THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 252/2022
In the matter between:
PUTCO (PTY) LTD                                                                       APPELLANT
and
CITY OF JOHANNESBURG
METROPOLITAN MUNICIPALITY                          FIRST RESPONDENT
THE SOUTH AFRICAN NATIONAL
TAXI COUNCIL                                                         SECOND RESPONDENT
ALEXANDRA, RANDBURG, MIDRAND,
SANDTON TAXI ASSOCIATION                              THIRD RESPONDENT
ALEXANDRA TAXI ASSOCIATION                    FOURTH RESPONDENT
IVORY PARK TAXI ASSOCIATION                         FIFTH RESPONDENT
MIDRAND TAXI ASSOCIATION                                 SIXTH RESPONDENT
RABIE RIDGE TAXI ASSOCIATION                 SEVENTH RESPONDENT
RANDBURG LOCAL AND LONG
DISTANCE TAXI ASSOCIATION                               EIGHTH RESPONDENT
MEC FOR ROADS AND TRANSPORT,
GAUTENG                                                                      NINTH RESPONDENT

Neutral citation: PUTCO (Pty) Ltd v City of Johannesburg Metropolitan
Municipality and Others (Case no 252/22) [2023] ZASCA 31
(30 March 2023)

Coram:
SALDULKER, SCHIPPERS, MBATHA and MOLEFE JJA
and UNTERHALTER AJA
Heard:

10 March 2023
Delivered:
30 March 2023
Summary:  Statutory interpretation – National Land Transport Act 5 of 2009
(NLTA) – negotiated contracts under s 41 – breakdown in negotiations – transport
operator seeking interdict to refer dispute to mediation or arbitration under s 46(2)
of the NLTA – inapplicable to disputes arising from negotiation of contracts
under s 41 – operator not establishing prima facie right – appeal dismissed.

________________________________________________________________
ORDER
________________________________________________________________
On appeal from: Gauteng Division of the High Court, Johannesburg (Mudau J
sitting as court of first instance):

The application to adduce further evidence is refused with costs, including
the costs of two counsel.
The appeal is dismissed with costs, including the costs of two counsel.

________________________________________________________________
JUDGMENT
________________________________________________________________
Schippers JA (Saldulker, Mbatha and Molefe JJA and Unterhalter AJA
concurring)

[1] The appellant, Putco (Pty) Ltd (Putco), operates a subsidised public bus
service in Gauteng, which it has done for decades. The first respondent, the City
of Johannesburg Metropolitan Municipality (the City), is a ‘planning authority’
as defined in the National Land Transportation Act 5 of 2009 (the NLTA).1 In
terms of s 40 of the NLTA, planning authorities are required to integrate public
transport services subject to contracts in their areas, as well as appropriate
uncontracted services, ‘into the larger public transport system in terms of relevant
integrated transport plans’. The second to eighth respondents are various taxi
associations. They did not participate in the proceedings in the court below, nor
in this appeal. The ninth respondent is the Member of the Executive Council
responsible for the Gauteng Department of Roads and Transport (the GDRT),
who abided the decision of the court below.

1 The NLTA defines ‘planning authority’ as meaning ‘a municipality in relation to its planning functions’.

[2] The main issue in this appeal, which is with the leave of this Court,
concerns the meaning and effect of ss 41 and 46 of the NLTA. Putco contends
that the dispute resolution mechanism (mediation or arbitration) in s 46(2) applies
to its dispute with the City regarding its market share of the integrated public
transport network (IPTN) being implemented by the City. The City’s case is that
the dispute arises from negotiations conducted under s 41 of the NLTA, to which
s 46 is inapplicable. More specifically, the City asserts that s 46(2) applies only
where a public transport operator has an existing contract, as defined in the now
repealed National Land Transport Transition Act 22 of 2000 (the Transition Act),
with the relevant contracting authority. Putco does not have such a contract with
the City.

[3] The basic facts are not contentious and may be briefly stated. The City has
developed an Integrated Public Transport Operational Plan aimed at combining
all existing modes of public transport (including bus and taxi routes) into a single
network. The well-known feature of the Plan is the Rea Vaya Rapid Bus System
(the Rea Vaya system), which is being implemented in phases on identified routes
within the Municipality of Johannesburg. In order to implement this system, the
City negotiated with bus and taxi operators, including Putco, whose routes were
‘affected’, ie those who were likely to lose passengers to the Rea Vaya system,
to remove or reduce their existing services. In return, those operators were offered
shares in bus operating companies which the City had incorporated to run the
newly integrated network.

[4] The City negotiated Phases 1A and 1B of the Rea Vaya system with
affected taxi and bus operators, which culminated in negotiated contracts under
s 41 of the NLTA. Putco became a 26% shareholder in the bus operating company
that was incorporated for, and that currently operates, Phase 1B of the Rea Vaya
system. Putco however submitted that its contract with the City in relation to

Phase 1B was concluded in terms of s 46 and not s 41 of the NLTA. I return to
this aspect below. Phase 1A commenced in 2010 and Phase 1B in 2013.

[5] This case concerns Phase 1C(a), a component of Phase 1C, which covers
an area from the Johannesburg central business district to Sandton, known as the
North East Quadrant (NEQ). Implementation of Phase 1C(a) of the Rea Vaya
system will affect the current services provided by Putco between Soweto and the
greater Sandton area. Putco renders these services in terms of an Interim Contract
48/97, concluded on 26 March 1997 between the GDRT and Putco under the
Transition Act (and amended on 6 August 1997 and 7 December 2007).

[6] On 19 September 2017 the City, various taxi associations, Putco and
another bus operating company, JR Choeu Express and Coaches (JR Choeu),
entered into a Negotiation Framework Agreement in respect of the North East
Quadrant Integrated Project (the NFA). The role of the NFA, essentially, is to
facilitate negotiations between the parties in the restructuring of public transport
services in the NEQ, by establishing rules and a framework for the various phases
of the negotiations. The NFA records that the parties had agreed to develop and
implement an integrated operational plan, which includes entering into negotiated
contracts as envisaged in s 41 of the NLTA; and that the negotiated contracts to
be concluded between the City and affected operators should be achieved through
a structured and time-bound negotiation process, based on defined principles. The
NFA contains specific dispute resolution procedures aimed at the final resolution
of disputes between the parties. These include the appointment of independent
facilitators to execute dispute resolution mechanisms.2

2 Clause 14 of the negotiation framework agreement provides:
‘DISPUTE RESOLUTION
14.1
In the event that the Parties are unable to reach agreement within a reasonable time, the Independent
Facilitators will be requested to propose and execute a dispute resolution mechanism which can involve further
internal or external mediation or facilitation and/or non-binding expert determination;
14.2
A dispute should be declared only after the Parties have extensively canvassed an issue and exhausted
their own efforts. The Independent Facilitators should make a determination in this regard.
14.3
Facilitators may propose that the Core Group becomes involved;

[7] For several years, Putco and the City negotiated how many shares Putco
should have in the operating companies formed by the City to run each phase of
the Rea Vaya system. Negotiations in relation to Phase 1C(a) broke down after
the City would not budge from its offer to Putco of a 0.27% shareholding in the
new bus operating company. Putco claimed that there was no agreement between
it and the City on the ‘affectedness criteria’ to be applied to Phase 1C, and that
the criteria used to conclude agreements between the City and minibus taxi
operators could not be applied to Putco. The City however contended that all the
parties, including Putco, had agreed upon a data collection and analysis exercise,
the results of which were used to determine the extent to which an operator was
affected by the Rea Vaya system; and that a report of a study conducted on behalf
of the City showed that Putco was affected to a very limited extent. JR Choeu
agreed with the study and its outcome, and withdrew from the process. The City
also asserted that negotiations were held openly with the taxi industry, and that
Putco refused to accept the outcome of negotiations because it was not what Putco
had expected.

[8] Thus, the central dispute between Putco and the City in the negotiation of
the contracts under s 41 of the NLTA regarding Phase 1C(a), related to the
affectedness criteria. The City appointed a facilitator to help resolve the dispute.
However, there were delays that frustrated its resolution. Consequently, on
27 October 2020 Putco instituted proceedings in the Gauteng Division of the High
Court, Johannesburg (the high court), to bring the dispute resolution process to
finality by convening a meeting of the Core Group, contemplated in the dispute
resolution procedures in the NFA. Subsequently, a meeting of the Core Group
was convened and it was agreed that the dispute be resolved through arbitration,
subject to agreement on the terms of reference and the identity of the arbitrator.

14.4
In the event that the Core Group, including Elders becomes involved, clear terms of reference of the role
should be proposed by the Independent Facilitators. . . .
14.5
In the event that the above does not succeed, the Parties will revert to their principals for a further mandate
in respect of the matter which had led to deadlock or a further dispute resolution process which could be binding.’

[9] However, Putco and the City could not agree on the terms of reference of
the arbitrator and the dispute remained unresolved. On 30 June 2021 Putco
launched an application in the high court, essentially for an order interdicting the
City from incorporating a bus operating company or another corporate entity for
the purposes of Phase 1C(a) of the Rea Vaya system; and from negotiating,
concluding or implementing an agreement with any of the second to eighth
respondents, regarding their shareholding in such bus operating company or
corporate entity. The interdict was sought pending the final outcome of a dispute
resolution process between Putco and the City under s 46(2) of the NLTA,
including mediation under regulation 7 of the National Land Transport
Regulations on Contracting for Public Transport Services, 2009 (the
Regulations),3 and failing mediation, referral to an appropriate court for
settlement of the dispute.

[10] The high court (Mudau J) dismissed Putco’s application for an interdict, on
the basis that it had not established a prima facie right. The court held that the
question whether s 41 or s 46 of the NLTA applied to the negotiations between
the parties had been settled in Golden Arrow Bus Services (Pty) Ltd v City of Cape
Town and Others,4 in which this Court held that the two provisions deal with
entirely different situations. Section 46 governs ‘[e]xisting contracting
arrangements’ (although it does make provision for the inclusion of an operator
in an existing contract) and does not apply to contracts that have yet to be
concluded. By contrast, s 41 applies to ‘negotiated contracts’ and makes no
provision for disputes that may arise out of s 41 negotiations to be referred to
mediation or arbitration.5

3 The regulations are published under GN R877 in GG 32535, 31 August 2009.
4 Golden Arrow Bus Services (Pty) Ltd v City of Cape Town and Others [2013] ZASCA 154; [2014] 1 All SA 627
(SCA) (Golden Arrow Bus Services).
5 Ibid paras 11 and 14.

[11]  Before considering the parties’ submissions on this issue, it is necessary
to deal with Putco’s application under s 19(b) of the Superior Courts Act 10 of
2013, to adduce further evidence on appeal. The evidence sought to be adduced
comprises an Inter-Governmental Authorisation Agreement concluded between
the City and the GDRT in February 2018 (the intergovernmental agreement). The
stated purpose of the intergovernmental agreement is to provide efficient and
continuous public transport services, which the parties acknowledge is the
responsibility of government. The parties undertake to achieve that purpose, inter
alia, by the GDRT assisting and supporting the City in building its capacity to
manage subsidised service contracts; establishing an agreed framework for co-
operation and co-ordination between the parties; and ensuring that the parties
exercise their powers and perform their functions in a manner that does not
encroach on each other’s functional and institutional integrity.

[12] Putco’s basic contention is that the obligations imposed on the GDRT and
the City by the intergovernmental agreement demonstrates that s 46 of the NLTA
applies to its extant interim contract, even though that contract was concluded
with the GDRT and not the City. Then it is said that the intergovernmental
agreement puts paid to the City’s argument that it is not a party to Interim
Contract 48/97 and therefore is not bound by the provisions of s 46(2).

[13]  The City opposes the application to adduce further evidence on two
grounds. First, Putco has not met the requirements for adducing further evidence
on appeal, as the intergovernmental agreement is irrelevant. Second, the appeal
has become moot: more correctly, an interdict is not granted for a past invasion
of rights.6 After the high court dismissed Putco’s application, the City concluded

6 Philip Morris Inc and Another v Marlboro Shirt Co SA Ltd and Another [1991] 2 All SA 177 (A) at 187; Stauffer
Chemicals Chemical Products Division of Chesebrough-Ponds (Pty) Ltd v Monsanto Company [1988] 3 All SA
279 (T) at 283.

contracts with the second to eighth respondents in respect of Phase 1C(a) of the
Rea Vaya System. Consequently, the interdict sought would serve no purpose.

[14] The principles governing the powers of an appellate court to receive further
evidence are well-settled. Further evidence on appeal is allowed only in special
circumstances because it is in the public interest that there should be finality to a
trial or application.7 The basic requirements are that there must be some
reasonably sufficient explanation why the evidence sought to be adduced was not
presented at the trial; there should be a prima facie likelihood of the truth of the
evidence; and the evidence should be materially relevant to the outcome of the
proceedings.8

[15] The intergovernmental agreement is irrelevant to the main issue in this
appeal. This is fundamentally because the proper construction of ss 41 and 46 of
the NLTA is a matter of law and not fact, and cannot be based on evidence.9 This
was rightly conceded by counsel for Putco, but then it was submitted that the
intergovernmental agreement was reflective of the intention of the legislature.
The submission is untenable and no more need be said about it.

[16] Further, the argument that the intergovernmental agreement demonstrates
that the City is bound by Interim Contract 48/97, despite not being a party to that
contract, is unsound. The interim contract envisaged in s 46(1) and (2) is one ‘as
defined in the Transition Act’. That Act defined an ‘interim contract’ as,
‘a contract, not being a current tendered contract, for the operation of a subsidised scheduled
service, the term of which expires after the date of the commencement of this Act, and which-

7 Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC)
para 41, following Colman v Dunbar 1933 AD 141 at 161-3.
8 See Van Loggerenberg Erasmus Superior Court Practice at A2-70–A2-72B and the authorities collected in fn 7.
9 KPMG Chartered Accountants (SA) v Securefin Ltd and Another [2009] ZASCA 7; 2009 (4) SA 399 (SCA)
para 39.

(a) was concluded before that date between the province and the Department on the one hand,
and the public transport operator who is to operate that service, on the other hand, and is still
binding between them or only binding between the province and that operator; or
(b) is binding between that public transport operator and any transport authority or a core city
or a municipality, due to the assignment to it, after the date of commencement of this Act, of
the rights and obligations of the province under the contract contemplated in paragraph (a).’
There is no evidence on the papers that the Gauteng Province has assigned Interim
Contract 48/97 to the City, and the intergovernmental agreement contains no such
assignment. It follows that Interim Contract 48/97 is one between the GDRT and
Putco, as envisaged in s 46(1) of the NLTA. The intergovernmental agreement
cannot, and does not, change the statutory position.

[17] The high court thus rightly held that the provisions of s 46 are inapplicable
in this case because Interim Contract 48/97 is between the GDRT and Putco, not
between the City and Putco. Thus, the submissions on behalf of Putco that the
absence of a contract between it and the City ‘is no obstacle to the applicability
of section 46’; and that ‘section 46 by design, superimposes itself onto, and
disrupts, existing contractual relationships’, are incorrect.

[18] The application to adduce further evidence on appeal must accordingly be
refused. By reason of the conclusion to which I have come, it is unnecessary to
consider the remaining ground of opposition to that application: the issue of
mootness. In any event, the City has not tendered any evidence concerning the
contracts allegedly concluded with transport operators after the interdict was
refused, or the current status of Phase 1C(a) of the Rea Vaya System, in order for
this Court to determine whether an interdict would no longer serve any purpose.

[19] I return to the main issue – the proper construction of ss 41 and 46 of the
NLTA. These provisions read in relevant part:
‘41 Negotiated contracts

(1) Contracting authorities may enter into negotiated contracts with operators in their areas,
once only, with a view to-
(a)   integrating services forming part of integrated public transport networks in terms of their
integrated transport plans;
(b)   promoting the economic empowerment of small business or of persons previously
disadvantaged by unfair discrimination; or
(c)   facilitating the restructuring of a parastatal or municipal transport operator to discourage
monopolies.
(2) The negotiations envisaged by subsections (1) and (2) must where appropriate include
operators in the area subject to interim contracts, subsidised service contracts, commercial
service contracts, existing negotiated contracts and operators of unscheduled services and non-
contracted services.
(3) A negotiated contract contemplated in subsection (1) or (2) shall be for a period of not
longer than 12 years.
(4) The contracts contemplated in subsection (1) shall not preclude a contracting authority from
inviting tenders for services forming part of the relevant network.
(5) Contracting authorities must take appropriate steps on a timeous basis before expiry of such
negotiated contract to ensure that the services are put out to tender in terms of section 42 in
such a way as to ensure unbroken service delivery to passengers.
. . .
46 Existing contracting arrangements
(1) Where there is an existing interim contract, current tendered contract or negotiated contract
as defined in the Transition Act in the area of the relevant contracting authority, that authority
may-
(a)   allow the contract to run its course; or
(b)   negotiate with the operator to amend the contract to provide for inclusion of the operator
in an integrated public transport network; or
(c)   make a reasonable offer to the operator of alternative services, or of a monetary settlement,
which offer must bear relation to the value of the unexpired portion of the contract, if any.
(2) If the parties cannot agree on amendment of the contract or on inclusion of the operator in
such a network, or the operator fails or refuses to accept such an offer, the matter must be
referred to mediation or arbitration in the prescribed manner to resolve the issue.
(3) The Minister may make regulations providing for the transition of existing contracting
arrangements and the transfer of the contracting function in terms of this section or section 41,

including the transfer or amendment of existing permits or operating licences to give effect to
its provisions in the case of an assignment under section 11(2).
. . .’

[20] These provisions make it plain that there is a clear distinction between
contracts entered into in terms of s 41, and ‘existing contracting arrangements’ to
which s 46 applies. The NLTA assigns the responsibility for the conclusion of
s 41 contracts to the municipal sphere of government. Section 11(1)(c) of the
NLTA provides:
‘The municipal sphere of government is responsible for –
. . .
(xxvi) concluding subsidised service contracts, commercial service contracts, and negotiated
contracts contemplated in section 41(1) with operators for services within their areas;’.

[21] The purposes of negotiated contracts are set out in s 41(1)(a), (b) and (c),
which include integrating services forming part of an IPTN in terms of a
municipality’s integrated transport plan, and discouraging monopolies. These are
entirely new contracts negotiated in terms of the NLTA. The contracting
authority, the City, is obliged under s 41(2) to negotiate – not to reach an
agreement with an operator who has an interim contract. None of the operators
with whom the City negotiates under s 41 has any pre-existing right to render a
public transport service when it embarks on negotiations. As this Court has said,
s 41 ‘facilitates the quick implementation of the transport system within a
municipality’.10 This interpretation is buttressed by the immediate context:
s 41(4) provides that the power to conclude negotiated contracts under s 41(1)
shall not preclude a municipality from inviting tenders for the relevant services.

[22] Section 46 on the other hand, deals with contracts concluded before the
commencement of the NLTA and regulates existing rights.11 Its purpose is to

10 Golden Arrow Bus Services fn 4 para 11.
11 Ibid paras 11 and 13.

ensure that existing contracts do not stand in the way of the conclusion and
implementation of new contracts under the NLTA.

[23] Flowing from the different situations to which ss 41 and 46 apply, there are
two kinds of negotiations envisaged by the NLTA: (i) those which precede the
conclusion of s 41 contracts; and (ii) negotiations that take place in terms of
s 46(1)(b) to amend existing interim contracts. The negotiations under s 41 are
aimed at the conclusion of once-off contracts for a maximum period of 12 years,
and obviate the need for the contracting authority (a municipality) to tender for
public transport services.12 Given its purposes, s 41 makes no provision for
disputes that may arise out of s 41 negotiations to be referred to mediation or
arbitration, and for good reason. As is evidenced by the NFA, these negotiations
are technical, complex, and involve existing competitors (minibus taxi operators
and bus operators), all with competing interests. The potential for disputes is
manifest. In this case the City and transport operators have been engaged in
protracted negotiations for several years – since 2017.

[24] If Putco, or any negotiating party, could declare a dispute and demand its
resolution by mediation or arbitration, the City could become bogged down in
endless mediation and arbitration proceedings, and it would be impossible to
reach timely s 41 contracts. This, in turn, would prevent the City from carrying
out its duties under s 40 of the NLTA, which enjoins planning authorities ‘as soon
as possible . . . to integrate services subject to contracts in their areas’, after the
commencement of the NTLA – 8 December 2009.13  So too, since s 41 concerns
the negotiation of new contracts, there can be no disputes to resolve in respect of
existing rights. There is simply a process to negotiate new contracts which will
either result in agreement or fail in that endeavour.

12 Ibid para 11.
13 Golden Arrow Bus Services (Pty) Ltd v City of Cape Town 2013 JDR 0828 (WCC) para 27.

[25] Section 46(2) of the NLTA, by contrast, mandates the settlement of
disputes by mediation and arbitration where, for example, negotiations for the
amendment of an existing interim contract as envisaged in s 46(1) have failed.
Section 46(1) grants a contracting authority (in this case, the GDRT) three
alternative options to deal with the difficulties created by an existing interim
contract, when an IPTN is introduced by way of a section 41 contract. The
authority may (a) allow the contract to run its course; (b) negotiate an amendment
of the contract with the operator to provide for its inclusion in an IPTN; or (c)
make a reasonable offer of alternative services or a monetary settlement to the
operator. The authority has a discretion as to which option to exercise.

[26] Negotiations to amend an existing interim contract under s 46(1)(b) of the
NLTA must be conducted by the parties to that contract: after all, only they can
‘agree on the amendment of the contract’ contemplated in s 46(2). However,
counsel for Putco submitted that the City is bound by the provisions of s 46(2),
for the following reasons. Putco’s existing interim contract is ‘in the area of the
relevant contracting authority’, ie the City, within the meaning of s 46(1). The
negotiations and the contract which resulted in Putco’s contract for Phase 1B of
the Rea Vaya system were done in terms of s 46, as it is the holder of an existing
interim contract. The City’s offer to Putco of a 0.27% shareholding in a new bus
operating company, constitutes inclusion in an IPTN under s 46(1)(b); or an offer
of a monetary settlement as envisaged in s 46(1)(c) of the NLTA.

[27] These submissions are unsustainable for three reasons. First, they are
insupportable on the facts. The NFA makes it clear that negotiations were
conducted with the view to the conclusion of s 41 contracts. Putco itself invoked
the dispute resolution procedures of the NFA. Moreover, the answering affidavit
states that Phases 1A and 1B of the Rea Vaya System were concluded through
negotiated contracts in terms of s 41. This was not disputed by Putco, save for a
contention that s 41 and s 46 ‘are not mutually exclusive’. The offer to Putco of

a 0.27% shareholding in a new bus operating company is an offer to enter into a
negotiated contract under s 41(1) of the NLTA, pursuant to the negotiations
envisaged in s 41(2).

[28] Second, s 46 of the NLTA does not grant a municipality any power to
conclude a contract for a public transport service: that power is conferred by
s 11(1)(c)(xxvi), in terms of which a municipality may only enter into the
contracts specified in that provision. The principle of legality dictates that a body
exercising public power must act within the powers lawfully conferred on it.14
Putco’s submission that the City concludes negotiated contracts under s 41, with
operators who do not have existing interim contracts, but that it does so with
Putco in terms of s 46, is both illogical and at odds with the scheme of s 41 of the
NLTA.

[29] Third, as already stated, the authority vested with the power in s 46 cannot
be the municipality because that power is conferred on the entity which concluded
the existing contract; hence ‘that authority’ is given the three alternative options
to deal with an existing interim contract in s 46(1)(a)-(c). In addition, Putco’s
construction disregards the assignment of responsibilities to the three spheres of
government in s 11(1) of the NLTA. It states that the national sphere of
government is the acting authority for interim contracts concluded in terms of the
Transition Act; and that where a province is performing a function contemplated
in s 11(1)(a) on the date of commencement of the NLTA, it must continue to do
so unless the Minister of Transport has assigned that function to a municipality.15

14 Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Council [1998] ZACC 17; 1999 (1) SA 374
(CC) paras 56 and 58.
15 Section 11(1) of the NLTA provides:
‘(1) The responsibility of the three spheres of government are as follows:
(a) The national sphere of government is responsible for-
. . .
(xi) acting as contracting authority for subsidised service contracts, interim contracts, current tendered
contracts and negotiated contracts concluded in terms of the Transition Act;
. . .

[30] The dispute between Putco and the City relates to Phase 1C(a) of the Rea
Vaya System, which is regulated by a s 41 contract. It is not a dispute envisaged
in s 46(2) of the NLTA. Reading the dispute resolution mechanism in s 46(2) as
applying to negotiated contracts under s 41, disregards the different objects of
ss 41 and 46, and would impose a contract on parties who have not agreed to its
terms, which is inimical to the scheme of s 41 of the NLTA.16

[31] Putco’s argument that it is entitled to invoke the dispute resolution
mechanism in regulation 7 of the Regulations against the City to resolve the
dispute arising from negotiations relating to a s 41 contract, can be dealt with
shortly. As stated above, Interim Contract 48/97 is between Putco and the GDRT,
not the City, and s 46 of the NLTA does not apply to contracts negotiated under
s 41. That being so, Putco cannot invoke a regulation that gives effect to s 46(2),
as the basis for the grant of an interdict.

[32] In the result, the following order is issued:
The application to adduce further evidence is refused with costs, including
the costs of two counsel.
The appeal is dismissed with costs, including the costs of two counsel.

__________________
A SCHIPPERS
JUDGE OF APPEAL

(6) Subject to section 21, where a province is performing a function contemplated in subsection 1(a) on the date
of commencement of this Act, it must continue performing that function, unless that function is assigned to a
municipality by the Minister in terms of this Act.’
16 Golden Arrow Bus Services fn 4 para 26.

Appearances:

For appellant:

A E Franklin SC and J Mitchell
Instructed by:
Bowman Gilfillan Incorporated, Johannesburg

McIntyre Van der Post Incorporated, Bloemfontein

For first respondent:
V Notshe SC and AM Rakhutla
Instructed by:

Poswa Incorporated, Johannesburg

Poswa Incorporated, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
30 March 2023
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal
Putco (Pty) Ltd v City of Johannesburg Metropolitan Municipality and Others [2023]
ZASCA 31
The Supreme Court of Appeal (SCA) today dismissed an appeal against an order by the
Gauteng Division of the High Court, Johannesburg (the high court). The issue in the appeal
was the meaning and effect of ss 41 and 46 of the National Land Transport Act 5 of 2009
(NLTA).
The first respondent, the City of Johannesburg Metropolitan Municipality (the City), developed
an Integrated Public Transport Network Plan (IPTN), aimed at combining all existing modes
of public transport into a single network, known as the Rea Vaya Rapid Bus System (the Rea
Vaya system) which was implemented in phases on various routes within the City. Operators
whose services were affected, such as the appellant (Putco), were offered shares in bus
companies which the City had incorporated to run the newly integrated network.
The City negotiated Phases 1A and 1B of the Rea Vaya system with affected taxi and bus
operators, which culminated in negotiated contracts under s 41 of the NLTA. Putco became a
26% shareholder in the bus company operating Phase 1B. Negotiations between the City and
Putco regarding Phase 1C broke down when the City offered Putco a 0.27% shareholding in
the bus operating company established for those routes. Putco approached the high court for an
interdict restraining the City from incorporating any corporate entity for the purposes of Phase
1C of the Rea Vaya system or from concluding or implementing an agreement in that regard,
pending the final outcome of a dispute resolution process (mediation or arbitration) under
s 46(2) of the NLTA. The high court dismissed the application for an interdict on the basis that
Putco failed to prove a prima facie right: s 46(2) did not apply to the dispute.

On appeal, Putco asserted that the contract for Phase 1C of the Rea Vaya system is entered into
in terms of s 46 and not s 41 of the NLTA; that the City was the contracting authority
contemplated in its interim transport contract concluded with the Gauteng Department of Roads
and Transport; and that the dispute resolution process (mediation and arbitration) envisaged in
s 46(2) applied to its dispute with the City. The SCA held that the high court was correct in
holding that s 41 and not s 46 applied to the dispute. Section 46 governs existing contractual
relationships and does not apply to contracts that are negotiated under s 41 of the NLTA. The
City has no power to enter into transport contracts under s 46; that power is conferred by s 41.
Section 41 is aimed at conclusion of once-off contracts for a maximum period of 12 years, after
which the municipality has to invite tenders for public transport services. It makes no provision
for dispute resolution procedures. Section 46, on the other hand, provides for the settlement of
disputes concerning existing transport contracts through mediation or arbitration.
In the result, the SCA determined that the dispute between Putco and the City was regulated
by s 41 and not s 46, and dismissed the appeal.

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