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[2021] ZAKZPHC 53
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Ethekweni Municipality v Morar Incorporated (8786/2021P) [2021] ZAKZPHC 53 (24 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Not
Reportable
Case
No: 8786/2021P
In
the matter between:
ETHEKWENI
MUNICIPALITY PLAINTIFF
and
MORAR
INCORPORATED RESPONDENT
ORDER
The
following order is granted:
1. The
respondent is ordered to deliver to the applicant all time sheets and
further documentation explaining and
justifying all charges raised by
the respondent, all invoices delivered by the respondent to the
applicant, and all work product
(including reports, memoranda,
recommendations and the like) generated and/or delivered to the
applicant, pursuant to the following
alleged appointments:
1.1 Annexure
RM1 to the founding affidavit: 20 March 2018 – letter of
engagement: review of supply chain
management;
1.2 Annexure
RM2 to the founding affidavit: 14 May 2018 – letter of
engagement: forensic investigation services;
1.3 Annexure
RM4 to the founding affidavit: 27 August 2018 – letter of
engagement: review of supply chain
management;
1.4 Annexure
RM6 to the founding affidavit: 6 February 2019 – letter of
engagement: appointment of a service
provider to provide support to
the office of the City Manager in implementing consequence management
processes;
1.5 Annexure
RM7 to the founding affidavit: 5 July 2019 – letter of
engagement: appointment of a service
provider to review the current
status of enhancement requests for the revenue management system; and
1.6 Annexure
RM8 to the founding affidavit: 22 November 20219 – letter of
engagement: appointment of a service
provider to implement the
consequence management (disciplinary process) against various
implicated employees/officials of the applicant.
2. The
respondent is ordered to pay the costs of this application.
JUDGMENT
Laing AJ
Introduction
[1] At
issue in this application is whether the respondent is obliged to
deliver to the applicant, and I quote
from the notice of motion:
'all time sheets and
further documentation explaining and justifying all charges raised by
it, all invoices delivered by it to eThekwini
and all work product
(including reports, memoranda, recommendations and the like generated
and/or delivered to eThekwini, pursuant
to the following alleged
appointments',
as
amplified in the notice of motion and referred to in annexures RM1;
RM2; RM4; RM6; RM7 and RM8.
Background
[2] It
appears that there was a contract in place between the applicant and
respondent.
[3] In
terms of this contract an amount of more than R36 million was paid by
the applicant to the respondent for
services allegedly rendered.
[4] As
a result of information received, a decision was taken to investigate
the appointment of and circumstances
surrounding the payments made to
the respondent. In this regard Nexus Forensic Services (Nexus), a
firm of private investigators
was assigned to investigate the
contract and the payments made to the respondent.
[5] As
a result of this decision, in March 2020, the respondent launched an
urgent application in this court under
case number 2296/2020P
interdicting Nexus and the applicant from pursuing this
investigation. This matter is still pending. The
applicant
subsequently brought the present application during December 2020.
Common cause
[6] It
is not disputed by the respondent that the items asked for do in fact
exist nor is it disputed that payment
was received. It has not put up
any defence as to why those items claimed for, which I will out of
convenience refer to as 'the
documents', should not be handed over.
So it is safe to assume that the items do exist and they are in the
possession of the respondent.
Issues
[7] All
the respondent has indicated in its opposition is that this
application is an
abuse
of the process as all affidavits have
been filed in case no 2296/2020P and as a result 'there is no
obligation on the respondent
to furnish documents at this late
stage'. I may mention that I was provided with a copy of the file of
case no 2296/20 and noticed
that the last time there was any movement
in that file was in June 2020 when the replying affidavit was filed
by the respondent
(applicant in case no 2296/20), but this does not
mean anything.
[8] It
is suggested that because the work was delegated to Nexus, this
application by the applicant usurps that
authority given to Nexus and
under the circumstances is an abuse.
[9] The
reply by the applicant is that this appointment of Nexus does not
render the applicant sterile to pursue
the present application. On
the contrary, it suggests that annexure RM 10 on page 49 of the first
application, is a letter of appointment,
dated 21 February 2020,
where the cooperation of the applicant is necessary and not excluded.
[10] Secondly,
the other suggestion as to why this is viewed as an abuse by the
respondent is because Nexus does
not have the authority to
investigate the applicant (I assume this is as a result of the
interdict brought by the respondent).
It is argued that the applicant
is thus trying to bring this application through the back door so to
speak.
[11] The
applicant's response is that the locus of the applicant is not
affected by the mandate given to Nexus.
[12]
It
must in the circumstances be asked whether this application is to
achieve an illegitimate purpose as stated in
Beinash
v Wixley
:
[1]
'There can be no
all-encompassing definition of the concept of "abuse of
process". It can be said in general terms, however,
that an
abuse of process takes place where the procedures permitted by the
Rules of the Court to facilitate the pursuit of the
truth are used
for a purpose extraneous to that objective.'
Although
not raised in the papers, the respondent raised the issue of
lis
pendens
in their heads of argument. The submission is that the
application is linked to the proceedings under case number
2296/2020P
.
This argument was abandoned by Mr Potgieter SC on
the basis that it was not pleaded.
[13] However,
the issue of whether these proceedings are an abuse must still be
addressed.
[14]
South
African High Courts possess inherent jurisdiction to prevent abuse of
their process by staying proceedings in certain circumstances,
but
the power to do so will be exercised sparingly and only in
exceptional cases.
[2]
[15]
This
should be done with very great caution, and only in clear cases.
[3]
[16]
Proceedings
will be stayed when they are vexatious or frivolous or when their
continuance, in all the circumstances of the case,
is, or may prove
to be, an injustice or serious embarrassment to one or other of the
parties.
[4]
Merits of the application
[17] It
is common cause, and it is not disputed, that the applicant paid the
respondent in excess of R36 million
for services rendered.
[18] It
is common cause that the respondent is on the applicant's list of
service providers. The issue of whether
the services were actually
provided is not really an issue at this point, but the applicant has
reserved the right to pursue this
aspect, I suppose, once its
investigation is complete.
[19] On
10 February 2021, the respondent put up what it refers to as a
'conditional answering affidavit' as it
reserves the right, so it
says, to supplement this affidavit once it is in receipt of the
information requested by way of notice
in terms of rule 35(12). That
notice was served on the applicant on 9 February 2021. This affidavit
has not been supplemented since.
Furthermore, there is no indication
of what has become of that notice. The time for reply has lapsed so
it is safe to assume that
it has been abandoned. Likewise, it is safe
to assume that the respondent effectively closed the door it tried to
leave open to
supplement its affidavit. The abandonment of the
lis
pendens
argument also confirms that.
[20] The
respondent does not dispute that it has the documents in its
possession, nor does it dispute the applicant's
right to them. In
effect, the respondent does not have a proper defence on the merits
to the applicant's claim and must have submitted
the documents in
question to substantiate the fees due. If they did not do so, then
the question that arises is why were they paid?
This is perhaps the
reasons for the investigation. There is nothing illegitimate about
this application. The applicant is a public
body and is responsible
to the public. It has an obligation to investigate wasteful and
unnecessary expenditure. There is absolutely
nothing abusive in the
process that has been followed neither is there any suggestion of
prejudice to the respondent. The opposition
put up by the respondent
coupled with the interdict to prevent any investigation is
concerning.
[21] When
one weighs up the arguments put forward by the respondent against the
intentions of the applicant one
cannot but help realise that there is
more out there than what meets the eye. What immediately comes to
mind is that the hands
of the respondent do not appear to be clean
and perhaps that is what the applicant intends resolving, after all
it is in the public
interest to do so. This is not to suggest that
the hands of those in the employ of the applicant are clean.
[22] The
main thrust of the respondent's case is that the applicant has abused
the court process. Mr Boulle for
the applicant submitted if that is
the case, then the respondent should not be relying on the submission
that it is an abusive
process as they have abandoned the
lis
pendens
defence.
[23] This
is a separate application to that under case number 2296/2020P, where
an interdict was sought.
[24] The
intention of the applicant cannot be said to be frivolous nor can it
be said to be vexatious.
Order
[25] Under
the circumstances, I grant an order in the following terms:
1. The
respondent is ordered to deliver to the applicant all time sheets and
further documentation
explaining and justifying all charges raised by
the respondent, all invoices delivered by the respondent to the
applicant, and
all work product (including reports, memoranda,
recommendations and the like) generated and/or delivered to the
applicant, pursuant
to the following alleged appointments:
1.1 Annexure
RM1 to the founding affidavit: 20 March 2018 – letter of
engagement: review of supply chain
management;
1.2 Annexure
RM2 to the founding affidavit: 14 May 2018 – letter of
engagement: forensic investigation services;
1.3 Annexure
RM4 to the founding affidavit: 27 August 2018 – letter of
engagement: review of supply chain
management;
1.4 Annexure
RM6 to the founding affidavit: 6 February 2019 – letter of
engagement: appointment of a service
provider to provide support to
the office of the City Manager in implementing consequence management
processes;
1.5 Annexure
RM7 to the founding affidavit: 5 July 2019 – letter of
engagement: appointment of a service
provider to review the current
status of enhancement requests for the revenue management system; and
1.6 Annexure
RM8 to the founding affidavit: 22 November 20219 – letter of
engagement: appointment of a service
provider to implement the
consequence management (disciplinary process) against various
implicated employees/officials of the applicant.
2. The
respondent is ordered to pay the costs of this application.
LAING
AJ
DATE
OF HEARING: 28
July 2021
DATE
OF JUDGMENT: 24
August 2021
FOR
THE APPLICANT: Mr
A J Boulle
INSTRUCTED
BY: Venns,
Durban
Locally
represented by: Venns, Pietermaritzburg
FOR
THE RESPONDENT: Mr A E
Potgieter SC
INSTRUCTED
BY: Schoerie
& Sewgoolam Inc, Pietermaritzburg
[1]
Beinash
v Wixley
1997
(3) 721 (SCA) at 734F.
[2]
Western
Assurance Co v Caldwell's Trustee
1918
AD 262
at 274;
Corderoy
v Union Government (Minister of Finance)
1918
AD 512
at 518-519;
Hudson
v Hudson
1927
AD 259
at 267.
[3]
Fisheries
Development Corporation of SA Ltd v Jorgensen and another; Fisheries
Development Corporation of SA Ltd v AWJ Investments
(Pty) Ltd and
others
1979
(3) SA 1331
(W) at 1338E-H.
[4]
Western
Assurance Co v Caldwell's Trustee
1918
AD 262
at 274.