Tedcor Mbombela Waste (Pty) Ltd v Mbombela Local Municipality (3056/2018) [2020] ZAMPMBHC 16 (25 September 2020)

IN

THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION (MAIN SEAT)

CASE NUMBER 3056/2018

In the matter between:

TEDCOR MBOMBELA WASTE(PTY)

LTD

APPLICANT

AND

THE

MBOMBELA LOCAL

MUNICIPALITY

RESPONDENT

REASONS

FOR JUDGMENT

KGOELE J

[1] This is an interlocutory application in terms of Rule 28 (4) of the Uniform Rules of Court (the Rules) wherein the applicant (the plaintiff in the main action) seeks leave to amend its particulars of claim as per its proposed amendment filed on 04 September 2019. The respondent (the defendant in the main action) objected to those proposed amendments.

[2] The summarised factual background to this application is that on 08 August 2007, the parties entered into a written agreement of collection, removal and disposal of waste within the areas of Kanyamazane, Matsulu and Tekwane North and South. The effective date thereof was 01 May 2007 and it was to endure for 5 years ending 30 April 2012. This agreement (the main agreement) is not disputed by the respondent and therefore is common cause between the parties.

[3] The applicant alleges that as a result of the fact that the respondent failed to appoint another service provider to continue

with the services to be rendered on expiry of the main agreement, the parties concluded another agreement to extend the main one on a month to month basis. The services of this extended agreement were according to the applicant rendered from the date when the main agreement expired until the end of June 2018. The applicant further contends that during this alleged extended period, the respondent paid the invoices submitted to them save for the ones that were submitted in connection with the services rendered during the period from 31 July 2017 to 30 June 2018. The balance remaining according to the applicant is R2 624 698.75. The respondent disputes the existence of the extended agreement as gathered from its opposition papers.

[4] In order to recover this amount, the interest thereon and the annual increase that was not invoiced during the period of July 2016 up to June 2018, the applicant instituted an action against the respondent and claimed two amounts of R3 945 132.70 and R769 248 20.00 together with the costs. The respondent filed its plea in the main action and thereafter the applicant filed an application for summary judgment which was also opposed by the respondent.

[5] Leave to defend was granted to the respondent by agreement between the parties. As a result of the fact that the respondent had amongst others in its plea, raised a Point in limine to the effect that the main agreement was governed by the terms of an arbitration clause embodied in the agreement, the matter was referred by agreement between the parties to arbitration. Immediately after a Chairperson was appointed to adjudicate same, the respondent apparently in an about turn, refused that the matter be adjudicated through arbitration. This refusal was contained in the letter from the respondent which was couched as follows:

“there is no agreement between the parties that makes provision for arbitration. The agreement referred to in the letter expired on or about April 2012.Our client dispute that the said agreement was extended. In the absence of a valid agreement this matter cannot be referred to the arbitration”

[6] The applicant thereafter decided to file its notice to amend its particulars of claim in terms of Rule 28 of the Rules. The respondent still objected to the said amendments. The opposed application to amend was heard by this Court on the 30 July 2020. The following Order was made by this Court:

1 The objections raised by the defendant in the following paragraphs of their notice of objection dated September 2019 is hereby upheld.

- Paragraphs 7 and its subparagraphs

- Paragraphs 16; 16.1;16.2; 16.5 and 16.7

- Paragraphs 17 and its subparagraphs

- Paragraphs 18,19,24,25,26,27 and 28”

1. The plaintiff is hereby granted leave to amend the paragraphs referred to in these objections which are upheld.

2. The plaintiff is ordered to pay the costs of this application including costs occasioned by the employment of a Senior Counsel.

3. The reasons for this order will be given upon request by any party in terms of the Rules.”

[7] The applicant filed a request to be provided with reasons on 11 August 2020 which was brought to my attention on 14 August 2020. The reasons follow hereunder.

AD PARAGRAPH 7 and its SUBPARAGRAPHS of the Notice of objection

[8] The respondent in the main bemoans that the intended amendment does not comply with the requirements of Rule 18 of the Rules.

[9] In the relation to the first ground of objection, the respondent contends that the amendments to paragraph 3 to 6 are vague and embarrassing. A gist of the relevant paragraphs of the amendments objected to were phrased as follows by the respondent in their notice of objection:

● In paragraph 3 of annexure “A” the applicant refers to the main agreement entered between the parties as annexure “POC1”;

● In paragraph 4.2 it is stated that the agreement shall commence on 1 May 2007 (“the effective date”) and endure for 5 years thereafter.

● In paragraph 4.3 it is stated that either party has the option to renew the agreement for a further five years’ term on written notice to the other, which notice shall be delivered to the other party, six months before the expiry of the initial term, subject at all times to the requirement of the Local Government Municipality Finance Management Act.

● In paragraph 4.6 it is stated that for the duration of the agreement the defendant shall:

o “Pay the consideration to the plaintiff in full as and when due;

o Co-operate and provide the plaintiff with such support and information, at the defendant’s costs, that may be necessary for the rendering of services.”

● In paragraph 6 it is stated that the plaintiff duly complied with its obligations in terms of the agreement until it was terminated on 30 June 2018.

[10] This objection is encapsulated in paragraph 7 of their notice of objection. The respondent bemoans that:

● The plaintiff does not allege that a 6 months’ written notice was issued by one of the parties to renew the main contract as contemplated in paragraph 3.2 of the said agreement;

● The plaintiff does not state that the alleged extended agreement complied with the requirements of the Local Government Municipal Management Act as contemplated in paragraph 3.2 of the main agreement;

● The plaintiff does not state whether the extended agreement was reduced to writing when it was entered into and signed by both parties as contemplated in paragraph 16.7,16.3 and 16.5 of the main agreement;

● When the plaintiff refers to the “duration of the contract”, it is not clear whether it refers to the period between 7 May 2007 to 30 April 2012 (main agreement) or the period 1 May 2012 to 30 June 2018.

[11] In amplification of the last objection regarding the words “duration of the agreement”, Counsel representing the respondent submitted that the applicant makes a generalised contention in paragraph 4.6 of the proposed amendment that “for the duration of the agreement, the defendant shall….” He argued that it is crystal clear from this as read with paragraph 3 of the same proposed amendment that the reference herein is only restricted to the main agreement which terminated on 30 April 2012. The duration can therefore simply refer to a period 1 May 2007 to 30 April 2012.He added that the applicant proceeds however to aver in paragraph 6 that it had complied with its obligations in terms of the “agreement until it was terminated on 30 June 2018”. According to the respondent’s Counsel, these averments are vague and embarrassing because it refers to the period which is outside the duration of the main agreement and the period from 1 May 2012 to 30 June 2018 is therefore not accounted for in the proposed amendments.

[12] In reply, the applicant submitted that there is nothing objectionable in respect of paragraph 3 to 6 of the proposed amendment. According to the applicant the problem is that the respondent elected to read the allegations therein in isolation contrary to the well-established principles that the pleadings must be read as a whole, and minor blemishes are to be considered irrelevant. According to the applicant, the respondent should in this regard read these paragraphs together with paragraphs 11 to 18 of the proposed amendment. On proper reading of paragraph 11 to 18, it is clear that the agreement was entered into on a month to month basis and pursuant to the provision of Regulation 36 of their own Supply Chain Management policy.

[13] I choose to begin with the last objection because of its simplicity. Rule 18(4) of the Rules provides:

“Every pleading shall contain a clear and concise statement of material facts upon which the pleader relies for his claim…with

sufficient particularity to enable the opposite party to reply to”.

[14] I fully agree with the respondent’s Counsel that respondent is left to second guess as to whether compliance with the agreement in these paragraphs refers to the main agreement that ended in 2012 or it refers to the purported extended agreement that only started in May 2012 until 30 June 2018. It cannot be correct that reference to duration in this context also includes the period from 01 May 2012 until 30 June 2018 since this does not fall within the period as contemplated in the main agreement. In addition to this, the claim of the applicant relates to the extended agreement only and not the main expired one. This ambiguity and vagueness is offensive to the principle of pleading that a pleading must be clear and not capable of various interpretation. In addition, compliance with the contract is a very essential aspect of the applicant’s claim since in its absence, it cannot even start to lay a claim against the respondent.

[15] Rule 18 (6) of the Rules provides:

“A party who in his pleadings relies upon a contract shall state whether the contract is written or oral and when, where and by whom it was concluded and if the contract is written, a true copy thereof or of the part relied on pleading shall be annexed to the pleading”.

[16] It is the common cause that the main agreement expired on 30 April 2012. Of critical importance is that the applicant failed to state both in his particulars of claim and also in the proposed amendment to the particulars of claim whether the alleged extended agreement was concluded orally or in writing. In addition, the applicant failed to state who represented the parties when the agreement to extend the main one was concluded. This is what the Rule requires from the applicant to do and failure to make such averments is not only consistent with Rule 18(6), but the respondent is prejudiced thereby and will not be able to properly plead to such averments. Sight should not be lost of the fact that the main contract was reduced to writing and the applicant relies on a contract that has been extended by another subsequent agreement. They need to know in what manner the extended agreement was done and the identity of the person in their employ who allegedly extended it, and therefore, the respondent remains embarrassed by the proposed amendment.

[17] But the problem is further exacerbated by the fact that the main agreement sought to be relied upon by the applicant provides in particular that, if there were to be any renewal of the agreement after expiry of the period of the five years, a written notice of the renewal should be communicated by either of the parties. Paragraph 16.3 and 16.5 of the contract requires that any variation should be in writing. The applicant is noticeably silence in this regard. To the extent that the applicant does not state that the extension of the contract on a month to month basis for a period of 6 years was reduced to writing and signed by the parties after a written notice was communicated to either of them, the proposed amendment cannot be sustained due to the fact that it is at odds with the provision of 16.3 and 16.5 of the contract, which provides that the contract can only be varied in writing and signed by both parties. Consequently, the proposed amendment does not disclose the cause of the action of the alleged renewal of month to month contract.

PARAGRAPHS 16, 16.1, 16.2, 16.5, and 16.7 of the Notice of objection

[18] In its notice of intention to amend, the applicant in paragraph 12 stated that the respondent has adopted a Supply Chain Management

Policy and proceed to quote an extract from section 36 thereof which deals with dispensing of procurement process only in case of “emergency”. It furthermore stated in paragraph 16 that:

“In order not only to avoid the health hazard that would be created in the event the waste is not removed but also to provide it with the time to issue a tender for the appointment of a service provider, the defendant extended the agreement on a month-to-month basis as the defendant was entitled to do, pursuant to the provisions of the defendant’s supply chain policy read together with Regulation 36”

[19] The respondent contends that the requirements of Rule 18 (4) have also been understood to require that the applicant must disclose a cause of action in his particulars of claim. It therefore decries that the applicant does not establish a clear connection between the provision of Section 36 (1)(a)(i) and what is set out in paragraphs 12 to 18 of his proposed amendments in that it is not alleged that the services allegedly rendered by the respondent as stated in paragraph 31 of the proposed amendment were procured in an emergency. The reliance on section 36(1)(a)(i) in the present case without clearly stating that the services set out in paragraph 31 of the proposed amendment were procured in an emergency makes the proposed amendment excepiable.

[20] In addition to the above, the respondent decry that applicant has failed to disclose a cause of action in that it specifically fails to make an averment that a situation of emergency as contemplated in Regulation 36 promulgated in terms of the Municipal Finance Management Act 56 of 2003(the Regulations) prevailed for each and every month, and further that it allegedly rendered the said services of emergency for a period of around six years on each and every month. The applicant’s failure to plead this emergency clearly depicts that the applicant does not have any cause of action at all against the respondent.

[21] The applicant in reply argues that if regard is had to paragraphs 11 to 18 of its proposed amendments, it is clear that it did plead the facts from which the Court can make a conclusion that an emergency situation existed. Further that, it is not required as a matter of law that the applicant should draw the conclusion that the situation created an emergency. Only facts need to be pleaded and not conclusions of law. In this regard Counsel representing the applicant submitted further that, the applicant pleaded in its papers that, in order to avoid the health hazard that would be created in the event that waste is not removed, but also to provide the respondent with the time to issue a tender for the appointment of another service provided, the respondent extended the agreement on a month to month basis. From these facts as pleaded, the conclusion follows that an emergency situation was created by the respondents own failure to get its house in order as contemplated in Regulation 36.

[22] Lastly that, in accordance with the respondent’s own Supply Chain Management Policy together with Regulation 36 which provides for a process to dispense with the official procurement process, the parties to the agreement are not required to comply with the provisions of clause 3.2,16.3 or 16.5 of the main agreement. Further that, no averments that the extension of the main agreement complied with the provision of the Constitution need to be made because the agreement was extended on the same terms and conditions of the main agreement. Therefore, the respondent can properly plead to the allegations.

[23] As already indicated by the applicant’s Counsel above, it is trite that the requirements of Rule 18 (4) have also been understood to require that the plaintiff must disclose a cause of action in his particulars of claim. In the case of McKenzie v Farmers’ Co-operative Meat Industries Ltd[1] it was held that this is understood to mean:

“every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact which is necessary to be proved”.

[24] In Evins v Shield Insurance Co Ltd[2] the Court held that the cause of action:

“is ordinarily used to describe the factual basis, the set of material facts that begets the plaintiff’s legal right of action”.

[25] Reliance to paragraph 11 to 18 of their proposed amendment does not assist the applicant since in order for the applicant to rely on section 36 of the Policy and the Municipal Finance Management Act, the applicant must specifically have alleged that a situation of emergency prevailed at the time when the alleged month to month contract was entered into. It is a condition in the Act as read with the Regulations that such a contract may be extended only in those circumstances of emergency and paragraph 36(2) thereof states that the Accounting officer must record the reasons for any deviation and report them to the next Council meeting. No where did the applicant ever mentioned that section 36(2) was complied with when such a month to month extended agreement was concluded except making a general sweeping statement that it was made pursuant to the provisions of Regulation 36 of the defendant’s Supply Chain Policy.

[26] A reading of paragraph 15 and 16 also does not spell out specifically in what manner the applicant makes the contention that a situation of emergency existed and or disclose that there existed a situation of emergency when the contract was concluded. It cannot be just inferred that the requirements provided therein were met or simply be assumed that such situation indeed existed because the waste was not removed. The applicant in his own mouth says the contract was concluded in order to avoid a creation of a health hazard situation in case the waste was not removed. This refers to a situation that can exist in future. It does not say how long was the waste not taken before the contract was concluded. A situation of emergency should exist at the time of the conclusion of the contract for it to qualify as such in terms of the respondent’s procurement legislations. The respondent is once again left to second guess what the applicant intend alleging. It becomes more confusing and boggles one’s mind if ones take into consideration these paragraphs together with their submission that the extended agreement was concluded/extended

on the same terms and conditions of the main agreement because it is clear that the main agreement was not concluded in a situation of emergency. If the extended agreement was concluded in those emergency situation, this must be spelled out clearly. The amendments remain vague and embarrassing and or lacks averments to sustain a cause of action.

AD PARAGRAPH 17 and its SUBPARAGRAPHS including PARAGAPHS 18 and 19 of the Notice of objection

[27] In paragraphs 19 to 22 of the notice to amend, the applicant relies on the principle of negotorium gestio contraria as its cause of action. Reliance is also placed upon this principle for its Claim C. It is the contention of the respondent that in respect of these claims, the applicant does not disclose a cause of action for the amounts claimed therein and consequently the proposed amendment cannot be granted.

[28] The objection in this regard is found in paragraph 17 of their notice of objection. In particular, the respondent bemoans that:

● The principle of negotiorum gestio contraria cannot apply where it is gendered in circumstances where the applicant’s voluntary act of generosity and friendship as they

claim, was in violation of the Local Governing Procurement Policy as already indicated above;

● In claims based on negotiorium gestio contraria, the gestor is only entitled to reimbursement for expenses and not for remuneration;

● Negotiorum gestio contraria cannot apply where the intention from the onset was to render a service with profit;

● It is impractical and illogical that the applicant could have been rendering the services to the defendant for the “duration of the contract” a period which is 6 years.

[29] The respondent’s Counsel in his supplementary heads of arguments submitted that negotiorum gestio is a “voluntary management by one person, called the gestor, of the affairs of another, called the dominus without the consent of or knowledge of the latter.” He referred this Court to the case of Immaculate Truck Repairs CC v Capital Acceptances Ltd[3] thereof to emphasize his point.

[30] He emphasized that the applicant has not in the said proposed amendments alleged all the elements for the negotiorum gestio. He maintained that in order to succeed, our Courts have found that a litigant must allege and prove four essential elements, namely that:

● The affairs managed by the gestor are those of another;

● The dominus must have been ignorant of the fact that her or his affairs were being managed;

● The gestor must have had the intention of managing the affairs of another; and

● The management of the dominus’s affairs should have been conducted in a reasonable way, at least at the commencement of the gestio.

[31] In particular, he argued, the applicant has failed to allege that the respondent was unaware that it (the applicant) was managing the respondent’s affairs. This is fatal according to him to the applicant’s intended amendments.

[32] The applicant’s reply is that the requirements for a claim based on the negotiorum gestio contraria are well establish in our law. The view of the Counsel representing the applicant is that the first requirement that the act to remove the waste, had to be rendered by the gestor (the applicant) had been complied with. He argued that the gist of this requirement to the effect that absent of a legally binding

agreement between the gestor and the recipient of his benevolent input, is equally apparent if no consensual agreement could exist as contended by the respondent.

[33] He further claimed that the second requirement that the services rendered must reasonably be in the interest of the dominos has been met because the respondent is constitutionally obliged to remove the waste but failed to do so.

[34] As for the third requirement which requires that the action of the gestor must be negotio aliena generendi (benefiting someone other than himself), he argued that the respondent misinterprets this requirement. According to him, it merely means that if the gestor “in reality …intended benefitting solely himself, he enjoys no remedy…”. The services they rendered did not solely benefit the applicant, the argument so continued. In actual fact it benefited the respondent in that the waste was removed which the defendant is constitutionally obliged to clear.

[35] The last requirement that the gestor should not act animo donandi (intention to donate) has also been met because no basis exist or has been contended that the plaintiff acted animo donandi.

[36] Lastly the applicant contends that the law has developed to the point where it is accepted that even in the absence of an agreement, that the gestor is entitled to claim reasonable compensation for services provided and is not merely restricted to claim disbursement of the costs involved in so doing. This is particularly so according to the applicant, when the respondent is legally bound to remove the waste. Accordingly, the applicant contends that the respondent is able to plead to the proposed amendment.

[37] It is trite law that negotiorum gestio is a voluntary management by one person, called the gestor, of the affairs of another called dominus without the consent of or knowledge of the latter.

[38] I fully agree with Advocate Motepe SC representing the respondent that the applicant has not alleged in its amendments all the essential elements for negotiorum gestio. The second requirement that relates to the fact that the dominus must have been ignorant of the fact that her or his affairs were managed was not even dealt with at all in their proposed amendments.

At best, one can safely say it was misconstrued and or cursorily referred to by the applicant’s Counsel when dealing with the first requirement during his submissions. A case that best illustrate this requirement is the case of Tukstra V Massyn[4] which the respondent’s Counsel also referred to where at page 47 it was held;

“Now ‘absent’ means not physically absent but absent from the transaction, that is ignorant of it, and not necessarily absent from the place where the transaction took place.”[5]

[39] In casu, the applicant failed to allege that the respondent was unaware that it (applicant) was managing the respondent’s affairs. There is no allegation anywhere in the alternative claim of negotorium gestio contraria where the applicant set out that the respondent was absent in that or any other sense. This is fatal to its intended amendments as there is no foundation for this claim as it stands and it is bad in law. The applicant is noticeably silent about this fact. Of crucial importance is that the applicant could not have made this allegation anyway because on its own version, it continued to receive payment for the services it rendered after the main contract expired on 30 April 2012.

AD PARAGRAPHS 24,25,26,27 and 28 of the Notice of objection

[40] In paragraph 24,25,26,27 and 28, the respondent bemoans the fact that the proposed amendment in paragraphs 29 and 32 of the applicant’s notice do not disclose a cause of action and therefore is excepiable. Their reasoning is that the claim of the applicant according to its version is based on the service rendered “during the existence of the agreement”. The respondent argued that the applicant did not establish the existence of any contract in the particulars of claim because the applicant in paragraph 39 of the proposed amendment stated that: “In terms of the provision of the agreement, the parties agreed that …” Therefore, according to the respondent, the agreement referred to above is the contract which expired on the 30th April 2012.

[41] In addition to the above the respondent bemoans the fact that in paragraph 41 of the proposed amendments it is stated that:

“The plaintiff has not adjusted the consideration per unit and the additional landfill fee as it was entitled during the period July

2016 to June 2018”

[42] According to the respondents the proposed amendments contained in paragraph 39 to 42 are vague and embarrassing in that the applicant is relying on agreement which expired on the 30th of April 2012 to claim for an increase which allegedly accrued during the period July 2016 to June 2018.

[43] This objection need not contain this Court much simply because these averments are by mere reading vague and embarrassing. Nothing more need to be said because they are phrased in the same manner as the ones I dealt with above in paragraphs 13 and 14 of this judgment. The words “agreement” and “existing agreement” are interchangeably and continuously used without differentiating the expired main agreement and the one to month extended agreement relied upon. The respondent will therefore not be able to plead thereto.

[44] The above sums up the reasons for the Order that I granted on the 30/07/2020.

_____

JUDGE OF THE HIGH COURT: MPUMALANGA

APPEARANCES

For the applicant: Adv Smith SC

Instructed by: Kevin Ross & Affiliates

: c/o Christo Smith Attorneys Inc,

Email Address: land@csprok.co.za

For the respondent: Adv Motepe SC and Adv Mosoma

Instructed by: KMA Attorneys, Nelspruit

Email Address: kma@kmaattorneys.co.za

Date of Judgment: 30 JULY 2020

Date Reasons requested : 14 August 2020

Date Reasons handed down : 25 September 2020 via email

[1] 1922 AD 16 at 23

[2] 1980 (2) SA 814 A at 852 G

[3] (1153/2014) [2017] ZAFSHC 20 (16 February 2017)’ paragraph 21

[4] 1959(1) SA 40(T)

[5] See also North West Arts Council v Sekhabi [1996] 3 All SA 361 (B).