WBHO vs City of Cape Town
Collusion case with a twist
THE R429.47 MILLION civil damages claim lodged by the City of Cape Town against WBHO, Stefanutti Stocks and Aveng for collusion on the tender for the design and construction of the Greenpoint Stadium for the 2010 Fifa World Cup was the focus of an application heard in a North Gauteng High Court on Friday.
The application by the City of Cape Town related to proposed amendments of its particulars of claim, which was opposed by WBHO.
Schalk Burger, counsel for the City of Cape Town, said there were 10 proposed amendments, of which six were non material that related to definitions or the insertion of words for clarification.
But Burger said there were four substantive objections to four individual amendments by only one defendant, WBHO.
Wim Trengrove, counsel for WBHO, said the only issue was if the City of Cape Town relied not only on one but all three certificates issued by the Competition Tribunal in its claim against WBHO.
The certificates were issued by the tribunal after the companies entered into settlement agreements with the Competition Commission in a fasttrack settlement process for contraventions of the Competition Act on several projects.
The certificates are issued to allow affected parties to lodge civil damages claims.
Burger said the City of Cape Town accepted and was not seeking to use the certificates of either Stefanutti Stocks or Aveng as a cause of action for its claim against WBHO.
However, Trengrove said WBHO was alleged to have entered into three sets of collusive agreements in terms of which it systematically neutralised all the competition for the Greenpoint Stadium tender, which allowed WBHO to submit a bid with a profit margin higher than it would otherwise have had to bid if there was competition.
Trengrove said WBHO had to have all three collusive agreements to eliminate all the competition. He said it did not help the City of Cape Town to state that it did not rely on the other two certificates when the claim “as formulated necessarily and inevitably includes as one of its pillars all three (collusive) agreements”.
“It cannot stand on only one of them and yet it’s common cause that the City of Cape Town cannot advance all three agreements against WBHO. It ultimately turns on an interpretation of their own claim. We say they rely and have to rely on all three. They say they are relying on one,” he said.
Burger said they did not rely on the certificates of the other two defendants against WBHO, stressing WBHO had its own certificate. “But of course it overlaps because we are talking about collusion. It’s a marriage, you need two parties. It’s like a tango,” he said.
Burger added that had it not been for the collusive agreements between WBHO and each of the other two defendants, they would have responded to the tender invitation with a competitive bid.
He said when it came to damages, they would obviously have to be quantified by leading evidence, which was going to take a lot of time. “My side has pleaded that a reasonable margin was 6 percent. We have pleaded that the successful tender by WBHO had a margin of 18 percent. We say that was too high and have to prove that was a result of the collusion by WBHO,” Burger said.
Judgment was reserved.