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[2016] ZAGPJHC 114
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National Youth Development Agency v Dual Point Consulting (Pty) Ltd and Another (06982/2016) [2016] ZAGPJHC 114 (19 May 2016)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO:
06982/2016
DATE: 19 MAY 2016
In the matter between
National Youth Development
Agency
......................................................................................
Applicant
And
Dual Point Consulting (Pty)
Ltd
..................................................................................
First
Respondent
Ndwandwe,
Ezra
.......................................................................................................
Second
Respondent
Judgment
Van der Linde, J
[1]
This is an application to make a written
settlement agreement between the applicant and the first respondent
dated 17 August 2015,
annexure NF1 to the founding affidavit, an
order of court. When the matter was called, I raised with counsel for
the applicant
whether the court has the power under rule 41 of the
uniform rules of court to make the order sought, because there had
been no
prior litigation between the parties.
[2]
Counsel asked that the matter stood down;
when it was called again counsel said that the application is not
brought in terms of
rule 41 of the uniform rules of court, but in
terms of rule 6. In view of the conceptual difficulty I have with
this court making
an agreement an order of court where the court was
never formally engaged in an underlying dispute between the
contracting parties,
I reserved judgment till 19 May 2016. It has
since become clear that apart from the issue that I raised with
counsel, there is
also an issue of lack of service on the first
respondent. I deal with that issue first.
[3]
The application was brought on the long
form notice of motion. It was not served on the first respondent, but
was served on the
second respondent on what was said to be a
domicilium citandi et executandi.
The second respondent is not a party to the settlement agreement; and
in any event, the settlement agreement does not provide for
a
domicilium citandi et executandi.
[4]
The cause of action against the second
respondent relies on a written guarantee, also dated 17 August 2015,
in terms of which the
second respondent guarantees to the applicant
the liabilities of the first respondent in terms of the settlement
agreement. There
is no application to make the guarantee an order of
court. The guarantee provides for a
domicilium
citandi et executandi,
and that
justifies the service on the second respondent.
[5]
The first prayer, to make the settlement
agreement an order of court, plainly implicates the first respondent.
Although the second
respondent is not a party to the settlement
agreement, if the settlement agreement were made an order of court
under the first
prayer, the second respondent will be taken to
guarantee an obligation that will have become strengthened and
reinforced.
[1]
The second prayer, a money judgment, is sought against both
respondents. In view of these considerations, service on the first
respondent is essential, and the application will have to be
postponed
sine die
for
that reason.
[6]
It is therefore strictly unnecessary to say
anything about the issue whether the court has jurisdiction to make
any order on the
first prayer, since my remarks will be
obiter
.
However, in deference to the applicant, since I intimated my
prima
facie
view, and since I explained that
I have before refused this type of relief,
[2]
I state my views shortly.
[7]
As indicated, I intimated when the matter
was called that I was not convinced that this court has the power to
make a settlement
agreement an order of court where there was no
prior litigation. In Eke v Parsons
[3]
the Constitutional Court said that it was important for courts
to make settlement agreements orders of court, but that was
not in
the context of settlement agreements that had not been preceded by
litigation.
[8]
Against the view that I adopt, is the
unreported judgment in the Gauteng High Court, Pretoria, in
Growthpoint Properties Ltd v Makhonya
Technologies (Pty) Ltd and
Others
[4]
for the proposition that a settlement agreement is itself a
sufficient cause for a court to make an order in terms of such
an
agreement.
[9]
Growthpoint is binding on this court unless
this court finds that it is clearly wrong. However, in view of the
attitude I take as
regards the discretion of this court, it is not
necessary now to embark on the philosophical issue which underlies
the notion that
a court can make an order in terms of an agreement
simply because parties requested it to do so.
[10]Even if this
court had that power, it seems incontestable that it has a discretion
whether to exercise it.
[5]
And I would have declined to exercise it in this case for the
following reasons. First, the detail provided in the founding
affidavit
concerning the dispute which preceded the settlement
agreement, is sparse. There are only two paragraphs,
[6]
and what they convey of present relevance is two-fold. The dispute is
said to have centred principally on the repayment of monies
paid to
the first respondent by the applicant; and the settlement of the
dispute is said to have been reached through a mediation
process.
[11]These aspects are relevant, because the
impression is rather left that the real issue was not whether or not
the monies were
repayable, but the manner or terms of repayment. I
revert to this issue below. The second aspect is that there was a
dispute resolution
process available, that of mediation, to the
parties; and that process appeared to have served them well. In other
words, the dispute
determination facilities and resources of this
court were not tapped into; rather, what is being sought to be tapped
into now is
the execution mechanisms that this court avails.
[12]That brings me to the second reason why in
this case I would not exercise a discretion in favour of making the
settlement agreement
an order of court. There is legislation
specifically designed to the availing of the enforcement mechanisms
of this court, to extra-judicial
processes. That occurs under
and in terms of
s.31
of the
Arbitration Act 42 of 1965
.
[13]That Act sets out in some considerable
detail the prerequisites that would have to be followed before an
award made under it
would be made an order of court. For
instance, there is required to be an arbitrator who has to conduct
him/herself in accordance
with a minimum standard, and the like.
[14]The point made here is that the legislature
has expressly acknowledged the value of extra-judicial dispute
resolution; and has
respected to a significant degree party autonomy
in the parties’ running of that process. And it has, under
those prescribed
conditions, aided by the machinery of the Law in
other respects, for instance the subpoenaing of witnesses, lent also
the enforcement
arm of the Law to the process.
[15]If the legislature were prepared to lend
the enforcement arm of the Law no matter what the underlying process;
no matter how
the settlement came about; no matter whether there was
a fair underlying process; one would have expected explicit
litigation to
that effect. There is no such.
[16]The third reason
why I would have exercised my discretion against granting the relief
sought in the first prayer, is that in
my view the primary function
of the courts is to determine disputes between parties, whether
vertically between state and individual,
or whether horizontally
between person and person.
[7]
The notion of contempt of court for non-compliance with a court order
is more compatible with a court order where the parties had
first
engaged the dispute-resolution facilities of the courts, even if not
to their final pronouncement, than where there was no
attempt at all
to engage them.
[17]Take the case of an arbitration, discussed
earlier. Assume the parties run an arbitration, then settle it; and
enter into a
settlement agreement. They put in a clause saying they
agree that the settlement agreement can be made an order of court. If
the
notion were accepted that the agreement is
per
se
sufficient for the court to exercise
a discretion to make an order of court, the judicial oversight over
the arbitral process would
be lost; worse, circumvented.
[18]Finally, in my view, the settlement
agreement is sought to be made an order of court principally to have
the sword of Damocles
hang over the debtor’s head. It seeks
thus to engage the court as debt collector, and that in respect of a
debt collection
that did not first come to this court.
[19]In the premises I make the following order:
The application is postponed sine die.
WHG van der
Linde
Judge, High
Court
Johannesburg
For the
applicant: Adv. (unknown)
Instructed
by
Edward
Nathan Sonnenbergs
150 West
Street
Johannesburg
011-2697600
Ref D
Lambert/0390385
Date moved: 13 May 2016
Date judgement: 19 May 2016
[1]
Swadif(Pty) Ltd v Dyke, NO
1978 (1) SA 928
(AD)
at 944, per Trengove, AJA (then): “
I
respectfully agree with the views expressed by FANNIN, J., in Trust
Bank of Africa Ltd. v Dhooma, supra, in the passage quoted
above.
In a case like the present, where the only purpose of taking
judgment was to enable the judgment creditor to enforce
his right to
payment of the debt under the mortgage bond, by means of execution,
if need be, it seems realistic, and in accordance
with the views of
the Roman-Dutch writers, to regard the judgment not as novating the
obligation under the bond, but rather as
strengthening or
reinforcing it. The right of action, as FANNIN, J., puts it, is
replaced by the right to execute, but the enforceable
right remains
the same.”
[2]
In
Lodestone Investments (Pty) Ltd v Muhammed Ebrahim t/a Ndimoyo
Transport, case no. 5716/16, in this division, judgment handed
down
on 29 April, 2016.
[3]
2015 JDR 2064 (CC).
[4]
Case no 67029/2011, dd 12/2/13, per Van der Byl,
AJ.
[5]
Since the making of a settlement agreement a
court order is, apart from the procedural device of
rule 41
(which
it is said does not apply here), not a cause of action at common or
statue law.
[6]
Founding affidavit, paragraphs 7 and 8, page 7.
[7]
Compare ss.165, 166 of the Constitution of the
RSA, 1996.