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2024
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[2024] ZAFSHC 156
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Zeus Shuttles and Coaches (Pty) Ltd and Another v Mangaung Metropolitan Municipality (5090/2023) [2024] ZAFSHC 156 (23 May 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges:
YES/NO
Circulate
to Magistrates:
YES/NO
CASE
No.:5090/2023
In
the matter between:
ZEUS
SHUTTLES AND COACHES (PTY) LTD
First
Applicant
LUNGI
AND SONS SERVICES (PTY) LIMITED
Second
applicant
and
MANGAUNG
METROPOLITAN
MUNICIPALITY
Respondent
JUDGMENT
BY:
VAN RHYN, J
HEARD
ON:
9 MAY 2024
DELIVERED
ON:
23 MAY 2024
[1]
This is an
interlocutory application for the joinder of the respondent, Mangaung
Metropolitan Municipality ("the Municipality")
as the
fourth respondent to the main pending proceedings
(the "review
proceedings"). The first applicant is Zeus Coaches (Pty) Ltd, a
private company of Bloemfontein
.
The second
applicant
is
Lungi and Sons
Services (Pty) Limited, a company with its main place of business at
Heidedal, Bloemfontein.
[2]
In
the review proceedings the applicants seek an order that the
continued use by the Member of the Executive Council: Free State
Provincial Government: Department of Police, Roads and Transport (the
"Department"), cited as the first respondent, of
Interstate
Bus Lines, cited as the second respondent,
for
the provision of subsidised road transport services to commuters in
the Free State Province be declared unlawful in terms of
the
provisions of the Promotion of Administrative Justice Act
[1]
("PAJA")
.
The
applicants furthermore seeks and order that any existing contract
concluded between the Department and Interstate Bus Lines
for
such services be struck down in terms of the provisions of section 8
of PAJA.
[3]
Further
declaratory relief,
inter
alia
,
compliance
with section 2 and 3 of the Public Finance Management Act
[2]
,
read
with section 2 of the Preferential Procurement Policy Framework
Act
[3]
and
section 217 of the Constitution, to facilitate an open tender process
for the provision of subsidised road transportation services
in the
Free State Province, is sought by the applicants in the review
proceedings. The review and setting aside of the existing
contract is
based on the contention that the Department has, for at least the
last 23 years, concluded such agreements with only
one service
provider, Interstate Bus Lines.
[4]
In summarising
of the background facts, I make no finding in respect of the merits
of the review application against the Department,
Interstate Bus
Lines, the Minister of Transport (cited as the third respondent) and
the Minister of Finance (cited as the fourth
respondent).
It is solely
stated in order to indicate the subject matter of the dispute between
the applicants and the Municipality
as well as the
Department.
[5]
The
applicants each provides public transport services in the Free State
Province
.
On
12 January 2023 the applicants addressed
a
letter (per email) to the Department with a request to implement the
provisions of section 41 of the National Land Transport Act
[4]
(the "NLTA
"
)
which empowers contracting authorities to conclude negotiated
contracts for purposes of economic empowerment of small operators
and/or previously disadvantaged persons. The applicants contend that
they are registered, licenced and 100% black owned public
transport
service
providers.
However,
notwithstanding
the endeavour to phase out the previous system regarding public bus
transportation in South Africa and the agreement
to enter into
interim contracts that would preserve operations with minimal
disruption of commuter services, no competitive bidding
processes
have been embarked upon, at least within Bloemfontein.
[6]
The applicants
did not receive any reply to their request sent during January 2023
and subsequently instituted the review proceedings
in an endeavour to
obtain the Record of Decision ("ROD") the Department has to
file in terms of Rule 53 of the Uniform
Rules of Court. The
applicants anticipated that the contents of the ROD would enable them
to peruse the procurement processes followed
by the Department, if
any, since the interim contracts came to an end. Depending on what is
revealed by perusing the ROD, the
applicants
would then reconsider and
possibly
supplement their grounds for
review.
[7]
The Department
has since
filed the ROD as it was compelled
to do in terms
of Rule
53.
The Department has not provided the reasons for which Rule 53 caters
and as yet it is unclear to the applicants what exactly
the
Department's reasons are for not awarding subsidised bus
transportation contracts, compliant with section 217 of the
Constitution
and subservient legislation
.
[8]
According to
the applicants, the ROD, revealed a stance on the part of the
Department
,
and ostensibly
the Minister of Transport as well, that they might be of the view
that the fundamental reason why there has not been
any compliance
with the procurement legislation governing the awarding of State
contracts is because of the Municipality's inaction.
[9]
The
applicants contend that the NLTA does not grant the Provincial
Government the power to conclude new subsidised contracts as
was the
case with the Transitional Legislation. The NLTA provide for the
national land transport system
initiated
by
the National Land Transport Transition Act
[5]
.
Section
40 of the NLTA (Chapter 5) which regulates the "Contracting of
Public Transport Services", requires provinces
and
'planning
authorities'
(a municipality is a planning authority in relation to planning
functions) to take steps, as soon as possible after
commencement of
the NLTA, to
'integrate
services
subject to contracts in their areas' into the larger transport
system.
[10]
The
municipal sphere of government has certain responsibilities
pertaining to the development of a land transport policy and strategy
within its area based upon national and provincial guidelines,
preparing transport plans, ensuring the implementation thereof,
monitoring its performance in achieving its goals and objectives
and
concluding subsidised service contracts, commercial service contracts
and negotiated contracts contemplated in section 41(1)
of the NLTA
with <?perators for services within their areas.
[6]
[11]
In terms of the provisions of section 11(2) of the NLTA, the Minister
of Transport may assign any function
contemplated in subsection
(1)(a) to a province or municipality (subject to certain provisions)
and the MEC may assign any function
contemplated in subsection (1)(b)
to a municipality (subject to certain provisions). Any municipality
may request the Minister
or MEC to assign a function contemplated in
subsection (1)(a) or
(b)
to it, subject to certain provisions, where such municipality has an
acceptable integrated transport plan.
[12]
The application for joinder
is opposed by
the Municipality
on the basis
that the relief sought
by
the
applicant
in
the
review
proceedings
concerns
a
declaration
of
unlawfulness of
the contract
between the
Department and
Interstate Bus Lines of which the Municipality
is
not
a
party
to. It is contended
that the
Municipality
has played
no
·
role in the
decision to procure
the services
of Interstate
Bus
Lines and
therefore
has
no
direct
and/or
substantial
interest
in
any
order
a
court
may
make
in
the
review
proceedings.
It is
furthermore contended by the Municipality that even if it were to be
accepted that, sometime in
the unknown
future, the Municipality may be the contracting authority for,
inter
alia
,
subsidised
service contracts, such a future uncertain interest remains
contingent upon the Minister assigning the contracting authority
function, in terms of the NLTA, to the Municipality
.
[13]
Where a party has a direct and substantial interest in any order a
court may issue, or if such order cannot
be sustained or carried into
effect without prejudicing that party, the joinder of that party is
necessary unless the court is
satisfied that the party waived his
or
her
right
to
be
joined
or
agreed
to
be bound
by
the
order
.
[7]
The
court
has
the
inherent
power to order the joinder of further parties in an action which has
already begun in order to ensure that
person's
interest in the subject matter of the dispute, and whose rights may
be affected by the judgment,
are
before court.
[14]
What the ROD
disclose is that on 9 March 2018 the Department informed Interstate
Bus Lines that its vision is to fully restructure
the bus
transportation network and
integrate
the public
transport as a whole by,
inter
a/ia,
providing
opportunities to smaller and emerging public transport operators.
Reference is made to a
"transformation
process"
which would commence on 1 April 2018 and Interstate Bus Lines was
called upon to participate in whatever process the
Department
embarked upon.
[15]
In further
correspondence the Department informed Interstate Bus Lines and with
reference to section 12(1) of the NLTA that"
...
in preparation
of the introduction of new bus service
(sic)
which will
be in partnership with Municipalities within your area of operation,
the Department is provisionally extending your contract
for a period
of 12 months with effect from 1 November 2018
...
".
On
1
October
2019
the
Department
again
informed
Interstate Bus Lines
that the Municipality is in the process of finalising the development
of an integrated public transport network
and intends to implement
Phase 1 during November 2019. Pursuant to the finalisation of the
development of the proposed network
for public transport, the
Department was inclined to devolve the contracting service to the
Municipality as prescribed by the Public
Operations Grant Framework
2019/2020.
[16]
Appended to
the Municipality's answering affidavit is a letter by the Minister of
Transport, dated 8 February 2023 addressed to
the MEC of the
Department wherein reference is made to the implementation process
and the necessity to comply with the prevailing
legislation and
support the overarching public transport policy. The Department is
furthermore referred to the provisions of section
11(1)(c)(xxvi) of
the NLTA which confers the powers to conclude new subsidised
contracts to municipalities and the possibility
that the Department
may enter into an agreement with the Municipality for the joint
exercise or performance
of these
powers and functions.
[17]
The
correspondence between the Department
and the
Minister of Transport contained in the ROD indicates that the
Department has been extending the current bus transport contracts
with
Interstate
Bus
Lines
on
a
month-
to- month
basis
since
1
November
2019,
the reason being, the inaction on the part of the municipalities. It
is incorrect that the review application merely concerns
the
agreement already concluded between the Department and Interstate Bus
Lines.
Apart
from the declaratory relief that is sought and the striking down of
any contract, the applicants furthermore seek an order
in terms of
which the Department is to embark upon a procurement process that is
compliant with the relevant legislation.
[18]
The Department has not as yet revealed its stance in respect of main
review application but based upon the
contents of the documents
contained in the ROD, the Department may very well indicate that it
is now the responsibility of the
Municipality to conclude such
contracts, subject to a proper procurement process in future. In the
event that the Department lays
the blame for the inaction at the door
of the Municipality, which at this stage seems quite possible, the
Municipality ought to
explain what its contribution to the
implementation of the NLTA has been, where the process is currently,
what still stands in
the way of the transition and exactly what its
response is to the finger pointing by the Minister and/or the
Department regarding
the delays caused by municipalities (in general)
and whether any such delays can be attributed to the Municipality.
[19]
To adjudicate this matter it is necessary
to consider
the nature, the manner in which and the extent to which, the order of
a court hearing the review application may affect
the interests of
the Municipality. Taking into consideration the provisions of the
NLTA, the allegations made by the Minister of
Transport, who has
filed a notice to abide by the decision of the court in the review
application
,
and the
Department have raised regarding the failure of municipalities to
contribute or adequately contribute to the implementation
of all or
certain of the provisions of the relevant legislation, I am of the
view that the joinder of the Municipality is necessary.
[20]
Consequently, because the rights of the Municipality might be
affected by the declaratory order of the court
in the review
proceedings, I am of the view
that
the
Municipality has a direct and substantial interest in the result of
the review proceedings. It is not desirable that a decision
should be
given on the implementation of the provisions of the NLTA
vis-a-vis
the
applicants without an opportunity having been given to the
Municipality to respond. The Municipality has a 'legal interest'
in
the subject matter
of
the
litigation
between
the
parties
[8]
The
possibility
of
such
an
interest
is
sufficient and it is not necessary for this court to determine that
it in fact exists.
The
Municipality has not communicated
its
intention to abide by the order to be given by the court hearing the
review application nor has
it
waived
the right to participate in the proceedings.
[21]
It follows
that the joinder application must succeed. The applicants did not
seek an order of costs and sought an order that the
costs of this
application be costs in the main review proceedings. The applicants
obviously did not anticipate that the application
for joinder would
be opposed having regard to the obligations impose
d
·
upon
municipalities in
terms of the provisions of the NLTA and the stance by the Department.
However, given
the opposition by the Municipality for its joinder the applicants
seek costs against the Municipality on scale B.
There is no reason
why costs should not follow the result.
[22]
ORDER:
1.
The Respondent
is joined as the Fifth Respondent in the main review proceedings
under Case No 5090/2023.
2.
The Applicants
shall serve all affidavits and pleadings (which include the Record of
Decision already filed) upon the Respondent,
within 10 days
from the date of this order.
3.
The Respondent
shall furthermore provide to the Applicants all such documents and
reasons as it deems necessary, in amplification
of the existing
Record of Decision filed by the First Respondent in the main review
proceedings, on or before 24 June 2024.
4.
The Respondent
shall file an opposing affidavit
,
if any, to the
main review proceedings under the above case number, on or before 15
July 2024.
5.
The
respondent
shall pay the costs of
this joinder
application
on
scale B.
I
VAN RHYN
JUDGE
OF THE HIGH COURT,
FREE
STATE DIVISION, BLOEMFONTEIN
On
behalf of the Applicants:
ADV.
S GROBLER SC
Instructed
by:
PEYPER
ATTORNEYS
BLOEMFONTEIN
On
behalf of the Respondent:
ADV.PT MASIHLEHO
Instructed
by:
PHATSHOANE
HENNEY ATTORNEYS
BLOEMFONTEIN
[1]
Act
3
of
2000.
[2]
Act
1
of 1999.
[3]
Act
5 of
2000.
[4]
Act
5 of 2009.
[5]
Act
22
of
2000
.
[6]
Section
11(c)(i)
and
(xxvi).
[7]
Amalgamated
Engineering
Union
v Mini
s
ter
of Labour
1949
(3)
SA
637
(A)
a
t
659;
Aquatur
(Pty) Ltd v
Sacks
and
Others
1989 (1) SA 56
(A) at 62.
[8]
Henri
Viljoen (Pty) Ltd
v
Awerbach
Brothers
1953
{2) SA 151
(O)
at
169
and 170
.