THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case No:   115/2010

In the matter between:

ETHEKWINI MUNICIPALITY                                                        First Appellant
MINISTER OF TRANSPORT                                                       Second Appellant
MEMBER OF THE EXECUTIVE COUNCIL
FOR THE PORTFOLIO OF TRANSPORT IN
THE PROVINCE OF KWAZULU-NATAL                                   Third Appellant

and

COMBINED TRANSPORT SERVICES (PTY)
LTD                                                                                                    First Respondent
KZT BUS SERVICES (PTY) LTD                                             Second Respondent
KZT COUNTRY CRUISER (PTY) LTD                                     Third Respondent
SOUTH COAST BUS SERVICE (PTY) LTD                           Fourth Respondent
NGOTSHANA BUS SERVICES CC                                              Fifth Respondent
MASIJABULE TRANSPORT CC                                                 Sixth Respondent
IKHWEZI BUS SERVICE (PTY) LTD                                    Seventh Respondent
TANSNAT BUS SERVICE (PTY) LTD                                      Eighth Respondent
TANSNAT COACHLINES (PTY) LTD                                       Ninth Respondent

Neutral citation:
Ethekwini Municipality v Combined Transport Services
(115/10) [2010] ZASCA 158 (1 December 2010)

Coram:
MPATI P, HEHER, MAYA and SNYDERS JJA and R
PILLAY AJA

Heard:
15 November 2010
Delivered:
1 December 2010

Summary:
Appeal ─ Power of Court of Appeal ─ Power in terms of s 21A of
Supreme Court Act 59 of 1959 to dismiss appeal where judgment or order sought
would have no practical effect or result.

___________________________________________________________

ORDER

On appeal from: KwaZulu-Natal High Court, (Pietermaritzburg) (Rall
AJ sitting as court of first instance):

The appeal is dismissed with costs.
__________________________________________________________

JUDGMENT

R PILLAY AJA  (MPATI P and HEHER and MAYA and SNYDERS
JJA concurring)

[1] With the leave of the trial court, the appellants appeal against the
judgment of the Pietermaritzburg High Court (Rall AJ) reviewing and
setting aside the decision of the Department of Transport, KwaZulu-
Natal,1 to award to Tansnat Bus Service (Pty) Ltd, the eighth respondent
the remainder (fifteen months) of a seven-year contract relating to the
operation of bus services in the Durban and surrounding areas. The issue
in the court below was the validity or otherwise of the decision to award
the remainder of the contract to Tansnet Bus Service (Pty) Ltd.

[2] Prior to October 2003, first and third appellants provided a bus
service to the public of the greater Durban and surrounding areas, as they
were obliged to do, the third appellant having been responsible, in terms
of s 9 of the National Land Transport Transition Act 22 of 2000
(‘Transport Transition Act’), for overseeing land public transport within

1 Third appellant is the member of the executive council for the portfolio of Transport in the Province
of KwaZulu-Natal and consequently the political head of the department.

the province of KwaZulu-Natal. However, earlier in the same year, the
first and third appellants decided to outsource public land transport in the
greater Durban and surrounding areas. Tenders for the provision of the
service were invited in terms of s 47(2) of the Transport Transition Act.

[3] Consequent upon the tender process and on or about 30 September
2003, the first and third appellants concluded a contract with
Remant/Alton Land Transport (Pty) Limited (‘Remant’) for the provision
of public passenger bus transport services in the greater area of Durban as
from 1 October 2003 to 30 September 2010. The service was intended to
provide transport for about ten thousand commuters daily.

[4] During March 2009, the Metro Group of companies (which
incorporates the first, second and third respondents as well as KZT Bus
Services (Pty) Ltd) represented by their general manager, Mr Vikesh
Maharaj (‘Maharaj’), reacted to newspaper reports and rumours of
Remant’s impending termination of the contract. Maharaj then addressed
various letters to the first and third appellants in which he explained the
capabilities of the companies he represented to provide the necessary bus
services, which were being provided by Remant.

[5] On 17 March 2009, representatives of the first and third appellants
convened a meeting with the bus operators of the greater area of Durban,
to discuss how one or more of them could assist in providing bus services
in areas where Remant was unable to do so. The meeting ended with the
bus operators being invited to submit proposals to the offices of the third
appellant indicating their capacity to accommodate Remant’s commuters
on short notice, in areas where Remant was unable to provide the service.

[6] On 1 June 2009 Remant gave written notice to the first appellant of
its intention to terminate the contract on 30 June 2009. The termination
was accepted and Remant was requested to source an alternate operator
as provided for in terms of the contract. On 17 June 2009 Remant
informed the first appellant that it was unable to find an alternate operator
and that the agreement would still be terminated with effect from 30 June
2009.

[7] It is common cause that by 6 July 2009 the third appellant had
decided to appoint the eighth respondent as an alternate operator until 30
September 2010, being the remainder of the period that the contract with
Remant was scheduled to run. It is also common cause that no tenders
were invited for the appointment of a bus operator to provide the bus
services for the remainder of the period of the contract.

[8] On 16 July 2009, the first to sixth respondents launched an urgent
application in the Pietermaritzburg High Court seeking an order, firstly,
interdicting the appellants and the eighth and ninth respondents from
implementing the award of the contract and secondly, reviewing and
setting aside the decision of the first and third appellants to award the
contract to the eighth respondent on the basis of non-compliance with the
provisions of subsections 47(1) and (2) of the Transport Transition Act,2
which read as follows:
‘47 Subsidised service contracts
(1)
After the expiry of any interim contract or current tendered contract or any
extention thereof, whether provided for in such contract or negotiated, if the public
transport service that had been operated in terms thereof will continue to be
subsidised, that service must be operated in terms of a subsidised service contract.

2 The National Land Transport Transition Act 22 of 2000 was repealed and replaced by the National
Land Transport Act 5 of 2009.

(2)
Only a provincial department, a transport authority and a metropolitan
municipality may enter into a subsidised service contract with a public transport
operator, and subject to subsection (3), only if ─
(a)
the service to be operated in terms thereof, has been put out to public
tendering in accordance with a procedure prescribed by or in terms of a law of the
province;
(b)
the tender has been awarded by the tender authority, in accordance with that
procedure, and
(c)
the contract is entered into with the successful tenderer.
(3)
. . .’
To justify their failure to put the service out tender, the respondents relied
on certain provisions in the contract which allowed for the appointment
of an alternate operator, by either party. The application was successful
and the decision to award the remainder of the contract to the eighth
respondent was set aside.

[9] By the time the appeal was heard on 15 November 2010, the
contract in question had run its full course ─ to 30 September 2010. In his
heads of argument, counsel for the respondents submitted that the issue of
the validity of the agreement had become moot, that a decision on the
merits of the appeal will have no practical effect and the appeal should
therefore be dismissed on that ground alone, in terms of s 21A of Act 59
of 1959) (‘the Act’). Counsel were accordingly invited to first address us
on the question of mootness.

[10] Section 21A(1) of the Act reads:
‘(1)
When at the hearing of any civil appeal to the Appellate Division [Supreme
Court of Appeal] or any Provincial or Local Division of the Supreme Court [High
Court] the issues are of such a nature that the judgment or order sought will have no
practical effect or result, the appeal may be dismissed on this ground alone.’

[11] Where the relief sought on appeal is moot and would be of
academic interest only, the merits of the appeal will not be entertained
and the appeal will be dismissed on that ground alone. (See Port
Elizabeth Municipality v Smit 2002 (4) SA 241 (SCA); Radio Pretoria v
Chairman, Independent Communications Authority of South Africa &
another 2005 (1) SA 47 (SCA)).

[12] Counsel for the third appellant contended on behalf of all the
appellants that the appeal was not moot because the question of the
validity of the contract is a live issue and could have the following
consequences viz (a) the appellants may be sued for damages by the
respondents; (b) there may be outstanding amounts due to the eighth
respondent for services rendered in terms of the contract, and (c) the
matter of subsidies might have to be assessed.

[13] Section 21A however confers a discretion on this court to deal with
the merits of the appeal. This would be done where an appeal involves a
question of law and which is likely to arise again. (See Land &
Landbouontwikkelingsbank van Suid-Afrika v Conradie 2005 (4) SA 506
(SCA).

[14] It is clear that the contract in question no longer exists and its
validity or otherwise is therefore no longer a live issue. Consequently,
deciding that issue will have no practical effect or result.

[15] The factors raised on behalf of the appellants are all speculative.
There is no evidence that similar matters, based on similar facts, will arise
in future. As was said in Radio Pretoria para 41:
‘. . . Courts of appeal often have to deal with congested court rolls. They do not give

advice gratuitously. They decide real disputes and do not speculate or theorise . . .’.
[16] In any event the Transport Transition Act has since been repealed
and the wording of the equivalent section in the National Land Transport
Act 5 of 2009 is different. Consequently there is no likelihood of the
circumstances in this case being repeated.

[17] In National Coalition for Gay and Lesbian Equality & others v
Minister of Home Affairs & others 2000 (2) SA 1 (CC), Ackermann J in
referring to JT Publishing (Pty) Ltd & another v Minister of Safety and
Security & others 1997 (3) SA 514 (CC) said at para 21 (footnote 18):
‘A case is moot and therefore not justiciable if it no longer presents an existing or live
controversy which should exist if the Court is to avoid giving advisory opinions on
abstract propositions of law.’

[18] Clearly the matter is moot and there is no factual basis for the
exercise of the discretion to entertain the appeal. The appeal therefore
falls to be dismissed.

[19] The appeal is dismissed with costs.

___________________

R Pillay
Acting Judge of Appeal

APPEARANCES

FIRST APPELLANT:

ABG Choudree
Instructed by Linda Mazibuko and Ass,
Durban
Matsepes Inc, Bloemfontein

THIRD APPELLANT:
DJ Shaw SC (with him R Padayachee)
Instructed by Ngcobo Poyo Diedricks
Inc, Pietermaritzburg
Bezuidenhouts Inc, Bloemfontein

1ST to 6TH RESPONDENTS:
RAK Vahed SC
Instructed by Livingston Leandy Inc,
Durban
McIntyre & van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

1 December  2010

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form
part of the judgment.

Ethekwini Municipality v Combined Transport Services Pty (Ltd)
(115/10) [2010] ZASCA 158 (1 December 2010)

Media Statement

The Supreme Court of Appeal (SCA) upheld an appeal against an order
of the KwaZulu-Natal High Court (Pietermartizburg) and dismissed the
claim by the appellants.  The main issue in the court a quo concerned
the validity of the decision to award the remainder of the contract to the
eighth respondent.

The appellants were responsible for the provision of bus services to the
people of Durban and surrounding areas.

A decision was taken by the first and third appellants to outsource
public land transport and they subsequently proceeded to invite tenders
to provide the bus service and ultimately awarded the tender to a
company, Remant/Alton Land Transport (Pty) Ltd (Remant), for the
provision of public transport in the greater Durban area.

Upon Remant's decision to terminate its contract with the appellants
midway through the contract, the third appellant appointed the eighth
respondent, Tansnat Bus Service (Pty) Ltd, as an alternate transport
provider, without inviting tender to provide the service for the remainder
of the contract.

The first and sixth respondents then proceeded to launch an urgent
application in the high court interdicting the appellants and the eighth
and ninth respondents from performance under the contract and, in
addition, the review and setting aside of the decision of the first and
third appellants to award the contract to the eighth respondent due to
their failure to comply with the requisite tender procedures.  The first to
sixth respondents were successful and the decision by the appellants to

award the contract to the eighth respondent was set aside.  The
appellants appealed against the order made by the high court setting
aside the award made to the eighth respondent.

By the time the appeal was heard, the time period stipulated in the initial
contract between the appellants and Remant had run its full course.
Further, the Transport Transition Act had been repealed.  On this basis
the SCA found that the issue regarding the validity of the agreement had
become moot and that deciding the matter on its merits would have no
practical effect.  It therefore dismissed the appeal on that ground alone,
in terms of s 21A of the Supreme Court Act 59 of 1959.