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[2019] ZAFSHC 159
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Municipal Workers Retirement Fund v Kopanong Local Municipality (A67/2019) [2019] ZAFSHC 159 (19 September 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Appeal
number:
A67/2019
Case
number (court a
quo
)
5596/2018
In
the Appeal between:
MUNICIPAL
WORKERS RETIREMENT FUND
Appellant
and
KOPANONG
LOCAL
MUNICIPALITY
Respondent
CORAM:
DAFFUE, J
et
REINDERS, J
et
POHL, AJ
HEARD
ON:
16 SEPTEMBER 2019
JUDGMENT
BY:
DAFFUE, J
DELIVERED
ON:
19 SEPTEMBER 2019
INTRODUCTION:
[1]
This is an appeal to the full bench against the judgment of a single
judge of this Division. Final orders were granted
on 8 November
2018 and the court
a
quo
’s reasons
were provided on 10 January 2019. On 27 March 2019 leave was
granted by the court a quo to appeal to the
full bench.
[2]
Several legal disputes emanate from the judgment, but the dominant
issue is whether the court
a quo
could have granted final
orders not applied for in the notice of motion. The best result
the successful applicant could have
obtained was a temporary stay of
execution pending final determination of the application on the
return date, to wit 7 February
2019. More detail will be
provided later in this judgment.
THE
PARTIES
[3]
The unsuccessful respondent in the court
a
quo
and appellant in this appeal is a pension fund registered in terms of
s 4 of the Pension Fund Act
[1]
,
(“the PFA”). It was represented in the proceedings
before us by Advv P van der Berg SC and H Drake. The
appellant
was incorrectly described in the court
a
quo
and the incorrect citation remained in the papers before us.
The appellant’s name is the South African Municipal Workers’
Union National Provident Fund.
[4]
The respondent is a local municipality, established in terms of the
Local Government: Structures Act.
[2]
It was represented by Adv AH Burger SC in the court
a
quo
and by Advv Burger SC and DR Thompson before us.
[5]
I shall hereinafter refer to the appellant as “the Fund”
and to the respondent as “the Municipality”.
MATERIAL
BACKGROUND:
[6]
The Municipality is statutorily obliged to pay over to the Fund
pension fund contributions in respect of its employees in accordance
with the provisions of s 13A of the PFA. It has a history of
failing to abide by the compulsory provisions of the PFA.
In
2016 judgment was taken against it for an amount in excess of R2m.
[7]
It continued to disregard its statutory obligations, causing the Fund
to obtain judgment by consent against it in October 2017
in the
amount of R6 506 277.04. On 6 November 2017 the Fund
caused a writ of execution to be issued by the registrar
of this
court against the Municipality. A whole host of movable assets
of the Municipality were consequently attached.
A sale of
execution pursuant to the said attachment was arranged and scheduled
for 8 November 2018. The intended sale in
execution prompted an
urgent application in the court
a quo
by the Municipality,
seeking to stay the intended sale in execution pending finalization
of the application. The court
a quo
ordered that the
sale in execution by way of an auction, premised on the said writ of
execution be “set aside”, as
opposed to “stayed”.
The court also went further and made a certain “payment plan”,
which was proposed
by the Municipality, an order of court. It is
against the whole of this judgment and the orders made by the court
a
quo
that the Fund appeals.
THE
NOTICE OF MOTION:
[8]
The Municipality approached the court
a
quo
on 7 November
2018 on an urgent basis to stay a sale in execution advertised to
take place the next day pending the final determination
of the
application.
Ex
facie
the notice of
motion just over 2 hours’ notice was given to the Fund’s
Bloemfontein attorney who acts as a correspondent.
I quote from
the notice of motion and emphasize that no amendment was ever sought
or granted:
“
1.
Dispensing with the prescribed time limits, forms and service
provided for in the Uniform Rules of this Honourable Court and
allowing the matter to be heard as one of urgency under Rule 6(12);
2.
That the sale in execution scheduled for Thursday, 8 November 2018 at
10h00 by the Second Respondent, be
stayed
pending
the final determination of this application
;
3.
That a rule
nisi
be hereby issued calling upon the respondents
to
show cause
on
Thursday
,
7 February 2019
at
09h30
,
why the
following
orders should
not
be made final
:
3.1 That the sale in
execution by way of an auction premised on a writ of execution issued
on 6 November 2017 in pursuance of a
judgment granted by this
Honourable Court on 19 October 2017, be hereby set aside.
3.2
That the payment plan proposed by the applicant to settle its
indebtedness to the first respondent in terms of the court order
dated 19 October 0217, referred to in paragraph 4.8 of the founding
affidavit, is made an order of Court or, alternatively, such
order
with regard to a payment plan that this Honourable Court deems fit in
the circumstances;
4.
That prayer 2 above, shall serve and operate as an interim interdict
against the respondents, pending the final determination
of this
application;
5.
That the relief granted herein be served on the respondents in
accordance with the Rules of Court;
6.
That the applicant is granted leave to supplement its papers, if
necessary;
7. The
respondents to pay the costs of the application, only if
unnecessarily opposed;
8.
Further and/or alternative relief.
”
(emphasis
added)
PROCEEDINGS
IN COURT ON 7 NOVEMBER 22018
[9]
Adv Hefer who appeared for the Fund that day made it clear from the
onset that the application papers were received by email
that morning
only and that there was no time to draft an answering affidavit.
Leave was granted to him, as requested, to
call the local attorney,
Mr Gerdener, to place certain facts on record which he did without
being cross-examined at all.
He referred to the judgment
obtained in 2017 by consent. It is common cause that this
judgment was for an amount in excess
of R6.5m and that a writ of
execution was issued on 6 November 2017, a year earlier. A sale
in execution, advertised to be
held in June 2018, was cancelled
previously. Mr Gerdener also referred to an earlier judgment
obtained in respect of the
same cause of debt for about R2m under
application 1148/2016. He emphasized the problematic payment
history pertaining to
the Municipality’s pension fund
contributions on behalf of employees. Mr Gerdener admitted that
he received an offer
to pay the debt in instalments which he rejected
on 30 October 2018. The written offer dated 24 October 2018 –
annexure
H to the founding affidavit - is vague to the extreme in
that the municipal manager stipulated
“
that
a new payment proposal will be negotiated before the end of December
2019 for the outstanding capital amount.”
[10]
The arguments of counsel were not transcribed fully, but it is
apparent that Mr Hefer argued that the application be dismissed
insofar as the urgency was self-created. He did not deal with
the payment plan, either the offer made before the application
was
issued referred to above, or the offer presented in the founding
affidavit at all. It may be mentioned that the two offers
differ completely but I deem it unnecessary to deal with that.
Mr Hefer’s argument on the availability of an alternative
remedy was not transcribed. When he started to address the
court in this regard a technical problem arose whereafter the
court
adjourned. No further recording is available.
[11]
Mr Burger incorrectly, without any substance and contrary to
established legal principles made the following submissions during
argument
[3]
:
“
Today
they ask in this application that the
court
must make an order
and that order is
contained
in paragraph 3.2 in the notice of motion
…….”
Again
on the same topic we find the following a few lines further on:
“…
and
that to be made an order of court
today
.”
(emphasis
added)
[12]
Contrary to his earlier submissions, Mr Burger eventually requested
orders in terms of the notice of motion
[4]
.
It is difficult to accept that counsel, let alone senior counsel,
could simultaneously ask for (1) relief in terms of the notice
of
motion which clearly anticipates resolution of the main dispute on a
future date (7 February 2019 in this case) and after the
other party
had an opportunity to show cause why the relief should not be granted
on the one hand and (2) the granting of the very
relief which is the
subject of dispute and which the other party did not have any
opportunity to deal with in an answering affidavit
and without even
asking for an appropriate amendment of the notice of motion on the
other hand. There can be no doubt that
Mr Burger’s
reliance on the so-called payment plan influenced the court
a
quo
to make the orders set out under the next heading.
THE
ORDERS GRANTED:
[13]
The court
a quo
granted the following orders:
“
1.
That this application be heard as one of urgency as envisaged in the
Uniform Rule 6(12);
2. The
sale in execution by way of an auction premised on a writ of
execution issued on 6 November 2017 in pursuance of a judgment
granted by this court on 19 October 2017 is hereby
set
aside
;
3. The
payment plan
proposed by the applicant to settle its indebtedness to the first
respondent in terms of the court order dated 19 October 2017,
as more
fully set out in paragraph 4.8 of the applicant’s founding
affidavit, is hereby
made
an order of court
;
4. It
is ordered that the payments as envisaged in paragraph 3 above shall
be made on or before the 7
th
of each month;
5.
Should the applicant default on any payment, then in that case the
whole balance shall be immediately due and payable.
6. The
applicant shall bear the costs of this application and costs of
issuing the writ of execution, arrangement of sale and its
cancellation thereof on party and party scale.
”
(emphasis added)
THE
GROUNDS OF APPEAL:
[14]
Several grounds of appeal have been raised
[5]
.
These are that the court
a
quo
erred:
(i) in granting final
relief not sought in the notice of motion;
(ii) by making a final
payment plan an order of court which the Municipality did not ask for
on the hearing day, whilst the issue
of the payment plan was to be
determined on the return day of the rule
nisi
;
(iii) by not allowing the
Fund an adequate opportunity to be heard;
(iv) in finding that the
Fund elected not to deal with the Municipality’s payment plan;
(v) in failing to
consider the nature of the arrear pension fund contributions and the
harm and injustice caused to affected employees;
(vi) in finding that the
proposed payment plan was reasonable in the circumstances and in the
process impermissibly created a contract
between the parties;
(vii)
in failing to consider alternative remedies provided for in the
Municipal Finance Management Act
[6]
,
(“the MFMA”) and
(viii) in finding that
the judgment in
Mafube Local Municipality v South African
Municipal Workers’ Union National Provident Fund
was
distinguishable.
THE
CORE ISSUE OF THE APPEAL
[15]
It is not my intention to deal with all grounds of appeal. The
more pertinent grounds will be considered and some in
more detail
than others for obvious reasons. The core issue of the appeal,
from the Fund’s point of view, is that the
Municipality only
sought
interim
relief in the urgent application, with final relief to be argued at a
later stage. The court
a
quo
however granted
final relief as indicated in the previous heading. The Fund
therefore takes issue with the court
a
quo
’s order
on the basis that it was not competent to have made a final order
when the Municipality did not ask for it and expressly
put the Fund
on notice that it would not ask for it on 7 November 2018, when the
urgent application was moved, but only on the
return date which would
be 7 February 2019.
[16]
The notice of motion envisaged the Municipality’s application
to be heard in two stages:
(i) in the first stage,
the Municipality would seek an
interim
order on an urgent
basis on 7 November 2018, namely that the sale in execution
scheduled for the next day, 8 November
2018, be stayed
pending the final determination of the application;
(ii)
in the second stage, it would seek a rule
nisi
with a return date on 7 February 2019 “
why
the following orders should not be made final.”
It
was envisaged that only on the return day, to wit 7 February 2019,
final orders that the sale in execution premised on a writ
issued on
6 November 2017 could be set aside and the said payment plan be made
an order of Court.
[17]
Ex facie
the notice of motion, the Municipality did not intend to seek on 7
November 2018 either a final order setting aside the sale of
execution pursuant to the writ of execution, or a final order that
the payment plan be made an order of court. The case that
the
Fund had to meet on 7 November 2018 was an application for an
interim
order “staying” the sale in execution pending
finalization of the application. The Fund was not called upon
to oppose the final order of setting aside the sale in execution on a
permanent basis or the making of the proposed payment plan
an order
of court.
[18]
I recorded above that the Fund was only given a few hours to oppose
the application and that they had insufficient time to
file an
answering affidavit. I explained earlier what transpired during
the court proceedings of 7 November 2018. The
evidence of Mr
Gerdener, the correspondent attorney in Bloemfontein, may perhaps be
described as somewhat sketchy and most certainly
not in any detail
with regards to the final relief the Municipality envisaged to be
dealt with on the return day of the rule
nisi
.
[19]
It is important to have regard to the fact that the court order
setting aside the sale in execution and making the payment
plan an
order of court, was done by the court
a
quo
on 8 November
2018
ex facie
the record (the typed order on page 79 of the record apparently
incorrectly states 9 November). The court thus made a final
order on that day even though the Municipality did not ask for such
an order, save for Mr Burger’s submissions during argument
which contradicted his final submission as mentioned earlier.
The pertinent issues relevant to the matter were not canvassed
fully
or at all during the hearing.
[20]
The fact that the Municipality itself did not ask for final orders
when the application was moved, is illustrated by what I
stated above
and reiterated during the final submission by its own counsel, Mr
Burger. At page 67 of the record, referred
to earlier, he
submitted to the court that the relief contained in the notice of
motion should be granted because the
“
balance
of convenience…. favours the applicant.
It
begs the question: why would Mr Burger as senior counsel refer
to one of the unique requisites of an
interim
interdict if he did not ask for it? It is trite that the
balance of convenience is a requisite of an
interim
interdict and not a final interdict.
[21]
The final orders made on 8 November 2018 were not asked for in the
concluding submissions of Mr Burger, but even if it could
be said
that it was asked for, it could not have been granted in the absence
of such relief claimed in the notice of motion.
In this regard
I align myself with the following
dicta
in paragraph [7] of the decision of
Commissioner
of Correctional Services v Ntetselelo Hlatswako
[7]
:
“
[7]
At the outset it is
instructive to note that the first order setting aside the decision
of the Disciplinary Board was not prayed
for. Accordingly, it
was in my view incompetent for the Court a quo to make the order in
the absence of an amendment of the
notice of motion. This part
of the order was unfair both procedurally and materially. It is
trite that a litigant can
also not be granted that which he/she has
not prayed for in the lis”
The
full bench held in
Mgoqi
v City of Cape Town & another
[8]
that the relief sought by applicant’s counsel during his
argument could not be considered as the notice of motion did not
provide therefore and applicant failed to move for an appropriate
amendment of the notice of motion.
[22]
In
NDPP
v Zuma
[9]
the court held as follows in paragraph [15]:
“
[15]
It is crucial to provide an exposition of the functions of a judicial
officer because, for reasons that are impossible to fathom,
the
court below failed to adhere to some basic tenets, in particular
that, in exercising the judicial function, judges are
themselves
constrained by the law. The underlying theme of the court's judgment
was that the Judiciary is independent; that judges
are no respecters
of persons; and that they stand between the subject and any attempted
encroachments on liberties by the Executive
(paras 161 - 162) This
commendable approach was unfortunately subverted by a failure to
confine the judgment to the issues before
the court; by deciding
matters that were not germane or relevant; by creating new factual
issues; by making gratuitous findings
against persons who were not
called upon to defend themselves; by failing to distinguish between
allegation, fact and suspicion;
and by transgressing the proper
boundaries between judicial, executive and legislative functions.”
See
also paragraph [47] where the following was said:
“
[47]
The trial judge, again, failed to comply with basic rules of
procedure. Judgment by ambush is not permitted. It is not
proper for a court in motion proceedings to base its judgment on
passages in documents which have been annexed to the papers when
the
conclusions sought to be drawn from such passages have not been
canvassed in the affidavits. The reason is manifest - the other
party
may well be prejudiced because evidence may have been available
to it to refute the new case on the facts. A party cannot
be expected
to trawl through annexures to the opponent's affidavit and to
speculate on the possible relevance of facts therein
contained. The
position is no different from the case where a witness in a trial is
not called upon to deal with a fact and the
court then draws an
adverse conclusion against that witness.”
[23]
Having referred to the aforesaid
dicta
in
Zuma
,
I wish to come to the defence of my learned colleague who granted the
orders in the urgent court and having to consider an import
matter
such as the imminent sale of the majority of a municipality’s
movable assets which are required to comply with service
delivery.
This is not a case of judgment by ambush as set out in
Zuma
.
I have no doubt in my mind, having considered the record and Mr
Burger’s submissions quoted above, that the court
a
quo
was persuaded
to grant the orders based on Mr Burger’s insistence. This
is rather unfortunate.
[24]
It would not have assisted the Municipality to argue during the
hearing before the court
a
quo
that it could obtain relief under the prayer
“
further
and alternative relief.”
It
expressly claimed that a rule
nisi
be issued with return date 7 February 2019 for finalization of the
application once an opportunity was provided to the Fund to
advance
reasons why relief should not be granted.
In
Queensland
Insurance Co Ltd v Banque Commerciale Africaine
[10]
the court held as follows:
“
The
prayer for alternative relief does not help the plaintiff over the
difficulty.”
It
continued:
”…
.
the prayer for alternative relief is limited by the statement of fact
in the declaration and by the terms of the express claim,
and that a
plaintiff cannot get, under the prayer for alternative relief,
anything that is inconsistent with those two things.”
[25]
I want to reiterate that it would be a totally different scenario if
the Municipality gave proper notice to the Fund who had
sufficient
time and indeed filed an answering affidavit in respect of the main
relief sought whereupon the Municipality filed its
replying
affidavit. In such a case, all aspects being fully canvassed
and disputes properly ventilated, the matter would
be ripe for
hearing and the court be entitled to adjudicate the application after
having received submissions on behalf of all
parties concerned
without the necessity to issue a rule
nisi
, obviously unless
third parties’ rights might be affected such as for example in
sequestration proceedings.
[26]
It was procedurally and materially unfair to the Fund for the order
of 8 November 2018 to have been issued. The notice
of motion
envisaged that a final order would be sought on the return date of
the rule
nisi
and thus only after all the issues have been ventilated. The
appeal must succeed based solely on this ground of appeal.
[27]
Mr Burger conceded that (1) he had no instructions to move for the
payment plan to be made an order of court on 7 November
2018, (2) his
submission in this regard was incorrectly made, (3) he eventually
merely asked for an
interim
order in terms of the notice of motion and (4) therefore the order
was erroneously granted. He effectively conceded that
the
appeal should succeed. Upon questioning why he did not approach
the court immediately for variation of the order in terms
of rule
42(1)(b) of the Uniform Rules of Court after becoming aware of the
mistake and why the application for leave to appeal
and the appeal
itself were opposed, he responded by alleging that the
“
matter
got out of hand”
and
“
it went beyond
control.”
I shall
deal with this aspect again when I exercise my discretion pertaining
to costs. My finding in respect of the core issue
on appeal
should really be the end of the matter. However, bearing in
mind Mr Burger’s submission that the matter should
be referred
back to the court
a
quo
to be
adjudicated afresh after a proper opportunity was given to the Fund
to file answering affidavits, it is regarded apposite
to deal with
some the other grounds, albeit in less detail.
AUDI
ALTERAM PARTEM:
[28]
In
Motswai
v RAF
[11]
the Supreme Court of Appeal had to deal with a finding of fraud
against an attorney by a judge of the High Court, calling it a
grave
injustice in paragraph [57]. It concluded as follows in
paragraph 59:
“
[59]
Through the authority vested in the courts by s 165(1) of the
Constitution judges wield tremendous power. Their findings often
have
serious repercussions for the persons affected by them. They may
vindicate those who have been wronged but they may condemn
others.
Their judgments may destroy the livelihoods and reputations of those
against whom they are directed. It is therefore
a power that must be
exercised judicially and within the parameters prescribed by law. In
this case it required the judge to hold
a public hearing so that the
interested parties were given an opportunity to deal with the issues
fully, including allowing
them to make all the relevant facts
available to the court before the impugned findings were made against
them. The judge failed
to do so and in the process did serious harm
to several parties.”
[29]
It is important to have regard to the fact that the Municipality
served the papers in which it sought
interim
relief only on the morning of the hearing. The Fund’s
legal representative then applied to the court for permission
to lead
viva voce
evidence, because it did not have enough time to file an answering
affidavit. The court correctly granted the Fund the opportunity
to lead such
viva
voce
evidence.
[30]
As mentioned, Mr Gerdener was called to testify to “
place
certain
facts”
on record
[12]
. No
witness from the Fund with firsthand knowledge about the pros and
cons of the payment plan was called to deal with same.
If one
has cognizance of the statutory obligations of the Municipality
pertaining to payment of pension fund contributions and
the
consequences of non-compliance as set out in paragraphs 7 and 8 of
the Fund’s founding affidavit in application 1148/2016,
there
can be no doubt that the Fund would clearly be entitled to advance
reasons on the return date why final relief should not
be granted.
I respectfully agree with the convincing and reasoned judgment of
Motimele, AJ in
Mafube
Local Municipality v South African Municipal Workers’ Union
National Provident Fund.
[13]
Mr Gerdener made it clear that the Municipality’s offer was
rejected, but did not venture into any further detail.
It could
surely not be expected of him to deal comprehensively with the Fund’s
possible responses to the founding affidavit.
He could not be
expected to present admissible evidence as to for example the
consequences of late payment on affected employees.
The record
illustrates that the Fund did not have enough time to prepare an
answering affidavit. To my mind the Fund did
not want the
evidence of the attorney to be its complete answer to the founding
affidavit. This fact is further illustrated
by the somewhat
sketchy nature of the attorney’s evidence.
[31]
Under these circumstances, the court misdirected itself by finding
that the Fund “
elected…
not to deal with the adequacy or otherwise”
of
the Municipality’s proposed payment plan
[14]
.
Based on this misdirection, the court then went ahead and adjudicated
the final relief without affording the Fund an opportunity
to place
facts before the court in this regard and thus effectively denying it
one of the most fundamental rights of natural justice,
the
audi
alteram partem
principle,
which, on its own, justifies the decision being set aside. As
is the case with the core issue considered above
this finding makes
it unnecessary for this court to deal with the other aspects, but
which will be dealt with briefly for the sake
of completeness.
UNPRECEDENTED
ORDER:
[32]
The relief granted,
i.e.
to make a payment plan presented by the Municipality an order of
court against the will of the Fund (and without having allowed
the
Fund to make representations in this regard) is unprecedented.
I do not have to come to any final conclusion in this
regard insofar
it might be possible to break new ground, but surely only once both
parties have been given the opportunity to tender
detailed evidence
and provide comprehensive legal argument on the issue. This is not
what occurred and the court
a
quo
’s
judgment is in direct conflict with the judgment in
Mafube
which I believe
cannot be criticized.
[33]
It is correct that rule 45A of the Uniform Rules of Court states that
the court has a discretion to suspend the execution of
any order for
such period as it deems fit, but that does not mean that a court has
a general equitable jurisdiction to stay execution.
The cases
referred to by Mr Burger are clearly distinguishable and it is not
necessary to consider them at all. I fully agree
with Davis,
J
[15]
that rule 45A does not
envisage
“
the
exercise of an equitable jurisdiction unhinged from any legal causa,
but simply predicated on the equities of a case.”
In
casu
,
the Municipality conceded to judgment being granted. It has no
defence. In fact, it is in breach of the PFA and is
liable to
criminal prosecution. Its neglect has serious consequences for
affected employees. The urgent application
was issued more than
a year after judgment was granted and the writ of execution issued.
The court
a
quo
was
approached on the basis of alleged urgency by giving only about 2
hours’ notice to the Fund. The equities did not
favour
the Municipality who apparently did nothing for a year to utilize
alternative remedies provided for in the MFMA.
[34]
Although in a different context, the court held in
Nelson
Mandela Metropolitan Municipality v Grievenouw
CC
[16]
that
“
a
court does not have a general discretion, having found conduct of a
respondent to be unlawful and criminal. to suspend its order
that
would put an end to that conduct…….In the absence of
the type of exceptional circumstances that was present
in
…
...
the
suspension of an order would, in my view, amount to an
abdication of judicial responsibility. For good reason, such
a
course finds no support in our case law.”
[35]
In
Tshiya
Infrastructure Development (Pty) Ltd & another v Standard Bank of
South Africa & another
[17]
Molitsoane, AJ (as he then was) declined to impose a draft payment
plan and thereby creating a contract for the parties.
The
application to stay a sale in execution was dismissed. In
Democratic
Alliance v Public Protector
[18]
the High Court dealt with
“
budgetary
constraints”
as
a defence and quoted with approval the
dictum
of the Constitutional Court in
Blue
Moonlight Properties
that
“
it
is not good enough for the City to state that it has not budgeted for
something if it should indeed have planned and budgeted
for it in the
fulfilment of its obligations.”
In
casu
the
Municipality well knew when it appointed personnel from time to time
what their cost to company would be. They had to
plan and
budget. It knew that it was statutorily obliged to deduct from
employees’ salaries their pension fund contributions
and to pay
such contributions together with its own contributions over to the
Fund on a monthly basis. There is just no excuse
for its
transgression of the PFA.
CREATING
A CONTRACT FOR THE PARTIES:
[36]
One further aspect which flows from the fact that the court
adjudicated the payment plan without affording the Fund the
opportunity
to place further facts before the court must be
considered. The most fundamental principle of the South African
law of contract
is that it is based on
consensus
.
Without the complete input from the Fund with regards the payment
plan, there can be no doubt that by making the Municipality’s
proposed payment plan an order of court, the court effectively
created a contract for the parties where there was no consensus.
In
fact, Mr Gerdener made it clear that the payment plan was rejected.
It is trite that courts may not create contracts between
parties. I
refer to
ABSA
Bank Ltd v Moore and Another,
[19]
at paragraph [42], endorsed by the Constitutional Court in
ABSA
Bank Ltd v Moore and Another.
[20]
ALTERNATIVE
REMEDIES:
[37]
The MFMA provided alternative mandatory remedies which could and
should have been utilized if the Municipality was in such
dire
financial straits as it wanted the court to believe. I refer to
ss 139, 152 and 153.
[21]
Nothing more needs to be said, save to confirm that the Fund’s
arguments in this regard are pure and that I agree with
respect with
the judgment in
Mafube
as indicated above. Obviously, the Municipality could not have
waited until the eleventh hour and then argue that the Provincial
or
National Governments would not be in a position to come to its
assistance a day before the auction. It has only itself
to
blame.
MOOTNESS:
[38]
The dispute pertaining to the stay of execution as sought in
paragraph 2 of the notice of motion has become moot insofar as
the
auction was called off as a consequence of the order of the court
a
quo
. The question to be considered is how the court
a
quo
’s order should be substituted. Costs is not an
issue as an order was made in favour of the Fund. In my view
the
Municipality failed to prove all four requisites in order to
obtain
interim
relief. The correct order would be to
substitute the order by an order dismissing the application with
costs.
COSTS:
[39]
Mr Van Der Berg submitted that the fact that the court
a quo
granted an order, which, not even the Municipality itself sought,
justifies a punitive cost order. This is not entirely correct
as I
have shown how Mr Burger’s submissions apparently convinced the
court
a quo
to grant orders not applied for in the notice of
motion. I do not agree with the submission that the
Municipality should
be mulcted with punitive costs. I
considered directing the Municipality’s counsel and attorney to
pay the costs of
the appeal
de bonis propriis
for the reasons
advanced herein and also for not abandoning the appeal when it should
have been evident that there is no chance
of success. Mr Van
der Berg came to the assistance of the Municipality’s legal
team and submitted that such an order
was not warranted.
Eventually I decided against such an order.
CONCLUSION:
[40]
In conclusion it is perhaps appropriate to say something about the
court
a
quo
and the Municipality’s reliance on
Fose
v Minister of Safety and Security.
[22]
Particular reliance was placed on the
dictum
in paragraph [19]. That paragraph did not form part of the
ratio
decidendi
of the court’s judgment. The Constitutional Court upheld
an exception in respect of a claim for constitutional damages,
holding that the common law provides effectively for a damages claim
in the particular case. Of course, one has to respectfully
agree that in our new constitutional dispensation
“
courts
may even have to fashion new remedies to secure the protection and
enforcement of these all-important
(constitutional)
rights.”
However,
the common law provides sufficient safeguards for persons or entities
whose rights are infringed or threatened to be infringed.
No
new remedy has to be created. The issue whether a court may
make a payment plan presented by a judgment debtor an order
of court
against the will of the judgment creditor who wants to execute and
sell movable or immovable property of the debtor is
novel. I
accept, however, that it has already find application in respect of
the intended sale of the primary residence of
a judgment debtor based
on the right to housing in s 26 of the Constitution.
In
casu
such issue would only have arrived on the return date of the rule
nisi
if one were in fact to be issued. The court
a
quo
could not have adjudicated such novel issue when it did and we also
do not have to concern ourselves therewith. In the premises
the
appeal should be upheld.
[41]
Mr Burger submitted that even if the appeal is upheld, the matter
should be referred back to the court
a quo
to reconsider the
adoption of the payment plan once the parties have had an opportunity
to file a full set of affidavits.
I am not prepared to make
such an order. The court
a quo
has already adjudicated
the matter. Furthermore, important constitutional law issues
will come into play. Not only
indicated Mr Burger that the
Municipality would seek leave to supplement its papers, but bearing
in mind the novelty and complexity
of the dispute as well as the
constitutional law issues applicable, I have reason to believe that
notice will have to be given
in terms of rule 16A of the Uniform
Rules of Court. I also believe that several civil rights
organizations might wish to
join as
amici curiae.
It
would be more appropriate to allow the Municipality the opportunity
to institute new proceedings afresh.
ORDERS:
[42]
The following orders are issued:
1)
The appeal is upheld
with costs, such costs to include the costs of two counsel.
2)
The order of the court
a quo is set aside and substituted with the following:
“
The
application is dismissed with costs.”
________________
J.
P. DAFFUE, J
I
concur,
________________
C.
REINDERS, J
I
concur,
________________
L.
LE R. POHL, AJ
On
behalf of appellant: P VAN DER BERG SC
H
DRAKE
Instructed
by: M C V Gerdener
McIntyre
& Van Der Post
Bloemfontein
On
behalf of the respondent: A H BURGER SC
D
R THOMPSON
Instructed
by: T G Mhlokonya
Mhlokonya
Attorneys
Bloemfontein
[1]
24 of 1956
[2]
Act 117 of
1998
[3]
Page 64 of
the record
[4]
Page 67 of the record
[5]
Pages 96 – 104 of the record
[6]
56 of
2003
[7]
(67/09)
[2010] SZSC 31 (28 May 2010)
[8]
2006 (4) SA
355
(CPD) at paras [10] - [13]
[9]
2009 (2) SA
277 (SCA)
[10]
1946 AD 272
at 286
[11]
2014 (6) SA
360 (SCA)
[12]
Page 51 of record
[13]
(4836/2016)
ZAFSHC 2016 (16 February 2017)
[14]
Pages 87 and 92 of the record
[15]
in
Firm
Mortgage Solutions (Pty) Ltd & another v Absa Bank Ltd &
another
2014 (1) SA 168
(WCC) at paras 12 – 14
[16]
2004 (2) SA
81
(SECLD) at para [94]
[17]
5157/2017
[2017] ZAFSHC 228
(9 November 2017)
[18]
2019 (7)
BCLR 882 (GP)
[19]
2016 (3) SA
97
(SCA), a principle also accepted by this court in Tshiya
(footnote 17)
[20]
2017 (1) SA
255
(CC) at para [44]
[21]
Of the MFMA
[22]
[1997] ZACC 6
;
1997 (3) SA
786
(CC)