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[2019] ZAFSHC 63
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Rudnat Projects CC v Nketoana Local Municipality and Others (2870/2013) [2019] ZAFSHC 63 (23 May 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case number:
2870/2013
In
the matter between:
RUDNAT
PROJECTS CC
Plaintiff
and
NKETOANA
LOCAL MUNICPALITY
1
st
Defendant
PHUMELELA
LOCAL MUNICPALITY
2
nd
Defendant
SETSOTO
LOCAL MUNICPALITY
3
rd
Defendant
DIHLABENG
LOCAL MUNICPALITY
4
th
Defendant
JUDGMENT BY:
MHLAMBI, J
HEARD
ON:
07 MAY 2019
DELIVERED
ON:
23
MAY 2019
MHLAMBI,
J
[1]
This matter served before me to determine the third defendant’s
special pleas, which
were raised against the plaintiff’s claim
in the amount of R 5 287 036.43 based on agreements to
perform certain
professional services for the Bulk Water Supply
Scheme on behalf of the four defendants; who are all municipalities
established
in terms of section 12 of the Municipal Structures Act
117 of 1998.
[2]
Before the inception of the hearing, the third defendant presented
written heads of argument
in respect of its special pleas. During
argument, Mr Ponoane, on behalf of the third defendant, handed in a
document styled the
notice for application for leave to reinstate a
special plea in terms section
3 Act 40
of 2002, in terms which the
third defendant made known his intention to apply for leave for the
reinstatement of its special plea
in terms of section 3 of Act 40 of
2002. The plaintiff did not file heads of argument.
[3]
The three special pleas are summarised as follows:
3.1
The plaintiff failed to show that the second defendant had authority
to enter into a contract
on behalf of the third defendant in line
with the provisions of section 11 (2) of the Municipal Systems Act,
32 of 2000. The plaintiff
failed to show that there was an agreement
between the two defendants in this regard.
3.2
The plaintiff failed to join the Department of Water and Sanitation
which seemed to have a direct
and substantial interest as it would
appear from the particulars of claim that it was a party to the
alleged contract;
3.3
The plaintiff failed to give the third defendant a notice in terms of
section 3 of Act 40 of 2000
before instituting legal proceedings.
[4]
As brief background, it would appear that, by way of a letter dated
18 March 2009, the municipal
manager of second defendant appointed
the plaintiff to develop a water services feasibility study and the
consolidation of the
feasibility studies of the four municipalities
represented by the four defendants. The said instruction was accepted
by the plaintiff
in writing on 27 March 2009.
[5]
On or about 13 November 2010, the second defendant instructed the
plaintiff to render professional
services for the Bulk Water Supply
Scheme based on the implementation readiness report submitted. The
plaintiff duly performed
the first three phases of the total works
that were to be carried out. The preliminary design for the project
was provided to the
first defendant on 19 October 2011. On 13 March
2013, the plaintiff rendered an invoice to the first defendant for
the payment
of R 5 287 036.43. The first, second, third and
fourth defendants failed to effect payment as claimed.
[6]
Mr Ponoane argued in respect of the first special plea that the
plaintiff failed to comply
with the provisions of Uniform Rule 18 (4)
and (6) and that neither a contract was annexed to the particulars of
claim nor was
such a contract alleged therein. The third defendant
was therefore not “implicated”. To bolster his argument
for the
plaintiff’s non-compliance with the provisions of
section 11 (2) of the Municipal Structures Act, 32 of 2000 he
referred
me to paragraph 16 of
Vhembe
District Municipality vs. Stewards and Lloyds Trading (Booysens)
(Pty) Limited and another
[1]
which reads as follows:
“
As
correctly observed by Rall AJ in Thabani Zulu
[2]
,
the evidence in damages cases is more likely to depend on the memory
of people than on documents, and it is accordingly desirable
that the
defendant be given timeous notice of the proceedings in order for it
to be able to investigate the contemplated claim,
and to secure the
necessary evidence. By contrast as Lever AJ put it in Nicor
Consulting (para 26) ‘a claim for payment in
terms of a
contract is more likely to rely on documentary evidence, such as
contracts, delivery notes and correspondence, as well
as possible
legal issues, such as whether or not the relevant functionary had the
necessary authority to enter into the contract
or not
[3]
’.
I accordingly hold, as the high court did, that as the first
respondent’s claim is not a damages claim the Act does
not
apply to it. It was therefore unnecessary for the first respondent to
have complied with s 3 of the Act
.”
As will be shown below, this reference does not assist the third
respondent’s argument in any manner whatsoever.
On the
contrary, it annihilates it.
[7]
The third defendant’s argument on non-joinder was based on the
established principles
relating to joinder as set out in
Amalgamated
Engineering Union vs. Minister of Labour
[4]
.
The argument on the third special plea is couched as follows in the
heads of argument:
“
4.1 The third
defendant erroneously withdrew this special plea upon the engagements
made and between the counsel for the third defendant
and counsel for
the plaintiff allegedly on the basis of the case law of
Thabani
Zulu and Co. (Pty) Ltd vs Minister of Water Affairs
2012(4) SA 91(KZD, is applicable because the “claim is based in
contract”. The Third Defendant is persuading the honourable
court to reinstate this special plea in line with other special pleas
raised by the Third Defendant.
4.2
The Third Defendant persuade this honourable court that it was a
mistake in law perhaps due to error of judgment
as the facts before
Court in particular the Plaintiff’s particulars of claim read
with a plea of defense of the Second Defendant
and as more fully
elucidated by the Third Defendant special pleas, it is apparent that
there is no existence of the contract be
it written and/or partly
oral as alleged by the plaintiff ever concluded. For this reason the
provisions of section 3 of Act 40
of 2000 is applicable and as such
the plaintiff ought to have given a notice to the Third Defendant
before instituting these legal
proceedings against the Third
Defendant”.
I was requested to
reinstate this special plea.
[8]
Mr Grobler argued that in terms of Uniform Rule of Court 33 (4), no
evidence was required
in the argument of the special pleas and that
reliance on section 11 (2) of the Municipal Systems Act was bad in
law as the perusal
of that section would reveal that an
administrative action was not envisaged in that section as reference
was made to the exercise
of an executive authority. On the issue of
non-joinder, he based his argument on the
City
of Cape Town vs. Khaya Projects (Pty) Ltd and Others
[5]
and
Tlouamma
and others vs. Mbethe, Speaker of the National Assembly of the
Parliament of the Republic of South Africa and another
[6]
and submitted that the
test whether there has been non-joinder is whether a party has a
direct and substantial interest in the subject
matter of the
litigation, which may be prejudicially affected by the judgment or
order. The Department of Water Affairs was therefore
not affected by
the action instituted.
[9]
He submitted further, in respect of the third special plea, that the
defendant had abandoned
and conceded that the special plea was not
applicable to the plaintiff’s claim
[7]
.
Even though the third defendant had a change of heart in this regard,
the parties were bound to the agreements they made. He submitted
that
the third defendant had misread the definition of “debt”
in the definition section of Act 40 of 2002. The special
pleas should
therefore be struck out or dismissed with costs. Should the court
find that the National Department of Water Affairs
should have been
joined, the court could make such an order.
[10]
Section 11 (2) of the Municipal Systems Act 32 of 2000 provides that
the municipality may exercise
executive and legislative authority
within its boundaries only, but may, by written agreement with
another municipality and subject
to Chapter 5 of the Municipal
Structures Act and other National legislation, exercise executive
authority in the area of that other
municipality. A special plea is a
plea that raises some special defence that does not flow from
allegations in the claim and destroys
or postpones the operation of
the cause of action. It embodies a substantive, self-contained
defence outside the allegations made
in respect of the plaintiff’s
cause of action
[8]
. I agree with
plaintiff’s counsel that the objection raised by way of
reliance on the particular provision of the Municipal
Systems Act,
does not render such defence as substantive and self-contained to
such an extent that it may destroy the plaintiff’s
claim
without further ado. On its own, it is not dispositive and
determinative of the entire case.
[11]
The objection of a non-joinder may be raised where the point is taken
that a party who should be before
the court, has not been joined or
given judicial notice of the proceedings. The substantial test is
whether the party that is alleged
to be a necessary party for
purposes of joinder, has a legal interest in the subject matter of
the litigation, which may be affected
prejudicially by the judgment
of the court in the proceedings concerned
[9]
.
In
Judicial
Service Commisson and another vs. Cape Bar Council and
Another
[10]
,
Brand JA dealt with the question of non-joinder in the following
terms:
“
It
has now become settled law that the joinder of a party is only
required as a matter of necessity — as opposed to a
matter
of convenience — if that party has a direct and substantial
interest which may be affected prejudicially by the judgment
of the
court in the proceedings concerned (see eg Bowring NO v
Vrededorp Properties CC 2007(5) SA 391(SCA) para 21). The mere
fact
that a party may have an interest in the outcome of the
litigation does not warrant a non-joinder plea. The right of
a party
to validly raise the objection that other parties should have been
joined to the proceedings, has thus been held to be
a limited one . .
. .”
[12]
In the given circumstances, it is difficult to see which direct and
substantial interest of the Department
of Water Affairs would be
prejudicially affected were the court to grant the relief sought, as
the plaintiff has not sought relief
from the department.
[13]
In
Nicor
IT Consulting (Pty) Ltd vs. North West Housing Corporation
[11]
the court struck out the
defendants’ special plea based on a failure to give notice in
terms of section 3 (1) of Act 40 of
2002. The court was agreeable
with the argument that, for the payment of the balance due in terms
of a contract where the plaintiff
alleged that it had fulfilled its
contractual obligations, was not a claim for damages. As such it fell
outside the definition
of debt contained in the Act and,
consequently, the provisions of the Act were not applicable to the
plaintiff’s claim. It
followed that the defendants’
special plea did not disclose a defence. The court found that
paragraph (b) of the definition
of “debt” in the Act
[12]
qualified paragraph (a)
of such definition, and consequently, a “debt” for the
purposes of the Act was confined to a
claim for damages, howsoever
such claim arose
[13]
.
[14]
The court in
Thabani
Zulu and Company (Pty) Ltd vs. Minister of Water Affairs and
Another
[14]
agreed with this decision
and found that the ordinary meaning of the definition of debt is the
correct one. It found furthermore
that the applicant’s claims
were not damages claims, the Act did not apply to them and it was
unnecessary for the applicant
to apply for condonation in terms of
section 3 of the Act
[15]
.
[15]
In the light of the above, I am persuaded that the third defendant is
not entitled to the relief sought
and that the special pleas raised
should fail.
[16]
In the result, the costs should follow the event.
[17]
I accordingly make the following order:
Order
(a)
The
special pleas are struck out;
(b)
The
third defendant must pay the costs which shall include the costs of 7
May 2019.
MHLAMBI, J
Counsel
for the defendant: Adv. S Grobler
Instructed
by:
Peyper Attorneys
Dynarc House
200
Nelson Mandela Drive
BLOEMFONTEIN
Counsel
for Respondents: Mr Ponoane
Instructed
by:
Ponoane Attorneys
15
West Burger Street
Standard Bank
Building
5
th
Floor Penthouse
Bloemfontein
[1]
397/13
[2014] ZASCA 193
;
[2014] 3 All SA 675
(SCA) (26 June 2014)
[2]
Para 17
[3]
Lever AJ in Nicor Consulting para 26
.
[4]
1946 (3) SA 637 (A).
[5]
(2016/12)
[2014] ZAWCHC 167
;
2015 (1) SA 421
(WCC);
[2015] 1 ALL SA
81
(WCC) (11 November 2014)
[6]
2016 (1) SA 534 (WCC)
[7]
3
rd
Defendant’s reply to the Plaintiffs request for
Trial Particulars: Page 208 of the indexed papers dated 11 May 2015
[8]
Amler’s Precedents of Pleading page 5, 9
th
Ed.
[9]
Bowing NO v Vrededorp Property CC
2007 (5) SA 391
(SCA) para
21; Transvaal Agricultural Union vs. Minister of Agriculture and
Land Affairs
2005 (4) SA 212
(SCA) para 64-66
[10]
(818/2011)[2012] ZASCA 115;2012(11)BCLR 1239(SCA); 2013(1) SA
170(SCA);
[2013] 1 All SA 40(SCA)(24
September 2012)
[11]
2010 (3) SA 90 (NWM)
[12]
'debt'
means
any debt arising from any cause of action-
(a)
which
arises from delictual, contractual or any other liability, including
a cause of action which relates to
or arises from any-
(i) act
performed under or in terms of any law; or
(ii) omission
to do anything which should have been done under or in terms of any
law; and
(b)
for
which an organ of state is liable for payment of damages,
whether
such debt became due before or after the fixed date;
[13]
Nicor, supra para 30
[14]
2012
(4) SA 91
(KZD) para 33
[15]
Thabani, supra, para 34