pose a danger to anyone. Further, that in the event of being injured or harmed, the mall will not lightly escape liability. This by means of raising a contractual defence to the effect that persons entering the mall concluded a tacit contract with the defendant that the latter would not be liable should they suffer injury or damage while inside the mall. This contributes to the relief being of importance, not only to the plaintiff but to the community at large.
Findings: The value of plaintiff’s claim is substantial. The architectural aspect takes the plaintiff’s claim out of the ordinary. The aspect of the architectural layout of the mall lends complexity to the claim. There is no doubt that the relief sought is important to both the plaintiff and the community accessing Boardwalk Mall. The value of the claim is substantial. However, the matter did not involve the determination of unusual or novel aspects of the law or the interpretation of new legislation to warrant costs on scale C.
Order: The defendant shall pay plaintiff’s agreed or taxed party and party costs, which shall include costs of counsel on High Court scale B.
BESHE J
LABOUR – Restraint – Protectable interest – Security industry – Employed by applicant for less than two months – Did not have any time to obtain trade secrets or confidential information of applicant – Not privy to sales or marketing of company – Respondent would be barred from being employed in security, countrywide, for three years – Clause is contrary to public policy – Lack of jurisdictional curtailment – Enforcing restraint would be contrary to public policy – Application dismissed.
Facts: The applicant carries on business in the security industry and has various branches countrywide. According to the employment contract, the respondent was employed as a technical manager, subject to a restraint clause. The respondent resigned from employment with the applicant. In the letter of resignation, he indicated that he felt the need to move on from the security industry for personal reasons. After his resignation, he worked the two weeks’ notice period as stipulated in the employment contract. It came to the knowledge of the applicant that the respondent was in fact employed by Allsound Security CC, also situated in the Knysna district and the applicant’s biggest competitor in the security industry. The applicant contends that as a former employee of the applicant, that the respondent has inside information in respect of the company, more specifically its client base and that he is in a position to exploit the applicant’s client list and assist the applicant’s competitor to tailor their services in such a manner that will enable it to attract clients from the applicant, where such information is not freely available to third parties.
Application: Urgent application in which the applicant, by way of interdict, seeks to enforce a restraint of trade clause as contained in the respondent’s contract of employment. The applicant contends that the respondent is actively contacting and soliciting clients of the applicant contrary to the contract of employment, which is causing the applicant to lose existing clients.
Discussion: On the respondent’s version, he had been in the employ of the applicant for less than two months. He most certainly did not have any time to obtain trade secrets or confidential information of the applicant. In any event, he was a technical manager and had not been privy to the sales or marketing of the company. Regarding the allegation that the respondent knew the mark-ups of the applicant, the applicant did not deny that the respondent only met the Knysna Quays representatives on two occasions whilst they were obtaining quotations from various other service providers. In fact, the applicant did not deal with the allegations at all in its reply made by the owner of Allsound Security CC and the committee member of the Knysna Quays. As it now stands, the respondent would be restrained from working in the only industry that he has known, and for skills he is only possessed, for a lengthy duration throughout the country. Given the fact that the applicant only operates in the Knysna district to the extent that its client base is operational there, it defies logic why the respondent would be restrained from working, in say Cape Town for another security company, for as the clause now currently provides, any company which provides the same or similar services as the applicant would be precluded from offering the respondent employment.
Findings: The respondent has been employed in the security industry for fifteen years which duties included the quotation and installation of security products such as alarms. He has no other qualifications. If one has regard to the restraint of trade clause, the period of restraint is for a period of three years and has no geographical limitations; in other words, the respondent in terms of the clause would be barred from being employed in the security industry, countrywide, for a period of three years. This clause is contrary to public policy because of the length of the restraint and lack of jurisdictional curtailment. The respondent was employed by the applicant for less than two months; the skills and knowledge that he derived is common knowledge in the particular industry and the supplier connections are common to all security companies. There are no trade secrets or confidential information belonging to the applicant which the respondent was privy too. The applicant has also not proved that the loss of its clients is directly linked to the employment of the respondent by Allsound Security CC and that the respondent is in possession of the applicant’s client list.
Order: The application is dismissed to the extent ordered hereunder. In the event that the respondent is no longer stationed at Pezula Private Estate and remains in the employ of Allsound Security CC performing work the same or similar to that of technical manager, then in that event, the respondent will be interdicted and restrained until 23 May 2025 and limited to within the Southern Cape district of the Western Province, for a period of twelve months calculated from the date of resignation.
KUSEVITSKY J
THE DECLINE IN THE STANDARD AND QUALITY OF LEGAL PRACTITIONERS
From my general observations in presiding in motion court, if the continuing decline in the standard and quality of legal practitioners persists, and courts do not insist on the converse and compliance with traditional ethics and court etiquette from legal practitioners, it may eventually lead to those practitioners being considered for judicial appointment in the near future when they apply and sadly if an appointment is made from this batch of practitioners absent of those competent practitioners who shy away from availing themselves for judicial office, simply because of how difficult it has become being a Judge today, more so because Judges have become more vulnerable to unwarranted complaints, attacks or criticism with minimal to no protection by the relevant authorities in the other arms of government, when fulfilling their constitutional functions and obligations entrenched in section 165 of the Constitution, then the phrase “in the absence of the best, the worst become the best [only option available]” will manifest in the Judiciary and possibly assassinate a critical constitutional institution and arm of government regarded as the moral compass of the Republic.
MORGAN AJ
PSYCHOLOGISTS TO INVESTIGATE
From the beginning, the relationship of the parties was characterised by revelry coupled with substance abuse. The applicant contends that after the children were born she did not participate in the revelry, however, the respondent continued to do so, this inevitably led to the breakdown of the marriage. The applicant moved out of the matrimonial home with the two minor children and the respondent went to a psychiatric hospital for a few days. The applicant later sought a protection order against the respondent. The child M has learning disabilities and attends a special school. M is not reliable as she has a tendency to fabricate and make serious allegations against both parties. The court discusses the investigation to be arranged by psychologists and the contact arrangements with the children.
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