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2023
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[2023] ZAFSHC 293
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Mantsopa Local Municipality v West Rand Consulting (Pty) Ltd (686/2022) [2023] ZAFSHC 293 (26 July 2023)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Case No: 686/2022
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
In the matter between:
MANTSOPA
LOCAL MUNICIPALITY
Applicant
and
WEST
RAND CONSULTING (PTY) LTD
Respondent
IN
RE:
Case No: 686/2022
In the matter between:
WEST
RAND CONSULTING (PTY) LTD
Applicant
and
MANTSOPA
LOCAL MUNICIPALITY
1
st
Respondent
EMS
SOLUTIONS (PTY) LTD
2
nd
Respondent
HEARD
ON:
08 JUNE 2023
JUDGMENT
BY
:
MHLAMBI,
J
DELIVERED
ON:
This judgment was handed
down electronically by circulation to the parties’ legal
representatives by email and released to
SAFLI. The date and time for
the hand-down are deemed to be 15h00 on 26 July 2023.
[1] The respondent
in this application seeks an order for costs in terms of the
provisions of Uniform Rule 41(1)(c). The application
is opposed by
the applicant.
[2] The respondent
obtained an order for an interim interdict on 25 February 2022
against the applicant but, by agreement between
the parties, the
application was not proceeded with as the parties reached a
settlement. On 28 November 2022, the applicant sought
a rescission of
this order on an urgent basis. The respondent opposed the application
and on 1 December 2022, the court granted
an order by agreement
between the parties in terms of which the application was withdrawn
and the parties were to agree on the
costs of the application within
five days from the date of the order, failing which, either party
could set the matter down on
the opposed motion court roll solely on
the issue of costs.
[3] The respondent
contended that as the applicant withdrew the application which gave
rise to the settlement which was made an
order of the court on 1
December 2021, it was entitled to the costs caused thereby. The crisp
principle, it was submitted, is that
when a party withdraws an
action, it is tantamount to an acceptance of defeat and should pay
the costs unless there are exceptional
circumstances. The applicant
should therefore pay costs on a punitive scale as the rescission
order sought was no longer extant.
The respondents, in that
application, were compelled to oppose the application in extremely
truncated time periods and the applicant
acceded to the draft order
dealing with Part B of the application which superseded the interim
interdict. It was contended furthermore
that the court, in arriving
at its conclusion, should not consider the merits of the application.
[4] It was contended on
behalf of the applicant that the conduct of the respondent was
material to the issue of the costs order
to be made. In this regard,
the applicant referred to correspondence dated 17 October 2022 in
which the respondent advised the
applicant that the court order of 25
February 2022 was still in place, and if the applicant were to
proceed with the appointment
of a third party, it and its officials
would be in contempt of court. The respondent would then have no
other option but to carry
out the order and resort to further legal
remedies available to it. The respondent, it was contended, failed to
respond to these
allegations which were contained in the applicant’s
founding affidavit.
[5] In the given
circumstances, it is imperative to investigate the events which gave
rise to the orders of 25 February 2022 and
1 December 2022. The
interim order interdicted and restrained the applicant from
appointing EMS Solutions (Pty) Ltd (the second
respondent in that
application) as a professional service provider for the compilation
of GRAP Compliant Annual Financial Statements
and Assets Register for
the 2020/2021 financial year, pending the finalisation of the review
that the respondent instituted in
Part B of that application. The
respondent, as the applicant, sought the setting aside and/or
declaring as unlawful the procurement
process between the two
respondents in that application.
[6] In
March 2022, the parties reached an agreement in terms whereof the
applicant withdrew its opposition to the respondent’s
application, terminated its agreement with EMS and tendered the
respondent’s costs on a party and party scale. In its answering
affidavit
[1]
, the respondent
stated that the review application was abandoned on the strength of
the settlement agreement. The relief sought
in the application was
meritless as the interim order only governed the position pending the
finalisation of the review proceedings.
[2]
There was no order to rescind and the application constituted an
abuse of the court process.
[3]
[7]
On the other hand, the applicant stated that the respondent,
subsequent to the granting of the interdict, failed to submit
the
annual financial statements timeously,
[4]
made unfounded excuses for its failure to submit the financial
statements which led to the applicant being unable to source or
roll
over unspent grants
[5]
and
ultimately suspending its services to the applicant on 29 September
2022, making it difficult for the applicant to finalise
its annual
financial statements as it could not utilise the services of EMS. The
equitable share to the applicant was payable on
7 December 2022 and,
if the relevant annual financial statements and supporting documents
were not submitted to the Auditor-General,
the applicant would not be
in good standing and the equitable share would not be paid.
[6]
[8] The applicant
submitted that it faced irreparable harm if the interdict remained in
place. The late submission of the annual
financial statements in the
previous years had already caused financial damages. It contended
that the letter of 17 October 2022
was the determinative factor for
the application as the threat contained therein, left the applicant
with no other choice but to
approach the court on an urgent basis for
the rescission of the said court order. I agree. I also agree with
the submission that
fairness dictates that each party should pay its
own costs for the urgent application that was withdrawn.
[9] At the inception of
the proceedings, the applicant applied and was granted condonation
for the late filing of its heads of
argument and the payment of the
taxed unopposed costs on a party and party scale.
[10] In this
application, the successful party is entitled to the costs.
[11] Consequently,
I make the following order:
ORDER:
1. Each party shall pay
its own costs in the urgent application that was withdrawn;
2. The respondent shall
pay the applicant’s costs in the Uniform Rule 41(1)(c)
proceedings;
3. The applicant shall
pay the taxed unopposed costs on a party and party scale in the
application for the condonation of the late
filing of the heads of
argument.
MHLAMBI,
J
On
behalf of the Applicant:
Adv
N Snellenburg SC
Instructed
by:
Mohobo
Attorneys Inc.
85
Pres. Reitz Avenue Street
Westdene
Bloemfontein
On
behalf of the respondent:
Adv
A Sander
Instructed
by: Peyper Attorneys
101
Olympus Drive
Helicon
Heights
BLOEMFONTEIN
[1]
Para 4.8.
[2]
Para 4.9 of the answering affidavit.
[3]
Para 4.10 of the answering affidavit.
[4]
Paras 44-46 of the founding affidavit.
[5]
Para 54 of the founding affidavit.
[6]
Para 80 of the founding affidavit.