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[2021] ZAGPPHC 146
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115 Electrical Solutions (Pty) Ltd and Another v City of Johannesburg Metropolitan Municipality and Another (86870/19) [2021] ZAGPPHC 146 (16 March 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 86870/19
REPORTABLE:NO
OF
INTEREST TO OTHER JUDGES:NO
REVISED
DATE:
16
March 2021
In
the matter between:
115
ELECTRICAL SOLUTIONS (PTY)
LTD
First
Applicant
ANTONY
MPATI
Second
Applicant
and
THE
CITY OF
JOHANNESBURG
First
Respondent
METROPOLITAN
MUNICIPALITY
NEXUS
FORENSIC SERVICES (PTY) LTD
Second
Respondent
J U D G M E N T
The judgment and order
are accordingly published and distributed electronically. The
date and time of hand down is deemed
to be 10:00 on 16 March 2021.
TEFFO, J
:
Introduction
[1]
The applicants seek an
order that the respondents be interdicted from disseminating,
replicating or referencing in any manner whether
electronic or
otherwise, the document or any part thereof, titled “
Investigation
into allegations of theft, fraud and corruption at the Johannesburg
Market
” dated 6
February 2017 (“
the
report
”) until
any reference to them has been redacted from it. Alternatively,
until an addendum correcting the findings made
against them and/or
recording their version in relation to such findings has been
prepared and attached to it (“
the
main application
”).
[2]
The applicants have also
filed an application for leave to amend their notice of motion (“
the
interlocutory application
”).
[3]
The main application is
opposed by the first and the second respondents.
[4]
The interlocutory
application is only opposed by the first respondent.
The
parties
[5]
The first applicant is 115
Electrical Solutions (Pty) Ltd, hereinafter referred to as “
115
Electrical
”.
The second applicant is Mr Mpati. He is a professional
electrical engineer registered with the South African
Institute of
Electrical Engineers. He is the sole shareholder and director
of the first applicant. The first and second applicants
will be
referred to jointly as the applicants. Where appropriate they
will be referred to separately as 115 Electrical and
Mr Mpati.
[6]
It is alleged that 115
Electrical provides various services which include
inter
alia
supplying
electrical equipment, electrical consultation services, mechanical
and electrical construction and industrial services
to various
private persons, state-owned and private juristic entities.
[7]
The first respondent is
the City of Johannesburg Metropolitan Municipality contemplated as
such in terms of
section 2
of the
Local Government Municipal Systems
Act, 2000
(“
the
COJ
”).
[8]
The second respondent is
Nexus Forensic Services (Pty) Ltd (“
Nexus
”).
It is a forensic investigative company whose services cover all
aspects of fraud and corruption deterrence and promote
an effective
anti-fraud environment.
[9]
The other party is
Johannesburg Market (hereinafter referred to as “
Joburg
Market
”). It is
a municipal-owned entity which renders services to the COJ and the
COJ hold shares in the Joburg Market.
Background
[10]
In 2015, 115 Electrical in
a joint venture with Uphilo Trading CC (“
Uphilo
Trading
”), was
awarded two tenders by Joburg Market for the supply, delivery,
testing, commission and handover of 12 (twelve) 1 000kVA
power
transformers at the Joburg Market to replace the existing 500kVA
transformers and all other associated construction works
that come
with the upgrades.
[11]
The overall electrical
infrastructure upgrade program was intended to install 18 (eighteen)
1 000kVA transformers in 3 phases.
Phases 1 and 2 of the
project under tender reference codes of INFR 021-2014/15 and INFR
011- 2014-2015 were awarded to the joint
venture between 115
Electrical and Uphilo Trading. Another contractor, SSM
Molekoa/MNP Joint Venture, was awarded Phase 3
of the project
relating to a further 6 (six) transformers.
[12]
The work in Phase 1
commenced in May 2015 and was completed in September 2015.
[13]
The work in Phase 2
started in November 2015 and was finalised in March 2016.
[14]
In or about October 2016
the COJ appointed Nexus to perform certain investigations. The
investigation commenced on 11 October
2016 and a report that spoke
directly to the investigation was compiled and subsequently released
on 6 February 2017.
[15]
The report states that
Nexus’ mandate was to perform a forensic investigation into
allegations of theft, fraud and corruption
by officials and service
providers at the Joburg Market and to establish the veracity of
inter
alia
the following
allegations: the procurement of power transformers; the
delivery and commissioning of the power transformers;
the possible
collusion between the project manager (one Mr Modiba) and the
appointed service provider in the award of the services;
and the
conflict of interest, maladministration mismanagement; negligence and
lack of supervision by Joburg Market officials.
[16]
The report further states
that Nexus found that there were instances of corruption when the
improvements were undertaken at the
Joburg Market. Pursuant to
the findings of fraud and corruption made against the applicants, the
report recommended that
the services of 115 Electrical be
discontinued and that any further contracts 115 Electrical may have
had with Joburg Market or
the COJ be terminated or suspended.
[17]
The applicants allege that
the report was disseminated to the public by Nexus and/or the COJ and
in December 2018, it became the
premise on which an investigative
piece was prepared by Carte Blanche which was aired on National
Television. The broadcast
was styled as an investigative piece
regarding the failure of the National Prosecuting Authority (NPA),
the South African Police
Services (the SAPS) and the Hawks to
prosecute cases of fraud and corruption reported to them by the COJ.
[18]
Mr Modiba who was among
the people implicated in the report, lodged a complaint against Carte
Blanche to the Broadcasting Complaints
Commission of South Africa
(“
BCCSA
”).
The complaint was adjudicated upon and a judgment became available
online.
[19]
The judgment quoted
extensively from the report and included quotes which implicated the
applicants in theft, fraud and/or corruption
allegations.
[20]
115 Electrical never
featured in the Carte Blanche episode. Mr Mpati asserts that he
discovered that each time any online
searches for his name or that of
115 Electrical were made around that time, the BCCSA judgment which
included references in the
report to his alleged corruption,
appeared. He was unaware of the contents of the report until in
April 2019 when he conducted
a web search on his company’s name
to determine its web presence as he was in the process of updating
the website.
[21]
He instructed his
attorneys to intervene and they subsequently complained to the BCCSA
about the report. As a result, the
judgment was subsequently
removed from the BCCSA website and the BCCSA undertook not to publish
it again.
[22]
Mr Mpati alleges that he
has been in recent communication with the COJ and Nexus and has
pleaded that they desist from disseminating
and relying on the
report, especially the portions of the report that unjustifiably
defame him and his company.
[23]
Nexus has refused to
retract the report. It indicated through its attorneys that it
stands by the contents of the report.
Nexus denies that any
aspect of the report was misleading, false or unfounded.
[24]
Mr Mpati claims to have
corresponded with the COJ regarding the report and the COJ has not
responded to his letter.
[25]
Following the above, and
in order to prevent further reputational damage, he launched the
application.
The
applicants’ case
[26]
The applicants claim that
they have been defamed by the report unfairly, wrongly and without
good cause. They assert that
the report is characterised by
inaccuracies, misstatements of fact, improper and incomplete
investigative work and baseless conclusions
predicated on conjecture
and improper and unprofessional investigative methodology. They
allege that the report was prepared
and published without them having
had an opportunity to respond to or correct any of its false
allegations.
[27]
It is averred that the
prospect of the report being further disseminated traumatises Mr
Mpati who is a prominent figure in his field
and engages in business
through 115 Electrical, with major entities in the public and private
spheres. The baseless and incorrect
allegations about him in
the report threaten to jeopardise these relationships by
unwarrantedly calling the applicants’ integrity
and honesty
into question.
[28]
The applicants assert that
there are objectionable portions of the report which wrongfully and
unlawfully implicate them as being
involved in corruption, fraud,
dishonesty and theft. Their names are being unjustifiably
tainted. The report incorrectly
finds that: there was a close
relationship between Mr Modiba and Mr Mpati which was not disclosed
by Mr Modiba during the
tender process. That the Joburg Market
overpaid R8 837 114,89 for the transformers that 115 Electrical
installed during Phase
1 and Phase 2 of the project as the cost price
of the transformers were R2 207 250,00 and the contract price paid
was R10 864 364,89.
115 Electrical was employed to deliver 12
transformers but only delivered 11 and was paid for 12 transformers.
The assumption is
that the money for the 12
th
transformer was either misappropriated or that 115 Electrical was
overpaid. Further that Mr Mpati did not want to supply documentation
or meet Nexus implying that he was not cooperative in the
investigation.
[29]
The report concluded that
there was a corrupt relationship between Mr Modiba and the
applicants. As a result, Nexus opened a criminal
case against the
applicants.
[30]
The applicants claim that
the findings made against them are illogical and a result of
negligent and sloppy investigative work which
does not behove an
entity like Nexus which holds itself out as an expert in forensic
investigations into corruption.
[31]
They submit that they have
satisfied the requirements for an interdict and are therefore
entitled to the relief sought.
The
first respondent’s case
[32]
The COJ denies the
allegations. It contends that the Nexus report was completed in
February 2017. The applicants did
not take action to prevent
the report from being disseminated, replicated or being referred
prior to its publication. The proverbial
horse has bolted. Granting
the relief, which the applicants seek in their notice of motion, will
serve no purpose. It will
also have no practical effect.
[33]
It has reason to believe
that the applicants were contacted prior to the report being
published. The applicants were thus invited
to respond and deal with
what Nexus’ Forensic Investigation revealed.
[34]
The COJ contends that
whether the report contains objectionable portions and whether the
applicants are correctly or incorrectly
implicated, in matters of
corruption, fraud, dishonesty and theft can only be decided once oral
evidence has been led and witnesses
have been cross-examined. It is
not possible for the court to decide whether statements set out in
the applicants’ affidavit
are factually true or correct.
Without the benefit of cross-examination, it is not possible to
determine whether the version put
forward by the applicants should be
accepted above what the forensic investigators had set out in their
report.
[35]
Mr Modiba who served as
project manager to the contract, falsely reported to the Capital
Expenditure Committee of Joburg Market
that the project had been
properly executed. When he reported to the Committee on the matter,
he did so in circumstances where
delivery and performance were
defective in numerous respects. Not only were no rocker bins
delivered, but various deficiencies
in performance were found to
exist. Matters dealing with pricing and delivery were
subsequently identified by Nexus.
In addition, when five rocker
bins were later delivered, they were not new, but second-hand bins.
[36]
It is submitted that the
COJ acted reasonably and in accordance with the prescripts of the
law. It caused a professional investigation
to be carried out and
acted on the findings of the investigation, by,
inter
alia
, reporting the
matter to the SAPS. It was vindicated when the disciplinary
action against the employees incriminated in the
report led to their
dismissal. The COJ was fully justified in publishing the report and
acted lawfully in exposing the irregularities
which had been
discovered.
[37]
The COJ further contends
that the events referred to and dealt with in the applicants’
application have been completed.
They can no longer be undone.
Further that the relief sought in the notice of motion can thus not
undo or remedy what has occurred.
The
second respondent’s case
[38]
Nexus raised a point
in
limine
that the
applicants failed to join Joburg Market in the application. It
contends that the non-joinder of Joburg Market in
the application is
a ground to dismiss the application.
[39]
Nexus submits that the
averments made by the applicants give rise to an apparent factual
dispute that cannot be resolved without
the hearing of oral evidence.
[40]
It contends that its
findings and recommendations in the report are correct, and that the
conclusions and recommendations reached,
based on the extensive
investigation conducted, are justified and reasonable.
[41]
Nexus denies the
defamation of the applicants. It contends that it only prepared
and compiled the report and then furnished
same to the COJ in
accordance with its mandate.
[42]
Its stance is that it
cannot be blamed for the continued dissemination of the report.
The report is already the subject
of a finding by the BCCSA and has
been widely distributed in the public domain on the applicants’
own version.
[43]
The averments that the
applicants are currently unjustifiably prejudiced and that their
reputation has been tainted as a result
of the report, are denied.
[44]
It is admitted that a
criminal case has been opened against the applicants, which is the
subject of a pending criminal investigation.
[45]
The allegations that the
findings made in the report against the applicants are illogical and
a result of negligent and sloppy investigative
work, have been
denied.
[46]
It is also denied that the
applicants have satisfied the requirements of an interdict.
The
application for leave to amend the applicants’ notice of motion
[47]
Before I deal with the
above contentions, I deal with the applicants’ application for
leave to amend their notice of motion.
[48]
The applicants seek to
amend their notice of motion by adding a new prayer declaring the
findings of the Nexus report dated 6 February
2017 to be inaccurate
and irrational and thus defamatory of them.
[49]
The late filing of the
application was not opposed. It was accordingly granted.
[50]
The basis of the
applicants’ application is that the additional relief sought by
the proposed amendment flows naturally and
in the ordinary course
from the relief sought in the first prayer of the applicants’
notice of motion. It is the applicants’
case that the
determination of whether the applicants are entitled to the relief
sought in prayer 1.1 of their notice of motion
will involve
substantially the same enquiries as the additional relief sought by
the proposed amendment. The issues of the accuracy,
rationality and
defamatory nature of the Nexus report are central to the papers as
they stand and both the applicants and the COJ
have addressed these
issues in their papers or have failed to address them for reasons
known only to them but not because they
were not germane to the
issue.
[51]
The applicants assert that
there will be no prejudice to the COJ if the court permits the
proposed amendment to the applicants’
notice of motion.
[52]
They claim that the COJ’s
opposition of the application is unreasonable, vexatious and
frivolous.
[53]
The COJ denies the
allegations made by the applicants. It contends that the correctness
of the report is not relevant to the question
of whether the horse
has bolted or not. Further that it also has very little, if anything,
to do with the question whether the
COJ can be blamed for the
dissemination of the report.
[54]
The COJ further denies
that it will not suffer any prejudice if the amendment is granted.
It contends that not only will further
affidavits have to be filed,
but such affidavits will be filed to no avail. Ultimately the
court hearing the application
will not be in a position to determine
the correctness or otherwise of the various versions, without the
hearing of oral evidence.
[55]
It is further contended
that the relief claimed in the main application was principally aimed
at the further dissemination, replication
and referencing of the
report. The COJ’s stance has always been that no further
dissemination of the report was necessary
as the report had already
been dealt with by Council. The COJ claims that its answering
affidavit was accordingly prepared
to strictly address and only
answer the relief claimed in the notice of motion,
inter
alia
, explaining that
no further dissemination or replication of the report was necessary
or taking place.
[56]
It is submitted that at no
stage did it deem it necessary to deal with the veracity or
correctness of the content of the report.
No relief in that
regard was, at the time, being sought.
[57]
It is the COJ’s case
that persons who are able to comment or elaborate on the correctness
of the report are all employees
of Joburg Market. Joburg Market
is a separate and distinct legal entity to the COJ. It is a
municipal-owned entity
which renders services to the COJ. Once
the veracity or correctness of the report becomes an issue, the
Joburg Market will
be an interested party. A joinder will be
necessary to enable Joburg Market to deal with the veracity or
otherwise of the respondents’
version of events.
Applicable
legal principles
[58]
It
is trite that a court hearing an application for an amendment has a
discretion whether or not to grant it. This discretion
must be
exercised judicially.
[1]
The primary object of allowing an amendment is “
to
obtain a proper ventilation of the dispute between the parties, to
determine the real issues between them, so that justice may
be
done
”.
[2]
[59]
Watermeyer
J made the following statement in
Moolman
v Moolman
[3]
which has been relied upon
[4]
:
“
The practical
rule adopted seems to be that amendments will always be allowed
unless the application to amend is mala fide or unless
such amendment
would cause an injustice to the other side which cannot be
compensated by costs, or in other words unless the parties
cannot be
put back for the purposes of justice in the same position as they
were when the pleadings which is sought to be amended
was filed.
”
[60]
If
the real issue in a case is imperfectly or ambiguously expressed in
the pleadings, an amendment designed to place on record the
true
issues will be allowed.
[5]
The legal position on an amendment introducing a new cause of action
has been summed up by Erasmus as follows:
“
The
courts have recognised that in many cases it may be convenient to
incorporate fresh causes of action in original proceedings.
An
amendment which introduces a new cause of action will only be allowed
if no prejudice is occasioned thereby. There is
no objection in
principle to a new cause of action or defence being added by way of
amendment, even though it has the effect of
changing the character of
the action and necessitating the reopening of the case for fresh
evidence to be led if that is necessary
to determine the real issue
between the parties. The amendment must be bona fide and if it
is, it will be granted, especially
where the effect of refusing it
would again bring the same parties before the same court on the same
issue. If there is a
valid cause of action upon the summons the
court may allow the plaintiff to add a new cause of action which has
accrued or been
perfected since the issue of the summons.
Except in special or exceptional circumstances, a summons may not be
amended so
as to include a cause of action not existing at the time
of its issue. It has further been held that in terms of its
inherent
powers the court may grant an amendment of a fatally
defective summons so as to cure the defect where such amendment will
occasion
no prejudice and will prevent the waste of costs.
”
[6]
[61]
Prejudice has been
interpreted as follows:
“
Where
a party would be no worse of if the amendment was granted with a
suitable order as to costs than if his adversary’s
application
or summons was dismissed unamended and the proceedings were commenced
afresh, there is no prejudice in granting the
amendment: the
mere loss of the opportunity of granting time is not in law prejudice
or injustice.
”
[7]
Discussion
[62]
One of the reasons why the
COJ objects to the proposed amendment is that the issue pertaining to
the declaration sought was not
dealt with in the founding papers.
I respectfully disagree. The basis of the main application is
that the report is
inaccurate, irrational and therefore defamatory of
the applicants. The founding papers extensively dealt with
parts of the
Nexus report which the applicants regard as being
inaccurate, irrational and defamatory of them. It is correct
that the COJ
in its defence to the main application did not deal with
the merits. This was the COJ’s election not to venture into the
merits of the application. The fact that the defence of the COJ has
nothing to do with the question whether or not the contents
of the
Nexus report is accurate, rational and therefore defamatory of the
applicants cannot be used against the application for
leave to amend
the relief sought in the main application.
[63]
It is common cause between
the parties that the amendment is only being sought after all the
affidavits have been exchanged and
the heads of argument have been
filed. The fact that the amendment comes at a very late stage
of the proceedings as alluded
to by the COJ is neither here nor
there. An amendment can be allowed at any stage of the proceedings
provided that judgment has
not been delivered or a decision has not
yet been taken on the matter.
[64]
The COJ contends that the
amendment will serve no useful purpose where a dispute of fact is
already looming and where the evidence
involves serious allegations
of fraud. There can be no substance in this contention as the
issue whether or not the amendment
will serve a useful purpose and
whether or not there are disputes of fact which cannot be resolved on
the papers, are issues for
determination by the court. Sight
should not be lost that the issue relating to the existence of the
disputes of fact in
the main application has already been raised and
has to be dealt with when the main application is entertained.
[65]
The COJ further contends
that unless Joburg Market is joined as an interested party, the
amendment should not be allowed. This issue
has been raised in the
main application. I prefer to deal with the issue in the main
application as it was raised by Nexus.
[66]
The
COJ referred the court to the case of
Bestenbier
v Goodwood Municipality
,
[8]
in support of its objection to the proposed amendment. The
passage referred to reads as follows:
“
Reference was
made to Cooper v Natal Law Society and Another …, in which it
was laid down that the court had a discretion,
similar to that it had
in regard to pleadings, to allow amendments of orders prayed for in
an application. It is assumed
that this discretionary power
would cover the case of allowing the addition of a new prayer based
upon allegations essentially
different from those on which the
original relief was claimed. It seems to me, however, that in
such a case the discretion
must be a more guarded one. To allow
an addition of a new cause of action based on entirely different
allegations at a late
stage of the proceedings might lead to grave
prejudice.
…
If the
applicant is left to launch a fresh motion, fresh costs will no doubt
be incurred, but in such other proceedings the issues
will be
properly formulated and be supported by the necessary facts which
will then enable the respondent to deal fully with the
allegations.
In
all the circumstances it seems to me that the court should not, in
the exercise of its discretion, allow this amendment but leave
the
applicant, if so advised, to bring fresh proceedings.
”
[9]
[67]
The
Bestenbier
case referred to above is distinguishable to the present matter in
that the relief sought in the current application is not based
on
allegations essentially different from those on which the original
relief was claimed.
[68]
The COJ claims that it
will suffer prejudice if the amendment is granted. It submits that
not only will further affidavits have
to be filed, but such
affidavits will be filed to no avail. It is contended that the
court hearing the application will not
be in a position to determine
the correctness or otherwise of the various versions, without the
hearing of oral evidence.
[69]
Whether or not further
affidavits will have to be filed should the amendment be granted,
lies in the discretion of the court having
regard to the facts that
are already before court. Under the circumstances I cannot find any
prejudice that the COJ will suffer
should the amendment be granted.
There is also no evidence that the application is
mala
fide
or that the
amendment thereof would cause an injustice to the COJ which cannot be
compensated by costs. Under the circumstances
I am inclined to allow
the amendment as prayed for.
[70]
The COJ was not the author
of the report and neither did it conduct the investigations. In my
view, the COJ will not be in a position
to express a view on the
correctness, or otherwise, of the content of the report. Nexus is the
relevant party to express a view
on the correctness of the report and
it has done so accordingly. Nexus did not oppose the application to
amend the notice of motion.
I therefore do not find it necessary to
allow the further filing of affidavits in the main application as
alluded to by the COJ.
The
main application
[71]
I now turn to deal with
the main application. Before I deal with the defences raised by
the COJ, it will be prudent to first
deal with the points
in
limine
raised by
Nexus.
Non-joinder
of Joburg Market
[72]
Nexus contends that with
specific reference to the alleged variation of the deliverables in
Phase 2, and the variation orders allegedly
granted by Joburg Market,
there is a clear obligation upon the applicants to have joined the
Joburg Market as a party to the application.
It is submitted
that 115 Electrical did not contract with the COJ. It
contracted with the Joburg Market in both Phase 1 and
2 of the
respective tenders. Furthermore, Mr Modiba who is implicated in
the report, was a Project Manager in the employ
of Joburg Market and
not the COJ.
[73]
Nexus submits that Joburg
Market is a party that has a direct and substantial interest in the
application. The failure to join the
Joburg Market is a ground alone
for the dismissal of the application.
[74]
In the application for
leave to amend the notice of motion, the COJ submits that should the
amendment be granted, Joburg Market
has to be joined as an interested
party. Once so joined, Joburg Market must be afforded an
opportunity to file affidavits
setting out their version of events
and that of its respective employees. The COJ contends that
Joburg Market has acted upon
the correctness of what is recorded in
the report. It has held disciplinary enquiries and terminated the
employment of certain
of its staff members. A finding by a court,
dealing with the correctness, or otherwise, of the content of the
report may thus have
far-reaching consequences for Joburg Market.
[75]
The
court in
Stefanutti
Stocks Civils, A Division of Stefanutti Stocks (Pty) Ltd v Trans
Caledon Tunnel Authority
[10]
held as follows:
“
[10]
The first question to be answered is whether Group Five has a direct
and substantial interest in the
outcome of these proceedings and
whether it is necessary for it to be joined in these proceedings.
In the matter of Burger
v Rand Water Board and Another
2007 (1) SA 30
(SCA) at 33B, the SCA said:
[7]
The right to demand joinder is limited to special categories of
parties such as joint
owners, joint contractors and partners, and
where the other party(ies) has (have) a direct and substantial
interest in the issues
involved and the order the court might make.’
[11]
Where a party has a direct and substantial interest in the results or
the order which
might be given in the proceeding, the matter cannot
be proceeded without such party having been joined as a party; vide
Standard
Bank v Swartland Municipality; Tau v Agricultural Minister
of Agriculture & Land Affairs. In the matter of Ex Parte
Body
Corporate of Caroline Court
2001 (4) SA 1230
(SCA) at 1234D, the
Supreme Court of Appeal stated that: ‘The basic principle
of our law that interested parties who
may be prejudiced by an order
issued by a court should be joined in the suit, as set out in
Amalgamated Engineering and Pretorius
cases supra, and expressed in
Rule 6(2) of the Uniform Rules of Court should have been applied
…
”
[11]
[76]
Van Loggerenberg in the
publication “
Erasmus
Superior Courts Practice
”
further summarises the position as follows:
“
Though
it was said in Morgan v Salisbury Municipality that the right of a
defendant to demand the joinder of another party is limited
to the
cases of joint owners, joint contractors and partners, the question
as to whether all necessary parties had been joined
does not depend
upon the nature of the subject matter of the suit, but upon the
manner in which, and the extent to which, the court’s
order may
affect the interests of third parties … The rule is that
any person is a necessary party and should be joined
if such person
has a direct and substantial interest in any order the court might
make, or if such an order cannot be sustained
or carried into effect
without prejudicing that party unless the court is satisfied that he
has waived his right to be joined.
”
[12]
[77]
In
Matjhabeng
Local Municipality v Eskom Holdings Ltd
,
[13]
the Constitutional Court held that:
“
The
law of joinder is well settled. No court can make findings
adverse to any person’s interests, without that person
first
being a party to the proceedings before it.
”
[14]
[78]
In reply to the point
in
limine
of non-joinder
raised by Nexus, the applicants simply said “
Nexus’
point in limine will be dealt with in legal argument
”.
[79]
In the application for
leave to amend, in reply to the point
in
limine
raised by the
COJ, the applicants contend that they did not join the Joburg Market
to the proceedings as it is not the owner of
the report, nor is there
any contractual relationship between it and Nexus in terms of which
it could insist that Nexus amend the
report it has authored, nor to
the best of the applicants’ knowledge at the time, had the
Joburg Market any intentions to
further disseminate the report, and
despite the report, continued to employ the first applicant.
[80]
It is further contended
that Joburg Market does not have a legal and substantial interest in
these proceedings. They claim
to have invited Joburg Market to
join the proceedings after the issue was raised by Nexus and Joburg
Market never responded.
It was submitted that if the court
deems it fit to join Joburg Market in the proceedings, they would not
object.
[81]
I do not agree with the
reasons of the applicants for not joining the Joburg Market to the
proceedings. The contract which is the
subject matter of the report
that is being questioned and criticised was entered into between the
first applicant and the Joburg
Market. There is merit in the
submissions made by Nexus and COJ regarding the joinder of the Joburg
Market. Joburg Market
has a direct and substantial interest in
the issues involved in these proceedings and the order the court
might make. The
applicants should have joined the Joburg Market
in these proceedings. They cannot invite the court to join a party
they had failed
to join.
Disputes
of fact
[82]
Nexus further contends
that the applicants have elected to institute these proceedings by
way of application despite being acutely
aware of the current factual
dispute regarding the conclusions made in the report. It
submits that its position is that the
findings and recommendations in
the report are correct, justified and reasonable in the
circumstances. According to it the allegations
made by the applicants
give rise to an apparent dispute of fact which cannot be resolved
without the hearing of oral evidence.
[83]
The applicants were
requested to timeously take the necessary steps to refer the matter
for oral evidence.
[84]
It was further contended
that the alternative relief sought, is dependant on the court making
findings on the correctness of the
conclusions and recommendations.
This, also, gives rise to a substantial factual dispute that will
require the presentation
of oral evidence.
[85]
In reply the applicants’
claim that there are no
bona
fide
disputes of fact
which would prevent the court from resolving the matter. It is
contended that Nexus has denied many facts
stated by them in the
founding affidavit purely to attempt to create a dispute of fact. The
denials are
mala fide
and Nexus puts up no facts to disprove the facts alleged by the
applicants.
[86]
I do not agree with the
applicants’ contentions if one takes into account the following
averments from the papers to quote
a few:
“
In summary, the
second respondent’s investigations revealed that the Joburg
Market purchased a total of 12 transformers in
the two phases for
which the applicants were appointed; however only 11 were delivered.
In paragraphs 17 to 19
of the applicants’ founding affidavit it is alleged that the
second applicant consulted with Mr Modiba
(the project manager) and
Mr Nthambeleni Rampeiwa (the maintenance manager) of Joburg Market
and it was agreed that it was allegedly
not necessary to replace one
of the transformers …
It
is respectively emphasised that the applicant has failed to attach a
confirmatory affidavit from either Mr Modiba or Mr Rampeiwa.
Besides, during the second respondent’s investigations, no
documentary evidence of written amendment or variation to the
terms
and conditions of the respective tenders could be found to support
the applicants’ allegations in this regard.
The fact
remains that the applicants submitted invoices for the supply of 12
transformers and (signed and accepted by Modiba on
behalf of Joburg)
were still paid for 12 transformers despite only delivering 11
transformers.
”
[87]
In their founding
papers, the applicants allege that the Nexus report concludes that
one transformer was not accounted for
because the applicants only
installed 11 transformers and not 12. That, according to them,
is not correct. It is averred
that Joburg Market was not
undersupplied by one transformer. Rather, the tender document
incorrectly specified a requirement
for six transformers for Phase 2
when in actual fact, only five were needed. Phase 2 of the
transformer project had 2 variation
orders which fell outside the
initial transformer installation plan; i.e. it was not provided.
[88]
There are factual disputes
of fact in the conclusions and findings made in the report as against
the version of the applicants.
[89]
These in my view are
bona
fide
and genuine
disputes of fact which are not capable of resolution on application.
I am persuaded that the applicants were
aware of the disputes of fact
or ought reasonably to have foreseen them before launching the
application.
[90]
Under the circumstances
and having regard to the failure to join Joburg Market as a party to
this application, the application is
bound to fail.
Costs
[91]
In the application to
amend the notice of motion, the applicants contend that the COJ’s
opposition to the amendment has been
unjustifiable and increased the
costs of the application to amend. They submit that they made
it clear to the COJ that it
would be permitted to file a further
affidavit to overcome any alleged prejudice. The COJ refused and
insisted that they launch
the application. It has failed to
show that it will suffer prejudice if the amendment is granted which
cannot be cured by
being allowed to file a further affidavit.
The applicants contend that the COJ should pay the costs of the
opposed application
for leave to amend. They submit that
considering the multiple opportunities they gave the COJ to avoid the
costs of the application,
the COJ should be ordered to pay costs on
the scale as between attorney and client.
[92]
The
general rule is that the applicant should pay the costs of the
application for leave to amend and in certain instances even
be
ordered to pay the costs of the opposition to the application for
leave to amend. The party applying for the indulgence
should
pay all such costs as can reasonably be said to be wasted because of
the application for leave to amend which costs include
the costs of
such opposition as are in the circumstances reasonable and not
vexatious or frivolous.
[15]
[93]
In
cases where the opposition is fair and reasonable, the respondents
ought not to be put into a position where they oppose the
granting of
an indulgence at their peril, in the sense that, if the amendment is
granted, they cannot recover their costs of the
opposition, or may
even have to pay such costs as are occasioned by their
opposition.
[16]
Where
the opposition is unjustifiable and increases the costs of an
application to amend, the opposing party forfeits his
costs of the
opposition and should be ordered to pay the applicants’ costs
in so far as they had been increased by the opposition.
[17]
[94]
Whilst
an award of costs on the attorney and client scale is not granted
lightly, it should be granted in circumstances where there
is a lack
of
bona
fides
in defending the application. It is not necessary to find
dishonesty or a vexatious intention. Even with the most upright
and
most firm belief in the justice of its cause, a litigant can be
vexatious by putting the other side to unnecessary trouble
and
expense, which it ought not to bear.
[18]
[95]
The application to amend
was brought at a very late stage of the proceedings. All the
affidavits and heads of argument had
already been filed. The
COJ was within its right to oppose the application. It cannot
be said that the opposition was
not reasonable and neither was there
any evidence that it was vexatious, frivolous and/or lacked any bona
fides.
[96]
It is the applicants who
sought an indulgence to have the notice of motion amended. They
have to pay the costs of the application
to amend.
[97]
The COJ sought costs which
costs include costs consequent upon the employment of two counsel.
The matter is not complex.
I am not inclined to grant such a
costs order.
[98]
In the result the
following order is made:
1.
The applicants are granted
leave to amend their notice of motion in accordance with their notice
of intention to amend, dated 27
May 2020.
2.
The applicants are to pay
the costs of the application for leave to amend.
3.
The applicants’
application for an interdict and an order declaring the findings of
the Nexus report dated 6 February 2017
to be inaccurate and
irrational and thus defamatory of them, is dismissed.
4.
The applicants are to pay
the costs of the aforesaid application jointly and severally, the one
paying the other is absolved
M J TEFFO
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION,
PRETORIA
Appearances
For
the applicants
H Gray
Instructed
by
Fairbridges Wertheim Becker Attorneys
For
the first respondent
R Stockwell SC and T C Lithole
Instructed
by
Phambane Mokone Inc
For
the second respondent
E van As
Instructed
by
VZLR Attorneys
Heard
on
21 October 2020
Handed
down
16 March 2021
[1]
YB
v SB
2016 (1) SA 47
(WCC) at 50H-J and the authorities there cited
[2]
Trans-Drakensberg
Bank Ltd (under judicial management) v Combined Engineering (Pty)
Ltd and Another
1967 (3) SA 632
(D) at 638A;
Bankorp
Ltd v Anderson-Moreshead
1997 (1) SA 251
(W) at 253D-G
[3]
1927
CPD 27
at 29
[4]
See
Picardi
Hotels Ltd v Thekwini Properties (Pty) Ltd
2009 (1) SA 492
(SCA)
[5]
Slomowitz
v Vereeniging Town Council
1966 (3) SA 317
(A) at 329E-F
[6]
Erasmus
Superior Court Practice
,
RS1, 2016, D1-335
[7]
Erasmus
Superior Court Practice
,
RS11, 2019, D1-334
[8]
1955
(2) SA 692
(C)
[9]
At
697H to 698E
[10]
2012
JDR 2073 (GNP)
[11]
At
para 1-11
[12]
Van
Loggerenberg, “
Erasmus
Superior Courts Practice
”,
Volume 2, D1-124
[13]
2018
(1) SA 1
(CC)
[14]
at
33E-F
[15]
Celliers
Law of Costs
October
2019 SI 40
update para 2.31,
Meintjies
v Administrasieraad van Sentraal-Transvaal
1980 (1) SA 283
(T)
[16]
Celliers
par 2.34 cited with approval in
Ge
No v Rudick Holdings (Pty) Ltd
1983 (2) SA (W) at 72
[17]
Celliers
par 2.31
Makings
v Makings
1958 (1) SA 338
(A) 342
[18]
Law
on Costs
A.C.
Celliers Issue 36 para 4.13 p 4-26