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[2012] ZAECELLC 14
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Buffalo City Municipality and Another v Koekemoer (EL493/12, ECD 193/12) [2012] ZAECELLC 14 (24 August 2012)
11
Not
Reportable
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, EAST LONDON)
Case No:493/12
ECD:193/12
Date Heard: 7/08/2012
Date Delivered:
24/08/2012
In the matter between:
BUFFALO CITY
MUNICIPALITY
.......................................
1
ST
APPLICANT
THE MUNICIPAL
MANAGER OF
THE BUFFALO CITY
MUNICIPALITY
...............................
2
ND
APPLICANT
And
JOHAN RUDMAN
KOEKEMOER
...........................................
RESPONDENT
JUDGMENT
SMITH
J:
Introduction
[1] The Applicants seek
an order setting aside the default judgment granted by Hartle J on 3
April 2012. In terms of that order,
the Buffalo City Municipality
(the First Applicant) was directed to take all necessary steps to
transfer certain immovable property
to the Respondent.
[2] The Respondent had
moved that application pursuant to a resolution adopted by the
municipality to sell a portion of public open
space, i.e. Erf 11578,
“
measuring approximately 515 square metres in extent
”
to his predecessor- in-title, one Mrs Saunders, by way of private
treaty, for R8800. The sale was made subject to various
conditions;
one of which was that the approval of the Premier should be obtained.
[3] In order to succeed
with the application for rescission the applicants must:
provide a reasonable
explanation for the default. If it appears that their default was
wilful, or due to gross negligence, the
court may decide not to come
to their assistance;
show that they have a
bona fide
defence to the main application. It is sufficient
for them to put up averments which, if proved at the hearing of the
main application,
would constitute a comprehensive defence to the
Respondent’s claim; and
show that the
application is
bona fide
and not made with the intention of
merely delaying the Respondent’s claim.
(
Grant v Plumbers
(Pty) Ltd
1949 (2) SA 470
at 476-477).
[4] I am of the view
that the Applicants have failed to establish any of these
prerequisites. My reasons for this conclusion are
as follows.
Explanation for
the default
[5] The Second
Applicant, Andile Fani, avers that he only became aware of the
default judgment on 10 April 2012. The application
papers had
apparently been served on one Ms Dyakopu, who is the municipality’s
general receptionist. Ms Dyakhopu could not
recall what she had done
with the papers.
[6] Mr Fani stated that
Ms Dyakopu is not his personal assistant or his receptionist. He
avers that the application had therefore
not been properly served in
terms of the Court Rules and section 115(3) of the Local Government:
Municipality Systems Act, 32 of
2000.
[7] On 30 March 2012,
Mrs Mtati, an attorney in the municipality’s Legal Services
Department, was advised telephonically by
Respondent’s
attorneys that the application would be heard on 3 April 2012.
According to Fani, she was unable to locate the
application papers
despite a “diligent” search.
[8] Mrs Mtati
subsequently took sick-leave from 31 March 2012 to 11 April 2012. On
the 3
rd
of April 2012 she did however send an sms to her
colleague, Mr Dotwana (who is also an attorney in the Legal Services
Department),
reminding him “
not to forget this case which
was appearing on the same date”.
Dotwana was however in a
meeting, and by the time that he had left the meeting it was already
too late for him to attend court.
He tried in vain to establish what
had happened in court by phoning the Registrar and the Respondent’s
attorneys.
[9] Mr
Swartbooi,
who appeared for the Applicants, submitted that the service upon
the municipality was fatally defective. He argued that Rule 4(1)
(a)
(vii) of the Uniform Rules of Court requires legal process to be
served on municipal managers or their secretaries. Similarly,
he
submitted, section 115(3) of the Local Government: Systems Act
requires that legal process be served on the municipal manager,
or a
person in attendance at the municipal manager’s office. He
argued that the service on Ms Dyakopu did not satisfy these
legal
requirements because she is the municipality’s general
secretary, and not attached to the office of the municipal manager.
[10] In my view these
submissions are without any merit.
[11] The Sheriff’s
return states that the application was served on Ms Dyakopu, a
receptionist ostensibly in control of, and
at the principal place of
business of the municipality. It is common cause that Fani’s
office is located at the Municipal
Buildings, Oxford Street, East
London, where the application papers were served. The sheriff’s
return is therefore
prima facie
valid, and I agree with Mr
Cole,
who appeared for the Respondent, that it is not open to
the Applicants to contest the validity of the service simply because
Ms
Dyakopu could not remember what she had done with the papers.
[12] I am also not
convinced that the explanation for the default is reasonable. It is
clear that Matiti, who is an attorney, had
known on 30 March 2012
that the application would be heard on 3 April 2012. She had
apparently told Dotwana, another attorney employed
by the
municipality, about the date of the hearing, and she had reminded him
about it on the morning of the 3
rd
of April 2012. They
have both been grossly negligent in failing to ensure that the
municipality had legal representation on the
date of the hearing. The
municipality is a metropolitan entity with vast resources at its
disposal, including a Legal Services
Department. It also regularly
instructs various firms of attorneys to act on its behalf. I am
therefore of the view that the failure
by Matiti and Dotwana to
ensure that the municipality was legally represented at the hearing
amounted to gross negligence.
Bona fide
defence
[13] Fani has averred
that the sale had lapsed because one of the suspensive conditions,
namely that the approval of the Premier
must be obtained, had not
been fulfilled. He stated that no such application had been made, and
the Premier had in fact not granted
her approval for the disposal of
the immovable property.
[14] Fani has however
been less than forthcoming with the court in this regard. At the
hearing of the matter Mr
Cole
had successfully applied for the
admission of a circular which the office of the Premier had addressed
to municipalities during
February 1995. That circular instructed
municipalities that:
“
...it
has been decided that the disposal of all Council owned land shall,
from the date of this circular be subject to the prior
approval of
the Member of the Executive Council enlisted with the portfolio of
Housing and Local Government. All Local Authorities
are therefore
required to obtain the necessary approval
before
the process of disposal of land is set in motion.”
[15] Furthermore,
during August 1996, the Regional Director of the Department of
Housing and Local Government, M.J. Sulelo, wrote
to the municipality
informing it that:
“
The
Minister of housing and Local Government has approved your
application for sale the above land in terms of Section 124 (1) (a)
of the Municipal Ordinance 20 of 1974.”
[16] In addition, it is
also instructive that during October 2011 the Municipality’s
interim Executive Director for Development
Planning and Management,
Ms Mbali Majeng, was of the view that all the conditions had been
fulfilled. In a letter to the municipality’s
attorneys, Bax
Kaplan, dated 3 October 2011, she stated that:
“
...all
conditions of establishment have been complied with and the
consolidation diagram has been approved by the Surveyor-General.”
[17] Mr
Swartbooi
submitted that these facts, which were disclosed by the Respondent,
still do not establish that the Premiers’ approval had
indeed
been granted. He submitted that approval by the MEC for Local
Government and Housing, in circumstances where the council
resolution
and the law require that the Premiers’ approval be obtained, do
not suffice.
[18] I do not agree.
The Premier had instructed municipalities to follow a certain
procedure if they wanted to dispose of land.
It appears that the
municipal officials had duly lodged an application in accordance with
the Premier’s directives. That
application had resulted in
approval by the MEC. The municipal officials appeared to have been of
the view that the approval had
been properly granted, and have acted
in accordance with this understanding.
[19] In the event, Mr
Swartbooi
was constrained to concede that it was the
municipality’s responsibility to apply for the Premier’s
approval. He could
therefore hardly challenge the validity of the
resolution on the basis of the municipality’s own failure to
comply with the
suspensive condition.
[20] Mr
Swartbooi
has also submitted that the Respondent has not established that
he was entitled to the order, as the original contract was between
the municipality and Mrs Saunders. This submission in my view also
has no merit. The Respondent has averred that Mrs Saunders sold
the
property to her husband, who in turn had sold it to him. He has
therefore established that he is the lawful successor-in-title
to Mrs
Saunders, and therefore entitled to take transfer of the property.
The Applicants have not been able to put up any facts
or averments to
gainsay these allegations. The basis on which they challenge the
Respondent’s
locus standi
is spurious and without any
merit.
[21] Mr
Swartbooi
also submitted that the resolution referred to the erf as being
“
approximately 515 square metres in extent”
. It
appears that after the erf had been surveyed it was established that
it was in fact 547 square metres in extent. He argued
that because
there was now a “substantial difference” between the size
mentioned in the resolution and the actual size
established after
survey, the municipality could no longer sell the land for the
original price.
[22] I disagree. The
property was clearly defined in the resolution and there could
therefore not have been any confusion as to
what had been sold. The
extent of the property was deliberately estimated because it had not
yet been surveyed. It was therefore
not open to the municipality to
insist that the price be re-negotiated if the land turned out to be
in excess of the estimated
size. Likewise could the buyer not insist
on a reduced price if it turned out to be smaller than the estimated
515 square metres.
[23] It appears at some
stage, and out of frustration with the inactivity on the part of the
municipality, the Respondent had made
an offer to pay R70 000 for the
land. He had however subsequently withdrawn the offer before it was
accepted, apparently on the
basis of legal advice, and insisted that
the sale proceed on the original terms.
[24] Mr
Swartbooi
argued that these subsequent developments mean that the parties had
in effect re-negotiated the price, but had failed to reach
agreement
in this regard. He submitted that there is therefore no binding
agreement regarding price, and hence the contract of
sale is inchoate
and invalid. I disagree. It is clear that the offer made to the
municipality was borne out of frustration on the
part of the
Respondent, and in an attempt to accelerate the transfer of the land.
He was however entitled to withdraw the offer
before the municipality
accepted it, and to insist that the transfer proceed on the basis of
the original resolution.
Is the
application
bona fide?
[25] Mr
Cole
has
submitted that the Applicant should be ordered to pay costs on a
punitive scale because Fani had deliberately and disingenuously
withheld important and relevant facts from the court. He referred in
particular to Fani’s categorical and unambiguous assertion
that
no application had been submitted for the Premier’s approval,
and that the approval had in fact not been granted as
required in
terms of the resolution.
[26] He argued that
Fani had deliberately withheld documents which clearly show, not only
that the necessary approval been granted,
but also that the relevant
municipal functionaries were aware of this fact, and have in fact
acted in accordance with the understanding
that all conditions had
been fulfilled.
[27] Mr
Swartbooi
however submitted that Fani’s assertions in this regard
were made in the
bona fide
belief that the approval of the
Premier, and not that of the MEC, was required. His averments in this
regard were therefore factually
and legally correct as the Premier’s
approval had in fact not been obtained.
[28] I agree with Mr
Cole
that Fani’s failure to disclose the relevant
documents and the fact that approval had purportedly been granted by
the MEC,
ineluctably leads one to the conclusion that this was done
deliberately and disingenuously in the hope that the Respondent would
not have been able to source these documents. Even if he had
genuinely believed that the MEC’s approval did not suffice,
he
should still have disclosed this fact; instead of bringing the court
under the impression that no approval had been granted.
His conduct
was regrettable and becoming of an official of his status.
[29] In summary then,
my findings are as follows:
First, the explanation
for their default provided by the Applicants is most unsatisfactory.
It is common cause that at least two
of the municipality’s
senior functionaries, who are both attorneys, were aware, as early
as 30 March 2012, of the set-down
date. They have been grossly
negligent in not ensuring that the Applicants were legally
represented at court;
Second, the defences
proffered by the Applicants have no merit. There are virtually no
prospects that the main defence, namely
that the Premier’s
approval had not been obtained, can succeed in the face of
incontrovertible documentary proof that the
approval of the MEC had
been obtained in accordance with the Premier’s directives. The
other defences similarly have no
merit for the reasons which I have
stated above; and
Third, I am not
persuaded that the application is
bona fide.
The Second
Respondent, being the statutory custodian of the municipal files
pertinent to this matter, was under a duty to disclose
all the
relevant facts to the court. I am convinced that he has
disingenuously withheld documents which are relevant to the
adjudication of this matter in an attempt to advance the
municipality’s case. I agree with Mr
Cole
that his
conduct is deserving of censure by way of a punitive costs order.
[30] For these reasons
I am of the view that the Respondents have failed to establish any of
the prerequisites for rescission of
the default judgment, and the
application must therefore fail.
[31] In the result the
following order shall issue:
(a) The application is
dismissed.
(b) The applicants are
ordered to pay the costs of the application on the attorney and
client scale.
_______________________
J.E SMITH
JUDGE OF THE HIGH
COURT
Appearances
Counsel for the Applicant : Advocate
Swaartbooi
Attorneys for the Applicant :
Makhanya Incorporated
Argyle Street
Werner Building
2
nd
Floor
EAST LONDON
Tel: 043 742 3049
Counsel for the Respondents :
Advocate Cole
Attorneys for the Respondents :
Catherine Gray Inc.
Tecoma House
21 Tecoma Street
Berea
EAST LONDON
Ref: ZABW/HUM10/0001/LM
Date Heard : 7 August 2012
Date Delivered :
24
August 2012