Special Investigation Unit v Johannesburg Social Housing Company and Others (GP14/2021) [2021] ZAST 5 (2 September 2021)

IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2 (1) OF THE SPECIAL INVESTIGATIONS UNIT AND

SPECIAL TRIBUNALS ACT 74 OF 1996

(REPUBLIC OF SOUTH AFRICA)

CASE NUMBER: GP14/2021

In the matter between:

SPECIAL INVESTIGATING UNIT

APPLICANT

And

JOHANNESBURG SOCIAL HOUSING COMPANY

First Respondent

CITY OF JOHANNESBURG METROPOLITAN

Second Respondent

MUNICIPALITY

PRO-PROVIDER GROUP

Third Respondent

REMBU CONSTRUCTION

Fourth Respondent

SKS BUSINESS SOLUTION

Fifth Respondent

JUDGMENT ON THE COSTS OF OPPOSING PART A OF THE REVIEW APPLICATION

MODIBA J:

[1] The issue that has arisen for determination is whether, Pro-Provider Group, Rembu Construction and SKS Business Solutions (the respondent entities) are entitled to the costs of opposing Part A of the application on the attorney and client scale. The respondent entities seek such an order. They rely on Tribunal Rule 21 (1). The Special Investigating Unit (SIU), contends that the respondent entities are not entitled to the order.

[2] The dispute was ignited by a notice the SIU filed on 23 June 2021, withdrawing an application for the urgent interim relief it sought under Part A.

[3] There is no reason to consider the respondent entities’ respective cases on costs as approached by the SIU in its heads of argument. The SIU brought one application against all the respondent entities. Although they raise different reasons for seeking costs on the attorney and client scale, they rely on no factors that distinctly apply to each respective respondent entity. Consequently, the factors relied on by each respondent entity, to the extent such factors sustain the order sought, apply equally to all of them. For that reason, less emphasis is placed on each respondent entities’ case as argued. Their contentions are considered in the main.

[4] The SIU launched an application on 27 May 2021, seeking the relief in Part A and B of the application. In Part A, the SIU sought an interdict against the first respondent, the Johannesburg Social Housing Company (JOSHCO) not to make any payments to the respondent entities under a tender it awarded them, for the conversion of shipping containers into residential units at three sites in the Region E areas of Alexandra and Marlboro (the contract).

[5] In Part B, the SIU seeks an order reviewing and setting aside the contract due to alleged procurement irregularities, as well as consequential relief as envisaged in section 172 (1) (b) of the Constitution.

[6] The application made provision for the filing of further papers and the date of hearing Part A. The date of hearing noted in the notice of motion is 29 June 2021. The respondent entities duly filed their answering affidavits. The SIU failed to reply to the answering affidavits by the date determined by it.

[7] After the SIU withdrew Part A, the respondent entities persisted with the hearing of the matter as enrolled, to present an argument on costs. I refused to keep the matter enrolled on the basis of the trite principle that an application for costs is not urgent. Tribunal Rule 21 (2) is consistent with this approach. It provides that where proceedings are withdrawn without a tender for wasted costs, the party who seeks a cost order may apply for the order on notice.

[8] Subsequently, the respondent entities requested that the matter is enrolled in the ordinary course for argument on costs. I issued a directive that parties file heads of argument for the costs to be determined on the basis of the parties’ written submissions.

[9] The respondent entities and the SIU complied with the directive.

[10] Tribunal Rule 21(1) provides that a party seeking to withdraw proceedings must deliver a notice of withdrawal, tendering the costs of the proceedings. This Rule resembles Uniform Rule 41(1) in material respects. Therefore, decisions handed down under that rule guide the Tribunal’s approach in this matter.

[11] It is trite that despite the above provision, the Tribunal retains its discretion in respect of costs, which it exercises judiciously. Sound reasons must exist to deprive a respondent of its entitlement to costs under the Rule.

[12] It is also trite that, ordinarily, when it withdraws proceedings, an applicant is in the position of an unsuccessful party. Therefore, the other party is ordinarily entitled to costs. Considerations such as the parties’ conduct, the conduct of the parties’ legal representatives, whether a party only achieves technical success, the nature of the litigants and the nature of the proceedings are applicable.[i]

[13] An application becoming voluminous, is never a reason to remove it from the urgent roll. The SIU failed to comply with the timeframes it set, only to withdraw Part A when the hearing was eminent. This is probably the reason why it withdrew Part A. It is not for the SIU to determine whether it is convenient for the Tribunal to hear a matter or not, to the prejudice of the respondent entities.

[14] The Tribunal Rules render the procedure applicable in urgent applications in the Tribunal distinguishable from urgent applications in the High Court. In terms of Tribunal Rule 12(4) and (5), applications are enrolled on a date arranged with the Registrar. The Registrar would enrol an urgent application on the date determined by the Presiding Member or the Tribunal President. The SIU failed to follow this procedure. It imposed a date on the Tribunal. The date fell during recess and was not convenient for the Tribunal. The reason why the SIU allowed elaborate periods for the filing of papers, only to enrol the matter during recess, is not apparent from the papers.

[15] Therefore, the SIU’s reliance on In Re: Several Matters[ii] is misplaced.

[16] The SIU’s attempt to demonstrate that it would have succeeded in Part A is futile because, it abandoned the opportunity to obtain the relief it sought in that part of the application. Thus, it fits the profile of an unsuccessful party. The respondent entities fit the profile of successful parties, more so that subsequently, JOSHCO honoured its payment obligations to them.

[17] The SIU’s reliance on Mccsand[iii], is also misplaced. It had an obligation to tender costs. It is not open to the SIU to wantonly depart from Rule 21 (1) in the manner it has. A petition for costs under this rule is guided by the nuanced legal principles set out above. Further, the facts in Mccsand are clearly distinguishable, as the applicant in Mccsand did not withdraw its application for an interim interdict.

[18] The respondent entities are grieved that the SIU issued what they contend is a vexatious and/ or misconceived application for an interim interdict. They contend that there are exceptional circumstances that justify the exercise of the Tribunal’s discretion in their favour by awarding them costs. They also contend that there is no reason why they should be out-pocketed by their own attorney and client costs. For the reasons that follow, I agree with the respondent entities.

[19] It is prudent not to traverse the merits of the main application at this stage, as they have no bearing on the respondent entities’ entitlement to the costs of opposing Part A. To the extent the merits are relied on by any of the parties, their contentions are discounted.

[20] The respondent entities continued to perform under the contract as they were obliged to, because the SIU did not interdict the further implementation of the contact. Therefore, they are entitled to payment in terms of the contract.

[21] If the interdict was granted two-thirds towards the completion of the contract, the respondent entities would not be in a position to continue to fulfil their obligations in terms of the contract and, would most likely abandon the project site, leaving the project vulnerable to vandalism, to the greater prejudice of the public. The project beneficiaries would also suffer great prejudice, including the heightened risk of contracting Covid-19 due to over-crowding. This is the social ill which the project was meant to address. In the event that the SIU is successful in the review, it is entitled to just and equitable relief.

[22] Therefore, the SIU would not succeed in establishing that JOSHCO would suffer irreparable harm if the interdict was not granted. It would also not establish the absence of an alternative remedy and the balance of convenience in its favour.

[23] Further, the SIU would not meet the test for urgency. Given the respondent entities’ entitlement to payment, having performed in terms of the contract, as well as SIU’s entitlement to just and equitable relief, in the event that the contract is reviewed and set aside, the SIU would not establish that it would be denied substantial redress in due course if it was not heard on an urgent basis.

[24] Therefore, the SIU’s attempt to interdict payment under these circumstances, was unjustified, vexatious and misconceived.

[25] The relief the SIU seeks in Part B is entirely different. That it is persisting with that relief is of no moment. The prejudice suffered by the respondent entities, consequent upon the withdrawal of Part A, is unassailable. The costs they have incurred to oppose Part A have gone to waste. Therefore, their petition for those costs is justified.

[26] Having succeeded in their petition for the costs of opposing Part A, they are also entitled to the costs associated with obtaining the below order.

[27] Therefore, the following order is made:

ORDER

1. The Special Investigating Unit shall pay the third to fifth respondents’ costs of opposing Part A of the application, as well as the costs of obtaining this order, on the attorney and client scale, including the costs of two counsel where so employed.

JUDGE L.T MODIBA

MEMBER OF THE SPECIAL TRIBUNAL

APPEARENCES

Counsel for the Applicant:

Adv. J.A. Motepe SC

, assisted by Adv. B. Lukhele

Attorney for the Applicant:

Ms. S. Zondi, Office of the

State Attorney, Pretoria

Attorney for the 3rd Respondent:

T. B. Ramantsi, Ramantsi

Attorneys

Counsel for the 4th Respondent:

Adv. C.E. Watt-Pringles SC,

assisted by Adv. D. N.

Lundstrom

Attorney the 4th Respondent:

Meekness Phiri, Allardyce &

Partners Attorneys

Counsel for the 5th Respondent:

Adv. W. Pocock

Attorney for the 5th Respondent:

Ms L. Romylos, Tiefenthaler Attorneys Inc.

Date of hearing:

Not applicable. Application

determined on written

submissions

Date of Judgment:

2 September 2021

Mode of delivery: this judgment is handed down by sending it by email to the parties’ legal representatives and loading on Caselines. The date and time for delivery is deemed to be 10:00 am on 2 September 2021.

[i] ABSA Bank and Others vs Robb 2013(3) SA 619 (GSJ) at paragraph 8; Ferreira v Levin N.O. and Other 1996 (2) SA 622 (CC) at paragraph 3

[ii] 2013 (1) SA 549 (GSJ)

[iii] (2005) 2 All SA 469 (SCA) at paragraph 13