About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2019
>>
[2019] ZAGPPHC 28
|
|
Special Investigative Unit v Odendaal Erasmus & Thulare Incorparated and Others (33867/17) [2019] ZAGPPHC 28 (26 February 2019)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 33867/17
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
SPECIAL
INVESTIGATIVE UNIT
PLAINTIFF/APPLICANT
And
ODENDAAL
ERASMUS & THULARE
INCORPARATED
FIRST DEFENDANT/FIRST RESPONDENT
ANDRE
ODENDAAL
SECOND DEFENDANT/ SECOND RESPONDENT
VAUGHN
SUMMERTON
THIRD DEFENDANT/ THIRD RESPONDENT
MEYERTON
OPSPOORDERS
FOURTH DEFENDANT/ FOURTH RESPONDENT
JUDGMENT
COLLIS
J:
1.
This is an opposed interlocutory
application, seeking amendment in terms of Rule 28(4).
BACKGROUND
2.
As per the particulars of claim, the
plaintiff is cited as the Special Investigating Unit established in
terms of the Special Investigating
Units and Special Tribunals Act 74
of 1996
(" the SIU Act'),
and
with powers to investigate serious malpractices or maladministration
within state institutions in terms of the SIU Act, and
to conduct and
institute civil proceedings in relation to such malpractices or
maladministration in any court of law in its own
name or on behalf of
state institutions.
3.
These powers and competency it derives
from the SIU Act and the relevant proclamation authorising the
investigation whose scope
it defines.
4.
For purposes of these proceedings the
plaintiff/applicant was under section 2(1) of the SIU Act and in
terms of Proclamation R33
of 2011 published in Government Gazette
Number 34305 of 20 May 2011, requested to investigate the matters
relating to any alleged
inter alia
serious maladministration in
connection with the affairs of the Midvaal Local Municipality
(
"the MLM or the Municipality"),
of
improper or unlawful conduct by
councillors, officials, employees and/or agents of
the
Municipality unlawful appropriation or expenditure of public money or
property, unlawful irregular or unapproved acquisitive
act,
transaction, measure or practice having a bearing upon state
property, unlawful and improper conduct by any person which has
caused, may cause serious harm to the interest of the public, or any
category thereof.
5.
The Plaintiff, as alleged in the
Particulars of Claim, was by such Proclamation directed to thereafter
investigate, exercise or
perform all the functions and powers
assigned to or conferred upon the Special Investigating Unit by the
SIU Act including the
recovery of any losses suffered by the
municipality in relation to the matters referred to in the SIU Act.
The referred maladministration,
malpractices, unlawful and improper
conduct it was required to investigate covered the period between and
included those which
occurred prior to 1 January 2002, and the date
of proclamation being published or after the date of
publication
of the proclamation.
6.
As per the Particulars of Claim, it is
further alleged that after conclusion of these investigation and the
delivery of a report
in which certain findings were made of some
malpractices discovered by its investigations, the Applicant issued
Summons against
the Defendants in which it claimed for the following
relief:
firstly
that
a declaratory order be made against the Defendants that their
disposal of certain fix properties on behalf of the MLM while
they
were acting as its agents is unlawful. Further, that all such profits
made as a results or pursuant to the unlawful conduct
be paid to the
State.
Secondly,
that
the Defendants had breached their fiduciary duties to the MLM and
that such profits
made in breach of their fiduciary duties be disgorged
from them and paid over to the State.
LEGAL
PRINCIPLES APPLICABLE TO AMENDMENTS
7.
Rule 28(1) provides as follows:
(1)
"Any party desiring to amend any
pleading or documents other than a sworn statement filed in
connection with any proceedings
shall notify all other parties of his
intention to amend and shall furnish particulars of the amendment.
(2)
(3)
An objection to a proposed amendment
shall clearly and concisely state the grounds upon which the
objection is founded.
(4)
If an objection which complies with
subrule (3) is delivered within the period referred to in subrule (2)
the party wishing to amend
may within 10 days lodge an application
for leave to amend.
8.
A
court hearing an application for an amendment has a discretion
whether or not to grant it and that discretion that must be exercised
judiciary.
[1]
9.
The
aim of pleadings is to define the issues and disputes between the
parties in which all that is relevant for purpose of
the
proceedings, should be included in such pleadings. The primary object
of allowing an amended is to determine the
real issues
between them and that there is a proper ventilation of the dispute
between the parties.
[2]
10.0ur
courts would usually permit amendments. In Moolman v Estate Moolman
1927 CPD 27
at 29 Watermeyer J reflected the widely held view of our
courts when he remarked that the practical rule adopted seems to be
that
amendments will always be allowed unless the application to
amend is ma/a
fide
or unless such amendment would cause an in
justice 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 pleading which it
is sought
to amend was filed.
11.
Amendments however will not be granted
in the following circumstances:
11.1
where
amendments would render pleadings excipiable.
[3]
11.2
amendments
involving the withdrawal of admissions.
[4]
11.3
amendments
involving the introduction of new causes of action and new claims.
[5]
12.
In
the present action the Combined Summons was issued on 17 May 2017 and
served on the Defendants on 21 June 2017.
[6]
13.
Pursuant
to the service of the summons, the Defendants entered an appearance
to Defend and on 20 July 2017 the Defendants served
a Notice to
Remove the Cause of Complaint in terms of Rule 23(1) on the
Plaintiff. As there was no removal of the cause of complaint
the
Defendants thereafter proceeded to serve the Plaintiff with an
exception on 15 August 2017.
[7]
14.
In
response to being served with an exception the Plaintiff then
proceeded to serve the Defendants with a Notice to amend its
Particulars
of Claim on 25 August 2017.
[8]
15.
On
6 September 2017 the Defendants then served the Plaintiff with their
Notice of Objection
[9]
16.
In terms of the Notice of Objection
three parts constituting a general nature are taken:
16.1
The Notice of Amendment is not
accompanied by an offer of costs occasioned by the proposed amendment
or by the Defendants exception
dated 14 August 2017;
16.2
The Notice of Amendment does not address
or resolve the Defendant's
Exception
dated 14 August 2017. Its failure to do so will therefore still leave
the Particulars of Claim excipiable on the grounds
set out in that
exception which is to be read as if incorporated herein;
16.3
The Notice of Amendment seeks to attach
255 documents without pleading the contents, relevance or purpose
thereof. This will render
the particulars of claim prejudicial to the
Defendants and excipiable for being vague and embarrassing.
17.
In more specific terms the objection
relates to:
17.1
The Plaintiff attempts to introduce the
terms of a written contract without pleadings the terms of such
contract;
17.2
By the addition of the following
sentence to paragraph 10 to the Particulars of Claim i.e.
"The
prepared list by the MLM of affected properties is annexed hereto
marked "SIU
7". As the
proceeding portions of paragraph 10 of the Particulars of Claim do
not refer to "affected properties"
or to any property at
all and contains no explanation or allegation as to what is meant by
the words "affected properties"
the said proposed amendment
to paragraph 10 will leave paragraph 10 excipiable for being vague
and embarrassing.
17.3
The proposed amendment to paragraph 4,
by inserting a heading and date would result in the proposed
amendment seeking to introduce
a cause of action that had already
prescribed.
18.
As mentioned in paragraph 16
supra,
one of the grounds listed in the
notice of objection relates to the proposed amendment's failure to
address or resolve the Defendants
exception dated 14 August 2017. Its
failure to do so, the Defendants alleges will therefore still leave
the particulars of claim
excipiable.
19.
It as a result necessitates
consideration to be given to the first exception raised by the
Defendants which relates to the Plaintiff's
purported lack of legal
standing.
LACK
OF LEGAL STANDING
20.
As previously mentioned, the citation of
the Plaintiff is set out in paragraphs 1-
4
supra.
In
the present instance the Plaintiff purports to institute a claim to
recoup losses suffered by the Midvaal Local Municipality
and alleges
that it derives its
locus standi
from
section 4(1)(c) of Act 74 of 1996.
21.
The relevant section is quoted hereunder
for ease of reference:
"(c)
to institute and conduct civil proceedings in a special tribunal or
any Court of Law for-
(i)
any relief to which the State institution concerned is entitled
including the recovery of any damages or losses and the prevention
of
potential damages or losses which may be suffered by a State
institution;........"
22.
The relevant proclamation determines the
civil
locus standi
of
the Plaintiff and in terms of the proclamation empowers the Plaintiff
to exercise or perform all the functions and powers assigned
to or
conferred upon the SIU by the Act, including the recovery of any
losses suffered by the Municipality in relation to the said
matters
in the Schedule.
23.
In order to properly assess the powers
and functions conferred upon the SIU, it is important to have regard
to the Schedule. The
Schedule in part reads as follows:
"(I)
Maladministration of the affairs of the Municipality by its
councillors, officials, employees and /or agents in respect
of the
following:
(a)
The improper negligent or erroneous
disposal of the Municipality's operating assets as being redundant
assets;
(b)
The failure to properly implement the
Municipality's indigent policy;
(c)
The erroneous issuing of town planning
certificates.
(d)
The failure to obtain money belonging to
the Municipality from the trust account of the Municipality's
attorneys and the failure
to utilize such money for Municipal
purposes;
(e)
The failure to properly
control the debt owned by the municipality's
debtors;
(f)
The failure to record the Municipality's
assets in its asset registers; and
(g)
The
appointment of staff of the Municipality at incorrect of post levels.
(2)
The procurement of legal services by or on behalf of the Municipality
and
payments
made .m respect th ereof ......... ...... ... ...
................................»
[10]
24.
The
question of
locus
standi
concerns
the sufficiency and directness of a person's interest in the
litigation in order for that person to be accepted as a litigating
party.
[11]
25.
The
general rule is that for a party instituting proceedings to allege
and prove its
locus
standi
and
the
onus
of
establishing that issue rests on that party. It must accordingly
appear
ex
facie
the
founding pleadings that the parties thereto have the necessary legal
standing or
locus
standi in iudicio.
[12]
26.
The
claims formulated as per the Combined Summons reveals that they are
based on the purchasing and resale of fixed property, most
of which
did not belong to the municipality or the MLM. The purchase and
resale was done by the defendants who at the time were
acting as
agents of MLM in the disposal of its assets. Such disposals, so the
Plaintiff contends is governed by law and required
to have been
conducted in a manner where none of the parties were conflicted as in
the instant. The relevant Proclamation is clear
that it empowers the
plaintiff to investigate specified acts "which are relevant,
incidental or ancillary to or connected
with the matters mentioned in
the Schedule or which involve the same persons, entities or contracts
investigated under authority
of this Proclamation."
[13]
The matters therefore, falls within
the ambit of the plaintiff's mandate.
27.
In
reply the defendants/ respondents sets out in their answering
affidavit that the failure by the defendants as alleged, to fulfil
its mandate as agents of the municipality is not one of the instances
described in the schedule and it cannot therefore be read
into the
schedule. Furthermore, that the claim which the deponent attempts to
formulate in the founding affidavit, should have
been
formulated in the particulars of claim
[14]
Since the claim falls outside the terms of reference contained
in the schedule, the Applicant does not have
locus
standi
to
institute sets out in the particulars of claim.
28.
Mr. Ngutshana, appearing
on behalf of the plaintiff had argued
that
the investigation conducted by the plaintiff in
relation to the terms of reference referred to in the Proclamation
and the
schedule attached to it, did not merely restrict the
plaintiff to only investigate matters which took place
b
etween
1 January 2002 or after the date of publication of the Proclamation,
but also
permitted the plaintiff to
investigate matters which took place prior to 1 January 2002, which
is relevant, incidental or ancillary
to. or connected with the
matters mentioned in the schedule, or which involve the same persons.
entities or contracts investigated.
under authority of the
Proclamation and to exercise or perform all the functions and powers
assigned to or conferred upon the plaintiff
including the recovery of
any losses suffered by the municipality in relation to the matters
referred to it in the schedule.
29.
Furthermore, the disposal of all state
properties, in particular fixed properties is governed by law, and at
a municipal level by
the Municipal Management Act 56 of 2003. Such
disposals are also required to be conducted in a manner which is
transparent, free
of corruption, which is costs effective as also
contemplated in section 217 of the Constitution. As this was not done
in accordance
to the relevant laws governing such disposals, the
plaintiff has suffered damages due to a breach of mandate on the part
of the
defendants.
30.
Now having regard to the citation of the
plaintiff as per the Combined Summons it places exclusively reliance
on the provisions
of section 4(1) (c) of Act 74 of 1996, wherein its
powers is derived from. In its citation no reference is made of its
locus standi
also
being derived from the Municipal Finance Management Act 56 of 2003 or
the Constitution and any reliance to be placed of these
legislation
ought to have been pleaded as part of the citation of the plaintiff.
If one further has regard to the pleaded case,
any allege damages
which the plaintiff contends was suffered, was clearly suffered by
the MLM. Therefore the Combined Summons as
it stands ought to have
cited the MLM at the very least as a co-plaintiff.
31.
The proposed Notice to Amend clearly
does not address the attack on the
locus
standi in iudicio
as formulated by
the defendants in its exception. Therefore, I cannot, but conclude
that the plaintiff lacks the necessary locus
standi to institute the
claims as set out in the Particulars of Claim. In the absence of the
plaintiff having locus standi, allowing
the amendment would cause an
injustice to the Defendants which, it must follow be prejudicial to
the Defendants.
32.
The plaintiff's lack of
locus
standi,
in my view is dispositive of
the application and any adjudication on the remainder of the grounds
of objection would as a result
not be necessary in the circumstances.
ORDER
33.
Consequently, the application is
dismissed with costs, including the cost consequent on the employment
of counsel.
COLLIS
J
JUDGE
OF THE HIGH COURT OF
SOUTH
AFRICA
Appearances
:
For
the Applicant:
V.P.NGUTSHANA
Attorney
of the Applicant:
STATE ATTORNEY: PRETORIA
For
the Respondents:
S.D.MARITZ
Attorney
for the Respondents: ODENDAAL & SUMMERTON ATTORNEYS
Date
of Judgment:
26 February 2019
[1]
Robinson v Randfontein Estate Gold Mining Company Ltd 1921AD
168 at 243; GMF Kontrakteurs (Edms) Bpk
v Pretoria
City Council
1978 (2) SA 219T
@222 B - D
[2]
Blauuwberg Meat Wholesaler s CC v Anglo Dutch M
eats (Export s) Lt d [
2004) 1 All SA 1
29 (SCA) at 133h- i
[3]
Dean of Law Faculty; University of North-West and Others v
Masisi
2014 (6) SA 61
(SCA)@ [10)
[4]
President -Versekeningsmaatskappy Bpk v Moodley
1964 (4) SA 109
(T)
@ 110H-111A
[5]
Sprinston v Commonwealth Trading Co Ltd. Mail v Du Plessis
1997 (1)
SA 251
(W) at 253 - 254.
[6]
Bundle pages 4-31
[7]
Defendants Exception: Bundle pages 61- 73.
[8]
Bundle pages 74 - 77
[9]
Defendant's Notice of Objection Bundle pages 3.58- 3.63
[10]
Proclamation No 33 of 2011. Bundle pages 58 -59
[11]
Jacobs v Waks
[1991] ZASCA 152
;
1992 (1) SA 521
(A) p 534D
[12]
Kommissaris van Binnelandse lnkomste v Van der Heever
[1999)
3 ALL SA 115
(A), 1999 (3) SA 1051(SCA) para 10
[13]
Founding Affidavit para 18.1-18.4
[14]
Answering Affidavit para 37.3 page 469