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[2011] ZACC 5
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Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hydro-Tech Systems (Pty) Ltd and Another (CCT 34/10) [2011] ZACC 5; 2011 (6) BCLR 646 (CC) (10 March 2011)
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 34/10
[2011] ZACC 5
In the matter between:
VIKING PONY AFRICA PUMPS (PTY) LTD
t/a TRICOM AFRICA
….......................................................................................
Applicant
and
HIDRO-TECH SYSTEMS (PTY) LTD
…................................................
First
Respondent
CITY OF CAPE TOWN
…...................................................................
Second
Respondent
Decided on : 10 March 2011
JUDGMENT
MOGOENG J:
Introduction
In the main judgment,
1
which was handed down on 23 November 2010, a provisional order for
costs was made in the following terms:
“
4. The
City of Cape Town is ordered to pay the costs of Hidro-Tech Systems
(Pty) Ltd and Viking Pony Africa Pumps (Pty) Ltd t/a
Tricom Africa in
this Court, including the costs of two counsel.
5. The order in sub-paragraph 4
is provisional.
6. The parties and the City of
Cape Town are invited to make representations within 10 days of the
date of delivery of this judgment
on whether the provisional order
should be made final.”
2
Representations
have since been made. They are essentially as set out below.
Representations
Viking
Pony Africa Pumps (Pty) Ltd t/a Tricom Africa (applicant) submits
that its costs should be borne by its business rival,
Hidro-Tech
Systems (Pty) Ltd (first respondent), if the City of Cape Town
(City) is otherwise not ordered to do so. It contends
that it would
not have been necessary for the applicant to approach this Court had
the first respondent chosen to abide the decision
of the Supreme
Court of Appeal, which ordered that the City should investigate
allegations of fronting against the applicant.
The applicant submits
that since it supported an order for an investigation, which was
ordered by this Court, in both the Supreme
Court of Appeal and in
this Court, it should not be burdened with costs.
According
to the applicant, the first respondent insisted on the imposition of
punitive measures on the applicant since it contended
that no
further investigation need be conducted. The first respondent has
failed in its attempt to secure that outcome in this
Court. The
applicant further submits that although this Court did not set aside
the order for costs made by the Supreme Court
of Appeal, it in
effect set aside the order of the Supreme Court of Appeal, thus
upholding the appeal. For these reasons the
applicant contends that
the first respondent, being the unsuccessful party, should be
ordered to pay its costs.
The
first respondent supports the confirmation of the provisional order
for costs. It contends that, in the event of this Court
discharging
the provisional order, it would not be opposed to an order that each
party pays its own costs.
The
City advanced several reasons why the provisional order, which could
impose an obligation on it to pay the parties’
costs, should
not be made final. They follow below:
(i) The City chose not to challenge the decision of the Western Cape
High Court, Cape Town (High Court) which enjoined it to act
against
the applicant in terms of regulation 15(2). Instead it decided to
implement the decision forthwith.
(ii) To this end, the City reported the matter to the police and it
has been informed that the prosecuting authority is currently
drafting charges in this connection.
(iii) The City has also drafted a policy to address future
allegations of fronting.
(iv) The City decided not to get involved in the appeal in the
Supreme Court of Appeal and this Court because it accepted the
finding of the High Court and did not seek to have it set aside.
(v) An order for costs has already been made against the City by the
High Court. Since the City has already complied with that
order, it
should not be held liable for costs of the litigation that it chose
not to be a part of.
(vi) The participation of the City in this Court would have been a
fruitless exercise since it had already accepted and implemented
the
findings of the High Court and the Supreme Court of Appeal. It had no
submissions to make to this Court since it did not wish
to have those
findings set aside.
I turn to
address the question whether the City has sufficiently explained its
non-participation in the proceedings before the Supreme
Court of
Appeal and this Court to justify the non-confirmation of the
provisional order.
Should
the provisional order be made final?
When
we made the provisional order, we did not have the benefit of the
City’s submissions concerning its reasons for not
participating in the case. In my view it was not unreasonable for
the City not to participate in the proceedings before the Supreme
Court of Appeal and this Court since it had decided to investigate
the matter. It cannot be said to be illegitimate for the City
to
decide not to burden the public purse by participating in a dispute
in which it had no real interest. In my view the new information
is
sufficient for us to change the provisional order to the extent that
the City should not be ordered to pay the applicant’s
costs.
In the circumstances, bearing in mind the result of the case and the
City’s explanation, I do not think that the
City should be
ordered to pay the applicant’s costs.
The
position of the first respondent is however different. It would not
have been necessary for the first respondent to bring
the
application before the High Court if the City had complied with its
obligation to investigate. It is precisely because of
the City’s
lack of compliance with its obligations that the first respondent
had to approach the High Court. Once the High
Court had been
approached, the circumstances indicate that the proceedings in the
Supreme Court of Appeal and in this Court would
probably have
followed. Accordingly, the first respondent incurred all its costs
as a result of the City’s failure to investigate.
It is in the
interests of justice that the City be ordered to pay the first
respondent’s costs. The fact that they did
not participate in
the proceedings in the Supreme Court of Appeal and in this Court
does not detract from this.
In
these circumstances the provisional order for costs should not be
confirmed. A just costs order is to replace that order with
an order
that the City pay the costs of the first respondent.
Order
In
the result, the following order is made:
(a) The provisional order of this Court dated 23 November 2010 is set
aside and replaced with the following order:
“
(i) The City of Cape Town is ordered to pay
the costs of Hidro-Tech Systems (Pty) Ltd in this Court.
(ii) There is otherwise no order as to costs.”
Ngcobo CJ,
Moseneke DCJ, Brand AJ, Cameron J, Froneman J, Khampepe J,
Nkabinde J, Skweyiya J, and Yacoob J concur in the judgment
of
Mogoeng J.
For the
Applicant: Advocate AM Smalberger instructed by Rabie & Rabie
Attorneys.
For the
First Respondent: Advocate DC Joubert instructed by Jacques Viljoen
Attorneys.
For
the Second Respondent: Advocate GM Budlender SC and Advocate M
Bridgman instructed by Cliffe Dekker Hofmeyr Inc.
1
Viking
Pony Africa Pumps (Pty) Ltd v Hidro-Tech Systems (Pty) Ltd and
Another
[2010] ZACC 21
;
2011 (2) BCLR
207
(CC);
2011 (1) SA 327
(CC).
2
Id
at para 59.