About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2024
>>
[2024] ZAFSHC 226
|
|
Matjhabeng Local Municipality v Baile Trading (Pty) Ltd and Others (3498/2023 ; 3787/2023) [2024] ZAFSHC 226 (31 July 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
number: 3498/2023
3787/2023
In
the matters between:
MATJHABENG
LOCAL MUNICIPALITY
Applicant
and
BAILE
TRADING (PTY) LTD
1
st
Respondent
THE
SHERIFF, WELKOM
2
nd
Respondent
ABSA
BANK LIMITED
3
rd
Respondent
STANDARD
BANK OF SOUTH AFRICA LIMITED
4
th
Respondent
In
Re:
BAILE
TRADING (PTY) LTD
Plaintiff
and
MATJHABENG
LOCAL MUNICIPALITY
Defendant
CORAM:
VAN ZYL, J
HEARD
ON:
9
FEBRUARY 2024
DELIVERED
ON:
31
JULY 2024
[1]
The applicant is seeking the following relief:
“
1.
That this application be heard as an urgent application in terms of
Rule 6(12) of the Uniform Rules
of this Honourable Court and that the
non-compliance with the forms, service and time lines provided for in
the Rules be condoned.
2.
That the Writ of Execution in Case Number 3498/2023 issued by the
Registrar of the Free State
Division of the High Court on or about 4
December 2023, be set aside.
3.
That the Writ of Execution in Case Number 3787/2023 issued by the
Registrar of the Free State
Division of the High Court on or about 4
December 2023, be set aside.
4.
That the attachment by the second respondent of the applicant’s
bank accounts with
the third respondent by way of Notice in terms of
Rule 45(12)(a) (garnishee order), issued on or about 6 December 2023,
in Case
Number 3498/2023 and Case Number 3787/2023, be set aside.
5.
That the first respondent pays the following attached sums to the
applicant’s bank
accounts with the third Respondent within one
business day of this order:
5.1
R1 223 923.06 (one-million two-hundred-and-twenty-
three-thousand nine-hundred-and-twenty-three rand and six cents) in
Case Number 3787/2023.
5.2
R59 435.39 (fifty-nine-thousand four-hundred-and-thirty-five
rand and thirty-nine cents) in Case
Number 3498/2023.
6.
That the second respondent’s tax invoices rendered to the third
respondent in respect
of Case Numbers 3498/2023 and 3787/2023 be set
aside.
7.
That the first respondent, and any party who opposes the relief
sought jointly and severally,
pay the costs of this application on an
attorney and client scale, including the costs of two counsel where
so employed.”
Succinct
background:
[2]
Default judgments were granted in favour of the first respondent
against the applicant by the Registrar on
22 August 2023 in case
number 3498/2023 and on 8 September 2023 in case number 3787/2023.
[3]
According to the applicant the first respondent`s invoices relied on
for the default judgments in the two
cases at issue in this
application, together with their underlying procurement processes,
and service level agreement breached
several acts, regulations and
municipal policies.
[4]
The aforesaid default court orders are in dispute in a rescission
application filed on 7 December 2023 and
a further pending
application in case number 1242/2022.
[5]
Re-issued writs of execution relying on the aforesaid court orders
were issued on 4 December 2023.
[6]
Notices of attachment (garnishee orders) were thereupon issued based
on the aforesaid writs of execution.
Both garnishee orders were
issued on or about 6 December 2023 in terms of Rule 45(12)(a).
[7]
On Tuesday, 12 December 2023, the relationship executive of Absa Bank
(the third respondent, but herein referred
to as “Absa”)
informed the Municipal Manager and the Chief Financial Officer of the
applicant by e-mail that writs
have been received in favour of the
first respondent in case number 3787/2023 in an amount of
R1 223 923.06. According
to the Municipal Manager
this alerted him to this execution process and the threatened
execution against the applicant’s
bank account with Absa.
[8]
On or about 18 December 2023, the garnishee order in case number
3787/2023 was complied with by Absa and Absa
paid the second
respondent (“the sheriff”) the sum of R1 223 923.06.
[9]
On or about 20 December 2023, the garnishee order in case number
3498/2023 was complied with by Absa and Absa
paid the sheriff the sum
of R59 435.39.
[10]
According to the applicant the aforesaid processes of execution and
attachment fall to be set aside for the reasons set
out in the
founding affidavit. It is the applicant`s case that the writs
of execution should be set aside as same are unlawful
and constitutes
a nullity and the garnishee orders should also be set aside as being
unlawful.
[11]
Mr Snijders, on behalf of the applicant, consequently submitted as
follows at paragraph 9 of his heads of argument:
“
The
Municipality has a clear right to the relief sought: public
municipal funds have been unlawfully removed from the Municipality’s
bank account under pretence that there is a court order, a writ of
execution and a garnishee order authorizing such removal.
The
writ of execution is not authorized by the court order and the
garnishee order is not authorized by either the court order
or the
writ.”
Urgency:
The
applicant’s case:
[12]
As previously indicated, the Municipal Manager states that he was
informed by Absa on 12 December 2023 that a writ was
received in case
number 3787/2023. It subsequently transpired that a writ had
also been issued in respect of case number
3498/2023 in favour of the
first respondent.
[13]
At paragraph 51 of the founding affidavit, the applicant states as
follows:
“
51.
At this time of year, days before most municipal staff were on annual
leave, including the crucial legal and
financial staff; it was
well-high impossible for the Municipality to determine the underlying
facts regarding the re-issued writs
of execution.
52.
By that date, on 7 December 2023, an application of rescission had
already been launched. The
effect of the execution process on
the pending rescission application had to be considered by the
Municipality and its staff as
well as outside legal representatives.”
[14]
It was only by about 8 January 2024 that the Municipality retained
outside legal representatives to investigate the facts
to assist with
the filing of this application.
[15]
According to the applicant unlawful execution, not in conformity with
the present court orders, is urgent.
[16]
Several averments are made about to the effect that municipal funds
should be employed for constitutional and statutory
purposes of the
Municipality to execute the Municipality’s service delivery
mandate and financial commitments to its community
and to its
employees.
[17]
According to the applicant, the urgency is not self-created, since it
is a consequence of the unlawful execution process
with no service of
any writ or notice of attachment in conformity with statutory
prescripts.
[18]
The applicant avers that should an urgent order not be granted, the
Municipality will suffer prejudice in that its public
funds risk
being dissipated by the first respondent.
[19]
The applicant further avers that it will not be afforded substantial
redress at a hearing of the application in due course.
The
first respondent’s case:
[20]
In the answering affidavit the first respondent sets out the history
of the process which followed upon the default judgments
which were
issued in the present matter. From that it is apparent that a
warrant of execution was previously issued pursuant
to the default
judgments and executed against the movables of the applicant on 7
September 2023 and 18 September 2023 respectively.
Garnishee
orders were subsequently issued and on 15 November 2023 fourth
respondent adhered to the garnishee order and the said
funds were
paid over to the first respondent. During those processes the
attorneys acting for both parties attempted to finalize,
inter
alia
, the present claim by way of settlement and on 9 May 2023 a
list of all outstanding judgments, which included the interest
component
of the present judgment, was sent to the attorneys of
record of the applicant.
[21]
Thereafter a re-issue of the writs of execution in respect of the
outstanding interest component of the judgments were
issued and
executed on 7 December 2023. This money had in the meantime also been
paid to the first respondent on 18 and 20 December
2023 respectively.
[22]
The first respondent furthermore avers as follows in its answering
affidavit:
“
4.3
On its own version the Applicant explains that it had already
obtained knowledge of the new writ on 12 December
2023, yet dragged
its feet and only approached Court on 24 January 2024. The only
explanation offered for the inordinate
delay between having knowledge
of the attachment and this current application, is the alleged
absence of role players within the
internal structure of the
Applicant during the festive period.
4.4
The Applicant does not mention names of these employees, he does not
mention why these employees would
have in any event caused it to act
more swiftly nor does it explain at all how its Municipal Manager
went about to take the necessary
pro-active steps to attack the
attachment in December 2023.
4.5
Over and above the lack in explanation for the inordinate delays in
pursuing this application, the Applicant
also fails to disclose that
it had throughout these proceedings been duly represented by its
current attorneys. Its attorneys
are tasked with providing it
with legal advice, not its internal employees.
4.6
The Applicant created its own urgency through the lackadaisical
manner in which it dealt with the attachment
whilst having full
knowledge of the consequences thereof.”
Averments
in the replying affidavit:
[23]
The first respondent denies that the urgency is self-created.
It points out that the urgency, in the context of
the relief sought,
arose because new warrants of execution and new garnishee orders
against salaries in the municipal account had
been issued.
[24]
The first respondent again points out that the execution and
attachment concerned in this matter pertains to the second
order of
the respective court orders, being the interest order, which is a new
claim. He repeats that this new claim, new
warrant and new
garnishee order are not authorized by the court order. The urgency
consequently follows upon the unlawful and unconstitutional
actions
by the first respondent and the sheriff.
[25]
With regard to the re-issue of the writs of execution, the applicant
further states as follows in its replying affidavit:
“
26.1
I note that the re-issued writs of execution were issued and executed
on 7 December 2023.
26.2
I note that the First Respondent, Baile, was paid on 18 December and
20 December 2023.
26.3
These payments are a source of the urgency of this matter.
26.4
The funds paid to Baile are at risk of dissipation, and an order to
repay is urgently prayed for.”
[26]
According to the applicant the first respondent purposely executed
against the municipal bank accounts during the period
of annual leave
of most of the municipal staff, between the second week of December
and the second week of January. The timing
of this execution
process was deliberate, to avoid the Municipality properly defending
itself.
[27]
The applicant further avers that a rescission application was pending
and that the applicant nevertheless persisted with
this unlawful
execution and attachment.
[28]
The applicant avers that as soon as the financial and legal staff who
have knowledge of the facts, and himself, as well
as outside legal
representatives, were available in January 2024, the matter was
brought to the ordinary urgent court and set down
accordingly.
[29]
According to the applicant the merits of the application in itself
constitute urgent relief, in that the first respondent
possesses
municipal funds obtained by unlawful means.
Legal
principles:
[30]
Rule 6(12) determines as follows:
“
6(12)(a)
In urgent applications the court or a judge may dispense with the
forms and service provided for in these rules
and may dispose of such
matter at such time and place and in such manner and in accordance
with such procedure (which shall as
far as practicable be in terms of
these rules) as it deems fit.
(b)
In every affidavit filed in support of any application under
paragraph (a) of this subrule, the applicant must set forth
explicitly the circumstances which is [
sic
] averred render
[
sic
] the matter urgent and the reasons why the applicant
claims that applicant could not be afforded substantial redress at a
hearing
in due course.”
[31]
It is consequently peremptory that an applicant sets out explicitly
the circumstances on which he relies to render the
matter urgent and
the reason why he claims that he cannot be afforded substantial
relief at the hearing in due course.
[32]
As correctly submitted by Mr Snijders, the urgency of commercial
interests may justify the invocation of the subrule
no less than any
other interests. See
Twentieth Century Fox Film
Corporation v Anthony Black Films (Pty) Ltd
1982(3) SA 582
(W) at 586 G. See also
Bandle Investments (Pty) Ltd v
Registrar of Deeds
2001 (2) SA 203
(SE) at 213 E – F.
[33]
In the unreported judgment of
East Rock Trading 7 (Pty) Ltd v
Eagle Valley Granite (Pty) Ltd
(11/33767) [2011] ZAGPJHC 196
(23 September 2011) the following principles were eloquently set out
in respect of Rule 6(12) at
paras [6] to [9]:
“
[6]
The import thereof is that the procedure set out in rule 6(12)
is not there for taking. An applicant has to set forth
explicitly the
circumstances which he avers render the matter urgent. More
importantly, the Applicant must state the reasons why
he claims that
he cannot be afforded substantial redress at a hearing in due course.
The question of whether a matter is sufficiently
urgent to be
enrolled and heard as an urgent application is underpinned by the
issue of absence of substantial redress in an application
in due
course. The rules allow the court to come to the assistance of a
litigant because if the latter were to wait for the normal
course
laid down by the rules it will not obtain substantial redress.
[7]
It is important to note that the rules require absence of substantial
redress. This is not equivalent to the
irreparable harm that is
required before the granting of an interim relief. It is something
less. He may still obtain redress in
an application in due course but
it may not be substantial. Whether an applicant will not be able
obtain substantial redress in
an application in due course will be
determined by the facts of each case. An applicant must make out his
cases in that regard.
[8]
In my view the delay in instituting proceedings is not,
on its own a ground, for refusing to regard the matter
as urgent. A
court is obliged to consider the circumstances of the case and the
explanation given. The important issue is whether,
despite the delay,
the applicant can or cannot be afforded substantial redress at a
hearing in due course. A delay might be an
indication that the matter
is not as urgent as the applicant would want the Court to believe. On
the other hand a delay may have
been caused by the fact that the
Applicant was attempting to settle the matter or collect more facts
with regard thereto.
[9]
It means that if there is some delay in instituting the
proceedings an Applicant has to explain the reasons for
the delay and
why despite the delay he claims that he cannot be afforded
substantial redress at a hearing in due course. I must
also mention
that the fact the Applicant wants to have the matter resolved
urgently does not render the matter urgent. The correct
and the
crucial test is whether, if the matter were to follow its normal
course as laid down by the rules, an Applicant will be
afforded
substantial redress. If he cannot be afforded substantial redress at
a hearing in due course then the matter qualifies
to be enrolled and
heard as an urgent application. If however despite the anxiety of an
Applicant he can be afforded a substantial
redress in an application
in due course the application does not qualify to be enrolled and
heard as an urgent application.”
[34]
It is trite that the aforesaid requirements must be set out in an
applicant’s founding affidavit, which constitutes
the pleadings
and the evidence.
[35]
In
Arcfyre International (Pty) Ltd v Govender
(2023-098452) [2023] ZAGPJHC 1243 (31 October 2023) the following
principles are set out at para [24]:
“…
The
applicant must fully set out the facts supporting the conclusion
advanced; mere lip service will not do. If there is some
delay
in instituting the proceedings an applicant has to explain the
reasons for the delay and must also explain why, despite the
delay,
it claims that it cannot be afforded substantial redress at the
hearing in due course. This however does not mean
that an
applicant can create its own urgency by simply waiting until the
normal rules of court can no longer be applied and the
delay in
bringing the application, or self-created urgency, is the basis for a
court to refuse to hear a matter on an urgent basis.”
[36]
The application must be brought as soon as possible; cogent reasons
must be advanced to the court for any delay in bringing
the
application. In the judgment of
Dladla v Ethekwini
Municipality
(2799/2023) [2023] ZAKZDHC 15 (4 April 2023) the
court summarized the applicable principles as follows at para [37] of
the judgment:
“
Considering
the observations in
East Rock Trading, Jiba
and
Maqubela
,
it is apparent that, in order for a litigant to be successful in an
urgent application, three conditions must be met:
(a)
The application must be brought as soon as possible; accordingly
cogent reasons must be advanced
to the court for any delay in
bringing the application;
(b)
The Applicant must provide a detailed account of why they believe
that they will not receive substantial
redress if the matter is heard
in the ordinary cause; and
(c)
The realization of the
dies
will depend on the degree of
urgency.”
[37]
An applicant cannot create its own urgency by simply waiting until
the normal rules can no longer be applied. In
the unreported
judgment of
Van Der Merwe v Nel N.O.
(2483/2023) [2023]
ZAECMKHC 86 (11 August 2023) this principle was stated as follows at
paras [30] to [32]:
“
[30]
Pertinent to questions of urgency, it is trite that a party is not
entitled to rely on urgency that
is self-created when seeking a
deviation from the rules of court. The rationale is that the
more immediate the reaction by
the litigant to remedy the situation
by way of instituting proceedings the better it is for establishing
urgency.
[31]
The consideration of urgency requires a court to be placed in a
position where it must appreciate
that if it does not grant immediate
relief, something unlawful is likely to happen at a particular point
in time.
[32]
Urgency is diminished where the litigant takes longer to act from the
date of the event giving
rise to the proceedings. In short, a
party seeking relief must come to court immediately or risk failing
on urgency.
The latitude extended to dispense with the rules of
court in circumstances of urgency is not available to a party who is
dilatory
to the point where its very own activity is the cause of the
harm on which it relies to seek relief.”
[38]
In
Chung-Fung (Pty) Ltd v Mayfair Residents Association
(2023/080436) [2023] ZAGPJHC 1167 (13 October 2023) the court
referred to the judgment of
Roets N.O. v SB Guarantee Company
(RF) (Pty) Ltd
[2022] JOL 55628
(GJ) at [26] and stated as
follows at para [27] of the judgment:
“
[27]
In Roets N.O. for example, this court found that the applicant had
sat “on its laurels” and had unduly
taken its time to
approach the urgent court claiming irreparable harm. This led
to the application being struck from the
roll on account of
‘self-created urgency’. But I think this decision
properly understood, demonstrates that ‘self-created’
urgency involves a degree of contrivance to jump the que of hearings
in the ordinary course. …”
Consideration
of urgency:
[39]
On the applicant’s own version the Municipal Manager was
informed by Absa on 12 December 2023 that a writ had been
received in
case number 3787/2023. It subsequently transpired that a writ
had also been issued in respect of case number
3498/2023 on behalf of
the first respondent.
[40]
What is of paramount importance is that, on the applicant’s own
version, it was at that stage under the impression
that the money had
been paid over to the sheriff and was in the hands of the sheriff,
which indeed it was at that stage.
At the time of the filing of
the present application, the applicant was still under the same
impression. However, after receipt
of the answering affidavit,
the applicant became aware that the money had been paid over to the
first respondent on 18 and 20 December
2023, respectively.
[41]
Had the applicant brought an urgent application to stay the further
execution process at the stage when the re-issue
of the writs came to
its attention on 12 December 2024 in order to prevent that the money
be paid over to the first respondent,
it would, in all probably, have
been able to make out a proper case for urgency.
[42]
Instead the applicant sat idly by, or, as described in the judgment I
referred to, “sat on its laurels”,
and it was decided to
rather continue with the role players’ respective holiday
plans, than to take immediate steps to safeguard
the money which was
at that stage still in the hands of the sheriff. It appears that the
applicant had an attitude that it will
deal with this problem once
the Municipal Manager returns from holiday.
[43]
The applicant did not even attempt to write a letter of demand to the
first respondent at that stage, requesting that
the further execution
process be stayed pending the finalization of the rescission
application. Instead, the applicant did
absolutely nothing.
[44]
Further, on the applicant’s version, it retained the services
of outside legal representatives to investigate the
facts and assist
with the filing of this application “by about 8 January 2024”.
The first respondent pointed
out in its answering affidavit that the
applicant has been using the same set of legal representatives for
all the matters between
the parties, including in the procedures and
applications which preceded the present application. It was therefore
not a matter
of new legal representatives having to come into the
picture who knew nothing about the background of the present
disputes.
[45]
In addition, the application was only launched on 24 January 2024.
No explanation has been provided for the lapse
of time between 8
January 2024 and 24 January 2024.
[46]
In the founding affidavit, as previously indicated, the applicant
made the following averment:
“
64.
Should an urgent order not be granted, the Municipality will suffer
the prejudice that its public funds risk
being dissipated by the
first respondent”.
[47]
No reasons have been advanced for this alleged fear of the
applicant. In addition, this might have been a valid
reason for
urgency had the money still been in the hands of the sheriff and not
yet been paid to the first respondent. At this
stage, however, the
money has already been paid over to the first respondent and this
alleged ground of urgency fell away the moment
it came to the
applicant’s knowledge by means of the answering affidavit that
the money had been paid over to the first respondent.
Despite
this knowledge, the applicant simply persisted with the application.
[48]
At paragraph 67 of the founding affidavit the applicant made the mere
allegation by stating the following:
“
67.
Accordingly, the applicant will not be afforded substantial redress
at the hearing of the application in due
course.”
[49]
This is a bold statement without any substance or justification,
especially considering that the factual position presently
is that
the money has already been paid over to the first respondent more
than a month before the launching of this application.
[50]
The application was consequently launched at a stage when the
repayment of the money was requested in order to prevent
that it be
paid to the first respondent pending the rescission application.
However, considering that the money has now already
been paid to the
first respondent, it is the issue of the repayment of the money from
the first respondent to the applicant which
I need to consider
whether the requested relief is (still) urgent or not.
[51]
Now that the money had already been paid over to the first
respondent, due to the applicant having dragged its feet to
approach
court immediately after they became aware of the writs which were
served on Absa, the money is that of the first respondent
to deal
with as it wishes. An attempt by the applicant to “safeguard”
the money now that it is already in the
hands of the first
respondent, will
in substance
constitute an anti-dissipation
interdict, also known as a Mareva injunction. The requirements for
such an anti-dissipation interdict
have not been met.
[52]
In his heads of argument Mr Snijders submitted as follows at
paragraph 68:
“
68.
Public funds have been unlawfully removed from the municipal bank
account and paid to a private company, the
first respondent.
The municipality’s funds paid to Baile as admitted by the first
respondent, risk dissipation, the
same reasons supporting the stay of
execution ordered by the full bench in
Ikamva
.”
The
judgment which Mr Snijders refers to is the one of
MEC,
Department of Public Works v Ikamva Architects
2022 (6) SA
275
(ECB) at para [93], which judgment was also upheld on
appeal, reported as 2023(2) SA 514 (SCA). However, from a
reading
of the said judgment, it is clearly distinguishable from the
present matter. In that matter the application was brought
before
the execution process had come to the point where the money
had been paid over to the creditor and it was therefore safeguarded
by staying the further process of execution pending an application
for rescission.
[53]
In the circumstances, where the money has already been paid over to
the first respondent more than a month ago before
the launching the
present application, an urgent order will not be able to safeguard
the money anymore. The horse has bolted. No
greater (if any)
protection will be granted by such an order should it be granted now
than it would should it be granted in due
course.
[54]
Mr Grobler, on behalf of the first respondent, referred to the
respective judgments in which it has been determined that
Rule 6(12)
is the most abused rule. See,
inter alia
,
Luna
Meubelvervaardigers (Edms) Bpk v Makin (t/a Makin’s Furniture
Manufacturers
1977 (4) SA 135
(W) at 136 B. See also
Beeslaar v Mokone
2023 JDR 1574 (GP) at para [7]. The
present matter constitutes, in my view, such an instance of abuse of
Rule 6(12).
[55]
In my view the applicant subsequently failed to make out a proper
case for urgency and the matter therefore stands to
be struck from
the roll.
Costs:
[56]
There is no reason why costs should not follow the outcome.
Order:
[57]
The following order is made:
1.
The application is struck from the roll.
2.
The applicant is ordered to pay the costs of the application.
C.
VAN ZYL, J
On
behalf of Applicant:
Adv
JP Snijders
Instructed
by:
Botes
Mahlobogoane Van Heerden Inc.
Attorneys
C/o
Pieter Skein Attorneys
BLOEMFONTEIN
E-mail:
cassie@bmhatt.co.za
On
behalf of First Respondent:
Adv S
Grobler S.C.
Instructed
by:
Kruger
Venter Attorneys
BLOEMFONTEIN
E-mail:
reception@krugerventerinc.co.za