IN THE HIGH COURT OF LESOTHO
In the matter between:
CIV/APN/76/2009
MAKHETHE CLEANING SERVICES (PTY) LTD APPLICANT
AND
NATIONAL UNIVERSITY OF LESOTHO 1ST RESPONDENT
LESOTHO GOLDEN ASSOCIATES (PTY)
LTD (t/a MR CLEAN FAMILY) and also KNOWN AS LESGA 2ND RESPONDENT
BOHLOEKI HYGIENE CLEANING SERVICES (PTY) LTD 3RD RESPONDENT
MOTHEO CLEANING SERVICES (PTY) LTD 4TH RESPONDENT
JUDGMENT
DELIVERED BY THE HONOURABLE MRS JUSTICE K.J. GUNI
ON THE 29TH DAY OF SEPTEMBER 2011
This is a matter of an application in which the applicant seeks an order in the following terms:
1. Declaring that the Applicant has the exclusive right to render cleaning services for all buildings on all of the 1st Respondent’s campuses;
2. Interdicting the 1st respondent from signing any new contracts with other companies for the cleaning of its buildings on all its campuses;
3. Interdicting the 1st respondent from renewing the contracts signed with the 2nd , 3rd and 4th Respondents for the cleaning of the 1st respondent’s buildings once their current contracts expire;
4. Directing the 1st respondent, and the 2nd , 3rd and 4th respondents only in the event of opposition hereto, to pay the costs hereof;
5. Granting the Applicant further and or alternative relief.
1- IDENTITY OF THE PARTIES
The applicant is MAKHETHE CLEANING SERVICES PTY LTD. [Hereafter referred to as the applicant company] It is a company with power to sue and to be sued in its own name. It is registered in terms of the Laws of LESOTHO. It has its main office at GUILBEAULT HALL, NATIONAL UNIVERSITY OF LESOTHO, ROMA, in the district of MASERU, LESOTHO. The first Respondent is the NATIONAL UNIVERSITY OF LESOTHO. [Hereafter referred to as the University]. It is a body corporate established under the NATIONAL UNIVERSITY ACT NO. 13 OF 1975. It has the power to sue or be sued in its own name. Its principal place of business is at ROMA, in the district of MASERU, LESOTHO. It has campuses and or offices of operations all over the country. E.g. Mokhotlong, Leribe, Mohale’s Hoek, and at IEMS MASERU, Thaba-Tsekaetc. The second Respondent is The Lesotho Golden Associates (PTY) LTD (t/a MR CLEAN FAMILY) a company duly registered in terms of the Laws of Lesotho. It has its main office at LNDC Building KINGSWAY, MASERU, LESOTHO. As a company, it is an artificial person who can sue or be sued in its own name. The third respondent is another company called BOHLOEKI (PTY) LTD. It is registered in terms of the laws of LESOTHO. It also has its main place of business here in the city of MASERU. The fourth Respondent is MOTHEOCleaning Services (PTY) LTD. A company duly registered in terms of the laws of LESOTHO. Its principal place of business is at The INSTITUTE OF EXTRA MURAL SERVICE[hereafter referred to as IEMS] at the University Campus here in MASERU.
2 – APPLICANT’S CASE
The dispute in this matter according to the applicant is between the applicant company and the University. The applicant company was formed by the former employees of the university. Members of the applicant company [shareholders and/or directors] were employed as casual labourers engaged as cleaners by the university. In 2002 the university decided to terminate the services of these casual labourers who were employed by it as cleaners. They held no permanent posts. They were casual labourers even although they had worked for the university as cleaning casual labourers for one or two years in some cases. These causal cleaning labourers formed and registered this applicant company in September 2002. It is this applicant company’s case that the university promised those casual laboureres who worked as cleaners that they will continue to working for it after the termination of their temporary terms of employment but now as independent contractors under the auspices of a body corporate that was to be formed or established by them.
It is claimed that the university undertook to offer that body corporate [the applicant company herein] once established exclusive and permanent right to do the cleaning work on all university campuses wherever situated around the whole country, in perpetuity.
The university even actively took steps to offer those “casual labourers” basic training in the conduct of business at IEMS campus in Maseru. The university helped those casual labourers to form and register this applicant company. The university promised further that once those casual labourers were disengaged from the university employment presumably as individual cleaning labourers, they will take over as a company all the cleaning services on all the university campuses all over the country. The company will start with ROMA and IEMS MASERU campuses. The university provided this applicant company with a starting capital that was used to buy various types of cleaning equipments and materials. The university terminated or did not renew the contracts of other companies which it had already engaged to do some of the cleaning work at that time. Once the applicant company was established it ratified the agreement concluded on its behalf by casual labourers and the university. It was a terms of the agreement so ratified that the payment will be M5.13 per square metre. The university was obliged to add 10% per annum to the contract price. The applicant company was not obliged to tender for cleaning work. It was assured of a monopoly in the cleaning of the university campuses if they do not claim 10% annual increase on the contract price.
The university is in breach of all the terms of the contract or undertaking. The university has unilaterally cut the price for cleaning per square meter from M5.13 to 2.93. The applicant has to tender or does not get the cleaning job if it does not tender. There are other companies [2nd, 3rd and 4th respondents herein] who tender for cleaning job at the university campuses and they have taken over the cleaning job at some campuses of the university. Sometimes the applicant company wins the tender sometimes it loses
INTRODUCTION
The dispute in this matter is between the applicant and the 1st Respondent. The other three respondents have not filed any papers to oppose this application. This is the clear indication on their part that they are prepared to abide by whatever decision this court makes in this matter. It is only the 1st respondent who has filed papers opposing the granting of the declaratory order sought by this applicant company.
2 – 1st RESPONDENT’S CASE
Neither before nor after the incorporation of the applicant company did the university give applicant permanent and exclusive right to do the cleaning work for it at all its campuses. No undertaking was made to casual labourers who did the cleaning work at the university, that they will be hired permanently and indefinitely by it after the termination of their temporary employment contracts. At no time did the university assure applicant or its members a continuous and exclusive right of employment. The university was undergoing a cost containment process. In those circumstances it was decided that the university should cut the expenditure on cleaning services. In order to achieve the cost containment and/or cut, cleaning expenses, the university decided to outsource cleaning services for all its campuses.
In order to minimize the impact of the retrenchment process, the university advised its cleaners who were “casual labourers” to form a cleaning company which would be able to tender for its cleaning work. The casual labourers were not promised or assured continued employment under the body which was to be formed as alleged by the applicant.
The decisions of the university are made on its behalf by the university council or those authorized to act on its behalf. There is no proof of such a decision being made by the university council for perpetual employment of its casual labourers as shareholders and/or directors of the applicant company as alleged by the deponent of the Founding Affidavit. ’Mamoliko Pule as the domestic Bursar is entrusted with the implementation of the contracts of employment at the university. She should know and should be in a position to enforce or implement such contracts of employment. She has never known such terms of employment that are alleged by this applicant company. It is the domestic Bursar who is responsible for overseeing cleaning services at the university campuses. There is no such contract as alleged on behalf of this applicant. It is denied that this applicant was ever promises exclusive right to do the cleaning work on all university campuses. Even before the incorporation of this applicant company, up to the present time, the 2nd respondent was and is still doing cleaning work at the university. There was never a time when this applicant company was the only company which was doing the cleaning work at the university.
This applicant company has been tendering with other companies for cleaning work at the university. The 2nd respondent has also been tendering in competition with this applicant company for cleaning work at the university campuses. In 2003 the 2nd respondent won the tender while this applicant failed to win. Therefore the tender was awarded to the 2nd respondent to do the cleaning work at Roma Campus and also at IEMS MASERU.
The applicant was not given a starting capital. It was given a loan which was to be repaid by the applicant once it became financial liable. As its casual cleaning labourers, the members of the applicant company had in their possession the cleaning equipment and materials bought for them and for their use in order to do their cleaning job. All those materials were converted into cash which was loaned to them to repay when their company became liable and an on-going concern.
It is denied that the termination of cleaning contracts of the applicant’s competitors was to facilitate the establishment of the monopoly or to enforce the same. It was due to transformation and restructuring processes as set out in the letter of termination of their cleaning contract – “Annexure NUL 2”.
From 2005 the parties [That is to say the applicant company and the university] entered into written contracts of cleaning specific areas at certain campuses of Roma and IEMS – MASERU. There was no query that there is no need for a contract because there is already a contract which offered the applicant permanent cleaning job of all university campuses. The applicant company entered into a contract for specific terms of periods and specific areas at a single campus - not all campuses. Over many years such contracts were renewed or extended. The cleaning contracts of the applicant’s competitors were also concurrently being renewed. There was never a single instance before 2002 that is to say before the launching of the applicant company or thereafter when this applicant or its members as casual labourers of the university, ever enjoyed the monopoly of cleaning on all the campuses of the university all over this country. The terms of the contract must be proved by him who relies on such terms. He who alleges must prove his allegation. It is alleged in the Founding affidavit that it was a term of the contract that the rate of payment is M5 per sq meter. There is no proof. It is denied on behalf of the university that this was a term of a permanent or perpetual agreement.
The change in their charge per square meter was brought about as the tender board had a query on the applicant company’s well above the market value of the current charges in the industry. There were two companies which were overcharging – Lesotho Golden Associates (t/a Mr Clean Family) also known as LESGA and Bohloeki Hygiene Cleaning Services (PTY) LTD. This applicant company and Motheo Cleaning Services offered a lesser charge per sq meter. They both accepted the offer as shown in [ANNEXURES NUL13 and NUL 14] attached to the ANSWERINGAffidavit. In 2005 the change to the charges was contained in a contract which the parties [this applicant company and the university] had entered into. It was not unilateral round about turn of any previous contract as alleged.
There was never an increase of 10% on a contract price. There is no proof of this allegation. There were always tenders and the price was always tendered for. It is not correct that the applicant ever received 10% or was promised an increase of 10% over and above the contract price. It is denied that the university is in breach of any promise or undertaking or contract. The rates paid to this applicant are the same as those paid to the 2nd, 3rd and 4th respondents. They are the rates tendered for.
3 – ISSUES AS GLEANED FROM THE PAPERS FILED OF RECORD
(1) Whether or not there was a promise, an undertaking or a contract between the university and its “casual cleaners”/the applicant company [as the company formed by those university casual cleaners] to the effect that the applicant company will be or has been given the exclusive and perpetual right to clean all the campuses of the university where ever they are situated in the whole country.
(2) What were the exact terms of the alleged promise, an undertaking and/or the contract?
(3) Has the university breached or not any of the terms of the said promise, an undertaking and/or contract.
The first question to be determined by this court is whether or not there was an agreement, contract, undertaking and/or promise made on behalf of the university to its casual labourers who were working as cleaners. It is not in dispute that their casual cleaning jobs were lost by them when the privatization or out sourcing of the service was introduced and implemented. They claim that they were advised, encouraged and assisted to form a company. This is not a bad thing. It should be commendable. It should not turn into a curse. They successfully established and registered the applicant company in September 2002. It is alleged that prior to the establishment and registration of the applicant company those university casual labourers and the university had agreed that the applicant company once registered, it will be given permanent and exclusive right to clean all the campuses of the university. It is not alleged that this agreement was written. It is not alleged that it was oral agreement. It seems it is strenuously argued on behalf of the applicant that such agreement was tacit. If this applicant company wishes to rely on a tacit contract it is necessary to plead the tacit contract. There is no averment in the founding affidavit that the applicant company is relying on any particular type of contract.
A chain of events which allegedly confirm the existence of tacit agreement are listed on behalf of this applicant company in the Founding Affidavit. Their services as casual labourers were terminated. This is undisputed fact. They were now supposed to commence to work for the university – not as its individual employees; but as employees of a corporate body which they have formed. There appears to be no problem with regard to this position. Where the problem arises is at the allegation that the body corporate which these casual labourers formed – [the present applicant company] must be declared to have exclusive and permanent right to render cleaning services for all buildings on all of the university campuses all over the country. The deponent of the Founding Affidavit on behalf of the applicant company catalogued conduct and circumstances from which the tacit contract must be deducedROBERTS CONSTRUCTION CO. LTD V DOMINION EARTHWORKS LTD 1963 (3) SA 255 A. The conduct and the circumstances must not be just alleged but must be proved unequivocally for the proper deduction of the tacit contract to be made.
The casual labourers who worked as cleaners were advised to form a company which will be able to tender for cleaning work at the university. The parties agree that this advice was given in order to minimize the impact of retrenchment of those labourers. It is denied that the casual labourers were assured of continuous employment. They won the tender at times. They lost to their competitors at other times. Prior to the termination of their casual labour contracts or temporary employment there were already companies which were doing some cleaning work at the university. The reason for the termination of their contracts of cleaning as individual labourers was to contain and/or cut expenditure on cleaning services. The university was not doing away with the cleaning altogether. It was looking for a cheaper way of cleaning and keeping its premises clean. As shown in ANNEXURES “NUL” 6 and 7 cleaning contracts were made with the applicant company and others. Those contracts were extended when need arose. There were committees which sat, evaluated and awarded tenders and contracts – [ANNEXURE NUL 9refers].
This far reaching decision to turn casual labourers into permanent employees should have been made by the university council or by someone authorized by the council to make the same on its behalf. There is no evidence that such a decision was made by the university council. The supportive affidavits of the former Pro-Vice Chancellor and the former Vice Chancellor are not helpful. None of them specifically name the person or persons who made the undertaking/promise, contract etc. The decisions of the body corporate must necessarily be written so that they can and must be found and enforced. Nobody has produced any proof of the making and enforcement of such a decision. The human resources officers and/or the bursar have no record of such decision. Since 2002 up to 2009 when the present application was filed with this court there has never been an attempt by anyone or anybody to draw the attention of those who should implement and enforce the said contract to the existence of the right of monopoly and the right of permanent employment to clean all the campuses of the university by the applicant company.
The deponent of the founding affidavit has made the list of such circumstances at paragraph 6 of the Founding Affidavit. I shall deal with them one by one. These circumstances are again suggested as the background to their dispute. That is an indication that from the onset the applicant was aware that the facts on which it relies are disputed; but nevertheless chose to proceed by way of an application. The circumstances are listed as follows:-
(a) Termination of the contract of employment of 36 casual labourers who worked as cleaners for the university. It is the averment made on behalf of the applicant company by MAPONTSO MATOBOa director of MAKHETHE CLEANING SERVICS (PTY)LTD, that these casual labourers held no permanent contracts of employment. [My underlining] As such, it must have been expected by them and all that any time, as “casual labourers” their jobs will definitely come to an end. In 2002 when the university decided to terminate the services of 36 of such temporary employees, it was not a shock and a surprise. What happened was expected. It cannot be by any stretch of imagination an assurance that such termination turns or converts the temporary terms into perpetual terms of employment.
(b) There is an undertaking/promise/contract that those “casual labourers” would continue working for the university after the termination of their “temporary“ terms of employment but now as independent contractors under the auspices of a body corporate that was to be established. This is a far reaching contract because it goes even beyond the lifetime of those casual labourers as the company which they formed – the applicant company herein - MAKHETHE CLEANING SERVICES (PTY) LTDtogether with the university are entities that are expected to continue in perpetuity. Who acted on behalf of Makhethe Cleaning Services (PTY) LTD in the making of this contract? Who represented the University? According to the deponent of the Founding Affidavit the agreement was entered into prior to the formation and registration of the applicant company. That is why it is further alleged by ‘MAPONTSO MATOBOthat such agreement was subsequently ratified by the applicant. When was it ratified? Who represented the company? Who represented the university at the said ratification? The party alleging a contract must prove the terms of the agreement which he or she seeks to enforce. Mc WILLIAMS v FIRST CONSOLIDATED HOLDINGS (PTY) LTD 1982 2 SA 1 (A). The onus is on this applicant company to prove the terms of this alleged undertaking, contract and/or agreement.
(c) The university undertook to offer that body corporate exclusive right to do cleaning work on all of the University campuses. The university has several campuses. There is no evidence that at any time this applicant company ever did a cleaning of all the university campuses. Even the supporting Affidavit of the former Vice Chancellor and Pro-Vice Chancellor of the university do not unequivocally claim that there was verbal or written undertaking that this applicant company is contracted to do the cleaning of all the university campuses. The former Vice Chancellor merely claims that it was his or the management’s vision, that with time, the company established by laid off employees would extend its cleaning services beyond the two campuses of ROMA and IEMS at MASERU. Those two officials of the university former Vice Chancellor and Pro Vice Chancellor do not claim that they in their official capacity or authorized by the university made such an undertaking of employing or turning the casual labourers into permanent employees that would perform for ever in perpetuity the cleaning of all the university campuses all over the country.
CONCLUSION
The answer to the question of whether or not there was an agreement, contract and or undertaking that the applicant company is given exclusive and permanent or continuous right to do the cleaning work on all the premises or buildings in all campuses of the university, is no. There is no proof of the existence of such an undertaking, agreement and/or contract.
The former Vice Chancellor and the former Pro-Vice Chancellor must have been in the management committee. How did the management committee operate during their tenure of office? Entities such as this have human persons act on their behalf. They should give directions, instructions in writing because only such records can be a proof of their actions. Is there a record of minutes of the management committee which support their averments? None. Is there a written agreement between the university and its former casual labours? No. Is there a written record of the minutes of the management committee which supports the allegations of the former Vice Chancellor and former Pro Vice-Chancellor? No.
On the second question of what exactly were the terms of the alleged agreement; the answer is not a straight and simple one. There is no list of specific terms of the alleged agreement. According to Mr NQOSA MAHAOwho was the Pro-Vice Chancellor at the time at paragraphs 7 and 8, he avers:-
We then provided the said workers with limited start-up capital; business management training through the Institute of Extra Mural Studies (IEMS) and assisted them register their company Makhethe Cleaning Services (PTY) LTD. We undertook to let their company exclusively carry out cleaning operations at the University’s two main campuses at Maseru (IEMS) and Roma with the view to extending their area of responsibility when they had accumulated the requisite capacity. At that time NUL had several campuses.
We gave only one condition for the company to enjoy the monopoly of being the sole provider of cleaning services to the University. That condition was the privileged monopoly protection would be reviewed if the company delivered service of a Lower quality than that provided by the members thereof when they were in the employ of the University.
To that end the University domestic Bursar was to provide regular reports to management on the Company’s performance; and any issues of under/mal performance were to be brought to the company’s attention immediately for rectification.
Exactly what does that mean when he says “we”? The impression given in that perhaps he is still referring to the management committee. How did that undertaking get to the officer or officers i.e. Human Resources Officer and the Bursar etc all those whose function was to implement that contract if it was there? The registrar who is the recorder and the keeper of the minutes of the university council has no such record. The Vice and Pro Vice Chancellors do not speak of any written document, be it the minutes of the management committee or the letter from anyone of them to the applicant company or to its members
Even according to both of those supporting affidavits of the former Vice and Pro-Vice Chancellors there was never a single instance when this applicant company performed cleaning duties on all the university campuses all over the country. Both the former Vice and Pro-Vice Chancellors speak of the view or vision of extending the cleaning services of the applicant company perhaps with accumulation of requisite capacity. This clearly indicates that the applicant company had at that stage no capacity to carry out the cleaning of all the university campuses. Where was the contract they are now asking this court to enforce at the time the former Vice and Pro-Vice Chancellor were holding on those views and/or visions? The occupants of these top university posts did not themselves enforce or implement the alleged agreement, undertaking and/or contract. To whom did they give directive or instructions to carry out their vision or views? Were the instructions verbal or written? There are no answers to these questions.
The applicant company was not even able to start cleaning at the Roma and/or IEMS campuses. It is claimed it had to be given a starting capital. The applicant company was formed by former employees of the university. As causal cleaners of the university, it was the employer [The University] which provided them with cleaning materials and equipment. When they became an independent company they were not to be provided with cleaning materials and equipment any more by the university. But they were allowed to continue to use the materials and equipment of the university. These materials and equipment were already in the possession of these casual labourers even though they were now employees of their applicant company. These were converted into capital which was to be repaid. This cannot be an indication of entry into a contract of monopoly to clean all university campuses all over the country, when clearly the applicant company was in no position even to attempt to be the only company at that time that could do the job of cleaning at the only two of the university campuses.
Where there is no contract, there can be no terms of the contract. Terms of contract do not exist outside the contract. Therefore the third question falls away. Similarly where there is no contract and/or its terms, there can be no breach of the same. In these circumstances this application must fail.
It is dismissed with costs.
K.J. GUNI
JUDGE
For Applicant: Mr Mohau K.C.
For 1st Respondent: Mr Moiloa
