Wellington Court Shareblock v Johannesburg City Council; Agar Properties (Pty) Ltd v Johannesburg City Council

• Jurisdiction: South Africa
• Judge: Joubert JA, Botha JA, Nienaber JA, Van den Heever JA and Olivier JA
• Judgment Date: 31 May 1995
• Docket Number: 704/93
• Court: Appellate Division
• Hearing Date: 07 May 1995
• Citation: 1995 (3) SA 827 (A)

B Nienaber JA:

There are two appeals before Court. The first question is whether they should be. In each the appellant concerned appeals against the dismissal of an exception that the respondent's particulars of claim disclosed no cause of action. The exceptions were heard together, and so were the appeals, because the averments in the particulars of claim and C the point in issue in the exception were essentially the same.

The respondent is an urban local authority duly constituted in terms of the Local Government Ordinance 17 of 1939 (T). The two appellants are both private companies. Each owns an immovable property within the respondent's municipal jurisdiction, on which a block of flats had been D erected. The respondent supplied the buildings with electricity, water and in the one case also with gas. In each set of particulars of claim it is alleged that an agreement had come into existence between the respondent and the appellant concerned in terms of which the respondent would supply the building with electricity and water (and gas) for which E the appellant would pay the respondent its 'usual charge from time to time'; that the respondent duly supplied such commodities 'in terms of and pursuant to the agreement'; and that a balance 'calculated at the plaintiff's usual charge from time to time' remained due to the respondent. The particulars of claim, save for the reference to gas, concluded with an identical paragraph:

E 'In the premises and by virtue of the agreement, and the provisions of Local Government Ordinance 17 of 1939, and the provisions of the aforementioned water and electricity by-laws the defendant is liable to the plaintiff for payment of the aforesaid amounts in respect of electricity, water and gas supplied at the property.'

The nub of both exceptions is that the agreement as alleged does not G conform to the formal and procedural requirements of the relevant by-laws for the conclusion of such an agreement; and that, being a creature of statute, the respondent was in law unable to 'deal with the subject matter in any other way, for example by common law agreement or resolution'. The agreement, being ultra vires the relevant by-laws and regulations H governing the supply of such commodities to consumers, could not, so it was averred, support a claim for payment. The particulars of claim accordingly lacked a sustainable cause of action.

The exceptions were heard by Eloff JP in the Witwatersrand Local Division. He was prepared to assume, for the sake of the argument, that the I agreements were indeed ultra vires. But on the authority of a line of cases (Laing v Caledon Municipality (1909) 19 CTR 599; Bloemhof Village Council v Calder 1924 TPD 7; Barnard v Celliers 1929 EDL 106; SA Hotels Ltd v City of Cape Town 1932 CPD 229; Morland v Niehaus 1973 (1) SA 240 (C) he held that

'. . . where a local authority enters into a contract with a party which, by reason of legal requirements, is invalid, that party, on being sued for J performance under

Nienaber JA

A the contract, and who received benefits in consequence thereof, cannot be heard to say the contract is invalid'.

The party receiving such benefit, he added, quoting from Dönges and Van Winsen Municipal Law 2nd ed at 40, is estopped from raising the defence that such contract or regulation was ultra vires. He concluded:

B 'I have given thought to the question whether a litigant may raise an estoppel by way of answer to an exception. The basic rule is that a party wishing to rely on an estoppel must allege and prove it (Blackie Swart Argitekte v Van Heerden 1986 (1) SA 249 (A) at 260I-J). I consider, however, that it is open to a litigant in the position of the plaintiff in casu to counter an effort by means of an exception to rely on invalidity C of a contract, by invoking the equitable remedy of estoppel. I believe the defendant is estopped from relying on the alleged invalidity of the contracts described in the particulars of claim.'

In the result both exceptions were dismissed with costs. Leave to appeal to this Court was subsequently granted in both cases by the Court a quo.

D When the matter was called in this Court the only question debated, and on which judgment was reserved, was whether the order made was an appealable 'judgment or order' for purposes of s 20 of the Supreme Court Act 59 of 1959 ('the Act').

This is an issue that has come before this Court not infrequently of late, most notably in Zweni v Minister of Law and Order 1993 (1) SA 523 (A). E (See too Trope and Others v South African Reserve Bank 1993 (3) SA 264 (A); Caroluskraal Farms (Edms) Bpk v Eerste Nasionale Bank van Suider-Afrika Bpk; Red Head Boer Goat (Edms) Bpk v Eerste Nasionale Bank van Suider-Afrika Bpk; Sleutelfontein (Edms) Bpk v Eerste...