THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:         The Registrar, Supreme Court of Appeal

Date:          Monday 22 September 2008

Status:        Immediate

Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court
of Appeal

Sandton Civic Precinct (Pty) Ltd v City of Johannesburg & Bombela
Consortium (458/2007) [2008] ZASCA 104 (September 2008)

In a judgment delivered today, the Supreme Court of Appeal has
dismissed an appeal in which a company sought to assert the
contested rights to develop the Sandton Civic Precinct, a valuable
ten-acre publicly-owned piece of land in the heart of Sandton.
The appellant, a private company whose largest shareholder is Mr
Bart Dorrestein, formerly chief executive officer of Stocks & Stocks
Limited, relied on a resolution the Eastern Metropolitan Local Council
(EMLC) adopted in November 2000.  That resolution ‘resolved to
recommend’ that (subject to certain conditions) the development
rights be awarded to the Sandton Civic Precinct Consortium (the
Consortium).
But the City of Johannesburg (the EMLC’s successor) in 2005
adopted a further resolution, in which it resolved not to proceed with
the previous award.  Instead, it re-investigated the development

rights, and decided to go ahead with the Bombela Consortium
(Bombela).
The Johannesburg high court dismissed the company’s claim on the
ground that the 2000 resolution was not legally enforceable, since it
was only a recommendation, and did not create legal rights.
The SCA took a different approach to the high court. It left the
question whether the 2000 resolution created enforceable legal rights
open.
Instead, the SCA found that the company seeking to assert the legal
rights did not have proper title (legal standing) to do so.
The crux of the SCA’s decision is that the company did not represent,
and had no title to represent, the two black economic empowerment
entities who were an integral part of the Consortium the 2000
resolution envisaged.
At the time of the resolution, the Consortium consisted of Mr
Dorrestein’s interests (ceded to him by Stocks & Stocks), JHI
Development Management (Pty) Ltd (a property-development
company), and two black empowerment entities – Ndodana Becker &
Associates, whose sole proprietor was Mr Webster Ndodana
(Ndodana) and ‘Sithembele (Pty) Ltd/Domestic Workers Association
Investment Company (Pty) Ltd’ (DWA).
But Mr Ndodana fell out of the picture because he joined Bombela.
And DWA was never incorporated at all.
Mr Dorrestein claimed that the interests of the two BEE partners were
being ‘held in trust by myself pending the acquisition of a suitable
black economic empowerment substitute’.
But the SCA rejected this claim.  The resolution expressly envisaged
and named its BEE components.  Mr Dorrestein had no title to hold
their rights ‘in trust’.  Nor had he obtained those rights by cession or
by any other means.
The SCA held that the appellant company had thus failed to establish
the legal lineage between itself and the rights-acquiring entity the
2000 resolution mentioned.
This was not just a technical point, but a fundamental and substantive
gap in the company’s case.  It had failed to show that it was the
rights-bearing entity – or was acting on the authority of that entity, or
had acquired its rights.
There was no suggestion in the 2000 resolution that the council
regarded
the
consortium’s
black
economic
empowerment
constituents as substitutable at will.

The SCA pointed out that the Consortium the resolution envisaged no
longer exists at all – indeed, two of the entities (the BEE components)
never came into existence at all.  In these circumstances the
appellant company had failed to show that it is entitled to assert the
claim it invokes.
The appeal was therefore dismissed.
Unusually, however, the SCA refused to grant the successful City a
costs award against the appellant company.  The SCA held that there
were singular features of this case which lead to the conclusion that
the company should not pay the City’s costs.
The City’s behaviour toward the appellant company was consistently
deplorable.  Rightly or wrongly, the company believed itself to be the
holder of valuable rights arising from an important resolution of the
council, dealing with a major public venture.  Despite the importance
of the matter, the City lost the original minutes of the November 2000
meeting at which the resolution was adopted, and the company was
obliged to reconstruct the resolution through painstaking collection of
alternative evidence.
After it had done so, the City behaved with less than courtesy, and
less than candour, in dealing with its claims.  As early as 2003, the
City’s property-owning and development company resolved to stop
dealing with the appellant company.  Yet for two years more the
company was kept on a string.  Letters were not answered, inquiries
were ignored and information was not supplied.
The SCA held that this was unacceptable behaviour for a public body,
particularly one dealing with an entity which has incurred significant
costs in relation to a public development project in which it believed,
not unreasonably, that it was partnering the City.
In all these circumstances the SCA as a mark of its disapproval of the
City’s conduct deprived the City of its costs, in the SCA as well as in
the high court.

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:         The Registrar, Supreme Court of Appeal

Date:          Monday 22 September 2008

Status:        Immediate

Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court
of Appeal

Sandton Civic Precinct (Pty) Ltd v City of Johannesburg & Bombela
Consortium (458/2007) [2008] ZASCA 104 (September 2008)

In a judgment delivered today, the Supreme Court of Appeal has
dismissed an appeal in which a company sought to assert the
contested rights to develop the Sandton Civic Precinct, a valuable
ten-acre publicly-owned piece of land in the heart of Sandton.
The appellant, a private company whose largest shareholder is Mr
Bart Dorrestein, formerly chief executive officer of Stocks & Stocks
Limited, relied on a resolution the Eastern Metropolitan Local Council
(EMLC) adopted in November 2000.  That resolution ‘resolved to
recommend’ that (subject to certain conditions) the development
rights be awarded to the Sandton Civic Precinct Consortium (the
Consortium).
But the City of Johannesburg (the EMLC’s successor) in 2005
adopted a further resolution, in which it resolved not to proceed with
the previous award.  Instead, it re-investigated the development

rights, and decided to go ahead with the Bombela Consortium
(Bombela).
The Johannesburg high court dismissed the company’s claim on the
ground that the 2000 resolution was not legally enforceable, since it
was only a recommendation, and did not create legal rights.
The SCA took a different approach to the high court. It left the
question whether the 2000 resolution created enforceable legal rights
open.
Instead, the SCA found that the company seeking to assert the legal
rights did not have proper title (legal standing) to do so.
The crux of the SCA’s decision is that the company did not represent,
and had no title to represent, the two black economic empowerment
entities who were an integral part of the Consortium the 2000
resolution envisaged.
At the time of the resolution, the Consortium consisted of Mr
Dorrestein’s interests (ceded to him by Stocks & Stocks), JHI
Development Management (Pty) Ltd (a property-development
company), and two black empowerment entities – Ndodana Becker &
Associates, whose sole proprietor was Mr Webster Ndodana
(Ndodana) and ‘Sithembele (Pty) Ltd/Domestic Workers Association
Investment Company (Pty) Ltd’ (DWA).
But Mr Ndodana fell out of the picture because he joined Bombela.
And DWA was never incorporated at all.
Mr Dorrestein claimed that the interests of the two BEE partners were
being ‘held in trust by myself pending the acquisition of a suitable
black economic empowerment substitute’.
But the SCA rejected this claim.  The resolution expressly envisaged
and named its BEE components.  Mr Dorrestein had no title to hold
their rights ‘in trust’.  Nor had he obtained those rights by cession or
by any other means.
The SCA held that the appellant company had thus failed to establish
the legal lineage between itself and the rights-acquiring entity the
2000 resolution mentioned.
This was not just a technical point, but a fundamental and substantive
gap in the company’s case.  It had failed to show that it was the
rights-bearing entity – or was acting on the authority of that entity, or
had acquired its rights.
There was no suggestion in the 2000 resolution that the council
regarded
the
consortium’s
black
economic
empowerment
constituents as substitutable at will.

The SCA pointed out that the Consortium the resolution envisaged no
longer exists at all – indeed, two of the entities (the BEE components)
never came into existence at all.  In these circumstances the
appellant company had failed to show that it is entitled to assert the
claim it invokes.
The appeal was therefore dismissed.
Unusually, however, the SCA refused to grant the successful City a
costs award against the appellant company.  The SCA held that there
were singular features of this case which lead to the conclusion that
the company should not pay the City’s costs.
The City’s behaviour toward the appellant company was consistently
deplorable.  Rightly or wrongly, the company believed itself to be the
holder of valuable rights arising from an important resolution of the
council, dealing with a major public venture.  Despite the importance
of the matter, the City lost the original minutes of the November 2000
meeting at which the resolution was adopted, and the company was
obliged to reconstruct the resolution through painstaking collection of
alternative evidence.
After it had done so, the City behaved with less than courtesy, and
less than candour, in dealing with its claims.  As early as 2003, the
City’s property-owning and development company resolved to stop
dealing with the appellant company.  Yet for two years more the
company was kept on a string.  Letters were not answered, inquiries
were ignored and information was not supplied.
The SCA held that this was unacceptable behaviour for a public body,
particularly one dealing with an entity which has incurred significant
costs in relation to a public development project in which it believed,
not unreasonably, that it was partnering the City.
In all these circumstances the SCA as a mark of its disapproval of the
City’s conduct deprived the City of its costs, in the SCA as well as in
the high court.