Vermooten v Department of Public Enterprises (JA91/2015) [2016] ZALAC 63 ; [2017] 6 BLLR 606; (2017) ILJ 607 (14 December 2016) per Landman JA (Waglay JP and Ndlovu JA concurring)

The recent unanimous decision of the LAC must be applauded for upholding and reinforcing the constitutional rights concerning human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and non-sexism.  Landman JA boldly and correctly stated that it is not permissible for a party to a ‘work’ agreement to change or contend that the legal relationship between them is something over than what they agreed.  In his words it ‘holds important implications for the integrity of the legal framework of departments of State’.  No policy obliged the LAC to ignore the terms of the agreement.  In fact the terms could not be ignored.  The agreement was clearly not a sham and the parties were in a relatively equal bargaining position.  Legal effect had to be given to their conscious election of one contract or relationship over another.

Refer to: Dominant contractual consultancy terms.

It is worth quoting what Cameron JA, as he then was, is reported to have stated in Brisley v Drotsky 2002 (12) BCLR 1229 (SCA)

Excerpts without footnotes

“[4]        The jurisprudence of this Court has already established that, in addition to the fraud exception, there may be circumstances in which an agreement, unobjectionable in itself, will not be enforced because the object it seeks to achieve is contrary to public policy.[1]  Public policy in any event nullifies agreements offensive in themselves – a doctrine of very considerable antiquity.[2]  In its modern guise, ‘public policy’ is now rooted in our Constitution and the fundamental values it enshrines.  These include human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and non-sexism.[3]

[5]        It is not difficult to envisage situations in which contracts that offend these fundamentals of our new social compact will be struck down as offensive to public policy.  They will be struck down because the Constitution requires it, and the values it enshrines will guide the courts in doing so.  The decisions of this Court that proclaim that the limits of contractual sanctity lie at the borders of public policy will therefore receive enhanced force and clarity in the light of the Constitution and the values embodied in the Bill of Rights.

[6]        I share the misgivings the joint judgment expresses about over-hasty or unreflective importation into the field of contract law of the concept of ‘boni mores’.  The ‘legal convictions of the community’ – a concept open to misinterpretation and misapplication – is better replaced, as the Constitutional Court itself has suggested, by the ‘appropriate norms of the objective value system embodied in the Constitution’.[4]

What is evident is that neither the Constitution nor the value system it embodies give the courts a general jurisdiction to invalidate contracts on the basis of judicially perceived notions of unjustness or to determine their enforceability on the basis of imprecise notions of good faith.[5]

[7]        On the contrary, the Constitution’s values of dignity and equality and freedom require that the courts approach their task of striking down contracts or declining to enforce them with perceptive restraint.[6]  One of the reasons, as Davis J has pointed out,[7] is that contractual autonomy is part of freedom.  Shorn of its obscene excesses,[8] contractual autonomy informs also the constitutional value of dignity:

‘If we look at the law simply from the point of view of the persons on whom its duties are imposed, and reduce all other aspects of it to the status of more or less elaborate conditions in which duties fall on them, we treat as something merely subordinate, elements which are at least as characteristic of law and as valuable to society as duty.  Rules conferring private powers must, if they are to be understood, be looked at from the point of view of those who exercise them.  They appear then as an additional element introduced by the law into social life over and above that of coercive control.  This is so because possession of these legal powers makes of the private citizen, who, if there were no such rules, would be a mere duty-bearer, a private legislator.  He is made competent to determine the course of the law within the sphere of his contracts, trusts, wills, and other structures of rights and duties which he is enabled to build.’[9]

[8]        The Constitution requires that its values be employed to achieve a careful balance between the unacceptable excesses of contractual ‘freedom’, and securing a framework within which the ability to contract enhances rather than diminishes our self-respect and dignity.  The issues in the present appeal do not imperil that balance.’