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[2020] ZALMPPHC 27
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Elias Motsoaledi Local Municipality v Van der Hoven (HCA10/2019) [2020] ZALMPPHC 27 (22 May 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
(1)
REPORTABLE: YES
(2)
OF INTEREST TO
OTHER JUDGES: NO
(3)
REVISED: YES
CASE NO:
HCA10/2019
22/5/2020
In the
matter between:
ELIAS
MOTSOALEDI LOCAL MUNIPALITY
APPELLANT
And
VAN DER HOVEN, EMILE
PAUL
RESPONDENT
JUDGMENT
MUDAU, J:
[1] This appeal arises
from an order of the Magistrate's Court, Groblersdal, which
dismissed
the appellant's counterclaim, but granted the claim in convention
contrary to its factual findings, as well as the order
given
regarding costs. The appellant seeks an order upholding the appeal
against the order of the magistrate, with costs. The respondent
confirmed in writing that the appeal is not opposed and will abide
this court's decision. After an agreement with counsel, this
appeal
was disposed of without further oral submissions in open court,
pursuant to section 19 (a) of the Superior Courts Act
[1]
.
The issues that arose for determination will be best understood
against the background that follows. The facts are largely common
cause.
[2] The appellant is a
Municipality as contemplated in section 2 of the Local Government
Municipal Systems Act.
[2]
The Municipality was the first defendant in the court
a quo
whereas Rekhuditse Construction and Cleaning Services CC
(Rekhuditse) against whom the claims were later withdrawn, was the
second
defendant. The respondent, a practicing advocate of the High
Court, was the plaintiff. The claims in convention concerned the
payment
of certain fees by the appellant to the respondent in his
capacity as an adjudicator. The respondent was appointed in that
capacity
on 23 September 2016 facilitated by The Construction
Industry Development Board (CIDB) following a dispute between the
appellant
and Rekhuditse. The dispute between the appellant and
Rekhuditse centred on a project of upgrading a road. This project
followed
a tender process, which was awarded to Rekhuditse.
[3] It is common cause
between the parties that at a preliminary meeting held on
28 October
2016 between the appellant, Rekhuditse and the respondent, the
respondent was given a mandate to determine three disputes
between
the appellant and Rekhuditse. These were: (a) the issue of
cancellation of the contract or repudiation thereof, (b) the
issue of
payments made to subcontractors and (c) the return of performance
guarantees. The parties agreed that the disputes were
to be
adjudicated upon by the respondent based on founding, answering and
replying papers submitted by the parties. It is common
cause that the
appellant paid an amount of R15 000.00 to the respondent as a deposit
at the start of the adjudication process.
[4] Subsequently and
during February 2017 (on 8 and 28 February 2017 respectively),
after
the appellant had submitted its answer to Rekhuditse's "statement
of case", the respondent, of his own accord reached
an "interim
decision", which was followed by an "amended interim
decision" on a procedural issue. The respondent
directed the
appellant to pay his "wasted costs and expenses to date"
this being R62 373.80 less any contribution made
as per the statement
of income and expenditure attached to the interim decision. The
appellant paid R31 186.90 this being 50% of
the amount as directed on
17 March 2017 pursuant to an existing agreement. The appellant
contended that the "interim decision"
as well as the
"amended interim decision" fell outside the scope of the
respondent's mandate and jurisdiction in the
adjudication of the
disputes referred to him upon advice by legal counsel on 27 March
2017. Therefore, the payment was made erroneously.
The appellant had
pleaded and contended that the appellant made the payment to the
respondent under the
bona fide
but mistaken belief that the
payment was due to the respondent.
[5] Pursuant to the
advice by legal counsel, the appellant and Rekhuditse's legal
representatives met. Subsequent to the said meeting, the appellant's
attorney sent a letter to the respondent on 3 April 2017 with
copies
to Rekhuditse and its legal representatives. The letter advised the
respondent that the appellant would launch an application
in the High
Court to review and set aside his "Decisions". The
respondent was further advised,
"to desist in any further
handling of the matter until the aforesaid review has been
completed'.
The respondent was also advised that a roundtable
meeting was held -with the legal representatives of Rekhuditse who
indicated unequivocally,
that they will abide the appellant's
application to the High Court for the review of the matter.
[6] On 19 of April
2017, the respondent notified the parties that his "Final
Decision" was ready for publication. Furthermore, that the final
amount of costs was R94 312, 00 or the amount of R47 156,
00 due by
each party. Rekhuditse paid its share of the final contribution to
the costs as stipulated above. By 19 June 2017, the
appellant had not
paid the R31 186.90 and R47 156, 00 amounts claimed by the
respondent.
[7] Consequently, the
respondent's attorneys sent a letter of demand to the appellant
and
further advised that if payments were not made on or before the
stipulated date, the appellant was given notice in terms of
section 3
of the Institution of Legal Proceedings Against Certain Organs of
State Act.
[3]
On or about 20 July 2017 the appellant launched the application at
the Gauteng Local Division, Johannesburg to have the respondent's
"Interim Decision" and "AmendedInterim Decision"
set aside. On 12 October 2017, the court per the Honourable
Madam
Justice Modiba J, granted the application on an unopposed basis. The
order by Modiba J was not appealed.
[8] Together
with its plea, the appellant delivered a counterclaim pursuant
to
Rule 20 (1) of the Magistrates' Court (Civil) Rules. In its
counterclaim, the appellant sought the repayment of the amount of
R31
186.90 previously paid to the respondent on 17 March 2017 based on
unjustified enrichment. On the appellant's case, the return
of such
monies became due because of the respondent's decisions that were set
aside by Modiba J. However, on the first day of trial
at the
magistrate's court the respondent abandoned his first claim against
the appellant involving the payment of the amount of
R31 686.90, but
persisted with his claim regarding the amount of R47 156.00 for his
"Final Decision".
[9] The trial
magistrate concluded in his written judgment dated 24 May 2019 after
the conclusion of the trial at paragraph [27] that:
"the
court is further in full agreement with the 1
st
defendant's contention that the plaintiff
was
not entitled to
be remunerated for work he had done outside the scope of his mandate
and to which work
was
set aside by the High Court ruling. Even
the Plaintiff must have realized that he will not be entitled to
claim fees and costs for
work he had done outside of his mandate and
therefore he abandoned his claim in this regard at the start of the
trial. In all fairness
to the Plaintiff it must be noted that the
High Court ruling
was
not available at the time of the issue
of the summons in this matter which will explain why the first claim
of the plaintiff
was
included in the summons at that time."
[10] The magistrate continued at
paragraph [30]:
"[A]s determined earlier, the plaintiff
was
not entitled to any payments with regard to the wasted costs
account and the payments made by the first defendant totalling an
amount
of R46 186.90 (forty six one hundred and eighty six rand and
ninety cents) should stand to the credit of the 1st defendant's
credit
account."
[11] The order by the learned
magistrate was couched in the following terms: "In the result
the following order is made: (i) the plaintiff abandoned the first
claim of R31 186,90 and therefore the claim is dismissed; (ii)
judgment on the second claim of the plaintiff is granted in favour of
the plaintiff against the first defendant in the amount of
R969.10
(nine hundred and sixty nine rand and ten cents) together with
interest thereon at the rate of 10.5% per annum is from
19 April
2017; (iii) The counterclaim of 1st defendant is dismissed; (iv) An
order as to costs reserved for argument".
[12] It is common cause between the
parties that on 24 May 2019 after hearing submissions regarding
costs, the learned magistrate ordered each party to pay its own
costs.
[13] The attack in this appeal directed
against the orders made by the learned magistrate is three-pronged.
First, the dismissal of the appellant's counterclaim. Secondly, the
upholding of the respondent's second claim regarding the amount
of R
47 156.00. Third, the findings on costs referred to in paragraph 12
above.
[14] The dismissal of the appellant's
counterclaim is inconsistent with the learned magistrate's
findings
in that regard as alluded to above. Despite the wording of the
relevant paragraph (iii) in dismissing the counterclaim,
he confirmed
that the appellant was successful in its counterclaim. As to the
counterclaim, the appellant thus surmounted the hurdle
of showing
that its claim was dismissed without merit.
[15] With reference to the judgment on
merit, on the occasion that the costs were argued, the learned
magistrate proffered an explanation for his orders in the following
terms:
" Adv Steenkamp is correct in her accession [sic] to
say
that although the counterclaim
was
dismissed in
essence the first defendant
was
successful in its action in
court because the got the credit, they deserve for the money they pay
[sic]. It was just a mere practicality
that the credit was taken into
account by adjudication of the second claim of the plaintiff rather
than two separate issues. The
reason the court also did this at that
stage is it will be really silly to grant the plaintiff's claim on
the second count as well
as the defendant's claim, counterclaim and
then have both parties excerpt even more legal costs by executing
their different judgments
[sic]. In other words, it would be a
duplication and therefore the court structured its judgment in such a
way as to actually try
and benefit both parties to consolidating it
to one claim. Therefore, I agree with Adv Steenkamp that in essence
the first defendant
was also successful in their claim."
[16] Accordingly, the learned
magistrate took the R47 156-00 that he awarded to the respondent and
deducted the amounts, which in his view were due by the respondent to
the appellant. Put simply, he deducted R15 000-00 paid for
by the
appellant as deposit as well as an amount of R31 186.90 which he in
his mind, as explained in the preceding paragraph had
awarded the
appellant from the R47 156-00 that he awarded to the respondent. This
explains the award of R969.10 in the respondent's
favour.
[17] As counsel for the appellant
contended, despite the learned magistrate's best intentions, he
erred
by applying what he termed "a set off'. There was no request by
the parties for a merger of the relief sought in the
main action and
the counterclaim. In our law, it is well established that a claim in
convention and a claim in reconvention are
in essence, two separate
claims
[4]
.
Effectively, the order made deprived the appellant years of interests
on the amount awarded in the counterclaim. Prayer 2 of the
counterclaim was for
"interest on the (principal amount) from
the date of counterclaim (being 18 September 2018) to date of final
payment a tempore
morae".
It is a well-established principle
of our law that where two persons are mutually indebted to each
other, their obligations may
be extinguished by set-off.
Significantly, however, it is trite that set off can only take place
in respect of liquidated claims,
in the sense of having been capable
of speedy and easy proof.
[5]
[18] As for the appeal against awarding
the respondent R969.10 from the initial amount in the second
claim in
convention, the learned magistrate reasoned that the 3 April 2017
letter by the appellant calling upon the respondent
to cease and
desist from handling the adjudication any further, was unilateral.
Rekhuditse paid the respondent its fees due on
17 May 2017, which was
six weeks after the 3 April 2017 letter was sent. Significantly, the
respondent had already advised the
parties on 19 April 2017, which is
four weeks earlier that his 'Final Decision' was ready for
publication.
[19] The court
a quo
opined that
the appellant's conduct in suspending the respondent's mandate did
not enjoy the support of Rekhuditse. This approach
was fundamentally
flawed in that, as the appellant pointed out, Rekhuditse were copied
in the letter of 3 April 2017. Rekhuditse
did not have a counter view
and equally significant, after a roundtable meeting regarding the way
forward in challenging the adjudicator's
decisions. Quite clearly,
Rekhuditse's election to pay as it did six weeks later has no
rational connection in making common cause
with the appellant to
suspend the mandate given to the respondent.
[20] It is generally accepted that
'quiescence it is not necessarily acquiescence', and that a party's
failure to reply to a letter stating the existence of an obligation
owed by such party to the writer does not always justify an
inference
that the assertion was accepted as the truth. In
McWilliams v
First Consolidated Holdings
[6]
,
adopting the approach by Watermeyer CJ in
Collen v Rietfontein
Engineering Works
[7]
,
Miller JA, asserted aptly thus:
"But in general, when
according to ordinary commercial practice and human expectation firm
repudiation of such an assertion
would be the norm if it
was
not
accepted
as
correct, such party's silence and inaction, unless
satisfactorily explained, may be taken to constitute an admission by
him of the
truth of the assertion, or at least will be an important
factor telling against him in the assessment of the probabilities and
in the final determination of the dispute".
[21] In the
McWilliams
matter,
the appellant and one S, representing the respondent had negotiated a
sale of certain shares in a company. Shortly thereafter,
S had
written a letter to the appellant confirming that in their meeting,
the appellant had agreed to purchase the shares for R55
000, 00. The
appellant failed to reply to the letter. In an action in a Local
Division for the payment of the purchase price of
the shares, the
respondent relied on an unsigned note by S that the purchase price
was R55 000-00. In dismissing the appeal, it
was held that the
appellant's silence and inaction after receipt of the letter justify
an inference adverse to him in that regard.
[22] Adopting the approach
in
McWilliams,
I hold that the learned magistrate was in this
instance wrong in concluding that the appellant acted unilaterally in
suspending
the mandate of the respondent without the support of
Rekhuditse, whereas the latter was notified of this fact in writing,
but remained
silent. Silence is equivalent to consent when there is a
duty to speak.
[8]
I accordingly hold that on the probabilities, Rhekhuditse had
acquiesced in the conduct by the appellant in the instruction given
to the respondent to desist in any further handling of the matter
until the review was completed, as it had a direct interest in
the
matter.
[23] Absent the mandate by the
appellant and Rhekhuditse, it follows accordingly, that the
respondent
lacked the necessary authority to continue with the
adjudication process beyond the 3 April 2017 letter. Consequently,
the respondent's
mandate was suspended effective on 3 April 2017. It
is worth noting that the respondent, as counsel for the appellant
also pointed
out, gave conflicting evidence with regard to how much
work had already been done in relation to the Final Decision as at
the time
the 3 April 2017 letter was received. The answer he gave
was:
"shortly after this letter, also in April, I proceeded
to do the Final Decision in the adjudication" .
The answer
given, clearly suggested that he started with the task regarding the
Final Decision in spite of the 3 April 2017 letter.
[24] In response to a suggestive
question by his own legal representative as to how far he was in
reaching his Final Decision on 3 April 2017, the answer was,
"I
was very close to finish" .
As the proverbial saying
goes, the respondent was 'blowing hot and cold' at the same time. The
evidence given was contradictory
in that respect, as the court a
quo
also pointed out during the proceedings. On the probabilities,
the respondent failed dismally in discharging the onus of proof that
rested upon him in proving the second claim. Regard being had to the
entire facts placed before the court a quo, the respondent's
claim
should have been dismissed and the counterclaim, granted. It follows
that the appeal must succeed.
[25] It remains to deal with the appeal
on costs. It is trite that a court a
quo
has discretion to
determine the costs, if any, to be awarded. This court on appeal has
limited scope to interfere with a costs order.
An interference is
only permissible in circumstances where the court on appeal, is
satisfied that the discretion was not exercised
judicially or that it
had been influenced by principles that are wrong, a misdirection or
incorrect appreciation regarding the
facts.
[9]
[26] It is well established regarding
the question of costs that the general rule is that 'costs
follow the
result'. It is only in exceptional circumstances to justify a
departure from the general principle that costs follow
the result.
The appellant in this case has been successful on appeal regarding
the merit of the claim. There are no cogent reasons
justifying a
departure from the general principles pertaining to costs in respect
of the proceedings in the court
a quo.
However, since the
appeal is unopposed, I take the view that there should be no order as
to costs insofar as the appeal is concerned.
[27] The following order is made:
27.1 The appeal is upheld.
27.2 The order made by the court
of first instance is set aside and substituted with an order
in the
following terms:
'(a) The plaintiff's claim
is dismissed with costs.
(b) The defendant's counterclaim is granted.
(c) Judgment is granted against the plaintiff for the payment
of R31 186.90 (THIRTY ONE THOUSAND ONE HUNDRED AND NINETY CENTS)
with
interest from the date of the judgment (24 May 2019) to date of final
payment at the applicable rate.
(d) Costs of suit'.
[28] No order is made in respect of the
costs of appeal.
MUDAU J
JUDGE OF THE HIGH COURT
I agree.
MAKGOBA JP
JUDGE
PRESIDENT OF THE LIMPOPO
DIVISION
OF THE HIGH COURT
APPEARANCES
For the
Appellant:
Adv. A Steenkamp
Instructed by:
Khumalo Masondo Attorneys
For the
Respondent: No
Appearance
Date of
Set down:
15 May 2020
Date of
Judgment:
22 May 2020
[1]
10 of 2013
[2]
32 of 2000
[3]
40 of 2002
[4]
See
Pilcher
&
Conways (Pty) Ltd v Van Heerden
1963(3)
SA 205(0) at 209 A-8 ;
Acs v Acs
1981(2) SA 795(W) at 797 A -
H;
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 1337
D-F.
[5]
Blakes Maphanga Inc v Outsurance Insurance
Co
Ltd
2010
(4) SA 232
(SCA) at para 15;
Fatti's Engineering
Co
(Pty)
Ltd v Vendick Spares (Pty Ltd
1962 (1) SA 736
(T) at 738F-G.
[6]
1982 (2) SA 1
(A) at 10E-F
[7]
1948 (1) SA413 (A)
[8]
See
Commaille v Steyn
1914 CPD 1100
at 1103;
Seeff
Commercial and Industrial Properties (Ply) Ltd v Silberman
[2001)
3 All SA 133 (A)
[9]
See
Trencon Construction (Pty) Limited v Industrial Development
Corporation of South Africa Limited and Another
2015 (5) SA 245
(CC) at para 88;
Ferris v FirstRand Bank Ltd
2014 3 SA 39
(CC) at paras 28 and 29