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2024
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[2024] ZAFSHC 44
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Matjhabeng Local Municipality v MC Security & Investigations and Others (3945/2023) [2024] ZAFSHC 44 (15 February 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable: YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Application
no.: 3945/2023
In
the matter between:
MATJHABENG
LOCAL MUNICIPALITY
Applicant
and
MC
SECURITY & INVESTIGATIONS
1
st
Respondent
SHERIFF
OF THE HIGH COURT: WELKOM
2
nd
Respondent
KRUGER,
VENTER MAREE INCORPORATED
3
rd
Respondent
ABSA
BANK: WELKOM
4
th
Respondent
CORAM:
VAN ZYL, J
HEARD
ON:
7 AUGUST 2023
DELIVERED
ON:
15
FEBRUARY 2024
[1]
This is an application for reconsideration of an order in terms of
Rule 6(12)(c).
Background:
[2]
The applicant initially approached court on an urgent and
ex parte
basis for an order in terms whereof the second, third and/or fourth
respondents were to be interdicted and restrained from paying
an
amount of R23 732 137.11, held on behalf of the first respondent
under a writ of execution, pending the final outcome of the
application. That application served before Molitsoane, J on 5 July
2023 under application number 962/2023 (“the first main
application”). A rule
nisi
was granted in favour of the
applicant, returnable on 27 July 2023.
[3]
The first respondent subsequently enrolled the application for
reconsideration in
terms of Rule 6(12)(c) to be heard on 14 July 2023
(“the first reconsideration application”). The
application
again served before Molitsoane, J, and on 24 July 2023 he
delivered judgment in terms whereof the order granted on 5 July 2023
was reconsidered and set aside, with the applicant to pay the costs
on an attorney and client scale.
[4]
On 28 July 2023, under the present case number 3945/2023, the
applicant brought an
application similar to the first main
application on an urgent and
ex parte
basis (“the second
main application”). On 28 July 2023 Cronje, AJ, granted
the requested relief.
[5]
On 3 August 2023 the first respondent filed a “
Notice in
terms of Uniform Rule 6(8) and 6(12)(c)
” in terms whereof
the first respondent enrolled the second main application for
reconsideration on 7 August 2023 (“the
second reconsideration
application”). It is this second reconsideration application
which serves before me.
The
merits of the application:
[6]
For reasons that will become evident, I deem it unnecessary to set
out the factual
matrix surrounding the two applications.
[7]
The founding affidavit filed in the first main application was
deposed to by the Municipal
Manager of the applicant.
[8]
The first reconsideration application, under application number
962/2023, was, in
terms of paragraph [3] of Molitsoane, J`s judgment
dated 24 July 2023, “
based squarely on the purported lack of
authority of the Municipal Manager to institute the ex parte
application
”.
[9]
Molitsoane, J, further stated as follows at paragraph [4] of his
judgment, dated 24
July 2023:
“
The applicant and
the respondent are in agreement that the Municipal Manager’s
authority to initiate and launch these types
of proceedings is
derived from the Municipal Systems Act, 32 of 2000 (the Systems
Act). Further according to the applicant,
the authority of the
Municipal Manager is a delegated power vested in him by virtue of the
Systems of Delegations which was resolved
by the Municipal Council at
a meeting held on 26 September 2016.”
[10]
For purposes of the Municipal Manager’s delegated powers, the
applicant relied on an extract
from a meeting of the Municipal
Council held on 26 September 2016, wherein,
inter alia,
the
following was noted:
“
1.
That Council adopts the Delegation of Powers for 2016 – 2021
term of Council.”
[11]
Molitsoane, J, consequently found as follows at paragraph [7] of his
judgment:
“
The above extract
of the Council resolution clearly indicates that the Delegation of
Powers relied upon by the Applicant was for
the period 2016 to 2021.
Section 59(4) of the Systems Act provided that any delegation or
sub-delegation to a staff member of a
power conferred on a Municipal
Manager must be approved by the Municipal Council in accordance with
the system of delegation referred
to in subsection 59(1). The
applicant has not filed any further Council resolution approving or
delegating any powers referred
to in the Delegation of Powers after
the year 2021. This
ex parte
application was launched in
2023 after the term of the resolution of the Council referred to
above had ran its course. In
this regard, there is no proof
before me that the Municipal Manager had the necessary authority to
bring these proceedings as envisaged
in s59.”
[12]
The court concluded as follows at paragraph [9] of its judgment:
“
I am of the
considered view that, in the absence of the Council resolution or
delegated powers, it cannot be said that the Municipal
Manager was
authorised to institute this application.”
[13]
The court order of 5 July 2023 was consequently reconsidered and set
aside by Molitsoane, J.
[14]
In the second main application which subsequently served before
Cronje, AJ, on 28 July 2023,
the founding affidavit was again deposed
to by the same Municipal Manager. He,
inter alia,
stated as
follows therein:
“
7.
I also attach hereto Provincial Notice No. 183 of 2000, more
specifically pages confirming that
the applicant’s Systems of
Delegations stays in effect subject to any amendment or repeal,
marked as annexure “LRN4”.
I respectfully refer the
Honourable Court to page 7, paragraph 10(1)(a) thereof. I
submit, with respect, no amendment or
repeal has taken place, and are
they therefore still in effect.
…
10.
The reason I elaborate on the above authority to launch and pursue
this application is because a previous
ex parte
[application]
was reconsidered and set aside by the Learned Molitsoane, J during
the week on the grounds of my lack of authority.
A copy of this
order is attached hereto, marked as annexure “LNR6”.
This ruling, with respect, was incorrect
and has an application for
leave to appeal been filed on even date. A copy of the covering
letter confirming same is attached
hereto marked as annexure “LNR7”.”
[15]
As previously indicated, it is the subsequent second reconsideration
application which serves
before me. The said application was
again brought by the first respondent. In the said application
the lack of authority
of the deponent, the Municipal Manager, was
again raised.
[16]
At the commencement of the hearing of the second reconsideration
application, Mr Prinsloo, who
appeared on behalf of the applicant,
indicated that as an officer of court and due to ethical reasons he
is obliged to reveal to
the court that he had been placed in
possession of an agenda of a Special Council meeting which was
convened for that very afternoon,
Monday, 7 August 2023, which came
to his knowledge the preceding Saturday morning when the said agenda
was handed to him by an
attorney from his instructing attorney’s
office. The said agenda had been sent through to his instructing
attorney the Friday
evening. His instructing attorney attempted to
obtain further instructions over the weekend, but was unable to do
so. Mr Prinsloo
consequently had no other facts regarding the planned
meeting and the agenda which he could convey to me.
[17]
The said agenda, which was handed to me, contains a report of the
speaker on “
THE ADOPTION OF THE SYSTEM OF DELEGATION OF
POWER FOR MATJHABENG LOCAL MUNICIPALITY”
. Under the
heading “
PURPOSE OF REPORT
” the following was
stated
“
The purpose of the
report is to submit to Council the draft revision of the system of
delegation of power for due consideration
and adoption.”
[18]
In the said document
section 59
of the
Local Government:
Municipal Systems Act 2000
, was partly recorded, whereupon it was
stated that:
“
According to
section 59(2)(f)
the System of Delegation must
be reviewed
when a new Council is elected.”
[19]
Under the heading “DISCUSSIONS” the following was
recorded:
“
On the 22
nd
November 2021, a report was submitted to Council on the Municipal
System of delegation and Council resolved as follows under item
number
IA10/2021
That Council
takes
note
of the report on the system of delegation.
It is important to note
that the Council resolution of the (
sic
) November 2021
only
noted
the systems of delegation and
did not approve same
.
The key consideration is that the Municipality cannot function
outside the delegated authority and that all authority whether
vested
by legislation or municipal Council must be approved by Council.
Is this pivotal that Council resolve to condone the
error in noting
the systems of delegation and consequently approved the systems of
delegation. (Own emphasis)
[20]
Amongst other “
RECOMMENDATIONS
”, the following was
recorded:
(a)
That the Council adopt the system of
delegation for Matjhabeng Local
Municipality as reviewed.”
[21]
Mr Prinsloo consequently conceded that the Municipal Manager had not
been duly delegated with
the necessary authority to have instituted
the aforesaid applications and to have deposed to the affidavits in
support thereof.
He consequently further conceded that the rule
nisi
, dated 28 July 2023, stands to be discharged.
[22]
I am in agreement with the aforesaid concession by Mr Prinsloo on
behalf of the applicant.
[23]
The rule
nisi
in the second main application under case number
3945/2023 consequently stood to be discharged and set aside. For the
sake of clarity,
I record that I have already discharged and set
aside the rule
nisi
by means of an order issued on 7 August
2023. It was only the issue of costs which was reserved.
[24]
With regard to the costs of the application, Mr Grobler, who appeared
on behalf of the first
respondent, submitted that I should express my
dismay with the issue regarding the Municipal Manager`s authority and
call upon
the Municipal Manager and the Executive Mayor to advance
reasons why they should not be ordered to pay the costs of the second
main application and the second rescission application
de bonis
propriss
and on an attorney and client scale. In this regard he
submitted that they were, at the best for them, grossly negligent in
persisting
to rely upon alleged authority whilst they could have, had
they acted with the necessary diligence when the authority issue had
been raised for the first in the first rescission application
already, been able to ascertain what the correct factual and legal
position is.
[25]
I deem it prudent, at this stage, to record that I do not consider Mr
Prinsloo to have acted
improperly and/or unethical during any of the
relevant applications. He indicated during argument that he
consulted with
both the Legal Manager and the Municipal Mayor and
that he drafted the relevant papers and appeared during the hearing
of the arguments
based on their instructions to him. There is
no way that he could have known about the lack of authority of the
Municipal
Manager and/or the proposed meeting of 7 August 2023 prior
to the date when the agenda was handed to him, whereupon he
immediately,
as already stated, at the commencement of the hearing,
revealed the existence of the agenda to the court, with the
subsequent concession
regarding the lack of authority of the
Municipal Manager.
[26]
I have given serious consideration to the option and possibility to
call upon the Municipal Manager
and the Executive Mayor to advance
reasons why they should not be called upon to pay the costs
de
bonis propriis.
However, I have, however, decided against it. At
least, when the agenda and the consequent lack of authority indeed
came to the
fore, it was brought to the attention of applicant`s
instructing attorney. I do, however, deem a punitive costs order
appropriate
in the circumstances.
Order:
[27]
I consequently make the following order:
1.
The applicant is ordered to pay the costs of the (main)
application
under case number 3945/2023, which costs are to include the costs of
the application for reconsideration in terms of
Rule 6(12)(c)
, issued
on 3 August 2023 and heard on 7 August 2023, all of which costs are
to be paid on an attorney and client scale.
C.
VAN ZYL, J
On
behalf of the applicant:
Adv.
W. J. Prinsloo
Instructed
by
:
BMH
Inc
VEREENIGING
C/o
Pieter Skein Attorneys
BLOEMFONTEIN
E-mail:
pieter@skein.org
On
behalf of the 1
st
respondent:
Adv.
S. Grobler SC
Assisted
by:
Adv. A. Sander
Instructed
by:
Kruger
Venter Attorneys
BLOEMFONTEIN
E-mail:
reception@krugerventerinc.co.za