Masakhane Media (Pty) Ltd v City of Mbombela Local Municipality and Others (1101/2022) [2023] ZAMPMBHC 19 (27 March 2023)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(MPUMALANGA DIVISION, MBOMBELA)

CASE NO: 1101/2022

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: YES

SIGNATURE:

DATE:27/03/2023

In the matter between:

MASAKHANE MEDIA (PTY) LTD

Applicant

and

THE CITY OF MBOMBELA LOCAL MUNICIPALITY

1st Respondent

THE EXECUTIVE MAYOR OF CITY OF MBOMBELA

2nd Respondent

THE MUNICIPAL MANAGER OF CITY OF MBOMBELA

3rd Respondent

THE MINISTER OF FINANCE

4th Respondent

THE DIRECTOR GENERAL OF THE NATIONAL TREASURY 5th Respondent

THE MEC OF FINANCE, MPUMALANGA PROVINCE

6th Respondent

THE HEAD OF THE MPUMALANGA PROVINCIAL TREASURY 7th Respondent

SOTOBE MEDIA (PTY) LTD

8th Respondent

AKROSSCOM IT COMMUNICATIOON (PTY) LTD

9th Respondent

BLUE LABEL ONE (PTY) LTD

10th Respondent

J U D G M E N T

GUMEDE AJ

1. This is an application to compel the City of Mbombela Municipality, the Executive Mayor as well as the Municipal Manager, herein after referred to as (“Municipal Respondents”), to table a report of allegations of financial misconduct, in a form of letters which were written by the Applicant’s attorneys,

before the Municipal Council, in terms of regulation 3(2) of the Municipal Regulations on Financial Misconduct Procedures and Criminal

Proceedings of 2014 (“Financial Misconduct Regulations”).

2. In the alternative, Applicant seeks an order in terms of regulation 5(1) of the Financial Misconduct Regulations, directing the Municipal Respondents, if they are satisfied that there is a reasonable cause to believe that an act of financial misconduct has occurred, to refer the reports to the Disciplinary Board of the Municipality for the Board to conduct a preliminary investigation into the allegations of financial misconduct, envisaged in section 17(1)(4)(a) of the Local Government Municipal Finance Management Act (“MFMA”).

3. Applicant further seeks that the Municipal Respondents be directed to report back to it, the outcome of such tabling or investigation, as the case may be, within five days of the meeting of the Municipal Council or recommendation of the Disciplinary Board.

4. In the event that Municipal Respondents fail to comply with the above, Applicant seeks leave to supplement its papers and seek relief

against the fourth to seventh respondents in terms of regulation 19 of the Financial Misconduct Regulations.

5. The Municipal Respondents oppose the application on the basis that the application is a mandamus and the Applicant has failed to comply with the requirements for the granting of a mandamus, in that the Applicant failed to show the absence of similar protection by another ordinary remedy. This defence was raised as a preliminary point of law. The Municipal Respondents did not address the merits of the application.

6. In its replying affidavit, the Applicant contends that the notice to oppose was delivered only in respect of the first and third

respondents. In this regard, the Municipal Respondents submitted during the hearing of this matter that it was an oversight

to omit the second respondent when the notice to oppose was prepared. Regard being had to the content of the answering affidavit, which specifically include the second respondent, I am satisfied that all three Municipal Respondents have delivered their opposition to this application.

7. Only the Municipal Respondents opposed the application.

BACKGROUND

8. The Applicant and the Municipality concluded a contract in terms of which, the Applicant, on behalf of the Municipality, supplied street pole advertising to clients who purchased advertising space.

9. In June 2020, the Municipality awarded a similar contract to a Joint Venture and in January 2021, the Municipality brought an application

to court, seeking a declarator that the Applicant’s contract had terminated by effluxion of time. This application is said to be pending.

10. In November 2021, Applicant through its attorneys, reported allegations of financial misconduct to the Municipal Respondents, which was based on the following grounds:

a. The contract which was awarded to the Joint Venture far exceeds the Bid that was advertised by the Municipality. The Joint Venture was awarded additional advertising sites without giving other bidders an opportunity to tender for such sites.

b. In terms of the contract with the Joint Venture, the latter assumed total control over all municipal outdoor infrastructure for

advertising purposes for a fixed monthly payment of R105 000, whereas, the Applicant had been paying the Municipality on average

R138 000 per month for the advertising on the street poles only, excluding the additional sites that have been awarded to the Joint Venture. This according to the Applicant, does not constitute optimal use of the municipal resources and is in breach of the MFMA.

c. Applicant also alleges that the Municipality, unlawfully delegated its responsibilities to the Joint Venture in respect of outdoor

advertising.

d. Applicant alleges further that in awarding the bid to the Joint Venture, the Municipality breached its Supply Chain Management Policy.

e. The Applicant also questions the validity of the minutes of the Bid Evaluation Committee (“BAC”) which recommended the award of the bid to the Joint Venture. Applicant alleges that the dates on the minutes of the BAC are inconsistent, which raises a suspicion in relation to the award which is already questionable as aforementioned.

APPLICABLE LEGAL PRINCIPLES

11. In terms regulation 3(2) of the Municipal Regulation on Financial Misconduct Procedures and Criminal Proceedings of 2014 (“Financial Misconduct Regulations”), the Mayor or the Municipal Manager must table an allegation of financial misconduct before the Municipal Council no later than seven days of receipt thereof or at the next sitting of the Council.

12. Regulation 5(1) of the Financial Misconduct Regulations requires that if the Municipal Council is satisfied that there is reasonable cause to believe that an act of financial misconduct has been committed, it must within seven days of receipt of report containing allegations of financial misconduct, refer the matter to the disciplinary board to conduct preliminary investigation.

13. Applicant through its attorneys, reported allegations of financial misconduct to the Municipal Respondents who have failed to table such allegations to the Municipal Council as required by regulation 3(2) of the Financial Misconduct Regulations.

ISSUES FOR DETERMINATION

14. Applicant seeks a mandamus, to compel the tabling of its report on financial misconduct before the Municipal Council. The Municipal Respondents do not dispute the fact that the Applicant has a clear right, nor do they dispute that the Applicant has suffered an injury. They oppose the application on the basis that Applicant has failed to satisfy the third requirement for the granting of a mandamus, namely that the Applicant has an alternative remedy.

15. This court is required to determine whether such an alternative remedy exists.

16. In its founding affidavit, the applicant states that this application is aimed at compelling the Municipal Respondents to act appropriately in terms of their statutory obligations. This allegation is repeated in the replying affidavit.

17. The Municipal Respondents argue that the failure by the Municipality to table a report of financial misconduct to the Municipal Council, is a decision in terms of Promotion of Administrative Justice Act (“PAJA”), as such, so goes the argument, the Applicant has an alternative remedy in that it may bring an application for judicial review in terms of section 6 of PAJA, to set aside the refusal by the Municipality to table the allegations of misconduct before the Municipal Council. I disagree.

18. Regulation 3(2) of the Financial Misconduct Regulations enjoins the Mayor or the Municipal Manager to table the allegations before the council. The Mayor and/or the Municipal Manager are not given an option to decide whether or not to table the allegations but rather are compelled by the regulation to table such allegations.

19. Regulation 3(2) of Financial Misconduct Regulations reads:

“The mayor, the accounting officer or the chairperson of the board of directors, as the case may be, must table an allegation referred to in sub regulation (1) before the Municipal Council, …, not later than seven days after receipt

thereof or at the next sitting of the council or board of directors.”

20. In my view, the provisions of regulation 3(2) are peremptory in nature. There is no decision to make on the part of the Mayor and/or the Municipal Manager in respect of tabling the allegations to the council, they are simply obliged by the regulations, to table such allegations.

21. Failure to table the allegations before council is therefore not a decision to be reviewed in terms of section 6 of PAJA. This is a statutory obligation imposed by the aforesaid regulations.

22. Counsel for the Municipal Respondents, argued that the use of the word failure by the Applicant in its the founding suggest that the Applicant itself accepts that this is an administrative decision. I fail to see how that can be so, in the light of the express statement by the Applicant that this application is aimed at compelling the Municipal Respondents to act appropriately in terms of their statutory obligations.

23. In Nedbank Limited v Mendelow NO[1], the Supreme Court of Appeal confirmed that where a functionary has no decision-making function but performs acts that are purely clerical and which it is required to do in terms of a statute that so empowers it, such functionary is not performing administrative acts within the definition of the PAJA or even under the common law. The SCA concluded that purely clerical acts do not amount to administrative action reviewable under PAJA.

24. Similarly in this case, PAJA is not implicated. The alternative remedy which was suggested by the Municipal Respondents does not find application in this case.

25. The point in limine which was raised by the Municipal Respondents therefore has to fail and without opposition to the application on the merits, the

Applicant’s application must succeed.

26. The Applicant seeks costs, including costs of two counsel. I am not persuaded that this case justified the employment of two counsel.

27. In the result, I make the following order:

1. The point in limine which was raised by the First, Second and Third Respondents is hereby dismissed.

2. The First, Second and Third Respondents are directed to table the letters written by the Applicant’s attorneys, Sim and Buzo Attorneys Inc, reporting the allegations of financial misconduct, dated 2 November 2021 and 15 November 2021 before the Municipal Council as required by regulation 3(2) of the Municipal Regulation on Financial Misconduct Procedures and Criminal Proceedings of 2014, by no later than seven days of the granting of this order or at the next sitting of the Municipal Council after the granting of this order, whichever is the earlier.

3. The First, Second and Third Respondents are directed to inform the Applicant of their compliance with paragraph 2 above and the outcome of such tabling within five days of the meeting of the Municipal Council.

4. Should the First, Second and Third Respondents fail to comply with paragraphs 2 or 3 above, the Applicant is granted leave to seek

relief against the Fourth to Seventh Respondents in terms of regulation 19 of the Municipal Regulation on Financial Misconduct

Procedures and Criminal Proceedings of 2014, on the same papers duly supplemented or amplified.

5. The First, Second and Third Respondents are ordered to pay costs of this application, jointly and severally.

ZE GUMEDE

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA

This judgment was handed down electronically by circulation to the parties and/or parties’ representatives by email. The date and time for hand-down is deemed to be 27 March 2023 at 10:00.

APPEARANCES

For the applicant: MJ Engelbrecht SC with A Pantazis Instructed by: Sim Buzo Attorneys Inc For the Respondent : V Mabuza Instructed by: QQ Mkhatshwa Inc, Mbombela Date of hearing: 27 October 2022 Date of judgment: 27 March 2023

[1] (686/12) [2013] ZASCA 98, paragraphs 24 and 25