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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case No: A5034/2021; 49337/2017
Reportable: No
Of interest to other Judges: No
Revised: No
Date: 4 August 2026 N Strathern AJ
Signature: ________________
In the matter between:
EAGLE TWO PROPERTY INVESTMENTS (PTY) LTD First Applicant
EAGLE THREE PROPERTY INVESTMENTS (PTY) LTD Second Applicant
and
CITY OF JOHANNESBURG METROPOLITAN Respondent
MUNICIPALITY
Heard on: 22 July 2026
Decided on: 4 August 2026
Coram: N Strathern AJ
Summary: Compromise — settlement reached during court -directed negotiations —
actual and apparent authority established — no evidence of lack of authority — late
answering affidavit not condoned — settlement declared and made an order of court —
attorney-and-client costs for the City’s dilatory conduct.
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______________________________________________________________________
JUDGMENT
____________________________________________________________________________
N Strathern AJ
Introduction
[1] This is an application to enforce a compromise concluded in litigation. The
Applicants seek a declarator that the dispute was finally settled on or
about 11 October 2022 on the terms embodied in annexure NOM1, and
an order making those terms an order of court. In the alternative, they
seek a referral to oral evidence. The Municipality belatedly opposes the
relief and seeks condonation for its answering affidavit.
[2] The dispute arises from the Applicants' claim for a refund of municipal
charges they say they were wrongly billed. Default judgment was granted
in their favour on 25 April 2019. The Municipality applied to have that
judgment set aside and failed. It then obtained leave to appeal, but
allowed the appeal to lapse, and the appeal has never been reinstated.
When the Municipality's application to revive the appeal came before the
Full Court on 11 April 2022, that Court postponed the application and
directed the legal representatives of both sides to engage with one
another so that settlement could be explored. The settlement now in issue
is the product of that litigation and those court-directed negotiations.
[3] The narrow questions are whether the Municipality has made out a case
for condonation, whether a settlement was concluded with authority ,
whether the proposed order meets the requirements for a compromise to
be made an order of court , and what costs order justice requires. The
facts show an extraordinary and continuing failure by the Municipality to
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prosecute its litigation responsibly, comply with rules and court directions,
or put up admissible evidence to support its repudiation of a settlement
which its own legal representatives repeatedly confirmed.
The procedural history
[4] The action was instituted in December 2017. The Municipality delivered a
notice of intention to defend but did not deliver a plea. A notice of bar was
served in February 2018. The Applicants granted indulgences while the
Municipality repeatedly said that the matter could be settled, but no plea or
competent application to uplift the bar followed. Default judgment was
granted on 25 April 2019.
[5] The rescission application was dismissed. The Full Court was thereafter
faced with an application to reinstate a lapsed appeal. On 11 April 2022 it
encouraged the parties to settle and removed the matter from the roll for
that purpose.
[6] Four meetings followed, on 4 May, 20 May, 3 August and 11 October
2022. They were attended by the Applicants’ attorney and counsel, the
Municipality’s attorney, Mr Mabaso, the Municipality’s senior counsel, Adv
Georgiades SC, and Municipality officials, including Mr Tuwani Ngwana,
the senior legal adviser who had deposed to affidavits for the Municipality
in related proceedings. The Municipality ’s representatives were given time
to examine their records and calculations. The amount ultimately agreed
was substantially lower than the default judgment, and did not carry
interest. After no less than four separate meetings being held, where not
only the respondent’s legal representatives where present but also
authorised employees of the respondent, the parties reached full and final
settlement.
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The agreement and its confirmation
[7] The Applicants’ evidence is that, at the meeting of 11 October 2022, the
Municipality’s officials, Mr Mabaso and Adv Georgiades confirmed that
they had authority to settle. The parties then agreed that the Municipality
would:
a. credit R4 966 824.79 to the Applicants;
b. allocate that credit to the account identified in the draft order; and
c. pay the Applicants’ party-and-party costs, taxed or agreed.
[8] The central terms were promptly recorded in a contemporaneous email to
Mr Mabaso, copied to both counsel. Adv. Georgiades and Mr. Mabaso
also confirmed again that the officials of the Respondent (and them)
indeed had the authority to settle the matter, and it was agreed that the
matter was settled during this meeting on the above terms.
[9] The subsequent written conduct is incompatible with a mere proposal still
awaiting approval. Adv Georgiades confirmed in writing that he was
“happy with the draft order” . Mr Mabaso later confirmed, in writing, that
there had been no problem with it from the time Adv Georgiades was
involved and that, “in a nutshell ”, he was happy with it. Those
confirmations came after the settlement terms had been set out and after
the date for an unopposed enrolment had been obtained.
[10] The draft order is clear. It records the Municipality ’s indebtedness in R4
966 824.79, directs the credit to the Applicant’s account within ten days ,
and provides for costs, including the costs since inception and of the
appeal, on the party -and-party scale. It is neither vague nor incapable of
execution. The draft settlement order states: “In order to settle the
abovementioned indebtedness, the appellant is ordered to provide the
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respondents with a credit in the amount of R 4 966 824,79 on the account
held by the second respondent at the applicant under account number
5*******5 within 10 days of this order.”
[11] The Municipality’s change of position surfaced only when a newly briefed
counsel appeared on 2 February 2023. It was not accompanied by a
contemporaneous affidavit from Mr Mabaso, Adv Georgiades, Mr Ngwana
or any official who participated in the negotiations. The record, however,
includes Adv Georgiades’ own account to the professional committee: the
Municipality’s officials agreed with the calculations, the Applicant was due
a credit , “the matter became settled” , and all that remained was
confirmation in court through a draft order.
The late answering affidavit and condonation
[12] The present application was served during March 2024. The Municipality
did not oppose within the prescribed period. It appeared only when the
matter was enrolled on the unopposed roll on 6 June 2024. Todd AJ
afforded it an indulgence: it had ten days from 24 July 2024 to deliver
answering papers together with a condonation application explaining their
late delivery. The order included attorney and client costs in the
Applicants’ favour.
[13] The Municipality did not comply. Its current attorneys delivered a notice of
intention to oppose on 16 August 2024, but no answering affidavit
followed. The Applicants again set the application down on the unopposed
roll. At 22:12 on the evening before the 13 November 2024 hearing, the
Municipality served its answering affidavit and a bare condonation
application. Crutchfield J removed the matter as opposed and ordered the
Municipality to pay attorney and own client costs.
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[14] The purported condonation case is materially confined to an apology, an
assertion that a new legal team had to be obtained, and a contention that
the Municipality could rely on legal argument drawn from the Applicants’
papers. It does not explain the original default, the failure to comply with
Todd AJ’s order, the further three-month delay after that order, the precise
events surrounding the change of attorneys, or what was done to obtain
evidence from the officials and practitioners who attended the settlement
meetings.
[15] The inquiry into condonation is not whether an apology is tendered. It is
whether good cause has been shown through a full, reasonable
explanation, prospects of success, bona fides, the effect of the delay and
prejudice to the administration of justice. T he explanation must enable the
court to understand how the default occurred and assess the litigant’s
conduct and motives. The Constitutional Court in Ekurhuleni Municipality v
Rohlandt Holdings CC and Others 2025 (1) SA 1 (CC) emphasised that an
organ of state bears an enhanced responsibility to manage litigation
properly.
[16] The Municipality’s explanation is plainly insufficient. It has also failed to
establish prospects of success. Its deponent is Mr Moenyane, the
Municipality’s attorney who only came on record on 16 August 2024,
nearly two years after the settlement. He had no personal knowledge of
the negotiations. He did not purport to identify a resolution, delegation,
statutory prohibition, instruction, email, minute or Municipality official
capable of refuting the Applicants’ evidence. The material denials were
accordingly hearsay and unsupported.
[17] Condonation is refused. In any event, if it were granted, the answering
affidavit would not create a genuine dispute of fact on the material
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evidence. It consists largely of legal submission and a denial by a person
with no knowledge, while the Municipality elected not to obtain
confirmatory evidence from those who did have knowledge. That election
has consequences.
The legal principles
[18] A compromise is a contract which finally resolves disputed or uncertain
rights. It generally extinguishes the compromised claims and has the
effect of res judicata, whether or not it is made an order of court. Road
Accident Fund v Taylor and Related Matters 2023 (5) SA 147 (SCA )
affirms that, once the litigants have disposed of their disputed issues by
agreement, ordinarily there is nothing left for a court to adjudicate.
[19] A court nevertheless has a well -established power to make a compromise
an order. Under Eke v Parsons 2016 (3) SA 37 (CC)
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competent and proper , it must relate directly or indirectly to a lis or issue
between the parties , its terms must be legally and practically capable of
inclusion in an order and consistent with the Constitution, law and public
policy, and it must hold a practical and legitimate advantage. The court
must exercise its discretion judicially, but must not mechanically reject a
settlement which brings litigation to a sensible end.
[20] As to authority, MEC for Economic Affairs, Environment and Tourism,
Eastern Cape v Kruizenga and Another 2010 (4) SA 122 (SCA)
recognises that an attorney’s general mandate does not ordinarily include
authority to compromise without the client’s consent. It also recognises
that authority may arise in the litigation context, and that a principal may
be estopped from denying an attorney’s apparent authority where the
1 at paragraphs 25 to 26
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principal’s own conduct created a reasonable basis for reliance. The
crucial inquiry is fact-specific.
[21] The Municipality correctly referred to Ekurhuleni Municipality v Rohlandt
Holdings CC and Others 2025 (1) SA 1 (CC). That authority does not
assist it on these facts. Rohlandt concerned a consent order requiring a
municipality to acquire immovable property. That act required prior
compliance with constitutional and statutory conditions, including a council
decision and valuation. No agent could validly bypass those prerequisites,
and estoppel could not produce an illegality. The Constitutional Court
found that the agreement did not actually resolve the main eviction dispute
and did not provide a useful or practical solution.
[22] Here the Municipality did not agree to acquire immovable property,
procure goods or services, alienate land, grant a rates exemption or
assume an extra- litigious obligation. It compromised litigation about a
municipal-services account by conceding a credit against that account, in
an amount below the judgment already standing against it and without
interest. The Municipality identifies no statutory provision which makes
such a litigation settlement invalid absent a written council resolution or
written mandate. Section 116 of the Local Government: Municipal Finance
Management Act 56 of 2003 was raised only in supplementary
submissions, not in the evidence. The Municipality ’s own supplementary
heads state that counsel saw no reason to canvass its effect. There is
accordingly neither a pleaded nor an evidential foundation for finding
statutory non-compliance or illegality.
[23] Section 116 regulates contracts procured through a municipality’s supply -
chain management policy: their written terms, implementation, monitoring
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and amendment. It does not regulate a compromise of pending litigation
concerning a municipal-services account.
[24] This settlement neither awards nor amends a supply -chain contract. Nor
did the Municipality identify any procurement contract allegedly affected,
the applicable statutory safeguard, or any missing approval.
[25] The City has therefore not established statutory non- compliance or
illegality. The settlement is a fiscally favourable resolution of pending
litigation, not an impermissible use of public funds.
Evaluation
[26] I accept the Applicants’ evidence that the agreement was concluded on 11
October 2022. It is corroborated by the sequence of communications, the
conduct of the Municipality’s then attorney and senior counsel, the agreed
enrolment to obtain a consent order, Mr Mabaso’s contemporaneous
confirmation that he was satisfied with the draft order, and Adv
Georgiades’ later unequivocal account to the ethics committee that the
Municipality’s officials agreed with the calculation and that the matter had
become settled.
[27] The Municipality’s response does not raise a real, genuine or bona fide
factual dispute. Mr Moenyane did not attend the meetings. He could not
contradict the Applicants’ attorney on what occurred there. More
significantly, the Municipality did not place any affidavit from Mr Ngwana,
Mr Mabaso, any other Municipality official who attended, or any person
who could testify that authority was absent or that a legal precondition had
not been met. A general denial based on unnamed instructions cannot
discharge that burden.
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[28] Counsel’s position at the hearing confirms that the answering affidavit
cannot bear the factual burden the Municipality seeks to place on it.
Counsel acknowledged that he had no part in the settlement, asked the
Court in substance to “ forget about answering affidavits ”, and advanced
the matter as a point of law. The Municipality had an obligation to place
the facts and circumstances of any lack of authority before it, and had not
done so.
[29] I accordingly treat the Municipality as having abandoned any sustainable
factual challenge to the Applicants’ evidence concerning the authority of
the former legal team and officials. At the least, it elected not to
substantiate that challenge. Counsel’s argument cannot convert an
evidential vacuum into a factual dispute, especially after Todd AJ
expressly required the Municipality to explain in answering papers the
grounds upon which it disputed authority.
[30] Even apart from the unrebutted direct evidence of actual authority, the
requirements for apparent authority would be met. The Municipality held
out its attorney of record, senior counsel and senior legal adviser as
representatives authorised to conduct the appeal, participate in a
settlement process expressly directed by the Full Court, negotiate the
amount, and arrange an unopposed order. The Applicants acted on those
representations, compromised a substantially larger judgment and
incurred further costs in arranging the agreed enrolment. It would be
inequitable for the Municipality now to disavow the authority which its
conduct represented.
[31] The Municipality’s reliance on the absence of a signed settlement
document also fails. A compromise is not generally subject to a writing
requirement. The evidence establishes consensus on the material terms.
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The subsequent emails set out and approved those terms in writing in any
event. The lack of a separate signed instrument cannot undo an
agreement that was concluded, repeatedly confirmed and reduced to an
agreed draft order.
[32] The three Eke requirements are satisfied: (i) the agreement directly
compromises the monetary and credit dispute which gave rise to the
action, the default judgment, the rescission proceedings and the pending
reinstatement appeal, (ii) the proposed order creates a clear obligation to
credit an identified municipal account and to pay costs. It requires no
unlawful acquisition, procurement, alienation or other act for which an
unmet statutory precondition has been shown, (iii) it resolves litigation
that has continued since 2017, reduces the Municipality’s exposure below
the judgment debt, eliminates the judgment interest, and allows the
Municipality to perform by passing a credit rather than a cash payment. It
is both enforceable and plainly beneficial to the administration of justice.
Costs
[33] The ordinary rule that costs follow the result is not adequate. The
Municipality’s conduct has been dilatory and wasteful at multiple stages:
its original failure to plead, its lapsed appeal , its failure to act promptly
after the settlement process , its appearance without papers on the
unopposed roll , its failure to comply with Todd AJ’s ten- day order , its
service of an answering affidavit late at night before the second
unopposed hearing , and the unsupported continuation of an authority
defence when the persons with knowledge were not called upon to
depose to affidavits.
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[34] Todd AJ had already stated that the Municipality should avoid legal
expenses that could and should be avoided and warned that continuing
delay might justify further punitive costs, including consideration whether
responsible officials or legal representatives should bear them. The
Municipality did not heed that warning. There is a real risk, if litigation
continues, that further such costs will be incurred. If they are, the question
will arise whether the Respondent is being properly advised by its legal
representatives, whether further costs should be awarded on a punitive
scale.
[35] The Applicants should not be out of pocket for the costs of compelling the
Municipality to honour its bargain and confronting a late, unsupported
opposition. The Municipalities litigation conduct warrants costs on the
attorney and client scale, including the costs occasioned by the
condonation application.
The following order is made:
[1] The Respondent’s application for condonation for the late filing of its
answering affidavit is dismissed.
[2] It is declared that the dispute between the Applicants and the Respondent
was settled on 11 October 2022 on the terms set out in annexure NOM1
to the notice of motion.
[3] Annexure NOM1 is made an order of court, amended only as follows:
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a. The Respondent is indebted to the Applicants in the amount of R4
966 824.79.
b. Within ten days of this order, the Respondent must credit R4 966
824.79 to account number 5[ …] , held by or for the Second
Applicant.
c. The Respondent must pay the Applicants’ party -and-party costs in
the action and appeal proceedings, as taxed or agreed.
[4] The Respondent must pay the costs of this application, including the costs
of the condonation application on the scale as between attorney and
client.
N STRATHERN
ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Appearances
For the Applicant:
Adv H van der Vyver
Instructed by:
DBM Attorneys
c/o Fourie van Pletzen Incorporated
For the Respondent:
Adv E N Sithole
Instructed by:
Madhlopa & Thenga Incorporated