Eastern Cape Rural Development Agency and Another v Agribee Beef Fund (Pty) Ltd and Others (827/2020) [2022] ZASCA 2; 2023 (5) SA 100 (SCA) (6 January 2022)

Eastern Cape Rural Development Agency and Another v Agribee Beef Fund (Pty) Ltd and Others (827/2020) [2022] ZASCA 2; 2023 (5) SA 100 (SCA) (6 January 2022)

The Supreme Court of Appeal held that the tripartite agreement between the Department, the Agency, and Agribee Beef Fund (Pty) Ltd was for the provision of goods and services as contemplated by section 217(1) of the Constitution. The agreement required the private entity to provide cattle, veterinary kits, feed...

Source-derived case information.

Citation
[2022] ZASCA 2
Parties
Appellant: Eastern Cape Rural Development Agency; Appellant: Member of the Executive Council for Rural Development and Agrarian Reform, Province of the Eastern Cape; Respondent: Agribee Beef Fund (Pty) Ltd; Respondent: Berlin Beef (Pty) Ltd; Respondent: The respondents listed on Schedule 1 hereto
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
6 January 2022
Case Number
827/2020
Procedural Posture
Civil Appeal / Appeal From Eastern Cape Division of the High Court, Grahamstown
Outcome
Appeal upheld. The agreement declared invalid.
Judges
Saldulker, Dambuza, Mathopo, Mocumie, Plasket
Legal Topics
Public Procurement, Constitution Section 217, Contract Invalidity, Declaratory Relief, Agency Powers, Rural Development Funding
Administrative Law Civil Procedure Commercial and Corporate Public Procurement Constitution Section 217 Contract Invalidity Declaratory Relief Agency Powers +1 more

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Parties

Eastern Cape Rural Development Agency

Appellant

Member of the Executive Council for Rural Development and Agrarian Reform, Province of the Eastern Cape

Appellant

Agribee Beef Fund (Pty) Ltd

Respondent

Berlin Beef (Pty) Ltd

Respondent

The respondents listed on Schedule 1 hereto

Respondent

Procedural Posture

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

Legal Issues

  1. 1 Whether the tripartite agreement between two organs of state and a private entity was one that contemplated contracting for goods or services.
  2. 2 Whether the agreement required compliance with section 217(1) of the Constitution regarding procurement processes.
  3. 3 Whether the absence of a procurement process rendered the agreement invalid.

Ratio Decidendi

The Supreme Court of Appeal held that the tripartite agreement between the Department, the Agency, and Agribee Beef Fund (Pty) Ltd was for the provision of goods and services as contemplated by section 217(1) of the Constitution. The agreement required the private entity to provide cattle, veterinary kits, feed supplements, training, and mentorship to smallholder farmers, all funded by public money. Both the Department and the Agency, as organs of state, benefited from these services, which otherwise would have had to be provided directly by them. The absence of a procurement process that complied with section 217(1) rendered the agreement invalid. The court rejected the respondents'...

Court Disposition

Appeal upheld. The agreement declared invalid.

Orders

  • The appeal is upheld with costs.
  • The order of the court below is set aside and replaced with a declaration that the agreement concluded on 16 July 2018 between the Department of Rural Development and Agrarian Reform, the Eastern Cape Rural Development Agency, and the Eastern Cape Beef Fund is invalid.