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[2011] ZASCA 247
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Diggers Development (Pty) Ltd v City of Matlosana and Others (824/2010) [2011] ZASCA 247; [2012] 1 All SA 428 (SCA) (1 December 2011)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 824/2010
In the matter between
DIGGERS DEVELOPMENT (PTY) LTD
….................................
Appellant
and
CITY OF MATLOSANA AND ANOTHER
…......................
First
Respondent
ISAGO @ N 12 (PTY) LTD
….........................................
Second
Respondent
Neutral citation:
Diggers
Development v City of Matlosana
(824/2010)
[2011] ZASCA 247
(1 December 2011)
Coram:
CLOETE, PONNAN, MAYA, MHLANTLA JJA and
PETSE AJA
Heard:
1 November 2011
Delivered:
1 December 2011
Summary:
Property – deed of sale of
municipal land subject to suspensive condition – provisions of
s 79(18) of Transvaal Local
Government Ordinance 17 of 1939 complied
with – agreement of sale concluded on 2 October 2007 valid –
appeal dismissed.
___________________________________________________________
ORDER
___________________________________________________________
On appeal from:
North Gauteng High Court,
Pretoria (Murphy J sitting as court of first instance):
1 The appeal is dismissed with costs.
2 The appellant is ordered to pay the respondents' costs
including the costs of two counsel in each case.
___________________________________________________________
JUDGMENT
___________________________________________________________
CLOETE
et
MHLANTLA JJA (PONNAN, MAYA JJA,
PETSE AJA concurring):
[1] This appeal is against a judgment of Murphy J
sitting in the North Gauteng High Court, Pretoria in terms of which
the learned
judge dismissed an application launched by the appellant
against the respondents.
[2] The appellant, Diggers Development (Pty) Ltd, is the
registered owner of immovable property, Remaining Extent of Erf 2151,
Klerksdorp
Extension 33 situated within the boundaries of the first
respondent, a municipal council as envisaged in the Transvaal Local
Government
Ordinance 17 of 1939 (the Ordinance). The appellant
developed and operates a shopping centre known as Flamewood Walk. It
had sought
an order reviewing and setting aside the first
respondent's council resolution dated 5 February 2009 and an order
declaring the
deed of sale dated 2 October 2007 concluded by the
first and second respondents invalid and unenforceable. Its interest
in seeking
this relief will appear later in this judgment. The first
respondent is the City of Matlosana, a local authority in whose
jurisdiction
the appellant's centre is situated and owner of the
immovable property referred to in the deed of sale. The second
respondent is
a special purpose vehicle and development company of a
consortium of five original shareholders called Anglo Saxon Group 5.
[3] In order to appreciate the issues it is necessary to
have regard to the factual background which we propose to set out in
chronological
order. During September 2006 the first respondent
caused a notice to be published in various newspapers and invited
proposals to
enhance and promote development along the N12 corridor
between Klerksdorp and Stilfontein on land of approximately 1172.65
hectares.
This land comprised immovable properties which had been
registered in the name of the first respondent. The request for
proposals
emphasized that the proposed development should ensure 'the
maximum connectivity to the surrounding context in order to achieve
the maximum economic benefits . . . , extend bulk services and the
broadening of Council's tax base; . . . that the proposals should
be
made for the release of the Council-owned land in the marketplace'.
[4] A number of developers responded to the request and
submitted proposals. One of these developers was the second
respondent.
The appellant did not respond to the invitation nor did
it register its intention to make a presentation in regard to the
development.
[5] On 23 March 2007, the first respondent resolved in
terms of s 115 of the Local Government: Municipal Finance Management
Act
56 of 2003 (the MFMA) to appoint the consortium of the Anglo
Saxon/Group 5 for the planning and development of the N12 corridor
subject to an agreement to be entered into with the first
respondent's council for the development of 1172 hectares of vacant
land adjacent to the N12 corridor. This resolution was signed by the
first respondent's municipal manager and the executive mayor.
[6] Subsequent to the appointment of the second
respondent as the preferred provider, a written agreement for the
sale of the land
was concluded on 2 October 2007. The purchase price
thereof was R20 million. The sale was subject to the following
suspensive conditions:
'This agreement save for the provisions of clause 4 and clauses 11,
16, 18, 19, 20, 22 and 23 is subject to the suspensive conditions
that the seller:
4.1.1 provides the purchaser with a certificate from either the head,
legal department or the municipal manager of the seller that
the sale
of the land to the purchaser –
4.1.1.1 complies with s 79(18) of the Local Government Ordinance 17
of 1939 (the Ordinance);
4.1.1.2 has complied with s 84 of the Local Government: Municipal
Systems Act 32 of 2000 (the Systems Act);
4.1.1.3 has complied with the provisions of the MFMA, in particular
sections 14, 20, 33, 90, 110(3), 116 and 168 thereof;
4.1.2 the full council of the seller will, after performing all the
requirements, as set out in the legislation applicable to local
government in respect of the sale of the land as contemplated herein,
adopt a final resolution to endorse the sale of the said
land in
terms of this agreement.
4.2 . . .
4.3 Unless the conditions in clause 4.1 are duly fulfilled on or
before the first anniversary of the date of signature hereof,
this
agreement, save for the provisions of this clause 4 and clauses 11,
16, 18, 19, 20, 22 and 23 shall never become of force
or effect and
neither party shall have any claim against the other arising from the
entering into this agreement, the implementation
thereof and/or the
agreement never becoming of force or effect. The Purchaser shall be
entitled to extend the period for the fulfilment
of such conditions
on one or more occasions and for a maximum period of one year on each
such occasion by giving written notice
to that effect to the Seller
before the date for the fulfilment of such conditions.'
[7] Further terms of the sale agreement were the
following:
(i) The land was sold to the second respondent for the
purpose of the resolution taken on 23 March 2007.
(ii) It was stipulated in clause 9 that the first
respondent would at all times support the second respondent in
causing townships
to be established and proclaimed, and in so doing
would comply in all material respects with all laws, government
approvals, applicable
consents and legal requirement thereto,
including, without limitation, consents and legal requirements
relating to environmental
matters.
(iii) Occupation of the land or portions thereof was in
terms of clause 11 granted to the second respondent prior to
transfer, to
enable the second respondent to commence construction of
improvements and the installation of services. It was further
recorded
that the second respondent would from the time of occupation
enjoy all rights and be liable for all obligations arising out of
ownership of the land or portions thereof.
(iv) The first respondent undertook in terms of Clause
16 to use its endeavours to assist the second respondent and grant
authority
to it to expedite the cancellation or disposal of any
surface rights, undermining rights or permits or restrictive
conditions which
are required to be cancelled by the mining
authorities.
(v) Clause 18 dealt with the parties' rights on breach;
clause 19 with dispute resolution and clause 22 with the parties'
domicilia.
None is relevant
for present purposes and we mention them only because their
provisions were not subject to the suspensive conditions
in clause 4.
(vi) Clause 22 contained, amongst other provisions, a
recordal wherein the
parties
undertook to do all things as may
be necessary, incidental or conducive to the implementation of the
terms, conditions and import
of the agreement. The reason for our
emphasis that it was the parties to the agreement that gave the
undertaking will become apparent
towards the end of this judgment.
[8] The first respondent in its endeavour to comply with
the legislative requirements, published a notice in terms of s
33(1)(
a
)(i)(
bb
) of the MFMA read with s 21A of the
Local Government: Municipal Systems Act 32 of 2000 (the Systems Act)
on 21 May 2008. It gave
notice of its intention to conclude a
contract which would impose financial obligations on the municipality
beyond the three-year
period covered in the annual budget for that
financial year and invited the local community and other interested
persons to submit
comments or representations in respect of the
proposed contract by no later than 4 August 2008. This notice was
again published
on two further occasions, on 5 June 2008 and 21
November 2008 respectively. The first respondent also published a
notice in terms
of s 79(18)(b)(ii) of the Ordinance on 21 November
2008.
[9] On 12 June 2008, the office of the municipal manager
instructed Mr de Waal, a professional valuer, to conduct an
evaluation
of the properties and provide a market value thereof. A
valuation report was submitted six days later in terms of which the
properties
were valued at R19 167 500.
[10] On 29 July 2008, the appellant's attorney objected
to the sale as advertised in terms of s 33 of the MFMA on the basis
that
the agreement had been concluded without compliance with the
provisions of the MFMA or the Systems Act and as a result that the
entire process followed by the first respondent was ultra vires
.
Various objections from interested parties were received and
considered by the first respondent. It further sought advice from
the
relevant government departments with regard to compliance with the
statutory requirements. The appellant’s attorneys
subsequently
expressed its wish to make comments and representations and sought
certain information.
[11] On 30 January 2009, the first respondent's
municipal manager signed a certificate referred to in clause 4.1.1 of
the agreement
of sale to the effect that the sale of land complied
with the statutory provisions. On 4 February 2009, a report called
'Item to
Council' was submitted to council for its consideration.
This was a 60-page document which dealt with the steps taken to
comply
with statutory requirements governing the contract of sale. As
this was a voluminous document a workshop for the benefit of the
councillors was held on the same day. The contents of the document
were explained to the councillors and they were afforded an
opportunity to raise their concerns.
[12] On 5 February 2009, the first respondent’s
council held a public meeting and considered the report. It adopted a
resolution
approving the entire written agreement of sale entered
into between the first and the second respondents on 2 October 2007
'exactly
as it should be executed'.
[13] After the adoption of the resolution, the
respondents proceeded to implement the terms of the agreement. On 19
May 2009, the
properties in extent of 1124.4501 hectares were
transferred into the name of the second respondent, which thereafter
caused a mortgage
bond to be registered over the property. It further
established a township known as Klerksdorp Extension 38 on a portion
of land
totalling approximately 61 hectares which comprised six erven
and three parks. On 22 July 2009, the first respondent's attorneys
provided a copy of the council’s resolution to the appellant's
attorneys. The purchase price of the immovable property was
settled
in two tranches, to wit, R3 million was paid on registration of
transfer and the balance of R17 million was paid on 27
July 2009.
[14] On 4 August 2009, the appellant launched an
application in the court below wherein it sought an order reviewing
and setting
aside the council's resolution and an order declaring the
agreement of sale invalid and unenforceable. The application was
opposed
by the respondents on the basis that all the statutory
requirements had been complied with and that the suspensive
conditions had
been fulfilled. The respondents further contended that
the motives of the appellant for launching the application were mala
fide;
that it had done so almost six months after the resolution of
council, after its application for the extension of its shopping mall
had not been approved by the first respondent and after it had
discovered that another developer was purchasing the property from
the second respondent to develop a regional mall next to the N12.
[15] The respondents continued with the implementation
of the sale agreement despite the pending application. On 8 September
2009,
the second respondent sold 22.1203 hectares of land to West
Ridge Shopping Centre, which became known as Matlosana Mall. The
process
of registration of transfer is pending. It was intended that
a regional shopping mall would be constructed and developed on the
property and that mall would compete for business with the mall
operated by the appellant – hence the appellant's interest
in
these proceedings. The second respondent also applied for the
rezoning of certain erven in order to allow for the development
of
the mall. The application for rezoning was opposed by the appellant.
On 18 September 2009, the appellant launched an urgent
application
for an interdict. Two days later, the first and second respondents
concluded a Municipal Services Agreement.
[16] The two applications were subsequently consolidated
in terms of a directive issued by the Judge President of the court
below.
The matter came before Murphy J. It was submitted on behalf of
the appellant that the procedure adopted by the first respondent
in
complying with the provisions of s 79(18)(b) of the Ordinance and ss
14 and 33 of the MFMA was incorrect. According to the appellant,
the
first respondent had been obliged to comply with these provisions
before concluding the agreement of sale. It therefore sought
an order
declaring the deed of sale invalid and unenforceable. The
respondents, on the other hand, contended that there had been
substantial compliance with the relevant legislative provisions. They
thus sought an order dismissing the application on the basis
of the
delay rule as well as the fact that they had complied with the
applicable statutory provisions.
[17] The learned judge held that the principle
enunciated in
Corondimas v Badat
1946 AD 548
(discussed below)
was applicable as the sale of the property was subject to suspensive
conditions. The judge further held that
the first respondent had
complied with the relevant legislative provisions before the
agreement of sale became unconditional and
therefore enforceable. The
judge accordingly held that there was no basis for declaring either
the resolution of council or the
agreement of sale invalid. In the
event, the court below dismissed the application with costs. The
appeal is before us with the
leave of that court.
[18] Before dealing with the issues
we must express our disapproval in the manner in which the appellant
compiled its founding affidavit.
It is trite that in motion
proceedings affidavits serve not only to place evidence before court
but also to define the issues between
the parties.
In
Minister of Land Affairs and
Agriculture v D & F Wevell Trust
2008
(2) SA 184
(SCA)
1
para 43 Cloete JA stated:
‘
It is not proper for a party in motion
proceedings to base an argument on passages in documents which have
been annexed to the papers
when the conclusions sought to be drawn
from such passages have not been canvassed in the affidavits. The
reason is manifest -
the other party may well be prejudiced because
evidence may have been available to it to refute the new case on the
facts. The
position is worse where the arguments are advanced for the
first time on appeal. In motion proceedings, affidavits constitute
both
the pleadings and the evidence.’
[19] In this matter the appellant recited legal
submissions in its founding affidavit without any foundation and
annexed the 60-page
Item to Council that, we have said, dealt with
the steps taken to comply with the statutory requirements and had
been furnished
to the first respondent's Council. The appellant did
not identify the portions of the document on which reliance would be
placed
nor did it provide an indication of the case which was sought
to be made on the strength thereof. It did not raise any issue nor
challenge the correctness of the document or the first respondent's
compliance with any provision. The appellant thereafter raised
new
issues and attempted to bolster its case in its replying affidavit.
Such conduct cannot be countenanced.
[20] Before us on appeal, the
appellant assailed the validity of the deed of sale. The crux of the
appellant's challenge is that
the first respondent had to comply with
s 79(18)(b) of the Ordinance and s 33 of the MFMA before the
conclusion of the sale agreement
dated 2 October 2007. Put
differently, the issue raised by the appellant was not
non-compliance, as a fact, with the statutory
provisions but the
timing of the process; its argument was that such compliance had been
compromised because the sale agreement
was signed prior to compliance
with the applicable statutory provisions. In this regard counsel for
the appellant relied on the
decision of
Ferndale
Crossroads
Shareblock
(Pty) Ltd v City of Johannesburg Metropolitan Municipality
(unreported
judgment, case no 3879/08 WLD).
2
We will later show how the facts of
that case are distinguishable for the reasons that appear below.
Counsel submitted that the
respondent had also failed to comply with
ss 14 and 33 of the MFMA.
[21] We turn now to deal with the primary issue, that is
the argument that the first respondent had not complied with the
provisions
of s 79(18)(b) of the Ordinance. Section 79(18) provides:
'The Council may do all or any of the following things, namely –
. . .
(18)(a) Notwithstanding the provisions of the Townships Act, 1907
(Act 33 of 1907, Transvaal), but subject to the succeeding paragraphs
and the provisions of any other law –
(i) let, sell exchange or in any other manner alienate or dispose of
any movable or immovable property of the council: Provided
that where
a council exchanges immovable property for other property, the other
property shall be wholly or predominantly immovable;
. . .
'(b) Whenever a council
wishes
3
to exercise any of the powers conferred by
paragraph (a) in respect of immovable property, excluding the letting
of any other property
than land in respect of which the lease is
subject to section 1 (2) of the Formalities in respect of Leases of
Land Act, 1969 (Act
19 of 1969), the council shall cause a notice of
the resolution to that effect to be –
(i) affixed to the public notice board of the council; and
(ii) published in a newspaper in accordance with section 91 of the
Republic of South Africa Constitution Act, 1983,
in which any person who wishes to object to the exercise of any such
power, is called upon to lodge his objection in writing with
the town
clerk within a stated period of not less than fourteen days from the
date of the publication of the notice in the newspaper:
Provided that
where a council wishes to alienate or dispose of immovable property
to the State or a statutory body, the Administrator
may exempt the
council from all or any of the provisions of this paragraph.'
[22] It is clear from this section that it is triggered
once the council 'wishes' to exercise any power referred to in s
79(18)(a).
It must then publish the notices to enable persons to
object. The appropriate dictionary meaning of the word 'wish' in the
Shorter
Oxford English Dictionary is:
'2. A desire expressed in words, or the expression of such.'
There is a difference between 'wish' and 'contemplate',
the latter word being defined in the same dictionary as:
'1. To look at with continued attention . . . 2. to view mentally, to
meditate upon, ponder, study. 3. to consider in a certain
aspect.'
A person who 'wishes' to do something, has decided to do
so; a person who contemplates doing something has not yet decided
whether
or not to do so. The section uses the word 'wishes' in two
places: 'whenever a council wishes to exercise any of the powers and
'any person who wishes to object. Both in context connote a settled
intention. But that was not the position when the sale agreement
was
signed, as we shall now demonstrate: no final decision to alienate
the land was taken before the notice of intention to do
so was
advertised and when the council of the first respondent decided to do
so, there had been compliance with the requirements
of the section.
[23] It is not in dispute that the
agreement of sale contained suspensive conditions as set out in
clause 4.1. The authors R H Christie
and G B Bradfield
4
state that a condition precedent or
suspensive condition suspends the operation of all or some of the
obligations flowing from the
contract until the occurrence of a
future uncertain event. The author A J Kerr
5
describes a suspensive condition as
one which suspends the operation or effect of one or some or all of
the obligations until the
condition is fulfilled. In
Corondimas
v Badat
6
Watermeyer CJ enunciated the
principle relating to a contract of sale subject to a suspensive
condition, as follows:
'[W]hen a contract of sale is subject to a true suspensive condition,
there exists no contract of sale unless and until the condition
is
fulfilled. . . . Until that moment, in the case of a sale subject to
a true suspensive condition, such as this is, it is entirely
uncertain whether or not a contract of sale will come into existence
at some future time'
(the
Corondimas
principle).
[24] In
Geue v Van der Lith
[2003] ZASCA 118
;
2004
(3) SA 333
(SCA) para 8 Brand JA referred to a body of authority and
summarised the application of the
Corondimas
principle as follows:
'In all these cases it was held that contracts subject to these
suspensive conditions were not hit by the legislative enactments
concerned. The reasoning that formed the basis of these decisions was
essentially that the agreement prohibited by both enactments
was a
sale
whereas, in accordance with the decision of this Court in
Corondimas
, an agreement of sale subject to a suspensive
condition cannot, pending fulfilment of the condition, be regarded as
a "sale".
It only becomes a sale when the condition is
fulfilled, in which event there is no contravention of the statutory
provisions involved.'
[25] Counsel for the appellant urged this court to
revisit the
Corondimas
principle in view of the treatment of
that judgment in
Tuckers Land & Development Corporation v
Strydom
1984 (1) SA 1
(A) (the
Strydom
case), and in view
of the new constitutional dispensation aimed at curtailing abuse of
power and corruption at municipal level.
We shall deal in turn with
each leg of the argument.
[26] In so far as the
Strydom
case is concerned,
Van Heerden JA (writing for the majority) said at 18C-G:
‘
'n Laaste aspek wat oorweging verg, is tot
welke mate handhawing van die
Corondimas
-opvatting
tot min of meer permanente onreg aanleiding kan gee. Soos dit my
voorkom, het die opvatting weinig, indien enige, praktiese
betekenis
anders as by die uitleg van wetgewing waarin begrippe soos "'n
koopkontrak" of "verkoop" gebruik
word. Of 'n verkoop
onderhewig aan 'n opskortende voorwaarde nou ook al as geen
koopkontrak nie, dan wel as 'n koopkontrak wat
nog net nie
perfecta
is nie, bestempel word, is daar geen
rede waarom die regsgevolge wat gemeenregtelik aan so 'n verkoop
geheg is nie nog steeds ten
volle toepassing sal vind nie. En wat
wetgewing betref, sal vermoedelik in die toekoms duidelik aangedui
word, soos nou deur die
wysiging van art 57A (2) geskied het, wat met
die gebruik van bogenoemde begrippe beoog word. Voorts staan dit
naturlik die wetgewer
vry om, sonder inbreukmaking op bestaande
regte, statutêre bepalings waarin die begrippe reeds voorkom te
wysig indien die
huidige stand van die regspraak en hierdie uitspraak
meebring dat nie gevolg gegee word aan die wetgewer se werklike maar
onvoldoende
uitgedrukte bedoeling nie. Dit is dan ook insiggewend
dat, na verloop van onderskeidelik vyf en vier jaar na die
beslissings in
die
Wallis-
7
en
Nieuwoudt
-sake,
8
art 3 (
e
)
van Wet 70 van 1970 ongewysig bly voortbestaan.'
9
[27] It is in the context of these
remarks that the following legislative history is important. Section
79(18) was substituted by
s 9(1)(h) of the Ordinance 18 of 1985 after
the
Strydom
case had been decided in September
1983 and reported in January 1984 after the definition of ‘sale’
in the Subdivision
of Agricultural Land Act 70 of 1970 had been
amended by s 1(
c
)
Subdivision of Agricultural Land Amendment Act 18 of 1981, to include
a sale subject to a suspensive condition; and after a similar
amendment to s 57(A) of the Town Planning and Township Ordinance 25
of 1965 (T) by s 3 of Ordinance 19 of 1982 (T), (the amendment
of
which van Heerden JA referred to in the passage quoted above). The
legislature has not seen fit to provide that ‘sell’
for
the purposes of s 79(18) of the Ordinance shall include an agreement
of sale subject to a suspensive condition. In our view
therefore the
legislature must be deemed to have been aware of the numerous cases
since
Corondimas
but to have elected not to amend the
definition in the Ordinance. In the result this court must draw an
inference and conclude that
the legislature intends ‘sale’
in the Ordinance not to include a sale subject to a suspensive
condition.
10
[28] The rationale underlying the
Corondimas
principle was recently repeated by this court in
Paradyskloof Golf Estate v Stellenbosch
Municipality
2011 (2) SA 525
(SCA) para 17
where Mpati P held:
'An agreement of purchase and sale entered into subject to a
suspensive condition does not there and then establish a contract
of
sale, "but there is nevertheless created a very real and
definite contractual relationship which on fulfilment of the
condition develops into the relationship of seller and purchaser".'
[29] In the event,
stare decisis
applies. On a
proper application of the
Corondimas
principle, there was no
contract of
sale
until the suspensive conditions in clause 4.1
had been fulfilled. It is evident from the document ‘Item to
Council' that
these conditions had been fulfilled as the first
respondent had complied with the applicable statutory requirements.
It is clear
therefore that the council's intention to exercise the
power to alienate was only formulated on 5 February 2009 when it took
the
resolution sought to be impugned by the appellant. The contract
of sale thus came into existence on that day. Counsel for the
appellant
correctly conceded that the council could have decided at
that stage not to proceed with the contract. And that is the answer
to
the appellant’s submission that the
Corondimas
principle should be departed from in view of the new constitutional
dispensation aimed at curtailing abuse of power and corruption
at
municipal level. The effect of the
Corondimas
principle in a
case such as the present, is that interested parties affected by the
sale contract would be able to examine not
proposals, but the
detailed scheme itself. Any competitor of the successful tenderer
could be relied upon to draw the council's
attention to any
irregularity or corruption, and at the end of the day, the elected
council of the respondent could have walked
away from the project if
it thought this would be in the interests of the first respondent and
its ratepayers.
[30] Counsel for the appellant submitted that the
provisions of the contract of sale and in particular, clause 22
fettered the discretion
of the full council. There is no merit in
this submission. It is clear from the agreement of sale that the
party to the agreement
is the municipality and not the council.
Clause 4.1.2 requires that 'the full council of the seller [the
municipality] will . .
. adopt a final resolution to endorse the sale
after compliance with all legislature requirements'. It has to be
borne in mind
that the full council consists of councillors from
different political parties and is not bound in any way. It follows
that the
council retained its unfettered discretion.
[31] We should mention briefly that the reliance by the
appellant on the
Ferndale
case referred to above is misplaced
as the facts of that case are distinguishable from the facts of this
case. In
Ferndale
, it was common cause that there was no
compliance with the requirements of s 79(18) of the Ordinance before
the conclusion of the
lease agreement. An attempt at compliance was
done ex post facto, two years after the conclusion of the said
agreement as it was
not clear to the municipality whether the
publication had to take place before or after the conclusion of the
lease. That was not
the situation in this case.
[32] It follows therefore that there was proper
compliance with the provisions of s 79(18)(b) of the Ordinance and
there is no basis
to interfere with the findings of the court below.
[33] The challenge with regard to non-compliance with s
33 of the MFMA can be disposed of relatively simply. It is subject to
the
same answer as s 79(18) of the Ordinance. A municipality may in
terms of s 33 enter into a contract having future budgetary
implications
subject to certain conditions. The appellant relied on
the publication by the first respondent of notices in terms of this
section
as constituting an admission that the section applies. But it
did not raise this contention in its founding papers. As we mentioned
in paras 18 and 19 above, it was incumbent upon the appellant to do
so, so that the first respondent could respond thereto. In
any event,
the financial obligations referred to in s 33 could only be imposed
after the suspensive conditions had been fulfilled.
It follows
therefore that no case has been made out with regard to s 33 of the
MFMA.
[34] It remains for us to deal with the argument that
there was no compliance with s 14 of the MFMA. A municipality may in
terms
of s 14(2) transfer ownership or otherwise dispose of a capital
asset other than one contemplated in subsection (1), but only after
the municipal council, in a meeting open to the public, has decided
on reasonable grounds that the asset is not needed to provide
the
minimum level of basic municipal services and has considered the fair
market value of the asset and the economic and community
value to be
received in exchange for the asset. The submission on behalf of the
appellant was that administrative action consisting
in the transfer
of ownership of an asset must be fair and transparent. In our view, a
fair and transparent process was indeed followed
by the first
respondent and it complied with the provisions of this section.
[35] The conclusion we have reached renders it
unnecessary to consider the argument raised by both respondents that
immense prejudice
would be suffered by them and third parties were
the appeal to succeed.
[36] In the result the following order is made:
1 The appeal is dismissed with costs.
2 The appellant is ordered to pay the respondents' costs
including the costs of two counsel in each case.
__________________
T D CLOETE
JUDGE OF APPEAL
_______________
___
N Z MHLANTLA
JUDGE OF APPEAL
APPEARANCES:
For
Appellant : J G Bergenthuin SC
A
Liversage
Meyer,
Van Sittert & Kropman
c/o
Van Zyl Le Roux & Hurter Inc
Pretoria
Naudes,
Bloemfontein
For
1
st
Respondent : N G D Maritz SC
N
G Labuschagne
Bernhard van der Hoven Attorneys, Pretoria
Rosendorff
Reitz Barry, Bloemfontein
For
2
nd
Respondent: R J Raath SC
J
A Venter
Adriaan
Venter Attorneys & Associates,
Pretoria
Rossouws,
Bloemfontein
1
1.See
also
Swissborough Diamond Mines (Pty) Ltd v Government of the
Republic of South Africa
1999 (2) SA 279
(T) at 322F-J.
2
The
appeal against this decision was dismissed. See
Ferndale
Crossroads v Johannesburg Municipality
2011
(1) SA 24
(SCA).
3
Our
emphasis.
4
R
H
Christie
The Law
of Contract in South Africa
6
ed (2011) 145.
5
A
J Kerr
The Principles of the Law of
Contract
4 ed 339-340.
6
Above
at 551.
7
Sentraalwes
Personeel Ondernemings (Edms) Bpk v Wallis
1978 (3) SA 80
(T).
8
Sentraalwes
Personeel Ondernemings (Edms) Bpk v Nieuwoudt
1979 (2) 538 (C).
9
'A
last aspect for consideration is to what extent maintaining the
Corondimas
approach could lead to permanent injustice. It
appears to me that the approach has little, if any, practical
meaning other than
to the interpretation of legislation wherein
terms such as "contract of sale" or "sale" are
used. Whether
a sale subject to a suspensive condition is
characterised as not being a contract of sale, or as a contract of
sale which is
not
perfecta
, there is still no reason why the
common law legal consequences which attach to such a sale should not
find full application.
And regarding legislation, more clarity will
presumably be provided in the future, as was achieved now by s
57A(2) as to the
interpretation of the above mentioned concepts. It
is also the legislature's prerogative to enact statutory provisions
which,
without infringing on existing rights, would amend the
interpretation given by judgments, including this judgment, so as to
give
effect to the true intention of the legislature which had
previously not been clearly articulated. It is also instructive that
after periods of respectively five and four years following the
judgments in
Wallis
and
Nieuwoudt
, s 3
(e)
of
Act 70 of 1970 has remained unamended.' (Our translation.)
10
Geue
v Van Lith
above, paras 8 to 11.