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IN THE EASTERN CAPE HIGH COURT, BHISHO

CASE NO: 451/09

In the matter between:

COPPERMOON TRADING 13 (PTY) LTD …........................................................Applicant

and

THE GOVERNMENT OF THE EASTERN

CAPE PROVINCE …....................................................................................1^st Respondent

THE DEPARTMENT OF PUBLIC WORKS …............................................2^nd Respondent

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JUDGMENT

Y EBRAHIM J:

Introduction

1. There are two applications before Court. In the first application, the applicant seeks an order in terms of Rule 30(A)(1) compelling the first and second respondents to make available for inspection and copying:

‘1. Copy of minutes of the Provincial Executive Council held on 12 September 2007;

2. Copy of minutes of the Provincial Executive Council held on 10 October 2007; and

3. Copy of minutes of the Provincial Executive Council held on 25 February 2009.’

2. In the second application, the applicant seeks an order in terms of Rule 30(A)(2) for the defence of the first and the second respondent to be struck out.

3. In the main application, in which these interlocutory applications originate, the applicant applies for an order in the following terms¹:

‘1. That the Deed of Settlement signed by the Applicant on 19 October 2007 and signed by the First and Second Respondents on 29 October 2007 and 23 October 2007 respectively, be made an Order of Court.

2. That the terms of the court order be embodied in a written lease agreement to be concluded by the parties within 14 days of the date of this order.’

4. The Deed of Settlement² forming the subject matter of the main application records the terms of the agreement concluded by the parties when they settled the action the applicant had instituted against the first respondent and the Member of the Executive Council of the Government of the Province of the Eastern Cape for the Department of Roads and Public Works wherein he claimed specific performance, alternatively damages. Presumably because the Department of Roads and Public Works subsequently became separate departments, the Department of Public Works has been cited as the second respondent in the main and interlocutory application. Since there is no dispute that the proper parties are before Court I refrain from any comment in this regard.

Factual background

5. The following is the factual background to the present application. During March 2004 interested parties were invited, via a newspaper advertisement, to tender for the purchase of an immovable property described as the Amatola Sun, Bisho, which the Eastern Cape Government owned. The applicant responded by submitting a written offer to purchase the property for R5 050 000,00. On 18 June 2004 the applicant was notified³ its offer had been accepted. Subsequently the applicant received a deed of sale⁴ and returned it duly signed⁵ to the respondents on 31 August 2004. Although the applicant tendered compliance with the respondents’ requirements and the terms and conditions of the deed of sale, transfer of the property in favour of the applicant did not take place.

6. The Legal Services office of the second respondents, in a letter dated 10 May 2005,⁶ thereupon conveyed the following to the applicant’s attorneys:

‘1. Reference is made your letter of the 04 (sic) instant.

2. The Department acknowledges the fact that it communicated with your client advising them that their tender was successful.

3. The Department ought not to have done that as the tender amount was above the Departmental delegations.

4. The power to award such a tender was vested with the Provincial Tender Board.

5. A meeting was held between the then Head of Department Mr Mafu and directors of your client wherein they were advised of the procedural error.

6. The Department then forwarded the recommendations to the Tender Board for adjudication and award but has since withdrawn the recommendations on discovery of a fundamental flaw in the process.

7. The property will therefore not be transferred to your client as the tender was not approved by the Tender Board.

Yours faithfully

________________

Z. FANANA

LEGAL SERVICES’

7. In a further letter dated 27 June 2005⁷ Legal Services stated:

‘Reference is made to the above matter and to your letter of the 7^th instant.

In terms of a practice and procedure that has been adopted by the Department where the Department intends to dispose of any Government Property, the intended disposal must first be referred to the Provincial State Land Disposal Committee (PSLDC) for such committee to consider and make recommendations to the MEC on such disposal.

In the purported sale of Amatola Sun referral to the PSLDC was never done and that amounted to a flaw in the process.’

8. This led to the applicant instituting the aforementioned action proceedings which the respondents defended. In their plea the respondents set out two defences. First, there had been non compliance with the Eastern Cape Land Disposal Act, 7 of 2000; second, the author of the letter accepting the applicant’s offer to purchase the property did so without authority and the contract was therefore unenforceable. As I have stated previously, the action was eventually settled on the terms recorded in the Deed of Settlement, which included the settlement agreement being made an order of Court.

9. The applicant prepared a draft Notarial Deed of Lease as the Deed of Settlement provided that the property was to be leased to it. Discussions ensued between the legal representatives of the parties to settle amendments thereto and on 4 August 2008 the lease agreement was delivered to the offices of the State Attorney for signature by the respondents. Thereafter there were further communications but these did not culminate in the lease agreement being signed.

10. Instead the State Attorney, at the behest of the respondents, wrote to the applicant on 11 March 2009⁸ in these terms:

‘Reference is made to the above and the settlement negotiations herein.

Kindly be advised that the Provincial Government is not in a position to proceed with the existing terms of the settlement and the draft lease agreement. The decision was taken at a meeting of the Provincial Executive Council held on the 25^th February 2009 after legal advice has been obtained with regard to Government’s constitutional and statutory obligations in respect of provincial immovable property.

Consequently, the Department of Public Works is unable to sign and conclude the proposed draft lease agreement in its current form.

Your co operation herein is appreciated.

Yours faithfully

__________________

S. MGUJULWA (MR)

FOR: STATE ATTORNEY (BHISHO)’

11. In consequence hereof the applicant launched the main application for the Deed of Settlement to be made an order of court and for the terms of the court order to be embodied in a written lease agreement to be concluded by the parties.

12. In the respondents’ answering affidavit in the main application the deponent, Sibongile Muthwa, explained how the present impasse had arisen and disclosed⁹ that the Provincial Executive Council had resolved at a meeting held on 12 September 2007 that the out of court settlement be supported. As Director General and Cabinet Secretary, Dr S Muthwa informed the Premier and all Members of the Executive Council in a missive dated 27 September 2007¹⁰ of the resolution taken ‘at the “85^th Executive Council Meeting (3^rd term) held on 12 September 2007’. Dr Muthwa also revealed¹¹ that at a meeting of the Provincial Executive Council held on 10 October 2007 the draft Deed of Settlement was presented and conditional approval to sign the deed was given to the Member of the Executive Council for Finance and the Member of the Executive Council for Public Works. The MEC for Finance was to sign on behalf of the first respondent and the MEC for Public Works was to sign in his capacity as the second respondent, but ‘approval was conditional upon the Head: Shared Legal Services in the office of the Premier first seeking and obtaining external legal advice to ensure that the settlement was not at variance with relevant legal principles.’

Analysis

13. Mr Quinn SC, who appeared for the applicant, submitted that the respondents’ opposition to the order sought by the applicant in the main application was based on different grounds to the defence pleaded in the action proceedings. The respondents, he said, now asserted ‘the tender amount was above the Departmental delegations’ and ‘[t]he power to award such a tender was vested with the Provincial Tender Board.’ The respondents’ defence was based on the resolutions of the Executive Council that Dr Muthwa had referred to in paragraphs 4 and 6 and 7 and 18.8 of the answering affidavit in the main application. He contended that these minutes and those of the Executive Council meeting of 25 February 2009, or relevant portions thereof, were of ‘material relevance to the defence of non compliance with conditions precedent’ and the respondents were obliged to produce the minute.¹²

14. Mr Heunis SC, who appeared for the respondents, attacked the Rule 35(12) notice on the basis that it did not refer to any paragraphs in the answering affidavit in the main application in which reference was made to the minutes of any of the meetings referred to in the notice. The respondents, in their answering affidavit in this application, experienced no difficulty in identifying which minutes were being referred to in the notice.¹³ I find no merit in the contention that this rendered the notice improper.

15. Even though the respondents deny that paragraphs 4 and 18.8 of the answering affidavit in the main application contain references to resolutions of the Executive Council, they admit there are references in paragraphs 6 and 7. The respondents dispute they are obliged to produce any of the minutes and contend that while the applicant may be entitled to the resolutions it does not mean that they have to produce the full minutes of the Executive Council meetings.

16. The respondents, by their own admission, referred in the main application¹⁴ to the resolutions taken by the Executive Council on 12 September 2007 and 10 October 2007 and prima facie they are therefore obliged to produce them for the applicant’s inspection.¹⁵ Annexure “AA1” is a copy of the resolution taken on 12 September 2007 and not the minute of the meeting in which it was adopted. The respondents are obliged to produce the minute for inspection and copying by the applicant.¹⁶ The applicant is entitled to the entire minute of the meeting and not merely the portion that the respondents have chosen to rely on.¹⁷ The position regarding the resolution taken on 10 October 2007 is no different. Notwithstanding the respondents’ claim that their defence is not based on this resolution ‘save to the extent that it explicitly foreshadows external legal advice to ensure compliance with the law which advice could notionally have been inconsistent with the contents of the Deed of Settlement Agreement’, they are nevertheless required to produce the minute. The Rule does not distinguish between ‘documents upon which the action or other proceedings is actually founded and documents possessing merely evidentiary value.’¹⁸

17. There is no merit in Dr Muthwa’s assertion¹⁹ that ‘[t]he fact that copies of the minutes of the relevant Executive Council meetings may exist and that such copies can be produced by transcribing tape recordings, does not entitle the Applicant to copies thereof.’ The Rule provides for production of the specified document and the respondents cannot evade compliance therewith in this manner.

18. In regard to the minute of the Executive Council meeting of 25 February 2009 the fact that reference thereto appears in an annexure and not directly in the affidavit does not mean that the provisions of Rule 35(12) were not activated. The respondents confirmed²⁰ that what the State Attorney had stated in the letter dated 11 March 2009 was correct. The letter of the State Attorney clearly stated that the Provincial Executive Council had taken a decision at a meeting held on 25 February 2009 that ‘the Provincial Government was not in a position to proceed with the existing terms of the terms of the settlement and the draft lease agreement.’²¹ This permits of no other conclusion but that the respondents were referring directly to the resolution taken at the meeting of 25 February 2009.²² It is not necessary, therefore, to resort to inferential reasoning to deduce whether the particular minute exists and the applicant is entitled to demand production of the minute of this meeting.²³

19. The onus is on the respondents to present facts that relieve them of the obligation to produce the documents.²⁴ They have not done so. The respondents do not claim that the documents which the applicants seek are confidential or protected by privilege or are irrelevant. Their objection to producing the documents is that the applicant is not entitled to the full minutes but only those portions of the minutes which do not deal with the issue of the Amatola Sun Hotel. There is no merit in this contention. If the rest of the minutes hold no benefit for the applicant the respondents have nothing to fear from producing the entire minute. If, on the other hand, there is anything of benefit in the whole minute ‘it is right and fair’ that the applicant should be able to refer and rely on it.²⁵

20. The documents demanded by the applicant clearly have evidentiary value. The respondents have not presented a valid reason justifying their refusal to produce the documents.²⁶ In the circumstances, I am satisfied that the applicant has established that it is entitled to the orders it seeks in both applications.

Costs

21. It is trite that costs will follow the result in the absence of cogent reasons to order otherwise. The respondents have not presented any reasons that persuade me to deviate from this. The applicant is accordingly entitled to an order for costs in its favour.

22. In the result, there is an order in the following terms:

1. The respondents are ordered to make available for inspection and copying within a period of fifteen (15) days hereof:

1. Copy of minutes of the Provincial Executive Council held on 12 September 2007;

2. Copy of minutes of the Provincial Executive Council held on 10 October 2007;

3. Copy of minutes of the Provincial Executive Council held on 25 February 2009; and

2. Failing compliance with paragraphs 1(a), (b) and (c) aforesaid, the applicant is granted leave to approach this Court on the same papers, suitably amplified, for an order that the defence of the first and second respondents be struck out.

3. The respondents are ordered to pay the costs of the Rule 30(A)(1) and Rule 30(A)(2) applications.

_________________________

Y EBRAHIM

JUDGE OF THE HIGH COURT 11 April 2010

Heard on: 23 November 2010

Judgment delivered on: 14 April 2011

Counsel for the Applicant: R P Quinn SC

Attorneys for the Applicant: Smith Tabata Inc

KING WILLIAM’S TOWN

Counsel for the Respondents: J C Heunis SC

Attorneys for the Respondents: State Attorney

EAST LONDON

^{COPPERMOON TRADING 13 (PTY) LTD v GOVT OF EC & DEPT PUBLIC WORKS.CVJ}

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