THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 1191/2018

In the matter between:
BEADICA 231 CC

APPLICANT

and

SALE’S HIRE CC

RESPONDENT

Neutral citation: Beadica 231 CC v Sale’s Hire CC (1191/2018) [2020]
ZASCA 76 (30 June 2020)
Coram:
PETSE DP, MBHA, MOKGOHLOA and NICHOLLS
JJA and GORVEN AJA
Heard:
This appeal was, by consent between the parties, disposed of
without an oral hearing in terms of s 19(a) of the Superior Courts Act 10 of
2013.
Delivered: This judgment was handed down electronically by circulation to
the parties’ legal representatives by email, publication on the Supreme Court

of Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be 09H45 on 30 June 2020

Summary: Practice and procedure – special leave to appeal – refusal by two
judges of the Supreme Court of Appeal (SCA) – s 17(2)(f) of the Superior
Courts Act 10 of 2013 – referral of order refusing special leave to court for
reconsideration and, if necessary, variation.
Appeal – application for special leave to appeal to the SCA – requirements for
grant thereof – test not satisfied by establishing existence of only reasonable
prospects of success but existence of special circumstances also required.
Contract – enforcement of – general rule that contracts enforceable unless
enforcement unconscionable or contrary to public policy.

ORDER

On appeal from: Western Cape Division of the High Court, Cape Town
(Ndita J, Baartman and Sher JJ concurring sitting as court of appeal):
The application for the reconsideration and, if necessary, variation of the order
of this Court, granted on 15 August 2018, dismissing applicant’s application
for special leave to appeal, is dismissed with costs.

JUDGMENT

Petse DP (Mbha, Mokgohloa nd Nicholls JJA and Gorven AJA
concurring)

[1] This is a hybrid application that raises two discrete issues of narrow
compass. It is brought pursuant to an order of this Court granted by Navsa AP
on 13 February 20191 under s 17(2)(d) and (f) of the Superior Courts Act, 10
of 2013 (the Act). The first application is for reconsideration and, if necessary,
variation of the decision of this Court in terms of which the applicant’s

1 The order is couched in these terms:
‘1. The decision of the court dated 15/08/2018 dismissing the applicant’s application for leave to appeal with
costs is referred to the court for reconsideration and, if necessary, variation.
2. The application for special leave to appeal is referred for oral argument in terms of s 17(2)(d) of the
Superior Courts Act 10 of 2013.
3. The parties must be prepared, if called upon to do so, to address the court on the merits.
4. For this purpose the applicant is to file 6 copies of the initial application for leave to appeal and six copies
of the application in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013, within one month of the date
of this order and thereafter, to comply with the rules of this Court relating to the conduct of appeals by
filing the record in terms of rule 8 within three months of this order and both parties are to comply with all
the remaining rules relating to the prosecution of an appeal.
5. If the applicant does not proceed with the application, the applicant is to pay the costs relating to the
application for leave to appeal.’

application for special leave2 to appeal was dismissed with costs. The second
part of the application is for special leave to appeal in terms of s 17(2)(d) of
the Act.

[2] As is usual in these types of applications, their consideration generally
requires for their determination, full argument as if the envisaged appeal itself
were being considered. To this end, the applicant was directed to file six
copies of its application and the record in terms of rule 8 of this Court’s Rules.
And the parties were forewarned that they must be prepared, if called upon to
do so, to address the court on the merits. Hence, in due course, six copies of
the application and record were filed as were the parties’ comprehensive heads
of argument in which the merits of the envisaged appeal were addressed.

[3] The substantive issues sought to be raised in the envisaged appeal are
two-fold. First, the principal issue is whether a party to a contract freely and
voluntarily entered into, can deny the other party to that contract its
entitlement to enforce contractual obligations freely and seriously undertaken
by the former on the ground that the latter, in asserting its contractual rights,
in truth seeks to achieve an illegitimate purpose. The subsidiary issue is
whether the well-entrenched Plascon-Evans3 principle was properly applied
by the Full Court of the Western Cape Division of the High Court (the Full
Court) in determining factual disputes in motion proceedings where final
relief is sought without recourse to the hearing of oral evidence in order to
decide where the probabilities lie.

2 This court’s order erroneously makes reference to ‘leave to appeal’ when what the applicant had applied
for was ‘special leave to appeal’.
3 Plascon-Evans Paints Ltd v Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A); [1984] 2 All SA 366 (A).

[4] As to the first issue, the applicant, Beadica 231 CC (Beadica), asserts
that in the context of the facts of this case the answer must be in the
affirmative. On this score, Beadica accepts that the terms of the contract upon
which the respondent, Sale’s Hire CC (Sales’ Hire), relies are, on the face
thereof, objectively reasonable and unobjectionable. Nevertheless, Beadica
contends that Sale’s Hire ought to have been denied relief by the Full Court
because what it sought to do was to compete unlawfully with it by
surreptitiously gaining access to Beadica’s ‘sensitive confidential
information’ under the guise of exercising the inspection rights that are
explicitly provided for in the parties’ agreement. This, says Beadica, is
contrary to public policy and inimical to the constitutional objective of
accomplishing economic transformation and empowerment of the previously
disadvantaged persons as a consequence of the racially discriminatory
practices of the past. Consequently, Beadica seeks special leave to appeal to
this Court so that this issue can be ventilated.

[5] The factual matrix against which these issues fall to be determined now
follows. Beadica is a close corporation that sells and lets tools and building
equipment. It conducts its business in Durbanville, Western Cape. Sale’s Hire
is similarly a close corporation whose sole member is Mr Shaun Sale. As the
name suggests, Sale’s Hire hires out building tools and equipment to builders
in Cape Town and its environs. Previously, Sale’s Hire operated some 20
outlets in various areas of Cape Town and environs. Apart from general staff,
it also employed managers at its stores. Mr Alistair Fisher, who at all times
material to this litigation, was Beadica’s sole member, was one of its
employees who rose through the ranks to become a manager at one of the
stores.

[6] In the course of time, Sale’s Hire decided to divest its interests in ten of
its stores which were thereafter operated by franchisees. The various
franchisees were part of a black empowerment scheme funded by the
National Empowerment Fund Trust4 (NEFT) which is a government initiative
aimed at economically empowering previously disadvantaged persons. The
NEFT receives its funding from the government. Mr Fisher is one of the
beneficiaries of the NEFT funding through Beadica.

[7] On 12 October 2011 the parties concluded a written franchise
agreement (the franchise agreement) in terms of which Beadica, as franchisee,
was granted by Sale’s Hire, as franchisor, a right to acquire and operate the
franchisor’s former store in Durbanville, Western Cape, subject to certain
terms and conditions that were fully spelt out in the franchise agreement. Of
particular relevance for present purposes were clauses 11, 14 and 15 of the
franchise agreement.

[8] Clause 11, in material parts, reads:
‘11.
SUPPLY
OF
GOODS
AND/OR
SERVICES,
BUSINESS
IMAGE
AND
OPERATING STANDANRDS
11.1
Whilst it is not possible to provide an exhaustive list of the goods and/or services the
Franchisee is entitled to provide, the Franchisee acknowledges that the goods and services
it is entitled to provide, pursuant to this Agreement, are only those goods and services
ordinarily provided in the course of operating a SALE’S HIRE Business and which are
approved by the Franchisor.
. . .
11.2.3 to maintain the condition and appearance of the Business and the Location in
accordance with the standards of the Franchisor and consistent with the image of a
SALE’S HIRE Business as a clean, sanitary, attractive and efficiently operated

4 The NEFT is registered with the Master of the High Court, Pretoria under the Trust Property Act 57 of 1988
and was established in terms of the National Empowerment Fund Act 105 of 1998.

Business offering high quality tools and equipment for hire and sale and courteous
and helpful service;
11.2.4 to effect such maintenance of the Business and the Location as is required by the
Franchisor from time to time to maintain such condition, appearance and efficient
operation, including without limitation:-
11.2.4.1 continuous and thorough cleaning of the interior and exterior of the
Business including the parking bays and yards;
11.2.4.2 interior and exterior repair of the Business;
11.2.4.3 maintenance of equipment; tools and vehicles at peak performance;
11.2.4.4 replacement of worn out or obsolete fixtures, furnishings, equipment,
tools and signs with approved fixtures, furnishings, equipment, tools and
signs, and;
11.2.4.5 periodic refurbishing, painting and decorating.

11.2.5 to upgrade the Business at reasonable intervals determined by the Franchisor to
reflect changes in the image, signage, design, format or operation of SALE’S HIRE
introduced by the Franchisor and required of SALE’S HIRE Franchisees subject to
approval of all construction, signage, repair or re-fixturing in connection with such
upgrading or remodelling, and;

11.2.6 to place or display at the Business (interior and exterior) only such signs, emblems,
lettering, logos, colour schemes and display only such advertising materials that are
from time to time approved in writing by the Franchisor.
. . .
11.7
The Franchisee shall offer all products approved by the Franchisor. If the Franchisee
desires to add items to be sold or hired at or by the Business, the prior written approval of
the Franchisor must first be obtained. The Franchisor requires such approval of new items
to assure itself that such items are of the type and quality approved for SALE’S HIRE
Businesses and are consistent with the image and format of SALE’S HIRE Businesses.
The Franchisee agrees not to, without prior written approval by the Franchisor, offer any
equipment, tools or other services or products that are not authorised by the Franchisor for
SALE’S HIRE Businesses. The Franchisee shall apply for any licences as required by law
to enable it to sell and hire the products from the Approved Location.
11.8
The Franchisee shall at all times maintain its stock at such levels as the Franchisor may
from time to time require.

11.9
All Products, except those contained on the Approved Supplier’s Schedule as described in
clause 11.10, must be purchased directly from the Franchisor at a price determined by the
franchisor from time to time in accordance with market-related indicators. The Franchisor
shall endeavour to provide the Franchisee with the Products requested however the
Franchisor does not warrant that it shall be able to supply the Franchisee with the products
as requested, nor that it shall be able to do so within a reasonable time period. In the event
that the Franchisor is unable to provide the Franchisee with the requested products within
a reasonable time period, the Franchisor shall attempt to facilitate the supply of such
product from an alternative supplier. The Franchisor shall not under any circumstances
become liable for the cost of any orders placed by the Franchisor on behalf of the
Franchisee and at the Franchisee’s instance and request and the Franchisee hereby assumes
liability to pay for any such Product purchases ordered on the Franchisee’s behalf and
indemnifies the Franchisor in this regard.
11.10 The Franchisor shall provide the Franchisee with an Approved Supplier Schedule which
Schedule shall contain a directory of Products together with the name and contact details
of the designated supplier from whom such Product must be purchased. The Franchisee
shall be obliged to purchase such Products from such designated supplier as recorded on
the Approved Supplier Schedule. In the event the designated supplier is unable to provide
the Product to the Franchisee on any occasion, the Franchisee shall be obliged to request
the Franchisor to source the supply of the Product from an alternate supplier. The
Franchisor is entitled to amend such Schedule at any time in the Franchisor’s discretion.
. . .
11.14 The Franchisor shall provide training to the Franchisee and its personnel which training
shall enable the Franchisee to maintain and effect minor repairs to the Franchisee’s tools
and equipment. The training provided by the Franchisor to the Franchisee shall not, in any
manner, constitute a warranty that the Franchisee’s personnel shall be competent to
properly and effectively carry out the required repairs and maintenance as such ability is
dependent on the individual skills of the Franchisee’s personnel. In the event the Franchisee
is unable to carry out the repairs and/or maintenance of its tools and equipment, the
Franchisee is obliged to request the Franchisor to assist with repair and maintenance.
Provided that the Franchisor is in a position to carry out the repair or maintenance required
by the Franchisee, the Franchisor is not obliged to effect any repairs or maintenance as
requested by the Franchisee. The Franchisee is prohibited from mandating or contracting

any third party to carry out the repairs or maintenance of the Franchisee’s tools or
equipment without the Franchisor’s prior written approval.
. . .
11.16 At the Franchisor’s sole discretion, and without prior warning, the Franchisee shall undergo
regular customer service evaluations and shall be required to pass such evaluation.
11.17 Mandatory specifications, standards and operating procedures may be prescribed from time
to time by the Franchisor in the Operating Manuals, or otherwise communicated to the
Franchisee verbally or in writing. All reference thereto in this Agreement shall include all
such mandatory specifications, standards and operating procedures.
11.18 The Franchisee shall purchase, install and use such telephone equipment electronic
communications and computer equipment, including hunting facilities for at least 4 (four)
hunting telephone lines, 1 (one) line for a facsimile machine, modems and computerised
cash registers, as the Franchisor may from time to time require. The Franchisee shall
purchase and use such computer software, including “mail order” software as the
Franchisor may from time to time require.
11.19 The Franchisee shall be liable for the cost of all computer software including licensing and
any technical support as may from time to time be supplied by the Franchisor which
software shall remain the Franchisor’s property, as shall the mailing lists and other data
recorded thereby, whether on CD, hard disks, tapes or in printed, photocopied or facsimile
or in any other format, which the Franchisee agrees to treat as confidential. The cost of
such software as payable by the Franchisee is not included in the royalty and service fees
payable under clause 9 above and the Franchisor shall invoice the Franchisee separately
for these amounts. The Franchisor shall, in its sole and unfettered discretion, determine
what software must be purchased by the Franchisee. The Franchisor and/or its authorised
agents shall be given access to all such data and shall be permitted to make copies thereof
for its own purposes. The Franchisee shall not use any such software for any other purpose,
nor shall Franchisee make or use copies thereof for any purpose except as backup copies
for security purposes. Copies of the Franchisee’s backup disks shall be delivered to the
Franchisor each month, by no later than the 7th (seventh) day of the following month.
. . .
11.21 The Franchisee shall secure and maintain in force in its name all required licences, permits
and certificates relating to the operation of the Business and shall, if so required by the
Franchisor, transmit copies of all such licences, certificates and permits to the Franchisor
within 10 (ten) days of their receipt by the Franchisee. The Franchisee shall operate the

Business in full compliance with all applicable laws, occupational hazards and health,
workmen’s compensation insurance, unemployment insurance and payment of taxes. All
marketing by the Franchisee shall be factual, ethical and in good taste in the judgment of
the Franchisor and shall be subject to the Franchisor’s prior written approval.
. . .’

[9] Clause 14, in turn, provides:
‘14.
ACCOUNTING REPORTS AND FINANCIAL STATEMENTS
14.1
The Franchisee shall at its own expense obtain and properly maintain a computer based
point-of-sale register approved by the Franchisor and will use the software specified and/or
provided by the Franchisor, to record all sales and provide accounting and such other
information as may be required by the Franchisor. The Franchisee shall establish and
maintain at its own expense a record-keeping system prescribed by the Franchisor from
time to time. The Franchisor shall provide the Franchisee with the prescribed software and
shall invoice the Franchisee for inter alia; the cost of the software; the licensing fees; any
installation services; technical support or guidance and training which may be provided by
the Franchisor, at the Franchisor’s discretion in order to ensure that the Business
continually complies with the mandatory accounting; reporting and operating standards
and procedures. With respect to the operation and financial situation of the Business, the
Franchisee shall, on a daily basis, facilitate, allow and ensure that the Franchisor is accessed
to upload all relevant trading information from the Franchisee’s computer system and
facilitate the Franchisor ascertaining stock levels and such financial and other information
as is required by the Franchisor from time to time, including but not limited to:
14.1.1 the Gross and Net Sales of the Business for the preceding calendar month and such
other information and supporting records as the Franchisor may from time to time
require in its sole discretion;
14.1.2 financial statements consisting of a balance sheet and a profit and loss statement
for the preceding calendar month and a year-to-date balance sheet and profit and
loss statement for the Business;
14.1.3 a balance sheet and an annual profit and loss statement reflecting all year-end
adjustments for the Business.
14.1.4 exact copies of all VAT returns and income tax returns that reflect the operation of
the Business;

14.1.5 access to any information on any computer system utilised in the operation of the
Business. In this regard the Franchisee undertakes to ensure that the Franchisor has
access to a data line which will allow the Franchisor access to the Franchisee’s
computer’s system at any time.
14.2
Each such report and financial statement shall be verified as a true and correct reflection
of the Franchisee’s trading activities and signed by the Franchisee (or the Franchisee’s
auditor, if so required by the Franchisor) in the manner prescribed by the Franchisor.
14.3
The Franchisee shall take physical stock on the last day of each month and a copy of each
stock sheet shall be transmitted to the Franchisor by e-mail. The final monthly stock figures
shall be used in preparing the financial statements referred to above.
14.4
In addition to the aforegoing financial reporting requirements the Franchisee shall be
obliged to properly, diligently and timeously complete in all respects, a Financial Report
in the form prescribed by the Franchisor, which form may be amended from time to time
in the Franchisor’s sole discretion. The financial Report, which must be delivered to the
Franchisor in the manner prescribed from time to time by no later than the 5th day of each
consecutive month, shall include the following minimum financial information:-
14.4.1 a calculated and itemised breakdown of the Business’s turnover for the
immediately preceding month;
14.4.2 a calculated and itemised breakdown of all the purchases of the Business for the
immediately preceding month and how such purchases were made, for example
cash or on credit and whether payment has been settled or remains outstanding;
14.4.3 copies of the Business’s bank statements for the immediately preceding month;
14.4.4 copies of the Business’s VAT returns.’

[10] Finally, clause 15 in material parts reads:
‘5.
REVIEWS, INSPECTIONS AND AUDITS
15.1
To determine whether the Franchisee is complying with the specifications, standards and
operating procedures prescribed the Franchisor for the operation of a SALE’S HIRE
Franchised Business, the Franchisor or its designated agents shall have the right at any
reasonable time and without prior notice to the Franchisee to:

15.1.1 inspect the Business and the stock to ensure that inter alia:-
15.1.1.1
all hire equipment and consumables are accounted for and there are no
losses due to theft or breakage;

15.1.1.2
ensure that all hire equipment is complete with all necessary accessories
and consumables;
15.1.1.3
ensure the technical soundness and quality of the hire equipment is
maintained;
15.1.1.4
ensure the Business is correctly stocked with hire equipment and that
such stock is correctly displayed;
15.1.1.5
ensure the signage is correctly displayed and maintained.
15.1.2 observe the Franchisee and any SALE’S HIRE managers and other employees of
the Franchisee;

15.1.3 interview SALE’S HIRE managers and other employees of the Business;

15.1.4 interview customers of the SALE’S HIRE Business; and

15.1.5 gain access to all records including those maintained by the computerised point-
of-sale or any other communications equipment.
The Franchisee shall present to its customers such Customer Evaluation forms as are
periodically prescribed by the Franchisor and shall participate in and/or request that its
customers participate in any marketing surveys performed by anyone on behalf of the
Franchisor.
15.2
The Franchisor shall have the right at any time during business hours, and without prior
notice to the Franchisee to inspect or cause to be inspected and audited, the stock of the
Business, the business records, bookkeeping and accounting records, sales and income tax
records of any company, close corporation, partnership or any other juristic or natural
person which holds any interest in or owns the Franchisee. The Franchisee shall fully co-
operate with representatives of the Franchisor and independent accountants hired by the
Franchisor to conduct any such inspection or audit. In the event that any such inspection
or audit shall disclose an understatement of the Sales of the Business, the Franchisee shall
immediately after receipt of the inspection or audit report, pay to the Franchisor any
royalties, marketing contributions or other fees due on the account of such understatement,
plus interest (at the rate and on the terms provided herein) from the date originally due until
the date of payment.
15.3
The stock audit carried out by the Franchisor will involve regular assessments of inter alia:-

15.3.1 recorded stock balance;

15.3.2 actual stock on hand;

15.3.3 the appearance, condition and quality of the stock
. . .

15.5
The Franchisor shall be entitled to carry out inspections any time during normal business
hours and without prior warning to the Franchisee. No warnings will be issued or penalties
incurred by the Franchisee during the first 3 (three) months after the Commencement Date.
15.6
In the event that such inspection or audit is made necessary by the failure of the Franchisee
to furnish reports, supporting records or other information timeously or at all, as herein
required, or if any understatement of Sales for the period of any audit is determined by any
such audit or inspection , the Franchisee shall reimburse the Franchisor for the costs of such
audit or inspection , including, but not limited to, any charges of any independent
accountants, and the travel expenses and room and board and compensation for the
expenses and costs (including salary) or any employee or agent of the Franchisor. The
foregoing remedies shall be in addition to and not in lieu of all other remedies and rights
of the Franchisor hereunder or under any applicable law.
. . .’

[11] I have, in the preceding three paragraphs, quoted clauses 11, 14 and 15
of the franchise agreement extensively, because they are particularly relevant
to the issues which arise for determination in this application. In sum, clauses
11, 14 and 15 of the franchise agreement, amongst other things, provide that:
(a) the franchisor shall have the sole right to determine the software that must
be purchased by the franchisee at the latter’s cost and used by the franchisee,
and allowing the franchisor free access to all data recorded therein; (b) the
franchisee, at own expense, must obtain and properly maintain a computer
based point-of-sales register approved by the franchisor to record all sales,
and provide the franchisor with accounting and related information as the
latter may require from time to time; (c) the franchisee, on a daily basis, must
facilitate, allow and ensure that the franchisor has access to upload all relevant
trading information from the franchisee’s computer system and facilitate the
franchisor ascertaining stock levels and such financial and other information
as required by it from time to time; (d) the franchisor has the right, at any
reasonable time and without prior notice to the franchisee, to: (i) inspect the

franchisee’s business and its stock to ensure, amongst others, that all hire
equipment and consumables are accounted for, complete and technically
sound, the business is correctly stocked with hire equipment that is correctly
displayed and signage is correctly displayed and maintained; (ii) observe and
interview the franchisee’s managers and employees and interview customers
of the franchisee’s business; (iii) gain access to all records, including those
maintained by the computerised point-of-sales or any other communications
equipment; (e) the franchisor has the right, at any time during business hours,
and without prior notice to the franchisee, to inspect or cause to be inspected
or audited, the stock of the business, business records, bookkeeping and
accounting records, sales and income tax records and returns, and other
records of the business; and (f) the franchisee must fully cooperate with the
franchisor’s representatives conducting inspections or audits. In short, the
purport of these clauses is that the franchisor has a right to exercise a close
control over important business related activities of the franchisee.

[12] As already indicated, Beadica’s acquisition of Sale’s Hire’s
Durbanville store was funded by the NEFT. In consequence, it presumably
became necessary for Sale’s Hire to enter into what the parties to that
agreement have described as a ‘co-operation agreement’ with the NEFT. In
essence, the co-operation agreement required of Sale’s Hire to: (a) ‘source,
screen and approve prospective BEE franchisees; (b) provide ongoing
business support and mentorship to selected franchisees; and (c) provide
training to the BEE franchisees on aspects of corporate governance’. In short,
it required Sale’s Hire, once funding had been approved by the NEFT, to
ensure that the business operations of the franchisees were run successfully
and in keeping with best practices of corporate governance.

[13] The services rendered by Sale’s Hire to its franchisees, and in particular
Beadica, were not out of charity. The franchise agreement explicitly provided
for ways and means whereby Sale’s Hire would be recompensed by way of
royalties and fees payable by the franchisees. Thus, the extensive inspection
rights accorded to Sale’s Hire in terms of the franchise agreement were
intended to ensure that: (a) the franchisees adhered to the business standards
and practices agreed upon; (b) they purchased their tools and equipment from
approved suppliers; and (c) importantly, the revenue generated from sales and
hire of tools and equipment was reasonably accurate for it was from these
figures that the amount of royalties and fees payable to Sale’s Hire would be
determined. Therefore, the accuracy of the revenue figures generated by the
franchisees was critical to the success of the ventures and the determination
of the amount representing royalties and fees payable to Sale’s Hire.

[14] Some two years later, and consistently thereafter until 2016, intractable
problems began to emerge as a result of what Sale’s Hire asserted were
persistent and unwarranted refusals by Beadica to allow it to exercise its
inspection rights and Beadica’s failure to comply with its obligations as
explicitly set out in clauses 11, 14 and 15 of the franchise agreement.
Consequently, a letter was addressed to Beadica on behalf of Sale’s Hire in
which it was pointed out, amongst other things, that Beadica was committing
several breaches of the terms of the franchise agreement. However, despite
Sale’s Hire’s appeal to Beadica to desist from the conduct of which it
complained, the breaches persisted.

[15] On 5 December 2014, a firm of attorneys acting on behalf of the NEFT
addressed a letter to Sale’s Hire at the instance of Beadica and other

franchisees, in which they raised various issues about what they alleged were
several respects in which Sale’s Hire had failed to comply with the terms of
both the co-operation agreement and the franchise agreement.

[16] As there appeared to be no prospect of the amicable resolution of the
ensuing impasse, Sale’s Hire wasted no time in instituting urgent motion
proceedings in the Western Cape Division of the High Court (the High Court).
The relief claimed against Beadica was for an order that:
‘1
. . .
2.1
That Applicant and/or its designated agent(s) shall have the right at any reasonable
time during business hours, and at 12 Marais Street, Durbanville (“the approved
location”) and without prior notice to Respondent to:

2.1.1 inspect the business of Respondent;

2.1.2 observe Respondent and any of its managers and/or employees;

2.1.3 interview Respondent’s managers and other employees;

2.1.4 interview customers of Respondent;
2.1.5 gain access to all records of Respondent including those maintained
by the computerised point-of-sale or any other communications equipment;
2.1.6 inspect or cause to be inspected and audited at the approved location its
business records, bookkeeping and accounting records, sale and income tax
records and returns, and other records of Respondent and the books and
records of any company, close corporation, partnership or any other juristic
or natural person which holds any interest in or owns Respondent.
2.2
That Respondent be ordered not to in any way refuse or obstruct such inspections,
observations, interviews, access and/or audits during such reasonable times in any
way whatsoever.
2.3
That Respondent be ordered to fully co-operate with applicant and/or its designated
agent(s) to conduct such inspections, observations, interviews, access and/or audits.

2.4
That Respondent be ordered to immediately re-establish and maintain at its own
expense the record-keeping system prescribed by the Applicant and to use
Applicant’s prescribed software;
2.5
That Respondent be ordered to immediately allow and ensure, on a daily basis,
facilitate, that Applicant has access to upload all relevant trading information from
the Respondent’s computer system and facilitate the Applicant ascertaining stock
levels and such financial and other information as required by the Applicant from
time to time;
. . .’

[17] Affidavits in support of the application and in opposition to it were
filed. Mr Sale deposed both to the founding and replying affidavits on behalf
of Sale’s Hire. After making reference to clauses 11, 14 and 15 of the franchise
agreement, Mr Sale asserted that:
‘6.
Despite demand, Respondent refuses to comply with the aforementioned terms of
the contract in that:
6.1
Respondent frustrated and continues to frustrate Applicant’s rights in terms
of clauses 15.1 and 15.2 of the agreement, by refusing and/or failing to enable
Applicant to conduct proper (if any) inspections, observations and audits, including
on the following dates:

26 August 2013; 30 June 2014; 18 March 2015; 5 June 2015; 15 June 2015;
13 May 2016.
6.2
Respondent was found to be in default of its obligations in terms of the
agreement upon inspections and audits held on 28 June and 13 September
2014, inter alia in that Respondent failed to:

6.2.1 correctly record the hire stock of the franchise;

6.2.2 keep updated records of deposits by customers;

6.2.3 separate hire stock machine parts from “ready-for-hire” machines

on the display floor;

6.2.4 separate defective machines from “ready-for-hire” machines

on the display floor;

6.2.5 record repairs effected to machines in the books of the franchise:

6.2.6 record missing equipment;

6.2.7 adequately address safety concerns of equipment;

6.2.8 display new products on offer;

6.2.9 keep stock on an adequate standard of appearance and maintenance.’

[18] On 20 July 2016, Mr Fisher deposed to Beadica’s answering affidavit.
Apart from contesting the issue of urgency and Sale’s Hire’s entitlement to
the relief sought, he pertinently asserted the following in regard to the merits
of the claim:
‘15.
In broad terms, the Respondent opposes this application on the basis that the
Applicant improperly seeks an order of court that would authorise the Applicant’s
exercise of the inspection, observation, interview, access and audit rights conferred
by the Franchise Agreement (the “inspection rights”) for a purpose not authorised
by the Franchise Agreement. In this regard, the inspection rights are conferred for
the purposes of enabling the Applicant to determine whether the Respondent is (a)
complying with the specifications, standards and operating procedures relating to
the franchised business; and (b) paying the correct royalties and fees payable under
the Franchise Agreement. This much is clear from clause 15.1 and the final sentence
of clause 15.2 of the Franchise Agreement. These provisions are discussed in
greater detail below.
16.
The Applicant has, however, routinely abused the inspection rights conferred by
the Franchise Agreement for the purpose of obtaining access to the Respondent’s
sensitive confidential business information (for example, client information, sales
figures and prices) in order to undercut the Respondent and to lure clients away
from the Respondent to the detriment of the Respondent’s business.’

[19] In addition, Mr Fisher accused Sale’s Hire of having committed
material breaches of the terms of the co-operation agreement. And that
Sale’s Hire had poached some of Beadica’s major clients in order to entice

them away as well as ‘inappropriately and unlawfully [using] confidential and
sensitive client information’ thereby making itself guilty of ‘anti-competitive
conduct designed to deliberately restrict or prevent the commercial viability
of [Beadica’s] business’.

[20] In due course, the matter was heard by Le Grange J (the High Court)
who dismissed the application with costs. In its judgment, the High Court
dealt with the facts and the defences raised by Beadica. Ultimately it came to
the conclusion that, first, there were material disputes of fact on the papers
and that absent a referral to oral evidence, Beadica’s ‘version that [Sale’s
Hire] is using its inspection and audit rights in the franchise agreement for
entirely different purposes as contemplated, cannot be rejected as false or
far-fetched’.

[21] As to the nature of the relief sought, which the High Court described as
one for an interdict, it restated the requirements that must be established by an
applicant before a court would grant an interdict. It spelled them out as: (a) a
clear right; (b) an injury committed or reasonably apprehended; and (c) the
absence of an alternative remedy.5 It then went on to conclude that:
‘On a conspectus of all the evidence, I am not convinced that it will be in the interest of
justice to grant the relief sought by the Applicant. The dispute resolution [mechanism] as
provided [for] by the co-operation agreement still exists and may equally benefit the
applicant’.
Nevertheless, the High Court rightly observed that Beadica, ‘in the present
instance, does not take issue with [Sale’s Hire’s] inspection and auditing
rights as stipulated in the franchise agreement.’ And that ‘[A]t the heart of the

5 See in this regard: Setlogelo v Setlogelo 1914 AD 221 at 227.

respondent’s case, is that in exercising these rights the applicant is utilising it
contrary to the principles and ethos that underpin the co-operation agreement
between the NEF Trust and the applicant. More importantly . . ., the applicant
had used its inspection and auditing rights in terms of the franchise agreement
to obtain confidential pricing structure and other client data to unlawfully
compete with the respondent.’ I fully endorse these observations. But more
about them later.

[22] Dissatisfied with the outcome in the High Court, Sale’s Hire sought and
was granted leave to appeal against the dismissal of its application to the
Full Court.

[23] Following upon its analysis of the facts presented before it, the
Full Court dealt first with the question whether there was an irresoluble
dispute of fact on the papers. After citing passages from judgments of this
Court in Plascon-Evans,6 National Director of Public Prosecutions7 and
Wright t/a J W Construction8 as authority for the proposition that
notwithstanding that there are disputes of fact on the papers before it, if a court
is satisfied that on the facts averred by the applicant and admitted by the
respondent, together with the facts alleged in the respondent’s affidavits, the
applicant is entitled to relief, whether in whole or part, it will grant relief
consistent with such finding.9 The Plascon-Evans rule was endorsed by the
Constitutional Court in Thint (Pty) Ltd v National Director of Public

6 Plascon-Evans Paints Ltd v Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A); [1984] 2 All SA 366 (A) at
634E-635C.
7 National Director of Public Prosecutions v Zuma 2009 [2009] ZASCA 1; (1) SACR 361 (SCA) para 26.
8 Wright t/a J W Construction v Headgear (Pty) Ltd and Another 2008 (3) SA 371 (SCA) para 13.
9 Compare: Burnkloof Caterers (Pty) Ltd v Horseshoe Caterers (Green Point) (Pty) Ltd 1976 (2) SA 930 (A)
at 938A-B.

Prosecution and Others; Zuma and Another v National Director of Public
Prosecution and Others [2008] ZACC 13; 2009 (1) SA 1 (CC); 2008 (12)
BCLR 1197 (CC) para 8. I do not find it necessary to elaborate on these
enduring legal principles, for sometimes, an over-elaboration upon an abiding
and well-entrenched principle tends to obscure rather than clarify matters.
Ultimately, the Full Court concluded that it was satisfied that ‘there was no
serious real dispute of fact’ and that ‘the version proffered by [Beadica] was
unsubstantiated and as such untenable’.10

[24] This then paved the way for the Full Court to delve into the merits of
the application. On this score, it proceeded to mention four issues that, in its
view, merited attention. These were: (a) whether Sale’s Hire had established
the requisites for an interdict; (b) the status of the co-operation agreement as
between Sale’s Hire and Beadica; (c) whether the enforcement of the franchise
agreement so far as Sale’s Hire’s inspection rights were concerned, and which
Beadica had admitted was objectively reasonable and unobjectionable, would
nevertheless be unconscionable or against public policy; and (d) whether the
decision of the Constitutional Court in Barkhuizen v Napier [2007] ZACC 5;
2007 (5) SA 323 (CC) availed Beadica.

[25] As to the requisites for an interdict, the Full Court held that these had
clearly been established. Apropos the status of the co-operation agreement, it
stated that it was a matter entirely between the NEFT and Sale’s Hire and that
it was not open to Beadica to enforce its terms as it had sought to do. In
relation to the contention that the franchise agreement was unconscionable

10 See para 48 of the Full Court judgment.

and contrary to public policy, the Full Court concluded that Beadica’s reliance
on the decision of the Constitutional Court in Bakhuizen11 was misplaced.

[26] In the result, the Full Court upheld the appeal with costs. In substitution
of the order of the High Court, the Full Court ordered that: ‘(a) the applicant’s
application for an interdict succeeds; (b) an interdict is . . . granted against the
respondent in the terms set out in paragraph 2 of the notice of motion . . . ’.

[27] It bears emphasising that the courts below rightly noted that Beadica
did not take issue with the inspection and auditing rights accorded to
Sale’s Hire by the franchise agreement. Indeed, in its answering affidavit
Beadica tellingly said the following:
‘I admit that I have frustrated . . . [Sale’s Hire] . . . from carrying out inspections, and have
switched [Beadica’s] IT systems to prevent [Sale’s Hire] from accessing [Beadica’s] client
information and sales data. . .[and] that I have done so lawfully, to prevent [Sale’s Hire]
from obtaining sensitive confidential information.’12
Moreover, Mr Fisher’s answering affidavit, filed on behalf of Beadica, is
replete with averments admitting that the franchise agreement accorded
Sale’s Hire certain inspection and auditing rights and that the latter ‘is
permitted to exercise its inspection rights’.13

[28] Disgruntled with the outcome of the appeal, Beadica applied to this
Court for special leave to appeal against the decision of the Full Court. That
application was dismissed with costs ‘on the grounds that the requirements for
special leave are not satisfied’. But it appears that Beadica was not deterred

11 See para 24 above.
12 See para 62 of A/A, Vol 1:119.
13 See para 17 of A/A, Vol 1:105.

by this setback in its determination to restore its initial success. It applied to
the President of this Court in terms of the proviso to s 17(2)(f) of the Act14 for
reconsideration of the order refusing it special leave and, if necessary, for its
variation. Pursuant thereto, the order referred to in para 1 above was granted.

[29] The application for reconsideration now confronting us therefore
pertinently raises the question whether special leave to this Court should have
been granted. Almost four decades ago, in Westinghouse Brake and
Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd 1986 (2) SA 555 (A), this
Court stated that ‘an applicant for special leave to appeal must show, in
addition to the ordinary requirement of reasonable prospects of success, that
there are special circumstances which merit a further appeal. . .’. And that it
alone is the final ‘. . . arbiter as to whether such special circumstances exist’.
It went on to give examples of what would constitute special circumstance.
These were: (a) the appeal raises a substantial point of law; (b) the matter is
of very great importance to the parties or of great public importance; and (c)
where the refusal of leave to appeal would probably result in a manifest denial
of justice.15 It must be stressed, however, that the list is by no means
exhaustive. The requirement for special leave now finds expression in s 16(b)
of the Act, which provides that ‘an appeal against any decision of a Division
on appeal to it, lies to the Supreme Court of Appeal upon special leave having
been granted by the Supreme Court of Appeal’. (Emphasis added.)

14 Section 17(2)(f) reads:
‘The decision of the majority of the judges considering an application referred to in paragraph (b), or the
decision of the court, as the case may be, to grant or refuse the application shall be final: Provided that the
President of the Supreme Court of Appeal may in exceptional circumstances, whether of his or her own
accord or on application filed within one month of the decision, refer the decision to the court for
reconsideration and, if necessary, variation.’
15 At 564H-565A-E.

[30] It is now timely to determine the fate of the application for
reconsideration. To this end an assessment of the merits of the envisaged
appeal is necessary.

[31] At the outset I deem it necessary to state what Sale’s Hire’s application
in the High Court was and still is all about. As is manifest from the factual
narrative recounted above, the essence of the relief sought by Sale’s Hire in
the High Court as encapsulated in prayer 2 of its notice of motion was that it
should be allowed to exercise its inspection and auditing rights without let or
hindrance. The genesis of prayer 2 is clauses 11, 14 and 15 of the franchise
agreement. In effect it sought an order of specific performance of the terms of
the franchise agreement that are encapsulated in these clauses. It was therefore
a misconception to characterise the nature of its prayers as one for an interdict.
Once this is appreciated, the crux of the dispute between the antagonists will
be discerned. This is the topic to which I now turn.

[32] What emerges from Beadica’s answering affidavit is that its discontent
with Sale’s Hire in large measure stems from its core complaint that the latter
is asserting its inspection and auditing rights as a ruse to inappropriately obtain
access to its sensitive confidential information in order to gain an edge over
Beadica as a business competitor. The edifice of its case that allowing
Sale’s Hire to enforce its rights for this purpose would be unconscionable and
contrary to public policy is built solely on this foundation.

[33] But before dealing with this complaint it is necessary to address two
matters that are central to this application. The first relates to the application
of the Plascon-Evans rule. The heads of argument filed on behalf of Beadica

advance propositions that fail to take proper account of Sale’s Hire’s version.
Such an approach is not consonant with that expressed in Plascon-Evans that,
in a case of the kind with which we are concerned, the court’s decision must
have due regard to the facts averred by the applicant which are admitted by
the respondent, together with the facts averred by the respondent.16

[34] The second aspect relates to the co-operation agreement upon which
Beadica heavily relies. It is this. As the Full Court rightly noted, the
co-operation agreement is between Sale’s Hire and the NEFT. Beadica is not
a party thereto. Accordingly, simple logic dictates that it cannot lie in
Beadica’s mouth to complain about breaches of the co-operation agreement,
if any, by Sale’s Hire, still less to seek to enforce its terms. Any contractual
rights and obligations flowing from the co-operation agreement are matters
between Sale’s Hire and the NEFT. In relation to Beadica, those rights and
obligations are res inter alios acta.17

[35] That the co-operation agreement may have been entered into in the
furtherance of the interests of the franchisees of which Beadica was one, as
some of its terms suggest, matters not. Even if it were to be accepted that
Sale’s Hire breached the co-operation agreement in a material way, it was only
the NEFT, and not third parties without a contractual nexus, like Beadica, that
would have had legal standing to enforce its terms.

16 Plascon-Evans at 634H-I.
17 Res inter alios acta is a common law doctrine which, inter alia, is to the effect that someone who is not a
party to a contract between others is not supposed to concern themselves with that contract. A free translation
thereof means: a matter between others is not our business.

[36] Reverting to the crux of the matter, I think that I would not be doing an
injustice to Beadica’s case by saying that when it is reduced to its bare
essentials it boils down to the following. It is accepted, for example, that: (a)
the franchise agreement accords Sale’s Hire extensive inspection rights as
detailed in paras 8-10 above; and (b) the terms embodying those rights are
objectively reasonable and not objectionable. Curiously, in the face of the
clear and unequivocal terms of clauses 11, 14 and 15, Beadica still obdurately
resisted every endeavour by Sale’s Hire to do precisely what Beadica accepts
it has a right to do.

[37] Beadica justifies its conduct on two bases. First, it relies on the
co-operation agreement to which, as already indicated, it is not a party.
Second, it contends that Sale’s Hire is abusing its inspection and auditing
rights in order to inappropriately and unlawfully undermine its business
operations. And therefore, asserts Beadica, Sale’s Hire’s objectionable
conduct is what renders the enforcement of the terms of the agreement against
it unconscionable and contrary to public policy.

[38] In pursuit of its application for reconsideration of the earlier order
refusing it special leave to appeal, Beadica submits that there are special
circumstances that justify a further appeal to this Court. In support of this
submission, it is contended that the envisaged appeal implicates a black
economic empowerment initiative which is an important policy objective
whose bedrock is the Constitution18 itself. And that the ‘effect of the Full
Court’s decision is to allow Sale’s Hire to enforce its contractual rights in a

18 The Constitution of the Republic of South Africa Act 108 of 1996.

manner which undermines the effective implementation of a BEE initiative
financed with public funds’ through the NEFT.

[39] As I see it, the logical point of departure must be the universally
accepted legal principle expressed in the maxim pactum sunt servanda. But
this is not to say that all obligations freely and seriously undertaken must be
given effect to no matter what. In Bredenkamp and Others v Standard Bank
of South Africa Ltd [2010] ZASCA 75; 2010 (4) SA 468 (SCA), Harms DP,
writing for a unanimous court, whilst acknowledging that the pactum sunt
servanda principle was not a holy cow, nevertheless stated that ‘it is a
self-evident principle’ of our law that contracts concluded contrary to laws or
public policy are of no force or effect. Before Bredenkamp, the Constitutional
Court had occasion to express itself emphatically on this, where the pactum
sunt servanda principle was described as ‘a profoundly moral principle, on
which the coherence of any society relies’.19 The Constitutional Court went
further and held that:
‘. . . Self-autonomy, or the ability to regulate one’s own affairs, even to one’s own
detriment, is the very essence of freedom and a vital part of dignity. The extent to which
the contract was freely and voluntarily concluded is clearly a vital factor as it will determine
the weight that should be afforded to the values of freedom and dignity. . . .’20

[40] But as already indicated, our courts will decline to enforce contracts
that are contrary to the law or public policy. And this is a power that courts
have exercised for more than a century. Thus, in Eastwood v Shepsthone 1902
TS 294, Innes CJ stated in his usual inimitable style that (at 302):

19 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC) para 87.
20 Barkhuizen para 57.

‘Now this Court has the power to treat as void and to refuse in any way to recognise
contracts and transactions, which are against public- policy or contrary to good morals. It
is a power not to be hastily or rashly exercised; but when once it is clear that any
arrangement is against public policy, the Court would be wanting in its duty if it hesitated
to declare such an arrangement void.’

[41] In Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (AD); [1989] 1 All SA 347
(A) Smallberger JA, writing for the majority, embraced the legal proposition
propounded by Innes CJ and said the following (at 9A-E):
‘No court should therefore shrink from the duty of declaring a contract contrary to public
policy when the occasion so demands. The power to declare contracts contrary to public
policy should, however, be exercised sparingly and only in the clearest of cases, lest
uncertainty as to the validity of contracts result from an arbitrary and indiscriminate use of
the power. One must be careful not to conclude that a contract is contrary to public policy
merely because its terms (or some of them) offend one's individual sense of propriety and
fairness. In the words of Lord Atkin in Fender v St John-Mildmay (1938) AC 1 at 12, “the
doctrine should only be invoked in clear cases in which the harm to the public is
substantially incontestable, and does not depend upon the idiosyncratic inferences of a
few judicial minds.”
. . .
In grappling with this often difficult problem it must be borne in mind that public policy
generally favours the utmost freedom of contract, and requires that commercial
transactions should not be unduly trammelled by restriction on that freedom.’

[42] The remarks of the Constitutional Court in Barkhuizen where it
endorsed the principle that everyone has a right to freely enter into contracts
bears repeating. There, Ngcobo J said (para 57):
‘Self-autonomy, or the ability to regulate one’s own affairs, even to one’s own detriment,
is the very essence of freedom and a vital part of dignity.’

Since the advent of our new constitutional order, public policy considerations
are now infused with the values underlying the Constitution.

[43] In A B and Another v Pridwin Preparatory School and Others [2018]
ZASCA 150; 2019 (1) SA 327 (SCA) para 27, upon which Beadica heavily
relies, this Court extracted six principles from various decision of our courts
in which the subject of private contracts and public policy was broached. Only
five of these principles bear relevance to this case. These are:
‘(i) Public policy demands that contracts freely and consciously entered into must be
honoured;
(ii) A court will declare invalid a contract that is prima facie inimical to a constitutional
value or principle, or otherwise contrary to public policy;
(iii) Where a contract is not prima facie contrary to public policy, but its enforcement in
particular circumstances is, a court will not enforce it;
(iv) The party who attacks the contract or its enforcement bears the onus to establish the
facts;
(v) A court will use the power to invalidate a contract or not to enforce it, sparingly, and
only in the clearest of cases in which harm to the public is substantially incontestable and
does not depend on the idiosyncratic inferences of a few judicial minds.’

[44] Although this Court’s judgment in Pridwin Preparatory School has
recently been overturned by the Constitutional Court,21 that Court
nevertheless endorsed the principles referred to in the preceding paragraph in
Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust
and Others CCT109/19 [2020] ZACC 13 (17 June 2020) and said that these
‘principles are derived from a long line of cases and find support in the
decisions of this Court’.22 The Constitutional Court went on to state that two

21 See in this regard: A B and Another v Pridwin Preparatory School and Others CCT294/18 [2020] ZACC
12 (17 June 2020).
22 Paragraph 82.

of the principles enumerated in Pridwin Preparatory School required further
elucidation. First, the Constitutional Court recognised that the principle of
pactum sunt servanda ‘continues to play a crucial role in the judicial control
of contracts through the instrument of public policy, as it gives expression to
central constitutional values’.23 What is important, the Constitutional Court
emphasised, is that the pactum sunt servanda principle ought not be elevated
above all else but has to be looked at through the prism of ‘a wide range of
constitutional values’.24 Thus, in short, the Constitutional Court has reiterated
that public policy considerations must be infused with constitutional values.

[45] The other principle qualified by the Constitutional Court is that of
‘perceptive restraint’ which proceeds from the premise that contracts freely
and voluntarily entered into should be honoured. Whilst acknowledging that
this is a sound approach to adopt, the Constitutional Court cautioned that
courts should be careful not to take this principle beyond its natural limits.
And that the principle of ‘perceptive restraint’ should not be invoked in a
manner that permits the enforcement of contracts ‘that undermine the very
goals that our Constitution is designed to achieve’.25

[46] There has been no suggestion in the papers that the franchise agreement
does not accord Sale’s Hire the rights it asserted in this litigation. On the
contrary, Sale’s Hire’s assertions have been unequivocally admitted. What the
thrust of Beadica’s case amounts to is that, in exercising its rights, Sale’s Hire
ventured into unlawful activities that are at variance with its rights under the
franchise agreement. Thus, the complaint here is that the relevant clauses

23 Para 83.
24 Paras 86-87.
25 Paras 88-90.

cannot be enforced because they are being used for unlawful purposes. The
issue before us is twofold: (a) is the unlawfulness established (in which event
the Plascon-Evans rule would apply); and, (b) if so, what should the result be?
Would it mean that Sale’s Hire is left without a crucial mechanism by which
it can determine royalties and fees, a mechanism which Beadica has not
impugned, or does it mean that Sale’s Hire is entitled to invoke its inspection
rights for as long as it does so lawfully? Significantly, Beadica has not
contended that there is an overriding constitutional obligation that must first
be fulfilled. It was submitted in Beadica’s heads of argument that ‘Sale’s Hire
seeks to enforce contractual rights for a purpose other than the purpose
expressly prescribed by the agreement and that is unlawful, namely, to gain
confidential information and to use it in its unlawful competition with
Beadica’. In the premises, Beadica submits that ‘enforcing Sale’s Hire’s rights
would be contrary to public policy’.

[47] But as this Court made plain in Pridwin Preparatory School, a party
who impugns a contract or its enforcement bears the onus to establish the
facts. This requirement accords with the trite legal principle that a party who
alleges must prove. (See in this regard: Pillay v Krishna and Another 1946
AD 946 at 952-953.) This must be all the more so, particularly in
circumstances where, as a general rule, courts are enjoined to exercise their
power to refuse to enforce contracts if to do so would be contrary to public
policy, sparingly and, even then, in the clearest of cases. In Barkhuizen, too,
the Constitutional Court endorsed the principle that a party seeking to avoid
the enforcement of a contract bears the onus to ‘demonstrate why its
enforcement would be unfair and unreasonable in the given circumstances’.26

26 Para 69.

[48] It bears emphasising that in this case the grant of an order of specific
performance in favour of Sale’s Hire will not result in a failure of a black
economic empowerment initiative as Beadica would have it. On the contrary,
Sale’s Hire’s election to uphold the franchise agreement would have the effect
of sustaining the empowerment initiative. Moreover, I fail to see how, in the
context of the facts of this case, the enforcement of the clauses invoked by
Sale’s Hire would be unreasonable or unjust to a degree that would render it
contrary to public policy for a court to enforce the clauses in question. On this
score it is as well to remember that Beadica does not in any way impugn the
terms of the clauses in issue. Its case is, in essence, that these clauses ought
not to be enforced because Sale’s Hire seeks to invoke them for an unlawful
purpose. Accordingly, it was incumbent upon Beadica to establish the
unlawfulness alleged. As I see it, even if Sale’s Hire’s alleged unlawful
conduct were established, nothing would preclude Sale’s Hire from enforcing
the franchise agreement for the lawful purpose – about which there is no
dispute between the parties – that it was meant to achieve. It is also not without
significance to note that the order granted by the Full Court cannot on any
stretch of the imagination be construed to be a licence to Sale’s Hire to
unlawfully gain confidential information of or otherwise compete unlawfully
with Beadica.

[49] Whatever justification there might be for thinking that in certain
respects the franchise agreement operated harshly as against Beadica in that
its terms favoured Sale’s Hire is neither here nor there. On a reading of the
franchise agreement one gains the impression that Sale’s Hire sought to
protect its interests to the fullest. But unfortunately for Beadica, courts are not
empowered to modify the terms of a contract or afford the complaining party

equitable relief. (See in this regard: South African Warehousing Services (Pty)
Ltd and Others v South British Insurance Co Ltd 1971 (3) SA 10 (A); [1971]
3 All SA 186 (A) at 18F-19A.)

[50] I have also considered Beadica’s argument based on cases like Pridwin
Prepratory School (SCA); Barkhuizen (CC) and Brisley v Drotsky 2002 (4)
SA 1 (SCA) and the principles set out in those decisions with reference to the
power of a court to refuse to enforce a contract if to do so would be
unconscionable or contrary to public policy. I do not propose to analyse those
cases in this judgment. Suffice it to say that having regard to the circumstances
disclosed in the papers, I consider Beadica’s argument that is predicated on
those decisions to be untenable.

[51] Moreover, I do not think that Beadica had a lawful basis to deny
Sale’s Hire its contractual rights of inspection purely because the latter’s
representatives or agents supposedly went beyond the parameters of the
inspection rights for which the franchise agreement provides. If Beadica
believed that Sale’s Hire was abusing its rights in order to gain access to its
sensitive confidential information and trade secrets, it should and could have
applied, by way of a counter-application in this instance, for an order
restraining Sale’s Hire from abusing its inspection rights. It also goes without
saying that if Beadica established the unlawful conduct of which it complains
it could just as well have elected to cancel the franchise agreement. In both of
these instances, the onus would squarely rest on Beadica to establish its case.
One ting though is beyond question, which is this. It was not open to Beadica
to undermine Sale’s Hire’s election to exercise its contractual rights.

Beadica’s tactic of adopting a ‘tit for tat’ stratagem to stymie the exercise by
Sale’s Hire of its rights was ill-conceived.

[52] As to the existence of special circumstances that merit a further appeal
in this Court, it was contended that the BEE initiative serves important policy
objectives that are underpinned by the Constitution to redress the legacy of
the past. Thus, Beadica submits, if the judgment of the Full Court were
allowed to stand, it would have the effect of ‘permitting Sale’s Hire to enforce
its contractual rights in a manner that undermines the effective
implementation of a BEE initiative financed with public funds’ through the
NEFT. For the reasons already stated, this submission is plainly unsustainable.
Significantly, the envisaged appeal does not raise a substantial point of law.
Whilst it might be of importance to Beadica, its importance does not transcend
the natural interests of the parties to this litigation. Nor am I convinced that
the refusal of special leave to appeal would, in the context of the facts of this
case, result in a manifest denial of justice. And, as already indicated, Beadica
has effective legal remedies that it could have invoked to address Sale’s Hire’s
alleged unlawful conduct. In these circumstances, I am not persuaded that
Beadica, who is after all seeking special leave, has come anywhere near to
establishing the existence of special circumstances to warrant special leave
being granted.

[53] Accordingly, the substance of the reasoning underpinning the judgment
of the Full Court can hardly be faulted. The inevitable consequence of this
conclusion is that the order of this Court granted on 15 August 2018, in terms
of which the applicant’s application for special leave to appeal against that
judgment was refused, was correct. In the result the following order is made:

The application for the reconsideration and, if necessary, variation of the order
of this Court, granted on 15 August 2018, dismissing applicant’s application
for special leave to appeal, is dismissed with costs.

________________________
X M PETSE
DEPUTY PRESIDENT

Appearances

For appellant:

G Quixley
Instructed by:

M E Mohammed Attorney-at-Law, Cape Town

Honey Attorneys, Bloemfontein

For Respondent:

S Rapaport
Instructed by:

De Klerk & Van Gend Inc., Cape Town
McIntyre van der Post, Bloemfontein.