A FRIDAY LEGAL CASE SUMMARY: A WATERED DOWN CASE ANALYSIS OF Ad All CC v Kapa Bokoni Trading and Projects 10 CC(69/2025) [2026] ZASCA

I usually morning pages, wherein I freestyle whatever is in my mind. Now since I did not write my morning pages, I will take this opportunity now to do that.

For the last couple of years, I have been grappling with the concept of "Letting that shit go"- detaching myself from the stories which my conjures up from an a real life even happening. I live with immense regret and shame for the things I have done in my life and for the actions which I have taken. But the more I grow, the more conversation I have with my loved ones and my kinfolk and the more I read, the more I am coming to terms with the fact that, i am far from being perfect, heck, I think the right way to phrase it is that, I am imperfect to the highest degree. But I have formulated an understanding now that, being me (human) is not about being perfect, its about embracing your imperfections and the imperfections of the world and trying your best to be good, kind, loving and put extra effort in not being the cause of hurt for someone else through your action. Before you act, zoom out of the picture, and ask yourself whether, will this selfish result in the hurt and violation of someone else. Now I dont opine that being selfish is wrong, get yours, but its essnential that in being selfish, no one ends up being collateral damage.

We are just souls here to have a human experience - and we have a part to play in ensuring how we experience being a human does not ruin another experience of being a human. This is a responsibility which we must strive to ensure that we take extra care and effort in ensuring that we dont fall short of that responsibility. I have fallen short many times, and no amount of apologies will take it back. All I can do now, is always ensure that I do a better job in ensuring that uphold my responsible as a soul here to have a human experience.

-Let that shit go, be better.

With that out the way, lets get to the law, law, and more law. We here today, not to read about my internal thoughts and struggles, we are here to understand 1. whether rendering security services without statutory registration under the Private Security Industry Regulation Act renders the service agreement illegal and void ab initio(Invalid from the very beginning), and whether a client can recover past payments made under that illegal contract through an enrichment action (condictio ob turpem vel iniustam causam- basically asking for your shit back because the deal is illegal) on a stated case without leading trial evidence regarding equitable principles and the relaxation of the par delictum rule.

This one is mainly for my Security company Ladies and Gentlemen who provide the Service of Securing and Protecting its client. From the jump, its essential to stipulate that from a compliance perspective, Private security companies must be registered as such in terms of Legislation, in order to avoid their contracts with their clients being illegal and invalid - meaning such contracts can get cancelled anytime and leaves the company vulnerable to zero recourse should something go wrong contractually - in commercial terms, this leaves the company exposed to a bunch of bullshit. We will receive the answers to this question by going into the Supreme Court Judgement case of Ad All CC v Kapa Bokoni Trading and Projects 10 CC (69/2025) [2026] ZASCA

As always in our summaries, we will dive into the 1. facts, 2. legal issues and question grappled with, 3. legal principle and legislation applicable, 4. the court evaluation and 5. lastly the court order. We will cap of the writing by touching on the Impact of this Judgment on the Lived realities of the people it seeks to govern.

1. THE BACKGROUND FACTS: The Sideline Story

Every major court battle within the commercial aspects of our lives starts with a seemingly routine business deal that goes off the rails. In the matter of Ad All CC v Kapa Bokoni Trading and Projects 10 CC (69/2025) [2026] ZASCA commercial security arrangement transformed into a high-stakes legal showdown at the Supreme Court of Appeal.

Since this is a story and we are "Legal Story Tellers" - we will outline the facts of this case in Acts. On some Broadway type of vibes and energy.

Act I: The Agreement and the Fine Print

On 18 January 2019, Millennium Bodyguards ("Millennium"), a private security provider, entered into a written service level agreement with Kapa Bokoni Trading and Projects 10 CC ("Kapa"). Millennium agreed to safeguard Kapa's premises for reward, and the contract was set for an initial term of 12 months.

Crucially, the contract contained an automatic renewal clause which stipulated that the agreement would automatically extend for another 12 months unless Kapa provided written notice of non-renewal at least 60 days before the first year ended

Honeymoon phase is taking full effect, and the work is being done and the money is being paid in return. Then.......

Act II: The Late Cancellation and Continued Services

As the initial 12-month period drew to a close, Kapa failed to give notice within the 60-day window. Under the contract's terms, the agreement automatically renewed.

Kapa then attempted to cancel the contract out of time. Millennium refused to accept the late cancellation and continued providing security guards and protection services. Kapa accepted these services and paid its monthly invoices for January and February 2020 Then said it "Fuck it" for March, April, May, June, July and so on and so forth.

Problems in Paradise start taking shape and we get to the beginning of the end of this commercial relationship and the end usually starts with someone saying "According to the Law......."

Act III: The Regulatory Discovery

In May 2020, the relationship took a dramatic turn. Kapa sent a formal letter to Millennium demanding proof of its mandatory registration under Section 20(1)(a) of the Private Security Industry Regulation Act 56 of 2001 (PSIRA).

Millennium declined to provide proof of registration.

Realizing that Millennium was operating without statutory registration, Kapa immediately stopped paying for the security services being rendered. Nevertheless, Millennium issued monthly invoices for the period between March to August 2020, which went entirely unpaid.

The client realized a vulnerability present in the Company and used that to its advantage in getting out of a agreement it wanted out off after the initial 12 months terms expired but probably didnt have great contract management in place to keep track of the lifecycle of this contract - there could be other reasons ofcourse, but mainly, such failures to communicate non-renewal is as a result of oversight within the contract management department.

You know what they say, "Money is the root of evil", well in this case and i guess in most cases involving commercial disputes, money is the root of battle line getting drawn in court.

Act IV: The Battle Lines Drawn in Regional Magistrate Court

On 27 August 2020, Millennium launched legal action in the Central Tshwane Magistrates’ Court.

• Millennium’s Claim: Millennium sued Kapa for R199 329,50 in unpaid invoices for services already delivered from March to August 2020, plus an additional R164 881,25 for the remaining value of the unexpired contract term. Millennium pointed out that it had fulfilled its side of the bargain by physically providing security guards.

• Kapa’s Defence: Kapa argued that because Millennium was unregistered under PSIRA, the service agreement was prohibited by law, rendering it invalid, illegal, and unenforceable.

• Kapa’s Counterclaim: Kapa went a step further, demanding that Millennium refund R411 173,26—the total sum Kapa had paid Millennium between February 2019 and February 2020. Kapa claimed it had paid those funds under the bona fide and mistaken belief that the agreement was legally valid.

With these battle lines now drawn, the courts (Regional and the High Court- because the case actually went on appeal to the High Court after the Magistrate gave an order)

Act V: The Lower Courts' Decisions

Instead of holding a full trial with witness testimony, the parties submitted the dispute to the Regional Magistrate on a stated case (an agreed set of written facts) - I have never heard of such a procedure/process before, wherein certain stages of the Action proceeding process are skipped.

1. The Magistrate's Court: Magistrate Nel ruled entirely in favor of Kapa. He held that Millennium's lack of PSIRA registration made the contract illegal, meaning Millennium could not claim unpaid fees and could not keep the R411 173,26 it had already received. So the company in terms of this order, were instructed by the court to pay back the money.

2. The High Court Appeal: Millennium appealed to the Pretoria High Court (Swanepoel J and Van Der Schyff J). The High Court confirmed that the contract was void ab initio(invalid from the beginning) due to statutory illegality and upheld the Magistrate's order forcing Millennium to refund Kapa.

So the Magistrate court and the High Court, basically threw the book on the Bodyguard Company and order that they pay back the money. The company initiated these proceedings seek justice but now it has turned into a uno reverse wherein they are pronounced to be the side that is actually owing.

Act VI: The Supreme Court of Appeal Intervenes

Unsatisfied, Millennium obtained special leave to appeal to the Supreme Court of Appeal (SCA) which is where we are now and why we are here.

The SCA faced a fundamental legal question: While an unregistered security provider cannot enforce an illegal contract to get paid for unpaid work, can a client automatically demand a full refund for services it already received without presenting evidence of fault, knowledge, or equitable balance?

Now with understanding of the story, Lets get to the exact reason why the court was to called to resolve by looking at the legal issues the court was tasked to resolve and clarify not only for the litigants in this matter for the public at large

LEGAL ISSUE/LEGAL QUESTION: Questions for the Court

1. Whether a contract lacking statutory registration is merely unenforceable (e.g., for non-compliance with formal statutory requirements) or strictly illegal and void ab initio

2. Whether the equitable rule in Wilken v Kohler—which allows a court to leave undisturbed an unenforceable contract where both parties have performed—applies to illegal contracts

3. Whether Parliament intended for non-registration under Section 20(1)(a)—which is punishable as a criminal offence under Section 38(3)(a)—to carry civil illegality rather than mere unenforceability

4. Whether the statutory obligation to register serves a compelling public interest in regulating a massive and powerful security industry

5. Whether the Cause of Action of Kapa's counterclaim was Condictio Indebiti(payment made under mistaken belief that it was due) or Condictio Ob Turpem Vel Iniustam Causam (An action for recovery on account of a disgraceful or unlawful cause)

6. Whether the par delictum rule (Where both parties are equally at fault, the party in possession of the property or money is in the stronger position) should be relaxed in equity and public policy to prevent an injustice—specifically where Millennium physically rendered security services without turpitude, and Kapa accepted them without tendering any return of benefit.

7. Whether a party seeking a refund under an illegal contract must tender the return of what was received (or demonstrate why it cannot do so)

8. and Lastly whether a court can decide the relaxation of the par delictum rule and equitable adjustments on a sparse stated case without hearing oral evidence.

These are basically the legal question in which the court was faced with in order to resolve this dispute. In resolving these issues, the court places us, the public who are governed by these laws and regulations to understand what we can and cannot do and most importantly understand the implication of non-compliance. A nice thing I enjoyed about dissecting this judgment was also understanding the powers of the court, for example whether the court can decide a action proceedings matter without hearing oral evidence. That is a question I myself never considered because I always assumed it was impossible.

Let find out how the court reasoned and clarified the law

COURT'S EVALUATION AND ANALYSIS: In the Hands of the Court

• Issue #1: Whether a contract lacking statutory registration is merely unenforceable (e.g., for non-compliance with formal statutory requirements) or strictly illegal and void ab initio:

  • Without wasting reading time, the court unequivocally held that a security service contract lacking mandatory statutory registration is strictly illegal and void ab initio, rather than merely unenforceable. This pronouncement entails that a contract not in compliance with statutory requirements is regarded as non-existent and unenforceable in law from its inception (void ab initio). Consequently, this then entails that neither party can sue to enforce performance or claim contractual damages, and any money or services exchanged must be reclaimed using enrichment remedies rather than contract law.

  • In answering this legal question the Honorable JA Unterhalter provided us with a distinction between an Unenforceable Contract and an Illegal Contract, wherein he pronounced that:

    • Unenforceable Contracts: Usually arise from a failure to comply with formal statutory requirements (such as missing signatures or procedural formalities). While a court cannot force performance under an unenforceable contract, it may apply the equitable rule in Wilken v Kohler. Under this rule, if both parties have already performed their obligations and achieved the purpose of the agreement, a court is not bound to reverse the completed result.

    • Illegal Contracts: Arise when an agreement involves conduct directly prohibited by law. An illegal contract is void ab initio (invalid from the very beginning). Crucially, because the underlying conduct is forbidden by statute, the equitable rule in Wilken v Kohler cannot be applied to save or leave undisturbed an illegal agreement. This answers Issue number 2.

  • So basically Because the essential terms of Millennium’s contract required it to render guarded security services for reward without statutory registration, those terms directly violated Section 20(1)(a)- which prohibits providing security services without registration in return for a reward, benefit or fee....

  • Consequently, the SCA confirmed that the agreement was strictly illegal and void ab initio. Millennium could not sue on the contract to collect its unpaid invoices for services physically delivered, and its claim was rightly dismissed

    
    

• Issue #3: As it relates to the question of whether Parliament intended for non-registration under Section 20(1)(a)—which is punishable as a criminal offence under Section 38(3)(a)—to carry civil illegality rather than mere unenforceability:

  • First in providing clarity to this legal issue, some briliant statutory interpretation was executed by the Judge. The Honorable Unterhalter first reasoned as the court that the existence of a criminal offence under Section 38(3)(a) does not exhaust the adverse consequences Parliament intended to impose on unregistered providers. Contractual invalidity acts as an additional, independent civil consequence. Second and importantly the court noted that the presence of criminal sanctions actually reinforces it. Unterhalter JA reasoned that it would be an obvious "oddity for Parliament to mark the gravity of contravention with the risk of significant punishment, but to treat the civil law consequences of invalidity with greater leniency" (such as treating it as a mere formal defect that leaves performance undisturbed). Thirdly on the pure reading of Section 20(1)(a) the court found that this provision lays down an absolute, peremptory statutory prohibition: no person may render security services for reward without registration. Because statutory registration serves a compelling public interest in overseeing a massive, powerful private security sector to ensure national safety, Parliament clearly intended "invalidity" under Section 20(3) to mean complete civil illegality( And this answer issue number 4).

  • Consequently, the Court ruled that Parliament intended for contracts concluded in violation of Section 20(1)(a) to be strictly illegal and void ab initio, rather than merely unenforceable

    
    

• Issue #5: Pertaining to whether the Cause of Action of Kapa's counterclaim was Condictio Indebiti(payment made under mistaken belief that it was due) or Condictio Ob Turpem Vel Iniustam Causam (An action for recovery on account of a disgraceful or unlawful cause):

  • The Supreme Court of Appeal (SCA) resolved this issue by holding that Kapa’s counterclaim must be characterized as the An action for recovery on account of a disgraceful or unlawful (cause condictio ob turpem vel iniustam causam), rather than the cause of action that payment made under mistaken belief that it was due (condictio indebiti). And here is why

  • Unterhalter JA grounded the Court's ruling as it pertains on the cause of action on the following:

    1. the Court noted that where performance occurs under a contract that is prohibited by law(as we have already established), the law does not recognize an illegal contract as conferring valid title. Therefore, whenever performance is reclaimed because of the underlying illegality of an agreement, the governing enrichment action is the condictio ob turpem vel iniustam causam- because you would be claiming on account of an unlawful agreement.

  • Why This Distinction Was Critical for the Court to Determine whether it was a claim under Debiti of Turpem Vel Iniustam?

    • The Court highlighted that choosing between these two actions is far from an exercise in "arcane formalism" because each action brings fundamentally different equitable rules into play:

    • If it were Condictio Indebiti: Millennium could potentially rely on the equitable rule in Wilken v Kohler as a defence. This rule allows a court to refrain from disturbing completed performances under an unenforceable contract if both parties performed and achieved the contract's purpose. But now

    • Because it is Condictio Ob Turpem Vel Iniustam Causam: The rule in Wilken v Kohler does not apply to illegal contracts. Instead, the claim is strictly governed by:

      1. The Par Delictum Rule: (In pari delicto potior est conditio possidentis) — where both parties are in the wrong regarding an illegal contract, the position of the possessor/recipient (Millennium) prevails- So the security company gets to keep all that money the client is trying to recover from them.

      2. As it pertains to the Par Delictum rule is noteworthy to know that there is a Judicial Discretion to Relax the Rule wherein the court may relax the par delictum rule to achieve justice and equity based on public policy, the parties' relative degree of fault, and whether a tender to return received benefits was made.

    • On conclusion regardint this issue the Court noted Honorable Schutz JA's past judicial observations in Perry and McCarthy Retail that the potential use of a general enrichment action would have avoided the defendant turned applicant being subjected to the fine technical distinctions between traditional condictiones. However, because no general enrichment action was pleaded or argued by counsel, the SCA held it had to decide the matter under the established rules of the condictio ob turpem vel iniustam causam

  • Issue #6: Whether the par delictum rule (Where both parties are equally at fault, the party in possession of the property or money is in the stronger position) should be relaxed in equity and public policy to prevent an injustice—specifically where Millennium physically rendered security services without turpitude, and Kapa accepted them without tendering any return of benefit.

    • the Supreme Court of Appeal (SCA) held that this question could not be decided on a sparse stated case and must be referred to a full trial for oral evidence. No oral evidence was ever led in this matter therefore, I would be nearly impossible for the court to do a value judgement without the whole picture being put forward.

    • Without oral evidence being led and scrutinized and tested the court could not investigate the parties' moral blamelessness, their state of mind when entering the agreement, their conduct once illegality was discovered, and whether Kapa was absolved from tendering a return of benefit. Such an investigation is required for the court to relax the rule that where a contract is illegal nothing can be claimed from an illegal contract.

      
      

• The SCA's Final Order

  Because these equitable questions require factual findings based on live witness testimony, the SCA held that the Magistrate and High Court erred in granting Kapa's counterclaim on a stated case.

  The SCA therefore:

  1. Upheld Millennium’s appeal with costs.

  2. Dismissed Millennium’s main claim for unpaid invoices (because the contract was illegal).

  3. Set aside the refund order granted to Kapa and referred Kapa's counterclaim back to the Magistrate's Court for trial to hear oral evidence on the relaxation of the par delictum rule and equitable adjustments

     
     

• The Impact of the Judgment on the Lived Realities of the People:

  On a positive note:

  • The ruling upholds public safety and constitutional rights by declaring contracts with unregistered security providers strictly illegal and void, compelling mandatory statutory compliance across the sector. Furthermore, by refusing to automatically order refunds on a stated case without full trial evidence, the Court protects service providers who physically rendered guard protection in good faith from being arbitrarily stripped of earnings.

On the negative side:

• It introduces commercial uncertainty for clients who cannot automatically recover past payments made under invalid agreements, while leaving unregistered security businesses with no legal mechanism to collect unpaid invoices for work already performed

Disclaimer: The views and analyses expressed on this blog are for informational and educational purposes only. This site serves as a self-guiding diary intended to facilitate my personal understanding of specific subjects and does not serve as an authoritative reference. Information is provided "as is" without any guarantees of completeness or accuracy. Please consult a local, professionally trained individual in the subject matter or you can conduct your own research for any formal inquiries or professional advice. PSA, dont corner an attorney at a Maza or a Braai on a weekend and consult there. Preferably arrange an appointment with the office