In the case of Ekurhuleni Metropolitan Municipality v Business Connexion (Pty) Ltd (SCA) (unreported case no 1186/2023, 10-4-2025) (Nicholls, Smith, Keightley and Baartman JJA and Modiba AJA), the Supreme Court of Appeal (SCA), struck the matter off the roll. The SCA said that the issues in the application for reconsideration did not raise important or disputed questions of law. The SCA further added that the matter also did not engage the jurisdiction of the SCA. The SCA said that the matter came to court pursuant to an application for reconsideration to the President of the SCA in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013 (the Act).
The SCA’s first consideration was whether it had jurisdiction to hear the appeal. The SCA pointed out that the power conferred on the President in terms of s 17(2)(f) is to determine whether there are exceptional circumstances that warrant a reconsideration of the matter. If the President exercises her discretion in favour of the applicant, the matter is then referred to five judges. The SCA referred to Motsoeneng v South African Broadcasting Corporation Soc Ltd and Others 2024 JDR 2195 (SCA), and more recently in Bidvest Protea Coin Security (Pty) Ltd v Mabena 2025 JDR 1325 (SCA), in which it held that it is the court to which a referral is made in terms of s 17(2)(f) that must decide whether there are exceptional circumstances and only if exceptional circumstances are established does the SCA have jurisdiction.
The SCA pointed out that although there is a reluctance to define what exceptional circumstances entail as each case must be considered on its own merits, it is generally accepted that it must encompass something out of the ordinary. The SCA added that disputes are largely factual. The SCA said that the trust of the Municipality’s application was essentially that there was a factual basis to claim non-performance of the contract which warrants reconsideration. The SCA had to look at whether there was a risk of a grave failure of justice.
The SCA said that there was no dispute that the Municipality entered into an agreement with BCX for the purchase of software and licenses for the sum of
R 85 479 53,26. The SCA pointed out that the question was whether there was non-performance of the contract by BCX, which absolves the Municipality from making payment. The SCA said that the Municipality primarily relied on two defences. First being that BCX failed to show that there was delivery of the said licenses and the software, which it was obliged to do in order to succeed in its claim. And the second being the timing of the delivery, which the Municipality contends should have taken place only once its infrastructure had been upgraded to a more stable environment. As such the Municipality contends that software was to be purchased on an ‘as-and-when-required’ basis.
The SCA said that in March 2020 the Municipality was advised by Oracle Corporation (South Africa) (Pty) Ltd (Oracle) that it needed to upgrade its infrastructure. As a result, in May 2020 the Municipality embarked on a process to establish a panel of accredited service providers to renew the existing software licenses and procure new software from Oracle. The SCA pointed out that BCX was appointed by the Municipality to its panel of service providers. The SCA added that on 5 August 2020 the Municipality sent a Request for Quotation (RFQ) to each of the Oracle partners on the list, including BCX, with a heading that mirrored a letter of appointment stipulating that it is ‘… for the acquisition of additional software licences, software licence renewal, software maintenance, implementations and enhancements for Oracle Software that is in use from date of award until 30 June 2023’. BCX’s bid was successful.
The SCA said that on 27 August 2020 the Municipality sent an agreement to be signed by BCX titled ‘ICT Instruction to perform Work’ (IPW). The SCA added that the IPW was followed by a letter from the Municipality to Oracle confirming the ‘execution’ of the agreement with BCX and setting out the Oracle products to be purchased. The SCA pointed out that believing that they had been awarded the tender, on 28 August 2020, BCX procured the specified licences and made payment. On 1 September 2020, Oracle sent a welcome letter to the Municipality ‘C/O Business Connexion (Pty) Ltd’ confirming the purchase and the availability of the licences, as well as technical support services.
The SCA said that the letter was e-mailed to Ms Musa Tleane at BCX and to Mr Peter Paulos Moloko Monyepao at the Municipality. The SCA pointed out that Mr Monyepao is the deponent to the Municipality’s answering affidavit. The SCA added that on 23 September 2020, Ms Matlhodi Senyatsi from the Municipality sent an e-mail to Ms Tleane at BCX stating that they ‘would like to place the order for procurement of additional licences on hold, while the City determines if the modules intended to be used by these licences will be required going forward’.
The SCA pointed out that Ms Tleane responded that the BCX had ordered and procured the licences as per the Municipality’s instruction of 27 August 2020. The SCA said it was, therefore, impossible to put procurement on hold. The SCA added that a couple of days later, on 25 September 2020, Mr Menyepao sent an e-mail stating that due to budget cuts, the Municipality was enabled ‘to honour the order for additional licences’ and that they had not received delivery of the licences. The e-mail stated that they would, ‘however, proceed with the procurement of the Taleo and compliance licences, which is the first line item on the IPW’. The SCA said that Ms Tleane responded that the licences were e-mailed to Mr Monyepao between 29 and 30 August 2020, consisting of the welcome pack from Oracle with all the entitlements attached to the software, as per the IPW.
The SCA added that on 29 October 2020, the Municipality sent a letter to BCX requesting a cancellation order, stating that due to the COVID-19 pandemic the city had been struggling with revenue collection and as a result, budgets have been drastically cut. The SCA pointed out that BCX responded in a letter dated 27 January 2021, setting out how Oracle processed the order from BCX and issued an electronic entitlement copy to the Municipality via e-mail addressed to Mr Monyepao. That letter confirmed that the order was non-cancellable, BCX had paid for the licences, and it would be impossible to reverse the transaction. The SCA said that it was noted that ‘… the proposed cancellation is of a commercial budget nature’ and BCX offered to come to some workable payment arrangement. The SCA added that when no arrangement could be reached, BCX launched this application on 14 October 2021.
The SCA pointed out that the High Court rejected the Municipality’s defences, that firstly Mr Benjamin Strydom, the deponent to BCX’s founding and replying affidavits, had no personal knowledge of the matter. It held that the managing executive of BCX to whom Oracle units reported, had sufficient knowledge of the matter. The SCA also said that there was no legal basis for the Municipality’s contention that the licences were not delivered. The High Court, also did not accept that it was a tacit term of the agreement that the licences were not required immediately but at some future date when the Municipality had migrated from an outdated, unstable and unsupported IBM environment to a more stable Huawei environment.
The SCA, further stated that the IPW did not state that the Taleo licences would be required immediately, while the others would not. The SCA added that the High Court said that if it were indeed the intention of the parties that the contract would be executed as and when certain upgrades were made, this would have been clearly and ambiguously stipulated in the agreement. Nor would the tender office of the Municipality have written to confirm the rates for 12 months after approval if it had not anticipated that the procurement would be within the year.
The SCA pointed out that on the issue of non-delivery, the Municipality contended that BCX did not provide proof that it had provided the licences. The SCA said that for this the Municipality relied on the fact that the welcome letter was sent by Oracle to the Municipality ‘C/O BCX’. The court said this was of little importance as the licences were delivered by e-mail to Mr Monyepao, as was confirmed in an e-mail to him almost four weeks later. Delivery was also confirmed by Mr Anees Mayet who was employed by Oracle. The SCA pointed out that it had reiterated on numerous occasions that a genuine dispute of fact only exists where the party who raises the dispute seriously and unambiguously addresses the disputed facts. The SCA said that a bare denial was only sufficient where there is no other way open to the disputing party. The SCA pointed out that this was not such a case.
The SCA said that in the letter of cancellation that sets out in the clearest terms the reason for the Municipality’s refusal to pay, nowhere is the non-delivery of the licences mentioned, or that the common understanding was that the licences would only be required once certain upgrades were completed. The SCA said that the sole reason provided was that the Municipality did not have the money to pay the purchase price because their revenue had been drastically reduced due to COVID-19. The SCA pointed out that the inability to pay for a contract freely and voluntarily entered into, was no defence in these circumstances.
The SCA said that the judgment of the High Court led to no grave injustice and did not bring the administration of justice into disrepute. The SCA made the following order:
The matter is struck off the roll, and the applicant is to pay the costs of the reconsideration including the costs of two counsel.
Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.
This articlel was first published in De Rebus in 2025 (May) DR 45.
