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[2011] ZAECBHC 4
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Siyila v MEC for Education, Eastern Cape and Another (110/2011) [2011] ZAECBHC 4 (15 December 2011)
IN THE
EASTERN CAPE HIGH COURT, BHISHO
CASE NO: 451/09
In the
matter between:
COPPERMOON
TRADING 13 (PTY) LTD
…........................................................
Applicant
and
THE
GOVERNMENT OF THE EASTERN
CAPE
PROVINCE
…....................................................................................
1
st
Respondent
THE
DEPARTMENT OF PUBLIC WORKS
…............................................
2
nd
Respondent
______________________________________________________________________
JUDGMENT
Y
EBRAHIM J:
Introduction
There
are two applications before Court. In the first application, the
applicant seeks an order in terms of Rule 30(A)(1) compelling
the
first and second respondents to make available for inspection and
copying:
‘
1.
Copy of minutes of the Provincial Executive Council held on 12
September 2007;
2. Copy of minutes of the
Provincial Executive Council held on 10 October 2007; and
3. Copy of minutes of the
Provincial Executive Council held on 25 February 2009.’
In
the second application, the applicant seeks an order in terms of
Rule 30(A)(2) for the defence of the first and the second
respondent
to be struck out.
In
the main application, in which these interlocutory applications
originate, the applicant applies for an order in the following
terms
1
:
‘
1.
That the Deed of Settlement signed by the Applicant on 19 October
2007 and signed by the First and Second Respondents on 29 October
2007 and 23 October 2007 respectively, be made an Order of Court
.
2. That the terms of the court
order be embodied in a written lease agreement to be concluded by the
parties within 14 days of the
date of this order.
’
The
Deed of Settlement
2
forming the subject matter of the main application records the terms
of the agreement concluded by the parties when they settled
the
action the applicant had instituted against the first respondent and
the Member of the Executive Council of the Government
of the
Province of the Eastern Cape for the Department of Roads and Public
Works wherein he claimed specific performance, alternatively
damages. Presumably because the Department of Roads and Public Works
subsequently became separate departments, the Department
of Public
Works has been cited as the second respondent in the main and
interlocutory application. Since there is no dispute
that the proper
parties are before Court I refrain from any comment in this regard.
Factual
background
The
following is the factual background to the present application.
During March 2004 interested parties were invited, via a newspaper
advertisement, to tender for the purchase of an immovable property
described as the Amatola Sun, Bisho, which the Eastern Cape
Government owned. The applicant responded by submitting a written
offer to purchase the property for R5 050 000,00.
On
18 June 2004 the applicant was notified
3
its offer had been accepted. Subsequently the applicant received a
deed of sale
4
and returned it duly signed
5
to the respondents on 31 August 2004. Although the applicant
tendered compliance with the respondents’ requirements and
the
terms and conditions of the deed of sale, transfer of the property
in favour of the applicant did not take place.
The
Legal Services office of the second respondents, in a letter dated
10 May 2005,
6
thereupon conveyed the following to the applicant’s attorneys:
‘
1.
Reference is made your letter of the 04 (
sic
)
instant.
2. The Department acknowledges
the fact that it communicated with your client advising them that
their tender was successful.
3. The Department ought not to
have done that as the tender amount was above the Departmental
delegations.
4. The power to award such a
tender was vested with the Provincial Tender Board.
5. A meeting was held between
the then Head of Department Mr Mafu and directors of your client
wherein they were advised of the
procedural error.
6. The Department then forwarded
the recommendations to the Tender Board for adjudication and award
but has since withdrawn the
recommendations on discovery of a
fundamental flaw in the process.
7. The property will therefore
not be transferred to your client as the tender was not approved by
the Tender Board.
Yours faithfully
________________
Z. FANANA
LEGAL SERVICES’
In a
further letter dated 27 June 2005
7
Legal Services stated:
‘
Reference
is made to the above matter and to your letter of the 7
th
instant.
In terms of a practice and
procedure that has been adopted by the Department where the
Department intends to dispose of any Government
Property, the
intended disposal must first be referred to the Provincial State Land
Disposal Committee (PSLDC) for such committee
to consider and make
recommendations to the MEC on such disposal.
In the purported sale of Amatola
Sun referral to the PSLDC was never done and that amounted to a flaw
in the process.
’
This
led to the applicant instituting the aforementioned action
proceedings which the respondents defended. In their plea the
respondents set out two defences. First, there had been
non compliance with the Eastern Cape Land Disposal Act, 7 of
2000; second, the author of the letter accepting the applicant’s
offer to purchase the property did so without authority
and the
contract was therefore unenforceable. As I have stated previously,
the action was eventually settled on the terms recorded
in the Deed
of Settlement, which included the settlement agreement being made an
order of Court.
The
applicant prepared a draft Notarial Deed of Lease as the Deed of
Settlement provided that the property was to be leased to
it.
Discussions ensued between the legal representatives of the parties
to settle amendments thereto and on 4 August 2008
the lease
agreement was delivered to the offices of the State Attorney for
signature by the respondents. Thereafter there were
further
communications but these did not culminate in the lease agreement
being signed.
Instead
the State Attorney, at the behest of the respondents, wrote to the
applicant on 11 March 2009
8
in these terms:
‘
Reference
is made to the above and the settlement negotiations herein.
Kindly be advised that the
Provincial Government is not in a position to proceed with the
existing terms of the settlement and the
draft lease agreement. The
decision was taken at a meeting of the Provincial Executive Council
held on the 25
th
February 2009 after legal advice
has been obtained with regard to Government’s constitutional
and statutory obligations in
respect of provincial immovable
property.
Consequently, the Department of
Public Works is unable to sign and conclude the proposed draft lease
agreement in its current form.
Your co operation herein is
appreciated.
Yours faithfully
__________________
S. MGUJULWA (MR)
FOR:
STATE ATTORNEY (BHISHO)
’
In
consequence hereof the applicant launched the main application for
the Deed of Settlement to be made an order of court and
for the
terms of the court order to be embodied in a written lease agreement
to be concluded by the parties.
In the respondents’ answering affidavit in the main
application the deponent, Sibongile Muthwa, explained how the
present
impasse had arisen and disclosed
9
that the Provincial Executive Council had resolved at a meeting held
on 12 September 2007 that the out of court settlement be
supported.
As Director General and Cabinet Secretary, Dr S Muthwa
informed the Premier and all Members of the
Executive Council in a
missive dated 27 September 2007
10
of the resolution taken ‘
at the “85
th
Executive Council Meeting (3
rd
term) held on 12 September
2007
’. Dr Muthwa also revealed
11
that at a meeting of the Provincial Executive Council held on
10 October 2007 the draft Deed of Settlement was presented
and
conditional approval to sign the deed was given to the Member of the
Executive Council for Finance and the Member of the
Executive
Council for Public Works. The MEC for Finance was to sign on behalf
of the first respondent and the MEC for Public
Works was to sign in
his capacity as the second respondent, but ‘
approval
was conditional upon the Head: Shared Legal Services in the office
of the Premier first seeking and obtaining external
legal advice to
ensure that the settlement was not at variance with relevant legal
principles
.’
Analysis
Mr
Quinn SC, who appeared for the applicant, submitted that the
respondents’ opposition to the order sought by the applicant
in the main application was based on different grounds to the
defence pleaded in the action proceedings. The respondents, he
said,
now asserted ‘
the tender
amount was above the Departmental delegations
’ and
‘
[t]he power to award
such a tender was vested with the Provincial Tender Board
.’
The respondents’ defence was based on the resolutions of the
Executive Council that Dr Muthwa had referred
to in paragraphs
4 and 6 and 7 and 18.8 of the answering affidavit in the main
application. He contended that these minutes and
those of the
Executive Council meeting of 25 February 2009, or relevant portions
thereof, were of ‘
material
relevance to the defence of non compliance with conditions
precedent
’ and the respondents were obliged to produce
the minute.
12
Mr
Heunis SC, who appeared for the respondents, attacked the Rule
35(12) notice on the basis that it did not refer to any paragraphs
in the answering affidavit in the main application in which
reference was made to the minutes of any of the meetings referred
to
in the notice. The respondents, in their answering affidavit in this
application, experienced no difficulty in identifying
which minutes
were being referred to in the notice.
13
I find no merit in the contention that this rendered the notice
improper.
Even
though the respondents deny that paragraphs 4 and 18.8 of the
answering affidavit in the main application contain references
to
resolutions of the Executive Council, they admit there are
references in paragraphs 6 and 7. The respondents dispute they
are
obliged to produce any of the minutes and contend that while the
applicant may be entitled to the resolutions it does not
mean that
they have to produce the full minutes of the Executive Council
meetings.
The respondents, by their own admission, referred in the main
application
14
to the resolutions taken by the Executive Council on 12 September
2007 and 10 October 2007 and
prima facie
they are
therefore obliged to produce them for the applicant’s
inspection.
15
Annexure “AA1” is a copy of the resolution taken on
12 September 2007 and not the minute of the meeting in which
it
was adopted. The respondents are obliged to produce the minute for
inspection and copying by the applicant.
16
The applicant is entitled to the entire minute of the meeting and
not merely the portion that the respondents have chosen to
rely on.
17
The position regarding the resolution taken on 10 October 2007
is no different. Notwithstanding the respondents’ claim
that
their defence is not based on this resolution ‘
save
to the extent that it explicitly foreshadows external legal advice
to ensure compliance with the law which advice could notionally
have
been inconsistent with the contents of the Deed of Settlement
Agreement
’, they are nevertheless required to produce
the minute. The Rule does not distinguish between ‘
documents
upon which the action or other proceedings is actually founded and
documents possessing merely evidentiary value
.’
18
There
is no merit in Dr Muthwa’s assertion
19
that ‘
[t]he fact
that copies of the minutes of the relevant Executive Council
meetings may exist and that such copies can be produced
by
transcribing tape recordings, does not entitle the Applicant to
copies thereof.
’ The Rule provides for production of
the specified document and the respondents cannot evade compliance
therewith in this
manner.
In
regard to the minute of the Executive Council meeting of 25 February
2009 the fact that reference thereto appears in an annexure
and not
directly in the affidavit does not mean that the provisions of Rule
35(12) were not activated. The respondents confirmed
20
that what the State Attorney had stated in the letter dated 11 March
2009 was correct. The letter of the State Attorney clearly
stated
that the Provincial Executive Council had taken a decision at a
meeting held on 25 February 2009 that ‘
the
Provincial Government was not in a position to proceed with the
existing terms of the terms of the settlement and the draft
lease
agreement
.’
21
This permits of no other conclusion but that the respondents were
referring directly to the resolution taken at the meeting of
25 February 2009.
22
It is not necessary, therefore, to resort to inferential reasoning
to deduce whether the particular minute exists and the applicant
is
entitled to demand production of the minute of this meeting.
23
The
onus is on the respondents to present facts that relieve them of the
obligation to produce the documents.
24
They have not done so. The respondents do not claim that the
documents which the applicants seek are confidential or protected
by
privilege or are irrelevant. Their objection to producing the
documents is that the applicant is not entitled to the full
minutes
but only those portions of the minutes which do not deal with the
issue of the Amatola Sun Hotel. There is no merit in
this
contention. If the rest of the minutes hold no benefit for the
applicant the respondents have nothing to fear from producing
the
entire minute. If, on the other hand, there is anything of benefit
in the whole minute ‘
it
is right and fair
’ that the applicant should be able to
refer and rely on it.
25
The
documents demanded by the applicant clearly have evidentiary value.
The respondents have not presented a valid reason justifying
their
refusal to produce the documents.
26
In the circumstances, I am satisfied that the applicant has
established that it is entitled to the orders it seeks in both
applications.
Costs
It is
trite that costs will follow the result in the absence of cogent
reasons to order otherwise. The respondents have not presented
any
reasons that persuade me to deviate from this. The applicant is
accordingly entitled to an order for costs in its favour.
In
the result, there is an order in the following terms:
The
respondents are ordered to make available for inspection and copying
within a period of fifteen (15) days hereof:
Copy
of minutes of the Provincial Executive Council held on 12 September
2007;
Copy
of minutes of the Provincial Executive Council held on 10 October
2007;
Copy
of minutes of the Provincial Executive Council held on 25 February
2009; and
Failing
compliance with paragraphs 1(a), (b) and (c) aforesaid, the
applicant is granted leave to approach this Court on the same
papers, suitably amplified, for an order that the defence of the
first and second respondents be struck out.
The
respondents are ordered to pay the costs of the Rule 30(A)(1) and
Rule 30(A)(2) applications.
_________________________
Y EBRAHIM
JUDGE OF THE HIGH COURT 11 April 2010
Heard on: 23 November 2010
Judgment delivered on: 14 April 2011
Counsel for the Applicant: R P Quinn SC
Attorneys for the Applicant: Smith Tabata Inc
KING WILLIAM’S TOWN
Counsel for the Respondents: J C Heunis SC
Attorneys for the Respondents: State Attorney
EAST LONDON
COPPERMOON TRADING 13 (PTY)
LTD v GOVT OF EC & DEPT PUBLIC WORKS.CVJ
1
Main
Application, record at p 2
2
Main
Application, record at p 42 – A
nnexure
“VN2”
3
Main
Application, record p 27
4
Main
Application, record pp
28 to 33
5
Main
Application, record pp
34 to 38
6
Main
Application
, record p 39
7
Main
Application, record p 41
8
Main
Application, record p 48 – Annexure “VN 4”
9
Main
Application, record pp 57-59 – par
agraphs
4, 5 and 6
10
Main
Application, record p 69 – A
nnexure “AA1”
11
Main
Application, record pp 59-60 – p
aragraph 7
12
Magnum
Aviation Operations v Chairman, National Transport Commission
1984 (2) SA 398
(W) at 400C;
Unilever
plc and Another v Polagric (Pty) Ltd
2001
(2) SA 329
(C) at 336I
13
Unilever
plc and Another v Polagric (Pty) Ltd
(
Supra
fn 12)
at 338J-389A; See also
Penta
Communication Services (Pty) Ltd v King and Another
2007
(3) SA 471
at para [15] and
Gorfinkel v
Gross, Hendler & Frank
1987 (3) SA
766
(C) at 774D
14
Rule
30A(2) Application, record p 21 – paragraphs 10.2 and 10.3
15
Magnum
Aviation Operations v Chairman, National Transport
Commission
(
supra
)
at 400C;
Penta Communication Services
(Pty) Ltd v King and Another
(
supra
fn 12) at 340I
16
Protea
Assurance Co Ltd v Waverley Agencies CC and Others
1994 (3) SA
247
(C) at 248E-J
17
Supra
fn 16 at 249B-C
18
Erasmus
v Slomowitz
(2)
1938 TPD 242
at 244
19
Rule
30(A)(2) Application, record p 22 – paragraph 11.3
20
Main
Application, record p 76 – paragraph 18.8
21
Main
Application, record p 48 – Annexure “VN4”
22
Supra
fn 16 at 248H and
supra
fn 13 at 475I-J to 476A
23
Supra
fn 16 at 248E-J
24
See
Penta Communication Services (Pty) Ltd
v King and Another
(
supra
fn 13) at para [30]
25
Supra
fn 16 at 249B-F
26
Unilever
plc and Another v Polagric (Pty) Ltd
(
Supra
fn 12)
at 340I-J