SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy	

 

                         
                         
GAUTENG DIVISION, PRETORIA
REPUBLIC OF SOUTH AFRICA

                                                                
                                                                                 CASE NO: 51536/14
									DATE:  9/10/2014
In the matter between:
ROAD FREIGHT ASSOCIATION                               Applicant
and

DE KLERK AND MARAIS INC                                   First Respondent                                                     
VIVIAN DE KLERK                                                     Second Respondent
EMAKHAZENI MUNICIPAL FIRE AND 
EMERGENCY SERVICES (PTY) LTD                        Third Respondent     
EMAKHAZENI LOCAL MUNICIPALITY                     Fourth Respondent
STANDARD BANK OF SOUTH AFRICA                    Fifth Respondent 
FIRST NATIONAL BANK                                            Sixth Respondent 
LAW SOCIETY OF THE NORTHERN PROVINCES  Seventh Respondent

____________________________________________________________     
                                       J U D G M E N T
____________________________________________________________

Ismail J:

[1]	This application is sought in response to an application which was 
brought ex parte in the urgent court before Louw J. The order granted was 
as follows: 

(1)	    Condoning the non compliance with the Rules of court and 

    directing that the applicant be heard in camera as a matter of 

    urgency in terms of uniform rule of court 6 (12);

(2)	    A rule nisi is issued calling upon the respondents to show cause on 

   29 August 2014 at 10h00 or so soon thereafter as the matter may 

   be heard why an order should not be made in the following terms:
	
         2.1  The funds held in the following bank accounts are preserved
                pending the outcome of an action to be instituted by the applicant 
                against inter alia the first, second and third respondents:-  

                2.1.1   Bank account held in the name of De Klerk Marais Inc,
                           Standard Bank (Menlyn Square) 
                           Brach code: 01-23-45-00
                           Account number: 4[…]

                2.1.2   Bank accounts held in the name of Emakhanzeni 
                           Municipal Fire Emergency Services:-  
                           2.1.2.1    First National Bank (Belfast)
                                          Branch code: 270-351
                                           Account number: 6[…];

                            2.1.2.2   First National Bank (Belfast)
                                          Branch code: 270-351
                                           Account number: 62[…];

                            2.1.2.3    Standard Bank (Menlyn Square) 
                                           Branch code: 01-23-45-00
                                            Account number: 0[…].  

         2.2	  In respect of 2.1.1 above-	

  		2.2.1     The first and second respondents are prohibited and
                                restrained from operating in any way, whether directly 
                               or indirectly, the trust account of De Klerk and Marais 
                               Inc.;

                2.2.2       The seventh respondent is directed to:- 
       
                             2.2.2.1	supervise the trust account of the first respondent, referred 
                                            to in para 2.1.1, such supervision to include the appointment 
                                            of a curator bonis; 

                            2.2.2.2     inspect the accounting record of the first respondent, such
                                            to include causing an audit of Trust Account referred to in 
                                            para 2.1.1 and causing a report to be compiled for the 
                                            benefit of the court within 30 (thirty) calendar days from 
                                            date of this order.

(3)	   Pending the return day:-

              3.1  The funds held in The bank account listed in 2.1 are 
                     preserved; and

               3.2   The first and second respondents are prohibited and 
                       restrained from operating in any way directly or indirectly, the 
                       trust account mentioned in 2.1.1 above. 

(4)	   The cost of this application are reserved for determination in the 

   action proceeding to be instituted by the applicant.

                                                                   By order of the Court 
                                                                                 11 July 2014.

[2]	The first and second respondents were prohibited and restrained 
from operating either directly or indirectly the trust account of the First 
respondent. 
 
[3]	The first and second respondent seek to have the interim order, 
granted on the 11 July 2014, be discharged.

[4]	The main application wherein the applicant seeks a declarator has 
been set down for hearing on the 2 December 2014.

[5]	The third respondent would be referred to as such or by the acronym 
EMFES, in the course of this judgment. EMFES has not opposed these 
proceedings.

Background

[6]	The applicant avers that the third respondent has been 
masquerading that it was an emergency service of the Emakhazeni 
Municipality and that they were the Municipality Fire Brigade Services. 
In so doing they perpetrated a fraud on the unsuspecting public into 
believing that they were the Municipal Fire Brigade, whereas in truth the 
third respondent was a private company. 

[7]	A whistle blower, who was a director of the third respondent, one 
Mr Baker, turned against the second respondent who was a co- director of 
the third respondent.  This whistle blower deposed to an affidavit on behalf 
of the applicant wherein he stated that the second respondent of his own 
steam brought the application to have the interim order discharged, without 
notifying him as a director. More importantly he alluded to the improper 
behavior of the third respondent in devising a scheme to perform so called
emergency services which were not warranted. The monies collected went 
into the account of the third respondent and not into the account of the
municipality.  

[8]	The applicant furthermore contended that the person behind the 
scheme was none other than the second respondent , who is an attorney 
and a director of the first respondent. 

[9]	 During argument before me Mr Arnoldi SC, submitted that the 
Applicant’s founding affidavits contained diverse allegations of a hearsay 
nature. Furthermore the allegation of the alleged fraud were referred to in 
the main application [ which contains 1500 pages] which is set down for 
December,  this year. He submitted that the applicant relied in its founding 
papers to the main application and it therefore made it impossible for the 
first  and second respondents to respond thereto. He referred to the well 
known decision of Swissborough Diamond Mines v Government of the 
Republic of South Africa 1999 (2) SA 279 (T) at 324 where Joffe J stated:
“ Regard being had had to the function of affidavits , it is not open to an applicant or a 
respondent to merely annex to its affidavit documentation and to request the Court to 
have regard to it. What is required is the identification of the portions thereof on which 
reliance is placed and an indication of the case which is sought to be made out on the 
strength thereof. If this were not so the essence of our established practice would be 
destroyed. A party would not know what case must be met. See Lipschitz and Swartz 
NNO v Markowitz 1976 (3) SA 772 (W) at 775 and Port Nolloth Municipality v Xahalisa 
and Others; Luwalala and others v Port Nolloth Municipality 1991 (3) SA 98 (C ) AT 111 
B-C..”      

[10]	Mr Hopkin’s in reply submitted that the argument advanced by his 
esteemed opponent, that 1500 pages were annexed, and that he could not 
respond thereto was misplaced as the applicant specifically summarized 
the evidence in its founding papers. It referred to the passage in the main 
application by means of page references. In addition the applicant 
stipulated whether it was in the founding papers  or answering papers or 
replying papers. The applicant also summarized the relevant portions which 
it relied upon. He also contended that the practice manual of this division 
specifically directed that the papers could be annexed in applications such 
as Anton Pillar applications. The applicant strictly complied with the 
practice directive.

[11]	The respondents submitted that the applicant stubbornly refused to 
provide the names of its members, despite them having requested the 
same. They were therefore not in a position to respond to queries in 
general as some of the parties who received statements may or may not be 
members of the applicant. This point might have had some gravitas,
however, it was submitted that this was a constitutional challenge and that 
any person could challenge the decision of an government functionary such 
as the Municipality if it acted beyond the powers it was given, in other 
words, if it acted ultra virus the enabling statute. See Pharmaceutical 
Manufacturers Association of SA: In re: ex parte President of Republic of 
South Africa 2000 (2) SA 674 (CC) where Chaskalson CJ stated:
“ [85] It is a requirement of the rule of law that the exercise of public power by the 
executive and other functionaries  should not be arbitrary. Decisions must be rationally 
related to the purpose for which the power was given, otherwise they are in effect 
arbitrary and inconsistent with the requirement. It follows that in order to pass 
constitutional scrutiny the exercise of public power by the executive or other 
functionaries must, at least, comply with this requirement. If it does not, it falls short of 
the standard demanded by our Constitutional principle”
  
[12]	Section 8 of the Fire Brigade Services Act 99 of 1987 is headed 
“ 8 powers of members of service” it reads as follows:-
(1)	  A member of a service of a controlling authority, including the chief fire officer, 
           may, whenever he regards it necessary or expedient in order to perform his 
           functions, perform any act, and may also- 
  
(a)	  close any road or street;

(b)	  enter or break and enter any premises;

(c)	  damage, destroy or pull down any property;

(d)	  forcibly remove or cause to be removed from the scene any person who

  is in danger or who obstructs that member in the performance of his   

  duties; and
 
(e)	  take material or any object from any person: provided that the owner of      

  the material or object so taken shall be compensated therefor by the   

  controlling authority and the owner, or in the absence of such agreement, 

  an amount determined by arbitration in accordance with provisions of the 

  Arbitration Act (act 42 of 1965).
  
(2)	  A member of a service of a controlling authority, including a chief fire 

 officer, may whenever he regards it necessary in order to perform his 

functions, order any inhabitant of the Republic who is not younger than 16 

years and not older than 60 years to assist him in the performance of his 

functions on any particular occasion. 
     	
[13]	In my view the provisions of the aforementioned provisions should be 
interpreted literally and restrictively.

[14]	It therefore follows that the municipality could not enter into a contract 
with a third party whereby it sub contracts what it ought to be doing itself in 
terms of the enabling Act.

[15]	Mr Hopkins relied upon the fact that EMFES, the third respondent, 
acted in a fraudulent manner and throughout the papers words such as 
masquerading, deceiving the public, misled were used. It is not necessary 
for my to find this as a fact. I need not make a finding that the third 
respondent or the first and/or second respondents acted as such. Such a 
finding would be for the determination of the court which hears the Main 
application in two months’ time.  All I need to find is that there is a prima 
facie case to that effect for the rule to be confirmed.  

[16]	In this regard counsel for the first and respondents during his 
address conceded that it was established that there was a prima facie 
case, however he submitted that more than two years had passed before 
this application was lunched. Notwithstanding the lapse of that period the 
applicant suddenly labour under the belief that the monies would be 
dissipated from the trust account. He submitted that the seventh 
respondent is aware of this application and has not seized the first 
respondent books of account or for that matter investigated the alleged 
impropriety.  The seventh respondent has merely indicated that it would 
abide the court’s decision.

[17]	The applicant’s counsel submitted that the court cannot rely upon the 
word of the second respondent, who they allege had displayed the 
‘hallmarks of dishonesty’ by his inconsistencies and changing of versions. 
An example of this being that he continuously stated that there was no 
tender process which applied in this matter. When they, the applicant 
informed him that if that were the case the agreement would be void.  He 
hereafter changed directions to suit the wind by altering his version by 
stating there was a tender process. 
Another example being that he claimed there was only one agreement.  
This changed and it appears that there were several agreements.

[18]	The letterhead of the third respondent does not contain the words 
(Pty) Ltd. This it was submitted was done to mislead the public to believe that they were dealing with the municipality. This is compounded 
by the fact that the first respondent on its own letterhead also left out 
the words (Pty) Ltd  when it demanded payment from third parties. See 
page 72 of the papers in this application. In the letter of demand the 
following appears:
“ RE : EMAKHAZENI LOCAL MUNICIPALITY / YOURSELF”
It was contended that this was not an unwitting error as the second 
respondent is a director of the third respondent and he was aware that it 
was a private company. 

[19]	The applicant submitted that the respondents, (first, second and 
third Respondents) on their own concede that they acted unlawfully in that 
they referred to a period pre January 2012 and post January 2012. They 
contended that they acted mistakenly prior to January 2012 , although their 
intentions were  bona fide. As soon as they realized their error they rectified 
the situation. This concession was ultimately made by counsel in his 
address to the court, namely that there was a prima facie case of 
unlawfulness made 
out.

[20]	Section 8 of the Fire Brigade Services Act (see para [12], supra) 
permits the fire chief on certain occasions to do certain things. This section 
does not permit him to employ people belonging to another company as 
reserve fireman to do it’s task. As counsel for the applicant pointed out no 
one knows what training and instructions these ‘reservist’ received. More 
importantly the municipality cannot conclude a contract with a company 
without following the proper procedure which should be transparent , fair 
and equitable. Mr De Klerk initially stated that there was no tender process. 
When he was challenged that the absence of such a process would render 
the agreement ultra vires he then changed that view and suggested that 
there was a tender process which was followed. Clearly the issue of 
whether a tender process was followed or not is a factual one and  Mr De 
Klerk is not being completely honest on this score.  

[21]	It is not necessary for me to make a finding in terms of the Plascon 
Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 
(A), principle. I do not intend to repeat the principle in this judgment as it is 
familiar to all concerned. All that needs be shown by the applicant in this 
application  is that there is a prima facie case off harm or wrongdoing  been 
made out. The test in this case is a lower test than in normal application 
proceedings. Colin Prest –The Law of Practice of Interdicts at p.55 
describes a “ prima facie case” as follows:  
“ The correct meaning, it is submitted, is that an applicant is required to furnish proof 
which, if uncontradicted and believed at the trial, would establish his right. The use of 
the phrase “prima facie established though open to some doubt” indicates that more is 
required than merely to look at the allegations of the applicant but something short of 
weighing up of the probabilities of conflicting versions is required.” 

[22]	In Krog v Botes 2014 (2) SA 596 (GJ) Weiner J dealt with anti 
dissipation interdict. At para [28] the learned judge stated:
“ In my view the applicant does not need to go that far what he essentially seeks is an 
interim interdict to secure the proceeds of the sale pending the determination of the 
action, which directly involves the asset in question. It is not an interdict as envisaged 
in the Knox D’Arcy case

[23]	It is clear that the third respondent did the work of the Fire Brigade 
services on behalf of the municipality. It was not empowered to do so. By 
its own admission it erred in doing so up to 3 January 2012. The applicant 
avers that the third respondent’s conduct was also unlawful as discussed, 
supra. 

[24]	Furthermore EMFES received monies into its account which ought to 
have gone to the municipality. It created the impression to the general 
public that it was the municipality. It was submitted that EMFES was not 
generally concerned with the trucks that were parked off thereby causing a 
danger to other road users, however it was predominantly concerned with 
making a profit and was motivated by self enrichment. According to 
Manabile approximately R26 million had been paid by trucking companies 
to EMFES.    

[25]	The applicant submitted that it made out a prima facie case of 
unlawfulness on the part of the first, second and third respondents and the 
order should be confirmed because the second respondent honesty was 
suspect and that he could not be trusted. In addition two of his close 
associates, namely Manabile and Baker turned against him and  
they deposed to affidavits wherein they set out his nefarious conduct, which 
they ascribed as dishonest to say the least.

[26]	The other grounds of an interdict are that there is a reasonable 
apprehension of harm and prejudice. It was submitted that second 
respondent had changed his version on several important aspects and this 
is a clear indication of a dishonest person whose word cannot be relied 
upon. If the order is not confirmed it is suggested that the funds would be 
spirited away and the applicant and its members would suffer irreparable 
harm. The applicant contended that there was a reasonable apprehension 
that if the order was discharged the money would be dissipated. 

On the other hand if the order were to be confirmed the prejudice to 
the first and second respondents would not be insurmountable as the 
curator would control the account and the first respondent could still 
continue with its practice. Mr Arnoldi submitted that if the respondent
wanted to remove funds it would have done so ages ago. That may be so, 
however, it appear that prima facie the tide had turned against the second 
respondent in that people close to him have blown the whistle against him.

[27]	Mr Arnoldi also raised a point regarding locus standi, in that the 
applicant did not give a list of its members, notwithstanding the 
respondents asking for a list of such membership.  Mr Hopkin’s argued that 
this was a constitutional issue and that any person could bring the 
application as it was in the public interest.   

[28]	Costs: 

The applicant seeks a punitive costs order against the respondents whilst 
the first and second respondents seek a similar order against the applicant. 
The respondents submitted that the application was an abuse of the court 
and that the rule nisi should be discharged with costs. Such costs to 
include the costs of senior and junior counsel.

It is clear that the court would have to order costs in this matter. The 
question is whether this matter clamours for a punitive costs order . 

The applicant submitted that the second respondent on his own admission 
was the author of most of the affidavits. It is not rocket science to infer that 
the version of the respondents seem to have changed as a chameleon 
would change its colour as it moves along. To aggravate the issue the 
second respondent is an officer of this court.  

Over and above the contradictions regarding the issue of the tender 
process; whether there was one contract or three contract ; the affidavit of 
Mr Oscar Nkosi (pp 289 et seq) in this application is critical and damning of 
the second defendant’s veracity. I am tempted to make an order that the 
second respondent pays the costs on an attorney and client scale, as one 
would expect greater candor from an officer of the court then what has 
been displayed here.

I would leave the issue of punitive costs order for the determination of the 
Court which would hear the main action. That court would be in a better 
position to determine all the issues as my task is simply to establish 
whether the applicant has made out a preima facie case of unlawful 
conduct.    

[29]	I am of the view that the applicant has established that: -

1 .  It has made out a prima facie case of unlawful conduct on the part 
      of the 1st to 3rd respondents;

2.   the order given by Louw J should be confirmed pending the 
      finalization of the main action.

3.  the orders relating to the first respondents trust accounts are hereby 
    confirmed pending the main application  namely prayers 2 including its 
    sub paragraphs and 3 )	

4.  First and second respondents are to pay the costs of this application 
     jointly and severally on a party and party scale. The one paying the 
     other to be absolved. 

                                                     ___________________

APPEARANCES : 

For the Applicant :                     Adv K Hopkins instructed by Glyn Marais                 
                                                   Inc c/o Cilliers and Rynders Inv, Centurion  
                                            
For the first and second            Adv C Arnoldi SC assisted by Adv Du 
Respondents:                           Plessis, instructed by- 
                                                 De Klerk and Marais Inc, Pretoria.
                                             
Date of hearing:                         19 September 2014.     

Judgment delivered on:              9 October 2014