Manong and Associates (Pty) Ltd v City of Cape Town and Another

• Jurisdiction: South Africa
• Judge: Navsa JA, Cloete JA, Van Heerden JA, Mhlantla JA and Ebrahim AJA
• Judgment Date: 01 December 2010
• Citation: 2011 (2) SA 90 (SCA)
• Docket Number: 457/09
• Hearing Date: 15 November 2010
• Counsel: M Madlanga SC (with T Masuku) for the appellant. I Jamie SC (with R Paschke) for the first respondent. N Arendse SC (with M Janisch) for the second respondent.
• Court: Supreme Court of Appeal

Navsa JA and Mhlantla JA (Cloete JA, Van Heerden JA and Ebrahim AJA concurring): F

[1] This case implicates the right to equality in the procurement of State- related (municipal) contracts. The Constitution guarantees equality G before the law and prohibits unfair discrimination by the State and/or individuals, directly or indirectly, on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. Section 9(3) of the Constitution obliges the State to enact national legislation to prevent or prohibit unfair discrimination. H The Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Act), which came into operation on 16 June 2003, is an important statute to that effect. Its purpose is to prevent or prohibit unfair discrimination and to promote equality.

I [2] The promotion of equality is a noble goal and, as we transform our society and meet the myriad challenges associated with change, we should always act on a principled basis. Where there are legitimate grievances based on racial exclusion, we should deal with them promptly and firmly. Racism was the scourge of our nation, and we should, where it is shown to exist, resist it strenuously and take all the necessary steps J to eliminate it from our midst. Courts, when faced with legitimate

Navsa JA and Mhlantla JA (Cloete JA, Van Heerden JA and Ebrahim AJA concurring)

complaints of racial exclusion, should not hesitate to show their A disapproval by means of appropriate orders. On the other hand, given South Africa's peculiar history, racism is such a serious charge that care should be taken to ensure that such a complaint is well founded. A contrived charge is equally deserving of censure. In this case we have to decide on which side of the dividing line the appellant's complaint in the Equality Court falls. The evidence and issues in this case demonstrate the B complex challenges facing the State in its management and promotion of fundamental change in society.

[3] The procurement of State-related contracts for the acquisition of professional or other services, whether by way of tender or otherwise, has C become a hotly contested field, with courts frequently being the battleground. Litigation has included a range of legal issues, including, but not limited to, charges by unsuccessful service providers of being victims of racial discrimination or bias. The question in the present appeal is whether the complaint of racism brought by the appellant in the Equality D Court (Cape Town) in relation to the procurement of municipal contracts was warranted. The appeal is before us with the leave of that court. The two judgments of the court below which are the subject of the present appeal and cross-appeal are reported as Manong & Associates (Pty) Ltd v City of Cape Town and Others 2008 (2) SA 601 (C) ([2007] 4 All SA 1452); and Manong and Associates (Pty) Ltd v City Manager, City of Cape Town, and Others E 2009 (1) SA 644 (EqC). The first judgment deals with practice directions and preliminary points.

[4] The appellant, Manong and Associates (Pty) Ltd, describes itself as a national company specialising in civil, structural and development engineering. The engineering practice progressed, from initially operating F only in Cape Town as a one-person practice, to operating as a close corporation, and ultimately expanding its presence as a national company to Port Elizabeth, Johannesburg, East London and Mthatha. Notwithstanding its national footprint, the company has a fairly limited professional staff complement, comprising four full-time directors who are qualified engineers, four professional associates and eleven professional G technical staff.

[5] The driving force behind the appellant is Mr Mongezi Stanley Manong (Manong), who is its managing director and a professional engineer. The complaint in the court below leading up to the present H appeals is the culmination of a deep sense of injustice on the part of Manong, which appears to have developed over many years, based on his perception of treatment meted out to him by officialdom. Unless the context otherwise requires, we shall refer to the engineering practice headed by Manong in its various forms over the years as 'the company'. I

[6] The company's complaint, as initially formulated in its founding affidavit, was that it was discriminated against by the first respondent, the City of Cape Town (CCT), and its predecessor, the City of Tygerberg (COT), by being generally excluded from municipal contracts in relation to Khayelitsha, and specifically in relation to a proposed retail development in the Central Business District (CBD) in that township. The J

Navsa JA and Mhlantla JA (Cloete JA, Van Heerden JA and Ebrahim AJA concurring)

A company alleged that the CCT and the COT implemented policies and practices designed to exclude and limit its access to municipal projects. Interestingly, even though the COT and the CCT were implicated in relation to the CBD complaint, no relief was claimed against the CCT. As regards the CBD, the company alleged that the second respondent, B Futuregrowth Property Development Company (Pty) Ltd (FG), discriminated against it by excluding it from that development. The company also complained that FG had excluded it from the 'Setsing project' in the Free State, and had again discriminated against it by doing so. Manong's founding affidavit comprised 92 paragraphs extending to 30 pages. The characterisation of the complaint, outlined earlier in this C paragraph, is our best attempt at encapsulating what is set out by Manong in rather convoluted form. Manong's method of formulating a complaint is criticised later in this judgment.

[7] In the replying affidavit, after being invited by the respondents to state the basis of the company's complaint more precisely, Manong D relied on the provisions of ss 7(c) and (e) of the Act, which read as follows:

'7 Prohibition of unfair discrimination on ground of race

Subject to section 6, no person may unfairly discriminate against any person on the ground of race, including —

E . . .

(c)

the exclusion of persons of a particular race group under any rule or practice that appears to be legitimate but which is actually aimed at maintaining exclusive control by a particular race group;

. . .

(e)

the denial of access to opportunities, including access to services or contractual opportunities for rendering services for consideration, F or failing to take steps to reasonably accommodate the needs of such persons.'

[8] The factual basis for the complaint was set out by Manong. [1] He blamed the company's exclusion from opportunities in Khayelitsha on Mr Hendrik Barnard, employed by CCT as a civil-engineering technologist. G For the greater part of his career with the COT and CCT, Barnard

Navsa JA and Mhlantla JA (Cloete JA, Van Heerden JA and Ebrahim AJA concurring)

was involved with the allocation and administration of municipal A contracts in Khayelitsha. According to Manong, the antagonism between Barnard and the company arose as a result of Barnard's contrived complaint concerning the quality of services provided by the company to COT, in relation to a contract involving the installation of a boardwalk leading to a platform with a sea view at a site on Lookout Hill B in Khayelitsha. Barnard was accused of being racist and of conspiring with others to ensure that only white-controlled institutions received municipal work.

[9] As the enquiry progressed in the court below, the company's case crystallised as follows: Barnard, driven by racism, fabricated and/or C exaggerated the complaint referred to in the preceding paragraph, and then, using it as a reason, vowed never again to allocate any municipal work in Khayelitsha to the company. Barnard conspired with other like-minded officials of the COT and CCT to achieve that end. Accordingly, in respect of the CBD project, Barnard conspired with other CCT D officials and with employees of FG to exclude the company. This was achieved through privatising the CBD project so as to have it developed on a turnkey 'design, develop and deliver' basis. [2] This enabled the CCT to shift the blame for the company's exclusion to FG. In short, the company's case was that the CCT, in order to exclude him from the CBD contract, decided to develop the CBD project on a turnkey basis, E enabling the principal contractor to appoint the consulting engineers and others without having to comply with State procurement requirements, and that this was done solely to exclude the company.

[10] In the court below the company sought an order against the CCT, F in terms of which the latter would be prohibited from excluding the company from procurement opportunities in Khayelitsha and would be obliged to make such opportunities available to it. The company also sought an order in terms of which the CCT would be required to compensate it for financial losses sustained as a result of being 'deliberately marginalised . . . in Khayelitsha'. Against FG, the company sought G compensation in the sum of R1,74 m, which it alleged was the financial loss it suffered as a result of being unfairly excluded from the CBD project. Additionally, it sought compensation from FG in the sum of R240 000, which it claimed represented the loss it suffered as a result of cancellation by FG of a contract to be a consultant on the 'Setsing H project' in the Free State. It is difficult to discern the basis on which this latter claim falls within the jurisdiction of the Equality Court. Later,

Navsa JA and Mhlantla JA (Cloete JA, Van Heerden JA and Ebrahim AJA concurring)

A when we set out the background in greater detail and evaluate the evidence...