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[2024] ZALMPPHC 86
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Khari Investments (Pty) Ltd v Mopani District Municipality (5424/2018) [2024] ZALMPPHC 86 (12 August 2024)
FLYNOTES:
MUNICIPALITY
– Oral agreement –
Enforceability
– Supply chain management policies – Whether oral
agreement can be concluded by deviating from SCM policy –
Failure to follow prescribed procedures relating to expenditure
decisions results in irregular expenditure – Unlawful
–
Peremptory provision prohibits conclusion of oral agreements –
Non-compliance with provisions renders oral
agreement
unenforceable – Claim dismissed – Local Government:
Municipal Finance and Management Act 56 of 2003,
s 116.
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: 5424/2018
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO THE JUDGES:
YES
/NO
(3)
REVISED
DATE:
12.08.2024
SIGNATURE:
In
the matter between:
KHARI INVESTMENTS
(PTY) LTD
(Previously known
as SGL Engineering Projects
(Pty) Ltd
PLAINTIFF
-and-
MOPANI DISTRICT
MUNICIPALITY
DEFENDANT
JUDGMENT
BRESLER
AJ:
Introduction:
[1]
The Plaintiff claims payment from the Defendant in an amount of
R2,412,434.66 (two million four hundred and twelve thousand
four
hundred and thirty-four rand and sixty-six cents) including Value
Added Tax calculated at 14%.
[2]
The claim of the Plaintiff is premised on an oral agreement concluded
between the Plaintiff, duly represented by Mr Lesiba Gwangwa
and the
Defendant, duly represented by Dr. T Maake who was the Municipal
Manager of the Defendant at the time.
[3]
In its Plea, the Defendant denies that it entered into an oral
agreement, alternatively denies that Dr Maake had the required
authority to represent the Defendant in the alleged oral agreement
and furthermore denies having received performance in terms
of the
oral agreement. As will be seen from what has been stated herein
after, the Defendant conceded in its opening argument,
and again
confirmed in its closing argument that the
crux
of the defence
lies with the fact that the alleged oral agreement is not aligned
with the procurement processes, thus rendering
the oral agreement
void for lack of legality and consequently unenforceable.
[4]
Having regard to the testimony of the various witnesses and the
concessions made by Counsel for the Defendant, it is unquestionable
that an oral agreement was concluded between the Plaintiff and the
Defendant.
[5]
This court is therefore called upon to determine, having regard to
the prevailing legal position, the supply chain management
policies
and internal financial procedures of the Defendant, if the oral
agreement is valid and enforceable.
The
Plaintiff’s evidence:
[6]
Dr. T Maake testified on behalf of the Plaintiff. He confirmed the
oral agreement concluded between the Plaintiff and the Defendant
and
stated that he was duly authorised to do so by virtue of being the
Municipal Manager at the time. He furthermore testified
that the
Plaintiff was appointed as a professional service provider in 2009
and in terms of the provisions of the applicable supply
chain
management policy of the Defendant. He also testified that the
Defendant is entitled to make single source appointments where
it is
urgent and there is an emergency.
[7]
Dr. Maake testified that there were critical defects in the
infrastructure at the Nkowankowa Sewage Plant. As the Plaintiff
was
engaged in the project from the onset, it was a natural continuance
of the previous work carried out by it. There was spillage
of
sewerage into the river system which was polluting the environment in
contravention of the
Constitution,
1996 and the
National
Water Act,
36 of 1998
, and a speedy decision had to be taken to
remedy the situation.
[8]
The Defendant required the Plaintiff to draft a technical report to
enable the Defendant to apply for funding from the Department
of
Water and Sanitation to restore the effective functioning of the
Sewage Plant. During the course of the argument this was referred
to
as the ‘refurbishment’ of the Plant.
[9]
Hereafter, Mr Lesiba Gwangwa, the Director of the Plaintiff,
testified. His testimony aligned with the testimony of Dr. Maake
to
the extent that the oral agreement, and the extent thereof, was
confirmed. He furthermore confirmed his appointment as professional
service provider in 2009 in respect of the Upgrading of the
Nkowankowa Sewage Treatment Plant. He furthermore essentially
confirmed
that he was appointed to attend to the refurbishment report
consequent to his earlier involvement in the Upgrading project.
During
or about January 2017, he learned that financing was approved
based on his report. The contractor appointed to refurbish the Sewage
Plant, BMK, made us of a copy of his report.
[10]
Having regard to the testimony of Mr Gwangwa, and the documentation
presented to court, it is evident that the Defendant, duly
represented by Dr. Maake and the Plaintiff, duly represented by Mr.
Gwanga did enter into an oral agreement resulting in the Plaintiff
rendering professional services to the Defendant.
The
Defendant’s evidence:
[11]
The Defendant called Ms Happiness Mabuza to testify. She is a project
manager employed by the Defendant for the past 10 years.
Her
responsibilities include the monitoring of progress of projects at
the various sites and in terms of the scope and to ensure
that the
project does not exceed the allocated budget. She was never involved
in in the Upgrading project for which the Plaintiff
was appointed in
2009. She confirmed her involvement in the Refurbishment project
which, according to her, is a separate project.
[12]
Ms Mabuza confirmed that BMK was appointed as the contractors on the
Refurbishment project in December 2016. She admittedly
had no
personal knowledge of any negotiations or discussions between the
Plaintiff and the Defendant during the period 2009 to
2014. She did
however confirm that there was an ongoing emergency at the Plant that
required immediate attention as sewerage was
spilling into the river.
[13]
Hereafter, the Defendant called Ms Mamaloko Makwela (previously
Mosomane) to testify. She is employed by the Defendant as a
project
manager technician. Her duties and responsibilities include
management of projects. She was the project manager that dealt
with
the Upgrading of the Nkowankowa Sewage Treatment Plant.
[14]
The witness was only employed by the Defendant in 2015. This is when
she learned of the Plaintiff’s involvement in the
project. She
has no personal knowledge of events prior to 2015. She was however
asked if the discharge of raw sewerage into the
river could be
classified as an emergency and she replied that it would, thus
confirming that emergency conditions existed.
[15]
Hereafter, the Defendant
called Ms Sibongile Pinkie Mathebula, the Chief Financial Officer of
the Defendant. At the time of the
trial, she was only employed at the
Defendant for approximately 15 months. Her knowledge of the matter is
limited to a file that
was presented to her by the Defendant. When
perusing the file, she noticed that there was no Appointment letter,
Service Level
Agreement or VAT invoice. According to her, all
agreements had to be in writing to be valid and enforceable. The
supply chain management
policy ‘
legislates
on how procurement within the municipality should be carried out’
and it ‘
is
a guideline which then details how the implementation of the act
should occur’
.
[1]
[16]
According to Ms Mathebula, even in emergency situations there are
proceduralrequirement that must be met. Consequently, no
oral
agreement could have been concluded in 2014. She was however not able
to indicate to the Court what procedures are involved
and in place
safe to repeatedly refer to the supply chain management policy of the
Defendant.
[17]
As neither of the Defendant’s witnesses has any knowledge
pertaining to the oral agreement, the testimony in this regard
presented by the Plaintiff must be accepted as the truth. As stated
before, Counsel for Defendant conceded that this agreement
was in all
probability concluded and that the Plaintiff performed in terms
thereof. The
quantum
of the Plaintiff’s claim was also
not disputed.
[18]
Having regard to the testimony of the witnesses presented to this
Court, this Court has no difficulty in finding that the oral
agreement was concluded, that the Defendant’s representatives
had full knowledge of the oral agreement, that the Plaintiff’s
performed in terms thereof and that the Defendant accordingly
utilized the report prepared by the Plaintiff when it appointed BMK
to refurbish the plant.
[19]
In closing argument, the Defendant persisted with its view that the
oral agreement in unenforceable as it constitute an illegal
contract.
This Court is clearly only called upon to determine if an oral
agreement of the nature concluded between the parties,
is enforceable
irrespective of compliance with statutory prescripts.
The
Legal Framework:
[20]
The Defendant’s
Supply Chain Management Policy (the ‘SCM Policy’) states
the following
[2]
:
‘
Deviation
from the Procurement Process
General
283. The Municipal
Manager may dispense with the official procurement processes
established by this Policy, and procure any required
goods or
services through any convenient process, which may include direct
negotiation, but only in respect of:
(i)
any
contract relating to an emergency (as described in clauses 285 and
286 below) where it would not be in the interest of the Municipality
to invite bids,
(ii)
any goods
or services which are available from a single provider only,
(iii)
the
acquisition of animals for zoos, or
(iv)
the
acquisition of special works of art or historical objects where
specifications are difficult to compile;
(v)
any other
exceptional circumstances where it is impractical or impossible to
follow the official procurement process, including:
(vi)
any
purchase on behalf of the Municipality at a public auction sale;
(vii)
any
contract in respect of which compliance therewith would not be in the
public interest;
(viii)
ad-hoc
repairs to plant and equipment where it is not possible to ascertain
the nature or extent of the work required in order to
call for bids;
and
(ix)
any
contract in respect of accommodation, travel agencies and courier
services
(x)
any
acquisition in respect of show stalls.
284. The Municipal
Manager may condone a deviation from the procurement processes,
provided that such deviation is limited to the
circumstances referred
to in clause 283.
Emergency
Dispensation
285. The conditions
warranting Emergency dispensation should include the existence of one
or more of the following:
a.
the
possibility of human injury or death;
b.
the
prevalence of human suffering or deprivation of rights;
the possibility of
damage to property, or suffering and death of livestock and animals;
d.
the
interruption of essential services, including transportation and
communication facilities or support services critical to the
effective functioning of the Municipality as a whole;
e.
the
possibility of serious damages occurring to the natural environment;
f.
the
possibility that failure to take necessary action may result in the
Municipality not being able to render an essential community
service;
and
g.
the
possibility that the security of the state could be compromised.
286. The prevailing
situation, or imminent danger, should be of such a scale and nature
that it could not readily be alleviated
by interim measures, in order
to allow time for the formal procurement process. Emergency
dispensation shall not be granted in
respect of circumstances other
that those contemplated above.
[21]
Section 299
of the SCM Policy furthermore states that reasons for all
deviations shall be recorded and reported by the Municipal Manager to
Council at the next Council meeting and shall be included as a note
to the annual financial statements.
[22]
As to compliance with this provision, Counsel for the Plaintiff
submitted that this report will be wholly within the knowledge
of the
Defendant. Dr. Maake was suspended prior to the financial year end
and has no knowledge if there was compliance by his predecessor.
The
Defendant however did not present evidence as to either the existence
or the absence of the report or the note to the financial
statements.
[23]
The Court is therefore in the dark as to whether there was compliance
with this aspect. As will be seen from what is stated
herein after,
the compliance herewith is irrelevant for purposes of this judgment.
[24]
In the
Guide
for Accounting Officers of Municipalities and Municipal Entities
the following is stated
pertaining to one of the aspects of supply chain management:
[3]
Supply Chain
Performance: This is the monitoring process, undertaking a
retrospective analysis to determine whether the proper processes
have
been followed and whether the desired objectives were achieved. Some
of the issues that may be reviewed are:
-
Compliance with the
policy objectives;
-
Cost efficiency of
SCM process (i.e. the cost of the process itself); and
-
Whether the supply
chain practices are consistent with Government’s broader policy
focus; and
-
Whether there are
means to improve the system.
[25] The same Guide
provides in paragraph 4.4.5.5 as follows:
4.4.5.5 Deviation
from, and Ratification of Minor Breaches of Procurement Processes
4.4.5.5.1 Should it be
impractical to invite competitive bids for specific requirements, the
accounting officer may dispense with
official procurement processes
and procure goods and services by other means such as price
quotations and negotiations.
4.4.5.5.2 Incidences
where it will be impractical to invite competitive bids for specific
requirements, include, among others:
·
Emergency
cases: cases where immediate reaction is necessary in order to avoid
a dangerous or risky situation or misery or disaster
such as floods
or fires;
·
In case of a
sole supplier;
·
For the
acquisitioning of special works of art or historical objects where
specifications are difficult to compile; and acquisition
of animals
for zoos; or in any other exceptional cases.
4.4.5.5.3 ...
4.4.5.5.4 The
accounting officer must record the reasons for any deviations as
mentioned above and report it to the next meeting
of the council, or
board of directors in the case of a municipal entity, and include as
a note to the annual financial statements.
[26]
From an analysis of the aforesaid it is apparent that deviations from
the normal procurement processes are possible provided
that they fall
under the circumstances contemplated in
section 283
of the SCM
policy. What is conspicuously absent from the said section (and the
SCM policy as a whole) is an indication as to the
extent of the
deviation that is allowed.
[27]
To determine if an oral agreement will constitute an allowable
deviation from the SCM policy, one must have appreciation for
the
interaction between the difference laws regulating Local Government
in general. More specifically, the law regulating the existence
and
status of SCM policies within the greater legal framework.
[28]
One of the constitutional
objectives of Local Government, is ‘to ensure the provision of
services to communities in a sustainable
manner’.
[4]
To achieve this objective, Section 216(1) of the
Constitution
mandates that national
legislation must prescribe measures to ensure both transparency and
expenditure control in each sphere of
government by introducing:
28.1 generally recognised
accounting practices;
28.2 uniform expenditure
classifications; and
28.3 uniform treasury
norms and standards.
[29]
Giving effect to the
constitutional mandate, Chapter 11 of the
Local
Government: Municipal Finance and Management Act
[5]
(the ‘MFMA’), is aimed at expenditure control. The MFMA
however only provides a broad framework, with the regulations
and
policies addressing the process in more particularity. The MFMA
affirms the three predominant principles of government expenditure
being:
29.1 Expenditure must be
planned and authorised in terms of the municipal budget;
29.2 Expenditure must be
incurred following the correct procedures; and
29.3 Financial resources
must be productively applied.
[30]
The defence raise by the Defendant is premised on a contravention of
the principle enshrined in paragraph 29.2 above. The Defendant
opines
that the failure to follow the prescribed procedures relating to
expenditure decisions results in irregular expenditure.
Irregular
expenditure is unlawful.
[31] The term ‘irregular
expenditure’ is defined in Section 1 of the MFMA to mean:
'Irregular
expenditure'
, in relation to
a municipality or municipal entity, means-
(a) expenditure
incurred by a municipality or municipal entity in
contravention of, or that is not in accordance
with, a requirement of
this Act, and which has not been condoned in terms of section
170;
(b) expenditure
incurred by a municipality or municipal entity in
contravention of, or that is not in accordance
with, a requirement of
the Municipal Systems Act, and which has not been
condoned in terms of that Act;
(c) expenditure
incurred by a municipality in contravention of, or that is
not in accordance with, a requirement of the
Public
Office-Bearers Act, 1998 (
Act 20
of 1998
); or
(d) expenditure
incurred by a municipality or municipal entity in
contravention of, or that is not in accordance
with, a requirement of
the supply chain management policy of the municipality or
entity or any of the municipality's by-laws
giving effect
to such policy, and which has not been condoned in terms of such
policy or by-law,
but excludes
expenditure by a municipality which falls within the
definition of 'unauthorised expenditure';
[32] Section 170 of the
MFMA provides:
170 Departures from
treasury regulations or conditions
(1) The National
Treasury may on good grounds approve a departure from a treasury
regulation or from any condition imposed in terms
of this Act.
(2) Non-compliance
with a regulation made in terms of section 168, or with a condition
imposed by the National Treasury in terms
of this Act, may on good
grounds shown be condoned by the Treasury.
[33]
The MFMA furthermore regulates the creation and implementation of a
supply chain management policy to the extent that Section
111 states:
111 Supply chain
management policy
Each municipality and
each municipal entity must have and implement a supply chain
management policy which gives effect to the provisions
of this Part.
[34] Of critical
importance is the provisions of Section 112 of the MFMA that states
that:
112 Supply chain
management policy to comply with prescribed framework
(1) The supply chain
management policy of a municipality or municipal entity
must be
fair, equitable, transparent, competitive and cost-effective and
comply with a prescribed regulatory framework for municipal
supply
chain management
, which must cover at least the following:
(a) The range of
supply chain management processes that municipalities and municipal
entities may use, including tenders, quotations,
auctions and other
types of competitive bidding;
(b) when a
municipality or municipal entity may or must use a particular type of
process;
(c) procedures and
mechanisms for each type of process;
(d) procedures and
mechanisms for more flexible processes where the value of a contract
is below a prescribed amount;
(e) open and
transparent pre-qualification processes for tenders or other bids;
(f) competitive
bidding processes in which only pre-qualified persons may
participate;
(g) bid documentation,
advertising of and invitations for contracts;
(h) procedures and
mechanisms for-
(i) the opening,
registering and recording of bids in the presence of interested
persons;
(ii) the evaluation of
bids to ensure best value for money;
(iii) negotiating the
final terms of contracts; and
(iv) the approval of
bids;
(i) screening
processes and security clearances for prospective contractors on
tenders or other bids above a prescribed value;
(j) compulsory
disclosure of any conflicts of interests prospective contractors may
have in specific tenders and the exclusion of
such prospective
contractors from those tenders or bids;
(k) participation in
the supply chain management system of persons who are not officials
of the municipality or municipal entity,
subject to section 117;
(l) the barring of
persons from participating in tendering or other bidding processes,
including persons-
(i) who were convicted
for fraud or corruption during the past five years;
(ii) who wilfully
neglected, reneged on or failed to comply with a government contract
during the past five years; or
(iii) whose tax
matters are not cleared by South African Revenue Service;
(m) measures for-
(i) combating fraud,
corruption, favouritism and unfair and irregular practices in
municipal supply chain management; and
(ii) promoting ethics
of officials and other role players involved in municipal supply
chain management;
(n) the invalidation
of recommendations or decisions that were unlawfully or improperly
made, taken or influenced, including recommendations
or decisions
that were made, taken or in any way influenced by-
(i) councillors in
contravention of item 5 or 6 of the Code of Conduct for Councillors
set out in Schedule 1 to the Municipal Systems
Act; or
(ii) municipal
officials in contravention of item 4 or 5 of the Code of Conduct for
Municipal Staff Members set out in Schedule
2 to that Act;
(o) the procurement of
goods and services by municipalities or municipal entities through
contracts procured by other organs of
state;
(p) contract
management and dispute settling procedures; and
(q) the delegation of
municipal supply chain management powers and duties, including to
officials.
(2) The regulatory
framework for municipal supply chain management must be fair,
equitable, transparent, competitive and cost-effective.
[35]
It is apparent that a supply chain management policy is subservient
to a ‘
prescribed regulatory framework for municipal supply
chain management
.’
[36] Section 116(1) of
the MFMA conversely provides:
116 Contracts and
contract management
(1) A contract or
agreement procured through the supply chain management system of a
municipality or municipal entity must-
(a) be in writing;
(b) stipulate the
terms and conditions of the contract or agreement, which must include
provisions providing for-
(i) the termination of
the contract or agreement in the case of non- or under- performance;
(ii) dispute
resolution mechanisms to settle disputes between the parties;
(iii) a periodic
review of the contract or agreement once every three years in the
case of a contract or agreement for longer than
three years; and
(iv) any other matters
that may be prescribed.
[37] Section 171(1) of
the MFMA furthermore states:
171 Financial
misconduct by municipal officials
(1) The accounting
officer of a municipality commits an act of financial misconduct if
that accounting officer deliberately or negligently-
(a) contravenes a
provision of this Act;
[38]
The
crux
of the Plaintiff’s argument is that an oral
agreement can be concluded by deviating from the SCM policy. In this
Court’s
view, the Plaintiff loses sight of the trite provisions
of the MFMA in as far as the MFMA renders a contravention of the
provisions of the said Act
as financial misconduct and an
irregular expenditure.
[39]
It could not have been the intention of the Legislature that National
Legislation of this nature can be circumvented with internal
financial policies or procedures. This will impede the principles
enunciated in Section 217(1) of the
Constitution
that states:
(1)
When an
organ of state in the national, provincial or local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,
competitive and cost effective.
[40]
Regard must also be had to the provisions of Section 217(3) of the
Constitution
that specifically states that National
Legislation must prescribe a framework
within which the supply
chain management policy must be implemented
.
[41]
In as far as this Court
may have held any doubt as to the hierarchy of laws applicable in
these circumstances, Regulation 2(1)(d)
of the
Local
Government: Municipal Finance Management Act (56/2003):
Municipal
Supply Chain Management Regulations
[6
]
pertinently
prescribe that the supply chain management policy is
subject
to the provisions of other applicable legislation
.
By implication this will include the MFMA
[42]
Both parties referred the
Supreme Court of Appeal decision rendered in the matter of
City
of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd
[7]
and
specifically paragraphs [11] to [13] where the following was stated:
‘
[11] It is
important at the outset to distinguish between two separate, often
interwoven, yet distinctly different 'categories'
of cases. The
distinction ought to be clear enough conceptually. And yet, as the
present matter amply demonstrates, it is not always
truly discerned.
I am referring to the distinction between an act beyond or in excess
of the legal powers of a public authority
(the first category), on
the one hand, and the irregular or informal exercise of power granted
(the second category), on the
other. That broad distinction lies
at the heart of the present appeal, for the successful invocation of
the doctrine of estopppel
may depend upon it. (See TE Dönges &
L de van Winsen Municipal Law 2 ed (1953) 38 - 41.)
[12] In the second
category, persons contracting in good faith with a statutory
body or its agents are not bound, in the absence
of knowledge to the
contrary, to enquire whether the relevant internal arrangements or
formalities have been satisfied, but are
entitled to assume that all
the necessary arrangements or formalities have indeed been complied
with (see for example National
and Overseas Distributors
Corporation (Pty) Ltd v Potato Board
1958
(2) SA 473 (A)
; Potchefstroom
se Stadsraad I v Kotze
1960
(3) SA 616
(A)
).
Such persons may then rely on estoppel if the defence raised is that
the relevant internal arrangements or formalities were not
complied
with.
[13] As to the first
category: failure by a statutory body to comply with provisions which
the legislature has prescribed for the validity of
a
specified transaction cannot be remedied by estoppel because
that would give validity to a transaction which is unlawful
and
therefore ultra vires. (See for example Strydom v Die
Land- en Landboubank van Suid-Afrika
1972
(1) SA 801 (A)
; Abrahamse v Connock's
Pension Fund
1963
(2) SA 76
(W)
;
and Hauptfleisch v Caledon Divisional Council
1963
(4) SA 53
(C)
.)’
[43] And further at [16]:
[16] There are
formidable obstacles to the plaintiff's reliance upon the doctrinal
device of estoppel. Assuming in the plaintiff's
favour that all of
the requirements for its successful invocation have been established,
this is not a case in which it can be
allowed to operate. It is
settled law that a state of affairs prohibited by law in the
public interest cannot be perpetuated
by reliance upon the doctrine
of estoppel (Trust Bank van Afrika Bpk v Eksteen
1964
(3) SA 402
(A)
at
411H - 412B), for to do so would be to compel the defendant to do
something that the statute does not allow it to do. In effect
therefore it would be compelled to commit an illegality
(Hoisain v Town Clerk, Wynberg
1916
AD 236
).
[44]
As stated herein before, the MFMA pertinently prohibits the
conclusion of oral agreements. This is a
peremptory provision
.
It cannot be said that the SCM policy by implication allows a
municipal manager to conclude an agreement that is rendered unlawful
by legislation. This will defeat the purpose of preventative
legislation of this nature.
[45]
Moreover, the SCM policy
and the provisions of the MFMA is not an ‘internal document’
for purposes of applying the well-known
indoor management rule (or
Turquand
rule).
It is a public document to which parties, wishing to participate in
the process, has a right to access. They have ‘the
obligation
and the means to ascertain the public rules of the game before they
participate’.
[8]
It
therefore cannot be said that the Plaintiff did not have knowledge of
either the SCM Policy or the provisions of the MFMA when
it concluded
the oral agreement with the Defendant. It follows that
estoppel
cannot be utilised to
validate a illegality.
[46]
As was stated in
Merifon
(Pty) Limited v Greater Letaba Municipality and another
[9]
the
principle of legality was manifestly implicated because the
Municipality’s conduct was at odds with
Section 19
of the MFMA.
In casu,
the
illegality lies with the non-compliance with the peremptory
provisions of
Section 116
of the MFMA rendering the agreement void.
[47]
Having concluded that the non-compliance with the provisions of
Section 116
of the MFMA renders the oral agreement by its very
nature, unenforceable, this court need not ascertain if the
circumstances of
the matter entitled the parties to deviate from the
SCM policy on the basis of urgency. The mere fact that it is common
cause between
the parties that the agreement was concluded orally
renders a further determination of the merits unnecessary.
[48]
The Plaintiff’s claim therefore stands to be dismissed. This
court sees no reason why the costs should not follow the
outcome of
the proceedings with the exception to the wasted costs occasioned as
a result of the unavailability of counsel for the
Defendant on the
15
th
of November 2023.
[49]
As to the costs of the 15
th
of November 2023, the matter
was postponed purely at the behest of the Defendant. There is no
reason why the Defendant should not
be responsible for these costs.
[50]
Having regard to the complexity of the matter, the value of the claim
and the importance of the relief sought, it will be just
and
equitable if costs to counsel is awarded on Scale B in respect of
work performed after 12 April 2024.
Order:
[51]
In the result the
following order is made:
25.1
The
Plaintiff’s claim is dismissed.
25.2
The
Plaintiff is ordered to pay the costs of the Defendant including the
costs to counsel on Scale B for work performed after 12
April 2024,
with the exclusion of the wasted costs pertaining to the postponement
of the trial on 15 November 2023.
25.3
The
Defendant is ordered to pay the Plaintiff’s wasted costs
pertaining to the postponement of the trial on 15 November 2023.
M
BRESLER
ACTING
JUDGE OF THE HIGH COURT,
LIMPOPO
DIVISION, POLOKWANE
APPEARANCES
:
FOR THE PLAINTIFF
: Adv. L Franck
INSTRUCTED BY
: Ian Levitt
Attorneys
janyde@ianlevitt.co.za
FOR
THE DEFENDANT
: Dr. T Ramatsekisa
INSTRUCTED
BY
: Modjadji Raphesu
Attorneys
modjadjiraphesu@telkomsa.net
DATE OF HEARING
:
13 May 2024
DATE OF JUDGMENT
:
12 August 2024
[1]
Transcript, page 596, lines 1 – 14
[2]
As contained on page 391 of Volume 4: Trial bundle
[3]
Supply
Chain Management: A Guide for Accounting Officers of Municipalities
and Municipal Entities, The National Treasury, Republic
of South
Africa, October 2005
contained
on page 77 and further in the ‘Maake bundle’ (reference
is made to paginated page 88)
[4]
Section 152
of the
Constitution
of the Republic of South Africa
,
1996
[5]
Act 56 of 2003
[6]
Published in GN R 868,
GG
276636,
30 May 2005
[7]
2008 (3) SA 1 (SCA)
[8]
See
Nelson
Mandela Bay Municipality v Afrisec Strategic Solutions (Pty) Ltd
2008
JDR 1014 (SE) at para [29] – [30]
[9]
2023 JDR 2444 (CC) at [21] with reference to the decision of
Merifon
(Pty) Ltd v Greater Letaba Municipality
2023
(1) SA 408
(SCA)