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2024
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[2024] ZAKZPHC 12
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Ethekwini Municipality v Unity Africa Trading CC and Others (2846/2021P) [2024] ZAKZPHC 12 (20 February 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case no:
2846/2021P
In the matter between:
ETHEKWINI
MUNICIPALITY
APPLICANT
and
UNITY AFRICA TRADING
CC
FIRST RESPONDENT
HEDRAPHASE INVESTMENTS
(PTY) LTD
SECOND RESPONDENT
LOWE AND WILLS
ATTORNEYS
THIRD
RESPONDENT
FIXTRADE 1507 (PTY)
LTD t/a NATHI ZULU
FOURTH RESPONDENT
PROPERTIES
(Registration number
1999/034203/23)
KATHIJA LIMALIA AND
ASSOCIATES ATTORNEYS
FIFTH RESPONDENT
SAMUEL
KHUMALO
SIXTH RESPONDENT
INGONYAMA
TRUST
SEVENTH
RESPONDENT
REGISTRAR OF DEEDS,
PIETERMARITZBURG
EIGHTH
RESPONDEDNT
ORDER
The following order is
granted:
The first respondent is
directed to pay the costs of the application, including those costs
reserved on 11 October 2023.
JUDGMENT
MOSSOP J:
[1]
This
is an ex tempore judgment.
[2]
Samuel
Butler, the English novelist, once observed that in law, nothing is
certain but the expense. Those words remain true to this
day. This
matter involves the expense of litigation, in the form of costs. The
applicant brought an application citing several
respondents. The
first respondent, against whom the application was principally
directed, ultimately conceded the relief claimed
by the applicant in
an order granted by this court (the consent order). The applicant
therefore requires the first respondent to
pay the costs of its
application. The first respondent resists such an order being granted
and suggests that the fourth respondent
and two other individuals not
yet joined to this application be ordered to pay the costs.
[3]
Before
dealing with the merits of the application, I must deal with the
application brought by the first respondent to join the
two further
parties referred to above to the matter. That application was refused
by me. I indicated that the reasons would follow
and these are the
reasons. The only purpose behind the joinder was an attempt by the
first respondent to obtain an order that they
and the fourth
respondent pay the applicant’s costs. The applicant opposed the
joinder, for it holds the first respondent
liable for those costs,
not the parties whose joinder was sought. The parties sought to be
joined had no direct and substantial
interest in the application nor
was there any counter-application brought by the first respondent
alleging that they were to be
responsible for the costs. I
accordingly refused the application.
[4]
On
11 October 2023, Sipunzi AJ granted the consent order. The notice of
motion has eight sub-paragraphs. The first seven sub-paragraphs
of
the consent order are identical
[1]
to the first seven sub-paragraphs of the order contained in the
notice of motion.
[2]
Sub-paragraph 1.8 of the notice of motion is different to the one
contained in the consent order. The consent order reads as follows:
‘
1.1
The
first respondent is interdicted and restrained from selling,
alienating, transferring ownership, or any part of ownership, of
Portion 4 of Erf 1295 Umlazi V, Registration Division FT, Province of
KwaZulu-Natal in extent 5,114 square meters (“Portion
4”).
1.2
The
eighth respondent is ordered to endorse its records in accordance
with the order in subparagraph 1.1 above.
1.3
It
is declared that the purported agreement of sale between the
applicant and the first respondent which is annexure “J”
to the founding affidavit is of no force or effect.
1.4
The
transfer of Portion 4 from the applicant to the first respondent,
under deed of transfer T17/17293 is declared to be of no force
and
effect and is set aside.
1.5
It
is declared that the applicant is the true and lawful owner of
Portion 4.
1.6
The
eighth respondent is ordered to take all necessary steps to give
effect to the above orders, including, but not limited to,
transfer
of the property to the applicant in terms of section 33 of the Deeds
Registries Act or any other provision it may deem
necessary.
1.7
Should
it be necessary for any directors or representatives of the first
respondent to sign documentation to give effect to paragraph
1.6 then
it is declared that they are required to do so within 7 calendar days
of provision to them of such documents, failing
which the Sheriff of
this court or his deputy is authorized and directed to sign such
documents in the place and stead of any such
director or
representative of the first respondent.
1.8
The
applicant is granted leave to correct the citation or the name of the
first respondent wherever it appears in the application
papers as the
Close Corporation.
1.9
The
matter is adjourned to 20 February 2024 for arguments on the issue of
costs.
1.10
Today’s
costs are reserved for arguments on 20 February 2024.’
[5]
By
virtue of the fact that the first respondent consented to the order
sought by the applicant, none of the facts alleged by the
applicant
are in dispute and they are mentioned hereafter only to the extent
that they may have a bearing on the issue of costs.
[6]
Briefly
stated, the facts of the matter revolve around a fraud being
perpetrated on the applicant. The fraud related to the sale
of the
immovable property described in sub-paragraph 1.1 of the consent
order. In that paragraph, the immovable property is referred
to as
‘Portion 4’, and so to avoid confusion, I shall also
refer to it by that name.
[7]
Portion
4 initially vested in the seventh respondent, the Ingonyama Trust,
and then was erroneously transferred to the applicant,
who was then
required to retransfer it to the State, its true owner. In the
grand tradition of the bureaucracy in this country,
all of this
happened at a snail’s pace and covered a span of several years.
This sad reality is hardly surprising, for as
the Supreme Court of
Appeal noted in
Minister
of International Relations and Co-operation and others v Simeka Group
(Pty) Ltd and others
:
[3]
‘…
sight
should nevertheless not be lost of the fact that the bureaucratic
machinery is notorious for moving slowly even though the
exigencies
of a particular case might require that matters be dealt with
expeditiously. However, it must be emphasised that recognising
this
reality in no way seeks to excuse laxity. It is more to say that,
notwithstanding the constitutional dictates of a responsive
and
accountable public administration, the reality is that public
administration in our country has over time been allowed to slide
to
a quagmire of inefficiency.’
[8]
The
applicant’s council, however, acknowledged that Portion 4 must
be retransferred and ultimately passed the necessary resolution
to
permit its retransfer to occur. It was then ascertained that Portion
4 was not registered in the applicant’s name, but
was
registered in the name of the first respondent.
[9]
This
apparently happened because the sixth respondent had allegedly
claimed to be the owner of Portion 4 and had concluded a written
sale
agreement with the first respondent on 28 September 2016 (the first
sale agreement). In the first sale agreement, it was recorded
that
Portion 4 had been sold by the sixth respondent to the first
respondent for the amount of R800 000. On the same day that the
first
respondent concluded the first sale agreement, it appears to have
also concluded another sale agreement (the second sale
agreement).
[10]
In
the second sale agreement, the seller was no longer the sixth
respondent but was the applicant. The purchaser remained the first
respondent. The second sale agreement also dealt with the sale of
Portion 4. It recorded that the applicant sold Portion 4 to the
first
respondent for R800 000. The second sale agreement was purportedly
signed by an official of the applicant, identified as
being a Mr
Keith Matthias (Mr Matthias).
[11]
Mr
Matthias, however, flatly denied signing the second sale agreement.
Various other documents were prepared to permit transfer
to occur
from the applicant to the first respondent pursuant to the terms of
the second sale agreement: a power of attorney, signed
by Mr
Matthias; an affidavit made by Mr Matthias confirming his authority
to sell Portion 4; a further affidavit made by Mr Matthias
confirming
his personal details; and a document signed by Mr Matthias requesting
a certified copy of the title deed pertaining
to Portion 4.
[12]
Mr
Matthias, again, disavows all knowledge of these documents and
asserts that he never signed any of them.
[13]
There
is no reason to doubt his latter denial regarding the last mentioned
document: his name is incorrectly spelt in the document
(his surname
was spelt with three T’s, viz ‘Mattthias’), a fact
that he would undoubtedly have noticed if he
had, indeed, been the
person who signed that document. The same spelling error regarding
his surname manifests itself in a further
document that Mr Matthias
allegedly signed requesting a certificate of registered title in
respect of Portion 4. There is no reason
to doubt any of Mr Matthias’
other denials regarding his signature. Certainly, the first
respondent does not dispute his
denials and regards them as being
truthful for it assented to the taking of the consent order.
[14]
If
there was any doubt that the transfer of Portion 4 to the first
respondent was anything but fictitious arising out of the faked
second sale agreement, it is assuaged by the evidence of the
applicant that there is a defined internal process that must be
followed
before land owned by the applicant may be sold. This is a
three step process and it would generate at least eight distinct
documents
across those three steps. None of these documents exist in
respect of Portion 4, indicating that the prescribed internal process
has not been followed. That Portion 4 had not been sold by the
applicant is put beyond doubt by the fact that it has not been paid
for Portion 4.
[15]
Faced
with this powerful narrative of ostensible wrongdoing set out in the
applicant’s founding affidavit, the first respondent,
nonetheless, delivered a notice of intention to oppose the
application and delivered an answering affidavit. At paragraph 4
thereof,
the following is stated:
‘
At
the outset of this affidavit, I wish to summarise the First
Respondent’s defence as follows…’.
The first respondent then
sets out the basis of its defence to the applicant’s claim
which, in summary, is that:
(a)
It
was not knowingly a participant to any fraud;
(b)
It
obtained bona fide title to Portion 4;
(c)
It
claimed that the applicant was not entitled to be viewed as the owner
of Portion 4 as it, on its own admission, had received
it in error;
(d)
It
claimed that the applicant’s entitlement to claim retransfer of
Portion 4 had become prescribed; and
(e)
The
applicant was estopped from disputing the first respondent’s
ownership of Portion 4.
[16]
Thus,
a considered and vigorous defence was raised by the first respondent.
In the light of these defences, the applicant was, naturally,
compelled to deliver a replying affidavit dealing with them. It
actually delivered a replying affidavit that covered some 11 pages
and it delivered a supporting affidavit that covered a further 6
pages. It also delivered a supplementary affidavit deposed to
by Mr
Matthias, now retired from the applicant, that filled another 14
pages.
[17]
The
strength of the first respondent’s defence, however, was
illusory for the first respondent abandoned all those defences
abruptly when the matter was last before this court on 11 October
2023 and consented to the terms of the consent order.
[18]
In
its answering affidavit, the first respondent claims itself to have
been the victim of fraudsters, alleging that the fourth respondent
and other unidentified members of staff of the applicant are those
fraudsters. There may be a smidgen of truth to that. While it
is so
that fraud:
‘…
vitiates
every transaction known to the law’,
[4]
it is
equally so that
motion
proceedings are generally not designed to permit a court to easily
make findings of fraud.
[5]
As Seegobin J said in
Commissioner
for the South African Revenue Service v Sassin and others
:
[6]
‘
Our
courts have consistently held that it would be unwise to decide a
disputed issue of whether fraud was committed on motion proceedings
without the benefits inherent in the hearing of oral evidence,
including discovery of documents, cross-examination of witnesses,
and
so forth.’
[19]
This
is sage advice. It is simply not possible on the papers to determine
whether the first respondent was a participant in a fraud
or a victim
of a fraud. There are indications that it was a victim of a fraud for
it
is difficult to understand why it
would sign two agreements on the same day, for in doing so, it
potentially became liable to pay
twice for the same portion of land.
[20]
The
person that represented the first respondent in the acquisition of
Portion 4 was a Mr Ismail Dhooma (Mr Dhooma). His version
is
presented through the evidence of the deponent to the first
respondent’s answering affidavit, Mr Hassen Essa Suleman (Mr
Suleman).
[7]
Mr Suleman states
that Mr Dhooma cannot remember every document that he signed but
submits that there could be no valid reason
why the second sale
agreement should be signed. Mr Dhooma cannot, in any event, recall
signing the second sale agreement. Moreover,
Mr Dhooma’s
signature on the second sale agreement:
‘…
differs
from Dhooma’s usual signature.’
How this difference
manifests itself is not specified. In all, the explanation is vague
and unimpressive. Nonetheless, for the purpose
of the resolution of
this application, I shall accept, without deciding, that the first
respondent was itself a victim of a fraud.
[21]
But
notwithstanding this assumption, it is plain that prior to consenting
to the order, the first respondent unequivocally resisted
the relief
claimed by the applicant and strove to ensure that Portion 4 remained
registered in its name. The first respondent cannot
have it both
ways: it cannot be a victim yet resist the relief claimed by the
applicant at the same time. By so doing, it delayed
the relief sought
by the applicant. The application was brought on 28 April 2021, the
answering affidavit is dated 26 August 2021,
the replying affidavit
is dated 14 November 2022 and the consent order is dated 1
1
October 2023. Almost one year after the replying affidavit was
delivered, the consent order was taken.
[22]
Ultimately,
the first respondent recognised that it could not succeed with its
defence and so conceded as much in agreeing to the
consent order. But
before it threw in the towel, the applicant had been compelled to
incur legal costs directly as a result of
the first respondent’s
conduct. I mentioned earlier in this judgment that sub-paragraph 1.8
of the notice of motion was different
to sub-paragraph 1.8 in the
consent order. It originally read as follows in the notice of motion:
‘
Any
party opposing the application shall pay the costs thereof, jointly
and severally with any other opposing party, the one paying
the
other/s to be absolved.’
Had there thus been no
opposition, there would be no basis for an order of costs. Only one
party has opposed the relief claimed
and that is the first
respondent.
[23]
It
follows that the applicant has been entirely successful in obtaining
the relief that it initially sought. The general rule is
that costs
follow the result.
[8]
I see no
reason to deviate from that general rule.
[24]
In
the result, I grant the following order: The first respondent is
directed to pay the costs of the application, including those
costs
reserved on 11 October 2023.
MOSSOP J
APPEARANCES
Counsel for the
plaintiff
: Mr P C Prior
Instructed
by:
: Luthuli Sithole
Attorneys
56
Henwood Road
Morningside
Durban
Care
of:
Austen
Smith Attorneys
Walmsley
House
191
Pietermaritz Street
Pietermaritzburg
Counsel for the
respondent
:
Ms J P Jantjies
Instructed by
: Anand-Nepaul
Attorneys
9
th
Floor, Royal Towers
30
Dorothy Nyembe Street
Durban
Care
of:
Cajee
Setsubi Chetty
195
Boshoff Street
Pietermaritzburg
Date of Hearing
: 20 February 2024
Date
of Judgment
: 20 February 2024
[1]
In so saying, I acknowledge that the wording of subparagraph 1.6 has
been amended, but the meaning of that sub-paragraph has
been
retained.
[2]
Sub-paragraphs 1.8, 1.9 and 1.10 of the consent order do not appear
in the notice of motion.
[3]
Minister
of International Relations and Co-operation and others v Simeka
Group (Pty) Ltd and others
[2023]
ZASCA 98
;
[2023] 3 All SA 323
(SCA) para 85.
[4]
Esorfranki
Pipelines (Pty) Ltd and another v Mopani District Municipality and
others
[2014] ZASCA 21
;
[2014] 2 All SA 493
(SCA) para 25. In
Lazarus
Estates Ltd v Beasley
[1956] 1 QB 702
(CA) at 712, Lord Denning uttered these well-known
and oft repeated words:
‘
No
court in this land will allow a person to keep an advantage which he
has obtained by fraud. No judgment of a court, no order
of a
Minister, can be allowed to stand if it has been obtained by fraud.
Fraud unravels everything. The court is careful not
to find fraud
unless it is distinctly pleaded and proved; but once it is proved it
vitiates judgments, contracts and all transactions
whatsoever . .
.’.
[5]
Korff
v Scheepers en Andere
1962
(3) SA 83
(W)
at 85.
[6]
Commissioner
for the South African Revenue Service v Sassin and Others
[2015] ZAKZDHC 82; [2015] 4 All SA 756 (KZD) para 47.
[7]
Mr
Dhooma did later, however, deliver a confirmatory affidavit.
[8]
Maclachlan
and another v City of Johannesburg Metropolitan Municipality and
others
[2022]
ZAGPJHC 243 para 17.