Qaukeni Local Municipality and Another v F V General Trading CC

The Qaukeni Local Municipality concluded a written refuse collection contract ("ZEV 2") with F V General Trading CC on 25 June 2006 for a one‑year period, with an automatic renewal clause, without following any competitive tender or prescribed municipal procurement processes. The contract exceeded R4 million per annum. When a new municipal manager sought to terminate the contract with effect from 30 June 2007, the respondent launched urgent proceedings in the High Court to enforce the contract. The municipality opposed the application and counter‑applied for a declaration that the contract was null and void due to non‑compliance with constitutional and statutory procurement requirements. The High Court held the contract valid and enforced it, prompting an appeal to the Supreme Court of Appeal.

The appeal succeeded. The High Court order was set aside. The respondent’s application was dismissed with costs, and the municipality’s counter‑application was granted. The contract 'ZEV 2' concluded on 25 June 2006 was declared null and void.

The case affirms strict compliance with section 217 of the Constitution and municipal procurement legislation, confirming that contracts concluded outside prescribed tender processes are invalid. It clarifies that no distinction exists between procurement of basic municipal services and other municipal services, and that municipalities may and must resist unlawful contracts even if they were party to the illegality.