The appellant was appointed as municipal manager of the Amathole District Municipality (ADM) for a second five-year term on 16 May 2022. The ADM employees brought a review application to set aside the appointment and the employment contract. On 28 June 2022, the East London Circuit Court granted a default order setting aside the appointment, as no opposition had been filed. On 30 June 2022, the appellant and ADM launched an application for stay and rescission. The ADM later withdrew its participation and was joined as an intervening respondent. A new municipal manager was appointed on 16 March 2023. Smith J dismissed the rescission application on 20 February 2024. The appellant appealed with leave. The grounds of review included: the appellant lacked the prescribed competency levels (unit standards) required for the position; he failed to comply with statutory responsibilities during his first term (evidenced by declining audit outcomes); he unlawfully deviated from procurement requirements; and the appointment procedure was fundamentally flawed (no report was circulated before the council meeting, no formal vote was taken, and material information about his fitness was not placed before the council).
1. The application for condonation for the late filing of volume 9 of the appeal record, and for the dispensing of security for costs, is granted. 2. The appellant is to pay the costs of the application on scale A. 3. The appeal is dismissed with costs, including the costs of two counsel where so employed, on scale C.
The binding legal principles are: (1) Under Uniform Rule 42(1)(a), even where a default judgment was erroneously granted, a court retains a discretion to refuse rescission. (2) This discretion must be exercised judicially having regard to "considerations of fairness and justice" and "all the facts and circumstances of the particular case" (per Zuma). (3) The merits of the underlying dispute may properly be considered as part of the circumstances relevant to the exercise of discretion under Rule 42(1)(a). (4) Where the available evidence demonstrates that opposition to the underlying application would not succeed, and granting rescission would be futile and have undesirable consequences (including waste of resources and undermining good governance), a court may refuse rescission in the interests of justice. (5) In review applications brought under Rule 53, the time for filing a notice of intention to oppose only begins to run after the applicant has filed any amended notice of motion and supplementary affidavit following receipt of the record. (6) A matter is not moot merely because a municipality has appointed a new municipal manager where there remains a live dispute about the lawfulness of a prior appointment.
The court observed that proposed amendments to Rule 49(13) by the Rules Board suggest recognition that the current rule on security for costs may conflict with s 34 of the Constitution. The court commented that while delay on the part of an applicant may be a relevant factor in exercising discretion under Rule 42(1)(a), it was not significant in this case given the various factors contributing to delay beyond the appellant's control. The court expressed the view that the distinction between Rule 42(1)(a) and common law rescission applications (particularly regarding whether a bona fide defence must be shown) may have been affected by the broad language in Zuma regarding the factors relevant to the exercise of discretion. The court suggested that where leave to appeal is granted by a judge, the question whether "the court" empowered to dispense with security under Rule 49(13) includes a full court of the same division hearing the appeal remains open to debate, though the court exercised inherent jurisdiction to dispense with security in this case in the interests of justice.
This case clarifies the approach to the exercise of discretion in rescission applications under Uniform Rule 42(1)(a) following the Constitutional Court's judgment in Zuma v Secretary of the Judicial Commission. It confirms that even where a default judgment was erroneously granted, a court may refuse rescission in the exercise of its discretion. Importantly, it establishes that the merits of the underlying case may be considered as part of "all the facts and circumstances" in exercising the discretion, particularly where granting rescission would be futile or have undesirable consequences. The judgment also addresses important procedural issues in local government law, confirming that strict compliance with appointment procedures for municipal managers is required, including the requirement for a formal vote by council. It reinforces the public interest in good governance and lawful appointments in municipalities. The judgment also contributes to the jurisprudence on security for costs and the jurisdiction of appeal courts to dispense with such security.