R EPUBLIC O F SOUT H AFR ICA
IN THE HIGH COURT OF SOUTH AFRICA
LIMPOPO DIVISION, POLOKWANE
(1)
(2)
(3)
REPORT ABLE : ¥ES /NO
OF INTEREST TO THE JUDGES : ¥ES /NO
RE V ISED .
In the matter between:
GEYSER & FERREURA INCORPORATED
ATTORNEYS
-and-
MODIMOLLE-MOOKGOPONG LOCAL
MUNICIPALITY
MUNICIPAL MANAGER: MODIMOLLE -
MOOKGOPONG LOCAL MUNICIPALITY
CHIEF FINANCIAL OFFICER: MODIMOLLE -
MOOKGOPONG LOCAL MUNICIPALITY
CASE NO: 1735/2023
APPLICANT
FIRST RESPONDENT
SECOND RESPONDENT
THIRD RESPONDENT
2
JUDGMENT
BRESLERAJ:
Introduction:
[1] The App licant launched an urgent application against the Respondents for
payment in the amounts of respectively R10 ,614,963.73 (Claim 1) and
R9 , 786,334.73 (Claim 2). The case w as enrolled for hearing on the 13th of March
2023 and w as subsequently struck from the roll due to lack of urgency.
[2] After laborious negotiations between the parties, Claim 1 w as settled in an
amount of RS ,197,105.75. This Court consequently granted judgment by
consent in respect of Claim 1 on the 29th of July 2024.
[3] Judgmen t in respect of Claim 2 w as reserved after extensive argument by both
parties. The Applicant's claim against the First Respondent is for outstanding
legal fees in respect of services rendered over a substantial period of time. It is
common cause between the parties that the First Respondent, duly represented
by its erstwhile Acting Mun icipal Manage r, on or about the 28th of October 2021
concluded a w ritten Acknow ledgement of Debt for an amoun t of R16 ,625,570.02.
O nly an amo unt of R6 ,839,415.29 w as paid to date and the balance of
R9 ,786,334.73 therefore remains due and payable in terms of the
Acknow ledgement of De bt.
3
[4] Prior to the comme nceme nt of arguments, the Respondents applied for a
postponemen t of the matter. The Respondents subm itted that they require
further time to properly investigate the ma tter and to obtain copies of the source
documen ts. The postponement w as refused, and reasons w ere presented
during the hearing extempore. The matter w as then heard on the merits.
[5] In justification of granting judgment, the Applicant again reiterated that the
Acknow ledgement of Debt w as duly signed by the Acting Municipal Manager and
that the First Respondent partially performed in terms thereof. The
Acknow ledgement of De bt is therefore valid and enforceable.
[6] In opposition to granting judgment, the Respondent subm itted that the settlemen t
amount is in excess of R16 million rand. On this basis the source documents
mus t be investigated so as to adhere to the statutory duties of Municipal Entities
not to incur unauthorised, irregular or fruitless and w asteful expenditure.
[7] Reference w as made to inter alia Section 32 of the Local Government:
Municipal Finance Management Act, Act 53 of 2003 (the 'MFMA ') that
provides for unauthorised, irregular or fruitless and w asteful expenditure.
Legal framework:
[8] The law regarding Acknow ledgements of Debt is trite.
4
[9] A compromise, or transactio, is a settlement by agreement of disputed
obligations. The parties thereto agree to regulate their intention in a particular
w ay, each receding from his previous position and conceding something - either
diminishing his claim or increasing his liability.1
[1 O] A compromise, like a novation, is a substantive contract w hich exists
independently of the causa w hich gave rise to the compromise, and w hich can
be enforced w ithout the necessity of proving prior cause of action or establishing
a legal right pre-existing the compromise. Like any other contract, defences to
an action on compromise may be raised. Such defences may, for example, be
that the comprom ise w as induced by fraud, or duress, or mutual error, but the
defendant is not entitled to raise defences relating to the motives w hich induced
him to agree to the comprom ise, or the merits of the dispute w hich w as the very
purpose of the parties to comprom ise. 2
[11] In this Court's view , it is therefore not open to the Respondents to deny liability
on the basis that the source documents are not in their possession. The validity
of the Acknow ledgement of Debt had to be impugned on one of the recognised
grounds.3 This w as not done.
[12] As to the allegations contained in the Answ ering affidavit delivered by the
Respondents earlier during the proceedings, it is respectfully subm itted that,
given the partial performance of the agreement, the Respondents are estopped
1 See Georgia and Another v Standard Bank Chartered Finance Zimbabwe 2000 (1) SA
126 (ZS ) at 138I-J
2 See Hamilton v Van Zy/ 1983 (4) SA 379 (E) at 383H - 384B
3 See SA Express Ltd v Bagport (Pty) Ltd 2020 (5) SA 404 (SCA ) at [47]
5
from denying the validity of the agreement on the premise of lack of authority.
say this for two reasons:
12.1 If the provisions of the MFMA applies to the relationship between the
Applicant and the Respondent, it w ill apply to the original appointme nt of
the Ap plicant as service provider. It is evident that there is no dispute
as to the validity of the Applicant's appointme nt as service provider on
the panel of attorneys of the First Respondent. 4
12.2 In as far as there may be a lack of comp liance w ith internal procedures,
the Applicant w as entitled to assume that such procedures have been
complied w ith and may thus rely on estoppel. 5
[13] The Respondents' opposition to granting of judgmen t in terms of the
Acknow ledgement of De bt is therefore w ithout me rit.
Costs :
[14] There is no reason w hy the costs should not follow the outcome of the
proceedings, and the Applicant is thus entitled to its costs.
[15] The Court is how ever not convinced that a case has been made out for a punitive
cost order. It is not sufficient to merely state that the App licant should not be out
of pocket because the aim of a party and party cost order is to ensure that a
4 See SA Express Ltd v Bagport (Pty) Ltd 2020 (5) SA 404 (SCA ) at [49]
5 See SA Express Ltd v Bagport (Pty) Ltd 2020 (5) SA 404 (SCA ) at [52] w ith reference to
City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd 2008 (3) SA 1 (SCA )
6
successful party is fully remunerated. This court also takes into consideration
that the Applicant effectively represented itself in these proceedings and
recoverability of reasonable legal costs and expenses w ill therefore have to be
determined by taxation.
[16] Having regard to the nature of the proceedings, the duration thereof, the extent
of the pleadings and the importance to the parties, it w ill be just if the costs of
two counsel are allow ed on Scale C.
Order:
[17] In the result the following order is made:
17.1 Judgment is granted in favour of the Applicant against the First
Respondent for:
17.1.1 Payment in an amount of R9 ,786,334.73;
17.1.2 Payment of interest on the amount of R9 ,786,334.73 from 1
January 2023 until 30 April 2023 and at the rate of 11,25%
per annum from 1 May 2023 to date of final payment.
17.1.3 Costs including costs in respect of two counsels on Scale
c.
APPEARANCES:
FOR THE APPLICANT
INSTRUCTED BY
FOR THE FIRST, SECOND AND
THIRD RESPONDENTS
INSTRUCTED BY
DATE OF HEARING
DATE OF JUDGMENT
7
M BRESLER
ACTING JUDGE OF THE HIGH COURT ,
LIMPOPO DIVISION, POLOKWANE
Adv D van den Bogert SC
Adv N Sibeko
Geyser & Ferreira Incorporated
ktp6@ktpsa.co.za
i nfo@gfattorneys.co.za
Adv. G Shakoane SC
Adv. J Ragau
Malumbete & Makhubele Attorneys
malumbete@telkomsa.net
29 July 2024
1 November 2024