Makgosi Consulting CC v Rustenburg Local Municipality (UM 55/2018) [2018] ZANWHC 67 (7 September 2018)

Makgosi Consulting CC v Rustenburg Local Municipality (UM 55/2018) [2018] ZANWHC 67 (7 September 2018)

The court found that clause 4.1, which purported to allow termination for any reason, conflicted with clause 18, which required notice and an opportunity to remedy any breach before cancellation. The respondent failed to comply with clause 18 by not placing the applicant in mora or affording it an opportunity to rectify alleged breaches. The applicant established a prima facie right to relief, as the agreements could not be lawfully terminated without compliance with the breach and termination provisions. The applicant demonstrated irreparable harm to its business and employees if the agreements were terminated, and the balance of convenience favoured the applicant. There was no other...

Citation
[2018] ZANWHC 67
Parties
Applicant: Makgosi Consulting CC; Respondent: Rustenburg Local Municipality
Court
North West High Court, Mafikeng
Jurisdiction
South Africa
Judgment Date
7 September 2018
Case Number
UM 55/2018
Procedural Posture
Urgent Application / Reasons for Judgment Following Grant of Urgent Interim Interdict
Outcome
Interim interdict granted in favour of the applicant, restraining the respondent from implementing the cancellation of the agreements pending final determination of an action to be instituted.
Judges
R D Hendricks
Legal Topics
Interim Interdict, Specific Performance, Contract Termination, Breach of Contract
Civil Procedure Commercial and Corporate Interim Interdict Specific Performance Contract Termination Breach of Contract

Case Brief

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Parties

Makgosi Consulting CC

Applicant

Rustenburg Local Municipality

Respondent

Procedural Posture

Urgent Application / Reasons for Judgment Following Grant of Urgent Interim Interdict

Legal Issues

  1. 1 Whether the respondent was entitled to cancel the service level agreements without complying with the breach and termination provisions in clause 18.
  2. 2 Whether the applicant is entitled to interim interdictory relief pending the institution of an action disputing the validity of the cancellation.
  3. 3 Whether the last sentence of clause 4.1, permitting termination for any reason, is valid in light of clause 18.

Ratio Decidendi

The court found that clause 4.1, which purported to allow termination for any reason, conflicted with clause 18, which required notice and an opportunity to remedy any breach before cancellation. The respondent failed to comply with clause 18 by not placing the applicant in mora or affording it an opportunity to rectify alleged breaches. The applicant established a prima facie right to relief, as the agreements could not be lawfully terminated without compliance with the breach and termination provisions. The applicant demonstrated irreparable harm to its business and employees if the agreements were terminated, and the balance of convenience favoured the applicant. There was no other...

Court Disposition

Interim interdict granted in favour of the applicant, restraining the respondent from implementing the cancellation of the agreements pending final determination of an action to be instituted.

Orders

  • This application is heard as an urgent application and condonation is granted for non-compliance with prescribed time limits, forms, and service.
  • The respondent is interdicted from implementing the cancellation of the electricity and water agreements pending final determination of an action to be instituted by the applicant within fourteen days.