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[2015] ZAFSHC 153
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Mosebo and Another v Mangaung Metropolitan Municipality (840/2015) [2015] ZAFSHC 153 (7 August 2015)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case Number: 840/2015
In the matter between:
TISETSO PETRUS
MOSEBO
1
st
Applicant
RTK ADVISORY CENTRE
CC
2
nd
Applicant
and
MANGAUNG METROPOLITAN
MUNICIPALITY
Respondent
JUDGMENT
BY:
MOCUMIE, J
HEARD ON
:
4
JUNE 2015
DELIVERED ON:
7
AUGUST 2015
Mocumie, J
[1] The applicants apply
for an order in the following terms:
‘
(a) That the respondent refund
the applicants in the amount of R402 188.00 within 14(fourteen) days
of date of this order.
(b) That the respondent
pays the costs of the application on an attorney and client scale.
(c) Further and/or alternative
relief.’
[2] The essential facts
of this matter are to a large extent common cause. The salient facts
are as follows. The first applicant
is a businessman in Bloemfontein,
Free State and the sole member of the second applicant, RTK Advisory
Centre Close Corporation
(RTK) registered in terms of the laws of the
Republic of South Africa. The respondent is the Mangaung Metropolitan
Municipality
(the municipality), a municipality established in terms
of the provisions of
s12
of the
Local Government: Municipal
Structures Act, 117 of 1998
, with its administrative head office
situated at Bram Fischer Building, Bloemfontein, Free State Province.
[3] In the founding
affidavit the deponent, Mr Tisetso Petrus Mosebo (Mosebo), averred
that during June 2013 RTK decided to invest
in property. Mr Jaco
Rothman (Rothman) of Rothman Attorneys, RTK’s attorney,
performed a deed search in Lourier Park Bloemfontein
and identified
two empty ervens situated there; Erf 22519 and Erf 22520.Rothman
approached the municipality on behalf of RTK and
requested the
purchase price of the properties. He also applied for clearance
figures from the municipality. The request was submitted
to the
clearance division of the municipality’s Finance Directorate
and Centlec, the official electricity supplier.
[1]
Draft Deeds of Sale of both properties were also submitted for
the municipality’s consideration.
[4] During July 2013,
Rothman was informed that the purchase price of the properties was
obtained and that the clearance certificates
were available. The
valuation price for Erf 22519 was R196 460 .The valuation price of
Erf 22520 was R184 704. Some alterations
were subsequently made
to the amounts provided. But those alterations are of no moment.
[5] On 27 May 2014
Rothman paid an amount of R208 248 in respect of erf 22519 and R193
940 in respect of erf 22520. On 4 August
2014 the municipality issued
a certificate in respect of erf 22520.However, no clearance
certificate was issued in respect of erf
22519. Rothman thereafter
made the necessary arrangements to transfer erf 22520 into the second
applicant’s names. On 13
June 2014 Rothman was informed that
the documents were not signed because the properties in issue had
been promised to someone
else prior to RTK’s offer to purchase
the properties concerned. Thus they could not be sold to RTK. As a
result, on 22 October
2014 Rothman requested a refund of the money,
R403 188 and he received no response from the municipality. On 11
November 2014 Rothman
attorneys again requested the refund of the
applicant’s monies. The municipality ignored this letter.
[6] Rothman subsequently
engaged the municipality’s property management unit and
interacted with the General Manager of the
unit, Mr Nelson Mofokeng
(Mofokeng), who informed him that he, Mofokeng,
‘deemed
the transaction in terms of which the applicant had proposed to
purchase the properties and paid over the purchase
price to the
respondent to be fraudulent in nature and that this matter [was to]
be investigated.’
The application was, as a
result, referred to the municipality’s Legal Division. Rothman
pursued the matter with the municipality’s
Legal Division until
the unit referred him to the Chief Financial Officer because the
money had been paid to the latter as the
municipality’s
financial officer and retained by him.
[7] It is common cause
between the parties or at least not seriously disputed by the
municipality that RTK through Rothman paid
the money into the
municipality’s account on the basis of a purported agreement of
sale of two properties. It is further
common cause that the
municipality informed the applicants that no such agreement came into
existence nor could it because the
land was already promised to
someone else prior to the purported sale between it and the
applicants. Thus the agreement was void
ab
initio
.
[8] The main issue to be
determined is whether the municipality is entitled to keep the money
deposited into its account by RTK
or Rothman.
[9] The case for the
applicants is simple. RTK paid R402 188 and R208 248 into the
municipality’s account for the purchase
of erf 22519 and R193
940 in respect of erf 22520. The agreement was based on a purported
sale agreement which was
void
ab initio
.
The municipality’s case is that the applicants were speculating
with its property, unlawfully.
[2]
Based on an internal investigation, it came to the conclusion that
the money paid were never paid by the applicants and thus did
not
belong to either of the applicants. Its investigations pointed a
further purchaser(s).The purported sale(s) was to bypass the
procedures set out in section 14 of the Local Government: Municipal
Finance Act 56 of 2003
[3]
.
[10] Adv Heymans
submitted that there was a material dispute of facts regarding the
ownership of the money which could never be
resolved or adjudicated
upon on the papers. Thus the application should be dismissed
summarily with costs.
[11] The decision to
proceed by way of application instead of an action has been utilised
more frequently due to it being less expensive
and more favourable in
obtaining an expeditious order. In the authoritative decision of
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions Ltd
[4]
the court held as a general rule that the choice between the
procedures depends on whether a bona fide material dispute of fact
should have been anticipated by the party launching the proceedings.
When such a dispute is anticipated, a trial action should
be
instituted.
[12] It held further,
‘
an application may be dismissed
with costs, particularly when the applicant should have realised when
launching his application
that a serious dispute of fact was bound to
develop. It is certainly not proper that a applicant should commence
proceedings by
motion with knowledge of the probability of a
protracted enquiry into the disputed facts not capable of easy
scertainment…what
is essentially the subject of an ordinary
trial action…’
[5]
[13] In
Plascon
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[6]
the court stated the test as follows
‘…
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 relief
,may be granted if those facts in the applicant’s affidavits
which have been admitted by the
respondent ,together with the
facts alleged by the respondent, justify such an order.
[14] This has been
reaffirmed by the Supreme Court of Appeal in
Lombaard
v Droprop CC and Others
[7]
where it stated
‘
Therefore, if a party has
knowledge of a material and bona fide dispute ,or should reasonably
foresee its occurrence and nevertheless
proceeds on motion ,that
party will usually find the application dismissed.
[15] The municipality has
not placed anything in dispute except to allege collusion between
Mosebo, Rothman and some of its unknown
employees in an unlawful
venture; speculation with its property. From the common cause facts
between the parties, particularly
the inexplicable refusal to refund
the money to RTK, and in the light of the
Plascon
Evans
rule, there is simply no dispute of
fact in this case.
[16] The relief sought
under paragraph 1 of the Notice of Motion is for a refund of the
amount of R402 188. This relief is repeated
in the founding Affidavit
where Mr Mosebo stated the purpose of the application as follows:
‘The purpose of this application
is to obtain an order in terms
of which the respondent refunds the amount of R402 188.00 to the
applicants, which amount was erroneously
paid to the respondent.’
[8]
[18] A party suing is
dominus
litis
as (s) he chooses the claim most suitable on the facts of his or her
case. The plaintiff is not obliged or required to attach a
label to
his or her cause of action; all (s) he needs to do is satisfy the
court that the facts pleaded and proved entitle him
or her to the
claim (s) he makes.
[9]
[19] The claim in this
case is a simple claim based on money paid based on an agreement that
is
void
ab initio.
The ordinary remedies available in such a case are well known and
include cancellation of the agreement and a claim for a refund.
[10]
All RTK had to prove is that (a) it paid money into the account of
the municipality on the basis of an agreement which did not
materialise, (b) upon being informed by the municipality
that the sale will not materialise it demanded a refund which
amounted to an acceptance of the repudiation of the purported sale
agreement (c) despite demands made for the return of the money,
the
municipality refused to refund the money on no legal ground(s). If
RTK satisfied these requirements, it would be entitled to
the return
of the money.
[20] Mosebo and Rothman
denied colluding with anyone to speculate with the municipality’s
property. Rothman transferred the
money to the municipality, on
behalf of RTK, to conclude a sale agreement in respect of two
properties. The sale did not materialise.
There is no dispute that
Mosebo is the sole member of RTK and acted on behalf of RTK at all
times. In law although RTK has a distinct
legal
persona
,
it cannot negotiate or participate physically in business deals
except through Mosebo. That is common sense. To say that Mosebo
and
RTK had to prove to whom the money belonged smacks of ignorance on
the part of the municipality. Furthermore, apart from the
suspicion
the municipality harboured that there was fraud committed, there is
no evidence which pointed to an unknown benefactor
who deposited the
money into the municipality’s account. Even if there were,
there would be no
nexus
between
the municipality and the alleged benefactor that entitled the
municipality to retain the money. There is simply no legal
basis for
the municipality to do so. From the papers and the submissions made
in court, RTK has satisfied all the above requirements
and is
entitled to the return of its money.
[21] Lastly the issue of
costs. It boggles the mind why the municipality refused to refund the
money when it was clear right from
the beginning that it had no legal
basis to stand on. The municipality’s case is unfounded and
based on no authority. The
only case it could make is based on
suspicions which are unsubstantiated i.e that the applicants were
involved in some fraudulent
scam to sell houses belonging to it at a
commission even before they could have paid the full purchase price,
speculating. If the
municipality suspected fraud it ought to have
registered a criminal case so that the police can investigate; and
not keep, without
lawful cause, the money of a hereto innocent buyer.
There is no indication where the money was kept since the refusal to
refund
RTK. There is no indication that whatever account the money
was kept in is interest bearing; which interest RTK would be entitled
to from date on which summons was issued to date of the order that
will follow. From a very cursive reading of the papers, it was
clear
from the onset that the municipality’s case will see no light
of the day in any court. Yet it persisted up to this
stage. I see no
other way why this conduct can be discouraged in the strongest
possible way than through a cost order on a punitive
scale of
attorney and client.
[22] In the result the
following order is granted.
ORDER
1. The
respondent is ordered to refund the applicants in the amount of R402
188 within 14(fourteen)
days of date of this order.
2. The
respondent to pay the costs of the application on attorney and client
scale
.
’
________________
B.C. MOCUMIE, J
On behalf of the
applicants:
Adv. S. Grobler
Instructed by:
Peyper Attorneys
BLOEMFONTEIN
On behalf of the
respondent:
Adv. Heymans
Instructed by:
EG Cooper Majiedt Inc
BLOEMFONTEIN.
[1]
See FA3,FA4,FA5 and FA6 appended to the paginated papers
[2]
See Supporting Affidavit on page 82 of the paginated papers.
[3]
Section 14(5) provides:
‘
Any transfer of
ownership of a capital asset in terms of subsection (2) or (4) must
be fair, equitable, transparent, competitive
and consistent with the
supply chain management policy which the municipality must have and
maintain in terms of
section
111
.’
[4]
Room Hire Co (Pty) Ltd v
Jeppe Street Mansions Ltd
1949 (3) SA 1155(T).
[5]
Room Hire Co (Pty) Ltd at …
[6]
Plascon Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634H-635B.See also
Stellenbosch
Framers Winery Ltd v Stellenvale Winery (Pty) Ltd
1957
(4) SA 234
(C)
where
the court stated ‘where it is clear that facts, though not
formally admitted cannot be denied, they must be regarded
as
admitted…’
[7]
Lombaard v Droprop CC and
Others
2010(5) SA 1 (SCA)
at 11.
[8]
See page 9 of the Founding Affidavit.
[9]
Davidson v
Bonafede
1992 (3) SA 190
(W) at 199E-F.
at 505D.
[10]
Christie, The Law of
Contract
5
th
Edition.