Ceza v MEC for Finance, Eastern Cape and Others (213/2007) [2017] ZAECBHC 11 (19 October 2017)

IN

THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION, BHISHO)

CASE NO: 213/2007

NOT

REPORTABLE

In the matter between

MZOLISI

LUCKMAN CEZA Applicant and MEC FOR FINANCE, EASTERN CAPE First Respondent

MINISTER

OF FINANCE Second Respondent

GOVERNMENT EMPLOYEES’ PENSION FUND Third Respondent

JUDGMENT

HARTLE J

1. The applicant seeks, by way of an interlocutory application, an order

condoning his non-compliance with the provisions of section 3 of the Intention to Institute Legal Proceedings Against Certain Organs of State Act, No. 40 of 2001 (“ILPACOSA”). The application was issued on 22 August 2016.

2. The orders that the applicant seeks, as set out in the notice of motion, are as follows:

“1. That the applicant’s/Plaintiff’s non-compliance with the provisions of section 3 of Act 40 of 2002, in the event that it be found that the applicant/plaintiff has not complied with the provisions of this legislation as to the notice contemplated in section 3 thereof by reason of the applicant/plaintiff being unable to produce proof of service of the notice contemplated in section 3 of Act 40 of 2002, be condoned.

2. That the applicant/plaintiff be granted such further and/or alternative relief as to this Honourable court seems appropriate.

3. That any of the defendants who oppose this application pay costs of

the application.”

4. From the manner in which prayer 1 has been framed, it is self-evident

that the applicant is unsure what form of notice, if any, was given, or whether he has complied with the generic provisions of section 3 of the ILPACOSA.

5. The absence of the relevant notices, or a pleaded connection to the prayers sought makes it difficult to establish what this court is expected to condone as against which respondent.[1]

6. I point out that no notices sought to be condoned were attached to

the founding affidavit, yet in argument Mr. Tshiki, who appeared for the applicant pointed me to two notices bound up in a paginated

bundle titled “miscellaneous”. His answer to the obvious prejudice to the respondents in this regard is that the existence of these notices are not in contention. Mr. Jikwana who appeared for the respondents, not surprisingly, cried foul of the appearance of these documents in this manner.

7. A further shortcoming in the application is that I had to scratch

through the court file to find a missing page to the founding affidavit. Ostensibly, on 21 November 2016 the applicant issued

out a “third interlocutory application” to seek leave to “serve a founding affidavit with page 6 that is missing from the record” and that the (respondents) if needs be, be granted leave to file a supplementary answering affidavit responding to the missing page 6”, and the applicant a reply in due course. Whether the application was heard and/or an order granted is unclear, but if the page was of critical importance, I would have expected the applicant’s attorneys to include it in the bundle comprising the present application’s papers.

8. According to Mr. Tshiki it was the remarks of Msizi AJ in chambers

that the respondents’ special plea “might carry the order of the day” that triggered these proceedings. I expect that this concern was noted concerning the second and third respondents’ plea that the applicant’s claim had become prescribed before they were joined in the main action as second and third respondent’s respectively.

9. In the main action the plaintiff claims damages from the defendants

on the basis of an alleged negligent misstatement. Initially only the Minister of Finance, Eastern Cape was cited as a defendant.

Incrementally the second defendant, the Minister of Finance, and the third respondent, the Government Employees Pension Fund were also joined. A look through the file yields the answer that the third respondent was joined pursuant to an application therefor

culminating in an order dated 24 April 2010. I could find no order in respect of the joinder of the second respondent, but the application for such relief appears to have been issued in January 2009. The original summons, as against the first respondent

only at the time, was issued on 13 April 2007.

10. The obligation on the part of the litigant who wishes to institute

legal proceedings against an organ of state in respect of the recovery of debt is set out in section 3 of the ILPACOSA as follows:

“3. Notice of intended legal proceedings to be given to organ of state.—(1) No legal proceedings for the recovery of a debt may be instituted against an organ of state unless—

(a) the creditor has given the organ of state in question notice in writing of his or her or its intention to institute the legal proceedings in question; or

(b) the organ of state in question has consented in writing to the institution of that legal proceedings—

(i) without such notice; or

(ii) upon receipt of a notice which does not comply with all the requirements set out in subsection (2).

(2) A notice must—

(a) within six months from the date on which the debt became due, be served on the organ of state in accordance with section 4 (1); and

(b) briefly set out—

(i) the facts giving rise to the debt; and

(ii) such particulars of such debt as are within the knowledge of the creditor.

(3) For purposes of subsection (2) (a)—

(a) a debt may not be regarded as being due until the creditor has knowledge of the identity of the organ of state and of the facts giving rise to the debt, but a creditor must be regarded as having acquired such knowledge as soon as he or she or it could have acquired it by exercising reasonable care, unless the organ of state wilfully prevented him or her or it from acquiring such knowledge; and

(b) a debt referred to in section 2 (2) (a), must be regarded as having become due on the fixed date.

(4)

(a) If an organ of state relies on a creditor’s failure to serve a notice in terms of subsection (2) (a), the creditor may apply to a court having jurisdiction for condonation of such failure.

(b) The court may grant an application referred to in paragraph (a) if it is satisfied that—

(i) the debt has not been extinguished by prescription;

(ii) good cause exists for the failure by the creditor; and

(iii) the organ of state was not unreasonably prejudiced by the failure.

(c) If an application is granted in terms of paragraph (b), the court may grant leave to institute the legal proceedings in question, on such conditions regarding notice to the organ of state as the court may deem appropriate.”

11. Section 4 of the ILPACOSA makes provision for service of the notice,

most notably concerning who must be addressed in this regard and the manner of service. It is unnecessary to repeat the provisions

of this section for present purposes.

12. It is clear from the statutory outline above that unless the organ of state in question consents in writing to the plaintiff’s failure to have either served it with a notice at all, or one which is deficient for want of compliance with the provisions of section 3(2) of the ILPACOSA, the plaintiff must seek the leave of the relevant court to condone its failure. It is not evident in casu, even from the pleas filed in the action, what exactly is in issue here except that the second and third respondents contend that the applicant’s claim against them became prescribed before they were joined in the action.[2]

13. In my view an application for condonation, such as contemplated by the provisions of section 3(4)(a) of the ILPACOSA is no mere formality. It is a substantive one in which the plaintiff must adduce evidence in support of the three jurisdictional grounds referred to in section 3(3) of the ILPACOSA and if he cannot do so successfully by way of application, he ought to adduce oral evidence in the trial especially upon the issue of whether the debt forming the subject matter of the notice has become prescribed. The burden is on the applicant to decide the manner in which he will do so.[3]

14. When an applicant brings such a vital application as an interlocutory

one and leaves it to the court to trawl through the file to supplement information that is missing, he unfortunately does so at

his own peril. An applicant must make out his case and fully establish the three necessary requisites in the founding affidavit.

He should also attach all necessary annexures that have a bearing on the matter before the court or at the very least refer to easily identifiable documents in the main action contained in organized, sensible bundles.

15. In casu there are two bundles comprising the interlocutory application before me, the later one styled “Revised Index to Interlocutory Application”. In neither is the missing page six and I am left wondering whether the respondents had sight of it at all in meeting the applicant’s case in its answering affidavit. It is completely fortuitous that I found it in the court file.

16. It would be presumptuous on my part to merely regard it as being

incorporated in the present application for the following reasons:

16.1 it might prejudice the respondents as indicated above. It is not clear if they pointedly responded to the averments on the missing page;

16.2 the notice of motion under which condonation was sought in that interlocutory application is not foreshadowed by an affidavit explaining the omission;

16.3 it is further not evident if that interlocutory application was pursued and an order granted. (Indeed no reference to the omitted page is dealt with in the current application before me.);

16.4 the complete affidavit sought to be condoned is unsigned; and

16.5 the contents of the missing page appear to contradict the averments on the other six pages thereof. For eg., in paragraph 14 the applicant purports to explain why no actual notice was given to the second and third respondents but in paragraph 15 (contained in the purported supplemented application), he explains instead that since the takeover of his action file by his present attorney, proof of service of the notice given by his former attorneys could not be located.

17. This brings me back to the concern raised above that it is entirely

unclear what is sought to be condoned and as against which of the respondents herein. This is complicated by the fact that

notices supposedly issued by the former attorney have suddenly appeared in the court file, included in a miscellaneous bundle.

Their presence there is entirely unexplained. It is not enough for the applicant to assert that they are not contentious. The respondents rightfully in my view object to their inclusion by mere incorporation into the present pleadings. The launch of the application also appears to me to have been premature before it was established what exactly is in contention. It was prudent for the parties to first discuss and agree what the real issues are concerning the applicant’s alleged non-compliance with the provisions of the ILPACOSA.

18. The application is not properly before me and in my view should be

struck from the roll with costs.

19. In the light of the aforegoing I do not intend to address the merits

of the application as it may well redound to the detriment of the applicant, who it appears is innocent of this botch-up.

20. It may serve the interests of the parties to hold a further conference to sort out what is still in contention in respect of the special pleas and to agree a way forward, short of the applicant launching a fresh application for condonation. I intend to issue a case management directive in this regard as set out below.

21. In the result I issue the following order:

1. The applicant’s interlocutory application for condonation is struck from the roll, with costs.

2. The parties are directed to hold a conference amongst themselves in order to reach agreement / or to record their position regarding the following:

2.1 which letter of demand is referred to in paragraph 15 of the original

particulars of claim issued against the first defendant as Annexure L.M.”A”, purportedly in compliance with the plaintiff’s

obligation to give notice in terms of the provisions of section 3(2)(a) of the ILPACOSA?

2.2 which of the two pleas by the first defendant is the correct one, the one dated 15 August or 27 October 2008? (It is unclear if the last plea was formally substituted for the first);

2.3 once the plaintiff has identified the annexure, what is the first

defendant’s stance regarding the plaintiff’s purported compliance with the provisions of sections 3(2)(a) and (b) of the ILPACOSA;

2.4 if an issue still arises in this respect, what is the specific failure on which the first defendant relies to contend non-compliance with the provisions of the ILPACOSA?

2.5 concerning the second defendant, is it the plaintiff’s contention that statutory notice was indeed given to it?

2.6 if so, the plaintiff must put up a copy of the notice which he says

he gave prior notice to the joinder of the second defendant;

2.7 having regard to that notice (if one exists), what specific failure,

if any does the second defendant rely on to contend non-compliance with the provisions of sections 3 and/or 4 of the ILPACOSA as pleaded by him;

2.8 similarly concerning the third defendant, is it the plaintiff’s

contention that statutory notice was indeed given to it?

2.9 if so, the plaintiff must put up a copy of the notice which he says

was given before the joinder of the third defendant;

2.10 having regard to that notice, assuming its existence, what

specific failure, if any does the third defendant rely on to assert that the plaintiff has not complied with the provisions of the ILPACOSA;

2.11 the plaintiff must identify the order whereby the second defendant

was joined in the action;

2.12 do the second and third defendant’s accept the onus, in respect

of the issue of prescription which they raise to prove both the date of inception of the prescription period and the date of its

completion?

2.13 do the second and third defendants’ wish to file a rejoinder to the plaintiff’s replication to their special plea?

2.14 inasmuch as it may have a bearing on the issues between the parties

concerning notice given under the ILPACOSA, they should clarify what is meant in I, K(c), (f) and (g) and L of their minute flowing from the pre-conference held on 10 June 2011; and

2.15 similarly, inasmuch as what the parties discussed and agreed at their pre-trial conference held on 23 September 2013 may have a bearing on the same issues, the defendants’ attorneys must append their signature to the minute filed of record to confirm its correctness.

3. The recordal arising from a discussion of the issues above must be documented in a formal minute which is to be filed with the registrar by no later than 17 November 2017.

4. The registrar is requested to enroll the matter for a pretrial conference on 24 November 2017 before a case management judge in order for the issue of further directives regarding the future conduct of the litigation

B

HARTLE

JUDGE

OF THE HIGH COURT

DATE OF HEARING: 7 September 2017

DATE OF JUDGMENT: 19 October 2017

Appearances: For the applicant : Mr. Tshiki of Tshiki & Son, East London (ref. Mr. Tshiki). For the respondents : Mr. T Jikwana Instructed by The State Attorney, East London (ref. Mr. Mgujulwa).

[1] All three respondents opposed the application, much to Mr. Tshiki’s surprise, since only the second respondent, according to him raised a special plea in this regard. Mr. Jikwana, who appeared for the respondents, noted that all three respondents were opposing the relief sought, the first and third respondents contending that notices received lack compliance with the relevant provisions of the ILPACOSA, and the second respondent that he had not received any notice at all.

[2] Given the absolute uncertainly which prevails in this matter, the parties should have identified at a conference, what exactly is in issue and how these aspects were to be taken further in the litigation.

[3] See MEC for the Department of Health, Eastern Cape v B C Ndaliso (Case No. CA96/2015) ECHCG, dated 25 February 2016, in which

Pickering J held that where it was in contention when the debt became due, this fact had to be established (upon trial) as a

jurisdictional fact before it could be said that an application for condonation was required. “Section 3(4)(a) clearly

presupposes an actual, as opposed to alleged, failure on the part of the creditor to have complied with the provisions of section

3(2)(a)”. It may therefore be apposite for the second and third respondents’ special pleas and the applicant’s

replication thereto to be determined separately (and perhaps with the merits of the case to avoid an unnecessary duplication of trials), before an application for condonation can be said to be absolutely necessary. This is especially so when the

resolution of the special pleas might be dispositive of the applicant’s action against the second and third respondents.