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[2016] ZAECPEHC 55
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Gcora and Others v Nelson Mandela Bay Municipality and Others (1414/16) [2016] ZAECPEHC 55 (30 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
CASE
NO: 1414/16
DATE
HEARD: 18/8/16
DATE
DELIVERED: 30/8/16
NOT
REPORTABLE
In
the matter between
:
SIPHO
GCORA
FIRST APPLICANT
KHUSELWA
GOBO-GCORA
SECOND APPLICANT
GOBO
GCORA CONSTRUCTION AND
PROJECT
MANAGEMENT
CC
THIRD APPLICANT
AND
NELSON
MANDELA BAY MUNICIPALITY
FIRST RESPONDENT
PUBLIC
PROTECTOR OF SOUTH AFRICA
INTERESTED PARTY
INVALID
/ UNLAWFUL TRUSTEES
SECOND TO FIFTH RESPONDENTS
IMPROPERLY
CITED PARTIES
SIXTH TO SEVENTH RESPONDENTS
JUDGMENT
PLASKET
J
[1]
I am required to decide on two applications that are part of a larger
dispute between the three applicants, Mr Sipho Gcora,
his wife, Ms
Khuselwa Gobo-Gcora and Gobo Gcora Construction and Project
Management CC, on the one hand, and the first respondent,
Nelson
Mandela Bay Municipality (the Metro), on the other. The first
application is one in which the Metro applied for leave
to file an
additional affidavit in the second application. The latter is an
application purportedly brought in terms of rule 30
and rule 30A of
the uniform rules.
[2]
At the heart of the dispute lies two interrelated matters, an
application brought by the applicants to enforce compliance on
the
part of the Metro with an order of the Public Protector directing the
Metro to take certain remedial action, contained in a
report entitled
C
ost
of Deviation
,
and an application by the Metro to review and set aside that order.
Background
[3]
Before turning to the applications before me, it is necessary to set
out, briefly, the factual background.
[4]
In the Public Protector’s report, she ordered the Metro to take
specified remedial action in favour of the complainant,
Gobo Gcora
Construction and Project Management CC, represented by Mr Gcora and
Ms Gobo-Gcora (in their capacities as the close
corporation’s
members).
[5]
The Metro had not complied with the Public Protector’s order by
the time the applicants brought an application to compel
it to do
so.
[1]
On 12 April 2016, when
this application was to be heard, an order was made by agreement by
Smith J which foreshadowed the Metro
applying to review and set aside
the Public Protector’s order. It read:
‘
IT
IS ORDERED
:
BY AGREEMENT
1.
That the application brought by Applicants under case number 992/2016
is postponed
sine die
.
2.
That the aforesaid application is to be heard simultaneously with the
application for review to be brought by the Nelson Mandela
Bay
Municipality (the Respondent in this application).
3.
That the Nelson Mandela Bay Municipality is directed to institute its
proposed application to review and set aside the Remedial
Action
contained in the report of the Public Protector dated 29th January
2016 by no later than the end of April 2016.
4.
That the Nelson Mandela Bay Municipality is directed to serve such
application upon the Applicants in this application, the liquidators
of the First Applicant and the Public Protector.
5.
That the Nelson Mandela Bay Municipality is directed to comply with
its obligations to promote co-operative governance and
inter-governmental
relations as enshrined in Section 41 of the
Constitution, in pursuing the review application referred to more
fully above.
6.
That the costs occasioned in this application thus far be reserved.’
[6]
On 29 April 2016, the Metro launched it review application. It cited
as respondents the Public Protector, the liquidators of
Gobo Gcora
Construction and Project Management CC, it being under a provisional
winding-up order at the time,
[2]
and the liquidators of both Mr Gcora and Ms Gobo-Gcora, both of whose
estates have been sequestrated.
[3]
None of the present applicants were parties in the review
application, even though Smith J ordered that the papers were to be
served on them.
[7]
The launching of the review application was the spur for the rule
30/rule 30A application brought against the Metro by the applicants.
In addition to citing the Public Protector as an ‘interested
party’ the application cited as the second to fifth respondents
parties that are only identified as ‘Invalid / Unlawful
Trustees’ and as the sixth and seventh respondents parties
identified as ‘Improperly Cited Parties’. I presume this
is intended to refer to the various liquidators, the MEC for
the
Department of Human Settlements in the provincial government, WK
Construction SA (Pty) Ltd and WK Pipelines (Pty) Ltd, all
of whom had
been cited as respondents in the review application.
[8]
In the rule 30/rule 30A application, the following relief was sought:
‘
1.
The review application under case number 1414/2016 be set aside;
2.
Alternatively the review application be struck out;
3.
Declaring that the Applicant under case number 1414/2016 is in
contempt of the order dated 12 April 2016 under case number
992/2016.
4.
That the Applicant under case number 1414/2016 is acting in violation
of s 41 of the Constitution by approaching the above
Honourable Court
without raising the issues its wants the above Honourable Court to
hear, with the Public Protector first;
5.
That the Nelson Mandela Bay Municipality be ordered to comply with
the Remedial Action of the Public Protector in “cost
of
deviation” as it opted to waste all the time it had to engage
the Public Protector;
6.
That the Nelson Mandela Bay Municipality is [in] contempt of the
Public Protector.’
[9]
Two primary points were taken by the applicants in the rule 30/rule
30A application. They were that the review application was
irregular
because it was instituted after the end of April 2016 and that the
Metro has not complied with s 41of the Constitution.
[4]
[10]
It was in the context of the second point that the Metro sought leave
to file a supplementary affidavit and two letters which
were attached
to it. As the letters were relevant and the explanation as to why
they were not produced earlier was satisfactory,
I made an order
granting the Metro leave to file the supplementary affidavit to which
the letters were attached and that the costs
of the application were
to be costs in the cause of the rule 30/rule 30A application. I also
took into consideration additional
information filed by the
applicants after he hearing of the matter.
[11]
Rule 30 deals with irregular proceedings. It provides:
‘
(1)
A party to a cause in which an irregular step has been taken by any
other party may apply to court to set it aside.
(2)
An application in terms of sub-rule (1) shall be on notice to all
parties specifying particulars of the irregularity or
impropriety
alleged, and may be made only if –
(a)
the applicant has not himself taken a further step in the cause with
knowledge of the irregularity;
(b)
the applicant has, within ten days of becoming aware of the step, by
written notice afforded his opponent an opportunity of
removing the
cause of complaint within ten days;
(c)
the application is delivered within 15 days after the expiry of the
second period mention in paragraph (b) of subrule (2).
(3)
If at the hearing of such application the court is of opinion that
the proceeding or step is irregular or improper, it may set
it aside
in whole or in part, either as against all the parties or as against
some of them, and grant leave to amend or make any
such order as to
it seems meet.
(4)
Until a party has complied with any order of court made against him
in terms of this rule, he shall not take any further step
in the
cause, save to apply for an extension of time within which to comply
with such order.’
[12]
Rule 30A is headed ‘Non Compliance with Rules’. It reads:
‘
(1)
Where a party fails to comply with these rules or with a request made
or notice given pursuant thereto, any other party may
notify the
defaulting party that he or she intends, after the lapse of ten days,
to apply for an order that such rule, notice or
request be complied
with or that the claim or defence be struck out.
(2)
Failing compliance within ten days, application may on notice be made
to the court and the court may make such order thereon
as to it seems
meet.’
[13]
A number of defences have been raised to the rule 30/rule 30A
application by the Metro. They deal with both procedural and
substantive issues and I intend to deal with most of them.
Procedural
issues
Rule
30 and rule 30A
[14]
Rule 30 creates a mechanism for ‘a party to a cause’ to
remedy an irregular step taken by an ‘opponent’.
Rule 30
was not available to the applicants because they were not parties to
the cause that they complain about – the review
application.
Smith J’s order that the papers in the review application be
served on them did not make them parties to it.
They have,
furthermore, never so much as applied to be joined and, on the basis
of what I say below as to their standing, nor could
they be joined.
They accordingly have no standing in this application which is
interlocutory to the review application. For the
same reason, they
have no standing to seek relief in terms of rule 30A.
Standing
[15]
Both Mr Gcora and Ms Gobo-Gcora are unrehabilitated insolvents, final
orders sequestrating their estates having been made by
this court on
3 December 2013 and joint trustees having been appointed by the
Master on 28 March 2014.
[16]
In terms of
s 20(1)(a)
of the
Insolvency Act 24 of 1936
, the effect
of their sequestration is, inter alia, that they have been divested
of their estates which first vested in the Master
and then, on their
appointment, in their trustees. That would include their member’s
interests in Gobo Gcora Construction
and Project Management CC.
[17]
In terms of
s 23
of the
Insolvency Act, the
capacity of an insolvent
to institute legal proceedings is limited. For instance,
s 23(6)
provides that an insolvent may ‘sue or be sue in his own name
without reference to the trustee of his estate in any matter
relating
to status or any right insofar as it does not affect his estate or in
respect of any claim due to or against him under
this section . . .’.
Neither this subsection nor any of the other subsections of
s 23
have
any application to this matter.
[18]
The result is that Mr Gcora and Ms Gobo-Gcora have been divested of
their member’s interests and have no standing to
represent the
close corporation. As they are not vested with the capacity to sue in
their own names in terms of any of the subsections
of
s 23
, they have
no standing in their personal capacities.
[19]
A similar finding was made in this court by Chetty J in
Sholto
Douglas NO & others v Gobo Gcora Construction and Project
Management CC & others
.
[5]
In that matter, as in this, Mr Gcora and Ms Gobo-Gcora engaged in
litigation in their personal capacities and, as Chetty J put
it,
‘purportedly on behalf of’ the close corporation. Because
they had no capacity to do either as a result of their
own
sequestration, and because of the ‘plethora of litigation’
[6]
they had engaged in after their sequestration, Chetty J issued an
order that, inter alia, interdicted and restrained them from:
‘
1.1
authorising the initiation, pursuit or defence of any legal
proceedings of any nature by the first respondent [the close
corporation];
1.2
directly an/or indirectly participating in the management of the
business of the first respondent in contravention of
section
47(1)(b)(i)
of the Close Corporation Act 69 of 1984.’
[20]
Having purported to bring the present application in the name of the
close corporation, and to represent it, as they had also
done in the
application to enforce the Public Protector’s order, Mr Gcora
and Ms Gobo-Gcora appear to have disobeyed Chetty
J’s order,
and consequently be in contempt of his order. This conduct, prima
facie, constitutes a criminal offence.
[7]
I accordingly intend referring this judgment to the Director of
Public Prosecution in Port Elizabeth for her consideration.
[21]
As Mr Gcora and Ms Gobo-Gcora have no standing in their personal
capacities, and have no authority to litigate in the name
of the
close corporation, the application must fail on this account.
[22]
Furthermore, none of the applicants are parties to the review
application. Not being parties, they have no standing to complain
of
irregularities in it.
The
merits
[23]
Although it may be strictly speaking unnecessary to decide on the
merits of the application, it seems to me to be desirable
to do so in
this case. Two points were taken by the applicants. The first was
that the review application was not initiated before
the end of April
2016 and the second was that the Metro had failed to comply with its
obligations in terms of s 41 of the Constitution.
Paragraphs
3 and 4 of Smith J’s order
[24]
Paragraph 3 of Smith J’s order directed the Metro to ‘institute
its proposed application to review and set aside
the Remedial Action
contained in the report of the Public Protector dated 29
th
January 2016 by no later than the end of April 2016’. Paragraph
4 directed the Metro to serve the application ‘upon
the
Applicants in this application, the liquidators of the First
Applicant [the close corporation] and the Public Protector’.
[25]
The application papers were issued by the Registrar on 29 April 2016.
This means that paragraph 3 was complied with. The papers
were,
however, only served on the applicants a few days later in early May
2016, but no time was prescribed in paragraph 4 for
the service of
the papers. There is accordingly no merit in this point. Even if the
review application had been initiated after
the end of April 2016, I
am not convinced that this would have meant that it was a nullity.
Paragraph
5 of Smith J’s order
[26]
Paragraph 5 of Smith J’s order directed the Metro to ‘comply
with its obligations to promote co-operative governance
and
inter-governmental relations as enshrined in Section 41 of the
Constitution, in pursuing the review application referred to
more
fully above’.
[27]
The argument advanced by the applicants seems to be that the Metro
has not done enough to comply with s 41 because it has not
even met
with the Public Protector to try to resolve the matter.
[28]
The Metro wrote to the Public Protector to request a meeting. It,
however, received a response from her attorneys which stated
that
much as the Public Protector would want to settle the matter, she is
functus
officio
and cannot change her decision; and that, in these circumstances,
little point would be served by meeting. The letter also stated
that
chapter 9 institutions are not organs of state for purposes of s 41
and that
s 2(2)(e)
of the
Inter-Governmental Relations Framework Act
13 of 2005
, which gives effect to
s 41
, provides expressly that it
does not apply to chapter 9 institutions. The Metro’s attorneys
responded by saying that they
agreed with these views and that, in
the circumstances, the review application ‘must follow its
course’.
[29]
The core question to be answered is what obligations are contemplated
by paragraph 5. The answer is clear. It envisaged those
obligations,
whatever they may have been, that applied in terms of
s 41
and the
Act to the dispute between the Metro and the Public Protector. The
answer is equally clear. No such obligations arise because
the Public
Protector is excluded from s 41 and the Act. Consequently, there was
absolutely nothing that the Metro was required
to do in terms of
paragraph 5. This point must therefore fail.
The
result
[30]
The application brought by the applicants fails on all of the grounds
that I have dealt with in this judgment. It must therefore
be
dismissed. In my view, the Metro is entitled to its costs, including
the costs of two counsel. It is also entitled to the costs
of the
application for leave to file the supplementary affidavit as the
costs of that application were costs in the rule 30/rule
30A
application. In addition, I intend referring this judgment to the
Director of Public Prosecutions in Port Elizabeth for the
reasons
given above.
[31]
I make the following order.
(a)
The application is dismissed with costs, including the costs of the
application for leave to file the supplementary affidavit,
and the
costs of two counsel.
(b)
The Registrar of this court is requested to furnish a copy of this
judgment to the Director of Public Prosecutions, Port Elizabeth
and
to bring her attention to paragraphs 15 to 22 thereof.
___________________________
C
Plasket
Judge
of the High Court
APPEARANCES
For
the applicants: In person
For
the first respondent: R Buchanan SC and ZL Mapoma instructed by Gray
Moodliar
[1]
See
Gobo
Gcora Construction and Project Management CC & others v Nelson
Mandela Bay Municipality & another
ECP (case no. 992/16).
[2]
I was informed
from the bar that the provisional winding-up order has now been
discharged.
[3]
See
Nelson
Mandela Bay Municipality v Public Protector of the Republic of South
Africa & others
ECP (case no.1414/16).
[4]
Section 41 is
concerned with inter-governmental relations and inter-governmental
disputes. Section 41(3) provides: ‘An organ
of state involved
in an intergovernmental dispute must make every reasonable effort to
settle the dispute by means of mechanisms
and procedures provided
for that purpose, and must exhaust all other remedies before it
approaches a court to resolve the dispute.’
[5]
Sholto Douglas
NO & others v Gobo Gcora Consruction and Project Management CC &
others
ECP
27 June 2014 (case no. 1970/14) unreported.
[6]
Para 3.
[7]
S v Beyers
1968 (3) SA 70
(A); Milton
South
African Criminal Law and Procedure
(Vol
II – Common Law Crimes) (3 ed) at 189.