Premier Attraction 300 CC t/a Premier Security v City of Cape Town

Premier Attraction 300 CC t/a Premier Security concluded a six-year contract with the City of Cape Town to provide security services from 1 October 2008 to 30 September 2014. Contract prices for the first two years were agreed. For later periods, price escalations depended on sectoral determinations issued under the Labour Relations Act. When sectoral determinations increased wages, Premier applied for price increases based on its interpretation of the contract. The City rejected Premier’s calculations and paid escalations based on its own interpretation. Believing that insisting on its own calculations would result in non-payment, Premier invoiced according to the City’s calculations without communicating any objection or invoking dispute resolution mechanisms in the contract. After the contract ended, Premier for the first time demanded payment of an alleged shortfall amounting to over R16 million. The City resisted the claim on the bases of waiver and prescription.

The appeal was dismissed with costs, including the costs of two counsel.

The case provides authoritative guidance on waiver in South African contract law, confirming that waiver may be inferred from conduct and silence where a party has a duty to act. It also reinforces that prescription begins to run once a debt is due, irrespective of a creditor’s understanding of its legal rights, and underscores the importance of promptly invoking contractual dispute mechanisms.