Affirmative Portfolios CC v Transnet Limited t/a Metrorail

Affirmative Portfolios CC, a labour broker, successfully tendered to supply 200 access controllers to Transnet t/a Metrorail for 36 months at a fixed rate based on R15 per hour plus a 15% administration fee, as recorded in a written agreement concluded in May 2000. Despite non-variation and fixed-price clauses, the appellant began charging a higher rate (R17.25 per hour plus 15%) from April to September 2000, alleging an oral authorisation by Transnet officials prior to signature of the written contract. Transnet paid the higher invoices without objection during this period. After discovering the overcharging, Transnet insisted on reversion to the contractual rate and later counterclaimed for repayment of alleged overpayments based on unjustified enrichment (condictio indebiti). The High Court dismissed the appellant’s claim for underpayment but upheld Transnet’s counterclaim. Affirmative Portfolios appealed to the Supreme Court of Appeal.

The appeal was partially upheld. The dismissal of the appellant’s claim was confirmed, but the appeal against the counterclaim succeeded. The High Court order was set aside and replaced with an order dismissing both the claim and the counterclaim, with each party to pay its own costs in the court a quo. Transnet was ordered to pay the costs of the appeal, including the costs of two counsel.

The case reaffirms the strict application of the parol evidence rule and the enforceability of non-variation clauses (Shifren principle) in South African contract law, especially in the context of public tender contracts. It also provides an important restatement of the excusable error requirement in the condictio indebiti and illustrates circumstances in which repeated negligent payments by a payer will be regarded as inexcusable, barring enrichment recovery.