Mawonga v Walter Sisulu Local Municipality and Another (CA58/2019) [2019] ZAECGHC 60; [2019] 8 BLLR 852 (ECG) (21 May 2019)

IN

THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION:

GRAHAMSTOWN

CASE NO. CA 58/2019

In the matter between:

THEMBINKOSI

MAWONGA

Appellant

and

WALTER

SISULU LOCAL

MUNICIPALITY

1st Respondent

THE MEC FOR CO-OPERATIVE

GOVERNANCE & TRADITIONAL

AFFAIRS N.O.

2nd Respondent

FULL

COURT APPEAL JUDGMENT

GRIFFITHS, J.

[1] This is an urgent appeal pursuant to the provisions of section 18(4) of the Superior Courts Act[1]. The subject of the appeal is an order granted by Renqe AJ in terms of section 18(1) of the Act to the effect that an order granted by Lowe J on 8 November 2018, which set aside the appellant’s appointment as municipal manager[2], was not to be suspended pending the outcome of the appellant’s proposed appeal to the Supreme Court of Appeal.

[2] At the outset of the matter the appellant applied for condonation for the late filing of his heads of argument, these only having been filed one court day before the hearing. Because of the urgency of the matter, the lack of opposition thereto and the reasons set forth in the application, such condonation was granted and the appeal was duly

heard.

[3] The facts leading up to the granting of the section 18(1) order may be shortly stated. The appellant was the incumbent municipal manager of the first respondent for a period spanning some ten years commencing on 1 August 2007. His initial five year contract was renewed for a further five year period from 1 August 2012 and again on 20 July 2017. Later that year it was pointed out to the first respondent by the second respondent that this appointment did not comply with section 54A of the Municipal Systems Act[3] (“MSA”) as read with various regulations relating thereto. Consequently, and by way of a resolution dated 8 January

2018, the first respondent’s council rescinded the extension of the appellant’s contract as effected on 20 July 2017. This spawned an application by the appellant for a review and the setting aside of the first respondent’s council’s decision of 8 January 2018 and a counter application by the second respondent for the review and setting aside of its own decision taken on 20 July 2017.

[4] The application served before Lowe J who, in a fully reasoned judgment, determined that the rescission resolution of 8 January 2018 was procedurally flawed and fell to be set aside. He also held that the extension of the appellant’s contract as effected on 20 July 2017 fell foul of section 54A of the MSA and thus, in turn, also fell to be set aside. With regard to the question of costs, he made no order with regard to the main application but ordered the appellant to pay the second respondent’s costs in the counter application.

[5] The appellant thereafter sought leave to appeal the order made by Lowe J which he refused. Subsequent to this the appellant petitioned the Supreme Court of Appeal for leave to appeal, which petition is currently pending[4].

[6] The application in terms of section 18(1) of the Superior Courts Act was thereafter launched as a matter of urgency by the first respondent. In it, inter alia, the first respondent pointed out that there had been an inordinate delay in the launching of the application before Lowe J due to the fact that the appellant had initially approached the Labour Court and that, as a consequence of the order made by Lowe J, a new municipal manager had been appointed.

[7] The application for execution of Lowe J’s order was opposed. Inter alia, the appellant maintained that he would suffer irreparable harm were the order suspending his appointment to be put into effect because he had not received a salary for more than a year and was, in consequence, financially strained.

[8] In her judgment Renqe AJ did not consider the question of prospects of success but found, after considering the requirements for an application of this nature, that exceptional circumstances as required in section 18(1) existed, in particular because “if the court order of the Honourable Mr. Justice Lowe is implemented the Applicant (referring to the first respondent on appeal) will find itself having two Municipal Managers, performing the same functions and having the same powers. Clearly this will be disruptive

and hamper service delivery. A situation which, in my view, cannot be allowed.” She found, furthermore, that should the order made by Lowe J not be suspended, the appellant would only suffer loss of earnings which, were he to succeed on appeal, could be recovered and that the quantum thereof is easily computable.

[9] Section 18 of the Superior Courts Act reads as follows:

“18 Suspension of decision pending appeal

(1) Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.

(2) Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal.

(3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders.

(4) If a court orders otherwise, as contemplated in subsection (1)-

(i) the court must immediately record its reasons for doing so;

(ii) the aggrieved party has an automatic right of appeal to the next highest court;

(iii) the court hearing such an appeal must deal with it as a matter of extreme urgency; and

(iv) such order will be automatically suspended, pending the outcome of such appeal.

(5) For the purposes of subsections (1) and (2), a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.”

[10] The test to be applied by a court in deciding whether or not to suspend a court order by virtue of the provisions of section 18(1) (and the obverse situation arising from section 18(2)) has been the subject of a fair amount of judicial scrutiny. In particular, there have been conflicting decisions with regard to whether or not the court ought to take into account the question of prospects of success on appeal. The latter question, and the test itself, has been settled by the Supreme Court of Appeal in the matter of University of The Free State v Afriforum[5]. In that matter the appeal court found that the Legislature has proceeded from the established premise of the common law that the

granting of relief of this nature constitutes an extraordinary deviation from the norm that, pending an appeal, a judgment and its attendant orders are suspended. The exceptionality of such an order is also underscored by the requirements of section 18(4) which provides for, inter alia, an automatic right of appeal on an urgent basis. The appeal court also found that the requirements introduced by section 18(1) and (3) are more onerous than the common law requirements which existed previously and that section 18(3) has introduced “a higher threshold, namely proof on a balance of probabilities that the applicant will suffer irreparable harm if the order is not granted, and conversely that the respondent will not if the order is granted.”[6]

[11] Finally, the court found that prospects of success in the pending appeal ought to play a role in the consideration as to whether or not to grant such an order. In doing so, the appeal court confirmed a dictum by Binns-Ward J in the case of Minister of Social Development Western Cape and Others v Justice Alliance of South Africa and Another[7] as follows:

“The less sanguine a court seized of an application in terms of s 18(3) is about the prospects of the judgment at first instance being upheld on appeal, the less inclined it will be to grant the exceptional remedy of execution of that judgment pending the appeal. The same quite obviously applies in respect of a court dealing with an appeal against an order granted in terms of s 18(3).”

[12] In this appeal it has been argued before us on behalf of the appellant that the court a quo was wrong in taking into account the fact that there is, at present, a new incumbent municipal manager. This is so, so the argument went, because the first respondent was, effectively, the author of its own downfall. It was submitted that the first respondent ought, pending the outcome of the appeal, to have appointed an acting municipal manager which would have obviated the situation that has now arisen, that being that a successful appeal will result in two municipal managers holding the same post. Alternatively, it was submitted that the first respondent ought to have seconded a municipal manager from elsewhere.

[13] The problem I have with these arguments is that section 54(A) (2A) (a) of the MSA provides that an acting municipal manager may not be appointed for a period exceeding three months. Subparagraph (b) gives the MEC for Local Government the power to extend such appointment “in special circumstances and on good cause shown” for a further period not exceeding three months. Thus it is apparent that, at most, the first respondent would have been in a position to have appointed an acting manager for a period of six months, and that presupposes that the MEC would have found “special circumstances” to have existed and that the first respondent could have shown “good cause”. Furthermore, the continued use of an acting municipal manager comes with its own, obvious, attendant problems. He or she may well be hamstrung in his or her duties due to the short tenure of the appointment amongst a plethora of other potential problems as stressed by Renqe AJ. It is self-evident that for a municipality to continue to provide essential and other services to the community to whom it owes its existence, it ought to have a permanent municipal manager at the helm. In the circumstances, I do not believe that the first respondent can be faulted for having proceeded to appoint a permanent incumbent to the post, particularly in view of the fact that Lowe J had refused leave to appeal.

[14] As against this, there is the question of irreparable harm to the appellant resulting from the suspension of Lowe J’s order. Renqe AJ duly considered this and, in effect, found that the harm which the appellant is likely to suffer (namely, financial difficulties due to lack of a salary) is by no means irreparable in that, should he be reinstated on appeal, he will be entitled to back pay and the restoration of his salary and other benefits. Furthermore, if he was under such severe financial pressure one would have expected him, as he was perfectly entitled to do, to have applied for the subsequently advertised post of municipal manager. It was conceded in court that at no stage has the first respondent cast any aspersion on his ability or otherwise as municipal manager. This is, indeed, borne out by the fact that the first respondent retained him in this position by way of an extension of his initial five year contract over a period of some ten years. One would have thought that, in the circumstances, he would have stood a considerable chance of securing the position once again had he indeed applied. The counter argument has been that, had he done so, he would have effectively conceded that he had no prospects of success on appeal.

In my view this argument is spurious. Had he successfully applied for the post any such argument would have fallen away, save for the question of costs. Had he been unsuccessful in his application I sincerely doubt that the appeal court would have viewed any potential appeal in any manner other than on its merits. In any event, had he been at all concerned in this regard, he could have recorded, through his attorneys, that his application for the new post was to be without any prejudice to his pending appeal. Furthermore, nowhere in his affidavit did he mention that he had considered an application for the post or, indeed, that he had considered the pros and cons thereof.

[15] With regard to the question of prospects of success on appeal, I am loath to enter into this debate in view of the fact that the application for leave to appeal is still pending[8]. However, I mention that in my view, having studied the judgment of Lowe J and the subsequent judgment on leave to appeal, there may well be some prospect of the appeal court granting leave. I say this on the basis that the reasoning set forth in the judgment of Lowe J is based largely on an interpretation of the relevant sections of the MSA, and its regulations.

[16] Furthermore, his decision has an impact on the rights of municipal managers and municipalities nationally and consequently may well deserve the attention of the SCA. Despite this, I am satisfied that Renqe AJ came to the correct conclusion that exceptional circumstances in this matter do indeed exist and that the irreparable harm likely to be suffered by the first respondent should the order not be suspended far outweighs the potential harm (which is unlikely to be irreparable) to the appellant should it be suspended.

[17] As has been mentioned leave to appeal to it has since been granted by the SCA. In my view this can have no bearing on the conclusions I have come to as this result has been anticipated.

[18] In the circumstances the following order will issue:

The appeal is dismissed with costs.

R. E. GRIFFITHS

JUDGE

OF THE HIGH COURT

SMITH, J.

: I agree

STRETCH, J.

: I agree

COUNSEL

FOR APPELLANT : Mr Cole

INSTRUCTED BY

: Nettleton Attorneys

COUNSEL

FOR RESPONDENTS : Mr Beyleveld SC

INSTRUCTED BY

: Wheeldon Rushmere & Cole

HEARD ON

: 23 APRIL 2019

DELIVERED ON

: 21 MAY 2019

[1] No 10 of 2013

[2] Together with an interdict restraining the appellant from entering the first respondent’s premises or in any manner purporting to exercise the functions of Municipal Manager until the appeal is finalized.

[3] No 32 of 2000

[4] Subsequent to the drafting of this judgment, leave to appeal was indeed granted by the SCA.

[5] 2018 (3) SA 428 (SCA) paragraphs 9 – 15

[6] UFS v Afriforum (supra) at paragraphs 9 – 10

[7] [2016] ZAWCHC 34

[8] See footnote 4