Print

Brain Gear Investments (Pty) Ltd v Buhle Waste (Pty) Ltd and Others; Sembcorp Silulumanzi (RF) (Pty) Ltd and Others v Buhle Waste (Pty) Ltd and Others; Sembcorp Utilities (Netherlands) NV v Buhle Waste (Pty) Ltd and Others CCT 11/25, 12/25 and 25/25

Case  CCT 11/25, 12/25 and 25/25
[2026] ZACC 41

Hearing Date: 10 February 2026

Judgement Date: 09 October 2026

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

Today, this Court handed down a unanimous judgment in three consolidated applications for leave to appeal.

The litigation arose from a tender process conducted by the City of Mbombela Municipality (Municipality) and Sembcorp Silulumanzi (RF) (Pty) Ltd (Silulumanzi) which resulted in the conclusion of a concession contract for the supply of water in the municipal area. Clause 7.4.2 of the contract prohibited the transfer of shares resulting in a change of control without the Municipality’s consent.

On 22 February 2018, Silulumanzi, South African Water Works (Pty) Ltd (SAWW), Sembcorp Utilities (Netherlands) NV (SUN) and Sembcorp Utilities South Africa (Pty) Ltd (SUSA) concluded an agreement for the sale of all shares in Silulumanzi to SAWW, subject to the Municipal Council’s unconditional approval of the transaction within 180 days. When approval was sought, the Municipality requested that a Mbombela based B-BBEE (BEE) entity hold a minority stake of 28% shareholding. The Council granted consent and required the BEE selection process to be concluded within 90 days. Silulumanzi in assistance with PricewaterhouseCoopers Advisory Services (Pty) Ltd (PwC) began the tender process; three bids were submitted, Brain Gear Investments (Pty) Ltd (Brain Gear) and Buhle Waste (Pty) Ltd (Buhle Waste) were among them. In two separate assessment criteria, Brain Gear scored the highest. Consequently, Brain Gear concluded an agreement with Silulumanzi to acquire the 28% stake and the Municipality’s unconditional approval was given on 14 November 2018. Buhle Waste’s review in the High Court was focused on the conduct of the Municipality and the Municipal Manager in granting that approval.

Buhle Waste launched review proceedings in the High Court on 17 July 2019 under PAJA, alternatively legality. The respondents opposed the review on delay, non exhaustion of internal remedies and the absence of reviewable public conduct, characterising the change-of-control consent and BEE arrangement as contractual matters and defending Brain Gear’s structure and experience. At the outset of the High Court hearing, Buhle Waste and SUN obtained a settlement order recording that the 22 February 2018 sale agreement (February 2018 agreement) and Council resolution remained valid and binding. The High Court condoned the delay, held that the selection of the local BEE shareholder constituted administrative action, found the Municipality’s decision unreasonable, set aside the 14 November 2018 decision and remitted it for reconsideration. The SCA upheld the findings on condonation, reviewability and unreasonableness, rejected the internal-remedy argument and set aside unnecessary parts of the High Court’s remedial order.

Brain Gear, the SAWW parties and SUN sought leave to appeal in this Court. This Court identified nine issues: jurisdiction and leave; the effect of the SCA order on the settlement; whether a relevant decision was taken on 14 November 2018; whether it was administrative action; whether legality review applied; delay; exhaustion of the internal remedy; the merits; and remedy. The Court held that its jurisdiction is engaged and leave to appeal was granted.

As to the settlement order, the Court accepted that its wording was imperfect. A finding that the Council’s conditions were not lawfully fulfilled could cause the consent, and consequently the February 2018 agreement, to lapse. That was plainly not the parties’ intention and the SCA correctly removed the paragraph in the High Court order that conflicted with the parties’ intention. The surviving relief therefore did not impair the settlement, and SUN no longer required relief from this Court.

Regarding the date and identity of the impugned decision, this Court held that the courts below were entitled to treat 14 November 2018 as the operative date. In any event, even if confirmation occurred on 19 September 2018, this would not affect the review grounds or the explanation for the delay.

Turning to PAJA, the Court emphasised that the statutory definition is controlling. The immediate source of the Council’s power was clause 7.4.2 of the concession contract; no legislative requirement existed for the allocation of a 28% stake to a local BEE entity. The Court rejected an approach under which every act of a statutory body is regarded as taken in terms of legislation merely because some remote legislative source underlies its existence or activities. The decision in question concerned the exercise of a contractual right reserved to the Municipality. Accordingly, the Council’s conditional consent and the Municipal Manager’s subsidiary confirmation were not decisions taken in terms of legislation. The Court therefore held that the High Court and SCA erred in treating the confirmation as administrative action under PAJA.

The Court nevertheless held that the decision is susceptible to review under legality because it involved the exercise of public power. The Council was a statutory public body exercising a contractual power contained in an agreement concluded through a public procurement process. Moreover, the agreement was contemplated by the Water Services Act, and entrusted Silulumanzi with the important public function of supplying water. The change-of-control clause existed to protect the Municipality’s legitimate concern with the identity, character, expertise and resources of the concessionaire’s controller. The power to consent was directed to a public purpose closely connected with the Water Services Act. The Municipality occupied a position of marked superiority because the transaction depended on its approval, which was sought to advance both local economic benefit and transformation. Accordingly, the Council exercised public power, and the Municipal Manager’s confirmation likewise constituted public power reviewable under legality.

As PAJA’s does not apply, the Court reassessed delay under legality principles. The inquiry asks whether the delay was unreasonable and, if so, whether it should nevertheless be overlooked. The Court held that the impugned decision required prompt challenge. Delay would deepen prejudice to Brain Gear and funders and make eventual reversal increasingly difficult, not to mention the possibility of reversing the February 2018 agreement if no settlement order was reached. Buhle Waste says it learnt of the impugned decision on 28 November 2018 but commenced proceedings only on 19 July 2019. The eight-month delay is prima facie unreasonable. As Buhle Waste’s explanation for the delay was inadequate, the Court found the delay unreasonable.

The Court then considered whether the delay should be overlooked. Brain Gear had committed substantial funds, secured financing and reorganised its affairs in reliance on the transaction. By January 2022, it had also participated in governance and operations and incurred further financial obligations, making reversal increasingly prejudicial.

The Court held that prejudice existed even when the review was launched, and it intensified thereafter. The private parties could not reasonably have been expected to suspend performance merely because proceedings had eventually begun, particularly where Buhle Waste never sought interim interdictory relief. The Municipality was not a party to the share-sale transactions and could not halt their implementation. The contracts remained binding unless restrained or set aside. The later hiatus while Buhle Waste compelled production of the February 2018 agreement produced no material assistance.

The nature of the alleged illegality also did not favour overlooking delay. The review was legally directed at the Municipality’s passive conduct in executing oversight and consultation, not SAWW’s or Silulumanzi’s selection decision. The Court regarded that alleged illegality as not egregious. On the available evidence, the Municipality’s oversight role was less decisive than the courts below assumed; its role was merely to oversee the tender process. The duty to select in consultation with municipal representatives rested on SAWW and Silulumanzi; consultation required a reasonable opportunity for municipal input and good-faith consideration of any views, not municipal concurrence or control.

There were events in September 2018 that showed meaningful municipal participation, in which the Municipality was satisfied that the process was conducted professionally. The Court acknowledged that the Acting Municipal Manager expressed concerns about the process but the internal legal advice he received on 17 October 2018 concluded that the Council resolution had been complied with. There was no evidence that, before the 28 September deadline, the Municipality questioned Brain Gear’s selection. Since the Municipality itself did not allege inadequate consultation, Buhle Waste, an outsider lacking knowledge of all engagements, faced a substantial evidential difficulty. The lack of-consultation case was marginal.

The Court also addressed the objections to Brain Gear’s selection. The alleged conflicts of interest between Brain Gear and Silulumanzi did not establish that the Municipality failed in its oversight role. Brain Gear’s recent incorporation was disclosed, and the process openly assessed the experience of its principals. The alleged BEE misrepresentation was also less serious than suggested, as Brain Gear mistakenly assumed level one status but rectified its status before selection. Nor did the subsequent transfer to Brain Gear Investment South Africa (Pty) Ltd (BGSA) rather than Brain Gear materially undermine the Municipality’s decision: BGSA was Brain Gear’s wholly-owned special-purpose vehicle, used at funders’ request, and the transfer occurred after the impugned confirmation.

The Court concluded that no meaningful remedial order could adequately ameliorate the consequences of delay. The Court therefore held that this was not a case in which the unreasonable delay should be overlooked. The High Court additionally misdirected itself by relying on unspecified failures of disclosure, treating later efforts to obtain the February 2018 agreement as relevant to the initial delay, accepting an unparticularised assertion about research, and overlooking evidence of prejudice. It also incorrectly treated a delay shorter than 180 days as presumptively reasonable, whereas PAJA itself requires proceedings to be brought without unreasonable delay even within that outer limit.

The Court found it unnecessary to decide whether Buhle Waste failed to exhaust the section 62 internal appeal, to reach a final determination on every ground concerning the merits, or to formulate just and equitable relief. The appeal therefore succeeded.

Accordingly, the Court made the following order:

The following composite orders are made in Cases CCT 11/25, CCT 12/25 and CCT 25/25:.

 

 

The Full judgment  here