Case Law[2022] ZAGPJHC 419South Africa
African National Congress v Ezulweni Investments (PTY) Limited (A5035/2021) [2022] ZAGPJHC 419 (29 June 2022)
Headnotes
Summary: Contract – oral agreement for the supply of material and the rendering of related services – resolving factual disputes – proper, contextual and purposive interpretation of agreement – conduct of contracting parties before, after and during agreement instructive –
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## African National Congress v Ezulweni Investments (PTY) Limited (A5035/2021) [2022] ZAGPJHC 419 (29 June 2022)
African National Congress v Ezulweni Investments (PTY) Limited (A5035/2021) [2022] ZAGPJHC 419 (29 June 2022)
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sino date 29 June 2022
THE REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE
NO
:
A5035/2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES:
NO
REVISED:
29
th
June 2022
In the matter between:
AFRICAN
NATIONAL CONGRESS
Appellant
and
EZULWENI
INVESTMENTS (PTY) LIMITED
Respondent
Coram:
Makume, Twala
et
Adams JJ
Heard
:
02 March 2022 – The ‘virtual hearing’ of the Full
Court
Appeal was conducted as a videoconference on the
Microsoft
Teams
digital platform.
Delivered:
29 June 2022 – This judgment was handed down electronically
by circulation to the parties' representatives
via
email, by
being uploaded to the
CaseLines
system of the GLD and by
release to SAFLII. The date and time for hand-down is deemed to be
10:00 on 29 June 2022.
Summary:
Contract – oral agreement for the supply
of material and the rendering of related services – resolving
factual disputes
– proper, contextual and purposive
interpretation of agreement – conduct of contracting parties
before, after and during
agreement instructive –
The
doctrine of estoppel and the principle of ostensible authority
discussed – direct authority found, as well as ostensible
authority – estoppel also applicable Appeal dismissed.
ORDER
On
appeal from:
The
Gauteng Division of the High Court, Johannesburg (Bhoola AJ
sitting as Court of first instance):
(1)
The appellant’s appeal against the
order of the Court
a quo
is dismissed with costs, including the costs of the application for
leave to appeal to the High Court and the application for leave
to
appeal to the Supreme Court of Appeal, as well as the costs
consequent on the employment of two Counsel, one being a Senior
Counsel.
(2)
The order of the court
a
quo
is confirmed.
JUDGMENT
Adams
J (Makume
et
Twala JJ concurring):
[1]
Ezulweni Investments
(Pty) Ltd (Ezulweni), the respondent in this appeal, brought an
application in the Gauteng Division of the
High Court, Johannesburg,
(the high court), in which it sought judgment against the African
National Congress (ANC), the appellant,
for payment of the sums of
R100 050 000 and R2 415 000, together with
interest on these amounts and costs of
suit. These amounts were
claimed by Ezulweni allegedly for services rendered and material
supplied at the special instance and
request of the ANC during 2019.
Bhoola AJ granted the order sought and refused a subsequent
application for leave to appeal, which
leave to appeal to this court
was ultimately granted by the Supreme Court of Appeal (SCA) on 22
April 2021.
[2]
In issue in this
appeal is whether the high court was correct in rejecting the ANC's
defence to the claims based on the fact that,
according to the ANC,
the contract for the rendering of the services and the supply of
material was invalid because of non-compliance
with the requirements
of the internal supply chain policy of the ANC. Put another way, the
issue which requires adjudication in
this appeal is simply whether
there was in place a valid oral agreement between the ANC and
Ezulweni in terms of and pursuant to
which the ANC, during the period
in the run-up to and during the 2019 national election, purchased
from Ezulweni, which agreed
to sell and supply to the ANC PVC
banners, to be installed and later removed by them.
[3]
The ANC pleaded that
no contract came into existence. It claimed its internal requirements
for the conclusion of the contract in
question were flouted. The
internal requirements, so the ANC averred, are laid down in its
Supply Chain Policy, which required
that the provision of services in
relation to the election was conditional on (1) approval by the
elections committee, (2) approval
by its Treasurer-General (TG), and
(3) the issue of a purchase order. There was no compliance with these
prescriptive requirements,
which means, so the ANC argues, that a
valid contract did not come into existence. In any event, so the ANC
further argues, its
contracting officials (Messrs Mabaso and
Nkholise) had no authority to bind it.
[4]
The high court found
in favour of Ezulweni, holding that an oral agreement, as contended
for by Ezulweni, for the supply and installation
of the banners was
in fact concluded. This conclusion was reached by the high court
after finding that the evidence did not support
the existence of the
preconditions contended for by the ANC and that its officials had the
requisite authority.
[5]
On appeal, the ANC’s
contentions were directed primarily at persuading the court that
final relief should not have been granted
in favour of Ezulweni as,
applying the
Plascon
Evans
rule, the court
a
quo
should
have accepted, without more, its version to the effect that Messrs
Mabaso and Nkholise did not have the necessary authority
to conclude
the agreement on behalf of the ANC.
[6]
All
the same, the issues are to be decided in this appeal against the
factual backdrop, as set out in the paragraphs which follows.
In my
view, the material facts are for the most part common cause, as
supported by uncontested and unchallenged contemporaneous
communiqués, notably successive
WhatsApp
[1]
messages between 29 April and 6 May 2019, reporting on different
phases of performance of the oral agreement.
[7]
During January 2019,
Ezulweni's chief executive officer, a Mr Renash Ramdas, and
Mr Mabaso, the ANC's financial manager, met
for purposes of a
presentation by Ezulweni for the supply of branded goods to the ANC
for the 2019 election campaign. The national
elections were scheduled
for 8 May 2019. The meeting took place at the ANC headquarters at
Luthuli House. At the meeting, Mr Mabaso
introduced Ramdas to Mr
Nkholise, who had been appointed as the person responsible for
procurement on behalf of the ANC for the
duration of the election
campaign. On 11 February 2019, Ezulweni provided Mr Nkholise with a
quotation, listing the prices of each
of the items in respect of
which it had made a presentation at the January meeting, which
included ‘PVC banners’. A
follow-up meeting took place on
20 February 2019 with Mr Ramdas, attended by Messrs Mabaso and
Nkholise on behalf of the ANC. At
this meeting Messrs Mabaso and
Nkholise placed an order with Ezulweni to supply the ANC with 30 000
PVC banners, which Ezulweni
agreed to supply and install, and remove
after the elections, for an agreed amount of R70 per banner in
addition to the unit price
per banner. Ezulweni would arrange for the
installation of the banners in prominent positions on street poles
and at polling stations.
At that time, the national election was less
than three months away.
[8]
Shortly after the
meeting of 20 February 2019, Ezulweni commenced with the production
and manufacturing of the banners.
[9]
The ANC admits the
meetings and what was discussed at these meetings, but denies that
Messrs Mabaso or Nkholise represented that
they had authority to bind
the ANC. Moreover, the ANC confirms that they were kept abreast of
the developments throughout the course
of the production of the
banners, which reports also took the form of pictures being sent to
the ANC by Ezulweni, depicting banners
which had already been put up
on street poles and other structures around the country.
[10]
On 8 March 2019, as a
result of the very substantial financial outlay which Ezulweni had to
commit itself to in the manufacturing
process, Ezulweni sought
assurance from the ANC in the form of a ‘formal order' or a
‘demonstrative command’,
without it being required to be
in written form. In response, the ANC provided Ezulweni with a letter
on an ANC formal letterhead
dated 2 April 2019, signed by the head of
elections, Mr Fikile Mbalula, and addressed to the TG, Mr Paul
Mashatile. A Comrade
Mahlalela and Mr Mabaso were copied in on the
letter, which reads as follows:
‘
Re:
Signing of Election’s Money
Dear
Comrades
This
communiqué serves to inform the Finance department that
Comrade Lebohang Nkholise has been assigned as the signatory
for
bookings and money for the duration of the Elections Campaign.
Yours
Comradely,
(Signed)
Head
of Elections
F A
Mbalula’
[11]
By providing this
letter, contends Ezulweni, the ANC clearly sought to convey that
Nkholise, the person with whom Ezulweni had been
dealing, had the
necessary delegated authority to deal with the matter and to bind the
ANC in respect of election-related expenditure
during the election
campaign. This is so because Nkholise had been appointed as the
person responsible for procurement on behalf
of the ANC. The letter
and, more importantly, its provision to Ezulweni are not disputed by
the ANC.
[12]
On 4 April 2019,
Ezulweni forwarded to Mr Nkholise two invoices, one in respect of the
manufacture and sale of the banners, and
the other in respect of the
installation and removal of the banners. It is not in dispute that
the ANC received both invoices and
at no point prior to these
proceedings raised any objection to them.
[13]
In accordance with
the oral agreement between the parties, on 9 April 2019 Mr Nkholise
forwarded to Mr Mabaso the ANC's final design
of the banner. Mr
Mabaso in turn forwarded the email containing the final design to
Ezulweni. This transmission of the final design
for the banner to
Ezulweni is confirmed in the answering affidavit. Moreover. On the
same day, being 9 April 2019, a letter was
addressed by Mr Mbalula,
as the ANC Head of Elections, to Mr Mashatile, which reads as
follows:
‘
RE:
OUTSTANDING PVC BANNERS
Dear
Paul Mashatile
This
letter serves to request your office to assist us with the payment
for 30 000 PVC banners required for the election campaign.
The total
costs is R87 000 000, R2900 per PVC banner.
This
letter is accompanied by an invoice from Ezulweni Investments.
Comradely
yours
(Signed)
Cde
Fikile Mbalula
Head
of Elections
African
National Congress’
[14]
The letter is on an
ANC letterhead. It represents, so it was submitted on behalf of
Ezulweni, a clear acknowledgement by the Head
of Elections, of the
ANC's liability in terms of the invoice that had been received from
Ezulweni. This letter corresponds with
the invoice, which was sent
under cover of the said letter. It mentions the same amount due in
respect of the banners – R87 000 000
(exclusive of
VAT). This letter was provided to Ezulweni to provide reassurance
that the ANC accepted liability in terms of the
oral agreement.
[15]
Mr Mabaso in the
ANC’s answering affidavit says that the letter was prepared by
Mr Nkholise, who had attached to it the electronic
signature of Mr
Mbalula. The idea was, so Mr Mabaso alleges, that the letter would at
some point be placed before Mr Mbalula for
confirmation. This
apparently never happened as Mr Nkholise never got the opportunity to
discuss the contents of the letter with
Mr Mbalula before the
elections. This then means, so the version of the ANC continues, that
the order and the contents of the said
letter was never confirmed by
Mr Mbalula, nor seen or approved by the Elections Committee or the
TG.
[16]
This is a material
factual dispute between the parties – that is the authenticity
of this letter and its contents. In my view,
the version of the ANC
on this aspect of the matter can and should be rejected on the
papers, if for no other reason than the fact
that it is far-fetched
and implausible. The ANC’s side of the story in that regard
needs only to be stated for it to be rejected.
Additionally, as
correctly argued by Mr Dodson SC, who appeared for Ezulweni, with Mr
Lubbe, this version is not confirmed under
oath by Mr Mbalula nor by
Mr Mashatile.
[17]
I therefore accept as
a fact that this letter was in fact sent by Mr Mbalula on the 9 April
2019, and it is yet another factor to
be taken into consideration
when deciding on whether the oral agreement, as alleged by Ezulweni,
was indeed concluded between the
parties. This was also what Mr
Nkholise thought, hence his request to Mr Mbalula to ask Mr Mashatile
that payment of the invoice
be effected. Importantly, it belies the
claim by the ANC that at the meeting on 20 February 2019 between Mr
Ramdas and Messrs Mabaso
and Nkholise, it was conveyed to Mr Ramdas,
on behalf of Ezulweni, that they had no authority to represent the
ANC and that the
ANC would only conclude a contract once there was
approval by the TG and after a purchase order had been produced.
[18]
On 27 April 2019 Mr
Ramdas sent a WhatsApp message to Mr Nkholise confirming that 20 000
of the 30 000 PVC banners could
already be made available at
that date. This message was in fact sent on a group, which Mr Ramdas
had formed under the chat
group name ‘ANC 2019’. This
means that the message from Mr Ramdas was in fact sent to and receive
not just by Mr Nkholise,
but also by Mr Mabaso. On the same day,
namely 27 April 2019, Mr Nkholise responded with a ‘thumbs
up' emoji, implying
at least his approval for what Ezulweni was doing
and the fact that it was able to provide 20 000 banners at that time.
On 29 April
2019 Mr Ramdas sent a WhatsApp message to both Messrs
Nkholise and Mabaso attaching photographs of the banners that were
awaiting
erection, along with photos of banners already erected on
street posts. Such further reports, in the form of pictures were also
sent subsequently. So, for instance, on 30 April 2019 Mr Ramdas sent,
by WhatsApp, photographs of the posters that were erected
on street
poles on that day. On the same day Mr Ramdas sent a WhatsApp
advising Messrs Mabaso and Nkholise that Ezulweni had
paid the
balance of the airfreight in the amount of R1.2 million in order to
cover the cost of the importation of the PVC banners
from China.
[19]
On 2 May 2019 –
some six days before the elections – Mr Ramdas sent a WhatsApp
message to Messrs Mabaso and Nkholise,
advising them that the
logistics involved in the matter were huge and that Ezulweni had
employed one hundred teams with each team
having to install 300
banners. Thereafter, between 3 May and 6 May, a number of WhatsApp
messages were sent to Messrs Mabaso and
Nkholise informing them, and
providing photographic proof of the operation by Ezulweni in erecting
the banners on the street poles
throughout South Africa. There was
confirmation of receipt of these messages by Mr Nkholise, who, by the
use emojis, approved what
had been done by Ezulweni up to that point.
[20]
On 4 May 2019 a
meeting was held at the Garden Court Hotel in Eastgate between Ramdas
and Messrs Mabaso and Nkholise at which they
discussed the progress
of the project and on which day he updated them on the installation
of the PVC banners. The ANC admits the
meeting but claims that the
discussion at the meeting was merely aimed at advising Ezulweni that
no contract could be concluded
without the approval of the TG and the
issue of a purchase order. This assertion is patently untrue if
regard is had (a) to the
content of the WhatsApp messages exchanged
before and after this date as well as the communiques from the office
of the ANC’s
Head of Elections, (b) to the fact that the
election was four days away and (c) to what is said below regarding
the absence of
any such requirements in the supply chain policy.
[21]
On 9 May 2019, the
day after the elections, Ezulweni again sent the two invoices, this
time correctly reflecting both the VAT amounts
due, together with a
combined statement reflecting the total amount due of R102 465 000.
After the election and in accordance
with the contract, Ezulweni
caused all of the banners to be removed and placed in storage. The
banners were then available to the
ANC for future use. However,
despite Ezulweni’s compliance with its obligations in terms of
the agreement, no payment was
forthcoming from the ANC, despite
numerous requests by Ezulweni to the ANC that they settle their
account, including numerous meetings
with the ANC at which payment
was requested.
[22]
The only response
received from the ANC to the numerous requests for payment was on 13
August 2019, when the ANC's TG acknowledged
receipt of a request for
payment and advised that ‘the matter is receiving attention, I
will revert to you in due course’.
However, no such further
response was forthcoming.
[23]
It bears emphasising
that the ANC had never disputed its indebtedness to Ezulweni, whether
it be in discussions, conversations or
meetings with Messrs Mabaso
and Nkholise, or in correspondence addresses by them to Ezulweni. The
ANC never, prior to the filing
of its answering affidavit, disputed
the authority of either Mabaso or Nkholise to bind it, despite
various demands for payment.
The fact that the denial first emerged
in the answering affidavit speaks volumes. This validates a finding
of authority on the
part of Mabaso and Nkholise to act and the
belated denial thereof is merely an afterthought.
[24]
This brings me back
to the primary question which requires an answer in this appeal, that
being whether an oral agreement was concluded
between Ezulweni and
the ANC in terms of which branded material for the national elections
on 8 May 2019, including PVC banners,
were to be supplied and
installed by Ezulweni to the ANC at an agreed fee of over R100
million. Related to and subsumed into this
question is the issue
whether or not the agreement was properly authorised by the ANC.
[25]
This,
in turn, requires this appeal court to interpret the agreement or the
arrangement between the parties, which calls for a legal
conclusion.
It is trite that the proper interpretation of a contractual
relationship between parties and the terms and conditions
of such a
contract is a legal and not a factual inquiry, which is to be done
contextually and purposively, in addition to regard
being had to what
was expressly agreed upon by the contractors. As was said by the
Constitutional Court (per Khampepe J) in
University
of Johannesburg v Auckland Park Theological Seminary and Another
[2]
at para 69:
‘
[69]
What the preceding discussion clearly shows is that, to the extent
that
the Supreme Court of Appeal in the current matter purported to
revert to a position where contextual evidence may only be adduced
when a contract or its terms are ambiguous, it erred.
Context
must be considered when interpreting any contractual provision and it
must be considered from the outset as part of the
unitary exercise of
interpretation
.’ (My emphasis).
[26]
The
more modern approach to interpreting contractual instruments that was
started by decisions such as
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[3]
and
Bothma-Batho
Transport (Edms) Beperk v S Bothma and Seun Transport (Edms)
Beperk
[4]
and carried through into judgments such as, for example,
Novartis
SA (Pty) Limited v Maphil Trading (Pty) Limited
[5]
,
has conveniently been summarised as follows in
North
East Finance (Pty) Limited v Standard Bank of South Africa
Limited
[6]
:
‘
The
court asked to construe a contract must ascertain what the parties
intended their contract to mean. That requires a consideration
of the
words used by them and the contract as a whole, and, whether or not
there is any possible ambiguity in their meaning, the
court must
consider the factual matrix (or context) in which the contract was
concluded.’
[27]
Whilst the aforegoing
principles generally apply to written instruments and contracts, they
find equal application in oral agreements
and, importantly, in an
assessment relating to the existence of a contractual arrangement
between parties. The point is that the
manner in which the parties
themselves not only understood but implemented their contractual
obligations is a very important aid
in the interpretative process.
[28]
That brings me back to a discussion of the
facts in the matter, to give context to the contractual arrangement
between the parties,
and the application to those facts of the
aforegoing principles. It can confidently be said that the conduct of
the parties, especially
that of the ANC, supports a conclusion that
the agreement, as contended for by Ezulweni, was entered into between
the parties.
This conclusion explains the correspondence between
them, including the transmission to the ANC of the invoices from
Ezulweni,
as well as the internal ANC communiqués from the
Office of the Head of Elections to the Office of the
Treasurer-General.
It also explains why at no stage before the issue
of the application in the court
a quo
– for a period from January to August 2019 – the ANC did
not raise the supposed lack of proper procedures and authority
in the
conclusion of the agreement. It also explains why Ezulweni during the
period leading up to the elections reported to the
ANC on the
progress made in the production, supply and installation of the
banners, supported by photographic evidence. The ANC
was told of a
national roll-out of the elections material and everybody in the
organization would no doubt have been aware that
Ezulweni was
responsible for that part of the election campaign.
[29]
The aforegoing, in my view, does not lend
any credence to the version of the ANC that no agreement had been
entered into –
far from it. If no such agreement was entered
into, why then did Ezulweni, seemingly with the blessing of the ANC,
go to the trouble
of embarking on this project which assumed epic
proportion? I ask this question rhetorically.
[30]
For this reason alone, I am of the view
that the court
a quo
was correct in her finding that there came into existence an oral
agreement, acted upon by Ezulweni, and in accordance with which
the
ANC is liable to it for the amounts claimed in the opposed
application in the high court.
[31]
It does not avail the
ANC to rely on a letter dated 8 March 2019 from Ezulweni to it, which
reads as follows:
‘
We
thank you for the opportunity of having being requested to quote for
the 2019 elections.
We
also wish to inform you that due to time constrictions we urgently
request that a formal order be issued so that manufacturing
and
delivery can begin in earnest.
We
are now bordering the cut-off date for manufacture and we seek a
definitive command as to whether or not to proceed.
Payment
arrangements can be made thereafter as long as the initial quantities
for production can be determined. We cannot stress
the urgency of our
request enough.
The
Ezulweni Team would like to wish the African National Congress well
as the 2019 elections draw closer.
We
trust that all Is well and look forward to hearing from you all soon.
Kindest
regards,’
[32]
As
submitted on behalf of Ezulweni, this letter, like any document,
should be interpreted contextually and purposively, rather than
literally, taking into account a conspectus of all the evidence.
(
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[7]
;
University
of Johannesburg v Auckland Park Theological Seminary and Another
[8]
;
President
of the Republic of South Africa v Democratic Affiance and Others
[9]
).
[33]
As explained by
Ezulweni in its papers, time was of the essence. In order to properly
implement the project, it was necessary to
immediately commence with
the manufacturing of the banners. There was a mere three months
available to complete the printing, manufacturing
and installation of
the banners. After the meeting on 20 February 2019, work on the
manufacturing of the banners commenced. Ezulweni
ordered the steel
and other materials for the frames and employed additional staff to
assist in the production. The project required
a substantial
investment and a number of suppliers of material required deposits.
The ANC, because of them experiencing cash-flow
constraints, so Mr
Nkholise explained at the time, was unable to assist with upfront
funding of the project, but assured Mr Ramdas
that Ezulweni would be
paid immediately after the election campaign.
[34]
This letter therefore
does not, as contended by the ANC, indicates that no agreement was
concluded between the parties, because
no reference is made in the
letter to such agreement. This contention, in my view, is misguided.
Interpreted contextually, the
letter is consistent with the oral
agreement. The work on the project, pursuant to the agreement, was
about to begin. What is apparent
from the letter is that it is
Ezulweni merely looking for comfort, given the very substantial
outlay that was going to be required.
[35]
In interpreting the
letter in the way that it does, the ANC also loses sight of what
transpired subsequent to the letter, notably:
(1) Ezulweni was
provided with a copy of the letter dated 2 April 2019, in which
the Head of Elections confirmed with the
TG that Mr Nkholise had been
assigned ‘as the signatory for bookings and money for the
duration of the Elections Campaign’;
(2) On 4 April 2019
Ezulweni forwarded to Nkholise two invoices, one in respect of the
manufacture and sale of the banners, and
the other in respect of the
installation and removal of the banners; and (3) On 9 April 2019 Mr
Nkholise forwarded to Mr Mabaso
the ANC's final design of the banner,
who in turn forwarded the email containing the final design of the
poster to Ezulweni; (4)
Also, on 9 April 2019, the letter was
addressed by Mr Mbalula to Mr Mashatile, requesting to assist
with the payment for the
30 000 PVC banners; (5) A number of WhatsApp
messages (several accompanied by photographs of banners already
erected or awaiting
erection) from Mr Ramdas to the contracting
officials of the ANC between 27 April 2019 and 6 May 2019; and (6) On
4 May 2019 A
meeting was held between Mr Ramdas and Messrs Mabaso and
Nkholise at which they discussed the progress of the project and on
which
he updated them on the installation of the PVC banners.
[36]
What is more is that
a meeting was held on 11 June 2019 between Mr Ramdas and Mr
Mabaso at which the latter acknowledged the
ANC's indebtedness and
undertook to resolve the matter. The ANC's interpretation of the 8
March 2019 letter is therefore inconsistent
with its own subsequent
conduct.
[37]
The same can be said
of the ANC’s reliance on the letter dated 2 April 2019, which
confirmed that Mr Nkholise had been assigned
‘as the signatory
for bookings and money for the duration of the Elections Campaign’.
This letter was provided in response
to a request by Ezulweni for an
official letter of undertaking or an official order from the ANC. To
argue, as the ANC does, that
the letter does not constitute 'conduct'
on the part of the ANC from which an inference of direct authority
could be drawn, is
misplaced and ignores the context. The mere fact
that the letter was purposefully presented to Ezulweni, constitutes
conduct on
the part of the ANC. The letter specifically makes mention
of Nkholise's 'assigned' authority. Bear in mind that he was the
person
responsible for procurement during the election campaign.
[38]
As was found by the
court
a
quo
, by
providing the 2 April 2019 letter to Ramdas, the ANC sought to convey
that Mr Nkholise, the very person who had ordered the
banners
together with Mr Mabaso, had the necessary delegated authority to
deal with the matter and to bind the ANC in respect of
election-related expenditure during the election campaign.
[39]
For all of these
reasons, I am of the view that the high court was correct in its
finding that, on the evidence before it, the ANC
is liable to
Ezulweni on the basis of an oral agreement concluded between them.
[40]
Even if I am wrong in
my assessment relating to the existence of the oral agreement, as was
found by the high court, the appeal
still stands to be dismissed on
the basis of the principles of estoppel and ostensible authority.
[41]
The
general rule relating to authority, in the context of the law of
agency, is that, where one party to a contract purports to
act in a
representative capacity, but in fact has no authority to do so, the
person whom he or she purports to represent is obviously
not bound by
the contract simply because the unauthorised party claimed to be
authorised. That person (the principal) will however
be bound by the
contract if his or her own conduct justified the other party's belief
that authority existed. (
South
African Eagle insurance Co Ltd v NBS Bank Ltd
[10]
).
[42]
As submitted by Mr
Dodson, the question therefore is whether the ANC's conduct
in
casu
misled Ezulweni into believing that Messrs Mabaso and Nkholise had
authority; or whether the same misrepresentation led to an appearance
that they had authority to act on behalf of the ANC.
[43]
In answering this
question, one needs look no further than the fact that the ANC
appointed Mr Mbalula as its Head of Elections.
This entailed him
representing the ANC in the conduct, planning, organisation and
implementation of the ANC's election campaign.
Mr Mbalula in turn
confirmed that Mr Nkholise had been assigned as the signatory for
bookings and money for the duration of the
Elections Campaign. It
cannot be said clearer than this that Mr Nkholise was authorised to
bind the ANC in a contract as the one
in issue in this matter. If his
authority was narrower than that, this ought to have been
communicated to any party likely to contract
with the ANC in relation
to its procurement processes in the election campaign. There was no
such communication, which means that
there was a representation on
the part of the ANC that Mr Nkholise had the necessary authority to
enter into the agreement in question.
This conduct on the part of the
ANC, constituting the representation that Mr Nkholise had the
necessary authority, entitled Ezulweni
to hold the ANC to the
representation of authority created.
[44]
As alleged by
Ezulweni, these statements and conduct, when taken as a whole,
including omissions, by the ANC, its elections head,
Messrs Mabaso
and Nkholise, reasonably conveyed to a person in the position of
Ezulweni, that Messrs Mabaso and Nkholise had the
necessary
authority.
[45]
It is for these
reasons that I would nevertheless, even in the absence of direct
authority of Messrs Mabaso and Nkholise to act
for tor the ANC, find
that the ANC is bound by the agreement on the basis of the doctrine
of estopped or that they had ostensible
authority to do so.
[46]
The appeal must therefore fail.
Costs
of Appeal
[47]
The
general rule in matters of costs is that the successful party should
be given his costs, and this rule should not be departed
from except
where there are good grounds for doing so. See
Myers
v Abramson
[11]
.
[48]
I can think of no reason to deviate from
the general rule. The ANC should therefore pay Ezulweni’s costs
of the appeal.
Order
[49]
In the result, the following order is made:
-
(1)
The appellant’s appeal against the
order of the Court
a quo
is dismissed with costs, including the costs of the application for
leave to appeal to the High Court and the application for leave
to
appeal to the Supreme Court of Appeal, as well as the costs
consequent on the employment of two Counsel, one being a Senior
Counsel.
(2)
The order of the court
a
quo
is confirmed.
L R ADAMS
Judge of the High
Court
Gauteng
Local Division, Johannesburg
HEARD
ON:
2
nd
March 2022 – in a ‘virtual hearing’
during a videoconference on the
Microsoft
Teams
digital platform.
JUDGMENT
DATE:
29
th
June 2022 – judgment handed down
electronically
FOR THE
APPELLANT:
Adv Kennedy Tsatsawane SC, with
Advocate
H N Moloto
INSTRUCTED
BY:
Mncedisa Ndlovu & Sedumedi Attorneys,
Illovo,
Sandton
FOR THE
RESPONDENT:
Adv Alan Dodson SC, together with
Advocate
Jan Lubbe
INSTRUCTED
BY:
Sarlie & Ismail Incorporated, Johannesburg
[1]
WhatsApp
is defined by
Business
Insider (Grace Eliza Goodwin)
as a multiplatform messaging app that allows one to inter alia send
text messages.
[2]
University
of Johannesburg v Auckland Park Theological Seminary and Another
(CCT 70/20) [2021] ZACC 13; 2021 (8) BCLR 807 (CC)
[3]
Joint
Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593 (SCA)
[4]
Bothma-Batho
Transport (Edms) Beperk v S Bothma and Seun Transport (Edms) Beperk
2014
(2) SA 494 (SCA)
[5]
Novartis
SA (Pty) Limited v Maphil Trading (Pty) Limited
2016
(1) SA 518 (SCA)
[6]
North
East Finance (Pty) Limited v Standard Bank of South Africa Limited
2013
(5) SA 1 (SCA)
[7]
See
footnote 3 supra;
[8]
See
footnote 2 supra;
[9]
President
of the Republic of South Africa v Democratic Affiance and Others
2020 (1) SA 428
(CC) at paras 76-79.
[10]
South
African Eagle insurance Co Ltd v NBS Bank Ltd
2002 (1) SA 560
(SCA) at para 27.
[11]
Myers
v Abramson
,1951(3)
SA 438 (C) at 455
sino noindex
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