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[2022] ZAFSHC 305
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Inathi-Mbako v Manguang Metro Municipality (4253/2022) [2022] ZAFSHC 305 (7 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
CASE
NO: 4253/2022
IN
THE MATTER BETWEEN:
INATHI-MBAKO
JV
PLAINTIFF
AND
MANGAUNG
METRO MUNICIPALITY
DEFENDANT
JUDGMENT
BY:
MPAMA,
AJ
DATE
HEARD:
27 OCTOBER 2022
DELIVERED
ON:
07
NOVEMBER 2022
[1]
As early as 2009, Nugent JA in
SAPO v DE LACY
2009 (5)
SA 1
SCA
shared the following sentiments:
“
Cases
concerning tenders in the public sphere are coming before the courts
with disturbing frequency”.
[2]
This is an application for provisional sentence brought in terms of
Rule 8 of the Uniform Rules of Court concerning an award
of a tender
by the defendant to the plaintiff.
[3]
On 05 September 2022 the plaintiff instituted a provisional sentence
summons against the defendant wherein it claims payment
of an amount
of R5 713 489.23 including VAT together with interest
thereon at the rate of 7.25 % per annum as from 16
May 2022 as per
certificate no.2 issued by the duly appointed consulting engineers of
the defendant, Tsela Tsweu Consulting Engineers.
[4]
The defendant is opposed to the application. On its opposing
affidavit, the defendant first, denies that it is it is indebted
to
the plaintiff in the amount of R5 713 489.23. Second, the
defendant denies that their agent was duly authorised to
certify the
monies claimed by the plaintiff due and payable.
[5]
The background facts can be summarised as follows: The defendant
advertised a tender with contract number: C685 under the description
“Tender: bid 593: 2020/2021: Botshabelo Section R- installation
of internal water reticulation”.
[6]
The defendant appointed, Tsela Tsweu Consulting Engineers (Pty) (Ltd)
(hereinafter referred as defendant’s agent) to act
as their
consultants and agents for this contract.
[7]
The plaintiff submitted its bid and on 21 October 2021 it was awarded
the tender. The defendant’s agent handed over the
site to the
plaintiff on 14 January 2022.
[8]
One of the bidders was Down Touch Investments (Pty) (Ltd) and being
one of the unsuccessful bidders on 28 January 2022 it launched
an
urgent application in this court against the defendant and the
plaintiff (cited in the application as first and second respondent
respectively).
[9]
On 10 February 2022 this court granted the following order in favour
of Down Touch Investments (Pty) (Ltd):
“
18.2.
Pending the final adjudication of a review application to be
instituted within five (05) days of the granting of this order,
the
respondents are interdicted and restrained from in any way further
implementing or acting upon the decision of the first respondent
to
award the public tender number: MMN/593:2020/2021 styled “Botshabelo
Section R- installation of internal water reticulation
“to the
second and third respondents.
18.3.
The order in 18.2 above shall serve as an interim order with
immediate effect”
[10]
On 15 February 2022 the defendant’s agent addressed a letter to
the plaintiff advising them of the interdict, instructing
the
plaintiff to suspend all works immediately until further notice and
further ordering the plaintiff to remain on site. In
addition,
the plaintiff was instructed to wait on the defendant for a way
forward, as the defendant promised to revert back to
the plaintiff
within 72 hours regards de-establishment of the site.
[11]
On 07 March 2022, the plaintiff submitted in writing a Notice of
Intention to claim for extension of time and standing time
cost. This
notice was served on the defendant and its agent. A further notice
was issued by the plaintiff on 25 March 2022. There
were further
engagements between the plaintiff and the defendant’s agent in
trying to resolve certain issues concerning this
tender.
[12]
On 16 May 2022 the defendant’s agent, despite the court order
granted on 10 February 2022 addressed the following correspondence
to
the plaintiff:
“
MMM
/
BID 593: 2020/2012: BOTSHABELO SECTION R – INSTALLATION OF
INTERNAL WATER RETICULATION: PAYMENT CERTIFICATE NO.2
We
hereby certify that the work is correct and complete in accordance
with the specifications and contract document and certify
the payment
to an amount of R 5 713 489.23 including VAT to Inathi-
Mbako JV for the above-mentioned project.”
[13]
The plaintiff armed with the aforesaid document dated 16 May 2022,
received from the defendant’s agent instituted provisional
sentence summons on 05 September 2022 against the defendant.
[14]
The purpose of provisional sentence is to enable a plaintiff who sues
on a liquid document to obtain prompt payment by means
of a
provisional judgment without having to wait for the final
determination of the dispute between the parties.
[15]
The learned authors,
HERBESTEIN & VAN WINSEN, THE CIVIL
PRACTICE OF THE HIGH COURTS OF SOUTH AFRICA FIFTH ED, VOL 2 at
page 1313 on provisional sentence say the following:
“
A
mode of procedure provided for in the rules of court, but it existed
even in Roman – Dutch law, under the appellation ‘namptissement
‘or ‘handvulling’. The essence of the procedure
then and now is that it provides a creditor who is armed with
sufficient documentary proof (a liquid document) with a speedy remedy
for the recovery of money due without his having to resort
to the
more expensive, cumbersome and often dilatory machinery of an
illiquid action. The procedural method of provisional sentence
is no
magic wand to be used to disarm prospective defendants or dispel all
opposition, but is a well- recognised, long standing
and often- used
mode of obtaining speedy relief where the plaintiff is armed with a
liquid document. The purpose of provisional
sentence proceedings is
thus to enable the plaintiff to obtain an enforceable provisional
judgment speedily without having to wait
for the final determination
of the dispute between the parties”.
[16]
At page 1315 the aforesaid authors define a liquid document as
follows:
“
a
document in which the debtor acknowledges, over his signature or that
of a duly authorised agent, or is in law regarded as having
acknowledged without his signature being actually affixed to the
document, his indebtedness in a fixed and determinate sum of money.
Examples of documents to which the debtor or his agent has affixed a
signature are cheques, promissory notes, mortgage bonds,
acknowledgments of debt and deeds of sale”.
[17]
Joffe et al on High Court Motion Procedure: A practical Guide say the
following on onus in applications for provisional sentence:
“
The
plaintiff bears an onus of proving on a balance of probability:
(a)
the authenticity of
the defendant’s signature or the defendant’s agent
signature on the document
(b)
in the case of an
agent, the authority of the defendant’s agent
(c)
the fulfilment of
any condition the entitlement of the plaintiff to the claim evidenced
by the liquid document
(d)
all other facts
necessary to sustain a cause of action on the document concerned.
[18]
Once the plaintiff has proved (on a balance of probabilities) the
signature of the defendant or its agent, and the fulfilment
of any
simple condition giving rise to the obligation, the court will grant
provisional sentence unless the defendant produces
counterproof which
satisfies the court that the probability of success is against the
plaintiff.
[19]
The defendant may rely on defences that go behind the liquid
document. The onus is on the defendant to show that if evidence
is
heard the probabilities are that he would succeed. See
ALLIED
HOLDINGS LTD v MYERSON 1948(2) SA 961 at 967.
[20]
The applicant on its head of arguments contended that the court order
relied upon by the defendant as a defence does not relieve
the
defendant of its obligations in terms of the contract entered into
with the plaintiff and that the plaintiff has every right
to enforce
its rights despite the interdict. It was further argued that the
plaintiff remained on site as instructed by the defendant’s
agent, consequently is entitled to this payment and the defendant’s
agent was authorised to issue the payment certificate
which qualifies
as a liquid document. The plaintiff, in addition argued that the
defendant paid the plaintiff accordingly with
regard to the first
certificate despite the existence of an interdict and by relying on
their agent’s unlawful act, the defendant
was now being
disingenuous.
[21]
It was argued, first, by the defendant that the agent was not
authorised to bind the defendant by issuing the certificate
acknowledging debt when the awarding of a tender by the defendant to
the plaintiff was still a subject of litigation before this
court.
Second, the defendant argued that the defendant’s agent by
ignoring the court order and acting on this tender
acted
contemptuously and unlawfully and therefore it cannot be said it was
duly authorised to issue the certificate and acknowledge
the
defendant’s liability.
[22]
The document in possession of the plaintiff is an engineer’s
payment certificate. The defence that is being raised by
the
defendant on this document goes behind the document. The
defendant therefore bears an onus to prove that the defendant’s
agent was not authorised to issue the payment certificate, that there
is a story of a transaction behind it, and that an investigation
into
that story may show that the defendant is not liable in terms of the
liquid document. See Allied Holdings Ltd ‘s case
at 968.
[23]
In
TWEE JONGE GEZELLEN (PTY) LTD & ANOTHER V LAND &
AGRICULTURAL DEVELOPMENT BANK OF SA & ANOTHER
2011 (3) SA SA1
CC
Brand AJ said:
“
But
a defendant who relies on a defence which goes beyond the liquid
document is required to produce sufficient proof of that defence
to
satisfy the court that the probability of success in the principal
case is against the plaintiff before provisional sentence
can be
refused. If there is no balance of probabilities either way with
regard to the principal case, the court will grant provisional
sentence. It follows that if there is a balance in favour of the
plaintiff, provisional sentence will be granted. There is no closed
list of defences on which the defendant can rely. Examples in
practice of defences going behind the liquid document are numerous.
They include the defence: that the plaintiff never advanced the
amount claimed, that the liquid document was tainted with illegality;
or that the document had been obtained by fraud”.
[24]
The onus is on the defendant to show that the liquid document is
tainted with illegality. The mere allegation of illegality
is not
sufficient to discharge the onus. See
JOSEPH V HEIN
1975 (3) SA
175
at 176.
[25]
In
LESOTHO DIAMOND WORKS (1973) (PTY) LTD V LURIE 1975(2) SA
142
it was held that:
“
To
attempt in provisional sentence actions the formulation of hard and
fast rules relating to defences which might be raised or
the
enumeration of an exhaustive list of such defences is to court
serious and unnecessary trouble. Each case must of necessity
be
decided largely upon its own particular facts. Defences other than
those based upon a challenge either to the validity of the
instrument
in question or to the larger transaction of which such instrument
forms a part may therefore validly be raised to claims
for
provisional sentence”.
[26]
It is not in dispute that the plaintiff and the defendant were
interdicted and restrained by this court from in any way further
implementing or acting upon the decision of the defendant to award
the tender to the plaintiff. The plaintiff, defendant and defendant’s
agent are fully conversant of the court order.
[27]
The facts, as presented by the defendant disclose a valid defence in
law to plaintiff’s claim. The effect of the judgment
granted by
this court (in favour of Down Touch Investments) was that the
operation of a contract between the plaintiff and the
defendant is
being suspended. If one were to go behind the document presented by
the plaintiff, and investigate the story presented
by the defendant
regarding the authority of its agent to sign the certificate, the
probabilities might be against the plaintiff.
It is very difficult to
escape a thought that the certificate in possession of the plaintiff
mighty be tainted with illegality.
[28]
The defendant on its head of arguments argued that the non-compliance
with the court orders threatens a rule of law and undermines
public
confidence in our legal system. I agree with these sentiments. The
actions of the defendant’s agent tend to suggest
a wilful
disobedience and a clear disregard of the court’s order.
[29]
The defendant has managed to discharge an onus by disclosing a
defence that goes behind the liquid document presented by the
plaintiff.
[30]
Therefore the request for a provisional sentence must fail.
[31]
In the circumstances, I make the following order:
31.1
Provisional sentence is hereby refused.
31.2 The
defendant is hereby directed to file a plea within 10 days from the
date of this order.
31.3
Thereafter the normal Rules of Court as regards pleadings and further
conduct of action trials shall apply.
31.4 The
costs of the provisional sentence application are reserved for
determination by the trial court.
L.
MPAMA, AJ
On
behalf of the plaintiff:
Adv
JC Coetzer
Instructed
by
:
Lovius
Block Inc.
Bloemfontein
On
behalf of the defendant
: Adv.
DR Thompson
Instructed
by
: Raynard
& Associates Inc
Bloemfontein