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[2018] ZANCHC 14
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MEC for Roads and Public Works and Others v Umfana Business Enterprise CC and Silver Solutions CC JV and Another (1980/2015) [2018] ZANCHC 14 (23 February 2018)
IN THE HIGH COURT OF SOUTH AFRICA
NORTHERN CAPE DIVISION, KIMBERLEY
Case
number:
1980/2015
Date
heard:
09/02/2018
Date
delivered:
23/02/2018
In the matter between:-
MEC FOR
ROADS AND PUBLIC
WORKS FIRST
APPLICANT
NORTHERN CAPE ECONOMIC DEVELOPMENT
SECOND
APPLICANT
TRADE AND INVESTMENT PROMOTION AGENCY
MEC FOR FINANCE, ECONOMIC DEVELOPMENT THIRD
APPLICANT
AND TOURISM
AND
UMFANA BUSINESS ENTERPRISE CC
AND FIRST
RESPONDENT
SILVER SOLUTIONS CC JV
INTERNATIONAL CONVENTION SOLUTIONS CC SECOND
RESPONDENT
JUDGMENT
STANTON AJ
INTRODUCTION:-
1. This
is an application in terms of which the applicants, the MEC for Roads
and Public Works, the Northern Cape Economic Development Trade and
Investment Promotion Agency (''the NCEDA'') and the MEC for
Finance,
Economic Development and Tourism, seek the following relief, namely:-
1.1
confirming
the cancellation of the agreement between the parties;
1.2
directing
that the cancellation of the service level agreement concluded on 02
May 2012 between the NCEDA and the joint venture
between Umfana
Business Enterprises CC and Silver Solutions 1069 CC, trading as
International Conventions Solutions ("the
joint venture"),
dated 28 July 2012, is valid;
1.3
ejecting
the respondents, the joint venture and International Convention
Solutions CC, from the premises situated at the Mittah
Seperepere
International Convention Centre ("the Convention Centre''), 10
West Circular Road, Kimberley, Northern Cape;
1.4
directing
the respondents to furnish the applicants with a statement and a
debatement of account by the respondents in respect of
their
management of the Convention Centre;
1.5
directing
the respondents to grant the applicants access to information on the
revenues generated and venue hire of the Convention
Centre and
related expenses by the Convention Centre for auditing by the
Auditor-General; and
1.6
the
respondents open their financial books for auditing by the Auditor
General.
2.
The respondents opposed the application and raised the following
defences:-
2.1
The
respondents are not in occupation of the Convention Centre, but same
is occupied by an entity known as International Convention
Centre CC
trading as MSCC (''the MSCC''). According to the respondents, the
MSCC has since the termination of the service level
agreement by
effluxion of time during October 2012, been in occupation of the
Convention Centre;
2.2
alternatively,
that the MSCC has been occupying the Convention Centre in terms of a
tacit agreement concluded with the NCEDA; and
2.3
he
respondents furthermore deny that the applicants have the right to
call for the delivery and debatement of accounts.
3. The
respondents also raised a point
in limine
that the dispute of
fact pertaining to the entity that occupies the Convention Centre,
cannot be resolved on the papers and as such,
the application should
be dismissed with costs.
4. The
proceedings in the main application were lauched as far back as
August
2015 (''the main application"), but were postponed on
numerous occasions, due to various interlocutory applications filed
by both parties.
AMENDED
NOTICE OF MOTION:-
5. In
its answering affidavit, the respondents took issue with the citation
of the respondents,
inter alia
averring that the MSCC is the
entity that is in occupation of the Convention Centre and not the
respondents. This remains the respondents'
position, despite the
amendment to the notice of motion.
6. The
applicants filed a notice of intention to amend the citation of
the
respondents. The respondents opposed the application for an amendment
and also filed an objection thereto in terms of Rule
30 of the
Uniform Rules of Court.
7. The
applicants furthermore filed an application to supplement its
founding
affidavit,
inter alia
addressing the consequential
corrections of the citation of the respondents in the founding
affidavit. The respondents also opposed
this application.
8. The
interlocutory applications were set down for hearing on 03 February
2017. On this date:
8.1
the
applicants were granted leave to file their supplementary affidavit;
8.2
the
respondents withdrew their application in terms of Rule 30(1); and
8.3
the
parties agreed that the main application should be postponed to
enable the applicant to supplement its papers.
9. The
applicants' supplementary affidavit was consequently served and
filed.
10. The
respondents filed their answering affidavit on 15 March 2017.
11. The
application to amend the notice of motion was heard on 25 August 2017
and on 22
September 2017 Ndlokovane AJ granted the applicants'
application for amendment as follows:-
·
..! am allowing the amendment involving the correction of
the citation of the first respondent to read: "Umfana Business
Enterprises
CC and Silver Solutions CC JV" and the addition of
the acronym "CC" in the citation of the second respondent
so
that it reads.· 'International Convention Solutions CC'
12. The
main application was accordingly postponed to 02 February 2018.
13. At
the commencement of the proceedings, Mr Van Aswegen, on behalf of the
respondents,
took issue with the non-service of the amended notice of
motion. He informed me that his instructing attorneys could not
locate
a served copy of the amended notice of motion. He could,
however, not confirm whether it was in fact served, or not. He
submitted
that in view of the non service of the amended notice
of motion, the amendment was not formally effected in terms of
Uniform
Rule 28.
14.
Mr
G Ngcangisa, on behalf of the applicants, requested me to condone the
applicants' failure to serve the amended notice of motion.
In support
of his request, he referred me to the judgment of
Becker
v Member of the Executive Council for the Department of Economic
Development and Environmental Affairs and others
[1]
where
Goosen J held that:-
"...
the
failure by a litigant to act in accordance with its intention to
amend pleadings within the stipulated time period does not
ipso facto
preclude such party from thereafter filing its amendment. All that
may be said is that a litigant who conducts himself
in that manner
exposes himself or herself to the possibility that a party may object
on the basis that such constitutes an irregular
step. Where there is
no such objection/ there can/ in principle/ be no objection to the
Court dealing with the matter on the basis
of the amended pleadings.
Furthermore, Rule 28(7) confers upon the Court a discretion to permit
the filing of an amendment outside
of the time periods provided for
in the rules.
''
15. Mr
Van Aswegen confirmed that the respondents did not appeal the order
granted by Ndlokovane
AJ and that the non-service was not raised in
the respondents' heads of argument. He added that it was not possible
for the respondents
to object to the non-compliance, as they were not
aware of it. In addition, Mr Van Aswegen argued that the granting of
the condonation
would be prejudicial, as the respondents did not have
an opportunity to file consequential amendments relating to the
amended notice
of motion.
16. Mr
Ncgangisa countered that there could be no prejudice as the issues
pertaining
to the amendment and citation of the respondents were
properly ventilated in the respondents' answering affidavit and in
the application
for the amendment. He argued that no consequential
amendments could in any event be made to the respondents' affidavit.
17. I
agreed with Mr Ncgangisa's submissions and granted the applicants'
request
for condonation in respect of the non-service of the amended
notice of motion.
RELEVANT FACTS:-
18. The
Convention Centre is the property of the Northern Cape Provincial
Government and
it exercises its ownership thereof through the
applicants.
19. It
is not in dispute that:-
19.1
on 02 May 2012, the NCEDA and the joint venture concluded a
written service level agreement in terms of which the joint venture
was required to design the management and operational systems
necessary for the successful operation of the Convention Centre,
after which, the management thereof would be transferred to the
NCEDA, which in turn, would appoint a permanent management company
(''the service level agreement'');
19.2
the
service level agreement was to endure for a period of three months
after signature thereof, or until the parties agreed to cancel
same,
and in the event of any extension thereof, both parties had to sign a
letter of extension; and
19.3
the
service level agreement terminated on 31 July 2012, but was extended
for a further period of three months until 31 October 2012.
20. Mr
Ngcangisa conceded that the service level agreement between the NCEDA
and the joint
venture was tacitly extended until 28 July 2014, on
which date the NCEDA served the joint venture with a notice of
cancellation
in terms of which it was to vacate the Convention Centre
within a period of one month from the date of service. This letter
was
addressed to
International Convention Solutions.
(my
underlining).
ISSUES IN
DISPUTE:-
21. The
issues in dispute are crisp. In the first instance, it must be
determined
who is in occupation of the Convention Centre. Is it the
respondents or the enitity known as the MSCC? Secondly, it must be
determined
whether or not the MSCC has been occupying the Convention
Centre in terms of a tacit agreement concluded between the NCEDA and
the MSCC.
FACTUAL
DISPUTE:-
22. The
point
in limine
is intrinsically linked to the respondents'
opposition of the application. I will accordingly deal with the point
in limine
and the defences simultaneously.
23.
The
approach to be taken to factual disputes in applications is set out
in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (pty) Ltd
[2]
by
Corbett JA in the following terms:-
''It is correct
that, where in proceedings on notice of motion disputes of fact have
arisen on the affidavits, a final order, whether
it be an interdict
or some other form of reliet may be granted if those facts averred in
the applicant's affidavits which have
been admitted by the
respondent, together with the facts alleged by the respondent,
Justify such an order. The power of the Court
to give such final
relief on the papers before it is, however, not confined to such a
situation. In certain instances the denial
by respondent of a fact
alleged by the applicant may not be such as to raise a real genuine
or bona fide dispute of fact.. If in
such a case the Respondent has
not availed himself of his right to apply for the deponents concerned
to be called for cross-examination
under Rule 6(5)(g) of the Uniform
Rules of Court
....
and the Court is satisfied as to the
inherent credibility of the applicant's factual averment, it may
proceed on the basis of the
correctness thereof and include this fact
among those upon which it determines whether the applicant is
entitled to the final relief
which he sees......Moreover, there may
be exceptions to this general rule as, for example, where the
allegations or denials of
the respondent are so far-fetched or
clearly untenable that the Court isJustified in rejecting them merely
on the papers."
24.
In
National
Director of Public Prosecutions v Zuma,
Harms
DP
[3]
emphasised the application
of the exception to the general rule, and stated that where a
'version
consists of bald or uncreditworthy denials, raised fictitious
disputes of fact, is palpably implausible, far-fetched, or
.....
clearly untenable;
the
court is justified in rejecting it merely on the papers.
25.
In
motion proceedings, as in trial proceedings, courts are also required
to analyse the facts put forward in order to establish
whether they
are sufficient to stave off the relief sought. The position was
articulated in
South
Peninsula Municipality v Evans
[4]
as
follows:-
‘……
.South
African Courts have recognised that, in motion proceedings, disputes
of fact cannot necessarily be accepted at face value
and that, in
each case, the Court should closely scrutinise the alleged issues of
fact in order to decide whether there is indeed
a dispute of fact
that cannot satisfactorily be determined without the aid of oral
evidence.... Thus, while the Court should be
circumspect in its
approach, '(i) if, on the papers before the Court, the probabilities
overwhelmingly favour a specific factual
finding, the Court should
take a robust approach and make that finding’"
WHO IS IN
OCCUPATION OF THE CONVENTION CENTRE:-
26. The
respondents rely on the Companies and Intellectual Properties
Commission Report,
attached to the answering affdavit, as proof of
the registration of the entity described and trading as MSCC. This
report, however,
refers to the close corporation
''International
Conventions Solutions CC (registration number 2007/141088/23)”;
the second respondent.
27. According
to Mr Van Aswegen, the joint venture had nothing to do with the
registered
close corporation. Mr Van Aswegen, however, conceded that
the Companies and Intellectual Properties Commission report does not
include a reference to "MSCC" and that it only contains the
registration details of the second respondent.
28. The
letter, dated 27 August 2014, addressed by Fairbridges Attorneys,
(the respondents'
erstwhile attorneys) records that Fairbridges
"represents
International Conventional Solutions CC
."
This letter furthermore states that
"our client has
since
31 October 2012 (the date the service level agreement expired)
continued to manage the Convention Centre with the knowledge
and
consent of NCEDA. In addition, it is recorded that
"Our
client denies your contention that it has ''no right to operate the
MSICC as its contract has lapsed.”· “...
it is our
clients contention that it had, and still has the right to manage the
MSICC.” (my underlining).
29. On
30 September 2014, the respondents' new attorney of record, Duncan
and Rothman,
addressed a letter to the State Attorney in which it is
recorded that Duncan and Rothman has been appointed to represent
International Convention CC.
It records that
International
Convention CC
denies being in unlawful occupation of the
Convention Centre and that any steps to evict
International
Convention Solutions CC.
will be opposed.
(my underlining).
30. On
10 October 2014 and in response to the NCEDA's notice, published in
the Diamond
Fields Advertiser newspaper, in which the public was
notified of the termination of the management contract with the
respondents,
the second respondent responded by placing a counter
notice in which it,
inter alia
stated that
"MISCC [the
Convention Centre] is under the full and exclusive management of
International Convention Solutions, and that ''JCS
has the legal and
exclusive right to operate the centre and the premises.
'
31. Based
on the aforegoing, I disagree with the respondents that a dispute of
fact
exists as to which entity occupies the Convention Centre. In my
view, the respondents' version that they are not in occupation of
the
Convention Centre, but that the entity known as the MSCC is·
in occupation, is implausible and untenable. MSCC is merely
the
trading name of the second respondent. Accordingly, I find that the
respondents are the entities that are currently in occupation
of the
Convention Centre.
APPLICABLE
LAW - EVICTIONS AND TACIT AGREEMENTS:-
32.
In
Chetty
v Naidoo
[5]
,
Jansen
JA articulated the position with regard to evictions as follows:-
''It is inherent
in the nature of ownership that possession of the res should normally
be with the owner, and it followed that no
other person may withhold
it from the owner unless he is vested with some right enforceable
against the owner (eg a right of retention
or a contractual right).
The owner, in instituting a rei vindicatio, need therefore do no more
than allege and prove that he is
the owner and that the defendant is
holding the res
-
the onus being on the defendant to allege
and establish any right to continue to hold against the owner.
But if he goes
beyond alleging merely his ownership and the defendant being in
possession (whether unqualified or described as "unlawful"
or "against his will, other considerations come into play. If he
concedes in his particulars of claim that the defendant has
an
existing right to hold (eg by conceding a lease or a hire purchase
agreement, without also alleging that it has been terminated:
his
statement of claim obviously discloses no cause of action. If he does
not concede an existing right to hold, but nevertheless
says that a
right to hold now would have existed but for a termination which has
taken place, then ex facie the statement of claim
he must at least
prove the termination, which might, in the case of a contract, also
entail proof of the terms of the contract.
"
33. In
an application for eviction, an applicant only needs to aver that it
is the owner
of the premises and that the respondent is in
occupation. The unlawfulness of occupation is presumed in the absence
of an admitted
right to occupy. However, as soon as the applicant
claims the termination of a previously admitted right to occupy, on
which right
the respondent relies, the
onus
rests on the
applicant to prove that such right has been terminated.
34.
In
Nedcor
Bank Limited v Withenshaw Properties (Pty) Ltd and Another
[6]
,
Van
Zyl, with whom Meer AJ concurred, articulated the requirements of a
tacit agreement, with reference to cases decided by the
Appellate
Division in the following terms:-
“
An implied
agreement can come into existence only if there has been a tacit
acceptance of a tacit offer. The offer and acceptance,
indicating
unqualified consensus ad idem on all essential aspects of the
agreement, must clearly and unequivocally be inferred
from the
parties. It must, in accordance with what has been described as the
'traditional' approach, in fact be the only reasonable
inference that
can be drawn from such conduct See in this regard the dictum of
Corbett JA in Standard Bank of South Africa Ltd
and Another v Ocean
Commodities Inc and Others
[7]
:-
'In order to
establish a tacit contract it is necessary to show, by a
preponderance of probabilities, unequivocal conduct which
is capable
of no other reasonable interpretation than that the parties intended
to, and did in fact, contract on the terms alleged
It must be proved
that there was in fact concensus ad idem.'
Corbett JA
adopted a somewhat less stringent approach in Joel Melamet and
Hurwitz v Cleveland Estates (Pty) Ltd; Joel E Melamed
and Hurwitz v
Varner Investments (Pty) Ltd
[8]
:-
'In this
connection it is stated that a court may hold that a tacit contract
has been established where, by a process of inference,
it concludes
that the most plausible probable conclusion from all the relevant
proved facts and circumstances is that a contract
came into
existence......
"'
35. The
respondents contend that the MSCC occupies the Convention Centre
through
a tacit agreement concluded between the NCEDA and the MSCC
(and not between the respondents and the NCEDA).
36. Initially
the respondents' defence, as proffered by them in a letter dated, 27
August 2014, were that
"they had a legal right to manage the
Convention Centre since the NCEDA had verbally committed to them to
award a fixed term
management appointment for a period of at least
one year consequent upon the completion of necessary tender
processes.
"
37. In
view of Mr Ncgancisa's concession, a tacit agreement was concluded
between the NCEDA
and the joint venture after the termination of the
service level agreement, which tacit agreement was terminated on 28
July 2014.
38. The
respondents contend that the conduct of the Government Departments in
hiring the
Convention Centre, as well as the bridging finance
provided by the Office of the Premier to the respondents, have all
the manifestations
of conduct that are unequivocally consistent with
consensus between the NCEDA and MSCC on the management of the
Convention Centre.
39. I
am not persuaded that a tacit agreement was concluded between the
NCEDA and
the MSCC in respect of the period after 28 July 2014, for
the following reasons:-
39.1
The
service level agreement expressly provided for its termination by the
effluxion of time. In the absence of any further extension,
the
service level agreement terminated by effluxion of time on 31 October
2012;
39.2
The
applicants terminated the respondents' right to occupy the Convention
Centre on 28 July 2014 when it served the respondents
with a notice
of eviction;
39.3
The
conduct of the "other departments" is not relevant in
determining whether consensus should be inferred;
39.4
The
respondents do not prove that the bridging finance was provided on
the instructions of or at the request of NCEDA. In my view,
the
provision of finance by the Office of the Premier cannot demonstrate
NCEDA's intention to be bound by an alleged tacit agreement;
39.5
During
November 2014, the applicants brought an urgent application for an
order evicting the respondents from the Convention Centre.
That
application was, however, dismissed for lack of urgency; and
39.6
During
June 2015, the applicants launched a further application in this
Court to have the respondents evicted from the Convention
Centre. The
respondents objected to the second application on the ground that the
"urgent application", which had been
dismissed for want of
urgency, was still pending.
40. In
my view, the above facts are not any manifestation of conduct that is
unequivocally
consistent with the intention of the applicants to
allow the respondents or the MSCC to occupy the Convention Centre and
do not
support the existence of a tacit agreement.
RELIEF
REQUESTED IN PRAYERS 4. 5 AND 5.1:-
41. Mr
Ncgangisa relied on the terms of the service level agreement as well
as the provisions
of section 51 of the Public Finance Management Act,
1 of 1999 ("the PFMA''), in support of the applicants' request
for the
granting of the relief in prayers 4, 5 and 5.1 of the notice
of motion.
42. The
service level agreement specifically requires that the joint venture
shall provide
a full monthly account and report on the management,
which should include a financial analysis of income generated and
expenses
incurred.
43.
Section 51 of the PFMA states that:-
"(1)
An accounting authority for a public entity-
(b)
must take effective and appropriate steps to-
(i)
collect all revenue due to the public entity concerned;
and
(c)
is responsible for the management, including the
safe-guarding, of the assets and for the management of the revenue,
expenditure
and liabilities of the public entity;..
"
44. Mr
Van Aswegen argued that the provisions of the PFMA are not applicable
as the
joint venture and the close corporation are not public
entities. He added that the applicants failed to make out a case for
the
relief set out in prayers 4, 5 and 5.1.
45.
According
to the applicants, the monthly reports and accounts were demanded
from the respondents and, despite the demand, the respondents
failed
to render the accounts. In my view, the respondents failed to
adequately address this aspect in their answering affidavit.
In
addition, the applicants dealt with the provisions of the PFMA in
paragraphs 81 and 82 of the founding affidavit. I am therefore
not
persuaded by Mr Van Aswegen's argument.
WHEREFORE I MAKE THE
FOLLOWING ORDERS:-
1.
The
agreement between the parties is cancelled;
2.
The
cancellation of the service level agreement, concluded on 02 May 2012
between the Northern Cape Economic Development, Trade
and Investment
Promotion Agency and Umfana Business Enterprises CC and Silver
Solutions 1069 CC trading as International Conventions
Solutions JV,
dated 28 July 2012, is valid;
3.
The
respondents, Umfana Business Enterprise CC and Silver Solutions CC JV
and International Convention Solutions CC, are evicted
from the
second applicant's premises situated at Mittah Seperepere
International Convention Centre 10 West Circular Road, Kimberley,
Northern Cape;
4.
The
respondents shall vacate the Mittah Seperepere International
Convention Centre 10 West Circular Road, Kimberley, Northern Cape,
within 30 (thirty) calendar days of the granting of this order;
5.
The
respondents are ordered to furnish the applicants with a statement
and a debatement of account in respect of the respondents'
management
of the Convention Centre, within 30 (thirty) calendar days of the
granting of this order;
6.
The
respondents shall grant the applicants access to information on the
revenues generated and venue hire of the Convention Centre
and
related expenses by the Convention Centre for auditing by the
Auditor General, within 30 (thirty) calendar days of the
granting of this order;
7.
The
respondents shall submit their financial books for auditing by the
Auditor-General to the second applicant, within 30 (thirty)
calendar
days of the granting of this order; and
8.
The
respondents shall pay the costs of the application on a party and
party scale.
A
STANTON
ACTING
JUDGE
Northern Cape Division, Kimberley
On
behalf of Applicant:
Adv G Ngcangisa (State Attorney)
On
behalf of First Respondent
:
Adv W A Aswagen (Duncan & Rothman
Attorneys)
[1]
[2014] JOL 31969
(ECP) PAGE 8 AT PARA 21
[2]
[1984] ZASCA 51
;
1984 (3) SA 623
(A} AT 624 G-H
[3]
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) AT PARA 26
[4]
2000 JOL 7117
(C) AT PAGE 17
[5]
1974 (3) 13 (A) AT 208-D
[6]
2002 (6) SA 236
(C) AT PARAS 30 AND 31
[7]
1983 (1) SA 276
(A) AT 2928
[8]
1984 {3) SA 155 {A) AT 165 B-C