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[2015] ZAGPPHC 1031
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Road Freight Association v Chief Fire Officer Emakhazeni and Others (72263/2012) [2015] ZAGPPHC 1031 (17 July 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
NORTH GAUTENG: PRETORIA
CASE NO: 72263/2012
DATE: 17 JULY 2015
In the matter between:
THE ROAD FREIGHT
ASSOCIATION
.........................................................................
APPLICANT
And
CHIEF FIRE OFFICER
EMAKHAZENI
..........................................................
1
ST RESPONDENT
EMAKHAZENI MUNICIPAL FIRE
EMERGENCY SERVICES (PTY)
LTD
..............................................................
2ND
RESPONDENT
EMAKHAZENI LOCAL
MUNICIPALITY
.......................................................
3RD
RESPONDENT
JUDGEMENT
1. In this application the applicant
seeks an order declaring a certain "practice" operated by
the respondents to be unlawful;
an interdict preventing and
restraining the respondents from continuing the said practice; and
for an order granting the applicant
leave to institute a class action
on behalf of its members and others against the respondents holding
each of them jointly and
severally liable for the return of any sums
of money paid to either the second and/or third respondent or to
their attorneys, in
consequence of the said unlawful practice.
2. The first and third respondents
initially opposed the application but withdrew their opposition
shortly before the hearing of
the matter. The second respondent never
opposed the application.
3. The applicant also moved for a
punitive order of costs against the respondents as well as against
the attorneys firm De Klerk
Marais as well as the attorney Mr de
Klerk de bonis propriis. It was agreed at the hearing of the
application that the issue of
costs be postponed sine die.
4. The applicant is a non-profit
company which was established in 1975 to support its members who are
road freight service providers.
It is a facilitating body that
influences the state of industry, roads, the upkeep of road
infrastructure, road safety, freight
security, drivers' interests
cross-border transport, development funding for emergency operators,
health, education, the fuel price,
law enforcement, labour relations
and many other issues related to road freight transport. It has
approximately 750 members who
are small, medium and large sized
trucking companies. The membership comes from all sectors of the
trucking industry that operate
"for reward" as well as
"private" carriers.
5. The first respondent is the Chief
Fire Officer: Emakhazeni Local Municipality who is the person
contemplated in section 5 of
the Fire Brigade Services Act, Act 99 of
1987 ("the Act") and who is the administrative functionary
that performs the
functions detailed in section 8, 9 and 10 of the
Act. The first respondent is the third respondent's Chief Fire
Officer.
6. The second respondent is Emakhazeni
Municipal Fire & Emergency Services (Pty)Ltd, a private company
with its registered office
in Pretoria and which has, or at all
material times had, Mr V. de Klerk, Mr A. Baker and Mr A. Manabile as
its directors.
7. The third respondent is the
Emakhazeni Local Municipality situated in the town of Belfast,
Mpumalanga.
8. It is at the outset necessary to
point out that the second respondent is an indepen¬dent private
company which has nothing
to do with the third respondent as
municipality. In fact, in terms of section 11 (2) (c) of the
Companies Act, Act 71 of 2008,
it is unlawful for a private company
to make use of a name that implies or suggests or may reasonably
mislead a person to believe
incorrectly, that it is a municipal
entity or that it is owned, operated, sponsored, supported or
endorsed by, or enjoys the patronage
of, any government or
administration or any department of such a government or
administration.
9. The present application resulted
from numerous complaints from applicant's members to it resulting
from what they perceived to
be unnecessary, wrong and unlawful
conduct by the third respondent as municipality. The applicant
investigated these complaints
and unravelled what the applicant
referred to as a "practice", i.e., a modus operandi
perpetrated by the second respondent,
as private company, and the
third respondent, as municipality, which was unlawful and which also
constituted a fraud perpetrated
upon the applicant's members.
10. According to the evidence put
forward by the applicant the practice perpetrated by the respondents,
of which the second respondent
was the main dramatus persona,
constituted a fraudulent deception of the public and more
particularly the members of the applicant.
This was done by the
second respondent masquerading as a municipality, or a section of the
municipality, exercising statutory powers
reserved for a municipality
by the Act, and by performing bogus "emergency services"
and then coercively exacting payment
for such "services"
allegedly on behalf of the third respondent as municipality.
11. Before briefly outlining the facts
giving rise to the present application it is necessary to note that
according to the evidence
this particular unlawful practice that
forms the subject matter of this particular application, has begun to
crop up in other local
municipalities as well.
12. As stated before the present
application was launched in response to complaints regarding a
practice adopted by the respondents
in the Belfast area. It may be
briefly summarised as follows: It often happens that at night, after
driving long distances, the
trucks of the members of the applicant
would park off the shoulder of the road or in open areas or at well
illuminated parking
areas near toll plaza's for an hour or two to
enable the driver to rest before continuing with his journey.
Employees of the second
respondent, falsely claiming to be municipal
officials working for the third respondent's fire brigade service,
would then approach
these trucks, wake up the driver and make as if
there existed an emergency situation. They would then begin
performing bogus "emergency
services" which included giving
the driver an alleged "medical examination", surrounding
the truck with all sorts
of paraphernalia, cordoning off the area,
and generally creating the impression that a necessary emergency
service needed to be
performed. After a while the driver was allowed
to proceed on his way.
13. In the days to follow the second
respondent would then send an invoice to the trucking company
involved charging them for "emergency
services" rendered
and further claiming that they were authorised to do so by various
statutory provisions, most notably sections
9 and 10 of the Act. It
is necessary at this point to refer briefly to section 8, 9 and 10 of
the Act.
"8 Powers of members of service
(1) A member of a service of a
controlling authority, including a chief fire officer, may, whenever
he regards it necessary or expedient
in order to perform his
functions, perform any act, and may also-
(a) close any road or street;
(b) enter or break and enter any
premises;
(c) damage, destroy or pull down any
property;
(d) forcibly remove or cause to be
removed from the scene any person who is in danger or who obstructs
that member in the performance
of his duties; and
(e) take material or any object from
any person: Provided that the owner of the material or object so
taken shall be compensated
therefor by the controlling authority
concerned to an amount agreed upon by the controlling authority and
the owner, or in the
absence of such agreement, an amount determined
by arbitration in accordance with the provisions of the Arbitration
Act, 1965 (Act
42 of 1965).
(2) A member of a service of a
controlling authority, including a chief fire officer, may, whenever
he regards it necessary in order
to perform his functions, order any
inhabitant of the Republic who is not younger than 16 years and not
older than 60 years to
assist him in the performance of his functions
on any particular occasion.
Salvaging of movable property
9(1) A chief fire officer may in the
performance of his functions salvage, or remove and place in safe
custody, any movable property
which in his opinion is in danger.
(2) Any costs incurred by or at the
request of a chief fire officer for the purposes contemplated in
subsection (1), may be recovered
from the owner or possessor of the
property in question, and the controlling authority concerned has a
lien on that property for
the payment of those costs.
(3) If the costs referred to in
subsection (2) are not paid within 30 days, or such longer period as
may be determined by the controlling
authority concerned, after that
authority-
(a) served a written request for
payment thereof on the owner or possessor in question; or
(b) if that owner or possessor cannot
be traced, remitted such request by registered post to his last known
address or published
such request in both official languages in a
newspaper circulated in the area concerned,
the controlling authority may sell the
property in question by public auction and shall apply the proceeds
thereof for the defrayal
of those costs, while any balance shall on
application be reimbursed to the owner or possessor in question.
(4) If no application for reimbursement
of the balance is made within one year after the public auction
referred to in subsection
(3), that balance shall be forfeited to the
controlling authority concerned.
(5) A certificate purporting to be
signed by a chief fire officer and in which it is certified that the
costs specified therein
have been incurred for the purposes
contemplated in subsection (1) shall on production thereof in a court
of law be prima facie
proof of the costs referred to in subsection
(2).
(6) If the owner or possessor of
movable property which in terms of subsection (1) has been salvaged
or removed does not claim such
property within 30 days after the
controlling authority has made known in both official languages in a
newspaper circulated in
the area concerned that such property has
been placed in safe custody, that controlling authority may sell the
property concerned
by public auction and apply the proceeds thereof
for the defrayal of any costs incurred while any balance shall be
employed by
the controlling authority in respect of the maintenance
of its service.
10 Fees (1) A controlling authority
may, subject to any condition contemplated in section 11 (2) (a),
determine the fees payable
by a person on whose behalf the service of
the controlling authority is applied-
(a) for the attendance of the service;
(b) for the use of the service and
equipment; or
(c) for any material consumed.
(2) A person on whose behalf, in the
opinion of the chief fire officer concerned, a service of a
controlling authority has been
employed, may in writing be assessed
by that chief fire officer for the payment of the fees referred to in
subsection (1) or any
portion thereof.
(3) Any person who feels aggrieved by
an assessment contemplated in subsection (2) may within 14 days after
receipt of that assessment
object in writing against that assessment
as such or the amount thereof to the controlling authority concerned.
(4) As soon as an objection
contemplated in subsection (3) is received the chief executive
officer of the controlling authority
concerned shall without delay
obtain written comment thereon from the chief fire officer and submit
it together with the objection
to the controlling authority, which
may confirm, alter or revoke the assessment.
(5) A certificate purporting to be
signed by a chief fire officer and in which it is certified that the
assessment specified therein
was made under subsection (2), shall on
production thereof in a court of law be prima facie proof of the
amount payable by the
person mentioned therein."
14. It is thus clear that the second
respondent by its actions assumed the identity of municipal officers
acting within the course
and scope of their duties and with the
required authorisation. The vehicles used by the second respondent
presented with a coat
of arms and the name of the second respondent,
however, without an indication that it was a private company and thus
creating the
impression that it was indeed an official action by the
municipality in question. The paraphernalia used in the process and
the
manner in which the operation was performed, added to this
perception.
15. The applicant received hundreds if
not thousands of complaints from its members. The gist of their
complaint was that this practice
adopted by the respondents is an
improper use of statutory power designed to extort money from them.
Apart from the illegality
of the actions of those concerned, the
common thread running through all the instances was that none of the
trucks actually experienced
an emergency or caused an emergency
situation and that none of the drivers required medical care of any
nature whatsoever.
16. Another communality of the
incidents was the fact that apart from amounts ranging from between
R5 000.00 to R10 000,00 being
claimed from the trucking company
concerned, alleged photographs of the scene were presented which were
not of the particular scene
and which were in fact the same
photographs used in every case. On the evidence it is clear that
these nightly operations was in
fact an unlawful practice perpetrated
by the respondents and more particularly by the second respondent as
the central figure.
17. After the applicant launched the
present application only the first and third respondents opposed the
application but the second
respondent did not do so. The applicant
found this strange as it was, after all, the second respondent who
was central to the manner
in which the practice was implemented. But
what was even more disturbing was that the attorneys firm De Klerk
Marais, and more
particularly Mr de Klerk, acted for the first and
third respondents in opposing the application and filing the opposing
affidavit.
I shall return to this issue below.
18. In the answering affidavit the
third respondent claimed that the second respondent is merely a
private company that performs
"administrative functions to the
municipality". They denied that the second respondent performed
the on-site emergency
services that the trucking companies were
billed for and in fact claimed that the second respondent never even
went out to the
so-called emergency scenes.
19. Further investigations by the
applicant showed, however, that the invoices purportedly sent to the
trucking companies by the
third respondent, were not sent by the
third respondent at all but by the second respondent. The invoices
also required that the
money invoiced be paid directly into a bank
account of the second respondent. Although the second respondent was
never entitled
to receive money or to receive money on behalf of the
third respondent (even if a genuine emergency situation had existed),
and
although the second respondent was not entitled to render any
service under the Act, the invoices created the impression that the
second respondent was entitled to receive the money in terms of the
provisions of the Act. This was thus another fraud perpetrated
against the trucking companies as the second respondent was clearly
masquerading as the municipality. It is therefore not surprising
that
the letterheads of the second respondent used for the correspondence,
omitted the suffix (Pty)Ltd after its name. The clear
inference is
that this was done to deceive members of the public, including
members of the applicant, into thinking that the letter
came from a
municipal department rather than from a private company. The second
respondent was clearly unlawfully extorting money
from the trucking
companies.
20. The so-called emergency services
were not, despite what the third respondent alleged in the answering
affidavit, performed by
the third respondent's Fire Brigade service.
They were performed by the second respondent. In subsequent
affidavits, and more particularly
by the first respondent, it was
denied that he, as the chief fire officer, at any time acted in terms
of the Act and more particularly
section 10 thereof.
21. Investigations by the applicant
also discovered that the attorney, Mr de Klerk, issued summons
against the trucking companies,
apparently on behalf of the third
respondent, for payment of these invoices, whilst Mr de Klerk was
also at all relevant times
a director of the second respondent.
Another attorney of the firm, Mr A. Manabile was also at one point a
director of the second
respondent.
22. The detail of what the applicant
uncovered was described in a very comprehensive supplementary
founding affidavit. The facts
as they unfolded in no way resembled
the facts disclosed in the answering affidavit filed by de Klerk
Marais on behalf of the first
and third respondents. Instead, it
appeared that an elaborate scheme was created by second respondent to
improperly and unlawfully
create the impression that the third
respondent has been exercising a statutory power under the Act
entitling it to payment for
a necessary emergency service performed.
I have already referred to the basic features of this scheme or
practice and it is not
necessary to refer to the report that the
applicant filed in this regard.
23. As could be expected, the
applicant's investigations gained momentum despite the third
respondent's two interlocutory applications
designed to try and keep
the supplementary founding affidavit out of court. These attempts
failed. The supplementary answering
affidavit filed in response to
the supplementary founding affidavit was, however, riddled with
inconsistencies and was exposed
as a fabrication in the replying
affidavit filed by the applicant.
24. Is not necessary to refer to the
lies and inconsistencies which appears from the papers as a whole. I
shall merely refer to
a few salient features. It appeared that the
incident reports and the certificates in respect of the separate
incidents were not
genuine and appeared, instead, simply to be
generic blueprints that were reproduced over and over again. This
supports the evidence
that they were never proper emergency scenes
and that no proper inspections had been done at those scenes but had
indeed been a
hoax. Scenes were staged and documents forged as part
of the fraudulent scheme to exact money from trucking companies. The
third
respondent attempted to rebut this evidence but could not do so
despite being called upon to present the relevant documentation
in
order to do so.
25. From affidavits filed subsequently
on behalf of the first and third respondents it appears that earlier
affidavits were drafted
on their behalf by Mr de Klerk and that they
had signed same without reading it before doing so. They also
referred to facts and
averments that were not within their knowledge
and others which they denied. They accused Mr de Klerk of being the
true architect
of the various untrue versions. As far as the
respective versions of the first and third respondent are concerned,
I need at this
point to merely make two remarks. First of all, I
agree with the submission on behalf of the applicant that it is
hardly likely
that the aforesaid unlawful and illegal practice could
have been perpetrated without the assistance of a person or persons
in the
employ of the third respondent. Secondly, even if the first
respondent and the other high-ranking officials of the third
respondent
had to a degree been duped by Mr de Klerk, it is difficult
to imagine how this could have been done so successfully, and done to
such a late stage of the proceedings, if they had paid but the
slightest of attention to the duties and responsibilities attached
to
their posts.
26. On 11 July 2014 the court granted
an interim anti-dissipation order in respect of a bank account of the
attorneys firm and three
bank accounts of the second respondent. On
the return day the rule nisi was confirmed. The judgment is reported
as Road Freight
Association v De Klerk Marais Inc & Others [2014]
ZAGPPHC 770 (10 October 2014).
27. In summary, apart from the fact
that no emergency situation ever existed and was merely the front
under which the second respondent
acted during its nightly escapades,
it could also not provide such services with or without the
permission of the first or the
second respondents. Its actions were
unlawful and in contravention of the provisions of the Act. The
manner in which payment for
the "service" was exacted from
the members of the applicant was similarly fraudulent and in
contravention of the relevant
statutory provisions.
28. In paragraph 3 of the amended
Notice of Motion the applicant asks for leave to institute a class
action on behalf of its members
against the first, second and third
respondents holding each of them jointly and severally liable for the
return of any sums of
money paid to either the second or third
respondents or to the attorneys, De Klerk Marais Inc, in consequence
of the unlawful practice
referred to above and in the founding
affidavit. In support for this relief I was referred to a number of
decisions including the
one of J.P.H. Pretorius and another v
Transnet Second Defined Benefit Fund and others, (GDP) Case nr.
25095/13 (31/7/14) per Makgoba
J.
29. The causes of action envisaged for
the refund of the money due to the members of the applicant are that
of fraud and one or
more of the condictiones. In my view these causes
of action would provide members of the public, such as is the case in
casu, with
a claim for a refund in circumstances where money was
unlawfully exacted under an impermissible exercise of public power. I
am
satisfied that such a claim would serve to protect the
constitutional rights of the applicant's members for the reason that
any
exercise of public power, including a statutory power, is always
a constitutional matter as is the exercising of any power by or
on
behalf of an organ of state. To that end the applicant has standing
under section 38 (e) of the Constitution.
30. A court ought to certify a class
action if it is in the interest of justice to do so. In the instant
case I am satisfied that
such certification would be in the interest
of justice. The class for which the applicant intends to act, has
identifiable members
and the causes of action referred to above raise
triable issues. The issues of law and fact which might arise appear
to be common.
The applicant is the most suitable class
representative.
31. At this point it is unclear which
of the members of the applicant have paid monies to the second
respondent and/or the third
respondent. These factors will become
apparent through the discovery process when the funds collected by
these entities
are traced. As far as the quantum of
the claim is concerned, the amount cannot at this stage be
determined. Due to the peculiar
circumstances of this case I am
satisfied that an order similar to the one made by Makgoba J in the
Pretorius matter should be
made.
32. I have already mentioned that the
issue of the costs of this application shall be postponed sine die.
33. In the result the following order
is made:
1. Regarding the respondents'
"practice" (described more fully in the founding affidavit)
of invoking the provisions of
sections 1, 9 and 10 of the Fire
Brigade Services Act, Act 99 of 1987 of
charging a fee to trucking companies for the purported performance of
"primary incident
management services" and
"scene safety services" in
the manner described and in the circumstances articulated in the four
illustrative case studies
(described more fully in the founding
affidavit):
1.1 it is declared that such "practice"
is unlawful; and
1.2 the respondents are interdicted
from continuing the said "practice".
2. Subject to paragraphs 3 and 4 below,
the applicant is hereby granted leave to institute a class action
under section 38 (c) and/or
(e) of the Constitution of the Republic
of South Africa on behalf of its members against the first, second
and third respondents
holding each of them jointly and severally
liable for the return of any sums of money paid to either the second
or third respondent
or to their attorneys, De Klerk Marais Inc,
in consequence of the unlawful
"practice" referred to in the previous paragraph and in the
founding affidavit.
3. Save for the applicant's members who
elect to "opt out" of the class action certified in
paragraph 2 above, the applicant
is hereby permitted to act as the
representative of all of its members.
4. The applicant is also permitted to
act as the representative of all trucking companies who are not its
members but who nevertheless
elect to "opt in" to the class
action certified in paragraph 2 above.
5. The second and third respondents are
hereby directed to furnish the applicant's legal representative
within 30 days of date of
this order the full details of all amounts
paid to them by trucking companies pursuant to the aforesaid
"practice" which
details must include the name of each and
every trucking company that paid money, the amount paid by each
trucking company, the
bank account into which such money was paid,
the date upon which such money was paid, an indication whether such
payment was made
pursuant to an invoice by the second and/or third
respondents or a letter of demand issued by either of them or their
attorneys
or consequent upon the institution of legal proceedings
brought by their attorneys on their behalf.
6. The applicant is ordered to give
notice to its members by e-mail and/or e-mailed publication in a
newsletter distributed to all
of its members of the proposed class
action certified in paragraph 2 above, advising them that they may
elect to "opt out"
of the said class action.
7. The applicant is ordered to give
notice to the broader class of trucking companies which paid money to
either the second or third
respondents or their attorneys pursuant to
the aforesaid unlawful "practice" so that they may elect to
"opt in"
to the aforesaid class action, such notice to be
given by publication once in the Sunday Times newspaper in English
and once in
the Rapport newspaper in Afrikaans and once in the City
Press newspaper in Xhosa and Zulu and once in the Soweton newspaper
in
Setswana, Sesotho and Zulu.
8. Publication of the aforesaid class
action as referred to in paragraphs 6 and 7 above shall include a
summary of the relief sought
against the respondents/defendants and
others together with full details of the applicant's attorneys of
record
9. The applicant is ordered to file an
affidavit with the Court within 30 days of receiving the details
referred to in paragraph
5 above as furnished by the second and third
respondents and their attorneys, confirming to the Court that there
has been compliance
by the respondents and their attorneys and also
that there has been compliance with the publication requirements
referred to in
paragraphs 6, 7 and 8 above.
10. The applicant is ordered to
institute the class action certified in paragraph 2 above within 30
days from the date of filing
the affidavits referred to in paragraph
9 above.
11. The issue of costs is postponed
sine die.
C.P. RABIE
JUDGE OF THE HIGH COURT