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[2024] ZAECBHC 24
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Delta Property Fund Limited v Member of the Executive Council Eastern Cape Department Public Works and Infrastructure and Others (265/2023) [2024] ZAECBHC 24 (3 September 2024)
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION – BHISHO)
Reportable/
Not
Reportable
Case no.: 265/2023
Matters heard on: 29
August 2024
Judgment delivered on:
03 September 2024
In
the matter between:
DELTA
PROPERTY FUND LIMITED
Applicant
and
THE
MEMBER OF THE EXECUTIVE COUNCIL,
EASTERN
CAPE DEPARTMENT: PUBLIC
WORKS
AND INFRASTRUCTURE
First
Respondent
THE
MEMBER OF THE EXECUTIVE COUNCIL:
EASTERN
CAPE DEPARTMENT:
SOCIAL
DEVELOPMENT
Second
Respondent
THE
MEMBER OF THE EXECUTIVE COUNCIL,
EASTERN
CAPE DEPARTMENT OF
ENVIRONMENTAL
AFFAIRS AND TOURISM
Third
Respondent
THE
PREMIER OF THE EASTERN CAPE PROVINCE
Fourth
Respondent
JUDGMENT
BRODY
AJ
1.
Summons was issued in this matter on the 26
th
of April
2023 where the plaintiff, Delta Property Fund Limited (“Delta”)
instituted an action against the Provincial
Government of the Eastern
Cape: Department of Roads and Public Works (“Public Works”),
as landlord, for the confirmation
of a cancellation of a lease
agreement and the payment of the considerable sum of R138 785 219.00,
together with interest
at 10.5%
a tempora morae
, and costs of
suit.
2.
Delta alleged that Public Works was in arrears, in various amounts,
arising out
of the rental of premises described as erf 1[…],
Beacon Hill Building, situated at the corner of H[…] and H[…]
Close Buffalo Industrial Area, King William’s Town, (“the
premises”).
3.
Attached to the particulars of claim was the signed lease agreement
between “
the Provincial Government of the Eastern Cape
(Department of Roads and Public Works) and Delta”
.
4.
Various terms of this lease agreement are relevant to the present
application.
5.
When Public Works served and filed their plea, they raised a special
plea of
non-joinder of the Department of Social Development, the
Department of Economic Development, Environmental Affairs and
Tourism.
Their non-joinder plea reads as follows:
“
15.
Under our law there is a duty to join a party if that party has a
direct and substantial interest in
any order that the Court might
make in proceedings or if such order cannot be sustained or carried
into effect without prejudicing
that party, he is a necessary party
and should be joined unless the court is satisfied that he has waived
his rights to be jointed.”
6.
The plea went further to state that:
“
20.
Essentially, the lease agreement discloses these two government
institutions as being the beneficiaries
or occupants standing to
benefit from the Lease Agreement. As such these two entities clearly
have a direct and substantial interest
in the issues involved and in
the order the court may make…
22.
These two occupants must be joined, and it was an irregularity not to
join them. Clearly
the cancellation of the lease and possible
eviction and any other order the court may make will be prejudicial
to them and affect
them.”
7.
Public Works then raised the issue of the provisions of
section 2(2)
of the
State Liability Act, No 20 of 1957
, as further reason why the
other two departments should be joined.
8.
Understandably, Delta then brought an application on the 4
th
of March 2024 to join the Member of the Executive Council, Eastern
Cape Department: Social Development, (“Social Development”),
the Member of the Executive Council, Eastern Cape Department:
Economic Development Environmental Affairs and Tourism (“Tourism”)
and the Premier of the Eastern Cape (“the Premier”) as
parties to the action.
9.
Social Development and Tourism then opposed the application and
alleged
inter alia
that Public Works was “
rather
mischievous”
, “
unfounded and unsubstantiated
”
in their special plea of non-joinder.
10.
When the matter was called to be argued I raised the possible
conflict of interest with
Mr Mlalandle, who acted on behalf of the
State Attorney in East London, and who, in turn, acted for Social
Development and Tourism.
11.
The Premier did not oppose the application brought and there was
accordingly no representation
on his behalf.
12.
I expressed the view to the parties that it was not appropriate for
the same law office
to be acting on behalf of Public Works, Social
Development, and Tourism in circumstances where the one was blaming
the other and,
in particular, where the one was heavily criticising
the other with allegations of being “
mischievous”
,
and the like.
13.
Mr Mlalandle undertook to take this up with the State Attorney’s
office in due course.
I can see no reason why another State
Attorney’s office, or a private legal practitioner, cannot act
for Social Development
and Tourism, in the circumstances.
14.
Despite the conflict of interest, and in the interests of finality, I
directed that the
matter should be argued.
15.
In the matter of
Mulaudzi vs Old Mutual Life Insurance Company
(South Africa) Limited and Others
2017(6) SA 90 (SCA); Ponnan JA,
in a majority judgment, stated the following principal in regard to
joinder applications:
“
[23]
Joinder is required, only if the party has a direct and substantial
interest which may be affected prejudicially
by the judgment of the
court in the proceedings concerned.”
16.
This principal is also fully set out in uniform
rule 10(1)
and (2)
which provides:
“
(1)
Any number of persons, each of whom has a claim, whether jointly,
jointly and severally, separately
or in the alternative, may join as
plaintiffs in one action against the same defendant or defendants
against whom any one or more
of such persons proposing to join as
plaintiffs would, if he brought a separate action, be entitled to
bring such action, provided
that the right to relief of the persons
proposing to join as plaintiffs depend upon the determination of
substantially the same
question of law or fact which, if separate
actions were instituted, would arise on each action, and provided
that there may be
a joinder conditionally upon the claim of any other
plaintiff failing.”
17.
The Constitutional Court in
SA Riding for the Disabled Association
vs Regional Land Claims Commissioner and Others
2017(5) SA 1(CC)
stated the test as follows:
“
It is now
settled that an applicant for intervention must meet the direct and
substantial interest test in order to succeed. What
constitutes a
direct and substantial interest is a legal interest in the
subject-matter of the case which could be prejudicially
affected by
the order of the court. This means that the applicant must show that
it has a right adversely affected or likely to
be affected by the
order sought. But the applicant does not have to satisfy the court at
the stage of intervention that it will
succeed. It is sufficient for
such applicant to make allegations which, if proved, would entitle it
to relief.
[10]
If the applicant shows that it is some right which is affected by the
order issued, permission
to intervene must be granted. For it is a
basic principle of our law that no order should be granted against a
party without affording
such party a pre-decision hearing. This is so
fundamental that an order is generally taken to be binding only on
parties to the
litigation.
[11]
Once the applicant for intervention shows a direct and substantial
interest in the subject matter
of the case, the court ought to grant
leave to intervene.”
18.
There are also many other authorities that set out these principles
and tests.
[1]
19.
Ms Martin, acting on behalf of Delta, referred this court to the
original letter of demand
which made reference to all the
abovementioned departments and also various paragraphs in the lease
agreement which made it clear
that Public Works was entitled to
delegate other departments and spoke in general germs to the
“
provincial government”
.
20.
She also emphasised that assets belonging to Social Development and
Tourism were still on
the premises today. She motivated for the
joinder of the Premier on the basis that in terms of section 125 of
the Constitution,
the substantial claim against the various
provincial departments, must affect the budget if successful, and
there can therefore
be no doubt that the Premier has a substantial
interest in the outcome of the action proceedings.
21.
I am in agreement with Ms Martin that necessity and convenience are
the primary factors
before considering a joinder application.
[2]
22.
Ms Martin argued that, in fact, as the Social Development and Tourism
had a direct and substantial
interest in the outcome of the action
proceedings, this court had no discretion but to grant an order to
join.
23.
Mr Mlalandle argued that there was “
no answer
” to
the intentions of Public Works. His further argument was that Public
Works owed a duty of care to the other departments.
24.
Although he valiantly attempted to persuade me that the lease of
agreement made no provision
for a sub-letting, and that no other
department could occupy the premises, he conceded that Social
Development and Tourism had
occupied certain areas of the premises in
the past and that as at present date there were boxes and furniture
belonging to those
departments on the premises. After taking
instructions, during argument, he properly conceded that the two
departments were “
occupying
” the premises by
virtue of their boxes and furniture.
25.
It is accordingly clear to this court that Social Development and
Tourism have not given
vacant occupation of those portions of the
premises to Delta, as landlord.
26.
Although reference was made to correspondence in the papers that
indicated that Social Development
and Tourism wanted to relocate to
head office, they still have an “
interest
” in the
matter by virtue of their occupation, although beneficial, in the
form of furniture and boxes.
27.
I do not agree with Mr Mlalandle that Social Development and Tourism
have no “
value
” to the litigation and that,
accordingly, they have “
no interest
” in the
outcome of the action proceedings. I also do not agree with him that
Social Development and Tourism will be prejudiced
by being joined
especially in circumstances where a concession was properly made by
Mr Mlalandle that the departments have beneficial
occupation of part
of the premises.
28.
In reply, Ms Martin conceded that the failure to join the departments
and the Premier was
an error in the drafting of the particulars of
claim.
29.
I raised the issue of the form of the relief sought in the
applicant’s notice of motion
and proposed that this be amended
to make provision for further pleadings, once a joinder application
is successful, and the time
periods related thereto. Ms Martin
conceded that this was necessary and undertook to furnish this court
with an amended notice
of motion. This was duly done and received the
day after the matter was argued.
30.
There can be no doubt, and based on the authorities referred to
above, that Social Development
and Tourism, together with the
Premier, have a direct and substantial interest in the proceedings
and will be prejudiced if they
are not joined as parties to the
proceedings if the applicant succeeds in its relief.
31.
In addition, Public Works not only raised the issue of non-joinder in
its special plea,
however, pleaded that there was a duty for Social
Development and Tourism to be joined.
32.
Mr Mlalandle argued that if I found in favour of the respondents, I
should order costs on
the scale as between attorney and client. Ms
Martin requested costs on a party and party basis and on scale B as
set out in rule
69(7).
33.
I can see no reason why the usual costs order should not follow the
result in this application.
34.
In the result, the following order will issue:
1.
The second, third and fourth respondents are joined to the action
proceedings
in case no: 265/2023 and the respondents will
collectively be described as follows:
1.1
the first respondent is the first defendant;
1.2
the second respondent is the second defendant;
1.3
the third respondent is the third defendant;
1.4
the fourth respondent is the fourth defendant.
2.
The applicant shall serve this order on the first – fourth
defendants,
and second, third, and fourth defendants are required to
indicate whether they intend to defend the action proceedings within
ten
(10) days of receipt of this order.
3.
The parties that do defend the matter are required to serve and file
their plea
and/or counterclaim within twenty (20) court days after
filing their notice of intention to defend, and the remaining parties
will
be required to file their further pleadings in terms of the
time-periods afforded in the rules.
4.
The plaintiff is granted leave to amend its particulars of claim
within five
(5) days of the granting of this order to reflect the
additional parties, as set out above.
5.
The second and third respondents are required to pay the costs of
this application
on scale B as set out in rule 69(7).
B.B.
BRODY
ACTING
JUDGE OF THE HIGH COURT
APPEARANCES:
Counsel
for the Applicant
: Adv. Martin
Instructed
by
:
Tshisevhe Attorneys Inc.
c/o
Squire Smith & Laurie Inc.
44
Taylor Street
KING
WILLIAM’S TOWN
(Ref.:
A FRIDERICHS/UN/MAT119151)
Counsel
for 2
nd &
3
rd
Respondents :
Adv.
Mlalandle
:
The State Attorney
c/o
Shared Legal Services
Office
of the Premier
32
Alexander Road
KING
WILLIAM’S TOWN
(Ref.: 185/24-P4 (Mrs
Yoba)
[1]
Amalgamated Engineering Union vs Minister of Labour 1949(3) SA
637(A), Ploughman N.O. vs Pauw 2006(SA) 334(C), Gordon vs Department
of Health, Kwa-Zulu Natal 2008(6) SA 522 (SCA), Permont Global (KZN)
(Pty) Ltd vs Afrisan KZN Limited
(2020) 4 All SA 226
and Old Mutual
Life Insurance Company SS Limited vs Swemmer 2004(5) SA 373(SCA)
[2]
Harding vs Basson 1995(4) SA 499C at 501H and Conola vs Willers
1972(4) SA 470M, 475A