Greater Tzaneen Municipality v Bravospan 252 CC

Greater Tzaneen Municipality and Bravospan 252 CC concluded a service level agreement (SLA) in November 2013, following a competitive tender, for the provision of security services for 12 months. Without a further tender process, the parties later concluded an addendum extending the SLA for an additional 24 months (1 November 2014 to 31 October 2016). The municipality assured Bravospan that the extension was legally permissible. The extension rendered the contract a long-term contract under the Municipal Supply Chain Management Regulations, triggering stricter procurement requirements that were not met. The municipality later successfully applied to have the extension agreement declared unconstitutional and invalid for non-compliance with s 217 of the Constitution. Despite this, and at the municipality’s request, Bravospan continued to provide security services throughout the extension period, for which it was not paid. Bravospan subsequently instituted action claiming payment based on, inter alia, unjustified enrichment. The High Court upheld the enrichment claim. The municipality appealed.

The appeal was upheld. The High Court’s order granting an unjustified enrichment claim was set aside and replaced with a declaration that Bravospan is entitled to compensation for services rendered from 1 November 2014 to 31 October 2016 as a just and equitable remedy under s 172(1)(b) of the Constitution. The matter was referred back to the High Court to determine the quantum of compensation. No order as to costs was made.

The case is significant for clarifying that unjustified enrichment claims are not 'debts' under the Institution of Legal Proceedings Against Certain Organs of State Act and thus do not require statutory notice. It reaffirms the non-recognition of a general enrichment action in South African law while demonstrating how courts may nonetheless grant compensation through constitutional remedies. The judgment is an important application of s 172(1)(b) of the Constitution in the context of unlawful public procurement, balancing constitutional compliance with fairness to contracting parties.