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2023
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[2023] ZAFSHC 394
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Mafuma Consulting (Pty) Ltd v Brandfort Forum and Others (5520/2021) [2023] ZAFSHC 394 (13 October 2023)
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
CASE
No.:
5520/2021
In
the matter between:
MAFUMA
CONSULTING (PTY) LTD
Applicant
And
BRANDFORT
FORUM
First
Respondent
INA
BEUKES N.O.
Second
Respondent
FRANS
BESTER POSTHUMUS N.O.
Third
Respondent
JOHAN
ENGELBERTUS FOURIE N.O.
Fourth
Respondent
MASILONYANA
LOCAL MUNICIPALITY
Fifth
Respondent
LEJWELEPUTSWA
DISTRICT MUNICIPALITY
Sixth
Respondent
In
re:
BRANDFORT
FORUM
First
Applicant
INA
BEUKES
Second
Applicant
FRANS
BESTER POSTHUMUS N.O.
Third
Applicant
JOHAN
ENGELBERTUS FOURIE N.O.
Fourth
applicant
And
MASILONYANA
LOCAL MUNICIPALITY
First
Respondent
LEJWELEPUTSWA
DISTRICT MUNICIPALITY
Second
Respondent
MAFUMA
CONSULTING (PTY) LTD
Third
Respondent
JUDGMENT
BY:
VAN RHYN, J
HEARD
ON:
27 JULY 2023
DELIVERED
ON:
13
OCTOBER 2023
[1]
The applicant, Mafuma Consulting (PTY) Ltd, a private company with
its registered address and
principal place of business at Rivonia,
Gauteng, applies for the stay of the operation of the review order
granted by this court
on 10 March 2023 pending the final
determination of the rescission application brought by the applicant
under the same case number.
[2]
The application is opposed by the first, second, third and fourth
respondents (the “opposing respondents”).
The first
respondent is Masilonyana Brandfort Forum, an association with
perpetual succession which conducts its activities
as the Masilonyana
Brandfort Forum Trust with registration number IT00191/2021(T). The
trustees of the Trust, as per the Letter
of Authority issued by the
Master of the High Court on 13 August 2021, are Ina Beukes, Johan
Engelbertus Fourie and Frans Bester
Posthumus. The second respondent
is cited as Ina Beukes N.O, the third respondent is Frans Bester
Posthumus N.O. and the fourth
respondent is Johan Engelbertus Fourie
N.O.
[3]
The fifth respondent is Masilonyana Local Municipality (the
“Municipality”), a municipality
contemplated in section 2
of the Local Government: Municipal Systems Act operating under the
care of the municipal manager with
its offices situated at Welkom,
Free State Province. The sixth respondent is Lejweleputswa District
Municipality, a municipality
contemplated in section 2 of the Local
Government: Municipal Systems Act. The fifth and sixth respondents
did not oppose this application.
[4]
The applicant seeks an order in the following terms:
“
1.
That the execution and operation of the order of Loubser J dated 10
March 2023 is stayed pending the
finalisation of the rescission
application brought under the same case number 5520/2021 on 23 March
2023;
2.
Any enforcement proceedings of the court order by Loubser J dated 10
March 2023 are suspended
in terms of the Court’s general powers
to stay enforcement proceedings, alternatively in terms of rule 45A
of the Uniform
Rules of the Court.”
[5]
The background facts relevant to this application are the following:
On 1 September 2021 the applicant
was awarded a service level
agreement (SLA) on a risk basis to carry out the installation of
pre-paid electricity meters within
the jurisdiction of the
Municipality comprising of the following towns; Theunissen, Winburg,
Verkeerdevlei and Brandfort.
The applicant contends that its
ability to fulfil the requirements of the tender were fully assessed
as part of a transparent and
fair tender process.
[6]
The installation of the pre-paid meters
progressed in the towns mentioned except in Brandfort where
the
process met with opposition by way of a petition signed by some of
the residents. The opposing respondents on an urgent basis,
sought an
interim interdict pending the finalisation of a review and/or
declaratory orders pertaining to the unlawful installation
and sale
of prepaid electricity meters. The urgent application was opposed by
the applicant, the Municipality and the Lejweleputswa
District
Municipality, all three parties being represented by Kruger Venter
Inc. The interim interdict was granted on 5 November
2021.
[7]
The Municipality’s application for leave to appeal against the
interdict was dismissed as
well as its petition to the Supreme Court
of Appeal. The applicant however continued to install prepaid meters
in contempt of the
interdict. On 11 August 2022 the court declared
the applicant and Mr Manyike, who deposed to the answering affidavit
on behalf
of the applicant in the contempt proceedings, to be in
contempt of court. The application for leave to appeal against
the
contempt order was dismissed by the court on 19 August 2022.
Again Kruger Venter Inc. acted on behalf of the applicant and Mr
Manyike.
[8]
The applicant and Mr Manyike thereafter applied to the Supreme Court
of Appeal for leave to appeal.
The Supreme Court of Appeal dismissed
the application for leave to appeal on 9 February 2023. The opposing
respondents issued and
served the review application within the
15-day period. The review was heard on 21 February 2023 by Loubser J
and Jonase AJ. Judgment
was handed down on 10 March 2023.
[9]
The review court,
inter alia
ordered, that:
9.1.
The Municipality and/or the Lejweleputswa District Municipality are
interdicted and restrained from installing
any pre-paid electricity
meters in its jurisdiction and from selling electricity by means of
prepaid metering before duly and lawfully
adopting bylaws authorising
the supply and sale of electricity by means of prepaid metering,
alternatively amending or supplementing
the existing bylaws to
authorise the supply and sale of electricity by prepaid metering
and/or;
9.2
The Municipality’s council duly adopt a resolution to supply
and sell electricity by means of
prepaid meters;
9.3
The transparent determination of tariffs/charges for the distribution
and sale of prepaid electricity
must be adhered to, and/or
9.4 If
an external service provider is to be appointed to render service to
the Municipality to install and/or
sell prepaid electricity meters,
then a competitive bidding process in terms of the said
Municipality’s Supply Chain Management
Policy has to be
followed, alternatively a lawful procurement process must be complied
with;
9.5
The appointed service provider has to comply with the registration
requirements for the supply and/or
sale alternatively resale of
electricity in terms of the Electricity Regulation Act
[1]
(“ERA”), alternatively due and proper compliance with the
provisions of section 7 read with Schedule 2 of the ERA for
exemption
of the service provider for the supply, sale, resale, trading in
electricity.
9.6
The Municipality is ordered to forthwith remove the prepaid meters
already installed and to convert
to the supply of electricity by way
of conventional metering pending compliance with 9.1 to 9.5 above;
9.7
The appointment of the applicant by the Municipality to install and
administer the supply, alternatively
the sale, alternatively the
supply and sale of prepaid electricity to consumers in Brandfort is
reviewed and set aside;
9.8
It is declared that the service level agreement concluded between the
Municipality and the applicant
is invalid, void and unlawful and the
service level agreement (“SLA”) is set aside.
[10]
This application is brought in terms of the provisions of Rule 45A of
the Uniform Rules of Court (“Rule
45A”), alternatively
the common law, for the suspension of the operation and execution of
the order granted by Loubser J
(Jonase AJ concurring) in the review
application brought by the opposing respondents. It is contended by
the applicant that the
review order is the product of serious errors
of fact, of law and demonstrable bias or ulterior purpose from the
part of the first
respondent.
[11]
It is argued by the applicant that the termination of the SLA will
have disproportionate and adverse effects
on businesses and private
individuals who diligently purchase their electricity and rely on the
prepaid meters for the supply of
electricity. The applicant issued
its rescission application to be enrolled for hearing on 13 April
2023, however due to the opposition
in the rescission application,
the matter has not been enrolled for hearing. In the event of the
implementation of the orders granted
by the review court, it would
have far-reaching consequences, which would include complete
discontinuation of all electricity services,
not only at Brandfort
but also in Winburg, Verkeerdevlei and Theunissen.
[12]
On behalf of the applicant it is contended that there is no reason
for the urgent implementation of the review
order on the basis that
the respondents, more specifically the Municipality, have not
provided any indication regarding the execution
thereof and what the
way forward entails. Therefore, there is no reason to “punish”
the applicant by implementing the
orders prior to the determination
of the rescission application. The relief should be granted in this
instance since the possibility
exists that the order on which the
execution is predicated “…may be prejudicial to the
applicant who has great prospects
of success in the rescission
application”.
[13]
The application is opposed by the opposing respondents
on the grounds that the applicant has, firstly, failed
to make out a
case for the relief sought and, secondly, is not entitled to the
relief sought. The applicant has delayed the finalisation
of the
rescission application and has no standing to request any indulgence
from the court much less that any discretion be exercised
in its
favour.
[14]
On behalf of the opposing respondents, Mr Snellenburg SC
argued that the applicant did not file an answering affidavit
in the
interdict proceedings but filed a confirmatory affidavit deposed to
Mr Manyike, who also deposed to the founding affidavit
in this
application. Yet, the applicant continued to install prepaid meters
in contempt of the interdict granted by Opperman J
on 5 November
2022. The opposing respondents were constrained to bring
contempt proceedings after several attempts to get
the applicant to
refrain from its contemptuous conduct were unsuccessful.
[15]
The applicant furthermore did not oppose the review application. The
review application was heard on
this court’s unopposed roll
subsequent to the Municipality filing a notice to abide by the courts
decision. The applicant
furthermore has no prospects of success in
the rescission application.
[16]
It is therefore contended on behalf of the opposing respondents that
it is evident from the background facts
relevant to this matter, that
the applicant’s conduct in these matters have been
mala
fide
. The applicant has approached the court with “dirty
hands” as it has contravened the interdict granted by this
court
and cannot expect to receive sympathy from the court.
[17]
The review application and thus the order which the applicant seeks
to suspend, also concerns the conduct
of the Municipality in
procuring the unlawful installation of prepaid electricity meters as
well as the unlawful sale of electricity
by means of prepaid
electricity metering within Brandfort. The Municipality is
constrained to act in accordance with the governing
legislation,
being the Constitution of the Republic of South Africa,
[2]
the Local Government: Municipal Systems Act
[3]
(the “Systems Act’) and the ERA.
[18]
It was not disputed in the review application that:
18.1 no
public participation process was followed prior to commencing with
the installation of prepaid electricity
meters;
18.2 no
bylaws were adopted by the Municipality to provide for the metering
and sale of electricity by means of
prepaid meters;
18.3 no
resolution was taken by the municipal council to migrate from the
conventional method of supplying, metering
and sale of electricity to
prepaid supply, metering and sale of electricity;
18.4 none of
the peremptory requirements for the appointment of the applicant as
service provider in accordance with
the criteria and processes set
out in the Systems Act were followed;
18.5 the
Municipality failed to determine and/or adopt tariffs for the sale of
prepaid electricity nor included the
same in a duly adopted and
implemented tariff policy as envisaged in the Systems Act;
18.6 the
National Energy Regulator (Nersa) never approved the sale of
electricity at a tariff were no facts underlying
the tariff was known
and not contained in a tariff policy;
18.7 the
Municipality relinquished control of the payments for the prepaid
electricity to the applicant contrary to
the prohibition contained in
the Systems Act.
[19]
From the contentions made on behalf of the opposing respondents, the
findings made by the review court and
the fact that the Municipality
abided by the review court’s decision, it is evident that the
applicant is not able to address
the unlawful and materially flawed
nature of the Municipality’s conduct in the appointment of the
applicant as service provider
to install prepaid electricity meters.
[20]
The applicant moves for the rescission of the whole order of the
review court whilst it has no standing to
move for the rescission of
those orders directed at the Municipality and which the Municipality
gave notice they would abide by.
On this point alone the application
for the stay of the orders granted by the review court should fail.
[21]
The applicant’s application for the rescission of the review
court’s order is based upon the
provisions of Rule 42(1)(a),
alternatively in terms of the common law,
inter alia,
on the
basis that the applicant was not notified of the review application
by Kruger Venter Inc., its former attorneys of record.
However,
Kruger Venter Inc. was appointed to act on behalf of Mr Manyike to
deal with the contempt of court application and the
appeal thereto.
It is argued that the notice to abide filed by the Municipality in
the review application was done without the
knowledge of the
applicant in this matter. The point made by the applicant is that the
said attorneys merely acted on its behalf
in certain of the
litigation conducted between the parties and not in respect of all
the applications or matters.
[22]
It is the applicant’s contention that it should have been
present at the review proceedings and due
to not obtaining any
knowledge of the review proceedings, material facts were withheld
from and/or deliberately misrepresented
to the court by the opposing
respondents. From the contents of the judgment by the review court it
is however clear that Adv. Grewar,
a member of the local Society of
Advocates, appeared on behalf of the applicant and placed on record
that the application is not
opposed by the applicant. Whatever the
situation, it will be dealt with at the hearing of the application
for the rescission of
the review court’s order.
[23]
From the” Record of Decision” in the review application
it is evident that the tender was for
transactional advisory services
for the Lejweleputswa Development Agency. The tender was not for the
installation of prepaid meters
in the jurisdictional area of the
Municipality. The applicant did not provide any evidence that it
tendered for and was appointed
to install prepaid electricity meters
nor that the Municipality did not ‘piggyback’ on the
existing contract in terms
of the provisions of Regulation 32, but
that the Municipality concluded a direct contract with the applicant.
Due to the failure
of the Municipality to follow due process the
supply and sale of prepaid electricity constitutes unlawful conduct.
[24]
A court’s decision is operational and executable
once it is handed down by the court. The court may, on
application,
suspend the operation and execution of any order for such period as
it may deem fit.
[4]
The court
has, apart from the provisions of Rule 45A, a common law inherent
discretion to order a stay of execution and to suspend
the operation
of an order granted by it. The power to do so will be exercised
sparingly and only in exceptional cases. Where
an application
to vary, rescind or set aside a court’s decision is instituted,
the application does not automatically suspend/stay
the court’s
order.
[25]
In
Gois
t/a Shakespeare’s Pub v Van Zyl and Others
[5]
the court held that the stay of execution will be granted where
the underlying causa is the subject matter of an ongoing
dispute
between the parties. It was further held that an application for
review qualifies as an attack on the underlying causa.
As a
general rule the court will grant a stay of execution where real and
substantial justice requires such a stay or where
injustice will
otherwise be done.
[26]
The review court held that the Municipality failed to act in
accordance with the law. The procurement process
was not followed by
the Municipality and from the documents supplied for purposes of the
review proceedings, it is evident that
the tender pursuant to which
the applicant was appointed, was not for the installation of prepaid
electricity meters. The SLA concluded
between the Municipality and
the applicant was contrary to the empowering provisions of the
applicable legislation and was thus
unlawful and unconstitutional.
[27]
In
Lavelikhwezi
Investments (Pty) Ltd and Others v Mzontsundu Trading (Pty) Ltd and
Others
[6]
the court held that:
“
The whole
constitutional framework and the rule of law have, as their pillars,
the unhindered execution of court orders and obedience
to them by all
citizens, especially those to whom they apply. The force of court
orders lies not in their being issued but in their
execution once
they are issued. It is this principle that is liable to be tempered
with under strictly circumscribed and exceptional
circumstances and
for very valid reasons. That this is so appears from the
Constitution itself.”
[28]
The principle of legality applies to government institutions and
governed alike. The law cannot and
does not countenance an
ongoing illegality. To grant the relief sought by the applicant would
be in contravention of legislative
prescripts. I am of the view that
the non-observance or omission to comply with the law, be it law
based on common law or statutory
provision or even regulations
promulgated thereunder, remains unanswered by the applicant in that
these challenges have not been
seriously grappled with in its
founding, nor in its replying affidavit. It has merely stated
that the applicant’s ability
to fulfil the requirements of the
tender were fully assessed as part of a transparent and fair tender
process. This is not what
the review court found.
[29]
In its founding affidavit the applicant contends that it is not
asserting a right in the strict sense, but
a discretionary indulgence
based on the apprehension of justice to all the parties who will be
affected by the adverse effects
that the termination of the SLA will
have. The contention is therefore that the termination of the SLA by
the review court during
January 2023 resulted in the interruption
and/or termination of the electricity supply to residents of
Brandfort and the other
towns within the Municipality’s
jurisdiction.
[30]
In their answering affidavit this contention is answered by stating
that the conventional electricity supply
and metering will simply be
followed by the Municipality and no interruption of the electricity
supply will occur. In any
event, the review order was handed
down on 10 March 2023 and the opposing respondents would have been
able to ascertain whether
any such devastating results ensued by the
time of deposing to the answering affidavit on the 4
th
of
July 2023. None was mentioned. On this ground therefore the
application to stay or suspend the execution and operation of the
order by Loubser J should fail.
[31]
The doctrine of “unclean hands” is a legal principle in
common law and is relied upon when a
party seeking relief from a
court has acted unethically or unlawfully in relation to the matter
at hand. The unclean hands doctrine
is used as a defence against such
a party’s claims. The purpose of the unclean hands
doctrine is to maintain fairness
and integrity in the legal system
and is based on the principle that a party should not be allowed to
benefit from their own wrongdoing
or unlawful behaviour.
[32]
In their answering affidavit the opposing respondents referred to
several instances where the applicant acted
mala fide
i.e., by
refusing to give an undertaking to stop the installation of prepaid
electricity meters pending finalisation of the interdict
and review
applications. It is averred that the applicant actually increased the
installation of prepaid meters during this period.
The applicant
furthermore did not oppose the interdict proceedings and elected to
file a confirmatory affidavit deposed to by Mr
Manyike. Subsequent to
the interim interdict being granted on 5 November 2021, the applicant
continued to install prepaid meters
in contempt of the interdict with
the result that the court declared the applicant and Mr Manyike to be
in contempt of court and
sentenced them.
[33]
Mr Snellenburg SC argued that the applicant has absolutely no
standing to request any indulgence from the
court much less that any
discretion be exercised in its favour as a result of its contemptuous
behaviour and dirty hands with which
the applicant now approaches
this court for relief.
[7]
I
agree. This is yet a further aspect which has to be taken into
consideration in weighing-up all the relevant facts and factors
when
called up to exercise a discretion whether considerations of real and
substantial justice are sufficiently engaged to warrant
suspending
the execution of the order of the review court.
[34]
The failure of the applicant to proceed with the rescission
application is a further factor to be considered.
The judgment in the
review application was handed down on 10 March 2023. The rescission
application was issued on 23 March 2023.
The answering affidavit was
filed on 24 April 2023. At the hearing of this matter, on 27 July
2023, the applicant’s replying
affidavit had not yet been
filed. Certain defects in the application was objected to by the
opposing parties, which necessitated
further applications by the
applicants.
[35]
On behalf of the opposing respondents it is contended that there is
no reason to justify the delay in the
finalisation of the review
application. The applicant has evidently failed to file its
replying affidavit within the
dies
allowed in terms of the
Rules of Court. The applicant does not provide any reasonable
explanation for the delay, however, relies
upon the injustice and the
disproportionate and adverse effects that the termination of the SLA
will have in the event of this
application being dismissed.
[36]
The appointment of the applicant by the Municipality was
unlawful. South Africa is a State founded on the
supremacy of
the Constitution and the rule of law. All the organs of
state have the responsibility to ensure that processes
undertaken
under auspices of programs set out by such organs of state, are
undertaken in accordance with the law. Should
circumstances, therefore, arise which excite suspicion about the
legality of any process undertaken under auspices of an organ
of
state, the organ of state concerned has the responsibility to be
responsive to such suspicious circumstances. The fact that
the
Municipality initially, filed a notice of its intention to oppose the
review application and then, without filing an answering
affidavit,
thereafter abided with the court’s decision, is an unequivocal
indication of the Municipality conceding to the
submissions and facts
tendered by the applicant (being the opposing respondents) in the
review application.
[37]
The applicant is not entitled to seek the rescission of the whole of
the order granted by the review court
on the basis that the
Municipality obviously conceded that it did not follow the correct
procedure to implement the migration and
sale of electricity by
prepaid meters. The relief sought by the applicant is therefore not
competent. The application by the applicant
is self-serving.
[38]
The Constitution and the rule of law establish a strong principle
supporting the sanctity of valid and binding
court orders.
Furthermore, the persons in whose favour such orders have been issued
have the right to enforce them.
[8]
I am of the view that, based on the information available before this
court, the rescission application has no prospects of success.
[39]
On the facts of this matter I am not persuaded that considerations of
real and substantial justice are sufficiently
engaged to warrant the
suspension of the execution of the order granted by the review
court.
[40]
The applicant contends that it not only litigates for the vindication
of its constitutional rights, but also those of the citizens
of the
towns affected by the order granted by the review court. As a result,
the Biowatch principle should apply in the event of
this application
being dismissed. I am not convinced that the Biowatch principle
applies when private parties, such as the applicant
and the opposing
respondents are involved in litigation. In any event I am also not
convinced that the present application relates
to constitutional
litigation. There are no reasons to deviate from the general rule
that costs follow the result.
[41]
ORDER:
1.
The application is dismissed with costs.
I
VAN RHYN
JUDGE OF THE HIGH COURT,
FREE
STATE DIVISION, BLOEMFONTEIN
On
behalf of the Applicant:
ADV.
M MATOME
Instructed
by:
WEBBERS
ATTORNEYS
BLOEMFONTEIN
On
behalf of the 1
ST-
4
TH
Respondents:
ADV.
N SNELLENBURG SC
Instructed
by:
SYMINGTON
DE KOK ATTORNEYS
BLOEMFONTEIN
[1]
Act 4 of 2006.
[2]
1996.
[3]
Act 32 of 2000.
[4]
Rule 45A of the Uniform Rules of Court.
[5]
2011 (1) SA 148 (LC).
[6]
(1043/2022) [2022] ZAECMHC 6 (12 April 2022) at [18].
[7]
At Khaile v Administration Board, Western Cape
1983 (1) SA 473
(C)
at 480.
[8]
MEC for Public Works, Eastern Cape and Another v Ikamva Architects
CC
2023 (2) SA 514
(SCA) at para 33.