Masakhane Security Services (Pty) Ltd v University of Fort Hare (530/2011) [2012] ZAECBHC 1 (19 January 2012)

Masakhane Security Services (Pty) Ltd v University of Fort Hare (530/2011) [2012] ZAECBHC 1 (19 January 2012)

The respondent, as an organ of state, is subject to administrative law and the Constitution. The contract between the parties, as evidenced by the appointment letter, was for a period of at least 12 months and renewable for a further 24 months in terms of the respondent's Supply Chain Management Policy. The language of the contract created a legitimate expectation for the applicant that the contract would be considered for renewal. The respondent's refusal to consider extension, without engaging with the applicant or negotiating the renewal terms, was procedurally unfair and unlawful. The respondent's argument that renewal required a new tender process was not supported by the contract...

Citation
[2012] ZAECBHC 1
Parties
Applicant: Masakhane Security Services (Pty) Ltd; Respondent: University of Fort Hare
Court
Eastern Cape High Court, Bhisho
Jurisdiction
South Africa
Judgment Date
19 January 2012
Case Number
530/2011
Procedural Posture
Review Application / Judgment After Urgent Application and Argument
Outcome
The respondent's decision to refuse to consider extending the contract with the applicant was reviewed, declared unlawful, and set aside. Costs were awarded to the applicant.
Judges
P.W. Tshiki
Legal Topics
Legitimate Expectation, Contractual Renewal, Procedural Fairness, Interpretation of Contracts, Promotion of Administrative Justice Act
Administrative Law Commercial and Corporate Legitimate Expectation Contractual Renewal Procedural Fairness Interpretation of Contracts Promotion of Administrative Justice Act

Case Brief

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Parties

Masakhane Security Services (Pty) Ltd

Applicant

University of Fort Hare

Respondent

Procedural Posture

Review Application / Judgment After Urgent Application and Argument

Legal Issues

  1. 1 Whether the conduct of the respondent in refusing to renew the contract is subject to judicial review.
  2. 2 Whether the contract between the parties was renewable for a further period of two years after its expiry.
  3. 3 Whether the applicant had a legitimate expectation of renewal based on the contract terms.

Ratio Decidendi

The respondent, as an organ of state, is subject to administrative law and the Constitution. The contract between the parties, as evidenced by the appointment letter, was for a period of at least 12 months and renewable for a further 24 months in terms of the respondent's Supply Chain Management Policy. The language of the contract created a legitimate expectation for the applicant that the contract would be considered for renewal. The respondent's refusal to consider extension, without engaging with the applicant or negotiating the renewal terms, was procedurally unfair and unlawful. The respondent's argument that renewal required a new tender process was not supported by the contract...

Court Disposition

The respondent's decision to refuse to consider extending the contract with the applicant was reviewed, declared unlawful, and set aside. Costs were awarded to the applicant.

Orders

  • The decision by the respondent to refuse to consider extending the contract of service with the applicant beyond 31 December 2011 and for a period not in excess of 24 months, as contained in annexure 'MSS2', is reviewed, declared unlawful, and set aside.
  • The respondent is ordered to pay costs of this application.