NorthWest Provincial Government and Another v Tswaing Consulting CC and Others (190/05) [2006] ZASCA 108; [2007] 2 All SA 365 (SCA); 2007 (4) SA 452 (SCA) (21 November 2006)

NorthWest Provincial Government and Another v Tswaing Consulting CC and Others (190/05) [2006] ZASCA 108; [2007] 2 All SA 365 (SCA); 2007 (4) SA 452 (SCA) (21 November 2006)

The Supreme Court of Appeal found that the service agreement and arbitration agreement were procured by fraud and were voidable at the instance of the province. The province did not affirm the contract with full knowledge of the fraud and attempted to rescind it, albeit ineffectually. Tswaing failed to provide any evidence that restitution would be unjust, having evaded all material allegations regarding the value of its services. The arbitration agreement, being embedded in a fraud-tainted contract, could not survive rescission. Justice required that the province be afforded restitution, and Tswaing was ordered to repay all amounts received under the contract. The appeal was upheld, and...

Citation
[2006] ZASCA 108
Parties
Appellant: NorthWest Provincial Government; Appellant: NorthWest Tender Board; Respondent: Tswaing Consulting CC; Respondent: Mangope, Swai Mathaniel; Respondent: Sebakwane, Martin Oleboleng; Respondent: Odame-Takyi, Kweku; Respondent: Van Rooyen, JWC, NO
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
21 November 2006
Case Number
190/05
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal upheld; orders of the High Court set aside; application succeeds with costs, including costs of two counsel and costs of the application for postponement.
Judges
Zulman JA, Cameron JA, Nugent JA, Maya JA, Cachalia AJA
Legal Topics
Fraudulent Misrepresentation, Rescission of Contract, Restitution, Arbitration Agreement, Tender Board Approval
Commercial and Corporate Civil Procedure Fraudulent Misrepresentation Rescission of Contract Restitution Arbitration Agreement Tender Board Approval

Case Brief

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Parties

NorthWest Provincial Government

Appellant

NorthWest Tender Board

Appellant

Tswaing Consulting CC

Respondent

Mangope, Swai Mathaniel

Respondent

Sebakwane, Martin Oleboleng

Respondent

Odame-Takyi, Kweku

Respondent

Van Rooyen, JWC, NO

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the service agreement and arbitration agreement were induced by fraud and thus voidable at the instance of the province.
  2. 2 Whether the province effectively rescinded the contract and was entitled to restitution of payments made to Tswaing.
  3. 3 Whether the arbitration agreement could survive the rescission of the underlying contract.

Ratio Decidendi

The Supreme Court of Appeal found that the service agreement and arbitration agreement were procured by fraud and were voidable at the instance of the province. The province did not affirm the contract with full knowledge of the fraud and attempted to rescind it, albeit ineffectually. Tswaing failed to provide any evidence that restitution would be unjust, having evaded all material allegations regarding the value of its services. The arbitration agreement, being embedded in a fraud-tainted contract, could not survive rescission. Justice required that the province be afforded restitution, and Tswaing was ordered to repay all amounts received under the contract. The appeal was upheld, and...

Court Disposition

Appeal upheld; orders of the High Court set aside; application succeeds with costs, including costs of two counsel and costs of the application for postponement.

Orders

  • The appeal succeeds with costs, including the costs of two counsel, which are to include the costs of the application for postponement.
  • The order of the court below dismissing the application is set aside.