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[2018] ZANCHC 43
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IFU Training Institute (Pty) Ltd v Mining Qualifications Authority and Another (1464/18) [2018] ZANCHC 43 (27 June 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
Case
number: JA 78/10
Case No: 1464/18
Heard on: 25/06/2018
Delivered on: 27/06/2018
In
the matter between:
IFU TRAINING
INSTITUTE (PTY) LTD
APPLICANT
And
MINING QUALIFICATIONS
AUTHORITY
1
ST
RESPONDENT
SHERIFF OF THE
COURT, JOHANNESBURG NORTH
2
ND
RESPONDENT
JUDGMENT
MAMOSEBO J
Introduction
[1]
This is an urgent application in terms of which the applicant sought
an order in the following terms:
1.
Dispensing with the forms and service provided for in the Rules of
this Court
and disposing of this matter by way of semi-urgency in
terms of Rule 6(12) alternatively 6(11) of the Rules of this Court;
2.
Directing that the order of this Court dated 13 June 2018 (under case
no:
1393/18) be set aside, alternatively, declared as
void;
3.
That the first respondent is directed to comply with the order of
this Court
dated 22 March 2017 under case no: 437/2017, particularly
in that it must make quarterly payments to the applicant as
contemplated
by prayer 3 of the said order;
4.
The first respondent is liable to the applicant for payment of a
quarterly tranche
for the quarter ending 31 March 2018, and, to the
extent necessary, the Service Level Agreement between the parties
concluded on
31 March 2016 is rectified to make provision for tranche
9 to be made on 01 April 2018, and the remaining tranches to follow
the
successive quarters thereafter, commencing with tranche 10 to be
made on 01 July 2018.
5.
The first respondent is liable to pay to the applicant the sum
R3 392 852.93;
6.
The second respondent is directed to forthwith pay over the sum of
R3 392 852.93
to the applicant;
7.
Costs of suit on the scale as between attorney and client as against
the first
respondent.
The
parties
[2]
The applicant is IFU Training Institute (Pty) Ltd (IFU). The first
respondent is the Mining Qualifications Authority, a sector
education
training authority (SETA) responsible for the administration of
skills development programs for the mining and minerals
sector in the
country. The second respondent is the sheriff of the court (sheriff)
for the district of Johannesburg North. The
application is opposed by
the Mining Qualifications Authority.
[3]
The background to this application is necessary. The applicant
applied for and was awarded a tender by the Mining Qualifications
Authority to the total amount of R41 834 040 including
Value Added Tax (VAT). The Mining Qualifications Authority, duly
represented by its then Chief Executive Officer, Mr Sam Seepei and
the applicant duly represented by Ms Yvette Francis, its Chief
Executive Officer, concluded a three year contract, the Service Level
Agreement (SLA) on 30 March 2016. The SLA made provision
for the
payment terms to the applicant as reflected on Annexure B as follows:
3.1
A 30% payment of R12 550 212 was payable as Tranche 1 by 31
March 2016. The amount would cater
for recruitment and selection,
planning, set-up, accommodation, travel, training materials, tools
and property plant equipment
(PPE);
3.2
A 6.3% payment in the amount of R2 662 166.18 as Tranche 2
by 01 July 2016 which will cater
for signed agreements with
employers, learners and MQA, MQA database updated with learners and
programme details, service provider
arrangement for venues and
accommodation, proof of learner induction attendance, report from
project manager and report from service
provider;
3.3
A 6.3% payment in the amount of R2 662 166.18 as Tranche 3
by 01 October 2016 which will cater
for proof of stipend payments,
report from service provider and report from project manager;
3.4
A 6.3% payment in the amount of R2 662 166.18 as Tranche 4
by 02 January 2017 which will cater
for proof of stipend payments,
report from service provider and report from project manager;
3.5
A 6.3% payment of R2 662 166.18 as Tranche 5 by 01 April
2017
which will cater
for proof of stipend payments, report from service provider and
report from project manager;
3.6
A 6.3% payment of R2 662 166.18 as Tranche 6 by 01 July 2017 which
will cater for proof of stipend payments,
report from service
provider and report from project manager;
3.7
A 6.3% payment of R2 662 166.18 as Tranche 7 by 01 October 2017 which
will cater for proof of stipend
payments, report from service
provider and report from project manager;
3.8
A 6.3% payment of R2 662 166.18 as Tranche 8 by 02 January 2018 which
will cater for proof of stipend
payments, report from service
provider and report from project manager;
3.9
A 6.3% payment of R2 662 166.18 as Tranche 9 by 01 July 2018 which
will cater for proof of stipend payments,
report from service
provider and report from project manager;
3.10
A 6.3% payment of R2 662 166.18 as Tranche 10 by 01 October 2018
which will cater for proof of stipend payments,
report from service
provider and report from project manager;
3.11
A 6.3% payment of R2 662 166.18 as Tranche 11 by 02 January 2019
which will cater for proof of stipend payments,
report from service
provider and report from project manager;
3.12
A 3.15% payment of R1 331 083.09 as Tranche 12 by 01 April
2019 which will cater for proof of stipend
payments, report from
service provider and report from project manager;
3.13
A 3.15% payment of R1 331 083.09 as Tranche 13 by 01 May 2019 which
will cater for proof of stipend payments, full
and final close out
report from service provider and full and final close out report from
project manager.
[4]
According to the answering affidavit, the first respondent sought to
terminate the SLA following a report by the Auditor-General
dated 31
March 2016 and discussed with its management on 08 July 2016. The
parties engaged in settlement negotiations to no avail.
The failure
to find one another culminated in the applicant launching an urgent
application in this Court and the parties taking
an order by
agreement under case number 2614/16 on 02 December 2016 with the
terms to the following effect:
“
By agreement between the parties, it is
agreed that:
1.
The respondent [the Mining Qualifications
Authority] is to:
1.1
make immediate payment to the first
applicant of the sum of R2 316 953.29 (two million three
hundred and sixteen thousand
nine hundred and fifty three rand and
twenty nine cents);
1.2
issue and serve its application to review
the award of the tender to the first applicant by no later than 15
December 2016;
1.3
make timeous payment to the first
applicant in terms of the Service Level Agreement on a “cost-only”
basis until such
time as the review application referred to in para
1.2 (including any appeal process) above is finalised and the final
decision
as to the validity of the award of the tender is made
;
1.4
pay the taxed party and party costs of this
application.
2.
The parties agree that this settlement
agreement be made an order of court.” (own emphasis added)
[5]
The applicant alleged that it was supposed to be paid on a quarterly
basis as appearing on the SLA and the April 2018 payment
is omitted
and as averred by Ms Francis, the deponent to the founding affidavit,
the omission was an inadvertent and patent error
considering the
patterns of payment followed in other years. She maintained that
there was no reason for the variance in 2018.
This, she asserted, was
also supported by a telephone conversation and an email between
herself and the first respondent’s
Regional Manager in the
Northern Cape, Mr Masixole Bangeni, who on 10 May 2018 suggested that
she should redraft the payment schedule
reflecting the dates and he
will submit the revised schedule to his legal department.
Despite the fact that she has raised
the issue regarding the error in
the SLA several times the acting Chief Executive Officer, Mr Tebogo
Mmotla, addressed an email
to her dated 29 May 2018 refuting the
existence of an agreement to an amendment of the SLA. The applicant
further argued that the
letter by the first respondent’s CEO is
inconsequential based on the fact that the agreement with Mr
Bangeni about
the error was already in place. In any event,
she continued, the terms of the SLA were superseded by the terms of
the court
order dated 22 March 2017 under case number 437/2017.
[6]
IFU brought a second urgent application on 24 February 2017 under
case number 437/17 demanding payment in the amount of R3 644
596.39
and, inter alia, for the respondents to make its payment in terms of
clause 1.3 of the order granted on 02 December 2016
which is recorded
at para 4 (above).
[7] The aforementioned order by Lever AJ dated 22 March
2017 ordered that:
1.
Within 3 days of this application providing a reasonable explanation
for any
discrepancy in the number of learners still engaged in the
program the respondent is to pay the applicant the
amount
due up to the maximum provided for in tranche 4;
2.
Any invoice not paid in or not fully paid in any particular tranche
may be
rolled over to the next tranche, subject to the total
amount
never exceeding the
R41 million odd being the price
at which the tender was awarded
;
3.
In respect of subsequent quarterly tranches, the applicant will duly
fill in
the details required in the template being annexure TGM5 to
the A.A;
4.
The respondent will pay such costs in such updated template
if it
finds them to
be reasonably and satisfactorily in compliance
with the SLA
and subject to any such judgment
not exceeding the amount due in the relevant tranche;
5.
The respondent is to pay the taxed or agreed party and party costs,
including
the cost of the postponement on 03 March 2017. (emphasis
added)
[8]
The first respondent contended that it has made payments up to
tranche 8. It was however served with a writ of execution on
04 June
2018 whereat the sheriff was ordered to attach and remove its movable
assets to the value of R2 972 755.53 allegedly
comprising
an amount of R2 662 166.00 for tranche 9 and R310 589.53
carried over from previous tranches. The first
respondent vehemently
disputes the queried amount of R310 589.53 and maintains that in
terms of the SLA the next tranche is
due on 01 July 2018. The first
respondent paid the amounts appearing on the writ over to the sheriff
and subsequently also launched
an urgent application to this Court
under case number 1393/18. The Court per Coetzee AJ granted the
following order by agreement:
1.
The forms and service provided for in the rules of this Court are
dispensed with
and the matter is disposed of in an urgent manner as
contemplated by Uniform Rule 6(12);
2.
Pending the final determination of the relief in Part B of the
application –
2.1
the first respondent [sheriff for the jurisdiction of Johannesburg
North] is interdicted
and restrained from transferring encumbering or
in any manner whatsoever dealing with the monies in the sum of
R3 329 852.93
paid over to the first respondent by the
applicant [Mining Qualifications Authority] on 06 June 2018;
3.
The costs of Part A of the application be reserved for determination
with Part
B thereof.
4.
Part B of the application is enrolled on the unopposed roll for 29
June 2018.
[9]
The relief sought in Part B of the application in case number 1393/18
is the following: an order setting aside the writ of execution
issued
out of this Court on or about 28 May 2018 under case number 437/2017
and for any party opposing the application to be ordered
to pay the
costs thereof including the reserved costs in Part A.
The order dated 13 June 2018
[10]
The applicant sought to convince me that I must set aside the order
of this Court dated 13 June 2018 alternatively, declare
it void. Mr
Alli, counsel for the applicant, submitted that the applicant’s
erstwhile attorney, Mr M R Phala, did not carry
out the applicant’s
mandate when he took the order by agreement and there is no basis for
this court to place the yolk on
the applicant. Counsel referred
me to an email by the applicant’s CEO to the attorney which
reads:
“
Good morning
Our
instructions are to oppose the matter in its entirety- both Part A
and Part B. We must oppose that the money remains in the
sheriff’s
account – we do not agree that it must remain there.
Regards.”
[11]
Feedback was provided to the applicant on the same afternoon of 13
June 2018 by its erstwhile attorney that an interim interdict
was
taken by agreement. The founding papers record that the same attorney
met in person with the applicant’s CEO on 17 June
2018 to
explain to the CEO why he had consented to the order. The applicant’s
counsel relied on the following cases to substantiate
its argument
about the erstwhile attorney’s lack of mandate that entitles me
to make a ruling that the order by Coetzee AJ
is void:
Tödt
v Ipser
[1]
,
Toto v Special Investigating Unit and Others
[2]
and
Mogotsi
and Others v Pienaar and Others
[3]
.
[12]
In
Tödt’s
case
,
the order for
eviction was granted by default without a proper service of the
notice of motion to the applicants. In
Toto’s
case a legal
representative had altered information on Resolution 17/1993 and the
Judge granted an order based on that altered information.
In
Mogotsi’s
case
an order was sought declaring void, alternatively, rescinding the
eviction order due to the lack of jurisdiction of the High
Court.
The instructive remarks by Leach J in
Toto
[4]
are apposite
:
“
As
is apparent from what is set out below, the judgment of the Full
Bench of the Transkei High Court, reported as Konyn and others
v
Special Investigating Unit
1999 (1) SA 1001
(THC), is pertinently
relevant to the result of this appeal. It is trite that it is the
duty of a litigating party’s legal
representative to inform the
court of any matter which is material to the issues before court and
of which he is aware –
see for example Schoeman v Thompson
1927
WLD 282
at 283. This Court should always be able to accept and act on
the assurance of a legal representative in any matter it hears and,
in order to deserve this trust, legal representatives must act with
the utmost good faith towards the court – cf Ex parte
Swain
1973 (2) SA 427
(N) at 434. A legal representative who appears in
court is not a mere agent for his client, but has a duty towards the
judiciary
to ensure the efficient and fair administration of justice
– see the remarks of De Villiers JP in Cape Law Society v
Vorster
1949 (3) SA 421
(C) at 425. As was observed by James JP in
Swain’s case (supra), in a passage since followed inter alia in
Society of Advocates
of Natal and another v Merret
1997 (4) SA 374
(N) at 383 and Pienaar v Pienaar en andere
2000 (1) SA 231
(O) at
237, the proper administration of justice could not easily survive if
the professions were not scrupulous of their dealings
with the
court.”
The
above authorities support the assertion that Coetzee AJ had no reason
to doubt that the attorney for the applicant had pertinent
instruction to agree to an order by consent.
[13]
Of importance and what remains inexplicable is that the applicant did
not invite an affidavit from its erstwhile attorney that
would put
the allegations against him in perspective. He is an officer of the
court and it is a risk to his profession. I find
it strange that the
applicant would expect this Court to take its word alone without the
affidavit from the erstwhile attorney.
In any event, there is no
basis for me to set aside the order of this court dated 13 June 2018.
This order was taken by agreement
between the parties and not by
default. It was not erroneously sought or erroneously granted.
There is further no ambiguity
or allegation thereof in the order.
Neither was there a mistake common to the parties. In my view, the
applicant has not made out
a case for the setting aside of this
order. In any event, only Part A thereof was heard and Part B is
still pending. I do not see
how I can set it aside when Part B
thereof must still be argued. I am not persuaded that a case
has been made out on this
aspect.
[14]
Central to the dispute was the allegation by the first respondent
that it does not owe the applicant any money and it is therefore
not
entitled to the money held by the second respondent (the sheriff). It
therefore makes sense as provided for in the order by
agreement that
the challenge to the writ of execution be determined first to
determine to whom must the money be paid.
Compliance with the order dated 22
March 2017 under case number 437/2017
[15]
The applicant’s counsel also submitted that the respondent must
be ordered to comply with the order dated 22 March 2017
by making
quarterly payments to the applicant as contemplated in prayer 3 of
that order. It is clear to me that the Court granting
the order was
mindful of the SLA terms hence its reference to payment not to exceed
the R41 million and that the respondent must
pay costs it finds to be
reasonably and satisfactorily in compliance with the SLA and not
exceeding the amount due in that relevant
tranche. I have not
discerned the basis for the applicant’s CEO to insist on the
omission of the payment of 01 April 2018
because a simple calculation
of the tranches as they appear in Annexure B does not support her
argument. It is also not discernible
on the papers how she can
conclude that the conversation between her and the said Mr Bangeni
was an agreement to cure the purported
omission when Mr Bangeni
suggested that she should reduce into writing what she is referring
to and he will refer it to his legal
department. An agreement is the
meeting of two minds. Clearly, from the reading of his response, one
cannot see any agreement.
[16]
In
Propfokus 49
(Pty) Ltd and others v Wenhandel 4 (Pty) Ltd
[5]
where Van Heerden
JA explained rectification to this effect:
“
In
order to succeed with its claim for rectification, Wenhandel had to
allege and prove the following:
(a)
That an
agreement
had been concluded between the parties and reduced to writing;
(b)
That the written document does not reflect
the true intention of the parties – this requires that the
common continuing intention
of the parties, as it existed at the time
when the agreement was reduced to writing, be established;
(c)
An intention by both parties to reduce the
agreement to writing – in the present case, the agreement was
for the sale of land
and, therefore, had to be in writing in order to
be valid and binding;
(d)
A mistake in drafting the document, which
mistake could have been the result of an intentional act of the other
party or a bona
fide common error; and
(e)
The actual wording of the true agreement.”
Applying
the Plascon-Evans rule, Mr Eillert,
counsel for the first respondent, was correct that rectification
cannot be resolved in urgent
motion proceedings. Price J pronounced
in
Hadiaris v
Freeman and Freeman
[6]
that rectification
should be claimed by action and not by notice of motion or petition.
See also
Christie’s
Law of Contract in South Africa
[7]
.
If
the applicant intended for the contract to be rectified, the process
followed to do so is incorrect.
[17] Clause 25.1 of the SLA
stipulates:
“
Variation,
Cancellation and Waiver
No
contract varying, adding to, deleting from or cancelling this
Agreement, and no waiver of any right under this Agreement, shall
be
effective unless reduced to writing and signed by or on behalf of the
Parties.”
The
applicant has not, in my view, attached any form of document
contemplated by this clause. I therefore find the communication
between the applicant’s CEO and Mr Bangena inadequate for this
purpose.
[18]
In actual fact, the applicant has, in my view, failed to show that
the tranches have not been paid as alleged by the first
respondent
and thereby complying with the order. Instead, they rushed for a writ
in execution for the attachment and removal of
the first respondent’s
movable property. This they did without even serving notice on the
first respondent and one wonders
why that was the case.
Payment of a quarterly tranche
[19]
On face value it seems as if the payments are quarterly. However, on
close scrutiny one needs to pay particular attention to
the specific
dates agreed upon because this agreement was concluded on 30 March
2016. There is clearly no provision for 01 April
2018. It is unclear
what the basis is for the applicant to continue to insist that the
SLA is rectified to make tranche 9 to be
paid on 01 April 2018. A
case has not been made out on the papers for this submission. I am
not convinced that there is a mistake
in respect of the schedule of
payments agreed to. This contract was entered into between the
parties represented by its most senior
officials on both sides, the
Chief Executive Officers. That is not the only reason that makes me
to doubt if there was a mistake
or not, I have calculated the amounts
as reflected in the tranches and they do not seem to make provision
for 01 April 2018.
[20]
The applicant’s counsel placed heavy reliance on the fact that
the applicant’s failure to pay as ordered has prejudiced
the
indigent learners who, as a result of this failure, have not received
their stipend, could not pay for their accommodation.
Counsel
submitted that the applicant cannot afford to pay the stipends and
carry the cost under this contract. It remains inexplicable
however,
why this application had to be heard today when the review
application heard in Gauteng High Court is expected to be handed
down
on 26 June 2018 and the return day for the other application is 29
June 2018. In my view, these applications are interrelated.
It would
have been preferable to have waited for the other matters to be
disposed of to avoid the piecemeal approach. It is therefore
incomprehensible for the applicant’s Counsel to argue that the
review application has no bearing on this case when all these
applications are intertwined and the first respondent agreed to make
timeous payments to the applicant in terms of the SLA on a
“cost-only” basis pending the final determination of the
review application.
[21]
I am empathetic towards the plight of the learners. I urge all the
parties concerned to do their best to protect the interests
of the
learners who are not to blame for this protracted dispute. Our
developing economy can only benefit from the development
of the
skills of the youth and the community in general and lay a solid
foundation for the future of this country.
[22]
Counsel for the first respondent reiterated what was negotiated
before the court started that the first respondent had tendered
an
amount of R414 960.00 which is said to be the monthly costs for
the learner’s portion which was declined by the applicant.
[23]
There remains the question of costs. There is no reason why costs
should not follow the result.
[24]
In the result, the following order is made:
The application is dismissed with
costs.
_____________________
MAMOSEBO J
NORTHERN CAPE DIVISION
For
the appellant:
Adv Y Alli
Instructed
by:
Vally Chagan & Associates
Duncan & Rothman Attorneys
For the first respondent:
Adv A Eillert
Instructed by:
Hogan Lovells
(South Africa) Inc
Engelsman Magabane Inc
[1]
1993(3) SA 577(A) at 589C - D
[2]
[2000] 2 All SA 91
(E) at 105
[3]
2000 (1) SA 577
at 580
[4]
At 100b -e
[5]
[2007] 3 All SA 18
(SCA) at 21g – 22c
[6]
1948 (3) SA 720
(WLD) at 728
[7]
Seventh edition GB Bradfield LexisNexis