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2024
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[2024] ZAMPMBHC 55
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MEC for Health: Mpumalanga v Mkhago Supply and Construction CC t/a Mkhago Health Care Services (618/2022) [2024] ZAMPMBHC 55 (22 August 2024)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(MPUMALANGA DIVISION,
MBOMBELA)
CASE
NO: 618/2022
(1)
REPORTABLE:NO
(2)
OF INTEREST TO OTHER JUDGES: YES
(3)
REVISED: YES
DATE:
22/08/2024
SIGNATURE:
In the matter between:
THE
MEC FOR HEALTH: MPUMALANGA
Applicant
and
MKHAGO SUPPLY AND
CONSTRUCTION CC t/a
MKHAGO
HEALTH CARE SERVICES
Respondent
This judgment was
handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date
and time for
hand-down is deemed to be 22 August 2024 at 10:00.
JUDGMENT
MASHILE J:
INTRODUCTION
[1]
This is an application to amend a plea launched by the Applicant
(“the Department”).
The Department seeks to introduce two
amendments. Firstly, that this Court lacks jurisdiction because the
agreement between the
parties provides for arbitration, which the
parties failed to observe. Secondly, the agreement concluded by the
parties violated
procurement policies and procedures and therefore
void
ab initio
. The Respondent (“Mkhago”) is
opposing the application on the following grounds:
1.1
The proposed amendment is exceedingly late. That fact,
notwithstanding, the Department extends
no explanation
for the inordinate delay;
1.2
The amendment will cause prejudice to Mkhago, which cannot be
alleviated by this Court granting a cost
order against it.
FACTUAL MATRIX
[2]
On 30 August 2013, the parties concluded an agreement whose terms,
among others, were that:
2.1
Mkhago was to perform circumcisions as per National Guidelines;
2.2
To train appointed clinical staff on the forceps guided method as
approved by the National Department
of Health;
2.3
The Department would settle invoices issued to it by Mkhago within 30
days of date of receipt.
[3]
In a letter dated 19 September 2013, the Department suspended the
agreement. The letter, in relevant
parts states:
“
This
letter serves as a notification whereby the above-mentioned contract
between yourself and the Department is hereby suspended,
in terms of
Treasury regulations 16A9.1 with immediate effect.
Due to allegations of
improper supply chain processes having been followed, to award this
contract we will be handing the matter
with the Provincial Treasury
to assist us with the investigation into the matter.”
[4]
The agreement terminated by effluxion of time
before Its reinstatement and or cancellation, following the report,
or outcome of
the investigations.
[5]
On 23 May 2017, the Department wrote to Mkhago stating the following:
“
The SLA
provides for mediation and arbitration to settle disputes between
parties. Your client has not pleaded compliance with the
arbitration
clause nor why it should not apply. This issue needs to be carefully
canvassed to determine whether your client
is in the correct
forum.”
[6]
Responding to the previously mentioned letter, Mkhago wrote back and
said:
“
As to
paragraph 3.6 of your letter, referring to the arbitration clause,
writer hereof urges you to seriously reconsider your view/position.
Firstly, you have not indicated whether you want to amend your
client’s plea to include same as a special plea, which is
the
correct procedure to follow…”
ASSERTIONS
BY THE PARTIES
[7]
The stance of the Department is that Uniform Court Rule 28 is couched
in a manner to allow amendments
at any time before judgment is
granted hence its open-endedness. Its approach is therefore that if
the Court has not delivered
judgment in the main case, nothing
precludes it from amending the plea. Besides, says the Department,
Mkhago fails to explain the
prejudice and how it is related to the
amendment. Additionally,
the delay in the bringing of the
counter claim seeking a declaratory relief is a defence, if sustained
by the Court, to the merits
of the review or declaratory order.
[8]
Mkhago, on the other hand, argued that amendments of pleadings are
not there for the taking. A
party seeking amendment is asking for
indulgence. If it wants to do so out of time, it is required that it
properly accounts for
any delay. The need to do this is even more
raised where the delay is unconscionably immoderate. In this matter,
the Department
has for no reason waited for virtually 10 years prior
to wanting to introduce the amendment pertaining to the agreement
being void
ab initio
and 6 years or so in the case of the jurisdiction issue, maintains
Mkhago.
ISSUES
[9]
The issue for consideration is whether the Department has made a case
for this Court to exercise
its wide discretion in favour of allowing
the amendment.
LEGAL FRAMEWORK
[10]
Uniform Rule of Court 28 deals with amendments of pleadings and
documents excluding sworn statements. Sub-rule
(1) and (10) are of
particular interest in this matter. For that reason, I proceed to
cite them in full below and in the order
mentioned aforesaid:
“
(1)
Any party desiring to amend a pleading or document other than a sworn
statement, filed in connection
with any proceedings, shall notify all
other parties of his intention to amend and shall furnish particulars
of the amendment.”
“
(10)
The court may, notwithstanding anything to the contrary in this rule,
at any stage before judgment grant leave
to amend any pleading or
document on such other terms as to costs or other matters as it deems
fit.”
[11]
Amendments of pleadings are a daily occurrence, consequently the
provisions of Rule 28 have often drawn the
attention of various
Courts across this country. It is correct that, depending on
compliance with requirements attendant upon an
application of this
nature, Courts invariably lean in favour of an Applicant. The
exception to the aforegoing principle is that
where the application
is made in bad faith or will prejudice the other party to the
proceedings, which cannot be cured by a cost
order and, where
appropriate, a postponement. One exceptionally important case to
which the attention of this Court has been drawn
is
Commercial
Union Assurance Co Ltd v Waymark NO
[1]
where
the following were enumerated:
“
11.1 the
court has a discretion whether to grant or refuse an amendment;
11.2 An
amendment cannot be granted for the mere asking; some explanation
must be offered therefor;
11.3
The applicant must show that prima facie the amendment has
something deserving of consideration,
a triable issue;
11.4
The modern tendency lies in favour of an amendment if such
facilitates the proper ventilation of the disputes
between the
parties;
11.5
The party seeking the amendment must not be mala fide;
11.6
The
amendment must not cause an injustice to the other side
which cannot be compensated by costs;
11.7
The amendment should not be refused simply to punish the applicant
for neglect;
11.8 A
mere loss of the opportunity of gaining time is no reason, in itself,
for refusing the application.”
See
also,
Ebling
v Two Oceans Aquarium CC
[2]
and Ascendis Animal Health (Pty) Ltd v Merck Sharp Dohme Corporation
and Others
[3]
.
[12]
The above cases are cases where the Court felt that it was
appropriate to grant the amendment because sufficient
ground had been
prepared for it to exercise its wide discretion in favour of the
Applicant. I have mentioned
supra
that the rule that Courts will generally allow amendments is not
intransigent. Thus, in
Dolowitz
Bros v Guardian Insurance Company Co Ltd
[4]
the Court declined an application to amend. The ground for the
refusal was that the Applicant in the matter only launched it after
18 months and gave no explanation why it was delayed.
[13]
A party is also obliged to furnish explanation of its failure to put
the pleading in proper order right at
the beginning
[5]
.
An application without such an explanation may be destined to fail.
Similarly, in
Krause
v SAR
[6]
an application to amend a plea by the insertion of a special defence
after the Plaintiff closed its case was refused. The Court
reasoned
that an amendment would cause multiple inconveniences to the
Plaintiff and that the Defendant had failed to show that
the
necessity for the amendment had arisen through reasonable cause.
ANALYSIS
[14] I
am somewhat baffled by the Department’s referral to the case of
Commercial Union Assurance Co. Ltd
supra
in circumstances
where it is manifest that it falls short of most of the requirements
listed in paragraph 11. One of the requirements
per the case is that
amendment is not there for the taking, which means that it is
expected that a party in the position of the
Department would go to
great lengths explaining how it found itself in this invidious
position.
[15]
The only attempt to account for the unreasonable delay turns out to
be
mala fide
insofar as it is a blatant lie, which Mkhago has
laid bare. In this regard it is befitting to refer to the affidavit
of Advocate
Charles Ndlovu, the erstwhile counsel of the Department,
wherein he was seeking postponement of this matter. I have uplifted
the
pertinent parts from the answering affidavit of Mkhago. It reads:
“
5.1
Before,
Makwakwa Attorneys was terminated, he briefed Advocate Matebese SC
with Advocate Zwane, and the current attorneys of record
continued
with the said set of counsel.
5.2
Secondly, counsel advised that we need to amend our plea, in order to
seek an order that the agreement
which is the subject matter of this
litigation be declared void ab initio. Counsel further advised that,
this issue was discussed
with Makwakwa attorneys before they were
terminated.”
[16] It
is discernible from the contents of the paragraph above that the
issue of the amendment was discussed
with the erstwhile attorneys of
the Department, Makwakwa, prior to the appointment of the attorneys
on record now. The paragraph
quoted
supra
is head-to-head with
the allegations made by Mr Lamola in his affidavit filed in support
of this application for amendment at paragraphs
12.1 to 12.3 where he
states the following:
“
12.1
Firstly, it is important to state that our law firm was recently
instructed to represent the Department, after the Department
terminated its previous attorneys due to the termination of contract
by effluxion of time. I must mention that when we were appointed,
we
noted that senior counsel had just been appointed immediately before
the termination of the previous attorneys’ mandate.
We were
instructed to continue to brief ZZ Matebese SC and Zwane LP.
12.2
Counsel accepted the brief. In addition, thereto, counsel advised
that they seek a consultation with the
Department so that the manner
and process of procuring or appointing the Respondent should be
adequate discussed.
12.3
It was during the aforesaid consultation that it emerged that the
appointment of the respondent was contrary
to the provisions of the
Constitution, the PFMA and other applicable legislation regulating
procurement of goods and services by
state organs.”
[17]
More aberrant is the failure of the Department to deal with these
significant and conspicuous contradictions
in its replying affidavit.
This, of course, must mean only one thing – the Department has
no answer that can explain the
inconsistencies. In these
circumstances I am bound to accept the version of Mkhago.
[18] It
is also apparent that when the Department suspended the agreement on
19 September 2013, it knew that the
agreement was flawed for lack of
compliance with the applicable legislation pertaining to procurement
of goods on behalf of Government.
Enigmatically, no explanation is
proffered why this so-called defence was not included right at the
onset. I am deliberately refraining
from pronouncing on the wisdom of
putting forward such as a defence in circumstances where the
agreement was obviously contaminated
with illegality.
[19]
The Department’s attitude that it is at liberty to amend
throughout the life of the litigation if judgment
has not been handed
down is correct but misplaced on the facts of this case. It is plain
from the
Commercial Union
case
supra
that a party
cannot wait for 10 years, as is the position here, wake up one
morning and amend its pleadings without properly accounting
for the
period of the delay. The explanation that is there in this matter is
mala fide
because it is clearly false, and no attempt has been
made to explain the glaring contradiction. See also the
Oblowitz
Bros
case
supra
where the delay was 18 months without any
account for it and the amendment was refused as a result.
[20]
The failure to explain the delay is not only in respect of the
counterclaim but also with the introduction
of the jurisdiction
issue. The Department intimated as early as 23 May 2017 that this
Court may not have jurisdiction because of
the arbitration clause in
the agreement. Mkhago promptly wrote back and invited it to amend if
it thought it was appropriate to
do so. This invitation elicited
silence until last year on 18 October 2023 when the amendment
application was launched. It is noteworthy
to point out that this
came after 6 years and without explanation of the delay.
[21] I
am at loss why the Department contends that there is no prejudice or
that if there is, Mkhago has failed
to show how it is related to the
amendment. The mere fact that it waited for 10 years to be served
with this amendment is prejudicial
on its own. A party should expect
some semblance of stability in the litigation instead of being taken
back to matters that should
have been introduced years ago. This is
the inconvenience that is often referred to in case authority.
[22]
For what it is worth, I think I should indicate that the agreement
that is said to be illegal was never set
aside because of its
non-compliance with procurement procedures and policies. Given this
situation, I wonder whether an amendment
would assist the Department
as it would still be stuck with an agreement tainted by illegality.
Illegal contracts in this instance
should be reviewed and set aside.
For these reasons it is questionable that the route chosen when
approaching this Court was well
reasoned.
[23] In
the result the application for amendment must fail and I make the
following order:
The
application is dismissed with costs.
B A MASHILE
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
MPUMALANGA DIVISION,
MBOMBELA
APPEARANCES:
Counsel
for the Applicant:
Adv
LP Zwane
Instructed
by:
Lamula
KB Attorneys
C/O
PN Hlatswayo Attorneys
Counsel
for the Respondent:
Adv
TS Ngwenya
Instructed
by:
Gerhard
Lourens Inc
Date
of Judgment:
22
August 2024
[1]
1995
(2) SA 73
(Tk)
at
77F-I.
[2]
2000
(3) SA 691
(C) 694G–H).
[3]
2020
(1) SA 327(CC)
at [89]
[4]
1924
CPD 64
[5]
Rossouw
v Bonthuys
1933 CPD 201
[6]
1948
(3) SA 1145
(O)