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[2021] ZANCHC 28
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Aiming High Development Corporation t/a Evolution Investment Holdings (Pty) Ltd v Sol Plaatje Local Municipality and Others (1723/2020) [2021] ZANCHC 28 (9 July 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE
DIVISION,
KIMBERLEY
Case
No: 1723/2020
Heard:
17/05/2021
Delivered
on: 09/07/2021
In
the matter between:
AIMING
HIGH DEVELOPMENT CORPORATION
t/a
EVOLUTION
INVESTMENT
HOLDINGS
(PTY)
LTD
Applicant
and
SOL
PLAATJE
LOCAL
MUNICIPALITY
1
st
Respondent
KIMBERLEY
REHABILITATION
&
DEVELOPMENT(PTY)LTD
2
nd
Respondent
NDI
GEOLOGICAL CONSULTING SERVICES (PTY)
LTD
3
rd
Respondent
Coram:
Mamosebo Jet
Snyders AJ
JUDGMENT
ON REVIEW
MAMOSEBO
J
[1]
The relief that the applicant, Aiming
High Development Corporation,
seeks
is the following:
1.1
Reviewing and setting aside of a
Resolution taken by the Sol Plaatje
Municipal Council on 22 July 2020;
1.2
A declaratory
order
that
the applicant
is entitled
to the transfer
of
property
known as Erf 5337, Kimberley;
1.3
An
order
compelling
the
Municipality
to
transfer
the
property
to
Aiming High Development
Corporation; and
1.4
Costs of the application to be awarded
against the Municipality.
The
Parties
[2]
The applicant is Aiming High Development
Corporation t/a Evolution Investment Holdings (Pty) Ltd (Registration
number2014/140437/07),
a
company
registered in accordance with the laws of the Republic of South
Africa with its registered address at 41 Vermaas Street, Lindene,
Kimberley, Northern Cape Province. The first respondent is the Sol
Plaatje Municipality,
a
category B Municipality
established
in terms of
s 155(6) of the Constitution of the
Republic of South Africa, 1996 read with s 12 of the Local
Government: Municipal Structures Act,
117 of 1998. The second
respondent is Kimberley Rehabilitation & Development (Pty) Ltd
(Registration no 2017/080438/07), a company
registered in terms of
the laws of the Republic of South Africa with its registered address
at 30 Jan van Zyl Street, Monument Heights,
Kimberley, Northern Cape
Province. The third respondent is NDI Geological Consulting Services
(Pty) Ltd (Registration no 2017/659770/07),
a company registered in
terms of the laws of the Republic of South Africa with its registered
address at 38 Ophelia Street,
Herlear,
Kimberley, Northern Cape.
[3]
Kimberley Rehabilitation &
Development (Pty) Ltd and NDI Geological Consulting Services (Pty)
Ltd do not oppose the application
and no relief
is sought
against
them.
The
Municipality
is
opposing
the
application.
The
issues for determination
[4]
The questions for determination
are the following:
4.1
Whether
Aiming
High
has
locus
standi
to
bring this application;
and
4.2
Whether Aiming High is entitled to a
mandamus
directing
that the
property
be transferred
and
registered into its name.
Order
by agreement
[5]
I have already stated at para 1 (above)
that the applicant is seeking the review and setting aside of a
Resolution taken by the Sol
Plaatje Municipal Council on 22 July
2020. At para 10 of the Municipality's answering affidavit the
following appears:
"I
point out that the Municipality does not in principle oppose the
setting aside of the resolution passed on 22 July 2020 to
enter into
a PPPA with the second respondent. In fact, the Municipality has
already instructed its legal representatives to draft
review
proceedings to set aside resolution Cl 34/07/20 dated 22 July 2020 on
the basis that there has been non-compliance with the
requirements to
enter into a PPPA as prescribed by section 120 of the MFMA.
"
[6]
Mr Knoetze SC, for the Municipality,
submitted that prayer 1, appearing in the Notice of Motion, be made
an order by agreement between
the parties. There still remains for
consideration the issue of Aiming High's
locus
standi
and the
mandamus.
[7]
The background facts, which gave rise to
this application, are briefly as follows: Mr Patrick Deon Nazim
Simons, a deponent to the
founding affidavit, intimated that about 08
December 2009, Evolution Investment Holdings submitted a formal
application with a proposal
to the Municipality for the development
of Erf 5337, Kimberley, also known as
Erf 5337, Waterloo Road, West End,
Kimberley or BMW site. The purpose was to construct a private
hospital on the property.
[8]
The Municipality had been in constant
communication with Evolution Investment Holdings which was
represented by Mr Simons with regard
to
the proposed development as borne out by
all the letters that were exchanged between the parties. Of more
importance is that, when
Mr Simons addressed the letters to the
Municipality, he made it clear that he was writing in his capacity as
the representative of
Evolution Investment Holdings and referred to
Evolution as their "company".
[9]
I emphasise a few letters under the logo
Evolution Investment Holdings addressed to the City Manager dated 06
February 2012, 16 April
2012, 04 February 2013 and 25 February 2013
from which I quote in part:
9.1
letter dated 06 February 2012 marked
"Simons 10":
"Our
company has applied for a piece of land as per the above information
in 2009 and for all these years to date we have been
receiving
letters from your office with reference to the [moratorium} and that
your last correspondence dated 05 July 2011, with
our office was now
receiving [the] necessary attention for finalization as the
[moratorium} has been lifted since 2011
We also hereby attach a copy of the media report of our hospital
proposal
that was done in 2009
"
9.2
letter dated 16 April 2012 marked
"Simons 12":
"We
would like to inform your office as follows:
On
the 16th April 2012 at 10:30 a.ma meeting between ourselves and Mr L
Stevens, your electrical engineer, was held.
In
the meeting Mr L Stevens confirmed that upgrading of the Hadison Park
Sub Station can be done
and
the two (2) parties agreed that
if
our
Company namely, Evolution
Investments Holdings,
would
foot the bill for such electrical infrastructure and upgrading he
would not have a problem approving such.
In
light of this
our Company
therefore wants to place on
record that we are willing to carry such costs as we have also made
mention to this in our proposal.
We
would therefore request our application to be renewed in light of the
current information and receive your favourable consideration
and
approval.
"
9.3
letter dated 04 February 2013 marked
"Simons 18":
"Our
company
hereby
would
like
to
state
that
....
Our
company
applied
for
24
hectares as per our attached
site
layout
and would
therefore
appreciate
it if this
matter
can be resolved as speedily as possible as our company has been
further delayed as
we are
thus
unable to proceed
in
finalising
our plans as they would exceed the 6 hectare allocated
to our company.
"
9.4
letter dated 25 February 2013 marked
"Simons
19":
"...
the
following
concern
was
also
raised
with yourself with
regards
to
the
price of land
our company
is
purchasing from the municipality
"
(Own
emphasis)
[10]
On 05
December 2012, during the ordinary council meeting the municipal
council resolved to approve the Evolution Investment Holdings'
application for the alienation of a portion of erfRE5337, Waterloo
Road, Kimberley, subject to conditions set out in its resolution
C297/12. Mr Simons was notified in that regard on 16 January 2013.
The said resolution reads in part:
"SPL
186
/
12
RESOLVED
TO
RECOMMEND
TO
COUNCIL:
That
a
portion
of the
remainder
of
er/
5337,
Waterloo Road, Kimberley be alienated
to Messrs
Evolution
Investment Holdings
for
an amount of Rl
20.
00
per square metre (VAT
exclusive),
subject to the following
conditions
..
'
The
said 21 conditions are specified in the resolution itself and need
not
be
repeated.
This
is the first resolution by the Municipal Council.
[11]
On Monday, 04 February 2013, Mr Simons
acknowledged the first council resolution but highlighted to the City
Manager that the approved
6
- 7 hectares of land was not what they had applied for, as it was
inadequate. Their company had applied for 24 hectares.
[12]
In the Ordinary Council meeting SPL
111/07/15, it was resolved to recommend to Council to review the
Council Resolution C297/12 dated
05
December
2012.
That
the
subdivision,
rezoning
from
"Undetermined"
to
"Institutional" and
alienation
of two (2) portions of the Remainder ofErf 5337 Kimberley (Waterloo
Road, Diamond Park) to Evolution
Investment
Holdings,
for the amount
ofR6
250
000.00
(VAT
exclusive) -
be approved, subject to the following
conditions a - g:
"Council
resolved
to
approve
Cl
92
/
08
/
15
1
-
2g
as recommended."
[13]
The Municipality addressed a letter to
Messrs Evolution Investment Holdings dated 28 January 2016 to the
following effect:
"PROPOSED
ALIENATION OF A PORTION OF ERF
RE5337, KIMBERLEY
Your
application with regard to the above matter refers.
At
an ordinary Council Meeting held on 5 August 2015, Council approved
the alienation of a portion of Eif 5337, Kimberley, subject
to
conditions as set out in the attached resolutions C297/12 dated 5
December 2012 and C192/08
/
15
dated 5 August 2015. It should however be mentioned that a revised
quotation was requested from the Electrical Section as the previous
quote was only valid until 30 June 2012.
You
are requested to inform this department within 21 days of the date of
this letter
whether
these
conditions are acceptable to you
.
Should
we
receive
no reply from you
within
the prescribed period, it
will
be accepted that
you
do not want to proceed
with the transaction and it will
be regarded as finalised.
If
you
however
wish to proceed
with
the
transaction, an amount of R800-00 is payable with
regard
to advertising costs.
This
letter essentially communicated to Evolution Investment Holdings
Council's approval of the 24 hectares that it had applied for.
This
is the second resolution.
[14]
Pursuant to the approval of the 24
hectares to Evolution Investment Holdings, a Deed of Sale had to be
concluded between the parties.
In the
interim
the Municipality received a formal
objection lodged by a certain
Mr
Gamza Gool against alienation of the said property to Evolution
Investment Holdings, they were notified thereto, and that they
will
be advised in due course of the Council's decision. The objection was
finally resolved and Evolution
Investment
was notified on 26 January 2018 of
the
Council Resolution, the third Resolution, to proceed with the
alienation of the property to it. Evolution Investment at that stage
instructed Van Den Reever Attorneys to assist them. There were
efforts made to put the process in place to complete the Deed of
Sale.
[15]
A draft Deed of Sale identifies the parties as
the Sol Plaatje Municipality
represented
by Goolam Hoosain Akharwaray, in his capacity as Municipal Manager,
referred to as the "Seller" and Evolution
Investment
Holdings
for
which no registration
number
is inserted but for the following â
Reg
No: 2012/??????????â
referred to
as the âPurchaserâ. The Municipality
did not finalise the process
for the Deed of Sale with
Evolution
Investment.
[16]
However, on 22 July 2020 and, in a
Virtual Special Council Meeting, a Resolution was taken to alienate
the same property to the second
respondent, Kimberley Rehabilitation
& Development (Pty) Ltd (Changing the Face of the City). The
Municipality accepted the second
respondent's proposal to enter into
a PPPA (acronym used and no full name provided in the Resolution) for
rehabilitation and development
of the property known as Remainder of
the Erf 5337, Kimberley. It is this decision that led to the
application for the reviewing
and setting aside of
the resolution dated 22 July 2020 and a
demand for the transfer of the property into the applicant's name.
[17]
Aiming High's information, as set out in
the Companies Intellectual Property Commission (CIPC), annexed as
"BD1", shows
the name of the company as Aiming High
Development Corporation with registration number 2014/140437/07
registered on 21 July 2014.
Aiming High has two active directors
namely,
Glynis Millicent
Aysen
and
Patrick
Deon
Simons. There
1s
no
reference
whatsoever
to
Evolution
Investment
Holdings.
[18]
The names of the directors in Aiming
High are the same parties as those
in
Evolution Investment Holdings, who, in the replying affidavit
contended
that:
"[5]
It is indeed so, as will be evident from annexure "BDl" to
the answering affidavit, that the applicant was formally
registered
as a company on 21 July 2014.
[6]
The Court would however note from the said "BDl"
and if same is to be compared to the
heading to this application,
that although the applicant is formally registered as Aiming High
Development Corporation, it has always
been known as Aiming High
Development Corporation trading as Evolution Investment Holdings.
[9]
...
Evolution
itself, as will be evident from correspondence attached to my
founding
affidavit,
was never registered
as a company
and
we also never
referred
to it as a "(Pty) Ltd"
[10]
I have been advised further that it is not uncommon for a
person to act and to even conclude contracts
on behalf of and for a
company that is not in existence yet.
"
Locus
standi
[19]
It
is evident that there was no entity in existence by the name of
Evolution Investment Holdings. The impression created by its deponent
that there was such a company was misleading and in breach of s 32 of
the Companies
Act
[1]
as correctly
argued
by
Mr Knoetze,
which
stipulates:
"32.
Use of company name and registration number
(1)
A company
or external
company
must
-
(a)
Provide its full registered name
or registration number to any person on demand; and
(b)
Not misstate its name or
registration number in a manner likely
to mislead or deceive any person.
(3)
A person must not-
(b)
use a form of name for any purpose
if,
in the circumstances, the use of
that form of name is likely to convey a false impression that the
name is the name of a company.
(5)
Contravention of subsection (1), (2), (3) or (4) is an
offence."
[20]
Aiming High seemed to rely on s 21 of
the Companies Act maintaining that it was advised that it could act
and enter into contracts
on behalf of a
company not yet in existence. This
argument, in my view, is flawed and
does
not assist Aiming High in its case. First, Evolution Investment
Holdings Profile painted a picture of a company that already
existed
and
had
performed a lot of specialised work. Its profile alleged that the
company was involved in civils and construction, mining investments,
project management, electrical, investments and logistics. Further,
the subsequent letters addressed to the Municipality after Aiming
High was registered, that is after 21 July 2014, for example,
annexure "Simons 24"
letter
dated 31 January 2018, fails to display the link that it was Aiming
High Development Corporation t/a Evolution Investment Holdings.
Simons wrote this letter, referring to himself as a director of
Evolution Investment Holdings. Undoubtedly, Simons has contravened
the provisions of sections 32(3)(b) of the Companies Act as correctly
argued by Mr Knoetze.
[21]
Schippers
JA made the following
remarks
pertaining
to
locus
standi
in
Fourwheel
Drive v Rattan NO
[2]
:
"[7]
The logical starting point is locus standi
-
whether in the circumstances the
plaintiff had an interest in the relief claimed,
which
entitled
it to bring the action.
Generally, the requirements for locus standi are these. The plaintiff
must have an adequate interest in the
subject matter of the
litigation, usually described as a direct interest in the relief
sought; the interest must not be too remote;
the interest must be
actual,
not
abstract or academic; and it must be
a current interest and not a
hypothetical one. The duty to allege and prove locus
standi
rests on the party
instituting
the proceedings.
"
[22]
Innes
CJ
explains
what
is
meant
by
having
direct
interest
clearer
in
Dalrymple
and says:
"The
general rule of our law is that no man can sue in respect of a
wrongful act, unless it constitutes a breach of a duty owed
to him by
the wrongdoer, or unless it causes him some damage in law.
"
[23]
The entire application is based on the
resolution by the Municipality to alienate the property known as Erf
5337, Kimberley, to Messrs
Evolution Investment Holdings. There is no
direct link substantiated or established between the applicant,
Aiming High Development
Corporation, and Evolution Investment
Holdings. At the time when the three resolutions were taken Aiming
High did not exist. Evolution
Investment Holdings is and was not a
company as defined
ins
1 of the Companies
Act as:
"'Company'
means a juristic person incorporated in terms of this Act, a
domesticated
company,
or a juristic person that, immediately before the effective date
-
(a)
was registered in terms of the
-
(i)
Companies Act, 1973 (Act 61 of
1973), other than as an external
company as defined in the Act; or
(ii)
Close Corporations Act, 1984 (Act
69 of 1984), if it has subsequently
been converted in terms of
Schedule 2;
(b)
was
in existence
and
recognised
as an
'existing
company'
in terms
of the
Companies Act, 1973 (Act 61 of
1973); or
(c)
was deregistered in terms of the
Companies Act, 1973 (Act 61 of 1973), and
has subsequently
been re-registered
in terms of this Act.
"
[24]
If Evolution investments was not a
company in terms of the aforementioned definition and as conceded by
Mr Simons in his founding
and replying affidavits, and the
Municipality's resolution was entered into with this non-entity, it
begs the question, what is the
legal basis for the applicant's
locus
standi?
[25]
It
is clear from the three resolutions as well as the wording thereto,
that
the
Municipality was offering the property to a company by the name of
Evolution
Investment Holdings. The pronouncements by Corbett JA in
Levin
v Drieprok
[3]
are
instructive:
"
It
is a cardinal principle of the law of contract that a simple
contractual offer made to a specific person can be accepted only by
that person; and that, consequently, a purported acceptance by some
other person is ineffectual and does not bring about the conclusion
of a contract ...The manifest reason for this is that there is no
intention on the part of the offeror to contract
with
such
other
person ...Moreover,
as pointed out in the American
Jurisprudence, 2nd
ed.,
vol
17, sec,42-
,
...
everyone has a right to select and
determine with whom he will contract and another cannot be thrust
upon him without his consent,
regardless of whether the offeror had
special reasons for contracting with the offeree rather than with
someone
else.'
(See also Williston on Contracts, 3rd
ed.
Sec.80). Critical to the
application of this principle, as formulated
above, is that it should
be a simple contractual offer
made to a specific person.
..
.In
this process of interpretation the aim is to ascertain the intention
of the offeror as reflected in the terms of the offer and
any other
admissible evidence
.
In
cases where the offer is contained in a written document the
extraneous evidence that may be taken into consideration will be
circumscribed
by the rules relating to the admissibility
of parol
evidence;
and where the written offer
relates to a sale of land to
which
the provisions of sec.I of Act 68
of 1957 (or
,
in
the case of contracts concluded after 1 January 1970, the provisions
of sec
.
I
of Act 71 of 1969) apply, the requirement that the essential terms of
the sale, including the identity of the parties,
must
appear
ex facie the
writing
may also limit the admissible
evidence.
"
[26]
There can be no gainsaying that the
offer to sell the property was made to Evolution Investment Holdings
and not to Aiming High Development
Corporation. It boggles one's mind
how Aiming High can demand the transfer of the property in its name
without any legal basis. It
is irrefutable that the purported
acceptance of the offer to sell the 24 hectares of land was made by
Evolution Investment Holdings.
It is further of significance that the
offer cannot be legally accepted by a non-existent entity. Regard
being had to the aforementioned
circumstances and findings, it
follows that Aiming High has failed to make a case on its
locus
standi.
This finding on its own is
dispositive of the application. I will, however, for the sake of
completeness, proceed to demonstrate why
it has also not made out a
case for the relief of
Mandamus.
Mandamus:
Prayer 2 and 3 of the Notice of
Motion
[27]
Aiming
High is seeking a mandatory interdict against the Municipality to do
everything necessary including signing the papers to transfer
the
fixed property known as the remainder of Erf 5337, Kimberley, into
its name.
The
applicant should
satisfy
the requirements as laid down in
Setlogelo
[4]
in
that it has to
establish
a clear right, an injury actually committed or reasonably apprehended
and the absence of similar protection by any other
ordinary remedy.
In
Setlogelo
[5]
Innes CJ stated:
"The
requisites for the right to claim an interdict are well known; a
clear right, injury actually committed
or reasonably apprehended
,
and the absence of similar
protection by any other ordinary remedy."
[28]
Has Aiming High established a clear
right or legal right vesting in it or not? I have no doubt that no
such right exists, in my view,
Aiming High
has had no dealings whatsoever with the
Municipality. Its failure to substantiate the link between Aiming
High and Evolution Investment
is conspicuous.
It has also not
demonstrated
any actual injury committed
or
a
reasonable apprehension of injury as there were no interactions with
the Municipality where Aiming High was involved. It follows,
therefore, that Aiming High has failed to meet the prerequisites to
succeed in an order for a
mandamus.
[29]
On a question of costs.
The
Municipality has urged this Court to order punitive costs against the
applicant on the basis of the alleged fraud by Simons following
a
purported misrepresentation that Evolution Investment is a company
when transacting with it consequent upon which the applicant
acted by
launching this application to demand transfer of the property. In as
far as costs in prayer 1 are concerned in respect of
an order by
agreement between the parties, Mr Knoetze argued that, the
Municipality's consent to the order was for different reasons
and not
because Aiming High has lodged the review application. This does not,
argued
counsel,
entitle
Aiming
High
to
an
order
of
costs.
He
further
contended
that 15 of the 94 paragraphs in the
founding
affidavit,
and only 3 of the 69 paragraphs in the heads of argument, relate to
the review and
therefore
the municipality ought not to be mulcted.
[30]
In countering the submission Mr Olivier
argued that the Municipality's conduct
has necessitated
the launching
of this application
by failing
to
·
provide
feedback when requested to do so and costs must be ordered against
it.
[31]
It
is an accepted
legal
principle
that
costs
ordinarily
follow
the
result
and
a
successful party is therefore entitled
to
his or her or its costs. Tindall JA in
Nel
v Waterberg Landbouwers Ko-operatieve Vereeniging
[6]
made the following
remarks
pertaining
to
costs
on
an attorney and
client
scale:
"The
true explanation of awards of attorney and client costs not expressly
authorised
by
Statute seems to be that, by reason of special considerations arising
either from the circumstances which give rise to the action
from the
conduct of the losing party, the court, in a particular case
considers it just, by means of such an order, to ensure
more
effectually
that it can do by means of a
judgment for party and party costs that the successful party
will
not be out of pocket in respect
of the expenses caused to him
by
the litigation. Theoretically, a party and party bill taxed in
accordance with the tariff will be reasonably sufficient for that
purpose. But in fact a party may have incurred
expense
which
is reasonably necessary but
is not chargeable in the party and party bill. See Hearle and McEwan
v Mitchell's
Executor
(1922 TPD 192).
Therefore in a
particular case the Court
will
try to ensure, as far as it can,
that the successful party is recouped. I say 'as far as it can
'
because there may be a
considerable difference between
the amount of the attorney and client bill
which
a
successful
party
is bound to pay to his own
attorney and the amount of an attorney and client bill
which
has been taxed against the losing
party
...
"
[32]
The
Municipality has not only caused the inordinate delay in having this
matter finalised but could have realised earlier that there
were
problems with the status of Evolution Investment Holdings and acted
upon it timeously. This is where the remarks by Navsa
JA
in
MEC:
Department
of
Police,
Roads
and
Transport,
Free
State
Provincial
Government
v
Terra
Graphics (Pty) Ltd t
/
a
Terra Works and another
[7]
are
apposite when he said:
"Government
should
be a
scrupulous
role model.
"
In
this instance, had the Municipality been meticulous, it would have
discovered that Evolution Investment Holdings does not exist
as a
company.
[33]
It is also an accepted legal principle
that the awarding of costs is in the discretion of the Court. I am,
however, not inclined to
make a punitive cost order as requested
by the Municipality.
[34]
In the result, the following order is
made:
It
is ordered:
1.
That, by agreement between the parties,
the Resolution taken by the Council of the first respondent on 22
July 2020 during a virtual
special council meeting in terms whereof
the property known as Remainder of the Erf 5337, Kimberley (also
known as Erf 5337, Waterloo
Road, West End, Kimberley and also known
as the BMW site) to be made available for rehabilitation and
development by the second respondent
is reviewed and set aside.
2.
That the relief sought by the applicant
in prayers 2 and 3 of the Notice of Motion is refused.
3.
That
the
applicant
pay
the
first
respondent's
costs
of
the
application on a party and party scale.
MAMOSEBO
J
NORTHERN
CAPE DIVISION
I
concur
SYNDERS
AJ
NORTHERN
CAPE DIVISION
For
the applicant:
Adv AD Olivier
Instructed
by:
Van
Den Reever Attorneys
For
the first respondent:
Adv
B Knoetze SC
Instructed
by:
Van de Wall Inc
[1]
71 of 2008.
[2]
2019 (3) SA 451
(SCA) at 454 para 7.
[3]
Levin
v Drieprok Properties (Pty) Ltd
1975 (2) SA 397
(A) at 407C -
408A
[4]
Setlogelo v Setlogelo 1914 AD 221.
[5]
At 227.
[6]
1946 AD 597
at 607.
[7]
[
2015)
4
All SA 255
(SCA)
at
para 21