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[2020] ZALMPPHC 90
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Hunadi -a- Mahlakudi Construction & Enterprise v Mulalo Business Enterprise CC and Others (6400/2020) [2020] ZALMPPHC 90 (20 October 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
(1)
REPORTABLE:
NO/
YES
(2)
OF
INTEREST TO OTHER JUDGES: NO/
YES
(3)
REVISED.
CASE
NO: 6400/2020
In
the matter between:
HUNADI-A-MAHLAKUDI
CONSTRUSTION
&
ENTERPRISE
APPLICANT
and
MULALO
BUSINESS ENTERPRISE CC
1
st
RESPONDENT
SEKHUKHUNE
DISTRICT MUNICIPALITY
2
nd
RESPONDENT
WARD
29 BUSINESS FORUM
3
rd
RESPONDENT
JUDGMENT
NAUDE AJ:
[1]
The
Applicant brought an urgent application on 20 October 2020 wherein
the Applicant applied for a final interdict to be issued.
The
Applicant contends that the First Respondent issued an invitation for
tenders for the De Hoop/Malekana Water Scheme Contract
under tender
number SKB/1-35/2018/,1 and local Ngwaabe small and medium
enterprises (SMME'S) were invited to carry out work on
the project
implementation, which included the supply of mobile toilets, the
supply of Diesel, the supply of water and the provision
of plant for
Hire (which includes TLB's, Escavators, tipper trucks and other
necessary equipment). The Applicant submitted a tender
to the first
Respondent by hand on the 19
th
of June 2020. According to the Applicant, the First Respondent
accepted the proposal of the Applicant in writing, agreeing that
the
Applicant would perform the works indicated on Bill 5, 6 and 9 of the
project for the De Hoop/Malekane water scheme, under
tender
specification SK8/3/1 - 35/2018/19 for the total price of R10 205
637.00.
[2]
On
18 August 2020, Nkopodi Lazzy Makabate ("Makabate")
attended to the office of the First Respondent along with the other
appointed sub-contractors on the appointment to finalise the
sub-contracting rates negotiations and review the scope of the work.
The Applicant contends that a partly written and partly oral
agreement was established between the Applicant, represented by
Makabate,
and the First Respondent, represented by Peter White on the
14th of July 2020. According to the Applicant, the rates and
quantities
for which the work would be done was agreed upon by all
parties on the 18
th
of August 2020. The Applicant has proceeded to source the necessary
employees and equipment to perform in terms of the Applicant's
obligations and rented a TLB, a tipper truck, hired employees, and
subcontracted some of the construction work between the parties.
All
this has been done between the 20th and the 26th of August 2020. On
29 August 2020 a group of people blocked the Applicant's
employees
from unloading material at the site. While blocking the unloading of
material, the unknown people indicated that they
were still waiting
for their issue with Mr. White to be corrected.
[3]
On
3 September 2020 a meeting was called by Mr. White with Makabate and
individuals of Ward 29. There were approximately 40 people
present.
After this meeting, approximately three weeks passed during which
period the Applicant did not get permission to commence
occupation of
the site and proceed with the work. On 24 September 2020 an e-mail
was forwarded to the Applicant wherein the following
was stated:-
"The provisional
appointment letter that Mulalo Business Enterprises has granted you
as
a
sub-contractor,
is greatly disregarded by the community and the business forum under
Ward 29. Therefore, it is with regret to inform
you about the
withdrawal of your provisional appointment as
a
sub-contractor
due to the power that the community and the business forum holds
under Ward 29. The decision of the withdrawal as
stated above, stems
from the power the community and the business forum holds."
[4]
It
is this letter that sparked the bringing of the urgent application by
the Applicant against the Respondents on 20 October 2020
on which
date a final order was issued in the following terms:-
(a)
The matter is declared urgent as
envisioned in Rule 6(12) of the rules of Court and that the ordinary
process of service and filing
is dispensed with, and is ordered to
occur as set out in the notice of motion.
(b)
The First Respondent is ordered to
immediately honour its contractual commitments to the applicant and
maintain the applicants appointment
to perform the items on bills 5,
6 and 9 on the project issued by the second respondent under the
tender specification SK8/3/1
- 35/2018/19, for the De Hoop/Malekane
Water Scheme.
(c)
The third respondent is ordered to
immediately cease harassing, intimidating, exercising improper
influence or enticing the first
respondent to end its contract with
the applicant.
(d)
The third respondent is ordered not to
come within 5 kilometeres of the construction site where tender
SK8/3/1 - 35/2018/19 is being
performed, or to instruct individuals
to come within 5 kilometers of the business site.
(e)
The first and third respondents are
ordered to pay the costs of this application, jointly and severally,
the one paying the other
to be absolved.
(f)
The first respondent may apply for
reasons within 10 days.
[5]
The Respondents immediately gave notice
of their intention to apply for leave to appeal after the hearing of
the matter on 20 October
2020 and a notice of application for leave
to appeal was filed on the 21
st
of October 2020. The grounds for the application for leave to appeal
are as set out in the notice for leave to appeal. The application
for
leave to appeal is still pending.
[6]
On 23 October 2020 the Applicant brought
an urgent application in terms of
Section 18
of the
Superior Courts
Act, 10 of 2013
, in terms whereof the Applicant seeks an order handed
down on 20 October 2020 be carried into effect pending the
finalization of
all appeal proceedings as envisaged in
Section 18(3)
of the
Superior Courts Act, 1O of 2013
, due to the fact that
according to the Applicant, the Applicant will suffer irreparable
harm if the order is not put into operation,
where the First
Respondent conversely will not suffer irreparable harm if the order
is put into operation, and that the First Respondent
be ordered to
immediately comply, as far as they are able, with the order of the
above Court made on the 20
th
of October 2020. It is this urgent application in terms of
Section
18(3)
of the
Superior Courts Act, which
is to be adjudicated upon by
this court.
[7]
Before proceeding with the judgment, I
deem it necessary to mention that while the Applicant believes that
the matter is urgent,
the Respondents did not necessarily concede
that it was and challenged the urgency thereof. In this court's view,
the matter was
indeed urgent and sufficient grounds for urgency was
made out by the Applicant. then proceed with the judgment.
[8]
At the core of this matter is the
determination of whether the order of 20 October 2020 is final or
interlocutory. It was not disputed
between the parties that the order
is indeed a final order. I agree. A characterisation of the order as
final will automatically
suspend their operation and execution as
contemplated in
Section 18(1)
of the Act. The success of that
application lies in the Applicant convincing this Court that the
requirements as laid down in
Section 18(2)
and (3) of the Act have
been met.
[9]
The primary legal principles other than
case authority governing the suspension of court orders is
Section 18
of the Act. The Section provides:
"(1)
Subject to sub-sections (2) and (3), and unless the court under
exceptional circumstances
orders otherwise, the operation and
execution of
a
decision which is
the subject of an application for leave to appeal or of an appeal, is
suspended pending the decision of the application
or appeal.
(2)
Subject to sub-section (3),
unless the court under exceptional circumstances orders otherwise,
the operation and execution of
a
decision that is an interlocutory
order not having the effect of
a
final judgment, which is the subject
of an application for leave to appeal or of an appeal, is not
suspended pending the decision
of the application or appeal.
(3)
A court
may
only order otherwise as contemplated
in sub-section (1) or (2), if the party who applied to the court to
order otherwise, in addition
proves on a balance of probabilities
that he or she will suffer irreparable harm if the court does not so
order and that the other
party will not suffer irreparable harm if
the court so orders.
(4)
If a court orders otherwise, as
contemplated in sub-section (1)
-
(i)
the court must immediately record
its reasons for doing so;
(ii)
the aggrieved party has an
automatic right of appeal to the next highest court;
(iii)
the court hearing such an appeal
must deal with it as a matter of extreme urgency; and
(iv)
such order will be automatically
suspended, pending the outcome of such appeal;
(v)
for the purposes of sub-sections
(1) and (2), a decision becomes the subject of an application for
leave to appeal or of an appeal,
as
soon as an application for leave to
appeal or notice of appeal is lodged with the registrar in terms of
the rules."
[10]
An applicant pursuing an application in
terms of
Section 18(1)
or (2) must satisfy three jurisdictional
factors. These are that:
(a)
The existence of exceptional
circumstances;
(b)
The applicant will suffer irreparable
harm if the suspension in either subsection is not granted; and
(c)
The respondent will not suffer
irreparable harm if relief in either subsection is granted to the
applicant.
The
factors in (b) and (c) here above must be established on a balance of
probabilities. The absence of anyone of the three requirements
will
be adequate to dismiss the application. The Court to which
application for leave to execute is made has a wide general
discretion
to grant or refuse leave and, if leave be granted, to
determine the conditions upon which the right to execute shall be
exercised
(see
Voet, 49.7.3; Ruby's Cash Store (Pty.) Ltd. v
Estate Marks and Another,
1961 (2) SA 118).
[11]
In
lncubeta
Holdings and Another v Ellis and Another (2013/ 30879) [2013] ZAGPJHC
274;
2014 (3) SA 189
(GSJ) (16 October 2013)
at
paragraph 11 thereof it was held as follows:-
"This discretion is part
and parcel of the inherent jurisdiction which the Court has to
control its own judgments
(cf . Fismer v Thornton,
1929 AD 17
at
p. 19).
In exercising this discretion the Court should, in my
view, determine what is just and equitable in all the circumstances,
and,
in doing so, would normally have regard, inter alia, to the
following factors:
1.
The potentiality of irreparable
harm or prejudice being sustained by the appellant on appeal
(respondent in the application) if
leave to execute were to be
granted;
2.
The potentiality of irreparable
harm or prejudice being sustained by the respondent on appeal
(applicant in the application) if
leave to execute were to be
refused;
3.
the prospects of success on
appeal, including more particularly the question as to whether the
appeal is frivolous or vexatious
or has been noted not with the bona
fide intention of seeking to reverse the judgment but for some
indirect purpose, e.g., to gain
time or harass the other party; and
4.
Where there is the potentiality
of irreparable harm or prejudice to both appellant and respondent,
the balance of hardship or convenience,
as the case may be.
(See in this connection Ruby's
case, supra at pp. 127-8; also Rood v Wallach,
1904
T.S. 257
at p.
259; Weber v Spira, 1912
G
T.P.O. 331 at pp.
334-4; Rand Daily Mails Ltd. v Johnston,
1928
W.L.D. 85
;
Frankel v
Pirie,
1936
E.D.L. 106
at pp.
114-6; Leask v French and Others,
1949
(4) SA 887
(CJ at
pp. 892-4; Ismail v Keshavjee,
1957
(1) SA 684
(T) at
pp. 688-9; Du H Plessis v Van der Merwe,
1960
(2) SA 319
(O).)
Although most of the
cases
just cited dealt
with the exercise of the Court's discretion under a statutory
provision or Rule of Court, the statute or Rule concerned
did not
prescribe the nature of the discretion except in broad general terms
(e.g.
secs.
36
and 39 of Proc. 14 of 1902 (T) empower the Court to give directions
as "may in each case appear to be most consistent with
real and
substantial justice'') and the same general approach would be
appropriate to the exercise of
a
discretion under
the aforementioned rule of practice."
[12]
To be successful, the Applicant needs to
demonstrate the existence of all three the requirements that must be
established in respect
of
Section 18
(1) and (3). These are the
existence of exceptional circumstances, that the Applicant will
suffer irreparable harm and that the
First Respondent will not. To
establish whether or not exceptional circumstances are present, each
case must be assessed on its
own peculiar facts.
[13]
In their endeavour to show exceptional
circumstances, the Applicant relies heavily on the fact that the
Applicant wish to claim
for specific performance of the agreement, as
the Applicant wish to perform the work as indicated on the waybills
and the tender
form. The Applicant contends that if the order of 20
October 2020 is suspended pending the outcome of the appeal, the rule
of law
will be undermined, as the Third Respondent would have gotten
away with their oppressive and illegal conduct, and extortion would
be countenanced. The Applicant further contend that if an order as
prayed for in the present matter in terms of
Section 18
of the Act is
not granted, the entire legal process that the Applicant lodged will
be rendered moot, as the two or three months
delay it may take to
finalize the matter will be enough to ensure that the Applicant's
application is rendered moot, since most
items on the waybill will be
completed in the project by then.
[14] What
constitutes exceptional circumstances depends on the facts of each
case. (See
Avnit
v First Rand Bank Ltd
[2014] ZASCA 132
(23/9/14) para 4; S v Dlamini;
S v Dladla & others; S v Joubert; S v Scheitikat
[1999] ZACC 8
;
1999 (4) SA 623
(CC) paras 75-77).
Thring J in MV Ais Mamas
Seatrans Maritime v Owners, MV Ais Mamas & another
2002 (6) SA
150
(C) at 156H
remarked
that:
'1. What is
ordinarily contemplated by the words "exceptional circumstances'
is something out of the ordinary and
of an unusual nature; something
which is accepted in the sense that the general rule does not apply
to it; something uncommon,
rare or different
"
2.
To be exceptional the
circumstances concerned must arise out of, or be incidental to, the
particular case.
3.
Whether or not exceptional
circumstances exist is not a decision which depends upon the exercise
of
a
judicial
discretion: their existence or otherwise is
a
matter of fact which the Court must
decide accordingly.
4.
Depending on the context in which
it is used, the word "exceptional" has two shades of
meaning: the primary meaning is
unusual or different; the secondary
meaning is markedly unusual or specially different.
5.
Where, in a statute, it is
directed that
a
fixed
rule shall be departed from only under exceptional circumstances,
effect will, generally speaking, best be given to the intention
of
the Legislature by applying a strict rather than a liberal meaning to
the phrase, and by carefully examining any circumstances
relied on
as
allegedly being exceptional.'
To summarise, the context is
essential in the process of considering what constitutes exceptional
circumstances.
[15]
As
regards exceptional circumstances in the
lncubeta
case, Sutherland J stated at paragraph 25 to 27
stated:
"[25]
Turning to the circumstances of these litigants, what is relevant ,
in my view, is the following:
25.1
If the order is not put into
operation, the relief will, regardless of the outcome of the
application for leave to appeal, be forfeited
by lncubeta because the
short duration of the restraint will expire before exhaustion of the
appeal processes.
25.2
The only value in the relief is
to stop the breach and protect legitimate interests during the
precise period of the next 4.
5
months. Unrebutted evidence in the
affidavits alleges a breach is taking place at this very time.
25.3
Damages are not an appropriate
alternative remedy precisely because the very relief obtained is
posited on the absence of such a
remedy being available. This places
a
restraint
interdict in
a
different
position to other forms of relief, such as money claims, where the
aspect of irreparable harm is
a
factor extraneous to the substantive
relief procured.
25.4
Ellis will, on the probabilities,
be without work for 4.
5
months
and without pay. This will be financially detrimental.
25.5
Significantly, no allegation is
made that Ellis or his family will endure true hardship during this
short period.
25.6
If the appeal is won, EIiis's
loss of earnings can be sued for and the quantum is feasible to
compute, including the loss of interest
or lost opportunity cost of
being out of funds and any such interest expended on borrowing for
living expenses, if necessary.
25.7
Moreover, Security under
Rule 48
(12) is available.
[26]
I have made no reference to the 'merits' of the case which resulted
in the interdict. In my view
they are not pertinent to this kind of
enquiry. The considerations that are valuable pre-suppose
a
bona fide
application for leave to appeal or an actual appeal. No second
guessing about the judgment per se comes into reckoning.
[27]
Do these circumstances give rise to 'exceptionality' as contemplated?
In my view the predicament
of being left with no relief, regardless
of the outcome of an appeal, constitutes exceptional circumstances
which warrant a consideration
of putting the order into operation .
The forfeiture of substantive relief because of procedural delays,
even if not protracted
in bad faith by a litigant, ought to be
sufficient to cross the threshold of 'exceptional circumstances"
[16]
I
n
the present matter the Applicant, although insisting on claiming for
specific performance of the agreement, and might not be able
to do
so, will still be able to claim for substantive relief at a later
stage in that the Applicant can claim for damages. Counsel
for the
Applicant argued that it is the Applicant's right to claim for
specific performance and if this order is not granted his
right to
claim for specific performance will be ousted. In reply Counsel for
the Respondent argued that to claim specific performance
is not an
absolute right, it is an election that a party can make to claim for
specific performance, alternatively damages. In
my view, the fact
that the Applicant specifically elects to claim for specific
performance which he will probably not be able to
do at a later stage
if this order is granted, does not leave the Applicant without any
remedy or alternative relief and consequently
does this not
constitute in my view an exceptional circumstance as required by
Section 18
of the Act.
[17]
Although it is appropriate to dismiss
the application on the basis that one of the three jurisdictional
facts have not been fulfilled,
I still deem it important to explore
whether or not the Applicant has satisfied the other two
requirements. Against that background,
I proceed to assess the other
two, beginning with the existence of irreparable harm to the
Applicant. It is apparent that one of
the most objectionable matters
to the Applicant is the fact that the Applicant will not be able to
claim specific performance of
the agreement and that the entire legal
process that was lodged will be moot as the Respondents would have
completed most of the
items in the project on the waybill. The First
Respondent contends that the tender project with the municipality is
for the supply
of clean running water to the community, the
Respondents have already completed approximately two thirds of the
project and if
the order is granted as prayed for by the Applicant
the Respondents will suffer irreparable harm in that if the order is
implemented
and the appeal later succeeds before the project is
complete, the same exercise will have to be conducted to de-establish
and re-establish
site and the parties will again, have to perform
some sort of reconciliation of the work performed, which will cause a
further
delay. On the same basis if the work on site is however
completed by the Applicant before the appeal is heard, the appeal
will
become moot for the First Respondent as the Applicant would have
conducted the work and would require payment therefor, whilst the
First Respondent will be left with another sub-contractor who should
have performed the work and will have effectively have a double
claim
against the First Respondent.
[18] The
First Respondent further argued that if the project is completed by
the time the appeal is heard
and the Applicant is successful in
opposing the appeal, the Applicant will still be left with its claim
for damages against the
First Respondent and will accordingly not
suffer any irreparable harm. However, the First Respondent will be
left with irreparable
harm in the form of a claim against it by the
other sub contractor who should have performed the work, as well
as it will
either be left in breach of its contract with the Second
Respondent as it would have failed to complete the project timeously
and
without delay, or at the very least it's reputation with the
Second Respondent would have suffered.
[19] The
test is the absence of irreparable harm to the Respondent. In this
instance it is clear that both
the Applicant and Respondent will
suffer harm if the order is granted, in the alternative if the order
is refused. As already stated
here above, where there is the
potentiality of irreparable harm or prejudice to both Applicant and
Respondent, the balance of hardship
or convenience, as the case may
be, should be considered. In considering the balance of hardship the
Applicant will suffer if the
order is refused weighed against the
hardship the Respondents will suffer if the order is granted, I am in
agreement with the First
Respondent's argument that the irreparable
harm to be suffered by the First Respondent is evident, whilst the
harm which could
be suffered by the Applicant is reparable by way of
a potential damages claim if the appeal is not successful.
[20] The
second leg of the test to the provisions of
Section 18
clearly states
proof on a balance of probabilities by the Applicant of-
-
the presence of irreparable harm to the
Applicant/victor, who wants to put into operation and execute the
order;
and
-
the absence of irreparable harm to the
Respondent/loser, who seeks leave to appeal. The Applicant must prove
both in the confirmatory
and not in the alternative as it is clearly
stated
"and"
and
not
"or".
Although
it is clear to this court and cannot be denied that the Applicant
will suffer some harm, it is not irreparable harm and
will the
Applicant be able to claim damages which possibly could repair to a
great extent the harm the Applicant might have suffered,
however the
First Respondent will indeed suffer irreparable harm. In weighing up
the harm the Applicant will suffer if the order
is not granted, to
the harm the First Respondent will suffer if the order is granted,
the balance favours the First Respondent
and as a result the
Applicant has failed to proof on a balance of probabilities the
second leg of the test. In the result, the
application stands to be
dismissed on this requirement as well.
[21]
There is no reason why the costs should
not follow the event and in this matter be paid by the Applicant.
Both parties continue
to make it fashionable to seek punitive costs
in the event of the other failing. I still hold the view that, like
in the other
matters heard by this Court, no basis by either party
exists for the granting of costs on a punitive scale. Accordingly,
costs
shall be assessed as on the scale between party and party.
[22]
I therefore make the following order:-
1.
The Applicant's non-compliance with the
rules of this Honourable Court relating to notice and service and
time limits is condoned
and that the matter is heard as urgent in
terms of
Rule 6(12)(a)
;
1
.53cm; text-indent: -1.53cm; line-height: 150%">
2.
The Application is dismissed with costs.
3.
The Applicant is ordered to pay the
costs of the application on a party and party scale.
M.
NAUDE
ACTING
JUDGE OF
THE
HIGH COURT
APPEARANCES:
HEARD
ON:
28 OCTOBER 2020
JUDGMENT
DELIVERED ON: 30 OCTOBER 2020
For
the Applicants:
Adv. Diamond
Instructed
by:
Chayya Attorneys
29 Fagan Street, Ivy Park
Polokwane
For
the Respondent:
Adv. Van Gass
Instructed
by:
Van der Merwe & Associates
C/o
Nelis
Britz Attorneys
lsmini Office Park
8 Limassol Street
Polokwane