Standard Bank of South Africa Limited v Young and Another (3003/2018) [2022] ZAFSHC 30 (3 March 2022)

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[2022] ZAFSHC 30
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Standard Bank of South Africa Limited v Young and Another (3003/2018) [2022] ZAFSHC 30 (3 March 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 3003/2018
In
the matter between:
GOLDFIELDS
LOGISTICS (PTY)
LTD
PLAINTIFF
and
MEC:
FREE STATE DEPARTMENT OF
POLICE,
ROADS AND
TRANSPORT
DEFENDANT
BEFORE
:
CHESIWE
J
HEARD
ON
:
23
NOVEMBER 2021
DELIVERED
ON
:      3
MARCH 2022
[1]
The
Plaintiff instituted a claim for damages amounting to R234 594-65
as amended in the particulars of claim. The damages claim
is based on
the fixed and repairs effected on the provincial road R59 between
Bothaville and Parys in the Free State. The matter
is defended.
[2]
The
Plaintiff claims for reimbursement for fixing and repairing the R59
which expenses are calculated as follow:
·
“
R22 750,10
expended by Plaintiff on payment of casual labourers hired between 14
June 2015 until 24 April 2017 to effect repairs
to the road and/or
potholes in the role;
·
R29 340,86
expended by Plaintiff purchased Bitumen emulsion for use to effect
repair to the road and/or potholes;
·
R28 710,00
expended by Plaintiff on travelling costs for transport of a
supervisor and labourers regarding repairs to the road,
with a 3
litre Ford Ranger light commercial vehicle at R11, 22 p/km AA tariff
over 2558 km in the time between 14 June 2015 and April
2017;
·
R45 936,00
expended by Plaintiff on the salary of two supervisors (to supervise
labourers and the process of repairs of the road)
at R400-00 per day
for fifty-eight (58) days between 14 June 2015 until 24 April 2017;
·
R107 857,
72 expended by Plaintiff on travelling costs for transport with a
Volvo FH40 light commercial vehicle at R11,74 p/km
AA – traffic
over 9 193km in the time between 14 June 2015 and April 2017 for
transport of labours.”
[3]
The
Defendant filed a special plea of prescription under the
Prescription
Act 68 of 1969
and non-compliance in terms of
section 3(4)
of the
Institution of Legal Proceedings Against Certain Organs of State Act
40 of 2002
and whether the necessary expenses under the
negotiorum
gestio
amounts to
damages.
[4]
Before
the parties commenced with oral arguments, Counsel on behalf of the
Defendant, Adv. Mitchley, submitted that the special plea
of
prescription is abandoned, based on the amended plea of the Plaintiff
that the claim is for expenses running from June 2015 to
2017.
[5]
Counsel
on behalf of the Plaintiff, Adv. Benade, submitted that the
abandonment of the first special plea had cost implication and
that
the court is to award costs to the Plaintiff.
[6]
Both
Counsel submitted written heads of argument with regard to the
outstanding special plea of non-compliance in terms of
Section 3
of
the Act.
[7]
The
court has to determine whether the Plaintiff has complied with the
Section 3
Notice, including the term “
debt
”
as defined in the Act and whether the Plaintiff’s
claim can be recovered under
negotiorum
gestio
with the right to be
reimbursed for the necessary and useful   expenses
incurred.
[8]
Adv.
Mitchley submitted that Defendant’s contention is that the
Plaintiff should have given notice as required by
section 3
as the
matter involved a debt owed to the Plaintiff. Counsel submitted that
the Defendant had no contractual obligation with the
Plaintiff. The
Plaintiff cannot claim for enrichment as the Plaintiff was not
impoverished. Counsel further submitted that, if the
State is not
given proper notice, the State will have to deal with countless
meritless claims against it and such claims would be
difficult to
verify with no proper notice given, as the State has a large work
force and the annual budget must be informed timeously
of any claims
against it.
[9]
Adv.
Benade submitted in oral argument that the Plaintiff seeks a claim
for reimbursement for the expenses of having repaired the
potholes
and do not claim for damages as defined in the Act. He further
submitted that the Plaintiff’s claim is sought under
negotiorum
gestio
and this does not include damages, but
a claim for the necessary and useful expenses incurred by the
Plaintiff.
Non-compliance
with
Section 3
[10]
Section
3
of the Act provides as follows:
“
(1)  No
legal proceedings for the recovery of a debt may be instated against
an organ of state unless –
(a)   the
creditor has given the organ of state in question notice in writing
of his or her or its intention to institute
the legal proceedings in
question; or
(b)   the
organ of state in question has consented in writing to the
institution of that legal proceedings-
(i)  without
such notice; or
(ii)  upon
receipt of a notice which does not comply with all the requirements
set out in subsection (2).
(2)   A
notice must –
(a) within six
months from the date on which the debt became due, be served on the
organ of state in accordance with
section 4
(1); and
(b)  briefly
set out-
(i)    the
facts giving rise to the debt; and
(ii)  such
particulars of such debt as within the knowledge of the creditor.”
[11]
The
Act further defines “debt” as:
“
debt” means any
debt arising from any cause of action –
(a) Which arises
from delictual, contractual or any other liability, including a cause
of action which relates to or arises from any-
(i)
act performed under or in terms of any law; or
(ii)
Omission to do anything which should have been done under or in terms
of any law; and
(b)  For which
an organ of state is liable for payment of damages, whether such debt
became due before or after the fixed date.”
[12]
The
Plaintiff issued the Defendant with the combined summons on 13 June
2018. The summons was served on the employee of the MEC for
the
Department of Police Roads & Transport in the Free State. The
Plaintiff did not make an application for default judgment.
On 13
June 2019, the Plaintiff proceeded to serve combined summons upon Me.
Oertel, an employee in the office of the State Attorney.
Whereupon,
the Defendant filed a notice to defend on 11 July 2019.  There
is no evidence in the papers that the Plaintiff gave
a Section 3
Notice.  Instead, the Plaintiff proceeded with instituting the
combined summons.
[13]
The
Act is clear and non-ambiguous that, a litigant who wishes to
institute action against an organ of state is required to give notice
in writing of such intention.  The notice must briefly set out
the facts giving rise to the debt and its particulars thereof.
Having
perused the file, there is no such notice in the court file, neither
a notice attached the to the papers.
[14]
The
Plaintiff’s contention that, there was no need to file a Section 3
Notice, may be misplaced as the Act is specific with regard
to any
litigation against an organ of State. Whether it is for reimbursement
for expenses incurred, an organ of state must be notified
as required
by the Act. It does not apply in this instant as the Plaintiff is not
claiming for damages, but for reimbursement. Bearing
in mind that the
Act defined debt as any debt arising from any cause of action which
arises from a delictual, contractual or any
other liability including
a cause of action which relates to or arises from the act performed
or omission to do anything. The definition
in the Act is wide enough
to include claims, be it delictual or contractual.  However, in
this instance the Plaintiff had no
contractual agreement with the
Defendant. For the fact that the Plaintiff had the intention to
institute litigation, it was therefore
obliged to give notice.
[15]
Submission
by Counsel for the Plaintiff’s that, the claim does not fall within
the ambit of the Act as the claim is for reimbursement
and not for
delictual damages, may be slightly correct, however, cognisance
should be taken that an organ of state must be made aware
of any
legal action in order to conduct its own investigations to any claim.
[16]
Adv.
Mitchley in her heads of argument quoted the South Law Commission
[1]
as follows:
“
The circumstances
under which the State can incur liability are legion.  Because
of the State’s large and fluctuating work
force and the extent of
its activities, it is impossible to investigate an incident properly
long after it has taken place… The
State is obliged by law to
follow cautious and sometimes cumbersome procedures.  Government
bodies operate on an annual budget
and must be notified of possible
claims as soon as possible… The State needs time to deliberate and
consider questions of policy
and possibility of settlements… The
State acts in the public interests and not for gain… Because public
funds are involved the
State must guard against unfounded claims…
[T]he State is an attractive target for unfounded claims.”
[17]
The
legislature in enacting that an organ of state must be notified of
the potential litigation in writing, intended that it has to
be any
act or omission that involved money of which, notice must be given to
investigate the claim, be it reimbursement for expenses
incurred by a
party who intends to litigate against the State.
[18]
I
am inclined to agree with Counsel for the Defendant that, if such
claims are not investigated, the State will be flooded with claims
with no proper notice. Litigants may take it as a free for all if the
proper mechanisms are not in place when dealing with the State
in
litigation matters. It is just and fair that any legal action against
the State, should have notice.  The State has a right
to defend
itself against claims that are not properly established.
[19]
I
perused the file and could not find any written notice in terms of
section 3(1)(a) of the Act. In my view, the Plaintiff by proceeding
to issue summons against the Defendant did not comply with the
Section 3 Notice.  According to the court stamp, the summons
and
particulars of claim were issued on 13 June 2018 and there is no
evidence of the notice.  Further, the Rule 37A (10) minutes
that
was held on 2 June 2021, the Defendant at that stage already raised a
special plea of non-compliance with section 3.  The
Plaintiff
could have remedied the situation with an application for
condonation.
[20]
The
Plaintiff in replication, admits that the summons were served for
purposes of an application for default judgment, even though
the
Defendant raised a special plea of non-compliance.
[21]
At
para 3.1 of the replication (at par 7 & 8 thereof), the Plaintiff
admits that the Defendant is an organ of state as defined
by the Act,
but replicates that the Act only covers the claim of any debt for
which an organ of state is liable for payment for damages
and that
the Act is not applicable to the Plaintiff’s cause of action.
[22]
The
Plaintiff by admitting that the Defendant is an organ of state,
therefore means it has to be notified of any potential litigation.
The court must be satisfied that the requirements are met in respect
of non-compliance with section 3 for it to condone the
non-compliance.
However, in this case there is neither an
application for condonation.
[23]
In
Minister
of Safety and Security v De Witt,
[2]
the court
said the following:
“…
s 3(1) is
couched in peremptory terms, a court has no power to condone failure
to serve a notice prior to the creditor’s institution
of the
action.”
[24]
The
Plaintiff was aware already during the Rule 37 minutes that, the
Defendant had raised a special plea of non-compliance with the
provisions of section 3 of the Act.  In my view, the Plaintiff
should have remedied the issue and one would have expected the
Plaintiff to bring an application for condonation. Instead, the
Plaintiff contends that its claim was not a debt, but relied on
negotiorum gestio.
Even if the Plaintiff relied on
negotiorum gestio
,
it would have been proper to serve a notice to the Defendant, which I
doubt the Defendant would have raised non-compliance as a
special
plea. In my view, the Plaintiff did not comply with necessary notice
in terms of section 3 neither with its provisions.
NEGOTIORUM
GESTIO
[25]
The
principle of
negotiorum
gestio
is simply
that an intervening party manages the affairs of others and thus seek
restitution or reimbursement, as in this instance,
where the
Plaintiff fixed the road and is claiming for the expenses incurred or
reimbursement.
[26]
The
Plaintiff in the particulars of claim at paragraph 5.2 states as
follow:
“
The
Defendant has been ignorant of the fact that its affairs were managed
as aforesaid [paragraph 5.1 above refers],
alternatively
,
the Defendant was aware of the management of its affairs and/or the
repairs to this particular road effected by the Plaintiff and
did
nothing about it and/or accept it, and is thus legally regarded as
having authorised it tacitly.”
[27]
At
paragraph 5.3, the Plaintiff further states that:
“
In
effecting the repairs as aforesaid the Plaintiff had the intention to
manage the affairs of the Defendant and/or to effect the
repairs to
this particular road which was the statutory responsibility of the
Defendant, and had the intention to claim reimbursements
from the
Defendant for expenses necessarily and/or usefully incurred in so
managing the affairs and/or effecting the repairs.”
[28]
Plaintiff
proceeded to list the necessary and useful expenses incurred in
paragraph 6.1 to 6.5 of the amended particulars of claim.
These have
already been stated above.
[29]
The
Defendant in its plea (Ad Paragraph 5.2) contends that:
“
20.
The Defendant admits that it had no knowledge of the Plaintiff’s
alleged maintenance of the R59 road between 2014 and 2017,
and
therefore denies same.
21.  The
Defendant denies that it was aware of the alleged management of its
affairs and/or the repairs to this particular road
was effected by
the Plaintiff, denies that it did nothing about it, and denies that
it accepted it.
22.  The
Defendant denies that it is legally regarded as having authorised the
Plaintiff’s alleged conduct tacitly or otherwise.
23.    The
Defendant specifically pleads that the Plaintiff had a duty to notify
the Defendant of its intended actions,
and take certain further
steps, as pleaded hereinbelow [sic], which duty it did not comply
with.”
[30]
The
Defendant further pleads as follows:
“
28.
In the event the repairs had to be effected as a matter of urgency,
the Plaintiff was required
inter
alia
to:
30.1 Obtain two
independent invoices from Civil Contractors evidencing the reasonable
costs of repairs.
30.2 Submit a
motivation to the Defendant as to why the repair was required.
30.3 Submit to
the Defendant evidence as to the condition of the road. Which may be
produced
inter alia
by way of photographs and or by way of
affidavits from third parties.
30.4 The
Plaintiff ought to have given the Defendant an opportunity of one
month to inspect the work and indicate whether it
is satisfactory or
not.
30.5 Thereafter
render an invoice to the Defendant after the inspection had been
completed to the satisfaction of the Defendant,
alternatively after
the month for inspection had lapsed
.
”
[sic]
[31]
In
ABSA
Bank Ltd t/a Bankfin v Stander t/a CAW Paneelkloppers,
[3]
the
court held that:
“…
there
was no question of
negotiorum
gestio
in its
ordinary sense: at no stage did the respondent have the slightest
intention to managing the affairs of the appellant, he was
acting on
the strength of an instruction by B to carry out repair work to the
damaged vehicle.”
[32]
The
court in
ABSA Bank
Ltd t/a Bankfin
supra
further held that:
“
The
fact that there was no privity of contract between the respondent and
the appellant was irrelevant…, provided the prerequisites
for such
an action had been complied with…”
As in this matter
the parties had no contractual obligation, be it direct or indirect.
[33]
In
Williams’s
Estate v Molenschoot and Schep (Pty) Ltd,
[4]
The
plaintiff effected repairs to a house belonging to defendant in terms
of an oral agreement between  A and B, who purported
to act as
A’s duly authorised agent.   The court in this matter
held that:
“
Where
a person executes repairs to the property of another upon the
instructions of a third person who had no authority to give such
instructions, the person executing such repairs is a
negotiorum
gestor
in relation
to the
dominus
,
and as such has an action against the
dominus
based on the
negotiorum
gestor
…
.A
negotiorum gestor
is entitled to claim a reimbursement
or indemnity for his actual expenditure and is not entitled to any
remuneration or profit in
addition.”
[34]
In
Buzzard
Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd en
ʼn Ander
,
[5]
the parties of a property entered into an agreement with a company in
terms of which the company would develop the property.
[35]
A
perusal on the above judgments, it stands out that there were
instructions from a third party, the parties had agreements between
them, be it oral or written agreements. And the parties are private
individuals. The difficulty of this matter is that the Defendant
is
an Organ of State and the court has to deal with a state organ that
holds public funds.   It therefore becomes difficult
for
the court to order the relief sought if indeed the necessary
procurement in terms of all the relevant legislation and policies
was
not followed.
[36]
It
may have been a good initiative from the Plaintiff’s side, but the
applicable procurement prescripts which are designed to ensure
transparency cost effectiveness, must be followed. The various
statutes such as the Public Finance Management Act 1 of 1991 (PFMA),
Municipal Finance Management Act 56 of 2003, (MFMA), Treasury
Regulations, Supply Chain Management policies are there for a purpose
and to prevent a free for all management of the State’s affairs.
Indeed, the State will be flooded with claims and litigation from
parties who will claim that they managed the State’s affairs.
Litigants would repair and fix state property without following
the
proper procurement process.
[37]
Indeed,
it is no secret that the roads in and around the Free State Province
are riddled with potholes, including the rest of the
roads around the
country.  It is tempting for businesses to try and fix these
roads, as it affects their them. However, as stated
by Counsel for
the Defendant, the Plaintiff did not render an account to the
Defendant; The Plaintiff did not give the Defendant
an opportunity to
inspect the road nor to obtain quotation from their Civil Contractors
or engineers, or informed the Defendant that
if the road is not
inspected/fixed within a period of month, the Plaintiff would be
entitled to proceed with the repairs.
[38]
Equally
frustrating as it may be for companies such as the Plaintiff and
having had to fix these potholes, the court cannot condone
such
action which may result in countless claims against the State, which
claims will not be verified as the proper processes where
not
followed nor the procurement process.  The Defendant is obliged
to follow the prescripts of PFMA, MFMA, and National Treasury,
including Supply Chain Management Policies to pay for services
rendered.  There are budget constraints for any project that
the
Defendant has to deal with.
[39]
Section
217 of the Constitution provides as follows:
“
when
an organ of state in the national, provincial or local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,
competitive
and cost-effective.”
[40]
As
the Defendant is an organ of state, it is obliged to deal with public
funds in an accountable manner. Litigants cannot be allowed
to
randomly fix State’s infrastructure and expect to claim for
reimbursement, without following the proper procurement process.
[41]
Therefore,
the relief sought by the Plaintiff ought not to be granted.
[42]
The
Plaintiff prays that the Defendant be ordered to pay the cost for the
abandonment of the first special plea.  Adv. Mitchley
submitted
that the Defendant only received a copy of the return of service on
16 November 2021 and that the Plaintiff delivered the
replication
late.  Counsel submitted that she still had to prepare for the
first special plea, and the Defendant should not
be burdened with
costs due to the Plaintiff’s failure to deliver the annexures as
well as the replication.
[43]
It
is a trite principle of our law that a court considering an order of
costs exercises a discretion.
[6]
The courts discretion must be exercised judicially.
[7]
It is also a well-established law that the general rule is that the
costs follow the result.
[44]
I
accordingly make the following order.
1.
The Plaintiff ‘s claim is dismissed with costs.
2.
The Defendant’s second special plea is upheld.
CHESIWE, J
On
behalf of Plaintiff:
Adv. HJ Benade
Instructed
by:
Symington & De Kok Attorneys
BLOEMFONTEIN
On
behalf of Respondents:   Adv. JF Mitchley
Instructed
by:

State Attorney
BLOEMFONTEIN
[1]
Report
Project 42: Investigation into the limits for the institution of
action against the State, referred to in Moise v Greater
Germiston
Transnational Local Council
[2001] ZACC 21
;
2001 (4) SA 491
(CC) at par 10. And see
Minister of Agriculture and Land Affairs v CJ Rance (Pty) Ltd
2010
(4) SA 109
(SCA) at par 13.
[2]
[2008] ZASCA 103
;
2009
(1) SA 457
SCA.
[3]
1998
(1) SA 939 (C)
[4]
1939
CPD 360.
[5]
1996
(4) SA 19
A, also 1996 (3) B ALL SA 1
[6]
Ferreira
v Levin NO & Others; Vryenhoek & Others v Powell NO &
Others
1996 (2) SA 621
(CC),
1996 (4) BCLR 441
[1996] ZACC 27
).
[7]
Motaung
v Mukubela & Another, NNO; Motaung v Mothiba, NO
1975 (1) SA 618
(O) at 631.