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[2024] ZAECELLC 12
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Eastern Cape Development Corporation v Cotterell and Others (EL518/2023) [2024] ZAECELLC 12 (16 April 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, EAST LONDON CIRCUIT COURT)
CASE
NO.: EL518/2023
Reportable No
In the matter between:
EASTERN
CAPE DEVELOPMENT CORPORATION Applicant
and
ANTHONY
CHARLES PATRIC COTTERELL NO 1
st
Respondent
RUSSEL
IAN GRIGG
N.O 2
nd
Respondent
ANITA
BHIKA
N.O 3
rd
Respondent
JUDGMENT
CENGANI-MBAKAZA AJ
Introduction
[1] This is an
application for the amendment of the pleadings in terms of Uniform
Rule 28 of the Uniform Rules of Court.
[2] The applicant
is Eastern Cape Development Corporation (ECDC), a legal entity duly
established and constituted in accordance
with Eastern Cape
Development Corporation Act 2 of 1997. The applicant’s
principal place of business is located at ECDC House,
Ocean Terrace
Office Park, Moore Street, Quigney in East London.
[3] The first,
second and third respondents are cited in their representative
capacities as co-trustees of Ronnie Motors Trust,
a trust duly
registered in terms of the Trust Laws of South Africa and trading as
Ronnie Motors.
[4] The respondents
object to the proposed amendment.
[5] For consistency
with the main action, the parties will be referred to as they were
previously. The applicant will be referred
to as ‘the
plaintiff’, and the first, second and third respondents will be
referred to as ‘the defendants.
The background
facts
[6] The plaintiff
is the owner of the immovable property currently occupied by the
defendants. On 13 March 2023, the plaintiff
initiated legal action by
issuing summons against the defendants for the delivery of property.
On 02 May 2023, the defendants filed
a plea alleging that the
plaintiff and the defendants entered a lease agreement. The
lease agreement was intended to span
a period of ten years with the
option of renewal for an additional period of thirty years. The
defendants would pay a rental amount
of R15 000 per month. In
addition to the terms and conditions of the lease agreement, the
defendants would be liable for the
payment of rates and would,
inter
alia
, be liable for the maintenance of the property. The
defendants pleaded that at the time the summons were issued, the
lease agreement
was still in effect between the parties and they have
a right to occupy the property.
[7] In pursuit of
the defendants’ plea, the plaintiff filed a notice to amend the
particulars of claim by inserting
paragraph 11 into the existing
particulars of claim. The proposed amendment reads thus:
“
Alternatively
and only in the event of a finding by the above Honourable Court that
Defendant occupies the property pursuant to
a lease agreement
concluded between the parties and annexed to the Defendants’
pleas annexure RM1 the plaintiff pleads as
follows,
“
11.1
It is denied that ‘
RM1’
constitutes a valid and binding agreement of lease.
11.2
The signature on page 2 of annexure ‘
RM1’
(that of Pamela Mfingwana) was intended by Ms Mfingwana to confirm
receipt of a letter and not a signature to an agreement concluded
between the parties.
11.3.
Ms Mfingwana
in any event was not in possession of the necessary authority
to
conclude such an agreement with the Defendant nor were any valid and
compulsory procurement procedures required in law followed
in
concluding such purported agreement of lease:
11.3.1. The Plaintiff is
a public entity as defined and referred to in Section (3)(1)(b) of
the Public Finance Management Act No.1
of 1990 as amended.
11.3.2.
Section 217(1) of the Constitution (which is peremptory) provides
that where an Organ of State or an institution identified
in National
Legislation (such as the Plaintiff) contracts for goods and services
it must do so in accordance with a system which
is fair, equitable,
competitive and cost-effective.
11.3.3. On a proper
construction of the aforesaid provisions of the Constitution the word
’contracts’ refers to instances
where an Organ of State
contracts for the acquisition of goods or services and when it
contracts for the sale and letting assets.
11.3.4 Accordingly, the
principles of fairness, equity, transparency and in particular
competitiveness and cost-effectiveness are
applicable to the
letting of assets which in ownership belong
or under the control of
an Organ of State such as Plaintiff.
11.3.5. The
above-referred to Constitutional imperative is echoed in Preferential
Procurement Framework Act N0. 5 of 2000 as amended
and the
Public
Finance Management Act 1 of 1999
.
11.3.6. The purported
agreement relied upon by the Defendant was not authorised by any
legislative provision and was contrary to
the provisions of Section
217 of the Constitution.
11.3.7. Accordingly, the
purported lease as recorded in ‘
RM1
’ was not
non-compliant with the regulatory framework referred to above and in
particular there was no
process which ensured the
selection of the respondent in a fair, equitable, transparent,
cost-effective and competitive manner.
11.3.8.
In addition, the purported lease
agreement was non-compliant with the Plaintiff’s
Property,
Policy Act and Procedure Manual (which effectively is the Plaintiff’s
supply chain policy relating to the letting
of immovable property)
11.3.9. In terms of
Clause 7 of such Policy (the policy is a public document and
available on the Plaintiff’s website) it
is mandatory for all
prospective tenants (including the Defendant) to fully complete an
application (annexure B to Policy) and
provide the following
documentation:
11.3.9.1
Proof of banking details issued by the appropriate bank.
11.3.9.2.
Latest 3 months bank statements.
11.3.9.3
Latest annual financial statements.
11.3.9.4.
Registration documents.
11.3.9.5.
Business plan.
11.3.9.6.
ID documents of owners of the company.
11.3.9.7
Resolution from the Board Members.
1.3.10. Furthermore, the
purported agreement in the present instance is not compliant with
Clause 7.1.1. of the Policy nor were
the procedures set out in Clause
7.1.2 thereof complied with.
11.3.11. There has in
addition been non-compliant with Clause 7.1.3. of the Policy in that
the purported agreement of lease deviates
from the standard lease
agreement annexure ‘’C’’ which was not
approved by the legal Department prior to
signature.
11.3.12 Of more
significance, Clause 7.1.3.7 of the Policy provides that the lease
agreement period shall be 3 to 5 years for industrial
and commercial
property and in as much as the purported lease agreement far exceeds
the stipulated period, the reason thereof should
have been documented
in the Property Allocation meeting minutes which was not the case.
11.3.13 The persons with
authority to sign a lease agreement of those listed in Clause
7.1.3.11 of the Policy.
11.4.
Accordingly, the purported agreement is unlawful and of no force and
effect virtue of non-compliance with the statutory framework
referred
to above and, under the circumstances, the Plaintiff is entitled to
collaterally challenge the Defendants’ assertion
in its Plea
that a void agreement of lease exists between the parties.
11.5
Accordingly, the Plaintiff is entitled to an order setting aside any
decision to lease the property to the Defendant pursuant
to annexure
RM1 attached to the Defendants ‘Plea and in particular is
entitled to an order reviewing or setting aside the
conclusion of the
purported lease agreement annexure ‘Between the Plaintiff and
the Defendant.
By
substituting the prayers with the following:
WHEREFORE, the Plaintiff
prays for judgment against the Defendants (The Trustees of the Trust)
as follows:
(a)
Ejectment of the Trust/and all those
holding through them from the property being RF 953 Mthatha commonly
known as N0, 8 Industrial
Road, Norwood, Mthatha.
(b)
In the alternative:
(1)
An order setting aside the decision to
conclude a lease agreement between the Plaintiff and the Defendant
(2)
An order reviewing and setting aside the
conclusion of the aforesaid lease agreement between the Plaintiff and
the Defendant.
(3)
Ejectment of the Trust/Defendants and all
those holding through them from the property being ERF 953 Mthatha
commonly known as NO.8
Industrial Road, Norwood Mthatha.
(c)
Costs of Suit.
(d)
Further and/or alternative”
[8] The defendants
object to the proposed amendment on several grounds. First, they
argue that the plaintiff’s proposed
amendment is mutually
destructive, contradictory, and argumentative. In essence, the
defendant’s objection to the plaintiff’s
proposed amended
particulars of claim is that if allowed, the proposed amendment will
render the plaintiff’s particulars
of claim
excipiable.
The last objection is that the plaintiff has failed to comply with
the requirements of Uniform Rule 53 in the institution of the
review
proceedings and no condonation is sought.
The issues
[9] The points of
adjudication are whether the proposed particulars of claim will
render the plaintiff’s particulars
of claim
excipiable
and whether to grant or refuse an application for the amendment of
the pleadings.
The legal framework
[10]
In order for the opposing party to respond to a pleading, it is
necessary for the pleader to provide a succinct
and unambiguous
summary of the relevant facts that support the pleader’s claim,
defence, or answer as the case may be.
[1]
[11]
Generally, a pleading which does not comply with the provisions of
Uniform Rule 18 of the Uniform Rules of Court may
be considered vague
and embarrassing. If the averments are contradictory and not pleaded
in the alternative, an embarrassment may
occur
[2]
.
[12]
A party who wishes to apply for the amendment of the pleadings, as in
the present case, must comply with Uniform Rule
28
[3]
of the Uniform Rules of Court.
[13] The general
approach to be adopted in applications for amendment of the pleadings
has been eloquently set out in numerous
cases and summarised by White
J in
Commercial
Union Assurance Co Ltd v Waymark NO
[4]
as follows:
“
1.
The Court has discretion whether to grant or refuse an amendment
[5]
.
2.
An amendment cannot be granted for the mere asking; some
explanation must be offered
[6]
.
3.
The applicant must show that
prima
facie
the amendment 'has something deserving of consideration, a triable
issue
[7]
'.
4.
The modern
tendency lies in favour of an amendment if such 'facilitates the
proper ventilation of the dispute between the parties
[8]
'
The
party seeking the amendment must not be
mala fide
.
3.
It must not
'cause an injustice to the other side which cannot be compensated by
costs'
[9]
.
4.
The amendment should not be refused simply to punish the applicant
for neglect.
5.
A mere loss of time is no reason, in itself, to refuse the
application.
6.
If the amendment is not sought timeously, some reason must be given
for the delay.”
The
parties’ legal submissions
[14]
The plaintiff’s counsel argued that the proposed amendment is
sought in the alternative claim and will render no
prejudice to the
plaintiff. The essence of the plaintiff’s case, so he
contended, is that the lease agreement is of no force
and effect and
therefore a subject of review; in that, the signatory was not
possessed of the necessary authority to sign the lease
agreement.
Furthermore, no valid procurement procedures were followed.
[15]
Referring to the case of
Nelson
Mandela Bay v Metro Erastyle and Others
[10]
,
counsel argued that where an organ of the state seeks to review a
decision taken by its officials, it may utilise action proceedings
and is not required to utilise the provisions of Uniform Rule 53.
[16]
The defendants’ counsel, on the other hand, identified some
errors in the proposed amended particulars of claim.
The first error
is a reference to the defendant in a singular form at paragraph 11.5
of the proposed amendment instead of the defendants.
Counsel strongly
argued that the plaintiff seeks to deny entering into an agreement
with the defendants. Despite the lack of accuracy,
the plaintiff
seeks an order reviewing and setting aside its decision to enter into
an agreement. This, so he argued, is plainly
contradictory. Regarding
the issue of the review, counsel contended that the plaintiff has not
pleaded that a decision was taken,
therefore, there is no decision to
impugn or review and set aside.
The
application of the law to the facts
[17]
The main purpose of Uniform Rule 53 is to facilitate and regulate
review applications. This is an interlocutory application
which was
brought within the trial proceedings. Our courts have accepted that
review proceedings can be instituted by way of action.
A litigant
will not be disadvantaged if he is required to institute review
proceedings by way of summons because he can call for
discovery in
terms of Uniform Rule 35
[11]
.
In my considered view, as soon as all the documents are discovered,
the defendants may file comprehensive pleas. This will cause
no
prejudice to the defendants, instead an opportunity to ventilate all
these issues during the trial proceedings will not be lost.
In this
regard, the defendants’ objection to the amendment of the
pleadings is without any merit.
[18]
Regarding the alleged contradictions which are set out in the
defendants’ objection to the amendment, it is common
cause that
the main claim relates to the ejectment. The fact that the property
belongs to the plaintiff is uncontroverted. The
alleged
conclusion of the lease agreement is challenged at paragraph 11 as an
alternative claim. This is the gist of the plaintiff’s
application for the amendment of the pleadings. In this regard, I
will apply the principle distilled in
Levitan’s
case
[12]
and conclude that since the conclusion of the lease agreement is
challenged in the alternative claim, there is no embarrassment
in the
proposed amended particulars.
[19] The last issue
relates to the reference of the defendants in a singular form. It is
not in dispute that there are three
defendants in this matter, in my
view, the typographical error cannot be allied with the vagueness of
the pleadings.
[20] For all the
reasons stated above, the application for the proposed amendment to
the plaintiff’s particulars of
claim stands to be granted. The
objection to the amendment cannot succeed.
Order
[21]
The following order is issued:
1.
The plaintiff’s application for leave to amend is
granted.
2.
The plaintiff shall bear the costs of the application for
amendment as they would have arisen had the application been
unopposed.
3.
The defendants shall pay the costs of the opposed
application for leave to amend.
N CENGANI-MBAKAZA
ACTING JUDGE OF THE
HIGH COURT OF SOUTH AFRICA
APPEARANCES
:
Counsel for the
Plaintiff
Adv: A Beyleveld SC
Instructed
by
GRAVETT SCHOEMAN ATTORNEYS
The
Hub Bonza Bay Road
Beacon
Bay
EAST
LONDON
Email:
ian@gslegal.co.za
Counsel for the
Defendants: Adv: T.S Miller
Instructed
by:
DE JAGER LODAN & INC
2
Allen Street
MAKHANDA
C/o
ABDO&ABDO
33
Tecoma Street
EAST
LONDON
Date
Heard:
08 February 2024
Date
Reserved:
08 February 2024
Date
Delivered:
16 April 2024
[1]
Uniform Rule 18 (4) of the Uniform Rules of Court.
[2]
Levitan v Newhaven Holiday Enterprise CC
1991 (2) SA 297(c)
At 298J
and 300G.
[3]
‘(1) Any party desiring to amend any pleading or document
other than a sworn statement, filed in connection with any
proceedings, shall notify all other parties of his intention to
amend and shall furnish particulars of the amendment.
(2)
The notice referred to in subrule (1) shall state that unless
written objection to the proposed amendment is delivered within
10
days of delivery of the notice, the amendment will be effected.
(3)
An objection to a proposed amendment shall clearly and concisely
state the grounds upon which the objection is founded.
(4)
If an objection which complies with subrule (3) is delivered within
the period referred to in subrule (2), the party wishing
to amend
may, within 10 days, lodge an application for leave to amend.
(5)
If no objection is delivered as contemplated in subrule (4), every
party who received notice of the proposed amendment shall
be deemed
to have consented to the amendment and the party who gave notice of
the proposed amendment may, within 10 days of the
expiration of the
period mentioned in subrule (2), effect the amendment as
contemplated in subrule (7).
(6)
Unless the court otherwise directs, an amendment authorized by an
order of the court may not be effected later than 10 days
after such
authorization.
(7)
Unless the court otherwise directs, a party who is entitled to amend
shall effect the amendment by delivering each relevant
page in its
amended form.
(8)
Any party affected by an amendment may, within 15 days after the
amendment has been effected or within such other period as
the court
may determine, make any consequential adjustment to the documents
filed by him, and may also take the steps contemplated
in rules 23
and 30.
(9)
A party giving notice of amendment in terms of subrule (1) shall,
unless the court otherwise directs, be liable for the costs
thereby
occasioned to any other party.
(10)
The court may, notwithstanding anything to the contrary in this
rule, at any stage before judgment grant leave to amend any
pleading
or document on such other terms as to costs or other matters as it
deems fit’.
[4]
1995 (2) SA 73 (TK).
[5]
Caxton Ltd and Others v Reeva Forman (Pty) Ltd D and
Another
1990
(3) SA 547 (A
)
Corbett CJ stated at 565G:
[6]
per
H Henochsberg J in
Zarug
v Parvathie NO
1962
(3) SA 872
(D)
at 876C.
[7]
per
Caney J in Trans-Drakensberg Bank Ltd (under Judicial Management) v
Combined Engineering (Pty) Ltd and Another
1967
(3) SA 632 (D)
at 641A.
[8]
Rosenberg v Bitcom
1935 WLD 115
at 117 a judgment by Greenberg J, as
he then.
[9]
Watermeyer J, as he then was, in
Moolman
v Estate Moolman and Another
1927 CPD 27
at 29.
[10]
2019 (3) SA 559 (ECP).
[11]
Mamadi and Another v Premier of Limpopo Province and others [2022]
ZACC 26.
[12]
Supra
fn 2.