BW Brightwater Way Props (Pty) Ltd v Eastern Cape Development Corporation (1235/2019) [2021] ZASCA 47; 2021 (6) SA 321 (SCA) (19 April 2021)

BW Brightwater Way Props (Pty) Ltd v Eastern Cape Development Corporation (1235/2019) [2021] ZASCA 47; 2021 (6) SA 321 (SCA) (19 April 2021)

The Supreme Court of Appeal held that the lease agreement between Brightwater and the ECDC was constitutionally invalid due to non-compliance with procurement legislation and regulations, specifically the Preferential Procurement Framework Act and Treasury Regulations. The court found that the high court erred in preserving all rights under the invalid agreement, as section 172(1)(b) of the Constitution only allows for the preservation of accrued rights, such as compensation for performance already rendered, and not future rights to occupy the property. The court set aside the high court's orders and replaced them with an order dismissing the main application, upholding the...

Citation
[2021] ZASCA 47
Parties
Appellant: BW Brightwater Way Props (Pty) Ltd; Respondent: Eastern Cape Development Corporation
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
19 April 2021
Case Number
1235/2019
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Division of the High Court, East London
Outcome
Appeal dismissed; cross-appeal upheld. The lease agreement is declared constitutionally invalid and of no force and effect. Costs awarded to the respondent in the appeal and cross-appeal, including costs of two counsel and the application for leave to appeal.
Judges
Zondi, Molemela, Schippers, Kgoele, Eksteen
Legal Topics
Legality Review, Public Procurement, Constitutional Invalidity, Just and Equitable Remedy, Lease Agreement, Unjust Enrichment
Administrative Law Land and Property Civil Procedure Legality Review Public Procurement Constitutional Invalidity Just and Equitable Remedy Lease Agreement +1 more

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Parties

BW Brightwater Way Props (Pty) Ltd

Appellant

Eastern Cape Development Corporation

Respondent

Procedural Posture

Civil Appeal / Appeal From Eastern Cape Division of the High Court, East London

Legal Issues

  1. 1 Whether the lease agreement concluded between the parties was constitutionally invalid due to non-compliance with procurement legislation and regulations.
  2. 2 Whether the court may, in terms of section 172(1)(b) of the Constitution, preserve accrued rights under an invalid lease agreement.
  3. 3 Whether the high court was correct in awarding costs against the respondent despite its success in the counter-application.

Ratio Decidendi

The Supreme Court of Appeal held that the lease agreement between Brightwater and the ECDC was constitutionally invalid due to non-compliance with procurement legislation and regulations, specifically the Preferential Procurement Framework Act and Treasury Regulations. The court found that the high court erred in preserving all rights under the invalid agreement, as section 172(1)(b) of the Constitution only allows for the preservation of accrued rights, such as compensation for performance already rendered, and not future rights to occupy the property. The court set aside the high court's orders and replaced them with an order dismissing the main application, upholding the...

Court Disposition

Appeal dismissed; cross-appeal upheld. The lease agreement is declared constitutionally invalid and of no force and effect. Costs awarded to the respondent in the appeal and cross-appeal, including costs of two counsel and the application for leave to appeal.

Orders

  • The cross-appeal succeeds.
  • The appellant is directed to pay the respondent’s costs in the appeal and the cross-appeal, including the costs of two counsel where so employed and the costs of the application for leave to appeal in the court a quo.