Manong and Associates (Pty) Ltd v City of Cape Town and Another

The appellant, Manong and Associates (Pty) Ltd, is a civil engineering practice headed by Mr Mongezi Stanley Manong. The company lodged complaints in the Equality Court alleging that it was discriminated against on the basis of race by the City of Cape Town (CCT) and its predecessor, the City of Tygerberg (COT), by being generally excluded from municipal contracts in Khayelitsha and specifically from a retail development in the Central Business District (CBD). The company also alleged that Futuregrowth Property Development Company (Pty) Ltd (FG) discriminated against it by excluding it from the CBD development and the Setsing project in the Free State. The company alleged that a CCT official, Mr Hendrik Barnard, fabricated complaints about the quality of its work on the Lookout Hill project phase 1 and conspired with others to exclude the company from future work in Khayelitsha. Between 1996 and 2005, the CCT awarded the company 25 municipal projects outside of Khayelitsha valued at over R140 million. The company was awarded 2 projects in Khayelitsha between 1998 and 2000. The CBD project was developed on a turnkey basis with the main contractor WBHO appointing consultants, including black-owned firms. The Equality Court found that the company had been racially discriminated against generally in the allocation of work in Khayelitsha, but dismissed the complaint regarding the CBD project. No costs order was made.

• Whether the appellant established a prima facie case of unfair discrimination on the basis of race under sections 7(c) and (e) of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000
• Whether the Equality Court correctly applied the onus of proof in discrimination cases
• Whether the policies and practices of the CCT constituted unfair racial discrimination
• Whether the company was excluded from the CBD project on the basis of race
• Whether FG was properly joined in respect of the Setsing project
• Whether a costs order should be made against an unsuccessful litigant asserting constitutional rights in the Equality Court
• Whether the litigation was frivolous, vexatious or an abuse of process warranting a costs order

1. The appellant's appeals in respect of its exclusion from the CBD project and the upholding of the second respondent's plea of misjoinder in relation to the Setsing project are dismissed with costs, including the costs of two counsel. 2. The cross-appeal by the first respondent in respect of the broader Khayelitsha enquiry is upheld with costs, including the costs of two counsel. 3. The cross-appeals by the first and second respondents in relation to the costs order in both cases are upheld with costs, including the costs of two counsel. 4. The finding and costs order of the court below are set aside and substituted with an order dismissing the applicant's complaint of general discrimination in the allocation of contracts in Khayelitsha and ordering the applicant to pay the respondents' costs in relation to all complaints, including costs of two counsel. 5. The appellant is ordered to pay the respondents' wasted costs occasioned by the postponement of the appeal on 20 August 2010.

In discrimination cases under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000, the complainant bears the initial onus of establishing a prima facie case of discrimination. To establish differentiation as the foundation of a discrimination claim, a complainant must demonstrate that they were treated differently compared to other comparable persons or entities when considering the totality of relevant circumstances, not merely in isolated contexts. Only once a prima facie case is established does the onus shift to the respondent under section 13(1) of the Act to prove that discrimination did not occur, was not based on a prohibited ground, or was fair. The general principle that costs should not be awarded against unsuccessful litigants asserting constitutional rights against the State does not apply where litigation is frivolous, vexatious, manifestly inappropriate, or pursued for private commercial gain rather than genuine constitutional concerns. Courts exercising discretion under section 21(2)(o) of the Act may award costs against unsuccessful complainants where the manner in which litigation was conducted, including reliance on unsupported allegations and irrelevant material, warrants such an order.

The Court expressed concern about the abuse of Equality Court procedures by well-resourced litigants capable of conducting litigation on a grand scale, which undermines the intended expedition and easy access to justice for lay litigants and the general public. The Court noted that legislative attention may be required to address whether financially capable entities should be able to use the Equality Court machinery in this manner. The Court condemned Manong's conduct during the proceedings, including making outrageous and irrelevant statements such as alleging that black Africans will not deal with other Africans "unless they get kickbacks," suggesting Afrikaans speakers were a common denominator in procurement problems, making threats, accusing witnesses of criminal conduct without basis, and claiming without evidence that the company was being targeted by a government conspiracy. The Court observed that such conduct should not be tolerated in any court, least of all the Equality Court. The Court acknowledged that deeply embedded prejudice against black Africans in the Western Cape is difficult to overcome and expressed hope that all role players will work to undo the ravages of the past in an inclusive manner. The Court noted that Manong himself engaged in expedient conduct, including seeking dubious preferential treatment, engaging an employee to make fraudulent misrepresentations, being dismissive of socially meritorious projects with small financial rewards, and downplaying the role of coloured employees while emphasizing the company's status as wholly African-owned.

This case is significant for clarifying the proper approach to discrimination claims in the Equality Court under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. It establishes that: (1) a complainant must first establish a prima facie case of discrimination before the onus shifts to the respondent; (2) to establish differentiation, a complainant must show they were treated differently relative to comparable parties in the totality of circumstances, not in isolated contexts; (3) costs orders can and should be made against unsuccessful litigants in the Equality Court where litigation is frivolous, vexatious, contrived, or pursued for purely commercial gain rather than genuine constitutional concerns; (4) the mere labeling of litigation as constitutional does not immunize litigants from adverse costs consequences; (5) the Equality Court's intended informality does not permit abuse through unsupported allegations, irrelevant evidence, and improper conduct. The case also provides important guidance on the balance between encouraging genuine constitutional litigation and preventing abuse of the Equality Court system. It reinforces that while courts should be careful not to deter bona fide assertion of equality rights, well-resourced litigants cannot use the Equality Court machinery designed for lay litigants to pursue unfounded commercial claims. The judgment serves as a warning against unsubstantiated allegations of racism and emphasizes that given South Africa's history, such serious charges must be well-founded.