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[2019] ZAFSHC 267
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Molala v Metsimaholo Local Municipality and Others (5464/2018) [2019] ZAFSHC 267 (20 August 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 5464/2018
In
the matter between:
STEPHEN
MZILOZI
MOLALA
Applicant
and
METSIMAHOLO
LOCAL
MUNICIPALITY
1
st
Respondent
LINDIWE
TSHONGWE
N.O.
2
nd
Respondent
THABO
MABASA
N.O.
3
rd
Respondent
MATOME
MASHAO
N.O.
4
th
Respondent
HEARD
ON:
07 MARCH 2019
CORAM:
PE MOLITSOANE, J
JUDGMENT
BY:
PE MOLITSOANE, J
DELIVERED
ON:
20 AUGUST 2019
[1]
The applicant seeks an order that the first respondent be interdicted
and restrained from continuing with the disciplinary proceedings
instituted against him on the 3
rd
September 2018 until the
first respondent complies with the Local Government: Municipal
Regulations on Financial Misconduct Procedure
and Criminal
Proceedings (the 2014 Regulations). The applicant further seeks an
order that the disciplinary proceedings against
him be conducted
within the prescripts of the 2014 Regulations.
[2]
The application is opposed by the First respondent only. No
substantial relief is sought against the 2
nd
, 3rd and 4
th
respondents as presumably all these respondents were cited because of
the interest they may have in the relief sought and the outcome
of
this application. During the course of the preparation of this
judgment I caused parties to file further heads of argument which
necessitated that the said heads of argument be filed only on the
24
th
May 2019,
[3]
During the hearing of this matter the First respondent raised three
points
in limine
. I dismissed all three points raised without
giving reasons and I undertook to furnish my reasons in my main
judgment.
[4]
The first preliminary issue raised was one of
lis alibi pendens
.
Adv. Baloyi appearing for the first respondent submitted that the
applicant had issued a substantially same application in the
Labour
Court and that application was still pending and had not been
adjudicated upon. He further submitted that the applicant
had to make
an election whether he wanted to proceed with the matter before this
court or the one in the Labour Court. It was submitted
that the
applicant could not proceed with two matters raising the same issues
in two different forums.
[5]
On the other hand Adv. Louw appearing for the First respondent
submitted that the issues raised before the Labour Court and
this
court were different. He denied that the applicant raised similar
issues in two different forums.
[6]
The First respondent being the one raising the defence of
lis
alibi
pendens
bears the onus of proving its requisites
[1]
.
A party raising this defence
must
allege and prove
the following:
1.
‘
Pending litigation,
2.
Between the same parties or their privies,
3.
Based on the same cause of action,
4.
In
respect of the same subject matter
[2]
.’
[7]
Except the
ipse dixit
of Counsel for the First respondent,
which is denied by Counsel for the applicant that the same cause of
action was pending before
the Labour Court, no evidence was placed
before this court supporting the allegations. Counsel for the first
respondent could not
enlighten this court as to when the application
in the Labour Court was initiated. He could also not inform this
court what the
case number was in that court. He did not also hand
any processes issued in that Court. Not only should the First
defendant allege
the requisites of the defence of
lis pendens
but it must also prove it. In this regard the First defendant failed.
It cannot be expected of a court to accept allegations in
the absence
of their proof or admission by a party against whom such allegations
are made. For these reasons I was not satisfied
that the first
respondent had discharged its onus and I accordingly dismissed this
point
in limine
.
[8]
The second preliminary point raised by the First respondent was that
this application was finally adjudicated upon and as a
result, this
application before me stood to be dismissed. The first respondent
thus raised the defence of
res iudicatae
.
[9]
Firstly, it will be convenient to decide the question of the finality
of the order of the urgent court. This matter originally
appeared
before this court, differently constituted, on the 2
nd
November 2018 as an urgent application with a
rule nisi
returnable on the 6
th
December 2018
.
On the 5
th
November 2018 the judge seized with the
urgent application delivered judgment and made the following order:
“
The application
is dismissed on the basis of lack of urgency and struck of the roll.
The applicant is ordered to pay the costs for
the application.”
[10]
The case was subsequently re-enrolled by the applicant on the same
documents. Adv. Baloyi submitted that this application was
dismissed
as opposed to being struck off the roll for lack of urgency.
According to him this matter having being dismissed, the
applicant
could not re-enrol it as it had already being adjudicated upon. The
option for the applicant, so he submitted, was to
appeal the order of
the urgent court. Adv. Louw for the applicant contended that
the application was struck off the roll
as opposed to being
dismissed. He urged me to dismiss this defence of
res iudicatae.
[11]
The courts have had occasion to deal with this issue raised by the
first respondent.
In
Commissioner for South African Revenue Services (Pty) Ltd:
Commissioner for South African Revenue Service v Hawker Aviation
Services Partnership & Others
[3]
the court said the following:
“
[9] One of the
grounds on which Patel J dismissed the applications was that at their
inception they had lacked urgency. This was
erroneous. Urgency is
reason that may justify deviation from the times and forms the rules
prescribe. It relates to form, not substance
and is not a
pre-requisite to a claim for substantive relief. Where an application
is brought on the basis of urgency, the rules
of court permit a
court( or a Judge in chambers) to dispense with the forms and service
usually required, and to dispose of it
‘as to it seems meet
(Rule 6(12)(a) ). This in effect permits an urgent applicant, subject
to the Court’s control,
to forge its own rules which must ‘as
far as practicable be in accordance with’ the rules. Where the
applicant lacks
the requisite element or degree of urgency the court
can for that reason decline to exercise its powers under Rule 6(12)
(a). The
matter is the not properly on the court’s roll and it
declines to hear it. The appropriate order is generally to strike the
application from the roll. This enables the applicant to set the
matter down again, on proper notice and compliance.”
[12]
The Labour Appeal Court in
PT
Operational Services (Pty) Ltd v RAWU obo Ngwetsana
[4]
also had occasion to consider the question of dismissal of an
application on the grounds of urgency in circumstances similar
to the
one
in
casu
.
Musi AJA came to this conclusion:
“
Although I
agree that the appropriate order in a matter where urgency has not
been shown should be striking the matter from
the roll, it
seems to me that even where the word ‘dismissed’ is used
it does not necessarily mean that the dismissal
amounts to a final
order. One will have to enquire, where there is doubt, whether the
matter was dismissed on the merits or not.
If it was dismissed on the
merits then the order is not final. A finding that a matter is not
urgent does not mean that there are
no merits in the applicant’s
case. Even if a matter is dismissed for lack of urgency it can and
should be re-enrolled. To
reason otherwise would be to allow form to
triumph over substance.”
[13]
In my view the court faced with the issue of whether the order of the
court dismissing the application amounts to a final order
entitling
the successful party to raise the defence of
res
judicata,
must enquire if the dismissal was on the procedural aspect of urgency
or on the merits. The decision on the issue of urgency does
not
necessarily relate to the merits of the case. Although in motion
proceedings the phrase ‘
absolution
from the instance
’
is not used, Jones, J in
Vena
v Vena
[5]
equates the said phrase to a dismissal for lack of urgency as in both
instances the cases may be re-enrolled.
[14]
I have scrutinised the judgment of the urgent court dismissing the
application for lack of urgency. In that case it is not
the case for
the First respondent that the dismissal of the application was on the
merits. It is clear that the Judge in the urgent
court dealt solely
with the question of urgency, this much is supported by the reasons
given for the order as well as the order
made that ‘
the
application is dismissed on the basis of lack of urgency and struck
of[f] the roll’.
Whether the Honourable judge in the urgent
court chose to dismiss the application or struck it off the roll is
of no consequence
as the decision so made, did not relate to the
merits of the case and the case could still be re-enrolled. To think
otherwise would
be to elevate form over substance and would amount to
going against the tide and caution as alluded in
PT Operational
Services
(
supra
). It is my finding that the order of the
urgent court was not final as the applicant was still free to
initiate these proceedings
de novo
by giving due notice. The
defence of
res judicata,
therefore, does not avail the first
respondent in this regard and I accordingly dismissed this second
point
in limine
.
[15]
The last point
in limine
raised on behalf of the first
respondent was that the Applicant filed a further set of affidavit
without leave of the court. Perusal
of that affidavit reveal that it
amplified the affidavits already filed and even if it is taken into
account, it takes this matter
nowhere and I accordingly also
dismissed this point. At the most such an affidavit only called for
its striking off.
[16]
This application centres on the applicable legislation where it is
alleged that the incumbent had committed financial misconduct
and
disciplinary steps are instituted after the coming into effect of the
2014 Regulations.
[17]
The Applicant contends that in view of the non-compliance with the
2014 Regulations, the disciplinary proceedings against him
are
unlawful. The applicant contends firmly that the applicant should
have been charged in terms of the 2014 Regulations and not
in terms
of the Local Government: Disciplinary Regulations for Senior
Managers,2010( the 2010 Regulations). On the other hand,
it is
contended on behalf of the First Respondent that the Applicant was
correctly charged with the 2010 regulations.
[18]
The crisp issue for determination is whether the applicant should
have been charged with the 2014 Regulations as opposed to
the 2010
Regulations , and if not, whether the failure to charge him as
aforesaid rendered the disciplinary proceedings unlawful
entitling
the Applicant to an interdict.
[19]
The Applicant contends that the disciplinary proceedings
against him were instituted and proceeded with in breach of section
4(1)
of the 2014 Regulations which rendered the proceedings unlawful.
It is further contended that this alleged non-compliance with the
2014 Regulations has a cascading effect in respect of other various
requirements which includes:
1.
The absence or omission of a preliminary
investigation by the disciplinary board to determine the veracity of
allegations;
2.
The absence or omission of a determination
by the disciplinary board to the Council of the Municipality
subsequent to such an investigation;
3.
The absence or omission of a determination
by the disciplinary board to determine whether the allegations
against the Applicant
are frivolous, vexatious, speculative or
unfounded, so that the investigation against him could be terminated.
4.
There were no terms of reference for an
investigation done by an independent investigator;
5.
The ‘independent investigator’
who was appointed by the Council was not appointed in terms of the
supply chain management
prescripts.
[20]
It is necessary to set out a brief background to these proceedings.
On the 8
th
August 2018 the Council of the Municipality
(First Respondent) resolved to institute disciplinary proceedings
against the Applicant.
The applicant was served with the necessary
notice of the disciplinary proceedings which were to commence on the
11
th
September 2018. On the 11
th
September 2018
the proceedings were postponed to the 8
th
October 2018.On
the 9
th
October 2018 the disciplinary proceedings
commenced and a preliminary point was taken on behalf of the
Applicant that the disciplinary
proceedings had not been properly
sanctioned for various reasons as fully set out in paragraph [19]
above. The contention by the
Applicant is that the charges against
him are in the nature of financial misconduct and the proceedings
should thus have been dealt
with in terms of the 2014 Regulations.
This contention was rejected by the Chairperson of the disciplinary
tribunal hence this
matter ultimately found its way to this court.
[21]
It is contended by the First Respondent that this Court has no
jurisdiction to entertain this interdictory relief as only the
Labour
court has exclusive jurisdiction. This contention cannot be correct.
At the heart of this application is the issue of unlawfulness
of the
procedure currently taking place. The application does not seek to
enforce any rights or remedies provided for in the Labour
Relations
Act. The application does not seek to adjudicate a labour dispute or
conduct as envisaged in Chapter VIII of the Labour
Relations Act.
What the Applicant seeks to achieve is to restrain the perpetuation
of the unlawfulness of the procedure currently
under way. The CCMA
has no such jurisdiction contrary to the assertion by the First
Respondent. It is my finding that this court
has jurisdiction to
adjudicate an interdictory relief where unlawfulness is an issue.
[22]
After this application was heard and during the preparation of the
judgment, I caused a request to be sent to the parties to
file
further heads of arguments and deal specifically with the following
issues arising out of Regulation 20 of the 2014 Regulations:
1.
What is the effect, if any, of the 2014
Regulations on the Local Government: Disciplinary Regulations for
Senior Managers specifically
with regard to the proceedings regarding
alleged financial misconduct allegedly committed after the coming
into operation of the
2014 Regulations, in light of the transitional
arrangements;
2.
Would the position remain the same where an
official is charged with both financial misconduct and any other
misconduct not related
to finances?
[23]
It is submitted on behalf of the Applicant that Regulation 20
supports the contention that any allegation of financial misconduct
which arise after the coming into operation of the 2014 Regulation,
namely, 30 May 2014 or which investigation commenced after
the said
date is to be dealt with in terms of the 2014 Regulations.
[24]
On the other hand it is contended on behalf of the respondent that
the 2010 Regulations deal sufficiently with the issue of
misconduct
which includes financial misconduct as contemplated in section 171
and 172 of the 2014 Regulations. It is firmly contended
that
Regulation 20 has no bearing or effect on the 2010 Regulations.
[25]
As a starting point our law recognises the presumption that a statute
does not apply retrospectively, or put differently, a
statute applies
prospectively. This in my view also applies to subordinate
legislation. There are exceptions to this presumption.
One of these
exceptions is the rule that statutes which deal with matters of
procedure are of necessity both retrospective and
prospective. In
Curtis
v Johannesburg Municipality
[6]
the Court said the following:
“
Every law
regulating legal procedure must, in absence of express provision to
the contrary, necessarily govern, so far as applicable
the procedure
in every suite which comes to trial after its promulgation. Its
prospective operation would not be complete if this
were not so, and
it must regulate all such procedure even though the suite may have
been then pending. To the extent to which it
does that, but to no
greater extent, a law dealing with procedure is said to be
retrospective. Whether the expression is an accurate
one is open to
doubt, but it is a convenient way of stating the fact that every
alteration in procedure applies to every case subsequently
tried, no
matter when such case began or when the cause of action arose.”
[26]
Du Plessis
[7]
opines that
legislation that does not interfere with vested rights or create new
duties or impose new obligations can also be subject
to the
presumption against retrospectively. He says further:
“
In the case of
the presumption against retrospectivity an element of legal
certainty, not derived from considerations of fairness,
also come
into the picture. Individuals should know what the law is in order to
be able to confirm their conduct accordingly.”
[27]
It is not in dispute that most of the charges against the Applicant
are in the form of financial misconduct. Save for
Charge 7 in
which the Applicant is charged with the ‘
Failure
to exercise his statutory and fiduciary duties as Accounting Officer,
alternatively putting the Municipality into disrepute’
are all clearly financial misconduct. Although Charge 7 does not
ex
facie
appear to be a financial misconduct further scrutiny of same will
reveal that it is also a financial misconduct. In Annexure to
the
founding affidavit, the following appears in the Agenda of the
Special Council Meeting held on the 11
th
June 2018
[8]
:
“…
Mr
Molala should have foreseen that the ….irregular secondment
would result in prejudice to the interests of the Municipality
and
possible fruitless and wasteful expenditure which could have been
avoided had he advised the then Administrator in respect
of the
alleged irregularity of his secondment.”
[28]
The above clearly indicates that the allegations referred herein are
meant to indicate that the Applicant should have foreseen
that his
alleged irregular secondment would result in prejudice to the
interests of the Municipality; and “
possible fruitless and
wasteful expenditure.”
(my emphasis).
This
clearly indicates that the Municipality wants to charge the Applicant
with financial misconduct also in respect of this charge
which
according to the First Respondent is a fruitless and wasteful
expenditure. I am accordingly of the considered view that all
the
charges herein relate to alleged charges of financial misconduct.
[29]
The 2014 Regulations came into operation on the 30
th
May
2014.The charges against the Applicant were allegedly committed
around the dates as more fully set out herein after:
·
Charge 1: Counts 1.1 to 1.11 and all other
counts not specifically indicated hereinafter: All arose after August
2014;
·
Charge 1: Counts 1.12; 1.13; 1.14; and 8:
the date of the commission of the offence is not indicated;
·
Charge 4: the date of the commission of the
offence is indicated as 2014 but the date and month has not been
indicated;
·
Charge 5: the date of the commission of the
offence is not indicated;
·
Charge 7: the date of the commission of the
offence is not indicated;
[30]
It is so that both the 2010 and 2014 Regulations provide for
investigation of financial misconduct. What, however, is different
is
the procedure in the two pieces of legislation which must be followed
in the investigation for alleged financial misconduct.
Regulation 20
of the 2014 Regulations deal specifically with the transitional
arrangement. Prior to 30 May 2014 disciplinary procedures
against
Senior Managers of municipalities were regulated
exclusively
by the 2010 Regulations. Regulation 20 specifically provides that any
disciplinary process instituted before the commencement of
the 2014
Regulations and not yet completed must be finalised in terms of the
prescripts applicable at the time or may by agreement
in writing be
finalised in terms of these Regulations (2014 Regulations). In my
view Regulation 20 essentially fortifies the presumption
against
retrospective application of statutes.
[31]
It would make no sense that the legislature should specifically
provide that parties may agree in writing to choose to ignore
the
procedure set out in the 2010 regulations in circumstances where the
disciplinary proceedings have commenced and yet, without
an express
provision to that effect allow them freedom of the choice in respect
of whether to apply the 2010 or 2014 Regulations
for financial
misconducts which arose after the coming into operation of the 2014
Regulations. Clearly the transitional arrangements
were intended to
bring clarity to matters already commenced with. It is our common law
principle that the Legislature does not
promulgate and make
meaningless, invalid or purposeless legislation
[9]
.
The 2014 Regulations could not have been promulgated without a
purpose. Clearly as indicated above the 2014 Regulations deal with
the procedure to be followed in dealing with allegations of financial
misconduct and by necessary implication apply prospectively.
In my
view, in answer to the question I raised in paragraph [22] (1)
above, Regulation 20 supports the view that any
allegations of
misconduct whereof the investigation commenced after the 30
th
May 2014 or the allegations thereof arose after the said date, falls
to be dealt with in terms of the 2014 Regulations.
[32]
It is so, as argued by the respondents that the 2014 Regulations do
not expressly repeal the 2010 provisions or provide for
any
consequences or remedies if not complied with
.
It is further argued that the provisions of the 2014 are directory as
opposed of being directory. It has to be borne in mind that
this
court still relies on common law maxims and presumptions in
interpreting legislation as long as they are not in conflict with
the
values of the Constitution. Section 175 of the Municipal Finance
Management Act provides,
inter alia
,
as follows:
“
(1)
The Minister, acting with the concurrence of the Cabinet members
responsible for local government, may make regulations prescribing-
a)
the manner,
form and circumstances in which allegations and disciplinary and
criminal charges of financial misconduct must be reported
to the
National Treasury, the MEC for Local Government in the Province and
the Auditor- General including….
(i)…..
(ii)
steps taken in connection with such financial misconduct:
b)
matters
relating to internal investigations by municipalities..
allegations
of financial misconduct:
c)
…
..
d)
criteria
for the composition and functioning of a disciplinary board which
hears a charge of financial misconduct”.
(my
emphasis)
[33]
Section 175 required of the Minister to make regulations prescribing,
inter alia, the steps to be taken in connection with
financial
misconduct which includes internal investigations and the criteria
for the composition and functioning of a disciplinary
board which
hears a charge of financial misconduct. The legislature could never
have promulgated the 2014 Regulations in line with
the provisions of
section 175 and not have intended such Regulations to apply in
relevant cases. It is my considered view that
it is unnecessary to
traverse the second query of my request to both Counsel in light of
my finding that all the charges relate
to financial misconduct.
[34]
Both the 2010 and 2014 Regulations govern the procedures to be
followed in instances of alleged financial misconduct. Both
pieces of
legislation do not govern substantive rights or remedies. In
Veldman
v Director of Public Prosecutions
[10]
the court said:
“
[26] Generally
legislation is not to be interpreted to extinguish existing rights
and obligations. This is so unless the statute
provides otherwise or
its language clearly shows such a meaning. That legislation will
affect only future matters and not take
away existing rights is basic
to basic notions of fairness and justice which are integral to the
rule of law, a foundational principle
of our Constitution. Also
central to the rule of law is the principle of legality which
requires that law must be certain, clear
and stable. Legislative
enactments are intended to ‘give fair warning of their effect
and permit individuals to rely on their
meaning until explicitly
changed.”
[27] Accordingly, the
respondent argued that the presumption against retrospectivity in
this case would be applicable only if the
relevant legislation was
substantive in nature……
[28] The distinction
between procedural and substantive provisions cannot always be
decisive in the operation of the presumption
against retrospectivity.
As Marais JA recognised in Minister of Public Works v Hafejee NO:
[11]
“
It
does not follow that once an amending statute is characterised as
regulating procedure it will always be interpreted as having
retrospective effect. It will depend upon its impact upon the
existing rights and obligations. If those substantive rights and
obligations remain unimpaired and capable of enforcement by the
invocation of the newly prescribed procedure, there is no reason
to
conclude that the new procedure was not intended to apply. Aliter if
they are not.”
[35]
Both pieces of legislation are purely procedural in nature. There is
no provision in the 2014 Regulations which indicates that
the said
legislation was not meant to apply prospectively. It is contended by
the First Respondent that there is no disciplinary
board in place and
that the Applicant is well aware of this. It is further contended
that it was never the intention of the Legislature
that the
Municipality should be expected to comply with such a ‘cumbersome
procedure ‘as envisaged in the 2014 Regulations.
These
arguments hold no water. The First Respondent does not explain why
the disciplinary board cannot be established save to say
it does not
exist. The argument does not explain what makes the procedure
cumbersome as the 2014 Regulations require and prescribe
it. These
arguments stand to be rejected.
[36]
I am satisfied that the Applicant has in this case established a
clear right. He is entitled to insist on the requirement of
the
correct legal prescript being followed. It is clear that there has
been non-compliance with the prescripts of the 2014 Regulations
as
fully set out above.
I.
there was no disciplinary investigation by
the disciplinary board in order to determine the veracity of the
allegations of misconduct
;
II.
there were no recommendations by the
Diciplinary Board to the Council as envisaged in Regulations 5(1) and
(2) of the 2014 Regulations;
III.
there was no determination whether the
allegations were frivolous,vexatious ,speculative by the disciplinary
board. It is indeed
so that there is a measure of overlap between the
two Regulations but the 2014 Regulations allows the disciplinary
board to decide
after its investigation a discretion to decide
whether the allegations are frivolous, vexatious or not.
[37]
The Applicant has established that he stood to suffer irreparable
harm if the proceedings were allowed to continue in view
of the fact
he is entitled to a fair process of discipline. Seeing that the
attack on the procedure goes to the heart of the issue
of
unlawfulness I am satisfied that the Applicant had no alternative
remedy other than to approach this court for an interdict.
The
balance of convenience favour the granting of the relief sought.
[38]
In light of my reasons above I am of the view that this application
ought to succeed and I make the following orders:
ORDER
1.
The First Respondent is interdicted and
restrained from continuing with the disciplinary proceedings pending
and instituted against
the Applicant until the First Respondent
complies with the Local Government: Municipal Regulations on
Financial Misconduct Procedure
and Criminal Proceedings;
2.
It is declared that the appointment of the
Fourth Respondent as Presiding Officer of the disciplinary hearing is
invalid, unlawful
and null and void.
3.
It is directed that the disciplinary
hearing against the Applicant be conducted within the prescripts of
the Local Government: Municipal
Regulations on Financial Misconduct
Procedure and Criminal Proceedings;
4.
The First Respondent is ordered to pay the
costs of this application.
__________________
P.E.
MOLITSOANE, J
On
behalf of Applicant: Adv. M C Louw
Instructed
by: Peyper Attorneys
BLOEMFONTEIN
On
behalf of Respondents: Adv. Baloyi
Instructed
by: Fixane Attorneys
BLOEMFONTEIN
[1]
See Sikatele v Sikatele [1996] 1 All SA 445 (Tk).
[2]
Amler’s Precedents of Pleadings-9
th
ed by LTC Harms on page 251( reference to decided cases
omitted)
[3]
2006(4) SA 292 (SCA) at 299-300
[4]
(2013) 34 ILJ 1138 (LAC)
[5]
2010(2) SA 248(ECP) at 253 D-E
[6]
1906 TS 306
[7]
Re- Interpretation of Statutes- Lourens Duplessis Butterwoths
[8]
Pages 128 pargraphs (i) and(ii) of the Annexure FA 11, item 5 to
founding Affidavit
[9]
See in general Steyn Uitleg van Wette 119-124
[10]
2007(3) SA 210 (CC)
[11]
1996(3) SA 745( A)