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[2008] ZANCHC 77
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Tauris Garden Trading 500 CC v Khara Hais Municipality (1595/2008) [2008] ZANCHC 77 (15 December 2008)
Reportable: Yes / No
Circulate to Judges:
Yes / No
Circulate to
Magistrates: Yes / No
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern Cape Division)
Case
no: 1595/2008
Date
heard: 2008-12-03
Date
delivered: 2008-12-15
In
the matter of
:
TAURIS
GARDEN TRADING 500 CC APPLICANT
versus
KHARA
HAIS MUNICIPALITY RESPONDENT
Coram:
MAJIEDT
J
JUDG
MENT
MAJIEDT
J:
This
is
the
return day of an urgent application for a prohibitory interdict in
terms whereof the Applicant seeks an order against the
Respondent,
restraining it from interfering in any way with the Applicant’s
performance of its contractual obligations
under contract number
TK015/2008, in respect of the resealing of streets in Upington. The
application for an interim order was
brought on extreme urgency
(virtually as an
ex
parte
application,
given the fact that the application has been launched with less than
two hours’ notice to the Respondent).
On
the return day the application
is
opposed by the Respondent. A number of preliminary issues have been
raised by the Respondent on its papers and in argument,
in addition
to the extensive responses and submissions in respect of the
Applicant’s averments on the merits. At the outset
I must
point out that in the answering affidavit, the Respondent in
particular challenged whether the matter was indeed as urgent
as the
Applicant initially made it out to be and also pertinently
challenged the authority of the deponent to the Applicant’s
founding affidavit, one Omar Fortune, to bring the application on
behalf of the Applicant close corporation. Quite astoundingly,
these direct challenges were left completely unanswered by the
Applicant in a replying affidavit which can only be described
as a
shoddy document and completely lacking in substance. This omission,
whether deliberate or not, will have grave consequences
for the
Applicant as I will show in due course. It is trite that an
Applicant is obliged to answer and refute in his replying
affidavit
the case put up by a Respondent in the answering affidavit.
See in
this regard,
inter
alia
:
Reiter
v Bierberg and others 1938 SWA 30.
SMM
Holdings (Pty) Ltd v Southern Asbestos Sales (Pty) Ltd
[2005] 4 All
SA 584
(W)
at
599 E.
I shall revert to this
particular aspect later.
It is
common cause
that
a written agreement was concluded between the parties on 6 October
2008. In terms thereof the Applicant was selected as
the preferred
tenderer in respect of the resealing of the streets in Upington. By
way of reference the terms of the agreement
was set out in
Applicant’s general conditions of contract which was
incorporated into the parties’ written agreement.
Also by
way of reference the General Conditions of Contract for Road and
Bridgeworks for State Road Authorities (“
Colta”)
has also been incorporated into the contract. On the merits,
concerning the alleged unlawful suspension of works by the
Respondent,
the Applicant relies on clause 42 of Colta, which
provides that:
“
The
contractor shall, under the written order of the engineer, suspend
the progress of the works or any part thereof for such time
or times
and in such manner as the engineer shall order and shall, during such
suspension, properly protect the work so far as
is necessary.”
It is
the Applicant’s case that the suspension of works has not
occurred in accordance with the
aforementioned
clause in Colta. Given my ultimate finding in this matter it is not
necessary to deal with this aspect at this juncture.
While
there is considerable merit in the Respondent’s contention
that the Applicant was not justified in bringing the application
on
short notice
as
it did, I am satisfied that there was sufficient urgency for the
Applicant to launch the application on short notice. This
urgency
was precipitated by the actions of Mr. H. Auret, the Respondent’s
acting director for technical services, on 7
November 2008 through
his instruction to a Mr. Ashley Williams, an employee of the
Applicant, to summarily stop all work on the
contract. The contract
was due to expire on 5 December 2008, hence the urgency of the
matter. For the reasons that follow,
I do, however, uphold the
Respondent’s contentions with regard to Mr. Omar Fortune’s
lack of authority to bring the
application on behalf of the
Applicant close corporation.
In
the case of a corporate entity, such as a close corporation, a
resolution of the close corporation that the proceedings
have
been properly authorised, may constitute sufficient proof of
authority to act. See,
inter
alia
.:
Poolquip
Industries (Pty) Ltd v Griffin and Another 1978 (4) SA 353
(W)
.
See
also:
Ganes
and Another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA)
at par [19], 624 F-J, where an attorney deposed to an affidavit
declaring that he was duly authorised to institute proceedings
on
behalf of the Respondent in that matter. The facts are of course
different in the present matter and, unlike in the Ganes–case,
supra
,
the authority of the deponent Fortune to institute the proceedings
was directly and pertinently challenged by the Respondent.
The said Omar Fortune
purports, in his founding affidavit, to derive his authority to act
on behalf of the Applicant close corporation
from a resolution
which was attached to the founding affidavit. That resolution
reads as follows:
“
RESOLUTION
The members of
Tauris Garden Trading 500 CC on the 10
th
November 2008 at Century City Cape Town resolved that Tauris Garden
Trading 500 CC represented by Omar Fortune is authorised to
depose to
the affidavit and to bring the application on behalf of Tauris Garden
Trading 500 CC in the matter against the Khara
Hais Municipality,
Upington.
DATED AT CAPE TOWN
ON THIS THE 10
TH
DAY OF NOVEMBER 2008.
________________ (SIGNED)
MEMBER
R.
TIKA
”
In the
answering affidavit the
Respondent
points to the fact that a company search had revealed that the
members of the Applicant close corporation are the following:
a) “Ticka, Anisha
Pragalathan”
b) “Ticka,
Rajemdhra Lakhman”
It is
plain that the person who had signed the ostensible resolution,
quoted above, has a last name that does not resemble any of
those
revealed in the company search. In addition, it is not clear whether
“
R.
Tika”
(assuming that it is supposed to be “
R.L.
Ticka”
)
also signed the resolution on behalf of the other member. The matter
is further considerably complicated by the fact that, as
the
Respondent alludes to in the answering affidavit, in the tender
documents Fortune was cited as a member of the Applicant close
corporation. This, on the evidence of the company search, is
patently incorrect and was correctly conceded thus by the Applicant.
As I
have stated, the Applicant made no effort whatsoever,
notwithstanding this express denial
and
challenge to the authority of Fortune, to deal with this aspect in
its replying affidavit. I was quite taken aback when told
from the
Bar by Mr. Coetzee that this failure is due to an “
oversight”
.
It is beyond comprehension how such a material direct challenge can
be overlooked. It is not always necessary to attach in
motion
proceedings to the application a resolution authorising the
institution of proceedings on behalf of an artificial person
(such
as a close corporation) and normally a deponent’s allegation
that he/she is duly authorised would suffice in the
absence of a
challenge to his/her authority.
See:
SWA
National Union v Tjozongoro and others 1985 (1) SA 376
(SWA)
at 381 E.
Where,
however, a resolution authorising a person to institute proceedings
is attached a court, in deciding whether such person
is in fact
authorised to act and to bring the proceedings, can only interpret
that resolution itself.
In
SWA
National Union v Tjozongoro and others
,
supra
,
this was indeed the case where the president of the applicant union
was purportedly authorised to institute proceedings. In his
judgment
on this aspect, Strydom J held as follows at 381 F:
“
However, where, as in this
case, the resolution authorizing the president to institute
proceedings and setting out the powers given
to him, is attached, the
Court, in deciding whether the president acted within his authority
can in my opinion only interpret
the resolution for this is the very
foundation on which he based his allegation that he was duly
authorized.”
Mr.
De Bruyn
,
for the Respondent, has drawn my attention to the judgment in
Cyberscene
Ltd and others v i-Kiosk Internet and Information (Pty) Ltd 2000 (3)
SA 806 (C)
at
para [9] to [11] where Hlophe DJP (as he then was) held that where
proof of the authority of the person purporting to represent
a
company is absent, a court has a discretion to permit reliance on
evidence in a replying affidavit of the retrospective rectification
of the relevant conduct. He referred to the leading judgment in
this regard, namely
Moosa
and Cassim NNO v Community Development Board 1990 (3) SA 175
(A)
in
support of his decision. As stated, in the present matter the
Applicant has not even attempted to avail itself of this opportunity
in the replying affidavit, despite a direct challenge.
The
Applicant
has
woefully failed to meet the challenge regarding Fortune’s
authority to act and, given the totality of the facts and
circumstances surrounding this particular issue (including the fact
of Fortune having been misrepresented as being a member of
the
application close corporation in the tender documents), I hold that
the Applicant has failed to prove Fortune’s authority
to
institute these proceedings on behalf of the Applicant. Mr. De
Bruyn has correctly pointed out that Fortune’s emphatic
denial
in the replying affidavit can safely be rejected as false and
disingenuous. It is correct as he argues that, if Fortune
was
indeed duly authorised by the Applicant close corporation, the
failure to produce any form of documentary proof in support
of this
or any explanation for such failure, warrants an inference that no
such authority in fact exists.
Mr.
Coetzee has submitted that, in the event that I find for the
Respondent on this point, namely that there is no proof of authority
for Fortune
to
bring these proceedings on behalf of the Applicant, I should merely
strike the application from the roll and make no order
as to costs.
This would be an incorrect route to follow in my view. There is
presently a rule
nisi
,
obtained on an urgent basis, and same will have to be discharged and
a costs order ought to be made. Striking the matter from
the roll
would leave the rule
nisi
in
limbo, which would create an intolerable situation in law.
See:
SWA
National Union v Tjozongoro and others
,
supra
at
3874 A-B where Strydom J discharged certain orders on the basis that
there was no authority to apply for the said orders.
It is
self-evident that the Applicant has failed on a technicality and can
therefore re-enroll the matter for hearing once the fatal
defect in
its papers has been cured, should it choose to do so.
I issue the following
order:
THE RULE NISI ISSUED
ON 11 NOVEMBER 2008 IS HEREBY DISCHARGED WITH COSTS.
___________
__
SA MAJIEDT
JUDGE
FOR
THE
APLICANT : ADV
WJ COETZEE
INSTRUCTED
BY
: ENGELSMAN
MAGABANE INC
FOR
THE PLAINTIFF : ADV WJ DE BRUYN
INSTRUCTED
BY
: VAN
DE WALL & PARTNERS