Street Pole Ads Durban (Pty) Ltd v Ethekwini Municipality and Another

The University of KwaZulu-Natal concluded a main agreement with the Ethekwini Municipality in 1999 to run an ‘adopt a light/adopt a pole’ fundraising project, under which the university would obtain sponsors to advertise on municipal poles and pay 90% of gross income to the municipality. In 2002 the university entered into an adoption agreement with Street Pole Ads Durban (Pty) Ltd (SPA), granting SPA exclusive control over the advertising on the poles in return for 20% of SPA’s gross turnover. SPA effectively took over management and exploitation of the project. The municipality objected, contending that the adoption agreement amounted to an unlawful subcontracting of the university’s obligations without written consent, as prohibited by the main agreement. In 2004 the municipality removed SPA’s advertisements, prompting SPA to obtain spoliation relief. The municipality counter-applied for a declarator that the adoption agreement was unenforceable against it.

The appeal was dismissed with costs. The declarator that the adoption agreement was not enforceable against the municipality stood, while the confirmation of the spoliation order and the refusal of costs in the High Court remained undisturbed.

The case clarifies the limits of spoliation relief in South African law, confirming that where an applicant seeks relief extending beyond restoration, a respondent may challenge the applicant’s underlying right to possession. It also provides authoritative guidance on the interpretation of ‘subcontracting’ in contracts and affirms strict enforcement of non-cession and non-subcontracting clauses, particularly in municipal and public-interest contracts.