City of Johannesburg Metropolitan Municipality v Kirk (14967/2017) [2018] ZAGPJHC 439 (19 June 2018)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 14967/2017

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

REVISED

In the matter between:

CITY OF JOHANNESBURG

METROPOLITAN MUNICIPALITY APPLICANT

and

WILLIAM JAMES KIRK RESPONDENT

JUDGMENT

NICHOLLS J:

[1] The respondent in this application, William James Kirk (Mr. Kirk), has sued the applicant, the City of Johannesburg Metropolitan

Municipality (the COJ), for delictual damages in the sum of R1 938 777 672 (ONE BILLION NINE HUNDRED AND THIRTY EIGHT MILLION SEVEN

HUNDRED AND SEVENTY SEVEN THOUSAND SIX HUNDRED AND SEVENTY TWO RAND). In this application, the COJ seeks an order that Mr. Kirk pay security for costs and that the main action be stayed pending the provision of such security. Initially, an amount of R500 000 (FIVE HUNDRED THOUSAND RAND) was sought as security, but at the commencement of the proceedings it was stated that the COJ would now be asking for an order that security be paid in an amount to be determined by the Taxing Master.

[2] The case arises out of an invitation to tender for the lease or purchase and development of a farm in Bedfordview, commonly known as Huddle Park, issued by the COJ in September 2004. On 12 November 2004 Mr. Kirk’s company, Associated Golf Developments (Pty) Ltd, representing the Asibambane Consortium, submitted a tender proposal. The tender was finally awarded to Islandsite Consortium on 10 February 2005. On receipt of the notice that it was unsuccessful in its bid, the Asibambane Consortium disbanded.

[3] Mr. Kirk strongly believes that his consortium should have been awarded the tender and he has launched numerous court proceedings in his quest for justice. In October 2007 Mr. Kirk instituted motion proceedings in this court seeking an order that the COJ grant him access to the original bid by Islandsite Consortium. This was provided to him on 5 February 2008. In December 2010 Mr. Kirk, representing Associated Golf Developments (Pty) Ltd, requested reasons from the COJ in terms section 5(1) of the PAJA, as to why the tender was awarded to Islandsite Consortium. It appears that this matter was abandoned once questions were raised regarding locus standi.

[4] On 17 July 2011 Mr. Kirk, through Associated Golf Developments (Pty) Ltd, launched a review application against the COJ. In response thereto in September 2011, the COJ’s attorneys filed an application for security for costs in the sum of R100 000 (ONE HUNDRED THOUSAND RAND). The application was successful but instead of paying the security, Mr. Kirk withdrew the review. The notice of withdrawal was received only on 17 April 2018. According to Mr. Kirk the reason, if I understand him correctly, for the withdrawal is that the applicant, Associated Golf Developments (Pty) Ltd, unbeknownst to him, had been de-registered. This he attributes to CIPRO’s dysfunctionality. It is not clear if another review has been launched.

[5] On 26 July 2016 Mr. Kirk issued another application against the COJ and the public protector, for the COJ to provide him with access to copies of the documents he had allegedly seen on 14 March 2013 at the office of the Public Protector. This matter was postponed sine die on 23 January 2017. The Public Protector has issued a notice to abide.

[6] The summons in the present matter was issued on 2 May 2017. The claim is for damages in the sum of R1 938 777 672 (ONE BILLION NINE HUNDRED AND THIRTY EIGHT MILLION SEVEN HUNDRED AND SEVENTY SEVEN THOUSAND SIX HUNDRED AND SEVENTY TWO RAND), including R1 457 358 (ONE MILLION FOUR HUNDRED AND FIFTY SEVEN THOUSAND THREE HUNDRED AND FIFTY EIGHT RAND) in bid costs, arising out of COJ’s failure to award the tender to the Asibambane Consortium and instead award it to the Islandsite Consortium. These damages are said to be the result of negligence or fraud on the part of the COJ.

[7] On 10 July 2017 a notice in terms of Rule 23(1) was served on Mr. Kirk’s erstwhile attorneys affording him the opportunity to remove the cause of complaint. Several grounds are set out why the averments in the particulars of claim do not sustain a cause of action and are vague and embarrassing. Simultaneously, a notice in terms of Rule 47(1) demanding security for costs to be furnished by Mr. Kirk within 10 days, was served and filed. The notice sets out the following grounds:

7.1 The plaintiff (Mr. Kirk) has instituted litigation proceedings in which he lacks a substantial interest.

7.2 The plaintiff has on three other occasions instituted legal proceedings on the same set of facts and has not pursued any of these matters to finality.

7.3 The defendant (COJ) sought for security for costs previously in the sum of R100 000. Instead of providing security the plaintiff withdrew the matter.

7.4 The defendant has a reasonable belief that it is unlikely to recover costs should they be awarded in its favour.

7.5 Any further conduct by Mr. Kirk should be considered vexatious and an abuse of court process.

[8] There was vigorous opposition to both the Rule 23(1) and the Rule 47(1) notices. For present purposes, only the response to the Rule 47(1) notice is relevant. However, it should be noted that the document entitled “Plaintiff’s Answering Affidavit to Rule 23(1) and Rule 47(1) Notices”, together with annexures, runs to just under 500 pages, Essentially Mr. Kirk says that the “slip –up” was unintentional and has been amply mitigated. The slip-up referred to, is apparently the de-registration of Associated Golf Developments (Pty) Ltd by CIPRO. This is the reason according to Mr. Kirk, that he withdrew the first application instead of paying the costs.

[9] The thread running through Mr. Kirk’s voluminous documents is the ‘NEXUS” which he describes as “a connection or series of connections: the nexus between industry and political power.” He alleges that the disposals which took place were due to the corrupt and collusive relationship between the COJ, its politicians and officials, together with those of the Johannesburg

Property Company and the Investec led consortiums. On the question of security for costs, he states:

“The plaintiff sees the Rule 47(1) notice to furnish security of costs, when all the mal-administration, criminality and abuse of the plaintiff’s rights in law, as the injustice surrounding this matter and is a direct result of wrongdoing on the part of a vexatious Defendants politicians and officials, and if anything the defendant and its officials should bear all the costs.”

[1](sic)

[10] This application for security for costs was launched on 13 November 2017. In his answering affidavit, Mr. Kirk sets out that the reason he did not pay on the previous occasion and withdrew instead was because:

“Firstly, [he] didn’t have R100 000 to furnish, and secondly, that in [his] humble opinion any access to information application should not incur costs, and if anything the defendant was being unreasonable and vexatious[2].

[11] It is apt at this stage to make observations as to how this matter has been run. Mr. Kirk, who has had legal representation at various stages of his legal battle against COJ, currently represents himself in this application. This has meant that he has handed in lengthy documents in a haphazard manner, often not related to the issue of security for costs. As with most unrepresented litigants, his understanding of court process and procedures is patchy and sporadic. This has made it very difficult to make sense of this matter. It runs into many hundreds of pages and it is often very difficult to fathom what is purportedly a pleading or annexure thereto, and what documents have been placed in the file by Mr. Kirk willy nilly.

[12] Unfortunately the attorneys of the COJ who were to file a core bundle have not done so, which has further added to the difficulties of the court. Mr. Kirk has stated unequivocally, in several of the documents before court that the legal advice received and the legal representatives who have assisted him, have been useless and incompetent. Consequently, even if he were to be offered free legal advice he would turn it down.

[13] An example of the difficulties encountered is the quantum of damages. It is not clear what amount of damages are presently being claimed. Mr. Kirk indicated in argument that he has reduced the damages claimed to R1 037 644 900 (ONE BILLION THIRTY SEVEN MILLION SIX HUNDRED AND FORTY FOUR THOUSAND AND NINE HUNDRED RAND). He referred to the “Answering Affidavit to the Notice on Application for Security for Costs in terms of Rule 47 (3) Notice” where he states:

“due to the collusive and conspiratorial aspects as set up and implemented by the Politicians and officials of the COJ and the officials of JPC, [Mr. Kirk] has decided that COJ shall only be liable for 50% of the damages sum being claimed, as [Kr Kirk’s] view is that the NEXUS and the wrongdoing was collectively planned and orchestrated.

Further, the criminality and unlawfulness as perpetrated by the NEXUS has beyond doubt been corroborated and proven, resulting in [Mr. Kirk] seeking restitution and compensation, which due to escalation of the original sum, has now risen to a total of R2 075 289 896.00 as at 15 December 2017, and thus the damages as claimed by [Mr. Kirk] has reduced to a sum of R1 037 644 900.00” (sic)[3].

[14] Mr. Kirk was afforded an opportunity to file further heads of argument which he seems to have interpreted as an invitation to place various documents into the file. After a delay, on 12 June 2018 he filed heads of argument running to 63 pages together with 234 pages of annexures. In his heads of argument he deals extensively with locus standi. This point was not argued, and in fact the COJ specifically disavowed any reliance thereon for present purposes.

[15] The COJ, although it has raised several issues, including Mr. Kirk’s lack of locus standi to bring the main action and the question of cession, is relying only on what it refers to as the nub of the case - that the action is vexatious. In support thereof two arguments are made. The first is that the claim has prescribed. The second is that the action is inherently unsustainable, and unwinnable. The submission is that the focus should be whether there are any prospects of success.

[16] The first issue is to establish the test for vexatiousness in this context, and the burden of proof the applicant has to meet. The starting point is that an incola is not generally compelled to furnish security for costs except where there is an abuse of the process of court, namely where the claim is vexatious.[4] An action is vexatious if it is obviously unsustainable, frivolous, improper, instituted without sufficient ground, to serve solely as an annoyance to the defendant. [5] That there has been an inordinate delay in proceeding with the action is another consideration to take into account.[6]

[17] Holmes JA in African Farms and Townships Ltd v Cape Town Municipality [7] held that:

“An action is obviously vexatious and an abuse of the process of court inter alia if it is obviously unsustainable. This must appear as a certainty, and not merely on a preponderance of probability. “

[18] The requirement that in order to be vexatious, the claim must be unsustainable as a matter of certainty is not applicable in all circumstances. The test as set out by the Supreme Court of Appeal in Boost Sports Africa (Pty) Ltd v SAB (Pty) Ltd[8] differentiates between an application which will have the effect of bringing the entire matter to an end and one which allows its further continuance. The court reiterated that the mere inability by an incola to satisfy a potential costs order was insufficient grounds to justify an order for security for costs. There had to be added element of vexatiousness or recklessness. The court distinguished the test set out in African Farms on the basis that African Farms concerned an application to strike out a claim which would bring the litigation to a halt. It was held that the test for vexatiousness in a security for costs application should be less stringent as the conduct would not have such far reaching consequences. In an

application for security for costs, access to courts would not be denied as in striking out a claim. Instead the continuance of the matter is contemplated with the added safeguard of security for costs.[9]

[19] This view also finds support in Fitchet v Fitchet[10] where it was held that a different onus is applicable where a claim was to be dismissed on the basis of vexatiousness. In an application for security for costs a court does not have to be convinced as a matter of certainty that the matter is incapable of succeeding but rather as a probability. The test whether an action is vexatious on the grounds that it is unsustainable can therefore be summarised as follows: the applicant does not have to establish this as a certainty; a court should not undertake a detailed investigation of the case nor attempt to resolve the dispute between the parties. This would be tantamount to pre-empting the trial court. Rather, the court in a security for costs application brought upon these grounds, should merely decide on a preponderance of probabilities whether there are any prospects of success.[11]

[20] Mr. Kirk interprets Boost Sport as support for his contention that it is irrefutable that the plaintiff who does not have the means ought not to be forced to provide security for costs. His view is that, if anything, “the vexatious applicants/defendants abuse of the court process, on spurious and unsubstantiated grounds ought to be sanctioned as they failed to provide ‘the something more’.” This is indicative of his limited legal understanding.

[21] I now briefly deal with the two issues raised by the defendant. The first is that of prescription. Summons was issued on 3 May 2017 so the question to be determined is when Mr. Kirk had knowledge of the debt and whether he was aware of the facts on which he relied in his particulars of claim, three years prior to that date, namely by 3 May 2014.

[22] In paragraph 10 of the particulars of claim Mr. Kirk refers to reading numerous newspaper articles in the week following the announcement of the bid when “it became clear that there were many irregularities and aspects of non–compliance, and clear confirmation that Islandsite hadn’t complied with the laid down and required statutory terms and conditions of the tender”. This would have been in February 2005. Another important date was 5 February 2008 when Mr. Kirk received Islandsite’s bid. COJ argued that by that time, he had all the information which formed the substructure of his claim.

[23] Attached to his answering affidavit, is an email which sets out what Mr. Kirk refers to as “a synopsis of the due processes and procedures over the past 13 years.” From this, it is apparent that on 14 March 2013 at the Public Protector’s office he was shown the bid documents which, unlike the other bid documents provided to him, was now pre-populated. In addition an environmental impact report was attached which was not attached in the original bid submission. Mr. Kirk states that because he had the original bid documents, it was obvious that someone had fraudulently completed the unsigned declaration and attached the environmental impact report. In the email Mr. Kirk then proceeds to set out what processes he attempted to put in motion to expose the fraud.

[24] Mr. Kirk’s response to the question of prescription is that it was only in April 2017, once armed with all the evidence, that he deemed it prudent to submit his claim for economic harm. In any event, so he states, there is no need to consider prescription at all as the claim is a damages claim for economic harm, not a debt. He places reliance for this submission on the well-known case of Makate v Vodacom[12]. Once again this is an incorrect interpretation of the law. In Makate it was held that a debt contemplated in section 10 of the Prescription Act was not applicable because what Makate sought was not the enforcement of a debt, but an order forcing Vodacom to commence negotiations[13]. In fact the Constitutional Court has explicitly stated that the period of prescription pertaining to delict debts in terms of the Prescription Act is three years.[14]

[25] A debt, including a delictual debt, becomes due when the creditor acquires knowledge of the facts from which the debt arose. As stated by the Supreme Court of Appeal[15] this is when the creditor acquires a complete cause of action for the recovery of the debt or when the entire set of facts upon which he relies to prove is claim is in place. It is apparent on Mr. Kirk’s own version, that at very latest, he was fully aware of the facts on which his claim was based by March 2013 when he saw the alleged fraudulent bid submission at the Public Protector’s offices. This is more than four years before he issued the summons.

[25] The next issue is whether the claim is inherently unsustainable. In order for Mr. Kirk to succeed against an organ of state in a claim for pure economic loss he has to allege and prove fraud. Mere negligence, or even dishonesty, is insufficient to cross the hurdle of wrongfulness.[16] A claim will only lie if it were established that the award of the tender was brought about by dishonest and fraudulent conduct on the part of the officials of the COJ, for which it is vicariously liable, and but for which the contract would have been awarded to Mr. Kirk.[17] The onus to prove this is on Mr Kirk.

[26] If one has regard to the particulars of claim there are 42 instances of alleged non-compliance with the tender procedures. The allegations of fraud are that Islandsite fraudulently proposed an off-site golf course on land they did not own[18]. It is doubtful whether the dishonest conduct of Islandsite can be attributed to the COJ. In addition it is alleged that the COJ

fraudulently submitted documents to the office of the Public Protector in an attempt to cover up irregularities.[19] The question will be if these acts are wrongful in the delictual sense, thus giving rise to liability. I am not entirely convinced

that the allegations fall within this category.

[27] Security can be ordered where the prospects of success are merely debatable.[20] My view is that the prospects of success are certainly problematic. I put it no higher than that and stress that this view is in no way dispositive of the merits. When this is seen in the light of the other factors such as Mr. Kirk’s admitted inability to pay any costs together with the fact that he has been litigating unsuccessfully for over 10 years on this matter, the applicant’s

case for security for costs is unanswerable.

[28] Security can be ordered where the prospects of success are merely debatable.[21] My view is that the prospects of success are certainly problematic. I stress that this view is in no way dispositive of the merits. When this is seen in the light of the other factors such as Mr. Kirk’s admitted inability to pay any costs together with the fact that he has been litigating unsuccessfully for over 10 years on this matter, the applicant’s case for security for costs is unanswerable. A factor which cannot be ignored, although not in and of itself vexatious, is Mr Kirk’s lack of legal representation. What this has done is considerably increase the volume of work for the legal representatives of the COJ who have to peruse hundreds of pages of material which is often not on point, there considerably increasing their legal costs.

[29] However, I do not want to close the door on Mr. Kirk’s claim. He passionately believes that he is on a crusade against corruption and malfeasance in government. He stated more than once that he was not doing this for the money but because he seeks justice. (This is somewhat contradictory when he is claiming payment to himself of just under R2 billion.) Nonetheless if he has spent so many years in pursuit of justice, I believe he should not be denied access to the court. Clearly to order an excessive amount for security for costs would achieve exactly this.

[30] The COJ have filed an exception to the particulars of claim. I am of the view that it would be just and equitable to both parties if Mr. Kirk were ordered to pay security for costs only for the exception. Should the exception succeed, this will be the end of the road for Mr. Kirk. If he overcomes this hurdle, then justice dictates that he proceed with his matter without an order for further security of costs. If Mr. Kirk truly believes his case has a chance of success then no doubt that he will be able to find sufficient security to cover his costs up to the exception stage. He is also strongly encouraged to procure legal representation at this juncture in order that his arguments may be coherently and succinctly put forward.

[31] As regards the costs of this application, Mr. Kirk has relied on the Biowatch principle[22] that in constitutional litigation the unsuccessful litigant should not be obliged to pay costs. The rationale for this is that private parties should not be discouraged from pursuing their constitutional rights against the state. Mr. Kirk’s claim is a delictual claim for pure economic loss, which, if successful, would entitle him to payment of over R1.6 billion. In such an instance the Biowatch principle is not applicable.

In the result I make the following order:

1. The respondent is to pay security for costs in respect of an exception launched by the applicant, in a sum to be determined by the taxing master.

2. The respondent is to pay the costs of this application

____________________________C.H.NICHOLLSJUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION, JOHANNESBURG

Appearances

Counsel for the Applicants

: Adv. RJA Moultrie

Instructing Attorneys

: Webber Wentzel

Counsel for the Respondent

: In person

Date of hearing

: 22 May 2018

Date of judgment

: 19 June 2018

[1] Para 1.31

[2] Para 43

[3] Para 23 and 24

[4] Ecker v Dean 1938 AD 102; Zietsman v Electronic Media Network Ltd 2008 (4) SA 1 (SCA), para 4

[5] Fisheries Development Corporation of SA Ltd v Jorgenson and Another 1979 (3) SA 1331 (W); Golden International Navigation SA v Zeba Maritime Co Ltd; Zeba Maritime v MV Visvliet 2008 (3) SA 10 (C) para 9

[6] International navigation (supra) para 9

[7] 1963(2) SA 555(A) at 565D-E

[8] 2015(5) SA 38 (SCA)

[9] 2015(5) SA 38 (SCA) para 18

[10] 1987 (1) SA 450 (E) at 454E

[11] Golden International Navigation (supra) at paragraph 26; Zietsman (supra) at para 21; Boost Sports (supra) at 17-19

[12] 2016 (4)SA 121 (CC)

[13] 2016 (4)SA 121 (CC) para [91] – [93]

[14] Mohlomi v Minister of Defence [1996] ZACC 20; 1997 (1) SA 124 (CC) at para [13]; Links v Department of Health, Northern Province 2016(4) SA 414 (CC) at para

[15] Truter and Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA) para [16]

[16] Steenkamp NO v Provincial Tender Board, Eastern Cape 2006 (3) SA 151 (SCA); Home Talk Developments (Pty) Ltd and Others v Ekurhuleni Metropolitan Municipality (225/2016) [2017] ZASCA 77; [2017] 3 All SA 382 (SCA); 2018 (1) SA 391 (SCA)

[17] South African Post Office v De Lacy and Another 2009 (5) SA 255 (SCA); Minister of Finance v Gore 2001 (1) SA 111 (SCA)

[18] Paragraph 13.39 of the Particulars of Claim

[19] Paragraph 13.42 of the Particulars of Claim

[20] Golden International Navigation SA v Zeba Maritime 2008 (3) SA 10 (CPD)

[21] Golden International Navigation SA v Zeba Maritime 2008 (3) SA 10 (CPD)

[22] Biowatch Trust v Registrar Genetic Resources 2009 (6) SA 232 CC