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[2013] ZAKZDHC 76
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Hume Housing v Hibiscus Coast Municipality (13433/2011) [2013] ZAKZDHC 76 (13 September 2013)
REPORTABLE
IN
THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC
OF SOUTH AFRICA
Case:
13433/2011
In
the matter between
Hume
Housing
..............................................................................................................
Plaintiff
and
Hibiscus
Coast
Municipality
................................................................................
Respondent
JUDGMENT
Delivered on 13
September 2013
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 applications that 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
:
(a)
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]);
(b)
That the Mills Fitchet valuation is
not as contemplated by the order in case no 14041/2010 (judgment
paragraph [32]);
(c)
That section 12(5) of the
Expropriation Act was intended to apply when determining compensation
(judgment paragraph [29]); and
(d)
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 of the top
structures................................ R3 790 000.00
7.3
Solatium................................................................R55 000.00
---------------------
R6 045 000.00’
The
amendment was unopposed and accordingly granted. In the 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 system and 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 thus compare 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 the parties 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 examine Koen 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 that
the 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 it would 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 J had 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
and should be considered as an
obiter
statement. The
said paragraph reads:
‘
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 reasons
in
support of the findings. 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
res iudicata
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: 13 September 2013
Counsel
for the Plaintiff: Adv Stokes 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 the
sameness 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
).