Phuhlani Bafazi Construction (Pty) Ltd and Another v Passenger Rail Agency of South Africa Ltd and Others (Leave to Appeal) (2025/155065) [2025] ZAWCHC 608 (24 November 2025)

begin wrapper begin container begin header begin slogan-floater end slogan-floater - About SAFLII About SAFLII - Databases Databases - Search Search - Terms of Use Terms of Use - RSS Feeds RSS Feeds end header begin main begin center # South Africa: Western Cape High Court, Cape Town South Africa: Western Cape High Court, Cape Town You are here: SAFLII >> Databases >> South Africa: Western Cape High Court, Cape Town >> 2025 >> [2025] ZAWCHC 608 | Noteup | LawCite sino index ## Phuhlani Bafazi Construction (Pty) Ltd and Another v Passenger Rail Agency of South Africa Ltd and Others (Leave to Appeal) (2025/155065) [2025] ZAWCHC 608 (24 November 2025) Phuhlani Bafazi Construction (Pty) Ltd and Another v Passenger Rail Agency of South Africa Ltd and Others (Leave to Appeal) (2025/155065) [2025] ZAWCHC 608 (24 November 2025) Download original files PDF format RTF format make_database: source=/home/saflii//raw/ZAWCHC/Data/2025_608.html sino date 24 November 2025 IN THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE DIVISION, CAPE TOWN) CASE NO: 2025 – 155065 In the matter between: PHUHLANI BAFAZI CONSTRUCTION (PTY) LTD T/A CHUMA SECURITY SERVICES Applicant and PASSENGER RAIL AGENCY OF SOUTH AFRICA LTD First Respondent THE CHAIRPERSON OF THE BOARD OF THE PASSENGER RAIL AGENCY OF SOUTH AFRICA LTD Second Respondent THE GROUP CHAIRPERSON OF THE BOARD OF THE PASSENGER RAIL AGENCY OF SOUTH AFRICA LTD Third Respondent SECHABA PROTECTION SERVICES WESTERN CAPE (PTY) LTD Fourth Respondent CHIPPA TRAINING ACADEMY CC T/A CHIPPA PROTECTION SERVICES Fifth Respondent Neutral citation: Coram: ROUX AJ Heard :            24 November 2025 Delivered :     24 November 2025 ORDER (a) The first to third respondents’ application for leave to appeal is refused, with costs, including the costs of two counsel, on scale C in respect of the (senior) junior counsel and on scale B in respect of junior counsel. (b) The applicant’s application for leave to appeal is refused, with costs, including the costs of two counsel, on scale C in respect of the senior counsel and on scale B in respect of junior counsel. # JUDGMENT ON LEAVE TO APPEAL JUDGMENT ON LEAVE TO APPEAL ROUX AJ: A. INTRODUCTION [1] The first to third respondents are seeking leave to appeal to the Full Court of the Western Cape Division, Cape Town, alternatively to the Supreme Court of Appeal, against the judgment and order granted by this Court on 1 October 2025. [2] The applicant is seeking leave to appeal to the Supreme Court of Appeal, alternatively the Full Court, against the whole of the judgment and order granted by this Court on 1 October 2025. [3] In determining whether leave to appeal ought to be granted, the test that the Court must apply is set out in s 17 of the Superior Courts Act 10 of 2013 ( the Superior Courts Act ) which provides: ‘ Leave to appeal may only be given where the Judge or Judges concerned are of the opinion that– (a) (i) the appeal would have a reasonable prospect of success; or (ii) there is some other compelling reason why the appeal should be heard,  including conflicting judgments on the matter under consideration; (b) the decision sought on appeal does not fall within the ambit of section 16(2)(a) ; and (c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties. [4] The Supreme Court of Appeal in Ramakatsa and Others v African National Congress and Another [1] has restated the test an applicant seeking leave to appeal must pass. If a reasonable prospect of success is established, leave to appeal should be granted, and similarly, if there are some other compelling reasons why the appeal should be heard, leave to appeal should be granted. The test of reasonable prospects of success postulates a dispassionate decision based on the facts and the law that a court of appeal could reasonably arrive at a conclusion different to that of the court of first instance. In other words, the applicants need to convince this Court on proper grounds that they have prospects of success on appeal. Those prospects of success must not be remote, but there must exist a reasonable chance of succeeding. A sound rational basis for the conclusion that there are prospects of success must be shown to exist. [5] In the context of s 17(1) of the Superior Courts Act, the phrase ‘ may only be given’ is an indication that this court’s power to grant leave to appeal arises upon proof that the circumstances in ss 17(1)(a) to (c) have been met. Put differently, the Court’s discretion is circumscribed because it may not grant leave to appeal based on a reason other than those mentioned in ss 17(1)(a)(i) or (ii). As to whether there are compelling reasons why the appeal should be heard, there must be a strong reason for granting leave to appeal on this ground. The Court should give careful and proper consideration to the reason advanced before categorising it as compelling – s 17(1)(a)(ii) should therefore not be invoked for flimsy reasons. Consequently, if the requirements in ss 17(1)(a) to (c) are not met, and in particular where the applicants cannot demonstrate that one of the circumstances set out in ss 17(1)(a)(i) or (ii) exist, this Court cannot in such circumstances grant leave to appeal. Indeed, it is duty bound to refuse leave to appeal. [6] I shall first deal with the respondents’ application and thereafter with the application brought by the applicant. B. GROUNDS OF APPEAL – ON BEHALF OF THE RESPONDENTS [7] The respondents’ first ground of appeal is premised on the contention that the Court erred in making an order which is final in effect, whereas the applicant only sought an interim order. [8] The Court was obliged to consider whether the applicant established a contractual right – derived from an alleged tacit contract - to continue rendering services on the same terms and conditions as previously contracted for. [2] In the context of an interim order the applicant was only required to establish a prima facie right although open to some doubt. [9] On the papers the Court found that the applicant partly succeeded in establishing a contractual right – derived from a tacit contract concluded, but that such right was subject to a valid notice of termination in terms whereof it would come to an end on 30 November 2025. Accordingly, it was found that the applicant was not entitled to continue rendering services as previously contracted for. [10] In making the said finding the Court was required to consider the validity of the first respondent’s notice of termination dated 29 August 2025, which is the subject of the relief earmarked for determination under Part B. Had the said termination been effective in law, the applicant would not have been entitled to relief under part A. In fact, upon a proper interpretation of the said notice, it constituted a denial of the existence of the tacit contract concerned and therefore a repudiation thereof. Accordingly, by finding that a tacit contract was concluded, the Court by implication found that the notice of termination constituted an unlawful act of repudiation (and therefore is of no force and effect). [11] During argument the Court requested the parties to present argument on the question whether the Court’s determination of the relief under Part A may finally dispose of the matter. Accordingly, the parties were given an opportunity to address the Court on the issue whether the determination of the issues under part A may result in the final determination of the parties’ rights. [12] In the circumstances, there is no reasonable prospects of another Court finding that an interim order should have been made subject to the review of the validity of the respondents’ termination notice, when such notice in effect amounted to a denial of the tacit contract, which was the subject of the main dispute between the parties and which the Court found was in fact concluded. Accordingly, there was no need for any further review of the decision to terminate. [13] The respondents second ground of appeal is premised on the no-cession clause. The third ground is premised on the contention that the Court erred in finding that a tacit contract was concluded. The fourth ground challenges the finding in relation to the agreement to suspend the enforcement of PRASA’s rights arising from the no-cession clause. It is alleged that no such suspension was pleaded. The said grounds are all interlinked. [14] For the reasons given, the Court found that the applicant had succeeded in establishing a tacit contract. Those reasons have not been challenged, or in any event not seriously. From 2022 until August 2025, to the knowledge of PRASA, the applicant rendered the security services previously rendered by High Goals. PRASA in fact paid the applicant for such services. Numerous notices were sent to PRASA in this regard, including one by the liquidators who informed PRASA of the fact that Phuhlani took over the business of High Goals and that all payments for the rendering of security services by Phuhlani should be made directly into their bank account. It was only on 29 August 2025 that PRASA dispatched notices to the liquidators of High Goals and to Phuhlani in which it purported to terminate the agreement (with High Goals) and the rendering of services by Phuhlani. [15] Once it is established that PRASA tacitly agreed to contract with Phuhlani and carried on with the contract for about 3 years, it follows that it thereby tacitly agreed not enforce its rights derived from the no-cession clause. [16] The Court was therefore duty-bound to consider the legal effect of the provisions of the no-cession and non-variation clauses on such a tacit agreement. [17] Both the said clauses prescribe, by agreement, formalities which must be complied with for the validly of any assignment, variation and waiver. [18] The tacit contract constitutes an assignment of High Goals’ rights and obligations arising from its month-to-month agreement with PRASA, which was extended from time to time on the same terms and conditions as the original master agreement. As such, Phuhlani replaced High Goals in rendering security services to PRASA – which amounts to a delegation of obligations – and in receiving payment for such services – which amounts to the cession of the right to receive payment. [19] PRASA’s conduct in agreeing to a tacit assignment and thereby not to enforce the no-cession clause in law either constitutes an agreement to vary or waive the no-cession clause, or an agreement to suspend the enforcement thereof. [20] The non-variation clause provides that no amendment of the agreement or any term thereof shall be binding unless recorded in a written document signed by the parties. [21] It is self-evident that a tacit contract falls short of the aforesaid requirement for a valid variation. [22] In addition, the non-variation clause includes a non-waiver clause, which provides that no waiver of the agreement or any term thereof shall be binding unless recorded in a written document signed by the parties. [23] It is self-evident that a tacit contract falls short of the aforementioned requirement for a valid waiver. [24] However, based on the authorities referred to in footnote 18 of the judgment, a party in the position PRASA is entitled to agree to suspend the enforcement of its rights flowing from the no-cession clause. [25] If one has regard to the facts and circumstances supporting the finding of a tacit contract, it is clear that PRASA’s conduct was wholly incompatible with any intention to enforce the no-cession clause. Accordingly, any intention consistent with enforcement is implausible. An intention to amend/vary or waive the no-cession clause through a tacit contract, in the face of a non-variation and non-waiver clause, is of no force and effect and will render such tacit contract void. Hence, it is implausible that PRASA, having agreed not to enforce the no-cession clause, would have had any such intention. [26] Accordingly, the intention not to enforce is only compatible with an agreement to suspend the right to enforce it. [27] Otherwise put, the underlying intention of any contract, including a tacit contract, is to create binding rights and obligations. An intention to vary or waive the no-cession clause would not give rise to binding rights and obligations. To the contrary, any purported agreement to vary or waive which is not in writing will be void for want of compliance with the agreed formalities. [28] Concisely put, the most plausible or probable inference is that the parties intended to conclude a valid tacit contract.  In the circumstances, it was found that PRASA by concluding the tacit contract, on the probabilities, agreed to suspend the enforcement of the no-cession clause. [29] Both parties contend that the issue of suspension was not argued. However, the parties did argue the issues concerning and in connection with the conclusion of the tacit contract, the no-cession, non-variation and non-waiver clauses. [30] PRASA disputed the conclusion of the tacit contract on the facts. For the reasons given, the said contention was not upheld. PRASA also contended that the no-cession, non-variation and non-waiver clauses all precluded the coming into being of the tacit contract. The Court was therefore obliged to consider whether a tacit contract was concluded on the facts and in the face of the said clauses. [31] The Court was required to determine, on the probabilities, whether the conduct of the parties justified the inference that a tacit contract had been concluded. Having reached such a conclusion, it was further incumbent upon the Court to consider whether the relevant contractual clauses, properly construed, preclude the formation of a tacit contract, and, in that context, to address the attendant issues of waiver and suspension. [32] It is trite that the interpretation of contractual provisions is a matter of law. In the present case, having found that the parties intended to conclude a tacit contract, and that the non-variation clause does not operate so as to preclude a suspension of rights, the Court was obliged to apply the law accordingly. [33] Moreover, should a party contend that a non-variation clause constitutes a complete bar to the formation of a tacit contract, such a party must also address the lesser effects of the clause. It is a well-established principle that the lesser is included in the greater. Accordingly, a party relying upon the proposition that a non-variation clause operates as a complete bar is obliged to consider whether the clause, properly construed, permits a lesser impediment in the form of a suspension. [34] In the circumstances, there are no reasonable prospects of success on the aforesaid grounds. [35] Another ground raised by the respondents is premised on the contention that Phuhlani did not place reliance on a tacit assignment of the extended master agreement. The said contention has no merit and raises no prospects of success. It is clear from paragraphs 42 to 56 of the founding papers that Phuhlani alleged that it entered into an agreement with High Goals in terms whereof it assigned its month-to-month agreement with PRASA to Phuhlani, who in turn on more than one occasion notified PRASA of the said assignment, who in turn admitted that it knew of the fact that Phuhlani took over the security services rendered previously by High Goals and paid Phuhlani for the rendering of such services, all of which went on for about 3 years. It is instructive that Phuhlani in paragraph 56 concluded with the statement that PRASA, through the conduct set out in the previous paragraphs, tacitly accepted Phuhlani as High Goals’ successor. In short, tacit assignment was pleaded as clear as daylight. [36] The further grounds of appeal do not require further elucidation. For the reasons given in the judgment, they do have any reasonable prospects of success. C. GROUNDS OF APPEAL – ON BEHALF OF THE APPLICANT [37] Phuhlani contended that the no-cession clause, as well as the non-variation and non-waiver clauses perished, when the master agreement came to an end. Reliance was placed on the case of Golden Fried Chicken (Pty) Ltd v Sirad Foods CC 2002 (1) SA 822 SCA in support of the said contention. [38] The said contention is misguided and not supported by the facts or the said authority. [39] In paragraph 14 of the founding papers, it was positively stated by Ms Ngcwagu, the managing director of Phuhlani, that Phuhlani has been providing services to PRASA pursuant to the master agreement. [40] In paragraph 42 of the founding papers, it was positively stated by Ms Ngcwagu that the master agreement expired after a period of 12 months, whereafter PRASA from time to time issued extension letters to Chuma Security. In paragraph 43 it is stated that Chuma Security thereafter continued to render services to PRASA on a month-to-month basis on the same terms and conditions. [41] In paragraph 53 of the founding papers (read in conjunction with paragraph 53) it is also positively stated that following notification to PRASA that Phuhlani took over the services previously rendered by Chuma Security Services, Phuhlani continued to render security services in terms of the master agreement. [42] In paragraph 56 it is stated that PRASA tacitly accepted Phuhlani as Chuma Security Services’ successor. In terms of the interim relief sought under Part A, Phuhlani seeks an order that it is entitled to continue rendering its services on the same terms and conditions as previously contracted for. [43] In the Sechaba matter, on which Phuhlani relies, the first order issued directed PRASA to continue utilising the services of the applicants (being the security service providers cited in that case and which included Chuma Security Services) on the same terms and conditions as had previously been contracted for. [3] [44] Having regard to the aforesaid, it is clear that Phuhlani made out a case on the facts that the master agreement was extended by PRASA on the same terms and conditions, and that Phuhlani purported to step into the shoes of Chuma Security Services, and continued to render services on the same terms and conditions as previously contracted for in terms of the master agreement. [45] Had Phuhlani attempted to set up a case that it tacitly contracted with PRASA on different terms (to those contained in the master agreement), it would have relied on a tacit contract with unknown terms and conditions. It is self-evident that any such attempt would have failed. [46] The Golden Fried Chicken case confirmed the general principle that once a contract has expired a party thereto cannot rely on its provisions to prevent the same parties from concluding a new contract. [4] The contract in the said case included non-variation and non-waiver clauses. It also provided for an extension clause, which was subject to two conditions. First, the contracting party had to serve a written notice on the other contracting party not later than 6 months before the expiry of the contract. Second, a new contract in the standard form had to be executed. [47] The contracting party, relying on a tacit contract (and not an extension of the expired contract), failed to give any written notice and no new agreement was executed. Accordingly, the conditions of the extension clause were not met. The other contracting party, disputing the tacit contract, contended that the conditions for the extension were entrenched (by the non-variation and non-waiver clauses) and that unless they were complied with the contract could not have been extended. [48] The Supreme Court of Appeal held that a tacit contract is not an extension of the expired contract. It is a new contract. Accordingly, the provisions of the expired contract did not continue to operate between the parties and prescribed the formalities they had to comply with in order to conclude a new contract. [49] In the result, the Court concluded that a new contract was concluded on the same terms as existed before, although it was uncertain whether all the terms of the expired contract formed part of it. It found that there was insufficient evidence to make such a finding. [50] In the present matter it was not contended that the terms of the expired master agreement prevented the conclusion of the tacit contract on which Phuhlani relies. A different point was taken. [51] Phuhlani relies on the cession and delegation – that is the assignment – of the extended master agreement. In this regard, it is important to have regard to the fact that Phuhlani only came onto the scene at a very late stage. The master agreement was concluded between PRASA and High Goals. The said contract expired after 12 months, whereafter it was extended in writing and continued to operate on a month-to-month basis on the same terms and conditions for about 10 years. [52] Phuhlani, by relying on assignment, purported to step into the shoes of High Goals. Accordingly, Phuhlani is not relying on a new contract concluded with PRASA, independent from the month-to-month contract in operation. Quite the opposite, it purported to succeed High Goals as the contracting party to an existing and ongoing month-to-month contract. Accordingly, the no-cession clause was applicable to Phuhlani’s assignment. As a matter of fact, that was the very circumstance for which such clause was designed. [53] In the circumstances, the ratio in the Golden Fried Chicken case is inapplicable to the present matter. Accordingly, the applicant has no reasonable prospects of success on this point. [54] The applicant also contends that the agreement to suspend the enforcement of the no-cession clause was not pleaded. For the reasons given, the said point has no prospects of success. The applicant set out to establish a tacit contract in the face of a no-cession clause, read with non-variation and non-waiver clauses. On the facts, it succeeded in establishing that the parties intended to conclude a tacit contract and not to enforce the no-cession clause. It is for the Court to correctly apply the law to such facts. [55] The applicant further contends that the respondents’ answering affidavit does not support a finding of an implied notice to terminate. The said contention is not supported by the facts. [56] Phuhlani relies on a month-to-month contract procured through a tacit assignment. On 29 August 2025 PRASA notified Phuhlani that the rendering of services by it to PRASA is unlawful and that it should vacate all sites by 31 December 2025. [57] Phuhlani then launched an urgent application requesting an order that it was entitled to render such services as previously contracted for, subject to a review of the decision to terminate its services through the said notice dated 29 August 2025. [58] In response, PRASA filed an affidavit dated 4 September 2025 in which it positively stated that High Goals’ assignment of the month-to-month service agreement with PRASA - through the sale agreement - was invalid, as it was concluded without PRASA’s prior written consent. [5] [59] It is self-evident that PRASA’s reliance on the absence of prior written consent constitutes unequivocal notice of its intention to enforce the rights arising from that requirement. The giving of such notice, by necessary implication, brings to an end any antecedent agreement—express or tacit—to suspend the enforcement of that right. The principle that the greater includes the lesser finds application. Thus, if PRASA maintains that the absence of prior written consent serves to preclude the formation of a tacit contract altogether, the same reasoning necessarily entails that, even on the assumption that a tacit contract had in fact come into existence, the subsequent invocation of the requirement of prior written consent would, from that point onwards, preclude the continued operation of such tacit contract. [60] Phuhlani’s position, even if successful, was always precarious. The parties were requested to address the Court on the issue of reasonable notice, in the sense that even if Phuhlani was successful in establishing a tacit month-to- month contract it would always have been subject to termination upon reasonable notice. So much was common cause. Hence, PRASA could simply have issued a notice of termination as soon as the court proceedings have been concluded. [61] It is contended that Phuhlani is entitled to the protection afforded by the Sechaba order, namely that PRASA was required to continue utilising the services of the 2012-security providers until the completion of a competitive tender process and the approval of a safety plan by the Railway Safety Regulator. Phuhlani is not a so-called 2012-service provider. It came onto the scene much later. Moreover, the Court in the Sechaba matter did not pronounce on the parties’ rights in the terms of the no-cession clause. To the contrary, the order entrenched the said rights, as the Sechaba order provided that the security service providers would continue rendering services on the same terms and conditions as contracted for. [62] It is self-evident that the said rights are unaffected by the said judgment. Accordingly, PRASA was fully entitled to rely on the provisions of the no-cession clause. [63] In the circumstances, it was found that PRASA, by implication, gave reasonable notice of termination of the agreement to suspend the enforcement of its rights derived from the no-cession clause. Any suggestion that Phuhlani did not know that PRASA, through its opposition of the urgent application on the basis that it did, communicated its demand to cease rendering security services to it, cannot be sustained. The inference that PRASA’s conduct conveyed precisely that message is irresistible. [64] In the result, the contention that PRASA did not terminate the agreement to suspend by implied notice is devoid of reasonable prospects of success. [65] The further grounds of appeal do not require further elucidation. For the reasons given in the judgment, they do have any reasonable prospects of success. [66] Accordingly, the following order is issued: (a) The first to third respondents’ application for leave to appeal is refused, with costs, including the costs of two counsel, on scale C in respect of the (senior) junior counsel and on scale B in respect of junior counsel. (b) The applicant’s application for leave to appeal is refused, with costs, including the costs of two counsel, on scale C in respect of the senior counsel and on scale B in respect of junior counsel. W ROUX ACTING JUDGE OF THE HIGH COURT Appearances For Applicant:           Advs. Khoza and  Qaba Instructed by:            Mr Maphanga For respondent:        Advs. Jacobs and Coetzee Instructed by:            Mr Horner [1] [2021] ZASCA 31 (31 March 2021) at para [10]. [2] See: Par 3.1 of the notice of motion. [3] Referred to as ‘the Hlophe order’. [4] It is also trite that some provisions of a contract survive the expiry of a contract and continues to have force and effect. Accordingly, it remains a matter that is subject to interpretation. [5] Paragraphs 13-18 of the answering affirdavit. sino noindex make_database footer start