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[2020] ZAWCHC 99
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B Xulu & Partners Incorporated and Another v Department of Agriculture, Forestry and Fisheries and Another (6189/2019) [2020] ZAWCHC 99 (1 September 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
CASE
NO.: 6189/2019
Matter
heard on: 22
nd
, 23
rd
, 24
th
, 25
th
and 26
th
June 2020
Judgment
delivered on: 01 September 2020
In
the matters between:
SIPHOKAZI
NDUDANE
First intervening applicant
SENZENI
ZOKWANA
Second intervening applicant
And
In re: Rescission
Application
B
XULU & PARTNERS
INCORPORATED
First Applicant
BARNABAS
XULU
Second Applicant
And
THE
DEPARTMENT OF AGRICULTURE, FORESTRY
First Respondent
AND
FISHERIES
THE DEPARTMENT OF
ENVIRONMENTAL AFFAIRS,
Second Respondent
FORESTRY AND FISHERIES
JUDGMENT
SMITH J:
Introduction
[1]
On 30 January 2020, Rogers J delivered a judgment in terms of which
he,
inter alia
, declared invalid and set aside a Service Level
Agreement (SLA) and a settlement agreement purportedly concluded by
the Department
of Agriculture, Forestry and Fisheries (the DAFF) and
attorneys B Xulu and Partners Incorporated (BXI) on 23 May 2017 and
12 April
2019, respectively. He also set aside an order granted by
Steyn J on 6 June 2019, in terms of which the settlement agreement
was
made an order of court, as well as various warrants of execution
issued pursuant to that order. It is perhaps necessary to mention,
for completeness’ sake, that the parties in that application
were the DAFF (the first applicant); The Department of Environmental
Affairs, Forestry and Fisheries (the second applicant); BXI (the
first respondent); the Sheriff of the High Court for Pretoria
(the
second respondent), First National Bank of South Africa (third
respondent), and the Standard Bank of South Africa (the fourth
respondent). The apparent duplication in the citations of the first
and second applicants were brought about by the fact that the
second
applicant had been established as a separate department after a
re-organisation of portfolios during May 2019. Mr Barnabus
Xulu, a
legal practitioner and director of BXI, was also joined as the fifth
respondent and a rule nisi issued calling upon him
to show cause why
he should not be ordered to refund the money attached pursuant to the
invalid writs, jointly and severally with
BXI. The third and fourth
respondents did not oppose the application.
[2]
Rogers J’s judgment has precipitated a number of related
applications, three of which served before me during the week
of 22
June 2020; namely the intervention applications brought by Ms
Siphokazi Ndudane, the former Deputy Director-General of the
DAFF,
and Mr Zenzeni Zokwana, the former Minister of the Department. BXI
and Mr Xulu have also launched an application for the
rescission of
Rogers J’s judgment on the ground that the DAFF (in particular
the deponent to the main affidavit and Director-General
of the
department, Mr Mlengana) has deliberately and fraudulently withheld
from the court crucial and relevant information which
would have had
a significant impact on the learned judge’s findings. These
applications were launched under the same case
number and are closely
interrelated since in all three the main deponents make extensive
cross-references to allegations contained
in one another’s
founding affidavits. I have accordingly decided to deal with all
three applications in one judgment in order
to avoid unnecessary
repetition or prolixity.
[3]
There also remains to be heard an application for Rogers J’s
recusal and, in the event of the rescission application failing,
an
application for leave to appeal. It is my understanding that he
remains seized of those matters.
[4]
The events which preceded Rogers J’s judgment are the
following. The impugned SLA was concluded during May 2017,
approximately
a month after BXI was placed on the DAFF’s
supplier data base. Prior to this BXI were rendering legal services
to the DAFF
by virtue of the former’s relationship with Emang
Basadi Legal and Forensic Services. While the SLA provided that Ms
Ndudane
- having been defined as the “delegated authority”
- would act as the DAFF’s representative in all matters
pertaining
to the agreement, it ostensibly bore Mr Mlengana’s
signature. The agreement,
inter alia
, provided that BXI would
only accept instructions from Ms Ndudane and, furthermore, that fees
would be charged in US dollars.
[5]
On 15 August 2018, Mr Mlengana wrote to BXI terminating their
services with immediate effect, except in respect of instructions
to
represent the DAFF in a matter against one Mr Bengis. In the
meanwhile BXI had continued to demand that the DAFF pay their fees,
which according to them had by March 2019 accumulated to some 2.5
million US dollars.
[6]
The National Treasury thereafter became involved, and in an attempt
to resolve the impasse, it arranged a meeting on 28 March
2019, which
Ms Ndudane and Mr Mlengana also attended. It was at that meeting that
the DAFF orally agreed to pay R20 million to
BXI immediately, the
balance to be settled once the invoices had been validated. These
terms were communicated telephonically to
Mr Xulu who accepted them
on behalf of BXI. The next day, Mr Mlengana instructed a departmental
functionary, one Ms Parker, to
settle the account.
[7]
On 11 April 2019, however, the DAFF’s Chief Director: Financial
Management addressed a memorandum to Mr Mlengana expressing
the view
that BXI’s appointment did not comply with applicable supply
chain management procedures and that the payment to
them would
accordingly constitute irregular expenditure.
[8]
This memorandum was forwarded to Ms Ndudane on 11 April 2019 who
nevertheless, the following day, signed the impugned settlement
agreement on behalf of the DAFF. That agreement provided,
inter
alia
, that the sum of R20 million was payable immediately and
that BXI would approach the Western Cape High Court on an unopposed
basis
to have the agreement made an order of court.
[9]
BXI indeed wasted no time in approaching court to make the agreement
an order of court. On the same day that the agreement was
signed,
they launched the application which initially served before Goliath
J. She, however, did not grant the order but instead
directed that
the papers must be served on the State Attorney and various other
organs of state. She also required further affidavits
to be filed,
amongst others, by the Auditor-General and National Treasury,
confirming that they were aware of the application.
[10]
BXI, apparently being of the view that the directives issued by
Goliath J were unreasonably onerous, then complained to the
Judge
President. This prompted Goliath J to recuse herself. She instead
directed that the application should be enrolled for hearing
in the
ordinary course in the Third Division. The impugned order was
eventually granted by Steyn J on 6 June 2019.
[11]
BXI thereafter wrote to Mr Mlengana on the same day, demanding
payment of some R39 million, which they claimed was outstanding,
and
warning that if the money was not paid by the following day,
execution would be levied.
[12]
Mr Mlengana became aware of that letter when he was at the airport,
about to depart on an overseas holiday. He then telephoned
Mr Xulu,
reminded him about his undertaking to pay and requested him not to
proceed with the execution.
[13]
The writ of execution was nonetheless issued on 11 June 2019, and on
14 June 2019, after Mr Mlengana had returned from holiday,
Mr Xulu
again called him to discuss the issue of payment. Mr Mlengana again
asked him to wait until the following Monday. When
Mr Mlengana failed
to contact Mr Xulu as agreed, BXI proceeded to execute the writs.
[14]
On 19 June 2019, some R2.5 million in the DAFF Standard Bank account
was attached. That sum, less the sheriff charges, was
transferred to
the BXI trust account on 2 July 2019. A second writ was executed on
17 July 2019 and some R17, 6 million was attached
in the DAFF
Standard Bank account and paid to BXI by the sheriff on 1 August
2019. It is common cause that most of those funds
were transferred
from BXI’s trust account, and by 6 August 2019 only the sum of
R121 000 remained in their business account.
[15]
A third writ was issued on 13 July 2019, and on 17 July 2019 a sum of
R11. 4 million was attached in a different DAFF account.
Those funds
had, however, not been transferred to the BXI trust account.
[16]
When the State Attorney, acting on behalf of the DAFF, was unable to
extract an undertaking from Mr Xulu to the effect that
the funds
transferred to them would be retained in the BXI trust account
pending the resolution of the dispute, the DAFF launched
the urgent
application on 5 August 2019. The application was argued before
Rogers J on 12 and 13 December 2019, and as I have mentioned
earlier,
judgment was handed down on 30 January 2020. Also of significance is
the fact that both Ms Ndudane and Mr Zokwana had
filed affidavits in
support of the BXI’s case. I deal with the contents and
relevance of those affidavits below.
Rogers J’s
findings
[17]
In all three applications the parties have criticised Rogers J’s
reasoning and findings with unnecessary stridency and
rancour, and on
grounds which, in my view, are demonstrably unsustainable. Ms Ndudane
and Mr Zokwana in their intervention applications,
in particular, use
overly robust and acerbic language to attack those findings which
they claim impugn their good names and integrity.
It is indeed on the
basis of those assertions that they contend they have substantial and
direct interests in the matter. In order
to determine whether there
is any merit in these contentions, it was accordingly necessary for
me to consider the learned judge’s
reasoning and findings with
a degree of exactitude usually reserved only for judgments on appeal.
The following then is my understanding
of Rogers J’s reasoning
and findings.
[18]
The DAFF assailed the validity of the SLA on two grounds namely that:
(a)
it had not been duly signed on behalf of the DAFF. Although it
apparently bore Mr Mlengana’s signature, he denied that
he
knowingly signed the document. While admitting that he was in Cape
Town when the document was signed, he had no recollection
thereof,
and speculated that the last page (which was the only page that bore
his signature) must have been placed before him as
part of another
document; and
(b)
BXI had not been appointed in terms of a valid procurement procedure
pursuant to Section 217 of the Constitution and other applicable
legislation.
[19]
In respect of the first ground Rogers J, although having some
reservations about Mr Mlengana’s version, found that it
accorded with the probabilities. He found that since Mr Xulu and his
witnesses were not present (and thus unable to dispute Mr
Mlengana’s
version), and did not apply for leave to cross-examine Mr Mlengana,
he was constrained to accept the latter’s
version.
[20]
Regarding the second point, he found that BXI has neither been
appointed pursuant to a public procurement process, nor has
there
been compliance with Treasury Regulations permitting deviations or
emergency procurement. He accordingly found that the DAFF’s
conclusion of the SLA was unlawful.
[21]
Regarding the applicants’ contention that other mandates given
to BXI by Mr Zokwana in his capacity as Minister were
also unlawful
because they were also not issued pursuant to a proper procurement
procedure, Rogers J was of the view that such
relief had not been
foreshadowed in the notice of motion, and he was accordingly
precluded from pronouncing on that issue.
[22]
The applicants challenged the settlement agreement on the following
grounds:
(a)
Ms Ndudane did not have the requisite authority to conclude the
agreement on behalf of the DAFF. The nature of the contract
did not
fall within the ambit of her delegated powers, and even if the oral
agreement concluded on 28 March 2019 gave rise to a
binding
agreement, the parties did not agree to the conclusion of the
settlement agreement. Furthermore, the settlement agreement,
in any
event, contained terms which had not been envisaged by the oral
agreement and which had not been approved by the Director-General;
and
(b)
if the SLA were invalid for any one or more of the reasons advanced
by the DAFF, then the settlement agreement would
ipso facto
also
be unlawful since it purported to acknowledge that BXI were owed
money in terms of an invalid agreement.
[23]
Rogers J upheld the first point and found that Ms Ndudane’s
purported conclusion of the agreement was
ultra vires
and
unlawful.
[24]
Regarding the second point, he found that since he was precluded from
ruling on the validity of additional mandates given to
BXI by Mr
Zokwana, he was also unable to conclude that there were no valid
mandates that could have been the subject of a settlement
agreement.
[25]
The applicants also sought an order rescinding Steyn J’s order
on the following grounds:
(a)
the settlement agreement was invalid and could hence not be made an
order of court; and
(b)
BXI was in any event not entitled to have the settlement agreement
made an order of court since there was no
lis
between the
parties. In this regard reliance was placed on
Eke v Parsons
2016
(3) SA 37
(CC), at para. 25, where the Constitutional Court held that
parties contracting outside of the context of litigation are not
entitled
to apply for such an agreement to be made an order of court.
[26]
Regarding the first point, Rogers J held that since the DAFF was not
represented in court when the order was granted and Ms
Ndudane did
not have the requisite authority to represent the DAFF, the order may
be rescinded in terms of Uniform Court Rule 42(1)
(a).
[27]
The learned judge also upheld the second point. While accepting that
the dictum in
Eke
was obiter since that case did not deal with
a settlement agreement concluded outside of litigation, he surveyed a
plethora of cases
where the same principle was confirmed. He
accordingly found that the order also fell within the ambit of Rule
42(1) (a), since
the court lacked the necessary legal competence to
grant it.
[28]
BXI also asked Rogers J to exercise his just and equitable discretion
in terms of section 172 (1) (b) of the constitution not
to set aside
the agreements in the event of him finding that they had not been
validly concluded. In terms of that section a court
has a discretion
not to set aside conduct which it found to be unconstitutional but,
in appropriate circumstances, to make any
order which is just and
equitable. In this regard they relied on the Constitutional Court
judgments in
State Information Technology Agency Soc Ltd v Gijima
Holdings (Pty) Ltd
2018 (2) SA 23
(CC) and
Buffalo City
Metropolitan Municipality v Asla Construction (Pty) Ltd
2019
(4) SA 331
(CC). In considering whether to grant the type of
equitable relief fashioned by the Constitutional Court in those
cases, the learned
judge took into account that in
Gijima
the
service provider was at pains to extract an assurance from the State
Information Technology Agency to the effect that proper
procedures
had been followed, and in
Buffalo City
the same official who
had granted an extension of the contract later reneged on it and
purported to terminate the contract on the
basis of its contended
unlawfulness. The learned judge then distinguished the facts of those
cases and found that BXI was the author
of their own misfortune since
they did not make any attempt to ascertain whether proper procurement
procedures had been followed
in their appointment. In refusing the
type of relief granted in the abovementioned cases, Rogers J also
considered that BXI may
have a claim based on unjust enrichment, that
he could not exclude the possibility that the latter may well be able
to assert an
oral settlement agreement, and that the DAFF had agreed
to a process of verification and appeared to be open to the
possibility
that BXI may have rendered services of value and for
which they may be entitled to payment.
[29]
Although he found that Mr Mlengana did not wittingly conclude the
SLA, he criticised him for having vacillated regarding the
question
of payment to BXI and for not taking any action immediately after
becoming aware of the conclusion of the settlement agreement
and the
application to make it an order of court.
Application to strike
out
[30]
The DAFF has delivered notices in terms of Rule 23 (2) to strike out
the following portions of the applicants’ affidavits;
(a)
reliance by Ms Ndudane on the factual and legal findings of the
Public Service Commission (PSC) in its report of 7 November
2019,
contained in paragraphs 39; 40; 41; 45; 46; 48; 53; 54 and 55 of her
affidavit, on the basis that it amounts to inadmissible
hearsay
evidence;
(b)
Mr Zokwana’s reliance on the PSC report contained in paragraphs
12; 35; 119 to 120; 144; 149 to150; 153; 161; 173 to 177;
179; 183
to185; 187 to 190; 262 and 265;
(c)
Vexatious, scandalous and irrelevant matter contained in paragraphs
219 to 236 of Mr Zokwana’s affidavit, the first sentences
of
paragraphs 267 and 268, paragraphs 247 and 248, 260, 263 and 265 to
266, to the extent that unwarranted references are made
to Minister
Creecy; and
(d)
Mr Xulu’s further “Supplementary affidavit”, dated
5 June 2020 in its entirety, alternatively all offensive
and
irrelevant references to Mr Creecy.
[31]
Regarding the PSC report, the DAFF contended that its contents do not
constitute evidence in court, neither are the findings
contained
therein binding on a court of law. It therefore constitutes
inadmissible opinion evidence of another tribunal.
(Hollington v
Hewthorn and Co Ltd
[1943] 2 All ER 35
;
Hassim v Incorporated
Law Society of Natal
1977 (2) SA 575
(A), at 764E-765E; and
Prophet v National Director, Public Prosecutions
2007 (6) SA
169
(CC), at para. [42])
[32]
The legal principle enunciated in the aforementioned cases is to the
effect that any findings of another court, tribunal or
commission
cannot be used in subsequent civil proceedings because they amount to
hearsay and opinion evidence. The DAFF contends
that all references
to the PSC report in Ms Ndudane’s and Mr Zokwana’s
affidavits consequently amount to inadmissible
hearsay and opinion
evidence and fall to be struck out as such.
[33]
Mr
Joseph
SC, who together, with Mr
Bawa
SC and Ms
Williams,
appeared on behalf of the DAFF, argued that since
the PSC is a Chapter 10 as supposed to Chapter 9 institution, its
findings were
not binding on the court. He submitted that the report
is in any event subject to review proceedings in the Pretoria High
Court.
[34]
The PSC report was put up by Ms Ndudane and Mr Zokwana because they
believed that the factual findings contained therein were
binding on
Rogers J. Thus if he had regard to the contents of the report before
writing his judgment - so it was contended - it
would have had a
substantial impact on certain of his crucial findings. Mr
Masuku
SC, who appeared on their behalf, has, however, not been able to
cite any authority in support of this contention.
[35]
I agree with Mr
Joseph’s
submission that the findings of
the PSC report were not binding on Rogers J, and that those findings
consequently constitute no
more than evidence of the opinion of a
different tribunal. They thus amount to inadmissible opinion and
hearsay evidence.
[36]
The applicants have also made no attempt to show that the admission
of the report will be in the interests of justice notwithstanding
the
fact that it amounts to hearsay evidence.
[37]
The report, and any reliance placed on it in either Ms Ndudane’s
or Mr Zokwana’s affidavits, accordingly fall to
be struck out.
[38]
Regarding the references to Minister Creecy in Mr Zokwane’s and
Ms Ndudane’s affidavits, I agree with Ms
Joseph
that
these are vexatious, scandalous and disparaging of Ms Creecy. They
are little more than gratuitous insults directed at Ms Creecy’s
competence and work ethic. The impugned portions of the affidavits
are too numerous for me to mention them all. Suffice it to say
that I
have considered all of them and I am satisfied that there can be
little doubt that those comments, made in the context of
peripheral
issues, are manifestly scandalous and vexatious and fall to be struck
out as such.
[39]
However, the application to strike out Mr Xulu’s further
supplementary affidavit cannot be upheld. Mr
Bridgman
, who
together with Ms
Smart
appeared on Mr Xulu’s and BXI”s
behalf, has pointed out that the affidavit was filed in response to
the intervention
applications and was not intended as a further
affidavit in the BXI rescission application. I understood Mr
Joseph
to have accepted that BXI was indeed entitled to file the
affidavit in respect of the intervention application. That affidavit
must
accordingly be allowed to stand. However, all references to Ms
Creecy in that affidavit of the nature that I have described above
must be struck out for the same reasons.
The intervention
applications
[40]
Ms Ndudane and Mr Zokwana both seek orders allowing them to join in
the main application and rescinding and setting aside Rogers
J’s
judgment. The affidavits filed in support of their applications are
quite lengthy, that of Ms Ndudane some 62 pages and
that of Mr
Zokwana more than 120 pages.
[41]
Their founding affidavits make for difficult reading, not so much
because of their prolixity, but rather because of their ponderous
and
argumentative tone. In addition, they are littered with extensive and
unnecessary references to, and quotations from case law.
In my view
this practice must be discouraged. Affidavits are supposed to contain
factual allegations only, and in the limited instances
where it may
be necessary to refer to statutory provisions or decided cases, it
should be kept to an absolute minimum, and certainly
not to the
extent that it takes the place of heads of argument. I was rather
surprised that the respondents did not make more out
of this issue,
but one can perhaps understand that when a litigant has been swamped
by an avalanche of disputations regarding peripheral
issues, battle
weariness must inevitably set in and the desire simply “to get
on with it” may dominate.
[42]
Nevertheless, needs must, and I was consequently constrained to wade
through mountains of unnecessary (and often toxic) verbiage
to
discern the relevant contentions. The following then is my
understanding of the alleged factual bases on which the relief is
sought.
[43]
Ms Ndudane asserts that she was suspended because she deposed to an
affidavit in the main application confirming that a valid
and binding
decision had been taken to pay BXI.
[44]
She also contends that the adverse findings in Rogers J’s
judgment caused her prospective employer, namely the Department
of
Rural Development and Agrarian Reform, Eastern Cape, to withdraw an
offer of employment. The judgment makes far-reaching and
serious
findings against her, without her having been heard. Her
constitutional rights have thus been prejudiced. The judgment
has
also not been based on the true facts, which she now seeks to put
before court.
[45]
She contends furthermore that if she had been cited as a party in the
proceedings (as opposed merely to being a witness), she
would have
been able to “give the matter adequate attention by giving the
court the incontrovertible evidence” regarding
the transactions
in dispute. When she first deposed to her initial affidavit, she had
mistakenly believed that the contents were
“sufficient to
address the issue of authority and lawfulness” of her actions.
She claims that Mr Mlengana has deliberately
withheld relevant
information from the court and that her suspension was a ploy to
prevent her from further supplementing her initial
affidavit. The
reason for her intended intervention is thus to place correct
information before the court.
[46]
In respect of her contention that Mr Mlengana had deliberately
withheld documents from the court which contradict averments
made in
his affidavit, she intends to introduce voice recordings, emails and
transcripts of discussions, which she claims further
expose false
representations made by Mr Mlengana.
[47]
Regarding her interest in the proceedings, she states that as a
government official whose integrity had been questioned by
the court
“based on demonstrable falsehoods”, she has a direct and
substantial interest both in the order granted by
Rogers J, as well
as his reasoning. Her dignity, good name, reputation, and ability to
obtain employment, are substantial and legally
recognisable
interests, worthy of constitutional protection. These interests have
been compromised as a result of findings made
by Rogers J, which in
turn were based on the false evidence presented by Mr Mlengana.
[48]
Ms Ndudane avers that Mr Mlengana has deliberately and fraudulently
withheld the following evidence from the court:
(a)
a bundle of documents which include his application and motivation
for a deviation in respect of the appointment of Emang Basadi
to
provide legal and other related services to the DAFF. These documents
were relevant to the issue as to whether proper procurement
procedures had been followed. She contends that the court may well
have found differently if those documents had been placed before
it;
(b)
the report of the PSC dated 7 November 2019. This report, Ms Ndudane
contends, evinces that Rogers J’s finding regarding
the issue
of the procurement process was erroneous since the PSC had found that
the National Treasury had granted approval for
the deviation to
appoint Emang Basadi. The report also lends credence to Mr Zokwana’s
reservations about the efficacy of
the State Attorney. She
furthermore contends that the findings of the PSC are binding on the
court and Rogers J should have taken
judicial notice of it. The fact
that the court did not have the PSC report before it meant that it
overlooked the fact that Mlengana
was “personally conflicted”
and implicated in malfeasance and improper conduct which had been
investigated by BXI,
the PSC and the National Prosecuting Authority.
She claims that those findings lend credence to her contention that
Mr Mlengana
deliberately withheld documents and had contrived to
mislead the court;
(c)
audio recordings of conversations between her and Mr Mlengana, which
clearly show that he had instructed her regarding the contents
of the
document she drafted on 16 April 2019 (the settlement agreement), and
that he had accepted that the DAFF was obligated to
pay BXI. She
claims that the recordings provide incontrovertible evidence that she
had carried out Mr Mlengana’s instructions
in negotiating with
BXI, as well as in respect of the subsequent conclusion of the
settlement agreement; and
(d)
proof that Mr Mlengana had been aware of the engagement of BXI,
including the conclusion of the settlement agreement and had
dictated
the terms of the settlement agreement to her after considering a
draft. He also dictated a specific term to the effect
that BXI should
be required to pay back any overpayments within 30 days.
[49]
She also makes reference to a matter involving the World Wildlife
Fund in which Mr Mlengana is alleged to have filed an affidavit
by a
newly appointed functionary with no direct knowledge of the matter
after her suspension. He subsequently ordered her to attend
a
consultation with counsel in respect of that matter, but had imposed
unreasonable conditions which had made it virtually impossible
for
her to comply with that order. Mr Mlengana had also declared that she
would remain on suspension and denied her access to official
documents. This resulted in adverse comments regarding her
willingness to be of assistance.
[50]
Mr Zokwana wishes to intervene in the proceedings because he feels
duty bound to expose the misrepresentations and “outright
lies”
which formed the bases on which the order was granted. He thus wants
to “set the record straight” since
the judgment was based
on a false factual premise casting “unfortunate and
unjustified” aspersions on him, and on “the
basis of a
one sided version” proffered by Mr Mlengana. This was done
without any regard for his basic rights to due process
and to be
treated fairly.
[51]
He contends that as a former Minister whose decisions and conduct
were the subject matter of court proceedings, he was entitled
to be
joined as a party. He says furthermore that the court was not
entitled (in his absence) to make conclusions that impugn decisions
taken by him in his capacity as Minister. His good name, reputation,
and ability to obtain employment have been adversely affected
by Mr
Mlengana’s false statements and the adverse findings made by
the Rogers J on the basis of those statements. He also
avers that his
rights have been infringed by Mr Mlengana who deliberately withheld
the information mentioned by Ms Ndudane in her
affidavit. That
evidence was pertinent to issues which fell for determination in the
case.
[52]
Mr Zokwana also claims that Mr Mlengana has portrayed him as a
participant in corrupt activities and of promoting factionalism
and
enrichment schemes for individuals, in particular Mr Xulu. He is
aggrieved by the court’s “unjustified findings”,
including findings that he is corrupt, that he was guilty of
favouritism, and had retaliated against senior officials for doing
their jobs. All these “serious and adverse findings” were
made without giving him an opportunity to be heard. If he
had been
given the opportunity, he would have apprised the court of Mr Xulu’s
specialist skills and experience as a lawyer,
as well as the
circumstances of his appointment.
[53]
As I have mentioned earlier, Ms Ndudane and Mr Zokwana both filed
affidavits in support of BXI’s case in the main application.
Ms
Ndudane’s affidavit was quite comprehensive, comprising some 16
pages and 54 paragraphs dealing,
inter alia
, with the
circumstances of BXI’s appointment, Mr Mlengana’s alleged
knowledge of the settlement agreement, and the
former’s
entitlement to payment.
[54]
In his supporting affidavit Mr Zokwana stated that he was aware of
the “unfounded allegations” which attacked his
integrity
as former Minister. He also reserved his right to deal with those
allegations in the appropriate forum. He furthermore
explained his
understanding of the events that led to the dispute regarding
payments due to BXI and the mandates which he had given
to BXI in
respect of various matters.
[55]
What is undeniably evident from those affidavits is that both Ms
Ndudane and Mr Zokwana were aware of the factual bases on
which DAFF
contended that the SLA and settlement agreement were invalid, as well
as the supporting facts averred by Mr Mlengana.
Their affidavits were
not the usual terse confirmations of allegations contained in the
founding affidavit, but rather detailed
traversals of averments in
the affidavits filed by the DAFF and with which they had joined
issue.
The legal principles
[56]
In terms of Uniform Court Rule 12, a person wishing to intervene in
legal proceedings must show that his or her rights are
likely to be
adversely affected by the order sought, and that he or she
consequently has a direct and substantial interest in the
matter. The
test being whether he or she has a legal interest “which may be
affected prejudicially by the judgment of the
court in the
proceedings concerned”, in the sense that the order cannot be
given effect to without “profoundly and
substantially affecting
his or her rights”. (
Gordon v The Department of Health,
Kwazulu Natal
[2008] ZASCA 99
;
2008 (6) SA 522
(SCA), at para. 9)
[57]
It is not sufficient for a party to show that the reasoning in the
judgment casts aspersions on his or her character. What
must be shown
is a direct and substantial interest in the outcome of the
litigation. In
National Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA), the Supreme Court of Appeal, while
accepting that the applicants had ample cause to be aggrieved by
reasons in the judgment
which cast aspersions on them, it was not
sufficient to clothe them with the requisite direct and substantial
interest, since their
interest was only in the reasoning and not in
the order. The court found that they were consequently “in the
position of
a witness whose evidence has been rejected or on whose
demeanour an unfavourable finding has been expressed” and that,
“[S]uch
a person has no ready remedy, especially not by means
of intervention. To be able to intervene in an appeal, which is by
its nature
directed at a wrong order and not at incorrect reasoning,
an applicant must have an interest in the order under appeal”.
Discussion:
Intervention applications
[58]
As must no doubt have been evident from the above, the applicants’
main purpose for their desire to intervene in the
proceedings is that
their dignities, good names, professional standings, and employment
prospects have been negatively impacted
by Rogers J’s findings.
[59]
They consequently contended that the learned judge has made serious
and far-reaching findings that they were complicit in malfeasance,
corruption and promotion of factionalism within the department. They
assert that it is accordingly imperative that they be allowed
to
intervene in order “to set the record straight”.
[60]
They say that they will do so by introducing new evidence which Mr
Mlengana has deliberately and fraudulently withheld from
the court.
This evidence, they contend, if it had been before Rogers J, would
have had a major impact on his findings, in particular
relating to
the validity of the SLA and the settlement agreement.
[61]
The insurmountable difficulty that they face, however, is that those
issues, namely the validity of the settlement agreement
and SLA, are
no longer part of the
lis
between the DAFF and BXI.
[62]
In his heads of argument in the rescission application, Mr
Bridgman
made it clear that BXI and Mr Xulu concede that proper
procurement procedures had not been followed and that the former’s
purported appointment.
[63]
Relying on Ms Ndudane and Mr Zokwana’s affidavits in the
intervention application, Mr
Bridgman
submitted that Mr
Mlengana’s fraudulent concealment of the evidence nevertheless
means that no reliance can be placed on his
evidence and that the
matter should be referred for oral evidence. He argued that despite
the abovementioned concession, the concealed
evidence would still
have been relevant to the exercise of Rogers J’s just and
equitable jurisdiction and that if the new
evidence mentioned by Ms
Ndudane and Mr Zokwana had been placed before Rogers J, he may well
have had a different view regarding
that issue.
[64]
During the course of argument I have invited
Mr Bridgman
to
confirm that the concession meant that BXI accepts that the SLA and
settlement agreement were invalid. He confirmed that that
was indeed
the case, but was at pains to state that BXI and Mr Xulu did not also
concede that mandates given to them by Mr Zokwana
were similarly
unlawful. As mentioned earlier, Rogers J did in any event not make
any findings regarding the validity of those
mandates.
[65]
The upshot of this concession by BXI and Mr Xulu is that regardless
of whether they succeed with the rescission application
or the matter
goes on appeal, the only issue that will remain extant is the
question as to whether Rogers J properly exercised
his just and
equitable discretion. And it is not clear on what conceivable basis
Ms Ndudane and Mr Zokwana contend that they have
direct and
substantial interests in the outcome of the latter dispute.
[66]
In essence then Ms Ndudane and Mr Zokwana wish to intervene in order
to introduce new evidence regarding issues which no longer
form part
of the
lis
between the parties in the main application. The
effect of allowing them to intervene on this basis would entail that
either the
court
a quo
(if the judgment is rescinded) or the
court of appeal, will be required to resolve factual disputes for no
other reason than to
vindicate their good names and dignities. It is
manifest that, regard being had to the principles enunciated in the
abovementioned
cases, this does not constitute a direct and
substantial interest in the matter.
[67]
In the event, in my view their contentions regarding imputations of
corruption and malfeasance are mainly based on allegations
contained
in Mr Mlengana’s affidavits. A closer scrutiny of those
portions of the judgment which appeared to have aroused
their ire,
evinces that the contended construction is simply not justified, and
one scours the judgment in vain for any findings
of corruption or
malfeasance against either of them. I need to mention only a few of
the alleged offensive comments to demonstrate
the soundness of this
observation.
[68]
In paragraph 11 of his judgment Rogers J said the following: “In
the meanwhile Minister Zokwana was promoting BXI’s
engagement
to assist in the DAFF’s litigation against Arnold Bengis and
others”. This statement was pounced upon by
Mr Zokwana and held
out as an example of a finding that he had irregularly advanced BXI’s
case at the expense of the State
Attorney’s Office.
[69]
Mr
Masuku
was, however, unable to explain why that statement
should be accorded a pejorative construction of the nature contended
for by Mr
Zokwana, especially in the light of the fact that Mr
Zokwana had, by his own admission, praised the exceptional legal
skills of
Mr Xulu and explained very eloquently why he regarded the
State Attorney’s Office as unfit to represent the DAFF in the
relevant
matters. He has done so in both his supporting affidavit
filed in the main application, as well as in his founding affidavit
in
this application. Thus, apart from the fact that the statement
simply does not lend itself to the contended construction, it was
also, in the context of the evidence before Rogers J, a warranted
observation.
[70]
In paragraph 36 of his judgment Rogers J, when dealing with the issue
of Mr Mlengana’s suspension, said the following:
“Mr
Mlengana’s view is that they were trumped up [the charges
against him] because he intended to take action against
Ms Ndudane.”
This statement was also held out by the applicants as an example of
the court finding that they unlawfully conspired
against Mr Mlengana
and had abused their powers. There can, however, be little doubt that
Rogers J did no more than summarise Mr
Mlengana’s allegations.
Since this was a peripheral issue there was no need for the learned
judge to make a finding in that
regard, and in the event, there is no
indication in the judgment that he did in fact make such a finding.
[71]
Similarly, when dealing with the circumstances of Ms Ndudane’s
suspension and the alleged role of Mr Zokwana, the learned
judge did
no more than summarise the respective versions of the parties. Ms
Ndudane and Mr Zokwana have nevertheless also unfairly
latched onto
those portions of the judgment as examples of findings impacting
negatively on their good names and dignities.
[72]
I do not intend to deal with each and every contended cause of
complaint raised by Ms Ndudane and Mr Zokwana, for indeed they
are
too numerous. Suffice it to say that I have traversed the judgment
and have been unable to find any justification for their
complaint
that Rogers J has made unsubstantiated findings of corruption or
malfeasance against them.
[73]
Properly analysed then, Ms Ndudane and Mr Zokwana’s fight is
really with Mr Mlengana, insofar as he may have made any
such
allegations in his affidavits. Viewed through this prism, their
purpose for intervention does not relate to the issues which
form
part of the
lis
between the parties in the main application,
neither to findings made by Rogers J, nor for that matter, to his
reasoning.
[74]
They both also seek an order rescinding the judgment on the basis
that Mr Mlengana has fraudulently withheld or concealed evidence.
Although it is strictly speaking not necessary for me to deal with
these contentions in the light of my finding that they had been
unable to establish a direct and substantial interest in the
litigation, I nevertheless choose do so since these issues are
closely
related to contentions advanced by BXI and Mr Xulu in their
rescission application.
[75]
Ms
Bawa
has meticulously, and with reference to the papers in
the main application, demonstrated that most, if not all, of the
issues raised
by them were in fact before Rogers J.
[76]
She correctly referred to the fact that both Mr Zokwana and Ms
Ndudane have filed comprehensive supporting affidavits in the
main
application, and that Ms Ndudane, in particular, has mentioned in her
supporting affidavit that she was in possession of the
audio tapes
and had offered to make them available to the court.
[77]
The fact that certain aspects of the dispute had been referred to the
PSC had also been disclosed, and Rogers J made fleeting
reference
thereto in his judgment. The final PSC report, on which they have
placed heavy reliance, only became available during
November 2019,
before the matter was argued. There was no explanation as to why, if
BXI were of the view that it was germane to
the issues before Rogers
J, they did not take any steps to bring it to his attention.
[78]
Ms
Bawa
has also correctly submitted that the so-called new
evidence relating to the lawfulness of the Emang Basadi appointment
has no relevance
in the determination of the validity of the SLA and
the settlement agreement concluded between BXI and the DAFF. There
can be little
doubt that the appointment of Emang Basadi was raised
in the papers merely by way of background, since it preceded BXI’s
appointment. Rogers J was accordingly not called upon to pronounce on
the validity of that appointment.
[79]
Ms
Bawa
also pointed out that the letter from the National
Treasury, dated 29 August 2016, on which Ms Ndudane has placed some
considerable
reliance, was also referred to extensively in the report
of the Auditor-General which was annexed to an affidavit filed by Mr
Mlengana
in the main application. It accordingly does not constitute
new evidence and there can be no question of Mr Mlengana having
deliberately
withheld the information. In the event, if there were
any further related documents in either Ms Ndudane or Mr Xulu’s
possession
which they considered to be relevant, they were at liberty
to introduce them into evidence. The DAFF and Mr Mlengana were
constrained
to put documentary evidence before the court which in
their view were relevant to the issues falling for decision. The fact
that
there may have been other related documents which they regarded
as irrelevant cannot on its own give rise to an inference that they
have deliberately and fraudulently concealed them from the court.
[80]
In addition, other issues raised by Mr Zokwana namely,
inter alia
,
his reliance on
Section 64
of the
Public Finance Management Act, No.
1 of 1999
, the details of his relationship with Mr Mlengana, the
allegations relating to attempts to prevent him from taking steps
against
Ms Ndudane, as well as the allegations of insubordination on
the part of Mr Mlengana, were all before Rogers J.
[81]
I am accordingly of the view that Ms Ndudane and Mr Zokwana have
failed to establish direct and substantial interests in the
proceedings. They also failed to establish that the DAFF or Mr
Mlengana has deliberately and fraudulently withheld relevant evidence
with the intention of misleading the court. Their applications
accordingly fall to be dismissed with costs.
[82]
Ms
Bawa
has asked for a punitive costs order, including the
costs occasioned by the employment of three counsel. I am, however,
of the view
that there are insufficient grounds for a punitive costs
order. Although I am of the view that the applications were
ill-advised,
I am not convinced that they were frivolous. However, in
the light of the considerable volume of paper filed of record and the
complicated nature of the issues which fell for decision, I am
satisfied that the employment of three counsel was fully justified.
The BXI rescission
application
[83]
BXI and Mr Xulu seek an order rescinding Rogers J’s judgment on
grounds of fraud, misrepresentation, failure to disclose
material
facts, and non-disclosure of a complete record.
[84]
For these assertions they rely on the allegations contained in the
affidavits of Ms Ndudane and Mr Zokwana filed in their applications
for intervention. They also contend that the new evidence mentioned
in those affidavits were deliberately and fraudulently withheld
and
concealed by Mr Mlengana, with the intention of misleading the court.
They assert that the new evidence, if Rogers J had been
aware of it,
would have impacted significantly on his findings.
[85]
Ms
Bawa
criticized Mr Xulu’s founding affidavit for
merely purporting to incorporate Ms Ndudane’s affidavit by
reference without
specifying which portions of the affidavit he
relied upon. I do not think that this criticism is entirely
justified. I am satisfied
that on a reasonable and proper reading of
Mr Xulu’s affidavit, it is sufficiently clear which portions of
Ms Ndudane’s
affidavit he relied upon.
[86]
Since BXI and Mr Xulu conceded that the former’s appointment
had not been effected in accordance with fair and transparent
procurement procedures, and that Rogers J’s findings regarding
the validity of the SLA and the settlement agreements thus
remain
undisturbed, they contend that the new evidence would have been
relevant for the exercise of his discretion regarding a
just
equitable remedy.
[87]
They also support Ms Ndudane’s and Mr Zokwana’s
contentions that the matter should be referred for oral evidence.
They assert that since Rogers J’s judgment is premised on “a
seemingly corrupt relationship between Ms Ndudane and
BXI” the
new evidence disclosed in the intervention applications establishes
that that was an incorrect finding and that
Mr Mlengana was in fact
the corrupt one. They say, furthermore, that the factual disputes
regarding the award of a contract to
Willjaro (Pty) Ltd to sell
confiscated abalone, can also only be resolved through the hearing of
oral evidence.
[88]
They assert that documents introduced by Ms Ndudane and Mr Zokwana in
the intervention applications establish,
inter alia
, that DAFF
did in fact not have any confidence in the office of the State
Attorney to represent them adequately in the relevant
matters. If
this information had been placed before Rogers J, he would not have
found that “the Zokwana faction” undermined
the State
Attorney’s office “so as to enable private firms to
extract excessive fees from the Department.” This
assertion is,
however, manifestly misplaced since Rogers J made that comment in
respect of the Memorandum of Understanding in terms
of which Emang
Basadi was appointed and, in any event, stated unequivocally that the
contention was proffered by the DAFF’s.
[89]
They claim furthermore that the new evidence also establishes that
authorisation for a deviation in respect of Emang Basadi’s
appointment had in fact been sought and obtained by Mr Mlengana. The
latter has, however, failed to put this evidence before court.
[90]
They also contend that Mr Mlengana’s assertion that he could
not remember signing the SLA and his intimation that his
signature
could only have been fraudulently obtained, has now been put into
different perspective by Mr Zokwana’s disclosure
that he, based
on Mr Mlengana’s advice, had assured parliament that BXI had
been validly appointed and had been duly paid
for all services
rendered. If this fact had been placed before Rogers J, he would not
have been inclined to accept Mr Mlengana’s
version regarding
the circumstances under which the SLA was signed. BXI and Mr Xulu did
not know about this evidence. Mr Mlengana
on the other hand, was
fully aware of it at all relevant times, yet deposed to an affidavit
which contained allegations incompatible
with it. Mr Mlengana’s
evidence can thus not be relied upon, and the only way in which the
court can arrive at a judicially
defensible finding in this regard is
through
viva voce
evidence.
[91]
They contend that the evidence which Mr Mlengana has fraudulently
contrived to conceal from the court would have had a significant
impact on the manner in which Rogers J exercised his discretion in
terms of Section 172 (1) (b) of the Constitution. Furthermore,
the
concealed evidence may well also have impacted on the learned judge’s
decision regarding the contended delay on the part
of the DAFF in
bringing the application proceedings to set aside the SLA.
Discussion: BXI
rescission application
[92]
It is a fundamental principle of our law that a final judgment is
res
judicata
and will not lightly be set aside. Thus in order to
succeed with the application for rescission of the judgment on the
ground of
fraud, BXI and Mr Xulu must show that: (a) the application
is not frivolous; (b) the allegations on which they rely constitute a
prima facie
defence; (c) DAFF or Mr Mlengana was party to the
fraudulent withholding of evidence and documents with the intention
of misleading
the court; (d) the allegations contained in Mr
Mlengana’s affidavits were false and were presented with the
intent to mislead
the court; and (e) if the true facts had been
before Rogers J, he would have found differently. (
Minister of
Local Government and Land Tenure and Another v Sizwe Development and
Others: In re Sizwe Development v Flagstaff Municipality
1991 (1)
677 (TK) 678-679)
[93]
Ms
Bawa
has correctly submitted that it is not clear from Mr
Xulu’s affidavit exactly what fraudulent conduct is complained
of. It
appears that at best for BXI and Mr Xulu, it can be accepted
that the contention is that the non-disclosure of the new evidence
mentioned by Ms Mdudane and Mr Zokwana, warrants the inference that
he did so deliberately and fraudulently and with the intention
to
mislead the court. Yet, it is manifest that the contended new
evidence was in any event not relevant to the core issues which
Rogers J was called upon to decide, namely the validity of the SLA
and the settlement agreement. This is incontrovertibly evident
from
the fact that they have conceded that those transactions were
vitiated by a failure to comply with the applicable procurement
procedures.
[94]
Insofar as BXI and Mr Xulu contend that the new evidence would have
been relevant to the exercise of Rogers J’s just
and equitable
discretion, it was incumbent on them to ensure that all relevant
facts were placed before the court. As mentioned
earlier, both Ms
Ndudane and Mr Zokwana have filed relatively comprehensive affidavits
in the main application. There have not
been acceptable explanations
from either of them why the contended new evidence could not have
been placed before the court at
the appropriate time. They have also
failed to establish that DAFF or Mr Mlengana has deliberately and
fraudulently withheld relevant
evidence from Rogers J and that the
contended new evidence, if it had been before Rogers J, would have
made any difference to his
reasoning.
[95]
And as I have mentioned earlier, most, if not all, of the contended
new evidence was before Rogers J, in any event. I am also
not
convinced that Ms Ndudane’s and Mr Zokana’s contentions
in respect of the purported new evidence would have made
any
difference to Rogers J’s reasoning or findings in the exercise
of his just and equitable discretion. The learned judge
gave
extensive reasons for his decision in respect of this issue, and it
is evident from his judgment that he was not uncritical
of Mr
Mlengana’s conduct. As mentioned earlier, he criticised the
former for failing to take immediate steps to challenge
the validity
of the impugned agreements and for his equivocal conduct regarding
the issue of payment to BXI. He nevertheless found
that those
considerations did not impact the issues which fell for decision. I
have no doubt that BXI and Mr Xulu will in due course
endeavour to
persuade Rogers J that there are reasonable prospects of another
court finding that he did not accord those factors
sufficient weight
in the exercise of his just and equitable discretion. But that is a
matter for another time and place, and one
that does not concern me
here.
[96]
Properly considered then, all the points raised by BXI and Mr Xulu in
the rescission applications are issues which should be
the subject of
an appeal. If they are indeed of the view that there is additional
evidence that may be relevant for the exercise
of a just and
equitable discretion in terms of section 172 of the Constitution,
they are at liberty to apply in due course for
leave to introduce
such new evidence in the event of the matter going on appeal.
[97]
I am therefore of the view that they have failed to establish a
proper case for rescission, and that application must accordingly
also fail.
Orders
[98]
In the result the following orders issue:
(a)
Ms Ndudane’s intervention application
The
application is dismissed with costs, including the costs of three
counsel.
(b)
Mr Zokwana’s intervention application
The
application is dismissed with costs, including the costs of three
counsel.
(c)
The BXI rescission application
The
application is dismissed with costs, including the costs of three
counsel.
(d)
The application to strike out
(i)
The report of the Public Service Commission annexed to the affidavit
of Ms Ndudane, as well as all references thereto in Ms
Ndudane’s
and Mr Zokwana’s affidavits, mentioned in the Rule 23 (2)
Notice filed by the Department of Agriculture,
Forestry and
Fisheries, are struck out with costs, including the costs of three
counsel.
(ii)
The vexatious and irrelevant matter regarding Ms Creechy contained in
the affidavits of Mr Zokwana and Mr Xulu, and mentioned
in the Rule
23
(2)
Notice filed by the Department of Agriculture, Forestry and
Fisheries, are struck out with costs, including the costs of three
counsel.
(iii)
The application brought by the Department of Agriculture, Forestry
and Fisheries to strike out Mr Xulu’s further affidavit,
dated
5 June 2020, is dismissed, with costs.
_______________________
J.E SMITH
JUDGE
OF THE HIGH COURT
Counsel for
intervening applicants
: Adv. T Masuku SC
Attorneys
for intervening applicants
:
Ndumiso Attorneys
50 Long Street Cape Town
Counsel
for BXI and Mr Xulu
: Adv MJM Bridgman
Adv. C Smart
Attorneys
for BXI and Mr Xulu
: Miller Reardon Attorneys
c/o B Xulu & Partners
Inc. 9
th
Floor
113
Loop Street Cape Town
Counsel for the DAFF
:
Adv. N Bawa SC
Adv.
B Joseph SC Adv. J Williams
Attorneys for the
DAFF
: State Attorney
4
th
Floor
22 long Street Cape Town