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[2015] ZAECMHC 56
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Kwebi Creative CC v Alfred Nzo District Municipality (3044/14) [2015] ZAECMHC 56 (21 May 2015)

IN
THE HIGH COURT OF SOUTH AFRICA
[EASTERN
CAPE LOCAL DIVISION – MTHATHA]
CASE
NO.3044/14
In
the matter between:-
KWEBI
CREATIVE CC

PLAINTIFF
And
ALFRED
NDZO DISTRICT MUNICIPALITY

DEFENDANT
JUDGMENT
ON APPLICATION FOR LEAVE TO APPEAL
HINANA
AJ
[1.1]
On 26 March 2015 this matter appeared before me in the Motion Court.
The Plaintiff was represented by Mr. Sambudla and
the Defendant was
represented by Mr. Mfeya. A draft Order was handed from the Bar and
it was made an Order of Court. The Order
that was granted is the
following:
“
1.
The Defendant be and hereby directed to pay a sum of R10 989 433-39
(Ten Million Nine
Hundred and Eighty Nine Thousand Four Hundred and
Thirty Three Rands and Thirty Nine Cents) within fourteen (14) days
from the
date of service of this Order upon the Defendant;
2.
The Defendant is ordered and directed to pay the interest on the
aforesaid amount
at the prevailing legal rate of 9% from the date of
judgment to date of final payment;
3.
The Defendant is ordered and directed to pay costs of this
application on a party
and party scale;
4.
Such costs to include the costs consequent upon the preparation of
heads of argument
and the reserved costs of 19 February 2015;
5.
The execution of the Order will take effect fifteen (15) days after
the grant
of this Order”
[1]
.
1.2
I shall refer to the parties as cited in the main action.
[2]
Summons were issued on 22 October 2014 against the Defendant for the
payment of the amount of R10 989
433-39 (Ten Million Nine Hundred and
Eighty Nine Thousand Four Hundred and Thirty Three Rand Thirty Nine
Cents) and other ancillary
reliefs
[2]
.
The Defendant filed its Notice to Defend on 20 November 2014, duly
represented by
Messrs
C.S Magazi Attorneys, Mthatha
.
[3]    On
23 January 2015 the Defendant’s attorneys issued a notice
titled “
OFFER OF SETTLEMENT”.
The Notice reflects
“
BE
PLEASED TO TAKE NOTICE
that
“Without Prejudice” or admission of liability and by way
of an offer in full and final settlement of the Plaintiff’s

claim, and Defendant hereby offers the following:
1.
1.
Payment
to the Plaintiff in the sum of R10 989 433-39 (Ten Million Nine
Hundred and Eighty Nine Thousand Four Hundred and Thirty
Three Rand
Thirty Nine Cents);
2.
That
14% being VAT thereon be waived by Plaintiff;
3.
Kindly
take notice that each party will pay its own costs”.
[
4]
On 26 January 2015, the Plaintiff served and filed a Notice titled
“
NOTICE
OF ACCEPTANCE OF OFFER”
which
reads as follows
“
BE
PLEASED TO TAKE NOTICE THAT
the
Plaintiff hereby accepts the Defendant’s offer of settlement in
the sum of R10 986 433-39, which amount is inclusive of
VAT.
Kindly effect payment to the
undermentioned account within five (5) working days from the date of
receipt hereof.
ACCOUNT NAME: DAYIMANI SAKHELA
INC. TRUST ACCOUNT
BANKING INSTITUTION: FIRST
NATIONAL BANK
ACCOUNT NUMBER: [……………….]
BRANCH CODE: 260553
AMOUNT
PAYABLE: R10 986 433-39”.
[5]
On 10 February 2015 the Plaintiff served and filed a Notice in terms
of Rule 34 (7)
[3]
and the Notice
reflects the following amongst others
“
WHEREAS,
the
Plaintiff did on 26 day of January 2015 served upon the Defendant an
acceptance of the said offer as it stand/stood, in which
acceptance
the Plaintiff sought the Defendant to settle the said amount offered
within five (5) days from the date of receipt of
such offer.
AND WHEREAS
the
abovementioned Defendant has failed, ignored and/or refused to comply
therewith despite the lapse of the period of ten (10)
days from the
date of receipt of the Notice of Acceptance of the Offer.
NOW THEREFORE
the
Plaintiff will make an application to this Honourable Court on 09
February 2015 at 10H00 or so soon thereafter as the matter
maybe
heard for (an) Order as per the offer of settlement in the following
terms:
1.
The
Defendant is ordered and directed to pay a sum of R 10 989 433-39
(Ten Million Nine Hundred and Eighty Nine Thousand Four Hundred
and
Thirty Three Rand Thirty Nine Cents) to the Plaintiff;
2.
Directing
the Defendant to pay interest on the aforesaid amount at the legal
rate from date of judgment to date of payment.
3.
That
its party pays its own costs in respect of the main action and the
Defendant pays costs of this application.
4.
Such
further and/or alternative relief as the Court may deem grant”
[4]
.
[6]
The Rule 34 (7) Notice accompanied by an affidavit in support of an
application to make an offer on
Order of Court was served on the
Defendant’s attorneys on 10 February 2015. The Defendant’s
attorneys filed a Notice
to oppose on 19 February 2015 and never
filed any opposing papers.
[7]
On 19 February 2015 the application to make an offer an Order of
Court appeared in Court and it was
removed from the roll and costs
were reserved
[5]
.
[8]
The Plaintiff prepared a Notice of Set Down of the application in
terms of Rule 34 (7) which was served
on the Defendant’s
attorneys on 13 March 2015. The Order that I granted on 26 March 2015
was an Order pursuant to the facts
stated above.
[9]
It is worth mentioning that on 16 April 2015 Messrs C.Z Magazi
Attorneys withdrew as attorneys of record
of the Defendant and filed
a Notice as such
[6]
and the
Notice reflects that all processes and Notices should be forwarded to
M. Magigaba Incorporated, Durban c/o Nkele Attorneys,
Mthatha.
Further a Notice of Acting as attorneys of record for the Defendant
was served and filed on the 17 April 2015.
[10]
On 20 April 2015 a Notice of Application for Leave to Appeal was
filed with the Registrar and the followings are
grounds upon which
the Application for Leave to Appeal was sought
(a)
The
Learned Judge erred in failing to condone the Respondent’s
non-compliance with the time periods prescribed for the filing
of an
answering affidavit in the Uniform Rules of Court.
(b)
The
Learned Judge erred in refusing the Respondent’s application
for adjournment of the matter in order to file an answering
affidavit
to the founding affidavit filed in support of the application
instituted by the Applicant pursuant to the provision of
the Rule 34
(7) of the Uniform Rules of Court.
(c)
The
Learned Judge erred in failing to give the Respondents leave to file
its answering affidavit in the said application.
(d)
The
Learned Judge erred in failing to allow the Respondents the
opportunity to place its defence to the application before Court.
(e)
The
Learned Judge would, had he allowed the Respondent leave to file and
answering affidavit to the application, been aware of the
fact that
the purported offer made by the Respondent’s attorneys of
record pursuant to the provisions of Rule 34 (1) of the
Uniform Rules
of Court was made in circumstances where the said attorney had not
been authorized by the Respondent in writing to
make such offer.
(f)
The
Learned Judge erred in granting judgment in favour of the Applicant
in circumstances when he was not aware of the fact that
the
Respondent had a valid defence to the said application.
(g)
The
Learned Judge erred in granting judgment in favour of the Applicant
in circumstances where there had been non-compliance with
the
provisions of Rule 34 (1) of the Uniform Rules of Court.
(h)
The
Learned Judge accordingly erred in failing to dismiss the application
instituted by the Applicant pursuant to the provisions
of Rule 34 (7)
of the Uniform Rules of Court, with costs.
WHEREFORE
the
Respondent seeks an Order in the following terms:
(a)
That
the Respondent is hereby granted leave to appeal to the Supreme Court
of Appeal, Bloemfontein, alternatively the full court
of the Eastern
Cape Division, Grahamstown, against the whole of judgment and order
handed down by his Lordship Mr Acting Justice
Hinana on the 26
th
of March 2015.
(b)
That
the costs of the application for Leave to Appeal be costs in the
cause of the appeal.
TAKE
NOTICE FURTHER THAT
application
will be made to this Honourable Court, simultaneously with the
hearing of this application, for the Respondent’s

non-compliance with the time period prescribed in Rule 49 (1) (b) of
the Uniform Rules of Court for the filing of this application
to be
condoned”.
[11]
On 08 May 2015 the Application for Leave to Appeal was simultaneously
heard with an application in terms of Rule
49 (1) (b) of the Uniform
Rules of the Court. In support of the application, the Defendant
submitted that the Application for Leave
to Appeal should have been
filed within fifteen (15) days of the grant of the Order. The fifteen
(15) days would have lapsed on
16 April 2015. However, the
Application for Leave to Appeal was filed on 20 April 2015.
[12]
A number of grounds have been alleged by the Defendant in the
Application for Leave to Appeal and I need not deal
with such
grounds. The Defendant tendered costs occasioned by the application
for condonation, such costs included costs of two
Counsel i.e. Senior
and Junior counsel.
[13]
However, Mr. Mtshaulana (together with Mr. L.L. Sambudla) argued that
the application for condonation is without
merit and should be
dismissed.
[14]
The only issue that was argued before me in the Application for Leave
to Appeal by Mr. Topping (with Mr. Kuzwayo),
is that there are
reasonable prospects of success of the appeal because had an
affidavit been filed, the Court would have not made
the Order.
Further, so the argument went, the attorney making the offer must
have been authorized to make the offer and the Defendant
must have
signed the offer. He further argued that the Plaintiff failed to
inform the Court that the attorney who made the offer
had no
authority to sign it. He submitted that the Court was obliged to
satisfy itself that the attorney who made an offer was
authorized to
do so. Because the Court did not satisfy itself, then the Court erred
in granting the Order. All other grounds that
were sought to be
relied on in the Notice of Application for Leave to Appeal were
abandoned by Mr. Topping.
[15]
On the other hand Mr. Mtshaulana argued that the Application for
Leave to Appeal should be refused because there
are no prospects of
success. Relying on Annexure “
B”
[7]
,
Mr.
Mtshaulana argued that there are no prospects of success if one
considers the contents of annexure “
B
”.
Annexure “B” reflects the following:
“
From:
Mpho Mhlanti
Sent:
Thursady, December 18, 2014 3:21 PM
To:
‘luthandop@yahoo.com’
Cc:
‘kraaim@andm.gov.za’
Subject: KWEBI
CREATIVE (LEGAL OPINION)
Dear Sir
1.
Please
find the attached legal opinion as prepared for MM’s office.
2.
Further,
as per our telephonic discussion just now with regard to the
envisaged Out of Court Settlement of this matter, may we have
a
‘Without Prejudice’ communique to the Plaintiff’s
attorneys with regard to the following:
(aa) That an amount of R10 986
433-39 be paid upon acceptance of this offer.
(bb)   That 14% being VAT
thereon be waived by the Plaintiff.
(cc)   That each Party to
pay its own legal costs.
Kind regards
Adv. Mpho. P.
Mhlanti
Advocate of the
High Court of South Africa
Commissioner of
Oaths
Manager: Legal
Services: Alfred Ndzo District Municipality”
[16]
It will be noted that the deponent of the affidavit in support of the
application for condonation, Mr. Mthetheleli Sonindeni
Armstrong
Kraai was forwarded with an email that originated from Adv. Mpho P.
Mhlanti of the Legal Services of the Defendant. Further,
it will be
noted the email is dated 18 December 2014.
[17]
Mr. Kraai does not deal with annexure “B” in his
affidavit save to state the following:
“
In
the present instance the Respondent’s erstwhile attorney of
record had only been requested in writing to address ‘A
Without
Prejudice’ communique to the Plaintiff’s attorneys with
regard to an envisaged ‘Out of Court Settlement
of the matter.
I annex hereto marked “B”, a copy of the email addressed
by the Respondent’s Manager: Legal Services
to its erstwhile
attorneys of record in this regard on the 18
th
December 2014”
[8]
.
[18]
On the papers, Mr. Kraai does not tell this Court what he did after
having been forwarded with annexure “B”
which ultimately
was sent to the Plaintiff’s attorneys of record. In my view he
was aware of the offer that was made or suggested
by the Legal
Services and ultimately such an offer was forwarded and accepted by
the Plaintiff’s attorneys.
[19]
Further, the contentions by Mr. Kraai that C.S Magazi attorneys were
not authorized to make an offer of settlement
is fallacious. With the
existence of annexure “
B”
referred to above, I find it very difficult to understand why he was
inactive and seek to challenge annexure “
B”.
Accordingly,
I find that the Defendant is estopped from raising the authority of
C.S Magazi attorneys
[9]
[20]
The legal trite position for the Application for Leave to Appeal to
be successful, the Applicant has to establish
reasonable prospects of
success on appeal, and in my view, it has failed in this case.
[21]
Further, as the Municipal Manager, Mr. Kraai was expected to have
taken a step one way or the other upon receipt
of annexure “
B”
and his inaction, is interpreted to mean that he agreed to the
proposed out of  Court settlement. In my view, the Defendant
was
aware of the proposed offer of settlement, did not object to it being
communicated to the Plaintiff. The Defendant cannot argue
that it was
not aware of the proposed offer. It came from its office and the
Municipal Manager is aware.
[22]
Taking into account that the deponent of the affidavit in support of
the application for condonation, Mr. Kraai
was aware of the existence
of annexure “
B
” referred to above coupled with the
offer and subsequent acceptance made, I am of the view that the
application for condonation
must succeed. The Defendant is out of
time for a period of 2 days and has tendered the costs of the
application for condonation.
Further, I find that there are no
prospects of a successful appeal. In any event there is no
application to rescind the Order of
26 March 2015.
[23]   In the
result the following Order is made:
1.
The
application for condonation is granted.
2.
Alfred
Ndzo District Municipality is directed to pay costs occasioned by the
application for condonation, such costs to include
costs of two
Counsel i.e. Senior and Junior Counsel.
3.
The
Application for Leave to Appeal is dismissed with costs, such costs
to include costs occasioned by the engagement of both Senior
and
Junior Counsel.
_____________________
M.N. HINANA
ACTING JUDGE OF THE
HIGH COURT
APPEARANCES
ADV. P.M. MTSHAULANA
SC (WITH HIM L.L. SAMBUDLA)
COUNSEL FOR THE
PLAINTIFF
DAYIMANI SAKHELA INC.
MTHATHA
ADV. I.L. TOPPING SC
(WITH HIM B.S. KUZWAYO)
COUNSEL FOR THE
DEFENDANT
INSTRUCTED BY MAGIGABA
INC.
c/o NKELE A. &
SONS
MTHATHA
HEARD ON 08 MAY 2015
DELIVERED
ON 21 MAY 2015
[1]
See Court Order dated 26 March 2015.
[2]
Page 6 of the Index to Pleadings.
[3]
Page 1 of Notice in terms of Rule 34 (7).
[4]
Page 2-3 of the Notice.
[5]
Court Order dated 19 February 2015.
[6]
Page 24.
[7]
Page 26 of Application for Condonation.
[8]
Page 11 para 25 of the Application for
Condonation.
[9]
MEC for Economic Affairs, Environment &
Tourism: Eastern Cape v Klaas Kruizenga Henque 2189 CC t/a Wimrie
Boerdery (169/2009)
[2010] ZASCA 58
(1 April 2010)