Ditsobotla Local Municipality v Carewell Holdings 5 (Pty) Ltd and another

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Reddy AJ
• Judgment Date: 01 September 2023
• Citation: 2023 JDR 3301 (NWM)
• Hearing Date: 18 August 2023
• Docket Number: 1396/22
• Court: North West Division, Mahikeng

Reddy AJ:

Introduction

[1]

This urgent application brought on motion was founded on relief sought in two Parts. Part A was for the stay of execution of writs issued by the Registrar of this Court and Part B for rescission of default judgment granted by Khan J on 8 June 2023.

[2]

The urgent application first served before Dewrance AJ on 27 July 2023 and subsequently before Reid J on 3 August 2023,seeking similar relief (save for Part B),before serving before me on 17 August 2023 with the relief sought being amended in line with the order handed down by Reid J. For purposes of this judgment, it suffices to note the orders of 27 July 2023 and 3 August 2023. Dewrance AJ ordered that the matter be struck off the roll due to non-appearance of the applicant and a defective Notice of Motion, with costs to be costs on an attorney and client scale. Reid J subsequently on the merits of the application, dismissed the second application of 3 August 2023 and further granted the applicant an opportunity to rectify the first application, which was struck from the roll by Dewrance AJ within ten (10) days of the order.

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[3]

The present application before me includes the issue of two points in limine raised by the first respondent before Reid J, of which only the second point in limine was addressed. The points in limine were that, in terms of:

(i)

Rule 7 of the Uniform Rules of Court the deponent to the founding affidavit lacked the authority in terms of the Rule 7 to institute the proceedings in the absence of a Municipal Council resolution authorising him to do so; and

(ii)

Rule 30, that the applicant had conducted an irregular step in the proceedings, on the basis that it had instituted duplicate proceedings after the initial urgent application was struck from the roll with a punitive cost order.

[4]

As will be demonstrated infra, the first point in limine is in fact dispositive of the application.

The Parties

[5]

An introduction to the litigants would be apposite to provide context to the judgment and facilitate ease of reading. The applicant is the Ditsobotla Local Municipality (‘the Municipality’) established in terms of the Local Government Municipality Structures Act 117 of 1998 situated at Civic Centre, corner of Nelson Mandela Drive and Rylaan, Lichtenburg, North West Province.

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[6]

The first respondent is Carewell Holdings 5 (Pty) Ltd (‘Carewell Holdings’), an entity registered in accordance with the company laws of the Republic of South Africa, with its core business being the rendering of security services, with its place of business situated within the North West Province.

[7]

The second respondent is the Branch Manager, Absa Bank, Lichtenburg (‘ABSA’), a banking institution which is the custodian of various banking accounts of the Municipality, where the amounts alleged in the Notice of Motion have been attached. No specific relief is sought against ABSA which is merely cited as an interested party. ABSA has not entered the fray.

Background

[8]

On or about 6 July 2021, the former Municipal Manager of the Municipality, Mr Tsietsi, appointed Carewell Holdings to render security services at specifically identified sites of the Municipality for a period of two (2) years. The Service Level Agreement (“the SLA”) covered a contractual period commencing on 1 August 2021 to conclude on 31 August 2023.

[9]

The Municipality contends that certain corrupt and fraudulent practices on the part of Carewell Holdings were identified some five (5) months into the SLA. A notice of termination of the appointment of the first respondent was consequently sent to Carewell Holdings on or about 28 December 2021. The termination of the SLA with Carewell Holdings is said to be premised on the unlawful conclusion of the SLA, as a result of the alleged contravention of public

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procurement processes which were not properly followed, in that was appointed as a successful bidder before the evaluation and adjudication of bids could be finalized.

[10]

Carewell Holdings in reaction to the notice of termination of the SLA sought and was granted an interdict in this Court, interdicting the Municipality from terminating its services. During June 2022, the Municipality and Carewell Holdings mutually terminated the SLA. Pursuant to the termination of the SLA, Carewell Holdings issued summons against the Municipality in which it claimed payment for security services allegedly rendered from October 2021 to May 2022 in the sum of R14 008 650.00. The Municipality was ipso facto barred on 17 February 2023.

[11]

On 8 June 2023, Khan AJ entered default judgment in favour of Carewell Holdings in the sum of R14 008 650.00, together with interest at 7% a temporae morae from the date of summons to date of payment. On 06 and 19 July 2023 writs of execution were issued by the Registrar of this Court authorising attachment of the bank accounts of the Municipality, in execution of the judgment for the amount granted in the order of court of 8 June 2023.

The present relief sought in this Court

[12]

In an amended Notice of Motion before this Court, the following relief was sought:

“PART A: STAY OF WRITS OF EXECUTION

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1.

Directing that the forms and service provided for in terms of the Uniform Rules be dispensed with and that this application be head on a semi-urgent basis as provided for in terms of rule 6(12)(a) of the Uniform Rules of Court.

2.

That pending the final determination of the rescission application instituted in terms of PART B herein below, an order be granted in the following terms:

2.1.1

That the writ of execution issued by the Registrar of the above Honourable Court on 6 July 2023 attaching in execution an amount of R15 042 987-30 held under the name of DITSOBOTLA LOCAL MUNICIPALITY at ABSA BANK LICHTENBURG BRANCH under banking account number 01003100339 be stayed with immediate effect.

2.1.2

The writ of execution issued by the Registrar of the above Honourable Court on 19 July 2023 attaching in execution an amount of R15 192 476-88 held under the name of DITSOBOTLA LOCAL MUNICIPALITY at ABSA BANK LICHTENBURG BRANCH under banking account number 38025140335 be stayed with immediate effect.

2.1.3

The writ of execution issued by the Registrar of the above Honourable Court on 19 July 2023 attaching in execution an amount of R15 192 476-88 held under the name of DITSOBOTLA LOCAL MUNICIPALITY at ABSA BANK, LICHTENBURG BRANCH under the banking account number 4060907068 be stayed with immediate effect.

2.1.4

The writ of execution issued by the Registrar of the above Honourable Court on 19 July 2023 attaching in execution an amount of R15 192 476-88 held under the name of DITSOBOTLA LOCAL MUNICIPALITY at ABSA BANK LICHTENBURG BRANCH under banking account number 4096263199 be stayed with immediate effect.

2.1.5

The writ of execution issued by the Registrar of the above Honourable Court on 19 July 2023 attaching in execution an amount of R15 192 476-88 held under the name of DITSOBOTLA LOCAL MUNICIPALITY at

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ABSA BANK LICHTENBURG BRANCH under banking account number 4062185 139 be stayed with immediate effect.

3.

That costs shall stand over for the determination along with Part B unless any of the respondents opposes, in which event such respondent be ordered to be liable for the applicant’s costs, jointly and severally with the other respondent who opposes, the one paying the other respondent who opposes, the other to be absolved.

4.

Further and/or alternative relief.

PART B: RECISSION OF DEFAULT JUDGMENT

. . .”

[13]

This application, as established above, is the third attempt by the Municipality to secure the relief it sought in Part A of its now amended Notice of Motion. Carewell Holdings filed a Notice in terms of Rule 30 read with Rule 30A of the Uniform Rules of Court (“the Rules”) on the attorneys of record of the Municipality on 16 August 2023. The Rule 30 notice complaint is predicated on a Rule 7 Notice dated 26 July 2023. A second Rule 7 Notice mirroring that of 26 July 2023 was served on the Municipality on 16 August 2023.

[14]

The perceived irregular steps is set as follows:

“BE PLEASED TO TAKE NOTICE that the Applicant (DITSOBOTLA LOCAL MUNCIPALITY) has taken the irregular steps consisting of the following:

1.

On 11 August 2023 at 13h31, the Applicant, through MODIBOA ATTORNEYS INC, filed an” Amended Notice of Motion”, accompanied by “Supplementary Affidavit”, on the First Respondents attorneys indicating

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that the Applicant intends to approach the above Honourable Court on 17 AUGUST 2023 at 10h00, for urgent relief.

2.

The aforesaid amended Notice of Motion and supplementary affidavit constitutes a nullity and an irregular step, due to the following reasons:

2.1

On 26 JULY 2023, the First Respondent challenged the Applicant’s attorneys authority to act in casu by way of Rule 7(1) and requested inter alia the following documentation.

2.1.1.

A Counsel Resolution by the Applicant’s Municipal Council authorising the Applicant, as well as MR SEREAME SOLLY NNETE, to institute the current legal proceedings (urgent application) against inter alia the First Respondent.

2.1.2

“A power of attorney by the Applicant’s Municipal Council appointing MODIBOA ATTORNEYS INC. as the Applicant’s attorney in this application.”

2.1.3

Proof that MODIBOA ATTORNEYS INC had been properly appointed as a service provider by the Applicant in terms of the PROVISIONS OF SECTION 2177 OF THE CONSTITUTION, NATIONAL TREASURY REGULATIONS and THE SUPPLY CHAIN MANGEMENT POLICY of the Applicant. A copy of the Rule 7(1) notice dated 26 JULY 2023, is annexure “A”.

2.2

It is trite law that a Municipality can only litigate...