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[2023] ZAECQBHC 58
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Sunday's River Municipality v Profusion Protection Services (Pty) Ltd and Another - Application for Rescission (1049/2022) [2023] ZAECQBHC 58 (17 August 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA)
CASE
NO. 1049/2022
NOT
REPORTABLE
In
the matter between:
SUNDAY’S
RIVER MUNICIPALITY
Applicant/Defendant
and
PROFUSION
PROTECTION SERVICES (PTY) LTD
First
Respondent/Plaintiff
THE
SHERIFF HIGH AND LOWER COURT
KIRKWOOD
Second
Respondent
JUDGMENT
IN RESPECT OF APPLICATION FOR RESCISSION
HARTLE
J
[1]
The plaintiff sued and obtained judgment by
default on 14 June 2021 against the defendant (“the
Municipality”), a local
municipality as envisaged in section 2
of the Local Government: Municipal Systems Act, No. 32 of 2000, after
it failed to pay two
out of three amounts invoiced to it for the
provision of VIP security/ bodyguard services rendered to its Speaker
of Council
at the time (presently its
Mayor)
as emergency protection services
between the period 6 September to 17 November 2020, leaving a balance
owing to the plaintiff in
the sum
of R762
717.38. The relevant invoices were the last two in the series dated
26 October 2020 and 18 November 2020 respectively.
They were
payable within 30 days of presentation. The first of the three
invoices that covered the initial period from 6 - 23 September
2020
was paid on 15 October 2020 but the last two went unpaid.
[2]
The
municipality seeks a recission of that judgment. It’s very
belated contention through its present municipal manager, Mr.
Sakhekile Fadi, is that the services were arranged via a junior
official employed in Corporate Services who was not authorised
to
enter into the transaction(s); that the procurement process followed
was irregular and ensued
sans
the approval of the Municipality’s Council; and that the
impugned contract is invalid for want of having been reduced to
writing.
[1]
[3]
It is further suggested that to the
extent that the plaintiff may seek to rely on the principle that the
actions giving rise
to the contended for agreement (which the
Municipality claims is unlawful or invalid) constituted
administrative action which exists
and may have legal consequences
until set aside by a court of competent jurisdiction, that the
Municipality, if it is successful
in the present application, intends
to pursue a contingent counterclaim seeking the review and setting
aside of any such actions
on the basis of the constitutional
principle of legality.
[4]
It is common cause that the summons in
question was properly served on the municipality on 28 April 2021 and
that it failed to file
a notice of intention to defend the action.
Indeed, it appears from the evidence that its acting municipal
manager at the time,
Mr. Pillay, acknowledged receipt of the process
and intimated in a letter dated 6 May 2021 that it wished to settle
the matter.
Despite negotiations that appear to have been had, these
have not conduced to a favourable conclusion of the matter and the
balance
claimed in the action remains unpaid.
[5]
In
June 2021 the plaintiff lodged an application with the Registrar for
judgment to be entered against the Municipality on a default
basis.
[2]
[6]
Subsequent to judgment having been
obtained, the plaintiff on 27 September 2021 served the order
together with a “
judgment letter
”
upon the offices of the municipal manager at 31 Middle Street,
Kirkwood, upon the incumbent’s personal assistant,
one Ms.
Mgidi.
[7]
In the absence of payment of the judgment
date (and upon the culmination of without prejudice settlement
negotiations of which the
present municipal manager claims to have
had no knowledge, but which evidently came to naught) the plaintiff
issued a writ of execution
and attached three motor vehicles
belonging to the Municipality on 9 May 2022. The plaintiff duly gave
notice that the motor vehicles
so constrained would be sold in
execution on 22 June 2022.
[8]
This galvanized Mr. Fadi into action to
move an urgent application under Part A to stay execution and under
Part B he sought a rescission
of the default judgment order that had
been granted in favour of the plaintiff a year before.
[9]
The Part A application was settled when the
municipality put up security for the judgment debt. However, the
costs of the interlocutory
application were reserved for
determination by this court.
[10]
To
succeed with an application for recission under the common law - for
it is on this basis that the Municipality purported to bring
it,
[3]
the
application must be brought within a reasonable time and the
defendant must demonstrate “
good
cause
”
therefor to the satisfaction of the court. Whilst what constitutes
good cause is not capable of precise definition,
[4]
the
court will at least require the defendant to give a reasonable and
acceptable explanation for its default and to show on the
merits that
it has a
bona
fide
defence which
prima
facie
has some prospects of success.
[5]
[11]
Both
requirements must be met on the common law test. As was stated in
Chetty
:
[6]
“
It
is not sufficient if only one of these two requirements is met; for
obvious reasons a party showing no prospect of success on
the merits
will fail in an application for rescission of a default judgment
against him, no matter how reasonable and convincing
the explanation
of his default. And ordered judicial process would be negated if, on
the other hand, a party who could offer no
explanation of his default
other than his disdain of the rules was nevertheless permitted to
have a judgment against him rescinded
on the ground that he had
reasonable prospects of success on the merits.”
[12]
Quite evidently,
what
needs explaining in respect of the first requirement, is why the
municipality, acting through its officials at the time, failed
to
file a notice of intention to defend the action which it should have
done around mid-May 2021. The simple answer to that
inquiry, as
I will indicate below, reveals that the acting municipal manager at
the time both had knowledge of the action and evidently
consciously
elected not to file a notice of intention to defend
.
[13]
Without any suggestion that the previous
incumbent of the post compromised the Municipality’s
position by adopting the
non-litigious course he followed at the
time, or any explanation being offered as to why the latter’s
knowledge of the summons
and his dealing with the matter as he did
should for some or other reason not be imputed to the Municipality,
or that some compelling
reason exists for the Municipality to
vindicate the constitutional principle of legality,
Mr
Fadi comes to the party late in purporting to suggest that sufficient
cause exists for the Municipality presently to be excused
for its
default and that this is a proper case for it to be afforded the
right to defend the action. If the municipality were so
allowed, so
he suggests, “
a number of defences
would be available to it, which would include at least the fact that
the services were not properly authorised
and
(are)
thus unlawful”
.
[14]
Mr.
Fadi claims to have been authorized to
bring
the application on behalf of the Municipality “
by
virtue of the powers delegated to the incumbent of the office of The
Municipal Manager by the Defendants Council.”
It is unclear whether he here suggests an “
ex
lege
”
authority to institute proceedings or a delegation to him in his
official capacity of the authority generally to initiate
legal
proceedings, because elsewhere he appears to acknowledge the need to
have obtained a mandate from Council especially to have
instituted
these proceedings.
[7]
Whether
Council has mandated him to seek a recission of the default judgement
for reasons he would have prevailed on it rendered
it necessary for
it to pursue the present application is unclear, but to be fair to
the Municipality, the plaintiff did not challenge
his standing on any
basis.
[8]
He
is certainly the current incumbent of the office of the municipal
manager of the Municipality and would have had a clear interest
from
that perspective, for example, to have necessarily launched the
proceedings under Part A under the urgency contended for,
[9]
but
given the curious history of this matter and the conscious resolve of
his predecessor not to have required the action to be
defended, a
clear mandate from the Council to presently seek a recission of the
judgment in contention a year after the fact would
have been
instructive. This is all the more necessary in my view since
Mr. Fadi revealed in his replying affidavit that:
“…
this
litigation has been debated at length and I can confirm that a number
of councillors are vehemently opposed to approving the
use of such
services.
”
[15]
This
statement is surprising (if not concerning in the municipal manager’s
deference to such opinions) given that personal
protection services
to the Speaker (who the contentious invoiced amounts concerned) are,
and were at the time, legally permissible
and also approved by
Council.
[10]
When
the services were rendered, the Determination of Upper Limits of
Salaries, Allowances and Benefits of Different Members of
Municipal
Councils published in GN 475 of 24 April 2020 (Government Gazette No.
43246), effective from 1 July 2019, (“
the
Determination”)
provided
in section 15 (1) thereof for “personal security” for
councillors under the caption of “
tools
of trade
”.
The speaker would have been entitled as part of his remuneration
package to the provision of two bodyguards at least.
No threat
or risk analysis by the South African Police Service would have been
required in these circumstances. In terms
of section 15 (2) of
the Determination if a municipal council makes available tools of
trade in terms of sub-section (1) it would
have to simply take into
account “
accessibility,
affordability and cost control, equity, flexibility, simplicity,
transparency, accountability and value of tools
of trade”
.
Although “
personal
security
”
is lumped in together with laptops and other tangible assets that are
capable of being insured (section 15 (3)), there would
have been no
reason to suppose that the ordinary procurement processes for the
acquisition of such services, except in the peculiar
context of the
exigency under which the need for these arose in this instance, could
not be adopted without any fuss. They would
certainly however have
been within budget so to speak, courtesy of the provisions of the
Determination under the caption of “
tools
of trade”
for councillors.
[11]
[16]
In this instance the need for the plaintiff
to have provided personal around-the-clock protection to the
Municipality’s Speaker
arose on the weekend of 5 September 2021
after he received death threats.
[17]
At the time, Mr. Fadi had been suspended
from office, according to him due to “
political
instability”
that endured for a
period of approximately a year.
[18]
This was not the first time that this had
happened but when it did on 19 March 2020, Mr. Fadi was still the
incumbent of the office
and it appears that exactly the same
modus
operandi
as it were procurement wise
was then employed to contract for the plaintiff’s services. In
this regard the plaintiff
pleaded in the summons that its
representative was contacted telephonically by Ms. Susan Fourie, who
was “
duly appointed and authorised
to act on behalf of the Defendant”
and
who entered into an oral agreement with it to provide emergency
security services to the Municipality.
[19]
The
Municipality again engaged the services of the plaintiff on 24/25 May
2020. During this period the incumbent of the office
was an
acting municipal manager in the person of a Mr. Machelesi who again
instructed Ms. Fourie to secure emergency security services
with the
plaintiff on behalf of the Municipality which was facing an imminent
strike at the time.
[12]
[20]
When the services in contention were
rendered, commencing from 6 September 2020, Mr. Machelesi similarly
“
authorised”
Ms. Fourie to contract the business with the plaintiff which entailed
in this instance once again the placement of around the clock
protection for the Council’s Speaker, which services were
confirmed renewed on a weekly basis for their duration at an agreed
upon rate.
[21]
The invoices for services rendered in March
and May 2020 respectively were paid by the Municipality on 11 August
2020, still during
the watch of Mr. Machelesi.
[22]
When the Municipality was served with the
summons, Mr. Machelesi had been replaced by Mr. Pillay who had been
sent to act in the
position from the Sarah Baartman District
Municipality.
[23]
Mr. Fadi was reinstated soon thereafter as
municipal manager in June 2021 and again took up the cudgels of the
financial stewardship
of the Municipality.
[24]
It
hardly needs to be stated that Mr. Fadi and those who acted as
municipal manager at each interval would have had the ultimate
responsibility for the administrative oversight of the municipality
and its diligent compliance with the Local Government: Municipal
Finance Management Act (“the Finance Act”)
[13]
at
all relevant times.
[14]
They
would also have borne the vast responsibilities and functions
assigned to the office as “
accounting
officer”.
[15]
It
should also fairly be assumed that the chief financial officer would
have had the ear of the incumbent of the office of municipal
manager
and that the latter (in conjunction with the chief financial officer)
would have kept his own finger on the pulse as it
were of expenditure
that was “
irregular”,
“
fruitless
and wasteful
”
or “
unauthorised
,”
within the meaning of each concept as defined in the Finance Act,
including how the Municipality was expected to deal with
any concerns
that may have been raised in respect of such expenditure.
[16]
An
astute municipal manger would also notably have concerned himself
with the powers devolved to him by Council to effectively oversee
the
implementation of the SCM policy especially within the context of
providing emergency protection services to the municipality’s
office bearers.
[25]
Despite the expectation of such
institutional integrity, Mr. Fadi’s explanation for the default
however assumes that he need
only account for his own parochial
knowledge of the fact of the judgment and explain away
his
default.
[26]
In this respect he asserts that
he
only became aware
that a summons had been
issued against the Municipality when the plaintiff made the
attachment of its motor vehicles. Duly alerted
thereby, he commenced
an investigation into why the summons had not been dealt with by the
Municipality’s legal department.
[27]
His discoveries revealed the approach
adopted by Mr. Pillay which he suggests he would have handled
differently had he known of
the summons and correspondence in
question.
[28]
Despite the strong views presently
expressed by him that the action should in his view have been
defended, all the email correspondence
addressed to the Municipality
by the plaintiff’s attorneys and marked for his attention on
the subject of the judgement debt
and requests for payment (which
should for that reason alone also have caused him in the exercise of
his oversight functions as
accounting officer to have interposed
himself), for some or other reason never piqued his interest.
[29]
The effort by the plaintiff who had taken
the cautionary step of warning the Municipality in a “
judgment
letter”
dated 17 September 2021
served by the sheriff on Mr. Fadi’s personal assistant, Ms.
Mgidi on 27 September 2021, that it had
obtained judgment on 14 June
2021 and would be executing on it unless payment was received within
30 days, similarly missed his
attention. Ms. Mgidi put up an
affidavit in which she acknowledges having received the letter but
simply apologizes with
absolutely no explanation given to this court
(or purportedly to Mr. Fadi himself) for her failure to have brought
the judgment
letter to his attention.
[30]
As
for the email correspondence that had been addressed to the
Municipality concerning its liability to the plaintiff, Mr. Fadi
claims to have routinely forwarded these communications on to
corporate services who were dealing with all legal issues at
that time.
[17]
He
claims however that had he known that the correspondence involved a
matter that
had
not been defended
he
would have taken the necessary steps to ensure that a mandate be
obtained from the Municipality’s Council to in fact defend
the
action. Corporate services in turn failed to inform him that the
correspondence which he was forwarding on to them to be dealt
with
formally was not actually being handled by them.
[18]
They
too, in being asked for an account by Mr. Fadi for their failure to
have pointed out such fact to him, yielded no “
satisfactory
answer”.
This presupposes that an answer must have been provided to him in
this connection but that he failed to disclose this information
to
the court. (Seen from the opposite perspective, however,
corporate services appeared from correspondence exchanged between
the
parties to have been engaged with the plaintiff throughout in an
ongoing exercise to settle the Municipality’s indebtedness
to
it and on the very clear basis that “
SRVM
is committed to payment of the debt incurred
”.)
[19]
[31]
Mr. Fadi felt himself constrained to
mention (because he had issued a read receipt in respect of one of
these emails addressed to
him on 14 December 2021 giving cover to a
notice of a taxation in respect of the action) that on that day his
office was closed
for the holiday period and that he “
would
have read the email and forwarded it on to corporate services to be
dealt with in the new year”.
[32]
He also mentioned the hiatus between 1
November and 5 December 2021 between electioneering and the
appointment of the new council
when the defendant would purportedly
not have been able to make a decision to defend the action should he
“
have even been aware of this
matter”.
[33]
Given
the institutional integrity of the Municipality alluded to above, I
consider it curious that Mr. Fadi purported to explain
that: “
Given
that no one at the Defendant had any knowledge of the summons other
than Mr Pillay, it took some time to investigate the matter
and
appoint attorneys to act on behalf of the Defendant who in turn also
had to investigate the matter and make copies of the documents
in the
court file.”
[20]
[34]
Leave aside the fact that corporate
services must obviously have been in the know of the matter, this
amounts to a concession that
Mr. Pillay’s knowledge of the
matter and reaction to the summons at the time, which must of course
be imputed to the Municipality,
was pivotal to the mystery perceived
by Mr. Fadi but there is no affidavit from the latter put up.
In my view Mr. Pillay
ought naturally to have been approached
as a first point of enquiry to give an account of his handling of the
matter in his official
acting capacity, more particularly to explain
his decision taken and perhaps, as Mr. Fadi suggests might have been
the problem,
to offer an explanation for why he failed to brief him
of a matter that required his ongoing attention.
[35]
Mr.
Pillay should also notably have been called upon to give a context to
his reservations raised in the 6 May 2021 letter and perhaps
more
especially to provide a context as to why he appeared
laissez-faire
about the matter despite the qualification expressed by him in the
letter that the services rendered by the plaintiff had (at least
according to Mr. Fadi’s account) been
procured
in an irregular and unauthorized manner.
[21]
[36]
It
was further through his own investigations, so Mr. Fadi related, that
he learnt of Ms. Fourie’s involvement at least from
the point
of view that she had been served with the summons and that she had
handed it to Mr. Pillay to deal with. He asserted
that “
she
was thus under the impression that the summons had been dealt with”
as if to suggest that she assumed the action had been defended, but
quite to the contrary and as appears from correspondence addressed
by
her to the plaintiff’s attorneys on the issue in October 2021,
she must have been aware that Mr. Pillay had not dealt
with the
matter by defending the action.
[22]
[37]
Mr.
Fadi went on to explain that he had also gleaned that in respect of
all
the services rendered by the plaintiff to the Municipality
pre-summons (which would have included the first transaction in March
2020 on his own watch) Ms. Fourie had been instructed to do so by Mr.
Machelesi.
[23]
According
to him she was however a relatively junior administrative official
employed in corporate services who did not have the
authority to
procure goods and/or services or to enter into contracts on behalf of
the Municipality yet proceeded to comply with
those instructions.
[38]
In this respect the Municipality put up her
confirmatory affidavit in which she agrees with what Mr. Fadi says
concerning her, but
this is patently inconsistent with an email
written contemporaneously by her to the plaintiff’s attorneys
on 25 January 2021
prior to the issue of the summons and in response
to their invitation to the Municipality to discuss a settlement of
the matter
to avoid the inevitable. In her email she acknowledges
quite unflinchingly that she is the person who had instructed the
plaintiff
to provide security services to the Council’s
speaker, but not off her own bat, as follows:
“
PPS
(the plaintiff)
is
correct that they received instruction from me. This instruction was
issued on the instruction of my immediate superior at the
time - Mr.
Machelesi, Director: Corporate Services,
who
was also the acting Municipal Manager
.
The
matter is now with the Chief Financial Officer, Mr Hannes Kraphohl,
it would be appreciated if this could be taken up with him.
His
contact details are as follows...”
(Emphasis
added)
[39]
Mr. Fadi has not bothered to advert to Mr.
Machelesi’s peculiar views on the matter either. He was after
all the acting incumbent
when the services that are the subject
matter of the summons were procured and is the director of corporate
services including
legal affairs. One would expect him to have
confirmed or denied his own authority given to by Ms. Fourie to carry
out his
instruction as acting municipal manager at the time. Mr.
Kraphohl’s insight is also critical to assess whether the
Municipality’s
supposed defence of a lack of authority should
be given a plausible context but there is no affidavit put up by him
either.
[40]
It is not clear who the Chief
Financial Officer was at the time the impugned services were
requested and rendered but it is apparent
from the minute of a
Special Council Meeting convened by the Council (eleven days later)
on 17 September 2020
inter alia
to discuss the “
provision of
security services for councillors - life threatening situation of
councillors,”
that the meeting
was attended in that capacity by one “
Joko
N (Acting Chief Financial Officer)”.
This
person’s account, that would also have been critical to the
discussion had at the special meeting in this regard, ought
also to
have been offered to this court.
[41]
It should be noted however that no one
other than Mr. Fadi (with hindsight) has an issue with Ms. Fourie’s
having requested
the plaintiff’s services on behalf of the
Municipality on any one of the four occasions on which she did.
[42]
The plaintiff pleaded in its particulars of
claim that the obtaining of its services, on all the occasions when
it had provided
these to the Municipality, had been procured in
emergency situations in terms of section 39 of the Sundays River
Valley Municipality
Revised Supply Chain Management Policy (“the
SCM Policy”), adopted on 30 May 2016 in terms of section 111 of
the Local
Government Municipal Finance Management Act, No. 56 of
2003. The relevant section of the policy reads as follows:
“
39. Deviation
from, and ratification of minor breaches of, procurement processes
(1)
The
accounting officer may
—
(a)
after consultation with the Chief Financial Officer, dispense with
the official procurement processes established by the policy and
procure any required goods or services through any convenient
process, which may include direct negotiations, but only—
(i)
in an emergency;
(ii)
if such goods or services are produced or available from a single
provider only;
(iii)
for the acquisition of special works of art or historical objects
where specifications
are difficult to compile;
(iv)
acquisition of animals for zoos; or
(v)
in any other exceptional case where it is impractical or
impossible to follow the official procurement processes
; and
(b)
ratify any minor breaches of the procurement processes by an official
or committee
acting in terms of delegated powers or duties which are
purely of a technical nature.
(2)
The
officer must record the reasons for any deviations in terms
of
subparagraphs
(1) (a)
and
(b)
of
this policy and report them to the next meeting of the municipal
council and also include such reasons as a note to the annual
financial statements
.
(3)
Subparagraph
(2)
does
not apply to the procurement of goods and services contemplated
in paragraph 11(2) of this policy
.”
(Emphasis Added)
[43]
It
is not seriously suggested by the Municipality that the services were
not rendered in an emergency situation, but one gets the
distinct
impression that the provision of such protection services to the
Speaker on an ongoing basis was perhaps a matter of concern
to Mr.
Machelesi (the acting manager at the time), hence the fact that he
reported on the issue at the special meeting of the Council
eleven
days in while the Speaker was still under guard in order to seek its
“
approval
”
of such security measures going forward.
[24]
[44]
Despite the plaintiff’s contention
that this meeting could have had no bearing on the services forming
the subject matter
of the action because the amounts for these were
only invoiced long after the date of Mr. Machelesi’s report and
Council’s
special meeting of 17 September 2020, it is however
plain from the acting municipal manager’s report reproduced
below that
he was being prescient about the anticipated expenditure
that would follow upon the need to continue to provide personal
security
to the Speaker emanating from events that had happened on
the preceding weekend of 5 September 2020 already. His report
(which
coincidentally raises no complaint against Ms. Fourie for
having engaged with the plaintiff on the municipality’s behalf
to procure the services) reads as follows in this respect:
“
REPORT
TO SPECIAL COUNCIL MEETING 17 SEPTEMBER 2020
4.1
PROVISION OF SECURITY SERVICES FOR COUNCILLORS- LIFE
THREATENING SITUATION OF COUNSELLORS
PURPOSE OF REPORT
To request Council to
consider approval of security measures for Councillors in life
threatening situations
BACKGROUND
A complaint of
intimidation, which is threatening the life of the Speaker of
Council, was received and registered. An anonymous
telephone call was
received by the Speaker, alerting him about a death threat plot to
assassinate him. He then informed the Acting
Municipal Manager on the
weekend of 5 September 2020.
A private security
company was engaged to provide close contact security guards as it
was not known how and when the plot would
be unleashed. A case was
reported to the South African Police Service, who referred it to the
Crime Intelligence Unit for further
investigation. No further
communication was entered with the Unit thus far.
It should also be
mentioned that the State Security Agency was also approached to
advise on what else can be done to ensure that
the matter is
mitigated. Investigation continues.
LEGAL IMPLICATIONS
In terms of section 15
(1) (g) of the government Gazette on the Upper Limits on allowances
and benefits “Executive Mayors,
Mayors and Speakers are
entitled to two bodyguards.”
Attached
as
Annexure
A
find a copy of the Gazette for ease of reference.
[25]
It should be mentioned
that such Gazette was adopted by Council. For other Councillors, it
promulgates for a security assessment
(to) be done with the South
African Police Service.
RECOMMENDATION
(a)
That Council take note of the report on the intimidation of the
Speaker of Council, threatening
his life.
(b)
That State Security Agency be encouraged to investigate the matter of
intimidation of all
Councillors and be acted upon.
(c)
That the expenditure implications of the security company used be
condoned and covered for
.
SUBMITTED FOR
CONSIDERATION”
(Empasis
added)
[45]
In the special meeting that ensued and for
which the acting municipal manager had tabled his report it is
apparent that the Council
and Mr. Machelesi (and evidently the acting
chief financial officer who was present in the meeting) misunderstood
the import of
the provisions of section 39 of the Supply Chain
Management Policy read together with section 15 (1) of the
Determination.
This is evident from what the minute records as
follows:
“
6.
REPORT FROM THE ACTING MUNICIPAL
MANAGER
6.1
PROVISION OF SECURITY SERVICES FOR COUNCILLORS - LIFE THREATENING
SITUATION OF COUNCILLORS
On proposal by Cllr
Nodonti seconded by Cllr Payi and Councillor Ndawo Council resolved:
(a)
That Council defer the report on provision
of security for councillors to a Special Council Meeting.
(b)
That the report must include all
outstanding information such as the term of contract for the
bodyguards of the Speaker
(c)
That the expenditure implications of the
security company be detailed in the report.
The
Acting Municipal Manager asked that Council give a directive on what
to do with the security company currently on guard for
the Speaker.
The Acting Speaker responded that he acted without consulting Council
and therefore cannot expect a directive from
Council.”
[26]
[46]
It
cannot be gainsaid that after this special meeting the first invoice
in the series of three, that is for personal security services
provided by the plaintiff to the Speaker over the period 6 to 23
September 2020 was in fact paid on 15 October 2020, quite obviously
by administrative fiat and by obvious implication with the
concurrence at least of those seized with the Municipality’s
financial responsibilities.
[27]
[47]
Mr. Fadi in particularizing the nature of the supposed defence
available to the Municipality under the guise that the procurement
process was supposedly irregular suggested an entirely different
process that is not even evident from the Municipality’s
SCM
Policy, as follows:
“
36.
It is unfortunately not unusual for prominent
councillors of the Defendant to be threatened by members of the
public or political
opponents. The municipal manager however does not
have authority to determine whether protection services should be
provided to
the councillor in question. The process required by the
Council to be followed when a councillor (or official) of the
Defendant
has received threats and requests protection is for that
counsellor to report the matter to the South African police services
and
obtain a case number.
37.
Upon the receipt of such documentation, the municipal manager (who is
the accounting officer)
is obliged to convene an urgent Council
meeting and submit a report to it with the relevant details and
seeking authority for the
provision of security services and the
expenditure of funds for this purpose. Only if approval is received,
is the accounting officer
authorised to procure such services by
means of the appropriate procurement process.”
[48]
The shortcoming contended for by him (in
the absence of anything explained by Mr. Machelesi or the acting
chief financial officer
who would have been responsible for applying
their minds to the issue at the time), is that Council had deferred
its decision on
the issue for lack of sufficient detail of the terms
of the contract and the expenditure implications and indeed had
“
refused”
to give any directive in relation thereto. Additionally, so he
averred, it appears that this item was not tabled at any further
meeting of the Council. There is further according to Mr. Fadi
in any event the absence of any record of the reasons for
the alleged
deviation or a report to Council in this respect (assuming the
provisions of section 39 (1) and (2) of the SCM Policy
to be
applicable) and no record of any consultation with the Chief
Financial Officer. (Ironically both of these obligations would
have
fallen to him as municipal manger to have overseen.) In this
respect neither Mr. Machelesi nor the chief financial officer
at the
time have filed affidavits that support Mr. Fadi’s claim that
the transaction falls to be impugned for such a reason.
The
fact that it might so appear is hardly a convincing basis upon which
to a upset a final judgment. The onus is on the
municipality to
show on the merits that it has a
bona
fide
defence that has some prospects of
success.
[49]
It is perhaps apposite to refer to Mr.
Pillay’s letter of 6 May 2021 at this juncture as this has a
direct bearing of the
belated defence that Mr. Fadi seeks to assert
on behalf of the Municipality that on his insistence goes to the root
of the contract.
[50]
It
was inevitable that the plaintiff would want to submit to this court
that Mr. Fadi could not get away with relying on only a
portion of
this “
without
prejudice
”
correspondence favourable to it without the complete letter having
been disclosed to present a true picture of the entire
matter in
fairness to the plaintiff.
[28]
Indeed,
Mr. Fadi opened the door for it to deal with the import of the letter
in reply by not rendering the entire version and in
the absence of
any supporting affidavit put up by Mr. Pillay to gainsay the
particular spin Mr. Fadi put on what the latter had
supposedly said
about the procurement process.
[29]
Contrary
to what the Municipality sparsely avers concerning Mr. Pillay’s
“assertion” that the services were “
procured
in an irregular and unauthorised manner,”
he firstly does not complain that any irregularity lies in the fact
that either Mr. Machalesi or Ms. Fourie did not have the required
mandate to request the services. Further it also does not
really substantiate what about the transaction might have caused
Mr.
Pillay in his official position as accounting officer to be concerned
but he ostensibly does not suggest that the
procurement
process
was necessarily tainted. What the letter conveys is that:
“
The
costs associated with the services provided
by Profusion Protection Services has been incurred in an irregular
and unauthorised manner. The practice of incurring irregular
and
unauthorised expenditure is deemed illegal in terms of the Municipal
Finance management Act and other legislation pertaining
to Local
Government.”
(Emphasis added)
[51]
Having regard to the precise definitions in
the Finance Act of the different kinds of expenditure falling foul of
what the Act requires
(each with their own unique impact and which
both a financial and accounting officer would be especially attuned
to), it is significant
in my opinion that Mr. Pillay was comfortable
to assert, despite his reservation aforesaid, that the Municipality’s
recourse
for the claimed irregularity referenced by him would however
be redressed by it taking action against the individuals concerned
who had in his view fallen foul of the Finance Act and the
regulations thereto.
[52]
It is hardly of any comfort to advert to
Mr. Fadi’s opinion (formed after the fact and evidently only in
the context of this
application) that the transaction falls to be
impugned without regard to what in Mr. Pillay’s opinion caused
the mischief,
what that irregularity was and how it was intended to
be addressed or perhaps already had been addressed by the
Municipality by
the time he eventually focused his attention on the
problem.
[53]
In this respect there is merit
in the plaintiff’s complaint that Mr. Fadi has not taken the
court into his confidence regarding
what the shortcomings were or why
they were condonable (certainly
vis-à-vis
the plaintiff) in the opinion of the then acting municipal manager.
Insofar as Mr. Fadi has made capital of claimed irregularities
discovered by him after the fact in the conduct of his belated
investigations and now supposedly warranting the drastic step of
setting aside the default judgment, he has left a gaping void in
accounting or vouching for these. If he conducted a formal
investigation,
one would expect a report as contemplated under the
numerous applicable provisions of the Finance Act and section 41 (1)
of the
SCM Policy. There is simply no assistance offered to
this court in understanding the enormous sea change in approach
adopted
between the two municipal managers neither is there a clear
indication of where exactly the breaches of the SCM policy lie.
Nothing new has emerged to show that the Municipality has been hard
done by as a defaulting party or that it should, as a matter
of
fairness and justice, be afforded an opportunity to go into the
merits of the action.
[54]
In
a random supplementary affidavit filed three days after the launch of
the application Mr. Fadi was constrained to relate that
it had come
to his attention after signing his founding affidavit that corporate
services (which includes both Ms. Fourie and Mr.
Machelesi, neither
of whom have provided any input to the court on what appears to have
been a significant intervention by their
department to have dealt
with the matter on a non-litigious basis) had appointed a firm of
attorneys, Boqwana Burns, to act on
the Municipality’s behalf
“
in
order to broker a settlement
”
with the plaintiff. Without critically divulging when this was, he
claimed to have had sight of the correspondence and could
confirm
that the negotiation attempts had come to naught. In any event, so he
added, “
I
confirm that Corporate Services did not have a mandate from Council
to broker such a settlement nor to instruct attorneys.”
He belatedly added the assurance that this too he had been unaware of
- that is the fact of such intervention, and that “
had
the fact that the summons had not been defended been brought to
(his)
attention,
(he)
would
have immediately obtained a mandate from Council to defend it.”
[30]
[55]
Not
surprisingly, the plaintiff opposed the application for recission.
Notably it took issue with Mr. Fadi’s claim that
Ms. Fourie
(known to it as a
manager
of Corporate Services as opposed to a mere junior administrative
officer) was not authorised despite every indication to the contrary
that she was permitted to make the necessary security arrangements to
prevent harm to the Speaker even in March 2020 under Mr.
Fadi’s
own watch when the Plaintiff’s services were contracted for the
first time. In the instances where it
did business with the
Municipality it was further satisfied that these situations could
comfortably be brought within the ambit
of permissible deviations
from the normal supply chain management processes in emergency
situations. It was also satisfied, as
Ms. Fourie clarified to them
later on in the 25 January 2021 letter, that she had received the nod
from Mr. Machelesi himself to
procure its services.
[31]
[56]
The first two invoices issued for such
services rendered (requested in exactly the same manner procurement
wise on each occasion)
on 19 March and 24/5 May 2020 respectively
were paid by the Municipality on 11 August 2020. An invoice submitted
on 23 September
2020 for services rendered from 6-23 September 2020
was also paid on 15 October 2020, this despite Council’s stance
adopted
in the minute of its Special Meeting of 17 September 2020 (of
which the plaintiff was evidently unaware at the time). It is only
the last two invoices for the services rendered in Oct and Nov 2020
that had gone unpaid. For this reason, it had on 25 January
2021 invited Ms. Fourie, who it knew as the person that had
instructed them to provide emergency security services to the Speaker
at the time, to discuss a settlement of the matter rather than
issuing a summons against the Municipality and she had responded
as
indicated in paragraph 38 above on the very same date.
[57]
The plaintiff had also prior to issuing out
the summons sent a “
demand
”
to the Municipality in terms of section 3 of the Institution of Legal
Proceedings Against Certain Organs of State Act, No.
40 of 2002
(“ILPACOSA”), which was delivered to it at the offices of
the municipal manager via registered mail. The
registered mail
receipt indicates that the letter was in fact signed for and
collected on the Municipality’s behalf on 13
February 2021.
[58]
Summons was thereafter issued on 23 April
2021 and served five days later at the offices of the municipal
manager in Kirkwood. This
was then followed by receipt of Mr.
Pillay’s letter dated 6 May 2021 which I have already referred
to above.
[59]
The plaintiff fairly contends in my view
that there is a particular void in the Municipality’s
explanation regarding what
happened after Mr. Fadi was reinstated. It
questions how he could claim (especially as a responsible accounting
officer) to have
had no knowledge of the summons or intended steps to
be taken around it until he came to be faced with the problem of the
imminent
sale in execution of the Municipality’s service
vehicles. Its further contentions that Mr. Fadi’s own
nescience
of the issue cannot redound to its disadvantage, and that
it is entitled to finality in respect of the matter and to enforce
its
judgment, are to my mind sound submissions.
[60]
Mr. Fadi’s belated revelation of the
settlement negotiations undertaken at the Municipality’s behest
by Messrs Boqwana
Burns on its own confirms that the matter was in
fact receiving the attention of the Municipality in this interregnum
whether he
was aware of it as he ought to have been in his official
capacity or not due to his being remiss. This is further evident from
the series of emails exchanged between the parties in the period 6 to
15 October 2021 put up by the plaintiff in its answering affidavit
which were as a matter of fact copied in to Mr. Fadi. Leave aside
that they reveal a settlement proposal, there is no suggestion
from
their content that the Municipality’s liability to the
plaintiff is disputed even against the assertion by its chief
financial officer that the expense was irregular.
[61]
It is also evident from the fact of Boqwana
Burns Attorneys’ formal intervention on the Municipality’s
behalf between
19 October and 4 November 2021 which correspondence
the plaintiff included to demonstrate how incomprehensible it was for
Mr. Fadi
to assert a lack of knowledge of the default judgement, that
the issue of the judgement debt was very much known to the
Municipality
despite his supposed ignorance of it all.
[62]
There were also other interactions with Mr.
Fadi which the plaintiff says indicate that he was very much in the
know regarding the
fact that the Municipality was indebted to it,
which I need not go into.
[63]
Leave aside what Mr. Fadi says he knew or
did not, the point is that the Municipality cannot wear two hats.
What in fact happened
and the knowledge that must necessarily be
imputed to it concerning the events that actually occurred and which
demonstrate that
it had no real desire to contest the action cannot
be wished away. Insofar as Mr. Fadi suggests that some compelling
reasons exists
presently to revisit the matter (even if just prompted
by the fact that the settlement discussions came to naught), he has
as I
have indicated above provided no formal report of his
investigations into the matter that provides the official basis for
the drastic
relief that the Municipality seeks.
[64]
In the absence of any such report, have
already remarked upon the difficulty I have in giving flight to the
purported concerns raised
by him in a vacuum without any illumination
by Messrs Machelesi and Kraphohl at least. In the parlance of the
Finance Act, irregular
expenditure is given a peculiar meaning in
section 1. Apart from Mr. Fadi’s reference to possible
defences, he has not even
identified what exactly about the
transaction forming the subject matter of the action renders it
actionable. Insofar as the provisions
of section 116 of the Finance
Act have been adverted to, it is plain that written contracts can be
departed from in terms of the
Municipality’s SCM Policy in
emergency situations and do not afford a self-standing reason to
invalidate procurement contracts.
The failures he complains of in
relation to the Municipality’s obligations pursuant to the
provisions of section 39 of the
SCM Policy (which Mr. Fadi has not
pertinently accepted are of application in this instance) are ones
that the municipal manager
and chief financial officer would be
beholden to themselves. It would indeed be counterintuitive to launch
a legality review where
the shortcomings that would make the contract
choate reside with the functionary who is required to have taken the
relevant steps
in the aftermath of the municipality having had to
procure emergency services in terms of its SCM Policy.
Notably Mr.
Fadi has not complained of any constitutional breaches,
suggesting that whatever imperfections may have existed around the
procurement
of the plaintiff’s services are administrative or
technical in nature. These can certainly be condoned under the
SCM
Policy as Mr. Pillay appears to have done.
[65]
Whilst being alive to the fact that
the defaulting party need not show that the probabilities of the
purported defences it relies
on are in its favour, that being left to
a trial court to decide, I am as I have said before not persuaded
that
the Municipality
(not Mr. Fadi) has provided a reasonable or satisfactory explanation
for its default in all the circumstances. Further, even if
I were in
my thinking to isolate the prospects of success of the notional
defences Mr. Fadi suggests the Municipality should be
entitled to
test in a trial from the curious background of this matter, I am not
satisfied, on the common law principles, that
this court is justified
in exercising its discretion in favour of the Municipality by
acceding to the relief sought. In fact,
the problem here,
reading between the lines, suggests a clear tug of war or internal
conflict going on in the domain of the Municipality.
Whatever
tension has motivated this application, it is simply inequitable to
visit the plaintiff with the prejudice and inconvenience
caused
thereby.
[66]
In the result the application falls
to be dismissed with costs to follow that result. I am
satisfied that the plaintiff was
entitled to resist the applications
under both Part A and B. I am advised that the security that
the Municipality put up
to avert the sale in execution happened at
the last minute. It could have offered to do so sooner.
Indeed, if its financial
expenditure was properly managed as it ought
to be, it should never have been pushed to the precipice that it
was. The plaintiff
was more than reasonable in keeping it
posted of what next step it would take, and when, and even extended
it more time than was
due to it to bring up its end of the bargain.
[67]
The plaintiff asks for costs on the
punitive scale in respect of Part B. I am in agreement that this is
an appropriate instance
in which the court should mark its
disapproval of the conduct of the Municipality. Not only was there a
substantial delay in bringing
the application, but when it did so it
launched it on an urgent basis and could not even be bothered to ask
for condonation.
It further purported to gloss over its
institutional memory as if it did not exist evidently in a bid to
avoid having to account
for the substantial delay in making the
application.
[68]
Concerning its application to strike out, I
have dealt with this in part above concerning Mr. Pillay’s
letter of 6 May 2021.
For the rest and in these bizarre circumstances
where like a Jekyll and Hyde character the Municipality (through Mr.
Fadi’s
contentions) disavowed any settlement, yet complained
that the communications demonstrating such negotiations should not
have been
referenced by the plaintiff on the basis that they relate
to without prejudice settlement discussions which are accordingly
inadmissible
and accordingly irrelevant, I am satisfied that
their very existence was necessary to be put up by the plaintiff as
proof
of the Municipality’s
male
fides
. In any event the
Plaintiff sensitively redacted the portions necessary to protect the
Municipality’s privilege.
[69]
In the result I issue the following order:
1.
The application to strike out is dismissed
with costs on the party and party scale.
2.
The application under Part B is dismissed
with costs on the scale of attorney and client.
3.
The defendant is ordered to pay the costs
of the application under part A on the party and party scale.
B
HARTLE
JUDGE
OF THE HIGH COURT
DATE
OF HEARING :
10
November 2022
DATE
OF JUDGMENT :
17
August 2023
Appearances:
For
the Applicant/Defendant:
Ms.
K M Morgan instructed by McWilliams & Elliot Inc., Gqeberha
(ref. I Petersen).
For
the First Respondent/Plaintiff:
Ms
M P Morgan instructed by Hardy Attorneys, Gqeberha (ref.
JH/P0009).
[1]
It
was contended on behalf of the Municipality that the requirements of
section 116
of the
Local Government: Municipal Finance Management
Act, No. 56 of 2003
, to the effect that an agreement procured
through the supply chain management system of a Municipality must be
in writing and
stipulate the terms and conditions as set out in that
section had not been complied with, rendering the contract invalid.
[2]
It
is unclear what happened in-between. The Municipality averred
that there was no response to the letter offering to settle
the
matter. Except to say that the “
offer
”
was unacceptable, the plaintiff did not deal with this allegation in
its answering affidavit. Furthermore, Mr. Pillay’s
account of what happened under his watch or explanation regarding
why the Municipality did not file a notice of intention to
defend
under the peculiar circumstances is absent. This interregnum
was however overtaken by other significant events that
confirm that
despite whatever reservation may have been expressed by him at the
time over the “
costs
associated with the services provided having been incurred in an
irregular and unauthorized manner
”,
the Municipality was intent on settling the matter with the
plaintiff.
[3]
The
Municipality does not pertinently explain why the application was
not launched on the basis of Uniform
Rule 32
(2)(b) but reading
between the lines its intent was to rely on the present municipal
manager’s belatedly expressed need,
purportedly on the basis
that he did not know until recently that the acting municipal
manager at the time had followed a different
non-litigious approach,
to go into the merits of the matter because defences are in his view
open to the Municipality which it
should be permitted to take. This
aligns with the approach adopted in
De
Wet and others v Western Bank Ltd
1979 (2) SA 1031
(A) to the effect that the concept of sufficient
cause does not necessarily resort under a straitjacket of the
grounds provided
for in Uniform Rules 31 and 42 (1). As
Wessels JA remarked in that matter: “
O
ne
can envisage many situations in which both logic and commonsense
would dictate that a defaulting party should, as a matter
of justice
and fairness, be afforded relief
.”
[4]
Cairns’
Executors
v
Gaarn
1912
A.D. 181
at p. 186.
[5]
Zuma
v Secretary of the Judicial Commission of Inquiry into Allegations
of State Capture, Corruption and Fraud in the Public Sector
Including Organs of State and Others
2021
(11) BCLR 1263
(CC)
at
paras [71] and [72];
Chetty
v Law Society, Transvaal
(1985) 2 SA 756 (A).
[6]
Chetty,
Supra,
at
765 D- E.
[7]
See Nico Steytler
,
Local Government Law of South Africa
,
Chapter 8 in respect of “
Municipal
Management
.”
The municipal manager’s legal status and position does not, in
and of itself, empower him or her to institute legal
action on
behalf of the municipality or to represent the municipality. A
municipal manager needs delegated authority to initiate
legal
proceedings on behalf of the municipality.
See
Molefe v Dihlabeng Local Municipality
[2008]
JOL 22365
(O) at paras 15, 27 and 37, in which the court was
unimpressed with an acting municipal manager’s assertion that
he
had authority to represent the municipality in legal proceedings
merely because he was appointed as acting municipal manager.
In
Magodongo
v Khara Hais Municipality and Others
,
(2018) 39 ILJ 406 (LC) (14 November 2017) at paras 31–32 the
Court similarly did not accept the municipality’s argument
that the municipal manager was authorised to institute proceedings
“
ex
lege
”.
[8]
An accounting officer is obliged in terms of the provisions of 61
(2) of the Finance Act in the exercise of his fiduciary
responsibilities
to disclose to the
municipal
council and mayor all material facts which are available to him or
reasonably discoverable, and which in any way might
influence the
decisions or actions of the council or the mayor. There are
several other sections of the Finance Act which
compel an accounting
officer to provide reports to council or other functionaries in
respect of any non-compliance with the provisions
of the Act. The
overarching obligations on him in terms of the Finance to cover his
bases as it were imply that he must have
provided a written
recommendation to the Council to have instituted the present
application. The Municipality’s Supply
Chain Management Policy
also provides in section 41(1) (b) for an investigation by its
accounting officer into any allegations
against an official or other
role player of,
inter
alia,
irregular practices or failure to comply with the policy, which
presupposes a formal on the record report especially justifying
steps taken (or to be taken) by him against such persons purportedly
to combat the abuse of the supply chain management system.
[9]
The
Municipality wished to avert the imminent sale of its service
delivery vehicles that had been attached in execution of the
plaintiff’s judgment.
[10]
According to a report of Mr Pillay submitted to a special meeting of
the Council held on 17 September 2020 (while the Speaker
was under
special guard by the plaintiff) he makes the observation, under the
rubric of “Legal Implications” that:
“
It
should be mentioned that such Gazette
(a
reference to the Determination)
was
adopted by Council.”
In
terms of the provisions of
section 7
(3) of the
Remuneration
of Public Office Bearers Act
No.
20 of 1998
, the
salary and allowances of a member of a Municipal Council is
determined by that Municipal Council by resolution of a supporting
vote of a majority of its members, in consultation with the member
of the Executive Council responsible for local government
in the
province concerned, having regard to what is provided for in that
subsection. Subsection (4), in turn, provides that the
salaries and
allowances of members of Municipal Councils shall annually form a
charge against and be paid from the budget of
a municipality
concerned. In
section 1
, “allowances” means any
allowance, including out of pocket expenses, which forms part of an
office bearer’s
conditions of service, other than a salary and
benefits. The Preamble to the Determination (which intends to
embrace the same
words and meanings referred to in the Office
Bearers Act) repeats that the salary and allowances of a councillor
is determined
by that municipal council by resolution of a
supporting vote of the majority of its members, in consultation with
the member
of the Executive Council responsible for local government
in each province, having regard to the upper limits as set out the
Determination itself, the financial year of a municipality and
affordability of a municipality to pay within the different grades
of the remuneration of councillors, including the austerity measures
as approved by national Cabinet. For purposes of implementation
of
the Determination, “in consultation with” means that a
municipal council must obtain concurrence of the MEC for
local
government prior to the implementation of the provisions of the
relevant notice. “Tools of trade” is
a
somewhat confusing concept. It means, in the definitions which
preface the Determination: “the resources provided
by a
municipal council to a councillor to enable such councillor to
discharge his or her duties in the most efficient and effective
manner, and at all times remain the assets of the municipality
concerned.” The confusing part is that personal security
services can hardly present itself as an asset of a municipality and
the acquisition of a service as opposed to an asset would
surely
require a different process when it comes to procurement. Be that as
it may, there can be no question that the budget
of a municipality
is required to include provision for personal security albeit this
resorts under “
tools
of trade
”
rather than presenting as an “allowance.” This much is
evident from the provisions of section 18 (1) of the
Determination,
its effect of which was retrospective to 1 July 2019, that required
detail concerning the municipalities’
“total budget for
personal security” to have been provided to the Minister by
not later than 30 July 2020 as part
of the budget work up and
planning. The takeaway of all of this is that the expense that the
Municipality had to incur in order
to provide personal security to
the Speaker should have been within budget, or at least within the
contemplation of the Municipality
as a necessary expense.
[11]
See
footnote 10.
[12]
As
an aside the provisioning of these services to the Municipality
might have posed a different kettle of fish than the permissible
personal security services for councillors made provision for in the
Determination.
[13]
No.
56 of 2003.
[14]
Section
55 of the Finance Act. See also
Nico
Steytler
,
Local Government Law of South Africa
,
Chapter 11 on “Financial Management” generally.
[15]
Section
60-79 of the Finance Act read with
Nico
Steytler
,
Local Government Law of South Africa
,
Chapter 11 on “Financial Management”.
[16]
The provisions of section 32 of the Finance Act would certainly have
applied in the view of both Messrs Pillay and Fadi.
The
concern that the expenditure was unauthorised (as in off budget) or
irregular, should have been a matter of record.
[17]
This
is a recognition by Mr. Fadi that the correspondence related to a
“legal issue.”
[18]
This
is an odd statement to make bearing in mind his assertion that
corporate services were dealing with all legal issues at the
time.
[19]
This is plainly evident from correspondence put up by the plaintiff.
[20]
It
is also curious for the reason that Mr Fadi elsewhere maintained
that corporate services were dealing with all legal issues
and that
he was for this reason, or because of such an expectation,
forwarding correspondence concerning the matter on to them
to deal
with.
[21]
See
section 32 of the Finance Act.
[22]
The
confirmatory affidavit by Ms Fourie that was put up by the
Municipality only confirmed the allegations in paragraph 34 of
Mr.
Fadi’s affidavit concerning his claim that she had no
authority to engage with the plaintiff to procure its services.
[23]
It
is unlikely that Mr. Machelesi, who is ordinarily the director of
corporate services, would have involved himself in the March
2020
procurement. Ms. Fourie’s confirmatory affidavit does not
pertinently deal with the first transaction under Mr. Fadi’s
watch.
[24]
An
affidavit from Mr. Machelesi would have been instructive. I
have already mentioned in footnote 10 the curious construction
in
the Determination of the provision of personal security to a
councillor under the rubric of “tools of trade” lumped
in together with the provision of other tangible assets that would
obviously conduce to a councillor discharging his or her duties
in
the most efficient and effective manner. Being under guard would no
doubt also be of assistance to a councillor who has received
death
threats but it appears that not much thought was given by its
inclusion in the Determination to the difference in procurement
of
such a commodity in relation to other tangible tools of trade.
Perhaps the practicalities of providing the “tool”
have
ironed themselves out by now and guards are provided to the Speaker
and Mayor at least without a threat or risk analysis
needing to
first be established, but it may have caused confusion at the time.
The notional expense was not off budget,
but still had to be
procured under extremely urgent circumstances in accordance with the
Municipality’s SCM Policy. Alternatively,
perhaps Mr.
Machelesi’s report to the Council purported to be in
compliance with section 39 (2) of the Municipality’s
SCM
Policy. Only he could have enlightened the court in this regard.
[25]
I have referenced the Determination in paragraph 15 above.
[26]
It
is not apparent from the SCM Policy that the prior approval of the
Council was necessary to be obtained. The deviation
is within
the province of the accounting officer who is expected to get the
buy in only of the chief financial officer.
[27]
Section
65 of the Finance Act provides for expenditure management by the
accounting officer who is responsible therefor.
[28]
The
court in
Venmop
275 (Pty) Ltd and Another v Cleverland Projects (Pty) and Another
2016 (1) SA 78
(GJ) at paragraph [16] and the cases cited therein
spells out the approach to be adopted where there is an imputed
waiver by
implication, one which arises from the element of
publication of the privileged content, or at least as in this
instance a part
thereof, which can serve as a ground for the
inference of an intention no longer to keep the content secret. A
waiver by implication
is concerned not so much with an ascertainment
of the subjective implied intention of the party relinquishing the
privileged,
but fairness and consistency. In litigation privilege,
the mere disclosure of the fact of a privileged communication, or
its
existence, is not sufficient to justify an imputed waiver of its
contents, but where its substance is disclosed to secure an
advantage in legal proceedings, the High Court of Australia has
found that this will reach the point that fairness and consistency
requires disclosure of the whole of the communication and a
concomitant loss of privilege in respect thereof.
[29]
An
irregularity in the
procurement
process was suggested which could have significant consequences for
it in the arena of tender laws. This is very different
from
the neutral concepts of “unauthorised” or “irregular”
expenditure within the contemplation of the
definitions in the
Finance Act.
[30]
Ironically
he elsewhere bemoaned the fact that corporate services had not dealt
with the matter although his concern appears to
be that they did not
deal with the matter as a defended action as
he
saw fit after the fact.
[31]
Notably
Mr. Fadi has not challenged Mr. Machelesi’s authority as
acting manager at the time to have given Ms. Fourie the
go ahead to
instruct the plaintiff.