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[2013] ZAKZDHC 48
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Hume Housing v Hibiscus Coast Municipality (13433/2011) [2013] ZAKZDHC 48 (13 September 2013)
REPORTABLE
IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLICOF SOUTH
AFRICA
Case: 13433/2011
In
the matter between
Hume
Housing
.............................................................................
Plaintiff
and
Hibiscus
Coast Municipality
...............................................
Respondent
JUDGMENT
Delivered
on13September2013
Steyn J
[1] This action involves
another round of litigation between the same parties for compensation
of property owned by the plaintiff
in the Gamalakhe Township. The
plaintiff is a property developer and the defendant the local
municipality of the Hibiscus Coast.
The parties have been involved in
protracted litigation and accordingly it is necessary for the
purposes of this judgment to deal
with the historical background that
foreshadows the present action.
[2] The plaintiff
launched an application under case number 14041/2010 seeking the
eviction of those who were occupying the property
illegally. It was
contended that the first respondent was aware of the illegal
occupiers and failed to prevent illegal structures
being built on the
property. The applicant under case number 14041/2010 sought
inter
alia
an order that the respondent be directed to acquire the said
property from the applicant or alternatively, pay constitutional
damages
to the applicant. The application was heard by Vahed AJ, as
he then was, and the following order was issued:
‘
(1) It is
recorded that the terms of the order about to be made have been
settled as amongst counsel but for the fact that the order
is not
going to be one by consent.
(2) It is recorded that Attorneys
Shepstone & Wylie and Mr Goddard appear for the 1
st
Respondent and 5
th
to 38
th
Respondents.
(3) That the 1
st
Respondent will acquire the properties referred to in the
application, which are owned by the Applicant, once compensation
determined
as set out below has been paid. The 1
st
Respondent shall be entitled to effect transfer into its own name
or into the name of its nominee(s).
(4) That the compensation will be
determined in accordance with Section 12(1), 12(2) and 12(3) of the
Expropriation Act 63 of 1975.
(5) That the Applicant will deliver
a summons and particulars of claim within 10 days. The 1
st
Respondent will deliver a plea and counterclaim, if any, within 10
days thereafter, and the Applicant a plea in reconvention and
replication, if any within a further 10 days.
(6) That the provisions of the
Uniform Rules of Court will apply.
(7) It is ordered that the
Respondent currently occupying the property will not be required to
vacate, pending finalization of the
said proceedings.
(8) For the purpose of the Act the
date of Expropriation insofar as it requires to be defined for the
purposes of that Act, in determining
compensation, is 26
th
November 2010.
(9) That the Applicant shall not as
from the date of this order, be liable for rates or taxes on the
properties.
(10) That the costs of today are
reserved. All previous reserved costs order, including those of today
will be decided in the above
proceedings.
(11) That it is recorded that the
4
th
Respondent has agreed to fund the
acquisition in paragraph (1) above. Nothing herein will affect the
Applicant’s right to
receive payment from the 1
st
Respondent.
(12) That any amounts found payable
by any party to the other will be payable
pari passu
with the
other.’
[3] There were a series
of applicationsthat preceded this action,
inter alia
an
application for leave to appeal against a judgment of Koen J. At the
commencement of the trial I was informed that the application
for
leave to appeal against the judgment of Koen J had been abandoned and
costs incidental to the appeal were tendered. The defendant
then
stated that an amount of R2 200 000.00, being the value of
the raw land, has been tendered and that the parties
agreed that the
interest on the aforesaid is R750 195.07. The Defendant also
stated that it has agreed to pay
solatium
of R55 000 as
claimed by the plaintiff.What was placed in issue by the defendant
was that the plaintiff is entitled to judgment
in the sum of R6 045
000.00. The defendant raised a special plea of
res iudicata
.The
parties were
ad idem
that the special plea should be dealt with
at first and that the issues of costs and VAT be reserved for later
determination. Both
parties reserved their right to address me on the
remainder of the issues once a decision has been made on the special
plea.
[4] The following special
plea was raised by the Defendant:
‘
By
judgment handed down under the above case number on 10 August 2012,
this Honourable Court finally determined the issues listed
below, and
they are
res
iudicata
:
that the parties did not reach
agreement on the appointment of Mills Fitchet, as alleged in
paragraph 7 of the particulars of
claim (judgment paragraph [25] and
[26]);
That the Mills Fitchet valuation
is not as contemplated by the order in case no 14041/2010 (judgment
paragraph [32]);
That section 12(5) of the
Expropriation Act was intended to apply when determining
compensation (judgment paragraph [29]); and
That the order in case number
14041/2010 was ambiguous (judgment paragraph [24]).’
The plaintiff at the
commencement of the proceedings applied for an amendment to its
particulars of claim and asked that paragraph
7 be deleted. The
paragraph reads as follows:
‘
The
parties agreed to the appointment of Mills Fitchet (Pty) Ltd,
Property Valuers, for the purposes of valuing the Plaintiff’s
properties as set out in paragraph 6 above. The properties have been
valued at R6 045 000.00 (plus VAT), which is arrived
at as
follows:-
7.1 The land value R2 200 000.00
7.2 Depreciated replacement
costs ofthe top structures R3 790
000.00
7.3 Solatium R55 000.00
---------------------
R6 045 000.00’
The amendment was
unopposed and accordingly granted. Inthe light of the aforesaid
amendment it is no longer necessary to deal with
what is contended by
the defendant in its special plea under (a) and (b).
[5] The plaintiff’s
cause of action as set out in the particulars of claim is that the
defendant in terms of the order of
Vahed AJ, was ordered to acquire
the immovable properties listed, compensate the plaintiff, and that
the calculation of the compensation
should be in accordance with the
provisions of section 12(1), 12(2) and 12(3) of the Expropriation
Act, 63 of 1975(hereinafter
referred to as the ‘Expropriation
Act’). It has been pleaded that the compensation of
R6 045 000.00 claimed,
is calculated in accordance with the
order of Vahed AJ.
Res Iudicata
[6] The doctrine
res
iudicata
1
remains a fundamental
part of our legal systemand is aimed at preventing parties from
re-litigating in instances where a court has
definitively determined
the issue by delivering a judgment.
2
In order to succeed with
a plea of
res
iudicata
,
the following requirements should be met: (i) the party who relies
upon it should show that the two matters are between the same
parties, (ii) the same cause of action
3
and for (iii)the same
relief.
4
In
Yellow
Star Properties 1020 (Pty) Ltd v MEC, Department of Development
Planning and Local Government, Gauteng
5
the Supreme Court of
Appeal clearly distinguished between
res
iudicata
and
issue estoppel:
6
“
[T]hat
the strict requirements of the exception, especially those relating
to
eadem
res or eadem petendi causa
(the
same relief and the same cause of action), may be relaxed where
appropriate. Where a defendant raises as a defence that the
same
parties are bound by a previous judgment on the same issue (
viz
idem actor
and
eadem
quaestio
),
it has become commonplace to refer to it as being a matter of so
called ‘issue estoppel’. But that is merely a phrase
of
convenience adopted from English law, the principles of which have
not been subsumed into our law, and the defence remains one
of
res
iudicata
.”
7
I must thuscompare the
relevant facts of the two cases upon which reliance is placed to
determine whether the cause of action is
the same in both.
8
Simply put, is the
plaintiff ‘demanding the same thing on the same ground’?
9
Most
of the
dicta
,
it would appear to me,held that the ‘cause of action’
requirement should not be interpreted narrowly.
10
Regard should also be had
to the Constitution
11
and a party’s right
to have a dispute heard. On a procedural level it should be borne in
mind that the application of the
principle
res
iudicata
should
not cause actual injustice.
12
[7] After theparties
presented their submissions I ruled that the special plea raised by
the defendant be argued and decided before
any evidence was tendered.
I ordered that the remainder of the proceedings be stayed until
judgment is delivered and further directions
could be given.
[8] The special plea of
res iudicata
arises in consequence of the application before
Koen J which he dismissed. The relief sought before Koen J was an
order in the following
terms:
‘
(1) That
the valuation report compiled by Mills Fitchet – Natal (Pty)
Ltd be made an order of court;
(2) That judgment be granted in
favour of the applicant in the sum of R6 045 000,00 (six
million and forty-five thousand
rand);
(3) Payment of interest on the
amount referred to in paragraph 2 above in accordance with section
12(3) of the Expropriation Act,
from 26 November 2010 until date of
payment;
(4) Costs of this application; and
(5) Further and/or alternative
relief.’
[9] I shall now apply the
principles to the present case. In consideration of the requirements
of the defence
res iudicata
, it is the requirement of ‘the
same cause of action’that is in dispute. It is common cause
between the parties that
the other two requirements of the defence
have been met. Mr Stokes SC has argued that in the application before
Koen J, the claim
was based on the underlying agreement between the
parties that Mills Fitchet – Natal Pty (Ltd) should evaluate
the properties
and that the valuation report be made an order of
court. In the action before court reliance is placed on the order of
Vahed AJ,
and based on that, judgment should be granted in its favour
in the amount of R6 045 000.00. The plaintiff contended
that
Koen J had to rely on extrinsic evidence to determine whether
there was a true agreement between the two parties to use the
services
of Mills Fitchet and did not rely on the order of Vahed AJ.
In light of this
submission it is necessary to closely examineKoen J’s judgment
and consider the role that Vahed AJ’s
order played in reaching
the conclusion that the application be dismissed. Without such
analysis, there would be no certainty regarding
Koen J’s
judgment and whether it should be binding on this court.
[10] A careful and
cautious analysis of Koen J’s judgment shows thatthe Court
considered the terms of the order and the impact
of the terms on the
parties.What follows hereinafter is what was spelt out in Koen J’s
judgment. In para 10 it is stated:
‘
The
applicant contends that the agreement between the attorneys of
December 2011 did not in any way affect the basis upon which
the
amount of compensation was to be determined as set out in the order
of Vahed AJ and that Mills Fitchet quantified the compensation
in
accordance with the terms of the order.
The
respondent contends that the valuation by Mills Fitchet is not one in
accordance with the court order.
’
(My emphasis)
At para 12, the Court
held:
‘
The
applicant does not agree that there is any factual dispute and
contended that to the extent that there is a dispute between
the
applicant and the respondent,
it
relates to the proper interpretation of the order made by Vahed AJ on
21 November 2011
,
which is a matter of interpretation, not evidence (oral or
otherwise), and accordingly that the matter should be determined on
the papers in accordance with the rule in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
.’
(My emphasis)
In my view the applicant
in the application before Koen J not only relied on the order of
Vahed AJ,as being final, but also relied
on the certainty of the
order. In the judgment of the learned judge, he considered the order
of Vahed AJ, and decided:
‘
Paragraph
3 of the court order granted by Vahed AJ deals with the first
respondent acquiring the properties referred to in the application.
Clearly what the first respondent would acquire would be the land
with the enhancements thereon which accede to the land. The
acquisition was to occur
pari
passu
with
the payment of ‘compensation’, once such compensation was
determined.
The
issue is how that ‘compensation’ was to be determined
.’
(My emphasis)
In my view itwould have
been impossible to decide the earlier issue without considering the
content of the order by Vahed AJ and
what it prescribed. In deciding
upon quantum for example Koen J held:
‘
The
basis upon which the quantum of compensation was to be determined was
prescribed, namely that it had to be in accordance with
the
provisions of s 12 of the Act.
It
is in regard to what was to be valued i.e. raw land with enhancements
or raw land without any enhancements, or, differently stated
perhaps,
land ‘not illegally occupied and enhanced’, or land with
enhancements thereon, that the attorneys (and hence
the parties) were
not
ad
idem
.’
(My emphasis)
It was only after Koen
Jhad found Vahed AJ’s order to be ambiguous that the Court
resorted to extrinsic evidence, in deciding
upon the application.It
would have been improper for the Court, hearing the previous
application, to decide upon the issues without
interpreting the terms
of the order granted by Vahed AJ.In the present action the plaintiff
is placing reliance on the very same
order that was interpreted by
Koen J. If the special plea of
res
iudicata
does
not succeed, then this court would have to consider the very same
order that was considered by another court and found to be
ambiguous.
On the strength of the order being ambiguous Koen J relied on the
discussions between the parties and their legal representatives
in
determining whether the parties agreed on a valuation report.
13
The order of Vahed AJ,
remained an integral part of the evidence before Koen J.
[11] When the matter was
argued,Mr Stokes submitted that paragraph 29 of Koen J’s
judgment was not part of the
ratio decidendi
andshould be
considered as an
obiter
statement. The said paragraphreads:
‘
Even if I
was incorrect in my above reasoning, I nevertheless believe that the
application cannot succeed also on the following
basis. The amount of
the compensation was to be determined in accordance with s 12(1), (2)
and (3) of the Act. It seems clear to
me that such compensation could
not be calculated other than by taking into account also the
prescripts referred to in
inter
alia
the
remainder of the provisions in s 12, notably s 12(5). Section 12(5)
expressly refers to factors which need to be taken into
account ‘in
calculating the compensation payable in terms of the Act’.
Although the properties were not actually being
expropriated, by
fixing of a ‘date of expropriation’ in paragraph 8 of the
order, and by prescribing that the compensation
was to be determined
in accordance with
inter
alia
s
12(1), (2) and (3) of the Act, provisions such as s 12(5) which would
normally apply to a determination of the amount of compensation,
particularly subsection (c) thereof, were clearly intended to apply.’
It appears to me that the
learned judge not only applied his mind to the calculation of the
compensation but gave additional reasonsin
support of thefindings. In
my view it was necessary and appropriate for the Court to give all
the reasons why the application should
fail and accordingly it cannot
be said to be an
obiter
dictum.
[12] In paragraph 30 of
the judgment the Court expressly dealt with section 12(5) of the
Expropriation Act and found that the property
was used for unlawful
purposes and accordingly the enhancements arising from the property
must be disregarded.The judgment of Koen
J in respect of the issues
above, had not been appealed against and that judgment remains
binding upon the plaintiff, however much
the plaintiff disagrees with
it.
In my view the threefold
test
14
of the
exceptio
res iudicata
have
been met. To decide differently would give rise to conflicting
decisions on the same issues in dispute. Given the circumstances
in
which the principle finds application, and operates, I am of the view
that the operation of this common law rule is not only
fair but also
just and equitable.
[13] It follows therefore
that the special plea of
resiudicata
should succeed.
13.1. In the premises the
special plea raised by the defendant is upheld with costs.
13.2. The remainder of
the issues are adjourned
sine die
.
_____________________
Steyn, J
Date Judgment Reserved:
21 August 2013
Date of Judgment:
13September2013
Counsel for the
Plaintiff: AdvStokes SC
Instructed by: Knight
Turner Inc.
Counsel for the
Respondent: Adv Goddard
Instructed by: Shepstone
& Wylie Attorneys
1
Res
iudicata
literally means that the matter has already been
decided.
2
This
defence originates from Roman-Dutch law. See discussion by J Salant
‘
Res
iudicata’
De
Rebus
Vol 13 Issue 436, at 47-48. Also see Joubert (ed)
The
Law of South Africa 2 ed
Vol
9 para 624.
3
For
a comparative analysis, see Ernst Schopflocher ‘What is a
single cause of
action
for the purpose of res iudicata?’
Oregon
Law Review
Vol
21 (1942) at 319-364.
4
See
Prinsloo NO and others v Goldex 15 (Pty) Ltd and another
(2012) JOL
28866
(SCA) at para 23.
5
2009
(3) SA 577
(SCA).
6
See
Bafokeng Tribe v Impala Platinum Ltd and Others
1999 (3) SA
517
(BHC)
where
the Court defined and distinguished ‘issue estoppel’ as
follows:
“
Issue
estoppel is a rule of
res
iudicata
but
is distinguished from the Roman-Dutch Law exception in that in issue
estoppel the requirement that the same subject-matter
or thing must
be claimed in the subsequent action is not required. Issue estoppel
has a twofold requirement. Issue estoppel has
been applied in our
law in decisions of Provincial and Local Divisions. However, in the
Kommissaris
case
supra the Court accepted that the expression ‘issue estoppel’
had been in use in our law for a long time, and
is a useful
description of these cases which do not strictly conform to the
threefold requirements
res
iudicata
,
because the same relief is not claimed on the same cause of action,
but notwithstanding that the defence may be successful.
Issue
estoppel is also founded on public policy to avoid a multiplicity of
actions in order ‘
inter
alia
to
conserve the resources of the courts and litigants’. There is
a tension between a multiplicity of actions and the palpable
realities of injustice. It must be determined on a case by case
foundation without rigidity and the overriding or paramount
consideration being overall fairness and equity.”
(At 566 G-J).
Cf.
D Zeffentt ‘
Issue Estoppel in South Africa’
(1971)
SALJ at 312-320.
7
Ibid
at para 22.
8
See
Janse van Rensburg and Others NO v Steenkamp and Another
;
Janse
van
Rensburg and Others NNO v Myburgh and Others
2010 (1) SA 649
(SCA) at para 25.
9
See
African Farms and Townships Ltd v Cape Town Municipality
1963
(2) SA
555
(A) at 562A; and
Ferreira v Minister of Social Welfare
1958
(1) SA 93(E).
10
See
Boshoff
v Union Government
1932
TPD 345
(T) at 349;
Custom
Credit
Corporation
(Pty) Ltd v Shembe
1972 (3) SA 462
(A) at 472A;
Goldfields
Laboratories (Pty) Ltd v Pomate Engineering (Pty) Ltd
1983 (3)
SA 197
(WLD) at 200H;
Kommissaris van Binnelandse Inkomste v Absa
Bank Bpk
1995 (1) SA 653
(A) at 669G and
Smith v Poritt and
Others
2008 (6) SA 303
(SCA) at 307-308.
11
See
section 34 of
the Constitution of the Republic of South Africa
,
1996 that
declares
that everyone has the right to have any dispute that can be resolved
by application of the law decided in a fair public
hearing before a
court.
12
See
Bafokeng Tribe supra
at 566D-E.
13
Cf.
African
Farms and Townships Ltd v Cape Town Municipality
1963 (2) SA
555(A):
‘
According
to Voet 44.2.4 it is not the form of action which determines
thesameness of the
causa
petendi,
but
the identity of, the question which is again raised or set in
motion.’
(At 562B).
14
See
Mitford’s
Executor v Ebden’s Executors and Others
1917
AD 682
at 686;
Pretorius
v Barkly East Divisional Council
1914 AD 407
;
Kethel v
Kethel’s Estate
1949 (3) SA 598
(A) at 605,
African
Farms and Townships Ltd v Cape Town Municipality supra
;
Custom
Credit Corporation (Pty) Ltd v Shembe
(
supra
).