About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2015
>>
[2015] ZAFSHC 148
|
|
Aurus Capital (Pty) Ltd v Matjhabeng Municipality (2962/2015) [2015] ZAFSHC 148 (6 August 2015)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF
SOUTH AFRICA
Case
No. : 2962/2015
In
the matter between:-
AURUS
CAPITAL (PTY)
lTD
Applicant
and
MATJHABENG
LOCAL
MUNICIPALITY
Respondent
HEARD
ON:
30
JULY 2015
JUDGMENT
BY:
KRUGER,
J
DELIVERED
ON:
6
AUGUST 2015
[1]
This is the extended return day of a rule nisi issued on 26 June
2015:
“
2.
A
rule
nisi
is issued, returnable on Thursday, 23 July 2015 at 9h30 or as soon
thereafter as the applicant’s counsel may be heard, calling
upon the respondent to show cause why the following order should not
be granted as final relief, to wit:
2.1 The
respondent be ordered to comply with its obligations in terms of the
contract entered into between it
and the applicant or 3 March 2015;
2.2
That the respondent be interdicted and restrained from, directly or
indirectly, preventing the applicant from
performing or hindering the
applicant in the execution and performance of its obligations in
terms of the contract between the
parties referred to in paragraph
2.1 above;
2.3
That the respondent be interdicted and restrained from, directly or
indirectly, preventing or interfering
with the applicant’s
access to and removal of sewerage from the area adjacent to the
Thabong Waste Water Treatment Works,
identified in the papers as the
dumpsite;
2.4
That the respondent pays the costs of the application on the scale as
between attorney and client;
3.
The relief in paragraph 2.1, 2.2 and 2.3 operate as
rule
nisi
with immediate interim effect pending the finalisation of this
application.”
[2]
The applicant’s case is that it has a contract, partly written
and partly oral, in terms whereof it cleans digesters at
the Thabong,
Witpan and Theronia sewer treatment plants and designated adjacent
areas where sewerage spills and dumping have taken
place, without
charge to the respondent for a fixed term from 5 March 2015 to 31
August 2015. The respondent’s case
is that no contract
was entered into between the parties, all that happened was that
applicant was granted permission to clean
the digesters, as is stated
in the response of the respondent to the proposal. The
respondent has now withdrawn that permission
as it was entitled to
do. Respondent says the applicant never got any rights.
[3]
As background it can be mentioned that the actions of the applicant
were caused by the fact that the sewerage system of the
respondent is
not functioning properly. The digesters which are intended to
chemically purify sewerage are overloaded or
blocked, and there are
vast areas of sewerage spill adjacent to the digesters at the three
sewerage works of the respondent in
question, namely at Thabong,
Witpan and Theronia. Applicant gives considerable detail in the
founding affidavit of how the
sewerage system is supposed to work and
its present state, which caused the applicant to make a proposal to
the respondent to clean
the digesters and clear the adjacent areas,
as set out in the proposal and the later oral agreement with the
Municipal Manager.
[4]
In the founding affidavit the applicant gives details of the
respondent’s inability to conduct its sewerage operations
and
how health hazards are created. It sets out how Zama Zamas
(illegal miners) work in the untreated sewerage and break
sewerage
pipes in their endeavour to find gold which has come into the
sewerage deposits. The applicant’s return lies
in the
ability to sell the sewerage that is removed. It has entered
into a contract with Mintel Gold SA (Pty) Ltd to whom
applicant must
deliver pre-estimated tonnages of sewerage on a daily basis. The
digesters will be drained relieving pressure
on the sewerage system.
[5]
The applicant made a proposal to the respondent in the following
terms:
“
Proposal
for Thabong sewerage systems
To
Whom It May Concern (Matjhabeng Local Municipality)
I
Jacques
Olckers
propose for the cleaning and rehabilitation of
Thabong
,
Witpan
and
Therona
Sewers. (Site next to Thabong sewerage system)
Within
this proposal I
Jacques
Olckers
confirm to clean and rehabilitate these sewer sites without any cost
to the
Municipality
of
Matjhabeng
.
The
sites to be cleaned and rehabilitated can be supervised by the
Matjhabeng
plant operators at all times.
All
sites worked on will definitely be left at the state original
environment was found in.
My
company will be expected to be on site
16
February 2015
for a period of and not exceeding
31
August 2018
.
Regards
Jacques Olckers
[……………]
”
[6]
The following response was received dated 3 March 2015:
“
CLEANING
OF DIGESTERS AT THABONG, WITPAN AND THERONA SEWER TREATMENT PLANTS
Permission
is hereby granted as per proposal for the cleaning of Digesters at
the above-mentioned sewer treatment works of the Municipality.
You will conduct your activities under the supervision of the
municipal plant operators at all times. All access and other
ad-hoc arrangements must be handled through the operator for the
specific plant.
Matjhabeng
Municipality will not be liable for any liabilities, costs or arising
as a result of your activities on site. It
will be also be
expected that where the environment is affected, it shall be
rehabilitated to its original state.
Your
Company is expected to be on site as from 05 March 2015 for a period
not exceeding 31 August 2015. Your duration on site
shall be
subject to the continued approval by the Acting Executive Director
Infrastructure or the Executive Director/Municipal
Manager should you
not complete the scope as set above.
YOURS
FAITHFULLY
.......................
MAKOFANE T.
ACTING
EXECUTIVE DIRECTOR: INFRASTRUCTURE”
[7]
There was a meeting on site on 7 April 2015 attended by Mr Mzweli
(the then Acting Municipal Manager), Mr Kghotso Menyatso (the
Member
of the Mayoral Committee responsible for infrastructure), Mr Jan
Hendrik Blom (Acting Senior Manager (Civil) of the respondent)
and Mr
Olckers on behalf of the applicant. At that site meeting Mr Mzweli
requested a copy of applicant’s letter of appointment,
which
was handed to him. According to the affidavit of Blom, which is
attached to the applicant’s replying affidavit,
Mzweli was
satisfied that the applicant proceed with the cleaning of the area
adjacent to the digesters, and he consented that
the applicant
proceed as intended. Blom makes it clear that the version put
up by the respondents is untenable. Blom
works for the
respondent and was present when the applicant was given the right to
proceed cleaning the dump-sites adjacent to
the digesters. This
is the part of the agreement that was not in writing. The
persons who in the answering affidavit
deny that such agreement was
made on site were not present when that agreement was made. The
applicant’s version must
be accepted. This is the oral
part of the agreement upon which the applicant relies.
[8]
The applicant sets out the terms of the agreement in paragraph 109 of
the founding affidavit:
“
109.
The respondent and applicant therefore entered into and concluded a
partly written and partly oral agreement at
Welkom on 3 March 2015 of
which the express, alternatively salient, alternatively implied terms
are as follows:
109.1
The applicant is granted permission to, as per its proposal, clean
digesters at the Thabong, Witpan and
Theronia sewer treatment plants
and designated areas where sewerage spills and dumping has taken
place.
109.2
The activities are conducted under supervision of the municipal plant
operators whom are also responsible
for access and ad hoc
arrangements.
109.3
The respondent shall not be liable for any liabilities of costs
arising out of the activities on site, in
other words the respondent
does not pay the applicant for the services rendered
109.4
The applicant must, where the environment is affected, rehabilitate
the environment to its original state
which includes the cleaning up
of the sewerage dump site identified. The Court will appreciate
that the applicant will rehabilitate
the environment, although the
removal of the raw sewerage from the environment is in itself already
rehabilitatory in nature.
109.5
The contract is for the fixed term, with date of inception 5 March
2015 and date of expiry 31 August 2015.”
[9]
In interpreting a contact which is partly written and partly oral, a
court can have regard to the subsequent conduct of the
parties in
implementing the contract (
Comwezi
Security Services (Pty) Ltd v Cape Empowerment Trust Limited
2012 JDR 1734 (SCA) par [15]). In this case the Municipal
Manager on site on 7 April, a month after the applicant had started
work on site, and more than a month before the notice of termination,
approved of the work being done by the applicant. This
conduct
supports the allegations by the applicant as to the nature of the
contract. In order to execute its mandate applicant
has already
spent half a million rand to acquire plant. The applicant is
using 22 trucks.
[10]
On 19 Jun 2015 Mr T Makofane, in his capacity as Acting Director:
Infrastructure wrote the following letter, which
was given to Mr
Olckers on 20 June 2015, and which letter precipitated the urgent
application on 26 June 2015, when the
rule
nisi
was issued:
“
Dear
Sir
The
matter identified in this letter bears reference.
I have
given consent for your company to clean our water and waste water
pipe-works without due regard to the impact on our environment
when I
acted in the Department of Infrastructure in Matjhabeng Local
Municipality.
This
letter therefore serves to notify you that I am withdrawing my
consent for you to continue cleaning the municipal pipe-works
with
immediate effect. All activities that are conducted as a result
of your request and the consent given therefore must
stop
immediately.
I hope
you will find the above matter to be in order.
Regards,
______________
Mr. T. Makofane
Executive Director:
Strategic Support Services
Signed
the letter as Acting Director: Infrastructure”
Vagueness
[11]
Mr Reinders, on behalf of the respondent, says the crux of the matter
is whether the applicant and the respondent have entered
into an
agreement on the terms and conditions set out by the applicant. The
respondent contends that the order to be confirmed
is vague and
cannot be made an order of court. The deponent to the answering
affidavit says the order in paragraphs 2.1 and
2.2 is cast in general
terms, and the respondent does not know what its obligations are.
The deponent says the order does
not specify how the respondent
should refrain from allowing the applicant to clean the digesters.
Respondent’s case
is that applicant is not entitled to an
order interdicting the respondent from directly or indirectly
preventing or interfering
with the applicant’s access to and
the removal of sewerage from the area adjacent to the Thabong
Sewerage Works.
[12]
Mr Reinders says at best applicant has an agreement to agree, as
contemplated in
Lambons
(Edms) Bpk v BMW (Suid-Afrika) (Edms) Bpk
[1997] ZASCA 51
;
1997 (4) SA 141
(SCA). In the
Lambons
case the trial court found that the plaintiff did not prove that the
statements that had been made by a person constituted an offer
with
the intent that if accepted, an enforceable contract would come into
being (at 149C-D). Mr Reinders says the applicant
merely got
permission, it obtained no contractual rights. In the
Lambons
case the evidence was that after the date of the statements on 28
January 1993, the parties had the intention to negotiate the
terms of
the standard contract (153C-E). In the present case the
applicant immediately started to execute its mandate on
5 March, the
date given in the proposal, and the terms were modified in the oral
agreement with the Municipal Manger on site on
7 April 2015. The
facts of the
Lambons
case differ from the present facts.
Authority
[13]
Mr Reinders contends that the applicant did not prove that the person
who concluded the agreement had the authority
to conclude it with
reference to
Glofinco
v Absa Bank Limited t/a United Bank
2002 (6) SA 470
(SCA) and
Absa
Bank Limited v Arif and Another
2014 (2) SA 466
(SCA). Mr Snellenburg, for applicant, says the
applicant does not know the powers of the various officials of the
respondent,
and is not aware of the various delegations that may
exist. In the answering affidavit the deponent says that when
the respondent
enters into agreements, it does so by at least
entering into a written service level agreement. No resolution
was taken to
enter not such agreement. Where there has not been
proper consent or a resolution, Mr Reinders says a jurisdictional
fact
to create liability is absent, and the agreement is invalid
ab
initio
,
with reference to
Ferndale
Crossroads Share Block (Pty) Ltd and Others v Johannesburg
Metropolitan Municipality and Others
2011 (1) SA 24
(SCA) par [22]. In the
Ferndale
case the court dealt with the letting of immovable property, which is
expressly covered by section 79(18)(b) of the Local Government
Ordinance 17 of 1939. In the present case there is no
legislative provision expressly covering the work done by the
applicant
at no cost to the respondent.
[14]
In argument Mr Reinders conceded that the respondent can also enter
into oral agreements. He referred to the
Local Government:
Municipal Systems Act 32 of 2000
and to the
Local Government:
Municipal Finance Management Act 56 of 2003
. Chapter 8 of Act
32 of 2000 deals with the provision of municipal services.
Section 83 details competitive bidding.
With reference to
Clur
v Keil and Others
2012 (3) SA 50
(ECG) at pars [13] and [14] Mr Reinders says that
employees of government can only perform functions authorised by the
empowering
provision, with reference to
The
Monastery Diamond Mining Corporation (Edms) Bpk v Schimper
en Andere
1983 (3) SA 538
(O) at 549B-F. Municipal employees may exercise
no power and perform no function beyond that conferred upon them by
law (
Clur
at par [14]). The question is whether Mr Makofane, in his
capacity as Acting Director: Infrastructure and Mr Mzweli, the
Acting
municipal Manager on 7 April 2015, had the authority to allow
applicant contractually to do the work in terms of the permission.
[15]
The need for proper controls when the spending of public funds is
involved is important, and many such controls can be found
in the
statutes dealing with municipal finance. The important point to
bear in mind the present case is that the contract
on which the
applicant relies imposes no financial burden on the respondent. The
respondent can supervise the works. The
proposal states that
the work is to be done at no cost to the municipality. If it
had been the case of the municipality that
it has now appeared that
this is a very lucrative business, and that the work can be put out
on tender, and the municipality can
possibly make some money out of
selling sewerage, one would have expected the letter of cancellation
and the answering affidavit
to say that. On the contrary, the
reason given for the cancellation in the letter dated 19 June is that
the person who signed
to consent did not give due regard to the
impact on the environment. There is no allegation in the
cancellation letter that
the work done by the applicant has had a
detrimental effect on the environment. There is also no such
allegation in the answering
affidavit.
Conclusions
[16]
An important consideration in this matter is to look at the parties
who were involved:
(i)
The proposal was done by Olckers on behalf of applicant.
(ii)
The permission is granted by Mr T Makofane in his capacity as Acting
Executive Director: Infrastructure.
(iii)
At the oral part of the agreement on which the applicant relies, Mr
Mzwali (the Acting Municipal Manager) and
Kgotso Mnyatso (Member of
the Mayoral Committee) and Blom (Acting Senior Manager of the
respondent) were present, as well as Olckers.
[17]
As to the Opposed Motion:
The
founding affidavit is signed by Olckers, who as involved at every
stage.
The
Answering affidavit is made by Mr Lepheana (Municipal Manager)
with a supporting affidavit by Tumelo Makofane (Executive
Director:
Strategic Services).
At the
replying affidavit a supporting affidavit is made by Blom (Acting
Senior Manager (civil)) at the Respondent.
[18]
Not one of the three persons who represented the respondent on site
on 7 April 2015, mentioned in par 15 (iii) above made any
affidavits
on behalf of respondent. Mr Lepheana, who makes the answering
affidavit of the respondent, was not involved in
the signing of the
permission, or on site on 7 April 2015. He can have no personal
knowledge of the negotiations and agreements
between Olckers and the
respondent’s employees. These being motion proceedings,
one has to accept the version of the
applicant in so far as not
denied by the respondent, unless the denials are bald and
far-fetched. Bearing in mind who the
persons involved in the
negotiations and the permission were, and in particular the fact that
Blom, and employee of the respondent
breaks ranks with the respondent
and supports the applicant in the replying affidavit, the finding
must be made that the version
of the respondent must be rejected and
that of the applicant accepted as far as the contract is concerned.
This is particularly
the case with the oral aspect which was
done on 7 April on site. On that version a contract as set out
by the applicant in
paragraph 109 of the founding affidavit came into
being. The respondent has not put up any evidence of any of the
officials
or persons who were involved in the oral part of the
agreement on site on 7 April 2015. The Acting Municipal Manger
was on
7 April satisfied with what applicant was doing. This
agreement imposes no financial burden on the respondent, and no
resolution
or delegation was needed.
[19]
One cannot be blind to the time periods. The respondent was
apparently content to allow the applicant to do the work
from 5 March
up to 19 June, almost half of the agreed term of the contract. Then
the respondent repudiates that agreement for a
reason that has no
basis in the facts, namely that the person who gave the permission,
and who is now withdrawing it, did not consider
an aspect of the
environment. There is no allegation of any breach by the
applicant. The respondent was not entitled to cancel
the contract on
that basis.
[20]
As to the remedy of specific performance sought by the applicants in
this case, there is no reason why such remedy should not
be allowed
(
MEC
for Health, Gauteng v 3P Consulting (Pty) Ltd
2012 (2) SA 542
(SCA) par [33]). The applicant is entitled to
be allowed to do what it was given permission to do. The
applicant has
incurred costs and other contractual obligations, and
should be allowed to continue to do the work. There is no
prejudice
to the respondent. The applicant is assisting the
respondent to do its work, namely to get rid of sewerage, at no cost
to
the respondent.
[21]
The applicant has been granted permission to do the work. In
terms of the permission, quoted above, the applicant does
the work
under the supervision of the municipal plant operators at all times.
The respondent, in the letter of 19 June 2015
seeks to withdraw
that permission, and that is the letter that precipitated the present
application to court. The applicant
does not ask for more than
it had before 19 June 2015. The order must be interpreted as
meaning that the applicant wants
to restore the
status
quo ante
before 19 June 2015.
[22]
The
rule
nisi
is not vague and there is no reason to clarify it. The parties
have been on site for almost the entire period of the contract.
It
is clear from their conduct and the wording of the order that all
that the respondent is obligated to do is to allow the
applicant to
do its work, and to supervise if it deems it necessary.
ORDER
The
Rule
nisi
is confirmed with costs.
_____________
A.
KRUGER, J
On
behalf of Applicant
Adv N Snellenburg
Instructed
by:
Honey Attorneys
BLOEMFONTEIN
On
behalf of Respondent: Adv SJ Reinders
Instructed
by:
Mhlokonya Attorneys
BLOEMFONTEIN
wm/