[15]
This argument invokes the principle that an offending respondent in a spoliation application is generally not allowed to contest the
spoliated applicant’s title to the property. That is because good title is irrelevant: the claim to spoliatory relief arises
solely from an unprocedural deprivation of possession. There is a qualification, however, if the applicant goes further and claims
a substantive right to possession, whether based on title of ownership or on contract. In that case,
‘the respondent may answer such additional claim of right and may demonstrate, if he can, that applicant does not have the right to
possession which it claims.’
This is because such an applicant –
‘… in effect forces an investigation of the issues relevant to the further relief he claims. Once he does this, the respondent’s
defence in regard thereto has to be considered …’
[16]
The qualification applies here. SPA’s application sought classically spoliatory relief in demanding the restoration of the posters
the municipality had despoiled (para 1.2). But, as Nicholson J pointed out, its claim went further. It pressed for an interdict,
not directed only to the despoiled property, but in wide terms embracing all the ‘various street poles in the Ethekwini metropolitan
area’ covered by the disputed agreements. That claim spoiled for a fight about its title to those poles, and it was this fight in which the municipality was entitled to and
did engage.
[17]
What is more, four days after SPA obtained the interim interdicts, the municipality agreed to a consent order, in terms of which the
order in paragraph 1.2 (requiring restoration of the despoiled advertisements to the poles) was substituted with an order that the
municipality simply return direct to SPA the advertising material in question. This the municipality did. There was thereafter no
threat by the municipality to despoil SPA’s posters, nor any suggestion that it would resume doing so. It subjected its wish
to remove further posters from its poles to establishing its right to do so in this litigation. The fight thereafter was thus in
substance about SPA’s claim to derive title from the adoption agreement. It would be both unrealistic and unfair to hold otherwise.
[18]
It is true that SPA proposed to establish its title not overtly in the motion proceedings, but in a trial action which order 1.3 envisaged
would be instituted ‘within twenty days’ of the grant of the interdicts. It would in my view be obstructively formalistic
to hold that, rather than waiting for trial, the municipality could not join issue immediately on that dispute – as it did
– nor join the university in the proceedings for that purpose, as it did. The high court, which had all the relevant information
and contentions before it, chose instead to decide the issue immediately: a just and sensible approach.
The proper interpretation of the main agreement
[19]
The pivotal issue is thus whether the conclusion of the adoption agreement violated the main agreement, entitling the municipality
to the relief it sought in its counter-application. I agree with the appellants (and respectfully differ here from Nicholson J) that
in answering this question it is unnecessary (and indeed impermissible in the circumstances of this case) to look beyond the plain
meaning of the agreement itself, in its background setting, since it contains no ambiguities or uncertainties. (The appellants justly
objected that the specimen adoption agreements to which the Judge had regard as background circumstances were sent out only some
years after the main agreement was concluded; they could not therefore have formed part of the background against which the contract’s
meaning is to be ascertained.)
[20]
The university and SPA vigorously argued that the adoption agreement did not fall foul of the main agreement. They pointed out the
main agreement specified only that 90% of income received by the university – not generated by the project – was due to the municipality. Nowhere did the main agreement specify that there could
not be only a single sponsor who hires all the municipality’s street poles. Nor did it specify that resultant advertising had
to be that of the sponsor in question.
[21]
It was therefore wrong to assume (they argued) that the main agreement obliged the university to contract only with sponsors who were
themselves ‘end users’ of advertising (and not sponsors on behalf of other business advertisers). All the adoption agreement
did was to commit the university to receiving a single hire charge from a single sponsor, calculated at the rate of 20% of what SPA
earned from letting the street poles to its advertisers. The municipality’s complaints about income were misconceived, since
the main agreement never promised it any minimum income. The municipality’s actual income from the project was therefore contractually
irrelevant.
[22]
This argument is beguiling. But it cannot prevail. It runs aground on the provisions of the agreement which envisaged that the university
would itself continue to be an active partner in its execution. Those provisions make plain that the university would have a continuing
role in the execution and furtherance of the project, and in securing sponsors and relaying income derived from them to the municipality.
[23]
The agreement locates the university’s power ‘to undertake’ the project in its private Act (clause 1.5) and expressly envisages that it ‘has developed and will from time to time continue developing’ ‘know-how’
to implement the programme (clause 1.6.1). In its main operative provision, clause 2.1, the parties agree that the university ‘will
undertake the project’ on the terms and conditions set out. It is true, as the appellants emphasised, that the agreement does
not expressly require the sponsors to number more than one (though plurals are used throughout in referring to ‘sponsors’
and ‘adoption agreements’); but the agreement incontestably provides for, and requires, the continuing participation
of the university itself.
[24]
To this end, clause 5, ‘Duties of [the university]’, records that the university ‘agrees and undertakes’ at
its cost ‘to carry out the project’, ‘to operate the project from its premises’, ‘to provide the manpower,
infrastructure, resources and other facilities necessary to fulfil its obligations’, ‘to endeavour to obtain sponsors
to adopt poles’ and ‘to use its best endeavours to collect all project income’.
[25]
Clause 10, ‘General Duties of [the university]’, continues in this vein. This provision requires the university to ensure
that its ‘representative and senior management devote sufficient time and attention to the project’, that ‘the
advertising content of sponsors is legal and conforms to the specifications from time to time’, and that ‘the conduct
of the programme [is] to the greatest benefit of the project’.
[26]
None of this is compatible with the adoption agreement, which grants SPA exclusive use of the poles (clause 2.2) for it to hire out
and to use, and vests in it the power ‘to do anything in relation to the advertisements and their display’ that is lawful
(clause 5.2), and permits SPA to enforce, in the university’s name but at SPA’s expense, ‘all or any of the rights’
accruing to the university under the main agreement (clause 8.1.3). Conversely, the agreement disbars the university from enforcing
‘any of the terms’ of the main agreement without SPA’s prior written consent (clause 8.1.4). The university is
required to permit SPA to represent the university ‘in all negotiations and discussions’ with the municipality (clause
8.1.6), and is prohibited from itself negotiating – or even discussing – the main agreement with the municipality ‘unless
requested to do so in writing’ by SPA (clause 8.1.7). The university could not agree to any amendment of the main agreement,
unless negotiated by SPA, nor waive ‘any of its rights’ under that agreement, without SPA’s prior written consent
(clause 8.1.9 and 8.1.10).
[27]
It is plain from these provisions that the adoption agreement entailed the university’s wholesale abdication from the role the
main agreement envisaged for it. In its stead, SPA obtained the rights, and undertook the duties, which previously fell to it. The
university retained certain limited rights and duties. It was still obliged to pay the municipality 90% of what it received from
SPA. And the agreement does not divest it of title to sue the municipality to perform its obligations (ie, to make the poles available
for hire to sponsors). For this reason, the adoption agreement did not in my view amount to a cession, since if the effect of a transaction
is not to divest the right-transferring party of its power to sue for what is owed to it, the transaction is not a cession. On this, I respectfully differ from the approach of Nicholson J, but not from his conclusion that the adoption agreement violated
the critical no-transfer provision of the main agreement, clause 23.5:
‘No party may cede any of its rights or delegate or assign or subcontract any of its obligations in terms of this agreement without
the prior written consent of the other parties. Provided that the [municipality] may subcontract any of its maintenance obligations
in terms of clause 4.1.3 [to keep the poles in good order and condition] without the consent of [the university].’
[28]
While there was no cession, the main agreement also prohibited the university from subcontracting ‘any of its obligations’
without prior written consent. The adoption agreement plainly farmed out the great bulk of the university’s obligations to
SPA, and with them its rights under the main agreement. That was a subcontracting. A subcontractor is one who agrees with the contractor
to perform any part of the work that the contractor previously agreed to perform for another; it is one who takes a portion of a
contract from the principal contractor (or from another subcontractor). The object of clause 23.5 was plainly to give the municipality a say in determining to whom the university could pass on any of these
rights and obligations. Yet the adoption agreement summarily subcontracted the greatest share of these.
[29]
In the absence of written consent, and there was none, the conclusion of the adoption agreement violated the main agreement. For similar
absence of writing, the defences of waiver and estoppel (sourced in the two years during which the municipality continued to implement
the project despite SPA’s overt involvement) were rightly not pressed much in argument before us. The representation the appellants
rely on to found the estoppel – the municipality’s conduct in representing that it consented to the conclusion of the
adoption agreement – runs aground on clause 23.5 itself, which to SPA’s knowledge required just such consent to be in
writing. In addition, the main agreement contains the usual only-in-writing waiver provision (clause 23.4), which puts paid to waiver.
[30]
The municipality was thus entitled to relief. Even though we were informed from the bar that it has not cancelled the main agreement
in reliance on the breach, none of the parties disputed that on the conclusion reached it was entitled to the declarator Nicholson
J granted, namely that the adoption agreement was not enforceable against it. Counsel for the municipality recorded that the municipality
regarded itself as bound, in removing illegal advertising, by a decision of the Full Court that requires it first to approach a court
in all situations save where the public interest requires immediate removal.
[31]
For these reasons, I conclude that Nicholson J was correct in his approach to the relief the respective parties sought. His costs
award was not vitiated by any demonstrable misdirection, and must also stand.
