THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case : 06/2007
REPORTABLE

In the appeal between:

STREET POLE ADS DURBAN (PTY) LTD
First appellant
UNIVERSITY OF KWAZULU-NATAL
Second appellant

and

ETHEKWINI MUNICIPALITY

Respondent

Before:
Howie P, Cameron JA, Mthiyane JA, Ponnan JA
and Mhlantla AJA
Heard:

Tuesday 4 March 2008
Judgment:
Friday 28 March 2008

Mandament van spolie – despoiled party seeking relief going wider
than despoiled property – respondent entitled to challenge title in
counter-application – Contract law – contract not permitting party to
‘subcontract any of its obligations’ – meaning of ‘subcontract’

Neutral
citation:
Street
Pole
Ads
Durban
v
Ethekwini
Municipality (06/07) [2008] ZASCA 33 (28 March 2008)

CAMERON JA:

[1] This is an appeal against an order Nicholson J granted in the High
Court in Durban in October 2006, confirming a spoliation order the
first appellant (SPA) earlier obtained against the respondent (the
municipality), but at the same time granting the municipality relief
it sought in a counter-application (which challenged the basis on
which SPA brought its application), and granting none of the
parties their costs.  The municipality joined the University of
KwaZulu-Natal (the university) as the second respondent to its
counter-application, and it is now the second appellant; both it and
SPA appeal with leave granted by Nicholson J.  For its part the
municipality does not challenge the confirmation of the spoliation
order granted against it, nor Nicholson J’s refusal to grant any
costs.

Background
[2] The proceedings have their origin in a contract the university
concluded with the municipality1 in May 1999 (‘the main

1 The predecessors of the current parties were then the Durban Transitional Metropolitan Council

agreement’), which launched the university’s ‘adopt a light/adopt a
pole’
fundraising
project.

The
agreement
secured
the
municipality’s consent and cooperation for public sponsors to
‘adopt’ electricity poles and street lights for advertising on them.
The university undertook to obtain sponsors, and to pay the
municipality a quarterly royalty of 90% of the gross income
received by the project.  Of this royalty, the municipality was to
spend no more than 40% on maintenance, repairs and cost of
power supply, 2% to clear graffiti, and 58% on community
development projects (mainly street lighting and electrification).
[3] The main agreement was to last for five years, plus automatic
renewal for three further five-year periods, subject to written
notice otherwise.  The agreement envisaged that the university
would conclude ‘adoption agreements’.  Should notice of
termination be given, the main agreement would continue in force
for purposes of these sub-agreements.
[4] When the main agreement was concluded in 1999, the
university’s Centre for Innovation and Business Germination was
steering the ‘adopt a light’ project, together with one Willem

and the University of Natal; but their changes in form and title have no bearing on the

Vermaak (who was named in the agreement as the university’s
representative).  But the university parted ways with Vermaak,
and from early 2002, to the knowledge of at least some municipal
officials, SPA became involved in the operation; and from 1
September 2002, SPA took over the management of the project.
[5] In November 2002, municipal officials dealing with the project
expressed concern about resultant changes in the apportionment
of gross income.  But on 4 February 2003 the university
formalised its new arrangement with SPA in an agreement (the
adoption agreement).  Under this agreement, SPA hired
exclusively from the university the use of all poles and street
lamps which were the subject of the main agreement.  In return,
SPA agreed to pay the university 20% of ‘gross monthly turnover’.
This the agreement defined as the total amount received by SPA
from the display of advertisements, temporary event posters,
community or charitable messages on the municipality’s poles.
The agreement stipulated that the amounts ‘(if any)’ which SPA
charged for the display of advertisements would ‘always be in the
sole discretion’ of SPA.  The agreement was effective from 1

proceedings.

September 2002 to 30 August 2005, with a three-year renewal
option (which SPA later exercised).
[6] The university became aware soon afterwards that the
municipality was ‘apparently annoyed’ that it had ‘sub-contracted’
the administration of the project to SPA without the municipality’s
consent, but for the next eighteen months SPA continued to
conclude ‘sub-adoption’ agreements for its clients to use the
advertising space the municipality’s poles provided.  It paid the
university 20% of its gross turnover; the university in turn retained
10% of what it received, paying the remaining 90% to the
municipality.
[7] In March 2004, the municipality gave the university notice of
termination of the main agreement, but the university and SPA
maintained that the adoption agreement, as renewed by SPA,
continued in force until August 2008.  The dispute escalated into
this litigation.

This litigation: judgment of Nicholson J
[8] In November 2004, the municipality started removing SPA
advertising from its poles.  In response, SPA obtained interim

orders in the High Court in Durban prohibiting this, and requiring
the restoration of advertisements already removed.  The orders
SPA sought and obtained sourced its entitlement to place the
advertisements in the main agreement and the adoption
agreement.  The interim interdicts namely directed the
municipality (emphasis added) –
1.1 ‘to immediately desist from removing or causing to be removed street
pole advertisements owned by [SPA] and placed on various street poles in
the Ethekwini metropolitan area pursuant to the agreements forming
annexures A and B to these papers [ie, the main agreement and the adoption
agreement]’, and
1.2 ‘to forthwith restore to the street poles upon which they were [formerly]
placed,
those
advertisements
erected
by
[SPA]
pursuant
to
the
aforementioned agreements and which were removed by the [municipality] or
a third party under its direction on or about 12th, 13th and 14th November
2004’, and
1.3 ‘not to remove or otherwise interfere with the aforesaid advertisements
erected by [SPA] pursuant to the aforesaid agreements[s] pending the final
determination of an action to be instituted by [SPA] within 20 days of the
grant hereof for an order declaring the aforesaid agreements to be in full
force and effect and that the [municipality] is bound by the terms thereof’.

[9] When the municipality joined issue, it retaliated with a counter-
application for an order against SPA and the university that the
adoption agreement was unenforceable against it (or, if
enforceable, that SPA was not entitled to conclude ‘sub-adoption
agreements’ direct with advertisers, but, if so, had to apply to the
municipality each time, and was then obliged to pay the
municipality 90% of the gross income received).

[10] In an extensive judgment Nicholson J ruled essentially in the
municipality’s favour.  Though he concluded that SPA had
established its entitlement to a spoliation order (para 1.2 of its
prayers set out above), the rest of its application for relief (paras
1.1 and 1.3, which related to future conduct, and covered all
posters on municipal poles – not only those the municipality had
already taken down) required him to consider the merits of its
underlying possessory claim to the poles.
[11] This took Nicholson J directly to the validity of the adoption
agreement, and thence to the main agreement.  This he
interpreted with the aid of specimen adoption agreements which
the municipality attached to its affidavits.  These he regarded as
part of the background circumstances that explained the genesis
and purpose of the main agreement.  Those agreements reflected
individual sponsors adopting particular poles for specified time
periods, at specified amounts.  In the light of this, he concluded
that the adoption agreement fell foul of the prohibition on cession
in the main agreement.
[12] Nicholson J held that a ‘fair reading’ of the main agreement
showed that the poles were to be hired out to sponsors with 90%

of revenue accruing to the municipality and 10% to the university
– whereas the effect of the university’s agreement with SPA was
that 80% of revenue went to SPA, while the municipality and the
university split the remaining 20%.  This was ‘totally incongruous’
when the whole project and its objectives were considered.  It was
never contemplated that a sponsor would receive any money from
the project – only publicity (which would generate income).  The
main agreement further did not contemplate that an entity like
SPA would manage the contract on behalf of the university.
[13] Nicholson J rejected the defences of waiver and estoppel.
While no one had claimed that SPA could enforce the adoption
agreement directly against the municipality, these parties’ lack of
contractual nexus did not prevent the court from granting the
municipality relief against SPA, which was in the position of an
illegally occupying sub-tenant against whom a landlord was
entitled to obtain direct relief.

Form of proceedings – the municipality’s challenge to the
adoption agreement

[14] On appeal SPA urged that the high court should not have
engaged with the municipality’s counter-application.  SPA had
gone to court solely to seek spoliatory relief: the orders sought in
paragraphs 1.1 and 1.3 of its notice of motion constituted merely
adjunct relief necessary to restore SPA’s position.  It did not go
further and seek an order declaring it had a right of possession.
The references to the main agreement and the adoption
agreement in its prayers merely alluded to facts from which the
relief it claimed stemmed.  It was therefore not open to the
municipality to challenge the adoption agreement in these
proceedings.
[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.’2

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 …’3

[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.4  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

2 Stocks Housing (Cape) (Pty) Ltd v Chief Executive Director, Department of Education and
Culture Services 1996 (4) SA 231 (C) 244C-E, per Rose Innes J.
3 Minister of Agriculture and Agricultural Development v Segopolo 1992 (3) SA 967 (T) 971B, per
Goldstein J.
4 Contrast a case like Engler Earthworks (Pty) Ltd v Marais 1998 (2) SA 450 (SE) 457-458, where
the fact that the despoiled party sought for expressly limited purposes to assert title to the
despoiled property itself, in conjunction with the claim for spoliatory relief, was held insufficient to
allow the respondent to challenge the title by counter-application.

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 Act5 (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

5 University of Natal (Private) Act 7 of 1960, s 2 of which provides subject to the Act’s provisions

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

that the university is capable ‘of entering into all other contracts, and of doing or performing such

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

other acts and things as bodies corporate may by law do or perform’.

its power to sue for what is owed to it, the transaction is not a
cession.6  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).7  The object of clause 23.5 was
plainly to give the municipality a say in determining to whom the

6 See RH Christie, The Law of Contract in South Africa (5 ed, 2006), p 464, citing Purchase v De
Huizemark Alberton (Pty) Ltd 1994 (1) SA 281 (W) 285-286, per Mahomed J.

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

7 See William Statsky, West’s Legal Thesaurus/Dictionary (1985).

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.8
[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.
[32] The appeal is dismissed with costs, including the costs of two
counsel.

E CAMERON
JUDGE OF APPEAL

CONCUR:
HOWIE P
MTHIYANE JA
PONNAN JA
MHLANTLA AJA

8 African Billboard Advertising (Pty) Ltd v North and South Central Local Councils, Durban 2004
(3) SA 223 (N) 229C-D per Levinsohn J (Skweyiya and Swain JJ concurring).
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
Friday 28 March

Status:
Immediate

Please note that the media summary is intended for the benefit of
the media and does not form part of the judgment of the Supreme
Court of Appeal

Street Pole Ads Durban v Ethekwini Municipality (06/07) [2008]
ZASCA 33 (28 March 2008)

In a judgment delivered today, the Supreme Court of Appeal has
confirmed a judgment of the Durban High Court granting the
Ethekwini municipality an order that an agreement between the
first appellant, Street Pole Ads Durban, and the University of
KwaZulu-Natal (the second appellant) was not enforceable against
the municipality.

The legal battle had its genesis in an agreement between the
municipality and the university in May 1999, launching the
university’s ‘adopt a light’ fundraising initiative.  The parties agreed
that the municipality would make available street poles for the
university to hire out to ‘sponsors’.  The university would pay the
municipality a royalty of 90% of gross income received – and the
municipality agreed to devote the bulk of this to community
development projects.

At first the university’s Centre for Innovation and Business
Germination steered the project, but after difficulties in running it,
the university no longer regarded it as part of its ‘core business’.  It
therefore brought in Street Pole Ads, who in a second agreement
contracted with the university to obtain the exclusive use of all the
street poles covered in the first agreement.  Thereafter Streeet
Pole Ads, and not the university, would obtain ‘sponsors’
(advertisers) for the street poles, who would deal with it – and pay
it direct – rather than the university.

But under this agreement, Street Pole Ads paid the university only
20% of its gross turnover – though the university continued to pay
the municipality 90% of what it received.  The municipality
therefore received 90% of 20% of Street Pole Ads’s gross
turnover.

When the municipality objected to the second agreement in 2004,
it started removing Street Pole Ads’s material from its poles.  But in
November 2004, Street Pole Ads obtained an interim order from
the Durban High Court requiring that the municipality restore the
unilaterally removed advertisements.

The municipality now joined issue in the litigation, contending that
the second agreement was unenforceable against it.  In a
judgment by Cameron JA, with which the remaining members of
the court concurred, the SCA has substantially confirmed the
approach of the Durban High Court.  There was no technical or
procedural bar to the municipality raising the enforceability of the
second agreement.  And that agreement violated the ‘no
subcontracting’ prohibition the first agreement contained.  The first
agreement plainly envisaged that the university would have a
continuing role in the execution and furtherance of the ‘adopt a
light’ project – whereas the second agreement entailed the
university’s wholesale abdication from that role.

This the first agreement did not allow the university to do without
obtaining the express prior written consent of the municipality –
which was never done.

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