Datasets:

dsfsi

/

zasca-sum

like 0

Follow

Data Science for Social Impact 33

3417

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 636/2019 In the matter between: CHRISTIAAN JACOBUS VAN MEYEREN APPELLANT and GERALD CLOETE RESPONDENT Neutral citation: Van Meyeren v Cloete (636/2019) [2020] ZASCA 100 (11 September 2020) Coram: CACHALIA, WALLIS and MOCUMIE JJA and LEDWABA and WEINER AJJA Heard: 2 September 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 09h45 on 11 September 2020. Summary: Actio de pauperie – defences – whether to be extended to include negligence of a third party not in control of animal – no extension justified. ORDER On appeal from: Eastern Cape Division of the High Court, Port Elizabeth (Lowe J, sitting as court of first instance): The appeal is dismissed with costs, such costs to include the costs consequent upon the employment of two counsel. JUDGMENT Wallis JA (Cachalia and Mocumie JJA and Ledwaba and Weiner AJJA concurring) [1] At about 3.00 pm on Saturday, 18 February 2017, the respondent, Mr Cloete, an itinerant gardener and refuse collector, was on his way to the shops pulling the trolley in which he collects refuse down Rowan Street in Rowallan Park, Port Elizabeth, after completing a job. For no reason, and without any warning, he was attacked by three dogs owned by the appellant, Mr van Meyeren. The dogs were cross-breeds, with a significant component of pit bull terrier. They savaged Mr Cloete to such an extent that neighbours who came to the scene thought he was dead. He survived, but his left arm was amputated as a result of his injuries. The present action is to recover damages from Mr van Meyeren. [2] Mr Cloete’s claim was pleaded under the actio de pauperie and, in the alternative, in negligence. The parties agreed to separate the issue of liability from quantum and the trial was heard before Lowe J in the Eastern Cape Division of the High Court, Port Elizabeth. He upheld Mr Cloete’s claim and granted a declaratory order and costs. Leave to appeal was refused but granted on application to this court. The facts [3] These can be taken largely from the judge's summary. Mr Cloete was in Rowan Street minding his own business. As he passed Mr van Meyeren’s home he heard the sound of the dogs behind him and was then attacked and pulled to the ground. He had done nothing whatsoever to cause or provoke the attack and was lawfully present at the place where it occurred. He was unable to ward off the dogs, but a passer- by, Mr van Schalkwyk, fought the dogs off him and chased them away, while help was sent for. Ultimately the dogs also attacked Mr van Schalkwyk. They were finally chased away by the police firing shots at them. [4] The three dogs rejoiced in the names Mischka, Zeus and Coco. Mischka was the mother of the other two, but all three were fully grown. Mr van Meyeren described them as housedogs that had the run of his home and garden and at night slept on his son’s bed. The garden could be accessed from the street through the front door of the house, a gate adjacent to the garages and, potentially at least, another gate adjacent and at right angles to the front door. It was through the latter gate that the dogs gained access to Rowan Street before the attack. Photographs taken after the attack show the one half of the gate open. [5] Mr van Meyeren had been away from home in Sunday’s River since the previous Wednesday and Mrs van Meyeren had gone to a family party. Their son and his girlfriend, Ms Meyer, were there on Saturday morning, but were out at the time, Ms Meyer having been the last to leave shortly before two in the afternoon to attend the same party as Mrs van Meyeren. [6] Mr and Mrs van Meyeren testified that the gate through which the dogs escaped was customarily kept closed and locked with two padlocks. Mrs van Meyeren said that, if her husband needed to open it, he would simply lift it off its hinges. Be that as it may, the photographs taken on the day of the incident showed that the one half of the gate (the left hand side when viewed from inside the property) was open, while the right hand half appeared to be shut and closed by a bolt located on the pillar of the central frame and fastened into a socket in the ground. None of these photographs showed any padlocks or other fastenings for the gates. [7] A close-up photograph, said by Mr van Meyeren to have been taken on the following Monday, showed the lower half of a gate with a bolt held in place by two heavily rusted padlocks. The shackle of one of these was bent inwards so that it could not close and the other one apparently did not lock, although the reason for this was not explained. It could be shut, but could simply be pulled open. Both locks were open in the photograph. The gate was constructed from unpainted circular tubular steel, with a single bolt on the left hand side when looking outwards from the inside of the property. The bolt had a long elliptical shackle at the top that fitted over an eye attached to the central gate post on the right hand side of the gate. Like the padlocks, both the shackle and the eye were heavily rusted. The padlocks were hooked through the eye. The indication was that the bolt fitted into a socket in the ground. A tubular steel bar crossed the gate about half way up roughly level with the bolt. The one vertical bar shown in the lower section of the gate was covered with chicken wire, but neither it nor the chicken wire extended above the cross bar. [8] Mr van Meyeren’s photograph was difficult to reconcile with the photographs on the day of the incident. None of the features appearing from his photograph were visible on the photographs taken on the Saturday, although counsel said he could see them on his copy of the photographs. Even the bolt holding the one half of the gate closed in the Saturday photograph appeared to be in the reverse position to that in Mr van Meyeren’s photograph. A more careful exploration of the factual position in regard to the gates and padlocks should have been undertaken at the trial in order to resolve these issues. [9] There are other difficulties with the suggestion that the padlocks shown in Mr van Meyeren’s photographs were in position, locked and holding the gates closed when he and his wife left the property on the Wednesday and Friday respectively before this incident. The shackle of the one padlock was so bent that it could not fit into the locking hole of the padlock. It is difficult to conceive of how any interference with it could have left it in that situation. Mr van Meyeren was asked how this could have happened and said he did not know. The extent of the corrosion and rust on the shackle suggested that it had been in that condition for some time. As to the other padlock there was no explanation for it not remaining locked when closed. It too was extensively rusted and corroded and did not appear to have been closed for some time. But, if it could close, there was no explanation for it not remaining closed. [10] All this bore upon the acceptability of Mr van Meyeren’s explanation of how the dogs came to escape from the property through gates that were securely locked. The explanation was entirely a matter of speculation. Its only evidential base was the claim by him and his wife that the gate was locked with these two padlocks when they left the property, although they did not say that they had checked the two padlocks. Based on their having been closed and locked, Mr van Meyeren said that an unknown intruder must have attempted to gain access to the property via the gates and in doing so damaged the two padlocks in the manner shown. In turn this enabled the dogs to escape, either because the gate was left open or because it enabled the dogs to open it. [11] How a potential intruder could have done this through the chicken wire and without attracting the attention of the dogs, which were not afraid to be aggressive as subsequent events were to prove, is a mystery. Ms Meyer said in her evidence that she saw the dogs there as she left the house. Why would they not have confronted an intruder? Why would the intruder force open these gates which did not lead into the house, instead of the front door? Ms Meyer said that the front door was ‘broken open’ when she arrived home, but in the photographs the front door is shown closed and apparently undamaged. Having forced open the gates, why did the intruder not carry on inside instead of disappearing? Had the intruder taken fright because of the dogs, one would have expected either that the dogs would have attacked the intruder, or that someone would have seen them fleeing the scene. Mr Cloete said that he did not see anyone else walking in the street. Nor did he hear anything unusual. Other than an endeavour to suggest that he was intoxicated at the time this was not challenged. If the gates were opened as a result of some endeavour by an unidentified person to intrude it was remarkable that this occurred without the dogs being alerted and without anyone seeing the intruder. [12] The intruder explanation also posed difficulties with the time line of events. Ms Meyer left the property at about 2.00 pm and the incident occurred at about 3.00 pm. During the intervening period a neighbour, Mr Visser, from 39 Rowan Street, went to borrow a tool from Mr van Meyeren at 28 Rowan Street and observed that the gates were closed. He knocked on the front door, but received no response. There was no suggestion that as he crossed the road from his own house a possible intruder was seen by him leaving the vicinity. When he discovered that Mr van Meyeren was not home he went back down the road to his own home and spoke to his father. He then came out again and went to the home of another witness Mrs van der Merwe who lived at 41 Rowan Street. There he obtained the tool that he was seeking and returned home. As he started work on his car he heard a commotion in the street and went to investigate. He found Mr Cloete lying injured in the road. Other neighbours had come out to see what caused the commotion. The three dogs were further down the road. At most a few minutes had passed since he was in the road. However, there was no suggestion that anyone who might have been the supposed intruder was about and when he had gone to the Van Meyeren home the gate was still shut. No neighbour came forward to say they had seen some other person in the street. How then did an intruder manage to open the gate, or least break both padlocks, within what was at most a few minutes and then vanish? If there was an intruder he appears to have been as elusive as the Scarlet Pimpernel.1 [12] Notwithstanding these difficulties and the fact that neither Mr van Meyeren nor his wife were impressive witnesses, the judge said that he was unable on the probabilities to reject the evidence that the gates had been locked and that they must have been broken open by an intruder. In doing so he was particularly influenced by his view that, given crime statistics in urban areas, gates accessing a road are usually kept locked. This was not something of which he could properly take judicial notice. Nor was his view supported by the fact that three large and potentially dangerous dogs were being kept from the road by the very same gates. The fact that there were large and potentially dangerous dogs roaming the garden could equally well conduce to a lack of concern to lock the gates in the belief that the dogs would protect against intruders. [13] The approach to this unsatisfactory and speculative evidence was incorrect. It overlooked the fact that the onus of proof rested on Mr van Meyeren. There is no obligation on a court to accept an improbable explanation of events merely because no other positive explanation is proffered, or the alternative seems to the judge even less probable.2 There were at least two possibilities. The one was that the 1 Baroness Orczy The Scarlet Pimpernel Chapter 12. 2 Rhesa Shipping Co SA v Edmunds (The Popi M) [1985] 2 All ER 712 (HL). In that case a ship sank in calm waters and fair weather. At the trial two alternative explanations were proffered for this, namely, that it had struck a submarine object, or that its plates ruptured due to prolonged structural wear and tear. The judge regarded the former as inherently improbable and the latter as virtually impossible and found for the plaintiff. On appeal the House of Lords pointed out that there is no obligation on a court faced with two improbable versions to select the least improbable. It is always open to it to hold that the onus of proof has not been discharged. It rejected the notion that the court must follow Sherlock Holmes’ dictum from The Sign of Four by Sir Arthur Conan Doyle that ‘when you have eliminated the impossible, whatever remains, however improbable, must be the truth.’ The issue is not which of gates were insufficiently secured to keep the dogs inside the Van Meyeren property. The other was the Van Meyerens’ explanation that there must have been an intruder. The fact that the judge did not feel able to reject their evidence did not mean that he was obliged to accept it. The issue was whether on a balance of probabilities theirs was the only explanation for the dogs escaping. Unless that conclusion could be reached Mr van Meyeren did not discharge the onus of proof and the defence should have failed. [14] Mr van der Linde SC, who appeared in this court for Mr Cloete, but not at the trial, said he was arguing the appeal on the basis of the judge's factual findings. It is accordingly necessary, notwithstanding my qualms about the premise of the hypothetical intruder, to determine whether the judge was correct that these did not constitute a defence to the pauperien action. The actio de pauperie [15] I trust legal historians will forgive me for not commencing the discussion by going back to the roots of the actio de pauperie in the Law of the Twelve Tables and the relevant passages in the Digest of Justinian. I refrain from doing so not simply because this has become overworked terrain,3 but because the task was undertaken by this court in O’Callaghan NO v Chaplin,4 where Innes CJ (with whom De Villiers JA several possibilities is the least unlikely, but whether any one of them is on a balance of probabilities the correct one. Datec Electonics Holdings Ltd and Others v United Parcel Services Ltd [2007] UKHL 23; [2007] 2 Lloyd's Rep 114 (HL) paras 48 and 50. 3 Loriza Brahman and Another v Dippenaar 2002 (2) SA 477 (SCA) (Loriza Brahman) para 12. 4 O’Callaghan NO v Chaplin 1927 AD 310. concurred) in his customary lucid fashion, summarised the law as follows:5 ‘By our law, therefore, the owner of a dog, that attacks a person who was lawfully at the place where he was injured, and who neither provoked the attack nor by his negligence contributed to his own injury, is liable, as owner, to make good the resulting damage. The same principle applies to injuries inflicted by a dog on another animal, and to injuries inflicted by any animals falling within the operation of the pauperien law. It is confined of course to cases where liability is based upon ownership alone. Actions may be founded under appropriate circumstances on culpa, and they will be governed by the ordinary rules regulating Aquilian procedure. The conclusion is satisfactory for two reasons especially. In the first place it provides a remedy in cases where otherwise persons injured would be remediless. Instances must occur where a dog, a bull or other domesticated animal inflicts damage under circumstances which make it impossible to bring home negligence to the owner. Yet of two such persons it is right that the owner, and not the innocent sufferer, should bear the loss. And in the second place the adoption of culpa as the sole basis of liability would inevitably lead us towards the scienter test . . . which it is common cause is not the test which our law applies in cases of this kind.’ [16] The reference to the scienter test was a reference to the doctrine of the English common law that strict liability follows the owner of an animal if the owner was aware of the animal’s proclivity to engage in the conduct that caused the harm. Thus if an owner was aware of their dog’s tendency to bite people, the owner would be liable if the dog bit someone. In the result it is sometimes referred to as 'the one free bite' rule. If the owner was aware that the dog has a tendency to chase cyclists and the dog chases a cyclist causing them to fall off their bicycle and injure 5 O’Callaghan NO v Chaplin at 329-330. themselves, the owner will be liable.6 In South Africa there is no such requirement and strict liability is imposed on the owner of the animal. [17] In a clear statement of the policy justification for the continued existence of the pauperien action, notwithstanding that the original provision of the Roman Law that an owner could discharge their liability under the action by surrendering the offending animal to the injured party7 had fallen into desuetude, Kotzé JA (with whom Stratford AJA concurred) arrived at the same conclusion as the Chief Justice, and said:8 ‘It is satisfactory to find that the actio de pauperie still forms part of our law . . . I think the conclusion is a sound one and just, for if a man chooses to keep an animal, and injury or damage is caused by it to an innocent person, he must make adequate compensation. The owner of the animal and not the person injured must bear the loss.’ [18] Three years later De Villiers JA, giving the judgment in SAR & H v Edwards9 said: ‘The action lies against the owner in respect of harm (pauperies) done by domesticated animals . . . if the animal does damage from inward excitement or, as it is also called, from vice, it is said to act contra naturam sui generis; its behaviour is not considered such as is usual with a well-behaved animal of the kind.’ The endeavour in Loriza Brahman to persuade this court to abolish the pauperien action failed. 6 Gallant v Slootweg 2014 BCSC 1579. For a full treatment of the doctrine see the working paper of the Law Reform Commission, Ireland on Civil Liability for Animals, chapter 2, available at https://publications.lawreform.ie/Portal/External/en-GB/RecordView/Index/30539. The rule was sufficiently problematic that various statutes were passed in Ireland, England and Scotland in the 1800's to impose liability apart from the common law. See Le Roux and others v Fick [1879] 9 Buch 29 (Le Roux v Fick) at 34-35. 7 This was called noxal surrender. 8 O’Callaghan NO v Chaplin at 365-366. 9 South African Railways and Harbours v Edwards 1930 AD 3 at 9-10. [19] An element of anthropomorphism underlies the pauperien action. It attributes to domesticated animals the self-constraints that are generally associated with human beings and attaches strict liability to the owner on the basis of the animal having acted from internal vice. As De Villiers JA said: ‘Dating back as this form of remedy does to the most primitive times, the idea underlying the actio de pauperie, an idea which is still at the root of the action was to render the owner liable only in cases where so to speak the fault lay with the animal. In other words for the owner to be liable, there must be something equivalent to culpa in the conduct of the animal.’ This anthropomorphism is reflected in the concept of the animal acting contra naturam sui generis. That is well described as follows:10 ‘The contra naturam concept seems, in fact, to have come to connote ferocious conduct contrary to the gentle behaviour normally expected of domestic animals. This imports an objective standard suited to humans. It is far more refined than behaviour literally natural to that species of animal. It is what Voet, 9.1.4, means when he speaks of animalia mansueta feritatem assumunt.’ If the conduct of the animal that caused the harm was due to its being frightened, or in pain, or provoked and it acted as any animal would in the circumstances, then it has not acted contra naturam and the owner is not liable.11 The onus of establishing this rests on the owner of the animal. 12 10 P M A Hunt 'Bad Dogs' (1962) 79 SALJ 326 at 328 quoted in Solomon and Another NNO v De Waal 1972 (1) SA 575 (A) at 582A-C. 11 In Loriza Brahman para 19 Olivier JA expressed this as follows: ‘As die skadestigtende optrede egter veroorsaak is omdat die dier skrikgemaak is, of leed of pyn aangedoen is of geprovokeer is, dan is die optrede nie contra naturam nie, maar juis ooreenkomstig die aard van 'n dier omdat alle diere so sal optree; en is daar geen aanspreeklikheid nie.’ ‘If the harm-causing occurrence was truly caused because the animal was frightened, or is suffering or in pain, or was provoked, then the occurrence was not contra naturam, but accords with the way in which all animals would behave and there is no liability.’(My translation.) See by way of example Cowell v Friedman & Co 5 HCG 22. 12 Da Silva v Coetzee 1970 (3) SA 603 (T) at 604A-B approved in Loriza Brahman para 20. [20] In O'Callaghan NO v Chaplin two circumstances were identified in which the owner would not be liable. The first was where the injured party was in a place where they were not entitled to be. The obvious example would be that of a housebreaker bitten by a watch dog. Another would be where the animal was chained to restrain it and the injured party ventured within reach. However, in general, if the harm occurred in a public place, such as a public street, the owner would be liable.13 The second exception was the relatively obvious one where the injured party or a third party provoked the attack by goading or provoking the animal. The application of these defences where children are involved may create problems, for example, where a child enters a neighbouring garden to retrieve a lost ball, or where one child teases a dog and the dog bites another child. I would also be hesitant to say that the homeowner was free from liability because the intruder was in the wrong place, if a watchdog savaged the intruder in the way these three dogs savaged Mr Cloete. However, these problems do not arise in this case and can be left for consideration when such a case arises. The exception to pauperien liability in Lever v Purdy [21] That brief outline of the pauperien action in South African law brings me to the decision of this court in Lever v Purdy,14 a dog bite case, where a third exception was recognised to the strict liability of the owner of a domestic animal. It is best to start with its facts. Mr Lever was the owner of a dog that bit Mr Purdy. At the time of the incident Mr Lever was overseas and Mr Cohen was living in his home and looking after Mr Lever's admittedly vicious dog. At Mr Cohen’s request Mr Purdy came to the house to adjust a television set. He was told about the dog and asked 13 Le Roux v Fick; Solomon and Another NNO v De Waal ibid at 582C-F. 14 Lever v Purdy 1993 (3) SA 17 (A). Mr Cohen to lock it away before his arrival. Mr Cohen did not do so. When Mr Purdy reached the house at between 6:30 pm and 7:00 pm he walked up the path, put his hand on the gate and shouted for Mr Cohen. At this point the dog suddenly appeared and bit him, pulling him through the gate. When Mr Cohen emerged, he took control of the dog. After Mr Lever’s return Mr Purdy sued him for damages. [22] The question was whether Mr Lever could escape liability on the grounds of Mr Cohen’s negligence, even though he had not provoked the dog to attack Mr Purdy.15 The court said that he could. In this case Mr van Meyeren contended that the defence recognised in Lever v Purdy should be extended to exempt the owner from liability for harm caused by the animal where the harm would not have occurred but for the negligent conduct of a third party, irrespective of whether the third party had the custody or control of the animal. That requires in the first instance an analysis of what was decided in Lever v Purdy. There were two judgments, one by Joubert ACJ and another by Kumleben JA, both reaching the same conclusion. I will analyse each in turn. [23] Joubert ACJ, in the majority judgment, considered the Roman Law of pauperien liability as contained in Justinian's Digest. Referring to various texts in D 9.1 he dealt with those instances in which the culpable conduct of a third party caused a domesticated animal to act contrary to the nature of its class in injuring the victim, with the result that the animal's owner was exempted from pauperien liability. These he divided into two categories. The first category consisted of cases where the culpable conduct of an outsider by way of some positive act, such as, 15 Lever v Purdy at 20H-I. provoking, striking, wounding, scaring or annoying the animal, caused the animal to inflict the injury upon the victim.16 The second category related to those instances where a third party, in charge or control of the animal, by negligent conduct failed to prevent the animal from causing harm to the victim.17 The difference between these two categories was this. In the first category the positive act of the third party caused the animal to injure the victim. In the second the third party's negligent failure to prevent the animal from injuring the victim created the opportunity for the animal to injure the victim, without causing it to do so. In both cases the conduct of the third party attracted liability under the Aquilian action and exonerated the owner from pauperien liability. After a survey of the Roman-Dutch writers, Joubert ACJ concluded that their law was the same as that set out in the Digest. As Mr Cohen's conduct fell in the second category, Mr Lever was not liable to compensate Mr Purdy for his injuries. [24] Kumleben JA adopted a different approach. He agreed that in the first category of cases, where the third party incited or provoked the animal to behave contra naturam sui generis by striking, wounding, scaring or annoying it, the conduct of the third party caused the harm and pauperien liability was excluded. He identified what he described as a 'wider exception'18 whether fault on the part of a third party causatively contributing to the injury caused by the animal would also constitute a defence. He illustrated this with the example of a visitor leaving a gate open thereby enabling a vicious dog to escape and attack some innocent 16 Lever v Purdy at 21F-H. 17 Lever v Purdy at 21H-24B. 18 Lever v Purdy at 26F-I. passer-by, suggesting that there was some authority in support of such a defence.19 However, he added that this question did not need to be decided as the only question in the case was whether the negligence of a person to whom the owner had entrusted the custody and control of an animal relieved the owner of pauperien liability. [25] Neither judgment cited any clear authority in favour of the existence of the exception. The closest to it was D 9.1.1.5 (a text by Ulpian), which in Watson's translation reads: ‘Take the case of a dog which, while being taken out on a lead by someone, breaks loose on account of its wildness and does some harm to someone else: If it could have been better restrained by someone else or if it should never have been taken to that particular place, this action will not lie and the person who had the dog on the lead will be liable.’20 Joubert ACJ's judgment in Lever v Purdy was based solely on his reading of these texts. In his view they showed that a person having the custody or control of an animal, who through negligence failed to control it resulting in it injuring the victim, was liable under the Aquilian action and this constituted a defence exonerating the owner from pauperien liability.21 19 Van Leeuwen Censura Forensis 1.5.13.1; Le Roux and Others v Fick op cit fn 15, Lawsa Vol 1, para 378. 20 Joubert ACJ also relied on Johannes Voet Commentarius ad Pandectas (Gane's translation) 9.1.6, which is almost verbatim the same, namely: ‘Then again, if a dog, when he was being led by someone, escaped through his own rough temper and did damage to somebody, or killed another person's sheep, hens or geese, and if he could have been more firmly held in by another or ought not to have been led over such a spot, this action on pauperies falls away but there is room for a beneficial Aquilian action against the leader.’ (Emphasis by Joubert ACJ). No regard appears to have been had to this in the case of Carelse v City of Cape Town (Eksteen and another as third parties) [2019] 2 All SA 125 (WCC), where the owner of the dog was held liable, even though the dog had been in the care of his son at the time. 21 Lever v Purdy at 25I-26A. [26] Kumleben JA relied on the same authority as recognising the exception. He accepted that a feature of pauperien strict liability was that the owner was the source of risk to the injured party. However, the main considerations influencing his conclusion that the exception existed appear from the following passage:22 ‘It must also be borne in mind that liability without fault runs counter to fundamental legal precept, though in certain instances considerations of social policy no doubt justify its existence. Where the owner of an animal has taken care to entrust it to another as its custodian, the former has ex hypothesi no means of exercising control over it. Competing interests are plainly at stake. Should the owner in such a case be held liable in the absence of any fault on his part or should the injured person be restricted to an action against the negligent custodian? Dictates of fairness and justice, to my mind, favour the owner and warrant the recognition of the exception in issue.’ A wider exception? [27] Apart from the passing reference to the 'wider exception' at the outset of Kumleben JA's judgment, nothing in Lever v Purdy provides any support for the wider exception for which Mr van Meyeren contended. Counsel referred us to various passages in Joubert ACJ's judgment, but they all fell to be considered in the specific context, reiterated several times, that he was concerned with a third party in charge or control of the animal.23 They cannot be taken as shedding any light on the present situation. [28] The case of Le Roux v Fick hardly takes the matter further. The owner of a dog was proceeding in a cart along a public road and his dog was walking along the road with him. Some ostriches were grazing on a 22 Lever v Purdy at 29G-I. 23 See Lever v Purdy at 20H-I, 21F-I, 23H-J; 24B-C and E-F; 25D-G. commonage beside the road and the dog, together with another one that had attached itself to the party, chased the birds, causing one to fall into a sluit and injure itself so badly that it died. After a full consideration of the authorities Smith J said: 24 ‘… an action de pauperie lay in all cases of damage caused by animals when the damage was not brought about through the fault of the party using the animal or of some third party’ (My emphasis.) Those few words provide but slender support for the proposition that fault on the part of a third party in circumstances such as the present case exonerates the owner from liability. [29] The passage from Van Leeuwen is likewise of little help. It reads:25 ‘I said aut culpa hominis (or negligence on the part of a human being) because if there is negligence on the part of the owner or of anyone else, this action lapses and a suit is brought under the Lex Aquilia, for example if a mule does damage because of the unevenness of the road, or the negligence of the muleteer, or because it was too heavily loaded or was provoked by someone, or if the animal acted in some way on account of human inexperience or negligence or when aroused by pain.’ (My emphasis.) The example of the muleteer is clearly not an example of the mule acting contra naturam sui generis. Nor is the example of the animal being aroused by pain.26 Provocation by the victim or a third party has always been recognised as providing a defence. The reference to the animal acting in a way caused by human inexperience or negligence is too vague and general to be helpful. 24 Le Roux v Fick at 37. 25 Simon van Leeuwen, Censura Forensis 1.5.13.3 (translated by Margaret Hewett, 1991). There is no corresponding passage in the discussion of pauperien liability in his Commentaries on Roman-Dutch Law. 26 See Cowell v Friedman & Co, op cit, fn 13. [30] The current edition of Lawsa is inconsistent on the subject. When dealing generally with the defences available to the owner of an animal sued under the action de pauperie it says that culpable conduct on the part of a third party avoids liability. However, in the section dealing with fault on the part of a third party it goes no further than Lever v Purdy, without suggesting that the exception in that case should be extended.27 In the first edition cited by Kumleben J the author gave two examples of negligent conduct by a third party exonerating the owner from liability. The one was where the third party provoked or injured the animal and the other where a person having control of the animal was negligent. Neither supported an exception from liability extending any further than that recognised in Lever v Purdy. [31] At best it seems to me that these rather cryptic references in and to the old writers on the Roman-Dutch law provide no clear authority in favour of extending an owner's exemption from liability for harm caused by their animal to instances where a third party's negligence is involved without the third party having the custody or control of the animal. Voet28 mentions one example that appears to be inconsistent with the extension. He said that where A is persuaded by B's fraud to approach a horse that B knows is apt to kick, and A is kicked even though B did not provoke the horse, A's action is correctly brought against the owner on pauperies, although B may also be sued. But overall any development of the principles governing pauperien liability and the defences available to an owner is best sought in modern principles and circumstances, rather than 27 LAWSA Vol 1 (3 ed, 2013) per C G van der Merwe and M A Rabie, paras 407 and 410. The first of these paragraphs was cited in the heads of argument, but not the second. 28 Voet 9.1.5, Gane's translation, Vol 2, pp 539-540. obscure references to ambiguous authorities drawn from a different era in a very different society. [32] Mr van Meyeren wished us to develop the common law by extending the exception to liability under the pauperien action recognised by this court in Lever v Purdy. This is a power vested in the high court, this court and the Constitutional Court by s 173 of the Constitution. It is to be exercised in accordance with the interests of justice. When exercising the power, we are enjoined by s 39(2) of the Constitution to promote the spirit, purport and objects of the Bill of Rights. Before adopting any development it is incumbent on a court to (a) determine exactly what the common law position is; (b) then consider the underlying reasons for it; and (c) enquire whether the rule offends the spirit, purport and object of the Bill of Rights and thus requires development. Furthermore, it must (d) consider precisely how the common law could be amended; and (e) take into account the wider consequences of the proposed change on that area of law.29 [33] The underlying reason for the existence of the actio de pauperie is that as between the owner of an animal and the innocent victim of harm caused by the animal, it is appropriate for the owner to bear the responsibility for that harm. Dekker, in a note to the passage from Van Leeuwen's Commentaries dealing with the actio de pauperie, said:30 ‘… there is no absurdity in obliging him to make compensation whose animal has caused the damage, or who has excited and goaded it on to the damage of another …’. 29 Mighty Solutions (Pty) Ltd t/a Orlando Service Station v Engen Petroleum Ltd and Another [2015] ZACC 34; 2016 (1) SA 621 (CC) para 38. 30 Van Leeuwen's Commentaries on Roman-Dutch Law 3.39.5 and 3.39.6 in the edition revised and edited by Decker (Kotzé's translation, 1923) Vol 2, pp 319-320 fn (c). This rationale is almost precisely the same as that of Innes CJ and Kotzé JA in O'Callaghan NO v Chaplin, namely that, in general, ownership of an animal should carry with it strict liability for any harm done by the animal. In other countries, hampered by the English common law scienter rule, that position has been enshrined in statute for nearly two centuries. [34] Counsel for Mr van Meyeren said that he did not rely on any specific provision of the Bill of Rights. He did not suggest that the existing more limited exceptions offended the spirit, purport and objects of the Bill of Rights. In that he was correct because the only relevant provisions of the Bill of Rights point in the opposite direction. They are the right to bodily integrity in s 12(2), the right to dignity in s 10 and, as the facts of this case demonstrate, the right to life in s 11. These are the rights that the actio exists to protect and it is right that we prefer to develop the actio in ways that afford protection to them. [35] Counsel submitted that given the level of crime in South Africa people are entitled to protect their persons and homes against criminals.31 That is a proposition that would be uncontroversial even were the crime level lower. He went on to submit that not all the population can afford to live in gated and secure estates, or to install state of the art alarm systems. They may be compelled to rely on their dogs to guard their homes against criminals. Thus far the submission cannot be faulted, subject to the reservation mentioned earlier as to the degree of harm that a dog may do to an intruder. Deterrence or restraint of an intruder is one thing. Killing 31 Dorland and Another v Smits 2002 (5) SA 374 (C) at 384. or seriously injuring them is another. Only in extreme circumstances is it permissible to shoot and kill an intruder in self-defence. Why then should it be permissible to keep a dog that, irrespective of the level of threat, may kill or maim them? Innes CJ spoke only of a trespasser being bitten by a watchdog.32 However, that question does not need to be answered in this case. [36] The problem arises at the next stage of the argument. These dogs did not harm an intruder in their owner's home or premises, within whatever limits may be permissible in law. They escaped from the premises and attacked an innocent passer-by. However extensive may be the right to keep dogs for protection in the home, it is irrelevant to cases where the dog causes harm outside the home. Mr van Meyeren does not dispute that the requirements of pauperien liability were satisfied. He sought to escape liability on the basis that what occurred here was not his fault. But absence of fault has never been a basis for avoiding pauperien liability. It proceeds on the basis of strict liability arising from ownership of the animal that caused the harm. Absence of fault is a ground for resisting Aquilian liability, not a claim under the actio. [37] Where the actions of the victim or third parties are held to exonerate the owner of an animal from pauperien liability, it is because those actions directly caused the incident in which the victim was harmed in circumstances where the owner could not prevent that harm from occurring. That is why provocation of the animal by the victim or a third party exonerates the owner. It is also why in Lever v Purdy the negligent 32 O’Callaghan NO v Chaplin at 329. failure by a third party to control an animal in their custody and under their control exonerated the owner. The result in that case would have been no different if Mr Lever had placed the dog in kennels for the duration of his absence. These causes are not extrinsic to the conduct that caused the harm. They are directly linked to it. An extrinsic cause such as leaving a gate open and allowing animals to escape from the owner's property has nothing to do with the behaviour of those animals once they have escaped. If they are naturally vicious or dangerous, as appears to have been the case with the dogs in this case, that merely creates a wider opportunity for that characteristic to manifest itself in harming innocent persons. [38] The assumed intruder in this case had no responsibility to Mr van Meyeren in relation to his dogs. They did nothing in relation to the dogs. They interfered with the locks on the gate thereby enabling the dogs to go into the street and attack Mr Cloete. But responsibility for the dogs had not passed from Mr van Meyeren to the intruder in the way in which it had passed from Mr Lever to Mr Cohen. It still resided squarely with him as the owner of the dogs. It was contended on his behalf that he should not be held liable, because he took appropriate steps to ensure that the dogs could not escape from the premises. [39] I repeat that stripped of everything else Mr van Meyeren's argument is nothing more than a claim that Mr Cloete's injuries were not his fault. Counsel recognised this, as he first sought to persuade us that control of the animal by the person whose negligence allowed them to escape, was not a requisite for the extended exception to operate. In my view that cannot be accepted as it is destructive of the need for there to be a direct link between the third party's conduct and the behaviour of the animal that caused the harm in order for the owner to be exonerated from liability. While the third party's conduct might be causally linked to the harm, it stands at one remove from it, in that it may be a necessary condition for the harm to occur, but the harm would not necessarily occur as a result thereof. For example, if the owner came home and rounded the dogs up before they could do any harm it would be avoided. That is not the case in the instances where a third party's conduct exonerates the owner from liability. [40] Kumleben JA laid store on the principle of our law of delict that liability goes hand in hand with fault. However, the principle is by no means universal in its application. In the field of vicarious liability the nature of the relationship between the wrongdoer and the party sought to be held liable is what determines liability. The fault of the wrongdoer for all practical purposes is treated as if it were the fault of the party being held liable. Under some statutes, especially those dealing with environmental matters, civil liability is imposed irrespective of fault.33 There are criminal statutes that impose strict liability. For nearly two hundred years in South Africa owners of animals have been held strictly liable for harm done by domesticated animals. This court has rejected the argument that this should be abolished because it was not based on fault. It would in my view be inappropriate to undermine the principle of strict liability for harm caused by domesticated animals by extending the exception in Lever v Purdy. 33 See for example s 28 of the National Environmental Management Act 107 of 1998; Section 9 of the Marine Pollution (Control and Civil Liability) Act 6 of 1981. [41] Kumleben JA also took the view that in considering the competing interests of the owner who had not been at fault and the injured party who had a claim based on negligence against the custodian of the dog, considerations of fairness and justice favoured the owner. I am unconvinced that this was a correct balancing of interests if one takes the interests of justice into account in accordance with the constitutional values already mentioned. In Lever v Purdy the injured plaintiff's claim based on negligence was worthless as it was settled without any amount being paid to Mr Purdy. Many people go on holiday and leave their homes in the care of house sitters. Those may be friends, the children of friends, students, retirees or young people seeking to supplement their income. Their financial ability to meet a claim for damages arising from the family dog biting a passer-by will probably be limited. The same is true of the dog walkers postulated by counsel, although if they are negligent the owner may be vicariously liable. By contrast the dog's owner is likely to be able to obtain insurance cover against the risk of the animal biting someone as part of a conventional household insurance policy. [42] Many people in South Africa choose to own animals for companionship and protection. That is their choice, but responsibilities follow in its wake. Whatever anthropomorphic concepts underpin pauperien liability, the reality is that animals can cause harm to people and property in various ways. When they do so and the victim of their actions is innocent of fault for the harm they have caused, the interests of justice require that as between the owner and the injured party it is the owner who should be held liable for that harm. In taking that view I find myself in the company of the majority of this court in O'Callaghan NO v Chaplin. Nothing has occurred in over ninety years since that case was decided to change the view of the interests of justice taken in that case. The endeavours to suggest that they have changed in more modern times is misplaced. If anything with the growth of urban living, the vastly increased number of pet animals, especially dogs, in our towns and cities and the opportunities for harm that they pose, that view of where the interests of justice lie has been strengthened. People are entitled to walk our streets without having to fear being attacked by dogs and, where such attacks occur, they should in most circumstances be able to look to the owner of the dog for recompense. Result [43] In the result the appeal is dismissed with costs, such costs to include those consequent upon the employment of two counsel. _________________ M J D WALLIS JUDGE OF APPEAL Appearances For appellant: D J Coetzee Instructed by: BDP Attorneys, Tyger Valley; Honey Attorneys, Bloemfontein For respondent: H J van der Linde SC (with him N Barnard) Instructed by: Lessing, Heyns, Keyter & Van der Bank Inc, Uitenhage Van Wyk & Preller Inc, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 11 September 2020 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Van Meyeren v Cloete (636/2019) [2020] ZASCA 100 (11 September 2020) The SCA today dismissed an appeal by Mr van Meyeren against a finding by the Eastern Cape Division of the High Court, Port Elizabeth that he was liable to compensate Mr Cloete for injuries suffered by him when set upon by Mr van Meyeren's three dogs in the street outside Mr van Meyeren's house in Port Elizabeth. Mr Cloete, an itinerant gardener and refuse collector, was on his way to the shops pulling his trolley, when he was attacked without any warning or reason by the dogs. His injuries were serious and resulted in the loss of his left arm. Mr van Meyeren and his family were not home at the time of the attack. The basis for the defence to the claim was that the dogs had been locked inside the property, but an intruder must have endeavoured to gain access through a locked gate, broken both padlocks fastening it and either left the gate open or in a state where the dogs could open it. The case was argued on the basis that this was in fact what had occurred. Mr Cloete's claim was based upon the legal principle dating back to the Roman Law that the owner of a domesticated animal is ordinarily held strictly liable for harm caused by that animal. The injured party does not have to prove negligence on their part. There are three recognised defences to such a claim, namely that the injured party was in a place where they had no right to be; that the animal was provoked either by the injured party or a third party; and that custody and control of the animal has passed to a third party who negligently failed to prevent the animal from causing the harm. Mr van Meyeren's argument that these defences should be extended to include any situation where the harm was caused by negligence on the part of any third party was rejected by the court. It held that constitutional norms did not justify such an extension. Where harm is caused by a domesticated animal, it is in principle appropriate that responsibility for that harm rests with the owner of the animal and not the injured party.

3499

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1327/2019 In the matter between: CHARL DANIEL WILKE NO FIRST APPELLANT THERESA WILKE NO SECOND APPELLANT T ROOS INDEPENDENT TRUSTEE (EDMS) BPK THIRD APPELLANT and GRIEKWALAND WES KORPORATIEF LTD RESPONDENT Neutral citation: Wilke NO & Others v Griekwaland Wes Korporatief Ltd (1327/2019) [2020] ZASCA 182 (23 December 2020) Coram: NAVSA, MOCUMIE, SCHIPPERS and DLODLO JJA and LEDWABA AJA Heard: 11 November 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email. It has been published on the website of the Supreme Court of Appeal and released to SAFLII. The date and time for hand-down is deemed to be 10h00 on 23 December 2020. Summary: Civil procedure – action by creditor based on acknowledgement of debt which related only to arrears – judgment in favour of debtor on basis that amount of indebtedness not established – subsequent claim by debtor and surety for cancellation of surety bond – given as security for debt – creditor claiming entitlement to security on basis of underlying original causes of debt – acknowledgment of debt reserving creditor’s rights in relation to original causes or finance agreements – whether creditor precluded by res judicata or issue estoppel – not same relief on same ground –– appeal dismissed. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Free State Division of the High Court, Bloemfontein (Daffue J sitting as court of first instance): The appeal is dismissed with costs including costs consequent upon the employment of two counsel. ________________________________________________________________ JUDGMENT ________________________________________________________________ Dlodlo JA (Navsa, Mocumie and Schippers JJA and Ledwaba AJA concurring): [1] The appellants are the trustees of Wilke Boerdery Trust (the Trust). In February 2019 they launched an application in the Free State Division of the High Court, Bloemfontein (the high court), for an order directing the respondent, Griekwaland Wes Korporatief Bpk (GWK), to cancel a surety bond registered in its favour in 2003, over two farms in Jacobsdal in the Free State Province (the surety bond). The surety bond was registered by Mr Charl Daniel Wilke (Wilke), and Henque 4335 CC (Henque) as security for goods sold and delivered, production credit granted and monies lent and advanced by GWK to them in the amounts of R 4 million (Wilke) and R 1 million (Henque), in respect of their farming operations. The Trust had bound itself to GWK as surety and co-principal debtor in a total amount of R 5 million, for the due fulfilment of the obligations by the principal debtors, Wilke and Henque. The high court (Daffue J) dismissed the application with costs and held that the Trust remained bound as surety to GWK under the surety bond. The appeal is with its leave. [2] Since August 2004, GWK extended credit to Henque and Karob Boerdery (Pty) Ltd (Karob), formerly known as CD Wilke Boerderye, pursuant to numerous credit agreements (the principal agreements). In March 2005, Wilke applied to GWK together with Henque and Karob to have the debts owing to GWK consolidated in a single account in the name of Karob. GWK approved the request on the express condition that notwithstanding the consolidation of the subject debts, all securities granted by Wilke and Henque would remain in place in securitisation of the liability to be assumed by Karob. It is common cause that Wilke, Henque and Karob were amenable to such request and condition being imposed. [3] With effect from March 2005, the debt owed to GWK by Wilke and Henque at the time were consolidated with the debt of Karob, which assumed liability for those debts to GWK. Payments thereof by Karob to GWK remained secured by special notarial bonds registered in favour of GWK by Wilke in 2000 and Henque in 2003, to secure their indebtedness to GWK, ‘pursuant to any cause whatsoever’. Thereafter, only Karob contracted with GWK. [4] In breach of numerous credit agreements and the debt consolidation, Karob failed to make payment to GWK. As at January 2006 it was in arrears in an amount of R4 831 873.05, and its total contractual indebtedness to GWK was R12, 787, 871.82. These amounts were recorded in an acknowledgement of debt (AOD) which Wilke executed on behalf of Karob on 26 January 2006. In terms of the AOD, Karob undertook to pay the arrears of R4 831 873.05 to GWK as follows: equal monthly instalments of R300, 000.00 from January to December 2006, and a payment of R1, 500, 000.00 on or before 31 August 2006 from the proceeds of Karob’s summer crop harvest. Wilke bound himself as surety and co-principal debtor for the due and punctual performance of Karob’s obligations under the AOD. An appendix to the AOD recorded the manner of calculation of the aggregate amount alleged to be outstanding, with reference to 21 underlying credit agreements that were extant at the time of the signing thereof. [5] The AOD did not novate GWK’s prior principal claim against Karob. Clause 11.1 reads (my translation): ‘The parties record that this acknowledgement of debt is not a novation of the creditor’s original claim against the debtor, that it does not constitute a waiver of any of the rights of the creditor, including its right, without notice, upon the original failure to comply with the terms and conditions of this acknowledgement of debt, in its sole discretion to institute legal proceedings in terms of the acknowledgement of debt or the original cause of action.’1 The AOD also contained an acceleration clause: ‘If the debtor fails to make any payment in terms of this acknowledgement of debt on the payment date, the creditor, in its sole discretion, shall be entitled to: . . . recover the full balance of the principal debt and finance costs outstanding on the date of the breach or failure, without it being necessary for the creditor to inform the debtor of this.’2 [6] Karob however breached its payment obligations under the principal agreements, the debt consolidation and the AOD. By 10 April 2007 it was in arrears in the sum R5 025 458.37. Consequently, in a letter of demand dated 10 April 2007, GWK invoked the acceleration clause in the AOD and claimed payment from Karob in the sum of R11 655 499.84 before 24 April 2007. Of this amount, R4 226 302.45 constituted the debt owed to GWK by Henque, which Karob had assumed in terms of the debt consolidation. Thereafter, Karob made payments 1 Clause 11.1 of the AOD reads: ‘Die partye plaas op rekord dat hierdie skuldbewys nie ’n novasie van die skuldeiser se oorspronklike eis teen die skuldenaar is nie, dat dit nie afstandoening van enige van die regte van die skuldeiser insluitende sy reg om sonder kennisgewing met die oorspronklike versuim om die bepaling en voorwaardes van hierdie skuldbewys na te kom sal die skuldeiser geregtig wees om in sy uitsluitlike diskresie geregtelike stappe in te stel kragtens die skuldbewys of die oorspronklike skuldoorsaak’. 2 Clause 5 of the AOD reads: ‘5. Indien die skuldenaar nalaat om enige betaling ingevolge hierdie skuldbewys op betaaldatum te maak, sal die skuldeiser, in sy uitsluitlike diskresie, geregtig wees om: 5.1.1 . . . 5.1.2 die volle saldo van die hoofskuld en finansieringskoste uitstaande op die datum van verbreking of versuim te verhaal sonder dat dit nodig is dat die skuldeiser die skuldernaar hieromtrent in kennis stel;’ and credits were passed on its outstanding indebtedness, so that by 1 July 2009 it owed GWK an amount of R 7 001 793.90. [7] On 11 September 2009 GWK issued a provisional sentence summons in the high court against Karob and Wilke for payment of the sum of R 7 001 793.90, based entirely on the AOD. On 19 September 2009 the court granted judgment against Karob and Wilke, jointly and severally, in an amount of R1 917 165.80, together with interest. The order provided, inter alia (my translation): ‘2. This order is without prejudice to any rights which the plaintiff might have to recover further amounts in terms of the present acknowledgement of debt in these proceedings and in accordance with paragraph 3 hereof. 3. Regarding the remainder of the plaintiff’s claim in terms of the acknowledgement of debt, it is ordered that the provisional sentence summons shall remain as a simple summons, it is deemed that an appearance by the defendants has been entered and that the proceedings will take place in accordance with the rules of Court.’3 [8] On 5 July 2010 GWK delivered its declaration in respect of the action. Where appropriate, I refer to this claim as ‘the 2009 action’. Karob was finally deregistered on 16 July 2010 for want of filing its annual returns. On 8 September 2010, Wilke and Karob (despite the deregistered status of Karob), delivered their plea. Further payments were received by GWK in the amount of R3 million and R435, 690.77 on September 2010 and 21 April 2011, respectively. The matter proceeded to trial. On 13 August 2015, the high court (Kruger J) handed down judgment and dismissed GWK’s action, essentially on the basis that GWK had failed to prove the arrear amounts owed in terms of the AOD. 3 The order read: 2. Hierdie bevel is sonder benadeling van enige regte wat die Eiser mag hê om verdere bedrae ingevolge die onderhawige skuldbewys te verhaal in hierdie verrigtinge en wel ooreenkomstig paragraaf 3 hiervan. 3. Wat betref die restant van die Eiser se vordering ingevolge skuldbewys word beveel dat die voorlopige vonnis dagvaarding bly staan as enkelvoudige dagvaarding dat geag word dat verskyning deur die Verweerders aangeteken is en dat die verrigtinge verder ooreenkomstig die hoofreëls geskied.’ [9] Kruger J’s findings were as follows. The form and content of the AOD established that it dealt only with payment of the arrears. The AOD did not refer to payment in instalments (‘afbetalingspaaiemente’) for the full principal debt and did not contain an interest rate and was therefore unusual. It referred to the different interest rates in the various (underlying) contracts. Failure to pay in terms of the AOD meant that GWK was entitled to claim the full outstanding amounts owed to it in terms of the underlying contracts referred to in clause 11 of the AOD. (1/96/22). Ultimately, GWK failed to establish the applicable rate of interest and the amount owed by the Trust in terms of the AOD. [10] GWK was granted leave to appeal to a full court of the high court. The full court (Moloi and Reinders JJ and Zietsman AJ) held that GWK had decided to institute legal proceedings in terms of the AOD and not the original causes of action or accounts referred to in annexure A to the AOD. Had it instituted action in terms of the latter causes of action, the full court found, there could have been no doubt about what interest could be charged, on what account from what date, and whether or not interest could be capitalised. The full court however, concluded that Kruger J was correct to hold that the amount of indebtedness in terms of the AOD had not been established. The full court noted that although Kruger J had dismissed GWK’s claim with costs, the proper order ought to have been one of absolution from the instance. It did not consider that to be a sufficient basis to interfere with the order made by Kruger J. Subsequently, this Court refused an application by GWK for special leave to appeal against the judgment of the full court. [11] In his judgment, Daffue J emphasised that the AOD was not a novation of the original debts or underlying credit agreements and that GWK had expressly retained the right to sue the respective debtors on the original and underlying credit agreements. Daffue J had regard to the finding of Kruger J that the parties to the AOD intended to deal only with the arrears. [12] Daffue J held that there was no indication that GWK, in pursuing an action based on the AOD, abandoned its other remedies. Dealing with res judicata and issue estoppel, the judge noted that neither the Trust nor Henque had been cited as a party in the 2009 action and that the same relief on the same ground had not been finally adjudicated by Kruger J. The court found that GWK was not asserting the same subject matter as a basis for holding onto its security, under the guise of a different cause of action. [13] The deregistration of Karob meant that the proceedings before Kruger J and his dismissal of GWK’s claim and the outcome of the appeal are null and void as against Karob. Daffue J, on the authority of Traub v Barclays National Bank; Kalk v Barclays National Bank 1983 (3) SA 619 (A) held that the deregistration of Karob however, did not prevent GWK, as creditor, from proceeding with an action against the Trust, on the underlying credit agreements. As is evident from the surety bond, the Trust remains bound as surety to GWK in respect of Wilke and Henque’s indebtedness to it, regardless of whether Karob’s registration as a company will be restored. [14] Counsel for the Trust argued that the high court was incorrect to hold that GWK could proceed against the debtors based on the original and underlying credit agreements. GWK could sue for the total debt based either on the AOD, or the underlying credit agreements. It was submitted that GWK chose the former to the exclusion of the latter to its detriment, as shown by clauses 5 and 11.1 of the AOD. Absent an amendment, whilst the 2009 action was pending, to incorporate a claim based on the underlying credit agreements, so it was argued, it was not open to GWK to rely on a different ground to claim the same thing. In terms of the ‘once and for all’ rule, all claims generated by the same cause of action had to be instituted in one action (National Sorghum Breweries Ltd t/a Vivo African Breweries v International Liquor Distributors (Pty) Ltd 2001 (2) SA 232 (SCA) at 241D-E). [15] It was further argued on behalf of the Trust that the high court erred in rejecting their submission that the outcome of the 2009 action rendered any claim based on the principal agreements res judicata, or that the latter claim was precluded by issue estoppel, because neither the Trust nor Henque was a party to the 2009 action based on the AOD. Although no cause of action was pleaded against them, nor relief sought from them, a surety is regarded as the ‘same party’ for purposes of a res judicata plea (Aon South Africa (Pty) Ltd v Van den Heever NO and Others 2018 (6) SA 38 (SCA) para 27). [16] This Court in Transalloys v Mineral-loy [2017] ZASCA 95 para 22, with reference to Prinsloo NO & others v Goldex 15 (Pty) Ltd and Another [2012] ZASCA 28; 2014 (5) SA 297 (SCA) (para 10), described res judicata and issue estoppel as follows: ‘The expression of ‘res judicata’ literally means that the matter has already been decided. The gist of the plea is that the matter or question raised by the other side had been finally adjudicated upon in the proceedings between the parties and that it therefore cannot be raised again. According to Voet 24.1.1, the exceptio was available at common law if it were shown that the judgment in the earlier case was given in a dispute between the same parties, for the same relief on the same ground or on the same cause (idem actor, idem res et eadem causa petendi) . . . In time the requirements were, however, relaxed in situations which gave rise to what became known as issue estoppel. This is explained as follows by Scott JA in Smith v Porritt and others 2008 (6) SA 303 (SCA) para 10: “Following the decision in Boshoff v Union Government 1932 TPD 345 the ambit of the exceptio rei judicata has over the years been extended by the relaxation in appropriate cases of the common law requirements that the relief claimed and the cause of action be the same (eadem res and eadem petendi causa) in both the case in question and the earlier judgment. Where the circumstances justify the relaxation of these requirements those that remain are that the parties must be the same (idem actor) and that the same issue (eadem quaestio) must arise. Broadly stated, the latter involves an inquiry whether an issue of fact or law was an essential element of the judgment on which reliance is placed. Where the plea of res judicata is raised in the absence of a commonality of cause of action and relief claimed it has become common place to adopt the terminology of English law and to speak of issue estoppel. But, as was stressed by Botha JA in Kommissaris van Binnelandse Inkomste v Absa Bank BPK 1995 (1) SA 653 (A) at 669D, 670J-671B, this is not to be construed as implying an abandonment of the principles of the common law in favour of those of English law; the defence remains one of res judicata. The recognition of the defence in such cases will however require careful scrutiny. Each case will depend on its own facts and any extension of the defence will be on a case by ase basis. (KBI v Absa Bank supra at 670E-F.) Relevant considerations will include questions of equity and fairness, not only to the parties themselves but also to others.”’(Emphasis added.) [17] In the present case, even if one were to accept generously, in favour of the appellants, that the parties in the earlier and subsequent litigation were essentially the same, in order to raise res judicata successfully the appellants must still establish that ‘the same relief on the same ground or on the same cause’ was claimed by GWK, to justify holding onto its security. In Aon this court said the following (at para 22): ‘As mentioned earlier the plea of res judicata in this case takes the attenuated form commonly referred to as issue estoppel. Res judicata deals with the situation where the same parties are in dispute over the same cause of action and the same relief, and in the form of issue estoppel arises: “ Where the decision set up as a res judicata necessarily involves a judicial determination of some question of law or issues of fact, in the sense that the decision could not have been legitimately or rationally pronounced by the tribunal without at the same time, and in the same breath, so to speak, determining that question or issue in a particular way, such determination, though not declared on the face of the recorded decision, is deemed to constitute an integral part of it as effectively as if had been made so in express terms.” ‘ (Citations omitted). [18] In Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 825G, Corbett JA stated that ‘cause of action . . . is ordinarily used to describe the factual basis, the set of material facts, that begets the plaintiff’s legal right of action’. In deciding whether the same relief is being sought on the same ground, the starting point is ‘to compare the relevant facts of the two cases upon which reliance is placed for the contention that the cause of action (in the extended sense of an essential element) is the same in both’ (Janse Van Rensburg NO v Steenkamp [2008] ZASCA para 25). [19] Applied to the present case, it is clear that GWK in the 2009 action, did not claim the same thing on the same ground. As stated earlier, its claim in that action was founded on the AOD, and then only for payment of the arrears. That much is clear from both the judgments of Kruger J and the full court. Those judgments themselves distinguish between GWK’s cause of action based on the AOD and its causes of action based on the principal agreements. Indeed, Karob and Wilke defended the 2009 action on the basis that only the arrears of R 4 831 873.05 were due to GWK; that Wilke had already paid that amount; and that the difference between the sum of R 12 787 871.82 in the AOD and the arrears, was not due to GWK under the AOD but by reason of various other causes of action (‘uit hoofde van verskeie ander skuldoorsake’). (2/395/3.3-3.5) [20] The contention that GWK elected to sue on the AOD to its detriment, is both opportunistic and wrong. The execution of the AOD, the breach of which created a distinct cause of action, did not extinguish the principal agreements between the parties. These agreements retained their independent existence after the conclusion of the AOD. Even if the action based on the AOD, which was restricted to claiming the arrears, was not successful, nothing precluded GWK from resorting to the causes of action in terms of the original principal agreements. It expressly reserved the right to do so in clause 11.1 of the AOD. And there is nothing to suggest that GWK waived this right. [21] Furthermore, a party may choose any one of the several legal avenues available to it. If it chooses to pursue sustainable relief that would not necessarily mean that such a party has abandoned the other. Seeking payment of arrears in terms of the AOD can hardly be said to exclude a claim for the amounts outstanding in terms of the underlying credit agreements. More so, since that right has been expressly reserved it must also be borne in mind that in essence Kruger J found that the amount of the arrears owing at the time had not been proved. [22] For the reasons aforesaid the appeal is dismissed with costs, including the costs consequent upon employment of two counsel. ______________________________ DV DLODLO JUDGE OF APPEAL Appearances For appellants: S Grobler SC Instructed by: JA Botha Attorneys, Bethlehem McIntyre Van Der Post, Bloemfontein For respondent: W Luderitz SC and P Lourens Instructed by: Werksmans Attorneys, Sandton Symington & De Kok, Bloemfontein.

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 23 December 2020 STATUS Immediate Wilke NO & Others v Griekwaland Wes Korporatief Ltd (1327/2019) [2020] ZASCA 182 (23 December 2020) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. The Supreme Court of Appeal (the SCA) today dismissed the appeal with costs and upheld an order of the Free State Division of the High Court, Bloemfontein. The issue before the SCA was whether the Wilke Boerdery Trust (the Trust) remained bound as surety to Griekwaland Wes Korporatief Bpk (GWK) under the suretyship and whether the high court erred in rejecting the Trust’s submission that the outcome of the action rendered any claim based on the principal agreements res judicata, or that the latter claim was precluded by issue estoppel. The appellants, the trustees of Wilke Boerdery Trust, in February 2019, launched an application in the Free State Division of the High Court, Bloemfontein (the high court), for an order directing the respondent, Griekwaland Wes Korporatief Bpk (GWK), to cancel a surety bond registered in its favour in 2003, over two farms in Jacobsdal in the Free State Province (the surety bond). The surety bond was registered by Mr Charl Daniel Wilke (Wilke), and Henque 4335 CC (Henque) as security for goods sold and delivered, production credit granted and monies lent and advanced by GWK to them in the amounts of R 4 million (Wilke) and R 1 million (Henque), in respect of their farming operations. The Trust had bound itself to GWK as surety and co- principal debtor in a total amount of R5 million, for the due fulfilment of the obligations by the principal debtors, Wilke and Henque. The high court (Daffue J) dismissed the application with costs and held that the Trust remained bound as surety to GWK under the surety bond. The appeal before the SCA was with the leave of the high court (Daffue J). Since August 2004, GWK extended credit to Henque and Karob Boerdery (Pty) Ltd (Karob), , pursuant to numerous credit agreements (the principal agreements). In March 2005, Wilke applied to GWK together with Henque and Karob to have the debts owing to GWK consolidated in a single account in the name of Karob. GWK approved the request on the express condition that notwithstanding the consolidation of the subject debts, all securities granted by Wilke and Henque would remain in place in securitisation of the liability to be assumed by Karob. With effect from March 2005, the debt owed to GWK by Wilke and Henque at the time were consolidated with the debt of Karob, which assumed liability for those debts to GWK. Payments thereof by Karob to GWK remained secured by special notarial bonds registered in favour of GWK by Wilke in 2000 and Henque in 2003, to secure their indebtedness to GWK. In breach of numerous credit agreements and the debt consolidation, Karob failed to make payment to GWK thereby breaching the principal agreements. These amounts owed to GWK were recorded in an acknowledgement of debt (AOD). On 11 September 2009 GWK issued a provisional sentence summons in the high court (Kruger J) against Karob and Wilke for payment based entirely on the AOD. On 19 September 2009 the court granted judgment against Karob and Wilke, jointly and severally, in an amount of R1 917 165.80, together with interest. On 5 July 2010 GWK delivered its declaration in respect of the action. Karob was finally deregistered on 16 July 2010 for want of filing its annual returns. The matter proceeded to trial. On 13 August 2015, the high court (Kruger J) handed down judgment and dismissed GWK’s action, essentially on the basis that GWK had failed to prove the arrear amounts owed in terms of the AOD. GWK was granted leave to appeal to a full court of the high court. The full court held that GWK had decided to institute legal proceedings in terms of the AOD and not the original causes of action or accounts. As stated above, the matter came before the high court (Daffue J) had regard to the finding of Kruger J that the parties to the AOD intended to deal only with the arrears. The court a quo, however, emphasised that the AOD was not a novation of the original debts or underlying credit agreements and that GWK had expressly retained the right to sue the respective debtors on the original and underlying credit agreements. Daffue J held that there was no indication that GWK, in pursuing an action based on the AOD, abandoned its other remedies. Dealing with res judicata and issue estoppel, Daffue J noted that neither the Trust nor Henque had been cited as a party in the 2009 action and that the same relief on the same ground had not been finally adjudicated by Kruger J. The high court per Daffue J found that GWK was not asserting the same subject matter as a basis for holding onto its security, under the guise of a different cause of action. The court a quo found further that the deregistration of Karob however, did not prevent GWK, as creditor, from proceeding with an action against the Trust, on the underlying credit agreements. On appeal, the SCA held that it was clear that GWK’s claim in the action was founded on the AOD, and then only for payment of the arrears. The SCA found that the contention by the Trust that GWK elected to sue on the AOD to its detriment, was both opportunistic and wrong. The execution of the AOD, the breach of which created a distinct cause of action, did not extinguish the principal agreements between the parties. These agreements retained their independent existence after the conclusion of the AOD. Even if the action based on the AOD, which was restricted to claiming the arrears, was not successful, nothing precluded GWK from resorting to the causes of action in terms of the original principal agreements. It expressly reserved the right to do so in clause 11.1 of the AOD. And there was nothing to suggest that GWK waived this right. The SCA concluded that, from the surety bond, it was clear that the Trust remained bound as surety to GWK in respect of Wilke’s and Henque’s indebtedness to it, regardless of whether Karob’s registration as a company would be restored.

1771

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No 252/2010 In the matter between: ALLIANCE PROPERTY GROUP (PTY) LTD APPELLANT and ALLIANCE GROUP LIMITED FIRST RESPONDENT AUCTION ALLIANCE KWAZULU-NATAL (PTY) LTD SECOND RESPONDENT Neutral citation: Alliance Property Group v Alliance Group (252/10) [2011] ZASCA 14 (14 March 2011) Coram: HARMS DP, HEHER, PONNAN, TSHIQI JJA et PLASKET AJA Heard: 25 February 2011 Delivered: 14 March 2011 Summary: Practice – Whether appeal having any practical effect or result – section 21A of the Supreme Court Act 59 of 1959 – Passing-off – proof of reputation – proof of misrepresentation. ORDER _______________________________________________________________ On appeal from: KwaZulu-Natal High Court (Pietermaritzburg) (Sishi J sitting as court of first instance): (1) The appeal is upheld with costs and the order of the court below is set aside. (2) The following order is substituted for the order issued by the court below. '(a) The respondents are interdicted, in the provinces of KwaZulu-Natal and the Eastern Cape, from passing-off their property services as those of the applicant or as being associated in the course of trade with the applicant, by using the name, mark and trading style of Alliance Group without clearly distinguishing their services from those of the applicant. (b) The respondents are directed to pay, jointly and severally, the applicant’s costs of the application, including the costs of two counsel.' JUDGMENT PLASKET AJA (HARMS DP, HEHER, PONNAN, TSHIQI JJA concurring): [1] The appellant appeals against the judgment of Sishi J in the KwaZulu- Natal High Court, Pietermaritzburg in which its application to interdict the respondents from passing-off their property services as those of the appellant was dismissed with costs. [2] Two principal issues arise. The first is whether the appeal will have any practical effect and if not whether it should be dismissed in terms of s 21A of the Supreme Court Act 59 of 1959. The second is whether, if the appeal is not to be dismissed in terms of s 21A, Sishi J was correct in dismissing the application on the basis that the appellant had failed to prove a reputation in the name and trading style of Alliance Property Group and that it had failed to prove a misrepresentation on the part of the respondents that created a likelihood of deception or confusion between the appellant’s name and that of the respondents. Prior to dealing with these issues, it is necessary to set out the facts. The facts [3] The appellant commenced business under its present name in 1997. It conducts business in the field of commercial and industrial property, including property development and facilitation, valuations and consultancy, property sales, the letting of property, property management and public auctions of property. The heartland of its operations is the province of KwaZulu-Natal, but the papers show that it also conducts business in the Eastern Cape, from that province's border with KwaZulu-Natal to East London. [4] The first respondent commenced its existence in 1999 as Electronic Auctioneering Ventures Ltd. In the following year it changed its name to Auction Alliance Holdings Ltd and then, in 2003, to Asset Alliance Ltd. A few years later, it embarked on a rebranding, restructuring and consolidation of its associated companies. The result was that, in October 2006, it changed its name to Alliance Group Ltd. It conducts the business of property auctions, business sales, property finance, property inspections and valuations in KwaZulu-Natal and elsewhere in the country, including the Eastern Cape. [5] The second respondent was incorporated in 2000 under the name Kusasa Commodities 191 (Pty) Ltd. It changed its name to Auction Alliance KwaZulu-Natal (Pty) Ltd in 2001. Between 2003 and 2007 it traded as Auction Alliance but, from September 2007, has traded as Alliance Group. Its core business is the selling of immovable property by way of auctions. It operates in KwaZulu-Natal. [6] As a result of the first respondent's rebranding and the change of name and trade name of it and second respondent, the appellant launched its application to interdict them from passing-off their services as those of the appellant's. As stated above, Sishi J dismissed the application. He then granted leave to appeal to this court. Will the appeal have any practical effect? [7] After leave to appeal had been granted, the respondents’ attorneys wrote a letter to the appellant's attorneys in which they said that the respondents had undergone an 'internal strategy change' and had 'performed an intensive "brand audit" in light of market conditions'. The result was that they decided to re-focus their core business to that of auctions, rebranded their business and resumed trading as Auction Alliance. The letter then stated: 'Our clients are prepared to abandon the costs order in their favour relating to the proceedings in the Court a quo and are prepared to agree that each party be responsible for their own costs in connection with the application for leave to appeal in the event that your client is prepared to withdraw its appeal to the Supreme Court of Appeal.' [8] It will be noted that the letter gave no undertaking that the respondents would not in future pass-off their business as that of the appellant. Instead, it made the assertion that as they had changed back to their previous names, the appellant’s appeal was moot. [9] The appellant’s attorneys replied to the letter by saying that ‘your client’s statement that it no longer proposes to trade as “Alliance Group” does not destroy our client’s right to pursue its appeal’. They noted that the respondents had not abandoned the judgment in their favour and had given no undertaking not to trade as the Alliance Group. [10] The letter then mentioned that the second respondent (it would seem) was still trading under the name of the Alliance Group in Durban. Finally, the appellant’s attorneys demanded that, in order to settle the matter, the respondents should abandon the judgment in their favour, give an ‘irrevocable undertaking’ that they would not use the name Alliance Group, or apply for the registration of a new company with that name, and take various other steps specified in the letter. When, some two weeks later, the appellant’s attorneys had received no response, they informed the respondents’ attorneys that they were proceeding with the preparation of the record. [11] Shortly before the appeal was to be heard, the appellant brought an application in which it sought leave to lead further evidence. That evidence was to the effect that, in addition to the second respondent carrying on business under the name of Alliance Group, two of the first respondent’s subsidiaries in Johannesburg and Port Elizabeth were also doing so some seven months after the letter informing the appellant of the rebranding. The respondents, in an answering affidavit, ascribed this to an insignificant oversight which had been rectified. [12] Section 21A(1) of the Supreme Court Act 59 of 1959 provides that ’[w]hen at the hearing of any civil appeal to the Appellate Division or any Provincial or Local Division of the Supreme Court the issues are of such a nature that the judgment or order sought will have no practical effect or result, the appeal may be dismissed on this ground alone’. [13] The purpose of this section was considered by this court in Premier, Provinsie Mpumalanga, en ʼn ander v Groblersdalse Stadsraad,1 in which it was held: ‘Die artikel is, myns insiens, daarop gerig om die drukkende werklas op Howe van appèl, insluitende en miskien veral hierdie Hof, te verlig. Dit breek weg van die destydse vae begrippe soos “abstrak”, “akademies” of “hipoteties”, as maatstawwe vir die uitoefening van 'n Hof van appèl se bevoegdheid om 'n appèl nie aan te hoor nie. Dit stel nou 'n direkte en positiewe toets: sal die uitspraak of bevel 'n praktiese uitwerking of gevolg hê? Gesien die doel en die duidelike betekenis van hierdie formulering, is die vraag of die uitspraak in die geding voor die Hof 'n praktiese uitwerking of gevolg het en nie of dit vir 'n hipotetiese toekomstige geding van belang mag wees nie.’ 1 1998 (2) SA 1136 (SCA) at 1141D-E. See too Rand Water Board v Rotek Industries (Pty) Ltd 2003 (4) SA 58 (SCA) paras 13-14. [14] In Port Elizabeth Municipality v Smit2 this court held that the discretionary power to dismiss an appeal in terms of s 21A without consideration of the merits was only operative where there was an existing dispute between the parties that, for some or other reason, had become academic or hypothetical (and that, in the absence of an existing dispute, s 21A did not apply because there simply was no appeal before the court). [15] On the facts that I have set out above, I am of the view that it cannot be said that the dispute between the appellant and the respondents is academic or hypothetical. The fact that the respondents have failed to give an undertaking that they will not, in future, use the name Alliance Group renders the dispute a live one. I accordingly find that the appeal is not one that will have no practical effect or result and that it must, as a result, be determined on the merits. The merits [16] In Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd & another,3 Harms JA identified the elements of the wrong of passing-off to be 'the "classical trinity" of reputation (or goodwill), misrepresentation and damage'. As a form of wrongful competition it is unlawful because 'it results, or at any rate is calculated to result, in the improper filching of another's trade and an improper infringement of his goodwill and/or because it may cause injury to that other's trade reputation'.4 2 2002 (4) SA 241 (SCA) para 7. 3 1998 (3) SA 938 (SCA) para 13. See too Nino’s Coffee Bar & Restaurant CC v Nino’s Italian Coffee & Sandwich Bar CC & another; Nino’s Italian Coffee & Sandwich Bar CC v Nino’s Coffee Bar & Restaurant CC 1998 (3) SA 656 (C) para 30. 4 Brian Boswell Circus (Pty) Ltd & another v Boswell-Wilkie Circus (Pty) Ltd 1985 (4) SA 466 (A) at 478I-J. [17] The elements of passing-off were described more fully as follows in Premier Trading Co (Pty) Ltd & another v Sporttopia (Pty) Ltd:5 ‘Passing-off is a wrong consisting of a false representation made by one trader (the defendant) to members of the purchasing public that the enterprise, goods or services of a rival trader (the plaintiff) either belong to him (the defendant) or are connected, in the course of trade, with his own enterprise, goods or services. (I shall abbreviate, for the sake of convenience, “enterprise, goods or services” to the single term “the product” since this is a case of “product confusion” rather than “business connection confusion”.) The defendant's representation is a misrepresentation if it is likely to deceive or confuse a substantial number of members of the public as to the source or origin of his product. Passing-off, to be actionable, erodes the plaintiff's goodwill. Goodwill is the product of a cumulation of factors, the most important of which, in the context of passing-off, is the plaintiff's reputation. Reputation is the opinion which the relevant section of the community holds of the plaintiff or his product. If favourable, it would dispose potential customers to patronise the plaintiff or his product and, if unfavourable, it would tend to discourage them from doing so. The plaintiff's reputation may be associated with the symbol under which his product is marketed. The symbol renders the product distinctive of the plaintiff or his product. A false representation by the defendant about the symbol used by the plaintiff may encourage or induce potential customers of the plaintiff, believing that they were patronising him, into patronising the defendant.’ [18] I turn now to the issues to be decided, namely whether the appellant proved a reputation in its name and trading style and whether it proved a misrepresentation on the part of the respondents. (a) Reputation [19] It is necessary to point out that, while in the court below the appellant sought to lay claim to the word 'Alliance' as being descriptive of its business, Sishi J held, correctly, that it was a descriptive word that could not be monopolised by the appellant.6 The appellant does not attack this finding and concedes that it does not have a monopoly on the word 'Alliance'. Instead it 5 2000 (3) SA 259 (SCA) at 266G-267C. See too Capital Estate and General Agencies (Pty) Ltd & others v Holiday Inns Inc & others 1977 (2) SA 916 (A) at 929C-D; Brian Boswell Circus (Pty) Ltd & another v Boswell-Wilkie Circus (Pty) Ltd fn 4 at 478E-H. 6 See Value Car Group Ltd & another v Value Car Hire (Pty) Ltd & others [2005] 4 All SA 474 (C). argues that it has established a reputation symbolised by the name and trade style of Alliance Property Group. [20] In Brian Boswell Circus (Pty) Ltd & another v Boswell-Wilkie Circus (Pty) Ltd7 Corbett JA stated that there were two important considerations in respect of the acquisition by a business of a reputation in a trade name: 'Firstly, whether the general public will be confused or deceived into thinking, because of identity or similarity of names, that the business of the defendant is that of the plaintiff, or is connected therewith, must, as a matter of logic, depend on the extent to which that name is associated in the minds of members of the public with the business carried on by the plaintiff, ie the extent to which plaintiff has acquired a reputation in that trade name. Secondly, as the rationale of the wrong of passing off is the protection of the plaintiff's trade and goodwill, a valid cause of action would seem to postulate the existence of a goodwill, ie reputation, attaching to that trade name. Whether reputation, in this sense, is always a sine qua non of a successful passing off action need not now be decided.' In addition, the reputation that is sought to be protected must have been in existence when the misrepresentation was made.8 [21] The existence of the appellant's reputation at the relevant time is a question of fact. The appellant has put up the following facts, none of which have been disputed by the respondents in any meaningful way: the appellant has provided property services under the style Alliance Property Group since its incorporation in 1997; its business has, since then, encompassed a full range of property related services and, since 1997, it has facilitated a number of property developments having a combined value of over R800m; since its incorporation, its portfolio of commercial and industrial properties that it manages has grown to 54 buildings worth R948m; it has conducted a number of public auctions of property, including one in Dubai; it has acted as a consultant and advisor to a Dubai-based company that is developing a prestigious golf and leisure resort in KwaZulu-Natal; brochures reflecting its profile in 2003 and 2007 reflect a considerable growth in its business; since 1998, its turnover from property related activities, primarily in the form of commissions, has exceeded R91m; and it has advertised its services widely. 7 Footnote 4 at 479B-D. See too Caterham Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd fn 3 paras 20-21. 8 Caterham Car Sales & Coachworks Ltd v Birkin Car Sales (Pty) Ltd fn 3 para 22. [22] In answer to this, the respondents claim no knowledge of the appellant's reputation; state that it is not involved in property auctions to any 'significant degree'; suggest the appellant's property portfolio may have declined since the signing of the founding affidavit; allege that the appellant trades in a small part of the country; and claims that the respondent is much bigger than it. The appellant's schedule of the properties it manages shows, however, that its business is only carried on in KwaZulu-Natal and the Eastern Cape, and extends no further than the Eastern Cape. [23] It is evident from the period during which the appellant has traded, the nature of its business and the scope of its operations that the appellant has established that it has acquired a reputation in its field in KwaZulu-Natal and the Eastern Cape. It is argued on behalf of the respondents, however, that there is a difference between it acquiring a reputation and proving a secondary meaning. This issue was dealt with by this court in Brian Boswell Circus (Pty) Ltd & another v Boswell-Wilkie Circus (Pty) Ltd9 in which the court held simply that ‘the latter would seem to include the former’. [24] The court then referred with approval to Policansky Bros Ltd v L & H Policansky10 in which this court said the following concerning a name acquiring a secondary meaning: 'If a person has previously through his advertisements and through the quality of his goods made his name valuable as a trade name so that his name has become distinctive both of his goods and of himself as the manufacturer of those goods, and if his goods have come to be universally known in the market by his name then his name is said to have obtained a secondary meaning. When this is the case another person cannot use that name in connection with a similar class of goods unless he makes it perfectly clear to the public that he is not selling the goods of the original manufacturer . . . .' [25] On the strength of the above, I conclude that the appellant has established a reputation in the field of providing property-related services in KwaZulu-Natal and the Eastern Cape and that it has done so in relation to the name and trading style of Alliance Property Group which name (to the extent 9 Footnote 4 at 482A-B. 10 1935 AD 89 at 103. that it may be descriptive) has acquired a secondary meaning as a result of the close and distinctive association between it and the business the appellant carries on in the minds of the public. In addition, the evidence also establishes that the appellant’s reputation was in existence when the respondents began to trade under the name Alliance Group Ltd. As a result, the appellant has established that, in relation to the first issue, the court below erred in finding that the appellant had not proved a reputation in its name and trading style. (b) Misrepresentation [26] In Capital Estate & General Agencies (Pty) Ltd & others v Holiday Inns Inc & others,11 this court held the following in respect of the proof of the misrepresentation necessary to establish a passing-off: ‘The wrong known as passing off consists in a representation by one person that his business (or merchandise, as the case may be) is that of another, or that it is associated with that of another, and, in order to determine whether a representation amounts to a passing-off, one enquires whether there is a reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with, that of another. Whether there is a reasonable likelihood of such confusion arising is, of course, a question of fact which will have to be determined in the light of the circumstances of each case.’ (Reference omitted.) [27] The court, in Miriam Glick Trading (Pty) Ltd v Clicks Stores (Transvaal) (Pty) Ltd & others,12 after referring to the above passage from the Holiday Inns case, proceeded to set out how the factual enquiry is to be conducted: ‘In such an enquiry the trade names must be considered from the visual, phonetic and ideological points of view. They must be considered not side by side, but as a member of the public would see them, one after the other, with a time lapse in between and having regard to the likelihood of imperfect recollection. In passing-off they must be considered not in abstracto but in the form and under the circumstances in which they are used. This involves having regard to all the surrounding circumstances such as the nature of the businesses in question and the goods to which they relate, the types of persons who constitute potential clients of such businesses and the conditions under which such businesses are conducted. The criteria 11 Footnote 5 at 929C-E. See too Brian Boswell Circus (Pty) Ltd & another v Boswell-Wilkie Circus (Pty) Ltd fn 4 at 478E-J. 12 1979 (2) SA 290 (T) at 295A-D. is not that of a very careful or a very careless purchaser but an ordinary purchaser of the types comprising the potential clients’. [28] Prior to September 2007, the appellant, trading as Alliance Property Group, provided a comprehensive range of property-related services. The respondents traded as Auction Alliance and concentrated on selling property by way of public auctions. At this stage, the only common factor in the names of the appellant and the respondents was the descriptive word Alliance. To the extent that this had the potential to cause confusion, it was a risk that the appellant and the respondents bore, but the remainder of their respective names was sufficient to distinguish them from each other in the minds of the public.13 [29] In September 2007, however, the respondents dropped the word Auction from their names, expanded their services in the property field to include more than property auctions and called themselves Alliance Group Ltd. The effect of this was to remove important features that distinguished the business of the appellant from that of the respondents, make the respondents’ businesses look more like the appellant’s business from a functional point of view and to make their names look strikingly similar to that of the appellant. By doing this, confusion in the minds of the public was inevitable and it is hardly surprising that instances of actual confusion arose. [30] In these circumstances, I am of the view that the appellant succeeded in establishing a misrepresentation on the part of the respondents that its businesses were the same business as that of the appellant or was connected with it. That being so, I am of the view that the court below erred in this respect too and that, consequently, the appeal must succeed. THE ORDER 13 Sir Robert McAlpine Ltd v Alfred McAlpine Ltd [2004] RPC 36 711 (HC) paras 49-50; Initiative Promotions and Designs CC v Initiative Media South Africa (Pty) Ltd & others 2005 BIP 516 (D) at 525B-E, quoting with approval Kerly Law of Trade Marks and Trade Names 12 ed (1986) p 389. [31] The following order is issued. (1) The appeal is upheld with costs and the order of the court below is set aside. (2) The following order is substituted for the order issued by the court below. '(a) The respondents are interdicted, in the provinces of KwaZulu-Natal and the Eastern Cape, from passing-off their property services as those of the applicant or as being associated in the course of trade with the applicant, by using the name, mark and trading style of Alliance Group without clearly distinguishing their services from those of the applicant. (b) The respondents are directed to pay, jointly and severally, the applicant’s costs of the application, including the costs of two counsel.' _____________________ C. PLASKET ACTING JUDGE OF APPEAL APPEARANCES APPELLANT: G E Morley SC instructed by Cox Yeats, Durban; Honey Attorneys, Bloemfontein RESPONDENTS: J-H Roux SC instructed by Cliffe Dekker Hofmeyr, Cape Town; Symington and De Kock, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 14 March 2011 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Alliance Property Group (Pty) Ltd v Alliance Group Ltd (252/10) [2011] ZASCA (14 March 2011) The Supreme Court of Appeal (SCA) upheld an appeal against an order of the KwaZulu-Natal High Court (Pietermartizburg) in the above matter. The appellant appealed against the judgement of the court a quo in which its application to interdict the respondents from passing-off their property services as those of the appellant’s was dismissed with costs. The main issues before the court was whether the appellant had proved a reputation in its name and trading style and whether it had proved a misrepresentation on the part of the respondents. The court held that the appellant had indeed established a reputation in the field of providing property-related services in KwaZulu-Natal and the Eastern Cape and that it had done so in relation to the name and trading style of Alliance Property Group which name (to the extent that it may have been descriptive) had acquired a secondary meaning as a result of the close and distinctive association between it and the business of the appellant in the minds of the public. The court further held that the appellant succeeded in establishing a misrepresentation on the part of the respondents in that their respective businesses were in the same field as that of the appellant and the name under which they traded was strikingly similar to that of the appellant. Therefore, the SCA ordered that the respondents be interdicted, in the provinces of KwaZulu-Natal and the Eastern Cape, from passing-off their property services as those of the applicant or as being associated in the course of trade with the applicant, by using the name, mark and trading style of Alliance Group without clearly distinguishing their services from those of the applicant.

3607

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 035/2020 In the matter between: THE MEMBER OF THE EXECUTIVE COUNCIL DEPARTMENT OF HEALTH, NORTH WEST PROVINCE APPELLANT and NAM obo TN RESPONDENT Neutral citation: The Member of the Executive Council, Department of Health, North West v NAM obo TN (035/2020) [2021] ZASCA 105 (26 July 2021) Coram: ZONDI, DAMBUZA and MOCUMIE JJA and GORVEN and EKSTEEN AJJA. Heard: 10 May 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be have been at 09h45 on 26 July 2021. Summary: Delict – medical negligence – claim for damages based on failure to attend to plaintiff before delivery and foetus after delivery – whether the clinic nursing staff were negligent in their treatment of the plaintiff and TN – whether negligence caused TN’s hypoxic ischemic injury and the resultant cerebral palsy. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: North West Division of the High Court, Mahikeng (Hendricks ADJP, Gura J and Oosthuizen-Senekal AJ concurring, sitting as court of appeal) 1 Condonation for the late filing of the appeal record is granted. The appeal is upheld. 3 Each party is to pay its own costs. The order of the Full Court is set aside and substituted with an order dismissing the appeal. ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Mocumie JA (Zondi and Dambuza JJA and Gorven and Eksteen AJJA concurring) [1] The issue in this appeal is whether the nursing staff at Makgobistad clinic in Kuruman, North West Province were negligent in their management of the plaintiff’s delivery and in their treatment of the plaintiff’s baby (TN) on 17 December 2003. For convenience, the parties will be referred to as they were in the trial court, plaintiff and the Member of the Executive Council for Health, North West (the MEC). [2] At the outset, the MEC sought condonation for the late filing of the appeal record on a number of grounds. The factors which a court considers when exercising its discretion whether to grant condonation, include the degree of non-compliance with the rules, the explanation for it, the importance of the case, the respondent’s interest in the finality of the judgment of the court below, the convenience of the court and the avoidance of unnecessary delay in the administration of justice.1 As regards the delay, the MEC 1 S v Sayed and Others [2017] ZASCA 156; 2018 (1) SACR 185 (SCA) paras 21-23 with reference to Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining and Development Company Ltd and Others [2013] ZASCA 5; [2013] 2 All SA 251 para 11. lodged a notice of appeal on 16 April 2020. In terms of rule 8(1) of the Rules of this Court he was obliged to lodge the record within three months of delivery of the notice of appeal. The MEC only lodged the record of proceedings on 10 September 2020, almost five months later. By then the appeal had lapsed. The MEC attributed the delay to the effect of the national lock down, which was imposed in March 2020, under the National Disaster Management Act, 57 of 2002 in an attempt to curb the spread of the Corona virus. During the lockdown the North West High Court operated with skeleton staff to attend only to urgent matters. As a result, service of court processes, including the appeal record of this case, suffered. The attorneys employed by the State Attorney could, initially, not move freely as they were not declared essential workers. They were granted essential work permits on 14 May 2020. [3] In addition, the transcribers, Digital Audio Recording Transcripts, delayed the transcription of the record within the anticipated period. Ms Ndabeni of the State Attorney, who was responsible for this appeal, instructed Appeals Document Services CC on 20 May 2020 to prepare the record and the documents were sent to them on 3 June 2020. The State Attorney received the draft record from Appeals Document Services on 10 July 2020. On 20 July 2020 the draft record was sent to the plaintiff’s attorney for comment. There is no explanation why the draft was not sent sooner, or why it took the State Attorney almost further two months to file the record (10 September 2020). [4] The MEC maintains that he has lodged a notice of appeal which has good prospect of success and that the plaintiff will not suffer prejudice if condonation were to be granted. If condonation is refused, the MEC contends, the appeal will lapse which will severely prejudice him. [5] It is correct that the delay in filing the record has a direct impact on the plaintiff’s interest in the finality of the matter. In my view, although more should have been done in prosecuting the appeal, the delay is not inordinate and it has been satisfactorily explained. Nor can it be said that the plaintiff would suffer any prejudice if condonation was granted. The appeal is very important to both parties as it involves the determination of the cause of the cerebral palsy the plaintiff’s minor child suffers from. Having considered all the circumstances of this case, condonation for the late filing of the appeal record should be granted. I now proceed to deal with the appeal. [6] The plaintiff instituted a claim for delictual damages in the High Court, North West Division, Mahikeng (the high court), on behalf of her minor child (TN), against the MEC as the employer of the nursing staff at the clinic at the time. The plaintiff’s claim against the MEC was brought on the basis that he was vicariously liable for the negligent conduct of the nursing staff that attended to the plaintiff at the clinic during her admission. She claims that this negligence caused and culminated in TN developing cerebral palsy as a consequence of a hypoxic-ischaemic event at birth, and thereafter. She alleged that the nursing staff at the clinic negligently kept the clinic closed the night before her admission (16 December 2003) until after 08h00 on the day on which she gave birth (17 December 2003). Upon her admission, they failed to properly and professionally attend to TN, and, in particular, failed to administer oxygen to TN in circumstances when it was reasonably necessary for them to do so; failed to enlist the services of a gynaecologist, or a qualified doctor or other suitable specialist, to examine and properly treat TN in circumstances when it was reasonably necessary to do so; and failed to adhere to the standard of practice of reasonable sisters or nurses in their respective positions in order to ensure that the plaintiff was attended to without delay, and to prevent TN from suffering from brain and other injuries. [7] Gutta J in the court of first instance, who, by agreement between the parties, was called upon to decide only the question of liability, dismissed the claim. She found that the plaintiff did not succeed in proving negligence and causation. The plaintiff successfully appealed to the full court (Hendricks ADJP, with Gura J and Oosthuizen-Senekal AJ). Not satisfied with the decision of the full court, the MEC sought and was granted special leave to appeal to this Court. [8] The facts set out below were either common cause or not seriously disputed. In the morning of 17 December 2003, around 03h00, the plaintiff, who was in her full term of pregnancy, experienced labour pains. She arrived at the clinic not far from where she resided, in a private vehicle, a panel van hired by her father, at about 07h50. The clinic is a government institution that is supposed to be open to the public on a 24-hour basis. On the day in question, there were two nursing staff on duty, a qualified nursing sister who is a midwife, Sister Moletsane, and an assistant nurse, Ms Motaung. In addition, the clinic has an administration officer who keeps the records and files of the clinic, Ms Jaula, a cleaner, and a security officer. It has a basic obstetric care unit (the labour room) fitted with an incubator for babies after their delivery. The plaintiff was 21 years of age at the time of TN’s birth. This was her second birth. Her first child had been born at the same clinic. As in the case of her first pregnancy, she said, she attended antenatal care at the clinic from two months into her pregnancy and had no prenatal complications.2 [9] In her particulars of claim, the plaintiff asserted that on 17 December 2003, she gave birth shortly after 08h00 inside the panel van, unmonitored and without the assistance of the nurses at the clinic. It was averred that the harm TN suffered was caused by an acute profound hypoxic ischaemic insult caused by a complete lack of oxygen to the brain for a sustained period as advised by medical experts; which, but-for the nursing staff not attending to her professionally and timeously, would not have occurred. [10] The antenatal records of the plaintiff, the records from the clinic regarding the day TN was born, as well as the maternity case record relating to the plaintiff’s treatment were all missing and subsequently confirmed to have been lost. All that was available was TN’s Road to Health Chart (RTHC), which was incomplete. On it, all that was recorded was that TN was born by normal vertex delivery.3 The weight, length and head circumference were not recorded on the RTHC. No Apgar scores4 were recorded. TN was diagnosed with cerebral palsy at the age of six months. [11] In his pleas, the MEC denied all allegations of negligence attributed to the nursing staff at the clinic in relation to the birth of TN. The MEC contended that the nursing staff 2 Albeit without the benefit of her medical records which were lost by the clinic. 3 According to Medterm Medical Dictionary, a vertex delivery, means the top of the baby's head comes first. The vertex refers to the top of the head. 4 Apgar stands for ‘Appearance, Pulse, Grimace, Activity, and Respiration’. In the test, five things are used to check a baby's health. Each is scored on a scale of 0 to 2, with 2 being the best score. were on duty at all relevant times and denied that they arrived after the birth of TN. In the alternative, the MEC contended that the plaintiff was contributorily negligent in that she failed to attend antenatal clinic regularly during her pregnancy; she failed to seek medical assistance during early labour when she should reasonably have done so; she sought medical assistance at the clinic only when her labour had progressed and the head of the unborn child was on the perineum; and she was inappropriately dressed in denim pants during labour which delayed TN’s birth. [12] To discharge the onus which rested on her to prove her case, the plaintiff testified and led the evidence of Mr Lebone - the owner and driver of the van which took her to the clinic, Dr: Moja (a neurosurgeon) and Dr Lewis (a paediatrician). Dr Sevenster, a specialist obstetrician for the plaintiff, was not called although he compiled a report and joint minutes with Dr Malebane. To rebut the case for the plaintiff the MEC led evidence of the clinic nursing staff Sr Moletsane and Ms Motaung, as well as the administration officer Ms Jaula and Dr: Malebane, Dr Marumo, Dr Kganane and Dr Mogashoa, a paediatrician neurologist. There were several other experts who examined the plaintiff and TN and thereafter compiled reports, including radiologists and paediatricians, but who were not called to testify. [13] The plaintiff’s version, which is corroborated by Mr Lebone (although he said the time of arrival was 07h00) must, on all the probabilities, be accepted. She said that she arrived at about 07h50 and at that time the clinic was not open. They found approximately twenty people waiting outside the gate of the clinic. The security officer on duty at the clinic told them to remain outside the premises as the nursing staff were not on duty. They accordingly waited there. Her waters broke at 08h10. At 08h15 she gave birth unmonitored. At 08h20 the cleaner came to assist her by putting a blanket over her and the baby that was already on the seat between her legs. She said, ‘[the] baby did not cry at birth, was just still for 10 minutes after the nurse arrived’. At 08h25, Ms Motaung, the assistant nurse came to the panel van and took the baby inside the clinic. The plaintiff was also taken into the labour room. TN was taken to another room. Sr Moletsane cleaned and treated her.TN was brought back to her in the labour room and she breastfed her. She was discharged with TN and was home by 14h00. Her grandmother, based on her observation of the baby’s squint eyes, remarked that there was something wrong with the baby. TN did not suckle like her first baby, she said. She took TN to the clinic a week later and neither she nor the clinic staff noticed anything unusual about her. At six months, she went to a different clinic. The clinic referred her to Bophelong hospital which diagnosed TN with cerebral palsy. From the time the plaintiff was discharged on the day of the birth, until six months later, there were no outward manifestations of any injury. [14] For the plaintiff’s experts, in particular Dr Moja, supported by Dr Lewis, were of the view that the hypoxic event was of an acute profound nature which occurs within 6 to 10 minutes at birth. Dr Moja agreed with the radiologists that the MRI showed a mixed pattern with ‘. . . chronic sequelae secondary to a combination of partial prolonged hypoxic ischemic injury as well as an acute profound hypoxic ischemic injury’. The significance of this is that, Dr Moja said that the acute event would have been at the time of birth (if it had been before, the baby would have been born dead) and lasted ‘less than five minutes . . . but there is a second element which is the prolonged element and that to me means that at that point there was lack of oxygen but it was not total lack of oxygen at the point but damage was still occurring because it was suboptimal’. He went on to explain that the acute event occurred at birth and he explained that is why the baby was not breathing or moving initially. But, after she was revived, he believed that ongoing damage would probably have been caused due to poor oxygen supply and that, as he put it ‘. . . you have an acute profound hypoxia and subsequently also have a prolonged period of hypoxia, you have ongoing damage that may not necessarily be evident subsequently . . .’. [15] According to Dr Lewis, ‘approximately 10 million babies do not breathe immediately at birth, of which about 6 million require basic neonatal resuscitation’. So what the clinic staff did was basic resuscitation since there is no indication that it took any length of time or special techniques to get the baby to breathe, cry, move and suckle. The evidence concerning monitoring for 12 to 24 hours was that this was the case for babies who require extensive resuscitation. The significance is that Dr Moja testified that the treatment protocol was to administer oxygen and to test for oxygen uptake (which the clinic could not do) and thus to refer to a hospital. He could not say, however, that the nursing staff would have been aware that this was the treatment protocol. This is because he did not know what training the staff at this level in such a clinic would have received and, therefore, whether such persons could reasonably have known that TN required such treatment. No nursing experts were called to testify on this aspect. Because, after resuscitation, the baby appeared normal, it cannot be said that the clinic staff were negligent in failing to do what the expert neurologist and obstetrician would have done. [16] In their view, the harm caused by the acute profound hypoxic event occurred at the time the plaintiff gave birth, unmonitored, and TN ‘was still, did not cry and was not breathing’, before the nursing staff came to assist her. Dr Lewis, however, conceded that if TN was breathing, crying, breastfeeding and was pink in colour there was no need to resuscitate her further after she started breathing. Dr Moja was of the view that, because TN had suffered such an event, the treatment protocol required her to be oxygenated until further tests were done within 24 hours, during which period TN should not have been discharged. This would have involved calling a medical doctor with expertise in resuscitations or referring her to a hospital equipped for such emergencies where she would have been provided with medical treatment immediately to reverse the results, or to minimise them later. Had this been done, he opined that the partial prolonged hypoxia could have been avoided or minimised leading to a better outcome. Dr Lewis was of the opinion that the 12 to 24 hour monitoring protocol was only indicated if extensive initial resuscitation had been necessary. Both experts conceded that they could not testify that the nursing staff would have known that this treatment protocol was indicated. That being the case, no finding of negligence can be supported. [17] The version of the nursing staff was that Sr Moletsane brought TN back to the plaintiff to establish if TN could breastfeed, which she could do. She monitored TN’s progress for 4 hours intermittently, 2 hours apart. She was satisfied that TN was well. She discharged both the plaintiff and TN at approximately 12h00. She said that, although the delivery had been complicated, there was nothing untoward about TN after resuscitation. She was pink in colour, was breathing normally and was breastfed by the plaintiff several times before discharge. Neither of the nursing staff nor the plaintiff saw anything unusual in the state of TN at discharge. It bears reminding that the cerebral palsy was only diagnosed some 6 months later. [18] Some 7 days after the birth of TN, the plaintiff brought her to the clinic for tuberculosis and Polio vaccination. She was issued with the RTHC. On it she noted the weight to be 2,8kg which was as expected at that stage. She stated that the clinic lost TN’s Apgar Scores and the plaintiff’s medical records. [19] In a nutshell, the experts for the MEC agreed with the plaintiff’s expert, Dr Moja, as indicated earlier, that ‘. . . it was impossible to determine with any degree of certainty the precise moment when this injury would have occurred’. Dr Malebane, in particular, stated that in the event that it was accepted that the injury could have occurred in the second stage of labour, it would have been preceded by abnormalities; which was not the case according to the plaintiff’s narrative. Dr Kganane stated that the steps taken by Sr Moletsane, namely suction and removal of excessive secretions, wrapping TN and putting her in the incubator (to re-establish the temperature) were normal. The fact that TN was monitored for 4 hours meant that she was conscious and did not need oxygen. The plaintiff told them that she did not pick up any abnormalities as TN was breastfeeding without any difficulty even after they were discharged from the clinic. That, on its own, indicated that despite the injury, there were no apparent problems immediately after birth. [20] The general rule is that he or she who asserts must prove. Thus, in a case such as this the plaintiff must prove that the damage sustained by her minor child was caused by the defendant’s clinic staff’s negligence. The failure of a professional person to adhere to the general level of skill and diligence possessed and exercised at the same time by the members of the branch of the profession to which he or she belongs would normally constitute negligence.5 A medical practitioner ‘is not expected to bring to bear upon the case entrusted to him the highest possible degree of professional skill, but he or she is bound to employ reasonable skill and care.’ 6 5 Van Wyk v Lewis 1924 AD 438 at 444. 6 Mitchell v Dixon 1914 AD 519 at 525. [21] The question that remains is whether any liability can be attached to the nursing staff (and vicariously so, to the MEC), after the plaintiff was admitted into the clinic after TN had already been delivered, unmonitored. Despite the initial vigorous contestation on behalf of the MEC, it became common cause by the end of the trial, as I have already stated, that the cerebral palsy was caused by a mixed pattern with ‘. . . chronic sequelae secondary to a combination of partial prolonged hypoxic ischemic injury as well as an acute profound hypoxic ischemic injury’. A hypoxic ischaemic event can be described as lack of oxygen and inadequate perfusion of oxygen, through the blood, to the brain which causes damage to the brain.7 The radiologists produced joint minutes on the imaging features of the Magnetic Resonance Imaging (MRI) brain scan and agreed that ‘the scan is indicative of a hypoxic ischemic injury of a term brain at a chronic stage of evolution . . . [T]he dominant pattern of injury in this case is acute profound in nature’. In their revised report the radiologists stated that ‘a combination of partial prolonged hypoxic ischemic injury as well as an acute profound hypoxic ischemic injury’ were features of the MRI. The experts that testified based their evidence on both. The joint report of the radiologists was admitted as evidence by agreement. [22] It is therefore safe to accept that on everybody’s version, including the plaintiff’s, nobody thought anything was wrong with TN when she was discharged from the clinic, except what her grandmother said on the first day of TN’s arrival at home; namely her squint eyes indicated that there might have been something wrong with her. That TN had squint eyes (without other sequelae) is on its own not a manifestation of a brain injury. Furthermore, even when the plaintiff took TN back to the clinic 7 days after her birth for immunisation, according to what is recorded on the RTHC, she reported no abnormality about the baby’s behaviour. At that stage, as reasonably expected, she would have told the nursing staff about any abnormality she picked up on her own as the mother or even what her grandmother had said about TN’s squint eyes. She did not. [23] The ineluctable inference must then be drawn that, the fact that the damage was only picked up 6 months later, is an indication that the damage was ongoing after birth. 7 Magqeya v MEC for Health, Eastern Cape [2018] ZASCA 141 para 8. As no abnormalities asserted themselves at the clinic, it cannot be said that the nursing staff fell short of the standard of reasonable nursing staff in a position similar to them. [24] For these reasons, I find that the plaintiff failed to discharge the onus that rested upon her to prove their negligence. There is therefore, no need to consider causation. [25] What remains to consider, is the issue of costs. Counsel for the MEC did not abandon the costs that follow upon success as in similar cases where the medical records were lost in the hands of the clinic staff to mitigate such loss. It is so that the loss of medical records which recorded the crucial information; in particular, the Apgar Scores, which the plaintiff required in order to prove her claim against the MEC, reflects badly on the clinic and its staff, the MEC and the department. It is conduct which must be deprecated in the strongest terms. In the circumstances, I am of the view that the plaintiff should not be mulcted with costs. I say this because the hospitals and clinics are obliged to keep the records of a minor until they reach majority. They failed to do so. [26] In the result the following order issues. 1 Condonation for the late filing of the appeal record is granted. The appeal is upheld. 3 Each party is to pay its own costs. The order of the Full Court is set aside and substituted with an order dismissing the appeal. ______________________ B C MOCUMIE JUDGE OF APPEAL APPEARANCES For Appellant: T Masevhe Instructed by: State Attorney, Mahikeng State Attorney, Bloemfontein For Respondent: J H F Pistor SC Instructed by: Semaushu Attorneys, Mahikeng Phatshoane Henny Inc., Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 26 July 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal The Member of the Executive Council, Department of Health, North West v N A M obo T N (138/2020) [2021] ZASCA 105 (26 July 2021) Today the Supreme Court of Appeal (SCA) upheld the appeal against an order of the North West Division of the High Court, (Hendricks ADJP, (Gura J and Oosthuizen-Senekal AJ concurring) and ordered each party to pay its own costs. This case concerned a claim by N A M (plaintiff) for vicarious delictual damages on behalf of her minor child (TN) against the Member of the Executive Council for Health, North West (the MEC) as the employer of the nursing staff at the clinic at the time the plaintiff gave birth. The central issue to be determined was the claim for damages based on failure to monitor the plaintiff and foetus during labour, whether the clinic nursing staff were negligent in their treatment of the plaintiff and TN, whether their negligence caused TN’s hypoxic ischemic injury and the resultant cerebral palsy and whether the nursing staff could have taken steps to prevent the harm suffered. The SCA held that the High court correctly concluded that there was no evidence that pointed to what steps the nursing staff could have taken but failed to take under the circumstances and the plaintiff did not establish that the conduct of the nursing staff at the clinic was the probable cause of TN’s brain damage which resulted into cerebral palsy. The late diagnosis of brain damage which resulted in cerebral palsy coupled with the many years that elapsed before medical experts could put the pieces together, worsened by the loss of critical medical records resulted in this case being one of the most unfortunate cases to establish negligence and any causal link between the two and the injury TN suffered. The balance of probabilities favoured the nursing staff as it pointed that they did what they could do and as expected of a reasonable person in the circumstances. The SCA further held that even in circumstances where hospital staff have acted negligently by not monitoring the condition of a woman in labour and the foetus and acting appropriately on the results, their wrongful conduct does not, in and of itself, suffice to found delictual liability. As a result, the SCA upheld the appeal and ordered each party to pay its own costs. --------oOo--------

1546

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case number: 64/2008 In the matter between: WILLIAM VAN DER RIET FAMILY TRUST t/a CATHEDRAL PEAK HOTEL Appellant (defendant) and HOSPITALITY INDUSTRY PENSION PROVIDENT FUND Respondent (plaintiff) Neutral citation: William Van Der Riet Family Trust t/a Cathedral Peak Hotel v Hospitality Industry Pension Provident Fund (64/2008) [2008] ZASCA 148 (November 2008) BEFORE : Scott JA, Cameron JA, Cloete JA, Griesel AJA and Kgomo AJA HEARD: Tuesday 18 November 2008 DELIVERED: Thursday 27 November 2008 SUMMARY: Pension Funds Act 24 of 1956 – Rules of pension fund – interpretation – obligation of employer – agreement obliging employer to pay increased contribution of 6% of employee members’ salaries ORDER On appeal from: The High Court, Pietermaritzburg (Moleko J and Radebe AJ), sitting on appeal from the magistrate’s court at Bergville The appeal is dismissed with costs JUDGMENT CAMERON JA (Scott JA, Cloete JA, Griesel AJA and Kgomo AJA concurring) [1] In the magistrate’s court at Bergville, the respondent (the fund) sued the appellant (the hotel) for R15 365,73 plus interest, which the fund claimed represented underpayments in the hotel’s monthly dues as a participating employer on behalf of its employees. The hotel admitted the underpayments during the fourteen-month period the summons covered (February 2003 to March 2004), but denied they were due. Thus presented, the contesting parties’ dispute raised an issue of significance not only for the hotel, but presumably also for other participating employers: the correct interpretation of the fund’s rules, which have binding force under the Pension Funds Act 24 of 1956 (the Act),1 and which the fund (which is registered under the Act) has statutory power to amend.2 The Act obliges employer members to pay ‘any 1 Pension Funds Act 24 of 1956, s 13 Binding force of rules: Subject to the provisions of this Act, the rules of a registered fund shall be binding on the fund and the members, shareholders and officers thereof, and on any person who claims under the rules or whose claim is derived from a person so claiming. 2 Pension Funds Act 24 of 1956, s 12 Amendment of rules: (1) A registered fund may, in the manner directed by its rules, alter or rescind any rule or make any additional rule, but no such alteration, rescission or addition shall be valid – (a) if it purports to [a]ffect any right of a creditor of the fund, other than a member or a shareholder thereof; or (b) unless it has been approved by the registrar and registered as provided in ss (4). Sub-section (2) requires a copy of resolution to be transmitted to the Registrar of Pension Funds. Sub-section (3) requires a statement regarding the financial soundness or otherwise contribution which, in terms of the rules of the fund, is to be deducted from the members’ remuneration’, as well as ‘any contribution for which the employer is liable in terms of those rules’.3 [2] The hotel asserted that it was obliged under the rules, properly interpreted, to contribute only 5% of its employee members’ salaries. The fund insisted that the hotel was obliged to pay 6%, since the trustees resolved in January 2003 to increase employer contributions to that figure. The sum claimed in the summons represented the difference for the disputed period. The magistrate at Bergville, Ms E De Lange, upheld the hotel’s contentions. The fund appealed to the High Court in Pietermaritzburg (Moleko J; Radebe AJ concurring), which reversed this judgment, and ordered the hotel to pay the amount claimed, with interest. The hotel now appeals, with leave granted by the High Court. [3] To understand the parties’ dispute it is necessary to explain its context. The fund was established in September 1992. The hotel joined as a participating employer on 24 February 1999. At that date, revisions had recently been effected to the rules. So updated, the text defined the ‘rules’ as including ‘such alterations as may at any time be in force’. The text also provided, concordantly with the Act, that the rules ‘may be amended at any time by the Trustees’ (among whose number, it bears mention, both employers and employees are represented). Members’ contributions are defined as being a ‘minimum 6 per cent’ of salary, while employers’ contributions were (in 1999) ‘at least 4 per cent’, less certain benefit costs, provided that – ‘(b) every 1 January the EMPLOYER’S contribution shall increase by 1% up to a minimum level of 6% of FUND SALARY’. [4] It is this latter proviso that afforded the foundation for the fund’s contentions. However, the hotel’s accession was recorded in an Agreement of the fund should the change affect its financial condition. Sub-section (4) empowers the Registrar to register the change. 3 Pension Funds Act 24 of 1956, s 13A(1)(a) and (b). of Participation which the parties’ respective representatives signed on 24 February 1999 (the Agreement). This expressly set out the contribution rates, as a percentage of gross monthly wage payable to the fund, for both employer and employee. The figure stated was in each case 5%. [5] Immediately above the parties’ signatures, the Agreement ‘confirmed’ that the hotel had ‘received copies of the Rules of the Fund and the Administration Guide’. This reference to the rules was plainly intended to integrate them into the parties’ agreement. (The magistrate’s observation that ‘no mention is made of the rules’ was thus mistaken.) The Agreement so became subject to the provisions of the rules, as amended from time to time, during the period of the hotel’s accession to the fund. [6] Neither in the High Court nor before this Court did the hotel contend the contrary: indeed its contentions derived from the rules, specifically amendments the fund’s trustees adopted on 28 January 2000. The pivotal amendment was the addition of the following proviso to the exposition of ‘CONTRIBUTIONS’ in the section headed ‘SCHEDULE OF BENEFITS’: ‘It is specifically provided that the contribution rate(s) applicable shall be as specified in the AGREEMENT OF PARTICIPATION.’ This proviso formed the basis for the hotel’s initial defensive stance to the fund’s claim. It asserted that the January 2000 amendment pegged the employer’s contribution to that expressly stipulated in the Agreement, namely 5%, with the effect that the trustees’ decision in January 2003 to increase the employer’s contribution to 6% violated the basis on which the hotel acceded to the fund and was therefore ineffectual. [7] But the defence foundered on the point, well-made by Moleko J in his judgment in the High Court, that the 1999 rules gave no special sanctity to the Agreement of Participation, and that the proviso that seemingly elevated the status of the Agreement was added only in 2000. As the learned Judge pointed out, the Agreement the employer signed in February 1999 did not stand alone, but was subject to and had to be read with the rules – which at that time, as well as subsequently, provided for an annual escalation in the employer’s contribution. It followed by simple logic that in January 2000, when the proviso pegging contributions at those specified in the Agreement of Participation was inserted, the employer’s contribution had already gone up to 6%. The hotel’s initial argument therefore required counsel to straddle the uncomfortable anomaly that, if it were correct, the hotel’s contribution went up (automatically) to 6% on 1 January 2000, but then reverted down to 5% when the 2000 amendments were adopted just days later. [8] That could not be. In argument before us counsel therefore conceded the force of the contrary logic and abandoned his earlier contentions, though he continued to point to what he suggested were difficulties inherent in it. The rule the fund invoked entailed, he said, an automatic annual increase of 1%, indefinitely waxing, which was an absurdity. And indeed that outcome would be absurd, for it seems plain that the parties envisaged that contributions of both the employer and employee would remain fractional in relation to salaries. But the interpretation may safely be discarded as incorrect, for the 1% increase the rules mandate ‘every 1 January’ is automatic only until the minimum of 6% is reached. Thereafter, increases must be fixed by the trustees, who, as already mentioned, include both employer and employee representatives, and may presumably be trusted not to make absurd decisions. [9] As pointed out during debate with counsel, the rule envisages not an indefinitely escalating employer contribution, but a minimum compulsory level, which is 6%, to be attained in one-percent annual increases in those cases where the employer’s initial contribution is below 6%. How does the Agreement of Participation, and the 28 January 2000 amendment that pegs employer contributions to it, tie in with this? The answer is that it makes provision for those cases where the employer’s contribution is from the outset agreed to be higher, not lower, than 6%. [10] His main assailant fire thus quenched, counsel invoked an entirely new contention. He argued that the provisos to the rule specifying the employer’s contributions had to be read so as to limit the annual increases altogether. To understand his submission it is necessary to set out the provision in question more fully: ‘Participating Employer’s contributions at least 5 per cent [as amended 28 January 2000] of FUND SALARY, less the cost of providing the funeral benefits but inclusive of the cost of providing the RISK BENEFITS and the administration costs; provided that (a) if at any time the RISK BENEFITS and administration costs exceed 5 per cent, the higher amount shall be paid by the PARTICIPATING EMPLOYER; (b) every 1 January the PARTICIPATING EMPLOYER’S contribution shall increase (c) by 1% up to a minimum level of 6% of FUND SALARY; (d) in respect of a MEMBER who immediately prior to his PARTICIPATION DATE was a member of an industrial fund, the PARTICIPATING EMPLOYER shall continue to contribute to the FUND at the rate at which he was contributing to such an industrial fund on behalf of such MEMBER. It is specifically provided that the contribution rate(s) applicable shall be as specified in the AGREEMENT OF PARTICIPATION.’ [11] The basis for this argument is the alphabeticised sub-paragraphing, from which it is immediately evident that (c) is not separate but is part of (b). Seizing on this, counsel urged us to integrate also (a) into (b), so as to constitute the first three sub-paragraphs a single semantic entity. Thus unsundered, counsel argued, the new single paragraph meant that only when risk benefits and administration costs exceed 5 per cent, would the employer’s contribution increase by 1% every January. [12] The argument is entirely unpersuasive. For one thing, the meaning counsel urges us to attribute to the consolidated provisos is improbably unbusinesslike, for what if risk benefits and administration costs exceed the default contribution by more than 1%? On counsel’s reading, the employer’s contribution can increase by only 1% at a time, every 1 January. That makes no sense. [13] Second, counsel’s reading requires the insertion of words between (a) and (b) for the two to make sense together – at least the words, ‘and then’; or, more comprehensibly, as counsel conceded in argument, ‘then in that event and only in that event’. Such a radical prosthetic addition is quite unnecessary when the two provisos operate with perfect composure on their own. [14] Third, it is clear that (a) and (b) and (d) (in contrast to (b) and (c)) are linguistically distinct. Sub-para (a) is conditional; (b) is unconditional. And (d) is again entirely separate. The provisos cater for three (not as many as four; but certainly not as few as two) distinct situations, in each of which employer dues deviate from the minimum stated in the main body of the provision – (a) provides for excess costs in risk benefits and administration; (b) provides for automatically increased dues (up to a minimum level) in contributions to the main aggregation of the fund; and (d) pegs contribution levels to those of an employee’s previous fund. [15] Finally, counsel’s argument is unworkable for a further reason. It was neither pleaded, nor put to the only witness called at the trial, Mr Gary Lamont, the fund’s administration manager. At no stage was the fund confronted with the possible interpretation that the automatic annual increase sub-proviso (b) envisaged was triggered only when risk benefits and administration costs were excessive. Had the fund been given the opportunity to deal with this possible interpretation, it may have called another witness, which may have enabled it to prevail even on the interpretation now urged before us. [16] But even setting aside the pleading and cross-examination objection, the argument is not tenable. The only editing clean-up the clause requires is to add (c) to (b): nothing more. So clearly mistaken is the split between (c) and (b) that one is impelled to the conclusion, suggested to counsel during argument, that it resulted from a mistaken keystroke, which triggered the operation of the automatic paragraph-numbering function of the word- processing programme. [17] It follows that the judgment of the High Court was correct, and that the appeal must be dismissed with costs. E CAMERON JUDGE OF APPEAL Appearances: For appellant: GR Thatcher Instructed by Bowne Brodie Attorneys, La Lucia Ridge Matsepes Inc, Bloemfontein For respondent: PU Fischer Instructed by: Brodkin & Sohn Attorneys, Pietermaritzburg Lovius Block, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: Thursday 27 November 2008 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal William Van Der Riet Family Trust t/a Cathedral Peak Hotel v Hospitality Industry Pension Provident Fund (64/2008) [2008] ZASCA 148 (November 2008) In a judgment delivered today, the Supreme Court of Appeal has held that the Cathedral Peak Hotel in KwaZulu-Natal is obliged to pay increased employer contributions to the hospitality industry pension provident fund. The dispute between the hotel and the fund arose from differing interpretations of the fund’s rules, which have statutory force under the Pension Funds Act 24 of 1956. The dispute has wider significance for other employer members of the fund. The hotel contended that when it joined the fund, the document entitled ‘agreement of participation’, which it signed, pegged its contributions at 5%. The fund differed, and sued the hotel in the Bergville magistrate’s court for under-payments. The magistrate upheld the hotel’s contentions, but the high court in Pietermaritzburg (Moleko J, with whom Radebe AJ concurred) reversed this judgment, finding for the fund. The SCA has now upheld the high court’s ruling. Before the SCA, the hotel abandoned its previous contention (which the high court rejected) that the agreement of participation pegged its contributions to 5%. The SCA agreed that this argument was untenable. However, the SCA also rejected a new argument the hotel advanced on appeal, which was based on an interpretation of the fund’s rules themselves. In a unanimous judgment by Cameron JA, with whom Scott JA, Cloete JA, Griesel AJA and Kgomo AJA concurred, the SCA has held that the rules, properly interpreted, entailed that the hotel’s contributions automatically went up by 1% per year, until a minimum level of 6% was attained. That was the level at which the fund was entitled to enforce contributions from the hotel, and the fund’s action therefore had to succeed with costs.

512

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 319/2015 & 324/2015 In the matter between: JOEST (PTY) LTD APPELLANT and JÖST GmbH + KG FIRST RESPONDENT JVT VIBRATING EQUIPMENT (PTY) LTD SECOND RESPONDENT THE REGISTRAR OF TRADE MARKS THIRD RESPONDENT Neutral Citation: Joest v Jöst (319/2015 & 324/2015) [2016] ZASCA 110 (1 September 2016) Coram: Navsa, Petse, Willis, Saldulker and Swain JJA Heard: 15 August 2016 Delivered: 1 September 2016 Summary: Trade marks and passing off : contested proprietorship of confusingly similar registered trade marks : application and counter-application for expungement of trade marks from register and consequential relief : mark originating from first respondent, a German based company and holding company of a subsidiary which introduced its machines and components into South Africa bearing the mark indicating provenance : years later ownership in subsidiary relinquished : commercial relationship continuing : no acquisition of proprietorship by former subsidiary : licensee and not licensor : ineffective assignment of rights not validly held. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Gauteng Division of the High Court, Pretoria (Ismail J sitting as court of first instance). The following order is made: 1. The main appeal is dismissed with costs including the costs of two counsel. 2. The cross-appeal is upheld with costs including the costs of two counsel. 3. Paragraph 2.3 of the order in the court below is amended to read as follows: „2.3. The first respondent in the counter-application is ordered to pay the costs of the counter-application.‟ 4. The order of the court below is supplemented by the inclusion of the following orders: „2.4. The first respondent in the counter-application is interdicted and restrained, in terms of Section 34(1)(a) the Trade Marks Act 193 of 1994, by itself or through its servants or agents, from infringing the rights of the first applicant in the counter-application flowing from the registration of the first applicant in the counter-application‟s registered trade mark nos. 2006/29062 & 63 in classes 7 and 9 by using, in the course of trade, in relation to the goods and services identical to the goods included in trade mark nos. 2006/29062 & 63, the identical mark or any mark so similar thereto as to be likely to deceive or cause confusion. 2.5 The first respondent in the counter-application is interdicted and restrained from passing off its goods and services as being those of the first applicant in the counter- application or as being connected with those of the first applicant in the counter-application in the course of trade, by the use of the marks: JOEST, JOST, JÖST, , , , , and related get up, or any other trade mark or get-up that is confusingly similar to the first applicant in the counter-application‟s and trade marks and get-up. 2.6 The first respondent in the counter-application is ordered to remove the marks: JOEST, JOST, JÖST, , , , and related get up, or any confusingly or deceptively similar trade marks, from all matter in their possession or under their control, including all signs, labels, websites, promotional and advertising material, packaging, stationery and other printed or electronic matter of any nature and where the marks are inseparable or incapable of being removed from such material to which they have been applied, delivering up such matter to the first and second applicants in the counter- application‟s attorneys. 2.7 It is directed that an enquiry be conducted, pursuant to Section 34(4) of the Trade Marks Act 194 of 1993, to determine the quantum of damages suffered by the first applicant in the counter-application as a result of the infringement of the first applicant in the counter- application‟s trade mark, or the payment of a reasonable royalty for the use of its trade mark in lieu of such damages, and that the first respondent in the counter-application pay such damages and/or reasonable royalty as may be found to be payable by the first respondent in the counter-application to the first applicant in the counter-application in the course of such enquiry, and that 2.8 To this end, in the event of the parties being unable to agree on the procedure to be adopted in such enquiry, either party may approach this court for directions as to the procedure to be adopted, on these same papers, duly supplemented where necessary.‟ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Navsa JA (Petse, Willis, Saldulker and Swain JJA concurring) The Issue [1] The central question in this case, is which of the parties can claim to be the lawful proprietor of the Joest/Jöst trademark in South Africa. The answer to that question will be determinative of both the appeal and the cross-appeal. The appeals are pursuant to a decision of the Gauteng Division of the High Court, Pretoria (Ismail J), determining an application and counter-application for interdictory and associated relief in relation to the use of the mark. The court a quo held that the first respondent is the lawful proprietor. The background extracted from the affidavits filed in the court below and the reasoning and conclusions of that court leading up to the present appeal and cross-appeal, are set out hereafter. The background [2] The parties agree that Joest is simply the English spelling of the German surname Jöst and that they are confusingly similar. The appellant, Joest (Pty) Ltd, is a South African company with its principal place of business in Spartan, Kempton Park, Gauteng Province. The first respondent, Jöst GmbH+Co. KG, is a German company with its registered address in Dülmen, Germany. I shall, for the sake of convenience, refer to the appellant and the first respondent in the main appeal as J and Jöst, respectively. These appellations will make it easier when dealing with both the main and cross-appeals. [3] The second respondent, JVT Vibrating Equipment (Pty) Ltd (JVT), a South African company with its principal place of business in Bedfordview, Gauteng, which was incorporated in 2012, is a subsidiary of Jöst and a licensee, authorised to distribute the latter‟s products in South Africa, and is in direct competition with J in this country. The products so manufactured and distributed in South Africa bear the Joest/Jöst mark. [4] Jöst is a multinational company that has its origins when a company was first established in Germany during 1919 by a Mr Jöst and a Mr Fiege. At that stage they incorporated a company called JÖST Schwingungstechnik GmbH. Jöst and its predecessor‟s core competencies included the design and manufacture of vibrating machines and vibratory drive units and establishing and designing solutions in process engineering. Jöst operates, either directly or through subsidiaries, in jurisdictions around the world and its products are applied, amongst others, in the foundry and steel industry, the mining industry, chemical and plastics industry and the thermal processing of bulk material. That Jöst and its predecessors in title have been in business for 93 years is unchallenged. The companies through which Jöst operates in France, Australia, the United States of America, China and Slovakia all, in one form or the other, bear the Joest name. Although J, in a replying affidavit disputes the present extent of Jöst‟s international operations and the degree of its commercial success, the essential averments that Jöst has an international presence and reputation and is engaged in the industries referred to above, are not denied and must be accepted. It is not in dispute that Jöst is the proprietor of various Jöst and Joest trade marks in jurisdictions throughout the world. [5] In the 1970s the shareholders of JÖST Schwingungstechnik GmbH bought a company called Pontzen Engineering GmbH (Pontzen). In 1984 the two entities merged under the Pontzen banner and the new company licenced its business operations to an associated company called Jöst KG. Pontzen later changed its name to the first respondent‟s present designation. Thus, Jöst came into being. The averments by Jöst that its predecessor, in the embodiment referred to at the beginning of this paragraph, entered the South African market using the Joest mark and the logo and that the brand was promoted under the English spelling of Jöst, namely, Joest, is essentially unchallenged. [6] J‟s predecessor in title, Joest Vibration Technics (South Africa) (Pty) Ltd (Technics), was first incorporated as a South African company in 1976 to operate Jöst‟s business under licence from Jöst. At the time of its incorporation, Technics was a wholly owned subsidiary of Jöst. In October 1987, although Technics changed its name to Joest Vibrations (Pty) Ltd (JV), it remained wholly owned by Jöst. During the period from 1976 until 1989 it is common cause that Technics and JV, whilst wholly owned by Jöst, imported from Jöst and manufactured machines which they sold and distributed for use in the industries referred to above, under licence from Jöst using its know-how and technology. During that period the machines all bore the Joest mark. [7] Jöst‟s assertion, that in 1989, because of international pressures to disinvest from apartheid South Africa, it entered into a written sale of shareholding agreement, in terms of which it sold 75 per cent of its shareholding in JV to the Vogel family that now controls J, is not effectively contested. In terms of that agreement the right of JV to use the Jöst mark was restricted to certain jurisdictions in Southern Africa. Simultaneously a manufacturing licencing agreement was concluded between JV and Jöst. This agreement was updated and replaced in 1996. Jöst contended that it is implicit in all these agreements that the products manufactured in terms thereof would bear the Joest mark used by Jöst. This, of course, is challenged by J which contended that these agreements were merely ones in terms of which it was licenced to use Jöst‟s know-how and confidential information. I shall, in due course, deal with the relevant provisions of the 1989 and 1996 written agreements and deal with the parties‟ respective contentions in relation thereto. [8] During November 1992 JV changed its name to Joest (Pty) Ltd, which at that time apparently was not the same entity as J. In 1996 the remaining 25 per cent shareholding in that company was sold to the Vogels. The sale of shares agreements referred to in this and the preceding paragraph did not cater for the assignment of the Joest/Jöst marks. Between August 1998 and July 2009 there were shareholding changes in relation to J‟s predecessors in title which are not of any real moment. [9] Jöst‟s assertion that at the beginning of the 1990‟s it updated its logo as follows, , is not substantively disputed. It is also not disputed that following Jöst‟s update of this logo, J‟s predecessor similarly updated its own logo to match. Nor is it challenged that the copyright in the logo was assigned by its designer to Jöst. According to the trade mark register, Jöst is the proprietor in South Africa of the following trade mark registrations: (a) no. 2006/29062 JÖST logo in class 7 in respect of „Construction machines, electricity generators; motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); machine drives (except for land vehicles); dosing drives and installation; hangers (parts of machines); vibration drives (machines); magnetic data oscillators (machines); unbalanced mass vibration generators (machines); directed force exciters (machines); vibration reactors (machines); magnetic vibrators (machines); unbalanced motors (machines); shaft drives; machines for conveying, sifting, classifying, dosing and/or crushing; processing machines, resonance conveyor installations; sliding conveyors; spiral conveyors; feed installations; lifting and tilting apparatus (machines); hydraulic tilting apparatus; container handling systems; transport devices and systems for bulk goods (machines); casting coolers (machines); sand coolers (machines); vibration coolers and dryers (machines); fluidised bed coolers and dryers; dosing toughs (machines); oscillating conveyor pipes (machines); vibrating screening machines; separating toughs (machines); shake-out grids (machines); shaking tables (machines); sand lump breakers (machines); sieves; sorting tables (machines); classifying devices.‟ (b) no. 2006/29063 JÖST logo in class 9 in respect of „Electric and electronic equipment; apparatus for devices for controlling and/or regulating machines and installations; controls as well as measuring devices, apparatus and instruments for machines and installations; weighing devices, apparatus and instruments, scales.‟ [10] In jurisdictions around the world Jöst has registered the Joest/Jöst mark or applied therefor in the following forms in relation to machinery manufactured by it:1 [11] Mr Dieter A Jöst, a grandchild of one of the two founding members of Jöst, who was also a shareholder and employee of J and its predecessors in the years between 1972 and 2005, stated in an affidavit in support of Jöst‟s case that it was never intended by way of the sale of shares agreements referred to above or the manufacturing agreement that Jöst would divest itself of the proprietorship of the Joest/Jöst mark. 1 J‟s reaction to the documentation in this regard appended to Jöst‟s answering affidavit is that it is irrelevant and that, in any event, much of it is in foreign languages that are not translated, and cannot meaningfully be responded to. Some of the documentation is undoubtedly in languages other than English, however certificates of registration in the United States Patent and Trade Mark office is in English as is a certificate of registration from the International Bureau of the World Intellectual Property Organisation (WIPO) certifying that the indications in the certificate conform „to the recording made in the International Register of Marks maintained under the Madrid Agreement and Protocol‟, and are clear in their wording. [12] On 29 July 2009, J in its present form, was established. J too, like Jöst, designs and manufactures vibrating equipment that it supplies to the bulk material handling market, which includes the industries supplied by Jöst. Clearly, it is the competition between the two that lies at the heart of the present litigation. [13] On 30 April 2012, the 1996 written manufacturing licencing agreement referred to above was terminated. It is necessary to record that during 1996, Gunter Vogel, the chairperson and a non-executive director of J, registered the Joest trade mark in his own name and during 2010 registered the logo used by Jöst in J‟s name. The mark registered during 1996 was only assigned to J in 2012. In terms of the trade marks register, J is the proprietor in South Africa of the following trade mark registrations: (i) no. 1996/00964 JOEST in class 7 in respect of: „Machines and machine tools, including vibrating screens and feeders for use in industry‟, (ii) no. 2010/00726 JOEST in class 37 in respect of: „Building construction, repair, installation services‟; (iii) no. 2010/00727 JOEST logo (colour) in class 7 in respect of: „Machines and machine tools, motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural implements other than hand operated; incubators for eggs‟, (iv) no. 2010/00728 JOEST logo (colour) in class 37 in respect of: „Building construction, repair, installation services‟. The marks set out above are clearly confusingly similar to that used by Jöst in jurisdictions around the world. [14] On 21 March 2011 discussions took place in Perth, Australia, between representatives of J and Jöst in contemplation of an extension of the 1996 licence agreement. The following admitted part of the minutes of the meeting is relevant: „The trademark which Gunter Vogel initially had registered will be transferred to JOEST Germany. During the course of the prolongation of the license agreement an amendment will be made specifying the details how the licensee can make use of this trade name during the lifetime of the license contract.‟ The extension of the agreement did not materialise. [15] According to J, the licencing agreement was terminated in 2012 because it had come to the realisation that, for a number of preceding years it had received very little in the form of useable know-how from Jöst, particularly if regard was had to the licencing fees. J also contended that the know-how was of limited use in relation to South African mining conditions. J stated that it had over the years developed its own technology in its own name and sold products it had developed and manufactured to customers under the Joest name. This, of course, is strenuously denied on behalf of Jöst, which in substantiation supplied copies of correspondence, plans, diagrams and photos, that it contended demonstrated on-going assistance and input to J where the latter itself endeavoured to manufacture products. Para 7.8 of J‟s founding affidavit in the main application is important. Following on what is set out at the beginning of this paragraph, the principal deponent on behalf of J stated the following: „In short, the know-how licence to [J] was not really appropriate for the peculiar conditions of the South African mining industry and, over the years, [J] had to develop technology of its own and manufactured and sold JOEST products to its customers that did not incorporate or embody any know-how received from [Jöst]. J developed its own range of JOEST products that became successful in the industry and popular amongst [J‟s] customers.‟ I shall, in due course, return to the significance of this passage. [16] J‟s attitude is that Jöst unlawfully proceeded to register the marks referred to above on 1 December 2011 without its knowledge or consent. J alleged that its concern was that the JÖST trade mark was virtually identical to its JOEST trade mark. The affidavit by Gunter Vogel in support of J‟s case went on to state: „[P]honetically, the two marks are identical. Bearing in mind that the letter “Ö” in German is the equivalent of the letters “OE” in English, JÖST and JOEST are alternative forms of the same mark. I submit that, at the very least, the two marks are confusingly and deceptively similar and use of the respective marks by different proprietors will inevitably give rise to deception and confusion in the marketplace. It appears from correspondence exchanged between [J‟s] attorneys and [Jöst‟s] attorneys (which will be dealt with below) that [Jöst] agrees that the marks JÖST and JOEST are confusingly similar and, in the circumstances, I do not intend to deal with this aspect in any more detail‟. As stated above on this latter aspect the parties are ad idem. [17] It is common cause that the goods covered by the parties‟ respective trade marks in classes 7 and 9 overlap. J contended that Jöst‟s trade mark registrations in classes 7 and 9 are liable to be removed from the register of trade marks on the basis that they are entries wrongly made or, alternatively, entries wrongly remaining, on the register, within the meaning of s 24(1) of the Trade Marks Act 194 of 1993 (the Act). In particular, these registrations, so it was submitted, offend against, inter alia, the provisions of the following sections of the Act: (a) Section 10(3), in that Jöst has no bona fide claim to proprietorship in relation to the JÖST trade mark in South Africa; (b) Section 10(12), in that use by Jöst, or any licensee, such as JVT, would be likely to deceive or cause confusion, in view of J‟s extensive reputation and goodwill in respect of its JOEST trade mark in South Africa; (c) Section 10(14), in that the mark JÖST is identical or so similar to J‟s (earlier) registered trade mark JOEST, that use thereof in relation to the goods in respect of which the mark has been registered and which are the same as or similar to the goods in respect of which J‟s JOEST trade mark is registered, would be likely to deceive or cause confusion; (d) Section 10(15), in that the mark JÖST is identical or so similar to J‟s (later) registrations for JOEST that use thereof in relation to the goods in respect of which it has been registered and which are the same as or similar to the goods and services in respect of which J‟s (later) marks are registered, would be likely to deceive or cause confusion. [18] During October 2012 J launched an application in the court below seeking the expungement of JÖST trade mark registrations and sought an interdict restraining JVT from infringing its rights that arise from its trade mark registrations referred to above and from passing itself off as J or being connected in the course of trade with J by using the mark JÖST or JOEST. [19] A further spur to the application in the court below appears to be a legal opinion obtained by J from a German legal expert that as the 1996 licencing agreement was subject to the laws of the Federal Republic of Germany and fell to be interpreted according to those laws, the agreement could not be interpreted as constituting a trade mark agreement. [20] As is apparent from what is set out above, the application was resisted by Jöst, which in turn launched a counter-application in terms of which it sought the expungement of J‟s trade mark registrations referred to above and similarly sought interdictory relief of the kind referred to above. Relief was sought against J as well as against Gunter Vogel. Before us, however, the latter relief was not persisted in. [21] It is now necessary to have regard to the relevant provisions of the 1989 „Sale of Shareholding Agreement‟. The agreement was between Gunter Vogel and two other members of the Vogel family and Jöst (at that stage Pontzen) for the transfer of 75 per cent of the shareholding of the company as recorded in para 7 above. In terms of that agreement the purchasers of the shareholding accept that the company (JV) was obliged to buy particular machinery and components from Jöst, unless otherwise agreed to in writing. The purchasers undertook that they would „enter into a licence agreement with Jöst‟ and, furthermore, were „restricted to carrying on its business in the region‟. The region was defined to mean „the Republic of South Africa as it was constituted on 31 May 1961, Namibia, Botswana, Lesotho, Mozambique, Zambia and Zimbabwe‟. As contemplated, a manufacturing licencing agreement was simultaneously concluded. Although neither party could locate that agreement it is common cause that the licence agreement concluded between the parties on 17 June 1996 is in similar terms. [22] The 1996 licence agreement is, as accepted by Jöst, a manufacturing agreement. It records that Jöst as licensor had been manufacturing and selling articles listed therein and that J had manufactured licenced products under a renewable know-how licence from the licensor since 1 January 1989, which licence expires on 31 December 1996. The agreement notes that the parties were desirous that the licencing arrangement be continued. It then goes on to record that J is authorised to exploit Jöst‟s know-how in respect of standard and non-standard products set out therein. Furthermore, the agreement notes that the licensee shall not grant sub-licences, without the prior written consent of the licensor. The territory in Southern Africa over which the licence extended is set out. Clause 16 of that agreement reads as follows: „The Licensee shall mark all products made by him under licence and supplied to his customers with serial numbers. Should the Licensee delete the name “JOEST” in its registered company name, the Licensee shall affix to such products a label inscribed “Manufactured under Licence of JÖST, Germany”.‟ According to Jöst, the inscription set out above was necessary because of European Union Directive 94/9/EC, relating to equipment and protective systems intended for use in potentially explosive atmospheres, which stipulates that the manufacturer of such equipment must state its company name and other identifying marks on such products, that the manufacturer is obliged to ensure strict quality and other control over these goods, and that it is liable under law for such goods. This assertion is unchallenged, save that J contends that it is irrelevant. [23] The assertions by J‟s expert concerning German law and its application to the agreements referred to above was countered in the answering affidavit by a legal expert in support of Jöst‟s case, who concluded that: „[I]n view of the special relationship between them, particularly the fact that [J‟s] predecessor in title was a wholly owned subsidiary of [Jöst], the agreements were no more than what was expected: a technology licence agreement with the implicit further licence to use the JOEST trade marks on such products‟. [24] In responding to what was said by Mr Dieter A Jöst, as is set out in para 11 above, J, in its replying affidavit, merely stated that those allegations were denied insofar as they did not accord with the assertions in its founding affidavit that the licencing agreement was merely one relating to know-how and technology. Furthermore, the assertions by Mr Dieter Jöst were sought to be countered by J, with an affidavit by Dr Uwe Hautz who, at one stage, was the managing director of Jöst as well as a director of J. According to Dr Hautz he was unaware of any trade mark licence agreement. [25] In exploring the relationship between the parties, the following uncontested facts that appear in para 53 of Jöst‟s answering affidavit, are also not without significance: „Before the termination of [J‟s] licence agreement in April 2012, it yearly imported, under its licence with [Jöst], between €1,000,000.00 and €1,500,000.00 worth of vibrating drive units (electromagnetic drivers) per year from [Jöst], all of which were clearly marked with [Jöst‟s] JÖST trade mark.‟ [26] Jöst is adamant that J is the only party that can be accused of mala fides in relation to the registration of the Joest/Jöst mark. It rejects the accusation on behalf of J that it proceeded to register the marks unlawfully and in contravention of the latter‟s rights. Jöst was emphatic that J‟s trade mark registrations, set out above were effected surreptitiously and opportunistically and that they only came to Jöst‟s knowledge years later. Judgment in the court below [27] Ismail J, in addressing the question posed at the beginning of this judgment, considered the provisions of the 1996 agreement as set out at para 22 above to be significant. At para 26 of the judgment the learned judge stated the following: „To this end one must ask the rhetorical question why would [Jöst] have insisted in the agreement that [J] could utilize “[Jöst‟s] mark Joest and that if the mark were deleted from the product, they would have to bear the inscription „Manufactured under License of Jöst, Germany.‟”‟ [28] In the immediately ensuing paragraphs of the judgment of the court below the following appears: „27. Apart from the reason furnished in para [25], supra I am of the view that it would have been financially and commercially naïve for the German company to allow the South African company carte blanche usage of its name, on products locally manufactured. 28. I am of the view that the agreement was more than a know how agreement, that it was a trade mark agreement, notwithstanding it not having been expressly stipulated in the agreement as such.‟ [29] The court below went on to make the following order: „1. The application is dismissed with costs, such costs to include the costs of senior counsel. 2. The counter-application succeeds in that I make an order to the following effect: - 2.2 Directing the third respondent [the Registrar of Trade Marks] to rectify the Trade Mark register in terms of section 24(1) of the Trade Marks Act, 194 of 1993 in relation to the trade mark registration number 1996/00964 JOEST in class 7 by removing it from the register. 2.3 Directing the third respondent [the Registrar of Trade Marks] to rectify the Trade Mark Register in terms of section 24(1) of the Act in relation to trade mark registration no. 2010/00726 JOEST in class 37, trade mark registration no. 2010/00727 JOEST in class 7 and trade mark registration no. 2010/00728 JOEST in class 37 by removing the registration from the Register. 2.4 The respondents in the counter-application are ordered to pay the costs of the counter-application such costs to include the costs of senior counsel.‟ [30] It is against those conclusions and the resultant orders that J and Jöst, with the leave of the court below, appeal and cross-appeal, respectively. [31] The cross-appeal is concerned with the failure of the court below to grant interdictory relief against J in relation to the alleged infringement of Jöst‟s rights flowing from the registration of J‟s trade marks set out earlier in this judgment, coupled with an order that the marks be removed from all matter in J‟s possession. Furthermore, the court below did not order that an enquiry be conducted pursuant to s 34(4) of the Act, to determine the quantum of damages suffered by the first applicant as a result of the infringement of the first applicant‟s trade mark, or the payment of a reasonable royalty for the use of its trade mark in lieu of such damages, and that J pay such damages and/or reasonable royalty as may be found to be payable by it to Jöst in the course of such enquiry. The orders sought and not granted are set out in para 5, 6, 10 and 11 of Jöst‟s notice of motion in the counter- application in the court below. [32] Before us it was agreed that a decision on the proprietorship of the Joest/Jöst mark would be determinative of both the appeal and the cross-appeal and would decide: (a) Which party‟s trade mark registrations are validly on the register and which ones should be expunged therefrom; (b) Which party shall be rightfully entitled in future to make use of the trade mark Joest/Jöst in South Africa; and (c) Which party shall in future be prevented from making use of the trade mark Joest/Jöst in South Africa. Submissions before us [33] On behalf of J it was submitted that the court below correctly found that the outcome of its cause of action for trade mark infringement and passing off depended on a proper interpretation of the 1996 agreement. However, J further submitted that the court below erred in finding that that agreement was a trade mark licence agreement. Essentially it was contended on behalf of J that the court below ought to have found that the agreement was merely a know-how agreement and that it was entitled to the relief it claimed. It was agreed between the parties that the applicable law in relation to the 1996 agreement was German law. It was submitted on behalf of J that the court ought to have taken into account in its favour the shareholders agreement concluded in 1989, and should have had regard to the evidence tendered on behalf of J, namely, that of Dr Kador, an independent German attorney who took the view that the agreement could not be interpreted as anything more than a mere know-how licencing agreement based on the principles of interpretation of German law. It was contended on behalf of J that the evidence tendered on behalf of Jöst, namely, that of Mr Hackel concerning the application of principles of interpretation according to German law was not that of an independent objective expert as he was Jöst‟s attorney. [34] Jöst, on the other hand, took the view that it was important to consider the history of the relationship between the parties and the capacity in which J made use of the mark JOEST and that it is that aspect that lies at the heart of the dispute between the parties. It was submitted on behalf of Jöst that J made use of the mark JOEST as a licensee and not as a proprietor in its own right and it could therefore not be said to be the proprietor of the mark. Jöst submitted that since the JOEST mark has been in use in South Africa on an extensive basis at least since 1976 by the appellant, but not in its own name, it could not therefore claim the reputation and goodwill for the purposes of its claim of passing off. [35] According to Jöst the history set out earlier in this judgment makes it clear that Technics, JV and J were mere licensees authorised to use the JOEST/JÖST mark. That this is so is further evidenced by the provisions of the sale of shares agreements referred to earlier and also by the 1996 licencing agreement. [36] In respect of the law applicable to the interpretation of the 1996 agreement it was pointed out on behalf of Jöst that the legal experts on either side were at least agreed that according to German law the interpretation of the licence agreement would be resolved by determining the intention of the parties, taking into account their mutual interest and also the situation and negotiations before the signing of the agreement. They merely disagreed about the application of this principle. [37] Jöst also contended that Mr Vogel‟s initial registration of the JOEST trade mark in his own name is destructive of J‟s case, because it would mean that he personally owned the reputation and goodwill. This has to be seen against his contradictory assertion that the reputation attached to J and its predecessors. In essence, it was contended that the only reasonable conclusion is that the provisions of the licence agreement, together with the totality of circumstances, point to J not being the bona fide proprietor of the mark. Jöst accuses J of being opportunistic and manipulative. [38] It was submitted on behalf of Jöst that the probabilities are overwhelmingly in their favour and that business logic and common sense dictate that a parent company, when incorporating a local subsidiary, will not divest itself of its trade mark and will only licence its „offspring‟ to use it. It was submitted on behalf of Jöst that, as ordered by the court below, it was entitled to the expungement of the trade marks registered in J‟s name, but contended that the continued use by J of the Joest/Jöst mark amounted to a passing off at common law and should have been interdicted as prayed for in the counter-application. Conclusions [39] A convenient starting point is a reminder of the purpose of conventional trade marks such as trade names and of logos. Trade mark law has as its subject matter trade names, symbols and signs, which have as their object the conveyancing of information concerning trade origin.2 At the heart of trade mark law is truth in competition.3 In Commercial Auto Glass (Pty) Ltd v BMW AG [2007] ZASCA 96; 2007 (6) SA 637 (SCA), Harms ADP said the following (para 8): „The object of trade mark law as reflected in s 34(1)(a) and (b) [of the Act] is to prevent commercial “speech” that is misleading. Trade mark use that is not misleading (in the sense of suggesting provenance by the trade mark owner) is protected not only constitutionally but in terms of ordinary trade mark principles. As Justice Holmes said [in Prestonettes Inc v Coty 263 US 359 (1924) at 368]: “When the mark is used in a way that does not deceive the public, we see no sanctity in the word as to prevent it from being used to tell the truth.”‟ [40] A fundamental problem for J is that during the time that Jöst‟s predecessors from 1976 to 1989 were wholly owned subsidiaries, they indisputably operated within South Africa under licence from the parent company in Germany and that the machines imported, manufactured and distributed bore the Joest/Jöst mark, indicating Jöst as house of origin. The reputation and goodwill undoubtedly attached to Jöst. [41] Before us it was accepted on behalf of J that the heart of its case could be located in para 7.8 of its founding affidavit, the essential averments of which are set out in para 15 above. In terms of that subparagraph, J is constrained to accept the truth set out in the first sentence of the preceding paragraph. J, however, placed great store in the allegations that it developed and manufactured its own machines using its own technology alongside those that it manufactured under licence and to which it attached the Joest/Jöst mark, thereby building its own reputation. In para 7.8 of its founding affidavit J stated that „for quite a number of years prior to the termination it was [J‟s] view that it had received very little in the form of usable know- how from [Jöst], compared to the licence fees that it paid‟. Furthermore, according to 2 See the discussion of Société des Produits Nestlé SA v Cadbury UK Ltd [2013] RPC 14 (ChD) para 20, in CE Webster and GE Morley (eds) Webster and Page’s South African Law of Trade Marks, Unlawful Competition, Company Names and Trading Styles (Service Issue 19, November 2015), para 1.1 at 1-3. 3 Ibid. J, the two sale of share agreements in 1989 and 1996 and the concomitant manufacturing agreements were integral to its submission that all these factors taken together lead to the conclusion that it had acquired proprietorship in the Joest/Jöst mark. For reasons that follow, I have great difficulty with these submissions. [42] It must be understood that the wholly owned subsidiaries, during the time period referred to above, imported, manufactured and distributed machines under licence from Jöst in the circumstances spelt out in para 40. Their usage of the Joest/Jöst mark was also clearly in line with the usage by Jöst internationally. The sale of share agreements referred to above and the 1996 manufacturing agreement did not change these facts. There was therefore patently no need for a written agreement in relation to the use of the Joest/Jöst mark as the subsidiaries were under the control of Jöst. Thus, the companies from which J claims to derive its ownership of the mark by virtue of the sale of shares agreements were not the proprietor of the mark. Even on J‟s version of events, as set out in para 7.8 of their founding affidavit, referred to in para 41 above, it was using Jöst‟s know-how and technology for which it paid a royalty up until „a few years prior to [2012]‟. That description is, in itself, deliberately vague but it is an indication that the relationship that existed between Jöst and its wholly owned subsidiaries continued between Jöst and J, at least up until that time. In this regard it is worth quoting from Webster and Page: „An agent or distributor who merely sells, or imports and sells, goods manufactured by another, without adding anything to the mark or get-up under which they are produced, does not thereby acquire any goodwill in the name or get-up; for those symbols thereby acquire a reputation as indicating that the goods emanate from that particular manufacturing provenance and not that they were imported and/or distributed by that particular agent.‟4 [43] In terms of the 1989 sale of shares agreement, the purchaser (the Vogels) undertook to enter into a licencing agreement with Jöst. The 1989 manufacturing agreement, which was in identical, or at least very similar terms to the 1996 agreement, provided that the purchasers undertake to use the name of the company and/or to use the name Jöst only in the region. 4 See Webster and Page (supra) para 15.18.1 at 15-47 and the authorities there cited. [44] Before proceeding to an interpretation of the 1996 agreement, I interpose to deal with the application of German law. The parties are rightly ad idem concerning the general method of interpretation of contracts in German law: „Generally, under German law, any interpretation starts with the wording of the text of the contract and the parties‟ concurrent understanding of it. If this does not lead to a solution, the objective meaning in the light of the circumstances and interests of the parties is decisive.‟5 This is hardly significantly different to the applicable principles of our law.6 [45] It is not for the respective experts to interpret the agreement but for the court to follow the German approach to the interpretation of the agreement and itself to engage in the interpretation exercise. The clauses of the sale of shares agreements and the manufacturing licencing agreements referred to above evidences a continuation of the past relationship between the parties. There certainly is no clause in any of the agreements that cater for the transfer of the proprietary rights to the Joest/Jöst mark. I agree with the submission on behalf of Jöst that, if J had already owned the rights in and to the mark, there would have been no need to deal with sub-licensing and certainly no reason to place a limitation on the use of the licence by limiting it to a region. The labelling provision set out hereafter clearly points to the proprietorship of the marks being maintained by Jöst. Clause 16 of the 1996 agreement reads as follows: „Labelling The Licensee shall mark all products made by him under licence and supplied to his customers with serial numbers. Should Licensee delete the name “JOEST” in its registered company name, the Licensee shall affix to such product a label inscribed “Manufactured under licence of JÖST, Germany”.‟ These provisions, as held by the court below, militate against the assertion of acquisition by J of proprietorship of the Joest/Jöst mark. [46] Additionally, in deliberating the question of proprietorship of the mark it is worth noting again what is set out in para 25 above, namely, that during the years leading up to the termination of the licencing agreement in 2012, J imported from 5 Ulrich Magnus „The Germanic tradition: application of boilerplate clauses under German law‟ in Giuditta Cordero-Moss (ed) Boiler Clauses, International Commercial Contracts and the Applicable Law (2011) at 181. 6 In this regard, see Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA) and the collection of authorities there cited. Jöst components in an amount of up to €1 500 000 per year, all of which clearly bore the Jöst mark. This is to be considered alongside the assertion by Jöst that it maintained quality control over items which bore its mark and that the mark was required in line with European Union Directives. What is clear is the house of origin of the machines and components was identified as that of Jöst. [47] The minute of the meeting held in Australia referred to in para 14 above is another factor that counts against J‟s contention that it is the proprietor of the Joest/Jöst mark. It is apparent that the meeting took place after it was discovered by Jöst that Mr Gunter Vogel had registered the mark in his name. On J‟s version, there should have been no need to undertake, as recorded in the minute, that the registration would be transferred to Jöst and that J would act as licensee. [48] Of significance, too, is clause 19 of the 1996 agreement, which provides: „The Licensee shall not manufacture or sell products which compete with the “Licensed Products” during the duration of the Contract although it shall be permitted to manufacture and/or sell products with a different technology.‟ [49] Returning to para 7.8 of J‟s founding affidavit in the main application, the high- water mark appears to be a postulation of joint ownership of the mark by virtue of the development of own technology to which J attached the Joest/Jöst mark. However, I fail to see how this assists J in its quest to establish proprietorship of the mark. It was a recognised historically well-established distributor of products emanating from Jöst. If it wrongly attached that mark to its own products without the knowledge and approval of Jöst, far from establishing proprietorship of the mark, it could in those circumstances be accused of passing off its products as emanating from Jöst7 and/or of infringing the relevant provisions of s 34 of the Act. [50] Perhaps an even more fundamental problem for J is the fact that the Joest/Jöst marks now claimed by J were first registered in the name of Mr Gunter 7 See in this regard Capital Estate & General Agencies (Pty) Ltd v Holiday Inns Inc & others 1977 (2) SA 916 (A) at 929C. Vogel who then had them assigned to and registered in J‟s name, purportedly in terms of ss 39 and 40 of the Act. Since Mr Vogel does not provide a basis for how he was initially entitled to the proprietorship of the mark and indeed, since no basis exists, and furthermore since he contradictorily stated that the reputation attached to J, it is difficult to see how he was able to transfer the proprietorship of the marks to J.8 It is no answer to say that J was in any event the rightful proprietor of the marks and so the subsequent registration of the mark in its name is unassailable. The basis for the assignment of the right was fallacious; J had not, in its dealings with the Registrar, laid claim to the mark in its own right or sought to have it registered in that manner. [51] It also does not assist J that no royalties were paid in relation to the use of the mark. It is clear that royalties were paid in terms of the manufacturing licencing agreement. It was Jöst‟s prerogative to decide a method of monetizing its reputation and technical know-how and it chose to do so by way of royalties relating to the manufacture of components and machines. [52] For all the reasons set out above, the court below cannot be faulted in its conclusion that Jöst is the proprietor of the Joest/Jöst mark. However, Jöst‟s further submission is correct. J‟s actions have been manipulative and opportunistic. Accordingly, the court below ought, rightly, to have also granted Jöst the full extent of the relief sought by it as set out above, and for that reason the cross-appeal must succeed. [53] The following order is made: 1. The main appeal is dismissed with costs including the costs of two counsel. 2. The cross-appeal is upheld with costs including the costs of two counsel. 3. Paragraph 2.3 of the order in the court below is amended to read as follows: „2.3. The first respondent in the counter-application is ordered to pay the costs of the counter-application.‟ 8 In this regard, see Payen Components SA Ltd v Bovic CC & others [1995] ZASCA 57; 1995 (4) SA 441 (A), at 447H-I, where the nemo dat quod non habet principle was applied in relation to copyright. This is the trite principle that one cannot transfer a right that one does not oneself have. 4. The order of the court below is supplemented by the inclusion of the following orders: „2.4. The first respondent in the counter-application is interdicted and restrained, in terms of Section 34(1)(a) the Trade Marks Act 193 of 1994, by itself or through its servants or agents, from infringing the rights of the first applicant in the counter-application flowing from the registration of the first applicant in the counter-application‟s registered trade mark nos. 2006/29062 & 63 in classes 7 and 9 by using, in the course of trade, in relation to the goods and services identical to the goods included in trade mark nos. 2006/29062 & 63, the identical mark or any mark so similar thereto as to be likely to deceive or cause confusion. 2.5 The first respondent in the counter-application is interdicted and restrained from passing off its goods and services as being those of the first applicant in the counter- application or as being connected with those of the first applicant in the counter-application in the course of trade, by the use of the marks: JOEST, JOST, JÖST, , , , , and related get up, or any other trade mark or get-up that is confusingly similar to the first applicant in the counter-application‟s and trade marks and get-up. 2.6 The first respondent in the counter-application is ordered to remove the marks: JOEST, JOST, JÖST, , , , and related get up, or any confusingly or deceptively similar trade marks, from all matter in their possession or under their control, including all signs, labels, websites, promotional and advertising material, packaging, stationery and other printed or electronic matter of any nature and where the marks are inseparable or incapable of being removed from such material to which they have been applied, delivering up such matter to the first and second applicants in the counter- application‟s attorneys. 2.7 It is directed that an enquiry be conducted, pursuant to Section 34(4) of the Trade Marks Act 194 of 1993, to determine the quantum of damages suffered by the first applicant in the counter-application as a result of the infringement of the first applicant in the counter- application‟s trade mark, or the payment of a reasonable royalty for the use of its trade mark in lieu of such damages, and that the first respondent in the counter-application pay such damages and/or reasonable royalty as may be found to be payable by the first respondent in the counter-application to the first applicant in the counter-application in the course of such enquiry, and that 2.8 To this end, in the event of the parties being unable to agree on the procedure to be adopted in such enquiry, either party may approach this court for directions as to the procedure to be adopted, on these same papers, duly supplemented where necessary.‟ ___________________ M S Navsa Judge of Appeal Appearances: Counsel for the Appellant: P Ginsburg SC (with him L G Kilmartin) Instructed by: Adams & Adams, Pretoria Honey Attorneys, Bloemfontein Counsel for the First and Second Respondents: R Michau SC (with him I Joubert) Instructed by: D M Kisch Inc, Johannesburg Rossouws Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 1 September 2016 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Joest v Jöst (319/2015 & 324/2015) [2016] ZASCA 110 (1 September 2016) MEDIA STATEMENT Today, the Supreme Court of Appeal (SCA) dismissed an appeal by Joest (Pty) Ltd (J) and upheld a cross-appeal by Jöst GmbH + KG (Jöst) against an order by the Gauteng Division of the High Court, Pretoria. Accordingly, the SCA confirmed the expungement from the trade mark register of J’s registered trademark ‘JOEST’ and granted certain ancillary relief to Jöst. It was common cause that the marks ‘JOEST’ and ‘JÖST’ were confusingly similar. The issue before the SCA was therefore which party was entitled to proprietorship of the mark. The facts of the matter were as follows. Jöst is a German company which designs and manufactures machines used in inter alia the mining industry. It operates in a number of different countries through locally incorporated subsidiaries, nearly all bearing either the ‘JÖST’ or ‘JOEST’ mark. ‘Jöst’ is the surname of one of the co-founders of the company, and ‘Joest’ is the English spelling of the same name. One local subsidiary was a South African company incorporated in 1976, originally named Joest Vibration Technics (South Africa) (Pty) Ltd (JV). In 1989, Jöst sold 75 per cent of the shares in JV to the present owners of J, and in 1996 the remaining 25 per cent was sold to them. Simultaneously, licensing manufacturing agreements were entered into in terms of which the South African company was permitted to use the know-how of Jöst in designing and manufacturing machinery. Subsequently, there was some corporate restructuring of the South African business and ultimately J came into being. The commercial relationship between Jöst and JV (and later J) remained the same throughout this period, and the South African company continued to import machinery and used the know-how of Jöst in its own designs and manufacturing. In 1996, Mr Gunter Vogel, one of the owners of JV (and later J), registered the ‘JOEST’ trademark in his own name, and thereafter assigned it to J. Subsequently, Jöst registered the trademark ‘JÖST’. J claimed that proprietorship of the JOEST/JÖST mark vested in it, either because (i) it had acquired proprietorship when Jöst had divested itself of its shares in JV; or (ii) because it had designed and developed machinery in its own right, and so had built up its own reputation to the name. The SCA rejected both these arguments. With regard to the first argument, as noted, the commercial relationship between the South African company and Jöst had not changed following the sale in shares. Therefore, there was no basis to claim that Jöst had divested itself of its proprietorship of the mark at the same time as it had sold its shares in JV. With regard to the second argument, the SCA held that if J had wrongly attached the mark to its own products without the knowledge of Jöst, far from acquiring proprietorship of the mark in its own name, it could be accused of passing off or infringing the provisions of s 34 of the Trade Marks Act 194 of 1993. In addition, the SCA held, there was a further difficulty. As the initial registration of the ‘JOEST’ mark was by Mr Vogel personally, and he had no basis to assert proprietorship over the mark, the initial registration was flawed and he could not have validly assigned the mark to J. Accordingly, the SCA held that proprietorship of the JOEST/JÖST mark at all times remained with Jöst, and upheld the relief claimed by Jöst.

3528

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 163/2020 In the matter between: SOLIDARITY FIRST APPELLANT BEREAVED FAMILIES AS PER ANNEXURE A SECOND APPELLANT and BLACK FIRST LAND FIRST FIRST RESPONDENT LINDSAY MAASDORP SECOND RESPONDENT ZWELAKHE DUBASI THIRD RESPONDENT Neutral citation: Solidarity and Another v Black First Land First and Others (163/2020) [2021] ZASCA (24 March 2021) Coram: PONNAN, MOLEMELA and NICHOLLS JJA and GOOSEN and UNTERHALTER AJJA Heard: 17 February 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives via email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 12h00 on 24 March 2021. Summary: Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 – whether the order granted by the Equality Court declaring the proceedings a nullity is competent. ORDER On appeal from: Equality Court, Gauteng Division of the High Court, Johannesburg (Makgoathleng J sitting as court of first instance): The appeal is upheld. The order of the court a quo is set aside. The matter is remitted to the Equality Court to be finalised, either by the presiding judge or in the event that the presiding judge is, for whatever reason, unable to finalise the matter, any other judge as the Judge President may direct. JUDGMENT Nicholls JA (Ponnan and Molemela JJA and Goosen and Unterhalter AJJA concurring): [1] On the morning of 1 February 2019 a walkway bridge collapsed at Hoërskool Driehoek, in Vanderbijlpark, tragically causing the death of four learners, aged between 13 and 17 years old. Twenty other learners were injured. All were white. [2] On the same day, and once the incident became public, a certain Siyanda Gumede posted the following on his facebook page: ‘Don’t have heart to feel pain for white kids. Minus 3 future problems’. Black First Land First (BLF), a registered political party1 at the time, and the first respondent, commented on this post. Lindsay Maasdorp, the 1 BLF was deregistered as a political party in November 2019 and re-registered a year later on 16 November 2020. second respondent and the national spokesperson of the BLF, immediately responded to Gumede’s statement on the official BLF twitter account as follows: ‘Siyanda Gumede is correct! God is responding, why should we frown on the ancestors petitions to punish the land thieves including their offspring’. Zwelakhe Dubasi was the deputy secretary general of the BLF and is the third respondent. He also commented on Siyanda Gumede’s post on the official BLF twitter account stating: ‘Ancestors are with BLF, as we fight they fight too. They shake the land and white buildings built on stolen land collapse. Keep fighting Zinyanya, you are fighting a good fight. Camugu!’. [3] These comments caused widespread outrage on various media platforms. When approached for clarification by The Citizen newspaper, Mr Maasdorp responded that he was ‘not certain’ whether the victims were white and he would mourn them if they were black. He added: ‘If our God has finally intervened and our ancestors have petitioned and seen that these white land thieves have now died then I definitely celebrate it. I celebrate the death of our enemies, their children, their cats and dogs. That is our position’. [4] This led to Solidarity, a registered trade union of predominantly white members, launching an application in terms of s 20 of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act). Solidarity claimed to act in its own interests, on behalf of bereaved family members and in the public interest. It sought an order declaring that the comments constituted hate speech, as defined by ss 7, 10 and 11 of the Equality Act and were an affront to human dignity and white people in general. Further ancillary relief was sought, including the payment of damages to the families of the children. [5] The application was opposed by BLF. The president of the BLF, Mr Andile Mngxitama, deposed to the answering affidavit and represented the party in person when the matter was heard on 22 August 2019. [6] After the hearing, the parties were informed that judgment would be handed down on 3 December 2019. The events that took place on that day, though not confirmed on affidavit, were, as recounted by counsel for the appellants and confirmed by Mr Mngxitama, as follows. Mokgoathleng J requested the parties to address him on the effect of this Court’s judgment in Qwelane v SAHRC,2 which had been delivered on 29 November 2019 and which held that s 10 of the Equality Act was unconstitutional. It should be noted that this matter was subsequently appealed to the Constitutional Court and its judgment is awaited. [7] After hearing oral submissions, the judge adjourned the matter to consider the submissions. What occurred thereafter we simply do not know. What we do know is that across the front page of what appears to have been the written ‘judgment’ prepared by the judge, he had written by hand, ‘[t]he judgment is a nullity in view of the SCA judgment of Jonathan Dubula Qwelane case No 686/2108’. The order that was subsequently issued by the registrar recorded: ‘The proceedings in case EQ2/2019 are declared a nullity’. [8] Whether the court a quo considered the entire proceedings or merely the judgment to be a nullity is, on the papers before us, unclear. 2 Qwelane v South African Human Rights Commission and Another [2019] ZASCA 167; 2020 (2) SA 124 (SCA). However, what is apparent is that the judge had prepared a written ‘judgment’ in the matter before the Qwelane judgment was delivered by this court. In it the judge found in favour of the applicants. The offending comments were declared to amount to hate speech in terms of s 10(1) of the Equality Act. The second and third respondents were interdicted from repeating the comments and were ordered to publish an apology within 30 days, directed to all South Africans, and to be disseminated by the South African Human Rights Commission, in which they acknowledged that their comments were hate speech and that they were wrong to publish them. In addition, the second and third respondents were ordered, jointly and severally, to pay R50 000 damages, arising out of emotional and psychological pain, and humiliation to each of the families of the deceased within 30 days. [9] The Qwelane judgment dealt with a newspaper article written by the late journalist Jonathan Dubula Qwelane in which he criticised homosexual relationships and gay marriages. After a detailed exposition of the interplay between hate speech and s 16 of the Constitution, which guarantees freedom of speech, this Court held that s 10 of the Equality Act unnecessarily limited freedom of speech and was therefore unconstitutional. [10] One of the primary functions of a court is to bring to finality the dispute with which it is seized. It does so by making an order that is clear, exacts compliance, and is capable of being enforced in the event of non- compliance.3 The court order in this matter did not achieve finality nor was it capable of being enforced. As it was put by Nugent JA in Makhanya v University of Zululand: 3 Eke v Parsons [2015] ZACC 30; 2016 (3) SA 37 (CC) paras 73-74. ‘The power of a court to entertain a claim derives from the power that all organised states assume to themselves to bring to an end disputes amongst their inhabitants that are capable of being resolved by resort to law. Disputes of that kind are brought to an end either by upholding a claim that is brought before it by a claimant or by dismissing the claim. By so doing the order either permits or denies to the claimant the right to call into play the apparatus of the state to enforce the claim.’4 [11] The high court simply failed to discharge its primary function. The order that it issued declared the proceedings a nullity, and hence declined to determine the dispute before the court. To like effect, the court, by rendering its own ‘judgment’ a nullity, left the parties without a binding decision. A court does not enjoy the power not to decide a case that is properly brought before it. Nor may a court declare its own proceedings to be a nullity. [12] A court may lack jurisdiction or suffer from some other limitation of its powers. But a court, pronouncing on these matters nevertheless renders a decision that is dispositive of the case before it. But that is not what happened before the high court in this matter. The decision of this Court in Qwelane plainly had relevance for the decision that the high court was required to make. The high court should have taken time to consider Qwelane, and the parties’ submissions, and then rendered its judgment so as to decide the case. More incautiously, the high court might have handed down the written judgment that it had prepared, without regard to Qwelane. In either event, an order would have been issued that determined the dispute before the court. 4Makhanya v University of Zululand [2009] ZASCA 69; 2010 (1) SA 62 (SCA) para 22. [13] The high court took neither course of action. Instead, it pronounced its own ‘judgment’ to be a nullity or indeed the proceedings to be a nullity. It simply declined to resolve a dispute that was properly before it and left the parties with no decision. That state of affairs cannot be left undisturbed by this Court. [14] Once that is so, the matter must be remitted to the court a quo to enable the dispute that was properly before it, to be finally resolved. The proceedings had reached an advanced stage. The judge had been addressed in argument by both parties, whereafter judgment had been reserved. All that remained was for the judge to deliver his judgment. That is where the proceedings must recommence. On that there seemed to be agreement before us. There was some concern that the presiding judge may have since retired. In that event, the parties appeared to accept that the matter could recommence before another judge, as directed by the Judge President of the division. Should another judge come into the matter, he or she would obviously be free to issue such directives as to the further conduct of the matter as appears meet, including but not limited to requiring further argument in the matter. [15] As regards costs, it is not the fault of either party that they had to appear before this Court. The attorney representing the respondents withdrew shortly before the hearing of the matter. In those circumstances, Mr Mngxitama appeared before us, for the purposes, so he indicated, of applying for the appeal to be adjourned. Given that counsel for the appellants accepted in debate with him that: (a) the order could not stand; (b) there was no substantive order on the merits and that we therefore could not enter into the merits of the appeal; and (c) the matter consequently had to be remitted to the court below, Mr Mngxitama did not persist in that application. It was thus not necessary to consider whether he could indeed represent the appellants in the appeal.5 [16] The appeal is with the leave of the court below. No reasons were given for the order. What prompted the grant of leave and in respect of what order, since there did not appear to be a judgment on the substantive merits, we simply do not know. However, both parties were compelled to appear to correct an obviously incompetent order. It thus seems unfair to mulct either party with costs. Consequently, there shall be no order as to costs. [17] In the result the following order is made: The appeal is upheld. The order of the court a quo is set aside. The matter is remitted to the Equality Court to be finalised, either by the presiding judge or in the event that the presiding judge is, for whatever reason, unable to finalise the matter, any other judge as the Judge President may direct. 5 Manong and Associates (Pty) Ltd v Minister of Public Works and Another [2009] ZASCA 110; 2010 (2) SA 167 (SCA). ____________________ C NICHOLLS JUDGE OF APPEAL APPEARANCES For Appellants: D J Groenwald Instructed by: Hunter Spies Inc., Centurion. Rossouw & Conradie Inc., Bloemfontein. For First Respondent: A Mngxitama Instructed by: Black First Land First, Johannesburg.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 24 March 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Solidarity and Another v Black First Land First and Others (163/2020) [2021] ZASCA 26 (24 March 2021) Today the Supreme Court of Appeal (SCA) handed down judgment upholding the appeal against an order of the Equality Court, Gauteng Division of the High Court, Johannesburg; and ordered the matter to be remitted to the court a quo to be finalised. The issue for determination by the court was whether the order granted by the Equality Court declaring the proceedings a nullity was competent. On the morning of 1 February 2019 a walkway bridge collapsed at Hoërskool Driehoek, in Vanderbijlpark, tragically causing the death of four learners, aged between 13 and 17 years old. Twenty other learners were injured. All were white. Pursuant thereto, comments emanating from the facebook account of one Siyanda Gumede, the twitter account of the first respondent, a registered political party at the time, and the second respondent, the national spokesperson of the first respondent, were made. These comments were to the effect that the deceased and the injured learners, because they were white and the offspring of ‘land thieves’, were deserving of punishment. These comments caused widespread outrage on various media platforms. When approached for clarification by The Citizen newspaper, the second respondent responded that he was ‘not certain’ whether the victims were white and he would mourn them if they were black. This led to Solidarity, a registered trade union of predominantly white members, launching an application in terms of s 20 of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act). Solidarity sought an order declaring that the comments constituted hate speech, as defined by ss 7, 10 and 11 of the Equality Act and were an affront to human dignity and white people in general. Further ancillary relief was sought, including the payment of damages to the families of the children. The application was opposed by the first respondent. Judgment was reserved for hand down on 3 December 2019. On that day, the judge requested the parties to address him on the effect of the Supreme Court of Appeal’s judgment in Qwelane v SAHRC, which had been delivered on 29 November 2019 and which held that s 10 of the Equality Act was unconstitutional. This matter was subsequently appealed to the Constitutional Court and its judgment is awaited. After hearing oral submissions, the judge adjourned the matter to consider the submissions. He then wrote by hand, on the written ‘judgment’ that he had prepared, ‘The judgment is a nullity in view of the SCA judgment of Jonathan Dubula Qwelane case No 686/2108’. The order that was subsequently issued by the registrar recorded: ‘The proceedings in case EQ2/2019 are declared a nullity’. The written judgment prepared by the judge had found in favour of the applicants. The court held that the court a quo order did not achieve finality nor was it capable of being enforced. The high court had failed to discharge its primary function. The order that it issued declined to determine the dispute before the court. The court, by rendering its own ‘judgment’ a nullity, left the parties without a binding decision. Further it was held that a court does not enjoy the power not to decide a case that is properly brought before it. Nor may a court declare its own proceedings to be a nullity. The Supreme Court of Appeal upheld the appeal and remitted the matter to the court a quo to enable the dispute to be finally resolved. ________________________________________

3403

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 251/2019 In the matter between: VANESSA INGRID MOREAU FIRST APPELLANT IPROLOG (PTY) LTD SECOND APPELLANT and CLOETE MURRAY N.O. FIRST RESPONDENT MABATHO SHIRLEY MOTIMELE N.O. SECOND RESPONDENT JERRY SEKETE KOKA N.O. THIRD RESPONDENT Neutral citation: Moreau and Another v Murray and Others (251/2019) [2020] ZASCA 86 (9 July 2020) Coram: PONNAN, DAMBUZA, VAN DER MERWE, MAKGOKA AND MBATHA JJA Heard: 18 May 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, and by publication on the Supreme Court of Appeal website and release to SAFLII. The time and date for hand down is deemed to be 10h00 on the 9th day of July 2020. Summary: Pensions – protection of s 37B of the Pensions Fund Act 24 of 1956 – whether it operates if pension benefit paid before sequestration. Insolvency – s 31 of the Insolvency Act 24 of 1936 – whether collusion established. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Holland-Müter AJ sitting as court of first instance). 1 Save to the extent reflected in the paragraph below, the appeal is dismissed with costs, such costs to be paid by the appellants jointly and severally, the one paying the other to be absolved. 2 Paragraph 1 of the order of the court a quo is substituted with the following: ‘1 The payments made by the insolvent, Mr Pierrie Andre Leonard Moreau, to or for the benefit respectively of the first respondent, Vanessa Ingrid Moreau, in the sum R1 023 867 and the second respondent, Iprolog (Pty) Ltd, in the sum of R3 500 000, are set aside and the respondents are ordered to repay those monies forthwith to the applicants. ________________________________________________________________ JUDGMENT ________________________________________________________________ Makgoka JA (Ponnan, Dambuza, Van der Merwe and Mbatha JJA concurring): [1] The primary issue in this appeal is whether a pension benefit paid out to the insolvent, Mr Pierrie Andre Leonard Moreau (Mr Moreau) before his estate was sequestrated, enjoyed the protection provided in s 37B of the Pensions Fund Act 24 of 1956 (the Act), which protects pension benefits against attachment by a trustee of an insolvent estate, subject to certain exceptions. If this is answered in the negative, a secondary issue arises, namely whether that pension money, which he disposed of to his then wife, the first appellant, Ms Vanessa Ingrid Moureau (Mrs Moreau) and the second appellant, Iprolog (Pty) Ltd (Iprolog) should be set aside in terms of the relevant provisions of the Insolvency Act 24 of 1936 (the Insolvency Act). [2] Mr Moreau’s estate was finally sequestrated on 1 August 2011. Some two years before the sequestration, he received a pension payout, which, as already stated, he disposed of to the appellants. Iprolog purchased immovable properties with that money. After the sequestration, the respondents, the joint trustees of his insolvent estate, obtained an order in the court a quo, the Gauteng Division of the High Court, Pretoria, setting aside the dispositions. That court also granted an order interdicting the appellants from alienating an immovable property indirectly purchased with the pension money. Mrs Moreau and Iprolog appeal against those orders with the leave of this court. [3] Mr Moreau and Mrs Moreau had been married to each other out of community of property since 1980. Mr Moreau was a judgment debtor of Lowveld Cooperative Investments (Lowveld). Its action against Mr Moreau to recoup the debt failed in February 2006 before the trial court. However, this court granted Lowveld leave to appeal to the full court. While the appeal was pending, Iprolog was registered on 6 April 2009, and on 30 April 2009 Mr Moreau became its sole director. On 5 May 2009, Mr Moreau and Mrs Moreau became trustees of the Les Baux Family Trust (the Trust), which in due course became the sole shareholder of Iprolog. [4] On 18 May 2009 the full court delivered its judgment, and overturned the order of the trial court dismissing Lowveld’s claim. It ordered Mr Moreau to pay Lowveld the sum of R726 638.35, interest and costs. Mr Moreau immediately applied to this court for special leave to appeal. On 31 May 2009 Mr Moreau requested payment of his provident fund benefit from Mindkey Corporate Selection Retirement Fund. On 15 June 2009 Mr Moreau received R4 639 000 from the provident fund, which was paid into his banking account. On 23 June 2009, he transferred R3 500 000 of that amount into an attorney’s trust account for the credit of Iprolog. This money was used for the purchase of two farms in Kwazulu-Natal by Iprolog. The balance of R1 023 867 was paid directly to Mrs Moreau. [5] The appellants explained the two payments as follows. It was alleged that Mr and Mrs Moreau had been experiencing marital problems for a number of years, and that in April 2009, Mrs Moreau finally decided that she wanted a divorce. Therefore, the pension pay-out was requested specifically to cater for the proprietary consequences of the marriage at divorce. In particular, it was stated that Mr Moreau owed Mrs Moreau the sum of R4 746 080.14 made up as follows: in terms of the parties’ antenuptial contract registered on 6 May 1980, Mr Moreau was obliged to purchase a property for Mrs Moreau for R100 000. According to Mr Moreau the equivalent value of that sum in 2009 was R3 722 213.14. The payment of R3 500 000 referred to above, was meant to cater for this. Mr Moreau explained that he did not wish to pay this amount to Mrs Moreau until the divorce was finalised. The balance of R1 023 867 was said to represent a loan amount comprising unpaid wages when Mrs Moreau worked for Mr Moreau as a bookkeeper in his business as a financial advisor. The explanation was that during her employment, he did not pay her an actual salary but a loan account was created and the amounts owing were credited to such loan account. [6] It was further alleged that the parties ‘separated’ on 19 July 2009. On 21 July 2009 Mr Moreau’s application for leave to appeal against the full court’s order was dismissed by this court. Two days thereafter, on 23 July 2009, Mrs Moreau issued summons against Mr Moreau, in which she claimed only a decree of divorce, and no patrimonial relief or maintenance. On 19 August 2009 they signed a settlement agreement in terms of which Mr Moreau undertook to pay maintenance of R100 000 per month to Mrs Moreau. In addition, Mr Moreau undertook to pay for various expenses on behalf of Mrs Moreau. It was also recorded that in terms of the parties’ antenuptial contract, Mr Moreau was obliged to transfer certain assets, including an immovable property, to Mrs Moreau. In clause 4.3 of the Settlement Agreement it was recorded that: ‘In settlement of [Mrs Moreau’s] claims . . . and in settlement of the sum of R1 023 867 due and payable in terms of a loan account held with Moreau and Associates as at 28 February 2008, [Mr Moreau] has liquidated his pension fund and after all statutory deductions and payment of all taxes are met, he has agreed to pay over the balance of the proceeds to [Mrs Moreau]. Lastly, the settlement agreement provided that Mrs Moreau would retain ownership of two farms in Mpumalanga. [7] The divorce action was finalised on 21 August 2009, when an order was granted for a decree of divorce incorporating the settlement agreement referred to above. On 2 November 2009 Mr Moreau resigned as a director of Iprolog, and Mrs Moreau replaced him. In May 2010 Lowveld commenced proceedings for the sequestration of Mr Moreau’s estate. As of August 2010, on Mr Moreau’s own version, the unsatisfied judgment debt, interest and costs due to Lowveld amounted to R2 027 587.74. [8] During October and November 2010 the farms purchased by Iprolog, as fully set out in para 3 above, were sold and a portion of the net proceeds thereof, R2 160 000, was used by Iprolog to purchase an immovable property in Edenvale, Gauteng Province (the Edenvale property) for cash, in December 2010. In March 2011 Mr Moreau moved into this property. A month later, April 2011, Mrs Moreau joined him on the property. As at the time when the application was finalised in the court a quo, the parties lived together on this property. Mr Moreau explained that this was a purely convenient arrangement because of Mrs Moreau’s alleged ill-health. According to him, he felt morally obliged to care for her, though they lived in separate houses on the property. It is common cause that they continued to occupy this property together, at least until the judgment was handed down in the court a quo. [9] On 6 June 2011 Mr Moreau’s estate was provisionally sequestrated, and the final order of sequestration was granted on 1 August 2011. The respondents were appointed joint trustees of Mr Moreau’s estate, and in terms of s 20(1)(a) of the Insolvency Act his estate vested in the respondents as trustees. During June 2012 Mr Moreau and Mrs Moreau were interrogated before a magistrate in terms of ss 64 and 65 of the Insolvency Act. Based on the evidence during the interrogation, the respondents on 1 March 2013 launched the application to which this appeal relates, to have the payments made by Mr Moreau to Mrs Moreau and to Iprolog, set aside. [10] The respondents alleged that there was collusion between Mr and Mrs Moreau to strip the former of all his assets and income to avoid paying his debt to Lowveld. In particular, the respondents asserted that: Iprolog was ‘the alter ego and corporate veil’ of Mrs Moreau and Mr Moreau (paras 3.3 and 10.4); (paras 2.4 and 6.11.3); by making the Trust the sole shareholder of Iprolog they sought to distance themselves from the company (para 6.2 ) and ‘create a further trench which had to be crossed by any creditor seeking to gain access’ to Mr Moreau’s pension monies (paras 6.2 and 6.11.4); their ‘separation’ occurred only after the Full Court upheld Lowveld’s appeal (para 6.4); their divorce was ‘merely a sham’ and a ‘window-dressing’ as it was instituted a mere two days after the application for leave to appeal had been dismissed by this court on 21 July 2009 (para 6.5). [11] In the appellants’ answering affidavit, deposed to by Mr Moreau, it was averred that the payments which the respondents sought to set aside were pension monies and that such monies, including the assets purchased with such monies, were exempt from attachment by the respondents in terms of s 37B of the Act. The appellants denied that there was any disposition of money from Mr Moreau to Iprolog. Instead, they said, Mrs Moreau loaned an amount of R5 372 760 to the Trust (on an unnamed date in 2009). According to the appellants, on 26 August 2009, the Trust loaned the same amount to Iprolog. This, according to the appellants, was proof that no disposition was made by Mr Moreau to Iprolog, and that Mrs Moreau made no loans in 2009 to Iprolog. The loan, they stressed, was made by Mrs Moreau to the Trust, which in turn, loaned the same amount to Iprolog. The evidence before the court a quo included the oral evidence of Mr Moreau in terms of s 32(2) of the Insolvency Act, adduced at the instance of the appellants pursuant to rule 6(5)(g) of the Uniform Rules of Court. [12] The matter came before Holland-Müter AJ, who considered the provisions of s 37B and reasoned that because Mr Moreau had received his pension payout before his estate was sequestrated, the money no longer enjoyed the protection provided by s 37B. The learned judge held that ‘[w]hen receiving the payment, the monies became commixtio with the estate of the now insolvent (although he was not yet insolvent then)’. The learned judge further found that there was collusion between Mr and Mrs Moreau to the detriment of Mr Moreau’s creditors. The learned judge considered, among others, the fact that Mrs Moreau and Mr Moreau still resided together on the same property as a ‘further indication of the collusion’ between them to prejudice the former’s creditors. Accordingly, the court a quo had no difficulty in setting aside the dispositions made to Mrs Moreau. The court a quo concluded that the dispositions fell within the ambit of s 31 of the Insolvency Act. Consequently, it issued an order: ‘1. The payment made by Pierre Andre Leonard Moreau (the insolvent) in the amount of R4 639 000 towards the first respondent [Mrs Moreau] on or about 15 June 2009, alternatively the payment of the amount of R3 500 000 towards the second respondent [Iprolog] by or on behalf of the insolvent is set aside the payment of the difference between the amount of R3 500 000 and the amount of R4 639 000 made by the insolvent to Mrs Moreau and ordering that said amounts shall be repaid forthwith to the applicants [the respondents]. 2. The sale of the immovable property situated at 89 Main Road, Edenvale, Gauteng and currently occupied by the first respondent and the insolvent is prohibited save in the event of same being sold at a market related price with the prior knowledge of the sale thereof to the applicants in which event the nett proceeds of the such sale shall be paid into trust at the applicants, pending the finalization of the repayment of the amounts referred to in par 1 above.’ [13] In this court, as in the court a quo, it was submitted on behalf of the appellants that the pension pay-out to Mr Moreau was exempt from attachment in terms s 37B, and that, in any event, the payments to Mrs Moreau could not be set aside as they were made in compliance with a court order. With regard to the Insolvency Act, it was submitted that neither of the provisions of the relevant sections had been established to justify setting aside the payments. I deal with these in turn. [14] Section 37B reads as follows: ‘Disposition of pension benefits upon insolvency If the estate of any person entitled to a benefit payable in terms of the rules of a registered fund (including an annuity purchased by the said fund from an insurer for that person) is sequestrated or surrendered, such benefit or any part thereof which became payable after the commencement of the Financial Institutions Amendment Act, 1976 (Act No. 101 of 1976), shall. . . .not be deemed to form part of the assets in the insolvent estate of that person and may not in any way be attached or appropriated by the trustee in his insolvent estate or by his creditors, notwithstanding anything to the contrary in any law relating to insolvency.’ [15] ‘Benefit’ is defined in s 1 of the Act as ‘any amount payable to a member or beneficiary in terms of the rules of that fund’.1 The reference to ‘payable’, instead of ‘paid’ clearly envisages a sum to which a member of a pension fund or a beneficiary is entitled to receive, but has not yet received. So construed, the amount remains a ‘benefit’ to the extent it has not yet been paid to the member or beneficiary. Once the benefit is paid to him or her, the beneficiary ceases to be a ‘member’ of the pension fund according to the rules of the fund,2 and the money ceases to be a ‘benefit’. It loses its character once in the hands of the beneficiary and ceases to be a benefit. The beneficiary may do as they please with it. Such a beneficiary can thus hardly complain if creditors lay their hands on the money to satisfy outstanding debts. [16] Thus, all that s 37B entails is that, while in the hands of a pension fund, the insolvent’s pension interest cannot be attached by his or her trustee on the basis that it forms part of the insolvent’s assets. It protects only the pension benefit of a person whose estate is sequestrated, which Mr Moreau’s estate was not when he received his pension pay-out. The effect of a sequestration order is to divest an insolvent of his or her estate and to vest it in a trustee. Section 37B seeks to establish an exception to the provisions of s 20(1)(a) of the Insolvency Act. When Mr Moreau received the payment, his estate had not as yet been sequestrated. There was thus no insolvent estate or trustees to speak of. Section 37B therefore could not find application when the payment was effected. For that reason, Mr Moreau could not bring himself within the exception, and payment could only have been made into his ‘regular estate’. Having then disposed of those monies in the manner in which he did, renders them susceptible to attack. This is fortified by s 23(7) of the Insolvency Act which provides that during the sequestration, 1 ‘Benefit’ was inserted to the Act as a defined term in 2007 by s 1(c) of Act 11 of 2007. 2 Compare Absa Bank Ltd v Burmeister and Others 2004 (5) SA 595 (SCA); [2005] 3 All SA 409 (SCA) para 9 where the court considered s 37D(1)(b) of the Act. ‘the insolvent may for his own benefit recover any pension to which he may be entitled. . .’. [17] It follows that if the pension benefit is received before a beneficiary’s estate is sequestrated, s 37B does not find application. This construction of s 37B finds support in cases where similarly worded statutory provisions have received consideration. [18] Jones & Co. v Coventry [1909] 2 KB 1029 concerned s 141 of the Army Act of 1881, which prohibited an assignment or charge on a pension payable to any officer or soldier. The issue was whether a garnishee order could attach monies in a bank account into which a soldier’s pension money was paid. Darling J held that the money did not come within the provisions of s 141. He explained: ‘Pension, when it has been paid to the person entitled to receive it, ceases any longer to be pension; it has lost its character of pension, just like dividends which, after payment, lose the character of dividends. It becomes part of the pensioner’s ordinary money. . . .’ [19] In Gibson v Howard 1918 TPD 185, s 37 of the Miner’s Phthisis Act 44 of 19163 was considered. Section 37 provided: ‘No amount payable as a benefit under this Act or the prior law shall be assignable or transferable or be capable of being hypothecated or pledged, nor shall any such amount be liable to be attached or subjected to any form of execution under a judgment or order of any court of law.’ [20] In that matter, the appellant, who was a judgment debtor of the respondent, received an amount as compensation from the Miner’s Phthisis Board under the 3 This was in response to a pulmonary tuberculosis called phthisis which affected mine workers in the Witwatersrand area, Johannesburg, in the early 1900s. Phthisis Act. The respondent obtained a garnishee order on the bank account into which the money was deposited. The applicant contended that in terms of s 37 the amount was not attachable or subject to any form of execution, as the object of the Act was to benefit a person suffering from phthisis, and to prevent creditors from attaching any compensation paid to him under the Act. [21] The court rejected this interpretation and held: ‘Section 37 says “no amount payable” etcetera. There is nothing in the Act to justify us in saying that the Legislature meant that an amount actually paid over shall not be attached. All the Legislature means is that if money is awarded to a miner’s phthisis patient and still in the hands of the Board it cannot be assigned, ceded or attached so long as the Board controls it. When the money is paid over to the patient and is mixed with his ordinary money it has no longer any different character and therefore according to our common law it can be attached.’ [22] The reasoning in Gibson was followed in Foit v FirstRand Bank Bpk 2002 (5) SA 148 (T), where ss 2(1) and 3 of the General Pensions Act 29 of 1979 (the Pensions Act) were in issue. Section 2(1) provides: ‘No annuity or benefit or right in respect of an annuity or benefit payable under a pension law shall be capable of being assigned or transferred or otherwise ceded or of being pledged or hypothecated or, save as is provided in section 11(2) of the Maintenance Act, 1963 (Act No. 23 of 1963), be liable to be attached or subjected to any form of execution under a judgment or order of a court of law.’ In turn, s 3 provides that ‘[t]he annuity received under any pension law by any person whose estate is sequestrated, shall not form part of the assets in his insolvent estate’. [23] As in this case, it was contended in Foit that the relevant sections had to be interpreted to mean that ‘pension benefits’ did not form part of the assets in the insolvent estate of the applicant and her husband. D Basson J was unpersuaded, and pointed out (at 153H) that the meaning of s 3 was that a ‘benefit received under any pension law’ indicated a benefit, ie an amount of money received in terms of a pensions law, in terms of which the beneficiary had a right of action against the pension fund to receive the money. When the amount was paid out by the pension fund, the benefit was ‘received’ as provided in s 3 of the Act. Accordingly, the learned Judge held that the pension benefit paid out and received on 25 January 2000 became part of the assets of the estate of the applicant and her husband. [24] Section 37A(1), which was raised in argument, does not assist the appellants, either. It protects any benefit or right to any benefit provided for in the rules of a registered pension fund payable to a member of such fund, against any reduction, transfer, cession, pledge, hypothecation, attachment or judicial execution.4 I have already pointed to the definition of ‘benefit’ above. With regard to s 37A(1) the key is the definition of ‘member’ in s 1 of the Act, which is defined in relation to two categories of pension fund organisations.5 In the first category, it means ‘any member or former member of the association by which such fund has been established’, while in the second category,6 ‘member’ means ‘a person 4 In its redacted form, s 37A(1) reads as follows: ‘(1) Save to the extent permitted by this Act, the Income Tax Act, 1962 (Act 58 of 1962), and the Maintenance Act, 1998, no benefit provided for in the rules of a registered fund . . . be capable of being reduced, transferred or otherwise ceded, or of being pledged or hypothecated, or be liable to be attached or subjected to any form of execution under a judgment or order of a court of law, . . . and in the event of the member or beneficiary concerned attempting to [do so] the fund concerned may withhold or suspend payment thereof. . . .’ 5 Pension fund organisation in turn is defined as follows: ‘(a) [a]ny association of persons established with the object of providing annuities or lump sum payments for members or former members of such association upon their reaching retirement dates, or for the dependants of such members or former members upon the death of such members; or …….. (c) any association of persons or business carried on under a scheme or arrangement established with the object of receiving, administering, investing and paying benefits that became payable in terms of the employment of a member on behalf of beneficiaries, payable on the death of more than one member of one or more pension funds, and includes any such association or business which in addition to carrying on business in connection with any of the objects specified in paragraph (a), (b) or (c) also carries on business in connection with any of the objects for which a friendly society may be established, as specified in section 2 of the Friendly Societies Act, 1956, or which is or may become liable for the payment of any benefits provided for in its rules, whether or not it continues to admit, or collect contributions from or on behalf, of members. 6 (b) any business carried on under a scheme or arrangement established with the object of providing annuities or lump sum payments for persons who belong or belonged to the class of persons for whose who belongs or belonged to a class of persons for whose benefit that fund has been established’. Significantly, in respect of both categories, the definition excludes ‘any person who has received all the benefits which may be due to that person from the fund and whose membership has thereafter been terminated in accordance with the rules of the fund’ (Emphasis added.) Although s 37B refers to ‘any person entitled to a benefit’ as opposed to a ‘member’, the difference in the terminology does not appear to be of any significance. Both must be taken to mean a beneficiary of a pension benefit. Thus the definition of ‘member’ applies with equal force to any construction of s 37B. It follows that Mr Moreau is excluded from protection under s 37B of the Act by this definition, as he had ‘received all the benefits’ and his membership of the provident fund had been terminated thereby. [25] To conclude on this aspect, I am constrained to comment on the appellants’ reliance on certain remarks made by Rogers J in respect of the protection provisions of s 37A(1) in Van Heerden and Another v NDPP and Another [2015] ZAWCHC 96. The learned Judge remarked that since these were meant for the protection of pension fund members and their dependants, ‘it is legitimate to ask what the point would be of shielding from execution a member’s right to receive payment of a benefit but not the benefit once received’. Later (at para 45) the learned Judge remarked that ‘[t]he restrictive interpretation of “benefit” seems to render the protection afforded by the section largely hollow’. In this case, the appellants placed strong reliance on these remarks for their submission that the protection of s 37B extends to the pension benefit after it is paid out. [26] These remarks should be seen in their proper context. First, they are not an authoritative pronouncement on the question whether the provisions of s 37A(1) benefit that scheme or arrangement has been established, when they reach their retirement dates or for dependants of such persons upon the death of those persons.’ extends beyond payment of the pension benefit, as that issue did not directly arise in that case, and did not need to be decided – a fact acknowledged by the learned Judge (at para 42). Second, the learned Judge acknowledged (at para 41) the difficulties which would arise if one construed the word ‘benefit’ in s 37A(1) as meaning the money paid to the member or dependant as distinct from such person’s right to receive payment thereof at a future date. These included the fact that a beneficiary could possibly be subject to the prohibition of s 37A(1) and be precluded from freely dealing with the money in that he would not be permitted to cede, pledge, hypothecate or transfer it. [27] In Van Aartsen v Van Aartsen 2006 (4) SA 131 (T) para 23, De Vos J remarked obiter in relation to s 37A(1) that ‘it could also be argued that once [the beneficiary] had received his pension payout, it was no longer a pension benefit as intended in the Act, but rather a sum of money, that is, a movable thing and not a legal right or claim’. It was suggested in Van Heerden (at paras 38 and 42) that Foit and Van Aartse were wrongly decided. The correctness of those decisions was endorsed by this court in Sentinel Retirement Fund and Another v Masoanganye and Others [2018] ZASCA 126 para 16. The appellants’ reliance on Van Heerden is thus misplaced. [28] I turn now to the provisions of the Insolvency Act with regard to the setting aside of dispositions. This may be done in terms of either of s 26 (as dispositions without value),7 s 29 (as voidable preferences)8 or s 31 (as collusive dealings before sequestration). The court a quo, correctly in my view, identified s 31 to be the applicable section on the facts of this case. Section 31 reads as follows: ‘Collusive dealings before sequestration (1) After the sequestration of a debtor’s estate the court may set aside any transaction entered into by the debtor before sequestration, whereby he, in collusion with another person, disposed of property belonging to him in a manner which had the effect of prejudicing his creditors or of preferring one of his creditors above another. (2) Any person who was a party to such collusive disposition shall be liable to make good any loss caused to the insolvent’s estate in question and shall pay for the benefit of the estate, by way of penalty, such sum as the court may adjudge, not exceeding the amount by which he would have benefitted by such dealing if it had not been set aside; and if he is a creditor he shall also forfeit his claim against the estate. (3) Such compensation and penalty may be recovered in any action to set aside the transaction in question.’ In terms of s 32(1)(a) proceedings for the recovery of compensation or penalty under s 31 may be taken by a trustee. 7 ‘(1) Every disposition of property not made for value may be set aside by the court if such disposition was made by an insolvent – (a) more than two years before the sequestration of his estate, and it is proved that, immediately after the disposition was made, the liabilities of the insolvent exceeded his assets. (b) within two years of the sequestration of his estate, and the person claiming under or benefited by the disposition is unable to prove that, immediately after the disposition was made, the assets of the insolvent exceeded his liabilities; Provided that if it is proved that the liabilities of the insolvent at any time after the making of the disposition exceeded his assets by less than the value of the property disposed of, it may be set aside only to the extent of such excess. . . .’ 8 ‘(1) Every disposition of his property made by a debtor not more than six months before the sequestration of his estate or, if he is deceased and his estate is insolvent, before his death, which has had the effect of preferring one of this creditors above another, may be set aside by the Court if immediately after the making of such disposition the liabilities of the debtor exceeded the value of his assets, unless the person in whose favour the disposition was made proves that the disposition was made in the ordinary course of business and that it was not intended thereby to prefer one creditor above another. . . .’ [29] It was submitted on behalf of the appellants that absent an application to impugn the decree of divorce, the payments made in terms thereof cannot be set aside. A similar contention was correctly rejected in Sackstein en Venter NNO v Greyling 1990 (2) SA 323 (O) at 327D-E. The appellants also relied on the exclusionary clause in the definition of ‘disposition’ in s 2 of the Insolvency Act for the contention that the payments cannot be set aside. The definition of ‘disposition’ in s 2 is as follows: ‘Disposition means any transfer or abandonment of rights to property and includes a sale, lease, mortgage, pledge, delivery, payment, release, compromise, donation or any contract therefor, but does not include disposition in compliance with an order of the court; and “dispose” has a corresponding meaning.’ (Emphasis added.) [30] It brooks no debate that the payments made by Mr Moreau to Mrs Moreau constitute ‘dispositions’ within the meaning of the Insolvency Act. As I have already stated, there were two of those. The first was for R3 500 000 into an attorney’s trust account for the credit of Iprolog on 23 June 2009 and used towards the purchase of property in Iprolog’s name. The second payment was made shortly after the divorce decree was finalised. It was submitted that despite the payment date for the R3 500 000 being June 2009, the money only accrued to Mrs Moreau on 26 August 2009, after the decree of divorce was granted and the property had been transferred into Iprolog’s name. Thus, it was said that Mrs Moreau was only ‘paid’ after the divorce order was granted, and ‘in terms’ thereof. [31] This submission has merely to be stated, to be rejected. It was contrived to bring the disposition within the ambit of the exclusionary provisions of the definition of ‘disposition’ in s 2 of the Insolvency Act referred to above. As I have said, the disposition was to Iprolog and occurred on 23 June 2009 when the money was paid into the attorney’s trust account. That Iprolog was only free to use it later is irrelevant. The exclusionary provisions of s 2 did not apply to this payment, and it was accordingly susceptible to being set aside in terms of one or other of the three sections of the Insolvency Act referred to above. The payment of R1 023 867 stands on a different footing, as it was made after the divorce decree was granted on 21 August 2009, thus notionally protected by the exclusionary provisions of s 2. However, those provisions do not serve as an absolute bar. [32] In Dabelstein and Others v Lane and Fey NNO 2001 (1) SA 1222 (SCA) (at para 7) this court recognised that in certain instances, a disposition made in terms of a court order may be set aside. It was pointed out that where that is sought to be done, it is not sufficient merely to bring the disposition within the ambit of one or more of the relevant provisions of the Insolvency Act, as was done in Sackstein. Hefer ADCJ explained, with reference to Swadif (Pty) Ltd v Dyké NO 1978 (1) SA 928 (A); [1978] 2 All SA 121 (A) at 938B-939H), that under those circumstances, additional allegations have to be made in order to nullify the effect of the exclusion in s 2. If either fraud, collusion or any other reprehensible conduct is relied upon, it must be alleged. [33] In this case, the respondents’ founding affidavit is replete with allegations of collusion between Mr and Mrs Moreau. I have referred to some of those allegations in para 10 above. In fact, the entire premise of the respondents’ case rests on the existence of such collusion. In my view, the respondents’ assertions are credible. From the papers filed in the court a quo and the record of the oral evidence, it is clear that there was a carefully designed plan by Mr Moreau to keep the pension money from his creditor, Lowveld. Mrs Moreau and Iprolog were very much part of that plan. [34] This commenced in April 2009 when Iprolog was incorporated. Both served as directors of Iprolog, albeit at different times. This was followed by both becoming trustees of the Trust in May 2009. The Trust became the sole shareholder of Iprolog. After payment of R3 500 000 was made into the attorney’s trust account, the money was used by Iprolog to acquire two farms in Kwa-Zulu Natal. When those farms were sold, part of the profit was used to enable Iprolog to purchase the Edenvale property, which Mr and Mrs Moreau continue to jointly occupy. [35] Furthermore, the divorce between the parties was undoubtedly a sham. Their continued co-habitation at the Edenvale property serves, among others, as proof of that. Their explanation for this is unconvincing. Mrs Moreau is the one who instituted the divorce, significantly, a mere two days after Mr Moreau’s application for leave to appeal was dismissed by this court. She took an active part in the settlement agreement, which resulted in her receiving virtually all of Mr Moreau’s assets and money. Given all these, the conclusion is inescapable that there was collusion between Mr Moreau and Mrs Moreau in respect of the disposition of the former’s pension money. Mr Moreau’s receipt – and almost immediate disposal - of his pension in the manner described herein, had the effect of his liabilities exceeding his assets. [36] In sum, I find that neither of the protective provisions in ss 37B or 37A of the Act apply to Mr Moreau’s pension once paid to him. The dispositions by him became susceptible to being set aside pursuant to the provisions of s 31 of the Insolvency Act, which, in my view, have been met: Mr Moreau made a disposition of his money to Mrs Moreau in collusion with the latter, which had the effect of prejudicing Mr Moreau’s creditor (Lowveld). The prejudice is self-evident. Iprolog was not a creditor of Mr Moreau and even if one accepts for present purposes the appellants’ contention that Mrs Moreau was also Mr Moreau’s creditor, the disposition had the effect of preferring her above Lowveld. [37] The dispositions were correctly set aside by the court a quo. The appeal falls to fail. The learned judge set aside the payment of the whole amount of R4 639 000 to Mrs Moreau, alternatively the R3 500 000 to Iprolog, further alternatively, the difference between the R4 639 000 and R3 500 000 paid to Mrs Moreau. This needs to be clarified. Both the main and alternative orders cannot, as framed by the learned Judge, stand. It is clear that R3 500 000 was paid on 23 June 2009 into the trust account of Venn Nemeth & Hart Attorneys, which was then transferred to Iprolog, Mrs Moreau retained the balance of R1 023 867, which became available to her on or about 21 August 2009. [38] In the result the following order is made: 1 Save to the extent reflected in the paragraph below, the appeal is dismissed with costs, such costs to be paid by the appellants jointly and severally, the one paying the others to be absolved; 2 Paragraph 1 of the order of the court a quo is substituted with the following: ‘1 The payments made by the insolvent, Mr Pierrie Andre Leonard Moreau, to or for the benefit respectively of the first respondent, Vanessa Ingrid Moreau, in the sum R1 023 867 and the second respondent, Iprolog (Pty) Ltd, in the sum of R3 500 000, are set aside and the respondents are ordered to repay those monies forthwith to the applicants. ____________________ T M Makgoka Judge of Appeal APPEARANCES: For Appellants: J Marks c/o June Stacey Mark Attorneys, Johannesburg Claude Reid Attorneys, Bloemfontein For Respondents: T A L L Potgieter SC Instructed by: Pieter Swanepoel Attorneys, Mbombela McIntyre Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY: JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM: The Registrar, Supreme Court of Appeal DATE: 09 July 2020 STATUS: Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Moreau and Another v Murray and Others (251/2019) [2020] ZASCA 86 (9 July 2020) Today, the Supreme Court of Appeal (the SCA) dismissed an appeal brought by the appellants, against a judgment of the Gauteng Division of the High Court, Pretoria. The primary issue in the appeal was whether a pension benefit paid out to the insolvent, Mr Pierrie Moreau in June 2009, some two years before he was finally sequestrated on 1 August 2011, enjoyed the protection provided in s 37B of the Pensions Fund Act 24 of 1956 (the Act), which protects pension benefits against attachment by a trustee of an insolvent estate. After receiving the pension pay-out of R4 746 080.14, he paid R1 023 867 thereof to the first appellant, then his wife, and R3 500 00 thereof to the second appellant, Iprolog (Pty) Ltd (Iprolog). Iprolog purchased immovable properties with that money. In August 2009, the insolvent and the first appellant divorced each other. In the settlement agreement of the parties it was recorded that the insolvent owed the first appellant R3 722 213.14 in terms of the parties’ antenuptial contract, and R1 023 867 for an alleged loan. According to the appellants, the payments of the pension money to the first appellant were in compliance with the terms of the divorce settlement agreement, which was made an order of court. After he was sequestrated, the respondents, the joint trustees of his insolvent estate, obtained an order in the Gauteng Division of the High Court, Pretoria, in terms of which the payments were set aside in terms of s 31 of the Insolvency Act 24 of 1936, and the appellants were interdicted from selling the property indirectly purchased with the pension money. The appellants appealed against those orders and submitted that the pension pay- out to the insolvent was exempt from attachment in terms s 37B, and that, in any event, the payments to the appellants could not be set aside as they were made in compliance with a court order. With regard to the Insolvency Act, it was submitted that neither of the provisions of the relevant sections had been established to justify setting aside the payments. Section 37B provides that if the estate of any person entitled to a benefit payable in terms of the rules of a pension fund is sequestrated or surrendered, such benefit shall not be deemed to form part of the assets in the insolvent estate of that person and may not in any way be attached or appropriated by the trustee in his insolvent estate or by his creditors. In construing the section, the SCA considered, among others, the definitions of ‘benefit’ and ‘member’ in s 1 in the Act, and concluded that once the pension benefit is paid to a beneficiary, he or she ceases to be a ‘member’ of the pension fund according to the rules of the fund, and the money ceases to be a ‘benefit’. It loses its character once in the hands of the beneficiary and becomes the beneficiary’s ordinary money, which can be attached. Section 37A(1) could not be of any assistance either, for the same reasons. Turning to whether the payments to the appellants ought to be set aside, the court considered s 31 of the Insolvency Act in terms of which the court may set aside any transaction entered into by the debtor before sequestration, whereby he, in collusion with another person, disposed of property belonging to him in a manner which had the effect of prejudicing his creditors or of preferring one of his creditors above another. The court rejected the appellants’ submission that absent an application to impugn the decree of divorce, the payments made in terms thereof cannot be set aside, and that the payments to the first appellant could not be set aside based on the exclusionary clause in the definition of ‘disposition’ in s 2 of the Insolvency Act which provides that dispositions in compliance with a court shall not be set aside. The court pointed out that those provisions do not serve as an absolute bar, and that such payments could be set aside on the basis of either fraud, collusion or any other reprehensible conduct. In this case, there was sufficient basis to conclude that there was collusion between the insolvent and the first appellant, whose divorce was found to be a sham, and part of a scheme to ensure that the insolvent did not pay his debts. Also, the court found that the parties had used the corporate veil of the second appellant, for that purpose. In the circumstances, the Court (per Makgoka JA) with Ponnan, Dambuza, Van der Merwe and Mbatha JJA concurring, dismissed the appeal with costs.

1887

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 498/10 In the matter between: ROSHAN MORAR NO Appellant and MAHOMED ASLAM OSMAN AKOO First Respondent THE TRUSTEES OF THE MAHOMED ASLAM AKOO FAMILY TRUST Second Respondent Neutral citation: Morar NO v Akoo (498/10) [2011] ZASCA 130 (15 September 2011) Coram: BRAND, MHLANTLA, MAJIEDT and WALLIS JJA and MEER AJA. Heard: 26 August 2011 Delivered: 15 September 2011 Summary: Partnership – liquidator appointed by the court – powers to be conferred on liquidator – whether court may amplify powers originally given to liquidator. ORDER On appeal from: KwaZulu-Natal High Court, Pietermaritzburg (K Pillay J, sitting as court of first instance): The appeal is dismissed with costs. JUDGMENT WALLIS JA (BRAND, MHLANTLA and MAJIEDT JJA and MEER AJA concurring) [1] Ordinarily when a partnership is dissolved the partners themselves liquidate it, or cause it to be liquidated by one of their number or by a third party chosen by them. The basis upon which the liquidation is undertaken is agreed upon, whether in advance in a formal partnership agreement or at the time of dissolution. Sometimes it is not possible for the partners to reach such an agreement and one or more of the partners seek the intervention of a court to procure the appointment of a liquidator.1 That happened in the present case and it resulted in Mr Morar’s appointment as the liquidator of the partnership operating a business called Rollco. The order appointing him gave him detailed powers. Mr Morar’s task has not been straightforward and accordingly he approached the high court asking for further powers to be given to him. The application was heard by K Pillay J and was dismissed. Mr Morar appeals with her leave to this court. The issues raised by the appeal are 1 Invoking for that purpose the actio pro socio the nature of which was described by Joubert JA in Robson v Theron 1978 (1) SA 841 (A) at 855H-856G. whether it is competent for the initial order to be varied and whether the relief Mr Morar now seeks should be granted to him. [2] In about 1986 the Osman family established the business known as Rollco, as manufacturers of roof sheeting and processors and suppliers of steel products. Mr Mohamed Aslam Osman Akoo, the first respondent, was actively engaged in the management of the business, ownership of which lay with a family trust. During 1987 the Moosa family became equal partners with the Osman family in the business, holding their 50 percent share through ten family trusts. There is a dispute whether the Moosa family’s involvement was purely as financiers of the business or whether they were also to play an active role in managing the business. Be that as it may the business operated reasonably successfully and generated profits, which were shared equally between the Osman family trust and the Moosa family trusts. [3] Problems started to emerge in 2002 or 2003 when Mr Akoo’s brothers and father withdrew from the business. There is a dispute whether their interests in the business were taken over by Mr Akoo, either personally or through the medium of the second respondent, the Mohamed Aslam Osman Akoo Family Trust (the Akoo family trust), or whether a significant portion of their shares accrued to the various Moosa family trusts.2 This appears to have marked the beginning of a breakdown in relations between Mr Akoo, on the one hand, and the representatives of 2 This dispute may be affected by a further judgment by Msimang JP handed down on 22 June 2010 in which he held that the Akoo family trust could not legally have entered into the partnership agreement as on the relevant date its trustees (Mr Akoo and his wife) had not been issued with letters of authority to act as trustees of the trust in terms of s 6 of the Trust Property Control Act 57 of 1988. There is other litigation pending that may also have a material impact upon whether any such partnership ever existed, the identity of the partners and the effect of the order referred to in para 4. The present proceedings were brought and decided prior to the second order by Msimang JP and prior to the commencement of the other litigation and will be decided without reference to them. the Moosa family on the other. It culminated on 24 February 2006 with Mr Akoo addressing a letter to each of the Moosa family trusts giving them notice of the dissolution of the partnership with effect from 28 February 2006. In a case beset by disagreement the one point on which all the parties agree is that this notice was effective to terminate the Rollco partnership, however constituted, with effect from 28 February 2006. [4] On 15 October 2007, on the application of certain of the Moosa family trusts, Msimang J made an order declaring that the partnership relationship subsisting between ten Moosa family trusts and either Mr Akoo personally, or the Akoo family trust, under the name and style of Rollco Roofing Systems, to have been lawfully dissolved with effect from 28 February 2006. He ordered the appointment of Mr Morar as liquidator and that from the date of the order: ‘… all partnership property and assets, of whatsoever form or nature, and regardless of the date of acquisition of such property or asset by the partnership or any of its partners, shall vest in the liquidator.’ [5] Mr Akoo was directed to furnish the liquidator and all the partners with a full and proper account of the partnership business and its assets and liabilities as at 28 February 2006 with supporting documents and vouchers. He and a company, Rollco Roofing Systems (Pty) Ltd, through which Mr Akoo had been conducting the business since 28 February 2006, were ordered to furnish the liquidator with an account of the income and expenditure arising from the operation of that business ‘alternatively arising from the use of the assets of the partnership from 1 March 2006 to the date of account’ including all supporting documents and vouchers, as well as an accounting of the assets and liabilities of the company. The liquidator was directed to effect a final liquidation of the partnership and make any distribution to the partners according to the extent of their determined interests in the partnership. [6] Mr Morar has endeavoured to carry out his task but has met with little success. Neither Mr Akoo nor Rollco Roofing Systems (Pty) Ltd have rendered a proper account as required by the order. There remains no clarity as to the whereabouts of the assets of the business or whether the business is still in the hands of the company or has in effect been transferred to another company. In those circumstances Mr Morar sought and obtained an order for the liquidation of Rollco Roofing Systems (Pty) Ltd. Thereafter an enquiry in terms of the provisions of s 417 of the Companies Act 61 of 1973 (the old Companies Act)) was convened before a retired judge. For reasons that are immaterial he raised a query whether such an enquiry was competent. That resulted in protracted litigation between the liquidator and the present respondents that was only resolved after the appeal before us had been lodged. There have been other legal proceedings involving the liquidator but with little advantage in terms of achieving finality with the liquidation. [7] In the result Mr Morar ran short of the sinews of war. He accordingly wrote letters to the different potential partners of the Rollco partnership asking for contributions. An amount of R500 000 was forthcoming from the various Moosa family trusts but Mr Akoo and the Akoo family trust, without expressly refusing to do so, provided nothing. Their refusal is the subject of the first order sought by Mr Morar. In it he asks that they be ordered to pay him an amount of R500 000 ‘for the purposes of administering the estate of the partnership which conducted trade under the name and style of Rollco Roofing Systems’. To fortify the order in case of non-compliance he asks that if the money is not paid to him within ten days of the order the sheriff should be authorised to attach property sufficient, once sold, to realise R500 000 and to pay that amount to him. Realising also that this may not prove to be sufficient if Mr Akoo and the Akoo family trust continue to resist his attempts to pursue the liquidation, he also asks for an order that he may in the future call upon the partners to make contributions to him as required in order to fund his work as liquidator and that they will be required to comply with those calls for additional funds. [8] Together with the claim for that financial relief Mr Morar sought an order for a detailed account from Mr Akoo relating to the partnership’s dealings with its major supplier. He also asked for more extensive powers of interrogation in relation to Mr Akoo and certain other individuals. The latter were said by his counsel to be the most important aspect of the order that he sought. What he seeks is the power to appoint a senior advocate to conduct an enquiry as if in terms of s 417 of the old Companies Act. Lastly he asked for authority to take out professional indemnity insurance as an expense of the liquidation. [9] Counsel for Mr Morar did not point to any authority specifically supporting this relief. Instead he submitted that it is relief that can be granted by virtue of the general principles of the actio pro socio ‘and “the wide equitable discretion” given to a liquidator of a partnership’. Reliance was placed upon the exposition of the actio pro socio by Joubert JA in Robson v Theron3 and upon the judgment in Brighton v Clift (2)4. It is helpful to consider what was decided in these cases. 3 At 855H-856G 4 Brighton v Clift (2) 1971 (2) SA 191 (R) at 193B-D. [10] Joubert JA surveyed the development of the law from Roman times in regard to the actio pro socio and summarised his conclusions in the following terms: ‘The principles of the common law underlying the actio pro socio may be conveniently summarised as follows: 1. This action may be instituted by a partner against a co-partner during the existence of the partnership for specific performance in terms of the partnership agreement and/or fulfilment of personal obligations (praestationes personales) arising out of the partnership agreement and business. 2. Where the partnership agreement provides for (or the parties subsequently agree upon) the dissolution of the partnership and the manner in which the partnership is to be liquidated and wound-up specific performance thereof may be claimed by means of this action. 3. Where neither the partnership agreement nor a subsequent agreement between the partners provides for the dissolution of the partnership and the manner in which the partnership is to be liquidated and wound-up this action may in general (subject to any stipulation for the duration of the partnership or any other relevant stipulations) be brought by a partner to have the partnership liquidated and wound-up. The Court in the exercise of its wide equitable discretion may appoint a liquidator to realise the partnership assets for the purpose of liquidating partnership debts and to distribute the balance of the partnership assets or their proceeds among the partners. Pothier, op. cit., sec. 136. 4. Where a partnership has been dissolved a partner may avail himself of this action against his co-partners to claim distribution of any undistributed partnership asset or assets. Pothier, op. cit., sec. 162: "Each of the former partners can alone demand a distribution of the effects which remain in common after the dissolution of the partnership." This obviously covers the situation where, after dissolution of a partnership, a continuing partner retains possession of a partnership asset which has not been included in a distribution of the partnership assets. Hence a retiring partner may institute this action against the continuing partner to claim a distribution of the partnership asset in question. 5. A court has a wide equitable discretion in respect of the mode of distribution of partnership assets, having regard, inter alia, to the particular circumstances, what is most to the advantage of the partners and what they prefer. 6 The various modes of distribution of partnership assets are fully dealt with by Pothier, op. cit., secs. 161 - 178.’ [11] Two points are noteworthy about this exposition of the general principles of the actio pro socio. The first is that according to the authorities the action is one that lies at the instance of one of the partners for relief against another partner, either during the subsistence of the partnership or after its dissolution. A detailed discussion is to be found in Voet 17.2.9 and 17.2.105 where it is said that the action is one in terms of which one partner may claim against another: (a) an account and a debatement thereof, either during the subsistence of the partnership or after it has been terminated; (b) delivery of a partnership asset to the partnership; (c) the appointment of a liquidator to the partnership. Other writers describe the actio in similar terms.6 Pothier7 says that: ‘From the obligations which arise out of the contract of partnership arises the action pro socio, which each of the partners can maintain against his copartners, in order to compel their fulfilment. This is a personal action: it passes to the heirs and other universal successors of each of the partners, who can maintain that action; and it may be brought against the heirs and other universal successors of the partners, who are bound by it.’ None of the writers suggest that the actio is available to a liquidator once appointed to liquidate a partnership. It is always available to the erstwhile 5 The Selective Voet being the Commentary on the Pandects of Johannes Voet (Gane’s translation), Vol 3. 6 Van der Linden, Institutes of Holland (Juta’s translation) 2.4.1.11; Van der Keesel, Select Theses on the Laws of Holland and Zeeland (Lorenz’s translation), 700 and 701; Van Oven’s Leerboek van Romeinsch Privaatrecht (3rd ed)(1948) at 280 et seq. 7 Pothier, A Treatise on the Law of Partnership (translated by Owen Davies Tudor, 1854) section 134. partners, but that does not mean that the liquidator can invoke it. This undermines the attempt by Mr Morar to rely on it for the relief he seeks. [12] The second point is that the references by Joubert JA to ‘a wide discretion’ are not references to a discretion vested in the liquidator nor are they references to a discretion enjoyed by the court to invest the liquidator with broad-ranging powers. They refer to the discretion enjoyed by a court either to appoint a liquidator or to order a distribution of the partnership property among the partners in some other fashion. The discussion in the passage that follows of the actio communi dividundo refers to a similar discretion. The learned judge said only that, when former partners approach the court for relief under either of these actiones, the court has a wide discretion to determine whether to appoint a liquidator, or to order a division of the partnership property, or to order one partner to take over that property at a valuation with payment of the appropriate share to the other or others. That is something very different from saying that the liquidator appointed by the court has a wide discretion in regard to the manner in which the liquidation is carried out or from saying that the court has a wide discretion to afford extensive powers to the liquidator of a partnership. [13] The other authority on which reliance is placed in support of the proposition that a liquidator has a ‘wide equitable discretion’ is the decision in Brighton v Clift (2), supra. That concerned the dissolution and winding-up of a firm of attorneys and the issue before the court was whether a liquidator should be appointed in the face of opposition from the one partner. The judgment was accordingly not concerned with the powers to be granted to the liquidator, if appointed, save in a passing fashion. Having decided that a liquidator should be appointed Macauley J dealt with his powers in these terms: ‘With regard to the powers to be conferred on the liquidator, it seems to me that it is not this Court's function to act as a liquidator and to anticipate problems which may present themselves to the liquidator at a later stage. Doubtless, these will arise in any liquidation, but they are matters for the liquidator to decide and, in doing so, he may seek the parties' concurrence in any course he takes. Failing their agreement, his decisions are open to objection by either party with recourse to the Courts. I decline, therefore, to direct the liquidator in the manner sought in paras. 2-6 inclusive of the amended draft order.’ 8 (Emphasis added.) In the result the order the court made was confined to one appointing the liquidator to wind up the partnership, realise its assets, collect the debts due to it, prepare a final account and divide the assets between the partners after paying the debts and the costs of liquidation. [14] That judgment does not assist Mr Morar. The judge was asked to make an order in very detailed terms, the particulars of which do not emerge from his judgment. He refused to grant that order and instead granted an order appointing the liquidator and leaving it to the liquidator to determine how to go about his task. He did so on the basis that it would be sensible for the liquidator to seek the concurrence of the parties to any particular course of action in the knowledge that if they did not agree with any particular decision they might have recourse to the court to challenge it. He did not suggest that a liquidator could come back to the court to seek additional powers of the type claimed in these proceedings. [15] In Robson v Theron Joubert JA did not address in detail the situation of a liquidator, no doubt because he decided that such an appointment would not be appropriate. His concern was whether the actio 8 At 193B-D. pro socio or the actio communi dividundo is the appropriate remedy to resolve issues around the liquidation of a partnership, or whether either one could be used.9 The only passage in his judgment dealing with liquidators reads: ‘Van der Linden, 2.4.1.14, deals in some detail with the liquidation or winding-up of a partnership. In doing so he relies heavily on the authority of the great French jurist, Pothier, whose treatise on the law of partnership was regarded towards the end of the eighteenth century as an authority of great weight in the Netherlands. This is not surprising since the French and Roman-Dutch law of partnership are both founded on Roman law. See Wessels, History of the Roman-Dutch Law, p. 652. His treatise was translated by Van der Linden into Dutch: Verhandeling van het Recht omtrent Sociëteiten of Compagnieschappen and has been regarded by our Courts as an important authority in this branch of the law. In order to obviate repetition I intend to follow up what Pothier has to say on the subject. Pothier in his Treatise on the Contract of Partnership (translated by Owen Davies Tudor) affirms the twofold purpose of the actio pro socio, viz. to implement the terms of the partnership agreement and to dissolve it.’10 This only deals in passing with the process of liquidation and provides no support for the contentions on behalf of Mr Morar. The learned judge was simply not concerned with the powers to be afforded a liquidator appointed to liquidate the partnership. [16] I have found nothing in the old authorities to justify the notion that the court has a discretion to grant wide-ranging powers of administration to the liquidator of a partnership to be exercised in the course of liquidating the partnership. The leading writers on the topic of partnership among the old authorities barely mention the topic of the appointment of liquidators and their powers. The reason appears to be that in many places local ordinances provided that disputes about liquidation should be 9 See the discussion at 850C-854D. His conclusion following Pothier, was that both remedies are available to be invoked in appropriate circumstances. 10 At 852D-G. referred to arbitrators. By way of example, in the passage cited by Joubert JA in support of paragraph 3 of his summary of the elements of the actio pro socio, Pothier refers to the applicable French ordinance when he says; ‘For this end, the Ordonnance of 1673, tit 4. art 9., provides that all contracts of partnership should contain the clause of submission to arbitration upon all disputes which may arise amongst partners on account of the partnership, and that where that clause has been omitted, it should be supplied.’ [17] It would be unwise, in the absence of full argument on the source of the court’s power to appoint a liquidator to a partnership, to make a definitive finding as to the full extent of the powers that a court may vest in the liquidator of a partnership. It is sufficient to deal with certain basic principles and in the light of those to assess the specific powers that the liquidator seeks in this case and determine whether they can or should be granted. [18] When the court appoints a liquidator for a partnership it is remedying the failure of the partners to attend to the liquidation of the partnership by agreement. Such failure may arise from disagreement over the need to appoint a liquidator, or over the identity of the liquidator or the powers that the liquidator should enjoy. That being so it is logical to take as one’s starting point the powers that the partners could themselves confer by agreement, if they were not in a state of hostilities. The court is then asked to do no more than resolve a dispute between the partners over the appointment of the liquidator or over the liquidator’s powers. It does so in a way that the parties themselves could have done. The disagreement arises in consequence of the one partner refusing to agree to the liquidator being appointed or the liquidator having a particular power and that can be characterised as a breach of the obligations of co- operation and good faith that are central to all partnerships. The court is then merely enforcing the contractual obligations of the partners themselves. [19] Once the court is asked to go beyond this it is necessary to identify a source of its power to do so. That is central to the rule of law that underpins our constitutional order. Courts are not free to do whatever they wish to resolve the cases that come before them. The boundary between judicial exposition and interpretation of legal sources, which is the judicial function, and legislation, which is not, must be observed and respected. In this case no such source was identified. [20] In argument it was submitted that the appointment and functions of the liquidator of a partnership are largely equivalent to those of the liquidator of a company under the old Companies Act. However the analogy is false. Unlike partnerships, companies only exist under the legislation under which they are constituted, which governs their creation, operation and liquidation. Although in some jurisdictions partnerships are regulated by statute11 that is not the case in South Africa. In our law the general approach to partnerships is that their creation, operation and dissolution depends upon the terms of the agreement concluded by the partners. If there are disputes at any stage of the relationship those are resolved by the courts under the general rules governing contracts and in terms of the actio pro socio. Whatever policy reasons might exist for bringing about some degree of equivalence between partnerships and companies, the legislature has not done so. 11 As in the United Kingdom. [21] Turning specifically to the relief claimed by Mr Morar, in para 7.19 of the original order granted by Msimang J, he had been authorised to direct any of the partners to attend on him at his offices in order to answer such questions as he might raise in relation to any of the affairs and assets of the partnership.12 In these proceedings he seeks an order authorising him to employ attorneys and counsel for the purpose of examining any of the partners, their servants or representatives suspected of being in possession of property of the partnership or of being indebted to the partnership or who is deemed capable of giving information concerning the trade, dealings, affairs or property of the partnership. To that end he also sought an order authorising him to engage the services of a senior advocate to preside over ‘such examination or interrogation’ with the same powers mutatis mutandis as a person appointed to conduct an enquiry in terms of s 417 of the old Companies Act. Some of those powers were spelled out in the draft order and they included the power to summon witnesses, compel discovery, administer an oath and both question and allow such person to be interrogated. There are legal difficulties in regard to the power of the court to grant such orders and, if granted, there would be practical difficulties in enforcing them. [22] The legal difficulties arise because it is debatable whether and to what extent it is competent contractually to invest an individual with certain of the powers conferred upon a functionary by statute.13 The practice of conferring upon receivers under offers of compromise in terms of s 311 of the Companies Act 61 of 1973 the powers of a liquidator 12 I leave aside any consideration of whether this order was itself competent or how it would operate if all the partners were trusts, as might have been the case on one of the factual scenarios before the learned judge. 13 South African Fabrics Limited v Millman NO & another 1972 (4) SA 592 (A) at 600E-G, citing South African Board of Executors & Trust Co. (In Liquidation) v Gluckman 1967 (1) SA 534 (A) at 541F-H. mutatis mutandis was described by Milne JA as ‘indiscriminate borrowing mutatis mutandis of a liquidator’s general armoury’ which led to “unforeseen problems and disputes’.14 In Gunn & another NNO v Victory Upholsters (Pty) Ltd15 Didcott J dealt with a similar clause and said that it could not mean that literally all the powers of a liquidator were included. Among those he specifically said were excluded16 was the power to interrogate the directors of the company about their management of it prior to liquidation. [23] The practical difficulties reinforce the legal ones. They are illustrated by certain questions posed to counsel in the course of argument. What if a person does not attend in response to a summons to appear at such an interrogation? What happens if they decline to take an oath or make an affirmation? Can they refuse to answer questions? What are the consequences if they do so? If they lie in the course of such an interrogation does that make them liable for the penalties attaching to the crime of statutory perjury? No satisfactory answer was forthcoming. In the case of companies the answers are reasonably clear and flow from the terms of the statute. The questions are important because the successful conduct of an interrogation depends upon there being answers that govern these situations. It is also necessary that there be answers to them because the conduct of such an interrogation raises constitutional issues in view of its potential to infringe constitutionally protected rights such as the right to dignity and the right to privacy.17 In my view there is no satisfactory 14 Morris NO v Airomatic (Pty) Ltd t/a Barlows Airconditioning Co. 1990 (4) SA 376 (A) at 401F-G. This was a slight alteration of what Didcott J had said in Ex parte Trakman NO: In re Dumbe Motel (Pty) Ltd 1978 (1) SA 1082 (N) at 1084 C-D. 15 Gunn & another NNO v Victory Upholsters (Pty) Ltd 1976 (1) SA 127 (D) at 135B-D 16 Approving counsel’s concession to this effect. 17 Ferreira v Levin NO & others; Vryenhoek & others v Powell NO & others 1996 (2) SA 621 (CC); Bernstein & others v Bester & others NNO 1996 (2) SA 751 (CC). answer to these questions and that poses insuperable practical problems to the grant of these powers. [24] If the court were to give these powers to the liquidator a curious and untenable situation would result. It is illustrated by the following example. Assume that a partnership business has closed because of financial difficulties without any rift between the partners. They believe that the source of their financial difficulties was the dishonesty or negligence of a former employee. They wish to interrogate the employee in order to confirm their suspicions. They cannot by agreement appoint a liquidator with the power to conduct an interrogation and if they do the employee can disregard such an appointment. Nor can they ask the court to conduct an interrogation on their behalf. Courts in this country do not have a general power to interrogate people. Yet, if the proposition on behalf of Mr Morar is correct, the partners can overcome these difficulties by applying to the court for the appointment of a liquidator and asking the court to vest the liquidator with the power to conduct an interrogation. That cannot be correct. It would mean that although neither the court nor the partners are entitled to conduct an interrogation, they are able to bring one about by the simple expedient of the court appointing the liquidator and granting an order such as that sought in this case. [25] For those reasons K Pillay J was correct to refuse to grant Mr Morar the powers of interrogation that he seeks. The power to order an interrogation is an exceptional power18 and I can find no basis upon which it is one that courts can confer upon liquidators of partnerships. If that is a shortcoming the remedy must lie in legislation. 18 In re North Australian Territory Company (1890) 45 Ch D 87 at 93 per Bowen LJ. [26] The second aspect of the application is the prayer for a contribution to the costs of administration of the liquidation of the partnership in an amount of R500 000, together with the power to call upon the partners in future to make further contributions if that is needed. The primary reason for seeking these funds is that Mr Morar contemplates litigation that will be both ‘complex and controversial’ and ‘time consuming and expensive’. It is apparent from the founding affidavit that the primary target of this litigation will be Mr Akoo or entities controlled by him, such as the Akoo family trust. [27] Once again no authority was proffered for this order beyond the suggested wide equitable discretion, the existence of which I have already rejected. Apart from the provisions in rule 43 for the court to order a contribution towards costs in relation to pending matrimonial proceedings, I am not aware of any circumstance in which our law permits a party to proposed litigation to obtain from the intended other party a contribution towards the costs of that litigation.19 [28] This case illustrates how inappropriate it would be for such an order to be granted. The liquidator seeks a contribution on the basis that Mr Akoo and the Akoo family trust are partners to the extent of 50 per cent in Rollco. However that is disputed by the Moosa trusts, which claim that the Akoo family trust is not a partner at all and that Mr Akoo’s share is limited to an approximately 20 per cent share, whilst they hold the balance. Plainly some at least of the intended litigation will be directed at this issue. If the assertion by the Moosa trusts is rejected then Mr Akoo and the Akoo family trust will have had to pay half the 19 Cases where security for costs may be ordered are different because they are merely cases of providing security against the possibility of the party furnishing such security having an adverse costs order made against it. costs of running litigation against themselves in which they have been successful. What is more there is then little likelihood that they will be able to recover their costs from Mr Morar. If it transpires that the Moosa trusts are correct and Mr Akoo’s interest is only 20 per cent, on what basis will he have had to provide half the costs of establishing that? [29] At this point the analogy between the liquidator of a partnership and the liquidator of a company is abandoned. In the case of a company the liquidator must go to the creditors if financial assistance is needed in order to pursue litigation and obtain contributions from them. Here the beneficiaries of the proposed litigation would be the Moosa family trusts. Why then should they not be required to provide the finances for litigation if they wish to assert rights against their erstwhile partner? Indeed one wonders why they do not institute the proceedings themselves instead of leaving it to Mr Morar. The question of the identity of the partners and the extent of their respective interests in the partnership is pre-eminently an issue to be resolved among the partners by way of proceedings under the actio pro socio. [30] To multiply examples of the problems with this claim would be to heap Pelion upon Ossa. The court does not have the power to make such an order and it was rightly refused by K Pillay J. [31] The next issue relates to the prayer for a detailed account in respect of Rollco’s dealings with its principal supplier. It can be disposed of simply. Firstly such an obligation already exists under the order granted by Msimang J. Secondly a corresponding order was made against the supplier without opposition and there is no reason to believe that it will not be complied with. Such an order is accordingly unnecessary. [32] That leaves only the prayer in relation to procuring professional indemnity insurance. There is no need for such an order to be made. If Mr Morar reasonably requires professional indemnity insurance in order to carry out the liquidation of the Rollco partnership then he is entitled to take out such insurance and in due course recover the premium as a cost of administration. If he does not reasonably require such insurance for the purposes of administration then the costs of his taking out such insurance are a personal expense and cannot be debited to the partnership or its members. The court cannot alter that situation. Mr Morar must make up his own mind on this question and act accordingly. He does not need an order of court to do so. [33] For those reasons the high court was correct to dismiss the application and the appeal must be dismissed. Although two counsel appeared in the appeal the costs of two counsel were not sought in the heads of argument and only one counsel appeared in the high court. The matter was not so complicated as to warrant the employment of two counsel. The appeal is dismissed with costs. M J D WALLIS JUDGE OF APPEAL Appearances For appellant: A J Dickson SC Instructed by Schoerie & Sewgoolam Inc, Pietermaritzburg McIntyre & Van der Post, Bloemfontein For respondent: N A Cassim SC (with him D Ramdhani) Instructed by Abbas Latib & Co, Durban Honey Attorneys Inc, Bloemfontein.

Supreme Court of Appeal of South Africa MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 15 September 2011 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. MORAR NO V AKOO The Supreme Court of Appeal dismissed an appeal against an order by the High Court refusing to grant the liquidator of a partnership the power to conduct an interrogation as if in the liquidation of a company and the right to demand that the partners provide him with funds, both for that purpose and in order to engage in litigation to recover assets allegedly belonging to the partners. The court held that powers of a liquidator in the liquidation of a partnership should first be assessed in the light of the powers that the partners themselves could confer on the liquidator. Where the partners could not by their agreement confer such powers it would generally be inappropriate for the court to do so.

1764

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 183/10 In the matter between: MINISTER OF SAFETY AND SECURITY Appellant and ROELOF PETRUS KRUGER Respondent Neutral citation: Minister of Safety and Security v Kruger (183/10) [2011] ZASCA 7 (8 MARCH 2011) Coram: NUGENT, CACHALIA and SHONGWE JJA Heard: 16 FEBRUARY 2011 Delivered: 8 MARCH 2011 Summary: Unlawful arrest and detention – s 55(1) of the South African Police Service Act 68 of 1995 – whether exempts state from liability – defamation and injuria – damages award. _____________________________________________________________________ ORDER _____________________________________________________________________ On appeal from: North Gauteng High Court, Pretoria (Tuchten AJ sitting as court of first instance) The award of damages for defamation and injuria is set aside and replaced with an award of R20 000. Save for that the appeal is dismissed with costs. _______________________________________________________________________ JUDGMENT _______________________________________________________________________ NUGENT JA (CACHALIA and SHONGWE JJA concurring) [1] Rayton is a small town of about 2 500 inhabitants. It is where Mr Kruger (the respondent) conducts business repairing motor vehicles. While at his premises Mr Kruger was arrested by the police under a warrant that had been issued by a magistrate. He was driven to a police station where he was incarcerated overnight. The following day he was brought before a magistrate and released on bail. In due course the Director of Public Prosecutions declined to prosecute. [2] A reporter and a cameraman from e-tv – a national television broadcaster – were present at the premises when the police arrived to arrest Mr Kruger. They followed the police onto the premises and made a video and audio recording of the arrest, and of Mr Kruger being led away in handcuffs to the waiting police vehicle. That night a report of the arrest – accompanied by visual images – was broadcast on one of its news channels. [3] Mr Kruger sued the Minister of Safety and Security (the appellant) in the North Gauteng High Court for damages, first, for unlawful arrest and detention, secondly, for infringement of his dignity, and thirdly, for defamation. All the claims succeeded before Tuchten AJ. He awarded damages of R50 000 for unlawful arrest and detention and of R300 000 for infringement of dignity and defamation combined. The Minister now appeals with the leave of that court. [4] The chronicle commences with a complaint that was made to the police by Ms Mahlangu. She said that Mr Kruger had stolen a Mazda motor vehicle from her by false pretences. A considerable part of the evidence was taken up with that complaint. Mr Kruger said that he had been given the vehicle in exchange for a Honda vehicle by agreement with a friend of Ms Mahlangu who purported to be acting on her behalf. The dispute on that issue is not material and I need say no more about it. [5] The complaint was investigated by Sergeant Mavuso of the organized crime unit on the instructions of Senior Superintendent Ngwenya. The full extent of the investigation does not appear from the evidence. But what does appear is that Sergeant Mavuso discovered, amongst other things, that the Honda vehicle that had been the subject of the alleged exchange was registered in Swaziland, and he suspected that it had been stolen in that country. [6] Once his investigation was complete Sergeant Mavuso forwarded the docket to the Director of Public Prosecutions. Some time later he was informed by a member of that office that it had been decided to prosecute Mr Kruger and Sergeant Mavuso was handed a warrant that had been issued by a magistrate authorising his arrest. [7] Section 43 of the Criminal Procedure Act 51 of 1977 authorises a magistrate or justice of the peace to issue a warrant for the arrest of any person upon the written application of a public prosecutor (amongst others). The application must set out the offence alleged to have been committed, it must contain certain jurisdictional allegations, and it must state that from information taken upon oath there is a reasonable suspicion that the person in respect of whom the warrant is applied for has committed the alleged offence. [8] In this case the application for the warrant, and the warrant itself, were both embodied in a single-page standard-form. The application recorded that Mr Kruger was suspected to have committed fraud and forgery and uttering. The space provided in the standard-form warrant for recording the offence was, however, left blank. [9] At about 10h00 on 3 December 2003 Sergeant Mavuso and Senior Superintendent Ngwenya arrived at the business premises of Mr Kruger to effect his arrest. They were accompanied by eight other police officers. At the premises with Mr Kruger were his parents, another relative, a number of employees and two clients. Present outside the premises were the cameraman and the reporter I referred to earlier. [10] Sergeant Mavuso and Senior Superintendent Ngwenya entered the premises and proceeded to Mr Kruger’s office. They were followed by the cameraman who recorded the interior of the premises and the arrest, which occurred in the office of Mr Kruger. Mr Kruger was told by Sergeant Mavuso that he was under arrest and Senior Superintendent Ngwenya handcuffed his wrists behind his back. He was then led out to the police vehicle and the events that I mentioned earlier ensued. [11] The court below found that the warrant of arrest was invalid – and thus that the arrest and subsequent detention were unlawful – because it failed to reflect the offences in respect of which it was issued. That finding was challenged only faintly before us. The terms in which a warrant of arrest must be framed are not expressly stated in the Act but I think it is implicit in ss 39(2) and 43(2) that it was intended that it should reflect the offence in respect of which it has been issued. Section 39(2) requires a person who effects an arrest without a warrant to inform the arrested person of the cause of the arrest. Where the arrest is effected in execution of a warrant the arrestor must, upon demand of the arrested person, hand him or her a copy of the warrant. Quite clearly that contemplates that the cause of the arrest will appear from the warrant. Moreover, s 43(2) provides that a warrant of arrest must direct the arrest of the person named in the warrant ‘in respect of the offence set out in the warrant’. I think those two provisions make it abundantly clear that it was considered by the draftsman to be self-evident that a warrant must describe the offence and it was not considered necessary to express that in terms. I also think that it must be taken to be axiomatic that a warrant that is formally defective in a material respect – as the warrant was in this case – is invalid.1 [12] Two submissions that were advanced on behalf of the Minister can be disposed of briefly. It was submitted that in this case Mr Kruger would 1 Cf Minister of Safety and Security v Van der Merwe (55/09) [2010] ZASCA 101; [2011] 1 All SA 260 (SCA). have known the suspected offences for which he was being arrested because they were described in the application for the warrant that appeared immediately above the warrant on the single-page standard- form. I do not think the submission has merit. If the statute required the warrant to reflect the suspected offences and rendered it invalid if it did not do so, as the statute does, then I think it follows that it is immaterial that they are apparent from another source, even if that source is readily to hand.2 As Cameron JA observed in Powell NO v Van der Merwe NO,3 albeit in relation to a warrant authorising search and seizure, the courts examine the validity of such a warrant ‘with a jealous regard for the liberty of the subject’, and in my view that must apply even more to warrants that authorise the deprivation of personal freedom. [13] It was also submitted that even if the warrant was invalid the arrest was nonetheless lawful because the police had a reasonable suspicion that offences had been committed. That was not pleaded in justification of the arrest but counsel submitted that the issue was fully canvassed in the evidence. I am not sure that the issue was indeed canvassed but in any event on the evidence that is before us the submission must fail. Section s 40(1)(b) of the Criminal Procedure Act confers a discretion upon a police officer to arrest upon reasonable suspicion that fraud or forgery and uttering (amongst other offences) have been committed. In this case the police officers did not purport to exercise that discretion. On the contrary, they purported to do no more than to execute the instruction contained in the warrant. 2 Cf Thint (Pty) Ltd v National Director of Public Prosecutions 2009 (1) SA 1 (CC) para 159 in relation to warrants authorising search and seizure. 3 2005 (5) SA 62 (SCA) para 59. [14] But the principal ground upon which the Minister sought to avoid liability was in reliance upon s 55(1) of the South African Police Service Act 68 of 1995, which exempts a police officer from liability for the consequences of executing a defective warrant in certain circumstances. It was submitted on behalf of the Minister that because the police officer is exempted from liability it follows that the state cannot be vicariously liable. Two decisions of the high courts stand in the way of that submission and we were asked to overrule them. [15] Section 55(1) of that Act provides as follows: ‘Any member who acts under a warrant or process which is bad in law on account of a defect in the substance or form thereof shall, if he or she has no knowledge that such warrant or process is bad in law and whether or not such defect is apparent from the face of the warrant or process, be exempt from liability in respect of such act as if the warrant or process were valid in law’.4 [16] The terms in which the submission on behalf of the Minister was framed in the heads of argument points immediately to its fallacy. It is not disputed that neither of the police officers was aware that the warrant was bad in law and that they were thus exempted from liability under that section. Reminding us that vicarious liability is a secondary liability counsel for the Minister submitted that the effect of the exemption was that the police officers ‘committed no delict’ and there is thus no room for vicarious liability. [17] That construction of the section is not correct. A police officer – or anyone else for that matter – who deprives a person of his or her liberty without legal justification commits a delict, and is ordinary liable for the 4 Section 331 of the Criminal Procedure Act is in identical terms except that it extends beyond police officers. damage that is caused by the delictual act. The section does not purport to render the act lawful. In its terms it does no more than to relieve the police officer of the consequences of the delictual act. The act remains unlawful and, in accordance with ordinary principles, the employer is vicariously liable for its consequences. [18] The same argument was advanced and rejected in Goldschagg v Minister van Polisie.5 In that case the question arose under s 31(1) of the Police Act 7 of 1958, which is in material respects the same as the provision that is before us.6 Botha J summarily rejected an argument that the effect of the section was that a police officer who executes a defective warrant does not commit an unlawful act. The learned judge also found that while the section exempted the police officer from the consequences of the unlawful act it did not similarly exempt the state.7 (The decision was reversed on appeal8 but the issue that is now before us was not considered.) [19] Thirion J reached the same conclusion in De Welzim v Regering van KwaZulu9 in relation to s 34(2) of the KwaZulu Police Act 14 of 5 1979 (3) SA 1284 (T). 6 Section 31(1) reads as follows: ‘If any legal proceedings be brought against any member of the Force for any act done in obedience to a warrant purporting to be issued by a magistrate or justice of the peace or other officer authorized by law to issue warrants, that member shall not be liable for any irregularity in the issuing of the warrant or for the want of jurisdiction in the person issuing the same, and upon producing the warrant containing the signature of the person reputed to be a magistrate or justice of the peace or other such officer as aforesaid, and upon proof that the acts complained of were done in obedience to the warrant, judgment shall be given in favour of such member.’ 7 The learned judge also inferred from the judgment of this court in Minister van die Suid Afrikaanse Polisie v Kraatz 1973 (3) SA 490 (A) at 1302A-B that the trial court had supported that conclusion (the issue was not dealt with on appeal). I have had the advantage of access to the judgment of the trial court – which was not available to the learned judge – from which it appears that the point that is now before us was not pertinently considered by that court. 8 Minister van Polisie v Goldschagg 1981 (1) SA 37 (A) 9 1990 (2) SA 915 (N). 1980.10 The learned judge said the following: ‘By ‘n beskouing van art 34(2) is dit duidelik dat dit nie die handeling van die lid van die Mag verontskuldig nie. Dit verskaf nie ‘n skulduitsluitingsgrond nie en ook nie ‘n regverdigingsgrond ten opsigte van die handeling nie. Dit stel slegs die lid vry van aanspreeklikheid sonder dat dit die kwaliteit of onregmatigheid van die daad self raak. Gevolglik beïnvloed dit nie die aanspreeklikheid van die KwaZulu Regering nie.’ 11 [20] I have no doubt that the decisions in Goldschagg and De Welzim were correct. I need only add that the draftsman of s 55(1) must be assumed to have known of those decisions when the section was drafted. The repetition in s 55(1) of the material terms of the sections that were there in issue itself indicates that the draftsman intended s 55(1) to bear the construction that was adopted in those cases.12 In those circumstances the finding by the court below that the Minister is liable for the consequences of the unlawful arrest and detention cannot be faulted. [21] I turn to the claims for injuria and defamation before returning to the amount that was awarded in damages. [22] The broadcast on the night of the arrest commenced with an introduction by the presenter who said the following: ‘It could be the end of the road for a car theft syndicate operating between Swaziland and South Africa. After a two year investigation, Mpumulanga police today arrested the man believed to be the kingpin. Police say the cars are stolen in Swaziland and 10 Quoted in the judgment at 920F-H as follows: ‘’n Lid van die Mag wat ter goeder trou ‘n handeling verrig ooreenkomstig of in die tenuitvoerlegging van ‘n bepaling wat ‘n verordening van ‘n bevoegde wetgewende gesag heet te wees is, ondanks enige onreëlmatigheid in verband met die verordening van of gebrek in so ‘n bepaling of afwesigheid van regsbevoegdheid van daardie wetgewende gesag, vry van aanspreeklikheid ten opsigte van die verrigting van daardie handeling in dieselfde mate en onderworpe aan dieselfde voorwaardes asof daardie onreëlmatigheid nie plaasgevind het of daardie gebrek of afwesigheid van regsbevoegdheid nie bestaan het nie.’ 11 At 923H-I. 12 LC Steyn: Die Uitleg van Wette (1981) by S I E Van Tonder assisted by N P Badenhorst, C N Volschenk and J N Wepener 5ed p 132. sold in South Africa. They believe government officials in both countries and a local insurance company are also involved.’ The broadcast then switched to the reporter who opened her report as follows: ‘It was not business as usual at this car repair workshop. The boss was arrested for vehicle theft, fraud and forgery’. The interior of the workshop was shown visually, followed by a visual and audio recording of a short conversation between Senior Superintendent Ngwenya and Mr Kruger immediately after his arrest, and a visual showing of him being handcuffed. The recording went on to show Mr Kruger being led away to the police vehicle with his hands handcuffed behind his back. The reporter concluded her report as follows: ‘It is alleged that cars stolen in Swaziland are brought here for re-spraying and their engine numbers are also changed. Police say they have identified three such vehicles but believe there are others’. [23] The visual images of Mr Kruger showed only his torso at the time of his arrest, and his back as he was being led away. His name was not mentioned in the course of the report. It is clear that only those who were acquainted with Mr Kruger or his workshop would have been capable of identifying him from the report. [24] It was alleged by Mr Kruger that one or other police officer must have informed the television team (or the television station) of the anticipated arrest and to have done so with the intention that it should be recorded and broadcast. His case was that the police officer concerned thereby wrongfully ‘instigated’ the defamatory and injurious broadcast and that the Minister is vicariously liable for such damage as the broadcast caused. [25] The claim is rather unusual but we are not called upon to deal with its substance. The sole ground upon which the claim was resisted in the court below and in this court was a denial that the police were responsible for the presence of the television crew. We were told by counsel for the Minister unequivocally that if we were to find that the presence of the television team was indeed brought about by information provided by one or other police officer – which was the finding of the court below – then it was accepted that the Minister is liable for any damage that was caused by the broadcast. We have accordingly approached the matter on that basis but I must emphasise that we make no finding on other aspects of the claim. [26] I turn to that factual question. The television reporter, Ms Mabuse, gave evidence. She said that she had no recollection of how they came to be present at the scene but that it might have been on information provided by the police. Only two other possibilities were suggested by counsel for the Minister. One was that the television team happened upon the scene fortuitously. The prospect that a television team from a national broadcaster fortuitously happened to be outside a motor vehicle workshop in Rayton at the time the police arrived is so remote as to be non-existent. The second suggestion was that one or other member of the community might have been the culprit. It is most unlikely that members of the local community would have known of the imminent arrest and least of all of the nature of the investigation that the police had undertaken. I agree with the court below that it is probable that one or other member of the police informed e-tv of the anticipated arrest so that it could be given publicity. That being so, on the approach that was adopted on behalf of the Minister before us (and in the court below) the only remaining issue is to assess the damages to be awarded for the consequences of the broadcast. [27] It is trite that the determination of damages is within the discretion of the trial court and will be interfered with only in the event of misdirection. Misdirection might in some cases be apparent from the reasoning of the court but in other cases it might be inferred from a grossly excessive award. [28] It has been said repeatedly that the assessment of awards of general damages with reference to awards made in previous cases is fraught with difficulty. They nonetheless provide a measure of guidance provided that those difficulties are borne in mind. As Potgieter JA said in Protea Assurance Co Ltd v Lamb, 13 after citing earlier decisions of this court: ‘The above quoted passages from decisions of this Court indicate that, to the limited extent and subject to the qualifications therein set forth, the trial Court or the Court of Appeal, as the case may be, may pay regard to comparable cases. It should be emphasised, however, that this process of comparison does not take the form of a meticulous examination of awards made in other cases in order to fix the amount of compensation; nor should the process be allowed so to dominate the enquiry as to become a fetter upon the Court’s general discretion in such matters. Comparable cases, when available, should rather be used to afford some guidance, in a general way, towards assisting the Court in arriving at an award which is not substantially out of general accord with previous awards in broadly similar cases, regard being had to all the factors which are considered to be relevant in the assessment of general damages. At the same time it may be permissible, in an appropriate case, to test any assessment arrived at upon this basis by reference to the general pattern of previous awards in cases where the injuries and their sequelae may have been either more serious or less than those in the case under consideration.’ [29] I turn first to the award for unlawful arrest and detention. An appropriate award in a case of that kind – with reference to awards in 13 1971 (1) SA 530 (A) at 535H-536B. some past cases – was considered most recently by this court in Seymour v Minister of Safety and Security.14 In that case the plaintiff was unlawfully arrested and detained for five days. One night was spent in a police cell together with other inmates, and the remaining time was spent in a hospital ward, to which the family of the plaintiff had free access. An award of R500 000 was reduced on appeal to R90 000. [30] On the face of it the arrest and detention in this case, by comparison, might seem to warrant a substantially lower award, but there is a materially aggravating factor. To be arrested, even lawfully, is inherently humiliating. So much more so when a cameraman has grossly invaded the privacy of the arrestee by entering upon his or her premises without permission and thereupon recorded the arrest. In this case the police permitted – indeed, they probably invited – all that to take place. Given that aggravating factor I see no reason to conclude that the award was excessive – and least of all that it was grossly excessive. There was no cross-appeal against the award. [31] Before leaving this topic there is an observation that needs to be made. The police have a duty to carry out policing in the ordinary way. They have no business setting out to turn an arrest into a showpiece. Similar conduct, on that occasion by officials of the Competition Commission who were executing a warrant for search and seizure, evoked the censure of this court in Pretoria Portland Cement Co Ltd v Competition Commission.15 When executing a warrant of arrest the police are obliged to do so with due regard to the dignity and the privacy of the person being arrested. The conduct of the police in permitting – indeed, 14 2006 (6) SA 320 (SCA). 15 2003 (2) SA 385 (SCA). inviting – a cameraman to invade the premises of Mr Kruger in order to witness the arrest warrants equal censure. [32] While the award for unlawful arrest and detention cannot be faulted, the same cannot be said for the award that was made for injuria and defamation. Two factors that come to the fore in making an assessment are the seriousness of the defamation and the extent of the publication. [33] In this case the substance of the defamation was that Mr Kruger had been arrested on suspicion of having committed various offences. It was pointed out by this court in Independent Newspapers Holdings Ltd v Suliman16 that to allege that a person has been arrested does not imply that he or she is guilty, but it does imply that there is a reasonable suspicion that he or she has committed the relevant offence, which is itself defamatory.17 In that case the majority18 held that before the suspect is brought before a court it is generally not in the public interest or of public benefit that the identity of the arrested suspect should be disclosed, even if the allegation is true.19 But once the suspect has been brought before a court his or her identity may be published with impunity.20 [34] Although the truth of the allegation, by itself, provides no defence to a claim for defamation, it seems to me that it must nonetheless be relevant to the assessment of damages. For the action for defamation protects reputation and it is difficult to see why a person should be 16 [2004] 3 All SA 137 (SCA). 17 Paras 31 and 78. 18 Marais, Scott and Mthiyane JJA, Ponnan AJA and I dissenting. 19 Para 47. 20 Para 47. compensated for loss of reputation if the reputation is in truth not deserved.21 [35] In this case the allegations made in the report were in some respects materially untrue. It is apparent from the application for the warrant that Mr Kruger was not arrested on suspicion of ‘car theft’ but on suspicion of fraud and forgery and uttering. And as pointed out by the court below, Sergeant Mavuso was not of the belief that Mr Kruger was the ‘kingpin’ of a ‘car theft syndicate’, and there is no evidence that anyone else in the police held that suspicion. Nonetheless, it is not disputed that the police suspected on reasonable grounds that he had committed fraud and forgery and uttering – which are themselves serious offences of dishonesty. [36] As for the breadth of the publication the identity of Mr Kruger is likely to have reached a decidedly limited audience notwithstanding that the broadcast was on national television. I have pointed out that his identity would have been known only to those who were acquainted with Mr Kruger or his business premises who would mainly have been the inhabitants of Rayton. Although the evidence establishes that news of the arrest quickly spread throughout the town it is by no means clear that that was in consequence of the broadcast. Indeed, it is likely that news of the event would have become the talk of a small town by word of mouth even without the broadcast. Nonetheless I have accepted that the broadcast reached at least some residents of Rayton and others who knew Mr Kruger. 21 Cf Johnson v Rand Daily Mails 1928 AD 190 at 206. [37] The plaintiff in Suliman was alleged to have been arrested on suspicion of having been associated with the bombing of a nightclub – a particularly heinous crime. His identity was made known and it was published repeatedly in a newspaper that had a wide circulation in an area in which the plaintiff was well known. He was awarded R50 000 for defamation and injuria. In comparison to that award alone, the award of R300 000 in the present case, in which both the nature of the defamation and the breadth of publication was decidedly more limited, was in my view grossly excessive, which points to misdirection. In the circumstances we are at large to reassess the award. It was held in Suliman that the injuria that is associated with defamation is a separate wrong but in that case, as in the present, a combined award was made. In the light of the considerations above, and in particular the award in Suliman, in my view the present wrongs are deserving of damages of no more than R20 000. [38] Counsel for the Minister informed us that even if the award is reduced, Mr Kruger has nonetheless had substantial success, in that the appeal was brought primarily to disturb the finding that the Minister is not exempt from liability for wrongful arrest by reason of s 55(1), and that Mr Kruger is entitled to his costs. [39] Accordingly the award of damages for defamation and injuria is set aside and replaced with an award of R20 000. Save for that the appeal is dismissed with costs. _________________ R W NUGENT JUDGE OF APPEAL APPEARANCES: For appellant: B R Tokota SC M S Mphahlele Instructed by: State Attorney, Pretoria State Attorney, Bloemfontein For respondent: J J S Prinsloo SC Instructed by: De Klerk & Marais Inc, Pretoria Webbers, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 8 March 2011 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * MINISTER OF SAFETY AND SECURITY v R P KRUGER The Supreme Court of Appeal today dismissed an appeal by the Minister of Safety and Security against a judgment of the high court awarding damages to Mr Kruger for unlawful arrest and for defamation. The claims arose from the arrest of Mr Kruger by police officers under a defective warrant of arrest. The arresting officers were accompanied by a television crew of e-tv and a report of the arrest, with visual images, was broadcast that evening. The Minister contended that the state was exempted from liability for the unlawful arrest by s 55(1) of the South African Police Service Act 68 of 1995 but that contention was rejected. The SCA held that the section exempts the individual police officer from liability but not the state. It confirmed the damages awarded by the high court in the sum of R50 000. Mr Kruger had claimed that the police were responsible for the presence of the television crew when the arrest was made and that the State was accordingly liable for the damage caused by the consequent broadcast. The Minister contended that the evidence did not establish that the police had been responsible for their presence but that was rejected by the SCA. The SCA emphasised that that was the only ground upon which the Minister contested the finding by the high court that the state was liable for the consequent defamation, and that it made no further findings on the merits of such a claim. It found further that damages of R300 000 awarded by the high court were grossly excessive and reduced the award to R20 000.

546

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 20734/14 In the matter between: JOHN BLACK EDWARDS APPELLANT and FIRSTRAND BANK LIMITED T/A WESBANK RESPONDENT Neutral citation: Edwards v FirstRand Bank Limited t/a Wesbank (20734/14) [2016] ZASCA 144 (30 September 2016) Coram: Cachalia, Shongwe, Tshiqi and Seriti JJA and Makgoka AJA Heard: 1 September 2016 Delivered: 30 September 2016 Summary: Credit agreement – National Credit Act 34 of 2005 – whether or not the credit provider complied with s 127(2) and (5) of the Act – court must satisfy itself that the credit provider has placed before it facts which show that the notice, on a balance of probabilities, has been sent to the consumer. ORDER ________________________________________________________________ On appeal from: Gauteng Local Division of the High Court, Johannesburg (Monama J) sitting as court of first instance. 1 The appeal is dismissed with costs. 2 The order of the court a quo in para 25.2 specifying 1 August 2012 is replaced with the following: „13 December 2012‟ JUDGMENT ________________________________________________________________ Shongwe JA (Tshiqi, Seriti JJA and Makgoka AJA concurring) [1] It is well-known that the draughtsmanship of the National Credit Act 34 of 2005 (the NCA or the Act) is far from being a model of elegance. This appeal mainly concerns the interpretation and applicability of s 127 (2) and (5) of the Act. The Gauteng Local Division, Johannesburg (Monama J) ordered the appellant (consumer) to pay the respondent (credit provider) a sum of R668 461.69 plus interest and costs, being damages suffered by the respondent. The appeal is with the leave of the court a quo. [2] The factual background is briefly that on 24 July 2009, the appellant and the respondent concluded an instalment sale agreement as defined in terms of s 8 (4)(c) of the NCA. The appellant purchased a motor vehicle, namely an Aston Martin Vantage Coupe for a contract price of R1 457 958.00. The appellant paid a deposit of R145 000.00 and was due to pay fifty nine monthly instalments of R23 100.00. During April 2011, the appellant fell into arrears, as a result the respondent issued summons against the appellant cancelling the agreement and claimed the return of the vehicle, plus the shortfall as it was entitled to in terms of the credit agreement. [3] The appellant entered an appearance to defend. The respondent immediately filed an application for summary judgment which the appellant unsuccessfully resisted. The court (Farber AJ) granted summary judgment on 12 August 2011 and ordered the appellant to return the vehicle to the respondent. [4] In his plea the appellant raised a multiple number of defences, including, that the granting of the credit to him by the respondent was reckless because he was over indebted at the time the credit was granted. The appellant prayed that the credit agreement be declared a reckless agreement in terms of s 80 (1) read with s 81 (2), (3) and s 83(1) of the NCA. The appellant further denied that the respondent had complied with the provisions of sections 127 and 129 of the Act and denied that the vehicle was sold lawfully. He also averred that the respondent forced him to sign the agreement and that the agreement falls to be rectified by the reduction of the sum of R46 000, which deduction will result in him not being in arrears. The court, as indicated earlier, rejected all the defences raised and found that he had no bona fide defence. The court even remarked that it was strange that he sought „to retain and use the vehicle despite his disavowal of the validity of the instrument which found his entitlement to retain and used it. A result of this kind, can simply not be countenanced‟. [5] It is significant to mention that the appellant unsuccessfully applied for leave to appeal against the summary judgment order. Even his application for leave to appeal to this Court suffered the same fate. The vehicle was eventually repossessed on 6 July 2012. A notice in terms of s 127(2) of the Act was dispatched by ordinary post to the appellant on 13 June 2012, using the address furnished in the credit agreement by the appellant as his domicilium citandi ex executandi being 72 Turoco Road, Fourways 2055. In terms of clause 17(2) of the credit agreement, the appellant agreed that the physical address that he provided was the address he has selected as the address where legal notices must be sent. [6] The respondent amended the summons accordingly in preparation of the second leg of the proceedings, being to recover the shortfall. The vehicle was sold at an auction. This is after the respondent had sent a notice in terms of s 127(5) of the Act. It is important to note that the respondent also attached to the amended summons the previous notices in terms of s 129(1) and s 127(2) of the Act. Ever since the vehicle was repossessed the appellant did absolutely nothing towards following up the attachment until the matter went on trial in March 2014 before Monama J. [7] The court a quo indicated clearly that what was before it was the consideration of the quantum of damages, that is, the shortfall and the question whether there was compliance with the provisions of s 127 of the Act. Monama J also concluded that the only defence to be considered, was whether the respondent had complied with the provisions of s 127(2) and (5) of the Act. His conclusion was: „[18] The critical issue is whether the defendant was given notice of the valuation amount in the letter dated 13 June 2012 as required by section 127(2) as well as the information referred to in section 127(5) by virtue of the letter dated 1 August 2012. [19] It is common cause in this matter that both the section[s] s 127(2) and 127(5) letters highlighted the information dictated by the respective sections. Both letters dealt with all the categories of information required to be disclosed. The letters were addressed to the defendant‟s chosen domicilium and were sent by ordinary mail.‟ [8] Before this Court, the issues had been crystallised to whether or not the respondent complied with s 127(2) and (5) notices of the Act before disposing of the vehicle. The appellant contended that he did not receive the s 127(2) and (5) notices of the Act. And also that the vehicle was not sold for the best price reasonably obtainable as contemplated in s 127(4)(b) of the Act. The appellant relied on ABSA Bank Ltd v De Villiers & another [2009] ZASCA 140; 2010 (2) All SA 99 (SCA); 2009 (5) SA 40 (C) in respect of the s 127 process. The procedure to be followed in respect of the s 127 process is clearly stated in the case quoted above, and I agree with it, but it does not assist the present appellant. In ABSA the initial application was brought in terms of s 130(1) of the Act for a final order authorising the attachment of the subject vehicle without cancelling the credit agreement first, which was found to be incorrect. It is, in my view, distinguishable from the facts of the case before us. [9] On the other hand the respondent contended that, if the appellant did not receive the s 127(2) and (5) notices of the Act, it was a direct result of the appellant providing a physical address at which, knowingly, there was no street delivery of the post. This contention was affirmed by the court a quo when it concluded that „The conduct of the defendant (appellant) in designating an address in which no street delivery occurs, is unreasonable‟. The Constitutional Court in Kubyana v Standard Bank of South Africa Ltd [2014] ZACC 1; 2014 (3) SA 56 (CC) para 46 observed that: „The Act does not imply, and cannot be interpreted to mean, that a consumer may unreasonably ignore the consequences of her election to receive notices by registered mail, when the notifications in question have been sent to the address which she duly nominated. While it is so that consumers should receive the full benefit of the protections afforded by the Act, the noble pursuits of that statute should not be open to abuse by individuals who seek to exercise those protections unreasonably or in bad faith.‟ [10] Section 127(2) of the Act reads as follows: „(2) Within 10 business days after the later of- (a) receiving a notice in terms of subsection (1) (b) (i); or (b) receiving goods tendered in terms of subsection (1) (b) (ii), a credit provider must give the consumer written notice setting out the estimated value of the goods and any other prescribed information.‟ (My emphasis.) Section 127(1) is not applicable in this case because, the appellant did not voluntarily terminate the agreement, but the respondent secured, by the court process, the termination of the agreement, and subsequently the attachment and sale of the vehicle in question. Therefore, the appellant is wrong when submitting that s 127 of the Act expressly provides that the appellant must actually receive the s 127(2) and (5) notices. The argument went further to say that the respondent must prove delivery of the notice and receipt thereof in order to comply with s 127 of the Act. The Constitutional Court in Baliso v Firstrand Bank Limited t/a Wesbank [2016] ZACC 23 Froneman J, writing for the majority judgment referred with approval to what Jafta J said in Kubyana at para 98: „The determination of the facts that would constitute adequate proof of delivery of a notice in a particular case must be left to the court before which the proceedings are launched. It is that court which must be satisfied that section 129 has been followed. Therefore, it is not prudent to lay down a general principle save to state that a credit provider must place before the court facts which show that the notice, on a balance of probabilities, has reached a consumer. This is what Sebola must be understood to state‟. In Sebola & another v Standard Bank of SA Ltd & another [2012] ZACC 11; 2012 (5) SA 142 (CC) s 129 of the Act was an issue and not s 127 of the Act. [11] The majority in Baliso above concluded obiter in my view, that there is much force in the argument that it was illogical to make a distinction between the manner of giving notice under s 127(2) of the Act, and that required under s 129(1) of the Act. Although Froneman J, writing for the majority, was of the view that there is merit in the submission that there exists no good reason to differentiate materially between the method of complying with the s 127(2) notice requirement and that under s 129(1). He went on without deciding whether the distinction between s 129(1) and 127(2) was justified or not. In para 30 of Baliso, he remarked that: „Is this clarification of what is required by way of proof of compliance in relation to the notice requirement under sections 127(2) and 129(1)(a)(i) respectively, sufficient reason to entertain the appeal? I think not‟. My understanding is that the distinction was not relevant to the facts of that case. That is why it was not definitively decided. On the other hand Zondo J, writing for the minority judgment, was of the view that: „[30] The question raised by this matter is whether or not the sending of a section 127(2) notice by a credit provider to a consumer by ordinary mail constitutes compliance with section 127(2).‟ Failure to comply with s 127(2) by the credit provider is detrimental even to the credit provider because the recovery of damages by way of the shortfall cannot be pursued. Therefore the importance of complying with s 127(2) is beneficial to both the consumer and the credit provider. It is settled law that the ordinary grammatical meaning of the words used in s 127(2) of the Act must be interpreted to mean just that. A registered mail is not what the legislature had in mind when it used the words „give the consumer written notice.‟ It may be advisable to send the notice in terms of s 127(2) by registered mail but that is not what the law requires. [12] Counsel for the respondent was at pains to explain why s 128(1) of the Act was not invoked by the appellant, as it was open to him to do so. He conceded that no evidence indicates why this section was not invoked. It is significant to note that the appellant did not quarrel with the evidence provided by the respondent during the trial. This concession also takes care of the evidence of quantum save for the storage costs which were cured by the amendment, effected by the respondent towards the close of its case during the trial. [13] I now turn to deal with the provisions of s 127(5) of the Act in particular. It provides that: „After selling any goods in terms of this section, a credit provider must- (a) credit or debit the consumer with a payment or charge equivalent to the proceeds of the sale less any expenses reasonably incurred by the credit provider in connection with the sale of the goods; and (b) give the consumer a written notice stating the following: (i) The settlement value of the agreement immediately before the sale; (ii) the gross amount realised on the sale; (iii) the net proceeds of the sale after deducting the credit provider's permitted default charges, if applicable, and reasonable costs allowed under paragraph (a); and (iv) the amount credited or debited to the consumer's account. From the evidence adduced during the trial, it is clear that the respondent did send a notice in terms of s 127(5) of the Act to the address furnished by the appellant. The appellant does not dispute that the notice was sent, but denies that he received it. We know why he did not receive it, his failure to receive it must be squarely placed on the appellant‟s shoulder. Counsel for the appellant conceded that in terms of s 129(4) of the Act a consumer may not re-instate a credit agreement after the sale of the vehicle pursuant to an attachment. As in this case s 127(3) of the Act is not applicable because the appellant was clearly in default. [14] I turn to deal with the deliberations during the hearing of this matter. A question was raised mero motu by this Court whether s 127 of the Act applies at all in the circumstances of this matter. In other words where the merx forming the subject of a credit agreement is repossessed by order of the court. The question presupposes that after the attachment of the merx and the subsequent sale thereof, the provisions of s 127(2) to (9) of the Act are not applicable. The matter changes from being governed by s 127(2) to (9) of the Act and transforms to become a common law guided damages claim, so the proposition went [15] Counsel for the appellant contended that the provisions of s 127(2) to (9) are always applicable whether there was a voluntary surrender of the goods or a forced repossession. He went further to suggest that the answer lies in s 131 which reads thus: „Repossession of goods If a court makes an attachment order with respect to property that is the subject of a credit agreement, section 127 (2) to (9) and section 128, read with the changes required by the context, apply with respect to any goods attached in terms of that order‟. Although this question has not yet come before this Court for adjudication, Fourie J in ABSA (see para 8 above) seems to agree that s 127(2) to (9) is applicable even after a forced repossession of the merx. In para 29 of ABSA he deals with the interpretation of s 131 of the Act, although in a different set of facts from this case. He observed that s 131 imposes restrictions being that s 127(2) to (9) should be „read with the changes required by the context‟. He goes further to set out in detail the procedure to be followed regarding the execution and realisation of goods attached by virtue of a court order in terms of s 131 of the Act. Counsel for the respondent on the other hand seemed to agree that s 127 of the Act is not applicable at all after an attachment and sale of the goods. He suggested further that s 127(2) read with ss (3) of the Act fortifies his belief that s 127 of the Act does not apply where an attachment and sale have taken place. He acknowledged that if one is in default one cannot re-instate the credit agreement, alternatively that re-instatement would be impermissible. [16] Whilst generally I am inclined to agree with the proposition that s 127(2) to (9) of the Act is applicable, I, however, consider that it is not applicable in the present case because the agreement had already been cancelled. Section 131 of the Act squarely answers the question whether s 127(2) is applicable at all in the positive. The purposes of the NCA are set out in s 3 of the Act and inter alia, to promote and advance the socio-economic welfare of South Africans, to protect the consumer‟s rights most of all to harmonise the system of debt enforcement. [17] Considering the above discussions and reasons, I am satisfied that the respondent succeeded to show that the notices in terms of s 127(2) and (5) of the Act were duly given and/or sent to the appellant. The appellant has himself to blame by providing an address, which he knew, that no street deliveries could take place in the area. The appellant is a quantity surveyor. He is not the ordinary man in the street. He knew and/or should have known what service of legal notices meant. [18] In the result the following order is made: 1 The appeal is dismissed with costs. 2 The order of the court a quo in para 25.2 specifying 1 August 2012 is replaced with the following: „13 December 2012‟ _____________________ J B Z Shongwe Judge of Appeal Cachalia JA (Tshiqi JA concurring) [19] I have read the judgment by Shongwe JA and agree with the order he proposes. But I think the disputed issues require fuller treatment. And I propose to do so. [20] This appeal, with leave of the court a quo (Monama J), concerns a festering dispute between a recalcitrant debtor and a finance house regarding the enforcement of an instalment credit agreement concluded in 2009. The dispute goes back to November 2010 when the debtor first fell into arrears with his payments. The finance house is Firstrand Bank Limited t/a as Wesbank, which was the plaintiff in the court a quo. The debtor is Mr John Black Edwards, who is a quantity surveyor, and was the defendant. [21] Mr Edwards bought a 2007 model of an Aston Martin Vantage Coupe sports car from Wesbank for the princely sum of approximately R2 million, which included interest charges amounting to R548 101. The cash price of the car was R1 457 958. The monthly instalment payment was about R23 088, payable over 59 months with a final instalment of R500 000. [22] A car magazine describes driving this car as the best way to live out one‟s spy-fantasy. But Mr Edwards, it seems, is not a man with deep pockets, and soon found himself in difficulty meeting the monthly payments. On 11 June 2014, following a trial, the court a quo ordered him to pay Wesbank an amount of R668 461.69 plus interest, which he owed as at 1 August 2012. (The parties agreed that in the event of Wesbank succeeding in the appeal, the correct date from which interest had to run was 13 December 2012.) [23] In this court Mr Edwards abandoned his contention that Wesbank had not established the amount he owed. Instead he sought to take refuge in the procedural protections afforded to debtors by the National Credit Act 34 of 2005 (The Act). His complaint in this appeal is that Wesbank did not comply with ss 127(2) and 127(5) of the Act because it did not despatch the relevant notices to him by registered mail. As a consequence, he did not receive them, and Wesbank‟s failure in this regard, he contends, nullifies the order of the court a quo. [24] Before I consider whether there is merit in the complaint some background is necessary. Mr Edwards first fell into arrears with his monthly payments in November 2010. A notice in terms of s 129 was sent to him by registered mail on 19 November in which Wesbank proposed, amongst other things, that Mr Edwards referred the agreement to a debt counsellor. He did not respond to the letter and was thus in default as envisaged in s 130(1) of the Act. Wesbank elected to cancel the agreement and on 11 April 2011 instituted debt enforcement proceedings against him in the South Gauteng High Court, Johannesburg (the high court). At that stage he was in arrears to the tune of R167 231 and the balance owing was R1 567 668. Mr Edwards entered an appearance to defend the matter on 16 May 2011. On 26 May 2011 Wesbank applied for summary judgment. [25] Mr Edwards advanced several defences to resist the application: first, that he was improperly induced or compelled to enter into the agreement; second, that the agreement was unenforceable in as much as it was „reckless‟ within the meaning of s 80; third, that the agreement fell to be set aside because he was „over-indebted‟ as envisaged in s 86 and that he was not in arrears with his instalment payments. In a carefully considered judgment, the high court (Farber AJ) rejected each of these defences. On 12 August 2011, summary judgment was granted against Mr Edwards, and he was ordered to return the car. However, on the very same day he delivered an application for leave to appeal against the order. [26] The application was heard on 3 February 2012. On this occasion Mr Edwards advanced two further grounds of appeal, which was that the agreement had not been lawfully cancelled, and that the s 129 notice was defective because it did not clearly indicate Wesbank‟s intention to cancel the agreement in the event of his not remedying the breach. He also contended that the summons was not properly served on him because it had been delivered to his attorney, and not to him personally. On 29 February 2012 the court gave judgment in which these further defences were also dismissed. [27] Still not satisfied, Mr Edwards applied for leave to appeal to this court. His application suffered the same fate on 1 June 2012. On 6 June 2012 the car was restored to Wesbank in accordance with the summary judgment order of 12 August 2011. During this period of ten months Mr Edwards had the use of the car and took no steps to reduce his indebtedness to Wesbank. [28] A week later, on 13 June 2012, Wesbank despatched a letter purportedly in terms of s 127(2), by ordinary mail to his address at 72 Turoco Road, Fourways. The letter said that the car had been valued at R500 000, excluding VAT. And, repeating the language of s 127(3) of the Act, that if he wished to reinstate the agreement and resume possession of the car he may do so on condition that he settled all arrear payments and further costs for which he was liable. Mr Edwards says that he did not receive this letter. [29] On 26 July 2012 the car was sold at an auction conducted by a third party for R763 800, inclusive of VAT. The deficit at that stage was R780 499. On 1 August 2012, Wesbank sent another letter, in terms of s 127(5), also by ordinary mail, to Mr Edwards. This letter indicated that the settlement value, after expenses, was R780 449, which if not paid within ten days would result in further enforcement proceedings against him. This letter too, Mr Edwards says, he did not receive. [30] On 13 December 2012, Wesbank filed a notice amending its particulars of claim to reflect the adjusted amount now owed. Importantly, it annexed both the ss 127(2) and 127(5) notices to it. On 26 February 2013, Mr Edwards delivered his plea and counterclaim. He once again pleaded his earlier defences relating to over-indebtedness and reckless credit, and also that s 129 had not been complied with. In addition he pleaded that, assuming s 127 applied, it was not complied with either. For present purposes it is not necessary to discuss the content of the counterclaim as it was not persisted with at the trial. [31] The trial began on 14 March 2012. At the outset the court was asked to rule on whether or not Mr Edwards could persist with the defences pertaining to over-indebtedness, reckless credit and compliance with s 129 that had been dismissed in the summary judgment proceedings. The court held that these issues had been finally determined and could not be re-opened. In other words it upheld Wesbank‟s contention that these issues were res judicata. Mr Edwards does not appeal this ruling for good reason. What remained was the dispute pertaining to compliance with the s 127 notices, the extent of Mr Edward‟s indebtedness to Wesbank, and whether or not the car was sold at the best price reasonably obtainable in terms of s 127(4)(b). [32] During the trial Wesbank applied for and was granted an amendment to its summons to reflect a reduction in the amount Mr Edwards owed from R780 449 to R668 461. The trial lasted several days. In regard to the evidence regarding the delivery of the notices Wesbank adduced the evidence of three witnesses, who proved that the letters were sent to the address that Mr Edwards had given Wesbank for the delivery of legal notices in the agreement. [33] Regarding the dispute over the amount that Mr Edwards owed, two witnesses were called: Mr Frank van Staden‟s evidence demonstrated conclusively how the final amounts has been calculated. Mr Roelof Johannes Strydom‟s evidence that the best price for the car was obtained at the public auction was compelling, stemming from his 21 years‟ experience in this area. Mr Edwards, through his legal representative, was not able to discredit their evidence despite having subjected them to lengthy cross-examination. Mr Edward‟s own evidence was less than satisfactory. He testified that he had not received the notices in terms of s 127 because there is no street delivery at his home address and in his area. In regard to the price obtained for the car at the auction, he persisted with his claim that he could have received a better price had he been given the opportunity to do so. The learned judge found him to be a „poor witness and highly arrogant,‟ and rejected his evidence. [34] Although the appeal was directed at all the court a quo‟s findings, the issue pertaining to the amount that was owed as at 13 December 2012, ie R668 461, was abandoned in argument before us, as was his contention that Wesbank had not obtained the best price for the car at the auction. There was, in my view, no merit in either of these contentions. [35] What remained is the dispute regarding compliance with the s 127 notices. Mr Edwards contends that Wesbank‟s failure to despatch these notices by registered mail means that they did not comply with the Act. Mr Edwards contends that he did not receive the notice in terms of s 127(2) before the car was sold. Neither did he receive the s 127(5) notice after the sale of the vehicle. Before I deal with whether or not there was sufficient proof that the notices were delivered to Mr Edwards it is necessary to consider whether, and to what extent, these provisions apply at all in the circumstances of this case, an issue the court debated fully with counsel for both parties during the hearing. The relevant provisions [36] I turn to consider the relevant provisions at the time of these proceedings. „127 Surrender of goods . . . (2) Within 10 business days after the later of- . . . (b) receiving goods tendered in terms of subsection (1) (b) (ii), a credit provider must give the consumer written notice setting out the estimated value of the goods and any other prescribed information. (3) Within 10 business days after receiving a notice under subsection (2), the consumer may unconditionally withdraw the notice to terminate the agreement in terms of subsection (1)(a), and resume possession of any goods that are in the credit provider's possession, unless the consumer is in default under the credit agreement. (4) If the consumer- (a) responds to a notice as contemplated in subsection (3), the credit provider must return the goods to the consumer unless the consumer is in default under the credit agreement; or (b) does not respond to a notice as contemplated in subsection (3), the credit provider must sell the goods as soon as practicable for the best price reasonably obtainable. (5) After selling any goods in terms of this section, a credit provider must- (a) credit or debit the consumer with a payment or charge equivalent to the proceeds of the sale less any expenses reasonably incurred by the credit provider in connection with the sale of the goods; and (b) give the consumer a written notice stating the following: (i) The settlement value of the agreement immediately before the sale; (ii) the gross amount realised on the sale; (iii) the net proceeds of the sale after deducting the credit provider's permitted default charges, if applicable, and reasonable costs allowed under paragraph (a); and (iv) the amount credited or debited to the consumer's account. . . . 128 Compensation for consumer (1) A consumer who has unsuccessfully attempted to resolve a disputed sale of goods in terms of section 127 directly with the credit provider, or through alternative dispute resolution under Part A of Chapter 7, may apply to the Tribunal to review the sale. (2) If the Tribunal considering an application in terms of this section is not satisfied that the credit provider sold the goods as soon as reasonably practicable, or for the best price reasonably obtainable, the Tribunal may order the credit provider to credit and pay to the consumer an additional amount exceeding the net proceeds of sale. (3) A decision by the Tribunal in terms of this section is subject to appeal to, or review by, the High Court to the extent permitted by section 148. . . . 129 Required procedures before debt enforcement . . . (3) Subject to subsection (4), a consumer may- (a) at any time before the credit provider has cancelled the agreement re-instate a credit agreement that is in default by paying to the credit provider all amounts that are overdue, together with the credit provider‟s permitted default charges and reasonable costs of enforcing the agreement up to the time of re-instatement; and- (b) after complying with paragraph (a), may resume possession of any property that had been repossessed by the credit provider pursuant to an attachment order. (4) A credit provider may not re-instate or revive a credit agreement after- (a) the sale of any property pursuant to- (i) an attachment order; or (ii) surrender of property in terms of section 127; (b) the execution of any other court order enforcing that agreement; or (c) the termination thereof in accordance with section 123. . . . 131 Repossession of goods If a court makes an attachment order with respect to property that is the subject of a credit agreement, section 127 (2) to (9) and section 128, read with the changes required by the context, apply with respect to any goods attached in terms of that order.‟ [37] Section 127 deals with a situation where the consumer wishes to terminate a credit agreement, gives notice to the credit provider thereof and surrenders the goods to the credit provider. Section 127(2)(b) then says that the credit provider must give the consumer written notice of the value of the goods so that the consumer may consider, under s127(3), whether or not to withdraw the notice of intended termination and resume possession of the goods. But this does not apply if the consumer is in default under the agreement. If the consumer does not respond to the notice within the requisite time the credit provider must sell the goods for the best price reasonably obtainable as soon as possible. [38] Once the credit provider has taken possession of the goods following the termination of the agreement, it may sell the goods. Section 127(5)(a) says that after selling the goods the credit provider must credit or debit the consumer with a payment or charge equivalent to the proceeds of the sale and deduct its expenses in connection with the sale of the goods. Thereafter, the credit provider must, in terms of s 127(5)(b), give written notice to the consumer of the relevant details regarding the determination of the settlement figure. [39] Section 128 is also relevant. It says that where a consumer has unsuccessfully attempted to resolve a disputed sale of goods in terms of s 127 with the credit provider it may apply to the Tribunal to review the sale. A dispute relating to whether the goods were sold for the best price reasonably obtainable, as in this case, would probably be covered by this provision. [40] These provisions deal with a situation where the consumer has surrendered goods to the credit provider voluntarily. Where, however, there has been an attachment of goods following upon a court order, as happened in this case, s 131 requires the application of s 127(2) to (9) and 128, but importantly they are to be read with the changes that the context requires. [41] The first thing to be observed is that s 129(3), as it read at the time of these proceedings, permitted a consumer, before the credit provider has cancelled the agreement to reinstate it by paying the overdue amount and resume possession of the property. In its judgment refusing leave to appeal against the summary judgment ruling the court held that Wesbank had cancelled the agreement. This means that Mr Edwards was not entitled to reinstate the agreement and resume possession of the car, which is what the s 127(2) notice sent to him on 12 June 2012 invited him to consider doing. Mr Edwards was of course also in default under the agreement before the cancellation, which meant that he could not take repossession of the goods after having received the estimated value of the goods in terms of s 127(3) and s 127(4) either. Counsel for Mr Edwards was constrained to concede this during the hearing. Counsel for Wesbank argued that the section does not apply in these circumstances, precisely because Mr Edwards was not entitled to reinstate the agreement and resume possession of the goods. [42] However, counsel for Mr Edwards maintained that s 127(2)(b) nevertheless applies in the present circumstances. He argued that before the attached car was sold, Mr Edwards should still have been given notice so that he had the opportunity to consider whether or not he wished to object to the estimated valuation of the car. The contention does not withstand scrutiny. [43] Section 127(4) imposes an obligation on the credit provider to sell the goods at the best price reasonably obtainable if the consumer has not responded to the s 127(2) notice. The credit provider‟s estimated value of the goods plays no part in determining whether or not the best price was obtained, as is evident from this matter, where the estimated value of the car in the s 127(2) notice was R500 000, but it was sold for considerably more, ie R763 800. The clear purpose of a s 127(2) notice, as I have mentioned, is to place the consumer in a position to consider whether to withdraw the termination notice and resume possession of the goods,1 which is what the s 127(2) notice invited Mr Edwards to do. But this option was simply not available to Mr Edwards once the agreement had been cancelled and the court had ordered the attachment of the car. So, in this case, no purpose was served by sending the notice to him. Section 127(2) simply did not apply. [44] However, even if Mr Edwards was entitled to receive the s 127(2) notice, his contention that he did not receive it has no merit. Once it was proved that the notice was sent to Mr Edwards, he had to explain why it was not reasonable to have expected the notice to reach his attention. This is because he bore the burden of rebutting the inference of delivery, and to show that his conduct was reasonable. If he did not receive the notice because of his own unreasonable conduct it would not matter whether or not he actually received delivery. He would not have rebutted the inference of delivery.2 His insistence on the notice having to be sent by registered mail is to resort to form over substance. The question, surely, is whether or not he had actually received the notice or rebutted the inference that he had, not whether it was sent to him by registered mail. [45] In clause 17 of the agreement between the parties, Mr Edwards „agreed‟ that the domicilium address to which all „legal notices‟ were to be sent was 72 Turoco Road, Fourways, which is the address to which the s 127(2) notice was sent. He also accepted that he would be „deemed to have received a notice or 1 Baliso v Firstrand Bank Limited t/a Wesbank [2016] ZACC 23 para 27. 2 Ibid para 16. letter five (5) business days after we have posted it to‟ him. This means that he accepted that he would be regarded or considered to have received the notice, whether or not he had in fact received it. [46] Mr Edwards provided the street address to which he had elected to receive these notices. He denied having received the notice and proffered the explanation that there was no street delivery at his address. When confronted in cross-examination with the question why he had provided an address where he knew there was no street delivery he said that he did not read „all the fine print‟. Later on, he lamented the fact that he did not understand „legal writing‟. When asked why he did not ask the person assisting him to explain the terms of the agreement he said the documents were all prepared by the sales representative in an „incredible hurry‟ and that he did not ask the person more than „one or two things‟. The court a quo was justified in describing him as a „poor witness‟. [47] Human experience has shown that contracting parties often attempt to evade their contractual obligations by denying that they were aware or assented to the terms of an agreement. This is why our courts adopted the caveat subscriptor rule years ago. This entails that a person who claims not to have read or appreciated the terms to which he has bound himself cannot generally escape the consequences of not having read the document before signing it. In other words, he has assented to what appears in the document above his signature. [48] Mr Edwards, who is 65 years of age, and hardly a man without experience or education, cannot escape the consequences of having selected an address where he was aware that there was no street delivery. He bore the risk that the notice would not be delivered to his chosen address. His conduct in choosing this address for the mode of delivery despite his knowledge that he would not receive the mail was unreasonable. It matters not whether the notice was sent by ordinary or registered mail. He would still not have received it. He is thus „deemed‟ to have received the s 127(2) notice. [49] The dictum of the Constitutional Court in Kubyana v Standard Bank of South Africa Ltd3 is apposite here, even though issue there was the delivery of a s 129 notice: „The Act does not imply, and cannot be interpreted to mean, that a consumer may unreasonably ignore the consequences of her election to receive notices by registered mail, when the notifications in question have been sent to the address which she duly nominated. While it is so that consumers should enjoy the full benefit of the protections afforded by the Act, the noble pursuits of a statute should not be open to abuse by individuals who seek to exercise those protections unreasonably or in bad faith‟ [50] I turn to consider the s 127(5) notice. Its purpose, when read with s 131, is to place the consumer, whose goods have been attached, in a position to dispute whether or not the credit provider has accounted properly in respect of the matters covered in s 127(5)(b)(i)-(iv). If there is a dispute regarding the sale, which presumably also covers the question whether the goods were sold for the best price reasonably obtainable in accordance with s 127(4)(b), and the consumer has not been able to resolve it, he or she may use the procedure envisaged in s 128 by applying to the Tribunal to review the sale. 3 Kubyana v Standard Bank of South Africa Ltd [2014] ZACC 1; 2014 (3) SA 56 (CC) para 46. [51] In this case the s 127(5) notice was sent to Mr Edwards on 1 August 2012, a few days after the sale. He says he did not receive it. For the same reasons given in respect of the s 127(2) notice, this defence must fail. [52] In this instance the defence is even less credible. Even if he did not receive the notice through the post, it was annexed to the amended particulars of claim on 13 December 2012, three months before the trial commenced, which he did receive. (The s 127(2) notice was also annexed to the amended particulars, but this was after the sale and is therefore immaterial.) [53] It is important in this regard to emphasise what the Constitutional Court recently said the purpose of compliance with the notices such as s 127 is: „Compliance is a prerequisite for “determining the matter”. When is a matter “determined” in proceedings under the Act? That depends on whether the matter is opposed and default judgment is sought, or whether it is opposed and judgment is to follow upon hearing evidence at the trial.‟4 [54] In the three months before the trial commenced Mr Edwards could have disputed the sale price and any other matter covered by s 127(5), and used the procedure available to him in s 128. If necessary he could have sought a postponement of the trial for this purpose. He did not do so, but elected to go to trial and contest the merits of the dispute, including the disputed sale price. After considering all the evidence, the high court ruled against him. This is not a case where the question regarding compliance with the s 127 notices is being 4 Baliso v Firstrand Bank Limited t/a Wesbank [2016] ZACC 23 para 11. raised in connection with default judgment proceedings, where different considerations apply to the procedural protections of consumers. [55] Mr Edwards has, no doubt acting on proper legal advice, abandoned any challenge regarding the merits, ie the amount that he now owes and whether the best price was obtained. Before us all that remained was an attempt to use the alleged non-delivery of the notices as a procedural shield to avoid meeting his contractual obligations, as he had done when he raised a dispute regarding the s 129 notice and his other unmeritorious defences during the summary judgment proceedings. [56] Even if there was substance in the complaint that he had not received the s 127(5) notice before the proceedings had commenced, its purpose was to place Mr Edwards in the position to contest, before the trial started, Wesbank‟s calculations regarding the amount that he owed and the price obtained through the sale of the car. These issues were fully canvassed at the trial. In fact, as I have mentioned, during the trial Wesbank amended its pleadings by reducing the amount owed from R780 449 to R668 461. Upholding his complaint that the notice was not properly delivered to him would only allow him to abuse the protection of the Act afforded to consumers and to escape his contractual obligations. It would truly be an abject case of placing form over substance. The courts cannot countenance such conduct, and this defence must, as I have held with the s 127(2) notice, also fail. [57] To conclude, I would hold that Wesbank had no obligation to deliver a s 127(2) notice to Mr Edwards after the agreement had been cancelled and the goods attached following the court order. And even if there was an obligation to do so Wesbank complied with the provisions of the Act by sending it to Mr Edward‟s chosen address, as it did with the s 127(5) notice. In addition the s 127(5) notice was also delivered to Mr Edward‟s attorney together with the amended pleading after the sale. [58] For these reasons I agree with the order proposed by Shongwe JA. _______________ A Cachalia Judge of Appeal Appearances For the Appellant: A A Bester Instructed by: Mathew Kerr-Phillips, Johannesburg; Claude Reid Incorporated, Bloemfontein. For the Respondent: F J Becker SC Instructed by: Smit, Jones & Pratt, Johannesburg; Symington & De Kok, Bloemfontein.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 September 2016 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * JOHN BLACK EDWARDS V FIRSTRAND BANK LIMITED T/A WESBANK The SCA today dismissed with costs an appeal by Mr John Edwards against FirstRand Bank Limited t/a Wesbank. Mr Edwards had purchased an Aston Martin Vantage Coupe sport car from Wesbank for approximately R2 million. He fell into arrears with his monthly payments. Wesbank issued summons against him claiming cancellation of the agreement and payment of the sum of R668 461.69 plus interest. Following a trial, the court a quo ordered the cancellation of the agreement and payment of the said amount. Aggrieved by this decision Mr Edwards appealed to this court. His defences, inter alia, were that the credit agreement was an over indebtedness and therefore must be declared a reckless lending agreement and also denied that Wesbank had complied with the provisions of section 127 of the National Credit Act 34 of 2005 (the Act). The issue for adjudication before this court was whether or not Wesbank had complied with the provision of section 127(2) and (5) of the Act. The other defences had been rejected by the court a quo and were not pursued in this court. It is undisputed that he was in default. This court decided that section 127(2), though generally applicable, was not available in this particular case because the credit agreement had already been cancelled. This court concluded that Wesbank had complied with section 127(5) by giving Mr Edwards notice in terms of this section by ordinary post and not registered post as was averred by Mr Edwards. Mr Edwards had given Wesbank a street address, which he knew there was no street post- delivery. The notices sent obviously, did not reach him because of his negligence in supplying an address which he knew there was no street delivery of post. For the above reasons, his appeal was accordingly dismissed with costs.

4089

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 596/2021 In the matter between: THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE APPELLANT and ABSA BANK LIMITED FIRST RESPONDENT UNITED TOWERS PROPRIETARY LIMITED SECOND RESPONDENT Neutral citation: The Commissioner for the South African Revenue Service v Absa Bank Limited and Another (596/2021) [2023] ZASCA 125 (29 September 2023) Coram: DAMBUZA AP, SCHIPPERS, MATOJANE and GOOSEN JJA and MALI AJA Heard: 8 March 2023 Delivered: 29 September 2023 Summary: Tax law – General Anti-Avoidance Provisions – legality review of refusal to withdraw a notice issued in terms of s 80J of Income Tax Act - s 9 of Tax Administration Act –– subsequent assessments made in terms of s 80B of Income Tax Act – review of failure to withdraw s 80J notices academic – review of assessments not wholly question of law – high court lacking jurisdiction to adjudicate review. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Sutherland ADJP, sitting as court of first instance) reported sub nom Absa Bank Limited and Another v Commissioner for the South African Revenue Service [2021] ZAGPPHC 127; 2021 (3) SA 513 (GP): The appeal is upheld with costs, including the costs of two counsel. The orders of the high court are set aside and substituted with the following order: ‘The application is dismissed with costs, including the costs of two counsel.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ Goosen JA (Dambuza AP, Schippers and Matojane JJA and Mali AJA concurring): [1] This appeal concerns the exercise of the High Court's review jurisdiction in the context of a tax assessment raised in terms of s 80B of the Income Tax Act 58 of 1962 (the ITA). The Gauteng Division of the High Court, Pretoria (the high court), set aside a decision by the Commissioner of the South African Revenue Service (SARS), refusing to withdraw notices issued in terms of s 80J of the ITA to the respondents, Absa Bank Limited (Absa) and its wholly owned subsidiary, United Towers Proprietary Limited (United Towers), respectively. It also set aside subsequent notices of assessment, issued in terms of s 80B of the ITA. Leave to appeal was granted by the high court. The facts [2] It is common ground that Absa and United Towers entered into an investment arrangement which involved a series of interlinked transactions, the details of which are as follows. Absa and United Towers subscribed for preference shares in PSIC Finance 3 (Pty) Ltd (PSIC3). Their investment was secured by other entities in the ‘group’. PSIC3 used the proceeds of the share issue to subscribe for preference shares in PSIC Finance 4 (Pty) Ltd (PSIC4). In turn PSIC4 made a capital contribution to Delta 1 Finance Trust (D1 Trust). D1 Trust applied the capital contribution to make interest-bearing loans to Macquarie Securities South Africa Ltd (Macquarie). The D1 Trust invested the interest earned on the Macquarie loans in Brazilian Government Bonds, which in terms of the Double Taxation Agreement between South Africa and Brazil, provided a tax-free income stream to the D1 Trust. D1 Trust distributed the income stream to PSIC4. The latter paid this to PSIC3 as dividends, and PSIC3 in turn paid dividends to Absa and United Towers. [3] SARS initiated an investigation of the Macquarie Group investment scheme during 2016. Pursuant to this investigation, it sought and obtained information from Absa and United Towers. In May 2018, SARS issued notices to Absa and United Towers in terms of s 42 of the Tax Administration Act 28 of 2011 (the TAA), signifying an audit of their tax affairs for the 2015, 2016 and 2017 years of assessment. These notices stated that the audit would relate to the tax treatment of the dividends received by Absa and United Towers from PSIC3. The audit notices included a request for further information in terms of s 46 of the TAA. Absa and United Towers responded to these notices on 18 June 2018. [4] On 30 November 2018, SARS issued notices to Absa and United Towers in terms of s 80J of the ITA. The notices were, essentially, in identical terms. They indicated that SARS had completed its preliminary audit of the arrangement entered with entities in the Macquarie ‘group’. The notices set out an intention to raise assessments in terms of the General Anti-Avoidance Rule (GAAR) provisions of the ITA.1 Absa and United Towers were afforded a period of 60 days to respond to the preliminary audit findings. [5] The response period was extended, at the request of Absa and United Towers, to 28 February 2019. On 15 February 2019, Absa and United Towers submitted a request to SARS, in terms of section 9(1) of the TAA, to withdraw the s 80J notices. Absa and United Towers also requested a further extension of the period within which to respond to the notices, pending SARS's consideration of its request for withdrawal of those notices. SARS duly extended the period to 31 March 2019. On 5 March 2019, SARS informed Absa and United Towers that it was not withdrawing the s 80J notices. It stated that any objections they had to the notices should be raised in submissions made in their responses to those notices, as required by s 80J. Proceedings before the high court [6] On 29 March 2019, Absa and United Towers launched an application in the high court seeking an order reviewing the decision not to withdraw the s 80 J notices and directing that the decision be substituted with one withdrawing the notices, alternatively that the request for withdrawal be remitted to SARS (the s 9 review). They simultaneously submitted their responses to the s 80J notices to SARS in terms of s 80J (2) of the ITA. The s 9 review proceedings continued while SARS was considering the responses to the s 80J notices. 1 These are s 80A to L of the ITA aimed at preventing abuse of certain sections of the Act through abnormal arrangements, schemes, or agreements concluded with the main aim of obtaining tax benefits, including the avoidance, postponement, or reduction of liability for tax. [7] On 17 October 2019, SARS issued Letters of Assessment and Additional Assessments to Absa and United Towers for the 2014, 2015, 2016 and 2017 tax years. It determined that they had participated in an avoidance arrangement and assessed their tax liability on the basis that their investment returns in the scheme constituted taxable income. After these additional assessments were raised by SARS, Absa and United Towers applied for leave to amend the notice of motion in the s 9 review, to extend its reach to include the review and setting aside of the assessments (the assessment review). The application was opposed. Leave was granted, however, and the application was broadened to include the assessment review. [8] The application was heard by the high court, which granted orders setting aside the decisions not to withdraw the s 80J notices; withdrawing the notices; and setting aside the additional assessments. The high court concluded that the decisions refusing to withdraw the s 80J notices were subject to review based on the principle of legality notwithstanding that they were not final. It held, in relation to the assessment review, that a taxpayer is not obliged only to pursue the remedies for disputing tax liability as provided by s 104 of the TAA. The taxpayer may apply directly to court for relief in exceptional circumstances. Exceptional circumstances would include a dispute that turned wholly upon a point of law. The high court found that the s 80J notices were premised upon an acceptance that Absa and United Towers were ignorant of the terms of the arrangement or scheme. Upon that premise they could not be parties to the avoidance arrangement. It held further, that since the notices of assessment were issued upon the factual premise of the s 80J notices, the assessments were tainted by an error of law. The high court concluded that the s 80J notices and the assessments were inextricably linked and, accordingly, set aside both sets of decisions. The issues on appeal [9] The appeal concerns two distinct review applications in a composite notice of motion. The first relates to the refusal or failure to withdraw the s 80J notices upon a request made in terms of s 9 of the TAA. It was founded upon the contention that SARS was wrong in its view that the objections to the s 80J notices raised by Absa and United Towers, should be addressed in their responses to the notices. It was also contended that the principle of legality was breached since the issuing of the notices was based upon an error of law. The error was that Absa and United Towers were parties to an avoidance arrangement even though they had no knowledge of the arrangement and had derived a tax benefit from it, to which they would otherwise not have been entitled. [10] The second review concerned the additional tax assessments raised by SARS. This review engaged the exercise of the high court’s review jurisdiction to set aside the assessments either under the Promotion of Administrative Justice Act, Act 3 of 2000 (PAJA) or the principle of legality. It was founded upon the same grounds as the attack on the s 80J notices. [11] The following issues arise in relation to these two reviews: (a) Is a ‘decision’ not to withdraw a s 80J notice reviewable in terms of s 9 of the TAA, either prior to or after the issuing of a notice of assessment in terms of s 80B of the ITA? (b) Was the high court correct to characterize the challenge to the assessments as wholly a question of law which entitled it to exercise its jurisdiction in terms of s 105 of the TAA? (c) Was the high court correct in its determination of the dispute? The GAAR provisions [12] Tax avoidance, whether in part or in whole, is not per se unlawful or impermissible.2 Sections 80A to 80L of the ITA deal with arrangements entered by a taxpayer which have the effect of conferring a tax benefit through the avoidance of a tax liability that would otherwise accrue. These anti-avoidance provisions confer upon SARS the authority to investigate the transactions and to raise additional or compensatory assessments to counteract the consequences of such avoidance schemes or arrangements. In terms of s 80A, an ‘avoidance arrangement’ is defined as an impermissible avoidance arrangement if its sole or main purpose was to obtain a tax benefit and, ‘. . . (a) in the context of business- (i) it was entered into or carried out by means of or in a manner which would not normally be employed for bona fide business purposes, other than obtaining a tax benefit; or (ii) it lacks commercial substance, in whole or in part … (b) … (c) in any context – (i) it has created rights or obligations that would not normally be created between persons dealing at arm’s length; or (ii) it would result directly or indirectly in the misuse or abuse of the provisions of this Act.’ [13] Section 80B allows the Commissioner to determine the tax consequences of any impermissible avoidance arrangement. This is done by making 2 Commissioner for Inland Revenue v Conhage (Pty) Ltd (formerly Tycon (Pty) Ltd) 1999 (4) SA 1149 (SCA) (CIR v Conhage) para 1, where Hefer JA said, ‘Within the bounds of any anti-avoidance provisions in the relevant legislation, a taxpayer may minimise his tax liability by arranging his affairs in a suitable manner. If, for example, the same commercial result can be achieved in different ways, he may enter into the type of transaction which does not attract tax or attracts less tax. But, when it comes to considering whether by doing so, he has succeeded in avoiding or reducing the tax, the Court will give effect to the true nature and substance of the transaction and will not be deceived by its form.’ compensating adjustments to assessments to ensure consistent treatment of all parties to the arrangement. Section 80L defines important terms. An ‘arrangement’ includes any ‘transaction, operation, scheme, agreement or understanding, including all steps therein or parts thereof.’ An ‘avoidance arrangement’ is one that results in a tax benefit. A ‘party’ is any person, entity, partnership, or joint venture who ‘participates in or takes part in an arrangement.’ [14] Section 80G(1) provides that an avoidance arrangement is presumed to have been entered into or carried out for the sole or main purpose of obtaining a tax benefit. A party obtaining a tax benefit is required to prove that, in the light of the relevant facts and circumstances, obtaining a tax benefit was not the sole or main purpose of the avoidance arrangement. Subsection (2) provides that the purpose of a step in or part of an avoidance arrangement may be different from a purpose attributable to the arrangement as a whole. In terms of s 80H, the Commissioner may apply the GAAR provisions to steps in or parts of an arrangement. [15] Section 80J regulates the procedure to be followed prior to the determination made in terms of section 80B. It provides, in peremptory terms that: ‘ (1) The Commissioner must, prior to determining any liability of a party for tax under section 80B, give the party notice that he or she believes that the provisions of this Part may apply in respect of an arrangement and must set out in the notice his or her reasons therefor. (2) A party who receives notice in terms of subsection (1) may, within 60 days after the date of that notice or such longer period as the Commissioner may allow, submit reasons to the Commissioner why the provisions of this Part should not be applied. (3) The Commissioner must within 180 days of receipt of the reasons or the expiry of the period contemplated in subsection (2) - (a) request additional information in order to determine whether or not this Part applies in respect of an arrangement; (b) give notice to the party that the notice in terms of subsection (1) has been withdrawn; or (c) determine the liability of that party for tax in terms of this Part. (4) If at any stage after giving notice to the party in terms of subsection (1), additional information comes to the knowledge of the commissioner, he or she may revise or modify his or her reasons for applying this part or, if the notice had been withdrawn, give notice in terms of subsection (1).’ The section 9 review [16] Section 9(1) of the TAA provides that: ‘A decision made by a SARS official or a notice to a specific person issued by SARS under a tax Act, excluding a decision given effect to in an assessment or a notice of assessment that is subject to objection and appeal, may in the discretion of a SARS official described . . . at the request of the relevant person, be withdrawn …’ [17] The section appears in Part B of Chapter 2 of the TAA, under the heading ‘powers and duties of SARS and SARS officials’. It serves to describe discretionary powers which may be exercised by SARS officials. It contains an internal limiter. Decisions ‘given effect to in an assessment’ may not be withdrawn. So too, a notice of assessment that is subject to objection and appeal. The high court ventured a construction of the first category as relating to ‘assessments already given effect to.’ There is no need to interpret this section. It was common cause that s 9 contemplates the withdrawal of a notice such as one issued under s 80J. Indeed, s 80J(3) provides explicitly that such notice may be withdrawn upon consideration of the taxpayer's response to the s 80J notice. [18] The review of the refusal to withdraw the s 80J notices was launched simultaneously with the submission of responses to the notices and some months prior to the letters and notices of assessment issued in terms of s 80B of the ITA. The application was founded upon two grounds. The first was that the Commissioner’s contention that the objection to the notices ought to be raised in the responses to the notices was wrong in law. It was averred that this approach impermissibly limited the ambit of s 9 and that it denied a taxpayer a remedy which was available to it. The second was that disagreement about the interpretation and application of GAAR perpetuated the error of law in the issuing of the notices. Absa and United Towers contended that since the notices would have adverse effect irrespective of the issuing of assessments, the decision not to withdraw them was reviewable. [19] The high court accepted, correctly in my view, that the decision to issue a s 80J notice was not a ‘final’ decision which placed any adverse burden upon the recipient. It was, the high court held, plainly not administrative action as contemplated by PAJA. The high court, however, found that a decision not to withdraw a notice, even if not final, had adverse consequences. It held that such a decision ‘was plainly a decision by an organ of state exercising a statutory power and its notional non-final attribute is not a bar [to review] precisely because it nevertheless had an impact’. The high court relied, in support of the proposition, upon two judgments of this Court, namely Commissioner for the South African Revenue Service v Langholm Farms (Pty) Ltd,3 and Commissioner for the South African Revenue Service v United Manganese of Kalahari (Pty) Ltd. 4 [20] In those matters, however, the applicants sought declaratory relief relating to the interpretation of statutory provisions. The expressed interpretation of the provisions by SARS was held to be sufficiently definitive to warrant declaratory relief despite the fact that no final administrative decision had been taken. The circumstances of this matter are wholly different. In this case we are concerned 3 Commissioner for the South African Revenue Service v Langholm Farms (Pty) Ltd (1354/2018) [2019] ZASCA 163 (29 November 2019). 4 Commissioner for the South African Revenue Service v United Manganese of Kalahari (Pty) Ltd [2020] ZASCA 16; 2020 (4) SA 428 (SCA). with a decision not to withdraw a notice. The question is what effect or impact the decision has upon the taxpayer concerned? [21] The short answer, it seems to me, is that such decision itself can have no adverse impact or affect. Its effect is to leave the s 80J notice in place until the process contemplated by the section is completed. If the issuing of a notice does not constitute administrative action susceptible to review then, as a matter of logic, a decision to keep it extant cannot constitute administrative action. [22] Section 80J(3) sets out the powers and obligations of the Commissioner in relation to the application of the GAAR provisions. It contemplates three possible decisions that might be taken by the Commissioner in relation to a response submitted in terms of s 80J(2). The Commissioner may request further information from the taxpayer, thus deferring a final decision regarding the application of GAAR. In such a case, the s 80J notice necessarily remains extant until the further information is received, and the Commissioner takes a final decision. There are two possible final decisions. The notice may be withdrawn. In that event the Commissioner must give notice to that effect. The process of applying the GAAR provisions may be re-commenced, but then only upon the issue of a new s 80J notice. If, as a matter of fact, the notice is not withdrawn, the Commissioner must determine the taxpayer’s liability for tax within the time period stipulated by the section. Once the Commissioner has decided the tax liability under GAAR and has issued an assessment, the prior notice issued to the taxpayer ceases to have any relevance, save to the extent that its existence evidences the peremptory requirements of s 80J. Its content may be relevant in proceedings consequent upon the issuing of the assessment. Apart from this, the s 80J notice, is overtaken by events. At that stage the taxpayer is faced with a final decision to impose a tax liability by assessment. It must then be dealt with in accordance with the prescribed dispute resolution procedure provided by s 104 of the TAA. [23] Section 80J(3) does not contemplate a separate decision not to withdraw the notice as a precondition for the decision to determine a tax liability under s 80B. The statutory power exercised by the Commissioner is to determine a tax liability under the GAAR provisions. Until that determination is made the issuing of a s 80J notice or a refusal to withdraw it, can have no adverse effect or impact. These steps are not reviewable. The high court, in my view, lost sight of the provisions of s 80J(3). It ought to have found that a decision not to withdraw the notice is not subject to review outside of a challenge to the decision to impose a tax liability pursuant to s 80B of the ITA. [24] It is not necessary to decide the ambit of s 9 of the TAA and to address the ‘jurisprudential bristles’ to which the high court referred. As I have stated the s 9 review, accepting for the sake of argument that it is competent, is, on the facts of this case, entirely academic. Furthermore, for reasons which I shall set out below, the substantive basis of the review of both the refusal to withdraw the notices and the assessments is flawed, and the orders made in relation to the s 9 review cannot stand. The assessment review [25] Two questions arise: was the high court correct to characterise the dispute as wholly a question of law, and therefore exercise jurisdiction in terms of s 105 of the TAA? A negative answer is dispositive of the appeal since the high court then did not have jurisdiction to review the assessments. The second question, namely whether the high court was correct in its findings on the substantive review, only arises if the first question is answered affirmatively. [26] This Court has recently stated the law in relation to the interpretation and application of s 105 in unequivocal terms. In Commissioner for the South African Revenue Service v Rappa Resources (Pty) Ltd (Rappa Resources),5 Ponnan JA stated that: ‘The purpose of s 105 is clearly to ensure that, in the ordinary course, tax disputes are taken to the tax court. The high court consequently does not have jurisdiction in tax disputes unless it directs otherwise. In Wingate-Pearse it was put as follows: “Tax cases are generally reserved for the exclusive jurisdiction of the tax court in the first instance. But it is settled law that a decision of the Commissioner is subject to judicial intervention in certain circumstances . . . In its amended form, s 105 thus makes it plain that “unless a High Court otherwise directs”, an assessment may only be disputed by means of the objection and appeal process.”’ [27] In this instance the high court recognised that it could only exercise its jurisdiction in exceptional circumstances. It considered that a dispute concerning a question of law would constitute an exceptional circumstance entitling it to exercise its jurisdiction. It held that the dispute regarding the refusal to withdraw the s 80J notices and the legality of the assessments, involved a question of law. For this reason, it exercised its discretion to adjudicate the dispute. [28] This Court in Rappa Resources endorsed the high court’s approach to the exceptional exercise of its jurisdiction in terms of s 105 of the TAA.6 The question, however, is whether the high court was correct in its characterisation of the nature of the dispute. [29] The high court took the view that the s 80J notices and the assessments were ‘inextricably linked’. It stated that the factual basis upon which SARS 5 Commissioner for the South African Revenue Service v Rappa Resources (Pty) Ltd (Rappa Resources) [2023] ZASCA 28; 2023 (4) SA 488 (SCA) para 20. See also United Manganese of Kalahari (Pty) Ltd v Commissioner for the South African Revenue Service (1231/2021) [2023] ZASCA 29 (24 March 2023). 6 Rappa Resources fn 5 above para 22. decided to apply the GAAR provisions was set out in the notices. It held that SARS had accepted the facts disclosed in the notices. On this basis, the high court held that SARS did not dispute that Absa and United Towers had no knowledge of the arrangement in which they had participated. They could therefore not have been parties to an arrangement which, unknown to them, had sought to avoid the payment of tax which they would otherwise have been required to pay. The high court therefore found that the application of the GAAR provisions in circumstances where they did not, as matter of fact, apply, was irrational and offended the principle of legality. Neither the assessments nor the s 80 J notices could stand. [30] The high court’s finding that SARS had accepted the facts as stated by Absa and United Towers, and in particular, their assertion that they had no knowledge of the nature and ambit of the scheme or arrangement, is incorrect. The notices do not state that SARS accepts the claim that Absa and United Towers had no knowledge of the full ambit of the scheme. The notices set out reasons for the belief that the GAAR provisions apply, no more. They are not statements of the accepted factual basis for application of the GAAR provisions. The correspondence relating to the s 80J notices pertinently states that SARS disputes the contentions raised by Absa and United Towers. These statements form part of the reasons given by SARS as to why it would not withdraw the s 80J notices. These averments are set out in the answering affidavits filed in opposition to the s 9 review. These affidavits were filed prior to the issuing of the notices of assessment which are the subject of the assessment review. There is accordingly no room for the conclusion that SARS accepted that Absa and United Towers were not parties to the avoidance arrangement. In the light of this the application of the GAAR provisions was not solely a question of law. [31] On the common cause facts Absa and United Towers participated in steps forming part of an ‘arrangement’, the full ambit of which was described in the s 80J notices. Whether they had knowledge of the full nature of the transactions which comprised the arrangement, and whether their sole or main purpose in participating was to secure a tax benefit, are matters of disputed fact. Whether the ‘arrangement’ constituted an ‘impermissible avoidance arrangement’ is a factual enquiry. The same is true in respect of the ‘tax benefit’ requirement. Whether Absa and United Towers obtained a tax benefit by avoiding an anticipated tax liability that might otherwise have accrued from the transactions, is a question of fact. It is not a mere question of law, determinable upon the basis of the assessment as framed by SARS. [32] In CIR v Conhage this Court held that the effect, purpose, and normality of a transaction are essentially questions of fact.7 What must be determined in every case is the subjective purpose of the taxpayer.8 In that matter the court was dealing with s 103(1) of the ITA which contained an anti-avoidance provision pre-dating the comprehensive GAAR provisions now set out in the ITA. Nevertheless, similar considerations relating to the determination of the purpose and effect of the transaction or arrangement applied. [33] The high court predicated its finding that it had jurisdiction to review the assessments on the basis that the challenge to the assessments involved solely a question of law. That, as I have indicated, was incorrect. Since the dispute did not involve solely a question of law, no exceptional circumstances existed to justify the high court assuming jurisdiction in the matter. It follows that in relation to the 7 CIR v Conhage fn 1 above para 12. 8 Ibid. assessment review, it did not have the required jurisdiction to deal with the matter. The high court ought therefore to have dismissed the application. [34] In the circumstances, the orders granted by the high court cannot stand. The merits of any challenge to the notices of assessment must be adjudicated in accordance with the dispute resolution process provided by s 104 of the TAA. The appellant sought the costs of three counsel. Such order will only be made in rare circumstances. This, however, is not such a matter. The employment of two counsel was warranted. [35] I make the following order: 1 The appeal is upheld with costs, including the costs of two counsel. 2 The orders of the high court are set aside and substituted with the following order: ‘The application is dismissed with costs, including the costs of two counsel.’ ____________________ G GOOSEN JUDGE OF APPEAL Appearances For the appellant: A R Sholto-Douglas SC (with E W Fagan SC and B E Mbikiwa) Instructed by: State Attorney, Cape Town State Attorney, Bloemfontein For the respondents: M Janisch SC (with S Budlender SC and L Mnqandi) Instructed by: Allen & Overy, Sandton Symington De Kok Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 September 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Commissioner for the South African Revenue Service v Absa Bank Limited and Another (596/2021) [2023] ZASCA 125 (29 September 2023) The Supreme Court of Appeal (SCA) today upheld an appeal against a judgment of the Gauteng Division the High Court, Pretoria (the high court) which reviewed and set aside tax assessments raised against Absa Bank and its subsidiary, United Towers Proprietary Limited (collectively referred to as Absa Bank). The Commissioner for the South African Revenue Service (SARS) initiated an investigation into a series of transactions involving Absa Bank and several other entities in 2016. SARS conducted an audit of these transactions which covered the 2015, 2016 and 2017 tax periods, commencing in May 2018. During the audit SARS obtained information from Absa Bank. At the conclusion of the audit process On 30 November 2018, SARS issued notices to Absa Bank, in terms of s 80J of the Income Tax Act, 58 of 1962 (the ITA). The notices signified an intention to apply the General Anti-Avoidance Rule (GAAR) provision of the ITA on the basis that Absa Bank had participated in an impermissible tax avoidance arrangement. The notices provided for the submission of a response by Absa Bank. The submission period was extended to 28 February 2019 at the request of Absa Bank. On 15 February 2019, Absa Bank submitted a request to SARS, in terms of s 9 of the Tax Administration Act, 28 of 2011 (the TAA), to withdraw the notices. It was contended that the application of GAAR was tainted by an error of law since the notices indicated that SARS accepted that Absa Bank was not a party to an avoidance arrangement. They requested that the period for the filing of a response to the notices be extended further. SARS extended the period to 31 March 2019. On 5 March 2019, SARS informed Absa Bank that it was not withdrawing the notices. It disputed the submissions by Absa Bank and stated that their objections should be addressed in the process of responding to the notices as envisaged by s 80J. On 29 March 2019, Absa Bank launched an application to review the refusal to withdraw the s 80J notices. They simultaneously submitted responses to the s 80J notices. While the review application was pending before the high court, SARS, acting in terms of s 80B of the ITA, determined that Absa Bank were liable for additional tax. It issued additional assessments on the basis that they were parties to an impermissible avoidance arrangement, on 17 October 2019. Absa Bank then amended its review application to introduce a review of the assessments. The high court concluded that the decision not to withdraw the s 80J notices was administrative action susceptible of review. It held that the basis upon which the notices were issued and the assessments were raised, were inextricably linked. It found that SARS was bound by the facts it recorded in the notices, as had been disclosed by Absa Bank. The high court therefore found that the grounds of review involved only questions of law. This constituted exceptional circumstances as envisaged by s 105 of the TAA, which entitled it to hear the matter. It upheld the grounds of review, found that the notices and assessments were unlawful, and set them aside. The appeal came before the SCA with the leave of the high court. Three issues arose for decision: a) Whether a decision not to withdrawal s 80J notice is reviewable prior to or after the issuing of an assessment envisaged in s 80B of the ITA? b) Whether the high court was correct to characterise the challenge as being wholly questions of law which entitled it to exercise its jurisdiction in terms of s 105 of the TAA; and if so c) Whether the high court was correct in its determination of the dispute? The SCA found, on the first question, that the refusal to withdraw a s 80J notice can have no adverse effect or impact upon a taxpayer. Its effect left the notice in place until a final decision was made to determine a tax liability. It found that the high court had correctly held that the issuing of a s 80J notice did not constitute administrative action. Contrary to the high court, it held that the act of keeping the notice extant also did not constitute administrative action. The SCA held that the s 80J notices were overtaken by the decisions to impose a tax liability as provided by s 80B. The review of the refusal to withdraw the notices was therefore academic. In relation to the review of the assessments, s 105 of the TAA applied. The SCA confirmed the principle that the high court will only exercise its jurisdiction in exceptional circumstances. It found that the high court was wrong in finding that SARS had accepted and was therefore bound by the facts disclosed by Absa Bank. It held that participation in an arrangement; its purpose and effect; and whether it constituted an impermissible avoidance arrangement involve questions of fact and law. The high court had therefore erred in its characterisation of the dispute as being wholly one of law. The high court was therefore incorrect to find that exceptional circumstances were present to entitle it to exercise jurisdiction in terms of s 105 of the TAA. The SCA upheld the appeal with costs and set aside the high court orders. It substituted the orders with one dismissing the application with costs. --------ends--------

3249

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT REPORTABLE In the matter between : Case No: 543/06 1) ROAD ACCIDENT FUND APPELLANT and ISHWARDUTT RAMPUKAR RESPONDENT Case No: 314/07 2) ROAD ACCIDENT FUND APPELLANT and JENNIFER BUSIE GUMEDE RESPONDENT CORAM : SCOTT, BRAND, MAYA JJA HURT et MHLANTLA AJJA HEARD : 8 NOVEMBER 2007 DELIVERED : 28 NOVEMBER 2007 Summary: Section 3(1)(a) of Act 41 of 2001 – jurisdiction under s 19 of Supreme Court Act 59 of 1959 on part of transferring court not a requirement – operation of section not limited to areas affected by change of jurisdiction under s 2 of the Act. Neutral citation: This judgment may be referred to as Road Accident Fund v Rampukar/Road Accident Fund v Gumede [2007] SCA 148 (RSA) BRAND JA/ BRAND JA: [1] These two appeals were heard together because the issues they raise are substantially the same. In essence they turn on the interpretation of s 3(1)(a) of the Interim Rationalisation of Jurisdiction of High Courts Act 41 of 2001. By the nature of things, I am bound to return to the provisions of the Act in more detail when evaluating the opposing contentions. Broadly stated for introductory purposes, however, s 3(1)(a) affords a High Court the authority to order the removal of civil proceedings instituted in that court to another High Court if it appears to the former that such proceedings should have been instituted in the latter. [2] The appellant in both matters is the Road Accident Fund (‘the RAF’) which has its principal place of business for purposes of s 19(1) of the Supreme Court Act 59 of 1959 (in the sense contemplated, eg in K Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd 1991 (1) SA 482 (A) at 496A-C) within the area of jurisdiction of the Pretoria High Court. Another feature common to both matters is that the motor vehicle accidents that gave rise to the respondents’ claims against the RAF occurred in the province of KwaZulu-Natal. Yet, the respondents did not institute their actions against the RAF in the Pretoria High Court or in the High Courts of KwaZulu-Natal, which would appear to be the options indicated by s 19(1) of the Supreme Court Act. While Mr Rampukar’s action was launched in the Johannesburg High Court, Mrs Gumede brought hers in the Cape. In each case the RAF raised the special plea that the court had no jurisdiction, whereupon both the respondents conceded the validity of this special defence. [3] After making the concession that the Johannesburg High Court had no jurisdiction, Mr Rampukar brought an application in that court, based on s 3(1)(a) of the Act, for an order that his action be transferred to the Pretoria High Court where the RAF has its principal place of business. Despite opposition by the RAF, the application was granted by Willis J. Mrs Gumede brought the same application in the Cape High Court, save that she wanted her action to be transferred to the Pietermaritzburg High Court within whose area of jurisdiction the accident giving rise to her claim occurred. Relying inter alia, on the judgment of Willis J in Rampukar, Van Reenen J granted her application as well. The appeals against these two judgments are with the leave of the court a quo in each case. [4] I think the issues that arose on appeal will best be understood against the background and the relevant provisions of the Act. The background appears from the comprehensive preamble to the Act. In essence it amounts to this: by virtue of item 16(4)(a)(1) of Schedule 6 to the Constitution, Act 108 of 1996, all provincial and local divisions of the erstwhile Supreme Court of South Africa as well as the superior courts of former homelands, became High Courts under the Constitution without any alteration in their areas of jurisdiction. Item 16(6)(a) of the same Schedule 6 provided, however, that there should be a comprehensive rationalisation of various matters concerning these newly created High Courts, including their areas of jurisdiction, as soon as possible after the Constitution took effect. But the legislature foresaw that the finalisation of the comprehensive rationalisation process would require considerable time. In the meantime, interim changes to the areas of jurisdiction of some High Courts were urgently necessary. Consequently, so the preamble to the Act explains, the legislature decided to promulgate the Act in order to facilitate these interim changes. [5] The relevant provisions of the Act are contained in ss 2, 3 and 4. They read as follows: ‘2 Minister may alter area of jurisdiction of any High Court (1) Notwithstanding the provisions of any other law, the Minister [of Justice] may, after consultation with the Judicial Service Commission, by notice in the Gazette - (a) alter the area of jurisdiction for which a High Court has been established by including therein or excising therefrom any [magisterial] district or part thereof; (b) amend or withdraw any notice issued in terms of this section. (2) Any notice referred to in subsection (1) must be approved by Parliament before publication thereof in the Gazette. (3) The publication of a notice referred to in subsection (1) does not affect any proceedings which have been instituted but not yet completed at the time of such publication. Transfer of proceedings from one High Court to another (1) If any civil proceedings have been instituted in any High Court, and it appears to the Court concerned that such proceedings - (a) should have been instituted in another High Court; or (b) would be more conveniently or more appropriately heard or determined in another High Court, the Court may, upon application by any party thereto and after hearing all other parties thereto, order such proceedings to be removed to that other High Court. (2) An order for removal under subsection (1) must be transmitted to the registrar of the High Court to which the removal is ordered, and upon receipt of such order that Court may hear and determine the proceedings in question. Repeal of laws and saving (1) Subsections (1) and (4) of section 6 of, and the First Schedule to, the Supreme Court Act, 1959, are hereby repealed. (2) Notwithstanding the repeal of the laws referred to in subsection (1), the seats and the areas of jurisdiction of the High Courts referred to in the said First Schedule shall, subject to any alteration under section 2, remain as they were immediately before the commencement of this Act.’ [6] To complete the picture: the provisions of the Supreme Court Act which are repealed by s 4(1) and saved by s 4(2) of the Act, are those defining the geographical areas of jurisdiction of the divisions of the Supreme Court. After the Act came into operation on 5 December 2001, the Minister of Justice on more than one occasion, effected alterations to the areas of jurisdiction of different High Courts by way of notices in the Government Gazette as contemplated in s 2. These alterations are conveniently set out in Erasmus, Superior Court Practice, at A1-106B to A1-106C. Suffice it to say for present purposes, however, that neither Pretoria – where the RAF’s principal place of business is situated – nor any of the areas in KwaZulu-Natal – where the two accidents in question occurred – were affected by any of these alterations. Conversely stated, the Johannesburg High Court and the Cape High Court, where the present matters were instituted, never had jurisdiction to entertain these cases. [7] In the Rampukar appeal, the RAF limited itself to the contention that, on a proper interpretation of s 3(1)(a) of the Act, the court a quo was not authorised to transfer the proceedings to another High Court. In Gumede it raised the same argument, but contended, in the alternative, that even if the court a quo had the power to do so, it should not have exercised the discretion it derives from the section in favour of the respondent. [8] The RAF’s first argument in support of its main contention raised in both matters departed from the premise that, as a matter of basic principle, a court that has no jurisdiction to decide a particular case, also has no jurisdiction to deal with that case by transferring it to another court. And, so the RAF’s argument proceeded, there is nothing in s 3(1)(a) which is indicative of an intention to change that basic principle. For the proposed basic principle pivotal to this argument, the RAF sought to rely on a long line of cases relating to s 9(1) of the Supreme Court Act and the similarly worded predecessors to that section in earlier legislation (see eg Van Dijk v Van Dijk 1911 WLD 203 at 204; Ying Woon v Secretary for Transport 1964 (1) SA 103 (N) at 108C-F; Welgemoed and another NNO v The Master 1976 (1) SA 513 (T) at 523A-D). [9] The wording of s 9(1) of the Supreme Court Act closely resembles s 3(1)(b) of the Act. In fact, the provisions of these two enactments are so similar that it gives rise to the suggestion that the latter had superseded the former without express repeal (see eg Nongovu NO v Road Accident Fund 2007 (1) SA 59 (T) para 10; L T C Harms, Civil Procedure in the Supreme Court, A-34). Whether this is so or not, is not necessary to decide. Of significance for present purposes, however, are two things. First, s 3(1)(a) of the Act is new. It has no counterpart in the Supreme Court Act or any of its predecessors. Secondly, s 3(1)(a) and s 3(1)(b) deal with completely disparate situations. [10] As I see it, s 3(1)(a), on its own wording, deals with the situation where the proceedings should have been instituted in ‘the other court’, ie the transferee court. This can only mean that they should not have been instituted in the court where they were in fact instituted, ie the transferring court. Admittedly the section suggests no reason why they should not have been so instituted. But, in the context of an act dealing with jurisdiction, the only reason I can think of is that the transferring court lacked jurisdiction to determine the dispute between the parties under s 19(1) of the Supreme Court Act. In these circumstances, s 3(1)(a) does not bestow the transferring court with jurisdiction to entertain and decide the main dispute; all the section does is to afford the transferring court the limited jurisdiction – which otherwise it would not have had – to transfer the matter to the ‘right’ court, ie the court with proper jurisdiction to determine the dispute under s 19(1) of the Supreme Court Act. Thus understood, I think the situation that s 3(1)(a) seeks to address is obvious. It is the one where a plaintiff has wrongly instituted proceedings in the transferring court instead of the transferee court and now seeks a transfer from the former to the latter. [11] Stated somewhat differently; if both s 3(1)(a) and s 3(1)(b) require original jurisdiction on the part of the transferring court – as the RAF will have it – I cannot see what purpose s 3(1)(a) could possibly serve in addition to s 3(1)(b). Why would a court with jurisdiction to determine the matter transfer that matter to another court, unless it is convenient or appropriate to do so, as contemplated in s 3(1)(b)? As I understand s 3(1)(a), it complements s 3(1)(b) in that the two sections provide for what are, in a sense, converse situations. According to the interpretation previously given to s 9(1) of the Supreme Court Act – which must as a logical necessity apply to s 3(1)(b) as well – this section deals with the situation where the transferring court has jurisdiction to determine the main dispute. Yet it is asked to transfer the matter to the transferee court for the sake of convenience and it matters not whether the transferee court has original jurisdiction or not (see eg Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (in liquidation) 1987 (4) SA 883 (A) at 888A-B). In s 3(1)(a), on the other hand, it is the transferee court that must have original jurisdiction and not the transferring court. In this light, the RAF’s first contention as to why the courts a quo could not transfer the proceedings under s 3(1)(a), ie because they had no original jurisdiction under s 19(1) of the Supreme Court Act to determine the main disputes, is in my view unsustainable. [12] I turn to the RAF’s second contention as to why s 3(1)(a) did not empower the courts a quo to transfer the proceedings. According to this contention the section is only available to parties in matters which are affected by changes in jurisdiction under s 2 of the Act. Since the matters under consideration were not so affected, the RAF contends, s 3(1)(a) found no application at all. In broad outline, the argument in support of this contention proceeds as follows: the whole Act was intended as a temporary measure to facilitate the interim rationalisation of the areas of jurisdiction of the High Courts, pending finalisation of the more comprehensive rationalisation process contemplated by the Constitution. That much appears from the preamble. The mechanism for realising this goal is created in s 2. Read in this context, s 3 constitutes no more than an ancillary provision. It deals with the transfer of matters in the affected areas as part of the alteration process. The interpretation of s 3(1)(a) contended for by the respondents and endorsed by the courts a quo, so the argument goes, is far too wide. It would result in the negation of s 19(1) of the Supreme Court Act which specifically bestows territorial jurisdiction on the different High Courts in respect of prescribed geographical areas. It will enable litigants to choose the court in which they wish to institute proceedings, in total disregard of the defined and extant areas of jurisdiction. Having regard to the limited and temporary nature of the act, so the argument concludes, it is highly unlikely that the legislature would have intended s 3(1)(a) to have these drastic and far reaching consequences. [13] I do not agree that the wider interpretation of s 3(1)(a) adopted by the courts a quo results in a negation of s 19(1) of the Supreme Court Act. On the contrary, I believe that the wider interpretation is premised on a recognition of the generally accepted principles of territorial jurisdiction underlying s 19(1). As I have said before, in accordance with the wider interpretation, s 3(1)(a) does not bestow jurisdiction on a court which has no jurisdiction under s 19(1) of the Supreme Court Act to decide the case on its merits. All it does is to afford the ‘wrong’ court – ie the transferring court – limited jurisdiction to transfer the case to the ‘right’ court which does have jurisdiction under s 19(1). [14] In this light the RAF’s suggestion that the wider interpretation of s 3(1)(a) would enable litigants to institute their actions in the courts of their choice, is difficult to understand. It begs the question why litigants would knowingly institute proceedings in a court with no original jurisdiction when at best for these perverse litigants the section would enable them to seek a transfer to the right court. This could only result in an expensive, wasteful exercise for the litigant who will receive no perceivable benefit in return. What is more, under s 3(1)(a) a transfer is not just for the asking. The transferring court has a discretion to refuse the application and will presumably do so if the applicant had chosen the wrong court for no acceptable reason. [15] What also seems clear to me is that s 3(1)(a) was not intended for the situation where a party instituted proceedings in a court which had jurisdiction at the time of institution but then lost that jurisdiction due to an alteration of its area of jurisdiction under s 2 of the Act. This situation is adequately covered by s 2(3) which specifically provides that the publication of a notice under s 2(1) does not affect any proceedings which were instituted prior to the publication of that notice. [16] Hence it can, in my view, be accepted with confidence that s 3(1)(a) was intended to alleviate the predicament of a litigant who mistakenly instituted proceedings in the wrong court. Once this is appreciated, an analysis of the RAF’s argument seems to show that the essential difference between the wider and the narrower interpretation of s 3(1)(a) turns on the reason for the mistake. According to the narrower interpretation, there must be some link between the reason for the mistake and a change in jurisdiction under s 2 of the Act. Consequently, on the narrower interpretation, s 3(1)(a) only applies where the litigant mistakenly instituted proceedings in a court which at one time had territorial jurisdiction to decide the case, but which at the time of institution no longer had jurisdiction due to an alteration under s 2(1). By contrast, the wider interpretation imposes no restriction on the reason for the mistake. If a litigant had mistakenly instituted action in the wrong court, that court has a discretion to come to his or her aid and it matters not why the mistake was made. [17] An appropriate starting point in deciding between these divergent interpretations is, in my view, that as a matter of everyday language, the plain meaning of the section imposes no limitation on the type of mistake. On the contrary, the language seems to be as wide as it can possibly be. Yet, the RAF contended that such limitation is indicated by the context of the preamble and the other provisions of the Act as a whole. Read in this context, so the RAF argues, the words ‘any High Court’ in the introductory part of s 3(1)(a) should therefore be understood as if they were notionally qualified by the phrase ‘which had jurisdiction prior to an alteration under s 2(1)’. This argument, of course, immediately gives rise to the question why, if this was indeed the legislature’s intention, it failed to take the relatively simple step of introducing the restricting phrase. [18] Apart from this, I have a twofold problem with the qualification contended for by the RAF. On the one hand, it will only provide assistance to litigants whose mistake was that they did not realise that they had been affected by a change in jurisdiction. Litigants who made the same type of mistake by thinking that they were affected by a change in jurisdiction while they were not, will derive no assistance from the section, simply because the court never had any jurisdiction to hear the case. Conversely, the section would, upon acceptance of the RAF’s qualification, provide relief to litigants who were affected by a change in jurisdiction, even when their mistake did not relate to the change in jurisdiction at all, ie where they realised there had been a change in jurisdiction but for some other reason made the mistake of initiating proceedings in the wrong court. [19] In the end it becomes apparent, in my view, that the narrower interpretation of s 3(1)(a) would lead to arbitrary – and sometimes even absurd – differentiations between situations which are indistinguishable in principle. It would permit a litigant who mistakenly instituted proceedings in the wrong court to have the matter transferred to the right court if the mistake is excusable and of a particular kind. But if the mistake was brought about by some other equally excusable reason, a transfer would not be possible. More often than not this will have the result – as in the present matters – that litigants who have made one type of mistake may lose their claims through prescription while the claims of other litigants who made some other mistake may be saved. I can find no indication in s 3(1)(a) that the legislature intended to bring about this irrational discrimination between different litigants in the same predicament. [20] The further consideration relied upon by the RAF in support of the narrower interpretation is that the Act was intended to be of limited duration only. I find this proposition equally unconvincing. The mere fact that it is an interim measure cannot, in my view, make any difference as to how it should be understood. While it is in operation, effect must be given to it. What will happen if and when it is repealed, is not for us to divine. The end result is that I am not persuaded by any of the arguments advanced by the RAF that the courts a quo were wrong in adopting the wider interpretation of s 3(1)(a). [21] This brings me to the alternative argument raised by the RAF in Gumede, namely that the court a quo should not have exercised the discretion bestowed upon it by s 3(1)(a) in favour of the respondent. The evaluation of this argument requires a somewhat more detailed account of the background facts. Mrs Gumede’s claims against the RAF, in her personal capacity and on behalf of her two minor children, are for the loss of support that they suffered when their breadwinner died as a result of the injuries he sustained when the motor vehicle, in which he travelled as a passenger, was involved in an accident with another vehicle. The accident occurred in Mtubatuba, KwaZulu-Natal on 11 December 1998. It is common cause that, if she has to institute action anew in the Pietermaritzburg High Court, the claim in her personal capacity – which is by far the largest of her claims – would be lost through prescription, though the claims of her two minor children will probably survive. [22] In an affidavit filed in support of Mrs Gumede’s application for the transfer of the matter, her attorney gives the reason why her action was instituted in the Cape High Court. It appears that the reason flows directly from a directive issued by the RAF, which was published in the June 1997 edition of De Rebus (at 383). According to the directive, claimants were invited to lodge their claims at any of the three offices of the RAF in Pretoria, Randburg or Cape Town. In addition, it informed claimants that a claim would normally be administered at the office where it was lodged and that, if legal proceedings were to follow, these should be instituted in the High Court with jurisdiction over the area in which the administering office is situated. This invitation was confirmed in a newsletter distributed by the legal advice department of the RAF in October 1997. Though Mrs Gumede’s claim had been lodged at the Randburg office of the RAF, it was, for reasons unknown, administered by its Cape Town office. That was the sole reason, Mrs Gumede’s attorney explained, why her action was instituted in the Cape High Court. In fact, the attorney stated, it would be far more convenient for her and her legal advisors to institute the action in Pietermaritzburg. [23] Prior to the close of pleadings in the matter, judgment was handed down by the Cape High Court in the case of Ex Parte Kajee 2004 (2) SA 534 (C) where it was held, inter alia (at 542B), that the RAF is not entitled to consent to jurisdiction in respect of a court which has no jurisdiction to entertain the action in accordance with s 19 of the Supreme Court Act. Since the present appeals were argued on the basis that Kajee was correctly decided, I specifically refrain from expressing any view as to whether this is so. Of relevance, however, is that it was the decision in Kajee which led to the filing of the RAF’s special plea – which eventually proved to be successful – that the Cape High Court had no jurisdiction to entertain Mrs Gumede’s claims. [24] The main reason advanced by the RAF as to why the court a quo should, in the exercise of its discretion, have refused to transfer the matter, is that, in the event, the RAF will be deprived of the opportunity to plead prescription in respect of Mrs Gumede’s personal claim. It appears, however, that, in the present context, the issue of prescription is a two edged sword. It raises the question whether in the circumstances it would be fair that Mrs Gumede should lose her personal claim. I think not. It is clear that the confusion with regard to jurisdiction which led to the institution of her action in the wrong court, was induced by the RAF’s own conduct. In these circumstances, I believe, it does the RAF no credit to rely on that very confusion to avoid Mrs Gumede’s claim. What is more, with regard to the claims of Mrs Gumede’s minor children, a refusal to transfer the proceedings will require a re-institution of the action in the Pietermaritzburg High Court with the consequent waste of time and money, from which no one – including the RAF – will derive any perceivable benefit. I therefore believe that the court a quo cannot be criticised for the way in which its discretion was exercised. On the contrary, I think in its position I would have done exactly the same. [25] In the result, both appeals are dismissed with costs. ………………. F D J BRAND JUDGE OF APPEAL Concur: SCOTT JA MAYA JA HURT AJA MHLANTLA AJA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL In the matter between Case No: 543/06 1) ROAD ACCIDENT FUND APPELLANT and ISHWARDUTT RAMPUKAR RESPONDENT Case No: 314/07 2) ROAD ACCIDENT FUND APPELLANT and JENNIFER BUSIE GUMEDE RESPONDENT From: The Registrar, Supreme Court of Appeal Date: 2007-11-28 Status: Immediate 1. On 28 November 2007 the SCA dismissed the appeals of the Road Accident Fund (RAF) in these two matters. The appeals turned on the interpretation of s 3(1)(a) of the Interim Rationalisation of Jurisdiction of High Courts Act 41 of 2001. Broadly stated, the section affords the High Court the authority to order the removal of civil proceedings instituted in that court to another High Court if it appears to the former that such proceedings should have been instituted in the latter. 2. The two respondents both instituted their actions – arising from motor vehicle accidents – against the RAF in what turned out to be the wrong High Court. They then successfully applied for the transfer of their cases to the right courts under the provisions of s 3(1)(a) of the Act. The RAF’s contention was, however, that in the context of the Act as a whole, the relief afforded by the section is available only to litigants whose mistake arose from a change in the jurisdiction of the High Court in which the action was wrongly instituted, pursuant to the other provisions of the Act. Since the reasons why the respondents in the two appeals instituted their actions in the wrong High Courts had nothing to do with any change in the jurisdiction of those courts, so the RAF argued, these actions should not have been transferred to the right courts. This would effectively mean that the claims of both the respondents against the RAF would have been extinguished by prescription. 3. The SCA did not agree with the RAF’s interpretation of s 3(1)(a), essentially for two reasons. Firstly, because the plain language of the section does not allow for the limitation relating to the reason for the litigant’s mistake contended for by the RAF. Secondly, because any restriction in the operation of the section which depended on the reason why the litigant mistakenly instituted action in the wrong court, would lead to an irrational and unfair discrimination between litigants whose mistakes, though originating from different reasons, are equally excusable. An intention to cause such irrational discrimination, so the SCA held, cannot be attributed to the legislature. 4. In consequence the transfers of the actions ordered by the High Court in both matters were upheld.

2783

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 529/11 In the matter between: The MEC for Education, KwaZulu-Natal Appellant and Simphiwe Shange Respondent Neutral citation: The MEC for Education, KZN v Shange (529/11) [2012] ZASCA 98 (1 June 2012) Coram: FARLAM, NAVSA, HEHER, SNYDERS JJA AND PETSE AJA Heard: 8 May 2012 Delivered: 1 June 2012 Summary: Condonation – Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 – knowledge of the identity of the joint debtor. ORDER On appeal from: On appeal from Kwa-Zulu Natal High Court, Durban (Govindasamy AJ sitting as court of first instance): The appeal is dismissed with costs. JUDGMENT SNYDERS JA (FARLAM, NAVSA, HEHER JJA and PETSE AJA concurring) [1] During June 2003 the respondent, a 15 year old Grade 9 learner, suffered a blunt force injury to his right eye, allegedly at the hand of one of his teachers who was administering corporal punishment with a belt to another learner. The tip of the belt struck the respondent on the side of his eye. An action was instituted by the respondent to recover damages from the appellant. Before the matter proceeded to trial an application was launched by the respondent to seek condonation for what seemed an acknowledged non-compliance with the provisions of the Institution of Legal Proceedings against Organs of State Act 40 of 2002 (the Act). The court below (Govindasamy AJ sitting as court of first instance) granted the application for condonation and awarded the respondent the costs of the application. The appellant sought and obtained leave to appeal from the court below. [2] For the purpose of the condonation application in terms of s 3(4) of the Act, the facts alleged by the respondent are essentially undisputed. The incident occurred during June 2003. The respondent, who was born on 27 August 1987, was 15 years and 10 months old at the time. After the incident the relevant teacher told him that the injury he suffered was caused ‘by mistake’. The respondent accepted that explanation. During January 2006, when he was 18 years and 5 months old and still a minor, comments by a friend of the respondent’s family, who noticed the latter wearing an eye patch, motivated him to bring the incident to the attention of the office of the Public Protector. An advocate from that office not only advised him to see an attorney, but informed him that he had a claim against the appellant. Consequently, he consulted with and instructed his attorneys of record to proceed with an action. On 2 February 2006 the attorney dispatched a notice in terms of s 3 of the Act to the Minister of Education. The relevant provisions of s 3 are: ‘(1) No legal proceedings for the recovery of a debt may be instituted against an organ of state unless- (a) the creditor has given the organ of state in question notice in writing of his or her or its intention to institute the legal proceedings in question; or (b) . . . (2) A notice must – (a) within six months from the date on which the debt became due, be served on the organ of state in accordance with section 4(1); and (b) . . . (3) For purposes of subsection (2)(a)- (a) a debt may not be regarded as being due until the creditor has knowledge of the identity of the organ of state and of the facts giving rise to the debt, but a creditor must be regarded as having acquired it by exercising reasonable care, unless the organ of state willfully prevented him or her or it from acquiring such knowledge; and (b) . . . . ‘ 4(a) If an organ of state relies on a creditor’s failure to serve a notice in terms of subsection (2)(a), the creditor may apply to a court having jurisdiction for condonation of such failure. (b) The court may grant an application referred to in paragraph (a) if it is satisfied that- (i) the debt has not been extinguished by prescription; (ii) good cause exists for the failure by the creditor; and (iii) the organ of state was not unreasonably prejudiced by the failure. (c) . . . .’ 1 [3] On 3 December 2008 the respondent’s summons was served on the appellant. The appellant delivered a special plea in which she sought the dismissal of the respondent’s claim for non-compliance with ss 3(1)(a) and 3(2)(a) of the Act. This prompted the respondent’s attorneys to do two things. First, on 7 May 2010, they dispatched a notice 1 Subsection (3)(a) largely echoes the provisions of s 12(2) and (3) of the Prescription Act 68 of 1969. in terms of s 3 of the Act to the appellant, and second, they brought an application for condonation in terms of s 3(4)(a) of the Act. [4] The court below granted condonation on four bases.2 First, it concluded that ‘a child whose cause of action arose before the commencement of s 17 of the Children’s Act 38 of 2005 is still entitled to the same period of time in which to institute his or her claim for damages as he or she would have been, had the age of majority not been changed. Second, that the respondent became ‘aware of his claim’ on 18 January 2006, the date of the first consultation with an attorney. Third, that notice to the Minister of Education and not the appellant (until much later) was an oversight on the part of the respondent’s attorney that should not be attributed to the respondent. Fourth, that ‘any prejudice which the [appellant] may have suffered as a result of failure to give notice, could not be regarded as unreasonable or insurmountable in the circumstances’. [5] This appeal turns on a question that had not been previously asked nor answered. The facts alleged by the respondent, if proven during the trial, indicate that from the outset, two joint debtors were liable for the delict that the respondent suffered - first, the teacher that committed the assault on the respondent whilst acting within the course and scope of his employment and second, the teacher’s employer, the appellant. No claim has been pursued against the teacher. The primary question that should have been asked was whether the court could be satisfied that the condition in s 3(4)(b)(i) has been met in respect of the debt the respondent was trying to enforce against the appellant. [6] The answer to the question is to be found in the facts alleged by the respondent, which are mostly unchallenged, applied to the requirements of s 12(3) of the Prescription Act 68 of 1969. In order to appreciate the full context of the section, I quote the entire s 12 and emphasize those portions that are pertinent to the question posed: ‘(1) Subject to the provisions of subsections (2), (3) and (4), prescription shall commence to run as soon as the debt is due. 2 The judgment of the court below has been reported as Shange v MEC for Education, KwaZulu-Natal 2012 (2) SA 519 (KZD). (2) If the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt. (3) A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arise: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.’ [7] Immediately after the incident occurred, the respondent knew almost all the facts from which the debt arose: he experienced the event; he knew how it happened; he knew that it was a teacher who inflicted the injury; that it happened during school hours and at school. Insofar as his claim against the teacher was concerned, that debt became due immediately. However, whether he, as a 15 year old rural learner, knew the identity of the appellant as joint debtor, is not apparent from those facts. [8] The respondent’s attorney of record made an affidavit as part of the founding papers filed on behalf of the respondent. At paragraphs 29, 31 and 32 she states: ’29 The delict giving rise to the [respondent’s] claim against the [appellant] (“the incident”) occurred in June 2003 at which stage the [respondent] was 15 years old and a minor. More importantly, at the time of the incident, the [respondent] was told that the incident was a mistake. This is what he understood it to be until early in January 2006 when, following questions from a friend of his mother’s about the eye patch he was wearing, it was suggested to him that the Deputy-Principal’s conduct was wrongful. Following this suggestion in early January 2006 and further advice from his mother’s friend that he should lay a complaint with the Public Protector, the [respondent] swiftly set about doing so. 30 . . . 31 Until January 2006, either early in that month when he received advice from his mother’s friend, or later in that month when he was given advice by an Advocate at the office of the Public Protector, the [respondent] understood the incident to have been a mistake. He knew at whose hand the incident was committed but only after receiving advice in January 2006 did the [respondent] appreciate that the Deputy-Principal had acted wrongfully. 32 It was this appreciation in January 2006 that would have set prescription in motion but for the fact that the [respondent] was 18 years old at the time. He was therefore a minor against whom prescription did not run, minority being a statutory impediment to prescription.’3 [9] In his own affidavit the respondent explains that he went to the office of the Public Protector where he was requested to furnish them with an affidavit of the incident, which he did. He then sets out what had happened: ‘In response to my complaint, an advocate at the Public Protector’s office telephoned me to say that I should seek the help of a private lawyer. She said that I should bring a civil claim against the Department of Education. Before she told me this I did not know that there was anything I could do about what had happened. I thought that Mr Biyela had hit me by mistake and that that was the end of the matter.’ (My emphasis) [10] The affidavit by the attorney from which I have quoted above, illustrates that the relevant question of the identity of the appellant as the respondent’s debtor is not addressed. Instead the attorney focuses on allegations of wrongfulness that, in a long line of cases in this Court, has been held to be an irrelevant consideration when the provisions of s 12(3) of the Prescription Act are considered.4 [11] The respondent’s affidavit comes closer to addressing the real question. He states that an advocate in the office of the Public Protector advised him, in January 2006, to institute a civil claim against the appellant. Unfortunately the respondent’s legal representatives did not appreciate the significance of this fact. Its disclosure, evidently 3 The legal statements that minority prevented the running of prescription are incorrect, but for purposes of this judgment it is not necessary to explore. See ABP 4x4 Motor Dealers (Pty) Ltd v IGI Insurance Co Ltd 1999(3) SA 924 (SCA) para 15. 4 Gericke v Sack 1978 (1) SA 821 (A); Van Staden v Fourie 1989 (3) SA 200 (A) at 216B-F; Nedcor Bank Bpk v Regering van die Republiek van Suid-Afrika 2001 (1) SA 987 (HHA) para 8-11 and 13; Truter v Deysel 2006 (4) SA 168 (SCA) para 18; Minister of Finance & others v Gore NO 2007 (1) SA 111 (SCA) para 17; Yellow Star Properties 1020 (Pty) Ltd v MEC, Department of Development Planning and Local Government, Gauteng [2009] 3 All SA 475 (SCA) para 37. In Van Zijl v Hoogenhout [2004] 4 All SA 427 (SCA) this Court accepted the expert evidence of the mental, emotional and psychological condition of the victim of a sexual offence as proof that she did not know the identity of her creditor within the meaning of s 12(3) of the Prescription Act. Insofar as that case could conceivably be interpreted as an attempt to broaden the provision of s 12(3), that prospect was removed by the legislature by the introduction of s 12(4) of the Prescription Act by Act 23 of 2007 on 16 December 2007 which deals with the running of prescription in relation to sexual offences as in the case of Van Zijl. for the first time, informed the respondent of the identity of the appellant as the joint debtor of the teacher who injured him. He was a rural learner of whom it could not be expected to reasonably have had the knowledge that not only the teacher was his debtor, but more importantly, that the appellant was a joint debtor. Only when he was informed of this fact did he know the identity of the appellant as his debtor for the purposes of the provisions of s 12(3) of the Prescription Act. [12] Section 3(4)(b) of the Act requires a court to be ‘satisfied’ that the debt has not become extinguished by prescription, before it could grant an application for condonation. In Madinda v Minister of Safety and Security 2008 (4) SA 312 (SCA) para 8 this Court held: ‘The phrase “if [the court] is satisfied” in s 3(4)(b) has long been recognised as setting a standard which is not proof on a balance of probability. Rather it is the overall impression made on a court which brings a fair mind to the facts set up by the parties. See eg Die Afrikaanse Pers Beperk v Neser 1948 (2) SA 295 (C) at 297. I see no reason to place a stricter construction on it in the present context.’ I am satisfied that a careful scrutiny of the unchallenged facts put up by the respondent taken together with the circumstances in which he found himself give rise to the overall factual conclusion, fairly arrived at, that the condition in s 3(4)(b)(i) of the Act does not operate against the respondent. On the facts, the respondent, in consulting an advocate in the office of the Public Protector and his attorney during January 2006, should reasonably have become aware, for the first time, that he had a claim against the appellant. If prescription commenced running at that time it would, by 1 July 2007, when the respondent, ex lege, achieved majority, have already run for some eighteen months. By reason of s 13(1) of the Prescription Act, the respondent was entitled to the benefit of the full relevant period of prescription, ie three years, before his claim would be extinguished. That was until at least January 2009. Summons was in fact served on the appellant on 3 December 2008. [13] There was therefore no need for the court below to have entered into the involved investigation of the effect of s 17 of the Children’s Act, which changed the age of majority to 18 years, on the running of prescription in respect of the respondent’s claim.5 [14] The next enquiry is in terms of s 3(4)(b)(ii) of the Act, whether good cause exists for the failure by the respondent to have given timeous notice to the appellant. The notice was given after the issue of summons, on 7 May 2010, very much outside six months from the date on which the debt became due as required by s 3(2)(a) of the Act. [15] The provisions of s 3(4)(b)(ii) of the Act have been considered in several judgments.6 For present purposes it is not necessary to repeat all of the relevant considerations, but only to state that the court is to exercise a wide discretion;7 that ‘good cause’ may include a number of factors that is entirely dependent on the facts of each case;8 that the prospects of success of the intended claim play a significant role.9 [16] As has already been pointed out, the respondent was totally reliant on prompting by others with more insight to take steps to enforce his claim. The way in which he has been gravely let down in this regard, is a distinguishing feature of this case. The absence of the guidance of his legal guardian is glaringly evident. His own teacher led him to believe that nothing could be done about the incident. The respondent’s bona fide belief that his teacher’s explanation put an end to the matter was never challenged by the appellant. It serves to adequately explain the delay in any steps having been taken until January 2006. The respondent’s misfortune did not end when he consulted his attorney. After January 2006 the respondent’s attorney took reasonably prompt action in dispatching a notice, but, incorrectly to the Minister of Education and not the appellant. The court below, with ample justification, referred to the ‘devil’s brew of 5 The change in the age of majority occurred on 1 July 2007 when s 17 of the Children’s Act 38 of 2005 came into operation, simultaneous with the repeal of the Age of Majority Act 57 of 1972. 6 Madinda v Minister of Safety and Security 2008 (4) SA 312 (SCA); Minister of Safety and Security v De Witt 2009 (1) SA 457 (SCA); Minister of Agriculture and Land Affairs v C J Rance (Pty) Ltd 2010 (4) SA 109 (SCA); Premier, Western Cape v Lakay 2012 (2) SA 1 (SCA). 7 Madinda para 8; Lakay para 14. 8 Madinda para 10; Rance para 36. 9 Rance para 37. mistakes, failures and delays in the prosecution of the [respondent’s] claim’, caused by the respondent’s attorneys. [17] The court below excused the respondent for his attorney’s mistake in directing the notice to the Minister of Education and not the appellant, in the following words: ’However, as a result of an oversight on the [respondent’s] attorney’s part, notice, on the [respondent’s] behalf, was sent to the Minister of National Education and not to the Respondent. Smith’s affidavit reveals a devil’s brew of mistakes, failures and delays in the prosecution of [respondent’s] case. Clearly the oversight on her part arose from a failure to appreciate the fact that the Minister of Education and the [appellant] are two distinct organs of State. Mr Bedderson submitted that the [respondent’s] attorney’s failure cannot be attributed to the [respondent]. I agree that any failure on the part of the [respondent’s] attorney should not be held against the [respondent].’ [18] This conclusion does not specifically take account of the law relating to whether attorneys’ mistakes are to be attributed to their clients.10 There was, however, no need to approach the matter from this perspective. The facts referred to above provide ample indication that no blame for any delay or failure is to be attributed to the respondent. In the circumstances he is not to be treated as an ordinary litigant, he was a minor, who sought assistance in order to advance a legitimate claim. Those who had the responsibility of looking after his interests, failed him miserably. It is possible to prevent the prejudice consequent upon those failures to continue to adversely affect the respondent. [19] The appellant has never suggested that the respondent has not acted reasonably or has not been bona fide in his attempts to enforce a legitimate claim that arises from an infringement of his rights. The appellant has also not disputed, in these proceedings, the merits of the respondent’s allegations, which indicate strong prospects of success. 10 Saloojee & another NNO v Minister of community Development 1965 (2) SA 135 (A) at 141H; Ferreira v Ntshingila 1990 (4) SA 271 (A) at 281G. [20] In Minister of Safety and Security v De Witt 2009 (1) SA 457 (SCA) paras 5, 11 and 13 it was held that condonation in terms of s 3(4)(b) of the Act could appropriately be granted even if no notice was given, or notice was given after the service of summons, provided that the debt had not prescribed. [21] I am satisfied, for purposes of s 3(4)(b)(ii) of the Act that good case exists for the failure by the respondent to have given timeous notice to the appellant. [22] The last question to consider relevant to condonation arises from the provisions of s 3(4)(b)(iii) of the Act. The court below had to be satisfied that the appellant was not unreasonably prejudiced by the failure to give timeous notice. The facts limit the investigation to only two considerations. First, the complaint of prejudice raised by the appellant is general and unspecified in its terms and unrelated to any facts that indicate prejudice. Second, the respondent’s allegations that the teacher involved is now the principal of the same school and that pupils that were present during the incident, identified by name, are still available, are unchallenged. The absence of any prejudice is therefore illustrated by these facts. [23] Consequently, the conclusion by the court below to grant condonation to the respondent, is to be upheld. [24] The court below granted the respondent the costs of the application for condonation. At first glance that seems to be incongruous, bearing in mind the usual order made when a party seeks condonation for a procedural failure and the opposition to the application is not unreasonable. However in Lakay, Cloete JA explained the difference in reasoning as follows: ‘Ordinarily, in applications for condonation for non-observance of court procedure, a litigant is obliged to seek the indulgence of the court whatever the attitude of the other side and for that reason will have to pay the latter’s costs if it does oppose, unless the opposition was unreasonable. I doubt that this is the correct approach in matters such as the present, as an application for condonation under the 2002 Act has nothing to do with non-observance of court procedure, but is for permission to enforce a right, which permission may be granted within prescribed statutory parameters; and such an application is (in terms of s3(4)) only necessary if the organ of State relies on a creditor’s failure to serve a notice. In the circumstances there is much to be said for the view that where an application for condonation in a case such as the present is opposed, costs should follow the result.’11 I am in full agreement with this view and therefore see no reason to interfere with the costs order by the court below. [25] The appeal is dismissed with costs, including the costs of two counsel. _____________________ S SNYDERS Judge of Appeal 11 Para 25. APPEARANCES: For the Appellant: A K Kissoon-Singh SC Instructed by: The State Attorney, Kwazulu-Natal The State Attorney, Free State For the Respondent: M Pillemer SC (with him B Bedderson) Instructed by: Norman, Wink & Stephens, Cape Town McIntyre van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 01 June 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * A 15 year old rural learner suffered an injury to his eye. His injury occurred when his teacher beat a co-learner with a belt and the tip of the belt struck him on the side of his eye. This incident took place during June of 2003. Since then, he has been let down by various adults in bringing his claim to court, to the extent that he has been compelled to fight a procedural issue as far as this Court. The procedural issue raises the question whether his claim has become prescribed, if so, there would be no recourse for him in relation to the injury he suffered. The Supreme Court of Appeal decided the appeal in favour of the respondent and against the MEC for Education, KwaZulu-Natal. It found that the respondent had only learnt from the office of the Public Protector, when in January 2006 he informed it of his injury, that the MEC was a joint debtor along with the teacher who inflicted the injury. Only then was the fact of identity of the joint debtor known to him. Hence his claim had not become prescribed. The further result of the order made by the Supreme Court of Appeal is that the respondent would now be able to proceed with his pending claim in the high court against the MEC.

3533

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 724/2019 In the matter between: MATSHEPO RAMAKATSA FIRST APPELLANT THEMBA MVANDABA SECOND APPELLANT SHASHAPA JOSHUA MOTAUNG THIRD APPELLANT and AFRICAN NATIONAL CONGRESS FIRST RESPONDENT MEMBERS OF THE FREE STATE PROVINCIAL EXECUTIVE COMMITTEE OF THE AFRICAN NATIONAL CONGRESS SECOND RESPONDENT Neutral citation: Ramakatsa and Others v African National Congress and Another (Case No. 724/2019) [2021] ZASCA 31 (31 March 2021) Coram: SALDULKER, MOCUMIE and DLODLO JJA and CARELSE and WEINER AJJA Heard: 15 February 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email. It has been published on the website of the Supreme Court of Appeal and released to SAFLII. The date and time for hand-down is deemed to be 10h00 on 31 March 2021. Summary: Civil Procedure – appeal – lawfulness of the respondents’ Provincial Conference in the Free State in 2018 – whether the relevant audit requirements complied with, prior to the Provincial Conference - whether the necessary Branch General Meetings (BGMs) were held lawfully prior to the Provincial Conference – whether it was open to the appellants to attack BGMs which were not affected by the Court order of 15 December 2017 – whether the court below was correct in its application of Plascon Evans rule – whether the appellants established irregularities in light of the rebuttals by the respondents in their answering affidavits. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: Free State Division of the High Court, Bloemfontein (Jordaan J sitting as court of first instance): 1 Leave to appeal is granted and the costs occasioned by the application for leave to appeal (in this Court as well as in the Court below) are costs in the appeal. 2 The appeal is upheld with costs including costs occasioned by the employment of two counsel. 3 The order of the Court below is set aside and replaced by the following: 'It is declared that the Provincial Conference for the Free State Province that took place on 18 and 19 May 2018 was held in violation of the Court order of 29 November 2017 under case number 5942/2017 and that the said Provincial Conference, its decisions/resolutions and/or outcome are unlawful and unconstitutional.' 4 The declaration of invalidity mentioned in paragraph 3 of the order shall only be effective as from the date of the delivery of this judgment. ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Dlodlo JA (Saldulker and Mocumie JJA, Carelse and Weiner AJJA concurring): [1] The application before the Free State Division of the High Court, Bloemfontein (high court) concerned the lawfulness and validity of the Provincial conference of the African National Congress (the ANC) for the Free State which took place on 18 and 19 May 2018. Before this Court, it arises as an application for leave to appeal against a judgment of the high court,1 Jordaan J sitting as a court of first instance. The application for leave has been set down for oral argument and the parties directed to be prepared, if called upon to do so, to address the merits of the appeal. 1 In terms of s 17(2) (b) of the Superior Court’s Act 10 2013. [2] Before the high court, the appellants sought a declaration that the Provincial conference (the PC) for the Free State Province that took place on 18 and 19 May 2018 was held in violation of the court order dated 29 November 2017 under Free State case number 5942/2017 and that such PC, its decision/resolutions and/or outcome were unlawful and unconstitutional. The appellants also sought a declaration that the respondents acted in contempt of this same court order. [3] It is common cause that on 29 November 2017 the high court made an order that the PC of the ANC in the Free State was not to be held until certain Branch General Meetings (BGMs) had been held in a lawful manner that accords with the Constitution of the ANC. The members of the ANC had contended that their rights in terms of section 19 of the Constitution of the Republic of South Africa (the Constitution) had been infringed and that the respondents had breached the provisions of the ANC Constitution and National Guidelines which mirror the Constitution of the ANC on elections (the ANC 2018 Guidelines).2 The contention by the appellants was that as provided in the ANC Guidelines, at the heart of any lawfully convened conference of the ANC, whether at the Regional, Provincial or National level, is the basic requirement that delegates participating at such gatherings must have been elected at properly constituted BGMs. The rationale behind the contention was that if persons who participated at such conference as delegates, who had not been elected at properly constituted BMGs or if delegates who have been elected at properly constituted BGMs are denied such participation in a conference, any decision to hold such conference is invalid and the outcomes of such a conference are equally invalid and null and void. [4] On 29 November 2017, the full court (Van Zyl, Mathebula and Mhlambi JJ) granted an order in a judgment penned by Van Zyl J in favour of the appellants (the Van Zyl order). The substantive relief contained in the Van Zyl order was the following: 1. It declared that the BGMs that were conducted throughout the various regions in the Free State were irregular, unlawful, unconstitutional and/or in breach of the ANC Constitution. 2 As amended in 2018. 2. It declared that the decision, resolutions and outcomes of those 28 BGMs are null and void. 3. It directed that: ‘The Provincial conference of the ANC, Free State, scheduled for 1 to 3 December 2017, will be a nullity and is not to be held until the aforesaid meetings have been held in a lawful manner and in accordance with the Constitution of the ANC.’ [5] In complying with the Van Zyl order, out of the 50 BGMs affected, the respondents conducted a rerun of the 28 affected BGMs between 6 and 9 December 2017. This too, suffered from many of the same irregularities that had manifested themselves at the BGMs prior to the Van Zyl order. The respondents, despite this, proceeded to convene the PC on 10 and 11 December 2017. Notably, the PC took place a mere 5 days before the National conference held at Nasrec in Johannesburg. This prompted a second urgent application by the aggrieved members of the ANC including the first appellant, Ms Ramakatsa. [6] On 15 December 2017, the Free State High Court, with a full court presiding, (Molemela JP, Jordaan DJP and Reinders J) delivered a judgment penned by Molemela JP in favour of the aggrieved ANC members. The Molemela order: 1. Declared that the conference held on the 10th and 11th of December 2017 and the resolution and decisions taken at that conference were unlawful and void; 2. Declared that 14 BGMs and the decisions taken at those BGMs were unlawful and void. [7] These two adverse orders gave the first respondent, an opportunity to be alert and scrupulous in ensuring compliance with the law prior to holding the 2018 PC. The respondents convened and held the PC on 18 and 19 May 2018. This was despite a petition signed by a number of aggrieved members delivered to the offices of the first respondent on 14 May 2018. The petition highlighted the reasons why the PC ought not to proceed. In addition, the appellants’ attorney sent a letter on 16 May 2018 to every member of the Provincial Task Team in the Free State (the Free State PTT) explaining, inter alia, that inadequate notice was given for the PC. In this letter, it was also stated that the convening of the conference was in violation of the Van Zyl order. There was no meaningful response from the respondents. There was, however, a letter from two Free State PTT members who distanced themselves from the decision to hold a conference. It appears that the insistence on proceeding with the conference prompted the launch of the application that served before Jordaan J. On 21 February 2019, Jordaan J dismissed the application, holding inter alia, that the allegations contained in the appellants’ founding affidavit are based on information received from the relevant members of the specific wards named but no confirmatory affidavits were attached. It is so that the confirmatory affidavits were attached in the replying affidavit. However, Jordaan J, applying the well- known Plascon-Evans3 rule found against the respondents. [8] The high court isolated ward 3 in Lejweleputswa, recording that the appellants’ alleged that no further meetings were scheduled or held after the Molemela order. On the other hand, (so the Jordaan J judgment went on), the respondents, alleged that successful BGMs were scheduled and held on 19 February 2018. The high court remarked that it was only in reply that the appellants averred that the meeting was unlawful in that 31 of the attendees were not members in good standing. According to the high court, the respondents made various attempts to schedule and hold reruns of the BGMs in respect of all 14 of the wards affected by the Molemela order. Some BGMs were successful and delegates were elected, others did not reach a quorum resulting in no delegates being elected whilst others were disrupted by disgruntled members. The allegations were found by the high court to be supported by documentary evidence. It found that the appellants’ allegations to the effect that no additional meetings were held in some of the affected wards after December 2017 were conclusively gainsaid. [9] The high court, having found that the respondents went to great lengths to comply with the court order concluded: 3 Plascon-Evans Paints (TVL) Ltd v Riebeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 6341. ‘There is no basis on which the allegations of the respondents can be found to be baseless, patently false, fictitious or unsubstantiated. Their material allegations are to a large extent substantiated by documentary evidence.’ The high court concluded its judgment as follows: ‘The dispute raised by the respondents are real and material. To the contrary, material allegations made by the applicants were clearly unfounded, if not patently false. The main thrust of the applicants’ case related to the alleged non-compliance with the first order. In that regard it stated that only a few of the affected branches held reruns of the BGM’s and then only in May 2018. That is clearly far from the truth and in stark contrast with reality.’ Failure to annex confirmatory affidavits to the founding papers must be put to rest. It is clear in paragraph 42 of the founding affidavit that the applicants intended to attach such confirmatory affidavits. The omission was clearly not deliberate but it must have been done inadvertently. These affidavits surfaced in the replying affidavit. Despite the omission, the respondents comprehensively dealt with those issues which were subject to such confirmatory affidavits. They were not prejudiced by the failure to file them simultaneously with the founding papers. This was repeated in the oral argument before this Court on the day of the hearing. Counsel for the first respondent confirmed that there could be no prejudice.4 It is trite that any applicant relying on information gathered from another source, must always file a confirmatory affidavit. In this matter no prejudice was caused to the respondents at all. When the matter was argued before the high court, such affidavits had become available. [10] Turning the focus to the relevant provisions of the Superior Courts Act5 (the SC Act), leave to appeal may only be granted where the judges concerned are of the opinion that the appeal would have a reasonable prospect of success or there are compelling reasons which exist why the appeal should be heard such as the interests of justice.6 This Court in Caratco7, concerning the provisions of s 17(1)(a)(ii) of the SC Act pointed out 4 The next day the first respondent filed a notice indicating that the respondents would be prejudiced. Not only was this raised late but also irregularly. Thus, the belated cry of prejudice could not be taken into account in coming to the decision this Court came to. In any event that was not the sole reason for the decision this Court came to ultimately. 5 Section 17(2)(d) Act 10 of 2013. 6 Nova Property Holdings Limited v Cobbett & Others [2016] ZASCA 63: 2016 (4) SA 317 (SCA) para 8. 7 Caratco (Pty) Ltd v Independent Advisory (Pty) Ltd [2020] ZASCA 17; 2020 (5) SA 35 (SCA). that if the court is unpersuaded that there are prospects of success, it must still enquire into whether there is a compelling reason to entertain the appeal. Compelling reason would of course include an important question of law or a discreet issue of public importance that will have an effect on future disputes. However, this Court correctly added that ‘but here too the merits remain vitally important and are often decisive’.8 I am mindful of the decisions at high court level debating whether the use of the word ‘would’ as opposed to ‘could’ possibly means that the threshold for granting the appeal has been raised. If a reasonable prospect of success is established, leave to appeal should be granted. Similarly, if there are some other compelling reasons why the appeal should be heard, leave to appeal should be granted. The test of reasonable prospects of success postulates a dispassionate decision based on the facts and the law that a court of appeal could reasonably arrive at a conclusion different to that of the trial court. In other words, the appellants in this matter need to convince this Court on proper grounds that they have prospects of success on appeal. Those prospects of success must not be remote, but there must exist a reasonable chance of succeeding. A sound rational basis for the conclusion that there are prospects of success must be shown to exist.9 [11] The importance of this matter compels the conclusion that leave to appeal should be granted. One must perhaps emphasise that no doubt can exist that the ANC just like other political parties, is under an obligation to act in accordance with its own Constitution and that a failure to do so raises matters of concern in terms of the SA’s Constitution. In this regard, the Constitutional Court made it plain in Ramakatsa 1:10 ‘[16] I do not think the Constitution could have contemplated political parties could act unlawfully. On a broad purposive construction, I would hold that the right to participate in the activities of a political party confers on every political party the duty to act lawfully and in accordance with its own Constitution. This means that our Constitution gives every member of every political party the right to exact compliance with the Constitution of a political party by the leadership of that party. The case does raise a constitutional matter.’ 8 Ibid, para 2. 9 See Smith v S [2011] ZASCA 15; 2012 (1) SACR 567 (SCA); MEC Health, Eastern Cape v Mkhitha [2016] ZASCA 176 para 17. 10 Ramakatsa and Others v Magashule and Others [2012] ZACC 31; 2013 (2) BCLR 202 (CC) para 16. [12] It is prudent at this stage to set out what I regard as foundational to the dispute in this matter. Section 19 of the SA Constitution does not prescribe how members of a political party should go about in exercising their right to participate in the activities of their choice of party. This is not regulated by legislation at all. Talking to this, the Constitutional Court in Ramakatsa 111 stated as follows: ‘Section 19 of the Constitution does not spell out how members of a political party should exercise the right to participate in the activities of their party. For good reason this is left to political parties themselves to regulate. These activities are internal matters of each political party. Therefore, these parties are best placed to determine how members would participate in internal activities. The various Constitutions of political parties are instruments which facilitate and regulate participation by members in the activities of a political party.’ [13] It is the ANC Constitution that regulates and facilitates how its members may participate in the internal activities of the party. Rule 17 of the ANC Constitution is of importance and is set out hereunder. ‘Rule 17 Provincial Conference 17.1 Subject to the decisions of the National Conference and the National General Council, and the overall guidance of the NEC, the Provincial Conference shall be the highest organ of the ANC in each Province. 17.2 The Provincial Conference shall: 17.2.1 Be held at least once every 4 (four) years and more often if requested by at least one third of all Branches in good standing in the Province. 17.2.2 Be composed of: (i) Voting delegates as follows: . . . (ii) Non-voting delegates . . . Provincial Conference shall: 17.2.2.5 Determine its own procedures in accordance with democratic principles and practices; 11 Ibid para 73. 17.2.2.5 Vote on key questions by secret ballot if at least one third of the delegates at the Provincial Conference demand it; and 17.2.2.7 . . . 17.3 The Provincial Conference shall: 17.3.1 Promote and implement the decisions and policies of the National Conference, the National General Council, the NEC and the NWC; 17.3.2 Receive and consider reports by the Provincial Executive Committee, which shall include the Chairperson’s address, the Secretary’s report, which shall include a report on the work and activities of the ANC Veterans’ League, the ANC Women’s League and the ANC Youth League in the Province, and the Treasurer’s report; 17.3.3 Elect the Provincial Chairperson, Deputy Chairperson, Secretary, Deputy Secretary, Treasurer and the 30 (thirty) additional members of the Provincial Executive Committee, who will hold office for four (4) years. The Provincial Secretary shall be a full-time functionary of the Organisation; 17.3.4 Carry out and develop the policies and programmes of the ANC in the Province; 17.3.5 . . . 17.3.6 . . . 17.4 A member elected to the PEC shall resign from any position held in a lower structure in the ANC.’ (Emphasis added.) [14] Rule 17.2 provides in peremptory terms (it uses the word ‘shall’) and it makes provisions which are two-fold, namely: 1. That a provincial conference shall be held at least once every four years; and 2. A Provincial conference shall be held more often if requested by at least one third of all branches in Province. It is necessary to mention that the ANC Constitution makes provisions that the ANC from time to time should make guidelines and these form an integral part of the Constitution. In this matter the applicable ANC Guidelines and Provincial conferences are dated April 2018. (Emphasis added.) [15] Numerous complaints were made by the appellants which they contend were not addressed prior to the holding of the PC. The appellants contended that the holding of the PC was not, for instance, preceded by an audit process of all branches and membership. I undertake to return to the auditing complaint later in this judgment. The high court isolated ward three Lejweleputswa and dealt with what took place there. It did not deal with the numerous other wards that document irregularities. [16] One cannot turn a blind eye to what appears to have occurred in the following wards. In Thabo Mofutsanyana ward 5 (Maluti-A-Phofung), the respondents made a single attempt to rerun the BGMs and that was only a mere two days before the holding of the PC. Clearly, there would have been no room for any dispute resolution provided for in Appendix 4 of the ANC Constitution prior to the holding of the PC. As it appears, no formal attendance register was used. Members’ names were entered in manuscript on a blank piece of paper. There was no deployee to oversee the meeting. According to the second respondent an attempt was made to call a deployee to attend. The point is that in this ward, even if the BGM was quorate, the use of an informal and somewhat irregular register rendered the BGM unlawful. How could anyone ascertain whether the persons who registered were members in good standing? This branches’ BGM was set aside by both the Van Zyl and Molemela orders on different dates. It is beyond question that the respondents had a duty to ensure that it held a lawful BGM before proceeding to convene the Provincial conference. [17] According to the second respondent, in ward 6 in the region of Thabo Mofutsanyana, a provincial delegate was elected at a lawfully conducted BGM. It is apparent though from the attendance register attached to the second respondent’s answering papers that no delegates ought to have been appointed from this branch. I say so because 28 persons who attended the BGM could not be considered to be members in good standing based on the attendance register itself. In truth, the meeting was not quorate and no delegate could and/or should have been elected. To illustrate, Mr Lucky Hadebe listed as number 6 on the attendance register last paid his membership in the amount of R40.00 on 15 November 2015. Mr Hadebe was not a fully paid up member and was therefore not a member in good standing. Despite this apparent glaring non- compliance, Mr Hadebe had attended the BGM and on the common cause facts and as evidenced by his signature on the attendance register, voted whoever was voted into power at that BGM. [18] Ward 11 in the Thabo Mofutsanyana region was attended by 107 persons at the BGM who were not members in good standing because of their membership having expired. If one deducts the 107 persons whose membership had expired from the total number of persons who attended the meeting (195) it is itself evident that the meeting was not quorate. The quorum required 174 attendees but only 88 paid up actual members appear to have been in attendance. An insufficient number of members in good standing attended to quorate the conference. Needless to mention that despite this a delegate was elected. That this rendered the BGM and its outcome unlawful is beyond question. [19] In ward 19 in the region of Thabo Mofutsanyana, a complaint was raised that unknown persons had signed next to the names of certain members on the attendance register. When this was brought to the attention of the deployee, complaining members were accused of being disruptive. The second respondent in its answering affidavit did not deny this irregularity. Needless to mention that the conceivable dispute of fact regarding this irregularity did not arise. Similarly, in ward 3 in the region of Lejweleputswa, according to the attendance register which was attached to the second respondent’s answering affidavit 31 persons attended the BGM despite the fact that they were not members in good standing. If one deducts the 31 persons, the number of members in good standing would only be 72, which falls below the quorum threshold. Clearly, no delegate could or should have been appointed. Therefore, the appointment of a delegate from this BGM was unlawful because the relevant BGM was not quorate. [20] Ward 7 in the region of Lejweleputswa bears mention. The complaint in this specific ward is about the inadequate notification of the BGM. According to the attendance register which is outdated, this branch has 600 members. At the BGM convened a year earlier on 14 May 2017, the meeting was quorate with a total of 302 members who had attended. In contrast, the BGM that was held on 13 May 2018, only saw a total of 19 members in attendance. Nineteen members is approximately 3% of the branch’s total membership. One immediately asks oneself what the possible reason is for the exceptionally low attendance. These numbers support the contention that the members were not invited. The second respondent does not, in its answering affidavit, allege that members were notified of the BGM held on 13 May 2018. It does not appear that an attempt was made to lawfully convene a BGM for this affected branch. In the founding papers, it was alleged that no deployee was present on 13 May 2018. The second respondent, represented by the deponent to the answering affidavit, the Secretary of the ANC, Mr Ace Magashule, confirmed this and stated that ‘he did not have to come, as the meeting could not proceed’. The ANC Guidelines make it clear that a deployee ought to be present at any proposed BGM where elections of a delegate are to take place. The attendance register attached to the second respondent’s answering affidavit was not signed by the branch chairman nor the Secretary as required in terms of the ANC Guidelines.12 This was certainly an irregularity. [21] At least eight of the 28 BGMs identified in the Van Zyl order did not take place lawfully or at all. On this basis alone, the PC could not lawfully proceed. The high court upheld the contention that the appellants were precluded from challenging some of these BGMs because they were not the subject of a challenge in the proceedings before Molemela JP. I have mentioned above that the Van Zyl order dealt with 28 branches. Of course, it is so that only 17 of the 28 were challenged in the proceedings before Molemela JP. This, however, could not be construed to mean that the BGMs of the other 11 branches had been lawfully held. Failure by one group of applicants to challenge the 11 branches before Molemela JP cannot preclude a different group of applicants from challenging them in the present proceedings. [22] Having identified the areas of concern above, I deem it necessary to return to the issue of audits. The ANC Guidelines applicable in this matter make it plain that ‘national 12 Guidelines for ANC Conferences para 11. conducts an audit of branches and membership, based on a cut-off date that is not more than nine months before the date of the Provincial and Regional conference, to determine the delegation to the conferences’.13 The appellants have made it clear in the founding papers that the audit of membership is critical in that a member who is not in good standing is disqualified from participating in the affairs of the ANC. There can be no dispute that the Guidelines of the ANC prescribe that for a valid conference to be held, it must be preceded by an audit which should be conducted within nine months of the date of the conference. It would appear that the last audit of the Free State ANC was conducted during April 2017. This, certainly is more than nine months prior to the conference which was held on 18 and 19 May 2018. [23] Clause 4 and 5 of the ANC 2018 Guidelines make it plain what the procedure is which must be followed before the holding of all PCs or Regional Conferences (RCs). The following procedure must be followed. ‘1. An audit of branches and members must be conducted and that must be based on a cut-off date that is not more than 9 months before the date of the Provincial or Regional conference; 2. The outcome of the audit is circulated to Regional Executive Committees and the individual branches. 3. All branches must convene BGMs as to, inter alia, nominate candidates for the Provincial Executive Committee. 4. There must be notice of the date, venue, programme and draft credentials of the conference which must be circulated to the branches. 5. It is only at this point that a Provincial conference can be held. The audit requirement cannot be ignored or postponed because absent audit there can be no legitimate Provincial or Regional conference. It determines the status of participants because it is only members in good standing that must attend and participate in the affairs of the ANC. The same applies to a branch which is not in good standing. Such a branch cannot be represented at a conference.’ 13 Guideline for ANC Conferences para 5(a). [24] The second respondent’s response in the above regard is that a membership verification audit was done by the National Audit Team in February 2018 in respect of 14 wards that needed to be rerun. The approach was of course unlawful in that it says in simple terms, save for the 14 branches in respect of which the audit was done in February 2018, no audit was apparently conducted in respect of the other BGMs which deployed delegates to the PC. There is a contradiction between what the respondents contend in this regard. The first respondent asserts that the PC was a continuation of the conference that was declared null and void and that ‘the last audit was done [on] 10 December 2017’. The latter’s assertion contradicts the second respondent’s contentions that a verification/audit was conducted in February 2018. The first respondent referred to an annexure which did not exist. It emerged during arguments before the high court what the correct annexure was, but that annexure too cannot serve as objective evidence that an audit was conducted in December 2017 and in respect of which branch it related to. The document is titled ‘ANC Free State Provincial Summary Report’. It is not dated and it hardly makes it clear when and where such audits were conducted and for which branches. Importantly, it fails to establish that an audit of all the necessary branches was conducted during December 2017. [25] In passing, one must mention that both respondents’ versions are undermined by the attendance registers. These registers are attached to the second respondent’s answering affidavit. These attendance registers show that in respect of all branches the last audit was conducted in April 2017. Therefore, the required audit was conducted more than nine months before the PC and contrary to the assertion that an audit was conducted during February 2018. The failure of the respondents to respond squarely and with sufficient details to allegations made by the appellants, the contradictions between the two versions presented by the respondents, and the effect of the attendance registers leads to the ineluctable conclusion that there has been no compliance with the peremptory audit requirement. [26] The declaration of nullity of the PCs and RCs contained in both the Van Zyl and Molemela orders required the Provincial Executive (the PEC) of the ANC to start the whole process de novo. In doing so, the second respondent had to fully comply with the Constitution of the ANC read together with the applicable ANC 2018 Guidelines. There are about 309 branches in the Free State Province. They all had to be audited anew. The argument that only 28 mentioned in the Van Zyl order had to be audited is without merit. The PC had to be held de novo and all prescripts of the ANC Constitution had to be complied with as if no attempt to hold a conference ever took place. The 2018 ANC Guidelines have binding force. There can be no dispute in this regard. The Constitutional Court in Ramakatsa 114 talked to this: ‘[79] Before demonstrating that some of the irregularities raised were established it is necessary to outline the nature of the legal relationship that arises from membership of the ANC. At common law a voluntary association like the ANC is taken to have been created by agreement as it is not a body established by statute. The ANC’s Constitution together with the audit guidelines and any other rules collectively constitute the terms of the agreement entered into by its members. Thus the relationship between the party and its member is contractual. It is taken to be a unique contract.’ [27] The importance of auditing is underscored by the fact that it ensures that the participants in the ANC process are fully paid up members of the ANC who can participate in the elections and vote for those they want to lead them and not non-members. Thus, prior to the holding of the PC an audit process of all branches and membership must be conducted. The question remains therefore whether the delegates to the elective PC had been properly accredited and audited as required in terms of the Constitution of the ANC and its Membership Audit Guidelines. As demonstrated above, the answer is a resounding no. It is trite that in motion proceedings, the proper approach to determine whether an applicant has made out a case for the relief sought, in a case where some of the allegations are disputed by the respondents, is that the applicants would succeed if the admitted facts it alleged together with the facts alleged by the respondent justify the relief sought.15 The audit Guidelines constitute an integral part of the governance 14 Ramakatsa para 79. 15 Plascon-Evans Paints (TVL) Ltd v Van Riebeck Paints (Pty) supra fn 2. instrument of the ANC. A mandatory pre-audit must be conducted by the PEC or RC in preparation for the National audit which is conducted by the National Audit Team in each province within a cut-off date. [28] The respondents complain bitterly that the appellants rushed to court before exhausting all available internal remedy mechanisms within the ANC as prescribed in the Constitution of the ANC. It is correct that appendix 4 thereof provides for a dispute resolution procedure by means of which a branch, a region or sub-region may lodge a dispute and have it resolved by the National Dispute Resolution Committee and ultimately by the Appeal Committee. It is not my aim to devote too much time to this concern by the respondents. It bears mention that the aggrieved members sent a complaint to the PC held on 18 and 19 May 2018 but were simply ignored. It suffices to say that members of the ANC are members of the community, citizens of this country. Each member of the community who is aggrieved is constitutionally entitled to approach the courts. The first respondent did not file its heads of argument in terms of this Court’s rules. When this concern was raised by the presiding judge, the appellants had abandoned the prayer for the contempt of court. There has been an inordinate delay in prosecuting this matter. The PEC has been running the affairs of the ANC in the Free State for a considerable period. It must have taken numerous resolutions/decisions relating to governance issues in the Province. It therefore would be prudent that an order should be made so as to avoid the Free State ANC from being thrown into chaos. [29] The following order is made: 1 Leave to appeal is granted and the costs occasioned by the application for leave to appeal (in this Court as well as in the Court below) are costs in the appeal. 2 The appeal is upheld with costs including costs occasioned by the employment of two counsel. 3 The order of the Court below is set aside and replaced by the following: 'It is declared that the Provincial Conference for the Free State Province that took place on 18 and 19 May 2018 was held in violation of the Court order of 29 November 2017 under case number 5942/2017 and that the said Provincial Conference, its decisions/resolutions and/or outcome are unlawful and unconstitutional.' 4 The declaration of invalidity mentioned in paragraph 3 of the order shall only be effective as from the date of the delivery of this judgment. _____________________ DV Dlodlo Judge of Appeal APPEARANCES: For the Appellants: S Budlender SC (with him K Magan) Instructed by: Selepe Attorneys, Johannesburg For the Respondents: Semenya SC and WR Mokhare SC Instructed by: Moroka Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 31 March 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Ramakatsa and Others v African National Congress and Another (Case No. 724/2019) [2021] ZASCA 31 (31 March 2021) Today the Supreme Court of Appeal (SCA) handed down judgment upholding the appeal against an order of the Free State Division of the High Court, Bloemfontein (high court. The order of the high court was set aside and replaced with an order declaring the African National Congress (ANC) Provincial Conference (PC) for the Free State of 18 and 19 May 2018 to have been held in violation of the court order of 29 November 2017 and as a result declared its decisions/resolutions and/or outcome are unlawful and unconstitutional. The issue before the SCA was whether a declaration should be granted that the PC for the Free State Province that took place on 18 and 19 May 2018 was held in violation of the court order and that such PC, its decision/resolutions and/or outcome were unlawful and unconstitutional. Before this Court, the appellants contended that numerous complaints were raised which were not addressed prior to the holding of the PC. The appellants contended, pertinently, that the holding of the PC was not, for instance, preceded by an audit process of all branches and membership as required. Several of the wards conducted unlawful BGMs. In this regard the SCA held that the ANC Guidelines applicable in this matter made it plain that the national audit team conducted an audit of branches and membership, based on a cut-off date that was not more than nine months before the date of the provincial and regional conferences, to determine the delegation to the conferences. Further, and in consequence of the above, the SCA held that the importance of auditing was underscored by the fact that it ensured that the participants in the ANC process were fully paid up members of the ANC who could participate in the elections and vote for those they wanted to lead them and not non-members. The SCA held it was clear that the delegates to the elective PC had not been properly accredited and audited as required in terms of the Constitution of the ANC and its Membership Audit Guidelines; and concluded that the audit guidelines constituted an integral part of the governance instrument of the ANC. A mandatory pre-audit had to be conducted by the Provincial Executive or Regional Executive in preparation for the National audit which was then conducted by the National Audit Team in each province within a cut-off date ~~~~ends~~~~

83

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 6/2017 In the matter between: DIRECTOR OF PUBLIC PROSECUTIONS, GAUTENG APPELLANT and MORNE GROBLER RESPONDENT Neutral Citation: Director of Public Prosecutions, Gauteng v Grobler (6/2017) [2017] ZASCA 82 (2 June 2017). Coram: Lewis, Petse and Mathopo JJA and Gorven and Mbatha AJJA Heard: 2 May 2017 Delivered: 2 June 2017 Summary: Appeal by Director of Public Prosecutions: s 311 of the Criminal Procedure Act 51 of 1977: appeal against the decision of a Provincial or Local Division on appeal to it competent before this court only on a question of law: the High Court’s finding that a complainant below the age of 12 years acquiesced in a sexual act defined as rape and then considered this as a mitigating factor in sentencing, is a question of law: appeal upheld and matter remitted. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Preller J and Kganyago AJ, sitting as court of appeal): 1 The appeal is upheld. 2 The question of law raised by the State is determined in its favour. 3 The sentence imposed by the High Court is set aside. 4 The matter is referred back to the High Court for the appeal on sentence to be dealt with in accordance with the principles set out in this judgment. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Petse JA (Lewis and Mathopo JJA and Gorven and Mbatha AJJA concurring): [1] This is an appeal by the Director of Public Prosecutions, Gauteng, arising from what it submits is a question of law in relation to sentence, decided in favour of the respondent, which informed the sentence imposed by the Gauteng Division of the High Court, Pretoria (Preller J and Kganyago AJ), sitting on appeal from a judgment of the Regional Court, Louis Trichardt, Limpopo. I shall refer to the court as the High Court for convenience. This court granted special leave to appeal against sentence.1 It is more properly an appeal under s 311 of the Criminal Procedure Act2 1 See Director of Public Prosecutions, Gauteng Division, Pretoria v Moloi (1101/2015) [2017] ZASCA 78 (2 June 2017), paras 70-71, in which this court by majority held that an appeal under s 311 does not require special leave to appeal. And that any order granting special leave to appeal is neither necessary nor competent. Since the appeal is brought in terms of s 311 of the CPA leave should not have been sought nor granted. 2 Criminal Procedure Act 51 of 1977. (the CPA) and was argued on that basis. It concerns the question whether imputing consent to a sexual act (defined as rape) by a child under the age of 12 years for purposes of sentence is competent. [2] The respondent, Mr Morne Grobler, was arraigned in the regional court on the following seven charges: (a) three counts of rape in contravention of s 3 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act 32 of 1997 (the Sexual Offences Act); (b) using a child for child pornography in contravention of s 20(1) of the Sexual Offences Act (count 4); (c) exposing, displaying or causing the exposure or displaying of child pornography in contravention of s 19(a) of the Sexual Offences Act (count 5); (d) sexual grooming of children in contravention of s 18(2)(a) of the Act (count 6); and (e) possession of a film or publication containing child pornography in contravention of s 27(1)(a)(i) of the Films and Publications Act 65 of 1996 (the Films Act) (count 7). In the regional court, he pleaded not guilty to all seven counts. [3] Briefly, the background to which the charges relate is as follows. The respondent and the complainant’s mother, AG, married each other during September 2006. The complainant, CC, who was ten years old at the time, and her younger brother, TT, lived with the respondent and their mother at the Air Force Base in Louis Trichardt. The complainant and her brother were AG’s children from a previous relationship. All of the offences in respect of which the respondent was charged were alleged to have been committed during the period spanning from September to November 2009 at the family home on various occasions when the complainant’s mother was not at home. The allegations against the respondent, broadly stated, were that on various occasions during this period, the respondent, unlawfully and intentionally, penetrated the complainant’s vagina, anus and mouth with his penis. And that he took photographs of the sexual acts with his cellular phone, thus creating pornographic material, and transferred and stored these on the family computer. It was also alleged that he had shown the complainant pornographic images of him and her mother having sex, and that he sexually groomed the complainant. [4] The complainant’s mother testified at the trial that on the morning of 2 November 2009 whilst she was scrolling through the family computer she came across pornographic images of adult women and later stumbled upon photographic images of the respondent engaged in sexual acts with the complainant. This fortuitous discovery set the wheels of justice into motion and culminated in the prosecution of the respondent on the seven charges mentioned earlier. It is, however, not necessary in my view to recapitulate all the evidence led at the trial. Rather, this judgment will focus on a single issue decisive of this appeal, namely, whether the appeal is one based on a question of law: that the High Court wrongly took into account that the complainant could have consented to the sexual act (defined as rape) when she was but ten years old. I shall deal with the facts underlying the application of the wrong principle more fully below. [5] At the conclusion of the trial the respondent was convicted on six counts, but was acquitted on count 6. After hearing both the defence and the State on mitigation and aggravation of sentence, the regional magistrate sentenced the respondent, in terms of s 513 of the Criminal Law Amendment Act 105 of 1997, to life imprisonment on each of the three rape counts. The three remaining counts (counts 4, 5 and 7) were treated as one for purposes of sentence and a sentence of 10 years’ imprisonment was imposed. In addition, the regional magistrate directed that the respondent’s particulars be recorded in the sexual offences register in accordance with s 50(2)(a)4 of the Sexual Offences Act. [6] It bears mention that the sentences of life imprisonment imposed in respect of counts 1 to 3 were in consequence of the finding by the regional magistrate that there were no substantial and compelling circumstances present. Thus, it held that a departure from the mandatory sentence of life imprisonment was not justified. 3 Section 51 (1) provides: ‘Notwithstanding any other law, but subject to subsections (3) and (6), a regional court or a High Court shall sentence a person it has convicted of an offence referred to in Part I of Schedule 2 to imprisonment for life.’ Those subsections (s 51(3)(a) and (6)) in turn provide for departures from the prescribed sentence if a court is satisfied that substantial and compelling circumstances exist which justify the imposition of a lesser sentence than the sentence prescribed and where the accused was under the age of 16 years at the time of the commission of an offence (in terms of the old s 51(6)). 4 Section 50(2)(a) provides: ‘A court that has in terms of this Act or any other law— (i) convicted a person of a sexual offence against a child or a person who is mentally disabled and, after sentence has been imposed by that court for such offence, in the presence of the convicted person; must make an order that the particulars of the person be included in the Register.’ [7] Aggrieved by his conviction and resultant sentences, the respondent unsuccessfully applied for leave to appeal to the North Gauteng High Court, Pretoria in terms of s 309B of the Criminal Procedure Act (the CPA). However, the respondent successfully petitioned the High Court for leave to appeal in terms of s 309C of the CPA. [8] The respondent was successful in his appeal to the High Court. As to the convictions, the High Court found that in relation to counts 4, 5 and 7 and having regard to the conspectus of the evidence led at the trial, these charges had been proved beyond a reasonable doubt. It then proceeded to consider whether the rape convictions on counts 1, 2 and 3 were sustainable on the evidence. In regard to counts 2 and 3, the High Court said that on the complainant’s evidence, which was corroborated by the medical evidence, she was neither anally nor vaginally penetrated by the respondent. The High Court decried the fact that no medical evidence by the doctor who had examined the complainant was presented at the trial to substantiate these counts. Relying on this court’s judgment in S v MM [2011] ZASCA 5; 2012 (2) SACR 18 (SCA) (para 24), it consequently set aside the respondent’s convictions on these two counts. It substituted the two convictions with sexual assault in contravention of s 5(1) of the Sexual Offences Act.5 [9] In the event the High Court concluded that although the complainant’s evidence – approached with the necessary caution, given her tender age and the fact that in relation to the actual sexual acts she was a single witness – was not without blemish, it was nevertheless to be preferred to that of the respondent. Accordingly, it found that the regional magistrate’s rejection of the respondent’s version as false beyond a reasonable doubt could not be faulted. [10] With regard to the sentence on the conviction on rape, count 1 (namely, the intentional and unlawful insertion by the respondent of his penis in the complainant’s mouth), it is apposite to make reference to some of the passages in the High Court’s judgment which bear directly on the crucial issue raised in this appeal. When analysing the State’s evidence in relation to this count, the High Court said: 5 In terms of this provision, ‘a person ('A') who unlawfully and intentionally sexually violates a complainant ('B'), without the consent of B, is guilty of the offence of sexual assault.’ ‘The first thing that struck me about the evidence of the complainant’s mother was that she never mentioned finding any indication of distress or trauma about the incidents on the part of the victim when she asked her about what the appellant had done to her. She testified in chief that she had asked her child whether the appellant had touched her inappropriately, which she confirmed.’ [11] The court then proceeded to say the following: ‘In her evidence the complainant stated that she participated in these activities with the appellant because he had told her that there would be trouble if she did not do as he told her. It is not clear on her evidence that she acted out of fear or that the threat was repeated on any subsequent occasion. It is in any event not her version that there was any form of compulsion on every occasion. Apart from the alleged threat there is no indication in her evidence of how she felt about the incidents – no expression of fear, disgust, embarrassment or any other negative emotion. That also appears from the two photographs in the exhibits on which her facial expression can be seen and which show no sign of fear, anguish, embarrassment, disgust or any other negative emotion. Based on the above evidence there is a strong suspicion that the victim was not an unwilling participant in the events. I am fully aware that she was at the time only ten years old and that the absence or otherwise of her consent is irrelevant as an element of the commission of the offence. It must, however, be an important factor in considering an appropriate sentence.’ (Own emphasis.) [12] When the High Court said that the complainant was under the age of ten years at the time of the rape – thus under the age of 12 years – and that ‘the absence or otherwise of her consent [was] irrelevant as an element of the commission of the offence’ it obviously had in mind s 57(1) of the Sexual Offences Act. The section reads, in material parts: ‘Inability of children under 12 years and persons who are mentally disabled to consent to sexual acts.—(1) Notwithstanding anything to the contrary in any law contained, a male or female person under the age of 12 years is incapable of consenting to a sexual act. (2) . . . ’ [13] Having disposed of the appeal against the convictions, the High Court proceeded to deal with the appeal against the sentences. First, it noted that the regional magistrate had found that there were no substantial and compelling circumstances justifying a departure from the mandatory sentence ordained by law. It also took cognisance, as the trial court had done, of both the prevalence and seriousness of the crime of rape and its traumatic consequences for its victims and the fact that the respondent had betrayed the complainant’s trust. It nonetheless lamented the fact that the respondent’s personal circumstances – which it enumerated – were in its view not accorded sufficient weight in determining an appropriate sentence. On this score it will be recalled that in dealing with count 1 the High Court had indicated that the fact that the complainant had been a willing party to the sexual act would be a mitigating factor in relation to sentence. The High Court concluded that the trial court had overlooked material factors and that the sentences were therefore not appropriate ones. [14] The High Court then proceeded to consider what sentences to impose on the respondent in substitution of those imposed by the trial court. In relation to the inquiry as to whether or not substantial and compelling circumstances existed, it said: ‘The personal circumstances of the appellant, the fact that he is a first offender who spent 18 months in custody awaiting trial, the nature of his offence and the limited effect that it had on the complainant and the serious consequences that his offence already had for himself, cumulatively constitute substantial and compelling circumstances that justify the imposition of a lesser sentence.’ It then imposed a globular sentence of ten years’ imprisonment, treating all counts as one for purposes of sentence, five years of which were conditionally suspended. [15] Dissatisfied with the sentence imposed, particularly in respect of count 1, which it believed to be disproportionate to the gravity of the rape perpetrated by the respondent – and other issues which are no longer material for present purposes – the State applied for and was granted special leave to appeal against sentence to this court. [16] The right of the State to appeal under s 311 is expressly regulated by the CPA and the Superior Courts Act 10 of 2013 therefore finds no application.6 As already mentioned, the State appeals on the basis that a question of law was decided in favour of the respondent which formed the foundation for the sentence imposed by the High Court on appeal to it. The High Court accordingly substituted sentences for those imposed by the trial court. Unlike convicted persons, such a right of appeal relating to a sentence imposed by a High Court sitting as a court of appeal arises only where the High Court has given a decision in favour of the convicted person on a question of law. [17] In its heads of argument, the State relied on four grounds of appeal which it contended constitute questions of law. It argued that, if this court determines any one of the questions of law upon which it relies in its favour, it would have jurisdiction to entertain this appeal.7 But, at the hearing before us, the State expressly disavowed reliance on three of its grounds of appeal. It persisted in the remaining ground, that is whether the High Court wrongly took into account its own inferences that the complainant had consented to the sexual acts in question in imposing sentence. This appeal by the State is therefore brought in terms of s 311(1) of the CPA. Accordingly, this court can only enter into the merits of the appeal if it is satisfied that the ground of appeal relied upon by the State involves a question of law. [18] Section 311(1) provides: ‘(1) Where the provincial or local division on appeal, whether brought by the attorney-general or other prosecutor or the person convicted, gives a decision in favour of the person convicted on a question of law, the attorney-general or other prosecutor against whom the decision is given may appeal to the Appellate Division of the Supreme Court, which shall, if it decides the matter in issue in favour of the appellant, set aside or vary the decision appealed from and, if the matter was brought before the provincial or local division in terms of- (a) section 309(1), re-instate the conviction, sentence or order of the lower court appealed from, either in its original form or in such a modified form as the said Appellate Division may consider desirable; or 6 See s 1 of the Superior Courts Act 10 of 2013 which provides: ‘”appeal” in Chapter 5, does not include an appeal in a matter regulated in terms of the Criminal Procedure Act, 1977 (Act 51 of 1977), or in terms of any other criminal procedural law.’ 7 Compare: S v Seedat [2016] ZASCA 153; 2017 (1) SACR 141 (SCA) paras 29-30. ….’ [19] The only remaining question pursued by the State on appeal, which it considered a question of law, was formulated in its heads of argument as follows: ‘That the [High] Court erred in law in imputing consent by conduct and/or acquiescence to the commission of the offences, by a child below the age of 12 and in its consideration thereof as an important factor in mitigation of sentence.’ [20] The State contended that in terms of s 57(1) of the Sexual Offences Act a child under the age of 12 years is incapable of consenting to a sexual act. Thus, so the argument went, the ‘consent’ to or ‘acquiescence’ in the sexual act by the complainant – who was only ten years old at the time – could not, as a matter of substantive law, be taken into account in determining an appropriate sentence. [21] It was submitted on behalf of the State that the fact that the High Court did so was wrong in law because it undermined the clear and unambiguous provisions of s 57(1) of the Sexual Offences Act. Further, that it was illogical to find that the complainant’s supposed ‘willing participation’ in the sexual acts could ever be a mitigating factor when it came to the question of sentence. [22] Counsel for the respondent submitted with reference to certain decisions of this court,8 that: (a) this court does not have jurisdiction to entertain an appeal by the State against a sentence substituting the one imposed by a regional court; (b) that the State was not empowered to appeal against factual findings, however patently wrong they might be; and (c) that there is sound and enduring jurisprudence of this court that the nature of a sentence could never be a question of law. [23] Furthermore, it was contended on behalf of the respondent that even if this court were to accept that the High Court was wrong in imputing consent to the complainant in relation to sentence that would still not avail the State in this case. For this submission counsel relied on S v Mosterd 1991 (2) SACR 636 (T) at 640C- 8 Director of Public Prosecutions v Olivier 2006 (1) SACR 380 (SCA) paras 13-15; Director of Public Prosecutions, Transvaal v Mtshweni 2007 (2) SACR 217 (SCA) para 19; Director of Public Prosecutions, Western Cape v Kok [2015] ZASCA 197; 2016 (1) SACR 539 (SCA); Director of Public Prosecutions, Gauteng v Mphaphama [2016] ZASCA 8; 2016 (1) SACR 495. D. There it was said that the nature of the sentence imposed could never be a question of law decided in favour of the convicted person. In Director of Public Prosecutions, Gauteng v Mphaphama this court cited the dictum in Mosterd (at 640C-D) with approval. It went on to say the following (para 11): ‘[C]ertainly, when it comes to the exercise of a judicial discretion in favour of a convicted person in regard to sentence, that cannot be a question of law decided in favour of his or her favour. The definition of an appeal in the Superior Courts Act, however, overrides a consideration of s 311 of the CPA, in terms of the decision in Kock. This has to prevail, even if [the] argument that there is indeed a question of law were to be correct.’ [24] A brief analysis of some of the cases upon which counsel for the respondent strongly relied is essential. In Olivier this court was primarily concerned with the question whether the State can appeal against a lenient sentence imposed by a High Court substituting a sentence imposed by a magistrate’s court. It found that the CPA does not provide for such an appeal when no question of law was implicated. [25] In Mtshweni this court was called upon to determine a question of law reserved for decision in terms of s 319 of the CPA. And that question was whether the trial judge was obliged to call a witness under s 186 of the CPA whose evidence was essential to a just decision of the case. This court found that failure to do so amounted to an error of law. In addition, this court noted9 that there could be no appeal by the State against an acquittal where the court had erred in evaluating the facts or in drawing inferences, even if the error was grave. [26] Again in Kock this court dealt with a situation similar to that in Olivier. There the State had sought an increase of a sentence imposed by the High Court sitting as a court of appeal on the basis that such a sentence was disturbingly lenient. Whilst this court acknowledged that the State’s disgruntlement with the sentence was understandable, it nonetheless struck the appeal from the roll for want of jurisdiction. As with Olivier, no question of law was implicated. [27] In Mphaphama the State appealed against a sentence imposed by the High Court sitting as a court of appeal from the regional court. There the High Court had 9 Paras 19-22. reduced a sentence of life imprisonment to 20 years’ imprisonment. At the outset, this court called upon counsel for the State to first argue whether the matter was appealable and indicated that only when this anterior question was determined in favour of the State would the appeal be heard on the merits. As the appeal had initially been brought in terms of s 316B of the CPA, counsel for the State sought to rely on s 311 of the CPA when she was confronted with the judgment of this court in Director of Public Prosecutions, Western Cape v Kock. However, reliance on s 311 did not avail the State because this court found that ‘the definition of an appeal in the Superior Courts Act, however, overrides a consideration of s 311 of the CPA, in terms of the decision in Kock.’ Consequently the appeal was struck from the roll. [28] Having regard to the facts of the decisions discussed in paras 24-27 above and the issues to be determined, there can be no doubt that they are distinguishable from the facts of this case. In this case, the High Court imputed consent to the complainant. It did so despite the clear and unequivocal provisions of s 57(1) of the Sexual Offences Act referred to above. In doing so, the High Court committed an error of law. It therefore follows that the present case falls foursquare within the purview of s 311 of the CPA. In these circumstances the interests of justice dictate that the sentence imposed by the High Court must be set aside. [29] Although the facts in Mphaphama are at first blush not materially distinguishable from the facts of this case, the issues raised in the two cases are different. Hence the different outcomes. Accordingly, the dictum in Mphaphama that ‘the exercise of a judicial discretion in favour of a convicted person in regard to sentence cannot be a question of law’, is cast too wide. In particular it does not deal with the position where that discretion has been exercised on an incorrect legal basis. An exercise of a judicial discretion based on a wrong principle or erroneous view of the law is clearly a question of law decided in favour of a convicted person. This also distinguishes the present matter from that of Mosterd because it is not the nature of the sentence, but the legal basis on which it was approached, which places this matter within the ambit of s 311 of the CPA. [30] Counsel were agreed that if we came to the conclusion that the appeal must succeed, as we have, it would be desirable to remit the case to the High Court for a proper determination of sentence in light of this judgment. This is, however, not expressly provided for in s 311 of the CPA. But in Attorney-General (Transvaal) v Steenkamp 1954 (1) SA 351 (A) at 357F-G, this court – in the course of dealing with the predecessor to s 311 – said that in a situation such as the present the case could be remitted as ‘it could hardly have been the intention of the legislature that, where the order of this court does not finally dispose of the issues raised in the first Court of Appeal, some of those issues must . . . be left hanging in the air’. Furthermore, having regard to the lapse of time since the imposition of sentence by the trial court, the course suggested by counsel seems to me to be eminently reasonable as the sentence will have to be considered afresh. The respondent may well have already served the whole or part of the sentence imposed by the High Court. Accordingly, whatever fresh sentence will be imposed on him, will necessarily have to take this factor into account. [31] Before concluding I am constrained to say that the High Court appears to have overemphasized the respondent‘s personal circumstances at the expense of the gravity of the crimes and the interests of society, including those of the complainant. [32] It has repeatedly been said that rape is unquestionably a despicable crime. Its enormity in the context of the facts of this case is aggravated by the fact that the complainant was sexually abused by her stepfather. In S v Jansen 1992 (2) SACR 368 (C) at 378G, rape was rightly described as ‘an appalling and perverse abuse of male power’. In N v T 1994 (1) SA 862 (C) at 863C-D,10 the court said that rape is ‘a horrifying crime and . . . a cruel and selfish act in which the aggressor treats with utter contempt the dignity and feeling of [the] victim’. In this case the respondent abused his ‘position of authority and command’ over his stepdaughter. [33] In S v D 1995 (1) SACR 259 (A) the vulnerability of young children was underscored. There this court said the following (at 260F-I): ‘Children are vulnerable to abuse, and the younger they are, the more vulnerable they are. They are usually abused by those who think they can get away with it, and all too often do. . 10 The court also found (at 378E-F) that ‘an argument which seeks to invoke the consent of a nine- year old girl borders on obscene’. . . Appellant's conduct in my view was sufficiently reprehensible to fall within the category of offences calling for a sentence both reflecting the Court's strong disapproval and hopefully acting as a deterrent to others minded to satisfy their carnal desires with helpless children.’ [34] As to the use of children as objects of pornography, the remarks of the Constitutional Court in De Reuck v Director of Public Prosecutions, Witwatersrand Local Division & others 2004 (1) SA 406 (CC) are instructive. The Constitutional Court said (para 61): ‘In determining the importance of s 27(1) of the [Films and Publications Act 65 of 1996], it is necessary to examine its objective as a whole. The purpose of the legislation is to curb child pornography, which is seen as an evil in all democratic societies. Child pornography is universally condemned for good reason. It strikes at the dignity of children, it is harmful to children who are used in its production, and it is potentially harmful because of the attitude to child sex that it fosters and the use to which it can be put in grooming children to engage in sexual conduct.’ [35] The Constitutional Court then went on to say the following (para 63): ‘Children's dignity rights are of special importance. The degradation of children through child pornography is a serious harm which impairs their dignity and contributes to a culture which devalues their worth. Society has recognised that childhood is a special stage in life which is to be both treasured and guarded. The State must ensure that the lives of children are not disrupted by adults who objectify and sexualise them through the production and possession of child pornography. There is obvious physical harm suffered by the victims of sexual abuse and by those children forced to yield to the demands of the paedophile and pornographer, but there is also harm to the dignity and perception of all children when a society allows sexualised images of children to be available.’ In this case the respondent gratuitously violated the complainant’s rights to dignity, privacy and physical integrity in a most humiliating and demeaning manner. Accordingly, on the facts of this case one must, in relation to sentence on count 1, keep uppermost in the mind with a measure of abhorrence the respondent’s unfatherly conduct in sexually molesting his stepdaughter. [36] In the result the following order is made: 1 The appeal is upheld. 2 The question of law raised by the State is determined in its favour. 3 The sentence imposed by the High Court is set aside. 4 The matter is referred back to the High Court for the appeal on sentence to be dealt with in accordance with the principles set out in this judgment. ____________ X M PETSE JUDGE OF APPEAL APPEARANCES: For the Appellant: J Cronje Instructed by: The Director of Public Prosecutions, Pretoria c/o The Director of Public Prosecutions, Bloemfontein For the Respondent: H L Alberts Instructed by: Justice Centre, Pretoria c/o Justice Centre, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 6 June 2017 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal TINA GOOSEN & OTHERS v THE MONT CHEVAUX TRUST (148/2015) [2017] ZASCA 1. The Mont Chevaux Trust (the trust) is the owner of the farm known as Silver Oaks situated near Wellington in the Western Cape (the farm). The trust obtained the farm for the benefit of the Austin family. The seventeen appellants also occupy the farm. The trust applied in the magistrate’s court of Wellington for an order evicting the appellants from the farm in terms of the Extension of Security of Tenure Act 62 of 1997 (ESTA). The magistrate’s court granted the order sought. The eviction order came before the Land Claims Court (LCC) on automatic review in terms of ESTA. The LCC confirmed the eviction order. The appellants appealed to the Supreme Court of Appeal (SCA) against the confirmation order of the LCC. 2. Today the SCA dismissed the appeal and, save in respect of the seventeenth appellant, confirmed the eviction order. The SCA held that the provisions of ESTA had been complied with in respect of the first to sixteenth appellants (the appellants). It held that as a result of the presence of the appellants on the farm and their collective conduct, the Austins found themselves in an intolerable and desperate situation. The SCA accepted that the execution of the eviction order will render the appellants homeless but pointed out that the appellants are living in appalling conditions on the farm. The SCA found that the Drakenstein Municipality was constitutionally obliged to provide the appellants with emergency accommodation upon their eviction. In the circumstances the SCA suspended the operation of the eviction order for a period of 90 days from the date of its order and ordered the Drakenstein Municipality to provide the appellants with emergency housing within 75 days of the date of its order. --ends--

3802

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 167/2021 In the matter between: LUKE M TEMBANI FIRST APPELLANT LMT ESTATES (PVT) LTD SECOND APPELLANT WYNAND HART THIRD APPELLANT QUEENSDALE ENTERPRISES (PVT) LTD FOURTH APPELLANT MADODA ENTERPRISES (PVT) LTD FIFTH APPELLANT KLIPDRIFT ENTERPRISES (PVT) LTD SIXTH APPELLANT MIKE CAMPBELL (PVT) LTD SEVENTH APPELLANT RICHARD THOMAS ETHERIDGE EIGHTH APPELLANT ANDREW KOCKOTT NINTH APPELLANT TENGWE ESTATES (PVT) LTD TENTH APPELLANT CHRISTOPHER MELLISH JARRETT ELEVENTH APPELLANT STUNULA RANCHING (PVT) LTD TWELFTH APPELLANT LUCHABI RANCH (PVT) LTD THIRTEENTH APPELLANT LARRY CUMMING FOURTEENTH APPELLANT FRANCE FARM (PVT) LTD FIFTEENTH APPELLANT MICHAEL IAN PATRICK ODENDAAL SIXTEENTH APPELLANT DEBORAH LOUISE ODENDAAL SEVENTEENTH APPELLANT GRASSFLATS FARM (PVT) LTD EIGHTEENTH APPELLANT MURIK MARKETING (PVT) LTD NINETEENTH APPELLANT GIDEON STEPHANUS THERON TWENTIETH APPELLANT EBEN HAESER (PVT) LTD TWENTY-FIRST APPELLANT EDEN FARM (PVT) LTD TWENTY-SECOND APPELLANT PETER HENNING TWENTY-THIRD APPELLANT CHIREDZI RANCHING (PVT) LTD TWENTY-FOURTH APPELLANT BATALEURS PEAK FARM HOLDINGS (PVT) LTD TWENTY-FIFTH APPELLANT and PRESIDENT OF THE FIRST RESPONDENT/ REPUBLIC OF SOUTH AFRICA CROSS-APPELLANT GOVERNMENT OF THE SECOND RESPONDENT/ REPUBLIC OF SOUTH AFRICA CROSS-APPELLANT Neutral citation: Luke M Tembani and Others v President of the Republic of South Africa and Another (Case no 167/2021) [2022] ZASCA 70 (20 May 2022) Coram: PONNAN and MOLEMELA JJA and MUSI, MEYER and PHATSHOANE AJJA Heard: 5 May 2022 Delivered: 20 May 2022. Summary: Exception – delictual claim – whether high court correct in upholding exception based on causation – whether exception proceedings appropriate to decide the factual and legal issues raised – appealability – dismissal of an exception not appealable – conclusion that ‘no order is required to be made’ in a conditional application not an appealable order. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Van Oosten J, sitting as court of first instance): (1) The appeal is upheld, and the cross-appeal is struck from the roll, in each instance with costs, including those of two counsel. (2) The order of the court below is set aside and replaced with the following: ‘The defendants’ exception to the plaintiffs’ second amended particulars of claim dated 18 March 2020 is dismissed with costs, including those of two counsel.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ Ponnan JA (Molemela JA and Musi, Meyer and Phatshoane AJJA concurring) [1] To facilitate what has been described as an ambitious land and agrarian reform programme, the Constitution of the Republic of Zimbabwe was amended to provide for land expropriation without compensation, as also, to remove the jurisdiction of the domestic courts of Zimbabwe over disputes relating to expropriation without compensation.1 Some farmers, including South African citizens, who had lost their land in consequence of the implementation of the programme, turned to the Southern African Development Community (SADC) Tribunal (the Tribunal). The Tribunal held that the jurisdiction of the Zimbabwean courts had been ousted ‘from any case related to the acquisition of agricultural land and that the applicants [in that matter] were therefore unable to 1 Law Society of South Africa and Others v President of the Republic of South Africa and Others [2018] ZACC 51; 2019 (3) BCLR 329 (CC); 2019 (3) SA 30 (CC) para 10. institute proceedings under the domestic jurisdiction’.2 It concluded that Zimbabwe was in breach of certain of its obligations under the SADC Treaty (the Treaty)3 and, inter alia, ordered it to pay fair compensation. Zimbabwe, however, failed to comply with the order of the Tribunal. [2] In September 2009, at a meeting of the Summit (being the supreme executive body constituted by the Treaty and comprising the Heads of State of the member states of SADC) held in Kinshasa in the Democratic Republic of Congo, Zimbabwe’s failure to comply with the decisions of the Tribunal was raised. It was resolved to ask the Committee of Ministers of Justice and Attorneys-General (the Committee) to hold a meeting on the legal issues regarding Zimbabwe and to advise the Summit. The Committee was also asked to ‘review the roles, responsibilities and terms of reference of the Tribunal’. [3] At a meeting of Heads of State and Government, held in Windhoek, Namibia on 16 and 17 August 2010, further ‘acts of non-compliance by the Republic of Zimbabwe with regard to the Tribunal’s earlier decisions’ arose for discussion. The Summit resolved not to re-appoint, for another five-year term, members of the Tribunal, whose term of office expired in August 2010, pending the report from the Committee. In May 2011, it was decided, in effect, to suspend the operations of the Tribunal by neither re-appointing Members of the Tribunal, whose term of office had expired in 2010, nor replacing those whose term would expire in 2011.4 In the result, the Tribunal was effectively disabled and unable to function. 2 See Mike Campbell (Pvt) Ltd and Others v Republic of Zimbabwe [2008] SADCT 2. 3 See Government of the Republic of Zimbabwe v Fick and Others [2013] ZACC 22; 2013 (10) BCLR 1103 (CC); 2013 (5) SA 325 (CC). 4 Law Society of South Africa and Others v President of the Republic of South Africa and Others [2018] ZAGPPHC 4; [2018] 2 All SA 806 (GP); 2018 (6) BCLR 695 (GP) para 20. [4] Thereafter, on 18 August 2014 and at Victoria Falls, Zimbabwe, the Summit adopted a new Protocol (the 2014 Protocol). The 2014 Protocol abolished access by all private individuals to the Tribunal. Thus, instead of facilitating enforcement of the Tribunal’s decisions, the Summit chose to disregard the binding Treaty obligations of member states. It treated the relevant Treaty provisions and the Tribunal decisions as non-existent and also violated the undertaking to support and promote the Tribunal, whose decisions are supposed to bind member states and, by extension, the Summit. [5] The appellants are all private individuals, who had claims arising, in each instance, from the dispossession by the Government of Zimbabwe (contrary to the Treaty and International Law) of farms owned, registered or worked by each of them. Those claims would have been justiciable before the Tribunal, prior to the adoption of the 2014 Protocol. [6] The then South African President’s negotiation and signing of the 2014 Protocol was subsequently challenged in litigation on the grounds that it was unconstitutional, unlawful and irrational. So too, his decision to make common cause with his peers to not appoint or re-appoint (as the case may be) Members or Judges to the Tribunal and to suspend the operations of the latter. The application was launched by the Law Society of South Africa (the LSSA) on 19 March 2015. Some of the current appellants applied for leave to intervene in the application. Both the intervention application and the review application succeeded. A Full Court of the Gauteng Division of the High Court, Pretoria (the full court), sitting as a court of first instance (by virtue of the importance of the matter), declared on 1 March 2018 that the President’s participation in suspending the operations of the SADC Tribunal and his subsequent signing of the 2014 Protocol was unlawful, irrational and thus, unconstitutional. In terms of s 172(2)(a) of the Constitution, the full court referred its order to the Constitutional Court for confirmation.5 [7] In a judgment delivered on 11 December 2018, the Constitutional Court confirmed the full court’s declaration of unconstitutionality.6 In arriving at that conclusion, the Constitutional Court held: ‘[44] . . . every issue that arose for determination is, or is traceable to, an offshoot of a masterplan that was devised by the Summit at the instance of the Republic of Zimbabwe. Clearly, Zimbabwe did not want to comply with the unfavourable decisions made against it by the Tribunal. It then crafted a strategy that would be fatal to the possibility of the Tribunal ever embarrassing it again. [45] In all of the above efforts to paralyse the Tribunal, Zimbabwe had a willing ally in South Africa, as represented by our President. The non-appointment of new Judges and non-renewal of expired terms was a scheme designed to ensure that the Tribunal would not function because it would not be quorate. Added to this mix was the decision to impose a moratorium on the referral of individual disputes to the Tribunal and the signing of the Protocol that seeks to essentially make this state of affairs permanent.’ [8] Three days after the Constitutional Court handed down its judgment in the matter, the attorney for the appellants served a notice in terms of s 3(1)(a) of the Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 (the Act) on the State Attorney, pursuant to which ten of the appellants gave notice of their intention to institute claims for damages against the President of the Republic of South Africa and the Government of the Republic of South Africa 5 Ibid para 72. 6 Law Society of South Africa and Others v President of the Republic of South Africa and Others [2018] ZACC 51; 2019 (3) BCLR 329 (CC); 2019 (3) SA 30 (CC). (the respondents).7 The response to the notice from the State Attorney on behalf of the respondents was: ‘. . . the President does not acknowledge or admit your clients’ claims. In response to paragraph 5 of the Notice, the president does contend that the Notice has not been sent within the period prescribed in the act and accordingly intends relying on the failure to serve the notice timeously.’ [9] On 15 January 2019, the appellants’ attorney served what was described as a ‘supplementary notice in terms of section 3(1)(a)’ to, as it was put, ‘clarify, and in certain respects, correct our letter of 14 December 2018’. The supplementary notice made reference to all 25 of the appellants as well as the various amounts claimed by each. On 18 January 2019, the State Attorney reiterated that the appellants’ claims were not admitted and that the notice and supplementary notice had not been sent within the period prescribed in the Act. [10] On 9 April 2019, the appellants issued and served: (i) a conditional condonation application, seeking, to the extent necessary, that any non- compliance on their part with the provisions of s 3 of the Act, be condoned; and (ii) a summons and particulars of claim. The respondents chose to meet the particulars of claim by raising multiple exceptions. Although the particulars of claim was subsequently amended, the respondents filed yet a further notice of exception and also opposed the appellants’ conditional condonation application, in the main, on the basis that the claims had prescribed. Consequently, the exceptions and conditional condonation application were enrolled for hearing on 7 Section 3 of the Legal Proceedings Against Certain Organs of State Act provides: ‘(1) No legal proceedings for the recovery of a debt may be instituted against an organ of state unless- (a) the creditor has given the organ of state in question notice in writing of his or her or its intention to institute the legal proceedings in question; or (b) the organ of state in question has consented in writing to the institution of that legal proceedings- (i) without such notice; or (ii) upon receipt of a notice which does not comply with all the requirements set out in subsection (2).’ the same day before Van Oosten J in the Gauteng Division of the High Court, Pretoria (the high court) [11] On 18 December 2020 the high court issued the following order: ‘1. Exception 1 (the factual causation exception) is upheld. 2. Exception 1 (the legal causation exception) is upheld in respect of the 1st, 2nd, 4th, 5th, 6th, 7th, 9th, 10th, 11th, 12th, 13th, 14th, 15th, 18th, 19th, 21st, 22nd, 24th, and 25th plaintiffs’ claims. 3. Exception 2 (the legal duty exception), exception 4 (the domestic remedies exception) and exception 5 (the pain and suffering exception) are dismissed. 4. No order is made on exception 3 (the second plaintiff’s claim exception). 5. No order is made as to the costs of the condonation application and the exception. 6. Leave is granted to the plaintiffs to amend their particulars of claim by Notice of Amendment to be delivered on or before 29 January 2021.’ [12] The appellants applied for leave to appeal against paragraphs 1, 2 and 5 of the order of Van Oosten J. The respondents sought leave: (a) ‘only to the extent that the court failed to grant an order dismissing the [appellants’] condonation application and paragraph 5 of the order only in respect of the costs of the [appellants’] condonation application; and (b) conditionally against paragraph 3 of the order ‘only in respect of the dismissal of Exception 2 (the legal duty exception) in the event that the [appellants’] are granted leave to appeal against paragraphs 1 and/or 2 of the order’. [13] The high court granted leave to appeal to this Court in the following terms: ‘1. The plaintiffs are granted leave to appeal to the Supreme Court of Appeal against paragraphs 1 and 2 of the order delivered by the Honourable Mr Justice Van Oosten on 18 December 2020 (the order); 2. The defendants are granted leave to appeal to the Supreme Court of Appeal against paragraph 3 of the order, only in respect of the dismissal of Exception 2 (the legal duty exception); 3. The defendants are given leave to appeal to the Supreme Court of Appeal against the order to the extent that the Court did not grant an order dismissing the plaintiffs’ condonation application. 4. Subject to the right of either party to seek leave to appeal from the Constitutional Court against a judgment by the Supreme Court of Appeal, the defendants accept that the determination of the condonation application by the Supreme Court of Appeal will finally determine the issue of whether the plaintiffs’ claims have prescribed. 5. The plaintiffs and the defendants are granted leave to appeal to the Supreme Court of Appeal against paragraph 5 of the order. 6. The costs of the plaintiffs’ and defendants’ applications for leave to appeal shall be costs in the appeal.’ [14] Whilst exceptions provide a useful mechanism ‘to weed out cases without legal merit’, it is nonetheless necessary that they be dealt with sensibly.8 It is where pleadings are so vague that it is impossible to determine the nature of the claim or where pleadings are bad in law in that their contents do not support a discernible and legally recognised cause of action, that an exception is competent.9 The burden rests on an excipient, who must establish that on every interpretation that can reasonably be attached to it, the pleading is excipiable.10 The test is whether on all possible readings of the facts no cause of action may be made out; it being for the excipient to satisfy the court that the conclusion of law for which the plaintiff contends cannot be supported on every interpretation that can be put upon the facts.11 [15] In H v Fetal Assessment Centre, the Constitutional Court recognised that there may be occasions when ‘the question of the development of the common 8 Telematrix (Pty) Ltd v Advertising Standards Authority SA [2005] ZASCA 73; 2006 (1) SA 461 (SCA) para 3. 9 Cilliers et al Herbstein & Van Winsen The Practice of the High Courts of South Africa 5ed Vol 1 at 631; Jowell v Bramwell-Jones and Others 1998 (1) SA 836 (W) at 899E-F. 10 Ocean Echo Properties 327 CC and Another v Old Mutual Life Insurance Company (South Africa) Ltd [2018] ZASCA 9; 2018 (3) SA 405 (SCA) para 9. 11 Trustees for the Time Being of the Children’s Resource Centre Trust and Others v Pioneer Food (Pty) Ltd and Others [2012] ZASCA 182; 2013 (2) SA 213 (SCA); 2013 (3) BCLR 279 (SCA); [2013] 1 All SA 648 (SCA) para 36 (Children’s Resource Centre Trust). law would be better served after hearing all the evidence’.12 Whilst there is no general rule that issues relating to the development of the common law cannot be decided on exception, however, where the ‘factual situation is complex and the legal position uncertain’, it will normally be better not to do so.13 In this regard reference was made to the Australian case of Harriton v Stephens, where Kirby J (in dissent) observed: ‘Especially in novel claims asserting new legal obligations, the applicable common law tends to grow out of a full understanding of the facts. To decide the present appeal on abbreviated agreed facts risks inflicting an injustice on the appellant because the colour and content of the obligations relied on may not be proved with sufficient force because of the brevity of the factual premises upon which the claim must be built. Where the law is grappling with a new problem, or is in a state of transition, the facts will often “help to throw light on the existence of a legal cause of action – specifically a duty of care14 owed by the defendant to the plaintiff”. Facts may present wrongs. Wrongs often cry out for a remedy. To their cry the common law may not be indifferent.’15 [16] This approach ensures compliance with s 39(2) of the Constitution, which requires courts to develop the common law by promoting the spirit, purport and objects of the Bill of Rights, inasmuch as it places a court in a position to make a final decision ‘after hearing all the evidence, and the decision can be given in the 12 H v Fetal Assessment Centre [2014] ZACC 34; 2015 (2) BCLR 127 (CC); 2015 (2) SA 193 (CC) para 11 (H v Fetal Assessment Centre). 13 In Carmichele v Minister of Safety and Security [2001] ZACC 22; 2001 (4) SA 938(CC); 2001 (1) BCLR 995 (CC) para 80 the Constitutional Court held, as with some cases on exception, it was also better not to decide issues about the development of the common law by an order granting absolution from the instance at the end of a plaintiff’s case in a trial. It stated: ‘There may be cases where there is clearly no merit in the submission that the common law should be developed to provide relief to the plaintiff. In such circumstances absolution should be granted. But where the factual situation is complex and the legal position uncertain, the interests of justice will often better be served by the exercise of the discretion that the trial Judge has to refuse absolution. If this is done, the facts on which the decision has to be made can be determined after hearing all the evidence, and the decision can be given in the light of all the circumstances of the case, with due regard to all relevant factors.’ 14 It bears mention, as was pointed out in Home Talk Developments (Pty) Ltd and Others v Ekurhuleni Metropolitan Municipality ZASCA 77; [2017] 3 All SA 382 (SCA); 2018 (1) SA 391 (SCA) para 25, that: ‘. . . in English law ‘‘duty of care’’ is used to denote both what in South African law would be the second leg of the inquiry into negligence and legal duty in the context of wrongfulness. As Brand JA observed in Trustees, Two Oceans Aquarium Trust at 144F, ‘‘duty of care’’ in English law ‘‘straddles both elements of wrongfulness and negligence’’. Accordingly, the phrase ‘‘duty of care’’ in our legal setting is inherently misleading.’ (Footnotes Omitted.) 15 Harriton v Stephens [2006] HCA 15; (2006) 226 CLR 52; (2006) 226 ALR 391 para 35. light of all the circumstances of the case, with due regard to all relevant factors’.16 It is thus only if the court can conclude that it is impossible to recognize the claim, irrespective of the facts as they might emerge at the trial, that the exception can and should be upheld.17 Hence, courts must assess the various arguments for and against the recognition of what may be perceived as a novel claim and in doing so the normative matrix of the Constitution and the Bill of Rights must be applied for the purposes of determining whether the claim may be recognised in law.18 [17] Indeed, as accepted in H v Fetal Assessment Centre: ‘Even if the conclusion is reached that the limits of our law of delict will be stretched beyond recognition for harm of this kind to be recognised within its niche, our Constitution gives our courts the liberty to develop motivated exceptions to common law rules or even recognise new remedies for infringement of rights.’19 On this basis, the Constitutional Court held that the novel claim under consideration in that case ‘is not necessarily inconceivable under our law’.20 [18] In Pretorius and Another v Transport Pension Fund and Another,21 the Constitutional Court reiterated that exception proceedings are inappropriate to decide the complex factual and legal issues raised by the objections advanced there. As was the case with H v Fetal Assessment Centre, the Pretorius matter involved a ‘factual situation [that] is complex and the legal position uncertain’.22 Pretorius held that ‘to decide the possible unconscionableness of state conduct, it will be better to get the full story thrashed out at a trial’,23 and there is more 16 H v Fetal Assessment Centre fn 12 above para 14, with reference to Carmichele v Minister of Safety and Security (fn 13 above) para 21. 17 H v Fetal Assessment Centre para 26. 18 H v Fetal Assessment Centre para 42. 19 H v Fetal Assessment Centre para 66. 20 Ibid. 21 Pretorius and Another v Transport Pension Fund and Another [2018] ZACC 10; [2018] 7 BLLR 633 (CC); 2018 (7) BCLR 838 (CC); (2018) 39 ILJ 1937 (CC); 2019 (2) SA 37 (CC) para 42 (Pretorius). 22 Pretorius para 53. See also Fetal Assessment Centre fn 12 above paras 11-2, relying on Carmichele v Minister of Safety and Security [2001] ZACC 22; 2001 (4) SA 938 (CC); 2001 (1) BCLR 995 (CC). 23 Pretorius para 44. than enough legal uncertainty to send the claim to trial.24 The Constitutional Court accordingly concluded that the high court should have dismissed the exception. [19] H v Fetal Assessment Centre also confirmed the judgment of this Court in Children’s Resource Centre Trust that if a novel or unprecedented claim is ‘legally plausible’ then it ‘must be determined in the course of the action’.25 Children’s Resource Centre Trust was concerned with a delictual claim based on a novel legal duty not to act negligently. As was explained ‘the existence of such a duty depends on the facts of the case and a range of policy issues’, which required the Court to be ‘fully informed in regard to the policy elements’ and therefore ‘the enquiry militates against that decision being taken without evidence’. This, so it was held, renders it impossible to arrive at a conclusion except upon a consideration of all the circumstances of the case and every other relevant factor.26 [20] Accordingly, a court must be satisfied that a novel claim is necessarily inconceivable under our law as potentially developed under s 39(2) of the Constitution before it can uphold an exception premised on the alleged non- disclosure of a cause of action. Citing H v Fetal Assessment Centre, the Constitutional Court held in Pretorius that the dismissal of an exception does not deprive the respondents of the opportunity of raising the same defences as substantive defences in their respective pleas and for their merits to be determined after the leading of evidence at the trial, which is probably, in any event, a better way to determine the potentially complex factual and legal issues involved.27 This 24 Pretorius para 53. 25 Children’s Resource Centre Trust para 37. 26 Ibid; Minister of Law and Order v Kadir 1995 (1) SA 303 (A) at 318 E-I; Axiam Holdings Ltd v Deloitte & Touche 2006 (1) SA 237; [2005] 4 All SA 157 (SCA) para 25. 27 Pretorius fn 21 above para 22. case indeed involves, as was expressly conceded on behalf of the respondents, ‘an unprecedented and novel delictual claim’. [21] The high court appears to have construed a single exception, explicitly premised on an alleged failure to plead that the defendants are the ‘cause’ of the plaintiffs’ losses, as forming two separate exceptions. One strand relates to what was explicitly described in the judgment as ‘factual causation’ and the other as ‘legal causation’. In that, the high court appeared to have confused the enquiry. A contention regarding the cause (as opposed to the ‘remoteness’) of loss relates to factual - as opposed to legal - causation. The exception invoked only the former. It was accordingly not open to the high court to enter into the question of legal causation. As this Court has confirmed, ‘[a]n excipient is obliged to confine his complaint to the stated grounds of his exception.’28 [22] The high court did not properly analyse any of the seven multitier issues raised in the exception. It referred only to three, but without conducting a thorough analysis of any or even considering whether the criticisms, such as they were, indeed satisfied the applicable legal test for exceptions. In that regard, the high court reasoned: ‘[34] The complaint raised by the defendants is multitiered. First, that the plaintiffs do not allege that the President’s signature of the 2014 Protocol brought it into force, nor so it was argued, could they, as the 2014 Protocol only would have become binding and come into force on signature of the requisite number of member states (two thirds of the Summit members) and the further requirement of ratification by those states, which, as was accepted by the Constitutional Court in Law Society, none of the states had complied with. Second, the Constitutional Court in Law Society ordered the President to withdraw his signature from the 2014 Protocol (which his successor complied with). Third, it is alleged that the President himself suspended the SADC Tribunal, he indeed participated in a decision by the SADC 28 Feldman NO v EMI Music SA (Pty) Ltd/ EMI Music Publishing SA (Pty) Ltd [2009] ZASCA 75; 2010 (1) SA 1 (SCA); [2009] 4 All SA 307 (SCA) para 7. Summit, consisting of all the heads of state of the SADC countries, to suspend the Tribunal. Fourth, it is not alleged that the SADC Summit is precluded from lifting the suspension of the SADC Tribunal, and sixth, the plaintiffs do not allege that they have claims against the defendants, but ‘‘claims justiciable by the SADC Tribunal’’ against ‘‘the Government of Zimbabwe’’, and that ‘‘such claims aris[e] in each instance from the dispossession by the Government of Zimbabwe’’, and the alleged conduct of its agents and officials.’ [23] The high court proceeded to hold: ‘[41] Delict requires that the wrongful action be the factual and legal cause of the harm suffered in order to ground an action for damages. In determining factual causation, the ‘‘but for’’ test applies: but for the occurrence of the wrongful conduct, what would have happened? Once factual causation is established, and inquiry into legal causation follows. Here the question is whether the defendant’s conduct is sufficiently closely linked to, or the proximate cause of the harm suffered for legal liability to ensue, or whether the harm is too remote. This inquiry is flexible and assessed in the light of what legal policy, reasonability, fairness and justice require. The test for legal causation is ‘‘a flexible one in which factors such as reasonable foreseeability, directness, the absence or presence of a novus actus interveniens, legal policy, reasonability, fairness and justice all play their part’’. . . . [42] Applying these principles, I am of the view that the facts pleaded, as I have outlined above, for the reasons stated, do not contain sufficient averments to establish a causal or proximate cause between the President’s conduct and the plaintiffs’ alleged damages suffered. The notion that may be inferred from the pleaded facts, that had the President acted constitutionally, he may have been able to prevent the suspension of the Tribunal by blocking consensus, is a non- sequitur. The SADC Treaty, as I have pointed out, allows for the dissolution of the Tribunal by way of majority vote. Therefore, the Presidents opposition or absence of his signature to the 2014 Protocol, would not have made any difference as the Tribunal could still have been dissolved, by a vote by three-quarters of the other heads of State. As correctly pointed out by counsel for the defendants, whatever effect the former President’s signature of the 2014 Protocol (absent ratification) may be said to have, even on the basis of a joint-wrongdoer as contended for by counsel for the plaintiffs, the Constitutional Court’s order that the President must withdraw that signature, which did in fact occur, thwarted the ‘‘conspiracy’’ to curtail the jurisdiction of the Tribunal. Formal ratification of the decision, moreover, in any event, never occurred. Finally, I am unable to find any allegations pleaded, demonstrating that the action or inaction by only the President of South Africa, being only one member of a body made up of all SADC’s heads of state, can be said to be the cause of the suspension of the Tribunal.’ [24] The high court’s treatment of the causation exception reveals a conflation of factual and legal causation. Although purporting to deal with factual causation, the analysis, in truth, centres on ‘proximate cause’ and ‘remoteness’, ‘legal policy’, ‘reasonability’, ‘fairness’, and case law on legal causation. In the single paragraph comprising the high court’s analysis and conclusion on the pleaded issue, the judgment purports to apply ‘these’ principles, namely those applicable to legal causation. That paragraph then records the ‘view’ that ‘the facts pleaded … do not contain sufficient averments to establish a causal or proximate cause’. Proximate cause relates to legal causation, whilst a causal nexus (to complete the inchoate concept in the quotation) relates to factual causation. The high court’s discussion of principles applicable to legal causation (and its fragmented reference to factual causation) reveals, with respect, a confused analysis. The upshot of the analysis is the conclusion that the high court was ‘unable to find any allegations pleaded, demonstrating that the action or inaction by only the President of South Africa … can be said to be the cause of the suspension of the Tribunal’. In that, the high court appears, as well, to have misconceived the test.29 [25] Thus, even on this rather perfunctory analysis, it must follow that, in upholding the factual causation exception, the judgment of the high court cannot be supported. And, as I have sought to show, legal causation did not even arise. Yet, it was entertained. This renders it unnecessary to consider the other points urged upon us in the appeal. As these are proceedings on exception, those, I daresay, are better left to the trial court. 29 Minister of Finance and Others v Gore NO [2006] ZASCA 98; [2007] 1 All SA 309 (SCA); 2007 (1) SA 111 (SCA) para 33; Lee v Minister of Correctional Services [2012] ZACC 30; 2013 (2) BCLR 129 (CC); 2013 (2) SA 144 (CC); 2013 (1) SACR 213 (CC) paras 47, 55 and 60. [26] It follows that the appeal against the upholding of the causation exception must succeed. Consequently, paragraphs 1 and 2 of the order of the high court fall to be set aside. [27] Turning to the respondents’ cross-appeal. In Maize Board v Tiger Oats Ltd this Court held: ‘ . . . it now has to be accepted that a dismissal of an exception (save an exception to the jurisdiction of the court), presented and argued as nothing other than an exception, does not finally dispose of the issue raised by the exception and is not appealable. Such acceptance would on the present state of the law and the jurisprudence of this court create certainty and accordingly be in the best interests of litigating parties. If litigating parties wish to obtain a final decision, whichever way the decision of the court goes on an issue raised by an exception, they should make use of the procedure designed for that purpose namely the procedure provided for in Rule 33 and either agree on a special case in terms of that rule or request the court to direct that the issue be finally disposed of in an appropriate manner. If that is done any misunderstanding on the part of any of the parties and any resulting prejudice should be avoided.’30 Maize Board has been consistently followed by this Court31 and it is well- established that this Court will not readily depart from its previous decisions. It follows that the dismissal by the high court of the legal duty exception is not appealable. [28] That leaves the conditional condonation application: Insofar as that application is concerned, the high court held: ‘[25] . . . I conclude that the [appellants] were correct in their stance that no condonation was required on the premise that their cause of action was only complete after delivery of the Constitutional Court’s judgment . . . The launching of the application for condonation on condition that this finding would not be made, was a wise precautionary decision, which, understandably so, was not criticised. 30 Maize Board v Tiger Oats Ltd and Others [2002] ZASCA 74; [2002] 3 All SA 593 (A) para 14 (Maize Board). 31 See Itzikowitz v Absa Bank Ltd [2016] ZASCA 43 para 22 and the cases there cited. [26] It follows that no order is required to be made in the application for condonation save for the costs thereof, to which I shall revert.’ [29] First, not having made an order, it is unclear why the high court thereafter saw fit to grant leave to the respondents to appeal to this Court against what it described as ‘the order to the extent that the Court did not grant an order dismissing the plaintiffs’ condonation application’. On any reckoning no appealable order issued. Hence, no appeal can lie. [30] Second, as paragraph 4 of the order granting leave to appeal to this Court appears to illustrate, the motivation for the grant of leave, as I discern it, pertains to what may have been said en passant by the high court in arriving at the conclusion that ‘no order is required to be made’. Paragraph 4, in part, provides ‘that the determination of the condonation application by [this Court] will finally determine the issue of whether the plaintiffs’ claims have prescribed’. The fallacy in the approach, however, is to assume, wrongly so, that an appeal lies against the reasoning of the court below. It does not. An appeal lies against the substantive order of a court.32 [31] Third, whilst it is indeed so that condonation cannot be granted if the debt has already been extinguished by prescription,33 a special defence such as prescription should ordinarily be raised by way of a special plea. In which event, it would be open to a plaintiff to file a replication to the effect that the claim had not prescribed, inter alia, because in terms of s 12 of the Prescription Act,34 the debt only became due on a date less than three years prior to the date of service of the summons or because prescription had been interrupted in terms of s 15 or 32 Western Johannesburg Rent Board & another v Ursula Mansions (Pty) Ltd 1948 (3) SA 353 (A) at 355. 33 Legal Aid Board and Others v Singh [2008] ZAKZHC 66; 2009 (1) SA 184 (N). 34 Prescription Act 68 of 1969. because the completion of prescription had been delayed in terms of s 13.35 The issue could thereafter be dealt with, if so advised, under rule 33, especially rule 33(4).36 [32] Fourth (and this is linked to the third), whilst the determination of a condonation application is usually a necessary precursor to the consideration of the main application or action, here the application was both in substance and form, as it was styled, a conditional one. The high court appeared to appreciate as much when it stated: ‘[15] The reason for the condonation application being conditional, the plaintiffs contend, is that condonation on a correct understanding of the legal position, does not arise. The condonation application accordingly, was instituted under the Act, merely as a precaution in an attempt to remove, what was referred to as a non-issue, from the arena.’ And yet, it dealt with it, as it were, as if an anterior application that required adjudication up-front. What is more, as I have endeavoured to show, the issue raised therein, namely prescription, neither lent itself to adjudication, nor final determination, on the papers as they stood. In that regard, the appellants made plain in their replying affidavit: ‘[55] To the extent that the respondents might attempt to persist in their special plea of prescription (in respect of which, as mentioned, they bear the onus) at the trial, this will be met (to the extent that any prima facie case is established) with viva voce evidence at the appropriate stage.’ It thus seems to me that the high court would have been better advised not to have entered into the conditional condonation application at this stage of the proceedings. [33] It follows that as both the dismissal by the high court of the legal duty exception and the conclusion that ‘no order is required to be made in the 35 Butler v Swain 1960 (1) SA 527 (N); Yusaf v Bailey 1964 (4) SA 117 (W); Maize Board fn 30 above para 13. 36 De Polo v Dreyer and Others 1989 (4) SA 1059 (W). application for condonation’ are not appealable, the cross-appeal falls to be struck from the roll. [34] In the result: (1) The appeal is upheld, and the cross-appeal is struck from the roll, in each instance with costs, including those of two counsel. (2) The order of the court below is set aside and replaced with the following: ‘The defendants’ exception to the plaintiffs’ second amended particulars of claim dated 18 March 2020 is dismissed with costs, including those of two counsel.’ _________________ V M Ponnan Judge of Appeal APPEARANCES For the appellants: J J Gauntlett QC SC (with F B Pelser) Instructed by: Hurter Spies Inc, Pretoria Hendre Conradie Inc, Bloemfontein For the respondents: G Marcus SC (with A Coutsoudis) Instructed by: State Attorney, Pretoria State Attorney, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 20 May 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Luke M Tembani and Others v President of the Republic of South Africa and Another (167/2021) [2022] ZASCA 70 (20 May 2022) Today the Supreme Court of Appeal (SCA) handed down a judgment in which it upheld an appeal and struck a cross-appeal from the roll, in each instance with costs, against a judgment of the Gauteng Division of the High Court, Pretoria (the high court). The litigation has its genesis in Zimbabwe’s ambitious land and agrarian reform programme. Some farmers, including South African citizens, who had lost their land due to the implementation of the programme, turned to the Southern African Development Community (SADC) Tribunal (the Tribunal), which concluded that Zimbabwe breached certain obligations under the SADC Treaty (the Treaty) and ordered it to pay fair compensation. Zimbabwe, however, failed to comply with the order of the Tribunal. When Zimbabwe’s failure to comply, was raised before a meeting of the Summit (being the supreme executive body constituted by the Treaty and comprising the Heads of State of the member states of SADC) it came ultimately to be decided, in effect, to suspend the operations of the Tribunal by neither re-appointing Members of the Tribunal whose term of office had expired in 2010 nor replacing those whose term would expire in 2011. As a result, the Tribunal was effectively disabled and unable to function. On 18 August 2014, the Summit adopted a new Protocol (the 2014 Protocol) which abolished access by all private individuals to the Tribunal. Thus, instead of facilitating enforcement of the Tribunal’s decisions, the Summit chose to disregard the binding Treaty obligations of member states. It treated the relevant Treaty provisions and the Tribunal decisions as non-existent and also violated the undertaking to support and promote the Tribunal, whose decisions are supposed to bind member states and, by extension, the Summit. The appellants are all private individuals, who had claims arising, in each instance, from the dispossession by the Government of Zimbabwe (contrary to the Treaty and International Law) of farms owned, registered or worked by each of them. Those claims would have been justiciable before the Tribunal prior to the 2014 Protocol abolishing its jurisdiction. The then South African President’s negotiation and signing of the 2014 Protocol was subsequently challenged in litigation by the Law Society of South Africa. So too, his decision to make common cause with his peers to not appoint or re-appoint Members or Judges to the Tribunal, thereby suspending its operations. Some of the current appellants applied for leave to intervene in those proceedings. On 1 March 2018, a Full Court of the Gauteng Division declared that the President’s participation in suspending the operations of the SADC Tribunal and his subsequent signing of the 2014 Protocol was unlawful, irrational and thus, unconstitutional. On 11 December 2018, the Constitutional Court confirmed the full court’s declaration of unconstitutionality. Following the Constitutional Court’s judgment, the attorney for the appellants served a notice in terms of s 3(1)(a) of the Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 (the Act) on the State Attorney, pursuant to which ten of the appellants gave notice of their intention to institute claims for damages against the President and the Government of the Republic of South Africa, the respondents in this matter. On 15 January 2019, the appellants’ attorney served a ‘supplementary notice in terms of section 3(1)(a)’ to ‘clarify, and in certain respects, correct our letter of 14 December 2018’. The supplementary notice made reference to all 25 of the appellants as well as the various amounts claimed by each. The State Attorney responded that the appellants’ claims were not admitted and that the notice and supplementary notice had not been sent within the period prescribed in the Act. On 9 April 2019, the appellants served a conditional condonation application, summons and particulars of claim. The respondents chose to meet the particulars of claim by raising multiple exceptions. Although the particulars of claim were subsequently amended, the respondents filed a further notice of exception. Before the high court, the respondents pressed each of their exceptions and also opposed the appellants’ conditional condonation application on the basis that the claims had prescribed. The high court took the view that no order was required to be made in respect of the condonation application. It upheld only one of the exceptions raised by the respondents, namely what was described as the causation exception. The high court thereafter granted leave to the (1) appellant's to appeal against the upholding of the ‘causation exception’; and (2) the respondents to cross appeal against - (2.1) the dismissal of what was described as the ‘legal duty exception’ and (2.2) ‘the order to the extent that the Court did not grant an order dismissing the plaintiffs’ condonation application’. The SCA held that, whilst exceptions provide a useful mechanism ‘to weed out cases without legal merit’, it was nonetheless necessary that they be dealt with sensibly. It is where pleadings were so vague that it is impossible to determine the nature of the claim or where pleadings are bad in law in that their contents do not support a discernible and legally recognised cause of action, that an exception was competent. Thus, the burden rests on an excipient, who must establish that on every interpretation that could reasonably be attached to it, the particulars of claim are excipiable. The test was whether, on all possible readings of the facts, no cause of action might be made out; it being for the excipient to satisfy the court that the conclusion of law for which the plaintiff contended cannot be supported on every interpretation that could be put upon the facts. In addition, the SCA held that a court must be satisfied that a novel claim was necessarily inconceivable under our law as potentially developed under s 39(2) of the Constitution before it could uphold an exception premised on the alleged non-disclosure of a cause of action. Moreover, the SCA found that, this case indeed involves, as was expressly conceded on behalf of the respondents, ‘an unprecedented and novel delictual claim’. According to the SCA, the high court appeared to have construed a single exception explicitly premised on an alleged failure to plead that the defendants are the ‘cause’ of the plaintiff’s losses, as forming two separate exceptions (factual causation and legal causation). Furthermore, the SCA held that the high court did not properly analyse any of the seven multitier issues raised in the exception. It referred only to three, but without conducting a thorough analysis of any or even considering whether the criticisms satisfied the applicable legal test for exceptions. According to the SCA, the high court appeared to have misconceived the test. The SCA accordingly upheld the appeal and substituted the order of the high court with one dismissing the causation exception. In dealing with the respondents’ cross-appeal: The SCA held that the dismissal by the high court of the legal duty exception was not appealable. Insofar as the conditional condonation application was concerned, the SCA held that the high court’s order on that score was likewise not appealable. As a result, the cross-appeal fell to be struck from the roll. ~~~~ends~~~~

2436

non-electoral

2013

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 891/2012 Not Reportable In the matter between: MORNÈ BARNARD Appellant and THE STATE Respondent Neutral citation: Barnard v The State (891/2012) [2013] ZASCA 75 (29 May 2013) Coram: MPATI P, THERON and PILLAY JJA and WILLIS and ERASMUS AJJA Heard: 02 May 2013 Delivered 29 May 2013 Summary: Criminal Procedure – Leave to appeal – Where an accused obtains leave to appeal against the refusal in a high court of a petition seeking leave to appeal against a conviction and sentence in the regional court, the issue is whether leave to appeal should have been granted by the high court and not the appeal itself – the test is whether there is a reasonable prospect of success on appeal. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Free State High Court, Bloemfontein (A Kruger and KJ Moloi JJ sitting as court of appeal): The appeal is dismissed. ________________________________________________________________ JUDGMENT ________________________________________________________________ THERON JA (MPATI P, PILLAY JA and WILLIS and ERASMUS AJJA concurring): [1] The appellant stood trial on three charges, namely rape, common assault and unlawfully pointing a firearm in the regional court, Welkom. On 23 March 2010, he was convicted of rape and sentenced to 15 years’ imprisonment. [2] It is necessary to consider the nature and ambit of this appeal. This court, in S v Khoasasa 2003 (1) SACR 123 (SCA) held that the refusal of leave to appeal to a high court by judges of that court, constitutes a final order of a provincial division against which an appellant, either with the leave of the high court or this court, could appeal. [3] Where a person obtains leave to appeal to this court against the refusal in a high court of a petition seeking leave to appeal against a conviction or sentence in the regional court, as is the case here, the issue before the court is whether leave to appeal should have been granted by the high court and not the merits of the appeal.1 This is the position as this court does not have authority to entertain an appeal directly from the regional court.2 [4] It is trite that the test in regard whether leave to appeal should have been granted by the high court is whether there are reasonable prospects of success on appeal – whether a court of appeal could reach a different conclusion to that of the trial court. [5] In order to determine whether the appellant has prospects of success on appeal, it is necessary to briefly examine the merits. It is neither necessary nor desirable to deal with the merits in great detail.3 The facts giving rise to the prosecution and conviction of the appellant are largely common cause. During the early hours of 28 June 2008, the appellant was driving his motor vehicle in the town of Virginia, in the Free State, when he picked up the complainant, who had signalled that she was looking for a lift. They travelled to the appellant’s home where they had sexual intercourse. The question before the trial court was whether the intercourse was consensual or not. The appellant’s version was that the intercourse was consensual and he believed that the complainant was a prostitute. [6] On appeal, it was contended, on behalf of the appellant, that the high court ought to have found that there is a reasonable possibility that another court might find that the trial court erred in two respects. First, in rejecting the appellant’s version as not being reasonably possibly true. Secondly, in not approaching the evidence of the complainant with the necessary caution and merely paying lip service to the cautionary rule. The reasons stipulated by the magistrate for rejecting the version of the appellant, were (1) the evidence did 1 Matshona v S [2008] 4 All SA 68 (SCA) para 5. 2 S v N 1991 (2) SACR 10 (A) at 16a-e; S v Khoasasa 2003 (1) SACR 123 (SCA) para 12; Matshona v S [2008] 4 All SA 68 (SCA) para 3. 3 De Sousa v S [2012] JOL 29000 (SCA) para 9. not support the alleged belief held by the appellant that the complainant was a prostitute; (2) neither the nature of the services to be rendered nor the price to be paid was discussed; and (3) crucial aspects of the appellant’s version were not put to the complainant, such as that the complainant had placed her hand on his thigh shortly after entering the motor vehicle, that she had enjoyed the sexual intercourse and that the sex had been rough (‘rowwe seks’). In accepting the evidence of the complainant, the trial court found that she was an impressive witness, that her evidence was corroborated in material respects and in particular by the medical evidence. I am not persuaded that the magistrate was wrong in the assessment of the evidence and accordingly am not satisfied that there exists a reasonable possibility that an appeal court can reach a different conclusion in respect of the conviction. [7] The following factors have a bearing on whether there are reasonable prospects of success in respect of sentence. The appellant was 34 at time of his trial, with a previous conviction for assault. He was employed by the South African Police Service as a police officer. He had suffered financially since the charges were brought against him as he had been suspended for a period. He would probably, and in consequence of his conviction, be dismissed from his employment. There are a number of aggravating factors in this matter namely (a) although he was off-duty at the time, the appellant was a police officer who was supposed to protect and serve the community; (b) the complainant trusted him and he abused this trust; (c) a firearm was used to threaten the complainant; (d) the complainant sustained physical injuries as well as psychological trauma in consequence of the rape; and (e) rape is a serious and extremely prevalent offence. Having regard to the nature and circumstances of the offence, the personal circumstances of the appellant as well as the interests of the community, I am not persuaded that another court might find that the sentence of 15 years’ imprisonment is unduly excessive or shockingly inappropriate. [8] In the result, the appeal is dismissed. ______________ L V THERON JUDGE OF APPEAL APPEARANCES For Appellant: J Nel SC Instructed by: Pie-Ér Huggett Incorporated, Bloemfontein For Respondent: S Goirgi Instructed by: The Director of Public Prosecution, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF APPEAL 29 May 2013 STATUS: Immediate MORNÈ BARNARD and THE STATE Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal Today the Supreme Court of Appeal (SCA) dismissed an appeal against the refusal of a petition in the high court for leave to appeal to that court against a conviction and sentence imposed in the regional court. The appellant stood trial on three charges, namely rape, common assault and unlawfully pointing a firearm in the regional court, Welkom. On 23 March 2010, he was convicted of rape and sentenced to 15 years’ imprisonment. On that same day he applied, in terms of s 309B of the Criminal Procedure Act 51 of 1977 (the Act), for leave to appeal against his conviction and sentence. The trial court refused the application. Thereafter, and in terms of s 309C of the Act, he applied to the Judge President of the Free State Provincial Division, for such leave. The petition to the high court was refused by two judges (Kruger and Moloi JJ). The question before the trial court was whether the intercourse was consensual or not. The appellant’s version was that the intercourse was consensual and he believed that the complainant was a prostitute. The SCA held that it was not persuaded that the magistrate was wrong in the assessment of the evidence. It was also not satisfied that there exists a reasonable possibility that an appeal court can reach a different conclusion in respect of the conviction. In respect of sentence, the SCA found that, having regard to the nature and circumstances of the offence, the personal circumstances of the appellant as well as the interests of the community, it was not persuaded that another court might find that the sentence of 15 years’ imprisonment is unduly excessive or shockingly inappropriate. --- ends --

10

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 925/2015 In the matter between: WESTMINSTER TOBACCO CO (CAPE TOWN AND LONDON) (PTY) LTD APPELLANT and PHILIP MORRIS PRODUCTS S.A. FIRST RESPONDENT THE REGISTRAR OF TRADE MARKS SECOND RESPONDENT PHILIP MORRIS BRANDS SARL THIRD RESPONDENT Neutral citation: Westminster Tobacco Co v Philip Morris Products SA (925/2015) [2017] ZASCA 10 (16 March 2017) Coram: LEACH, WALLIS, PETSE and ZONDI JJA and MBATHA AJA Heard: 23 February 2017 Delivered: 16 March 2017 Summary: Expungement of trade mark for non-use in terms of s 27(1(b) of the Trade Marks Act 194 of 1993 – test for bona fide use of a trade mark – factual enquiry. ORDER On appeal from: Gauteng Division, Pretoria of the High Court (Louw J, sitting as court of first instance): 1 The appeal is upheld with costs, such costs to be paid by the first respondent and to include those consequent upon the employment of two counsel. 2 The order of the High Court is set aside and replaced by the following: ‗The application is dismissed with costs, such costs to be paid by the first respondent and to include those consequent upon the employment of two counsel.‘ JUDGMENT Wallis JA (Leach, Petse and Zondi JJA and Mbatha AJA concurring) Introduction [1] The only issue in this appeal is whether the appellant, Westminster Tobacco Company (Cape Town and London) (Pty) Ltd (Westminster), proved that, during the period of five years prior to and expiring on 22 July 2008, it made bona fide use of the trade mark PARLIAMENT on cigarettes. If it did not do so, the two registered trade marks it held for that mark, being trade mark registration number 1952/00688 PARLIAMENT and trade mark registration 1997/17613 PARLIAMENT (label), were liable to expungement in terms of s 27(1)(b) of the Trade Marks Act 194 of 1993 (the Act). The challenge to the continued registration of the marks came from the first respondent, Philip Morris Products SA (Philip Morris). It successfully claimed in the High Court1 (Louw J) that Westminster had not made bona fide use of the marks and obtained an order for their removal from the trade marks register. The appeal is with the leave of the High Court. [2] Westminster is a wholly owned subsidiary of British American Tobacco South Africa (Pty) Ltd (BATSA), which in turn is a wholly owned subsidiary of British American Tobacco Holdings South Africa (Pty) Ltd. All three are companies in the British American Tobacco group of companies (the BAT group), one of the largest suppliers of cigarette and tobacco related products in the world. The group‘s trading activities in South Africa are conducted through BATSA and, in dealing with the alleged use of the marks, I will refer to BATSA on the footing that the use it made of the marks was authorised use. Philip Morris is a company in the Philip Morris International group of companies (the PMI group) that, like the BAT group, is a major international manufacturer and supplier of cigarettes and tobacco related products. [3] The conflict between these two multinational groups arises because the PMI group uses the trade mark PARLIAMENT internationally in respect of one of its premier brands of cigarettes, but is unable to do so in South Africa. In 2006, a company in the PMI group, Philip Morris Brands SÀRL, applied for a trade mark registration under application number 1 The application was initially before the Registrar of Patents but was referred to the High Court in terms of s 59(2) of the Act. 2006/02685 for the mark PARLIAMENT. It could not obtain registration because Westminster was registered as the proprietor of the two marks in issue. Both registrations were in class 34 in respect of cigarettes and other tobacco related products. On the basis of its application for registration, Philip Morris Brands SÀRL sought and obtained leave to intervene in the appeal as a third respondent, although its intervention did not affect the conduct of the appeal. The Registrar, who was cited as the second respondent, played no part in the proceedings below or in this court. [4] On 22 October 2008 Philip Morris brought its application in terms of s 27(1)(b) of the Act for the rectification of the register by the removal of Westminister‘s two marks on the grounds of non-use. Under the section the marks were liable to be removed from the register if, for a continuous period of five years prior to and expiring on 22 July 2008, there was no bona fide use thereof in relation to the goods or services in respect of which they were registered.2 The onus of proof of bona fide use rested upon Westminster in terms of s 27(3) of the Act. The law [5] The concept of bona fide use of a mark has received the attention of our courts on various occasions. There is no need to rehearse the 2 The section reads in material part: ‗ … a registered trade mark may, on application to the court, … by any interested person, be removed from the register in respect of any of the goods or services in respect of which it is registered, on the ground either— (a)… (b) that up to the date three months before the date of the application, a continuous period of five years or longer has elapsed from the date of issue of the certificate of registration during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods or services by any proprietor thereof or any person permitted to use the trade mark as contemplated in section 38 during the period concerned;‘ jurisprudence in this regard. It suffices to cite the following passage from the judgment in A M Moolla Group v The Gap:3 ‗The concept of bona fide use has been the subject of a number of judgments, also of this Court, and the area need not be traversed again. For present purposes, it suffices to say that ―bona fide user‖: ― means a user by the proprietor of his registered trade mark in connection with the particular goods in respect of which it is registered with the object or intention primarily of protecting, facilitating, and furthering his trading in such goods, and not for some other, ulterior object‖4 This test is similar to that proposed in an opinion by the Advocate General in the European Court of Justice in the Ansul case: ―When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark.‖‘ [6] I add one further quotation from the decision in Ansul:5 ‗―Genuine use‖ must therefore be understood to denote use that is not merely token, serving solely to preserve the rights conferred by the mark. Such use must be consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin. 3 A M Moolla Group Ltd and Others v The Gap Inc and Others 2005 (6) SA 568 (SCA) para 42. There is a full collection of the authorities in Arjo Wiggins Ltd v Idem (Pty) Ltd and Another 2002 (1) SA 591 (SCA) para 6 and see The Gap Inc v Salt of the Earth Creations (Pty) Ltd and Others 2012 (5) SA 259 (SCA) paras 3 - 7. 4 The quotation is from the judgment of Trollip J in Gulf Oil Corporation v Rembrandt Fabrikante en Handelaars (Edms) Bpk 1963 (2) SA 10 (T) 27G-H. 5 Ansul BV v Ajax Brandbeveiliging BV 2003 (RPC) C-40/01 paras 36 and 37 … Use of the mark must therefore relate to goods or services already marketed or about to be marketed and for which preparations by the undertaking to secure customers are underway, particularly in the form of advertising campaigns.‘ [7] In summary, bona fide use is use of the trade mark in relation to goods of the type in respect of which the mark is registered. The use must be use as a trade mark, for the commercial purposes that trade mark registration exists to protect. It must be use in the course of trade and for the purpose of establishing, creating or promoting trade in the goods to which the mark is attached. The use does not have to be extensive, but it must be genuine.6 Genuineness is to be contrasted with use that is merely token, but the line is a fine one, because the use may be minimal.7 It may in part be prompted by the fear of removal from the register and be directed at protecting the proprietor‘s trade generally or preventing the mark from falling into the hands of a competitor. Provided, however, the use is bona fide and genuine and principally directed at promoting trade in goods bearing the mark, these further purposes however important, are irrelevant.8 What is impermissible is: ‗ ... user for an ulterior purpose, unassociated with a genuine intention of pursuing the object for which the Act allows the registration of a trade mark and protects its use …‘.9 Whether use of the mark was bona fide is a question to be determined on the facts of the particular case. 6 The Gap supra paras 5-7. 7 La Mer Technology Inc v Laboratoires Goemar SA [2004] FSR 38; Laboratoires Goëmar SA v La Mer Technology Inc [2005] EWCA Civ 978; [2005] All ER (D) 493 (Jul) In that case the Court of Appeal in England held that five or six sales to a distributor amounting to about £800, with no proof of sales to the public, involved genuine use of the mark. 8 Electrolux Ltd v Electrix Ltd (1954) 71 (2) RPC 23 at 35-36; Oude Meester Groep Bpk & Another v SA Breweries Ltd; SA Breweries Ltd & Another v Distillers Corporation (SA) Ltd & Another 1973 (4) SA 145 (W) 151B-D. 9 Gulf Oil Corporation v Rembrandt Fabrikante en Handelaars (Edms) Bpk 1963 (3) SA 341 (A) 351E-G. The launch of PARLIAMENT cigarettes [8] Turning then to the facts, before 2007 BATSA did not use the PARLIAMENT mark on any cigarettes or tobacco related products. In September 2007 it caused one million cigarettes (‗sticks‘ in the parlance of the trade) to be manufactured for the purpose of being sold under the PARLIAMENT mark. In the latter stages of October 2007 a launch was planned of PARLIAMENT cigarettes in the Cape Peninsula to take place in December 2007. It was, however, aborted. According to Ms Heglund, the principal witness for BATSA, this was because the launch of a new product in that area would have interfered with a far more important project, namely a policy of direct selling to stores (the DSS policy), which involved a substantial change to BATSA‘s method of supplying retail outlets. Previously it had done this through a relatively small group of wholesalers, but the change contemplated BATSA undertaking direct deliveries to retail outlets. [9] The first launch of cigarettes under the PARLIAMENT mark occurred in Upington from 17 January 2008. The cigarettes were initially placed in twenty retail outlets identified by Mr Nel, a sales representative in Upington, as being shops that predominantly served the low price end of the market. This sales effort in the Upington area did not last long – a few weeks at most. In May 2008 a price card was issued showing the prices at which PARLIAMENT cigarettes could be sold and on 2 June 2008 sales were expanded to retail outlets in the Bloemfontein and Welkom areas. In August 2008, after the expiry of the relevant period, sales of PARLIAMENT cigarettes were also extended to Gauteng. The mark was used on cigarettes for a few years until 201210 and sales extended to some other areas including the Eastern Cape, the whole of Gauteng and the Southern Cape. Overall the brand did not become a particularly successful product. We were furnished with a schedule showing sales of about 1.5 million cigarettes in 2008; slightly less than 10 million in 2009 and nearly 15 million in 2010, which is tiny in relation to a market measured in the billions of cigarettes every year. A production record produced by BATSA suggested that production was anticipated to tail off in 2011 and subsequent years and according to Mr Joubert‘s evidence sales of PARLIAMENT cigarettes ended in 2012. BATSA’s initial case [10] BATSA‘s case underwent a marked transformation in the course of the litigation, precipitated by the discovery of a document in the days immediately preceding the commencement of the trial. I will deal with the change in due course, but at this stage will consider the case as originally advanced by BATSA. The answering affidavit was deposed to by Ms Heglund, who was at the time a marketing manager (Southern African markets) of BATSA with responsibility for its portfolio of cigarette brands in the mid and low price ranges at the relevant times.11 She said that, at the time of her affidavit in 2009, mid-price cigarettes were priced at between R14 and R18 for a pack of 20 cigarettes. The low price range was between R10 and R14 for a similar-sized pack. BATSA faced particular issues in the low price segment of the market because of the presence of counterfeit cigarettes and illicit cigarettes, that is, those 10 BATSA produced sales data for the period from 2008 to 2010. A Nielsen Brand Analysis shows sales continuing until 2012. 11 BATSA treated the cigarette market as stratified into four segments, namely, premium, popular, mid- price and low price. It had different brands in the first three but historically had no brand that fell in the low price segment. The nearest was PRINCETON but it was priced at a level that meant it could not compete with low price offerings. that had been introduced into the market unlawfully without the payment of excise duties. BATSA already held the three dominant brands in the mid-price range, in the form of ROYALS, EMBASSY and PRINCETON. But it had no brand in the low price sector of the market, where there were some 20 brands of which, according to her, ASPEN and LD were the leading brands. In fact another brand, VOYAGER, featured prominently in the evidence. [11] Ms Heglund explained the introduction of the PARLIAMENT brand in the following terms: ‗The PARLIAMENT cigarette brand has been positioned by BATSA as an important new brand in the Low price sector. A key factor in the Value portfolio is pricing. It is imperative to set the pricing strategy correctly to compete properly in the legitimate Mid and Low price sectors. The price must be low enough to be attractive to the consumer while, at the same time, providing a meaningful margin to the retailer. BATSA has a separate Anti Illicit Trade (AIT) operation which deals with the illicit cigarette market. While BATSA is well positioned in the Value portfolio (Mid price products) with its brands ROYALS, EMBASSY, and PRINCETON, it would not be good practice to re-categorise one of the existing brands into the Low sector. Best practice is to introduce a new brand and PARLIAMENT was chosen for this purpose.‘ [12] Ms Heglund described the initial launch of PARLIAMENT cigarettes in Upington and said that this was aimed at gaining insights into and enhanced understanding of PARLIAMENT in the low price segment, in order to develop ‗long-term sales and marketing strategy‘ for the brand. She explained that, after the initial launch, sales of the brand were extended to the Bloemfontein and Welkom areas and, in August 2008, to Gauteng. After referring to the fact that sales figures nationally were in the region of one million cigarettes, she concluded as follows: ‗Considering that the PARLIAMENT brand was only launched in January 2008, and has since then progressively been introduced to the national market through targeted low price outlets, the objectives behind the Respondent‘s launch strategy have been realised. The insights gained from this introductory period have contributed immensely to the Respondent developing a commercially viable long-term strategy for the PARLIAMENT brand.‘ [13] A somewhat different picture was painted in a witness statement for the legal counsel to companies in the BATSA group, Mr Joubert. This statement was delivered during preparation for the trial, in terms of an order that witness statements be exchanged between the parties. He explained in some detail that there was a problem in South Africa with counterfeit and illicit cigarettes and that this problem had worsened between 2005 and 2008. According to his statement: ‗The exploitation of the PARLIAMENT product was aimed at curbing this trend.‘ [14] Philip Morris‘ response to this was to deliver a witness statement by an employee, Ms Fleming, apparently on the basis that she was an expert in the correct or normal approach to the launch of a new brand of cigarettes in the market. In a detailed analysis of the discovered documents she expressed forthright criticism of Ms Heglund‘s explanation in her answering affidavit concluding that: ‗… this was not a genuine launch to further the legitimate commercial interests of the Respondent and to gain any insight into the low price sector‘. I have my doubts as to the admissibility of much of Ms Fleming‘s evidence, which appeared in many respects to be an attempt to provide the court in advance with an outline of counsel‘s argument and to answer the very question that it was for the court to decide, but no point was made of this in argument and ultimately there was virtually no reference to her evidence for the purposes of this appeal. [15] Much of the cross-examination in the high court, as well as the evidence lead by Philip Morris, was directed at showing that these explanations for the launch of PARLIAMENT cigarettes were spurious and that the true reason was to protect the trade marks and nothing more. Likewise the heads of argument in this court included an extensive analysis of the evidence with a view to demonstrating that these explanations could not be truthful. The conclusion was that: ‗Examination of the actual ―test‖ market for PARLIAMENT cigarettes reveals that the Appellant‘s stated objective was a fiction and was in fact not carried out. The Appellant‘s very account of the launch is not bona fide as demonstrated hereunder.‘ A further analysis of the evidence with extracts from documents and oral testimony, attached as a schedule to the heads of argument, pursued the same theme and concluded that: ‗… as is evident from the above summary of the evidence presented in the matter, the only inference that can be drawn is that BATSA‘s use of the PARLIAMENT trade mark was solely for the purposes of avoiding the trade mark being cancelled on the basis of non-use.‘ [16] Had the case rested on the original explanations by Ms Heglund and Mr Joubert, BATSA may well not have discharged the onus that rested upon it of showing bona fide use of the marks. Those explanations were inconsistent with BATSA‘s own documents and the concessions these two witnesses made under cross-examination in regard to them. In the absence of a plausible explanation for the launch of the PARLIAMENT brand BATSA may well have had difficulty in discharging the burden of proving bona fide use of the marks. The suspicion, supported by a number of references in the documents, that the use of the PARLIAMENT mark was directed at the preservation of the marks on the register and nothing else may not have been dispelled. BATSA’s case at trial [17] But BATSA‘s case did not rest on the original explanations. When properly analysed it was based on an entirely different explanation of the launch of PARLIAMENT cigarettes. It took that new direction after Ms Heglund, who was no longer an employee of BATSA, fortuitously discovered a document that she had been asking the company to produce. Searches at the company had failed to unearth it, but she found it on a memory stick inside an old handbag of hers, when her child was playing with the handbag. It contained a presentation made by the local BATSA marketing team in relation to concerns they had about the growth of the low price segment of the market. The presentation was made in December 2006 to the Africa Middle East group (the AME group) within BATSA‖s international operations. The AME group consisted of the regional director responsible for Africa and the Middle East and a team that accompanied him. It met with a local group lead by the head of strategy in South Africa, Ms Steyn. [18] The presentation addressed the problems being experienced in the cigarette market in South Africa. Studies revealed a trend of reduced sales generally, but increasing sales in the low price market and sales of illicit cigarettes. These trends posed a threat to BATSA‘s business, as smokers who were experiencing difficult economic times were moving from the popular and mid-price segments of the market towards the low price sector. BATSA had never particularly traded in the low price sector of the cigarette market. Its principal brand, Peter Stuyvesant, was positioned as a popular brand between the mid-price and the premium sectors of the market and represented forty five percent of all cigarettes sold in South Africa. BATSA‘s fear was that, if it introduced a quality low price cigarette into the market, its effect would primarily be to draw smokers away from Peter Stuyvesant towards the less profitable low price brand, rather than gaining market share from the plethora of low price brands that had come into the market. An analysis it had done on the likely impact of re-categorising Pall Mall, one of its existing brands, as a low- price brand suggested that whatever competitive advantage it gained as against low-price competitors would be offset by a significant level of cannibalisation of the Peter Stuyvesant brand. These problems were highlighted in the presentation [19] The final page of this document is headed ‗outcome of the discussion‘. Ms Heglund testified that Ms Steyn, who was present and was head of strategy at BATSA, typed it at the end of the meeting. Counsel for Philip Morris accepted that this was so and that the document was genuine and reflected the outcome of the discussions at that meeting. Ms Steyn‘s note read as follows: ‗LOW  Do not enter given profit erosion  Tactical execution ILLICIT  Continue with AIT strategy and government engagement is KEY  Do not manage through pricing strategies.‘ [20] The heading ‗LOW‘ related to the low price sector of the market and the heading ‗ILLICIT‘ to the counterfeit and duty avoiding sector. The clear statements under the latter head put paid to Mr Joubert‘s suggestion that one of the purposes of the launch of the PARLIAMENT brand was to deal with the problem of illicit sales. He accepted this in a supplementary witness statement delivered on the Friday before the commencement of the trial and again in his oral evidence. [21] The first entry under the heading ‗LOW‘ reflected a clear decision not to enter the low-price sector of the market, because of the risk of profit erosion arising from the cannibalisation of the Peter Stuyvesant brand. This was compatible with the outcome of the marketing and strategy team‘s analysis of the situation as reflected in the presentation. That left the possibility of ‗tactical execution‘. The meaning, purpose and implementation of this decision assumed central importance in the conduct of the trial and the arguments that were addressed to us. [22] Although, as was repeatedly emphasised in both written and oral argument, the case presented by BATSA at the trial was transformed by the discovery and production of this document, it could not have come as a complete surprise to Philip Morris. Its vastly experienced legal team did not think it necessary to seek an adjournment to reflect on its implications. No doubt that was because the bundle already contained documents, to which I will turn in a moment, which used the expression ‗tactical execution‘ or a similar expression. Ms Fleming‘s witness statement expressly recognised that there was an intention to use it for that purpose, although she dated it to August 2009 and a re-launch of the PARLIAMENT brand.12 She also analysed the documents referring to the use of the brand for tactical purposes. But for so long as BATSA continued to run its case in accordance with Ms Heglund‘s answering affidavit these documents did no more than rebut that case. It was only once the summary of the decisions at the meeting with the AME group in December 2016 emerged that they assumed far greater significance. 12 Her statement read: ‗In August 2009, PARLIAMENT was re-launched within the BATSA portfolio as a tactical market brand to be used to disrupt low price competitor brands with its brand strategy based solely on pricing. [23] While the discovery and production of this document by Ms Heglund caused her a measure of discomfiture under cross-examination, the fact that she sought it out and produced it, even at a late stage when she must have been preparing to give her evidence, reflected favourably on her honesty and credibility. Had she been dishonest it would have been the simplest thing in the world to suppress it and carry on as before. After all, that was what her erstwhile employer was expecting. Instead she asked for it and, having discovered it by accident, produced it and it was made available to Philip Morris. It occasioned a measure of discomfiture because BATSA‘s legal team sought to run the case on the basis that the tactical execution referred to in the document and explained by her in evidence was consistent with her original affidavit. This was exploited in cross-examination because the inconsistency was apparent. It may have been preferable for BATSA to accept that what she had said originally was incorrect, and live with the consequences. But that is possibly the wisdom of hindsight emanating from one who no longer has responsibility for the conduct of trials on behalf of clients. [24] Ms Heglund not only explained what was meant and understood by the strategy and marketing team by ‗tactical execution‘, but testified that this was the nature and purpose of the launch of PARLIAMENT. She said it meant that instead of a national launch of a single product in the low price section of the market they would consider, evaluate and investigate tactical options. No single brand in the low price sector had a very large market share and therefore it was possible to take a brand tactically into areas where there was specific low price activity or ‗hot spots‘ in the market, and attempt to reduce the opposition in those specific areas. The idea was to disrupt ‗opposition traction‘ in the environment and to distract the consumer by making a further choice available. Philip Morris’ case [25] Philip Morris‘ case, as articulated in its heads of argument, was that the only inference that could be drawn from the evidence was that BATSA‘s use of the PARLIAMENT mark was solely for the purpose of avoiding its removal from the register. In advancing this argument, stress was laid on the fact that Mr Joubert was aware of the risk that the registration of the mark might otherwise be lost, and had suggested using the PARLIAMENT mark. Furthermore, documents discovered by Westminister emphasised the need to launch the product in time to prevent the mark from being deregistered. A launch presentation dated 14 December 2007 said that BATSA needed to demonstrate use of the mark before April 2008. The same presentation recorded that PMI was the international trade mark owner. Protection of the trade mark was manifestly one of the objectives of the launch. Philip Morris argued that BATSA had failed to demonstrate any other legitimate trade objective and, to this end, placed evidence before the High Court to show that the steps taken to place PARLIAMENT cigarettes in the market were not those ordinarily attendant upon the launch of a new cigarette. This evidence was largely uncontested, save in regard to its relevance. Lastly, Philip Morris launched a sustained attack on the credibility of the principal witnesses for BATSA, namely, Mr Joubert and Ms Heglund, and their evidence concerning the purpose of the launch of the PARLIAMENT brand. [26] Philip Morris attacked Ms Heglund‘s evidence on the basis that the manner in which the launch was conducted from January to July 2008 and thereafter, would not have served the purposes she outlined. The argument proceeded as follows. The initial launch in Upington, in 20 outlets selected by Mr Nel, was unscientific and an inadequate sample for information purposes. It was not undertaken with any degree of vigour or enthusiasm, nor had it an adequate budget. Moreover, Upington was an isolated place to launch a brand with this tactical purpose. If indeed that were truly the purpose, the launch should have been undertaken in a major urban area, particularly if useful information was to be derived from it. There was no market research of the smoking preferences of the target group and no follow up when reports were received that the target group did not like the taste of PARLIAMENT cigarettes. Once the launch took place there was no proper follow-up with retailers or consumers. The information that was obtained was so limited and superficial in nature that it was effectively valueless. Fairly rapidly the launch fizzled out in that area. The launch was then pursued in the Bloemfontein and Welkom areas, in the same desultory fashion, which suggested a concern to dispose of the initial stock of one million cigarettes before they became stale, rather than a desire to establish the PARLIAMENT brand. [27] I accept that, in contrast to the introduction of other brands by BATSA, the launch of PARLIAMENT was characterised by hesitation, a lack of planning and follow-up and a failure to follow the usual course for such a launch. But the use of a mark does not cease to be bona fide because it is characterised by inefficiency, incompetence or failure. The only question is whether it was genuinely used for trade mark purposes. If a large and successful commercial organisation, such as BATSA, mishandles a product launch or conducts it in a fashion that to industry experts seems sloppy, amateurish and unlikely to succeed, that may be an important factor in considering whether it was a bona fide attempt to launch a product using the mark in issue. Such conduct may well aim at disguising an intention to put the mark on a product in the market solely to protect it against a rival and not to trade using that mark. It cannot, however, be decisive where the evidence indicates that there was in fact a genuine intention to launch the product using the mark for commercial purposes. So it becomes necessary to weigh Philip Morris‘ criticisms against the evidence pointing to a genuine intention to use the PARLIAMENT mark in the manner outlined by Ms Heglund in her evidence. Credibility [28] In the High Court Philip Morris submitted that Ms Heglund was an unsatisfactory witness. Louw J did not accept this criticism. He agreed that what was said in her affidavit about a nationwide launch of a new brand in the low price sector of the market was inconsistent with her oral evidence about targeted entry into low price hot spots of limited duration with the object of disrupting the business of legal competitors, while protecting the Peter Stuyvesant brand. But in the very next paragraph of his judgment he went on to say that he accepted her evidence that the latter was indeed the intention of BATSA in launching the PARLIAMENT brand of cigarettes. [29] Philip Morris accepted that an appeal court does not lightly overturn credibility findings by a trial court, but nonetheless in its heads of argument launched a forthright and direct attack on Ms Heglund‘s credibility. It said that she was an ‗unsatisfactory witness‘, and that there were various aspects of her evidence ‗which are not credible‘, in particular where her oral evidence did not coincide with the contents of her affidavit. She was criticised for her failure to make concessions in cross-examination and some of her evidence was described as manifestly false. Her evidence that the initial launch was a test was debunked. In conclusion it was submitted that: ‗Faced with the damaging discovered documents which were clearly at odds with the original answering affidavit of Ms Heglund, the Appellant was forced to ―invent‖ a more plausible explanation for the use. But even the version ultimately advanced in oral testimony as to the intent behind those ―test‖ launches cannot survive scrutiny, and is false in material respects.‘ More forthrightly it was said that ‗the intent to disrupt is fictitious‘. [30] The attack on Ms Heglund‘s credibility was couched in terms that could only be understood to suggest that she was a dishonest witness and that her version, of using PARLIAMENT as a brand directed at the low price sector of the market on a tactical basis to disrupt the activities of low price competitors, was untruthful. However, in oral argument, leading counsel for Philip Morris disavowed any attack on Ms Heglund‘s honesty. The concession was correctly made, but it made it difficult to maintain the argument that PARLIAMENT was introduced for the sole purpose of protecting the marks. Her evidence during the trial could not be dismissed as an error of recollection or attributed to mistake occasioned by the passage of time. Either the PARLIAMENT brand was launched for the reasons she described, however imperfectly implemented, or those reasons were nothing but a facade to disguise the true purpose, which was protecting the trade marks. If the latter was the case then she, as the person responsible for the launch of the brand and its marketing, must have been a party to the deceit and her evidence was untruthful. [31] There is no reason to depart from Louw J‘s acceptance of Ms Heglund‘s oral evidence concerning the reasons for the launch of the PARLIAMENT brand. In para 23 I drew attention to the fact that the circumstances of the discovery and disclosure of the memory stick and the presentation to the AME group reflected well on her honesty. The legitimate criticisms directed at her evidence arose from the attempt to suggest that her oral evidence was compatible with her answering affidavit. That was an unfortunate, if all too human, approach. [32] The decisive evidence in support of Ms Heglund‘s credibility lay in Ms Steyn‘s summary of the decisions taken at the AME meeting in December 2006 and in the very documents that Ms Fleming analysed and criticised in her witness statement. The summary reflected a decision that the approach to be adopted in the low price segment of the market was not to introduce a brand to compete across the sector in the conventional way, but to engage in ‗tactical execution‘. The documents show that this decision was not ignored. The production of PARLIAMENT cigarettes commenced from July 2007 with differing product specifications and pack designs for filter and lights being commissioned. In September 2007 the brand was entered with SARS for excise purposes. [33] The purpose of this was dealt with in a presentation on the launch of PARLIAMENT dated 14 December 2007. It set out three objectives other than the launch itself, namely, to protect the trade mark, to test the commercial viability of a low price offer and finally, to gain insight into the low price segment. Presumably the author of the presentation thought that all three objectives mattered. None was prioritised ahead of the others. There is no suggestion that the latter two were subtly slipped in to provide plausible protection at a later stage against an application for expungement of the marks. Any such suggestion would have required the collaboration of a number of individuals, both high and low in the hierarchy. It would have required approval to launch a loss-making product for no greater purpose than to stop an attack on two marks that had never been used and that had no brand reputation in South Africa. Mr Joubert legitimately, and with cogent reasons, poured cold water on that idea. There is not the slightest indication in the documents of this being the case. [34] A further presentation in January 2008, after the launch in Upington, set out as background the two goals of protecting the trade mark and gaining insight into low price segment dynamics. It said that the sales rate in the 20 outlets chosen by Mr Nel was too slow and that there was an opportunity to extend the test market and further illustrate use of the trade mark. This was to be done by a ‗tactical price promotion‘, echoing the decision taken at the AME meeting. It identified a tactical price promotion in the Free State at ‗low price hot spots‘ supplied from the Bloemfontein distribution centre. One of the goals was to provide a healthy retail margin to ensure retailer buy-in and off-take. It closed with the recommendation for the national deployment of the brand ‗but tactical usage in low hot spots (clear strategic intent)‘. The Upington test market was to be closed at the end of July. [35] On 25 January 2008 at a Sales Operational Planning meeting the PARLIAMENT brand was discussed. Its launch was said to have been successful, which accorded with the reports received by Mr Nel, and the decision taken at the meeting was that: ‗Viability of increasing the brand‘s distribution to be evaluated and a decision to be taken based on findings.‘ A further report on the progress with the PARLIAMENT brand is dated 8 February 2008. The roll-out of PARLIAMENT was described as being ‗critically behind schedule‘. It was said to be twenty-three weeks past the planned project end date and only at Stage 5 released. The aim, according to the report was that there should be growth. If that was not the real intention the entire discussion at this meeting was a farce. [36] At a demand review meeting on 30 May 2008 there was a discussion concerning the Voyager brand. The minutes reflects that the: ‗Decision has been taken to tactically place Parliament in stores to compete directly with Voyager brand.‘ Ms Heglund was present at that meeting. A presentation in June 2008 was in similar terms. The last document before the cut-off date is an email that Ms Heglund sent to various people on 2 June 2008. In it she described this as having been a ‗Tactical Pricing Initiative for Parliament‘. Why would she use that expression if that were not in fact the case? And, if it was a tactical pricing initiative, it could only have been in relation to the low price area of the market. Once again reference was made to extending the test market. [37] If this was all an elaborate charade to disguise the fact that the sole purpose of launching PARLIAMENT cigarettes was to protect the trade marks, it must be asked who was orchestrating the charade. It is impossible to see how this could have been done without Ms Heglund‘s knowledge and participation. A charade would have been a particularly subtle one – a cunning plan, involving an outward openness in the frank acknowledgement of the need to protect the trade marks, while presenting a plausible scenario in which these could be used in the ordinary way to identify a brand that BATSA was inserting into the market. If it were a charade one would have expected that there would be no mention of the need to protect the trade marks. Why mention something that could be held against BATSA? There was no attack on the authenticity of these documents and no suggestion that they did not accurately represent the views of those responsible for their preparation and presentation or who were at the relevant meetings. Yet the truth, if this was indeed a charade, had to be that there was no real intention to launch a PARLIAMENT brand, or to market it, and no intention to use it to address the problems BATSA perceived in the low-price sector of the market. [38] Central to all of this would have been Ms Heglund. She would have had to have known what should be included in presentations and what excluded. She would have had to make reports, ostensibly genuine, about the launch and progress of the product, whilst being aware that a successful launch was the last thing that was wanted. Even more to the point, she would have had to be willing to give untruthful evidence and defend the reality of what she knew to be a charade if an application for expungement was made. It is hardly surprising that Philip Morris made no endeavour to delineate such an actual charade or to indicate how it could have been pursued and maintained over the five years that the brand was on sale. [39] Once it was accepted, as Louw J did, that Ms Heglund‘s evidence at the trial accurately reflected the motivation for launching the PARLIAMENT brand, the fact that there was a conscious desire to protect the marks throughout cannot detract from the fact that they were being used on a product that was to be placed in the market for a very specific purpose, targeted at a very specific sector of the market and in a way that would not be detrimental to their existing brands, especially Peter Stuyvesant. Was this use as a trade mark? [40] The case was fought out between the parties on the basis that BATSA‘s real intention in launching the PARLIAMENT brand was to protect the marks and that there was no genuine commercial purpose in doing so. No doubt that was to avoid the principle enunciated in Electrolux13 and accepted in several decisions of our courts, that bona fide use of a trade mark does not cease to be such because the user has an additional motive of protecting the mark or protecting its other business. The attempt to obtain expungement on this basis was doomed to fail in the light of the high court‘s acceptance of the evidence of Ms Heglund as to the commercial purpose of the launch of PARLIAMENT. After that it is not clear what room remained for a finding that this use did not constitute bona fide use of the marks. There had been no attack directed at the proposition that strategic use on the basis of her evidence would not qualify as bona fide use. Mr Joubert was cross-examined on legal issues around the preservation of the marks, but it was not suggested to him that this kind of use would not qualify as bona fide use. There was no indication in the record of this line of attack. [41] The expungement action was not fought on the basis of pleadings. The exchange of witness statements did not identify as an issue what became the major focus of the argument on appeal, namely, that use of the nature to which Ms Heglund testified would not constitute use as a 13 Footnote 8 above. trade mark for the purposes for which trade marks are afforded statutory protection. Even the heads of argument only mentioned this in a somewhat throwaway fashion in the penultimate paragraph. The submission was that ‗[E]ven if the Appellant‘s evidence is to be accepted insofar as a disruptive strike to interfere with the legitimate business of its competitors is concerned, such disruptive strikes cannot be described as being ―statutorily authentic‖ even if it is accepted these were aimed at protecting the PETER STUYVESANT business. There was no desire or objective to build up any commercial long term sales strategy in PARLIAMENT cigarettes and the objectives were anathema to the functions of a trade mark as defined in the Act.‘14 [42] It came as something of a surprise therefore that, in developing his argument in this court, Philip Morris‘ main line of approach was to urge upon us that the use of the PARLIAMENT mark by BATSA, in the manner described by Ms Heglund, was not trade mark usage. The concern in this regard is that, while the onus rested on BATSA to prove that its use of the mark was bona fide use, as that expression is to be understood in trade mark law, that does not mean that such proceedings do not have to be conducted in a fair way so that neither party is surprised by the stance of the other.15 However, as I conclude that the point is without merit, it is unnecessary to decide whether it was open to Philip Morris to advance it. [43] The starting point is that the mark PARLIAMENT was affixed to the cigarettes for a purpose. This was not a ‗no name‘ brand of cigarettes, 14 The same submission was made in heads in the high court. 15 Even in a court of equitable jurisdiction the disputants must (metaphorically) observe the Marquess of Queensbury‘s rules. Buthelezi & Others v Eclipse Foundries (Pty) Ltd (1997) 18 ILJ 633 (A) at 642H. but one marketed to retailers and thence to consumers under that particular name. Outlets that made repeat orders in the five years that it was on the market would have asked for it by name. So would smokers who bought it. There must have been a reasonable number of these as over 20 million cigarettes were sold. The mark satisfied the most fundamental requirement of a trade mark, namely, that of identifying the source from which the goods were derived and distinguishing it from its competitors. Had a person asking for Voyager been given PARLIAMENT, or vice versa, they would have objected that they had been given the wrong cigarettes. [44] The next point is that the use was in the very market for which the registration existed, namely, cigarettes. It was directed at a very specific segment of that market, namely, the low price sector. The intention was not to build a massive new brand that might compete with BATSA‘s other brands, especially those in the mid price or popular price range. As Ms Heglund expressed it they would not want ‗to drive [a] huge amount of equity on brand in that segment‘. Most particularly, it was not to be built up to a position where it might draw custom away from the jewel in the crown that was Peter Stuyvesant. Its primary use would be strategically in low price hot spots where there were signs of competitors building a sufficient presence to start eroding BATSA‘s overall position. But it would be necessary to ‗keep the brand ticking over‘ so as to maintain a degree of market recognition and not to treat every hot spot as if it were a launch from scratch. That is reflected in the level of sales over the five years that it was on the market. [45] In a market such as that for cigarettes, as with other similar markets, there is a commercial purpose in the manufacturer providing different offerings aimed at different sectors of the market and pricing them differently. For example, if one has the leading brand in the premium sector it gives a measure of control over price in all sectors. A diversified range of products can be targeted at different sectors, thereby enhancing sales and profits. On the other hand there are potential pitfalls. If a leading position is built up in one sector, one does not wish to imperil the profitability of that sector by providing a lower priced competitor. The sensitivity of BATSA to the standing of Peter Stuyvesant is understandable. But the fact that this precluded a full-blooded launch of a competing product in the low price segment does not mean that the launch that did occur was not genuine, albeit for a limited purpose. That launch had to take place with a product under a specific mark and PARLIAMENT was chosen for that purpose. [46] No questions were put to either Ms Heglund or Mr Joubert as to the reasons why the PARLIAMENT brand was withdrawn. Had such questions been put, we would have known whether it was decided that the strategy of attacking hot spots and trying to disrupt the market for competitors was not working. The entire exercise was a novel one in which the conventional playbook for the launch of a brand could not be applied. Whether it was even feasible to develop a brand, to play the envisaged role, was unknown. However, BATSA thought it necessary to make the attempt and they used PARLIAMENT to do so. Assuming it was a failure that cannot detract from the genuineness of the attempt. [47] Louw J reached a different conclusion. He said: ‗The basis of the decision in Rembrandt was that to constitute bona fide use, the proprietor of the mark had to use the mark upon goods with the object or intention of protecting, facilitating or furthering trade in those goods. That was not the respondent‘s object or intention. If a mark is used on goods not with the object of promoting trade in those goods as an end in itself, but with an ulterior purpose such as disrupting the business of a competitor, or protecting its trade in other goods, such use does not, in my view, constitute bona fide use of the trade mark and can therefore not be said to be statutorily authentic.‖ [48] I am respectfully unable to agree. This overlooks the point that all the legitimate commercial purposes referred to by the judge would have underpinned a decision to launch a competing product in the low price sector in the fashion Ms Fleming regarded as normal. The use of a mark on such a product would undoubtedly have been bona fide use. The fact that, for sound commercial reasons, the product was launched on a more circumspect basis with less ambitious goals cannot mean that the use of a mark on it was not bona fide. That is to introduce a quantitative and qualitative element to the enquiry into bona fide use of a mark and that would be inconsistent with the cases cited in paras 5 to 7 above. Conclusion [49] In my view therefore the use BATSA made of the PARLIAMENT marks was bona fide use in terms of the Act. In the result the appeal must succeed. In regard to costs we were asked to make the intervening party liable jointly and severally with Philip Morris for the costs, but I do not think that justified. Its intervention was purely to protect its position in regard to its attempt to register the PARLIAMENT mark and added nothing to the costs. [50] Accordingly it is ordered that: The appeal is upheld with costs, such costs to be paid by the first respondent and to include those consequent upon the employment of two counsel. The order of the High Court is set aside and replaced by the following: ‗The application is dismissed with costs, such costs to be paid by the first respondent and to include those consequent upon the employment of two counsel.‘ M J D WALLIS JUSTICE OF APPEAL Appearances Appellant: L Bowman SC (with him I Joubert) Instructed by: Spoor and Fisher Attorneys, Pretoria; and Phatshoane Henney Attorneys, Bloemfontein. First and Third Respondents: C E Puckrin SC (with him R Michau SC and L Kilmartin) Instructed by: Kisch IP, Pretoria and Webbers, Bloemfontein.

Supreme Court of Appeal of South Africa MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 16 March 2017 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Westminster Tobacco Co v Philip Morris Products SA [2017] ZASCA 10 The SCA today upheld an appeal by Westminster Tobacco Co against an order of the Gauteng Division, Pretoria of the High Court ordering the deletion of two trademarks for PARLIAMENT. The issue was whether Westminster had made bona fide use of the marks in the period of five years prior to 22 July 2008. The High Court accepted the evidence of Westminster’s main witness that the marks had been used on cigarettes that would be targeted at the low price sector of the market and used to disrupt the market of competing low price brands in selected areas, called hot spots, where they were showing growth. It held that this was not use for the purpose for which trade mark protection existed. The SCA held that it is not necessary in order to show bona fide use of a trade mark that the use must be extensive or successful. Westminster was not trying to establish a major new brand in the low price sector of the market, but to create a brand that could be used strategically in that sector. Such use constituted bona fide use. Accordingly the application for the expungement of the two marks should not have succeeded. The appeal was upheld and the order for expungement was set aside.

3963

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 1266/2021 In the matter between: OCA TESTING AND CERTIFICATION SOUTH AFRICA (PTY) LTD APPELLANT and KCEC ENGINEERING AND CONSTRUCTION (PTY) LTD FIRST RESPONDENT HONOURABLE JUDGE N P WILLIS N O SECOND RESPONDENT Neutral Citation: OCA Testing and Certification South Africa (Pty) Ltd v KCEC Engineering Construction (Pty) Ltd and Another (1226/2021) [2023] ZASCA 13 (17 February 2023) Coram: PETSE AP, MOCUMIE and CARELSE JJA, MJALI and MASIPA AJJA Heard: 11 November 2022 Delivered: 17 February 2023 Summary: Arbitration award – appeal against dismissal of application to set aside part of award – s 33(1) of the Arbitration Act 42 of 1965 – gross irregularity committed by arbitrator in making the award with respect to a substantial portion of the claim – award set aside in part and residue of the claim referred to a new arbitrator. ORDER On appeal from: Gauteng Division of the High Court, Johannesburg (Malindi J sitting as court of first instance): 1 The appeal is upheld with no order as to costs. 2 The order of the Gauteng Division of the High Court, Johannesburg, is set aside and in its place is substituted the following order: ‘1 The application to set aside the award insofar as it relates to the amounts claimed in respect of the second and third agreements succeeds. The dispute between the parties in relation to the residue of the claim arising from the second and third agreements is to be submitted to a new arbitrator to be agreed between the parties within 20 days of this order and, failing such agreement, to be appointed by the Arbitration Foundation of South Africa. No order as to costs is made.’ JUDGMENT Petse AP (Mocumie and Carelse JJA and Mjali and Masipa AJJA concurring): Introduction [1] Does the failure of the arbitrator to deal pertinently with and determine a substantial portion of a composite claim that arises from two independent agreements trigger the provisions of s 33(1) of the Arbitration Act 42 of 1965 (the Act)? If so, does this then render the resultant arbitral award insofar as it relates to such agreements susceptible to be reviewed and set aside? This is the cardinal question raised in this appeal. [2] The appellant, OCA Testing Inspection and Certification South Africa (Pty) Ltd (OCA Testing), said: ‘Yes’. On the contrary, the first respondent, KCEC Engineering and Construction (Pty) Ltd, (KCEC Engineering) said: ‘No’. The Gauteng Division of the High Court, Johannesburg (the high court) agreed with KCEC Engineering and answered both questions in the negative. It is now the task of this Court to resolve these contrasting contentions. What follows is how the dispute arose. Background [3] On three different dates, and at the instance of KCEC Engineering, three written offers were made by OCA Testing to KCEC Engineering to render advisory, technical and mechanical services for non-destructive test services to the latter’s plants in the Northern Cape, subject to certain terms and conditions as agreed between the parties upon acceptance of OCA Testing’s three offers. [4] After the conclusion of the parties’ three written agreements,1 initially their contractual relationship seemed to operate smoothly, and various tax invoices submitted by OCA Testing to KCEC Engineering from time to time were settled without demur by the latter. [5] Clause 14 of the parties’ written agreements explicitly provided, amongst other things, that ‘Any dispute or difference arising out of this Agreement shall be referred to the arbitration of a person to be agreed upon between the [parties] or, failing agreement, nominated by the President for the time being of the relevant Chartered Institute of Arbitration of Spain.’ After running smoothly for some time, disputes between the parties emerged. The deterioration in the parties’ relations culminated in KCEC Engineering refusing to settle tax invoices submitted by OCA Testing. Litigation history Arbitration tribunal [6] With an impasse having arisen and the parties’ best endeavours to break the logjam having failed to bear fruit, the parties agreed to refer their dispute to 1 The first, second and third agreements were all concluded during June 2017. arbitration before a retired judge of this Court, Justice N P Willis, who was appointed by the Arbitration Foundation of South Africa in accordance with the parties’ agreement. OCA Testing sued KCEC Engineering for payment of R2 603 729.44 in respect of services allegedly rendered during the period from 25 May 2018 to 25 August 2018. In so doing OCA Testing relied on three agreements. The aggregate sum claimed comprised three amounts. The amount of R142 002.46 had its genesis in the first agreement. The amount of R2 355 768.05 in the second agreement and the sum of R276 744.00 in the third agreement. How these three amounts were computed was not in dispute between the parties. [7] KCEC Engineering admitted that the services in relation to which the claim arose were duly provided by OCA Testing. However, KCEC Engineering disputed liability on various grounds. Briefly stated, it asserted that: (i) the services by OCA Testing were rendered late, resulting in it suffering damages; (ii) it had overpaid OCA Testing to the tune of R1 961 770.24 which it sought to recover by way of its counter-claim; and (iii) it had suffered liquidated damages in the sum of R1 646 220.00 occasioned as a result of OCA Testing’s default in breach of the latter’s contractual obligation. [8] In making his award, the arbitrator identified the issues in dispute as follows: ‘(a) Whether the claimant was obliged to deliver the CoC2 to the Defendant before payment could be made of the outstanding invoice (identified as ‘POC15’), in terms of the first agreement; (b) Whether the claimant has overcharged the defendant for services rendered in terms of the second agreement (which would result in the defendant being entitled to a rebate) by failing to meet, on a daily basis, the estimated daily production rate; (c) Whether the defendant is entitled to the delivery of videos prior to payment of any outstanding invoice in respect of the third agreement; (d) Whether the defendant’s claim for damages is time-barred; (e) Whether the claimant is responsible for the damages claimed by the defendant.’ 2 CoC is an acronym for ‘Certificate of Conformity’. [9] After an exhaustive analysis of the parties’ pleadings, the evidence presented by both sides in respect of both the claim and counter-claim as well as contentions advanced by counsel for the parties, the arbitrator dismissed both the claim by OCA Testing and the counter-claim by KCEC Engineering. It bears mentioning that the arbitrator concluded that the claim for payment of the amount of R142 002.46 in respect of the first agreement had to fail because OCA Testing had breached that agreement. Significantly, he then proceeded to hold that none of KCEC Engineering’s two counterclaims was sustainable. [10] What the arbitrator stated in the course of his award bears emphasis. He said: ‘The claimant has sought judgment for monies due in terms of its unpaid invoices. The total amount allegedly owing to the claimant is in the sum of R2 603 729.44. The defence raised to the payment of the invoices relating to the first agreement was the failure by the claimant timeously to deliver the CoC to the defendant. The evidence makes it clear that [the] claimant was indeed in breach of its agreement with the defendant by failing so to deliver the CoC and, consequently, its claim must fail.’ [11] He then continued: ‘Moreover, it may be pointed out, en passant, that the agreements were obviously not interlinked in the sense that a failure to pay an outstanding invoice due in terms of the second agreement and/or the third agreement would have the contractual consequence of not obliging the claimant to furnish the CoC in terms of the first agreement.’ [12] I pause here to observe that what the arbitrator said in the preceding two paragraphs is significant. The statements unquestionably demonstrate that the arbitrator was acutely alive to the fact that OCA Testing’s breach was in relation to the first agreement only. This is borne out by what the arbitrator said immediately after making his finding encapsulated in paragraph 10 above. He was at pains to point out that: ‘. . . the agreements were obviously not interlinked in the sense that a failure to pay an outstanding invoice due in terms of the second agreement and/or the third agreement would have the contractual consequence of not obliging the claimant to furnish the CoC in terms of the first agreement.’ (My emphasis.) I shall revert to this aspect later. [13] The arbitrator dismissed KCEC Engineering’s counter-claim for recovery of the alleged overpayment of R1 961 770.24 on the basis that such a claim was not based on the condictio indebiti and therefore had to fail. He also made short shrift of the counter-claim for R1 646 220.00, finding that at the conclusion of the parties’ agreements there was ‘no serious contemplation that [OCA Testing] may be liable for special damages’. High Court [14] A little over a month after the arbitrator’s dismissal of OCA Testing’s claim, OCA Testing instituted proceedings in the high court for the award to be reviewed and set aside in terms of s 33(1) of the Arbitration Act 42 of 1965 (the Act) together with ancillary relief. None of the two respondents entered the fray, with the consequence that the application was not opposed. [15] In due course the application served before Malindi J who dismissed it with no order as to costs. After making reference to both s 32(1) and s 32(2) of the Act, the learned Judge set out what he considered was central to OCA Testing’s claims. He proceeded to say: ‘The question that arises therefore is whether the second respondent failed to deal with the validity of the claims under the second and third agreements. The applicant contends that although the second respondent correctly identified the dispute between the parties as relating to three separate agreements, he only considered the merits of the claim for the invoices relevant to the first agreement when he started: “ . . . relating to the first agreement was the failure by the claimant timeously to deliver the CoC to the defendant.”’ [16] He then continued: ‘In my view, although the award dismissed the claimant’s claim without traversing the claims under each agreement the second respondent clearly considers the claimed globular amount which comprises claims under all three agreements . . .’ [17] Ultimately, the learned Judge concluded that ‘there was no doubt that the whole claim for R2 603 729.44, inclusive of the claims under the three agreements, is dismissed, with all claims under each agreement having been separately considered.’ Thus, the learned Judge reasoned, the arbitrator had fully understood the nature of the enquiry into the first agreement and, in the result, there was no basis to set aside paragraph 13 of the award. Subsequently, on 20 October 2021, the learned Judge granted OCA Testing leave to appeal to this Court. [18] Before us, as it was in the high court, the basis of OCA Testing’s attack of the arbitrator’s award, broadly stated, was that the arbitrator ‘could not have arrived at a conclusion to dismiss the aggregate claim’ (ie totalling R2 603 729.44) with reference to the first agreement only. This argument was predicated upon seven broad contentions, namely: (i) the amount claimed by OCA Testing was, as correctly observed by the arbitrator himself, an aggregate comprising three distinct claims arising from three different agreements; (ii) the arbitrator was cognisant of the fact that the three agreements were not interlinked; (iii) the contractual breach established in evidence by KCEC Engineering related to the first agreement only in respect of a minor portion, ie R142 002.46, of the aggregate amount; (iv) the finding by the arbitrator that KCEC Engineering, ‘evidence [made] it clear that [OCA Testing] was indeed in breach of [the first] agreement with [KCEC Engineering] by failing to deliver the CoC’ hence its claim must fail; (v) the words ‘its claim’ must, having regard to the factual matrix and viewed in context, be a reference to the first agreement which is what the arbitrator was pertinently dealing with; (vi) having regard to the fact that KCEC Engineering’s remaining defences – which would have nullified the total amount as claimed – were rejected by the arbitrator as devoid of merit, it followed axiomatically that the indebtedness in respect of the amounts arising from the second and third agreements was established; (vii) the recognition by the high court that the arbitrator dismissed the claim in its entirety, ie the whole of the globular amount, ‘without traversing the claims under each agreement’. 3 Paragraph 1 dismissed OCA Testing’s claim in its entirety. [19] In these circumstances, so went the argument, the arbitrator committed a gross irregularity in the conduct of the arbitration proceedings as contemplated in s 33(1)(b) of the Act. This, in turn, clouded the arbitrator’s mind resulting in him misconducting himself in relation to his duties as arbitrator as envisaged in s 33(1)(a) of the Act. Statutory framework [20] In pursuit of the relief it sought in the high court, and before us on appeal, OCA Testing invoked s 33(1) of the Act. To the extent relevant for present purposes s 33(1), which is headed ‘setting aside of award, provides as follows: ‘(1) Where – (a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator . . .; or (b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or has exceeded his powers; or (c) . . .; the court may, on the application of any party to the reference after due notice to the other party or parties, make an order setting the award aside.’ [21] I consider it convenient at this juncture to deal first with the current state of the law relating to the considerations that bear on the circumstances in which a court will come to the aid of a party relying on s 33(1) of the Act. Section 33(1) has been considered, albeit briefly, in many judgments of this Court and others. Some of the cases were analysed by Harms JA in Telcordia Technologies Inc v Telkom SA Ltd4 (Telcordia). In para 72, Harms JA cited a passage from the judgment of Mason J in Ellis v Morgan; Ellis v Desai5 (Ellis) in which the position was succinctly stated as follows: ‘But an irregularity in proceedings does not mean an incorrect judgment; it refers not to the result, but to the methods of a trial, such as, for example, some high-handed or mistaken action which has prevented the aggrieved party from having his case fully and fairly determined.’ 4 Telcordia Technologies Inc v Telkom SA Ltd [2006] ZASCA 112; 2007 (3) SA 266 (SCA) (Telcordia). 5 Ellis v Morgan; Ellis v Desai 1909 TS 576 at 581. [22] In the course of his judgment, Harms JA also referred to Goldfields Investment Ltd v City Council of Johannesburg6 (Goldfields), stating that an arbitrator misconceives the nature of the inquiry in instances where he or she fails to perform his or her mandate. And ‘[b]y misconceiving the nature of the inquiry a hearing cannot in principle be fair because the body fails to perform its mandate.’7 In Goldfields Schreiner J was forthright when he, with reference to Ellis v Morgan, said: ‘. . . it is not merely high-handed or arbitrary conduct which is described as a gross irregularity; behaviour which is perfectly well-intentioned and bona fide, though mistaken, may come under that description. The crucial question is whether it prevented a fair trial of the issues. If it did prevent a fair trial of the issues then it will amount to a gross irregularity.’8 [23] In Palabora Copper (Pty) Ltd v Motlokwa Transport and Construction (Pty) Ltd9 (Palabora Copper), this Court reiterated that where ‘an arbitrator engages in the correct enquiry, but errs either on the facts or the law, that is not an irregularity and is not a basis for setting aside an award.’10 This is in keeping with the abiding principle that whenever parties elect to resolve their disputes through arbitration courts must defer to the parties’ choice and not lightly intervene.11 Analysis [24] I have already dealt with what is at issue in this appeal and how the arbitrator went about in arbitrating the dispute between the parties. It suffices to emphasise that there was no dispute about the amounts arising out of the second and third agreements. And allied to that was the arbitrator’s finding that KCEC Engineering’s defences to those two agreements are unsustainable. Yet, nowhere 6 Goldfields Investment Ltd v City Council of Johannesburg 1938 TPD 551 at 560-561 (Goldfields). 7 Telcordia para 73. 8 Goldfields at 560. 9 Palabora Copper (Pty) Ltd v Motlokwa Transport and Construction (Pty) Ltd [2008] ZASCA 23; [2018] 2 All SA 660 (SCA) (Palabora Copper). 10 Ibid para 8. 11 Clark v African Guarantee and Indemnity Co Ltd 1915 CPD 68 at 77; Lufuno Mphaphuli and Associates (Pty) Ltd v Andrews and Another [2009] ZACC 6; 2009 (4) SA 529 (CC) para 219. in his award did the arbitrator revert to the question as to what the fate of the amounts arising from the second and third agreements should be. [25] In addressing this aspect in its judgment, the high court stated: ‘[T]here is no doubt that the whole claim of R2 603 729.44, inclusive of the claims under the three agreements, is dismissed, with all claims under each agreement having been separately considered.’ And that: ‘[B]y addressing the defences to the claims under the second and third agreements, the [arbitrator] did consider their merits and came to the conclusion that they too are to be dismissed.’ And, with reference to Palabora Copper, concluded that no irregularity is committed by an arbitrator who ‘engages in the correct enquiry, but errs on the facts or the law.’ Consequently, the high court held that there would be no basis for setting the award aside. [26] This then raises the question whether the arbitrator engaged in the correct enquiry in the context of the facts of this case. If this question is answered in the affirmative, that would be the end of the matter. However, if not, intervention by this Court would be warranted. [27] What compounds matters in this case is that the arbitrator found that KCEC Engineering’s defences in relation to the second and third agreements were devoid of merit. Insofar as the counter-claim was concerned, it was dismissed. Yet, the arbitrator inexplicably dismissed the residue of the globular amount claimed when he had already found that there was nothing standing in the way of an award in respect of those amounts relating to claims 2 and 3 being made in favour of OCA Testing. That the arbitrator did not do so manifests a lack of appreciation on his part of the fact that OCA Testing’s globular claim comprised three components. This, in my view, is a typical case of an arbitrator having ‘committed [a] gross irregularity in the conduct of the arbitration proceedings’ as contemplated in s 33(1)(b) of the Act. Reflecting on the sentiments of Schreiner J in Goldfields, the crucial question is whether the arbitrator’s conduct prevented a fair trial of the issues. [28] That the arbitrator did not determine the fate of the residue of the globular amount claimed, after having dismissed the claim in respect of the first agreement, ineluctably leads me to conclude that his approach to the matter ‘prevented a fair trial of the issues.’ Simply put, the arbitrator was here called upon to decide whether OCA Testing was entitled to any monies representing amounts flowing from the second and third agreements. In short, the arbitrator simply did not direct his mind to the crucial question whether OCA Testing was entitled to the residue of the globular amount claimed, ie R2 603 729.44 less the amount of R142 002.46 in respect of the first agreement. Had he dealt with the amounts flowing from the second and third agreements, his award would have been immune from impeachment under s 33(1) of the Act even though he may have been wrong on the facts or the law. [29] As it emerges from the record, the tenor of the arbitrator’s underlying reasoning makes it plain that he was alive to the fact that the total amount of R2 603 729.44 was made up of three components arising from three different agreements. To illustrate this point, the arbitrator said: ‘[T]he amount of R142 002.46, is claimed by the claimant in respect of the first agreement. The amount of R2 355 767.05, is claimed in respect of the second agreement. The amount of R276 744.00, is claimed in respect of the third agreement.’ [30] And having analysed KCEC Engineering’s defence in respect of the sum of R142 002.46, he concluded, as already mentioned, that OCA Testing had committed a material breach of the first agreement. Consequently, so the arbitrator held, OCA Testing was not entitled to payment, and its claim for R142 002.46 fell to be dismissed. [31] However, what then followed was that the arbitrator inexplicably dismissed the claim in its entirety without, for once, engaging in any analysis in regard to the legitimacy or otherwise of the amounts claimed pursuant to the second and third agreements. That OCA Testing had elected to claim a composite amount combining three separate agreements was beyond question and the arbitrator, too, was cognisant of this fact. Thus, in failing to address the residue of the claim, just as he had done with the component of the claim flowing from the first agreement, the arbitrator effectively closed off his mind to the fundamental question that he was called upon to answer, namely whether OCA Testing’s claim for the residual amount – that had its genesis in the second and third agreements – was sustainable. In my view, this omission prevented a fair trial of the totality of the issues and therefore amounts to a gross irregularity. [32] In summary therefore, I am satisfied that OCA Testing has established that there is good cause to remit the dispute to a new arbitrator. As I have already found, this must be so because the arbitrator in this matter failed to deal with all the issues that were before him.12 As already indicated, we are here not dealing with a situation where the arbitrator got it horribly wrong without more, in which event there would have been no basis to disturb the award. Rather, he simply overlooked some of the crucial issues that he was required to determine.13 Section 28 of the Act explicitly provides that absent an agreement between the parties to the contrary, an award shall, subject to the provisions of the Act, ‘be final and not subject to appeal and each party to the reference shall abide by and comply with the award in accordance with its terms.’14 And as Harms JA forcefully put it: ‘[A]n arbitrator “has the right to be wrong.”’15 Consequently, where an arbitrator errs in his or her interpretation of the law or analysis of the evidence that would not constitute gross irregularity or misconduct or exceeding powers as contemplated in s 33(1) of the Act.16 Should the arbitrator be substituted? [33] Counsel for OCA Testing urged upon us that in the event of this Court upholding the appeal, we should review and set the arbitral award aside to the extent that it dismissed the claim in its entirety. Thereafter, the dispute should be 12 See in this regard South African Forestry Co Ltd v York Timbers Ltd [2004] ZASCA 72; 2003 (1) SA 331 (SCA) para 14. 13Compare: Kolber and Another v Sourcecom Solutions (Pty) Ltd and Others; Sourcecom Technology Solutions (Pty) Ltd v Kolber and Another 2001 (2) SA 1097 (C). 14 Section 28 reads: Unless the arbitration agreement provides otherwise, an award, shall, subject to the provisions of the Act, be final and not subject to appeal and each party to the reference shall abide by and comply with the award in accordance with its terms. 15 See para 21 above for the full citation. 16 See: Doyle v Shenker and Co Ltd 1915 AD 233 at 236-238; Administrator, South West Africa v Jooste Lithium Myne (Eiendoms) Bpk 1955 (1) SA 557 (A). remitted for re-consideration by a new arbitrator. Motivating for the substitution of the erstwhile arbitrator, counsel argued that given the fundamental irregularity committed by the arbitrator OCA Testing has lost confidence in him. Therefore, so the argument went, the interests of justice strongly militate against the remittal of the matter to the same arbitrator. Rather, they dictate that someone entirely divorced from the atmosphere of the abortive hearing would be ideally suited to determine the issues afresh without his or her mind being clouded by the dust of the previous conflict. [34] There is much to be said for counsel’s contentions although the proposed course raises the spectre of a re-hearing of the dispute with its attendant expense. However, on balance I am persuaded that this is the route to take to ensure that justice is not only done but also manifestly seen to be done. In any event, s 33(4) of the Act provides that ‘[i]f the award is set aside the dispute shall, at the request of either party, be submitted to a new arbitration tribunal constituted in the manner directed by the court.’ (My emphasis.) [35] As to how the re-hearing of the dispute is to be conducted, that is a matter entirely to be determined by the new arbitrator. No doubt his or her approach will be informed by whatever submissions or representations the parties themselves may advance. If deemed convenient and practicable, the new arbitrator could, for example, determine the remaining issues between the parties on the recorded evidence without relying on the findings of the previous arbitrator, particularly so, if it is thought that the assessment of the demeanour of the witnesses who testified is not essential for a proper determination of their credibility. But, ultimately, these are all issues that fall squarely in the remit of the new arbitrator. Relief [36] This brings me now to the form of relief to be granted to OCA Testing in the light of the conclusion reached above that the arbitrator committed a gross irregularity. The award comprised two parts, the first part was a dismissal of OCA Testing’s claim in its entirety. The second was a dismissal of KCEC Engineering’s counter-claim. The latter part does not feature in this appeal, presumably because KCEC Engineering accepted the outcome of its counter-claim. [37] In Polabora Copper this Court was confronted with a situation where only part of the award was found to be bad. The question then arose as to whether s 33(1) of the Act solely contemplates the setting aside of an award in its entirety or also countenances interference with only part of the award that is vulnerable to impeachment. After surveying various legal sources and seeking guidance from foreign jurisdictions, this Court concluded that ‘[t]here does not appear to be any sound reason why an arbitration, that has been properly conducted on certain issues and properly determined those issues, should be set aside in its entirety, because of an irregularity in relation to a wholly separate issue.’17 [38] Here the issue is clear-cut. The portion of the arbitrator’s award that has been impeached by OCA Testing relates to a part of the main claim and does not affect the counter-claim. The fact that OCA Testing has accepted its fate in relation to a minor portion of its claim (ie R142 002.46) does not, by parity of reasoning, detract from this principle. Accordingly, paragraph 1 of the award falls to be set aside albeit only to the extent that it relates to the amounts arising from the second and third agreements. Costs [39] There remains the issue of costs to address. Counsel for OCA Testing asked for costs of two counsel in the event that the appeal is upheld. In my view the appropriate order to grant in relation to costs is that there be no order as to costs. It goes without saying that where a litigant seeks costs against its adversary in the event that the application is opposed, there should be no order as to costs where the adversary has not opposed the application but, instead, elected to remain supine. This is precisely what happened in this case. In these circumstances, OCA Testing is not, in the absence of opposition, entitled to costs both in this Court and the high court. 17 Palabora Copper para 48. [40] In the result the following order is made: The appeal is upheld with no order as to costs. The order of the Gauteng Division of the High Court, Johannesburg, is set aside and in its place is substituted the following order: ‘1 The application to set aside the award insofar as it relates to the amounts claimed in respect of the second and third agreements succeeds. The dispute between the parties in relation to the residue of the claim arising from the second and third agreements is to be submitted to a new arbitrator to be agreed between the parties within 20 days of this order and, failing such agreement to be appointed by the Arbitration Foundation of South Africa. No order as to costs is made.’ ____________________ X M PETSE ACTING PRESIDENT SUPREME COURT OF APPEAL APPEARANCES For the appellant: B L Skinner SC (with I Veerasamy) Instructed by: Pather & Pather Attorneys, Durban Kramer Weihmann Attorneys, Bloemfontein For the respondents: No appearance

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 February 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal OCA Testing and Certification South Africa (Pty) Ltd v KCEC Engineering Construction (Pty) Ltd and Another (1226/2021) [2023] ZASCA 13 (17 February 2023) Today the Supreme Court of Appeal (SCA) upheld an appeal from the Gauteng Division of the High Court, Johannesburg (high court). This appeal revolved around arbitration proceedings between the appellant, OCA Testing and Certification South Africa (OCA Testing), and the first respondent, KCEC Engineering (KCEC). On three separate occasions, OCA Testing and KCEC entered into three written agreements in terms of which OCA Testing were to deliver advisory, technical and mechanical services to KCEC. The business relationship regrettably broke down after KCEC refused to settle tax invoices submitted by OCA Testing; the parties agreed to implement arbitration proceedings, as set out in terms of the written agreements. The second respondent was appointed arbitrator (the arbitrator). In reliance on the three written agreements, OCA Testing sued KCEC for payment of a globular amount of R2 603 729.44. The aggregate sum claimed comprised three amounts: R142 002.46 in terms of the first agreement, R2 355 768.05 in terms of the second and R276 744.00 in terms of the third. KCEC admitted that the services were provided by OCA Testing but it disputed liability by asserting that the services were rendered late, resulting in KCEC suffering damages. Furthermore, KCEC had also overpaid OCA Testing to the tune of R1 961 770.24, which it sought to reclaim via its counter-claim; and it had suffered liquidated damages in the sum of R1 646 220.00 occasioned as a result of OCA Testing’s default in breach of its contractual obligation. After having analysed the parties’ pleadings, the arbitrator dismissed the claim, basing the dismissal of the entire matter on the first written agreement, as the arbitrator maintained that payments due in terms of the second and third agreements would not have resulted in obliging OCA Testing to perform in terms of the first agreement. KCEC’s counter-claim was also dismissed as it was not based on the condictio indebiti or that OCA Testing could be liable for damages in terms of special damages. The matter proceeded to the high court where it was dismissed. In the high court, the question was posed whether the second applicant failed to deal with the validity of the claim. The high court was of the view that the arbitrator had fully understood the nature of the enquiry into the first agreement and there was, therefore, no reason to set the arbitrator’s finding aside. Upon appeal, the appellant contended that there could be no way in which the arbitrator could have arrived at the conclusion to dismiss the aggregate claim with reference to the first agreement only. The allegation was levelled that the arbitrator committed a gross irregularity in the conduct of arbitration proceedings as contemplated in s 33(1) of the Arbitration Act 42 of 1965 (the Act), resulting in him misconducting himself in his duties as arbitrator. This Court accordingly had to determine whether the arbitrator engaged the matter correctly, in the context of the facts. The Court found that the arbitrator’s finding that KCEC’s defences in relation to the second and third agreements were devoid of merit. In addition to dismissing the counter-claim, he inexplicably dismissed the residue of the globular amount claimed when he had already found that there was nothing that stood in the way of an award in favour of OCA Testing in respect of the claims in terms of the second and third written agreements. The Court held that the arbitrator did not do so, manifested a lack of appreciation of the matter, which is tantamount to have committed a gross irregularity in terms of s 33(1) of the Act. Furthermore, the Court held that the failure of the arbitrator to deal with the residue of the globular amount, after having dismissed the claim in respect of the first agreement, indicated that the matter was not fairly heard. The arbitrator was mandated to decide whether OCA Testing was entitled to any money flowing from the second and third agreements. The arbitrator simply did not direct his mind to the crucial question whether OCA Testing was entitled to the residue of the globular amount claimed, less the amount in respect of the first agreement. Had he dealt with the amounts flowing from the second and third agreements, his award would have been immune from impeachment under s 33(1) of the Act. The arbitrator inexplicably dismissed the claim in its entirety without engaging in any analysis in regard to the amounts claimed pursuant to the second and third agreements. Thus, in failing to address the residue of the claim, just as he had done with the component of the claim flowing from the first agreement, the arbitrator effectively closed off his mind to the fundamental question that he was called upon to answer. This omission prevented a fair trial of the totality of the issues and amounted to a gross irregularity. The SCA determined that a new arbitrator ought to be appointed in order to ensure the issues at hand would be determined afresh. In the result, the SCA upheld the appeal from the high court and set the order of the high court aside. In its place, an order was made setting aside the arbitrator’s award insofar as it related to the amounts claimed in terms of the second and third agreements and that the dispute that pertained to the residue of the second and third agreements was to be submitted to a new arbitrator, as agreed upon between the parties. --------oOo--------

1295

non-electoral

2010

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 59/09 In the matter between: TCT LEISURE (PTY) LTD Appellant and THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICES Respondent Neutral citation: TCT Leisure v The Commissioner for the South African Revenue Services (59/09) [2010] ZASCA 10 (12 March 2010). Coram: HARMS DP, CLOETE et CACHALIA JJA Heard: 19 February 2010 Delivered: 12 March 2010 Summary: VAT Act 89 of 1991; 'equity security' exemption s 12; the goods 'supplied' comprised preferent shares and other discrete rights; because the rights were not included in the shares, the 'equity security' exemption in s 12(a) was not applicable; the turnover from the sale of the rights was therefore subject to VAT. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Special Tax Court (Durban) (Hurt J presiding): The appeal is dismissed with costs including the costs of two counsel. ______________________________________________________________ JUDGMENT ______________________________________________________________ CLOETE JA (HARMS DP et CACHALIA JA concurring): [1] The Holiday Club is an organisation which has for some time sold holiday accommodation commonly known as 'time-share' to members of the public. The organisation was restructured in 1995. Before that date, VAT was paid on the product it supplied and thereafter, it was not. The cardinal question in this appeal is whether VAT was payable in respect of the product sold after the restructuring. [2] The various components of the organisation making up The Holiday Club from time to time, have varied. In 1993 Leisure Property Trust ('the trust') was formed. The trust acquired rights to accommodation introduced to it by TCT Leisure (Pty) Ltd (to which, without begging the question, I shall refer as 'the taxpayer') and in return for which the trust issued 'points rights' to the taxpayer. These points rights conferred a contractual right of occupation enforceable against the trust exercisable subject to defined conditions. The taxpayer sold the points rights to members of the public. It was common cause before this court that these transactions constituted a 'taxable supply' on which VAT was payable; and VAT was in fact paid. The relevant provisions of the Value-Added Tax Act 89 of 1991 read: '7(1) Subject to the exemptions, exceptions, deductions and adjustments provided for in this Act, there shall be levied and paid for the benefit of the National Revenue Fund a tax, to be known as the valued-added tax ─ (a) on the supply by any vendor of goods or services supplied by him on or after the commencement date in the course or furtherance of any enterprise carried on by him; . . . calculated at the rate of 14 per cent on the value of the supply concerned . . . .'1 [3] When The Holiday Club was restructured in 1995 a new company, Leisure Holiday Club Ltd ('LHC'), was formed. The trust became its sole ordinary shareholder. The taxpayer transferred properties and rights of use in properties comprising holiday accommodation, which it owned, to LHC for a consideration of R27,5m consisting of the issue to the taxpayer of 62 500 preference shares in LHC with a nominal value of one cent each ('the shares') and 62 500 'debentures'2 with a face value of R439,99 each. These properties and rights of use in properties were then acquired by the trust from LHC; and the taxpayer began selling the shares (and possibly the 'debentures') which it had acquired in LHC, to members of the public. It is in respect of the turnover from these sales, for the financial years ending February 1998 to February 2002, that the Commissioner issued the revised assessments levying VAT which are at issue in this appeal. [4] The Commissioner raised the assessments on the basis that the taxpayer dealt in 'timeshare interests' which were included in the definition of 'fixed property' in the VAT Act and, accordingly, that those interests were 'goods' and their supply fell within the purview of s 7(1) of the Act.3 The basis of the assessments was unanimously upheld by the Special Tax Court, Durban (Hurt J presiding). Leave to appeal to this court was subsequently granted in terms of s 34 of the VAT Act read with s 86A(2)(b)(i) and s 86(5) of the Income Tax Act 58 of 1962. 1 Section 7(1) has been reproduced in its present form. The amendments to it from time to time since its commencement are irrelevant to the present appeal. 2 It is not necessary for purposes of the appeal to decide whether this description is accurate. 3 In s 1 of the VAT Act, 'goods' are defined as meaning inter alia 'fixed property'; and 'fixed property' is defined as meaning inter alia 'in relation to a property time-sharing scheme, any time-sharing interest as defined in section 1 of the Property Time-sharing Control Act, 1983 (Act 75 of 1983), and any real right in any such . . . time-sharing interest.' [5] Because of the view I take it is unnecessary to consider the correctness of the basis of the order made by the Special Tax Court because even if the basis was incorrect, as contended by the taxpayer (and I express no view in this regard), the onus was on the taxpayer, in terms of s 37 of the VAT Act,4 to prove that the turnover from the sales was nevertheless exempt. This the taxpayer sought to do by arguing that what was supplied to the members of the public were 'financial services' in the form of 'equity securities', as defined in s 2, which were exempt from VAT in terms of s 12(a) of the Act. Those provisions read inter alia: '12. The supply of any of the following goods or services shall be exempt from the tax imposed under s 7(1)(a): (a) The supply of any financial services . . . .' '2(1) For the purpose of this Act, the following activities shall be deemed to be financial services: . . . (d) the issue, allotment or transfer of ownership of an equity security . . . . . . (2) For the purposes of subsec (1) ─ . . . "equity security" means any interest in or right to a share in the capital of a juristic person . . . .' [6] In the words of counsel who drew the heads of argument on behalf of the taxpayer: 'The essential question is whether the basis of the scheme was changed [in 1995] to one in which "shares" rather than "points" were sold.' Put differently, in order to succeed, the taxpayer would have had to show that the occupation rights formed part of the bundle of incorporeal rights comprising the shares in LHC which the taxpayer sold to members of the public. The source of such rights could only be found in the memorandum or 4 Section 37 provides: 'The burden of proof that any supply . . . is exempt from or not liable to any tax chargeable under this Act . . . shall be upon the person claiming such exemption . . . and upon the hearing of any appeal from any decision of the Commissioner, the decision shall not be reversed or altered unless it is shown by the appellant that the decision is wrong.' articles of association of LHC5 or in any valid resolution passed in accordance with the memorandum and articles setting out the rights attaching to the shares to be issued pursuant to the resolution.6 [7] At the time LHC was incorporated, the terms governing the shares were set out in clause 3 of its original articles of association. That clause gave the right to shareholders to use the property of the company in the following terms: '3(a) The preference shareholder shall: 1. Be entitled to use any property acquired by the company for leisure or holiday purposes in accordance with a schedule of use to be prepared by the directors of the company, which schedule shall ensure that each shareholder has equal access to the use and enjoyment of the property, determined pro rata to the number of shares held . . . .' However by special resolution passed on 15 September 1995, which was before any shares at issue in this appeal were issued and therefore before the taxpayer sold such shares to members of the public, clause 3 was amended to exclude the paragraph just quoted. [8] The articles of LHC did not provide that the shareholder would be entitled to an allocation of points rights pro rata to its shareholding ─ indeed, there is no link between the two in the articles (or memorandum) of LHC. Certificates issued to members of the public read as follows: 'Share Certificate This is to certify that the undermentioned is the registered owner of fully paid Preferent Shares of one cent each in the abovementioned Company subject to the Memorandum and Articles of Association of the Company. 5 Commissioners of Inland Revenue v Crossman & others: Commissioners of Inland Revenue v Mann & others [1936] 1 All ER 762 (HL) at 787; Wessels & 'n ander v D A Wessels & Seuns (Edms) Bpk & andere 1987 (3) SA 530 (T) at 561G-H; Letseng Diamonds Ltd v JCI Ltd & others; Trinity Asset Management (Pty) Ltd & others v Investec Bank Ltd & others 2007 (5) SA 564 (W) para 17. 6 Blackman et al Commentary on the Companies Act ad s 91 p 5─174-1; Morse et al Palmer's Company Law para 6.104. Points Rights Certificate Subject to the payment of Membership and Reservation Fees, this certificate also entitles the holder to the equivalent user rights in Points in The Holiday Club.' [9] Clause 1 of the standard sale agreement between the taxpayer and members of the public read: 'The Trading Company [the taxpayer] hereby sells to the Investor who hereby purchases in perpetuity upon the terms and conditions of this Agreement a share interest in the Company [LHC], referred to as Points Rights in the Scheme, which entitles him/her to be credited each year with the number of Points as determined in Schedule 2 hereto.' Certain of the concepts are defined as follows: 'Points Rights ─ means a right for the Member to be credited each year with the number of Points specified in the Points Rights/Share Certificate; Points/Shares ─ means the instrument by means of which the Member of Points/Shares becomes entitled to exercise the right to the Use and Occupation of Accommodation; Scheme ─ means a property time-sharing scheme known as "The Holiday Club" pertaining to the Accommodation conducted in terms of the rules thereto; Accommodation ─ means the property, immovable or otherwise, intended for use by any Member in any Resort, including the movables, and in respect of which the Accommodation is owned, leased, rented or otherwise available from time to time by the Trust and are accordingly included in the Scheme.' From what I have previously said it is quite clear that it was not the 'share interest in the Company' (ie LHC) referred to in clause 1 of the standard sale agreement which entitled the member of the public 'to be credited each year with points rights' which, in turn, entitled the member to accommodation rights in terms of the scheme. The points rights conferred such entitlement. What was sold were shares and points rights. As Mr Fernandes, the company secretary of the taxpayer (called to testify on its behalf), correctly said in cross-examination: 'CROSS-EXAMINER: I'd just like to put it to you for any further comment you wish to make that after 1995, if you sold shares, what you sold were 1 cent preference shares and points. MR FERNANDES: And? CROSS-EXAMINER: And points, the same points that you'd been selling before you continued to sell but you tagged on to it a 1 cent preference share. MR FERNANDES: Correct. The points for accommodation and the shares for ownership.' The fact that the taxpayer as a matter of commercial practice only sold points together with shares (a fact much emphasized in the heads of argument and by counsel who represented the taxpayer when the matter was argued in this court) does not result in a merger of the rights attaching to each, nor does it entitle the shareholder qua shareholder to exercise the right of a points holder or a points holder to exercise the rights of a shareholder. [10] Counsel representing the taxpayer when the appeal was argued before this court relied on the decision of the New Zealand Court of Appeal in Commissioner of Inland Revenue v Gulf Harbour Development Ltd.7 In that matter one member of a group of companies sold to the public redeemable preference shares in another member that operated a golf club and related facilities. The rights attached to each share, which passed to the purchaser, included membership of the club. The issue was whether such sales were to be treated as a supply of financial services for the purposes of the Goods and Services Tax Act 1985. The high court had held that the supplier of a share in a company operating a country club was an equity security and that the transaction was, therefore, an exempt supply of financial services for GST purposes. The Commissioner's primary submission on appeal was that what was supplied in substance was membership of the golf club and that this supply should attract GST; that the equity security element was ancillary to, or incidental to, the supply of membership of the club; and alternatively, that there were two supplies in the transaction namely the supply of an equity security and the supply of membership of the golf club. The Commissioner's appeal was dismissed and the Court of Appeal held inter alia that how the offer was marketed and why people purchased the shares was irrelevant, in that everyone who buys a share in a company buys it to acquire the rights attaching to that share; that the share is in all cases a 'vehicle' for acquisition of the rights attached to it; and the fact that in this case the rights attached to 7 (2004) 21 NZTC 18, 915. the shares were rights to membership in the country club did not alter what the purchasers were acquiring. The high court's view that there was no evidence to support the supply of more than the shares was confirmed and the Court of Appeal held that the right to membership passed not as a discrete element, but as an incident of share ownership. [11] In the present matter I have held that the right to occupy was supplied not as an incident of share ownership, but as a discrete element (in the form of points rights). The case is for that reason of no assistance to the taxpayer. [12] It was in dispute whether, at the same time that shares and, as I have found, points rights were sold to members of the public, the 'debentures' acquired by the taxpayer in LHC were also sold. It is not necessary to resolve the dispute nor is it necessary to establish a value for the shares. The VAT Act makes express provision for a composite supply of goods which are subject to VAT and those that are not in s 10(22) which reads as follows: 'Where a taxable supply is not the only matter to which a consideration relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.' But the Taxpayer conceded that if the rights to accommodation supplied to members of the public did not form part of the rights attaching to the shares, the full consideration paid by members of the public was subject to VAT. [13] The appeal is dismissed with costs including the costs of two counsel. _______________ T D CLOETE JUDGE OF APPEAL APPEARANCES: APPELLANTS: K J Kemp SC (with him I Pillay) Instructed by Cox Yeats, Durban; McIntyre & Van der Post, Bloemfontein RESPONDENTS: O L Rogers SC (with him Ms A A Gabriel) Instructed by The State Attorney, Cape Town; The State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 12 March 2010 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal TCT LEISURE (PTY) LTD v THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICES The Holiday Club, which sells holiday accommodation commonly termed time-share to members of the public, was restructured in 1995. Shares were thereafter sold by TCT Leisure (Pty) Ltd, one of the entities forming part of The Holiday Club after it was restructured, to members of the public. TCT argued that the shares were equity securities and therefore the turnover from the sales of the shares was exempt from VAT. The SCA rejected this argument, holding that it was not the shares which conferred an entitlement to occupy time- share accommodation, but the points rights sold with the shares. The court reasoned that the fact that TCT sold both at the same time as part of one indivisible transaction did not mean that rights of accommodation were conferred on shareholders. It was the points rights that conferred this right. The court accordingly confirmed the decision of the Durban Tax Court that the turnover from the sales was subject to VAT. --ends--

1369

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 144/08 In the matter between: GERHARD SMIT Appellant and THE STATE Respondent Neutral citation: G Smit v The State (144/08) [2010] ZASCA 84 (31 May 2010) Coram: MTHIYANE, VAN HEERDEN, PONNAN, MHLANTLA and LEACH JJA Heard: 19 May 2010 Delivered: 31 May 2010 Summary: Criminal law – rape and attempted rape - evidence – assessment of – complainant’s evidence lacking credibility - convictions of rape and attempted rape set aside. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: North Gauteng High Court (Pretoria) (Seriti J and Ramagaga AJ sitting as court of appeal): 1. Leave to appeal is granted and the appeal is enrolled. 2. The appeal is upheld, and the order of the high court is set aside and substituted with the following: ‘(a) The appeal is upheld. (b) The appellant’s convictions and sentences are set aside.’ ______________________________________________________________ JUDGMENT ______________________________________________________________ LEACH (MTHIYANE, VAN HEERDEN, PONNAN and MHLANTLA concurring) [1] On 24 February 2005, Gerhard Smit of Pretoria ( ‘the appellant’), was convicted in a regional court on a count of attempted rape and a further count of rape for which he was, respectively, sentenced to three years’ and ten years’ imprisonment, such sentences to run concurrently. A subsequent application on his behalf to lead further evidence as well as an application for leave to appeal was refused by the trial magistrate. Subsequently, the appellant was granted leave to appeal by the North Gauteng High Court but on 6 August 2007 that court (Seriti J and Ramagaga AJ) dismissed the appeal. A delay then ensued, largely as a result of various financial and logistical difficulties that are not necessary to detail on the part the appellant in lodging his application with the High Court, for leave to appeal to this court. On 12 February 2009 the High Court dismissed that application. The appellant then applied to this court for leave to appeal and to adduce further evidence in terms of s 309 of the Criminal Procedure Act 51 of 1977. On 25 February 2009 this court issued the following order: ‘The application for leave to appeal and to adduce further evidence is referred for oral evidence in terms of s 21(3)(c)(ii) of the Supreme Court Act 59 of 1959. The parties must be prepared if called upon to do so, to address the court on the merits of the conviction and sentence.’ [2] Because the success or otherwise of the application for leave to appeal depends on the prospects of eventual success of the appeal itself, the argument on the application had to address the merits of the appeal. For this reason the parties were requested to argue the appeal as if the application for leave to appeal had been granted. (See S v Boesak 2000 (1) SACR 633 (SCA) paras 10, 11 and 12.) [3] The charges against the appellant arose out of events which occurred at his home in Pretoria during the night of 3 to 4 September 2003. Both the charge of attempted rape (count 1) and that of rape (count 2) involved the same complainant, a 16 year old school girl, who was at the time living with the appellant’s family. The appellant used an outside room described in the evidence as a ‘Wendy house’ as his bedroom while the complainant shared a bedroom in the main house with the appellant’s sister, Jolindi, and his 11 year old brother. His mother and her partner slept in an adjoining bedroom. The State alleged that the appellant had unsuccessfully attempted to rape the complainant in the Wendy house and, some time later, had succeeded in doing so in the bedroom that she shared with his two siblings. [4] The appellant denied his guilt. Although he admitted having had intimate contact with the complainant in the Wendy house and that he had thereafter had sexual intercourse with her in the bedroom, he alleged that this had all taken place with her consent. Unfortunately for him, his version was rejected and he was convicted on both counts as charged. As there is a material conflict of fact, a resolution of which involves the credibility of the witnesses, it is necessary to deal with the evidence in some detail. [5] At the time of the incident, the complainant was attending a school in Pretoria. As her home was in Witbank it had been necessary for her to board at the school but, for reasons not disclosed in the evidence, there had been a problem at the school and she was required by the school to leave the boarding house. Her teacher, a Mr Bruwer, had a son who was at the time romantically involved with the appellant’s sister, Jolindi, and this led to arrangements being made for the complainant to board with Jolindi. [6] On the night in question, although the complainant had already prepared for bed, at Jolindi’s suggestion she slipped a track suit over her night clothes and the two of them went out at about 9 pm to purchase cold drinks. They ended up at the Bergsig Hotel where the appellant was playing pool with his friends. Although the complainant had lived with Jolindi’s family for a few weeks, she claimed not to know the appellant who was much older than her. It is common cause that despite it having been a school night, the complainant and Jolindi spent several hours playing pool with the appellant and his friends and only left the hotel in the early hours of the next morning. They proceeded home in a motor vehicle driven by Jolindi with the complainant and the appellant seated in the rear and one of his friends seated in the front passenger seat. After dropping the friend at his home, they went home. [7] According to the complainant, when they arrived at the house the appellant said he wanted to talk to her and asked her to accompany him to the Wendy house. She did so, but when they entered the room the appellant closed the door, turned off the light and asked her to remove her clothes. When she refused to do so, he pushed her onto the bed and again asked her to undress. She told him that she was not prepared to do so as she had a boyfriend and he had a pregnant girlfriend. When she again refused, the appellant proceeded to strip down to his underpants, and again asked her to disrobe. When she persisted in her refusal, he pulled a blanket over them, fondled her breasts and put his hand between her legs. However when he sat up, apparently in order to play some music, she was able to free herself and flee to the main house. As she did so, she looked back and saw the appellant, now fully clothed, following close behind her. Once in the main house, the appellant went to the sitting room to watch television while she went to the bedroom she shared with Jolindi and the latter’s 11 year old brother. She alleged that when she told Jolindi what had happened, she was unsympathetic and told her it had all been her own fault. [8] The complainant alleged that she had then removed her track suit and climbed onto her bed, but that she found it impossible to sleep. She was awake and lying on her stomach when she felt someone climbing onto the bed, who pulled the panty she was wearing to below her buttocks and then had sexual intercourse with her by penetrating her vagina from behind. She alleged that after penetration had occurred she looked around and saw that it was the appellant. She asked him what he thought he was doing. He immediately climbed off her and left the room. She alleged that the next day she had informed her teacher, Mr Bruwer, what had happened to her. [9] The appellant told a materially different story. Although he confirmed that the complainant and Jolindi had joined him and his friends in playing pool at the hotel, he alleged that she had flirted outrageously with both his friends and him. She had repeatedly squeezed his behind, had sat on his lap and had kissed him. He alleged that while he and the complainant were seated in the rear of the vehicle on the way home, they engaged in heavy petting during which he fondled her breasts and she fondled his private parts. On their arrival home, he suggested to her that they go to the Wendy house, to which she willingly agreed. Once in his room, the complainant removed her track suit and lay on the bed dressed in her night clothes. He took off his pants and shirt and joined her. They petted intimately, during the course of which they fondled each others private parts. But when he attempted to remove her panty, she said that they should rather go into the house. They dressed together and when he asked whether he should bring a condom with him, she replied that it was unnecessary as she was using an oral contraceptive. [10] The appellant described how he and the complainant had then gone to the main house where he sat in the sitting room while the complainant, after having said that she would call him when Jolindi was asleep, went to her bedroom. She returned shortly thereafter, bringing him a duvet. She sat on his lap and they kissed. The complainant said that he should wait a few minutes before joining her in bed. She returned to the bedroom and, after a short while, he joined her as she had said. They petted intimately for a while before he removed the complainant’s panty and they had consensual sexual intercourse, during which he penetrated her vagina from behind. The act was brief, and the two of them then repaired to the bathroom together to clean themselves. After the complainant had kissed him again, she returned to the bedroom while he went and slept in the sitting room, something he commonly did. He did not see the complainant the next morning before she went to school and was shocked to later hear that she alleged that he had raped her. [11] Before dealing with whether the appellant’s version was correctly rejected as not being reasonably possibly true, I should interpose that there can be no doubt that the State’s case fell far short of proving an attempted rape in the Wendy house. The high court never dealt with this issue and appears to have confirmed the conviction on the count of attempted rape solely because it was not persuaded that the trial court had erred in accepting the complainant’s version. However, while on the complainant’s version the appellant had intimately fondled her, he at no stage attempted to have sexual intercourse with her and, indeed, at all times she had her panty on and the appellant had never removed his underwear. At best for the State, the appellant may have been guilty of indecent assault but he certainly did not attempt to insert his penis into the complainant’s vagina. That being so, even on the State’s case considered in isolation, the appellant’s actions in the Wendy house cannot be construed as an attempt at rape and in this court counsel for the State correctly conceded that the conviction on this count cannot stand. [12] But the more important issue is whether both the trial court and the high court erred in accepting the version of the complainant as true beyond a reasonable doubt and rejecting that of the appellant as being inherently improbable. The rejection of the appellant’s version as inherently improbable was based primarily on two issues. First, that if the complainant had wanted to have sexual intercourse with the appellant, she would have done so when they had the opportunity of doing so in private in the Wendy house (and it was thus inherently improbable that she would have suggested to the appellant that they should go to the main house for that purpose) and, second, that the complainant would have suggested having sexual intercourse in a bedroom which she shared with two other people. [13] The allegation that the appellant and the complainant did not avail themselves of the opportunity to have sex in the Wendy house and only did so later in the bedroom is not so improbable that it can be rejected as false beyond a reasonable doubt. The fact that the sex act took place in the bedroom without the complainant crying out for assistance is far more likely to have occurred if the act was with her consent than without it. And the appellant was hardly likely to have run the risk of attempting to rape the complainant in the same room as his sister and younger brother after she had successfully fought off his initial attempt to do so in the Wendy house as to do so would have invited discovery in a compromising position should the complainant have again resisted his advances. Plainly, if the appellant intended to have forcible intercourse with the complainant in a house with four other occupants, without knowing how she would react, he ran the risk of her raising the alarm and him being found out. It would have been far less risky, if he was intent on such conduct to have done so in the Wendy house, where the opportunity clearly presented itself. If anything, the fact that the sexual act took place where it did is more consistent with the appellant’s version than that of the complainant, and the appellant’s version is not so inherently improbable in that regard to warrant rejection. Or rather at best for the State it is a neutral factor that does not tip the scales in its favour. [14] The fundamental difficulty that I have with the State’s case is that it rested solely upon the credibility of the complainant herself. The trial court did not evaluate her evidence in detail while the high court concluded that it was ‘satisfactory in every material respect and is also credible’. This is a startling statement as a detailed examination shows the complainant to have been anything but a credible witness whose testimony was inherently unreliable and as appears from what follows, her evidence is riddled with inconsistencies and improbabilities. [15] In her evidence in chief, the complainant made no mention of any improper advances made by the appellant until such time as the two of them had entered the Wendy house. In cross-examination, however, a very different version emerged. She then alleged that while at the hotel the appellant had forced her to sit on his lap and that, while returning home, the appellant had not only forced her to sit in the back of the vehicle with him but, despite her protestations, had forced her hand onto his private parts. Had these events occurred as she alleged in cross-examination, it was surprising to say the least that she only volunteered this information at that stage. Her failure to do so smacks heavily of an attempt to gild the lily. [16] It is also surprising that if the complainant had been obliged to physically resist the appellant’s advances, both at the hotel and while seated in the motor vehicle, she would have voluntarily accompanied him to the Wendy house. Importantly, she also admitted having willingly kissed him in the Wendy house. This was hardly the conduct of a person who had just been obliged to fight off a sexual predator, and the fact that she went with the appellant to his room and kissed him there is far more consistent with the appellant’s version that she had consented to the sexual contact which had taken place between the two of them earlier that evening. Furthermore, the complainant admitted during her evidence that she was taking an oral contraceptive at the time, information that the appellant would hardly have known unless she had imparted it to him as he said she had done. This further corroborates the appellant’s version of the events. Why else, it must be asked, would she have volunteered that information, unless there was a discussion between them about sexual intercourse. It strikes me as implausible that she would have imparted that information to him had she felt threatened by him. [17] The complainant’s description of events after she had left the appellant’s room is also unsatisfactory. She alleged that after she had freed herself from the appellant, she fled from the Wendy house and, on looking back, saw him fully clothed following directly behind her. However, it is common cause that the appellant had stripped to his underpants and it is difficult to see how on the complainant’s version he would have had the time to dress and to follow so closely behind her. Not only is her version thus improbable in this regard but the fact that the appellant was fully clothed at that stage is consistent with his version that they had both dressed themselves before they left the Wendy house together. [18] Then there is the appellant’s allegation that the complainant had taken him a duvet while he was waiting in the sitting room for Jolindi to fall asleep. The complainant denied doing so but Jolindi confirmed that she had. Not only did Jolindi’s evidence contradict the complainant’s on this score but she also confirmed that the complainant had flirted with the men present at the hotel and had sat on the appellant’s lap. She also testified that after the complainant had returned from the Wendy house she had said that she and the appellant had just played with each other. Jolindi took the complainant to school the next morning. It was undisputed that notwithstanding the complainant then having the opportunity to do so, she had not complained about the appellant’s behaviour. Indeed Jolindi testified that the complainant had told her that she had enjoyed her evening playing with the appellant. It was only later in the day, according to Jolindi, that she had heard that the complainant had alleged that the appellant had raped her. [19] Jolindi’s evidence was thus inconsistent with that of the complainant in several respects. She was not shaken in cross-examination and there is no reason to doubt her truthfulness. However, the trial court did not mention her testimony and while the high court briefly mentioned her evidence, it neither evaluated nor considered its effect upon the credibility of the complainant. It erred in doing so as Jolindi’s evidence, much of which was unchallenged, throws considerable doubt upon the version of the complainant. [20] The complainant’s description of the sex act itself is also distinctly unconvincing. As I have said, she alleged that the appellant had entered the room, climbed on her bed, pulled down her panty to just below her buttocks and then penetrated her vagina from behind, all of which took place without her offering any resistance or even looking around to see who it was. Not only is it improbable that he would have been able to achieve penetration if she was lying in the position she described but, according to her, it was only after penetration that she looked around and asked him what he was doing. If she was awake, as she alleged was the case, it is difficult to accept that the appellant could have done all of this without her consent. The trial court appreciated this difficulty and found that the complainant must have been asleep at the time and was thus not only unaware of the removal of her panty and the appellant’s initial penetration of her, but that she had therefore been incapable of giving her consent. But this finding flies in the face of the complainant’s own evidence that she was awake at all times, and constitutes a material misdirection. [21] Had the complainant been raped, one would have expected her to have immediately cried out for assistance, particularly knowing that Jolindi was present in the room. She did not do so. Nor after the act did she wake Jolindi. When pressed on this, the complainant alleged that she had attempted to awaken her but that Jolindi had been so drunk that she continued sleeping. Jolindi denied having been drunk and said that she had merely had a single brandy and coke during the course of the whole evening, and her evidence in this regard was not challenged. The complainant’s evidence in regard to what she told Jolindi the next morning was also unsatisfactory. Initially she said she did tell Jolindi of the rape, but went on to say that she could not remember if she had done so. As I have said, Jolindi’s evidence has not been shown to be unreliable and is wholly inconsistent with the complainant doing anything else but expressing her pleasure at the events of the preceding evening. [22] Moreover, the complainant said that she did not report the incident to Jolindi’s mother as she did not know her well enough, and that she therefore decided to wait until school to report the incident to her teacher, Mr Bruwer. When Mr Bruwer testified, he made no mention of the complainant reporting that she had been raped. Instead he stated that she had shown no signs of being at all upset during the course of the morning classes which is hardly what one would expect of a young girl who had been raped. However he did state that the complainant had told him that she did not want to return to Jolindi’s house and that, as a result, he arranged for the complainant’s mother to come to school and met with her and the complainant that afternoon when the complainant’s mother reported to him that the complainant had been raped. [23] It is clear from this that the complainant did not complain immediately after the incident to people that she could trust in circumstances where it would have been that expected she would have done so. The first person to whom she appears to have reported that she was raped was her mother but the circumstances under which that report was made are not clear. There is a conflict on the evidence as to the precise events that occurred, but it is apparent from her mother’s testimony that the first issue that arose was whether the complainant had been at the hotel the previous evening. It was only after the complainant’s mother, who was angry about her daughter having possibly been at the hotel, made enquiries and learned from another witness that the complainant had been at the hotel that the allegation of rape was first mentioned. [24] Precisely how she had come to make the report was not explored in the evidence, but the fact remains that the complainant’s allegation of rape appears only to have emerged after a confrontation with her mother about her having been at a hotel on a school night. In the circumstances that prevailed, there is a very real suspicion that the complainant’s report of rape was made in an attempt to deflect her mother’s anger. [25] In the light of all these factors, I have grave reservations about the credibility of the complainant and in turn her reliability I am thus not persuaded that the State discharged the onus of proving beyond a reasonable doubt that the appellant’s version of the material events was false. Ultimately counsel for the State was constrained to concede that this conviction as well could not stand. [26] In the light of this conclusion, it becomes unnecessary to deal with the application for leave to lead further evidence. [27] The following order will therefore issue: 1. Leave to appeal is granted and the appeal is enrolled. 2. The appeal is upheld, and the order of the high court is set aside and substituted with the following: ‘(a) The appeal is upheld. (b) The appellant’s convictions and sentences are set aside.’ ________________ L E LEACH JUDGE OF APPEAL APPEARANCES: APPELLANT: J Hollland-Müter Instructed by Potgieter, Penzhorn & Taute Inc, Pretoria Kramer, Weihmann & Joubert, Bloemfontein RESPONDENT: L Pienaar Instructed by Director of Public Prosecutions, Pretoria Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 31 May 2010 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal GERHARD SMIT versus THE STATE The appellant was convicted in a regional court of both the rape and the attempted rape of a 16 year old girl, for which he was sentenced to an effective period of ten years’ imprisonment. The appellant appealed unsuccessfully to the North Gauteng High Court, but was later granted leave by the Supreme Court of Appeal to argue an application for leave to appeal. The Supreme Court of Appeal today granted the appellant leave to appeal, enrolled the appeal and set aside the appellant’s convictions and sentences. In doing so it concluded that the complainant’s version of the event was improbable and unsatisfactory, that there was grave doubt as to whether she had told the truth, and that the appellant’s version could reasonably possibly be true. The appeal was therefore upheld.

3659

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no:888/2020 In the matter between: AUGUSTINUS PETRUS MARIA KOUWENHOVEN APPELLANT and THE MINISTER OF POLICE FIRST RESPONDENT THE DIRECTOR OF PUBLIC PROSECUTIONS (WESTERN CAPE) SECOND RESPONDENT THE MINISTER OF JUSTICE AND CORRECTIONAL SERVICES THIRD RESPONDENT THE MAGISTRATE: PRETORIA FOURTH RESPONDENT THE MAGISTRATE: CAPE TOWN FIFTH RESPONDENT Neutral citation: Kouwenhoven v Minister of Police and Others (888/2020) [2021] ZASCA 119 (22 September 2021) Coram: PONNAN, WALLIS, SCHIPPERS and HUGHES JJA and KGOELE AJA Heard: 27 August 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 09h45 on 22 September 2021 Summary: Extradition Act 67 of 1962 – validity of arrest in terms of s 5(1)(b) of the Act – whether officials gave an undertaking not to arrest the appellant – whether any such undertaking was capable of binding the State – whether undertaking invalidates an arrest pursuant to an otherwise valid warrant. Affidavit in support of application for issue of a warrant of arrest in terms of s 5(1)(b) of Act – attested before another policeman employed in the same bureau – Regulation 7 of Regulation governing the administering of an oath or affirmation under the Justices of the Peace and Commissioners of Oaths Act 16 of 1963 – whether oath properly administered. Whether magistrate applied her mind to issue of warrant or 'rubber- stamped' it – failure to notify the Minister of Justice of issue of warrant in terms of s 8(1) of the Act – effect. ORDER On appeal from: Western Cape Division of the High Court, Cape Town (Cloete J, Fortuin J concurring, sitting as court of first instance): The appeal is dismissed with costs, such costs to include the costs of two counsel in respect of both the first respondent and the second and third respondents. Judgment reported sub nom Kouwenhoven v Minister of Police and Others [2019] 4 All SA 768 (WCC); 2021 (1) SACR 167 (WCC). JUDGMENT Wallis JA (Ponnan, Schippers and Hughes JJA and Kgoele AJA concurring) [1] Mr Kouwenhoven, the appellant, is a Dutch citizen, at present resident in Cape Town and a businessman who formerly had significant business interests in Liberia. On 21 April 2017 he was convicted by the Court of Appeal of ‘s-Hertogenbosch of repeatedly committing the offence of complicity in war crimes, and repeatedly violating the Dutch Sanctions Act, arising out of his involvement in the civil war in Liberia that raged between 1997 and 2003 and led to the downfall of the then President of Liberia, Charles Taylor.1 Mr Kouwenhoven was sentenced to serve a term of imprisonment of 19 years and his conviction and sentence have been upheld by the Supreme Court of the Netherlands.2 The present 1 His conviction was on the basis that he was a confidante of Mr Taylor and aided and abetted Mr Taylor’s own crimes during the course of that war. Mr Taylor was subsequently convicted by the Special Court for Sierra Leone of 11 counts of aiding and abetting war crimes and crimes against humanity involving acts of terrorism, murder, rape, enslavement and pillage and is serving a term of 50 years imprisonment. 2 He has lodged an appeal to the European Court of Human Rights, which it appears is still pending. The core legal question in the appeal is: litigation arises from his endeavours to resist the attempts of the Dutch government to secure his extradition from this country to serve his sentence in the Netherlands. This appeal was heard simultaneously with a related appeal in a case flowing from events occurring subsequent to and in consequence of the high court's decision in the present case.3 Judgment in that matter will be delivered at the same time as this judgment.4 [2] On 8 December 2017, Mr Kouwenhoven was arrested pursuant to a warrant of arrest issued, in terms of s 5(1)(b) of the Extradition Act 67 of 1962 (the Act), by an unidentified magistrate in Pretoria. He was brought before a magistrate in Cape Town and released on bail on 19 December 2017. On 31 January 2018 he launched the present review proceedings against the Minister of Police as first respondent; the Director of Public Prosecutions (Western Cape)(the DPP), as second respondent; the Minister of Justice and Correctional Services (the Minister of Justice), as third respondent; the Pretoria magistrate as the fourth respondent; and an unidentified magistrate in Cape Town who was appointed to conduct an extradition enquiry in terms of s 9 of the Act, as fifth respondent. [3] The aim of the review was to obtain declaratory orders that the decision to arrest him and the arrest itself had been unlawful and that the conduct of the extradition enquiry was unlawful and invalid. The relief underwent some minor amendment in the course of proceedings and in its final form read as follows: 'Did the Court of Appeal err in rejecting the defence’s submission that the amnesty scheme approved by Charles Taylor on 7 August 2003 prevented the prosecution of the defendant in the Netherlands for the crimes with which he had been charged?' (See: http://www.internationalcrimesdatabase.org/Case/3309/The-Public-Prosecutor-v-Guus-Kouwenhoven/) 3 Director of Public Prosecutions, Western Cape v Kouwenhoven; Kouwenhoven v Director of Public Prosecutions, Western Cape and Others [2021] 1 All SA 843 (WCC); 2021 (1) SACR 579 (WCC). 4 Kouwenhoven v Director of Public Prosecutions, Western Cape and Others [2021] ZASCA 120. ‘1. Declaring that the Applicant has been brought unlawfully before the Fifth Respondent, and that any future appearance before the Fifth Respondent and any consequences thereof in relation to the proceedings arising from his arrest of 8 December 2017 are unlawful and invalid. 2. 2.1. Declaring that the decision to issue the warrant for the arrest of the Applicant . . . issued by the Fourth Respondent on 6 December 2017 in terms of section 5(1)(b) of the Extradition Act . . . was unlawful and invalid; 2.2. Declaring that the warrant is unlawful and invalid; 2.3. The warrant is reviewed and set aside. 3. Declaring that the decision to arrest and the arrest of the Applicant on 8 December 2017 was: 3.1. Inconsistent with the Constitution . . .; 3.2. Unlawful and invalid. 4. The arrest and/or detention of the Applicant during the following periods is declared to be unlawful and unconstitutional; 4.1. From 8 December 2017 until 18 January 2018; and 4.2. From 18 January 2018 until the date of judgment in this application. 5. . . . 6. 6.1. Declaring that the Third Respondent’s decision to issue the ‘notification by the Minister of Justice and Correctional Services under Section 5(1)(a) of the Extradition Act . . . in relation to the Applicant, dated 22 February 2018 . . . was unlawful and invalid.’ [4] The review was opposed jointly by the two Ministers and the DPP, but the magistrates abided the decision of the court. It was heard by a full bench consisting of Fortuin and Cloete JJ and dismissed on 19 September 2019 in a judgment by Cloete J. Leave to appeal was refused, but it was subsequently granted by this court. The background [5] The relationship between South Africa and the Kingdom of the Netherlands in regard to extradition is governed by the European Convention on Extradition (the Convention). Under Article 12 it provides for requests for extradition and under Article 16(1) for requests for the provisional arrest of the person sought to be extradited. Article 16 provides that: 'In case of urgency the competent authorities of the requesting Party may request the provisional arrest of the person sought. The competent authorities of the requested Party shall decide the matter in accordance with its law.' A provisional arrest, if sought and granted, is sufficient to set the stage for an extradition enquiry in terms of s 9(1) of the Act, but the arrest falls away if a request for extradition is not forthcoming within time limits specified in Article 16. However, once the request for extradition is received, no further arrest is necessary and the extradition enquiry proceeds to determine whether the person in question qualifies for extradition. [6] The warrant of arrest issued by the fourth respondent was issued after receipt of a request for Mr Kouwenhoven's provisional arrest on 22 August 2017. An earlier request for his extradition received on 7 July 2017 and a request for his provisional arrest received on 21 July 2017, had been returned as not being in accordance with the requirements of the Convention and the Act. The warrant was issued on the basis of an affidavit sworn by Warrant Officer van der Heever of the Pretoria National Central Bureau of Interpol (Bureau). He is one of two police officers stationed at the Bureau dealing with extradition matters. Other desks deal with drugs, fraud and general matters. [7] The issues have undergone some refinement and four grounds for invalidity of the warrant and the arrest remain and were pursued in this court. Chronologically they were that: (a) In May 2017 Mr Kouwenhoven's attorney, Mr Eisenberg, spoke separately to W.O. van der Heever and Mr van Heerden, the Principal State Law Advisor, International Legal Relations in the Department of Justice and Constitutional Development. It was contended that in these telephone conversations the relevant authorities separately and independently undertook that Mr Kouwenhoven would not be arrested pursuant to a provisional request under Article 16(1) and would be afforded prior notice before action was taken against him. It was alleged that these undertakings created a right, or at least a legitimate expectation, that the authorities were obliged in law to honour. Their breach rendered his arrest and all proceedings consequent thereupon invalid and unlawful. (b) The affidavit of W.O. van der Heever was improperly attested before a colleague of his at the Bureau, Sergeant von Hagen, and was therefore invalid. This rendered the issue of the warrant invalid as it was not based on any evidence. (c) The magistrate who issued the warrant did not apply her mind to whether the warrant should properly be issued, but instead 'rubber- stamped' it and this rendered it invalid. (d) After issuing the warrant the magistrate did not comply with her obligation in terms of s 8 of the Act to furnish the Minister of Justice with particulars relating to the warrant and this rendered it invalid. On the basis that the issue of the warrant and Mr Kouwenhoven's arrest were unlawful on one or more of these grounds, it was contended that the entire process was invalid and he could not properly have been brought before the fifth respondent for the purpose of an extradition enquiry in terms of the Act.5 [8] An entirely separate issue arose from the then Minister of Justice issuing a notification under s 5(1)(a) of the Act on 22 February 2018. That section provided that the magistrate to whom such a notification was sent was obliged to issue a warrant for the arrest of the person whose extradition was sought in order for them to be brought before a magistrate under s 9 of the Act. A number of factual and legal arguments were advanced in relation to the validity of this notification. However, whatever the relevance of the point at an earlier stage of these proceedings, by the time it reached this court it was entirely academic. Not only had no warrant been issued in terms of the notification, but the Constitutional Court had declared s 5(1)(a) invalid with immediate effect.6 [9] In his supplementary founding affidavit Mr Kouwenhoven said that the issuing of this notice 'makes no sense whatsoever'. That was plainly correct. Nonetheless, he persisted with the argument that the notice should be declared invalid on two grounds. The first was that if the arrest in issue in this case were set aside the Minister might seek to trigger a further arrest by sending his notification to an appropriate magistrate. That contention was far-fetched, given that the section, and therefore the power of the magistrate to act on the notification, has been declared to be unconstitutional. No magistrate would issue a warrant in the face of that decision. The second ground was a contention that Mr Kouwenhoven was entitled to know whether the Minister's actions were 5 Reliance was placed on Ebrahim v S 1991 (2) SA 553 (A). 6 Smit v Minister of Justice and Correctional Services and Others [2020] ZACC 29; 2021 (1) SACR 482 (CC); 2021 (3) BCLR 219 (CC). unconstitutional. Two judgments were cited in support of this proposition.7 Neither was in point. The first, Pheko in the Constitutional Court, required a decision on the merits in order to determine whether the applicants were entitled to appropriate restitutionary relief. The second, Buthelezi in this court, was concerned with the issue of undue delay in the issue of visas and was a matter likely to arise again in the future. The arguments arising from the Minister's actions under s 5(1)(a) were plainly moot and it is unnecessary to say any more about them. [10] Before turning to the separate grounds upon which Mr Kouwenhoven challenged the validity of his arrest it is necessary to say something about the onus of proof and the approach the court must take to disputes of fact on the papers. It is trite that an arrest without a warrant is an interference with liberty and that the onus rests on the arrestor to justify it.8 Where an arrest takes place in terms of a warrant a judicial act has intervened and unless the validity of that judicial act can be assailed the existence of the warrant justifies the lawfulness of the arrest. The police officer in possession of a warrant of arrest is not obliged, over and above producing the warrant and showing that they acted in terms of it, to prove that the warrant was validly issued. It is for the party challenging the warrant to show why it should be set aside. That is why these proceedings were brought by way of judicial review. Contrary to Mr Kouwenhoven's heads of argument, they are not proceedings by way of habeas corpus. The analogy counsel sought to draw between these proceedings and an arrest in admiralty is also not apt. In admiralty the onus of justifying the arrest remains throughout on the 7 Relying on Pheko and Others v Ekurhuleni Municipality (Socio-Economic Rights Institute of South Africa as Amicus Curiae) [2011] ZACC 34; 2012 (2) SA 598 (CC) (Pheko) para 34 and Buthelezi v Minister of Home Affairs and Others [2012] ZASCA 174; 2013 (3) SA 325 (SCA) (Buthelezi) para 4. 8 Minister of Law and Order and Others v Hurley and Another 1986 (3) SA 568 (A) at 589D-H. applicant for the arrest, irrespective of the form of the proceedings in which the arrest is challenged. The Plascon-Evans rule is applied to determine whether the undisputed evidence on behalf of the applicant for arrest, when taken together with the respondent's evidence, discharges the onus. If it does not it is always open to the applicant to seek a reference to oral evidence, but given the nature of admiralty proceedings it is unusual for courts to accede to such a request. Here the justification for the arrest lies in the existence of the warrant and it is the challenge to the warrant that is relevant. On that the onus rested on Mr Kouwenhoven. Even had the onus rested on the respondents that would not have affected matters, because the case would still have had to be decided on the basis of the undisputed evidence of Mr Kouwenhoven, read together with the respondents' version.9 The undertaking issue [11] On 2 May 2017, Mr Eisenberg spoke on the telephone to W.O. van der Heever. The following day he spoke to Mr van Heerden. After these conversations he wrote to W.O. van der Heever and Mr van Heerden. The founding affidavit relied on these letters in support of an allegation that each of Mr van Heerden and W.O. van der Heever had given 'a clear and unequivocal undertaking' that Mr Kouwenhoven 'would not be arrested on the basis of any provisional arrest warrant or without notice'. The heads of argument characterised this as a binding agreement between him and the South African authorities, alternatively a non-binding undertaking by the authorities that had to be observed in accordance with Constitutional norms. 9 Ngqumba en ń Ander v Staatspresident en Andere; Damons NO en Andere v Staatspresident en Andere; Jooste v Staatspresident en Andere 1988 (4) SA 224 (A) at 259H-263D; President of the Republic of South Africa and Others v M & G Media Ltd 2011 (2) SA 1 (SCA) paras 13 and 14. [12] The underlying premise of these contentions was that, if such an undertaking was given, its breach invalidated the warrant and Mr Kouwenhoven's arrest pursuant thereto. The heads of argument were drafted on the footing that an undertaking had been given and breached. They examined whether the claim that Mr Kouwenhoven had become a flight risk was a legitimate reason for the breach. A separate argument that the issue of the warrant was invalidated by non-disclosure of the undertakings to the Pretoria magistrate was not pursued. My prima facie view is that the premise is faulty. The issue of a warrant is a judicial act authorising an arrest. The magistrate was not party to any undertakings and if the magistrate concluded on the papers that a proper case was made for the issue of a warrant, I do not see why that decision would be invalidated by the fact that the two officials were acting in breach of an undertaking. They would not be acting in good faith, but 'the worst motive does not render an otherwise lawful arrest unlawful'.10 Given the conclusion to which I come on the factual basis for these contentions it is, however, unnecessary to say more on this aspect of the case. [13] To place these conversations and the correspondence that followed in context, they occurred less than two weeks after Mr Kouwenhoven's conviction and sentence. No request for his extradition, or provisional arrest, had been received from the Netherlands, although the Bureau had received an Interpol Red Notice for assistance in securing his arrest. That indicated that the Dutch authorities intended to apply for Mr Kouwenhoven's extradition and would be seeking a provisional arrest in conformity with national laws and applicable treaties. The conversations involved different people and were entirely separate from 10 Tsose v Minister of Justice 1951 (3) SA 10 (A) at 17G-H; National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) para 37 one another. Any agreements reached or undertakings given were reached or given separately. They cannot be treated cumulatively [14] Mr Eisenberg had not previously met or communicated with W.O. van der Heever when he spoke to him on 2 May 2017. Later that day he wrote as follows: 'If I may, let me confirm your advices of this morning: (i) An INTERPOL "Red Notice" has already been posted for our client, Mr Gus Kouwenhoven; (ii) Our client has no intention whatsoever of departing the Republic of South Africa until the present matter is fully resolved; (iii) You have already received a Provisional Request from the authorities of The Netherlands for the arrest of our client; (iv) You have advised the Dutch authorities that the South African prosecutorial and police authorities will not be acting on their Provisional Request but a formal request for our client’s extradition to The Netherlands has been made and is expected within the next number of months; (v) Our client shall not be arrested pursuant to the Provisional Request or in the normal course but proper and dignified arrangements for handing our client over for our client’s first appearance on the basis of such formal request will be made between us.' In oral argument counsel submitted that the undertaking was contained in the final paragraph of this letter. [15] Did this letter on its terms embody an agreement or undertaking as alleged? In my view it did not. It made no reference to an agreement or undertaking. Nor did it ask for confirmation that an agreement had been reached or an undertaking given. The first item confirmed a matter of fact and the second involved a statement by Mr Eisenberg of his client's alleged attitude. It is common cause that the third paragraph was incorrect as a matter of fact, because no such request had been received. There appears to have been some miscommunication between Mr Eisenberg and W.O. van der Heever in this regard. The Interpol Red Notice under a heading 'Action to be Taken' recorded that the Dutch authorities wanted Mr Kouwenhoven to be arrested as his extradition was to be sought. The notice went on to say that: 'This request is to be treated as a formal request for provisional arrest, in conformity with national laws and/or the applicable bilateral and multilateral treaties.' If Mr Eisenberg thought that Interpol in the Netherlands represented the Dutch authorities, then from the perspective of a possible extradition this was mistaken. It seems probable that he construed W.O. van der Heever's reference to the Interpol notice as a request from the Dutch authorities, possibly via Interpol. As W.O. van der Heever had not been in touch with the Dutch authorities in regard to a request for extradition and such requests are routed through the Department of International Relations and Co-operation via the Department of Justice and Correctional Services he could not have been referring to a request from the Dutch authorities in relation to extradition. [16] The following paragraph built upon this. There had been no direct communication between W.O. van der Heever and the Dutch authorities. He explained in his affidavit that he had told Interpol in The Hague that it would be best to wait for the Netherlands request for extradition rather than seek Mr Kouwenhoven's arrest on a provisional basis, because that would facilitate the extradition and there did not appear to be any evidence of urgency at the time. This was not challenged in Mr Kouwenhoven's replying affidavit. In those circumstances it was undoubtedly the case that at that time W.O. van der Heever was not intending to seek Mr Kouwenhoven's immediate arrest on the basis of the Interpol Red Notice and he said that this was what he told Mr Eisenberg. [17] The fact that W.O. van der Heever told Mr Eisenberg that this was the factual position at the time of their conversation did not translate into an agreement or undertaking not to arrest Mr Kouwenhoven if a proper request for his provisional arrest in terms of Article 16 of the Convention was received. Nor could it be construed as an undertaking that he would not be arrested if such a request was received. [18] Mr Eisenberg's affidavit in support of the application took the matter no further. Concerning his conversation with W.O. van der Heever, he gave no evidence that would have put a different gloss on the conversation and the letter. All he did was assert that an undertaking was given, but that was a conclusion that could be drawn only if a full description of the purpose, nature and contents of their discussion had been given. None was. He filed a further affidavit together with Mr Kouwenhoven's replying affidavit and at a time when he knew what W.O. van der Heever had to say. Even then he did not deny the accuracy of the latter's recollection of their conversation. The furthest he was willing to go was to say that his approach 'was serious and formal in nature' and that it 'should have been apparent to W.O. van der Heever that I sought to conclude a binding arrangement with him'. It is not good enough to say that someone should have realised that a binding arrangement – one enforceable in a court of law – was being sought. That had to be stated in the conversation and then confirmed expressly in the letter. That was not done. [19] There can be little doubt that if Mr Eisenberg had told W.O. van der Heever that he was not merely in search of information, but was seeking to conclude an agreement, or extract an undertaking, that his client would not be arrested if the Dutch extradition authorities asked for his provisional arrest, the entire tenor of the conversation would have been different. Both parties were aware that an application for extradition was likely to be made. Both knew that in order to commence an extradition enquiry Mr Kouwenhoven would have to be arrested in terms of s 5 of the Act. A request by Mr Eisenberg that W.O. van der Heever would not act upon a proper request by the Dutch extradition authorities for Mr Kouwenhoven's provisional arrest in terms of the Convention would have been extremely far-reaching. It is impossible to conceive of an experienced police officer agreeing to it in a telephone conversation with an attorney who was unknown to him. At the very least a court would require convincing and direct evidence of the contents of the conversation before accepting that the police officer had concluded such an agreement or furnished such an undertaking. There is no such evidence, because Mr Eisenberg did not provide it. [20] Strictly speaking that conclusion renders it unnecessary to consider whether such an agreement or undertaking could ever be treated as binding. However, it is appropriate to express my reservations concerning the proposition that an official such as W.O. van der Heever had authority to conclude such an agreement, or give such an undertaking. Extradition between the Netherlands and South Africa is a matter of diplomatic relations between the two states governed by a formal convention. There can be no doubt that the Convention has 'become law' in South Africa.11 No authority was cited for the proposition that a police officer, charged with the responsibility of implementing requests in terms of the Convention, is entitled to conclude agreements or give undertakings that would bind the South African government to disregard a valid request for 11 President of the Republic of South Africa v Quagliani; President of the Republic of South Africa and Others v Van Rooyen and Another; Goodwin v Director-General, Department of Justice and Constitutional Development and Others [2009] ZACC 1; 2009 (2) SA 466 (CC) (Quagliani) para 46. a person's provisional arrest under the Convention. I am not here speaking of the exercise of a discretion in the exercise of his lawful duties in relation to a request under the Convention, such as determining precisely when and how an arrest is to be effected, but of an agreement or undertaking that would preclude him and the State from acting in terms of the Convention. At the end of the argument, I remained unconvinced that any such authority vested in W.O. van der Heever. [21] I turn then to the alleged agreement with, or undertaking furnished by, Mr van Heerden. On the same day as Mr Eisenberg's conversation with W.O. van der Heever, Mr Kouwenhoven's senior counsel, Mr Katz SC, spoke to Mr van Heerden. The founding affidavit placed no reliance on this conversation, no doubt because it was apparent that Mr Katz would thereby be rendered a potential witness. In terms of the rules governing the advocates' profession that would have required him to withdraw and not act in the litigation. In an endeavour to circumvent the problem, Mr Eisenberg, spoke to Mr van Heerden on the following day.12 After he had done so he sent the following letter: 'Let me confirm your advices of this morning, and as you have conveyed this to advocate Anton Katz SC: (i) It is correct that an INTERPOL ‘Red Notice’ has been issued and posted for our client, Mr Guus Kouwenhoven; (ii) While you have not (contrary to the advices of Warrant Officer Wimpie van der Heever, INTERPOL) received a Provisional Request for our client’s arrest for extradition, you have received an email from the Dutch Police Liaison Officer for 12 This did not dispose of the fact that Mr Katz was a material witness and merely exacerbated the problem because Mr Eisenberg was then the only the witness to the conversations with both W.O. van der Heever and Mr van Heerden. That he should have withdrawn and ceased to act, at least once it was apparent that there were disputes over the tenor and effect of those conversations, is clear. Hendricks v Davidoff 1955 (2) SA 369 (C); Elgin Engineering Co (Pty) ltd v Hillview Motor Transport 1961 (4) SA 450 (N) at 454F-H. Southern Africa advising you that our client was sentenced to 19 years in Holland (in absentia); (iii) You have consulted with INTERPOL and have reached an agreement that our client will not be arrested should you receive a Request for Provisional arrest’ (iv) You understand that the Dutch authorities are busy with the drafting of an Extradition Request and you will advise either advocate Katz or myself once you have received such a request; (v) I reiterate that if you receive a compliant Extradition Request from the Dutch authorities arrangements for handing our client over for his first appearance on the basis of such Request will first be made between us, especially in light of our client’s age and medical condition.' In oral argument counsel relied on the third and fifth paragraphs of this letter in support of the alleged agreement or undertaking. [22] Reliance was also placed on an email Mr van Heerden sent on 29 June 2017 to Mr Eisenberg, informing him that an electronic copy of an extradition request and request for the provisional arrest of Mr Kouwenhoven had been received and the original would be forwarded through diplomatic channels. Mr Eisenberg responded the same day as follows: ‘On the basis of our communications let me confirm with you the following: (i) A decision has been made by the South African authorities, including the Department of Justice and SAPS, that a Provisional Request for the arrest of our client Mr Guus Kouwenhoven, will not be entertained. (ii) . . . (iii) Based on my brief discussion with yourself this afternoon, it is unlikely that an Extradition Request, fully compliant with the formalities, will be received from the Dutch authorities prior to 27 July 2017.’ Manifestly this letter added nothing to the enquiry. If an agreement had been concluded, or an undertaking given, on 3 May 2017 this letter did not alter it. If no agreement was concluded and no undertaking given, this letter did not create one. It referred to a decision taken by the South African authorities, not to an agreement with, or an undertaking given to, Mr Kouwenhoven. Even assuming in the latter's favour that such a decision had been taken – something that was disputed – there was nothing to stop the South African authorities from changing their minds. No right or expectation by Mr Kouwenhoven would be affected thereby. [23] Whether the letters of 2 and 3 May 2017 could serve as proof of either an agreement or the furnishing of an undertaking by either W.O. van der Heever or Mr van Heerden is doubtful. Mr Kouwenhoven deposed to the founding affidavit, but he had not been a party to either conversation. Mr Eisenberg deposed to a supporting affidavit (which we were told in the practice note need not be read) in which he gave no details of the conversations he had with either W.O. van der Heever or Mr van Heerden. He purported to confirm that he received undertakings that Mr Kouwenhoven would not be arrested pursuant to any provisional request for his arrest and would not be arrested without notice to his legal representatives. This took the matter no further. When Mr Eisenberg delivered an affidavit together with the replying affidavit, he said that he was confirming the replying affidavit and the descriptions in that affidavit of the telephone discussions that he had with the two officials But those 'descriptions' added nothing to the founding affidavit. Mr Kouwenhoven said in regard to the conversation with Mr van Heerden that the letter made it plain that it was confirming the conversation in question. But that merely throws one back on the letter as the only evidence proffered in support of the alleged agreement or undertaking. It is entirely lacking in any detail as to the terms of the two conversations or how they were said to give rise to an agreement or undertaking. [24] Like the letter to W.O. van der Heever the letter to Mr van Heerden does not refer to an agreement or an undertaking. Nor did it seek confirmation of an agreement or undertaking. It referred to the earlier conversation between Mr Katz and Mr van Heerden, but neither Mr Katz nor Mr Eisenberg deposed to an affidavit saying that they asked Mr van Heerden to enter into an agreement or give an undertaking. Mr Eisenberg's affidavit was silent on the point. On the face of it these conversations were merely seeking information on behalf of their client and were not directed at concluding agreements or obtaining undertakings. Had those been proffered the letters would have been couched in markedly different terms. [25] The two passages on which counsel relied were even less indicative of an agreement having been reached between Mr Eisenberg and Mr van Heerden, or an undertaking having been given, than the passage relied on in the other letter. The statement that Mr van Heerden had consulted 'with INTERPOL' – a reference to W.O. van der Heever – and that the two of them had agreed not to arrest Mr Kouwenhoven if they received a request for a provisional arrest, even if correct, would not amount to an agreement with Mr Kouwenhoven, or an undertaking to him. It would merely reflect the current thinking of the two officials without any indication that, when, and if, a request for a provisional arrest was made, they would decline to act upon it. There appears to have been an assumption at the time that a formal request for Mr Kouwenhoven's extradition was imminent and that matters would then proceed on the basis of that application. As it happened, that is what occurred because a request for extradition was received on 7 July 2017, but returned because it did not comply with the provisions of the Act. It was only thereafter that a request was made for a provisional arrest on 21 July and that too was returned as non-compliant with the requirements for a provisional arrest. A compliant request was only received on 22 August 2017. [26] The dispute over a provisional arrest under Article 16 of the Convention, as opposed to an arrest pursuant to an extradition request under Article 12, was largely academic. As pointed out earlier, provided a formal request for extradition is timeously received, there is no need in order to hold an extradition enquiry under s 9 of the Act, for a person arrested under Article 16 to be re-arrested. The enquiry proceeds on the basis of the initial arrest. Provided a request for extradition was forthcoming Mr Kouwenhoven's arrest was inevitable. At most the enquiries to W.O. van der Heever and Mr van Heerden could have been directed at forestalling the need to prepare a bail application as a matter of urgency. Reference to the papers in the bail application reveal that it was in fact prepared well in advance, probably around 12 June 2017, which was the date on a report about prison conditions, commissioned especially for the purpose of the bail application. The founding affidavit in the bail application was signed four and a half hours after Mr Kouwenhoven's arrest and ran to 37 pages and 135 paragraphs, with a number of medical reports and the report on prison conditions annexed. [27] There is no need to repeat what was said in para 19 about the reaction of W.O. van der Heever to any direct request to agree not to arrest Mr Kouwenhoven, or to give an undertaking not to do so. The same improbability of an agreement being concluded or an undertaking given, applied equally in the case of Mr van Heerden. So do my reservations about the authority to conclude an agreement, or give an undertaking. In my view, as with the earlier letter the one addressed to Mr van Heerden does not on its terms support the claim of an agreement or an undertaking not to arrest Mr Kouwenhoven pursuant to a proper request for his provisional arrest. For those reasons, which differ somewhat from those of the high court, the first ground of attack on the validity of Mr Kouwenhoven's arrest was correctly rejected by the high court. The attack on the warrant of arrest [28] An initial application to strike out all the answering affidavits on behalf of the respondents, save that filed by Mr Burke of the DPP's office, on the grounds that they were deposed to before police officers was not pursued. Instead, the attack was limited to one on the attestation of W.O. van der Heever's affidavit by Sergeant van Hagen. The complaint was that, as she was a police officer employed in the same office as the deponent, she had an interest in the litigation that disqualified her from acting as commissioner of oaths. The basis for this was regulation 7(1) of the regulations governing the administration of oaths and affirmations (the regulations),13 which provides in terms that a commissioner of oaths shall not administer an oath or affirmation relating to a matter in which they have an interest. Under regulation 7(2) that provision does not apply to an affidavit or declaration mentioned in the schedule to the regulations. Item 2 of the Schedule provides: A declaration taken by a commissioner of oaths who is not an attorney and whose only interest therein arises out of his employment and in the course of his duty.' Provisions in these terms have been included in the relevant regulations for many years, both under the present statute and its predecessor.14 13 Regulations Governing the Administering of an Oath or Affirmation published in terms of s 10 of the Justices of the Peace and Commissioner of Oaths Act 16 of 1963 under GN R1258 of 21 July 1972, as amended published in GG 3619 of that date. 14 The Justices of the Peace and Commissioner of Oaths Act 16 of 1914. See Royal Hotel, Dundee and Others v Liquor Licencing Board, Area No 26; Durnacol Recreation Club v Liquor Licencing Board, Area No 26 1966 (2) SA 661 (N) (Royal Hotel, Dundee). [29] Regulation 7(1) and its predecessors have been the subject of judicial interpretation. The cases hold that the regulation requires commissioners to be independent in the exercise of their duties.15 An interest has been held to be a pecuniary interest, or some interest by which the legal rights or liabilities of the commissioner are affected.16 In Benjamin17 affidavits attested before the Deputy Master in litigation involving the Master and his staff were held to be inadmissible as contravening the regulation, but the judgment relied heavily on the decision in Brummer18 for this conclusion. The judge's attention had been drawn to the fact that Brummer had been overruled by this court,19 but he did not mention this. The decision cannot be taken as expanding the scope of what is meant by an 'interest' under the regulation. [30] The usual instances in which the commissioner has been held to have an interest are cases where an affidavit has been attested before an attorney acting in the litigation or proceedings for which the affidavit is tendered, or before that attorney's partner or agent. These cases overlap with a rule of evidence derived from English law that an affidavit deposed to before such an attorney is inadmissible.20 In Papenfus21 the court extended the exclusionary rule of evidence to an in-house legal adviser for a board in regard to affidavits deposed to by staff of the board in litigation to which the board was party. 15 Ibid at 667A. 16 Tambay v Hawa 1946 CPD 866; Louw v Riekert 1957 (3) SA 106 (T) at 111. 17 The Master v Benjamin NO 1955 (4) SA 14 (T) 18 R v Brummer 1952 (4) SA 437 (T) at 439. See also R v Du Pont 1954 (3) SA 79 (T). 19 R v Rajah 1955 (3) SA 276 (A) at 282 and 283. 20 See the cases collected in Royal Hotel, Dundee at 665H-668C and Radue Weir Holdings Ltd t/a Weirs Cash & Carry v Galleus Investments CC t/a Bargain Wholesalers 1998 (3) SA 677 (E) at 669H- 681E. 21 Papenfus v Transvaal Board for the Development of Peri-Urban Areas 1969 (2) SA 66 (T) at 69H- 70A [31] Counsel for Mr Kouwenhoven relied strongly on Papenfus so it is desirable to examine what it decided and the reasoning of the judge. He first considered the provisions of the regulations governing the administration of an oath. Those applicable at the time were the same in all material respects as the ones at present applicable. His conclusion was that the regulation did not preclude the legal adviser from acting as commissioner of oaths because she did not have an interest in the matter as provided in regulation 7(1). The judge said:22 'The commissioner of oaths in the present case, being a legal adviser to the respondent Board, has, on the ascertained facts, no 'personal' interest whatever in the fate of these proceedings, even if it were to be assumed against the respondent that she advised her employer to resist the applicant's motion, drew the several affidavits now in question and was therefore 'interested' in the course advised and pursued by her on behalf of the respondent. Her 'interest' would only arise from the fact of her employment. The information disclosed justifies the inference that, if she had not been so employed, she would have had no interest whatever in the outcome of this litigation. … The regulations should in my view be so interpreted as not to preclude a legal adviser from acting as a commissioner of oaths in litigation in which his employer is concerned. The 'interest' arising is too remote to fall within the general prohibition of reg. 3, and it is moreover rendered permissible by item 3 of the schedule.' The approach to the regulations was therefore consistent with other decisions holding that the regulations did not preclude a salaried employee of an attorney from acting as a commissioner of oaths in relation to affidavits deposed to by witnesses in proceedings in which their employer was the attorney of record for a party.23 [32] In the case of police officers investigating crimes two judgments holding that they had a disqualifying interest in relation to affidavits 22 Papenfus, ibid, 23 Tambay v Hawa, op cit, fn 15; Royal Hotel, Dundee, op cit, fn 13; S v Van Schalkwyk 1966 (1) SA 172 (T) at 174H-176F. signed by witnesses in the course of their investigations,24 were overruled by this court.25 In Royal Hotel Dundee it was said that item 2 in the schedule to the regulations appeared to cover the case of a police officer.26 Despite that, in Dyani,27 three affidavits deposed to by police officers were held to be inadmissible because they had been attested before commissioners of oaths who were themselves police officers. Another affidavit was excluded because the commissioner of oaths was a police officer and employee of the respondent. In excluding them Jafta J said: ' In this matter the affidavits by Mnyakaza, Mgodeli and Jooste were deposed to by colleagues of the commissioners of oath who, by virtue of their relations to the deponents, do not meet the requirement of an independent, unbiased and impartial commissioner. Botoman’s affidavit is also tainted by the fact that the commissioner of oaths is the employee of the first respondent and that other respondents were also colleagues of the commissioner. It is quite clear that all those commissioners could be regarded as having interest in the subject matter of these proceedings. It is unclear from the report how closely linked the deponents were to the commissioners of oaths, or whether the decision was based solely on the fact that both the deponents and the commissioners were police officers. The quoted passage suggests that it was a general rule that police officers could not act as commissioners of oaths in respect of affidavits deposed to by other police officers or other witnesses in any proceedings where the Minister of Police was involved. It is also unclear whether the judge was saying that the attestation was improper, or applying the rule of evidence in regard to their admissibility, which would have involved a substantial extension of that rule. There was no reference in the judgment to regulation 7(2) or to item 2 of the Schedule to the regulations. 24 R v Brummer and R v Du Pont op cit fn 17. 25 R v Rajah, op cit, fn 18. 26 Royal Hotel, Dundee, op cit, fn 13 at 668H. 27 Dyani v Minister of Safety and Security and others [2001] 3 All SA 310 (Tk) para 21. [33] In Sihlobo,28 after a careful consideration of the regulations, and in particular regulation 7(2), Pakade J held that Dyani was clearly wrong insofar as it held that a policeman could not act as a commissioner in relation to the affidavit of another police officer. That decision was followed in Van Rooyen.29 It is necessary to resolve the uncertainty in this regard. [34] Commissioners of oaths are persons designated by the Minister of Justice as such by virtue of their office. The current designation30 includes no fewer than 77 categories of officers, ranging from members of the National Executive and a number of persons holding office in the administration of justice (but curiously not judges, although their secretaries are designated), to the chairperson of management of a children's home in Pretoria. In terms of s 7 of the statute all of these are authorised to administer an oath or affirmation or take a solemn or attested declaration within the area for which they are a commissioner. Regulation 7(1) precludes a commissioner from performing these functions 'relating to a matter in which they have an interest'. The authorities already cited say that this must be a pecuniary interest or an interest whereby the rights and obligations of the commissioner would be affected. [35] The mere fact of employment by a person having an interest in the matter has not been regarded as constituting a disqualifying interest, save in the two cases involving police officers that were overruled in Rajah, 28 S v Sihlobo [2004] JOL 12831 (Tk) paras 10-21. 29 Van Rooyen and Another v The Minister of Police and Others 2019 (1) SACR 349 (NCK) paras 29- 37. It was also followed in an unreported decision of the Gauteng division in Grammaticus (Pty) Ltd v Minister of Police and Others 50538/2017 dated 12 December 2017, a copy of which was made available to us by counsel. 30 Designation of Commissioners of Oaths in terms of section 6 of the Justices of the Peace and Commissioners of Oaths Act 1963 published under GN 903 of 10 July 1998 in GG 19033 of that date. and now possibly in Dyani. The implications of extending the concept of an interest in the matter under the regulations to employees would be far- reaching. Could a judge depose to an affidavit before their secretary, or the secretary of a colleague, or the registrar of the court? Could they depose to an affidavit before a magistrate? One merely has to peruse the list of persons who are appointed as commissioners of oaths to realise the complexities that would potentially arise if that approach to an interest were to be adopted. Fortunately it is not the approach adopted by our courts and Regulation 7(2), read with Item 2 of the Schedule, puts the matter beyond doubt. If the only interest arises out of the commissioner's employment and in the course of their duty it does not fall under regulation 7(1). In that sense regulation 7(2) may not embody an exception in the usual sense of a provision that cuts down what would otherwise be the scope of regulation 7(1). Its purpose is rather more to operate ex abundante cautela by making it clear that the performance of a commissioner's functions arising out of their employment and in the course of their duties is not prohibited. To the extent that Dyani decided otherwise it was incorrect and is overruled. [36] The facts in this case fall squarely within item 2 of the schedule to the regulations. Sergeant van Hagen is stationed at the General Desk of the Interpol bureau in Pretoria and has no involvement in extradition matters. She had not been involved in the proceedings against Mr Kouwenhoven and said that she was unaware of the matter and had not even heard her colleagues discussing it. She commissioned W.O. van der Heever's affidavit because she is a police officer and was readily available to do so. The argument that she had an interest in the matter disqualifying her from doing so had no merit. [37] Given the reliance placed on Papenfus it is as well to address the decision in that case. Contrary to the submissions before us, the court accepted that the affidavits had been properly commissioned, but then turned to their admissibility in terms of the rule of evidence already mentioned. In holding them to be inadmissible it said:31 'The fact that the commissioner is a partner of the deponent, or his servant, or a co- official, or a junior officer must, in some cases at least, militate against the proper discharge by the commissioner of his duty. That is the reason for excluding clerks and partners of an attorney as commissioners of oaths for affidavits drawn by the attorney for a party or witness. The reason becomes even more cogent where the attorney himself happens to be the deponent. That is closely similar to the situation where officials of an organisation like the respondent Board have to swear to depositions before a commissioner of oaths who, as the legal adviser, is their colleague and conceivably their junior colleague. The risk of the procedure in administering the oath being something less than ideal becomes too great to be countenanced by the Court. The rule excluding attorneys should be extended to include legal advisers. If the respondent Board wishes to have affidavits by its officials attested for court purposes, the attestation should preferably be by a commissioner unconnected with its organisation, certainly not by its legal adviser. In my view the attestation by the legal adviser of the affidavits filed by the respondent is insufficient to render them admissible in evidence. They are struck out.' [38] There is a fundamental problem with this line of reasoning. Once it was accepted, as the court did, that the affidavits had been properly commissioned by the legal adviser, on what basis was it entitled to say that they were inadmissible? In application proceedings evidence is presented by way of affidavits. The manner in which affidavits are to be sworn or affirmed is prescribed under the regulations. An affidavit sworn in accordance with those regulations is an affidavit for whatever purpose it is tendered. If it contains inadmissible evidence, such as hearsay, or 31 Papenfus op cit fn 20. irrelevant matter, it can be struck out, either in whole or in part, but if the evidence is relevant and otherwise admissible, I fail to see on what legal basis it can be excluded. [39] The basis has been said to be a rule of evidence derived from English law and made applicable in the Transvaal by s 55 of the Transvaal Evidence Proclamation 1902.32 In turn its foundation lay in two very specific statutory rules of court. The one said specifically that no affidavit would be sufficient that was sworn before a solicitor acting for a party, or an agent or correspondent of the solicitor, or the party themselves. The second said that if an affidavit would have been insufficient if sworn before the solicitor, it would be insufficient if sworn before the solicitor's clerk or partner.33 There are no equivalent provisions in our law and the limitations on commissioners of oaths acting as such are those set out in the regulations. [40] In Royal Hotel, Dundee34 Caney J traced the history of the matter in Natal and said that from 1937, when the earlier regulations came into effect, the evidential rule and the regulations had operated side by side, the one in relation to litigious matters and the other in relation to other matters. However, the cases he discussed where affidavits were excluded were all cases where the attorney before whom they had been sworn had an interest in the matter. Accordingly, there was no need for an evidential rule to exclude them as they had been sworn before commissioners who were disqualified. I have not found any reference to such a rule in the texts on evidence that I have consulted. Papenfus appears to be the first 32 Louw v Riekert 1957 (1) SA 106 (T) at 110H-112B. The researches of Caney J in Royal Hotel, Dundee suggest that there was a similar rule in Natal under a similar statute. 33 This rule was upheld in Louw v Riekert, ibid, but had been rejected in Geldenhuis Deep Ltd v Superior Trading Co (Pty) Ltd 1934 WLD 117. 34 Op cit, fn 13 at 666F-670A case to apply the rule to affidavits properly executed before a competent commissioner of oaths in accordance with the regulations. [41] It seems to me that what was once a rule of evidence is now dealt with by the detailed provisions of the regulations governing the commissioning of affidavits. There is nothing in those regulations to suggest a bifurcation between affidavits in litigious matters and those prepared for non-litigious purposes. Nor can I discern anything in the regulations that supports an evidential rule such as that which formerly applied by virtue of English statutory provisions. So far as I can ascertain the position in England is simply that solicitors may not act as commissioners of oaths where they represent a party in proceedings or where they have an interest in the matter that is the subject of the affidavit. That is also the situation in South Africa as a result of the regulations. In my view there was no justification in Papenfus for the invocation and extension of the old evidentiary rule. There is even less justification for extending it further to the facts of this case. The challenge to the commissioning of W.O. van der Heever's affidavit must fail. Rubber stamping [42] On a proper consideration of the material placed before the Pretoria magistrate in support of the application for the warrant the issue of the warrant was justified. Any argument based upon the non-disclosure of the alleged agreement or undertaking falls away with my rejection of the contention that there was such an agreement or undertaking. On what factual basis, then, does the argument depend that the magistrate did not apply her mind to that material and the provisions of the Act? The answer is none at all. [43] The point first emerged in Mr Kouwenhoven's first supplementary founding affidavit at a stage when the record delivered in response to the review application did not include W.O. van der Heever's affidavit. The contention was that there was no affidavit and no oral evidence and therefore, where the order said that the magistrate acted on 'information under oath', that was incorrect. For that reason, it was said that the magistrate simply rubber-stamped the request for a warrant without applying his or her mind to the matter. This rationale disappeared once the record was filed thereafter and it was apparent that there was an affidavit in support of the application. Undeterred, in his second supplementary founding affidavit Mr Kouwenhoven attacked the issue of the warrant on the basis of a variety of alleged non-disclosures, the only one of which pursued in this court being the non-disclosure of the alleged agreement or undertaking. [44] The allegation of rubber-stamping was not repeated on this occasion. It resurfaced in the replying affidavit in response to a statement by W.O. van der Heever that the magistrate issued the warrant 'after considering the application'. This provoked Mr Kouwenhoven to say the following: 'All the indications are that, in fact, the Pretoria magistrate did not consider the application and simply "rubber-stamped' the draft warrant. In this regard the absence of any affidavit from the Pretoria Magistrate is telling. The Pretoria Magistrate clearly rubber-stamped what W.O. van der Heever placed in front of her without bothering to read the application. Her rubber-stamping occurred on the same day.' [45] No factual foundation existed for any of these allegations. The heads of argument sought to elide the original allegation of rubber- stamping, based on the incorrect belief that there was no affidavit before the magistrate, with an allegation based on the fact that the magistrate abided the decision of the court in the application and did not deliver an affidavit. But there was no reason for the magistrate to file an affidavit, because there was no factual matter for her to deal with. [46] The heads of argument suggested that the magistrate 'did not notice the errors in the commissioning of the affidavit'. The 'errors' to which this referred were that Sergeant van Hagen did not print her full name below the declaration. She gave her name and rank, which demonstrated that she was ex officio a commissioner of oaths, as required by regulation 4(2)(b).35 The failure to give her full names was irrelevant and, as the papers in this case show, occurs frequently in the attestation of affidavits. The addition of 'Estie' before 'Van Hagen' would not have made the slightest difference and substantial compliance was all that was necessary.36 Whether the magistrate noticed the omission was neither here nor there. An oversight in that regard would not have affected the validity of the decision to issue the warrant. The other fact advanced in the heads of argument as evidence of 'rubber-stamping' was the failure by the magistrate to give notice to the Minister of Justice in terms of s 8(1) of the Act. How, a failure to attend to an administrative task after issuing a writ was evidence of a failure to consider the issues relevant to the issue of the writ was not explained. [47] The decision to issue a warrant is a judicial decision and there is no reason to think that it was taken other than properly. There was no 35 The regulation requires the commissioner to 'state his designation and the area for which he holds his appointment or the office held by him if he holds his appointment ex officio.' Saying that she was a sergeant in the South African Police Service satisfied this requirement. 36 Noordkaaplandse Ko-op Lewendehawe Agentskap Bpk v Van Rooyen and Others 1977 (1) SA 403 (NC) at 408H. reason for the magistrate to deliver an affidavit justifying her decision and saying that she applied her mind to the matter before issuing the warrant. A failure to deliver an affidavit when there is nothing to respond to was not a basis for this argument. There was no merit in the 'rubber- stamping' point. Section 8 of the Act [48] Section 8(1) of the Act provides that ‘8 Magistrate to furnish Minister with particulars relating to issue of certain warrants (1) Any magistrate who, under paragraph (b) of subsection (1) of section 5 or under section 7, issued a warrant for the arrest or further detention of any person other than a person alleged to have committed an offence in an associated state, shall forthwith furnish the Minister with particulars relating to the issue of such warrant.’ The need for the magistrate to do this arises, because in terms of s 8(2) the Minister is entitled, if the warrant has not yet been executed, to direct that it be cancelled, or, if it has been executed, to direct the discharge of the person concerned. That may be done either because the Minister is of the view that the request for extradition is being delayed unreasonably or for any other reason the Minister may deem fit. [49] It is common cause that the magistrate did not furnish the Minister with particulars of the issue of the warrant and the Minister did not consider whether to exercise his powers under s 8(2). The submission was that depriving the Minister of the opportunity to set aside the warrant invalidated the warrant itself. However, once it was accepted that the initial issue of the warrant was lawful, counsel found himself in difficulties in explaining when and how invalidity would occur. The Act does not provide that the warrant is stayed until after the Minister has been given notice under s 8(1), nor does it provide that the warrant lapses if the Minister is not notified within a specified time period. Section 8(2) expressly contemplates that the person concerned may already have been arrested pursuant to the warrant by the time the Minister considers their situation. [50] Although s 8(1) contemplates that the particulars will be given 'forthwith' it is inevitable that some time will elapse between the issue of the warrant and furnishing the Minister with particulars of the issue of the warrant. What period of delay is permissible before the validity of the warrant expires? Counsel was unable to say. Various factual scenarios were posed with a view to securing clarity on the issue. How long a delay would matter? In this case the warrant was issued on 6 December and executed on 8 December. Was that invalid because no notification to the Minister had been sent? What if the magistrate had prepared a letter immediately, but it required to be typed and there was a holdup with the typist, or the magistrate was called away for a couple of days to attend to a family emergency? What if the magistrate was involved in a serious motor accident that evening and was hospitalised for a lengthy period or even killed? When would the validity of the warrant expire and how would anybody know? [51] The inability to provide an answer indicated that there was a serious flaw in the argument. It lay in the proposition that a failure to perform the duty imposed under s 8(1) operated retrospectively to invalidate the warrant. While the obligation to furnish particulars relating to the issue of the warrant arose from the issue of a warrant, the propriety of the decision to issue the warrant was not affected thereby. That decision required the magistrate to bring an independent mind to bear on the issues relevant to a determination that the person concerned was subject to extradition.37 Having done so the magistrate would have performed her proper function in regard to the issue of the warrant and her subsequent conduct would not affect that. The purpose of s 8(2) is to enable the Minister to consider whether there are reasons why the warrant should remain in force. Although the magistrate is obliged to furnish particulars of the issue of the warrant forthwith upon issuing the warrant, there is no time limit on the Minister's consideration of whether it should remain in force. The Minister's powers may be exercised 'at any time' after having been notified that a warrant has been issued. It would be a curious construction of these provisions that the magistrate's failure to furnish particulars to the Minister 'forthwith' would cause the warrant to lapse but, if she did furnish them, the Minister could take a lengthy period before taking any decision. Given the nature of the circumstances in which the Minister may set the warrant aside it is even conceivable that the initial decision may be to sustain the arrest, but with the passage of time the Minister might conclude that the request for extradition is being unreasonably delayed and direct that the arrested person be discharged forthwith. [52] Were a consequence as drastic as the invalidity and lapsing of the warrant intended, one would have expected s 8(2) to be specific as to the period that would constitute furnishing particulars 'forthwith'. and to state expressly the consequences flowing from non-compliance. Furthermore, there is nothing to prevent the Minister from exercising the powers conferred by s 8(2) when the issue of the warrant comes to the Minister's attention, albeit not as a result of the magistrate's actions. That was the situation in the present case. 37 Smit op cit, fn 5 para 111. [53] For those reasons, I am satisfied that the magistrate's failure to comply with s 8(1) did not invalidate the warrant. This point must also be rejected. The circumstances of the arrest [54] As a last-ditch contention, counsel sought to argue as an additional point that the circumstances of Mr Kouwenhoven's arrest were not in accordance with the 'proper and dignified' arrangements that were referred to in the closing paragraph of Mr Eisenberg's letter to W.O. van de Heever. Quite why this would invalidate the arrest was not explained, but it is unnecessary to dwell on it. The point had not been raised as a ground for invalidating the arrest in the founding affidavit and there was no evidence to support it. The police arrived at Mr Kouwenhoven's home at 7.50 am on 8 December 2017, which in a fit of hyperbole counsel described as a 'dawn raid', and at around 8.30 am he was taken in an unmarked police vehicle (not a police van) from the house to the Sea Point police station. During the period between 7.50 am and 8.30 am he took the police on a tour of all five stories of his house. He deposed to his affidavit in support of his bail application four hours later. This was hardly the 'perp walk' of American journalism and the proper response to the submission is to echo the words of Sachs J in Quagliani that:38 ‘Legal representatives are entitled, even obliged to defend the interests of their clients with vigour and panache. Yet there must be limits to their ingenuity. Stretching the bounds of appropriate forensic procedure beyond breaking point is not permissible. 38 President of the Republic of South Africa v Quagliani; President of the Republic of South Africa and Others v Van Rooyen and Another; Goodwin v Director-General, Department of Justice and Constitutional Development and Others [2009] ZACC 1; 2009 (2) SA 466 (CC) para 73. The raising in the affidavits of a number of points and their subsequent abandonment indicated that Mr Kouwenhoven's legal representatives exercised their ingenuity to its limits. [55] There was no merit in the point. General [56] None of the arguments advanced in support of the contention that the arrest of Mr Kouwenhoven was invalid had any merit. It is accordingly unnecessary to address the contention, based on the decision of this court in Ebrahim39 that, if the grounds advanced had any legal merit, they necessarily meant that the magistrate charged with conducting an extradition enquiry under ss 9 and 10 of the Act had no jurisdiction to do so. Other than noting that Mr Ebrahim had been unlawfully abducted from Swaziland and brought into South Africa, which is fundamentally different from Mr Kouwenhoven's situation, it is unnecessary to discuss the case. It is also unnecessary to consider the cases where courts have discussed, in the context of civil proceedings, whether the fact that a person has been brought before a magistrate and thereafter remanded in custody interrupts the chain of causation between a prior unlawful arrest and the further detention of the arrested individual.40 Result [57] The appeal is dismissed with costs, such costs to include the costs of two counsel in respect of both the first respondent and the second and third respondents. 39 Ebrahim v S 1991 (2) SA 553 (A). 40 De Klerk v Minister of Police [2019] ZACC 32; 2021 (4) SA 585 (CC) paras 36 to 45. _____________________________ M J D WALLIS JUDGE OF APPEAL Appearances For appellant: A Katz SC (with him D Cooke) Instructed by: Eisenberg & Associates, Cape Town; Webbers Attorneys, Bloemfontein For first respondent: A M Breitenbach SC (with him A G Christians) Instructed by: State Attorney, Cape Town and Bloemfontein. For second and third respondents: F Petersen (with him M Mokhoaetsi) Instructed by: State Attorney, Cape Town and Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 22 September 2021 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Kouwenhoven v Minister of Police and Others (888/2020) [2021] ZASCA 119 (22 September 2021) and Kouwenhoven v Director of Public Prosecutions, Western Cape and Others (288/2021) [2021] ZASCA 120 (22 September 2021) These two appeals arose out of Mr Kouwenhoven's endeavours to avoid his extradition to the Netherlands. He is a Dutch citizen, at present resident in Cape Town and a businessman who formerly had significant business interests in Liberia. On 21 April 2017 he was convicted by the Court of Appeal of ‘s-Hertogenbosch of repeatedly committing the offence of complicity in war crimes, and repeatedly violating the Dutch Sanctions Act, arising out of his involvement in the civil war in Liberia that raged between 1997 and 2003 and led to the downfall of the then President of Liberia, Charles Taylor. Mr Kouwenhoven was sentenced to serve a term of imprisonment of 19 years and his conviction and sentence have been upheld by the Supreme Court of the Netherlands. On 8 December 2017, Mr Kouwenhoven was arrested pursuant to a warrant of arrest issued, in terms of s 5(1)(b) of the Extradition Act 67 of 1962 (the Act), by a Pretoria magistrate. The first appeal arose from review proceedings instituted by him to challenge the validity of his arrest and his being brought before a magistrate in Cape Town to face an extradition enquiry. The review failed in the high court and his appeal was dismissed today. The review challenged Mr Kouwenhoven's arrest on four grounds. He contended that his attorney had concluded an agreement, or obtained an undertaking, from a police officer stationed at the Interpol desk in Pretoria that Mr Kouwenhoven would not be arrested pursuant to an application by the Netherlands for his provisional arrest under the extradition treaty between that country and South Africa. He said a similar agreement had been concluded, or undertaking given, by a senior legal adviser in the Department of Justice and Constitutional Development. The SCA held that no such agreement was concluded and no undertaking was given. It also expressed strong reservations at the proposition that either official was empowered to conclude such an agreement or furnish such an undertaking. The remaining grounds of review were that the police officer's affidavit on which the arrest warrant was issued was not properly attested; that the magistrate merely 'rubber stamped' the request for the issue of a warrant; and that after issuing the warrant the magistrate failed to inform the Minister of Justice and Constitutional Development of that fact as required by s 8(2) of the Extradition Act. The SCA rejected each of these arguments. In the result the appeal was dismissed. After the review had been dismissed in the high court an extradition enquiry was convened before a magistrate in Cape Town in terms of s 10 of the Extradition Act. At the end of that enquiry the magistrate discharged Mr Kouwenhoven on the grounds that the criminal conduct of which he had been found guilty had been committed in Liberia and not the Netherlands. The Director of Public Prosecutions, Western Cape then required the magistrate to state a case in terms of s 310(1) of the Criminal Procedure Act 52 of 1977 and appealed to the Western Cape Division of the High Court. This prompted Mr Kouwenhoven to launch review proceedings alleging that an appeal under s 310 (1) was impermissible after an extradition enquiry and that, in any event, the process followed in preparing the stated case was flawed because he had not been given an opportunity to participate in it. The high court had dismissed the review and upheld the DPP's appeal. The SCA today confirmed that decision. It held that, properly understood, an extradition enquiry is a criminal proceeding for the purposes of s 310(1) of the Criminal Procedure Act. It serves the purpose of enabling errors of law by the magistrate, leading to the discharge of the person whose extradition is requested, to be corrected. The process for formulating a stated case is set out in the rules and does not require the input of the person whose extradition is requested. On the legal issue the court held that the relevant provisions of the Extradition Act dealing with extradition require that the crime for which the person is to be, or has been, charged, is one within lawful jurisdiction of the requesting state's courts. It is not confined to the territorial jurisdiction of those courts. Accordingly Mr Kouwenhoven could be extradited to the Netherlands to serve his sentence.

1277

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case Number : 626 / 2007 No precedential significance MARIA DE LOURDES ABRANTIS DE SOUSA Appellant and THE STATE Respondent Neutral citation: De Sousa v The State (626 / 2007) [2008] ZASCA 93 (12 September 2008) Coram : BRAND, PONNAN and JJA and LEACH AJA Heard: 2 September 2008 Delivered: 12 September 2008 Summary: Fraud – sentence – approach to on appeal - striking disparity between sentence imposed and that which the appellate court would have imposed – sentence reduced from seven- and-a-half to four years’ imprisonment. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Johannesburg High Court, (Horn J and Mlonzi AJ sitting as a court of appeal) The appeal succeeds. The sentence is set aside and there is substituted for it a sentence of four years’ imprisonment. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ PONNAN JA (BRAND JA and LEACH AJA concurring): [1] The appellant was convicted, pursuant to her plea of guilty, by the Regional Court (Johannesburg) of 13 counts of fraud involving a total amount of R1 000 228,94. All counts having been taken as one for the purposes of sentence, the appellant was sentenced to a term of imprisonment for a period of 7½ years. An appeal to the Johannesburg High Court (per Horn J, Mlonzi AJ concurring) having proved unsuccessful the further appeal is with the leave of this court. [2] The facts and circumstances relating to the conviction can be gleaned from the appellant’s written plea explanation in terms of s 112 of the Criminal Code: ‘2 In pleading guilty to the said charges I admit: 2.1 that I misrepresented to Maslex and or their employers that 2.1.1 goods were bought by Maslex from MDS Marketing and or M de Sousa and or MDS Marketing trading as M de Sousa on the dates as per column 1 of the schedule attached to the charge sheet for the amounts as per schedule 2 of the said schedule. 2.2 that by means of the said misrepresentations Maslex and or their employers were induced to their prejudice or potential prejudice to: 2.2.1 accept the said misrepresentations as being the truth and or 2.2.2 pay the amounts as per column 2 of the schedule to MDS Marketing and or M de Sousa or MDS Marketing trading as M de Sousa. 2.3 that when I made the said misrepresentations as aforesaid I knew that the goods were not bought by Maslex from MDS Marketing and or M de Sousa and or MDS Marketing trading as M de Sousa for the amounts as per column 2 of the schedule and that the amounts were not payable as aforesaid. The circumstances under which I committed these crimes were as follows: 3.1 During 1999 I met my co-accused Mr Dos Santos, who at the time was an executive director of Maslex. 3.2 We engaged in a lover’s relationship. 3.3 I was confronted by Mr Dos Santos and asked whether or not my bank account could be utilised in order to get cheques from Maslex cleared and thereafter the monies would be transferred to his personal account. 3.4 At the time I was sceptical of this arrangement but I was informed by Mr Dos Santos, that I had to explain that I in fact sell water should I ever be asked about the money that had been deposited into my account. 3.5 I was at all times aware of the fact that Mr Dos Santos neither myself nor MDS Marketing bought any goods from Maslex and that no monies were payable to myself, Mr Dos Santos or MDS Marketing. 3.6 I then agreed to utilise my bank account for the clearance and transfers of the monies as set out above. 3.7 I then actually paid the cheques on the dates as set out in column 2 of the schedule into my bank account after the said cheques were handed to me by Mr Dos Santos. 3.8 The cheques were cleared on the same day whereafter I transferred the monies into the bank account of Mr Dos Santos. 3.9 From the monies that I transferred to the account of Mr Dos Santos I received an amount of R90 000,00 for my participation in this scheme. 3.10 I utilised the said monies in order to pay my debt and debt incurred by Mr Dos Santos. These facts will be more clearly set out to the court during sentence procedures. I further admit that when I acted as aforesaid I knew that no monies were due to myself or MDS Marketing that my actions were wrong and that I was not entitled to deposit the cheques or to transfer the money as aforesaid.’ [3] It is common cause that Act 105 of 1997 – the so-called minimum sentencing legislation, finds application and that the matter falls within the purview of Part 2 of Schedule 2 of the Act. In terms of s 51(2)(a)(i), the legislature has ordained 15 years’ imprisonment for a first offender found guilty of an offence of this kind, unless substantial and compelling circumstances in terms of s 51(3)(a) which would justify the imposition of a lesser sentence are found to exist . The trial court did indeed find such circumstances to be present. It thus departed from the statutorily prescribed minimum sentence. [4] The approach of a sentencing tribunal to the imposition of the minimum sentences prescribed by the Act is to be found in the detailed judgment of Marais JA in S v Malgas 2001 (1) SACR 469 (SCA). The main principles appearing in that judgment which are of particular application to the present appeal are: first, the court has a duty to consider all the circumstances of the case, including the many factors traditionally taken into account by courts when sentencing offenders; second, for circumstances to qualify as substantial and compelling, they do not have to be exceptional in the sense of seldom encountered or rare; third, although the prescribed sentences required a severe, standardised and consistent response from the courts unless there were, and could be seen to be, truly convincing reasons for a different response, the statutory framework nonetheless left the courts free to continue to exercise a substantial measure of judicial discretion in imposing sentence. (See also S v Fatyi 2001 (1) SACR 485 (SCA) para 5; S v Abrahams 2002 (1) SACR 116 (SCA) para 13.) [5] The circumstances entitling a court of appeal to interfere in a sentence imposed by a trial court were recapitulated in Malgas (para 12), where Marais JA held: ‘A court exercising appellate jurisdiction cannot, in the absence of material misdirection by the trial court, approach the question of sentence as if it were the trial court and then substitute the sentence arrived at by it simply because it prefers it. To do so would be to usurp the sentencing discretion of the trial court. . . . However, even in the absence of material misdirection, an appellate court may yet be justified in interfering with the sentence imposed by the trial court. It may do so when the disparity between the sentence of the trial court and the sentence which the appellate Court would have imposed had it been the trial court is so marked that it can properly be described as “shocking”, “startling” or “disturbingly inappropriate”.’ [6] It has not been suggested that the sentence was vitiated by any misdirection. The argument advanced on behalf of the appellant is that the degree of disparity between the sentence imposed and that which this court would have imposed is such that interference is competent and required. As Marais JA put it in S v Sadler 2000 (1) SACR 331 (SCA) para 8, ‘The traditional formulation of the approach to appeals against sentence on the ground of excessive severity or excessive lenience where there has been no misdirection on the part of the court which imposed the sentence is easy enough to state. It is less easy to apply. Account must be taken of the admonition that the imposition of sentence is the prerogative of the trial court and that the exercise of its discretion in that regard is not to be interfered with merely because an appellate Court would have imposed a heavier or lighter sentence. At the same time it has to be recognised that the admonition cannot be taken too literally and requires substantial qualification. If it were taken too literally, it would deprive an appeal against sentence of much of the social utility it is intended to have. So it is said that where there exists a “striking” or “startling” or “disturbing” disparity between the trial court’s sentence and that which the appellate Court would have imposed, interference is justified. In such situations the trial court’s discretion is regarded (fictionally, some might cynically say) as having been unreasonably exercised.’ [7] It is so that the appellant has shown genuine remorse and contrition in: first, co- operating with the investigating officer from the time of her arrest; second, admitting her role in the commission of the offences; third, deposing to a witness statement and agreeing to testify against Mr Dos Santos; fourth, signing an acknowledgement of indebtedness in favour of Maslex in the sum R90 000 being the extent of her benefit from the fraudulent scheme and thereafter paying that debt in full; and, fifth, pleading guilty to the charges. [8] It must also count in her favour that her first foray into crime occurred at the relatively advanced age of 32 years. And, when she did eventually venture into crime it was at the instance of her boyfriend with whom she evidently was besotted. As she explains in her evidence: ‘Can you maybe explain to the court why you committed this crime? What was the reason therefore? --- I have never been proposed, and Rui proposed to me, and it was a husband that I was going to get, and the life that I was going to have with him, that knowing that he was a director of Maslex, I did not even see any problem with what he was asking me to do, and what I was doing at the time. Did you actually trust him? --- He was, he is a well travelled man. He, in my experience, he used to speak, he used to have the ANC on a speed dial on his cell phone, and everything just came, everything happened that he promised everything happened, so there was no reason for me to doubt him at that time.’ [9] Mr Dos Santos obviously preyed on the appellant’s vulnerabilities. He proposed to her, which she accepted and led her to believe that they would be getting married in the near future. Shortly after she had become complicit in his fraudulent scheme, however, he moved out of their shared apartment and became involved with another woman. But, while she initially succumbed to his charms and acted under his influence in becoming a party to the criminal venture, she persisted long after the relationship had ended. On the appellant’s own version, their relationship lasted some four to five months. For the first two of those, Mr Dos Santos was unemployed. The fraudulent scheme commenced almost immediately after he had secured employment. All told the offences were perpetrated over a period in excess of nine months – sufficient time it seems for reflection and re-consideration, particularly when it was only for a third of that time that she was intimately involved with Mr Dos Santos and would have been susceptible to his influence. [10] It is indeed so that the appellant utilised some of the money to assist her mother, who was, according to the appellant, in financial difficulty and her sister (whose husband was in rehabilitation) to pay school fees. She had as well to pay Mr Dos Santos’ cell phone debt to the tune of R10 000. Much of the money however was spent in a wasteful way on lavish items and not for needy purposes. It was not needed to satisfy any of the necessities of life. On the other hand, to the appellant’s credit, she has been in gainful employment since March 1993 as a production manageress at Ster Kinekor. Not only were her employers aware of the fact that criminal charges had been preferred against her, but they had loaned and advanced to her the sum of R50 000 which she utilised to pay bail, legal costs and the like. Her excellent work record and the trust that her employers continued to repose in her, particularly after they had learnt of her criminal transgression, must undoubtedly count in her favour. [11] White collar crime has reached alarming proportions in this country. They are serious crimes, whose corrosive impact upon society is all too obvious. The appellant assisted her boyfriend, who occupied a position of the utmost trust in the complainant company, to implement a plan that he had devised to defraud it. It does not emerge whether all of the losses of the complainant have yet been made good. They are substantial. Furthermore, the misconduct was premeditated and persistent. She participated in the criminal venture not just to benefit herself but also to ingratiate herself with Mr Dos Santos. [12] There are however facts that distinguish this case from many other similar cases. Although the complainant lost a very large sum of money, the appellant only benefited to the tune of R90 000. In respect of that sum, once discovered, she immediately undertook to repay the money, signed an acknowledgement of indebtedness and in fact has since repaid the amount in full. From the outset, she co-operated fully with the police. Thus, even before she came to be sentenced, she had furnished the investigating officer with a statement detailing her involvement as well as the involvement of Mr Dos Santos in the fraudulent scheme. The investigating officer who testified on her behalf during the trial was very well disposed towards her. As was the complainant. That she has shown genuine remorse for what she has done is abundantly clear. [13] The appellant has obviously had to suffer in many ways. Her embarrassment is patent and she has had to live with a constant sense of guilt for subjecting those near and dear to her to the trauma that her fall from grace has caused. In compensating the complainant, the appellant divested herself of all of her ill-gotten gains. There is little likelihood that the appellant will repeat the offence or that she in future will constitute a risk to society. Moreover, she is obviously good human material and her prognosis for rehabilitation appears excellent. Because of the gravity of the offences, the request that she be kept out of jail cannot be acceded to. Plainly, a custodial sentence will be the only appropriate sentence. Although one cannot but feel deeply for her, sympathy cannot deter a court from imposing the kind of sentence dictated by justice and the interests of society. [14] It remains for me to substitute what I consider to be an appropriate penalty for that imposed by the trial court. Taking all of the factors into consideration, in my view, an appropriate sentence is imprisonment for a term of four years. In arriving at that sentence I take account of the fact that she spent some two months in custody prior to being released on bail pending her appeal. Plainly the difference between that sentence and the 7½ years imposed by the trial court is sufficiently striking as to oblige interference. [15] In the result: (a) The appeal succeeds. (b) The sentence is set aside and there is substituted for it a sentence of four years’ imprisonment. _________________ V M PONNAN JUDGE OF APPEAL APPEARANCES: COUNSEL FOR APPELLANT: M VAN WYNGAARD INSTRUCTED BY: A S STEIJN BENONI CORRESPONDENT: ROSENDORFF REITZ BARRY BLOEMFONTEIN COUNSEL FOR RESPONDENT: S M MAAT (Ms) INSTRUCTED BY: NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS JOHANNESBURG CORRESPONDENT: NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS BLOEMFONTEIN

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 12 September 2008 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. De Sousa v The State (626/2007) [2008] ZASCA 93 (12 September 2008) Media Statement Today the Supreme Court of Appeal (SCA) upheld an appeal by Maria de Sousa against a sentence of seven and half years imposed on her by the Johannesburg Regional Court, which had convicted her, pursuant to her plea of guilty, of 13 counts of fraud. In her plea explanation she stated that she had been influenced by her boyfriend, who was an executive director of the complainant company, to misrepresent to it that she was entitled to certain payments in consequence of her having sold and delivered goods to it. No such goods had in fact been sold and delivered by her to the complainant company. Cheques issued by the company were then deposited into her bank account and after the proceeds had been cleared, transferred into her boyfriend’s personal account. The total loss suffered by the complainant was slightly in excess of one million Rand. An appeal by her to the Johannesburg High Court proved unsuccessful. The SCA stated that there are facts that distinguished this case from many other similar cases. According to the SCA, although the complainant lost a very large sum of money, the appellant only benefited to the tune of R90 000. In respect of that sum, once discovered, she immediately undertook to repay the money, signed an acknowledgment of indebtedness and in fact has since repaid that amount to the complainant in full. Even before she came to be sentenced, she had furnished the investigating officer with a statement detailing her involvement as well the involvement of her boyfriend in the fraudulent scheme. Furthermore, it was evident that the investigating officer, who testified on her behalf during trial, was very well disposed towards her. The same could also be said of the complainant. It was thus abundantly clear that she has shown genuine remorse for what she has done. Moreover, according to the SCA, there is little likelihood that the appellant will repeat the offence or that she in future will constitute a risk to society. She is obviously good human material and her prognosis for rehabilitation appears excellent. In those circumstances, the sentence of seven and half years’ imprisonment was set aside and substituted in its stead was a sentence of four years’ imprisonment. --- ends ---

1197

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 32/07 REPORTABLE In the matter between: ALWYN CAROLUS Appellant and THE STATE Respondent ______________________________________________________________ BEFORE: NAVSA, VAN HEERDEN JJA and MHLANTLA AJA HEARD: 18 FEBRUARY 2008 DELIVERED: 20 MARCH 2008 SUMMARY: Indecent assault – appellant raising alibi defence – Held complainant had positively identified the crime scene and the appellant as the perpetrator of the offence and consequently that the appellant was guilty of indecent assault – sentence of 8 years’ imprisonment appropriate. NEUTRAL CITATION: This judgment may be referred to as Carolus v The State (32/07) [2008] ZASCA 14 (20 MARCH 2008) ______________________________________________________________ MHLANTLA AJA MHLANTLA AJA : [1] The appellant was convicted by the Regional Court for the Division of the Eastern Cape held in Port Elizabeth, on a charge of indecent assault involving an eight year old boy. He was sentenced to a period of eight years’ imprisonment. An appeal against both conviction and sentence was dismissed by the Grahamstown High Court (Froneman J, Schoeman J concurring) which, however, granted him leave to pursue the current appeal. [2] It is unchallenged that the complainant was indecently assaulted. The issue in this appeal is whether the state succeeded in proving the identity of the man who indecently assaulted him. Important in this regard, is the question of whether the State correctly established the place where the incident occurred. In respect of sentence the issue is whether such sentence is excessive and induces a sense of shock. [3] The incident is alleged to have occurred on 11 December 1997. The trial only commenced some four years and three months later, in March 2002. The appellant was convicted and sentenced on 28 September 2004. The appeal in the court below was finalised in February 2006, whilst this appeal was heard on 18 February 2008. I will in due course deal with these delays in greater detail. [4] It is prudent at this stage to briefly set out the facts and circumstances which led to the conviction of the appellant. [5] At his trial, the appellant pleaded not guilty and denied all the allegations against him. Five witnesses testified on behalf of the state. These were the complainant (hereinafter referred to as Azaar), his mother, Mrs Imtinaan Daniels, Mr Flippie Kiewiets, who is a police officer and Azaar’s neighbour, Inspector Jerome Botha, the arresting police officer, and finally Dr Theron, a medical practitioner, who at the relevant time performed the duties of a district surgeon. The appellant testified and called a witness, his housemate, Mr Marvin Matthee. [6] The evidence adduced on behalf of the state was as follows. According to Azaar, the incident occurred between 14h00 and 15h00. He was on his way to visit his aunt, after having been sent there by his mother, when the appellant took hold of him and dragged him into the appellant’s house. Azaar did not know the address of the house but described it in some detail. He stated that the colour of the exterior walls was green and the front door was brown. There was an intercom next to the front door and there were two large trees in front of the house. The previous owners had used the house as a tuck shop which he patronised and had also often visited to play with the children who stayed there. The backyard of that house is across the street and is clearly visible from the front of Azaar’s home. Earlier that day, Azaar had seen the appellant on the back stoep of that house consuming alcoholic beverages with his friends. Azaar further stated that a church was subsequently built next to that house and he drew a plan depicting the location of the appellant’s house in relation to his own home. [7] Azaar had been forced inside the appellant’s house, where the latter pulled down his own trousers as well as Azaar’s. He thereafter indecently assaulted Azaar by penetrating his anus with his penis whilst they were on the sofa. Azaar subsequently managed to flee from the house through an open window whilst the appellant was in another room. [8] Azaar ran home. Mr Kiewiets testified that he saw Azaar running down the street crying. Azaar was visibly distressed and immediately made a brief report to his mother about his experience. He took his mother and Mr Kiewiets to the house where the incident had occurred. Mrs Daniels and Mr Kiewiets knocked on the door but no-one responded. That night Azaar pointed out the house to Inspector Botha, the arresting officer. He was thereafter taken to the hospital where he was examined by Dr Theron. He noted some fresh tears in Azaar’s anus which according to him were consistent with recent penetration. Dr Theron testified that Azaar told him that he had been sodomised that afternoon by a man known to him. [9] The appellant was subsequently arrested at his house by Inspector Botha shortly after midnight on 12 December 1997 upon the description provided by Azaar. The description included not only the location of the crime scene, but also the physical appearance and type of clothing worn by the assailant. According to Inspector Botha, Azaar had informed him that the assailant was balding, dark in complexion and had a ‘beard’ on his upper lip, clearly meaning a moustache. Furthermore, that he wore a green tracksuit pant and a white T-shirt. It must be noted that Inspector Botha in his statement indicated that Azaar had reported to him that the appellant wore a grey top. Azaar denied this. Inspector Botha arranged that Azaar be brought to the police station to identify the suspect. Azaar spontaneously identified the appellant as his assailant by his facial features and clothing before Inspector Botha could ask him. [10] I turn to deal with the evidence adduced on behalf of the appellant. The appellant denied committing the offence. He raised an alibi defence. According to him, he and his wife were at the time estranged and she was living at her parental home in Selsoniville. On the day in question he left his house at about 13h00 to fetch his family. On his way there he met Mr Marvin Matthee (Marvin) who, as stated earlier, was his housemate and who is related to his wife. He drank some beers with Marvin and someone called Shobaine whilst waiting for his wife. He eventually met his wife who, however, declined to go with him because it was too cold for the baby. He was on his way to his mother’s house when he met someone called Boetie at the taxi rank. He shared a bottle of beer with Boetie whilst waiting for a taxi. He spent some time with his mother. He also visited a friend’s home where he watched soccer on TV. He returned home very late that night and was arrested upon his arrival. He was adamant that Azaar was mistaken about his identity. He suggested that someone he knew as Raymond, who resided in the same street as he and who also fitted the description given by Azaar could be the perpetrator. [11] Marvin’s testimony more or less mirrored the appellant’s version. It was clear when he was testifying that, at the relevant time, he was not in possession of a watch and his references to time were all estimates. He, however denied any involvement in the earlier drinking incident at the appellant’s house during the morning of 11 December. He returned to the appellant’s house at about 20h00 and there found the police who interrogated him. He realised that the police were in fact looking for the appellant. [12] Marvin did not go to the police at any time after he learnt of the reason for the appellant’s arrest to inform them that the appellant could not have committed the offence, because at the relevant time they had been elsewhere in each other’s presence. [13] The regional magistrate found Azaar, who was a single witness in respect of the events that occurred inside the house, an honest and credible witness. She was cautious in evaluating his evidence and sought corroboration elsewhere. She found that the contradictions and discrepancies between the state witnesses were not material in nature and did not detract from the veracity of Azaar’s evidence. She rejected the appellant’s version as not reasonably possibly true. The court below accepted the magistrate’s findings as correct and accordingly confirmed the conviction. [14] Counsel for the appellant contended that the state had failed to prove that the appellant was indeed the perpetrator. It was further argued that the court below erred in accepting the identification of the appellant by Azaar who contradicted himself. Counsel also contended that the identification contained various other irregularities. [15] Section 208 of the Criminal Procedure Act 51 of 1977 provides that an accused may be convicted of any offence on the single evidence of any competent witness. There is no formula to apply when it comes to the consideration of the credibility of a single witness. The trial court should weigh the evidence of the single witness and consider its merits and demerits and, having done so, should decide whether it is satisfied that the truth has been told despite the shortcomings or defects or contradictions in the evidence.1 1 S v Sauls 1981 (3) SA 172 (A) at 180E-G. See also Schwikkard and Van Der Merwe: Principles of evidence 2ed (2000) p 519 and authorities cited therein. [16] Azaar is also a child. In Director of Public Prosecutions v S,2 the court came to the conclusion that: ‘It does not follow that a court should not apply the cautionary rules at all or seek corroboration of a complainant’s evidence. In certain cases caution, in the form of corroboration, may not be necessary. In others a court may be unable to rely solely upon the evidence of a single witness. This is so whether the witness is an adult or a child.’ [17] It will be recalled that identity is the primary issue in this case. Our courts have repeatedly stated that evidence of identification must be approached by the courts with caution. In S v Mthetwa,3 the court said: “Because of the fallibility of human observation, evidence of identification is approached by the courts with some caution. It is not enough for the identifying witness to be honest: the reliability of his observation must also be tested.” [18] There can of course be no conviction unless the court is satisfied that the prosecution has proved the guilt of the accused beyond reasonable doubt. [19] Turning to the facts of this case, it is common cause that Azaar’s identification of the appellant in the police station occurred after he had been informed of the appellant’s arrest. Counsel for the state conceded, in my view properly, that not much weight can be attached to this identification. It took place under strange circumstances, where the rules relating to the conduct of an identification parade were certainly not 2 2000 (2) SA 711 (T) at 716 B-D.See also Schwikkard pp 518 and 519: “Each case must be considered on its merits and this might involve a finding on whether the evidence of the child witness concerned is such that it can for purposes of a conviction safely be relied upon.” 3 1972 (3) SA 766 (A) at 768 adhered to. The entire process took place in a police cell after Azaar had been informed about the arrest of the appellant. [20] In my view, the investigation of this case was conducted in a slovenly manner. There are clearly defined rules on how to conduct identification parades. The investigating officer disregarded these rules. It is imperative that the police should strive to fulfil their duties with competence, diligence and efficiency. Failure to do so may affect the rights of the accused as well as the administration of justice. [21] That, however, was not the primary issue. The crucial elements were, in my view, whether Azaar pointed out the scene of the crime and the perpetrator. [22] Counsel for the appellant submitted that Azaar was confused and that no reliance can be placed on his testimony. This submission cannot, in my view, prevail. It is evident that, despite being traumatised, Azaar was not confused about the location of the house which he pointed out to his mother and to the police, nor was he equivocal about the identity of the perpetrator. His description of the house cannot be faulted as it, in fact, fits in with the accused’s version. Azaar even described the type of furniture which was in the lounge where the crime was committed. Mr Kiewiets and Mrs Daniels confirmed the description of the house as pointed out to them by Azaar immediately after the incident. This description was confirmed as correct by the appellant who also conceded that the house on the sketch plan drawn by Azaar and exhibited in court was his house. Azaar, it will be recalled, had visited that house repeatedly in the past. [23] In so far as the identity of the perpetrator is concerned, there can be no doubt that the description of the appellant and of his clothing must have been given by Azaar prior to the appellant’s arrest as he otherwise could not have been a suspect. Furthermore, how would Mrs Daniels, Mr Kiewiets and the police have known about his identity. It is common cause that Marvin had earlier encountered the police at the appellant’s house, which was locked. The police asked him if he lived there and he replied in the affirmative. They could have arrested Marvin if they had no description of the actual perpetrator. It is quite evident that Marvin did not fit that description. Even Marvin testified that he realised that the police were looking for the appellant when they met him. [24] Azaar’s description of the perpetrator fits in with the appellant’s appearance. He is balding, dark in complexion and has a moustache, although Azaar referred to it as a “beard”. He wore a green tracksuit pant and a white T-shirt. It is common cause that the white T-shirt was underneath a grey top when the appellant was arrested. [25] In my view it would be a remarkable co-incidence if Azaar was mistaken about the identity of the appellant. The latter himself testified that he was the only person who was in possession of the keys to the house. Marvin was unable to enter the house because it had been locked and the appellant was the only person who controlled entry into the house. [26] Counsel for the appellant argued that the fact that Azaar did not notice the appellant’s skin condition ─ the appellant suffered from psoriasis ─ was indicative of the fact that the appellant could not have been the perpetrator. [27] This argument, in my view, is without merit and is rejected. Firstly, the doctor’s medical report which was submitted on behalf of the appellant was made several years after the incident. The extent of this condition in December 1997 was not established. Second Marvin testified that the appellant only periodically suffered from this sickness. Be that as it may, it must be borne in mind that this was a fleeting incident. The perpetrator was wearing his shirt and had his trousers up to his knees. Azaar was traumatised. He was himself busy dressing and also seeking an opportunity to escape from that house. In my view the conditions were not conducive to minutely observe the appellant’s body. [28] The alibi defence on behalf of the appellant was not satisfactory. Marvin was not convincing and was selective in his recall of events. The appellant’s version appears to have been retold by Marvin, whose estimate of times was clearly expedient. [29] More importantly the alibi defence was never put to Azaar or to his mother by the appellant’s legal representative. Significantly, none of the other witnesses refered to in para [10] above presented themselves to the police to protest the appellant’s innocence as one would have expected them to, nor did they testify in court. [30] It is equally strange that the existence of Raymond was never brought to the attention of the police. The appellant apparently heard about Raymond’s existence shortly after his release on bail on 24 December 1997; yet the police were never told about this. Neither, apparently, was the appellant’s legal representative informed of Raymond’s existence which came up for the first time when the appellant testified. The similarity between the appellant and Raymond was never put to Azaar or any other state witness for comment. In my view the appellant would certainly have conveyed this crucial information to the police if Raymond really existed. [31] I am satisfied that the magistrate, as found by the court below, had properly assessed the evidence. She correctly found that the contradictions referred to were not material and did not render the veracity of the state’s version suspect. She was well aware of the dangers inherent in the evidence of Azaar as well as the need to exercise caution. She looked for safeguards as guarantees against mistaken identification and properly assessed all the evidence placed before her. Accordingly the appeal against conviction must fail. [32] There are disturbing features of this case that we are constrained to address. In addition to the flagrant disregard of the rules relating to the identification of suspects, no crime kits were available at the hospital to enable Dr Theron to take a sample for DNA analysis. It is imperative in sexual assault cases, especially those involving children, that DNA tests be conducted. Such tests cannot be performed if crime kits are not provided. The failure to provide such kits will no doubt impact negatively on our criminal justice system. Fortunately in this matter such negative outcome has been avoided by the brave and satisfactory evidence of Azaar as corroborated by other witnesses. [33] The most disconcerting aspect relates to the delays in the commencement and finalisation of this matter indicated above. Counsel for the state was unable to furnish any explanation. She invited comment by the court in this regard to ensure that law enforcement agencies and persons involved in the administration of justice act appropriately. As I have indicated earlier, the trial commenced some four years and three months after the commission of the offence. Azaar was by then 13 years old and was called upon to recall events that had occurred in 1997. Further it has taken more than ten years to finalise this case. Fortunately the appellant has been out on bail save for a period of three months after his conviction. This case has, however, been hanging over his head for a very long period. [34] There is no ostensible reason for the delays. In certain instances the matter was postponed at the request of the state or the defence. Be that as it may, this state of affairs is unacceptable and is cause for grave concern. In my view an investigation must be conducted by the relevant authorities to establish the root cause of these delays and to determine how a situation of this nature can be avoided in future. It is hoped that these shortcomings will receive their prompt and proper attention. To that end we intend directing the Registrar of this court to serve a copy of this judgment on the Minister of Justice and Constitutional Development, the Minister of Police and also on the National Director of Public Prosecutions for their attention. [35] I turn now to consider the appeal against sentence. Counsel for the appellant submitted that the magistrate had failed to take into account all mitigating circumstances and in the result imposed a sentence that was excessive. In this regard counsel submitted that the appellant is a first offender, a school teacher and sole provider for his family; that he has already been punished as he was dismissed as a result of the conviction; that he has suffered a considerable amount of stress during the trial as a result of the delays caused in finalising the matter and, lastly, that Azaar has not suffered any permanent psychological injuries and has been able to continue with his studies. [36] I do not agree with these submissions. The offence of indecent assault is very serious and in this case the complainant was a young boy of eight years of age. Assaults of this nature are now defined as rape in terms of s 3 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act 32 of 2007. The prescribed sentence in respect of a rape involving a child under the age of 16 years is set out in s 51 of the Criminal Law Amendment Act 105 of 1997. The appellant can count himself fortunate that the provisions of Act 32 of 2007 do not apply in his case since the offence was committed in 1997. Assaults of the kind perpetrated against Azaar are the most invasive of assaults. This was a degrading, humiliating and traumatic experience for Azaar. In my view, the fact that the appellant is a father and a school teacher can be regarded as an aggravating factor. The community expects people like the appellant to protect the children. [37] The appellant is not the only person to have been affected by these delays. Azaar and his family also had to wait for a period of more than ten years for the final outcome of this case. The court recognises that the trial should have been conducted in an expeditious manner. Counsel for the appellant referred us to the decision of S v Stephen 1994 (2) SACR 163 (W) where the accused had been in custody for six months awaiting trial and the court held that a period of imprisonment whilst awaiting trial was the equivalent of a sentence of twice the length. In my view the facts of that case can be distinguished from the facts in this appeal because the appellant has been out on bail pending the finalisation of the matter throughout these delays, save for a period of three months after his conviction. [38] In my view, the magistrate took all the relevant factors into account when considering sentence. The sentence imposed is commensurate with the seriousness of the crime, the circumstances of the appellant, as well as the interests of society. In the result there is no basis for this court to interfere. It follows therefore that the appeal against sentence also fails. [39] The Registrar of this court is directed to serve copies of this judgment on the Minister of Justice and Constitutional Development, the Minister of Police and on the National Director of Public Prosecutions. [40] In the result the following order is made: (a) The appeal against conviction and sentence is dismissed. _______________________ N Z MHLANTLA ACTING JUDGE OF APPEAL CONCUR: ) NAVSA JA ) VAN HEERDEN JA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL ALWYN CAROLUS v THE STATE From: The Registrar, Supreme Court of Appeal Date: 20 March 2008 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. The Supreme Court of appeal today dismissed an appeal by Mr Alwyn Carolus (the appellant) against his conviction on a charge of indecent assault and sentence of eight years’ imprisonment in the Regional Court, Port Elizabeth, confirmed on appeal by the Grahamstown High Court (Froneman J, Schoeman J concurring). This court found that the magistrate had properly assessed all the evidence placed before her and correctly rejected the appellant’s alibi defence. This court held that the complainant, who had been indecently assaulted on 12 December 1997, had positively identified the crime scene and also the appellant as the perpetrator of the offence. The court further held that the assault perpetrated against the complainant has been the most intrusive in nature and that the sentence imposed was appropriate. The appeal against conviction and sentence was accordingly dismissed. The court voiced its disapproval about the absence of the crime kit at the hospital which resulted in a DNA test not being performed and stated that this will bring the criminal justice system into disrepute. The court, in particular, was concerned about the delays in respect of the trial, which commenced some four years and three months after the commission of the offence and voiced its strong disapproval in this regard. The Registrar of this court was directed to serve a copy of this judgment on the Minister of Justice and Constitutional Development, the Minister of Police and on the National Director of Public Prosecutions.

3164

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable CASE NO 227/2006 In the matter between NOMTHANDAZO CHAGI & OTHERS Appellants and SINGISI FOREST PRODUCTS (PTY) LTD Respondent Coram: Harms ADP, Lewis, Van Heerden, Jafta JJA and Musi AJA Heard: 9 MAY 2007 Delivered: 29 MAY 2007 Summary: Act 62 of 1997 – land – meaning thereof – s 9 applies only to evictions from the registered piece of land as a whole. Neutral citation: This judgment may be referred to as Chagi v Singisi Forest Products [2007] SCA 63 (RSA) ___________________________________________________________ JAFTA JA [1] The central issue in this matter is whether the employer’s relocation of its workers from one set of houses to another on the same piece of land constitutes an eviction as contemplated in the Extension of Security of Tenure Act 62 of 1997. Claiming to be occupiers of land as defined in the Act, the appellants instituted an application in the magistrate’s court of Harding for an interdict, restraining the respondent from relocating them from Kynoch Village to Weza Sawmill Village on the same registered land unit in Singisi Forest, Harding without complying with the requirements of the Act. They also sought an order interdicting the respondent from deducting R648 per month from their wages as rent for the houses they presently occupy. The magistrate dismissed the application with costs. Their appeal to the Land Claims Court was also dismissed with costs. This appeal comes before us with leave granted by the court below. [2] The facts are largely not in dispute. The appellants are employees of the respondent which conducts business in the forestry and sawmilling industry, on a piece of land described as Lot St Mary’s B No 5043ES Singisi Forest, in the district of Harding, KwaZulu-Natal. The appellants were previously employed by the South African Forestry Company Limited (SAFCOL) which sold its business, as a going concern, to the respondent in August 2001. As required by s 197 of the Labour Relations Act 66 of 1995, the appellants’ employment contracts were transferred from SAFCOL to the respondent simultaneously with the business. The section provides for an automatic transfer of rights and obligations between the seller and each employee to the purchaser, on the same terms and conditions. In essence the purchaser replaces the seller as the employer without the need to conclude new employment contracts (National Education Health and Allied Workers Union v University of Cape Town 2003 (3) SA 1 (CC)). However, the workers may decide to terminate their employment or enter into new agreements with the purchaser. [3] In this matter the appellants accepted transfer of their employment agreements by concluding new agreements incorporating the terms and conditions which applied to their employment with SAFCOL. SAFCOL’s conditions of employment provided, inter alia, that ‘[h]ousing on a tenancy basis as approved by the Chief Executive shall be arranged where necessary at the discretion of the Company’. Consistently with this term the parties included the following clause in their agreement: ‘6.3 Depending on your position, the Company may provide you with housing or accommodation for which a reasonable market-related rental will be charged (presently 2.5% of pensionable remuneration for married quarters and 1% of pensionable remuneration for single quarters). This rental may be reviewed from time to time. You will pay a fixed subsidised amount per electricity unit for electricity usage, and this amount will be adjusted when necessary.’ [4] Before the respondent became the employer, SAFCOL had separate accommodation for the salary earning and the wage earning employees. The rent fixed at 2.5 per cent and 1 per cent of pensionable wages applied to the married and single wage-earning employees such as the appellants. However, at some point there were vacant houses at Kynoch Village where the salary-earning employees were accommodated. Fearing that they would be vandalised, SAFCOL permitted the appellants to occupy them at the rental rate applicable to wage-earning employees. This was a temporary arrangement between the employer and the employees. But the arrangement continued even after the takeover of the business by the respondent. Upon becoming the employer, the respondent excused all wage-earning employees from paying rent. [5] The salary-earning employees were required to pay a market- related rent which amounted to R648 per month as at the time the present dispute arose, whereas the appellants were paying nothing for the same accommodation. This caused discontent among the salary-earning employees. The other wage-earning employees were also dissatisfied with the fact that the appellants continued to enjoy accommodation to which they had no access. In order to resolve the conflict the respondent asked the appellants to vacate the houses they are occupying and take occupation of houses earmarked for wage-earning employees at Weza Sawmill Village, situated on the same piece of land. The appellants declined to vacate. As an alternative solution, the respondent proposed that the appellants pay rent in the sum of R648 like the other employees occupying the same type of houses. Once again the appellants refused. Instead they proposed to pay rent fixed at R140 per month. [6] When their counter-offer was rejected and the amounts of R648 were deducted from their wages, as already mentioned, they instituted an application in the magistrate’s court for an interdict restraining the respondent from deducting the sum of R648 from their wages, and relocating them to the new houses. The respondent opposed this and brought a counter-application for an order declaring that the proposed relocation did not constitute an eviction as envisaged in the Act. It argued that the Act does not apply to the case. As stated above, the magistrate dismissed their application and granted a declarator in favour of the respondent. Since the respondent had given an undertaking to the effect that deductions would no longer be made from their wages, the magistrate apparently saw it unnecessary to deal with that part of the case. The approach by the magistrate was, in my view, correct because the need for an interdict had fallen away. [7] In refusing to vacate the appellants do not claim any legal entitlement justifying their continued occupation of the houses in question. Indeed their contracts of employment do not entitle them to occupy those particular houses. Their occupation was based on the consent given by SAFCOL which the parties on both sides understood to be a temporary arrangement. The respondent, as SAFCOL’s successor, was entitled to withdraw such consent and the appellants do not argue otherwise. But they contend that since their occupation was based on the owner’s consent, the source of their right to reside on the land is s 6 of the Act and this right can only be terminated and their eviction authorised in terms of the relevant sections of the Act. Accordingly, so they argue, the respondent can only evict them upon compliance with the requirements of s 9 of the Act. This argument is based on the assumption that the respondent’s demand for them to vacate constitutes an eviction as contemplated in the Act. [8] The procedural safeguards provided for in s 9 are available only to occupiers who are evicted from land occupied with consent of the owner or a person in charge or with another right in law to reside on the land. In other words the Act protects lawful occupiers of land belonging to another person. But before s 9 can be invoked there must be a termination of the right of residence as envisaged in s 8 of the Act. Although the appellants have not shown that such termination has taken place in this matter, I shall assume in their favour that the respondent’s withdrawal of the consent constitutes the requisite termination. [9] The question that arises for consideration is whether the proposed relocation amounts to an eviction as contemplated in the Act. The answer to this question lies in the true meaning of the word ‘land’ as used in the definition of ‘evict’. In terms of s 1 of the Act, ‘“evict” means to deprive a person against his or her will of residence on land or the use of land or the use of water which is linked to a right of residence in terms of this Act, and “eviction” has a corresponding meaning’. The definition makes it clear that the object of the right of residence is land and not a dwelling house. [10] Section 6 in turn confers upon occupiers such as the present appellants the right to reside on land that belongs to another person. It provides: ‘(1) Subject to the provisions of this Act, an occupier shall have the right to reside on and use the land on which he or she resided and which he or she used on or after 4 February 1997, and to have access to such services as had been agreed upon with the owner or person in charge, whether expressly or tacitly. (2) Without prejudice to the generality of the provisions of section 5 and subsection (1), and balanced with the rights of the owner or person in charge, an occupier shall have the right– (a) to security of tenure; (b) to receive bona fide visitors at reasonable times and for reasonable periods: Provided that– (i) the owner or person in charge may impose reasonable conditions that are normally applicable to visitors entering such land in order to safeguard life or property or to prevent the undue disruption of work on the land; and (ii) the occupier shall be liable for any act, omission or conduct of any of his or her visitors causing damage to others while such a visitor is on the land if the occupier, by taking reasonable steps, could have prevented such damage; (c) to receive postal or other communication; (d) to family life in accordance with the culture of that family: Provided that this right shall not apply in respect of single sex accommodation provided in hostels erected before 4 February 1997; (dA) to bury a deceased member of his or her family who, at the time of that person’s death, was residing on the land on which the occupier is residing, in accordance with their religion or cultural belief, if an established practice in respect of the land exists; (e) not to be denied or deprived of access to water; and (f) not to be denied or deprived of access to educational or health services. (3) An occupier may not- (a) intentionally and unlawfully harm any other person occupying the land; (b) intentionally and unlawfully cause material damage to the property of the owner or person in charge; (c) engage in conduct which threatens or intimidates others who lawfully occupy the land or other land in the vicinity; or (d) enable or assist unauthorised persons to establish new dwellings on the land in question. (4) Any person shall have the right to visit and maintain his or her family graves on land which belongs to another person, subject to any reasonable condition imposed by the owner or person in charge of such land in order to safeguard life or property or to prevent the undue disruption of work on the land. (5) The family members of an occupier contemplated in section 8(4) of this Act shall on his or her death have a right to bury that occupier on the land on which he or she was residing at the time of his or her death, in accordance with their religion or cultural belief, subject to any reasonable conditions which are not more onerous than those prescribed and that may be imposed by the owner or person in charge.’ [11] Section 9 restricts the landowner’s authority to evict persons who occupy its land in terms of s 6. It provides that such occupiers can only be evicted in terms of an order issued under the Act by a court of law. But what does ‘land’ mean in the present context? I now turn to this question. [12] The appellants’ counsel argued that ‘land’, as contemplated in the definition of eviction and also in s 6(1), refers to the particular piece of land on which the house occupied by the occupier has been erected and not the entire registered piece of land. The difficulty with this particular construction is that it is incompatible with the exercise of other rights conferred on the occupier by s 6. On this interpretation, for example, the occupier would be required to bury a deceased member of his or her family on the particular piece of land on which the dwelling house is situated. Faced with this problem, the appellants’ counsel argued that in subsection (1) the word ‘land’ was used in a context different to the other subsections. He submitted that in the other subsections it refers to the entire registered land unit whereas, in subsection (1), it refers to a particular piece of land within the registered unit. [13] It is trite that a word repeatedly used in a statute must generally carry the same meaning throughout the statute unless it is clear from its language that such word is used in different contexts, warranting that different meanings be attached to it. In the latter event, a different meaning which is consistent with the context would be given to the word. But before such meaning can be attributed to it, it must be clear from the language that the lawmaker had intended a different meaning, especially where the same word is repeated in one section. In Minister of Interior v Machadodorp Investments 1957 (2) SA 395 (A) Steyn JA said (at 404D- E): ‘Where the Legislature uses the same word, in this case the word “race”, in the same enactment, it may reasonably be supposed that out of a proper concern for the intelligibility of its language, it would intend the word to be understood, where no clear indication is given, in the same sense throughout the enactment. This applies with greater force when the same word is repeated in the same sentence.’ [14] The appellants’ counsel argued that in this matter two factors indicate that the lawmaker intended ‘land’ to have different meanings. The first is the reference to ‘homes’ in the preamble to the Act, the relevant part of which reads: ‘WHEREAS many South Africans do not have secure tenure of their homes and the land which they use and are therefore vulnerable to unfair eviction’. Secondly, he submitted that, if land is taken to mean the registered unit, the right of occupiers who are relocated from one building to another on the same unit, would not be protected. This, he argued, could not have been intended by the lawmaker. [15] I do not agree that these factors manifestly show the intention contended for by the appellants. If the lawmaker had intended to protect occupiers from being forced to vacate their homes, it could have easily said so as it in fact did in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998. This latter Act forms part of the cluster of statutes to which the present Act belongs. In that statute the definition of ‘evict’ includes the forced deprivation of occupation of a building or structure, or the land on which such building or structure is situated. [16] Returning to the language of s 6, it must be read in its entirety in order to determine whether or not the word ‘land’ was used in different contexts in different subsections thereof. A careful reading of the section reveals that the word was used in one context only. So, for example, while subsection (1) confers on the occupier the right to reside on land, subsection (2) gives him or her, in subparagraph (b)(i), the right to receive visitors onto the same land provided they comply with reasonable conditions ‘normally applicable to visitors entering such land in order to safeguard life or property or to prevent the undue disruption of work on the land’. That the two subsections refer to the same piece of land as a unit is, in my view, indisputable. The same applies to the other rights in respect of ‘land’ conferred on the occupier by the remaining paragraphs of subsection 6(2). [17] Section 6 must be restrictively interpreted because it encroaches upon the landowner’s right of ownership. Statutes such as the present must be construed, if possible, in a manner that least interferes with existing rights. The interference must be limited to the extent necessary and no further. In Dadoo Ltd v Krugersdorp Municipality 1920 AD 530 Innes CJ said (at 552): ‘It is a wholesome rule of our law which requires a strict construction to be placed upon statutory provisions which interfere with elementary rights. And it should be applied not only in interpreting a doubtful phrase, but in ascertaining the intent of the law as a whole.’ [18] Furthermore, s 6 places a limitation on the landowner’s right of ownership. This right is guaranteed by s 25 of the Constitution and as a result such limitation is permissible only to the extent that it is ‘reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom’. In construing the present Act, we are of course obliged to promote the spirit, purport and the objects of the Bill of Rights of which s 25 forms an integral part (s 39(2) of the Constitution). In Investigating Directorate: Serious Offences v Hyundai Motor Distributors (Pty) Ltd : In re Hyundai Motor Distributors (Pty) Ltd v Smit NO 2001 (1) SA 545 (CC), the Constitutional Court described the interpretive role of s 39(2) in the following terms (para 21): ‘This means that all statutes must be interpreted through the prism of the Bill of Rights. All law-making authority must be exercised in accordance with the Constitution. The Constitution is located in a history which involves a transition from a society based on division, injustice and exclusion from the democratic process to one which respects the dignity of all citizens, and includes all in the process of governance. As such, the process of interpreting the Constitution must recognise the context in which we find ourselves and the Constitution’s goal of a society based on democratic values, social justice and fundamental human rights. This spirit of transition and transformation characterises the constitutional enterprise as a whole.’ See also Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC) in paras 88-92. [19] Consistently with the protection of the right of ownership, the word ‘land’ as used in s 6 and in the definition of eviction means the registered unit as a whole. This interpretation does not subtract anything from the occupier’s right of residence on land as envisaged in s 6. In preferring this particular interpretation, I am fortified by the decision of this court in Dlamini v Joosten 2006 (3) SA 342 (SCA). There Cachalia AJA said (at para 14): ‘The contention that the meaning of words in a statute may vary, depending on the facts of a particular case, has no legal foundation. The word “land” is not defined in the Act. But it is apparent that in the context within which it is used it can refer only to land that is registered in the name of the owner. This is because the Act regulates the relationship between occupiers of land and owners of the same land.’ The learned judge continued (at para 16): ‘The burial right in s 6(2)(dA) of the Act is an incidence of the right of residence contained in s 6(1), which creates a real right in land. Such a right is in principle registrable in a Deeds Registry because it constitutes a “burden on the land” by reducing the owner’s right of ownership of the land and binds successors in title. The burial right is in the nature of a personal servitude which the occupier has over the property on which he possesses a real right of residence at death of a family member who at the time of death was residing on the land. These rights are claimable against the owners of registered land only. And the only objective determination of the extent of the land which has been registered by an owner is by reference to its cadastral description.’ [20] It follows that the court below erred in making the finding that ‘land’ as used in s 6(1) means the actual piece of land used by the occupier and not the entire registered land unit. The proposed relocation of the appellants to Weza Sawmill Village does not constitute an eviction as contemplated in the Act and the respondent is not obliged to comply with its requirements before effecting the relocation. [21] In the result the appeal is dismissed with costs. ____________________ C N JAFTA JUDGE OF APPEAL CONCUR ) HARMS ADP ) LEWIS JA ) VAN HEERDEN JA ) MUSI AJA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 May 2007 Status: Immediate NOMTHANDAZO CHAGI & OTHERS v SINGISI FOREST PRODUCTS Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal Today, the Supreme Court of Appeal (the SCA) has delivered judgment confirming the order issued by the Land Claims Court which dismissed an appeal brought by the appellants against a judgment of the magistrate at Harding, KwaZulu-Natal. The appellants had approached the magistrate’s court for an interdict restraining the respondent, their employer, from relocating them from one set of houses to another within the same registered land unit. They had claimed that the employer was bound to comply with the requirements of s 9 of the Extension of Security of Tenure Act 62 of 1997, before it could relocate them. The section requires, inter alia, that occupiers of land be given a two months’ notice to the effect that the landowner would apply to court for an eviction order and that a report by a probation officer be compiled, showing whether there was suitable alternative accommodation available for the evicted occupiers. The magistrate had ruled that since the appellants were being moved within one piece of land, the provisions of s 9 did not apply to their case. The SCA agreed that indeed the section does not apply and dismissed the appeal.

465

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 20815/2014 In the matter between: NOVA PROPERTY GROUP HOLDINGS LTD FIRST APPELLANT FRONTIER ASSET MANAGEMENT & INVESTMENTS SECOND APPELLANT CENTRO PROPERTY GROUP (PTY) LTD THIRD RESPONDENT and JULIUS PETER COBBETT FIRST RESPONDENT MONEYWEB (PTY) LTD SECOND RESPONDENT and MANDG CENTRE FOR INVESTIGATIVE JOURNALISM NPC AMICUS CURIAE Neutral citation: Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 (12 May 2016) Coram: Maya AP, Majiedt, Mbha JJA, Plasket and Kathree-Setiloane AJJA Heard: 1 March 2016 Delivered: 12 May 2016 Summary: Appealability – interlocutory application – appealable under s 17(1) of the Superior Courts Act 10 of 2013. Company law – interpretation of s 26(2) of the Companies Act 71 of 2008 – provides an unqualified right of access to a company‟s securities register – person‟s motive for access not relevant – right of access not subject to the provisions of the Promotion of Access to Information Act 2 of 2000 (PAIA). Rule 35 (14) – appellants failed to demonstrate that the documents sought are relevant to a reasonably anticipated issue in the main application. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Tuchten J sitting as court of first instance): The appeal is dismissed with costs including the costs of two counsel. ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Kathree-Setiloane AJA (Maya AP, Majiedt and Mbha JJA and Plasket AJA concurring): [1] This appeal arises from the attempts of Moneyweb (Pty) Ltd (Moneyweb) and Mr JP Cobbett (Cobbett) to exercise their statutory right in terms of s 26 of the Companies Act 71 of 2008 (the Companies Act) to access the securities registers of the appellants, Nova Property Group Holdings Limited (Nova), Frontier Asset Management & Investments (Pty) Limited (Frontier), and Centro Property Group (Pty) Limited (Centro). The appellants will be referred to collectively as „the Companies‟. [2] Cobbett is a financial journalist who specialises in the investigation of illegal investment schemes. Moneyweb is a publisher of business, financial and investment news. As part of its on-going investigation into, and coverage of Sharemax Group of Companies‟ controversial property syndication investment scheme (Sharemax syndication scheme), Moneyweb commissioned Cobbett to investigate the shareholding structures of the Companies, which are purportedly linked (directly or indirectly) to the Sharemax syndication scheme, and to write articles on his findings for publication by Moneyweb. [3] On 24 July 2013, Cobbett sent requests to the Companies for access to their securities registers and to make copies thereof, in terms of s 26(2) of the Companies Act. He delivered a request for access to information in the form required by the Companies Regulations, 2011, for this purpose.1 Section 26(2) entitles a person who does not hold a beneficial interest in any securities issued by a profit company, or who is not a member of a non-profit company, to inspect or copy the securities register of a profit company, or the members register of a non-profit company that has members, or the register of directors of a company, upon payment of an amount not exceeding the prescribed maximum fee for any such inspection. When Cobbett‟s requests were met with refusals, Moneyweb launched an application, in the Gauteng Division of the High Court, Pretoria (the court a quo), to compel the Companies to provide access to it for inspection and making copies of the securities registers within five days of the date of the order (the main application). [4] Almost two years after the requests were made, Moneyweb has still been unable to access the securities registers. Nor is it even close to doing so, as the Companies have not filed an answering affidavit to the main application. Instead, the Companies issued notices, in terms of rule 35(12) and rules 35(11) to (14) of the Uniform Rules of Court, in which they sought documents referred to in Moneyweb‟s founding affidavit and copies of different sets of documents from Moneyweb. Dissatisfied with Moneyweb‟s responses to their rule 35(12) and rules 35(11) to (14) notices, the Companies launched an application to compel compliance therewith (the interlocutory application). The interlocutory application reveals that the Companies ostensibly sought these documents for purposes of interrogating the „real motives‟ of Moneyweb, as they believed that Moneyweb was acting in furtherance of a „sinister agenda‟ directed against Nova and its subsidiaries, including certain members of its executive, and that Moneyweb had embarked upon a vendetta for the sole purpose of discrediting the Companies and undermining their integrity. The Companies contend that the documents sought will 1 Regulation 24 of the Companies Regulations, 2011 (Published under GN R351, GG 34239, 26 April 2011 as amended by GN R619, GG 36759, 20 August 2013 and GN R82, GG 37299, 5 February 2014) requires a person claiming a right of access to a record held by a company to make a request in writing by delivering to the company a completed request for access to information form (Form CoR24). enable them to prove that Moneyweb intends publishing articles in the media not for any journalistic motive, but rather in furtherance of the „sinister agenda‟ referred to above. They assert, in this regard, that the documents sought are relevant to the anticipated issues in the main application, as they will provide them with a defence to that application. [5] In the court a quo, Tuchten J granted the Companies‟ rule 35(12) application to compel discovery of documents referred to in Moneyweb‟s founding affidavit, but dismissed their rule 35(14) application to compel and made the following order: „1 The [appellants] are directed within 20 days of the date of this order to produce, in hardcopy format, the documents listed in paragraphs 1 to 10 of the respondents‟ notice in terms of rule 35(12) dated 15 November 2013 for their inspection and to permit them to make copies or transcriptions thereof. For the rest, the application is dismissed. The costs of this application will be costs in the cause of the main application to which these proceedings are interlocutory.‟ [6] Although the court a quo had not decided the main application, it nevertheless pronounced on the proper interpretation of s 26(2) of the Companies Act, in deciding whether to grant the interlocutory relief to the Companies. It considered two of its conflicting decisions2 on the subject, and concluded that s 26(2) did not confer an absolute right to inspection of the documents contemplated in the subsection, but that the court retained a discretion to refuse to order inspection. In arriving at this conclusion, the court below reasoned as follows: „I think that the construction advanced on behalf of [Moneyweb] gives rise both to a potential for injustice and absurdities. Counsel for [Moneyweb] submitted, in answer to questions from the bench, that even if the evidence proved that the purpose of the request was to identify the home of one of the persons whose particulars were on the register so that an assassin would know where to find and murder that person, the court was bound to order disclosure. That outcome would, I think, be unjust. Section 26(9) makes it an offence to fail to accommodate any reasonable request for access, or unreasonably to refuse access to a register. If [Moneyweb‟s] 2 Bayoglu v Manngwe Mining (Pty) Ltd 2012 JDR 1902 (GNP) and M&G Centre for Investigative Journalism NPC v CSR-E Loco Supply (Pty) Ltd case number 23477/2013 (8 November 2013). construction is correct, a respondent who reasonably refused access but was nevertheless ordered to provide access would be liable to punishment for contempt of court for a failure to comply with the order even though he would be acquitted of the criminal offence of failing to provide access created by s 26(9). That outcome would, I think, be absurd. In my view, a construction which confers a discretion on the court would more effectively promote the objects and spirit of the Constitution. The rights which the parties assert and seek to protect are . . . constitutional rights . . . rights to information on the one hand and privacy and dignity on the other. No constitutional right is absolute. In the process of determining which of the competing constitutional rights should prevail, each such right must be weighed against other relevant constitutional rights. A construction which would disable a court from weighing and giving effect to other constitutional rights would be subversive of the principle of fairness underlying the constitution.‟ The Companies appeal against paragraphs 2 and 3 of the order set out above. The appeal is with leave of the court a quo. [7] The issues in this appeal are two-fold. In view of the interlocutory nature of the order of the court a quo, the first issue that arises for determination is whether it is appealable. If found to be so, then the second issue which arises is whether the documents sought by the Companies in terms of rule 35(14) are relevant to a reasonably anticipated issue in the main application. This issue concerns the proper interpretation of s 26(2) of the Companies Act and, in particular, whether it confers an unqualified right of access to the securities register of a company contemplated in the section. Is the order appealable? [8] On the test articulated by this court in Zweni v Minister of Law and Order,3 the dismissal of an application to compel discovery, such as by the court a quo, is not appealable as it is (a) not final in effect and is open to alteration by the court below; (b) not definitive of the rights of the parties; and (c) does not have the effect of disposing of a substantial portion of the relief claimed. However, three years later in Moch v 3 Zweni v Minister of Law and Order [1992] ZASCA 197; 1993 (1) SA 523 (A) at 532J-533A. Nedtravel (Pty) Ltd t/a American Express Travel Service,4 this court held that the requirements for appealability laid down in Zweni „. . .[d]o not purport to be exhaustive or to cast the relevant principles in stone‟. Almost a decade later, in Philani-Ma-Afrika v Mailula,5 this court considered whether an execution order (which put an eviction order into operation pending an appeal) was appealable. It held the execution order to be appealable, by adapting „the general principles on the appealability of interim orders . . . to accord with the equitable and more context-sensitive standard of the interests of justice favoured by our Constitution‟.6 In so doing, it found the „interests of justice‟ to be a paramount consideration in deciding whether a judgment is appealable.7 [9] It is well established that in deciding what is in the interests of justice, each case has to be considered in light of its own facts.8 The considerations that serve the interests of justice, such as that the appeal will traverse matters of significant importance which pit the rights of privacy and dignity on the one hand, against those of access to information and freedom of expression on the other hand, certainly loom large before us. However, the most compelling, in my view, is that a consideration of the merits of the appeal will necessarily involve a resolution of the seemingly conflicting decisions in La Lucia Sands Share Block Ltd & others v Barkhan & others9 and Bayoglu10 on the one hand, and Basson v On-Point Engineers (Pty) Ltd11 and M & G Centre for Investigative Journalism NPC v CSR-E Loco Supply12 on the other. [10] Section 17(1) of the Superior Courts Act 10 of 2013 (the Superior Courts Act), 4 Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service [1996] ZASCA 2; 1996 (3) SA 1 (A) at 10E-G. 5 Philani-Ma-Afrika & others v Mailula & others [2009] ZASCA 115; 2010 (2) SA 573 (SCA). See also S v Western Areas Ltd & others [2005] ZASCA 31; 2005 (5) SA 214 (SCA) paras 25-26; Khumalo & others v Holomisa [2002] ZACC 12; 2002 (5) SA 401 (CC) para 8. 6 International Trade Administration Commission v SCAW South Africa (Pty) Ltd [2010] ZACC 6; 2012 (4) SA 618 (CC) para 53. 7 Philani-Ma-Afrika para 20. 8 Member of the Executive Council for Development Planning and Local Government, Gauteng v Democratic Party & others [1998] ZACC 9;1998 (4) SA 1157 (CC) para 32. 9 La Lucia Sands Share Block Ltd & others v Barkhan & others [2010] ZASCA 132; 2010 (6) SA 421 (SCA). 10 Footnote 2 above. 11 Basson v On-Point Engineers (Pty) Ltd & others (64107/11) [2012] ZAGPPHC 251 (7 November 2012); 2012 JDR 2126 (GNP). 12 Footnote 2 above. which provides for the circumstances in which a judge may grant leave to appeal, gives express recognition to this consideration. It provides: „(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that – (a) (i) the appeal would have a reasonable prospect of success; or (ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration; (b) the decision sought on appeal does not fall within the ambit of section 16(2)(a); and (c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties.‟ The provisions of s 17(1) of the Superior Courts Act are tailor-made for this appeal principally for two reasons. First, as already alluded to, there are at least four conflicting judgments, including that of the court a quo, on the proper interpretation of s 26(2) of the Companies Act. Second, the appeal would lead to a just and prompt resolution of the real issues between the parties for the reasons set out below. [11] Rule 35(14) provides that a party may, for purposes of pleading, require any other party to make available for inspection, within five days, a clearly specified document or tape-recording in his possession „which is relevant to a reasonably anticipated issue in the action‟, and to allow a copy or transcription to be made of it. In the context of this appeal, the Companies are required to demonstrate that the documents are relevant to a tenable ground of opposition to the main application. Since the Companies seek to compel discovery for the purpose of interrogating the „real motives‟ of Moneyweb for requesting access to their securities registers, in terms of s 26 of the Companies Act, the question of the „relevance‟ of the documents sought would be integral to the interpretation of s 26(2) of the Companies Act. It is important to bear in mind, in this respect, that although the court a quo did not decide the main application, it did pronounce on the proper interpretation of s 26(2) of the Companies Act in deciding whether to grant the interlocutory relief sought by the Companies. Before us, therefore, the parties in essence accepted that if the court construes s 26(2) of the Companies Act to confer an unqualified right of access to the securities register of a company, then Moneyweb‟s „motives‟ for requesting access to the registers would be irrelevant to the main application, and it would be entitled to an order compelling compliance with s 26(2) of the Companies Act, thereby resolving the „real issue‟ in the main application, as envisaged in s17(1)(c) of the Superior Courts Act. On this basis, therefore, Moneyweb was constrained to concede that the judgment of the court below, although not appealable under the traditional Zweni test for interlocutory applications to compel discovery, would be appealable under s 17(1) of the Superior Courts Act. Application to adduce evidence [12] Before I proceed to deal with the real issue, being the interpretation of s 26(2) of the Companies Act, I shall briefly deal with the application by the Mail & Guardian Centre for Investigative Journalism NPC (better known as amaBhungane) for leave to adduce evidence on appeal. AmaBhungane‟s application to be admitted as amicus curiae in this appeal, in terms of rule 16(4) of the rules of this court, was granted by the President of this court. AmaBhungane is affiliated to the Mail & Guardian newspaper, which is the primary publisher of its work. It is dedicated to uncovering, analyzing and reporting on information that the public has a right to know, such as evidence of corruption and abuse of power in both the public and private sectors. Timely access to the securities registers of companies, which are implicated in such matters of public interest, is essential to its task. Pursuant to this objective, amaBhungane made application, at the hearing of the appeal, for leave to adduce evidence on: (a) its experience with the Promotion of Access to Information Act 2 of 2000 (PAIA) and the significance of access to securities registers for the work of investigative journalists, and (b) the legislative history of s 26(2) of the Companies Act for the purposes of demonstrating that the present formulation of s 26(2) is intended to confer an unqualified right of access to securities registers of companies. The application was not opposed and the court granted amaBhungane leave to adduce evidence in the terms sought. Since the rules of this court do not expressly empower it to receive evidence from an amicus curiae, I deal below with the basis on which leave was granted to amaBhungane to adduce evidence on appeal. [13] This court is empowered under s 19(b) of the Superior Courts Act to receive further evidence. However, rule 16(8) of the rules of this court provides that „a[n] amicus curiae shall be limited to the record on appeal and may not add thereto and, unless otherwise ordered by the Court, shall not present oral argument‟. This position is, however, not invariable as the court‟s power to regulate its own process in terms of s 173 of the Constitution may be invoked to allow an amicus to adduce further evidence, if to do so would promote the interests of justice. Significantly, in this regard, in Children’s Institute v Presiding Officer of the Children’s Court, District of Krugersdorp & others,13 the Constitutional Court held as follows (in relation to rule 16A of the Uniform rules): „. . . . In public interest matters, like the present case, allowing an amicus to adduce evidence best promotes the spirit, purport and objects of the Bill of Rights. Therefore, the correct interpretation of Rule 16A must be one that allows courts to consider evidence from amici where to do so would promote the interests of justice.‟ The Constitutional Court went on to hold that an amicus must, in appropriate cases, be permitted to adduce evidence in the High Court for at least two reasons namely: (a) that rule 31 of the Constitutional Court rules which permits it to admit evidence adduced by an amicus curiae, supports the proposition that courts of first instance must also be permitted to adduce evidence, because it is generally not in the interests of justice for the Constitutional Court to sit as a court of first and final instance in relation to new issues and factual material;14 and (b) that the persuasive comment of an amicus will often draw on broader considerations, and thus be premised on facts and evidence not before the court, including statistics and research. It would make little sense to allow the presentation of bare submissions unsupported by facts.15 [14] The same rationale should, in my view, apply to this court as it would be anomalous if an amicus could introduce evidence in the High Court and Constitutional Court, but not in this court. It follows, therefore, that this court may, in appropriate circumstances, permit an amicus to adduce evidence, provided the requirements of s 19(b) of the Superior Courts Act are met, namely that: (a) a sufficient explanation is provided for why the evidence was not introduced before the court a quo; (b) there is a 13 Children’s Institute v Presiding Officer of the Children’s Court, District of Krugersdorp & others [2012] ZACC 25; 2013 (2) SA 620 (CC) para 27. 14 Children’s Institute para 30. 15 Children’s Institute para 31. prima facie likelihood that the evidence is true; and (c) the evidence is materially relevant to the outcome.16 These requirements have been met in this appeal for the following reasons: (a) AmaBhungane could not adduce the evidence in the court a quo because it was not party to those proceedings. It was, furthermore, not apparent that the court a quo would, in the interlocutory proceedings consider, let alone pronounce on the proper interpretation of s 26(2) of the Companies Act, which arises for determination in the main application. (b) The evidence which amaBhungane wishes to adduce on appeal is true and not disputed by the parties. It is first-hand evidence of amaBhungane‟s experience regarding the importance of securities registers as a reliable tool in a journalist‟s artillery. Additionally, the evidence relating to the prior versions of the Companies Amendment Bill, 2010 (the Amendment Bill) is plainly incontrovertible as these documents are official in nature. (c) The evidence of amaBhungane‟s experience with PAIA, and the significance of access to securities registers for the work of the media are plainly relevant, and is precisely the kind of evidence that the Constitutional Court has held may be introduced by an amicus curiae.17 The practical impact of a particular construction of legislation, in this case s 26(2) of the Companies Act, is a relevant question which generally would need to be assessed from the evidence. Moreover, the evidence of the evolving formulation of the Amendment Bill in the parliamentary process is an aid to interpretation and sheds light on the intention of the legislature, thus demonstrating why the construction posited by the Companies could not have been intended by the legislature. Thus, the evidence is clearly relevant. Interpretation of s 26(2) of the Companies Act [15] I now turn to the question of the proper interpretation of s 26(2) of the Companies Act and, in particular, whether it confers an unqualified right of access to the securities 16 D E van Loggerenberg et al (eds) Erasmus Superior Court Practice (November 2013 - Service Issue 43) at A1-56. See also Minister of Justice and Constitutional Development & others v Southern African Litigation Centre & others [2016] ZASCA 17 (15 March 2016) para 30. 17 Children’s Institute paras 31 and 34. register of a company. The Companies contend that s 26(2) confers a qualified right as access may be refused, on the grounds set out in PAIA and on the grounds of the „motive‟ of the requester. On the contrary, Moneyweb contends that an unqualified right is conferred on any person who meets the procedural requirements of s 26(2) of the Companies Act. AmaBhungane, in turn, contends that if access to securities registers is subject to the grounds of refusal which apply to a request under PAIA or to a refusal based on the alleged motive of the requester, then this will have a significant negative impact on investigative journalists and the public‟s right to know. [16] The role that companies play in our society and their obligations of disclosure that arise from the right of access to information in s 32 of the Constitution, is central to the interpretation of s 26(2) of the Companies Act. Both this court and the Constitutional Court have recognised that the manner in which companies operate and conduct their affairs is not a private matter. In Bernstein & others v Bester NO & others,18 the Constitutional Court made the position plain. The Court said: „The establishment of a company as a vehicle for conducting business on the basis of limited liability is not a private matter. It draws on a legal framework endorsed by the community and operates through the mobilisation of funds belonging to members of that community. Any person engaging in these activities should expect that the benefits inherent in this creature of statute will have concomitant responsibilities. These include, amongst others, the statutory obligations of proper disclosure and accountability to shareholders. It is clear that any information pertaining to participation in such a public sphere cannot rightly be held to be inhering in the person, and it cannot consequently be said that in relation to such information a reasonable expectation of privacy exist. Nor would such an expectation be recognised by society as objectively reasonable. This applies also to the auditors and debtors of the company. . . .‟ [17] This approach has been repeatedly endorsed. This passage in Bernstein was cited by this court in La Lucia Sands, in dealing with s 113 of the Companies Act 61 of 1973 (the old Companies Act), the predecessor to s 26 of the Companies Act.19 18 Bernstein & others v Bester NO & others [1996] ZACC 2; 1996 (2) SA 751 (CC) para 85. 19 La Lucia Sands para 21. Similarly, in his separate concurring judgment in S v Coetzee,20 Kentridge AJ emphasised that „those who choose to carry on their activities through the medium of an artificial legal persona must accept the burdens as well as the privileges which go with their choice.‟ Most recently, in Company Secretary of Arcelormittal South Africa & another v Vaal Environmental Justice Alliance21, this court emphasized that „citizens in democracies around the world are growing alert to the dangers of a culture of secrecy and unresponsiveness, both in respect of government and in relation to corporations‟ and that Parliament, driven by Constitutional imperatives, had rightly seen fit to cater for this in its legislation. [18] The Companies Act gives specific recognition to a culture of openness and transparency in s 7 which lists the core objectives of the Act. Section 7(b)(iii), in particular, provides that a purpose of the Act is to: „. . . [encourage] transparency and high standards of corporate governance as appropriate, given the significant role of enterprises within the social and economic life of the nation.‟ Section 26 of the Companies Act is enacted with precisely these objectives in mind. It recognizes that the establishment of a company is not purely a private matter and may impact the public in several ways. It therefore seeks to impose strong rights of access in respect of very specific but ultimately limited types of information held by companies. Section 26 must, therefore, be interpreted in accordance with this purpose. Section 26(1) confers a right of access to information in respect of various kinds of information to a person who holds a beneficial interest in any securities issued by a profit company, or who is a member of a non-profit company. Section 26(2) then confers a narrower and more specific right of access to all others persons. It provides: „A person not contemplated in subsection (1) has a right to inspect or copy the securities register of a profit company, or the members register of a non-profit company that has members, or the register of directors of a company, upon payment of an amount not exceeding the prescribed maximum fee for any such inspection.‟ 20 S v Coetzee & others [1997] ZACC 2; 1997 (3) SA 527 (CC) para 98. 21 Company Secretary of Arcelormittal South Africa & another v Vaal Environmental Justice Alliance [2014] ZASCA 184; 2015 (1) SA 515 (SCA) para 1. Interaction between s 26(2) and PAIA [19] There are two aspects of s 26 that require particular emphasis: the first concerns the interaction between s 26(2) and the provisions of PAIA and the second concerns the nature of the right conferred by s 26(2). In relation to the former, s 26 makes clear that the right conferred by s 26(2) is additional to the rights conferred by PAIA and does not need to be exercised in accordance with PAIA. In this regard, s 26(7) provides: „The rights of access to information set out in this section are in addition to, and not in substitution for, any rights a person may have to access information in terms of – (a) section 32 of the Constitution; (b) the Promotion of Access to Information Act, 2000 (Act 2 of 2000); or (c) any other public regulation.‟ Markedly, the approach of Parliament in conferring the right of access to information in s 26(2) of the Companies Act in addition to the rights conferred by PAIA is consistent with s 39(3) of the Constitution which provides that: „The Bill of Rights does not deny the existence of any other rights or freedoms that are recognised or conferred by common law, customary law or legislation, to the extent that they are consistent with the Bill.‟ [20] In respect of the process to be followed in exercising the rights, s 26(4) provides: „A person may exercise the rights set out in subsection (1) or (2), or contemplated in subsection (3)─ (a) for a reasonable period during business hours; (b) by direct request made to a company in the prescribed manner, either in person or through an attorney or other personal representative designated in writing; or (c) in accordance with the Promotion of Access to Information Act, 2000 (Act 2 of 2000).‟ (own emphasis.) What is clear from s 26(4)(c) is that procedurally PAIA is an alternative to requesting access to a company‟s share register in terms of the provisions of s 26 of the Companies Act. [21] The approach of Parliament, in this regard, was eminently sensible. PAIA is a general statute. It regulates access to innumerable types of information held by a wide range of bodies, with various different types of interests at stake. Parliament, therefore, had to lay down general rules to balance the competing interests at stake by means of threshold requirements, grounds of refusal and public interest overrides. By contrast, s 26(2) confers a specific right in respect of one type of information only − securities registers and directors registers. Parliament justifiably took the view that, in respect of this narrow category of information, it was unnecessary to build in the PAIA balances and counter balances with all the complexity and delay that might entail. Instead, it conferred an unqualified right that is capable of prompt vindication. [22] Notwithstanding this, and the clear wording of s 26(4) and s 26(7) of the Companies Act, the Companies place considerable reliance on PAIA contending that they are entitled to argue, in the main application, that the refusal of access to Moneyweb „is justified on the basis of the provisions of s 68(1) of PAIA.‟ In terms of s 68(1) of PAIA, access to a record of a company may be refused if the record: (a) contains trade secrets of the company; (b) contains financial, commercial, scientific or technical information, other than trade secrets, of the company, the disclosure of which would be likely to cause harm to the commercial or financial interests of the company; (c) contains information, the disclosure of which could reasonably be expected; will put the company at a disadvantage in contractual and other negotiations; or will prejudice the company in commercial competition. Securities registers quite clearly do not contain information of the nature contemplated in s 68(1) of PAIA, and access cannot possibly be refused by the Companies on that basis. Furthermore, the Companies contend that the right of access in s 26(2) must be qualified by, and subject to, the provisions of PAIA, and that the person requesting the information must demonstrate that the information is required for the purpose of exercising or protecting a right. It is not clear how this requirement can be imported into s 26(2) without doing violence to a right which is expressly intended by the legislature to be unqualified. Moreover, the Companies fail to explain how this reliance on PAIA can be sustained in light of the clear language of subsecs 26(4) and 26(7). Accordingly, the Companies‟ reliance on PAIA is unsustainable as it certainly does not render the documents sought in the rule 35(14) interlocutory application relevant to the main application. [23] In choosing to confer an unqualified right capable of prompt and easy vindication in s 26(2) of the Companies Act, Parliament would have been alive to the fact that the procedures of PAIA can readily be used as an instrument to frustrate and delay access to records. One of the threshold requirements for a requester to obtain access to information held by a private entity under s 50(1)(a) of PAIA is that the requester must prove that that information requested is necessary for the „exercise or protection of any rights‟. Even if this test is overcome, there is potential for a ground of refusal to be claimed by the company concerned. For instance, in terms of s 71(1) of PAIA, the private body „must‟, if the record requested might contain certain information concerning a third party, take all reasonable steps to inform the third party of the request. The private body may take up to 21 days to give this notice and the third party may take a further 21 days to make representations, before the private body decides whether to grant or refuse access to the requester. If access is granted, the third party may approach a court to prevent disclosure. If refused, the requester would have to make application to court to compel disclosure. Given the potentially hundreds of holders of securities, a decision by a company to invoke the third party procedure in PAIA will effectively put the securities registers out of the reach of the requester indefinitely, and certainly far beyond the natural life cycle of a relevant journalistic investigation. [24] The point is illustrated by President of the Republic of South Africa v M & G Media Ltd.22 Even without any proper basis for withholding access to the record, access was delayed for six years. This was also amaBhungane‟s experience in CSR-E Loco.23 The present proceedings speak for themselves – some three years later Moneyweb is 22 President of the Republic of South Africa & others v M & G Media Ltd [2014] ZASCA 124; 2015 (1) SA 92 (SCA). See also generally MEC for Roads and Public Works, Eastern Cape & another v Intertrade Two (Pty) Ltd [2006] ZASCA 33; 2006 (5) SA 1 (SCA) para 20. 23 See footnote 2 above. still nowhere near accessing the Companies‟ securities registers. This demonstrates that PAIA will not provide journalists prompt access to securities registers − for whom timely access is essential. Thus, if the PAIA limitations apply to s 26(2) requests, the inconvenience and cost of an application to court to challenge a refusal on those grounds will greatly inhibit access to securities registers. Given the significant expenses involved in the court process, it will in most cases lead to important investigations being aborted rather than an application to court being pursued.24 One wonders why subsecs 26(4)(a) and (b) were enacted if they are capable of being impliedly trumped by PAIA. [25] What remains then is to set right the unfortunate obiter dictum of this court in La Lucia Sands vis-a-vis the application of PAIA to a request for access under s 26 of the Companies Act:25 „[17] For completeness, I record that the New Companies Act 71 of 2008 has been assented to but has not yet come into operation. Section 113 of the Act has not been repeated in the new legislation. Section 26 of the new Act is entitled „„Access to company records‟‟. Section 26(3) provides that „‟any member‟‟ and “any other person‟‟ are entitled to inspect the register of members during business hours. Section 26(4) provides: “The rights of access to information set out in this section are in addition to, and not in substitution for, any rights a person may have to access information in terms of – (a) section 32 of the Constitution (b) the Promotion of Access to Information Act, 2000 (Act No. 2 of 2000; or (c) any other public regulation. [18] It appears that in future the provisions of the Promotion of Access to Information Act 2 of 2000 will have to be employed by non-members seeking access to the register of members. The rationale set out above for obtaining information contained in the register of members will probably continue to apply, notwithstanding that the request for information will now have to be made in terms of the Act. Happily, it is not an issue we need to address comprehensively or at all. Section 113 applies to the present matter.‟ (own emphasis.) This obiter dictum is regrettable, as s 26(7) of the Companies Act expressly states that the right conferred by s 26(2) is additional to the rights conferred by PAIA. There is, in addition, no requirement in s 26 of the Companies Act that a request for access to a 24 See City of Cape Town v South African National Roads Authority Limited & others [2015] ZASCA 58; 2015 (3) SA 386 (SCA) para 43. 25 La Lucia Sands paras 17-18. company‟s securities register must only be exercised in accordance with PAIA. The obiter dictum of this court in La Lucia Sands is, therefore, clearly wrong, and the Companies‟ reliance on it is simply misplaced. The nature of the right [26] The second aspect of s 26(2) of the Companies Act that requires emphasis is the nature of the right conferred by it in the context of s 26 as a whole. Unlike its predecessor, s 113 of the old Companies Act, s 26(2) expressly confers a right of access in respect of the securities registers. Section 26(5) then goes further and provides expressly, and in unqualified terms, that where a company receives a request in the prescribed form, the company „must within 14 business days comply with the request‟. There is nothing in subsecs 26(2) and 26(5) which, in any way, qualifies this right. Nor is there any reference in these sections to the reasonableness of either the request or the response. The only sub-section which mentions reasonableness is s 26(9), which creates the criminal prohibition. It provides: „It is an offence for a company to─ (a) fail to accommodate any reasonable request for access, or to unreasonably refuse access, to any record that a person has a right to inspect or copy in terms of this section or section 31; or (b) to otherwise impede, interfere with, or attempt to frustrate, the reasonable exercise by any person of the rights set out in this section or section 31.‟ A reasonable request in my view, would be one which is made in accordance with the provisions of s 26(4)(a) and (b) of the Companies Act. [27] The decision to include the reasonableness defence in s 26(9) is perfectly understandable, as the legislature was presumably anxious to avoid creating a strict liability offence, possibly because of the constitutional difficulties that this might have raised. However, what the Companies seek to do is import the s 26(9) reasonableness qualification back into s 26(2) to limit the right it confers. There is no warrant for this. If Parliament had wanted to limit the s 26(2) right, it would have done so expressly. Instead, it enacted an unqualified right in s 26(2) read with s 26(4) and introduced a reasonableness qualification only in respect of the criminal offence created by s 26(9). [28] The failure to introduce an equivalent qualification of reasonableness in s 26(2) and 26(4) makes clear that outside of the criminal offence created, there is no similar restriction. Section 26(2) clearly confers an unqualified right on members of the public and the media to obtain access to share registers. This means that the ‘motive‟ with which the person seeks access to the information concerned is irrelevant. This construction of s 26(2) is completely consistent with its legislative history, as revealed by the different versions of the Amendment Bill. The versions of the Amendment Bill prior to the adoption of the Companies Act in its amended form show a deliberate journey from a formulation of s 26(2) in which the PAIA limitations were arguably applicable, to a formulation which makes it clear that the PAIA limitations are not applicable, and that the right of access is not qualified. [29] Notably, s 113 of the old Companies Act provided an unqualified right for any person to access a company‟s share register that was subject to a court‟s discretion to refuse access. When the Minister of Trade and Industry tabled the Companies Bill, 2008, in the National Assembly there was no express access provisions for non- shareholders. The proposed subsecs 26(2) and (5) appeared to anticipate the possibility that non-shareholders might gain access by means of PAIA and that, given PAIA‟s exemptions, there might be reasonable grounds to deny access. AmaBhungane was concerned about the erosion of the unqualified right in s 113 of the old Companies Act and made submissions to the Portfolio Committee. When the Companies Act was finally enacted in 2008, it included s 26(2) which gives any person the right of access, and it introduced a peremptory element: must . . . be open to inspection’ in s 26(6). The Companies Act made it clear that this right was in addition to any rights under PAIA. [30] The Companies Act contained errors, and the Minister therefore introduced the Amendment Bill before the Act came into force. The original version of the Amendment Bill B40–2010 appeared to make the right to access subject to PAIA, by using the conjunctive „and‟. It also omitted the peremptory wording ‘must’ that had been included in the Companies Act. It stated: A person may exercise the rights set out in subsection (1) or (2), or contemplated in subsection (3)─ (a) for a reasonable period during business hours; (b) by direct request made to a company in the prescribed manner, either in person, or through an attorney or other personal representative designated in writing; and (c) in accordance with the Promotion of Access to Information Act, 2000 (Act No.2 of 2000).‟ (own emphasis.) Whilst that version appears to suggest that the s 26 right would have been qualified along the lines proposed by the Companies, after receiving public submissions (including amaBhungane‟s), the Portfolio Committee produced the revised version B40A−2010 of the Amendment Bill. In Bill B40A−2010 the conjunctive ‘and’ in subsection (4) was replaced with the disjunctive ‘or‟. The effect was to make it plain that PAIA would be an alternative mode of obtaining access to company records. In addition, the Portfolio Committee inserted a new sub-clause which made clear the peremptory nature of the obligation imposed on the company. It read: „(5) Where a company receives a request in terms of subsection (4)(b) it must within 14 business days comply with the request by providing the opportunity to inspect or copy the register concerned to the person making such request.‟ (own emphasis.) These two alterations, which made it clear that the right is unqualified, were retained in the version of the Bill that ultimately became the Amendment Act. [31] The Companies Regulations demonstrate a similar evolution. Regulation 24(2) of the Draft Companies Regulations, published for comment on 29 November 2010,26 provided that a person claiming a right of access to any record held by a company may not exercise that right until ‘[the person’s] right of access to the information has been confirmed in accordance with [PAIA]’.27 Draft Regulation 24(4) provided that a person claiming access to any record held by a company had to make a written request by delivering to the company a completed prescribed form as well as „any further documents or other material required in terms of‟ PAIA. The final regulations28 are, however, consistent with the current formulation in the Companies Act as amended by 26 Companies Regulations, GN R1664, GG 32832, 22 December 2009. 27 Clause 24(3)(b) of the draft Regulations. 28 Companies Regulations, GN R351, GG 34239, 26 April 2011. the Amendment Act in 2011. They too now use the disjunctive ‘or’ to distinguish between rights under PAIA and the additional access rights created by s 26, and they too use the peremptory form „must . . . accede to the request‟. [32] The legislative history squarely contradicts the construction of s 26(2) which is contended for by the Companies. It demonstrates a clear intention on the part of the legislature to provide that the right under s 26(2) can be exercised independently of PAIA, and that a company cannot require disclosure of the reason for the request to access the securities register of a company − as the right is unqualified. [33] Essentially, this means that the „motive‟ with which a requester seeks access to a company‟s share register is irrelevant. In La Lucia Sands this court made clear that, under s 113 of the old Companies Act, a company could not require disclosure of the reason for the request to access the shares registers. It said:29 „Section 113 of the Act does not oblige a person requesting information to provide motivation for doing so. It has been held that a person who seeks to inspect the register need not give reasons for doing so. (See Holland v Dickson (1888) 37 Ch.D. 669 at 671-672 and Labatt Brewing Co Ltd v Trilon Holdings Inc 41 O.R. (3d) 384 para 6. Meskin et al Henochberg on the Companies Act (above), with reference to Dickson, state the following: “But in any event the company cannot require the disclosure of the reason for the inspection as a condition precedent to allowing it . . .” [34] Having said that, the court in La Lucia Sands went on to hold that, under s 113 of the old Companies Act, a court had a discretion to decline to make an order requiring access where it is shown that the information is sought for some unlawful purpose. In reaching this conclusion, it relied on the decision of the English court of appeal in Pelling v Families Need Fathers Ltd,30 where its reasoning was based almost exclusively on the fact that the old English Companies Act 1985 provided that the 29 La Lucia Sands at para 10. 30 Pelling v Families Need Fathers Ltd [2002] 2 All ER 440 (CA). Registrar hearing the matter “may” make an order compelling access. The court explained it as follows:31 „On the true construction of s 356(6) the registrar had a discretion to refuse the order. In its ordinary and natural meaning the word “may” is apt to confer a discretion or power . . . The use of “may” in subsection (6) is in striking contrast to the mandatory force of “shall” in other parts of the same section, such as sub-s (3). . . . „„[w]hether the power will be exercised must depend upon the proper discretionary considerations affecting the power in the light of the facts as are found by the court.‟‟32 We agree. For those reasons we reject the absolutist construction proposed by Dr Pelling.‟ [35] Section 113(4) of the old Companies Act was in very similar terms to the old English Companies Act 1985. It provided that „in the case of any such refusal or default the court may, on application, by order compel an immediate inspection of the register‟. It is, therefore, not surprising that this court in La Lucia Sands took the same approach as the court in Pelling. However, s 26 of the Companies Act is different. Unlike s 113 of the old Companies Act, it does not contain a provision dealing specifically with an application to court to compel compliance and, in particular, contains no provision rendering the decision of the court discretionary on this basis. Parliament, which is presumed to know the law,33 chose not to enact a provision equivalent to s 113(4), and instead strengthened the access provision by making clear in s 26(2) that it conferred a „right‟ of access, without qualification and not subject to a discretionary override. [36] This means that when a company fails or refuses to provide access, that person is entitled, as of right, to an order compelling access. The question of the motive or purpose is simply irrelevant. The Companies have, therefore, failed to demonstrate that the documents sought in the rule 35(14) notice „are relevant to a reasonably anticipated issue in the main application.‟ The Companies‟ belief in relation to what they will purportedly achieve through access to those documents, does not give rise to a defence 31 Pelling para 23. 32 O’Brien v Sporting Shooters Association of Australia (Victoria) [1999] 3 VR 251; [1999] VSC 313 (20 August 1999) para 21. 33 Road Accident Fund v Monjane [2007] ZASCA 57; 2010 (3) SA 641 (SCA) para 12. to the main application as Moneyweb‟s „motive‟ for seeking access to the Companies‟ securities registers is simply irrelevant. [37] The Companies‟ construction of s 26(2) would have a negative impact on openness and transparency, and would directly undermine the work of Moneyweb, amaBhungane and other investigative journalists, as it limits the right to freedom of expression. The Constitutional Court has emphasised in Brümmer v Minister for Social Development & others34 that media have a duty to report accurately, as „[t]he consequence of inaccurate reporting would be devastating.’ This then means that the journalists must be able to have speedy access to information such as the securities registers: „Access to information is crucial to accurate reporting and thus to imparting accurate information to the public.‟35 Interference with the ability to access information impedes the freedom of the press. The right to freedom of expression is not limited to the right to speak, but includes the right to receive information and ideas.36 Preventing the press from reporting fully and accurately, does not only violate the rights of the journalist, but it also violates the rights of all the people who rely on the media to provide them with ‘information and ideas.’ [38] An unqualified right of access to a company‟s securities register is, therefore, essential for effective journalism and an informed citizenry. AmaBhungane has provided the court with examples of investigations and news reports, where access to share register information was central to its investigation. One such news report relates to a tender award by a parastatal,37 where immediate access to share registers enabled journalists to uncover an apparent conflict of interests in relation to the head of a tender committee. Investigations like this, would likely not have been possible if journalists did not have an unqualified right of access to securities registers of companies under s 26(2) of the Companies Act. 34 Brümmer v Minister for Social Development & others [2009] ZACC 21; 2009 (6) SA 323 (CC) para 63. 35 Brümmer para 63. 36 Section 16(1)(b) of the Constitution. 37 „Transnet tender boss‟s R50 billion double game‟, Mail & Guardian, 4 July 2014. [39] In a final attempt at salvaging its case, the Companies contend that an unqualified right of access to a company‟s securities register would constitute a violation of a shareholder‟s right to privacy in terms of s 14 of the Constitution, and that the rights of access to information and freedom of expression must be weighed against this right − as no right is absolute. The Companies contend that information contained in a private company‟s securities register is information of a personal nature as it will contain names and identities of individuals; their home and work addresses. In addition, they contend that depending on the nature of the company, it may also expose their business affiliations, how wealthy they are and what their political, moral and religious leanings are. The contention thus advanced is that a company‟s securities register contains information of a sensitive nature that may reveal deeply private matters about shareholders in a particular company which, in the hands of the wrong people, may be open to abuse. [40] I disagree. First, because the Companies do not challenge the constitutionality of s 26(2) of the Companies Act on the grounds of a violation of the right to privacy, and secondly, because the privacy and dignity rights of shareholders are minimally implicated in the right of access conferred by s 26(2). It is a narrow right of access that is limited to securities registers and directors registers of companies contemplated in the section. Regulation 32 (2) of the Companies Regulations provides that: „In addition to the information otherwise required, the company's securities register must also include in respect of each person to whom the company has issued securities, or to whom securities of the company have been transferred- (a) the person's─ (i) name and business, residential or postal address, as required by section 50(2)(b)(i); and (ii) the person's email address if available, unless the person has declined to provide an email address; (b) an identifying number that is unique to that person.’ Regulation 32(6), in turn, provides that: „In so far as the identity number and e-mail address of a person may be entered into a register kept under this regulation, such information may, at the instance of the company, Central Securities Depository or relevant Participant as the case may be, be regarded as confidential.‟ [41] A shareholder in a company is, therefore, only required to provide his or her name, business, residential or postal address, an e-mail address if he or she elects to do so, and an identifying number that is unique to that person. Where the shareholder‟s identity number and e-mail address are entered into a securities register, it may be regarded as confidential at the instance of the company or the shareholder. Thus, in view of the limited nature of the personal information of a shareholder that must be included in a securities register, and the regulatory safeguards aimed at ensuring confidentiality and non-disclosure of such information, there can be no room for abuse. It is against this backdrop that a potential violation of the privacy rights of shareholders and companies should be considered. [42] In conferring an unqualified „right‟ of access to a company‟s securities register in s 26(2) of the Companies Act, the legislature has chosen to prioritize the right of access to information over the privacy rights of shareholders and companies. In the absence of an express limitation of that right by the legislature, it is not for the court to limit it because of some nebulous spectre of abuse, particularly where as in this context, there are built-in safeguards against the disclosure of confidential information − and the constitutionality of the provision is not challenged. The scope of the right to privacy of shareholders must, therefore, be viewed in its proper context. In Gaertner & others v Minister of Finance & others, the Constitutional Court held:38 „Privacy, like other rights, is not absolute. As a person moves into communal relations and activities such as business and social interaction, the scope of personal space shrinks. This diminished personal space does not mean that, once people are involved in social interactions or business, they no longer have a right to privacy. What it means is that the right is attenuated, not obliterated. And the attenuation is more or less, depending on how far and into what one has strayed from the inner sanctum of the home.‟ Accordingly, the court a quo erred in its obiter finding quoted in paragraph 6 above. Prior Restraint [43] In light of the irrelevance of Moneyweb‟s „motive‟ in seeking access to the Companies‟ securities registers, the case of the Companies on appeal amounts to little 38 Gaertner & others v Minister of Finance & others [2013] ZACC 38; 2014 (1) SA 442 (CC) para 49. more than that they are deeply aggrieved about the manner in which Moneyweb has reported on them. The Companies fear that Moneyweb will use access to the securities registers for further „negative reporting‟ and this will cause them harm. The Companies are, in this respect, little different from any person or entity who is subject to negative press coverage. They are unhappy about it and wish to curtail, impede and prevent it. But, whatever other remedies are open to the Companies, these concerns cannot provide a basis for limiting Moneyweb‟s exercise of its s 26(2) statutory rights in respect of the securities registers concerned. The media cannot be precluded from accessing information because the subject of the likely reportage considers that the reportage will be unfavourable and unfair. Indeed, such a proposition is inconsistent with two well established principles laid down by this court. The first is the principle established in City of Cape Town v South African National Roads Authority Limited, that access to accurate information is critical for the right to freedom of expression, which this court expressed as follows: „The right to freedom of expression lies at the heart of democracy, and is one of a “web of mutually supporting rights” that hold up the fabric of the constitutional order. Section 32(1) of the Constitution guarantees everyone the “right of access to information held by the state”. Citizens and public interest groupings rely on this right to uncover wrongdoing on the part of public officials or for accessing information to report on matters of public importance. The Constitutional Court has noted that the media has a duty to report accurately, because the “consequences of inaccurate reporting may be devastating.” It goes without saying that to report accurately the media must have access to information. Access to information is “crucial to accurate reporting and thus to imparting information to the public.” While s 32 of the Constitution guarantees the right of persons to access relevant information, s 16 entitles them to distribute that information to others.‟39 (footnotes omitted.) [44] The approach urged by the Companies would, to my mind, preclude such accurate reporting. It would require Moneyweb to attempt to report on the shareholding of the Companies without having access to the information that definitively and accurately sets out those details. Quite apart from the potential negative effect that this 39 City of Cape Town v South African National Roads Authority Limited & others above, para 20. would have on the Companies, this would undermine the right of the public to receive accurate information via the media. There is simply no basis for this approach. [45] The second principle is that courts will only rarely make orders which amount to prior restraints on expression. This principle was established in Midi Television (Pty) Ltd t/a E-TV v DPP (WC),40where this court held: ‘In summary, a publication will be unlawful, thus susceptible to being prohibited, only if the prejudice that the publication might cause to the administration of justice is demonstrable and substantial and there is a real risk that the prejudice will occur if publication takes place. Mere conjecture or speculation that prejudice might occur will not be enough. Even then publication will not be unlawful unless a court is satisfied that the disadvantage of curtailing the free flow of information outweighs its advantage. In making that evaluation it is not only the interests of those who are associated with the publication that need to be brought to account but, more important, the interest of every person in having access to information. Applying the ordinary principles that come into play when a final interdict is sought, if a risk of that kind is clearly established, and it cannot be prevented from occurring by other means, a ban on publication that is confined in scope and in content and in duration to what is necessary to avoid the risk might be considered. Those principles would seem to me to be applicable whenever a court is asked to restrict the exercise of press freedom for the protection of the administration of justice, whether by a ban on publication or otherwise. They would also seem to me to apply, with appropriate adaptation, whenever the exercise of press freedom is sought to be restricted in protection of another right. . . .‟ [46] Although the interlocutory application does not involve the granting of an interdict against the media, the effect is much the same. The deponent to the Companies‟ founding affidavit makes plain that they are, in fact, seeking to prevent Moneyweb from reporting on these issues at all. They seek to do this by precluding Moneyweb and Cobbett from ever having access to their securities registers for purposes of their reporting. In other words, rather than interdict the Moneyweb publication, the Companies seek to stop it at the investigation stage. There is simply no basis for such 40 Midi Television (Pty) Ltd t/a E-TV v Director of Public Prosecutions (Western Cape) [2007] ZASCA 56; 2007 (5) SA 540 (SCA) paras 19-20. an order. If publication occurs and if it is unlawful, the Companies will be entitled to sue for damages, which will „usually [be] capable of vindicating the right to reputation.‟41 The Companies cannot, however, in advance enlist the assistance of the court to prevent Moneyweb from engaging in the investigations concerned as this will undoubtedly amount to prior restraint. [47] To sum up, s 26(2) of the Companies Act provides an unqualified right of access to securities registers. If Parliament is of the view that the right should be qualified in some way, because of concerns relating to abuse of the right of access, it can legislate accordingly – but it has chosen not to do so. For instance, under the old English Companies Act, 1985, anyone could obtain access to a company‟s share register. However, there was evidence that some people were abusing this right and seeking information in order to harass shareholders. So, since 2006, these rights have been qualified in the English Companies Act, 2006, as the English Parliament sought to provide some protection for members against improper requests by enabling the company to obtain a court order preventing access to the registers if the requester fails the proper purpose test. Accordingly, in terms of s 116(4)(c) and (d) of the English Companies Act, 2006, a person who requests access to the register of members is required to submit a formal request setting out certain information that includes, inter alia, the purpose for which the information is to be used and whether the information will be disclosed to another person. Once the request has been submitted to the company, it must, within five working days, either comply with the request or apply to court for an order that it need not comply with the request.42 The court may grant an order if it is satisfied that the inspection or copy is not sought for a „proper purpose.‟43 Notably, our Parliament has chosen not to follow this route. [48] As things stand, Moneyweb‟s „motive‟ for seeking access to the Companies‟ securities registers is simply irrelevant. They have, therefore, failed to demonstrate that 41 Midi Television para 20. 42 Section 117(1)(a) and (b). 43 In re Burry & Knight Ltd [2014] 1 WLR 4046. the documents sought in the rule 35(14) notice „are relevant to a reasonably anticipated issue in the main application‟. For these reasons, the appeal must be dismissed. Costs [49] Moneyweb urges the court to direct the Companies to pay Moneyweb‟s costs on a punitive scale as their application to compel discovery in terms of rule 35(14) was and remains untenable, and the conduct of the Companies, in that regard, has had the effect of considerably delaying Moneyweb proceeding with the main application and obtaining access to the securities registers. In addition, they urge the court to make clear that conduct that delays or frustrates the exercise of statutory and constitutional rights is not acceptable. [50] Sight must not be lost of the fact that the Companies had obtained partial relief in the court below. Curiously, the Judge in the court below found that although there was „a compelling case for discovery‟: „I have decided in the exercise of my discretion not to grant a discovery order at this stage. My reasons for this decision are purely practical. If a discovery order is granted, the affidavit would become completely unwieldy.‟ He furthermore pronounced upon the interpretation of s 26(2) of the Companies Act in a manner favourable to the Companies – yet he failed to grant their application to compel discovery in terms of rule 35(14). The Companies were, in my view, justified in appealing the judgment of the court below. Accordingly, I incline against granting costs against the Companies on a punitive scale. [51] The following order is made: The appeal is dismissed with costs including the costs of two counsel. _________________ F Kathree-Setiloane Acting Judge of Appeal APPEARANCES: For Appellants: JJ Brett SC with D Malion and K Hopkins Instructed by: Faber Goërtz Ellis Austen Inc, Pretoria McIntyre Van Der Post, Bloemfontein For Respondent: S Budlender with M Sikhakhane Instructed by: Willem De Klerk Attorneys, Pretoria Honey Attorneys, Bloemfontein For Amicus Curie: G Budlender SC Instructed by: Webber Wentzel Attorneys, Johannesburg Webbers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 12 May 2016 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Nova Property Group Holdings v Cobbett (20815/2014) [2016] ZASCA 63 (12 May 2016) MEDIA STATEMENT Today, the Supreme Court of Appeal (SCA) dismissed the appeal by Nova Property Group Holdings Limited (Nova), Frontier Asset Management & Investments (Pty) Limited (Frontier), and Centro Property Group (Pty) Limited (Centro) (the Companies) against a judgment of the Gauteng Division of the High Court, Pretoria (the court a quo) in an interlocutory application lodged by the Companies, in which it was found that the Companies were not entitled to an order to compel Moneyweb (Pty) Ltd (Moneyweb), a publisher of business and financial news, to provide the Companies with certain documents. The Mail & Guardian Centre for Investigative Journalism NPC, commonly known as amaBhungane, was admitted as an amicus curiae in the appeal. The appeal arose from the attempts of Moneyweb and Mr JP Cobbett (Cobbett) to exercise their statutory right in terms of s 26 of the Companies Act 71 of 2008 (the Companies Act) to access the securities registers of the Companies. Cobbett is a financial journalist who specialises in the investigation of illegal investment schemes. As part of Moneyweb’s on-going investigation into the controversial Sharemax property syndication scheme, it commissioned Cobbett to investigate and write articles for publication in Moneyweb, on the shareholding structures of the Companies which were purportedly linked to the syndication scheme. On 24 July 2013, Cobett sent a request to the Companies for access to their securities registers, in terms of s 26(2) of the Companies Act. The Companies refused him access. As a result, Moneyweb launched an application, in the court a quo, to compel the Companies to provide access to them within five days of the date of the order (the main application). For purposes of providing them with a defence in the main application, the Companies then sought to be furnished with documents referred to in Moneyweb’s founding affidavit, as well as other documents which they claimed were relevant to an anticipated issue in the main application. Displeased with Moneyweb’s refusal to provide them with the requested documents, the Companies launched an application to compel them to do so under rule 35(14) of the Uniform Rules of Court (the interlocutory application). The court a quo compelled Moneyweb to furnish the Companies with the documents referred to in its founding affidavit, but in respect of the other documents requested, it found that the Companies had failed to prove that they were relevant to an issue in the main application. Although the court a quo had not decided the main application, it nevertheless pronounced on the interpretation of s 26(2) of the Companies Act, in deciding whether to grant the interlocutory relief sought by the Companies. It concluded that s 26(2) did not confer an absolute right to inspection of the documents envisaged in the subsection, but that the court retained a discretion to refuse to order access. Before the SCA, the issues were twofold. Firstly, the court had to determine whether the order of the court a quo, due to its interlocutory nature, was appealable. Secondly, whether the documents sought by the Companies in the application to compel were relevant to a reasonably anticipated issue in the main application, which concerned the proper interpretation of s 26(2) of the Companies Act and, in particular, whether it confers an unqualified right of access to the securities register of a company . In relation to the appealability of the order, the SCA held that it is appealable; in the interest of justice. On the second issue which concerned the proper interpretation of s 26 (2) of the Companies Act, the SCA held that the section confers an unqualified right of access to the securities register of a company, and that such right is essential for effective journalism and an informed citizenry. In doing so, it rejected the Companies’ contention that the right of access is subject to the provisions of the Promotion of Access to Information Act, 2000 (PAIA) and found that the requestor’s motive for seeking access to a company’s securities register is irrelevant. --- ends ---

4006

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 162/2022 In the matter between: MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT OF THE REPUBLIC OF SOUTH AFRICA FIRST APPELLANT MINISTER OF POLICE OF THE REPUBLIC OF SOUTH AFRICA SECOND APPELLANT MINISTER OF HOME AFFAIRS OF THE REPUBLIC OF SOUTH AFRICA THIRD APPELLANT and FRANKLIN D PENNINGTON FIRST RESPONDENT GAIL JACKSON PENNINGTON SECOND RESPONDENT Neutral citation: Minister of Justice and Constitutional Development and Others v Pennington and Another (162/2022) [2023] ZASCA 51 (14 April 2023) Coram: PONNAN ADP, MOCUMIE, WEINER and GOOSEN JJA and KATHREE-SETILOANE AJA Heard: 13 March 2023 Delivered: 14 April 2023 Summary: Civil procedure – special plea of prescription – Prescription Act 68 of 1969 – when respondents had sufficient facts at their disposal – whether claim prescribed in terms of s 12(3). ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Nyathi J, sitting as court of first instance): The appeal is upheld with costs, including those of two counsel. The order of the high court is set aside and replaced with the following: ‘The special plea of prescription is upheld with costs, including those of two counsel where so employed.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Kathree-Setiloane AJA (Ponnan ADP and Mocumie, Weiner and Goosen JJA concurring): [1] Mr Franklin Pennington (first respondent) and his wife, Mrs Gail Pennington (second respondent), instituted an action in the Gauteng Division of the High Court, Pretoria (the high court) for damages against the appellants. The first appellant is the Minister of Justice and Constitutional Development of South Africa (Minister of Justice), the second appellant is the Minister of Police of South Africa (Minister of Police), and the third appellant is the Minister of Home Affairs of South Africa (Minister of Home Affairs). [2] In response, the appellants raised a special plea that the respondents’ claims had prescribed. They also raised a plea of non-joinder contending that in relation to their malicious prosecution claim, the respondents had failed to cite the National Prosecuting Authority (NPA) or the National Director of Public Prosecutions (NDPP) as a defendant to the action, and that in relation to that claim, they fell to be non-suited on that account. Common cause facts [3] The common cause facts, upon which the various claims are founded, are these:1 The first and second respondents were arrested during 1991 on charges of fraud, forgery, and uttering. They were acquitted of those charges in 1992. The first respondent was thereafter arrested on 6 September 1994 on various charges once again including fraud, forgery, and uttering. After his arrest, the first respondent was released on bail. The criminal proceedings in the Regional Court, Johannesburg (the regional court) began on 3 April 1995. The first respondent was convicted on 2 June 1997 and sentenced to a term of imprisonment on 17 November 1997. He noted an appeal against his convictions and sentences. On 18 June 2015, the high court set aside the first respondent’s convictions and sentences. The respondents issued summons in respect of this matter on 15 June 2016. Particulars of claim [4] The respondents plead, in their particulars of claim, that they suffered ‘damages for a series of wrongs committed by servants of the [appellants], in relation to a 1994 arrest of the [first respondent], criminal charges, the criminal trial, conviction and sentence, and an inordinately long delay in having a hearing in his appeal which was successful, and all the convictions and sentences being set aside’. [5] In addition to the common cause facts referenced above, the respondents plead, under the heading ‘The Criminal Trials’, inter alia, that: (a) Simultaneously with his third arrest, the Minister of Home Affairs declared the first respondent to be a prohibited person in terms of the Alien’s Control Act,2 and issued him with a s 41(1) permit.3 Although this permit allowed him to remain in South Africa pending the conclusion of the trial, it prohibited him from taking up employment or conducting business during this time; and (b) The first respondent was released on bail but was precluded from leaving South Africa pending finalization of the trial and appeal. 1 The parties agreed on a list of common cause facts. 2 Aliens Control Act 96 of 1991 (Aliens Control Act). 3 Section 41(1) of the Aliens Control Act provides that: ‘The Minister may issue to a prohibited person a temporary permit on the prescribed form to enter and reside in the Republic for the purpose, and subject to other conditions mentioned therein.’ [6] The respondents plead under the heading ‘APPEAL’, inter alia, that: (a) The trial record and exhibits were still in the possession of the presiding magistrate after the trial. He only handed over the trial record (without the exhibits) to the clerk of the regional court a year later; (b) During the following year, the first respondent repeatedly requested the appeal clerk at the regional court to prepare the record for appeal; (c) The first respondent was advised during December 1998 that the typed record had been returned to the appeal clerk but not the exhibits; (d) Since no later than 31 December 1998 the servants of the Minister of Justice knew or should have known that the trial record was in such a poor state that it would be impossible to provide a proper record suitable for the appeal. Despite that knowledge, they pretended that they would be able to provide a proper record, and opposed every attempt by the first respondent to have his conviction and sentence set aside on the grounds that it was impossible to provide a proper record suitable for the appeal; (e) In October 2003, the first respondent was informed by Advocate P Nel (Mr Nel) of the office of the Director of Public Prosecutions (DPP) that the appeal had been enrolled for hearing on 18 November 2004; (f) This was the first of approximately 70 instances of contact that the first respondent had with Mr Nel alone, over the ensuing 13 years in relation to the provision of the trial record and enrollment of the appeal for hearing; (g) In the following ten years, the first respondent would make more than 130 requests to various government entities concerning the provision of the trial record and the enrollment of the appeal for hearing, to no avail; (h) On 1 December 2001, the first respondent made application to the high court to compel the DPP to provide the trial record and enroll the appeal. This application was dismissed based on an undertaking given by Mr Nel that the record would be ready by 17 March 2004; (i) After numerous requests to, inter alia, the office of the DPP to be provided with the trial record, as per the undertaking above, the first respondent launched a further application in the Western Cape Division of the High Court, Cape Town in 2011. It was dismissed for lack of jurisdiction. The DPP responded by saying that it had not heard from the first respondent for seven years, and had been advised by his former attorney that he had died; (j) In April 2012, the first respondent made application to the high court for an order setting aside his conviction and sentence due to the failure of the DPP to prosecute the matter. This application was dismissed on 18 April 2013; (k) The DPP set the appeal down for hearing on 13 August 2012. It was postponed sine die to allow the DPP time to reconstruct, paginate, index, copy and distribute the record; (l) The first respondent was provided with a copy of the reconstructed record during March 2013. This was 16 years after he first noted the appeal; and (m) On 18 June 2015, the criminal appeal was disposed of, and the convictions and sentences of the first respondent were set aside. [7] The respondents plead that the appellants are liable for damages in the amounts sought because: (a) ‘the State’ failed, inter alia: (i) in its duty to ensure that the first respondent’s trial was prosecuted without unnecessary, unreasonable or undue delays; (ii) in its duty by failing to ensure that the appeal was prosecuted without undue delay despite all of the first respondent’s efforts to ensure that it was finalized; (iii) to ensure that the record was prepared for the purposes of prosecuting the appeal, and to prepare the record without any unnecessary, unreasonable, unwarranted or undue delay; (iv) in one or more ways, to enroll the appeal for hearing, due to the undue, unnecessary, intentional, alternatively negligent, and consequently unlawful delay in reconstructing the record, despite the respondents’ constant and concerted attempts to prosecute the matter to finality. (b) The third arrest and the laying of criminal charges and the criminal trial pursuant thereto were wrongful, unlawful and in breach of the rights of the respondents or one of them; and (c) The third arrest of the first respondent directly led to the Minister of Home Affairs issuing the permit, in terms of the Aliens Control Act, obliging him to remain in South Africa pending the finalization of the criminal proceedings against him. This permit prohibited the first respondent from taking up employment or conducting business pending finalization of the trial and appeal. In doing so, it unjustifiably violated the first respondent’s constitutional rights to freedom of movement and residence, and to freedom of trade, occupation, and profession. [8] In relation to the damages suffered, the respondents plead that: ‘The fact that the [first respondent] [was] arrested and subjected to the criminal trial, and that [he] was precluded from taking up any employment or conducting business in South Africa pending the outcome of the trial and the appeal, following the third arrest, caused the dissipation of both [respondents’] assets, direct loss of income, pain and suffering, loss of amenities of life and a decline in the [first respondent’s] mental and physical health as well as consequential damages in that the [first respondent] was unable to provide for the [second respondent] and his family. This was exacerbated by the fact that the State, by virtue of the conditions of his residence, imposed by the [third appellant], as a direct consequence of the [first respondent’s] third arrest, by employees acting within their scope and duties as employees of the [second appellant], precluded him from taking up employment or conducting business in South Africa, which condition endured from 6 September 1994 to the conclusion of the appeal hearing on 18 June 2015, a period of almost twenty one (21) years. This condition still persists. The inordinate delay, and/or refusal and/ or failure on the part of the [first appellant] to properly prepare the record for the appeal to be prosecuted without undue delay, rendered the permission granted by the [third appellant] to the [first respondent] to remain in South Africa pending the conclusion of the criminal proceedings against him [by] prohibiting him from taking up employment or conducting business, thereby denying him the means of supporting himself or his family, unfair, unreasonable, irrational and therefore unlawful.’ [9] The respondents furthermore allege that they would not have suffered the damages but for the (a) wrongful arrest; (b) criminal trial; (c) unjustifiable convictions and sentences; (d) wrongful, unreasonable delay and/or refusal and/or failure to properly deal with the first respondent’s appeal, despite his efforts to compel the State to do so; and (e) the fact that during the entire period that the first respondent was awaiting the finalization of the appeal, he was precluded from generating any income. The respondents accordingly plead that they suffered the damages as set out below: First Respondent: ‘Loss of income: R 300 000 000.00 lnjuria due to wrongful arrest and prosecution: R 20 000 000.00 Pain and suffering and loss of amenities of life: R 10 000 000.00 Contumelies R 10 000 000.00.’ Second Respondent: ‘Loss of maintenance and support: R 50 000 000.00 Pain and suffering: R 10 000 000.00.’ The respondents consequently claim that the first respondent is entitled to payment of R340 000 000, and the second respondent to payment of R80 000 000, jointly and severally, from the appellants, the one paying the others to be absolved. Special plea of prescription [10] The appellants’ special plea of prescription is directed at: (a) the third arrest of the first respondent, which occurred on or before 6 September 1994; (b) the alleged malicious prosecution of the first respondent, which commenced during September 1994 and was finalized prior to December 1998; and (c) the fact that, on the respondents’ allegations, by 31 December 1998, servants of the Minister of Justice were aware that they could not compile a proper record for the prosecution of the appeal. The appellants consequently contend that the respondents’ claims, as pleaded in the particulars of claim, have prescribed as the summons was only issued in June 2016, which is more than three years after the alleged unlawful conduct relied upon. [11] The high court dismissed the special plea of prescription.4 Its reasoning is terse and amounts to this: ‘From a conspectus of the particulars of claim, the causes of action relied upon are broad and covered different alleged actions and omissions of various [appellants] who have been cited in this matter. … What is definitive in determining this matter is the fact that the [respondents] are not relying on a single self-standing claim based on unlawful arrest. What is clear is that there was a 4 The high court made an order, in terms of rule 33(4) of the Uniform Rules of Court, separating the determination of the special plea and a legal point (plea of non-joinder) from that of the merits and quantum. The parties had entered into a prior agreement that the merits and quantum be separated. chain of events that followed the initial arrest, and which culminated in the appeal being upheld. This accords with the adequate cause test espoused by Neetling et al. I consequently find that there is a sufficiently close and continuous connection between the alleged conduct of the [first appellant] through to that of the [third appellant] and the consequences complained of, which only terminated on 18 June 2015. Prescription in my view, only started running after that.’ (Footnotes omitted.) [12] The question raised by the plea of non-joinder was whether any of the appellants could be held liable for the alleged malicious prosecution of the first respondent, instead of the NPA or the NDPP, which had not been joined as parties to the action. In supplementary reasons, the high court held that it is ‘not persuaded that the complaint of non-joinder is based on legal substance’ because s 179 of the Constitution:5 ‘[C]ould not be any clearer in so far as the functionary who bears responsibility for the actions of the prosecuting authority. At any rate what is pleaded is that the clerk of the court (“the appeals clerk at the Johannesburg Regional Court”) was unable to compile a record for purposes of prosecuting the intended appeal by the [respondents]. The clerk of the court also resorts under the Minister of Justice.’ (Footnote omitted.) [13] The high court dismissed both the special plea of prescription and the plea of non-joinder and reserved the costs. The appellants appeal against both these orders. They do so with the leave of the high court. Analysis [14] The claims of the respondents are premised on the unlawful arrest and detention of the first respondent; his malicious prosecution; and the inordinate delay in the finalization of the appeal noted by him against his conviction and sentence. The respondents contend, to the contrary, that this construction of the particulars of claim ignores the allegation that their claim is based on a series of wrongs committed during the period from 1994 to June 2015, and that during that period, the first respondent 5 Section 179(6) of the Constitution provides: ‘The Cabinet member responsible for the administration of justice must exercise final responsibility over the prosecuting authority.’ was prohibited from earning money. However, during argument in the appeal, counsel for the respondents conceded that, despite the formulation of their pleaded claims: (a) the third arrest of the first respondent in 1994, the criminal charges against him, and the subsequent criminal trial were neither unlawful nor malicious; (b) the bail conditions precluding the first respondent from leaving South Africa, pending the finalization of the trial and the appeal, were not unlawful. (c) the decision of the Minister of Home Affairs to issue the first respondent with the s 41(1) permit prohibiting him from taking up employment, or conducting a business in South Africa pending the conclusion of the criminal trial was not unlawful. [15] It was accordingly conceded that the respondents’ claim against the Minister of Police could not be sustained. Counsel for the respondents also accepted that the particulars of claim does not contain a damages claim against the Minister of Home Affairs, despite the allegation that the inordinate delay in preparing the appeal record rendered the prohibition, by the Minister of Home Affairs, against the first respondent being employed or conducting a business pending the conclusion of the criminal proceedings, unlawful. It was also accepted, during argument in the appeal, that the respondents have not laid any basis, in their particulars of claim, for the following heads of damages: injuria due to wrongful arrest and prosecution; pain and suffering, loss of amenities of life and contumelia in respect of the first respondent; and loss of maintenance and support and pain and suffering in respect of the second respondent. [16] Consequently, the respondents’ only remaining claim is one for loss of income against the Minister of Justice because of the purported ‘wrongful, unreasonable delay and/or refusal and/or failure to properly deal with the first [respondent’s] appeal, despite the first [respondent’s] efforts to compel the state to do so’. And ‘that during the entire period that the first [respondent] was awaiting the finalization of the appeal he was precluded from generating an income’. Thus, as things stand, the only question for determination in the appeal is whether this claim has prescribed. [17] However, before commencing with that determination, I make the following observations arising from the concessions made on behalf of the respondents during argument in the appeal. The respondents’ claim has been described as a broad catch- all one directed at the three appellants and their servants, ranging from members of the police and the prosecutorial services, who were involved in the decision to proceed with the arrest and criminal charges, to the presiding magistrate and the clerk of the regional court (all acting in the course and scope of their employment). The particulars of claim are difficult to comprehend even though it is prefaced by a ‘summary overview’. This summary has not made it any easier to identify, in each instance, the respondents’ cause of action. [18] The particulars of claim also does not comply with rule 18 of the Uniform Rules of Court. Instead of pleading a concise statement of facts with sufficient particularity to enable the appellants to answer thereto, the particulars of claim are impermissibly interspersed with chunks of evidence. The damages claimed are also unclear and imprecise. Given these deficiencies in the particulars of claim, it is difficult to see how the respective appellants are supposed to understand the basis of the action, and the damages sought in each instance against each of them. It is, therefore, unsurprising that counsel for the respondents readily conceded, during argument in the appeal, that ‘the particulars of claim are not a model of clarity’. [19] In view of the respondents’ concessions referenced above, the cause of action ultimately reduced itself to (and on which the special plea falls to be determined) ‘the unlawful conduct of the employees of the Minister of Justice in failing to deal with the appeal without delay’. [20] In terms of s 11(d) of the Prescription Act 68 of 1969 (the Act), the debts that form the subject-matter of the respondents’ claims prescribe within three years from the date that prescription commences to run. Section 12(1) of the Act provides that prescription commences to run as soon as the debt in question is due, ie when it is owing and payable. Section 12(3) of the Act provides that ‘[a] debt shall not be due until the creditor has knowledge of the identity of the debtor and the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care’. In other words, a debt becomes due when the creditor or claimant acquires a complete cause of action for its recovery. This is the entire set of facts which a plaintiff must prove to succeed.6 [21] On the argument advanced by the appellants, prescription in relation to the unlawful conduct of the servants of the Minister of Justice commenced running on 31 December 1998, as, on the pleadings, the respondents were aware by that stage of the fact that the servants of the Minister of Justice knew that ‘it was impossible to provide a proper record suitable for the appeal’. There is thus much to be said for the contention that prescription commenced to run on that date. [22] However, there may well be a further (and perhaps narrower) basis upon which the special plea can be decided. The respondents plead in the particulars of claim that, in April 2012, the first respondent made application to the Gauteng Division of the High Court, Johannesburg, for an order setting aside his conviction and sentence due to the failure of the DPP to prosecute the appeal. This application was dismissed on 18 April 2013. [23] In support of that application, it would have been necessary for the first respondent to have made out a case that the DPP (and the servants of the Minister of Justice) acted unlawfully and in breach of their legal duty to ensure that the appeal was prosecuted without undue delay. This signifies that by the date of the launch of this application in April 2012, the first respondent had all the necessary facts at his disposal, sufficient to found a cause of action. Prescription in respect of this claim would, therefore, have commenced to run at the latest on the day after this application was launched in April 2012. And, it would have prescribed three years later, in May 2015. Accordingly, on the most generous construction for the respondents, by the time the respondents issued summons in respect of this matter on 17 June 2016, the respondents’ claim had prescribed, more than a year earlier. [24] For these reasons, the appeal against the dismissal of the special plea must be upheld. 6 Cape Town Municipality and Another v Allianz Insurance Co Ltd 1990 (1) SA 311 (C) at 321; Santam v Ethwar [1998] ZASCA 102; 1999 (2) SA 244 (SCA). [25] In the result, the following order is made: The appeal is upheld with costs, including those of two counsel. The order of the high court is set aside and replaced with the following: ‘The special plea of prescription is upheld with costs, including those of two counsel where so employed.’ ________________________ F KATHREE-SETILOANE ACTING JUDGE OF APPEAL Appearances For the appellant: M M W van Zyl SC with C G V O Sevenster Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein For the respondent: T Möller Instructed by: Lombard & Kriek Inc, Tygervalley Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 14 April 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Minister of Justice and Constitutional Development and Others v Pennington and Another (162/2022) [2023] ZASCA 51 (14 April 2023) Today, the Supreme Court of Appeal (SCA) upheld an appeal with costs, including those of two counsel, against the judgment of the Gauteng Division of the High Court, Pretoria (the high court), which dismissed the special plea of prescription and the plea of non-joinder raised by the appellants in reply to a damages claim brought by the respondents. Mr Franklin Pennington (first respondent) and his wife, Mrs Gail Pennington (second respondent), instituted an action in the high court for damages against the appellants. The first appellant was the Minister of Justice and Constitutional Development, the second appellant was the Minister of Police, and the third appellant was the Minister of Home Affairs. In response, the appellants raised, inter alia, a special plea that the respondents’ claims had prescribed. The facts of the matter were the following. The first respondent was arrested on 6 September 1994 on charges including fraud, forgery, and uttering. He was convicted on 2 June 1997 and sentenced to a term of imprisonment on 17 November 1997. He noted an appeal against his convictions and sentences. On 18 June 2015, the high court set aside the first respondent’s convictions and sentences. The respondents issued summons in this matter on 15 June 2016. The claims of the respondents were premised on the alleged unlawful arrest and detention of the first respondent; his alleged malicious prosecution; and the inordinate delay in the finalization of the appeal noted by him against his conviction and sentence, and that during 1994 to June 2015, the first respondent was prohibited from earning income. As a result of concessions made by the respondents in the appeal, the SCA found that the only question for determination was whether the claim for loss of income against the Minister of Justice because of the purported unlawful conduct of its employees in failing to deal with the appeal without delay, had prescribed. The SCA found in this regard that on the argument advanced by the appellants, prescription in relation to the unlawful conduct of the servants of the Minister of Justice commenced running on 31 December 1998, as, on the pleadings, the respondents were aware by that stage of the fact that the servants of the Minister of Justice knew that ‘it was impossible to provide a proper record suitable for the appeal’. There was thus much to be said for the contention that prescription commenced to run on that date. Nevertheless, the SCA found further that there was a further (and perhaps narrower) basis upon which the special plea could be decided. In April 2012, the first respondent made application to the Gauteng Division of the High Court, Johannesburg for an order setting aside his conviction and sentence due to the failure of the Director of Public Prosecutions (DPP) to prosecute the appeal. By the date of the launch of that application in April 2012, the first respondent had all the necessary facts at his disposal, sufficient to found a cause of action. The SCA found that prescription in respect of that claim would, therefore, have commenced to run at the latest on the day after this application was launched in April 2012. And, it would have prescribed three years later, in May 2015. Accordingly, the SCA found that on the most generous construction for the respondents, by the time the respondents issued summons in this matter on 17 June 2016, the respondents’ claim had prescribed, more than a year earlier. ~~~~ends~~~~

1860

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 064/11 In the matter between: SHELDON PATRICK FURLONG Appellant and THE STATE Respondent Neutral citation: Furlong v State (064/11) [2011] ZASCA 103 (1 June 2011) Coram: NAVSA, SERITI JJA and PETSE AJA Heard: 24 May 2011 Delivered: 1 June 2011 Summary: Criminal Law ─ sentence ─ accused charged with a contravention of section 36 of the General Law Amendment Act 62 of 1955 ─ magistrate equating offence with more serious offences ─ sentence set aside and substituted with a lesser sentence. _____________________________________________________________________ ORDER On appeal from: North Gauteng High Court (Pretoria) (Mavundla J and Van Zyl AJ sitting as a court of appeal): 1. The appeal is allowed. 2. The order of the court a quo is set aside and in its place the following is substituted: ‘1. The appeal is upheld. 2. The sentence imposed by the magistrate is altered to read as follows: “The accused is sentenced to three years’ and two days’ imprisonment.” 3. The substituted sentence set out in 2 above is antedated to 18 May 2007.’ ___________________________________________________________ JUDGMENT PETSE AJA (NAVSA and SERITI JJA concurring) [1] The appellant stood trial in the regional court, Musina, on a charge of contravening s 36 of the General Law Amendment Act 62 of 1955.1 [2] It was common cause at the trial that on or about 24 October 2006 the appellant was, at or near Beit Bridge in the regional division of 1 S36 provides: ‘Failure to give a satisfactory account of possession of goods. Any person who is found in possession of any goods, other than stock or produce as defined in section one of the Stock Theft Act, 1959 (Act 57 of 1959), in regard to which there is reasonable suspicion they have been stolen and is unable to give a satisfactory account of such possession, shall be guilty of an offence and liable on conviction to the penalties which may be imposed on a conviction of theft. Limpopo, found in unlawful possession of an Audi Q7 four-wheel drive motor vehicle (the vehicle) valued at R750 000. There was a reasonable suspicion that the vehicle had been stolen as the appellant was unable to proffer a satisfactory account of such possession. [3] Having pleaded guilty to the charge he was duly convicted as charged and sentenced to imprisonment for a period of seven years. [4] The appellant unsuccessfully appealed against his sentence to the Pretoria High Court. Aggrieved by this result the appellant applied to the Pretoria High Court for leave to pursue a further appeal against sentence to this court, which was granted. [5] The owner of the vehicle, Mr Hlanigani Joseph Maluleke testified in relation to sentence only. A summary of his evidence is set out hereunder. On 14 October 2006 at about 19h00 he was driving the vehicle on Klagobela Street in Atteridgeville when he realised that there was a white motor vehicle driving behind him. When he reached the end of the street, which was a cul-de-sac, a white motor vehicle parked behind him, rendering it impossible for him to execute a u-turn. Suddenly someone was pointing a gun at him alongside the driver’s window of his vehicle, demanding that he alight. He complied and at that stage saw two other men opening the rear passenger door of his vehicle. Then he was shoved into the vehicle and instructed to lie face down as they drove from the scene. [6] The hijackers searched Mr Maluleke and seized his automated bank teller cards. He was compelled to disclose the personal identity numbers of his bank cards under threat of death should the numbers disclosed turn out to be false. Later he was ejected from the vehicle, pushed down a slope and bushy area, with both his hands tied behind his back. He managed to walk to a toll plaza on the N4 road between Rustenburg and Atteridgeville from where the police were summoned. [7] Mr Maluleke subsequently learnt, on making enquires from Standard Bank and ABSA Bank, that a total of R18000 had been withdrawn from his bank accounts. When his motor vehicle was recovered by the police on 24 October 2006 his laptop, digital camera, bank cards and cheque book were missing. Due to the fact that he was robbed of his motor vehicle at night he could not identify his assailants. So much then for his evidence. [8] It is apposite at this stage to mention that in his written statement in substantiation of his guilty plea in terms of s 112(2) of the Criminal Procedure Act 51 of 1977, the appellant admitted all the essential elements of the offence charged including admitting that at the time of his arrest he was in no position to give a satisfactory account of his possession of the vehicle and that his dealings with the vehicle were at all material times intentional and unlawful. [9] The circumstances in which an appellate court would be justified in interfering with a sentence of the trial court have been restated in a long line of judgments of this court. In S v Mtungwa & ‘n ander 1990 (2) SACR 1 (A) this court held that once it is shown that one, some or all of the following factors exist the appellate court would be justified to interfere, namely: if the sentence is, for example, (i) disturbingly inappropriate; (ii) totally out of proportion to the magnitude of the offence; (iii) sufficiently disparate; (iv) vitiated by misdirection showing that the trial court exercised its discretion unreasonably and (v) is otherwise such that no reasonable court would have imposed it. (See also S v L 1998 (1) SACR 463 (SCA); S v Salzwedel & others 1999 (2) SACR 586 (SCA); S v Giannoulis 1975 (4) SA 867 (A) at 868G-H; S v Kgosimore 1999 (2) SACR 328 (SCA) at para 10) [10] On appeal before us the severity of the sentence imposed on the appellant was assailed on a number of bases. It was contended that the trial court paid little or no regard to the moral blameworthiness of the appellant; failed to give due weight to the fact that by pleading guilty the appellant had thereby expressed contrition; and committed a material misdirection by imposing ‘an exemplary sentence’ that had the effect of ‘dramatically altering the existing sentencing patterns’. [11] The critical issue for determination in this appeal therefore is whether the trial court committed a material misdirection of the nature alleged or there is otherwise justification warranting interference with the sentence imposed by the trial court. Allied to that issue is the question whether the court a quo should have come to a conclusion different to the one reached by it. [12] The magistrate based his reasoning for the sentence imposed on the following factors: (a) the seriousness of the offence that the appellant was convicted of, aggravated by the fact that the vehicle concerned had been hijacked; (b) the alertness of the police that led to the recovery of the vehicle meant that their ‘good work’ was deserving of appreciation to be reflected by imposing a sentence that ‘would encourage them to combat crime in the future as they have in this case’; (c) that car-hijackers and thieves would continue relentlessly with their nefarious activities for so long as there were people such as the appellant who hold themselves ready to dispose of hijacked and stolen vehicles; (d) the prevalence of the offence in the area of jurisdiction of the trial court. [13] In making these observations on reaching a decision on an appropriate sentence the trial court was in fact equating the offence that the appellant was charged with with the offence of robbery and/or theft. Put differently he was being punished for more serious offences than the one he was being charged with. In particular the magistrate appeared intent on punishing the appellant for the actions of the hi-jackers. This is a material misdirection which is inextricably linked with the trial court’s decision on an appropriate sentence. There is no doubt that it is that view that resulted in a more severe sentence. This court is thus at large to interfere. [14] Although the learned magistrate was at pains to point out that he would take care not to sacrifice the appellant on the altar of deterrence, I am satisfied that, given the severity of the sentence that he ultimately imposed on the appellant, he in fact only paid lip service to this laudable principle. [15] It remains to consider what, in the circumstances, is an appropriate sentence in substitution of the one imposed by the trial court and confirmed by the court a quo. [16] We were informed by counsel for the appellant at the hearing of the appeal ─ following inquiries made by him from correctional services at the behest of this court ─ that the appellant had been released under correctional supervision on 20 May 2010. The appellant was sentenced to seven years’ imprisonment on 18 May 2007, which then means that he had served three years of his seven year sentence. Prior to his conviction he was in police detention for four months awaiting trial. He was at the time of his conviction a first offender and 40 years of age. It must be mentioned that, although he pleaded guilty to the charge, it is not possible to discern, on the evidence before us, whether his guilty plea can be taken as an expression of genuine remorse or was rather provoked by a stark realisation on his part that the State had ‘an open and shut’ case against him, in which event his guilty plea would be a neutral factor.2 The appellant also had two minor children then aged 11 and 15 years who, it would appear, were solely dependant on him for their livelihood. He had just found employment as a despatch clerk from which he would have earned a salary of R2000 per month. [17] The appellant’s counsel submitted on his behalf that the appellant’s role was merely to deliver the vehicle to someone in Zimbabwe. This submission appears well founded. [18] There are aggravating factors that are deserving of due consideration. The appellant was convicted of a serious offence. It is thus perfectly understandable that the learned magistrate gave the appellant’s plea for an option of a fine short shrift. As stated before he had been found in possession of a relatively new motor vehicle, worth almost R800 000, which was on the verge of being whisked away beyond the borders of this country. [19] There is no doubt that a sentence of 7 years’ imprisonment is more appropriate in the case of theft of a motor vehicle. And as pointed out 2 See S v Barnard 2004 (1) SACR 191 (SCA) at 197g-h. before the magistrate in sentencing the appellant appeared intent on punishing the appellant for the acts of the hi-jackers. The period spent in jail by the appellant awaiting trial and the fact that he has already been released under correctional supervision are relevant factors in a decision concerning an appropriate sentence. [20] In my view the state rightly conceded that a suitable sentence in all the circumstances of this case is the period of imprisonment already served. The effect of the order below is that there will be no further period of imprisonment to be served by the appellant. Thus the sentence will be antedated. [21] In the result the following order is made: 1. The appeal is allowed. 2. The order of the court a quo is set aside and in its place the following is substituted: ‘1. The appeal is upheld. 2. The sentence imposed by the magistrate is altered to read as follows: “The accused is sentenced to three years’ and two days’ imprisonment.” 3. The substituted sentence set out in 2 above is antedated to 18 May 2007.’ ___________________ XM Petse Acting Judge of Appeal APPEARANCES APPELLANT: HL Alberts Instructed by Pretoria Justice Centre, Pretoria; Bloemfontein Justice Centre, Bloemfontein. RESPONDENT: SR Sibara Instructed by Director of Public Prosecutions, Pretoria; Director of Public Prosecutions, Bloemfontein.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 1 June 2011 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * FURLONG V THE STATE The Supreme Court of Appeal (SCA) today upheld an appeal against an order of the North Gauteng High Court, Pretoria dismissing Mr Furlong’s appeal against a sentence of seven years’ imprisonment imposed upon him by a regional court for the unlawful possession of a motor vehicle in contravention of section 36 of the General Law Amendment Act 62 of 1955. The vehicle had been robbed from its owner at gunpoint. Due to the fact that the robbery took place at night the owner of the vehicle could not identify his assailants, hence the appellant was charged with a contravention of section 36. He pleaded guilty to the charge and, as stated above, was sentenced to seven years’ imprisonment. The question before the SCA was whether the trial court had committed a material misdirection by imposing such a sentence. The SCA held that the appellant was punished for more serious offences than the one he was charged with. The magistrate appeared intent on punishing the appellant for the actions of the robbers. This, the SCA held, was a material misdirection which was inextricably linked with the magistrate’s decision on an appropriate sentence. This material misdirection, the SCA further held, entitled it to interfere with the sentence imposed by the magistrate. It substituted the sentence of seven years’ imprisonment with a sentence of three years’ two days’ imprisonment, antedated to the date on which the appellant was sentenced by the magistrate, which is the sentence that the appellant had served before being released under correctional supervision.

3701

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 759/2020 In the matter between: CHRISTIAAN BRITS APPELLANT and MINISTER OF POLICE FIRST RESPONDENT COLONEL JAMES ESPACH SECOND RESPONDENT Neutral citation: Brits v Minister of Police & Another (759/2020) [2021] ZASCA 161 (23 November 2021) Coram: PETSE AP and MATHOPO, MOCUMIE, MOLEMELA and MOTHLE JJA Heard: 25 August 2021 Delivered: This judgment was handed down electronically by circulation to the parties' representatives via email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 10h00 on 23 November 2021. Summary: Delict – unlawful arrest and detention – vicarious liability of the Minister of Police – appropriate amount of compensation. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Limpopo Division of the High Court, Polokwane (Makgoba JP and Mudau J sitting as court of appeal): The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘1 The appeal is upheld with costs. The order of the Magistrates’ Court, Tzaneen, is set aside and replaced with the following: “(a) The first defendant is ordered to pay R70 000 as general damages to the plaintiff. (b) The first defendant is ordered to pay R7 239. (c) The amounts in paragraphs (a) and (b) above shall bear interest at the prescribed rate from date of the judgment of the Magistrates’ Court, Tzaneen, being 11 January 2018 to date of payment. (d) The first defendant is ordered to pay the plaintiff’s costs of suit.”’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Molemela JA (Petse AP and Mathopo, Mocumie and Mothle JJA concurring) Introduction [1] This appeal arises from a delictual claim for damages instituted by the appellant, Mr Christiaan Brits as the plaintiff, against the respondents as the defendants in the Magistrates Court, Tzaneen (the trial court). The basis of the claim was that the second respondent, Col Espach, (cited as the second defendant in the trial court) had acted wrongfully and unlawfully when he arrested the appellant without a warrant at the latter's business premises, a dealership in second hand goods and scrap metal, on suspicion of being complicit in the offence of possession of property suspected to be stolen. The claim against the first respondent, the Minister of Police (cited as the first defendant in the trial court), was on the basis of vicarious liability. The trial court found that the arrest was justified and thus dismissed the appellant’s claim with costs. The appellant appealed to the Limpopo Division of the High Court (the high court). That court, per Mudau J with Makgoba JP concurring, dismissed the appeal with costs. Aggrieved by that decision, the appellant sought and was granted special leave by this Court. Background facts [2] The circumstances leading to the appellant’s arrest are largely undisputed. The appellant stated in his evidence-in-chief that metal scrap dealers were regulated by law in relation to the sale and purchase of second-hand goods. He testified about the procedure normally followed at his shop whenever a seller offered to sell scrap metal. This procedure was in apparent reference to the Second-Hand Goods Act 6 of 2009 (Second-Hand Goods Act), which prescribes that all scrap metal dealers engaged in recycling of any controlled metals be registered and keep a register that contains the details of the seller, a description of the product sold, as well as the price involved in the object of sale. He stated that the scrap metal offered for sale is usually a mixture of different metals, like aluminium, iron, pieces of stone and pieces of plastic. According to the appellant, once the metal is brought to his shop, the process followed by the shop-assistants entailed separating and sorting different metals out. After the sorting process, ‘the metal is then weighed, written up in the register, the price calculated, the ID document [of the seller] would be photocopied, and then the person leaves with his money’. His explanation of the procedure followed at his shop was not disputed by the respondents. [3] On the morning of 4 July 2014 the appellant received a text message from his former employee, Mr Dube, asking the appellant to phone him. He ignored the text message. About 30 minutes later, Mr Dube sent a message to his phone via the short message service (SMS) informing him that he had copper for sale. He told Mr Dube to take it to the shop. He explained that the reason he directed him to the shop was because all business transactions were done at his business premises. He subsequently received a call from the manager of his business, Mr Michael Mashapu (Mr Mashapu), who told him that the police were at the business premises and required his presence. Upon arrival at the shop, Col Espach told him that Mr Mashapu had purchased stolen copper and the appellant would therefore be arrested. He informed Col Espach that Mr Dube had sent him an SMS offering to sell him copper. He professed his innocence and even offered to assist Col Espach to locate Dube. After reading the SMS exchange, Col Espach confiscated his phone and then arrested him. He was detained from about 12h00 and subsequently released on bail the following day, 5 July 2014, at about 13h00. As a result of the arrest, he engaged the services of a legal representative. He incurred legal expenses in the amount of R7239 in respect of the bail proceedings. The appellant’s version of events was not controverted. [4] Mr Mashapu testified that on the day of the incident, three men entered the shop and offered to sell scrap metal that was contained in a bag. While he and a female shop assistant were in the process of examining the items that were brought to the shop by these men, Col Espach entered the shop. He was dressed in civilian clothing. He grabbed one of the three men, identified himself as a police officer and produced his appointment card. The three persons all managed to flee. He maintained that Col Espach entered the shop before he and his female colleague had had an opportunity of inspecting the contents of the bag. At that moment, the contents of the bag had not yet been weighed and no transaction to purchase its contents had been entered into. He also pointed out that at that stage, he bore no knowledge of the SMS exchanges between the appellant and Dube. According to Mr Mashapu, the appellant had, at no stage, instructed him to buy or take possession of the items brought to the shop by the three men. He further testified that after Col Espach had introduced himself to him, he called the appellant to apprise him of the situation. While he was talking to the appellant, Col Espach took the phone from him and instructed the appellant to come to his shop, indicating that he intended arresting him. [5] Although Mr Mashapu’s evidence was that he was not allowed to purchase second-hand copper, it was common cause that the appellant, in the normal course of his business as a second-hand scrap metal dealership, was permitted to deal in all types of metals within the precepts of the law. Mr Mashapu’s evidence regarding the procedure followed when a seller was offering to sell second hand goods accorded with that of the appellant. He confirmed the procedures as set out by the appellant, commencing with the assessment of the nature of the goods brought by the seller and culminating with the recordal of the information in the register and the filing of a copy of the seller’s ID document. He explained that the metals usually brought to the shop for sale consisted mostly of aluminium, radiators and stainless steel metal sheets. He explained that sorting the material offered for sale was important as different metals had varying prices. Whenever someone was selling various metals, the metal would first be sorted before being weighed. I interpose to mention that to the extent that Mr Mashapu’s account of events was not challenged, it must be accepted as correct.1 [6] Colonel Espach testified that on 4 July 2014 he was on duty and had stopped his unmarked vehicle at a petrol station when he saw two men walking in the street carrying what seemed to be a very heavy bag. The two men were coming from the direction of some smallholdings in the area, which was an area that was beset with the theft of copper cables, borehole shafts and transformers. The men were struggling to carry the bag. This fortified his suspicion that the contents of the bag could be copper cables stolen from the industrial area. He decided to watch the movements of these persons in the hope that they would lead him to the kingpin who had created a market for the theft of copper cables. [7] He observed a third man (who was later identified to him as Mr Dube) approaching the duo with a shopping trolley and noted that the heavy bag was loaded on the trolley, whereafter the trio walked together in the direction of a second-hand metal dealership. He phoned his colleagues, reported on his observations and asked for a back-up team to be dispatched. He followed the trio and saw them entering a second-hand metal dealership with the shopping trolley. Watching from the street while awaiting the arrival of the back-up team, he noticed that the bag was taken out of the trolley and put on a counter, whereafter it was attended to by two shop attendants, who later turned out to be Mr Mashapu and an elderly lady. He realised that a transaction was in progress but did not ascertain whether the transaction was concluded because he was moving up and down in the street so that the back-up team could see him. He decided to enter the shop to confront all the persons who were involved in the transaction, as he feared that the men in question would soon leave the premises. 1 President of the Republic of South Africa and Others v South African Rugby Football Union and Others [199] ZACC 11; 1999 (10) BCLR 1059; 2000 (1) SA 1 (CC) para 62. [8] Upon entering the shop, he produced his appointment card, introduced himself and ordered everyone to stand still. At that point, one of the two men who had initially carried the bag pushed him out of the way and the two of them headed for the door. He grabbed one of them, but Mr Dube loosened his grip to help the man escape. He tried chasing the two men in the street, but they outran him. In the intervening period, Mr Dube also fled the scene. [9] He stated that once he was back at the appellant’s shop, he ordered everyone to remain inside until the backup team arrived. He learnt that the person behind the counter, Mr Mashapu, was the manager of the business. He noticed that the bag previously carried by the suspects who had fled was placed on the counter and that the contents thereof had been put in a sack belonging to the shop. Upon the arrival of his back-up colleagues, it was discovered that the contents of the bag were copper cables that had been cut into pieces. The pieces of copper were weighed and found to weigh 29.8 kg. He asked Mr Mashapu to phone the owner of the business. The appellant subsequently arrived at the premises and introduced himself as the owner of the dealership. [10] Upon the appellant's arrival, he (Col Espach) requested to see his cellular phone. Without asking for the appellant’s permission, he looked at the messages on the appellant’s cellular phone. He discovered that the appellant had had an SMS exchange with Mr Dube, in terms of which Mr Dube had offered to sell him copper. The SMS exchange revealed that in response to the appellant’s enquiry about the weight of the copper, Mr Dube had informed him that it weighed 20kg. The appellant had then told Mr Dube to take it to his shop. The SMS exchange led him to suspect that the appellant was complicit in the theft of the copper cables that were brought to his shop. On the basis of that suspicion, he decided to arrest the appellant without a warrant and took him to the police station, where he was kept in detention until he was released on bail on the afternoon of 5 July 2014. The appellant furnished Mr Dube’s address to the police and he was later arrested. [11] Under cross examination, Col Espach conceded that the appellant was, as a second-hand dealer, allowed to buy copper. He stated that his concern was that the appellant had been contacted directly by the seller ‘as if it is a special copper that needs to be delivered that side’. He also conceded that even though he had confiscated the appellant’s phone, a transcript of the SMS exchange was not available to be handed in as evidence. His evidence that Mr Dube had told the appellant that the copper weighed 20kg thus remained unsubstantiated. [12] Colonel Usiba was called as the respondents’ witness. He confirmed that he was part of the back-up police team summoned to the scene by Col Espach. He stated that upon his arrival at the shop, he and his colleagues were shown a mealie meal sack containing copper cables. The copper cables were on the counter, near the scale. Furthermore, he confirmed having seen the SMS exchange between the appellant and Mr Dube in relation to the copper that Mr Dube was asked to bring to the shop. Under cross-examination, he conceded that one could not easily tell that the copper brought to the shop was burnt. None of the companies approached during police investigations were able to identify the copper as their property. The investigating officer, Mr Rasebotsa, also testified as the respondents’ witness. Nothing turns on his evidence. Suffice to mention that he stated that, from his point of view, the proceedings were still pending. [13] It is common cause that the appellant, Mr Dube and a third co-accused appeared before the magistrate's court in Tzaneen on a charge of possession of property suspected to be stolen in contravention of s 362 of Act 62 of 1955. It appears that the charges were then provisionally withdrawn on 17 November 2014, apparently to allow for the re-arrest of Mr Dube, who had absconded whilst out on bail. The trial commenced on 5 September 2016 and was concluded on 24 March 2017. Legal principles applicable to an arrest without a warrant [14] In their plea, the respondents admitted the appellant’s arrest without a warrant and his subsequent detention. Their justification of the arrest was simply set out as 2 Section 36 of Act 62 of 1955 provides: ‘Failure to give a satisfactory account of possession of goods - Any person who is found in possession of any goods ... in regard to which there is reasonable suspicion that they have been stolen and is unable to give a satisfactory account of such possession, shall be guilty of an offence and liable on conviction to the penalties which may be imposed on a conviction of theft.' follows: ‘… the arrest was lawful as the Plaintiff was arrested for possession of suspected stolen property.’ It is trite that the arrest and detention of any person are prima facie wrongful, as they amount to a deprivation of a person's liberty. Section 12 of the Constitution guarantees every person the right not to be deprived of freedom arbitrarily or without just cause and not to be detained without trial. In Minister of Safety and Security v Van Niekerk,3 the Constitutional Court stated as follows: ’17. . . . [T]he constitutionality of an arrest will almost invariably be heavily dependent on its factual circumstances. … 20. [I]t would not be desirable for this Court to attempt in an abstract way divorced from the facts of this case, to articulate a blanket, all-purpose test for constitutionally acceptable arrests.’ [15] As regards the onus to prove the lawfulness of an arrest, the Constitutional Court in Mahlangu and Another v Minister of Police,4 said: ‘It follows that in a claim based on the interference with the constitutional right not to be deprived of one’s physical liberty, all that the plaintiff has to establish is that the interference has occurred. Once this has been established, the deprivation is prima facie unlawful and the defendant bears an onus to prove that there was a justification for the interference.’ In this matter, the arrest was not in dispute; it was therefore common cause that the respondent bore the onus to prove the lawfulness thereof. [16] Section 40 of the CPA provides, in relevant parts, as follows: ‘40 Arrest by peace officer without a warrant (1) A peace officer may without a warrant arrest any person- … (b) whom he reasonably suspects of having committed an offence referred in Schedule 1, other than the offence of escaping from lawful custody. . . . (e) who is found in possession of anything which the peace officer reasonably suspects to be stolen property or property dishonestly obtained, and whom the peace officer reasonably suspects of having committed an offence with respect to such thing.’ 3 Minister of Safety and Security v Van Niekerk 2008(1) SACR 56 (CC); 2007 (10) BCLR 1102 (CC) paras 17 and 20. 4 Mahlangu and Another v Minister of Police [2021] ZACC 10; 2021 (7) BCLR 698 (CC) para 32. [17] The respondents did not, in their plea, specify the subsection of s 40 on which they relied for their justification of the appellant’s arrest. The trial court proceeded on the premise that reliance was placed on s 40(1)(b) of the Criminal Procedure Act. The high court, traversed both s 40(1)(b), on the basis of the charge preferred against the appellant being listed in Schedule 1 of the CPA, and s 40(1)(e), which provides that ‘a peace officer may without warrant arrest any person who is found in possession of anything which the peace officer reasonably suspects to be stolen property or property dishonestly obtained, and whom the peace officer reasonably suspects of having committed an offence with respect to such thing’. [18] In Duncan v Minister of Law and Order for the Republic of South Africa (Duncan)5 it was held that an arrest without a warrant would be justified as envisaged in s 40(1)(b) of the CPA if the following jurisdictional facts were present: (i) the arrestor must be a peace-officer; (ii) the arrestor must entertain a suspicion; (iii) the suspicion must be that the suspect (the arrestee) committed an offence referred to in Schedule 1; and (iv) the suspicion must rest on reasonable grounds. The learned Judge of Appeal stated further that ‘If the jurisdictional requirements are satisfied, the peace officer may invoke the power conferred by the subsection; ie, he [or she] may arrest the suspect. In other words, he [or she] then has a discretion as to whether or not to exercise that power (cf Holgate-Mohamed v Duke [1948] 1 All SA ER 1054 (HL) at 1057). No doubt the discretion must be properly exercised. But the grounds on which the exercise of such a discretion can be questioned are narrowly circumscribed.’ [19] Applying the same reasoning as in Duncan, the jurisdictional factors that have to be proved by a defendant who relies on s 40(1)(e) as a defence are: (i) the arrestor must be a peace officer; (ii) the suspect must be found in possession of property; (iii) the arrestor must entertain a suspicion that the property has been stolen and illegally obtained; (iv) the arrestor must entertain a suspicion that a person found in possession of the property has committed an offence in respect of the property; and (v) the arrestor’s suspicion must rest on reasonable grounds. It is trite that once the 5 Duncan v Minister of Law and Order for the Republic of South Africa (Duncan) [1986] 2 All SA 241 (A); 1986(2) SA 805 (A) at 818F-H. jurisdictional facts for an arrest in terms of any one of the paragraphs of s 40(1) are present, a discretion arises.6 [20] The following remarks made by the court in Mabona and Another v Minister of Law and Order and Others (Mabona)7 in relation to the issue of a reasonable suspicion are apposite: ‘The test of whether a suspicion is reasonably entertained within the meaning of s 40 (1)(b) is objective. . . . Would a reasonable man in the second defendant's position and possessed of the same information have considered that there were good and sufficient grounds for suspecting that the plaintiffs were guilty of conspiracy to commit robbery or possession of stolen property knowing it to have been stolen? It seems to me that in evaluating his information a reasonable man would bear in mind that the section authorises drastic police action. It authorises an arrest on the strength of a suspicion and without the need to swear out a warrant, ie something which otherwise would be an invasion of private rights and personal liberty. The reasonable man will therefore analyse and assess the quality of the information at his disposal critically, and he will not accept it lightly or without checking it where it can be checked. It is only after an examination of this kind that he will allow himself to entertain a suspicion which will justify an arrest. This is not to say that the information at his disposal must be of sufficiently high quality and cogency to engender in him a conviction that the suspect is in fact guilty. The section requires suspicion but not certainty. However, the suspicion must be based upon solid grounds. Otherwise, it will be flighty or arbitrary, and not a reasonable suspicion.’ These remarks are, mutatis mutandis, equally apposite in relation to the provisions of s 40(1)(e). Application of the legal principles to the facts [21] The fundamental question is whether Col Espach, prior to the arrest, reasonably suspected the appellant of having committed an offence in respect of the copper cables brought to his shop by the three men. The trial court and the high court found that he did. The ratio of the decision of the high court can be found in the following passage: 6 Ibid.; also see Minister of Safety and Security v Sekhoto and Another [2010] ZASCA 141; 2011 (5) SA 367 (SCA) para 28. 7 Mabona and Another v Minister of Law and Order and Others 1988(2) SA 654 (SCE) at 658E-G. ‘On the probabilities, [Mr Mashapu] would not have started the process of measurement, before the contents of the bag were ascertained. The measurement of the copper presupposed an important end-stage, receipt of the copper on behalf of the shop. Colonel Espach intervened at the stage when the copper was weighed, consistent with the laid down procedure in the shop. What remained was payment for the copper to the sellers and for the relevant details to be entered in the register. Objectively considered, the arresting police officer in this matter had reasonable grounds for his suspicion and exercised his discretion accordingly. His suspicion that the appellant was involved in the sale of illicit copper was completely justified by the peculiar circumstances. In this case, the appellant, on his version, told a former employee to deliver copper to his shop. On his version, the appellant suspected that the copper was stolen. Prima facie, the appellant exercised constructive control of the copper through his employee, [Mr Mashapu]. That the copper was stolen is fortified by the fact that those who brought it, including the former employee, Dube, are at large, which gave rise to the authorization of a warrant of arrest and the temporary withdrawal of the charges.’ [22] The difficulty for the respondents is that none of the findings in the passage above are borne out by any evidence at all. The appellant never conceded that the contents of the bag were stolen property. The high court therefore erred in finding that the appellant had made such a concession. It seems to me that the high court considered certain parts of the evidence in isolation instead of analysing the evidence in its entirety.8 It failed to take into account that, by Col Espach’s own admission, at the time when he was standing in the street, he was not focused solely on what was happening in the shop because he was also on the lookout for the expected arrival of the back-up team. A significant concession which does not seem to have been taken into account by the high court is that Col Espach admitted that he entered the shop before the transaction was finalised. [23] There can be no debate that a buyer dealing with second-hand goods would first want to see the goods offered to him before deciding whether or not to purchase them. The appellant's and Mr Mashapu’s testimony about the protocols followed at the appellant’s shop are plausible. Notably, Mr Mashapu’s evidence that Col Espach entered while he was busy inspecting the contents of the bag was not disputed. 8 S v Shilakwe 2012 (1) SACR 16 (SCA) at 20, para 11. Similarly, it was not put to him that by the time Col Espach entered the shop, he (Mr Mashapu) had already weighed the copper cables. Under such circumstances, the high court’s findings that ‘[t]he measurement of the copper presupposed an important end-stage, receipt of the copper on behalf of the shop’ and that ‘Col Espach intervened at the stage when the copper was weighed’ are clearly erroneous. [24] It is clear from Col Espach’s own version that he acted hastily and pounced prematurely, as the transaction had not yet been concluded. In terms of the Second- Hand Goods Act, a buyer must inspect the goods and satisfy himself or herself that the seller is in lawful possession of the goods in question before buying them. The second-hand dealer must also record the details of the transaction in a register. The Act further imposes a duty on the second-hand dealer to report any suspicious items to the police and obtain an acknowledgment that he or she made a report. Mr Mashapu’s evidence was that Col Espach entered the shop before he had had an opportunity to follow the protocols set out in the Act. That being the case, his compliance with that Act was interrupted by Col Espach at the stage when he was determining the contents of the bag. He can therefore not be faulted for the absence of the relevant documentation. [25] It is significant that on Col Espach’s own evidence, money had not yet exchanged hands. This must be the reason why the three men were still in the shop when Col Espach arrived at the scene. The persons who brought the copper cables to the appellant’s shop fled as soon as Col Espach had introduced himself. It could therefore not be established whether Mr Mashapu would have purchased the contents of the bag or not. Objectively considered, a reasonable police officer who was privy to the same information as Col Espach would not have reasonably suspected that the appellant was complicit in the three suspects’ possession of the copper cables. There was simply no basis for such a suspicion. [26] As regards the SMS exchange, both the trial court and the high court lost the context of the circumstances under which the SMS text messages between the appellant and Mr Dube were exchanged. The explanation given by the appellant for the SMS exchange was reasonable. This is more so the case because the appellant is the one who volunteered the information pertaining to the SMS exchange between himself and Mr Dube, to Col Espach. The undisputed evidence was that Mr Dube had sent the appellant a text message requesting him to phone him and the appellant had ignored that message because he did not want to talk to him. The appellant’s evidence that he did not want to speak to Mr Dube because he had dismissed him over theft is a plausible version that was confirmed by Mr Mashapu. Even on Col Espach’s version, Mr Dube was merely told to take the copper to the shop. Nothing in Col Espach’s evidence suggested that the SMS exchange was incriminatory. There was no basis for the trial court’s conclusion that a transaction for the sale of copper was concluded via SMS. [27] The respondents’ pleaded case was that the appellant had been found in possession of property suspected to be stolen. According to Snyman, a person is ‘found in possession’ within the contemplation of s 36 of Act 62 of 1955 if he or she has personal and direct control over the goods suspected of having been stolen; it is not sufficient that he exercises control through an agent or a subordinate.9 The high court found that the appellant had exercised constructive control of the copper cables through Mr Mashapu. Relying on an obiter statement in S v Wilson (Wilson),10 the high court reasoned that the appellant was in possession of the copper cables even though he was not physically present at the shop when they were found. In that case, possession of dagga was imputed to the appellant as the owner of the premises where dagga was found in a locked storage area in the appellant’s absence. [28] Reliance on the Wilson judgment is misplaced, in my view, as this case is distinguishable both on the facts and the law. First, the charge in that matter related to the possession of dagga and not the possession of good suspected to be stolen as set out in s 36 of Act 62 of 1955; second, the court expressly stated that it was not necessary for it to decide the precise meaning of the expression ‘found in possession’ as used in s 36 of Act 62 of 1955; third, the court accepted that the owner of the property had exercised a measure of control over the illicit goods; fourth, in coming to its conclusion that the appellant in that matter was in possession of the dagga, the 9 CR Snyman, Criminal Law, 5th ed at 525. 10 S v Wilson 1962 (2) SA 619 (A). court inter alia took into account that the appellant had, at the time when the dagga was found, admitted that it was his property. [29] In this matter, the appellant had never been shown to have exercised any control over the illicit goods. Contrary to the high court’s finding, he never admitted to knowing that the copper cables were stolen. On Col Espach’s own evidence, the bag containing the copper cables was still on the counter when he entered the shop and had not been locked away. Under those circumstances, I am not persuaded that Mr Mashapu ever assumed possession of the copper cables in question. Mr Mashapu categorically stated that the appellant had not, prior to the three men’s arrival at the shop, instructed him to purchase or take possession of the contents of their bag. Therefore, there can be no question of Mr Mashapu having accepted the copper cables as an agent on behalf of the appellant or the appellant having exercised constructive control of the copper through Mr Mashapu. It would therefore be wrong to impute unlawful possession of the copper in question to the appellant. Insofar as the high court found this to have been the case, it erred. [30] On a holistic consideration of all the evidence, the circumstances under which the goods suspected to be stolen ended up at the appellant’s shop were in part within the knowledge of Col Espach as he had witnessed their conveyance to the appellant’s shop. Furthermore, the appellant proffered a reasonable explanation regarding the circumstances surrounding his SMS exchange with Mr Dube. Armed with all of that information, any further suspicion on the part of Col Espach could only have fallen within the category of a ‘flighty or arbitrary, and not a reasonable suspicion’.11 To the extent that Col Espach continued to harbour a suspicion notwithstanding the plausible explanation given by the appellant, his suspicion did not pass the test laid down in Mabona and was therefore not reasonable. [31] Another significant consideration is that the respondents did not dispute the evidence that when Col Espach phoned the appellant, he told him that he must come to the shop so that he could arrest him. Bearing in mind his evidence that he wanted to arrest the ‘kingpin’ who ordered stolen goods and created a market therefor’, the 11 Mabona and Another v Minister of Law and Order and Others, footnote 7 above at 658H. ineluctable inference is that Col Espach had made up his mind to arrest the appellant long before he even arrived on the premises and did not apply his mind to the appellant’s explanation pertaining to the SMS exchange. [32] For all the reasons mentioned above, I am of the view that a police officer possessed of all the information, including the SMS exchange and the explanation therefor, would not have reasonably suspected that the appellant was complicit in the unlawful possession of the copper cables. This finding is dispositive on the issue of liability, as one of the jurisdictional factors that render an arrest without a warrant lawful (a reasonable suspicion), is lacking. Put differently, the question whether the arrestor exercised a discretion to effect an arrest without a warrant only comes up for consideration once all the jurisdictional factors have been established. There is therefore no need for this Court to address itself to the enquiry as to whether or not Col Espach had exercised any discretion prior to effecting the arrest.12 As it was common cause that he was acting within the course and scope of his employment with the first respondent at the time when the appellant was arrested, it follows that the first respondent was vicariously liable for Col Espach's wrongful acts. The determination of quantum [33] It is common cause that the unlawful arrest led to the appellant’s detention for a period of approximately one day. The trial court and the high court did not consider the issue of quantum as they found that the appellant’s arrest and detention were lawful. Although awards of damages made in previous decisions may serve as a guide in the consideration of an appropriate amount of damages for the injury resulting from unlawful arrest and detention, such awards are not to be followed slavishly, for every case must be determined on its facts.13 It must be borne in mind that the primary purpose of an award of damages for unlawful arrest and detention is not to enrich the aggrieved party but to offer him or her some solatium for their injured feelings. 12 See Minister of Safety and Security v Sekhoto and Another [2010] ZASCA 141; 2011 (5) SA 367 (SCA) para 28. 13 Minister of Safety and Security v Seymour 2006 (6) SA 320 (SCA) para 17; Rudolph and Others v Minister of Safety and Security and Another 2009 (5) SA 94 (SCA) para 26-29. [34] In Kammies v Minister of Police and Another,14 the plaintiff was detained for three days and awarded damages in the sums of R70 000. In Rahim and Others v Minister of Home Affairs,15 this Court awarded damages ranging from R3 000 for four days unlawful detention and R20 000 for 30 days to R25 000 for 35 days’ unlawful detention. In De Klerk v Minister of Police,16 the Constitutional Court considered an amount of R300 000 for approximately seven days’ detention to be fair and reasonable. In Mahlangu and Another v Minister of Police,17 the Constitutional Court awarded damages in the amount of R500 000 for an unlawful detention that lasted eight months and ten days. Having considered all the facts of this case, including the age of the appellant, the circumstances of his arrest, the relatively short duration of the detention, I consider an amount of R70 000 to be an appropriate award of damages for his unlawful arrest and detention. I also consider the amount of R7239, which was paid as legal costs for the bail proceedings, to be fair and reasonable. [35] As regards costs, there is no reason to depart from the ordinary rule that costs follow the result. Order [36] In the result, the following order is granted: The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘1 The appeal is upheld with costs. The order of the Magistrates’ Court, Tzaneen, is set aside and replaced with the following: “(a) The first defendant is ordered to pay R70 000 as general damages to the plaintiff. (b) The first defendant is ordered to pay R7239. (c) The amounts in paragraphs (a) and (b) above shall bear interest at the prescribed rate from date of the judgment of the Magistrates’ Court, Tzaneen, being 11 January 2018 to date of payment. 14 Kammies v Minister of Police and Another [2017] ZAECPEHC 25. 15 Rahim and Others v Minister of Home Affairs [2015] 3 All SA (SCA) paras 27 and 28. 16 De Klerk v Minister of Police [2019] ZACC 32; 2019 (12) BCLR 1425; 2021 (4) SA 585 (CC). 17 Mahlangu and Another v Minister of Police [2021] ZACC 10. (d) The first defendant is ordered to pay the plaintiff’s costs of suit.”’ ________________________ M B MOLEMELA JUDGE OF APPEAL Appearances For appellant: C Zeitsman Instructed by : Johan Steyn Attorneys, Tzaneen Symington De Kok, Bloemfontein For respondents: M E Ngoetjana Instructed by: State Attorney, Polokwane State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 23 NOVEMBER 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Brits v Minister of Police & Another (759/2020) [2021] ZASCA 161 (23 November 2021) Today the Supreme Court of Appeal (SCA) handed down judgment upholding, with costs, an appeal against a decision of the Limpopo Division of the High Court, Polokwane (the high court). The issue before the SCA was whether the second respondent, Col Espach, had acted wrongfully and unlawfully when he arrested the appellant, Mr Christiaan Brits, without a warrant at the latter's business premises, a dealership in second hand goods and scrap metal, on suspicion of being complicit in the offence of possession of property suspected to be stolen. The background facts, in a nutshell, were that on the morning of 4 July 2014, the appellant received a text message (SMS) from his former employee, Mr Dube, informing him that he had copper for sale. Seeing that all business transactions were done at his business premises, the appellant sent Mr Dube an SMS informing him to take the copper to his shop. The appellant subsequently received a call from the manager of his business, Mr Mashapu, who told him that the police were at the business premises and required his presence. Upon the appellant’s arrival at the shop, Col Espach told him that Mr Mashapu had purchased stolen copper and that he (the appellant) would therefore be arrested. The appellant professed his innocence and informed Col Espach about the SMS he had received from Mr Dube that morning. He also offered to assist Col Espach to locate Mr Dube. After reading the SMS exchange, Col Espach confiscated the appellant’s cellphone and then arrested him. He was detained from about 12h00 and subsequently released on bail the following day, 5 July 2014, at about 13h00. The respondents’ pleaded case was that the appellant had been found in possession of property suspected to be stolen and that the arrest without a warrant was justified. The SCA held that the appellant had never been shown to have exercised any control over the illicit goods. It found that, contrary to the high court’s finding, the appellant had never admitted to knowing that the copper cables were stolen. It noted that Col Espach’s own version was that the bag containing the copper cables was still on the counter when he entered the shop and had not been locked away. Under those circumstances, the SCA found that the appellant had never exercised direct control over the copper cables. It was also not persuaded that Mr Mashapu ever assumed possession thereof. The SCA therefore held that Col Espach acted wrongfully and unlawfully when he arrested the appellant without a warrant. In respect of the quantum of damages, the SCA considered an amount of R70 000 to be an appropriate award of damages for the appellant’s unlawful arrest and detention. ~~~~ends~~~~

1509

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case no: 487/07 NAME OF SHIP: MV 'ORIENT STRIDE' In the matter between: ASIATIC SHIPPING SERVICES INC APPELLANT and ELGINA MARINE COMPANY LTD RESPONDENT Neutral citation: Asiatic Shipping Services Inc v Elgina Marine Company Limited (487/07) [2008] ZASCA 111 (23 September 2008) _____________________________________________________________ Coram : SCOTT, STREICHER, HEHER, COMBRINCK JJA et LEACH AJA Date of hearing : 25 AUGUST 2008 Date of delivery : 23 SEPTEMBER 2008 Corrected : Summary: The origin and meaning of the requirement in a security arrest in terms of s 5(3) of Act 105 of 1983 that there be a 'genuine and reasonable need for security'. ____________________________________________________________ ORDER ______________________________________________________________ On appeal from the High Court, Durban (Patel J sitting as court of first instance). The appeal is dismissed with costs. ______________________________________________________________ JUDGMENT ______________________________________________________________ SCOTT JA (STREICHER, HEHER, COMBRINCK JJA et LEACH AJA concurring): [1] On 24 March 2006, Elgina Marine Company Ltd (to which I shall refer as Elgina) sought and obtained ex parte in the Durban High Court an order in terms of s 5(3) of the Admiralty Jurisdiction Regulation Act 105 of 1983 ('the Act') for the arrest of the bunkers on board the MV Orient Stride and of the right to certain freight held by agents on behalf of Asiatic Shipping Services Inc (to which I shall refer as Asiatic). The purpose of the arrest was to provide security for Elgina's claims against Asiatic in arbitration proceedings in London. [2] Elgina is a company registered according to the laws of Cyprus and carries on business as a ship owner in Limassol, Cyprus. Asiatic is a Panamanian registered company and carries on the business of ships' charterers in Kuala Lumpur, Malaysia. Elgina's claims against Asiatic are for a total of US$ 404 228.47, including costs and interest, and arise out of the charter to Asiatic of the MV Columbine Express. [3] On 4 April 2006 security by way of a guarantee was furnished on behalf of Asiatic to procure the release of the property arrested and to permit the Orient Stride to continue on her voyage. The guarantee was conditional on its being of no force and effect in the event of the court ordering that Elgina was not entitled to arrest the property in question. [4] In the meantime, on 31 March 2006 Asiatic launched an application for an order setting aside the arrest. The application was opposed by Elgina and on 5 February 2007 it was dismissed by Patel J with costs. The appeal is with the leave of this court. [5] Although Elgina was the respondent in that application it was common cause that it bore the onus of justifying the arrest. (See eg Cargo Laden and Lately Laden on Board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A) at 834C-F.) In seeking to do so, it was not confined to the allegations made in its ex parte application. It was entitled to rely on all the information properly placed before the court in the subsequent application to set aside the arrest. (Weissglass NO v Savonnerie Establishment 1992 (3) SA 928 (A) at 936H.) For reasons which are no longer relevant, material correspondence and other documents came to light at a late stage and after the court a quo had given judgment. By agreement between the parties these were placed before this court and admitted as part of the record. [6] In Thalassini Avgi at 832I-833A this court set out what was required to be established by a party seeking to justify an arrest for the purpose of obtaining security. However, the court was then concerned with the Act before its amendment in 1992 which broadened the scope of s 5(3). The requirements, as modified by the amendment, are now conveniently listed in Hofmeyr Admiralty Jurisdiction Law and Practice in South Africa at 92. In the present case it was ultimately common cause, or not in dispute, that the bunkers were the property of Asiatic and that Elgina had established a prima facie case against Asiatic. The only issue that remained was whether Elgina had discharged the burden of establishing on a balance of probabilities that it had a genuine and reasonable need for security. [7] The requirement that the need for security must be 'genuine and reasonable' does not appear in the Act. The formulation is that of Didcott J in a separate but concurring judgment in Katagum Wholesale Commodities Co Ltd v The MV Paz 1984 (3) SA 261 (N) at 270A. It was subsequently endorsed by this court in Thalassini Avgi at 833A and in Bocimar NV v Kotor Overseas Shipping Ltd 1994 (2) 563 (A) at 583E-F the appropriate standard of proof was held to be a balance of probabilities. It is important to observe, however, that the requirement does not mean that in every case it must be proved that the party whose property is arrested has or will have insufficient assets to meet a judgment granted against it in the main proceedings. Indeed, more often than not the asset arrested is a ship which has a value far in excess of the claim. What, I think, must be established is a genuine and reasonable apprehension that the party whose property is arrested will not satisfy a judgment or award made in favour of the arresting party. That apprehension may be founded upon actual knowledge of the extent of the assets of the party whose property has been arrested, or, as would more likely be the case, it may be founded on factors giving rise to an inference either that the party in question will be unable to meet the judgment or that it will seek to conceal its assets or otherwise prevent the judgment from being satisfied. The circumstances may also be such, whether for geographic reasons or otherwise, that it would be extremely difficult for the successful party to enforce the judgment. Different considerations will also arise where the party seeking security already has security but arrests property to increase its security (Bocimar NV v Kotor Overseas Shipping Ltd, supra). Whether a need for security has been shown to exist or not will depend therefore upon a consideration of the particular facts of each case. [8] Against this background, I turn to the facts. They are largely common cause. By a charterparty dated 6 September 2001 made between Cyprus Maritime Co Ltd, acting according to Elgina on its behalf as owner of the Columbine Express, and Asiatic, the former chartered the vessel to the latter for a round trip of a maximum of 40 days. Clause 45 of the charterparty made provision for arbitration in London before two arbitrators, one to be appointed by each party. In pursuance of the charterparty the vessel was delivered on 9 September 2001. Redelivery was to take place at the latest on 19 October 2001. In the event the vessel was redelivered on 5 December 2001. [9] In February 2002 Elgina commenced arbitration proceedings, claiming US$ 12 916.83 in respect of the balance of hire claimed to be due and US$ 194 005.64 as damages for the late redelivery of the vessel. Elgina's points of claim were filed in July 2002 and on 20 September 2002 London solicitors, Stephenson Harwood, applied to join Pacific Inter-Link Sdn Bhd ('PIL') in the proceedings. In October 2002 a defence and counterclaim were filed in which Asiatic asserted that it was the chartering arm of PIL and that it had entered into the charterparty as agents for PIL as undisclosed principals. The relevant part of paragraph 3 of the defence reads: 'Asiatic Shipping Services Inc ('the Charterers') entered into the . . . Charterparty as agents for Pacific Inter-Link Sdn Bhd ('PIL') as undisclosed principals. The Charterers are the chartering arm of PIL and regularly enter into charterparties as agents for PIL. Both companies are operated from the same business address and have common directors. PIL paid hire due under the . . . Charterparty. PIL are, consequently, a party to the arbitration agreement through their agents, the Charterers.' Elgina subsequently filed its reply on 27 February 2003. [10] In the joinder application leave was sought for PIL to be joined for the purposes of the counterclaim only. The solicitors then acting for Elgina, Ince & Co, took up the attitude that PIL should also be joined as a co-respondent for the whole arbitration on the basis that as the undisclosed principal of Asiatic it should be a party to the arbitration reference and therefore be bound by any award made by the tribunal. They advised Stephenson Harwood, who acted for both PIL and Asiatic, that Elgina would agree to the joinder but required security for its claim. Subsequently, on 9 June 2003 Ince & Co wrote to Stephenson Harwood pointing out that the question of PIL's joinder as a co- respondent remained outstanding and requested that they confirm PIL's consent to be joined in the arbitration reference on the terms Ince & Co had proposed. In a curt response Stephenson Harwood wrote on the same day that their clients were not prepared to consent to the terms of the joinder proposed by Ince & Co. [11] On 17 June 2003 Ince & Co responded by referring to the apparent inconsistency between the allegations made in para 3 of the defence (quoted in para 9 above) and the attitude then being adopted by PIL and Asiatic. They wrote: '[It] appears to us that, on the one hand your clients are happy to wade in as Charterers in order to put forward their Counterclaim yet, on the other they are reticent to confirm that, as Charterers, they will also be bound by any Award made by the Tribunal in respect of Owners' principal claim. Your clients cannot have their cake and eat it.' They accordingly called on Stephenson Harwood to confirm inter alia that PIL considered itself as an undisclosed principal and charterer bound by the arbitration agreement contained in the charterparty and agreed to be bound by any arbitration award made by the tribunal in respect of Elgina's principal claim. [12] Stephenson Harwood responded by letter dated 23 June 2003, which reads in part: 'We refer to your fax dated 17 June 2003 in connection with whether or not PIL should be joined as a party to the current arbitration reference. In light of your client's unreasonable demands for security for the claim, Asiatic and PIL have decided not to join PIL to the arbitration. Asiatic, as agents for undisclosed principals, can bring the counterclaim themselves. The Defence and Counterclaim have already been pleaded to reflect the relationship between Asiatic and PIL and therefore only minor amendments will be needed.' Elgina's reaction was on 18 March 2004 to send to PIL a notice of appointment of an arbitrator with the object or pursuing its claims against PIL. The latter's Malaysian solicitors, Sativale Mathew Arun, responded in a letter dated 23 April 2004, in which they declined to appoint an arbitrator, saying: 'It is our client's stand that there is no arbitration agreement between your client and our client.' [13] At about this time and, no doubt, in the light of what had transpired, Elgina's P and I club advised that it was no longer prepared to finance the prosecution of the claim in the absence of security being put up by Asiatic as there appeared little prospect of Elgina otherwise recovering the amount of any award that may be made in its favour. In May 2004 Elgina decided not to continue incurring the costs of employing Ince & Co but to employ its own legal staff. It accordingly terminated that firm's mandate and paid its fees. This ultimately led to a misunderstanding which in turn became an issue which gained much prominence in the affidavits exchanged between the parties. In short, on 5 February 2005 Ince & Co advised one of the arbitrators, Mr George Lugg, that they were no longer acting for Elgina which had passed the matter on to Cyprus Maritime Co Ltd, its managers, for future handling. In June 2005, when clarification as to the status of the arbitration was sought by the other arbitrator, Mr Robert Gaisford, Ince & Co mistakenly advised on 9 June 2005 that the matter was closed. As a consequence of this Asiatic sought to set aside the arrest on the grounds that Elgina had failed to disclose that the arbitration was no longer extant and for this reason alone it did not have a prima facie case against Asiatic. In the light of the explanation put up by Elgina the point was abandoned by Asiatic when the matter was argued in the court a quo. I should add that subsequently on 18 June 2007 a declaratory award was made by the arbitrators in which they ruled that the reference had not been terminated and that the tribunal accordingly remained extant. [14] In the meantime, in January 2005 Elgina had decided to engage another firm of solicitors, Davies, Johnson & Company, to act on its behalf. In the absence of security, however, it was considered that no purpose would be served by taking active steps to pursue the arbitration. Mr Johnson of that firm did some investigation to ascertain the activities of Asiatic. This ultimately resulted in the arrest which forms the subject matter of this appeal. [15] It is clear from the aforegoing that PIL and Asiatic are closely associated companies. The latter is the 'chartering arm' of the former. Both have the same business address and they have common directors. Asiatic asserted in its defence that it was merely the agent of PIL and that PIL was accordingly a party to the arbitration agreement. Yet PIL sought to be joined in the arbitration for the purposes of the counterclaim only. When it was pointed out that as a party to the arbitration agreement it would be liable to Elgina in the event of the latter succeeding in its claim, it abandoned its application to be joined and, notwithstanding the stance adopted in the defence that it was an undisclosed principal and hence a party to the arbitration agreement, distanced itself from the arbitration. It was clearly anxious to ensure that in the event of an adverse award, that award would be made against Asiatic and not against it. The most likely inference that arises is that PIL holds the assets of the enterprise and not Asiatic. The inference is supported by the assertion in the defence that PIL, and not Asiatic, paid the hire under the charterparty. It is further supported by the fact that the security put up on 4 April 2006 emanated from PIL and not Asiatic. [16] In the application to set aside the arrest Asiatic alleged simply that it had 'more than sufficient assets to satisfy any judgment'. In its answer, Elgina observed that no details of those assets were given. Having regard to the nature of the application and PIL's change of stance, one would have expected that if Asiatic had assets, it would in reply at least have given some indication of their nature and extent. Had it done so, its response may well have put paid to the application for security. But it declined to do so. Instead, it contended that its financial standing was 'now a moot point because [Asiatic] has in fact secured [Elgina's] claim'. This evasive response was in itself sufficient to cause concern to a reasonable person in the position of Elgina, particularly when regard is had to the fact that it was PIL and not Asiatic that had provided the security. [17] In all the circumstances Elgina, in my view, succeeded in establishing the existence of a reasonable apprehension that Asiatic would not satisfy an award made against it in Elgina's favour. It accordingly discharged the burden of establishing that it had a genuine and reasonable need for security, and the appeal must therefore fail. [18] The appeal is dismissed with costs. _____________ D G SCOTT JUDGE OF APPEAL Appearances: For Appellant: D Gordon SC Instructed by: Deneys Reitz Inc Durban Webbers Bloemfontein For Respondent: D J Shaw QC Instructed by : Shepstone & Wylie Durban Israel Sackstein Matsepe Inc Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL NAME OF SHIP: MV 'ORIENT STRIDE' ASIATIC SHIPPING SERVICES INC AND ELGINA MARINE COMPANY LTD CASE MP 487/07 From : The Registrar, Supreme Court of Appeal Date: 23 September 2008 Status: Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal today dismissed an appeal against a decision of the Durban High Court refusing to set aside the arrest of bunkers aboard the MV Orient Stride to provide security for a claim subject to arbitration proceedings in London. The arrest had been obtained at the instance of a Cypriot company which alleged that the owner of the bunkers had breached a charter party in terms of which it had hired the MV Columbine Express for a 40 day voyage but had redelivered the vessel almost 6 weeks late. The issue was whether the arresting party, Elgina Marine Company Ltd of Limassol, Cyprus, had discharged the onus of proving that it had a genuine and reasonable need for security. The Supreme Court of Appeal held that what Elgina was required to prove was no more than that it had a reasonable apprehension that the owner of the bunkers, a Malaysian company, would not satisfy an award made in favour of the arresting party. The court held that on the evidence Elgina had discharged the onus of prove - - - ends - - -

2983

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 20339/14 In the matter between: LESLEY NIEUWENHUIZEN APPELLANT and THE STATE RESPONDENT Neutral citation: Nieuwenhuizen v S (20339/14) [2015] ZASCA 90 (29 May 2015) Coram: Shongwe, Leach JJA and Mayat AJA Heard: 14 May 2015 Delivered: 29 May 2015 Summary: Criminal Procedure – Sentence – convicted of six counts of fraud to the tune of R130 429.46 – whether sentence is shockingly inappropriate – court of appeal considers whether the trial court and court a quo materially misdirected themselves – each case considered on its own merits – no misdirection found – sentence is not strikingly or disturbingly disproportionate – this court not justified to interfere. ORDER ________________________________________________________________ On appeal from: The Northern Cape Division of the High Court, Kimberley (Jordaan and Hendricks JJ sitting as court of appeal): The appeal is dismissed. JUDGMENT ________________________________________________________________ Shongwe JA (Mayat AJA concurring) [1] This is an appeal against sentence only. The appellant was convicted of six counts of fraud and sentenced to six years‟ imprisonment, two years of which were suspended for five years on certain conditions. Her application for leave to appeal against the conviction and sentence was refused. She petitioned the Judge President of the Northern Cape High Court for leave against the conviction and sentence. Leave was accordingly granted to the court a quo. However, the appeal was dismissed; likewise her application for a further leave to appeal was unsuccessful. Leave to appeal against sentence only was granted by this court. [2] She pleaded not guilty on 31 fraud charges but was convicted on counts 12 to 17 which amounted to the value of R130 429. 46 and was acquitted on the other charges. She steadfastly denied the charges against her. The trial court as well as the court a quo were satisfied of her guilt. The court a quo was also satisfied that the trial court did not materially misdirect itself on the sentence imposed. It concluded that had it been in the position of the trial court it would have imposed a lighter sentence, however it was not convinced that the sentence it would have imposed would have differed materially from the one imposed to the extent of declaring the sentence imposed shockingly inappropriate. Hence the appeal against conviction and sentence were dismissed. [3] The facts are briefly that the appellant approached the complainant Mr Dawid Hermanus Jansen van Vuuren, an attorney, to do debt collection work for her. She claimed to be collecting debts from a number of government employees. As a result she would receive cheques from some government departments, in particular, the Department of Finance and Economic Affairs. She claimed these cheques would be deposited in the complainant‟s trust account and that the complainant would in turn give her cash. She did not show the complainant the cheques which she had received and the cheques were never deposited in the complainant‟s trust account as promised. For some reason the complainant believed her and he gave her various amounts of cash in anticipation that she would deposit the cheques in his trust account. [4] At some stage she represented to the complainant that she was expecting a sum of up to R700 000.00 in debt collections. They were seen together at Absa Bank where they conducted various business/financial transactions. She also transferred money from the complainant‟s trust account into her personal account or an account named “New Finance”, which was seemingly her trading name. She also transferred money from the complainant‟s trust account on her own, having forged the complainant‟s signature. During her trial she did not dispute the allegations of transferring money from the complainant‟s trust account into her personal account but averred that it was with the complainant‟s consent. [5] It is settled law that an appeal court will not interfere on appeal with a sentence imposed, unless the trial court materially misdirected itself or the sentence is shockingly inappropriate. A trial court exercises its judicial discretion depending on the facts of each particular case. Each and every case must be judged on its own merits. Should the appeal court find that the discretion was not judicially exercised it will be at large to interfere. (See S v Mitchele & another 2010 (1) SACR 131 (SCA). In S v De Jager & another 1965 (2) SA 616 (A) at 628H-629 Holmes JA observed that: „It would not appear to be sufficiently recognised that a Court of appeal does not have a general discretion to ameliorate the sentences of trial Courts. The matter is governed by principle. It is the trial Court which has the discretion, and a Court of appeal cannot interfere unless the discretion was not judicially exercised, that is to say unless the sentence is vitiated by irregularity or misdirection or is so severe that no reasonable court could have imposed it. In this latter regard an accepted test is whether the sentence induces a sense of shock, that is to say if there is a striking disparity between the sentence passed and that which the Court of appeal would have imposed. It should therefore be recognised that appellate jurisdiction to interfere with punishment is not discretionary but, on the contrary, is very limited.‟ [6] An appeal court may also consider the trial court‟s discretion to have been unreasonably exercised if the disparity between the trial court‟s sentence and that which the appellate court would have imposed is „strikingly‟ or „startlingly‟ or „disturbingly‟ inappropriate. However, if it is not so inappropriate the appellate court will not be justified to interfere with the sentence. (S v Malgas 2001 (1) SACR 469 para 12. Marais JA held: „A court exercising appellate jurisdiction cannot, in the absence of material misdirection by the trial court, approach the question of sentence as if it were the trial court and then substitute the sentence arrived at by it simply because it prefers it. To do so would be to usurp the sentencing discretion of the trial court. Where material misdirection by the trial court vitiates its exercise of that discretion, an appellate Court is of course entitled to consider the question of sentence afresh. In doing so, it assesses sentence as if it were a court of first instance and the sentence imposed by the trial court has no relevance. As it is said, an appellate Court is at large. However, even in the absence of material misdirection, an appellate court may yet be justified in interfering with the sentence imposed by the trial court. It may do so when the disparity between the sentence of the trial court and the sentence which the appellate Court would have imposed had it been the trial court is so marked that it can properly be described as 'shocking', 'startling' or 'disturbingly inappropriate'. [7] The appellant argued that the sentence of six years‟ imprisonment, two years of which is suspended on certain conditions is shockingly inappropriate and is very harsh. She contended that a custodial sentence was not the only option. She contended further that the trial court as well as the court a quo misdirected themselves by over-emphasising the seriousness of the offences. She argued that a wholly suspended sentence alternatively a non-custodial sentence would be appropriate in the circumstances. For example a sentence which would include an element of correctional supervision. [8] It was stated that the appellant was a caregiver of a three year old child – therefore if she went to prison, the child‟s interests would be jeopardised. From the evidence before us it is clear that the appellant is not the primary care giver of this child. The mother of the child is alive and well and employed. In my view the appellant was helping out in looking after the child. The child is now about seven years old – circumstances may have changed since then. A custodial sentence would not prejudice the interest of the child and is the only appropriate sentence in the circumstances. The present case is distinguishable from S v M (Centre for Child Law as Amicus Curiae) 2007 (2) SACR 539 (CC) where the accused person was the biological mother of the minor children. [9] On the other hand the State contended that the offences are of a serious nature and need to be treated with the seriousness they deserve. It argued further that an aggravating factor was the fact that the offences were committed over a period of about three months. That even after the complainant had warned her that he would not pay her any further cash until the other cheques were paid into his trust account – she continued performing more unlawful transfers. It was argued on behalf of the State that the offences were well planned and meticulously executed. Counsel for the State argued further that the appellant expressed no contrition for her criminal wrong-doing – therefore she could not be heard to plead rehabilitation as „any hope of rehabilitation becomes illusory and thus an unrealistic expectation…‟ (See S v Dyantyi 2011 (1) SACR 540 (ECG) at 552C-D) [10] In considering an appropriate sentence, the trial court did consider her personal circumstances – she was 42 years old at the time of the commission of the offence and 49 years old at the time of her sentencing – she was divorced – although still living with her ex-husband. She was unemployed but her two self- supporting children were financially assisting her on a monthly basis. She was fostering a three year old child even though she was not the primary care-giver. She is a first offender. First offenders are not by law entitled to non-custodial sentences. The purpose and objectives of punishment have been repeatedly mentioned by our courts as deterrence, rehabilitation and retribution. These objectives must be balanced and individualized. [11] The appellant has a constitutional right to remain silent (s 35)(1)(a)) and cannot be compelled to give evidence. However, it is crucial when considering an appropriate sentence for the court to know exactly what she wanted to do with the money and what she actually did with it. Very little, if anything, is known of the motive because she maintains her innocence. It is significant to note that she meticulously planned this scheme to syphon money from the trust account of the complainant, with confidence tricks. She did not stop even after she had been warned. No element of remorse is displayed at all. [12] It is argued that some of the money has been returned. However, that, in my view, is no excuse. Yes, it may mitigate the damage but the damage had already been done. Some of the money was paid back by Absa Bank and not by the appellant. Marias JA in S v Sadler 2000 (1) SACR 331 (SCA) at 335G-336B decried the so called „white collar‟ crime and called for stiffer sentences to discourage would be perpetrators. Fraud, even if it is not a violent crime, remains a serious offence which does not only affect the particular complainant but also affects the growth of the country‟s economy. Insurance premiums are soaring, security measures must be put in place to prevent fraudsters from benefiting without producing. What is clear to me is that the appellant embarked on this criminal path solely for personal financial gain which, to me translates to avarice and nothing less. [13] It is a healthy practice from a jurisprudential point of view to look at other cases similar to this one, however, it is simply for guidance and not as authority to impose the same sentences imposed in those cases. Each case must be considered on its own merits. [14] The sentence imposed is, in my view appropriate. I am unable to find any material misdirection on the part of the trial court as well as the court a quo to justify interference. The disparity between the sentence which I would have imposed, and the one imposed is not striking nor is it startling. Therefore the appeal against sentence falls to be dismissed. [15] The appeal is dismissed. _______________________ J B Z Shongwe Judge of Appeal LEACH JA: [16] The appellant was convicted on six counts of fraud that resulted in the misappropriation by her of a total sum of R130 429.46 from the trust account of an attorney, Mr Janse van Vuuren (the complainant), and was sentenced to six years‟ imprisonment of which a period of two years was conditionally suspended. I have read the judgment of my learned colleague Shongwe JA, but find myself unable to agree with his conclusion that the appeal against this sentence should be dismissed. In my view the sentence imposed on the appellant was far too severe, justifying interference by this court on appeal. [17] The appellant, who traded as a debt collector under the name of New Finance, had approached the complainant for his assistance, informing him that she had a number of debtors ─ from whom she collected money on a monthly basis ─ who were employed by a number of government departments. These departments, so she alleged, withheld certain amounts from the salaries of these debtors that were then paid to her to redistribute to creditors. However, so she stated, government policy had changed and the departments were no longer willing to pay directly to a private person as they had done in the past, but that they would pay an attorney. Her proposal was that these payments would be paid to the complainant who, in turn, would then effect payment of the amounts to her to distribute amongst the various creditors. As an inducement, she told the complainant that there was a sum of approximately R700 000 that would be collected in this way. [18] The complainant agreed to the proposal and, shortly thereafter, the appellant produced a state cheque made out in favour of „Attorney ─ New Finance‟ in the amount of some R14 000. On seeing this, the complainant told the appellant that the cheque could not be paid into his account because it was not made out to him and asked her to take the necessary steps to ensure either that a cheque that had been correctly made out was procured or that the amount was paid electronically into his trust account at Absa Bank. A few weeks later, the appellant presented him with two further cheques, one in the sum of approximately R54 000 and the other for some R39 500. As was the case with the first cheque, both were drawn in favour of „Attorney ─ New Finance‟. Again he informed the appellant to take the necessary steps to have them re- issued or to arrange for the amounts to be electronically deposited into his trust account. [19] All three of these cheques were false. Precisely how they came into the possession of the appellant and drawn as they were, was never explained. However, despite the fact that they were not paid into his account and that he never received the funds reflected thereon, the complainant succumbed to the appellant‟s entreaty to make funds over to her. He trusted her and, on the strength of the three cheques she had shown to him, he paid her amounts totalling approximately R107 500 out of his trust account as an advance, so to speak, in respect of the moneys that he was sure she would pay him in due course. [20] This involved him, on one occasion, accompanying the appellant to the Absa Bank branch where both he and the appellant held their accounts and where he effected a transfer of funds from his trust account into her account simply by way of completing a transfer slip. On a subsequent occasion when an amount was incorrectly transferred to another account, he telephoned the bank and made arrangements for the appellant to visit the branch in order to effect a transfer into her account. [21] These payments were made by the complainant during or about June 2004. Early in July 2004, the complainant told the appellant that he would not be able to make further payments to her until she had placed him in funds. However, on 12 July 2004, he was contacted by a bank official who informed him that the appellant had attempted to effect a further transfer of which he was not aware. He instructed the bank not to do so and, on proceeding to the bank and making further enquiries, ascertained that on a number of other occasions commencing on 3 July 2004, the appellant had been able to transfer funds in amounts ranging from R5000 to R8000 out of his trust account into her own account. This had occurred as she had misrepresented to the bank that she had been authorised by him to do so, the bank official concerned having been under the impression that she was in his employ. [22] The transfer of funds from the complainant‟s trust account, both with and without the complainant‟s knowledge, led to the appellant‟s conviction on six counts of fraud. It is accepted that the total sum of the amounts paid out of the complainant‟s trust account into the account of the appellant was R130 429.46. The bank repaid R23 000 to the appellant in respect of the transfers made without his authority and the complainant collected payments made by debtors to his office for the account of the appellant that totalled some R65 000. In addition another firm of attorneys collected R21 000 in respect of similar payments and was holding that sum in trust on the complainant‟s behalf. However, there is no merit in the argument advanced on behalf of the appellant that these amounts should be deducted from the actual loss for purposes of the consideration of sentence. The appellant herself has never repaid any of the amounts she embezzled. The bank repaid what it had to, but it suffered a loss in that amount. The other amounts collected were not due to the complainant but were for distribution amongst creditors. The fact that the actual loss was split between the complainant and any other persons affected by her fraudulent deeds is irrelevant. [23] The appellant was 42 years of age at the time she committed the offences and, by the time sentence was imposed upon her in the trial court, had reached the age of 49 years. She was at that stage divorced, although she was living in a permanent relationship with her former husband. Her two adult children were self-supporting although the appellant and her partner were caring for a young child on a daily basis. The appellant is a first offender, and the fact that she had reached middle age without having previously offended is, in my view, a material factor to take into account in the assessment of sentence. And although her offences were obviously planned, they were committed over a relatively short period and were obviously made easy by the gullibility of the complainant whose laxity in regard to his professional obligations relating to his trust account helped to facilitate the commission of the frauds. [24] In considering what is an appropriate sentence in the light of the facts and circumstances outlined above, it is of course true that „white-collar‟ crime such as fraud, motivated by personal greed, has a „corrosive impact‟ upon society1 and is by its very nature a serious matter. This court has recognised that fraud 1 Compare S v Sadler 2000 (1) SACR 331 (SCA); (57/99) [2000] ZASCA 13 (28 March 2000) para 13. is, unfortunately, endemic in our society at present and that there is a need to impose appropriate sentences with a deterrent effect in such cases.2 That being said, however, it is also well established that although retribution and deterrence are proper purposes of punishment, they must not be afforded undue weight and that an offender being sentenced should not be sacrificed on the altar of deterrence.3 Thus an „insensitively censorious attitude is to be avoided‟.4 As Corbett JA stated in Rabie: „A judicial officer should not . . . strive after severity; nor on the other hand, surrender to misplaced pity. While not flinching from firmness, where firmness is called for, he should approach his task with a humane and compassionate understanding of human frailties and the pressures of society which contribute to criminality.‟5 [25] The court a quo, in considering the appellant‟s appeal, remarked that the sentence of six years‟ imprisonment, two years conditionally suspended, was a stiff sentence and on the heavy side and that, had it sat as a court of first instance, it would have imposed a somewhat lighter sentence. However it concluded that it could not find that the sentence was so heavy that it could interfere. It is on this issue that, in my respectful view, the court a quo erred. [26] Although comparisons are often odious, and each case must be decided on its own particular facts and circumstances, consideration of other reported decisions is illuminating. Those of particular significance include the following: S v Blank 1995 (1) SACR 62 (A); (22/93) [1994] ZASCA 115 (15 September 1994): In this case a stockbroker embarked on a fraudulent share purchase scheme. His conviction involved 48 fraudulent transactions committed over 17 months leading to profits of R9,75 million of which he received approximately 2 S v Engelbrecht 2011 (2) SACR 540 (SCA); (446/10) [2011] ZASCA 68 (17 May 2011) para 31. 3 S v Muller & another 2012 (2) SACR 545 (SCA); (855/10) [2011] ZASCA 151 (27 September 2011) para 9. 4 Per Holmes JA in S v Rabie 1975 (4) SA 855 (A) at 862C-D. 5 Rabie at 866A-C. R1,5 million. An appeal against a sentence of 8 years‟ imprisonment was dismissed by this court. S v Flanagan 1995 (1) SACR 13 (A); (583/92) [1994] ZASCA 125 (22 September 1994): In this case the appellant, a 31 year old bank clerk, was sentenced to seven years‟ imprisonment, of which two were suspended, for having fraudulently transferred R8,5 million from one account to another while acting under the influence of her husband, although no actual loss was suffered. This court set aside her sentence and imposed a sentence of four years‟ imprisonment subject to the provisions of s 276(1)(i) of the Criminal Procedure Act 51 of 1977. S v Nagrani 1997 (2) SACR 98 (W): The appellant, a married first offender with two children, was convicted on 21 counts of fraud arising from her having lodged false VAT claims involving millions of rand. She was sentenced to eight years‟ imprisonment, two years thereof being conditionally suspended. The sentence was confirmed on appeal. S v Kwatsha 2004 (2) SACR 564 (E): The appellant, a 29 year old unmarried father of a single child employed by the Provincial Government, was charged and convicted of the theft of five government cheques and a conspiracy to commit fraud by using the cheques to draw a sum of R2 million. A sentence of seven years‟ imprisonment, two of which were suspended on certain conditions, was confirmed on appeal. S v Michele & another 2010 (1) SACR 131 (SCA); (477/08 [2009] ZASCA 116 (25 September 2009: The appellant defrauded a life insurance company by submitting a false claim stating that the person whose life was insured had died in a motor vehicle accident. The insurer immediately paid out funeral cover of R20 000 but subsequently discovered that the claim was false and refused to pay out the insured balance of R357 520 although the potential prejudice had been substantial. A sentence of seven years‟ imprisonment, two years conditionally suspended, was reduced on appeal, this court finding that a sentence of no more than five years‟ imprisonment, two years suspended, should have been imposed and that there was sufficient disparity between that sentence and the sentence imposed to interfere. S v Janssen 2010 (1) SACR 237 (ECG); (CA&R 195/2006) [2009] ZAECGHC 58 (2 September 2009): The appellant had been convicted on 144 counts of fraud involving an amount in excess of R1,5 million, an offence which attracted a prescribed minimum sentence of 15 years‟ imprisonment. An appeal against a sentence of eight years‟ imprisonment was dismissed. S v Engelbrecht 2011 (2) SACR 540 (SCA); (446/10) [2011] ZASCA 68 (17 May 2011): The appellant had falsified documents in respect of the sale of motor vehicles so that the transactions would be zero rated for VAT as exports when in fact the vehicles were sold locally. The appellant was convicted of 157 counts of fraud which had resulted in the South African Revenue Service being defrauded of approximately R1,6 million. As in the case of the present appellant, he was sentenced to six years‟ imprisonment, two years of which were conditionally suspended. This was confirmed by this court. [27] As I have said, each case must be considered in the light of its own particular facts and circumstances, and although the imposition of sentence is not an exact science, involving as it does the exercise of a judicial discretion, previous decisions have a not inconsiderable degree of relevance to show trends and judicial attitudes. Bearing this in mind, the cases referred to above illustrate that a sentence imposed of six years‟ imprisonment, two of which are conditionally suspended, falls within a range generally regarded as being appropriate for white-collar crimes far more serious than those committed by the appellant in the present case. I do not wish to trivialise the appellant‟s crimes. By their very nature they were severe and must be treated as such. However, the amount involved, while not insubstantial, does not result in this case falling within the echelon of those cases in which a sentence as substantial as six years‟ imprisonment, albeit partially suspended, is as a rule generally imposed. [28] Indeed, had there been any indication of remorse on the part of the appellant, this is a case in which, in my view, a period of imprisonment subject to the provisions of s 276(1)(i) of the Criminal Procedure Act may well have been appropriate. Unfortunately there was no such indication on the part of the appellant. She persisted in an abjectly false defence, not only in the trial court but on appeal to the court a quo. Whether or not this was as a result of misleading legal advice is neither here nor there: the fact remains that she has not recognised the criminality of her actions and shown no contrition. Accordingly, in the light of the other circumstances that I have mentioned, a period of direct imprisonment seems to be called for, but not a sentence as severe as that imposed by the trial court. [29] There is one further feature to be considered. The offences were committed in 2004. Criminal proceedings against the appellant only commenced some two years later, the appellant having made her first appearance in court on 31 March 2006. The matter was then postponed on several occasions until, on 1 August 2006, the charge was eventually put to her and the trial commenced. Despite the dispute being of a narrow ambit, the trial proceeded at the pace of a snail and dragged on interminably. During the course of more than four years it was postponed on numerous occasions until eventually, on 15 October 2010, the appellant was found guilty. Thereafter it took until 11 February 2011, a date almost five years after the charges were initially instituted against her and almost seven years after the offences were committed, for the appellant to be sentenced. As this court has previously observed,6 it would be „callous to leave out of account the mental anguish the 6 Compare S v Roberts 2000 (2) SACR at 522 (SCA) para 22 and S v Michele at 135 para 13. [appellant] must have endured‟ during the extended period after criminal proceedings were instituted against her until sentence was imposed. [30] Bearing all the aforegoing in mind, I am of the view that a sentence of no more than three years‟ imprisonment, one year of which is conditionally suspended on appropriate conditions, is the sentence which should have been imposed upon the appellant. There is sufficient disparity between such a sentence and that imposed on the appellant to render interference on appeal both justified and necessary. [31] I would therefore allow the appeal, set aside the order of the court a quo and replace it with the following: „1 The appeal against conviction is dismissed. 2 The appeal against sentence is upheld. The sentence imposed by the magistrate is set aside and is substituted with the following: “Three years‟ imprisonment, one year of which is suspended for five years on condition that the accused is not convicted of fraud or theft committed during the period of suspension and in respect of which she is sentenced to imprisonment without the option of a fine.”‟ _____________________ L E Leach Judge of Appeal Appearances For the Appellant: R van der Merwe Instructed by: Haarhoffs Inc., Kimberley; Phatshoane Henney Inc., Bloemfontein. For the Respondent: A H van Heerden Instructed by: The Director of Public Prosecutions, Kimberley; The Director of Public Prosecutions, Bloemfontein.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 May 2015 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * LESLEY NIEUWENHUIZEN V THE STATE The SCA today dismissed the appeal against sentence in the case of Nieuwenhuizen v The State. Ms Nieuwenhuizen had been convicted by the magistrates’ court of 6 counts of fraud and sentenced to 6 years imprisonment’, 2 years of which were suspended on certain conditions. She unsuccessfully appealed to the Northern Cape Division of the High Court (Kimberley). She further appealed to this court with leave of this court. The appellant convinced Attorney Dawid Jansen van Vuuren to assist her in her debt collection business. She was collecting money from government employees who owed certain companies. She received certain cheques which she should have deposited in the attorneys trust account but failed to do so. Mr Jansen van Vuuren advanced her with the equivalent amount of the cheques hoping that she would in turn deposit the cheques. She even transferred funds from the complainant’s (Dawid Jansen van Vuuren) trust account into her trading account without the complainant’s consent. She did this within a period of about three months. The offences were carefully planned. It is settled law that for an appeal court to interfere with the sentence imposed – the court a quo must have materially misdirected itself or the disparity between the sentence which the appeal court would have imposed and the sentence imposed by the court a quo is strikingly or startlingly disproportionate. This court found that she failed to demonstrate any remorse. It further found that a custodial sentence is the only one appropriate in these circumstances.

3347

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 394/2019 In the matter between: FIRSTRAND BANK LIMITED APPELLANT And MINETTA CECILIA PETRONELLA FIRST RESPONDENT MCLACHLAN ROSHEN MAHARAJ SECOND RESPONDENT KOMARIE MAHARAJ THIRD RESPONDENT ABSA BANK LIMITED FOURTH RESPONDENT STANDARD BANK OF SOUTH AFRICA FIFTH RESPONDENT WESBANK LIMITED SIXTH RESPONDENT Neutral citation: FirstRand Bank Ltd v McLachlan and Others (394/2019) [2020] ZASCA 31 (01 April 2020) Coram: SALDULKER, SWAIN, SCHIPPERS and MBATHA JJA and EKSTEEN AJA Heard: 12 March 2020 Delivered: 01 April 2020 Summary: National Credit Act 34 of 2005 (NCA) – debt review – rescission of order for debt review granted in the magistrate’s court – monthly instalment insufficient to cover interest – debt review order void – rescission order not appealable. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Tsoka, Windell JJ and Reyneke AJ, sitting as court of appeal): The appeal is upheld with costs, including the costs of two counsel. The order of the court below is set aside and replaced with the following order: ‘The appeal is dismissed with costs.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ Mbatha JA (Saldulker, Swain and Schippers JJA and Eksteen AJA concurring) [1] This appeal raises two issues: firstly, the powers of the magistrate’s court in making a debt review order in terms of s 86(7)(c)(ii) of the National Credit Act 34 of 2005 (the NCA); and secondly, whether the rescission of a debt review order, by virtue of it being null and void, is appealable. [2] On 25 November 2011 the magistrate’s court, Westonaria (the magistrate’s court) granted a debt review order in terms of s 86(7)(c)(ii) in favour of the second and third respondents (the respondents), Roshen and Komarie Maharaj. The respondents complied with the order until June 2017, when the appellant (the bank) brought an application for the rescission of the order in terms of rule 49(8) of the Magistrates’ Court Rules on the ground that it was void ab origine. The magistrate upheld the application and rescinded the debt review order. In an appeal to the Gauteng Division of the High Court, Johannesburg, the order of the magistrate was set aside. The present appeal, with the special leave of this Court, is against the order of the high court. [3] The facts giving rise to the appeal are common cause. In or about September 2006 the bank and the respondents entered into a written Grant of Loan Agreement (the Loan Agreement), in terms of which the bank advanced an amount of R2.1 million to the respondents to purchase an immovable property secured by a mortgage bond. The monthly instalment was fixed at R20 335,07, inclusive of 10,05 per cent interest per annum calculated daily and compounded monthly. The interest was variable at the instance of the bank. [4] In 2010 the respondents found themselves in a financial predicament as a result of which they lodged an application for debt review in terms of s 86 of the NCA with the first respondent (the debt counsellor), who prepared a debt repayment proposal. The proposal was duly referred to a magistrate (the debt review court) in terms of s 86(8)(b) of the NCA. A debt review order was subsequently granted as set out earlier. In granting the debt review order the debt review court did not, however, adopt the repayment proposal submitted by the debt counsellor. [5] In terms of the order, the respondents were declared to be over-indebted and their obligations were re-arranged. With regard to the Loan Agreement, the monthly instalments were reduced to R8 185,50 per month and the period was extended to 261 months. There was some dispute as to whether the debt review court also varied the interest rate, which was fixed at 12,55 per cent for the duration of the repayment period and, if so, whether the bank had agreed to the rates. Both the magistrate and the high court found, however, that the interest payable immediately prior to the debt review order had been fixed in terms of the Loan Agreement at 12,55 per cent and that there had accordingly been no change in the interest rate. This issue is not decisive in the present appeal and I shall accept the finding of the courts below for purposes of this judgment. [6] The effect of the debt review order, however, was that the monthly instalment would not even cover the monthly interest accruing on the outstanding balance. A calculation of interest alone on the balance due on 25 November 2007, calculated at 12,55 per cent, would have required a repayment of almost R22 000 per month, substantially more than the R8 185,50 which was ordered by the court. In order to achieve a payment of R8 185, 50 per month as stipulated in the debt review order, the interest rate would have to be reduced to 4,5 per cent per annum. In the result, it was factually impossible for the respondent to service the interest on a monthly basis, let alone the capital amount owed. The consequence of this order was that the debt owing under the Loan Agreement has grown to more than R3 million since the granting of the debt review order. Self-evidently, at the conclusion of the repayment term a substantial amount will remain due. [7] In October 2016 the Western Cape Division of the High Court delivered judgment in Nedbank Limited v Jones and Others [2016] ZAWCHC 139; 2017 (2) SA 473 (WCC). In Jones the following order was made: ‘A. A magistrate's court hearing a matter in terms of s 87(1) of the National Credit Act 34 of 2005, does not enjoy jurisdiction to vary (by reduction or otherwise) a contractually agreed interest rate determined by a credit agreement, and any order containing such a provision is null and void. B. A re-arrangement proposal in terms of s 86(7)(c) of the National Credit Act that contemplates a monthly instalment which is less than the monthly interest which accrues on the outstanding balance does not meet the purposes of the National Credit Act. A re- arrangement order incorporating such a proposal is ultra vires the National Credit Act and the magistrate's court has no jurisdiction to grant such an order.’ The judgment in Jones prompted the application for rescission which was founded firmly on the conclusions in Jones.1 The appellant contended that it first became aware of the nullity of the debt review order when the judgment in Jones was delivered and that the application for rescission was therefore brought within the one year period provided for in rule 49(8). This contention was upheld in the high court and is not disputed in the present appeal. [8] It is accordingly necessary first to consider the merits of the conclusion in Jones. This requires an interpretation of the NCA. The principles which find application to the interpretation of statutes are well settled and were summarised in Natal Joint Municipal Pension Fund v Endumeni Municipality.2 In the case of the NCA, s 2(1) enjoins a court when interpreting the NCA to do so in a manner that gives effect to the purpose of the Act as set out in s 3 thereof. [9] The NCA was promulgated against the background of a history of inequality in bargaining power which often resulted in large credit providers imposing their will, unreasonably, upon vulnerable credit consumers. The purpose of the NCA, broadly speaking, is therefore to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry.3 It provides for the protection of credit consumers against 1 See also Nedbank Limited v Norris and Others [2016] ZAECPEHC 5; 2016 (3) SA 568 (ECP). 2 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA 262 (SCA); 2012 (4) SA 593 (SCA) at 603F-604B this Court stated: ‘Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed; and the material known to those responsible for its production.’ See also Theron v Premier, Western Cape [2019] ZASCA 6 para 19-21. 3 Section 3 of the NCA provides: ‘Purpose of Act The purposes of this Act are to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers, by – (a) promoting the development of a credit market that is accessible to all South Africans, and in particular to those who have historically been unable to access credit under sustainable market conditions; (b) ensuring consistent treatment of different credit products and different credit providers; the historical abuses by credit providers in a manner articulated in ss 3(a)-(i). For purposes of the present inquiry three of these protections are of particular significance. Section 3(d) is directed at promoting equity in the credit market by balancing the respective rights and responsibilities of credit providers and consumers. Sections 3(g) and (i) are directed pertinently at the protection of over- indebted consumers. Section 3(g) seeks to protect over-indebted consumers by providing mechanisms for resolving their over-indebtedness ‘based on the principle of satisfaction by the consumer of all responsible financial obligations’. In similar vein s 3(i) seeks to protect consumers by ‘providing for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places priority on the eventual satisfaction of all responsible consumer obligations under the credit agreement’. [10] Sections 86-88 set out the procedure for the debt review of a consumer who is found to be over-indebted as envisaged in s 79 of the NCA.4 Where a debt (c) promoting responsibility in the credit market by – (i) encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers; and (ii) discouraging reckless credit granting by credit providers and contractual default by consumers; (d) promoting equity in the credit market by balancing the respective rights and responsibilities of credit providers and consumers; (e) addressing and correcting imbalances in negotiating power between consumers and credit providers by – (i) providing consumers with education about credit and consumer rights; (ii) providing consumers with adequate disclosure of standardised information in order to make informed choices; and (iii) providing consumers with protection from deception, and from unfair or fraudulent conduct by credit providers and credit bureaux; (f) improving consumer credit information and reporting and regulation of credit bureaux; (g) addressing and preventing over-indebtedness of consumers, and providing mechanisms for resolving over- indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations; (h) providing for a consistent and accessible system of consensual resolution of disputes arising from credit agreements; and (i) providing for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places priority on the eventual satisfaction of all responsible consumer obligations under credit agreements.’ 4 Section 79(1) provides: ‘Over-indebtedness (1) A consumer is over-indebted if the preponderance of available information at the time a determination is made indicates that the particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, having regard to that consumer's – (a) financial means, prospects and obligations; and (b) probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer's history of debt repayment. counsellor has found the consumer to be over-indebted they may issue a proposal recommending that the magistrate’s court make an order: ‘(ii) that one or more of the consumer’s obligations be re-arranged by – (aa) extending the period of the agreement and reducing the amount of each payment due accordingly; (bb) postponing during a specified period the dates on which payments are due under the agreement; (cc) extending the period of the agreement and postponing during a specified period the dates on which payments are due under the agreement; or (dd) . . . .’5 A debt review court may, pursuant to such a proposal, ‘make an order re- arranging the consumer’s obligations in any manner contemplated in s 86(7)(c)(ii)’.6 [11] The legislature’s declared purpose with the procedure set out in ss 86 and 87 is to provide a mechanism for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations (s 3(g)). Debt counsellors (in terms of s 86(7)(c)) and magistrates (in terms of s 87 (1)(b)(ii)) are mandated to seek an equitable balance between the respective rights and obligations of credit providers and consumers (s 3(d)) in order to establish a debt restructuring and enforcement which places a priority on the eventual satisfaction of all responsible consumer obligations assumed under the credit agreements (s 3(i)). Responsible obligations in the context of the Act, are all those obligations lawfully undertaken7 under a credit agreement which are not reckless as envisaged in s 80.8 It has not been suggested that the Loan Agreement was either reckless or unlawful. 5 Section 86(7)(c)(ii). 6 Section 87(1)(b). 7 Sections 89-91 provide for unlawful agreements and provisions contained in a credit agreement which would be unlawful. 8 Section 80(1) provides: ‘Reckless credit [12] Two features emerge from these provisions as they appear in their context within the scheme of the NCA. Firstly, the debt review court is empowered to ‘re- arrange’ (s 86 (7)(c)(ii)) or ‘restructure’ (s 3(i)) the consumer’s obligations under the credit agreement. It is not empowered to alter or amend the obligation. Hence, in Norris Goosen J held that ‘a re-arrangement order does not, and cannot, extinguish the underlying contractual obligations’.9 This conclusion must be endorsed. [13] Secondly, in re-arranging the obligations the debt review court is enjoined to do so with due deference to the legislative purpose articulated in ss 3 (d), (g) and (i) of the NCA. [14] The obligations undertaken in this matter are twofold. Firstly, the repayment of the capital sum advanced and secondly, the payment of interest at the agreed rate on the outstanding balance of the capital from time to time. [15] The point of departure in any re-arrangement must of necessity be the provisions of the NCA and in particular s 3 as set out earlier. Where s 86(7)(c)(ii)(aa) empowers a magistrate to re-arrange the debt repayment by extending the period and reducing the monthly instalments ‘accordingly’ it envisages a reduction in the monthly instalment, with a concomitant extension of the repayment period, which would have the effect that all the obligations (1) A credit agreement is reckless if, at the time that the agreement was made, or at the time when the amount approved in terms of the agreement is increased, other than an increase in terms of section 119(4) – (a) the credit provider failed to conduct an assessment as required by section 81(2), irrespective of what the outcome of such an assessment might have concluded at the time; or (b) the credit provider, having conducted an assessment as required by section 81(2), entered into the credit agreement with the consumer despite the fact that the preponderance of information available to the credit provider indicated that – (i) the consumer did not generally understand or appreciate the consumer's risks, costs or obligations under the proposed credit agreement; or (ii) entering into that credit agreement would make the consumer over-indebted.’ 9 Norris para 44. assumed under the credit agreement would be satisfied at the conclusion of the extended period. [16] In Seyffert and Seyffert v FirstRand Bank Limited [2012] ZASCA 81 this Court considered a proposal by a debt counsellor which had been rejected by a credit provider. It held: ‘The proposal envisaged payments from October 2009 when the balance owing was apparently R203 786,18 and, clearly, even with regular payments of the suggested instalment, the debt would not have been discharged within that period. Close examination of the proposal reveals that it is based on the monthly instalment being used to discharge some of the interest as it accumulated with no payments being made in respect of the capital amount of the loan. In the result there would be a balance of R28 898,64 still due in September 2029. Not even the accumulating interest (which the debt counsellor set at 10 per cent per annum) would have been covered by payment of the proposed instalments.’10 It proceeded to conclude: ‘Their restructuring proposals were simply, as the court below found, “devoid of economic rationality”, and would have left a substantial part of the debt unpaid.’ [17] These remarks are equally apposite to the debt review order in this case. For the reasons set out earlier a debt review order which does not result in the satisfaction of all responsible obligations assumed under the credit agreement during the repayment period does not meet the purposes of the NCA. In the result I agree with the conclusions reached in Jones which must be endorsed. [18] Reverting to the facts of this case, the debt review court did not specify in terms of which sub-provision of s 86(7)(c)(ii) it purported to act. Counsel on behalf of the respondents, however, acknowledged that the order purports to be in accordance with s 86(7)(c)(ii)(aa). As recorded earlier the debt review court did not make an order in accordance with the proposal of the debt counsellor. 10 Seyffert para 10. Rather, it reduced the monthly instalments substantially from that proposed by the debt counsellor and extended the period for repayment beyond that which the debt counsellor had envisaged. The reduction of the monthly instalment was so substantial that it does not remotely cover the monthly interest due in terms of the order. Such an order does not serve to protect the interests of the consumer who would, at the end of the period, be left with a substantial debt which they would in all likelihood be unable to pay. The debt review order is therefore ultra vires the provisions of the NCA and was accordingly void ab origine. [19] The high court, considered, however, that whereas the debt review order was issued prior to the judgment in Jones, the findings of the court in Jones were of no application at the time when the debt review order was made. In this respect the high court erred. Neither the findings in Jones nor in Norris created new law. These judgments merely pronounced on the meaning of the NCA, as it was promulgated in 2005.11 Before us counsel for the respondents did not contend otherwise. The reasoning of the high court can therefore not be sustained. In the result the rescission order was correctly granted. [20] By virtue of the conclusion to which I have come on the first issue the appealability issue pales into insignificance. I shall accordingly deal briefly with this aspect. [21] The law on which judgments are appealable is settled. I am in full agreement with the counsel for the appellant that the rescission order granted by the magistrate’s court was not appealable in terms of s 83(b) of the Magistrates’ Court Act 32 of 1944. It was an interlocutory order, which placed the parties back in the position in which they were before the re-arrangement order was granted. 11 See Finbro Furnitures (Pty) Ltd v Registrar Deeds Bloemfontein and Others [1985] 4 All SA 388 (AD); 1985 (4) SA 773 (A) at 804D. This Court in HMI Healthcare Corporation (Pty) Ltd v Medshield Medical Scheme and Others [2017] ZASCA 160 stated in para 18: ‘It is plain that a rescission order does not have a final and definitive effect. In De Vos v Cooper & Ferreira this court expressed the view that “[s]o ‘n bevel [that is, a rescission order] het immers nie enige finale of beslissende uitwerking op die geskilpunte in die hoofgeding nie”. The rescission order simply returns the parties to the positions which they were in prior to the ex parte order being granted. De Vos relied inter alia on Gatebe v Gatebe and Ranchod v Lalloo. In Gatebe, De Villiers JP held: “The order therefore does not dispose of the main case or of any of the issues in the main case, and therefore has not the effect of a definitive sentence in this behalf. It still remains to consider whether it has not the effect of a definitive sentence in that it causes irreparable prejudice. Here again it seems to me to be clear that an order merely rescinding a default judgment does not cause irreparable prejudice, for in the definitive sentence the effect of the decision can obviously be repaired.”’ (Footnotes omitted.) [22] The judgment sought to be appealed by the respondents lacked any of the attributes in the Zweni v Minister of Law and Order of the Republic of South Africa 1993 (1) SA 523 (AD); [1993] 1 All SA 365 (A), (536B-D) where the court ruled against the appealability of the interim order made by the court of first instance. It held that the interim order should be tested against (i) the finality of the order; (ii) the definitive rights of the parties; and (iii) the effect of disposing of a substantial portion of the relief claimed. Therefore, the reliance by the court a quo in Slabbert v MEC for Health and Social Development, Gauteng [2016] ZASCA 153, was misplaced. The door is still open to the respondents to approach the magistrate’s court for a determination of a new debt review order. [23] I turn to the costs of the appeal. The respondents counsel submitted that, in the event that the appeal is upheld, this Court should make no order as to costs as the prosecution of the appeal was in the public interest. This could not be the case as the matter rested on the interpretation of the provisions of the NCA. The respondents could have withdrawn their opposition to the appeal to minimise costs, but pursued the appeal to the date of the hearing. The respondents could have abided by the decision of this Court, if they felt that it was in the public interest, but failed to do so. For these reasons, the respondents should be ordered to pay the appellant’s costs, including the costs of two counsel. [24] In the result, I make the following order: The appeal is upheld with costs, including the costs of two counsel. The order of the court below is set aside and replaced with the following order: ‘The appeal is dismissed with costs.’ _______________ Y T MBATHA JUDGE OF APPEAL Appearances For appellant: A Gautschi SC (with him B Stevens and J Chanza) Instructed by: CF Van Coller Attorneys, Germiston Symington & De Kok, Bloemfontein For respondents: J C Viljoen Instructed by: Morgan Attorneys, Johannesburg Du Toit Lamprecht Incorporated, Bloemfontein.

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 01 April 2020 STATUS Immediate FirstRand Bank Ltd v McLachlan and Others (394/2019) [2020] ZASCA 31 (01 April 2020) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Today the Supreme Court of Appeal (SCA) upheld the appeal of the appellant, FirstRand Bank Ltd, against the decision of the Gauteng Division of the High Court, Johannesburg (the high court). In 2006 the appellant and the second and third respondents (the respondents), Roshen and Komarie Maharaj, entered into a Grant of Loan Agreement (the Loan Agreement), in terms of which the appellant advanced an amount of R2.1 million to the respondents. The monthly instalment was fixed at R20 335,07, inclusive of 10,05 per cent interest per annum calculated daily and compounded monthly. The interest was variable at the instance of the appellant. In 2010, the respondents lodged an application for debt review in terms of s 86 of the National Credit Act 43 of 2005 (the NCA). The first respondent, Minetta Cecilia Petronella Mclachlan, a debt counsellor, prepared a debt repayment proposal that was referred to a magistrate in terms of s 86(8)(b) of the NCA. In 2011, the magistrate’s court, Westonaria (the magistrate’s court) granted a debt re-arrangement order in terms of s 86(7)(c)(ii) in favour of the respondents. In granting the order, the court did not adopt the repayment proposal submitted by the debt counsellor. In terms of the order, the respondents were declared to be over-indebted and their obligations were re-arranged. With regard to the Loan Agreement, the monthly instalments were reduced to R8 185,50 per month and the period was extended to 261 months at a fixed interest rate of 12,55 per cent. The respondents complied with the order until June 2017, when the appellant made application for a rescission of the order in terms of rule 49(8) of the Magistrates’ Court Rules on the basis that the order was void ab origine for being ultra vires the NCA. The magistrate upheld the application and rescinded the debt review order. In an appeal to the full bench of the high court, the order of the magistrate was set aside. This order which the appellants then appealed to the SCA. In the interpretation of the NCA, the SCA held that, firstly, a debt review court was empowered to re- arrange or ‘restructure the consumer’s obligations under the credit agreement. It was not empowered to alter or amend the obligation. Therefore, a re-arrangement order does not, and cannot, extinguish the underlying contractual obligations. Secondly, in re-arranging the obligations, a debt review court was enjoined to do so with due deference to the legislative purposes of the NCA that include ss 3(d) promoting equity in the credit market by balancing the respective rights and responsibilities of credit providers and consumers; 3(g) addressing over-indebtedness of consumers based on the principle of satisfaction by the consumer of all responsible financial obligations; and 3(i) providing for a consistent and harmonised system of debt restructuring, which places priority on the eventual satisfaction of all responsible consumer obligations under credit agreements. The SCA further held that the debt review order reduced the monthly instalments substantially from that proposed by the debt counsellor and extended the period for repayment beyond that which the debt counsellor had envisaged. The reduction of the monthly instalment was so substantial that it does not remotely cover the monthly interest due in terms of the order. Such an order does not serve to protect the interests of the consumer who would be left with a substantial debt that they would in all likelihood be unable to pay. The debt review order was therefore ultra vires the provisions of the NCA and was accordingly void ab origine. The SCA held that the law on which judgments are appealable was settled. The judgment sought to be appealed lacked any of the following attributes (i) the finality of the order; (ii) the definitive rights of the parties; and (iii) the effect of disposing of a substantial portion of the relief claimed. Therefore, the rescission order granted by the magistrate’s court was not appealable in terms of s 83(b) of the Magistrates’ Court Act 32 of 1944. The appeal was accordingly upheld.

1255

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case no: 411/07 In the matter between: JACOBUS HENDRIK SAAYMAN Appellant and CHRISTIAAN ANDREAS VISSER Respondent _______________________________________________________ Coram: Navsa, Ponnan JJA et Snyders AJA Date of hearing: 16 May 2008 Date of delivery: 30 May 2008 Summary: Liability of homeowner in relation to the shooting of a 16 year-old boy by a security guard stationed at the premises ─ test to determine negligence on part of homeowner ─ reliance on expertise of security company ─ in totality of circumstances homeowner held not liable. Neutral citation: Saayman v Visser (411/07) [2008] ZASCA 71 (30 May 2008). _______________________________________________________ NAVSA JA NAVSA JA: [1] During the early hours of the morning of Saturday 13 February 1999, in a suburb in Kimberley, events unfolded that changed the life of sixteen year-old Gideon Saayman forever. He was shot in the back and the neck whilst in the immediate vicinity of the house of the respondent, Mr Christiaan Visser. Gideon was shot by a security guard, Mr Sylvester Morebudi, who had been stationed at Mr Visser’s house at the latter’s instance by Griekwa Security CC, a close corporation that provided security services to the public. The close corporation traded under the name Barn Owl Security. Mr Visser was a diamond digger and businessman who kept diamonds and other valuables at his home. He was away from home fairly regularly, sometimes for a month at a time, and required 24- hour protection for his wife and daughter who resided with him in the house. As a consequence of being shot Gideon sustained serious injuries. According to the particulars of claim Gideon’s family had to relocate to Parow in the Western Cape to enable him to obtain the necessary medical treatment. [2] This is an appeal against a judgment of the Kimberley High Court (Tlaletsi AJP), in terms of which the appellant’s claim for damages against the respondent, both in his personal and in his representative capacity, as the father and the guardian of Gideon, was dismissed with costs. The other two defendants in the high court, Griekwa Security CC and Mr Morebudi, chose not to defend the action and were held to be jointly and severally liable for the damages sustained by the appellant but not for the latter’s costs in relation to the trial on the merits.1 The present appeal is before us with the leave of the court below. [3] This case is a very sad and dramatic illustration of how steps taken by an increasingly desperate and hapless populace to protect their lives and homes against the crime wave in this country can have negative effects, particularly 1 At the commencement of the trial the court below made an order in terms of Uniform rule 33(4) that the merits first be determined. when it involves the use of firearms ─ in the present case Mr Morebudi used a Norinco 12-bore shotgun. It demonstrates how far the consequences of rampant crime extend and how easily life can be lost in South Africa. It also serves as a warning to those who advocate a resort to lethal force (irrespective of circumstances) to thwart the threat of crime, against the awful results of such force, that are unfortunately all too predictable. On the other hand, it should also serve to prompt government to harness every available resource, as a matter of pressing priority, to end the scourge of crime before confidence in our Constitutional order is lost or abandoned. The Background [4] During the night of Friday 12 February 1999, Gideon and his friend, Mr Winton Smith, attended a party at Gideon’s home where they both consumed alcohol, if not copiously, then at least in substantial quantities. Mr Smith was 19 years old at the time. Shortly after midnight, after all the other partygoers had gone to sleep, the two youngsters went in search of further entertainment and, to that end, walked to a pub in the vicinity. They spent approximately half an hour at the pub, just conversing. There was however, not much ‘action’ at the pub and the two decided to return to their homes. As they made their way home, they passed Mr Visser’s house and, in their inebriated state, decided to play a prank. Little did they know how costly this would prove. The prank was to consist of overturning a pot-plant located on the lawn in the front of the premises between the perimeter fence and the house. The fence was only partially constructed, the bars between the pillars not yet having being inserted. [5] The two would-be pranksters entered the premises but found that they could not dislodge the heavy pot, with only the top part giving way to the force applied. Unsuccessful, they decided to leave. As they were departing they heard the sound of a firearm being discharged. They could not tell whence it came. In a panic they ran out of the premises and onto the public street. As they made their way along the pavement, another shot was fired. Gideon was struck and fell. Mr Smith stopped, turned around and saw Mr Morebudi at one of the motor gates. The former put his arms up in a gesture of surrender and Mr Morebudi then motioned him closer. Gideon, who was lying on the ground, appeared to be gurgling or choking. Mr Morebudi handcuffed Mr Smith and made him lie on his stomach on the ground. [6] Mr Visser, who had been asleep in his house, was awoken by the gunshots. He proceeded to the front door of the house where he was met by Mr Morebudi. The latter reported to him that he had wounded one person and arrested another. The police were summoned and arrived. Mr Smith was transported to the police station and an ambulance took Gideon to hospital. [7] Mr Morebudi had shot Gideon using a licensed shotgun issued to him by Griekwa Security. At the time of the shooting the street in front of the house was well-lit. [8] It is common cause that in 1998, the year preceding the shooting, Mr Morebudi had been employed for the first time by Griekwa Security as a security guard to be deployed where clients required such a service. At the beginning of 1999, it was apparently agreed between all the security guards and Griekwa Security that the former would render services to the latter as independent contractors ─ at first blush this appears contrived but the result of the appeal is not affected thereby. This arrangement was in place at the time of the shooting. [9] Griekwa Security had provided Mr Morebudi’s services in terms of an oral agreement concluded during December 1998 between itself and Mr Visser. The close corporation had been approached by Mr Visser with a request that it provide an armed security guard on a 24-hour basis as protection for himself, his family and his assets. In terms of the contract Mr Visser did not have the right to nominate the particular guard to be deployed, nor did he have any say about the manner in which the security guard was to perform his duties. This was all in the province of Griekwa Security. In relation to the exercise of their duties, the security guards were all instructed to follow only such orders as emanated from the close corporation. Griekwa Security also required that any problems that a homeowner might experience with a security guard be taken up with them, rather than with the guard directly. The close corporation had in the past, without incident, provided Mr Visser with security services at another location near the Vaal River. [10] In Mr Visser’s response to a request for further particulars for trial he stated that, upon enquiry, he was informed by Griekwa Security that the security guards who would be employed at his home were indeed properly trained and were instructed in the use of firearms. Mr Visser testified in the court below that, during December 1998, when he concluded the agreement for the provision of security services at his home, he had asked whether the security guard who would be posted there was qualified. Mr Steven Hansen, on behalf of Griekwa Security, told him that the guard had training in the use of the firearm.2 He had enquired because he was aware of the danger of a firearm being employed on his property. [11] A document issued by an entity calling itself Advanced Specialised Security Training was produced at the trail, certifying that, on 10 October 1998 Mr Morebudi had received training in the use of a 9mm pistol and a Norinco 12- bore shotgun. Other related training received by Mr Morebudi only took place after the shooting incident. At the time of the shooting Griekwa Security was not registered, as required by legislation, with the then regulatory Board, nor was Mr Morebudi then properly qualified to be a security guard. Mr Visser was unaware of this. It is uncontested that Griekwa Security operated in the normal 2 The following is the relevant part of the testimony: ‘Al wat ek mnr Hansen gevra het, is die man bevoeg, toe sê hy die man het wel opleiding gehad om hierdie vuurwapen te hanteer.’ course, as would any entity that provided security services, and from Mr Visser’s perspective there was nothing untoward in the manner in which it conducted its business. [12] Mr Visser had no knowledge of the general tenor of the instructions issued to the guards by Griekwa Security nor of any specific instructions concerning the circumstances under which shooting would be justified. It is common cause that there were no signs at Mr Visser’s home warning the public that an armed security guard was on duty. [13] At the time of the trial in the court below, the close corporation had no assets worth mentioning and Mr Morebudi was serving a term of imprisonment as a result of his conviction on a charge of attempted murder flowing from the events set out above. This explains, at least partially, why the action against the respondent was pursued and this appeal persisted with. [14] The issue in this appeal is whether, in the circumstances set out above, Mr Visser is liable for what now appears to be accepted was the unlawful shooting of Gideon. [15] It was contended on behalf of the appellant that to employ a security guard with a shotgun and live ammunition in a residential area is in itself the creation of a dangerous situation of which the respondent was aware. Counsel for the appellant submitted that a reasonable person in the position of Mr Visser would have foreseen the possibility of trespassers on the property and that they might be injured, and such person would have taken the necessary steps to guard against that eventuality. Counsel argued further that a reasonable person would have ensured that members of the public were alerted, by way of a prominent sign, that an armed security guard was present. Furthermore, that the area where the guard was stationed should have been adequately lit and that Mr Visser should have instructed Griekwa Security to ensure that the shotgun would first discharge at least two blanks and only thereafter, if circumstances so demanded, live ammunition. Thus, it was contended, the respondent should be liable for the injuries suffered by Gideon, even where, as here, Griekwa Security had provided security services as an independent contractor. In this regard the appellant relied on the decision in Langley Fox Building Partnership (Pty) Ltd v De Valence 1991 (1) SA 1 (A). [16] The respondent contended that the application of the principles laid down in Langley Fox compelled the contrary conclusion. It was contended on behalf of Mr Visser that, when the agreement for the provision for security services was concluded, the parties could only have intended that a firearm would be used in circumstances that justified it and that he was entitled to assume that the security guards would act accordingly. [17] In the court below counsel for the appellant accepted that at the time of the shooting Griekwa Security had operated as an independent contractor at the instance of Mr Visser and had contended that the latter was liable for the damages sustained on the basis of his own negligence. That stance, particularly having regard to what is set out in para 9 above, rightly, did not change before us. Conclusions [18] The general rule of our law is that an employer is not responsible for the negligence or the wrongdoing of an independent contractor utilised by him/her.3 A recognised exception is where the employer himself/herself has been negligent in regard to the conduct of the independent contractor which caused harm to a 3 See Colonial Mutual Life Assurance Society Ltd v Macdonald 1931 AD 412 at 431-432 where the following appears: ‘To hold an employer liable in a case where he has no say and no right of supervision and control would, in my opinion, be going further than is warranted by principle or authority.’ third party.4 Such liability is not vicarious.5 An employer is liable in circumstances where he/she has broken a duty he/she owed to those injured. In Langley Fox the following was stated: ‘[I]n every case the answer to the question whether or not the duty arises must depend on all the facts.’6 [19] Under English law one situation in which an employer of an independent contractor would be liable for the wrongs of the latter is where the work performed is dangerous.7 There are dicta in the Dukes case which tend to suggest that, whenever the work entails danger to the public, liability is almost inevitable. Goldstone AJA, in Langley Fox, after examining English cases on the See also Jonathan Burchell Principles of Delict (1993) p 227. 4 In Dukes v Marthinusen 1937 AD 12 at+ 17 an exception to this rule was discussed, both in English law and our own. Liability on the part of an employer would arise where the employer himself/herself has been negligent in regard to the conduct of the independent contractor which causes harm to the third party. In Dukes case, after an examination of English law on the subject, Stratford ACJ said the following (at 23): ‘The English law on the subject as I have stated it to be is in complete accord with our own, both systems rest the rule as to the liability of an employer for any damage caused by work he authorises another to do upon the law of negligence.’ In relation to the question of determining whether there was a duty on the employer to take precautions to protect the public the following was said: ‘The duty if it is to be inferred must arise from the nature of the work authorised taking into consideration all the circumstances of its execution such as, in particular, the place of such execution.’ 5 As indicated in the preceding paragraph vicarious liability was not contended for. 6 At 9H. 7 In English law the exceptions to the principle that someone who employs an independent contractor to do work on his behalf is not in the ordinary way responsible for any tort committed by the contractor in the course of the execution of the work are set out in Alcock v Wraith CA (1991) 59 BLR 16 as cited in Hepple, Howarth & Matthews Tort Cases & Materials 5 ed (2000) p 1066: ‘(a) Cases where the employer is under some statutory duty which he cannot delegate. (b) Cases involving the withdrawal of support from neighbouring land. (c) Cases involving the escape of fire. (d) Cases involving the escape of substances, such as explosives which have been brought onto the land and which are likely to do damage if they escape; liability will attach under the rule in Rylands v Fletcher (1868) LR 3 HL 330. (e) Cases involving operations on the highway which may cause danger to persons using the highway. (f) Cases involving non-delegable duties of an employer for the safety of his employees. (g) Cases involving extra-hazardous acts.’ subject, and considering the Dukes case, stated the following: ‘In my judgment, the correct approach to the liability of an employer for the negligence of an independent contractor is to apply the fundamental rule of our law that obliges a person to exercise that degree of care which the circumstances demand.’8 [20] Later in Langley Fox the following is stated: ‘Whether the circumstances demand the exercise of care will depend upon proof that the employer owed the plaintiff a duty of care and that the damage suffered was not too remote.’9 [21] It is important to note that in our law the fact that the work was dangerous is only one of the factors to be taken into account in determining whether an employer would be personally negligent in regard to the harm caused to a third party by an independent contractor. That fact in itself would not invariably lead to liability.10 [22] After discussing Peri-Urban Areas Health Board v Munarin 1965 (3) SA 367 (A), which concerned the liability of the employer of an independent contractor for damages arising from the death of a third party who was injured in consequence of dangerous operations performed by the contractor, Goldstone AJA, in Langley Fox, came to the following conclusion: ‘[I]n a case such as the present, there are three broad questions which must be asked, viz: (1) would a reasonable man have foreseen the risk of danger in consequence of the work he employed the contractor to perform? If so, (2) would a reasonable man have taken steps to guard against the danger? If so, (3) were such steps duly taken in the case in question?’11 [23] Only where the answer to the first two questions is in the affirmative does a legal duty arise, the failure to comply with which can form the basis of liability. 8 At 11E. See also Jonathan Burchell Principles of Delict, supra, at 228. 9 At 11I. 10 At 9H-11E. 11 At 12H-J. The following dictum in Langley Fox is important: ‘It follows from the aforegoing that the existence of a duty upon an employer of an independent contractor to take steps to prevent harm to members of the public will depend in each case upon the facts. It would be relevant to consider the nature of the danger; the context in which the danger may arise; the degree of expertise available to the employer and the independent contractor respectively; and the means available to the employer to avert the danger. This list is in no way meant to be exhaustive.’12 [24] In circumstances in which the breach of a duty is established it is often said that whilst the performance of the duties in terms of the contract between the employer and the independent contractor can be delegated the responsibility for the performance cannot be. The expression used is ‘non-delegable duties’.13 [25] In answer to the first question referred to in para 22 above it appears to me to be clear that the risk of danger in employing an armed security guard on one’s premises was reasonably foreseeable. [26] In dealing with the second question it is necessary to consider that Mr Visser turned to a provider of security services to protect his family. There is no indication that there was anything in the manner in which Griekwa Security conducted or projected itself that would have put a reasonable person on his/her guard. There was nothing to indicate that it did not possess the necessary expertise or that it did not operate within the law. The following part of Mr Visser’s testimony is relevant: ‘Ek voel . . . ek het ‘n maatskappy gehuur wat geregistreer is by die Raad, dit is, hy ken die wet en hy ken sy pligte. Ek ken nie die veiligheidswette en pligte nie. Moet [ons] daaruit verstaan dat u u op hulle verlaat? --- Dit is heeltemal korrek.’ [27] It is clear that, mindful of the danger of firearms and their use, Mr Visser enquired whether the guards who would be posted had the necessary training in firearms. As stated earlier he was reassured in this regard. Furthermore, 12 At 13A-C. 13 See Langley Fox at 8A-J. Mr Visser had previously used Griekwa Security’s services at another location without incident. [28] At the time immediately prior to the shooting, when the security guard had to deal with the intruders, he was required to exercise what in ‘modern’ language would be described as a ‘judgment call’. Mr Visser was asleep and unaware of the existence of a potentially dangerous situation and could therefore not intervene to prevent the harm that ensued. [29] In Veiera v Van Rensburg 1953 (3) SA 647 (T) the court took into consideration that a reasonable homeowner would foresee that people might, from time to time come to the premises, some to find the way, some to visit and some to sell something. In that case liability for an attack by a vicious dog, kept by the owner to protect his wife and infant child, was in issue. The court had regard to a notice, warning about the presence of the dog and found that it was obscured and not in a place one would expect to find it. The court held that the notice was quite insufficient to protect the plaintiff and that the putting up of the notice was not a proper exercise of the duty of care. The court thus held the defendant liable for the damages suffered by a salesperson who had been attacked by the dog. [30] A distinction between Veiera and the present case is that a vicious dog is not in the position of an independent contractor and is not called upon to exercise judgment. Griekwa Security was employed for its specialist knowledge concerning security arrangements and the protection of persons and property. The employment of an armed guard, particularly on the assumption that he/she is properly trained to deal with any situation that might develop is very different to the use of a fierce dog which the owner knows will attack trespassers as was the case in Veiera.14 14 See 654H. [31] It is probably more common for individual households to contract armed response units rather than to have armed guards permanently stationed at their homes. Assuming for the moment that it can rightly be expected of a homeowner who has an armed security guard permanently on the premises to, at the very least, put up a sign warning the public at large of the presence of the armed guard, it is not at all clear that the harm in the present case would have been avoided. First, Gideon and Mr Smith were inebriated and no evidence was presented which showed that they were in a state to notice and/or understand any sign that might have been displayed. Although testifying that he had seen no warning sign Mr Smith did not say that, had a sign been displayed, they would definitely not have intruded upon the premises. Second, there was no evidence that they were familiar with the immediate vicinity in which the shooting took place or of how recently, if at all, they had previously passed Mr Visser’s house ─ this would have addressed the question of whether the sign, if displayed, might have been noticed by either or both on a prior occasion. Third, considering that they were intent on playing a prank it is more probable than not that their state of mind was such that the sign might have been a spur rather than a deterring factor ─ they were clearly in an uninhibited frame of mind. [32] Thus, if one were to conclude that Mr Visser was negligent in not displaying a sign warning the public about the presence of an armed guard, the conclusion that the consequences referred to above would have been avoided is unwarranted. If anything, all the pointers are to the contrary. [33] Furthermore, I am not persuaded that the public should be informed of where exactly an armed security guard is positioned or that his position should be well-lit. It appears to me that this might well put the guard in danger against potential attackers and also put the occupants of the house at risk. It might simply encourage entry from another point of the premises. The submission on behalf of the appellant in this regard is, in my view, fallacious. [34] The submission that an armed guard expecting to meet danger should as a matter of course first use blank ammunition before resorting to live ammunition is entirely without merit and not deserving of any further consideration. [35] In assessing whether or not Mr Visser acted reasonably the following passage from Grueber’s work on the Lex Aquilia, cited in Fred Saber (Pty) Ltd v Franks 1949 (1) SA 388 (A) at 405, is important15: ‘[T]he conduct of the diligens paterfamilias implies only an average standard. No one can reasonably expect from a man that he should be possessed of qualities which are rarely to be found amongst men, or that he should use the utmost strength of which he is capable, or that he should be as cautious and careful as a man can possibly be. The standard is, however, an objective one. It is true the conduct of a diligens paterfamilias will vary, but it will vary in accordance with the circumstances of the case: the amount of the skill, strength, foresight will always be determined by the nature of the business or work to be done, and insofar as the standard is one and the same for everybody under the same circumstances.’ [36] In the present case Mr Visser contracted a security company which he was entitled to assume had the necessary expertise and that would operate within the confines of the law. He enquired about the proficiency of the security guards concerning the use of firearms. He was reassured. His past experiences with the close corporation must have been a further cause for reassurance. To have expected further enquiry and steps would be placing too heavy a burden on him and other homeowners in his position. [37] The present litigation might have been avoided had Griekwa Security not been impecunious. Regrettably, what is set out above and the conclusion that must follow, does not provide comfort for Gideon and his parents. However, to land Mr Visser with liability in the circumstances of this case would not only be inequitable but would extend our law beyond sustainable parameters. 15 This passage was also referred to by Botha JA in Langley Fox, supra, at 17D-F. [38] For the reasons mentioned the following order is made: The appeal is dismissed with costs. _________________ M S NAVSA JUDGE OF APPEAL CONCUR: PONNAN JA SNYDERS AJA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 May 2008 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal On 30 May 2008 the Supreme Court of Appeal handed down judgment in the matter J H Saayman v C A Visser. It dismissed an appeal against a judgment of the Kimberley High Court in terms of which it dismissed a claim by the father of Gideon Saayman against Mr Visser, a diamond digger and businessman, who had contracted a security company to post a security guard permanently at his home. The security guard who had been employed by Griekwa Security, a close corporation trading as Barn Owl Security, had used a 12-bore shotgun to shoot Gideon during the early morning hours of 13 February 1999 causing him to sustain severe injuries. Shortly before the shooting Gideon and a friend, both of whom were inebriated, had entered the grounds to play a prank, namely, to overthrow a pot plant. The shooting incident took place whilst Mr Visser and his family were asleep in the house. Mr Visser was often away from home and had diamonds and other valuables on the property. He required security services for the protection of his wife, his daughter and of his property. The Kimberley High Court had granted judgment against the security guard and the close corporation ─ both chose not to defend the action. It was contended on behalf of the appellant that Mr Visser had been negligent in that a reasonable homeowner in his position would have realised the danger of employing an armed guard in a residential area, would have foreseen the possibility that trespassers would be injured and would have taken the necessary steps to guard against that eventuality. It was contended further that the area where the guard was stationed should have been well-lit and the public should have been warned about his presence by way of a prominent sign. It was also contended that the security guard should have been instructed beforehand to first discharge two blanks and only thereafter live ammunition. This court held that when Mr Visser contracted Griekwa Security there was nothing to indicate that it did not possess the necessary expertise and that it would not operate within the law. Mr Visser had used their services before at another location without incident. Mr Visser had enquired about whether the guard to be posted at his house had received training in the use of a firearm and was reassured in this regard. The security guard took instructions only from the close corporation. This court observed that even if a sign had been displayed indicating a guard on the premises Gideon and his friend were not in a state of mind where it would have prevented the intrusion. Furthermore, the court was not persuaded that a homeowner should inform the public of exactly where a guard is posted and that doing so might put the guard and occupants of the house at risk. The submission that an armed guard expecting to meet danger should as a matter of course first use blank ammunition before resorting to live ammunition was without merit. The court noted that this case was a sad and dramatic illustration of how steps taken by an increasingly desperate and hapless populace to protect their lives and homes against the crime wave in this country can have negative effects, particularly when it involves the use of firearms. It demonstrates how far the consequences of rampant crime extend and how easily life can be lost in South Africa. It also serves as a warning to those who advocate a resort to lethal force (irrespective of circumstances) to thwart the threat of crime, against the awful results of such force, that are unfortunately all too predictable. On the other hand, it should also serve to prompt government to harness every available resource, as a matter of pressing priority, to end the scourge of crime before confidence in our Constitutional order is lost or abandoned. Regrettably, the appeal had to be dismissed. This court held that in the totality of the circumstances to land Mr Visser with liability would not only be inequitable but would extend our law beyond sustainable parameters. --ends--

2698

non-electoral

2012

REPORTABLE THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 920/2010 In the matter between: NATAL JOINT MUNICIPAL PENSION FUND Appellant and ENDUMENI MUNICIPALITY Respondent Neutral citation: Natal Joint Municipal Pension Fund v Endumeni Municipality (920/2010) [2012] ZASCA 13 (15 March 2012) Coram: FARLAM, VAN HEERDEN, CACHALIA, LEACH and WALLIS JJA. Heard: 23 February, 2012 Delivered: 16 March 2012 Summary: Pension Fund for municipal employees – payment of adjusted contribution by municipality – whether such contribution recoverable in terms of the proviso to regulation 1(xxi)(h) of the regulations governing the fund – proper approach to interpretation of documents – whether the proviso was valid in terms of s 12(1) of the Pension Funds Act 24 of 1956 – whether the requirements for invoking the proviso were satisfied. ORDER On appeal from: KwaZulu-Natal High Court, Pietermaritzburg (Swain J sitting as court of first instance): The appeal succeeds with costs, such costs to include those consequent upon the employment of two counsel. The order of the trial court is set aside and replaced by the following order: „Judgment is granted in favour of the plaintiff and against the defendant for: Payment of the sum of R2 573 740; Interest on the said sum of R2 573 740 at a rate of 15.5% per annum from 15 October 2007 to the date of payment; Costs of suit, such costs to include those consequent upon the employment of two counsel.‟ JUDGMENT WALLIS JA (FARLAM, VAN HEERDEN, CACHALIA and LEACH JJA concurring) [1] Two pension funds, the Superannuation Fund and the Retirement Fund,1 and one provident fund, the Provident Fund,2 established by legislation for employees of local authorities in KwaZulu-Natal, are managed in terms of a single set of regulations. They are referred to collectively as the Natal Joint Municipal Pension Fund (the Fund), the appellant in this appeal. In addition to the regulations for the management and administration of the three funds, each separate fund has its own set of governing regulations dealing with the operation of that fund and in particular the contributions payable to that fund by members and employers and the benefits due to members of that fund. All three funds are registered as pension funds in terms of the Pension Funds Act 24 of 1956 (the Act). The Endumeni Municipality (Endumeni), the respondent, is a participant in the Fund and its employees are entitled to select which of the three funds they will join. The dispute between Endumeni and the Fund concerns an attempt by the latter to recover an adjusted contribution imposed on Endumeni under the regulations governing the Superannuation Fund. The attempt failed before Swain J and the present 1 The Superannuation Fund operates in terms of the Local Government Superannuation Ordinance 24 of 1973 and the Retirement Fund operates in terms of the Natal Joint Municipal Pension Fund (Retirement) Ordinance 27 of 1974. 2 The Provident Fund operates in terms of the KwaZulu-Natal Joint Municipal Provident Fund Act 4 of 1995. appeal is with his leave. The dispute arises in the following circumstances. [2] In real life it is impossible for a person who is only 43 years old to have 45 years of service with their employer. However, in the arcane calculations that actuaries are required to undertake in relation to pension funds, that is not only possible but entirely legitimate. By changing his membership from the Superannuation Fund to the Provident Fund; reducing his pensionable emoluments to R5 000 per month whilst a member of the latter and then rejoining the Superannuation Fund and, with immediate effect, increasing his pensionable emoluments to R34 000 per month, Mr Bart Maltman, a senior employee with Endumeni, was able to secure that he was credited in the Superannuation Fund with 45 years service, although he was only 43 years old. A year later he resigned his employment and received a lump sum withdrawal benefit of some R2.7 million. To some degree his resignation was stage-managed in order to enable him to claim this benefit because he resigned on the basis of advice he received from within the municipality and was immediately re- employed on a contract basis in his former position. However all concerned accept that his conduct was legitimate and that he was entitled to the benefit he received. [3] The amount of Mr Maltman‟s withdrawal benefit was determined by two factors: the years of service attributed to him and his final average pensionable emoluments in the twelve months prior to his resignation. The withdrawal benefit was accordingly calculated on the basis of some 46 years service and average pensionable emoluments of around R34 000 per month. Whilst this is accepted as legitimate and proper it gave rise to a problem for the Fund. That problem arose because it had not received the benefit of contributions by Mr Maltman and Endumeni for 46 years and the contributions made during his membership of the Provident Fund had been reduced to well below his actual earnings. As the premise underlying the operation of a defined benefit pension fund, such as the Superannuation Fund, is that the contributions of the member and the member‟s employer, plus the investment earnings of the fund, should be sufficient to provide the agreed benefits, the result in the case of Mr Maltman was that the lump sum withdrawal benefit paid to him was underfunded. Absent the Fund‟s ability to rely on the provision in the regulations that is the subject of the present litigation, there were only two ways in which this problem could be addressed. Either the shortfall had to be recovered from a surplus in the Superannuation Fund,3 or it had to be recovered by way of a surcharge on all the municipalities that participate in the Fund. In either event other members or other employers would shoulder the cost of providing Mr Maltman with this benefit. [4] This problem was not confined to Mr Maltman but arose in relation to a number of municipal employees who took advantage of the same or similar manoeuvres to secure enhanced benefits from the Superannuation Fund or the Retirement Fund. However Mr Maltman‟s was the most extreme case. On the advice of Mr Els, who has acted for many years as the actuary appointed by the committee of management of the Fund (the committee) and the valuator in terms of s 9A of the Act for the three funds, the committee sought to claim an adjusted contribution from Endumeni under the proviso to the definition of „pensionable emoluments‟ in regulation 1(xxi)(h) of the regulations governing the 3 This was in fact what occurred with the obvious consequence that this portion of the surplus was not available to fund other obligations of the Superannuation Fund or to increase benefits. operations of the Superannuation Fund. This proviso had been inserted4 in the regulations with effect from 1 July 2004. [5] Endumeni resisted the claim on three broad grounds. First it said that the amendment to the regulations inserting the proviso was not registered in terms of s 12(4) of the Act until 17 February 2009, by which stage pleadings had closed and litis contestatio had been reached. It contended that until that stage the proviso was invalid by virtue of the provisions of s 12(1) of the Act and the Fund therefore had no cause of action: and that, whatever the consequence of the subsequent registration after litis contestatio, it could not operate retrospectively to validate the existing defective cause of action. Second it contended that the regulation, properly interpreted, did not permit the Fund to make the claim that it did for an adjusted contribution. Third, even if it did, it said that the necessary formalities for the exercise of that power were not satisfied. In order to address these arguments it is necessary to have regard to the regulations governing the Superannuation Fund. The regulations [6] Whilst the regulation on which the Fund relies in advancing its claim takes the form of a proviso and it is convenient to use that term to describe it, in truth it is not a proviso properly so-called. A proviso would serve to qualify and limit the scope of the definition to which it was appended,5 but this is an independent provision dealing with the power of 4 By way of an amendment promulgated by the MEC responsible for local government and housing in Provincial Notice 863 of 2004 in terms of the powers conferred under s 4(1) of the Local Government Superannuation Ordinance 24 of 1973 (KwaZulu-Natal). 5 Mphosi v Central Board for Co-operative Insurance Limited 1974 (4) SA 633 (A) at 645C-F. the committee of the Superannuation Fund to direct a local authority to pay an adjusted contribution. It reads as follows: „… provided further that should at any time the pensionable emoluments of a member including a section 57 contract employee, increase in excess of that assumed by the actuary from time to time for valuation purposes in terms of Regulation 13, then the committee, on the advice of the actuary, may direct that the local authority employing such member pay an adjusted contribution in terms of Regulation 21 to the Fund.‟ The Fund‟s case is that when, on 1 July 2005, Mr Maltman rejoined the Superannuation Fund and adjusted his pensionable emoluments from R5 000 per month to R34 000 per month there was an increase in his pensionable emoluments in excess of that assumed by the actuary in making his most recent valuation of the Superannuation Fund and that this increase warranted the committee directing Endumeni to pay an adjusted contribution. [7] The provisions of the regulations dealing with contributions are central to the issues in the case. They are to be found in regulations 19 and 22 in respect of members and regulation 21 in respect of local authorities. Under regulation 19(1), members must contribute to the Superannuation Fund an amount equal to 9¼ per cent of their pensionable emoluments. This is deducted either monthly or at shorter intervals, no doubt depending on whether they are weekly paid or monthly paid staff. In addition, under regulation 19(2), a person who becomes a member of the Superannuation Fund after the introduction of the regulations6 may elect to make an additional contribution in respect of prior service with a local authority. Under regulation 22(2) a member placed on leave without pay may, with the permission of the committee of the Superannuation Fund, continue to make contributions to it on the basis of their full 6 The regulations first came into operation on 24 May 1974. pensionable emoluments. It is apparent that save in these two exceptional cases the members‟ monthly contributions are relatively stable. [8] The contributions to be made by local authorities in terms of regulation 21 are as follows: „A local authority shall pay to the Fund within seven days after the expiration of the period in respect of which the contribution is being paid:- (a) the contributions and interest paid by the members in the preceding calendar month; (b) an amount equal to the following proportion of the contributions paid in terms of regulation (19)(1) by the members in its service : ... From 1 July 1992 1.946; (c) an amount equal to the proportion in paragraph (b) of the contributions and interest paid in terms of regulations 19(2) and 22 by the members in its service; (d) such surcharge on its contributions in terms of paragraphs (b) and (c) as may be agreed to by the local authorities in general committee on the advice of the actuary in order to provide the whole or part of bonus additions made in terms of Regulation 37; provided that if the member is paying by instalments, the local authority may make a lump sum payment to the fund in lieu of its instalments and interest.‟ These contributions will necessarily be less consistent from month to month than those of individual members. There are a number of variables that create that situation. They are affected by changes in the make-up of the workforce. This flows from staff leaving the employ of the local authority by virtue of death, retirement, resignation or dismissal and by recruitment of new staff. They are affected by members switching their membership between the three funds (Superannuation, Retirement or Provident) or adjusting the level of their pensionable contributions. If members make contributions under either regulation 19(2) or regulation 22(2) the local authority is compelled to make matching contributions or, if those payments are being made in instalments, it may elect to add a lump sum to its monthly contribution rather than to match the member‟s instalments. All of these factors (and perhaps others I have not mentioned), together with any surcharge payable from time to time,7 will influence the amount that each local authority pays to the Superannuation Fund each month by way of a contribution. Taking all relevant factors into account, the local authority must calculate an amount each month that represents its contributions to the Superannuation Fund. No doubt similar exercises are done in relation to the other two funds but that is immaterial for present purposes. Whilst the variances may not be great from month to month8 the fact is that, unlike employee members, the local authority‟s contributions are not constant but variable. [9] The primary question for determination in this appeal is what is meant by the proviso. However, before reaching that question it is necessary to determine whether the contention that there was no valid claim at the time of litis contestatio is correct, because if it is the question of construction does not arise. I turn to that initial question. Was the proviso in force? [10] In terms of s 4(1) of the Local Government Superannuation Ordinance 24 of 1973 the MEC for Local Government is entitled to make regulations governing the operation of the Superannuation Fund. Those regulations may include regulations governing the contributions to be made by members to the Superannuation Fund (s 4(1)(d)) and may 7 Compare paras 30 and 31 below. 8 From documents in the record it can be seen that Endumeni‟s contributions in May, June, July and August 2005 were R230 426, R229 527, R237 507 and R247 750 respectively. There were also varying „reconciliation‟ payments made in each of these months. For May, June and July 2006 the equivalent figures were R231 351, R231 079 and R256 967. provide for any matter that the MEC regards as necessary or expedient for the purposes of that fund (s 4(1)(o)). In terms of s 4(2): ‘Any regulations made by the [MEC] in terms of any of the provisions of subsection (1) may be made with effect from any date whether prior or subsequent to the date of promulgation thereof.‟ [11] On 29 July 2004 the MEC promulgated various amendments and additions to the regulations governing the Superannuation Fund including the insertion of the proviso. The notice provides that the effective date for the proviso to come into force was July 2004. Thereafter the Superannuation Fund operated in terms of the amendments and additions promulgated by the MEC. Indeed the calculation of Mr Maltman‟s withdrawal benefit took place partly in terms of one of the other amendments introduced by the MEC. [12] The Fund contends that this is sufficient to render the amendments, and in particular the insertion of the proviso, operative from 1 July 2004, and hence operative at the time of Mr Maltman‟s transfer to the Superannuation Fund and his subsequent withdrawal from that fund. Endumeni disputes this. It does so on the basis that the Superannuation Fund is registered in terms of the Act and as such is subject to its provisions. It relies on s 12(1)(b) of the Pension Funds Act, which provides that no alteration, rescission or addition to the rules of a registered fund shall be valid „unless it has been approved by the Registrar and registered‟ and contends that, until the Registrar approved the amendments embodying the proviso, it was not a valid provision in the rules of the Superannuation Fund and could not be invoked to direct Endumeni to pay an adjusted contribution. The invalidity existed from the time action was commenced until after the close of pleadings (litis contestatio) and could not be cured by the subsequent registration of the amendment. It was accepted that if the point was upheld there was a possibility of the Fund instituting a fresh action but Endumeni adopted the stance that it would cross that bridge when it came to it. [13] In the pleadings the only issue was the wording of the proviso at the relevant time. At the pre-trial conference Endumeni sought and obtained an admission that „through the period from 1 July 2004 until 1 November 2008‟ it read as set out above. Accordingly the parties proceeded to trial on the footing that the proviso was in force throughout the relevant period. On the first day of the trial the parties agreed a list of issues and included this one without any amendment to the pleadings. In so doing they expanded the issues in dispute to go beyond those existing at the close of pleadings. It is permissible for parties to do this in an informal way, as a host of cases demonstrates, but its implications do not appear to have been considered in the present case. [14] The origin of the concept of litis contestatio is the formulary procedure of the Roman law in which the litigants appeared before the praetor, who formulated the issues that the judge had to decide. Once the issues had been formulated the stage of litis contestatio was reached.9 In Government of the Republic of South Africa v Ngubane10 Holmes JA said: „In modern practice litis contestatio is taken as being synonymous with close of pleadings, when the issue is crystallised and joined … And in modern terminology, the effect of litis contestatio is to “freeze the plaintiff's rights as at that moment”.‟ There is no problem with this formulation when parties abide by their pleadings and conduct the trial accordingly. Frequently, however, they do 9 JAC Thomas Textbook on the Roman Law, Chapter VII on the formulary process. P van Warmelo An Introduction to the Principles of Roman Civil Law at 278, para 733. 10 Government of the Republic of South Africa v Ngubane 1972 (2) SA 601 (A) at 608D-E. not do so because other issues arise that they wish to canvass and either formally, by way of an amendment to the pleadings, or informally, as in the present case, the scope of the litigation is altered. Here the defendant sought to add new issues specifically relating to the validity of the amendment that introduced the proviso. Up until then the parties were at one that the proviso was in force and available to be relied on by the Fund, subject to the issues around its interpretation. If the plaintiff‟s rights were frozen at the close of pleadings the basis would have been that the proviso was in force. It would make a mockery of the principles of litis contestatio to permit Endumeni to depart from its previous stance by challenging the validity of the proviso, but to bind the Fund to a factual situation at the close of pleadings that had altered by the time that Endumeni sought to challenge the validity of the proviso. [15] The answer is that when pleadings are re-opened by amendment or the issues between the parties altered informally, the initial situation of litis contestatio falls away and is only restored once the issues have once more been defined in the pleadings or in some other less formal manner. That is consistent with the circumstances in which the notion of litis contestatio was conceived. In Roman law, once this stage of proceedings was reached, a new obligation came into existence between the parties, to abide the result of the adjudication of their case. Melius de Villiers11 explains the situation as follows: „Through litiscontestation an action acquired somewhat of the nature of a contract; a relation was created resembling an agreement between the parties to submit their differences to judicial investigation …' When the parties decide to add to or alter the issues they are submitting to adjudication, then the „agreement‟ in regard to those issues is altered and 11 Melius de Villiers The Roman and Roman Dutch Law of Injuries 236. the consequences of their prior arrangement are altered accordingly. Accordingly, when in this case they chose to reformulate the issues at the commencement of the trial, a fresh situation of litis contestatio arose and the rights of the Fund as plaintiff were fixed afresh on the basis of the facts prevailing at that stage. Those facts were that the amendment embodying the proviso had been registered at least a year earlier with retrospective effect to 1 July 2004, which was prior to all relevant events in this case. Had this been appreciated when the list of issues was prepared the point would not have been taken. It was rightly not suggested that any initial defect in the Fund‟s reliance on the proviso would not be remedied by registration of the amendment prior to litis contestatio. [16] That conclusion renders it unnecessary to consider an argument advanced on behalf of the Fund that s 12(1) of the Act does not apply to it because its rules have their origin in regulations made by the MEC in terms of the governing provincial legislation. The contention has potentially far-reaching implications for the regulation of a number of pension funds in South Africa and it would be undesirable to consider it without the input as amicus curiae of the Registrar of Pension Funds. Although the possibility of a challenge to the retrospectivity of the amendment was raised in Endumeni‟s heads of argument, and it was suggested that the decision in Shell and BP Petroleum Refineries (Pty) Ltd v Murphy NO12 was incorrect, this was not pursued in argument. It is accordingly unnecessary to go into these questions beyond saying that they might require a challenge to the constitutionality of s 12(4) of the Act. I can instead pass to the question of interpretation of the proviso. 12 Shell and BP Petroleum Refineries (Pty) Ltd v Murphy NO 2001 (3) SA 683 (D). The proper approach to interpretation [17] The trial judge said that the general rule is that the words used in a statute are to be given their ordinary grammatical meaning unless they lead to absurdity. He referred to authorities that stress the importance of context in the process of interpretation and concluded that: „A court must interpret the words in issue according to their ordinary meaning in the context of the Regulations as a whole, as well as background material, which reveals the purpose of the Regulation, in order to arrive at the true intention of the draftsman of the Rules.‟ Whilst this summary of the approach to interpretation was buttressed by reference to authority it suffers from an internal tension because it does not indicate what is meant by the „ordinary meaning‟ of words, whether or not influenced by context, or why, once ascertained, this would coincide with the „true‟ intention of the draftsman. There were similar difficulties in the heads of argument on behalf of Endumeni. In one paragraph they urged us, on the basis of the evidence of the actuary who advised the Fund to adopt the approach, that the proviso was not intended to cater for „a Maltman type of event‟ and in another cited authorities for the rule that the „ordinary grammatical meaning of the words used must be adhered to‟ and can only be departed from if that leads to an absurd result. In view of this it is necessary to say something about the current state of our law in regard to the interpretation of statutes and statutory instruments and documents generally. [18] Over the last century there have been significant developments in the law relating to the interpretation of documents, both in this country and in others that follow similar rules to our own.13 It is unnecessary to 13 Spigelman CJ describes this as a shift from text to context. See „From Text to Context: Contemporary Contractual Interpretation‟, an address to the Risky Business Conference in Sydney, 21 March 2007 published in J J Spigelman Speeches of a Chief Justice 1998 – 2008 239 at 240. The shift is apparent from a comparison between the first edition of Lewison The Interpretation of Contracts and add unduly to the burden of annotations by trawling through the case law on the construction of documents in order to trace those developments. The relevant authorities are collected and summarised in Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School.14 The present state of the law can be expressed as follows. Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors.15 The process is objective not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation. In the current fifth edition. So much has changed that the author, now a judge in the Court of Appeal in England, has introduced a new opening chapter summarising the background to and a summary of the modern approach to interpretation that has to a great extent been driven by Lord Hoffmann. 14 Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School 2008 (5) SA 1 (SCA) paras 16 - 19. That there is little or no difference between contracts, statutes and other documents emerges from KPMG Chartered Accountants (SA) v Securefin Ltd & another 2009 (4) SA 399 (SCA) para 39. 15 Described by Lord Neuberger MR in Re Sigma Finance Corp [2008] EWCA Civ 1303 (CA) para 98 as an iterative process. The expression has been approved by Lord Mance SCJ in the appeal Re Sigma Finance Corp (in administrative receivership) Re the Insolvency Act 1986 [2010] 1 All ER 571 (SC) para 12 and by Lord Clarke SCJ in Rainy Sky SA and others v Kookmin Bank [2011] UKSC 50; [2012] Lloyds Rep 34 (SC) para 28. See the article by Lord Grabiner QC „The Iterative Process of Contractual Interpretation‟ (2012) 128 LQR 41. a contractual context it is to make a contract for the parties other than the one they in fact made. The „inevitable point of departure is the language of the provision itself‟,16 read in context and having regard to the purpose of the provision and the background to the preparation and production of the document. [19] All this is consistent with the „emerging trend in statutory construction‟.17 It clearly adopts as the proper approach to the interpretation of documents the second of the two possible approaches mentioned by Schreiner JA in Jaga v Dönges NO and another,18 namely that from the outset one considers the context and the language together, with neither predominating over the other. This is the approach that courts in South Africa should now follow, without the need to cite authorities from an earlier era that are not necessarily consistent and frequently reflect an approach to interpretation that is no longer appropriate. The path that Schreiner JA pointed to is now received wisdom elsewhere. Thus Sir Anthony Mason CJ said: „Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasise the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise.‟19 More recently Lord Clarke SCJ said „the exercise of construction is essentially one unitary exercise‟.20 16 Per Lord Neuberger MR in Re Sigma Finance Corp [2008] EWCA Civ 1303 (CA) para 98. The importance of the words used was stressed by this court in South African Airways (Pty) Ltd v Aviation Union of South Africa & others 2011 (3) SA 148 (SCA) paras 25 to 30. 17 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs & others 2004 (4) SA 490 (CC) para 90. 18 Jaga v Dönges NO & another, Bhana v Dönges NO & another 1950 (4) SA 653 (A) at 662G-663A. 19 K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315. 20 Rainy Sky SA and others v Kookmin Bank supra para 21. [20] Unlike the trial judge I have deliberately avoided using the conventional description of this process as one of ascertaining the intention of the legislature or the draftsman,21 nor would I use its counterpart in a contractual setting, „the intention of the contracting parties‟, because these expressions are misnomers, insofar as they convey or are understood to convey that interpretation involves an enquiry into the mind of the legislature or the contracting parties.22 The reason is that the enquiry is restricted to ascertaining the meaning of the language of the provision itself. Despite their use by generations of lawyers to describe the task of interpretation it is doubtful whether they are helpful. Many judges and academics have pointed out23 that there is no basis upon which to discern the meaning that the members of Parliament or other legislative body attributed to a particular legislative provision in a situation or context of which they may only dimly, if at all, have been aware. Taking Parliament by way of example, legislation is drafted by legal advisers in a ministry, redrafted by the parliamentary draftsmen, subjected to public debate in committee, where it may be revised and amended, and then passed by a legislative body, many of whose members have little close acquaintance with its terms and are motivated only by their or their party‟s stance on the broad principles in the legislation. In those 21 „A slippery phrase‟ according to Lord Watson in Salomon v A Salomon & Co Ltd (1897) AC 22 at 38. For its use see Ebrahim v Minister of the Interior 1977 (1) SA 665 (A) at 677-8 and the authorities there cited; Protective Mining & Industrial Equipment Systems (Pty) Ltd (formerly Hampo Systems (Pty) Ltd) v Audiolens (Cape) (Pty) Ltd 1987 (2) SA 961 (A) at 991F-H; Summit Industrial Corporation v Claimants against the Fund Comprising the Proceeds of the Sale of the MV Jade Transporter 1987 (2) SA 583 (A) at 596G-597B and Manyasha v Minister of Law and Order 1999 (2) SA 179 (SCA) at 185B-C. 22 In Lewison The Interpretation of Contracts (5 ed 2011) para 2.05 the heading reads: „For the purpose of the interpretation of contracts, the intention of the parties is the meaning of the contract. There is no intention independent of that meaning.‟ The whole discussion in this paragraph makes it clear that the international trend in countries with which we share some common heritage is to treat the „intention of the parties‟ as a myth or abstraction remote from the reality of interpretation and unnecessary. 23 The earliest that I have found is Jerome Frank Law and the Modern Mind 29 (6 ed 1960) originally published in 1930. He points out that statutes directed at horse-drawn vehicles before the advent of motor cars were applied to the latter. For a South African instance see S v Sweers 1963 (4) SA 163 (E). circumstances to speak of an intention of parliament is entirely artificial.24 The most that can be said is that in a broad sense legislation in a democracy is taken to be a reflection of the views of the electorate expressed through their representatives, although the fact that democratically elected legislatures sometimes pass legislation that is not supported by or unpopular with the majority of the electorate tends to diminish the force of this point. The same difficulty attends upon the search for the intention of contracting parties, whose contractual purposes have been filtered through the language hammered out in negotiations between legal advisers, in the light of instructions from clients as to their aims and financial advice from accountants or tax advisers, or are embodied in standard form agreements and imposed as the terms on which the more powerful contracting party will conclude an agreement.25 [21] Alive to these difficulties there have been attempts to justify the use of the expression „the intention of the legislature‟ on broader grounds relating to the manner in which legislation is drafted and passed and the relationship between the legislature as lawgiver and the judiciary as the interpreter of laws. Francis Bennion, an eminent parliamentary draftsman and the author of a standard work on statutory interpretation,26 says that „Legislative intention is not a myth or fiction, but a reality founded on the very nature of legislation‟. He bases this on the undoubtedly correct proposition that legislation is the product of the intentional volition of all participants in the legislative process so that: 24 See Lord Nicholls of Birkenhead in „My Kingdom for a Horse: the Meaning of Words‟ (2005) 121 LQR 577 at 589-590. In his judicial capacity he said in R v Secretary of State for the Environment, Transport and the Regions and another, Ex parte Spath Holme Ltd [2001] 2 AC 349 at 395 that the intention of the legislature is „a shorthand reference to the intention which the court reasonably imputes to Parliament in respect of the language used‟. 25 See the discussion of contracts of adhesion by Sachs J in Barkhuizen v Napier 2007 (5) SA 323 (CC) paras 135 - 139. As to the process of preparing contracts see Lord Neuberger MR in Re Sigma Finance Corp, supra, para 100 and Lord Collins in the appeal at para 35. 26 F A R Bennion Bennion on Statutory Interpretation (5 ed 2008) section 164, pp 472-474. „… Acts are produced down to the last word and comma, by people. The law maker may be difficult to identify. It is absurd to say that the law maker does not exist, has no true intention or is a fiction.‟ However, that criticism misses the point. Critics of the expression „the intention of the legislature‟ are not saying that the law-maker does not exist or that those responsible for making a particular law do not have a broad purpose that is encapsulated in the language of the law. The stress placed in modern statutory construction on the purpose of the statute and identifying the mischief at which it is aimed should dispel such a notion. The criticism is that there is no such thing as the intention of the legislature in relation to the meaning of specific provisions in a statute, particularly as they may fall to be interpreted in circumstances that were not present to the minds of those involved in their preparation. Accordingly to characterise the task of interpretation as a search for such an ephemeral and possibly chimerical meaning is unrealistic and misleading. [22] The other objection raised by Bennion,27 that the idea that there is no true intention behind an Act of Parliament is undemocratic, suggests that the debate is being conducted at cross-purposes. In a constitutional democracy such as South Africa, or the United Kingdom, which is Bennion‟s terrain, no-one denies that statutes and statutory instruments emanating from Parliament and other legislative bodies are the product of the democratic process. Interpretation always follows upon the democratic process leading to legislation and is, in that sense, a secondary and subordinate process. The interpreter does not write upon a blank page, but construes the words written by others. Nor is it denied that the broad purpose of the relevant legislative body (or legislator in the case of 27 At p 474. regulations or rules made by a functionary) is highly relevant to the process of interpretation, as is the mischief at which the legislation is aimed. Courts have repeatedly affirmed their importance and thereby respect the legislature‟s role in a democracy. Courts do not set out to undermine legislative purpose but to give it effect within the constraints imposed by the language adopted by the legislature. If „the intention of the legislature‟ was merely an expression used to encompass these matters as a form of convenient shorthand perhaps the matter would not have provoked so much comment. But the problem lies in it being said that the primary or „golden‟ rule of statutory interpretation is to ascertain the intention of the legislature. At one extreme, as has been the case historically, it leads to a studied literalism and denies resort to matters beyond the „ordinary grammatical meaning‟ of the words. At the other judges use it to justify first seeking to divine the „intention‟ of the legislature and then adapting the language of the provision to justify that conclusion.28 It has been correctly said that: „It is all too easy for the identification of purpose to be driven by what the judge regards as the desirable result in a specific case.‟29 When that occurs it involves a disregard for the proper limits of the judicial role. [23] Three Australian judges have sought to explain the use of the expression on other grounds. Gleeson CJ in Singh v The Commonwealth,30 said: 28 Wilson CJ identified the illegitimacy of this latter approach in Richardson v Austin (1911) 12 CLR 463 at 470 where he said: „… As to the argument from the assumed intention of the legislature, there is nothing more dangerous and fallacious in interpreting a statute than first of all to assume that the legislature had a particular intention, and then, having made up one‟s mind what that intention was, to conclude that that intention must necessarily be expressed in a statute, and then proceed to find it.‟ 29 The Hon J J Spigelman AC „The intolerable wrestle: Developments in statutory interpretation‟ (2010) 84 ALJ 822 at 826. Lewison, supra, para 2.06. 30 Singh v The Commonwealth [2004] HCA 43 para 19. Keith Mason J „Legislators‟ Intent: How judges discern it and what do they do when they find it?‟ available at „…references to intention must not divert attention from the text, for it is through the meaning of the text, understood in the light of background, purpose and object, and surrounding circumstances, that the legislature expresses its intention, and it is from the text, read in that light, that intention is inferred. The words “intention”, “contemplation”, “purpose” and “design” are used routinely by courts in relation to the meaning of legislation. They are orthodox and legitimate terms of legal analysis, provided their objectivity is not overlooked.‟ French J31 described the intention of the legislature as „an attributed intention based on inferences drawn from the statute itself‟ and added that it is „a legitimising and normative term‟ that „directs courts to objective criteria of construction which are recognised as legitimate‟.32 In a broad ranging discussion of the concept, Spigelman CJ concludes that it is acceptable because the interpreter is concerned to ascertain the „objective‟ will of the legislature or the contracting parties.33 However, in each instance the expression is being used either as a shorthand reference to something else or to convey a restricted and unrealistic meaning. If interpretation is, as all agree it is, an exercise in ascertaining the meaning of the words used in the statute and is objective in form, it is unrelated to whatever intention those responsible for the words may have had at the time they selected them. Their purpose is something different from their intention, as is their contemplation of the problem to which the words were addressed. http://www.lawlink.nsw.gov.au/lawlink/Supreme_Court/ll_sc.nsf/vwPrint1/SCO_mason021106 quotes Gleeson CJ as saying: „The concept of the intention of Parliament expresses an important constitutional principle rooted in political reality and judicial prudence‟, but I have been unable to trace the reference. 31 Now Chief Justice of the High Court of Australia. 32 NAAV v Minister for Immigration and Multicultural Affairs [2002] 193 ALR 449 (FCA) paras 430 - 433. 33 „The Principle of Legality and the Clear Statement Principle‟ opening address by the Honourable J J Spigelman AC, Chief Justice of New South Wales, to the New South Wales Bar Association Conference „Working with Statutes‟ Sydney, March 2005 available at http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/vwPrint1/SCO_speech_spigelman180 305. [24] The sole benefit of expressions such as „the intention of the legislature‟ or „the intention of the parties‟ is to serve as a warning to courts that the task they are engaged upon is discerning the meaning of words used by others, not one of imposing their own views of what it would have been sensible for those others to say. Their disadvantages, which far outweigh that benefit, lie at opposite ends of the interpretative spectrum. At the one end they may lead to a fragmentation of the process of interpretation by conveying that it must commence with an initial search for the „ordinary grammatical meaning‟ or „natural meaning‟ of the words used seen in isolation, to be followed in some instances only by resort to the context. At the other it beguiles judges into seeking out intention free from the constraints of the language in question and then imposing that intention on the language used. Both of these are contrary to the proper approach, which is from the outset to read the words used in the context of the document as a whole and in the light of all relevant circumstances.34 That is how people use and understand language and it is sensible, more transparent and conduces to greater clarity about the task of interpretation for courts to do the same. [25] Which of the interpretational factors I have mentioned will predominate in any given situation varies. Sometimes the language of the provision, when read in its particular context, seems clear and admits of little if any ambiguity. Courts say in such cases that they adhere to the ordinary grammatical meaning of the words used. However that too is a 34 Spigelman CJ makes the point vividly in the speech referred to in footnote 29 where he said: „Context is always important. … [I]n an adaptation of an example originally propounded by Ludwig Wittgenstein, parents leave their young children in the care of a babysitter with an instruction to teach them a game of cards. The babysitter would not be acting in accordance with these instructions if he or she taught the children to play strip poker. Furthermore, when a nanny is instructed to “drop everything and come running” she would know that it is not intended to apply literally to the circumstance in which she was holding a baby over a tub full of water. As Professor Lon L Fuller said of this example: “Surely we have a right to expect the same modicum of intelligence from the judiciary.”‟(Footnotes omitted.) misnomer. It is a product of a time when language was viewed differently and regarded as likely to have a fixed and definite meaning, a view that the experience of lawyers down the years, as well as the study of linguistics, has shown to be mistaken. Most words can bear several different meanings or shades of meaning and to try to ascertain their meaning in the abstract, divorced from the broad context of their use, is an unhelpful exercise. The expression can mean no more than that, when the provision is read in context, that is the appropriate meaning to give to the language used. At the other extreme, where the context makes it plain that adhering to the meaning suggested by apparently plain language would lead to glaring absurdity, the court will ascribe a meaning to the language that avoids the absurdity. This is said to involve a departure from the plain meaning of the words used. More accurately it is either a restriction35 or extension36 of the language used by the adoption of a narrow or broad meaning of the words, the selection of a less immediately apparent meaning37 or sometimes the correction of an apparent error in the language in order to avoid the identified absurdity.38 [26] In between these two extremes, in most cases the court is faced with two or more possible meanings that are to a greater or lesser degree available on the language used.39 Here it is usually said that the language is ambiguous although the only ambiguity lies in selecting the proper 35 As in Venter v Rex 1907 TS 910; R v Detody 1926 AD 198 at 203; R v Schonken 1929 AD 36 at 42; Bertie van Zyl (Pty) Ltd & another v Minister of Safety and Security & others 2010 (2) SA 181 (CC) para 31. 36 Barkett v SA National Trust & Assurance Co Ltd 1951 (2) SA 353 (AD) at 363; Hanekom v Builders Market Klerksdorp (Pty) Ltd & others 2007 (3) SA 95 (SCA) para 7 37 Melmoth Town Board v Marius Mostert (Pty) Ltd 1984 (3) SA 718 (A) at 728F-H. 38 This possibility is referred to in English cases such as Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98 (HL) at 114-115; Chartbrook Ltd v Persimmon Homes Ltd & Others [2009] UKHL 38; [2009] 4 All ER 677 (HL) paras 14 and 15. 39 That they must be available on the language used is clear. S v Zuma and others 1995 (2) SA 642 (CC) paras 17 and 18. As Kentridge AJ pointed out any other approach is divination rather than interpretation. meaning (on which views may legitimately differ). In resolving the problem the apparent purpose of the provision and the context in which it occurs will be important guides to the correct interpretation An interpretation will not be given that leads to impractical, unbusinesslike or oppressive consequences or that will stultify the broader operation of the legislation or contract under consideration. Construction of the proviso [27] As already mentioned the proviso is not strictly a proviso. In addition it has been inserted at an inappropriate point in the regulations. It has nothing to do with the pensionable emoluments of members. As it deals with the adjustment of an employer‟s contributions it would have been more appropriate for it to have been inserted in regulation 21, perhaps as an additional sub-clause in that regulation. Be that as it may, the fact that it has been located elsewhere does not affect its construction. [28] Starting with the language of the proviso it empowers the committee of the Superannuation Fund to direct a local authority to pay an adjusted contribution in terms of regulation 21. The circumstance in which it may do so is that the pensionable emoluments of a member have at any time increased by an amount in excess of the increase assumed by the fund‟s valuator in the triennial valuation required by regulation 13 and under the Act. Before directing a local authority to pay such an adjusted contribution the committee must obtain the advice of the actuary and may only proceed if the actuary so advises it. [29] The context within which to consider the proviso is provided by the fact that the Superannuation Fund was a defined benefit fund and that at the time of introduction of the proviso in 2004 it had been in deficit for several years. As a result employers were paying a surcharge on their contributions. The circumstances in which this arose require an understanding of the funding of a defined benefit pension fund. [30] In the regular valuations, both triennial and interim, of a defined benefit fund such as the Superannuation Fund, the actuary assesses its financial soundness by making use of conventional actuarial methods.40 The fund is financially sound if the assets match the liabilities. The latter only accrue and become payable over a lengthy future period and fluctuate with membership of the fund and the levels of remuneration of the members. To place a value on these requires the actuary to make an assessment of a number of different factors. Among them are the likely number of members; their years of service; the number who will die, retire or resign in the years ahead; the salary and pension levels payable to them and the likely salary and pension increases they will receive. In undertaking this exercise the actuary will be aware that people may transfer between funds under the general aegis of the Fund, although the Superannuation Fund had been closed to new employees, so that there would be no new members other than by way of transfer from other funds. The actuary makes a number of „best estimates‟ or „reasonable long-term assumptions‟41 of the relevant variables in order to compute its liabilities in the future and then discounts the liabilities so determined to arrive at their present value. A similar exercise needs to be done on the assets of the fund in the light of current contribution rates. At the end of this the actuary can assess the financial soundness of the fund and make recommendations to the committee as to future contribution rates, the 40 Tek Corporation Provident Fund & others v Lorentz 1999 (4) SA 884 (SCA) para 16; Associated Institutions Pension Fund & Another v Le Roux & others 2001 (4) SA 262 (SCA) para 16. 41 The expressions are taken from the statutory valuation of the Superannuation Fund preceding Mr Maltman rejoining it and then resigning. need to raise a surcharge and related issues. If the fund is in deficit a surcharge will need to be imposed in order to ensure its financial soundness. [31] It will be apparent from this that the actuary does not make calculations in respect of each and every member of the fund, but makes an assessment across the whole body of members using appropriate statistical techniques. When the proviso referred to the increase in pensionable emoluments assumed by the actuary, it was therefore not concerned with the increase afforded to any single member. Instead it was concerned with the broad level of increases across the entire body of members at the average rate determined by the actuary. This was clearly set out in each of the valuations in the record. In the relevant valuation as at 31 March 2005 the rate of salary increases allowed for was 6.5 percent per annum plus a small allowance for merit increases. From July 2003 employers had been paying a surcharge of 3 percent of pensionable emoluments and in the 2005 report the actuary recommended that the surcharge increase to 6 percent. The Superannuation Fund was in deficit, as it had been for some years. The actuary attributed this to the fact that salary increases had been substantially in excess of the rate of inflation. The actuary warned that „future excessive salary increases will result in further deficits‟ and that this would result in the surcharge having to increase in the future. It is clear from this report and from the evidence of the actuary, Mr Els, that this had been a persistent problem for several years. [32] Against that background it is plain that the proviso was addressed to the problem of local authorities giving staff increases that were excessive in the light of the assumptions in regard to salary increases made by the actuary. When this occurred the contributions to the fund would not suffice to meet the obligations being incurred under the regulations and the existing deficit in the fund would increase. This would then have to be funded in some way. Originally the only way in which this could be done would be by surcharging all the employers in the Superannuation Fund. The proviso created a further way of addressing this problem. It was focussed on instances where the underfunding could be attributed to excessive increases in pensionable emoluments in a particular local authority. [33] Mr Els testified that the Superannuation Fund experienced difficulties when previously disadvantaged members of the fund received salary increases considerably in excess of those for which allowance had been made in determining the contributions that needed to be made to that fund. This is what led to the introduction of the proviso. As the manoeuvres undertaken by Mr Maltman still lay in the future they were not present to the minds of the actuary and the committee when they sought to have the proviso introduced. Counsel therefore argued that the proviso should not be interpreted to cover Mr Maltman‟s situation, as it was not contemplated by the draftsman of the proviso. But this is precisely the error of construction that flows from saying that the process is one of seeking the intention of the legislature and then relying on the subjective contemplation of those responsible for the legislation. If correct it would have the consequence that, once it was demonstrated that a situation was unforeseen at the time the legislation was introduced, that situation could not be brought within the legislation save by amendment, which as a matter of construction would be unnecessary. The fact that something was not contemplated may occasionally be a factor that may affect ascertaining the meaning of the words used. It cannot, however, operate as a bar to the application of a statutory provision to new or altered circumstances. [34] The primary argument advanced before us was that Mr Maltman‟s pensionable emoluments had been R5 000 per month when he was a member of the Provident Fund, but that from the time he rejoined the Superannuation Fund they had been R34 000 per month. Accordingly it could not be said that his pensionable emoluments as a member of the latter fund had increased, much less increased in excess of the assumptions in regard to salary increases made by the actuary at a time when Mr Maltman had not been a member of the Superannuation Fund. It followed that his conduct did not fall within the terms of the proviso. [35] This is a possible construction of the proviso based on a narrow conception of what constitutes an increase in pensionable emoluments, namely a change in such emoluments whilst the person is a member of the fund. Whilst that will be the normal case it is not the only one. When a person transfers their membership from the Provident Fund to the Superannuation Fund and transfers an accumulated fund from the one to the other, the Superannuation Fund must, in terms of regulation 16(10)(a), calculate their period of service on the basis not only of the amount transferred but also on the basis of an imputed level of pensionable emoluments. The proviso is capable of being construed as including both an increase in pensionable emoluments during the course of membership and an increase from the imputed level of pensionable emoluments on joining the fund to a higher level. In either case, where the level of increase is in excess of the actuarial assessment of the level of increases on which the fund is operating at the time, it results in a funding deficit. [36] Viewed from a purely linguistic standpoint the construction advanced by Endumeni may arguably be the more apparent. However it disregards the context in its entirety. It ignores the purpose of the proviso, which was to address the problem of excessive increases in pensionable emoluments leading to a funding deficit; it creates a distinction that is extremely artificial and it leads to results that are impractical. The Superannuation Fund has no control over the remuneration policies of local authorities. When changes are made to members‟ pensionable emoluments the fund is required to afford them the benefits defined in the regulations that govern its operations. The steps taken by Mr Maltman to obtain the benefit he has had from the fund required in large measure the co-operation of Endumeni. But for Mr Maltman‟s ability, as agreed between him and Endumeni, to adjust his pensionable emoluments with effect precisely from the date when he rejoined the Superannuation Fund the problem could not have arisen.42 That oddity of timing should not prevent the proviso from achieving in this instance its clear purpose. The interpretation that treats both actual and imputed values of pensionable emoluments as forming a basis for the increases referred to in the proviso does not suffer from these problems and is more faithful to the purpose of the proviso. For those reasons I think the expression „should … the pensionable emoluments of a member … increase‟ should be construed as encompassing both actual increases and increases from the imputed level of pensionable emoluments at the time a member transfers into the Superannuation Fund. Endumeni‟s main argument is accordingly rejected. 42 The documents reveal that the Fund was only informed of the adjustment a few weeks after his transfer to the Superannuation Fund on the basis that it would take effect from the date of entry. That illustrates the impracticality of Endumeni‟s contention. [37] The increase from R5 000 per month to R34 000 per month was an increase of over 500 per cent. In a letter to the director of the Fund on 24 January 2007 Mr Els undertook a calculation to determine how many members of the Superannuation and Retirement Funds had received excessive increases falling within the proviso. It is unnecessary to set out details of his calculations. It suffices to say that they erred on the side of generosity in favour of members and local authorities and recommended that action under the proviso should only be taken in cases where the increase in pensionable emoluments exceeded 42 per cent. It was submitted that he undertook the incorrect calculation, but I fail to see how a generous approach that favoured the members and local authorities can be condemned on that ground. This is particularly so in view of the fact that the proviso does not require any calculation to be done. He was also criticised on the basis that when he made the recommendation he had in mind the wording of the proviso not in the form that it is before us but in a further amended form. Assuming that is so the committee took his advice and pursued the present litigation on the proviso in its original form, with Mr Els‟ support as its principal witness. The contention that the jurisdictional pre-requisites for directing Endumeni to pay an adjusted contribution were not present is unsound as the trial judge correctly held. [38] Accepting that Mr Els had advised the Fund to direct Endumeni to pay an adjusted contribution, there was a further string to Endumeni‟s bow. It drew attention to the definition of „actuary‟ in the regulations as meaning: „a Fellow of an institute, faculty, society or chapter of actuaries approved by the Minister and appointed by the committee‟; and the definition of „Minister‟ as referring to the MEC for local government and housing. Mr Els was unable to point to any approval of either the Actuarial Society of South Africa or him personally by the MEC. On that basis it was argued – acknowledging that it was an extremely technical point – that Mr Els was not qualified to be the actuary of the Superannuation Fund in terms of its regulations and accordingly was not a person who could give the advice to the committee that was a pre-requisite to its directing Endumeni to pay an adjusted contribution. [39] This was a further fresh point raised when the issues were reformulated at trial. Prior to that it had been admitted that Mr Els was the actuary duly appointed as such. It is accepted that he is the duly appointed valuator of the Superannuation Fund in terms of s 9A of the Act and, for that purpose, is approved by the Minister of Finance. Mr Kemp SC sought to overcome the problem by submitting that the definition in the regulations is taken directly from the definition of „actuary‟ in the Act prior to its amendment by Act 104 of 1993. Accordingly, and based on the principle that a definition is always subject to a contrary indication in the context,43 he submitted that this must be read as a reference to the Minister of Finance. However, whilst initially plausible, the contention does not stand up to scrutiny in the light of the history of the definition of ‟actuary‟ in the regulations. The history shows that the definition in the regulations originally referred to the „Administrator‟ and not the „Minister‟ and was amended to its present form when the definition of „Minister‟ was introduced after the new provincial governmental structures came into effect with the transition to democracy. The reference to „Administrator‟ cannot possibly have been 43 The principle appears from the headnote to Town Council of Springs v Moosa and another 1929 AD 401, which accurately summarises the legal position as set out at 416-417. taken to refer to the Minister of Finance and equally the amendment can only refer to the MEC. [40] It was argued in the alternative that there must have been at least a tacit approval by the MEC of the Actuarial Society of South Africa and of Mr Els acting as the actuary for the Superannuation Fund. However the evidence in that regard is extremely vague and it raises difficult questions about the exercise of public powers that it is unnecessary to deal with in the light of the conclusion to which I have come on a different approach. If one assumes that the MEC did not approve the Actuarial Society of South Africa or Mr Els as an actuary then it follows that he was not qualified to be appointed to that position by the committee. However, one cannot disregard the fact that he was so appointed and has discharged the functions of actuary to the Superannuation Fund (and the other funds) for a number of years. Nor can one disregard the fact that he is qualified to be the actuary for the fund in terms of the Act and has likewise discharged that function for a number of years. The issue then is whether, accepting the deficiency in his appointment, that invalidates his actions as actuary and in particular the advice he gave to the Fund in terms of the proviso. In my view it does not. It is important to focus on the nature of the alleged defect. It is not that Mr Els is not a qualified actuary. It is that the MEC has not formally approved either of the actuarial societies of which he is a member as bodies, the members of which can be appointed as the actuary of the Superannuation Fund. The defect, if there is one, is one of no practical moment. It would be pointless to require an actuary, belonging to the only recognised society of actuaries in South Africa and approved to act as such under the Act, to obtain a separate authority from a provincial MEC in order to discharge his or her functions, when the Minister of Finance, under the legislation governing pension funds has already approved of persons, situated as Mr Els is, being appointed as actuaries of pension funds in South Africa. The defect is one of form, not one of substance, and I can detect nothing in the regulations that suggests that an appointment lacking the MEC‟s approval renders invalid the actions of the person so appointed.44 Therefore, whether or not there is a technical defect in Mr Els‟ appointment, his actions in discharging the duties of actuary to the Superannuation Fund are not rendered invalid thereby. That disposes of this objection. [41] That brings me to the next argument advanced by Endumeni. It was that where the proviso refers to „an adjusted contribution‟ it must refer to an adjustment of the contribution made by a local authority in terms of regulation 21. The submission was that there is no provision in regulation 21 warranting a lump sum contribution and that the only adjustment permitted by the proviso was an adjustment to the contribution of 1.946 times the contributions payable by members provided for in regulation 21(1)(b). [42] The language of the proviso does not support this contention. In addition it flows from an assumption that is fallacious. That assumption is that the contributions of local authorities are stable periodical payments in the same way as those of members. That is incorrect as demonstrated in paragraph 8 of this judgment. Local authority contributions vary from month to month. There is no practical or principial difference between the committee directing that the contribution for the following month be adjusted by an increase in a specific amount and the committee directing that the contributions for the next twelve months be adjusted by a specific 44 Standard Bank v Estate Van Rhyn 1925 AD 266 at 274; Swart v Smuts 1971 (1) SA 819 (A) at 829C- 830C. monthly uplift of the multiple of 1.946. It would be relatively simple to calculate the amount of the uplift in order to realise the lump sum amount required by the committee to resolve a situation of underfunding. Yet it was accepted that the latter form of adjustment was permissible and contended that the former was not. That is not a sensible construction of the provision. [43] There was one further argument on behalf of Endumeni. It was that where the proviso refers to „the local authority employing such member‟, that requires the member to be employed by the local authority when the proviso is invoked. The basis for this contention is that the word „employing‟ is a present participle, but this ignores the fact that a present participle may properly be used in relation to both present and past situations.45 Here it is plainly used to identify the local authority at the time of the excessive increase in pensionable emoluments. That is the local authority that it is appropriate to fix with liability to pay an adjusted contribution. It also avoids the situation that the entitlement to invoke the proviso is subject to such an uncertain factor as the continued employment of the employee in question. The eccentric results that flow from that construction are illustrated by the case of a member like Mr Maltman, who resigns, or dies, or reaches pensionable age. On their doing so – something of which the management of the fund will only become aware after it has occurred and an entitlement to benefits has arisen – the entitlement to invoke the proviso would fall away. However the enhanced benefits secured by the excessive increase would still have to be paid and would remain unfunded. That is not a sensible construction, whereas the alternative that this relates to the employer at the time of the increase is perfectly sensible. 45 A simple example is „the girl is reading/the girl was reading‟. [44] The committee of the Superannuation Fund was accordingly entitled to direct Endumeni to pay an adjusted contribution to the fund arising out of the increase in Mr Maltman‟s pensionable emoluments. The appeal must therefore succeed. The parties agreed that in that event judgment must be entered in favour of the Fund in an amount of R2 573 740. Any judgment must bear interest from the date of mora. The direction to pay the adjusted contribution was given on 28 September 2007 and rejected on 15 October 2007. The latter is the appropriate date from which mora commenced. [45] In the result it is ordered that: The appeal succeeds with costs, such costs to include those consequent upon the employment of two counsel. The order of the trial court is set aside and replaced by the following order: „Judgment is granted in favour of the plaintiff and against the defendant for: 1 Payment of the sum of R2 573 740; 2 Interest on the said sum of R2 573 740 at a rate of 15.5% per annum from 15 October 2007 to the date of payment; 3 Costs of suit, such costs to include those consequent upon the employment of two counsel.‟ M J D WALLIS JUDGE OF APPEAL Appearances For appellant: Kemp J Kemp SC (with him H S Gani) Instructed by: J Leslie Smith & Co, Pietermaritzburg; Locally represented by: Honey Attorneys Inc, Bloemfontein For respondent: M Pillemer SC (with him P Blomkamp) Instructed by: Acutt & Worthington, Dundee; Locally represented by: Webbers, Bloemfontein.

Supreme Court of Appeal of South Africa MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 16 March 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Natal Joint Municipal Pension Fund v Endumeni Municipality The SCA today upheld a claim by the Natal Joint Municipal Pension Fund for payment of an adjusted pension contribution by the Endumeni Municipality. The claim arose in consequence of a municipal employee exploiting the rules of the Provident and Superannuation Funds administered by the appellant to secure that he was credited with 46 years of pensionable service in the Superannuation Fund, although e was only 43 years old and had only worked for the municipality for some 15 years. He then resigned his employment and was immediately re-employed on a contract basis in his former position. However, as a result of his resignation he became entitled to a payment from the fund of some R2.7 million. The Fund sought an adjusted contribution from the municipality to cover the shortfall in funding of this withdrawal benefit. The municipality successfully resisted this claim in the lower court on the grounds that the claim was impermissible in terms of the applicable rule of the Fund. However on appeal the claim succeeded. As a result the municipality will have to pay an additional contribution to the Fund of some R2.4 million together with interest and costs.

2801

non-electoral

2012

REPORTABLE THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 735/2011 In the matter between: THE CITY OF JOHANNESBURG Appellant and CHANGING TIDES 74 (PTY) LTD First Respondent THE UNLAWFUL OCCUPIERS OF TIKWELO HOUSE, NO 48 AND 50 DAVIES STREET, DOORNFONTEIN, JOHANNESBURG) 2nd to 98th Respondents THE SOCIO-ECONOMIC RIGHTS INSTITUTE OF SOUTH AFRICA Amicus Curiae Neutral citation: City of Johannesburg v Changing Tides 74 (Pty) Ltd and 97 others (The Socio-Economic Rights Institute of South Africa intervening as amicus curiae)(735/2011)[2012] ZASCA 116 (14 September 2012) Coram: MTHIYANE DP, LEWIS, TSHIQI, WALLIS and PETSE JJA. Heard: 21 August 2012 Delivered: 14 September 2012 Summary: Eviction in terms of Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) – relationship between ss 4(6) and (7) – joinder of local authority – whether required or permissible – power of court to make an order that is just and equitable – enquiry to be undertaken by court – obligations of applicant, local authority and respondents discussed. ORDER On appeal from: South Gauteng High Court (Wepener J sitting as court of first instance) it is ordered that: The appeal is upheld and each party is ordered to pay its or their own costs of appeal. Paragraph 2 of the order of the high court is declared to be legally ineffective. Paragraphs 3 and 4 of the high court’s order are set aside. The application for eviction is remitted to the high court in order for it to determine the date upon which all of the occupiers of Tikwelo House are to be evicted from that building, the terms upon which the City is to provide temporary emergency accommodation to the persons referred to in paragraph 5(b) below of this order, any other conditions attaching to that eviction order and the costs of the application. The remittal is subject to the following further orders: (a) The attorneys for the occupiers, the Legal Resources Centre (the LRC), are directed on or before 30 September 2012 to furnish the attorneys for the City of Johannesburg with a list of those of its clients who, as a result of their eviction from Tikwelo House, will require temporary emergency accommodation, together with their names, ages, family circumstances, sources of income and appropriate proof of identity. The list and those details shall be confirmed by an affidavit of information and belief from a representative of the LRC and where possible by affidavits from the occupiers referred to therein. (b) It is declared that the City of Johannesburg is obliged to provide all of the persons whose names appear on that list with temporary emergency accommodation by no later than two weeks prior to the date of the eviction order to be determined by the high court. (c) The City of Johannesburg is directed, by no later than 31 October 2012, to deliver a report to the high court, confirmed on affidavit by an appropriate official of the City, detailing the accommodation that it will make available to the occupiers and when such accommodation will be available and containing an undertaking to make that accommodation available. That accommodation must be in a location as near as feasibly possible to the area where Tikwelo House is situated and the report must specifically deal with the issue of proximity and explain why the particular location and form of accommodation has been selected. It must also set out the steps taken during the two months before the report is filed to engage with the occupiers through the LRC or any other means that may appear appropriate. (d) The occupiers are entitled by no later than 30 November 2012 to deliver affidavits dealing with the contents of the City’s report and specifying any objections thereto and the City is entitled within two weeks thereafter to deliver such further affidavits as it deems appropriate. (e) The application must then be set down on the opposed roll for hearing. If at any stage there is non-compliance with the provisions of this order, Changing Tides (Pty) Ltd is authorised to set the matter down for hearing for appropriate relief. JUDGMENT WALLIS JA (MTHIYANE DP, LEWIS, TSHIQI and PETSE JJA concurring) Introduction [1] This case illustrates the difficulties that confront a court of first instance faced with an application for an eviction order and seeking to give effect to constitutional prescripts. As will emerge, the judge in the high court sought to address the issue by granting an order, at the instance of the applicant, that adapted an order made by this court in a similar case. By the conclusion of argument all counsel who appeared before us agreed that in doing so he erred. That is a view we share and results in the appeal being upheld to some extent and a remittal of the case to the high court on terms set out in the order. But first it is necessary to set out the facts giving rise to the appeal. [2] The first respondent, Changing Tides 74 (Pty) Ltd (Changing Tides), owns Tikwelo House. The building was formerly a factory or warehouse. Some years ago, when under different ownership and in circumstances that Changing Tides is unable to explain, people started to live there. The interior was divided into flats using rudimentary partitioning. Whether the original owners were party to this or whether its occupation occurred through people desperate for a roof over their heads simply taking possession of the building is not known. Whilst the building was in the hands of its previous owners, third parties took control of access to it and let rooms and collected rentals from the occupiers. They now maintain that control as against Changing Tides by force or the threat of force. This phenomenon is appropriately described as the hijacking of the building. Tikwelo House is unsuited to human habitation and in a state of disrepair, with no toilet or ablution facilities, no water supply or sewage disposal, illegal electricity connections, inadequate ventilation and refuse, including human waste, strewn in open spaces. Counsel who appeared for the occupiers said that they accept that it is a death trap and that it is in no-one’s interests that they continue to live there. It is a health and fire hazard and the local police claim that it is a focus for illegal activities. The appellant, the City of Johannesburg (the City), has given Changing Tides notice to comply with the public health and emergency service by-laws as well as the provisions of the National Building Regulations and Building Standards Act 103 of 1977 and has commenced proceedings against Changing Tides to compel compliance with its demands. [3] Changing Tides has no responsibility for this situation. In late 2007 it acquired this property and three others in settlement of debts owed to associated entities by the previous owner and their shareholders. Its intention was to redevelop the four properties. Whilst it has tried to obtain control over the property the hijackers have prevented it from doing so. Its only presence on the property takes the form of a single security guard whose principal function is to observe what is happening there. A previous attempt in 2008 to obtain an eviction order was unsuccessful. On 6 April 2011 it commenced the present proceedings to obtain possession of the building. It cited as respondents all the occupiers of the building and furnished the names (often in truncated form) of 97 individuals in a list attached to the notice of motion, stating that, apart from those names, particulars of the respondents were not known to it. It also cited the City, contending that the latter had a direct and substantial interest and that in eviction proceedings of this nature the joinder of the City was inevitable. [4] The application was not opposed. It came before Wepener J in the South Gauteng High Court on 14 June 2011. Both Changing Tides and the City were represented, the former by counsel and the latter by its attorney. Counsel for Changing Tides sought an amended order the principal purpose of which was to take account of the judgment of this court in Blue Moonlight.1 The City opposed this on the grounds that the Blue Moonlight judgment was under appeal to the Constitutional Court,2 but the judge held himself bound by the judgment of this court. He accordingly granted, in addition to an eviction order, a further order that the sheriff prepare a ‘matrix’ (more accurately a schedule) of information concerning ‘each occupier and their household members’ as specified in the order and an order that the City provide the occupiers whose names appeared in that schedule with temporary emergency accommodation. The City was ordered to pay the costs of the sheriff in preparing the schedule of information. [5] On 12 October 2011, shortly before the Constitutional Court delivered its judgment in Blue Moonlight,3 the judge granted leave to appeal against the order for the provision of temporary emergency 1 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd & another 2011 (4) SA 337 (SCA). 2 The appeal was due to be heard on 11 August 2011. 3 The judgment was delivered on 1 December 2011 and is reported as City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd & another 2012 (2) SA 104 (CC) (hereafter Blue Moonlight CC). accommodation and the costs order against the City. Although the occupiers of the building had thus far played no part in the proceedings, counsel appeared on their behalf to oppose the grant of leave to appeal. They did not, however, seek leave to appeal against the eviction order nor did they signify an intention to seek the rescission of the eviction order. The matter before us is therefore an appeal against only those parts of the high court’s order already mentioned. Prior to the appeal we received an application by the Socio-Economic Rights Institute of South Africa to intervene as amicus curiae and that was granted on the basis that they would make written submissions and address brief oral argument. The order [6] The limited ambit of this appeal occasioned considerable difficulties. It is therefore necessary to consider the full terms of the court’s order. It reads: '1. The First to Ninety Seventh Respondents and all persons occupying through them (collectively 'the occupiers') are evicted from the immovable property situated at numbers 48 and 50 Davies Street, Doornfontein, Johannesburg and described as Erfs 150 and 151 Doornfontein Township, Registration Division I.R., Gauteng more commonly known as Tikwelo House. 2. The Sheriff alternatively his duly appointed Deputy together with such assistance as he deems appropriate including the South African Police Services is ordered and authorised to enter into Tikwelo House at no 48 and 50 Davies Street Doornfontein Johannesburg in order to compile a 'matrix' of information in respect of each occupier and their household members including children ('the occupiers') consisting of the information listed below and to furnish a copy of such matrix to the Applicant and the 98th respondent as well as file a copy thereof in the Court file, within in 15 days of this order: 1.1 Full names; 1.2 Nationality and language preference; 1.3 Date on which they allege to have taken occupation in the building; 1.4 Occupation; 1.5 Identity number supported by copy of identity document or document which positively identify the occupier; 1.6 Income supported by payslip if possible; 1.7 Number and name of dependent occupiers; 1.8 Age 1.9 Whether the occupier has applied for State-assisted relief in terms of the RDP Programme or any other State sponsored programme, and proof of such application. 3. The 98th Respondent is ordered to provide those occupiers whose names appear in the matrix to be compiled by the Sheriff of the Court aforementioned with temporary emergency accommodation as decant in a location as near as feasibly possible to the area where the property is situated, provided that they are still resident at the property and have not voluntarily vacated it as of 14th August 2011, by which date the occupiers are to vacate, failing which the Sheriff of the court is ordered to evict them. 4. The 98th Respondent is to pay the costs of the Sheriff in respect of compiling, delivering and filing the matrix aforementioned.' [7] The first difficulty is that as a result of a drafting error the eviction order in paragraph 1 appears to relate only to the persons named in the list annexed to the notice of motion and not to all the occupiers of the building, although the application had been directed at all the occupiers. Counsel for Changing Tides informed us that the notices in terms of ss 4(2) and (5) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) were directed at and served, in accordance with an order in terms of s 4(4) of PIE, on all the occupiers. Paragraphs 2 and 3 of the order are clearly directed at an eviction of all the occupiers, notwithstanding the apparently restricted ambit of paragraph 1. No-one appears to have noticed this and the heads of argument in the appeal were delivered on the basis that the order granted related to all occupiers and not simply those referred to as the first to ninety seventh respondents. There was accordingly an internal contradiction in the order itself. [8] The next difficulty is that in terms of paragraph 2 of the order the sheriff was directed, with the assistance of the South African Police if required, to enter Tikwelo House and compile the schedule of information regarding the occupiers and their personal circumstances. This is not the proper function of the sheriff. Those functions are prescribed by statute.4 In the high court it is to execute all sentences, decrees, judgments, writs, summonses, rules, orders, warrants, commands and processes of the court and make return of the manner of execution thereof to the court and any party at whose instance the sheriff was acting.5 Paragraph 2 of the order of the high court requires the sheriff to procure and assemble information to enable the City to discharge its constitutional obligations to persons evicted from Tikwelo House and rendered homeless by their eviction. That is not a function of the sheriff and it cannot be made the function of the sheriff by incorporating the obligation in a court order. [9] There is the further difficulty that, apart from any tacit coercion that may arise from the sheriff being accompanied by the police, there is no obligation on the occupiers to furnish the information required to draw up the proposed schedule. If this building is a centre for criminal activities and, as suggested by the City, houses a number of illegal immigrants, I fail to see on what basis it can be thought that, other than a few, the occupiers will meekly provide the sheriff with the information set out in paragraph 2 of the order. In addition those who have hijacked 4 Section 3(1) of the Sheriffs Act 90 of 1986 as read with other statutes defining those functions. 5 Section 36(1) of the Supreme Court Act 59 of 1959. the building and have an interest in obstructing the eviction of the occupiers may threaten the occupiers or worse if they co-operate with the sheriff. That part of the order was accordingly improvidently sought and erroneously granted. It is therefore a nullity.6 [10] That conclusion on its own inevitably means that paragraphs 3 and 4 of the high court order cannot stand, as they are dependent on the fulfilment by the sheriff of the obligations set out in paragraph 2 of the order. There are, however, other reasons why that must be the outcome of this appeal. Whilst the judge was correct to accept that he was bound by and needed to apply the decision of this court in Blue Moonlight, he overlooked the fact that there were differences between that case and the one before him. There the occupiers were identified and represented and had placed undisputed information before the court regarding their personal circumstances that demonstrated that, if evicted, they would be rendered homeless. That type of information was not available to Wepener J in this matter. No doubt he relied on the knowledge that any reasonably perceptive person would have that, in a situation such as prevailed at Tikwelo House, it was overwhelmingly probable that the occupiers would be extremely poor and might well be rendered homeless by eviction. However, without greater detail as to their circumstances and their needs if evicted – the needs of a family with three children being different from those of three young men sharing living quarters – he could not be satisfied that the order he was making was just and equitable, that the timing of the eviction order was just and equitable or that the conditions he was attaching to it were appropriate. Whilst he knew from the affidavits that there were children living in the building, and it was reasonable for him to assume that there might well be 6 Motala v The Master 2012 (3) SA 325 (SCA) paras 11-14. households headed by women, he lacked information relevant to the assessment of the factors specified in s 4(7) of PIE. The absence of that information precluded a proper exercise of his discretion.7 For those reasons these two paragraphs of his order must be set aside. The debate before us centred on what should take their place. In order to determine that it is necessary to examine the current state of our law in regard to evictions. The legal framework [11] In terms of s 4(7) of PIE an eviction order may only be granted if it is just and equitable to do so, after the court has had regard to all the relevant circumstances, including the availability of land for the relocation of the occupiers and the rights and needs of the elderly, children, disabled persons and households headed by women. If the requirements of s 4 are satisfied and no valid defence to an eviction order has been raised the court ‘must’, in terms of s 4(8), grant an eviction order. When granting such an order the court must, in terms of s 4(8)(a) of PIE, determine a just and equitable date on which the unlawful occupier or occupiers must vacate the premises. The court is empowered in terms of s 4(12) to attach reasonable conditions to an eviction order. [12] There does not appear to have been a consideration of the precise relationship between the requirements of s 4(7), (or s 4(6) if the occupiers have been in occupation for less than six months), and s 4(8) in the context of an application for eviction at the instance of a private landowner. In some judgments there is a tendency to blur the two enquiries mandated by these sections into one. The first enquiry is that 7 Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217 (CC) para 32; Occupiers, Shulana Court, 11 Hendon Road, Yeoville, Johannesburg v Steele [2010] 4 All SA 54 (SCA) paras 11 and 14. under s 4(7), the court must determine whether it is just and equitable to order eviction having considered all relevant circumstances. Among those circumstances the availability of alternative land and the rights and needs of people falling in specific vulnerable groups are singled out for consideration. Under s 4(8) it is obliged to order an eviction ‘if the … requirements of the section have been complied with’ and no valid defence is advanced to an eviction order. The provision that no valid defence has been raised refers to a defence that would entitle the occupier to remain in occupation as against the owner of the property, such as the existence of a valid lease. Compliance with the requirements of section 4 refers to both the service formalities and the conclusion under s 4(7) that an eviction order would be just and equitable.8 In considering whether eviction is just and equitable the court must come to a decision that is just and equitable to all parties.9 Once the conclusion has been reached that eviction would be just and equitable the court enters upon the second enquiry. It must then consider what conditions should attach to the eviction order and what date would be just and equitable upon which the eviction order should take effect. Once again the date that it determines must be one that is just and equitable to all parties. [13] Two factors that have loomed large in our case law on evictions, both under PIE and otherwise, are the risk of homelessness and the availability of alternative land or accommodation. In the case of occupations of public land10 and evictions at the instance of public bodies,11 the emphasis has fallen on the constitutional obligations of the 8 ABSA Bank Ltd v Murray & another 2004 (2) SA 15 (C) para 19. 9 Ibid, para 21; Port Elizabeth Municipality v Various Occupiers, supra, para 13. 10 Government of the Republic of South Africa & others v Grootboom 2001 (1) SA 46 (CC). 11 Baartman & others v Port Elizabeth Municipality 2004 (1) SA 560 (SCA) and on appeal from it Port Elizabeth Municipality v Various Occupiers, supra; Occupiers of 51 Olivia Road, Berea Township and 197 Main Street, Johannesburg v City of Johannesburg & others 2008 (3) SA 208 (CC); Residents of arms of government mandated to address the housing needs of the people affected by the eviction, and in particular to address the plight of those who face an emergency situation of homelessness. The starting point is the judgment in Grootboom where a declaratory order was made that the State was obliged to develop a programme, including the provision of relief for people who had no access to land, no roof over their heads and were living in intolerable circumstances. In Port Elizabeth Municipality the Constitutional Court upheld an order of this court that an eviction order from privately owned land, at the instance of the local authority, should not have been made when it was unclear whether the alternative accommodation being offered by the municipality would afford a reasonable measure of security of tenure. In Olivia Road it endorsed a settlement agreement concluded between the municipality and the occupiers of the building, after a process of mediation, that provided for the occupiers to vacate the building, and in Joe Slovo it crafted an elaborate eviction order under which the evictees were to be relocated elsewhere; there was to be engagement between the municipality and the residents and the entire process was subject to supervision by the court. The difficulties facing courts in this regard are illustrated by the fact that some 21 months later the Constitutional Court discharged the order in its entirety.12 [14] The disparate situations in each of these cases means that care must be taken in simply transposing either what was said in the judgments, or the orders that were made, to other different situations, where those statements may have less application and those solutions may be Joe Slovo Community, Western Cape v Thubelisha Homes & others (Centre on Housing Rights and Evictions & another, amici curiae) 2010 (3) SA 454 (CC) (hereafter Joe Slovo). 12 Residents of Joe Slovo Community, Western Cape v Thubelisha Homes & others (Centre on Housing Rights and Evictions & another, amici curiae) 2011 (7) BCLR 723 (CC). inappropriate. What is clear and relevant for present purposes is that the State, at all levels of government, owes constitutional obligations to those in need of housing and in particular to those whose needs are of an emergency character, such as those faced with homelessness in consequence of an eviction. Those obligations arise under s 26 of the Constitution and exist separately from any question of whether it is just and equitable for a court to grant an eviction order. As Harms DP said in City of Johannesburg v Rand Properties (Pty) Ltd & others,13 in relation to persons in crisis with no access to land, no roof over their heads and living in intolerable conditions: ‘Eviction, at the very least, triggers an obligation resting on the city to provide emergency and basic shelter to any affected respondent.’ [15] Where the eviction takes place at the instance of an organ of state in circumstances to which PIE is applicable the court can only order eviction if it is satisfied that it is just and equitable to do so after having regard to all relevant factors including those set out in s 6(3) of PIE, namely the circumstances in which the occupiers came to occupy the land and erect structures thereon; the period they have resided on the land and the availability of suitable alternative accommodation or land. The last of these has been held to be vital to the justice and equity evaluation and a crucial factor in the enquiry.14 It cannot, however, be the sole enquiry nor, notwithstanding its importance, is it absolutely decisive. The Constitutional Court has on several occasions stressed that, in the present situation in South Africa, where housing needs are so great and resources so limited, there cannot be an absolute right to be given 13 City of Johannesburg v Rand Properties (Pty) Ltd & others 2007 (6) SA 417 (SCA) para 47. The Olivia Road judgment (fn 10 ante) is the appeal from this decision. 14 Joe Slovo para 105(c) per Yacoob J and para 161 per Moseneke DCJ. accommodation.15 Specifically in regard to s 6(3)(c) of PIE, which requires the court to have regard to the availability of alternative accommodation or land, it has said that there is no unqualified constitutional duty on local authorities to ensure that there cannot be an eviction unless alternative accommodation has been made available.16 The correct position appears to be, as explained by O’Regan J in Joe Slovo,17 that an eviction order in circumstances where no alternative accommodation is provided is far less likely to be just and equitable than one that makes careful provision for alternative housing. Neither PIE nor s 26 of the Constitution provides an absolute entitlement to be provided with accommodation. In some circumstances a reasonable response to potentially homeless people may be to make permanent housing available and in others it may be reasonable to make no housing at all available.18 In all of this the court will have to be mindful of all other relevant factors including the resources available to provide accommodation.19 [16] The issue of the availability of alternative accommodation is more difficult in the context of an eviction at the instance of an owner of property that is not an organ of state. There another constitutionally protected right, the right to property,20 comes into play. As pointed out in this court in Ndlovu v Ngcobo: Bekker & another v Jika21 the effect of PIE is not to expropriate private property. What it does is delay or suspend the exercise of the owner’s rights until a determination has been made whether an eviction would be just and equitable and under what 15 Grootboom para 95 16 Port Elizabeth Municipality para 28. 17 Joe Slovo, para 313. 18 Olivia Road para 18. 19 Grootboom para 46. 20 Section 25 of the Constitution. 21 Ndlovu v Ngcobo: Bekker & another v Jika 2003 (1) SA 113 (SCA) para 17; Wormald NO & others v Kambule 2006 (3) SA 562 (SCA) para 15. conditions. The Constitutional Court endorsed that approach in Blue Moonlight.22 [17] That situation differs from the case where an organ of state seeks the eviction. In such a case it is almost always also the body responsible for providing alternative accommodation. The majority of cases where an organ of state asks for an eviction order will involve departments at various levels of government, that are either themselves responsible for the provision of housing or, if not, are nonetheless closely linked to departments that do bear that responsibility. In those circumstances to link the availability of alternative land or accommodation to the ability to obtain an eviction order is relatively straightforward. It will generally only be just and equitable to grant an eviction order at the instance of one arm of the state, if the related arm of the state bearing the obligation to attend to the housing needs of the population is able and willing to address the consequences of that eviction by ensuring that alternative land or accommodation is available to those evicted. Conversely eviction will ordinarily not be just and equitable in that situation if alternative land or accommodation is not made available. [18] The position is otherwise when the party seeking the eviction is a private person or entity bearing no constitutional obligation to provide housing. The Constitutional Court has said that private entities are not obliged to provide free housing for other members of the community indefinitely, but their rights of occupation may be restricted, and they can 22 Blue Moonlight CC para 40. The right of property owners is not absolute. One can imagine cases where it would not be just and equitable to grant an eviction order at the instance of a private landowner, as in the case of a small portion of undeveloped land that the owner had allowed to be occupied for many years by former employees, who were now aged, in circumstances where the owner was not inconvenienced by their presence. But that situation has nothing to do with the availability of alternative land or accommodation. be expected to submit to some delay in exercising, or some suspension of, their right to possession of their property in order to accommodate the immediate needs of the occupiers. That approach makes it difficult to see on what basis the availability of alternative land or accommodation bears on the question whether an eviction order should be granted, as opposed to the date of eviction and the conditions attaching to such an order. One can readily appreciate that the date of eviction may be more immediate if alternative accommodation is available, either because the circumstances of the occupiers are such that they can arrange such accommodation themselves, or because the local authority has in place appropriate emergency or alternative accommodation. Conversely, justice and equity may require the date of implementation of an eviction order to be delayed if alternative accommodation is not immediately available. It is, however, difficult to see on what basis it affects the question whether it is just and equitable to make such an order. Perhaps in a case, where the occupiers would be entitled to a lengthy period of notice before being required to vacate, the unavailability of alternative land or accommodation might operate as a factor to persuade the court that the issue of an eviction order, at the stage that the application came before it, would not be just and equitable, but such cases are likely to be rare.23 This does not mean that courts may disregard the question of the availability of alternative land or accommodation – that would ignore the express requirements of s 4(7) – but the weight this factor will carry in making the initial decision whether an eviction order is just and equitable may not be great. 23 If the landowner had no immediate or even medium term need to use the property and it would simply be sterilised by an eviction order, the court could legitimately hold the view that it was not just and equitable at that time to grant an eviction order. That would be reinforced by a lack of availability of alternative land. [19] In most instances where the owner of property seeks the eviction of unlawful occupiers, whether from land or the buildings situated on the land, and demonstrates a need for possession and that there is no valid defence to that claim, it will be just and equitable to grant an eviction order. That is consistent with the jurisprudence that has developed around this topic. In Ndlovu v Ngcobo,24 Harms JA made the point that ownership and the lack of any lawful reason to be in occupation are important factors in the exercise of the court’s discretion. In the Modderklip Boerdery case25 Marais J carefully weighed the different factors and granted an eviction order. His order was upheld by this court26 and not questioned in the Constitutional Court.27 The eviction order granted by this court in Rand Properties28(not a PIE case, but one in which the circumstances relating to the building were similar) was set aside by the Constitutional Court in Olivia Road,29 but on the grounds of the lack of engagement between the municipality and the occupiers, not its appropriateness. In Blue Moonlight an eviction order was granted at first instance and confirmed subject to different conditions in this court and the Constitutional Court.30 [20] Where the eviction is sought by a private landowner the availability of alternative land or accommodation assumes greater 24 Para 17. 25 Modderklip Boerdery (Pty) Ltd v Modder East Squatters & another 2001 (4) SA 385 (W). 26 Modderfontein Squatters, Greater Benoni City Council v Modderklip Boerdery (Pty) Ltd (Agri SA and Legal Resources Centre, Amici Curiae): President of the Republic of South Africa & others v Modderklip Boerdery (Pty) Ltd (Agri SA and Legal Resources Centre, Amici Curiae) 2004 (6) SA 40 (SCA) para 48. 27 President of the Republic of South Africa & another v Modderklip Boerdery (Pty) Ltd (Agri SA & others, Amici Curiae) 2005 (5) SA 1 (CC). 28 Footnote 12, ante. 29 Footnote 10, ante. 30 See also Occupiers of Skurweplaas 353 JR v PPC Aggregate Quarries (Pty) Ltd & others 2012 (4) BCLR 382 (CC). At first instance there are the judgments in ABSA Bank Ltd v Murray & another, supra; Davids & others v Van Straaten & others 2005 (4) SA 468 (C) and Jackpersad NO & others v Mitha & others 2008 (4) SA 522 (D). importance in the second enquiry, namely, what is a just and equitable date for eviction? It is here that the constitutional obligations of the appropriate arm of government – in our cities this is inevitably the municipality – come into focus and assume their greatest importance. The reason is that, even if it is just and equitable to grant an eviction order that is not the end of the enquiry, because any eviction order must operate from a date fixed by the court and that date must be one that is just and equitable. [21] Accordingly the availability of alternative land or accommodation is relevant to both enquiries into what is just and equitable. That link between the first and second stages of the enquiry underpins the numerous decisions in which our courts have held that, before determining whether an eviction order should be granted, the relevant authorities must be engaged in order to ensure that they will discharge their obligations to the evictees. I need mention only four of the leading decisions in that regard. The first in point of time is the Port Elizabeth Municipality case in the Constitutional Court. That stressed the need for courts to ensure that as far as possible they are fully informed of the relevant facts in order properly to discharge their function of determining whether an eviction order should be issued and if so on what terms.31 It mandated a more active role of case management for courts hearing applications for eviction32 including the need to consider whether mediation in terms of s 7 of PIE might be appropriate.33 31 Para 32. 32 Paras 36-37. 33 See the discussion in paras 39-47. Mediation was not ordered in that case but a court mandated process of engagement led to a settlement in Olivia Road. [22] This court adopted the same approach in The Occupiers of Erf 101, 102, 104 and 112, Shorts Retreat, Pietermaritzburg v Daisy Dear Investments (Pty) Ltd & others.34 There an eviction order was sought in relation to a well-established community of some 2000 people, who had indicated their willingness to move from the land and even identified a potential site to which they could possibly move. The local authority had demanded that the owner evict the occupiers, but was not joined and simply filed a report saying that it could not accommodate the potential evictees or identify other land to which they could move. This court, at the request of the parties, made an order setting aside the eviction order that had been granted; joining the municipality as a party and ordering the municipality to file a report, confirmed on oath, dealing with the availability of alternative land and emergency accommodation; the consequences of an eviction order if no alternative land or emergency accommodation could be made available and setting out the steps that could be taken to alleviate the effects of the occupation of the property if the occupiers were not immediately evicted. The court held that the absence of information in regard to these matters meant that relevant information was not taken into account in determining whether the eviction was just and equitable and accordingly ‘the eviction order was premature’.35 Clearly the court was concerned with both of the just and equitable enquiries required by s 4 of PIE in reaching that conclusion. [23] The next case is that involving the occupiers of Shulana Court.36 Here an application for eviction from a building similar to Tikwelo House was granted by default. An application for rescission of the default 34 Occupiers of Erf 101, 102, 104 and 112, Shorts Retreat, Pietermaritzburg v Daisy Dear Investments (Pty) Ltd & others [2009] 4 All SA 410 (SCA). 35 Para 10. 36 Occupiers, Shulana Court, 11 Hendon Road, Yeoville, Johannesburg v Steele [2010] 4 All SA 54 (SCA). judgment was refused. The appeal against that refusal was upheld because the court dealing with the eviction application did not possess the information referred to in s 4(7) of PIE, nor did it know what alternative accommodation was available for evictees who might find themselves in an emergency situation in consequence of their eviction. The circumstances in which the occupiers were living indicated the likelihood that at least some of them might be rendered homeless as a result of their eviction. Accordingly the municipality should have been engaged in the process before granting an eviction order. For those reasons the court that granted the eviction order had not done what was required of it in terms of s 4(7) of PIE and, by failing to investigate matters further, in particular the issue of possible homelessness, it had failed to discharge its constitutional obligations.37 [24] Lastly there is the recent decision of the Constitutional Court in Occupiers of Mooiplaats v Golden Thread Ltd & others38 handed down shortly after its judgment in Blue Moonlight. Again that was a case where the court had granted an eviction order without investigating the possibility of it resulting in homelessness, or whether mediation involving the owner, the occupiers and the municipality might have led to a resolution of the dispute or ameliorated the plight of the occupiers. The eviction order was set aside on the basis that it could not be said that an eviction order was just and equitable. The case was remitted to the high court to obtain a report from the municipality about the housing situation of the occupiers; the possibility of homelessness if they were evicted; the provision of alternative land or accommodation; the consequences of an 37 Paras 14 and 15. The obiter remark in the first sentence of para 16 is not supported by the authorities cited and cannot be accepted without qualification. The failure by the court of first instance to do what was required by PIE was the true reason for the appeal being upheld. 38 Occupiers of Mooiplaats v Golden Thread Ltd & others 2012 (2) SA 337 (CC). eviction if no alternative land or accommodation was provided and the measures that could be taken to alleviate the situation of the owner if an eviction was delayed while alternatives were arranged. Whilst the court referred only to s 4(6) and not s 4(8) it is plain that it was concerned not only with the justice and equity of an eviction order, but also with the justice and equity of the timing of such an order. That emerges from its citation39 of the passage from its judgment in Blue Moonlight where it had said that an owner’s right to possession could be temporarily restricted whilst the justice and equity enquiry was undertaken; its comment that the owner had no immediate plans to use the property and from the requirement in the order that the municipality report on the impact on the owner of delay in granting an eviction order. [25] Reverting then to the relationship between ss 4(7) and (8), the position can be summarised as follows. A court hearing an application for eviction at the instance of a private person or body, owing no obligations to provide housing or achieve the gradual realisation of the right of access to housing in terms of s 26(1) of the Constitution, is faced with two separate enquiries. First it must decide whether it is just and equitable to grant an eviction order having regard to all relevant factors. Under s 4(7) those factors include the availability of alternative land or accommodation. The weight to be attached to that factor must be assessed in the light of the property owner’s protected rights under s 25 of the Constitution, and on the footing that a limitation of those rights in favour of the occupiers will ordinarily be limited in duration. Once the court decides that there is no defence to the claim for eviction and that it would be just and equitable to grant an eviction order it is obliged to grant that order. Before doing so, however, it must consider what justice and equity 39 Para 17. demands in relation to the date of implementation of that order and it must consider what conditions must be attached to that order. In that second enquiry it must consider the impact of an eviction order on the occupiers and whether they may be rendered homeless thereby or need emergency assistance to relocate elsewhere. The order that it grants as a result of these two discrete enquiries is a single order. Accordingly it cannot be granted until both enquiries have been undertaken and the conclusion reached that the grant of an eviction order, effective from a specified date, is just and equitable. Nor can the enquiry be concluded until the court is satisfied that it is in possession of all the information necessary to make both findings based on justice and equity. Procedural issues in eviction applications under PIE [26] In order to discharge its function the court must be possessed of information regarding all relevant factors that bear upon its decision. Judges have been told40 that they are: ‘… called upon to go beyond [their] normal functions and to engage in active judicial management according to equitable principles of an ongoing, stressful and law- governed social process. This has major implications for the manner in which [the court] must deal with the issues before it, how it should approach questions of evidence, the procedures it may adopt, the way in which it exercises its powers and the orders it might make.’ That injunction must, however, be seen in the context that our courts are neither vested with powers of investigation nor equipped with the staff and resources to engage in broad-ranging enquiries into socio-economic issues. Nor, as already pointed out, can the courts circumvent that by delegating those tasks to the sheriff, who is likewise ill-equipped for that task. How then is the court to ensure that it is adequately informed in 40 Port Elizabeth Municipality, supra, para 36. regard to the relevant factors that must be taken into account in making its decision? [27] There is nothing novel about a court taking a proactive approach to litigation in order to ensure that it is sufficiently informed to enable it to take a just decision in the context of cases where its task differs from that ordinarily encountered in adversarial litigation and the orders sought from it are discretionary. For example in Clarke v Hurst NO & others, 41 a case involving the removal of life support from a patient in a persistent vegetative state, Thirion J requested and secured that additional specialist medical investigations be undertaken before reaching a decision. In my view courts can, and must, properly address the issues arising in eviction cases within the framework of our existing law governing evidence and civil procedure, provided they are not overwhelmed by practical problems42 and make use, where appropriate, of court ordered mediation or engagement, or structured interdicts. However, in exercising these powers judges must take care to ensure that they do not go beyond the proper bounds of judicial conduct. 43 A more active role in managing the litigation does not permit the judge to enter the arena or take over the running of the litigation. By way of illustration of the boundaries within which they must operate, it is permissible in an appropriate case to conduct an inspection in loco,44 but it is impermissible to engage in private investigation. What they are obliged to do in eviction cases is ensure that all the relevant parties are before them, that proper investigations have been undertaken to place the relevant facts before them and that the orders they craft are appropriate to the particular 41 Clarke v Hurst NO & others 1992 (4) SA 630 (D). 42 Per Harms JA in Modderfontein Squatters supra, fn 24, para 42. 43 See City of Johannesburg Metropolitan Council v Ngobeni [2012] ZASCA 55 paras 29 to 33. 44 As was done at first instance in Grootboom. circumstances of the case. If, despite appropriate judicial guidance as to the information required, the judges are not satisfied that they are in possession of all relevant facts, no order can be granted. In what follows I address some of the more important aspects of eviction applications in the light of the contentions advanced before us. Onus [28] The City submitted that it is the duty of the occupiers to place any necessary relevant information before the court. It contended that the common law position that an owner can rely simply on its ownership of the property and the occupation of the occupiers against its will is applicable to applications governed by s 4(7) of PIE. It relied on the cases where it has been held that the landowner may allege only its ownership of the property and the fact of occupation in order to make out a case for an eviction order, to which the occupiers must respond and establish a right of occupation if they wish to prevent an order form being made.45 It argued that the only effect of PIE was to overlay the common law position with certain procedural requirements. [29] This is not an issue that has been resolved in the cases and to some extent it has been obscured by cases in which a less conventional approach to the function of the court has been espoused. The enquiry into what is just and equitable requires the court to make a value judgment on the basis of all relevant facts. It can cause further evidence to be submitted where ‘the evidence submitted by the parties leaves important questions of fact obscure, contested or uncertain’.46 That may mean that ‘technical questions relating to onus of proof should not play an unduly 45 Chetty v Naidoo 1974 (3) SA 13 (A) approving the approach in Graham v Ridley 1931 TPD 476 at 479. 46 Port Elizabeth Municipality, supra, para 32. significant role’.47 However, I do not think that means that the onus of proof can be disregarded. After all what is being sought from the court is an order that can be granted only if the court is satisfied that it is just and equitable that such an order be made. If, at the end of the day, it is left in doubt on that issue it must refuse an order. There is nothing in PIE that warrants the court maintaining litigation on foot until it feels itself able to resolve the conflicting interests of the landowner and the unlawful occupiers in a just and equitable manner. [30] The implication of this is that, in the first instance, it is for the applicant to secure that the information placed before the court is sufficient, if unchallenged, to satisfy it that it would be just and equitable to grant an eviction order. Both the Constitution and PIE require that the court must take into account all relevant facts before granting an eviction order. Whilst in some cases it may suffice for an applicant to say that it is the owner and the respondent is in occupation, because those are the only relevant facts, in others it will not. One cannot simply transpose the former rules governing onus to a situation that is no longer governed only by the common law but has statutory expression. In a situation governed by s 4(7) of PIE, the applicant must show that it has complied with the notice requirements under s 4 and that the occupiers of the property are in unlawful occupation. On ordinary principles governing onus it would also have to demonstrate that the circumstances render it just and equitable to grant the order it seeks. I see no reason to depart from this. There is nothing unusual in such an onus having to be discharged. One of the grounds upon which it was permissible to seek a winding-up order in respect of a company under the Companies Act 61 of 1973 was that it would be just and equitable for the court to grant such an order. The law 47 Ibid. reports are replete with cases in which courts dealt with applications for winding-up on that basis. In cases where the applicant failed to discharge the onus of satisfying the court that it would be just and equitable to grant a winding-up order it was refused. [31] The response to this may be to say that the applicant for relief will be unaware of the circumstances of the occupiers and therefore unable to place the relevant facts before the court. As a general proposition that cannot be sustained. Most applicants for eviction orders governed by PIE will have at least some knowledge of the identity of the persons they wish to have evicted and their personal circumstances. They are obviously not required to go beyond what they know or what is reasonably ascertainable. The facts of this case belie the proposition that an applicant, even in a case where a building has been hijacked, is unable to place information before the court in regard to the identity and circumstances of the occupiers. Changing Tides was able to describe in considerable detail the circumstances in which the occupiers were living. It had served notices to vacate on a number of them and managed to assemble a list, albeit incomplete and defective, of the names of 97 occupiers. It made it clear that the occupiers were people of extremely limited means, some at least of whom gathered rubbish from the streets for personal use or resale and left rotting garbage inside and outside the building. It specifically alleged that the occupiers were people who would, on eviction, qualify for emergency housing. It referred to earlier proceedings in which it had previously obtained an eviction order that had subsequently been set aside at the instance of occupiers. For some reason it did not provide the court with information about the occupiers’ circumstances gleaned from the affidavits in those proceedings. That information might also have disclosed something of the circumstances in which the building came to be occupied originally. In that regard they could also presumably have made enquiries of the previous owners. [32] In addition, there were a number of other potential sources of information that were not exploited. Security guards had been on site to observe the comings and goings of the occupiers. They could have provided affidavits from their observations. The owner’s representatives had been in communication with the police and could have procured more detailed information about the alleged criminal activities in the building from that source. In addition, in seeking to demonstrate that it was just and equitable that they be granted an eviction order, they could have explained why they had done nothing for some three years to pursue the eviction of the occupiers after the first order was set aside. They could also have given more detail regarding their redevelopment plans for the building, both as to the character of the proposed development and as to the proposed timeframe. All that was important information, both in regard to the grant of an order and in determining a just and equitable date for the eviction order they were seeking. It would have provided a substantial body of information to assist the court in reaching a decision on whether it was just and equitable to evict the occupiers. [33] It is appropriate to mention one further issue that arises generally in these cases. Very often it seems that once an eviction is ordered the sheriff effects it, making use of assistance from security firms and the police. That may be necessary in a small number of cases where the occupiers actively resist their eviction and questions of the personal safety of the sheriff and his or her deputies may arise. However, in many instances all that happens is that the sheriff and his staff remove people and their belongings and dump them unceremoniously on pavements outside the building they have been occupying in scenes reminiscent of forced removals in the days of apartheid. The Constitutional Court has rightly said that the loss of a home, even ones as exiguous as these appear to be, is a painful and often degrading experience. It has charged courts with responsibility for infusing ‘grace and compassion’ into this situation. One way in which that could be done would be if the property owner indicated a willingness to assist those displaced to move themselves and their meagre belongings to whatever new location they may have found or whatever emergency accommodation may be provided. That would ameliorate the situation of the evictees to some degree at some additional cost to the property owner. A tender to provide such assistance would help the court in determining whether the eviction and the date and conditions on which it is to be effected are just and equitable. I do not intend to lay down as a legal obligation that property owners must do this in order to obtain eviction orders. I mention it to illustrate one of the ways in which an applicant for an eviction order could seek to show that the grant of that order, its timing and the conditions to which it is subject are just and equitable. [34] In my view, therefore, there are no good reasons for saying that an applicant for an eviction order under s 4(7) of PIE does not bear the onus of satisfying the court that it is just and equitable to make such an order. Cases where that onus affects the outcome are likely to be few and far between because the court will ordinarily be able to make the value judgment involved on the material before it. However, the fact that an applicant bears the onus of satisfying the court on this question means that it has a duty to place evidence before the court in its founding affidavits that will be sufficient to discharge that onus in the light of the court’s obligation to have regard to all relevant factors. The City’s contention, that the common law position continues to prevail and that it is for the occupiers to place the relevant facts before the court, is incorrect. Once that is recognised it should mean that applicants go to greater lengths to place evidence of relevant facts before the court from the outset and this will expedite the process of disposing of these applications, particularly in cases that are unopposed as the need for the court to direct that further information be obtained will diminish. Joinder [35] Even if an applicant places reasonably comprehensive information before the court, there will nonetheless often be information not within its knowledge, especially in relation to the ability and willingness of the relevant local authority to address issues arising from the possibility of an eviction order giving rise to homelessness and a need for the provision of emergency accommodation. It is here that the issue of joinder arises. One of the fundamental arguments raised by the City was that its joinder in these proceedings was inappropriate. It contended that it was not appropriate for the property owner to join it with a view to ensuring that the constitutional rights of the occupiers were protected. [36] An appeal is not the time to raise an argument of misjoinder. The City did not object to its joinder nor did it file affidavits in which it challenged the allegation by Changing Tides that it had a direct and substantial interest in the outcome of the proceedings and that its joinder was both necessary and inevitable. It also appeared before Wepener J at the time that the order under appeal was made to make submissions and protect its interests. One can ask rhetorically what it thought it was doing there if indeed it had no interest in the outcome of the application and had been improperly joined. Be that as it may, as the argument raises an important issue of principle on which the guidance of this court is desirable I shall deal with it. [37] Joinder is called for whenever a party has a direct and substantial interest in the outcome of litigation.48 On the facts of this case, as contained in the founding affidavit, there was an overwhelming probability that the grant of an eviction order would result in at least some of the occupiers being rendered homeless. That allegation was specifically made and not challenged. Once that was the case the grant of an order would necessarily result in the City’s constitutional obligations to such persons being engaged. Accordingly the availability of alternative accommodation provided by the City was an important issue in the proceedings. An eviction order could only be made on appropriate conditions, which would necessarily include conditions relating to the provision of temporary emergency accommodation. In those circumstances the City manifestly had a direct and substantial interest in the outcome of the litigation and had to be joined as a necessary party. The City’s argument in regard to joinder was misconceived. It was not joined in order to protect the interests of the occupiers but in order to enable the court to discharge its functions in accordance with the requirements of PIE. [38] Whenever the circumstances alleged by an applicant for an eviction order raise the possibility that the grant of that order may trigger constitutional obligations on the part of a local authority to provide emergency accommodation, the local authority will be a necessary party 48 Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A) at 659; Standard Bank of South Africa Ltd v Swartland Municipality & others 2011 (5) SA 257 (SCA) para 9; Blue Moonlight CC para 44. to the litigation and must be joined.49 Where the applicant is doubtful about the position it would be a wise precaution for it to join the local authority.50 That does not mean that the local authority will need to become embroiled in every case in which an eviction order under PIE is sought. The question in the first instance is always whether the circumstances of the particular case are such as may (not must) trigger the local authority’s constitutional obligations in regard to the provision of housing or emergency accommodation. If they are, the need for the local authority’s direct involvement as a litigant will depend upon its response to those obligations. If, by way of example, it filed a report stating that it had adequate emergency accommodation available for all and any persons evicted from the premises and that the court could make an order that it provide such accommodation to all evictees that might suffice without more, subject to furnishing some details about the nature and locality of the accommodation and the means by which the occupiers could obtain access to it. The local authority’s procedural obligations [39] Much of the litigation around evictions has dealt with contentions by various local authorities that they do not owe constitutional obligations to provide emergency accommodation to persons evicted from their existing homes and facing homelessness as a result. Contentions that they were not obliged to provide emergency housing (Grootboom); alternative land on a secure basis (Port Elizabeth Municipality); use their own funds to provide emergency accommodation (Rand Properties); and provide emergency accommodation to persons evicted at the instance of private 49 Occupiers of Erf 101, 102, 104 and 112, Shorts Retreat, Pietermaritzburg v Daisy Dear Investments (Pty) Ltd & others, supra, para 11. 50 Such a joinder is a joinder of convenience that does not give rise to a misjoinder. Rosebank Mall (Pty) Ltd & another v Cradock Heights (Pty) Ltd 2004 (2) SA 353 (W) para 11. property owners (Blue Moonlight) have all been advanced and rejected by this court and the Constitutional Court. Now that it is clearly established that local authorities do owe constitutional obligations to persons evicted from their homes who face homelessness as a result, it is appropriate to set out their obligations to the court in proceedings of this type. I deal only with cases where, on the principles set out above, they are joined in the litigation and the applicant alleges that the circumstances of the eviction are such that it may result in homelessness and engage their constitutional obligations in regard to the provision of temporary emergency accommodation. [40] The general approach of local authorities, so far as it can be discerned from the reported cases, has been to file with the court a general report detailing its current housing policy without addressing the facts of that particular case. That is inadequate. In addition to such a report it must deal directly with the facts of the particular case. That report must specify: (a) the information available to the local authority in regard to the building or property in respect of which an eviction order is sought, for example, whether it is known to be a ‘bad building’, or is derelict, or has been the subject of inspection by municipal officials and, if so, the result of their inspections. (It appears from some of the reported cases, like the present one, that the local authority has known of the condition of the building and precipitated the application for eviction by demanding that owners evict people or upgrade buildings for residential purposes.) The municipality should indicate whether the continued occupation of the building gives rise to health or safety concerns and express an opinion on whether it is desirable in the interests of the health and safety of the occupiers that they should be living in such circumstances; (b) such information as the municipality has in regard to the occupiers of the building or property, their approximate number and personal circumstances (even if described in general terms, as, for example, by saying that the majority appear to be unemployed or make a living in informal trades), whether there are children, elderly or disabled people living there and whether there appear to be households headed by women; (c) whether in the considered view of the local authority an eviction order is likely to result in all or any of the occupiers becoming homeless; (d) if so what steps the local authority proposes to put in place to address and alleviate such homelessness by way of the provision of alternative land or emergency accommodation; (e) the implications for the owners of delay in evicting the occupiers; (f) details of all engagement it has had with the occupiers in regard to their continued occupation of or removal from the property or building; (g) whether it believes there is scope for a mediated process, whether under s 7 of PIE or otherwise, to secure the departure of the occupiers from the building and their relocation elsewhere and if so on what terms and, if not, why not. [41] Those requirements have been distilled from the various orders made by the courts in cases of this type. Provided that this information is furnished to the court at the outset it should enable the court to deal with the application without much, if any, need for further investigation and possibly without the further involvement of the local authority. I have no wish to add to the burden of local authorities in these cases. However, the additional burden should not be undue as they are in any event enjoined by s 4(2) of PIE to file a report in all eviction proceedings. All that this requires of them is, in certain cases, to amplify that report in order to provide the court with the information it needs to decide whether to grant an eviction order. The more comprehensive the report furnished by the local authority at the outset the less likely that it will become embroiled in lengthy and costly litigation, so that the additional effort at the outset should diminish costs in the long run and enable eviction cases to be dealt with expeditiously in the interests of all concerned.51 Where, in response to that report, the applicant indicates that it intends to seek an order that imposes duties upon the local authority it goes without saying that the local authority must be furnished with the proposed order in sufficient time to enable it to consider its terms, suggest amendments and if no agreement is reached, to appear and make appropriate submissions to the court on its terms. The present case [42] It remains to apply these principles in the present case, adapting them appropriately to remedy the problems with the existing order. In that regard it must be borne in mind that the court has already decided that the grant of an eviction order against the occupiers is just and equitable and, most importantly, the occupiers do not appeal against that decision. The formulation of an appropriate order in the present case must therefore be undertaken on the basis that the first enquiry is over and the court is only concerned with the second enquiry into a just and equitable date for that order to take effect and the conditions to be attached to that order. This 51 Blue Moonlight took some six years of litigation to resolve. Olivia Road took five years, Skurweplaas over three years and Mooiplaats was referred back to the high court after three years of litigation. departs from the usual position outlined above where the court deals with both enquiries in one hearing and issues a single order covering all the issues in the case. We are, however, assisted in formulating the order by the fact that the City now accepts – as it did not before Wepener J – that it is under a ‘duty to assist people who face homelessness upon eviction, through no fault of their own and which they can do nothing about’.52 That means that we are principally concerned to formulate the relief in the most effective way in which to ensure that the City fulfils its constitutional obligations. The focus must thus fall on the best way of identifying the persons to whom the City owes those obligations and ensuring that their needs are catered for. [43] Counsel for the City furnished us in the course of argument with a suggested order. That order was not acceptable to counsel for the occupiers or to counsel for the amicus. After the hearing the latter provided us with its proposed order adapting that suggested by the City. Counsel for the occupiers submitted a further draft order, accepting the proposals of the amicus, but adding orders in regard to costs and the application to lead further evidence on appeal that will be dealt with at the end of this judgment. We received submissions from the parties on these proposed orders. As the occupiers adopted the suggestions by the amicus as their own, subject to the additions I have mentioned, in what follows I need only compare the proposals of the City and the amicus. [44] Both orders proceeded on the footing that the sheriff should prepare a schedule of information as contemplated in paragraph 2 of the order, although the amicus expressed reservations about this and said that it should be for the City to do this. The City’s proposal would have 52 The concession is taken from counsel’s supplementary submissions on the terms of the order. required the sheriff, whilst preparing the schedule of information, to serve a notice on the occupiers informing them that if they required emergency accommodation as a result of their eviction they should apply to one of the City’s ESP Centres, which deal with emergency accommodation, together with certain documents and that the City should be obliged to provide such accommodation to those whom it determined qualified for it. In the City’s submissions it asked that this notice be amplified by a requirement that anyone seeking such accommodation should telephone the ESP centre in question ‘to arrange a date and time when they are to report and apply’. It was said that this would ensure that such applications would be dealt with in an orderly manner and expeditiously. [45] The occupiers and the amicus submitted that it is for the court to determine the obligations of the City to potential evictees and not the City itself. The draft order of the amicus accordingly provided for the City to consider, evaluate and assess all applications for temporary emergency accommodation made to it by potential evictees and to submit a report to the court giving details of who was to be provided with accommodation, the nature and location of that accommodation and the date by which it would be provided. In addition the report had to deal with all applications for accommodation refused by the City and the reasons for that refusal. The amicus altered the terms of the notice that the City suggested should be served on the occupiers, most importantly by making it clear that applications for accommodation could be made even if a person lacked the documents required by the City; inserting contact details of people at the ESP centres and recording that the city would be obliged to report to the court on the outcome of applications for accommodation and details of the accommodation tendered by it. In line with its suggested order the suggested amended notice referred to the City lodging a report with the court. Procuring information regarding the occupiers [46] I agree with all parties that the court needs to have information about the needs of the occupiers in relation to temporary emergency accommodation. For the reasons set out in paragraph 8 of this judgment, the order that the sheriff prepare a ‘matrix’ of information in regard to the occupiers was not proper and is ineffective. It cannot be used to provide a foundation for the order that must issue in place of that granted by the high court. Counsel for the amicus expressed reservations about the sheriff fulfilling this role and I understood him to suggest that it is desirable for the City to be required to obtain and place that information before the court. I disagree. The City is in no better position than the sheriff to obtain the suggested information from the occupiers and faces precisely the same difficulties in endeavouring to do so as would the sheriff. It has no right in law to demand that information from the occupiers and the court cannot confer that right upon it by requiring it to provide the information to the court. An order that it do so is ineffective or, to use the traditional expression, a brutum fulmen. I note that the court of first instance in Blue Moonlight made such an order and the City was unable to comply with it.53 [47] In considering the grant of an eviction order the court is concerned with the plight of those who, as a result of poverty and disadvantage, are unable to make alternative accommodation arrangements themselves and require assistance from the local authority to do so. It is particularly concerned to ensure, so far as possible, that those who face homelessness 53 Blue Moonlight CC, para 6, fn 9. are provided at least with temporary emergency accommodation. The ancillary orders attaching to an eviction order will not affect those who are able to find a roof for their heads and a place of shelter without assistance, nor those who for reasons of their own, such as an unwillingness to have any involvement with a public authority, will not seek assistance, even if it means nights spent on the streets. The central task is therefore to identify those who require assistance from the local authority. What the City needs to know is who requires temporary emergency accommodation and the nature of their needs, for example, whether dormitory accommodation would suffice or whether a flat of some sort is required for a family with children or whether an aged or disabled person has some special needs. The question is how this information can most quickly and efficiently be communicated to the City so that it can formulate an appropriate plan to address the needs of these people. [48] In the present case the answer, at this stage of the proceedings, is relatively straightforward. The Legal Resources Centre (the LRC), a public interest law firm with a lengthy and honourable record in cases of this type is now on record as representing all of the occupiers, not merely the 97 who were identified as respondents in the list annexed to the notice of motion. Its director has deposed to an affidavit saying that it represents the occupiers generally and counsel appeared at the application for leave to appeal and before this court on the basis that they represented all of the occupiers. Accordingly, the easiest way to obtain the necessary information and furnish it to the City is by the LRC preparing a list of those of its clients who require temporary emergency accommodation, with details of their names, ages, family circumstances, sources of income and having annexed to it appropriate proof of identity. The list and its details must be verified by an affidavit of information and belief and if possible by affidavits by the individuals concerned. There seems to be no reason why that list should not be furnished within one month of the date of this court’s order. In cases where the occupiers have legal representation this will ordinarily be the most effective way in which to proceed. Where they are not represented, courts may consider issuing a rule nisi and causing it to be served on the occupiers (and if it is not present, the local authority), together with a suitably worded notice explaining the right to temporary emergency accommodation; how they can access such accommodation and inviting them to come to court to express their views on that issue at least. The City’s obligations [49] The next issue relates to the City’s obligations in respect of the occupiers identified by the LRC. The argument before us claimed an entitlement on the part of the City to determine whether the persons seeking temporary emergency accommodation were entitled thereto before providing such accommodation. It was for this reason submitted that persons requiring that assistance should apply to one of the City’s ESP centres, for their situation to be assessed and the City to decide whether to afford them the accommodation they seek. [50] I do not think that the approach of the City, that the affected people must approach one of its ESP Centres for assistance and follow conventional procedures thereafter, is either correct or desirable. Its immediate disadvantage is that it sets in train a bureaucratic process that will inevitably involve delay and probably spawn further disputes and litigation. An example of that arose when the City advanced the contention in its heads of argument that it owed no obligation to provide temporary emergency housing to non-citizens. That provoked a response from both the representative of the occupiers and the amicus. In argument the City retreated somewhat from this stance and instead contended that it was not obliged to provide such accommodation to illegal immigrants. This contention was repeated in its submissions on the draft order. One can at once foresee, therefore, that disputes are likely to arise on this issue, bearing in mind that a large proportion of the occupiers appear to be foreign citizens and may well be in this country illegally. The procedure the City proposed was clearly directed at weeding out those who in its view would not qualify for such assistance on grounds of income, need, ability to find accommodation elsewhere and the like. All of this is conducive to delay in a case where there is no challenge to the proposition that an eviction order is just and equitable, subject to determining a just and equitable date and suitable conditions concerning alternative accommodation. [51] The City’s stance is what prompted the amicus, in its draft order, to submit that the City should ‘consider, evaluate and assess’ each occupier who applied for assistance and report to the court on, inter alia, its reason for rejecting those to whom it did not propose to provide accommodation. There was then provision for the rejected occupiers to approach the court to secure their inclusion and for the occupiers generally to challenge the suitability of the accommodation being tendered by the City. The picture is one of move and counter-move with fresh fronts being opened constantly in a war of attrition between the City and the occupiers. [52] Both approaches overlook the fact that the court is dealing with a situation in which people are living in a ‘death trap’. Their situation is one of dire need. They should not be required to continue living in such circumstances, which pose a health and personal safety danger, any longer than is strictly necessary to enable the City to discharge its constitutional obligations to them. The question then is how to achieve this as a matter of some urgency. Unfortunately, none of the orders submitted by the parties addressed the matter from that perspective. The City wishes to follow its established procedures and exclude those whom it believes are not entitled to temporary emergency accommodation. The response is one that foreshadows disputes in some cases over a variety of issues leading to further litigation and inevitable delay. In the meantime the occupiers will continue to live in squalid and unsafe conditions and Changing Tides will be prevented from obtaining access to its property. Resolution of the former situation is extremely urgent and Changing Tides should not be unnecessarily compelled to endure further delays over which it has no control. [53] I accept that the City is entitled to review the claim of any person seeking temporary emergency accommodation as a result of an eviction. However, the relevant question, in cases of eviction creating an emergency, is whether the appropriate time to do that is before that person obtains such accommodation or afterwards. Where the facts point to the desirability of the eviction being effected as rapidly as possible, because the circumstances in which the occupiers are living pose a risk to life and health, the only answer must be that the review process should defer to the need for eviction and accordingly take place after the City has provided the evictees with temporary emergency accommodation. This gives rise to the possibility – not likely to be great – that some people not entitled thereto may obtain temporary access to temporary emergency accommodation, until their disqualification is discovered. However, that is preferable to a large number of people who undoubtedly are entitled to such accommodation being kept out of it and forced to live in unhealthy and potentially life threatening surroundings for longer than necessary, while the City weeds out the few who are not entitled to this benefit. That is especially so as it seems probable that any adverse decision by the City on an individual’s right to temporary emergency accommodation may be subject to legal challenge. [54] Infusing grace and compassion into the process of eviction does not mean that an eviction should be postponed for as long as possible, but may mean that it should take place expeditiously. If delayed the property owner bears the burden of not having access to its property whilst the authority responsible for attending to the housing needs of the persons in unlawful occupation of the premises postpones the discharge of its obligations. Where, as here, the occupiers are living in conditions of the utmost squalor at the risk of their lives and health, the court should be concerned that the process is expedited so that they are moved away from that situation as soon as possible. It is noteworthy that local authorities are vested with statutory powers under other legislation to address situations such as these.54 However, the City’s report to the high court says that, since the judgment of this court in Rand Properties, the City no longer makes use of this provision to remove occupiers from unsafe and squalid buildings. That suggests that the City is no longer engaged directly in addressing this problem. What it does, as this case and Blue Moonlight demonstrate, is give notice to building owners under the relevant by-laws to remedy conditions in the buildings concerned, thereby prompting applications for eviction brought by the building owner. That is less than satisfactory. The City needs to be actively engaged in addressing the situation where people are living in squalid conditions 54 Section 12(4)(b) of the National Building Regulations and Building Standards Act 103 of 1977. such as these and should be as concerned as the owner and the occupiers to resolve that situation as soon as possible. The legal representatives of the parties must also be mindful that what is being sought is a solution to a social problem and conduct the litigation with that in mind. [55] Not every eviction case will generate the same concerns regarding the disposal of the case and judges in the high court will need to assess whether the case before them is one which demands urgent disposal in the interests of the health and safety of the occupiers. In the present case the position is clear. The eviction should be effected with the minimum delay compatible with the rights and human dignity of the occupiers and the need to provide many of them with temporary emergency accommodation. [56] Accordingly it is appropriate to require the City on receipt of the list of occupiers requiring temporary emergency accommodation from the LRC, to report to the court, within one month of receipt of the list, setting out the accommodation that it will make available to all of those occupiers and when such accommodation will be available. That accommodation must be in a location as near as feasibly possible to the area where Tikwelo House is situated. The report must be supported by an affidavit from an appropriate official in the employ of the City verifying its contents and contain an undertaking that the City will provide the occupiers with accommodation in accordance therewith. It must deal specifically with the issue of proximity and explain why the particular location or locations of the accommodation have been selected. It must also set out the steps taken during the two months before it needs to be filed to engage with the occupiers through the LRC or any other means that may appear appropriate. The response by the occupiers [57] Once the City has delivered its report the occupiers should be given a period of one month to consider its contents. If in any respect they are not satisfied with the accommodation tendered, or any other aspect of the proposed provision of temporary emergency accommodation, they must deliver affidavits within that period setting out their difficulties, the reasons therefor and what they contend is necessary in order to resolve those difficulties. The City can deliver such affidavits in response as it may be advised to file. A time of two weeks for that purpose should be adequate. The remittal to the high court [58] After the elapse of these time periods the application must be set down for hearing on the opposed roll. At the resumed hearing the court will consider the adequacy of the temporary emergency accommodation to be provided by the City and any objections from the occupiers. It will also determine the date upon which the eviction order is to take effect, the terms upon which the City is to provide temporary emergency accommodation to all those occupiers identified by the LRC as requiring it, and any other conditions that will attach to the eviction order. Obviously it is impossible for us to foresee and make provision for every eventuality that may arise in the process set in train by this court’s order. It will be for the high court to deal with these as it deems appropriate having regard to the need for an urgent resolution of this case in the interests of all concerned. Further evidence on appeal [59] Before formulating the order to be made in this appeal it is necessary to resolve the issues arising from an application lodged on 9 March 2012 by the LRC, on behalf of the second to 98th respondents and the occupiers generally, to lead further evidence on appeal by way of the introduction of what were said to be ‘their individual affidavits detailing their personal circumstances’ as well as certain expert evidence. An order was also sought: ‘Remitting the application to the High Court for a fresh determination of the question whether the eviction of the Second to Ninety Eighth respondents would be just and equitable.’ Although that does not appear from the notice of motion, the Director of the LRC said in her affidavit that this was only sought in the alternative to the admission of the affidavits. [60] Both the City and Changing Tides opposed this application. However, they did so under a misapprehension as to its purpose. The deponent to the City’s affidavit said that by seeking the admission of this evidence the deponents were trying to place reliance on their personal circumstances as a defence to the eviction order. That was also the thrust of the heads of argument filed by the City in respect of this issue. However, that was not the purpose of the application. The proposed evidence was directed at supporting the order made by the court below in regard to the provision of emergency housing for those who were subject to eviction in terms of the unchallenged eviction order granted by the high court. It was only in the event of it not being admitted that it was submitted that the application should be remitted to the high court to reconsider the eviction order. [61] Fresh evidence on appeal is only admitted sparingly. The applicant must give a reasonable explanation for the failure to tender the evidence at first instance; the evidence must be credible and materially relevant to or decisive of the outcome of the proceedings.55 The explanation for the occupiers not having been represented before the high court is unsatisfactory. In addition, of the 57 affidavits tendered only ten are identifiable as being deposed to by the 97 named respondents and one is by the partner of a named respondent. One or two of the remainder are possibly by respondents – for example there is one respondent who is identified solely as ‘Moeketsi’ and four of the deponents bear that name – but that is of little assistance. It does not appear to have been appreciated that what was being tendered might only be a partial picture and there was accordingly no endeavour to inform the court of how many people would be involved in any eviction and how many of them would indeed need temporary emergency accommodation. [62] The affidavits were unsatisfactory in other respects. For example two of the deponents stated that they had alternative accommodation if evicted. In addition, the affidavits are standard in form, scanty in detail and say little more than any court – including the high court in this case – would already know, namely that almost all people living in the circumstances described at the outset of this judgment are desperately poor and live in a building such as Tikwelo House only because the alternatives are worse and almost certainly involve homelessness for many of them. Hence the affidavits will not be conclusive of the issues in this case. The application for their admission should be refused. 55 De Aguiar v Real People Housing (Pty) Ltd 2011 (1) SA 16 (SCA) paras 9 to 12. [63] The City sought an order that the costs of the application be paid de bonis propriis by the LRC. Whilst I agree that the application was misconceived and sloppily prepared, without any clear view of its purpose, one must bear in mind the difficulties facing public interest law firms that on a daily basis face demands for legal representation as a matter of urgency from unsophisticated people facing great personal hardship. In addition costs should only be ordered against legal practitioners in cases of flagrant disregard of their duties, causing undue and unnecessary expense to the other party. In the present case I do not think that the failings on the part of the LRC justify an order against it. Costs and the order [64] It was submitted on behalf of the City that it had been compelled to come to this court to set aside the order sought by Changing Tides over its opposition. In those circumstances it was contended that Changing Tides should pay the City’s costs on appeal. I do not agree. In many respects Changing Tides is a reluctant participant in these proceedings. Clearly it brought the eviction proceedings when it did as a result of the City serving notice on it to remedy the condition of the building and effectively make it habitable for the occupiers. The amended order was sought in the light of this court’s decision in Blue Moonlight. It was opposed by the City on the basis of the untenable proposition that the judge should disregard this court’s order because of the pending appeal to the Constitutional Court. It is true that it added that there was no evidence before the court, but in part that was due to its own failure to provide any information germane to the particular circumstances of this case. No doubt that was because of its stance in the Blue Moonlight litigation, but that stance was incorrect. The challenge to the order to provide temporary emergency accommodation is likely, if one examines the facts, to result in little effective change to the order that Wepener J granted. In those circumstances it is appropriate to order each party to pay its or their own costs in the appeal. The costs of the application will be dealt with by the high court on the remittal. [65] The following order is made: 1 The appeal is upheld and each party is ordered to pay its or their own costs of appeal. 2 Paragraph 2 of the order of the high court is declared to be legally ineffective. 3 Paragraphs 3 and 4 of the high court’s order are set aside. 4 The application for eviction is remitted to the high court in order for it to determine the date upon which all of the occupiers of Tikwelo House are to be evicted from that building, the terms upon which the City is to provide temporary emergency accommodation to the persons referred to in paragraph 5(b) below of this order, any other conditions attaching to that eviction order and the costs of the application. 5 The remittal is subject to the following further orders: (a) The attorneys for the occupiers, the Legal Resources Centre (the LRC), are directed on or before 30 September 2012 to furnish the attorneys for the City of Johannesburg with a list of those of its clients who, as a result of their eviction from Tikwelo House, will require temporary emergency accommodation, together with their names, ages, family circumstances, sources of income and appropriate proof of identity. The list and those details shall be confirmed by an affidavit of information and belief from a representative of the LRC and where possible by affidavits from the occupiers referred to therein. (b) It is declared that the City of Johannesburg is obliged to provide all of the persons whose names appear on that list with temporary emergency accommodation by no later than two weeks prior to the date of the eviction order to be determined by the high court. (c) The City of Johannesburg is directed, by no later than 31 October 2012, to deliver a report to the high court, confirmed on affidavit by an appropriate official of the City, detailing the accommodation that it will make available to the occupiers and when such accommodation will be available and containing an undertaking to make that accommodation available. That accommodation must be in a location as near as feasibly possible to the area where Tikwelo House is situated and the report must specifically deal with the issue of proximity and explain why the particular location and form of accommodation has been selected. It must also set out the steps taken during the two months before the report is filed to engage with the occupiers through the LRC or any other means that may appear appropriate. (d) The occupiers are entitled by no later than 30 November 2012 to deliver affidavits dealing with the contents of the City’s report and specifying any objections thereto and the City is entitled within two weeks thereafter to deliver such further affidavits as it deems appropriate. (e) The application must then be set down on the opposed roll for hearing. If at any stage there is non-compliance with the provisions of this order, Changing Tides (Pty) Ltd is authorised to set the matter down for hearing for appropriate relief. M J D WALLIS JUDGE OF APPEAL Appearances For appellant: J Both SC (with him A W Pullinger) Instructed by: Kunene Ramapala Botha Law Firm, Johannesburg Claude Reid Inc, Bloemfontein For first respondent: Reg Willis (with him N A Mohonane) Instructed by: Esthe Muller Attorneys Johannesburg Kramer Weihmann & Joubert Inc. Bloemfontein. For 2nd to 97th respondents: T Ngcukakaitobi (with him Z Gumede) Instructed by: Legal Resources Centre Johannesburg. Webbers, Bloemfontein. For Amicus Curiae S Wilson (with him I de Vos) SERI Law Clinic, Johannesburg. Naudes, Bloemfontein.

Supreme Court of Appeal of South Africa MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 September 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. City of Johannesburg v Changing Tides 74 (Pty) Ltd and 97 others (The Socio-Economic Rights Institute of South Africa intervening as amicus curiae) This appeal arose from an application for the eviction of the occupiers of a commercial building called Tikwelo House in Doornfontein, Johannesburg. The building had been ‘hijacked’ and was no longer under the control of its owner. It was unfit for human habitation and was occupied by people, who were extremely poor. An order for their eviction had been granted by the South Gauteng High Court, at the instance of the owner, in an unopposed application. The SCA, in a judgment delivered last Friday, remitted the case to the high court, because the original order had been granted without the court having all the relevant facts before it. Accordingly all parties to the appeal agreed that the original order had to be set aside and the case remitted to the high court on terms in regard to the investigations to be conducted and the evidence to be obtained before fixing a date for the eviction order to be granted. The issues in the appeal revolved around the obligations of the Johannesburg Municipality to provided alternative emergency accommodation for those who were facing eviction from the building. The court dealt with the obligations of all parties to litigation of this kind, setting out the information that had to be provided to the court hearing applications of this type and dealing with a number of important procedural issues to be followed in eviction proceedings. It stressed the need for expedition in cases where the occupiers were living in unhealthy and unsafe circumstances. The judgment builds upon previous jurisprudence in the SCA and the Constitutional Court in regard to the right to housing.

94

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 402/2017 In the matter between: MTHANDAZO BERNING NTLEMEZA APPELLANT and HELEN SUZMAN FOUNDATION FIRST RESPONDENT FREEDOM UNDER LAW SECOND RESPONDENT Neutral citation: Ntlemeza v Helen Suzman Foundation [2017] ZASCA 93 (9 June 2017) Coram: Navsa, Ponnan, Majiedt, Dambuza, Mathopo JJA Heard: 2 June 2017 Delivered: 9 June 2017 Summary: Application in terms of s 18 of the Superior Courts Act 10 of 2013 for execution order pending finalisation of an appeal process: whether refusal of an application for leave to appeal stultifies application for leave to execute notwithstanding that a further application for leave to appeal to next highest court envisaged: whether applicant for execution order proved existence of exceptional circumstances as contemplated in s 18(1): whether respondent, in terms of s 18(3), proved on balance of probabilities that it will suffer irreparable harm in the event of the execution order not being granted and that the appellant would not: provisions of s 18(4) discussed: requirement that court must „immediately record‟ its reasons for granting execution order: meaning of „next highest court‟ not entirely clear: whether two parallel appeal processes in the same appeal court in the same case desirable. ________________________________________________________________ ORDER _______________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Mabuse, Kollapen and Baqwa JJ sitting as court of first instance): 1 The appeal is dismissed with costs including the costs of two counsel. 2 The appellant is ordered to pay the costs personally. _________________________________________________________________ JUDGMENT _________________________________________________________________ Navsa JA (Ponnan, Majiedt, Dambuza, Mathopo JJA concurring): [1] This appeal is concerned with whether the appellant, Lieutenant-General Mthandazo Berning Ntlemeza (General Ntlemeza), ought to be permitted to continue in his post as National Head of the Directorate for Priority Crime Investigations (DPCI), pending the finalisation of an application for leave to appeal filed in this court. It might appear strange and perhaps even confusing that there are two parallel processes being conducted in an appeal court in one case, but that is on account of the provisions of s 18 of the Superior Courts Act 10 of 2013, which gives an aggrieved party an automatic right of appeal „to the next highest court‟ against a decision of the high court ordering the execution of an earlier ruling issued by it, pending the finalization of an appeal or an application for leave to appeal. The background culminating in the present appeal appears hereafter. [2] General Ntlemeza was appointed National Head of the DPCI on 10 September 2015 by the erstwhile Minister of Police, Mr Nkosinathi Phiwayinkosi Thamsanqa Nhleko.1 Before his aforesaid permanent appointment, General Ntlemeza had served as acting National Head of the DPCI2 for a period of approximately one year. 1 Minister Nhleko was subsequently removed from that position by the President of South Africa and appointed as Minister of Public Works. He was succeeded by the present Minister of Police, Mr Fikile Mbalula. 2 From December 2014 to September 2015. [3] At this early stage it is necessary to locate the DPCI in its constitutional and statutory setting. The South African Police Service Act 68 of 1995 (the Act), in terms of which the DPCI was established, has its genesis in s 205 of the Constitution, which provides that the National Police Service must be structured to function in the national, provincial and, where appropriate, local spheres of government. Section 205(2) of the Constitution provides: „(2) National legislation must establish the powers and functions of the police service and must enable the police service to discharge its responsibilities effectively, taking into account the requirements of the provinces.‟ Section 205(3) sets out the objects of the Police Service, which are to prevent, combat and investigate crime, to maintain public order, to protect and secure the inhabitants of our country and their property and to uphold and enforce the law. The political responsibility for the South African Police Service, in terms of s 206 of the Constitution, vests in the Minister of Police. Moreover, the Minister is, in terms of that section, responsible for determining the national policing policy. [4] The DPCI was established in terms of s 17C of the Act, which is in part the legislation contemplated by the Constitution. The material part of s 17C reads as follows: „(1) The Directorate for Priority Crime Investigation is hereby established as a Directorate in the Service. (1A) The Directorate comprises – (a) the Office of the National Head of the Directorate at national level; and (b) the Office of the Provincial Directorate in each province. (2) The Directorate consists of – (a) the National Head of the Directorate at national level, who shall manage and direct the Directorate and who shall be appointed by the Minister in concurrence with Cabinet; …. For present purposes, we need not concern ourselves with the other personnel that comprise the directorate. The DPCI‟s functions are set out as follows in s 17D of the Act: „(1) The functions of the Directorate are to prevent, combat and investigate – (a) national priority offences, which in the opinion of the National Head of the Directorate need to be addressed by the Directorate . . . (aA) selected offences not limited to offences referred to in Chapter 2 and section 34 of the Prevention and Combatting of Corrupt Activities Act 12 of 2004…‟ As can be seen from all of the above, the National Head of the DPCI occupies a pivotal position within the statutory scheme. [5] General Ntlemeza‟s appointment as National Head of the DPCI by Minister Nhleko was purportedly effected in terms of s 17CA(1) of the Act, read with s 17C(2)(a). Section 17 CA(1) reads: „(1) The Minister, with the concurrence of Cabinet, shall appoint a person who is – (a) a South African citizen; and (b) a fit and proper person, with due regard to his or her experience, conscientiousness and integrity, to be entrusted with the responsibilities of the office concerned, as the National Head of the Directorate for a non-renewable fixed terms of not shorter than seven years and not exceeding 10 years.‟ (My emphasis.) [6] During March 2016 General Ntlemeza‟s appointment was challenged in the Gauteng Division of the High Court, Pretoria, by the first and second respondents, the Helen Suzman Foundation (HSF) and Freedom Under Law NPC (FUL), respectively. Both HSF and FUL are non-profit organisations concerned with promoting constitutional values and the rule of law. The application to review and set aside General Ntlemeza‟s appointment was brought in their own and the national interest. [7] In its application, HSF and FUL noted that the DPCI is a premier law enforcement agency, integral to the battle against corruption and maladministration, which is why the Act requires the National Head to be a person of integrity. They contended that in appointing General Ntlemeza to that high office, Minister Nhleko acted irrationally and unlawfully and failed to fulfill his constitutional duty to protect the integrity and independence of the DPCI. The principal ground of review was that Minister Nhleko had not taken into account materially relevant considerations, more particularly, he failed to have proper regard to a judgment of the High Court, by Matojane J, in an earlier case in which General Ntlemeza‟s integrity was called into question. The case was Sibiya v Minister of Police & others (GP) unreported case no 5203/15 (20 February 2015). [8] Sibiya concerned the legality of General Ntlemeza‟s suspension of Major General Shadrack Sibiya, a Provincial Head of the DPCI, and the appointment, in his stead, of General Elias Dlamini, as acting Provincial Head of the DPCI. General Ntlemeza had accused General Sibiya of being involved in the illegal rendition of certain Zimbabwean citizens. In deciding the matter, Matojane J made adverse findings against General Ntlemeza. He stated that the decision to suspend General Sibiya „was taken in bad faith and for reasons other than those given. It [was] arbitrary and not rationally connected to the purpose for which it was taken and accordingly, it [was] unlawful as it violate[d] applicant‟s constitutional right to an administrative action that is lawful, reasonable and procedurally fair‟. Matojane J went on to make the following order: „1. It is declared that the Notice to Suspension served on the applicant on 20 January 2015 is unlawful, unconstitutional and invalid; and 2. It is declared that the appointment of Major-General Elias Dlamini as the acting Provincial Head of DPCI Gauteng is unlawful, unconstitutional and invalid. 3. [The Office of the National Head Directorate for Priority Crime Investigations: Acting Nationals Head-Major General Berning Ntlemeza] is ordered to pay the costs of the applicant, which will include the costs of a senior and junior counsel.‟ [9] Aggrieved, General Ntlemeza filed an application for leave to appeal but did not hasten to have it set down for hearing. Thereafter, General Sibiya filed an application under s 18 of the Superior Courts Act, seeking leave to execute the declaratory order referred to above. Matojane J, in his judgment dealing with the application for leave to appeal by General Ntlemeza and the application to execute by General Sibiya, had regard to correspondence sent to his registrar on behalf of General Ntlemeza, suggesting that he (Matojane J) had acted improperly in privately engaging with General Sibiya‟s legal representatives. Similar remarks were made in General Ntlemeza‟s affidavit filed in opposition to the application to execute, brought by HSF and FUL. In his assessment of the merits of the two applications, Matojane J once again made remarks calling into question General Ntlemeza‟s integrity. He accused General Ntlemeza of misleading the court by not informing it of a report by the National Independent Police Directorate which exonerated General Sibiya. According to Matojane J, General Ntlemeza referred only to a prior report by the Provincial Independent Police Directorate, which incriminated General Sibiya. He went on to say: „In my view, the conduct of [General Ntlemeza] shows that he is biased and dishonest. To further show that [General Ntlemeza was] dishonest and lack[ed] integrity and honour, he made false statements under oath‟. [10] Matojane J, in dealing with exceptional circumstances, which, as will be seen later, need to be established before an execution order can be granted, said the following: „On the question whether exceptional circumstances exist [General Ntlemeza‟s] contemptuous attitude towards the rule of law and the principle of legality and transparency makes this case unique and exceptional.‟ [11] Matojane J dismissed the application for leave to appeal and granted the application to execute. He ruled that the order he had issued, set out in para 8 above, „shall operate and be executed in full until the final determination of all present and future appeals . . . The order will operate and be executed despite the delivery of any present or future applications for leave to appeal . . . and any noting of any appeal by any party‟. The court stated that there was no need for General Sibiya to furnish security for the execution of the order. [12] A full court (the high court) comprising three judges (Mabuse, Kollapen and Baqwa JJ) probably because of the national importance of the case, was constituted to hear the review application brought by HSF and FUL to have General Ntlemeza‟s appointment set aside. As Part A of that application, HSF and FUL sought an interim interdict preventing General Ntlemeza from exercising any power or discharging any function or duty as head of the DPCI, pending the final determination of the review application. The application for interim relief was dismissed by Tuchten J, whose judgment featured in the decision by the high court and in argument before us. It is an aspect to which I shall revert. A judgment by the high court in the review application (Mabuse J, with the other two judges concurring) was delivered on 17 March 2017. [13] The high court held in favour of HSF and FUL. It reasoned as set out in this and the following two paragraphs. Section 17CA, referred to in para 5 above, requires an appointee as National Head of the DPCI to be a fit and proper person who is also conscientious and has integrity. The high court had regard to the decision of the Constitutional Court in Democratic Alliance v President of the Republic of South Africa & others [2012] ZACC 24; 2013 (1) SA 248 (CC) (the Simelane judgment), which involved the appointment of Mr Menzi Simelane as National Prosecuting Authority Head, and held that the Minister, like the President, had an obligation to ensure that there were no disqualifying factors impinging on the appointment of an individual as the Head of an important national constitutional institution. [14] The high court found that the criteria set by the relevant provisions of the Act were objective and constituted essential jurisdictional facts on which General Ntlemeza‟s appointment had to be predicated. Mabuse J, with reference to the Simelane judgment, said the following (para 33): „In the Simelane case, the Constitutional Court accepted the approach of the Supreme Court of Appeal. In paragraph [14] of the said case this is what the Constitutional Court had to say: “The Supreme Court of Appeal concluded that the President‟s decision was irrational irrespective of whether the decision taken by the President was subjective or whether the criteria for appointment of the National Director were objective. It nevertheless concluded, for the purpose of giving guidance, that the requirement that the National Director must be a fit and proper person constituted a jurisdictional fact capable of objective ascertainment.” Accordingly, even where the relevant decision maker has, in terms of the law, a discretion relating to the person to be appointed, the person who is ultimately appointed must be a fit and proper person in the eyes of the Minister: “Second, and as the Supreme Court of Appeal correctly points out, the Act itself does not say that the candidate for appointment as National Director should be fit and proper „in the President‟s view‟. The Legislature could easily have done so if the purpose was to leave it in the complete discretion of the President. Crucially, as the Supreme Court of Appeal again pointed out, the section „is couched in imperative terms. The appointee “must” be a fit and proper person”‟. [15] The high court considered the judicial pronouncements by Matojane J referred to above, that reflected negatively on General Ntlemeza, to be crucial in the assessment of whether the criteria set by s 17CA of the Act had been satisfied for the appointment of General Ntlemeza. Mabuse J had regard to Minister Nhleko‟s affidavit filed in opposition to the application by HSF and FUL challenging General Ntlemeza‟s appointment, in which he stated that he had been aware of the remarks made in the judgments but took the view that they could be discounted. The high court held that the Minister was not entitled to ignore Matojane J‟s findings concerning General Ntlemeza‟s lack of honesty and integrity. It found that it was for the Minister to determine positively from the objective facts whether General Ntlemeza was a fit and proper person. It reasoned that Minister Nhleko failed to do so. In that regard it stated, at para 37 of its judgment: „The judicial pronouncements made in both the main judgment and the judgment in the application for leave to appeal are directly relevant to and in fact dispositive of the question whether Major General Ntlemeza was fit and proper if one considers his conscientiousness and integrity. Absent these requirements Lieutenant General Ntlemeza is disqualified from being appointed the National Head of the DPCI.‟ The court concluded that Minister Nhleko failed to take into account relevant factors such as the findings by Matojane J, and thus acted irrationally and unlawfully. It made the following order: „1. The decision of the Minister of 10 September 2015 in terms of which Major General Ntlemeza was appointed the National Head of the Directorate of Priority Crimes Investigations is hereby reviewed and set aside. 2. The first and second respondents, in their official capacities, are hereby ordered to pay the applicant‟s costs, including the costs consequent upon the employment of two counsel, the one paying the other to be absolved.‟ [16] Subsequently, General Ntlemeza applied to the high court for leave to appeal that order (the principal order). HSF and FUL, in turn, filed a „counter-application‟, in terms of which they sought, inter alia, as a matter of urgency, a declarator that the operation and execution of the principal order not be suspended by virtue of any application for leave to appeal or any appeal. That court dismissed General Ntlemeza‟s application for leave to appeal, upheld the counter-application and made an order in the following terms: „… 2. The operation and execution of the order granted by this court under case no. 23199/16 on 17 March 2017 is not suspended and will continue to be operational and executed in full whether or not there are any applications for leave to appeal and appeals or whether or not there is any petition for leave to appeal against the said order. 3. The second respondent in the counter-application is hereby ordered to pay the costs of this counter-application.‟ It is against that order (the execution order) and the conclusions on which it was based, that the present appeal, in terms of s 18 of the Superior Courts Act, is directed. Since s 18(4)(ii) gives a person against whom an execution order was granted an automatic right of appeal, it was not necessary for leave to appeal to have been sought. [17] In heads of argument filed in this court and at the outset of oral argument before us, counsel on behalf of General Ntlemeza relied on a jurisdictional point which they submitted, was dispositive of the appeal. The proposition was framed as follows: In terms of s 18(1), a pending decision on an application for leave to appeal or an appeal was a jurisdictional requirement before a court considering an application to enforce an order was empowered to make an execution order of the kind set out in the preceding paragraph. It was contended that sequentially the application for leave to appeal by General Ntlemeza had been refused before FUL‟s counter-application was upheld and thus the high court was precluded from considering HSF and FUL‟s counter-application, because the jurisdictional fact of a pending decision in relation to an appeal or an application for leave to appeal was absent. [18] It is necessary to consider whether that contention is well-founded. To that end, I propose to first consider the position at common law in relation to such applications before the enactment of s 18 of the Superior Courts Act. In the event of it being held that the preliminary point is without substance, I propose to deal with the further provisions of s 18 to determine whether HSF and FUL satisfied its requirements thereby justifying the grant of the execution order. [19] This court, in South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) 1977 (3) SA 534 (A) at 544H-545G, set out the common law position as follows: „Whatever the true position may have been in the Dutch Courts, and more particularly the Court of Holland . . . it is today the accepted common law rule of practice . . . that generally the execution of a judgment is automatically suspended upon the noting of an appeal, with the result that, pending the appeal, the judgment cannot be carried out and no effect can be given thereto, except with the leave of the court which granted the judgment. To obtain such leave the party in whose favour the judgment was given must make special application . . . The purpose of this rule as to the suspension of a judgment on the noting of an appeal is to prevent irreparable damage from being done to the intending appellant, either by levy under a writ of execution or by execution of the judgment in any other manner appropriate to the nature of the judgment appealed from . . . The court to which application for leave to execute is made has a wide general discretion to grant or refuse leave and, if leave be granted, to determine the conditions upon which the right to execute shall be exercised . . . In exercising this discretion the court should, in my view, determine what is just and equitable in all the circumstances, and, in doing so, would normally have regard, inter alia, to the following factors: (1) the potentiality of irreparable harm or prejudice being sustained by the appellant on appeal (respondent in the application) if leave to execute were to be granted; (2) the potentiality of irreparable harm or prejudice being sustained by the respondent on appeal (applicant in the application) if leave to execute were to be refused; (3) the prospects of success on appeal, including more particularly the question as to whether the appeal is frivolous or vexatious or has been noted not with the bona fide intention of seeking to reverse the judgment but for some indirect purpose, eg, to gain time or harass the other party; and (4) where there is the potentiality of irreparable harm or prejudice to both appellant and respondent, the balance of hardship or convenience, as the case may be.‟ (Authorities omitted.) [20] In South Cape this court held that in an application for leave to execute the onus rests on the applicant to show that he or she is entitled to such an order.3 The court went on to hold that an order granting leave to execute pending an appeal was one that had to be classified as being purely interlocutory and was thus not appealable. There were exceptions to the rule that purely interlocutory orders were 3 At 548C-D. not appealable. It is necessary to point out that a number of judgments of this court relaxed this rule on the basis that an appeal may be heard in the exercise of the court‟s inherent jurisdiction in extraordinary cases where grave injustice was not otherwise preventable. In Philani-Ma-Afrika & others v Mailula & others [2009] ZASCA 115; 2010 (2) SA 573 (SCA) this court considered the position where a high court had granted leave to execute an eviction order despite having granted leave to appeal. It held the execution order to be appealable in the interests of justice.4 It must also be borne in mind that before the advent of s 18, the position at common law was that the court had a wide general discretion to grant or refuse an execution order on the basis of what was just and equitable whilst appreciating that the remedy was one beyond the norm. [21] Until its repeal on 22 May 2015, Rule 49(11) of the Uniform Rules, read as follows: „Where an appeal has been noted or an application for leave to appeal against or to rescind, correct, review or vary an order of a court has been made, the operation and execution of the order in question shall be suspended, pending the decision of such appeal or application, unless the court which gave such order, on the application of a party, otherwise directs.‟ This was a restatement of the common law and formed the basis on which applications of this kind were determined. [22] Section 18 of the Superior Courts Act introduced on 23 August 20135 reads as follows: „18 Suspension of decision pending appeal (1) Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal. (2) Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of an final judgment, which is the subject of an application for leave 4 See also Moch v Nedtravel (Pty) Ltd t/a American Express Travel Services 1996 (3) SA 1 (A); S v Western Areas Ltd & others 2005 (5) 214 (SCA), and Nova Property Group Holdings Ltd & others v Cobbett & another [2016] ZASCA 63; 2016 (4) SA 317 (SCA). 5 Issued in terms of GN R36, GG 36774, 22 August 2013. to appeal or of an appeal, is not suspended pending the decision of the application or appeal. (3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders. (4) If a court orders otherwise, as contemplated in subsection (1) – (i) the court must immediately record its reasons for doing so; (ii) the aggrieved party has an automatic right of appeal to the next highest court; (iii) the court hearing such an appeal must deal with it as a matter of extreme urgency; and (iv) such order will be automatically suspended, pending the outcome of such appeal. (5) For the purposes of subsections (1) and (2), a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.‟ [23] As can be seen, s 18(4)(ii) has made orders to execute appealable, fundamentally altering the general position that such being purely interlocutory orders, they were not appealable. Moreover, it granted to a party against whom such an order was made, an automatic right of appeal. In addition s 18(3) requires an applicant for an execution order to prove on a balance of probabilities that he or she „will‟ suffer irreparable harm if the order is not granted and that the other party „will not‟ suffer such harm. [24] Since a court of three judges was constituted to hear the matter, this court, so it was submitted, was „the next highest court‟ envisaged in s 18(4)(ii). It is on that basis that the present appeal came to be set down on an expedited basis before this court, because s 18(4)(iii) directed that the appeal had to be dealt with as a matter of extreme urgency. Understandably, because it is such a dramatic change, only one appeal to „the next highest court‟ is permissible. No further appeal beyond this court appears competent – for present purposes it is not necessary to decide this point. Nor, is it necessary to determine whether the next highest court could, as well, be the full court of the high court in circumstances where the execution order was issued by a single Judge.6 Whatever else, this matter, which is properly before this court, requires the consideration of a novel statutory provision and it would be in the interests of justice for us to do so. [25] In order to embark on a determination of whether the preliminary jurisdictional point raised on behalf of General Ntlemeza, set out in para 17 above, has substance, it is necessary to consider the provisions of s 18(1) and (2). These sections provide for two situations. First, a judgment (the principal order) that is final in effect, as contemplated in s 18(1): In such a case the default position is that the operation and execution of the principal order is suspended pending „the decision of the application for leave to appeal or appeal‟. Second, in terms of s 18(2), an interlocutory order that does not have the effect of a final judgment: The default position (a diametrically opposite one to that contemplated in s 18(1)) is that the principal order is not suspended pending the decision of the application for leave to appeal or appeal. This might at first blush appear to be a somewhat peculiar provision as, ordinarily, such a decision is not appealable. However, this subsection appears to have been inserted to deal with the line of cases in which the ordinary rule was relaxed referred to in para 20 above. [26] Both sections empower a court, assuming the presence of certain jurisdictional facts, to depart from the default position. It is uncontested that the high court‟s judgment on the merits of General Ntlemeza‟s appointment is one final in effect and therefore s 18(1) applies. This section provides that the operation and execution of a decision that is the „subject of an application for leave to appeal or appeal‟ is suspended pending the decision of either of those two processes. Section 18(5) defines what the words „subject of an application for leave to appeal or appeal‟ mean: „a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.‟ [27] When the high court made its decision on the merits of General Ntlemeza‟s appointment on 17 March 2017, that order immediately came into operation and 6 This court might in future face a growing number of appeals against execution orders, particularly because the right to appeal is automatic, which might clog its roll. could be executed. When General Ntlemeza, on 23 March 2017, filed his application for leave to appeal, the order (the principal order) of that court was suspended pending a decision on that application. HSF and FUL‟s „counter-application‟, seeking the execution order, was thus well within the parameters of s 18(1). Did the dismissal of General Ntlemeza‟s application for leave to appeal prior to a decision on the execution application remove the jurisdictional underpinning for an execution order? The short answer is no. The reasons for that conclusion are set out hereafter. [28] The primary purpose of s 18(1) is to re-iterate the common law position in relation to the ordinary effect of appeal processes – the suspension of the order being appealed – not to nullify it. It was designed to protect the rights of litigants who find themselves in the position of General Ntlemeza, by ensuring, that in the ordinary course, the orders granted against them are suspended whilst they are in the process of attempting, by way of the appeal process, to have them overturned. The suspension contemplated in s 18(1) would thus continue to operate in the event of a further application for leave to appeal to this court and in the event of that being successful, in relation to the outcome of a decision by this court in respect of the principal order. Section 18(1) also sets the basis for when the power to depart from the default position comes into play, namely, exceptional circumstances which must be read in conjunction with the further requirements set by s18(3). As already stated and as will become clear later, the Legislature has set the bar fairly high. [29] The preliminary point on behalf of General Ntlemeza referred to in para 17 above does not accord with the plain meaning of s 18(1). As pointed out on behalf of HSF and FUL, and following on what is set out in the preceding paragraph, s 18(1) does not say that the court‟s power to reverse the automatic suspension of a decision is dependent on that decision being subject to an application for leave to appeal or an appeal. It says that, unless the court orders otherwise, such a decision is automatically suspended. [30] Moreover, contextually, the power granted to courts by s 18 must be seen against the general inherent power of courts to regulate their own process. This inherent jurisdiction is now enshrined in s 173 of the Constitution which provides: „The Constitutional Court, the Supreme Court of Appeal and the High Court of South Africa each has the inherent power to protect and regulate their own process, and to develop the common law, taking into account the interests of justice.‟ [31] A further application for leave to appeal the principal order was filed in this court on 21 April 2017. This was always highly likely and always in prospect. The nature of the contestation in the high court, including the negative aspersions concerning the character of the head of a leading crime-fighting unit of the South African Police Service, leads to that compelling conclusion. So too, one would imagine, whatever this court decides it is unlikely to be the final word on the matter. The execution order by the high court reasonably anticipated further appeal processes. This was in any event what was sought by HSF and FUL in their counter application. In their notice of motion, they sought an order that the operation and execution of the principal order not be suspended „by any application for leave to appeal or any appeal, and the order continues to be operational and enforceable and operate … until the final determination of all present and future leave to appeal applications and appeals…‟ A court charged with the adjudication of an application for an execution order would be astute to avoid a multiplicity of applications. [32] There can be no doubt that an application by HSF and FUL for leave to execute, had there not been one earlier, could have been brought and would have been competent after the application for leave to appeal was filed in this court. Courts must be the guardians of their own process and be slow to avoid a to-ing and fro-ing of litigants.7 The high court‟s order achieved that end. A proper case had been made out by HSF and FUL for anticipatory relief. The high court reasonably apprehended on the evidence before it that further appeals were in the offing and issued an order that sought not just to crystallize the position but also to anticipate further appeal processes. For all the reasons aforesaid there is no merit in the preliminary point. 7 In Copthall Stores Ltd. v Willoughby's Consolidated Co. Ltd. (1)1913 AD 305 at 308, this court stated that it has an inherent right to control its own judgments, and in the light of the circumstances of each case to say whether or not execution should be suspended pending an application for special leave to appeal. See also Fismer v Thornton 1929 AD 17 at 19. [33] There is a further point taken on behalf of General Ntlemeza that requires only brief attention. The high court‟s order was handed down on 12 April 2017 and the reasons for the order were provided on 10 May 2017. It was submitted on behalf of General Ntlemeza that since s 18(4)(i) states that a court must immediately record its reasons for ordering „otherwise‟, the high court by not doing so was in contravention of a peremptory provision, which must be seen in conjunction with the provisions of s18(4)(iii) that provides that the court hearing the automatic appeal must deal with it as a matter of extreme urgency. The consequence, so it was contended, was that General Ntlemeza was frustrated in asserting his constitutionally guaranteed right of access to court. It appears to be suggested that this somehow nullified the proceedings related to the application for leave to execute the principal order. It must be pointed out that General Ntlemeza filed his notice of appeal in this court a day after the order upholding the application for leave to execute was issued, on 13 April 2017. The application for leave to appeal in relation to the principal order was filed on 21 April 2017. General Ntlemeza‟s notice of appeal was amended on 11 May 2017, after the high court had provided its reasons. The present appeal was heard on 2 June 2017. Far from being frustrated, General Ntlemeza has had a speedy hearing. Furthermore, since the order to execute was suspended pending the finalisation of the present appeal, no prejudice appears to have been occasioned. Simply put, the purpose of s 18(4) namely, to ensure a speedy appeal, was achieved. That being said it would be a salutary practice to provide reasons pari passu with the order being issued. [34] That leads us to a consideration of whether the high court in granting the order to execute had due regard to the relevant provisions of s 18 and applied them correctly. [35] Section 18(1) entitles a court to order otherwise „under exceptional circumstances‟. Section 18(3) provides a further controlling measure, namely, a party seeking an order in terms of s 18(1) is required „in addition‟, to prove on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders. [36] In Incubeta Holdings & another v Ellis & another 2014 (3) SA 189 (GJ) para 16, the court said the following about s 18: „It seems to me that there is indeed a new dimension introduced to the test by the provisions of s 18. The test is twofold. The requirements are:  First, whether or not “exceptional circumstances” exist; and  Second, proof on a balance of probabilities by the applicant of – o the presence of irreparable harm to the applicant/victor, who wants to put into operation and execute the order; and o the absence of irreparable harm to the respondent/loser, who seeks leave to appeal.‟ [37] As to what would constitute exceptional circumstances, the court, in Incubeta, looked for guidance to an earlier decision (on Admiralty law), namely, MV Ais Mamas Seatrans Maritime v Owners, MV Ais Mamas, & another 2002 (6) SA 150 (C), where it was recognised that it was not possible to attempt to lay down precise rules as to what circumstances are to be regarded as exceptional and that each case has to be decided on its own facts. However, at 156H-157C, the court said the following: „What does emerge from an examination of the authorities, however, seems to me to be the following: 1. What is ordinarily contemplated by the words “exceptional circumstances” is something out of the ordinary and of an unusual nature; something which is excepted in the sense that the general rule does not apply to it; something uncommon, rare or different; “besonder”, “seldsaam”, “uitsonderlik”, or “in hoë mate ongewoon”. 2. To be exceptional the circumstances concerned must arise out of, or be incidental to, the particular case. 3. Whether or not exceptional circumstances exist is not a decision which depends upon the exercise of a judicial discretion: their existence or otherwise is a matter of fact which the Court must decide accordingly. 4. Depending on the context in which it is used, the word “exceptional” has two shades of meaning: the primary meaning is unusual or different; the secondary meaning is markedly unusual or specially different. 5. Where, in a statute, it is directed that a fixed rule shall be departed from only under exceptional circumstances, effect will, generally speaking, best be given to the intention of the Legislature by applying a strict rather than a liberal meaning to the phrase, and by carefully examining any circumstances relied on as allegedly being exceptional.‟ [38] In UFS v Afriforum & another [2016] ZASCA 165 (17 November 2016), para 9, this court stated that it was immediately discernable from ss 18(1) and (3) that the Legislature proceeded from the well-established premise of the common law, that the granting of relief of this nature constituted an extraordinary deviation from the norm that, pending an appeal, a judgment and its attendant orders are suspended. It noted that the exceptionality is further underscored by the requirement of s 18(4)(i); that the court making such an order „must immediately record its reasons for doing so‟. I interpose to state that the reasons contemplated in s 18(4)(i) must relate to the court‟s entire reasoning for deciding „otherwise‟ and must therefore also include its findings on irreparable harm as contemplated in s 18(3). [39] In UFS, this court agreed that whether exceptional circumstances were present depended on the facts of each case. The circumstances must be such as to justify the deviation from the norm.8 The high court, in deciding the application in terms of s 18(1), after referring to Incubeta, went on to consider the facts. It took into account that the DPCI was an essential component of South Africa‟s democracy and that given its functions, it was vital that the National Head had to be someone of integrity. In this regard it considered the judicial pronouncements of Matojane J to be crucial. [40] Before the high court, counsel on behalf of General Ntlemeza had submitted that HSF, FUL and the high court itself had not taken into account the remarks of Tuchten J in his judgment declining to grant an interim interdict pending finalization of the application to have General Ntlemeza‟s appointment declared unlawful.9 It was contended that those remarks had the effect of neutralizing the negative judicial pronouncements of Matojane J. [41] It is apt at this stage to pause and consider the remarks made by Tuchten J. He considered Matojane‟s adverse comments, referred to in para 8 above, and the accusation that Matojane J had met privately with the legal representatives of one party. According to Tuchten J, these statements had „distressed‟ Matojane J.10 Tuchten J considered the further negative findings by Matojane J, referred to in 8 UFS v Afriforum & another [2016] ZASCA 165 (17 November 2016) para 13. 9 Helen Suzman Foundation & another v Minister of Police & others (GP) unreported case no 23199/15 (19 April 2016). 10 Ibid, para 25. paras 9 and 10 above, which were based on events related to the application for leave to appeal and the „counter-application‟. He said the following (para 27): „It is difficult to understand how the conduct of [General Ntlemeza] in relation to the application to put the main judgment into force pending appeal could have a bearing on the ground of appeal.‟ He went on to state (para 66): „I do not think that in Sibiya, in relation to the application for leave to appeal and to put the order into operation pending the appeal, I would have judged [General Ntlemeza] as severely as did Matojane J. I think one must make some allowance for an aggrieved litigant. In addition the preposterous conclusion to which [General Ntlemeza] came regarding the probity of the learned judge was probably fueled by absurd legal advice. [General Ntlemeza] and probably one or more of his lawyers jumped to a wholly unjustified conclusion. But that, as I see it, does not necessarily, or even probably, prove a lack of integrity.‟ [42] To the submissions by counsel on behalf of General Ntlemeza in relation to the remarks of Tuchten J, referred to in para 41 above, the high court responded as follows: „[General] Ntlemeza and the Minister sought leave ... to appeal the Sibiya judgment and leave to appeal was refused. The Minister thereafter petitioned the Supreme Court of Appeal against Matojane‟s judgment in which he made remarks about General Ntlemeza. The Minister‟s application for leave to appeal was dismissed….‟11 Later the court said: „It is our considered view that those remarks which constituted the foundation upon which the applicants launched the main application themselves constitute exceptional circumstances as envisaged by s 18(1) of the Act.‟12 [43] In adjudicating the application for leave to execute the principal order the high court considered General Ntlemeza‟s prospects of success on appeal in relation to the finding that his appointment was unlawful. It concluded that the findings by Matojane J which reflected negatively on General Ntlemeza were a major obstacle for him to overcome and held that his prospects of success were „severely limited‟. 11 Para 14. 12 Para 16. [44] In UFS, this court, after considering that Incubeta had held that the prospects of success in the pending appeal played no part in deciding whether to grant the application, preferred the contrary approach of the court in The Minister of Social Development Western Cape & others v Justice Alliance of South Africa & another (WCC) unreported case no 20806/13 (1 April 2016). However, in UFS, in deciding the matter before it, this court recorded that the review record was not before it and thus had no regard to the prospects of success. We are in the same position in the present appeal. As in UFS, but more so, because of the application for leave to appeal the principal order pending in this case, before us the question of prospects of success recedes into the background. As stated at the commencement of this judgment, s 18 has now had as a consequence the curious and ostensibly undesirable position that there are two appeal processes in one appeal court in relation to the same case. [45] Before us it was submitted that the appellants had failed to show exceptional circumstances and that the high court had erred in deciding the contrary. I disagree, for the reasons provided by that court, referred to above, and those submitted on behalf of HSF and FUL. I agree with the remarks of the high court in relation to the pronouncements by Tuchten J. In my view he misconceived his role. He was not sitting as a court of appeal or review. His remarks do not, as suggested by counsel for HSF and FUL, have a neutralising or any other effect of disturbing the findings of Matojane J. The proper functioning of the foremost corruption busting and crime fighting unit in our country dictates that it should be free of taint. It is a matter of great importance. The adverse prior crucial judicial pronouncements and the place that the South African Police Service maintains in the constitutional scheme as well as the vital role of the National Head of the DPCI and the public interests at play, are all factors that weighed with the court in its conclusion that there were exceptional circumstances in this case. [46] The high court turned its attention to the requirements of s 18(3), namely the irreparable harm that would be suffered by either party. It took into account the submission on behalf of General Ntlemeza that removal from his office, „even if it is momentary‟ would be a devastating blow to his „long and unblemished‟ career. The high court held that the damage that had been done was not as a consequence of the main application but because of the findings of Matojane J, and stated that it failed to see how the enforcement order would wreak the harm General Ntlemeza complained would be occasioned. It took into account that he continued to be paid his full salary and that he still had the possibility of vindication by way of an appeal, should it ensue as a result of a favourable outcome of his petition and a subsequent appeal to this court. Before us, counsel for General Ntlemeza appeared to restrict himself to the contention that General Ntlemeza was suffering reputational harm. But given the findings of Matojane J, the submission that being kept out of his office occasions him reputational harm does not withstand scrutiny. I may add that General Ntlemeza sought to appeal against the judgment of Matojane J, but his petition to this court failed. In the result, the findings by Matojane J are no longer susceptible to reconsideration. [47] Insofar as the requirements of s 18(3) are concerned the high court cannot be faulted for its approach in respect of the question of irreparable harm to General Ntlemeza. On the other side of the coin there is the public interest and the crucial place that the DPCI enjoys in our young democracy as set out above.13In my view the high court cannot be criticized for concluding that HSF and FUL had proved, on a balance of probabilities, that the public will suffer irreparable harm if the court does not grant the order, and that General Ntlemeza will not suffer irreparable harm in light thereof. [48] For completeness, it is necessary to record that Minister Nhleko, the decision- maker in relation to General Ntlemeza‟s appointment, made common cause with him in his opposition to the challenge by HSF and FUL. The Minister of Police and General Ntlemeza applied for leave to appeal the judgment. On 11 April 2017 Minister Nhleko‟s successor, Minister Mbalula, withdrew the application for leave to appeal and tendered costs. The present Minister played no part in this appeal. Simply put, the present Minister did not seek to defend Minister‟s Nhleko‟s decision to appoint General Ntlemeza. 13 Helen Suzman Foundation & another v Minister of Police & others (GP) unreported case no 23199/15 (19 April 2016) para 30. [49] Even though the present appeal is being pursued by General Ntlemeza in his personal capacity, it became apparent towards the end of proceedings before us that his case was funded by the State. The propriety of that course is beyond our scrutiny. There is of course no reason in the present case for a costs order to attach in any other way than personally. [50] It must by now be apparent that the appeal is bound to fail. The effect of the order that follows is that the high court‟s execution order set out in para 16 above remains extant with the consequence that General Ntlemeza is unable to return to his post pending the final determination of the present application for leave to appeal and/or any further appeal processes in relation to the merits of his appointment. [51] For all the reasons aforesaid the following order is made: 1 The appeal is dismissed with costs including the costs of two counsel. 2 The appellant is ordered to pay the costs personally. _____________________ M S Navsa Judge of Appeal APPEARANCES: Appellant: N Dukada SC (with Z Madlanga) Instructed by: Ngidi & Company Inc., Pretoria Bahlekazi Attorneys, Bloemfontein Respondents: D Unterhalter SC (with C Steinberg) Instructed by: Webber Wentzel Attorneys, Sandton Symington & De Kok Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 9 June 2017 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Ntlemeza v Helen Suzman Foundation [2017] ZASCA 93 (9 June 2017) MEDIA STATEMENT The Supreme Court of Appeal (SCA) today dismissed an appeal by Lieutenant-General Mthandazo Berning Ntlemeza (General Ntlemeza) against a judgment of the Gauteng Division of the High Court, Pretoria (Mabuse, Kollapen and Baqwa JJ sitting as court of first instance). The appeal concerned the question whether General Ntlemeza ought to be permitted to continue in his post as National Head of the Directorate for Priority Crime Investigations (DPCI), pending the finalisation of an application for leave to appeal filed in the SCA. The appeal emanated from the following factual background. On 10 September 2015, General Ntlemeza was appointed National Head of the DPCI by the erstwhile Minister of Police, Mr Nkosinathi Phiwayinkosi Thamsanqa Nhleko. Before this, General Ntlemeza had served as acting National Head of the DPCI for a period of approximately one year. During March 2016 General Ntlemeza’s appointment was challenged in the Gauteng Division of the High Court, Pretoria, by the first and second respondents, the Helen Suzman Foundation (HSF) and Freedom Under Law NPC (FUL), respectively. These institutions are non-profit organisations concerned with promoting constitutional values and the rule of law, and brought the application to review and set aside General Ntlemeza’s appointment in their own and the national interest. Their principal ground of review was that Minister Nhleko had failed to take into account materially relevant considerations, more particularly, he failed to have proper regard to a judgment of the High Court, by Matojane J, in an earlier case in which General Ntlemeza’s integrity was called into question. That case was Sibiya v Minister of Police & others (GP) unreported case no 5203/15 (20 February 2015), which concerned the suspension of Major General Shadrack Sibiya, a Provincial Head of the DPCI. General Ntlemeza had accused General Sibiya of being involved in the illegal rendition of certain Zimbabwean citizens. In deciding the matter, Matojane J made adverse findings against General Ntlemeza. He stated that the decision to suspend General Sibiya ‘was taken in bad faith and for reasons other than those given. It [was] arbitrary and not rationally connected to the purpose for which it was taken and accordingly, it [was] unlawful as it violate[d] applicant’s constitutional right to an administrative action that is lawful, reasonable and procedurally fair’. General Ntlemeza lodged an application for leave to appeal that judgment and General Sibiya applied for leave to execute the order setting aside his suspension. In his assessment of the merits of the two applications, Matojane J once again made remarks calling into question General Ntlemeza’s integrity. He accused General Ntlemeza of misleading the court by not informing it of a report by the National Independent Police Directorate which exonerated General Sibiya. According to Matojane J, General Ntlemeza referred only to a prior report by the Provincial Independent Police Directorate, which incriminated General Sibiya. He went on to say: ‘In my view, the conduct of [General Ntlemeza] shows that he is biased and dishonest. To further show that [General Ntlemeza was] dishonest and lack[ed] integrity and honour, he made false statements under oath’. Matojane J dismissed the application for leave to appeal and granted the application to execute. Subsequent attempts by General Ntlemeza to appeal the Sibiya judgment were unsuccessful. It was on the strength of the Sibiya judgment that HSF and FUL sought to review General Ntlemeza’s appointment. A full court (the high court) comprising three judges (Mabuse, Kollapen and Baqwa JJ), perhaps because of the national importance of the case, was constituted to hear the review application brought by HSF and FUL to have General Ntlemeza’s appointment set aside. As Part A of that application, HSF and FUL sought an interim interdict preventing General Ntlemeza from exercising any power or discharging any function or duty as head of the DPCI, pending the final determination of the review application. The application for interim relief was dismissed by Tuchten J. A judgment by the high court in the review application (Mabuse J, with the other two judges concurring) was delivered on 17 March 2017. The high court held in favour of HSF and FUL. It reasoned that s 17CA of the South African Police Service Act 68 of 1995 (the Act), in terms of which General Ntlemeza was purportedly appointed, required an appointee as National Head of the DPCI to be a fit and proper person who is also conscientious and has integrity. The high court had regard to the decision of the Constitutional Court in Democratic Alliance v President of the Republic of South Africa & others [2012] ZACC 24; 2013 (1) SA 248 (CC) (the Simelane judgment), which involved the appointment of Mr Menzi Simelane as National Prosecuting Authority Head, and held that the Minister, like the President, had an obligation to ensure that there were no disqualifying factors impinging on the appointment of an individual as the Head of an important national constitutional institution. The high court considered the judicial pronouncements by Matojane J that reflected negatively on General Ntlemeza, to be crucial in the assessment of whether the criteria set by s 17CA of the Act had been satisfied for the appointment of General Ntlemeza. The high court held that the Minister was not entitled to ignore Matojane J’s findings concerning General Ntlemeza’s lack of honesty and integrity. It found that it was for the Minister to determine positively from the objective facts whether General Ntlemeza was a fit and proper person. It reasoned that Minister Nhleko had failed to do so and concluded that Minister Nhleko acted irrationally and unlawfully in failing to take into account relevant factors such as the findings by Matojane J. It made an order that, inter alia: ‘1. The decision of the Minister of 10 September 2015 in terms of which Major General Ntlemeza was appointed the National Head of the Directorate of Priority Crimes Investigations is hereby reviewed and set aside.’ As mentioned, General Ntlemeza subsequently applied to the high court for leave to appeal that order (the principal order). HSF and FUL, in turn, filed a counter-application, in terms of which they sought, inter alia, as a matter of urgency, a declarator that the operation and execution of the principal order not be suspended by virtue of any application for leave to appeal or any appeal. That court dismissed General Ntlemeza’s application for leave to appeal and upheld the counter-application. It is the grant of the latter application that was the subject of the appeal before the SCA. This application was brought in terms of s 18 of the Superior Courts Act. Section 18 of the Superior Courts gives an aggrieved party an automatic right of appeal ‘to the next highest court’ against a decision of the high court ordering the execution of an earlier ruling issued by it, pending the finalisation of an appeal or an application for leave to appeal. Also pending before the SCA at the time that this appeal was heard, was General Ntlemeza’s petition for leave to appeal against the refusal by the high court of his application for leave to appeal against the principal order. The SCA was thus in a curious position, created by s 18 of the Superior Courts Act, where two parallel processes were being conducted in an appeal court in one case. In the SCA, General Ntlemeza relied on a jurisdictional point which, according to him, was dispositive of the appeal. He framed the proposition as follows: ‘In terms of s 18(1) of the Superior Courts Act, a pending decision on an application for leave to appeal or an appeal was a jurisdictional requirement before a court considering an application to enforce an order was empowered to make an execution order of the kind set out in the preceding paragraph. It was contended that sequentially the application for leave to appeal by General Ntlemeza had been refused before FUL’s counter-application was upheld and thus the high court was precluded from considering HSF and FUL’s counter-application, because the jurisdictional fact of a pending decision in relation to an appeal or an application for leave to appeal was absent.’ Importantly, the SCA, at the outset, dealt with the importance of the DPCI by locating it in its constitutional and statutory setting. It noted that the South African Police Service Act 68 of 1995 (the Act), in terms of which the DPCI was established, has its genesis in s 205 of the Constitution, which provides that the National Police Service must be structured to function in the national, provincial and, where appropriate, local spheres of government. The SCA also had regard to the provisions of s 17 of the Act which established the DPCI, and in particular, s 17CA(1) which requires the National Head to be, inter alia, a fit and proper person who was also contentious and had integrity. In consideration whether General Ntlemeza’s contention regarding s 18 of the Superior Courts Act was sustainable, the SCA proposed first, to consider the position at common law in relation to such applications before the enactment of s 18 of the Superior Courts Act. And in the instance of it being held that the preliminary point is without substance, the SCA would then deal with the further provisions of s 18 to determine whether HSF and FUL satisfied its requirements thereby justifying the grant of the execution order by the high court. With regards to the common law position prior to the enactment of s 18 of the Superior Courts Act, the SCA considered the case of South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) 1977 (3) SA 534 (A) which held that in an application for leave to execute, the onus rested on the applicant to show that he or she was entitled to such an order. In that case, the court went on to hold that an order granting leave to execute pending an appeal was one that had to be classified as being purely interlocutory and was thus not appealable. The SCA, however, noted that there were exceptions to the rule that purely interlocutory orders were not appealable, and highlighted cases where this rule was relaxed on the basis that an appeal may be heard in the exercise of the court’s inherent jurisdiction in extraordinary cases where grave injustice was not otherwise preventable. The SCA also considered the import of Rule 49(11) of the Uniform Rules, which restated the common law position and formed the basis upon which applications of the kind in question were determined. With the advent of s 18 of the Superior Courts Act, this rule was repealed. It read as follows: ‘Where an appeal has been noted or an application for leave to appeal against or to rescind, correct, review or vary an order of a court has been made, the operation and execution of the order in question shall be suspended, pending the decision of such appeal or application, unless the court which gave such order, on the application of a party, otherwise directs.’ Several changes to the common law position were introduced by s 18, and the SCA considered some of these changes. The SCA noted that s 18(4)(ii) has made orders to execute appealable, fundamentally altering the general position that such being purely interlocutory orders, they were not appealable. Moreover, the court continued, it granted a party against whom such an order was made, an automatic right of appeal. In addition s 18(3) requires an applicant for an execution order to prove on a balance of probabilities that he or she ‘will’ suffer irreparable harm if the order is not granted and that the other party ‘will not’ suffer such harm. At para 25 of the judgment, the court said: ‘In order to embark on a determination of whether the preliminary jurisdictional point raised on behalf of General Ntlemeza, has substance, it is necessary to consider the provisions of s 18(1) and (2). These sections provide for two situations. First, a judgment (the principal order) that is final in effect, as contemplated in s 18(1): In such a case the default position is that the operation and execution of the principal order is suspended pending ‘the decision of the application for leave to appeal or appeal’. Second, in terms of s 18(2), an interlocutory order that does not have the effect of a final judgment: The default position (a diametrically opposite one to that contemplated in s 18(1)) is that the principal order is not suspended pending the decision of the application for leave to appeal or appeal. This might at first blush appear to be a somewhat peculiar provision as, ordinarily, such a decision is not appealable. However, this subsection appears to have been inserted to deal with the line of cases in which the ordinary rule was relaxed ….’ The court continued, at para 26, stating that: ‘Both sections empower a court, assuming the presence of certain jurisdictional facts, to depart from the default position. It is uncontested that the high court’s judgment on the merits of General Ntlemeza’s appointment is one final in effect and therefore s 18(1) applies. This section provides that the operation and execution of a decision that is the ‘subject of an application for leave to appeal or appeal’ is suspended pending the decision of either of those two processes. Section 18(5) defines what the words ‘subject of an application for leave to appeal or appeal’ mean: ‘a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.’ The SCA noted that when the high court made its decision on the merits of General Ntlemeza’s appointment on 17 March 2017, that order immediately came into operation and could be executed. When General Ntlemeza, on 23 March 2017, filed his application for leave to appeal, the order (the principal order) of that court was suspended pending a decision on that application. HSF and FUL’s ‘counter-application’, seeking the execution order, the SCA continued, was thus well within the parameters of s 18(1). The question that arose, the court said, was whether the dismissal of General Ntlemeza’s application for leave to appeal prior to a decision on the execution application removed the jurisdictional underpinning for an execution order? The court said that it did not. In its reasoning, the SCA said that: ‘[28] The primary purpose of s 18(1) is to re-iterate the common law position in relation to the ordinary effect of appeal processes – the suspension of the order being appealed – not to nullify it. It was designed to protect the rights of litigants who find themselves in the position of General Ntlemeza, by ensuring, that in the ordinary course, the orders granted against them are suspended whilst they are in the process of attempting, by way of the appeal process, to have them overturned. The suspension contemplated in s 18(1) would thus continue to operate in the event of a further application for leave to appeal to this court and in the event of that being successful, in relation to the outcome of a decision by this court in respect of the principal order. Section 18(1) also sets the basis for when the power to depart from the default position comes into play, namely, exceptional circumstances which must be read in conjunction with the further requirements set by s18(3). As already stated and as will become clear later, the Legislature has set the bar fairly high.’ The SCA found that the preliminary point on behalf of General Ntlemeza did not accord with the plain meaning of s 18(1). The SCA agreed with HSF and FUL that s 18(1) does not say that the court’s power to reverse the automatic suspension of a decision is dependent on that decision being subject to an application for leave to appeal or an appeal. In addition the court said that contextually, the power granted to courts by s 18 must be seen against the general inherent power of courts, which power is enshrined in the s 173 of the Constitution, to regulate their own process. The SCA thus found that General Ntlemeza’s preliminary point was without a basis and said: ‘[32] There can be no doubt that an application by HSF and FUL for leave to execute, had there not been one earlier, could have been brought and would have been competent after the application for leave to appeal was filed in this court. Courts must be the guardians of their own process and be slow to avoid a to-ing and fro-ing of litigants. The high court’s order achieved that end. A proper case had been made out by HSF and FUL for anticipatory relief. The high court reasonably apprehended on the evidence before it that further appeals were in the offing and issued an order that sought not just to crystallize the position but also to anticipate further appeal processes. For all the reasons aforesaid there is no merit in the preliminary point.’ The SCA gave short shrift to the further point raised by General Ntlemeza regarding the failure by the high court to deliver reasons for the judgment, ‘immediately’, as envisaged in s s18(4)(i) of the Superior Courts Act. The high court’s order was handed down on 12 April 2017 and the reasons for the order were provided on 10 May 2017. It was submitted on behalf of General Ntlemeza that since s 18(4)(i) states that a court must immediately record its reasons for ordering ‘otherwise’, the high court by not doing so was in contravention of a peremptory provision, which must be seen in conjunction with the provisions of s18(4)(iii) that provides that the court hearing the automatic appeal must deal with it as a matter of extreme urgency. The consequence, so it was contended, was that General Ntlemeza was frustrated in asserting his constitutionally guaranteed right of access to court. The suggestion was that this invalidated the proceedings related to the application for leave to execute the principal order. The SCA noted that: ‘[34] General Ntlemeza filed his notice of appeal in this court a day after the order upholding the application for leave to execute was issued, on 13 April 2017. The application for leave to appeal in relation to the principal order was filed on 21 April 2017. General Ntlemeza’s notice of appeal was amended on 11 May 2017, after the high court had provided its reasons. The present appeal was heard on 2 June 2017. Far from being frustrated, General Ntlemeza has had a speedy hearing. Furthermore, since the order to execute was suspended pending the finalisation of the present appeal, no prejudice appears to have been occasioned. Simply put, the purpose of s 18(4) namely, to ensure a speedy appeal, was achieved. That being said it would be a salutary practice to provide reasons pari passu with the order being issued.’ The SCA then went on to consider whether the high court in granting the order to execute had due regard to the relevant provisions of s 18 and found that it had. On this score, the SCA said that the high court could not be faulted in its finding that HSF and FUL proved exceptional circumstances were present as envisaged in s 18(1), and further, that HSF and FUL had proved, on a balance of probabilities, that they and the public, would suffer irreparable harm if the court did not make the order and that General Ntlemeza would not suffer irreparable harm if the court so ordered. The SCA said the following: ‘[45] The proper functioning of the foremost corruption busting and crime fighting unit in our country dictates that it should be free of taint. It is a matter of great importance. The adverse prior crucial judicial pronouncements and the place that the South African Police Service maintains in the constitutional scheme as well as the vital role of the National Head of the DPCI and the public interests at play, are all factors that weighed with the court in its conclusion that there were exceptional circumstances in this case.’ In considering the requirement of irreparable harm to General Ntlemeza, the SCA said that his complaint appeared to be restricted to him suffering reputational harm. The SCA in dealing with this question stated that the high court could not be criticized for its approach to the question of irreparable harm. The high court took into account that the reputational damage complained of by General Ntlemeza did not occur as a consequence of its judgment but because of the findings of Matojane J. The SCA said the following: ‘[46] [The high court] took into account that he continued to be paid his full salary and that he still had the possibility of vindication by way of an appeal, should it ensue as a result of a favourable outcome of his petition and a subsequent appeal to this court.’ As against the question of possible reputational harm, the SCA had regard to the high court considering the public interest and the crucial place that the DPCI enjoys in our young democracy. The court also remarked that the present Minister of Police, Mr Fikile Mbalula, did not seek to defend Minister’s Nhleko’s decision to appoint General Ntlemeza. On 11 April 2017 Minister Mbalula withdrew the application for leave to appeal. As regards the costs, the court noted that even though General Ntlemeza was pursuing the appeal in his personal capacity, it became apparent, at the end of the proceedings before it, that his case was funded by the State. The SCA said that it could not scrutinize the propriety of that course. It went on to say that in so far as appeal was concerned, it must follow that General Ntlemeza has to pay the costs personally. In the end, the SCA said: ‘[50] It must by now be apparent that the appeal is bound to fail. The effect of the order that follows is that the high court’s execution order set out in para 16 above remains extant with the consequence that General Ntlemeza is unable to return to his post pending the final determination of the present application for leave to appeal and/or any further appeal processes in relation to the merits of his appointment. --- ends ---

2739

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 104/2011 Reportable In the matter between: CITY OF CAPE TOWN APPELLANT and MARCEL MOUZAKIS STRÜMPHER RESPONDENT Neutral citation: City of Cape Town v Strümpher (104/2011) [2012] ZASCA 54 (30 March 2012) Coram: Mthiyane DP, Van Heerden, Bosielo, Majiedt JJA and Ndita AJA Heard: 12 March 2012 Delivered: 30 March 2012 Summary: Right to water ─ access to water supply cut off by water service authority ─ whether service founded solely on contract ─ whether spoliation order available to water user. _____________________________________________________________________ ORDER On appeal from: Western Cape High Court, Cape Town (Desai J and Gassner AJ sitting as court of appeal): The appeal is dismissed with costs. ___________________________________________________________ JUDGMENT MTHIYANE DP (VAN HEERDEN, BOSIELO, MAJIEDT JJA and NDITA AJA CONCURRING) [1] This is an appeal from a judgment of the full bench of the Western Cape High Court (Desai J and Gassner AJ) upholding a spoliation order granted by the Strand Magistrates‟ Court, in terms of which the City of Cape Town (the City) was directed to reconnect the water supply to a property in the Strand (the property) owned by the respondent. The respondent alleged that the disconnection of the water supply constituted interference with his statutory water rights in terms of the Water Services Act 108 of 1997 and constituted a spoliation. He argued that the water supply could not be disconnected unless the amount in arrears had been determined judicially in the City‟s favour. The City on the other hand contended that the summary disconnection of the water supply was authorised by the City‟s water by-law and its debt collection by-law. It maintained that water was supplied to the respondent in terms of a supply contract it had with him and that, on the authority of the decision of this court in Telkom SA Ltd v Xsinet (Pty) Ltd,1 a mandament van spolie was not available to the respondent. On appeal to this court with the leave of the court below, the City advances the same argument. [2] The common cause facts are succinctly summarised by Gassner AJ. For the past 37 years the respondent has operated a caravan park for permanent tenants at the property. Throughout that period the respondent had use of water supplied by the City. On 16 May 2007 the City notified the respondent that unless arrears of some R182 000, which had accumulated on the property‟s water account, were paid within two days, the water supply would be disconnected. [3] On 28 May 2007, the respondent‟s attorneys addressed a letter to the City querying the water account and declaring a dispute2 regarding the accumulated arrears. The dispute had been on the table for some time. Previous accounts showed that something was amiss because in certain months the recorded water usage was exceptionally high without good reason. It had been demonstrated to an employee of the City, who had visited the property, that the water meter was defective and kept running even when the main water connection was closed. After conducting an inspection on the property, the City had the old water meter and the main connection removed and replaced. However, a leakage was discovered where the old water meter and the main connection had been removed and this was reported to the City. After several pipes were replaced by the respondent, at the request of the City following the report, the recorded water usage dropped. 1 Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (5) SA 309 (SCA). 2 The meaning of „dispute‟ is explained in clause 7(1) of the City‟s Credit Control and Debt Collection Policy which reads as follows: „. . . “dispute” refers to the instance when a debtor questions the correctness of any account rendered by the Municipality.‟ [4] On 17 August 2007 the City disconnected the water supply to the property without responding to the letter of 28 May 2007 from the respondent‟s attorneys. In its answering affidavit the City did not deal with the merits of the dispute, set out in general terms in the founding affidavit, but merely focused on technical points. It contended that the mere existence of a dispute did not avail the respondent because, for example, the City‟s monthly statement to the respondent stipulated that, even in the case of a dispute, payments may not be withheld.3 [5] The above contentions did not carry much weight with the full bench which upheld the spoliation order. Desai J then granted the City leave to appeal to this court. [6] The primary issue on appeal is whether the City was entitled to cut off the water supply to the property due to non-payment of arrears, notwithstanding the fact that the respondent disputed liability. The City advances two main grounds as justification for its summary disconnection of the water supply to the property. First, it argues that the respondent‟s right to the water supply is simply a personal right founded on a contract. Second, the City argues that its interference was authorised by its water by-law and the debt collection by-law. [7] The above submissions will be considered in turn. As to the first, counsel for the City exhorted us to consider, as an appropriate starting point, to the nature of the relationship between the respondent and the City. He argued that if one had regard to ss 18 and 19(2) of the City‟s 3 The relevant portion of the account reads as follows: „4. Selfs al is u in „n dispuut betrokke met die Raad oor hierdie rekening mag u nie betaling weerhou nie.‟ water by-law4 and s 4 of the credit control and debt collection by-law,5 the relationship between the respondent and the City was a contractual one. Referring to s 18 he argued that no person was permitted to use water without first concluding an agreement. That section reads as follows: „No person may use water from the water supply system─ (a) unless an agreement referred to in section 19 or 20 has been concluded. . . .‟ The application for the supply of water is provided for in s 19. Subsection 2 thereof reads as follows: „(2) An application for the supply of water approved by the Director: Water constitutes an agreement between the municipality and the owner and takes effect on the date referred to in the application.‟ So too, in terms of the Water Services Act, the duty of the water service authority to provide water service is subject to the water user‟s obligation to pay reasonable charges. (See s 11(1) and s 11(2)(d). It is clear from the water by-laws that the supply of water is subject to the payment of fees in respect of the supply of water. (See ss 19(3), 19(4)(b) and 23(2)(c). [8] Counsel argued that compelling the City to supply water to the respondent amounted to nothing more than the enforcement of contractual rights under an agreement which, on the authority of the Xsinet case, could not provide a basis for the granting of a spoliation order. [9] The argument advanced on the City‟s behalf is misplaced. It is true that consumers, living within a municipal area, who wish to access water from a water service authority, such as the City, have to conclude a water 4 City of Cape Town Water By-law Provincial Gazette (Western Cape) 6378 of 1 September 2006. 5 City of Cape Town Credit Control and Debt Collection By-law Provincial Gazette (Western Cape) 6364 of 15 June 2006. supply contract with that authority. The fact that a contract must be concluded does not, however, relegate the consumer‟s right to water to a mere personal right flowing from that contractual relationship. It does not relieve the City of its constitutional and statutory obligation to supply water to users, such as the respondent. The right to water is a basic right. Everyone has the right in terms of the Constitution to have access to sufficient water.6 This constitutional provision is given effect to in s 3(1) of the Water Services Act which provides that: „(1) Everyone has a right of access to basic water supply . . . .‟ The City‟s duty to provide water supply services is provided for in s 27(2) of the Constitution which declares that: „(2) The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.‟ Section 27(1)(b) of the Constitution is also given effect to by s 152(1)(b) of the Constitution which provides that: „(1) The objects of local government are─ . . . (b) to ensure the provision of services to communities in a sustainable manner.‟ [10] It follows from the above statutory and constitutional provisions that the right to water, claimed by the respondent when he applied for a spoliation order, was not based solely on the contract which he concluded with the City, but was underpinned by the constitutional and statutory provisions discussed above. This view is fortified by the decision of this court in Impala Water Users Association v Lourens NO & others.7 In that case a water user had obtained a spoliation order directing a water user 6 Section 27(1) of the Constitution reads as follows: „(1) Everyone has the right to have access to─ (a) . . . (b) sufficient . . . water. . . .‟ 7 Impala Water Users Association v Lourens NO & others 2008 (2) SA 495 (SCA). association in terms of s 98(6)(a) of the National Water Act 36 of 19988 to remove locks, chains and welding works from certain sluices and to restore the flow of water from a dam to reservoirs on the water users‟ farms. A dispute arose between the parties concerning the legality of water charges assessed by the water users association relating to the costs of financing the construction of a dam. Although proceedings to recover these charges were pending, the water users association decided to exercise its powers in terms of s 59(3)(b) of the National Water Act.9 The crucial question which the court, on appeal, had to consider was whether the rights on which the water user relied were merely contractual rights. Farlam JA distinguished the Xsinet decision and came to the conclusion that the personal rights flowing from the water supply contract, which the water user in that case had concluded with the water users association, were replaced or subsumed into rights under the National Water Act, which was the act that was applicable in that case. In this regard the learned judge of appeal expressed himself in paras 18 and 19 as follows: „[18] The first question to be considered, in my view, is whether the rights on which the respondents relied were merely contractual and whether the Xsinet decision can be applied. In my opinion, it is not correct to say that the rights in question were merely contractual. It will be recalled that the respondents or the entities they represent were all entitled to rights under the previous Water Act 54 of 1956, which rights were registered in terms of the schedule prepared under s 88 of that Act. These rights were clearly not merely personal rights arising from a contract. The individual respondents and the entities represented by the other respondents all automatically, in terms of para 7.2a of the appellant‟s constitution, became founding members of the appellant. It is clear therefore that the rights to water which belonged to the individual 8 That section provides: „(6) If the Minister accepts the proposal, the Minister may by notice in the Gazette─ (a) declare the board [meaning the irrigation board] to be a water user association.‟ 9 That section provides: „(3) If a water use charge is not paid─ (b) the supply of water to the water user from a waterwork or the authorisation to use water may be restricted or suspended until the charges, together with interest, have been paid.‟ respondents and the entities represented by the other respondents, insofar as they were replaced by or, perhaps more accurately put, subsumed into rights under the Act, cannot be described as mere personal rights resulting from contracts with the appellant. It follows that, on that ground alone, the Xsinet decision, on which the appellant‟s counsel relied, is not applicable. [19] The facts of this case also differ in another material respect from those in the Xsinet case. There is was held (at paras 12 and 13) that the respondent‟s use of the bandwidth and telephone services in question did not constitute an incident of its use of the premises which it occupied, with the result that the disconnection by Telkom of the telephone lines to Xsinet‟s telephone and bandwidth systems did not constitute interference with Xsinet‟s possession of its equipment. In the present case, however, the water rights interfered with were linked to and registered in respect of a certain portion of each farm used for the cultivation of sugar cane, which was dependent on the supply of the water forming the subject-matter of the right. The use of the water was accordingly an incident of possession of each farm which was, in my view, interfered with by the actions of the appellant‟s servants. Indeed in the Xsinet decision itself it was said at the end of para 12 (at 314C - D): “Xsinet happened to use the services at its premises, but this cannot be described as an incident of possession in the same way as the use of water or electricity installations may in certain circumstances be an incident of occupation of residential premises.” In my view, unless the Bon Quelle decision is to be overturned, the respondents have clearly established that the rights to water enjoyed by the individual respondents and the entities represented by the other respondents were capable of protection by the mandament van spolie.‟ [11] The respondent in the present matter finds himself in a position similar to that of the water users in the Impala case. Water users have a statutory right to the supply of water in terms of s 11(1) of the Water Services Act which imposes a duty on a water services authority to ensure access to water services to consumers. It follows that the respondent‟s right to a water supply to the property could not be classified as purely contractual. As in the Impala case the respondent‟s right to a water supply was subsumed into rights under the Water Services Act and cannot be described as merely personal rights resulting from a contract as contended by counsel for the City. [12] I turn to the second issue of whether the City‟s interference with the respondent‟s water supply was authorised by the Water Services Act or the relevant water by-law and the City‟s debt collection by-laws, and is therefore lawful. As a justification for the City‟s conduct in shutting off the water supply, the City relied, in the first instance, on s 30(1) of the water by-law which provides as follows - „(1) Subject to any other right the municipality may have, the City Manager may, if an owner has failed to pay a sum due in terms of the Tariff Policy By-law, by written notice inform him or her of the intention to restrict or cut off the supply of water on a specified date and to restrict or cut off such supply on or after that date.‟ [13] The city also relied on s 11(2)(d) of the Water Services Act, which provides that the duty of a water services authority to ensure access to water services is subject to a duty of consumers to pay reasonable charges and s 11(g) which authorises the water services authority „to limit or discontinue the provision of water services if there is a failure to comply with reasonable conditions set for the provision of such services‟. In counsel‟s heads of argument reliance was also placed on s 9 of the debt collection by-law. It provides that the City Manager may restrict or disconnect the supply of any service to the premises of any user when such user inter alia fails to make payment on the due date. Reference was also made to s 6(5) of the Credit Control and Debt Collection Policy where it is provided that the City shall inter alia not provide any services to any persons who are in arrears with municipal accounts, except as provided for in the policy as determined by the City from time to time. [14] Armed with this arsenal of statutory provisions, the City considered that immediate disconnection of the water supply to the respondent‟s property was authorised. In my view, the City appears to have overlooked the provisions of s 4(3)(a) of the Water Services Act, which requires that „the limitation or discontinuation of water services must be fair and equitable‟ and its own dispute resolution procedures provided for in the Credit Control and Debt Collection Policy. Section 7 of the policy lays down the procedure to be followed when the water user (debtor) has declared a dispute. Section 7(3)(a) thereof provides that all disputes must be concluded by the City Manager within 30 days. Section 7(3)(d) provides for an appeal where the water user is not satisfied with the outcome of the purported resolution of the dispute. The appeal is lodged in terms of s 62 of the Local Government: Municipal Systems Act 32 of 2000. [15] In my view, the dispute resolution procedures provided for in s 7 of the City‟s policy were meant to meet the threshold requirements of „fairness and equity‟ referred to in s 4(3)(a) of the Water Services Act. The notification in the statement of account sent to a consumer (debtor) suggesting that payment should be made even if the debtor is involved in a dispute with the City, appears to fly in the face of the provisions of fairness and equity referred to in s 4(3)(a) and the dispute resolution procedures referred to above. To expect the respondent to pay R182 000 while he is disputing the very amount erodes the principles of fairness contemplated in s 4(3)(a) and the dispute resolution procedures. The harshness of the demand for payment could, however, be ameliorated by the City insisting that the water user continue to pay his or her usual monthly average water charge while an attempt is being made to resolve the dispute. In my view that arrangement would be fair to both the water user and the water services authority. This would also satisfy the fairness and equity standard set in s 4(3)(a). [16] There is no acceptable reason given by the City in this case as to why the procedure prescribed in s 7 of the policy was not followed before the water supply was to the respondent‟s property was shut off. The City did not even provide to the respondent a written acknowledgment of receipt of the dispute, as required by s 7(2)(e) of the policy. The flimsy excuse given by the City, during argument, namely that the procedure was not followed because the account number of the respondent was not given in the letter declaring a dispute, appears to be an afterthought and falls to be rejected. [17] Counsel for the City also attempted to place reliance on the judgment of this court in Rademan v Moqhaka Municipality & others 2012 (2) SA 387 (SCA) as a justification for the City‟s abrupt disconnection of the water supply to the property. Such reliance is however misplaced for two important reasons. First, the case dealt with discontinuance of electricity supply to defaulters. Second, the case is distinguishable on the facts in that in the Rademan case there was a deliberate withholding of payment by the defaulters „who claimed to be unhappy with the municipal services rendered by the municipality‟. (See para 2 of the judgment). [18] It follows therefore that there was in my view no justification for the City to cut off the water supply to the property. [19] Finally I turn to the question whether the spoliation order was the appropriate remedy in the circumstances. I consider that it was. A spoliation order is available where a person has been deprived of his or her possession of movable or immovable property or his or her quasi- possession of an incorporeal. A fundamental principle at issue here is that nobody may take the law into their own hands. In order to preserve order and peace in society the court will summarily grant an order for restoration of the status quo where such deprivation has occurred and it will do so without going into the merits of the dispute. The evidence in the present matter shows that the respondent for the past 37 years received an uninterrupted supply of water from the City at the time when that service was summarily terminated. I have already alluded to the fact that the respondent‟s rights to water were not merely personal rights flowing from a contract but public law rights10 to receive water, which exist independently of any contractual relationship the respondent had with the City. The respondent‟s use of the water was an incident of possession of the property. Clearly interference by the City with the respondent‟s access to the water supply was akin to deprivation of possession of property. There is therefore no reason in principle why a water user who is deprived of a water service summarily by a water service authority, without that authority complying with its procedural formalities for dispute resolution laid down in its own by-laws, should not be able to claim reconnection of the water supply by means of a spoliation order. It therefore follows that the mandament van spolie was available to the respondent and the courts below were correct in granting the relief claimed by the respondent. [20] Accordingly the appeal is dismissed with costs. 10 Joseph & others v City of Johannesburg & others 2010 (4) SA 55 (CC) para 34. ______________________ K K MTHIYANE DEPUTY PRESIDENT APPEARANCES For Appellant: EA de Villiers-Jansen Instructed by: Adriaans Attorneys, Cape Town Honey Attorneys, Bloemfontein For Respondent: RS van Riet SC Instructed by: Hannes Pretorius Bock & Isaacs c/o Visagie Vos, Cape Town Bock Van Es Nikamanzi, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 30 March 2012 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. City of Cape Town v Strümpher (104/2011) [2012] ZASCA 54 (30 March 2012) The Supreme Court of Appeal (SCA) dismissed an appeal against an order of the Western Cape High Court, Cape Town. The appellant supplied water to a property in the Strand owned by the respondent. The respondent declared a dispute regarding certain charges and refused to pay them. As a result the appellant cut off the water supply to the property. The Strand Magistrates’ Court granted a spoliation order in terms of which the appellant was directed to reconnect the water supply. This order was upheld by the high court, which order was the subject of the appeal before the SCA. The SCA held that the respondent’s right to water was not based solely on the contract which he had concluded with the appellant, but was underpinned by the constitutional and statutory obligations placed on the appellant in terms of s 27 of the 1996 Constitution and s 3(1) of the Water Services Act 108 of 1997. The SCA further found that the appellant overlooked its own dispute resolution procedures as well as the requirement in s 4(3)(a) of the Water Services Act ie ‘the limitation or discontinuation of water services must be fair and equitable’ in its decision to cut off the water supply. The Court also held that a spoliation order was an appropriate order, in the circumstances, as the respondent was summarily deprived of his property, as the respondent’s use of the water was an incident of possession of property. In the result the appeal was dismissed with costs.

3260

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case Number : 89 / 07 In the matter between WILMOT MANDLA CHAGI & 29 OTHERS APPELLANTS and SPECIAL INVESTIGATING UNIT RESPONDENT Coram : NAVSA, BRAND, JAFTA, PONNAN et COMBRINCK JJA Date of hearing : 9 NOVEMBER 2007 Date of delivery : 29 NOVEMBER 2007 SUMMARY Special Investigating Units established in terms of Act 74 of 1996 - separate juristic entities – liability for the wrongful acts of the one does not devolve upon the other. ______ Neutral citation: This judgment may be referred to as : Chagi v Special Investigating Unit [2007] SCA 159 (RSA) ___________________________________________________________________ PONNAN JA [1] On 14 June 1995, the Premier of the Eastern Cape acting pursuant to the provisions of the Interim Constitution, established a commission under the chairmanship of Justice Willem Heath, to investigate fraud and corruption in the government of the Eastern Cape and its constituent parts.1 On 20 November 1996, the Special Investigating Units and Special Tribunals Act 74 of 1996 (‘the Act’) was promulgated. According to the long title of the Act, its purpose is: ‘To provide for the establishment of Special Investigating Units for the purpose of investigating serious malpractices or maladministration in connection with the administration of State institutions, State assets and public money as well as any conduct which may seriously harm the interests of the public, and for the establishment of Special Tribunals so as to adjudicate upon civil matters emanating from investigations by the Special Investigating Units; and to provide for matters incidental thereto.’ [2] Section 2(1) of the Act empowered the President to establish a Special Investigating Unit (‘SIU’) for the purposes of investigating allegations of serious mal- administration or unlawful or improper conduct on any of the grounds specified in s 2(2) of the Act. Section 14(1) of the Act provides: ‘The President may, in respect of any Commission of Inquiry ─ (a) appointed by him or her prior to the commencement of this Act; or (b) appointed by any other executive authority prior to the commencement of this Act, upon the request of such executive authority, and if the objects of such Commission can in his or her opinion better be achieved by a Special Investigating Unit and a Special Tribunal, by proclamation in the Gazette dissolve such Commission and establish a Special Investigating Unit and a Special Tribunal in its place in terms of this Act:...’. [3] On 14 March 1997 and at the request of the Premier of the Eastern Cape, the President, acting in terms of s 14(1) of the Act and by virtue of Proclamation R24 of 1997,2 dissolved the Heath Commission and established in its place a Special Investigating Unit (‘the first SIU’) to be headed, in accordance with s 3(1) of the Act, by Justice Heath, as well as a Special Tribunal (‘ST’) with Justice GPC Kotze as the Tribunal President. 1 Appointment of Commission of Inquiry into Matters Relating to State Property and other Property, EC, PN10, PG72, 14 June 1195. 2 Published in Regulation Gazette 5884, Government Gazette 17854. [4] On 11 November 1997 and in terms of s 2(4) of the Act, the President, by Proclamation R72 of 1997,3 amended Proclamation R24 by expanding upon the terms of reference of the first SIU. On 30 June 1998 and in terms of Proclamation R66 of 1998,4 the President referred certain specified matters appertaining to the former Transkei Agricultural Corporation (‘Tracor’), for investigation by the first SIU and, if needs be, for adjudication emanating from such investigation, to the ST. [5] On 28 November 2000, the Constitutional Court declared s 3(1) of the Act as well as Proclamation R24 of 1997 to be inconsistent with the Constitution and invalid but suspended its declaration of invalidity for a period of 1 year.5 The Act was subsequently amended with effect from 31 July 2001 by the Special Investigating Units and Special Tribunals Amendment Act 2 of 2001 to bring it into line with the judgment of the Constitutional Court. By Proclamation R118 of 2001,6 the President repealed Proclamation R24 and established a new Special Investigating Unit (‘the second SIU’) with William Andrew Hofmeyr as its head. [6] Paragraph 6 of Proclamation R118 of 2001 provides: ‘The Special Investigating Unit established under paragraph 2 of this Proclamation [the second SIU] shall continue to investigate all the matters which were referred to the Special Investigating Unit established by Proclamation No. R24 of 14 March 1997 [the first SIU], including those matters referred to it by the said Proclamation and the Proclamations mentioned in the Schedule. Any reference in paragraph 3 of the Proclamations set out in the Schedule to “Proclamation No. R24 of 14 March 1997”, must be interpreted as a reference to this proclamation.’ Amongst the Proclamations referred to in the Schedule, is Proclamation R66 of 1998, which authorised the investigation into the affairs of Tracor. [7] Tracor was wound up during 1998. On 15 August 2001, the 30 appellants in this matter, who were then unemployed but who previously jointly constituted the management of Tracor, issued summons out of the Grahamstown High Court against defendants described as the Special Investigating Unit established in terms of Proclamation R66 of 1998 (the first defendant) and the MEC for the Department of 3 Published in Regulation Gazette 6046, Government Gazette 18431. 4 Published in Regulation Gazette 6223, Government Gazette 19030. 5 South African Association of Personal Injury Lawyers v Heath and Others 2001 (1) SA 883 (CC). 6 Published in Regulation Gazette 7128, Government Gazette 22531. Agriculture and Land Affairs (Eastern Cape) (the second defendant).7 The summons comprised four claims, only two of which, namely A and C, are relevant for present purposes. [8] Paraphrased these claims read: CLAIM A: (a) During August 1998, the plaintiffs had held banking accounts at various banking institutions; (b) On or about 25 August 1998 and in court papers in proceedings instituted by the first and second defendants against the plaintiffs before the ST in East London, the first and second defendants stated to the management and staff of the aforementioned banking institutions of and concerning the plaintiffs that the plaintiffs had: (i) stolen and fraudulently misappropriated a sum of R3.3 million from Tracor; and (ii) utilised Tracor funds without its permission to settle outstanding balances owed by them to financial institutions in respect of motor vehicles in their possession held under various motor vehicle schemes obtaining at Tracor. (c) The founding papers in the aforesaid proceedings together with the temporary interdict were served upon all of the aforementioned banking institutions and a statement to the aforegoing effect was later published in the Daily Dispatch newspaper. (d) The aforementioned statements by the first and second defendant were: (i) wrongful and defamatory of the plaintiffs; (ii) made with the intention to defame the plaintiffs and to injure them in their dignity and reputation; and (iii) understood by the management and staff at the aforementioned banking institutions to mean that the plaintiffs were bad and disreputable managers, corrupt and dishonest individuals and are thieves and frauds. (e) As a result of the aforesaid defamation, the plaintiffs have been damaged in their dignity and reputation and each suffered damages in the estimated sum of R400 000 for which the first defendant is liable. CLAIM C: (a) On or about 21 August 1999, the first and second defendants wrongfully, unlawfully, maliciously and intentionally set the law in motion against the plaintiffs by levelling false accusations against them in an application for an interdict pendente lite before the ST in East London. (b) When launching the aforesaid application the defendants had no reasonable and probable cause for doing so, nor did they have any reasonable belief in the truth of the information given to them. 7 A third defendant who was also cited in the summons but whose particulars are not presently relevant has been omitted. (c) As a result of the grant of the temporary interdict, the plaintiffs’ bank accounts were frozen and the plaintiffs were deprived of access to their funds. (d) During on or about March 2000, the first and second defendants withdrew the action that had been instituted against the plaintiffs which resulted in the aforesaid interdict also falling away. (e) The plaintiffs incurred legal costs in defending the aforesaid application and action. (f) As a result of the freezing of their bank accounts, the plaintiffs suffered an impairment of their dignity. (g) The aforementioned conduct by the first and second defendants was degrading, insulting, injurious and humiliating to the plaintiffs. (h) The aforesaid conduct by the said defendants was wrongful and perpetrated with animo iniuriandi. (i) As a result of the defendants’ aforesaid conduct, the plaintiffs suffered damages in the sum of R150 000 each for the impairment of their dignity and the amount of R5 000 each in respect of attorney and client costs. [9] The plaintiffs’ claim was met with the following special plea: (1) First defendant pleads that it was established on 25 July 2001 by virtue of the provisions of Proclamation R118 of 2001 (the new unit). (3) A Special Investigating Unit had been established in terms of Proclamation R24 of 1997 …( the old unit). (3) The plaintiffs’ complaints and claims all relate to the period August 1998 to March 2000 and are all therefore directed against the old unit. (4) The old unit was abolished in terms of the provisions of paragraph 1 of Proclamation R118 and therefore no longer exists. (6) The first defendant pleads that it was established as a completely new unit in terms of the provisions of Proclamation R118, and that it took over no rights, powers, obligations, or liabilities of the old unit, other than the powers set out in paragraph 6 of Proclamation R118. The first defendant therefore has no jurisdiction to deal with the matters in issue in the plaintiffs’ claims, and therefore has no locus standi to be sued herein. (7) In the premises plaintiffs have no claim against the first defendant and their claims against the first defendant should be dismissed with costs.’ [10] Dambuza AJ upheld the special plea and dismissed both claims. The plaintiffs appeal with leave of this Court. The sole issue for determination in this appeal is whether liability for the plaintiffs’ claims has devolved upon the second SIU, (‘the respondent’). For the reasons that follow the conclusion reached by the court below on this aspect of the case cannot be faulted. [11] A unit such as the respondent is similar to a commission of inquiry and, like a commission, is constrained by the boundaries set by the Act and its founding proclamation.8 Proclamation R118 of 2001 provides, neither expressly nor by necessary implication, for the rights and obligations of the first SIU to devolve upon the second SIU, the respondent. That Proclamation served a dual purpose. First, it dissolved the first SIU; and, second, it established the respondent. Those purposes could likewise have been achieved by the promulgation, with an intervening time- lapse between them, of two separate proclamations, the first, dissolving the first SIU and the second establishing the respondent. Had that happened it could not, without more, have been suggested that the respondent was the de jure successor in title of the first SIU, and thus liable for any wrongful act perpetrated by it. That a single proclamation achieved both ends did not create a legal nexus between the two units where none otherwise existed. [12] Moreover, it was permissible for the President, if he deemed it necessary, to establish more than one SIU. That, theoretically at any rate, is what the Act authorised. And each, according to s 13 of the Act, was to be a separate juristic person. Had that occurred, liability for the wrongful acts of the one would not have devolved upon any of the others. So too in this case, for by parity of reasoning, the consequence of the original actor’s (the first SIU’s) unlawful conduct could not, absent any legal nexus, be imputed to the respondent. [13] Finally, if the intention had been for liability of the first SIU to devolve upon the second, that could have been simply and briefly stated by the Legislature. That would obviously have been a clearer and more effective, indeed an easier, method of expression than the implication inherent in mere silence.9 After all, it must be accepted that the Act and the Proclamation has dealt exhaustively with the subject matter. To accede to the argument urged upon us on behalf of the appellants would defeat the purpose of those enactments. 8 S v Naudé 1975 (1) SA 681 (A) at 704B-E; Special Investigating Unit v Nadasen 2002 (1) SA 605 (SCA) para 5. 9 Per Howie J in Muller v Chairman, Ministers’ Council, House of Representatives 1992 (2) SA 508 (C) at 524E. [14] It should perhaps be added that the appellants were not without remedy. They could have brought the relevant department of National Government before court by citing the responsible political head of that department in a representative capacity. In this case that would have been the Minister of Justice. That is what s 2 of the State Liability Act 20 of 1957 provides.10 Approached thus, the mishap encountered here may well have been avoided. [15] It follows that the appeal must fail. In the result the appeal is dismissed with costs. ___________________ V M PONNAN JUDGE OF APPEAL CONCUR: NAVSA JA BRAND JA JAFTA JA COMBRINCK AJA 10 Jayiya v Member of the Executive Council for Welfare, Eastern Cape 2004 (2) SA 611 (SCA) para 5.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 29 November 2007 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. WILMOT MANDLA CHAGI & 29 OTHERS v SPECIAL INVESTIGATING UNIT (Case No 89 / 07) Media Statement Today the Supreme Court of Appeal (‘SCA’) dismissed an appeal by Wilmot Chagi and 29 Others. The 30 appellants jointly constituted the management of the Transkei Agricultural Corporation (‘Tracor’). Tracor was wound up in 1998. During June 1998, the President referred certain matters relating to Tracor for investigation to the Special Investigating Unit, commonly referred to as the Heath Commission. On 28 November 2000, the Constitutional Court declared provisions of the enabling statute and the regulation in terms of which the Heath Commission had been established to be unconstitutional. On 31 July 2001, the President established a new Special Investigating Unit (the respondent) under the chairmanship of William Andrew Hofmeyr. During 2001 the appellants issued summons out of the Grahamstown High Court alleging that they had been defamed and maliciously prosecuted by the Heath Commission. They sought to recover their loss and damage from the respondent. The respondent raised a special plea that liability for the wrongful acts of the Heath Commission had not devolved upon it. The special plea was upheld by the High Court. The SCA agreed, holding that in terms of the regulation dissolving the Heath Commission and establishing the respondent, the latter was not the de jure successor of the former. The SCA accordingly dismissed the appeal with costs. --- ends ---

1343

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 169/09 In the matter between: MEC FOR ECONOMIC AFFAIRS, ENVIRONMENT APPELLANT & TOURISM: EASTERN CAPE v KLAAS KRUIZENGA FIRST RESPONDENT HENQUE 2189 CC t/a WIMRIE BOERDERY SECOND RESPONDENT Neutral citation: MEC for Economic Affairs, Environment & Tourism v Kruizenga (169/2009) [2010] ZASCA 58 (1 April 2010). Coram: Harms DP; Nugent, Cachalia, Leach JJA et Seriti AJA Heard: 9 March 2010 Delivered: 1 April 2010 Summary: An attorney has ostensible (apparent) authority to bind the client at a pre- trial conference convened in terms of rule 37 of the Uniform Rules even if the effect of the agreement is to settle an opposing party’s claim. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Eastern Cape High Court (Bhisho) (Van Zyl J sitting as court of first instance). The following order is made: ‘The appeal is dismissed with costs, including the costs of two counsel.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ CACHALIA JA (Harms DP, Nugent, Leach JJA and Seriti AJA concurring): [1] This appeal deals with the question of an attorney’s ostensible (apparent) authority to reach agreement at a pre-trial conference convened in terms of rule 37 of the Uniform Rules even if the effect of the agreement is to settle an opposing party’s claim. The Eastern Cape High Court, Bhisho (Van Zyl J)1 held that by instructing the State Attorney to defend the action and to brief counsel to conduct his defence, the appellant represented to the outside world that his legal representatives had ‘the usual authority that applies to their office’. And by not informing the respondents that their authority was limited, he ‘must reasonably have expected that persons who dealt with his agents would believe that they had the authority to compromise the claims’. So, the court concluded, he was estopped (prohibited) from denying the authority of his legal representatives to agree to the settlement.2 The learned judge thus held that the appellant was not 1 MEC for Economic Affairs, Environment and Tourism v Kruisenga 2008 (6) SA 264 (CkHC). 2 Para 69. entitled to escape the consequences of the agreement which his legal representatives had made. He also refused the appellant leave to appeal but this court granted the necessary leave. [2] The dispute forms part of the litigation in a trial action in which the two respondents claim damages from the appellant in his representative capacity arising from an alleged negligent failure of the provincial government’s employees to take preventative measures to contain a fire. The fire started on provincial government property under the appellant’s control and spread to the respondents’ adjoining properties causing extensive damage to their vegetation and infrastructure. [3] The factual background and chronology of the present dispute is set out in the high court’s reported judgment and need not be repeated in detail.3 In essence the dispute concerns whether the agreements, which the State Attorney reached with the respondents at two rule 37 pre-trial conferences without the appellant’s authority, are binding. The minute of the first conference, which was signed by the parties’ attorneys some six months later, records that the appellant had conceded ‘the merits of the plaintiff’s case and the only aspect that remains in dispute between the parties and which remains to be resolved is that of quantum’. The second conference was held, almost 18 months later, after the trial judge, on the morning before the trial commenced, enquired from the parties’ legal representatives whether any attempt had been made to settle the dispute over quantum. The matter then stood down for the parties to consider settlement proposals. They met the following day. The minute of this meeting, which was signed by attorneys and counsel for the parties, records the appellant to have admitted liability for some heads of the damages claimed whilst the dispute over the remaining heads would proceed to trial. This minute, which incorporated the earlier agreement, was placed before the judge. The appellant then sought a postponement of the whole case, which the judge refused in the light of the 3 Paras 1-8. admissions made. The high court accordingly made an order based on the admitted liability and postponed the hearing concerning the outstanding issues. [4] Thereafter, with a view to reopening the provincial government’s case on the merits, the appellant launched an application to rescind and set aside the court order and to withdraw the admissions his legal representatives had made as recorded in the pre-trial minutes. He grounded his application on an allegation of the existence of a general practice or instruction – but unbeknown to the respondents or their legal representatives – to the effect that the State Attorney needed his or the head of department’s express authority to settle or compromise a claim and concomitantly on the State Attorney’s failure to obtain his specific authority to concede the merits of the action or to settle certain heads of damage. (There is no suggestion that counsel, who was instructed to appear for the state, was aware that the State Attorney lacked authority and for present purposes only the latter’s authority is in issue.) Although there was a factual dispute concerning the existence of the general practice the high court approached the matter on the basis that there was such a practice. And I will likewise do so. [5] The appellant’s application for rescission was brought under the common law and not in terms of Uniform rules 31 or 42. Mr Buchanan, who appears for the appellant, contends that the appointment of attorney and counsel, in itself, does not give rise to a representation that they have full authority, not only to conduct the litigation, but to compromise a claim or to consent to judgment against the client. The law, he submits, requires express – not merely apparent authority – for this purpose. And so he contends, because the State Attorney agreed to compromise the claim in conflict with general practice – and that judgment was granted pursuant thereto – this entitles the appellant to the relief claimed. [6] It is important to reiterate what was said at the outset – the issue in this matter is whether the appellant may resile from agreements made by his attorney, without his knowledge, at a rule 37 conference. The judgment does not deal with agreements reached outside of the context of conducting a trial in the normal course of events. The rule was introduced to shorten the length of trials, to facilitate settlements between the parties, narrow the issues and to curb costs.4 One of the methods the parties use to achieve these objectives is to make admissions concerning the number of issues which the pleadings raise.5 Admissions of fact made at a rule 37 conference, constitute sufficient proof of those facts.6 The minutes of a pre-trial conference may be signed either by a party or his or her representative.7 Rule 37 is thus of critical importance in the litigation process. This is why this court has held that in the absence of any special circumstances a party is not entitled to resile from an agreement deliberately reached at a rule 37 conference.8 And when, as in this case, the agreements are confirmed by counsel in open court, and are then made a judgment or order of a court, the principle applies with even more force. [7] It is settled law that a client’s instruction to an attorney to sue or to defend a claim does not generally include the authority to settle or compromise a claim or defence without the client’s approval.9 The rule has been applied to a judgment consented to by an attorney without his client’s authority10 and also when the attorney did so in the mistaken belief that his client had authorised him to do so.11 This principle accords with the rule in the law of agency that where an agent exceeds the express or implied authority in transacting, the principal is not bound by the transaction.12 4 LTC Harms Civil Procedure in the Supreme Court Issue 39 para B37.2. 5 Rule 37(6)(e). 6 Price NO v Allied-JBS Building Society 1980 (3) SA 874 (A) 882D-H. 7 Rule 37(6). 8 Filta-Matix (Pty) Ltd v Freudenberg & others 1998 (1) SA 606 (SCA) 614B-D. 9 Voet 3.3.18; Ras v Liquor Licensing Board, Area No. 10 Kimberley 1966 (2) SA 232 (C) 237E-F; Goosen v Van Zyl 1980 (1) SA 706 (O) 709F-H; Bikitsha v Eastern Cape Development Board & another 1988 (3) SA 522 (E) 527J-528A; 14 Lawsa 2 ed para 305. 10 Ntlabezo v MEC for Education, Culture and Sport, Eastern Cape 2001 (2) SA 1073 (TkHC) 1080-1081. 11 De Vos v Calitz and De Villiers 1916 CPD 465. 12 Francois du Bois et al Wille’s Principles of South African Law 9 ed (2007) p 998; See J.R Midley Lawyers’ Professional Liability (1992) p 8, who holds the view that while the courts have [8] But there appears to be some uncertainty in the way this principle has been applied. Midgley observes that our courts, under the influence of English law, have distinguished between settlements made outside of and those made during the course of litigation – and appear to have accepted that the power to settle a claim is one of the usual and customary powers afforded a legal representative in the latter instance.13 So, in Mfaswe v Miller,14 an attorney’s clerk compromised a claim on the day of the trial before the client had arrived at court. He did so fearing that if the client did not arrive in good time default judgment may be given against him. Thereafter the client sued his attorney for the full amount of the original claim. The court said that the clerk had accepted the compromise ‘in the exercise of the discretion vested in an attorney’.15 And because he had acted in good faith, and was not negligent, the court held that the attorney was not liable to the client in damages. Alexander v Klitzke16 provides an interesting example of an attorney’s general authority. The defendant had alleged that his attorney’s general authority did not empower him to accept the plaintiff’s tender of settlement, but the court disagreed, saying: ‘The authority of a power of attorney which is filed by the client, to carry his case to final end and determination, does include authority to make a bona fide compromise in the interests of his client, and at any rate, if a client wishes to repudiate such a compromise made on his behalf, then I certainly think that the repudiation should be a timeous one.’17 In Klopper v Van Rensburg,18 in an ex parte application for a temporary interdict to restrain the sale of usufructuary property, and in answer to a question from the court, counsel stated that if security were given by the respondent for the value of sometimes used the terms ‘mandatory’ and ‘agent’ interchangeably to describe the attorney-client relationship, the preferable view is that when engaged in litigation on a client’s behalf the attorney is acting as an agent and not merely as a mandatory. 13 J R Midgley ‘The Nature and Extent of a Lawyer’s Authority’ (1994) 111 SALJ 415 p 420. 14 (1901) 18 SC 172. 15 Above p 175. 16 1918 EDL 87. 17 Above at 88. 18 1920 EDL 239. the property sold, that would meet the case. When the respondent thereafter tendered security, and the applicant rejected it contending that counsel had no authority to agree to a tender of security, the court held that he was bound by his counsel’s offer as the latter ‘was only doing his plain duty (to) his client. He was making an offer in his client’s best interests, and an offer which . . . he had every right to make’.19 [9] However, recently, in Hawkes v Hawkes20 the court seemed to adopt a different approach by placing emphasis on whether the agreement concluded was in the client’s best interests, rather than on the discretion exercised by the client’s legal representative. It held that where an advocate gave an undertaking to the court on behalf of his client without having a mandate to that effect in the attorney’s absence and contrary to his client’s best interests and also in conflict with his mandate to oppose an interdict sought against his client the client was not bound thereby. This approach resonates with the view adopted in Bikitsha v Eastern Cape Development Board & another,21 where an attorney, before summons had been issued, without having his client’s consent, advised his opponent that his client was prepared to waive the ‘prescriptive period’. In holding the client not bound by his attorney’s waiver, the court noted that ‘for acts of great prejudice an attorney needs a special mandate’22 and ‘[a] general mandate does not authorise an attorney to act in a manner adverse to his client’s interests’.23 [10] The courts have also distinguished the ambit of the authority of attorneys in private practice from that accorded to the State Attorney holding that the latter has wider general authority because such authority is derived from statute.24 It has thus been held that the fact that a senior government official is unaware of 19 Above p 242. 20 2007 (2) SA 100 (SE). 21 Cited above, n 9. 22 At 527I-J. 23 At 528A. 24 Section 3 of the State Attorney Act 56 of 1957. and has not expressly approved of a settlement concluded by counsel on the Deputy State Attorney’s instructions does not entitle the government to resile from the settlement.25 Moult v Minister of Agriculture and Forestry, Transkei26 provides a clearer example of the breadth of the State Attorney’s authority. The plaintiff sued the government for damages arising out of a motor-vehicle collision – but out of the twelve-month statutory expiry period. The State Attorney, as in Bikitsha,27 had previously waived strict compliance with this requirement. The government alleged that it was not bound by the waiver. Beck CJ, however, distinguished those cases involving private attorneys, such as Bikitsha, and held that the waiver ‘was of a kind which Government ordinarily leaves to the Government attorney to decide’. He found that the State Attorney’s authority derives from ‘the particular capacity in which the agent has been employed by the principal and from the usual and customary powers that are found to pertain to such an agent as belonging to a particular category of agents’.28 [11] To summarise it would appear that our courts have dealt with questions relating to the actual authority of an attorney to transact on a client’s behalf in the following manner: Attorneys generally do not have implied authority to settle or compromise a claim without the consent of the client. However, the instruction to an attorney to sue or defend a claim may include the implied authority to do so provided the attorney acts in good faith. And the courts have said that they will set aside a settlement or compromise that does not have the client’s authority where, objectively viewed, it appears that the agreement is unjust and not in the client’s best interests. The office of the State Attorney, by virtue of its statutory authority as a representative of the government, has a broader discretion to bind 25 Dlamini v Minister of Law and Order & another 1986 (4) SA 342 (D). 26 1992 (1) SA 688 (TkGD) 692H-I. 27 Above para 9. 28 Above at 692H-I citing Botha J in Inter-Continental Finance and Leasing Corporation (Pty) Ltd v Stands 56 and 57 Industria Ltd & another 1979 (3) SA 740 (W) at 748D. the government to an agreement than that ordinarily possessed by private practitioners, though it is not clear just how broad the ambit of this authority is.29 [12] My discussion thus far has been concerned with the limits of an attorney’s actual authority to bind a client without the latter’s consent. The question arises in this case is whether a client may be estopped from denying the authority of his attorney to settle or compromise a claim.30 [13] The issue arose in this court in Hlobo v Multilateral Motor Vehicle Accidents Fund.31 The case concerned a claimant’s claim for compensation on behalf of her minor daughter, who had been injured in a motor vehicle accident. A settlement agreement, which had been preceded by months of negotiation during litigation, was concluded by Messrs Lowe and De la Harpe, who respectively acted as attorneys for the claimant and the Fund. De la Harpe submitted proposals for the final form of the agreement to the Fund. As in this case, the proposals were recorded in a rule 37 minute. A letter from the Fund’s claims-handler, confirmed its acceptance of the proposals. And acting on this confirmation De La Harpe settled the claim. The Fund then sought to have the agreement set aside on the ground that the agreement concluded between the parties’ attorneys had been reached on the strength of a communication from the claims-handler who had no power to authorise the settlement. The court rejected the Fund’s defence. In the course of its judgment it said the following: ‘What all this shows is that in his dealings with Mr De la Harpe, Mr Lowe would have had no reason to question his (De la Harpe's) authority. He in fact did not do so. From Mr Lowe's point of view De la Harpe had at least ostensible authority to conclude the settlement. All the requirements which must be satisfied before reliance upon ostensible authority can succeed were satisfied. Respondent had appointed Mr De la Harpe as its attorney. It was known to it that he was conducting settlement negotiations on its behalf. 29 See Generally J R Midgley ‘The Nature and Extent of a Lawyer’s Authority’ (1994) 111 SALJ 415. 30 Ras v Liquor Licensing Board (above) n 9 at 238G-H. 31 2001 (2) SA 59 (SCA). It allowed him to do so and in so doing clothed him with apparent authority to settle on its behalf. The appellant, through her attorney, relied upon the apparent existence of authority and compromised the claim on the strength of its existence. Absent any other defence, the settlement is binding upon the respondent. In fact, of course, he had express authority which it is now sought to repudiate.’32 [14] The facts in Hlobo differ from the present one because there the attorney, De La Harpe, was found to have had actual authority to conclude the agreement – a point which Mr Buchanan pressed in argument in an effort to distinguish it. The passage cited above dealing with De la Harpe’s apparent authority in the judgment is, I accept, obiter. But, as I will show below, this does not detract from its persuasive quality. I turn to the present matter. [15] To establish apparent authority on the provincial government’s part, the respondents aver that by appointing the State Attorney to defend the action which necessarily entailed participating in various pre-trial processes, including pre-trial conferences, it represented that he had authority to settle the claims. [16] It is well-established that to hold a principal liable on the basis of the agent’s apparent authority the representation must be rooted in the words or conduct of the principal, and not merely that of his agent.33 Conduct may be express or inferred from the ‘particular capacity in which an agent has been employed by the principal and from the usual and customary powers that are found to pertain to such an agent as belonging to a particular category of agents’.34 It may also be inferred from the ‘aura of authority’ associated with a position which a person occupies, at the principal’s instance, within an institution.35 32 Hlobo at para 11. 33 NBS Bank Ltd v Cape Produce Co (Pty) Ltd 2002 (1) SA 396 (SCA) 412C-E; Glofinco v Absa Bank Ltd t/a United Bank 2002 (6) SA 470 (SCA) para 13. 34 Per Botha J in Inter-Continental Finance and Leasing Corporation (Pty) Ltd v Stands 56 and 57 Industria Ltd & another 1979 (3) SA 740 (W) at 748D. 35 Glofinco v Absa Bank Ltd (above) n 34 para 1. [17] Properly understood the representation from the principal in this case relates only to the appointment of the State Attorney to defend the claim and to instruct counsel in this regard. The further conduct relied on is not that of the principal but of the agent himself and cannot in and of itself bind the principal. The respondents’ true case is that by appointing the State Attorney to defend the claim, the appellant represented to them, and they reasonably believed, that the State Attorney had the usual and customary powers associated with the appointment.36 These included instructing counsel to defend the claim, to draft the plea and to attend all pre-trial procedures, including rule 37 conferences. In other words the appellant represented to the respondents and the outside world that the State Attorney had the authority not only to conduct the trial but also to make concessions at the conferences and to conclude the settlement agreement from which he now wishes to resile. [18] During argument before us Mr Buchanan did not contend that the State Attorney had no authority to attend the pre-trial conferences. He could hardly have done so because such attendance by an attorney, as I have mentioned earlier, is envisaged in the rule and clearly falls within the usual or customary functions of an attorney in the litigation process. Instead his argument was that the State Attorney’s authority was confined to attending the conference and making certain admissions that may, in his judgment, have been necessary. But, as I understand the submission, once he agreed to settle the claim, first by conceding the merits and later by agreeing that his client was liable for certain heads of the damages claimed, he not only exceeded his actual authority but also his usual functions. [19] Unsurprisingly Mr Buchanan had insurmountable difficulty attempting to defend this assertion. In particular he was not able to draw the line between what the State Attorney had the authority to agree on and what not. To test the 36 It is not the respondents’ case that by appointing the State Attorney they believed that he had any wider or additional powers to an attorney in private practice. assertion, suppose the attorney agreed on making certain factual admissions without conceding liability in order to curtail the proceedings, which in hindsight proved to have been a mistake. Realising the error he then attempts to withdraw these admissions, but the other side refuses to allow him to do so. And faced with the prospect of continuing the litigation at a disadvantage he agrees to a settlement. It could hardly be asserted that the admissions fell within his usual authority but the settlement, which amounts to a string of admissions, not. To test the assertion further, would the admissions stand if the ‘merits’ were conceded but not causation? And further, what if causation was conceded but not the quantum of damages? What these intractable difficulties show ineluctably is that it is impossible to draw any line between an attorney’s apparent authority to attend and represent his client at a pre-trial conference and his apparent authority to conclude agreements or make concessions there. [20] I accept that, in this matter, by agreeing to the settlement the State Attorney not only exceeded his actual authority, but did so against the express instructions of his principal. As opprobrious as this conduct was, I cannot see how this has any bearing on the respondents’ estoppel defence. The proper approach is to consider whether the conduct of the party who is trying to resile from the agreement has led the other party to reasonably believe that he was binding himself.37 Viewed in this way it matters not whether the attorney acting for the principal exceeds his actual authority, or does so against his client’s express instructions. The consequence for the other party, who is unaware of any limitation of authority, and has no reasonable basis to question the attorney’s authority, is the same.38 That party is entitled to assume, as the respondents did, that the attorney who is attending the conference clothed with an ‘aura of authority’ has the necessary authority to do what attorney’s usually do at a rule 37 conference – they make admissions, concessions and often agree on 37 Hlobo para 12; Cf George v Fairmead (Pty) Ltd 1958 (2) SA 465 (A) 471A-D. 38 Cf City of Tshwane Metropolitan Municipality v RPM Bricks 2008 (3) SA 1 SCA para 12. compromises and settlements. In the respondents’ eyes the State Attorney quite clearly had apparent authority.39 [21] Mr Buchanan submitted further that to allow the estoppel defence where an attorney exceeds his or her authority could lead to grave injustices and that for policy reasons the estoppel defence should not be allowed in these circumstances. There are two answers to this submission. First, Plewman JA specifically recognized the competence of the defence in the passage quoted above in Hlobo, albeit in an obiter dictum. And this court will not lightly depart from a view it has previously expressed, even if only obiter.40 Secondly, because estoppel is a rule of justice and equity, it is open to a court to disallow the defence on this ground.41 It was not suggested that it would be either unjust or inequitable to allow the defence in the circumstances of this case. Indeed, the contrary is true. The prejudice to the respondents if the defence is not upheld is evident – even with the appellant’s tender to pay the respondents’ wasted costs. The respondents and their counsel prepared for trial on the basis of the concessions and on the issues which remained in dispute – not on the merits or on the heads of damages which were agreed upon. Moreover the appellants have after all this time not even established a defence. To allow the appellant to resile from these agreements, made over a period spanning 18 months, would defeat the purpose of rule 37, which encourages settlements, and severely hamper the conduct of civil trials. It would mean practically that attorneys can no longer assume that their colleagues are authorised to make important decisions in the course of litigation without the principal’s independent confirmation. This cannot be countenanced. 39 Cf A J Kerr The Law of Agency 3 ed (1991) p 149. 40 Steenkamp v South African Broadcasting Corporation 2002 (1) SA 625 (SCA) 629F-G. 41 See generally P J Rabie and J C Sonnekus The Law of Estoppel in South Africa 2 ed (2000) ch 7; Lord Denning in Moorgate Mercantile Co Ltd v Twitchings [1975] 3 All ER 314 (CA) at 323d- g said: ‘(Estoppel) . . . is a principle of justice and of equity. It comes to this. When a man, by his words or conduct, has led another to believe in a particular state of affairs, he will not be allowed to go back on it when it would be unjust or inequitable for him to do so.’ [22] In the result I conclude that the high court was correct to hold that the appellant is estopped from denying the authority of the State Attorney to enter into the agreements in question.42 It follows that the appeal must fail. The order I make is that the appeal is dismissed with costs, including the costs of two counsel. ________________ A CACHALIA JUDGE OF APPEAL 42 MEC for Economic Affairs v Kruizenga (above) n 1 para 69. APPEARANCES APPELLANTS: R G Buchanan SC Instructed by Wesley Pretorius and Associates, East London State Attorney; Bloemfontein RESPONDENT: H J van der Linde SC (with him P E Jooste) Instructed by Jordaan & Pretorius Attorneys, Plettenberg Bay Rosendorff Reitz Barry, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 1 April 2010 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. MEC v Kruizenga [1] The SCA today held that an attorney, who agrees at a pre-trial conference in terms of rule 37 of the Uniform Rules to settle an opposing party’s claim without his client’s authority, nevertheless has ostensible (apparent) authority to bind the client to the agreement. It therefore dismissed an appeal by the MEC for Economic Affairs, Environment and Tourism in the Eastern Cape against a judgment of the high court in Bhisho, which had made the same finding. It also ordered the MEC to pay the costs of the appeal, including the costs of two counsel. [2] The dispute formed part of the litigation in a trial action in which the two respondents claim damages from the appellant in his representative capacity arising from an alleged negligent failure of the provincial government’s employees to take preventative measures to contain a fire. The fire started on provincial government property under the appellant’s control and spread to the respondents’ adjoining properties causing extensive damage to their vegetation and infrastructure. [3] In essence the dispute concerned whether the State Attorney, who had reached certain agreements on behalf of the MEC with the respondents over a period of 18 months at two pre-trial conferences convened in terms of rule 37, the effect of which was to settle most of the respondents’ claims, had bound the MEC by these agreements. The MEC’s legal representatives argued that the MEC was not bound because the State Attorney was not authorised to make the agreements. The argument was made on the basis of the existence of a general instruction that the State Attorney may not settle any claim without the express authority of the MEC or the head of department. [4] The SCA held that once the MEC had instructed the State Attorney to defend the claim, this necessarily included his attending various pre-trial processes, including pre-trial conferences. The MEC thereby represented to the respondents that the State Attorney had the authority to settle the claims. And because the respondents were unaware of any limitation of authority on the State Attorney, it held that the MEC could not escape the consequences of these agreements. [5] The SCA held that to allow the MEC not to be bound by the agreements, made over a period of 18 months, would defeat the purpose of rule 37, which encourages settlements, and severely hamper the conduct of civil trials. It would mean that attorneys can no longer assume that their colleagues are authorised to make important decisions in the course of litigation without their client’s authorisation. [6] It thus held that the MEC was estopped (prohibited) from denying the State Attorney’s authority to conclude the agreements in question.

100

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 777/2016 In the matter between: MINISTER OF JUSTICE AND CORRECTIONAL SERVICES APPELLANT and JANUSZ JAKUB WALUS RESPONDENT Neutral citation: Minister of Justice and Correctional Services v Walus (777/2016) [2017] ZASCA 99 (18 August 2017) Coram: Maya P, Shongwe ADP, Mbha and Van Der Merwe JJA and Schippers AJA Heard: 29 May 2017 Delivered: 18 August 2017 Summary: Parole – application therefor brought by respondent serving sentence of life incarceration for murder in terms of s 136(1) of the Correctional Services Act 111 of 1998 – appellant’s omission to consider widow of deceased’s victim impact statement and the failure to furnish the respondent therewith constituted material procedural irregularities in terms of s 6(2) of the Promotion of Administrative Justice Act 3 of 2000 vitiating the refusal to place the respondent on parole – decision remitted for the appellant’s reconsideration. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Janse Van Nieuwenhuizen J sitting as court of first instance): 1 The appeal is upheld with no order as to costs. 2 The matter is remitted to the appellant for his reconsideration and decision within 90 calendar days of this order. __________________________________________________________________ JUDGMENT __________________________________________________________________ Maya P (Shongwe ADP, Mbha JA, Van Der Merwe JA, Schippers AJA concurring): [1] The crisp issue in this appeal is whether the Gauteng Division of the High Court, Pretoria (Janse Van Nieuwenhuizen J) erred in reviewing and setting aside the decision of the appellant, the Minister of Justice and Correctional Services (the minister), not to place the respondent on parole, on the basis that it was irrational and unreasonable. The appeal is with the leave of this Court. [2] The background facts are simple. On 15 October 1993 the respondent, Mr Janusz Jakub Walus, was convicted of the murder of the late Mr Thembisile ‘Chris’ Hani (the deceased) and the illegal possession of a firearm. The trial court (the Witwatersrand Local Division per Eloff JP) found it especially aggravating that the respondent and his co-accused,1 ‘simply arrogated to themselves the right to destroy the life of a person because of their own political perceptions’. The court concluded that the murder was a calculated, cold-blooded assassination of a defenceless victim for which the perpetrators showed no remorse. It therefore sentenced the respondent to death for the murder and five years’ imprisonment for the illegal possession of a firearm.2 On appeal against the death sentences, this Court, on 7 November 2000, held that the ‘atrocious crime [of murder] demands the severest punishment which the law permits’. Accordingly, this Court commuted the death sentences to life imprisonment, antedated to the date of sentence and ordered the sentence in respect of the other count to run concurrently with the sentence of life imprisonment.3 [3] On 10 April 2015, following a hearing of the respondent’s application for parole held in November 2013,4 the minister decided not to place him on parole at that stage (the decision). By then the respondent had served 21 years and six months of his sentence. The decision was couched as follows: ‘1. The placement of the offender on parole is not recommended at this stage. 2. A further profile of twelve (12) months is hereby approved. 3. In the interim, the Department is to assist the offender in the following:- 3.1 Restorative Justice Process: It appears from the various reports that the offender has indicated a willingness to be afforded an opportunity to personally apologize to the victim’s family. In the light of this, I am of the view that it is crucial that he be afforded this opportunity to participate in this restorative justice process. This process will, to an extent, restore the balance and the harm caused to the victim’s family hopefully, 1 Mr Clive Derby-Lewis, who is now deceased. 2 Mr Derby-Lewis was also sentenced to death for the murder and five years’ imprisonment for the illegal possession of a firearm and unlawful possession of ammunition, which were taken together for purposes of sentence. 3 Following upon S v Makwanyane & another 1995 (3) SA 391 (CC) which outlawed capital punishment. This decision declared the death sentence, in terms of s 277(1)(a), (c), (d), (e) and (f) of the Criminal Procedure Act 51 of 1977 and all corresponding provisions of other legislation in any part of the national territory in terms of s 229 of the Constitution of the Republic of South Africa Act 200 of 1993, which sanctioned capital punishment, unconstitutional and accordingly invalid. 4 The respondent had previously been considered for placement on parole in June 2011. That application was also as well as the community as a whole. Furthermore, I am certain that this process will also assist the offender [to] come to terms with the crime committed as well as to accept responsibility for the crime and thereby contribute towards his own healing and rehabilitation pathway. This can be achieved either through the VOD and/or VOM process or whichever process is deemed appropriate by the qualified professionals. 3.2 Security: The Department, together with other relevant structures should advise on the security threats, if any, that might exist should the offender be released out on parole.’ [4] Aggrieved by the decision, the respondent launched application proceedings in the court a quo on 4 June 2015. He sought the review and setting aside of the decision, an order in terms of s 8(2) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) placing him on parole with immediate effect on such conditions as the court deemed appropriate under s 65 of the Correctional Services Act 8 of 1959 (the 1959 Act) and ancillary relief. The respondent raised a number of review grounds. He alleged, inter alia, that the minister’s recommendation of a further profile in 12 months’ time could not be given effect because the deceased’s family refused any contact with him and the Department of Correctional Services (the department) was unwilling or unable to facilitate a victim and offender dialogue. Moreover, it was ultra vires and showed bias and mala fides as it rendered his release dependent on the deceased’s family. [5] It was also alleged that the minister failed to consider all the relevant facts and circumstances including that the respondent was rehabilitated as he had complied with prison rules, showed remorse, completed all programs offered by the department, was apolitical and accepted the new democratic dispensation. The minister also failed to apply the 1959 Act and the policy and guidelines applicable unsuccessful. thereunder,which were in force when the murder was committed, as he ignored the recommendations of the National Council for Correctional Services and the Parole Board. And the respondent was discriminated against because his case was treated as a political matter whereas he was an ordinary offender. Thus the decision was materially influenced by errors of law and fact, irrelevant considerations were taken into account and relevant considerations were ignored and the decision was not rationally connected to the purpose for which it was taken, the purpose of the empowering law, the information before the minister and the reasons given for it. [6] Lastly, the respondent alleged that he was not furnished with the representations made by the deceased’s wife (Mrs Hani) in a victim impact statement which was attached to his application documents submitted to the minister. In his view, the representations were deliberately removed from his profile either before the record was served on his attorneys or before the record was referred to the minister for his decision. In either case the mala fide intention was to deny him due process and indicated bias, so he contended. He was accordingly deprived of an opportunity to respond to the representations, if so advised. Thus a mandatory and material procedure was not complied with. This amounted to a reviewable procedural irregularity and thus vitiated the decision, so it was argued. [7] The minister denied the allegations of bias and incompetence as well as the arguments that the result was a foregone conclusion or that there was a possibility of delay if the matter was remitted for his reconsideration. He explained that he had followed the proper procedure in making the decision. He stated that he was not furnished with the victim impact statement. In his view, the respondent was not prejudiced by the victim representations as he did not consider them in making the decision. But he stated that they would only have bolstered his refusal to place the respondent on parole had they been placed before him. [8] On 10 March 2016, the court a quo decided the matter in the respondent’s favour and granted the relief sought. Thus, the decision was set aside and orders were made placing the respondent on parole and remitting the matter to the minister to impose the necessary parole conditions within 14 days of the date thereof. The court a quo’s judgment was based on the finding that the minister’s decision was neither reasonable nor rational. In the court’s view, the decision overemphasised the nature of the crime committed by the respondent and the remarks of the sentencing court (which harshly criticised it) and failed to balance, fairly and equally, all the criteria for parole selection which it was satisfied the respondent met. [9] The court a quo found that referring the matter back to the minister for the reconsideration of the respondent’s application would cause unnecessary delay to the respondent’s prejudice whereas all the relevant facts which informed the decision and placed it in as good a position to determine the matter as the minister were before it. The court was convinced by the respondent’s contentions that the minister’s decision was, in any event, a foregone conclusion because (a) of the refusal by the deceased’s family to forgive the respondent despite his repeated attempts to apologise to them and their consistent opposition to his release and (b) he had shown bias by stating that representations made by the deceased’s family opposing the respondent’s release, which had not been placed before him when he made the decision, would have only fortified his decision not to grant parole. On the strength of these findings, the court a quo decided that a substitution order granting parole was just and equitable relief. [10] In written submissions filed by the parties on appeal before us, the essence of the dispute and the parties’ respective contentions remained unchanged. The respondent’s eligibility for placement on parole under the transitional provisions of 136(1) of the Correctional Services Act 111 of 1998 (the Act)5 was common cause between them. It was also not in dispute that that the guidelines contained in Chapter VI of the Correctional Services B-Order, commonly referred to as the Parole Board Manual, particularly the ‘Criteria for Parole Selection’ set out in Chapter VI(1A)(19) thereof, are to be applied in the consideration of the placement on parole of offenders in the respondent’s position. The essential issue was whether the minister applied these criteria properly when he made the decision. [11] According to the appellant, the court a quo misunderstood its role and failed to distinguish between the appeal and review processes. As a result, the court impermissibly concerned itself with whether the minister was right in concluding that the negative factors militating against the respondent’s placement on parole outweighed those favouring his placement on parole. Instead, the court should only have determined whether the decision was one that a reasonable decision-maker could reach by striking a reasonable balance between the competing factors in favour and against the respondent’s placement on parole. Moreover, the court a quo unlawfully replaced the exercise of the minister’s discretion concerning the respondent’s placement on parole with its own value judgment and usurped his functions as the decision-maker in violation of the doctrine of separation of powers, so it was contended. The respondent, on the other hand, persisted that the decision 5 Which apply to offenders whose death sentences were commuted to life incarceration (Van Vuren v Minister of Correctional Services & others 2012 (1) SACR 103 (CC); 2010 (12) BCLR 1233 (CC)) and read: ‘[a]ny person serving a sentence of incarceration immediately before the commencement of Chapters IV, VI and VII is subject to the provisions of the Correctional Services Act, 1959 (Act 8 of 1959), relating to his or her placement under community corrections and is to be considered for such release and placement by the Correctional Supervision and Parole Board in terms of the policy and guidelines applied by the former Parole Boards prior to the commencement of those Chapters.’ was rightly reviewed because it was not supported by the information placed before the minister, as was the minister’s refusal of the application to accomodate restorative justice which was clearly impossible in the circumstances. [12] As a result of an exchange with counsel just before the hearing of the appeal, the parties were given leave to file further written arguments. This was to enable them to address questions which they had not envisaged during the preparation for the appeal (seemingly because the relevant legal point was not pursued at the hearing a quo) namely; (a) whether the minister’s omission to consider the victim impact statement gave rise to a procedural irregularity in the decision-making process; (b) if it did, whether it constituted a reviewable procedural irregularity; and (c) if it did, what a just and equitable order would be under s 172(1) of the Constitution6 read with s 8 of PAJA.7 6 The provisions read: ‘(1) When deciding a constitutional matter within its power, a court – (a) must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency; and (b) may make any order that is just and equitable, including – (i) an order limiting the retrospective effect of the declaration of invalidity; and (ii) an order suspending the declaration of invalidity for any period and on any conditions, to allow the competent authority to correct the defect.’ 7 Which provides: ‘(1) The court or tribunal, in proceedings for judicial review in terms of section 6(1), may grant any order that is just and equitable, including orders– (a) directing the administrator– (i) to give reasons; or (ii) to act in the manner the court or tribunal requires; (b) prohibiting the administrator from acting in a particular manner; (c) setting aside the administrative action and– (i) remitting the matter for reconsideration by the administrator, with or without directions; or (ii) in exceptional cases– (aa) substituting or varying the administrative action or correcting a defect resulting from the administrative action; or (bb) directing the administrator or any other party to the proceedings to pay compensation; (d) declaring the rights of the parties in respect of any matter to which the administrative action relates; (e) granting a temporary interdict or other temporary relief; or (f) as to costs.’ [13] At the subsequent hearing it was forcefully argued for the respondent that the decision fell to be reviewed as an irregularity under s 6(2) of PAJA8 because the minister was biased and failed to comply with a mandatory and material procedure when he made it. It was conceded on the minister’s behalf that factually a procedural irregularity had occurred albeit that it did not constitute a material deviation amounting to a ground of review. The minister’s half-hearted concession was, in my view, correct. And the procedural irregularity began when the parole board submitted the respondent’s profile for the minister’s consideration on the basis of information, which included the victim impact statement submitted to it, without affording the respondent an opportunity to respond thereto. It was completed when the minister made the decision without considering those representations because they were not 8 The section reads: ‘(2) A court or tribunal has the power to judicially review an administrative action if – (a) the administrator who took it – (i) was not authorised to do so by the empowering provision; (ii) acted under a delegation of power which was not authorised by an empowering provision; or (iii) was biased or reasonably suspected of bias; (b) a mandatory and material procedure or condition prescribed by an empowering provision was not complied with; (c) the action was procedurally unfair; (d) the action was materially influenced by an error of law; (e) the action was taken – (i) for a reason not authorised by the empowering provision; (ii) for an ulterior purpose or motive; (iii) because irrelevant considerations were taken into account or relevant considerations were not considered; (iv) because of the unauthorised or unwarranted dictates of another person or body; (v) in bad faith; or (vi) arbitrarily or capriciously; (f) the action itself – (i) contravenes a law or is not authorised by the empowering provision; or (ii) is not rationally connected to – (aa) the purpose for which it was taken – (bb) the purpose of the empowering provision; (cc) the information before the administrator; or (dd) the reason given for it by the administrator; (g) the action concerned consists of a failure to take a decision; (h) the exercise of the power or the performance of the function authorised by the empowering provision, in pursuance of which the administrative action was purportedly taken, is so unreasonable that no reasonable person could have so exercised the power or performed the function; or (i) the action is otherwise unconstitutional or unlawful.’ placed before him as he alleged – a version I am bound to accept on the basis of Plascon-Evans.9 The only question is whether the omissions constituted a reviewable procedural irregularity under PAJA, having regard to the purpose of the victim representations. [14] The relevant test is trite10 and was recently reiterated in AllPay Consolidated Investment Holdings (Pty) Ltd & others v Chief Executive Officer, South African Social Security Agency & others.11 There the court, dealing with questions of procedural fairness and lawfulness in a procurement matter, said: ‘To the extent that the judgment of the Supreme Court of Appeal may be interpreted as suggesting that the public interest in procurement matters requires greater caution in finding that grounds for judicial review exist in a given matter, that misapprehension must be dispelled. So too the notion that, even if proven irregularities exist, the inevitability of a certain outcome is a factor that should be considered in determining the validity of administrative action. This approach to irregularities seems detrimental to important aspects of the procurement process. First, it undermines the role procedural requirements play in ensuring even treatment of all bidders. Second, it overlooks that the purpose of a fair process is to ensure the best outcome; the two cannot be severed. On the approach of the Supreme Court of Appeal, procedural requirements are not considered on their own merits but instead through the lens of the final outcome. This conflates the different and separate questions of unlawfulness and remedy. If the process leading to the bid’s success was compromised, it cannot be known with certainty what course the process might have taken had procedural requirements been properly observed. Once a ground of review under PAJA has been established there is no room for shying away from it. Section 172(1)(a) of the Constitution requires the decision to be declared unlawful. The consequences of the declaration of unlawfulness must then be dealt with in a just and equitable order under s 172(1)(b). Section 8 of PAJA gives detailed legislative content to the Constitution’s “just and equitable” remedy.’ 9 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634-635. 10 See, for example, Administrator, Transvaal & Others v Zenzile & others 1991 (1) SA 21 (A) at 37C-F; Logbro Properties CC v Bedderson NO & others 2003 (2) SA 460 (SCA) paras 24-25. 11 AllPay Consolidated Investment Holdings (Pty) Ltd & others v Chief Executive Officer, South African Social Security [15] Our courts have, under common law, also been under caution to guard against the possible blurring of the distinction between procedure and merit for the same reason, articulated as follows: ‘Procedural objections are often raised by unmeritorious parties. Judges may then be tempted to refuse relief on the ground that a fair hearing could have made no difference to the result. But in principle it is vital that the procedure and the merits should be kept strictly apart, since otherwise the merits may be prejudged unfairly.’12 [16] Summed up, the principles are the following. The inevitability of a certain outcome is not a factor to be considered in determining the validity of the decision. Therefore, neither party may argue that the consideration of the victim impact statement by the minister would make no difference. The proper approach is rather to establish, factually, and not through the lens of the final outcome, whether an irregularity occurred. Then the irregularity must be legally evaluated to determine whether it amounts to a ground of review under PAJA. In this exercise the materiality of any deviance from the legal requirements must be taken into account, where appropriate, by linking the question of compliance to the purpose of the provision before concluding that a review ground under PAJA has been established. So, if the process leading to the decision was compromised, it cannot be known with certainty what the administrator would have finally decided had the procedural requirements been properly observed. [17] In terms of s 299A of the Criminal Procedure Act 51 of 1977,13 when a court Agency & others 2014 (1) SA 604 (CC) paras 23-25. 12 Wade Administrative Law 6 ed (Oxford University Press, New York 1988) at 533-4. 13 Inserted by s 6 of the Judicial Matters Second Amendment Act 55 of 2003. sentences a person to imprisonment for, inter alia, murder, it shall inform any immediate relative of the deceased, if he or she is present that he or she has a right, subject to the directives issued by the Commissioner of Correctional Services, inter alia, to make representations when placement of the prisoner on parole is considered. This right is echoed in s 75(4) of the Act which provides: ‘Where a ... relative is entitled in terms of the Criminal Procedure Act, to make representations or wishes to attend a meeting of a [Parole] Board, the National Commissioner must inform the Board in question accordingly and that Board must inform the ... relative in writing when and to whom he or she may make representations.’ And where the Case Management Committee submits a report, together with the relevant documents, to the Correctional Supervision and Parole Board (the parole board) regarding the possible placement of a prisoner on parole in terms of s 42(2)(d)(vii) of the Act, that prisoner must be informed of the contents of the report and be afforded the opportunity to submit written representations to the parole board under s 42(3) of the Act. After considering the report and, in the light of any other information (which includes a relative’s victim impact statement),14 the parole board may, in the case of a prisoner serving life incarceration, make recommendations to the minister on granting of parole in terms of s 75(1)(c) of the Act.15 It is clear from these provisions that all relevant information ie the full record of the proceedings, must be considered for a proper decision on the placement of a prisoner on parole. The victim impact statement and the representations in response thereto by the prisoner seeking parole unquestionably form a substantive requirement in that process. [18] In the affidavit containing Mrs Hani’s victim representations, she alleged that the information in the respondent’s application was incomplete because various 14 Derby-Lewis v Minister of Correctional Services & others 2009 (6) SA 205 (GNP) at 218A. 15 See also s 78 (1) and (4) of the Act, incorporated on 31 July 2004, which expressly incorporate restorative justice in the consideration of parole. essential documents ie portions of his trial record, portions of his application to reopen his trial, his application for amnesty to the Truth and Reconciliation Commission (the TRC) and his application to review the TRC’s decision, had not been furnished to the parole board. The respondent never apologised or showed any genuine contrition for the murder. He continued to withhold the full truth about the murder, including the identities of the other conspirators, which he once threatened to divulge to the media, had given contradictory accounts about who exactly was involved in the crime and refused to denounce his political beliefs which he claimed motivated the murder. [19] As indicated, none of these profound allegations were considered by the minister when the decision was made. Neither were they brought to the respondent’s attention for his consideration and one simply does not know what answers, if any, he may have given had he been granted that opportunity. In that case the minister’s assertion that the victim impact statement ‘would have further militated against the [respondent’s] placement on parole’ is obviously misguided. It overlooks that he would have had to consider the respondent’s representations as well and that it is unknown what impact they would have had on the decision. And by the same token, his decision if the matter is remitted for his reconsideration cannot be a foregone conclusion. That said, the omissions constitute a fatal procedural irregularity, due regard being had to the governing statutory injunctions set out above. They constitute a breach of s 6(2(b) of PAJA as a mandatory and material procedure or condition prescribed by an empowering provision was clearly not complied with. [20] Having thus found, it is unnecessary to deal with the merits of the appeal. The only question is what would be a just and equitable remedy in the circumstances. Both parties were adamant that the matter should not be remitted; the minister’s argument being that the decision was sound whereas the respondent raised the same concerns expressed by the court a quo ie bias and incompetence on the minister’s part, that his decision is a foregone conclusion and the court’s ability to substitute the decision on the information at its disposal. I am not persuaded by any of the parties’ submissions in this regard. In my view the respondent’s fears are more perceived than real as they have no basis on the papers. I have already rejected the contention that the minister’s decision is a foregone conclusion in the absence of the respondent’s representations. And for that very reason, this Court is not in a position to substitute its own decision. In the words of Megarry J in John v Rees [1970] Ch 345; [1969] 2 All ER 274 (CH) at 402: ‘As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change.’ Regarding delay, the minister made it clear that he would be in a position to decide the matter within a short period were it remitted for his reconsideration. There is simply no evidence of bias on his part or an inability to make a reasonable decision other than a miscomprehension of the relevant law which required him to consider the respondent’s representations too. [21] In my view, the matter should be remitted to the minister for a fresh decision regarding whether the respondent should be placed on parole, taking into account Mrs Hani’s victim impact statement dated 30 October 2013 and the respondent’s response, if any, thereto. Counsel for the minister indicated that he would be in a position to finalise the matter within 90 calendar days of the date of this order in that eventuality. I consider this a reasonable period. I am however not inclined to mulct the respondent with the costs of the appeal despite the minister’s success, because the procedural irregularity was not of his doing. In any event, the minister did not insist on a costs order. I do not propose to deal with the submissions on the respondent’s so-called changed circumstances which his counsel made from the Bar as they have no foundation in the appeal record and bear no relevance for present purposes. [22] It remains to determine whether it was open to this Court, in the first place, mero motu to raise the legal point as neither party relied upon it and it was also not addressed in the court a quo’s judgment. The direction requiring further argument on the issue was based solely on this Court’s prima facie view that Mrs Hani’s victim impact statement, which was part of the appeal record, contained information that was highly relevant to the decision and should have been considered in the making thereof. [23] The duty of an appellate court is to ascertain whether the court a quo came to a correct conclusion on the case before it.16 Its role is generally limited to deciding issues that are raised in the appeal proceedings and it may not, on its own, raise issues which were not raised by the appellant. However, where a point of law is apparent on the papers (even where it has been expressly abandoned) but the common approach of the parties proceeds on a wrong perception of the law, and its consideration on appeal would involve no unfairness to the party against whom it is directed, the court is not only entitled, but is also obliged, mero motu, to raise the point of law and require the parties to deal therewith.17 Otherwise it would be bound to make a decision that is premised on an incorrect application of the law, despite the accepted facts, merely because a party failed to raise the legal point, as a result of an error of law on his 16 Cole v Government of the Union of SA 1910 AD 263 at 272. 17 CUSA v Tao Ying Metal Industries 2009 (2) SA 204 (CC); 2009 (1) BCLR 1 (CC); [2009] 1 BLLR 1 (CC) para 68. part.18 That would infringe the principle of legality.19 [24] As appears above, the existence of the victim impact statement, its relevance to the making of the decision and the legal contention that the respondent was not given an opportunity to consider its contents and respond thereto, if he was so minded, were common cause and were pertinently raised in the affidavits. The legal point ie the procedural fairness of the manner in which the decision was made, raises no new factual issues; there is, therefore, no possibility that its consideration would result in unfairness to any of the parties.20 Accordingly, this Court was entitled mero motu to raise the legal point and to require argument thereon. [25] In the result the following order is made: 1 The appeal is upheld with no order as to costs. 2 The matter is remitted to the appellant for his reconsideration and decision within 90 calendar days of the date of this order. ____________________ MML MAYA PRESIDENT 18 Van Rensburg v Van Rensburg en andere 1963 (1) SA 505 (A) at 510A; Alexkor Ltd & another v The Richtersveld Community & others 2004 (5) SA 460 (CC) paras 43-44. 19 Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (A) at 23D-H; Carmichele v Minister of Safety and Security (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) paras 33-39. 20 Paddock Motors (Pty) Ltd ibid; Alexkor Ltd & another v The Richtersveld Community & others 2004 (5) SA 460 (CC) paras 43-44. APPEARANCES For the Appellant: Mr MTK Moerane SC (with TWG Bester SC) Instructed by: The State Attorney, Bloemfontein For the Respondent: Mr R Du Plessis SC (with L Kellermann) Instructed by: Julian Knight & Associates Inc, Pretoria Rossouw Attorneys, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 18 August 2017 STATUS Immediate Minister of Justice and Correctional Services v Walus Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. The Supreme Court of Appeal (the SCA) today upheld an appeal with no order as to costs against a judgment of the Gauteng Division of the High Court, Pretoria that placed the respondent, Mr Janusz Jakub Walus, on parole. Mr Walus, who is serving a sentence of life incarceration for the murder of the late Mr Thembisile 'Chris' Hani, brought an application to be placed on parole after serving 21 years and six months of the sentence, in terms of s 136(1) of the Correctional Services Act 111 of 1998. The appellant, Minister of Justice and Correctional Services, decided not to place the respondent on parole at that stage. The victim impact statement submitted by the deceased’s widow, Mrs Limpho Hani, to the parole board was not placed before the Minister and was thus not considered. It was also not brought to Mr Walus’ attention. The issue before the SCA was whether the court a quo erred in reviewing and setting aside the decision of the Minister appellant, on the basis that the decision by the was irrational and unreasonable. The SCA held that the Minister’s omission to consider the statement and the Parole Board’s failure to furnish Mr Walus with it so that he could respond thereto, if so minded, constituted material procedural irregularities in terms of s 6(2) of the Promotion of Administrative Justice Act 3 of 2000. The SCA held that the irregularity vitiated the decision and accordingly remitted the matter to the Minister for his reconsideration regarding whether the respondent should be placed on parole, taking into account Mrs Hani’s victim impact statement and Mr Walus’ response thereto, if any. No costs order was made against Mr Walus because it was not his fault that the statement had not been disseminated in the manner envisaged by the Act. ~~ ends~~

3923

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 891/2021 In the matter between: DATACENTRIX (PTY) LTD APPELLANT and O-LINE (PTY) LTD RESPONDENT Neutral citation: Datacentrix (Pty) Ltd v O-Line (Pty) Ltd (891/2021) [2022] ZASCA 162 (25 November 2022) Coram: ZONDI, MOLEMELA, PLASKET, MABINDLA-BOQWANA JJA and MAKAULA AJA Heard: 12 September 2022 Delivered: 25 November 2022 Summary: Contract law – breach of contract – interpretation of cancellation clause in a contract – non-compliance with prescribed procedure for cancellation of contract. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Kubushi J, sitting as the court of first instance): 1. The appeal is upheld with costs. 2. The order of the high court is set aside and replaced with the following: ‘The action is dismissed with costs.’ JUDGMENT Makaula AJA (Zondi, Molemela, Plasket and Mabindla-Boqwana JJA concurring) [1] This appeal is against the judgment and order of the Gauteng Division of the High Court, Pretoria (the high court). The high court ordered Datacentrix (Pty) Ltd (the appellant) to pay an amount of R1 936 815 plus interest for breach of contract entered into between the appellant and O-line (Pty) Ltd (the respondent). The high court refused the appellant’s application for leave to appeal, but this Court on petition, granted leave. The appeal is before us with leave of this Court. Facts [2] The respondent provides various services including manufacturing, warehousing, distributing and marketing, and selling electrical and mechanical support systems. Prior to the agreement between the parties, the respondent used a software system called ACS Embrace for its financial record-keeping, accounting and reporting, recording of stock levels, inventory control, monitoring and planning of its manufacturing processes and recording of sales and receipts. The respondent desired to upgrade its software system and change to a Sage X3 system. The respondent did not have expertise in the operation of the Sage ERP X3 software and, on the recommendation of Sage, the manufacturer and seller of the software based in Germany, decided to engage the services of the respondent to implement and configure its software. [3] On 25 November 2013, the parties concluded a written Implementation and Support Services Agreement (the agreement). The terms of the agreement are not in dispute. It is further not disputed that the respondent paid the appellant the amount of R1 936 815 in terms of the agreement for implementation of the Sage software. However, after the installation, the respondent averred that the services provided by the appellant were defective in two material respects. Firstly, the respondent alleged that the appellant failed to successfully configure and implement the software, resulting in an inability on its part to use the software. Secondly, the respondent alleged that the appellant failed to provide sufficient suitably trained staff to perform the support services set out in the agreement. The respondent argued that the results of the two failures by the appellant led to it being unable to use the system for its intended purpose. [4] The high court found that the appellant had breached the agreement, and that the respondent had properly cancelled it. It held that restitution of the system by the respondent in the circumstances was impossible and ordered, in paragraph 1 of its order, that the contract price of R1 936 815 be returned to the respondent by the appellant. The high court upheld the counter-claim brought by the appellant and ordered, in paragraph 2 of its order, that the respondent pay R180 775 to the appellant. There is no cross-appeal in this regard. The issue before this Court is whether paragraph 1 of the order should have been granted. That concerns the validity of the purported cancellation of the agreement by the respondent. In what follows, I shall assume, in favour of the respondent that the appellant was in breach of the agreement and that its breaches were material. Cancellation [5] There are two significant clauses of the agreement dealing with breach and cancellation. The first is clause 17, which deals with service level failures. Service levels are defined in the agreement as the agreed performance standards and measures set out for the services, as detailed in the service level annexures. Clause 17.1 deals with Notice of Non Performance. This clause provides that if it is agreed or determined in a Dispute Resolution Procedure that the appellant has failed to ‘comply with any Service Level in any measurement period’, then the respondent may, on written notice to the appellant, ‘require it to submit a rectification plan in accordance with the provisions of clause 17.2’. Clause 17.2, in effect, deals with the rectification plan. It sets out a detailed and complex process for the rectification of the service level failure. If the service level failure cannot be rectified, clause 17.3 provides that ‘such failure shall constitute a breach by Datacentrix’ of the agreement between them. [6] While the respondent, in its particulars of claim, averred that it had cancelled the agreement in terms of clause 17, it changed its position and abandoned such reliance at the commencement of the trial and presented its case on the basis that it was entitled to cancel under clause 18. Clause 18 provides, in the relevant part, that should a party to the agreement commit a material breach of the agreement and fails to remedy such breach within 30 days of having been called upon to do so by the other party, then the innocent party may, ‘in its discretion subject to the provisions of clause 19’, terminate the agreement on written notice to the defaulting party in which event such termination shall be without prejudice to any claims the innocent party may have for damages against the defaulting party ‘occasioned by the default or termination of this Agreement in terms of this clause’. Clause 19 deals with the procedures and assistance upon termination. It provides that on termination or cancellation, the appellant will provide the respondent with ‘exit management assistance’ in accordance with schedule 2 of Exit Management Principles. [7] As aforesaid, there was some confusion on the part of the respondent as to the basis for its purported cancellation of the agreement. What is clear, however, is that it relied on two letters. The first letter it wrote to the appellants is dated 8 June 2015. In it, the respondent alerted the appellant to a range of breaches of the agreement. They related to the lack of performance of the software and what it termed its ‘failed project management’. The letter further concludes by stating: ‘In conclusion Datacentrix needs to submit a comprehensive proposal stating how this will be urgently remedied no later than Friday 12th of June for perusal by the board . . . O–line also reserves the right to withhold all outstanding payment . . . In the event O–line is not satisfied with either the proposal or success of the implementation the company will instruct lawyers to proceed with Litigations.’ [8] The parties exchanged correspondence and held various meetings in an attempt to resolve the issue. The respondent did not accept the two attempts by the appellant to bring about a rectification plan. [9] On 22 October 2015, the respondent’s attorneys sent an email to the appellant communicating the cancellation of the agreement. Amongst the breaches, the respondent alleged that it was unable to produce accounts, trial balances, management accounts and that the fundamental set–up and implementation of the Sage programme was flawed. The letter referred to the contents of the letter dated 8 June 2015 that the appellant had been put to terms to develop a rectification plan. The letter concluded by stating that: ‘Accordingly, Datacentrix is in breach of the Agreement [in so far] as it has failed to provide the Services and/or Additional Services in terms of the Agreement which has not remedied within a 30 day period despite being called upon to do so, and/or is in breach of the warranties set out in clauses 15.1.1 and 15.3.1 thereof (“the warranties”) which breaches are fundamental, and which have not be remedied since 12 March 2015.’ On the strength of the above, the respondent then cancelled the agreement. Analysis [10] In Wille’s Principles of South African Law the following is said regarding breach notices: ‘Contracts frequently provide that in the event of breach the aggrieved party should give the party in breach notice of the breach and a stipulated period within which the latter has an opportunity to remedy or purge the breach. In such a case the procedure laid down in the contract must be followed as a necessary prelude to cancellation, except, so it has been held, where the breach takes the form of a repudiation of the contract. In that case the aggrieved party may cancel forthwith since the repudiating party cannot have it both ways by repudiating the contract and at the same time hold the other party to the rules prescribed by the repudiated contract.’1 1 Du Bois (ed) Wille’s Principles of South African Law 9 ed at 877. See also South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) para 37; Hano Trading CC v JR 209 Investments (Pty) Ltd and Another 2013 (1) SA 161 (SCA) para 31; G B Bradfield Christie’s Law of Contract in South Africa 7 ed at 637. [11] The purpose of requiring strict compliance with the prescribed procedure for cancelling was explained as follows by Yekiso J in Bekker v Schmidt Bou Ontwikkelings CC:2 ‘The purpose of a notice requiring a purchaser to remedy a default is to inform the recipient of that notice of what is required of him or her in order to avoid the consequences of default. It should be couched in such terms as to leave him or her in no doubt as to what is required, or otherwise the notice will not be such as is contemplated in the contract.’ [12] A reading of the letters of 8 June and 22 October indicates that the respondent correctly conceded that it was unable to cancel in terms of clause 17. The concession is correct because the letters did not comply with the procedure laid down in clause 17. Clause 18, as stated above, especially clause 18.1, states that if a defaulting party ‘commits a material breach of this Agreement, and fails to remedy such breach within 30 (thirty) days of having been called upon in writing to do so . . . then the Innocent Party may, in its discretion and subject to the provisions of clause 19, terminate this Agreement on written notice to the Defaulting Party’. [13] The letter of 8 June 2015 did not pertinently give the appellant 30 days within which to remedy the breaches. Instead, it appears in part to having followed clause 17 by requiring the appellant to produce a rectification plan. The respondent was required to comply with the requirements of clause 18 strictly. It was required to couch the notice in such a manner that the appellant would have been in no doubt as to what was required of it to avoid the consequence of cancellation for such non–compliance. The letter never warned the appellant that a failure to comply within 30 days would result in cancellation. Instead, it alluded vaguely to instructing its lawyers to ‘proceed to Litigations’. Whatever this may have been intended to mean, it was not an unequivocal statement that the agreement would be cancelled if the appellant failed to remedy its breaches. [14] I find therefore that the respondent failed to prove that it had cancelled the agreement in accordance with the procedure as set out in clause 17 or 18 of the 2 Bekker v Schmidt Bou Ontwikkelings CC [2007] 4 All SA 1231 (C) para 17; 2007 (1) SA 600 (C) para 17. agreement. In the light of this finding, there is no need for me to deal with the question whether the agreement was breached and, if so, whether the breach was material. [15] There is no reason why the respondent, as a losing party, should not pay the costs. The employment of two counsel was, however, not necessary, as the matter was not complex. [16] In the result, I make the following order: 1. The appeal is upheld with costs. 2. The order of the high court is set aside and replaced with the following: ‘The action is dismissed with costs.’ __________________ M MAKAULA ACTING JUDGE of APPEAL Appearances For appellant: W N Shapiro SC and I Veerasamy Instructed by: Macgregor Erasmus Attorneys Inc, Durban Lovius Block Inc, Bloemfontein For respondent: K D Iles and X Khoza Instructed by: Bowman Gilfillan Incorporated, Pretoria Symington de Kok Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 25 November 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Datacentrix (Pty) Ltd v O-Line (Pty) Ltd (891/2021) [2022] ZASCA 162 (25 November 2022) ___________________________________________________________________ Today the Supreme Court of Appeal (SCA) handed down judgment upholding with costs an appeal against the decision of the Gauteng Division of the High Court, Pretoria (the high court). The respondent provides various services including manufacturing, warehousing, distributing and marketing, and selling electrical and mechanical support systems. The respondent desired to upgrade its software system and change to a Sage X3 system and, on the recommendation of Sage, the manufacturer and seller of the software based in Germany decided to engage the services of the appellant to implement and configure its software. On 25 November 2013, the parties concluded a written Implementation and Support Services Agreement (the agreement). The terms of the agreement are not in dispute. The respondent paid the appellant the amount of R1 936 815 in terms of the agreement for implementation of the Sage software. However, after the installation, the respondent averred that the services provided by the appellant were defective in two material respects. Firstly, the respondent alleged that the appellant failed to successfully configure and implement the software, resulting in an inability on its part to use the software. Secondly, the respondent alleged that the appellant failed to provide sufficient suitably trained staff to perform the support services set out in the agreement. The high court found that the appellant had breached the agreement, and that the respondent had properly cancelled it. It held that restitution of the system by the respondent in the circumstances was impossible and ordered that the contract price of R1 936 815 be returned to the respondent by the appellant. The issue before this Court was whether the order should have been granted and that concerns the validity of the purported cancellation of the agreement by the respondent. The SCA dealt with two significant clauses of the agreement dealing with breach and cancellation. The first is clause 17, which deals with service level failures. Service levels are defined in the agreement as the agreed performance standards and measures set out for the services, as detailed in the service level annexures. Clause 17.1 deals with Notice of Non Performance. This clause provides that if it is agreed or determined in a Dispute Resolution Procedure that the appellant has failed to ‘comply with any Service Level in any measurement period’, then the respondent may, on written notice to the appellant, ‘require it to submit a rectification plan in accordance with the provisions of clause 17.2’. Clause 17.2, in effect, deals with the rectification plan. It sets out a detailed and complex process for the rectification of the service level failure. If the service level failure cannot be rectified, clause 17.3 provides that ‘such failure shall constitute a breach by Datacentrix’ of the agreement between them. Clause 18 provides, in the relevant part, that should a party to the agreement commit a material breach of the agreement and fails to remedy such breach within 30 days of having been called upon to do so by the other party, then the innocent party may terminate the agreement on written notice to the defaulting party in which event such termination shall be without prejudice to any claims the innocent party may have for damages against the defaulting party ‘occasioned by the default or termination of this Agreement in terms of this clause’. The SCA found that there was some confusion on the part of the respondent as to the basis for its purported cancellation of the agreement. The respondent relied on two letters. In the letter dated 8 June 2015, the respondent alerted the appellant to a range of breaches of the agreement. They related to the lack of performance of the software and what it termed its ‘failed project management’ – the breach of the warranty. On 22 October 2015, the respondent communicated the cancellation of the agreement based on various breaches. The SCA held that both letters did not comply with the cancellation procedure set out in either clause 17 or 18 of the agreement and that being the case, the respondent had failed to prove that it had validly cancelled the agreement. ~~~~end~~~~

3582

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case no: 356/2020 In the matter between: VAN HEERDEN & BRUMMER INC APPELLANT and HARRY MARK DEON BATH RESPONDENT Neutral citation: Van Heerden & Brummer Inc v Bath (356/2020) [2021] ZASCA 80 (11 June 2021) Coram: PETSE DP and MBHA and ZONDI JJA and KGOELE and PHATSHOANE AJJA Heard: 3 May 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 09h30 on 11 June 2021. Corrected: 17 June 2021 Summary: Prescription Act 68 of 1969 – firm of attorneys sued for damages arising out of drafting of an ante-nuptial contract subsequently found to be invalid – date of commencement of the running of prescription – meaning of the expression ‘debt is due’ – s 12(3) requires knowledge of the identity of the debtor and facts necessary to institute action – knowledge of legal conclusion not required by s 12(3). ORDER On appeal from: In the Gauteng Division of the High Court, Pretoria (Van der Schyff J sitting as court of first instance): The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘2.1 The first defendant’s special plea is upheld with costs. 2.2 The plaintiff’s claim against the defendant is dismissed with costs.’ JUDGMENT Kgoele AJA (Petse DP and Mbha and Zondi JJA and Phatshoane AJA concurring): [1] This appeal originates from an action instituted by the respondent, Mr Harry Bath, against the appellant, Van Heerden and Brummer Incorporated, a firm of attorneys, in the Gauteng Division of the High Court: Pretoria (the high court), for damages in respect of a breach of mandate and professional negligence arising out of drafting an antenuptial contract subsequently found to be invalid by the court. In the proceeding before the high court, the appellant, who was the first defendant, raised a special plea of prescription. The high court (Van der Schyff J) made an order in terms of rule 33(4) of the Uniform Rules of Court, in terms of which the special plea of prescription was decided separately from the other issues raised by the parties. After hearing evidence, the high court dismissed the special plea. This appeal is against that order, with leave having been granted by the high court. [2] The appeal turns primarily on the interpretation of s 12(1) of the Prescription Act 68 of 1969 (the Act) and in particular, the phrase ‘debt is due’. The question to be determined is therefore, whether the high court correctly found that the respondent’s claim had not become prescribed at the time the summons was served on 2 February 2017. [3] What follows are the material facts which are necessary for the determination of the sole issue before us which are largely common cause, or not seriously disputed. On 21 October 2005, the respondent gave the appellant a mandate to draft an antenuptial contract in contemplation of his marriage to his now ex-wife, Mrs Juanita Bath. Ms Nunes, the Notary Public employed by the appellant at that time, and who does not feature in this appeal, drafted the antenuptial contract which was subsequently registered in the Deeds Office on 9 November 2005. [4] During February 2010, the respondent instituted divorce proceedings against his ex-wife. Mr Brummer, an attorney and a director of the appellant and Ms Hartman, who served as counsel, represented the respondent in the divorce action. Mrs Bath defended the divorce action. In her amended plea and counterclaim, she alleged that the antenuptial contract was void for vagueness. The divorce action came before Louw J in the Gauteng Division of the High Court, Pretoria. Pursuant to the agreement between the parties, the validity of the antenuptial contract was determined first as a separate issue. In a judgment delivered on 3 September 2012, Louw J held that the antenuptial contract was void ab initio due to vagueness, and that the marriage between the parties was in community of property. [5] Dissatisfied with the outcome, the respondent was, on 22 November 2012, granted leave to appeal to this Court. The appeal was heard on 24 February 2014, and subsequently dismissed on 24 March 2014.1 Thereafter, a decree of divorce was granted on 13 October 2015 incorporating a deed of settlement in terms of which, the respondent and his ex-wife agreed, inter alia, to appoint a liquidator to distribute their joint estate, arising from the erstwhile marriage in community. [6] On 24 January 2017 the respondent instituted the current action for damages against the appellant and Ms Nunes and, on 2 February 2017, the summons was served on them. No relief was sought against Ms Nunes who was cited purely out of caution as the second defendant. Thus, the second defendant took no part in this litigation both in the high court and this Court. In this action, the respondent asserted that the appellant had negligently breached its mandate because the Notary Public employed by it failed to draft a valid antenuptial contract. According to the respondent, the net result of this was that he became liable to pay his ex-wife substantially more money than would have been payable had the antenuptial contract been valid. [7] The appellant defended the action essentially on the basis that the claim had become prescribed on 25 September 2015. As already indicated, this special plea was heard separately from the merits of the action. In support of this defence, the appellant led the evidence of Mr Brummer and Ms Hartman. Their evidence mainly comprised an exposition of an uncontested factual account of their interaction with the respondent with specific reference to a series of dates in order to demonstrate that the respondent had knowledge of all the facts necessary to institute his claim, at the latest, on 26 September 2012. 1 Bath v Bath [2014] ZASCA 14. [8] The summary of their evidence which forms the factual matrix for this appeal is that subsequent to the filing of the amended plea and before the commencement of the divorce trial, they held a consultation with the respondent on 6 August 2012 where the implications of the amended plea and the counterclaim were extensively discussed and explained. Provisional financial values were drawn up to illustrate the likely consequences of a marriage in community of property. This discussion continued during the period 13 to 17 August 2012, when the evidence regarding the validity of the antenuptial contract was heard in court. After the judgment was delivered on 3 September 2012, Mr Brummer informed the respondent telephonically that the trial court had declared the antenuptial contract void. He further explained to him that as a result, the parties’ marriage was regarded as one in community of property and arranged a consultation with the respondent. [9] The consultation took place on 21 September 2012 during which the judgment, its consequences, who was liable to be sued, the conflict likely to arise if the appellant were sued, including prescription of the respondent’s claim, were thoroughly discussed with the respondent. The respondent, despite being disappointed and upset by the result, persisted with his desire to appeal against the judgment which declared the antenuptial contract void, whilst retaining the same legal team. This prompted a further consultation on 25 September 2012, to which Mr Brummer invited Ms Hartman. At this consultation, the respondent’s intention to sue crystallised and the possible withdrawal of Mr Brummer was further discussed with the respondent. The time lapse pending the appeal which might affect prescription of his claim was reiterated, including the advice to the respondent to seek an independent legal practitioner to represent him for this claim. It was ultimately agreed that the appellant’s firm would remain the attorneys of record for the purposes of appealing the decision of Louw J. On 26 September 2012 an email confirming the discussion of 25 September 2012 was sent to the respondent. [10] The respondent elected not to testify at the trial. Thus, there was no countervailing evidence to controvert the version of the appellant. The upshot of the appellant’s evidence was succinctly set out in the judgment of the high court. For present purposes a chronological exposition of the crucial dates and facts will suffice. More pertinently, the respondent, in his heads of argument, acknowledged that it cannot be disputed that he was advised by both Mr Brummer and Ms Hartman about the consequences of the finding made by Louw J that the antenuptial contract was void. The respondent also did not dispute, as rightly noted in paragraph 9 of the judgment of the high court, that Ms Hartman explained to him that he had a claim against the appellant and the impact that the running of prescription might have on the claim. [11] The submission of the appellant before the high court, which was persisted with before us, is that on one of these dates, prescription began to run. They are: (a) 6 August 2012 – a consultation where the consequences of the amended plea raised in the divorce action was explained to the respondent in detail using provisional financial values; (b) 13 to 17 August 2012 – the period during which the validity of the antenuptial contract was heard and evidence thereof continuously raised with respondent; (c) 3 September 2012 – when Mr Brummer informed the respondent telephonically that the high court declared the antenuptial contract void and that their marriage was regarded as one in community of property including the fact that the Notary Public was to be blamed for the finding; (d) 21 September 2012 – a consultation with Mr Brummer wherein the judgment, its consequences, who to sue, the apparent conflict, including prescription of his claim, were thoroughly discussed with the respondent; (e) 25 September 2012 – a consultation with Mr Brummer and Ms Hartman wherein the intention to sue, the onset of prescription and possible withdrawal of Mr Brummer were explained to the respondent; or (f) 26 September 2012 – when an email confirming the discussion of 25 September was sent to the respondent. [12] As already indicated, before the high court the appellant, relying on these dates, argued that the respondent’s claim arose and became due on any one of the dates mentioned in the preceding paragraph but not later than 26 September 2012, when the appellant addressed an email to the respondent in which it recorded the issues dealt with during the consultation on the previous day, 25 September 2012. The respondent, in his defence, contended that the prescription commenced to run from the date on which judgment in his appeal was handed down by this Court on 24 March 2014. In elaboration, the respondent’s counsel placed much emphasis on what he perceived as the need to distinguish between the ‘coming into existence’ of a debt and ‘the recoverability’ thereof, to bolster the argument that the judgment of the SCA constituted an essential fact in support of the respondent’s cause of action (ie the so-called last fact) as opposed to ‘obtaining legal certainty’ as argued by the appellant. According to him, the respondent’s damages manifested or materialised on 24 March 2014, because his patrimonial loss would not have eventuated had his appeal been upheld. Thus, so the argument continued, instituting his damages claim against the appellant before the final determination of his appeal to this Court would have been premature. [13] The high court was somewhat persuaded by these contentions and, as a result, it found in favour of the respondent and concluded that the respondent’s claim had not prescribed. This, despite the fact that it made the following remarks in its judgment: ‘The plaintiff’s damages consist of the diminution of his estate caused by the breach and this constituted a debt that was immediately payable when the antenuptial contract was declared void, irrespective of whether the damages were already quantified.’ (My emphasis.) In coming to this conclusion, it reasoned that the respondent’s damages manifested or materialised only on 24 March 2014, when the appeal was dismissed by this Court, although the full extent thereof was not determinable at that stage. Furthermore, the high court held that ‘[b]efore 24 March 2014 there was no basis for any claim based on the invalidity of the antenuptial contract that was either claimable by the [respondent] or payable by the [appellant]’. [14] Accordingly, the issue in this appeal is crisp and in essence, relates to a question of law. It pertinently concerns the determination of the date on which the three-year period of prescription commenced to run in respect of the respondent’s claim, which is the fundamental point of difference between the parties. [15] Directly relevant to this enquiry is s 12 of the Act which provides that: ‘(1) Subject to the provisions of subsections (2) and (3), prescription shall commence to run as soon as the debt is due. (2) If the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt. (3) A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.’ [16] The words ‘debt’ including ‘debt is due’ are not defined in the Act. There are numerous judgments which have dealt with the meaning of these words and the law is settled in this regard. One such seminal judgment which is relevant on the facts of this matter is Mtokonya v Minister of Police.2 [17] To my mind, the following remarks by Moseneke J in Eskom, 3 which were quoted with approval in Mtokonya bear emphasis as they neatly set out a sound foundation for several decisions that followed thereafter. There, the court said the following: “In my view, there is no merit in the contention advanced on behalf of the plaintiff that prescription began to run only on the date the judgment of the SCA was delivered. The essence of this submission is that a claim or debt does not become due when the facts from which it arose are known to the claimant, but only when such claimant has acquired certainty in regard to the law and attendant rights and obligations that might be applicable to such a debt. If such a construction were to be placed on the provisions of section 12(3) grave absurdity would arise. These provisions regulating prescription of claims would be rendered nugatory and ineffectual. Prescription periods would be rendered elastic, open ended and contingent upon the claimant’s subjective sense of legal certainty. On this contention, every claimant would be entitled to have legal certainty before the debt it seeks to enforce becomes or is deemed to be due. In my view, legal certainty does not constitute a fact from which a debt arises under s 12(3). A claimant cannot blissfully await authoritative, final and binding judicial pronouncements before its debt becomes due, or before it is deemed to have knowledge of the facts from which the debt arises.”’ [18] Consistent with the principles propounded in the various judgments, most recently this Court rejected similar arguments as raised by the respondent in this matter in McMillan v Bate Chubb4 and held: 2 Mtokonya v Minister of Police 2018 (5) SA 22 (CC); [2017] ZACC 33; 2017 (11) BCLR 1443 (CC); 2018 (5) SA 22 (CC) (Mtokonya). See also: Truter and Another v Deysel 2006 (4) SA 168 (SCA); Minister of Finance and Others v Gore N O 2007 (1) SA 111 (SCA) para 17; Yellow Star Properties 1020 (Pty) Ltd v MEC, Department of Development Planning and Local Government, Gauteng 2009 (3) SA 577 (SCA); Claasen v Bester 2012 (2) SA 404 (SCA); Fluxmans Incorporated v Levenson 2017 (2) SA 520 (SCA). 3 Eskom v Bojanala Platinum District Municipality and Another 2003 JDR 0498 para 16. 4 McMillan v Bate Chubb and Dickson Incorporated [2021] ZASCA 45 para 38. ‘The period of prescription begins to run against a creditor when the creditor has the minimum facts which are necessary to institute action. As this Court recently held in Fluxmans Incorporated v Levenson: “Knowledge that the relevant agreement did not comply with the provisions of the Act is not a fact which the respondent needed to acquire to complete a cause of action and was therefore not relevant to the running of prescription. This Court stated in Gore NO para 17 that the period of prescription begins to run against the creditor when it has minimum facts that are necessary to institute action. The running of prescription is not postponed until it becomes aware of the full extent of its rights nor until it has evidence that would prove a case “comfortably”. The “fact” on which the respondent relies for the contention that the period of prescription began to run in February 2014, is knowledge about the legal status of the agreement, which is irrelevant to the commencement of prescription. It may be that before February 2014 the respondent did not appreciate the legal consequences which flowed from the facts, but his failure to do so did not delay the date on which the prescription began to run. Knowledge of invalidity of the contingency fee agreement or knowledge of its non-compliance with the provision of the Act is one and the same thing otherwise stated or expressed differently. That the contingency fees agreements such as the present one, which do not comply with the Act, are invalid is a legal position that obtained since the decision of this court in Price Waterhouse Coopers Inc and is therefore not a fact which the respondent had to establish in order to complete his cause of action. Section 12(3) of the Prescription Act requires knowledge only of the material facts from which the prescriptive period begins to run – it does not require knowledge of the legal conclusion (that the known facts constitute invalidity). (Claasen v Bester [2011] ZASCA 197; 2012 (2) SA 404 (SCA).” Section 12 requires knowledge only of the material facts from which the prescriptive period begins to run – it does not require knowledge of the legal consequences. Accordingly, the appellant’s cause of action was complete as soon as he was informed on 9 May 2014 of the potential conflict of interest arising from the fact the respondent’s directors may have drafted the antenuptial contract incorrectly. There is no reason in logic or in law, why he could not successfully have joined the respondent as a third party in the divorce proceedings at that stage, claiming payment from it of any sum which he may be ordered to pay to his former wife as a result of the respondent’s negligence.’ (Emphasis added.) [19] It is important to highlight at the onset that McMillan5 is on all fours with the present appeal as it dealt with almost similar facts and exactly the same legal point raised in this matter. Despite the fact that both counsel were aware of this decision, the submissions of the parties remained diametrically opposed. Counsel representing the appellant, relying on McMillan, argued that the respondent’s claim became prescribed, at the very latest on 26 September 2012. The respondent’s counsel on the other hand, relying on Trinity v Grindstone,6 submitted that the McMillan decision did not affect the soundness of his contention because McMillan is clearly wrong. [20] In elaboration, counsel argued that in McMillan this Court failed to appreciate that although the date on which a debt arises usually coincides with the date on which it becomes due, this is not always the case. The difference, argued counsel, relates to the coming into existence of the debt on the one hand and its recoverability on the other.7 Therefore, whilst the legal principles dealt with by the court in McMillan are correct, it erred in its application of these legal principles to the facts, as the dates on which the debt arose and when it became due did not coincide both in McMillan and in this matter. [21] Furthermore, respondent’s counsel relied on Umgeni Water v Mshengu8 wherein it was said: ‘[5] . . . Stated another way, the debt must be one in respect of which the debtor is under an obligation to pay immediately. [6] . . . In order to be able to institute an action for the recovery of a debt a creditor must have a complete cause of action in respect of it. The expression “cause of action” has been held to mean: 5 Ibid. 6 Trinity Asset Management (Pty) Ltd v Grindstone Inv 132 (Pty) Ltd [2017] ZACC 32; 2018 (1) SA 94 (CC); 2017 (12) BCLR 1562 (CC) para 38. 7 List v Jurgens 1979 (3) SA 106 (A) at 121C-D. 8 Umgeni Water v Mshengu [2009] ZASCA 148; [2010] 2 All SA 505 (SCA) para 5-6. “[E]very fact which it would be necessary for the plaintiff to prove . . . in order to support his right to judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.” Or slightly differently stated: “. . . [T]he entire set of facts which give rise to an enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a cause of action. Such cause of action does not ‘arise’ or ‘accrue’ until the occurrence of the last of such facts and consequently the last of such facts is sometimes loosely spoken of as the cause of action.”’ [22] Counsel for the respondent also submitted that the ‘last set of facts’ necessary to complete the respondent’s cause of action was the appeal judgment of this Court delivered on 24 March 2014. Therefore, if the judgment of Louw J was overturned on appeal, any action instituted before the appeal judgment, would have been premature. In relation to the second leg of his argument, counsel relied on African Products v Venter,9 in which it was held that not only must there be an obligation to pay immediately, but there must also be no valid or bona fide defence open to the debtor. [23] Counsel’s contentions are without merit for at least two reasons. First, it is not correct that in McMillan this Court was not alive to the distinction as espoused by the respondent’s counsel. The fact that the distinction was not mentioned does not necessarily mean that the Court was oblivious to it. It is trite that no judgment can ever be perfect and all-embracing, and it does not necessarily follow that, because something has not been mentioned, therefore it has not been considered.10 But to lay this matter to rest, I can do no better than quote the following paragraph in McMillan, which in my view is more telling: 9 African Products (Pty) Ltd v Venter NO and Others [2007] 3 All SA 605 (C); [2006] ZAWCHC 32 para 24. 10 R v Dhlumayo and Another 1948 (2) SA 677 (A). ‘[34] The appellant challenged the findings of the court a quo on two main grounds. It was submitted by the appellant firstly, that the court a quo erred in holding that the appellant had a complete cause of action for professional negligence against the respondent on 12 May 2014 in circumstances where the antenuptial contract was only declared invalid by Plasket J in the divorce proceedings in October 2016. Before then, so ran the argument, nobody could have anticipated a problem. Both the appellant and his former wife had considered the antenuptial contract to be valid. It was accordingly submitted by the appellant that prescription could not have commenced running before the judgment of Plasket J in October 2016. The appellant, it was argued, could not have sued the respondent. Secondly, it was submitted by the appellant that, as the respondent’s directors disputed that there was a claim against the respondent for professional negligence, he could not have known that the antenuptial contract was invalid. Thus, prescription only began to run once Plasket J delivered his judgment on 18 October 2016 regarding the validity of the antenuptial contract. Before then, he did not have the necessary facts upon which to formulate a claim against the respondent. [35] I reject the appellant’s contention that, prior to the declaration of invalidity of the antenuptial contract by Plasket J in October 2016, he could not have had knowledge of all the material facts he needed before he could institute legal proceedings against the respondent. In order to succeed in an action for damages against an attorney for professional negligence, a plaintiff is required to allege and prove: (a) a mandate given to and accepted by the attorney; (b) a breach of the mandate; (c) negligence in the sense that the attorney did not exercise the degree of skill, knowledge and diligence expected of an average practising attorney; (d) that he had suffered damages; and (e) that damages were within the contemplation of the parties when the mandate was extended. In this case there can be little dispute about (a), (b), (c) and (e). As to (d), the appellant had been sued by his wife for half of his estate. He had approached the respondent to defend the claim when they advised him that there was a problem with the drafting of the antenuptial contract. It was manifest at that stage that he had suffered damages as a result of the error. [36] . . . [37] As I have said, the appellant had acquired knowledge of all necessary facts on which to sue the respondent on 9 May 2014, when he attended a consultation at the respondent’s offices.’ (Emphasis added.) [24] Second, the facts of this case go far beyond what happened in McMillan. The appellant was and is, in my view, too generous in its contention that 26 September 2012 is the date, at the very latest, when the claim prescribed. In my view, each one of the respective dates relied upon by the appellant which predates 26 September 2012, enumerated in paragraphs 8, 9 and 11 of this judgment, is in fact dispositive of this appeal. The undisputed facts reveal that by 6 August 2012 (when a discussion about the amended plea took place), the respondent fully understood from tentative calculations provided that he would be worse off financially if the antenuptial contract turned out to be invalid. It is therefore clear that the appellant had knowledge of the fact that there was a problem with the validity of the antenuptial contract (and at all material times thereafter), and that patrimonial loss would result from a finding that the antenuptial contract is void. The effect of this is that the date on which the debt arose, namely 3 September 2012 when Louw J declared the antenuptial contract void, coincided with the date when it became due. [25] It is manifest from the uncontested evidence before the high that the respondent already had knowledge of all the facts from which the debt arose on 6 August 2012 and at all relevant times thereafter but, in adopting a conservative approach, at the latest, on 26 September 2012. Accordingly, it goes without saying that on 26 September 2012, the respondent already possessed adequate facts as required by the Act. This conclusion therefore means that when summons was served on the appellant on 2 February 2017 a period of over three years had elapsed since the debt became due. [26] In the result, the following order is made: The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘2.1 The first defendant’s special plea is upheld with costs. 2.2 The plaintiff’s claim against the defendant is dismissed with costs.’ _____________________ A M KGOELE ACTING JUDGE OF APPEAL APPEARANCES: For the appellant: G F Heyns SC Instructed by: Ditsela Incorporated, Pretoria Honey Attorneys, Bloemfontein For the respondent: A M Heystek SC Instructed by: Kraljevich & Janse van Vuuren Inc, Centurion Phatshoane Henney Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 11 JUNE 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Van Heerden & Brummer Inc v Bath (356/2020) [2021] ZASCA 80 (11 June 2021) Today the Supreme Court of Appeal (SCA) handed down judgment upholding an appeal with costs against a Gauteng Division of the High Court, Pretoria (the high court). The issue before the SCA was whether the high court correctly found that the respondent’s claim against the appellant had not become prescribed when the summons was served on 2 February 2017. On 3 September 2012 and during the hearing of the divorce proceedings between the respondent and his ex-wife, Louw J found the antenuptial contract entered into between the parties to be void due to vagueness. The respondent’s ex-wife had impugned the validity of the antenuptial contract on the grounds that it was void due to vagueness. Consequently, the parties' marriage was declared to be in community of property. The respondent appealed against this finding to the SCA but the SCA dismissed the appeal on 24 February 2014. Thereafter respondent instituted an action in the high court against the appellant for damages based on breach of mandate and professional negligence arising out of drafting an invalid antenuptial contract. In defending the claim, the appellant raised a special plea of prescription contending that the respondent had been advised as long ago as August 2012 that if his ex-wife was successful in impugning the validity of the antenuptial contract, he would have a claim for damages against the appellant. This advice to the respondent was thereafter repeated on no less than three subsequent occasions. All of this was not in dispute. The special plea served before Van der Schyff J. The appellant argued that the respondent had acquired the necessary facts from which the debt arose as required by s 12(3) of the Prescription Act 68 of 1969 (the Act) at the earliest, on 6 August 2012, when the respondent’s ex-wife impugned the validity of the antenuptial contract during the divorce proceedings. Furthermore, the appellant relied on several other dates subsequent to 6 August 2012 on which consultations were held with the respondent. During these consultations, the appellant contended, the judgment of Louw J, who to sue and the running of prescription of the respondent’s claim, were discussed with the respondent. The last date relied upon by the appellant was 26 September 2012, when an email confirming the various discussions was sent to the respondent. Thus, the crux of the appellant’s case is that, on each of the respective dates relied upon and in particular 26 September 2012 at the latest, prescription began to run against the respondent’s claim. The respondent on the other hand argued that the last set of facts necessary to institute his claim was the confirmation of the judgment of Louw J by the SCA, therefore, prescription began to run from 24 February 2014 (i.e. the date of the SCA judgment) and thus his claim had not become prescribed. The respondent’s contention was upheld by Van der Schyff, who dismissed the special plea with costs. In upholding the appeal, the SCA re-affirmed the principles restated in McMillan v Bate Chubb and found that each of the respective dates relied upon by the appellant were dispositive of the appeal. Further, that, at the latest, the respondent was on 26 September 2012, already in possession of the facts necessary to institute a claim against the appellant as provided for in s 12(3) of the Act. Therefore, the respondent's claim had already prescribed when summons was served on the appellant on 2 February 2017. ~~~~ends~~~~

1871

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 644/09 In the matter between: LEVIN, LARRY IVAN First Appellant LEVENBERG, STEPHANIE Second Appellant and LEVIN, FREIDA First Respondent MILLER, NORMAN Second Respondent ZIEGLER, RAYMOND Third Respondent ZIEGLER, LYNNE Fourth Respondent STEINGO, LEONARD Fifth Respondent BRESS, ERNEST Sixth Respondent WOOD, WENDY Seventh Respondent BERSANO, ANNA Eighth Respondent RIASUN, PHILIP Ninth Respondent WORTELBOER, MONIQUE Tenth Respondent WORTELBOER, MADELEINE Eleventh Respondent MASTER OF THE HIGH COURT Twelfth Respondent ZIEGLER, LEWIS Thirteenth Respondent Neutral citation: Levin v Levin (644/09) [2011] ZASCA 114 (03 June 2011) Coram: HARMS DP, NUGENT, MAYA, MALAN JJA AND PLASKET AJA Heard: 09 May 2011 Delivered: 03 June 2011 Summary: Will – validity thereof – whether provisions of s 2(1)(a) of the Wills Act 7 of 1953 complied with. ___________________________________________________________________ ORDER On appeal from: South Gauteng High Court (Johannesburg) (Pienaar AJ sitting as court of first instance): The appeal is dismissed with costs including the costs of two counsel. ____________________________________________________________________ _ JUDGMENT __________________________________________________________________ MAYA JA (HARMS DP, NUGENT, MALAN JJA AND PLASKET AJA concurring): [1] This appeal concerns the validity of a will (the disputed will) allegedly executed on 4 August 2002 by the late Mrs Minnie ‘Minna’ Breslawsky (born Lom) (the deceased), who died a widow on 19 October 2002 at age 107. The disputed will, in which the second, third and fourth respondents were nominated as the co-executors of the deceased’s estate, was lodged with and accepted by the Master of the High Court. [2] The appellants and the first, third, fourth, sixth to the eleventh and the thirteenth respondents are all members of the deceased’s family. The deceased bore five children, the late Nathan, Vera, and Molly and the first and the eight respondents. The appellants are the children of the first respondent who, together with her husband Gerald Levin, worked for the deceased until her death. The third, fourth and thirteenth respondents are Vera’s children. The sixth and seventh respondents are Nathan’s surviving children. The ninth, tenth and eleventh respondents are Molly’s children. The second respondent, Mr Miller, is the attorney who prepared the disputed will and the fifth respondent was the deceased’s cardiologist and one of the beneficiaries under that will. [3] On 3 March 1999 and 8 August 2001 respectively, the deceased executed two wills which were the last in a series of at least nineteen such documents said to have been made by her during her lifetime. The one dated 3 March 1999 dealt with the deceased’s assets within the State of Israel which the deceased bequeathed to the first respondent and the appellants. The one of 8 August 2001 (the 2001 will), related to her assets situate in South Africa and the deceased nominated the first respondent as executor (together with her accountant Ryan Feinberg and the Standard Bank of South Africa Ltd) of her estate and granted the first respondent and the appellants further, substantial bequests. Under the disputed will, on the other hand, in addition to appointing Mr Miller and the third and fourth respondents as executors, the deceased bequeathed her estate as follows – (a) 25 per cent to the first respondent, (b) 25 per cent to the eight respondent, (c) 25 per cent to Vera’s three children to be shared equally among them, (d) 25% to Molly’s children to be shared equally among them, (e) R500 000 to each of Nathan’s two children and (f) R50 000 to Dr Steingo. [4] The appellants brought an action in the high court challenging the disputed will on a number of grounds. By the time of the trial those grounds had dwindled to the following: (a) that the signature on the will was not that of the deceased, and in the alternative (b) that the signature on the will was not affixed in the presence of two witnesses who were both required to be present at the signing and placed their signatures on the document in the presence of each other and the deceased. [5] Only the second, third and fourth respondents defended the action. It was common cause between the parties that if the disputed will was declared invalid, the 2001 and 1999 wills would be accepted as the deceased’s last wills in relation to her estates in South Africa and Israel, respectively. After hearing evidence, the court below (Pienaar AJ) dismissed the matter on the finding that the appellants had not discharged, on a preponderance of probabilities, the onus of proving that the disputed will was not the deceased’s valid last testamentary disposition duly executed in compliance with the provisions of s 2(1)(a) of the Wills Act 7 of 1953 (the Will Act).1 The court below further refused to order the costs of the proceedings to be paid from the estate on the basis that the appellants had unreasonably instituted the proceedings at the behest of their mother to thwart the forfeiture provisions contained in clause 11 of the disputed will which divested a legatee or heir of the deceased, who contested the will, of any benefit under it. Thus, the appellants were mulcted with the costs of the suit. [6] The only question to be determined in this appeal, which is pursued with the leave of this court, is whether the validity of the disputed will has been established. (Another issue initially raised by the appellants relating to the incidence of the onus 1 Section 2(1)(a) of the Wills Act 7 of 1953 reads as follows: ‘2 Formalities required in the execution of a will (1) Subject to the provisions of section 3bis – (a) no will executed on or after the first day of January, 1954, shall be valid unless – (i) the will is signed at the end thereof by the testator or by some other person in his presence and by his direction; and (ii) such signature is made by the testator … in the presence of two or more competent witnesses present at the same time; and (iii) such witnesses attest and sign the will in the presence of the testator and of each other and, if the will is signed by such other person, in the presence also of such other person; and (iv) if the will consists of more than one page, each page other than the page on which it ends, is also so signed by the testator or by such other person anywhere on the page;’ of proof was abandoned before us.) [7] Some background is required. The deceased and her husband, Mr Solomon Max Breslawsky who died in 1966, built a very successful property investment portfolio from a humble furniture shop which they ran in downtown Johannesburg. Although she was illiterate and spoke little English (her mother tongue was Yiddish) she was a very astute and successful businesswoman and personally managed her business and financial affairs until her death, this despite being extremely frail, wheelchair-bound and blind in one eye in the latter phase of her life. [8] The deceased had a particularly close relationship with the Standard Bank, her banker for over 75 years. She latterly dealt mainly with two of its officials, Ms Bridgette Marais (who had passed away by the time of the trial) who assisted by Ms Melanie Els, managed her investment portfolio and Mr Hendrik Strydom, an attorney enlisted by the bank to assist the deceased with her financial and legal affairs. All her wills but the disputed one were drawn by the Standard Bank and she executed the last few with the assistance of Strydom with whom she had formed a relationship of trust. [9] Each of the witnesses at the trial who personally knew the deceased, including her daughters, the fourth respondent, the first respondent’s husband, Strydom and Els described her as very difficult, domineering, manipulative, tight-fisted and mistrustful, especially of her family whom she believed were interested only in her money. This included the first respondent, who, despite attending to her daily needs as her personal assistant, she accused of trying to poison her. The deceased sought to control her family with her wealth (which caused conflict among them) and frequently changed her will on a whim as she would increase or decrease bequests and even exclude beneficiaries altogether depending on who pleased or displeased her at the time. She similarly changed her executors and accountants regularly. [10] According to the Miller, he was introduced to the deceased by a friend, the fourth respondent, and befriended her some years before her death. He is fluent in Hebrew and understood Yiddish in which the deceased preferred to speak. She liked cucumber pickles which he would make for her and she nicknamed him the ‘cucumber man’ for that reason. He often visited her during weekend afternoons and the deceased would then tell him stories of her past. This friendship was confirmed by the fourth and eight respondents. In July 2002, the deceased requested to see him. They consequently met at her flat, where he was let in by a domestic worker, on the 14th of that month. The deceased expressed her concern about the feuding between her children and grandchildren. She told him that she wished to return to her Jewish roots and wanted him to draw a will for her which would restore peace among her family. [11] She gave him specific instructions in that regard, which he recorded in manuscript. In the process she revealed personal information, which he also recorded, about the characters and foibles of each of her beneficiaries and her feelings about them. He occasionally had to gently chide and remind her of her objective to treat everyone fairly when she remembered things about them which annoyed her and threatened to reduce their bequests. From these notes, he drafted the disputed will which the deceased signed, on 4 August 2002 at her flat, after he read it to her, in his presence and in the presence of two witnesses, Mr Barry Tannenbaum, his nephew, and Mr Norman Aaron, his associate, whom he requested to attest the execution of the will. The two men confirmed this version. [12] Relying on the evidence of the various witnesses who testified on the appellants’ behalf, their counsel argued that the court below erred in not finding that the probabilities did not support Mr Miller’s evidence. It was submitted that the following factors rendered the validity of the disputed will doubtful:  it was produced only after the deceased’s death and no account had been sent by Miller for his services until then;  all the deceased’s previous wills had been prepared by the Standard Bank, which was appointed as the executor of her estate, and executed with the assistance of its officials whom she trusted, a procedure which was not followed in the case of the disputed will. The disputed will was in a completely different format and made no provision for the various charitable institutions and the maintenance of the tombstone of the deceased and her late husband as the previous wills did;  the evidence of Mr Miller, Mr Aaron and Mr Tannenbaum differed on a material point as they respectively estimated their visit to the deceased’s flat on 4 August 2002 to have occurred between 16h30 and 17h30, 16h00 and 16h30 and 15h00 and 16h00, which was unlikely in the light of the evidence of the first respondent and her husband who were at the deceased’s flat during that afternoon and did not see them;  on 23 August 2002, after the alleged execution of the disputed will, Ms Marais and Ms Els met the deceased to effect changes to the earlier will;  a handwriting expert, Mr Cecil Greenfield, testified that the disputed will was possibly a forgery;  the first respondent, who spent a lot of time with the deceased as her personal assistant did not know Mr Miller; and  Mr Miller, Mr Aaron and Mr Tannenbaum refused to consult with the first respondent’s attorneys. [13] The appellants’ attempts to refute Mr Miller’s claims to a friendship with the deceased and the execution of the disputed will at the deceased’s flat was premised on the evidence of three witnesses. The first respondent said that she did not know him although it came to light in her cross-examination that she had actually heard of him and knew that he had dealings with the third respondent who managed the deceased’s properties. She and her husband testified that they routinely spent every Sunday between 10h00 and 17h00 with the deceased at her flat and insisted that they would have seen Mr Miller there on 4 August if his version was true. But according to Ms Tholakele Ntuli, one of two of the deceased’s care-givers at the time, they did not adhere to a strict time schedule and usually left anytime between 16h30 and 17h00. She recalled that on 4 August they left at 16h30 because the first respondent was in a hurry to get home to make a telephone call. When her version was put to the first respondent and her husband they were constrained to admit that they left earlier than they previously stated. [14] Ms Ntuli alleged that she was on daily day-duty in August and worked until 18h00 even on Sundays to assist the deceased’s live-in caregiver, Ms Emily Zikalala, as the deceased had become very ill. She saw Mr Miller only once, on a Friday evening in early October 2002, when he visited the flat with the fourth respondent and unsuccessfully tried to persuade the deceased to sign certain documents against her will. She was adamant that she would have seen the second respondent if he visited or at least heard from Ms Zikalala, with whom she worked shifts, if he had come during her absence. She and Ms Zikalala were both on duty on 4 August and only the first respondent and her husband had visited the deceased. [15] Ms Ntuli’s evidence was contradicted in material respects by a number of witnesses, including the first respondent, according to whom Ms Ntuli was on duty alone and not with Ms Zikalala as she testified, on Sunday 4 August. Contrary to Ms Ntuli’s version that the deceased was too ill to receive callers during that month, Ms Els had written records of meetings which she and Ms Marais had with the deceased on 4 and 23 August 2002 and testified about the discussions they had with her at those meetings. Surprisingly, the first respondent, to whom Ms Ntuli said she reported, the second and fourth respondents’ October visit was not mentioned in her evidence as would be expected. The eighth respondent who was visiting the deceased and staying with her at the time denied the alleged visit, as did the fourth respondent who, it turned out, was travelling overseas during that month. Even if one accepts that the visit occurred as alleged, it is difficult to imagine what ‘documents’ Mr Miller would have tried to influence the deceased to sign at that stage when the disputed will had been executed some weeks before. [16] Interestingly, three days after the deceased’s death, the first respondent took Ms Ntuli to the police station to sign an affidavit which she had prepared for her, stating that no one had visited the deceased and caused her to sign any documents on 4 August 2002. Curiously, on 11 December 2002 the first respondent took Ms Ntuli back to the police station to depose to yet another affidavit prepared by her, ostensibly to confirm what Ms Ntuli had said in the first statement. Ms Ntuli barely spoke English and had worked for the deceased for only a few months before the latter died, apparently having been hired merely to assist Ms Zikalala as she worked only day shifts and lived in separate quarters, on another floor of the deceased’s building. But Ms Zikalala, the permanent caregiver and a fluent English speaker who actually lived with the deceased and would, logically, have been a better source of the goings-on in the deceased’s lodgings, was puzzlingly not called to testify. I find it most surprising that Ms Ntuli would unerringly remember the fine detail of the events of 4 August 2002 four years later when, by her own account, there was nothing remarkable about the day to jog her memory. These discrepancies and improbabilities in her evidence, in my view, cast serious doubt on her credibility and it seems to me that the court below rightly rejected her evidence. [17] It was not disputed that both Mr Tannenbaum and Mr Aaron obtained no benefit from witnessing the execution of the disputed will. It is difficult to conceive why these men who knew neither the deceased nor any member of her family would conspire in the forgery of her will and perjure themselves in court as the appellants would have it. This applies equally to Mr Miller, despite his friendship with the fourth respondent, because he refused to accept his nomination as an executor and arranged for another attorney to administer the deceased’s estate. Unfairly, no imputation that these witnesses conspired to forge the will and were lying in court was put to them when they testified to afford them an opportunity to deal with those imputations.2 And, not unexpectedly, the appellants’ counsel could advance no reason before us why any finding of dishonesty should be made against them. [18] Other than the contradiction relating to the precise moment of the execution of the disputed will during the afternoon of 4 August 2002, no other flaw was identified 2 President of the Republic of South Africa v South African Rugby Football Union 2000 (1) SA 1 (CC). in the corroborative versions of the second respondent and his two witnesses. To my mind, this difference is not unexpected considering that these witnesses were testifying about events which had occurred some years earlier which they had not recorded. The time frames they gave were merely estimates but the tenor of their evidence was that their meeting with the deceased took place in the middle to late afternoon. It can safely be accepted on this evidence, in view of the Levins’ concession regarding the time of their departure from the deceased’s flat, that the disputed will was executed after 16h30. [19] The first respondent conceded that the intimate details about the deceased’s children and grandchildren and her personal views about them which are contained in the notes which the Mr Miller said he took during his consultation with the deceased were accurate. But she suggested that Mr Miller probably got the information from the fourth respondent. I find that possibility most unlikely merely from the nature and tone of Mr Miller’s recordal which depicted an emotional and deeply personal running commentary. But that apart, it was not put to Mr Miller that his notes were a fabrication. Neither was there any hint that the fourth respondent had been present at or was even aware of the meeting of 14 July 2002. [20] It is clear from the Standard Bank officials’ manner towards the deceased (the daily telephone calls to check on her health, the constant social visits, the gifts she was given etc. patently went far beyond the call of normal business relations) that they did not trust that she would not change the bank as her executor and needed to constantly keep her happy. This attitude is, in fact, borne out by Ms Els’ evidence that at their meeting of 23 August 2002, Ms Marais pertinently asked the deceased if she had signed another will. That question could only have been prompted by suspicion. [21] It is not at all odd in view of the deceased’s impulsive and distrustful nature that she could have asked Mr Miller to draw a secret will on her behalf. It is plain from the evidence particularly that of the first respondent’s husband, Mr Miller and Mr Strydom regarding their relationships with the deceased that she trusted people who understood her home language with whom she could reminisce. [22] The object of the disputed will was to divide the deceased’s estate fairly among her children and end the conflict in her family. It had nothing to do with her previous wills and there is no reason why Mr Miller would have adopted the Standard Bank format which does not appear to have been brought to his attention and from which the deceased wanted to depart in any case. Mr Miller’s evidence that the deceased specifically instructed him not to send him a statement of account or a copy of the will until she requested it and that he had gained the impression that she wanted to keep its existence a secret tallies with her character. And I see no reason to draw an adverse inference from his and the other witnesses’ refusal to consult with the appellants’ attorneys, as we were urged to do, when it was not disputed that they were advised against such a meeting by their attorney who had already been notified by the Standard Bank that it was contemplating challenging the disputed will. [23] Regarding the evidence of the handwriting expert, Mr Greenfield, the court below found that it was trumped by the direct testimony given by Mr Miller, Mr Tannenbaum and Mr Aaron and the evidence of the deceased’s ophthalmologist, Dr Mark Deist. In reaching this conclusion, the court relied on the judgments of this court in Kunz v Swart3and Annama v Chetty4 which enjoined courts to apply caution before accepting handwriting expert evidence. I respectfully agree with the finding of the court below in this regard. [24] In the first of two reports on the authenticity of the testator’s signature in the disputed will prepared by Mr Greenfield, he expressed the following view: ‘If on 4th August 2002, the late Ms Breslawsky’s general health had markedly improved – compared with the state of her muscular control and eyesight, demonstrated in the signatures in the Will written some twelve months earlier, it is my view, that she was, in all probability, the writer of the disputed signatures. If however, it can be proved that her eyesight and muscular control had dramatically deteriorated during the intervening period between the pen-ultimate and the questioned Will; right up to the time of signing, then there is, in my view, a strong possibility that the disputed signatures are very good freehand simulated forgeries.’ [25] What Mr Greenfield had not been told when he prepared his final report (after being furnished with further signatures of the deceased), which concluded that the disputed will was most probably a forgery, was that the deceased had in fact undergone an eye cataract operation after signing the 2001 will. According to Dr Deist, corroborated by the first respondent, this procedure had significantly improved the deceased’s vision and hand-eye coordination. Dr Deist opined that it was reasonable in the light of this improvement to expect the deceased’s handwriting to be neater. Mr Greenfield conceded that in addition to this operation he was not aware that the deceased was blind in one eye and did not consider the deceased’s position when she signed the documents and that all these factors were relevant to his enquiry. Whilst he still nursed some misgivings about the genuineness of the signature in the 3 Kunz v Swart 1924 AD 618. 4 Annama v Chetty 1946 AD 142. disputed will, he fairly conceded that he would yield to direct evidence to the effect that the signature was that of the deceased. If the evidence of Mr Miller and his witnesses that the disputed will was signed by the deceased is accepted, as I think it must, then Mr Greenfield’s opinion must be rejected. [26] What is most striking about this case, in my view, is the nature of the disputed will which distributes the deceased’s assets among her family far more equitably than any of her previous wills. This is indeed consonant with Mr Miller’s account that she wanted peace among her offspring in her final days. I reiterate that it seems to me most unlikely that three individuals, unrelated to the protagonists, would conspire to forge a will which treated the beneficiaries fairly and from which they stand to gain nothing and to perjure themselves in a bid to uphold it. [27] I have found no reason to doubt Mr Miller’s evidence regarding the making of the disputed will. The incidence of the onus does not, therefore, arise. His evidence and that of the witnesses to the signing of the will establishes that it complied with the formalities required by s 2(1)(a) of the Wills Act. The appeal must, therefore, fail. [28] There remains the question of costs. It was contended on the appellants’ behalf that if the appeal failed the costs of all the parties both on appeal and in the court below should nonetheless be paid from the deceased’s estate because there was a reasonable basis to doubt and challenge the authenticity of the disputed will. I do not agree. An order that the costs in a suit must be paid from the estate is not a general rule, even in matters involving the determination of the true meaning of an ambiguous will,5 which is hardly the issue here. [29] The manner in which the appellants conducted the litigation left much to be desired. They knew all too well that the deceased remained mentally sound and strong-willed despite her advanced age. But, despite this knowledge, some of the grounds they pleaded as a basis for challenging the disputed will disingenuously sought to cast doubt on her mental capacity and ability to make independent decisions. The appellants also knew of the deceased’s mistrustful and impulsive nature and cannot have been surprised by the existence of an undisclosed will. They persisted with the litigation in total disregard of the evidence that her cataract operation had favourably impacted her handwriting. [30] The submission that if Mr Tannenbaum, Mr Aaron and Mr Miller had not refused to consult with the appellants’ attorney the appellants would probably not have launched the action has no merit in view of the fact that the appellants persisted with their claim even after they had testified. I see no reason in these circumstances to burden the deceased’s estate with the costs of ill-conceived litigation and hold that they should follow the result. [31] Accordingly, the appeal is dismissed with costs including the costs of two counsel. ____________________ 5 Cuming v Cuming 1945 AD 201 at 216. MML MAYA Judge of Appeal APPEARANCES APPELLANTS: K.R. Lavine Instructed by Cranko Karp & Associates, Johannesburg; Lovius Block Attorneys, Bloemfontein. RESPONDENT: H. Epstein SC (Ms) K Schneid Louis H Garb and Raymond Joffe Attorneys, Johannesburg; Claude Reid Inc, Bloemfontein.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 03 June 2011 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal Levin v Levin (644/09) [2011] ZASCA 114 (03 June 2011) The Supreme Court of Appeal today dismissed an appeal against the decision of the South Gauteng High Court which found the will of the late Mrs Minnie Breslawsky dated 14 August 2002 valid. The Supreme Court of Appeal found no reason to doubt the evidence of Mr Normal Miller, an attorney, who drew the disputed will and held that his evidence and that of the two witnesses to the signing of the will, established that it complied with the formalities required by s 2(1)(a) of the Will Act 7 of 1953. ---ends---

2193

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 153/2008 CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY (FORMERLY GREATER JOHANNESBURG TRANSITIONAL METROPOLITAN COUNCIL) Appellant and ENGEN PETROLEUM LIMITED 1 st Respondent SANDTON GATE SERVICE STATION 2 nd Respondent Neutral citation: City  of  Johannesburg  v  Engen  Petroleum  Ltd  (153/2008) [2009] ZASCA 5 (10 March 2009) Coram: Mpati P, Cloete, Lewis, Cachalia JJA and Leach AJA Heard: 26 February 2009 Delivered: 10 March 2009 Summary: The  elevation  of  four  lanes  of  a  road  above  an  intersection amounts to a permanent diversion for the purpose of s 67 of the Local Government Ordinance 17 of 1939 (T). ORDER On appeal from: High Court, Johannesburg (Boruchowitz J sitting as court of first instance): ‘The appeal is dismissed with costs including the costs of two counsel.’ JUDGMENT LEWIS JA (MPATI P, CLOETE and CACHALIA JJA and LEACH AJA concur) [1] Grayston  Drive  in  Sandton,  Johannesburg  runs  from  east  to  west,  from Rivonia Road to Wynberg and vice versa. It is a major thoroughfare that leads to and from on and off ramps of the M1 Highway. The highway connects Pretoria in the north and Johannesburg in the south. From 1992 to 1994 the City Council of Sandton  effected  substantial  changes  to  Grayston  Drive,  in  particular  at  its intersection with Katherine Street, also a major thoroughfare, which runs in part at right angles to Grayston Drive.  The effect of the construction work was to elevate four lanes of Grayston Drive (two in each direction) above Katherine Street in such a way as to create a flyover above it. One lane on the southern side and two on the northern side of the flyover remained on the same plane as previously. [2] The second respondent, Sandton Gate Service Station CC (Sandton Gate), owns a petrol filling station and a public garage on the south­west side of Grayston Drive,  at  the  intersection  with  Katherine  Street.  Sandton  Gate  is  supplied  with petrol  and  other  products  by  the  second  respondent,  Engen  Petroleum  Ltd (Engen).  Sandton  Gate  and  Engen  claimed  damages  from  the  appellant  (the successor in title to the Sandton City Council, and to which I shall refer as the City Council)), allegedly caused by the diversion, or closure, of the lanes in Grayston Drive,  which,  they  contended,  impeded  access  by  vehicles  to  the  filling  station owned  by  Sandton  Gate  (the  filling  station).  The  reduced  access  resulted,  they alleged, in a decrease in sales of Engen products, such that both Sandton Gate and Engen have suffered losses. [3] The  right  to  claim  damages  that  the  respondents  assert  arises  from subsections  67(3)  and  (4)  of  the  Local  Government  Ordinance  17  of  1939  (T) which  the  parties  agree  was  in  operation  at  all  relevant  times.  The  pertinent provisions of section 67 follow: ‘67 Permanent  closing  or  diversion  of  street.  –  Notwithstanding  anything  to  the contrary  in  this  Ordinance  contained  the  council  may  with  the  approval  of  the Administrator, permanently close or divert any street or portion of a street if and when the following conditions have been complied with – (1) Notice of the intention to move that steps be taken for the closing or diversion of a street or portion of a street shall be given at a meeting of the council at least fourteen days prior to the meeting at which the motion will be dealt with. (2) If  the  said  motion  be  agreed  to  the  council  shall  cause  a  plan  to  be  prepared showing the position of the boundaries of the street or portion of the street proposed to be closed or diverted. (3) (a)  On completion of the said plan the council shall publish a notice in the Provincial Gazette  and  in  at  least  one  English  and  one  Afrikaans  newspaper  circulating  in  the council’s area of jurisdiction setting out briefly the council’s proposals, stating that the said plan is open for inspection at a place and during the hours specified in such notice and calling upon any person who has any objection to the proposed closing or diversion or who will have any claim for compensation if such closing or diversion is carried out to lodge his objection or claim, as the case may be, with council, in writing, not later than a specified date  which  shall  be  at  least  sixty  days  from  the  date  of  publication  of  the  Provincial Gazette or newspaper in which the notice will be published last. (b) The council shall at least sixty days before the time for the lodging of objections and claims will expire – (i) cause copies of the said notice to be posted in a conspicuous manner on or near the street or portion of the street which it is desired to close or divert and shall cause such copies to remain posted as aforesaid until the time for lodging objections and claims has expired; (ii) cause a copy of the said notice to be served on the owners or reputed owners, lessees or reputed lessees and the occupiers of all properties abutting upon the street or portion of the street which it is proposed to close or divert; provided that if the name and address  of  any  such  owner,  reputed  owner,  lessee,  reputed  lessee  or  occupier  cannot after reasonable enquiry be ascertained, a copy of the notice need not be served on him. (iii) … (4) (a)  Any  person  who  considers  that  his  interests  will  be  adversely  affected  by  the proposed closing or diversion may at any time before the time for the lodging of objections and claims has expired, lodge with the council a claim, in writing, for any loss or damage which will be sustained by him if the proposed closing or diversion is carried out.  If such closing or diversion is carried out the council shall pay compensation for the damage or loss  sustained  by  such  person,  the  amount  of  compensation  in  default  of  mutual agreement to be determined by arbitration. In assessing the amount of compensation the benefit or advantage derived or to be derived by the claimant by reason of the closing or diversion shall be taken into account. If such person, however, fails to lodge his claim with the  council  during  the  period  during  which  objections  and  claims  may  in  terms  of paragraph (3) of this section be lodged he shall not be entitled to any compensation for any damage or loss sustained by him. (b) If  the  council  finds  that  the  payment  of  compensation  will  be  too  costly,  it  may resolve not to proceed with the proposed closing or diversion. . . . (10) The  council  shall  supply  the  Surveyor­General  with  a  diagram  framed  by  an admitted Land Surveyor showing all the details of the closing or diversion.  The Surveyor­ General shall thereupon cause such amendments to be made in the general plan of the township as are necessary to show such closing or diversion and the Registrar of Deeds or other registration officer concerned shall thereupon make corresponding entries in his registers. . . .’ [4] The City Council admits that it did not comply with the conditions prescribed by subsections 67(2) and (3). No notice was given to any of the affected property owners  or  occupiers  (the  City  Council  pleaded  that  since  it  did  not  effect  a permanent closure or diversion notice was not necessary) and thus no objections were made in accordance with the section. [5] At  issue  before  the  high  court  was  the  sole  question  whether  the construction work effected by the City Council constituted a permanent diversion or closure of Grayston Drive as contemplated by s 67 of the Ordinance. (The high court had ordered a separation of issues in terms of r 33(4)). Boruchowitz J found that the elevation of four lanes of Grayston Drive did not amount to a permanent closure  of  the  road  (and  there  is  no  cross­appeal  against  that  finding)  but  did constitute a permanent diversion. The City Council appeals against that decision with the leave of the high court. [6] The  only  issue  before this  court is  thus  whether  the  high  court  correctly found  that  the  elevation  of  four  lanes  above  Katherine  Street  amounted  to  a diversion of a portion of Grayston Drive for the purpose of s 67 of the Ordinance. There are no factual disputes. The parties, in the pleadings and at the trial, made several admissions. These include: the southern boundary of the road reserve that existed prior to the construction of the Grayston flyover did not change after the construction  work  was  completed.  The  intersection  with  Katherine  Street  has remained  much  the  same,  save  that  four  lanes  of  Grayston  Drive  are  elevated above it. Prior to the construction of the four­lane flyover, the southern portion of Grayston Road consisted of three lanes which intersected with Katherine Street at ground  level,  and  the  intersection  was  controlled  by  traffic  lights.  After  the construction  of  the  flyover,  the  southern  portion,  accommodating  the  traffic  that flows from east to west, has been divided into two sections; two lanes are on the flyover,  whilst  the  most  southern  lane  still  goes  through  the  intersection  with Katherine Street. (The same change was effected on the northern side, two lanes proceeding at ground level and two on the flyover.) The southern lane proceeds from east to west across Katherine Street past the Sandton Gate filling station and rejoins the other two lanes going in the same direction at the end of the flyover. Access from the southernmost lane to the filling station has not been affected. But once  traffic  proceeds  on  the  lanes  on  the  flyover  it  has  no  access  to  the  filling station. If the construction of the flyover does constitute a permanent diversion or closure  Engen  and  Sandton  Gate  are  persons  within  the  ambit  of  s  67  of  the Ordinance. [7] On appeal the City Council contends that the construction of the flyover did not amount to a permanent diversion: the elevation of four lanes of Grayston Drive does not divert the road. The City Council concedes that there has been a change to  Grayston  Drive,  but  argues  that  the  change  does  not  amount  to  a  diversion because that requires a lateral change, on a horizontal plane. There is no change from a course or a route, it contends. Vehicles proceed along the same path as they would have done before the construction of the flyover. [8] The  City  Council  relies  in  this  regard  on  Bellevue  Motors  CC  v Johannesburg City Council 1 in which it was held that the reverse of traffic flow on a road  did  not  amount  to  a  diversion  for  the  purpose  of  s  67  of  the  Ordinance. Rockey Street, Bellevue, Johannesburg, is a one­way street. The Council changed the direction of the flow of the traffic. The court found that this did not amount to a diversion of the road. The court said: 2 ‘Its [divert’s] plain meaning is related to the words ‘any street or portion of a street’ and has nothing to do with the direction of traffic flows on the street however adversely these may affect a particular party  . . . The Oxford English Dictionary 2 nd ed (1991) vol 4 at 888 gives the following meaning to the word ‘divert’: ‘To turn aside (a thing, as a stream, etc) from its (proper) direction or course; to deflect (the course of something); to turn from one destination or object to another.’ . . . In my view, the diversions of traffic flows on Rockey Street  . . . do not have the effect of turning Rockey Street from its proper direction or course . . . . It seems to me that the section envisages a diversion of a street in the sense that the street, I stress ‘street’, as opposed to the traffic that travels thereon, is diverted, in the sense that it is deflected from its proper course.’ [9] Boruchowitz J, in the high court, considered that in this case the issue was different. It was not traffic flow, or the direction of traffic flow, that was the diversion contended for, but the deviation of the road itself. Prior to the construction of the flyover, the three lanes of Grayston Drive running from west to east had been on a level plane: after the construction two lanes were on a different plane. There had been a vertical diversion – the physical location of the two lanes had changed and been diverted away from the intersection with Katherine Street. [10] The City Council argues that this conclusion is not consonant with dictionary definitions  of  ‘divert’.  A  diversion,  dictionary  definitions  suggest,  must  be  on  a horizontal plane. Thus, it contends, when an aeroplane flies at a higher or lower altitude than planned it does not ‘divert’ from its course: it continues in the same direction.  Sandton  Gate  and  Engen  contend,  on  the  other  hand,  that  while  it  is correct that various dictionary definitions indicate that the usual meaning of ‘divert’ is  to  turn  in  a  different  direction,  or  to  alter  the  course  of  something,  dictionary 1 1994 (4) SA 339 (W). 2 At 343D­H. definitions  are  not  decisive.  In  Monsanto  Co  v  MDB  Animal  Health  (Pty)  Ltd 3 Harms JA repeated the general principle that, while dictionary definitions may be a useful guide to the meaning of a word, the task of an interpreter is to ascertain the meaning  of  a  word  in  its  context.  The  court  cited  the  dictum  of  Hefer  JA  in Fundstrust (Pty) Ltd (in liquidation) v Van Deventer 4 where he had said: ‘As a rule every word or expression must be given its ordinary meaning and in this regard lexical research is useful and at times indispensable. Occasionally, however, it is not.’ [11] Counsel for Sandton Gate and Engen have provided numerous examples of statutes and cases in the United Kingdom and elsewhere where the word ‘divert’ is used to indicate a change on a vertical plane. But these are all context­specific and do not, in my view, assist in the interpretation of s 67 of the Ordinance. Counsel refer also, however, to W G Berry Local Government Law in the Transvaal (1978), 5 which, commenting on s 67(4) observes, although without reference to authority, that:  ‘The  raising  or  lowering  of  the  level  of  a  street  may,  however,  possibly constitute a closing or diversion of the street (ie, on the vertical as opposed to the horizontal  plane),  which  might  possibly  give  rise  to  a  claim  for  compensation  in terms of s 67(4). . . ’. [12] Counsel  for  the  City  Council,  who  take  issue  with  this  construction,  were driven  to  contend  that  if  the  four  lanes  of  Grayston  Drive  had  been  built underground, in a tunnel rather than on a flyover, that too would not amount to a diversion since there would not be any deviation away from the original path of the road. The fallacy in this approach is self­evident. [13] The City Council also argues that a general plan of the road system, which is two­dimensional, does not show any change to the path of the road. The plan shows only changes in direction – that is, horizontal movements to left and right, or to north, south, east or west. Regard must be had, the argument continues, to the definition of ‘street’ in the Ordinance: s 2 defines a ‘street, road or thoroughfare’ as one shown as such on the general plan of a township. The elevation of lanes on 3 2001 (2) SA 887 (SCA) para 9. 4 1997 (1) SA 710 (A) at 726H­727B. See also De Beers Industrial Diamond Division (Pty) Ltd v Ishizuka 1980 (2) SA 191 (T) at 196E­F, and Seven Eleven Corporation of SA (Pty) Ltd v Cancun Trading No 150 CC 2005 (5) SA 186 (SCA) para 24. 5 Page 64. Grayston Drive to create a flyover does not require a change to the general plan, which is two­dimensional. This, it is argued, demonstrates that there has been no diversion. The effect of the argument is that the general plan is determinative of the question whether there has been a permanent diversion. [14] There is, however, nothing in the Ordinance that suggests that a diversion is only  such  if  the  general  plan  requires  amendment  pursuant  to  its  construction. Moreover, s 67(10) requires the City Council to supply the Surveyor­General with a diagram  of  a  diversion  only  after  the  work  has  been  completed.  The  question whether there has been a diversion is one of fact, not decided by the Surveyor­ General  or  any  other  functionary.  Thus  in  my  view  whether  or  not  a  change  is reflected on the general plan cannot be determinative of the nature of the change. [15] I  consider  that  meaning  must  be  given  to  ‘diversion’  by  examining  the purpose of s 67 (read of course in the light of the entire Ordinance). I deal here only  with  a  diversion  since  closure  is  not  in  issue:  but  the  principles  applicable would of course be the same. Section 67 requires notice to be given to persons affected by a permanent diversion, who may in turn object to the proposed change and claim compensation for any loss sustained as a result of the diversion. The purpose of the provision is clearly to compensate for pecuniary loss sustained as a result  of  a  change  to  the  road  that  has  an  adverse  financial  effect  on  owners, lessees  or  occupiers  whose  property  abuts  the  road.  The  question  to  be considered, then, is whether the change to the road itself has such an effect. If raising the elevation of the two lanes of Grayston Road in issue has that effect then the change must fall within the ambit of the section. [16] It  is  clear  that  the  elevation  of  the  lanes  on  Grayston  Drive  has  had  a material impact  on  the  ability  of  drivers  to  gain  access  to  the  filling  station.  If  a driver  proceeding  from  east  to  west  along  the  road  is  in  any  but  the  outer (southern) lane he or she must drive on to the flyover over Katherine Street, and will not be able to gain access to the filling station. Similarly, motorists travelling in the other direction, who before the construction could have turned into the filling station,  now  cannot  do  so  unless  they  first  turn  into  Katherine  Street,  and  then back  again  in  to  the  southernmost  lane  of Grayston  Drive. The  elevation  of  the lanes  has  thus  changed  the  access  of  drivers  to  the  filling  station  no  matter  in which  direction  they  are  travelling.  A  substantial  portion  of  Grayston  Drive  has been  moved  upwards,  on  to  a  different  plane,  such  that  access  to  and  from adjoining  properties  has  been  materially  altered.  It  should  be  noted  that  s  67 contemplates permanent diversion also of a portion of a road, not only the whole road. [17] I  consider  that  this  is  pre­eminently  the  kind  of  road  change  that  affects adjacent landowners, lessees and occupiers whom the provisions of the ordinance are  designed  to  compensate in  the event  of  loss.  It  would  be  artificial  to regard Grayston Drive and the land abutting it as being in the same position as they were prior  to  the  construction  of  the  flyover.  There  is  no  justification  for  construing  s 67(4)  so  as  to  limit its  application  to  horizontal diversions. In  any  event,  such  a limitation would give rise to absurdity. The purpose of s 67(4) is to compensate property owners, lessees or occupiers who suffer pecuniary loss because of the change in the road. If the two lanes in Grayston Drive had been moved further to the  north,  for  example,  rather  than  on  to  a  flyover,  and  that  had  the  effect  of diverting traffic, and thus business, away from the filling station, Sandton Gate and Engen would have been entitled to recover their losses. If the effect of moving the two lanes up vertically is the same, why should they, or any other right holder in a similar position, be non­suited? The distinction contended for is not only illogical, but could lead to inequitable results. I can see no reason why s 67(4) should allow compensation  for  pecuniary  loss  suffered  only  where  there  is  a  horizontal relocation of a road. [18] I  consider  therefore  that  the  construction  of  the  flyover  did  constitute  a permanent diversion for the purpose of s 67(4) and thus that the decision of the court below was correct on this point. [20] The appeal is accordingly dismissed with costs including those attendant on the employment of two counsel. C H Lewis Judge of Appeal Appearances: For the Appellant: J Suttner SC T Motau Instructed by: Knowles Husain Lindsay Inc Sandton Johannesburg McIntyre & van der Post Bloemfontein For the 1 st Respondent: O L Rogers SC P L Carstensen Instructed by: Kritzinger & Co Rosebank Johannesburg Matsepes Attorneys Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA PRESS RELEASE 10 March 2009 STATUS: Immediate City of Johannesburg v Engen Petroleum (153/2008) [2009] 5 ZASCA (XX 2009) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Johannesburg High Court granted an application by the owner of a petrol filling station and its supplier for an order that the elevation of four lanes of Grayston Drive, above Katherine Street, in Sandton, Johannesburg, amounted to a permanent diversion of that portion of Grayston Drive for the purpose of s 67 of the Local Government Ordinance 17 of 1939 (T), in operation over the relevant period from 1992 to 1994. The section required notice to be given to adjacent property owners, lessees and occupiers, and made provision for them to object to a permanent diversion and to claim compensation for financial loss caused by such a diversion. The City Council did not give notice to affected persons, apparently being under the impression that a vertical change to Grayston Drive did not amount to a diversion. On appeal against the order of the High Court the City Council argued that only lateral or horizontal deviations from a path or road constitute diversions, and that because the general plan of the area does not necessarily show any elevation or vertical change, the elevated portion of Grayston Drive did not amount to a permanent diversion. The SCA today dismissed the appeal against the High Court order, finding that the construction of a flyover over Katherine Street, and the consequent elevation of four lanes above the intersection, did amount to a permanent diversion. The court held that nothing in the ordinance suggested that only horizontal diversions were covered by s 67, the purpose of which was to compensate property holders for financial loss caused by a permanent change to a road. ------------------

3056

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 20519/14 In the matter between Reportable ANNIE HENDRICKS APPELLANT and MARGARET HENDRICKS FIRST RESPONDENT GRAHAM HENDRICKS SECOND RESPONDENT AND ALL OTHER FAMILY AND PERSONS RESIDING UNDER THE FIRST AND SECOND RESPONDENTS THIRD RESPONDENT CITY OF CAPE TOWN FOURTH RESPONDENT Neutral citation: A Hendricks v M Hendricks & others (20519/14) [2015] ZASCA 165 (25 November 2015) Coram: Mhlantla, Leach, Tshiqi, Majiedt and Saldulker JJA Heard: 16 November 2015 Delivered: 25 November 2015 Summary: Eviction – an owner who occupies property without the consent of the holder of a right of habitation in respect of that property is an „unlawful occupier‟ as contemplated in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Zondi and Samela JJ sitting as court of appeal): 1. The appeal is upheld, with the first respondent to pay the costs. 2. The order of the a quo is set aside and substituted with the following: „(a) The appeal is upheld, with the first respondent to pay the costs. (b) The matter is remitted to the Somerset West Magistrates‟ Court for the finalisation of the eviction application brought by the appellant, (the applicant in the magistrates‟ court), in particular for a consideration of the factors set out in section 4(7) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998‟. ______________________________________________________________ JUDGMENT ______________________________________________________________ Majiedt JA (Mhlantla, Leach, Tshiqi and Saldulker JJA concurring): [1] A long-running family quarrel culminated in the appellant, Ms Annie Hendricks, seeking the eviction of her erstwhile daughter-in-law, the first respondent, Ms Margaret Hendricks, and her son, the second respondent, Mr Graham Hendricks, in the Somerset West Magistrates‟ Court. The third respondent, collectively the other persons occupying the property in question through the first and second respondents, and the fourth respondent, the City of Cape Town, did not participate in the matter. I will therefore refer to the first and second respondents simply as „the respondents‟. [2] The eviction was sought in terms of the provisions of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998, (the PIE Act), but was unsuccessful. The magistrates‟ court held that the respondents were not unlawful occupiers as contemplated in the PIE Act and could therefore not be evicted. The Western Cape Division of the High Court, Cape Town (Zondi and Samela JJ, sitting as court of appeal) endorsed this view and dismissed the appellant‟s appeal. This court granted the appellant special leave in terms of s 16(1)(b) of the Superior Courts Act, 10 of 2013. [3] The eviction application was unopposed. The unanswered factual allegations made by the appellant are these. The appellant was 72 years old when she launched the eviction application. On 5 November 1990 she had sold her residential property, Erf 2128, Macassar, situated at 9 Fish Street, Macassar (the property), to her son, the second respondent. A lifelong right of habitation was registered in favour of the appellant on the property‟s title deed. A concomitant cession of right of habitation, signed by the second respondent in favour of the appellant in respect of the property, was recorded in a notarial deed, number K871/90. The appellant lived in the property when her son took occupation thereof after registration of the transfer. The second respondent married the first respondent in community of property on 24 November 1990. Relations soured between the appellant and the first respondent and deteriorated steadily over the years. By 2009 the appellant experienced the living conditions in the property as intolerable which prompted her to leave the property temporarily. She was granted refuge first by her daughter and later by her other son. The appellant obtained a family violence interdict against the first respondent and instructed her attorneys to write to the respondents to request them that the appellant be permitted to move back into the property without being verbally abused by them. These letters, as well as ongoing negotiations, including a round-table discussion convened by the appellant‟s attorneys, bore no fruit. [4] The respondents were divorced on 2 February 2010 and, in terms of the decree of divorce, their joint estate in community of property had to be divided equally between them. It appears from the papers that at some stage the second respondent (who, as stated, is the appellant‟s son) left the property, possibly as a consequence of having been refused access to the property by the first respondent. He has played no part in any of the previous proceedings and in this court. Ultimately, the first respondent remained in occupation of the property, together with her daughter from a previous relationship, her granddaughter and the three children born of the marriage between her and the second respondent. On 6 February 2012 the appellant‟s attorneys wrote to the first respondent, again asserting the appellant‟s right of habitation and calling upon the first respondent to vacate the property by 22 February 2012, failing which an eviction order would be obtained. In the end, an eviction order was sought, without success. [5] The central issue before the magistrates‟ court was whether the respondents were unlawful occupiers as envisaged in the PIE Act. Section 4 provides for the eviction of unlawful occupiers. Since the respondents had been in occupation of the property for more than six months at the time of the eviction application, s 4(7) applies. It reads: „(7) If an unlawful occupier has occupied the land in question for more than six months at the time when the proceedings are initiated, a court may grant an order for eviction if it is of the opinion that it is just and equitable to do so, after considering all the relevant circumstances, including, except where the land is sold in a sale of execution pursuant to a mortgage, whether land has been made available or can reasonably be made available by a municipality or other organ of state or another land owner for the relocation of the unlawful occupier, and including the rights and needs of the elderly, children, disabled persons and households headed by women.‟ In s 1 „unlawful occupier‟ is defined as follows: „“unlawful occupier” means a person who occupies land without the express or tacit consent of the owner or person in charge, or without any other right in law to occupy such land, excluding a person who is an occupier in terms of the Extension of Security of Tenure Act, 1997, and excluding a person whose informal right to land, but for the provisions of this Act would be protected by the provisions of the Interim Protection of the Informal Land Rights Act, 1996 (Act 31 of 1996).‟ „Person in charge‟ is defined in that section as „a person who has or at the relevant time had legal authority to give permission to a person to enter or reside upon the land in question‟. The appellant‟s case is that she was at the time of the eviction application the person in charge of the property, and that her legal authority, as contemplated in the definition, emanated from her right of habitation. In the magistrates‟ court the appellant‟s legal standing to bring the application and the fact that she had temporarily given up residing in the property without abandoning her right of habitation, was not in issue. It was also not in issue that she had not consented to the respondents‟ occupation of the property and that any previous tacit or implied consent had been unequivocally withdrawn. I must add that, although no opposing papers had been filed on behalf of the respondents, they were represented by an attorney in the magistrates‟ court. But in the court a quo and in this court, the first respondent appeared in person, apparently due to impecuniosity. Before us the first respondent merely denied that she had caused the appellant to leave the property and indicated that the appellant was welcome to return at any time. [6] The right to habitation as a servitude is a limited real right which confers on the holder the right to dwell in the house of another, without detriment to the substance of the property1. The right can historically be traced back to Roman law when the original objective was to provide accommodation to indigent foreigners. In that context it was regarded as a factual, rather than a juridical, institution. But Justinian accepted it as a sui generis legal concept and he classified it as a personal servitude2. This was generally accepted by Roman-Dutch authorities3. Our courts have long recognized habitatio as a personal servitude which is a limited real right. Thus it has been held to be a jus in re which founds an action rei vindicatio4. The novel question before us is whether, as far as the PIE Act is concerned, a holder of this limited real right is a „person in charge‟ of the property in respect of which the habitatio operates and whether that holder can obtain an eviction 1 See: P J Badenhorst et al, Silberberg and Schoeman‟s The Law of Property, 5 ed at 341. 2 I 2.5.5; and see Van Leeuwen Censura Forensis 1.2.15.12. 3 Grotius, Introduction 2.44.8; van der Linden, Institutes 1.11.6. 4 Galant v Mahonga 1922 EDL 69 at 79. See also Kidson & another v Jimspeed Enterprises CC & others 2009 (5) SA 246 (GNP) paras 7 and 8, where Van Rooyen AJ gives a useful exposition of the history and ambit of the right. order against an owner who occupies the property without the holder‟s consent. For the reasons that follow both these questions must in my view be answered in the affirmative. [7] It is well established that ownership is the most comprehensive real right and that all other real rights are derived from it5. But limited real rights are absolute in the sense that they are enforceable against any and all. A limited real right detracts from the owner‟s dominium. Thus, in the present instance, the owner of the property, the first respondent, cannot exercise full dominium over it, inasmuch as she cannot occupy the property, unless the appellant as the holder of the right to habitation has consented thereto. Absent such consent, her occupation of the property is unlawful. She is therefore, on the facts of this case, an „unlawful occupier‟ within the meaning contemplated in s 1 of the PIE Act. [8] The court a quo sought to distinguish Galant and Kidson (referred to in footnote 4 above) on the facts and on the law. It rejected the contention advanced by the appellant‟s counsel that „the right to habitation trumps ownership‟. Finally, it found that the owner of the right to habitation cannot evict the owner of the servient tenement. While it did not set out any further reasons for this conclusion it seems to me, with respect, that the court a quo has misconceived the nature of the right of habitation vis-à-vis the owner of the property in respect of which the habitatio prevails. And the court a quo failed to consider at all whether the holder of such a right can be a „person in charge‟ for purposes of the PIE Act, more particularly as far as s 4(7) is concerned. In Kidson the owner of a farm had destroyed the farmstead and outbuilding to which the applicants had a right of habitation, granted to them by the previous owner. The court held that the applicants were entitled to exercise their rights of habitation by either rebuilding the farmstead and outbuildings or by building alternative structures. Van Rooyen AJ correctly held (at para 11) that „the ius in re aliena limits [an owner‟s] ownership until 5 Grotius: Inleidinge 2.3.10: „Ownership is complete if someone may do with the thing whatever he pleases, provided that it is permitted in terms of law‟ (translation as set out in Silberberg and Schoeman‟s The Law of Property 5 ed, at 91 fn 7, own emphasis). See also Regal v African Superslate (Pty) Ltd 1963 (1) SA 102 (A) at 106-107. the death of the person entitled to the habitatio.‟ In Galant the court enforced a right of habitation enjoyed by an heir against a co-heir who had inherited the farm. Sampson J held that the plaintiff, as holder of the right of habitation, can sue for the recovery of that right against any owner of the land subject to the right. These cases demonstrate that an owner‟s rights in his or her property are limited in relation to the right of habitation and, for that matter, by the holder of the right of use [usus] and a usufruct. In this regard therefore the court a quo erred in its findings. [9] I have not been able to find a reported judgment where the holder of a right of habitation had been held to be a „person in charge‟ within the meaning of the PIE Act. But appellant‟s counsel referred us to the unreported judgment of Rogers AJ in October NO & another v Hendricks & another6. There the court had to decide whether the owners of property could be „unlawful occupiers‟ in the context of an eviction application having been brought by the holder of a life usufruct in respect of the property. The applicant‟s late husband had bequeathed the relevant property to their two daughters with the proviso that they should vacate the property once they get married. The will also stipulated a life usufruct in favour of the applicant. As is the case here, strained relations between the applicant and one of her daughters resulted in an eviction application in the high court against the said daughter and her husband. The court framed the question thus: whether the respondents in that case were persons who occupy the property „without the express or tacit consent of the owner of person in charge, or without any other right in law to occupy such [property]‟. Rogers AJ held that „(w)here someone other than the registered owner is the “person in charge” (ie the person with the right to determine who stays on the property), it is the consent of such person rather than the registered owner which is . . . relevant. It follows that the holder of bare dominium could be an unlawful occupier if he or she occupied property without the consent of the usufructuary‟ (own emphasis). 6 October NO & another v Hendricks and another (23189/2011) [2013] ZAWCHC 12 (31 January 2013). [10] The conclusion and reasoning of Rogers AJ is clearly correct. Applied to the present instance, the first respondent‟s bare dominium as owner of the property must in law yield to the appellant‟s right of habitation. For, like usus and usufruct, habitatio is a limited real right, enforceable to the extent of the right itself, against the entire world (hence its registrability against a title deed). Absent any consent from the appellant, either express, tacit or implied, the first respondent is an unlawful occupier of the property. [11] When one has regard to the definition of an „unlawful occupier‟ in s 1, as set out above, the appellant is indubitably a „person in charge‟ of the property. This is so, not only on the basis expounded by Rogers AJ in October, quoted above, but also by virtue of the fact that the appellant plainly derives her „legal authority‟ as contemplated in the definition of „person in charge‟ in s 1 and as set out above, from her right of habitatio. She alone could legally grant permission to a person (even the registered owner) to reside in the property. [12] In the premises, the court a quo has erred in its findings. But that is not the end of the matter. Section 4(7) provides that a court may grant an eviction order only if it is satisfied that it is just and equitable to do so. In order to make that determination, it must consider the factors enumerated in the subsection. In Port Elizabeth Municipality v Various Occupiers7 the court stressed that the phrase „just and equitable‟ entails a more elaborate enquiry than „purely of the technical kind that flow[s] ordinarily from the provisions of land law‟8. And it emphasized that in conducting such an enquiry, „. . . the court must have regard to the interests and circumstances of the occupier and pay due regard to broader considerations of fairness and other constitutional values, so as to produce a just and equitable result‟9. [13] Some of the factors to be considered in terms of s 4(7) are the rights and needs of the elderly, children, disabled persons and households headed 7 Port Elizabeth Municipality v Various Occupiers (CCT 53/03) [2004] ZACC 7; 2005 (1) SA 217 (CC). 8 Id, para 35. 9 Id, para 36. by women. As a result of the outcome of the case the magistrates‟ court did not have to consider s 4(7) at all. Due to the lack of opposing papers, there is a dearth of information on these and other potentially relevant aspects. It appears from the papers that, at the time of the respondents‟ divorce (in 2010), there was one minor child (they had three children). There is no indication on the papers of whether this child and possibly one or both of the others, may still be dependent on their parents. There is also no indication whether anyone of the occupiers of the property is disabled. In all probability that household is headed by a woman, the first respondent, in view of her divorce from the second respondent. In the circumstances, the matter must be remitted to the Somerset West Magistrates‟ Court for a full enquiry as contemplated in s 4(7) into whether it would be just and equitable to order the eviction of the respondents (in effect only the first respondent) and all those occupying the property through them or her (the first respondent). [14] It is necessary to add one last observation. This unseemly family feud is highly regrettable. It is plain on the papers that hard, inflexible positions have been adopted on both sides. Ultimately, no one wins in a matter such as this. The more desirable outcome, beneficial to all concerned, is to bury the hatchet and to co-exist in harmony on the property. One can only hope that good common sense will prevail. [15] The following order is issued: 1. The appeal is upheld, with the first respondent to pay the costs. 2. The order of the court a quo is set aside and substituted with the following: „(a) The appeal is upheld, with the first respondent to pay the costs. (b) The matter is remitted to the Somerset West Magistrates‟ Court for the finalisation of the eviction application brought by the appellant, (the applicant in the magistrates‟ court), in particular for a consideration of the factors set out in section 4(7) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998.‟ ________________________ S A MAJIEDT JUDGE OF APPEAL APPEARANCES For Appellant: R J Steyn Instructed by: Morkel & De Villiers Attorneys, Somerset West Matsepes Inc, Bloemfontein For Respondents: In Person

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF APPEAL 25 November 2015 STATUS: Immediate A HENDRICKS V M HENDRICKS & OTHERS (20519/14) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal (the SCA) today upheld an appeal against an order of the Somerset West Magistrates’ Court, confirmed on appeal to the Western Cape Division of the High Court, Cape Town, refusing an application for eviction. The appellant had sold her house to her son, but a right of habitation was registered in the property’s title deed in the appellant’s favour. The appellant occupied the house with her son (the second respondent) and his wife (the first respondent) whom he had married shortly after taking transfer of the house. Serious problems arose between the appellant and the first respondent, causing the former to temporarily leave the house whereafter she lived elsewhere. The appellant brought an eviction application in the magistrates’ court, which was dismissed on the basis that the first and second respondents were not unlawful occupiers in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the PIE Act). The high court endorsed this finding. On appeal the SCA held that in law the appellant’s right of habitation is stronger than the respondents’ right of ownership. The SCA held further that the appellant, as holder of the right of habitation, is a ‘person in charge’ as defined in section 1 of the PIE Act and, absent her consent, the respondents occupy the house unlawfully. The SCA, while finding that the magistrates’ court and the high court had erred, remitted the matter to the magistrates’ court for a full enquiry to determine whether it would be just and equitable, as contemplated in Section 4(7) of the PIE Act, to evict the first respondent and all those occupying the house through her. -- ends --

1428

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 419/09 In the matter between: NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS Appellant and RAJAN NAIDOO First Respondent ZAKHELE SITHOLE NO Second Respondent DOLLY NAIDOO Third Respondent TWO LINE TRADING 87 (PTY) LTD Fourth Respondent YAMANI PROPERTIES 1015 (PTY) LTD Fifth Respondent Neutral citation: National Director of Public Prosecutions v Naidoo & Others (419/09) [2010] ZASCA 143 (25 November 2010) Coram: MPATI P, CLOETE, PONNAN, BOSIELO and TSHIQI JJA Heard: 25 August 2010 Delivered: 25 November 2010 Summary: Section 26(6) of the Prevention of Organised Crime Act 121 of 1998 – exercise of a court’s discretion in terms of s 26(6)(a) and (b) – does this envisage an order for payment of legal expenses of a defendant from property subject to restraint order but held by another person or entity. _____________________________________________________________ ORDER ______________________________________________________________ On appeal from: North Gauteng High Court, Pretoria. (Poswa J sitting as court of first instance): 1. Leave to appeal is granted. 2. The appeal is upheld with costs including the costs of two counsel. 3. The order of the court below is set aside and is substituted with the following: ‘The application is dismissed with costs including the costs of two counsel where two counsel were employed.’ ______________________________________________________________ JUDGMENT ______________________________________________________________ MPATI P et TSHIQI JA (Cloete, Ponnan and Bosielo JJA concurring) [1] The first respondent, ‘Mr Naidoo’, is an accused in a pending criminal matter in the South Gauteng High Court, Johannesburg. He has been indicted, together with a number of co-accused, on 119 charges of alleged illegal dealing in unwrought precious metals – ranging from theft of platinum, falsification of documents, mining rights and exchange control irregularities. The docket consists of approximately 250 000 pages both in electronic form and hard copy. [2] On 1 October 2004, the appellant, the National Director of Public Prosecutions (‘NDPP’) obtained, ex-parte, a provisional restraint order1 1 Para 1.38 of the order states as follows: ‘1.38 If any Defendant or Respondent satisfies the Court on oath that: 1.38.1 He/she has made full disclosure under oath of all his/her interests in the property subject to the restraint; and against Mr Naidoo in terms of s 26 of the Prevention of Organised Crime Act 121 of 1998 (‘POCA’). On 1 September 2005, the provisional order was confirmed and was extended, by agreement, to include all property owned by Mrs Naidoo, the third respondent, Two Line Trading 87 (Pty) Ltd (‘Two Line’) and Yamani Properties (‘Yamani’), the fourth and fifth respondents respectively. Mrs Naidoo is Mr Naidoo’s ex-wife. They still live together at the same address. She exercises control over Two Line and Yamani. The extension of the order to the property of Two line and Yamani was based on a contention by the NDPP that they had received affected gifts from Mr Naidoo in an amount of R1,5m.2 Whether the property constitutes an affected gift in terms of POCA will be determined by the trial court and is not a subject of the present enquiry. The second respondent was appointed as one of the two curatores bonis in respect of all the property under restraint (s 28). The other has since passed away. [3] On 26 July 2007, Mr Naidoo brought an urgent application in the North Gauteng High Court for an order directing the curator to pay to his attorneys of record a sum of R2 million towards his legal expenses, alternatively an order varying the restraint order against him to the effect that his reasonable legal expenses in the pending criminal matter be paid out of the funds standing to the credit of Two Line and Yamani upon presentation of an account. Mrs Naidoo has consented to the relief sought. The application was 1.38.2 He/she cannot meet the expenses concerned out of his/her unrestrained property, the Curatores bonis may, upon the request of such person, release such of the realisable property within their control as may be sufficient to meet: 1.38.3 The reasonable current and prospective living expenses of such person and his/her family or household; and 1.38.4 The reasonable current and prospective legal expenses of such person in connection with any proceedings instituted against him/her in terms of chapter 5 of the Act or any criminal proceedings to which such proceedings relate.’ 2 Section 12 of POCA defines affected gifts as ‘any gift - (a) made by the defendant concerned not more than seven years before the fixed date; or (b) made by the defendant concerned at any time, if it was a gift – (i) of property received by that defendant in connection with an offence committed by him or her or any other person; or (ii) of property, or any part thereof, which directly or indirectly represented in that defendant’s hands property received by him or her in that connection, whether any such gift was made before or after the commencement of this Act.’ opposed by the NDPP primarily on the basis that s 26(6) of POCA does not envisage payment of legal expenses of a defendant3 from the property of a person or entity other than the defendant because, so the NDPP argued, the other entities have not made full disclosure of their assets as required in terms of s 26(6)(a) and (b) of POCA. [4] The application was granted and the NDPP was ordered by Poswa J, on 26 July 2007, to pay an amount of R1 915 000 from the property held by the curator in terms of the restraint order. Only brief reasons were given for the order and Poswa J undertook to furnish further reasons if called upon to do so. The matter came to this court as an application for leave to appeal against the order of the court below on grounds of constructive refusal of leave by that court. The circumstances that led to the application to this court are the following: [5] On 3 August 2007, the attorney representing the NDPP addressed a letter to Poswa J requesting full reasons for his order and stating that ‘upon consideration of the full reasons client shall decide on whether to approach the honourable court for leave to appeal or not’. On 13 September 2007, the secretary to the judge wrote a letter to the attorneys referring to another letter from them dated 11 September 2007. The secretary stated that he had been asked by the judge to confirm that the latter had been approached by Mr Masilo (the attorney dealing with the matter) a few days after the matter was finalised, requesting reasons for the judgment. The rest of the letter proceeds: ‘His Lordship informed him that furnishing reasons will be tantamount to writing a full reasoned judgment and that he is in no position to do so in the near future. What his Lordship did not tell Mr Masilo was that he hoped to write the judgment during the coming short recess. However, there is no longer such a hope because his Lordship will be doing his recess duty during that week. Whilst the reason for your wanting the reasons for judgment is understandable, there is no chance that his Lordship will write the judgment before the long recess.’ 3 ‘Defendant’ (see s 12) is defined as ‘a person against whom a prosecution for an offence has been instituted, irrespective of whether he or she has been convicted or not, and includes a person referred to in section 25(1)(b)’. [6] It seems that the letter dated 11 September was either copied to the Judge President of the court or a separate letter was sent to him because on 18 October 2007, the Judge President addressed a letter to the attorneys acknowledging their letter of 11 September and undertaking to revert once he had received a response to his letter of enquiry addressed to the judge concerned. The Judge President further requested the attorneys to update him once the reasons had been given. In the meantime and on 27 October, the NDPP filed an application for leave to appeal in terms of Rule 49(1)(b) of the Uniform Rules.4 [7] On 31 October, three months after the order was given, the judge responded to the enquiry raised by the Judge President. Paragraphs two to three of the letter state the following: ‘I do not know when your letter reached my chambers but I became aware of it only after 22 October, 2007, when I was browsing through my mail, whilst being on sick leave. It may be that it arrived whilst my current registrar was out writing examinations and that my attention was not, therefore, timeously drawn to its existence. My apologies. This case was before me during the urgent court proceedings, at the end of July, 2007. I gave brief reasons indicating that I expected that I might be called upon to give more detailed reasons, in the future. A week or so – or even less – after 26 July, 2007, Mr Masilo was in my chambers, asking for full reasons. I did not chastise him for approaching me, a judge, for that purpose and in that fashion. You know, JP, that is unprofessional. I told him that full reasons are – as I had said in court – tantamount to a full judgment, that I did not have time to attend to it before the short recess, as I had other judgments that took precedence to it. It surprises me that Mr Masilo wrote this letter – which, by the way, reached me shortly after 11 September, 2007. Incidentally, something I had forgotten when I spoke to Mr Masilo – I had no short recess, having been in the unopposed motion roll. So, regrettably I cannot touch that 4 Rule 49(1): ‘(b) When leave to appeal is required and it has not been requested at the time of the judgement or order, application for such leave shall be made and the grounds therefor shall be furnished within fifteen days after the date of the order appealed against: Provided that when the reasons or the full reasons for the court’s order are given on a later date than the date of the order, such application may be made within fifteen days after such later date: Provided further that the court may, upon good cause shown, extend the aforementioned periods of fifteen days.’ judgment before January, 2008. I attach a copy of a letter I wrote on 13 September 2007, in reply to Mr Masilo’s letter. My registrar (Francois) and I are uncertain as to whether it was, indeed, forwarded to Mr Masilo, as Francois went for study leave in about that time.’ [8] The contents of the letter show that despite a lapse of a period of three months and despite the fact that the application had been heard in the urgent court, the matter would remain outstanding for another two to three months. Another aspect worth noting is that the letters from the office of the judge show that he was annoyed by the attorney’s persistent requests. One such letter, signed by the secretary of the judge, is dated 14 December 2007. It reads: ‘The copy of the letter you wrote to the Judge President, which you brought to my office today, at about 11:00 on Friday 14 December 2007, refers. I communicated with his Lordship Mr Justice Poswa who is on leave in Durban and reported to him what happened today, including your reluctance to wait for me to refer to correspondence. I have now gone through the correspondence and read it to His Lordship. He has instructed me to enclose copies of some of the correspondence to you, which is really what I meant to read to you while you were here. Herewith faxed are the following letters, from which you ought to have a full picture of the history of this case and its future: (1) a letter to your office dated 13 September, 2007; and (2) a letter addressed to the Judge President dated 31 October, 2007. You will realise, from the second letter, that His Lordship and I were uncertain as to whether or not you received the first of these two letters, which is why it was attached to the second one. His Lordship has requested me to convey to you his displeasure with your attitude, if you received the two letters, because there is nothing more he can explain to you in this regard, neither is there anything he can do pertaining the situation. In the interim, we are unable to find the file up to now, and wonder whether you have not, per chance, removed it. We only raised this with you because it cannot be found. His Lordship has the transcript of proceedings with him and that of his ex tempore judgment. He does, however, require the file.’ [9] On 24 March 2008, a period of eight months after the order was granted, the attorneys for the NDPP addressed yet another letter to the judge persisting with the request for the full reasons. On 14 April, the judge responded, again showing that he was annoyed by the request: ‘Your letter of 28 March, 2008, which was placed on my desk at about 10:30 today – shortly after your clerk delivered it – refers. Since my letter of 31 October, 2007, I have not had opportunity to write full reasons in this matter, simply because of other judgments – ahead of yours – that I have been dealing with. I have requested one month’s leave, in advance of my leave period, to deal with my judgments. This is in view of special circumstances that relate to me only, including my history of periods of sick-leave. Your judgment may be dealt with during that period. Beyond what I am doing, there is nothing I can do to appease you, I find it difficult to keep writing letters about a judgment in respect of which I have already gone out of my way to make written explanations. I suggest you start trusting that I am not simply idling – doing nothing to get to your matter.’ [10] Persistent requests for reasons for an order should not be a source of irritation for a judge. This much was made clear by this court in Pharmaceutical Society of South Africa (Pty) Ltd v Tshabalala-Msimang NO; New Clicks South Africa (Pty) Ltd v Minister of Health 2005 (3) SA 238 (SCA) at 260G to 261H, where the following dictum appears: ‘One does sense that the Court below was irritated because the applicants had the temerity to ask for a quick disposition of the applications for leave. There are some who believe that requests for “hurried justice” should not only be met with judicial displeasure and castigation but the severest censure and that any demand for quick rendition of reserved judgments is tantamount to interference with the independence of judicial office and disrespect for the Judge concerned. They are seriously mistaken on both counts. First, parties are entitled to enquire about the progress of their cases and, if they do not receive an answer or if the answer is unsatisfactory, they are entitled to complain. The judicial cloak is not an impregnable shield providing immunity against criticism or reproach. Delays are frustrating and disillusioning and create the impression that Judges are imperious. Secondly, it is judicial delay rather than complaints about it that is a threat to judicial independence because delays destroy the public confidence in the judiciary. There rests an ethical duty on Judges to give judgment or any ruling in a case promptly and without undue delay and litigants are entitled to judgment as soon as reasonably possible’. (The footnotes have been omitted.) [11] There was no further exchange of correspondence for two months. Ten months later, on 28 May 2008 and again on 17 June, the attorneys wrote further letters to the judge enquiring about progress. Copies of the letters were sent to the Judge President. On 17 June, the Judge President responded and informed the attorneys that he had referred their letter to the judge with a request that the Judge President’s office and the parties be informed when judgment would be delivered. It appears that none of these letters elicited any response from the judge. [12] On 9 September, after a period of another two months, and a period of close to 13 months after the order, the attorneys again addressed a letter to the judge enquiring about progress. A copy was sent to the Judge President. It appears that after the exchange of this correspondence the application for leave to appeal was set down for 23 October 2007. This is evident from the following letter from the attorneys to the Judge President dated 28 October 2008: ‘The above matter has reference specifically the attached letter dated 9th September 2008 from our office. On the 23 October 2007 we made an application for leave to appeal in terms of Rule 49(1)(b) see annexure “A”. However the application was never proceeded with because of the long awaited response for judgment from the Honourable Justice Poswa. It is our client’s instructions to request the honourable Judge President to place the matter on the roll before a new judge because the delay by Justice Poswa has adversely affected the criminal prosecution in this matter. Your urgent attention to this matter will be appreciated.’ [13] It is difficult to understand why the judge failed to deal with the application for leave to appeal at that stage. The reasons he had undertaken to furnish had not been forthcoming for a period of approximately 15 months and the parties were suffering prejudice. What was required of him was simply to make a decision as to whether or not he believed there was a reasonable prospect that another court would come to a different conclusion.5 The failure to deal with the application for leave was in itself another regrettable omission by the judge. [14] On 12 November 2008, the Judge President acknowledged the letter and attached his own letter of even date addressed to the judge. He further requested the attorneys to inform him if reasons were not furnished by the end of November. The letter (dated 12 November from the Judge President) to the judge informed him that if the reasons were not forthcoming by the end of November, he would unfortunately submit the query to the Judicial Service Commission (‘JSC’). Clearly (in this letter), the Judge President was conveying his own frustration about the sequence of events. Even after this, the judge did not seize the opportunity because, on 1 December, the attorneys addressed yet another letter to the Judge President informing him that they were disappointed to inform him that the judge had failed to furnish the reasons by the end of November. They further requested the Judge President to refer the matter to the JSC as stated in his letter of 12 November. On 14 January 2009, the Judge President addressed a letter to the attorneys informing them that the matter had been reported to the JSC by his letter dated 10 December and requested them to inform him when the reasons had been furnished. On 3 March, the attorneys addressed a letter to the Judge President highlighting the prejudice suffered by their client as a result of the delay, and in doing so motivated their request for the matter to be enrolled afresh before another judge in terms of Rule 49(1)(e) of the Uniform Rules of Court.6 [15] On 18 March 2009, the Judge President responded, stating that it would not be possible to place the matter on the roll as suggested and reiterated that the matter had been reported to the JSC and that he expected 5 A judge is not obliged to furnish reasons for such an order. In certain circumstances it may be necessary and certainly helpful to do so. (Botes v Nedbank Ltd 1983 (3) SA 27 (A) at 28E- F). 6 Rule 49(1)(e) provides that leave to appeal ‘shall be heard by the judge who presided at the trial or, if he is not available, by another judge of the division of which the said judge, when he so presided, was a member’. the JSC to respond in due course. On 7 May, the attorneys, as a last resort, addressed a letter to the judge outlining the history of the matter and informing him that they had instructions to approach this court directly for an application for leave to appeal on the basis that the failure to furnish reasons should be treated as a refusal of leave. In the alternative they enquired whether the judge was willing to permit them to argue the application for leave without his full reasons. There was no response to this letter. [16] It is against this background that an application, in terms of s 20(4)(b) of the Supreme Court Act 59 of 19597, was brought directly to this court for leave to appeal on the basis that the delay in furnishing the reasons and the failure to deal with the application for leave amounted to a constructive refusal of leave to appeal. This Court, on 11 September 2009, referred the application for oral argument in terms of s 21(3)(c)(ii),8 with a further direction that the parties be prepared to argue the merits of the appeal if called upon to do so. [17] At the outset of the application, counsel for the respondents readily conceded that the delay, coupled with the failure to deal with the application for leave to appeal, amounted to a constructive refusal to grant leave. This was a sensible concession by counsel. [18] The importance of furnishing reasons for a judgment is a salutary practice. Judicial officers express the basis for their decisions through reasoned judgments. A statement of reasons gives assurance to the parties and to any other interested member of the public that the court gave due consideration to the matter, thereby ensuring public confidence in the administration of justice. 7 Section 20(4)(b) of the Supreme Court Act provides that ‘in any other case, with the leave of the court against whose judgment or order the appeal is to be made or, where such leave has been refused, with the leave of the appellate division’. 8 Section 21(3)(c)(ii) provides: ‘The judges considering the petition may order that the application be argued before them at a time and place appointed, and may, whether or not they have so ordered - … (ii) refer the application to the appellate division for consideration, whether upon argument or otherwise, and where an application has been so referred to the appellate division, that division may thereupon grant or refuse the application’. [19] In Botes v Nedbank Ltd (supra) this court remarked that a reasoned judgment may well discourage an appeal by the loser and that the failure to state reasons may have the effect of encouraging an ill-founded appeal. Coincidentally, in their first letter dated 3 August 2007, the attorneys for the NDPP stated that they required the full reasons in order to decide whether or not to apply for leave to appeal – clearly showing that the reasons would help inform the future conduct of the matter. The delay in furnishing the reasons deprived them of the opportunity to exercise their options. The importance of furnishing reasons for a judgment was again stressed by Navsa JA at para 32 of his judgment in Road Accident Fund v Marunga,9 where the learned judge of appeal referred with approval to an extract from an article by the former Chief Justice of the High Court of Australia, the Rt Honourable Sir Harry Gibbs.10 [20] There may be instances where it is unavoidable to give brief reasons with an undertaking to provide full reasons later or when requested to do so. Because of the several complications which may arise if this practice is adopted, it should be utilised sparingly. Such complications were highlighted by the Hon MM Corbett in the following manner:11 ‘The true test of a correct decision is when one is able to formulate convincing reasons (and reasons which convince oneself) justifying it. And there is no better discipline for a judge than writing (or giving orally) such reasons. It is only when one does so that it becomes clear whether all the necessary links in a chain of reasoning are present; whether inferences drawn from the evidence are properly drawn; whether the relevant principles of law are what you thought them to be; whether or not counsel’s argument is as well founded as it appeared to be at the hearing (or the converse); and so on. The practice referred to (that is, an immediate order, reasons later) leaves no room for afterthought or changing one’s mind about the case. You should follow it only when you are convinced that no amount of subsequent 9 2003 (5) SA 164 (SCA). 10 ‘The citizens of a modern democracy – at any rate in Australia – are not prepared to accept a decision simply because it has been pronounced, but rather are inclined to question and criticise any exercise of authority, judicial or otherwise. In such a society it is of particular importance that the parties to litigation – and the public – should be convinced that justice has been done, or at least that an honest, careful and conscientious effort has been made to do justice, in any particular case, and the delivery of reasons is part of the process which has that end in view.’ Australian Law Journal (vol 67A) (1993) at 494-502. 11 The Hon MM Corbett ‘Writing a Judgment’ (1998) 115 SALJ 116 p 118. consideration or research, and more particularly the actual writing of the reasons, can possibly lead one to a different conclusion. Another disadvantage of the practice of giving an order, reasons later, is the delay which often occurs in the furnishing of those reasons. I think that sometimes there is a feeling that the parties have their order and there is no urgency about the reasons. This is the first step down that slippery slope of procrastination, which is part of the law’s notorious delay. My advice is that you treat such reasons with the same urgency and expedition as you devote to your ordinary reserved judgment. If anything, they should enjoy priority. There is nothing worse than allowing a matter to become stale; to lose one’s grasp of the case and one’s recollection of the reasons which prompted the order. Moreover, the parties are still just as interested in the reasons despite the order having been granted; and further proceedings may be contemplated, which could depend on the reasons and the way in which they are formulated.‘ [21] The delay and the ‘slippery slope of procrastination’ against which the former Chief Justice cautioned, patently characterised the present matter. It is regrettable that no positive response was forthcoming even after the intervention of the Judge President who was clearly placed in a very compromising position. [22] In approaching this court for leave to appeal, the NDPP did so as a last resort. There was clearly nothing more that could be done. The unreasonable delay in dealing with the application for leave to appeal was prejudicial to the parties. During a meeting held between the prosecutors and the legal representatives of Mr Naidoo’s co-accused, it transpired that the outcome of the appeal was awaited by the other accused who would decide whether to bring similar applications or utilise the services of the Legal Aid Board for their legal expenses. [23] This court has on occasion granted leave on the basis of a constructive refusal by a trial court to grant leave. In Minister of Health NO v New Clicks South Africa (Pty) Ltd (Treatment Campaign as amici curiae)12 the court stated: ‘It must be accepted, however, that there may come a time when a delay in resolving an application for leave to appeal amounts to a constructive refusal of the application, entitling the aggrieved litigant to apply to the Appeal Court to grant leave itself. What constitutes an unreasonable delay will depend on the circumstances of the case.’ [24] We now consider whether leave in the present matter should be granted. This entails a consideration of the applicant’s prospects of success on appeal. [25] The issue on the merits is whether the provisions of POCA confer upon a high court the power to provide for the payment of a defendant’s reasonable legal expenses from a source other than the restrained assets held by that defendant. It is convenient to set out the provisions of POCA which, in our view, have a bearing on this issue. [26] Section 14: ‘(1) Subject to the provisions of subsection (2), the following property shall be realisable in terms of this Chapter, namely - (a) any property held by the defendant concerned; and (b) any property held by a person to whom that defendant has directly or indirectly made any affected gift. (2) Property shall not be realisable property if a declaration of forfeiture is in force in respect thereof.’ Section 26(1): ‘The National Director may by way of an ex parte application apply to a competent High Court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property to which the order relates.’ 12 2006 (2) SA 311 (CC) p 317. Section 26(2): ‘A restraint order may be made- (a) in respect of such realisable property as may be specified in the restraint order and which is held by the person against whom the restraint order is being made; (b) in respect of all realisable property held by such person, whether it is specified in the restraint order or not; (c) in respect of all property which, if it is transferred to such a person after the making of the restraint order, would be realisable property.’ Section 26(6): ‘(6) Without derogating from the generality of the powers conferred by subsection (1), a restraint order may make such provision as the High Court may think fit - (a) for the reasonable living expenses of a person against whom the restraint order is being made and his or her family or household; and (b) for the reasonable legal expenses of such person in connection with any proceedings instituted against him or her in terms of this Chapter or any criminal proceedings to which such proceedings may relate, if the court is satisfied that the person whose expenses must be provided for has disclosed under oath all his or her interests in property subject to a restraint order and that the person cannot meet the expenses concerned out of his or her unrestrained property.’ [27] There is an obvious tension between the need to prevent the dissipation of assets held by an accused person that allegedly constitute the proceeds of crime and the need to ensure that that person’s fair trial rights, particularly the presumption of innocence, are not imperilled. It is the reconciling of this tension that is sought to be achieved by s 26(6). In the normal course, but for the restraint order, Mrs Naidoo, Two Line and Yamani would have been free to provide Mr Naidoo with such funds as they saw fit to enable him to fund his criminal defence. In effect what we are called upon to decide is whether anything contained in s 26 precludes them from now doing so. [28] The appellant submitted that Mr Naidoo could only approach the court for the relief that he sought in terms of s 26(6)(b). In terms of that subsection, so the submission went, the court may only make provision for legal expenses out of his own property and not property in the hands of one or more of the other respondents. [29] Poswa J understood Mr Naidoo’s counsel to be submitting, in essence, that because the property concerned constitutes affected property it belongs to Mr Naidoo. In accepting this argument the learned judge said – ‘The effect of the provisional order is, therefore, that all the property restrained belongs to the applicant [Mr Naidoo], until such time that the criminal action or the contemplated civil action is finalised. That is an order sought and obtained by the first respondent [the NDPP]. In the circumstances, I do not understand how the first and second respondents [the NDPP and the curator bonis] can claim that the property that the applicant [Mr Naidoo] has identified, for purposes of the present application, is the third respondent’s [Mrs Naidoo’s]. It is true that the applicant [Mr Naidoo], in the current application, described the property as the third respondent’s [Mrs Naidoo’s]. That does not, however, alter its current legal status in terms of the restraint order, in my view.’ In our view, this process of reasoning by the court a quo was incorrect. [30] POCA does not provide that once property held by a person to whom a gift was made becomes the subject of a restraint order on the grounds that it constitutes an ‘affected gift’, it is deemed to be the property of the defendant who made the gift. It was suggested before us that one could possibly come to this conclusion on the basis of the meaning of the words ‘realisable property’ in ss 14 and 26(2) of POCA. We disagree. ‘Realisable property’ is defined in s 14 as ‘(a) any property held by the defendant concerned’; and ‘(b) any property held by a person to whom that defendant has directly or indirectly made any affected gift’. The aim of the definition is therefore to spread the net wider so as to cover not only property held by a defendant but also property held by someone to whom such defendant has made a gift. The definition does not alter the law as to ownership. [31] The purpose of POCA is, inter alia, to ‘introduce measures to combat organised crime,’ and ‘to provide for the recovery of the proceeds of unlawful activity’. A restraint order cannot be made in respect of any property. Section 26(1) of POCA confers on a high court the power to make an order prohibiting any person ‘from dealing in any manner with any property to which the order relates’. That order is termed a ‘restraint order’.13 Its ambit is regulated by s 26(2), which provides that it (the restraint order) may be made in respect of realisable property ‘which is held by the person against whom the restraint order is being made’ (s 26(2)(a)). (Our underlining.) So, the person who is prohibited from ‘dealing in any manner with any property’, ie the person against whom the restraint order is made, is the person who holds the property that is the subject of the restraint order. It follows that a restraint order can only be made, in terms of POCA, against a person who is the holder of property alleged to be realisable property (s 26(2)(a) and (b)), or becomes the holder after the restraint order is made (s 26(2)(c)). [32] The plain grammatical meaning of s 26(6)(b) read with s 26(6)(a) is that a restraint order may make provision for the legal expenses of ‘a person against whom the restraint order is being made’ – not for the legal expenses of a third person against whom a restraint order is also being made at the same time, and which must, for the reasons given in the previous paragraph, be in respect of property held by the latter. So the restraint order against Mr Naidoo may make provision for his legal expenses. But the restraint orders made against Mrs Naidoo and the companies she controls cannot make provision for Mr Naidoo’s legal expenses as he is not the person against whom those restraint orders were made. [33] A defendant who wishes property under restraint to be released for his or her reasonable legal expenses in connection with the proceedings instituted against him or her in terms of POCA, is required to satisfy the court that he or she has disclosed under oath all his or her interest in such property (s 26(6)). But the ‘interest’ to be disclosed is the interest in realisable property 13 Restraint order is defined in Chapter 5 of POCA as ‘an order referred to in section 26(1)’. under restraint ‘which is held by the person against whom the restraint order is being made’ (s 26(2)(a)). [34] It is common cause that the property which Mr Naidoo seeks to be released for his reasonable legal expenses is not subject to a restraint order against him. The provisional restraint order granted by De Villiers J in October 2004 states that it relates to realisable property ‘so far as it remains property held by the Defendants and any of the Respondents’ (paragraph 1.1.1). (Our underlining.) The relevant provisions of the order granted by Rabie J on 1 September 2005 by agreement pursuant to an application by nine applicants, to which Mrs Naidoo, Two Line and Yamani were party, following the grant of the provisional restraint order, state that – ‘1. It is declared that the assets of the First [Mrs Naidoo], Second, Fourth [Two Line], Fifth [Yamani] . . . Applicants are subject to the provisional restraint order granted by De Villiers J . . . on 1 October 2004; . . .’ ‘5. The First [Mrs Naidoo], Second, Fourth [Two Line], Fifth [Yamani] . . . Applicants undertake not to utilise the property subject to restraint in terms of this order in a manner that would dissipate, encumber or diminish in any way the value of the said property; . . .’14 Clearly, therefore, the assets of Mrs Naidoo and of Two Line and Yamani, which would include affected gifts, became the subject of a restraint order against them and not against Mr Naidoo. It follows that Mr Naidoo cannot invoke the provisions of s 26(6) to obtain the release, for his legal expenses, of assets which are the subject of a restraint order made against Mrs Naidoo, Two Line and Yamani. 14 The First, Fourth and Fifth applicants referred to in the order are the third, fourth and fifth respondents in this appeal. [35] The following order is accordingly made: 1. Leave to appeal is granted. 2. The appeal is upheld with costs including the costs of two counsel. 3. The order of the court below is set aside and is substituted with the following: ‘The application is dismissed with costs including the costs of two counsel where two counsel were employed.’ _______________________ L MPATI PRESIDENT _______________________ Z L L TSHIQI JUDGE OF APPEAL APPEARANCES APPELLANT: E C LABUSCHAGNE SC (with him E NDALA) Instructed by Masilo Inc, Pretoria; Naudes Attorneys, Bloemfontein. RESPONDENTS: W VERMEULEN SC (with him N REDMAN) Instructed by Yusuf Ismail Attorneys, Pretoria; Rossouws Attorneys, Bloemfontein.

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 25 November 2010 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. National Director of Public Prosecutions v Naidoo & 4 others (419/09) [2010] ZASCA 143 (25 November 2010) Media Statement The Supreme Court of Appeal has upheld an appeal by the National Director of Public Prosecutions in which the NDPP argued that Section 26 of POCA should be restricted to the property of the defendant/accused and should not be interpreted to refer to property of another person. The Court held that the plain grammatical meaning of s 26(6)(b) read with s 26(6)(a) is that a restraint order may make provision for the legal expenses of ‘a person against whom the restraint order is being made’ – not for the legal expenses of a third person against whom a restraint order is also being made. --- ends ---

1353

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 155/09 WILMA EMMERENTIA VAN RENSBURG NO First Appellant PHILLIPUS STEPHANUS VAN RENSBURG NO Second Appellant (in their capacities as trustees for the time being of the Hobie Trust) and PERAPANJAKAM NAIDOO NO First Respondent PURSOTHAM NAIDOO NO Second Respondent SHASHI NAIDOO NO Third Respondent ANTHOSH NAIDOO NO Fourth Respondent (in their capacities as trustees for the time being of the Shan Trust) _________________________________________________________________________________________________ Case no: 455/09 PERAPANJAKAM NAIDOO NO First Appellant PURSOTHAM NAIDOO NO Second Appellant SHASHI NAIDOO NO Third Appellant SESHAMMA MOODLEY NO Fourth Appellant ANTHOSH NAIDOO NO Fifth Appellant (in their capacities as trustees for the time being of the Shan Trust) and WILMA EMMERENTIA VAN RENSBURG NO First Respondent PHILLIPUS STEPHANUS VAN RENSBURG NO Second Respondent MEC FOR HOUSING, LOCAL GOVERNMENT AND TRADITIONAL AFFAIRS Third Respondent EASTERN CAPE PROVINCE NELSON MANDELA METROPOLITAN MUNICIPALITY Fourth Respondent THE REGISTRAR OF DEEDS Fifth Respondent _________________________________________________________________________________________________ Neutral citation: Van Rensburg NO v Naidoo NO (155/09); Naidoo NO v Van Rensburg NO (455/09) [2010] ZASCA 68 (26 May 2010) CORAM: Navsa, Heher, Van Heerden, Mhlantla JJA and Saldulker AJA HEARD: 3 May 2010 DELIVERED: 26 May 2010 SUMMARY: Two linked appeals ─ nature of rights derived from restrictive conditions in title deed stated to be subject to alteration discussed ─ zoning regulations and town planning schemes not overriding restrictive conditions ─ the Removal of Restrictions Act 84 of 1967 not applicable ─ power of Member of the Executive Council of the Eastern Cape Province to alter or amend restrictive conditions ─ delegation not properly proved ─ decision made without reference to written objections in any event liable to be set aside ─ power of court of the same division and of equal jurisdiction to set aside or otherwise interfere with order intended to be final in effect discussed ─ held that in the prevailing circumstances the court had no such power either by way of inherent jurisdiction or in terms of the Uniform rules of court ─ held that justice required the prior order to be executed. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Eastern Cape High Court, Port Elizabeth (Van der Byl AJ and Dambuza J, each sitting as court of first instance in two separate but related matters). 1. In Wilma van Rensburg NO & another v Perapanjakam Naidoo NO & others (case no 155/09): (a) the appeal is upheld with costs including the costs of two counsel. (b) the order of the court below is set aside in its entirety and substituted as follows: ‘The application is dismissed with costs including the costs of two counsel.’ 2. In Perapanjakam Naidoo NO & others v Wilma van Rensburg NO & another (case no 455/09): (a) the appeal is dismissed with costs including the costs of two counsel. (b) the appellants’ legal representatives are precluded from recovering any costs from the appellants related to the unnecessary and duplicated parts of the record (one third thereof). ________________________________________________________________ JUDGMENT ________________________________________________________________ NAVSA et MHLANTLA JJA: (Heher, Van Heerden JJA and Saldulker AJA concurring) [1] These two linked appeals, which are before us with the leave of this court have been consolidated, and are the culmination of protracted litigation between feuding neighbours. The two appeals necessitate consideration of three judgments of the Port Elizabeth High Court. In the first, Froneman J had ordered that approvals granted by the Municipality, to legitimise construction work, which had already been completed in the north eastern corner of an erf in Summerstrand Township, Port Elizabeth, be set aside and that the entire northern building on that erf be demolished, as well as the top storey and staircase leading to it of another building situated in the north-western corner of the erf, within 60 days of the date of the order. He also ordered an abatement of a nuisance emanating from that erf.1 In the second high court judgment, delivered on 8 July 2008, which is the subject of the first appeal before us under case number 155/2009, Van der Byl AJ, purported to declare parts of Froneman J’s judgment, delivered on 30 March 2007, to be of no force and effect and made certain allied orders. In the third judgment, delivered on 2 June 2009, which is the subject of the second appeal under case number 455/2009, Dambuza J reviewed and set aside a decision of the Member of the Executive Council of Local Government & Traditional Affairs, Eastern Cape Province (the MEC) to remove restrictive title deed conditions in relation to the erf referred to above. [2] In the first appeal, the power of a high court, not sitting as a court of appeal, to suspend or nullify final orders granted in the same division, in relation to the issues referred to in the preceding paragraph and to make related orders, falls to be considered. In the second appeal the question is whether the MEC’s decision was rightly reviewed and set aside. The appeal against the order of Van der Byl AJ is referred to as the suspension appeal. The appeal against the order of Dambuza J is referred to as the review appeal. [3] The opposing litigating trustees are as follows. The trustees for the time being of the Shan Trust are Perapanjakam Naidoo, her husband Purshotam Naidoo and three other members of their family. The trustees for the time being of the Hobie Trust are Phillippus and Wilma Van Rensburg, who are husband 1 The judgment of Froneman J is reported as Van Rensburg NO v Nelson Mandela Metropolitan Municipality 2008 (2) SA 8 (SE). and wife. The litigating parties are referred to as the Shan and Hobie Trusts respectively. [4] The Hobie Trust is the owner of erf 104, situated at 4 Sixth Avenue, Summerstrand, Port Elizabeth. The Shan Trust owns erf 105, situated at 3 Seventh Avenue, Summerstrand, Port Elizabeth. The Hobie Trust property abuts the northern boundary of the Shan Trust erf. The Shan Trust conducts the business of a guest house on erf 105. [5] The litigation between the parties relates to certain structures on erf 105 that were constructed, extended and renovated over time by the Shan Trust, in furtherance of the guest house business it conducts on the premises. The following issues arise: (a) whether erf 105 could be used for purposes other than that of a private residential dwelling; (b) the legality of authorisations to conduct a guest house business, granted by the Nelson Mandela Metropolitan Municipality (the Municipality); (c) the legality of approvals of building plans by the Municipality to regularise buildings already constructed on erf 105; and (d) the power of the MEC, to alter or amend restrictive conditions in a title deed, more particularly in relation to erf 105. [6] As will become apparent, chronology and sequence are crucial to a proper appreciation of the issues in both matters. At the outset it is necessary to deal with the history of Summerstrand, the township in Port Elizabeth in which the properties in question are located. Although there appears to be some confusion about the date of the establishment of Summerstrand Township, there is force in the submissions on behalf of the Hobie Trust, that relevant documentary evidence tends to show that the township was established by the Administrator of the then Cape Province at a time when the Townships Ordinance 13 of 1927 was in force. The Townships Ordinance 33 of 1934 repealed the earlier Ordinance, with effect from 1 January 1935. Section 63 of the 1934 Ordinance provided that any matter pending under the 1927 Ordinance and uncompleted should be completed in terms of that earlier Ordinance. [7] At the time of the establishment of Summerstrand Township the following restrictive conditions were inserted in title deeds in favour of all erf-holders: ‘C. SUBJECT FURTHER to the following conditions contained in Deed of Transfer T999/1944 imposed by the Municipality of the City of Port Elizabeth in terms of the provisions of Township Ordinance No 13 of 1927 in favour of itself and any erf-holder in the Summerstrand Extension Township (and subject to alteration and amendment by the Administrator): (a) That this erf shall be for residential purposes only. (b) That only one house designed for the use as a dwelling for a single family, together with such outbuildings as are ordinarily required to be used therewith, be erected on this erf. (c) That no more than half the area of this erf shall be built on. (d) That no building or structure or any portion thereof except boundary walls and fences shall be erected nearer to the street line which forms a boundary of this erf than the building indicated on the diagram of this erf.’ (Our emphasis.) [8] It is now necessary to deal with the history of material events in relation to erf 105, which regrettably, is lengthy and complex. The Hobie Trust became owner of erf 104 in 1989. The Shan Trust became owner of erf 105 in 1996 and at that stage there was only one main dwelling situated on its southern boundary with a double garage outbuilding on the western edge. [9] The Shan Trust conducted the business of a guest house on erf 105 by virtue of a special consent given to it by the Municipality, ostensibly in terms of its Zoning Scheme Regulations. The first consent was provided on 28 March 1996 and limited the Shan Trust to a maximum of four bedrooms for hire. On 17 September 2002 the Shan Trust applied for a further departure from the Zoning Scheme Regulations to operate a guest house with a total of 11 rooms for hire. The Hobie Trust, together with five other owners and residents in the vicinity, objected to the application. Almost two years later, on 28 July 2004, the Municipality resolved to grant the Shan Trust’s application, subject to certain conditions. An appeal by the Hobie Trust to the MEC against that decision was unsuccessful. [10] Extensive improvements on erf 105 were embarked on by the Shan Trust from the time that it became owner. These were effected in three phases. It appears that at almost every stage of the development the plans and approvals followed the construction work on the premises. In respect of improvements effected during 2000 it is admitted by the Shan Trust that no building plans were approved by the Municipality until 2004. The Shan Trust’s contention that it effected the improvements in the bona fide belief that the plans had been approved before construction commenced has an unconvincing and hollow ring to it. [11] An outside staircase extending an existing one, in a building on the north- western side of the erf leading to the roof of a second storey, was not depicted on the approved plan. Once again, the Shan Trust’s explanation that this was an oversight on the part of the architect, in our view, is too glib. In 2006, and after much litigation, the Shan Trust sought to overcome this problem by submitting a site development plan in pursuit of ex post facto approval. [12] It is also clear that, prior to the special consent granted to it by the Municipality to extend its guest house facilities from four rooms to 11, the Shan Trust had already been letting and hiring 11 rooms. It is disingenuous to suggest, as the Shan Trust does, that it had lodgers in the additional rooms rather than guests. [13] During 2004, after an application was launched in the Port Elizabeth High Court by the Hobie Trust to interdict the Shan Trust from using erf 105 unlawfully, officials of the Municipality inspected the property and found that rooms were unlawfully used on a permanent basis as accommodation for post-graduate students, that a staircase extended beyond the building line and that a number of kitchens had been installed within the existing buildings, contrary to the zoning regulations. The Municipality demanded that the Shan Trust cease the unlawful use of the property and ensure that the construction work complied with zoning regulations within 30 days. [14] As a result of the attitude adopted by the Municipality, and in the hope that the matter would be resolved to its satisfaction, the Hobie Trust withdrew its application for an interdict. The Shan Trust did not, however, satisfy all of the demands made upon it by the Municipality. This led to a further application by the Hobie Trust in the Port Elizabeth High Court, in which it sought, inter alia, an order for the demolition of the offending buildings on erf 105. [15] The Municipality initially opposed the application and the Shan Trust decided in the light thereof, not to do so. However, one day before the answering affidavit by the Municipality was due to be filed, it made a demand upon the Shan Trust, similar to its previous demand referred to in para 13 above. According to the Shan Trust it responded by submitting new plans in an attempt to legitimise the buildings already constructed. The Municipality denied having received those plans. [16] During February 2007, and before the application was heard, the Municipality withdrew its special consent to a departure from the zoning regulations, in terms of which it had granted the Shan Trust permission to conduct a guest house with 11 rooms. It subsequently also withdrew its opposition to the application by the Hobie Trust. In response, the Shan Trust entered the fray and sought a postponement from Froneman J, in order to do the following: (a) to take the necessary steps to review the Municipality’s withdrawal of its special consent; (b) to make an application for the removal of the restrictive conditions from the title deed of Erf 105 Summerstrand; (c) to resubmit a detailed site development plan and building plans in respect of improvements to Erf 105 Summerstrand. At the same time the Shan Trust undertook, in an apparent attempt at appeasement, to abate the nuisance complained of. [17] Froneman J, characterised the purpose of the postponement application as follows: ‘[It] is in essence to give it time to construct a defence to the claims in the main application.’ The learned judge stated that the Shan Trust was required to show that it prima facie had a bona fide defence. He took the view that, even though the Hobie Trust had raised the restrictive title conditions in the main application set out in para 8 above as a ground for relief for the first time in supplementary affidavits at the end of October 2006,2 the Shan Trust had done nothing in this regard until it sought a postponement in March 2007. Froneman J also took into account that the Shan Trust had failed to provide any legal or factual basis for the proposed review of the Municipality’s decision to withdraw its special consent and for the setting aside of the restrictive title conditions. Consequently, the learned judge refused the postponement and ordered the Shan Trust to pay the costs, including the costs of two counsel. [18] In the main application, Froneman J had regard to the relevant restrictive conditions. In essence they provide that the erf be used for residential purposes only, that only one single house dwelling for use by a single family and ordinary outbuildings required for such use may be built on the erf, and that no garage other than for ordinary use for persons residing on the erf may be erected. The learned judge stated that these kinds of restrictive conditions took precedence over the Municipality’s zoning and planning schemes and that this followed from their characterisation in our case law as praedial servitudes in favour of other erf 2 Initially the grounds on which the Hobie Trust relied were: (a) the non-compliance with the National Building Regulations and Standards Act 103 of 1977, (b) contraventions of Zoning Scheme and Land Use Planning regulations and (c) the irregular granting by the municipality of special consent to use the buildings as part of a guest house. holders.3 He concluded that any possible permission by the Municipality to build or use buildings contrary to the restrictive conditions could not be lawful. Froneman J went on to make the orders referred to in para 5 above. He refused leave to appeal against his judgment. [19] An application for leave to appeal against the judgment of Froneman J was refused by this court on 25 September 2007 and in due course by the Constitutional Court on 1 November 2007. [20] In the meanwhile on 27 June 2007, approximately three months after the judgment of Froneman J, the Shan Trust applied to the Premier of the Eastern Cape for the removal of the applicable restrictive conditions. On 17 July 2007 the Hobie Trust objected in writing to the application by the Shan Trust and substantiated its opposition. [21] On 11 October 2007, the MEC, purporting to act under delegated authority from the Premier of the Eastern Cape Province (the successor to the erstwhile Administrator), granted consent for the removal of Condition C (a), (b), (c) and (d) from Title Deed No T26430/1996 in respect of erf 1054 and substituted therefor the following condition: 'That this erf shall be used for residential purposes, including for a guesthouse, only, subject to the Provisions of the municipality's guesthouse policy and applicable zoning scheme.' It is common cause that when the MEC made the decision to remove the restrictive conditions, she did not have before her the written objection by the Hobie Trust. [22] On 7 November 2007 the Hobie Trust requested reasons for the MEC’s decision to remove the restrictive conditions. Reasons were supplied on 1 February 2008. 3 Op cit note 1 at para 8. 4 Set out in para 7. [23] The Shan Trust resorted to yet further litigation. On 8 January 2008 an application was launched in the Port Elizabeth High Court, in terms of which it sought an order setting aside parts of the order of Froneman J, alternatively an order that parts of his order be declared to be of no force and effect. Furthermore, an order was sought suspending that part of Froneman J’s order in terms of which the Shan Trust was required to demolish and remove the top storey and the accompanying staircase of the building in the north western corner of erf 105, pending a decision of the Municipality in relation to the site development plan that it intended presenting for approval. From the perspective of the Shan Trust this would legitimise the offending structures, ex post facto. Further relief, irrelevant for present purposes, was also sought. This application was heard by Van der Byl AJ. [24] On 26 March 2008, before the Shan Trust’s application was ripe for hearing, the Hobie Trust instituted proceedings in the Port Elizabeth High Court to have the MEC's decision reviewed and set aside, inter alia, on the grounds that: (a) the decision amounted to an abrogation of the real and registered praedial servitude rights of the Hobie Trust as well as of other residents in Summerstrand; (b) the decision was not properly made in terms of the Removal of Restrictions Act 84 of 1967 (the Act); (c) the decision constituted administrative action as defined in the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and fell to be set aside on the bases set out above as well as it having been taken without hearing the affected parties, including the Hobie Trust and other residents in Summerstrand; (d) the objections of the Hobie Trust and other affected residents were not considered; (e) the MEC lacked statutory authority to make the decision removing the restrictive conditions. [25] Before the Hobie Trust’s application was heard, judgment was delivered in the Shan Trust application referred to in para 23 above. Van der Byl AJ made the following orders: ‘1. It is declared that, because of the removal of the restrictive conditions contained in paragraph C of Title Deed No. T 26430/1996 in respect of Erf 105, Summerstrand, Port Elizabeth, by virtue of a decision of the [MEC] taken on 11 October 2007, paragraphs 1 and 2 of the order granted in Case No. 1668/06 on 30 March 2007 have become of no force and effect. 2. The [Municipality] is ordered to consider and process the site development plan and building plans, Annexure R to the founding affidavit, submitted to it by the Applicants on 7 June 2006 (of which copies have been submitted to it on 20 March 2007). 3. Paragraph 3 of the order granted by Froneman J on 30 March 2007 is suspended in terms of Rule 45A until such time as the [Municipality] has finally considered and processed the site development plan and building plans referred to in paragraph 2 of this order, whereafter the parties, depending on the outcome of such consideration and processing, are granted leave to approach this Court on the same papers, supplemented as the circumstances may require, for further appropriate relief. 4. The [Hobie Trust] is ordered to pay the costs of this application including the costs attendant upon the employment of two counsel.’ [26] Van der Byl AJ took into account that the Hobie Trust’s review application was pending. He noted, with dismay that the Hobie Trust had refused to agree to a postponement of the Shan Trust’s suspension application to allow for the finalisation of the review application. In dealing with the merits of the application, the learned judge had regard to numerous decided cases dealing with the maxim cessante ratione legis cessat ipsa lex, which literally translated reads as follows: ‘If the reason for a law falls away, the law itself falls away.’ He considered whether it applied to interpretation of statutes only or whether it could be applied in relation to judgments and orders of court and concluded that a judgment and order may fall away if the causa fell away. [27] Van der Byl AJ said the following in relation to the orders issued by Froneman J: ‘I am in grave doubt whether Froneman J would have, had the existence of the restrictive conditions been the only issue on which he was called upon to consider the demolition of the northern building, issued the orders in question if the restrictive conditions had at the time of his judgment already been removed, albeit after the northern building had already been erected.’ [28] The learned judge concluded that the removal of the restrictive conditions removed the causa on which the orders were based and that the execution of the orders had become unenforceable. He traversed ground already covered in the application before Froneman J and, unlike the latter, was readily accepting of the Shan Trust’s assertion that subsequent to the demand by the Municipality during 2006 it had taken all the neccessary steps to regularise the situation in relation to offending structures on erf 105. It was for that reason that Van der Byl AJ made the orders compelling the Municipality to consider the plans set out in the orders made by him. In relation to paragraph 3 of Froneman J’s order, he held that Uniform rule 45A entitled him to suspend it in the terms set out earlier. [29] Subsequent to the order by Van der Byl AJ, the Hobie Trust’s review application was heard and judgment was delivered. Dambuza J held that the decision by the MEC, removing the restrictive conditions, was administrative action in terms of PAJA and that it fell to be reviewed and set aside for failure, inter alia, to have regard to the submissions made by the Hobie Trust. She held further that there had been no proper delegation to the MEC and that the latter had no power to remove the restrictive conditions. Dambuza J accordingly ordered the Registrar of Deeds to reinstate the restrictive conditions to Title Deed No T26430/1996 in respect of Erf 105, Summerstrand. Conclusions [30] We intend to deal first with the review appeal. Counsel representing the Shan Trust rightly conceded that he could not contend that the decision by the MEC was not ‘administrative action’ as defined in PAJA.5 He focused on the nature of the rights derived from the restrictive title deed conditions. He sought to characterise them as rights which, from inception, were always subject to alteration or amendment and submitted that residents including the Hobie Trust could not now complain when those restrictive conditions were altered or amended. He relied on the decisions of this court in Rossmaur Mansions (Pty) Ltd v Briley Court (Pty) Ltd 1945 AD 217 and Ronnie’s Motors (Pty) Ltd v Van der Walt 1962 (4) SA 660 (A) and on Garden Cities v Registrar of Deeds 1950 (3) SA 239 (C). [31] In Rossmaur an application to the then Administrator of the Province for the removal of restrictive conditions was unopposed and the Administrator subsequently removed them. The respondent applied to court to have the Administrator’s decision declared ultra vires. The court of first instance and this court had regard to the Ordinance in terms of which the Administrator purported to act and concluded that the Administrator had no power to deprive erf-holders of their rights. At pp 228-229 of Rossmaur the following appears: ‘Where an application to establish a township has been granted subject to a requirement, imposed on the recommendation of the Townships Board, that restrictive conditions as to the use of lots are to be included in the titles, such conditions, when once included in the titles of the lotholders, if not framed in terms which expressly render them subject to future cancellation or variation, must be regarded as conferring rights of a permanent nature, which cannot be cancelled or varied either by the Townships Board itself, or by any other authority, by virtue of powers of “administration” exerciseable over the township concerned.’ [32] The Shan Trust’s reliance on Rossmaur is misplaced. That case dealt with the Administrator’s power to deprive erf-holders of their right. The dictum in the preceding paragraph is no authority for the proposition that an affected erf-holder 5 The MEC is a public authority. When she makes decisions affecting particular holders of title deeds and residents in a township generally she is exercising public power. Her decisions in this regard have a direct external effect. should not be afforded a hearing. In the present constitutional structure such a proposition is untenable.6 [33] It is true that in Garden Cities the high court held that owners were not entitled to be consulted on an Administrator’s decision to amend or alter restrictive conditions. That case was decided by a provincial division almost 60 years ago. It is unsustainable under the current constitutional dispensation and perhaps even wrongly decided then.7 [34] It is necessary to address the MEC and the Municipality’s attitude towards the rights of land owners, derived from restrictive conditions in their title deeds. The Municipality and the MEC appear to adopt the position that the Municipality’s policies and zoning regulations trump the rights of owners derived from their title deeds. This is unacceptable. [35] In Malan & another v Ardconnel Investments (Pty) Ltd 1988 (2) SA 12 (A) at 40E-G this court said the following: ‘[I]t must be borne in mind that a town planning scheme does not overrule registered restrictive conditions in title deeds. Moreover, a consent by a local authority in terms of a town planning scheme does not per se authorise the user of an erf contrary to its registered restrictive title conditions. See Ex parte Nader Tuis (Edms) Bpk 1962 (1) SA 751 (T) at 752B-D; Kleyn v Theron 1966 (3) SA 264 (T) at 272; Enslin v Vereeniging Town Council 1976 (3) SA 443 (T) at 447B-D.’ [36] Froneman J, in arriving at the conclusions referred to above, stated (at para 8): ‘It is common cause that this kind of restrictive condition takes precedence over the municipality’s zoning and planning schemes. Generally this follows from their characterisation in our case law as praedial servitudes in favour of other erf holders (Ex parte Rovian Trust (Pty) Ltd 1983 (3) SA 209 (D) at 212E-213F; Malan and Another v Ardconnel Investments (Pty) Ltd 1988 (2) SA 12 (A) at 40B-I) and in this case also, particularly, from the express wording of clause 1.6.5 of the 6 See in this regard s 6(2)(c) of PAJA. That Act was promulgated in furtherance of the fundamental right to administrative action that is lawful, reasonable and procedurally fair. 7 Buffalo City Municipality v Gauss and Another 2005 (4) SA 498 (SCA) at paras 7 and 8. Council Zoning Scheme Regulations. Consequently, any possible permission by the municipality to build or use buildings contrary to the conditions cannot be lawful.’ See also Camps Bay Ratepayers and Residents Association and others v Minister of Planning, Culture and Administration, Western Cape and others 2001 (4) SA 294 (C) at 324E-G. [37] Restrictive conditions of the kind in question enure for the benefit of all other erven in a township, unless there are indications to the contrary. They are inserted for the public benefit and in general terms, to preserve the essential character of a township. In this regard see Malan at 38B-C and 39F-G. If landowners across the length and breadth of South Africa, who presently enjoy the benefits of restrictive conditions, were to be told that their rights, flowing from these conditions, could be removed at the whim of a repository of power, without hearing them or providing an opportunity for them to object, they would rightly be in a state of shock. [38] Section 84 of the Act provides for notice to be given to affected persons in the event of a contemplated removal of restrictive conditions. In the present case the MEC and the Municipality disavowed any reliance on the Act and relied solely on the right reserved to the Administrator to alter or amend the restrictive conditions, as provided for in the title deed. [39] Furthermore, the MEC’s reliance on a delegation by the Premier is misplaced. First, the title deed itself does not provide for delegation. Second, no delegation was proved. In this regard the onus rested on the MEC. See Chairman, Board on Tariffs and Trade & others v Teltron (Pty) Ltd 1997 (2) SA 25 (A) at 31F-H. The MEC relied on a proclamation in terms of which the administration of the Act was assigned to her.8 Given that the MEC and the Municipality disavowed reliance on the Act it is of no assistance to them. 8 Proclamation No 6 of 1998, Provincial Gazette No 323 31 July 1998. [40] The two grounds referred to above, separately and together, are fatal to the Shan Trust case. There also appears to be force in the submissions on behalf of the Hobie Trust, that the power to alter or amend does not include the power to remove or delete. Further, since restrictive conditions are usually inserted to preserve the identity of an area, the Municipality might be required to engage with other neighbours and owners in the area. Even if the area has undergone some change, it does not necessarily follow that further change is warranted or unchallengeable. Steps have apparently been taken by the Municipality in an attempt to engineer a blanket removal of restrictive conditions in the Summerstrand area. As far as is known, no progress has yet been made. It is, however, for the reasons aforesaid, not necessary for any further discussion on these or any other issues in respect of the review appeal. [41] For the reasons set out above, the conclusions of Dambuza J cannot be faulted. [42] We turn to deal with the suspension appeal. In interpreting a judgment the court’s intention is to be ascertained primarily from the language of the judgment or order as construed according to the usual well-known rules relating to documents. As in the case of any document, the judgment or order and the Court’s reasons for giving it must be read as a whole to ascertain its intention. In this regard see Administrator, Cape & another v Ntshwaqela & others 1990 (1) SA 705 (AD) at 715F-H.9 [43] It is necessary to place Froneman J’s judgment and conclusions in proper perspective. First, Froneman J was apprised of the Shan Trust’s intention to apply to have the restrictive conditions removed and he clearly and rightly did not think it would be of any consequence. Second, the learned judge very carefully considered the conduct of the Shan Trust over the years and concluded as 9 Drawn from Firestone South Africa (Pty) Ltd v Gentiruco AG 1977 (4) SA 298 (A). follows (at para 10): ‘On the papers before me the Shan Trust has shown a flagrant and sustained disregard, not only for the legitimate interests of its neighbours, but also for the local authority requirements, over a very long period of time.’ [44] Froneman J went on to consider whether a damages claim rather than a demolition order might meet the exigencies of the situation. He took into account the diminution in value of the Hobie Trust property as a result of the Shan Trust’s conduct. He reasoned that although a damages claim was viable, it was important to bear in mind that the continued enjoyment of the privacy of those living as neighbours to erf 105 would be destroyed if he failed to order demolition. He took into consideration that the title conditions sought to preserve the character of the suburb and that developments at erf 105 undermine it.10 [45] It should be borne in mind that in the application heard by Froneman J, the Shan Trust was aware of the allegations made against it by the Hobie Trust. It is clear that the repeated offending conduct of the Shan Trust, set out above, was traversed in the affidavits filed by the Hobie Trust. The Shan Trust chose, at its peril, to leave opposition to the Municipality. [46] It is not surprising that Froneman J was unwilling to grant the Shan Trust the postponement sought. He had rightly concluded in the main application, that the Shan Trust had lagged behind the law once too often and that enough was enough! Thus, Froneman J’s orders were intended to have immediate effect. The 60 day period within which the demolition order was to be effected was stipulated for practical purposes, namely to enable the owners and demolishers to do the necessary within a time frame. There can be no doubt that he intended that immediate steps be taken to ensure execution of the relevant orders. 10 See para 12 of the judgment. [47] It is against that background that the application before Van der Byl AJ should be seen. Van der Byl AJ failed to appreciate the full import of Froneman J’s judgement. It re-engaged on issues decided finally by Froneman J, namely, whether the offending conduct by the Shan Trust should continue to be countenanced. It will be recalled that Van der Byl AJ directed the Municipality to consider plans which, if approved, would ostensibly legitimise the contravening structures. Van der Byl AJ did what he was not empowered to do, namely, declaring in final terms, an order made by a court of equal jurisdiction to be of no force and effect.11 He was not sitting as a court of appeal or review in respect of Froneman J’s judgment and yet his reasoning reflects hallmarks of those procedures. [48] The cases relied upon by the court below, dealing with the rationale for court orders falling away because of subsequent events, are distinguishable. In S v Mujee 1981 (3) SA 800 (Z) an accused had been convicted of failing to make payments under a contribution order to a named certified institution in contravention of provisions of the applicable Maintenance Act. On review it appeared that the child concerned had previously been discharged from the institution and that the contribution order should therefore have been discharged. The court held that since a contravention of the applicable statutory provision was dependent on the contribution validly being in force, it could not have been the law’s intention to treat as valid, a maintenance order when the entire object of the order had fallen away. Put differently, the court had intended that contributions be made for as long as the child was in an institution. That scenario is a far cry from the facts of the suspension appeal. Froneman J had intended the orders he made to be final and to be executed. As far as he was concerned the Shan Trust had come to the end of the road. 11 As appears from what is set out in para 25 above Van der Byl AJ nullified Froneman J’s order setting aside any building plan approvals granted by the Municipality in relation to the building that had already been constructed in the north eastern corner of erf 105. [49] Ras & andere v Sand River Citrus Estates (Pty) Ltd 1972 (4) SA 504 (T), Le Roux v Yskor Landgoed (Edms) Bpk 1984 (4) SA 252 (T) and Bekker NO v Total South Africa (Pty) Ltd 1990 (3) SA 159 (T) were all concerned with the question whether the causae for writs of execution remained extant. These cases do not assist the Shan Trust. [50] Purporting to act according to the provisions of Uniform rule 45A,12 Van der Byl AJ suspended Froneman J’s order, in terms of which the Shan Trust was required to take the necessary steps to demolish the offending structures on erf 105. He did so even before the stated reason for nullifying it had materialised, and without proper appreciation of what Froneman J had intended. [51] Apart from the provisions of Uniform rule 45A a court has inherent jurisdiction, in appropriate circumstances, to order a stay of execution or to suspend an order. It might, for example, stay a sale in execution or suspend an ejectment order. Such discretion must be exercised judicially. As a general rule, a court will only do so where injustice will otherwise ensue.13 [52] A court will grant a stay of execution in terms of Uniform rule 45A where the underlying causa of a judgment debt is being disputed, or no longer exists, or when an attempt is made to use the levying of execution for ulterior purposes. As a general rule, courts acting in terms of this rule will suspend the execution of an order where real and substantial justice compels such action.14 [53] Froneman J had regard to whether justice would be done by ordering the demolition. He considered an alternative measure, namely damages, but importantly, thought that the conduct of the Shan Trust over the years had been flagrantly disrespectful of the law and the rights of others. Seen from this 12 Uniform rule 45A reads as follows: ‘The court may suspend the execution of any order for such period as it may deem fit.’ 13See Farlam, Fichardt, Van Loggerenberg Erasmus Superior Court Practice B1-330. 14 Erasmus Superior Court Practice B1-330 to B1-330A. perspective Van der Byl AJ erred in suspending the relevant order. Even though he may have taken a different view it was not appropriate for him to prefer his view to that of Froneman J. [54] There certainly was no case to be made at any stage for a rescission of any part of Froneman J’s judgment. The learned judge had correctly concluded that insofar as the offending structures were concerned and having regard to the unlawful conduct of the Shan Trust over the years, the time for finality had come. The principle of legality, a cornerstone of the Constitution, applies to government and governed alike. Repeat transgressors such as the Shan Trust are undeserving of the protection afforded by Van der Byl AJ. Froneman J intended finality. The effect of Van der Byl AJ’s judgment is recrudescence. [55] One remaining aspect calls for attention. The record in the review matter was prepared by the Shan Trust’s legal representatives. It contains a great deal of irrelevant and duplicated matter. The Hobie Trust’s representatives were not approached timeously to avoid this unfortunate result. Counsel representing the Shan Trust conceded that fault could rightly be attributed to his attorneys and was unable to provide a basis for resisting an order that his attorney should be precluded from recovering from his/her client such costs incurred in consequence of those unnecessary portions being incorporated into the record. In our view, at least a third of the record was unnecessary. [56] For all the reasons set out above, the following order is made: 1. In Wilma van Rensburg NO & another v Perapanjakam Naidoo NO & others (case no 155/09): (a) the appeal is upheld with costs including the costs of two counsel. (b) the order of the court below is set aside in its entirety and substituted as follows: ‘The application is dismissed with costs including the costs of two counsel.’ 2. In Perapanjakam Naidoo NO & others v Wilma van Rensburg NO & another (case no 455/09): (a) the appeal is dismissed with costs including the costs of two counsel. (b) the appellants’ legal representatives are precluded from recovering any costs from the appellants related to the unnecessary and duplicated parts of the record (one third thereof). _________________ M S NAVSA JUDGE OF APPEAL _________________ N Z MHLANTLA JUDGE OF APPEAL APPEARANCES: Case no 455/09 For Appellant: H J Van der Linde SC J D Huisamen Instructed by: Greyvensteins Nortier Inc, Port Elizabeth E G Cooper Majiedt Inc, Bloemfontein For Respondent: O Rogers SC M Euijen Instructed by: De Villiers & Partners, Port Elizabeth Honey Attorneys, Bloemfontein Case no 155/09 For Appellant: O Rogers SC M Euijen Instructed by: De Villiers & Partners, Port Elizabeth Honey Attorneys, Bloemfontein For Respondent: H J Van der Linde SC J D Huisamen Instructed by: 1st – 5th Respondents: Greyvensteins Nortier Inc, Port Elizabeth E G Cooper Majiedt Inc, Bloemfontein 6th & 8th Respondents: Rushmere Noach Inc, Port Elizabeth (Abiding with the decision of the Court.) 7th Respondent: State Attorney, Port Elizabeth State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL 26 May 2010 STATUS: Immediate Wilma van Rensburg NO & Another v Perapanjakam Naidoo NO & Others; Perapanjakam Naidoo NO & Others v Wilma van Rensburg NO & Another Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal today handed down judgment in two related appeals. First, it upheld an appeal against an order of Van der Byl AJ (Eastern Cape High Court), in terms of which he purported to declare parts of a judgment of Froneman J, in the same division of the high court, to be of no force and effect and made certain allied orders. Second, the SCA dismissed an appeal against an order of Dambuza J, in terms of which she reviewed and set aside a decision of the Member of the Executive Council of Local Government and Traditional Affairs, Eastern Cape Province (MEC) granting consent for the amendment of certain title conditions in respect of Erf 105, Summerstrand, Port Elizabeth, the property of the Shan Trust. The opposing litigating parties are trustees of the Hobie Trust and the Shan Trust respectively. The Hobie Trust and Shan Trust are abutting neighbours in Summerstrand Township, Port Elizabeth. The Hobie Trust acquired erf 104 in 1989, whilst the Shan Trust acquired erf 105 in 1996. Both properties were subject to the restrictive conditions which in turn were subject to alteration and amendment by the then Administrator of the Cape Province. The restrictive conditions were to the effect that the properties were to be used only for private residential purposes. At the time of acquisition of Erf 105, the only improvements were a main building and a double garage. The Shan Trust thereafter started effecting a number of improvements and erecting additional buildings on the property in three phases in furtherance of its guest house business. The municipality had granted the Shan Trust special consent to operate a guest house – initially four rooms for hire – later 11 rooms, subject to certain conditions. The Shan Trust did not adhere to the conditions imposed and the municipality withdrew the special use consent in 2007. The improvements, referred to above, were more often than not effected without the necessary approvals of the municipality. The Hobie Trust subsequently launched an application against the municipality and the Shan Trust for an order to demolish the offending buildings and for the Shan Trust to cease operating business unlawfully. The application was heard by Froneman J, who, on 30 March 2007, after considering restrictive conditions and repeated transgressions by the Shan Trust ordered it to demolish the offending structures within 60 days of the order. The Shan Trust applied for leave to appeal the decision. The application was dismissed by the SCA and the Constitutional Court. This rendered Froneman J’s judgment final. The Shan Trust however failed to comply with the order. On 27 June 2007 the Shan Trust applied to the Premier of the Eastern Cape Province, for the removal of the restrictive conditions. On 16 October 2007, the MEC purported to grant the said application. The Shan Trust subsequently applied for an order to declare certain parts of Froneman J's orders to be of no force or effect and to suspend the remaining orders. In the meantime, the Hobie Trust instituted review proceedings to have the MEC's decision set aside. Van der Byl AJ, who heard that application, sitting as a court of first instance, suspended and nullified the orders granted by Froneman J. The review application referred to above in terms of which the decision by the Administrator to remove the restrictive conditions was sought to be reviewed, was subsequently heard and the MEC's decision was set aside by Dambuza J. The decision was reviewed and set aside. In regard to that decision, the SCA held that the decision by the MEC constituted administrative action as defined in the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and that the MEC was obliged to consider the objections of the Hobie Trust and other affected residents before making the decision in that regard ─ the MEC had made the decision without reference to the written objections of the Hobie Trust. This court held further that the MEC lacked the statutory authority to make the decision as there had been no proper delegation from the Premier of the Province, the successor to the Administrator. The SCA thus held that the MEC's decision was rightly reviewed and set aside. It dismissed the appeal by the Shan Trust. In regard to the decision of Van der Byl AJ the SCA found that the learned judge had failed to appreciate the full import of Froneman J's judgment and re- engaged on issues already decided by the latter. It held that Van der Byl AJ did what he was not empowered to do when he declared an order of equal jurisdiction to be of no force and effect. The court held that although a court has inherent jurisdiction to order a stay of execution or to suspend an order, such discretion must be exercised judicially and that in this case Van der Byl AJ erred in suspending the order. The SCA thus upheld the appeal by the Hobie Trust and set aside the order by Van der Byl AJ. --- ends ---

2407

non-electoral

2013

SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 575/2011 Not Reportable In the matter between: TOYA-LEE VAN WYK FIRST APPELLANT ENVOR HAGAN SECOND APPELLANT and THE STATE RESPONDENT Neutral citation: Toya-Lee van Wyk v The State (575/11) [2012] ZASCA 47 (28 March 2013). Coram: Mpati P, Pillay JA et Mbha AJA Heard: 20 February 2013 Delivered: 28 March 2013 Summary: Murder – mens rea – doctrine of common purpose – act of another imputed to appellant – insufficient evidence to satisfy requirements to found common purpose and therefore criminal liability – conviction and sentence set aside. ORDER On appeal from: Western Cape High Court, Cape Town (Moosa J sitting as court of first instance): 1 The appeal is upheld and the conviction and sentence are set aside. JUDGMENT PILLAY JA (MPATI P ET MBHA AJA CONCURRING) [1] Leave to appeal having been granted by the Western Cape High Court, Cape Town, the appellants appeal against their convictions on a count of murder. Prior to this hearing, we were informed that first appellant has since passed on and that it is therefore not necessary to deal with his appeal. The second appellant (hereinafter referred to as ‘the appellant’) who at the time of this appeal had already served his sentence, sought nevertheless to continue with his appeal. He was accused no 3 in the trial court. [2] The appellant appeared in the high court with six others on one count of murder, one count of kidnapping and one count of robbery with aggravating circumstances as envisaged in s1 of the Criminal Procedure Act 51 of 1977. He was acquitted of kidnapping and robbery but convicted of murder on the basis that he had acted in concert with a group of persons who had actually caused the death of Carmen Charmaine Kamies (‘the deceased’) on 6 July 2002. He was sentenced to seven years’ imprisonment of which two years were conditionally suspended for five years. [3] This appeal concerns the application of the doctrine of common purpose and whether it was properly applied in convicting the appellant. [4] At the commencement of proceedings in the high court, all charges against Anthony Koordom, who was accused no 2 in the trial court, were withdrawn. He later testified on behalf of the State and was warned in terms of s 204 of the Criminal Procedure Act 51 of 1977. [5] The following material facts are either common cause or undisputed: 5.1 During the evening of 6 July 2002 at approximately 20h00, the deceased, her sister, Lee-Ann Kamies and their friend, Shireen Kriel, were walking along Mangold Street, Westbank, Kuils River. 5.2 In the vicinity of a tavern, referred to as Ricky’s Games, they were joined by two male persons who exchanged pleasantries with them opposite the tavern. The two males asked them to wait in the street while they went into Ricky’s Games. Shortly thereafter they were rejoined by the same two males and yet another male person. The three males then somehow managed to separate the deceased from her sister and their friend and were then joined by two other male persons. 5.3 According to Lee-Ann, at some stage as the events unfolded, the appellant appeared in the street. It appeared to her as if he had been to some sports practise. He approached the group that had by then surrounded the deceased and said: ‘My broer, los die kinders, want die kinders het niks gemaak nie.’ Lee-Ann and Shireen then left the scene to seek help when the deceased asked them to do so. 5.4 The appellant, upon invitation, ostensibly to take the deceased to her home in Brentwood Park, then walked with the group and the deceased. The deceased had curled her one arm around the waist of one of the males, who later turned out to be Marcelino Van Wyk (Marcenlino) who was accused no 7 in the trial court. Marcelino, had in turn, put his arm around the neck of the deceased. On the way, the group branched into some thicket. When they reached the inside of the thicket which was located near Brentwood Park, Marcelino invited the rest of the group to have sex with her. The deceased said that she was sick. No one took up the offer. Marcelino said that they ought to then take her home. 5.5 No sooner were they out of the thicket and before they could disperse, Franklin Meyer (Franklin), who was accused no 6, warned Marcelino that they could not simply let the deceased go as she would tell her people what had happened and might lay a charge against members of the group since she was connected to the rival 28 gang. (It appears that at least Marcelino was a member of the 26 gang.) They all then went back into the thicket. 5.6 At some spot in the thicket, the deceased was ordered to sit on a tree stump. Thereafter Marcelino asked her if she was associated with the 28 gang. When she denied any association, he slapped her more than once. She started to cry. When asked for the third time if she had such an association, she admitted it. 5.7 The deceased was then hit on the back of her head with a pole that was about ten centimeters thick and a meter long. As a result she fell on her stomach. She was made to sit on the stump again and once again hit on the back of her head with the pole, with the same result, except that this time she landed on her back. Marcelino then picked up a loose tree stump which weighed approximately 10.5 kg, and threw the stump onto her face. He then ordered some of the others to do the same. [6] What actually happened in the thicket where the deceased was killed, is within the knowledge of those who were present when the assault occurred. Only Koordom and Toya-Lee Van Wyk, who was accused No 1, testified about the events in the thicket. [7] Koordom testified that after Marcelino threw the tree stump onto the deceased’s face, Franklin did the same, followed by Ralph Persent (Ralph), who was accused no 5 in the trial court. Koordom further described how Marcelino thereafter aggressively compelled a reluctant Daniel Louw (Daniel), who was accused no 4, to do the same. An argument between the two then ensued. Franklin intervened and told Daniel, in no uncertain terms, that he should do as he was being told. Daniel finally threw the stump onto the face of the deceased. Koordom described how he himself was ordered to also throw the stump onto the deceased. He said that he picked up the stump but threw it next to the head of the deceased. [8] Koordom then proceeded to describe how Ralph, Franklin and Marcelino took turns to stab the deceased as she lay on the ground. He further said that Marcelino then gave the knife to the appellant and ordered him to stab the deceased in the heart. The appellant took the knife but asked where the heart was located. Koordom explained that in an apparent fit of impatience, Marcelino took the knife back saying that he would show the appellant how to stab and then resumed stabbing the deceased. Marcelino then compelled Toya-Lee to stab the deceased. Being scared, Toya-Lee took the knife and feigned stabbing, but in fact did not. The group then departed from the scene, leaving the deceased behind in the bush. Koordom’s evidence was not rejected out of hand but was found to require corroboration in order to be relied upon. [9] Toya-Lee broadly confirmed Koordom’s testimony of the events that occurred in the thicket where the deceased was assaulted. There were, however, some inconsistencies between their respective testimonies, notably Toya-Lee stated that it was in fact Franklin who had assaulted the deceased with the pole while Koordom said it was Marcelino. For purposes of this appeal, nothing turns on this discrepancy as both Marcelino and Franklin clearly acted in concert with each other at the material time. When the group left the thicket, the appellant and Koordom separated from the group and went home on their separate ways. [10] The court below found that Toya-Lee’s evidence could not ‘per se’ be rejected. Of importance, Toya-Lee confirmed in all material respects, the evidence of Koordom regarding what occurred when Marcelino ordered the appellant to stab the deceased, the appellant’s response thereto and, in particular, that he did not stab the deceased. [11] According to Dr Dempers, who performed the post mortem examination on the body of the deceased, approximately 50 stab wounds were inflicted on the deceased. His finding as to the cause of death is: `nie teenstrydig met hoofbesering nie’. (Not inconsistent with head injury. In his evidence he described the injury to the head as having been inflicted with blunt force. It follows therefore that the deceased died as a result of being hit with the pole or the injuries caused by the tree stump when it was thrown onto her head. Dr Dempers further found that the stab wounds were inflicted after the deceased had already died. [12] The appellant did not testify. It is, however, clear from the evidence that the appellant did nothing that can be causally connected to the deceased’s death and his conviction was based on the doctrine of common purpose. In arriving at the conclusion that he had made common cause with those responsible for the death of the deceased, the learned judge in the court below reasoned as follows: ‘Op die stadium nadat beskuldigde 6 gesê het dat hulle nie die oorledene kon laat gaan nie en hulle daarop almal sonder enige gesprek of bespreking weer teruggedraai het in die bosse in, toon dit aan dat al sewe van hulle op daardie tydstip `n gemeenskaplike oogmerk gevorm het om die oorledene te dood. Na aanleiding van beskuldigde 6 se waarskuwing sou geen redelike person kon glo dat die oorledene die bos lewendig sou verlaat nie. Tot tyd en wyl hulle die bos weer as `n groep verlaat, het nie een van hulle `n handeling van disassosiasie verrig nie. (Sien S v MUSINGADI, `n ongerapporteerde beslissing van die Hoogste Hof van Appèl, saaknommer 22/95, gelewer op 23 September 2004.) Nie een van die beskuldigdes het op enige stadium probeer keer dat daar met hierdie wrede moord voortgegaan word of homself met die optrede disassosieer nie. Na afloop van die aanval op die oorledene toon almal van hulle, hulle aanvaarding van wat gebeur het, en bevestig daardeur dat hulle wel `n gemeenskaplike doel gehad het, deur saam die toneel te verlaat en nog `n tyd lank op vriendskaplike voet bymekaar te verkeer totdat sommige van hulle gaan slaap het. Dat sommige van hulle `n mindere rol gespeel het val nie te betwyfel nie, maar dat die doodmaak van die oorledene almal se goedkeuring weggedra het, word deur hulle optrede bo enige redelike twyfel bewys. Beskuldigdes 1 en 4 se weergawe dat hulle bang was vir beskuldigde 7 tydens die voorval, gaan nie op nie. Niks het hulle verhoed om weg te kom van die toneel af nie. Beskuldigde 1 was `n familielid van beskuldigde 7 wie gereeld gekuier het by sy familiehuis. Na die voorval het hulle teruggekeer na die huis van beskuldigde 1. Sy ma was teenwoordig en het vir beskuldigde 7 gevra waar die bloed op sy hemp vandaan kom. Dit was `n gulde geleentheid vir beskuldigde 1, asook vir beskuldigde 4, om te kla by beskuldigde 1 se ma. Hulle doen dit nie. Hulle gaan saam met beskuldigde 7 na Ricky’s Games waar hulle saam verkeer en saam drink totdat beskuldigde 1 se ma hulle kom roep. Op daardie stadium daag die polisie op om die smokkelhuis toe te maak. Indien hulle hul wou distansieer van die voorval, kon hulle die voorval aan die polisie gerapporteer het. Dit is duidelik uit hulle optrede voor, gedurende en na die voorval dat hulle saamgespan het om die oorledene te dood. Die Hof verwerp hulle weergawe dat tydens die pleging van die moord, hulle vir beskuldigde 7 gevrees het. Beskuldigde 3 het besluit om nie te getuig of enige getuienis aan te bied tot sy verdediging nie. Sy optrede voor, gedurende en na die voorval dui daarop dat hy hom vereenselwig het met die optrede van die res van die beskuldigdes om die oorledene te dood. Die stellings wat gemaak is deur adv Losch, namens hom, dra baie min gewig, want dit is nie getuienis wat getoets kan word nie. In die lig van die totaliteit van die getuienis, verwerp die Hof die weergawe van al die beskuldigdes waar dit teenstrydig is met die bewese feite en waarskynlikhede. Die Hof bevind dat al die beskuldigdes aktief deel gehad het om die oorledene te dood.’1 [13] Briefly and simply put, common purpose is the imputing of the act of one member of a group to other members of the same group or vice versa, provided of course that some form of intention is proved against each of them. The development of the jurisprudence in regard to the doctrine of common purpose had raised many questions, with the result that a detailed analysis of the legal position of the doctrine had to be undertaken. This was, with respect, ably done by Botha JA in S v Safatsa 1988 (1) SA 868 (A). For purposes of this judgment, it need only be stated that according to Safatsa, in cases where there is no causal connection between the conduct of the accused and the offence in question, it is sufficient that some act of association with the actions of the group is proved against the accused in order to found common purpose. [14] The requirements to hold a person criminally liable on the basis of the approach adopted in Safatsa were set out in S v Mgedezi 1989 (1) SA 687 (A) at 705I – 706C where it is stated as follows: ‘In the absence of proof of a prior agreement, accused No 6, who was not shown to have contributed causally to the killing or wounding of the occupants of room 12, can be held liable for those events, on the basis of the decision in S v Safatsa and Others 1988(1) SA 868 (A), only if certain prerequisites are satisfied. In the first place, he must have been present at the scene where the violence was being committed. Secondly, he must have been aware of the assault on the inmates of room 12. Thirdly, he must have intended to make common cause with those who were actually perpetrating the assault. Fourthly, he must have manifested his sharing of a common purpose with the perpetrators of the assault by himself performing some act of association with the conduct of the others. Fifthly, he must have had the requisite mens rea; so, in respect of the killing of the deceased, he must have intended them to be killed, or he must have foreseen the possibility of their being killed and performed his own act of association with 1 Paras 64 – 67 and 71 of the judgment. recklessness as to whether or not death was to ensue.’ [15] Mr Badenhorst for the State conceded that the present case was an instance where there was no prior agreement between the members of the group that the deceased should be killed. It follows therefore that the appellant’s guilt must be considered, on the basis of the requirements as set out in S v Mgedezi, supra. In support of the conviction, Mr Badenhorst contended that the appellant clearly associated himself with the actions of the group by (a) returning to the bush with the group; (b) receiving the knife; (c) asking where the deceased’s heart was and (d) leaving together with the group. He submitted that his association with the group and its activities was cemented by his failure to disassociate himself from the group’s actions at any stage. [16] While the inference of such an association can sometimes be drawn from what occurred or was said during or after the event, care needs to be taken to avoid lightly inferring an association with a group activity from the mere presence of the person who is sought to be held criminally liable for the actions of some of the others in the group. [17] The learned judge concluded that the appellant’s conduct before, during and after the incident was indicative of him having associated himself with the actions of the rest of the group in killing the deceased. He did not specify which actions of the appellant led him to that conclusion. I can only assume that the actions he must have been referring to were the appellant’s return into the bush with the group, the receiving of the knife, asking where the deceased’s heart was and the failure to disassociate himself from the group and its actions at the material time. In light of the absence of evidence to indicate that the appellant had associated himself with the actions of those in the group who had intended to assault and kill the deceased, the trial court’s conclusion does not follow logically and its approach constitutes a misdirection. The evidence regarding the appellant’s return into the thicket with the rest of the group merely proves his presence at the scene of the killing. But his mere presence cannot serve as proof of any one, or more, of the rest of the requirements set out in Mgedezi and which have to be established to hold an accused criminally liable for the actions of a group in the absence of an agreement. See: S v Jama 1989 (3) SA 427 (A) at 436E-J. [18] Even if the appellant had realized that the deceased was about to be killed when he returned into the thicket with the rest of the group, that does not justify an inference that he was in agreement with, or approved of, the crime which was about to be perpetrated, nor that he thereby manifested his association with the group’s criminal purpose. The fact that he did not participate in the murderous assault on the deceased illustrates this. There is no evidence of any act of association by the appellant with the actions of those who assaulted and murdered the deceased. When he took the knife from Marcelino, he did so because he was ordered by Marcelino to stab the deceased in the heart. His act of taking the knife and asking where the heart was located in those circumstances, is, in my view, not sufficient to prove that the appellant intended to make common cause with those who actually perpetrated the assault (third requisite as set out in Mgedezi), nor is it sufficient to prove a manifestation of his sharing of a common purpose with the perpetrators of the assault, by himself performing some act of association with the conduct of the others (fourth requisite as set out in Mgedezi). After all, the appellant did not stab the deceased. It is not necessary to consider the question whether, in any event, he could have been found guilty of murder had he done so, in view of the medical evidence that the deceased was already dead when she was stabbed. [19] The court below accordingly erred in holding that the appellant and his co-accused ‘`n gemeenskaplike oogmerk gevorm het om die oorledene te dood’ when they turned back into the thicket after Franklin had said they could not allow the deceased to go. There was absolutely no evidence of an agreement between them to kill her. The court a quo clearly drew an inference of such an agreement from the fact that the appellant and the others returned to the bush without demur. That, however, is not the only reasonable inference that can be drawn from the facts. Some might have been curious to see what was going to happen while others might have been afraid to object or disagree, given that both Marcelino and Franklin seemed to have been conducting affairs at the time. There was indeed evidence that both of them put pressure on others, eg. Daniel and Koordom, to become complicit in the assault on the deceased. [20] In the circumstances, the court below should have found that the State had failed to discharge the onus of proving the guilt of the appellant beyond reasonable doubt. The appellant’s appeal must accordingly succeed. [21] In the result, the following order is made: 1 The appeal is upheld and the conviction and sentence are set aside. R. PILLAY JUDGE OF APPEAL APEARANCES: FOR APPELLANT : MR J MIHALIK Instructed by: Legal Aid South Africa, Cape Town; Legal Aid South Africa, Bloemfontein FOR RESPONDENT: MR L J BADENHORST Instructed by: The National Director of Public Prosecutions, Cape Town The National Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 28 March 2013 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Toya-Lee Van Wyk & another v The State The Supreme Court of Appeal (SCA) today upheld an appeal against the conviction of the appellant of murder in the Western Cape High Court, Cape Town. The 15 year old appellant was in a group of persons some of whom were responsible for killing Carmen Charmaine Kamies. The appellant was convicted on the basis of common purpose in that he made common cause with the perpetrators of the murder. The SCA found that in the absence of evidence which demonstrated that he had made such common cause with the perpetrators of the murder, the inference that the appellant had associated with the group’s murderous actions by his mere presence was not the only reasonable inference which could be drawn in the circumstances and was unjustified. The SCA concluded that the appellant ought not to have been convicted and set aside the conviction and sentence.

3258

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case no: 062/07 In the matter between: SIPHIWE ALTON SHABALALA APPELLANT and METRORAIL RESPONDENT ______________________________________________________________ Coram: SCOTT, HEHER, JAFTA, MAYA et COMBRINCK JJA Date of hearing: 20 November 2007 Date of delivery: 28 November 2007 Summary: Commuter shot and robbed on train – action for damages – Metrorail could not be expected to have had a security guard in each and every carriage. Citation: This judgment may be referred to as Shabalala v Metrorail [2007] SCA 157 (RSA) SCOTT JA/…. SCOTT JA: [1] The appellant, a 44 year-old man, was shot and robbed while a passenger on a train operated by the respondent. He subsequently instituted action in the Johannesburg High Court alleging negligence on the part of the respondent and claiming damages arising from gunshot wounds he sustained in the attack. The court a quo (Horn J) was asked to decide only the issue of the respondent’s liability and to direct that the issue of the quantum of damages stand over for later determination. The court decided the former issue in the respondent’s favour and dismissed the action with costs. The judgment is reported as Shabalala v Metrorail 2007 (3) SA 167 (W). The appeal is with the leave of this court. [2] The appellant testified that at about 7 pm on 21 May 2004 at Dunswart railway station he boarded a train bound for Springs with the intention of travelling as far as Brakpan station. Before boarding the train he observed about 11 commuters waiting on the station. He said there were no security guards on the platform and there was no ticket examiner at the entrance to the station. When the train arrived he got on and sat down. The other 11 commuters got into the same coach. As the train pulled away three men in the coach stood up. One of them confronted the appellant and demanded money. When the appellant said he had none, the person produced a handgun and without further ado fired three shots. The appellant was hit twice in the leg and once in the arm. He fell to the floor and his assailant searched his pockets, taking R130 in cash, a train ticket and a wrist watch. In the meantime, the other two who had stood up busied themselves robbing other passengers in the coach. When the train arrived at the next station, which was Benoni, the appellant managed to get off the train. Two security guards, one male and the other female, came to his assistance. He pointed out the robbers to them but they attended to him rather than attempt to apprehend the robbers. The train pulled off with the robbers still on board. [3] The appellant testified that the 11 persons who had waited on the platform at Dunswart station all gave the appearance of being normal passengers. There was similarly nothing untoward about the appearance of the three robbers. The gunman wore a leather jacket which covered his hips. He drew his firearm from under his jacket. The appellant could not say whether the robbers had boarded the train at Dunswart or whether they were already in the coach when the train arrived at the station. [4] In the course of cross-examination, the appellant testified that there were usually security guards on the trains on which he travelled. He said this was the case ‘especially during the day’ and ‘on occasions at night’. Some of the security guards, he said, were armed while others had ‘two-way radios’. They all wore uniforms. The appellant inferred that there were no security guards in the other coaches at the time of the robbery. But this inference, he said, was based on the fact that he ‘banged on the coach’, while being attacked and no one came to his assistance. Given the fact there was no door linking the coach in which he travelled to the next one, and also the noise the train in motion would have made, the inference was unjustified. [5] The above was the sum total of the evidence placed before the trial court. After the appellant had testified he closed his case. The respondent thereupon also closed its case. [6] In his particulars of claim the appellant alleged that the respondent (the defendant in the court below) had been negligent in the following respects: ‘1. The Defendant failed to ensure the safety of members of the public in general and the Plaintiff in particular on the coach of the train in which the Plaintiff travelled; 2. The Defendant failed to take any or adequate steps to avoid the incident in which the Plaintiff was injured when by the exercise of reasonable care they could and should have done so; 3. The Defendant failed to take any or adequate precautions to prevent the Plaintiff from being injured on the moving train; 4. The Defendant failed to employ employees, alternatively, failed to employ an adequate number of employees to prevent passengers in general and the Plaintiff in particular from being injured in the manner in which he was. 5. The Defendant failed to employ employees; alternatively, failed to employ an adequate number of employees to guarantee the safety of passengers in general and the Plaintiff in particular; 6. The Defendant neglected to employ security staff alternatively sufficient security staff on the platform and/or the coach in which the Plaintiff was travelling to ensure the safety of the public in general and the Plaintiff.’ It will be observed, in passing, that the grounds of negligence relied upon are all of a general nature and relate to a systemic failure on the part of the respondent. In other words, the alleged failure did not relate to an omission on the part of an individual employee to act in a particular way in relation to the specific incident in question, but rather to an omission of a general nature on the part of the respondent to put in place measures that would ensure the safety of commuters travelling on the respondent’s trains. [7] It is now well-established that a negligent omission, unless wrongful, will not give rise to delictual liability. The failure to take reasonable steps to prevent foreseeable harm to another will result in liability only if the failure is wrongful. It is the reasonableness or otherwise of imposing liability for such a negligent failure that will determine whether it is to be regarded as wrongful. See eg Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd 2006 (3) SA 138 (SCA) para 11. If it is reasonable to do so, the defendant will be said to have owed the injured party a legal duty to act without negligence; that is to say, to take such steps as may have been reasonable to avert the harm. In Rail Commuters Action Group v Transnet Ltd t/a Metrorail 2005 (2) SA 359 (CC) it was held that Metrorail was obliged to take reasonable measures to provide for the security of commuters while making use of its rail transport. However, the court (in paras 79-81) emphasized that the obligation to which it referred arose by virtue of the Legal Succession to the South African Transport Services Act 9 of 1989; it was a public law obligation and did not automatically give rise to a legal duty for the purpose of the law of delict. In this court, counsel were agreed that the respondent was indeed obliged to act without negligence. In other words, given the foreseeability of harm to commuters resulting from criminal activity, it was agreed that the respondent owed commuters a legal duty to take such steps as were reasonable to provide for their safety and that the failure to take such steps would render it liable in delict. [8] It appears from the evidence of the appellant that the respondent had indeed adopted measures to avert crime by employing security guards both on its trains and on railway platforms. The question in issue is therefore whether the appellant discharged the burden of establishing on a balance of probabilities that those measures were unreasonable in the circumstances and that had reasonable measures been taken the attack would not have occurred. When considering this question it is important to bear in mind that merely because the harm which was foreseeable did eventuate does not mean that the steps taken to avert it were necessarily unreasonable. See Tsogo Sun Holdings (Pty) Ltd v Qing-He Shan 2006 (6) SA 537 (SCA) para 14. To hold otherwise would be to impose on the respondent a burden of providing an absolute guarantee against the consequence of criminal activity on its trains. There clearly is no such burden and the appellant did not contend that there was. [9] Whether there were security guards present in any of the other coaches at the time of the attack is unclear. What is clear is that there was no security guard present in the coach in which the appellant travelled from Dunswart station to Benoni station. It is also clear that to avert the attack on the appellant there would have had to be, at the least, one security guard present in that coach. I say ‘at the least’ because given the willingness of the assailant to shoot the appellant in response to no more than the latter’s statement that he had no money, the presence of a single security guard, even if suitably armed, may well have made no difference. Indeed, attacks by armed robbers on security guards, even when armed, are sadly not uncommon. But even assuming that the presence of a security guard in the coach would have served as a deterrent sufficient to thwart the attack, the question remains whether it would be reasonable to require the respondent to have a security guard, whether armed or otherwise, in each and every coach of every train. If regard is had to the large number of railway coaches employed by the respondent to convey commuters many kilometres each day, such a requirement would, in my view, exceed by far the precautionary measures that could reasonably be expected of an enterprise operating a commuter train service. No doubt in particular circumstances it may be reasonable to expect the respondent, regardless of the cost, to place armed security guards in each and every coach of a train travelling on a particular line. Typically, the need for such special precautions could arise if a particular line had been identified as being particularly dangerous on account of repeated criminal activity. But there was no evidence to suggest that this was so in the case of the line from Dunswart to Benoni. [10] Counsel for the appellant sought to make something of the fact that there were no security guards on Dunswart station. But whether this was unreasonable or not need not be decided. It is clear from the appellant’s own evidence that whether there were or not, would have made no difference. There was nothing about the appearance of the commuters waiting on the station to indicate that any of them might be armed robbers; nor was it established that the robbers boarded the train at Dunswart station. Counsel did not suggest that the respondent was required to take steps to ensure that each and every commuter was searched before boarding a train, nor was this pleaded. It is conceivable that it might be reasonable in appropriate circumstances for the respondent to adopt such an extreme measure, but once again, no evidence was tendered to suggest the existence of such special circumstances. [11] It was also emphasized on behalf of the appellant that the nature and extent of the precautionary measures adopted by the respondent were peculiarly within its knowledge. This, of course, is so. But it does not mean that the respondent bore the onus of establishing that it could not reasonably have prevented the robbery from taking place. The onus of proof remained on the appellant throughout. Had, however, the appellant placed before the court at least some evidence giving rise to an inference of negligence on the part of the respondent which was causally connected to the robbery, the latter would have been obliged to adduce evidence to rebut that inference or face the prospect of having judgment granted against it. But, as I have indicated, the evidence of the appellant makes it clear that the attack could only have been averted by having an armed security guard in that particular coach. In the absence of further evidence to justify the need for a security guard in each coach, the failure on the part of the respondent to ensure that there was such a security guard present in each coach does not give rise to an inference of negligence. It is true, as counsel argued, that any such further evidence that there may have been, would have been within the knowledge of the respondent, but that did not preclude the respondent from ascertaining the existence of such evidence, whether by seeking discovery of documents in the respondent’s possession, or requesting particulars for trial or otherwise. [12] It follows that in my view the appellant failed to discharge the burden of proving negligence on the part of the respondent and to this extent the appeal must fail. The court a quo granted judgment against the appellant. In my view the correct order should have been one of absolution from the instance. I propose to amend the order accordingly. [13] The appeal is dismissed with costs, including the costs of two counsel. The order of the court a quo is altered to read as follows: ‘(a) Absolution from the instance is granted. (b) The plaintiff is ordered to pay the costs of the defendant.’ __________ D G SCOTT JUDGE OF APPEAL CONCUR: HEHER JA JAFTA JA MAYA JA COMBRINCK JA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL SIPHIWE ALTON SHABALALA AND METRORAIL CASE NO 062/07 From : The Registrar, Supreme Court of Appeal Date: 28 November 2007 Status: Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal today dismissed the appeal of Mr Siphiwe Shabalala whose claim for damages against Metrorail had been rejected in the Johannesburg High Court. On 21 May 2004 Mr Shabalala was shot and robbed while a passenger on a train travelling between Dunswart and Benoni stations. After boarding the train three men whose appearance suggested they were ordinary passengers, stood up and demanded money from the passengers in the coach. When Mr Shabalala said he had none, one of the men drew a handgun and without further ado fired three shots at him, hitting him twice in the leg and once in the arm. It appeared that Metrorail employed security guards on its trains and on station platforms. The Court considered that the attack could possibly have been averted had there been a security guard in that particular coach. But having regard to the willingness of the robber to shoot Shabalala in response to no more than the latter’s statement that he had no money, the Court noted that the presence of a single security guard, even if armed, may well have made no difference. It noted, too, that attacks by armed robbers on security guards, even when armed, are not uncommon. While accepting that Metrorail was obliged to take reasonable steps to prevent criminal activities on its trains, the Court held that Metrorail could not be expected to go so far as to place a security guard in each and every one of its coaches. This was particularly so, the Court said, having regard to the large number of coaches employed by Metrorail to convey commuters many kilometres each day. Such a requirement, said the Court, would exceed by far the precautionary measures that could reasonably be expected of an enterprise operating a commuter train service. The Court held that the position may have been different had evidence been adduced that that particular line was notorious for criminal activity and that special precautions were, therefore, necessary. But no such evidence was produced and Shabalala’s claim had to fail. The Court held in the circumstances that the High Court should have granted an order of absolution from the instance (ie an order declaring the claim not to have been proved) rather than judgment in favour of Metrorail. It altered the High Court’s order accordingly. --- ends ---

2281

non-electoral

2009

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 429/08 In the matter between: NICOLAAS PETRUS KOTZÈ Appellant and THE STATE Respondent Neutral citation: Kotzè v The State (429/08) [2009] ZASCA 93 (15 September 2009) Coram: HARMS DP, HEHER and SNYDERS JJA and GRIESEL and WALLIS AJJA Heard: 20 August 2009 Delivered: 15 September 2009 Summary: Criminal law – Police trap and undercover operation – Contraventions of s 20 of Diamonds Act 56 of 1986 – S 252A of the Criminal Procedure Act. ORDER On appeal from: Cape High Court (Louw J, Saldanha AJ concurring), on appeal from the Regional Magistrates’ Court, Bellville. The appeal is dismissed. JUDGMENT WALLIS AJA (HARMS DP, HEHER and SNYDERS JJA and GRIESEL AJA concurring.) [1] The appellant, Nick Kotzè, is a successful businessman and a prominent citizen of Port Nolloth. On four occasions between 14 July 2001 and 12 February 2002 he purchased unpolished diamonds from one Frik Terblanche. In all he bought 21 diamonds for a total amount of R63 000. Unbeknown to him (although, as will become apparent, he was alert to the possibility) Terblanche was a senior and experienced police officer attached to the Diamond and Gold Squad, who was operating as an undercover agent in a covert police operation known as Project Solitaire aimed at syndicates dealing unlawfully in diamonds in the Namaqualand region. [2] On the basis of Terblanche’s evidence Kotzè was convicted by the Regional Magistrates’ Court, Bellville on four counts of purchasing unpolished diamonds in contravention of s 20 of the Diamonds Act 56 of 1986. He was sentenced on each count to pay a fine of R8 000, with an alternative of 18 months imprisonment. In addition a further sentence of 18 months imprisonment was imposed, but suspended on certain conditions. An appeal against his conviction to the Cape High Court was dismissed. With the leave of that court he comes on further appeal to this Court. The appeal is confined to one against conviction only. The only ground advanced in support of the appeal is that in terms of s 252A(3) of the Criminal Procedure Act 51 of 1977 the magistrate should have declined to admit the evidence of Terblanche. In that event there would have been no admissible evidence of the transactions giving rise to the convictions and they would fall to be set aside. [3] The use of traps and undercover agents by the police, both for the prevention and the detection of crime, is long established, both here and overseas. However, because it can be seen as generating the crimes under investigation, it is regarded as controversial as a matter of principle and, even in circumstances where resort to its use may be thought to be acceptable, there is room for concern because the methods adopted by the trap or agent involve deception and can readily be abused. The underlying fear is that people who would not otherwise be guilty of criminal behaviour may be induced by the conduct of the trap or undercover agent to commit crimes and their reluctance to commit crime may be overborne by the conduct and inducements offered by the trap or undercover agent. Our courts have in a number of cases expressed concern about the conduct of traps and it was the subject of an investigation and report by the South African Law Commission.1 That in turn resulted in the statutory regulation of the admissibility of evidence derived from the activities of traps and undercover agents in the form of s 252A of the Criminal Procedure Act, although the section as ultimately enacted is in material 1 South African Law Commission Report, Project 84, The Application of the Trapping System. respects different from that proposed by the Law Commission. This appeal raises the interpretation and application of that section. [4] The background to the case is that in about 2000 the police decided to undertake Operation Solitaire to address the widespread problem of syndicates engaged in unlawful dealing in diamonds in the Namaqualand region. Terblanche, who at that stage held the rank of inspector, was selected as the undercover agent. He and his wife would move to Port Nolloth on the pretext that he had retired from the police force and was now a pensioner. There he would make himself known to local people and seek to become accepted as part of the local community, a process that it was anticipated would take some nine months. Thereafter he would engage with various suspects (and possibly others he came to suspect as a result of his activities) in ways that it was thought would lead to either the purchase or sale of unpolished diamonds in contravention of the Diamonds Act. In doing so he would garner the evidence that would then be used against those persons in subsequent criminal trials. The operation was expected to last some two years. [5] Kotzè was one such suspect whose name was given to Terblanche as a target to be approached. He is a prominent person in the Port Nolloth community having served for 27 years as a town councillor, 11 of them as mayor. He operates a motor retail business in the town and also runs a small shop and café from the same premises. Apart from this business he owns three farms, some 20 kilometres from Port Nolloth, and another farm across the border in Namibia that is leased to a company in the Anglo American group for a rental said at the trial to be in excess of R1 million per year. He owns and leases residential and business properties in Port Nolloth and elsewhere. He has over the years been involved in the diamond industry, in prospecting for, mining, cutting and polishing diamonds, although at the time of these events he had ceased these activities, apart from having a stake in two diamond mining operations for which a licence was held in his son’s name and a share in a diamond cutting business. Overall it is clear that he is person of financial substance and some wealth. He is also involved in the local congregation of the Nederduitse Gereformeerde Kerk and testified that it was customary for him and his wife to entertain members of the congregation at their home after the services each Sunday with tea and coffee and general hospitality and discussion about church affairs and religious matters. This hospitality loomed large in the evidence in this case. [6] Terblanche arrived in Port Nolloth on 1 August 2000 and he met Kotzè for the first time on that day in the course of looking for suitable accommodation. Apparently he and his wife had first approached an estate agent in the town but she had nothing available that seemed suitable and, according to Terblanche, suggested that he should approach Kotzè. Although some point was made of this meeting in cross- examination, Kotzè himself did not regard it as odd or unusual, which is not surprising because he rented out houses through an agency operated by his daughter. Kotzè suggested a house owned by his mother but this was unsuitable and the following day the Terblanches found a house at McDougall’s Bay. In the course of effecting introductions Terblanche told Kotzè that he was a retired policeman, to which he says Kotzè responded by saying; ‘Ek is ʼn smokkelaar.’2 Kotzè said he had no recollection of making such a comment but accepts that he might have done so in jest. However, Terblanche seems to have taken it seriously as it was conveyed by him to his superiors in the course of the operation. 2 ‘I am a smuggler.’ [7] After this initial incident Terblanche and his wife moved into the house they had found on 7 September 2000 and settled into life in and around Port Nolloth on the basis of his cover story that he was a pensioner. It appears that the community accepted this story at face value. The evidence does not deal in detail with any matters other than the development of his relationship with Kotzè, but he must have been engaged in other activities as at the end of the operation nearly two years later 34 people were arrested for offences relating to unlawful dealing in diamonds and, apart from the present one, he gave evidence in a number of trials arising out of these arrests. [8] Terblanche established a close and friendly relationship with Kotzè. He would regularly visit him at his business both to buy a newspaper and other small items and to chat socially and came to know him and his family, including Kotzè’s elderly mother with whom he would on occasions sit and have coffee. He and his wife attended the NGK church although their affiliation had been with the Afrikaanse Protestante Church. They were from time to time invited with other members of the congregation to join Kotzè and his wife for tea at their home after service. Terblanche ascertained the birthdays of Kotzè’s children and would telephone and wish Kotzè well on these occasions. At a later stage of the relationship they discussed personal matters such as the death of Terblanche’s sister in January 2001, and later still the death of one of Kotzè’s children and certain fears that Terblanche had about his health. On one occasion in September 2001 Terblanche and his wife, together with Mrs Kotzè, spent the day looking at the flowers for which the area is renowned, although business prevented Kotzè from joining them. However apart from the visits after church and occasional meals at the Kotzè home they did not visit one another’s homes. The only occasions on which Kotzè went to the Terblanche home were pursuant to two of the transactions giving rise to the charges against him. [9] The first transaction occurred on 14 July 2001 when Terblanche sold four unpolished diamonds to Kotzè for a price of R10 000. He describes the circumstances in which that came about as follows. On 4 April 2001 after a visit to Johannesburg Kotzè asked where he had been. He told him he had been visiting his children and on the way back had stayed with a diamond cutter friend whom he wanted to repair his wife’s ring. Kotzè’s response was to say that if Terblanche had that type of problem he could have helped and then, according to Terblanche, added that he would also have a diamond cut and polished for him.3 Kotzè also said that if Terblanche had any other unpolished diamonds he should bring those as well. There is some confusion in Terblanche’s evidence whether this latter statement was made on 4 April 2001 or during a subsequent conversation on 10 May 2001, when he approached Kotzè on the instructions of his handlers to ascertain whether the earlier offer to have a diamond polished still stood and, if so, what it would cost. Be that as it may, Terblanche’s handlers were prompted by his report of these exchanges with Kotzè to apply to the relevant authorities to use four unpolished stones for the purpose of Terblanche making an approach to Kotzè to have one stone polished and to sell three more. This was approved. [10] The sale was made on 14 July 2001 when, according to his evidence, Terblanche went to Kotzè’s business premises and in the latter’s office showed him the stones. Kotzè told him that he had an 3 ‘Hy sal ook vir my ʼn diamant slyp.’ appointment and that the stones could either be left there or taken away by Terblanche and brought back on his return. Terblanche left the diamonds in a desk drawer that Kotzè assured him was safe and returned about 15 minutes later to be told that the diamonds had been sent to be valued. When a message was received that the diamond cutter was not available Kotzè asked if he would sell all four stones and Terblanche said he would. He asked Kotzè to make him an offer and the latter wrote R10 on a desk calendar. Terblanche understood this to mean R10 000, which he accepted. Kotzè then sent his son to fetch the money and paid it to Terblanche, who left the premises and immediately reported the transaction to his superior. [11] The second sale occurred on 7 September 2001. Terblanche testified that he visited Kotzè’s business premises on 18 August 2001 and was asked if he had brought anything to sell.4 Terblanche answered in the negative but assumed that the query related to unpolished diamonds and so on 1 September he told Kotzè that he had been offered a packet of diamonds but didn’t have the money for them. He hoped that Kotzè would offer to take over the transaction, as this would enable him to have a second person present. The reason for this was that the recordings he had been trying to make on the occasion of the earlier sale were not satisfactory. He said that Kotzè told him that if he were short of cash for this purpose he would assist him. [12] Terblanche returned on 7 September with four diamonds and wearing a coat with pockets in which he had a video camera. He told Kotzè he had brought him something and showed him the diamonds. Kotzè’s response was to say in a whisper that he hoped that Terblanche 4 ‘Hy het my gevra of ek iets gebring het om te verkoop.’ was not trying to catch him. Kotzè then put the diamonds in the drawer of his desk and they drove out to his farm where he had something to attend to. During this journey Kotzè questioned Terblanche about his source for the stones and also his background. Terblanche told him that he had left the police force on early retirement under something of a cloud. When they returned from the farm Kotzè said that he would give him R10 000 for the stones. At the business premises a friend of Kotzè’s, a Dr Coetzer, was waiting and Kotzè left him and Terblanche in conversation while he went and fetched the money. On his return Terblanche counted the money and then left. Dr Coetzer gave evidence and confirmed the payment and said that Kotzè told him after Terblanche left that he had got a ‘bargain’ and showed him a stone that Coetzer thought was an unpolished diamond. [13] The third sale was effected on 14 December 2001 and involved seven diamonds and the payment of R26 000 by Kotzè to Terblanche. Kotzè had been away for much of the time after the second transaction. On 7 December 2001 Inspector Bruwer, who was part of the covert operation, gave Terblanche seven unpolished diamonds with instructions to offer them to Kotzè. On 14 December 2001 Terblanche took the diamonds and went to Kotzè’s business premises. He says that when he arrived there Kotzè took him into his office and asked if he had again obtained unpolished diamonds.5 Terblanche confirmed that he had and showed the packet of diamonds to him. He assumed Kotzè would want to value the diamonds and asked when he should return for his money. Kotzè said that he would bring it to his house. That evening Kotzè came to his house and gave him R25 000 and said that he would pay him another R1 000, which he should collect the next day from his business. 5 ‘Hy het my gevra of ek al weer ongeslypte diamante gekry het’ The events that evening were recorded on video and will be referred to in more detail later in this judgment. [14] The fourth and last transaction took place on 10 February 2002 and involved the sale of six unpolished diamonds for a price of R17 000. According to Terblanche’s evidence its background lay in Inspector Bruwer giving Terblanche the diamonds with instructions to offer them to Kotzè. In discussion with Captain Farber, to whom Terblanche was reporting, it was decided that it would be best if he could bring Kotzè to his home rather than trying to do a deal at the latter’s business. This was no doubt due to the problems that had been experienced with recordings in the latter environment and the availability of the video cameras at the house. On 24 January 2002 Terblanche accordingly left a message for Kotzè at the business to come to his house. By chance, as he was driving home, he encountered Kotzè driving in the opposite direction. He stopped him and asked him to come to his house and drove off to wait for him. Shortly thereafter Kotzè arrived and after a brief social conversation Terblanche took him to his office to view the diamonds. As they left the lounge Kotzè sought reassurance from Mrs Terblanche that her husband was not still a policeman and trying to trap him. He then went into Terblanche’s office where he was shown the diamonds. Kotzè took the diamonds and left after a lengthy and relaxed conversation with the Terblanches. No price was discussed at this time. Once again the events were recorded on video. [15] The following day Terblanche went to Kotzè’s business premises and whilst they were sitting in the office Kotzè asked him where he had got the diamonds he had taken the previous day. He told Terblanche that four black men driving a red VW Golf had approached two Portuguese men in the town in a trap using the same diamonds. (There had in fact been an arrest of three men, two of whom were Portuguese, at a bakery in the town as a result of a trap and this appears to have been well known.) Terblanche told him that in that event he should give him back the diamonds and he would sell them to a contact in Johannesburg. Kotzè gave them back to Terblanche saying that he valued them at R17 000. [16] Terblanche said that two Sundays later, on 3 February 2002, when he stopped at Kotzè’s shop to buy a newspaper, Kotzè asked him if he still had the diamonds. Terblanche told him that he intended to sell them to his contact in Johannesburg and Kotzè responded that if he decided not to do so his offer to buy them for R17 000 stood. The following Saturday, 9 February, Terblanche went to Kotzè’s premises and told him that he had cancelled his visit to Johannesburg and if Kotzè was still interested the diamonds were available. He said that he would come and see Kotzè on the following Monday. On the Monday evening at about 10.00 pm Kotzè arrived at his house and said that he had brought him some figs. He told Terblanche that he should give him the diamonds but Terblanche made an excuse about their accessibility and instead took them to him at the business the following day. Kotzè took the diamonds and paid him the R17 000. [17] Much of this evidence was not disputed by Kotzè. However in the case of each sale he disputed the circumstances in which it had come about. He said that Terblanche had become an intimate friend of his and that they had shared many confidences. He claimed to have been instrumental in bringing Terblanche and his wife back to a life of faith by inviting them to the NGK and encouraging a new religious commitment.6 He depicted himself as a person of an emotional and extremely generous disposition7 who had been completely taken in by Terblanche’s presentation of himself as a man who had been forced to leave the police force early with a diminished pension and no medical aid and who was battling financially. His impression, so he said, was that Terblanche was in a fairly desperate financial position8 and needed to do things to increase his income. He laid stress on the fact that Terblanche peddled fish in a township called Sanddrif, some eighty kilometres away. He also alleged that on at least five occasions he lent Terblanche money in amounts varying between R1 000 and R3 000, which was always repaid. This was hotly disputed by Terblanche and no record of the loans was produced. [18] Against that background of close friendship and apparent financial need Kotzè claimed that on each occasion that he bought unpolished diamonds from Terblanche the initiative for the transaction had come from Terblanche. He says that Terblanche incessantly brought the subject of diamonds into the conversation even though he begged him to desist. According to him each time a sale was concluded, Terblanche had approached him with a tale of financial woe and was insistent that Kotzè should purchase the diamonds so as to assist him. Against his better judgment and contrary to his religious beliefs and a spiritual commitment he had made at some time in the past never again to be engaged in the 6 Terblanche’s more prosaic explanation was that he had liked the way in which the minister at the NGK preached and had decided to attend worship there at the invitation of the minister. He also said that the Afrikaanse Protestante Church was only a home church where worship was conducted by an elder and that when it was pointed out to him as the place that flew the old national flag he decided that it involved itself in politics. None of this evidence was challenged and Kotzè’s claim was not put to either him or his wife. 7 This contrasted with the impression of Dr Coetzer who said that whilst Kotzè was friendly he always had the impression that his approach was coloured by an attitude of ‘what’s in it for me’. 8 ‘Finansieël dit nie breed het nie.’ illegal buying and selling of diamonds, he succumbed to Terblanche’s persistence on each occasion out of a spirit of Christian charity and a desire to help someone in need. His broad contention, as put to Terblanche in cross-examination by his leading counsel, was that: ‘...hierdie hele wyse waarop u te werk gegaan het met die beskuldige, die misbruik wat u gemaak het van die kerk, van sy vriendskap, al die dinge wat ek reeds aan u gestel het, duidelik daarop dui dat u nie net die geleentheid wou skep vir hom om ʼn misdryf te pleeg nie, u wou hom betrap en u het gesorg dat u hom ver genoeg uitlok, dat ʼn man met sy tipe persoonlikheid sal val vir hierdie jammerhartige figuur wat die paar diamante wou verkoop?’9 [19] The magistrate ruled at the end of a trial within a trial that the evidence of Terblanche was admissible. It is unfortunate that in deciding to hold a trial within a trial the magistrate did not require Kotzè to furnish the grounds on which he challenged the admissibility of the evidence, as should have been done in terms of the proviso to s 252A(6). That might have focussed attention on the pertinent matters in dispute and limited the lengthy examination and cross-examination over a number of days of Terblanche and Kotzè, as well as obviating the need for some other evidence to be led. Instead a vast array of issues was traversed at considerable length and in great detail but at the end of the day most of this had little bearing on the central issue of admissibility. It is important for presiding officers faced with challenges to the admissibility of the evidence of a trap to be aware of and apply subsec (6), in terms of which the accused must ‘furnish the grounds on which the admissibility of the evidence is challenged’. The matter may then, in terms of subsec (7), be adjudicated as a separate issue in dispute, ie, during a trial within a trial. 9 ‘This whole way in which you went to work with the accused, the abuse you made of the church, his friendship, all the things I have put to you, all show clearly that you did not confine yourself to creating an opportunity to commit the offence, but you wanted to trap him and you made sure that you tempted him sufficiently that a man with his type of personality would fall for this type of sorry figure who wanted to sell a few diamonds?’ (My translation.) [20] Subsection 6 provides that the burden of proof to show that the evidence is admissible rests on the prosecution and this burden must be discharged on a balance of probabilities. This refers to the burden resting on the prosecution to prove the facts on the basis of which it contends that the evidence is admissible, whether under subsec (1) or subsec (3). The decision as to its admissibility is a legal decision taken in accordance with the provisions of s 252A in the light of the proved facts. Whilst the section refers to the burden being discharged on a balance of probabilities, it is in my prima facie view incompatible with the constitutional presumption of innocence and the constitutional protection of the right to silence. Those rights must be seen in the light of the jurisprudence of the Constitutional Court, in which it has been held that their effect is that the guilt of an accused person must be established beyond reasonable doubt.10 That a confession was made freely and voluntarily and without having been unduly induced thereto must be proved beyond reasonable doubt and I can see no practical difference between that case and the case where a conviction is based on the evidence of a trap. Each deals with the proof of facts necessary to secure the admission of the evidence necessary to prove the guilt of the accused. In my prima facie view therefore, and in the absence of argument, in order for the evidence of a trap to be admitted, it is necessary that the trial court be satisfied that the basis for its admissibility has been established beyond a reasonable doubt. That was the case here, for the reasons set out below, so this issue does not affect the outcome of this appeal. 10 S v Zuma & others 1995 (2) SA 642 (CC) para 25. The cases in which the Constitutional Court has reaffirmed the principle are collected in S v Manamela & another (Director-General of Justice intervening) 2000 (3) SA 1 (CC) fn 30. [21] The starting point for considering the admissibility of Terblanche’s evidence is section 252A(1) of the Act, which provides that: ‘(1) Any law enforcement officer, official of the State or any other person authorised thereto for such purpose (hereinafter referred to in this section as an official or his or her agent) may make use of a trap or engage in an undercover operation in order to detect, investigate or uncover the commission of an offence, or to prevent the commission of any offence, and the evidence so obtained shall be admissible if that conduct does not go beyond providing an opportunity to commit an offence: Provided that where the conduct goes beyond providing an opportunity to commit an offence a court may admit evidence so obtained subject to subsection (3).’ The section adopts the recommendation of the Law Commission that it is inappropriate to introduce a defence of entrapment in South Africa and preferable to deal with the problems surrounding the use of traps by way of an exclusionary rule of evidence.11 Accordingly it excludes the possibility of such a defence by explicitly stating that the use of a trap or engaging in undercover operations in order to detect, investigate or uncover the commission of an offence is permissible. It is not correct to say, as does one leading commentator,12 that it is an authority to use traps and undercover operations ‘in certain circumstances’. There is no such qualification in the section. Absent a constitutional challenge – and there is no such challenge in the present case – there is no room for an argument that the use of a trap or the undertaking of undercover operations is unlawful in South Africa. [22] The section deals with both traps and undercover operations. Whilst these usually go together there will be cases where an undercover operation may involve no element of a trap. Thus for example the 11 That is also the approach in Australia, Ridgeway v R (1995) 184 CLR 19; the United Kingdom, R v Looseley [2001] 4 All ER 897 (HL) and Singapore, Mohamed Emran Bin Mohamed Ali v Public Prosecutor [2009] 2 LRC 484. 12 E Du Toit, F J De Jager, A Paizes, A St Q Skeen and S van der Merwe, Commentary on the Criminal Procedure Act (Revision service 42, 2009) para 1, p 24-131. infiltration of an undercover agent into a gang planning a bank robbery, a cash-in-transit heist or the overthrow of the government will not necessarily involve any element of a trap, but may merely be an exercise in obtaining information. Nonetheless it may involve infringements of rights to privacy – as with the use of a telephone tap or some other form of listening device – and could potentially be subject to constitutional challenge. The section explicitly addresses that situation and provides that such actions are permissible. It also recognises that undercover operations may have elements of a trap and hence treats the two together. The present case is a classic instance of an undercover operation that also involves the use of a trap. [23] The section lays down two approaches to the admissibility of evidence obtained as a result of the use of a trap. Evidence is automatically admissible if the conduct of the person concerned goes no further than providing an opportunity to commit the offence. If the conduct goes beyond that the court must enquire into the methods by which the evidence was obtained and the impact that its admission would have on the fairness of the trial and the administration of justice in order to determine whether it should be admitted. [24] It must be stressed that the fact that the undercover operation or trap goes beyond providing the accused person with an opportunity to commit the crime does not render that conduct improper or imply that some taint attaches to the evidence obtained thereby. All that it does is create the necessity for the trial court to proceed to the enquiry mentioned in the previous paragraph. I stress this because there was a misconception in this regard at the trial. At various places in the cross-examination of Terblanche it was put to him that the section imposes constraints upon what may be done pursuant to a trap and this suggestion is repeated before us in the heads of argument for Kotzè. In summarising the argument in his practice note counsel said: ‘Die getuienis van die lokvink behoort as ontoelaatbaar gereël te word aangesien die optrede van die lokvink verder gegaan het as die blote skepping van ʼn geleentheid om ʼn misdryf te pleeg.’13 This is a misconception as to the effect of s 252A(1) and it is as well therefore to lay it to rest. Section 252A(1) does not purport to prescribe the manner in which undercover operations or traps are to be conducted by the police. It merely distinguishes on the basis of the manner in which the trap is conducted between instances where the evidence thereby obtained is automatically admissible and instances where a further enquiry is called for before the question of admissibility can be determined. [25] Section 252A(1) prescribes a factual enquiry into whether the conduct of the trap goes beyond providing an opportunity to commit an offence. Section 252A(2) describes a number of features that may indicate to a trial court that the undercover operation or trap went beyond providing an opportunity to commit an offence. It was conceded by the prosecution and held by both the magistrate and the court below that the conduct of Terblanche and this undercover operation went beyond merely providing the opportunity for the commission of the offence. Unfortunately the findings of both courts on this aspect were not fully reasoned. A closer examination of the provisions of sections 252A(1) and (2) is therefore desirable. 13 ‘The evidence of the trap ought to be ruled inadmissible because the conduct of the trap went further than merely providing an opportunity to commit an offence.’ (My translation) [26] The starting point is that, in each case where the evidence of a trap is tendered and its admissibility challenged, the trial court must first determine as a question of fact whether the conduct of the trap went beyond providing an opportunity to commit an offence. It does that by giving the expression its ordinary meaning and makes its decision in the light of the factors set out in subsec (2). I accept that if one simply peers at the language of s 252A(2) there appears to be an anomaly arising from the fact that some matters logically anterior to the conduct of the trap itself are to be taken into account in considering whether it went beyond providing an opportunity to commit an offence.14 However there are always dangers in such a linguistic analysis removed from the context of the section as a whole and the potential anomaly may on closer examination be more apparent than real. Thus the fact that the trap was set without the authority of the Director of Public Prosecutions or that the conditions set by the Director were disregarded may well indicate that the trap went beyond providing an opportunity to commit an offence. Otherwise they will be irrelevant. The fact that the offence in question is of a minor nature may indicate that the effect of the trap is to place disproportionate temptation in the path of the accused, so that it went beyond providing an opportunity to commit an offence. [27] If one examines the context of subsec (2) it is clear that the legislature was concerned to identify situations that would be relevant to and bear upon the factual enquiry postulated in subsec (1). It adopted language taken from a leading United States decision on entrapment15 in 14 The anomaly is dealt with in Du Toit et al, 24-134 to 24-135 and has been mentioned in some judgments. S v Odugo 2001 (1) SACR 560 (W) paras 32–34; S v Makhanya & another 2002 (3) SA 201 (N) at 206H-I; S v Reeding & another 2005 (2) SACR 631 (C) at 637i-j. 15 Sorrels v United States (1932), 287 US 435. Other United States sources use the same language as appears from the Law Commission’s report. The adoption of that language does not indicate an adoption of meaning. formulating the factual enquiry to be made. In its judgment the reference to the trap not going beyond affording an opportunity to commit an offence describes a situation where no issue exists about the propriety of the trap or the admissibility of the evidence derived therefrom. It appended in subsec (2) an open16 list of factors relevant to the factual enquiry. Those factors must be viewed holistically and weighed cumulatively as different factors may point towards different answers. Not all of the factors will be relevant in every case. Sight must not be lost of the fact that there is only a single question to be answered, namely, whether the conduct of the trap went beyond providing an opportunity to commit an offence. If, on considering all relevant factors, the conclusion is that the conduct of the trap went beyond providing an opportunity to commit the offence, the enquiry moves on to s 252A(3) because, in the legislature’s judgment, that conclusion may cast doubt upon the propriety of the trap and the evidence obtained thereby, so that the situation requires further scrutiny before the evidence is admitted. If the factors in subsec (2) are not taken as a checklist17 but merely as matters that may be relevant to the proper determination of the factual enquiry, taking into account in any particular case those that are relevant on the facts of that case, they ought to pose few problems. What will be required in every case is a careful analysis of the evidence18 in order to determine whether the conduct of the trap goes beyond the limit set by the legislature. [28] Although it is difficult to discern the reasons for the magistrate’s decision on this primary issue there seem to be three matters that could 16 ‘Open’ because it ends with sub-para (n), which includes ‘any other factor which in the opinion of the court has a bearing on the question’. 17 As this Court has already said should not be the case. S v Hammond [2007] ZASCA 164; [2007] SCA 164 (RSA); 2008 (1) SACR 476 (SCA) para 26. 18 As occurred in S v Matsabu [2008] ZASCA 149; [2008] SCA 149 (RSA);2009 (1) SACR 513 (SCA) paras 16 and 17. underlie it. They are that on the description of the operation a number of attempts were to be made to trap Kotzè (subsec (2)(e)). Secondly, in certain respects, sometimes inadvertently and sometimes deliberately, Terblanche acted outside the ambit of the conditions attaching to the approval of the undercover operation by the representatives of the Director of Public Prosecutions (subsec (2)(a)). Thirdly, there can be no doubt that he was able to make the approaches that he did to Kotzè in consequence of having formed a friendship with him and this could have been construed as exploiting that friendship (subsec (2)(h)). The other grounds, approached holistically, indicate at least prima facie that Terblanche did not go ‘beyond providing an opportunity to commit an offence’. For example, the DPP’s prior approval was obtained; buying of unpolished diamonds in the area is prevalent; there are no other techniques for the detection of the offence; an average person would not have succumbed to the temptation because the parcels were small and the profit on each very small; and, as far as timing is concerned, the police had more than enough reason to suspect that the appellant was involved in illicit diamond buying to justify the laying of a trap. [29] There are difficulties with each of the three factors mentioned above and hence with the magistrate’s conclusion on this question. As to the first, repeated attempts did not have to be made before Kotzè succumbed, whether on the first or later occasions. He accepted the first offer immediately and the others equally readily. When he resisted the operation was terminated. As to the second, for reasons dealt with later, any non-compliance had no effect on the conduct of the trap. As to the third, I deal below with Kotzè’s version of the facts and reject it. It follows that Terblanche did not exploit his relationship with Kotzè. In my view therefore it would appear that the finding that Terblanche’s conduct went further than providing an opportunity to commit these offences was incorrect. However, as the prosecution did not press this issue and had conceded the point in both courts below, I turn to the enquiry under s 252A(3). [30] Turning then to s 252A(3) it reads as follows: ‘(3)(a) If a court in any criminal proceedings finds that in the setting of a trap or the engaging in an undercover operation the conduct goes beyond providing an opportunity to commit an offence, the court may refuse to allow such evidence to be tendered or may refuse to allow such evidence already tendered, to stand, if the evidence was obtained in an improper or unfair manner and that the admission of such evidence would render the trial unfair or would otherwise be detrimental to the administration of justice. (b) When considering the admissibility of the evidence the court shall weigh up the public interest against the personal interest of the accused, having regard to the following factors, if applicable: (i) The nature and seriousness of the offence, including: (aa) whether it is of such a nature and of such an extent that the security of the State, the safety of the public, the maintenance of public order or the national economy is seriously threatened thereby; (bb) whether, in the absence of the use of a trap or an undercover operation, it would be difficult to detect, investigate, uncover or prevent its commission; (cc) whether it is so frequently committed that special measures are required to detect, investigate or uncover it or to prevent its commission; or (dd) whether it is so indecent or serious that the setting of a trap or the engaging of an undercover operation was justified; (ii) the extent of the effect of the trap or undercover operation upon the interests of the accused, if regard is had to: (aa) the deliberate disregard, if at all, of the accused’s rights or any applicable legal and statutory requirements; (bb) the facility, or otherwise, with which such requirements could have been complied with, having regard to the circumstances in which the offence was committed; or (cc) the prejudice to the accused resulting from any improper or unfair conduct; (iii) the nature and seriousness of any infringement of any fundamental right contained in the Constitution; (iv) whether in the setting of a trap or the engagement of an undercover operation the means used was proportional to the seriousness of the offence; and (v) any other factor which in the opinion of the court ought to be taken into account.’ [31] Subsection (3)(a) establishes two criteria for determining the admissibility of evidence obtained through the use of a trap or undercover agent. They are, firstly, whether the evidence was obtained in an improper or unfair manner and, secondly, whether its admission would render the trial unfair or would otherwise be detrimental to the interests of justice. As they are joined conjunctively it appears at first sight that both must be answered in the affirmative if the evidence is to be excluded, but I reserve any final decision on that question as there are arguments pointing in the opposite direction and we have not had the benefit of full argument on it. The language of the section suggests that such exclusion is discretionary (‘the court may refuse to allow such evidence to be tendered or may refuse to allow such evidence already tendered to stand…’) but insofar as there is a discretion it is a narrow one. The power of the court to exclude the evidence where the relevant circumstances are established will ordinarily be coupled with a duty to exclude it.19 This in turn has implications for the powers of this court on appeal but it is unnecessary to explore these. 19 Schwartz v Schwartz 1984 (4) SA 467 (A) at 473H-474E. [32] Subsection (3)(b) sets out the factors relevant to the exercise of the court’s power to exclude the evidence. Again this is not a closed list as the court may take into account any factor that in its opinion ought to be taken into account in that regard. In this case Kotzè’s counsel confined himself to the following matters. He accepted that the nature of the offence and its seriousness is of such a nature that it is difficult to catch perpetrators without the use of traps.20 He focussed his attack on the nature of the approaches made to Kotzè as well as the use – or abuse as counsel would have it – of the relationship Terblanche had formed with Kotzè. He also argued that it appeared that certain affidavits were back- dated and characterised Terblanche as an unreliable and untrustworthy witness with a poor memory who adopted improper and unconventional methods in going about his task. Lastly reliance was placed on the failure to observe strictly the conditions attached by the Director of Public Prosecutions to the authority to pursue the undercover operation and particularly the fact that the audio and video recordings of encounters between Kotzè and Terblanche were incomplete in the sense that not every encounter between Terblanche and Kotzè was recorded and deficient in that large parts of the sound recordings were inaudible. [33] In assessing these submissions the necessary starting point is the evidence of Kotzè in regard to the circumstances in which the transactions came about and his motivation for buying the diamonds. The magistrate disbelieved his evidence in this regard as did the court below and as do I. As counsel accepted, there is not a shred of objective evidence in the material captured on tape and video recordings that supports the notion that any of these transactions came about as a result 20 That traps are necessary for this purpose was accepted over a century ago by Innes CJ in Myers and Misnum v R 1907 TS 760 at 762, a view reaffirmed by the Law Commission. of a plea by Terblanche that he had fallen upon hard times. Nor is there any evidence that Kotzè resisted blandishments from the side of Terblanche but that his resistance was overcome by such blandishments or pleas of financial hardship. There is nothing that indicates that Kotzè was anything other than a willing participant in the transactions. Indeed the recordings, both audio and video, reflect that this was the case. They show a man who was at ease with his surroundings and with what he was engaged in. The tone of conversation was always friendly and jovial and the moment they turned to discussions of the business at hand Kotzè would drop his voice and conduct proceedings in a whisper as though he was aware of the risk that the discussions might be recorded. Although he claimed that in relation to the fourth transaction he had been brought to the Terblanche house by a gross misrepresentation, the videos give this the lie. If anything he is the dominant figure in the transactions in accordance with the picture one derives from the background sketched in paragraph [5] of this judgment. [34] All this fell to be taken with Kotzè’s references to the possibility that Terblanche might try and trap him or arrest him and his discreet enquiries of Mrs Terblanche whether her husband was still a policeman. These indicate someone who was well aware that he was engaged in unlawful conduct and was taking precautionary measures against the possibility that this might be a trap. Added to this is his denial of the transactions when confronted by Terblanche at the time of his arrest; his dishonest evidence at a bail hearing that the amounts of R26 000 and R17000 were loans and his unwillingness to disclose what happened to the diamonds he bought from Terblanche. Cumulatively it means that his evidence was rightly rejected and his counsel made no attempt to reverse that conclusion. He did however seek to contend that we should nonetheless accept Kotzè’s version of what transpired prior to the first transaction, but that evidence is of a piece with the evidence that was rejected and cannot be separated from it. It too falls to be rejected. [35] The rejection of Kotzè’s evidence is destructive of the contention that the evidence was obtained unfairly by virtue of the methods adopted by Terblanche and is likewise destructive of the submission that its admission rendered the trial unfair or was detrimental to the administration of justice. That left counsel to concentrate his submissions on areas of weakness in Terblanche’s evidence such as the absence of a note of the offer to cut and polish a diamond, the backdating of certain statements and certain contradictions that were identified in great detail in the heads of argument but do not require repetition here. None of these affect the conclusion that Kotzè was a willing participant in the admitted purchase of diamonds from Terblanche. Nor does any of it bear upon the propriety or fairness of the methods adopted to obtain the evidence of those transactions, or the fairness of the trial. [36] That left, as the last point in the argument, the proposition that because Terblanche and other members of the team conducting this undercover operation departed in certain respects from the conditions attaching to the Director of Public Prosecutions’ authorisation for Operation Solitaire the evidence obtained as a result of Terblanche’s actions should be excluded. Counsel rightly did not pursue a contention advanced in the heads of argument that these departures disregarded applicable legal and statutory requirements.21 Part of this argument, based as it is upon the proposition that Terblanche induced Kotzè to enter into the transactions by playing upon the latter’s tender emotions, fails with 21 S 252A(3)(b)(ii)(aa). the rejection of Kotzè’s evidence in this regard. As to the balance, the principal criticism related to the fact that Terblanche had not sought to record all of his encounters and conversations with Kotzè, starting from their first meeting when the Terblanches were seeking accommodation, but only those where Kotzè was purchasing diamonds. I am not sure that it was the intention of the Director of Public Prosecutions’ conditions that every encounter should be recorded inasmuch as it was manifestly impractical to expect this of Terblanche during an undercover operation in which he was to spend nine months establishing his new persona and two years engaged in undercover activities whilst maintaining the public image of a pensioner. However, even if that was the intention there is nothing to show that any failure in this regard was, as contended by counsel, detrimental to the interests of justice or rendered the trial unfair. The point is accordingly rejected as is the entire challenge to the admissibility of the evidence of Terblanche. [37] My conclusion is that the evidence of Terblanche was correctly admitted. In the result Kotzè’s appeal against his conviction on the four counts under s 20 of the Diamonds Act is dismissed. M J D WALLIS ACTING JUDGE OF APPEAL APPEARANCES FOR KOTZÈ : F J MURRAY Instructed by Schreuders, Springbok. Symington & De Kok, Bloemfontein FOR THE RESPONDENT: L J BADENHORST Instructed by Director Public Prosecutions, Cape Town Director Public Prosecutions Bloemfontein

Supreme Court of Appeal of South Africa MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: Tuesday 15 September 2009 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. NICOLAAS PETRUS KOTZÈ v THE STATE In a judgment delivered today the Supreme Court of Appeal dismissed an appeal against Mr Kotzè’s conviction in the Bellville Regional Magistrates’ Court on 4 counts of purchasing unpolished diamonds in contravention of s20 of the Diamonds Act 56 of 1986. Over a period of some 8 months from July 2001 to February 2002 and on four separate occasions Mr Kotzè purchased a total of 21 unpolished diamonds from a police undercover agent, Inspector Frik Terblanche, for a total price of R63 000. The basis for the conviction was the evidence of Inspector Terblanche. The appeal raised a challenge to the admissibility of this evidence in terms of s 252A of the Criminal Procedure Act. Mr Kotzè contended that Terblanche had formed and then exploited a close personal relationship with him by holding himself out as a pensioner who had fallen upon hard times financially. He claimed that Terblanche importuned him to buy diamonds and that on each occasion and against his better judgment he succumbed to his pleas. The trial court rejected this evidence as inconsistent with the content of audio and video recordings of Terblanche’s dealings with Kotzè and certain other objective facts and the Supreme Court of Appeal agreed. It held that the evidence was admissible under s252A of the Criminal Procedure Act, as it had not been improperly obtained and its admission did not render Kotzè’s trial unfair nor was it detrimental to the administration of justice. The convictions were accordingly upheld.

1833

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 125/10 ANGLORAND SECURITIES LIMITED Appellant and DIVHANI DAVID MUDAU First Respondent RUDOLPH RASHAMA Second Respondent ____________________________________________________________ Neutral citation: Anglorand Securities Ltd v Mudau & another (125/10) [2011] ZASCA 76 (26 May 2011) BENCH: HEHER, PONNAN, MAYA JJA, MEER and PLASKET AJJA HEARD: 20 MAY 2011 DELIVERED: 26 MAY 2011 SUMMARY: Prescription Act 68 of 1969 – prescription – commencement of running of – whether interrupted. ____________________________________________________________ ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Limpopo High Court (Thohoyandou) (Hetisani J sitting as court of first instance). 1. The appeal is allowed with costs. 2. The order of the court below is set aside to be replaced with: ‘The second defendant’s special plea of prescription is upheld and the plaintiff’s claim is dismissed with costs.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ PONNAN JA (HEHER, MAYA JJA, MEER and PLASKET AJJA concurring): [1] This appeal raises two linked questions: the first concerns the commencement of the running of prescription in regard to the claim of Mr Divhani David Mudau, the plaintiff in the court below (the plaintiff), against the present appellant, Anglorand Securities Ltd (Anglorand); and the second is whether an interruption took place. [2] Those issues arise for determination against the following backdrop. The plaintiff instituted action in the Limpopo High Court (Thohoyandou) against Anglorand as the second defendant and one of its former employees Mr Rudolph Rashama (Rashama) as the first defendant. Rashama took no part in the proceedings. The basis of the plaintiff’s claim is contained in paragraphs 5 – 11 inclusive of his declaration, which reads: ‘5 During or about December 2001, and at THOHOYANDOU, the 2nd Defendant being represented by Rudolph Rashama (1st Defendant) who was at that time within the scope of his employment, and the Plaintiff acting personally, entered into an oral agreement of sale of shares and investment in terms of the following:- 5.1.1 That the Plaintiff must deposit an amount of R160 000-00 (One Hundred and Sixty Thousand) rands to the 2nd Defendant’s banking account no: 4052178047 (ABSA) Bank Limited being for sale of shares which the Plaintiff was purchasing from Johannesburg Stock Exchange. 5.1.2 That the Defendant(s) will buy shares for the Plaintiff immediately after the Plaintiff deposited the said money into the 2nd Defendant’s Banking account and invests the remaining amount with any banking institution in the Republic of South Africa. 5.1.3 That the Defendant(s) shall within 7 (seven) working days after deposit of the said money provide the Plaintiff with investment booklet reflecting the rate of interests which will accrue to the money deposited by the Plaintiff. 5.1.4 That the Plaintiff shall have the right to withdraw the capital amount deposited at anytime after the period of 3 (three) months from the date of the deposit of the money. 5.1.5 That the Defendant(s) will at all the material times act as agents for the Plaintiff in the said transaction. On or about the 04th day of December 2001, the Plaintiff duly deposited an amount of R160 000-00 (One Hundred and Sixty Thousand) rands to the 2nd Defendant’s Banking account no: 4052178047 (ABSA) Bank Limited at THOHOYANDOU branch as per agreement between the parties. From the period 15th of December 2001 until the period March 2002, the Plaintiff was at all the material times thereto keep on checking his postal box to see if investment booklet had already been sent to him from the Defendants. During the period April 2002, the Plaintiff went to the 2nd Defendant’s premises to enquire about his shares, investment and the money which he had deposited into the 2nd Defendant’s Banking account. At the 2nd Defendant’s premises, the Plaintiff was advised by one of the directors of the 2nd Defendant that his money is reflecting in the 2nd Defendant banking account but same could not be withdrawn at that time since insurance claim had been lodged against Rudolph Rashama for an alleged fraud and that repayment of the Plaintiff’s money would be effected within 6 (six) month. During November 2002, on the 2nd Defendant’s premises, the Plaintiff demanded withdrawal of his capital amount which he had deposited into the 2nd Defendant’s banking account, and one of the directors of the 2nd Defendant advised the Plaintiff that cheque of the capital amount will be drawn on Plaintiff’s favour within 6 (six) month. Despite promises on several occasions and on demand, 11.1 The cheque was never drawn to the Plaintiff’s favour from the Defendants; 11.2 Investment booklet(s) was never sent to the Plaintiff from the Defendants; 11.3 Shares were never bought for the Plaintiff from Johannesburg Stock Exchange or anywhere by the Defendants; 11.4 the Defendants never refunded an amount of R160 000-00 to the Plaintiff.’ [3] For a better appreciation of the history to the matter it is necessary to record that with effect from 1 March 2001 Anglorand purchased from Cahn Shapiro Incorporated (Cahn Shapiro), a member of the Johannesburg Stock Exchange (JSE), the latter’s client base, which included the plaintiff. By that stage, so the allegation went, the plaintiff had already invested or more accurately believed that he had invested R300 000 with Cahn Shapiro to enable it to purchase on his behalf listed securities, financial instruments and money market investments as defined in the JSE’s Rules. That investment of R300 000 the plaintiff had made through Rashama, who was then employed by Cahn Shapiro. It, like the subsequent one for R160 000, was allegedly misappropriated by Rashama. [4] The plaintiff’s summons elicited, in response, inter alia, the following special plea: ‘8 Plaintiff’s claim is based on an alleged oral agreement concluded between Plaintiff and Second Defendant during or about December 2001. Plaintiff, through his appointed attorneys, and in writing, demanded payment from Second Defendant on 14 October 2002. A copy of the demand is annexed, marked “B”. Plaintiff’s claim according became due on 14 October 2002. Plaintiff had to serve Summons commencing action on Second Defendant before or on 13 October 2005. Plaintiff’s Summons under Case No. 1312/06 was served on Second Defendant on 16 August 2006. ALTERNATIVELY Plaintiff pleads that during November 2002 one of the directors of Second Defendant advised Plaintiff that a cheque for the capital amount will be drawn on (sic) Plaintiff’s favour within six month (sic). Six months would have expired during May 2003. Plaintiff had to serve Summons commencing action on Second Defendant during or before May 2006. Plaintiff’s Summons in case No. 1312/06 was served on Defendant on 16 August 2006. Second Defendant accordingly pleads that Plaintiff’s claim against Second Defendant became prescribed prior to service, on Second Defendant, of a Summons commencing action. WHEREFORE Second Defendant prays that its Second Special Plea be upheld and Plaintiff’s claims be dismissed with costs.’ [5] The plaintiff’s letter of demand dated 14 October 2002 (Annexure B to the defendant’s plea) was marked ‘urgent’ by the plaintiff’s then attorney. It reads: ‘We wish to advise that we act on behalf of Mr Mudau in the above matter who instructs us as follows:- 1. That he invested a total amount of R460 000-00 since 1999 to date initially through CAHN SHAPIRO and subsequently with Anglorand Securities (yourselves). 2. That all the funds were deposited in Account No: 01029071698 (Cahn Shapiro) 4052178047 (Anglorand Securities). 3. That the initial account code was 237370 but when our client made the last investment of R160 000-00 one Rudy Rashama, your employee phoned our client advising him to use the account code 4230728 and it later transpired that it was his personal account. 4. That you advised our client that the account given to our client by one Rudy Rashama was in the names of your said employee. 5. That our client became suspicious with regard to his investments as he was no longer receiving the normal portfolio valuation statements but some papers which had the logo of Anglorand Securities. 6. That our client approached your company regarding his investments of funds totalling R460 000- 00 but in vain. We have been instructed to kindly request yourselves to refund/pay back our client’s investment of R460 000-00. We have written this long letter to yourselves with the hope that the matter could be resolved amicably without resorting to civil litigation of which your company will be liable to pay legal costs incurred. However should the matter not be resolved we will have no option but to proceed with further legal steps. Kindly let us have your response within 10 (ten) days of receipt of this letter.’ [6] The plaintiff replicated to the special plea of prescription as follows: ‘Save for denying that the Plaintiff had to serve summons commencing action to the second Defendant during or before May 2006, The Plaintiff avers that he was always promised that, his money will be refunded even after the expiry of six month on demand, and therefore there was no reason for the Plaintiff to issue summons at the time of the promises in bona fide belief that his money will be refunded and was further advised that, insurance claim was lodged for an alleged fraud committed by the 1st Defendant and the Plaintiff will be informed of the “future” progress of his claim.’ [7] The high court (per Hetisani J) was asked to adjudicate the special plea as a preliminary issue. What the learned judge was called upon to decide was whether the claim had become prescribed before the issue and service of the plaintiff’s summons on 16 August 2006. Hetisani J concluded ‘the claim by the Plaintiff of refund of his R160 000 is hereby upheld against [Anglorand] with costs’. In entering judgment for the plaintiff the learned judge ranged beyond the remit of the limited agreed preliminary issue placed before him for adjudication. He thus plainly misdirected himself and in the result his conclusion cannot stand. [8] Of the special plea of prescription Hetisani J concluded: ‘It is perhaps not surprising that this Court’s conclusion on the defence against Plaintiff’s claim of refund of his R16.000.00 is nothing but 2nd Defendant’s efforts to escape liability, by mere tactics based on legal technicalities . . .’. Although the learned judge did not specifically say so, given the conclusion reached by him, he must be taken to have dismissed the special plea of prescription with costs. It thus remains to consider whether that conclusion is sustainable. [9] Prescription commences to run against the debt on the day it becomes due unless delayed or interrupted. It will continue to run until it has completed its course (Aussenkehr Farms (Pty) Ltd v Trio Transport CC 2002 (4) SA 483 (SCA) at 495). As stated in Umgeni Water v Mshengu (para 5 and 6) [2010] All SA 505 (SCA); 2010 ILJ 88 (SCA): ‘Section 10 of the Prescription Act 68 of 1969 (the Act), provides for the extinction of a debt after the lapse of periods determined in s 11. The period of prescription applicable to the plaintiff’s claim is that provided for in s 11(d) of the Act, namely 3 years. According to s 12(1) of the Act, prescription shall commence to run “as soon as the debt is due”. The words “debt is due” must be given their ordinary meaning.1 In its ordinary meaning a debt is due when it is immediately claimable by the creditor and, as its correlative, it is immediately payable by the debtor. Stated another way, the debt must be one in respect of which the debtor is under an obligation to pay immediately.2 A debt can only be said to be claimable immediately if a creditor has the right to institute an action for its recovery. In order to be able to institute an action for the recovery of a debt a creditor must have a complete cause of action in respect of it. The expression “cause of action” has been held to mean: “ ... every fact which it would be necessary for the plaintiff to prove, . . . in order to support his right to judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved”; or slightly differently stated “the entire set of facts which give rise to an enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a cause of action. Such cause of action does not ‘arise’ or ‘accrue’ until the occurrence of the last of such facts and consequently the last of such facts is sometimes loosely spoken of as the cause of action.” ’3 1 The Master v I L Back and Co Ltd 1983 (1) SA 986 (A) at 1004F. 2 See Western Bank Ltd v S J J van Vuuren Transport (Pty) Ltd & others 1980 (2) SA 348 (T) at 351 and HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N) at 909 and the cases there cited. 3 See Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838 and the cases there cited by Corbett JA; see also Truter and another v Deysel 2006 (4) SA 168 (SCA) para 16, 18 and 19. A plaintiff must thus have a complete cause of action at the stage when summons is issued or at any rate when the summons is served.4 [10] At the hearing before Hetisani J two witnesses testified, the plaintiff and Ms Yolanda Taljaard, who at the relevant time was a director and compliance officer at Anglorand. The learned judge did not express himself on the credibility or reliability of either witness, although his approach to the evidence on this aspect of the case can be gleaned from the following extract from his judgment: ‘Regarding the 2nd Defendant’s second special plea, which is based on alleged prescription of Plaintiff’s claim, the evidence adduced by the witness Yolanda Taljaard shows clearly that Plaintiff was constantly telephoning and visiting 2nd Defendant kept the request for his investments’ whereabouts alive and at one stage he was told that his claim had been lodged with an institution operating from London and known as “Loss Adjustors”.’ But with respect to the learned judge he misconstrued Ms Taljaard’s evidence, who testified: ‘I never denied, I am sorry but I never denied that Mr Mudau visited the office. He did visit the office. We never said that we were liable. Anglo Rand never told Mr Mudau that we were going to pay him. He did visit, he did phone and he always got the same answer. We were not going to pay. We did not lodge a claim.’ [11] Ms Taljaard’s evidence that right from the outset Anglorand disputed liability to the plaintiff found support in the correspondence adduced in evidence. On 11 June 2002 Ms Taljaard wrote to the plaintiff: ‘We refer to your visit to our offices on the 5th June 2002, and your written statement made on the same day. According to our records, the deposit slip which you submitted to the Bank on 4th December 2001 with your deposit of R160 000.00 gave specific instructions that the moneys were to be allocated to our Client Account No.: 4230728. We acted in accordance with that instruction, and confirm that the holder of Account No.: 4230728 at the time was Mr Rashama. 4 Mahomed v Nagdee 1952 (1) SA 410 (A) at 418; Marine and Trade Insurance Co Ltd v Reddinger 1966 (2) SA 407 (A) at 413D; Santam Insurance Co Ltd v Vilakasi 1967 (1) SA 246 (A) at 253A-F. We cannot take the matter any further and suggest that you take independent advice.’ And on 24 October 2002 Anglorand’s attorney wrote to the plaintiff’s then attorney in response to the latter’s letter of demand (Annexure B to Anglorand’s plea): ‘We represent Anglorand Securities Limited. We have been instructed to respond to your letter dated 14th October 2002, as follows: 1. Our client has no knowledge, and cannot comment on payments allegedly made by your client to Cahn Shapiro; 2. In respect of payments allegedly made to us, our client has already responded, in writing, to your client’s enquiries; 3. Our client’s attitude remains that it has no liability to your client; 4. Our client is not prepared to debate the matter any further in correspondence and its election not to do so must not be construed as an admission of any of the statements made in your letter’ But even prior to those letters on 12 January 2002 the plaintiff wrote to the client services manager of the JSE Securities Exchange, ‘when we approached the company [Anglorand] they were not willing to address this issue and I request the JSE Securities Exchange to intervene in this matter’. [12] On the view that I take of the matter it is not necessary to subject the evidence of the two witnesses to closer scrutiny or to resolve or reconcile such factual disputes as may exist between them, for, on the undisputed facts at the latest (and most generous for the plaintiff) by 25 October 2002 he knew, not just that payment would not be forthcoming but that liability for his claim was in fact being disputed by Anglorand. It follows that prescription must be taken to have commenced to run from that date. [13] I now turn to consider the second issue, namely the plaintiff’s contention that the running of prescription had been interrupted. In terms of s 14 (1) of the Prescription Act 68 of 1969 (the Act) the running of prescription may be interrupted by an express or tacit acknowledgment of liability by the debtor. In support of the contention that the running of prescription had been interrupted reliance was placed on a letter written to him by Gary Cahn of Cahn Shapiro dated 6 June 2002, which reads: ‘This serves to confirm that an insurance claim has been lodged with regard to an alleged fraud committed by Rudolph Rashama, a former employee of Cahn Shapiro Inc. The procedure is such that the loss adjustors will assess the claim and then forward it to the underwriters in London. Cahn Shapiro will keep you informed of all future progress with regard to the matter.’ But as Ms Taljaard testified: ‘MR PRETORIUS: I want to ask you to tell his lordship briefly what the relationship is between Anglo Rand Securities Ltd and Cahn Shapiro, I think it is incorporated. --- Incorporated. Basically what happened was that Anglo Rand Securities, at that stage it was (Pty) Ltd, bought the client base of Cahn Shapiro Inc. It was just a transaction that was done between two companies. Cahn Shapiro at this stage still exists as a company, not as a broking member though and Anglo Rand literally only bought the client base. We did not take any of the liabilities over. HETISANI (J): What do you, what would a layman like myself understand by buying the client base? --- Well, in stock broking, the way it works, every member firm has a client base and when a broking member is going to cease to be a member, it usually sells that client base. It would move over to another stock broking firm where the relationship with the client would be taken over. MR PRETORIUS: And you said as of today Cahn Shapiro is still a registered company, still in existence? --- It is still in existence. The directors of the two companies, were they the same? --- Not all. Gary Cahn was the director at Cahn Shapiro Inc and at Anglo Rand at the time this transaction took place, it was myself, David Lewis, we had Andriaan Kamper and Hugh Drummond. That was the non-executive director. Okay. And so it was not a transaction similar to a buying of a going concern? --- No not at all. It was not even that much, is that correct? --- That is 100% correct. And did I understand you correctly that the liabilities of Cahn Shapiro was specifically excluded in this transaction? --- That is correct. What does it mean in layman’s terms? --- In layman’s terms, what that would mean was that if there was any claims that was coming up for Cahn Shapiro, that Anglo Rand would not be held liability for it. There after, after the effective date, what was the effective date? --- The effective date was 1 March 2001. So any transactions after 1 March 2001 that may result in a claim would then be against Anglo Rand? --- That is correct yes. You were in court, you have listened to what was suggested to Mr Mudau under cross- examination, as to a distinction between the amount of R300 000.00 and the amount of R160 000.00, can you explain to the court why the court should draw such a distinction, should deal with it separately? --- Because it is two separate companies it cannot be viewed together and that was explained to Mr Mudau in January 2002 as well, that it is two separate companies. The claims had to be split. The R300 000.00 related to events prior to 1 March 2001? --- Prior to 1 March. The R160 000.00 to events after 1 March 2006, is that correct? --- Correct, that is correct.’ [14] Indeed that distinction between Anglorand on the one hand and Cahn Shapiro on the other was recognised by the plaintiff who testified: 'CROSS-EXAMINATION BY MR PRETORIUS: When did you start investing with Cahn Shapiro? Yes. --- I think it was 2000. 2000? --- Uh. And apart from the R160000.00, how much did you invest? --- I invested R300000.00. So in total it was R460000.00? --- Ja, in total it was R460000.00. R300000.00 with Cahn Shapiro and R160000.00 with AngloRand, is that correct? --- Ja. Did you get that R300000.00 back? --- I did not get it all, I just got part of it because the claim, even that one of R300000.00 was also defrauded by him. The question is, did you get the R300000.00 back? --- No, I did not get it, I just got part of it. How much is still owed to you on the R300000.00? --- They owe me, if, I am talking of the initial amount, which I injected there, they still owe me R75000.00. . . . HETISANI (J): So they paid you how much? --- They paid me R228000.00. 228? --- Ja, R228000.00, out of the R300000.00 I was defrauded. By Loss Adjusters? --- Yes, loss adjusters. What is the name of that company? You said, how do you pronounce it? --- Gab, G-A-B. Oh, just GAB? --- Ja, GAB. It is called GAB International Loss Adjusters. Thank you.’ [15] An acknowledgement of liability for the purposes of s 14 of the Act is a matter of fact not a matter of law (per Nienaber JA in Road Accident Fund v Mothupi 2000 (4) SA 38 (SCA) para 37). What the Act requires is ‘an acknowledgement of liability’ and not merely ‘an acknowledgement of indebtedness’ (Benson & another v Walters & others 1984 (1) SA 73 (A)). What we have here falls far short of an acknowledgement of the existence of a debt or of a present liability (Markham v South African Finance & Industrial Company Ltd 1962 (3) SA 669 (A) at 676F). For, the admission, in short, must cover at least every element of the debt and exclude any defence as to its existence (Mothupi para 38). Put another way, it must be an acknowledgment by the debtor that the debt is in existence and that he or she is liable therefor at the time when the statement alleged to be an admission of liability is made. And finally there is of course the point made in Cape Town Municipality v Allie NO 1981 (2) SA 1 (C) at 7F-G: ‘In the end . . . one must also be able to say when the acknowledgment of liability was made, for otherwise it would not be possible to say from what day prescription commenced to run afresh.’ (See also Benson at 86E.) [16] It was for the plaintiff to plead and prove that prescription had been interrupted. I do not think that he has discharged that onus of proof on a balance of probability. It follows, in my view, that the appeal must succeed and it is accordingly allowed with costs. The order of the court below is set aside to be replaced by: ‘The second defendant’s special plea of prescription is upheld and the plaintiff’s claim is dismissed with costs.’ _________________ V M PONNAN JUDGE OF APPEAL APPEARANCES: For Appellant: P J J de Wet Instructed by: Tatham Wilkes Inc Pietermaritzburg Naudes Bloemfontein For Respondent: No appearance

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Anglorand Securities Ltd v Mudau & another (125/10) [2011] ZASCA 76 (26 May 2011) Media Statement Today the Supreme Court of Appeal (SCA) upheld an appeal by the appellant, Anglorand Securities Limited (Anglorand) and set aside an order of the Limpopo High Court (Thohoyandou). The two principle issues before the SCA, concerned, firstly the commencement of the running of prescription with regard to the claim of the first respondent, Divhani David Mudau (Mr Mudau) against Anglorand and secondly whether the prescription period had been interrupted. The facts of the case are briefly as follows. Mr Mudau instituted action in the high court against Anglorand and its employee the second respondent, Rudolph Rashama (Mr Rashama). In his summons, Mr Mudau alleged an oral agreement was entered into between himself and Anglorand with regard to the purchase of shares Pursuant to that agreement, according to Mr Madau, he deposited an amount of R160 000-00 for the purchase of those shares into a banking account details whereof had been furnished to him by Mr Rashama. It subsequently transpired that, that amount had been misappropriated by Mr Rashama. When he learnt of the misappropriation, Mr Madau then issued summons against Anglorand. Anglorand raised a special plea that Mr Madau’s claim had prescribed before the issue of summons. The high court in effect dismissed the special plea with costs. The SCA in hearing the appeal by Anglorand had to decide whether that conclusion was sustainable. The SCA held that the claim had indeed prescribed before the issue of summons by Mr Madau. It then had to consider whether the running of prescription had been interrupted as contended by Mr Madau. The SCA relied on s 14(1) of the Prescription Act 68 of 1969 which states that the running of prescription may be interrupted by an express or tacit acknowledgment of liability by the debtor. The SCA held that what was required was an ‘acknowledgment of liability’ and not merely an ‘acknowledgment of indebtedness’. That according to the SCA had not been established in this case. The appeal accordingly succeeded and the order of the high court was replaced with the upholding of the special plea of prescription and dismissing Mr Madau’s claim with costs. --- ends ---

1206

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case no: 149/07 In the matter between: MERCURIUS MOTORS Appellant and PAUL ALEXANDER PAVIA LOPEZ Respondent _______________________________________________________ Coram: Streicher, Navsa, Ponnan, Maya JJA et Mhlantla AJA Date of hearing: 7 March 2008 Date of delivery: 27 March 2008 Summary: Loss of vehicle delivered to service depot ─ failure to safeguard keys ─ reliance on exemption clause ─ held that clause not part of contract of deposit ─ the service depot held liable. Neutral citation: Mercurius Motors v Lopez (149/2007) [2008] ZASCA 22 (27 March 2008). _______________________________________________________ NAVSA JA NAVSA JA: [1] During the morning of 23 July 2003 the respondent, Mr Paul Lopez, delivered a Jeep Cherokee motor vehicle (the Jeep), which he was then leasing from Daimler Chrysler Services South Africa (Pty) Ltd, to Mercurius Motors at its East Rand Mall depot in Boksburg. Mercurius Motors (Mercurius) trades as a motor dealer and service centre and is a division of the Imperial group of companies. The vehicle was delivered to Mercurius to be serviced, for minor repairs to be effected and for the installation of spotlights. The vehicle was still under warranty and the costs of repairs and the service were to be borne by the Daimler Chrysler company (hereafter Daimler Chrysler). The cost of the installation of spotlights was to be borne by Mr Lopez. [2] At the relevant time Daimler Chrysler was the manufacturer of Jeep and other vehicles and Mercurius was the franchise dealer which sold vehicles to the public. [3] In terms of his lease agreement with Daimler Chrysler Mr Lopez bore the risk of loss of the value of the vehicle. [4] According to Mercurius, the East Rand Mall depot was broken into by robbers during the night of 23 July 2003 ─ a lock on a gate was broken. It was alleged that security guards employed by Colt Security, an entity contracted by Mercurius to safeguard its property, were overpowered and abducted.1 [5] The next morning, at approximately 08h15, Mr Lopez was informed about the theft of the Jeep. He had leased it for use by his wife. It was relatively new (approximately six months old) and Mr Lopez and his wife were understandably 1 This information was conveyed to Mercurius by a representative of Colt Security and is contained in statements by two security guards who did not testify. The admissibility of the statements were in issue in the trial court. For reasons that will become apparent the present appeal can be decided without reference to these statements. See para 34 below. I shall assume in favour of Mercurius that the Jeep went missing in consequence of that robbery. upset. The Jeep was fitted with a satellite tracking device and Mr Lopez informed Netstar, the company that provided the tracking service, that the vehicle had gone missing from Mercurius and instructed them to take steps to trace and recover it. Unfortunately it could not be traced and has not been recovered. [6] It is common cause that the Jeep was the only vehicle missing from the depot. The keys to the Jeep that had been handed to Mercurius when the vehicle was delivered could not be found. The established procedure was that the keys to all the vehicles that had been brought in for service had to be safely locked away at the end of a working day. [7] The respondent’s wife insisted that, whilst steps were being taken to recover the vehicle and until the question of liability for its loss was determined, she should be provided with a ‘loan’ vehicle. Mercurius provided such a vehicle for use by Mrs Lopez for a period of six months. This notwithstanding, Mercurius denied liability for the loss of the Jeep, relying on exemption of liability clauses contained in the documents Mr Lopez signed at the Mercurius workshop on the morning on which he delivered the vehicle to the workshop. [8] The plaintiff instituted action in the Johannesburg High Court against Mercurius based on the contract of deposit, claiming damages for the loss of the Jeep, the value of which was agreed in an amount of R245 000. [9] In its plea Mercurius repeated its reliance on the exemption clauses and denied that the loss of the Jeep was due to any negligence on its part. [10] The Johannesburg High Court found in favour of Mr Lopez, ordering Mercurius to pay him R245 000 with interest a tempore morae at the rate of 15.5 per cent per annum from 13 January 2004 to date of payment. Mercurius was ordered to pay Mr Lopez’s costs. The present appeal is with the leave of this court. The exemption clauses [11] The first exemption clause is contained in a document entitled ‘Warranty Repair Order’. Instead of the expected Mercurius Motors appellation at the head of the document, the name Daimler Chrysler appears. Immediately above the space for a customer’s signature the following appears in fine print: ‘I hereby authorize the repair work to be done along with the necessary material, and hereby grant you and/or your employees permission to operate the car or truck herein described on streets, highways or elsewhere for the purpose of testing and/or inspection. An express mechanic’s lien is hereby acknowledged on this car or truck to secure the amount of any charges for work not covered by Daimler Chrysler’s warranty.’ [12] Immediately below the space for the customer’s signature the following appears in capitals: ‘NOT RESPONSIBLE FOR LOSS OR DAMAGE TO CARS OR ARTICLES LEFT IN CARS IN CASE OF FIRE, THEFT OR ANY OTHER CAUSE BEYOND OUR CONTROL.’ This exemption clause is clearly visible and can hardly be missed by a person signing the form. [13] The other exemption clause on which Mercurius relied is contained in a second document described as a repair order form. On the left-hand side at the top of the document, the words ‘MERCURIUS MOTORS’ are set out in large and bold letters. Between a heading that reads ‘JOB INSTRUCTION / WERKOPDRAG’ and a position indicating a signature by a customer is a space approximately 13 cm x 13 cm, to be completed by the Mercurius employee receiving instructions from the customer regarding the work to be done. [14] On the repair order form, immediately above the space indicated for a customer’s signature, the following appears in capital letters: ‘PLEASE REMOVE PULL-OUT RADIOS AND VALUABLES FROM YOUR VEHICLE. WE WILL NOT BE HELD RESPONSIBLE FOR ANY THEFT WHATSOEVER.’ This caption is prominent and should easily be noticed by anyone signing the document. [15] To the left of the caption referred to in the preceding paragraph, the following appears in fine print: ‘I have read and agree to the conditions of Contract on the reverse side hereof. This is to certify that no valuable or personal belongings have been left in the vehicle. Ek het die kontrak voorwaardes op die keersy gelees en aanvaar sulke voorwaardes. Ek bevestig dat geen waardevolle en/of persoonlike besittings in die voertuig gelaat is nie.’ It is necessary to record that this print is much smaller than appears hereinabove, is starkly less prominent than the caption referred to in the previous paragraph and does not attract one’s attention. [16] The relevant part of the document is reproduced in this paragraph to enable a better appreciation of how it appeared to Mr Lopez: This reproduction is condensed ─ the original page on which the writing appears is four centimetres wider than appears above. Consequently, in reality, the space between what appears on the right and left-hand side of the document is wider. [17] It is also necessary to note that the repair order form has a carbon copy underneath and has to be detached in order to reveal the conditions on the reverse side. The relevant condition on which Mercurius relied is in clause 5, which reads: ‘I/we acknowledge that MERCURIUS shall not be liable in any way whatsoever or be responsible for any loss or damages sustained from fire and/or burglary and/or unlawful acts (including gross negligence) of their representatives, agents or employees.’ It is evident that the ambit of this exemption clause is wide. [18] The evidence of Mr Lopez to the effect that his attention was not drawn to the writing referred to in para 15, nor to the conditions themselves, by the workshop manager who received the Jeep and who took down the instructions, is uncontested. The court below [19] Tshiqi J, having regard to Mr Lopez’s reliance on a contract of deposit and considering that Mercurius had pleaded that the contract was subject to exemption clauses, correctly held that Mr Lopez as plaintiff bore the onus to prove that the exemption clauses were not part of the contract.2 [20] The court below took into account the general principle in our law that, when a person signs a contractual document, he or she agrees to be bound by the contents of the document ─ otherwise referred to as the caveat subscriptor rule.3 Tshiqi J weighed up this rule against Mr Lopez’s contention that he was misled as to the nature, purport and contents of the document. [21] Tshiqi J examined the warranty claim form and concluded that, viewed objectively, the document was misleading and confusing and could be read to be exempting Daimler Chrysler and not Mercurius. [22] Interpreting the caption immediately above the space for the customer’s signature in the repair order form, the court below held that the exemption could only relate to theft from the vehicle of items such as radios and other valuables and that the wording does not include an exemption in relation to the theft of the vehicle itself. 2 In the case of the dispute as to the existence of such a clause as part of the contract of deposit, it will be for the plaintiff depositor to prove that the clause was not a term of the contract. See Stocks & Stocks (Pty) Ltd v T J Daly & Sons (Pty) Ltd 1979 (3) SA 754 (A) and Harms Amler’s Precedents of Pleadings 6 ed (2003) p 145. 3 See R H Christie The Law of Contract in South Africa 5 ed (2006) pp 174-179 and the authorities there cited. [23] The trial judge considered that the reference on the left-hand side of the repair order form to the conditions of contract was printed and located in such a manner so as not to draw the reader’s attention. She held that Mr Lopez’s contention, that he was misled by the form because it was unclear and confusing, was justified. [24] Having reached these conclusions in relation to the exemption clauses, the high court then considered the liability of a depository for reward in regard to the loss of items entrusted to him or her. The court rightly pointed out that a depository could, of course, escape liability if there was no dolus or culpa on his or her part.4 [25] In relation to negligence, Tshiqi J had regard to the instances of negligence on which Mr Lopez relied. First, the failure by Mercurius to safeguard the Jeep’s keys. Second, the failure immediately to determine which vehicle was missing, and then to communicate the loss to Mr Lopez to enable him to instruct the company responsible for the tracking device in the Jeep to take steps to recover it. [26] In respect of the loss of the key, the court below recorded that Mercurius was unable to explain where the keys to the Jeep had been kept and how they had got lost. Mercurius had tendered evidence to show that it was the duty of apprentice mechanics to ensure, at the end of a working day, that no keys were left in vehicles. Furthermore, employees of the security company, when they came on duty, were themselves required to do a check to ensure the same. In the event of keys being found they were obliged to remove the keys and hand them to a patrol vehicle for safe custody. No evidence was tendered of such steps having been taken. 4 See Stocks & Stocks supra at 762A-D. [27] As stated earlier, no explanation was offered for the absence of the keys from the bag containing the keys to all the other vehicles that had been in safekeeping. The court below held that the probabilities indicated that the keys to the Jeep were either left in the vehicle or in a place where they were easily accessible. It noted that there was no evidence that the keys had been in the possession of the guards or were kept safely. No reason was proffered by Mercurius as to why the Jeep’s keys would have been kept separate from the other sets of keys which were locked away safely. [28] In respect of the second ground of negligence on which Mr Lopez relied, the court below held that it had not been shown that, even if Mercurius had identified the missing vehicle sooner and had informed Mr Lopez earlier, the tracking company would have been able to locate the vehicle. [29] Finally, Tshiqi J held that the conduct of Mercurius in relation to the keys amounted to negligence and she consequently made the orders referred to in para 10 above. Conclusions [30] In respect of the warranty claim form, the court below, in my view, placed too much store on the fact that the Daimler Chrysler name appeared at the top of the document. It can hardly be gainsaid that the authorisation referred to in para 11 above was an authorisation directed at Mercurius and that Mercurius was the entity that would effect the repairs in accordance with the Daimler Chrysler warranty. [31] In any event, counsel for Mercurius did not place any reliance on the clause in the warranty claim form. He accepted that the exemption relates to loss or damage occasioned by causes beyond the control of Mercurius and that the theft of the Jeep was not beyond its control. [32] In relation to the caption in the repair order form referred to in para 14 above, Tshiqi J rightly held that the theft to which the exemption relates is of valuables out of the vehicle, rather than of the vehicle itself. [33] A person delivering a motor vehicle to be serviced or repaired would ordinarily rightly expect that the depository would take reasonable care in relation to the safekeeping of the vehicle entrusted to him or her. An exemption clause such as that contained in clause 5 of the conditions of contract, that undermines the very essence of the contract of deposit, should be clearly and pertinently brought to the attention of a customer who signs a standard instruction form, and not by way of an inconspicuous and barely legible clause that refers to the conditions on the reverse side of the page in question. Moreover, the caption immediately above the signature is misleading in that a customer is directed to that provision and away from the more important provision in small print on the left-hand side of the document which refers to the conditions on the reverse side of the document which are themselves not easily accessible.5 It will be recalled that Mr Lopez’s unchallenged evidence was that the conditions on which Mercurius now relies were not brought to his attention. [34] The test for negligence is as follows: ‘(a) would a reasonable person, in the same circumstances as the defendant, have foreseen the possibility of harm to the plaintiff; (b) would a reasonable person have taken steps to guard against that possibility; (c) did the defendant fail to take the steps which he or she should reasonably have taken to guard against it? 5 See Spindrifter (Pty) Ltd v Lester Donovan (Pty) Ltd 1986 (1) SA 303 (A) at 318C; Kempston Hire (Pty) Ltd v Snyman 1988 (4) SA 465 (T) at 467B-C and 468G-H; Keens Group Co (Pty) Ltd v Lötter 1989 (1) SA 585 (C) at 590B-592C; Ndlovu v Brian Porter Motors Ltd 1994 (2) SA 518 (C) at 526F; Diners Club SA (Pty) Ltd v Livingstone 1995 (4) SA 493 (W) at 495I-496A; Fourie NO v Hansen 2001 (2) SA 823 (W) at 833F-834C. See also the very interesting article by Tjakie Naudé and Professor Gerhard Lubbe Exemption Clauses ─ A Rethink Occasioned by Afrox Healthcare BPK v Strydom (2005) 122 SALJ 441. If all three parts of this test receive an affirmative answer, then the defendant has failed to measure up to the standard of the reasonable person and will be adjudged negligent.’6 [35] By not safeguarding the keys to the Jeep, the employees of Mercurius did not act as a reasonable person in their circumstances would have acted. It was clearly foreseeable that theft of the vehicle would be facilitated by the availability of the keys and no discernable steps were taken to guard against this. [36] It was common cause that the theft of the Jeep took place. The precise circumstances under which it occurred were not agreed upon. Counsel on behalf of Mercurius did not seek, before us, to rely on the statements of the security guards which had been ruled inadmissible by Tshiqi J. It is significant that the only vehicle missing was the vehicle in respect of which the keys had not been properly safeguarded. All the indications are that it is the negligence of the employees of Mercurius which facilitated the theft of the Jeep. In any event, Mercurius failed to discharge the onus of disproving dolus or culpa on its part. [37] It is not necessary to deal with the delay in relation to the notification by Mercurius to Mr Lopez of the loss of the vehicle. The material conclusions reached by the court below cannot be faulted. [38] The following order is made: The appeal is dismissed with costs. __________________ M S NAVSA JUDGE OF APPEAL CONCUR: STREICHER JA PONNAN JA MAYA JA MHLANTLA AJA 6 See Jonathan Burchell Principles of Delict (1993) p 86 and Kruger v Coetzee 1966 (2) 428 (A) at 430.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 27 March 2008 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal On 27 March 2008 the Supreme Court of Appeal, in the case of Mercurius Motors v PAP Lopez, dismissed an appeal against a judgment of the Johannesburg High Court, in terms of which Mercurius Motors, a motor dealer, was ordered to pay the respondent, Mr Lopez, an amount of R245 000 with interest a tempore morae at the rate of 15.5 per cent per annum from 13 January 2004 to date of payment. Mercurius was also ordered to pay Mr Lopez’s costs. Mr Lopez had sued Mercurius for the value of his Jeep Cherokee motor vehicle which went missing from Mercurius allegedly as a result of a robbery. The vehicle had been brought in for warranty repairs and for the installation of spotlights. It appeared that the keys to the Jeep had not been safeguarded. Mercurius had relied on an exemption clause which it contended exempted it from liability. The Johannesburg High Court held that the exemption clause was printed and located in such a way so as not to draw the reader’s attention to it. It held that the form in which the exemption clause appeared was unclear and confusing. Furthermore, the Johannesburg High Court held that in respect of the keys to the vehicle, Mercurius had been negligent. Consequently Mercurius was ordered to pay Mr Lopez the amount referred to above. This court held that an exemption clause such as that relied on by Mercurius which undermines the very essence of the contract in terms of which a motor vehicle dealer could rightly be expected to take reasonable care of the vehicle entrusted to it for repairs should be clearly and pertinently brought to the attention of a customer who signs a standard instruction form. It held that the form in question was misleading and that it directed a person’s attention away from the important provisions contained in small print. It agreed that the failure by Mercurius to safeguard the keys to the vehicle amounted to negligence. In the result the appeal was dismissed with costs. --ends--

2994

non-electoral

2015

` THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 20157/2014 In the matter between: UTi SOUTH AFRICA (PROPRIETARY) LIMITED APPELLANT and TRIPLE OPTION TRADING 29 CC RESPONDENT Neutral citation: UTi South Africa v Triple Option Trading (20157/14) [2015] ZASCA 101 (3 June 2015) Coram: Maya, Shongwe, Leach, Zondi JJA and Gorven AJA Heard: 21 May 2015 Delivered: 3 June 2015 Summary: Prescription – extinctive prescription – whether the appellant‟s amendment had introduced a cause of action which had become prescribed – no new cause of action introduced – claim not prescribed. Special plea of lack of jurisdiction correctly dismissed. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Masipa J and Bashall AJ sitting as court of appeal): The appeal is upheld with costs. The cross-appeal is dismissed with costs. Paragraph 17 of the order of the court a quo is set aside and replaced by the following: „17.1 The appellant‟s appeal against the magistrates‟ court order upholding the special plea of prescription is upheld with costs. 17.2 The order of the magistrates‟ court is substituted with the following order: “Both special pleas are dismissed with costs.”‟ JUDGMENT Zondi JA (Maya, Shongwe, Leach JJA and Gorven AJA concurring): [1] This appeal, which is with the leave of the Gauteng Division of the High Court, Johannesburg (Masipa J and Bashall AJ), concerns a special plea of prescription together with the costs order against the appellant. The cross-appeal, which is also with the leave of the court a quo concerns a special plea of jurisdiction. These issues arose in the following circumstances. [2] On 14 March 2007 the appellant sued the respondent in the Germiston Magistrates‟ Court claiming a sum of R274 786,70. This amount was alleged to have been the outstanding balance for certain customs clearing, forwarding and export agency services rendered and disbursements incurred by the appellant on behalf of the respondent from time to time, during the period 15 January 2005 to 16 May 2006, pursuant to various agreements. The appellant annexed to its particulars of claim the customs clearance letter of authority („the letter of authority‟); certain standard trading conditions and various invoices. Properly construed, the agreements for services rendered at the instance and request of the respondent were reflected in the invoices annexed. The paragraph dealing with this was introduced by a number of paragraphs which were largely superfluous and, if anything, rendered the particulars vague and embarrassing. Further particulars that were delivered by the appellant to the respondent in response to the latter‟s request for further particulars revealed that the two documents put up by the appellant in support of some of the superfluous averments indicated an agreement concluded in 2004 with Pyramid Freight (Pty) Ltd (Pyramid Freight) and not the appellant. Further particulars also revealed that the appellant had, in fact, on 6 December 2004 bought Pyramid Freight‟s business assets and, in terms of the sale agreement, had acquired all contracts to which Pyramid Freight was a party, which existed before 1 August 2004. [3] In the mistaken belief that its cause of action arose from the 2004 agreement between Pyramid Freight and the respondent, the appellant amended its particulars of claim on 22 July 2009 to reflect that the agreement was concluded between Pyramid Freight and the respondent and that the appellant had derived its rights from this agreement when it purchased Pyramid Freight. This was incorrect. The agreement between the respondent and Pyramid Freight related to contracts which arose prior to 1 August 2004. Those on which the appellant sued were variously concluded between 15 January 2005 and 16 May 2006. The appellant and the respondent were direct parties to these agreements. They had nothing to do with Pyramid Freight. The amendment to the pleadings was therefore an exercise in futility. It replaced irrelevant averments with alternative averments that were equally irrelevant to its claim. [4] The respondent filed a special plea in which it contended that the appellant‟s cause of action in the amended particulars of claim had prescribed. It alleged that a debt for which the appellant sued became due and payable during the period 15 January 2005 to 16 May 2006. The respondent accordingly contended that the amendment introduced a new cause of action which prescribed on 17 May 2009. [5] The second special plea raised by the respondent was that the magistrates‟ court did not have jurisdiction to determine the action. In support of that special plea, the respondent referred to clause 36 read together with the non-variation clause of the standard trading conditions (clause 33) of the agreement with Pyramid Freight which it contended excluded it. Its contention was that the effect of clause 36 was to confer exclusive jurisdiction on the high court. This clause provided that the respondent consented to the „non-exclusive jurisdiction‟ of the high court in which Pyramid Freight‟s head office was situated. [6] These two special pleas were set down separately and argued in the magistrates‟ court before any other issues. The magistrates‟ court upheld both the special pleas. It upheld the special plea of prescription on the basis that the appellant‟s cause of action under the original summons was for payment of the sum of R274 786.70 for services rendered by it to the respondent in terms of various agreements entered into between the appellant and the respondent. Under the amended particulars of claim the appellant‟s cause of action was based on various agreements entered into between Pyramid Freight and the respondent. The magistrates‟ court accordingly held that the right sought to be enforced in the amended particulars, was a different right. For that reason, it held that the amendment introduced a new cause of action which had prescribed by the time it was introduced by way of amendment. It held that the service of the original summons did not interrupt the running of prescription on the new cause of action. [7] In upholding a special plea of jurisdiction, the magistrates‟ court held that clause 36 of the standard trading conditions of Pyramid Freight, on which the appellant claim was founded, ousted the jurisdiction of the magistrates‟ court. In the absence of a proper consent in terms of s 45 of the Magistrates‟ Courts Act 32 of 1944 it did not have jurisdiction to hear the matter. [8] On appeal, the court a quo dismissed the appeal on the special plea of prescription and confirmed the magistrates‟ court order upholding the special plea. But it upheld the appeal on the special plea of jurisdiction and set aside the magistrates‟ court order upholding the jurisdiction point and substituted it with one dismissing the special plea on jurisdiction. The appellant appeals against the order that its claim had prescribed while the respondent cross-appeals against the order dismissing its plea of lack of jurisdiction. [9] Counsel for the appellant submitted that the finding by the court a quo, that the appellant in its amendment had introduced a new cause of action, was wrong. He argued that the right which was sought to be enforced both in the original particulars of claim and in the amended particulars of claim was the same. I agree. [10] Properly construed, the appellant‟s claim as set out in the original summons issued on 14 March 2007 is for payment of the sum of R274 786.70 being the balance outstanding for services rendered and disbursements incurred by the appellant on behalf of the respondent at the latter‟s special instance and request during the period 15 January 2005 to 16 May 2006 pursuant to a series of agreements. Those services and disbursements were not rendered and incurred under the agreement between the respondent and Pyramid Freight, the terms of which are irrelevant to the pleadings. The claim was at all times for payment for services rendered at the special instant and request of the respondent under contracts concluded between it and the appellant. As is set out in the invoices, these were to be in terms of the appellant‟s standard conditions of contract. [11] I did not understand counsel for the respondent to have disputed that proposition in argument. He took issue with the fact that the invoices sent to the respondent fail to stipulate the date on which the alleged services were rendered and the nature of those services. That contention is, however, untenable if regard is had to the fact that each invoice bears the appellant‟s name, sets out the date on which the respondent‟s shipment arrived in Durban and the date on which each invoice was generated. And those dates fell within the period 2005 to 2006. Summons was issued in March 2007 well before the claims had prescribed. There is therefore no merit in the special plea of prescription. [12] With regard to the special plea of jurisdiction, which is the subject of the cross- appeal, counsel for the respondent submitted that the court a quo erred in dismissing it. He argued with reference to clause 33 (non-variation clause) and clause 36 of the agreement that the parties had agreed that the high court would have exclusive jurisdiction to determine all the disputes arising from that agreement irrespective of the quantum involved. The second leg of his argument was that the quantum of the appellant‟s claim in any event, exceeds the jurisdiction of a magistrates‟ court as to that amount. [13] But this presupposes that the Standard Terms and Conditions of Pyramid Freight govern the agreements between the parties. They clearly do not do so. The debate as to the meaning of clause 36 is therefore irrelevant. As to the second point, the invoices are pleaded as being separate contracts. None of the amounts claimed in any invoice exceeds the jurisdiction of the magistrates‟ court. The appellant was entitled to bring the action in the magistrates‟ court. For these reasons the cross-appeal should fail. [14] In the result I make the following order: The appeal is upheld with costs. The cross-appeal is dismissed with costs. Paragraph 17 of the order of the court a quo is set aside and replaced by the following: „17.1 The appellant‟s appeal against the magistrates‟ court order upholding the special plea of prescription is upheld with costs. 17.2 The order of the magistrates‟ court is substituted with the following order: “Both special pleas are dismissed with costs.”‟ _________________ D H Zondi Judge of Appeal Appearances For the Appellant: A G Sawma SC Instructed by: Wright, Rose-Innes Inc, Bedfordview c/o Phatshoane Henney Attorneys, Bloemfontein For the Respondent: J P Spangenberg Instructed by: Vally Chagan & Associates, Fordsburg c/o Christo Dippenaar Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 3 June 2015 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. UTi South Africa (Pty) Ltd v Triple Option Trading (20157/2014) [2015] ZASCA 101 (3 June 2015) MEDIA STATEMENT Today, the Supreme Court of Appeal (SCA) delivered a judgment upholding an appeal by UTi South Africa (Pty) Ltd (the appellant) and dismissing a cross-appeal by Triple Option Trading 29 CC (the respondent) against the judgment of the Gauteng Division of the High Court, Johannesburg. Consequently, both a special plea of prescription and a special plea of jurisdiction, which had been raised by the respondent, were dismissed. The issues before the court were (i) whether the appellant’s amendment to its particulars of claim had introduced a new cause of action, which had prescribed by the time that the amendment was effected; and (ii) whether the magistrate’s court had jurisdiction to hear the matter in light of an ouster clause in one of the contracts alleged to be relevant to the dispute. The facts of the matter were as follows. The appellant sued the respondent in the Germiston Magistrate’s Court for the outstanding balance in respect of certain services rendered during the period January 2005 to May 2006. Annexed to the appellant’s initial pleadings were invoices reflecting such services, as well as a number of other documents and agreements. Some of the averments in the particulars of claim were confusing and when further particulars were requested and supplied, it was revealed that certain of the annexed agreements had not been concluded between the respondent and the appellant, but instead were between the respondent and a third party, Pyramid Freight (Pty) Ltd (Pyramid Freight). Expanding on this, the appellant’s further particulars also included additional averments relating to how it had acquired the business of Pyramid Freight in August 2004 and had taken cession of all of Pyramid Freight’s contractual rights. Following this, the appellant amended its particulars of claim in July 2009 to reflect that its cause of action arose from the cession from Pyramid Freight, rather than from an agreement between the respondent and itself directly. In response, the respondent raised two special pleas. The first special plea was that the appellant’s claim had prescribed, as the amendment introduced a new cause of action and was only effected in July 2009, while the services rendered by Pyramid Freight had been concluded in May 2006 (ie more than three years before). The second special plea was that the standard terms and conditions of Pyramid Freight included a clause which provided that only a high court would have jurisdiction to hear matters relating to that agreement, and thus the magistrate’s court had no jurisdiction to decide upon the appellant’s claim. The magistrate’s court upheld both special pleas, while the court a quo dismissed the special plea of jurisdiction, and only upheld the special plea of prescription. On appeal to the SCA, it was found that the appellant’s amendment of its particulars of claim was in error. The cession of rights from Pyramid Freight only related to contracts concluded prior to August 2004, while the debts of the respondent arose only from January 2005 onwards. The initial particulars of claim and the invoices annexed thereto, properly construed, correctly reflected the true cause of action – services rendered by the appellant at the direct request of the respondent. The amendment did not introduce a new cause of action; it merely replaced irrelevant and confused averments with more irrelevant averments. Accordingly, prescription was interrupted by service of the summons and initial particulars of claim, and the SCA upheld the appeal and dismissed the special plea of prescription. With regards to the special plea of jurisdiction, the SCA found that the standard terms and conditions of Pyramid Freight were once again irrelevant to the matter, as the cause of action did not arise from that agreement. Accordingly, there simply was no applicable ouster clause, and so the SCA confirmed that the special plea of jurisdiction had been correctly dismissed by the court a quo. -- ends ---

1536

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 597/07 BOUNDARY FINANCING LIMITED Appellant and PROTEA PROPERTY HOLDINGS (PTY) LIMITED Respondent Neutral citation: Boundary Financing v Protea Property (597/07) [2008] ZASCA 139 (27 November 2008) Coram: STREICHER, CAMERON, LEWIS, JAFTA and PONNAN JJA Heard: 10 NOVEMBER 2008 Delivered: 27 NOVEMBER 2008 Summary: Rectification and interpretation of contract – prescription does not run against a claim for rectification. _______________________________________________________________________ ORDER _______________________________________________________________________ On appeal from: High Court, Cape Town (Griesel J sitting as court of first instance). The appeal is dismissed with costs including the costs of two counsel. _____________________________________________________________________ JUDGMENT _____________________________________________________________________ STREICHER JA (CAMERON, LEWIS, JAFTA and PONNAN JJA concurring) [1] Protea Property Holdings (Pty) Ltd, the respondent and the plaintiff in the court a quo, is a property holding company in the Protea group of companies (‘Protea’), of which the holding company is the Protea Hospitality Corporation (Pty) Ltd, which through a management company, Protea Hotels and Inns (Pty) Ltd, markets and/or manages approximately 130 hotels in Africa and the Middle East. This appeal concerns the Edward Hotel in Durban. Boundary Financing Limited, formerly known as International Bank of Southern Africa Limited (Ibsa), the first defendant in the court a quo and the appellant in this court, got involved in financing schemes with the Karos group of companies which went into liquidation during 1999. One of the companies in that group was Karos (Pty) Ltd (‘Karos’), the third defendant in the court a quo, which owned and still owns the property on which the Edward Hotel is situated. The second defendant in the court a quo was Swanvest (Pty) Ltd (‘Swanvest’), which had purchased the Edward Hotel property from the liquidators of Karos. All the issued shares in Swanvest were held by the appellant and were thereafter sold to the respondent. This agreement (‘the sale of shares agreement’) gave rise to the action in the court a quo which resulted in the court a quo ordering: (i) the rectification of the agreement of sale of shares so as to reflect a warranty and undertaking by the appellant that the Edward Hotel property (and not a different hotel) would be an asset in Swanvest; (ii) the delivery by the appellant to the respondent of all the issued shares in Swanvest against payment of R674 701; and (iii) performance of the warranty in respect of the Edward Hotel property as per the agreement so rectified. With the leave of the court a quo the appellant now appeals against that order. [2] It is common cause between the parties that Protea wished to acquire the Arthur’s Seat Hotel (owned by Karos Cape Shareblock (Pty) Ltd) as well as the Edward Hotel. To this end various contracts were concluded between the appellant and companies within Protea in respect of the Arthur’s Seat Hotel and subsequently, on 1 March 2001, in respect of the Edward Hotel. The latter set of contracts consisted of the following: 2.1 The agreement of sale of shares in terms of which the appellant, the respondent and Swanvest agreed that notwithstanding the date of signature of the agreement and with effect from 2 February 2001 the appellant was deemed to have sold to the respondent 60 ordinary shares of R1 each in Swanvest comprising 60% of the total issued share capital of Swanvest as registered in the name of the appellant for a purchase price of R1. In an annexure incorporated into the agreement it is stated: ‘1 The Seller hereby warrants and undertakes in favour of the Purchaser both as at the effective date and as at the delivery date (unless the context otherwise indicates) that: . . . 1.24 the sole assets of the Company shall be the immovable property known as Remainder of Erf 948 Sea Point West, in extent 4048 square metres, held by Deed of Transfer No. T25566/1997, commonly described as The Arthur Seat Hotel; . . .’ In terms of the agreement the effective date was 2 February 2001 and payment of the purchase price had to be effected within 30 days of that date. Delivery of the shares had to take place within seven days of payment of the purchase price. It is common cause that the agreement formed part of the set of agreements relating to the Edward Hotel and that it had nothing to do with the Arthur’s Seat Hotel. The appellant nevertheless contended that the respondent was not entitled to the rectification of clause 1.24 by the substitution of the property description therein with the property description of the Edward Hotel property. 2.2 A shareholders’ agreement concluded by the same parties in terms of which it was recorded that the respondent had acquired from the appellant 60% of the equity of Swanvest and that Swanvest would be ‘the registered owner of the bare dominium of the property known as ‘Remainder of Sub 1 of Lot 11258 Durban, situate in the city of Durban, Administrative District of Natal, Province of Kwazulu-Natal’ (‘the Edward Hotel property’). 2.3 An agreement of sale in terms of which Swanvest sold to the Protea Hotel Group (Pty) Ltd (‘PHG’) the furniture, fixtures and equipment (‘FF&E’) then in use on the premises of the ‘the Hotel known as The Edward Hotel Beach Front Durban’ for a purchase price of R2 000 000. 2.4 A cession and pledge agreement in terms of which the respondent ceded and pledged to the appellant 60% of the equity in the second defendant in securitatem debiti for the due payment of every sum of money which was then or could thereafter become owing by the respondent to the appellant. 2.5 An agreement of lease in terms of which the appellant let to PHG the Edward Hotel as from 1 February 2001 for a period of 10 years. Although structured as a lease the trial judge rightly found that the rent payable in fact constituted consideration for the acquisition by Protea of the Edward Hotel property. 2.6 A ‘Side Letter’ recording an agreement between PHG, the respondent and the appellant as follows: ‘We hereby record that you have given us the irrevocable right to restructure the series of transactions or any or more of them as contained in the abovementioned documents after we have completed a due diligence investigation of both Swanvest 258 (Pty) Limited as also Karos (Pty) Limited (in liquidation) as to the acquisition of the shares in Karos (Pty) Limited and as to the tax implications of the transactions involving Swanvest 258 (Pty) Limited. In terms of any such reconstruction, we will be entitled to cancel any of the above agreements to enable us as an alternative to purchase the entire share equity of Karos (Pty) Limited subsequent to a section 311 application to the High Court in terms of the Companies Act provided that IBSA is not unreasonably prejudiced thereby, either financially or in terms of its security. An objection by IBSA shall be prima facie proof that it is unreasonably prejudiced by the restructure.’ [3] Karos, the owner and operator of the Edward Hotel, had a substantial assessed loss which Protea hoped to utilise by acquiring the shares in Karos and operating the Edward Hotel through Karos instead of Swanvest, in the event of the liquidation of Karos being terminated pursuant to an application in terms of s 311 of the Companies Act 61 of 1973. It is this possibility that gave rise to the ‘side letter’. It is also as a result of this possibility that effect was not given to the sale of shares agreement. Both the appellant and the respondent accepted that a restructuring was going to take place and that it could serve no purpose to give immediate effect to the provisions of the agreement. The FF & E and lease agreements were nevertheless implemented. [4] Negotiations concerning a restructuring of the agreements ensued and continued until 2004, some considerable time after a scheme of arrangement between Karos (Pty) Ltd (in liquidation) and its creditors had been sanctioned in terms of s 311 at the end of 2002. During the course of these negotiations, on 13 March 2002, the appellant agreed to sell ‘the remaining 40% shareholding in the Arthur’s Seat and the Edward Hotel’ to the respondent for a purchase consideration of R2 349 400 which was subsequently, on 23 May 2002, reduced by R1m to R1 349 400 or R674 000 each. At that stage the parties were still negotiating as to the company in which the Edward Hotel property was to be housed in the event of the agreements being restructured. [5] The negotiations came to an end on 25 November 2004 when the appellant’s attorneys wrote to the respondent that, for a period in excess of three years, the parties had not regarded themselves bound by the suite of agreements concluded on 1 March 2001 and that the obligations arising from the agreement of sale of shares had become prescribed. The respondent thereupon issued summons against the appellant claiming the relief eventually granted by the court a quo. Swanvest and Karos were joined as second and third defendants respectively but no relief was claimed against them. [6] In the court a quo and also before us the appellant contended that the respondent was not entitled to rectification of the agreement of sale of shares and in the alternative that the claim for such rectification had prescribed. In respect of the claim for the making good of the warranty and undertaking that the Edward Hotel property would be an asset in Swanvest as on 2 February 2001 the appellant contended that such an order could not be made as it was impossible to make Swanvest the owner of the property on that date, and also because an order of specific performance was in the circumstances legally inappropriate. In the alternative the appellant contended that the claim for transfer of the shares in Swanvest and the claim that the warranty and undertaking be made good had become prescribed. I shall deal with each of these contentions in turn. Rectification [7] A party is entitled to rectification of a written agreement which, through common mistake incorrectly records the agreement which they intended to express in the written agreement. In the present case it is quite obvious and, as stated above, indeed common cause, that the parties never intended to warrant and undertake that the Arthur’s Seat Hotel property would be an asset in Swanvest as stated in clause 1.24 of the annexure to the agreement of sale of shares. It seems to me to be equally obvious that the parties intended the reference to be to the Edward Hotel property. That is so because Protea wished to acquire the Edward Hotel and the agreements concluded on 1 March 2001 were entered into with that object in mind. Any doubt that there could possibly be in this regard is dispelled by the statement in the shareholders’ agreement that the respondent had acquired from the appellant 60% of the equity of Swanvest and that Swanvest would be the owner of the bare dominium of the Edward Hotel property. One can add to this the fact that on 14 August 2000 the liquidators of Karos had sold the Edward Hotel property to Swanvest and also the fact that the reason for the error seems to be clear. As Mr Arnold Cloete, the financial manager of Protea (the sole witness at the trial), explained, similar agreements in respect of the Arthur’s Seat Hotel had already been concluded and were probably used as a precedent or template. [8] Despite all these indications, counsel for the appellant submitted that it could not have been their intention that the appellant should warrant and undertake that the property would as at 2 February 2001 be an asset in Swanvest because they knew, when the agreement of sale of shares was concluded, that that was not the case. The fact that the parties knew that the property was not an asset of Swanvest on 2 February 2001, taken in isolation, may be considered to be an indication that the parties did not have the intention in question but it may also be an indication that, by so warranting and undertaking, the appellant was simply undertaking to procure transfer of the property to Swanvest. That the latter was the case is in my view put beyond question by the fact that the parties concluded the agreement of sale and the shareholders’ agreement, as also by the terms of the shareholders’ agreement. No other reason has been advanced as to why the parties would have concluded the agreement of sale of the shares of Swanvest and the shareholders’ agreement if not to house the property in Swanvest except in the event of the parties subsequently agreeing to house the property in another company. [9] The appellant submitted furthermore that, as it was envisaged that the liquidation of Karos and the agreement of sale between the liquidators of Karos and Swanvest could be terminated in terms of a scheme of arrangement in terms of s 311, the appellant would not have warranted that the Edward Hotel property would be an asset in Swanvest. However, the appellant could well have had reason to believe that it would in any event be able to procure transfer of the property to Swanvest. [10] Yet a further submission advanced by the appellant as to why the parties would not have entered into a binding agreement to transfer the Edward Hotel property into Swanvest was that the respondent was desirous of making use of the taxed loss in Karos by leaving the property in Karos after its liquidation had been terminated and by acquiring the shares in Karos instead. It is true that, at the time when the agreements were concluded, it was envisaged that it could eventually be agreed to house the Edward Hotel property in a company other than Swanvest but it does not follow from that that the parties had no intention of entering into a binding agreement that it be housed in Swanvest should they fail to agree on another structure. As stated above it is common cause that Protea was desirous of acquiring the Edward Hotel and that it was with that object in mind that the agreements were concluded. Unless the agreement of sale of shares is rectified as claimed by the respondent the parties would not have achieved that object. [11] For these reasons I am satisfied that the parties intended clause 1.24 to refer to the Edward Hotel property. Prescription of the rectification claim [12] The appellant, referring to Primavera Construction SA v Government, North-West Province, and another 2003 (3) SA 579 (B) at 599H-I as authority, submitted that the respondent’s claim for rectification has in any event prescribed. In terms of s 10 of the Prescription Act 68 of 1969 read with s 11(d) of that Act, a debt other than the debts mentioned in ss 11(a) to (c) is extinguished by prescription after the lapse of a period of three years, save where an Act of Parliament provides otherwise. [13] ‘A debt’ is not defined in the Prescription Act. Dealing with the meaning of the Afrikaans ‘`n skuld’ Van Heerden AJA said in Oertel en andere NNO v Direkteur van Plaaslike Bestuur en andere 1983 (1) SA 354 (A) at 370B: ‘Volgens die aanvaarde betekenis van die begrip slaan “`n skuld” op `n verpligting om iets te doen (hetsy by wyse van betaling of lewering van `n saak of dienste), of nie te doen nie. Dit is die een pool van `n verbintenis wat in die reël `n vermoënsbestanddeel en –verpligting omvat . . ..’ A claim for rectification does not have as a correlative a debt within the ordinary meaning of the word. Rectification of an agreement does not alter the rights and obligations of the parties in terms of the agreement to be rectified: their rights and obligations are no different after rectification. Rectification therefore does not create a new contract; it merely serves to correct the written memorial of the agreement. It is a declaration of what the parties to the agreement to be rectified agreed. For this reason a defendant who contends that an agreement sued upon does not correctly reflect the agreement between the parties may raise that contention as a defence without the need to counterclaim for rectification of the agreement (see Gralio (Pty) Ltd v D E Claassen (Pty) Ltd 1980 (1) SA 816 (A) at 824A-C). Should a claim for rectification of a contract become prescribed after three years parties may become entitled to rights and subject to obligations wrongly recorded and never intended eg in the case of a debt secured by a mortgage bond which only prescribes after the lapse of a period of 30 years.1 That, in my view, is a result never intended by the Prescription Act. It follows that in so far as it may have been held in Primavera that prescription runs against a claim for rectification of a contract that decision is wrong. [14] For these reasons the appeal against the order rectifying the agreement of sale should be dismissed. 1 Section 11(a) of the Prescription Act 68 of 1969. Making good the warranty [15] As rectified, the appellant in terms of the annexure to the agreement of sale of shares warranted and undertook in favour of the respondent that the sole asset in Swanvest, as at the effective date and as at the delivery date, would be the Edward Hotel property. [16] The appellant submitted that the warranty as formulated is an affirmative warranty of fact in so far as it related to the effective date whereas the Edward Hotel property was, as a fact, not the sole asset of Swanvest at that date. It was therefore factually and legally impossible for the warranty to be rendered true. As a result the respondent’s only remedy was to claim damages, so the appellant submitted. As authority for the submission the appellant referred to De Wet and Van Wyk Kontraktereg & Handelsreg 5 ed p 88-89 where the authors, with reference to the example of a person selling a horse with a warranty that the horse was still alive only to discover subsequently that the horse was already dead, said: ‘Waar ek die onmoontlike as moontlik waarborg, kan ek dit wel nie moontlik maak nie, maar moet ek by wyse van skadevergoeding my waarborg goed maak.’ In these circumstances the warranty that the horse is still alive is in reality an undertaking to pay damages should it transpire that the horse is already dead.2 Similarly, so the appellant submitted, the sale of shares agreement goes no further than a promise by the appellant to pay damages if the facts are not as warranted. [17] There is no reason to interpret the warranty and undertaking at issue here in a like manner. Unlike the case of the horse, there is no reason to believe that the parties intended that, in the event of the 2 S Williston A Treatise on the Law of Contracts (1938) vol 6 p 5417. property not being an asset in Swanvest as at the effective date, there would be an obligation on the part of the appellant to pay damages but not an obligation to cure its breach of a term of the contract by procuring transfer of the property to Swanvest. Furthermore, unlike the example, the appellant not only warranted but also undertook that the property would be an asset in Swanvest. An undertaking to procure a certain state of affairs on a particular date does not, in the absence of any reason to so interpret the undertaking, change into an undertaking to pay damages should the undertaking not be honoured. Any doubt that there may be in this regard is dispelled by reference to the background circumstances.3 At the time when the agreement of sale of shares was concluded the parties to the agreement were aware that the property had not been registered in the name of Swanvest. They could not, therefore, have intended the ‘warranty and undertaking’ to be anything other than an undertaking to procure transfer of the property to Swanvest. [18] In the alternative the appellant submitted that the court a quo had a discretion to order specific performance and that the present case was not an appropriate case for such an order. It is settled law that a court has a discretion to grant or refuse a decree of specific performance of a contractual obligation. That discretion has to be judicially exercised upon a consideration of all relevant facts and will only be interfered with on appeal when it can be said that ‘the Court a quo has exercised its discretion capriciously or upon a wrong principle, that it has not brought its unbiased judgment to bear on the question or has not acted for substantial reasons’.4 3 See Coopers & Lybrand and others v Bryant 1995 (3) SA 761 (A) at 767E-768E. 4 Ex parte Neethling and others 1951 (4) SA 331 (A) at 335; and Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) 776 at 781A-783C. [19] The appellant submitted that the court a quo should not have granted specific performance because it was not an appropriate remedy as the order could be given effect to only by way of an agreement of sale complying with the formalities prescribed by s 2(1) of the Alienation of Land Act 68 of 1981, between Karos and Swanvest. Not only did such an agreement not exist, the terms of the agreement of sale could not be determined and although the appellant was the sole shareholder of both Karos and Swanvest the directors of these companies might not consider it advisable either to sell or buy the property. For these reasons the order of specific performance by the court a quo amounted to a brutum fulmen. [20] There is no merit in these submissions. An agreement of sale between Karos and Swanvest is not a requirement for the transfer of the property by Karos to Swanvest.5 The appellant undertook to procure such transfer and must have been confident that it would be able to give effect to that undertaking. The appellant did not plead that it would not be able to give effect to an order of specific performance and tendered no evidence to that effect. Moreover, both Swanvest and Karos were parties to the action in the court a quo and neither of them sought to contend that the appellant would not be able to perform the obligation undertaken by it. In these circumstances the court a quo had no reason to doubt that the appellant would be able to do so. No other basis for interfering with the exercise by the court a quo of its discretion to order specific performance was advanced by the appellant. 5 Cape Explosive Works Ltd and another v Denel (Pty) Ltd and others 2001 (3) SA 569 (SCA) at 577D-H par [10]. Prescription of the obligations under the agreement of sale of shares [21] The appellant pleaded that its obligations to deliver 60% of the shareholding in Swanvest and to comply with the warranty and undertaking in respect of the Edward Hotel property fell due for performance by not later than 11 March 2001 and that they were extinguished by prescription by not later than 11 March 2004 ie before service of the summons which took place no earlier than 2 February 2005. The respondent in its plea and before us denied that the appellant’s obligations had prescribed and contended that the running of prescription was interrupted in terms of s 14 of the Prescription Act in that after 11 March 2001, the appellant either expressly or tacitly acknowledged its liability to give effect to the agreement of sale of shares. It did so by, amongst others, concluding, on or about 6 February 2002 and 25 May 2002, the price-reduction agreement in respect of ‘the remaining’ 40% of the shares in the company that was going to hold the Edward Hotel property and also by engaging in negotiations with the respondent in order to effect a restructuring of the agreements relating to the Edward Hotel. [22] In terms of s 14 the running of prescription is interrupted by an express or tacit acknowledgement of liability by the debtor and commences to run afresh from the day on which the interruption takes place. [23] At the time when the sale of shares agreement was entered into the parties knew that the liquidation of Karos could possibly be terminated in terms of s 311 and that this might enable the respondent to acquire the Edward Hotel property by acquiring the shares in Karos instead of Swanvest. For that reason they agreed that the respondent would be entitled to restructure the agreements relating to the Edward Hotel even to the extent of cancelling the agreement of sale of shares. Pursuant to that agreement, and shortly after the conclusion thereof, the appellant and the respondent started negotiating a restructuring of the agreements. As a result of these restructuring negotiations the agreement of sale of shares was not implemented. It does not however follow that the parties had no intention of implementing the agreement of sale of shares. On the contrary, the agreement of sale of shares was clearly entered into to bind the parties to a fall back position should the restructuring negotiations fail. By negotiating a restructuring of, amongst others, the agreement of sale of shares, and not a fresh agreement, the parties tacitly acknowledged the binding nature of that agreement. Confirmation that that was the case is afforded by an internal memorandum of the appellant dated 12 February 2002 in which it is stated, with reference to the set of agreements relating to the Edward Hotel, that due to the s 311 compromise no change would be allowed to the agreements until they (the appellant) understood the implications on the agreements. By selling the remaining 40% of the shareholding in the company that was eventually to hold the Edward Hotel property, the appellant similarly tacitly acknowledged the binding nature of the sale of the other 60% of the shares. [24] The restructuring negotiations were terminated only during 2004 while the sale of the remaining 40% of the shares in the property holding company was concluded on 6 February 2002 and amended on 25 May 2002. It follows that the running of prescription was interrupted by an acknowledgement of liability less than three years before 2 February 2005 when the summons was served and that the respondent’s claims had not become prescribed as contended by the appellant. [25] For these reasons the appeal against the court a quo’s order that the shares in Swanvest be delivered to the respondent against payment of the purchase price in respect thereof and that the warranty be made good should be dismissed. Order [26] The appeal is dismissed with costs including the costs of two counsel. _____________________ P E STREICHER JUDGE OF APPEAL APPEARANCES: For appellant: E Fagan C Hugo Instructed by: Edward Nathan Sonnenbergs, Cape Town Matsepes, Bloemfontein For respondent: H M Carstens SC S P Rosenberg SC Instructed by: Jan S de Villiers, Cape Town McIntyre & Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 27 November 2008 Status: Immediate BOUNDARY FINANCING LIMITED v PROTEA PROPERTY HOLDINGS (PTY) LTD The Supreme Court of Appeal today upheld a judgment by the Cape High Court in terms of which the High Court ordered the appellant to transfer all the issued shares in Swanvest (Pty) Ltd to the respondent against payment of the purchase price in respect thereof and to transfer the Edward Hotel property in Durban to that company.

4139

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 894/2022 In the matter between: ISLANDSITE INVESTMENTS 180 (PTY) LTD APPELLANT and THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS FIRST RESPONDENT IQBAL MEER SHARMA SECOND RESPONDENT NULANE INVESTMENTS 204 (PTY) LTD THIRD RESPONDENT KURT ROBERT KNOOP NO FOURTH RESPONDENT JOHAN LOUIS KLOPPER NO FIFTH RESPONDENT ISSAR GLOBAL LTD SIXTH RESPONDENT ISSAR CAPITAL LTD SEVENTH RESPONDENT TARINA PATEL-SHARMA EIGHTH RESPONDENT Neutral citation: Islandsite Investments 180 (Pty) Ltd v National Director of Public Prosecutions and Others (Case no 894/2022) [2023] ZASCA 166 (1 December 2023) Coram: GORVEN, MOTHLE and MEYER JJA and KATHREE-SETILOANE and UNTERHALTER AJJA Heard: 3 November 2023 Delivered: 1 December 2023 Summary: Company Law –– restraint order under the Prevention of Organised Crime Act 121 of 1998 – authority to represent company in business rescue – directors have no such authority – authority residing with business rescue practitioners. __________________________________________________________________ ORDER ______________________________________________________________________________ On appeal from: Free State Division of the High Court, Bloemfontein (Musi JP, sitting as court of first instance): The appeal is dismissed. The directors of Islandsite Investments 180 (Pty) Ltd, Ms Ragavan and Mr Chawla, are directed to pay the costs of the appeal jointly and severally, the one paying, the other to be absolved. __________________________________________________________________ JUDGMENT __________________________________________________________________ Gorven JA (Mothle and Meyer JJA and Kathree-Setiloane and Unterhalter AJJA concurring) [1] At all material times, the appellant, Islandsite Investments 180 (Pty) Ltd (the company) has been in business rescue in terms of Chapter 6 of the Companies Act 71 of 2008 (the Act). The fourth and fifth respondents on appeal were appointed business rescue practitioners (the BRPs). The first respondent, the National Director of Public Prosecutions (the NDPP), launched an application in the Free State Division of the High Court of South Africa, Bloemfontein, (the high court) in terms of s 26(3) of the Prevention of Organised Crime Act 121 of 1998 (the POCA litigation). It was brought on an ex parte basis, without prior notice to the company, the BRPs or the other respondents. The high court granted a provisional restraint order in respect of property of the company and also of the second, third, sixth, seventh and eighth respondents. When reference is made to the POCA litigation in this judgment, it is to the provisional restraint order proceedings only. It goes no further. [2] The order prompted the directors of the company (the directors) to appoint a firm of attorneys, BDK Attorneys, purporting to do so on behalf of the company. Those attorneys delivered a notice of intention to oppose and an answering affidavit, deposed to by one of the directors. This sought to oppose the confirmation of the provisional restraint order on behalf of the company. Attorneys appointed by the BRPs also delivered an affidavit. In it, the BRPs indicated that there was a dispute between the directors and the BRPs as to which of them was authorised to represent the company in the POCA litigation. [3] In response, the NDPP launched an application in terms of Uniform rule 7(1).1 This allows a party to dispute the authority of attorneys who purport to represent another party. The directors opposed that application, again purporting to represent the company. The application proceeded on the issue of whether the directors, on the one hand, or the BRPs, on the other, had the requisite authority to appoint attorneys to represent the company. The matter was dealt with without reference to the merits of the POCA litigation. The confirmation or otherwise of the provisional restraint order was held over pending the determination of the issue of representation. 1 Rule 7(1) provides: ‘Subject to the provisions of subrules (2) and (3) a power of attorney to act need not be filed, but the authority of anyone acting on behalf of a party may, within 10 days after it has come to the notice of a party that such person is so acting, or with the leave of the court on good cause shown at any time before judgment, be disputed, whereafter such person may no longer act unless he satisfied the court that he is authorised so to act, and to enable him to do so the court may postpone the hearing of the action or application.’ [4] On 11 August 2021, Musi JP granted the following order: ‘1 BDK Attorneys do not have authority to act on behalf of the [company] in these proceedings. 2 The directors and or shareholders of the [company] have no standing to oppose these proceedings without the approval of the business rescue practitioners.’ The appeal against that order is before us with the leave of this court. [5] The parties agreed that either the directors, or the BRPs, have the requisite authority to represent the company in the POCA litigation and not both of them. [6] It is as well briefly to sketch the course of the POCA litigation. The court was approached on an ex parte basis and a provisional restraint order was granted by way of a rule nisi with interim relief. Parties were called upon to show cause why the provisional restraint order should not be made final. That is the stage reached by the present POCA litigation. Should a final order be made, that would restrain the property, pending a criminal trial and any subsequent order confiscating the restrained property. Thus, the restraint order, even if dubbed final, is temporary and designed only to ensure that the property is not dissipated should a conviction ensue and, in addition, an order is thereafter granted confiscating the property in question. If neither eventuates, the restraint order will be discharged. [7] The point of departure in this matter is s 66(1) of the Act, which reads: ‘The business and affairs of a company must be managed by or under the direction of its board, which has the authority to exercise all of the powers and perform any of the functions of the company, except to the extent that this Act or the company’s Memorandum of Incorporation provides otherwise.’ This is a general provision. In general terms, then, and unless other parts of the Act provide otherwise, the directors have authority to represent the company. In the present matter, the question is whether the provisions of chapter 6 of the Act concerning business rescue do so. [8] The contention of the directors was that they alone have authority to represent the company in the POCA litigation. While they accepted that the BRPs were authorised to perform certain functions under the business rescue provisions of the Act, this did not extend to the POCA litigation. [9] Their point of departure was the definition of ‘business rescue’ in s 128 of the Act: ‘“business rescue” means proceedings to facilitate the rehabilitation of a company that is financially distressed by providing for- (i) the temporary supervision of the company, and of the management of its affairs, business and property; (ii) a temporary moratorium on the rights of claimants against the company or in respect of property in its possession; and (iii) the development and implementation, if approved, of a plan to rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company's creditors or shareholders than would result from the immediate liquidation of the company.’ They submitted that the POCA litigation did not ‘facilitate the rehabilitation’ of the company. It was thus not ‘business rescue related litigation’. The function of representing the company cannot be said to be part of the temporary supervision of the company, or of the management of its affairs, business, and property. The authority of the BRPs is limited to day to day management of the company and the compilation of a business rescue plan. Beyond those narrow functions, they have no authority. Accordingly, the BRPs have no authority to act on behalf of the company in the POCA litigation. The default position set out in s 66(1) prevails and the authority of the directors to represent the company remains intact. [10] The directors set some store by Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others.2 In that matter, Tegeta Exploration and Resources (Pty) Ltd (Tegeta) was in business rescue. It was a creditor of Optimum Coal Terminal (Pty) Ltd (OCT) which was also in business rescue. The business rescue practitioners of OCT published a business rescue plan. The directors of Tegeta contended that they had a right to vote on the plan. This court rejected that argument, finding that it was the business rescue practitioners who enjoyed that right. In arriving at this conclusion, this court held that the ‘temporary supervision of the company’3 and ‘full management control’4 included the right to vote on the plan. [11] Despite that outcome, the directors relied on a dictum in Ragavan. This was: ‘. . . whether or not the board retains any power on strategic matters of the company during business rescue is a matter we do not need to determine because, as I have explained, the practitioner enjoys the power to vote as a creditor on the debtor’s plan.’5 They submitted that this meant that they retained power on ‘strategic matters of the company during business rescue’. But that does not properly understand the dictum. It simply recognised a category of decision making power but found it unnecessary to decide who enjoyed this power. 2 Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others (Ragavan) [2023] ZASCA 34; 2023 (4) SA 78 (SCA). 3 Provided for as part of the definition of ‘business rescue’ in s 128(1)(b). 4 Granted to the BRPs by s 140(1)(a) of the Act. 5 Ragavan para 26. [12] They also relied on two dicta of this court in Tayob and Another v Shiva Uranium (Pty) Ltd and Others.6 ‘Unless indicated otherwise, “company” must bear its ordinary meaning and the same meaning as in s 129, that is, the company represented by its board.’7 and: ‘As I have said, the court a quo based its decision to dismiss the applicants’ application essentially on the provisions of s 137(2)(a) of the Act. It provides that during a company’s business rescue proceedings, each director of the company must continue to exercise the functions of a director, “subject to the authority of the practitioner”. Subsection 137(2)(a) must, of course, be read with the provisions of Chapter 6 of the Act and those of s 140 in particular. They circumscribe the ambit of the authority of the practitioner. Any function of a director that falls outside of that ambit, cannot be subject to the approval of the practitioner. It follows that s 137(2)(a) only affects the exercise of the functions of a director in respect of matters falling within the ambit of the authority of the practitioner. As I have shown, the appointment of a practitioner does not fall within the powers or authority of a practitioner.’8 The directors sought support from these dicta for their contention that they retained the authority to represent the company in the POCA litigation. But these dicta simply give effect to the default position set out in s 66(1), and dealt with above. A similar submission had been advanced in Ragavan in support of the contention of those directors that they had the right to vote on the business rescue plan of OCT. Referring to Tayob, this court gave that argument short shrift: ‘In that matter, the court had to address a narrow issue of who of the board or an affected person represented “the company” in appointing a new practitioner in terms of s 139(3) of the Act, in situations where a practitioner dies, resigns, or is removed from office. The court held that the appointment of a practitioner did not fall within the “full management powers” or authority of a practitioner. In that case, the power of the board was found in s 139(3) and was not expressly 6 Tayob and Another v Shiva Uranium (Pty) Ltd and Others (Tayob) [2020] ZASCA 162. 7 Tayob para 20. 8 Tayob para 25. Reference omitted. qualified. In other words, that function fell outside the ambit of the authority of a practitioner and could not be subject to the approval of a practitioner as contemplated in s 137(2)(a) of the Act.’9 [13] In Tayob, the company in question had been placed in voluntary business rescue. As such, the directors were empowered and obliged, in terms of s 129(3), to appoint BRPs. Although they had done so, the BRPs had resigned and a court order had replaced one of them, and directed that the Companies and Intellectual Property Commission (the Commission) appoint another. After this, one of the two replacement BRPs intended to resign. Prior to resigning, that BRP and the remaining one had resolved to appoint another to replace the resigning BRP. On a construction of s 129(3), this court held that the power to appoint BRPs rested with the directors and not with the BRPs. It was found that s 129(3) specifically granted them that power. [14] The issue remains whether, in the circumstances of this matter, the Act ‘provides otherwise’. This requires construing the provisions of the Act concerning the respective authority of the BRPs and directors during business rescue. The approach to that exercise is well established: ‘Whilst the starting point remains the words of the document, which are the only relevant medium through which the parties have expressed their contractual intentions, the process of interpretation does not stop at a perceived literal meaning of those words, but considers them in the light of all relevant and admissible context, including the circumstances in which the document came into being. The former distinction between permissible background and surrounding circumstances, never very clear, has fallen away. Interpretation is no longer a process that occurs in stages but is “essentially one unitary exercise”.’10 9 Ragavan para 27. 10 Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk [2013] ZASCA 176; 2014 (2) SA 494 (SCA); [2014] 1 All SA 517 (SCA) para 12. References omitted. [15] The context under POCA has already been set out. Specific provisions of chapter 6 of the Act concerning business rescue bear on the respective roles of directors and BRPs in the business rescue process. The definition of business rescue in s 128 of the Act connotes proceedings to facilitate the rehabilitation of a company. The goal of those proceedings is rehabilitation. In order to achieve that goal, those proceedings provide for the temporary supervision of the company by persons other than the directors. The only qualification to the word ‘supervision’ is that it is temporary. It is temporary because the rehabilitation or otherwise of the company is time-bound. It is not the supervision which must be demonstrated, at every point, to advance the rehabilitation of the company. That would be a recipe for contestation for every decision and would result in the paralysis of the process of business rescue. It is supervision in every respect. In addition, the management of the company’s affairs, business and property are part of the process. It is implicit in the definition that the BRPs are the persons engaged in the supervision of the company. [16] Section 137(2) provides, in its material parts: ‘During a company’s business rescue proceedings, each director of the company- (a) must continue to exercise the functions of director, subject to the authority of the practitioner; (b) has a duty to the company to exercise any management function within the company in accordance with the express instructions or direction of the practitioner, to the extent that it is reasonable to do so’. The first of these relates to the general functions of directors. They are obliged to continue to exercise these functions but can do so only ‘subject to the authority’ of the BRPs. This is clearly one of the provisions of the Act which qualifies the position of directors set out in s 66(1). Again, this does not delineate those functions of directors which are subject to the authority of the BRPs. The second relates to management functions. All of these must be exercised on ‘the express instructions or direction’ of the BRPs. This also qualifies the provisions of s 66(1). In addition, in terms of s 142, the directors are obliged to surrender all books of the company and to provide information on material transactions, litigation and the assets and liabilities of the company to the BRPs. [17] In contrast to the position of directors, the BRPs are clothed with a number of powers in the Act. In the first place, a BRP is defined as one appointed to ‘oversee a company’ during business rescue proceedings.11 Once again, the word ‘oversee’ is not qualified. There is no mention as to what aspects of the company the BRPs are to oversee. Are they to oversee the company in every respect? That they have the power to do so is implicit in the definition. Another set of implicit powers are those in s 137(2), of assuming authority over the exercise by the directors of their general functions, and giving express instructions and direction to any management functions exercised by them. [18] Along with these implicit powers, the Act grants explicit powers in s140, the material parts of which are: ‘(1) During a company's business rescue proceedings, the practitioner, in addition to any other powers and duties set out in this Chapter- (a) has full management control of the company in substitution for its board and pre-existing management; (b) may delegate any power or function of the practitioner to a person who was part of the board or pre-existing management of the company; . . . (3) During a company's business rescue proceedings, the practitioner- 11 A business rescue practitioner is defined as ‘a person appointed, or two or more persons appointed jointly, in terms of this Chapter to oversee a company during business rescue proceedings and “practitioner” has a corresponding meaning’. (a) is an officer of the court, and must report to the court in accordance with any applicable rules of, or orders made by, the court; (b) has the responsibilities, duties and liabilities of a director of the company, as set out in sections 75 to 77.’ The BRPs are thus accorded ‘full management control of the company’ in place of the board and management but may delegate any of their powers and functions to the directors or erstwhile management. [19] Of further significance is that BRPs have the ‘responsibilities, duties and liabilities of a director . . . as set out in sections 75 to 77’. Those sections deal with directors’ personal financial interests, the standards of conduct of directors and the liability of directors, inter alia, for breaches of fiduciary duties. The BRPs are, in addition, officers of the court and obliged to report to the court in certain circumstances. They are obliged to report ‘reckless trading, fraud or other contravention of any law relating to the company’ to the appropriate authorities and to take remedial action.12 [20] In answer to the contention of the directors that the authority of the BRPs must be construed very narrowly, the NDPP referred to the reasoning in Ragavan. There, this court held that a wide meaning should be given to ‘full management control’ in the Act.13 It went on to hold: ‘The facilitation of the rehabilitation of a company expressly includes management of property. Everything that has to do with the company's debtors clearly falls within the category of management.’ 14 12 Section 141(2)(c)(ii). 13 Ragavan para 16. 14 Ragavan para 18. This court held that, since s 133(1)(a) prohibits enforcement action against the company in relation to any property belonging to it, this ‘reflects the practitioner's control in relation to the claims by third parties to the property of the company’.15 The BRPs will have to consider the effect of the restrained property to determine whether the company is a candidate for rescue and how the restrained assets are to be dealt with in a business rescue plan. The POCA litigation implicates the property of the company directly. In addition, and as was held by the high court, a decision to enter into litigation on behalf of the company, whether as initiator or defender, has potential costs implications which bear on the property of a company. [21] In Tayob, this court, for the purpose of that matter, distinguished between management and governance functions as follows: ‘To appoint a substitute practitioner (who will then be in full management control of the company) is rather a function of governance and approval thereof is not in my view a management function.’ The directors submitted that defending the POCA litigation related to ‘strategic matters of the company’ and ‘governance’ rather than to the ‘full management control’. But Part F of the Act, dealing with governance deals with compliance with the Memorandum of Incorporation and provisions of the Act relating to shareholder rights and resolutions, the calling and conduct of meetings, directors’ powers and duties, eligibility, election and removal, the board and committees and their meetings. Those are governance matters dealt with in the Act. The NDPP contended that the decision to defend litigation is, in any event, a management power rather than one of governance. This appears to me to be correct but I find the distinction sought to be drawn between powers of management and governance of companies unhelpful in the present enquiry. As has already been pointed out, the enquiry is 15 Ragavan para 19. whether the provisions in the Act relating to business rescue provide an exception to the general provisions of s 66(1) regarding the powers of directors. [22] An argument before us which was not foreshadowed in the heads, was that the POCA litigation may well have implications for the conduct of the impending criminal trial. The directors contended that, for that reason, only they could adequately protect the interests of the company. An example given was that, if they were allowed to represent the company in the POCA litigation, the BRPs might prejudice the right to silence of the company in the criminal matter. As indicated, the POCA litigation directly implicates the property of the company, which falls within the ambit of the authority of the BRPs. What must be borne in mind is that both the directors and the BRPs are enjoined to act in the best interests of the company. The first resort would be to explore whether the directors and the BRPs are able to agree on the conduct of the POCA litigation. If agreement cannot be reached, and if it can be shown that the BRPs had acted or were about to act in a manner which could be shown to prejudice the company, there are remedies available to interested parties such as directors. [23] In the light of the provisions of the Act, there is no warrant for finding that the directors have the requisite authority to appoint attorneys to litigate on behalf of the company. The clear interpretation of the Act affords the BRPs that authority in the POCA litigation. This is, in particular, because property of the company is implicated in the POCA litigation. It follows that the order of the high court cannot be faulted. As a result, the appeal must be dismissed. [24] The BRPs contended that they could authorise the directors to deliver an affidavit and present argument in the POCA litigation. That contention proceeds from the premise that they have authority. It does not inform the issue in the rule 7 application which is limited to the question whether or not they have such authority. The contention goes to the question of the manner in which the BRPs exercise that authority. That enquiry does not fall within the ambit of the rule 7 application. It must be reserved for another day. [25] The NDPP submitted that the directors, Ms Ragavan and Mr Chawla, should be directed to pay the costs of the appeal personally. It has been found that they had no authority to represent the company, which is nominally the appellant, and instruct the attorneys to appeal the judgment of the high court on its behalf. The directors did so without authority. If persons who are not authorised to do so, purport to appoint attorneys to represent a company, it can hardly be expected of the company to bear the costs flowing from that action. Notice was given to the directors that such an order would be sought. It is appropriate that they pay the costs of this appeal. [26] In the result, the following order issues: The appeal is dismissed. The directors of Islandsite Investments 180 (Pty) Ltd, Ms Ragavan and Mr Chawla, are directed to pay the costs of the appeal jointly and severally, the one paying, the other to be absolved. ____________________ T R GORVEN JUDGE OF APPEAL Appearances For appellant: M R Hellens SC with D J Joubert SC Instructed by: Krause Attorneys, Johannesburg Honey Attorneys, Bloemfontein For first respondent: G Budlender SC Instructed by: State Attorney, Bloemfontein For fourth and fifth respondents: A E Bham SC with T Scott Instructed by: Smit Sewgoolam Incorporated, Johannesburg McIntyre van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 1 December 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Islandsite Investments (Pty) Ltd v The National Director of Public Prosecutions and Others (Case no 894/2022) [2023] ZASCA 166 (1 December 2023) Today the Supreme Court of Appeal dismissed an appeal from a judgment of the Free State Division of the High Court, Bloemfontein (the high court) in which Musi JP granted an order declaring that attorneys appointed by the directors of Islandsite Investments 180 (Pty) Ltd (the company), which was in business rescue, did not have authority to represent the company in an application brought by the National Director of Public Prosecutions (the NDPP) to restrain assets of the company under the Prevention of Organised Crime Act 121 of 1998 (the POCA litigation). A second order made clear that the directors and shareholders had no standing to oppose the POCA litigation without the approval of the business rescue practitioners (the BRPs). The present appeal had its genesis in the POCA litigation. The NDPP had obtained a provisional restraint order ex parte. The company was called upon to show cause on the return date of a rule nisi why the provisional restraint order should not be made final. Such a final order is not, itself, final since it serves only to preserve the restrained property until a criminal prosecution is complete and an application for confiscation of the property is brought. If neither of those procedures succeeds, the restraint order would be discharged. In answer to the rule nisi, the directors appointed attorneys who then purported to represent the company by opposing the confirmation of the provisional restraint order and putting up an affidavit purporting to do so on behalf of the company. The BRPs also put up an affidavit pointing out that there was a dispute between them and the directors as to which of them had the authority to represent the company in the POCA litigation. This prompted the NDPP to launch an application in terms of Uniform rule 7 disputing the authority of the attorneys concerned to represent the company. The basis of that application was that, since the company was in business rescue, only the BRPs had authority to appoint attorneys to represent the company. As indicated, the high court upheld the application of the NDPP. On appeal, the directors submitted that the authority of the BRPs to represent the company should be narrowly construed and was limited to the day to day management of the company and the production of a business rescue plan. All other powers were retained by the directors in terms of the general provisions of s 66(1) of the Companies Act 71 of 2008. As such, it was the directors who were authorised to represent the company in the POCA litigation. The Supreme Court of Appeal analysed the provisions of chapter 6 of the Companies Act relating to business rescue and concluded that those provisions accorded to the BRPs the authority to represent the company in the POCA litigation. Following previous cases of this court, it was held that ‘the facilitation of the rehabilitation of a company expressly include management of property’ and that management should be widely construed. In the light of the provisions of chapter 6 of the Companies Act, it was held that the directors did not have the authority to represent the company in the POCA litigation. The appeal was dismissed. Since the directors did not have authority to appoint the attorneys concerned to represent the company, the company could not be held liable for the costs of the appeal and the directors were ordered to pay those costs personally. ~~~~ends~~~~

1395

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 564/09 In the matter between: ROGER HUGH MARGO First Appellant SHERIFF FOR THE DISTRICT OF RANDBURG Second Appellant and TONY RICKY GARDNER Respondent Case no: 511/09 In the matter between: TONY RICKY GARDNER First Appellant OTR MINING LIMITED Second Appellant and ROGER HUGH MARGO First Respondent SHERIFF FOR THE DISTRICT OF RANDBURG Second Respondent Neutral citation: MARGO v GARDNER (564/09) [2010] ZASCA 110 (17 September 2010) Coram: HARMS DP, HEHER, SHONGWE, LEACH JJA and EBRAHIM AJA Heard: 31 AUGUST 2010 Delivered: 17 SEPTEMBER 2010 SUMMARY: In duplum rule – its application – whether interest accumulates pendente lite – meaning of its suspension and consequences ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: South Gauteng High Court (Johannesburg) as courts of first instance). The following order is made: (1) In case 564/09 The appeal is dismissed with costs, the appellants are ordered to pay such costs jointly and severally, the one paying the other to be absolved. (2) In case 511/09 (a) The appeal is upheld with costs; and (b) The order of the court a quo is set aside and substituted with the following: ‘The application is dismissed with costs.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ SHONGWE JA (HARMS DP, HEHER, LEACH JJA and EBRAHIM AJA concurring): [1] This appeal concerns the application of an old common law rule known as the in duplum rule. It means in general terms that a creditor is not entitled to claim unpaid interest in excess of the capital outstanding. An extensive discussion of its historical development is to be found in LTA Construction Bpk v Adminstrateur, Transvaal 1992 (1) SA 473 (A). [2] There are in fact two appeals similar in almost all respects which were argued as one. The one is Gardner (appellant) against Margo (Respondent) (case no 511/09) and the other is Margo (appellant) against Gardner (Respondent) (case no 564/09). Gardner’s appeal was with the leave of this court and Margo’s with leave of the court a quo (South Gauteng High Court, Johannesburg). [3] The appeal by Gardner is against the dismissal of his application by Horwitz AJ. The appeal by Margo is against an order of Gyanda J. Horwitz AJ concluded that the in duplum rule did not apply in the present instance, whereas Gyanda J on the same set of facts concluded that the in duplum rule was applicable and found in favour of Gardner. [4] On 14 April 1999 Margo served a summons against Gardner (as the first defendant) and O T R Mining Ltd (as the second defendant). Mlambo J found in favour of Margo for the payment of the sum of approximately R15 000 000.00. Gardner appealed against the finding to this court. The appeal succeeded and the following order was made on 28 March 2006: ‘1. Against the first defendant, for payment of the amount of R1 461 432 plus interest thereon at the rate of 15,5% per annum from 1 September 1998 to date of payment. 2. Against the second defendant, for payment of the amount of R1 461 432 plus interest at the rate of 15,5% per annum from 1 September 1998 to date of payment, the second defendant to be liable to make such payment only in the event that, and to the extent that, the first defendant fails to do so.’ The said judgment is reported as Gardner & another v Margo 2006 (6) SA 33 (SCA). [5] Pursuant to the SCA judgment Gardner made a payment of the sum of R1 222 864 on 24 April 2006 and on 23 September 2006 a further R1 800 000. The total paid at that stage amounted to R3 022 864. Gardner contended that after the second payment he understood that the two payments were made in full and final settlement of the capital (although with no proof of this). He was of the view that the only outstanding item was the question of costs of the proceedings. This contention was disputed by Margo. [6] The relevant bills of costs were taxed and the respective attorneys exchanged a series of letters between them regarding what was still owing by Gardner. The gist of the correspondence was in respect of the calculation of the interest, as well as the taxed bills of costs. The parties also attempted to enter into negotiations of how to settle the issue of costs. A set-off was suggested regarding the payment of costs, though they failed to resolve the dispute. Margo’s attorneys proposed that the payment of the outstanding amount must take place on or before 23 November 2009, failing which a writ of execution would be issued. Gardner’s attorneys made a counter proposal and advised that if the parties fail to agree they will be forced to bring an urgent application to suspend the execution of the warrant. As no settlement had been reached by 27 November 2007, the proposal for payment to be made by 23 November 2007 lapsed and a writ of execution was issued. [7] On 7 December 2007 a writ of execution was sent to Gardner’s attorneys as well as to the Sheriff for service, claiming the sum of R185 983.00 being the balance of the interest owing on the judgment debt, and a sum for taxed costs. (The costs issue is not relevant in this judgment). Gardner launched an urgent application to have the writ suspended, pending the outcome of an application for a declaratory order that the SCA judgment had been satisfied, and for the setting aside of the writ. On 28 February 2008 Horwitz AJ dismissed with costs the application for a declarator, and subsequently dismissed the application for leave to appeal. [8] On 3 October 2008 Margo caused a second writ of execution to be issued alleging that the first one reflected incorrect amounts and was therefore withdrawn. The second writ reflected the balance of the capital sum of R264 396.06 plus interest thereon at the rate of 15,5% per annum calculated form 24 September 2006 to 30 September 2008 in the sum of R82 749.02 and a further interest on R264 397.06 at 15,5% per annum calculated from 1 October 2008 to date of payment. Gardner launched another urgent application to suspend the second writ and later launched another application to have the aforesaid writ set aside and to declare that he was not indebted to Margo for any capital sum, interest or costs pursuant to the SCA judgment. Gyanda J found in favour of Gardner and ordered Margo to pay to Gardner a sum of R5 615.83 representing the amount by which he found Gardner had overpaid and also set aside the second writ and declared that Gardner was no longer indebted to Margo. On 23 September 2009 the High Court granted leave to appeal to this court. [9] I may mention that during argument before Gyanda J, counsel for Margo raised the question whether the issues dealt with in Horwitz AJ’s judgment were not res judicata as they were between exactly the same parties and in respect of exactly the same facts. Gyanda J ruled that he could not decide that question due to the fact that Horwitz AJ’s judgment had yet not been signed. In view of the conclusion I hold in this matter it will not be necessary to deal with that question for purposes of this judgment. [10] Gardner’s submission was that a judgment debt accumulates interest only until the amount thereof reaches the double of the capital amount outstanding in terms of the judgment. He relied on Standard Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd (in liquidation) 1998 (1) SA 811 (SCA) at 827H-I, read with page 834G-I and Commercial Bank of Zimbabwe Ltd v M M Builders and Suppliers (Pvy) Ltd & others and three similar cases 1997 (2) SA 285 (ZH) at 303C-E. The argument failed to have regard to the full import of Oneanate and it is wrong to state that interest runs only (my underlining) until the amount of interest reaches the double of the capital amount. The word ‘only’ is in my view, misplaced because in Oneanate (after referring to the Commercial Bank case) (supra) it was held at 834H- I: ‘that interest on the amount ordered to be paid may accumulate to the extent of that amount irrespective of whether it contains an interest element. This would then mean that (i) the in duplum rule is suspended pendente lite, where the lis is said to begin upon service of the initiating process, and (ii) once judgment has been granted, interest may run until it reaches the double of the capital amount outstanding in terms of the judgment.’ [11] The gist of the passage quoted above is that interest does not run only until the amount thereof reaches the double of the capital amount outstanding in terms of the judgment but it also runs pendente lite because, as a rule, the in duplum rule is suspended during the litigation. What appears to be clear in the present matter is that Gardner failed to accommodate or recognize the suspension of the in duplum rule during the period when the matter was pending before this court as envisaged in Oneanate at page 834H-I (supra). Counsel for Gardner argued that the difference between this appeal and the Oneanate case lies in the cause of action. The cause of action however makes no difference in the application of the in duplum rule see LTA Construction Bpk; (supra) Bellingan v Clive Ferreira & Associates CC 1998 (4) SA 382 (W); Meyer v Catwalk Investments 354 (Pty) Ltd 2004 (6) SA 107 (T). ‘The prohibition on interest in duplum rule is not limited to money-lending transactions but applies to all contracts arising from a capital sum owed, which is subject to a specific rate of interest’ (Monica L Vessio ‘A limit on the limit on interest? The in duplum rule and the public policy backdrop’ (2006) 39 De Jure 25 p 26-27). [12] It is trite that the in duplum rule forms part of South African law. It is also axiomatic that the in duplum rule prevents unpaid interest from accruing further, once it reaches the unpaid capital amount. However, it must be borne in mind that a creditor is not prevented by the rule from collecting more interest than double the unpaid capital amount provided that he at no time allows the unpaid arrear interest to reach the unpaid capital amount. On the facts of this appeal this court is not asked to review the order of the SCA but to give effect to it as it stands. The order of the SCA is unequivocal and does not provide for any interest ceiling. Therefore the amounts claimed in the second writ are all due and owing by Gardner to Margo on the strength of the SCA judgment. The purpose or basis of the in duplum rule is to protect borrowers from exploitation by lenders who permit interest to accumulate, but essentially also to encourage plaintiffs to issue summons and claim payment of the debt speedily. Delays inherent in litigation cannot be laid at the door of litigants and it would be unfair to penalize a creditor with the application of the in duplum rule while proceedings are pending. Compare Titus v Union & SWA Insurance Co Ltd 1980 (2) SA 701 (Tk SC) 704. [13] I agree with counsel for Margo that ‘It must be borne in mind that when the SCA order was granted, the double capital would by then have been reached had the in duplum rule applied throughout the period from 1 September 1998 to 27 March 2006. The interest for the period 1 September 1998 to 27 March 2006 amounted to R1 715 360.81. The interest for this period was clearly more than double the capital amount.’ [14] Gyanda J found that the in duplum rule was applicable relying on the authority of Oneanate. However, in my respectful view, the learned judge omitted to deal with the position pendente lite which makes a huge difference on the application of the rule. This led to two conflicting judgments in which both relied on one authority namely the Oneanate case. [15] It is because of the above reasons that I make the following order: (1) In case 511/09 The appeal is dismissed with costs, the appellants are ordered to pay such costs jointly and severally, the one paying the other to be absolved. (2) In case 564/09 (a) The appeal is upheld with costs; and (b) The order of the court a quo is set aside and substituted with the following: ‘The applications are dismissed with costs which costs are to include the ocsts reserved on 14 October 2008.’ _________________ J SHONGWE JUDGE OF APPEAL APPEARANCES: For Gardner: Hennie M de Kock Phlip A Myburgh Instructed by: Pierre Wolmarans Manong Badenhorst Abbot van Tonder RANDBURG Naudes Bloemfontein For Margo: Marius van Wyk Instructed by: Johan Dreyer Dreyer & Nieuwoudt RANDBURG Symington & De Kock Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 September 2010 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. MARGO v GARDNER – Case No 564/09 GARDNER v MARGO – Case No 511/09 The Supreme Court of Appeal upheld the appeal against the order of the South Gauteng High Court (Case no 511/09) and set aside the order of the court a quo, however, it dismissed the appeal against the order of the South Gauteng High Court (Case no 564/09). Gardner owed Margo a certain amount of money and the SCA in an earlier judgment (Gardner & another v Margo 2006 (6) SA 33 (SCA)) ordered Gardner and OTR Mining Ltd to pay Margo a certain amount plus interest thereon at the rate of 15.5% per annum from 1 September 1998 to date of payment. The dispute was on whether or not the in duplum rule was applicable. Two conflicting judgments were delivered by the South Gauteng High Court on the same set of facts. The SCA found that the in duplum rule was applicable. In general terms it simply means that a creditor is not entitled to claim interest in excess of the capital outstanding. The nub of the judgment of the SCA is that the in duplum rule is suspended if and when proceedings are pending.

2913

non-electoral

2015

SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 20044/2014 Reportable In the matter between: NATIONAL HEALTH LABORATORY SERVICE Appellant and MARIANA MAGDALENA LLOYD-JANSEN VAN VUUREN Respondent Neutral citation: National Health Laboratory Service v Mariana Lloyd- Jansen van Vuuren (20044/2014) [2015] ZASCA 20 (19 March 2015). Coram: Mhlantla, Shongwe and Wallis JJA and Dambuza and Mayat AJJA Heard: 25 February 2015 Delivered: 19 March 2015 Summary: Contract – interpretation and application of employment agreements – the obligations under the two agreements are interdependent. ___ ORDER ___ On appeal from: Gauteng Local Division, Johannesburg (LJ van der Merwe AJ sitting as court of first instance): 1 The appeal is upheld with costs. 2 The order of the high court is set aside and replaced with: „(a) It is declared that the obligation recorded in clause 3.4 of the contract concluded on 4 January 2006 continued to exist notwithstanding the conclusion of the subsequent employment agreement dated 16 April 2010 between the plaintiff and the defendant. (b) It is declared that the defendant is liable to the plaintiff pursuant to the provisions of clause 3.4 of the initial contract. (c) The defendant is ordered to pay the costs of suit as between party and party.‟ ___ JUDGMENT ___ Mhlantla JA (Shongwe and Wallis JJA and Dambuza and Mayat AJJA concurring): Introduction [1] The present dispute arose from two separate agreements concluded between the National Health Laboratory Service (the appellant) and Dr Mariana Magdalena Lloyd-Jansen van Vuuren (the respondent). The respondent, a medical practitioner, wanted to become a specialist pathologist. In order to qualify as such one has to work as a specialist trainee1 and hold a training post within the Department of Health or at a health laboratory in South Africa. In January 2006 the appellant employed the respondent as a junior registrar. The parties concluded an agreement setting out the terms of the respondent‟s training and employment (the initial contract). [2] The provisions relating to training are found in clause 3 of the initial contract. The respondent was required to complete her studies for the M.Med degree within a period of five years, be attached to the University of the Free State and be subject to some supervision and assessment. The parties quantified the value of the training to be provided by the appellant and agreed that if the respondent did not work for the appellant for a period of two years after completion of her training and qualification as a specialist, she would re-imburse the appellant for the training costs incurred. This meant that she would either work for the appellant for a period of two years or pay an amount of R2 million should she resign earlier than the stipulated period. [3] On 1 February 2006 the respondent commenced her duties as a junior registrar. In 2008, she was promoted to the position of a senior registrar. She completed her studies and training before the expiry of the five year period stipulated in the contract. [4] In April 2010 the appellant employed the respondent as a specialist pathologist. A contract to that effect was concluded (the second agreement). No reference was made in this contract to the respondent‟s 1 A specialist trainee in any one of the branches of medicine including pathology has to be registered at a university for a master of medicine degree (M.Med). Only graduates in medicine (MBChB) who have completed the prescribed intern period and who are registered with the Health Professions Council of South Africa are allowed to register for the M.Med programme. A specialist trainee is referred to as a registrar. obligation to work for the appellant for two years or pay the amount of R2 million if she left its employ before the expiry of the stipulated period. [5] Four months later, in July 2010, the respondent resigned. The appellant demanded payment of the amount of R2 million from the respondent. She refused to pay contending that the second agreement was silent on her obligation to pay or work for the appellant for two years and that its conclusion had terminated the initial contract and with it the obligation to repay this amount. [6] As a result, the appellant instituted action in the South Gauteng High Court, Johannesburg for payment of the amount of R2 million together with interest and costs. The matter came before LJ van der Merwe AJ. At the commencement of the trial the parties requested the court a quo to separate the issues relating to liability from those relating to quantum. The judge accordingly issued an order separating the merits from the quantum. The parties presented him with a stated case on the merits. Consequently, no evidence was led at the trial. The court a quo had to determine whether the conclusion of the second agreement between the appellant and the respondent on 16 April 2010 terminated the appellant‟s rights contained in clause 3.4 of the initial contract. [7] The court a quo was left unpersuaded by the appellant‟s submission that the obligation recorded in clause 3.4 of the initial contract survived the termination of the initial contract and continued to exist after the conclusion of the second employment agreement between the parties. The court rejected all of the appellant‟s contentions and held that the appellant had the opportunity to incorporate the provisions of clause 3.4 of the initial contract into the second agreement. The court further held that the second agreement not only replaced the initial agreement, but also expressly recorded that the second agreement constituted the whole agreement between the parties. The court concluded that the parties had agreed, by virtue of the provisions of the second agreement, that the provisions of clause 3.4 of the initial contract no longer applied. Therefore, the court a quo dismissed the appellant‟s claim. It refused leave to appeal and this appeal is with the leave of this court. [8] The issues on appeal concern the interpretation and application of the two agreements and whether the second agreement replaced the initial contract. Contracts [9] It is apposite at this stage to set out in detail the relevant terms of these contracts. In this regard, I will commence with the initial contract (the 2006 agreement), which also covered the training of the respondent. It was concluded on 4 January 2006. The respondent was employed as a junior registrar with effect from 1 February 2006. The relevant details relating to training are set out in clause 3. The respondent was subject to an annual performance review. Her progression to the next year was subject to evidence of satisfactory progress. She was obliged to register with the University of the Free State for the M.Med degree and write the requisite examinations before the expiry of the five year period. She was also obliged to register with the Health Professions Council of South Africa (HPCSA). [10] The contentious clause is clause 3.4 which reads: „On completion of the requirements for registration as a specialist with the HPCSA the employee shall continue to work for the NHLS as a specialist pathologist for a period of two years following specialist registration. For the purposes of this agreement, registrar training is deemed to be worth R2 million, irrespective of the time spent in training, the sum of which shall be worked off over a full two-year period (24 months). Should the employee complete the first full twelve months of this period, the employee‟s indebtedness to the NHLS shall be reduced to 75% of the full amount owing. Should the employee not complete the two-year post-specialist registration working requirement, the employee shall pay back to the NHLS the amount owing in a single lump sum prior to resignation. The employer may at its discretion cancel the indebtedness of the employee at any time.‟ [11] The remainder of the clauses related to the terms and conditions of employment, that is, the duties of the employee, remuneration, probation period, restraint of trade and termination of employment. The termination clause made provision for the unilateral termination of the agreement by either party on one calendar month‟s written notice to the other party. [12] In so far as the second agreement was concerned, this was concluded in April 2010, when the respondent was appointed as a specialist pathologist. She was required to provide proof, by 30 April 2010, that she had applied for registration with the HPCSA as a specialist pathologist. No reference was made to the obligation recorded in clause 3.4 of the initial contract. The second agreement was broadly similar to the initial contract, but excluded clause 3 which related to the training of the respondent. The termination clause also made provision for the unilateral termination of the agreement by either party on one calendar month‟s written notice to the other party. Interpretation [13] Our law relating to the interpretation of documents has evolved since the earlier approach enunciated in Coopers & Lybrand & others v Bryant2 where it was held: „The correct approach to the application of the “golden rule” of interpretation after having ascertained the literal meaning of the word or phrase in question is, broadly speaking, to have regard: (1) to the context in which the word or phrase is used with its interrelation to the contract as a whole, including the nature and purpose of the contract, as stated by Rumpff CJ supra; (2) to the background circumstances which explain the genesis and purpose of the contract, ie to matters probably present to the minds of the parties when they contracted…; (3) to apply extrinsic evidence regarding the surrounding circumstances when the language of the document is on the face of it ambiguous, by considering previous negotiations and correspondence between the parties, subsequent conduct of the parties showing the sense in which they acted on the document, save direct evidence of their own intentions.‟ (Citations omitted.) [14] This court in Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk,3 reformulated the principles governing the approach to interpretation as follows: „Whilst the starting point remains the words of the document, which are the only relevant medium through which the parties have expressed their contractual intentions, the process of interpretation does not stop at a perceived literal meaning of those words, but considers them in the light of all relevant and admissible context, including the circumstances in which the document came into being. The former distinction between permissible background and surrounding circumstances, never very clear, has fallen away. Interpretation is no longer a process that occurs in stages but is “essentially one unitary exercise”. Accordingly it is no longer helpful to refer to the earlier approach.‟ 2 Coopers & Lybrand & others v Bryant 1995 (3) SA 761 (A) at 768A-E. 3 Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk 2014 (2) SA 494 (SCA) para 12. Novation [15] To the extent that the judgment of the court a quo was premised upon novation, it is necessary for me to consider this aspect. There is a presumption against novation because it involves a waiver of existing rights. When parties novate they intend to replace a valid contract with another valid contract. In determining whether novation has occurred, the intention to novate is never presumed. In Acacia Mines Ltd v Boshoff,4 the court held that novation is essentially a question of intention. [16] In Proflour (Pty) Ltd & another v Grindrod Trading (Pty) Ltd t/a Atlas Trading and Shipping & another5 the court, when determining whether the agreement resulted in a novation, referred to the decision of Electric Process Engraving and Stereo Co v Irwin 1940 AD 220 at 226- 227 where the court said: „The law on the subject was clearly enunciated as far back as 1880 in the well-known case of Ewers v The Resident Magistrate of Oudtshoorn and Another, (Foord) 32, where DE VILLIERS, C.J, said: “The result of the authorities is that the question is one of intention and that, in the absence of any express declaration of the parties, the intention to effect a novation cannot be held to exist except by way of necessary inference from all the circumstances of the case.”‟ It follows that in order to establish whether novation has occurred, the court is entitled to have regard to the conduct of the parties, including any evidence relating to their intention. [17] It was submitted before us, on behalf of the respondent, that both contracts could not exist simultaneously. It was contended that clause 3.4 of the initial contract should have been incorporated into the second 4 Acacia Mines Ltd v Boshoff 1958 (4) SA 330 (A) at 337D. 5 Proflour (Pty) Ltd & another v Grindrod Trading (Pty) Ltd t/a Atlas Trading and Shipping & another [2010] 2 All SA 510 (KZD) para 10. agreement. In the circumstances of this case, novation had occurred and the second agreement had replaced the initial contract in toto, so the argument went. [18] I do not agree with this submission. The interpretation contended for by the respondent is contrary to the background circumstances of the matter and the intention of the parties. In this regard, I respectfully disagree with the reasoning of the court a quo. In applying the above mentioned legal principles to the facts of this matter, it is evident that the two contracts served different purposes. The initial contract was primarily concerned with the training of the respondent. The parties agreed on the value of the training so as to avoid any dispute should the respondent resign after qualifying as a specialist. The first sentence in clause 3.4 conferred some rights and obliged both parties to perform. On the one hand, the appellant undertook to employ the respondent upon qualifying as a pathologist whilst she undertook to work for the appellant for two years or to re-imburse the appellant if she did not do so. Clause 3.4 also provided that irrespective of the time spent in training, which included completion of the training in a shorter time period, the respondent undertook to work for a further two years, failing that, to pay the amount of R2 million to the appellant. [19] Clauses 1.1 and 3.4 of the initial contract determined and regulated any future employment relationship between the parties. The respondent was obliged to recompense the appellant in respect of the moneys expended towards her training, either by rendering her services to the appellant for a specified period or by repaying the full amount spent on her training. This is what the parties agreed to do and they concluded an agreement to that effect. These undertakings are therefore binding on the parties. [20] It is common cause that the respondent received training with the financial assistance of the appellant. The appellant complied with its obligation by employing the respondent in April 2010. This is the contract in terms of which both parties would perform in order to comply with their obligations set out in clause 3.4. This agreement was purely an employment contract of the respondent as a specialist pathologist. The conclusion of the second agreement constituted the implementation of the two-year employment obligation following registration of the respondent as a specialist as undertaken in clause 3.4 of the initial contract. The second agreement was accordingly a continuation of the initial contract, in that the respondent was now employed as a specialist pathologist, something envisaged in clause 3.4. This contract did not vary or cancel the obligations imposed by the initial contract. In the result novation did not occur. The indebtedness of the respondent in terms of the initial contract could never be extinguished by the conclusion of the second agreement. [21] Lastly, it was submitted on behalf of the respondent that the termination clause in the second agreement was in conflict with clause 3.4 of the initial contract. Any reliance on this clause is misplaced. It has to be borne in mind that the notice period was a standard term. The argument loses sight of the fact that both agreements contained the termination clauses and these were identical. There is nothing peculiar in having such a term. The only logical conclusion is that the respondent could terminate the agreement subject to the provisions of clause 3.4. [22] It follows that clause 3.4 of the initial contract is still in operation and that the indebtedness of the respondent towards the appellant remains notwithstanding the conclusion of the second agreement. This clause could only be cancelled by the appellant and this was not done. The appeal must therefore succeed. [23] In the result the following order is made: 1 The appeal is upheld with costs. 2 The order of the high court is set aside and replaced with: „(a) It is declared that the obligation recorded in clause 3.4 of the contract concluded on 4 January 2006 continued to exist notwithstanding the conclusion of the subsequent employment agreement dated 16 April 2010 between the plaintiff and the defendant. (b) It is declared that the defendant is liable to the plaintiff pursuant to the provisions of clause 3.4 of the initial contract. (c) The defendant is ordered to pay the costs of suit as between party and party.‟ __________________ NZ MHLANTLA JUDGE OF APPEAL APPEARANCES: For Appellant: R Ram Instructed by: Shepstone & Wylie Attorneys, Sandton Matsepes Inc, Bloemfontein For Respondent: S Snyman Instructed by: Snyman Attorneys, Houghton Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 19 March 2015 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. National Health Laboratory Service v Mariana Magdalena Lloyd-Jansen Van Vuuren (20044/2014) [2015] ZASCA 20 MEDIA STATEMENT Today, the Supreme Court of Appeal (SCA) upheld an appeal against a decision of the Gauteng Local Division, Johannesburg. The issue before the SCA was whether the conclusion of an employment contract between the appellant and the respondent had the effect of novating (i.e. completely extinguishing) a previously concluded training and employment contract, with the result that all rights and obligations arising from that previous contract would also be extinguished. The respondent, Ms van Vuuren, was a medical doctor who, as part of the process of further qualifying as a specialist pathologist, in 2006 entered into a training and employment contract (the initial contract) with the appellant, the National Health Laboratory Service. The initial contract set out the respondent’s training regime and required her, once she had qualified as a pathologist, to work in that capacity for the appellant for a period of two years. The contract further provided that should she fail to work for this period, she would reimburse the appellant for the expenses incurred in her training. This amount was quantified in the contract as R2 million. In 2010, the respondent qualified as a pathologist, and the appellant employed her in that role in terms of a new employment contract (the second contract). This second contract made no mention of the obligation to work for the appellant for two years or the R2 million penalty in the event she resigned earlier than the stipulated period. After four months, the respondent resigned and refused to pay the penalty, contending that the conclusion of the second contract had terminated the initial contract including the penalty provision. The appellant then instituted action in the Gauteng Local Division, Johannesburg for payment of the R2 million. The high court, ruling on the merits, found in favour of the respondent. On appeal, the SCA held that this was a matter of interpretation of the two contracts. This court noted that the contracts must be interpreted in the light of all relevant and admissible context, including the circumstances in which the documents came into being. The SCA also referred to an established principle that novation will never be presumed by the court. Upon consideration of whether the requisite intention to novate could be inferred from all the available evidence, the SCA rejected the respondent’s interpretation on the basis that it was contrary to the background circumstances of the contracts. This court held that it was evident that the contracts served different purposes and could exist simultaneously and without conflict. Thus it was held that novation had not occurred. In the result, the SCA upheld the appeal and set aside the order of the high court. It issued a declarator that the obligation recorded in clause 3.4 of the contract concluded on 4 January 2006 continued to exist notwithstanding the conclusion of the employment agreement dated 16 April 2010 between the appellant and the respondent. The court further declared the respondent liable to the appellant pursuant to the provisions of the relevant clause. -- ends ---

2751

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 36/11 In the matter between: Reportable NORTHERN METROPOLITAN LOCAL COUNCIL Appellant and COMPANY UNIQUE FINANCE (Pty) Ltd First Respondent FIRST NATIONAL BANK OF SOUTHERN AFRICA LIMITED Second Respondent JOHANNES JACOBUS DU PLESSIS Third Respondent Neutral citation: Northern Metropolitan Local Council v Company Unique Finance (36/11) [2012] ZASCA 66 (21 May 2012) Coram: MPATI P, CLOETE, SNYDERS and BOSIELO JJA and NDITA AJA Heard: 21 February 2012 Delivered: 21 May 2012 Summary: Estoppel – by conduct – whether council estopped from denying authority of one of its many employees – authority of one employee to tell the world that his subordinate had authority to bind council – employees lowly ranked in overall structure of council – no evidence of trappings of positions held – impression gained by third party on seniority of employees during visits to council premises not one created by employees’ appointments – no liability attaching to council. _______________________________________________________________________ ORDER _____________________________________________________________________ On appeal from: South Gauteng High Court, Johannesburg (Blieden J sitting as court of first instance). 1 The appeal succeeds with costs, including the costs of two counsel. 2 Paragraphs a, b and c of the order of the court below are set aside and replaced with the following: ‘The plaintiffs’ claims against the first defendant are dismissed with costs, including the costs of two counsel.’ _______________________________________________________________________ JUDGMENT _____________________________________________________________________ MPATI P (CLOETE, SNYDERS and BOSIELO JJA, and NDITA AJA CONCURRING): [1] The third respondent, Mr Johannes Du Plessis (Du Plessis) was, at all times relevant to the issues in this matter, employed by the appellant as a superintendent in its security services department. On 30 October 1998 he signed an agreement, purportedly on behalf of the appellant, in terms of which the appellant would rent from the first respondent – which formerly traded as Compufin Finance – a Sharp photocopying machine at a monthly rental of R12 009.90 over a period of 60 months.1 (For convenience I shall refer to the first respondent as ‘Compufin’.) Two further rental agreements were signed by Du Plessis, purportedly on behalf of the appellant, in terms of which the latter would rent, from Compufin, radio phones and radio stations, respectively, at a rental of R77 520 per month in respect of each agreement over a period of 60 months.2 The equipment was delivered to the appellant’s security services section, but on 19 March 1999 and in circumstances which shall become apparent later in this judgment, the 1 The agreement was signed on behalf of Compufin Finance on 2 December 1998. appellant’s Strategic Executive: Corporate Services, Mr Rudolph Bosman (Bosman), wrote a letter to Compufin advising that the appellant ‘was unaware of [the three agreements]’;3 that it had at no stage authorised the relevant transactions and that they were accordingly null and void. Bosman also demanded payment of the total amount of R232 560, which appeared to him to represent three payments of R77 520 each made by the appellant ‘via bank debit orders on 15 February 1999, 22 February 1999 and 15 March 1999 respectively . . .’. [2] Compufin and the second respondent, First National Bank, to whom Compufin had ceded all its rights, title and interest in the third agreement, subsequently issued summons against the appellant and Du Plessis as first and second defendants respectively, claiming payment, from the appellant, of the sums of R971 703.96 and R6 272 032.80 to Compufin in respect of the first and second agreements4, and R6 272 032.80 to the second respondent in respect of the third agreement as damages for breach of contract. In the alternative and in the event that Du Plessis did not have the requisite authority to sign the agreements on behalf of the appellant, Compufin claimed from the appellant and Du Plessis, jointly and severally, payment of the sum of R6 861 816.29 as delictual damages suffered by it as a result of Du Plessis falsely representing that he had such authority. Du Plessis’s false representation, so it was alleged in the particulars of claim, was intended to, and did in fact induce Compufin ‘to pay the price of the equipment to the supplier thereof so as to supply the equipment to the [appellant’s] employees and officials’. [3] In its plea the appellant denied liability and specifically denied that Du Plessis was authorised by it to sign the rental agreements. To this the respondents replicated and pleaded, in the alternative, that the appellant had represented that Du Plessis had authority and that it was therefore estopped from denying his authority. On the other hand, Du Plessis denied, in his plea, that he did not have the necessary authority to conclude 2 The two agreements were signed on behalf of Compufin on 21 January 1999. 3 The latter refers to ‘four purported agreements’, which is an obvious error. 4 The agreement in respect of the radio phones is referred to as the second agreement and the one in the first and second agreements and pleaded that he did have the authority to do so. It appears from the judgment of the court a quo (Blieden J), however, that after all the evidence was led and after each of the parties had closed their cases, it was conceded on behalf of the respondents that Du Plessis lacked actual authority to conclude the rental agreements. At the stage of argument before Blieden J, therefore, and indeed in this court, the only issue to be decided was whether the appellant had created the impression that Du Plessis was authorised to conclude the agreements on its behalf, thus clothing him with ostensible authority. [4] Having found that Compufin’s witnesses had ‘made it clear that as far as they were concerned they were not relying on any representation made by Du Plessis, but on a proper and acceptable resolution confirming Du Plessis’s authority to sign the three contracts on behalf of the [appellant]’, Blieden J concluded that Compufin ‘cannot succeed in a [delictual] claim for damages against Du Plessis. . . ’. He accordingly dismissed Compufin’s claim against Du Plessis with costs, but granted the contractual claims against the appellant (albeit in slightly lesser amounts) with interest and costs on the scale as between attorney and client (as provided for in the contracts), including costs of two counsel. It is the order made in favour of the respondents against the appellant that is the subject of this appeal, which is before us with leave of the court below. [5] It would be convenient, at this stage, to set out some facts, which appear to be common cause or undisputed. Corporate services, of which Bosman was the Strategic Executive, is one of seven clusters within the appellant. Within corporate services there are seven sub-clusters, one of which is security services. Each of the sub-clusters is headed by an Executive Officer. Mr Billy Mosiane (Mosiane) was the security sub-cluster’s Executive Officer. At a level below him were the positions of two managers, one for operations and the other for strategic services. Yet a level below the managers was the position of senior superintendent, which was occupied by a Mr Wimpie van Wyk (Van Wyk). Du Plessis’s position of superintendent was a level below Van Wyk and the latter respect of the radio stations as the third agreement. was his immediate superior. A superintendent was one level above the lowest rank in the security sub-cluster, namely that of a security guard and law enforcement officer. Mosiane, Van Wyk and Du Plessis were, according to Bosman, housed in a building known as the Metro Building, separate and diagonally across the street from the appellant’s main offices. [6] Du Plessis testified that during 1998 (he could not remember the date) he met two ladies, Ms Ilse Krause (Krause) and Ms Karen Willemse (Willemse), who sought from him directions to the office of the Strategic Executive: Finance. After he had directed them and since they had introduced themselves to him as ‘salespersons of office equipment’ he requested from them a business card. He was interested in procuring a photocopy machine (photocopier) for the security department, because they had had to make copies of documents containing private and confidential information at other departments. This, according to him, posed a security risk. The following day he telephoned Krause and requested an interview with her. She obliged and after the interview she introduced him to Mr Jeff Rahme (Rahme) of Jeff Rahme Consultancy. It is not in dispute that Rahme was an approved broker who discounted various agreements to Compufin and that Krause and Willimse were the owners of a company known as Africon. (I shall henceforth refer to them collectively as the Africon owners.) There was an understanding between Compufin, Rahme and the Africon owners that when Africon had a sale agreement for which they required financing, the sale would be processed through Jeff Rahme Consultancy for discounting with Compufin. This was because Africon was not an approved broker with Compufin, although the Africon owners were, according to Mr Deon Blighnaut (Blighnaut), the advances manager at Compufin at the relevant time, well-known to Mr Anthony McLintock (McLintock) who was Compufin’s managing director. [7] Du Plessis testified further that after he had been shown a brochure, by Rahme, of Sharp photocopiers with all the necessary accessories he introduced the Africon owners to his superiors, Van Wyk and Mosiane. He said that the Africon owners ‘requested that we enter into an agreement with African Bank that would enable us to get the mentioned photocopier’. Van Wyk instructed him, so he testified, to purchase the photocopier after he had told the Africon owners that he (Van Wyk) and Mosiane would not be available as they were to attend a security conference for a certain period.5 Van Wyk ‘signed a resolution which gave [him] signing powers with [the Africon owners]’. A few days after he had signed the agreement for the rental, the photocopier was delivered by Rahme in the presence of both Van Wyk and Mosiane. The photocopier was installed in his office so as to avoid it being abused. This was on the instructions of Van Wyk. [8] During the installation of the photocopier and having seen a radio supplier’s business card on Du Plessis’s desk, Rahme asked him if he was looking for a radio system. His response was that the security department wanted to upgrade their current security system. Rahme responded that he was selling a brand new system which comprised radio communication, cellular phone accessibility and a tracking unit. By then Du Plessis knew, having been told this by Mosiane, that the life of one of the appellant’s councillors had been threatened and that the councillor concerned had requested protection from the security department. He saw this as an opportunity and later contacted Rahme and requested him ‘to get the necessary documentation and authorisation in place in order for him to supply me with the radio phones’. After he had signed the necessary documents the radio phones were delivered to the appellant’s premises. He ordered a Mr Frikkie Strauss, who worked in the stores, to issue the radios ‘to all the security personnel’. A while later Mosiane telephoned him and summoned him to the office of one of the councillors, Councillor Nathan Jacobs (Councillor Jacobs), with a radio phone. There Mosiane ordered him to issue the radio phone to Councillor Jacobs. [9] The three rental agreements signed by Du Plessis contained a debit order authorisation which he also signed. The signed debit order authorised monthly payments to be made from the appellant’s bank account with Trust Bank in respect of each of the 5 During his testimony Mosiane confirmed that he and Van Wyk attended a security conference over the period 26 to 30 October 1998. three agreements to Compufin or its cessionary. It is common cause that a total amount of R60 049.42, including VAT, was paid in respect of the first agreement and R232 560 in respect of the second agreement. However, the amount of R232 560, including VAT was subsequently reversed and credited to the appellant’s bank account. [10] Du Plessis’s purchasing spree came to an end in about February 1999 when he sought to make further purchases totalling R10.5 million. It appears from the evidence of Mr Alexander Maclean (Maclean), head of the vendor finance division of Wesbank at the time of these transactions, that the radio phones and radio stations delivered to the appellant’s security clusters as mentioned above did not comprise the complete package. Wesbank were approached by Compufin to finance the balance of the package, ie the entire security system to the value of R10.5 million. In a facsimile letter dated 15 February 1999 addressed to the appellant for the attention of Mr C Lehmkuhl (Lehmkuhl), who was a manager in the finance cluster, Maclean wrote: ‘… The Rental Agreement [for 30 base stations and 300 radios] has been signed by Mr. J Du Plessis under authority of a resolution signed by Mr. W van Wyk (Head Manager: Services). In order that we may satisfy ourselves that these gentlemen are authorised to transact on behalf of the Council we understand that the only department that would be in a position to authorise expenditure of this nature is the finance department. This information has been given to us by Mr. Basie Lombard of the Greater Johannesburg Metro Council … who has suggested that we need to get the following information directly from the head of the Finance Department at you Randburg offices: * Written authority whereby the Council has agreed to the renting of such equipment. I understand that this would have been a part of the budget for the security services department. * Confirmation from the Finance Department that Mr. van Wyk has the necessary authority to authorise Mr. Du Plessis to sign rental agreements. . . .’ After certain correspondence had passed between Maclean and Rahme, who desperately tried to convince the former that all was in order, a meeting was held on 18 March 1999 at the appellant’s premises, where the Africon owners , Rahme, Bosman, two internal auditors of the appellant and representatives of Wesbank (including Maclean) and Compufin were present. It was at that meeting that Bosman advised all present that neither Van Wyk nor Du Plessis had been authorised to sign the agreements on behalf of the appellant. Following the meeting Bosman wrote the letter of 19 March 1999 referred to in para 1 above, in which the addressees were advised that the three agreements were null and void. [11] At the meeting just referred to above Blighnaut and Mr Christo Olivier, an employee in the internal audit section of the appellant, were appointed to investigate and establish, jointly, the true position relating to the transactions. Those present at the meeting were also informed that Du Plessis had been suspended because he had had no authority to bind the appellant and to conclude the agreements on its behalf. A disciplinary enquiry was subsequently held, chaired by Bosman, at which Du Plessis was charged with misconduct, it being alleged that he, inter alia, had conducted himself in a disgraceful, unbecoming or dishonest manner prejudicial to the good and proper working of the appellant’s service. He was found guilty and the disciplinary committee recommended his dismissal. [12] It is common cause that the resolution which purportedly authorised Du Plessis to conclude the rental agreements on behalf of the appellant was signed by Van Wyk on an official letterhead of the appellant. It was signed, on the face of it, on 26 November 1998. The resolution purports to be an extract from a meeting of the appellant held at Randburg on 26 November 1998. Its relevant portion reads: ‘RESOLVED: “That the Hirer enters into a Rental Agreement with Compufin Finance (Pty) Ltd for the renting of the device as specified in the Transaction Schedule and any further Transaction Schedule(s) upon such terms and conditions as are usually applicable to Rental Agreements and as may be agreed upon.” That Mr. J du Plessis in his capacity as Manager of the Hirer be and is hereby authorised to sign, endorse and execute all documents for and on behalf of the Hirer to give effect to this resolution.’ Beneath the resolution and to the right of the page appears Van Wyk’s signature, below which are his full names: Willem van Wyk, and the capacity in which he appended his signature, viz ‘HEAD OF SECURITY’. To the left of Van Wyk’s signature is the date 26 November 1998, written in manuscript and beneath it is an imprint of the appellant’s official date stamp. [13] During his cross-examination Du Plessis testified that he never saw Van Wyk sign the resolution, nor did he see him give it (the document containing the resolution) to the Africon owners, although he knew that ‘[t]hey needed a document to say that I had signing power . . .’. He knew that at one stage they went to see Van Wyk without him. (He had taken them to him on a previous occasion.) But since he was giving evidence eleven years after the event he said he was unable to remember the date on which the Africon owners went to see Van Wyk – it could have been 26 November 1998. The Africon owners subsequently brought to him the documents relating to the first agreement, which he signed. [14] The process followed by Compufin upon receiving a proposal for financing from a broker was set out by McLintock, who testified that he was involved in the second and third agreements, as follows: ‘What would then happen, this would then go to our credit department who would then forward that information to the various financial institutions who[m] [we] had facilities with. After . . . examining who it was for, they would then come back to us and request certain information before they would be able to approve the deal. They would talk about a resolution, probably talk balance sheet, insurance information, a copy of a cancelled cheque, a debit order, various aspects that the banks would ask for. So our credit control committee would then evaluate the information. This would then be sent to the banks, who would then in turn evaluate the information they requested. Thereupon, if they are happy with all the information, they would then approve the deal and send us a deal approved.’ Compufin would then consult with the supplier, who would receive payment after the equipment had been delivered. When asked what authority was required as part of the standard procedure McLintock said: ‘Well, depending upon the clients, a resolution would be required, copies of minutes of meetings would be required, in other words where the topics of discussion were actually discussed in the meetings. But a resolution confirming that the person signing the agreement had the capacity to contract. This would have to be on an original document.’ [15] The extent of McLintock’s involvement in the second and third agreements was to attend a meeting at the appellant’s premises. He testified that at the meeting the appellant was represented by four people, to whom he referred as ‘delegates from the council’. These were Du Plessis, Van Wyk and ‘two African gentlemen’ whose names he could not remember. He later said he thought one of them was Mosiane. The objective of the meeting ‘was to discuss exactly what they were doing regarding the two-way radios’. According to him the appellant’s employees ‘came up with a very good cost justification and the reasons why [the appellant] required these radios, we then obviously put a process into action to finance the specific deals and discount the deals with various financial institutions’. [16] Mr Eric Lundberg (Lundberg), who had been employed at Compufin as advances manager, but later moved to head the credit committee at African Bank, also testified to a meeting he had with either Van Wyk or Du Plessis at their office at the appellant’s premises. He had gone to that meeting with McLintock ‘to go and obtain the financial information that we needed and also to form my own personal thing to verify that there was in fact a deal in the offing’. He said his involvement ‘was purely to obtain credit information so that a submission could be made’. At the meeting he was handed a balance sheet reflecting the financial details of the appellant’s security department. [17] Blighnaut signed the third agreement on behalf of Compufin. He testified, however, that he would have been involved in organising the financing of the other two agreements approved. The approval for each was given by African Bank and Wesbank, a division of the second respondent. He said he had satisfied himself that the requirements in respect of all three agreements were met for further transmission to the banks. Blighnaut said he was the person at Compufin who had to be satisfied that the requirements were met, including a proper resolution. When asked during his evidence-in-chief whether he would have approved the second and third agreements without a separate resolution he answered in the affirmative ‘because we have got a resolution on the first agreement that was done in November with Mr Du Plessis’s signature and confirming that he can do a specific and any future transactions for the security division’. He thus relied on the original document signed by Van Wyk and dated 26 November 1998. It will be recalled that the second and third agreements were concluded in January 1999. [18] Importantly, Blighnaut testified that in respect of all three transactions he received all documentation from Willemse and Rahme and the resolution from Rahme. He was never given any documents by any of the appellant’s officials. He also agreed that the persons who signed the documents as witnesses for the appellant’s signatory were the Africon owners. He met Du Plessis when the latter called at Compufin to sign the debit orders for the second and third transactions. [19] Ms Susan Hall (Hall), who was at the relevant time an assistant advances manager with Compufin, signed the second agreement on behalf of Compufin. Her duties were to ensure that everything that was required for approval of a deal by the discounting bank or financial institution was in order. Hall testified that she would not have signed the agreement if she had not been satisfied with the required resolution authorising Du Plessis as signatory for the appellant. She said the resolution was on an original letterhead and there was no reason for her ‘to question that it was not legal’. It contained the standard wording used in the industry and the banking environment and at Compufin. There was therefore no reason for her to be suspicious. [20] Another witness for the respondents, Ms Alet McTaggart, did not take the matter any further. She was an administrator with Compufin and her function was to check if all the documentation was in order, including a resolution authorising a signatory to a contract. Once she had done that the documentation would be passed on to Compufin’s signatory. She also testified that she appended her signature on the first agreement as a witness to the signature of a Mr Pete Hopwood (Hopwood), who signed the agreement on behalf of Compufin. Hopwood, however, was not called as a witness. [21] Besides Bosman, six more witnesses testified for the appellant, namely Ms Maria Renney (Renney) who was the appellant’s committee officer, Mr Alwyn Nortjé (Nortjé), a legal advisor, Mr Patrick Lephunya (Lephunya), the acting Chief Executive Officer, Ms Rashida Albertus, Mosiane and Councillor Jacobs. (I shall refer to the evidence of these other witnesses only when it is necessary to do so.) As was observed by the court a quo, Bosman was the most important witness. He testified that the appellant was governed in terms of legislative enactments which determined how the appellant’s affairs had to be conducted. The full Council, which comprised elected Councillors, was the appellant’s highest decision making body. Immediately below the Council was the Executive Committee, which was also a decision making body in the absence of a Council meeting. The Executive Committee appointed a number of portfolio committees. The administration was headed by the acting Chief Executive Officer, Lephunya, and below him were the clusters and sub-clusters referred to above. [22] According to Bosman none of the appellant’s officials had the power, in their individual capacities, to bind it without specific authorisation. The full Council, at its meetings, was the only body that could authorise expenditure. In cases of lesser expenditure the Executive Committee, a body appointed by the full Council, could give the authorisation. Where individual officials sought to bind the appellant a member of the public could telephone the legal department for verification of the official’s authority to act on behalf of the appellant. [23] In the respondents’ heads of argument the question was posed whether Van Wyk had actual authority, or ostensible authority, to indicate to outsiders the contents of resolutions of the appellant. Before us counsel for the respondents submitted that Van Wyk had actual authority to pass information regarding persons with authority to sign documents on behalf of, and to bind, the appellant. [24] Actual authority may be express or implied. In Hely-Hutchinson v Brayhead Ltd & another6 (referred to with approval in NBS Bank Ltd v Cape Produce Co (Pty) Ltd & other)7 Lord Denning MR expressed himself thus: ‘[Actual authority] is express when it is given by express words, such as when a board of directors pass a resolution which authorises two of their number to sign cheques. It is implied when it is inferred from the conduct of the parties and the circumstances of the case, such as when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office. Actual authority, express or implied, is binding as between the company and the agent, and also as between the company and others, whether they are within the company or outside it.’ In support of his contention that Van Wyk had actual authority counsel for the respondents referred to the evidence of Nortjé, who was employed by the appellant as a legal advisor. Nortjé agreed during cross-examination that there was no sign on Du Plessis’s office door, or on Mosiane’s, to alert a member of the public to Du Plessis’s lack of authority to bind the appellant. He testified, however, that an official who would be approached by a member of the public ‘certainly has a duty of care to inform the visitor . . . that he does not have that authority’. When asked whether the appellant relied on its own officials to warn 6 Hely-Hutchinson v Brayhead Ltd & another [1968] 1 QB 549 (CA); [1967] 3 All ER 98. 7 NBS Bank Ltd v Cape Produce Co (Pty) Ltd & others 2002 (1) SA 396 (SCA) ([2002] 2 All SA 262) para 24. the public on the limitation of their authority Nortjé responded: ‘Yes but I must say [the] public most certainly also know that the council operates under delegation of powers, I mean everybody knows that.’ He said that an ordinary businessman who wanted to conclude an ordinary photocopier deal ‘would rely heavily on that official that he is dealing with and that official has a duty of care to explain exactly the inner workings of the council and not sign agreements well knowing that he does not have authority’. [25] Counsel also referred to the testimony of Renney who also agreed that a member of the public dealing with a particular cluster or sub-cluster ‘could expect to ask a senior person in the cluster as regards whether there had been a resolution or not and [that] he [the member of the public] would expect that [senior] person to answer’ and that the member of the public would trust that answer. Reference was also made to the evidence of Bosman, who said the channel of communication about what had been decided higher up in the appellant’s structures would be vested in senior officials of the security sub-cluster who would be expected to tell members of the public as to whether or not they had authority. [26] What does emerge from the evidence referred to is, in my view, that an official of the appellant had a duty, when the issue of authority came up, to tell the truth to members of the public as to who had authority to bind the appellant. Non constat, however, that a failure to tell the truth or the deliberate forgery of a document containing an untruth would render the appellant liable were a member of the public to contract on the basis of the truth of what was conveyed by the official. As to Van Wyk, there was no evidence to the effect that the signing of documents containing resolutions and extracts from the appellant’s Council meetings fell within the scope of the position to which he had been appointed, viz senior superintendent, nor of the position of acting manager, which Du Plessis suggested he held at the relevant time. It follows that it was never established as a fact that Van Wyk had actual authority to tell the world, by signing the document concerned, that Du Plessis had authority to bind the appellant. [27] As I have alluded to above, the only issue the court a quo had to determine, which is also the issue in this appeal, was whether the respondents proved their case against the appellant based on the ostensible authority of Du Plessis and Van Wyk. In Hely- Hutchinson Lord Denning MR said this on the subject: ‘Ostensible or apparent authority is the authority of an agent as it appears to others. It often coincides with actual authority. Thus, when the board appoint one of their number to be managing director, they invest him not only with implied authority, but also with ostensible authority to do all such things as fall within the usual scope of that office. Other people who see him acting as managing director are entitled to assume that he has the usual authority of a managing director. But sometimes ostensible authority exceeds actual authority. For instance, when the board appoint the managing director, they may expressly limit his authority by saying he is not to order goods worth more than £500 without the sanction of the board. In that case his actual authority is subject to the £500 limitation, but his ostensible authority includes all the usual authority of a managing director. The company is bound by his ostensible authority in his dealings with those who do not know of the limitation.’ Thus, where a principal (representor) has created an impression in another’s mind – though such impression might be wrong – that his or her agent (employee) has the requisite authority to transact on his or her behalf he or she will be held liable under that transaction.8 [28] In order to hold the appellant liable on the basis of ostensible authority the respondents had to prove the following: (a) A representation by words or conduct. (b) Made by the appellant and not merely by Du Plessis and/or Van Wyk that they had authority to act as they did. 8 Cf NBS Bank, fn 7 above, para 25. (c) A representation in a form such that the appellant should reasonably have expected that outsiders would act on the strength of it. (d) Reliance by the respondents on the representation. (e) The reasonableness of such reliance. (f) Consequent prejudice to the respondents.9 [29] With reference to the first two requirements Nienaber JA said the following in Glofinco v Absa Bank Ltd t/a United Bank:10 ‘A representation, it was emphasised in both the NBS cases supra, must be rested in the words or conduct of the principal himself and not only merely in that of his agent (NBS Ltd v Cape Produce Co (Pty) Ltd (supra at 411H-I)). Assurances by an agent as to the existence or extent of his authority are therefore of no consequence when it comes to the representation of the principal inducing a third party to act to his detriment.’11 It is common cause that the document containing the resolution was fraudulent: no such resolution was passed by the appellant’s Council on 26 November 1998, nor on any other day. Secondly, the alleged capacity in which Van Wyk signed the document was false; he never held the position of Head of Security. But these representations by Van Wyk, that is that the appellant’s Council had passed the resolution; that he held the position of Head of Security and that he had authority to tell the world as to who had authority to sign contracts on behalf of the appellant, are not the issue. Neither is Du Plessis’s representation that he had signing powers. The issue is whether the appellant made any representation, by word or conduct, which induced the respondents to act to their detriment by concluding the agreements with Du Plessis. I proceed to deal with that issue. [30] There is no evidence that any official in the security sub-cluster of the appellant had 9 See NBS Bank Ltd fn 7 above, para 26. 10 Glofinco v Absa Bank Ltd t/a United Bank 2002 (6) SA 470 (SCA). 11 Para 13. authority to bind the appellant to any extent, other than, possibly, making small purchases for daily necessities. Indeed, the uncontested evidence of Bosman on this aspect is to the contrary. The question whether the transactions on which the respondents rely can be said to fall within the parameters of ordinary security sub-cluster activities or procurement transactions12 does not arise. As was said in Glofinco, no representation is made if the representee is aware that the transaction he is engaging in is not of the kind a particular official will ordinarily transact with an outsider.13 When invited to clarify as to what the alleged representation relied upon was, counsel for the respondents listed four factors, namely (a) the resolution; (b) two face-to-face meetings at the appellant’s offices which certain representatives of one or both respondents had with what counsel referred to as ‘very senior officials’ of the appellant who were clothed with authority; (c) that Lephunya, the appellant’s acting Chief Executive Officer, had been party to negotiations and thus, being aware of the negotiations, there was representation by silence; and (d) a number of factors mentioned by Blieden J in paragraph 81 of his judgment, with which counsel agreed. [31] All the respondents’ witnesses who handled the documentation relating to the three transactions were clear in their testimony that they were moved to perform whatever function they had to perform regarding the transactions once they had satisfied themselves that a proper resolution was in place authorising the signatory to bind the appellant. Although it is not clear from the evidence who signed the first agreement on behalf of Compufin, Blighnaut said he would have dealt with it and that he would have been satisfied with the resolution. He was the person who had to be satisfied that all the requirements were met, including a proper resolution. He signed the third agreement after he had satisfied himself that the necessary requirements were met. Hall, who signed the second agreement on behalf of Compufin, said she would not have signed the agreement if she had not been satisfied with the resolution authorising Du Plessis as the appellant’s signatory. Clearly, the meetings that were attended by Lundberg and McLintock at the appellant’s premises played no part in their (Blighnaut and Hall’s) decision to sign and 12 Cf Glofinco v Absa Bank, fn 9 above, para 20. 13 Ibid. conclude the agreements between Compufin and the appellant. They are the representatives of Compufin to whom the representation would have been made. Counsel for the respondents submitted that the representation was made to Blighnaut, Hall and Hopwood. [32] As to the meetings that took place at the appellant’s premises McLintock merely wished to satisfy himself not with Du Plessis’s or Van Wyk’s authority but with a cost justification for the radios and the reasons why they were required. Similarly, Lundberg wanted to satisfy himself that the appellant (or security sub-cluster) would be able to pay for the equipment and not to ascertain who had authority to sign documents on behalf of the appellant. Counsel contended that these meetings were with ‘very senior officials’ in the security sub-cluster. Apart from the fact that Du Plessis was only one level above the lowest rank and Van Wyk one level above him in the security sub-cluster, positions that can hardly be categorised as ‘very senior,’14 there is no evidence that anything that came out of the meetings in any way influenced those who signed the agreements on behalf of Compufin. The impression that Lundberg and/or McLintock gained about the seniority of Du Plessis and Van Wyk and any other employee of the appellant who might have been present at the meetings cannot be placed at the door of appellant, who had employed them at almost the lowest ranks in its administration, even in its security sub-cluster. [33] Lephunya’s evidence took the matter no further. The sum total of his involvement was his becoming aware of the security sub-cluster’s desire to procure radio phones when a report on the matter was placed on the agenda of the Executive Committee for approval by it. The report was withdrawn from the agenda by Bosman and Lephunya had nothing further to do with the matter. There is no evidence of his involvement in any representation. There is no evidence that he was aware that Van Wyk and Du Plessis proceeded to transact for the radio phones despite the Executive Committee report having 14 The identity of the other persons who were present at one of the meetings testified to by McLintock is not known. been withdrawn from the agenda. [34] In its judgment the court a quo listed twenty-two factors on which counsel for the respondents relied in his submission to it that the appellant had created a façade of regularity. Some of these factors I have already dealt with, eg the so-called seniority of Van Wyk and Du Plessis; the meetings at the security sub-cluster offices at which Lundberg was given financial statements (obviously to prove that the appellant would be able to afford the procurement) and Lephunya’s involvement in the saga. The last two factors relate to what occurred after the radio phones had been delivered. They were distributed amongst certain officials and Councillors. Dealing with this aspect the court a quo said: ‘As submitted by Plaintiff’s counsel the evidence of what occurred after the conclusion of Agreements A, B and C which, whilst not constituting direct evidence of events that can be relied upon to ground estoppel, since they occurred after the conclusion of the agreements, are nonetheless valuable as a source of inferential reasoning as regards the apparent approval prevailing before the conclusion of [the agreements] . . .’ The court then concluded that had the transactions been without the approval of a large number of the appellant’s employees, and had Du Plessis acted alone as the appellant suggested, ‘it is inconceivable that it would have taken approximately [two] months from the delivery of such a large number of radiophones, for the transaction to be rejected’. [35] I am not sure to what approval the learned judge a quo refers. It is true that the document containing proposals to the Executive Committee that a radio phone system be hired and on which Lephunya’s name appears, tend to indicate that someone – possibly Lephunya and others – was in agreement that radio phones should be acquired. But I fail to see how that apparent approval could, even after the document was withdrawn by Bosman, either by itself or considered with other factors, be said to have created a façade of regularity which gave the impression to Blighnaut and Hall that Van Wyk had authority to tell outsiders that Du Plessis had authority to bind the appellant. There is no evidence that Lephunya had any knowledge of Van Wyk and Du Plessis’s dealings with the Africon owners, or any of Compufin’s or the second respondent’s officials. In my view, the court a quo erred in this regard. [36] In introducing these factors I have just dealt with and others, the court a quo referred to the following extract from the decision of this court in South African Broadcasting Corporation v Coop & others (SABC):15 ‘As in the NBS Bank case (supra) the plaintiff’s case was not limited to the appointment of the various relevant officers who acted on the SABC’s behalf. It included their senior status, the trappings of their appointment, the manner in which they went about their dealings with the plaintiffs, the use of official documents and processes, the apparent approval of subordinate and related organisations, such as the pension fund and medical scheme, the length of time during which the Ludick option was applied, the Board’s own financial accounts and the conduct of CEOs who were Board members. As in the NBS Bank case, the SABC created a façade of regularity and approval and it is in the totality of the appearances that the representations relied on are to be found.’ In both NBS Bank and SABC the court had to deal with senior officials and the usual authority that attached to their positions: in the former, a manager of a branch of NBS Bank and, in the latter case, with successive Chief Executive Officers and Group Heads of Human Resources. [37] In SABC the court below had ordered the South African Broadcasting Corporation (SABC) to reinstate and continue to pay a 60% subsidy of the respondents’ monthly medical scheme contributions and also to reinstate concessionary television licences. The respondents were formerly employed by the SABC and had retired with the benefits on the strength of written assurances to the first person to retire, Mr Ludick (Ludick), by the SABC Group Head of Human Resources (HR), that he could retire or resign with all the benefits. Subsequently the pension fund advisor in the HR office confirmed the benefits relating to the pension fund, ie that Ludick could withdraw the full value of his pension. The Group Chief Executive also confirmed to Ludick in writing that upon his resignation he could 15 South African Broadcasting Corporation v Coop & others 2006 (2) SA 217 (SCA), paras 74 and 75. retain his membership of the medical and group insurance schemes. After Ludick had left the SABC’s employ many other employees left on the same conditions. When it felt the pinch on its finances the SABC sought to renege on the undertakings and disputed the authority of its own Chief Executive Officers and HR. It is in this context that this court observed that the respondents’ cases were not limited to the appointment of the various relevant officers but ‘included their senior status, the trappings of their appointment’, etcetera. [38] In NBS Bank the relevant senior official was a branch manager of NBS Bank, which, the court said, ‘held out its branch managers as its front to the world and its local spokesmen’. In that case the manager had devised a scheme with the help of an attorney in terms of which he would take deposits from clients for which he issued typed letters in return. The deposits would not be entered on the computer as the bank’s rules required, and the money would then be diverted to the account of a firm of attorneys from where advances were made to developers. Four plaintiffs instituted action against NBS Bank for payment of a combined sum of R31.5 million with agreed interest, on the basis that the branch manager had authority, either actual or ostensible, to bind NBS Bank. NBS Bank was ordered by the trial court to pay the monies to the plaintiffs. Certain ancillary orders were also made. NBS Bank had denied liability on the ground, first that the branch manager was acting in his own interest in fraud of the bank and, secondly, that there were internal restrictions on the actual authority of the branch manager. [39] In this regard Schutz JA said on appeal: ‘What emerges from the evidence is not a nude appointment [of the branch manager], but an appointment with all its trappings, set in a context. The context was a bank, whose business was the taking of deposits for a period at interest, and the lending of money on security at a higher rate of interest. It created branches to carry on this business and it appointed managers to manage them. [The branch manager] was appointed the local head of this business at Kempton Park. He commanded the staff, including his secretary, who typed the letters and then deleted them from her computer on his instructions, keeping her qualms to herself, whether out of fear, or loyalty, or both. The letterhead on which the letters were typed was provided by the NBS. The facility was created, and it functioned, for the NBS to take Cape Produce’s cheques into its bank account, and for its cheques to be issued in repayment. The state of affairs continued for some 18 months with numerous repayments, without the NBS’s own system of control detecting the abuse.’ Clearly, then, what this court has considered to be a façade of regularity where ostensible authority is in issue is the appointment of the person who would have purported to act on behalf of an entity sought to be held liable for such act, the position to which the appointment was made ‘with all its trappings, set in a context’. [40] In the present matter Van Wyk and Du Plessis were lowly ranked officials in an elaborate administrative structure where authority below the full Council was exercised in terms of delegation. It is true that Van Wyk and Du Plessis were given offices, but these were not even in the main building – they were in a smaller side-building. There is no evidence that they were provided with secretaries, nor with letterheads or stamps. It is not known where the letterhead on which the so-called resolution was contained came from, so also the stamp whose imprint appears on it. But the fact that the two officials were given offices and might even have had letterheads and stamps does not mean they were clothed with authority to bind the appellant. What matters is their seniority in the overall structure of the appellant and what ordinarily goes with the senior positions they would have held. [41] One of the factors mentioned by the court a quo as contributing to the creation of a façade of regularity is that the appellant provided its employees with original letterheads, which allowed Van Wyk to use an original letterhead when certifying the existence of a non-existent resolution. The court also observed that the appellant provided its employees with official stamps and allowed these to be used for its official documents. That may be so, but surely were an institution like the appellant to provide one of its employees at its receiving department, where letters and parcels are received, with an official stamp so as to indicate the date on which correspondence was received, it could not be held liable, without more, if another employee were to borrow or steal the stamp for nefarious purposes. Similarly, I do not believe that the law would require a manager in a bank to keep letterheads under lock and key and to take out one for his secretary every time he or she wants the secretary to type a letter, so as to avoid unforeseen fraudulent acts by the secretary. And where a secretary uses letterheads in his or her possession to commit fraud and purport to bind the employer it does not follow that the manager or the institution should be held liable. [42] Another factor mentioned by counsel as contributing to the creation of a façade of regularity is that Mosiane drew up Du Plessis’s job description and allowed Van Wyk to sign it on his behalf. The job description, so counsel argued, was drawn up prior to the conclusion of the three agreements and listed, as part of Du Plessis’s functions, ‘Contracts and Tenders’. I am not persuaded that the ‘job description’ document had anything to do with the conclusion of the agreements. There is no evidence that it formed part of the documents that were before Compufin’s officials when the proposals to conclude the agreements were considered. The document only came up when McLean queried the authority of Van Wyk to certify that Du Plessis had signing powers to bind the appellant. McLean testified that it was sent by the Africon owners to Blighnaut on 18 March 1999 in preparation for the meeting that was scheduled for that day at the appellant’s premises and at which Bosman informed everyone that neither Van Wyk, nor Du Plessis, had authority to sign the so-called resolution and the agreements, respectively. [43] Yet another factor referred to by counsel for the respondents is that subsequent to the conclusion of the first agreement and prior to the conclusion of the second and third agreements a payment was made by the appellant via a debit order signed by Du Plessis, which indicated that even the appellant’s bankers accepted Du Plessis’s signing powers. Counsel accordingly submitted that although the bank account was checked regularly by the appellant’s Finance Department at least on a monthly basis the debit was not picked up, ’giving a further appearance of regularity’. Had the debit been picked up timeously it could have prevented the conclusion of the second and third agreements, so the argument continued. To my mind that does not assist the respondents. It is true that the appellant’s Finance Department did not pick up the debit payment timeously, but that fact had no influence whatsoever on any of the officials of Compufin, namely Hall and Blighnaut, who signed the second and third agreements respectively. They made no mention at all in their testimony that the debit payment was one of the factors they considered when deciding to sign the agreements on behalf of Compufin. [44] But most importantly, what is lacking in this matter is evidence of the ‘trappings’ of the positions held by Van Wyk and Du Plessis. Other than a suggestion by McLintock that they appeared to be senior and that the meeting was held in their offices, there is no evidence as to what normally goes with the position of senior superintendent (Van Wyk) and superintendent (Du Plessis). Those were their positions until Mosiane and Van Wyk attended a conference in October 1998, when Du Plessis acted as senior superintendent. Mosiane, Van Wyk and Du Plessis may have been appointed ‘to the top three positions in ranking in the security sub-cluster hierarchy’, as the court a quo found - although I disagree with that finding because there were the vacant positions of two managers between Mosiane and Van Wyk’s position - but in the overall administrative structure of the appellant they ranked very low. There is no evidence that the certification of any official document of the appellant was done by the security sub-cluster, which could have given the impression that Van Wyk had authority to certify a resolution of Council. Nor is there any evidence that the transactions in issue fell within the category of what may be termed the security sub-cluster’s ‘usual business’. Thus, other than the mere appointments and the fact that they occupied offices and might have had access to letterheads and stamps, and the fact that outsiders such as Rahme, Compufin’s representatives and the Africon owners had access to them, sufficient evidence of a façade of regularity was lacking before the court a quo. It follows, in my view, that agency by estoppel (ostensible authority) on the part of the appellant has not been established on the evidence. There was no representation by it. [45] But that is not the only basis upon which the respondents should have failed in the court a quo. In my view, the acceptance, by Compufin’s officials, of the resolution was unreasonable. I have already rejected the submissions that the appellant had created a façade of regularity that could have led any member of the public to believe, reasonably, that Van Wyk had authority to tell the world that Du Plessis had authority to bind the appellant. Although the resolution was contained in a letterhead bearing the name of the appellant, it is introduced as ‘EXTRACT OF MEETING OF THE HIRER’ (my underlining) and not as an extract of a meeting of the Northern Metropolitan Local Council, being the name of the appellant. In the documents constituting the three agreements Compufin is referred to as ‘HIRER’ and the appellant as ‘USER’. The discrepancy of the reference, in the resolution, to the appellant as the hirer would have drawn the attention of business persons whose function it was to satisfy themselves that contracts to be entered into by them or their employers are properly concluded, particularly that all documents relating to those contracts are in order. Blighnaut, Hall and, it must be accepted, Hopwood failed in their duty to scrutinise the resolution, in my view. Indeed, when it was put to him that the resolution did not come from the appellant Blighnaut replied: ‘We do not know we accepted that it did getting it from Jeff Rahme and trusting him.’ And when asked earlier, whether he did not think he should have telephoned someone from the appellant to check that they knew Du Plessis’s authority, he said they had placed their faith in the operations of Rahme. Blighnaut clearly abdicated his duty of ensuring that the resolution was genuine. [46] Moreover, the resolution purported to confer authority on Du Plessis to bind the appellant as and when he wished and to conclude agreements for any amount and in respect of any item which may happen to be recorded on a transaction schedule, such as, for example, the schedules to the rental agreements in issue, with the description of the equipment to be purchased. I do not believe that any reasonable businessman who knows the operations of an entity such as the appellant, relating to decision making (McLintock said Compufin did discounting for a lot of town councils around the country), could ever be satisfied with such an open ended resolution. To do so would, in my view, clearly be unreasonable. [47] Lastly, McLintock testified as follows when asked, during his evidence-in-chief, what proof of authority was required by Compufin as part of standard procedure (when considering a proposal for a rental agreement where someone acted on behalf of a principal): ‘Well depending upon the clients, a resolution would be required, copies of minutes of meetings would be required, in other words where the topics of discussion were actually discussed in the meetings. But a resolution confirming that the person signing the agreement had the capacity to contract. This would have to be on an original document.’ Later, when shown the undated document containing the proposals to purchase radiophones and which was withdrawn by Bosman from the agenda of the Executive Committee of the appellant McLintock identified it as the minutes of the meeting ‘extracted [from] the general minutes of the meeting . . .’. One of the recommendations made in the document was that ‘the rental expense be debited against vote number 280-010-2595 (Guarding, NMLC Property)’. When asked what the significance of the vote numbers was he said: ‘Well that is very important because those numbers would be allocated with regarding the way I understand various councils work because we did a lot of discounting for a lot of the town councils around the country and that was quite a crucial factor with regarding minutes.’ From these extracts it appears that the minutes of a meeting of a town council at which a resolution was passed authorising one of its officials to act on its behalf in concluding agreements was quite important for Compufin. Yet the resolution that authorised Du Plessis to conclude any number of agreements on behalf of the appellant was not accompanied by the minutes, or at least that part of the minutes, that related to it. The undated document shown to McLintock was no such minutes. [48] I can only conclude that Compufin’s officials dealt very casually and superficially with the question of Du Plessis’s authority. Their acceptance of the resolution was not reasonable. [49] In view of my conclusions on the requirements of the alleged representation and the reasonableness of its acceptance, it becomes unnecessary to consider the other requirements necessary for estoppel to arise. But there is one aspect that I should mention in passing. The court a quo admitted in evidence what it referred to as admissions binding on the appellant. The admissions were contained in evidence given at the disciplinary hearings of Du Plessis and another employee, Lehmkuhl, and statements and affidavits made during the investigations in preparation for the disciplinary proceedings. The record of the disciplinary proceedings had been discovered by the appellant and the parties recorded their agreement in their rule 37 minute that the documents ‘may be received in evidence … upon their mere production’, but ‘without any admission as to the truth of what was said’. The statements were made by employees of the appellant and, as I have mentioned above, Bosman presided over the disciplinary proceedings. The basis for the admission of the contents of the statements and evidence was a passage in Lawsa16 where the following appears on the topic of informal admissions generally: ‘Provided the various requirements have been met, admissions are admissible against a party irrespective of whether he elects to give evidence. The hearsay rule does not exclude evidence of an admission. The reason for its admissibility is that whatever a person says to his detriment is likely to be the truth.’ Regrettably the court a quo did not mention any of the requirements, one of which is that the statement containing the admission must have been made to a third party. (See In re SS Winton; Avenue Shipping Co Ltd (in Liquidation) & others v South African Railways and Harbours & another 1938 CPD 247 at 249 – 251.) [50] When confronted with this requirement counsel for the respondents contended that the statements were indeed made to a third party, viz Blighnaut, who was not an employee of the appellant and who was mandated with Bosman to conduct the investigations around Du Plessis’s signing of the agreements on behalf of the appellant. He submitted that all the 16 9 Lawsa First Reissue para 531. documents were made available to Blighnaut, who, together with Bosman, compiled a joint report. But making a statement to a third party and an already made statement being given to a third party are two different things. What the law requires is that the admission, to be admissible in evidence in these circumstances, must have been made by its maker to a third party. There is no evidence that this is what occurred in the present case. In my view, the court a quo erred in admitting the admissions as evidence against the appellant. They were inadmissible. [51] In the result, the appeal must succeed and the following order is made: 1 The appeal succeeds with costs, including the costs of two counsel. 2 Paragraphs a, b and c of the order of the court below are set aside and replaced with the following: ‘The plaintiffs’ claims against the first defendant are dismissed with costs, including the costs of two counsel.’ ___________________ L Mpati President APPEARANCES For the Appellant: A E Franklin SC D L Wood Instructed by: Moodie & Robertson, Johannesburg Claude Reid, Bloemfontein For the First and Second Respondents: G D Harpur SC A Coutsoudis Instructed by: Lynn & Main Inc, Johannesburg McIntyre & Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 21 May 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. NORTHERN METROPOLITAN LOCAL COUNCIL v COMPANY UNIQUE FINANCE The Supreme Court of Appeal today upheld an appeal against an order of the South Gauteng High Court (Blieden J) in terms of which the Northern Metropolitan Local Council (Council) was ordered to pay certain moneys to Company Unique Finance (Compufin) and First National Bank (FNB). The amounts claimed by Compufin and First National Bank allegedly became due and payable when the Council disputed the validity of three contracts said to have been entered into between the Council and Compufin, one of which was ceded by Compufin to FNB. The contracts were signed on the side of the Council, by one of its employees, Mr Du Plessis, who was employed in the security sub-cluster of the Council as a superintendent. Council denied liability to pay Compufin and FNB on the ground that Du Plessis had no authority to bind the Council. In the court below Compufin and FNB asserted that Du Plessis in fact had such authority, relying on a document containing a so-called resolution signed by Du Plessis’s immediate superior. They alleged, however, in the alternative, that Du Plessis was clothed with ostensible authority and that the Council was therefore estopped from denying that he had authority to bind it. In the SCA only the issue of ostensible authority had to be considered, the legal representatives of Compufin and FNB having conceded at the trial before Blieden J that Du Plessis did not have authority to bind the Council. The SCA found that Compufin and FNB failed to prove that by employing Du Plessis to the position he held, a position ranking second lowest in the security sub- cluster, the Council clothed him with ostensible authority. No evidence was led to show that the position held by Du Plessis ordinarily went with authority to sign agreements on behalf of the Council. The SCA accordingly allowed the appeal, set aside the order of the court below and replaced it with one dismissing the claims against the Council with costs.

3493

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 1108/2019 In the matter between: MOREKWA FRANCINAH THOBEJANE FIRST APPELLANT MASEBOTI SIMON PHOLWANE SECOND APPELLANT CEDRICK PHOLOSHI MOGOBA THIRD APPELLANT MOLOHLANYE WILLIAM PHALA FOURTH APPELLANT KGOLANE DAPHNEY THOBEJANE FIFTH APPELLANT and PREMIER OF LIMPOPO PROVINCE FIRST RESPONDENT MEC FOR TRADITIONAL AFFAIRS OF LIMPOPO PROVINCE SECOND RESPONDENT Neutral citation: Thobejane and Others v Premier of the Limpopo Province and Another (Case no 1108/2019) [2020] ZASCA 176 (18 December 2020) Coram: PETSE DP, ZONDI and MAKGOKA JJA and MABINDLA- BOQWANA and POYO-DLWATI AJJA Heard: 23 November 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, and by publication on the Supreme Court of Appeal website and release to SAFLII. The time and date for hand down is deemed to be 10h00 on the 18th day of December 2020. Summary: Civil procedure – court ruling on preliminary point and later reversing its own order – court functus officio and the second order is incompetent and a nullity – jurisdiction of the Supreme Court of Appeal (the SCA) – not triggered where high court had not given judgment or order on the issue sought to be argued on appeal – no discernable reason why leave to appeal was granted to the SCA. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Limpopo High Court, Polokwane (Semenya J sitting as court of first instance): The appeal is upheld with no order as to costs. The order of the high court dated 17 May 2019 is set aside. The matter is remitted to the high court to determine the merits of the review application. __________________________________________________________________ JUDGMENT __________________________________________________________________ Makgoka JA (Petse DP and Zondi JA and Mabindla-Boqwana and Poyo- Dlwati AJJA concurring): [1] This appeal concerns two mutually exclusive orders issued by the same judge in respect of the same issue. The first to fifth appellants had launched an application in the Limpopo High Court, Polokwane (the high court) seeking to review and set aside the decision of the respondents, the Premier of Limpopo (the Premier) and the Member of the Executive Committee for Traditional Affairs, Limpopo (the MEC), not to recognise them as traditional leaders1 of the Tjatje Community (the community) in Limpopo. The appellants sought an order compelling the respondents to do so. In their opposition to the relief sought by the appellants, the respondents 1 The first appellant sought recognition as Khoshigadi (Chieftainess); the second to fourth appellants as headmen, respectively, and the fifth appellant as a headwoman. raised a two-pronged preliminary point of non-joinder. They averred that the appellants had failed to join two parties, whom, according to the respondents, had a direct and substantial interest in the relief sought by the appellants. [2] The first of the parties alleged to have such interest was the Commission on Traditional Leadership Disputes and Claims of the Limpopo Provincial Committee (the Commission), which had investigated the disputes about traditional leadership in the community. The first respondent’s decision not to recognise the appellants as traditional leaders was based on the report of the Commission. The respondents also contended that a structure which was in control of community, the Marota- Mohlaletsi Traditional Council, ought also to have been joined in the proceedings. [3] The application came before Semenya J on 24 April 2019. After hearing arguments on the preliminary point referred to above, the learned Judge made the following ruling: ‘The application before me relates to the [re]view of the decision made by the Premier in this matter, the decision which [he] has exercised or supposed to have been exercised in terms of section 12 of the Act and I agree with the applicant[s] that it was not necessary for the applicant[s] to join the parties that are supposed to… that the respondent[s] says should have been join[ed] in this matter. I do not see how they have a substantial interest in the outcome of this application. The points in limine are therefore dismissed.’ [4] The preliminary point having been dismissed, the parties argued the merits of the review application before the learned Judge, after which she reserved judgment. On 17 May 2019 Semenya J delivered judgment. In paragraph 2 thereof, she revisited the respondents’ preliminary point of non-joinder referred to earlier. Why she did so is, however, nowhere explained in her judgment. The learned Judge took the view that in respect of the Commission, no purpose would be served by considering whether it should be joined as a party to the proceedings as it had since dissolved. She proceeded to consider the averred non-joinder of the traditional council, at the end of which she concluded as follows: ‘The respondents’ second point in limine that the applicants’ failure to join the Marota-Mohlaletsi Traditional Council constitutes a misjoinder2 is upheld.’ The learned Judge accordingly struck the application from the roll with costs, but subsequently, issued an order granting leave to the appellants to appeal to this Court. [5] Before I consider the parties’ submissions in this Court, it is prudent to first determine whether the order of 24 April 2019 dismissing the respondents’ preliminary point of non-joinder, was final in effect. In Zweni v Minister of Law and Order3 it was held that an order that is final in effect has three attributes: first, the decision must be final in effect and not susceptible to alteration by the court that made it; second, it must be definitive of the rights of the parties; and third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings. There are no conceptual difficulties with regard to the first two. As to the third attribute, the question is whether the ‘relief claimed’ is restricted to the relief claimed by the plaintiff/applicant. In Caroluskraal Farms v Eerste Nasionale Bank4 it was held that it includes the relief claimed by the defendant/respondent in the form of special pleas and preliminary points. Therefore, 2 Presumably the learned judge meant ‘non-joinder’. 3 Zweni v Minister of Law and Order [1993] 1 All SA 365 (A); 1993 (1) SA 523 (A) at 536B. Zweni has undergone some modification over the years. See for example Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service 1996 (3) SA 1 (A); Philani-Ma-Afrika and Others v Mailula and Others [2009] ZASCA 115; [2010] 1 All SA 459 (SCA); 2010 (2) SA 573 (SCA); Nova Property Group Holdings Limited v Cobbett and Others [2016] ZASCA 63; [2016] 3 All SA 32 (SCA); 2016 (4) SA 317 (SCA). However, none of these find application in this case. 4 See 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 Nasionale Bank van Suider- Afrika Bpk 1994 (3) SA 407 (A) at 415B-416A; Durban’s Water Wonderland (Pty) Ltd v Botha and Another [1999] 1 All SA 411 (A); 1999 (1) SA 982 (SCA) at 992G-H; Ndlovu v Santam Ltd 2006 (2) SA 239 (SCA) para 9. in the context of the present case, the dismissal of the respondents’ preliminary point thus disposes of a substantial portion of the relief sought.5 [6] Viewed in light of the above, the order of 24 April 2019 in respect of the preliminary point, indubitably had all three of the Zweni attributes. Accordingly, the high court was not competent to revisit it. As explained in Firestone v Genticuro,6 as a general rule, a court has no power to set aside or alter its own final order, as opposed to an interim or interlocutory order, for two reasons. First, once a court has pronounced a final judgment, it becomes functus officio as its authority over the subject matter ceases. The second is the principle of finality of litigation, it being in the public interest that litigation be brought to finality.7 [7] Thus, counsel for the parties agreed that the court a quo’s order of 17 May 2019 constituted a nullity, which falls to be set aside. They parted ways, however, on the further conduct of the matter. On the one hand, counsel for the respondents submitted that the matter should be remitted to the high court for that court to give judgment on the merits of the application. On the other, it was submitted on behalf of the appellants that this Court should itself determine the merits of the review application, as, so went the argument, this Court is in as good a position as the high court to do so. Counsel further submitted that should the merits be decided in the 5 Compare Limpopo Legal Solutions v Vhembe District Municipality and Others [2017] ZACC 30; 2018 (4) BCLR 430 (CC) para 10. 6 Firestone South Africa (Pty) Ltd v Genticuro AG [1977] 4 All SA 600 (A); 1977 (4) SA 298 (A) at 306F-G and 309A. 7 See also Minister of Justice v Ntuli 1997 (2) SACR 19 (CC); 1997 (6) BCLR 677 (CC); 1997 (3) SA 772 (CC) paras 22 and 29; Zondi v MEC, Traditional and Local Government Affairs and Others 2006 (3) BCLR 423 (CC); 2006 (3) 1 (CC) para 28; Freedom Stationery (Pty) Limited and Others v Hassam and Others [2018] ZASCA 170; 2019 (4) SA 459 (SCA) para 16. appellants’ favour, we should substitute the Premier’s decision with our own, in terms of which the appellants are recognised as traditional leaders, instead of remitting the matter to the Premier for reconsideration. [8] The path suggested by the appellants faces two insurmountable obstacles. First, this Court’s jurisdiction to determine the merits has not been triggered. The high court made no findings on the merits, and strictly confined itself to the preliminary point of non-joinder. This is unlike a case where the high court, in its ruling on the preliminary point, had given an indication that it was inclined to dismiss the application. Under those circumstances, it could conceivably be contended that the outcome is a foregone conclusion. [9] That cannot be said to be the case here. The substantive issues in dispute have not been decided by the high court, and consequently, no leave to appeal has been granted in respect of those issues. Differently put, until the high court pronounces on the substantive issues relating to the right of the appellants to be appointed as traditional leaders, and leave is granted to this Court, this Court has no jurisdiction to consider the merits of the review application. Were we to do so, we would impermissibly usurp the function of the high court to ordinarily sit and pronounce as a court of first instance. [10] In Theron v Loubser8 this Court had occasion to consider a similar situation. There, the respondents had raised a preliminary point that the applicants lacked the necessary locus standi to bring the three applications before court. The high court had upheld the respondents’ preliminary point in two of the applications. It 8 Theron NO and Another v Loubser NO and Others, In Re: Theron N.O and Another v Loubser and Others [2013] ZASCA 195; [2014] 1 All SA 460 (SCA); 2014 (3) SA 323 (SCA). dismissed the applications on that ground alone, and deemed it not necessary to consider the merits of the applications. On appeal, this Court reversed the high court’s finding on locus standi but declined to consider the merits of the applications. Instead, it remitted the matter to the high court. With reference to Caroluskraal v Eerste Nasionale Bank this Court reasoned as follows (at para 21): ‘The entire record of the proceedings did not serve before this court on appeal. The record came to be limited by agreement between the parties in the light of the solitary issue that had been decided by the high court and which, in turn, required determination on appeal. But even if the full record had served before us, the high court had declined to enter into a consideration of any of the other issues in the application. This court has thus been deprived of the benefit of the high court’s view on any of those issues. In the result this court will in effect be sitting both as a court of first instance, as also, a court of appeal insofar as those issues are concerned. It follows that the matter has to be remitted to the high court for a determination of each of the two applications which are the subject of this appeal. In the event, it was agreed from the bar in this court that that course should be adopted. For the rest, it will be left to the Judge President of the Western Cape High Court to issue directions to the parties as to the further conduct of the matter in that court.’ The second obstacle is that a substitution order is not to be lightly made, and a court would adopt such a course only in exceptional circumstances. Pursuant to an administrative review under s 6 of the Promotion of Administrative Justice Act 3 of 2000 and once administrative action is set aside, s 8(1) affords courts a wide discretion to grant ‘any order that is just and equitable’. In exceptional circumstances, s 8(1)(c)(ii)(aa) affords a court the discretion to make a substitution order. In Trencon v IDC9 the Constitutional Court explained how an order of substitution should be considered: ‘[G]iven the doctrine of separation of powers, in conducting this enquiry there are certain factors that should inevitably hold greater weight. The first is whether a court is in as good a position as the administrator to make the decision. The second is whether the decision of an administrator is 9 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited and Another [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC) para 47. a foregone conclusion. These two factors must be considered cumulatively. Thereafter, a court should still consider other relevant factors. These may include delay, bias or the incompetence of an administrator. The ultimate consideration is whether a substitution order is just and equitable. This will involve a consideration of fairness to all implicated parties. It is prudent to emphasise that the exceptional circumstances enquiry requires an examination of each matter on a case-by- case basis that accounts for all relevant facts and circumstances.’ [11] In the present case, I am by no means persuaded that we are in as good a position as the Premier to substitute our own decision. From even a cursory reading of the papers, there are a number of issues that would seek further clarification. One springs to mind, and it relates to the position of Mr Nthobeng Thobejane, the community’s current headman, who is said to be mentally challenged, but continues to receive a stipend from the provincial government in that capacity. His position must be clarified, and possibly, he might have to be joined as a party to the proceedings, as the order sought by the appellants appears to have a direct bearing on him. As to the decision of the Premier, there is no suggestion before us that such is a foregone conclusion, or that it is tainted by bias, incompetence or malice. Given these considerations, I discern no exceptional circumstances to move this Court to make a substitution order. [12] The matter must in all circumstances be remitted to the high court to determine the merits of the review application. We were informed during the hearing that the first appellant has since died. This should have no effect on the order for remittal to the high court. If that court determines that she was entitled to be appointed as Kgoshigadi, her natural successor would surely be substituted for her. [13] There remains the issue of costs. Counsel for the appellants pressed for costs against the respondents on the basis that the appellants would have achieved substantial success in this Court were the order of 17 May 2019 to be set aside. On the other hand, counsel for the respondents pointed out that in their notice of appeal and in their heads of argument, the appellants, not only sought to set aside that order, but also urged this Court to consider the merits. Thus, so went the submission, the respondents were duty bound to oppose the appeal to the extent the appellants persisted with the latter relief. In my view, there is something to be said about this submission. Had the appellants simply confined themselves to the attack on the impugned order, and not sought to have the merits determined by this Court, the appeal would probably have been unopposed. In the circumstances it would only be fair to make no order as to costs. [14] Before I conclude, I am constrained to comment on the high court’s decision to grant leave to this Court. That leave to appeal was correctly granted is beyond question. The high court recognised the irregularity of its order of 17 May 2019. But as to why leave was granted to this Court, escapes me. There is nothing in the issues canvassed here which even remotely warrants the attention of this Court. No controversial legal principle was involved. As this Court pointed out in Shoprite Checkers v Bumpers Schwarmas,10 the inappropriate granting of leave to appeal to this court increases the litigants’ costs and results in cases involving greater difficulty and which are truly deserving of the attention of this court having to 10 Shoprite Checkers (Pty) Ltd v Bumpers Schwarmas CC and Others [2003] ZASCA 57; [2003] 3 All SA 123 (SCA) para 23. See also S v Monyane and Others [2006] ZASCA 113; 2008 (1) SACR 543 (SCA) para 28. compete for a place on the court’s roll with a case which is not. This must be deprecated. [15] The following order is made: The appeal is upheld with no order as to costs. The order of the high court dated 17 May 2019 is set aside. The matter is remitted to the high court to determine the merits of the review application. ____________________ T M Makgoka Judge of Appeal APPEARANCES: For Appellants: J L Griffiths Instructed by: Eiser & Kantor, Johannesburg Lovius Block, Bloemfontein. For Respondents: P M Maake Instructed by: State Attorney, Polokwane State Attorney, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 18 December 2020 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Thobejane and Others v Premier of the Limpopo Province and Another (Case no 1108/2019) [2020] ZASCA 176 (18 December 2020). Today, the Supreme Court of Appeal (SCA) upheld an appeal against a judgment of the Limpopo High Court, Polokwane, in which that court issued an order which effectively purported to rescind its earlier order. The first to fifth appellants had launched an application challenging the decision of the respondents, Premier and the Member of the Executive Committee for Traditional Affairs, Limpopo not to recognise them as traditional leaders of the Tjatje Community in Limpopo. The appellants sought an order compelling the respondents to do so. The respondents raised a preliminary point of non-joinder of the Commission on Traditional Leadership Disputes and Claims of the Limpopo Provincial Committee (the Commission), which had investigated the disputes about traditional leadership in the community, and the Marota-Mohlaletsi Traditional Council. On 24 April 2019 the court dismissed the preliminary point, after which the merits of the review application were argued. The court reserved judgment. On 17 May 2019 the court delivered judgment in which it revisited the respondents’ preliminary point of non-joinder, and upheld it. It accordingly struck the application from the roll with costs, but subsequently granting leave to the appellants to appeal to the SCA. The SCA first considered whether the order of 24 April 2019 dismissing the respondents’ preliminary point of non-joinder, was final in effect, and therefore, not susceptible to alteration or amendment by the high court. It referred to Zweni v Minister of Law and Order [1993] 1 All SA 365 (A); 1993 (1) SA 523 (A) at 536B and concluded that indeed the order had all the attributes of a final order and therefore, the high court was not competent to revisit it, as it was functus officio. Viewed in that light, it followed that the order of 17 May 2019 constituted a nullity, which had to be set aside. As to the further conduct of the matter, the court considered the appellants’ submission that it should itself determine the merits of the review application, because, as was the submission, this court was in as good a position as the high court to do so to substitute the premier’s decision with its own, in terms of which the appellants are recognised as traditional leaders, instead of remitting the matter to the Premier for reconsideration. First, the Court declined to consider the merits of the review application because it jurisdiction had not been triggered, as the high court had made no findings on the merits, and strictly confined itself to the preliminary point of non- joinder, and consequently, no leave to appeal had been granted in respect of those issues. Secondly, the Court observed that a substitution order is not to be lightly made, and a court would adopt such a course only in exceptional circumstances in terms of s 8(1)(c)(ii)(aa) of the Promotion of Access to Justice Act 3 of 2000. On the facts of the case, the Court concluded that it was not in as good a position as the Premier to substitute its own decision, and found no exceptional circumstances to do so. Accordingly, it determined that the matter be remitted to the high court to determine the merits of the review application. With regard to costs, the Court considered that the appellants, not only sought to set aside that order, but also urged the SCA to consider the merits. This warranted the respondents’ opposition. Had the appellants simply confined themselves to the attack on the impugned order, and not sought to have the merits determined by this Court, the appeal would probably have been unopposed. In the circumstances it would only be fair to make no order as to costs. In closing, the Court critisised the high court’s decision to grant leave to the SCA, instead to the full court, in the circumstances where there was no discernable reason to do so, as there were no issues of law or any compelling factor which warranted the attention of the SCA. In the circumstances, the Court (per Makgoka JA) with Petse DP, Zondi JA and Mabindla- Boqwana and Poyo-Dlwati AJJA concurring, upheld the appeal with no order as to costs; set aside the order of the high court dated 17 May 2019; and remitted the matter to the high court to determine the merits of the review application. END

1453

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 27/10 In the matter between: COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Appellant and NWK LIMITED Respondent Neutral citation: CSARS v NWK (27/10) [2010] ZASCA 168 (1 December 2010) Coram: HARMS DP, LEWIS, CACHALIA and SHONGWE JJA and BERTELSMANN AJA Heard: 11 NOVEMBER 2010 Delivered 1 December 2010 Summary: Simulated transaction: tests for simulation: taxpayer not entitled to claim deduction in respect of interest paid on amount not actually borrowed. Section 103(1) can be invoked where it is not shown that transaction is simulated. ORDER On appeal from the Tax Court sitting at Johannesburg (per Boruchowitz J and assessors sitting as a court of appeal): 1 The appeal against the order of the Tax Court is upheld with costs including those of two counsel. 2 The order of the Tax Court is replaced with: „(a) The objection to the assessments is dismissed and the additional assessments are upheld. (b) The objection to the imposition of additional tax of 200 per cent is upheld. (c) Additional tax of 100 per cent of the total amount of the additional assessments is imposed in terms of s 76 of the Income Tax Act 58 of 1962.‟ JUDGMENT LEWIS JA (HARMS DP, CACHALIA AND SHONGWE JJA and BERTELSMANN AJA concurring) [1] Over a period of five years, from 1999 to 2003, the respondent, NWK Ltd, claimed deductions from income tax in respect of interest paid on a loan to it by Slab Trading Company (Pty) Ltd (Slab), a subsidiary of First National Bank (FNB), in the sum of R96 415 776. NWK is a public company which formerly operated as a co-operative society trading in maize. The deductions were allowed. But in 2003 the appellant, the Commissioner for the South African Revenue Service, issued new assessments disallowing the deductions and refusing to remit any part of the interest on the amounts assessed. He also imposed additional tax and interest in terms of ss 76 and 89quat of the Income Tax Act 58 of 1962. The amount claimed pursuant to the additional assessments, including additional tax, was R47 360 583. [2] The basis of the revised assessments by the Commissioner was that the loan was not a genuine contract: it was part of a series of transactions entered into between NWK and FNB and its subsidiaries, all designed to disguise the true nature of the transaction between NWK and FNB, with the intention of NWK avoiding or reducing its liability for tax. [3] NWK appealed against the assessments and the imposition of additional interest and penalties. Boruchowitz J and two assessors in the Tax Court held at Johannesburg upheld the appeal. It is against the order of the Tax Court that the Commissioner appeals. The basis of the Commissioner‟s argument on appeal is that the loan was simulated: that it had to be viewed in the light of several other agreements concluded between NWK and FNB, and FNB and its subsidiaries, which together showed that a sum of only R50m was lent by FNB to NWK, and that the transactions were devised to increase the ostensible amount lent so that deductions of interest on a greater amount could be claimed. NWK argued, on the other hand, that there was an honest intention on the part of NWK, represented by Mr E Barnard, its financial director, to execute the contracts in accordance with their tenor, and the claims for deductions were valid. The Tax Court accepted this contention and upheld the appeal to the Tax Court on this basis. [4] The Commissioner contended, in the alternative, both before the Tax Court and this court, that s 103(1) of the Act, in operation at the relevant time, was applicable: the Commissioner was satisfied that the transactions in question had been entered into for the purpose of avoiding tax. The Tax Court held that once the Commissioner had concluded that the transactions were simulated he could not be „satisfied‟ that they been entered into for the purpose of avoiding or reducing liability for tax. Section 103(1) thus had no application. Background to the transactions and their conclusion [5] Before discussing the transactions that the Commissioner sought to impugn it is helpful to look at the events leading to their conclusion. As I have said, the main business of NWK was trading in maize. In 1998, according to Barnard, it had an annual turnover of R1.5b. Its net operating profit was R103m. It had over the years borrowed money from the Land Bank and had banking facilities with a number of commercial banks, including FNB, but had not used the latter. In January of that year, two representatives of FNB, Mr Louw and Mr McGrath visited Barnard and offered a structured finance loan facility to NWK. [6] Neither Louw nor McGrath testified. Indeed no witness from FNB was called by NWK. I shall revert to this briefly, since there was criticism of the Commissioner for not calling any witnesses from FNB. It is of course NWK which bore the onus of proving that the transactions were not simulated, an issue to which I shall also return. The history and context of the impugned transactions emerge from Barnard‟s evidence, the written agreements and from other documents. [7] Barnard questioned aspects of the proposal, in particular the tax implications. FNB sent him an opinion written by senior counsel who had commented on similar transactions. There is nothing to indicate, however, what instructions were given to counsel, and whether the transactions on which he commented were identical or even similar to those proposed to NWK by FNB. And while counsel indicated that his view was that the transactions described were tax-efficient, he did caution, in spite of having been advised that the transactions were normal, that there was always the possibility that the Commissioner might apply s 103(1) to them. The transactions, he suggested, might not be regarded as having bona fide business purposes. [8] On 13 February 1998 Louw and Mr J van Emmenes, also from FNB, wrote an internal memorandum to the General Manager, Group Credit within FNB on the proposal to offer a „structured finance facility‟ of R50m to NWK, „repayable in 5 equal annual capital and interest payments over 5 years‟. The facility would be used, they said, to reduce existing liabilities. They recommended the grant of the facility. Barnard did not see this internal memorandum at the time, but he did confirm when testifying that it correctly reflected what had been discussed. [9] The proposal was made formally in a letter FNB sent to NWK on 28 February 1998, offering to update its existing banking facilities by the addition of a term finance facility of R50m, subject to what it called a term finance agreement. The formal proposal attached was said to be confidential and „proprietary‟ to FNB and required NWK to sign a confidentiality undertaking to preserve FNB‟s trade secrets and highly confidential and sensitive information. [10] A diagram reflected the suite of transactions that would constitute the finance facility. It used indicative amounts rather than the actual sums that would ultimately be paid and repaid. The diagram also appeared to indicate the sequence in which all contracts and performance would occur, though it did not specify that this was so and in fact the transactions were not all concluded entirely as envisaged nor did they follow the apparent sequence. [11] The contracts envisaged were these. (I shall not use the sums referred to in the proposals but rather the actual amounts reflected in the transactions concluded later). (a) A subsidiary of FNB that dealt in financial instruments, Slab, would lend a sum of R96 415 776 to NWK, to be repaid over five years. (b) The capital amount would be repaid by NWK delivering to Slab at the end of the five year period 109 315 tons of maize. (c) Interest would be payable on the capital sum at a fixed rate of 15.41 per cent per annum payable every six months. To this end NWK would issue ten promissory notes with a total value of R74 686 861. (d) To fund the loan Slab would discount the notes (sell them for an amount less than their face value) to FNB. NWK, on due date, would pay FNB. (e) Slab would sell its rights to take delivery of the maize at the end of the five year period to First Derivatives, a division of FNB. This „forward sale‟, for the sum of R45 815 776, would enable FNB to pay the full amount of the loan to NWK. (f) First Derivatives would sell to NWK the right to take delivery of the same quantity of maize for the sum of R46 415 776, payable immediately on the conclusion of the contract, but delivery to take place only five years hence. This contract would neutralize the risks associated with delivery in the future. (g) Slab would cede its rights to a trust company to relieve Slab of the „administrative burden‟ of the transaction. (This transaction did not eventuate.) [12] The proposal indicated that the series of transactions would enable NWK to deduct the interest paid on the capital sum in the year it was payable under s 11(a) of the Act. Barnard submitted the proposal to NWK‟s board of directors for approval which was granted on 30 March 1998. Contracts envisaged in the proposal were signed by Barnard on behalf of NWK on 1 April 1998 and by Slab and FNB on 2 April. I shall, for convenience, refer to the date of the contract as 1 April 1998. The contracts between NWK and FNB and its subsidiary or division The loan [13] The contract provided that Slab would lend R96 415 776 to NWK. „Repayment‟, to take place on 28 February 2003, would be effected by the delivery to Slab of 109 315 tons of „dried white maize intended for human consumption‟. (Although the transaction was, in my view, a sale and not a loan, I shall refer to it for convenience as a loan.) The delivery was to be effected by representatives of the parties meeting in the presence of a notary when appropriate certificates would be signed – a recognized means of constructive delivery in the industry. [14] The parties agreed that Slab would be entitled to cede its right to delivery of the maize or to delegate any of its obligations under the contract, to a company within the FNB group, without the consent of NWK. NWK, on the other hand, was not permitted to cede any right or delegate any obligation, but it undertook to effect delivery to any cessionary. [15] The capital amount of the loan was subject to interest at a fixed rate of 15.27 per cent per annum, compounded monthly in arrear. The interest was payable every six months. In respect of each payment NWK was to (and did) issue promissory notes, the face value of the total being R74 686 861. This is the amount that NWK claimed as a deduction over the five year period in terms of s 11(a) of the Act. The forward purchase agreement: First Derivatives to NWK [16] The second contract concluded on 1 April 1998 was labelled a „forward purchase agreement‟. First Derivatives, a division of FNB, sold to NWK the same quantity of maize (109 315 tons) as was supposed to be delivered in discharge of the loan for R46 415 776. The price was payable in cash on 1 April 1998 and delivery was to be effected on 28 February 2003, the same day on which NWK was to discharge its obligation under the loan. And delivery was to be constructive. The purpose of this transaction was to ensure that NWK would have possession of the requisite quantity of maize when it was required to effect delivery to Slab. NWK in fact paid the sum of R46 415 776 to First Derivatives on 1 April 1998. The forward purchase agreement: Slab to First Derivatives [17] On the same day, Slab sold to First Derivatives the same quantity of maize for R45 815 776. Again, the price was payable on 1 April 1998, and delivery of the maize would be effected, in the same manner, on 28 February 2003. NWK was not party to this contract, but was aware that it would be concluded: a similar transaction (that Slab would sell its claim against NWK to First Derivatives) was an integral part of the proposal by FNB. The cession of the rights in the promissory notes to FNB [18] On 1 April 1998 a fourth transaction was concluded. Slab sold its rights (ceding them) to the promissory notes to FNB for R50 697 518. It will be recalled that the face value of the notes was R74 686 861. The discount was thus substantial. Again, although NWK was not a party to the transaction, it was envisaged in the proposal and Barnard was aware that the cession at a substantially discounted rate would be effected. The June 1998 cessions [19] On 29 June 1998 NWK and Slab ceded their respective rights to the delivery of maize to FNB. Barnard for NWK signed both deeds of cession at FNB‟s request. The NWK right to delivery arose from the forward sale between it and Slab. The Slab right to delivery arose from the loan agreement. In the proposal it was envisaged that Slab would cede its right to the maize to a trust company. Instead FNB was substituted as the cessionary. The Tax Court regarded the cession by NWK to FNB as one in securitatem debiti. [20] In effect each cession cancelled the other. NWK transferred its right to FNB to claim delivery of the maize. And FNB acquired from Slab the right to claim delivery of the same maize from NWK. (The „cancellation‟ of the delivery would have been by the process of confusio: where a right and corresponding obligation inhere in the same person, the obligation ceases to exist.) Slab ceased to be a party to any of the agreements in June 1998. Its participation in the transaction as a whole was ephemeral. The implementation of the contracts [21] The promissory notes issued by NWK in respect of its interest obligations were presented and paid on their due dates. And on 28 February 2003 FNB and NWK representatives met in the presence of a notary in Lichtenberg. FNB delivered negotiable silo certificates to NWK in performance of its obligation to deliver the maize under the NWK forward purchase agreement. The same silo certificates were handed over to FNB in performance of NWK‟s obligation to deliver maize to FNB (as cessionary of Slab‟s right) five minutes later, according to the notary‟s certificate. The reader might well say „What a charade‟. But I shall revert to that. A bank facility afforded by FNB to NWK on 23 February 1998 [22] Before turning to the issues before the Tax Court it should be noted that there was another agreement between FNB and NWK, concluded before the series of transactions concluded in April and June of 1998. On 23 February 1998 Louw and Van Emmenes of FNB wrote to NWK, following discussions with Barnard, and offered two bank facilities: a direct bank facility of R150m and „termynfinansiering‟ in the sum of R50m. The latter was for a period of five years, and was subject to various terms, including that NWK would not borrow from any other financial institution (excluding the Land Bank) over the five-year period without the written consent of FNB. [23] The offer by FNB was accepted by NWK on 1 April 1998, the same day as it signed the other loan agreement for R96 415 776. In an internal memorandum written to the General Manager, Group Credit, by Louw and Van Emmenes, it was pointed out that NWK was interested in a „medium term structured finance proposal‟ and that FNB had been requested to consider a „loan facility of R50m repayable in 5 equal annual capital and interest payments over 5 years‟. This memorandum culminated in the letter of 23 February offering the short term facility of R50m. Claims by NWK for deductions from Income Tax [24] In each of the years of assessment for income tax from 1999 to 2003 NWK claimed and was granted a deduction from income in terms of s 11(a)1 of the Act in respect of the interest paid to FNB. The amount claimed was equal to the face value of the promissory notes paid in the year, which NWK had issued to Slab and which Slab sold to FNB. [25] In June 2003 (and in March 2004 in respect of the 2003 year of assessment) the Commissioner issued additional assessments in terms of s 79 of the Act, disallowing the deductions previously made. He also, in terms of s 76, imposed additional tax of 200 per cent (the maximum permissible) and interest (s 89quat – interest on underpayment). NWK objected to the additional assessments. The Commissioner disallowed the objections, and NWK duly appealed against the respective assessments and the imposition of the additional tax and interest. 1 The section allows the deduction from income of expenditure and losses actually incurred in the production of the income, provided they are not of a capital nature. Grounds of assessment [26] The basis of the additional assessments was the Commissioner‟s view that the agreements concluded between NWK and FNB and its subsidiary Slab did not reflect the substance of the real transaction. Slab, it contended, was interposed as a party solely for the purpose of reducing or evading liability for income tax. The loan by Slab to NWK, although ostensibly of R96 415 776, was in reality one for R50m. And the effect of the forward sales and the cessions was that the same maize that NWK would use to discharge its obligation to repay Slab (the right to performance having been ceded to FNB), was sold by FNB to NWK. [27] The loan, the Commissioner contended, was a „mere paper exercise and/or simulation‟. The reasons for this were that none of Slab, NWK or FNB intended to trade in maize before or after the transactions were entered into. The value of the maize at the time of delivery (in February 2003) was uncertain. The purchase price for the maize was based on a fictitious value and was determined without reference to the value of the maize on the date of conclusion of the contracts. On 1 April 1998 the price of maize quoted on the South African Futures Exchange (SAFEX) was R715 per ton, whereas the price agreed was R419 per ton. The total amount payable for the maize under the forward sale agreement (R45 815 776) was determined by discounting the loan amount of R96 415 776 at the rate of 15.27 per cent per annum – the same rate as that for interest payable on the loan. To this was added the sum of R97 518 which was payable to Slab as a fee for its participation in the series of transactions. [28] Further indiciae of simulation, the Commissioner considered, were that the risks associated with delivery of maize five years after the conclusion of the sales were great: the market is volatile. Yet no account had been taken of volatility, of arrangements for storage after harvest, or the costs of storage or transport. Moreover, the Commissioner asserted, the description of the maize in all the agreements was inadequate. The grade of the maize was not stipulated although it would materially affect its market value. [29] NWK had no intention of repaying its loan with Slab through the delivery of the maize; Slab had no intention of acquiring the maize or selling it, in turn, to FNB; and the cessions from Slab to FNB and of NWK to FNB effectively cancelled the respective obligations. (The Commissioner contended that the respective obligations were extinguished by set-off.) The obligations of NWK and FNB respectively to deliver the identical maize in February 2003 by the issue of silo certificates by a notary were dependent on each other: if one did not perform the other could not. [30] The Commissioner thus considered that the transactions „were specifically designed to conceal the fact that in reality, the actual loan amount advanced‟ to NWK was R50m. The additional amount was simulated with a series of contracts purporting to sell maize which the parties never intended to have any effect. Slab had no real role to play and its participation was „artificially engineered and specifically designed to conceal the fact that the true loan amount was the sum of [R50m]. Slab‟s sole purpose was therefore to facilitate the enhanced deduction claimed by [NWK] in terms of s 11(a) of the Act‟. FNB made an immediate profit of R600 000 when it bought the promissory notes for R50 697 518 from Slab. Furthermore, FNB, in receiving the sum of R74 686 861 (the face value of the promissory notes), in effect was paid interest on the real loan of R50m. [31] Thus having regard to the „substance and reality of the transaction‟ the face value of the promissory notes was determined by combining the capital value of the loan (R50m) with interest over the period of the loan of R23 989 343. The total of these two amounts, plus the fee of R697 518, was equal to the face value of the promissory notes. [32] The Commissioner considered that the actual transaction that was contemplated by FNB and NWK was a loan for R50m: the promissory notes covered both the capital and interest. Thus the portion of the notes that constituted repayment of capital was not deductible as interest in terms of s 11(a) of the Act and was also not expended in the course of trade. [33] In the alternative the Commissioner contended that the series of transactions constituted a „transaction, operation or scheme‟ in terms of s 103(1) of the Act that had the effect of avoiding or reducing NWK‟s liability for tax in the 1999 to 2003 years of assessment and that the transactions were abnormal and were entered into solely or mainly for the purpose of obtaining a tax benefit. [34] The Commissioner imposed additional tax and interest, as I have said. The grounds for this were that NWK represented in its tax returns in question that the payment of the promissory notes was in respect of interest when in fact it was also in respect of capital. In so doing, NWK also represented that the transactions were normal commercial transactions, in terms of which there would be deliveries of maize, when in reality no delivery was ever intended. The deliberate attempt to disguise the true nature of the transactions warranted the imposition of the additional tax, he contended. The grounds of appeal [35] NWK alleged in its grounds of appeal that the contracts concluded between Slab, NWK and FNB were performed in accordance with their terms: NWK received the amount of R96 415 776 in terms of the loan agreement, and delivered the promissory notes to Slab. NWK paid the price of the maize – R46 415 776 – to First Derivatives in terms of the forward sale agreement. NWK was not party to the agreements between Slab and FNB. The terms of the loan reflected the intention of NWK and were implemented and performed in accordance with their tenor. And there was no tacit understanding or unexpressed agreement on the part of NWK that was not recorded in the contracts to which it was party. [36] NWK contended thus that the loan for the full capital amount was correctly reflected and no portion of the payment made by it was of a capital nature. In so far as s 103(1) of the Act was concerned, NWK denied that the contracts had the effect of avoiding or postponing liability for tax: they were concluded solely or mainly for the purpose of securing loan finance. NWK also contended that its tax returns over the years of assessment contained full and accurate information and that it was not liable for the additional tax nor for the additional interest. The decision of the Tax Court [37] The Tax Court found that NWK had acted in terms of the agreements. It accepted that Barnard, representing NWK, had genuinely intended to act in accordance with the terms of the loan agreement and although aware of the agreements between Slab and FNB, was not a party to them. The Tax Court held that Barnard was a credible and satisfactory witness. I shall deal with his evaluation after considering some of the evidence. It is important to note that the Commissioner‟s case in the Tax Court was that the simulation of the transactions was deliberate. There was no contention that the parties had genuinely believed that the transactions were bona fide and would be performed in accordance with their terms. It was argued in that court that NWK and FNB were acting deliberately to conceal the true nature of the transaction. Onus of proof [38] In this court the Commissioner maintained his stance that NWK, represented by Barnard, had concluded the loan agreement and the forward sales and cessions to which it was party, knowing that they were simulated transactions, and in order to gain a tax advantage rather than really to borrow the sum of R96 415 776. In terms of s 82(b) of the Act NWK bore the onus of proving that the transactions were not simulated.2 NWK argued that the agreements themselves provided prima facie proof of the true transaction between the parties. Accordingly, the burden rested on the Commissioner to rebut the prima facie inference. [39] The Commissioner, on the other hand, contended that the agreements had to be viewed in context and having regard to all other evidence, and that NWK had not discharged the onus of proving that the loan was not simulated. 2 The section provides that the burden of proof that any amount is subject to any deduction is upon the person claiming the deduction: in any appeal against a decision of the Commissioner „the decision shall not be reversed or altered unless it is shown by the appellant that the decision is wrong‟. The mere production of the agreements was not enough to discharge the onus. NWK had to refute the assessment that it had a dishonest intention to disguise a transaction. And the substance of the loan agreement, viewed in the light of other transactions and negotiations preceding it, was such that NWK had to prove that it genuinely intended to borrow R96 415 776 from Slab, and to repay it by delivering maize five years after the money had been lent. [40] This court has previously held that the mere production of agreements does not prove that the parties genuinely intended them to have the effect they appear to have. In Erf 3183/1 Ladysmith (Pty) Ltd v CIR3 Hefer JA, dealing with a contention that agreements should be given effect in accordance with their tenor (form), said: „This is plainly not so. That the parties did indeed deliberately cast their arrangement in the form mentioned, must of course be accepted; that, after all, is what they had been advised to do. The real question is, however, whether they actually intended that each agreement would inter partes have effect according to its tenor. If not, effect must be given to what the transaction really is.‟ After referring to s 82 of the Act Hefer JA continued: „Therefore, unless the appellants have shown on a preponderance of probability that the agreements do indeed reflect the actual intention of the parties thereto, the Commissioner‟s decision cannot be disturbed.‟ [41] This was the view also of Harms JA in Relier (Pty) Ltd v CIR 4 where he said that if the agreements in issue were taken at face value the taxpayer would have to succeed: but the agreement in question had „unusual and unreal aspects to it‟ which raised questions as to the real intention of the taxpayer. How then does a court ascertain the real intention of a party to a contract when the contract appears to be simulated? This is the question to which I now turn before examining any of the evidence. Real intention and simulation: Substance and form 3 1996 (3) SA 942 (A) at 953A-F. 4 60 SATC 1 (SCA) at 7. [42] It is trite that a taxpayer may organize his financial affairs in such a way as to pay the least tax permissible. There is, in principle, nothing wrong with arrangements that are tax effective.5 But there is something wrong with dressing up or disguising a transaction to make it appear to be something that it is not, especially if that has the purpose of tax evasion, or the avoidance of a peremptory rule of law. However, as Hefer JA said in Ladysmith,6 one must distinguish between the principle that one may arrange one‟s affairs so as to „remain outside the provisions of a particular statute‟, and the principle that a court „will not be deceived by the form of a transaction: it will rend aside the veil in which the transaction is wrapped and examine its true nature and substance‟ (per Wessels ACJ in Kilburn v Estate Kilburn,7 cited by Hefer JA in Ladysmith8). As the court said in Ladysmith9 the principles are not in conflict. [43] I shall not traverse the long line of authority in which these two principles have been invoked. They are dealt with comprehensively in Ladysmith. And they are expressed in classic statements in Zandberg v Van Zyl10 and Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd.11 In Zandberg Innes JA said: „Now, as a general rule, the parties to a contract express themselves in language calculated without subterfuge or concealment to embody the agreement at which they have arrived. They intend the contract to be exactly what it purports; and the shape which it assumes is what they meant it should have. Not infrequently, however (either to secure some advantage which otherwise the law would not give, or to escape some disability which otherwise the law would impose), the parties to a transaction endeavour to conceal its real character. They call it by a name, or give it a shape, intended not to express but to disguise its true nature. And when a Court is asked to decide any rights under such an agreement, it can only do so by giving effect to what the transaction really is: not what in form it purports to be. The maxim then applies plus valet quod agitur quam quod simulate concipitur. But the words of 5 IRC v Duke of Westminster [1936] AC 1 at 19, cited by the court in Ladysmith, above. The principle is affirmed by Hefer JA in CIR v Conhage (Pty) Ltd 1999 (4) SA 1149 (SCA) para 1. 6 Above at 950H-951D. 7 1931 AD 501 at 507. 8 At 951C-D. 9 At 951D-953A. 10 1910 AD 302 at 309. 11 1941 AD 369. the rule indicate its limitations. The Court must be satisfied that there is a real intention, definitely ascertainable, which differs from the simulated intention. For if the parties in fact mean that a contract shall have effect in accordance with its tenor, the circumstances that the same object might have been attained in another way will not necessarily make the arrangement other than it purports to be. The enquiry, therefore, is in each case one of fact, for the right solution of which no general rule can be laid down‟ (my emphasis). [44] In Randles Watermeyer JA, after quoting this statement said:12 „I wish to draw particular attention to the words “a real intention, definitely ascertainable, which differs from the simulated intention”, because they indicate clearly what the learned Judge meant by a “disguised” transaction. A transaction is not necessarily a disguised one because it is devised for the purpose of evading the prohibition in the Act or avoiding liability for the tax imposed by it. A transaction devised for that purpose, if the parties honestly intend it to have effect according to its tenor, is interpreted by the Courts according to its tenor, and then the only question is whether, so interpreted, it falls within or without the prohibition or tax.‟ [45] While there may be no conflict between the two principles referred to in Ladysmith there is a divergence in their application: the cases do not consistently approach what is really meant by a party‟s intention in concluding a contract –what purpose he or she seeks to achieve – and this warrants some further consideration. Indeed, the best illustration of this divergence is to be found in Randles,13 where the different approaches are to be found in the minority and majority judgments. The facts in that matter bear repeating. [46] Before 1936 Randles had imported fabric under rebate of customs duty. Various manufacturers made up the fabric into shirts and pyjamas, and returned the items so made up to Randles for sale to retailers. In 1936 the customs regulations changed. In order for Randles to get the rebate the manufacturers had to declare that the material was their property. Randles thus changed its former practice and contracts with the manufacturers. They purported to transfer ownership of the material to the manufacturers, so that 12 Above at 395. 13 1941 AD 369. the declarations could be made. But the „right‟ that the manufacturers acquired was severely restricted. They had to make up the garments in accordance with Randles‟ instructions and to resell the finished items to Randles at a price equal to that which Randles charged them, plus the cost of making up the garments. Randles bore the risk of loss or damage to the material at all times. [47] Watermeyer JA for the majority ( Feetham JA concurred and Centlivres JA delivered a separate concurring judgment) found that Randles had so much wanted to transfer ownership of the materials, albeit that the transfer was but a vehicle for achieving another purpose, that they had intended to do so. There was no requirement, he held, that the right transferred had to be untrammelled. [48] De Wet CJ preferred to look at the substance of what was done: the parties could not possibly have intended sales, pursuant to which ownership of the materials would pass, he considered, since the manufacturers acquired a „right‟ devoid of content. Tindall JA too considered that the court should have regard to what was done rather than what was said.14 In cases that have followed, discussed below, the minority approach has in fact been followed. [49] In Vasco Dry Cleaners v Twycross15 Hoexter JA examined all the peculiar features of a contract, ostensibly for the transfer of ownership, to determine the real intention of the parties. And in Skjelbreds Rederi A/S v Hartless (Pty) Ltd16 the court refused to recognize a cession of rights, enabling litigation, where it was clear that the successful litigant would have to retransfer the rights to the cedent after the litigation. Dishonesty was not in issue in any of these cases. But in each a transaction had been concluded to achieve a purpose other than that for which it was ostensibly concluded. 14 Above at 409. 15 1979 (1) SA 603 (A). 16 1982 (2) SA 710 (A). [50] In other cases, such as Hippo Quarries (Tvl) (Pty) Ltd v Eardley,17 courts have looked at the form of a transaction and concluded that the parties genuinely intended to give effect to that which they had apparently agreed. And in CIR v Conhage 18 Hefer JA found that sale and leaseback agreements, which had unusual terms but which made good business sense, were honestly intended to have the effect contended for by the parties.19 [51] In Hippo Quarries the court drew a distinction between motive and purpose, on the one hand, and intention on the other, in trying to determine the genuineness of a contract, and of the underlying intention to transfer a right, where the transfer was not an end in itself. Nienaber JA said:20 „Motive and purpose differ from intention. If the purpose of the parties is unlawful, immoral or against public policy, the transaction will be ineffectual even if the intention to cede is genuine. That is a principle of law. Conversely, if their intention to cede is not genuine because the real purpose of the parties is something other than cession, their ostensible transaction will likewise be ineffectual. That is because the law disregards simulation. But where, as here, the purpose is legitimate and the intention is genuine, such intention, all other things being equal, will be implemented‟ (my emphasis). [52] NWK likened the transactions in this matter to those featuring in S v Friedman Motors (Pty) Ltd21 where the contracts in question were designed to avoid legislation regulating money-lending transactions. In order to obtain funds to acquire a motor car, an individual would sell his car to a bank. The bank would immediately resell the car to the individual for a higher price, but would reserve ownership in the car until the full purchase price was paid – a hire-purchase contract. The individual would pay a cash deposit and monthly instalments and on payment of the full purchase price ownership of the car 17 1992 (1) SA 867 (A). 18 1999 (4) SA 1149 (SCA). 19 See in this regard Professor Nereus Joubert „Asset-Based Financing, Contracts of Purchase and Sale, and Simulated Transactions‟ (1992) 109 SALJ 707, referred to in Conhage para 9. 20 At 877C-E. 21 1972 (1) SA 76 (T), upheld on appeal, 1972 (3) SA 421 (A). would revert to him. The same object would usually be achieved through a loan of the price by the bank to the individual, repayable with interest. [53] Colman J considered that the transactions might be loans, disguised as sales, or genuine sales, depending on the parties‟ intention. He said:22 „If two people, instead of making a contract for a loan of money by one of them to the other, genuinely agree to achieve a similar result through the sale and repurchase of a chattel, there is no room for an application of the maxim plus valet quod agitur quam quod simulate concipitur. The transaction is intended to be one of sale and repurchase, and that, at common law, is what it is.‟ [54] But in both Friedman and Conhage, where the courts held that the parties intended their contracts to be performed in accordance with their tenor, there were sound reasons for structuring the transactions as they did: the purchaser of the car in Friedman was required to give security in return for the funds advanced by the bank. A pledge would have deprived him of the car and its use. Hence the sale and resale: it allowed the purchaser to keep and use the car. In Conhage the sale and leaseback of manufacturing equipment permitted the manufacturer to retain possession of the equipment. There was a commercial reason or purpose for the transactions to be structured as they were. In both instances there was a genuine transfer of ownership. Had the purchaser failed to pay the seller he would have lost the right to become owner in due course. [55] In my view the test to determine simulation cannot simply be whether there is an intention to give effect to a contract in accordance with its terms. Invariably where parties structure a transaction to achieve an objective other than the one ostensibly achieved they will intend to give effect to the transaction on the terms agreed. The test should thus go further, and require an examination of the commercial sense of the transaction: of its real substance and purpose. If the purpose of the transaction is only to achieve an object that allows the evasion of tax, or of a peremptory law, then it will be regarded as simulated. And the mere fact that parties do perform in terms of 22 At 80F-H. the contract does not show that it is not simulated: the charade of performance is generally meant to give credence to their simulation. A genuine intention to borrow R96 415 776? The peculiar features of the transactions [56] In this matter the Commissioner contended that NWK had deliberately disguised its contract to borrow R50m from FNB as a transaction in terms of which it would borrow R96 415 776, repayable by the delivery of maize which in fact was never intended. The Tax Court found, however, that Barnard of NWK had intended the transaction to have effect in accordance with its tenor. As I have said, that test is not enough to allay the possibility of simulation: one must have regard to the purpose of the transaction – what it is really intended to achieve. [57] What then is the real purpose of the loan in this case? Does it have any commercial substance or make business sense? NWK argued that the loan to it by Slab, like the sales to individuals in Friedman Motors, was genuinely intended to have legal effect in accordance with its tenor. But as I have said, the hire-purchase agreements in that and similar cases made good commercial sense. They allowed the purchasers to raise finance while at the same time retaining possession of the vehicles. And there was a genuine transfer of ownership. [58] Was there any purpose or commercial sense – other than creating a tax advantage to NWK – for the loan by Slab to NWK to be structured in the way it was? Was there any genuine intention to deliver maize to Slab or a cessionary? The Tax Court did not address these questions, accepting the contracts in issue at face value and not questioning their purpose. There were several inexplicable aspects to the whole series of transactions that require scrutiny. The other loan from FNB to NWK concluded on the same day [59] It will be recalled that on 1 April 1998, the same day as the impugned loan was agreed, Barnard, for NWK, accepted the offer made by FNB on 23 February of a short-term loan of R50m. Why were two loans agreed on the same day? And, more pertinently, why was there an agreement to borrow R96 415 776 at all when it was not needed by NWK? The clear inference to be drawn was that the loan for R96 415 776 was a transaction concluded for a different purpose entirely, and that the genuine agreement was to borrow R50m. Repayment of a loan of money through the delivery of maize? [60] I have already indicated that a contract for the payment of money in return for the delivery of a commodity such as maize is a sale and not a loan. That in itself is not necessarily significant. The label attached to a contract does not determine its validity. In my view, however, the fact that the parties called it a loan shows that what was really intended was that NWK would borrow money from FNB or its subsidiary and repay it in the usual way – repayment of the capital and interest. The repayment through delivery of something other than money raises the question as to what was really intended. The payments out of and into FNB’s account on the same day: ‘round tripping’ [61] In terms of the forward sale agreement between First Derivatives, a division of FNB, and NWK, the price payable to First Derivatives by NWK was R45 815 776. It was paid on 1 April 1998. On the same day, Slab „forward sold‟ to First Derivatives the same quantity of maize for R46 415 776. It too was paid on 1 April 1998. In effect, the money went out of FNB‟s account (pursuant to the loan) and straight back into FNB‟s account (pursuant to the first forward sale), with only the FNB fee making any difference. The amount of the loan and the quantity of maize [62] The Commissioner argued that various factors showed that the sum of the loan and the quantity of maize required to discharge the loan were artificially calculated. Given that it is NWK‟s intention that must be ascertained, Barnard‟s evidence itself is crucial in determining whether there was a genuine loan from Slab to NWK. [63] I referred earlier to the negotiations preceding the conclusion of the loan agreement. FNB had suggested a means of providing finance to NWK and NWK had needed R50m. The proposal itself did not relate to the sum actually needed by NWK. It suggested „indicative‟ figures. [64] Barnard conceded that NWK required only R50m and did not question the calculation of the amount purportedly lent. In fact, the amount of the loan should have been insignificant since repayment was to take place by delivery of a specified quantity of maize. And whatever amount NWK borrowed, it would in fact receive a net amount of R50m. [65] The amount of the loan was obviously calculated with reference to a factor that did not bear any relation to the amount needed by NWK. Calculations done by an expert witness for the Commissioner, Professor H Wainer, showed how the loan sum was calculated in order to yield interest of R74 686 514, the face value of the promissory notes. The loan sum was thus established by taking the interest payable and calculating what capital sum was needed to generate that interest at the rate agreed. NWK argued that Wainer‟s evidence was irrelevant and inadmissible, but did not dispute the calculations. The Tax Court held Wainer‟s evidence, and that of a Professor Brink, an expert in agricultural trading, to be inadmissible. It was irrelevant, said that court, because the opinions were based on the transactions from an accounting and financial point of view: they did not deal with the intention of the parties. Thus Wainer‟s view that there was no economic substance to the transactions was disregarded by the Tax Court. [66] The calculation of the quantity of maize to be delivered was done by an agricultural economist, employed by FNB, Mr E Janowsky. Barnard did not question the calculation or take steps to verify it. He accepted Janowsky‟s estimate as soon as it was proffered without taking into account the volatility of the maize market, or any forecast of the maize price five years hence. [67] Janowsky, who testified for NWK, also conceded that an estimate of the maize price five years after the loan was advanced was impossible. He said that the price per ton in 2003 – the year when delivery was to have taken place – fluctuated by over R1 000 per ton. No attempt was even made to forecast an average price per ton. [68] Moreover, no account was taken of the cost of storage of what was admittedly a very large quantity of maize. So too, no provision was made for actual transportation and delivery costs. And the contract itself made no provision for any adjustment to the quantity of maize to be delivered by NWK. Barnard‟s responses to questions about storage and transport costs were that with hindsight he might have thought of these matters. The description of the maize [69] The maize was described in the loan and other agreements as „dried white maize fit for human consumption‟. The Commissioner argued that the description was vague since there are three classes of white maize that could have been meant, each with a different value. NWK would thus have had a choice whether to deliver maize of a lesser value. Barnard was not perturbed by this feature. He said that he assumed that the maize would be „WM1‟, the best quality produced, but acknowledged that there were two other classes that could be covered by the description. His responses to the questions put about the quality of the maize to be delivered to Slab were evasive. The absence of security [70] NWK was not required to provide security to Slab for the repayment of the loan. As the Commissioner argued, if NWK had been liquidated prior to 28 February 2003, Slab (and FNB as cessionary) would have been in a precarious position. The absence of security, the Commissioner contended, is explicable only on the basis that NWK and FNB knew that Slab would almost immediately after the conclusion of the loan, cede its rights to delivery to FNB, and that both NWK and FNB would be relieved of their respective duties to deliver the maize. And indeed that is what happened. [71] Barnard attempted to explain the lack of security on the basis that NWK did not usually give banks security for funds borrowed. But in fact NWK had previously given security to the Land Bank which required it. His evidence in this regard is thus not credible. In my view the lack of provision for security is explicable on the basis that there really was nothing to secure: the parties knew that the respective obligations to deliver maize had been extinguished by confusio. Had the obligations to deliver five years after the loan was made been genuine, security would no doubt have been provided. The context in which the loan was concluded [72] When Barnard concluded the loan agreement on behalf of NWK he knew that the forward sale agreement between Slab and FNB would be concluded, and that the promissory notes would be sold by Slab to FNB. He thus knew that Slab had no real role to play in the whole transaction. It would sell its rights to delivery of the maize, to be effected five years later, almost immediately after the loan had been concluded. The loan agreement made express provision for the cession by Slab of any of its rights. The other agreements concluded pursuant to the proposal [73] The transactions that were concluded by NWK on the same day as the loan agreement was entered into, and the subsequent cessions in June 1998, have already been discussed. Slab sold the same quantity of maize that NWK was supposed to deliver to First Derivatives, an FNB division, on the day that the loan was concluded – 1 April 1998. Again, no provision was made for securing payment of the price of R45 815 776. The peculiar features of this contract were that the price, which was required to fund the loan to NWK, was determined with reference to the amount of the loan – R96 415 776. The quantity of maize and its price were determined in the same way as they had been calculated for the loan. The description of the maize was the same as that in the loan and was equally deficient. [74] The Commissioner argued that it was no coincidence that after the sale of the promissory notes by Slab to FNB for R50 697 515, Slab was left with the right to claim R45 718 258: that meant that it made a profit of R97 518 which was effectively its fee. Although NWK was not a party to this contract it was envisaged in the initial proposal and Barnard was aware that it would be concluded. It was an integral part of the finance arrangement. And on the same day that that sale was concluded (1 April 1998), FNB sold the same maize to NWK for R46 415 776, the price being based on Janowsky‟s estimate. Again, delivery would be effected on 28 February 2003. The price was in fact paid on 1 April 1998, yet no security was given for the delivery five years later. The difference in the prices for the respective sales was R600 000 – 1.2 per cent of R50m, which was the amount that NWK had needed in the first instance. This represented FNB‟s fee. [75] Slab ceded its rights to delivery of the maize to FNB in June 1998. As I have said, the loan made express provision for the cession and it was envisaged in the proposal made to NWK at the outset. Barnard understood the consequences of the cession: effectively NWK‟s obligation to deliver the maize was cancelled. The debts were reciprocally discharged by confusio – the concurrence of the right and the obligation in the same person – FNB. [76] Although NWK argued that set-off would have taken place only when both debts were due (when NWK had to deliver the maize to FNB and FNB had to deliver to NWK on 28 February 2003) in fact Barnard must have appreciated that any delivery would be meaningless. Although silo certificates were exchanged they were in respect of the identical maize, and the exchange and notarial certificates had no purpose. Barnard‟s protestations that the delivery obligations remained extant are not credible. The entire transaction in respect of the maize was effectively of no significance. At the outset, there was, as the Commissioner has contended, no intention to effect delivery at all. Contrast this result with that in Friedman and like cases: there, although the goods remained with the purchaser when the full amount owed had been paid, there was a genuine change of ownership, delivery being constructive. [77] Similarly, the cession by NWK of its rights to delivery of maize to FNB as security for NWK‟s obligation to deliver maize pursuant to the cession from Slab to FNB made no commercial sense. The obligation was illusory given that FNB‟s and NWK‟s obligations in effect cancelled each other. There were no longer any rights that could be ceded. [78] Barnard attempted to explain the arrangements in respect of the delivery of maize as a „hedge‟: the additional R46m added in respect of the maize was to ensure that its obligation to deliver the maize as repayment of the loan could be fulfilled. But in fact there was no „hedge‟ and the agreements, examined together as they must be, envisaged no actual delivery of maize as provided for. The Tax Court found nothing unusual in the creation of a hedge or safety net within the same banking group. First Derivatives, a division of FNB, was in fact a large trader in the agricultural market. What the Tax Court did not consider, however, was that there was no commercial reason for the so-called hedge given the extinction of the respective obligations to deliver maize. Simulation and motive for deception [79] The Tax Court found that although NWK required only R50m for business purposes, it had been offered a greater sum by FNB, structured in a particular fashion that would enable it to claim a tax advantage to which it would not otherwise have been entitled. NWK was not obliged, the court said, „to choose the less tax-effective route‟. That is of course correct, as the authorities cited earlier show. But the Tax Court went on to say that given the apparent tax benefit of the structure proposed by FNB it was difficult to see why NWK would have wished to simulate the transaction. There was, it held, „no financial or other disadvantage to actually implementing the alternative structure as opposed to pretending to do so‟. NWK, the court said, had no motive for deception. Hence it had established on a balance of probabilities that its true intention was to contract with Slab and FNB on the terms reflected in the contracts. [80] It is correct that FNB and NWK outwardly performed in terms of the various contracts, as indicated earlier. But before then, in January 2003 FNB wrote to NWK reminding it of its obligation to deliver 109 315 tons of maize on 28 February, and stating that on receipt it would deliver the same quantity to NWK. Yet on 13 February 2003 Rand Merchant Bank, a division of FNB, wrote to Barnard suggesting that set-off would occur, and that various clauses in the original loan agreement should be amended retrospectively in the event that actual delivery would be made. Barnard must have known then, if he did not know before, that the respective delivery obligations had been extinguished by confusio. The intention to perform in accordance with the terms of the contract is accordingly questionable, and the Tax Court should have considered this. It should have asked whether there was actually any purpose in the contract other than tax evasion. This is not to suggest that a taxpayer should not take advantage of a tax-effective structure. But as I have said, there must be some substance – commercial reason – in the arrangement, not just an intention to achieve a tax benefit or to avoid the application of a law. A court should not look only to the outward trappings of a contract: it must consider, when simulation is in issue, what the parties really sought to achieve. Barnard‟s credibility [81] The Tax Court found that Barnard was a credible and satisfactory witness. It accepted at face value his evidence that he thought he was contracting with Slab despite the fact that the proposal and the loan agreement had been drafted by FNB and that he had not ever encountered a representative of Slab who was not also an official of FNB. It also accepted his evidence that delivery of the maize was always intended and had taken place. [82] The Commissioner argued that various features of his evidence showed that Barnard was not credible. I shall not traverse them all. In my view, the most significant are these: his concession that the actual amount lent was not of any significance; his inability to explain the inadequate description of the maize in the loan and forward sale agreements; his conflicting responses about knowledge of the Slab cession, first saying he did not know it would take place and later admitting that it had been contemplated at the outset and was part of the structure of the FNB proposal; his refusal to accept that the Janowsky forecast did not take into account important factors affecting the price of the maize, such as market fluctuations, and storage and delivery costs; his insistence that security was not required for the performance of the obligations on the basis that banks did not generally require security from NWK, this despite having provided the Land Bank with security for a loan; and lastly, his acknowledgment that unless Slab had discounted the promissory notes it would not have had the funds to advance the loan. [83] In my view the inconsistencies and obfuscations in Barnard‟s evidence are significant. And his inability to explain the way in which the prices and quantities were calculated was telling. His evidence was simply not credible and the Tax Court erred in finding him to be a credible and satisfactory witness. The loan was a simulated contract [84] The Commissioner led the evidence of two experts on the way in which the amount of the loan and the quantity of maize was computed, and on the factors that should have been taken into account in determining the price of the maize in the future. The Tax Court did not admit this evidence and thus did not take it into account. It is not necessary to determine whether that was incorrect. It is plain from a reading of Barnard‟s testimony, and a comparison of it with the documents tendered in evidence, that the amount of the loan was determined not by what was needed by NWK but by reference to other factors. [85] Moreover, Slab was able to advance the sum of R96 415 776 only by discounting the promissory notes, the face value of which was the equivalent of the capital sum of R50m and interest at the rate agreed. And NWK initially intended to borrow only R50m. The balance was added on for a purpose that Barnard could not explain, other than as a hedge. But a hedge was needed only if the real amount borrowed was the artificially constructed sum of R96 415 776. The mere nature of the hedge shows the artificiality: why would NWK incur a liability to deliver maize valued at R46m in order to purchase the same quantity of maize to discharge the same obligation? As pointed out by the Commissioner, to ascertain the true intention of NWK one had to ignore entirely all the rights and obligations in respect of the maize. [86] As I have said, the appropriate question to be asked, in order to determine whether the loan and other transactions were simulated, is whether there was a real and sensible commercial purpose in the transaction other than the opportunity to claim deductions of interest from income tax on a capital amount greater than R50m. None is to be found. What NWK really wished to achieve was a tax advantage. What else could it, or did it, achieve through the transactions in respect of the maize? Barnard did not explain any, other than the creation of a hedge which had no effect. He could thus not honestly have believed that the contract was to be performed in accordance with its tenor. [87] The FNB proposal itself, the transactions concluded between NWK and Slab, and Slab and FNB, with their peculiar features, and Barnard‟s inability to give any credible explanation of aspects of the transactions show, I consider, that NWK could not have believed, and did not in fact believe, that the loan was for the sum of R96 415 776. The contract was dressed up in order to create an obligation to pay interest, and consequently a right to claim a tax deduction, to which NWK was not entitled. NWK deliberately disguised the true nature of the loan for this purpose. It did not intend, genuinely, to borrow a sum approximating the one it purported to borrow. [88] There was no evidence that Barnard was deceived by FNB. He knew how the contracts, even those to which NWK was not a party, were to be structured and that the deliveries in respect of maize were simulated. And since NWK bore the onus of showing that the Commissioner‟s assessments were wrong, the production of the contracts themselves was insufficient to discharge that burden. Yet, despite that, NWK did not call the officials of FNB who had proposed the transactions to give evidence. I do not consider, however, that any inference need be drawn from the failure to call the FNB officials. Barnard‟s evidence speaks for itself. [89] In summary: Barnard could not explain (and indeed there was no explanation possible for) the following extraordinary features of the transactions. The sale of maize by NWK to FNB was dressed up as a loan. NWK and FNB entered into two contracts of loan on the same day, the one where FNB lent NWK R50m and the other where it „lent‟ NWK R96 415 776. Virtually the same amount in excess of that which was required by NWK (R46 415 776) was paid by FNB to NWK and then in effect paid back by NWK to FNB on 1 April 1998. The amount lent in the impugned loan was determined not by reference to what was needed but by reference to a capital sum needed to generate a particular sum of interest. The description of the maize in the various contracts was vague. No security was afforded to Slab for repayment of the loan. The loan was concluded with the knowledge on the part of Barnard that Slab would sell its right to delivery of the maize to FNB and that Slab would sell the promissory notes at a discount to FNB all on the same day: Slab‟s role in the transactions was momentary. These aspects all lead to the conclusion that the agreements in respect of maize were illusory: there was never any intention to deliver maize in the future. The loan was a simulated transaction, designed to create a tax benefit for NWK. [90] In view of the conclusion that I have reached that the loan for R96 415 776 was a transaction designed to disguise the real agreement between the parties – a loan of R50m – the Commissioner‟s assessments were correct, and the appeal against the decision of the Tax Court in this respect must succeed. There is thus no need to examine whether s 103(1) of the Act could have been applied. However, since NWK argued that the Commissioner may not raise s 103(1) as an alternative ground it is convenient to deal briefly with this submission. Section 103(1) as an alternative basis [91] It must first be noted that this section has been repealed, and replaced by a new part to the Act.23 I have set out the basis of the application of s 103(1) already. In summary, if satisfied that a transaction has been entered 23 Sections 80A to 80L: note, in particular, 80C which deals with transactions that have no commercial substance. into which has the effect of avoiding or reducing liability for tax, and would not normally be employed for bona fide business purposes, the Commissioner shall determine liability for tax as if the transaction had not been entered into. [92] NWK argued that if the Commissioner had been satisfied that the loan was simulated and did not have a tax avoidance or reduction effect, he could not, even in the alternative, be satisfied that the transaction was one that had a tax avoidance effect. Satisfaction, it was argued, is a subjective jurisdictional fact. The Commissioner cannot be satisfied on two apparently conflicting grounds. NWK relied in this regard on ITC 162524 where Wunsh J said that unless the Commissioner demonstrates that he is of the opinion that tax has been avoided, he cannot issue an assessment under s 103. Thus if tax has not been avoided because the transaction was not simulated, he cannot, even on an alternative basis, be satisfied that tax has been avoided. [93] In CIR v Conehage25 this court was also presented with alternative bases for the Commissioner‟s assessments, one being that the transactions were simulated and the alternative that the Commissioner was satisfied that they had been entered into for the purpose of avoiding liability for tax. The court found that the contracts were genuine, but also considered s 103, finding that the Commissioner had not shown that the transactions had had the effect of avoiding liability for tax. There is, implicit in this approach, a view that s 103 could be invoked as an alternative ground for assessment. There appears to me to be no reason why an invalid transaction cannot also be abnormal and concluded for the purpose of avoiding tax. Had the Commissioner not proved that the loan was a simulated contract, it would have been open to the Tax Court to consider the soundness of an assessment under s 103. Additional tax and interest [94] As indicated earlier, in the additional assessments for the period from 1999 to 2003 the Commissioner levied a penalty of 200 per cent and 24 59 SATC 383 at 395. 25 1999 (4) SA 1149 (SCA), referred to above. additional interest on the deductions claimed for interest in excess of that on R50m. The penalty, he argued, was warranted because NWK had deliberately made incorrect statements in the returns for the years of assessment, intending to evade taxation. There were no extenuating circumstances. This justified also the imposition of the additional interest in terms of s 89quat of the Act. [95] Section 76(2)(a) permits the Commissioner to remit the additional tax, even where there is a dishonest attempt to evade tax, where there are extenuating circumstances. NWK argued that he failed to take into account the following extenuating factors. FNB had approached NWK with its proposal, and NWK had not solicited finance from FNB. The proposal was said to be confidential and proprietary to FNB. NWK played no role in crafting the terms of the various agreements. Barnard had relied on the expertise of the officials of FNB. FNB had furnished to Barnard the opinion of counsel which had suggested that a structure similar (or the same as – we do not know) to that proposed was legally sound, although he had cautioned against the application of s 103 by the Commissioner. [96] The consequence of the imposition of 200 per cent of additional tax is that the amount payable pursuant to the new assessments would have been R47 360 583. Only R15 786 861 of that would have been the interest that should not have been claimed as a deduction over the five years of assessment. The penalty is severe and out of proportion to the wrong committed by NWK. [97] I consider that these factors do militate against the imposition of the highest penalty possible, and would reduce the additional tax to 100 per cent of that for which NWK was liable. Counsel for the Commissioner accepted that this would be appropriate. To this extent the appeal should fail. And NWK has conceded that if the appeal succeeds on the first basis the interest in terms of s 89quat was properly levied. [98] Accordingly: 1 The appeal against the order of the Tax Court is upheld with costs including those of two counsel. 2 The order of the Tax Court is replaced with: „(a) The objection to the assessments is dismissed and the additional assessments are upheld. (b) The objection to the imposition of additional tax of 200 per cent is upheld. (c) Additional tax of 100 per cent of the total amount of the additional assessments is imposed in terms of s 76 of the Income Tax Act 58 of 1962.‟ _____________ C H Lewis Judge of Appeal APPEARANCES: APPELLANTS: C Puckrin SC (with him D Fine SC, G D Goldman, and T Molokomme) Instructed by the State Attorney Johannesburg The State Attorney Bloemfontein RESPONDENTS: W Trengove SC (with him A Stewart SC and H V Vorster) Instructed by Vorster Pereira Attorneys Sandton Bezuidenhout Inc Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA PRESS RELEASE 1 December 2010 STATUS: Immediate CSARS v NWK (27/10) [2010] ZASCA 168 (1 December 2010) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Commissioner for the South African Revenue Service had levied additional assessments against NWK, a maize trading company, formerly a co-operative, for the years 1999 to 2003. He had also imposed additional tax (at the rate of 200 per cent) as a penalty for making false statements in tax returns, and interest. The basis of the assessment was that NWK had concluded transactions with First National Bank and its subsidiary that were simulated. While intending to borrow R50m from FNB, NWK, in April 1998, had purported to borrow over R96m from a subsidiary of FNB, repayable by the delivery of a specified quantity of maize five years after the contract was concluded. It had paid interest on the sum of R96m, and claimed that as a deduction from income tax on the basis that it was expenditure in the production of income. A number of other agreements were entered into which in effect cancelled out the obligation to deliver maize. The real sum lent was R50m, while deductions were claimed in respect of interest paid on R96m. The Tax Court, Johannesburg found that the parties had intended to perform the contacts on the terms agreed: there was no simulation. It took into account the performance, five years later, by the parties of their respective obligations under the various contracts, including the constructive delivery of maize (by exchange of silo certificates in front of a notary) by NWK to FNB and the immediate delivery of the same quantity of maize by FNB to NWK. It upheld NWK’s appeal against the Commissioner’s assessments. The Tax Court also declined to invoke the former s103(1) of the Income Tax Act 58 of 1962 (which allows the Commissioner to impose tax where he is satisfied that a transaction has been entered into for the purpose of avoiding liability for tax) on the basis that it could not be used as an alternative ground to a finding that a transaction was simulated. Today the Supreme Court of Appeal upheld the Commissioner’s appeal against the decision of the Tax Court. It held that the loan was simulated, and that there had never been an intention to effect delivery of maize as repayment. The court did, however, reduce the penalty, imposing only 100 per cent of the amount assessed as additional tax. The SCA held that the test to determine simulation cannot simply be whether there is an intention to give effect to a contract in accordance with its terms. Invariably where parties structure a transaction to achieve an objective other than the one ostensibly achieved they will intend to give effect to the transaction on the terms agreed. The test should thus go further, and require an examination of the commercial sense of the transaction: of its real substance and purpose. If the purpose of the transaction is only to achieve an object that allows the evasion of tax, or of a peremptory law, then it will be regarded as simulated. And the mere fact that parties do perform in terms of the contract does not show that it is not simulated: the charade of performance is generally meant to give credence to their simulation. ---------------------------------------

3321

non-electoral

2006

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA Reportable Case No. 047/2005 In the matter between: THE MEC FOR ROADS AND PUBLIC WORKS, EASTERN CAPE First Appellant THE CHAIRMAN OF THE PROVINCIAL TENDER BOARD, EASTERN CAPE Second Appellant and INTERTRADE TWO (PTY) LTD Respondent CORAM: HOWIE P, FARLAM, HEHER, VAN HEERDEN JJA et MAYA AJA HEARD: 23 FEBRUARY 2006 DELIVERED: 27 MARCH 2006 Summary: Promotion of Access to Information Act 2 of 2000 s 7(1) – whether tenderer instituting application for review in terms of uniform rule 53 against public body that had called for tenders is precluded from seeking order for production of documentation relating to the tender adjudication which allegedly falls, in part, outside the ambit of the record referred to in uniform rule 53(1)(b) – whether documentation ‘requested’ prior to the commencement of review proceedings in terms of s 7(1) of PAIA. Neutral citation: MEC for Roads & Public Works v Intertrade Two (Pty) Ltd [2006] SCA 34 (RSA) JUDGMENT MAYA AJA: MAYA AJA: [1] This appeal concerns the right of an unsuccessful tenderer who has instituted review proceedings in terms of uniform rule 53 against the public body that called for tenders, to obtain information relating to the tender adjudication process from such body. [2] The respondent, Intertrade Two (Pty) Ltd (‘Intertrade’), is a supplier and repairer of mechanical and electrical plant and equipment. It instituted application proceedings in the Bhisho High Court (Dhlodhlo ADJP) seeking various forms of relief, inter alia, the review of the appellants’ tender process, in which it was a tenderer, on the grounds of irregular conduct on the part of the appellants’ officials. In addition to the record envisaged by rule 53(1)(b), Intertrade requested a wide range of documents relating to the tender process to enable it properly to formulate its case. The appellants raised a question of law in terms of rule 6(5)(d)(iii), challenging the validity of the procedure adopted by Intertrade. The objection was aimed at Intertrade’s request for additional documents on the basis that its invocation of rule 53 confined it to the production of only those documents falling within the ambit of the record envisaged by the rule. The appellants contended that s 7 of the Promotion of Access to Information Act 2 of 2000 (‘PAIA’) precluded Intertrade from demanding such additional documents before it had exhausted its procedural remedies under both rules 53 and 35(12). Dhlodhlo ADJP dismissed the objection and granted the relief sought. The appellants appeal against that order with his leave. [3] The facts on which Intertrade based its application were not in dispute. In March 1997 the first appellant (‘the department’) awarded a tender to Intertrade’s corporate predecessor for a two year contract for preventative maintenance and repairs of plant and equipment at various provincial hospitals in the Eastern Cape. Prior to the expiration of the contract, the parties agreed to extend it for a further one year period on the same terms. Similar extensions followed until 31 March 2003. After the expiry of the initial contract in March 1999, the department had, in three successive tender processes, invited tenders for the contract in different formats in an attempt to include other suppliers. Intertrade was the only tenderer on each occasion but the contract was not awarded. This occurred again in 2002 despite the department’s recommendation in favour of Intertrade. The second appellant (‘the Tender Board’) rejected the recommendation and instructed the department to ‘rephrase the tender specifications’ - which had in fact been done in the previous processes - and re-advertise the tender to accommodate other service providers. The tender was once again not awarded. [4] In September 2003, the department invited tenders, valid for 90 days, for four contracts – two for mechanical and electrical work (‘the ME contracts’) and two for laundry and kitchen repairs and maintenance (‘the LK contracts’) at provincial hospitals in certain municipal districts. Intertrade was the only tenderer for the ME contracts and one of two tenderers for each of the LK contracts. When the Tender Board did not make a decision on the tenders within the stipulated time, Intertrade complained to it and to the department in a number of letters. In its reply, the department expressed surprise that Intertrade had not been awarded the contracts. Intertrade then wrote to the Premier of the Province, subsequently cited as one of the respondents in the court a quo, seeking his intervention. The Premier asked the Provincial Strategy Planning Division (the PSPD) to investigate the matter. In its report to the Premier in March 2004, the PSPD had expressed dismay at the undue delay, referring to its ‘desperation and frustration after having had no appropriate response’ from the relevant officials. It also raised concern at the death of patients and other problems which had resulted from the failure to maintain the relevant hospital equipment. At a related meeting of the relevant heads of department, it was apparently concluded that Intertrade had not been treated fairly and the Premier apparently expressed the view that the contracts should have been awarded to it. [5] The 2004 national elections, which brought a new minister for the department and a new Premier in the province, appear to have interrupted the process. In May 2004, the department informed Intertrade in writing that one of its tenders had not been approved because it was overpriced. This raised suspicion on the part of Intertrade that its tender prices had been tampered with after the closure of tenders as its prices as tendered had been lower than the tender estimates on submission. Strangely, this departmental communication was subsequently telephonically withdrawn by one of the department’s officials without explanation. Having informed Intertrade that it had decided to award one of the LK contracts to the other tenderer concerned (who was also cited as a respondent in the court a quo), the department then requested Intertrade to extend the validity of its tenders in respect of both LK contracts. Intertrade agreed to do so. In a bizarre turn of events, Intertrade was at this stage approached by a woman who offered to get its tenders approved in return for a 10 per cent stake in the contracts. Intertrade rejected the offer out of hand. More time elapsed and a decision was still not made. Further entreaties to the new Premier elicited no response. [6] Finally, on 27 July 2004, Intertrade, through its attorneys, wrote to the department and the Tender Board formally enquiring, amongst other things, whether the relevant tenders had been awarded. It further requested the identity of the successful tenderer, written reasons for the decision and copies of specified, wide-ranging documents concerning the tender process relative to the four contracts in the event that its tender bids had been unsuccessful. The department subsequently provided Intertrade with a disjointed bundle of documents relating only to some of the tenders. Some of the documents were undated and others were incomplete extracts of minutes apparently relating to relevant proceedings. It appeared from some that the tender estimates of the Intertrade’s competitors were extremely low and unrealistic. The relevant tender documents were, however, withheld, as were most of the documents requested by Intertrade. This included a document emanating from the Premier which, in essence, directed that the contracts be awarded to Intertrade and which employees of Intertrade had seen during a visit to the department. A further letter addressed by Intertrade’s attorneys to the department and the Tender Board requesting the outstanding documents went unanswered. Intertrade then launched the review application. [7] It was common cause that the appellants had purported to produce a record for purposes of rule 53 in the court a quo where a judgment on the review proceedings is still pending. Prior to the hearing of the appeal, the appellants filed a ‘notice’ listing which of the documents, as requested in Intertrade’s notice of motion, they contended did not form part of the rule 53 record. These are: ‘1. minutes of all other departmental meetings and relevant committee meetings at which the tenders in relation to the contracts were considered and evaluated; 2. all correspondence, interoffice memoranda and other documents relating to the tenders and the award or non-award or postponement of the award of the contracts during the period August 2003 to date; 3. all directives or recommendations or correspondence issued by the Premier of the Eastern Cape (past or current) relating to the award or non-award of the contracts; 4. any costing exercises in relation to contracts produced by the First and Second Respondents [appellants] or provided to such Respondents; and 5. extracts of the tender documents of the Fourth and Fifth Respondents [Intertrade’s co- tenderers] in respect of contracts 1893 LK and 1894 LK which relates to their costing of their tenders and setting out their rates and how their tender prices are made up.’ [8] Section 32 of the Constitution confers upon every person a general and unqualified right of access to any information held by the state and its organs. It then requires the enactment of national legislation to give effect to the right, which legislation ‘may provide for reasonable measures to alleviate the administrative and financial burden on the state’. PAIA is that legislation. The right to obtain information is conferred also, albeit for the limited purpose of litigation, by uniform rules 53 and 35, which regulate review proceedings and the discovery procedure, respectively. [9] As indicated above, the appellants’ central contention was that Intertrade’s right to access the documents that it sought lay in rules 53 and 35(12). Their counsel sketched the rather circuitous legal route that he submitted Intertrade had to take. He argued that Intertrade should first have requested a copy of the relevant record in terms of rule 53. In the event that some of the documents sought fell outside the scope of the record envisaged in that rule, Intertrade would then have to invoke the discovery procedure under rule 35(12). If that process did not yield the desired results, Intertrade could then utilize PAIA to access the missing documents. Or it could, so the argument went, have reversed the process and brought a separate application in terms of PAIA before proceeding on review. [10] The appellants’ case, which seeks to limit Intertrade’s right of access to information, rests on s 7(1) of PAIA. The objects of the Act are embodied in s 9. They include: ‘(a) to give effect to the constitutional right of access to- (i) any information that is held by the State; and (ii) . . . (b) to give effect to that right- (i) subject to justifiable limitations, including, but not limited to, limitations aimed at the reasonable protection of privacy…and effective, efficient and good governance; and (ii) in a manner which balances that right with any other rights, including the rights in the Bill of Rights in Chapter 2 of the Constitution.’ [11] It is abundantly clear, therefore, that the interpretation of the provisions of PAIA must be informed by the Constitution (see s 39(2) of the Constitution, which obliges every court to promote the spirit, purport and objects of the Bill of Rights when interpreting any legislation; and see further Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs & Others 2004 (4) SA 490 (CC) para 72). [12] I turn now to deal with s 7(1). It reads: ‘(1) This Act does not apply to a record of a public body or a private body if – (a) that record is requested for the purpose of criminal or civil proceedings; (b) so requested after the commencement of such criminal or civil proceedings, as the case may be; and (c) the production of or access to that record for the purpose referred to in paragraph (a) is provided for in any other law.’ It is important to note that these jurisdictional requirements are cumulative – all three must co-exist for the operation of the Act to be excluded. [13] It was not disputed that the appellants fall within the definition of ‘public body’ in PAIA and that they are state organs in terms of the Constitution. It is common cause that the request for the documents in issue was made prior to the institution of the application proceedings and that it was in fact the appellants’ resistance to disclosure that prompted the request for the production of documents contained in the notice of motion. The appellants’ counsel, however, sought to draw a distinction between what he termed an informal request, ie Intertrade’s letters of 27 July 2004 and 25 August 2004 and a request contemplated in s 7(1)(b). As I understood his argument, the letters do not amount to the latter and only the demand set out in the notice of motion could be considered as constituting the request envisaged in PAIA. No authority was cited to support this submission and I have not found any. In my view, there is no merit in the submission and I am satisfied that Intertrade did make a ‘request’ in terms of s 7(1)(b) before the institution of its application. [14] Counsel argued further that the notice of motion in any event referred to more documents than had been requested before the proceedings and that the ‘broader proceedings’ thus confined Intertrade to the procedural remedies. The items requested for the first time in the notice of motion are those listed in paragraph 4 of the appellants’ abovementioned ‘notice’. In my view, these documents are so closely linked to those which had been previously requested that there is no basis to distinguish them from the other documents. [15] Some of the documents sought by Intertrade may not be obtainable by means of either rule 53 or 35. In Johannesburg City Council v The Administrator, Transvaal (1) 1970 (2) SA 89 (T), the court described a rule 53 ‘record of proceedings’ as follows (at 91G-92A): ‘The words…cannot be otherwise construed, in my view, than as a loose description of the documents, evidence, arguments and other information before the tribunal relating to the matter under review, at the time of the making of the decision in question. It may be a formal record and dossier of what has happened before the tribunal, but it may also be a disjointed indication of the material that was at the tribunal’s disposal. In the latter case it would, I venture to think, include every scrap of paper throwing light, however indirectly, on what the proceedings were, both procedurally and evidentially. A record of proceedings is analogous to the record of proceedings in a court of law which quite clearly does not include a record of the deliberations subsequent to the receiving of the evidence and preceding the announcement of the court’s decision. Thus the deliberations of the Executive Committee are as little part of the record of proceedings as the private deliberations of the jury or of the Court in a case before it. It does, however, include all the documents before the Executive Committee as well as all documents which are by reference incorporated in the file before it.’ (My emphasis.) Some of the items listed in the appellants’ abovementioned ‘notice’ may, conceivably, fall outside the scope of the above description. [16] Rule 35 is also not without limitations. The discovery procedure is, even when interpreted purposively ( see, for example, Premier Freight (Pty) Ltd v Breathetex Corporation (Pty) Ltd 2003 (6) SA 190 (SE)), by its nature an extraordinary procedure in application proceedings, allowed only in exceptional circumstances, and does not create an unqualified obligation for a party from whom discovery is sought to produce the documents. The appellants could possibly resist discovery successfully, for example on grounds of privilege or relevance. If some of the documents sought by Intertrade cannot be obtained in terms of rules 53 and 35, this would mean that without resorting to PAIA, Intertrade would not be able to gain access to such documents. In my view, that may effectively place such documents outside the ambit of s 7(1)(c). However, in view of my conclusion in respect of s 7(1)(b), it is not necessary to decide this point one way or the other. [17] It has been suggested that the purpose of s 7 is to prevent PAIA from having any impact on the law governing discovery or compulsion of evidence in civil and criminal proceedings (see Ian Currie & Jonathan Klaaren The Promotion of Access to Information Act Commentary (2002) at pp 52-54) by prohibiting access, after commencement of litigation, to ensure that ‘litigants make use of their remedies as to discovery in terms of the Rules… and to avoid the possibility that one litigant gets an unfair advantage over his adversary’ (see CCII Systems (Pty) Ltd v Fakie and others NNO 2003 (2) SA 325 (T) para 21). This situation does not, in my opinion, arise on the facts of this case. [18] In the view I take of the matter, I therefore refrain from expressing any opinion on the question whether or not the right to obtain information conferred by the rules and PAIA can be invoked contemporaneously in so far as the documents sought fall outside the scope of the record envisaged in rule 53(10)(b) and the documents covered by rule 35(12) (cf Institute for Democracy in South Africa v African National Congress 2005 (5) SA 39 (C) paras 14-19). Suffice to say that s 2(1) of PAIA enjoins courts, when interpreting the provisions of the Act, to prefer any reasonable interpretation that is consistent with its objects over any alternative interpretation inconsistent therewith. From various parts of PAIA - the long title, the preamble, s 9 and other sections – those objects are clear, namely, generally to make information held by the state (and private bodies) accessible to the public to promote accountability. The rules themselves were designed ‘to secure the inexpensive and expeditious completion of litigation before the courts’ (see Federated Trust Ltd v Botha 1978 (3) SA 645 (A) at 654C-D) and also to ensure a fair hearing and should, where reasonably possible, be interpreted in such a way as to advance, and not reduce, the scope of an entrenched constitutional right (see D F Scott (EP) (Pty) Ltd v Golden Valley Supermarket 2002 (6) SA 297 (SCA) para 9; and cf De Beer NO v North- Central Local Council and South-Central Local Council 2002 (1) SA 429 (CC) para 11). [19] The wording of s 7(1) is clear and must be given effect to. Whilst the jurisdictional requirement set out in subsection (1)(a) has been established, that set out in subsection (1)(b) has not been met in the present case. Section 7 cannot, therefore, operate as a bar to Intertrade’s request. The appellants’ reliance thereon was misplaced. [20] There is another issue that requires comment. The appellants’ resistance to Intertrade’s request for documentation on technical grounds was, in my opinion, most reprehensible. Important issues are at stake here. Intertrade seeks to establish the truth about an extraordinarily extended tender process to exercise and protect its rights. The appellants knew precisely what documents it required from the outset. They did not raise any impediment which would prevent them from producing the documents. Neither did they deny that they had the documents in their possession. Their response is rendered more deplorable by the report contained in the department’s own correspondence which shows that, whilst they were embarking on delaying tactics at the taxpayer’s expense, sick and vulnerable citizens were suffering and children were dying in poorly maintained hospitals as a direct result of their failure to comply with their constitutional obligations. [21] The nature and extent of a public body’s obligation where the right of access to information is invoked is eloquently expressed in Van Niekerk v Pretoria City Council 1997 (3) SA 839 (T). There, Cameron J, dealing with a claim brought under s 23 of the interim Constitution (the precursor to s 32 of the Constitution) said at (850A-C): ‘In my view, s 23 entails that public authorities are no longer permitted to “play possum” with members of the public where the rights of the latter are at stake. Discovery procedures and common-law claims of privilege do not entitle them to roll over and play dead when a right is at issue and a claim for information is consequently made. The purpose of the Constitution, as manifested in s 23, is to subordinate the organs of State… to a new regimen of openness and fair dealing with the public.’ Had it not been for the fact the appellants were granted leave to appeal by the court a quo, this court may well have been inclined to make a special punitive costs order as a mark of its extreme displeasure at their conduct. [22] For the above reasons, the conclusion reached by the court a quo was correct. The appeal is dismissed with costs, including the costs of two counsel. _________________________ MML MAYA ACTING JUDGE OF APPEAL CONCUR: HOWIE P FARLAM JA HEHER JA VAN HEERDEN JA

MEDIA STATEMENT – CASE HEARING IN SUPREME COURT OF APPEAL The MEC for Roads and Public Works (EC) and Another v Intertrade Two (Pty) Ltd Supreme Court of Appeal -43/2005 Hearing date: 23 February 2006 Judgment date: 27 March 2006 Promotion of Access to Information Act 2 of 2000 s 7(1) – whether tenderer instituting application for review in terms of uniform rule 53 against public body that had called for tenders is precluded from seeking order for production of documentation relating to the tender adjudication which allegedly falls, in part, outside the ambit of the record referred to in uniform rule 53(1)(b) – whether documentation ‘requested’ prior to the commencement of review proceedings in terms of s 7(1) of PAIA. Media Summary of Judgment In a judgment delivered today, the Supreme Court of Appeal has dismissed the appeal of the MEC for Roads and Public Works and the Chairman of the Tender Board of the Eastern Cape against a judgment which granted Intertrade Two (Pty) Ltd, an unsuccessful tenderer, a right to obtain information in their possession relating to the adjudication of tenders, which they had invited, of contracts to conduct mechanical and electrical repair work at provincial hospitals in the Eastern Cape. The appeal turned on whether Intertrade, which had instituted an application in terms of uniform rule 53 for the review of the appellants’ tender process on grounds of irregular conduct, could, in the same proceedings, seek the production of documents relating to the tender process which were not necessarily covered by the rule. The appellants contended that Intertrade was barred from accessing the documents in terms of s 7(1) of the Promotion of Access to Information Act 2 of 2000 (‘PAIA’) which (a) prohibits access to a record sought for the purpose of criminal or civil proceedings; (b) requested after the commencement of such proceedings; and (c) where the production or access that record is provided for in any other law. The SCA held that the provisions of s 7(1), which operate cumulatively, did not apply to the instant case because Intertrade had requested the documents from the appellants by way of two letters before it launched the application. Section 7(1)(b) was not, therefore, complied with. The SCA held that whilst it was debatable whether Intertrade could access all the documents by invoking the discovery procedure provided in Uniform rule 35 as contended by the appellants, it was not necessary to decide this point in the light of its finding in respect of s 7(1)(b). The SCA emphasised the objects of PAIA – to make information held by the state accessible to the public to promote accountability. The SCA expressed its extreme displeasure at the appellants’ failure to play open cards with Intertrade and their waste of public funds by raising technical legal defences whilst public hospitals remained poorly maintained and sick children died as a result thereof.

2219

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No 159/08 THE MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT APPELLANT and MQABUKENI CHONCO AND 383 OTHERS RESPONDENTS Neutral citation: The Minister for Justice and Constitutional Development v Chonco 159/08 [2009] ZASCA 31 (30 March 2009) Coram: FARLAM, NUGENT, VAN HEERDEN, JAFTA et MLAMBO JJA Heard: 16 FEBRUARY 2009 Delivered: 30 MARCH 2009 Summary: Constitutional law – applications for pardon under s 84(2)(j) of the Constitution – whether Minister for Justice and Constitutional Development under constitutional obligation to process applications before the President considers whether to exercise his power under the section. ______________________________________________________________ ORDER On appeal from: High Court Pretoria (Seriti J sitting as court of first instance) The following order is made: The appeal is dismissed with costs, including those occasioned by the employment of two counsel. JUDGMENT FARLAM JA ( Nugent, Van Heerden, Jafta et Mlambo JJA concurring) [1] In this matter the appellant, the Minister for Justice and Constitutional Development, appeals against a judgment delivered by Seriti J in the Pretoria High Court in which he directed the appellant's predecessor 'to do all the necessary within a period of three months from [the date of the order] to enable the second respondent [the President], to exercise the powers conferred on him in terms of s 84(2)(j) of the Constitution in an informed way with regard to all 384 applications for Presidential pardon referred to in [the] application.' In the order appealed against the learned judge also declared that the appellant's predecessor had 'failed to exercise with due diligence and without delay, the constitutional obligation to process and do all the necessary to enable the second respondent to exercise the powers conferred on him in terms of s 84(2)(j) of the Constitution in an informed way, with regard to the applications for Presidential pardon by the applicant [the present first respondent] and the 383 other applicants for Presidential pardon in whose interest and on whose behalf the applicant brought this application.' [2] As appears from the portion of the order which I have quoted, the application before the court was brought by the present first respondent, Mqabukeni Chonco, on behalf of himself and 383 other persons. All of them are currently in prison, so it was alleged, serving lengthy gaol sentences for what they allege were criminal offences 'committed . . . in the course of the political struggle of the past.' None of them applied for amnesty to the Truth and Reconciliation Commission (to which I shall refer as 'the TRC') because, so they say, their political party, the Inkatha Freedom Party, 'did not support the TRC'. (In what follows I shall call this party the 'IFP'.) Their applications for pardon in terms of s 84(2)(j) of the Constitution were addressed to the second respondent, the President, but were forwarded by the IFP on their behalf to the then Minister for Justice, on the instructions of a senior official in the office of the Minister, during the period September to October 2003. [3] It was common cause between the parties that, by the time the application was heard in the court a quo the applications submitted on behalf of the applicants had not been sent to the second respondent for consideration, nor have they been sent since. This is despite the fact that, by the time of the hearing, almost four and a half years had elapsed since they were sent to the then Minister. [4] On 20 May 2005 Mr L K Joubert MP, a member of the IFP, raised the matter in the National Assembly. In the course of his speech he said the following: 'The first issue that I wish to deal with is applications for presidential pardon or reprieve that the IFP submitted and on which it is getting absolutely nowhere. We submitted a total of 384 applications for presidential pardons, in terms of section 84(2)(j) of the Constitution, as long ago as September and October 2003, and that is more than one and a half years ago. Apart from acknowledging receipt of the applications, nothing has transpired since that. My colleague, Mr Mzizi, wrote to the Minister for Justice and Constitutional Development on 13 February 2004 enquiring when he could expect a reply. Our Chief Whip wrote to the President on 11 November 2004 asking what progress had been made. The President's Office replied on 23 November and assured us that the matter was receiving the President's attention. Hearing nothing further from the President, our Chief Whip, once again, wrote to the Minister for Justice and Constitutional Development on 19 January 2005 requesting an appointment to see the Minister in this regard. Seeing that nothing happened, our Chief Whip once again wrote to the Minister on 8 March 2005 and insisted on an urgent interview to discuss this matter. Nothing happened; there was complete silence. We are simply being ignored. In the meanwhile, we have been very patient and did not kick up dust when Dr Boesak received a pardon. We were hoping that attention would also, in due course, be given to our 384 applicants but, until today, nothing has happened. I, therefore, have to tell this House that 384 applications for pardons are simply lying somewhere and nobody seems to be interested in doing anything about them. This is nothing less than a violation of human rights. Those 384 applicants and their families have been waiting for a very long time but all they have received is silence. I bring this matter to the attention of Parliament and the public, and I today publicly request the hon Minister to kindly and urgently inform us what the status of these applications is so that we can immediately inform the applicants about where they stand.' [5] It appears from the papers that the Minister then promised to give her immediate attention to the matter. [6] On 8 September 2005, Mr J H van der Merwe MP, the IFP Chief Whip (and incidentally the respondents' attorney in this matter), directed a question in Parliament to the President with regard to the progress that had been made. This question elicited a reply which contained the following: '[T]he applications referred to by the hon member have not yet been sent to the President, and are still with the Department of Justice. The matter has unfortunately been delayed in the Department of Justice, which has received more than 1 000 applications for pardons for crimes allegedly committed for political reasons. We've urged the Minister of Justice to ensure that the processing of these and other applications is expedited. We will consider the appropriateness of a presidential pardon for each case once the Ministry and the Department of Justice have completed the processing of the applications, and verified the facts of each case, understanding very well the prerogatives granted to the President of the Republic by section 84(2)(j) of the Constitution, to which the hon member referred.' [7] The President in the course of his reply explained some of the difficulties which had been encountered in dealing with the applications. Amongst other things he said that the Ministry and the Department of Justice had to ensure that their recommendations to the President were 'based on the application of a set of criteria that are consistent with the spirit that inspired the establishment of the TRC. Apart from anything else', he continued, 'such criteria would help us to avoid ad hoc and arbitrary presidential decisions that would undermine the important principle of equality of treatment of all our citizens and the necessary transparency in this regard.' [8] The President also said that the applications were being processed by the Ministry and the department and added that 'at the appropriate moment we shall come back to the people who have applied for these pardons to indicate what decision should have been taken.' [9] Later the same day, in the discussion in the National Assembly, the President said that he would speak to the Minister and her deputy so that they could interact with Mr van der Merwe and with Dr S E M Pheko MP, of the Pan Africanist Congress (who had also raised the matter), and could indicate what was being done and the particular problems they were experiencing with regard to the processing of the applications. [10] Eight months later, on 19 May 2006, Mr van der Merwe raised the matter again in the National Assembly. He spoke of what he called the 'unbelievable lack of action by the hon Minister'. After referring to the 384 applications for pardon which the IFP had submitted towards the end of 2003, which he said had fallen on deaf ears, he continued: 'I wish to give hon members an idea of the unbelievable and almost impossible uphill battles we have fought to seek justice and to ensure that the Constitution is respected and that these applications are processed. For almost three years now, we have written letters to the hon Minister and the hon President pleading with them to attend to these applications. Where did it get us? Nowhere. Absolutely nowhere! The hon Minister ignored us. Twice in this very House we called this neglect a violation of human rights. Our very serious accusation and the plight of 400 prisoners were simply ignored . . .' [11] In her reply to Mr van der Merwe's speech, the Minister pointed out that there were no guidelines for dealing with these applications and said that the President had decided 'to take the issue to all the parties.' [12] She continued: 'As the Department of Justice and Constitutional Development, we are trying to get proposals, which we will table before the cabinet; an undertaking which is not easy but rather difficult. We acknowledge that there are problems with regard to the existing guidelines as they state that when an individual applies for a presidential amnesty, the issue will be treated separately. The President actually said that people seeking political amnesty should appear before the TRC. And since they did not appear before the TRC, they are now faced with this issue. Hence it is important to ensure that the guidelines are correct. It should be noted that this undertaking is not an easy one and it did not even start in 2003. Honestly speaking, this matter forms part of the outstanding issues. It was indicated during CODESA that there were still problems that needed our attention. We should put our heads together, apply our minds and throw some ideas around as to how we are going to move forward. We will bring the President's response to Parliament soon. It will be taken to the cabinet, as I will not be the first person to receive it.' [13] In October 2006, in reply to a question on the matter in the National Council of Provinces, the Minister said: 'There are 1107 applications for pardons which were received by the Department from prisoners who allege that their offences are politically motivated. These include the submission by the IFP in respect of 385 of their members. These applications are complex in nature: The sentences that the applicants are serving vary from 12 years to death. With respect to the latter, a separate process was completed to convert all death sentences to alternative sentences, in most cases, life sentences. The applicants also indicate in their applications that they did not apply for amnesty with the TRC because they either did not know that they could do so and when they did find out, it was too late as they were out of time, or that the TRC process was not supported by their political parties. In some cases the offences were allegedly committed after the cut-off date of the TRC process itself. Due to the complexity of the applications I have deemed it necessary to approach Cabinet to give guidance on the matter.' [14] Thereafter up to the date when the first respondent deposed to the founding affidavit, viz 28 May 2007, no indication of whatsoever nature had been given by either the Minister or the President as to whether any progress had been made regarding the applications for presidential pardon brought by the respondents, and, if so, what that progress was. [15] The main answering affidavit filed on behalf of the Minister was deposed to by Mr Menzi Simelane, the director general of the department. [16] In his affidavit Mr Simelane set out the legal framework informing the subject matter of these proceedings, and emphasised the need for a new approach. He stated that the Minister was currently engaged in a process involving what he called the construction of an appropriate framework for considering applications for pardon in respect of politically motivated offences. [17] Mr Simelane listed the following questions which were included, as he put it, in the matters that the Minister 'would like to infuse into the current debate concerning politically motivated pardons': '1. Post 1994 and given the TRC process, who can be regarded as an offender incarcerated because of having committed a politically motivated offence or one associated with a political objective? 2. What would be considered to be the most appropriate cut off date for a definition of an offence that was politically motivated or associated with a political objective? 3. What is a politically motivated offence, given the advent of democracy in 1994? 4. Are there circumstances under which an offence committed in 2000 or 2007 could be considered to be politically motivated or associated with a political objective? 5. Was the post 1994 violent conflict that occurred in KwaZulu Natal and the East Rand political in nature? All of it? 6. Should rape be considered as an offence committed with a political motive or associated with a political objective? If so, under what circumstances? 7. Would offences committed by former members of the security forces be considered alongside those committed with a political objective? 8. Who is to verify the particulars furnished in the applications and how is that verification to be done? 9. Should victims of the crimes committed be accommodated and if so in what manner? 10. What would be the most appropriate and effective manner of dealing with a large number of applications?' [18] He then provided a précis of the individual applications, set out the department's stance and responded to the averments in the founding affidavit. [19] In the section dealing with the construction of an appropriate framework, Mr Simelane said the following: '[O]ther than internal operational procedures that assist the Department in the assessment and evaluation of applications for the pardon of minor offences, dealt with below, there is no established process for assessing and evaluating applications for the pardon of more serious offences, and in particular those motivated by way of a political objective.' [20] He proceeded to refer to pardons granted by President Mbeki on 6 May 2002 to 33 African National Congress and Pan Africanist Congress members in the Eastern Cape who had all, wholly or in part unsuccessfully, gone through the amnesty process of the TRC. Although it appears that Dr Maduna, the then Minister, had, as it was put in a later explanatory note to the President, 'argued the cases of some [of the 33 and contended] . . . that pardon should not be granted to them', he later (after some of those covered by his original letter had been released from prison) reconsidered the matter and recommended that the 33 should be granted pardons. He motivated this advice as follows: 'He [ie, Dr Maduna] is of the view that public opinion, inside as well as outside politics, requires the 33 to be pardoned in terms of s84(2)(j) of the Constitution of the Republic of South Africa, 1996. Accordingly he recommends that the 33 persons on the list be pardoned in respect of the convictions for which they are currently serving or for which they have already served a term of imprisonment. All the information regarding their conviction and sentences, however, [is] not available at this stage. Every effort will be made to submit [it] to the President as soon as possible.' [21] As has been said, the President accepted this advice and pardoned the 33 offenders concerned. [22] Mr Simelane stated that there had been 'much debate and a divergence of views, both within and outside of Parliament, with regard to how best to deal with these applications, given the termination of the indemnity and then the TRC processes [ie, the processes under the Indemnity Act of 1990 and the Promotion of National Unity and Reconciliation Act 34 of 1995].' According to Mr Simelane, the Minister had directed her department to look into ways in which a framework for the evaluation of the applications could be formulated. He expressed the considered view 'that the draft framework would be finalised inside a period of approximately six months [ie, from 27 July 2007, the date he deposed to his affidavit].' [23] In dealing with the averments in the founding affidavit he enjoined the first respondent 'to furnish full and further particulars of the circumstances of each of the offences that were committed in respect of the 383 applicants for whom he purports to act'. He urged the respondents 'to exercise greater tolerance, patience and deference to the process necessary to formulate an appropriate framework'. He continued: The question of pardon is a discretionary exercise of mercy and does not come as a right. None of the applicants can claim prejudice arising out of their incarceration. The incarcerations were a consequence of due process.' [24] He admitted that the practice was to have the applications processed by the department but denied that that conduct constitutes 'administrative action' within the meaning of the Promotion of Administrative Justice Act 3 of 2000 (commonly known as 'PAJA'). [25] In his replying affidavit the first respondent states that the department must have been aware as long ago as 2000 of the deficiencies in its own internal processes and internal criteria as regards the assessment of applications with a 'political element'. He also stated that, if there is no room within the current parameters used by the department to make a positive recommendation regarding any of the applications, this position is due to the lack of action on the part of the department itself. He contended further that the Minister gave no acceptable reason for the delay in doing what he called the 'necessary' since 2000. [26] He also stated that all that he called for was that the precedent set in 2000 by Dr Maduna (and subsequently by President Mbeki) in the case of the 33 persons who were granted presidential pardon, be followed. No reasonable explanation, he submitted, was forthcoming from the M inister as to why this precedent should not be followed. [27] Before the judgment of the court a quo is summarised, it is appropriate to set out the relevant provisions of the Constitution. [28] Section 84, which deals with the powers and functions of the President, reads as follows: '84 (1) . . . (2) The President is responsible for – . . . (j) pardoning or reprieving offenders and remitting any fines, penalties or forfeitures . . . ' [29] Section 85 deals with the executive authority of the Republic. It provides: '85 (1) The executive authority of the Republic is vested in the President. (2) The President exercises the executive authority, together with the other members of the Cabinet, by – (a) implementing national legislation except where the Constitution or an Act of Parliament provides otherwise; (b) developing and implementing national policy; (c) co-ordinating the functions of state departments and administrations; (d) preparing and initiating legislation; and (e) performing any other executive function provided for in the Constitution or in national legislation.' [30] Section 92 deals with accountability and responsibilities. It reads: '92. (1) The Deputy President and Ministers are responsible for the powers and functions of the executive assigned to them by the President. (2) Members of the Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions. (3) Members of the Cabinet must – (a) act in accordance with the Constitution; and (b) provide Parliament with full and regular reports concerning matters under their control.' [31] Section 101 deals with executive decisions. Sub-section (1) reads as follows: '101. A decision by the President must be in writing if it – (a) is taken in terms of legislation; or (b) has legal consequences.' [32] Section 237 of the Constitution provides: '237. All constitutional obligations must be performed diligently and without delay.' [33] In his judgment Seriti J referred to the fact that, in the answering affidavit filed on behalf of the Minister, it was stated that the department was processing the applications for pardon as a matter of practice. The judge considered a submission which had been advanced before him by counsel for the appellant to the effect that there was no legal duty on the Minister to process the applications for presidential pardon as the first respondent had failed to demonstrate that s 101(1) of the Constitution has been complied with. [34] He held that the President's request to the Minister to process the applications for pardon was in accordance with the law and had legal consequences. If the request of the President did not comply with the law, he pointed out, Mr Simelane 'could have said so in no uncertain terms.' His failure to do so and the fact that the department was in the process of carrying out the request of the State President justify 'the conclusion that the President's request to the Minister has legal consequences. Section 237 of the Constitution provides that all constitutional obligations must be performed diligently and without delay. When processing the applications under consideration, the Minister is exercising a public function and she is bound to perform the said function diligently and without delay.' [35] Later in his judgment he stated that, in his view, 'the processing of the applications of the [respondents] has taken an unduly long time and the Minister has failed to perform her function as required by section 237 of the Constitution.' [36] He accordingly held that the respondents had made out a case for relief and made the order summarised in para 1 above. [37] Counsel for the appellant submitted that the court a quo had erred in holding that the Minister had a constitutional obligation to process the applications for pardons. It was contended that, as the power to grant pardons vests exclusively in the President as Head of State, he has the sole discretion to determine how he exercises that power. [38] According to counsel, the practice which had developed in the department, even before the current constitutional dispensation, of the department assessing and evaluating applications for pardon and thereafter making recommendations to the President, did not create a legally enforceable obligation on the Minister to process the applications. It was submitted further that though the practice was permissible and desirable it did not, in the absence of a provision in the Constitution or in a statute, impose an obligation on the Minister. [39] Counsel for the appellant also argued that Seriti J had erred in finding that the President had requested the Minister to process the applications as there was no evidence to that effect. If there had been such a request, the argument proceeded, it would have had to have been in writing if it were to have any legal consequences in terms of s 101 of the Constitution. Even if there had been such a request, no rights or interests of the respondents would have been affected thereby. Moreover, such a request and the resultant compliance therewith would not amount to administrative action which is actionable in terms of PAJA. [40] In counsel's submission, Seriti J had also erred in finding that, in processing the applications for pardons, the appellant's department was acting in terms of s 85(2) or s 92(3) of the Constitution. It was submitted that the executive powers or functions of the National Executive referred to in s 85(2)(e) of the Constitution are excluded from the definition of 'administrative action' in PAJA and that what the Minister or her department was doing was not the exercise of an executive function provided for in the Constitution or in national legislation as set out in s 85(2)(e) of the Constitution. Furthermore, so it was argued, s 92(3) of the Constitution is of no application. [41] In my opinion, counsel for the appellant's submissions cannot be accepted. I think that Seriti J was clearly correct in coming to the conclusion that the President's request to the Minister to process the applications was in accordance with the law and has legal consequences. [42] In my view the Minister had a constitutional obligation to process and to do what was necessary to enable the President to exercise the powers conferred upon him by s 84(2)(j) of the Constitution. A prisoner clearly has the right to apply for a pardon and someone has the obligation to give an answer. The fact that the President performs Head of State functions in terms of s 84(2) of the Constitution in pardoning offenders does not mean that executive functions are not performed beforehand. It is not implied in the Constitution that the President himself or through the office of the Presidency must perform all preparatory steps before the power to decide whether to grant a pardon or not is exercised. These steps (which may be called preliminary executive functions because they are steps required for laying the foundation for the ultimate decision to be made by the President) by clear implication fall within the ambit of the normal executive functions conferred by the Constitution on the executive and are therefore covered by s 85(2)(e) of the Constitution. In cases involving applications for pardon the appropriate department to perform these functions is the department. The Minister's failure to perform these functions is a breach of s 92(3)(a) of the Constitution. (It follows from this conclusion that the respondents were not obliged to make out a case under PAJA in order to succeed and, accordingly, arguments based on PAJA do not have to be considered.) [43] I am accordingly satisfied that Seriti J was right in holding that the Minister was obliged to process the applications and to do what was required to enable the President to exercise the powers conferred on him by s 84(2)(j) of the Constitution in an informed way and that that obligation was a constitutional one. [44] It was not contended before us – nor could it have been so contended with any cogency – that the Minister, if she was so obliged, had performed her duties in this regard with due diligence and without delay. Nor was it argued that the period for compliance contained in para 1 of the order of the court a quo could be faulted. The following order is made: [45] The appeal is dismissed with costs, including those occasioned by the employment of two counsel. ……………. IG FARLAM JUDGE OF APPEAL APPEARANCES: FOR APPELLANT: M T K MOERANE SC L GCABASHE Instructed by STATE ATTORNEY PRETORIA STATE ATTORENY BLOEMFONTEIN FOR RESPONDENT: T J KRUGER SC C VAN JAARSVELD Instructed by JH VAN DER MERWE INCORPORATED PRETORIA BEN VAN DER MERWE ATTORNEYS BLOEMFONTEIN

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM: The Registrar, Supreme Court of Appeal DATE: 30 MARCH 2009 STATUS: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. The Supreme Court of Appeal today ruled that the Minister of Justice and Constitutional Development is under a constitutional obligation to process applications for pardon before the President considers whether to exercise his power under section 84(2)(j) of the Constitution. This was held in an appeal brought by the Minister against an order granted by Mr Justice Seriti in the Pretoria High Court in which he directed the Minster's predecessor to do all things necessary to enable the President to consider 384 applications for pardon submitted on behalf of members of the Inkatha Freedom Party during the period September to October 2003. Mr Justice Seriti also declared that the previous Minister had failed to exercise with due diligence and without delay her constitutional obligation to process the applications and to do all that was necessary to enable the President to exercise the powers conferred on him in terms of the Constitution to grant pardons. The Supreme Court of Appeal upheld the judgment of Mr Justice Seriti. It held that the Minister was under a constitutional obligation to process the applications before they were considered by the President and that the Minister had not performed her duties in this regard with due diligence and without delay.

3506

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 1032/2019 In the matter between: UNITED DEMOCRATIC MOVEMENT FIRST APPELLANT BANTU HOLOMISA SECOND APPELLANT and LEBASHE INVESTMENT GROUP (PTY) LTD FIRST RESPONDENT HARITH GENERAL PARTNERS (PTY) LTD SECOND RESPONDENT HARITH FUND MANAGERS (PTY) LTD THIRD RESPONDENT WARREN GREGORY WHEATLEY FOURTH RESPONDENT TSHEPO DUAN MAHLOELE FIFTH RESPONDENT PHILLIP JABULANI MOLEKETI SIXTH RESPONDENT Neutral citation: United Democratic Movement and Another v Lebashe Investment Group (Pty) Ltd and Others (1032/2019) [2021] ZASCA 4 (13 January 2021) Coram: CACHALIA, MBHA, MOLEMELA and MAKGOKA JJA and SUTHERLAND AJA Heard: 16 November 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, and by publication on the Supreme Court of Appeal website and release to SAFLII. The time and date for hand down is deemed to be 09h45 on 13 January 2021. Summary: Interim interdict – appealability – whether there is an absence of irreparable harm – per majority judgment: interests of justice do not require that appeal be entertained - per minority judgments: interests of justice do require appeal to be entertained. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Tlhapi J sitting as court of first instance): 1. The appeal is struck from the roll. 2. The appellants, jointly and severally, shall bear the respondents’ costs including the costs of two counsel. JUDGMENT Sutherland AJA (Cachalia and Mbha JJA concurring): Introduction [1] When this appeal was heard on 16 November 2020, the matter was struck off the roll. The reason was that the order of the Gauteng Division of the High Court, Pretoria (the high court) against which the appeal lay, was not appealable, notwithstanding leave to appeal having been granted by the high court. The order was an interim interdict pending an action to be instituted by the respondents. The crux of the controversy is whether the order was ‘final in effect’ and was therefore, indeed, appealable, or, even if its true character was interim, the interests of justice warranted an appeal against it to be entertained. [2] The circumstances giving rise to the litigation have their origin in a letter sent on 26 June 2018 to the President of the Republic by the appellants, the United Democratic Movement (UDM), a political party, and its leader Mr Bantu Holomisa. The letter contained allegations that the several respondents,1 who are in business, had conducted themselves unlawfully in various ways in relation to the Public Investment Corporation (PIC). A request was made to the President to cause these allegations against the respondents to be investigated. The letter was also published to the world on the UDM website. The respondents contend the remarks were defamatory. As a result, the respondents sought interim relief pending an action for damages for the alleged defamation. 1 The first to sixth respondents are: Lebashe Investment Group (Pty) Ltd, Harith General Partners (Pty) Ltd, Harith Fund Managers (Pty) Ltd, Warren Gregory Wheatley, Tshepo Duan Mahloele and Phillip Jabulani Molekethi. The orders a quo [3] On 16 July 2018, Tlhapi J, in the high court granted an interdict against the appellants forbidding the repetition of certain remarks they had made publicly about the several respondents.2 The order was in these terms: ‘1. Pending the determination of an action to be instituted by the applicants against the respondents for damages for defamation and injuria, and the relief ancillary thereto (“the action”), the respondents shall: 1.1 forthwith cease and desist from making or repeating any allegations (whether orally or in writing) against the applicants (or any of them), and/or from defaming or injuring them in their dignity, in any further publications or broadcasts in any form, including but not limited to internet posts, articles, letters, media interviews, “Twitter” and other social media posts and the like, which are the same as, or similar to, or which negatively reflect upon the applicants (or any of them) arising from or based on, any of the allegations or statements appearing in the letter dated 26 June 2018 addressed by the second respondent to the President of the Republic of South Africa, Mr C M Ramaphosa (a copy of which is annexed to the founding affidavit therein and marked “WGW4”, referred to herein as “the letter”). 1.2 within three (3) hours of granting of this order, remove and delete the letter and, in so far as it lies within their power, any posts regarding the letter (or any of its contents) or responses thereto, from the first respondent’s website (www.udm.org.za), from the first respondent’s Twitter account (@UDmRevolution), and from the second respondent’s Twitter account (@BantuHolomisa); 2. Unless the applicants institute the action within one month of the date of this order, such order shall lapse and be of no further force or effect. 3. . . . 4. The respondents are ordered to pay the costs of this application on the scale as between party and party . . . including the costs attendant upon the employment of two counsel.’ 2 The proper approach to an order of this nature was considered in Hix Networking Technologies CC v System Publishers (Pty) Ltd and Another 1997 (1) SA 391 (A) at 397H-399F. The court a quo adopted this approach see Lebashe Investment Group (Pty) Ltd and Others v United Democratic Movement and Another (unreported) (case no 46074/18) paras 41-45. [4] Thirteen months later, on 8 August 2019 Tlhapi J heard the application for leave to appeal and on 26 August 2019 granted leave to appeal to this Court. The rationale for the order was expressed thus: ‘I am not persuaded that the applicants would have prospects of success in terms of section 17(1)(a)(i) of the [Superior Courts] Act or that section 96 of the Constitution was applicable to Mr Moleketi after he resigned as Deputy Minister and chairperson of the PIC despite Mr Mpofu’s contention that an incorrect authority had been cited by Mr Berger. I am [sic] that a conflict of interest would not be applicable to Mr Mahloele. Furthermore, I am also of the view that the privilege afforded by section 58 of the Constitution is confined to National Assembly and not beyond it. Despite the above view, Mr Mpofu and Mr Nguckaitobi made compelling submissions why this interim order was appealable and why leave to appeal should be given in terms of section 17(1)(a)(ii) of the Act. The general rule as correctly submitted by Mr Berger was that an interim interdict was not appealable for reasons in the authorities he relied upon, in Cipla supra at paragraph [19] Rogers AJA does remark that such orders are not “usually appealable” which probably makes room for appealability in certain exceptional circumstances, and that for his reasons such consideration did not arise in that matter. In this matter the question is, is it in the interest of justice and do special circumstances exist for a court of appeal to determine whether the interim order has an element of finality which would prejudice the applicants (a political party and Mr Holomisa leader of the UDM) or does the interim order have the potential to prejudice them by preventing them to exercise their rights as protected by sections 16; 19 and 55 of the Constitution. Mr Mpofu reiterated the view that Mr Holomisa’s letter to the President was not defamatory and, he contended that the interim order had been prejudicial to the applicants because it had curtailed the Constitutional right as guaranteed by sections relied upon to engage in political activity. It was in the interest of justice to have certainty on the protection afforded by the Constitution to political parties and members of parliament. On the issue of appealability he relied on Tshwane City v Afriforum 2016 (6) SA 279 (CC) at paragraph [40] where Chief Justice Mogoeng stated: “The common law test for appealability has since been denuded of its somewhat inflexible nature. Unsurprisingly so because the common law is not on par with but subservient to the supreme law that prescribes the interest of justice as the only requirement to be met for the grant of leave to appeal.” The Chief Justice cited with approval the principle as set out by Moseneke DCJ in National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (6) SA 233 (CC). These authorities establish that the traditional principle on appealability of interim and interlocutory orders at common law has in certain circumstances evolved and that where the interests of justice demand, leave to appeal should be considered. Although this was stated in matters before the Constitutional Court, on issues of appeal before that court, I see no reason why considerations in the interests of justice should not apply to the lower courts when determining the appealability of an interim order, which is said affect the rights of parties such as the applicants to engage in political activity. Leave in these circumstances should be granted and I am of the view that the issues raised are of importance and for purpose of certainty the matter should be considered by the Supreme Court of Appeal.’ (Emphasis added.) [5] An application for leave to appeal is regulated by s 17(1) of the Superior Courts Act 10 of 2013 which provides: ‘(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that – (a) (i) the appeal would have a reasonable prospect of success; or (ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration; (b) the decision sought on appeal does not fall within the ambit of section 16(2)(a); and (c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties.’ [6] We were told from the bar that the action for defamation has since been duly instituted and that the pleadings in that action have closed. The parties are engaged with the further preparatory steps which will entitle them to apply for a trial date. The law on the appealability of an order of court [7] What is required to render an order appealable is well trodden judicial turf. It is to the law on appealability in this regard we now turn. [8] Perhaps the definitive pronouncement is that in City of Tshwane Metropolitan Municipality v Afriforum and Another.3 In that matter the question was whether an interim order granted in the high court to prevent the city council from changing street names pending a review of its decision to do so, was appealable. The interim order implicated an inhibiting of an organ of state from fulfilling its statutory functions and this factor was crucial in determining, on the facts, whether the interests of justice required an appeal. Nevertheless, the Chief Justice’s remarks on appealability and the criterion of the interests of justice are of wider import: ‘The appealability of interim orders in terms of the common law depends on whether they are final in effect. . . The common law test for appealability has since been denuded of its somewhat inflexible nature. Unsurprisingly so because the common law is not on par with but subservient to the supreme law that prescribes the interests of justice as the only requirement to be met for the grant of leave to appeal. Unlike before, appealability no longer depends largely on whether the interim order appealed against has final effect or is dispositive of a substantial portion of the relief claimed in the main application. All this is now subsumed under the constitutional interests of justice standard. The over-arching role of interests of justice considerations has relativised the final effect of the order or the disposition of the substantial portion of what is pending before the review court, in determining appealability. The principle was set out in OUTA [National Treasury and Others v Opposition to Urban Tolling Alliance and Others [2012] ZACC 18; 2012 (6) SA 223 (CC); 2012 (11) BCLR 1148 (CC) para 50], by Moseneke DCJ in these terms: “This court has granted leave to appeal in relation to interim orders before. It has made it clear that the operative standard is the “interests of justice”. To that end, it must have regard to and weigh 3 City of Tshwane Metropolitan Municipality v Afriforum and Another [2016] ZACC 19; 2016 (9) BCLR 1133 (CC); 2016 (6) SA 279 (CC). carefully all germane circumstances. Whether an interim order has a final effect or disposes of a substantial portion of the relief sought in a pending review is a relevant and important consideration. Yet, it is not the only or always decisive consideration. It is just as important to assess whether the temporary restraining order has an immediate and substantial effect, including whether the harm that flows from it is serious, immediate, ongoing and irreparable.” . . . What the role of interests of justice is in this kind of application [ie interdicting an organ of state from performing its functions] again entails the need to ensure that form never trumps any approach that would advance the interests of justice. If appealability or the grant of leave to appeal would best serve the interests of justice, then the appeal should be proceeded with no matter what the pre-Constitution common law impediments might suggest. . . Consequently, although the final effect of the interim order or the disposition of a substantial portion of issues in the main application are not irrelevant to the determination of appealability and the grant of leave, they are in terms of our constitutional jurisprudence hardly ever determinative of appealability or leave. . . .’ [9] Earlier, in International Trade Administration Commission v SCAW South Africa (Pty) Ltd4 the Constitutional Court had dealt with a dispute concerning the Minister of Trade and Industry promulgating regulations affecting anti-dumping duties. The appellant had composed recommendations to be submitted to the Minister to abolish the restraints. The respondent, a manufacturer, obtained an interim order interdicting the submission of the recommendations. Several considerations led to the successful appeal. In the course of addressing the controversy about whether the order was appealable, Moseneke DCJ remarked:5 ‘. . . the jurisprudence of the Supreme Court of Appeal on whether a “judgment or order” is appealable remains an important consideration in assessing where the interests of justice lie. An authoritative restatement of the jurisprudence is to be found in Zweni v Minister of Law and Order 4 International Trade Administration Commission v SCAW South Africa (Pty) Ltd [2010] ZACC 6; 2010 (5) BCLR 457 (CC); 2012 (4) SA 618 (CC). 5 SCAW fn 4 paras 50-54. which has laid down that the decision must be final in effect and not open to alteration by the court of first instance; it must be definitive of the rights of the parties; and lastly, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings. On these general principles the Supreme Court of Appeal has often held that the grant of an interim interdict is not susceptible to an appeal. The “policy considerations” that underlie these principles are self-evident. Courts are loath to encourage wasteful use of judicial resources and of legal costs by allowing appeals against interim orders that have no final effect and that are susceptible to reconsideration by a court a quo when final relief is determined. Also allowing appeals at an interlocutory stage would lead to piecemeal adjudication and delay the final determination of disputes. After Zweni, the Supreme Court of Appeal has recognised that the general rule against piecemeal appeals could conflict with the interests of justice in a particular case. Howie P, writing for a unanimous court in S v Western Areas, was required to decide, in an application for leave to appeal in a criminal matter, whether the dismissal of an objection to an indictment was appealable in terms of s 21(1) of the Supreme Court Act. After surveying its case law on the appealability of a “judgment or order” in civil and criminal cases and after referring to the interests of justice test set by this Court in Khumalo v Holomisa, he concluded that the general principles enunciated in Zweni are neither exhaustive nor cast in stone. He further held that: “(I)t would accord with the obligation imposed by s 39(2) of the Constitution to construe the word “decision” in s 21(1) of the Supreme Court Act to include a judicial pronouncement in criminal proceedings that is not appealable on the Zweni test but one which the interests of justice require should nevertheless be subject to an appeal before termination of such proceedings. The scope which this extended meaning could have in civil proceedings is unnecessary to decide. It need hardly be said that what the interests of justice require depends on the facts of each particular case.” More recently, in Philani-Ma-Afrika v Mailula, the Supreme Court of Appeal had to decide whether an order of the high court which puts an eviction order into operation pending an appeal was appealable. In a unanimous judgment by Farlam JA, the Court held that the execution order was susceptible to appeal. It reasoned that it is clear from cases such as S v Western Areas that “what is of paramount importance in deciding whether a judgment is appealable is the interests of justice.” As we have seen, the Supreme Court of Appeal has adapted the general principles on the appealability of interim orders, in my respectful view, correctly so, to accord with the equitable and the more context-sensitive standard of the interests of justice favoured by our Constitution. In any event, the Zweni requirements on when a decision may be appealed against were never without qualification. For instance, it has been correctly held that in determining whether an interim order may be appealed against regard must be had to the effect of the order rather than its mere appellation or form. In Metlika Trading Ltd and Others v Commissioner, South African Revenue Service the Court held, correctly so, that where an interim order is intended to have an immediate effect and will not be reconsidered on the same facts in the main proceedings it will generally be final in effect. Lastly, when we decide what is in the interests of justice, we will have to keep in mind what this Court said in Machele and Others v Mailula and Others. In that case, the Court had to decide whether to grant leave to appeal against an order of the High Court authorising execution of an eviction order pending an appeal. In granting leave to appeal, Skweyiya J, relying on what this Court held in TAC (1), reaffirmed the importance of “irreparable harm” as a factor in assessing whether to hear an appeal against an interim order, albeit an order of execution: “The primary consideration in determining whether it is in the interests of justice for a litigant to be granted leave to appeal against an interim order of execution is, therefore, whether irreparable harm would result if leave to appeal is not granted”.’ (Emphasis added.) Analysis [10] Applying these norms to the facts relevant to the order in this matter, it may be asked how might the interests of justice be thwarted if the interim order stands until trial and, potentially, is then held to have been inappropriate because either there was no defamation after all, or that the appellants conduct is held to be justifiable? [11] Whether or not a cogent debate can be conducted about the character of the allegations being defamatory, is at this stage, an open question. The very point of the letter could not avoid being contentious if it was to serve any useful purpose. Indeed, the appellants’ case is that the purpose was to report serious unlawful conduct and demand a public enquiry. Whether or not the contentious remarks in the letter are indeed defamatory of the respondents is a matter to be decided by the trial court in due course, and of course, were they to be held by that court, to be defamatory, the question of whether or not the appellants were justified in making them will be decided. The appellants advance a thesis, which they contend, satisfies the legal requirements for justifiability. However, neither in the court a quo, nor in this Court, in these proceedings, was it, and is it, necessary to express a firm view about whether the allegations are indeed defamatory and whether the appellants have a proper justification for making them. [12] Before Tlhapi J, a quo, the question to be decided was simply whether, prima facie, the appellants’ published remarks were defamatory and whether an interim interdict inhibiting the repetition of those remarks pending a trial was appropriate. The order granted cannot plausibly be interpreted as having ‘final effect’ in any accepted sense of that concept. In Zweni v Minister of Law and Order, Harms JA held: ‘A “judgment or order” is a decision which, as a general principle, has three attributes, first, the decision must be final in effect and not susceptible of alteration by the Court of first instance; second, it must be definitive of the rights of the parties; and, third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings (Van Streepen & Germs (Pty) Ltd case supra at 586I-587B; Marsay v Dilley 1992 (3) SA 944 (A) at 962C-F). The second is the same as the oft-stated requirement that a decision, in order to qualify as a judgment or order, must grant definite and distinct relief (Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another 1992 (4) SA 202 (A) at 214D-G).’6 6 Zweni v Minister of Law and Order of the Republic of South Africa [1993] 1 All SA 365 (A); 1993 (1) SA 523 (A) at 532H-532A. [13] The decision in Tau v Mashaba7 was invoked in support of the contention that the order of Tlhapi J is appealable. That contention is misplaced. Rather, the order of Thlapi J can be contrasted with the order granted in Tau v Mashaba. The relevant facts were that Mr Tau, a member of the African National Congress (ANC) and a former Mayor of Johannesburg, in a public meeting, made disparaging remarks about Mr Mashaba, a member of the rival Democratic Alliance who was the then serving Mayor and Mr Tau’s immediate successor. Mr Tau made remarks, among others, that Mr Mashaba had indecently accused women in the Johannesburg city hierarchy of prostituting themselves to get their jobs from the ANC and also that Mr Mashaba, a Black man, wished that he was not Black. [14] Mr Mashaba was aggrieved and sued for an order in these terms: ‘Pending the institution of an action for defamation and damages, which must be instituted against the first respondent within 60 days of the granting of the order herein: 1. Ordering the respondents: 1.1 forthwith to retract the offending remarks; 1.2 to refrain from repeating such and/or similar remarks concerning the applicant in future; 1.3 to issue an unconditional apology to the applicant framed along agreed terms; alternatively terms to be imposed by the court; 1.4 to ensure the widest possible publication of the retraction and/or apology envisaged in 1.1 to 1.3 above.’8 [15] An order as prayed was not made. Instead, an order was made as follows: ‘(a) It is declared that the statement made by the 1st respondent on 28th August 2016 is defamatory of the applicant. 7 Tau v Mashaba [2020] ZASCA 26; 2020 (5) SA 135 (SCA). 8 Tau v Mashaba fn 7 para 4. (b) The 1st respondent is interdicted and restrained from repeating the statement, or statements to the same effect. (c) All other issues relating to relief arising in the present application are deferred for decision in the pending action instituted by the applicant against the 1st respondent for damages for defamation. (d) The 1st respondent is directed to pay the costs of the application, including the costs of two counsel.’9 [16] Plainly, the declarator in (a) and the interdict in (b) are undoubtedly final in effect, unlike the order made by Tlhapi J in this matter. The order in Tau v Mashaba was therefore unquestionably appealable. Moreover, the question of appealability was not argued, and thus the decision is unhelpful to resolve the controversy in this case. [17] As regards other characteristics of the order granted by Tlhapi J, it is notable that the effect of the high court’s order prevents merely a repeated publication of the allegations for a time, but not permanently. Significantly, the contentious remarks were already in the public domain. The order, for this reason, cannot be described as a ‘gagging order’. The appellants were successful in getting their message out to the public. Moreover, although only of marginal relevance, the President responded positively to the letter and caused the issues raised in it to be examined by the commission of enquiry, chaired by retired Justice Mpati, which had already been appointed to investigate other supposedly undesirable activities concerning the PIC. The treatment by that commission of the allegations is not information on record before this Court. 9 Tau v Mashaba fn 7 para 12. [18] The rationale for the grant of leave to appeal accepted by the court a quo, as cited above, was again embraced by the appellants in argument before this Court.10 It was contended that the interests of justice required an appeal against the order to be entertained. The thesis advanced was twofold. First, it was alleged that that certain constitutional rights were infringed by the order. These were the rights of freedom of expression in s 16(1),11 and political rights as framed in s 19(1)(c)12 ‘to campaign for a political party or cause’. Second, the lengthy elapse of time – 27 months which had passed between the grant of the interim interdict and the hearing before this Court – demonstrated, so the argument ran, a type of ‘final effect’ because during this period they could not ‘advocate’ for the cause of anti-corruption with reference to the respondents’ conduct. The two contentions are grounded on the same notion, ie, that political actors whose very function it is to engage in public discourse are severely prejudiced by even an interim order which temporarily silences them while the legitimacy and lawfulness of their controversial utterances are the subject matter of litigation. [19] Therefore, the sting in the argument is that a reason exists, or ought to exist, which would exempt a class of persons, being political actors, from being subjected to interim orders inhibiting the freedom to express speech of their own choosing, albeit temporarily, during periods while the legitimacy and lawfulness of that speech 10 The appellants did not address the question of appealability in their heads of arguments. The respondents addressed the issue at length. Notwithstanding that, the appellants chose not to respond by filing supplementary heads. Mr Ngcukaitobi addressed the court, orally, on the question. 11 ‘Freedom of expression 16. (1) Everyone has the right to freedom of expression, which includes – (a) freedom of the press and other media; (b) freedom to receive or impart information or ideas.’ 12 ‘Political rights 19. (1) Every citizen is free to make political choices, which includes the right – (a) to form a political party; (b) to participate in the activities of, or recruit members for, a political party; and (c) to campaign for a political party or cause.’ is being tested. The essence of this thesis is that political actors are in a special class subject to rules different from the rest of the population. [20] It may be supposed that this peculiar status might conceivably be upheld by a court in trial proceedings determining final relief, where the issue may be explored in full, the myriad consequences examined, and the appropriate policy choices made to develop the law and nourish democratic discourse. However, the proper approach to delve into such questions is not by appealing against an interim order. Were an appeal against the interim order to be entertained on such grounds, the findings would unavoidably pre-empt the very enquiry that the trial court is required to examine: ie, whether the appellants, being political actors, were justified in their conduct. [21] The reliance on the systemic delays in the litigation process in South African courts is, if not on principle, certainly on these facts, misplaced.13 The fact that 27 months has elapsed since the interdict was granted, and the trial had yet to be set down is not alluded to in the papers and only sketchily alluded to in argument. A grim picture was drawn by the suggestion in argument, not on affidavit, that the lead- time to get a trial date in the high court was expected to be not less than a year. Therefore, it was argued that for an extensive period, the appellants could not publicly canvass their views nor disseminate information they believed was germane to the allegations of unlawfulness by the respondents. This outcome was supposedly at odds with the constitutional guarantees mentioned above. The argument is untenable. What little is known of the facts, points at the parties having leisurely 13 See: in regard to a measure of intrinsic prejudice in the effect of an interim interdict not being ‘irretrievable’ in all cases: Cronshaw and Another v Coin Security Group (Pty) Ltd [1996] 2 All SA 435 (A); 1996 (3) SA 686 (SCA) at 690G- 691D. plodded on over the 27 months without any appetite for zeal or expedition. In the absence of proper evidence, the systemic delay argument is stillborn. [22] It was suggested in argument on behalf of the respondents that it was open to the appellants, if they could contrive some serious harm caused by being subjected to the interim interdict that they were entitled to invoke s 18(2) and s 18(3) of the Superior Courts Act, to apply to have the order suspended. It is indeed correct that an obvious remedy for a litigant who believes it is faced with irreparable harm in having to comply with an interim order, is to invoke s 18(3).14 No answer to this proposition was forthcoming. Moreover, to the extent that the complaint of the appellants is that time forfeited cannot be revived, the proposition has consistently been rejected as invalid.15 [23] The appellants are in addition not denied the opportunity of repeating the allegations in Parliament because s 58(1)(a) of the Constitution secures a right to do 14 ‘Suspension of decision pending appeal 18. (1) Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal. (2) Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal. (3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders. (4) If a court orders otherwise, as contemplated in subsection (1) – (i) the court must immediately record its reasons for doing so; (ii) the aggrieved party has an automatic right of appeal to the next highest court; (iii) the court hearing such an appeal must deal with it as a matter of extreme urgency; and (iv) such order will be automatically suspended, pending the outcome of such appeal. (5) For the purposes of subsections (1) and (2), a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.’ 15 Cipla Agrimed (Pty) Ltd v Merck Sharp Dohme Corporation and Others [2017] ZASCA 134; [2017] 4 All SA 605 (SCA); 2018 (6) SA 440 (SCA) para 47. so with impunity.16 The counter argument offered in this regard is that s 19 confers a right to engage in advocacy outside Parliament, no less than within it. Ostensibly, this is indeed the scope of the section, but it is not a cogent answer to why a temporary silence in public discourse will be irreparable, as is required by the principles enunciated in the authorities cited. The appellants do not make out a case that the UDM is a one-issue-organisation and that it will wither if its opinions about the respondents’ alleged skulduggery are not constantly heard, while in the meantime, the two parties shuffle their way towards trial. [24] The temporary restraint under which the appellants rankle is incomparable to the circumstances illustrated in cases like Machele and Others v Mailula and Others17 and Philani-Ma-Afrika and Others v Mailula and Others.18 These two cases dealt with the threat to evict the same body of persons and potentially render them homeless. In the first case, the Constitutional Court entertained an appeal against an order of eviction which had been put into effect despite a pending appeal. The Constitutional Court suspended the execution order. Skweyiya J, after alluding to case law, concluded: ‘The primary consideration in determining whether it is in the interests of justice for a litigant to be granted leave to appeal against an interim order of execution is, therefore, whether irreparable 16 ‘Privilege 58. (1) Cabinet members, Deputy Ministers and members of the National Assembly – (a) have freedom of speech in the Assembly and in its committees, subject to its rules and orders; and (b) are not liable to civil or criminal proceedings, arrest, imprisonment or damages for – (i) anything that they have said in, produced before or submitted to the Assembly or any of its committees; or (ii) anything revealed as a result of anything that they have said in, produced before or submitted to the Assembly or any of its committees. (2) Other privileges and immunities of the National Assembly, Cabinet members and members of the Assembly may be prescribed by national legislation. . . .’ 17 Machele and Others v Mailula and Others [2009] ZACC 7; 2009 (8) BCLR 767 (CC); 2010 (2) SA 257 (CC). 18 Philani-Ma-Afrika and Others v Mailula and Others [2009] ZASCA 115; [2010] 1 All SA 459 (SCA); 2010 (2) SA 573 (SCA). harm would result if leave to appeal is not granted. The applicant would have to show that irreparable harm would result if the interim order were not to be granted. A court will have regard to the possibility of irreparable harm and the balance of convenience.’19 In this Court, in Philani-Ma-Afrika, the conclusion, similarly, was reached that in a case of eviction an appeal against an interim order was indeed appropriate in the interests of justice. The underlying rationale of irreparable harm is plainly demonstrated in such cases. [25] The endeavour of the appellants to persist in their efforts to appeal against the interim order is in truth, an attempt to entice this Court to decide issues which lie within the province of the trial court when determining final relief. The appellants can invoke no basis for irreparable harm to support its contentions. A faint passing allegation in the answering affidavit that the balance of convenience favoured the appellants because allegations of corruption ought to be ventilated adds no weight to the argument. Conclusion [26] In summary: (a) The order is interim in effect as well as in form. (b) The interests of justice do not require that an appeal be entertained: in particular: (i) the effect of the order does not cause irreparable harm; (ii) the delay in prosecuting the action has not been shown to be the result of circumstances beyond the control of the appellants, and in any event, result in irreparable harm; 19 Machele fn 17 para 24. (iii) the appellants may articulate their views, in the meantime, in Parliament with impunity; and (iv) the temporary prohibition, for the interim period, to advocate for their viewpoints on the issue, outside of Parliament, shall not result in the appellants becoming obsolescent. (c) The order is indeed not appealable. The Order [27] In the circumstances, it is ordered that: 1. The appeal is struck from the roll. 2. The appellants, jointly and severally, shall bear the respondents’ costs including the costs of two counsel. __________________________ ROLAND SUTHERLAND ACTING JUDGE OF APPEAL Molemela JA (Makgoka JA concurring) [28] I have read the judgment of my colleague, Sutherland AJA (the first judgment), and am unable to agree with either its reasoning or conclusion. The appellants’ case, on the merits, was that the respondents’ application in the court a quo did not meet all the requirements for the granting of an interim interdict. I must mention from the outset that I am mindful of the fact that the merits of the interim order were not canvassed during the hearing of the oral arguments in this matter, as the appeal was struck off the roll. I will, therefore, express no views on whether the respondent’s application met those requirements or not, but will allude to aspects that have a bearing on those requirements. [29] I am alive to the fact that this Court is not under an obligation to entertain an appeal against an otherwise unappealable order merely because leave to appeal was granted by the High Court. What needs to be borne in mind is the observation made in South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd,20 that a court has a wide general discretion in granting leave to appeal in relation to interim interdicts. Of crucial importance is that there is no absolute bar against subjecting interim orders to an appeal. In this section of the judgment, I focus on why I believe that the court a quo was correct in finding that the interests of justice called for this Court to entertain an appeal against its interim order. [30] During the exchange with the bench, counsel for the appellants was asked whether the proposition he was putting forward was that interim interdicts relating 20 South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd [1977] 4 All SA 53 (A); 1977 (3) SA 534 (A) at 545B-546C. to defamation matters should always be appealable. He submitted that whether or not an interim order is appealable was an aspect that was fact-specific. That view finds support in South African Informal Traders Forum v City of Johannesburg, 21 where the Constitutional Court held that when determining whether it is in the interests of justice to appeal an interim order, the court must have regard to and weigh carefully all relevant circumstances. The factors that are relevant, or decisive in a particular instance, will vary from case to case. To my mind, a clear example of when it would not be in the interests of justice to grant leave to appeal an interim order in defamation cases would be where such an order had been granted on an unopposed basis, for the court would not have had the benefit of being apprised of any defence that the respondent intended to raise.22 [31] It is well-established that an interim order may be appealed if the interests of justice, based on the specific facts of a particular case, so dictate. 23 That the overarching constitutional standard for appealability of an interim order is indeed whether an appeal would best serve the interests of justice was re-asserted by the Constitutional Court in City of Tshwane Metropolitan Municipality v Afriforum and Another, where that court also cautioned that ‘[i]f appealability or the grant of leave to appeal would best serve the interests of justice, then the appeal should be proceeded with no matter what the pre-Constitution common law impediments might suggest.’24 21 South African Informal Traders Forum and Others v City of Johannesburg and Others; South African National Traders Retail Association v City of Johannesburg and Others [2014] ZACC 8; 2014 (6) BCLR 726 (CC); 2014 (4) SA 371 (CC) Para 20. 22 See Hix Networking Technologies CC v System Publishers (Pty) Ltd and Another [1997] 4 All SA 675 (A); 1997 (1) SA 391 (A) at 399B-E above at 399B-E 23 Philani-Ma-Afrika and Others v Mailula and Others[2009] ZASCA 115; 2010 (2) SA 573 (SCA) para 20; South African Informal Traders Forum and Others v City of Johannesburg and Others; South African National Traders Retail Association v City of Johannesburg and Others [2014] ZACC 8; 2014 (4) SA 371 (CC); 2014 (6) BCLR 726 (CC) para 20(g). 24 City of Tshwane Metropolitan Municipality v Afriforum and Another fn 3 para 40-41. [32] It is evident from the judgment of the court a quo that it was alive to the fact that interim interdicts are not ordinarily appealable. Having considered various judgments of this Court and the Constitutional Court as well as the specific facts of this case, it, within its discretion, decided to grant the appellants leave to appeal to this Court on the basis that the interests of justice warranted that its interim order be the subject of an appeal. For the reasons that follow, I think that the court a quo correctly found that the interim order it had granted was appealable. For the same reasons, I am of the view that, against a proper exercise of the court a quo’s discretion on this aspect, it was not open to this court to second-guess the reasons advanced by the court a quo simply because it held a different view on the matter. In my opinion, it has not been shown that the court a quo’s discretion on that aspect was not judicially exercised. I consequently differ with the first judgment’s conclusion that the interests of justice do not require that an appeal be entertained. In the succeeding paragraphs I show why I believe that the court a quo, after a judicial exercise of its discretion, correctly granted leave to appeal in this matter. [33] It is trite that an interim interdict pending action is an extraordinary remedy;25 such an interdict is not granted unless all the legal requisites for that remedy have been met.26 An interdict of the nature sought in the court a quo is seldom granted. In Midi Television (Pty) Ltd t/a E-TV v Director of Public Prosecutions (Western Cape),27 this Court stated as follows: 25 Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton and Another [1973] 4 All SA 116 (A); 1973 (3) SA 685 (A) at 691C. In Economic Freedom Fighters and Others v Manuel [2020] ZASCA 172 para 88, this court re- asserted that whether any interim relief can be granted will depend on the application of the well-established principles applicable to interim interdicts. 26 See Bester v Bethge 1911 EDL 18 at 19 as cited in J Meyer Interdicts and Related Orders (1993) at 53. 27 Midi Television (Pty) Ltd t/a E-TV v Director of Public Prosecutions (Western Cape) [2007] ZASCA 56; [2007] 3 All SA 318 (SCA); 2007 (9) BCLR 958 (SCA); 2007 (5) SA 540 (SCA) para 20. ‘Where it is alleged, for example, that a publication is defamatory, but it has yet to be established that the defamation is unlawful, an award of damages is usually capable of vindicating the right to reputation if it is later found to have been infringed, and an anticipatory ban on publication will seldom be necessary for that purpose.’ [34] As regards interim interdicts sought to restrain the publication of defamatory statements, it is particularly important to note that one of the considerations to be weighed in the balance is whether the factual foundation emanating from the respondent’s affidavit discloses a defence of truth and public benefit. This Court in Hix Networking Technologies v System Publishers (Pty) Ltd and Another, 28 approved the following dictum by Greenberg J in Heilbron v Blignaut, subject to clarification:29 ‘If an injury which would give rise to a claim in law is apprehended, then I think it is clear that the person against whom the injury is about to be committed is not compelled to wait for the damage and sue afterwards for compensation, but can move the Court to prevent any damage being done to him. As he approaches the Court on motion, his facts must be clear and if there is a dispute as to whether what is about to be done is actionable, it cannot be decided on motion. The result is that if the injury which is sought to be restrained is said to be a defamation, then he is not entitled to the intervention of the Court by way of interdict, unless it is clear that the defendant has no defence. Thus if the defendant sets up that he can prove truth and public benefit, the Court is not entitled to disregard his statement on oath to that effect, because, if his statement were true, it would be a defence, and the basis of the claim for an interdict is that an actionable wrong, i.e. conduct for which there is no defence in law, is about to be committed.’ (Emphasis added.) [35] The clarification of this dictum was explained as follows in Herbal Zone (Pty) Limited v Infitech Technologies (Pty) Limited (Herbal Zone):30 28 Hix Networking Technologies fn 22 at 399B-E. 29 Heilbron v Blignaut 1931 WLD 167 at 169. 30 Herbal Zone (Pty) Limited and Others v Infitech Technologies (Pty) Limited and Others [2017] ZASCA 8; [2017] 2 All SA 347 (SCA). ‘The clarification was to point out that Greenberg J did not hold that the mere ipse dixit of a respondent would suffice to prevent a court from granting an interdict. What is required is that a sustainable foundation be laid by way of evidence that a defence such as truth and public interest or fair comment is available to be pursued by the respondent. It is not sufficient simply to state that at a trial the respondent will prove that the statements were true and made in the public interest, or some other defence to a claim for defamation, without providing a factual basis therefor.’ The dicta in these decisions were recently quoted with approval by this Court in Tau v Mashaba and Others31 in the context of an appeal against orders considered to have a final interdict even though they were granted in an application for interim relief pending an action for damages. [36] The appellants, laid a factual foundation of a defence of truth and public interest in their answering affidavit. As to whether that defence is sustainable can only be established in the trial, which is the procedure elected by the respondents in so far as they sought a temporary interdict pending a defamation action. The fact remains that, on the correct application of the principle laid down by this Court in Heilbron v Blignaut, an interim order ought not to be granted if a factual foundation of the defence of truth and public interest had been laid. This brings me to the appellants’ contentions regarding why they considered their utterances to be in the public interest. [37] The appellants placed reliance on several provisions of the Constitution, which they regard as giving an important context in this matter. In terms of s 93(2) of the Constitution, Deputy Ministers are accountable to Parliament for the exercise of their powers and the performance of their functions. Section 96 of the Constitution 31 Tau v Mashaba and Others fn 7 para 28. enjoins Cabinet Ministers and Deputy Ministers ‘not to act in any way that is inconsistent with their office’ and not to ‘expose themselves to any situation involving the risk of a conflict between their official responsibilities and private interests’. It also forbids the Executive from using their position or any information entrusted to them to enrich themselves or to improperly benefit others. [38] The appellants contended that the utterances were made in the context of their oversight role on the Executive. 32 It is accepted that political parties have a significant role to play in uncovering corruption and maladministration in government entities.33 In UDM v Speaker, National Assembly,34 the Constitutional Court stressed that the powers granted to public office bearers should not be used for the advancement of personal or sectarian interests. The court remarked that ‘public office-bearers in all the arms of the State must . . . explain how they have lived up to the promises that inhere in the offices they occupy’. [39] It is also true that public officials have to be held accountable for the actions they take while holding public office. A relevant consideration regarding the appellants’ oversight role is that one of the respondents is a former member of the Executive. Furthermore, one of the respondents is an erstwhile employee of the Public Investment Corporation, a state-owned entity. All this is stated to provide essential context; it should not, in any way, be considered to suggest that any of the other respondents had a diminished right to dignity. 32 Democratic Alliance v Speaker of The National Assembly and Others [2016] ZACC 8; 2016 (5) BCLR 577 (CC); 2016 (3) SA 487 paras 14, 16 And 17. 33Democratic Alliance v Speaker of the National Assembly and Others fn 32 above; EFF v Manuel fn 25 para 76. 34 United Democratic Movement v Speaker of the National Assembly and Others [2017] ZACC 21; 2017 (5) SA 300 (CC) para 8. [40] It is against the background sketched in the preceding paragraph that the appellants contended that the interim order granted by the court a quo would impact on, among others, their responsibility to expose possible unethical conduct within the contemplation of s 96 of the Constitution. The second appellant also asserted that in so far as the Public Investment Corporation was a state-owned entity, the interim order would impact on the appellants’ responsibility to hold public officials accountable by exposing possible contraventions of legislation by those in charge of public funds. [41] I noted that the court a quo remarked that the attitude of the appellants in refusing to retract the letter and apologise, among other things, ‘shows a potential for future comment and further publication’. A retraction and apology are aspects that relate to a final interdict as they presuppose the wrongfulness of the utterances.35 Notably, in para 1.2, the court a quo ordered the appellants to remove the allegedly defamatory letter addressed to the President from the first appellant’s website. That seems to be putting the cart before the horse, as an order of that nature is ordinarily granted when a court is satisfied that the statement made is unlawful, in other words, when the factual foundation laid by the respondent has not disclosed the defence of truth and public interest.36 [42] Furthermore, although any patrimonial loss arising from the defamation is an aspect that could subsequently achieve redress by way of an Aquilian action,37 the commercial loss that could be suffered by the respondents seems to be a factor that weighed heavily with the court a quo when assessing whether there was a reasonable 35 Tau v Mashaba and Others fn 7 para 17. 36 Compare EFF v Manuel fn 25. 37 Caxton Ltd and Others v Reeva Forman (Pty) Ltd and Another 1990 (3) SA 547 (A) at 567G-576B. apprehension of harm. This obviously has a bearing on the proper assessment of the apprehension of harm as one of the requirements for the granting of an interim interdict. [43] The first judgment remarks that the order granted by the court a quo cannot be described as a gagging order, given that the contentious remarks were already in the public domain. It is true that the allegations in question were already in the public domain as the second appellant’s utterances had already been covered by the media, including social media. Bearing in mind that an interdict is ‘not a remedy for the past invasion of rights, but is concerned with the present or the future’,38 and that the respondents had opted to pursue their defamation through action proceedings, it seems to me that an award of damages could conceivably have served as a suitable alternative remedy, under the circumstances.39 [44] The first judgment correctly observes that the first appellant is not a one-issue party that would be inclined to raise the same issue over and over again in Parliament. An important aspect raised by counsel for the appellants, is that parliamentary processes are widely covered by the media. That would mean that the intended effect of the interim interdict would simply not be achievable, under the circumstances. This is an aspect that ought to have had a bearing in the exercise of the discretion whether or not to grant the interdict. [45] For all the reasons set out above, I conclude that the interim order granted by the court a quo was appealable. The court a quo was correct when it stated that there 38 Lawsa 2 ed para 390; Philip Morris Inc and Another v Marlboro Shirt Co SA Ltd and Another [1991] 2 All SA 177 (A); 1991 (2) SA 720 (A) at 735B-C, approving Stauffer Chemicals Chemical Products Division of Chesebrough- Ponds (Pty) Ltd v Monsanto Co [1988] 3 All SA 279 (T); 1988 (1) SA 805 (T) at 809F-G. 39 Compare Tau v Mashaba and Others fn 7 above para 27. was no reason why the considerations of the interests of justice should not apply when determining the appealability of an interim order that was said to affect the rights of parties to engage in political activity. It correctly granted the appellants leave to appeal. It follows that the appeal should have been entertained by this Court. ________________________ M B MOLEMELA JUDGE OF APPEAL Makgoka JA [46] I have had the benefit of reading the judgments of my colleagues, Molemela JA and Sutherland AJA. I agree with Molemela JA that the order is appealable. I wish to make the following additional remarks. [47] The Zweni attributes have now been subsumed under the context-sensitive and the constitutionally pliant rubric of the interests of justice. In Philani-Ma-Afrika v Mailula40 this court adapted the general principles on the appealability of interim orders and concluded that what is of paramount importance in deciding whether a judgment is appealable is the interests of justice. This approach received the imprimatur of the Constitutional Court in International Trade Administration Commission v SCAW.41 [48] In City of Tshwane v Afriforum42 the Chief Justice, writing for the majority, explained the relationship between the common law approach and the Constitution on the appealability of judgments: ‘The common law test for appealability has since been denuded of its somewhat inflexible nature. Unsurprisingly so because the common law is not on par with but subservient to the supreme law that prescribes the interests of justice as the only requirement to be met for the grant of leave to appeal. Unlike before, appealability no longer depends largely on whether the interim order appealed against has final effect or is dispositive of a substantial portion of the relief claimed 40 Philani-Ma-Afrika and Others v Mailula and Others [2009] ZASCA 115; 2010 (2) SA 573 (SCA); [2010] 1 ALL SA 459 (SCA) para 20. 41 International Trade Administration Commission v Scaw South Africa (Pty) Ltd [2010] ZACC 6; 2012 (4) SA 618 (CC); 2010 (5) BCLR 457 (CC) para 52. 42 City of Tshwane Metropolitan Municipality v Afriforum and Another [2016] ZACC 19; 2016 (9) BCLR 1133 (CC); 2016 (6) SA 279 (CC) para 40. in the main application. All this is now subsumed under the constitutional interests of justice standard. The over-arching role of interests of justice considerations has relativised the final effect of the order or the disposition of the substantial portion of what is pending before the review court, in determining appealability. The principle was set out in OUTA by Moseneke DCJ in these terms: “This court has granted leave to appeal in relation to interim orders before. It has made it clear that the operative standard is the interests of justice. To that end, it must have regard to and weigh carefully all germane circumstances. Whether an interim order has a final effect or disposes of a substantial portion of the relief sought in a pending review is a relevant and important consideration. Yet, it is not the only or always decisive consideration. It is just as important to assess whether the temporary restraining order has an immediate and substantial effect, including whether the harm that flows from it is serious, immediate, ongoing and irreparable.”.’ [49] It is with this approach in mind that I consider whether the high court’s order is appealable. In my view, the specific factors which should be considered to answer that question are the following: the nature of the allegations; the nature and profile of the parties involved; whether the appellants raise a prima facie valid defence; the competing rights; the efficacy of the high court’s order; and the weight of the high court’s judgment granting leave to appeal. I set out these, in turn. The nature of the allegations [50] The case concerns allegations of impropriety, corruption and conflict of interests on the part of a former Deputy Minister, who is alleged to have used his position to improperly enrich himself and the politically connected, ie the remainder of the respondents. In a nutshell, the respondents are accused of corruption involving what, essentially, are public funds. It is a notorious fact that in the last decade or so, corruption has taken root in South Africa, both in the public and private sectors. But it is the former sector which has attracted much attention because, in many instances, politicians and those connected to them, have enriched themselves with public funds at the expense of the citizenry. This explains why any allegations of corruption involving public funds draw closer scrutiny. Recently, in Zuma v Office of the Public Protector, 43 this court quoted the United Nations 2004 Convention against Corruption, to which South Africa is a signatory, which describes corruption in the following terms: ‘Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish. This evil phenomenon is found in all countries – big and small, rich and poor – but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a Government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic underperformance and a major obstacle to poverty alleviation and development.’44 The allegations made by the appellants were sufficient to move the President of the country to institute a Judicial Commission of Inquiry to investigate them. There is therefore no doubt that this is a matter of significant national and public importance. The parties [51] Mr Holomisa is the leader of the second appellant, one of the opposition parties represented in Parliament. There is no question that they raise the issues in the public interest. The sixth respondent, Mr Moleketi, is a former politician, who, during the period relevant to the allegations, served as a Deputy Minister. In that capacity, he was the chairperson of the PIC. Reduced to their bare essence, the allegations by the appellants are that Mr Moleketi had used his position as the 43 Zuma v Office of the Public Protector and Others [2020] ZASCA 138. 44 Zuma fn 43 para 1. chairperson of the PIC to enrich himself and the remainder of the respondents. That is alleged to have endured beyond his tenure as such. [52] The PIC is no ordinary company. It is a wholly state-owned asset management entity, whose clients are mostly public sector entities, which focus on the provision of social security. Amongst these are: Government Employees Pension Fund (GEPF); Unemployment Insurance Fund (UIF); Compensation Commissioner Fund (CC); Compensation Commissioner Pension Fund (CP); and Associated Institutions Pension Fund (AIPF). 45 Thus, the PIC is funded with public moneys, mainly belonging to public servants. How those moneys are invested and managed, is therefore undoubtedly of great public interest. Prima facie valid defence? [53] As I understand the appellants’ defence, it is rooted in truth and public interest. It is so that the impugned letter is littered with outlandish, perhaps exaggerated, claims and comments. But this is something politicians have to constantly grapple with, and it is in this context that the tone of the letter should be understood. As aptly remarked by Ludorf J in Pienaar v Argus: ‘[T]he courts must not avoid the reality that in South Africa political matters are usually discussed in forthright terms. Strong epithets are used and accusations come readily to the tongue. I think, too, that the public and readers of newspapers that debate political matters, are aware of this.’46 [54] Indeed, when one deals with politicians or political matters, courts have allowed for a good deal of latitude for comment. More than a century ago, Innes CJ remarked in Crawford v Albu 1917 AD 102 at 105: 45 https://www.pic.gov.za/. 46 Pienaar and Another v Argus Printing and Publishing Co Ltd 1956 (4) SA 310 (W) at 318C-E. ‘People who occupy a public position or for any other reason have been so unfortunate as to focus upon themselves the light of public opinion must expect to be criticised. And more particularly must those who, however righteous their motives, place themselves in determined opposition to society generally or to a section of society not be surprised if they find themselves assailed with some vehemence or even exaggeration. All this the law does not prohibit. Free speech and free thought are part of our common inheritance. And the law will not interfere with them. But still there are limits which must not be transgressed. Comment to be fair must not distort or misrepresent facts.’ [55] As pointed out in Argus v Inkatha Freedom Party,47 there is common law reluctance to regard political utterances as defamatory. This reluctance stems from the fact that it is recognised that ‘right-thinking people are not likely to be greatly influenced in their esteem of a politician by derogatory statements made about him by other politicians or political commentators’. Accordingly, in a political context, the traditional test of determining whether the words complained of tend to lower the plaintiff ‘in the estimation of right-thinking people’ is not easily straddled. [56] Although the high court referred to Herbal Zone, it failed to apply the following trenchant passage in that judgment: ‘[A]n interdict to prevent the publication of defamatory matter … is directed at preventing the party interdicted from making statements in the future. If granted it impinges upon that party’s constitutionally protected right to freedom of speech. For that reason such an interdict is only infrequently granted, the party claiming that they will be injured by such speech ordinarily being left to their remedy of a claim for damages in due course. Nugent JA said in this court: “Where it is alleged, for example, that a publication is defamatory, but it has yet to be established that the defamation is unlawful, an award of damages is usually capable of vindicating the right to 47 Argus Printing and Publishing Co Ltd v Inkatha Freedom Party 1992 (3) SA 579 (A) at 588F-589E. reputation if it is later found to have been infringed, and an anticipatory ban on publication will seldom be necessary for that purpose.” .’48 [57] As stated above, the appellants rely on the defence of truth and public interest. The appellants do not merely content themselves with bold assertions in this regard. They set out facts from which their allegations can be deduced. Given that, the high court should have been more circumspect in granting the interdict. At the level of principle, I find it disquieting and deeply troubling that a former politician and those with whom he is accused of corruption, should obtain an interim interdict pending the outcome of a defamation action, with the ease with which the present one was granted. As I understand the effect of the passage in Herbal Zone referred to above, the threshold for obtaining such an interdict is not that low. Something more compelling is required. The respondents have alleged none. The competing rights [58] A number of constitutionally entrenched rights are at play here, some potentially pitted against each other. There is, for example, the respondents’ rights to privacy and dignity, on the one hand. On the other, one has the appellants’ right of freedom of expression, and the public’s right to freedom of access to information. The interplay between these rights and how they are balanced against each other, clearly trigger the interests of justice. The efficacy of the high court’s order [59] The purpose of an interim interdict pending the determination of a defamation action is that the dignity and esteem which a plaintiff enjoys in the eyes of the public should not be disturbed in the interim. This is at least as far as a pre-publication 48 Herbal Zone fn 30 para 36. interdict is concerned. But where, as is the case here, publication has already taken place, and widely so, it must be asked what purpose a subsequent interdict would serve. To my mind, it would serve little, if any, purpose. As stated already, the allegations contained in the letter have been widely published in the mainstream and social media. What is more, the respondents have instituted action for defamation in which the allegations are set out in full. Since pleadings, like all court documents, are public documents to which the media and the public have access, the allegations would be (and likely have been) publicly repeated. In addition, Mr Holomisa is protected by the privileges he enjoys as a Member of Parliament to repeat the allegations in Parliament, which the media would publish, and has most likely done so. [60] Considering the above, the allegations were already in the public domain in any event. Only the appellants are not permitted to repeat them. An interim order under such circumstances is not only impotent, but artificial. It amounts to no more than what the law calls a brutum fulmen.49 This relates to one of the requisites for an interim interdict, namely the balance of convenience. On this score, it clearly did not favour the granting of an interim order, and the interim order should not have been granted in the first place. The weight of the high court’s judgment granting leave to appeal [61] It is so that the high court’s conclusion that the order is appealable, is not binding on this Court. But this does not mean that we can, without more, set it aside. Generally, a court to which an application for leave to appeal is made has a wide general discretion to grant or refuse it. Its decision is not to be lightly interfered with, 49 A useless thunderbolt. unless we are satisfied that the discretion was not exercised judiciously, or that it had been influenced by wrong principles or a misdirection on the facts, or that the high court had reached a decision which in the result could not reasonably have been made by a court properly directing itself to all the relevant facts and principles.50 [62] In the present case, nothing suggests that the high court had not properly considered the issue of appealability. To the contrary, the learned judge gave careful and anxious consideration to the issue. After noting the overarching considerations of the interests of justice as set out in Afriforum and other authorities, the learned judge insightfully said: ‘[I] see no reason why considerations in the interests of justice should not apply to the lower courts when determining the appealability of an interim order, which is said to affect the rights of parties as the applicants, to engage in political activity. Leave in these circumstances should be granted and I am of the view that the issues raised are of importance and for purpose of certainty the matter should be considered by the Supreme Court of Appeal.’ One might not agree with these views, but the learned judge cannot be faulted for how she applied the principles to the issue. [63] Under these circumstances, it is my view that this Court is not at large to revisit that order. The power of this Court to interfere with an order of the high granting leave should be used sparingly, and only where there is a proper juridical basis to do so, and in the clearest cases of an error or misdirection on the part of the high court in granting such leave. In this case, there is neither. 50 Compare National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others [1999] ZACC 17; 2000 (2) SA 1 (CC); 2000 (1) BCLR 39 para 10; Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited and Another [2015] ZACC 22; 2015 (5) SA 245 (CC) para 88. Conclusion [64] For all the above considerations, I agree with Molemela JA’s conclusion that the order of the high court is appealable, and thus it was in the interests of justice to hear the merits of the appeal. ________________________ T MAKGOKA JUDGE OF APPEAL Appearances: For appellants: D C Mpofu SC (with him T Ngcukaitobi SC) Instructed by: Mabuza Attorneys, Pretoria Matsepes Inc., Bloemfontein For respondents: D Berger SC (with him B Slon and T B Makgalemele) Instructed by: Nicqui Galaktiou Inc., Johannesburg Claude Reid, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED United Democratic Movement and Another v Lebashe Investment Group (Pty) Ltd and Others (1032/2019) [2021] ZASCA 4 (13 January 2021) From: The Registrar, Supreme Court of Appeal Date: 13 January 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of these cases and does not form part of the judgments of the Supreme Court of Appeal The appellants, a political party and its leader had published a copy of a letter of request they had made to the President of the Republic. The letter made allegations of misconduct against the several respondents and demanded a public enquiry. The aggrieved respondents were granted an interim order by the High Court inhibiting a repetition of the contents of the letter pending an action for damages based on the allegations therein being defamatory and unlawful. The High Court granted leave to appeal on the basis of the proposition that the interests of justice required an appeal to examine whether the interim order violated the appellants constitutional rights to free political activity and freedom of speech. At the hearing of the appeal, by a majority judgment, the appeal was struck from the roll on the grounds that the interests of justice did not require an appeal and that were the court to address the appellants’ contentions the role of the trial court would be pre-empted. Two dissenting judgments held, to the contrary, that it was appropriate to have entertained the appeal on the grounds that the interests of justice required it and the matter should not have been struck off the roll. ________________________________________

3495

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1324/2019 In the matter between: CASPER HENDRIK BAILEY FIRST APPELLANT SAREL LOUIS AUGUSTYN SECOND APPELLANT and HAZEL JOHANNA CICELIA BAILEY RESPONDENT Neutral citation: Bailey and Another v Bailey (Case no 1324/2019) [2020] ZASCA 178 (18 December 2020) Coram: VAN DER MERWE, MOCUMIE and MAKGOKA JJA and LEDWABA and EKSTEEN AJJA Heard: 4 November 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, and by publication on the Supreme Court of Appeal website and release to SAFLII. The time and date for hand down is deemed to be 09h45 on 18 December 2020. Summary: Family law – interpretation of word ‘remarriage’ in deed of settlement made order of court – means marriage recognised by law – religious Christian ceremony performed not remarriage. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Neukircher J) sitting as court of first instance: (a) The appeal is upheld. (b) The order of the court a quo is set aside and replaced with the following: ‘1. Paragraph 5.1 of the settlement agreement between the parties made an order of court on 28 August 2017 is amended/varied to read as follows and with effect from date of this order “The Defendant shall pay an all-inclusive amount of R10 000 (Ten Thousand Rand) maintenance to the Plaintiff per month until her death or remarriage and/or cohabitation with another man in a common law marriage whichever occurs first.” 2. It is declared that the ceremony that had been performed in respect of the applicant and Mr Riaan Visagie on 9 December 2017 did not constitute a remarriage within the meaning of the said deed of settlement between the parties. The respondent is directed to pay the costs of the application.’ (c) There is no order as to the costs of the first appellant and the respondent on appeal. (d) The respondent is directed to pay the costs of appeal of the second appellant. JUDGMENT Mocumie JA (Van der Merwe JA and Ledwaba and Eksteen AJJA concurring): [1] The marriage of the first appellant, Mr Casper Hendrik Bailey, and the respondent, Mrs Hazel Johanna Cicelia Bailey, was dissolved by a court order incorporating a settlement agreement which they had concluded. The second appellant, Mr Sarel Louis Augustyn, acted at all relevant times as the attorney of the first appellant. The main issue for determination in this appeal is the interpretation of the word ‘remarriage’ in the settlement agreement entered into between the first appellant and the respondent in the divorce proceedings. The further issues are whether the first appellant was in contempt of court and whether the costs orders of the court a quo, particularly that the second appellant, be mulcted with costs de bonis propriis, were justified. The appeal is with leave of this Court. [2] The relevant background facts appear from what follows. On 28 February 1987, the first appellant and the respondent were married in community of property. They separated in June 2016 with the common intention to divorce. The respondent then initiated divorce proceedings against the first appellant. Pending the finalisation of the divorce proceedings, they entered into negotiations assisted by their respective attorneys. In June 2017, they signed a settlement agreement. Clause 5.1 of the settlement agreement, which is in dispute, reads: ‘The Defendant shall pay an all-inclusive amount of R10 000.00 (Ten Thousand Rand) maintenance to the Defendant per month until her death or remarriage whichever occurs first.’ In the court a quo and this Court, the first appellant accepted that the second reference to ‘Defendant’ was simply an error and should read ‘Plaintiff’. [3] On 28 August 2017, a decree of divorce, incorporating the signed settlement agreement, was made an order of the court. After the divorce, the respondent cohabited with Mr Visagie. On 9 December 2017, Reverend van Huyssteen, a minister of the Dutch Reformed Church, conducted a ceremony during which he blessed and sanctioned their cohabitation so that they would not ‘live in sin.’ Both the respondent and Mr Visagie invited friends and relatives to the ceremony, the photos of which were posted on Facebook by the respondent with the caption that Mr Visagie was her husband. By 5 March 2019, the date of the hearing in the high court, the respondent, and Mr Visagie had already separated. [4] At the end of February 2018, the ceremony between the respondent and Mr Visagie came to the attention of the first appellant. Upon the advice of the second appellant, the first appellant stopped paying maintenance to the respondent on the basis that the respondent had remarried, thus ending his duty to maintain her. He stopped payment at the end of March 2018, which prompted the respondent to lay a criminal charge against the first appellant for failure to pay maintenance. On 23 April 2018, the first appellant appeared in the magistrate court where he raised the following defence in respect of the charge proffered against him: ‘On advice of Counsel and informing him of the so-called marriage on 9 December 2018, the Court was informed on the date of appearance of 23 April 2018 that the Court Order of the High Court could not be enforced in the Criminal Court without an attempt to amend/vary it in terms of legal process which would in any event be opposed as being moot in the light of the fact that maintenance orders lapse automatically in the event of a re-marriage by the recipient of maintenance.’ [5] The magistrate apparently accepted what the first appellant had stated and struck the matter from the roll. The respondent thereafter approached the high court where she sought to amend clause 5.1 of the settlement agreement by replacing the second word ‘Defendant’ with ‘Plaintiff’, as it ought to have read in the first place. She also sought to hold the first appellant in contempt of a court order for his failure to pay maintenance since April 2018. [6] The first appellant filed a conditional counter-application in which he sought a declaratory order that on 9 December 2017 in the Dutch Reformed Church Montana; the respondent and Mr Riaan Visagie concluded an unregistered common law or Christian relationship of cohabitation as husband and wife, and, as a result of which his duty to pay maintenance had lapsed. He also sought orders that: ‘1.1 The word “remarriage” in paragraph 5.1 of the settlement agreement between the parties made an order of the court on 28 August 2012, be interpreted and extended to include an unregistered common law alternatively Christian marriage relationship as husband and wife. . . . Alternatively, . . . 2.1 Paragraph 5.1 of the settlement agreement between the parties made an order of Court on 28 August 2017 is amended/varied by adding after the word “remarriage” the following words “alternatively, Plaintiff entering into an unregistered common law alternatively Christian marriage relationship of cohabitation as husband and wife” . . . Alternatively . . . 3.1 Paragraph 5.1 of the settlement agreement made an order of the court on 28 August 2017 is amended/varied by adding after the word “remarriage” the following words “alternatively, Plaintiff entering into a relationship of cohabitation as husband and wife with another man.”’ [7] The high court (Neukircher J) found in favour of the respondent. It found that the insertion of the second word ‘Defendant’ instead of ‘Plaintiff’ in clause 5.1 was a patent error that was not apparent to the parties, their legal representatives or the court. The high court also held that the ceremony conducted in respect of the respondent and Mr Riaan Visagie did not constitute remarriage. It furthermore held that the meaning of the word did not include cohabitation, as the first appellant had contended. The first appellant and the respondent, however, reached agreement, contained in a draft order, as to the amendment of clause 5.1 for future purposes. The court a quo thus varied the settlement agreement to read: ‘1. Paragraph 5.1 of the settlement agreement between the parties made an order of the court on 28 August 2017 is amended/varied to read as follows and with effect from the date of order: The defendant shall pay an all-inclusive amount of R10 000 (Ten Thousand Rand) maintenance to the plaintiff per month until her death or remarriage and/or cohabitation with another man in a common-law marriage, whichever occurs first.’ [8] The high court also held the first appellant in contempt of court for failing to pay the respondent maintenance in terms of the settlement agreement; and it mulcted the second appellant with costs de bonis propriis. In addition, it ordered the first appellant to pay costs on the scale of attorney and client. [9] On the question whether the ceremony between the respondent and Mr Visagie was a ‘remarriage’ as contemplated by the parties when they concluded the settlement agreement, the high court found, with reference to several cases including Ochberg v Ochberg’s Estate1, that on the evidence presented, what occurred on 9 December 2017 was no valid and binding legal marriage ceremony. Thus, the respondent’s legal obligation to pay maintenance had not lapsed. Addressing the first appellant’s provisional counter-application based on rectification, at para 40 of the judgment, the high court found that: ‘[a]t the time that the settlement was entered into, the respondent had the opportunity to add into the settlement agreement that any cohabitation by the applicant would result in a 1 Ochberg v Ochberg’s Estate 1941 CPD 15. nullification of the maintenance payable by him to her. He failed to do so. He was represented by an attorney at the time and despite this, no such clause was added to the settlement agreement’. [10] As I have said, counsel for the first appellant handed up a draft order in which the respondent consented to a variation of the settlement agreement and which included the variation that the respondent had sought from the outset. The court, however, held at para 51 that ‘had it not been for this concession, the [conditional] counter-application would have been dismissed with costs.’ [11] In respect of the contempt of court relied upon by the respondent, the high court found at para 48 of the judgment that: ‘[i]n so far as the contempt of court regarding the failure to pay maintenance because of the argument that the applicant has remarried is concerned, I am of the view that the wilfulness and mala fides cannot be established. It is clear that the respondent was advised by his legal representatives that this argument was a valid one and given that he is a lay person, in my view he would know no better.’ It nevertheless found the first appellant guilty of contempt of court consisting of deductions from maintenance made before April 2018 and sentenced him to three months’ imprisonment which was suspended conditionally. [12] As the appeal revolves around the interpretation of the word ‘remarriage’ in the divorce settlement agreement and flowing from that what constitutes a marriage, the Marriage Act 25 of 1961 (the Marriage Act) must be the starting point. The relevant provisions are the following: ‘11. Unauthorised solemnization of marriage ceremonies forbidden (1) A marriage may be solemnized by a marriage officer only. (2) . . . . (3) Nothing in subsection (2) contained shall apply to any marriage ceremony solemnized in accordance with the rites or formularies of any religion if such a ceremony does not purport to effect a valid marriage. 29A. Registration of marriages (1) The marriage officer solemnizing any marriage, the parties thereto and two competent witnesses shall sign the marriage register concerned immediately after such marriage has been solemnized. (2) The marriage officer shall forthwith transmit the marriage register and records concerned, as the case may be, to a regional or district representative designated as such under section 21 (1) of the Identification Act, 1986 (Act No. 72 of 1986).’ [13] The purpose of interpretation, is to establish the intention of the parties from the words used in the context of the document as a whole, the factual matrix surrounding the conclusion of the agreement and its purpose or (where relevant) the mischief it was intended to address.2 In Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk3, with reference to Natal Joint Municipal Pension Fund v Endumeni Municipality4, this Court affirmed that: ‘Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed, and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to and guard against, the temptation to substitute what they regard as reasonable, sensible, or business-like for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation. In a contractual context, it is to make a contract for the parties other than the one they in fact made. The “inevitable point of departure is the language of the provision itself”, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.’ [14] The ordinary meaning of remarriage is to enter into a further marriage recognised by South African law (legal marriage). The context provides several indications that this was the meaning of the word remarriage in clause 5.1 of the deed of settlement. First, the parties used the word in the agreement that regulated the 2 KPMG Chartered Accountants (SA) v Securefin Ltd and Another [2009] ZASCA 7; [2009] 2 All SA 523 (SCA); 2009 (4) SA 399 (SCA) para 39; Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd [2015] ZASCA 111; [2015] 4 All SA 417 (SCA); 2016 (1) SA 518 (SCA) paras 27, 28, 30 and 35. 3 Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk3 [2013] ZASCA 176; [2014] 1 All SA 517 (SCA); 2014 (2) SA 494 (SCA). 4 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA 262 (SCA); 2012 (4) SA 593 (SCA) para 18. consequences of the dissolution of their legal marriage. In the absence of an indication to the contrary, the parties must be taken to have intended a remarriage of the same status, ie a legal marriage. Second, clause 5.1 echoed the phrase ‘until death or remarriage’ in s 7(2) of the Divorce Act 70 of 1979.5 There the phrase undoubtedly refers to a legal remarriage. Again, in the absence of an indication to the contrary, the phrase must have been intended to have the same meaning as in s 7(2). Third, the very wording of the agreed amendment shows that it introduced into the clause what was not there before. [15] Thus, the parties agreed that the first appellant’s duty to maintain the respondent would lapse when another person becomes legally obliged to maintain her. But should the respondent cohabitate with a person who de facto contributes to her maintenance (which on the uncontroverted evidence, Mr Visagie did not), the first appellant would have the remedy of approaching the maintenance court for a variation or discharge of the maintenance order under s 6(1) read with s 16(1)(b) of the Maintenance Act 99 of 1998.The agreement must now be applied to the facts. [16] Reverend Van Huysteen’s uncontradicted evidence was that he is an ordained minister and marriage officer in terms of the Marriage Act (s 29A(a)). That on 9 December 2017, he conducted the ceremony between the applicant and Mr Visagie. However, that ceremony had no legal consequences, as he did not solemnise it in terms of the Marriage Act. No one signed the marriage register as prescribed in the Marriage Act (s 29A(b)). He did not pronounce the applicant and Mr Visagie to be husband and wife to those in attendance of the ceremony. On the contrary, he expressly informed the audience that no legal marriage was concluded. Nor did he after the ceremony transmit the marriage register and other relevant documents to a regional or district representative at the Department of Home Affairs (s 29A(c)). 5 Section 7(2) provides: ‘In the absence of an order made in terms of subsection (1) with regard to the payment of maintenance by the one party to the other, the court may, having regard to the existing or prospective means of each of the parties, their respective earning capacities, financial needs and obligations, the age of each of the parties, the duration of the marriage, the standard of living of the parties prior to the divorce, their conduct in so far as it may be relevant to the breakdown of the marriage, an order in terms of subsection (3) and any other factor which in the opinion of the court should be taken into account, make an order which the court finds just in respect of the payment of maintenance by the one party to the other for any period until the death or remarriage of the party in whose favour the order is given, whichever event may first occur.’ (Emphasis added.) [17] In terms of s 29A of the Marriages Act the requirements for the registration of a valid marriage are that: (a) the solemnization of the marriage is done by a marriage officer designated in terms of the Marriage Act; (b) the (i) parties to the marriage together with the (ii) marriage officer and (iii) two witnesses are required to sign the marriage register immediately after such solemnization; (c) the marriage officer is thereafter charged to forthwith transmit the marriage register and other relevant documents to a regional or district representative designated as such under s 21(1) of the Identification Act 72 0f 1986, at Home Affairs. None of these requirements were fulfilled during the ceremony. Thus, the finding of the high court that there was no ‘remarriage’ cannot be faulted. [18] Counsel for the respondent fairly, and correctly, conceded that the high court erred in holding the first appellant in contempt of court. In the respondent’s founding affidavit, it was expressly stated that the alleged contempt of court consisted of non- payment of maintenance since April 2018. That was the case that the first appellant had been called upon to answer. As I have said, the high court in fact held that the first appellant did not commit contempt of court in this regard. In the circumstances it erred in holding that the first appellant was in contempt of court in respect of deductions that he had made from the monthly amount prior to April 2018. On the evidence, the bulk of these deductions were in any event in respect of the respondent’s medical fund contributions and were made with her consent. [19] As I have said, this Court granted leave to the second appellant to appeal against the de bonis propriis costs order. Before us, counsel for the respondent rightly conceded that the order was vitiated by procedural unfairness. In this regard the high court referred to two matters. First, it said, ‘the application was served on Mr Augustyn during October 2018’. Second, it stated: ‘[o]n Monday, the 4th of March 2018 when the matter was called, I insisted that Mr Augustyn be present in court to explain why a de bonis propriis costs order should not be granted against him. He thus had an opportunity until Tuesday, 5 March 2019 when this matter was argued to provide such an affidavit. None was forthcoming. In my view, Mr Augustyn has had ample opportunity to provide an explanation to this court, as to why he should not pay costs de bonis propriis and he failed to do so.’ [20] But the second appellant was not a party to the application in the high court. His firm merely accepted service of the respondent’s application on behalf of the first appellant. The mere fact that the second appellant had in these terms been informed to attend the hearing the following day, did not give expression to the entrenched audi alteram partem principle. The second appellant was not informed of the purported grounds for a de bonis propriis costs order and was not provided a fair and proper opportunity to explain himself. [21] There was also no substantive ground for the order. It is settled law that generally a court would only grant a costs order de bonis propriis against an attorney in cases that involve gross incompetence or gross disregard of professional responsibilities, dishonesty, wilfulness, or negligence of a serious degree.6 The high court based the de bonis propriis costs order (and the attorney and client costs order against the first appellant) on the propositions that in both the maintenance court and in the papers before it, the first appellant, upon the advice of the second appellant, had relied on the obvious error in the deed of settlement as a substantive defence to the claim for payment of maintenance. It was wrong on both scores. The first appellant did not appear in the maintenance court. He appeared on a criminal charge in the criminal court. In facing a criminal charge, it was perfectly reasonable to put forward what I have quoted in para 5 above. The first appellant did not rely on the error as a defence in the high court. He expressly accepted that it was a patent error and defended the matter, as I have said, on the basis that his admitted liability to pay maintenance had lapsed. For the same reasons, attorney and client costs against the first appellant were not justified. [22] Paragraph 1 of the order of the court a quo was granted by agreement, was not appealed against and must stand. For the reasons stated, the rest of the order of the court a quo does not withstand scrutiny. The first appellant and the respondent, sensibly, agreed that a declarator would be to the benefit of the parties in order to 6 Pheko v Ekurhuleni Metropolitan Municipality (No 2) [2015] ZACC 10; 2015 (5) SA 600 (CC); 2015 (6) BCLR 711 (CC) para 51 and 54. See also Stainbank v South African Apartheid Museum at Freedom Park and Another [2011] ZACC 20; 2011 (10) BCLR 1058 (CC) paras 52-54. arrange their affairs accordingly. It is fair and just that the first appellant and the respondent pay their own costs of appeal. The respondent did not abandon the costs order against the second appellant but attempted to defend it in the heads of argument filed in this Court. In the result the respondent should pay the second appellant’s costs of appeal. [23] In the result, the following order is granted: (a) The appeal is upheld. (b) The order of the court a quo is set aside and replaced with the following: ‘1. Paragraph 5.1 of the settlement agreement between the parties made an order of court on 28 August 2017 is amended/varied to read as follows and with effect from date of this order “The Defendant shall pay an all-inclusive amount of R10 000 (Ten Thousand Rand) maintenance to the Plaintiff per month until her death or remarriage and/or cohabitation with another man in a common law marriage whichever occurs first.” 2. It is declared that the ceremony that had been performed in respect of the applicant and Mr Riaan Visagie on 9 December 2017, did not constitute a remarriage within the meaning of the said deed of settlement between the parties. 3. The respondent is directed to pay the costs of the application.’ (c) There is no order as to the costs of the first appellant and the respondent on appeal. (d) The respondent is directed to pay the costs of appeal of the second appellant. ________________________ B C MOCUMIE JUDGE OF APPEAL Makgoka JA (dissenting) [24] I have had the benefit of reading the main judgment by my colleague, Mocumie JA. I agree with it, save for the reasoning and conclusion on the interpretation of the ‘re-marriage clause’ in the settlement agreement, as well as the costs order as between the first appellant and the respondent. The main judgment declares that ‘the ceremony … performed in respect of the applicant and Mr Riaan Visagie on 9 December 2017, did not constitute a remarriage within the meaning of the …deed of settlement between the parties.’ I conclude, in the specific context of clause 5.1 of the parties’ settlement agreement, that the respondent and Mr Visagie indeed entered into a ‘re-marriage’. [25] The relevant facts are common cause. The first appellant and the respondent were previously married. They divorced on 28 August 2017. Their decree of divorce incorporated a settlement agreement which was made an order of court. Paragraph 5.1 thereof obliged the first appellant to pay R10 000 maintenance monthly to the respondent ‘until her death or remarriage, whichever occurs first…’. A month and half later, on 13 October 2017, the respondent announced to the world via the social medium of Facebook,7 that she and Mr Visagie, with whom she had been cohabiting, were getting married on 9 December 2017 in a church ceremony in Montana, Pretoria. [26] After that date, the respondent’s Facebook page depicted, among others things, photos of the ceremony, which in all respects, resembled a marriage consummation: the respondent was dressed in a wedding dress; she was escorted into the church by a male person; the respondent and Mr Visagie stood in front of a priest, and later knelt while being blessed by the priest, and the couple exchanged wedding rings. The ceremony was witnessed by the couple’s families and friends. Mr Visagie also updated his Facebook status to ‘Married Hazel Bailey’, in reference to the respondent. Later, on Mr Visagie’s birthday, the respondent posted a birthday message for the latter on Facebook, referring to him as ‘the best husband ever.’ 7 Facebook is an American online social media and social networking service. [27] Unsurprisingly, the above developments caught the first appellant’s interest, as the respondent’s marriage would have a direct bearing on his maintenance obligation towards the respondent. As stated already, that obligation would lapse upon the respondent’s re-marriage. Shortly after becoming aware of the ceremony, the first appellant sought confirmation from the respondent that she was indeed married to Mr Visagie, which the respondent denied. His further investigation revealed that, at the request of the respondent and Mr Visagie, the priest who presided over the ceremony neither completed the marriage register nor registered the marriage, as the respondent sought to avoid the lapsing of the first appellant’s maintenance obligation. On advice from his attorney, the first appellant stopped paying maintenance to the respondent. [28] As a result, the respondent laid a complaint against the first appellant in the magistrate’s court for failure to pay maintenance for the period September 2017 to February 2018. The maintenance court dismissed the complaint based on an artificial ambiguity due to a patent error in the settlement agreement where in respect of the maintenance obligation, ‘defendant’ was used instead of ‘plaintiff’. The respondent appealed to the court a quo, before which the first appellant contended that his maintenance obligation towards the respondent had lapsed because the latter Mr Visagie were married. The court concluded that because the registration formalities prescribed in s 29A of the Marriages Act had not been observed, there was no ‘valid marriage’ and thus the first appellant’s maintenance obligation to the respondent had remained extant. [29] As a prelude to my consideration of the ‘re-marriage clause’ in the settlement agreement, I make a general observation that the concept of ‘marriage’ has taken an elastic nature over the past decade or two. For example, African customary, Muslim, Hindu and Jewish, and same-sex unions have become accepted as ‘marriages’. Although none of the ceremonies performed in terms of these unions comply fully with the strict prescripts of s 29(A), they give rise to legal consequences of a marriage. [30] The fatal flaw in the court a quo’s judgment is that it did not consider the context of clause 5.1 of the settlement agreement. As Lord Steyn famously remarked, ‘In law, context is everything.’8 By narrowly focusing on whether the ceremony conducted on 9 December 2017 constituted a marriage, the court a quo asked a wrong question, and consequently, it was led astray in its analysis of the ‘re-marriage clause.’ The correct enquiry, to my mind, should have been whether the relationship between the respondent and Mr Visagie constituted a ‘re-marriage’ as envisioned in the settlement agreement. Viewed in this light, instead of it being the sole and focal point of the enquiry, the ceremony was but one of the factors to be taken into account in answering the contextual question. [31] It is common cause that the respondent and Mr Visagie cohabited, and for all intents and purposes, lived as husband and wife. According to the respondent, she and Mr Visagie are Christians, and in terms of their faith, any sexual relationship outside the confines of a marriage is sinful. The ceremony on 9 December 2017, she explained, was to ‘legalise our relationship before God and not to live in sin’. It is not clear how an avowedly ‘sinful’ relationship can be ‘legalised’ before God. Be that as it may, the respondent’s assertion confirms the depth of the relationship as being akin to that of a husband and wife. [32] This, in my view, is the context within which the word ‘re-marriage’ in the settlement agreement should be construed. The word was used in the context of providing maintenance for the respondent. The agreement was premised on an archaic and sexist notion that the respondent needed a man to financially maintain her. Whether the man she ‘re-married’ in fact supported her financially or was able to do so, was irrelevant to the first appellant’s maintenance obligation to the respondent. As soon as she ‘re-married’, that obligation would lapse. Seen in this light, and given the nature of the relationship between the respondent and Mr Visagie, the latter fulfilled the purpose for which the clause was inserted in the settlement agreement. The ceremony on 9 December 2017 was but a confirmation of a de facto state of affairs between the respondent and Mr Visagie. 8 In R v Secretary for the Home Department, ex parte Daly [2001] 3 All ER 433 (HL) at 447. This was approved in Aktiebolaget Hässle and Another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) para 1. [33] Regarding the ceremony itself, but for the non-completion of the marriage register, it was a complete marriage ceremony. It should be borne in mind that the non-completion of the marriage register was not an oversight or a mistake. It was a conscious decision aimed singularly at preventing the ‘re-marriage’ clause in the settlement agreement from kicking in. It was a manipulation of the law, concocted by the respondent and aided by a priest, to frustrate the eventuality which the parties had clearly in mind when concluding the settlement agreement. And to the extent it was assumed that the new man in the respondent’s life would automatically support her, it follows that Mr Visagie should be assumed to have done so. It is irrelevant that he says he did not. The result was, at least notionally, that the respondent enjoyed maintenance from the first appellant and Mr Visagie. This, in my view, is a contrived and disingenuous scheme which a court should frown upon, instead of giving it its imprimatur. [34] What is more, when interpreting documents, courts are enjoined to avoid a construction that leads to absurd results. In the present case, it is clear that the parties envisaged that once the respondent cohabited with another man in a relationship akin to that of husband and wife, the first appellant’s maintenance obligation to the respondent would lapse. The mischief intended to be addressed by the ‘re-marriage clause’ was the respondent being maintained simultaneously by the first appellant and a man she cohabitated with. By construing the clause within the strict prescripts of s 29A, the result is that the respondent received maintenance from two men: exactly what the parties had intended to avoid. In the court a quo, the respondent agreed to an amendment of the settlement agreement to the effect that, for future purposes ‘re- marriage’ would include her cohabitating with another man in a common law marriage. To my mind, far from signalling a different intention, it confirms the parties’ true, original intention when the settlement agreement was concluded. [35] For these brief reasons, I am unable to agree with para 2 of the order of the majority judgment, as well as the costs order as between the first appellant and the respondent. Given the view I take of the matter, I would order the respondent, in addition to the second respondent’s costs, to pay the first appellant’s costs. Her reprehensible conduct deserves that much. [36] Other than that, I am in full agreement with the rest of the order of the majority judgment and the reasoning underpinning it. ____________________ T M MAKGOKA JUDGE OF APPEAL Appearances: For appellants: E Prinsloo Instructed by: Wilsenach Van Wyk Goosen & Bekker Inc., Pretoria Bezuidenhout Inc., Bloemfontein. For respondent: J J Strijdom SC Instructed by: Rianie Strijdom Attorneys, Pretoria Symington De Kok Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY - JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL Bailey and Another v Bailey (Case no 1324/2019) [2020] ZASCA 178 (18 December 2020) From: The Registrar, Supreme Court of Appeal Date: 18 December 2020 Status: Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Today, the Supreme Court of Appeal (SCA) upheld the appeal by the appellant and set aside the order of the court a quo with the respondent paying the second appellant’s costs of appeal. The marriage of the first appellant, Mr Casper Hendrik Bailey, and the respondent, Mrs Hazel Johanna Cicelia Bailey, was dissolved by a court order incorporating a settlement agreement which they had concluded. The main issue for determination in this appeal was the interpretation of the word ‘remarriage’ in the settlement agreement. The appeal was with leave of this Court. The first appellant and the respondent were married in community of property. They separated in June 2016 with the common intention to divorce. The respondent then initiated divorce proceedings against the first appellant. Pending the finalisation of the divorce proceedings, they entered into negotiations which led to the signing of the settlement agreement. A decree of divorce was granted incorporating the signed settlement agreement which was made an order of the court. After the divorce, the respondent cohabited with Mr Visagie. Later, Reverend van Huyssteen, a minister of the Dutch Reformed Church, conducted a ceremony during which he blessed and sanctioned their cohabitation so that they would not ‘live in sin.’ The ceremony between the respondent and Mr Visagie later came to the attention of the first appellant. Upon the advice of the second appellant, the first appellant stopped paying maintenance to the respondent on the basis that the respondent had remarried, thus ending his duty to maintain her. The respondent approached the high court where she sought to hold the first appellant in contempt of a court order for his failure to pay maintenance since April 2018 in accordance to the settlement agreement. The first appellant filed a conditional counter-application in which he sought a declaratory order that on 9 December 2017 in the Dutch Reformed Church Montana; the respondent and Mr Riaan Visagie concluded an unregistered common law or Christian relationship of cohabitation as husband and wife, and, as a result of which his duty to pay maintenance had lapsed. The high court held that the ceremony conducted in respect of the respondent and Mr Riaan Visagie did not constitute remarriage. It further held that the meaning of the word did not include cohabitation, as the first appellant had contended. In this Court, it was held that the purpose of interpretation, is to establish the intention of the parties from the words used in the context of the document as a whole, the factual matrix surrounding the conclusion of the agreement and its purpose or (where relevant) the mischief it was intended to address. The SCA noted that the ordinary meaning of remarriage is to enter into a further marriage recognised by South African law (legal marriage). The SCA in its majority judgment held that none of the requirements set out in s 29A of the Marriages Act for the registration of a valid marriage were fulfilled during the ceremony. Although the SCA found that the high court was correct in holding that the ceremony was not a "remarriage", it expanded on the meaning of "remarriage" in the context of the settlement agreement to not include "cohabitation" as propounded by the appellant. It however, upheld the appeal on the grounds that the settlement agreement should be amended to read as the appellant sought in the high court ie to include "cohabitation" under clause 5.1 as the appellant sought in his counter claim in the high court, which was not granted. The order of the court a quo was set aside and the SCA upheld the appeal against the cost order debonis propris in respect of the second appellant. It ordered the respondent to pay the costs of the appeal in so far as the second appellant was concerned as she only conceded before the SCA that the high court erred in that regard. The minority judgment, Makgoka JA, held that for the reasons advanced in his judgment, he was unable to agree with the majority finding that the ceremony did not constitute a remarriage within the meaning of the deed of settlement between the parties, as well as the costs order as between the first appellant and the respondent. Given the view, Makgoka JA took of the matter, he would order the respondent, in addition to the second appellant’s costs, to pay the first appellant’s costs. Other than that, the minority judgment was in full agreement with the rest of the order of the majority judgment and the reasoning underpinning it.

1323

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 117/2009 In the matter between: STANLEY ELLIAS LEKETI Appellant and MOGALE ANDREW TLADI N.O. First Respondent FILIKANA HICKABOTH PETLELE Second Respondent ALBERT MOERANE Third Respondent THE REGISTRAR OF DEEDS Fourth Respondent Neutral citation: Leketi v Tladi (117/09)[2010] ZASCA 38 (30 March 2010) Coram: MTHIYANE, NUGENT JJA, HURT, GRIESEL and SALDULKER AJJA Heard: 5 March 2010 Delivered: 30 March 2010 Summary: Prescription ─ Plaintiff’s claim based on fraud committed on 25 June 1969 ─ claim only instituted in February 2004 ─ special plea of prescription upheld ─ held at the trial and on appeal that by exercising reasonable care knowledge of minimum facts necessary for plaintiff to institute claim could have been obtained in time ─ argument that fraud was a continuing wrong rejected. ___________________________________________________________ ORDER On appeal from: North Gauteng High Court (Pretoria) (Thlapi AJ sitting as court of first instance): ‘The appeal is dismissed with costs.’ JUDGMENT MTHIYANE JA (Nugent JA, Hurt, Griesel and Saldulker AJJA concurring) [1] The appeal is against the judgment and order of the North Gauteng High Court (Thlapi AJ) upholding a special plea of prescription and dismissing with costs, the appellant’s claim against the executor (the first respondent) and the second and third respondents, the beneficiaries of the estate of his grandfather, the Late Albert Mogale (Albert), for a declarator and vindicatory relief aimed at recovering from that estate immovable property, known as Nooitgedacht No. 287 situated in the District of Rustenburg (the property), which he alleged was the property of his father, the Late George Mogale (George), who died on 5 January 1966. [2] The appellant alleged that on 25 June 1969 Albert fraudulently caused the property to be transferred and registered in his name, by representing to the Registrar of Deeds, Pretoria (the fourth respondent) that he was the only male heir of George and thus entitled to the property upon intestate devolution according to Black custom. Albert also failed to disclose that George was survived by three children from his marriage with the appellant’s mother, Safira Mogale. These children were: the appellant born on 7 April 1959, Audrey Mogale born on 17 February 1953 and Merona Maledu born on 22 August 1955. [3] On 18 June 1974 Albert executed a will in which he bequeathed the disputed property to the second and third respondents and two other persons (now deceased) in equal shares as sole and universal heirs. The appellant and his sisters, Audrey and Merona, are not mentioned in the will. [4] Although Albert’s alleged fraud took place on 25 June 1969 the appellant’s summons commencing action was only served on the first to third respondents between 9 February 2004 and 13 May 2004. The fourth respondent, was only served on 20 July 2005. [5] Only the first respondent pleaded to the summons, the others elected to abide by the decision of the court. The first respondent filed a special plea of prescription, in which he alleged that the appellant’s claim had become prescribed by lapse of time. He contended that as the claim fell due on 15 June 1969, when the property was transferred to Albert (regard being had to the circumstance that the appellant attained majority on 7 April 1980), the running of prescription against the appellant had been delayed until 7 April 1981 under the provisions of s 13 of the Prescription Act 68 of 1969. The first respondent contended further that, as the summons was served more than three years after 7 April 1981, the appellant’s claim had become prescribed and accordingly fell to be dismissed with costs. [6] The appellant replicated that he could not have instituted action earlier because, until about 6 August 2003, he had had no knowledge of ‘the identity of the defendants and the facts from which the debt arose’. He averred that he only gained knowledge of ‘the proper identity’ of the defendants and facts giving rise to the cause of action on or about 6 August 2003, after obtaining information from certain documents in the national archives in Pretoria. The documents referred to are the following:  ‘a copy of the decree of divorce between Safira Mogale and George Mogale;  confirmation that the property in issue belonged to George Mogale;  documents relating to the winding up of the estate of George Mogale;  a declaration by Albert Mogale that he was the sole surviving male heir of George Mogale.’ [7] The sole question for decision at the trial was therefore whether the appellant’s claim had become prescribed, given that the fraud which formed the basis of the claim took place on 25 June 1969 and summons commencing action was only served in February 2004. It is not in dispute that because of the appellant’s minority at that stage, (he was only 10 years old in 1969) leaving aside the question of whether or not he knew of the fraud, the completion of prescription was delayed by virtue of the provisions of s 13 of the Prescription Act. Section 13 of the Act provides: ‘(1) If ─ (a) the creditor is a minor . . . the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (i).’ In the context of this case the ‘day’ referred to in para (a)(i) is the day the appellant turned 21, viz 7 April 1980. Thus, in terms of s 13(1)(a), the completion of prescription against the appellant would have been deferred until 7 April 1981. [8] In this context and for the purposes of considering the provisions of the Prescription Act, the appellant is the ‘creditor’ and any obligation on the part of the estate of Albert to restore to its rightful owner, property which he fraudulently appropriated is a ‘debt’1 as described in s 11(d) of that Act. In terms of the section the ordinary period of prescription for the ‘debt’ is three years from the date upon which a debt becomes due. However, the matter is further complicated by s 12(3) which provides: ‘A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.’ (emphasis added) [9] It is obviously difficult for the first respondent to get past the appellant’s bald assertion that he only obtained knowledge of the fraud on 6 August 2003 when he obtained documents from the national archives in Pretoria. It is a statement that can only be tested against the probabilities in the light of the totality of the evidence presented at the trial. The trial judge rejected the appellant’s version that he did not know that the farm belonged to his father, George, and that he only came to know about this on 6 August 2003. The learned judge concluded that ‘[i]n all probability the appellant and his sisters knew or were told even before they became majors that their right (to the property) stemmed from the fact that the farm had belonged to their father.’ The judge set out grounds for this conclusion. She said: ‘1. Even before plaintiff’s birth George had been frequenting the farm. According 1 In Barnett & others v Minister of Land Affairs & others 2007 (6) SA 313 (SCA) it was said at para 19: ‘Though the Act does not define the term “debt,” it has been held that, for purposes of the Act, the term has a wide and general meaning and that it includes an obligation to do something or refrain from doing something.’ After referring to other relevant authorities Brand JA went further to say there is no reason why the term ‘debt’ would not include ‘a claim for the enforcement of an owner’s right to property.’ He cited with approval Evins v Shield Insurance Co Ltd 1979 (3) SA 1136 (W) at 1141F-G where King J said: ‘The word “debt” in the Prescription Act must be given a wide and general meaning denoting not only a debt sounding in money which is due, but also, for example, a debt for the vindication of property.’ to Ntlatseng, on the date of plaintiff’s birth George had gone to the farm in Rustenburg. 2. According to Maureen, George used to visit them at their maternal grandfather’s home in Rustenburg. He came from the farm driving his tractor; 3. Maureen approached Hilda and pieces of corrugated iron and a table were pointed out as the only remaining items from their home belonging to them. In my view the home referred to then was the one in which George lived on the farm. In all probability, Maureen went to see Hilda, about the farm which belonged to her father. 4. Maureen accompanied Hilda to see Hugh Parkes, the attorney. In my view, it is unlikely that she would have gone to Johannesburg, if not to establish first hand, the reason why they could not inherit the farm. The possibility is there that she was informed of Albert’s Last Will and Testament. 5. Their uncle Nnakgolo George undertook to ensure that they received what rightfully belonged to them to the exclusion of the other grandchildren. 6. Independently they reported Albert’s estate to the Master in Mmabatho. Hilda, Albert’s surviving spouse or the other grandchildren did not feature.’ [10] Although the above reasons are in themselves compelling, in my view, the real question for decision in this appeal is whether on a consideration of the totality of the available evidence, it can be said that the appellant could not have acquired knowledge of the fraud on the part of Albert on 25 June 1969, ‘by exercising reasonable care’, as required in the proviso to s 12(3) of the Prescription Act. [11] One only has to look at his version to come to the conclusion that he took no steps at all, let alone ‘reasonable’ steps, to enforce his claim in a manner envisaged in s 12(3) of the Prescription Act. The appellant and his sisters, Audrey and Merona, knew all along that they were going to inherit the property, as Albert’s intestate heirs. The appellant says he did not know that the property belonged to his late father, George, nor was he aware that Albert had made a will bequeathing the farm to the second and third respondents and two other persons (now deceased). Albert died in 1976. Understandably he was too young then to do anything about the matter. But after graduating from medical school in 1983 he could have taken steps to find out in whose name the property was registered. Instead what did he do? After completing his medical degree, he set up practice in Thaba Nchu in 1984 and later went to practise in Bloemfontein in 1985. Subsequently he moved to Potchefstroom during 1986 and finally settled in Springs during 1987. [12] The appellant testified that he only started applying his mind to the property issue in 1986 and 1987 when he returned to practise in Gauteng. In reply to a question in cross-examination he said it did not strike him as strange that after 11 years the property, which was his entitlement, had not yet been transferred and remarked somewhat curiously: ‘It was not strange for me at that point because at that point there was no dispute / I came back from my studies and I needed to inquire who was then taking care of the property.’ It is clear from the above remark that claiming the property was the least of his priorities. He was more concerned about who was taking care of the farm because he had obtained information that there was a company that was carrying on mining operations on it and another person who had planted sunflowers there. It is not clear from the record what those enquiries yielded. [13] Two years later in 1989 the appellant and his sister Merona went to consult an attorney, Mr Makhambeni, to seek advice on how to deal with the ‘people that were mining granite’ on the farm and those ‘who had planted sunflower for the trading’ purposes. There is no indication that the appellant sought to instruct Makhambeni to enforce his entitlement to the farm. Makhambeni requested them to obtain the marriage certificate of their parents, confirming that they were born of George and their mother, Safira Mogale. They were also asked to obtain copies of death certificates of George and Albert and some confirmation that George was the son of Albert. [14] Merona obtained the requested documents from the Department of Home Affairs, Rustenburg, and when she returned to Makhambeni’s office with them in 1990 she discovered that he had been struck off the roll of attorneys. [15] In the meantime the appellant was having discussions with members of the family and the purpose and details of these meetings is far from clear from the record. Be that as it may, they culminated in the appellant meeting one of his aunts, Ms Nthlaseng Mogale, from whom he went to ‘check’ who was actually taking care of the farm. His aunt referred the appellant to her brother, George Nagole Mogale, who was ‘the one who had been taking care of the farm’. The appellant and his sister, Merona, went to visit the gentleman concerned and he assured them that he would see to it that the farm was returned to them. It appears from the record that this meeting took place around 1999. Arrangements were then made for the appellant and his sisters to go to Tlhabane Magistrates’ court, presumably for the purpose of winding up the estate of Albert who died in 1976. The appellant’s uncle, George Nagole Mogale, most unfortunately died in 2001 before the visit to the Tlhabane Magistrate’s court. [16] Merona ended up going to the magistrate together with her and the appellant’s half brother, Sipho Leketi. On 21 September 2001 they were issued with a letter of authority which authorized them to take control of the assets of the estate of Albert. On 29 November 2002 the said letter of authority was withdrawn, when it was discovered that Albert had in fact died testate and consequently the first respondent was appointed the executor of the estate of Albert. [17] The appellant is not an ordinary lay person. He is a medical practitioner, who qualified as such in 1983. He commenced his practice in 1984 and was certainly at that stage in a position to engage an attorney to secure transfer of the farm into his name. On his own version as early as 1978 there was never any dispute as to whom the farm (the property) was to go to. [18] Obtaining a deed of transfer from the Deeds Registry would have provided the appellant with the required minimum facts for the institution of a claim against the estate of his grandfather, Albert, much earlier than on 6 August 2003. It seems to me that the adverse operation of s 12(3) is not dependent upon a creditor’s subjective evaluation of the presence or absence of ‘knowledge’ or minimum facts sufficient for the institution of a claim. In terms of s 12(3) of the Prescription Act the ‘deemed knowledge’ imputed to the ‘creditor’ requires the application of an objective standard rather than a subjective one. In order to determine whether the appellant exercised ‘reasonable care’ his conduct must be tested by reference to the steps which a reasonable person in his or her position would have taken to acquire knowledge of the ‘fraud’ on the part of Albert. (See Drennan Maud & partners v Pennington Town Board.2) On the application of that objective standard, it is clear that if the appellant had exercised reasonable care he could have acquired 2 1998 (3) SA 200 (SCA) at 209F-G. knowledge of the fraud, long before the claim prescribed, and thus the requisite minimum facts to enable him to institute his claim timeously. [19] On the evidence, it is clear that the appellant’s failure to institute action timeously was not due to his lack of or inability to obtain knowledge but rather to his dilatoriness as correctly found by Thlapi AJ. It took him 6 years (1981 – 1987) after his claim had prescribed to begin to make enquiries. It seems that he was more concerned about establishing the identity of the person who was ‘taking care of the farm’ so as to take up the issue as to who was conducting mining operations on the property and who were planting sunflowers. It then took him another 3 years (1987 – 1990) to consult an attorney for the first time. The appellant was not indigent and had the means to instruct an attorney. Then some 14 years passed before the appellant made enquiries about documents, which were ultimately retrieved from the National Archives, Pretoria on 6 August 2003. In these circumstances it is difficult to disagree with the judge a quo’s finding that the appellant’s dilatory and nonchalant conduct was the key contributory factor to his purported inability to obtain ‘knowledge’ timeously. [20] A further ground advanced by the appellant for his contention that his claim has not prescribed is that the fraud committed by his grandfather, Albert, on 25 June 1969 was a continuing wrong. Mr Bokaba for the appellant, argued that for as long as the property remained registered in the name of Albert, the claim remains alive. No authority was cited for the submission that a claim based on fraud does not become prescribed. [21] The point is clearly without merit. Fraud is an act of deceit which resulted in a single act of transfer and registration which was completed on 25 June 1969. It is that single act which constitutes the appellant’s cause of action and does not amount to a continuing wrong. (cf Barnett & others v Minister of Land Affairs & others3) [22] In the result and on either basis the appellant fails. The following order is made: ‘The appeal is dismissed with costs.’ ________________________ K K Mthiyane Judge of Appeal 3 At 320I-321A. APPEARANCES APPELLANT: T J B Bokaba SC (with him D C Mpofu) Instructed by Noko Inc, Pretoria Naudes, Bloemfontein FIRST RESPONDENT: F J Erasmus Instructed by Rooth Wessels Motla Conradie, Pretoria Rosendorff Reitz Barry, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL 30 March 2010 STATUS: Immediate Leketi v Tladi (117/09)[2010] ZASCA 38 (30 March 2010) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The SCA today dismissed with costs, an appeal by the appellant, Dr Stanley Ellias Leketi, from the judgment of the North Gauteng High Court (Thlapi AJ), which dismissed his action with costs, after a finding that his claim had become prescribed. Dr Leketi had instituted a claim for the recovery of certain immovable property known as Nooitgedacht No 287 situated in the District of Rustenburg, which belonged to his father, the late George Mogale, who died on 5 January 1966. Dr Leketi alleged that his late grandfather had fraudulently caused the property to be transferred and registered into his name on 25 June 1969, by claiming to be George’s only surviving male heir and failing to disclose to the Registrar of Deeds, Pretoria that George was survived by three children from his marriage namely, Dr Leketi and his two sisters, who would have been lawfully entitled to inherit the property as George’s intestate heirs. Unfortunately Dr Leketi delayed instituting action and only caused his summons to be served in February 2004, some 24 years after he had turned 21 years. The executor of the estate of his late grandfather, Albert Mogale, took the point that his claim had become prescribed. The plea of prescription was upheld by the North Gauteng High Court and the SCA agreed with that finding. Dr Leketi’s appeal was accordingly dismissed with costs.

2582

non-electoral

2014

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT NOT REPORTABLE Case No: 20079/14 In the matter between: TSHIFHIWA LEROY RAVELE APPELLANT and - THE STATE RESPONDENT Neutral citation: Ravele v S (20079/14) [2014] ZASC 118 (19 September 2014) Coram: Cachalia and Bosielo JJA and Mocumie AJA Heard: 20 August 2014 Delivered: 19 September 2014 Summary: Appeal against both convictions and sentences ─ rape read with s 51(1) of the Criminal Law Amendment Act 105 of 1997 and s 3 of the Criminal Law Amendment Act 32 of 2007─ right to a fair trial ─ attention of the appellant that he could be sentenced to life imprisonment not drawn at the outset ─ duplication of convictions ─ kidnapping committed as part of rape ─ proper approach to formulating charges under s 51 of the Criminal Law Amendment Act 105 of 1997 ─ whether sentence imposed is appropriate ─ no rehabilitative element infused in previous sentences. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from Limpopo High Court, Thohoyandou (Booi AJ sitting as court of first instance): 1 The appeal in respect of the conviction on counts 1 and 3 is upheld. 2 The appeal in respect of the conviction on count 2 is dismissed. 3 The appeal in respect of the sentence on count 2 succeeds. 4 The order of the trial court is set aside and the following order is substituted in its place: ‘(a) The accused is found not guilty on counts 1 and 3. (b) The accused is found guilty on count 2. (c) The accused is sentenced to 8 years’ imprisonment’. 5 The sentence referred to in para 4(c) above is antedated to 9 June 2010. ______________________________________________________________ JUDGMENT ______________________________________________________________ Mocumie AJA (Cachalia and Bosielo JJA concurring): [1] The appellant, who was 20 years old at the time of the commission of the offences discussed below, was convicted on 4 June 2010 by the Limpopo High Court, Thohoyandou (Booi AJ sitting as court of first instance) on two counts of rape read with s 3 of the Criminal Law Sexual Offences and Related Matters Amendment Act 32 of 2007 (the Criminal and Sexual Offences Amendment Act) and s 51(1) and Part I of Schedule 2 of the Criminal Law Amendment Act 105 of 1997 (the Act), as amended, and one count of kidnapping. The appellant was sentenced to life imprisonment on both counts of rape and five years’ imprisonment for kidnapping, the latter being ordered to run concurrently with the sentence imposed on count 2. [2] The appellant was initially granted leave to appeal against the sentence only by the court a quo, on 8 December 2011. However, upon reading the record, it became apparent that the appellant may have been improperly convicted on all counts. Accordingly, at the request of the presiding judge, as the Supreme Court of Appeal has no jurisdiction to entertain an appeal on the convictions in the absence of leave having been granted by the high court, the registrar of this court directed a letter to the legal representatives of both the appellant and the state to: (a) confirm an instruction from the appellant that he wished to appeal the convictions; and (b) approach the high court promptly to obtain the necessary leave; and (c) to bring the contents of the letter ─ which included a discussion on the difficulties with each of the convictions, including the failure of the trial judge to properly explain the nature of the charges to the appellant – to the attention of the court. The court a quo duly granted leave to appeal on conviction on all counts, on 7 August 2014. [3] In view of what will be discussed hereafter under s 51(1) of the Act, it is well to remind oneself at the outset that, in invoking the minimum sentencing regime contained in the Act, compliance with fair trial requirements is essential. Thus an accused person must be informed of the charges he is facing with sufficient detail to enable him or her to answer properly to such charge. Section 35(3) of the Constitution1 provides for a fair trial for an accused person, while s 84(1) of the Criminal Procedure Act 51 of 1977 (the CPA) stipulates that the charge must contain the essential particulars of the offence.2 This court has also in numerous judgments stated that a failure to inform an accused person that he or she is facing a serious charge under the Act and the sentence which may be imposed, may, depending on the facts 1 The Constitution of South Africa, 108 of 1996. 2 Section 35(3)(a) of the Constitution provides: ‘Every accused person has a right to a fair trial, which includes the right ─ (a) to be informed of the charge with sufficient detail to answer it.’ Section 84(1) of the CPA: ’Subject to the provisions of this Act and of any other law relating to any particular offence, a charge shall set forth the relevant offence in such a manner and with such particulars as to the time and place at which the offence is alleged to have been committed, and the person, if any, against whom and the property, if any, in respect of which the offence is alleged to have been committed, as may be reasonably sufficient to inform the accused of the nature of the charge.’ and circumstances of the case, result in a finding that it would be unfair to sentence the accused in terms of the Act.3 [4] In this case, in respect of count 1, the State properly conceded that the appellant had not been properly informed of the nature of the charges against him. This issue need not be considered further because it is also clear from the evidence that the appellant was wrongly convicted. [5] The incident giving rise to count 1 occurred on 8 November 2009. The issue was whether or not the appellant had consensual sexual intercourse with the complainant Ms Khuthadzo Gadizi. It is common cause that she was with her friends, Lorraine Thabelo Ndou (Lorraine), Nancy and Christina Mudau (Chrissie), at Lorraine’s home where the appellant found them around 19h00. She testified that the appellant had in their presence and at knifepoint dragged her to his home where he raped her on two or three occasions. She left his home the following morning and reported the incident. [6] The appellant’s version was that the complainant accompanied him voluntarily from Lorraine’s home, had sexual intercourse with him and slept over before departing in the morning. In response to a question why she would falsely have implicated him, he explained that this was probably because she wanted to conceal the fact that she had accompanied him voluntarily, from her current boyfriend, Hulisani. [7] There were several inconsistencies in her version. I mention four which I think are significant. First, some of the state witnesses contradicted the complainant’s version that she had been dragged away from Lorraine's home against her will. They therefore confirmed the appellant’s version on this aspect. Secondly, Lorraine confirmed that the complainant was in a relationship with Mavhona, which also corroborated the appellant’s version and contradicted her denial. Thirdly, the evidence of Hulisani, the complainant’s current boyfriend as to what transpired at the appellant’s house 3 See S v Legoa 2003 (1) SACR 13 (SCA); S v Ndlovu 2003 (1) SACR 331 (SCA); S v Makatu 2006 (2) SACR 582 (SCA); S v Kolea 2013 (1) SACR 409 (SCA). directly contradicted her version as to what had happened. He testified that he went to look for her at the appellant’s home, but when he knocked on the window nobody responded. He then left. In contrast she testified that Hulisani saw the appellant dragging her away and remonstrated with him, which he flatly denied. Finally, she testified that the appellant raped her several times throughout night. At the end of her evidence it was not clear how many times ─ on her version ─ she had been raped. At one point during her testimony she said that it had happened on three occasions; at another, she said that it had happened twice. [8] I should add that the medical evidence, on which the court a quo relied heavily to support the conviction, showed no more than that sexual intercourse had taken place. There were, as in similar circumstances in most cases of this nature, no obvious injuries to corroborate the alleged rape. It follows that the court a quo misdirected itself in finding that the medical evidence provided corroboration for the rape. [9] In the circumstances the appellant ought to have been found not guilty on this count. The state quite properly conceded before us that the conviction could not be sustained. [10] In respect of count 2, it does not appear what charge was put to the appellant. There was no indictment or summary of substantial facts in the court record. As in count 1, it appears that the appellant was made to plead to a charge of rape in terms of s 51(1) of the Act without any reference to the circumstances sought to be proved in Part 1 of Schedule 2; the relevant provision for rape, namely para (b)(i) where the victim is alleged to be under 16 years of age. The judgment is silent on why a sentence of life imprisonment was imposed, but it is clear that this sentence was imposed because the judge assumed that the Act was applicable. The State conceded that a proper charge had not been put to the appellant, and the judge had misunderstood which provisions of the Act were applicable. In the circumstances we must approach the matter on the basis that the Act did not apply. I turn to consider the evidence. [11] The complainant, who was almost 16 at the time of this incident, testified that she met the appellant at about 19h00 on 29 November 2008. It was not dark yet and she recognised him as someone she knew. She testified that the appellant grabbed her and took her to a nearby church where he raped her. Thereafter he took her to his house where he raped her again. The appellant kept her in his house from 19h00 until the next morning, around 5h00. [12] The appellant’s version was, the complainant wrongly identified him as the perpetrator. He claimed to have been elsewhere at the time of the incident. The complainant and her brother were resolute in their identification of the appellant as the person who kidnapped and raped her that night. They both testified that they knew the appellant as they reside in the same area. The appellant did not dispute this. To my mind, this prior knowledge excludes every possibility of a mistaken identity.4 It follows that the appellant’s version was palpably false. He was therefore properly convicted on this count. [13] The circumstances of the alleged rape resulted in the appellant being charged with two offences: rape and kidnapping. The state accepted that the conviction on the kidnapping count constituted a duplication of convictions. The concession was properly made and nothing further need be said about this count. [14] Having come to the conclusion that the court a quo erred in sentencing the appellant to life imprisonment under the Act, it is now open to this court to consider sentence afresh. The appellant was 20 years of age at the time of the commission of the offence. He was an orphan. He was married in terms of customary law. He was temporarily employed at a carpentry workshop earning a salary of R1600 per month. To his discredit, he had a relatively long 4 See R v Dladla & others 1962 (1) SA 307 (A) at 310B-E. Unlike in S v Mthetwa 1972 (3) SA 766 (A) and S v Charzen & another 2006 (2) SACR 143 (SCA), this case is not a case of total strangers in which one would have expected the witnesses to explain in detail the peculiar features with which they identified the appellant. list of previous convictions ranging from assault to indecent assault.5 He had attended school until grade 11. It was submitted on his behalf that he showed remorse. Based on his youthfulness, it was submitted that he was a good candidate for rehabilitation. [15] It is trite that rape is not only a very serious offence but it is prevalent in this country. It is a humiliating, degrading and brutal invasion of the privacy, dignity and the person of the victim.6 In this case the victim was a young girl of 15 years. She was raped twice by someone she knew and who lives in the same community. [16] Regrettably, a Victim Impact Report was not obtained to assist the trial court in understanding the impact of the rape on the complainant. It is incumbent on the prosecution to secure such evidence to assist the court to assess the seriousness and impact of the offence on the victim. We can however, assume that the complainant suffered some trauma. [17] The same holds true regarding the failure of the trial court to obtain a pre-sentencing report on the accused. No court should proceed to sentence a youthful person unless it has all the facts relevant to sentencing before it to enable it to decide on an appropriate sentence. The proper judicial approach to sentencing was enunciated as follows in S v Siebert:7 ‘Sentencing is a judicial function sui generis. It should not be governed by considerations based on notions akin to onus of proof. In this field of law, public interest requires the court to play a more active, inquisitorial role. The accused should not be sentenced unless and until all the facts and circumstances necessary for the responsible exercise of such discretion have been placed before the court.’ 5 2001-10-05, Assault, 30 days IMP; 2002-08-08, Assault, AOG R20.00; 2003-10-13, Indecent Assault, AOG R100.00; 2003-12-12, Robbery, 4 months’ imprisonment;2004-07-21, Robbery, 6 months’ imprisonment; 2005-06-17, Abuse of drugs, R1000,00 or 3 months’ imprisonment; 2005-08-03, Assault, 6 months’ imprisonment; 2006-12-14, Assault, 6 months’ imprisonment. 6 S v Chapman 1997 (3) SA 341 (SCA) at 344I-J. 7 S v Siebert 1998 (1) SACR 554 (A) at 558i-559a; S v Matyityi 2011 (1) SACR 40 (SCA) para 15-17. [18] However, it remains the court’s primary duty to dispense justice, through imposing well balanced and appropriate sentences which will not only address the accused’s favourable personal circumstances but will address the seriousness of the offence and take into consideration the interests of society which include the victim of the offence committed. Sexual assaults especially on the most vulnerable of our society, young children, have become endemic in our society. Our courts have a duty to send a clear message to society that the courts view such offences seriously and that they are willing and prepared to impose the kind of sentence which whilst serving as a deterrent both individual and general, will also serve to protect society against people who pose a serious threat to their well-being in society. As this court remarked in S v N:8 ‘Bearing in mind that a sentence does more than deal with a particular offender in respect of the crime of which he has been convicted ─ it constitutes a message to the society in which the offence occurred. The interests of society must thus also be taken into account. The sense of outrage justifiably roused by the offence of rape in the right thinking members of a South African society in which sexual violence is so endemic and shows no sign of abating, must . . . be a critical factor in the imposition of a suitable sentence . . ..’ [19] He has a long list of previous convictions which, on the face of it, shows a propensity for criminality. He had his first clash with the law at the tender age of 13 years. Amongst his previous convictions is one of indecent assault for which he was convicted when he was 14 years old. Nonetheless, it was wrong for the court a quo to look at the appellant’s previous convictions and conclude therefrom that there were no prospects for his rehabilitation. There is no evidence to inform the court of his upbringing, his social and cultural background, his family structure and whether his upbringing had any influence on his susceptibility to crime and his anti-social behaviour and whether he would have been receptive to any rehabilitation program. What is clear is that he is still relatively young. He requires correction and rehabilitation, but not destruction,9 lest he returns to the very society from which he comes more hardened and desensitised to living amongst law 8 S v N 2008 (2) SACR 135 (SCA) para 30. 9 See S v Phulwane & others 2003 (1) SACR 631 (TPD). abiding citizens. Programs aimed at rehabilitation of young offenders may give him an opportunity to change his behaviour, especially that towards women. [20] Although a sentence of life imprisonment is clearly inappropriate, a sentence of an exemplary term of imprisonment is nevertheless appropriate, taking into account the following aggravating factors. The complainant was well known to the appellant; he was older than her; he took her against her will and kept her away from the comfort and safety of her home and her parents for one night. Throughout the trial the appellant maintained his innocence and showed no remorse. It was only after his conviction that he claimed to be remorseful. It is in his interest as well as the broader society that he stays long enough in a correctional facility to allow correctional services to take him through all the required programs in a meaningful way to rehabilitate him. Short term imprisonment will have no such desired effect. Having considered all the facts relevant to sentence, I am of the view that a sentence of imprisonment of eight years is the most appropriate. [21] In conclusion, it will be remiss of me to not refer to what this court stated in S v Makatu,10 namely that regrettably there are many cases which have come to this court from Limpopo High Court with similar problems referred to above, with reference to the failure of the State to set out the provisions of the relevant section and circumstances, ie s 51(1) of the Act. Unfortunately this has resulted in accused persons not being fairly tried and appropriately punished for the crimes which they in fact have committed. This brings the administration of justice into disrepute and erodes public confidence in the criminal justice system. The prosecution must be meticulous in their preparation of charge sheets and indictments to avoid a recurrence of this kind of situation. A copy of this judgment shall be made available to the National Director of Public Prosecutions (NDPP) to deal with this problem through proper and advanced training of prosecutors who deal with these matters. 10 S v Makatu 2006 (2) SACR 582 (SCA). [22] In the result, the following order is granted: 1 The appeal in respect of the conviction on counts 1 and 3 is upheld. 2 The appeal in respect of the conviction on count 2 is dismissed. 3 The appeal in respect of the sentence on count 2 succeeds. 4 The order of the trial court is set aside and the following order is substituted in its place: ‘(a) The accused is found not guilty on counts 1 and 3. (b) The accused is found guilty on count 2. (c) The accused is sentenced to 8 years’ imprisonment’. 5 The sentence referred to in para 4(c) above is antedated to 9 June 2010. ________________________ B C MOCUMIE ACTING JUDGE OF APPEAL Appearances For the Appellant: L M Manzini (with him M P Legodi) Instructed by: Justice Centre, Polokwane Justice Centre, Bloemfontein For the Respondent : Ms S M Mahada Instructed by: The Director of Public Prosecutions, Thohoyandou The Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 19 September 2014 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. T L Ravele v S The Supreme Court of Appeal (SCA) upheld the appeal of the appellant, a 20 year old offender, against his conviction on one count of rape read with the provisions of s 51(1) of the Criminal Law Amendment Act (the Act), 105 of 1997 and kidnapping but confirmed the conviction on another count of common law rape. It furthermore upheld the appeal against a sentence of life imprisonment for the rape and substituted it with imprisonment for eight years, taking into account his relative youthfulness and the possibility of rehabilitation. The SCA held that correction and rehabilitation, are in the circumstances, more appropriate and not destruction of the youthful appellant. Regarding count 1 of rape, the SCA held that, given the serious contradictions in the State’s version, the court a quo erred in finding that the appellant’s guilt had been proved beyond reasonable doubt and set the conviction aside. Regarding count 3, kidnapping, the SCA held that as the evidence showed conclusively that the complainant was kidnapped solely to facilitate the eventual rape, the conviction on kidnapping amounted to a duplication of convictions and set the conviction aside. With regard to count 2, rape, the SCA found that the State had not proved the circumstances which brought it within the purview of the Act which would justify a sentence of life imprisonment. The SCA found that the appellant was guilty of the common law crime of rape and that in the circumstances a sentence of imprisonment for eight years was appropriate. --- Ends ---

3247

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT REPORTABLE Case number : 641/2006 In the matter between : VOLCANO AGROSCIENCE (PTY) LTD APPELLANT and THE MINISTER OF AGRICULTURE FIRST RESPONDENT ERNEST MOKANTLA NO SECOND RESPONDENT CORAM : HARMS ADP, BRAND, PONNAN, MAYA JJA et KGOMO AJA DATE : 16 NOVEMBER 2007 DELIVERED : 26 NOVEMBER 2007 Summary: Act 36 of 1947 – ‘agricultural remedy’ as defined imported in contravention of s 16(1) – option contemplated in s 16(6)(a) available to illegal importer – despite the additional contravention of s 7. Neutral citation: This judgment may be referred to as Volcano Agroscience (Pty) Ltd v Minister of Agriculture [2007] SCA 146 (RSA) BRAND JA/ BRAND JA: [1] The first respondent is the Minister responsible for the National Department of Agriculture (‘the Department’). The second respondent is the officer in the Department who was appointed by the Minister as the ‘registrar’ in terms of s 2 of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36 of 1947 (‘the Act’). During the first half of 2003, officials in the Department, acting under delegation of the registrar, seized two consignments of pesticide called Aldicarb which had been imported by the appellant (Volcano) from China. After that, both consignments remained in a warehouse under the control of the Department. [2] About two years later, Volcano brought an application in the Durban High Court against the Department for the return of the two consignments, essentially on the basis that it was the owner and thus entitled to possession of the Aldicarb. In the alternative, it sought an order, based on s 16(6)(a)(i) of the Act, that it be allowed to export the Aldicarb to another country. Though the second respondent was cited, in his official capacity, as an interested party, no specific relief was sought against him. The court a quo, Norman AJ, found both Volcano’s claims wanting. Consequently she dismissed the application with costs. The appeal against that judgment is with her leave. [3] Although the papers are surprisingly lengthy and abound with immaterial squabbles, the salient facts are quite simple and, for the most part, common cause. So it appears that Aldicarb is a pesticide destined for use in the control of soil pests. It therefore constitutes an ‘agricultural remedy’ as defined in the Act. Hence it is required to be registered by the registrar in terms of s 3. An agricultural remedy not so registered may not be imported in terms of s 16(1) nor sold in terms of s 7(1). In fact, both the importation and the sale of an unregistered agricultural remedy are rendered criminal offences by s 18(1)(c). It is common cause that the Aldicarb involved had not been registered under s 3 prior to importation and that Volcano had therefore contravened s 16(1) in respect of both consignments. It also appears to be undisputed, at least as far as the first consignment is concerned, that it had been sold by Volcano in contravention of s 7 to a distributor in Polokwane who, in turn, resold part of it to a farming operation for illegal use in this country. [4] Criminal charges under s 18(1)(c) – read with s 7 – were brought against the distributor in Polokwane, arising from its sale to the farmer. Yet, in the two years between the seizure and the present application, no charges have been brought against Volcano or any of its employees with regard to either of the two consignments. In fact, I may add in passing, it is common cause that even at this stage nothing further has happened in this regard. In the absence of any criminal prosecution, Volcano demanded the release of the consignments from the Department for the sole purpose of exportation to Zimbabwe, pursuant to a request by a prospective purchaser in that country. These demands proved to be fruitless. This led to Volcano’s application in the court a quo which, as we now know, also met with no success. [5] The court a quo seems to have accepted – rightly in my view – that, particularly in the absence of any evidence to the contrary, Volcano had established its ownership of the Aldicarb. Yet, the court held, ownership in itself could not serve as a basis for the claim that the substance be returned. The reason for this finding, as it appears from the court’s judgment, was that, because ss 3, 7 and 16(1) of the Act had been contravened, Volcano could not be in lawful possession of the Aldicarb. Hence it could not, despite its common- law ownership, seek the court’s assistance in attaining what would amount to unlawful possession of the substance. As to Volcano’s alternative claim based on s 16(6)(a) of the Act, the court a quo held that Volcano is precluded from exercising the option afforded by the section – to which I shall presently return – because it not only infringed s 16(1) by importing the Aldicarb illegally, but also contravened s 7 of the Act by selling it in this country. [6] Whilst s 16(6)(a) of the Act only constituted an alternative basis for Volcano’s claim in the court a quo, it somehow evolved into the mainstay of its case on appeal. This appears, inter alia, from the way in which the primary issue to be decided on appeal was formulated, namely, whether Volcano, as an illegal importer under s 16(1) was precluded from exercising the option available to it in terms of s 16(6)(a), in circumstances where it had also contravened ss 3 and 7 of the Act. [7] Pivotal to this issue is, of course, the wording of s 16(6)(a). It provides: ‘(6)(a) If any . . . agricultural remedy . . . has been imported contrary to the provisions of this section, such . . . agricultural remedy . . . shall at the option of the importer thereof- (i) at the expense of such importer be removed by him from the Republic within such period as the registrar may determine; or (ii) be forfeited to the State and be either destroyed or otherwise disposed of as the registrar may direct, and if such importer fails to remove such . . . agricultural remedy . . . in terms of the provisions of subparagraph (i) within the period referred to in that subparagraph, it shall be forfeited to the State, and be either destroyed or otherwise disposed of as the registrar may direct.’ [8] The court a quo’s reasoning as to why the option under s 16(6)(a) is not available to an importer who, apart from s 16(1), also contravened some other provision of the Act, appears from the following passage in its judgment: ‘In my view, s 16(6)(a) must be given its ordinary meaning and the words “contrary to the provisions of this section”, must be confined to s 16 only and not be extended to include other sections. Having said that, I am of the view that the option is not available to the applicant where there has been a contravention of ss 3 and 7 which are not part of s 16 of the Act. In such circumstances, the registrar is entitled to exercise the powers conferred upon him by the Act which include destroying the agricultural remedy or having it forfeited to the State.’ [9] I proceed to analyse this reasoning which, essentially, also formed the basis of the Department’s argument on appeal. As to the court’s reliance on the phrase ‘contrary to the provisions of this section’, it must, of course, be borne in mind that the phrase is introduced by the verb ‘imported’. Read in this context, it seems to indicate no more than the threshold requirement for the option becoming available to the illegal importer. Thus, the jurisdictional fact, as it were, on which the option depends is that the substance involved must have been imported in contravention of s 16(1). Nothing more is required. As I see it, the plain wording of the section therefore indicates that if this jurisdictional fact is present, the importer can exercise the option and it matters not that some other provision of the Act has also been contravened. [10] As to the court’s reference to contraventions of ss 3 and 7, I find it convenient to deal with s 3 first because the reference to this section serves no other purpose than to obfuscate. As I understand the position, a contravention of s 16(1) presupposes a contravention of s 3. An exclusion of the importer’s option under s 16(6)(a) whenever s 3 has been contravened would thus render the option nugatory. This, I think, makes any further consideration of s 3 in the present context unnecessary. [11] With regard to s 7, the court’s perception appears to have been that an infringement of this section – either on its own, or in combination with an infringement of s 16(1), which of the two, is not entirely clear – somehow bestows an automatic right on the registrar to have the substance involved forfeited or destroyed. This is simply not so. Section 16(6)(a) itself certainly affords the registrar no such automatic right. The registrar’s power to do so under this section only becomes available to him when the illegal importer chooses not to remove the substance from the Republic or proves to be unable to do so. After all, the purpose of the section is clearly not to penalise, but to ensure that unregistered substances are not allowed into the Republic. And once in the Republic to be safely and expeditiously removed or destroyed. The only other reference to forfeiture in the Act, apart from s 16(6)(a), is to be found in s 18(2). In so far as it is relevant, this section provides: ‘The court convicting any person of an offence under this Act, may, upon the application of the prosecutor, declare any . . . agricultural remedies . . . in respect of which the offence has been committed and all . . . agricultural remedies . . . of a similar nature to that in respect of which such person has been convicted, and of which such person is the owner, or which are in his possession, to be forfeited to the State.’ [12] In terms of s 18(2) a contravention of s 7 will therefore only lead to forfeiture if two requirements are satisfied. One, there must be a prosecution followed by a conviction. Two, the court – and not the registrar – must declare the substance involved, forfeited. And I do not believe that the position is any different when both s 16(1) and s 7 are contravened. Succinctly stated, the illegal importer in that situation is entitled to exercise the option in terms of s 16(6)(a), unless the Department initiates a prosecution for the contravention of s 7 and then, upon conviction, obtains a forfeiture order from the court under s 18(2). [13] To complete the picture: as the quoted passage from the court a quo’s judgment shows, the sum total of the Department’s case in this matter – which was upheld by the court – was that the Aldicarb had automatically become forfeited to the State. Though raised as a theoretical possibility in argument on appeal, the Department’s case on the papers was not that it should be allowed to retain the Aldicarb pending a prosecution and conviction of Volcano for contravening s 7, in which event it then intended to seek a forfeiture order. If this were the Department’s case, there would be no basis upon which the court a quo could, as it proposed to do, place the Aldicarb at the disposal of the Department to be either forfeited or destroyed. What is more, that case would have required some indication of a serious intent on the part of the Department to proceed with criminal proceedings against Volcano. Even an express statement of such intention – which there was not – would have raised the question why no such steps had been taken during the more than two years that had elapsed before Volcano’s application was brought. It seems virtually self-evident that, if the Department seeks to employ this stratagem to retain contravening goods, a prosecution must follow within reasonable time which, prima facie, two years is not (cf eg Choonara v Minister of Law and Order 1992 (2) SACR 239 (W) at 246a-d and Hiemstra, Suid-Afrikaanse Strafprosesreg, 6 ed (by Kriegler and Kruger) at 54). [14] The conclusion I have come to on the first issue renders it unnecessary to consider the second issue as formulated by the parties, namely, whether Volcano can lawfully possess the Aldicarb in this country, even for purposes of export. Suffice it to say that, because the option afforded to an illegal importer by s 16(6)(a) is available to Volcano, it can lawfully do whatever is necessary to exercise that option. Conversely, the Department and the registrar are obliged to do what they normally do to enable an illegal importer to exercise that option. [15] It is therefore ordered that: (a) The appeal is upheld with costs, including those consequent upon the employment of two counsel. (b) The order of the court a quo is set aside and in its stead the following order is made: ‘(i) The respondents are directed to do all things necessary to enable the applicant to export the two consignments of Aldicarb pesticide in terms of s 16(6)(a)(i) of the Act. (ii) The first respondent is ordered to pay the applicant’s costs, including those consequent upon the employment of two counsel.’ ………………. F D J BRAND JUDGE OF APPEAL Concur: HARMS ADP PONNAN JA MAYA JA KGOMO AJA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL Case number: 641/06 In the matter between VOLCANO AGROSCIENCE (PTY) LTD APPELLANT and THE MINISTER OF AGRICULTURE FIRST RESPONDENT ERNEST MOKANTLA NO SECOND RESPONDENT From: The Registrar, Supreme Court of Appeal Date: 2007-11-26 Status: Immediate 1. On 26 November 2007 the SCA gave judgment in this appeal which turned on the interpretation of s 16(6)(a) of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36 of 1947. Broadly stated, the section affords an illegal importer of agricultural pesticides and other substances controlled by the Act, the option to remove the substance from the Republic or to have it forfeited to or destroyed by the State. 2. The appellant in this matter (Volcano) imported a controlled pesticide called Aldicarb illegally and subsequently purported to sell it, in further contravention of the Act, to a distributor in South Africa. In the light of these contraventions, the Aldicarb was seized and retained by the Department of Agriculture. Volcano then brought an application based on s 16(6)(a) of the Act against the Minister responsible for that Department in the Durban High Court for an order which would enable it to export the Aldicarb to Zimbabwe. 3. The Durban High Court concluded, however, that on a proper interpretation of s 16(6)(a) the option afforded by the section is not available to an illegal importer who contravened some other provision of the Act as well. Since Volcano also sold the Aldicarb in contravention of another provision of the Act, so the High Court concluded, it could not rely on the section with the result that the Aldicarb automatically became forfeited to the State. 4. On appeal the SCA did not agree with this interpretation. The purpose of s 16(6)(a), so the court held, is not to penalise the illegal importer but to prevent the contravening substance from entering the Republic. Consequently, the option afforded by the section is available to every illegal importer in the position of Volcano and it matters not that some other provision of the Act had been contravened as well. In the result the Department of Agriculture was directed to do all things necessary to enable Volcano to exercise its option in terms of s 16(6)(a)(i) of the Act by exporting the Aldicarb to another country.

2319

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 447/08 MICHAEL TUCH, HEATHER BRENDA EISER HILTON MYERSON, JONATHAN TUCH NNO Appellants and MYERSON, JEFFREY HAROLD First Respondent MYERSON, JEFFREY HAROLD ROPER, ALASTAIR BRIAN NNO Second Respondent MASUREIK, DION BARRY Third Respondent Neutral citation: Tuch v Myerson (447/09) [2009] ZASCA 132 (30 September 2009) Coram: STREICHER, MHLANTLA JJA and GRIESEL AJA Heard: 8 SEPTEMBER 2009 Delivered: 30 SEPTEMBER 2009 Summary: Defamation – defamatory allegations made in civil judicial proceedings – qualified privilege – allegations devoid of merit – ulterior purpose inferred – malice. ORDER On appeal from: High Court, Johannesburg (Malan J sitting as court of first instance) The following order is made: The appeal, in so far as the first and third respondents are concerned, is partially upheld with costs. The appeal, in so far as the second respondent is concerned is dismissed. The order of the court below is set aside and replaced with the following order: ‘(a) The first and the third defendants, jointly and severally, are ordered to pay to the plaintiff an amount of R30 000. (b) The plaintiff’s claim against the second defendant is dismissed. (c) The first and third defendants, jointly and severally, are ordered to pay the plaintiff’s costs.’ JUDGMENT STREICHER JA (MHLANTLA JA and GRIESEL AJA concurring) [1] The appellants are the executors in the deceased estate of Nathan Myerson (‘the deceased’) who died on 4 March 2008 after an action for defamation instituted by him against the respondents had been dismissed by the Johannesburg High Court. Thereafter that court granted leave to the appellants to appeal to this court. [2] The alleged defamatory statements were made in an affidavit deposed to by the first respondent (Jeffrey Harold Myerson) in application proceedings instituted by the deceased against, amongst others, the first respondent and the third respondent (Dion Barry Masureik). The second respondent, namely Jeffrey Harold Myerson and Alistair Brian Roper, in their capacities as trustees of the Jefferson Business Trust, were subsequently joined as respondents in the application proceedings. [3] In the application proceedings the deceased claimed from each of the first and third respondents delivery of share certificates reflecting him as the holder of two and a half per cent of the share capital in a company Jazz Spirit 46 (Pty) Ltd (‘Jazz Spirit’). In this regard the deceased relied on a written undertaking dated 23 April 2004 and signed by the first and the third respondents, which reads as follows: ‘This letter confirms that we (Mr JH Myerson and Mr DB Masureik) are holding in trust 2,5% each of the shares of Jazz Spirit 46 (Proprietary) Limited. You can acquire these shares at no cost, whenever you wish to have these shares transferred into your name, subject to the following conditions: - the shares will be available at any time after the transfer of the land into our name has been finalized; we require 3 working days’ verbal notice by you to transfer these shares; these shares are being held specifically for yourself only and may not be sold, pledged or transferred to any other person or entity except to ourselves in which case these shares will be transferred back to ourselves or our nominee at par value to be determined by the auditors of Jazz Spirit 46 (Proprietary) Limited.’ The parties are agreed that the phrase ‘into our name’ in the first condition should read ‘into the name of Jazz Spirit 46 (Pty) Ltd’. The land in question was transferred to Jazz Spirit in July 2004 and in March 2006 the deceased called upon the first and third respondents to transfer the shares referred to in the written undertaking to him. On 30 March 2006 the first and third respondents’ attorneys wrote to the deceased’s attorneys: ‘It is sufficient to state that your client has no right or entitlement whatsoever to the shares nor the financial statements of Jazz Spirit 46 (Pty) Ltd, you refer to.’ They did not disclose the basis upon which it was alleged that the deceased had no entitlement to the shares. [4] The deceased thereupon launched an application against the first and third respondents for the transfer of the shares. In his answering affidavit the first respondent stated that in so far as the aforesaid undertaking was binding on the third respondent and on him it constituted a donation ‘motivated by nothing other than pure liberality and generosity’. Being a donation he stated that it was not valid as, according to him, there had not been compliance with s 5 of the General Law Amendment Act 50 of 1956. He did not say why not. He stated, furthermore, that the document contained no more than an offer and that the offer had not been accepted within a reasonable time. Later in the same answering affidavit he alleged that the undertaking contained in the document was furnished under duress. But still later he again alleged that the transaction was that of a donation and that the third respondent and he ‘were entitled to revoke the donation by virtue of inter alia [the deceased’s] ingratitude’. The deceased’s gross ingratitude was, according to him, evidenced by the following: ’30.3.1 [The deceased] and my father who died in September 2003 were brothers and partners in mainly immovable property. 30.3.2 During about July 2004, I found out that the [deceased] had misappropriated something in the order of R5 to R6 million of my father’s portion of the partnership. I took this up with the auditors, namely Kessel Feinstein, who confirmed that this had indeed occurred. I further established that the [deceased] had transferred all or most of these funds to Ireland via his wife who was Irish. This information was extremely disturbing.’ [5] Yet another defence raised by the first respondent in the answering affidavit was that the third and fourth respondents in the application proceedings were shareholders in Jazz Spirit and that they would not vote in favour of the transfer of the shares to the deceased. He stated that the third and fourth respondents ‘are of the view that should [the deceased] become a shareholder in [Jazz Spirit] he would devote his time and energy to creating as much trouble, unpleasantness and problems as possible’. [6] The third respondent filed a confirmatory affidavit in which he asked that the first respondent’s affidavit be read as if incorporated into his affidavit. [7] The statement that the deceased had misappropriated something in the order of R5 to R6 million of the first respondent’s father’s portion of the partnership and the statement that should the deceased become a shareholder in Jazz Spirit, he would devote his time and energy to creating as much trouble, unpleasantness and problems as possible, gave rise to the defamation action which is the subject matter of this appeal. [8] The respondents in their plea denied that the publication of these statements was wrongful and pleaded that the statements were published in the course of judicial proceedings ie on a privileged occasion. The deceased replicated that the statements were made maliciously. [9] The court below held that both the aforesaid statements were per se defamatory. In respect of the first statement it said that ‘any reasonable reader of ordinary intelligence would conclude that the word “misappropriated” means that the [deceased] is called a thief who stole some R5 to R6 million from the [first respondent’s] father’. In respect of the second statement it said: ‘The ordinary reader would conclude that the plaintiff is a troublemaker, ie a person who would, as a shareholder, not devote his time and energy for the benefit of the company but would disrupt it. The clear implication is that the plaintiff is unfit to have as a (minority) shareholder. This reflects on his reputation as a businessman.’ I am in full agreement with these findings of the court below. [10] The publication of the defamatory statements gave rise to a presumption of unlawfulness and animus injuriandi on the part of the first and third respondents.1 The presumption of unlawfulness could be rebutted by proving that the publication took place on an occasion of qualified privilege such as during the course of civil judicial proceedings provided the requirements for relevance were satisfied.2 The court below held that the defamatory statements were indeed relevant to the issues in the application proceedings. It added that the deceased could in the circumstances only succeed if he could show that the respondents acted maliciously and thereby exceeded the bounds of qualified privilege. It 1 Suid-Afrikaanse Uitsaaikorporasie v O’Malley 1977 (3) SA 394 (A) at 401 in fine – 402A. 2 Van der Berg v Coopers & Lybrand Trust (Pty) Ltd and others 2001 (2) SA 242 (SCA) par 21. concluded that the deceased failed to do so and for that reason dismissed the action. [11] The court below correctly held that the protection afforded by the qualified privilege afforded to a litigant is forfeited if the defamatory statement is published maliciously.3 In Basner v Trigger 1946 AD 83 at 95 Schreiner JA said: ‘Privileged occasions are recognised in order to enable persons to achieve certain purposes and when they use the occasion for other purposes they are actuated by improper or indirect motives, that is, by “malice”.’ [12] I agree that the defamatory statement that the deceased would cause trouble, unpleasantness and problems, should he become a shareholder in Jazz Spirit was relevant to the deceased’s claim in the application proceedings. I also agree that no malice has been shown on the part of the respondents in respect of that statement. I do however not agree that no malice on the part of the first and third respondents had been shown in respect of the allegation that the deceased stole R5 to R6 million from the first respondent’s father. [13] The onus was on the deceased to prove the alleged malice on the part of the respondents. No direct evidence of such malice was adduced by the deceased but, malice being a state of mind, that is hardly surprising. Being subjective in nature malice will often have to be inferred from intrinsic or extrinsic facts.4 3 Joubert and others v Venter 1985 (1) SA 654 (A) at 704D-G; and Van der Berg v Coopers & Lybrand Trust (Pty) Ltd and others supra at para 17. 4 See Neethling Potgieter and Visser Neethling’s Law of Personality 2ed (2005) p 149 and the authorities referred to in footnote 201. [14] The respondents claimed that the alleged theft of R5 to R6m by the deceased from the partnership between the deceased and the first respondent’s father constituted ingratitude which entitled them to revoke the alleged donation. However, the first respondent’s father died in 2003 whereas the alleged donation was made on 23 April 2004. It is hard to believe that anybody, let alone the first and the third respondents who are property developers, could possibly have thought that something done to a third party before a donation was made could constitute evidence of gross ingratitude on the part of the donee in respect of the donation subsequently made. The allegation is so devoid of any merit that, in the absence of any evidence to the contrary, the inference must be drawn that the first and third respondents used the occasion not to advance their case but for an ulterior purpose namely to besmirch the name and reputation of the deceased. In the circumstances the deceased succeeded in proving malice on the part of the first and the third respondents. [15] It follows that the appeal in so far as the first and third respondents are concerned should succeed in respect of the allegation that the deceased misappropriated R5 to R6m. The second respondent was joined as a party to the application proceedings because the first respondent had alleged in his answering affidavit that the second respondent was a shareholder of Jazz Spirit and that it should for that reason have been joined as a party. There is no evidence that the second respondent made common cause with the first and third respondents and counsel for the appellant conceded that the action against it could not succeed ie that the appeal in so far as the second respondent is concerned, should be dismissed. [16] The parties were agreed that in the event of the appeal succeeding the matter should not be referred back to the court below for the determination of the amount of damages to be awarded but that such amount should be determined by this court. In my view the request should be acceded to. The deceased as well as the respondents closed their cases without leading any evidence in regard to the quantum of damages with the result that this court is in as good a position as the trial court to determine the amount. To refer the matter back to the court below will involve the parties in additional costs which they obviously wish to avoid. Moreover, the trial judge is no longer a judge of the court below and the administration of the courts will unnecessarily be disrupted by referring the matter back to the court below. I shall therefore proceed to determine the amount of damages to which the deceased was entitled. [17] Counsel for the respondents submitted that because no evidence as to the reputation of the deceased had been tendered at the trial, only nominal damages could be awarded. This is tantamount to arguing that a court should assume that a person has a bad reputation or no reputation that can be injured. That is not correct. Every person has a reputation that can be injured. There may of course be aggravating or mitigating circumstances relating to a person’s reputation. A plaintiff may therefore adduce evidence of his good reputation and standing in the community5 and a defendant may adduce evidence of the plaintiff’s bad reputation.6 Should a plaintiff allege that there are aggravating circumstances the onus would be on him to prove such aggravating circumstances. Conversely should the defendant allege that there are mitigating circumstances the onus would be on him to prove such mitigating circumstances. 5 See eg Van der Berg v Coopers & Lybrand Trust (Pty) Ltd and others 2001 (2) SA 242 (SCA) at para 45. 6 See eg Black and others v Joseph 1931 AD 132 at 146. [18] The allegation that the deceased stole R5 to R6 million from his brother is obviously seriously defamatory of the deceased. The extent of the damage caused thereby would, however, have been restricted by the limited publication thereof to a restricted class of people. The allegation is nevertheless so serious that substantial damages should be awarded. The appellant, referring to the award made in Naylor and another v Jansen; Jansen v Naylor and others 2006 (3) SA 546 (SCA) at paras 15 – 17, submitted that R30 000 should be awarded as damages. In that matter it had been alleged that Jansen had stolen money from his employer whereas he had not stolen money but had made himself guilty of misconduct involving dishonesty which misconduct the trial court erroneously did not take into account when determining the quantum of damages. Consequently an award of R30 000 by the trial court was reduced on appeal to R15 000. As was said by Smalberger JA in the Van der Berg-case at para 48 comparisons can of course serve a very limited purpose. [19] A court has a wide discretion to determine an award of general damages which is fair and reasonable having regard to all the circumstances of the case and the prevailing attitudes of the community.7 Having regard to all the circumstances of the present case it would in my view be fair and reasonable to award damages in an amount of R30 000. The appeal of the appellants should therefore be upheld in so far as the first and the third respondents are concerned. The appellants conceded that no case has been proved against the second appellant and that the appeal in so far as the second appellant is concerned should be dismissed. Counsel for the respondents conceded that the fact that the second 7 See 7 Lawsa 2ed para 260 and the cases therein referred to. respondent was cited as a respondent in the action and also in the appeal had no real effect on the costs. In the circumstances no costs order will be made in respect of the second respondent. [20] The following order is made: The appeal, in so far as the first and third respondents are concerned, is partially upheld with costs. The appeal, in so far as the second respondent is concerned, is dismissed. The order of the court below is set aside and replaced with the following order: ‘(a) The first and the third defendants, jointly and severally, are ordered to pay to the plaintiff an amount of R30 000. (b) The plaintiff’s claim against the second defendant is dismissed. (c) The first and third defendants, jointly and severally, are ordered to pay the plaintiff’s costs.’ ________________ P E STREICHER JUDGE OF APPEAL APPEARANCES: For appellant: H S Eiser Instructed by: Eiser & Kantor, Riviera Matsepes, Bloemfontein For respondent: M Basslian Instructed by: Myers Inc, Greenside, Gauteng Naudes Inc, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 September 2009 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * M TUCH & OTHERS NNO v J H MYERSON & OTHERS NNO The Supreme Court of Appeal today upheld an appeal against a judgment in the High Court, Johannesburg in terms of which that court dismissed an action for defamation instituted by one Nathan Myerson who has since died. In application proceedings instituted by the deceased against the first and the third respondents (‘the respondents’) the deceased, relying on a written undertaking by the respondents, claimed delivery of certificates reflecting him as the holder of 5% of the share capital in a company Jazz Spirit 46 (Pty) Ltd. The respondents alleged that the undertaking constituted a donation and that they had revoked the donation because of gross ingratitude on the part of the deceased. The deceased and the first respondent’s father were partners and according to the respondents the deceased had misappropriated in the order of R5 – R6m of the first respondent’s father’s portion of the partnership. Such misappropriation allegedly constituted evidence of the deceased’s gross ingratitude. The SCA agreed with the court below that the allegation was defamatory as any reasonable reader of ordinary intelligence would have understood the respondents to be saying that the deceased was a thief who stole from the first respondent’s father. However, it disagreed with the court below that no malice on the part of the respondents had been proved and that it had not been proved that the respondents exceeded the bounds of qualified privilege afforded by the fact that the allegation was made during the course of civil judicial proceedings. Having regard to the fact that the first respondent’s father died before the undertaking was given the SCA said that it was hard to believe that anybody could possibly have thought that something done to a third party before a donation was made could constitute evidence of gross ingratitude on the part of a donee in respect of a donation subsequently made. It held that the allegation was so devoid of any merit that, in the absence of any evidence to the contrary, the inference must be drawn that the respondents used the occasion not to advance their case but for an ulterior purpose namely to besmirch the name and reputation of the deceased ie that the respondents acted maliciously.

2348

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case number: 516/2008 In the matter between: TSHIDISO ISAAC LEEUW APPELLANT and FIRST NATIONAL BANK RESPONDENT Neutral citation: Leeuw v First National Bank (516/2008) [2009] ZASCA 161 (30 November 2009) CORAM: Streicher, Heher, Snyders, Malan JJA and Leach AJA HEARD: 13 November 2009 DELIVERED: 30 November 2009 SUMMARY: Estoppel – negligent misrepresentation ORDER On appeal from: The Bloemfontein High Court (Beckley and Van Zyl JJ, sitting as court of appeal). Order: The appeal is dismissed with costs. JUDGMENT SNYDERS JA: (Streicher, Heher, Malan JJA and Leach AJA concurring) [1] The respondent sued its customer, the appellant, in the Thaba’ Nchu Magistrate’s Court for the recovery of an amount of R48 000 withdrawn from the appellant’s account with the respondent after the deposit of a cheque in the amount of R48 598.69 into that account and before it was discovered that the signatures on the cheque were forged. The appellant not only defended the claim, but instituted a counterclaim for the amount of R89 000. A cheque for R89 000 was deposited into the same account, but the respondent reversed the credit in the appellant’s account upon discovering that the signatures on the cheque were forged. The decision by the magistrate to dismiss the respondent’s claim and to grant the appellant’s counterclaim, both with costs, was appealed by the respondent to the Bloemfontein High Court. The appeal was upheld and the respondent was awarded its claim of R48 000 with interest and costs, whereas an order for absolution from the instance was made on the appellant’s counterclaim. It is with the leave of the court below that the matter is on appeal. [2] The appellant persisted in this court with an argument that the respondent’s initial notice of appeal was fatally defective as it did not comply with Magistrates’ courts rule 51(7)(b) which requires an appellant to state ‘the grounds of appeal, specifying the findings of fact or rulings of law appealed against’. The rule is peremptory and non-compliance has been held to render the notice invalid.1 The object of rule 51(7) is to enable the magistrate to 1 Himunchol v Moharom 1947 (4) SA 778 (N) at 780; Tzouras v SA Wimpy (Pty) Ltd 1978 (3) SA 204 (W) at 205E-F. frame his reasons for judgment under rule 51(8) and, insofar as this had not already been done, to inform the respondent of the case he has to meet and to notify the appeal court of the points to be raised.2 In 1987 the Uniform rules of the high court were amended to provide, for the first time, for the delivery, prior to the hearing, of ‘a concise and succinct statement of the main points. . . which [a party] intends to argue on appeal’ – so-called heads of argument.3 It can be said that since then, the object of the notice of appeal to inform the respondent and the court was also achieved by the heads of argument, and it has almost become the rule that a full judgment is given after a trial in the magistrates’ courts which is rarely added to in terms of rule 51(8), as also occurred in this case. [3] The grounds in the notice of appeal that are attacked by the appellant relate only to the counterclaim. It was contended that the magistrate should have found that both cheques were forged, that the respondent was entitled to reverse the credit entries in the appellant’s account after it was discovered that the cheques were forged and that the respondent’s witnesses, especially Motaung, gave credible evidence which had to be preferred to that of the appellant. These points, though not a model of eloquence, clarity and compliance, set out the only point in the appeal on the counterclaim, namely that if Motaung’s evidence was accepted, the trial court should have concluded that there was no misrepresentation by the respondent in relation to the R89 000 cheque. This simple point reflected the entire appeal on the counterclaim and achieved the objects of rule 51(7) in the circumstances.4 [4] The court a quo decided the matter on an acceptance of Motaung’s evidence, as the notice urged it to do, and reversed the magistrate’s decision in this regard. It does not appear from the judgment that the representative of the respondent had any difficulty dealing with the relevant issue on appeal. On the contrary, the court below had the impression that the point relating to the notice of appeal had not been pursued and did not refer to it in its 2 Kilian v Geregsbode, Uitenhage 1980 (1) SA 808 (A) at 815C-D. 3 Regulations R2164, GG10958, 2 October 1987. 4 Gaffoor v Mvelase 1938 NPD 429 at 431. judgment. Only after judgment and in response to a letter from the appellant’s attorneys, did it respond by furnishing additional reasons pertaining to the point and concluded that the grounds of appeal were not too general or too vague. [5] In this court it is not required that grounds of appeal be stated in the notice of appeal.5 The nature of the proceedings is such that this court is entitled to make findings in relation to ‘any matter flowing fairly from the record’.6 The parties in their written and oral arguments have dealt with all the issues relevant to the appeal and the appellant has not pointed to anything that has been overlooked. The point, apart from being bad, has long lost its significance. [6] Many of the facts in this matter are common cause. The appellant, the proprietor of a liquor outlet, the Love and Happiness Tavern, sold liquor to Thabo Mofokeng. The latter tendered payment by way of a cheque in the amount of R48 598.69 drawn by General Food Industries Limited on the respondent in favour of Mofokeng, or bearer. The appellant accepted the cheque as payment for the liquor bought and on 14 May 1999 deposited it into his bank account with the respondent. The circumstances that lead to the appellant accepting the cheque as payment are in dispute and I shall revert to that later. On 17 May 1999 the respondent allowed the appellant to utilise R48 000 of the proceeds of this cheque in order to pay for liquor bought for his business. On 21 May 1999 the appellant again sold liquor to Mofokeng, this time for R89 000 and again accepted a cheque in that amount, made out as before, in payment. This cheque was also deposited into the same account. On 24 May 1999 the respondent was notified by General Food Industries Limited that each of the two signatures on the cheques was forged. The 5 SCA rule 7(3): ‘Every notice of appeal and cross-appeal shall – (a) state what part of the judgment or order is appealed against; (b) state the particular respect in which the variation of the judgment or order is sought; and (c) be accompanied by a certified copy of the order (if any) granting leave to appeal or to cross-appeal.’ 6 Thompson v South African Broadcasting Corporation 2001 (3) SA 746 (SCA) para 7: ‘The Court is entitled to base its judgment and to make findings in relation to any matter flowing fairly from the record, the judgment, the heads of argument or the oral argument itself.’ respondent immediately reversed the credits in the appellant’s account brought about by the deposit of the two cheques and passed debits in the same amounts. Because the respondent utilised an amount of R48 000 from the account before the debits were passed, the respondent instituted action to recover that amount. [7] The respondent’s claim was based on the condictio indebiti. It alleged that the appellant was enriched at the expense of the respondent in the amount of R48 000. The appellant denied that the condictio indebiti was available to the respondent as a bank, denied that he was enriched and pleaded that the respondent was estopped from relying on the forgery of the cheque. In support of the defence of estoppel he pleaded that prior to the appellant accepting the cheque as payment for liquor supplied, the respondent represented to him that the cheque was good for the money, and the appellant relied on the correctness of this representation when he decided to accept the cheque as payment for the liquor sold to Mofokeng. In his counterclaim the appellant pleaded that the respondent negligently represented that the cheque of R89 000 was good for the money before he accepted it as payment for the liquor bought by Mofokeng; he relied on this alleged misrepresentation and supplied liquor to Mofokeng for that value and consequently suffered damages. [8] The magistrate accepted that the condictio indebiti was ‘not available’ to a bank and found that the respondent, in any event, failed to prove the facts founding the condictio indebiti that it relied upon. On appeal the court below, the appellant and the respondent again accepted that the condictio indebiti was not the respondent’s ‘proper cause of action’. The respondent argued in the court below that the condictio sine causa was the appropriate remedy. The court below found that although that was not pleaded, its requirements were fully canvassed during the trial, the particulars of claim clearly based the respondent’s claim on enrichment and the evidence required to prove the one would have sufficed to prove the other. These findings and an absence of prejudice to the appellant, led the court below to conclude that the respondent should not fail for having pleaded the ‘incorrect condictio’. [9] In this court the question whether the respondent’s appropriate remedy is the condictio indebiti or the condictio sine causa is no longer alive as the appellant’s counsel conceded, rightly in my view, that if the appellant is to fail on his defence of estoppel, the respondent was entitled to judgment in the amount of R48 000. [10] However, to avoid future confusion it needs to be stated that there is no principle that the condictio indebiti is not available to a bank. In ABSA Bank Ltd v De Klerk 1999 (1) SA 861 (W), on similar facts, it was held, in my view correctly, that the condictio indebiti was the appropriate remedy for the bank to have relied upon.7 In Saambou Bank Ltd v Essa 1993 (4) SA 62 (N) a thorough comparative analysis was made of facts that would give rise to a bank being entitled to rely on the condictio indebiti as opposed to the condictio sine causa. It was held that if a bank believed it was obliged to pay ‘on demand any withdrawal sought by [its customer] up to the amount of the credit standing in his account’ the condictio indebiti was the appropriate remedy. B & H Engineering v First National Bank of SA Ltd 1995 (2) SA 279 (A), mentioned by the court below as if it entertained another view, dealt with the different scenario of a bank paying the amount of a cheque to a payee not realising that the cheque had been countermanded. There was no question in B & H of the bank performing vis-à-vis the payee. Hence the condictio indebiti did not arise. [11] The only issue to be decided in relation to the respondent’s R48 000 claim is whether the appellant proved his defence of estoppel.8 Estoppel presupposes a representation made by words or conduct relating to a certain factual position.9 [12] According to the evidence of the appellant and Mr Abram Motaung, a clerk employed by the respondent at the enquiries desk, the appellant 7 At 864H-I. 8 ABSA Bank Ltd v I W Blumberg & Wilkinson 1997 (3) SA 669 (SCA) at 677G-H. 9 Road Accident Fund v Mothupi 2000 (4) SA 38 (SCA) at paras 27 and 29. approached him during May 1999 with the cheque of R48 598.69. Motaung testified that the appellant: ‘came to [him] with a cheque and asked [him] if the cheque was good. [He] then had to check if the cheque was not post-dated and if the amounts correspond with figures. [He] then checked in the computer if there was not stop payment on the cheque. [He] confirmed that the cheque was ok. [He] was not asked to check if there were funds in the account. [He] did not check if the signatures on the cheque corresponded’. Far from this evidence being disputed by the appellant several features of his evidence support this version. He says that when Motaung came back with the cheque he said ‘the cheque was genuine and [the appellant] could deposit the cheque’. This answer indicates that Motaung was verifying that the cheque was, on the face of it, acceptable for deposit. This was no different from what Motaung had done for the appellant numerous times before. The appellant, on his own version, visited the Thaba’ Nchu branch of the respondent three to four times a week, depending on the state of his business. He knew Motaung well. He also testified that as he was ‘not learned’, whenever he made a deposit of cheques at the bank, he would ask for assistance at the enquiries desk with the completion of the deposit slip before he went to the tellers to make the deposit. In relation to the cheque for R48 598.69 Motaung did the same thing he was requested to do by the appellant numerous times before – to see whether the cheque was acceptable for deposit and to complete the deposit slip and send the appellant to the tellers. [13] In view of the appellant’s self proclaimed habit to ask Motaung to complete the deposit slips relating to cheque deposits made by him, it was for the appellant to show that his request on this occasion was different from those on other occasions in that he required a guarantee that the cheque was as good as cash. [14] The appellant said, rather obliquely, that Mofokeng was with him when he explained to Motaung that Mofokeng wanted to buy liquor from him and offered the cheque in payment. He wanted to be sure that he ‘was not going to lose money’. He wanted the respondent to give him the assurance that the cheque was as good as cash and consequently that there was no risk for him in delivering liquor to Mofokeng. When Motaung was cross-examined he said he could not remember whether the appellant told him why he wanted to know that the cheque was good. If Motaung was aware of the presence of Mofokeng and the reasons for this, he would have had a better idea of what it was that the appellant wanted assurances on. Despite his lapse of memory it was not put to Motaung that Mofokeng, the purchaser and payee, was present and that the request concerning the cheque was aimed at obtaining assurances for the purposes of the sale transaction between them. When the appellant was cross-examined about the failure by his attorney to put this evidence to Motaung, he was unsure whether he told his attorney about it. In view of the failure to explore this aspect during Motaung’s evidence, it cannot be concluded that the appellant’s request in relation to the R48 598.69 cheque was any different from his previous requests. [15] As far as the respondent is concerned it never furnished the appellant with a guarantee that the cheque would be paid. This is supported by Motaung’s evidence that the appellant telephoned him two to three days after the cheque was deposited and told him that he was busy buying liquor from a supplier and needed to make payment of an amount of R48 000. He wanted to draw against the cheque that had been deposited by way of a shoppa card which apparently operates like a debit card. The appellant denied that he ever made such a phonecall or had such a conversation with Motaung. Motaung’s evidence is corroborated by the appellant’s bank statement that reflects that on 17 May 1999, three days after the cheque was deposited, his shoppa card was loaded with the amount of R48 000, the exact amount that the appellant wanted to make his purchase for. Upon receiving this phonecall Motaung went to the manager of the respondent to obtain authorisation for the withdrawal of funds before the cheque was cleared. This authorisation was given. If the cheque was guaranteed earlier there was no need for the appellant to have made this telephonic request or for Motaung to have sought this authorisation from the manager. [16] The further question is whether the facts would have made a reasonable person in the position of the appellant believe that the respondent was guaranteeing the funds represented by the cheque.10 The appellant’s own evidence shows why the answer has to be in the negative. If it was a matter of the respondent issuing a guarantee, there was no understandable basis why the funds would not have been available straight away and why the appellant – on his own version - would have been told that it would take seven days for the funds to be available. Likewise there would have been no need for the appellant to have phoned to make the arrangement that the money be available for his purchase of stock before the expiry of the seven day period. [17] Counsel’s contention that the appellant was under the impression that the funds would, as a mere formality, take seven days to become available cannot be sustained. When the appellant was told about the seven day clearing period he was not enquiring about the availability of the funds, but, according to him, whether the cheque was as good as cash. If the funds were guaranteed there and then there was no conceivable basis on which it would have taken time for the funds to become available. [18] The court below was correct in concluding that the defence of estoppel was not proven. [19] The appellant’s claim for R89 000 is based on similar allegations, that Motaung made the same representation to him. Motaung denied that he was approached by the appellant with the R89 000 cheque. His denial is supported by the fact that the deposit slip for the cheque was not completed by him and does not bear his signature as in the case of the cheque for R48 598.69. It was common cause that Motaung had a colleague, Motlhatlhedi, whom the appellant knew as well as Motaung. Motaung suggested that it could have been Motlhatlhedi who assisted the appellant with the R89 000 cheque. 10 Aris Enterprises (Finance) (Pty) Ltd v Protea Assurance Co Ltd 1981 (3) SA 274 (A) at 292E-F. [20] Counsel for the appellant argued that the respondent had a duty to call Motlhatlhedi as a witness to meet the allegation that the respondent made a representation to the appellant in relation to the R89 000 cheque and argued that its failure to do so warrants the adverse inference that the misrepresentation alleged by the appellant was made. This submission not only fails in logic, but also in law. Such an inference does not follow of necessity, but is dependant on the circumstances of the case.11 The allegation the respondent had to meet was that Motaung made the alleged representation in relation to the R89 000 cheque. He was called as a witness and denied the allegation. Nothing in the appellant’s case obliged the respondent to meet a case that was not pleaded by calling witnesses that were not alleged to have had anything to do with the alleged representation and were therefore irrelevant. In addition, before an adverse inference is to be drawn against a party for not calling a relevant witness, it would have had to be shown that the witness was available to be called.12 Although Motaung, still employed by the respondent at the time of his evidence, referred to Motlhatlhedi as his ‘former colleague’, the question whether Motlhatlhedi was available to give evidence was never explored during the trial. [21] The court below was correct in concluding that the appellant did not prove his counterclaim at the trial and in granting an order of absolution. [22] The appeal is dismissed with costs. __________________________ S SNYDERS Judge of Appeal 11 Webranchek v L K Jacobs & Co Ltd 1948 (4) SA 671 (A); Munster Estates (Pty) Ltd v Killarney Hills (Pty) Ltd 1979 (1) SA 621 (A) at 624. 12 Elgin Fireclays Limited v Webb 1947 (4) SA 744 (A) at 750; R v Phiri 1958 (3) SA 161 (A) at 164H-165A. Appearances: For the Appellant: N W Phalatsi Instructed by: N W Phalatsi Attorneys & Partners, Bloemfontein For the Respondent: Adv. J P Daffue SC Instructed by: Steyn Meyer Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * A stolen cheque, signed fraudulently, spells trouble for whoever accepts it, even unwittingly, as payment for anything. This Mr Leeuw finally discovered in a case between him and First National Bank, pursued to the Supreme Court of Appeal. Leeuw sold liquor to one Mofokeng for R48 598.69 and took a cheque as payment. It was a General Food Industries cheque, made out to Mofokeng in that exact amount. Leeuw deposited the cheque with FNB and made arrangements to withdraw R48 000 against the cheque before the expiry of the seven day clearance period. Leeuw then sold more liquor, for R89 000, to Mofokeng and took a similar cheque in that amount. After the R48 000 was withdrawn FNB was notified that both cheques were stolen and the signatures forged. FNB reversed the credits in Leeuw’s account and sued for the R48 000. Leeuw resisted the claim and counterclaimed for the R89 000, alleging that FNB, at the time that he deposited the cheques, represented to him that the cheques were good for the money and he relied on that misrepresentation to his detriment. The case went all the way from the magistrates’ court, where Leeuw won, to the Bloemfontein High Court, where Leeuw lost, and ultimately the Supreme Court of Appeal. The Supreme Court of Appeal confirmed the decision of the Bloemfontein High Court that the facts did not support Leeuw’s allegation of a misrepresentation by FNB. FNB merely did what banks do - it accepted the cheques for deposit with no guarantee in relation thereto. Hence FNB was entitled to reverse the credits in Leeuws account when the cheques were not cleared and to be paid the R48 000 already withdrawn by Leeuw.

3718

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case No: 680/2020 In the matter between: MACSTEEL TUBE AND PIPE, A DIVISION OF MACSTEEL SERVICE CENTRES SA (PTY) LTD APPELLANT and VOWLES PROPERTIES (PTY) LTD RESPONDENT Neutral Citation: Macsteel Tube and Pipe, a division of Macsteel Service Centres SA (Pty) Ltd v Vowles Properties (Pty) Ltd (680/2020) [2021] ZASCA 178 (17 December 2021) Coram: MATHOPO, MOCUMIE and MOLEMELA JJA, and KGOELE, and MOLEFE AJJA Heard: 4 November 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down is deemed to be 10h00 on 17 December 2021 Summary: Civil Procedure and Practice – an order amending the quantification of the claim in a summons did not amount to a new cause of action and did not constitute a final determination on the issue of the court’s jurisdiction to adjudicate the action – an order amending the description of a defendant in a summons does not amount to a substitution of the defendant in circumstances where the description of the defendant was the same as in the lease agreement concluded by the parties – no prejudice was demonstrated by the appellant – application to amend was correctly granted – appeal dismissed. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Mia J and Malungana AJ sitting as a court of appeal): The appeal is dismissed with costs. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Molemela JA (Mathopo and Mocumie JJA and Kgoele and Molefe AJJA concurring): [1] This appeal arises from an interlocutory application pertaining to the amendment of the particulars of claim in an action that was instituted by Vowles Properties (Pty) Ltd (Vowles) against Macsteel Tube and Pipe, a Division of Macsteel Service Centres SA (Pty) Ltd (Macsteel).1 The background facts which serve as a backdrop for the adjudication of this appeal are set out in the paragraphs that follow. [2] On 26 July 2009, Vowles and Macsteel concluded a lease agreement in terms of which the latter leased the former’s fixed property which was to be utilised for steel fabrication and storage, among others. One of the terms of the agreement was that Macsteel was required to maintain the leased premises in good order and could not sublet the leased premises without Vowles’ consent. On 11 December 2015, Vowles instituted action in the Kempton Park Regional Court (the regional court) against 1 This is how Macsteel was cited in the face of the original summons. In its proposed amendment, Vowles sought the substitution of that description with the following citation: ‘Macsteel Service Centres SA (Pty) Ltd t/a Macsteel Tube and Pipe, a private company duly registered and incorporated in terms of the Company Laws of the Republic of South Africa, conducting business at 15 Esson Road, Lillianton, Boksburg’. Macsteel. It is common cause that the lease terminated on 31 December 2012. In its particulars of claim, Vowles claimed an amount of R1 567 096.03 as damages for breach of contract on the basis that Macsteel had breached the terms of the agreement by failing to return the leased premises in the same condition as they were when it first took occupation thereof. Macsteel is the appellant in this appeal, and Vowles the respondent. A second party, Reclamation Holdings (Pty) Ltd, which was the appellant’s tenant in terms of a subletting arrangement, was cited as a co- defendant in the particulars of claim. The subletting arrangement need not detain this appeal, because the appellant’s tenant is not a party before us. [3] Macsteel excepted to the particulars of claim. On 15 July 2016, the regional court, by agreement between the parties, upheld the exception raised by Macsteel. In terms of that order (the July 2016 order), the original particulars of claim were set aside and Vowles was ordered to file amended particulars of claim within 20 days of the July 2016 order. The first time that Vowles attempted to amend the particulars of claim was when on 9 September 2016, more than 20 days after the issuance of the July 2016 order, it delivered a notice of amendment in terms of rule 55A of the Magistrates’ Court Rules (the first rule 55A(1) notice) pursuant to being served with a notice of bar. Macsteel objected to the amendment on the basis that the particulars of claim no longer existed, as they had been set aside in terms of the July 2016 order. It sought an order dismissing Vowles’ action, alternatively setting aside Vowles’ notice of amendment. [4] On 24 January 2017, the regional court granted an order setting aside the notice of amendment filed by Vowles as an irregular step. On 20 February 2017, Vowles delivered its second notice of amendment in terms of rule 55A(1) (the second rule 55A(1) notice). Macsteel again objected, as result of which Vowles withdrew that notice. On 27 October 2017, Vowles filed another notice of amendment, this time stating that the application was within the contemplation of rule 55A(4) (the October 2017 amendment application). The notice stipulated that Vowles intended to make its application on 2 February 2018 at 09h00. However, on 30 January 2018, Vowles’ attorneys filed a notice of withdrawal as attorney of record. Vowles did not attend the proceedings on 30 January 2018, as a result of which the regional court dismissed that application with costs. [5] On 19 June 2018, Vowles, having appointed new attorneys of record, delivered a Notice of Motion (the 2018 amendment application) indicating its intention to, in terms of s 111(1) of the Magistrates’ Court Act 32 of 1944 (Magistrates’ Court Act), alternatively in terms of rule 55A(10), amend the summons by replacing it with a copy appended to the Notice of Motion as Annexure A. Vowles sought a number of orders in the alternative, including an order declaring the proposed amendment as being an amendment of the particulars of claim in compliance with the July 2016 order. Macsteel opposed the application and raised a number of objections, including its previous objections. [6] Furthermore, Macsteel contended that Vowles had not brought its application in terms of rule 55A(1), which was the ordinary manner in which such applications are brought and had instead elected to bring this application under the rule 55A(10). Although Macsteel accepted that it was within the discretion of the court to grant applications under this sub-rule, it contended that because Vowles had not explained in its founding affidavit why it elected to follow this route, and not the usual procedure for amendments, as set out in rule 55A(1), there was no basis for the regional court to conclude that it should exercise its discretion in favour of Vowles and grant the June 2018 amendment. [7] On 24 October 2018, the regional court granted Vowles leave to amend the particulars of claim and ordered Macsteel to pay the costs of the application. Macsteel was aggrieved by that order and noted an appeal on the basis that the regional court had made findings which were final in effect, which would prejudice Macsteel’s conduct in defending Vowles’ claim. On 21 November 2018, Macsteel noted an appeal against the whole of the judgment and order of the regional court except the costs order. Before the Gauteng Division of the High Court, Johannesburg (the high court), sitting as a full court, Macsteel submitted that the regional court had erred in allowing the amendment of the particulars of claim. According to Macsteel, Vowles’ application to amend its particulars of claim should have been dismissed. The high court rejected that contention and dismissed the appeal with costs on 20 April 2020. Aggrieved by that order, Macsteel approached this Court seeking special leave to appeal against the order of the high court. Special leave was granted by this Court on 28 July 2020. [8] The main issues raised for adjudication in this appeal are whether the regional court made a definitive order that cannot be altered in relation to jurisdiction and, in particular, whether the amendment sought had the effect of introducing a new cause of action or a new party in relation to a claim that had prescribed. An ancillary issue raised for determination related to whether or not the order granted by the regional court was appealable. [9] Section 111 of the Magistrates’ Court Act is relevant to this appeal. It provides that a court may at any time before judgment, amend any summons or pleading, if the granting of the amendment will not prejudice any party in the conduct of that party’s action or defence. There is a plethora of case-law on the subject and it is now well-established that a court will always allow an amendment unless the amendment is mala fide or if the amendment would cause prejudice to the other side, which prejudice cannot be cured by a costs order. This principle was formulated as follows in the well-known case of Moolman v Estate Moolman and Another2 and was confirmed in numerous judgments of this Court: ‘. . . [T]he practical rule adopted seems to be that amendments will always be allowed unless the application to amend is mala fide or unless such amendment would cause an injustice to the other side which cannot be compensated by costs. . . .’ [10] Against the backdrop of the legal position set out in the preceding paragraph, I turn now to deal with the issues raised in this appeal. It is opportune to start with the ancillary issue of the appealability of the order made by the regional court. It was contended on behalf of Vowles that the order granted by the regional court did not have the effect of a final judgment and was consequently not appealable.3 We were accordingly urged to strike the appeal from the roll with costs. 2 Moolman v Estate Moolman and Another 1927 CPD 27 at 29. 3 Relying on the provisions of s 83 of the Magistrate’s Court Act 32 of 1944, it was contended on behalf of Vowles that the granting of the amendment is not a judgment within the contemplation of s 48 of the Magistrates Court Act. The right of appeal, so it was contended, is limited to the provisions of s 83(b) which stipulates that a party has the right to appeal against any rule or order ‘having the effect of a final judgment’. [11] It is trite that an appeal lies against an order and not against the reasoning. In Zweni v Minister of Law,4 and Order this Court held: ‘A “judgment or order” is a decision which, as a general principle, has three attributes, first, the decision must be final in effect and not susceptible of alteration by the court of first instance; second, it must be definitive of the rights of the parties; and, third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings (Van Streepen & Germs (Pty) Ltd case supra at 586I-587B; Marsay v Dilley 1992 (3) SA 944 (A) 962C-F). The second is the same as the oft-stated requirement that a decision, in order to qualify as a judgment or order, must grant definite and distinct relief (Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue & Another 1992 (4) SA 202 (A) at 214D-G).’ [12] It is true that the refusal of an amendment may have a final and definitive effect because a party may be precluded from leading evidence at the trial in respect of the aspects which were to be introduced by the amendment of the pleadings. However, the granting of an amendment does not, without more, have that effect. Ordinarily, an order granting leave to amend is an interlocutory order which is not final and definitive of the rights of the parties. [13] A perusal of the order granted by the regional court does not suggest that the order it granted had a final effect. However, given Macsteel’s contention that some of the findings made by the regional court were definitive of the parties’ rights and were final in effect, it may be necessary to consider the reasoning that informed its decision. In doing so, it must be borne in mind that some of the remarks were made in the course of that court addressing itself to the controversy about whether the grounds of objections raised by Macsteel against the proposed amendment manifested prejudice that was likely to hinder Macsteel in its defence of the claim. I consider next the four grounds of objections raised by Macsteel as considered by the regional court. [14] The first ground of objection was directed at the jurisdiction of the regional court to adjudicate the claim beyond its monetary threshold. Section 45(1) of the 4 Zweni v Minister of Law and Order; 1993 (1) SA 523 (A); [1993] 1 All SA 365 (A) para 8. Magistrates Court Act5 permits the parties to a contract to consent in writing to the adjudication of their contractual dispute in either the court for the district or the court for the regional division in respect of an action which would ordinarily fall beyond the jurisdiction of those courts. The regional court recorded that Vowles had referred it to clause 20 of the lease agreement, which stipulated as follows: ‘The both parties hereby consents to the jurisdiction of the Magistrate’s Court (for the district having physical jurisdiction over the person of the LANDLORD) in respect of all proceedings arising out of this AGREEMENT OF LEASE, notwithstanding the amount claimed or the nature of the claim. In no way derogating there from the LANDLORD shall be entitled to institute any action arising out of this AGREEMENT OF LEASE in any other court of competent jurisdiction’. [15] The regional court then stated as follows on this aspect: ‘The respondent has argued that in terms of the first two lines in this clause, that this Court is not the district court and that the district having physical jurisdiction over with the person of the landlord, who is in fact the applicant, is in fact Benoni Court. Of course the applicant has disagreed with this contention and I shall say no more, except to say the following: The district of Benoni, did at the time of institution of this summons, fall under the Regional Court of Kempton Park. Additionally, the clause is wide enough to include any competent court and the applicant is then free to even persist in high court if he so wishes. There is no merit in this first ground of objection raised by the respondent.’ In my view, the regional court merely recognised the existence of a clause in the parties’ agreement purportedly clothing a court in the district having physical jurisdiction over Vowles, with the jurisdiction to adjudicate the action, but did not finally determine the issue of jurisdiction. The dismissal of this ground of objection appears to have been on the basis that the issue of jurisdiction could not, given clause 20 of the lease agreement, serve as a bar to granting the amendment. Thus, nothing precluded Macsteel from subsequently raising the issue of jurisdiction as a point in limine. It follows that this ground of appeal has no merit. 5 Section 45(1) provides: ‘Subject to the provisions of section 46, the parties may consent in writing to the jurisdiction of either the court for the district or the court for the regional division to determine any action or proceedings otherwise beyond its jurisdiction in terms of section 29(1).’ The matters excluded by s 46 include matters pertaining to the validity of a will, status of a person in respect of mental capacity, specific performance without the alternative of damages, delivery of property exceeding a certain value, and a decree of perpetual silence. [16] The second ground of objection was that the augmentation of the amount of the claim was tantamount to introducing a new cause of action. There is no merit to this contention. A plaintiff is not precluded from augmenting its claim for damages if the new claim merely represents a fresh quantification of the original claim.6 It follows that this ground of appeal also has no merit. [17] In its third ground of objection, Macsteel asserted that the amendment of the citation of Macsteel introduced a new legal entity as a defendant in circumstances where the claim had prescribed. Macsteel took issue with the fact that the amended particulars of claim cited the defendant as ‘Macsteel Tube and Pipe Ltd, a division of Macsteel Service Centres SA (Pty) Ltd. Macsteel submitted that insofar as Vowles had included the phrase ‘a division of’ in Macsteel’s citation, it had actually cited a non-existent party. Macsteel further argued that Vowles was attempting to introduce a new defendant, namely ‘Macsteel Services Centres SA (Pty) Ltd trading as a division thereof in the name of Macsteel Tube and Pipe’ as a new defendant in the place of a non-existent one. Macsteel contended that the regional court’s observation that the citation of the defendant matched the description of Macsteel in the lease agreement, that the citation referred to the trading name of a defendant who was easily identifiable was definitive of the parties’ rights and was also final in effect. [18] The regional court’s finding that the correction of the cited defendant is not tantamount to introducing a new party to the proceedings finds support in Foxlake Investments (Pty) Ltd t/a Foxway Developments v Ultimate Raft Foundation Design Solutions CC t/a Ultimate Raft Design and Another (Foxlake), where this Court stated as follows:7 ‘As stated earlier, Foxway and Foxlake share the same registered address, receptionist and managing director. The copy of the agreement on which the claim is based was attached to the original summons. In my view when the summons was served on the registered address of both Foxway and Foxlake, Foxway recognised its connection with the claim notwithstanding the error in its description. The amendment sought by the respondents in 6 See Jones & Buckle The Civil Practice of the Magistrates’ Courts in South Africa – Volume 1: The Act 10 ed (2012) p691. 7 Foxlake Investments (Pty) Ltd t/a Foxway Developments v Ultimate Raft Foundation Design Solutions CC t/a Ultimate Raft Design and Another (Foxlake) [2016] ZASCA 54 para 14. the court a quo did not seek to introduce a new legal entity as the first defendant. It merely sought to correct the incorrect description of the defendant and encourage the proper ventilation of the real disputes between the creditor (the respondents) and the debtor (appellant). The question of prejudice to the appellants does not arise. The summons was served on the true debtor in which summons the creditor was claiming payment of the debt from the debtor.’ [19] The facts in the Foxlake judgment bear many similarities with the present matter. The regional court’s observation that the citation in the original particulars of claim matches the description in the lease agreement is borne out by the lease agreement. Macsteel’s address was exactly the same in both the original summons and the proposed amendment. The regional court’s finding that the defendant is easily identifiable cannot be faulted. By parity of reasoning, in this matter, Macsteel’s objection to the amendment of its citation was ill-conceived because the amendment of the citation was merely intended to align Macsteel’s description in the summons to the description in the lease agreement. The question of prejudice therefore did not arise. [20] Given the following remarks of this Court in Blaauwberg,8 there can be no doubt about the fallacy of Macsteel’s contentions that the defendant cited in the original summons was a non-existent party and that the defendant cited in the proposed amendment introduced a new legal entity: ‘While the entitlement of the debtor to know it is the object of the [court] process is clear, in its case the criterion fixed in s 15(1) is not the citation in the process but that there should be service on the true debtor (not necessarily the named defendant) of process in which the creditor claims payment of the debt. . . Presumably this is so because the true debtor will invariably recognise its own connection with a claim if details of the creditor and its claim are furnished to it, notwithstanding any error in its citation.’ It is clear from this passage, and the passage in Foxlake quoted in the preceding paragraph, that even if it were to be accepted in Macsteel’s favour that the regional court’s finding (that the amendment did not introduce a new defendant) was indeed final in effect, these judgments deal a fatal blow to any prospects of success on an appeal directed at this leg of Macsteel’s objection. It is plain that Macsteel 8 Blaauwberg Meat Wholesalers CC v Anglo Dutch Meats (Exports) Ltd [2003] ZASCA 144; 2004 (3) SA 160 SA para 18. recognised its connection with the claim notwithstanding that it considered the citation to be flawed. It follows that this ground of appeal also has no merit. [21] The fourth ground of objection was that the proposed amendment violated the July 2016 order, as the original particulars of claim had been set aside. Macsteel contended that in terms of the July 2016 order, Vowles was obliged to re-issue fresh particulars of claim as opposed to amending them. This contention has no merit. It must be borne in mind that although Macsteel’s exception was upheld, the regional court specifically ordered that amended particulars of claim be filed (within 20 days). The fact that the particulars of claim were set aside and were to be substituted with amended particulars of claim did not mean there was no longer a pending action between Macsteel and Vowles. Significantly, Vowles asked the regional court to condone the late filing of its application to amend the particulars of claim; the regional court, within its discretion, condoned the delay. [22] Furthermore, Macsteel’s contention that summons was to be re-issued is negated by the fact that in its notice of bar, it invited Vowles to file its amended particulars of claim within five days. Logically, it would not have asked for the filing of amended particulars of claim if its understanding of the order was that Vowles was obliged to re-issue particulars of claim. Further and in any event, to the extent that Macsteel averred that a prescribed cause of action was introduced by the substitution of the particulars of claim, nothing precluded Macsteel from raising a special plea of prescription when filing its plea. It follows that the contention that the regional court made a final determination in relation to prescription has no merit. [23] As stated before, prejudice is a key consideration in the determination of an application for amendment of pleadings. Macsteel failed to present facts showing the prejudice it stood to suffer on account of the proposed amendment. No prejudice could be established from the objections raised by Macsteel. Since no prejudice was shown, nothing stood in the way of the regional court granting the amendment. It remains now to consider the issue of the discretion exercised by the regional court in deciding whether or not to grant the amendment. [24] It is trite that applications for amendment of pleadings are regulated by a wide and generous discretion which leans towards the proper ventilation of disputes.9 Furthermore, amendments ‘will always be allowed unless the amendment is mala fide (made in bad faith) or unless the amendment will cause an injustice to the other side which cannot be cured by an appropriate order of costs, or “unless the parties cannot be put back for the purposes of justice in the same position as they were when the pleading which it is sought to amend was filed”.’10 The regional court’s exercise of its discretion is evident from the following passage in its judgment: ‘The granting [or] refusing of an amendment is a matter of the Courts discretion and of course it must be applied judiciously. The tendency in courts has generally been to allow an amendment if it can be done with no prejudice to the other side and it is true that the Courts approach applications in terms of rule 55(a), a little bit more charitably.’ [25] It is unnecessary for purposes of this appeal to determine whether the discretion exercised by the regional court in granting the amendment brought in terms of rule 55(10) was a discretion in the true sense or the loose sense. It suffices merely to state that regardless of the nature of the discretion, the regional court’s decision ought not to be interfered with lightly on appeal.11 [26] Insofar as Macsteel contended that it would be prejudiced by the granting of the amendment because of Vowles’ inordinate delay in bringing its application for amendment of its particulars of claim, it bears noting that a litigant’s delay in bringing forward its amendment is not a ground for refusing the amendment.12 This is all the more so in circumstances where the injustice to the other side can be cured by an appropriate order of costs.13 [27] In this matter, the regional court considered the inordinate delay in bringing the application and bemoaned the ‘. . . inordinate stops and starts to get the matter off the ground. . . ’. Having concluded that there was no demonstrable prejudice that 9 Fn 8 above para 8. 10 Affordable Medicines Trust and Others v Minister of Health and Another 2005 (6) BCLR 529 (CC); 2006 (3) SA 247 (CC) para 9. 11 Trencon Construction Pty (Ltd) v Industrial Development Corporation of South Africa Limited and Another [2015] ZACC 22; 2015 (10) BCLR 1199 (CC); 2015 (5) SA 245 (CC) paras 83-88. 12 See fn 8 above para 9. 13 See fn 10 above para 9. could not be cured by an appropriate order of costs, it granted the amendment but ordered Vowles to pay the costs of the application on an attorney and client scale. On the strength of the authorities mentioned in the preceding paragraph, I am satisfied that there is nothing to suggest that the regional court’s decision to condone the delay and grant the amendment was not preceded by a judicial exercise of that court’s discretion. In my view, that decision cannot be faulted. That being the case, it follows that the high court correctly dismissed the appeal. For all the reasons mentioned in the foregoing paragraphs, the appeal has no merit and falls to be dismissed. Order [28] The appeal is dismissed with costs. __________________ M B MOLEMELA JUDGE OF APPEAL APPEARANCES For appellant: A C McKenzie Instructed by: Webber Wentzel, Sandton Symington De Kok Attorneys, Bloemfontein For respondent: A P Bruwer Instructed by: Schalk Britz Inc, Benoni Honey Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 DECEMBER 2021 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Macsteel Tube and Pipe, a division of Macsteel Service Centres SA (Pty) Ltd v Vowles Properties (Pty) Ltd (680/2020) [2021] ZASCA 178 (17 December 2021) Today the Supreme Court of Appeal (SCA) handed down judgment dismissing, with costs, an appeal against a decision of the Gauteng Division of the High Court, Johannesburg (the high court). The issues before the SCA were whether the regional court made a definitive order that cannot be altered in relation to jurisdiction and, in particular, whether the amendment sought had the effect of introducing a new cause of action or a new party in relation to a claim that had prescribed; and whether the order granted by the regional court was appealable. This appeal arises from an interlocutory application pertaining to the amendment of the particulars of claim in an action that was instituted by Vowles Properties (Pty) Ltd (Vowles) against Macsteel Tube and Pipe, a Division of Macsteel Service Centres SA (Pty) Ltd (Macsteel). On 24 January 2017, the regional court granted an order setting aside the notice of amendment filed by Vowles as an irregular step. On 20 February 2017, Vowles delivered its second notice of amendment in terms of rule 55A(1) (the second rule 55A(1) notice). Macsteel again objected, as result of which Vowles withdrew that notice. On 27 October 2017, Vowles filed another notice of amendment, this time stating that the application was within the contemplation of rule 55A(4) (the October 2017 amendment application). The notice stipulated that Vowles intended to make its application on 2 February 2018 at 09h00. However, on 30 January 2018, Vowles’ attorneys filed a notice of withdrawal as attorneys of record. Vowles did not attend the proceedings on 30 January 2018, as a result of which the regional court dismissed that application with costs. On 19 June 2018, Vowles, having appointed new attorneys of record, delivered a Notice of Motion (the 2018 amendment application) indicating its intention to, in terms of s 111(1) of the Magistrates’ Court Act 32 of 1944 (Magistrates’ Court Act), alternatively in terms of rule 55A(10), amend the summons by replacing it with a copy appended to the Notice of Motion as Annexure A. Vowles sought a number of orders in the alternative, including an order declaring the proposed amendment as being an amendment of the particulars of claim in compliance with the July 2016 order. Macsteel opposed the application and raised a number of objections. On 24 October 2018, the regional court granted Vowles leave to amend the particulars of claim and ordered Macsteel to pay the costs of the application. Macsteel was aggrieved by that order and noted an appeal on the basis that the regional court had made findings which were final in effect, which would prejudice Macsteel’s conduct in defending Vowles’ claim. On 21 November 2018, Macsteel noted an appeal against the whole of the judgment and order of the regional court except the costs order. Before the Gauteng Division of the High Court, Johannesburg (the high court), sitting as a full court, Macsteel submitted that the regional court had erred in allowing the amendment of the particulars of claim. According to Macsteel, Vowles’ application to amend its particulars of claim should have been dismissed. The high court rejected that contention and dismissed the appeal with costs on 20 April 2020. Aggrieved by that order, Macsteel approached this Court seeking special leave to appeal against the order of the high court. In respect of the issue relating to jurisdiction, the SCA held that the regional court merely recognised the existence of a clause in the parties’ agreement purportedly clothing a court in the district having physical jurisdiction over Vowles, with the jurisdiction to adjudicate the action, but did not finally determine the issue of jurisdiction. As regards Macsteel’s contention that the amendment of the amount claimed was tantamount to the introduction of a new cause of action that had prescribed, the SCA considered that contention to be without merit on the basis that a plaintiff is not precluded from augmenting its claim for damages if the new claim merely represents a fresh quantification of the original claim. The SCA held that Macsteel’s objection to the amendment of its citation was ill-conceived. Relying on the judgments of Foxlake Investments (Pty) Ltd t/a Foxway Developments v Ultimate Raft Foundation Design Solutions CC t/a Ultimate Raft Design and Another (Foxlake) [2016] ZASCA 54 and Blaauwberg Meat Wholesalers CC v Anglo Dutch Meats (Exports) Ltd [2003] ZASCA 144, respectively, the SCA held that even if it were to be accepted in Macsteel’s favour that the regional court’s finding in relation to the amendment of the citation of Macsteel was indeed final in effect, that ground of appeal bore no prospects of success, as Macsteel had recognised its connection with the claim notwithstanding that it considered the citation to be flawed. ~~~~ends~~~~

4005

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1102/2021 In the matter between: ROAD ACCIDENT FUND APPELLANT And MKM obo KM and TM RESPONDENT CENTRE FOR CHILD LAW AMICUS CURIAE and In the matter between: ROAD ACCIDENT FUND APPELLANT and NM obo CM and LM RESPONDENT CENTRE FOR CHILD LAW AMICUS CURIAE Neutral citation: Road Accident Fund v MKM obo KM and Another; Road Accident Fund v NM obo CM and Another (with Centre for Child Law intervening as Amicus Curiae) (1102/2021) [2023] ZASCA 50 (13 April 2023) Bench: MAKGOKA, MOTHLE and HUGHES JJA and NHLANGULELA and MALI AJJA Heard: 4 November 2022 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website, and release to SAFLII. The date for hand down is deemed to be 13 April 2023 at 11h00. Summary: Contingency Fees Act – whether s 4 imposes an obligation on the Road Accident Fund to ensure that a legal practitioner obtains judicial approval before it enters into a settlement agreement with such a practitioner – whether a settlement agreement concluded without such judicial approval is unlawful. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Fisher J, sitting as a court of first instance): 1 In respect of both matters, the appeal is upheld with no order as to costs. 2 Under case number 1677/2019, the order of the high court is set aside and replaced with the following: ‘1 The contingency fees agreement entered into between Sonya Meistre Attorneys Incorporated (Sonya Meistre Attorneys) and the first plaintiff, is declared invalid; 2 Sonya Meistre Attorneys are directed to submit a bill of costs in respect of their attorney-and-client fees to the Taxing Master of this court (Gauteng Division, Johannesburg), within fifteen (15) days of this order. 3 Should the taxed fees be less than the amount debited as fees (25% of the capital amount) and already paid to Sonya Meistre Attorneys, the attorneys shall within seven (7) days of such taxation, pay the difference between the two amounts, into the Trust Account held on behalf of the first plaintiff. 4 The Registrar of this court is directed to: (a) to contact the first plaintiff and to explain to her the import of the judgment and the rights that it accords her and the minor children; and (b) to deliver a copy of this judgment to the Legal Practice Council; 5 The fees of the curator ad litem shall also be subjected to taxation by the Taxing Master before they are paid. 6 Sonya Meistre Attorneys are ordered to cause a Trust to be established within three months of this order in accordance with the provisions of the Trust Property Control Act 57 of 1998 in respect of the minor children; 7 The Trust referred to above must be established in accordance with clauses 5.1 – 5.13, and 6 – 9 of the Draft Consent Order dated 20 January 2021; 8 Once the Trust is established, Sonya Meistre Attorneys are ordered to pay to the Trust, all monies received from the defendant, the RAF, and held in trust on behalf of the minor children; 9 Sonya Meistre Attorneys are ordered to report to the Registrar of Judge Fisher within 3 months of this order regarding the establishment of the Trust and the payment of the monies under clause 8 above. 10 The Registrar of this court is requested to bring a copy of this judgment to the attention of the Legal Practice Council regarding the conduct of Attorney Sonya Meistre, Adv Jonatan Johanan Bouwer, and Adv Liezle Swart.’ 3 Under case number 1928/2019, the order of the high court is set aside and replaced with the following: ‘1 The contingency fees agreement entered into between Sonya Meistre Attorneys Incorporated (Sonya Meistre Attorneys), and the first plaintiff, is declared invalid; 2 Sonya Meistre Attorneys are directed to submit a bill of costs in respect of their attorney-and-client fees to the Taxing Master of this court (Gauteng Division, Johannesburg, within fifteen (15) days of this order. 3 Should the taxed fees be less than the amount of R66 625.75 debited as fees and already paid to Sonya Meistre Attorneys, the attorneys shall within seven (7) of such taxation, pay the difference between the two amounts, to the first plaintiff. 4 The Registrar of this court is requested to bring a copy of this judgment to the attention of the Legal Practice Council regarding the conduct of Attorney Sonya Meistre and Adv Liezle Swart.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ Makgoka JA (Mothle and Hughes JJA and Nhlangulela and Mali AJJA concurring): Introduction [1] The two issues in this appeal are whether: (a) there is an obligation on the Road Accident Fund (the RAF) to ensure that a legal practitioner complies with s 4 of the Contingency Fees Act1 before it can conclude a settlement agreement with a legal practitioner on behalf of a client; (b) a settlement agreement concluded without judicial approval in terms of s 4 of the Contingency Fees Act, and the RAF’s payment of the capital to a legal practitioner pursuant to such a settlement agreement, are both unlawful. [2] The Gauteng Division of the High Court, Johannesburg (the high court) answered both questions in the affirmative, and accordingly, declared the settlement agreements in the two matters before it to be unlawful, as they were concluded without judicial approval. In addition, in the first matter, the curator ad litem did not seek judicial approval to settle the matter as stipulated in a court 1 Contingency Fees Act 66 of 1997. order in terms of which the curator ad litem was appointed. For this reason, too, the high court declared the settlement agreement unlawful. [3] Consequently, the high court set aside the settlement agreements. In the first matter, it made several ancillary orders, including the suspension of the appointed curator ad litem and the appointment of a new one on behalf of the minor children. In the second matter, the high court nevertheless enforced the settlement agreement. [4] The RAF appeals against these orders, with the leave of the high court. The respondents did not participate in this appeal. The Centre for Child Law, which was admitted as amicus curiae in the high court, made submissions in this Court in support of the high court’s judgment and orders. The settlement agreements [5] The settlement agreements in question were in respect of claims for loss of support for minor children, who, in each case, had lost a parent due to fatal injuries sustained in a motor vehicle collision. The respondents represented the minor children in those claims against the RAF. Both respondents were represented by Ms Sonya Meistre (Ms Meistre) a director of Sonya Meistre Attorneys Incorporated (the attorneys), in prosecuting the claims on behalf of the children. The attorneys concluded a contingency fees agreement with each of the respondents, in terms of the Contingency Fees Act. [6] The respondent in the first matter, under case number 1677/2019, is Ms MKM, who acted on behalf of minor children KM and TM, following the death of their mother, Ms K (the deceased), who passed away on 3 August 2018. The deceased was Ms MKM’s sister, and thus the minor children’s aunt. Advocate Bouwer was appointed as curator ad litem on behalf of the minor children on 28 November 2019. In terms of paragraph 3 of the order in term of which he was appointed, he was ‘not allowed to accept any offers or make any settlements without the permission of a Judge in chambers.’ [7] In the second matter, under case number 1928/2019, the respondent, Ms NM acted on behalf of her minor children CM and LM, as their mother and natural guardian, following the death of their father, Mr JM,2 who passed away on 23 July 2018. There was no curator ad litem appointed in the second matter, ostensibly as the minor children were represented by their biological mother. The Contingency Fees Act [8] It is convenient at this stage to set out the relevant provisions of the Contingency Fees Act. Section 4 thereof provides for judicial oversight in respect of settlement of matters where a contingency fees agreement has been concluded between a client and a legal practitioner pursuant to that Act. It reads as follows: ‘Settlement (1) Any offer of settlement made to any party who has entered into a contingency fees agreement, may be accepted after the legal practitioner has filed an affidavit with the court, if the matter is before court, or has filed an affidavit with the professional controlling body, if the matter is not before court, stating- (a) the full terms of the settlement; (b) an estimate of the amount or other relief that may be obtained by taking the matter to trial; (c) an estimate of the chances of success or failure at trial; (d) an outline of the legal practitioner's fees if the matter is settled as compared to taking the matter to trial; (e) the reasons why the settlement is recommended; (f) that the matters contemplated in paragraphs (a) to (e) were explained to the client, and the steps taken to ensure that the client 2 The high court determined through the evidence of Ms NM that the father of the minor children was a Zimbabwean national, Mr JM, who was using a fake South African identity document with the names of a South African. understands the explanation; and (g) that the legal practitioner was informed by the client that he or she understands and accepts the terms of the settlement. (2) The affidavit referred to in subsection (1) must be accompanied by an affidavit by the client, stating- (a) that he or she was notified in writing of the terms of the settlement; (b) that the terms of the settlement were explained to him or her, and that he or she understands and agrees to them; and (c) his or her attitude to the settlement. (3) Any settlement made where a contingency fees agreement has been entered into, shall be made an order of court, if the matter was before court.’ [9] It is the non-compliance with these provisions that led the high court to hold that the settlement agreements were unlawful. Factual background [10] This is how the settlement agreements came about. Pursuant to their instructions, the attorneys instituted actions on behalf of the children in the high court in January 2019. In the first matter, the minor children’s claims were R448 293 and R882 915 respectively. Ms MKM claimed R21 280 in her personal capacity for funeral expenses. In the second matter, the claims on behalf of the minor children were respectively, R110 144 and R154 220. Ms NM also claimed R174 141 for loss of support as the ‘previous wife’ of the deceased Mr JM. [11] On 3 November 2020, the RAF made offers of settlement to the attorneys in the respective matters, which offers the attorneys eventually accepted. The first matter was settled for R1 345 252, and the second, for R482 483, which amounts were subsequently paid into the attorneys’ trust account. [12] It is common cause that when accepting the offers of settlement in both matters, the attorneys did not seek judicial approval in terms of s 4 of the Contingency Fees Act. Additionally, in respect of the first matter, the curator ad litem was neither involved in the settlement negotiations, nor was the settlement offer approved by a Judge in chambers as directed in the court order. Applications to have the draft orders made orders of court [13] Subsequent to the settlement of both matters, the attorneys prepared draft orders which recorded the terms of the settlement mentioned above, and made provision for payment of costs and the taxation thereof. The draft order in the first matter, in addition, makes provision for the creation of a Trust with the minor children as the sole beneficiaries, into which the monies received on their behalf would be paid. There are also detailed provisions for the management of the Trust for the benefit of the minor children. Lastly, the draft order in each matter sought to declare the contingency fees agreements between the attorneys and the respondents to be invalid. [14] On 20 January 2021, the attorneys applied to the high court to have the draft orders to be made orders of court. The applications were unopposed. The Judge who considered the applications (Fisher J) was not satisfied with a number of aspects, and requested the attorneys and the RAF to provide explanations thereto. In particular, the Judge sought clarity on whether the RAF can competently enter into settlement agreements with the claimants inter partes, and make payment in terms thereof, without judicial oversight. The court postponed both matters for further submissions on these issues. [15] In the meanwhile, the Centre for Child Law applied, and was admitted, to intervene as amicus curiae. In due course, the respondents, the RAF, and the amicus curiae filed affidavits and made written submissions. From the explanations given to the court’s queries, it emerged, among others, that during the settlement negotiations, the attorneys did not disclose to the RAF that both respondents had signed contingency fees agreements. [16] Furthermore, as far as the capital payments were concerned, the following was revealed: In the first matter, upon receipt of the monies in their trust account, the attorneys took 25% of the capital as their fees. However, no pay-out was made to Ms MKM, and the capital remains in the attorneys’ trust account. In the second matter, the attorneys took R66 625.75 as their fees and paid out the balance of R361 877.25 to Ms NM, which she invested on behalf of the children. The orders of the high court [17] The applications by the attorneys to have draft orders made orders of court, were eventually heard on 12 March 2021, and judgment was delivered on 7 April 2021. As mentioned already, the high court declared the settlement agreements in both matters unlawful, and made the following orders, respectively: In the first matter: ‘1. The application is postponed sine die. 2. The settlement agreement is declared to be invalid. 3. Adv Nomvula C Nhlapho is appointed as curator ad litem for the purposes of investigating the circumstances of the minor children and providing a report which deals with the Section 4(1) provisions of the CFA as set out in this judgment. 4. Adv Nhlapho shall have the power to: 4.1 Conclude a settlement agreement with the RAF on behalf of the children; 4.2 Place such settlement agreement before this court for approval; 4.3 Seek the court's directive in relation to what is to happen to the funds currently held in trust by Ms Meistre; 4.4 Approach this court for interim relief as far as the needs and requirements of the children are concerned, should she see fit to do so. 5. The RAF shall pay the fees of Adv Nhlapho directly to her within 30 days of receipt of an invoice from her. 6. Mr Bouwer's curatorship is suspended pending the final determination of this matter and/or this Court's further directives. 7. Until such further directives of this Court in relation to Mr Bouwer’s curatorship, he is not entitled to charge or collect any fees for his services in this matter. 8. The monies paid to Ms Meistre by the RAF pursuant to the putative settlement concluded between Ms Meistre and the RAF are to remain in trust with Ms Meistre pending this Court's further direction. 9. Ms Meistre is to produce to this Court a draft bill of costs as to her fees in this matter within 15 days of this order. 10. A copy of this judgment is to be placed before the LPC and the conduct of Ms Meistre, Adv Bouwer and Adv Swart is referred to the LPC for investigation. 11. The costs of the matter are reserved before me.’ And in the second matter: 1. The matter is postponed sine die. 2. It is directed that the amount of R 428 503-00 paid by the RAF under the putative settlement agreement in this matter is allocated as follows: a. R 164 141 is the amount due to Ms MN (First Plaintiff) personally. b. R 110 142 is the amount due to C (Second Plaintiff) c. R 154 220 is the amount due to L (Third Plaintiff) 3. Ms [Meistre] is to produce to this court a draft bill of costs as to her fees in this matter within 15 days of this order. 4. The conduct of Ms Meistre and Adv Swart is referred to the LPC for investigation. 5. The costs of the matter are reserved before me. 6. A copy of this judgment in relation to both cases is to be delivered by the Registrar to the NDPP and the Minister of Transport.’ Analysis [18] I turn now to consider whether the high court was correct in making these orders. In each of the matters, summons was issued in January 2019. The offers of settlement were made in November 2020. The matters were therefore before court as envisaged in both ss 4(1) and 4(3) of the Contingency Fees Act. Thus, pursuant to those provisions, the attorneys were undoubtedly obliged to obtain judicial approval before accepting the offers of settlement agreements from the RAF. As mentioned already, it is common cause that the attorneys did not comply with this requirement. Two questions arise from this non-compliance. [19] First, does the RAF bear any obligation to ensure that a legal practitioner complies with s 4 of the Contingency Fees Act? Second, does non-compliance with those provisions by the legal practitioner invalidates the settlement agreement concluded between the RAF and the claimant, and the payment made pursuant to it? I consider these, in turn. Does the RAF bear obligation to ensure compliance with s 4 of the Contingency Fees Act? [20] The high court answered this question in the affirmative. It concluded that the RAF acts contrary to its functions and powers when it enters into a settlement agreement with a claimant’s attorneys without judicial oversight, and that payment pursuant to such a settlement agreement, is unlawful. It reasoned as follows: ‘[T]he validity of a contingency fees agreement is integral to the RAF’s ability lawfully to enter into a settlement agreement. The provisions of the Contingency Fees Act permeate the entire settlement process for litigious claims in the RAF environment and the contractual and other relationships which operate in the field of the RAF claim can only be understood with reference to CFA.’ [21] The views expressed by the high court are simply not correct. The Contingency Fees Act came into operation on 23 April 1999. Its history, statutory context, and purpose were considered in the report of the South African Law Commission (South African Law Commission, Project 93 ‘Speculative and Contingency Fees’ November 1996) and Price Waterhouse Coopers v National Potato Co-operative3 (Price Waterhouse Coopers). There is nothing in that report or Price Waterhouse Coopers that suggests that the contingency fees agreements in claims against the RAF occupied the minds of those responsible for the enactment of the Contingency Fees Act. [22] The Contingency Fees Act is a legislation of general application and is not aimed only at contingency fees agreements in the context of claims against the RAF. Thus, there is no single reference to road accident fund claims in the Contingency Fees Act. It was thus impermissible for the high court to carve out a special dispensation in respect of contingency fees agreements where claims are against the RAF. [23] Furthermore, the RAF discharges its mandate in terms of the Road Accident Fund Act4 (the RAF Act). That Act, in s 4(1)(b), sets out as one of the RAF’s powers and functions, ‘the investigation and settling’ of claims arising from loss or damage caused by the driving of a motor vehicle. This section does not subject the RAF’s power to any judicial approval, and there is nothing in the Contingency Fees Act that this changed with the advent of the latter Act. [24] The RAF’s power to settle matters (without judicial approval) before litigation is given impetus by s 24(6)(a) and (b) of the RAF Act, which provides: ‘No claim shall be enforceable by legal proceedings commenced by a summons served on the Fund or an agent – (a) before the expiry of a period of 120 days from the date on which the claim was sent or delivered by hand to the Fund or the agent as contemplated in subsection (1); and (b) before all requirements contemplated in in section 19(f) have been complied with: 3 Price Waterhouse Coopers v Inc and Others v National Potato Co-operative Ltd [2004] ZASCA 64; 2004 (6) SA 66 (SCA); [2004] 3 All SA 20 (SCA) (Price Waterhouse Coopers) paras 26-46. 4 56 of 1996. Provided that the Fund or the agent repudiates in writing liability for the claim before the expiry of the said period, the third party may at any time after such repudiation serve summons on the Fund or the agent, as the case may be.’ [25] Historically, the RAF has used this window period of 120 days to consider and investigate claims. Similarly, there is no suggestion that with the advent of the Contingency Fees Agreement, the RAF can now only exercise this power subject to compliance by a legal practitioner with the provisions of s 4 of the Contingency Fees Act. [26] The high court also said: ‘In short, where there is a [contingency fees agreement] (and this would rationally be the case in all RAF matters where action is instituted using the services of an attorney) the RAF is not empowered to make an out of court settlement.’ and ‘[A]s part of its administrative function, [the RAF] has a duty to see to it that the provisions of [the Contingency Fees Act] are strictly adhered to when it comes to settling claims.’ Also, ‘The making of payment without a court order, is incompetent and contrary to the statutory scheme which binds the RA. Without a valid settlement it has no basis to pay out on the claim and such payment is technically made ultra vires. [27] I disagree with these pronouncements and findings. It must be borne in mind that a contingency fees agreement is a bilateral agreement between a legal practitioner and his or her client. It has nothing to do with a party against whom the client has a claim – the RAF in this instance. By its very nature, it is confidential and privileged between the client and his or her legal practitioner. Thus, ordinarily, a third party against whom a claim is prosecuted (such as the RAF), would not know about its existence, and has no right, nor an obligation, to enquire about its existence or its contents. [28] The effect of the high court’s judgment is that in each claim against it, before it makes an offer of settlement, and pays in terms of the subsequent settlement, the RAF must enquire from the claimant’s legal practitioner whether there is a contingency fees agreement. If there is, the RAF must insist that the legal practitioner must obtain judicial approval in terms of s 4(1) of the Contingency Fees Act before it concludes a settlement agreement with him or her. If it does not, and it settles the claim, and pays out the capital amount without the legal practitioner having obtained judicial approval, it acts unlawfully. [29] That is untenable. There are no textual or contextual indications in the Contingency Fees Act that the RAF bears any obligation to insist on a legal practitioner to obtain judicial oversight before it concludes a settlement agreement with such a practitioner. As the short title of the Contingency Fees Act makes plain, the Act was enacted: ‘To provide for contingency fees agreements between legal practitioners and their clients; and to provide for matters connected therewith.’ [30] It is practically not clear how the RAF can force the legal practitioners, who act on behalf of its opponents, to comply with s 4 of the Contingency Fees Act. The high court, by a fiat, impermissibly imposed an obligation on the RAF not contemplated in the Contingency Fees Act. It did so, purportedly on the basis of a ‘purposive interpretation’ of the Contingency Fees Act. This, with respect, is not interpretation, but legislation, which is not within a court’s remit. [31] I therefore conclude that there is no obligation on the RAF to ensure that the legal practitioner complies with the provisions of s 4 before it concludes a settlement agreement with him or her. It may well be salutary, where a contingency fees agreement is in place, for the RAF to enquire whether there has been compliance with s 4 of the Contingency Fees Act before it concludes a settlement agreement with a legal practitioner. But that does not equate to a statutory or legal obligation. Does non-compliance with s 4 invalidate the settlement agreement? [32] In terms of s 4(1) of the Contingency Fees Act, once an offer of settlement is made to a claimant who has concluded a contingency fees agreement with a legal practitioner, such a practitioner is not entitled to accept the offer of settlement without the approval of the court, if it is a litigious matter, or the professional controlling body, in case of a non-litigious matter. [33] In the context of claims pursuant to the RAF Act, provided a contingency fees agreement has been concluded, the Contingency Fees Act would find application in two instances envisaged in s 4(1) of that Act. First, if the RAF makes an offer of settlement during the period of 120 days envisaged in s 24(6)(a) of the RAF Act. The second instance would arise after the expiry of the 120 days or where the RAF had, before the expiry of that period, repudiated liability, and in each case, a claimant has served a summons in terms of the proviso to s 24(6) of the RAF Act. [34] In each of the two instances, the claimant’s legal practitioner has an obligation to seek approval of the offer of settlement from the professional controlling body or the court, as the case may be, depending on whether the matter is litigious or non-litigious. The legal practitioner has no discretion in this regard. To obtain such approval, s 4(1) requires such a legal practitioner to file an affidavit stating the factors referred to in that section. In terms of s 4(2), such an affidavit must be accompanied by the confirmatory affidavit of the practitioner’s client. To put the issue beyond doubt, s 4(3) provides that ‘[a]ny settlement made where a contingency fees agreement has been entered into, shall be made an order of court, if the matter was before court.’ [35] According to the high court, non-compliance with these provisions invalidates the underlying settlement agreement, and payment pursuant to such settlement agreement is unlawful. It seems to me that the high court conflated two issues that should be kept separate and distinct – the non-compliance by the legal practitioner with s 4 of the Contingency Fees Act on the one hand, and the validity of a settlement agreement, on the other. In my view, the invalidity of the former does not affect the validity of the latter. There are consequences for the legal practitioner if there is non-compliance with s 4, which I consider next. [36] It is trite that a contingency fees agreement that is not covered by the Contingency Fees Act, or which does not comply with its requirements, is invalid.5 Thus, the effect of non-compliance with s 4 of the Contingency Fees Act is that as between the legal practitioner and his or her client, the agreement is unenforceable. Thus, the legal practitioner would not be entitled to charge the client higher fees set out in the contingency fees agreement, but only to his or her reasonable attorney and client fees. As explained in Tjatji and Others v Road Accident Fund:6 ‘As both the initial and new contingency fee agreements are invalid the common law will apply. Under the common law, the plaintiffs’ attorneys are only entitled to a reasonable fee in relation to the work performed. Taxation of a bill of costs is the method whereby the reasonableness of a fee is assessed. The plaintiffs’ attorneys are therefore only entitled to such fees as are taxed or assessed on an attorney and own client basis.’7 5 Ronald Bobroff & Partners Inc v De La Guerre [2014] ZACC 2; 2014 (3) SA 134 (CC); Masango v Road Accident Fund [2016] ZAGPJHC 227; 2016 (6) 508 (GJ) para 1; Fluxmans Incorporated v Levenson [2016] ZASCA 183; [2017] 1 All SA 313 (SCA); 2017 (2) SA 520 (SCA) para 27; Mostert and Others v Nash and Another [2018] ZASCA 62; 2018 (5) SA 409 (SCA) para 54; Mfengwana v Road Accident Fund [2016] ZAECGHC 159; 2017 (5) SA 445 (ECG) (Mfengwana) para 12; Mathimba and Others v Nonxwba and Others 2019 (1) SA 591 (ECG) para 118.1. 6 Tjatji and Others v Road Accident Fund [2012] ZAGPJHC 198; 2013 (2) SA 632 (GSJ). 7 Ibid para 26. [37] But it does not follow that because the contingency fees agreement is invalid, the underlying settlement agreement concluded between the RAF and the legal practitioner on behalf of his or her client, is also invalid, as suggested by the high court. As explained in Price Waterhouse Coopers, the fact that a litigant has entered into an unlawful agreement with a third party to provide funds to finance his case is a matter extraneous to the dispute between the litigant and the other party and is therefore irrelevant to the issues arising in the dispute, whatever the cause of action.8 [38] Consistent with that approach, in Mfengwana v Road Accident Fund9 (Mfengwana) the court declared the contingency fees agreement invalid, but still made the settlement agreement an order of court. Plasket J adopted an admirably practical approach, which, with respect, I endorse. He remarked: ‘I am able to make an order, in the absence of compliance with s 4(1) and s 4(2) of the Act, to settle Mr Mfengwana’s claim against the RAF. I do so because, it seems to me, [the claimant] will be prejudiced by any further delay, which is not of his making, and because, having been seized of the matter, I have satisfied myself (to the extent that I am able) that the settlement is fair. . .’10 [39] To protect the interests of the plaintiff, the court in Mfengwana built into its order some safeguards. The order provided that the plaintiff’s attorneys could only recover from him, their attorney and client costs after such costs had been taxed. The Registrar was also requested: (a) to contact the plaintiff and to explain to him the import of the judgment and the rights that it accords him; and (b) to deliver a copy of the judgment to the professional controlling body (the Cape Law Society at the time). 8 Price Waterhouse Coopers fn 3 para 48. 9 Mfengwana fn 4. 10 Ibid para 30. [40] The effect of non-compliance with s 4 of the Contingency Fees Act on settlement agreements and court orders arose squarely in Theodosiou v Schindlers Attorneys.11 The first defendant, a firm of attorneys, had represented the plaintiffs in several litigious matters and had agreed to do so on a contingency basis. Settlement agreements were concluded in some of the matters and were made orders of court. The plaintiffs thereafter sought to set aside two court orders, one incorporating the two settlement agreements and the other, the consent to a monetary judgment, due to non-compliance with the Contingency Fees Act. They contended that as the contingency fees agreement was illegal and void due to the said non-compliance, all agreements and orders flowing from that agreement were also void. [41] The court concluded that while non-compliance with the Contingency Fees Act rendered the contingency fees agreement invalid and void, this does not invalidate any related settlement agreement made an order of court without justus error, fraud, or public policy considerations. [42] In my view, this holding is, with respect, undoubtedly correct. It accords with the general principle of our law as articulated in Price Waterhouse Coopers and applied in Mfengwana. Thus, the contrary holdings by the high court cannot be supported. The high court’s residual pronouncements and ancillary orders [43] Before I conclude, I am constrained to comment on some of the high court’s pronouncements with regard to claims involving minor children. First, the high court suggested that the RAF has an added responsibility when it comes to claims on behalf of minor children. The high court said: 11 Theodosiou and Others v Schindlers Attorneys and Others [2022] ZAGPJHC 9; [2022] 2 All SA 256 (GJ); 2022 (4) SA 617 (GJ). ‘The administrative function of the RAF is thus all the more important where it is entering into settlement negotiations with a person representing a child. Before it pays, the RAF has the duty to satisfy itself that a proper case has been presented on behalf of the child. It cannot do this in the context of its function unless it is allowed a sense of the merits. This will entail a proper case as to the claim being placed before the RAF.’ [44] While one cannot quibble with the general thrust that the minor children’s best interests ought to be considered in all matters concerning them, in claims pursuant to the RAF Act, it is generally not the duty of the RAF to secure such interests. That duty falls on those entrusted with the task to look after the interests of the minor children, like the legal practitioners appointed on their behalf, and curators ad litem, where they have been appointed. Ultimately, the duty rests on the court as the upper guardian of the minor children. [45] The RAF, it must be borne in mind, is a litigant whose interests are not always aligned with those of the minor children. It can, for example, only consider a claim on behalf of a minor child as it receives it from those who represent the minor child. Thus, it can only investigate the claim as presented to it, and cannot be expected to go beyond that. It could be that in certain instances the RAF would be expected to play a more proactive role in a claim on behalf of a minor, for example, where a person who lodges a claim on behalf of a minor is not legally represented. But that was not the situation in either of the two matters before the high court, and the high court’s discussion on this aspect was with respect, not necessary. [46] More so, there was no suggestion that any of the minor children’s claims were under-settled. On the contrary, it appears that both matters were settled very close to what was originally claimed. In the first matter, R1 354 488 was initially claimed. It was settled for R1 345 252. In the second matter, the initial claim was R438 505, which was settled for R482 483. [47] The high court also purported to prescribe additional factors to those set out in s 4(1)(a)–(g) of the Contingency Fees Act, when judicial approval is sought to accept an offer of settlement made in respect of a minor child’s claim. The high court held that, in addition to those factors, the legal practitioner’s affidavit should also contain the following factors: (a) the relationship between the plaintiff and the child, and the duration thereof; (b) the circumstances that led to the plaintiff caring for the child; (c) the interests of the plaintiff; (d) the financial circumstances of the plaintiff and his or her ability to safeguard and administer the money; (d) the personal and financial circumstances of the child including his or her home circumstances and maintenance needs; (e) a justification for the vehicle agreed to administer the funds and why such a vehicle is preferable to the other possibilities; and (f) the views and wishes of the child concerned, where appropriate. [48] The high court was influenced in this regard by its view that ‘the provisions of the Contingency Fees Act permeate the entire settlement process for litigious claims in the RAF environment.’ I have demonstrated that this is not so. In any event, the additional factors suggested by the high court are among those which, ordinarily, would be contained in a report to the court by a curator ad litem where such has been appointed. And this would inevitably be the case in all matters where minor children are represented by persons other than their biological parents. [49] It is certainly not for the courts to prescribe additional factors to the legislative scheme of the Contingency Fees Act. That is for the Legislature. In my view, the high court impermissibly trenched upon the tenet of separation of powers, and improperly trespassed on the exclusive domain of the Legislature. As explained in National Treasury v Opposition to Urban Tolling Alliance,12 courts must refrain from entering the exclusive terrain of the Executive and the Legislative branches of State unless the intrusion is mandated by the Constitution itself. This is not the case here. [50] The high court also embarked on a consideration of various vehicles to protect monies claimed on behalf of minor children pursuant to the RAF Act. After a lengthy excursus, the high court concluded that the Guardian’s Fund offered ‘a safe, reliable, accessible and free service and it should not be overlooked by a court as a possible vehicle for protecting children’s monies, based only on apocryphal reports of inefficiency in the Master’s Office.’ [51] To my mind, this was not necessary in the present case. There was no suggestion that the funds received on behalf of the minor children were not properly secured in their interests. As mentioned already, in the first matter, provision had been made for the creation of a Trust with the minor children as the sole beneficiaries, into which the monies received on their behalf would be paid. [52] In its judgment, the high court did not state what is objectionable about the envisaged Trust, which is a standard practice in matters such as this. On the face of it, this appears to be in the best interests of the minor children. In the second matter, the mother of the minor children had responsibly invested the funds on behalf of the minor children, and the high court was satisfied with this arrangement. In my view, this should have been the end of the matter. [53] In light of the above, the high court should have separated the enquiry into the best interests of the minor children, from its concerns about the conduct of the 12 National Treasury and Others v Opposition to Urban Tolling Alliance and Others [2012] ZACC 18; 2012 (6) SA 223 (CC); 2012 (11) BCLR 1148 (CC) para 48. legal practitioners and the curator ad litem. It could have made orders referring their conduct to the Law Practice Council, without holding back payment of the monies for the benefit of the minor children in the first matter. As mentioned already, on the face of it, the claim was fairly settled – close to what was initially claimed. A Trust was to be created to regulate the management of the funds on behalf of the minor children. [54] On the facts before it, the best interests of the minor children dictated that the high court should have ratified the processes in respect of the settlement of the minor children’s claims. Instead, the high court adopted a pedantic and unnecessarily formalistic approach. As a result, the minor children in the first matter, have to date, still not received the benefit of the funds received on their behalf. This is prejudicial, and not in their best interests. [55] It is worth pointing out that none of the wide-ranging and far-reaching orders made by the high court were sought by any of the parties. Just to recap, what was before the high court, and which the high court was called to adjudicate upon, were unopposed applications to have the draft orders made orders of court. Much of what was traversed by the high court in its judgment was not germane to the issues and the facts before it. I have already alluded to the high court’s extensive consideration as to whether the Guardian’s Fund was a possible vehicle to protect monies claimed on behalf of minor children. For the reasons already mentioned, this was irrelevant on the facts of these matters. [56] I briefly turn to examine the orders granted by the high court and their appropriateness or desirability. Appointment of a new curator ad litem [57] In the first matter, the court postponed the matter sine die and appointed a new curator ad litem with ancillary orders. In my view, this was unnecessary. As mentioned already, the matter had been settled in what appeared to be a fair amount, and a Trust was envisaged to be created to manage the monies on behalf of the children. The new curator ad litem was appointed ostensibly on the court’s holding that the settlement agreement concluded between the RAF and the attorneys was invalid, hence the new curator ad litem was to ‘conclude a settlement agreement with the RAF on behalf of the children’ and ‘place such settlement agreement before this court for approval’. [58] Having concluded in this judgment that the settlement agreement is valid, the substratum for the appointment of a new curator ad litem unravels. This order should accordingly be set aside. On the available facts, I am satisfied that the minor children’s interests would be served by paying the monies on their behalf into the Trust to be created. I find nothing worrisome in the provisions of the envisaged Trust regarding the interests of the minor child are concerned. [59] In his three reports, the originally appointed curator ad litem confirmed that, contrary to the court order in terms of which he was appointed, he did not obtain the court’s approval before accepting the settlement agreement. His explanation therefor was that this occurred during the lockdown period as a result of the Covid-19 pandemic. He explains that no Judges were available at court, and thus could not approach a Judge in chambers for that purpose. However, he was satisfied that the settlement agreement was in the best interests of the children. He, therefore, ratified the settlement agreement and requested the court to ‘condone’ his non-compliance with the court order. [60] In my view, this explanation is unconvincing. During the Covid-19 lockdown period, court administration was not halted. There is nothing that prevented the curator ad litem from requesting the Deputy Judge President to designate a Judge to consider the settlement and give his or her approval, without physical contact. Having said that, the overriding consideration is whether it was in the best interests of the minor children for the high court to nevertheless condone the curator ad litem’s failure to obtain judicial approval of the settlement offer. [61] I am of the view that the high court should have acceded to the curator ad litem’s request, and approved the settlement agreement, which appears to be in the best interests of the minor children. Thus viewed, the appointment of a new curator ad litem was not necessary. The order in terms of which she was appointed, and its ancillary provisions, should be set aside. I am alive to the fact that the new curator ad litem may well have performed some work in terms of the high court’s order. To that extent, she should be remunerated for her services, despite us setting aside her appointment. Referral to the National Director of Public Prosecutions and the Minister of Transport [62] It is not clear from the judgment why the high court deemed it necessary to bring the judgment to the attention of the National Director of Public Prosecutions and the Minister. The referral to the National Director of Public Prosecutions suggests that the Judge held a prima facie view that there was some criminal conduct by someone in the matter. However, nowhere in the judgment does the Judge identify such prima facie criminal conduct and ‘the culprit’ to be investigated. As regards the referral to the Minister, I assume that this was predicated on the court’s holding that the RAF acted unlawfully in settling the matter with the attorneys without complying with s 4 of the Contingency Fees Act. I have clarified that the RAF did not act unlawfully. Consequently, this order should be set aside in both matters. Allocation of the capital amount: second matter [63] The second matter was also postponed sine die, and the court directed how the capital of R 428 503-00 paid by the RAF should be allocated between the respondent and the minor children. In light of the fact that the money had already been paid, and the minor children’s portion had been invested to the satisfaction of the court, these orders seem superfluous and should be done away with. Bills of costs [64] In both matters, the high court ordered the attorneys ‘to produce to the Court a draft bill of costs as to her fees in this matter within 15 days of this order.’ For what purpose, it may be asked? Suppose such a bill of costs is presented to the court and upon perusal, it questions some of the items. What would it do about it? Not much, because whether a legal practitioner’s fees are reasonable or not, is not within a court’s remit. That is the function of the Taxing Master. This order should be set aside and replaced with a suitable order in terms of which the attorneys’ bills of costs would be subjected to taxation by the Taxing Master before presenting them to the respondents for payment. Referral to the Legal Practice Council [65] In seeking approval to have the draft orders made orders of court, the legal representatives gave the court the impression that the payments to the attorneys would be made once the orders were made. They failed to disclose to the court that in both matters: (a) capital had already been made; (b) the attorneys had already taken their fees without any taxation of such fees. Thus, the court was effectively misled. This conduct on the part of the legal practitioners should be brought to the attention of the Legal Practice Council. So should the conduct of the curator ad litem in failing to seek judicial conduct before accepting the offer of settlement. Thus, this referral was, in my view, appropriate, and should be retained. A court should confine itself to the issues [66] Before I conclude, it is necessary to say something about how the high court went about adjudicating these matters. As interesting as some of the issues raised by the high court might be, they simply did not arise on the papers before it, and it was therefore not necessary for it to pronounce on them. This Court has emphasised the need for courts to confine themselves to the issues before them. In Fischer v Ramahlele this Court cautioned:13 ‘[I]t is for the parties, either in the pleadings or affidavits, which serve the function of both pleadings and evidence, to set out and define the nature of their dispute, and it is for the court to adjudicate upon those issues. . . . [T]here may also be instances where the court may mero motu raise a question of law that emerges fully from the evidence and is necessary for the decision of the case. That is subject to the proviso that no prejudice will be caused to any party by its being decided. Beyond that, it is for the parties to identify the dispute and for the court to determine that dispute and that dispute alone.’14 (Footnotes omitted. Emphasis added.) [67] Recently, it became necessary for this Court to repeat the admonition in Advertising Regulatory Board v Bliss Brands15 (Bliss Brands). That case concerned an advertisement dispute between Bliss Brand and the Advertising Regulatory Board (ARB). The high court in that matter (incidentally Fisher J),16 had mero motu questioned the constitutionality of the powers of the ARB, and 13 Fischer and Another v Ramahlele and Others [2014] ZASCA 88; 2014 (4) SA 614 (SCA); [2014] 3 All 395 (SCA). 14 Ibid para 13. Received the imprimatur of the Constitutional Court in Public Protector v South African Reserve Bank [2019] ZACC 29; 2019 (6) SA 253 (CC) para 234. See also National Commissioner of Police and Another v Gun Owners of South Africa [2020] ZASCA 88; [2020] 4 All SA 1 (SCA); 2020 (6) SA 69 (SCA); 2021 (1) SACR 44 (SCA) para 26. 15 Advertising Regulatory Board NPC and Others v Bliss Brands (Pty) Ltd [2022] ZASCA 51; [2022] 2 All SA 607 (SCA); 2022 (4) SA 57 (SCA) (Bliss Brands). 16 The same Judge in the present matter. issued a directive that the parties submit arguments on the issue, and other issues identified mero motu by the court. [68] After referring to the passage in Fischer v Ramahlele (above) this Court in Bliss Brands said: ‘This admonition [in Fischer v Ramahlele], regrettably, was disregarded by the high court. Bliss Brands’ submission to the jurisdiction of the ARB should have put paid to any challenge to jurisdiction, or to the constitutionality of the Code or MOI. Instead, the issuance of the directive resulted in virtually an entirely new case for decision.’17 In this case, too, the admonition was regrettably disregarded. Conclusion [69] In all the circumstances, I am satisfied that the appeal must succeed. There should not be any costs order. Order [70] The following order is made: 1 In respect of both matters, the appeal is upheld with no order as to costs. 2 Under case number 1677/2019, the order of the high court is set aside and replaced with the following: ‘1 The contingency fees agreement entered into between Sonya Meistre Attorneys Incorporated (Sonya Meistre Attorneys) and the first plaintiff, is declared invalid; 2 Sonya Meistre Attorneys are directed to submit a bill of costs in respect of their attorney-and-client fees to the Taxing Master of this court (Gauteng Division, Johannesburg), within fifteen (15) days of this order. 17 Bliss Brands fn 14 para 10. 3 Should the taxed fees be less than the amount debited as fees (25% of the capital amount) and already paid to Sonya Meistre Attorneys, the attorneys shall within seven (7) days of such taxation, pay the difference between the two amounts, into the Trust Account held on behalf of the first plaintiff. 4 The Registrar of this court is directed to: (a) to contact the first plaintiff and to explain to her the import of the judgment and the rights that it accords her and the minor children; and (b) to deliver a copy of this judgment to the Legal Practice Council; 5 The fees of the curator ad litem shall also be subjected to taxation by the Taxing Master before they are paid. 6 Sonya Meistre Attorneys are ordered to cause a Trust to be established within three months of this order in accordance with the provisions of the Trust Property Control Act 57 of 1998 in respect of the minor children; 7 The Trust referred to above must be established in accordance with clauses 5.1 – 5.13, and 6 – 9 of the Draft Consent Order dated 20 January 2021; 8 Once the Trust is established, Sonya Meistre Attorneys are ordered to pay to the Trust, all monies received from the defendant, the RAF, and held in trust on behalf of the minor children; 9 Sonya Meistre Attorneys are ordered to report to the Registrar of Judge Fisher within 3 months of this order regarding the establishment of the Trust and the payment of the monies under clause 8 above. 10 The Registrar of this court is requested to bring a copy of this judgment to the attention of the Legal Practice Council regarding the conduct of Attorney Sonya Meistre, Adv Jonatan Johanan Bouwer, and Adv Liezle Swart.’ 3 Under case number 1928/2019, the order of the high court is set aside and replaced with the following: ‘1 The contingency fees agreement entered into between Sonya Meistre Attorneys Incorporated (Sonya Meistre Attorneys), and the first plaintiff, is declared invalid; 2 Sonya Meistre Attorneys are directed to submit a bill of costs in respect of their attorney-and-client fees to the Taxing Master of this court (Gauteng Division, Johannesburg, within fifteen (15) days of this order. 3 Should the taxed fees be less than the amount of R66 625.75 debited as fees and already paid to Sonya Meistre Attorneys, the attorneys shall within seven (7) of such taxation, pay the difference between the two amounts, to the first plaintiff. 4 The Registrar of this court is requested to bring a copy of this judgment to the attention of the Legal Practice Council regarding the conduct of Attorney Sonya Meistre and Adv Liezle Swart.’ __________________ TATI MAKGOKA JUDGE OF APPEAL Appearances: For appellant: R Schoeman (Heads of Argument drafted by R Schoeman and L Mokgoroane) Instructed by: Malatji and Co., Johannesburg Honey Attorneys, Bloemfontein For amicus curiae: RM Courtenay Instructed by: Centre for Child Law, Faculty of Law, University of Pretoria Webbers Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY FROM The Registrar, Supreme Court of Appeal DATE 13 April 2023 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Road Accident Fund v MKM obo KM and Another; Road Accident Fund v NM obo CM and Another (with Centre for Child Law intervening as Amicus Curiae) (1102/2021) [2023] ZASCA 50 (13 April 2023) Today the Supreme Court of Appeal handed down a judgment in which it upheld appeals by the Road Accident Fund (the RAF) against orders of the Gauteng Division of the High Court Johannesburg (the high court). That court had, in both matters, held that the RAF is obliged to ensure that a legal practitioner complies with s 4 of the Contingency Fees Act 66 of 1997, before it concludes a settlement agreement with such a practitioner on behalf of a client. Consequently, the high court concluded that a settlement agreement concluded without judicial approval in terms of s 4 of the Contingency Fees Act, and the RAF’s payment of the capital to a legal practitioner pursuant to such a settlement agreement, are both unlawful. Accordingly, the high court declared the settlement agreements in the two matters before it to be unlawful, as they were concluded without judicial approval. The Supreme Court of Appeal considered s 4 of the Contingency Fees Act. That section provides, among others, that where a practitioner has concluded a contingency fees agreement with a client, and an offer of settlement is made to such a client, the practitioner is obliged to seek the court’s approval before accepting the offer. The Court concluded that the Act imposed no obligation on the RAF to ensure that a legal practitioner complies with s 4 of the Act before it concludes a settlement agreement with such a practitioner. The consequence of non-compliance with s 4 is that the practitioner loses his or her right to charge a higher fee in terms of the contingency fees agreement. He or she would only be entitled to reasonable attorney-and-client fees. However, this did not have any effect on the validity of the underlying settlement agreement. The Supreme Court of Appeal consequently upheld the appeals and substituted the orders of the high court with appropriate orders. *END*

3851

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 334/2021 Case No: 338/2021 In the matter between: GOVAN MBEKI LOCAL MUNICIPALITY FIRST APPELLANT EMALAHLENI LOCAL MUNICIPALITY SECOND APPELLANT and GLENCORE OPERATIONS SOUTH AFRICA (PTY) LTD FIRST RESPONDENT DUIKER MINING (PTY) LTD SECOND RESPONDENT TAVISTOCK COLLIERIES (PTY) LTD THIRD RESPONDENT UMCEBO PROPERTIES (PTY) LTD FOURTH RESPONDENT IZIMBIWA COAL (PTY) LTD FIFTH RESPONDENT Neutral citation: Govan Mbeki Local Municipality and Another v Glencore Operations South Africa (Pty) Ltd and Others (334/2021 and 338/2021) [2022] ZASCA 93 (17 June 2022) Coram: MAYA P and DAMBUZA and PLASKET JJA and MUSI and SALIE-HLOPHE AJJA Heard: 6 May 2022 Delivered: 17 June 2022 Summary: Constitution – local government – Local Government: Municipal Systems Act 32 of 2000 – validity of municipal by-laws – whether provisions of by- laws fell within the legislative competence of a municipality. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Mpumalanga Division of the High Court, Middelburg (Barnardt AJ, sitting as court of first instance): In case no 334/2021 (Govan Mbeki Local Municipality): The appeal is dismissed with costs, including the costs of two counsel. The cross-appeal is upheld with costs, including the costs of two counsel. Paragraph 4 of the high court’s order is set aside. In case no338/2021 (Emalahleni Local Municipality): The appeal is dismissed with costs, including the costs of two counsel. The cross-appeal is upheld with costs, including the costs of two counsel. Paragraph 4 of the high court’s order is set aside. __________________________________________________________________ JUDGMENT __________________________________________________________________ Salie-Hlophe AJA (Maya P and Dambuza and Plasket JJA and Musi AJA concurring): [1] Two appeals are before us. They concern identical issues. They are both directed at orders of the Mpumalanga Division of the High Court, Middelburg (the high court), in which Barnardt AJ declared s 76 of the Govan Mbeki Spatial Planning and Land Use Management By-law1 (the GMBL) and s 86 of the Emalahleni Municipal By-law on Spatial Planning and Land Use Management 20162 (the EBL) to be invalid and unconstitutional. A third municipality, the Steve Tshwete Local Municipality, did not appeal against a similar order in respect of the invalidity of its comparable by-law. The respondents, Glencore Operations South Africa (Pty) Ltd, Duiker Mining (Pty) Ltd, Tavistock Collieries (Pty) Ltd, Umcebo Properties (Pty) Ltd and Izimbiwa Coal (Pty) Ltd, cross-appealed against the decision of the high court 1Provincial Notice 10 of 2016, Provincial Gazette (Mpumalanga) 2650 of 17 February 2016. 2Provincial Notice 4 of 2016, Provincial Gazette (Mpumalanga) 2653 of 24 February 2016. suspending the declaration of invalidity of the by-laws for a period of six months to allow the competent authority to correct the defect. The appeal and cross-appeal are with leave of the high court. Facts [2] The respondents are companies that intend to transfer or take transfer of a number of immovable properties situated within the municipal boundaries of the three local municipalities mentioned above. [3] The municipalities all promulgated similarly crafted by-laws which placed restraints on the transfer of erven and land units within their respective areas of jurisdiction. In terms of these by-laws, an owner (transfer or) could not apply to the registrar of deeds to register the transfer of an erf or land unit except upon production of a certificate, issued by the municipality, certifying that all spatial planning, land- use management, and building regulation conditions or approvals in connection with those erven or land units had been obtained and complied with the requirements of the by-law. The respondents approached the high court for orders declaring the relevant sections of the by-laws to be constitutionally invalid. They argued that even if the municipalities had the power to enact such by-laws, they nonetheless infringed the land owner’s constitutional right arising from its ownership, in that they placed insurmountable obstacles in the way of registering the transfer of ownership of their properties. They argued further that the by-laws, in effect, imposed an embargo on the registration of transfer of ownership of an immovable property until the municipality issues a certificate that the owner has proved that all the debts due in respect of the property have been paid and the use of the property and the buildings comply with its land-use scheme. The high court [4] The relief sought by the respondents was aimed at: a. declaring the by-laws unconstitutional and invalid because they were inconsistent with s 25 of the Constitution, as their application leads to an arbitrary deprivation of property; b. declaring the by-laws unconstitutional and invalid because they legislate on matters which fall outside the scope of powers assigned to local government in terms of s 156 read with Part B of Schedule 4 and Part B of Schedule 5 of the Constitution; c. declaring the by-laws unconstitutional and invalid because they are not authorised by any empowering provisions (national or provincial legislation); d. declaring the by-laws unconstitutional and invalid because they conflict with the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act)or the Spatial Planning and Land Use Management Act 16 of 2013 (the SPLUMA); e. reviewing and setting aside the interpretation of the by-laws by the municipalities in terms of s 8 of the Promotion of Administrative Justice Act 3 of 2000, and compelling the municipalities to receive, consider and respond to all applications by the respondents based on the correct interpretation of the by-laws; and f. reviewing and setting aside the decision by the registrar of deeds to give effect to the by-laws and directing the registrar of deeds to receive and process the applications for registration of transfer of the respondents’ properties without requiring the respondents to produce planning certificates. [5] The high court declared the by-laws unconstitutional and invalid on the basis that they constituted an arbitrary deprivation of property as envisaged in s 25(1) of the Constitution. It held further that the by-laws were unconstitutional and invalid, because they were not authorised by s 156 read with Part B of Schedule 4 of the Constitution, and conflicted with s 118 of the Systems Act. The high court suspended the declaration of invalidity for a period of six months to enable the municipalities to cure the defects in their by-laws. Issues on appeal [6] The central issue in this appeal is the validity of the by-laws. The answer to this question requires consideration of whether the by-laws were enacted within the legislative competence of municipalities as contemplated in s 156 of the Constitution. It follows as a matter of logic that should the by-laws be determined to be falling outside the scope of powers assigned to local government in terms of the Constitution, they will be invalid for being ultra vires. Strictly speaking, this will obviate the need to consider the various further issues raised by the respondent, such as whether the by-laws amount to a constitutional infringement of property rights; or is in conflict with national legislation; as well as the administrative review grounds. In short, a finding that the municipalities do not have the power to cause restraint on the registration of transfer of property, on the facts hereof, would be dispositive of the matter. Despite this, the high court determined that, in addition to the conflict with s 156 of the Constitution, the by-laws were also invalid because they conflicted with s 118 of the Systems Act and amounted to an arbitrary deprivation of property in terms of s 25(1) of the Constitution. All three bases for invalidity form part of the orders granted by the high court. [7] Accordingly, the issues on appeal are whether the impugned by-laws: a. are unconstitutional and invalid, because they legislate on matters which fall outside the scope of powers assigned to local government in terms of s 156 read with Part B of Schedule 4 and Part B of Schedule 5 of the Constitution; b. exceed the functional area of ‘municipal planning’, in that they regulate the transfer of property; and c. are an incidental power as envisaged in s 156(5) of the Constitution. The by-laws [8] Two sections of the GMBL are relevant. First, s 74, headed ‘Restriction of transfer and registration’ provides: ‘(1) Notwithstanding the provisions contained in this By-law or any conditions imposed in the approval of any land development application, the owner shall, at his or her cost and to the satisfaction of the Municipality, survey and register all servitudes required to protect the engineering services provided, constructed and installed as contemplated in Chapter 7. (2) No Erf/Erven and/or units in a land development area, may be alienated or transferred into the name of a purchaser nor shall a Certificate of Registered Title be registered in the name of the owner, prior to the Municipality certifying to the Registrar of Deeds that: (a) All engineering services have been designed and constructed to the satisfaction of the Municipality, including guarantees for services having been provided to the satisfaction of the Municipality as may be required; and (b) all engineering services and development charges have been paid or an agreement has been entered into to pay the development charges in monthly instalments; and (c) all engineering services have been or will be protected to the satisfaction of the Municipality by means of servitudes; and (d) all conditions of the approval of the land development application have been complied with or that arrangements have been made to the satisfaction of the Municipality for the compliance there of within 3 months of having certified to the Registrar in terms of this section that registration may take place; and (e) that the Municipality is in a position to consider a final building plan; and (f) that all the properties have either been transferred or shall be transferred simultaneously with the first transfer or registration of a newly created property or sectional title scheme.’ [9] Secondly, s 76, headed ‘Certification by Municipality’ provides: ‘(1) A person may not apply to the Registrar of Deeds to register the transfer of a land unit, unless the Municipality has issued a certificate in terms of this section. (2) The Municipality may not issue a certificate to transfer a land unit in terms of any law, or in terms of this By-law, unless the owner furnishes the Municipality with― (a) a certificate of a conveyancer confirming that funds due by the transferor in respect of land, have been paid; (b) proof of payment of any contravention penalty or proof of compliance with a directive contemplated in Chapter 9; (c) proof that the land use and buildings constructed on the land unit comply with the requirements of the land use scheme; (d) proof that all common property including private roads and private places originating from the subdivision, has been transferred; and (e) proof that the conditions of approval that must be complied with before the transfer of erven have been complied with. (f) Proof that all engineering services have been installed or arrangements have been made to the satisfaction on the Municipality.’ [10] Similarly, two sections of the EBL are relevant. First, s 84, headed ‘Restriction of transfer and registration’ provides: ‘(1) Notwithstanding the provisions contained in this By-law or any conditions imposed in the approval of any application, the owner must, at his or her cost and to the satisfaction of the Municipality, survey and register all servitudes required to protect the engineering services provided, constructed and installed as contemplated in Chapter 7. (2) No Erf/Erven and/or units in a land development area, may be alienated or transferred into the name of a purchaser nor must a Certificate of Registered Title be registered in the name of the owner, prior to the Municipality certifying to the Registrar of Deeds that: (a) All engineering services have been designed and constructed to the satisfaction of the Municipality, including guarantees for services having been provided to the satisfaction of the Municipality as may be required; and (b) all engineering services and development charges have been paid or an agreement has been entered into to pay the development charges in monthly instalments; and (c) all engineering services have been or will be protected to the satisfaction of the Municipality by means of servitudes; and (d) all conditions of the approval of the application have been complied with or that arrangements have been made to the satisfaction of the Municipality for the compliance there of within 3 months of having certified to the Registrar in terms of this section that registration may take place; and (e) that the Municipality is in a position to consider a final building plan; and (f) that all the properties have either been transferred or must be transferred simultaneously with the first transfer or registration of a newly created property or sectional title scheme.’ [11] Secondly, s 86, headed ‘Certification by Municipality’ provides: ‘(1) A person may not apply to the Registrar of Deeds to register the transfer of a land unit, unless the Municipality has issued a certificate in terms of this section. (2) The Municipality must not issue a certificate to transfer a land unit in terms of any law, or in terms of this By-law, unless the owner furnishes the Municipality with― (a) a certificate of a conveyancer confirming that funds due by the transferor in respect of land, have been paid; (b) proof of payment of any contravention penalty or proof of compliance with a directive contemplated in Chapter 9; (c) proof that the land use and buildings constructed on the land unit comply with the requirements of the land use scheme; (d) proof that all common property including private roads and private places originating from the subdivision, has been transferred to the owners’ association as contemplated in Schedule 5; and (e) proof that the conditions of approval that must be complied with before the transfer of erven have been complied with.’ [12] The by-laws are almost identically worded; the common factor is a restraint on the registration of transfer of property. An intending transferor of property, like the respondents, must satisfy the requirements of s 76(2) of the GMBL, or s 86(2) of the EBL in order to obtain the certificate prescribed by subsection 1 of the respective sections. Additionally, the impugned provisions impose a duty on the registrar of deeds not to accept an application to register the transfer of a land unit unless the municipality has issued a certificate in terms of that section. The effect is that unless the transferor first satisfies the requirements of the municipal by-laws, the requisite certificates may not be issued. Essentially, the impugned provisions place an embargo on the registration of transfer of immovable property until the requirements of the by-laws are met, because until such time the certificate is issued the registrar cannot register the transfer of the property. [13] The argument for the respondents was that the legislative competence of the municipalities with regard to ‘municipal planning’ does not extend to regulating the transfer of properties. The restriction imposed by the impugned provisions can only be imposed by national legislation, such as s 118 of the Systems Act and s 53 of the SPLUMA, which, according to the respondents, can be described as the interface between deeds registration, municipal financial management and municipal spatial planning. The powers of local government [14] The Constitution allocates legislative power between national and provincial governments on the basis of the subject matter of the legislation. Schedules 4 and 5 of the Constitution contain lists of subjects known as a ‘functional area’. The provincial legislatures are entitled to legislate, inter alia, on the subjects listed in Schedules 4 and 5. Both schedules are made up of two parts: Part A and Part B. Executive and administrative power of functional areas mentioned in Part B of the two schedules are reserved for municipalities. [15] Section 156(1)(a) of the Constitution provides that a municipality has executive authority in respect of, and has the right to administer the local government matters listed in Part B of Schedule 4 and Part B of Schedule 5. Section 156(2) of the Constitution authorises local authorities to exercise legislative powers by passing by-laws. Section 11(3)(m) of the Systems Act is the subsidiary legislation giving effect to this. [16] Sections 155(6)(a) and (7) of the Constitution read: ‘(6) Each provincial government must establish municipalities in its province in a manner consistent with the legislation enacted in terms of subsections (2) and (3) and, by legislative or other measures, must— (a) provide for the monitoring and support of local government in the province; . . . (7) The national government, subject to section 44, and the provincial governments have the legislative and executive authority to see to the effective performance by municipalities of their functions in respect of matters listed in Schedules 4 and 5, by regulating the exercise by municipalities of their executive authority referred to in section 156(1).’ [17] In other words, the nature of Schedule 4B and Schedule 5B matters as constitutionally protected local government matters is determined by the limits put on national and provincial legislative power by ss155(6)(a) and (7) of the Constitution. Thus, the national and provincial governments exercise a regulatory role over municipalities under s 155(7) of the Constitution. The Constitutional Court has explained that the role of these two spheres ‘is ordinarily limited to regulating the exercise of executive municipal powers and the administration of municipal affairs by municipalities’.3 Nevertheless, s 151(3) of the Constitution affords a municipality the right to ‘govern, on its own initiative, the local government affairs of its community, subject to national and provincial legislation, as provided for in the Constitution’. This authority is reiterated in s 4(1)(a) of the Systems Act, which states that ‘[t]he council of a municipality has the right to: (a) govern on its own initiative the local government affairs of the local community’. [18] Furthermore, s 156(5) of the Constitution capacitates a municipality to ‘exercise any power concerning a matter reasonably necessary for, or incidental to, the effective performance of its functions’. This means that there might be matters 3City of Johannesburg Metropolitan Municipality v Gauteng Development Tribunal and Others [2010] ZACC 11; 2010 (6) SA 182 (CC); 2010 (9) BCLR 859 (CC)para 59. that fall outside the local government’s core powers and competencies, but are nevertheless indispensable for the effective administration of those matters. [19] However, s 156(5) may not be used to increase the functional areas of local government’s powers, but rather to enhance the efficacy of administrating an existing functional area. In other words, it must be necessary for, or incidental to, an existing constitutional power. The provisions do not serve the purpose of creating new categories of functions. Thus, the impugned provisions may be authorised only if that is reasonably necessary for, or incidental to, the effective performance of a municipality’s land-use planning function. And, in terms of s 156(3) of the Constitution, in the event of a conflict between national and provincial legislation and local government legislation, the local government legislation is invalid. [20] In Executive Council of the Province of the Western Cape v Minister for Provincial Affairs and Constitutional Development and Another; Executive Council of KwaZulu-Natal v President of the Republic of South Africa and Others,4 the Constitutional Court held the following in regard to the status of the power of local municipalities: ‘Municipalities have the fiscal and budgetary powers vested in them by Chapter 13 of the Constitution, and a general power to “govern” local government affairs. This general power is “subject to national and provincial legislation”. The powers and functions of municipalities are set out in section 156 but it is clear from sections 155(7) and 151(3) that these powers are subject to supervision by national and provincial governments, and that national and provincial legislation has precedence over municipal legislation. The powers of municipalities must, however, be respected by the national and provincial governments which may not use their powers to “compromise or impede a municipality’s ability or right to exercise its powers or perform its functions” (emphasis supplied). There is also a duty on national and provincial governments “by legislative and other measures” to support and strengthen the capacity of municipalities to manage their own affairs and an obligation imposed by section 41(1)(g) of the Constitution on all spheres of government to “exercise their powers and perform their 4Executive Council of the Province of the Western Capev Minister for Provincial Affairs and Constitutional Development and Another; Executive Council of KwaZulu-Natal v President of the Republic of South Africa and Others [1999] ZACC 13; 2000 (1) SA 661 (CC); 1999 (12) BCLR 1360 (CC) para 29. functions in a manner that does not encroach on the geographical, functional or institutional integrity of government in another sphere”.’ [21] The Constitution therefore requires co-operative government between national, provincial and municipal legislation. This is encapsulated by s 40 of the Constitution which provides: ‘(1) In the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated. (2) All spheres of government must observe and adhere to the principles in this Chapter and must conduct their activities within the parameters that the Chapter provides.’ [22] This principle is effectively implemented through the framework legislation of national and provincial government. Accordingly, where framework legislation at the national and provincial level has been promulgated, particularly where there is necessary overlap between the spheres of government due to the nature of the subject-matter to which the legislation pertains, it is necessary for municipal law to be exercised within the scope of the guidelines in order to ensure cooperation, consistency and rationality. [23] The respondents contended that the impugned provisions are by-laws enacted in the context of municipal planning within the framework legislation of the SPLUMA. Indeed, the GMBL and EBL were expressly promulgated subject to the SPLUMA.5 Their purpose is to regulate spatial planning and land-use management. The SPLUMA is thus the framework legislation within which the municipal competence for municipal planning is exercised. [24] The long title of the SPLUMA reads: ‘To provide a framework for spatial planning and land-use management in the Republic; . . . to provide a framework for policies, principles, norms and standards for spatial development planning and land use management; . . . to promote greater consistency and uniformity in the application procedures and decision-making by authorities responsible for land use decisions and development applications; . . . to provide for the facilitation and enforcement of land use and development measures . . .’ 5See s 3 of the respective by-laws, read with the definition of ‘Act’ in s 1. [25] The preamble reads as follows: ‘AND WHEREAS various laws governing land use give rise to uncertainty about the status of municipal spatial planning and land use management systems and procedures and frustrates the achievement of cooperative governance and the promotion of public interest; . . . AND WHEREAS it is necessary that – . . . a uniform, recognisable and comprehensive system of spatial planning and land use management be established throughout the Republic to maintain economic unity, equal opportunity and equal access to government services . . .’ [26] Section 2 of the SPLUMA is also relevant. It reads: ‘(1) This Act applies to the entire area of the Republic and is legislation enacted in terms of— (a) section 155(7) of the Constitution insofar as it regulates municipal planning; and (b) section 44(2) of the Constitution insofar as it regulates provincial planning. (2) Except as provided for in this Act, no legislation not repealed by this Act may prescribe an alternative or parallel mechanism, measure, institution or system on spatial planning, land use, land use management and land development in a manner inconsistent with the provisions of this Act.’ [27] Section 3 of the SPLUMA sets out its objects. It provides: ‘The objects of this Act are to— (a) provide for a uniform, effective and comprehensive system of spatial planning and land use management for the Republic.’ Section 9 concerns itself with national support and monitoring. Section 9(2) provides: ‘The national government must, in accordance with this Act and the Intergovernmental Relations Framework Act, develop mechanisms to support and strengthen the capacity of provinces and municipalities to adopt and implement an effective spatial planning and land use management system.’ Section 10 deals with provincial support and monitoring. Section 10(5) provides that provincial governments ‘must develop mechanisms to support, monitor and strengthen the capacity of municipalities to adopt and implement an effective system of land use management in accordance with this Act’. (Own emphasis.) [28] Schedule 1 to the SPLUMA provides for ‘MATTERS TO BE ADDRESSED IN PROVINCIAL LEGISLATION’. It contains an extensive list of topics which cover a comprehensive ambit of municipal planning. Item 12 is concerned with the development of spatial development frameworks, and item 12(2)(a) provides: ‘The national government, a provincial government and a municipality must participate in the spatial planning and land use management processes that impact on each other to ensure that the plans and programmes are coordinated, consistent and in harmony with each other.’ Item 12(5) provides that a ‘municipal spatial development framework must assist in integrating, coordinating, aligning and expressing development policies and plans emanating from the various sectors of the spheres of government as they apply within the municipal area’. [29] Item 20 concerns the preparation of municipal spatial development frameworks. Item 20(2) states: ‘The municipal spatial development framework must be prepared as part of a municipality’s integrated development plan in accordance with the provisions of the Municipal Systems Act.’ (Own emphasis.) [30] The national legislation sets out a wide field of avenues available to the municipality to enforce the land-use scheme in respect of which it may make by-laws. Section 32, under the heading ‘Enforcement of land use scheme’, sets out, inter alia, the following powers of enforcement: ‘(1) A municipality may pass by-laws aimed at enforcing its land use scheme. (2) A municipality may apply to a court for an order— (a) interdicting any person from using land in contravention of its land use scheme; . . . (c) directing any other appropriate preventative or remedial measure. (3) A municipality— (a) may designate a municipal official or appoint any other person as an inspector to investigate any non-compliance with its land use scheme.’ [31] From the above, it is clear that the SPLUMA is the framework legislation that authorises the making of the by-laws. While it does not regulate the powers and procedures of the authorities responsible for land-use decisions and development applications in any detail, it is significant that the SPLUMA also does not give carte blanche to municipalities to make any policy decisions they choose. The SPLUMA lays down the limits within which municipalities may legislate. [32] A local municipality is empowered by the Constitution, the Systems Act and the SPLUMA to promulgate by-laws to regulate and control municipal planning, enforce municipal planning and enforce an adopted land-use scheme. However, this power is to be exercised within the parameters so prescribed. [33] As I have shown, even though the by-laws, of which the impugned provisions form part, deal on their face with municipal planning, the impugned provisions themselves restrict the transfer and registration of ownership in immovable property and constitute an embargo on transfer unless their requirements have been fulfilled. Taking into account the statutory and constitutional provisions I have mentioned, the question to be answered is whether municipalities’ legislative competence extends to regulating the transfer of properties. [34] In my view, the embargo on transfers strays beyond municipal planning. It prescribes to the registrar of deeds under what circumstances a transfer can take place. It precludes a transferring owner from complying with their obligations under an agreement of sale. It prevents a transferee from receiving ownership as they are entitled to under the agreement of sale. [35] It is, at best, a spot check at the time a property is to be transferred, and one that may be seen as opportunism on the part of a municipality at the crucial stage when the property has been sold by the owner and requires the registration of transfer of the property to the prospective new owner. The by-laws purport to prohibit the registrar from acting in accordance with powers and obligations in terms of the Deeds Registries Act 47 of 1937, whilst the municipality sits back and awaits compliance with all the requirements set out in the by-laws, including payment of certain costs due to it. As this enforcement mechanism in the by-laws is a restriction on transfer, these are not aspects of municipal planning, but matters pertaining to the transfer and registration of property that are regulated by the Deeds Registries Act. That is not a municipal legislative competence, but a national one. [36] The appellants’ contention that the impugned provisions are an enforcement mechanism to ensure compliance with the municipal planning and land-use functions is even more thread bare when it is considered that the embargo does not apply when a property is leased. Seen from that perspective, the embargo is not an effective method of preventing the unlawful use of land or buildings as contemplated in the SPLUMA, but an arbitrary one. If the SPLUMA intended to authorise municipalities to introduce an embargo on registration of transfer of properties as an enforcement mechanism, it would have provided for that expressly. Neither s 32(1) of the SPLUMA, which requires municipal by-laws that enforce the municipality’s land-use scheme, nor any of its other provisions, authorise the embargo. [37] Notably, the framework for the enforcement of by-laws is contained in ss 32(2) to 32(12) of the SPLUMA. Those enforcement provisions are to be found in Chapter 9 of the by-laws, headed ‘Compliance and Enforcement’. They provide for a range of enforcement procedures, including criminal sanctions and the issue of compliance notices. Significantly, these provisions are clearly based on s 32 of the SPLUMA. In terms of that section, various mechanisms are set out in its aim to empower a municipality to enforce its land-use scheme, including, inter alia, interdicting any person from using land in contravention of its land-use scheme; designation of a municipal official to inspect any non-compliance; and provision of the manner of inspection and investigation by such an official for the purposes of issuing a compliance notice. A notice of non-compliance informs the owner of his or her transgression. Owners have administrative law remedies in respect of such a notice. The gist of s 32 of the SPLUMA is that it is the task of municipal inspectors to determine whether there has been any non-compliance of the land-use scheme. The onus is on the inspectors to prove the transgression when it comes to a criminal trial. It is significant to mention that although it affords the municipality a wide discretion to invoke enforcement for non-compliance, the system of enforcement envisaged in s 32 of the SPLUMA does not provide for a restriction of the transfer of land. [38] The competence with regards to deeds registration (including registration of transfer of properties) is not a municipal function, for it is within the domain of national government. This is further evidenced, for example, by the fact that property transfer fees are contained in Part A of Schedule 4 of the Constitution and thus fall under a functional area of concurrent national and provincial legislative competence. [39] Further, the argument for the appellants that its by-laws are also aimed at protecting future buyers from acquiring land with some legal impediment which burdens the property is without merit. Such a power does not fall within its mandate of municipal planning. Furthermore, trite principles in our law of contract govern the contract of purchase and sale between the land owner and a buyer, and therefore their respective rights and obligations. In any event, restraint against registration of transfer is only triggered after the property had been sold and the purchaser seeks to have it transferred. The notion that it is borne out of altruism for the purchaser is not a role for the municipality. And so too the notion that it is a measure by which to create revenue for the municipality, as was suggested by the parties. Both of these purposes, if they were the real purposes of the by-laws, would have been improper purposes. It follows that a municipality may not regulate registration of transfer of properties. [40] The restriction on transfer of land is not a necessary power incidental to land- use management, as enforcement mechanisms of its land-use scheme are already provided for in Chapter 9 of the by-laws. The registration of transfer of property is expressly regulated by the Deeds Registries Act and s 118 of the Systems Act. There is thus no room for an implied municipal power to regulate the registrar’s statutory power to register the transfer of properties. The embargo therefore cannot be incidental to the effective enforcement of a land-use scheme and the impugned by- laws are invalid insofar as they impose a mechanism which impermissibly regulates the transfer of property. They exceed the legislative competence of the respective municipalities, and thus offend the principle of legality. [41] The high court found that the impugned by-laws were also in conflict with s 118 of the Systems Act, because they sought to impose on sellers of property liabilities in addition to those contemplated by that section. In reaching this conclusion, it held that the by-laws sought in effect to ‘amend’ s 118 by adding to its terms. I agree with this conclusion. It also found that the impugned sections of the by-laws amounted to an arbitrary deprivation of property. As they were not justified in terms of a law and were thus bereft of lawful authority, by definition the deprivations of property that they sought to authorise were arbitrary. It follows that I agree with the high court in this respect too. [42] The high court suspended the declaration of invalidity for six months ‘to allow the competent authority to correct the defect’. No reasons were given in the judgment for this order. In the absence of any such reasons for this deviation from the default position of setting aside unconstitutional exercises of public power, this order was not competent. I can see no reason to keep the invalid by-laws in operation, especially because of the usurpation by the two municipalities of legislative functions of other spheres of government. It follows that the suspension of the declaration of invalidity of the by-laws must be set aside. The respondents’ cross-appeal must therefore succeed. Conclusion [43] For these reasons, the appeals are dismissed with costs, including the costs of two counsel; and the cross-appeal against the suspension of the declaration of invalidity is upheld with costs, including the costs of two counsel. [44] I make the following order: In case no334/2021 (Govan Mbeki Local Municipality): The appeal is dismissed with costs, including the costs of two counsel. The cross-appeal is upheld with costs, including the costs of two counsel. Paragraph 4 of the high court’s order is set aside. In case no 338/2021 (Emalahleni Local Municipality): The appeal is dismissed with costs, including the costs of two counsel. The cross-appeal is upheld with costs, including the costs of two counsel. Paragraph 4 of the high court’s order is set aside. _________________________ G SALIE-HLOPHE ACTING JUDGE OF APPEAL . APPEARANCES For first appellant: A Vorster(with D Swart) Instructed by: Cronje De Waal-Skhosana Incorporated, Secunda Kramer Weihmann Attorneys, Bloemfontein For second appellant: O Ben-Zeev Instructed by: Ka-Mbonane Cooper, Johannesburg Van der Merwe &Sorour Attorneys, Bloemfontein For respondents: S J du Plessis SC (with K Hopkins and S O Ogunronbi) Instructed by: Norton Rose Fulbright, Sandton Webbers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 June 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Govan Mbeki Local Municipality and Another v Glencore Operations South Africa (Pty) Ltd and Others (334/2021 and 338/2021)[2022] ZASCA 93 (17 June 2022) Today, the Supreme Court of Appeal (SCA) dismissed with costs two appeals, both directed at orders of the Mpumalanga Division of the High Court, Middelburg (the high court), in which Barnardt AJ declared s 76 of the Govan Mbeki Spatial Planning and Land Use Management By-law (the GMBL) and s 86 of the Emalahleni Municipal By-law on Spatial Planning and Land Use Management 2016 (the EBL) to be invalid and unconstitutional. The SCA further upheld with costs a cross-appeal brought by the respondents against the decision of the high court suspending the declaration of invalidity of the by-laws for a period of six months to allow the competent authority to correct the defect. The costs awarded included the costs of two counsel. The respondents, Glencore Operations South Africa (Pty) Ltd, Duiker Mining (Pty) Ltd, Tavistock Collieries (Pty) Ltd, Umcebo Properties (Pty) Ltd and Izimbiwa Coal (Pty) Ltd, were companies that intended to transfer or take transfer of a number of immovable properties situated within the municipal boundaries of the appellant municipalities. The municipalities promulgated similarly crafted by-laws which placed restraints on the transfer of erven and land units within their respective areas of jurisdiction. In terms of these by-laws, an owner (transferor) could not apply to the registrar of deeds to register the transfer of an erf or land unit except upon production of a certificate, issued by the municipality, certifying that all spatial planning, land-use management, and building regulation conditions or approvals in connection with those erven or land units had been obtained and complied with the requirements of the by-law. The respondents approached the high court for orders declaring the relevant sections of the by-laws to be constitutionally invalid. The central issue in the appeal was the validity of the by-laws. The SCA found that the answer to this question required consideration of whether the by-laws were enacted within the legislative competence of municipalities as contemplated in s 156 of the Constitution. Accordingly, the issues on appeal were whether the impugned by-laws: (a) were unconstitutional and invalid, because they legislated on matters which fell outside the scope of powers assigned to local government in terms of s 156 read with Part B of Schedule 4 and Part B of Schedule 5 of the Constitution; (b) exceeded the functional area of ‘municipal planning’, in that they regulated the transfer of property; and (c) were an incidental power as envisaged in s 156(5) of the Constitution. The SCA found that the Spatial Planning and Land Use Management Act 16 of 2013 (the SPLUMA) was the framework legislation within which the municipal competence for municipal planning was exercised. The SPLUMA authorised the making of the by- laws and laid down the limits within which municipalities may legislate. Therefore, this power was to be exercised within the parameters so prescribed. The SCA found that even though the by-laws, of which the impugned provisions formed part, dealt on their face with municipal planning, the impugned provisions themselves restricted the transfer and registration of ownership in immovable property and constituted an embargo on transfer unless their requirements had been fulfilled. Thus, the question to be answered was whether municipalities’ legislative competence extended to regulating the transfer of properties. The SCA held that the embargo on transfers strayed beyond municipal planning. As this enforcement mechanism in the by-laws was a restriction on transfer, these were not aspects of municipal planning, but matters pertaining to the transfer and registration of property that were regulated by the Deeds Registries Act 47 of 1937.The competence with regards to deeds registration (including registration of transfer of properties) was not a municipal function, for it was within the domain of national government. The SCA found that it was significant that although it afforded the municipality a wide discretion to invoke enforcement for non-compliance, the system of enforcement envisaged in s 32 of the SPLUMA did not provide for a restriction of the transfer of land, and so did not authorise the embargo. The SCA held further that the restriction on transfer of land was not a necessary power incidental to land-use management, as enforcement mechanisms of its land- use scheme were already provided for in Chapter 9 of the by-laws. The registration of transfer of property was expressly regulated by the Deeds Registries Act and s 118 of the Systems Act. There was thus no room for an implied municipal power to regulate the registrar’s statutory power to register the transfer of properties. The embargo therefore could not have been incidental to the effective enforcement of a land-use scheme and the impugned by-laws were invalid insofar as they imposed a mechanism which impermissibly regulated the transfer of property. They exceeded the legislative competence of the respective municipalities, and thus offended the principle of legality. The SCA agreed with the high court’s finding that the impugned by-laws were also in conflict with s 118 of the Systems Act, because they sought to impose on sellers of property liabilities in addition to those contemplated by that section. This was because the by-laws sought in effect to ‘amend’ s 118 by adding to its terms. The SCA also agreed with the high court’s finding that the impugned sections of the by- laws amounted to an arbitrary deprivation of property. In this regard, the SCA held that as they were not justified in terms of a law and were thus bereft of lawful authority, by definition the deprivations of property that they sought to authorise were arbitrary. Lastly, the SCA found that no reasons were given in the high court’s judgment for the order to suspend the declaration of invalidity for six months. The SCA held that in the absence of any such reasons for that deviation from the default position of setting aside unconstitutional exercises of public power, that order was not competent. Thus, the suspension of the declaration of invalidity of the by-laws was set aside. ~~~~ends~~~~

3866

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 331/2021 In the matter between: M A L FRANTZEN APPELLANT and THE ROAD ACCIDENT FUND RESPONDENT Neutral citation: Frantzen v Road Accident Fund (Case no 331/2021) [2022] ZASCA 107 (15 July 2022) Coram: ZONDI, CARELSE and MABINDLA-BOQWANA JJA and MEYER and PHATSHOANE AJJA Heard: 20 May 2022 Delivered: 15 July 2022 Summary: Delict – personal injury claim – factual causation – cause and effect – whether soft tissue injury of neck and back sustained in motor vehicle accident caused involuntary muscle movement disorder – expert witness’ reliance on medical literature – application of criteria from literature employed as a tool to establish a link between involuntary muscle movement and trauma – logical and reasonable explanation by expert witness required. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Collis J, sitting as a court of first instance): The appeal is dismissed with costs. JUDGMENT Mabindla-Boqwana JA (Zondi and Carelse JJA and Meyer and Phatshoane AJJA concurring) Introduction [1] The appellant, Mr M A L Frantzen, instituted a claim against the respondent, the Road Accident Fund, for the payment of compensation for damages resulting from bodily injury caused by a motor vehicle accident in which he was involved on 8 April 2007 (the 2007 accident). It is common cause that he sustained a soft tissue injury of the neck, commonly known as whiplash injury, in the 2007 accident. It is also common cause that the appellant suffers from an involuntary movement disorder, dystonia. The core issue between the parties is whether the dystonia was caused by the peripheral trauma to the appellant’s neck, the whiplash injury. The Gauteng Division of the High Court, Pretoria (the high court) determined that question of factual causation first and separately from the other questions in the action. It found that a causal link between the 2007 accident and the movement disorder had not been established, and granted the appellant leave to appeal to this Court. Background facts [2] The appellant was 34 years old at the time of the accident and practiced as an advocate until he was rendered incapacitated by continuous episodes of dystonia. Dystonia results from an abnormality or damage in the regions of the brain that control movement. This abnormality causes muscles in the affected parts of the body to move uncontrollably or involuntarily. The onset of the appellant’s dystonia occurred approximately 10 months after the 2007 accident. [3] Prior to the 2007 accident, the appellant had been involved in two other motor vehicle accidents. These occurred in 2003 and 2004/2005 respectively. He sustained whiplash neck injuries in those accidents as well. In the 2003 accident he also suffered a mid-back injury. The pain caused by those earlier whiplash injuries, however, resolved within a few weeks of each accident and he resumed his normal daily work without any difficulty. It is the 2007 accident which, it is alleged, presented dramatic changes to the appellant’s life, which progressively led to his permanent incapacitation. [4] The 2007 accident occurred while the vehicle which the appellant drove was stationary at a traffic light and another vehicle collided into its rear. The appellant alighted from the vehicle and exchanged information with the driver of the other vehicle. After about 30 minutes he started feeling nauseous and drove himself to the Eugene Marais Hospital (Eugene Marais). He also felt some pain in his neck, as a result of which x-rays were taken. He was, however, not admitted but merely given medication. The following day he felt pain in his back (ie his shoulder blades in the mid-thoracic area) and went for physiotherapy. He also consulted his brother, an orthopaedic surgeon, who examined him. Because his back and neck pain got worse, his brother gave him two to three infiltrations. Each infiltration brought him pain relief for approximately half a day, after which the pain recurred. He returned to work after a few days but found that he was unable to work for more than two hours, as standing up activated the pain. [5] He later went on holiday but spent most of the time in bed, as he could not move due to the neck and back pain. He stopped working for a while, during which time he attended physiotherapy sessions, which did not bring him much pain relief. His neck became intensely stiff and tight, which also worsened the thoracic pain. Stress also exacerbated his pain and discomfort. He, therefore, decided to stop the physiotherapy. He, however, resumed the physiotherapy sessions when he went back to work during the last three to four months of 2007, since the pain persisted. His brother referred him for x- rays and an MRI scan, from which he noted some ‘neck disc bulges’ which were not severe enough to justify surgery. His brother also gave him standard pain medication, which did not help him much. [6] In January 2008, while he was sitting up and dictating notes, his left shoulder and left arm pulled up and he could not get them straight. His elbow became flexed. The problem lasted for about three hours. His brother gave him another infiltration in his back and prescribed further medication. Two days later, a similar incident occurred and his brother changed his medication. According to Dr Johannnes Smuts, a neurologist who gave expert evidence on behalf of the appellant, this picture was suggestive of torticollis (a spasmodic contraction of the muscles of the neck) and the appellant’s abnormal posture was very different from the muscle spasms that he had developed up to that point. [7] A major attack happened on 17 February 2008,1 while the appellant was sitting in a vehicle. He could not move, his body seemed not to be stiff or tight this time but everything felt ‘loose’, so that he could not move his arms or legs and he could not talk. He was effectively unable to control his voluntary movements and his father and wife had to carry him into the house. This episode took one and a half hours before he could voluntarily move again. Thereafter, he experienced residual stiffness for one and a half days, with a feeling of nausea and haziness. He had to be driven to work by other advocates as he was too stiff to drive. [8] Yet another episode occurred while at a coffee shop with a colleague. It was so severe that the appellant fell over the table and collapsed onto his colleague. He had to be carried to his office and was taken to Eugene Marais where he was admitted for four to five days and referred for an MRI scan. Thereafter, he was referred to Little Company of Mary Hospital to consult a 1 The date is erroneously recorded as 17 January 2008 in Dr Smuts’s first report. The 17 February 2008 date accords with the medical history as recorded by the respondent’s expert witness, Dr Miller, with which the experts agreed, and with the narration by the appellant as put to Dr Smuts in evidence. The background facts are drawn from the joint minute prepared by the experts, the expert reports as well as the testimonies they gave in court. neurologist, Dr Duim. The MRI scan and angiogram which were done showed no abnormality. He had to be sedated in order to receive physiotherapy treatment. He also consulted a neurosurgeon, Dr du Plessis, who advised him that the pins and needles which he apparently experienced at that time and some of the spasms could be related to his neck injury but that there were pains and spasms which could not be explained by that injury. A decision was then taken to have him admitted to the DBC Training Centre in Centurion, for rehabilitation. [9] During the period of his admission, the appellant became very ill. He could not open his eyes or talk but simply made groaning and moaning sounds. He remained fully conscious while all his muscles were tight with a constant pattern of movement changes when the neck and head would flex to the right and the right side of his body flexing in relation to the trunk and arm. During these attacks his speech slurred and his mouth pulled to one side. [10] A lumbar puncture was performed to exclude multiple sclerosis. He was also placed on antipsychotic medication by a psychiatrist. Rehabilitation worsened the situation as with all exercises he would develop more spasms, attacks or contortions in the paravertebral part of his body. To continue with his exercises or rehabilitation, he was given more infiltrations into his back. He decided to stop the psychiatric medication, since he believed that that medication worsened his condition. [11] The episodes would be triggered by someone touching him, bright light, loud sounds and vibrations. Similar attacks were also witnessed by the expert witnesses while examining him. All the doctors excluded epilepsy as a condition from which he suffered. Although he kept his practice open for a year, he was not actually working due to the profusion of the episodes. His colleagues took over all of his work until 2009 when his practice could no longer continue. Since then he stayed at home looking after the birds that he bred and he involved himself in art collection, which has been his hobby. He could not play with his children; that also triggered his episodes of involuntary movements. He was referred to Professor C M van der Meyden, a neurologist, who diagnosed him as suffering from dystonia. Professor van der Meyden referred him to Dr Smuts, a neurologist and movement specialist at Wilgers Hospital. The appellant developed depression and at some stages experienced suicidal ideations. Expert Evidence [12] The appellant did not testify at the trial but called Dr Smuts as an expert witness. The respondent called Dr Percy Miller, a neurosurgeon, and Dr Donald Birrell, an orthopaedic surgeon, as its expert witnesses. [13] Drs Smuts and Miller prepared a joint minute containing points of agreement and dispute. The experts agreed on many issues, including the fact that the appellant suffered from dystonia. The main difference between them related to the issue of factual causation. According to Dr Smuts, the appellant’s clinical picture (on which the experts agreed) had a direct temporal relation to the 2007 accident and the neck injury, whilst Dr Miller was of the opinion that it did not. The experts agreed that the medical history could be drawn from Dr Miller’s report which was more detailed and very precise in terms of specific time intervals.2 It is important to deal with their evidence in some detail. [14] I deal first with Dr Smuts’s evidence. Dr Smuts prepared three reports dated 16 February 2009 (first report), 18 February 2016 (second report) and 28 January 2020 (third report) respectively. In relation to dystonia, he stated the following in his first report: ‘The clinical picture of torticollis, blepharospasm and oromandibular movements can in combination only be described as cranio cervical dystonia. There are difficult issues related to the dystonia; although dystonia has been described in association with head injury all cases were in severe head injury most often when there was haemorrhage in the basal ganglia. In this instance there has been no head injury of any significance. The second dilemma is that dystonia by its very nature is a sustained muscle contraction. In the case of this patient the dystonia comes in attacks. There are a number of dystonia syndromes that are episodic in nature [and] are well-known but very rare. I could not find any reference of any of these syndromes that can be related to injury of [the] brain or neck. A second possible explanation is that he developed a movement disorder due to exposure to medication used for treatment of his cervical muscle spasms; this is known as tardive dyskinesia. In my experience tardive dyskinesia is usually also a sustained movement which can vary considerabl[y] depending on several factors. A final possibility namely a psychogenic movement disorder should always be considered. In this regard he was consulted by 2 psychiatrists and in the case of Dr Steenkamp he explicitly stated to me that his opinion is that the movement disorder is of an organic rather than a psychogenic origin. Video material of these attacks was also shown to a group of neurologists with a special interest in movement disorders and the opinion was no different from what has been stated above the opinion was divided between a very atypical dystonia or a psychogenic 2 Dr Smuts confirmed this in his evidence. condition. With no objective tests remaining the opinion of the psychiatrist and the stereotypical pattern of the attacks is therefore considered dystonic in nature.’ Dr Smuts accordingly reached the following conclusion: ‘Based on the afore mentioned information the opinion is that the movement disorder is a form of tardive dyskinesia which resulted from medication used to treat the cervical problem that resulted from the accident.’ [15] In his second report, Dr Smuts referred to statements by two neurosurgeons, Drs du Plessis and Marus, whom the appellant had consulted. Dr Marus made the following remark: ‘Trauma has been associated with movement disorders. These usually relate to significant brain injuries associated with damage of the basal ganglia. It is clear that no head injury occurred and therefore it would not be a cause for his movement disorder. . . The role of peripheral injury in the development of these form of movement disorders remains uncertain. . . Injury of all sorts may result in development of abnormal movements that are secondary to psychological factors. In many situations it is extremely difficult to separate these abnormal movements from unusual or organic dyskinesias.’ [16] In relation to dystonia, Dr Smuts concluded that: ‘Post-traumatic dystonia as a diagnostic entity remains a subject of debate. In patients with cervical dystonia there is often significant illness or injury prior to the onset of their cervical dystonia. This patient however presents with attacks or episodes of dystonia rather than a persistent movement. This type of presentation is seen in a condition known as paroxysmal kinesigenic dystonia. While dystonia occurring after trauma is well documented, paroxysmal exercise-induced dystonia occurring after trauma has only been described in one documented case I could find described. This is therefore a very rare presentation, but not impossible. An alternative possibility would be that this is a psychogenic disorder. Functional or psychogenic movement disorders are common and disabling, and often difficult to diagnose. Given the long duration and persistent nature of the disorder in this patient it is my opinion that this is a post-traumatic dystonic disease that rendered the patient severely impaired. Paying so much attention to the semantics regarding the type and precise cause of this condition serves little purpose and it is far more important to consider this a permanent condition. Since this is time related to the accident and trauma, this must be considered the precipitating cause of his disability.’ [17] In his third report, Dr Smuts simply described what paroxysmal movement disorders are and mentioned that they were rare. He further made an observation that ‘[d]ue to the rarity of these disorders, it is senseless to try and dig up literature references about the possible link of trauma to this particular case’. He concluded as follows: ‘My opinion is that this happened in direct temporal relation to the accident, it persisted over many years, basically unaltered and this has had disastrous effects on this man and his career. Proof of a link or not to the accident, is in my opinion more than the stated facts, it will remain pure speculation.’ [18] In evidence, Dr Smuts testified that his initial impression was that the appellant most likely suffered from tardive dyskinesia,3 which was the only condition, in his clinical experience, that presented like the appellant’s. What changed from the three possible diagnoses, as detailed in his three reports, which I have quoted above, was additional reading that he had done and new 3 ‘Tardive dyskinesia is a neurological disorder characterized by involuntary uncontrollable movements especially of the mouth, tongue, trunk, and limbs and occurring especially as a side effect of prolonged use of antipsychotic drugs (such as phenothiazine).’ See Merriam-Webster online, available at https://www.merriam-webster.com/dictionary/tardive%20dyskinesia, accessed on 14 July 2022. It is described in the joint minute of the experts as a condition caused by exposure to a multitude of medications. additional documentation that became available in the literature. This new information classified the criteria for the post-traumatic dystonia. This, he testified, was not available in 2009 (which is when he prepared his first report), but became available only in 2011 and the later publication in 2014, by an author known as Dr Joseph Jankovic, a very prominent person within the movement disorder societies in the world. [19] The criteria used for diagnosis, as per the literature by Dr Jankovic (the Jankovic criteria) consisted of three requirements. Firstly, there must be trauma that is significant enough to warrant treatment within the period of at least two weeks; secondly, the dystonia must develop within one year from the period of trauma; and thirdly, the injury must be anatomically related to where the dystonia presents itself. Dr Smuts testified that he felt confident that the condition of the appellant conformed to this ‘current’ definition of post- traumatic dystonia and therefore decided that it was the most likely possibility for the cause of the appellant’s medical condition. [20] Dr Smuts further testified that he still could not exclude the possibility that ‘the type that the appellant presented with was a type of dyskinesia’. The appellant, however, had not been exposed to any medication for many years. In the majority of cases when a patient stopped taking medication, while the dystonia did not go away, it would get better. As to the psychiatric aspect, the majority of the psychiatrists that the appellant consulted with came to the conclusion that the condition was not a primarily psychiatric disorder and he accepted that. He had not completely ruled out the genetic link because when he first saw the appellant, very few of the genetic tests were available at the time. Only the DYT test was available and it came back as negative. Over the years, however, more tests became available and locally there was a laboratory from which a batch of genetic tests could be ordered. However, those were quite expensive and very often unrevealing. Another alternative would be to export blood samples to the United States of America, to get a more complete test. That still left another potential question which had been raised in the literature, that in many diseases one might carry a genetic defect that may develop a disease. However, for that to happen, there needed to be a trigger event. In this regard, a patient may present with a certain form of illness and upon testing, the rest of the family may be unaffected. The converse may also be true. Upon extensive questioning, no history of dystonia was found in the appellant’s family. [21] Turning to Dr Miller’s evidence, in his report he excluded any direct psychiatric aspect to the appellant’s dystonia. He also did not think that the appellant suffered from epilepsy. He observed that just about everyone (in the medical literature) agreed that dystonia would develop after a severe head injury which involved lesions to the thalamus or the basal ganglia. Even non- traumatic dystonia was related to some abnormality in the basal ganglia area of the brain. Dystonia very rarely may develop from neck pathology. While the appellant may have had neck and even thoracic pain for two to three days after the accident, any long-standing pain was most likely as a result of dystonia, not whiplash. It was unlikely that a soft tissue injury would still be present after so many years taking into consideration the following: that the appellant was, after the accident, not injured enough to go to the hospital; he alighted the vehicle and exchanged information with the other driver; and the dystonia first occurred 10 or 11 months later; whereas, with regard to the 2005 accident, the injury lasted only two weeks and then disappeared. [22] The most compelling reason why there was no connection between the dystonia and the 2007 accident, according to Dr Miller, was simply that the appellant never had the clinical sign or picture of a significant head injury of any type at all. The MRI and angiogram were both normal. According to these, there was no evidence of any focal or chronic injury to the brain which could have produced or precipitated the problem. To develop dystonia on a post- traumatic basis, one would have had to have, at the very least, a moderate or most likely a severe to very severe head injury. The severe impairment of the appellant’s life was an organic brain problem and not related to the neck at all, in Dr Miller’s view. [23] There were, however, cases recorded in the medical literature where cervical and shoulder injuries had been reported to produce dystonia either acutely, or in some cases on a chronic basis, after six to twelve months. The situation was controversial, because while all of the literature agreed that head injuries produced dystonia, 50 per cent of the literature did not mention neck or shoulder injuries producing dystonia at all. The other 50 per cent mentioned acute or chronic dystonia, following a single or a repetitive neck injury. It seemed that dystonia after a cervical or shoulder injury was exceedingly rare. On the other hand, if regard were to be had to the incidences of pre-existing trauma in patients with dystonia, approximately 5 to 20 per cent of cases would have had some form of trauma in the background, excluding those with obvious head injuries. [24] Dr Miller further opined that given the common occurrence of minor to moderate neck trauma in the general population, it may be that the trauma in cases of people who develop dystonia was merely incidental and not a causal finding. This was why 50 per cent of the literature did not even mention neck trauma as a pre-existing factor in some cases of dystonia; almost all of the literature mentioned head injuries and cranial trauma as a precursor of dystonia in some cases. Even in non-traumatic cases of dystonia, the disorder is classically one of brain dysfunction. Thus, after the exclusion of genetic dystonia, the most common causes of dystonia are tardive or idiopathic and non-genetic. If there were to be any association between cervical trauma or a whiplash and dystonia, it was a very rare phenomenon, and for that reason alone, the odds were that the appellant had developed secondary or idiopathic dystonia. [25] According to Dr Miller, the neck injury of 2007 or the previous two neck injuries in 2003 and 2004/2005 were purely incidental phenomena, particularly since thousands and millions of whiplash injuries produced no overt or untoward effects of this type at all. In addition, almost all cases of dystonia began in middle age (which, according to him, was in the mid- thirties), which the appellant was approaching (at dystonia onset). Also, the appellant was given no psychiatric or antipsychotic medication until 2008 when his clinical situation was well advanced. [26] Furthermore, post-whiplash dystonias were usually not supposed to be worse after exercise, while the appellant’s dystonia was precipitated by exercise. Most importantly, post-whiplash, a post-traumatic cervical dystonia, involved only the neck, whereas the appellant’s clinical picture was not only related to the neck, but was facial, ophthalmic, laryngeal, truncal, brachial, or hemi- dystonia, thus making it exceedingly unlikely that this dystonia was related to the whiplash injury. The appellant’s case was a more generalised type of dystonia, in Dr Miller’s view. [27] Dr Miller testified that he had experience with neck injuries and was to a certain extent acquainted with dystonia because from 2007 to 2014 he performed treatment called deep brain stimulation, which is one of the treatments for certain types of dystonia. In over 40 years’ experience he had seen hundreds of thousands of cases with neck injuries and none had claimed that their neck injuries (whiplash) presented a dystonic picture. Furthermore, 15 to 40 per cent of those who had whiplash injuries experienced the problem for two to three weeks, which would make it easy for them to fit in with the first requirement of the abovementioned Jankovic criteria. Much of what is in the criteria commonly happened in whiplash cases. [28] The appellant did not only have focal or cervical dystonia, he actually collapsed during the episodes. This was because he had dystonia that involved the trunk where it would flex very badly. He also had a laryngeal dystonia. So, it was not only the neck, the face and eyes that were involved. Dr Miller had also observed the appellant during his examination presenting with these movements. The appellant could not breathe properly, he could not sit upright and had to be lifted from the floor after he fell. [29] Finally, Dr Miller testified that the appellant did not tell him about the 2003 accident. The appellant only informed him about the 2005 and 2007 accidents. The possibility of the dystonia being caused by the cumulative effect of injuries resulting from the three different accidents would not be a strange phenomenon, according to Dr Miller. Dr Birrell’s evidence did not take the matter any further. And so, nothing further needs to be said in this regard. [30] Having analysed the evidence, the high court found: ‘In applying the [Jankovic] criteria and the whiplash injury sustained by the plaintiff; post- accident the plaintiff would have presented with only post-whiplash dystonia, whereas in the case of the plaintiff he however suffers from a more generalized type of dystonia. Thus, on the criteria formulated by Dr Jankovic, it does not appear as if the onset of movement disorder is related to the site of the injury, i.e. his neck.’ Factual causation [31] In answering the question of factual causation it must be shown that ‘but for’ the 2007 accident the appellant would not have suffered from dystonia.4 The enquiry is whether it was more probable than not that the involuntary movements suffered by the appellant were caused by the accident.5 This question need not be answered with absolute certainty but must be established on a balance of probabilities. 4 Life Healthcare Group (Pty) Ltd v Dr Suliman [2018] ZASCA 118; 2019 (2) SA 185 (SCA) para 12. 5 Ibid para 16. Approach to expert evidence [32] The correct approach in evaluating expert evidence was laid down in Michael and Another v Linksfield Park Clinic (Pty) Ltd and Another (Linksfield),6 where this Court held: ‘. . . [W]hat is required in the evaluation of such evidence is to determine whether and to what extent their opinions advanced are founded on logical reasoning. That is the thrust of the decision in the medical negligence case of Bolitho v City and Hackney Health Authority [1998] AC 232 (H.L.E)). With the relevant dicta in the speech of Lord Browne-Wilkinson we respectfully agree. Summarised, they are to the following effect. The court is not bound to absolve a defendant from liability for allegedly negligent medical treatment or diagnosis just because evidence of expert opinion, albeit genuinely held, is that the treatment or diagnosis in issue accorded with sound medical practice. The court must be satisfied that such opinion has a logical basis, in other words that the expert has considered comparative risks and benefits and has reached “a defensible conclusion” (at 241G-242B).’ [33] The fact that a body of professional opinion is almost universally held would not make the opinion reasonable, if it disregarded an obvious risk that could have been prevented. In this regard, this Court further stated in Linksfield:7 ‘A defendant can properly be held liable, despite the support of a body of professional opinion sanctioning the conduct in issue, if that body of opinion is not capable of withstanding logical analysis and is therefore not reasonable. However, it will seldom be right to conclude that views genuinely held by a competent expert are unreasonable. The assessment of medical risks and benefits is a matter of clinical judgment which the court would not normally be able to make without expert evidence and it would be wrong to decide a case by simple preference where there are conflicting views on either side, both 6 Michael and Another v Linksfield Park Clinic (Pty) Ltd and Another [2001] ZASCA 12; [2002] 1 All SA 384 (A) paras 36-37. 7 Ibid para 39. capable of logical support. Only where expert opinion cannot be logically supported at all will it fail to provide “the benchmark by reference to which the defendant’s conduct falls to be assessed” (at 243A-E).’ (My emphasis.) [34] Further, there is a difference between scientific and judicial measures of proof. This difference was highlighted in the Scottish case of Dingley v The Chief Constable, Strathclyde Police,8 as follows:9 ‘One cannot entirely discount the risk that, by immersing himself in every detail and by looking deeply into the minds of the experts, a judge may be seduced into a position where he applies to the expert evidence the standards which the expert himself will apply to the question whether a particular thesis has been proved or disproved - instead of assessing, as a judge must do, where the balance of probabilities lies on a review of the whole of the evidence.’ (My emphasis.) [35] Expert evidence must be weighed as a whole and it is the exclusive duty of the court to make the final decision on the evaluation of expert opinion. Isolated statements made by experts should not too readily be accepted, ‘especially when dealing with a field where medical certainty is virtually impossible’.10 With these principles in mind, I now turn to the evaluation of the evidence. Assessment of the evidence [36] In advancing his opinion on the accident being the cause of the appellant’s dystonia, Dr Smuts relied on an article titled, Movement disorders 8 Dingley v The Chief Constable, Strathclyde Police [2000] UKHL 14; 2000 SC (HL) 77 at 89D-E. 9 See also Maqubela v S [2017] ZASCA 137; 2017 (2) SACR 690 (SCA) para 5, where this Court held that ‘[t]he scientific measure of proof is the ascertainment of scientific certainty, whereas the judicial measure of proof is the assessment of probability’. 10 Life Healthcare Group fn 4 para 15. induced by peripheral trauma11 authored by José Cláudio Nobrega and others (Nobrega), who adopted the criteria devised by Dr Jankovic. This was sourced from Dr Jankovic’s earlier article, Post-traumatic movement disorders: central and peripheral mechanisms12 (Jankovic 1), which advanced a case that peripheral trauma may cause dystonia and proposed a criteria of classifying cases in establishing the cause and effect relationship between the two. [37] Before I deal with Dr Smuts’s evidence in relation to this article, I need to say a word about what the law says in relation to an expert’s reliance on literature. It is perfectly acceptable for an expert to rely on medical literature, including a published article. The expert must, however, by reason of their own training, affirm the correctness of the statements made in the article, at least in principle, and such work relied upon must be written by a person of established repute or proved experience in that field.13 [38] It is apparent from the reading of the high court’s judgment that it considered Jankovic 1. This article and another, Can peripheral trauma induce dystonia and other movement disorders? Yes!14 (Jankovic 2), also authored by Dr Jankovic, were attached as annexures to the notice of appeal. Both articles are cited in Nobrega. From the reading of the record, the two Dr Jankovic articles were not canvassed in evidence. This is important, because 11 J C Nobrega, C R Campos, J C Limongi, M J Teixeira, and T Y Lin ‘Movement disorders induced by peripheral trauma’ (2002) Arq Neuropsiquiatr 60(1):17-20 (Nobrega). 12 J Jankovic ‘Post-traumatic movement disorders: central and peripheral mechanisms’ (1994) Neurology 44 (11): 2006-2014 (Jankovic 1). 13 Menday v Protea Assurance Co Ltd [1976] 1 All SA 535 (E); 1976 (1) SA 565 (E) at 569G, endorsed by the Constitutional Court in Van der Walt v S [2020] ZACC 19; 2020 (2) SACR 371 (CC); 2020 (11) BCLR 1337 (CC) para 31. 14 J Jankovic ‘Can peripheral trauma induce dystonia and other movement disorders? Yes!’ (2001) Mov Disord 16(1): 7-12 (Jankovic 2). they are the source of the hypothesis postulated by Nobrega upon which Dr Smuts relied, and they express the criteria in terms more nuanced than Nobrega. [39] We were informed that the judge in the high court was furnished with a copy of Jankovic 1 after the completion of the evidence, but before delivery of the judgment. Dr Smuts testified that Dr Jankovic is well known in the movement disorder professional community. This is evident from the three articles placed before us. [40] Dr Jankovic’s expertise in the field as well as the weight to be attached to the article(s) before the high court were not seriously challenged by the respondent. Apart from the issues being tamely put to the expert witnesses in evidence, the issue does not seem to have been contentious in the high court. Furthermore, while Dr Miller questioned the Jankovic criteria, he did not seem to dispute his reputation, as Dr Jankovic was not known to him. I have no difficulty in accepting that Dr Jankovic is a well-known scientist in regard to movement disorders, the bigger issue is around the controversy of his hypothesis, which he acknowledged was not universally embraced. In Jankovic 2, he observes: ‘A cause-and-effect relationship between brain injury and subsequent movement disorder is well established, but the existence of such a relationship following peripheral injury has not yet been universally accepted. Because movement disorders usually occur without any history of prior trauma, and as trauma is usually not associated with movement disorders, some skeptics argue that the relationship between trauma and the subsequent movement disorder is purely coincidental.’15 15 Ibid at 7. [41] As appears from Nobrega, Jankovic 2’s postulation was apparently disputed. In this regard, it cites an article, Can peripheral trauma induce dystonia? No!, authored by W J Weiner.16 What is contained in this article, or other views critiquing the Jankovic criteria, were regrettably not placed in evidence as a way of balancing the opinions and in helping to assess the logical basis and reasonableness of the hypotheses. [42] Furthermore, while Nobrega endorses the notion that peripheral trauma may induce movement disorders, they conclude that ‘additional experimental studies [were] needed to further clarify the mechanisms possibly involved in abnormal movement production and the ways in which a peripheral lesion could affect basal ganglia activity’. It is not clear whether any further experimental studies were done, or whether Dr Jankovic’s views and criteria had become universally accepted, since the last of the articles presented to us was published in 2002. It has been held, however, that the lack of general acceptance of a scientific theory may not be the basis to reject it, without more.17 [43] Dr Smuts’s testimony that the information was not available in 2009 (when he compiled his fist report) is puzzling. His testimony was that this information was only published in 2011 and later in 2014. He repeated this a few times in his evidence. This is undoubtedly incorrect, as the earliest article was published in 1994 and the one he relied on in 2002. 16 W J Weiner ‘Can peripheral trauma induce dystonia? No!’ (2001) Mov Disord 16(1): 13-22, cited in footnote 18 of Nobrega. 17 Oppelt v Head: Health, Department of Health Provincial Administration: Western Cape [2015] ZACC 33; 2016 (1) SA 325 (CC); 2015 (12) BCLR 1471 (CC) para 40. [44] It is also perplexing that Dr Smuts, being a specialist in movement disorders, would only discover in 2020 the phenomenon described by Dr Jankovic, shortly before the trial, when, from the reading of the articles, the concept had been the subject of debate for many years before. I say so, because in his last report, dated 28 January 2020, Dr Smuts concluded that proof of a link or not to the accident would remain a pure speculation. In his evidence he disavowed some of his previous findings and conceded that he had changed his mind many times over the years. He even made a concession that he was wrong and did not understand paroxysmal non-kinesigenic dyskinesia, which is a condition he had concluded, in one of his reports, that the appellant suffered from. This may lend credence to the assertion made by Dr Miller in the joint minute that Dr Smuts, like he (Dr Miller), did not have clinical experience of the causal relationship between peripheral trauma and a motor vehicle accident; an occurrence which both experts agree was very rare. That is not to say that he was not an expert in movement disorders in general. [45] Nonetheless, what is to be tested is the logical basis and reasonableness of Dr Smuts’s latest opinion, in which he embraced the Jankovic criteria. In this context, Dr Smuts’s evidence must be viewed as a whole. This, together with Dr Miller’s counter-opinion. Dr Miller conceded that he was not an expert in movement disorders, although he had experience in neck injuries and performed deep brain stimulation in some dystonia patients. He also conducted research on the current subject. The relevant expertise of both experts in relation to their evidence is kept in mind. [46] Dr Jankovic’s view that trauma to the central nervous system can cause tremors and dystonia is well established.18 He further suggests that movement disorders can also be produced by peripheral trauma. In his view ‘[a]lthough initially challenged, the concept of peripherally induced movement disorders is becoming more accepted’. He also argues that this hypothesis is growing in support. [47] As already indicated, Dr Jankovic admits that the cause-and-effect relationship in cases of movement disorders following peripheral trauma is less apparent, but that some clinicians have raised the possibility that injury to the peripheral nervous system can also produce the movement disorders.19 To minimise the possibility of coincidence, he and others proposed the following criteria for diagnosis, stated in Jankovic 1:20 ‘(1) Injury must have been severe enough to cause local symptoms persisting for at least 2 weeks or requiring medical evaluation within 2 weeks after the peripheral injury, (2) the onset of movement disorder must have occurred within a few days or months (up to 1 year) after the injury, and (3) the onset of movement disorder must have been anatomically related to the site of injury.’ (My emphasis.) [48] In Jankovic 2, the third criterion is expressed in the following terms: ‘the initial manifestation of the movement disorder is anatomically related to the site of injury’. The articulation of this third criterion is couched in slightly different terms by Nobrega, which is the article the experts, and in particular Dr Smuts, relied on in their evidence. It articulates this requirement as follows: 18 Jankovic 1 fn 12. 19 Ibid. 20 Ibid. ‘3. The abnormal movements should be anatomically related to the site of the injury. Moreover, the causal relationship should be supported by the absence of other causes capable of producing the same symptoms, presence of reflex sympathetic dystrophy and poor response to conventional treatment.’ (My emphasis.) [49] From this passage, it will be observed that the expressions ‘onset’ or ‘initially’ are absent from the description of the criterion. This is significant, because, according to Jankovic 2: ‘In many cases, the movement disorder starts locally in the injured region but may later spread to involve adjacent and ipsilateral body parts, eventually crossing over to the contralateral side. When a movement disorder occurs within a few days after injury, the cause-and-effect relationship is relatively easy to appreciate, but such an association becomes less obvious as the latency between injury and onset of the movement disorder increases. Although most studies insist on a relatively short (˂ 1 year) delay between trauma and the initial appearance of dystonia, some investigators accept the diagnosis of post-traumatic, peripherally induced dystonia after a latency as long as several years.’21 (My emphasis.) Significantly, Dr Smuts made no mention of this distinction, and in particular the stage of the dystonia, in which the criterion relates. This is because he relied on an article that used different wording to that which is contained in the Jankovic articles. [50] Dr Jankovic accepts that there are limitations to the criteria he proposes, in that not all patients who satisfy the criteria can be confirmed with absolute certainty to have a peripherally induced movement disorder, alternatively it is 21 Jankovic 2 at 8. possible that some patients whose movement disorders are causally related to peripheral injury do not fulfil all of these criteria.22 [51] Nobrega argues that there are reasons to suggest that a direct mechanical effect upon the peripheral nervous system may not itself cause abnormal movements. Instead, a traumatic injury may exhibit an indirect effect precipitating or aggravating a pre-existing subclinical dysfunction. This article suggests that the low incidence of peripherally induced movement disorders compared to the large incidence of traumatic events in the general population suggests that some predisposing factor may be present before the trauma. Commonly associated factors are: family history of essential tremor and/or dystonia; premature birth; perinatal hypoxia; delayed psychomotor development; and use of neuroleptic drugs. [52] In the end, Nobrega suggests that although in some instances the association between trauma and movement disorders might be coincidental, the close temporal and anatomical relationships frequently observed by them and others suggest a cause-and-effect phenomenon. Suggesting further that the phenomenon that peripheral trauma can alter sensory input and induce central cortical and sub-cortical reorganisation to generate abnormal movements has gained scientific support. Evidence relating to the application of the Jankovic criteria [53] The application of the first two ground rules of the criteria to the appellant’s dystonic picture present no difficulties. As to the first requirement, 22 Jankovic 2 at 7. his trauma appears to have caused pain in the neck and back and required medical evaluation within two weeks after the accident. He, therefore, fulfils that criterion. As Dr Miller testified, however, most people who sustain whiplash after a motor vehicle accident would easily fit into this rule. [54] As regards the second criterion, both experts agree that the onset of the dystonia was approximately 10 months after the 2007 accident. Again, there is no argument about the fulfilment of this rule, as Dr Jankovic gives the delayed onset a period of up to a year. [55] Complications arise with the application of the third criterion. It will be recalled that Dr Jankovic suggests that the onset or the initial manifestation of the movement disorder must have been anatomically related to the site of the injury. In terms of the expert reports, on 17 February 2008, the appellant experienced a major attack while sitting in a motor vehicle. He could not move, everything felt ‘loose’, so that he could not move his arms and legs and he could not talk. He had to be carried by his father and wife into the house. This lasted for one and a half hours. He later experienced residual stiffness and felt nauseous. This lasted for a couple of days. He was too stiff to drive and had to be driven to work by colleagues. [56] The next episode happened at a coffee shop when he fell over the table and collapsed over his colleague. He had to be carried to the office and was also taken to hospital. At the hospital he had episodes of stiffness, pain in the neck, and he would be bunched up and tight in all of the muscles, the neck, head, arm and trunk would flex and his speech would be slurred. [57] It appears from Dr Miller’s report that the appellant was told by Dr du Plessis, a neurosurgeon he consulted before he was referred to Dr Smuts, that the pins and needles in his arms and some spasms may be related to the neck, but ‘there were problems with the pain and the spasms which could not be explained by the neck’, and the decision at that stage was to refer him for rehabilitation. [58] Unfortunately, Dr Smuts did not separate the timelines relating to the onset of the dystonia and the progression of the condition after the initial manifestation, when applying the Jankovic criteria, as he ought to have done. This is more so, because the appellant’s condition became more severe and spread out as the years progressed, as Dr Jankovic says often happens.23 [59] Applying the third requirement indiscriminately, Dr Smuts simply stated in his examination-in-chief that ‘[y]ou cannot bump your toe and develop a measure of blepharospasm and say that that is related to one another because your eyes and your toes are not linked in such a manner. But, if you develop the dystonia in a region where the trauma took place that is important’. [60] Unfortunately, Dr Smuts was not asked to explain why the appellant’s entire body, including the legs and the trunk, was affected, and how those body parts were anatomically related to the region of the injury that was caused by the accident, ie the neck and back. In cross-examination he was 23 Jankovic 2 at 8. asked about the appellant’s dystonic condition at onset, which indicated that he could not move and that he froze. Dr Smuts simply responded: ‘That is what [the appellant] stated there, yes. However, . . . there is something that is maybe very important to state here that in the initial phases when the patient presented with these things (a) he was very frightened, (b) nobody really understood what was going on.’ [61] I am of the view, however, that this answer does not adequately account for these symptoms. This is because the next episode at the coffee shop presented itself in a similar manner when the attack occurred. Counsel for the respondent read from the medical history narrated by the appellant, which added that the appellant was dizzy, had the facial muscles pulled downwards, was nauseous, had a speech slur, and became completely limp. Dr Smuts’s reply was that that was not how whiplash injuries normally presented; that those symptoms looked like a movement disorder; and also what would not normally be seen in classical idiopathic dystonia. [62] Counsel for the respondent took Dr Smuts through the narration of the medical history by the appellant over a couple of months since the first episode in February 2008. In all of those the appellant had stated that he had muscle spasms and twisting over the entire body which led to complete limpness and included heavy breathing and slurring speech. [63] Dr Smuts did not directly answer the question about the different types of abnormal muscle movements that the appellant experienced (which occurred in 2008), which were pointed out to him by the respondent’s counsel. He simply referred to different impressions he had and clinical findings he had made over a period of time. He did not explain how abnormal movements in different body parts were related to the neck injury encountered in the accident. [64] In cross-examination, Dr Smuts appeared to suggest that the appellant’s dystonia was generalised and atypical, which was his first concern. He testified that a classical presentation of idiopathic dystonia was focal in form. Jankovic 2, however, states that the post-traumatic cervical dystonia, which usually occurs between three to 12 months, is similar to the phenotype of non- traumatic, idiopathic, cervical dystonia. Dr Smuts’s second concern was that the appellant was a completely healthy person who had an accident and after medical intervention ended up the way he did. To him, that was more than a coincidence. [65] Dr Smuts appears to have simply moved from the position that because there was a neck injury sustained as a result of the 2007 accident by a person (the appellant) who was previously healthy, it was highly probable that that caused the dystonia. He, however, did not explain how the generalised abnormal movements were anatomically connected to the neck injury sustained in the accident. This is an omission and was important, because, as the Jankovic articles explain, the cause and effect in movement disorders, where the onset is delayed, becomes less obvious than when the movement disorder occurs a few hours or days after the injury. That is the reason why the criteria were developed. It was to minimise the possibility that the peripheral injury and subsequent movement disorder were linked by coincidence. This is especially so, because the whiplash- induced dystonia is rare. I accept that, rarity is not the basis to reject Dr Smuts’s opinion. However, compliance with the Jankovic safeguards is the issue. It has been accepted that even in circumstances like these, a spontaneous onset, excluding the genetics and other probable causes, is not a strange phenomenon as qualifiedly conceded by Dr Smuts in cross-examination. [66] In all these circumstances, as tragic as the appellant’s condition is, I am impelled to find that the Linksfield24 test was not met. Consequently, it has not been shown, on a balance of probabilities, that the soft tissue injury of the neck and back that the appellant sustained in the 2007 accident was causally connected to the involuntary movement disorder that manifested 10 months later. With other probable causes, ie use of medication, genetics and psychogenic origin being excluded, it is more probable than not that the dystonia was idiopathic and the whiplash sustained in the accident was simply a coincidence. The judgment of the high court therefore should stand. [67] What remains to be determined is the issue of costs. There is, in my view, no reason to depart from the general rule that costs should follow the event and that the successful party is awarded costs as between party and party. However, even though the respondent employed the services of two counsel, it is not entitled to such a costs order, in my view. This Court lamentably derived little benefit from the engagement of two counsel in this matter. [68] In the circumstances, the following order is made: The appeal is dismissed with costs. 24 See fn 6. __________________________ N P MABINDLA-BOQWANA JUDGE OF APPEAL Appearances For appellant: J S M Güldenpfennig SC (with M Upton) Instructed by: DVDM Attorneys, Pretoria Honey Attorneys, Bloemfontein For respondent: S J Myburgh (with J C van Eeden) Heads of argument by A B Rossouw SC (with S J Myburgh) Instructed by: Mohulatsi Attorneys Incorporated, Pretoria Bezuidenhouts Incorporated, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 15 July 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Frantzen v Road Accident Fund (331/2021) [2022] ZASCA 107 (15 July 2022) The Supreme Court of Appeal (SCA) today dismissed an appeal with costs against the decision of the Gauteng Division of the High Court, Pretoria (the high court), wherein the appellant, Mr M A L Frantzen, instituted a claim against the respondent, the Road Accident Fund, for the payment of compensation for damages resulting from bodily injury caused by a motor vehicle accident in which he was involved on 8 April 2007 (the 2007 accident). It was common cause that the appellant sustained a soft tissue injury of the neck, commonly known as whiplash injury, in the 2007 accident. It was also common cause that the appellant suffered from an involuntary movement disorder, dystonia. The appellant was 34 years old at the time of the accident and practiced as an advocate until he was rendered incapacitated by continuous episodes of dystonia. Dystonia results from an abnormality or damage in the regions of the brain that control movement. This abnormality causes muscles in the affected parts of the body to move uncontrollably or involuntarily. The onset of the appellant’s dystonia occurred approximately 10 months after the 2007 accident. The core issue between the parties was whether the dystonia was caused by the peripheral trauma to the appellant’s neck, the whiplash injury. The SCA found that in answering the question of factual causation it had to be shown that ‘but for’ the 2007 accident, the appellant would not have suffered from dystonia. The enquiry was whether it was more probable than not that the involuntary movements suffered by the appellant were caused by the accident. This question did not have to be answered with absolute certainty, but had to be established on a balance of probabilities. In determining the question of factual causation, the SCA considered the evidence of expert witnesses. Dr Johannnes Smuts, a neurologist, gave expert evidence on behalf of the appellant. The respondent called Dr Percy Miller, a neurosurgeon, and Dr Donald Birrell, an orthopaedic surgeon, as its expert witnesses. According to Dr Smuts, the appellant’s clinical picture (on which the experts agreed) had a direct temporal relation to the 2007 accident and the neck injury, whilst Dr Miller was of the opinion that it did not. In advancing his opinion on the accident being the cause of the appellant’s dystonia, Dr Smuts relied on an article titled, Movement disorders induced by peripheral trauma authored by José Cláudio Nobrega and others (Nobrega), who adopted the criteria devised by Dr Joseph Jankovic (a well-known author within the movement disorder community). This was sourced from Dr Jankovic’s earlier article, Post-traumatic movement disorders: central and peripheral mechanisms (Jankovic 1), which advanced a case that peripheral trauma may cause dystonia and proposed a criteria of classifying cases in establishing the cause and effect relationship between the two. The criteria used for diagnosis, as per the literature by Dr Jankovic (the Jankovic criteria) consisted of three requirements. Firstly, there must be trauma that is significant enough to warrant treatment within the period of at least two weeks; secondly, the dystonia must develop within one year from the period of trauma; and thirdly, the onset or the initial manifestation of the movement disorder must have been anatomically related to the site of the injury. Dr Smuts who had previously given three different opinions over the years, regarding the appellant’s condition, was confident that the condition of the appellant conformed to this ‘current’ definition of post-traumatic dystonia and therefore decided that it was the most likely possibility for the cause of the appellant’s medical condition. The SCA found that what was to be tested was the logical basis and reasonableness of Dr Smuts’s latest opinion, in which he embraced the Jankovic criteria. In this context, Dr Smuts’s evidence had to be viewed as a whole. This, together with Dr Miller’s counter-opinion. The relevant expertise of both experts in relation to their evidence was also considered. The SCA found that the application of the first two ground rules of the Jankovic criteria to the appellant’s dystonic picture presented no difficulties. The SCA found further that complications arose with the application of the third criterion, wherein Dr Jankovic suggested that the onset or the initial manifestation of the movement disorder must have been anatomically related to the site of the injury. The SCA was of the view that Dr Smuts’s evidence did not adequately account for why the appellant’s entire body, including the legs and the trunk, was affected, and how those body parts were anatomically related to the region of the injury that was caused by the accident, ie the neck and back. Dr Smuts did not explain how abnormal movements in different body parts were related to the neck injury encountered in the accident. The SCA, accordingly, held that it had not been shown, on a balance of probabilities, that the soft tissue injury of the neck and back that the appellant sustained in the 2007 accident was causally connected to the involuntary movement disorder that manifested 10 months later. With other probable causes, ie use of medication, genetics and psychogenic origin being excluded, it was more probable than not that the dystonia was idiopathic and the whiplash sustained in the accident was simply a coincidence. The SCA, therefore, held that the judgment of the high court should stand. ~~~~ends~~~~

3769

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 326/2020 In the matter between: DEPARTMENT OF LABOUR: THE COMPENSATION COMMISSIONER APPELLANT and ROEBEL STEPHANUS BOTHA RESPONDENT Neutral citation: Department of Labour: The Compensation Commissioner v Botha (Case no 326/2020) [2022] ZASCA 38 (04 April 2022) Coram: PETSE DP and SCHIPPERS, NICHOLLS and CARELSE JJA and MEYER AJA Heard: 17 February 2022 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via email. It has been published on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand- down is deemed to be at 12h00 on 04 April 2022. Summary: Labour law – Compensation for Occupational Injuries and Diseases Act 130 of 1993 – whether injury on duty resulted in disablement – extent of permanent disablement and compensation payable – remittal to tribunal for determination. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: North Gauteng Division of the High Court, Pretoria (Leso AJ and Baqwa J, sitting as court of appeal): The appeal and the cross-appeal succeed in part. The order of the court a quo is set aside and replaced with the following order: ‘(a) The decision of the Tribunal is set aside and it is declared that the appellant is entitled to compensation as envisaged in s 22(1) of the Compensation for Occupational Injuries and Diseases Act 130 of 1993, as amended (COIDA). (b) This matter is remitted to a Tribunal constituted in terms of s 91(3) of COIDA for a decision on the appellant’s degree of disablement as a result of the accident on 26 January 1998. (c) The Tribunal shall finalise this matter within six (6) months of the date of this order, including a calculation of the amount of compensation payable to the respondent. (d) The respondent shall pay the costs of the appeal, which costs shall include the costs of two counsel, where so employed. The appellant shall pay the costs of the appeal and cross-appeal, which costs shall include the costs of two counsel. ________________________________________________________________ JUDGMENT ________________________________________________________________ Nicholls JA (Petse DP and Schippers and Carelse AJJA and Meyer AJA concurring): [1] This appeal concerns a claim in terms of the COIDA by a claimant who was injured while on duty, 24 years ago. COIDA was introduced as social legislation to provide for compensation for disablement or death caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment.1 It is a system of no-fault compensation which relieves the employee of having to prove negligence, simultaneously relieving the employer, on payment of contributions to the Compensation Fund, of the eventuality of an expensive damages claim. COIDA has ‘a significant impact on the sensitive and intricate relationship amongst employers, employees and society at large’.2 [2] The appellant, the Compensation Commissioner (the Commissioner), has appealed against a judgment of the North Gauteng Division of the High Court, Pretoria (Leso AJ with Baqwa J concurring) (the high court), sitting as a court of appeal, in terms of s 91(5) of COIDA. The high court reversed the decision of a Tribunal, set up in terms of s 91(3) of COIDA, not to award any compensation to Mr Roebel Stephanus Botha (Mr Botha), the respondent. It granted an order setting aside the decision of the Tribunal and declaring Mr Botha to be 60% permanently disabled. The Commissioner was ordered to calculate the amount owing to Mr Botha within 30 days of the order. No order was made as to costs. 1 Preamble to COIDA. 2 Jooste v Score Supermarket Trading (Pty) Ltd (Minister of Labour Intervening) 1999 (2) SA 1 (CC); 1999 (2) BCLR 139 (CC) para 9. [3] Mr Botha filed a cross-appeal against the high court’s order that he was 60% permanently disabled, and the costs order. He contended that although correct in upholding his appeal, the high court erred in determining that he was 60% permanently disabled. He contends that he is 100% permanently disabled and should not, in any event, have been deprived of his costs as he was substantially successful. Special leave to appeal was granted by this Court in two separate applications, in respect of the appeal as well as the cross-appeal. [4] Mr Botha’s right to compensation arises out of s 22(1) of COIDA, which provides that ‘[i]f an employee meets with an accident resulting in his disablement or death such employee or the dependants of such employee shall, subject to the provisions of this Act, be entitled to the benefits provided for and prescribed in this Act’. The jurisdictional requirements for compensation under s 22(1) are as follows: (i) the person must be an employee as defined in COIDA; (ii) she or he must have been injured, contracted a disease, or died in an accident as defined in COIDA; (iii) the accident must have occurred in the course and scope of the employment; and (iv) the accident must have been the cause of the injury and resultant disablement suffered by the employee. [5] It is common cause that most of the requirements of s 22 have been met. It is not disputed that Mr Botha was an employee as defined in COIDA. Nor is it disputed that he injured himself in an accident whilst on duty. It is not contended that Mr Botha is excluded on any administrative grounds of non-compliance with the provisions of COIDA. Importantly, it is not disputed that he is permanently disabled and has been unfit to work since the accident. Mr Botha is therefore entitled to compensation in terms of s 22 of COIDA, if he can show that the accident resulted in his disablement. [6] The central issue in this appeal is whether there is a causal connection between the accident that occurred whilst Mr Botha was on duty and the permanent disability which he, admittedly, suffers. What gives rise to this inquiry is the Tribunal’s finding that, in light of Mr Botha’s pre-existing medical conditions at the time of the accident, the medical evidence does not show that Mr Botha’s permanent disablement was caused by the injury he suffered on duty. [7] On 26 January 1998, a police motor vehicle in which Mr Botha was a passenger, collided with a mini-bus taxi while giving chase to a suspect. As a result of the collision he suffered a whiplash injury and muscle spasms. He resumed work the following day, 27 January 1998, and on the same day was treated by Dr Griesel, who found him unfit to work. [8] In order to contextualise the extent of the injury he suffered on 26 January 1998, it is necessary to delve into Mr Botha’s medical history. This is complicated by a dearth of medical evidence documenting exactly what occurred, and the date thereof. From the limited records, the following can be gleaned: (a) In 1995 or 1996 (according to both a psychologist’s report and an occupational therapist’s report dated in May 2012), Mr Botha suffered a neck injury while training for the South African Police Service specialised police reaction force. He was in severe pain and reported the injury to the training instructor, but did not lodge a claim with the Commissioner in respect of this incident. The consequences were severe – he began losing balance, experienced weakness in his legs, headaches, frequent urination, and stiffness in both hands. He was diagnosed as having had a spinal stroke. (b) On 3 November 1997, a letter from a neurosurgeon, Dr Daan de Klerk, states that Mr Botha has an ‘interesting history . . . the left leg is weakening. He is becoming cripple, but no pain’. The MRI is reported to have shown that there was a gross disc prolapse at C5-6 and degeneration at L4-5 vertebrae. The greatest problem was ‘his extremely narrow canal and serious compression of the cord and the MR already reflect[ed] central changes in the chord’. (c) On 4 November 1997, Mr Botha underwent his first spinal fusion. Dr de Klerk noted the presence of ‘massive osteophytes’ as well as ‘midline pressure’. According to the occupational therapist Mr Botha complained that he was allowed only one month off work. This meant that he returned to duty without having properly recuperated. (d) Less than 3 months later, on 26 January 1998, the motor vehicle collision, which is the subject of this claim, occurred. It is not clear exactly what Mr Botha’s state of health was at this time. Dr Griesel, who saw him the following day, found him unfit to work due to ‘whiplash injury (soft tissue), muscle spasms: neck, shoulders, arms and L leg’. This finding was confirmed by Dr Griesel in other medical reports in terms of COIDA during 1998. (e) In March 1998, only two months after the accident, Mr Botha underwent his second cervical spine fusion operation. (f) A follow up examination with Dr de Klerk on 21 January 1999 records that Mr Botha had stabilised, but his foot remained a problem. (g) On 22 September 1999, he consulted a neurologist, Dr Bhagwan, who reported that Mr Botha indicated that he had ‘a 2 year history of numbness in the upper limbs precipitated by abducting his shoulders. He is presently walking with the aid of one elbow crutch and this he has been doing since 26 January 1998. He also experiences a burning sensation in his lower back and has spasms in the right lower limb and right upper limb’. He was assessed as having ‘left C5/6 myeloradiculopathy’ and ‘severe hypercholesterolaemia’. As the date of the injury on duty is incorrectly recorded as being on 27 January 1998, it is not clear if Mr Botha was using the crutch before the motor vehicle collision or afterwards. (h) On 22 March 2000, Dr Griesel completed a medical report in terms of COIDA in which he concluded that Mr Botha was permanently incapacitated and his condition had not stabilised. (i) There are no available medical records from 2000 until 2011 when it is recorded that Mr Botha had undergone three ankle fusion procedures and the excision of the coccyx. (j) On 31 January 2011, Dr Rossouw completed a medical report in terms of COIDA in which he found Mr Botha 80% physically impaired and 50% intellectually impaired. A follow up report by Dr Rossouw on 18 October 2011 concluded that he had 80% loss of function, 30% psychological loss, and 60% whole body impairment; he would never work again; his condition had not stabilised and was progressive; and he may require further corrective surgery. Reference was made to triple arthrodesis on the left ankle and excision of the coccyx. (k) On 15 May 2012 and 20 May 2012 respectively, Dale Davidson, a clinical psychologist, and Ms P Naidu, an occupational therapist, provided reports setting out Mr Botha’s disability in their respective fields. The extensive report of Ms Naidu provided a detailed overview of his disability and concluded that as a result of the injury at work and the subsequent surgeries his disabilities were of a permanent nature. (l) On 7 August 2012, Dr Rossouw found that Mr Botha was permanently unfit for work and that his condition would progressively deteriorate – the issue was not loss of movement but loss of strength. (m) The final medical report in terms of COIDA was that of Dr Basson, dated 15 August 2013, wherein he certified that the injuries were the result of the accident and found that Mr Botha’s condition had not stabilised and that he was unfit for work. He also noted the anatomical defects as being on the neck and the ankle, with a loss of movement. [9] Despite the above, and contrary to the findings in the medical reports, the Commissioner wrote to Mr Botha on 31 January 2014 refusing an award for compensation on the basis that Dr Rossouw had found that he suffered no permanent disability as a result of the accident. However, this was factually incorrect, as Dr Rossouw had stated in his report that Mr Botha was permanently incapacitated. [10] The refusal prompted Mr Botha to lodge an objection in terms of s 91(3) of COIDA. The Tribunal set up in terms of COIDA dismissed the objection. The reasons provided were that Mr Botha had a pre-existing injury to the neck which had resulted in a C4-C6 cervical fusion. The whiplash injury sustained in the motor vehicle accident had aggravated the pre-existing injury, which led to another fusion in exactly the same place. Reference was made to a report by Dr Basson on 22 September 1999 (this was clearly meant to refer to Dr Bhagwan’s report dated 28 September 1999), in which it was recorded that Mr Botha had been on crutches for a two-year period prior to the consultation. As Mr Botha consulted with Dr Bhagwan on 22 September 1999, this period must have commenced in 1997 before the injury on duty took place on 26 January 1998, so reasoned the Tribunal. In addition, Mr Botha had had surgery to his left ankle in 1999, which was unsuccessful, as well as three operations in 2011. There was no medical report which linked the arthrodesis of the left ankle and big toes and the C5-6 myeloradiculopathy to the on-duty motor vehicle accident. The tribunal concluded, in light of the above, that Mr Botha was unable to rebut the conclusion of the Commissioner that he suffered from pre-existing ‘degenerative spon[d]ylotic changes with end plate osteophytosis and disc space narrowing throughout his lumbar spine’. [11] The high court set aside the Tribunal’s decision and declared that Mr Botha was 60% permanently disabled. It ordered the Commissioner to calculate the amount payable to Mr Botha within 30 days. No reasons were given by the high court for its finding of 60% permanent disablement. [12] On appeal to this Court, it was argued by counsel for the Commissioner that, in light of his previous health problems, Mr Botha had not shown that the injury he suffered in the accident on 26 January 1998 resulted in his permanent disablement. Put differently, Mr Botha had failed to prove on a balance of probabilities that the cause of his permanent disablement was the injury he sustained on duty. It was correctly, and very fairly, conceded by counsel for the Commissioner that the appropriate and equitable course of action would be to refer Mr Botha for a further medical examination. The purpose would be to consider whether the accident on duty aggravated his pre-existing medical condition to the extent that it rendered him permanently disabled. [13] The first inquiry is whether any causal link has been established. In Basson v Ongevallekommissaris,3 an employee with a pre-existing back injury had an accident while on duty. Concerning the causal connection between the injury and the disablement, the court held that it was not required that the injury suffered by the employee should be exclusively as a result of the accident. It was sufficient that it be a ‘contributing factor’ to the injury. The court therefore held that the Commissioner would still be liable if the pre-existing condition was exacerbated by the accident, rendering the employee incapacitated, in that but for the accident, the employee would not have suffered the injury presently complained of. [14] On the facts before this Court, it is clear that the whiplash injury exacerbated the pre-existing injuries. Drs Griesel, Rossouw and Basson all certified, in the medical reports submitted in terms of COIDA, that they were satisfied that the injury had been caused by the accident. The tribunal itself found that the ‘whiplash injury aggravated the pre-existing neck injury and affected the 3 Basson v Ongevallekommissaris [2000] 1 All SA 67 (C). fusion on levels C4-C6’. A causal link has thus been established between the injury suffered on duty and the permanent disablement of Mr Botha. [15] This leads to the second inquiry, which is to what extent the pre-existing injury contributed to his permanent disablement. This is impossible to establish on the medical records before this Court. What is however apparent from the evidence is that Mr Botha has suffered permanent disablement. This has had a devastating impact on his quality of life and there is no doubt that he should be compensated for this. The question is the extent of his disablement and how his previous medical history impacted on his permanent disablement. [16] Compensation for permanent disablement is regulated by s 49 of COIDA, which provides: ‘(1)(a) Compensation for permanent disablement shall be calculated on the basis set out in items 2, 3, 4 and 5 of Schedule 4 subject to the minimum and maximum amounts. (2)(a) If an employee has sustained an injury set out in Schedule 2, he shall for the purposes of this Act be deemed to be permanently disabled to the degree set out in the second column of the said Schedule. (b) If an employee has sustained an injury or serious mutilation not mentioned in Schedule 2 which leads to permanent disablement, the Director-General shall determine such percentage of disablement in respect thereof as in his opinion will not lead to a result contrary to the guidelines of Schedule 2. (c) If an injury or serious mutilation contemplated in paragraph (a) or (b) has unusually serious consequences for an employee as a result of the special nature of the employee’s occupation, the Director-General may determine such higher percentage as he or she deems equitable.’ [17] Counsel for Mr Botha argued that in terms of the deeming provisions of s 49(2)(a) read with Schedule 2 of COIDA, Mr Botha is 100% disabled. That section deems as permanently disabled, to the degree set out in Schedule 2, an employee who has sustained an injury identified therein. The severity of the injury is determined with reference to Schedule 2, which then attributes a percentage of disability as a result of the injury. Schedule 2 lists the injuries in the first column and the percentage of permanent disability allocated to each injury in the second column. The injuries primarily relate to the loss of a body part, such as a limb, toe, finger, eye, and loss of sight or hearing. In addition, the Schedule provides for 100% permanent disability for certain injuries, such as total paralysis. It is the sixth item in the first column on which counsel for Mr Botha relies. This provides that if an employee suffers any injury not listed in the Schedule which leads to permanent total disablement, she or he will be deemed to be 100% disabled. It is on this basis that it is contended that Mr Botha is 100% disabled. Given his incapacity, it is argued, the high court misdirected itself, with reference to Schedule 2, by declaring Mr Botha to be 60% disabled. [18] This argument is devoid of merit. It is inconceivable that any injury not listed in Schedule 2 should attract an award of 100% permanent disablement, irrespective of the nature of the injury. There are countless injuries which an employee may suffer in the workplace which are not listed in the Schedule. As pointed out by this Court,4 almost anything which unexpectedly causes illness, injury to, or death of, an employee falls within the concept of an accident. Should an injury, which is not listed in Schedule 2, befall an employee as a result of such an accident, this does not axiomatically mean that he or she is 100% disabled. The extent of the disability must be determined in light of the facts of the specific case and according to medical evidence. [19] Further, this argument ignores s 49(2)(b), which grants the Director- General a discretion to determine a percentage of permanent disablement for a serious injury not provided for in Schedule 2. The section specifically states that 4 Churchill v Premier, Mpumalanga and another [2021] ZASCA 16; [2021] 2 All SA 323 (SCA); [2021] 6 BLLR 539 (SCA); 2021 (4) SA 422 (SCA) para 14. the result should not be contrary to the guidelines set out in Schedule 2. In applying these guidelines, courts have cautioned against applying a mechanical approach to Schedule 2.5 It should also be borne in mind that the schedules are no more than a set of administrative guidelines issued by the Director-General to assist decision-makers exercising powers in term of COIDA.6 Where the injuries have not been listed in Schedule 2 it has not been the approach of the courts to invoke the deeming provision. Rather, Schedule 2 has been used as a guideline in determining what is fair and reasonable compensation once the extent and nature of the permanent disablement has been established by the relevant medical experts.7 [20] In the particular circumstances of this case and in the absence of any evidence to that effect, there is no option but for the Commissioner to obtain further medical reports, detailing the extent to which the pre-existing injuries were the cause of Mr Botha’s current permanent disablement. Once these have been procured the Tribunal should determine the compensation payable with the benefit of proper medical evidence. In coming to its decision, the Tribunal should bear in mind that employees should be assisted as far as possible and any interpretation should be to the benefit of the employee.8 [21] Cognisant that Mr Botha was injured 24 years ago, and submitted his claim for compensation in August 1998, strict time limits are to be imposed on the Tribunal to make its determination. The delays in finalising his claim are 5 Healy v Compensation Commissioner and Another 2010 (2) SA 470 (E) paras 19 and 21. 6 Ibid para 2 where the court held that a knee injury not included in Schedule 2 rendered the employee 45% permanently disabled as opposed to the 18% determined by the Tribunal. 7 Odayar v Compensation Commissioner 2006 (6) SA 202 (N); (2006) 27 ILJ 1477 (N); Urquhart v Compensation Commissioner [2005] ZAECHC 32; [2006] All SA 80 (E); [2006] 1 BLLR 96 (E); Compensation Commissioner v Georgia Badenhorst [2022] ZAECHC 1 (E); Pretorius v The Compensation Commissioner and Another [2007] ZAFSHC 128 (FB); J L v Rand Mutual Assurance [2019] ZAGPJHC 392 (GJ). 8 Davis v Workmen’s Compensation Commissioner 1995 (3) SA 689 (C) 694F-G; Urquhart v Compensation Commissioner [2006] 2 All SA 80 (E); 2006 (1) SA 75 (E) 84A-C; Pretorius v The Compensation Commissioner and Another [2007] ZAFSHC 128 (FB) para 15. unreasonable, egregious and unexplained. There is no reason why medical reports setting out as accurately as possible the extent to which the accident on duty contributed to Mr Botha’s permanent disablement, should not be obtained within six months. Should Mr Botha require his own medical report, this too should be obtained within the six-month period. I can see no reason why the latter should not be at the Commissioner’s expense, in view of the fact that it relates to an injury on duty. [22] As to costs, it was conceded by counsel for the Commissioner that the Biowatch principle should apply and, indeed, that the only reason for the remittal is because the Tribunal erred in the first place when it decided that no compensation whatsoever was payable. This being the case, there is no reason why Mr Botha should be out of pocket, especially taking into account the unconscionable delay in finalising his claim. Both parties employed two counsel and accepted that any costs award should reflect this. [23] To the extent that condonation was sought by both parties for the late filing of the cross-appeal and the heads of argument respectively, it is hereby granted. [24] In the result I make the following order: The appeal and the cross-appeal succeed in part. The order of the court a quo is set aside and replaced with the following order: ‘(a) The decision of the Tribunal is set aside and it is declared that the appellant is entitled to compensation as envisaged in s 22(1) of the Compensation for Occupational Injuries and Diseases Act 130 of 1993, as amended (COIDA). (b) This matter is remitted to a Tribunal constituted in terms of s 91(3) of COIDA for a decision on the appellant’s degree of disablement as a result of the accident on 26 January 1998. (c) The Tribunal shall finalise this matter within six (6) months of the date of this order, including a calculation of the amount of compensation payable to the respondent. (d) The respondent shall pay the costs of the appeal, which costs shall include the costs of two counsel, where so employed.’ The appellant shall pay the costs of the appeal and cross-appeal, which costs shall include the costs of two counsel. ____________________ C H NICHOLLS JUDGE OF APPEAL APPEARANCES For appellant: M Sikhakhane SC (with him, S Nhantsi) (Heads of argument drawn by Z Z Matabese SC, with him S Nhantsi) Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein For respondent: T P Krüger SC (with him, H Worthington) Instructed by: Gildenhuys Malatji Incorporated, Pretoria Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 04 April 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Department of Labour: The Compensation Commissioner v Botha (326/2020) [2021] ZASCA 38 (04 April 2022) The Supreme Court of Appeal (SCA) today upheld an appeal and cross-appeal in part, thus setting aside the order of the court a quo and remitting the matter to a Tribunal set up in terms of s 91(3) of Compensation for Occupational Injuries and Diseases Act 130 of 1993, as amended (COIDA). The appellant was ordered to pay the costs of the appeal, in accordance with the Biowatch principle. The appellant, the Compensation Commissioner (the Commissioner), appealed against a judgment of the North Gauteng Division of the High Court, Pretoria (Leso AJ and Baqwa J) (the high court), sitting as a court of appeal, in terms of s 91(5) of COIDA. The high court reversed the decision of a tribunal, set up in terms of s 91(3) of COIDA, not to award any compensation to the respondent. It granted an order setting aside the decision of the tribunal and declaring the respondent, who was the appellant in the high court, to be 60% permanently disabled. The appellant, the respondent in the high court, was ordered to calculate the amount owing to the respondent within 30 days of the order. No order was made as to costs. The respondent filed a cross-appeal against the high court’s order, contending that although correct in upholding his appeal, the high court erred in determining that he was 60% permanently disabled. He contended that he was 100% permanently disabled and should not have been deprived of his costs, as he was substantially successful. The central issue in the appeal was whether there was a causal connection between the accident that occurred whilst the respondent was on duty and the permanent disability which he, admittedly, suffered. The SCA found that the first inquiry was whether any causal link had been established between the injury suffered on duty and the permanent disablement of the respondent. On the facts, it was clear that the whiplash injury exacerbated the pre-existing injuries. The doctors who examined the respondent all certified that they were satisfied that the injury had been caused by the accident. The tribunal itself found that the whiplash injury aggravated a pre-existing neck injury. A causal link had thus been established. The second inquiry was to what extent the pre-existing injury contributed to the respondent’s current status. The SCA found that that was impossible to establish on the medical records before the court. What was however apparent from the evidence was that the respondent had suffered permanent disablement. The question then was the extent of the respondent’s disablement and how his previous medical history impacted on his present disablement. The SCA held that the respondent was to obtain medical reports which detail the extent to which the pre-existing injuries caused the respondent’s current permanent disablement. Once these had been procured, the SCA held, the matter should be remitted to the tribunal for determination of the compensation payable with the benefit of proper medical evidence. The SCA held further that strict time limits were to be imposed on the tribunal to make its determination within six months. ~~~~ends~~~~

2316

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 543/08 RANDFONTEIN MUNICIPALITY Appellant and JOHN MICHAEL GROBLER First Respondent BEN MSIMANGA Second Respondent THE OCCUPIERS OF IMMOVABLE PROPERTY KNOWN AS PORTION 74 OF THE FARM ELANDSVLEI 249 I.Q. RANDFONTEIN Third Respondent Neutral citation: Randfontein Municipality v Grobler and others (543/08) [2009] ZASCA 129 (29 September 2009). Coram: HARMS DP, LEWIS, PONNAN JJA, TSHIQI et WALLIS AJJA Heard: 10 SEPTEMBER 2009 Delivered: 29 SEPTEMBER 2009 Summary: Eviction ─ referral to oral evidence on whether occupation with express or tacit consent ─ whether PIE or ESTA applicable. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: High Court, Johannesburg (Du Plessis AJ sitting as court of first instance). The appeal is upheld with no order as to costs in this court and the order of the court a quo is set aside and replaced with an order in the following terms: '(a) The application is postponed to a date to be determined by the Registrar of the South Gauteng High Court for the hearing of oral evidence. (b) The issues to be resolved at such hearing are: (i) whether or not any person, claiming to reside on portion 24 of the Farm, Elandsvlei, 249, IQ, Randfontein is an occupier thereon as contemplated in the Extension of Security of Tenure Act, 62 of 1997 (ESTA); and (ii) whether such person had consent, as contemplated in ESTA, to reside thereon, and (iii) in consequence of such findings, whether the provisions of ESTA or the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998 (PIE) are applicable to the eviction of such persons. (c) The evidence to be adduced at the aforesaid hearing shall be that of any witnesses whom the parties or any of them may elect to call, subject however to what is provided below. (d) Save in the case of any persons who have already deposed to affidavits in these proceedings, neither party shall be entitled to call any person as a witness unless─ (i) It has served on the other party, at least 14 days before the date appointed for the hearing, a statement by such person wherein the evidence to be given in chief by such person is set out; or (ii) The court, at the hearing, permits such person to be called despite the fact that no such statement has been so served in respect of his or her evidence. (e) Either party may subpoena any person to give evidence at the hearing, whether such person has consented to furnish a statement or not. (f) The fact that a party has served a statement or has subpoenaed a witness shall not oblige such party to call the witness concerned. (g) Within 45 days of the making of this order, each of the parties shall make discovery on oath of all documents relating to the issues referred to above, which documents are, or have at any time been, in possession or under the control of such party. (h) Such discovery shall be made in accordance with Rule 35 of the Uniform Rules of Court and the provisions of that Rule with regard to the inspection and production of documents discovered shall be operative. ______________________________________________________________ JUDGMENT ______________________________________________________________ TSHIQI AJA (HARMS DP, LEWIS, PONNAN JJA et WALLIS AJA concurring): [1] The issue in this appeal is whether the High Court had jurisdiction to order the eviction of certain occupiers from property under the provisions of the Prevention of Illegal Eviction From and Unlawful Occupation of Land Act 19 of 1998 (PIE). Mr Grobler, the owner of a farm described as Portion 74, Elandsvlei 249 IQ, Randfontein brought an application to the High Court, Johannesburg, for an order for the eviction of the second and third respondents (the occupiers) from the farm stating that none of them had a right to occupy it. The application was opposed by the respondents who challenged the jurisdiction of the court in that they alleged that the dispute fell to be determined under the provisions of the Extension of Security of Tenure Act 62 of 1997 (ESTA) because, as they alleged, the occupiers had consent to occupy the land. The court below accepted the version of the applicant that there was no consent and dealt with the matter under PIE. The court further found no real nor genuine dispute of fact and consequently held that no case was made for referral to oral evidence. The appeal is against both findings and is brought with leave of the court below. The main issue is whether there was a real and genuine dispute that necessitated a referral to oral evidence. [2] The occupiers commenced settling on the farm in 1959. They constitute a settled community of approximately 2000 people comprising 900 women, 54 pensioners and 500 children. They live in shelters consisting of approximately 133 shacks, 44 permanent structures, two caravans and by August 2006 there were said to be 261 dwellings. It is not in dispute that the land is classified as agricultural land. [3] The appellant, Randfontein Local Municipality (the third respondent in the court below) was cited in its capacity as the state functionary obliged to give effect to the obligations of the state in terms of s 26 and 27 of the Constitution of the Republic of South Africa ('the Constitution'). Notice was duly served in terms of s 4(2) of PIE and the application was opposed by the occupiers who filed affidavits with the assistance of the Legal Aid Board. [4] ESTA and PIE were adopted with the objective of giving effect to the values enshrined in ss 26 and 27 of the Constitution. The common objective of both statutes is to regulate the conditions and circumstances under which occupiers of land may be evicted.1 The main distinction is that broadly speaking ESTA applies to rural land outside townships and protects the rights of occupation of persons occupying such land with consent after 4 February 1997, whilst PIE is designed to regulate eviction of occupiers who lack the requisite consent to occupy. Occupiers protected under ESTA are specifically excluded from the definition of 'unlawful occupier' in PIE.2 An order for the eviction of occupiers may be granted under ESTA by a competent 1 PIE provides for the prohibition of unlawful eviction and provides procedures for the eviction of unlawful occupiers. ESTA aims to assist to facilitate long-term security of tenure but also recognises the right of land owners to apply to court for an eviction order in appropriate circumstances. 2 Section 1 of PIE defines an unlawful occupier as 'a person who occupies land without the express or tacit consent of the owner or person in charge, or without any other right in law to occupy such land, excluding a person who is an occupier in terms of the Extension of Security of Tenure Act, 1997, and excluding a person whose informal right to land, but for the provisions of the Act, would be protected by the provisions of the Interim Protection of Informal Land Rights Act, 1996 (Act 31 of 1996)'. court on just and equitable grounds, having regard to the different considerations applicable in each instance. The Land Claims Court is a specialist tribunal established by s 22 of the Restitution of Land Rights Act 22 of 1994 and enjoys jurisdiction, subject to ss 17, 19, 20 and 22 of ESTA, to deal with cases determined under ESTA. It follows, therefore, that if the land was occupied with consent, either express or tacit, the jurisdiction of the High Court to deal with it is excluded in the absence of consent to its jurisdiction.3 [5] 'Consent' and 'occupier' are defined in s 1 of ESTA as follows: '"consent" means express or tacit consent of the owner or person in charge of the land in question, and in relation to a proposed termination of the right of residence or eviction by a holder of mineral rights, includes the express or tacit consent of such holder; "occupier" means a person residing on land which belongs to another person, and who has or on 4 February 1997 or thereafter had consent or another right in law to do so, but excluding . . ..' [6] Section 2(1)(a) of ESTA provides: '(1) Subject to the provisions of section 4, this Act shall apply to all land other than land in a township established, approved, proclaimed or otherwise recognised as such in terms of any law, or encircled by such a township or townships, but including ─ (a) any land within such a township which has been designated for agricultural purposes in terms of any law . . ..' [7] ESTA envisages both express and tacit consent. The fact that express consent was not alleged does not mean there was no consent at all. In this case the occupiers assert consent. The lengthy period for which the occupiers had settled on the land, the size of the community and the fact that the municipality provides certain services are all relevant in determining the existence of tacit consent. 3 Section 17(2) of ESTA. [8] The provisions of s 3 of ESTA may also be relevant in the final determination of the dispute because this section creates a presumption of consent in favour of the occupiers in civil proceedings in terms of ESTA as follows: '(4) For the purposes of civil proceedings in terms of this Act, a person who has continuously and openly resided on land for a period of one year shall be presumed to have consent unless the contrary is proved. (5) For the purposes of civil proceedings in terms of this Act, a person who has continuously and openly resided on land for a period of three years shall be deemed to have done so with the knowledge of the owner or person in charge.' This section provides that once it is proved that occupiers have resided on the land classified as agricultural land for more than three years then the presumption becomes effective in their favour. [9] In Rademeyer and others v Western Districts Council and others4 Nepgen J had occasion to deal with the requirement of tacit consent in the context of ESTA. He accepted that the initial occupation of the respondent's property in that case took place without the prior consent of the respondent, a local authority. He found that it was clear that upon becoming aware of the presence of the occupiers, the attitude of the local authority was that the occupiers could remain on the property until alternative arrangements could be made to house them elsewhere. He then concluded as follows:5 'In my judgment, the conduct of the respondent in permitting the intervening respondents to remain on the respondent's property and resolving to provide them with water and sanitation (which has in fact been provided) constitutes at the very least tacit consent to the intervening respondents to reside on the respondent's property. It was not contended, and in my view rightfully so, that, if the provisions of the Act were applicable, the applicants could be granted any relief. As I have concluded that the Act does apply to these proceedings, the application cannot succeed.' [10] The conclusion in that decision was debated at length by the Constitutional Court in Residents of Joe Slovo Community, Western Cape v 4 1998 (3) SA 1011 (SECLD). 5 1017B-C. Thubelisha Homes and others.6 Three judges in that court (Moseneke DCJ, Sachs J and Mokgoro J) concluded that the surrounding circumstances seen as a whole allowed a reasonable inference that the owner had given the occupiers consent to occupy the land. Moseneke DCJ in his judgment found that the conduct of the municipality in providing substantial services over a lengthy period, occupation over a period of 15 years and the conditions of occupation imposed by the municipality were the overall factors from which such an inference may be drawn.7 O'Regan J in her judgment found that as the upgrading of the settlement was welcomed by the inhabitants and the process of upgrading, which took place in 2002, went way beyond the provision of basic services it was clear that the municipality was consenting tacitly to the occupation of the land.8 [11] In order to determine the issue raised in this appeal it is necessary to analyse the evidence pertaining to the occupation of the farm. Grobler in his founding affidavit did not provide information on the circumstances in which the land was occupied. As proof of ownership he attached a Windeed Report from the Deeds Office database which reflects the purchase price as R100 000,00 and the date of transfer from an entity known as Patelsons Investments (Pty) Ltd on 17 February 2005. He simply stated that the occupiers did not occupy in terms of a lease agreement and that they were occupying without his consent. He also attached a document named 'site plan of 74 Elandsvlei' which shows that there was an established township on the land on the date of transfer into his name and he mentioned that since that date seven more shacks had been erected on the property. This implies that the majority of occupiers must have been in occupation before he became owner. Significantly, he failed to address the question whether, in terms of ESTA, the occupiers did not have prior consent, tacit or otherwise. [12] The answering affidavits of the occupiers were also brief and did not deal with consent or the circumstances in which the land was occupied. They 6 [2009] ZACC 16. 7 Para 151. 8 Para 278. simply gave personal details, the dates of occupation of the respective individuals and that they receive municipal services. These dates go back for many years. [13] The affidavit by the municipal manager, Randfontein, simply recited details of the housing programme being implemented by the municipality in terms of the South African Housing Code and did not provide details pertaining to the occupiers other than stating that the property was 'first occupied in November 2005' which was palpable nonsense. [14] It is not in dispute that the property was first occupied in 1959. It is furthermore clear that when Grobler purchased the property in February 2005, the occupiers had already been in occupation of the land for a lengthy period of time. The only contentious issue therefore is whether they remained in occupation with consent. As ESTA clearly recognises tacit consent which may be in the form of prior consent by other owners or people in charge, the allegations contained in later affidavits created real and bona fide disputes of fact with regards to consent. The approach to be adopted in an instance such as this is trite and was further clarified by this court in Wightman t/a J W Construction v Headfour (Pty) Ltd and another9 as follows: 'Recognising that the truth almost always lies beyond mere linguistic determination the courts have said that an applicant who seeks final relief on motion must, in the event of conflict, accept the version set up by his opponent unless the latter's allegations are, in the opinion of the court, not such as to raise a real, genuine or bona fide dispute of fact or are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers: Plascon–Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E-635C. See also the analysis by Davis J in Ripoll-Dausa v Middleton NO and Others 2005 (3) SA 141 (C) at 151A- 153C with which I respectfully agree. (I do not overlook that a reference to evidence in circumstances discussed in the authorities may be appropriate.) A real, genuine and bona fide dispute of fact can exist only where the court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact said to be disputed. There will of course be 9 2008 (3) SA 371 (SCA) paras 12 and 13. instances where a bare denial meets the requirement because there is no other way open to the disputing party and nothing more can therefore be expected of him. But even that may not be sufficient if the fact averred lies purely within the knowledge of the averring party and no basis is laid for disputing the veracity or accuracy of the averment. When the facts averred are such that the disputing party must necessarily possess knowledge of them and be able to provide an answer (or countervailing evidence) if they be not true or accurate but, instead of doing so, rests his case on a bare or ambiguous denial the court will generally have difficulty in finding that the test is satisfied. I say "generally" because factual averments seldom stand apart from a broader matrix of circumstances all of which needs to be borne in mind when arriving at a decision. A litigant may not necessarily recognise or understand the nuances of a bare or general denial as against a real attempt to grapple with all relevant factual allegations made by the other party. But when he signs the answering affidavit, he commits himself to its contents, inadequate as they may be, and will only in exceptional circumstances be permitted to disavow them. There is thus a serious duty imposed upon a legal adviser who settles an answering affidavit to ascertain and engage with facts which his client disputes and to reflect such disputes fully and accurately in the answering affidavit. If that does not happen it should come as no surprise that the court takes a robust view of the matter.' [15] This approach is appropriate in this matter. The unsatisfactory manner in which the occupiers' defence was conducted is sketched in the judgment of the court below. But that does not dispose of the matter. Grobler bore the onus to establish that the high court had jurisdiction. He was faced with the fact that when he bought the land, there was a settled community there. He failed to address the issue of jurisdiction squarely in his founding affidavit in spite of all the indications that there must have been a real possibility of consent to occupy that preceded his purchase. He was surprisingly silent on why he bought the land despite this and on what he intended to do with the community. [16] The parties filed supplementary affidavits. In his supplementary affidavit the municipal manager sought to retract the date of November 2005 and introduced hearsay evidence from some of the occupiers stating that according to them they occupied the land earlier than 1997 with the consent of a certain Laher. Clearly the municipal manager could not provide independent information concerning the basis of occupation and no reliance may be placed on his affidavit with regard to the circumstances of the occupation. [17] Mr Ben Msimanga, the second respondent (the first respondent in the court below), who was cited in his capacity as chairman of the community of occupiers, also filed an answering supplementary affidavit in which he made the bald allegation that they had occupied the property for a period of 35 years with the consent of the owner but gave no further details pertaining to the identity of the person who gave the consent, his capacity, nor the circumstances surrounding the consent and the occupation. [18] In reply to the allegation of consent, Grobler filed an affidavit in which he denied the consent alleged and set out for the first time that he bought the property in February 2005 from a company known as Patelsons Investments (Pty) Ltd ('Patelsons'). It would appear that they in turn had bought it during February 1993. He denied that the previous owner had given consent to the occupiers. In support of this he attached confirmatory affidavits from a Mr Baboo Patel, a shareholder and director of Patelsons and a Mr Ismailjee, a son of Laher. These affidavits are still silent on the circumstances of the occupation prior to the purchase and have no probative value. A proper investigation of the circumstances is necessary. [19] Another relevant consideration is the purchase price paid by Grobler for the land. The purchase price in 1993, when the land was transferred to Patelsons, was R100 000,00. Grobler in turn purchased the property from Patelsons in 2005 for the same amount. It is highly unlikely that the value of the land had not increased after so many years. This unusual factor suggests on the probabilities that everyone knew about the occupation and its probable implications. [20] The common cause facts regarding the lengthy period of tenure on the land and the circumstances in which Grobler bought the land are such to give credence to the occupiers' later allegation that they had the necessary consent entitling them to the protection under ESTA and that there is a real and bona fide factual dispute. This, coupled with the undisputed evidence that the municipality provided basic municipal services, show that it is necessary to clarify the circumstances around the occupation of the land through oral evidence. The court below took a too narrow view of the matter and overlooked the reality that the dispute of fact goes to the heart of the matter. In this regard the court below erred. [21] The following order is accordingly made: The appeal is upheld with no order as to costs in this court and the order of the court a quo is set aside and replaced with an order in the following terms: '(a) The application is postponed to a date to be determined by the Registrar of the South Gauteng High Court for the hearing of oral evidence. (b) The issues to be resolved at such hearing are: (i) whether or not any person, claiming to reside on portion 24 of the Farm, Elandsvlei, 249, IQ, Randfontein is an occupier thereon as contemplated in the Extension of Security of Tenure Act, 62 of 1997 (ESTA); and (ii) whether such person had consent, as contemplated in ESTA, to reside thereon, and (iii) in consequence of such findings, whether the provisions of ESTA or the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 19 of 1998 (PIE) are applicable to the eviction of such persons. (c) The evidence to be adduced at the aforesaid hearing shall be that of any witnesses whom the parties or any of them may elect to call, subject however to what is provided below. (d) Save in the case of any persons who have already deposed to affidavits in these proceedings, neither party shall be entitled to call any person as a witness unless─ (i) It has served on the other party, at least 14 days before the date appointed for the hearing, a statement by such person wherein the evidence to be given in chief by such person is set out; or (ii) The court, at the hearing, permits such person to be called despite the fact that no such statement has been so served in respect of his or her evidence. (e) Either party may subpoena any person to give evidence at the hearing, whether such person has consented to furnish a statement or not. (f) The fact that a party has served a statement or has subpoenaed a witness shall not oblige such party to call the witness concerned. (g) Within 45 days of the making of this order, each of the parties shall make discovery on oath of all documents relating to the issues referred to above, which documents are, or have at any time been, in possession or under the control of such party. (h) Such discovery shall be made in accordance with Rule 35 of the Uniform Rules of Court and the provisions of that Rule with regard to the inspection and production of documents discovered shall be operative. _______________________ Z L L TSHIQI ACTING JUDGE OF APPEAL Appearances: Counsel for Appellant: R T Sutherland SC G I Hulley Instructed by Maserumule Incorporated, Johannesburg Honey Attorneys, Bloemfontein Counsel for Respondent: C P Wesley Instructed by (1st): Truter Crous & Wiggill, Randfontein Naudes, Bloemfontein (2nd & 3rd): Mogale Justice Centre c/o Setlhodi Attorneys, Randfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 September 2009 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal RANDFONTEIN MUNICIPALITY v J M GROBLER & OTHERS The Supreme Court of Appeal has upheld an appeal and set aside an order by the South Gauteng High Court for the eviction of approximately 2000 people comprising 900 women, 54 pensioners and 500 children who commenced settling on a farm in 1959. The application for their eviction was opposed by the occupiers who challenged the jurisdiction of the High Court alleging that the dispute fell to be determined under ESTA because they occupied the land with consent. The High Court accepted the version of the landowner that there was no consent and ordered the eviction in terms of PIE. The SCA found that there was a real and bona fide dispute on whether there was consent or not because the landowner who bore the onus to establish the jurisdiction of the High Court failed to address the issue of jurisdiction in spite of the fact that there was a real possibility of consent to occupy that preceded his purchase. The SCA upheld the appeal and remitted the matter to the South Gauteng High Court for the hearing of oral evidence. --ends--

3675

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1039/2020 Name of Ship: MV 'MSC SUSANNA' In the matter between: THE OWNERS AND UNDERWRITERS OF THE MV 'MSC SUSANNA' FIRST APPELLANT THE DEMISE CHARTERERS OF THE MV 'MSC SUSANNA' SECOND APPELLANT and TRANSNET (SOC) LTD – THE NATIONAL PORTS AUTHORITY OF SOUTH AFRICA FIRST RESPONDENT THE MINISTÈRE DE ARMÉES SECOND RESPONDENT SAUDI BASIC INDUSTRIES CORPORATION THIRD RESPONDENT Neutral citation: MV 'MSC Susanna': Owners and Underwriters of the MV 'MSC Susanna' and Another v Transnet (SOC) Ltd and Another (1039/2020) [2021] ZASCA 135 (6 October 2021) Coram: NAVSA, WALLIS, SCHIPPERS, MBATHA and GORVEN JJA Heard: 1 September 2021 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 09h45 on 6 October 2021 Summary: Tonnage limitation – s 261(1) of the Merchant Shipping Act 57 of 1951 (MSA) – whether limitation can be invoked by owner of merchant ship against the owner of a ship owned by the defence force of South Africa or another country – ss 3(3) and (6) of the MSA. ORDER On appeal from: KwaZulu-Natal Division of the High Court, Pietermaritzburg sitting in the exercise of its admiralty jurisdiction (Mngadi J, sitting as court of first instance): The appeal is upheld with costs, such costs to include those consequent upon the employment of two counsel. The order of the high court is set aside and replaced by the following order: 'The rule nisi is confirmed in the following terms: The Ministére des Armées is joined as a defendant in the action instituted by the appellants under case number A4/2019. The Appellants are granted leave to amend the pleadings in the said action so as to plead their cause of action against the Ministére des Armées. The Ministére des Armées is ordered to pay the costs occasioned by its opposition to the application, such costs to include those consequent upon the employment of two counsel.' JUDGMENT Wallis JA (Navsa, Schippers, Mbatha and Gorven JJA concurring) [1] On 10 October 2017, during a substantial storm in the port of Durban the MSC Susanna broke her moorings and, while drifting in the port, collided with several vessels, including the FNS ‘Floreal’. The Floreal was a French naval vessel under the control of the second respondent, the Ministère des Armées (the Ministry) of the French Republic. The MSC Susanna also allided with cranes and other infrastructure owned by the first respondent, Transnet (SOC) Ltd – The National Ports Authority of South Africa (the NPA). The NPA sued the appellants, respectively the owners and underwriters on the one hand, and the demise charterer on the other, of the MSC Susanna, for damages in an amount of some R23 million arising out of this incident. The Ministry's response, to the appellants' action for a declaration of non-liability in relation to the damages to the Floreal, was to lodge a counterclaim for damages amounting, together with interest and costs, to nearly €10 million. [2] Given the value of the actual and potential claims against the appellants, on 7 November 2019 they issued a writ of summons in a limitation action against the NPA, contending that their total liability for damages arising out of the events of 10 October 2017 should be limited in terms of the provisions of s 261(1)(b) of the Merchant Shipping Act 57 of 1951 (the MSA). On the same day they launched the present proceedings seeking the joinder of the Ministry to the limitation action. The application was resisted by the Ministry on the grounds that, as the owner of a foreign naval vessel, the right to limit was excluded as against it by the provisions of s 3(6) of the MSA. That point was upheld by Mngadi J in the KwaZulu-Natal Division of the High Court, Pietermaritzburg sitting in the exercise of its admiralty jurisdiction. The present appeal is with his leave. [3] In terms of the provisions of SCA Rule 8(8) the parties have sensibly agreed on the following statement of the issue in this appeal: ‘The parties agree that the appeal turns on whether the owners and demise charterers of a merchant ship may, in circumstances where a merchant ship causes damage to a ship belonging to a defence force as contemplated in Section 3(6) of the Merchant Shipping Act, 1951 (‘the Act’), seek a limitation of liability in terms of Section 261 of the Act in respect of the claim of that defence force.’ That admirably encapsulates the issue in this case. It is common cause that, if the answer favours the appellants, the high court should have ordered the joinder of the Ministry. If it is against them, then the high court judgment was correct.1 While it is expressed in these succinct terms it is 'a question of very great difficulty', as Viscount Simmonds LC said in Nisbet Shipping Co Ltd v Reginam,2 a case to which I will revert. Tonnage limitation [4] The right of shipowners and certain other parties to limit their liability for damages arising from the operation of the vessel is an ancient one. Legislation providing for ship owners to limit their liability to the value of the vessel is to be found in statutes dating from the 1600’s in various parts of Europe, particularly the Netherlands.3 It was introduced in England in 1733 by legislation enacted in response to the decision in Boucher v Lawson,4 in which a cargo of gold bullion was entrusted to the Master of a vessel, who proved unable to resist temptation and absconded with it. The owners of the vessel were held liable to the full extent of the value of the gold, which vastly exceeded the value of the vessel. Parliament intervened by passing the Responsibility of Shipowners Act,5 limiting the liability of shipowners to the value of the ship, its equipment and any freight due for the voyage. Similar legislation was introduced in 1 The basis for the joinder is s 5(1) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (the AJRA). 2 Nisbet Shipping Co Ltd v Reginam [1955] 3 All ER 11 (PC)(Nisbet PC). 3 Wandile Zondo, Limitation of Liability for Maritime Claims: A South African Perspective a thesis submitted in partial fulfilment of a Master of Science degree at the World Maritime University in Malmö, Sweden helpfully traces the history of limitation at pp 3-13. The thesis is available at https://commons.wmu.se/cgi/viewcontent.cgi?article=1510&context=all_dissertations. 4 Boucher v Lawson 95 ER 116; Griggs 1997 LMCLQ 369 to 373. 5 Responsibility of Shipowners Act 1733 (7 Geo II. c 15). the United States of America in 1851. Three international conventions on limitation of liability by shipowners were concluded in the last century, although complete uniformity has not been achieved.6 It has been described as 'a time honoured and internationally endorsed practise' which is now embodied in our domestic legislation.7 [5] For our purposes it is sufficient to note that until the passage of the MSA, South Africa did not have domestic legislation dealing with limitation. The English Merchant Shipping Act, 1894 remained of application in South Africa8 and made provision for limitation of liability calculated on the gross registered tonnage (GRT) of the vessel.9 This changed with the passage of the MSA in 1951. Section 261 of the MSA is headed: 'When owner not liable for whole damage' and s 261(1)(b), which is the provision relied upon by the appellants, reads: 'The owner of a ship, whether registered in the Republic or not, shall not, if … any loss or damage to any property or rights of any kind, whether movable or immovable, is caused without his actual fault or privity─ (a) . . . 6 The three are the 1924 International Convention for the Unification of Certain Rules relating to the Limitation of Liability of Owners of Sea-going Vessels (only ratified by fifteen states); the International Convention Relating to the Limitation of Liability of Owners of Sea-going Vessels, Brussels 1957 and the Convention on Limitation of Liability for Maritime Claims, London 1976, read with the 1969 Tonnage Convention and the 1996 Protocol amending the limits of liability under the Convention. 7 Nagos Shipping Ltd v Owners, Cargo lately laden on board the MV Nagos, and Another 1996 (2) SA 261 (D) at 271G-H. 8 See South African Railways and Harbours v Smith's Coasters (Prop) Ltd 1931 AD 113. 9 Gross registered tonnage is a potentially misleading expression in that it is not a measurement of weight or mass, but of the carrying capacity of the vessel, deriving its name from the tuns or barrels that were the common means of storing many goods for shipment on board vessels at that time. Originally it was measured by determining how many tuns could be loaded on the vessel. It is now measured on the basis of the internal volume of the vessel subject to certain exclusions. (b) if no claim for damages in respect of loss of life or personal injury arises be liable for damages in respect of loss of or damage to property or rights to aggregate amount exceeding 66.67 special drawing rights for each ton of the ship’s tonnage.' [6] The basis for the Ministry's contention that the appellants may not invoke this provision in respect of its claim is to be found in s 3 of the MSA. Section 3(3) provides that the Act binds the State, subject to the entitlement of the Minister of Transport to exempt vessels owned by the government of South Africa or Transnet from a range of provisions dealing with crew and the recovery of wages. Section 3(6), on which the Ministry relied, reads: 'The provisions of this Act shall not apply to ships belonging to the defence forces of the Republic or of any other country.' The Ministry contended that, as the Floreal was part of the French navy and therefore part of the French defence force, the provisions of s 261 did not apply in relation to its claim against the appellants. [7] The appellants' contention was that s 261(1)(b) conferred an internationally recognised right upon them as the owners10 of the MSC Susanna to limit their liability and that they were invoking limitation against the Ministry, as the party making a claim against them, and not against the Floreal. They submitted that the right to limit is conferred in relation to claims for loss of life or personal injury, or any loss of or damage to any property of any kind, whether movable or immovable. The effect of the Ministry's contention is to introduce an unwarranted qualification to the broad and unqualified words 'any property of any kind' by adding 'save a naval vessel owned by the defence force of any nation'. 10 In the extended sense given by s 263 of the MSA. Discussion [8] The issue is one of the proper interpretation of ss 261(1)(b) and 3(6) of the MSA. It is, so far as the argument and the authorities to which we have been referred go, entirely novel. As always, one starts with the words of s 261(1)(b).11 Its terms are clear and comprehensive. The right to limit is given to the owner of a vessel, an expression given an extended meaning in s 263(2), in respect of all loss or damage to any property or rights of any kind, whether movable or immovable. That language encompasses all types of property, without qualification. It is clearly wide enough to include the loss or damage embodied in the claim by the Ministry. Counsel rightly conceded that if this section and the others that are contained in Part 4 of Chapter 5 of the MSA were contained in a separate statute without s 3(6), the right to limit would be available on this language in respect of the Ministry's claim. That means that the focus must necessarily fall on the effect of s 3(6). [9] It is indisputable that s 3(6) excludes the bulk of the provisions of the MSA from application to both South African and foreign vessels forming part of their country's defence forces. These vessels can conveniently be referred to as naval vessels, although it is conceivable that there might be vessels forming part of branches of the defence force other than the navy. The MSA's provisions, dealing with the administration of the MSA (Chapter I); matters concerning the registration of vessels in the South African registry (Chapter II); certificates of competency and service of crew (Chapter III); engagement, discharge, repatriation, payment, discipline and general treatment of 11 Sub-sections (a) and (c) are similarly worded and deal first with the case where loss of life or personal injury alone are caused, and second with the case where there is both loss of life and personal injury and loss or damage to property. The limitation amount is set in special drawing rights (SDRs) and varies as between the three different cases as dealt with in s 261(1). seafarers (Chapter IV); safety of ships and life at sea (Chapter V, Parts I, II and III); shipping enquiries and courts of marine enquiry (Chapter VI); carriage of goods by sea (Chapter VIII, now repealed in its entirety); and offences, penal provisions and legal procedures (Chapter IX) cannot be effectively applied to naval vessels. The regimes under which the armed forces of most, if not all, countries operate are so different in these areas from the manner in which other vessels operate, even those owned by sovereign governments, that the reasons for an exclusionary provision such as s 3(6) are apparent. [10] Other areas of the MSA are more problematic. In its original form it included in Chapter VII (sections 293 to 306 of the MSA) provisions in respect of wreck and salvage, that have now been repealed by the Wreck and Salvage Act 94 of 1996, which incorporates the provisions of the International Convention on Salvage, 1989 into domestic law.12 The Wreck and Salvage Act is binding on the State, but Article 4(1) of the Convention excludes warships and all non-commercial vessels owned or operated by States and entitled at the time of salvage operations to sovereign immunity, unless the State decides otherwise. The effect is that a salvor in relation to such a vessel does not enjoy the protection of the Convention. That does not, however, mean that a salvor may not provide salvage services or receive a salvage reward. It merely means that they must deal with the State concerned in relation to such services. [11] Chapter 5, Part IV of the MSA differs from these other provisions, in that, save in respects of two matters of no relevance to vessels other 12 Section 2 of Act 94 of 1996. than South African registered vessels,13 it is not concerned with the operation of vessels, the treatment of crew or issues of safety. Its primary focus is on two areas of the liability of owners of vessels. First, it deals with the division of loss between shipowners in the event of a collision under s 255; liability for personal injury under s 256; and claims for contribution against joint wrongdoers in relation to the latter claims under s 257. Second, under s 261 it provides for the right of a ship owner and certain other parties to limit the extent of their liability arising out of an incident causing loss of life or physical injury to persons, or loss of or damage to property, or a combination of both, where these were caused without the actual fault or privity of the ship owner. These two areas of liability are not concerned with regulating the operation of the vessel or vessels involved in that incident. In the case of a collision the question is who, and if more than one vessel is involved, in what proportions, those responsible for the collision shall bear the loss. Where personal injury has been caused it is the liability for damages and rights of contribution between joint wrongdoers that are regulated. In the case of limitation the concern is with the extent of the liability of the owner of the harm- causing vessel. [12] It is noteworthy that each of these is concerned with the liability of owners of ships to third parties, and claims against and between owners of ships. That the claims arise out of the operation of the ships is incidental. The focus is on the legal liability of the owners and, in the case of limitation claims, other parties such as charterers, managers and operators of ships.14 These are purely commercial matters concerning the rights and obligations of owners of ships. This is important in the light of 13 The respects relate to the obligation to report accidents to the proper officer and the obligation to give notice to SAMSA of the loss of a vessel under ss 259 and 260 respectively. See ss 259(2) and 260. 14 MSA s 263(2). the wording of s 3(6), because it says that the provisions of the MSA shall not apply 'to ships'. It does not say that its provisions will not apply to the owners of ships. Much less does it say that the Act does not apply to defence forces, so as to preclude owners of merchant ships from invoking its provisions by, for example, seeking an order for the division of loss after a collision, or a contribution to the damages arising from jointly caused personal injury, or an order limiting their liability. [13] Linguistically s 3(6) is not apt to exclude the invocation of limitation by the owners of the MSC Susanna. That straightforward view is the same as that of Kerwin and Estey JJ of the Supreme Court of Canada in construing a similarly worded provision in the Canada Shipping Act, 1934 in The Queen v Nisbet Shipping Co Ltd.15 They said: 'The final point raised by the appellant is that in any event it is entitled to a limitation of liability under s 649 of the Canada Shipping Act. As the owner of the Orkney, the Crown would ordinarily be entitled to take advantage of this provision but it is said that s 712 of the Act prevents this result. That section provides: — 'This Act shall not except where specifically provided apply to ships belonging to His Majesty.' In my opinion this section has no reference to a claim for limitation of liability under s 649, which can only be put forward by an owner.' [14] Some reinforcement for the view that this is the ordinary meaning of the words of the section is to be found in the dissenting judgment of Locke J,16 where he said, after a consideration of the history of this legislation in both England and Canada, that: 'In my opinion, s 712 should be construed as applying to or in respect of ships belonging to Her Majesty and that, accordingly, the limitation of the liability of His 15Her Majesty the Queen v Nisbet Shipping Company Limited 1953 CanLII 77 (SCC); [1953] 1 SCR 480 (SCC) at 492 (Nisbet SCC). 16 Ibid, at 502. Majesty qua owner is excluded by s 712. To construe the section otherwise would be, in my judgment, to fail to interpret the section in such manner as will best ensure the attainment of the object of the enactment …' In other words, while on its language s 712 applied to owners and not ships, considerations of the historical context, and in particular a significant difference between the wording of the 1927 Act and the 1934 Act, led to a construction that the entire Act was excluded in respect of Crown-owned ships. [15] The Ministry's heads of argument advanced an interpretation of s 261(1)(b) on the basis that it attributed to the appellants' argument the premise that s 261 only applied to one ship. They contended that this was faulty, because in the circumstances of a collision there would be two ships. One it described as 'the offending ship' and the other as 'the damaged ship'. It submitted that s 261(1) applied not only to the offending ship, but also to the damaged ship. In my view the suggested premise did not underpin the appellants' argument and the conclusion sought to be drawn was faulty. Section 261 is concerned with the liability of an owner of a ship, not the ship itself. Whatever the precise nature of an action in rem, the underlying liability will be borne by the owner of the ship. Where the action is in personam the position is even clearer. As to the damaged ship, the claim arising from that damage is the claim of that ship's owner. Ships do not bring claims. [16] Before the MSA was enacted our law in regard to limitation was to be found in s 503 of the English Merchant Shipping Act, 1894.17 In Smith's Coasters this court held that a shipowner facing a claim by the 17 Merchant Shipping Act, 1894 (57 & 58 Vict. C 60). Smith's Coasters, op cit, fn 8; Atlantic Harvesters of Namibia (Pty) Ltd v Unterweser Reederei GMBH of Bremen 1986 (4) SA 865 (C) at 875H-J. South African Railways & Harbours, an agency of the State, could not raise a defence of limitation under s 503. However, it reached that conclusion on the basis that, as a matter of royal prerogative, the Crown could not be bound by a statute unless the statute expressly or by necessary implication bound the Crown. The implication of permitting reliance on limitation was that a claim vested in the Crown would be reduced and that could not occur unless the Crown was bound by the provisions of s 503. There was no general language in the statute justifying the conclusion that the Crown was bound and no basis for implying that it was. Accordingly an exception to a plea based on limitation under s 503 was upheld.18 That was a narrow conclusion relating only to the South African state and not to foreign states or their vessels, whether military or otherwise. [17] The case is unhelpful. We are not concerned with a claim against the South African State, but if we were s 3(3) of the MSA expressly provides that it binds the State. Nor are we concerned with a claim against a foreign State. In any event the principle invoked there does not apply in relation to foreign States. Nor can there be any question of sovereign immunity arising because it is the Ministry making a claim against the appellants, not them making a claim against the Ministry. The grounds upon which Smith's Coasters was decided are inapplicable here. [18] The Ministry also argued that the title of the MSA – the Merchant Shipping Act – and the long title 'To provide for the control of merchant shipping and matters incidental thereto' indicated that it was not concerned with naval vessels. It said that this purpose was manifested in 18 It appears that this would also have been the position in England at that time. Dampskibs Aktieselskabet 'Mineral' of Narvik v Owners of steamship 'Myrtlegrove' and Others [1919] 1 Lloyds Law Reports 289 (Adm Div) at 290. s 3(6) of the MSA. The difficulty with the submission is that it overlooked the words 'and matters incidental thereto'. One matter of great concern to owners of merchant ships is the possibility of claims arising against them in the course of the operation of their ships. Chapter 5, Part IV deals with that issue in a manner that is consistent with international practice in maritime matters. The MSC Susanna is a merchant ship and was engaged in merchant shipping at the time of the incident giving rise to the claims against the appellants. Its owners invoked a provision of the MSA that in terms they are entitled to invoke. Allowing the appellants to limit their liability in relation to the claims in this case is clearly something incidental to merchant shipping. [19] The Ministry relied on the judgment of the Privy Council in Nisbet (PC).19 The claim in that case arose from a collision between a foreign merchant vessel and a Canadian warship. As a result of the collision the merchant vessel and her cargo were a total loss. The claim – effectively against the Canadian government – was to recover the damages suffered in consequence of the loss of the ship and its cargo. By a majority of six to one the Canadian court held that it was open to the Crown to invoke limitation against the ship owner's claim.20 On appeal from the judgment of the Supreme Court of Canada, the Privy Council reversed this decision. [20] The advice of the Board was delivered by Viscount Simonds LC.21 He first dealt with the approach of the majority in the Supreme Court. This proceeded on the basis that under the Petition of Right Act, 1938 in 19 Op cit, fn 2. 20 Nisbet SCC, op cit, fn 15. 21 That was the time when no dissents were allowed in decisions of the Privy Council, because it was notionally giving advice to the monarch and therefore only a single advice could be given upon which the monarch was to act. Canada 22 the courts had been given jurisdiction to decide claims against the Crown. The question then was the extent of the Crown's liability in respect of such claims. Six judges23 held that the liability imposed under the Petition of Right Act was the same liability as an ordinary citizen would attract in respect of the same claim. That liability could be limited under the relevant provision of the Canada Shipping Act and therefore the Crown could limit its liability, provided a proper case was made for limitation.24 [21] Viscount Simonds noted that the Canadian statute had conferred jurisdiction, without referring to the imposition of liability on the Crown, but accepted that its effect was to impose liability on the Crown. He went on: ‘The question then is, what is the measure of the liability which is not defined by the Act but is to be inferred from the creation of jurisdiction? It is not in dispute that at least those circumstances which give rise to a claim between subject and subject will support a claim by a subject against the Crown. From this, it is an easy step to say that a subject is not entitled to any greater relief against the Crown than he would be against a fellow subject, and this is supported by reference to s 8 of the Petition of Right Act . . . , which provides that the statement of defence or demurrer to a Petition of Right may raise, besides any legal or equitable defences in fact or in law available under that Act, any legal or equitable defences which would have been available if the proceedings had been a suit or action in a competent court between subject and subject. Nor can it be ignored that, though the right to limit liability for damages is not part of the common law but in England and Canada alike is the creature of statute, it is a right almost universally established in the law of nations and of considerable antiquity. It would therefore, be easily assumed that the Crown, assenting to the 22 The equivalent of the Crown Liabilities Act 1 of 1910 as explained in Smith's Coasters, op cit, fn 8. Prior to this enactment proceedings against the Crown were only permissible if granted by the Crown following upon the lodging of a Petition of Right. 23 In addition to Kirwin and Estey JJ, they were Rand J, concurred in by Rinfret CJ, at 488 and Kellock and Cartwright JJ at 496 of Nisbet SCC. 24 The Supreme Court of Canada had remitted that issue to the trail court for determination. imposition of a new liability, would secure for itself the advantage at least limiting it in a manner so generally conceded. This view is thus cogently stated by Rand J ([1953] SCR at 488): "Where liability, then, on the same footing as that of a subject, is established, giving a right to damages, I can think of no more appropriate enactment to which that basic rule of the prerogative could be applied than to a statutory limitation of those damages." The basic rule which the learned judge refers is that under which it is said that the Sovereign may avail himself of the provisions of any Act of Parliament.' [22] The advice continued: 'These are the considerations which prevailed with the learned judges of the Supreme Court, with the exception of Locke J with whose judgment their Lordships find themselves in agreement. They are weighty considerations but, as it appears to their Lordships, they do not explain why full effect should not be given to s 712. It is true that, in 1934, that section, which was itself a re-enactment of s 741 of the Merchant Shipping Act, 1894, could have no operation in regard to any liability of the Crown, for it was only in 1938 that any relevant liability was imposed on the Crown. It does not, however, follow that, when that liability is imposed, as it is by the amending Act of 1938, the provisions of s 712 can be ignored. In the United Kingdom the same problem arose as, when under the Crown Proceedings Act, 1947, the Crown was for the first time made liable for the tortious acts of its servants, and it was by that Act [s 5] specifically enacted that the sections of the Merchant Shipping Act 1894, should apply to limit the liability of the Crown. And in Canada, similar provision is now made by the Crown Liability Act, 1953.’ [23] With all due respect it does not seem to me that s 712 had the effect given to it by the Board. In a later passage Viscount Simonds said that no distinction could be drawn between the words ‘ships belonging to His Majesty’ and words such as ‘His Majesty’ simpliciter. I fail to see why that would be the case. In my view there is a straightforward difference between provisions dealing with a person's ships and a provision dealing with the person themself. But it may be that the decision was in large measure based on the sequence in which the Canadian statutes had been enacted. The Canada Shipping Act was passed in 1934, four years before Canadian courts were given jurisdiction to decide cases brought against the Crown. Accordingly, when the Canada Shipping Act replaced the English Merchant Shipping Act 1894, claims for damages against the Crown based on maritime collisions could not be brought as of right and the provisions of s 503 of the Merchant Shipping Act 1894 could not be invoked either by or against the Crown. The Board's advice may be explained on the basis that the 1938 statute conferring jurisdiction could not confer upon the Crown a statutory right not granted to it under the 1894 statute. [24] It is as well at this point to highlight a significant difference between the issue in that case and the present case. There it was the Crown, as defendant in the action, seeking to limit its liability by invoking the relevant provisions of the Canada Shipping Act, and the owner of the ship that was lost resisting limitation. Here it is the reverse. The owner of the MSC Susanna invokes a right to limit clearly given under s 261(1)(b) and its entitlement to do so is resisted under s 3(6). The equivalent of the question before the Board in Nisbet PC, would be to ask whether, if the roles between the MSC Susanna and the Floreal had been reversed, the Ministry as the owner of the Floreal would have been able to limit its liability. No doubt in that situation, had the appellants questioned the Ministry's right to invoke limitation, the arguments for each party would have been reversed. [25] We do not have to decide that issue in this appeal. It is interesting that in Canada, following the example of the United Kingdom, legislation was passed to reverse the effect of the decision in Nisbet PC. That is a pointer to the restriction held to exist in that case not being desirable. But it is a question that could easily arise in the event of a collision between a South African naval vessel and a merchant ship and we have not heard sufficiently full argument to determine it now. It might also arise in cases dealing with ss 255, 256 and 257 of the MSA on which no argument was addressed. The appellants were content to advance their case on the basis that this might be the situation. The submission that the appellants' contentions would not give a sensible meaning to section 261 might be an argument in favour of national defence forces being entitled, along with all other vessels, to invoke limitation where their operations cause loss of life or personal injury, or loss of or damage to property and rights. It is not an argument against the proposition that limitation may be invoked in relation to claims by a national defence force against a ship owner. [26] No discernible reason of policy supports a different construction of s 261(1)(b). Limitation of liability exists as a matter of policy. None of the conventions on limitation exclude its invocation in respect of claims arising from damage done to or by naval vessels. We were not referred to any provisions in the laws of any other maritime state that would preclude a claim in respect of damage done to a naval vessel from being required to participate along with other creditors in the distribution of a limitation fund. France was an original signatory to the 1976 Limitation Convention, which contains no exemption from the invocation of limitation for naval vessels.25 Sixty-three other states, including virtually all major maritime nations, with the exception of the United States of America,26 were either signatories to, or have ratified, the Convention. An 25 The 'Heidberg' Court of Cassation, Commercial Chamber, 22 September 2015. 26 In the United States of America the subject is dealt with under U S Code Title 46, Subtitle III §§ 30101 to 31343. Like the United Kingdom and Canada there is a provision (§31106) providing that exemption from the right to invoke limitation in respect of claims by naval vessels would therefore be inconsistent with international practice. [27] There are also incongruities arising from the Ministry's argument. Section 261 deals with three situations, namely, an occurrence causing loss of life or personal injury; an occurrence causing loss or damage to property or rights; and an occurrence that causes both loss of life or personal injury and loss or damage to property or rights. Had the incident giving rise to this case resulted in loss of life or injury to naval personnel on board the Floreal, they and the dependents of any who were killed could have brought actions against the appellants to recover damages. Any such claims would have been subject to limitation. Nothing in s 3(6) suggests that the officers and crew of the Floreal would enjoy some special exemption from the application of limitation. It seems incongruous to say that the Ministry, as the owner of the Floreal, can do what its officers and crew cannot and escape the application of limitation. [28] A second incongruity is that the effect of the Ministry's construction would be that vessels belonging to the defence force of South Africa or another state, would be able to resist any limitation of their claims under s 261, but other vessels owned by the South African state or any foreign state would not. Thus if the polar supply and research ship, the S A Agulhas II, was involved in a collision caused entirely by another vessel, whilst en route to Marion Island and Prince Edward Island, limitation could be invoked in regard to any claims by its owner, the Department of Environmental Affairs, arising from the collision. the United States is entitled to the exemptions and limitations of liability provided by law to an owner, charterer, operator, or agent of a vessel. However, if it was being accompanied at the time by the SAS Protea, a marine survey vessel, and that vessel was likewise involved in the collision without fault on its part, limitation would not apply, because the SAS Protea is part of the South African navy and the SANDF. Result [29] In the result I hold that the appellants are entitled to claim to limit their liability, if any, arising from the events in Durban harbour on 10 October 2017 in respect of the claim by the Ministry under s 261(1)(b) of the MSA. Their entitlement to do so is not excluded by s 3(6) of the MSA. Accordingly, the following order is made: The appeal is upheld with costs, such costs to include those consequent upon the employment of two counsel. The order of the high court is set aside and replaced by the following order: 'The rule nisi is confirmed in the following terms: The Ministére des Armées is joined as a defendant in the action instituted by the appellants under case number A4/2019. The Appellants are granted leave to amend the pleadings in the said action so as to plead their cause of action against the Ministére des Armées. The Ministére des Armées is ordered to pay the costs occasioned by its opposition to the application, such costs to include those consequent upon the employment of two counsel.' ___________________________ M J D WALLIS JUDGE OF APPEAL Appearances For appellant: S R Mullins SC (with him P J Wallis SC) Instructed by: Shepstone & Wylie, Umhlanga Rocks; Matsepes Inc, Bloemfontein For respondent: C J Pammenter SC (with him D Cooke) Instructed by: Clyde & Co, Cape Town; Lovius Block, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 6 October 2021 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. MV 'MSC Susanna': Owners and Underwriters of the MV 'MSC Susanna' and Another v Transnet (SOC) Ltd and Another (1039/2020) [2021] ZASCA 135 (6 October 2021) The SCA today upheld an appeal from the KwaZulu-Natal Provincial Division, Pietermaritzburg, exercising admiralty jurisdiction, in this matter, which arises from events on 10 October 2017 during a substantial storm in the port of Durban. During the storm the MSC Susanna broke her moorings and collided with several other vessels as well as land installations. One of these vessels was the FNS 'Floreal' a French naval vessel owned by the French Defence Ministry. The owners, underwriters and charterers of the MSC Susanna are facing substantial claims from Transnet and from the French Defence Ministry arising out of this incident. If held liable they wish to invoke their right in respect of these claims to limit the damages they must pay in terms of the provisions of s 261(1)(b) of the Merchant Shipping Act 57 of 1951 (the MSA). To that end they sought the joinder of the French Defence Ministry in the limitation action. The joinder was resisted on the grounds that the provisions of the MSA could not be invoked against the Ministry in the light of the provisions of s 3(6) of the MSA, which provides that the provisions of the MSA shall not apply to ships belonging to the SANDF or the defence force of any other country. The high court held that this precluded the appellants from relying on their right to limit their liability as against the French Defence Ministry and dismissed the application for joinder. The SCA held that the exclusion in s 3(6) applies to ships and not the owners of ships. This was in accordance with the language of the section. Section 261(1) clearly affords ship owners facing extremely large claims the right to limit their liability if the claims arose from a single incident and was not due to the owner's fault or privity. The international conventions relating to the limitation of liability of the owners of ships do not provide an exclusion as contended by the Defence Ministry and there is no international jurisprudence supporting such an exclusion. It would also give rise to several anomalies. Accordingly the appeal was upheld and an order for joinder made in place of the high court's order.

2909

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 1035/2013 In the matter between: CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY FIRST APPELLANT EXECUTIVE MAYOR, CITY OF JOHANNESBURG SECOND APPELLANT CITY MANAGER, CITY OF JOHANNESBURG THIRD APPELLANT EXECUTIVE DIRECTOR: HOUSING, CITY OF JOHANNESBURG FOURTH APPELLANT and PHILANI HLOPHE FIRST RESPONDENT RESIDENTS OF CHUNG HUA MANSIONS, 191 JEPPE STREET, JOHANNESBURG SECOND TO 182nd RESPONDENTS CHANGING TIDES PROPERTIES 74 (PTY) LTD 183rd RESPONDENT Neutral citation: City of Johannesburg Metropolitan Municipality v Hlophe (1035/2013) [2015] ZASCA 16 (18 March 2015). Coram: Brand, Maya and Willis JJA and Schoeman and Van der Merwe AJJA Heard: 19 February 2015 Delivered: 18 March 2015 Summary: Local government ─ mandamus obliging responsible functionaries to ensure that municipality complies with court orders ─ competent and appropriate in the circumstances ─ additional reporting required by the order of the court a quo order beyond issues arising in the case and in conflict with the principle of separation of powers ─ consequently set aside on appeal. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from South Gauteng High Court, Johannesburg (Satchwell J sitting as court of first instance): 1 The appeal succeeds only to the extent that para 2 of the order of the court a quo is set aside. 2 The appellants are ordered to pay the costs of the appeal, including the costs of two counsel where so employed. ______________________________________________________________ JUDGMENT ______________________________________________________________ Van der Merwe AJA (Brand, Maya and Willis JJA and Schoeman AJA concurring): [1] The 183rd respondent, Changing Tides Properties 74 (Pty) Ltd (Changing Tides), is the registered owner of the property known as Chung Hua Mansions, 191 Jeppe Street, Johannesburg (the property). The property is situated in the centre of Johannesburg. The building on the property was originally used as an office block, but it was eventually abandoned and became a shelter for poor and homeless people. Changing Tides has since acquired the property and intends to renovate and upgrade it. [2] The first to 182nd respondents (the occupiers) reside on the property unlawfully. The first appellant is the City of Johannesburg Metropolitan Municipality (the City). The second, third and fourth appellants (the functionaries) are the executive mayor, city manager and director of housing of the City in their respective official capacities. [3] Changing Tides obtained an order of eviction of the occupiers from the property. The eviction order was to take effect only after the City provided suitable temporary accommodation to the occupiers. The City was therefore ordered to do so. But the City failed to comply with this order and the essential issue in this appeal is whether an order obliging the functionaries to ensure compliance by the City was justified. Background [4] Changing Tides launched its application for eviction in the South Gauteng High Court on 26 May 2011. It cited the occupiers and the City as respondents. The eviction application first came before court on 29 February 2012, when an order was made by agreement between Changing Tides, the occupiers and the City. The order directed the City to consider the eligibility of the occupiers for the provision of alternative accommodation in terms of its temporary/emergency housing programme. The City was also directed to file a report by no later than 30 April 2012 inter alia setting out which of the occupiers were eligible for temporary/emergency accommodation; what accommodation would be provided to the occupiers who qualify; and when such accommodation would be provided. The City did not comply with any of these provisions of the order of 29 February 2012 nor did it explain its failure to do so. [5] In the result Changing Tides re-enrolled the eviction application for 14 June 2012. It came before Claassen J. The City applied for a postponement. Claassen J described the reason for the postponement as „. . . that the City requires an opportunity to examine each and every one of the occupants in order to classify them in accordance with certain undisclosed categories, before the City is willing to supply alternative accommodation‟. Claassen J refused the postponement and after hearing counsel for Changing Tides, the occupiers and the City in respect of the eviction application, issued an order in terms of which the occupiers were ordered to vacate the property by no later than 15 February 2013, failing which the sheriff was authorised to evict the occupiers. The City was directed to provide the occupiers (listed in an annexure to the order) with temporary shelter by no later than 30 January 2013, if they were still resident on the property. It was also directed to file a report by no later than 31 October 2012, setting out the nature and location of the temporary shelter to be provided to the occupiers. The order was no doubt informed by the decision of the Constitutional Court in Blue Moonlight Properties1 handed down on 1 December 2011. [6] Save for minor matters not relevant here, the City consented to the order of Claassen J. It nevertheless failed to comply therewith. It filed a report only on 20 November 2012, which did not set out the nature and location of the temporary shelter to be provided to the occupiers. The report stated that it would be impossible for the City to accommodate the occupiers in terms of the order of Claassen J due to the lack of availability of buildings and financial and other resources. It concluded with the unhelpful suggestion that if the court is of the view that it is not just and equitable to order an eviction due to the lack of availability of temporary shelter then the court must not order the eviction of the occupiers. But if the court has already ordered the occupiers to vacate the property then an appropriate date for the eviction of the occupiers and allocation of temporary shelter must be determined. Self-evidently the City did not comply with the obligation to provide temporary shelter to the occupiers by 30 January 2013. [7] In the meantime the occupiers faced eviction by 15 February 2013. They attempted to engage with the City in this regard, to no avail. On 19 December 2012 the occupiers launched an application citing the City, the functionaries and Changing Tides (the enforcement application). In essence the occupiers claimed an order declaring that the functionaries are obliged to take all the steps necessary to ensure that the City complies with the order of Claassen J, by providing the occupiers with temporary shelter and a mandatory order obliging the functionaries to give effect to the contents of the declarator. [8] The City and the functionaries filed their answering affidavit in the enforcement application on 4 February 2013. Both the eviction application and the enforcement application came before Lamont J on 6 February 2013. He made an order by agreement between all the parties concerned. In terms of 1 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd & another 2012 (2) SA 104 (CC). this order the eviction application and the enforcement application were consolidated. Paragraph 4 of this order reaffirmed the order of Claassen J in the following terms: „The first respondent („the City”) is directed to provide all those whose names appear in the document entitled “List of Residents of Chung Hua Mansions” dated 6 June 2012, annexed to the order granted by Claassen J (“the occupiers”), provided they are still resident at the property and have not voluntarily vacated it, with temporary shelter where they may live secure against eviction in a location as near as possible to the area where the property is situated.‟ [9] Paragraph 5 of the order required the City to provide a detailed report in respect of specified matters. It reads: „The City is directed by no later than the 20th March 2013 to deliver a report to this court, confirmed on affidavit by an appropriate official of the City, setting out the nature and location of the temporary shelter to be provided to the occupiers. That report must identify the building or buildings where the occupiers will be accommodated and the particular terms as to rent and occupation on which the occupiers will be accommodated, including any house rules or other tenant responsibilities sought to be imposed. The report must specifically deal with the buildings known as Ekuthuleni and Linatex. The report must also contain an undertaking to make the accommodation available by a specified date, giving fully detailed and rational reasons why such date cannot be any earlier. The report must deal specifically with the issue of proximity and explain why the particular location and form of accommodation have been selected. The report must also set out the steps taken between the date of this order and the filing of the report to engage with the occupiers through their legal representatives, or by any other appropriate means.‟ [10] It can be accepted that the Ekuthuleni and Linatex buildings were specifically referred to in the order because of what was said in the answering affidavit to the enforcement application, namely that approximately 110 accommodation opportunities were available in Ekuthuleni and that Linatex, which had room for 144 persons, would be available to the City for purposes of providing temporary accommodation. The consolidated application was postponed to 9 April 2013 and the implementation of the eviction order was suspended pending the outcome of the hearing on 9 April 2013. [11] The order of Lamont J was not complied with. On 20 March 2013 the City filed its report. Despite what was said in the answering affidavit, the report stated that the accommodation in Ekuthuleni and Linatex were allocated to occupiers who were evicted from another building. It stated that it was impossible to accommodate the occupiers „in the foreseeable future‟. The City therefore sought a further extension for a period of at least nine months to identify a building or buildings to accommodate the occupiers. [12] On 9 April 2013 the matter came before Satchwell J. She delivered judgment on 3 May 2013, in terms of which the relief claimed in the enforcement application was granted. Satchwell J also directed the City to provide answers to questions posed in the order. The City was ordered to pay the costs of the application on the attorney and client scale. Paragraphs 1, 2 and 3 of the order provide: „1. It is declared that the second, third and fourth respondents, in their respective capacities as the Executive Mayor, Municipal Manager and Director of Housing of the City of Johannesburg Metropolitan Municipality (“the City”), are constitutionally and statutorily obliged to take all the necessary steps to ensure that the City complies with paragraph 2 of the court order granted by Claassen J in case no. 2011/20127 on 14th June 2012 (“the June 2012 court order”) and the court order granted by Lamont J on 6th February 2013 (“the February 2013 court order”), obliging the City to provide the applicants with temporary shelter where they may live secure against eviction, in a location as near as feasibly possible to 191 Jeppe Street, Johannesburg. 2. The City is directed to provide full and complete answers to the following questions, such answers to be signed by the second, third and fourth respondents personally, and furnished to the applicants and fifth respondent as also this court by 12h00 on Friday 18th May 2013. a. Subsequent to the Blue Moonlight order of the Constitutional Court on 1st December 2011, i. Has the City of Johannesburg established a specialist task team or unit to plan for implementation housing arrangements for all those whom it is estimated will be evicted as unlawful occupiers, rendered homeless and whom the City has an obligation to accommodate? ii. The City is required to specify: 1. Which specialist skills such as urban development, town planning, housing, finance, building and other areas of expertise are represented in this unit? 2. Which departments within the City administration are represented within this unit and with which departments does the unit liaise? 3. What budget has been established for such unit? iii. If no such unit has been established: 1. The City is required to explain in detail why this has not been done. 2. What structure or structures currently implement the housing arrangements required to be implemented in the Blue Moonlight case with reference to the personnel involved, skills available, liaison undertaken, time availed from other duties, management and direction of implementation. iv. Has the City planned an estimate of the number of persons and the gender and age distribution of persons who will be required to be accommodated over the period 1st December 2011 to 30 November 2011, 1st December 2012 to 30th November 2012, 1st December 2012 to 30th December 2013 and for each successive twelve month period until the end of 2016? If the City uses another twelve month period for such estimates, then it should so indicate. v. Has the City, in accordance with the estimates referred to above: 1. Planned for the number of beds, rooms, buildings and other facilities required over this period? 2. Ascertained the current and prospective availability of land and/or buildings? 3. Budgeted for rentals or purchase of land and buildings and refurbishment and maintenance thereof to achieve provision of temporary accommodation over this period? 4. Arranged financing estimated to be needed over this period. The City is required to identify sources of funding: a. Dates of applications and sums required from the National Treasury. b. Dates of applications and sums required from the Gauteng Province. c. Dates of applications and sums required from the City of Johannesburg. vi. Which experts prepared these estimates and plans on behalf of the City of Johannesburg and are these plans and estimates continuously updated? vii. If no such estimates and plans have been prepared, the City is required to explain why this has not been done and on what basis the City is currently attempting to meet its current and future obligations in terms of the Blue Moonlight case. viii. Has the City identified buildings for rental by the City in order to provide accommodation as required? How many such buildings have been identified? How many beds would be available per building and in total? At what cost are the rentals per building and per bed? How many rental agreements have been negotiated and concluded? How many negotiations are currently underway? ix. Has the City identified buildings for purchase in order to provide accommodation as required? How many such buildings have been identified? How many beds would be available on a per building and in total? At what cost are the purchase and refurbishment of each building and per bed? How many purchase agreements have been negotiated and concluded? How many negotiations are currently underway? x. On what date did the City make a written offer to Fifth Respondent in this matter, Changing Tides Properties 74 (Pty) Ltd, to rent the building situate at 191 Jeppe Street, Johannesburg and at what rental and for what period in order to provide accommodation to the occupiers in this matter. On what date did the City make a written offer to Fifth Respondent to purchase the aforesaid building and at what purchase price and on what terms? Over what period did negotiations take place? On what date did the City receive a written response from Fifth Respondent and to what effect? xi. Has the City identified architects, builders, plumbers, electricians and other persons with expertise who can procure renovations and refurbishments and maintenance of any building rented or purchased to provide accommodation? Has the City taken steps to ensure speedy tender processes or contractual arrangements to ensure temporary accommodation is available on an emergency basis? 3. The second, third and fourth respondents are ordered to take all the administrative and other steps necessary to ensure that the City ─ i) complies, within two months of the date of this order, with its obligations in terms of paragraph 2 of the June 2012 and February 2013 court orders, to provide the applicants with temporary shelter where they may live secure against eviction, in a location as near as feasibly possible to 191 Jeppe Street, Johannesburg. ii) complies, within one month of the date of this order with its obligations in terms of the June 2012 and February 2013 court orders to deliver a report specifying the nature and location of the temporary shelter to be provided to the applicants. That report must be delivered, under oath, and signed by the second, third and fourth respondents.‟ [13] In terms of para 4 of the order, the eviction order of 14 June 2012 was suspended pending compliance with para 2 thereof. The parties before us are ad idem that the reference to para 2 of the order of the court a quo was made per incuriam and should be a reference to para 3 thereof. We were informed from the bar that temporary shelter was indeed subsequently made available to the occupiers and that what remained to be determined was whether the accommodation was constitutionally compliant. [14] Leave to appeal was granted by this court. The essence of the case of the City and the functionaries on appeal is that paras 1, 2 and 3 of the order of the court a quo were wrongly granted. For convenience I refer to paras 1 and 3 of the order as the mandamus and to para 2 as the reporting order. The mandamus [15] The mandamus was of course granted against the functionaries. In the heads of argument the functionaries argued that there was no basis in law for the mandamus. In support of this argument much reliance was placed on the judgment in Nyathi v MEC for Department of Health, Gauteng..2 In court counsel for the City and the functionaries conceded that the mandamus was competent in law. Counsel said that there could be no objection in principle to the mandamus, had the functionaries been cited in the eviction application from the inception. [16] The concession was clearly correctly made. Nyathi dealt with the constitutionality of s 3 of the State Liability Act 20 of 1957. It was concerned with the execution of money judgments against the State. The court considered the possibility of contempt proceedings against State functionaries in order to obtain payment of a judgment debt. In such proceedings the judgment creditor would have to obtain a mandamus against the relevant State functionary. If the State functionary does not comply with the mandamus he of she could be held in contempt of court. In this context the court held that contempt proceedings are tedious, unlikely to ensure payment, too onerous a burden on and no real remedy for the judgment creditor whose primary concern is payment of the judgment debt. It follows that Nyathi is no authority 2 Nyathi v MEC for Department of Health, Gauteng & another 2008 (5) SA 94 (CC). for the proposition that a mandatory order could not be made against the functionaries. [17] As is the position with the State, the City can only act through the functionaries that are responsible to perform the specific function or act on its behalf. The judgment of this court in MEC for the Department of Welfare v Kate3 provides direct authority for a mandamus on pain of committal for contempt of court against the responsible functionary. Nugent JA said:4 „It goes without saying that a public functionary who fails to fulfil an obligation that is imposed upon him or her by law is open to proceedings for a mandamus compelling him or her to do so. That remedy lies against the functionary upon whom the statute imposes the obligation, and not against the provincial government. If Jayiya has been construed as meaning that the remedy lies against the political head of the government department, as suggested by the Court below, then that construction is clearly not correct. The remarks that were made in Jayiya related to claims that lie against the State, for which the political head of the relevant department may, for convenience, be cited nominally in terms of s 2 of the State Liability Act 20 of 1957, though it is well established that the government might be cited instead. Moreover, there ought to be no doubt that a public official who is ordered by a court to do or to refrain from doing a particular act, and fails to do so, is liable to be committed for contempt, in accordance with ordinary principles, and there is nothing in Jayiya that suggests the contrary.‟ This judgment was endorsed by this court in Meadow Glen Home Owners Association & others v City of Tshwane Metropolitan Municipality & another.5 [18] It is rightly not disputed that the functionaries are the officials of the City responsible for implementation of the orders of Claassen J and Lamont J. The functions and powers of an executive mayor of a municipality are set out in s 56 of the Local Government: Municipal Structures Act 117 of 1998 (the Structures Act). This section indicates that an executive mayor is responsible for the overall planning and oversight of the service delivery of the municipality. In performing the duties of office, the executive mayor must 3 MEC for the Department of Welfare v Kate 2006 (4) SA 478 (SCA). 4 Para 30. 5 Meadow Glen Home Owners Association & others v City of Tshwane Metropolitan Municipality & another [2015] 1 All SA 299 (SCA) paras 20-22 and 30. monitor the management of the municipality‟s administration6 and must oversee the provision of services to communities in the municipality in a sustainable manner.7 This makes plain that the executive mayor is ultimately responsible to ensure that the City‟s administration complies with its obligations towards residents in terms of a court order. [19] Section 55 of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act) provides that the municipal manager is the head of administration and the accounting officer of a municipality. Subject to the policy directions of the municipal council, the municipal manager is responsible and accountable for the management of the municipality‟s administration in accordance with the Systems Act and other legislation applicable to the municipality.8 The municipal manager is also responsible and accountable for the management of the provision of services to the local community in a sustainable and equitable manner.9 Moreover, as accounting officer he or she is responsible and accountable for all income, expenditure and assets of the municipality and for the discharge of all its liabilities.10 The municipal manager therefore heads the administration of a municipality and holds its purse. This necessarily means that the city manager has the power and the duty to ensure that the City complies with its obligations in terms of a court order.11 [20] In the founding affidavit the occupiers said that by virtue of powers delegated to him in terms of s 59 of the Systems Act, the director of housing of the City has the specific responsibility for the implementation of the housing programmes and projects in the City‟s area of jurisdiction. In the answering affidavits this evidence went unanswered and it must be taken to be admitted. 6 Section 56(3)(d) of the Structures Act. 7 Section 56(3)(e) of the Structures Act. 8 Section 55(1)(b) of the Systems Act. 9 Section 55(1)(d) of the Systems Act. 10 Section 55(2)(a) and (b) of the Systems Act. 11 See Meadow Glen, paras 23-24. [21] Before us the contention that the mandamus was wrongly granted, was based on two grounds. The first is that improper procedure was followed in respect of the functionaries and the second that policy considerations rendered a mandatory order inappropriate. [22] The argument on behalf of the functionaries is that the mandamus could only have been granted had the functionaries been joined in the eviction application from the beginning. I am unable to agree. A party that initiates legal proceedings against a municipality cannot be expected to act on the assumption that if the litigation is successful the municipality will not comply with the order against it. Changing Tides was under no obligation to cite the functionaries in the eviction application. Only when the City failed to comply with the order of Claassen J, did the need arise to look to the functionaries and that was the purpose of the enforcement application. There is no reason to believe that the outcome of the proceedings before Claassen J would have been any different had the functionaries then been parties to the eviction application. This is particularly borne out by the fact that the functionaries were parties to the proceedings before Lamont J and in fact consented to the order set out above. In the final analysis the question is whether the functionaries were prejudiced in a manner that could not be avoided by an appropriate order as to postponement and/or costs. No prejudice to the functionaries was pointed out to us and I find none. [23] In respect of policy considerations it was argued that the mandamus has the potential of discouraging competent persons from taking up senior positions in local government. It was also said that senior officials in local government should not have to perform their multiple complex tasks with the sword of committal for contempt of court hanging over them and that that could also unduly influence the priority in which functions are performed. With reference to para 35 of Meadow Glen, counsel argued that on-going oversight by the court of the implementation of its orders was a preferable alternative to the „blunt instrument‟ of committal for contempt of court. He provided a written proposal indicating how such post-order supervision by the court could take place. As I understand it, what is envisaged by the proposal is a series of „post-trial conferences‟ presided over by a judge specially allocated to oversee the implementation of the order, followed, in the event of that being unsuccessful, by „pre-contempt conferences‟ before the same judge. On the view that I take of the matter, it is not necessary to consider the practicality or appropriateness of such proposal. [24] This submission must be considered in the light of two factors. First, the occupiers did not claim an order that the functionaries be committed for contempt of court. They obtained an order that obliges the functionaries to fulfil their own statutory obligations to take the steps necessary to ensure that the City provides temporary shelter to the occupiers. The functionaries are not required to provide the shelter themselves. Contempt of court is committed when a person wilfully and mala fide disobeys an order binding on him or her. If the functionaries address the provision of temporary shelter to the occupiers diligently and in good faith, they would not be guilty of contempt of court even if their efforts prove to be unsuccessful. Secondly, on appeal the test is not whether a possible alternative remedy was available, but whether this court can be convinced that the court a quo erred in granting the relief claimed before it. [25] In my view, however, the decisive consideration is the principle of public accountability. It is a founding value of the Constitution12 and central to our constitutional culture.13 In terms of s 152(1)(a) of the Constitution the objects of local government include to provide accountable government for local communities. Section 6(1) of the Systems Act provides that the municipality‟s administration is governed by the democratic values and principles embodied in s 195(1) of the Constitution. Section 195(1)(f) of the Constitution specifically states that public administration must be accountable. In terms of s 6(2)(b) of the Systems Act the administration of a municipality must facilitate a culture of public service and accountability amongst staff. 12 Section 1(d) of the Constitution. 13 Olitzki Property Holdings v State Tender Board & another 2001 (3) SA 1247 (SCA) para 31. Constitutional accountability may be appropriately secured through the variety of orders that the courts are capable of making, including a mandamus.14 [26] By 9 April 2013 the City had for a period of nearly a year consistently and without proper explanation failed to comply with court orders that it had consented to. The functionaries are statutorily obliged to see to the implementation of the orders made against the City. Satchwell J correctly concluded that the time had come for the functionaries to be held accountable in terms of the Constitution. In my view the appeal against the mandamus must fail. The reporting order [27] The reporting order was made mero motu. It was not supported with any enthusiasm before us by any of the respondents. The implementation of the eviction order was made subject to the provision of temporary shelter to the occupiers by the City. The City had at all times accepted that it was obliged to provide the occupiers with temporary shelter. Therefore, when the matter came before Satchwell J, only the nature and location of the temporary shelter to be provided to the occupiers remained in issue between the City, the occupiers and Changing Tides. Paragraph 3(ii) of the order of the court a quo required a report as to exactly that. Nevertheless the reporting order obliges the City to „provide full and complete answers‟ to a wide range of detailed questions pertaining to the historic, current and future performance of the City‟s general obligation to provide accommodation to evictees. What is more, in terms of para 32 of the judgment the answers had to be provided irrespective of whether the temporary shelter was in fact provided in terms of para 3 of the order. The reporting order transcends the issues before the court a quo to such an extent that it cannot be countenanced. [28] Objectively the reporting order conveys an intention to give directions to the City in respect of what is required to comply with its constitutional obligations to provide temporary accommodation to homeless persons in 14 Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) para 21. general. The questions require the City to answer to the notions of the court as to the manner in which the obligations could or should be complied with. I agree with counsel for the City that the reporting order infringes the principle of separation of powers and for that reason too, cannot stand.15 [29] It follows that the appeal succeeds only to the extent that para 2 of the order of the court a quo is set aside. In this event the occupiers and Changing Tides asked only for a further order that the appellants pay the costs of appeal. The reporting order was of course not dealt with in the papers and attracted limited attention in argument on appeal. There is no doubt that the appeal would have proceeded even if the respondents had abandoned reliance on the reporting order. I do not consider that the setting aside of the reporting order warrants any costs order in favour of the appellants. [30] The following order is made: 1 The appeal succeeds only to the extent that para 2 of the order of the court a quo is set aside. 2 The appellants are ordered to pay the costs of the appeal, including the costs of two counsel where so employed. _______________________ C H G VAN DER MERWE ACTING JUDGE OF APPEAL 15 See National Treasury & others v Opposition to Urban Tolling Alliance & others 2012 (6) SA 223 (CC) paras 65-66. APPEARANCES: For Appellants: A Dodson SC (with him I B Currie) Instructed by: Kunene Ramapala Botha Law Firm, Sandton Claude Reid Inc, Bloemfontein For First to 182nd Respondent: P Kennedy SC (with him S Wilson) Instructed by: Socio-Economic Rights Institute of South Africa/SERI Law Clinic, Johannesburg Webbers, Bloemfontein For 183rd Respondent: S Grobler Instructed by: Esthè Muller Inc, Three Rivers Kramer Weihmann Joubert, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 18 March 2015 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY & OTHERS v P HLOPHE & OTHERS Changing Tides Properties 74 (Pty) Ltd (Changing Tides) is the owner of a building situated in the centre of Johannesburg. The building is unlawfully occupied by approximately 183 poor and homeless persons (the occupiers). Changing Tides obtained an order of eviction of the occupiers from the building. The eviction order was to take effect only after the City of Johannesburg Metropolitan Municipality (the City) provided the occupiers with temporary shelter. The City consented to orders of the high court to do so, but for a period of approximately a year consistently failed to comply with the orders without proper explanation. The high court accordingly granted an order obliging the executive mayor, city manager and director of housing of the City to ensure that the City complies with the orders to provide temporary shelter to the occupiers. Today the SCA dismissed an appeal against this order. The SCA held that the executive mayor, city manager and director of housing are statutorily obliged to ensure compliance by the City with the orders against it and that the order against them was competent and appropriate. --ends--

3421

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 410/2019 In the matter between: INVESTEC BANK LIMITED Appellant and ERF 436 ELANDSPOORT (PTY) LTD First Respondent CECILIA JOUBERT NO Second Respondent ERF 1081 ARCADIA (PTY) LTD Third Respondent REMAINING EXTENT 764 BROOKLYN (PTY) LTD Fourth Respondent ERF 22 HILLCREST (PTY) LTD Fifth Respondent Neutral citation: Investec Bank Limited v Erf 436 Elandspoort (Pty) Ltd and Others (410/2019) [2020] ZASCA 104 (16 September 2020) Coram: Petse DP, Saldulker, Dambuza and Plasket JJA and Poyo-Dlwati AJA Heard: 31 August 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 09h45 on 16 September 2020. Summary: Prescription Act 68 of 1969 – s 14 of the Act – whether series of payments in terms of agreement between creditor and debtor were acknowledgements of liability that interrupted prescription. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Fabricius J sitting as court of first instance): 1. The appeal succeeds with costs, including the costs of two counsel where employed. 2. The order of the court below is set aside and replaced with the following: ‘1. It is declared that the debt owed by the defendants to the plaintiff, as formulated in the particulars of claim, had not prescribed when summons was served on 21 January 2011. 2. The costs of the hearing of 18 to 21 February 2019 are to be paid by the first, second, third, fifth and sixth defendants jointly and severally. Those costs shall include the costs of two counsel. 3. The action is postponed sine die in respect of the remainder of the issues in dispute.’ JUDGMENT Plasket JA (Petse DP, Saldulker and Dambuza JJA and Poyo-Dlwati AJA concurring) [1] The issue for decision in this appeal is whether a debtor acknowledged its liability to a creditor and, in this way, interrupted the running of prescription. In a trial on this separated issue, Fabricius J, in the Gauteng Division of the High Court, Pretoria, held that a claim by the appellant, Investec Bank Limited (Investec), against the first respondent, Erf 436 Elandspoort (Pty) Ltd (Erf 436) as principal debtor, and the remaining respondents as sureties, had prescribed. Flowing from this finding, he dismissed Investec’s claim with costs, but granted it leave to appeal to this court. [2] At the commencement of the appeal, Investec moved an application for condonation for the late filing of the record and for the re-instatement of the appeal which had lapsed. The application was not opposed. Condonation was duly granted and the appeal was re-instated. We then proceeded to hear the appeal. Background [3] In February 2000, Investec advanced a loan to Erf 436. It was secured by a notarial mortgage bond, the subject of which was a notarial lease for a period of 50 years in respect of a commercial property in Pretoria concluded by Erf 436 as lessee and the South African Rail Commuter Corporation (the SARCC) as lessor. The loan agreement contained a tripartite agreement between Investec, Erf 436 and the SARCC in terms of which an option was granted to Investec to replace Erf 436 as lessee in the event of Erf 436 defaulting on its obligations to the SARCC. [4] Erf 436 defaulted about two and a half years later. The lease was cancelled by an order of court on 21 August 2002. This rendered Investec’s security worthless. On 10 September 2002, Investec demanded, as it was entitled to do following Erf 436’s default, payment by Erf 436 within seven days of the full outstanding balance of the loan. It is not in dispute that prescription in respect of this debt began to run on 17 September 2002, the date on which payment was due. [5] Investec then exercised its option and concluded a lease with the SARCC. In terms of an agreement between Investec and Erf 436, the latter continued to manage the property and collect rental from sub-tenants. These amounts were credited to Erf 436’s loan account with Investec. This arrangement remained in place until about July 2003. The parties also agreed that they would make efforts to sell Investec’s rights in terms of the lease with a view to the purchase price being used to settle Erf 436’s loan obligation. [6] A second agreement between Investec and Erf 436 was concluded in about June 2003. In terms of this agreement, Investec took over the function from Erf 436 of managing the property and collecting rental from sub-tenants. The income collected by Investec was similarly allocated to the repayment of Erf 436’s loan. This arrangement remained in place from 1 July 2003 until 1 July 2009 when Investec sold its rights as lessee to an entity called Johnny Prop (Pty) Ltd (Johnny Prop). After the sale, an amount of R2 999 459.51 was credited to Erf 436’s loan account. [7] After this amount had been credited, Erf 436’s liability for the outstanding balance of the loan was, according to Investec, R3 979 184.50. It claimed this amount from Erf 436 and the sureties in a summons served on 21 January 2011. [8] As the passage of time between the issue of summons and this appeal will attest, the dispute between the parties has raged for a number of years. It has included a foray to this court on the issue of whether the prescription period in respect of the disputed debt was 30 years or three years. For present purposes, however, all that need be said is that the summons was met once again with a special plea of prescription (as well as a plea over that is not relevant to this appeal). [9] In its replication, Investec pleaded that, on the basis of the payments made to reduce Erf 436’s loan and various statements made in letters on behalf of Erf 436, it made a series of acknowledgments of liability. The result was that ‘insofar as prescription may have commenced during September 2002, it was interrupted by express or tacit acknowledgments of liability on the part of [Erf 436] on the dates that each of the payments . . . were effected and on the dates when each of the letters . . . was addressed’. The evidence [10] The factual background that I have sketched is largely not in dispute. Indeed, Erf 436 and the sureties closed their case on the separated issue without adducing any evidence. The only evidence was tendered by four witnesses called by Investec who testified about the agreements I have referred to, the payments made to reduce Erf 436’s indebtedness to Investec and certain correspondence between the two. [11] The evidence of Mr W M Oosthuizen, a banker employed by Investec at the time, and Mr Carlos Sanchez, an in-house legal advisor employed by Investec, in particular, establishes the facts that I have set out above. Their evidence confirms that after Investec stepped into Erf 436’s shoes as a lessee, Erf 436 continued to collect rental from sub-tenants until mid-2003, but Investec collected the rental itself thereafter. In both instances, however, in terms of the agreements between Investec and Erf 436, these amounts were allocated to the repayment of Erf 436’s loan. So, for instance, during the period from the cancellation of Erf 436’s lease until 30 September 2003, Erf 436 paid a total of R830 896.91 towards its loan repayment from rental collected from sub-tenants. At the same time, both Investec and Erf 436 made efforts to find a purchaser for Investec’s rights in the property. The proceeds of the sale were also to be allocated to the reduction of Erf 436’s loan. [12] The existence of the agreements between Investec and Erf 436 is confirmed by a series of letters written by one of Erf 436’s directors, Mr Pierre Joubert. It is evident that Joubert took an active interest in the management of the property. He also attempted to find sub-tenants for the property and a purchaser of Investec’s rights. Even when Investec took over the management of the property, Joubert continued to involve himself in the day-to-day running of the property. His reason for doing so was to protect Erf 436’s interests in respect of the agreement in terms of which rental would be used to reduce Erf 436’s loan, and to ensure a good purchase price when Investec’s rights in the property were sold. [13] So, for example, by letter dated 12 March 2003 addressed to Mr David Hack, he offered to sell ‘the leasehold properties’ and the duty-free filling station business that he and his fellow director, Mr Louis Vivier, operated on the property. The purchase price for both was, he said, R5.6 million, being ‘the outstanding amount of the Investec Bank Bond’. A copy of this letter was sent to Investec. [14] In a letter to Investec dated 7 May 2003, Joubert reported on the fact that negotiations with Hack had come to naught but that his efforts to sell Investec’s rights continued and that the building was ‘virtually fully let’. He also said that Erf 436 ‘continued to manage and operate the premises as a whole and has been honouring and paying the Investec Bank bond every month’. He proposed that Investec allow Erf 436 to continue managing the property on Investec’s behalf for the next nine months and that he would ensure certain outcomes, including that ‘the loan repayments to Investec Bank (account 221162) are paid’. [15] Despite this offer, Investec decided to continue with its plans to take over the management of the property, to manage the sub-leases, pay its creditors and credit what was left to the repayment of Erf 436’s loan. It was agreed between Investec and Erf 436 that this would happen. Joubert appears to have been rather reluctant to give up his control over the property and he continued to look for purchasers and sub- tenants and to involve himself generally in the management of the property. He appears to have dragged his heels in respect of the hand-over of management to Investec. [16] Joubert’s reluctance appears clearly from a letter dated 30 May 2003, in which he asked Investec to allow Erf 436 to continue with its management of the property. He said that ‘[w]e would also in any event like to be assured that the monthly rentals collected will be applied towards the monthly payment of our loan with Investec’. [17] In a letter to Investec’s attorney dated 13 June 2003, Joubert described Investec’s decision as ‘very unreasonable’. One of the reasons he gave for wishing to continue to manage the property was to ensure that rental collected was, indeed, applied to the repayment of Erf 436’s loan. He confirmed that Erf 436 was ‘diligently paying our loan commitment to Investec Bank’. [18] In January 2004, a meeting was held by Oosthuizen and Joubert to discuss the possible sale of Investec’s rights to a property developer. This sale did not eventuate, but on 3 February 2004 Joubert wrote a letter to Investec’s attorney in which he confirmed a proposal additional to two proposals discussed at the meeting. This proposal involved a sale of Investec’s rights back to Erf 436, with transfer being delayed until after Erf 436 had repaid its loan. He said:1 ‘As far as the repayment/discharge of [Erf 436’s] bond is concerned (R5 300 000), we must naturally have one or other agreement in place between [Erf 436] (or its nominee) that 1 My translation. basically stipulates that all income from the property, whether rental income or expropriation money or [from] a purchase transaction are credited to [Erf 436].’ [19] Joubert had attached to the letter what appear to be notes made in preparation for his meeting with Oosthuizen. Two other possible proposals were contained in the notes. What stands out in respect of all three proposals is that, for Erf 436, they all involved mechanisms for the repayment of its loan, which Joubert admitted was about R5.3 million at that stage. [20] In a letter dated 2 November 2005, written by Joubert to Investec in respect of the sale of property belonging to another of his entities, Erf 225 Edenburg, (Pty) Ltd, he proposed that some of the proceeds be allocated to the repayment of Erf 436’s loan. Oosthuizen testified that Investec gave its approval to the proposal, the transaction proceeded and, on 29 March 2006, an amount of R1 350 000 was credited to Erf 436’s loan. [21] Oosthuizen and Sanchez testified about the eventual sale of Investec’s rights to Johnny Prop. Because of various difficulties, the sale was delayed and it was only in 2009 that payments were made to reduce Erf 436’s loan. An amount of R430 000 was paid on 30 June 2009 and R2 569 459.61 was paid on 1 July 2009. That left a balance owing on the latter date, according to Sanchez, of R3 523 036. [22] Oosthuizen’s evidence was that Investec and Erf 436 had a difficult relationship at times but they had worked together to find a solution to their common problem of how Erf 436 was going to repay its loan. While Investec could simply have issued summons, taken judgment and executed on it, he explained that Investec decided that it would be in the best interests of both parties to try to manage the situation as they did. During the entire process, Joubert never once denied Erf 436’s liability to Investec. On the contrary, he admitted that liability on a number of occasions. [23] Joubert died during the second half of 2009. Various meetings with his wife, who had been appointed the executrix of his estate, produced no agreement as to how Erf 436 would pay the outstanding balance. As a result, summons was issued on 21 January 2011. The Prescription Act 68 of 1969 [24] In terms of s 10(1) of the Prescription Act, ‘a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt’. Section 10(2) provides that when a principal debt is extinguished by prescription, so are any subsidiary debts, such as suretyships. Section 11 lists the periods of prescription – ranging from 30 to three years – for a variety of types of debts. The parties have agreed that the period of prescription in this case is three years, and not 30 years, that issue having been decided by this court in Investec Bank v Erf 436 Elandspoort (Pty) Ltd and Others.2 [25] Subject to exceptions, s 12(1) provides that prescription begins to run ‘as soon as the debt is due’. Section 13 sets out a number of circumstances – such as when a creditor is a minor or a debtor is out of the country – that delay the running of prescription. [26] Section 14 of the Prescription Act, which is of application in this case, allows for the interruption of prescription. It provides: ‘(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor. (2) If the running of prescription is interrupted as contemplated in subsection (1), prescription shall commence to run afresh from the day on which the interruption takes place or, if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt from the date upon which the debt again becomes due.’ The interruption of prescription against a principal debtor automatically interrupts prescription against a surety.3 2 Investec Bank v Erf 436 Elandspoort (Pty) Ltd and Others [2017] ZASCA 128. See too Botha v Standard Bank of South Africa Ltd [2019] ZASCA 108; 2019 (6) SA 388 (SCA) paras 26-28. 3 Jans v Nedcor Bank Ltd [2003] ZASCA 15; 2003 (6) SA 646 (SCA) para 32. [27] The reason for rules relating to prescription was discussed by Marais AJ in Cape Town Municipality v Allie NO.4 He said: ‘Over the years the Courts and the writers on the law have sought to provide a rationale for the doctrine of prescription or the limitation of actions. It is unnecessary to burden this judgment with a discussion of the plausibility of the explanations which have been suggested. Whatever the true rationale may be, it cannot be denied that society is intolerant of stale claims. The consequence is that a creditor is required to be vigilant in enforcing his rights. If he fails to enforce them timeously, he may not enforce them at all. But that does not mean that the law positively encourages precipitate and needless law suits. It is quite plain that both at common law, and in terms of the Prescription Acts of 1943 and 1969, a creditor may safely forebear to institute action against his debtor if the debtor has acknowledged liability for the debt. Lubbers and Canisius v Lazarus 1907 TS 901; De Beer v Gedye and Gedye 1916 WLD 133. And it seems right that it should be so. Why should the law compel a creditor to sue a debtor who does not dispute, but acknowledges, his liability?’ [28] The policy underlying prescription in general, as well as the exception that is created by s 14, were explained in Murray & Roberts Construction (Cape) (Pty) Ltd v Upington Municipality:5 ‘Although many philosophical explanations have been suggested for the principles of extinctive prescription . . . its main practical purpose is to promote certainty in the ordinary affairs of people. Where a creditor lays claim to a debt which has been due for a long period, doubts may exist as to whether a valid debt ever arose, or, if it did, whether it has been discharged . . . The alleged debtor may have come to assume that no claim would be made, witnesses may have died, memories would have faded, documents or receipts may have been lost, etc. These sources of uncertainty are reduced by imposing a time limit on the existence of a debt, and the relevant time limits reflect, to some extent, the degree of uncertainty to which a particular type of debt is ordinarily subject (s 11 of the Act). The same considerations which provide a justification for extinctive prescription also suggest that the time limits should not be immutable. Where the creditor takes judicial steps to recover the debt, and thereby to remove all uncertainty about its existence, prescription should obviously not continue running while the law takes its course (s 15 of the Act). Moreover, s 14 of the Act provides that the running of prescription is interrupted by an express 4 Cape Town Municipality v Allie NO 1981 (2) SA 1 (C) at 5G-H. 5 Murray & Roberts Construction (Cape) (Pty) Ltd v Upington Municipality 1984 (1) SA 571 (A) at 578F- 579B. See too KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd [2017] ZASCA 98; 2017 (6) SA 55 (SCA) paras 13-17; Bradford & Bingley PLC v Rashid [2006] UKHL 37 para 3. or tacit acknowledgement of liability by the debtor. The reason is clear – if the debtor acknowledges liability there is no uncertainty about the debt. No purpose would accordingly be served by requiring the creditor to interrupt prescription by instituting legal proceedings for the recovery of the debt.’ [29] Cape Town Municipality v Allie NO6 concerned whether the Cape Town Municipality had acknowledged liability and so had interrupted prescription in terms of s 14 of the Act in relation to Ms Allie’s claim. In dealing with s 14(1) of the Act, Marais AJ identified what he described as a number of self-evident aspects of the section. They were:7 ‘Firstly, I do not think the acknowledgment of liability need amount to a fresh undertaking to discharge the debt. "I admit I owe you R100" is manifestly an acknowledgment of a liability to pay R100 but it is not a fresh or new undertaking to pay it . . . Secondly, full weight must be given to the Legislature's use of the word "tacit" in s 14(1) of the Act. In other words, one must have regard not only to the debtor's words, but also to his conduct, in one's quest for an acknowledgment of liability. That, in turn, opens the door to various possibilities. One may have a case in which the act of the debtor which is said to be an acknowledgment of liability, is plain and unambiguous. His prior conduct would then be academic. On the other hand, one may have a case where the particular act or conduct which is said to be an acknowledgment of liability is not as plain and unambiguous. In that event, I see no reason why it should be regarded in vacuo and without taking into account the conduct of the debtor which preceded it. If the preceding conduct throws light upon the interpretation which should be accorded to the later act or conduct which is said to be an acknowledgment of liability, it would be wrong to insist upon the later act or conduct being viewed in isolation. In the end, of course, one must also be able to say when the acknowledgment of liability was made, for otherwise it would not be possible to say from what day prescription commenced to run afresh . . . Thirdly, the test is objective. What did the debtor's conduct convey outwardly? I think that this must be so because the concept of a tacit acknowledgment of liability is irreconcilable with the debtor being permitted to negate or nullify the impression which his outward conduct conveyed, by claiming ex post facto to have had a subjective intent which is at odds with his outward conduct . . . 6 Note 4. 7 At 7B-8G. See too Agnew v Union and South West Africa Insurance Company Ltd 1977 (1) SA 617 (A) at 622H-623C; Petzer v Radford (Pty) Ltd 1953 (4) SA 314 (N) at 317H-318B; Benson and Another v Walters and Others 1984 (1) SA73 (A) at 86H-87B; Standard Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd 1995 (4) SA 510 (C) at 556E-557D. Fourthly, while silence or mere passivity on the part of the debtor will not ordinarily amount to an acknowledgment of liability, this will not always be so. If the circumstances create a duty to speak and the debtor remains silent, I think that a tacit acknowledgment of liability may rightly be said to arise . . . Fifthly, the acknowledgement must not be of a liability which existed in the past, but of a liability which still subsists.’ [30] Pentz v Government of the Republic of South Africa8 concerned whether an admission made by a person to a policeman constituted an acknowledgement of liability for purposes of interrupting prescription in respect of a claim by a government department. The court found, in the first place, that the person had not acknowledged liability. Secondly, the court held that, in any event, for an acknowledgement of liability to interrupt prescription, it had to have been given by a debtor to a creditor or the creditor’s agent; and the policeman was not the agent of the government department concerned.9 [31] Unsurprisingly, the converse also holds true. The acknowledgement of liability, in order to effectively interrupt prescription, can be made by either the debtor or his or her agent. In First Consolidated Leasing Corporation (Pty) Ltd v Servic SA (Pty) Ltd and Another10 payments were made by a third party to the creditor to reduce what was owed by the debtor concerned as well as other creditors of the third party. It had been assumed that the third party had acted as the debtor’s agent but, as Goldstone J found, there was no evidence to establish that agency. Indeed, the only evidence was that of the second defendant who said that he had had no knowledge of the payments and that no arrangement was in place to the effect that the third party would pay on behalf of the debtor. That being so, the creditor had failed to discharge the onus to prove that the payments constituted an acknowledgement of liability by the debtor, with the result that prescription had not been interrupted.11 Has Investec’s claim prescribed? 8 Pentz v Government of the Republic of South Africa 1983 (3) SA 584 (A). 9 At 594A-E. 10 First Consolidated Leasing Corporation (Pty) Ltd v Servic SA (Pty) Ltd and Another 1981 (4) SA 380 (W). 11 At 383F-384E. [32] In determining whether Erf 436 acknowledged liability either expressly or tacitly, and when, it is necessary to consider not only what Joubert said but also what he did. His words and conduct must be viewed holistically and in their proper context. That, it seems to me, is particularly so in respect of the monthly payments of the rental of sub- tenants towards the loan and the payment of the purchase price for Investec’s rights by Johnny Prop. Viewed in isolation they tell one nothing but viewed in their broader context, with particular reference to the two agreements between Investec and Erf 436, a picture emerges. [33] When Erf 436 was responsible for the collection of the sub-tenants’ rental, its payments of those amounts towards the repayment of its loan constituted a series of tacit acknowledgements of liability. This period ended with a payment on 30 September 2003. Furthermore, during this period, Joubert, on behalf of Erf 436, wrote two letters, dated 7 May 2003 and 13 June 2003, in which he expressly acknowledged liability. The effect of the payments and the letters was that prescription was interrupted on the date of each payment and the date of each letter and commenced running again from those dates. As the last payment during this first period was made on 30 September 2003, the running of prescription was extended to 30 September 2006, with the last day for serving the summons being 29 September 2006. [34] It is clear from the evidence and from his letters that Joubert was unhappy with Investec’s decision to take over the management of the property, but he agreed to it nonetheless. That agreement had two important components that give context to everything that followed. First, it was agreed that Investec would collect rental from sub-tenants and allocate those amounts to the repayment of Erf 436’s loan. Secondly, it was agreed that endeavours would be made to find a purchaser for Investec’s rights in the property and that the purchase price would be credited to Erf 436’s loan. [35] During the period between Investec taking over the management of the property and the final payment of the purchase price for Investec’s rights into Erf 436’s account, Joubert, in a series of letters, consistently acknowledged Erf 436’s liability to Investec. A theme that runs through these letters is that irrespective of who was, in his view, to manage the property, the rental collected from the sub-tenants and the purchase price in respect of the sale of Investec’s rights in the property would be allocated towards the repayment of Erf 436’s loan. [36] One payment requires specific mention. On 29 March 2006, before the claim had prescribed, an amount of R1 350 000 was credited to Erf 436’s account. That payment was made by Erf 225 Edenburg (Pty) Ltd, an entity of which Joubert was a director. In a letter to Investec dated 2 November 2005, he had informed Investec of a transaction involving Erf 225 and said that ‘[w]e have analysed and refined the transaction regarding the actual surplus available to be deposited into the bond account (number 221162) of [Erf 436] and calculate that an amount of R1.35 million would be a more accurate amount’. The evidence of Oosthuizen was that Investec had agreed with Joubert that Erf 225 would pay the surplus of a sale of property towards Erf 436’s indebtedness to Investec. As Joubert was a director of both entities, knowledge of, and agreement to, the payment must be imputed to Erf 436. The inference that Erf 225 acted as Erf 436’s agent is irresistible. That payment was a tacit acknowledgement of liability by Erf 436, with the effect that the running of prescription was extended to 29 March 2009. [37] On 21 May 2007, another tacit acknowledgement of liability was made by Erf 436 when Joubert queried the mechanics of the monthly payments into Erf 436’s account. This was a tacit acknowledgement of liability because the very basis of the query was an acceptance by Erf 436 of a liability towards Investec (that it had never denied and had acknowledged consistently); and it discloses knowledge on the part of Erf 436 that payments of rental collected from sub-tenants by Investec had (since mid-2003) been paid towards reducing Erf 436’s loan liability. Far from protesting that Erf 436 was not liable to Investec, Joubert sought details of how the VAT component of the rentals was dealt with. The effect of this letter was to extend the life of Investec’s claim for a further three years from the date of the letter – until 21 May 2010. [38] The letter of 21 May 2007 also answers the question as to the effect of Investec’s monthly payments to reduce Erf 436’s indebtedness to it. It does so by confirming Erf 436’s agreement to the arrangement made in 2003 in terms of which the payments were made. In fairness to Joubert, although he was unhappy with the arrangement, he never once denied the agreement or Erf 436’s liability to Investec. Erf 436’s agreement to the arrangement and, to put it at its lowest, the complete absence of any words or conduct on its part that could be construed as a denial of liability – its failure, in other words, to speak out if it denied liability – carry with it a tacit acknowledgement of liability every month when its account was credited: it knew and accepted that these payments were made monthly in order to reduce its admitted and current indebtedness to Investec in accordance with a process to which it had agreed. [39] The last monthly payment was made on 17 July 2008. Prescription was interrupted on that day and immediately began to run again. The effect was that the life of Investec’s claim was extended, and it was required to serve its summons by 16 July 2011 at the latest. As the various acknowledgements of liability that I have identified kept the claim alive and summons was issued on 21 January 2011, well before 16 July 2011, that appears to be the end of the matter. For the sake of completeness, however, I shall deal with the effect of the sale of Investec’s rights in the property. [40] From the outset, it was agreed that Investec’s rights in the property would be sold and the proceeds allocated towards the payment of Erf 436’s loan. From Oosthuizen’s evidence and from Joubert’s letters, it is evident that Joubert was particularly active in trying to find a purchaser. That is nowhere clearer than in his letter to Investec of 12 October 2006 when he expressed shock on learning that Investec had ‘sold’ the property without reference to him, and for a price that he considered to be unreasonably low. He spoke of Erf 436’s ‘vested interest’ in the purchase price because ‘it has a direct influence on our bond account No. 221161’. He also referred to potential purchasers who were prepared to pay more. [41] What is clear from this letter – and this is consistent with Joubert’s position throughout – is that he was aware that the purchase price would be used to reduce Erf 436’s indebtedness to Investec, as agreed between them in 2003. Viewed in this context, his knowledge of that fact and his acceptance without demur of the payments made on 29 June 2009 and 1 July 2009 were tacit acknowledgements of liability on the part of Erf 436. Once again, his failure to query them is telling and is consistent with Erf 436’s position throughout – its acceptance that it was liable to Investec in respect of the loan. The result of these tacit acknowledgements of liability is that prescription was yet again interrupted on the dates of payment. Summons had to be served by 30 June 2012 at the latest but was served well within time on 21 January 2011. [42] It is necessary to say something of the finding of Fabricius J that the payments of rental after September 2003 and of the purchase price of Investec’s rights in the property were not tacit acknowledgements of liability. His reasoning was that Erf 436 cannot be said to have acknowledged liability because neither the sub-tenants whose rental was credited to Erf 436’s account or Johnny Prop who bought Investec’s rights were Erf 436’s agents. In my view, questions of agency do not arise, save in the case of Erf 225’s payment on behalf of Erf 436, referred to above. [43] The difficulty I have with the reasoning is that it ignores the context in which the payments were made. That context was an agreement between Investec and Erf 436 that Investec would collect rental from sub-tenants and credit Erf 436 with the nett amounts so collected every month; and that when Investec’s rights were sold, the purchase price would likewise be credited to Erf 436’s account. The basis for the acknowledgements of liability in respect of each of these payments does not rest on agency, but on the agreement entered into by the parties as to how the loan would be repaid. The First Consolidated Leasing Corporation case12 is thus not of application. [44] There is no merit in an argument advanced on behalf of Erf 436 that any acknowledgements by Erf 436 were not acknowledgements of a present liability but of a past or, perhaps, a conditional liability. Reliance was placed on Benson and Another v Walters and Others.13 This argument fails on two counts. [45] First, the facts of Benson differ markedly from this matter. In Benson, a person’s attorney had written to his ex-attorney to say that the client had paid R5 000 in respect of the former attorney’s fees and disbursements and undertook ‘payment of whatever 12 Note 10. 13 Note 7 at 86H-87B. shortfall you are able to establish on taxation’. Van Heerden JA held that the letter contained ‘a conditional undertaking to pay’ but was not ‘an admission of existing liability’.14 What the writer intended to convey was the fact that ‘he did not know whether an amount of more than R5 000 would be taxed and therefore did not know whether Benson was liable to make a payment to Walters, but that, if a liability did exist, his firm would pay the amount thereof’.15 This was not an acknowledgement of liability that could interrupt prescription. In the present matter, there has been no suggestion that the amount owed to Investec by Erf 436 was anything but a current debt and there was likewise no suggestion of any conditions attaching to its payment or its quantification. At all times in his correspondence, Joubert accepted that Erf 436 owed money to Investec, even quantifying the amount in some of his letters. [46] Secondly, it was argued that Joubert may have believed that the debt had been discharged. That runs counter to the evidence. There was never any doubt that when the last tacit acknowledgement of liability was made, Erf 436 was still indebted to Investec. Joubert, the inveterate letter-writer, never once in any of his many missives suggested that the debt had been paid or was anything but a current debt. [47] The result is that Investec’s claim has not prescribed. The appeal must consequently succeed. The order [48] I make the following order: 1. The appeal succeeds with costs, including the costs of two counsel where employed. 2. The order of the court below is set aside and replaced with the following: ‘1. It is declared that the debt owed by the defendants to the plaintiff, as formulated in the particulars of claim, had not prescribed when summons was served on 21 January 2011. 14At 87C-D. 15 At 87F. 2. The costs of the hearing of 18 to 21 February 2019 are to be paid by the first, second, third, fifth and sixth defendants jointly and severally. Those costs shall include the costs of two counsel. 3. The action is postponed sine die in respect of the remainder of the issues in dispute.’ ______________________ C Plasket Judge of Appeal APPEARANCES For the appellant: F J Erasmus SC Instructed by: VDT Attorneys, Pretoria Peyper Attorneys, Bloemfontein For the respondents: H F Oosthuizen SC Instructed by: Nothling Attorneys, Pretoria De Villiers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 16 September 2020 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Investec Bank Limited v Erf 436 Elandspoort (Pty) Ltd and Others (410/2019) [2020] ZASCA 104 (16 September 2020) MEDIA STATEMENT The Supreme Court of Appeal (SCA) today upheld the appeal of Investec Bank Limited (Investec) against Erf 436 Elandspoort (Pty) Ltd (Erf 436) and four other respondents. The central issue in the appeal was whether a debt in relation to which Investec had issued summons against Erf 436, as principal debtor, and the remaining respondents, as sureties, had prescribed. The court found that the debt had not prescribed because prescription had been interrupted by a series of payments and a number of letters in which Erf 436’s liability had been acknowledged. Investec had lent money to Erf 436 to enable it to enter into a notarial lease with the South African Rail Commuter Corporation (the SARCC) in respect of a commercial property in Pretoria. Erf 436 had defaulted, the SARCC had cancelled the lease and Investec had demanded payment of the full amount outstanding in respect of the loan. Thereafter, Investec had, in terms of a tripartite agreement entered into with the SARCC and Erf 436 stepped into Erf 436’s shoes as lessee of the property. The purpose was to ensure that Erf 436’s loan could be repaid from rental paid by sub-tenants and eventually by the sale of Investec’s rights in the property to a third party. It was agreed between Investec and Erf 436 that initially Erf 436 would continue to manage the property and that rental paid by sub-tenants would be allocated to the payment of its loan. It was later agreed that Investec would take over the management of the property and similarly allocate rental payments to the repayment of Erf 436’s loan. Mr Pierre Joubert, a director of Erf 436 wrote a number of letters to Investec in which he acknowledged the liability of Erf 436 to Investec. Eventually, Investec’s rights in the property were sold to a third party and the purchase price was allocated towards the repayment of Erf 436’s loan. Investec then sued for the balance but their summons was met with a special plea of prescription. Investec pleaded in its replication that the payments of the sub-tenants’ rental and the purchase price, as well as the letters written by Joubert constituted express or tacit acknowledgements of liability that, in terms of s 14 of the Prescription Act 68 of 1969, had interrupted the running of prescription. The court held that the letters written by Joubert were express acknowledgements of liability that had the effect of interrupting prescription. It held that the payments, made with the knowledge of Erf 436 in terms of an agreement between it and Investec in order to pay its loan were tacit acknowledgements of liability that likewise interrupted the running of prescription. The result was that the debt had not prescribed.

4138

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 873/2022 In the matter between: UBUHLEBEZWE MUNICIPALITY APPELLANT and HIRALALL RAMSUNDER RESPONDENT Neutral citation: Ubuhlebezwe Municipality v Ramsunder (Case no 873/2022) [2023] ZASCA 165 (1 December 2023) Coram: GORVEN, MEYER and WEINER JJA and CHETTY and UNTERHALTER AJJA Heard: 10 November 2023 Delivered: 1 December 2023 Summary: Interdict – Final – Whether clear right established. Interpretation – National Building Regulations and Building Standards Act 103 of 1977 – s 4(1) read with the definitions of ‘erection’ and ‘erect’ in s 1. ORDER On appeal from: Kwa-Zulu Natal Division of the High Court, Pietermaritzburg (Phoswa AJ, sitting as court of first instance): The appeal is dismissed with costs. JUDGMENT Meyer JA (Gorven and Weiner JJA and Chetty and Unterhalter AJJA concurring): [1] The appellant, Ubuhlebezwe Municipality (the municipality), initiated motion proceedings in the Kwa-Zulu Natal Division of the High Court, Pietermaritzburg (the high court) against the respondent, Mr Harilall Ramsunder (Mr Ramsunder), for an order interdicting him ‘from carrying out any building operations and/or renovations and/or improvements and/or restoration to the immovable property’ described as Erf 1, Stuarts town, situated at the corner of Main Road and Railway Street, Ixopo, Kwa- Zulu Natal (the property). On 2 February 2022, the high court (per Phoswa AJ) dismissed the application for a final interdict, with costs, including those of two counsel. The appeal is with leave of the high court. [2] First, the background facts.1 Mr Ramsunder had, at the time the proceedings were initiated, been in occupation of the property for approximately twenty-five years, since 1996. The property was initially owned by Transnet Ltd (Transnet). Mr 1 Insofar as there are material disputes of fact on the papers, I must accept the facts alleged by Mr Ramsunder ‘unless they constituted bold or uncreditworthy denials or were palpably implausible, far- fetched or so clearly untenable that they could safely be rejected on the papers. . . A finding to that effect occurs infrequently because courts are always alive to the potential for evidence and cross- examination to alter its view of the facts and the plausibility of the evidence’. Media 24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd [2016] ZASCA 119; [2016] 4 All SA 311 (SCA); 2017 (2) SA 1 (SCA) at 18A-B. That stringent test has not been satisfied in casu. Ramsunder’s occupation of the property during 1996 arose from a lease agreement concluded between him and Transnet. The lease was to endure for an initial period of three years up to 1999, and thereafter upon renewal, for a further period of three years from 1999 to 2002. [3] With Transnet’s approval, Mr Ramsunder effected improvements to the property to house a supermarket, liquor store and a fruit and vegetable business. He caused the old buildings on the property to be demolished and new buildings were erected to house his businesses. The municipality approved the plans and specifications. [4] Although Mr Ramsunder had been involved in negotiations to acquire ownership of the property, Transnet, unbeknown to him, sold the property to the predecessor of the appellant, the Ixopo Transitional Local Council. Ownership passed to the municipality on 25 May 2000. A new lease agreement was concluded between the municipality and Mr Ramsunder, in terms of which he continued to occupy the property. [5] Negotiations ensued between Mr Ramsunder and the municipality with the aim that he acquire ownership of the property. Pursuant to an agreement in principle that he would purchase the property from the municipality for an amount of R450 000, the municipality granted him written authority to further improve the property. After the architectural plans, required by law, had been drawn and approved by the municipality, Mr Ramsunder caused a new supermarket, a warehouse, shops under the supermarket and steel structures over an existing store, a yard and taxi area to be constructed, comprising a total area of approximately 3 530m². [6] Finally, on 12 February 2004, a written sale agreement was concluded between the municipality and Mr Ramsunder for a total purchase consideration of R450 000. Prior to the passing of ownership to Mr Ramsunder, at a full council meeting of the municipality held on 4 February 2005, it was resolved: ‘1) That the sale of Spoornet Property, Portion A of Erf 1 and B of Erf 2 situated in Stuartson, Ixopo to Mr. H. Ramsunder was improper and illegal since it was in contrast with the objects of acquiring the property. 2) That the sale should be stopped and cancelled immediately. 3) That the Municipal Manager does the necessary to cancel the sale and advise Mr. H. Ramsunder of the council decision.’ Mr Ramsunder disputed the validity of the municipality’s unilateral attempt to cancel the sale. [7] The relationship between Mr Ramsunder and the municipality has become acrimonious since then. Matters could not be resolved, and on 20 September 2005, he commenced action proceedings in the high court, in which he claimed: ‘An order compelling the Defendant to take all steps necessary to transfer the properties referred to in Clause 1 of the Memorandum of Sale, dated 12 February 2004, between the Plaintiff and the Defendant, to the Plaintiff and to sign all documents and to take all steps necessary to give effect to this order within 30 days from the date of this order, failing which the Sheriff be and is hereby authorised and directed, to take all such steps and to sign all such documents on behalf of the Defendant to give effect to this order.’ [8] The municipality filed a plea in which it alleged that the sale is ‘voidable and unenforceable’ on grounds that are not presently relevant. It also instituted a conditional counter-claim in which it, inter alia, claimed Mr Ramsunder’s ejectment from the property. It denied the existence of a lease between itself and Mr Ramsunder, as alleged by him. Mr Ramsunder’s particulars of claim were then amended, to claim a lien based on the improvements which he had effected to the property. For reasons that are not presently relevant, Mr Ramsunder – according to him, erroneously – agreed to an order that the sale be declared invalid and of no force and effect. His enrichment claim and the municipality’s claim for his eviction were postponed sine die, and are presently pending. [9] During July 2021, widespread civil unrest started in Kwa-Zulu Natal and spread to Gauteng. It was accompanied by egregious loss of life, public violence, burglary and malicious damage to property. Mr Ramsunder was one of the unfortunate victims of the widespread unrest. The buildings on the property from which he was conducting his businesses were damaged and he could no longer conduct any business from these premises. It was imperative for him to undertake remedial construction to restore the buildings and recommence operating the businesses he had conducted. He had suffered great financial loss. His businesses employed approximately 90 persons and they have been left unemployed. [10] This gave the municipality another arrow in its bow to resist Mr Ramsunder’s enrichment claim. It maintained that the buildings on the property had been destroyed and burnt to the ground. Mr Ramsunder, on the other hand, presented evidence that although the property could not be occupied, some of the buildings were not damaged or the damage was minimal, and others were partially damaged. [11] In order to curtail further losses, Mr Ramsunder engaged the services of a construction company, RockSteel, to undertake the required remedial construction to restore the buildings on the property to their original state, in accordance with the previously approved plans and specifications. Mr Ramsunder’s evidence was as follows: that the municipality was aware of the damage to the property from at least 13 July 2021, when its officials conducted inspections of the extensive damage to the town; the municipality was aware since 3 September 2021 that remedial construction works were being undertaken at the property; no municipal inspectors attended the property and inspected the building construction from time to time; the remedial construction works were effected strictly in accordance with the approved plans and specifications; and that structural works were undertaken under the supervision of engineers employed by RockSteel. This evidence stands uncontroverted. No evidence was presented, inter alia, to the effect that there were any specifications originally approved for the construction of the buildings on the property that are outdated or no longer conform to best engineering and construction practice or principles. [12] Surprisingly, the municipality commenced the application proceedings, being the subject of this appeal, by way of urgency in the high court. Its application was issued by the registrar of the high court on 28 September 2021, and the matter was set down for hearing on 1 October 2021, affording Mr Ramsunder insufficient opportunity to oppose the application for interim relief. He thus only opposed the grant of final relief. One would have expected ‘a good constitutional citizen’2 rather to have 2 To borrow the phrase used by Cameron J in Merafong City Local Municipality v AngloGold Ashanti Limited [2016] ZACC 35; 2017 (2) BCLR 182 (CC); 2017 (2) SA 211 (CC) para 60. sent its municipal inspectors to attend the property and inspect the building construction from time to time. If there were compelling reasons to require amendments to the originally approved plans and specifications, to tell Mr Ramsunder so and offer to re-approve the originally approved plans and specifications. [13] Why then did the municipality instead rush to court to obtain an interdict? Mr Ramsunder’s answer to this question: ‘More disconcerting is the fact that the Applicant has tried to create the impression that I am a recalcitrant occupant who has no regard for the law. This is simply not true. To the contrary, it is the Applicant who is being opportunistic in attempting to constructively evict me due to the unforeseen unlawful riots that occurred. It does so in circumstances where it previously took no action to resolve the dispute between us, presumably because it was aware that it is liable to compensate me for the building I constructed before it is entitled to an order that I relinquish my possession of the leased premises. . . . The irresistible impression is that the Applicant intends on obtaining an indefinite interdict to obstruct my right to remain on and use the property solely to bolster its position in the pending litigation in which the parties’ rights will be determined.’ [14] There are three requisites for the grant of a final interdict, all of which must be present. They are: (a) a clear right enjoyed by the applicant; (b) an injury actually committed or reasonably apprehended; and (c) the absence of any other satisfactory remedy available to the applicant. These principles are trite and require no citation of authority. [15] The clear right upon which the municipality sought to rely, emanates from s 4(1) read with the definitions of the words ‘erection’ and ‘erect’ in s 1 of the National Building Regulations and Building Standards Act 103 of 1977 (the Act). Section 4(1) stipulates: ‘No person shall without the prior approval in writing of the local authority in question, erect any building in respect of which plans and specifications are to be drawn and submitted in terms of this Act.’ The words ‘erection’ and ‘erect’ are defined, thus: ‘“erection” in relation to a building, includes the alteration, conversion, extension, rebuilding, re-erection, subdivision of or addition to, or repair of any part of the structural system of, any building; and “erect” shall have a corresponding meaning.’ [16] The municipality contended that Mr Ramsunder was required to have new plans and specifications drawn and approved by the municipality, prior to the commencement of the remedial construction works on the property. Mr Ramsunder, on the other hand, contended that the 2004 approved plans and specifications met the requirement of s 4(1). The remedial construction works were effected strictly in accordance with those approved plans and specifications. The high court agreed with Mr Ramsunder and concluded that the municipality has not established a clear right that required protection by way of a final interdict. [17] An interpretative analysis of s 4(1), read with the pertinent definitions in s 1 of the Act, must follow the now well-established triad of text, context and purpose.3 ‘It is an objective unitary process where consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. The approach is as applicable to taxing statutes as to any other statute. The inevitable point of departure is the language used in the provision under consideration.’4 ‘Most words can bear several different meanings or shades of meaning and to try to ascertain their meaning in the abstract, divorced from the broad context of their use, is an unhelpful exercise’.5 ‘One should not stare blindly at the black-on-white words, but try to establish the meaning and implication of what is being said. It is precisely in this process that the context and surrounding circumstances are relevant.’6 ‘Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, 3 Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others [2021] ZASCA 99; [2021] 3 All SA 647 (SCA); 2022 (1) SA 100 (SCA). 4 Commissioner for the South African Revenue Service v United Manganese of Kalahari (Pty) Ltd ZASCA 16; 2020 (4) SA 428 (SCA), para 8. 5 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012] ZASCA 13; [2012] 2 All SA 262 (SCA); 2012 (4) SA 593 (SCA) para 25 (Endumeni). 6 In Elan Boulevard (Pty) Ltd v Fnyn Investments (Pty) Ltd and Others [2018] ZASCA 165; 2019 (3) SA 441 (SCA) para 16 footnote 6, Ponnan JA provided the above-quoted loose translation of the dictum - ‘. . . dat mens jou nie moet blind staar teen die swart-op-wit woorde nie, maar probeer vasstel wat die bedoeling en implikasies is van dit wat gesê is. Dit is juis in hierdie proses waartydens die samehang en omringende omstandighede relevant is . . .’ - by Olivier JA in Plaaslike Oorgangsraad van Bronkhortspruit v Senekal 2001 (3) SA 9 (SCA) para 11. not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the purpose of the document’.7 [18] The manifest purpose of s 4(1) becomes clear when the provision is placed in proper perspective, and the context in which it was made is considered. The purpose of the Act is ‘[t]o provide for the promotion of uniformity in the law relating to the areas of jurisdiction of local authorities; for the prescribing of building standards; and for matters connected therewith’. The Act provides, inter alia, for applications to local authorities in respect of erections of buildings;8 appointment of building control officers by local authorities,9 who, in turn, inter alia, shall (a) make recommendations to a local authority, regarding any plans, specifications, documents and information submitted to the local authority in an application in respect of the erection of a building, (b) ensure that any instruction given in terms of the Act by a local authority be carried out, (c) inspect the erection of a building, and any activities or matters connected therewith, in respect of which approval was granted by a local authority, and (d) report to the local authority regarding non-compliance with any condition on which approval was granted.10 [19] The Act continues to provide for the approval by local authorities of applications in respect of the erection of buildings once the local authority has considered the recommendations of the building control officer and is satisfied that the application complies with the requirements of the Act and any other applicable law;11 refusal by local authorities to grant approval of applications in respect of the erection of buildings if it is not satisfied that the application complies with the requirements of the Act and any other applicable law,12 or if it is satisfied that the building to which the application in question relates is to be erected in such manner or will be of such nature of appearance that (a) the area in which it is to be erected will probably or in fact be disfigured thereby, (b) it will probably or in fact be unsightly or objectionable, (c) it will 7 Endumeni para 18. 8 Section 4. 9 Section 5. 10 Section 6(1). 11 Section 7(1). 12 Section 7(1)(b)(i). probably or in fact derogate from the value of adjoining or neighbouring properties, or (d) it will probably or in fact be dangerous to life or property.13 [20] Building control officers or any other person authorized thereto by the local authority are obliged and empowered to enter any building or land at any reasonable time to inspect the approved construction works to determine whether there is compliance with the statutory prescripts and conditions of approval.14 A person appointed to design and to inspect the erection or installation of the structural, fire protection, or fire installation system of a building is, upon completion of the erection and installation of such system, obliged to submit a certificate to the local authority, indicating that the system has been designed and erected or installed in accordance with the approved application to erect the building.15 Unless the local authority issues a temporary certificate of occupancy, a newly constructed building may not be occupied unless the local authority issues a certificate of occupancy. It will issue such certificate if it is of the opinion that the building has been erected in accordance with the provisions of the Act and the conditions on which approval was granted.16 The Act vests local authorities with various other powers – such as the imposition of various conditions and prohibiting the erection or ordering the demolition of buildings in certain circumstances17 – which require no further elaboration here. [21] Section 4(1) thus forms part of a suite of legislative stipulations providing for municipal approval, oversight, and sign off on buildings that are safe, sound and aesthetically acceptable. Indeed, the legislature has cast the net for municipal authorisation wide in defining ‘erect’ in relation to a building, as it has done in defining a ‘building’. The evident intention with that is to ensure that the erection of all buildings (within the wide meaning ascribed to that noun) has been done in accordance with approved plans and specifications, even if, for example, the intended construction constitutes a mere re-erection of a pre-existing building that had originally been erected without the legally required municipal authorisation. Conversely, it could never have been the intention, as the municipality would have it, that new plans and 13 Section 7(1)(b). 14 Sections 6(1)(c) and 15. 15 Section 14 (2A). 16 Section 14(1)(a). 17 See, for example, sections 10-12. specifications need to be submitted to and approved by a local authority prior to the commencement of remedial construction works being undertaken, in circumstances where the municipality had previously approved the identical plans and specifications, in accordance with which the remedial construction works are to be carried out, and in the absence of any suggestion that the local authority would have imposed amended or additional conditions. [22] Indeed, the facts herein demonstrate the absurdity that would result from a contrary interpretation of s 4(1). It would amount to a mere brutum fulmen – an exercise in futility – to require the same application in respect of the same building to be submitted to the local authority each time an event, such as the 2021 riots, results in damage to the building, merely for an identical authorisation then to be issued to undertake the remedial construction works in accordance with the originally approved plans and specifications. Would the approach of the municipality apply to less serious damage, such as borer damage to a roof structure? Such insensible and unbusinesslike results are not to be preferred. [23] The municipality has thus failed to show that the clear right requisite for the grant of a final interdict is present. In addition, its application appears to have an ulterior motive. [24] In the result: The appeal is dismissed with costs. ________________________ P MEYER JUDGE OF APPEAL Appearances For appellant: M Pillemer SC with M Mbonane Instructed by: Tembe Kweswa Nxumalo Inc., Durban Maduba Attorneys Inc., Bloemfontein For respondent: No appearance Instructed by: Udesh Ramesar Attorneys, Pietermaritzburg Symington De Kok Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 1 December 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Ubuhlebezwe Municipality v Ramsunder (873/2022) [2023] ZASCA 165 (1 December 2023) Today, the Supreme Court of Appeal (SCA) dismissed an appeal from the Kwa-Zulu Natal Division of the High Court, Pietermaritzburg. The appellant, Ubuhlebezwe Municipality (the municipality), initiated motion proceedings against the respondent, Mr Harilall Ramsunder (Mr Ramsunder), for an order interdicting him ‘from carrying out any building operations and/or renovations and/or improvements and/or restoration to the immovable property’ situated in the town of Ixopo, Kwa-Zulu Natal (the property). The clear right upon which the municipality sought to rely in order to obtain a final interdict, emanates from s 4(1) read with the definitions of the words ‘erection’ and ‘erect’ in s 1 of the National Building Regulations and Building Standards Act 103 of 1977 (the Act). The section stipulates that ‘[n]o person shall without the prior approval in writing of the local authority in question, erect any building in respect of which plans and specifications are to be drawn and submitted in terms of this Act.’ The words ‘erection’ and ‘erect’ are defined, thus: ‘“erection” in relation to a building, includes the alteration, conversion, extension, rebuilding, re-erection, subdivision of or addition to, or repair of any part of the structural system of, any building; and “erect” shall have a corresponding meaning.’ The buildings on the property were erected during 2004 in accordance with duly approved municipal plans and specifications. During July 2021, widespread civil unrest started in Kwa-Zulu Natal and spread to Gauteng. It was accompanied by egregious loss of life, public violence, burglary and malicious damage to property. Mr Ramsunder was one of the unfortunate victims of the widespread unrest. The buildings on the property from which he was conducting his business were damaged and he could no longer conduct any business from these premises. Mr Ramsunder engaged the services of a construction company, RockSteel, to undertake the required remedial construction to restore the buildings on the property to their original state, in accordance with the previously approved plans and specifications. The municipality contended that Mr Ramsunder was required to have new plans and specifications drawn and approved by the municipality, prior to the commencement of the remedial construction works on the property. Mr Ramsunder, on the other hand, contended that the 2004 approved plans and specifications met the requirement of s 4(1) of the Act. The high court agreed with Mr Ramsunder and concluded that the municipality has not established a clear right that required protection by way of a final interdict. The SCA agreed with the conclusion reached by and the order of the high court. In dismissing the appeal, the SCA held that s 4(1) forms part of a suite of legislative stipulations providing for municipal approval, oversight, and sign off on buildings that are safe, sound and aesthetically acceptable. Indeed, so the SCA held, the legislature has cast the net for municipal authorisation wide in defining ‘erect’ in relation to a building, as it has done in defining a ‘building’. The evident intention with that is to ensure that the erection of all buildings (within the wide meaning ascribed to that noun) has been done in accordance with approved plans and specifications, even if, for example, the intended construction constitutes a mere re-erection of a pre-existing building that had originally been erected without the legally required municipal authorisation. Conversely, it could never have been the intention, as the municipality would have it, that new plans and specifications need to be submitted to and approved by a local authority prior to the commencement of remedial construction works being undertaken in circumstances where the municipality had previously approved the identical plans and specifications, in accordance with which the remedial works are to be carried out, and in the absence of any suggestion that the local authority would have imposed amended or additional conditions. ~~~~the end~~~~

3774

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 115/2021 In the matter between: MINISTER OF POLICE APPELLANT and XOLILE MZINGELI FIRST RESPONDENT LUTHANDO NDAYI SECOND RESPONDENT MPUMEZO XABADIYA THIRD RESPONDENT Neutral citation: Minister of Police v Mzingeli and Others (115/2021) [2022] ZASCA 42 (5 April 2022) Coram: Petse DP, Van der Merwe and Hughes JJA, and Tsoka and Makaula AJJA Heard: 16 February 2022 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the website of the Supreme Court of Appeal and release to SAFLII. The date and time for hand-down are deemed to be 10h00 on 5 April 2022. Summary: Delict – claim for damages – quantum of unliquidated damages – no oral evidence – stated case – whether properly formulated in terms of Rule 33 – requirements restated. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Eastern Cape Division of the High Court, Mthatha (Zono AJ sitting as court of first instance): The appeal succeeds with no order as to costs. The order of the court a quo is set aside. The matter is remitted to the court a quo for the determination of the quantum of damages. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Hughes JA (Petse DP, Van der Merwe JA, and Tsoka and Makaula AJJA concurring): [1] This appeal is with the leave of this Court, granted on the following terms: ‘The leave to appeal is limited to the following: (a) Whether it was permissible for the court to determine the quantum of unliquidated damages without hearing oral evidence in light of the decision of EFF and Others v Manuel [2020] ZASCA 172; (b) Whether the stated case was properly formulated in accordance with the rules of court and the requirements for such a stated case, so as to be sufficient to enable the court to determine the issue of the quantum of damages; (c) The quantum of damages awarded to each of the plaintiffs.’ [2] The respondents did not file heads of argument and opted to abide by this Court’s decision. The appellant sought condonation in terms of rule 12 of the Rules of the Supreme Court of Appeal for the late filing of the record and heads of argument. Both applications were unopposed by the respondents. In support of the condonation application, the appellant stated that the courier company entrusted with the task of delivering the record to the Court failed to provide a plausible explanation for the late delivery to the Court. This Court, having satisfied itself that a proper case for condonation was made out, grants condonation in both instances. [3] Briefly, the following are the facts. The respondents, Messrs Xolile Mzingeli, Luthando Ndayi and Mpumezo Xabadiya, instituted an action against the appellant, the Minister of Police, claiming damages for unlawful arrest, detention and malicious prosecution. [4] And this is how the claims came about: On 13 September 2009 the respondents were arrested and charged with housebreaking, theft and murder. They were detained and, on 17 September 2009, the first and third respondents were found guilty of theft and were sentenced to 12 months’ imprisonment. The murder charge was still being investigated. After serving their sentence of 12 months, the first and third respondents remained incarcerated together with the second respondent in respect of the murder charge. The respondents remained in custody until 24 July 2014, when the murder charge was withdrawn against them. The first and third respondents claimed damages for the period 14 September 2010 to 24 July 2014 and the second respondent for the period 13 September 2009 to 24 July 2014. [5] The trial was scheduled to proceed on 15 October 2019. However, the parties attempted to settle both the issue of liability and quantum, but were not successful in respect of quantum. The court a quo (Zono AJ) made an order in terms of rule 33(4) of the Uniform Rules of Court, thereby separating the issues of liability and quantum. It was further recorded in the order that the appellant was found liable on the merits and the only issue left for determination was the quantum for general damages arising from the detention of the respondents. The respondents did not persist with the claim for malicious prosecution and the issue of quantum was then adjourned to the following day. [6] On 16 October 2019, the court a quo acceded to hear the issue of quantum by way of a stated case as formulated by the parties. After hearing oral argument, the court a quo awarded the first and third respondents an amount of R3 000 000 as a reasonable and fair compensation, whilst, the second respondent was awarded an amount of R4 000 000 as reasonable and fair compensation. [7] I now turn to the merits of the appeal. Rule 33(1) and (2) of the Uniform Rules provides: ‘(1) The parties to any dispute may, after institution of proceedings, agree upon a written statement of facts in the form of a special case for the adjudication of the court. (2)(a) Such statement shall set forth the facts agreed upon, the questions of law in dispute between the parties and their contentions thereon. Such statement shall be divided into consecutively numbered paragraphs and there shall be annexed thereto copies of documents necessary to enable the court to decide upon such questions. It shall be signed by an advocate and an attorney on behalf of each party, or where a party sues or defends personally, by such party. (b) Such special case shall be set down for hearing in the manner provided for trials or opposed applications, whichever may be more convenient (c) …’ [8] It is important to restate the approach to be adopted whenever litigants request a court to invoke rule 33 and determine the issues by way of a stated case. It is incumbent upon the parties to ensure that the stated case contains adequate facts as agreed upon between them. Further, the statement ought to also contain the question of law in dispute between the parties and their contentions regarding these questions of law. Wallis JA reaffirmed this in Minister of Police v Mboweni and Another: ‘It is clear therefore that a special case must set out agreed facts, not assumptions. The point was re-emphasised in Bane v D’Ambrosi, where it was said that deciding such a case on assumptions as to the facts defeats the purpose of the rule, which is to enable a case to be determined without the necessity of hearing all, or at least a major part, of the evidence. A judge faced with a request to determine a special case where the facts are inadequately stated should decline to accede to the request. The proceedings in Bane v D’Ambrosi were only saved because the parties agreed that in any event the evidence that was excluded by the judge’s ruling should be led, with the result that the record was complete and this court could then rectify the consequences of the error in deciding the special case.’1 [9] In the present matter it is prudent to point out that there were facts included in the stated case which were disputed by the appellant. There were also unsubstantiated statements and no evidence advanced to substantiate these statements. Though the statement of facts informed the court a quo of the detention of the respondents and the period thereof, it did not provide details of the allegations of the acts of assault perpetrated on the respondents by both the police and the inmates, nor did it deal in detail with the acts of sodomy alleged by the respondents. Further, no details can be found in the statement demonstrating the ‘inhumane, degrading and unhygienic’ conditions to which the respondents were allegedly subjected. In essence, the factual material presented in the stated case was not sufficient for a court to make a determination on the quantum and required evidence to be adduced to substantiate the respondents’ claims. [10] Notably, the court a quo acknowledged that the stated case was lacking in details and evidence relating to the manner, extent and duration that the respondents were allegedly subjected to assault, torture and sodomy whilst in detention. Despite these shortcomings in the stated case, the court a quo proceeded to make assumptions and draw inferences in order to arrive at the ultimate conclusions reached. The court a quo acknowledged this in its judgment.2 [11] The court a quo, in finding for the respondents, made the awards set out above and stated: ‘It is the parties’ minds that all three plaintiffs must be compensated but they do not agree on the amounts. I am called upon and I set out to decide this case on the basis of the contended amounts. It is from the contentions of the parties that the question of law sought to be decided emerges….. 1 Minister of Police v Mboweni and Another [2014] ZASCA 107, 2014 (6) SA 256 (SCA) at para 8; Bane and Others v D’Ambrosi [2009] ZASCA 98; 2010 (2) SA 539 (SCA) at para 7. 2 Paras 5, 9, 10, 22 and 23 of the judgment of the court a quo by Zono AJ. On the conspectus of the agreed facts, parties’ contentions and relief sought in the stated case coupled with the authorities I have considered on the subject, I find as follows….’3 [My emphasis.] [12] Therefore, I find that the approach adopted by the court a quo to be inappropriate, especially so, in respect of determining the quantum of unliquidated damages. It is correct that a court may draw inferences from the facts in a stated case, however, these are to be drawn from satisfactorily and adequately stated facts, as would have been proven at trial.4 [13] In this case the quantum of the unliquidated damages claimed by the respondents was hotly disputed. Evidently, damages of the kind claimed by the respondents are by their very nature indeterminate and, as such, require proper assessment by the court. The court a quo acknowledged this much. However, even in the face of such acknowledgement, no evidence was adduced to aid with the assessment and quantification of these damages. [14] It was accepted by the parties during argument on appeal that determining quantum in this matter by way of a stated case – such as it was – was not the correct approach to adopt. This stance was correct as nowhere in the stated case or the pleadings had the parties agreed on the relevant facts necessary to determine and prove the quantum awarded by the court a quo. [15] I must express this Court’s displeasure at the state of the record that included some 178 pages unnecessarily incorporated into the record. This Court has repeatedly admonished practitioners for including unnecessary documents in the appeal record. It would seem that some of the practitioners have not heeded these warnings and, thus, need to be reminded of this Court’s previous admonitions.5 3 Para 40 and 41 of the judgment of the court. 4 Feedpro Animal Nutrition (Pty) Ltd v Nienaber NO and Another [2016] ZASCA 32 at para 9 &10. 5 Government of the RSA v Maskam Boukontrakteurs (Edms) Bpk 1984 (1) SA 680 (A) at 692E– 693A; Salviati & Santori (Pty) Ltd v Primesite Outdoor Advertising (Pty) Ltd 2001 (3) SA 766 (SCA) paras 16–17; Nkengana v Schnetler [2010] ZASCA 64; [2011] 1 All SA 272 (SCA) para 16. [16] Turning to the issue of costs, I am mindful of the fact that the respondents sought to abide with this Court’s decision. In the circumstances the appeal was unopposed. In addition, during the appeal the parties conceded that the stated case was an incorrect course of action to have adopted for which they must share equal blame. The proper order in these circumstances is that there be no order as to costs. [17] Accordingly, the following order is made: The appeal succeeds with no order as to costs. The order of the court a quo is set aside. The matter is remitted to the court a quo for the determination of the quantum of damages. _________________ W HUGHES JUDGE OF APPEAL APPEARANCES For the Appellant: D V Pitt (heads of argument prepared by Z Z Matebese SC with him D V Pitt) Instructed by: State Attorney, Mthatha State Attorney, Bloemfontein For the Respondent: A M Bodlani Instructed by: T A Noah & Sons Attorney, Mthatha No correspondent in Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 5 April 2022 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Minister of Police v Mzingeli and Others (115/2021) [2022] ZASCA 42 (5 April 2022) Today the Supreme Court of Appeal (SCA) upheld an appeal for the Eastern Cape Division of the High Court, Mthatha (court a quo) and set aside the order of the court a quo. The matter was remitted to the court a quo for hearing of evidence on quantum and its determination. Leave to appeal was limited to only the quantum of damages awarded to each of the respondents (plaintiffs in the court a quo), whether a court could determine quantum of unliquidated damages without hearing oral evidence and whether the stated case was properly formulated in accordance with the rules of court and the requirements for the stated case, so as to be sufficient to have enabled the court to determine the issue of quantum of damages. The respondents instituted proceedings against the appellant in the court a quo, claiming damages for unlawful arrest, detention and malicious prosecution. During trial the parties settled the merits, but were unsuccessful with quantum. The court a quo made an order in terms of rule 33(4) separating the issues of liability and quantum, and acceded to hear the issue of quantum by way of a stated case, as formulated by the parties in terms of rule 33(1) and (2) of the Uniform Rules of Court. Subsequently, awards of R3 000 000 were made to the first and third respondents whilst R4 000 000 was awarded to the second respondent. A requirement for a stated case is that the parties are to ensured that there is agreement as to all the facts. Determination of unliquidated damages is permissible by way of a stated case, provided it is brought before the court in a proper fashion. The quantum of unliquidated damages claimed by the respondents were disputed; these damages were not fixed and required the assessment of the court, which was a factor acknowledged by the court a quo. Furthermore, no evidence was adduced to aid with the assessment and quantification of the damages and this Court emphasised its importance by reiterating the fact that a proper assessment and an appropriate award can only be made after evidence has been duly considered. Upon appeal, the parties agreed that a stated case was not the correct approach adopted in this instance, which was confirmed by this Court. Nowhere in the stated case or the pleadings were any relevant facts agreed upon which were necessary for determining and proving the quantum awarded by the court a quo. In the result, the SCA upheld the appeal and set aside the order of the court a quo. The matter was remitted to the court a quo for hearing of evidence on quantum and its determination. --------oOo--------

2879

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 161/12 Reportable In the matter between: THE GOVERNING BODY OF THE RIVONIA PRIMARY FIRST APPELLANT SCHOOL RIVONIA PRIMARY SCHOOL SECOND APPELLANT and MEC FOR EDUCATION: GAUTENG PROVINCE FIRST RESPONDENT HEAD OF DEPARTMENT: GAUTENG DEPARTMENT SECOND RESPONDENT OF EDUCATION DISTRICT DIRECTOR: JOHANNESBURG EAST D9 – THIRD RESPONDENT GAUTENG DEPARTMENTOF EDUCATION CELE: STHABILE FOURTH RESPONDENT MACKENZIE: AUBREY FIFTH RESPONDENT DRYSDALE: CAROL SIXTH RESPONDENT AMICI CURIAE, EQUAL EDUCATION AND THE CENTRE FOR CHILD LAW Neutral citation: The Governing Body of the Rivonia Primary School v MEC for Education: Gauteng Province (161/12) [2012] ZASCA 194 (30 November 2012) Coram: Nugent, Cachalia, Shongwe, Wallis JJA and Saldulker AJJA Heard: 16 November 2012 Delivered: 30 November 2012 Summary: In terms of s 5(5) read with s 5A of the South African Schools Act 84 of 1996 the governing body of a public school has authority to determine the capacity of a school as an incident of its admission policy. Provincial education authorities may not ‘override’ the policy. ____________________________________________________________________ ORDER ____________________________________________________________________ On appeal from: South Gauteng High Court, Johannesburg (Mbha J sitting as court of first instance): The appeal is upheld with costs, such costs to be paid by the first, second and third respondents. The order of the high court is, save for paras 6 and 7 thereof, set aside and the following order substituted in its place: ‘It is declared that the instruction given to the principal of the Rivonia Primary School to admit the learner contrary to the school’s admission policy, and the placing of the learner in the school, were unlawful.’ JUDGMENT ____________________________________________________________________ CACHALIA JA (NUGENT, SHONGWE, WALLIS JJA AND SALDULKER AJA CONCURRING): [1] What occurred in this case might have occurred at any public school that had a waiting list for the admission of learners – and there are many such schools. As it happens, it occurred at a school located in an affluent, historically white suburb, where a little more than half the learners were white. Much was made of that in the judgment of the court below, and in the affidavits filed by the respondents, and in argument that was advanced before us on their behalf, but none of it is relevant to this appeal. The issues before us concern the structure of governance of all public schools, wherever located, whatever their circumstances, and whatever the composition of their learners. [2] The school concerned is Rivonia Primary School. It declined to admit a child to its Grade 1 class for the 2011 school year, because she was twentieth on the waiting list, against the insistence of her mother. The mother persisted in her demand that the child be admitted and garnered the support in her cause of officials of the Gauteng Department of Education. Some weeks into the school year the head of the department (HoD) instructed the principal to admit the child. Before the governing body could meet to consider the instruction, officials of the department arrived at the school and summarily deposited the child in a classroom. That high-handed conduct can only be deprecated. For reasons I now turn to it was also unlawful. [3] Governance of public schools is regulated by the South African Schools Act 84 of 1996. Section 5(5) of the Act provides that: ‘[subject] to this Act and any applicable provincial law, the admission policy of a public school is determined by the governing body of such school.’ The principal question that arises in the appeal is whether that entitles the governing body to determine the number of learners the school may admit. The provincial government contends that it falls within its authority to do so, and not the authority of the governing body. [4] Rivonia Primary School is a public school situated in one of Johannesburg’s more affluent, historically white areas. Since the days when schools were racially segregated, the school’s learner-profile has changed materially. In February 2011 it had 388 black learners, 52 of whom were in Grade 1. This represented 46% of the total learners at the school. [5] The governing body had prepared an admission policy, which the department accepted on 4 March 2010, in which the capacity of the school was set at 770 learners, of which 120 could be accommodated in Grade 1. [6] The school’s post provisioning for the 2011 year, funded through the provincial budget, was a total number of 22 educators – including the principal, a deputy principal, three heads of department and 17 teachers – determined on the basis of 37 children per class. The school, however, had a lower learner-class ratio of 24 learners per class – one of the lowest ratios in the province. This is because the governing body employed 22 additional educators to ensure each child’s adequate supervision. From 2000 to 2009 the governing body spent R3 251 036 on construction projects including building nine further classrooms. The parents – not the department – funded these extra costs. They did so to ensure that their children would have a solid foundation to equip them for their later school years. [7] The governing body determined its capacity by taking into account a number of factors, including its statutory obligation to promote the best interests of the school, and to ensure its development through the provision of quality education. The number of educators, their space requirement, the number of designated classrooms, and the optimum desk working space, were all factored into making this determination. There is no suggestion that it set its capacity unreasonably or irrationally. [8] The school opened its application process for admission of children to Grade 1 for the school year starting in January 2011 on 13 July 2010. Over the next few days many application forms were collected. The mother of one of the children, with whom this appeal is concerned, collected hers on 15 July and submitted it to the school on 21 July. At this stage the school had handed out 191 application forms of which 139 had been returned. At the time the child’s mother submitted her application for entry to Grade 1 – which had a capacity of 120 – she was number 140 on the admission list. [9] On 26 October 2010, the school informed the mother by e-mail that her child’s application for admission was unsuccessful and that her details had been sent to the District Office to assist her with finding a place for the child. The e-mail went on to say that she would be advised in due course where her child may be accommodated. Meanwhile the child would remain on the waiting list. Similar notices were sent to other unsuccessful applicants. [10] On 4 November 2010 the mother wrote to the principal, Ms Carol Drysdale, asking why her application had not been accepted. Ms Drysdale gave the reason in a letter the following day: the school had reached its capacity. The letter also stated that her application was then number 14 on the waiting list, presumably because some of the children ahead of her on the waiting list had been accommodated at other schools. [11] The mother then lodged an appeal against this decision with the MEC for Education on 5 November 2010. Meanwhile she continued to put pressure on officials of the department to place her child at the school. There were various meetings between the governing body, Ms Drysdale and the department’s officials to find a solution. At a meeting on 30 November 2010 it appears to have been accepted that the child would have to wait her turn until a place became available. Her mother then enrolled her at a private school, Lifestyle Montessori School, where she commenced attending classes on 12 January 2011. [12] Late in January 2011, with the school year well underway, the mother’s appeal was brought to the MEC’s attention. Mr Len Davids, the Deputy Director General of the department, and deponent to the respondents’ answering affidavit, explained the extraordinary delay in bringing the matter before the MEC as ‘due to administrative issues’. Bearing in mind that the appeal had been lodged on 5 November, and almost three months had since passed, this anodyne explanation is hardly acceptable. [13] The MEC, quite properly, declined to entertain the appeal before the HoD had dealt with the matter in accordance with reg 13 made under the Gauteng School Education Act 6 of 1995. This is because reg 14 allows an appeal to the MEC only after the HoD has considered the matter, which had not happened.1 So the MEC referred the matter to the HoD for attention. [14] On 2 February 2011 the matter took a new turn. The HoD, Mr Boy Ngobeni, informed Ms Drysdale by letter that the school’s ‘tenth day statistics’ revealed that it had not reached its capacity. (The department uses these statistics to determine the number of children who have been enrolled at a school.) The letter went on to instruct her to admit the learner forthwith. [15] It appears that Mr Ngobeni’s conclusion that the school had not reached its capacity was based on information gleaned from the statistics, which showed that the school had admitted 124 learners to Grade 1 even though its stated capacity was only 120. The school, however, explains that it is common practice to accept a few more learners as substitutes for those who had been accepted but do not arrive to take up their positions. This explains the discrepancy between the statistics and the actual number of admitted learners, and refutes Mr Ngobeni’s suggestion that the school had incorrectly stated its capacity. It is, however, clear that by instructing Ms Drysdale to 1 Regulations 13 and 14. GN 4138, PG 129, 13 July 2001. admit the child, Mr Ngobeni was not acting on the terms of the mother’s original complaint and in accordance with reg 13, but on this new information. [16] Five days later, on 7 February, the mother arrived at the school to have her child admitted. Ms Drysdale explained that an urgent meeting of the governing body had been called to discuss the issue, and asked her to leave with her child while the matter was being resolved. Not satisfied, the mother left after telling Ms Drysdale that ‘she is going straight to the MEC’s office’. [17] The following day, on 8 February, she returned to the school with her child. This time she was accompanied by an official from the department, Mr Thlage Petlele, who was armed with an instruction from Mr Ngobeni to Ms Drysdale to admit the child. They encountered a representative of the governing body, Mr Paul Lategan, who requested them to await the outcome of their attempt to resolve the dispute, and not to subject the child to any further unpleasantness. [18] Mr Petlele presented a letter to Mr Lategan and Ms Drysdale from Mr Ngobeni. It stated that Ms Drysdale’s admission function as the principal had been withdrawn. Some thirty minutes later another official, Mr Babsy Matabane, arrived at the school. He handed a letter to Ms Drysdale informing her that the admission function had now been delegated to him. [19] Mr Lategan again asked the officials to remove the learner pending a resolution of the dispute. But they were adamant that they were acting on the authority of the HoD, and they were there to place the learner. Mr Lategan phoned the department’s legal division to intervene, but the official who responded, Mr Qinso Zwane, was not willing to entertain his plea. [20] The two officials, accompanied by a security guard, then proceeded to the Grade 1 classrooms with the child and her mother. They arrived at one of the classrooms with the least number of learners and after speaking to the teacher decided not to place the child in that classroom. They then went to another classroom where they met a teacher outside that classroom. They asked her to allow them entry so that they could place the child there and she obeyed. They entered and seated the child at an empty desk that had been installed earlier that morning for a child with attention and learning difficulties, and then left. [21] The appellants – the governing body and the school – applied to the South Gauteng High Court for declaratory and interdictory relief aimed at the department’s decision to override the school’s admission policy on capacity, the withdrawal of Ms Drysdale’s admission function, and the forced admission of the child. In the interests of the child the appellants commendably abandoned the relief concerning her admission. [22] Save for the relief pertaining to the withdrawal of Ms Drysdale’s admission function, which the court (Mbha J) granted,2 the application was dismissed. With the leave of the high court the appellants now appeal that order. The respondents do not cross-appeal the order that the withdrawal of Ms Drysdale’s admission function ‘was not exercised bona fide and is set aside.’ [23] After leave was granted there was a new development. On 9 May 2012 the MEC amended the regulations on the admissions of learners to public schools in Gauteng.3 Regulation 8, as amended, now provides that the HoD – not the governing body – shall determine the capacity of a school.4 The respondents contended that this regulation rendered the appeal moot. 2 ‘1. Section 5(5) of the South African Schools Act No 84 of 1996, does not appropriate to a school governing body the unqualified power to determine a public school’s admission policy. 2. The power to determine the maximum capacity of a public school in Gauteng Province vests in the Gauteng Department of Education and not in the school governing body. 3. The Gauteng Department of Education has the power to intervene with the school governing body’s power to determine the admission policy of a public school. 4. The Member of the Executive for Education, Gauteng Province, is the ultimate arbiter whether or not a learner should be admitted to a public school. 5. The application in respect of prayers 2 to 7, 9 and 10 of the Notice of Motion is dismissed. 6. The application succeeds in respect of prayer 8 of the Notice of Motion. 7. Each party shall pay their own costs.’ 3 GN 1160, PG 127, 9 May 2012. 4‘8 Declaring schools full (1) Notwithstanding the provisions of the admission policy of a school, or the provisions of any national or provincial delegated legislation or any determination made in terms thereof, for the purpose of placing learners whose applications for admission have not been accepted at any school in the public schooling system, until such time as norms and standards contemplated in section 5A(2)(b) of the South African Schools Act are in force the objective entry level learner enrolment capacity of a school shall be determined by the Head of Department.’ [24] Courts will generally decline to entertain litigation in which there is no live or existing controversy. That is principally for the benefit of the court so as to avoid it being called to pronounce upon abstract propositions of law that would amount to no more than advisory opinions. The principle so far as appeals are concerned is captured in s 21A of the Supreme Court Act 59 of 1959, which allows an appeal to be dismissed on the ground alone that the judgment or order sought will have no practical effect or result. [25] The lawfulness or otherwise of the HoD’s conduct is certainly a live issue. It also cannot be said that our decision on the matter will have no practical effect. The submission that the new regulation has overtaken events assumes that the regulation is valid – which is not before us to decide – but the proper meaning of the Schools Act is relevant to deciding that question. Moreover, our decision will indeed have a practical effect so far as Ms Drysdale, who has an interest in the appeal, is concerned. We were informed from the bar that she was subjected to disciplinary sanctions for not complying with the HoD’s instruction. That instruction, as will emerge later in this judgment, was unlawful. She was given a final warning and had a month’s salary deducted. [26] I turn, then, to the structure of governance in public schools. [27] The first democratically elected Parliament passed the Act soon after the Constitution was adopted. Its objective, according to the long title, was to ‘[t]o provide for a uniform system for the organisation, governance and funding of public schools’. The preamble records that schools would henceforth be governed democratically with learners, parents and educators assuming this responsibility in partnership with the State. Public school governance, in the words of the Education White Paper which preceded the Act, would become part of the country’s new structure of democratic governance.5 It would represent a radical departure from the model of the authoritarian control of education of the pre-constitutional era. 5The Organisation, Governance and Funding of Schools (Education White Paper 2), GN 130, February 1996 (Organisation, Governance and Funding White Paper) para 3.17. [28] The governance of public schools is now vested in their governing bodies whose functions, obligations and rights are prescribed.6 Their membership in primary schools is elected from the learners’ parents, educators and staff members.7 They may co-opt other members to assist in discharging their functions.8 The principal serves ex officio on the governing body as a representative of the HoD9 and must assist the governing body to perform its functions and responsibilities.10 It is implicit in this that the principal is obliged to implement the policies lawfully determined by the governing body within its sphere of authority. [29] A governing body stands in a position of trust towards the school.11 It promotes the school’s best interests and strives to ensure its development by providing quality education to the learners.12 Implicit in this model of governance is an acceptance on the lawmaker’s part that the state cannot provide all the resources for the proper functioning of a high quality schooling system. So governing bodies are enjoined to ‘take all reasonable measures within [their] means to supplement the resources supplied by the State in order to improve the quality of education provided by the school . . .’13 [30] Governing bodies thus have a mandate – indeed, an obligation – to raise additional funds through the active involvement of the parents, who in return for their financial contributions are given a direct and meaningful say in school governance and the employment of school funds.14 Governing bodies set their own school fees and prepare budgets for approval by the general meeting.15 It is in pursuance of that injunction that Rivonia Primary School’s governing body has been able to reduce its learner-educator ratio by building extra classrooms and employing additional educators. 6 Section 16(1). 7 Section 23(2). 8 Section 23(6). 9 Section 16A(1). 10 Section 16A(3). 11 Section 16(2). 12 Section 20(1). 13 Section 36(1). 14 P J Visser ‘Some Thoughts on Legality and Legal Reform in the Public School Sector’ (2006) 2 TSAR 359 at 360. 15 Section 39. [31] Section 20(1) details a long list of functions that the governing body performs. In addition to these the Act explicitly makes language policy,16 religious policy observance17 and admissions policy18 – the subject of the present dispute – the responsibility of the governing body. [32] While school governance is the responsibility of the governing body, the professional management of the school is undertaken by the principal under the authority of the HoD.19 In undertaking the professional management of a school a principal must carry out several duties, including implementing educational programmes and curriculum activities, managing educators and support staff,20 maintaining the discipline of educators, support staff and learners, and, importantly, implementing policies and legislative prescriptions.21 [33] Admission to public schools is thus under the control of their governing bodies, which both devise and implement their admission policies. The HoD is responsible for the administration of the admission process. The Act specifies that applications for the admission of learners are made to the department in the manner that the HoD determines.22 In practice, as happened in this case, the HoD delegates the administration of this function to principals.23 The HoD, acting through the principal, is thus responsible both for professional management, and for the administration of admission, which must necessarily be administered in accordance with the governing body’s admission policy. [34] Before I consider the central issue in this appeal – whether a governing body has the authority to determine school capacity as an incident of admission policy, and if so whether a provincial authority may override this determination – it must be borne in mind from what I have said thus far that the structure of the Act and its underlying philosophy places the governance of the school in the hands of the local community 16 Section 6(2). 17 Section 7. 18 Section 5(5). 19 Section 16(3). Minister of Education, Western Cape v Governing Body, Mikro Primary School 2006 (1) SA 1 (SCA) para 5; The Head of Department: Department of Education, Free State Province v Welkom High School & Harmony High School [2012] ZASCA 150 (28 September 2012) para 11. 20 Section 16A(ii). 21 Sections 16A2(vi) and 16A2(e). 22 Section 5(7). 23 Section 16A2(iv). through the governing body, while officials of the department are responsible for professional management and for the administration of admissions. These functions are distinct and a failure to see them as such will compromise the objectives of Act and be at odds with its scheme. [35] That does not mean, however, that the authority of a governing body to govern a school is absolute. The White Paper foresaw that governing bodies might exceed, or fail to exercise, their powers, and envisaged an oversight role for the provincial government, which it explained thus: ‘The province would need to reserve the right to intervene to ensure that law and policy were being upheld, and in particular that funds were properly administered and accounted for. There would need to be provision for the provincial authority to withdraw certain responsibilities from a governing body at its own request, or in the event of seriously unsatisfactory performance.’24 [36] That was embodied in s 22(1) of the Act, which authorises the HoD, on reasonable grounds, to withdraw any one or more of the functions of a governing body, but only after informing the governing body of his intentions and the reason therefor, granting the governing body a reasonable opportunity to make representations, and giving due consideration to those representations. Any person aggrieved by a decision of the HoD may appeal to the MEC. But the HoD is only able to take action under this section if the governing body performs the function allocated to it or exercises any power conferred on it unreasonably, unconstitutionally or otherwise unlawfully. He may also intervene under s 25(1) if he determines on reasonable grounds that the governing body has ceased to perform any function, in which case he may appoint other persons to perform the function.25 These powers may be exercised in addition to his right to institute review proceedings against the governing body. It was not contended that any of these provisions gave him the authority to override the principal’s decision and to admit the child. [37] I turn, then, to the main issue raised by this appeal, which is the authority to determine the capacity of a school. I have pointed out that s 5(5) of the Act expressly 24 Organisation, Governance and Funding White Paper para 3.20. 25 Head of Department, Mpumalanga Department of Education v Hoërskool Ermelo 2010 (2) SA 415 (CC) paras 72, 81 and generally at paras 82-85. provides that the admission policy of a school is determined by its governing body. That must necessarily include the determination of its capacity, which is central to admission to the school and forward planning, and particularly the determination of its budget. Any doubt on that score is removed by s 5A, which allows the Minister of Education to prescribe minimum and uniform norms and standards for ‘the capacity of a school in respect of the number of learners a school can admit’. The factors to be taken account of in setting those norms and standards are set out in s 5A(2)(b), and include the number of teachers and the class size; the quality of performance of a school; the curriculum and extra-curricular choices; the classroom size and the utilisation of available classrooms. In terms of s 5A(3) – a critical section – a governing body must, when compiling its admission policy, comply with these norms and standards. In the event that the school has an existing policy, it must, in terms of s 5A(4), within a period of 12 months after the Minister has prescribed the norms and standards, review its admission policy to ensure its consistency. That the governing body is enjoined to compile and review its admission policy in accordance with such norms and standards makes it clear beyond doubt that the admission policy contemplated by the Act includes the capacity of the school. [38] Equally clear is the role the Act gives to the provincial authorities – in s 58C – to ensure compliance with such norms and standards.26 Section 58C(2) imposes an obligation on an MEC to ensure that a school’s admission policy, which I have said includes its capacity, accords with national norms and standards. Sections 58C(5) and (6) set out the duties of the HoD in respect of the determination of infrastructure and capacity at public schools to ensure compliance with norms and standards. Once the HoD communicates this determination to the school27 the governing body is able to take the necessary steps to prepare its budget and fulfil its responsibility to supplement the school’s resources.28 [39] Thus each of the partners in this tri-partite arrangement – the governing body, the Minister and the provincial authorities – has defined responsibilities.29 Where the Minister has determined national norms and standards after consulting the Council of 26 Section 58C inserted by s 11 of Act 31 of 2007. 27 Section 58C6(b). 28 Section 36(1). 29 Head of Department, Mpumalanga Department of Education v Hoërskool Ermelo 2010 (2) SA 415 (CC) para 56. Ministers, the governing body must ensure that its admission policy accords with such norms and standards. (The Minister has not prescribed norms and standards for the capacity of schools.) In this regard it is accountable to the MEC. The HoD, in turn, must account to the MEC for ensuring that the norms and standards are met.30 [40] While governing bodies are charged with determining their admission policies, including the capacity of the school, they do not have a free hand in doing so. The Act specifies that a school’s admission policy may not be unfairly discriminatory,31 may not require an admission-test to be administered to a learner32 and may not refuse admission to a learner because the parent has not paid or is unable to pay the school fees.33 And as I observed earlier, a governing body must necessarily act reasonably and rationally when determining its capacity. [41] Notwithstanding those clear provisions of the Act, the respondents contend that the provincial government has the final say on the capacity of a school, and is entitled to override the capacity set by the governing body. They find the source of that alleged power in ss 3(3) and 3(4). Section 3(3) obliges the MEC to ‘ensure that there are enough school places so that every child who lives in his or her province can attend school . . .’. Section 3(4) obliges the MEC, if he or she cannot comply with subsection (3) because of a lack of capacity existing at the time of commencement of the Act, to ‘take steps to remedy such lack of capacity as soon as possible’ and to ‘make an annual report to the Minister on the progress achieved in doing so’. [42] The respondents rely in addition on s 39(2) of the Constitution34, which calls for the courts to promote the spirit, purport and objects of the Bill of Rights when interpreting statutes, which, they submit ‘compels’ us to interpret the provisions in this manner so as to give effect to the constitutional rights to equality35 and to basic 30 Section 58C(e). 31 Section 5(1). 32 Section 5(2). 33 Section 5(3)(a). 34 Section 39(2) provides: 39 Interpretation of Bill of Rights ‘When interpreting any legislation, and when developing the common law or customary law, every court, tribunal or forum must promote the spirit, purport and objects of the Bill of Rights.’ 35 Section 9 of the Constitution. education.36 In this contention they are supported by the amici curiae, Equal Education and the Centre for Child Law. The high court accepted these contentions. [43] A plain reading of ss 3(3) and 3(4) makes it clear that they are concerned with the MEC’s obligation to ensure that infrastructure is provided for compulsory attendance of all children in the province between the ages of seven and 15 years of age as envisaged by s 3(1).37 To this end these provisions require the MEC to determine the infrastructural shortcomings that impede the fulfilment of this objective and to report annually to the Minister on any remedial steps being taken to remedy these problems. They plainly have no relation to the governance of a school. [44] A contextual reading of these provisions lends further support to this interpretation. Section 3(1) imposes a duty on every parent to ensure a child’s attendance at school. A parent who fails to comply with this duty is liable, under s 3(6), to prosecution. Where the reasons for a child’s absence from school are unknown, s 3(5) imposes a duty on the HoD to investigate the circumstances of the child’s absence and to take the necessary remedial steps, including issuing a written notice to the parent to comply. No mention is made of any duty on a school regarding the compulsory attendance of children. Quite simply there is no hint in the text of s 3 that suggests that its purpose is to deal with any issue concerning the admission policy of a school, much less to override it. [45] Properly understood, s 3 deals with compulsory attendance and the provision of infrastructure for this purpose, and s 5 with admissions. Neither section qualifies or limits the other. There is simply no room in their language to support any other 36Section 29 of the Constitution provides: ‘(1) Everyone has the right– (a) to a basic education, including adult basic education; and (b) to further education, which the state, through reasonable measures, must make progressively available and accessible.’ 37 Section 3, under the heading ‘Compulsory attendance’, provides: ‘(1) Subject to this Act and any applicable provincial law, every parent must cause every learner for whom he or she is responsible to attend a school from the first school day of the year in which such learner reaches the age of seven years until the last school day of the year in which such learner reaches the age of fifteen years or the ninth grade, whichever occurs first.’ interpretation. The submission of the respondents that the Bill of Rights compels their interpretation requires us to ignore the language to achieve what they believe would be a socially desirable result – giving them the power to override the policies of governing bodies to advance the objectives of the Constitution. The lawmaker chose to give the power over admission policy to governing bodies so as to promote democratic school governance. And it limited the provincial education department’s role to the ‘minimum required for legal accountability’.38 I find nothing constitutionally offensive about this choice. [46] The facts of the case show how misplaced the respondents’ reliance on ss 3(3) and 3(4) is. The parent of the child and the department were not faced with the problem that the child would not be able to attend a school or be denied the right to receive a basic education – she had already been admitted to another school. Nor was the child’s right to equality at issue. On the contrary had the school succumbed to the department’s pressure to admit the child while others were awaiting their turn on the waiting list ahead of her, it would have unfairly given her preference over those children. [47] The facts also show that the department accepted the school’s admission policy in March 2010 and received the updated policy in line with reg 2(3).39 Both policies appear to have been carefully considered: they demonstrate that the governing body had determined the school’s capacity rationally after considering a range of factors relating to its available facilities and programmes. The first policy determined the capacity at 770 learners, and the second at 840. Included among the policy objectives are to ensure that the admission of learners is done in a ‘fair, practical and transparent manner’ and that ‘no learner will be unfairly discriminated against’. [48] Once having determined its admission policy it remains for the governing body to apply that policy. It is within the power of a governing body to apply its policy flexibly to meet the exigencies of a particular case – indeed, in this case the admission policy of Rivonia Primary School expressly reserved its right to exceed its capacity – and it 38 See Organisation, Governance and Funding White Paper para 3.17. 39 Regulation 2(3) provides that the governing body must make a copy of the admission policy of the school available to the Head of Department for certification. must naturally exercise that power when the occasion demands. Just as it must act rationally and reasonably when determining its policy so it must act rationally and reasonably in its application. [49] Counsel for the respondents contended that because the school was able to reduce its learner-educator ratio, this imposed an obligation on it to admit the child, failing which the MEC had the duty to override the school’s refusal to do so. But as I have said the school has been able to improve its learner-educator ratio in the lower grades by investing substantial funds for which the parents have themselves paid. I agree with the appellants’ contention that it is perverse for the department to use this fact to compel the school to accept more children. Were the department to be correct that would operate as a disincentive for parents to contribute by way of fees and fundraising to improve the quality of education of their schools, and would be at odds with their obligation under s 36(1) to supplement resources supplied by the State, according to their means. [50] Once Rivonia Primary School’s governing body lawfully adopted its admission policy, then subject to what I have said above regarding the HoD’s authority to intervene where this power is exercised unreasonably, unconstitutionally, or otherwise unlawfully, it bound the MEC and the HoD. They could not ignore it much less override it, no matter how well meaning. The HoD was quite entitled to ask the governing body to exercise the discretion embodied in the policy to exceed its capacity, so as to accommodate a learner who had not been placed, and the governing body would be obliged to consider such a request on reasonable and rational grounds. If the governing body or the principal on its behalf exercised that discretion on an incorrect basis and refused to admit the child, the Act and the regulations provided a safety valve. Section 5(9) read with reg 14 allowed an appeal to the MEC for the child who had been refused permission and reg 13(1)(a) gave the HoD, before the appeal, the authority to set aside the decision of the principal. But all that ought to have been done in accordance with the policy. That is not what occurred in this case. On the contrary, the HoD first issued an unlawful instruction to the principal to admit the child. Then the officials of the department were told that the governing body would shortly be meeting to consider the case, but far from awaiting its decision they proceeded to deposit the child nonetheless. [51] The high court, as I mentioned earlier, relied on reg 13(1)(a), as the immediate source of the HoD’s authority to compel the school to enrol the child. But the regulation gives the HoD no such power; it would be ultra vires if it purported to do so because it would be contrary to the statute. This much is trite. Regulation 13(1)(a) simply allows the HoD ‘to confirm or set aside’ a principal’s decision to refuse admission to a learner. That decision is one made under the school’s admission policy and the decision to confirm it or set it aside is likewise made under that policy. In any event, it is clear that on the facts of this case, the HoD did not purport to set aside Ms Drysdale’s decision. [52] It would not be out of place to observe that I find the approach of Mr Ngobeni and the department’s officials in this case most disturbing. There was not one bit of evidence to suggest that the school has ever refused admission to a child – including this child who happens to be black – on the grounds of race or has unfairly discriminated against any child on this basis. Counsel for the respondents quite properly accepted this much during the hearing. The school’s refusal to admit the learner in this case had nothing to do with her race or her background. It came about solely because her application was far down the waiting list. The department’s stated policy itself expressly requires admission to follow the chronological sequence of applications and the mother in this case was obliged to stand in line, just as the parents of the other learners who had submitted late applications had to do. She was not entitled to preferential treatment, from the school or the department. [53] But instead of treating this matter as an ordinary dispute relating to the application of the school’s admission policy the department opprobriously invoked the ugly spectre of race to obfuscate its unlawful conduct: In his answering affidavit, Mr Davids stigmatises the school as being in a ‘peculiarly privileged position that can primarily be linked to the historical disparities in the resourcing of public education under Apartheid’. It draws a learner enrolment, he continues, that remains disproportionately ‘white’ when compared to the overall demographic profile of the province. This theme is pursued in counsel’s heads of argument to make the case that s 39(2) of the Constitution compels an interpretation that disallows ‘privileged governing bodies in historically white areas to entrench racially discriminatory privileges bequeathed by Apartheid’.40 The facts simply do not sustain the suggestion that that occurred in this case, and an admission policy that did that would be unlawful. [54] To conclude, governing bodies are enjoined to determine school policies, including their capacity, while provincial departments are responsible for the professional management of schools and administration of admission. These functions must not be conflated. The determination of capacity must comply with national norms and standards set by the Minister and must be determined on reasonable and rational grounds. Just as a governing body may determine the school’s capacity, so too does it have a discretion to exceed that capacity if the circumstances require, and that discretion must also be exercised on rational and reasonable grounds. But it is not open to the HoD summarily to override that authority as occurred in this case. [55] I mentioned earlier that Ms Drysdale was sanctioned for failing to comply with the HoD’s unlawful instruction. Although the sanctions imposed on Ms Drysdale are not before us, I am confident that the department is sufficiently gracious to withdraw these sanctions in the light of this judgment. [56] In the high court the parties had agreed that no costs order would be made. In the result the appeal is upheld with costs, such costs to be paid by the first, second and third respondents. The order of the high court is, save for paras 6 and 7 thereof, set aside and the following order substituted in its place: ‘It is declared that the instruction given to the principal of the Rivonia Primary School to admit the learner contrary to the school’s admission policy, and the placing of the learner in the school, were unlawful.’ _________________ A CACHALIA JUDGE OF APPEAL 40 The Heads of Argument were drawn by Mr Berger’s predecessor, who was not available to argue the matter. APPEARANCES For first and second Appellants: G C Pretorius SC (with him A Kemack SC) Instructed by: Shepstone & Wylie, Johannesburg Webbers, Bloemfontein For first, second and third Respondents: D I Berger SC (with him Ms N Mji) Instructed by: The State Attorney, Johannesburg The State Attorney, Bloemfontein Further Interested Parties: S Budlender (with him J Brickhill) Instructed by: Mdlulwa Nkhuhlu Inc, Johannesburg Centre for Child Law, Pretoria Legal Resources Centre, Johannesburg

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 November 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. THE GOVERNING BODY OF THE RIVONIA PRIMARY SCHOOL & ANOTHER v MEC FOR EDUCATION: GAUTENG PROVINCE & OTHERS The Supreme Court of Appeal today held unanimously that the governing body of a public school – not the provincial education authorities – has the authority to determine the number of children that a school may admit as an incident of its admission policy. And further that a provincial government has no authority to override the school’s policy. The SCA therefore upheld an appeal by the School Governing Body of the Rivonia Primary School against a judgment of the South Gauteng High Court judgment on 7 December 2011 that came to the contrary conclusion. The SCA ordered the Gauteng MEC for Education, the Head of the Gauteng Education Department (HoD) and the District Director of Johannesburg East, the respondents, to pay the costs of the appeal. The dispute arose after the school principal, Ms Carol Drysdale, had refused to admit a child to Grade 1 because the school had reached its capacity, which the governing body had set in its admission policy. The learner’s mother had submitted a late application and was placed on a waiting list along with other late applications. She was placed at number 14 on the waiting list. The child’s mother was aggrieved at the decision and exerted pressure on the officials of the department to admit her child. The head of the Gauteng Education department, Mr Boy Ngobeni, instructed Ms Drysdale to admit the child early in February 2011 after the school year was already well underway. A few days later the child was brought to the school by her mother and accompanied by officials from the department. They asked Ms Drysdale and the chairman of the governing body, Mr Paul Lategan, to admit the child. Ms Drysdale and Mr Lategan asked for time so that they could meet with the governing body urgently to resolve the dispute. The officials, however, insisted that the school admit the child immediately. They produced a letter from Mr Ngobeni withdrawing Ms Drysdale’s responsibility to admit learners. And then proceeded to the Grade 1 classrooms where they deposited the child in one of them. The main issue in the appeal was whether the South African Schools Act 84 of 1996 gave the primary responsibility for determining the school’s capacity, as part of its admission policy, to the governing body or the provincial government. Put another way it had to decide whether the provincial government had the authority to override a school admission policy that had been adopted lawfully. The SCA said that the provincial government had made much of the fact that the school was located in an affluent, historically white suburb and had benefitted from Apartheid. This was done to justify the argument that the MEC and the HoD ought to have the power to override the policy to ensure that schools in historically white areas do not entrench racially discriminatory privileges bequeathed by Apartheid. But the facts showed that these assertions were not relevant to deciding the issue of whether the Schools Act gave the provincial authorities the power to override the admission policy of the governing body. The SCA held that on a plain reading of the relevant provisions of the Schools Act, no such power existed. It said further that the provincial government could not insist that the child was admitted contrary to the policy of the school governing body and ahead of other children on the waiting list. The SCA also said that the HoD’s decision to withdraw Ms Drysdale’s admission function was unlawful, and that it was confident that the sanction which had been imposed on her recently arising from a disciplinary hearing would be reviewed in the light of this judgment.

180

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 204/2017 In the matter between: G S VAN DER WESTHUIZEN APPELLANT W J BURGER RESPONDENT Neutral citation: Van der Westhuizen v Burger (204/2017) [2017] ZASCA 178 (1 December 2017) Coram: Ponnan, Majiedt and Swain JJA and Mokgohloa and Mbatha AJJA Heard: 17 November 2017 Delivered: 1 December 2017 Summary: Actio de ferris – defence of provocation – ostrich provoked – owner not liable. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Olivier AJ sitting as court of first instance): 1 The appeal is upheld with costs. 2 The order of the court a quo is set aside and replaced with the following order: „The claim is dismissed with costs.‟ JUDGMENT Swain JA (Ponnan and Majiedt JJA and Mokgohloa and Mbatha AJJA concurring): [1] An ostrich owned by the appellant, Mr Gerhard van der Westhuizen, which chased the respondent, Mr Willem Burger, gave rise to an action instituted by the respondent as plaintiff, against the appellant as defendant, in the Gauteng Division of the high court (Pretoria). The respondent alleged that in an attempt to escape from the ostrich he tripped over a piece of wood, tore his Achilles tendon and as a result suffered damages in the amount of R6 750 000. [2] By agreement between the parties, the court a quo (Olivier AJ), ordered that the merits of the claim be separated from the quantum of damages, in terms of rule 33(4) of the Uniform Rules of Court. After hearing evidence, the court a quo found that the appellant was liable to pay to the respondent such damages as he was able to prove in due course, together with the costs of the action. The appeal is with the leave of the court a quo. [3] The cause of action pleaded by the respondent was the actio de ferris in terms of which the bringing of wild or dangerous animals on or into a public place, or a place to which members of the public have access, was prohibited. The cause of action is based upon ownership and strict liability is imposed upon the owner of the animal, for the consequences of the animal‟s behavior. The victim is accordingly absolved from alleging and proving negligence on the part of the owner, which is presumed. [4] The respondent alleged that the incident occurred on a farm owned by the appellant and that the appellant had „introduced certain wild ostriches which do not naturally occur‟ onto the farm, alternatively, the appellant „tamed and domesticated an ostrich who roamed close to the dwelling on the farm, which in attacking the plaintiff. . . acted contrary to animals of its class‟. [5] Save for admitting ownership of the farm and that „undomesticated ostriches inhabit the farm‟, which amounted to an admission that the ostriches on the farm were wild, the appellant denied the remaining averments. On the evidence, however, it was common cause that the appellant had invited the respondent to his farm, where the respondent was chased by an ostrich owned and introduced onto the farm, by the appellant. [6] Only two of the defences raised by the appellant require consideration for the determination of the appeal. First, the appellant raised the defence of provocation, alleging that the respondent „provoked and harassed the ostrich/ostriches on numerous occasions prior to the alleged incident‟. Second, the appellant denied that in an attempt to escape from the ostrich, the respondent ran towards the dwelling on the farm and in doing so, tripped over a piece of wood and tore his Achilles tendon. The respondent therefore had to prove that the behaviour of the ostrich was the cause of his injury. [7] The court a quo dismissed the defence of provocation on the ground that: „. . . only if the provocation was the immediate catalyst for the resulting injury, would it qualify as a defence. In my opinion there was no immediate provocation.‟ It also held that causation had been proved because, the „injury would not have occurred had it not been for the plaintiff escaping the ostrich‟s attack in the first place‟. [8] In order to decide whether the court a quo was correct in dismissing these defences, the evidence of the manner in which the respondent teased the ostrich on previous occasions, as well as the conduct of the respondent immediately prior to being chased by the ostrich, must be examined. [9] Mr Andre de Lange and Mr Martinus Steyn described how the respondent had teased a male ostrich on the appellant's farm on several occasions. The respondent would entice the ostrich to approach him with mielie pips in his hand. Whilst the ostrich was busy eating out of his hand he would grab it by the neck and push its head down. The ostrich would then, according to these witnesses, flap its wings and perform comical „dance steps‟ and when the respondent released its head, the ostrich would stagger backwards, much to the amusement of those watching. Mr Pieter Kotze described an incident where the respondent said that he had worked with ostriches and knew how to catch an ostrich. He took a hat from one of the bystanders, placed it on the head of the ostrich, grabbed it by the neck and said this was how it was done. [10] Mr Hendrik Gerber gave evidence of a conversation with the respondent concerning the respondent‟s painful foot, which he had injured in the incident. The respondent described in terms identical to that of the appellant‟s witnesses, how he had teased the ostrich. He admitted it was his fault that the ostrich chased him. The appellant, when giving evidence, added that he had asked the respondent on numerous occasions to leave the ostrich alone, because he made it angry. [11] The respondent, however, denied ever grabbing the ostrich by its neck or feeding it from his hand. He maintained he only threw food on the ground for the ostrich, because he was scared of it. He acknowledged he had owned ostriches, but emphasised he was very scared of them and gave them away. His evidence that he was scared of ostriches, is, however, inconsistent with his description of what he maintained had occurred when he arrived on the farm with the appellant, the night before the incident. He said he saw a male ostrich near the house flapping its wings and snapping its beak. Its beak and knees were red and he realised from his experience with ostriches that it was very angry and dangerous. The ostrich walked towards them so he quickly grabbed the ostrich by its head and pushed it down. After the appellant had gone to the door of the house, he quickly released the ostrich and ran behind a swing to shield himself from the ostrich. He explained this was how an angry ostrich had to be handled. The appellant, however, denied the incident saying it was dark when they arrived on the farm and ostriches do not walk around in the dark. [12] When it was put to the respondent that witnesses would give evidence that they had seen him teasing the ostrich, he queried what ostrich they were talking about. He maintained that the ostrich that injured him was not yet on the appellant's farm at the time of the incident. In similar vein, the only substantive challenge by respondent's counsel to the evidence that the respondent had teased the ostrich, was to put the proposition to the appellant‟s witnesses, that they were unable to distinguish between the male ostriches on the farm. They were accordingly unable to say that the ostrich which the respondent had allegedly teased, was the ostrich which chased him. [13] This proposition was, however, inconsistent with the respondent‟s pleaded cause of action. It was alleged that the appellant, „tamed and domesticated an ostrich who roamed close to the dwelling on the farm, which in attacking the plaintiff. . . acted contrary to animals of its class‟. In other words, the male ostrich which roamed close to the house and was tame, had attacked him. When giving evidence, he conceded that this ostrich was familiar with people and moved around the camp. In my view, when due regard is had to the respondent's own evidence as to how he dealt with the ostrich when it was aggressive, the evidence of the appellant's witnesses, established on a balance of probabilities that the respondent had previously teased this ostrich which came near the house on a regular basis, and that this was the ostrich that chased him. [14] It is against this background that the evidence of the respondent as to how the incident occurred, as well as the evidence of Mr Pieter Kotze who witnessed it, must be examined. The respondent said he was assisting the appellant to load blue wildebeest into a trailer when he suddenly noticed the ostrich standing on the other side of the bakkie. At this stage he was standing near the back of the trailer and the ostrich walked towards the front of the bakkie. The ostrich was watching him whilst it approached and when asked to describe its demeanour he said that „. . . hy het net gewoonweg geloop‟. However, in cross-examination he maintained that the ostrich was snapping its beak, and was in a dangerous mood. It was not flapping its wings, but was warning him. He then moved to the front of the bakkie to scare it away, but was unsuccessful and it continued approaching him. He then ran for the door of the house because the ostrich was close to him. Near to the door of the house was a slight incline where he slipped and fell. Whilst lying on his stomach he saw the ostrich nearby watching him and it took two steps. He then jumped up, started running and accidentally stepped on a small wooden paling situated between the plants at the door, which caused the injury to his Achilles tendon. [15] The respondent denied that anybody was present when the ostrich chased him or that Mr Kotze was in the vicinity. He was emphatic that he was alone and maintained that Mr Kotze could not have been there. It was put to him that Mr Kotze would testify that the ostrich was there all the time, eating out of a food trough between the bakkie and the house, which he denied. It was then put to him that Mr Kotze would state that the respondent walked from the bakkie towards the house, which meant that he had to walk past the ostrich. He then saw the respondent bend down and pick up something which he threw at the ostrich. The respondent then admitted that he had thrown a small stone towards the ostrich. [16] Mr Kotze gave evidence that he was in the camp, sitting by the fire, drinking coffee and waiting for the farm workers to arrive. He saw the respondent walking from the bakkie towards the house, whilst the ostrich was feeding at the trough. When the respondent saw the ostrich he threw something at it and the ostrich then chased him. The respondent ran towards the front door of the house and fell. When he stood up he looked around, saw the ostrich looking at him and quickly ran into the house. The ostrich did not peck or kick the respondent and he was not aware that the respondent had been injured. [17] There are two important aspects in the evidence of the respondent which illustrate the improbability of his version of the incident. When giving evidence in chief he stated that the ostrich was behaving normally, whereas in cross-examination he described its behaviour as dangerous, adding that it was snapping its beak. More importantly he failed to disclose he had thrown a stone at the ostrich, and it was only after he was confronted with the evidence of Mr Kotze, that he admitted this. His denial that anybody else was present, is also refuted by this evidence. [18] The inherent improbability of the respondent‟s version of the incident is revealed when the evidence that he teased the ostrich on numerous occasions, is considered. Obviously, this evidence cannot be used to infer that the ostrich harboured a grievance against the respondent. This would constitute the impermissible attribution of human emotions to the ostrich, whereas its significance lies in revealing the attitude of the respondent to the ostrich. He was not fearful of the ostrich and had mercilessly teased it. On his evidence when it had approached the previous night in a far more aggressive manner, he confidently dealt with it, repulsing any threatened attack. It is therefore improbable that having initially described the behaviour of the ostrich as normal, he would be frightened simply because it looked at and walked towards him. Seen in this context it is probable that the respondent admitted to Mr Gerber, that it was his fault that the ostrich chased him. The court a quo accordingly erred in rejecting the evidence of Mr Gerber on the basis that it „. . . was sketchy and lacking in convincing detail‟. [19] The appellant accordingly discharged the onus of proving on a balance of probabilities that the respondent‟s conduct in throwing a stone at the ostrich, provoked its behaviour in chasing him. The court a quo therefore erred in dismissing the defence of provocation on the basis that there was no immediate provocation of the ostrich by the respondent. In dealing with this defence, the court a quo, however, noted that although provocation was not listed as a specific defence to strict liability arising from the attack of a wild animal in the case law, it was a defence to the actio de pauperie, and it would therefore be considered for the sake of completeness. [20] In Bristow v Lycett 1971 (4) SA 223 (RA) at 234, the defences to a claim for damage caused by a wild animal were said to include where „the plaintiff's contributory negligence contributed to his injury‟. Provocation of the wild animal by the plaintiff was not expressly included as a defence. However, there can be no basis in principle or logic to recognise as a defence the case where the negligent conduct of the victim contributed to his or her injury, but not where the victim‟s intentional conduct provoked the attack. The defence was recognised in Klem v Boshoff 1931 CPD 188 and Hanger v Regal & another [2014] ZAFSHC 236; 2015 (3) SA 115 (FB) para 5. [21] This conclusion renders it unnecessary to examine the issue of causation. This is because the appellant cannot be liable for an injury sustained by the respondent in attempting to escape from the ostrich, where the respondent provoked the chase. I will do so, however, for the sake of completeness. The evidence of the respondent and Mr Kotze was that after the respondent had fallen and was at the mercy of the ostrich, it did not attack him. They both described how the ostrich stood looking at him whilst he was lying on the ground and when he stood up to run into the house. The ostrich therefore did not display any aggressive behaviour towards the respondent after he had fallen, and his injury was not caused by the pursuit. I accordingly disagree with the conclusion of the court a quo that „. . . it was one continuous event; the fall did not interrupt the flight, and the resulting injury would not have occurred had it not been for the plaintiff escaping the ostrich‟s attack in the first place‟. [22] In the result the following order is made: 1 The appeal is upheld with costs. 2 The order of the court a quo is set aside and replaced with the following order: „The claim is dismissed with costs.‟ K G B Swain Judge of Appeal Ponnan JA [23] I have had the benefit of reading the judgment of Swain JA. I agree with his conclusion that the appeal must succeed with costs. It has been said that there „can be few branches of the law which are more complex and confusing than the liability for damages caused by animals‟. 1 I am thus rather more trepidatious as to the reasons for my concurrence in the outcome of the appeal. [24] The complexity centres largely around the liability for pauperies, meaning damage „done without legal wrong on the part of the doer‟.2 As long ago as 1930, De Villiers CJ observed in South African Railways & Harbours v Edwards3 „that South African decisions had not been harmonious, which is not to be wondered at seeing that hardly two commentators agree on the interpretation to be placed upon the law‟.4 The Chief Justice, was there referring to the actio de pauperie, which had been 1 Bristow v Lycett 1971 (4) SA 223 (RAD) at 227A. 2 Bristow at 227B. 3 South African Railways & Harbours v Edwards 1930 AD 3 at 9. 4 Ibid. carefully considered some three years earlier in O’Callaghan NO v Chaplin.5 He thought it useful to lay down the relevant principles in relation to that remedy, which he summarised thus: „(1) The actio de pauperie is in full force in South Africa. But the right to surrender the offending animal in lieu of paying damages --- noxae deditio --- is obsolete with us. (2) The action is based upon ownership. The English doctrine of scienter is ‟not a portion of our law. (3) The action lies against the owner in respect of harm (paeperies) done by domesticated animals, such for instance as horses, mules, cattle, dogs, acting from inward excitement (sponte feritate commota) if the animal does damage from inward excitement or, as it is also called, from vice, it is said to act contra naturam sui generis; its behaviour is not considered such as is usual with a well-behaved animal of the kind. (4) On the other hand, if the act was not due to vice on the part of the animal but was provoked-in other words if there has been concitatio, the action does not lie. (5) Dating back as this form of remedy does to the most primitive times, the idea underlying the actio de pauperie, an idea which is still at the root of the action, was to render the owner liable only in cases where so to speak the fault lay with the animal. In other words for the owner to be liable, there must be something equivalent to culpa in the conduct of the animal. (6) Hence if the fault lies with the injured person himself he cannot recover, as he would have only himself to blame. If for instance he has provoked the animal, or has acted in such a way that the outburst could reasonably have been foreseen. (7) But stroking or petting a horse is not considered to be provocation (concitatio). If a horse kicks when petted, its behaviour is due to vice. The fault lies with the horse, not with the man who petted it, unless he had reason to know that the horse might kick. The learned Judge in the present case is of opinion that if the attentions of a person who stroked or petted a mule were met with a kick, such person would only have himself to blame for doing such a foolish thing. The kick, in the case of a mule, could have been foreseen. (8) Alfenus gives the following instance. A groom was leading a horse into a stable. The horse sniffed at a mare which thereupon kicked the groom on the leg. The jurist holds that the action lies against the owner of the mare. In other words the incitement did not justify the mare in kicking. This case has been much debated. But whether Alfenus was right or wrong, 5 O’Callaghan NO v Chaplin 1927 AD 310. in his view the solicitations of the horse were not considered to excuse the behaviour of the mare. She was said to have acted from innate perverseness. (9) The action does not lie if the animal was provoked by a third party, if for instance the animal was struck by a goad and kicks out. (10) Nor does the action lie if the injury was due to pure accident (casus); here nobody is considered to blame . . .‟6 [25] The actio de pauperie is available against the owner of a domestic animal that has caused damage. Liability is based purely on ownership of the animal. Some academic writers have argued against the notion of liability based purely on ownership and advocated for a shift to the risk principle.7 In terms of the risk principle a person who keeps or controls an animal in his own interest is liable without fault because he creates an increased risk of harm.8 In Loriza Brahman v Dippenaar,9 this court refused to declare the remedy obsolete, holding that the action de pauperie still served its purpose and that it was neither contra bonos mores, nor unconstitutional. Since the action is based on the principle that the owner of a domestic animal is liable for damage only when it caused damage whilst acting contra naturam sui generis, the remedy is traditionally restricted to domestic animals. The contra naturam requirement requires some kind of attack or unpredictable action from the animal, actions that are to be expected as part of the animals‟ natural behaviour do not qualify.10 6 South African Railways supra fn 3 at 9-10. 7 According to J Neethling et al Law of Delict 5ed (2006) at 330, the risk or danger theory means that „where a person‟s activities create a considerable increase in the risk or danger of causing damage, that is, an increased potential for harm, there is sufficient for holding him liable for damage even in the absence of fault. Whether an increase in risk is “considerable” enough in a specific case, is difficult to ascertain. For this reason the danger theory has been subject to much criticism‟. 8 Neethling supra fn 7 para 2.1.1.4. 9 Loriza Brahman en 'n ander v Dippenaar 2002 (2) SA 477 (SCA). 10 A J Van der Walt, The Law of Neighbours Dangers and threats posed by neighbours 1st ed (2010), Chapter 7 at 333. [26] According to Le Roux and others v Fick11 „[i]n the course of time the action de pauperie was extended by means of the actio utilis to all animals, and for a long time it appears to have been the only law applicable to cases of damage from animals. When a wild animal inflicted damage there appears to have been no other remedy till the lex Aquilia and the edict [the edictum de feris] were promulgated. .. . The result . . . seems to have been that an actio de pauperie lay in all cases of damage caused by animals when the damage was brought about through the fault of the party using the animal or of some third party. The owner could free himself from all pecuniary liability by delivering the animal where there had been no fault on his part, and when the damage done was contrary to the natural disposition of the animal. If a man allowed his dog or wild animal to be in a public place he was liable to be sued for a penalty equal to double the amount of damage he might cause, and also to have an action de pauperi brought against him. If damage was caused by a wild animal in any other than a public place, the owner could apparently free himself from liability upon abandoning the animal, and would incur no further liability unless he had been in fault, as in not having fastened the animal up properly.‟ [27] The edictum de feris has its genesis in Republican Rome, when many individuals kept wild animals.12 On account of the risk posed by these animals, the edict was enacted, which prohibited the bringing of wild or dangerous animals on or into a public place.13 According to Ashton-Cross, to admit of an action under the edict, „the animal must have been owned at the time it caused the damage; must itself have been either on a place of public passage or near enough to injure a person or property in such passage; and the damage must have been done qua 11 Le Roux & others v Fick (1879) 9 Buch 29 at 36. 12 Lawsa 3ed para 424. 13 Neethling supra fn 7 at 334 para 2.1.1.3. vulgo iter fit, on the public way‟.14 The language of the edict is wide, and includes any animal of a vicious propensity calculated to do harm.15 The mere breach of the edict rendered the owner responsible. Negligence was presumed; the rationale being that the owner of an animal, who allowed it to stray onto a public street contrary to the principle of the edict, was considered to be guilty of negligence. 16 The actio de pauperie and that under that edict were concurrent remedies.17 Liability in these actions resulted from the ownership of the animal, apart from any dolus or culpa on the part of the owner. Thus both in the Roman Law and that of Holland, the responsibility for damage done by one‟s animal is founded on ownership and not on negligence.18 [28] It will entirely depend on the circumstances of each particular instance, whether an action de pauperie or one under the edict is the suitable remedy.19 The distinction in principle between these two remedies have not always been kept in mind. In O’Callahan’s case Kotze JA stated that the „action de pauperie will be available against the owner of a dog biting an innocent person, that is a person who was lawfully at the place where he was bitten, is beyond doubt, both in the law of Holland and of South Africa.‟20 Although Innes CJ said that he would guard against being taken to imply that the edict is not part of our law, one finds no positive statement in respect of the actio de feris in the course of the judgment.21 Uncertainty has accordingly been expressed as to whether the actio de feris is still recognised in 14DIC Ashton-Cross Liability in Roman Law for damage caused by animals (1951-1953) Cambridge Law Journal II at 396-397. 15 O’Callaghan supra fn 5 at 346. 16 Ibid at 368. 17 Ibid at 340. 18 Ibid supra fn 5 at 344. 19 Ibid supra fn 5 at 366. 20 Ibid at 366-367. 21 At 330. modern South African law.22 Barry Nicholas describes the provision in the Edict as „ostensibly a police regulation forbidding the keeping of certain animals in certain places and imposing liability for the consequences of any breach of the regulation‟.23 In that regard, Wessels JA made the point in O’Callaghan that: „[i]n fact we know very little indeed about this Edict and we have no idea exactly what the conditions were in Rome when the Edict was proclaimed nor the mischief which was aimed at. It seems likely that the Edict was intended as a general provision against bringing any ferocious animal on to the market place or in places where people were in the habit of walking and that the words dog, boar, lion were only added by way of explanation to point out the kind of animals that were not to be brought there.‟24 [29] In Parker v Reed,25 De Villiers CJ said: „The presumption is that the law relating to pauperies is still in force, but this presumption cannot prevail in the absence of any recognition, judicial or otherwise, of the existence of such a law, and in the face of repeated decisions which require proof of some degree of culpa in order to attach liability to the ownership, custody or use of property.‟ It is true that Parker’s case has been overruled. But, as Beadle CJ observed in Bristow v Lycett, 26 „this passage from the “Old Chief‟s” judgment seems sound enough‟. 22 See Visser (2006) 697 THRHR 304 – 306, who cites several South African academics who express uncertainty with regard to the existence of the edictum de feris in modern South African law. See also J C Van der Walt & J R Midgley Principles of Delict 4ed (2016) at 49 par 34; Neethling supra fn 7 para 2.1.1.3. See also Hanger v Regal & another [2015] ZAFSHC 63; 2015 (3) SA 115 at 334. 23 Nicholas „Liability for Animals in Roman Law‟ 1958 Acta Juridica at 185. 24 O’Callaghan supra fn 5 at 371. 25 Parker v Reed 21 SC 496. 26 Bristow supra fn 1 at 230A. [30] The „judicial recognition‟, such as it is, seems to have come from the then Rhodesian Appellate Division. In Bristow v Lycett, Beadle CJ framed the rule in the following terms (at 234-5): „1. In the case of damage by a wild animal kept in captivity negligence on the part of the owner is presumed, and it is unnecessary for the plaintiff to plead or prove it. 2. The defendant can, however, escape liability by proving either – (a) the plaintiff was a trespasser or the plaintiff‟s contributory negligence contributed to his injury; or (b) the damage was caused by the unlawful act of a third party or the third party‟s animal; or (c) The damage was caused by casus fortuitus or vis major. 3.The above principles are not affected by the fact that the wild animal concerned may have been reduced to a state of semi-domesticity or that it did not act with any ferocious intent.‟ [31] Beadle CJ observed (at 232G-233B): „I have stressed the history of the disappearance of the actio utilis de pauperie at some length because its disappearance helps to determine the precise liability for pauperies committed by a wild animal under the lex Aquilia as we know it today. This liability is, as I have attempted to show, coincident with that under the old actio utilis de pauperie. The history of the disappearance of the actio utilis de pauperie is therefore more than a matter of antiquarian interest because, by understanding the ambit of this old action and the reasons for its disappearance, it is possible to arrive at a reasonably precise definition of the liability of an owner for damage done by his wild animal under the modern law. For how long the actio utilis under the lex Aquilia has existed in its present form, and precisely when the actio utilis de pauperie became a legal antiquity is, however, now purely a matter of antiquarian interest. If, however, I am wrong in assuming that the actio utilis de pauperie has been absorbed by the actio utilis under the lex Aquilia, then the actio utilis de pauperie must still survive today, as there is no ground for holding that the legal principles which it enforced have become obsolete. Whether the action under the lex Aquilia now provides the same remedy as that formerly provided by the actio utilis de pauperie, or whether the two actions still exist side by side, is really only a matter of academic interest, because in either event the liability of an owner for pauperies committed by his wild animal will be the same, and, as I will show later, as a matter of procedure, provided the relevant facts are pleaded, it is unnecessary to plead whether the case is brought under one action or the other.‟ [32] The judgment of Beadle CJ has not escaped criticism (see Carey Miller 1972 SALJ 176).27 Miller, who criticises the judgment both for certain historical limitations and theoretical shortcomings, suggests that the learned Chief Justice erred in the formulation of the rule. 28 To be fair to Beadle CJ, he did acknowledge that little is said in the books about pauperies committed by a wild animal. Most modern day writers, so observed the Chief Justice, have little to say on this subject, confining themselves to the injured party‟s remedy to the actio utilis under the lex Aquilia. He observed that he could find no reported case in South Africa in which the actio utilis de pauperie was invoked when the owner of a wild animal was sued for pauperies committed by his wild animal. The case nearest in point, so he said, was the case of Le Roux and Others v Fick. In that case a dog, apparently acting secundum naturam sui generis, killed an ostrich in a public street. It was held that there was no culpa on the part of the owner, but that he was liable for the pauperies committed by his dog under the old Aedilitian action, which made the owner of a fierce dog or wild animal liable for pauperies committed by that animal in any public place. Accordingly, so held Beadle CJ, „[t]he old Aedilitian action must therefore be considered as having been imported into the Cape and . . . it would seem, therefore, that the Aedilitian action is still part of our law‟. He added: „[i]f an old Roman action which made the owner of a wild animal liable qua owner for that 27 D L Carey Miller Damage by Wild Animals – Choice of Touchstone (1972) 175 SALJ at 176. 28 See also Nicholas supra fn 23 at 185 and Ashton Cross supra fn 14 at 396-397. animal‟s pauperies committed in a public place is still part of our law, it can be argued with some force that logically a similar old action which made him liable qua owner for pauperies committed by his animal in other places should also be still in force.‟ Van der Merwe observes that aside from Le Roux v Fick there is no other decision directly on the point.29 [33] It may be, as Miller notes, that it is probably not a matter of great practical importance to discover the true basis of the Roman-Dutch law rule. But, he does rightly opine „conceivably, it could be argued that if the basis is solely Aedilitian then the remedy, with the edict, has fallen into desuetude‟. Indeed, support for his view is to be found in the judgment of Wessels JA in O’Callaghan, who expressed very grave doubt as to whether „this police regulation of the Romans‟, „can be said to have force under our present conditions‟.30 He added: „[t]he whole liability is based on the transgression of a public measure.‟ Those observations are undoubtedly cogent. [34] It has been suggested that the edict could be replaced by the Aquilian action as supplemented by the actio de pauperie in the case of damage by ferocious dogs.31 But, this view, so it has been asserted, „overlooks the fact that the edictum de feris lies for a breach of the edict and that consequently the defences of contributory negligence, provocation, negligence of a third party or vis maior will not apply once the animal has been taken to the public place by the defendant‟. Here, as well, there appears to be no consensus by our academics. The defence that the plaintiff was unlawfully on the premises has however been mentioned by the courts 29 C/f Visser supra fn 22 at 304. 30 O'Callaghan at 377. Innes CJ did describe the edict as something more than a mere municipal bye-law. 31 Lawsa 3ed para 308. and it has been suggested that the other defences to the action de pauperie should also be regarded as applicable to the edict.‟ [35] In concluding this part of the judgment, I must say that it would probably require someone with a more profound knowledge of this area of the law to pronounce on the possible obsolescence of the remedy. Importantly, Innes CJ did remind us though (O’Callaghan at 327) that „[i]t is the duty of a Court – especially of an appellate tribunal – so as to administer a living system of law as to ensure – without the sacrifice of fundamental principles – that it shall adapt itself to the changing conditions of the time. And it may be necessary sometimes to modify, or even discard doctrines which have become outworn‟. On my reading, everything appears to point to an action based on the edict being unsuited to modern conditions. Happily though, for present purposes it is unnecessary for me to resolve this problem. Miller wonders whether the time has not come for a comprehensive modern statute to replace „the rules which are largely historical in origin and sometimes difficult to apply‟. There is much to recommend such a course, which he suggests, has been followed in England. [36] Against that backdrop, I turn to the present appeal. As was repeatedly pointed out by Innes CJ in his judgment in the O'Callaghan's case, the owner of an animal is not liable to another when that other person is himself the cause of his injury. The learned Chief Justice referred to Storey v Stanner 1 HCG 40, where Laurence J is reported to have said: „[b]y the ancient and modern civil law, and by the present law of this Colony, the owner of a dog, or other dangerous animal, is responsible for injuries or pauperies committed by that animal . . . provided there is no negligence or improvidence on the part of the person injured, or other impropriety of conduct on his part which directly caused or mainly contributed to cause the injury‟.32 The Chief Justice added (at 329): „I also agree with Laurence J, in thinking that there must have been no ‟substantial negligence or imprudence” on the part of the person injured --- by which I understand no unreasonable conduct contributing to the injury. The basis of that limitation of the owner's liability is to be found in the Digest. If the injury were due to provocation by the injured person no compensation could be claimed de pauperie. . . . So that there is direct authority for the application in pauperien actions of the fundamental principle that no man can recover damages for an injury for which he has himself to thank.‟33 [37] As more fully set out in the judgment of my colleague Swain JA, when the respondent first saw the ostrich that morning it was ambling along, minding its own business. In its direct path to him lay the bakkie and trailer. For reasons that remain unexplained, he moved from the relative safety of that position to the front of the bakkie. In so doing he also brought himself closer to the ostrich. Nor, was the respondent able to explain why he did not simply climb onto the trailer or seek refuge within the confines of the bakkie, thereby removing himself from what he then subjectively perceived to have been harm‟s way. What is more, he then armed himself with and threw an object at the ostrich. Until that point, there was nothing in the conduct of the ostrich that, objectively viewed, constituted a danger to him. Only then, did the ostrich direct its attention to the respondent. That, it would seem, prompted him to run toward the house. Even when he lost his footing and fell on the first occasion, he was still not attacked by the ostrich. Instead, it stopped and looked at him. The respondent then picked himself up and once again attempted to make his way into the house. That is when he stepped awkwardly and snapped his Achilles tendon. Even then, he was still not attacked by the ostrich, which eventually turned and simply walked away. Thus, even on an acceptance that the actio de feris 32 O'Callaghan supra fn 5 at 326. 33 Harmse v Hoffman 1928 TPD 572 at 574-575. availed him, the respondent, to borrow from Innes CJ has himself to thank for his injury. It follows that that the appeal must succeed as his claim ought to have been dismissed with costs by the trial court. V M Ponnan Judge of Appeal Appearances: For the Appellant: T Potgieter SC (with J L Mÿburgh) Instructed by: Prinsloo Bekker Inc., Pretoria Symington & De Kok Attorneys, Bloemfontein For the Respondent: T P Kruger SC Instructed by: Marais Basson Attorneys, Pretoria Albert Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 1 December 2017 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. G S Van der Westhuizen v W J Burger (204/2017) [2017] ZASCA 178 (1 December 2017) Media Statement The SCA today upheld an appeal against an order granted by the Gauteng Division of the High Court (Pretoria) declaring that the appellant was liable to pay to the respondent, such damages as the respondent was able to prove, as a result of an injury the respondent sustained, after being chased by an ostrich owned by the appellant. It found that the court had erred in concluding that there was no immediate provocation of the ostrich by the respondent and held that the appellant had discharged the onus of proving on a balance of probabilities, that the respondent's conduct in throwing a stone at the ostrich, provoked its behaviour in chasing him. It was held that provocation of a wild animal by the victim of an attack, was a defence to the imposition of strict liability on the owner of the wild animal. --- Ends ---

1420

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 647/09 In the matter between: THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Appellant and PLASMAVIEW TECHNOLOGIES (PTY) LTD Respondent Neutral citation: CSARS v Plasmaview Technologies (Pty) Ltd (647/09) [2010] ZASCA 135 (1 October 2010) Coram: Mpati P, Cloete, Lewis and Tshiqi JJA and Bertelsmann AJA Heard: 2 SEPTEMBER 2010 Delivered: 1 OCTOBER 2010 Summary: Customs and excise – tariff determination – complete television sets – whether importer may claim rebate. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: North Gauteng High Court (Pretoria) (Prinsloo J sitting as court of first instance). 1. The appeal is allowed with costs, including the costs of two counsel. 2. The order of the court below is set aside and replaced with the following: 'The appplication is dismissed with costs, including the costs of two counsel.' ________________________________________________________________ JUDGMENT ________________________________________________________________ BERTELSMANN AJA (Mpati P, Cloete, Lewis and Tshiqi JJA concurring) [1] The appellant is the Commissioner for the South African Revenue Service, appointed in terms of the South African Revenue Service Act 34 of 1997. He is responsible for inter alia the administration of the Customs and Excise Act 91 of 1964. The respondent is Plasmaview Technologies (Pty) Ltd (Plasmaview) a company. [2] The Commissioner appeals against a judgment and order of the court below (Prinsloo J North Gauteng High Court Pretoria) which reviewed and set aside what was said to be a determination, dated 27 July 2006, allegedly made by him in the exercise of the powers conferred upon him by the Act. [3] Plasmaview had imported fully assembled televisions sets with plasma or liquid crystal display (LCD) screens from Korea during 2006. These sets were declared under tariff heading 8528.21.20 which allowed a full rebate under rebate item 460.16. [4] Plasmaview relied on a tariff determination dated 20 December 2005 as justification for declaring the television sets in the above manner. The tariff determination was made at a stage when it imported the screens and TV tuners separately. This determination was referred to as 'Plasma 1' in the court below and this nomenclature will be retained in this judgment. The fully assembled TV sets were only imported once a copy of 'Plasma 1' was made available to the respondent. [5] On 27 July 2006, the author of that tariff determination, Mr Pool, amended his reasons for classifying the screens without tuners under tariff heading 8528.21.20, but did not amend the determination that that tariff heading applied to the screens in the condition he had considered them. He did not inform the respondent of this amendment, which is referred to as 'Plasma 2'. [6] When the Commissioner investigated the importation of the assembled television sets through his Post Clearance Inspection (PCI) team from about May 2006, his officials concluded that the fully assembled television sets had been cleared incorrectly and assessed the respondent by issuing two schedules in the amounts of R 8 924 191, 69 and R 6 591 987, 90 respectively, representing both underpaid duty and VAT. [7] Believing that 'Plasma 2' had formed the basis upon which these assessments were made, Plasmaview lodged an appeal against them and at the same time launched a review application to have this supposed determination set aside. In the same proceedings, Plasmaview applied for a declaratory order that the amounts assessed were not owing to the appellant. [8] The court below accepted that 'Plasma 2' represented a determination that, in the absence of prior notice to Plasmaview, amounted to administrative action that was unfair to it and granted the relief sought. The Commissioner was ordered to pay costs, including those of senior counsel. [9] The Commissioner on appeal disputes the finding that 'Plasma 2' is a determination; argues that it therefore does not constitute administrative action and submits that the declaratory order should not have been granted. The appeal is with the leave of the high court. The salient facts [10] During 2005, the respondent imported eight consignments of LCD screens from Korea into South Africa. The port of entry was East London. The screens were described by the respondent as computer monitors with 81cm or 94 cm screens. They were cleared as 'input display units for automatic data processing' under tariff heading 8471.60, under which they would not have attracted any customs duty. [11] One of the SARS officials, Mr Putter, inspected the eight consignments. He found screens that were not fitted with TV tuners on importation, but were equipped with the tuners very soon after they had been delivered to the respondent’s agents in East London. [12] Putter was of the view that the LCD screens were dutiable. He referred the question of the tariff applicable to these items to his head office, which determined that the screens were incomplete reception apparatus for television sets, attracting customs and ad valorem duty. They were classified under tariff heading 8528.21.30. This classification, it was common cause, constituted a determination in terms of s 47(9)(a)(i)(aa)of the Act ('the LCD determination'). Plasmaview duly amended the tariff heading under which these screens became subject to duty by submitting correcting vouchers in respect of the eight consignments. [13] While importing LCD screens, Plasmaview also imported 11 consignments of plasma screens. Its agent requested Pool, a tariff specialist employed at that time at the Commissioner's head office, to determine the correct tariff applicable to these screens. Pool concluded on 20 December 2005 that the plasma screens were 'reception apparatus for television' and ought to be cleared under tariff heading 8528.21.20. [14] This tariff heading reads: Head- ing Sub- Heading CD Article Description Stati stical Unit Rates of Duty Reference General EU SADC 85.28 8528.2 8528.21 .10 .20 Reception Apparatus for Television, Whether or Not Incorporating Radio- broadcast Receivers or Sound or Video Recording or Reproducing Apparatus; Video Monitors and Video Projectors: * Refer to General Rebates of Customs Duties and Fuel Levy 460.16 Temporary Rebates of Customs Duties * Refer to Ad Valorem Excise Duties from Page 691 ▬Video monitors: = Colour: - With a screen size exceeding 3m x 4........... - With a screen size not exceeding 3 m x 4 u u free 25% free 22% free free A1/1/1273 w.e.f. 1/1/05 m [15] Pool added that it was the view of his office that 'television monitors are video monitors' and that 'television receivers incorporating screens . . . qualify as video monitors’. He motivated his determination in part as follows: 'CLASSIFICATION: To qualify as a television set, a video monitor must either incorporate a tv tuner or be otherwise designed for completion into a television set. No evidence of this nature has been presented by your office. Classification within TH 8528.21.20 cannot be challenged on the basis of the available information. It should be noted that it is in any event the position of this office, in line with the Explanatory Note to heading 85.28, that television monitors are video monitors and would qualify for entry under rebate item 460.16, providing that they comply with all the other requirements of the rebate item. EN 85.28 reads in pertinent part: "This heading covers television receivers (including video monitors and video projectors)" . . . . The meaning of this syntax could hardly be plainer: included under television receivers are video monitors and video projectors. . . . . HOLDING TH8528.21.20 applies to the goods at issue. They are admissible under rebate item 460.16 insofar as they comply with all the other requirements of this rebate item. Tariff Determination Tariff Code 8528.21.20/460.16 Determination Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: Video monitors: Colour: With a screen size not exceeding 3m x 4m Video monitors: Provided that a certificate from the South African Bureau of Standards is presented at the time of entry that the video monitors have more than 600 resolution lines. Description Plasma screens (42 inch) not incorporating tv tuners: PV 4201 S and PV 4201 . . . .' [16] By virtue of this determination, these screens qualified for a full rebate of duty under rebate item 460.16. Pool’s advice was sent to the respondent’s clearing agents by way of an e-mail on 3 January 2006. Plasmaview then applied to the Controller at East London on 5 January 2006 for leave to substitute the bills of entry of the LCD screens to reflect tariff heading 8528.21.20 rather than 8528.21.30, in order to qualify for the full rebate. This request was granted on 13 March 2006 subject to the payment of penalties. [17] It must be emphasised that the plasma screens to which Plasma 1 applied were imported, as the LCD screens had been up to that time, without TV tuners. Upon receiving Pool’s determination, Plasmaview arranged with the manufacturer in Korea to fit both the LCD as well as the plasma screens with TV tuners, so that they were imported as fully assembled television sets. The assembled sets were imported from January 2006. The full rebate was claimed under rebate item 460.16 as before. [18] Pool’s view that television receivers were screens that without tuners qualified as video monitors for a full rebate was not uncontroversial and was debated with him by his colleagues. On 27 July 2006, Pool amended the 'Law and Evidence' portion of 'Plasma 1'. This document is 'Plasma 2'. In essence, Pool changed his stance that television receivers could be classified under tariff heading 8528.21. This change in his approach was not communicated to Plasmaview until October 2006. [19] The determination made on 20 December 2005, identifying the applicable tariff heading as 8528.21.20 for screens that had not been equipped with TV tuners, was not affected by Pool's amended comments. [20] During May 2006, unaware of Pool’s original determination and unaware of 'Plasma 2', Ms Spies of the SARS PCI in Johannesburg began an inspection and audit process into Plasmaview’s imports of television sets and the possible underpayment of duty and tax in respect thereof. These imports came to Spies' notice as part of an ongoing investigation into imports of television sets generally, when the repayment claims lodged by the respondent with the Controller in East London after Pool’s determination were inspected. [21] Suspecting that duty had been underpaid, Spies telephoned a Plasmaview representative to inform her of the inspection and pending audit and to request relevant documentation from the company. This call was made on 23 May 2006. The discussion was confirmed by e-mail the same day. The respondent provided the documentation Spies had called for. [22] Further literature on the screens was requested in writing on 9 June 2006. Some of it was delivered to Spies the next day. The balance was to be supplied at a personal meeting between Spies and Plasmaview's representatives. This meeting was held on 5 July 2006. Spies informed the respondent of her prima facie view that duty had been underpaid. Respondent handed a copy of 'Plasma 1' to Spies, placing reliance upon this document for the proposition that complete television sets could be imported under full rebate of duty. [23] On 29 September 2006, after having discussed the respondent’s importation of television sets with her colleague Lester Millar, and having been provided with a copy of 'Plasma 2', Spies served a notice of intention to demand outstanding duties on Plasmaview, based upon the prima facie evidence in her possession. This notice invited the company to make representations in respect of the alleged liability for underpaid duty. On 2 October 2006, Plasmaview reacted to Spies' notice by letter, placing reliance on Pool's original determination, Plasma 1, which was annexed to the letter together with the LCD determination. [24] On 5 October 2006, the customs supervisor of East London gave notice to Plasmaview of his intention to revoke the authorisation to present substituted bills of entry relating to the LCD screens because of the fact that the Johannesburg PCI Office had discovered that the imported screens had been declared under the incorrect tariff and did not qualify for a rebate. Plasmaview was invited to make representations before 3 November 2006 why this step should not be taken. [25] A meeting on 4 October 2006 followed at which the respondent was provided with a copy of 'Plasma 2'. On 23 October 2006, Plasmaview, through its attorneys, gave formal notice in terms of s 47(9)(e), read with s 96(1)(a)(i) of the Act, of its intention to appeal against 'the determination' of 27 July 2006, which it had identified as the cause of the demand for underpaid duties. At the same time, representations were made to the Commissioner's Pretoria office in an effort to persuade the latter to abandon the claim. [26] Spies was unaware of the submissions made to the Pretoria office. She issued the schedules reflecting the claim for underpaid duties and tax on 9 November 2006 and had them delivered on 13 November 2006. [27] Although the respondent had delivered its notice of appeal and its representations to SARS in October 2006, almost a year passed before the review, the appeal and the application for a declaratory order were launched in one application. Negotiations between the parties conducted prior to litigation had come to naught. [28] The court below upheld the respondent's contention that 'Plasma 2' was a determination, constituted unfair administrative action and granted the orders referred to above. The commissioner challenges these findings and contends that 'Plasma 2' is no determination at all, but merely an amendment of the motivation that Pool provided in 'Plasma 1'. The Commissioner adopts the stance that the claim for underpaid duties is not based upon 'Plasma 2' but upon the schedules produced by the PIC team. Is 'plasma 2' a determination? [29] A determination for purposes of Chapter V of the Act is the end result of the classification of imported goods under the correct tariff heading: Colgate Palmolive (Pty) Ltd v Commissioner, South African Revenue Service 2007 (1) SA 35 (N) para 1; Commissioner, South African Revenue Services v Komatsu Southern Africa (Pty) Ltd 2007 (2) 157 (SCA) para 8 and the authorities there cited. [30] The provisions of Chapter V of the Act were summarized by Cloete JA in Commissioner, South African Revenue Service v Trend Finance (Pty) Ltd & another 2007 (6) SA 117 (SCA) para 5: ‘Chapter V deals with clearance of goods and liability for payment of duties. Every importer of goods is obliged in terms of s 38(1) to make due entry of those goods in terms of s 39. That latter section requires the person entering any imported goods for any purpose to deliver a bill of entry to the controller in the prescribed form; to declare that the particulars contained in the bill of entry are correct; and to pay all duties due on the goods. Section 40(1) provides that no entry shall be valid unless the true value of the goods on which duty is leviable or which is required to be declared under the provisions of the Act, has been declared; a correct invoice has been produced to the controller in the case of goods consigned to any person in the Republic; and the correct duty has been paid. Section 44(6)(c) provides that in all cases except those specifically mentioned, the liability for duty on any imported goods is that of the importer or owner of such goods (or any person who assumes such liability for any purpose under the provisions of the Act). Section 44(10) provides that any duty for which any person is liable in terms of s 44 shall be payable upon demand by the Commissioner. Section 47 provides that duty shall be paid on all imported goods in accordance with the provisions of Schedule 1.’ [31] 'Plasma 1' identifies, through the accepted process of classification – see International Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise 1985 (4) SA 852 (A) at 863F–864C – the heading under which the imported screens should be classified. 'Plasma 2' differs from 'Plasma 1' only in respect of the amended comment prepared by Pool under the heading 'Law and Analysis', in which he suggests that a plasma screen or a LCD screen incorporating a TV tuner could '… never be regarded as a video monitor', and could not qualify for a rebate under item 460.16. The tariff determination made in respect of the screens (without tuners) in December 2005 was expressly not altered by the amended comment. The date of the original determination was not affected and the document specifies that it (still) applies to plasma screens not incorporating TV tuners. [32] 'Plasma 2' is therefore no tariff determination. Once this fact is established, it is clear that the claim for underpaid duties does not, and could not, arise from the amended comment prepared by Mr Pool. The review of 'Plasma 2' [33] As 'Plasma 2' is not a determination, it is not a decision capable of being reviewed, nor can an appeal be lodged in terms of s 47(9)(e) against its contents. The court below erred in this regard. Counsel for the respondent was constrained to concede during argument that the high court's findings could not be supported. The importation of complete TV sets [34] 'Plasma 1' was prepared at a stage at which the respondent imported screens without TV tuners, with specific reference to plasma screens. Section 47(9)(a)(iii) of the Act reads: 'Any determination made under this subsection shall operate – (aa) only in respect of the goods mentioned therein and the person in whose name it is issued…' [35] It is common cause, as I have said, that the respondent, once it received 'Plasma 1', imported both LCD and plasma screens with TV tuners already fitted by the Korean manufacturer. It therefore began to import complete TV sets. [36] While screens imported without tuners were at the time correctly classified under tariff heading 8528.21.20, qualifying for a full rebate under rebate item 460.16 – see CSARS v LG Electronics (428/09) [2010] ZASCA 79 (28 May 2010) – the determination fell away once the nature of the imported item changed. Not only did 'Plasma 2' therefore not amend the earlier determination, it simply did not apply any longer to the respondent’s imports once the tuners were fitted prior to shipment of the sets to South Africa. This fact was overlooked in the judgment appealed against. The schedules prepared by the PIC [37] Ms Spies prepared two schedules relating to bills of entry submitted by the respondent in respect of the screens imported during 2005 and 2006. The schedules were prepared in the exercise of the powers granted to the appellant by section 47(9)(a) and 47(11): '(9) (a) (i) The Commissioner may in writing determine- (aa) the tariff headings, tariff subheadings or tariff items or other items of any Schedule under which any imported goods, goods manufactured in the Republic or goods exported shall be classified; or …. (11) (a) Notwithstanding the provisions of subsection (10), any determination made under subsection (9) (a) as a result of or during the course of or following upon an inspection of the books, accounts and other documents of an importer, exporter, manufacturer or user of goods, shall, subject to the provisions of section 44(11)(c), be deemed to have come into operation in respect of the goods in question entered for the purposes of this Act two years prior to the date on which the inspection commenced. (b) The expression "inspection of any books, accounts and other documents", or any other reference to an inspection in this Act shall be taken to include any act done by an officer in the exercise of any duty imposed or power conferred by this Act for the purposes of the physical examination of goods and documents upon or after or in the absence of entry, the issue of stop notes or other reports, the making of assessments and any pre- or post- importation audit, investigation, inspection or verification of any such books, accounts and other documents required to be kept under this Act.' [38] The schedules prepared by Spies are determinations as intended in the Act. Alternative relief [39] Once it was clear that the appeal had to succeed, respondent’s counsel sought to rely on alternative relief envisaged during the hearing before the court below when Plasmaview was granted an amendment of the notice of motion. Prayer 5 was amended to include the words 'Annexures FA 17 and FA 18 [Spies' schedules] are hereby set aside and' before the original prayer 'it is declared that the amounts demanded by the respondent [the present appellant] from the applicant [the present respondent] in Annexures “FA 17” and “FA 18” to the founding affidavit, being respectively R8 924 191,69 (together with interest thereon) and R 6 591 987,90 (together with interest thereon), are not owing by the applicant to the respondent.' Although the amendment was granted 'provisionally', the court below couched its declaratory order in the form in which it was worded originally. [40] The Commissioner’s reliance on the schedules was introduced into the court below by an additional affidavit filed without opposition. Although Plasmaview did file a further affidavit in reply to the additional affidavit, the schedules were not dealt with at all. [41] Faced with these difficulties, Plasmaview's counsel requested the indulgence of a postponement in order to supplement the papers to enable it to deal with the schedules. The Commissioner objected. The schedules were not disputed in the court below, either in respect of the correctness of the calculations of duty and tax, or in respect of the validity of the decision to prepare them. There is no explanation before this court why, if these aspects were in issue, the dispute was not ventilated before and why available evidence was not placed on record. There is consequently no basis upon which a postponement could be granted. [42] Finally, Plasmaview argued that the commissioner does have a discretion whether or not to apply the provisions of s 47(11) once an underpayment of duty is established. It sought a postponement for the purpose of making representations to the appellant to persuade him not to exercise the powers given to him in terms of this section. Again, the Commissioner opposed the request. [43] From the wording of the section quoted above it would appear prima facie that the appellant has no discretion that would allow him not to apply its provisions. No postponement could alter this fact. But even if the appellant could exercise a discretion not to apply s 47(11), this issue was not raised in the court below. There is no basis upon which the appeal could be postponed to accommodate a request to make further representations at this stage. The remarks by Schutz JA in McCarthy Retail Ltd v Short Distance Carriers CC 2001 (3) SA 482 (SCA) paras 27 to 33 are applicable in this case. The postponement was sought at the last moment after the appeal had been conceded; no satisfactory reasons were advanced for the lateness of the hour at which it was sought; and the Commissioner has a right to have the appeal disposed of. The principal reason for refusing the postponement is the fact that it was sought in order to allow the respondent to create a cause of action where none existed when the appeal was heard. The request for a postponement could therefore not be entertained. [44] 1. The appeal is allowed with costs, including the costs of two counsel. 2. The order of the court below is set aside and replaced with the following: 'The application is dismissed with costs, including the costs of two counsel.' ___________________ E BERTELSMANN ACTING JUDGE OF APPEAL APPEARANCES: For appellant: C Puckrin SC T Khatri Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein For respondent: J P Vorster SC Instructed by: Wolvaardt Inc, Pretoria Matsepes Inc, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN SUPREME COURT OF APPEAL FROM: The Registrar, Supreme Court of Appeal DATE : 1 October 2010 STATUS: Immediate Commissioner, South African Revenue Service v Plasmaview Technologies (Pty) Ltd Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal (SCA) today upheld the Commissioner’s appeal against a judgment of the high court, which set aside an amendment to the motivation of a tariff determination on review as if it were a decision by the Commissioner. The Commissioner had demanded payment from Plasmaview of underpaid duties and tax calculated in two schedules served on the latter. The high court held that the amounts claimed were not owing and due. Plasmaview imported partially assembled TV sets. It requested a determination from the Commissioner’s office to identify the applicable tariff heading under which the sets had to be declared. The determination identified a tariff heading that allowed a full rebate of duties paid on the partially assembled sets. The importer then began to import fully assembled TV sets, but still declared them under the same tariff heading that no longer applied to their imports, and claimed the full rebate. When the Commissioner demanded underpaid duty and tax in respect of these fully assembled sets, Plasmaview applied to the high court for a declaratory order that the amounts determined by the Commissioner were not owing and due. It mistakenly identified an internal memorandum relating to the correctness of the motivation for the original determination it had requested, as an amendment of the determination itself. A review of this amendment was sought as if it were a decision taken by the Commissioner, on the grounds that Plasmaview was not consulted before the amendment was effected. It also sought an order declaring that the amounts demanded by the Commissioner were not owing and due by Plasmaview. The high court granted the relief claimed. On appeal, the SCA held that the high court had erred. No new determination had been made by the amendment of the original determination’s motivation. There was thus no decision that could be set aside. Fully assembled TV sets did not qualify for a rebate. The Commissioner was entitled to claim underpaid duty and tax. The order of the high court was set aside and substituted with an order dismissing Plasmaview’s application.

2202

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 563/08 RICHARD MOKOENA Appellant and THE STATE Respondent Neutral citation: Mokoena v S (563/08) [2009] ZASCA 14 (19 March 2009). Coram: CLOETE, PONNAN et SNYDERS JJA Heard: 2 MARCH 2009 Delivered: 19 MARCH 2009 Summary: Criminal Law: Sentence: The function of a court in imposing sentence is to determine the maximum period the convicted person may be imprisoned. It is improper for the court to attempt to determine the minimum period. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Free State Provincial Division, Parys (Hattingh J as court of first instance). 1. The  order  of  the  court  a  quo  refusing  condonation  for  the  late application for leave to appeal is set aside and condonation is granted. 2. Condonation is  granted  for  the  non­compliance  with  the  rules  of  this court. 3. The appeal succeeds to the limited extent that the sentences imposed by the court a quo are set aside and the following sentences are substituted: 3.1 On  the  first  count,  murder,  the  appellant  is  sentenced  to  25  years' imprisonment. 3.2 On  the  second  count,  robbery  with  aggravating  circumstances,  the appellant  is  sentenced  to  15  years'  imprisonment  of  which  ten  years  is ordered to run concurrently with the sentence imposed on the first count. 3.3 The effective period of imprisonment will therefore be 30 years. 4. In  terms  of  s 282  of  the  Criminal  Procedure  Act,  the  sentences  are backdated to 19 September 1995. ______________________________________________________________ JUDGMENT ______________________________________________________________ CLOETE JA (PONNAN et SNYDERS JJA  concurring): [1] The  appellant  and  his  co­accused  were  charged  with  murder  and robbery with aggravating circumstances before Hattingh J and assessors in the Free State Provincial Division sitting at Parys. The State alleged that on 27/28 February 1995 and at Petrus Steyn the appellant and his co­accused killed Mrs Catarina Johanna Koster ('the deceased') in her home and robbed her  of inter alia  her  car,  stove,    hi­fi  set, radio  and  personal  jewellery. The appellant  tendered  a  plea  of  guilty  to  culpable  homicide  on  the  first  count, which was rejected by the State, and a plea of guilty on the second count, which the State accepted. The appellant was ultimately convicted as charged and his co­accused was convicted only of theft on the second count. [2] The trial court sentenced the appellant to 40 years' imprisonment on the first count and 15 years' imprisonment on the second count, but ordered that half of the latter sentence should run concurrently with the former, so that the effective sentence of imprisonment was 47 and a half years. [3] The  appellant  sought  leave  to  appeal  against  sentence,  and condonation for his failure to have done so timeously, from the trial court. The application for condonation was refused primarily for the reason that it had no prospects of success. The appellant appeals against this order. Leave is not necessary  from  this  court  or  the  court  a  quo:  S  v  Gopal, 1  S  v  Moosajee. 2 There  was  also  an  application  for  condonation  before  this  court  for  non­ compliance with certain of its rules. As the prospects of success on appeal are  all  important  to  both  applications,  I  turn  to  consider  the  merits  of  the appeal. [4] As  I  have  said,  the  deceased  lived  in  Petrus  Steyn.  Her  house  was surrounded by burglar bars. The appellant was her gardener. She was found dead in a bath half full of water with her arms and also her legs tied tightly together  with  wire  coat  hangers.  There  was  also  a  wire  coat  hanger  tied around her neck. The medical evidence showed that she had been strangled by her assailant ─ which, it was common cause, was the appellant ─ using his right hand. She had other bruises, including a black eye. A number of articles were missing from her house although there were no signs of forceable entry. The appellant said in his plea explanation (made in terms of s 112(2) of the Criminal Procedure Act) that after he had left the deceased in the bath, he locked the house and went to his dwelling. Later the same night he returned with  his  co­accused  and loaded  goods  from  the  deceased's  house into her motor vehicle, which was driven to the appellant's shack at Mamafubedu and thereafter, to the dwelling of his co­accused. Stolen goods were offloaded at both  places.  They  subsequently  rolled  the  vehicle.  They  were  arrested  the following day. [5] In  refusing  condonation,  the  learned  trial  judge  exercised  a  narrow discretion 3  with which this court is not entitled to interfere unless it was not exercised  judicially.  That  is  the  case  here  because  the  discretion  was exercised as a result of a material misdirection. The misdirection had its origin in  the  following  passages  of  the  record  which  reflect  what  the  learned  trial 1 1993 (2) SACR 584 (A). 2 2000 (1) SACR 615 (SCA). 3 Naylor v Jansen 2007 (1) SA 16 (SCA) para 14 and cases referred to in the footnotes, especially Giddey NO v J C Barnard and Partners 2007 (5) SA 525 (CC) para 19. judge  said  to  the  prosecutor  (Ms  Bester)  and  counsel  for  the appellant  (Mr Marais) during argument on sentence: 'ME. BESTER: Met  betrekking  tot  termyne,  u  edele.  Langtermyn  gevangenisstraf ten  aansien  van  beskuldigde  1  ten  aansien  van  aanklag  1,  ook  ten  aansien  van aanklag  2.  Ek  wil  my  nie  regtig  aan  'n  termyn  gebonde  hou  nie,  maar  ek  dink  in aanklagte 1, 20­25 jaar en aanklag 2 dink ek in die omgewing van 12 tot 15 jaar, u edele. HOF:    Juffrou,  het  u  gesien  wat  sê  die  Gevangeniswet?  Hy  sê  waar  'n  hof  'n bepaalde  vonnis  oplê  dan  kan  daardie  persoon,  dan  kom  daardie  persoon  na  die helfte daarvan verstrek is vir oorweging, vir parool in oorweging. Met ander woorde ek gee hom 20 jaar, na 10 jaar dan stap hy hier buitekant rond. ME. BESTER:    Dit is korrek. HOF:  Hoekom gee ek hom nie liewer dan 'n 100 jaar nie? ME. BESTER:    Ek het nie 'n probleem daarmee nie, u edele. HOF:  U het nie 'n probleem nie? ME. BESTER:    Ek het geen probleem daarmee nie. HOF:  Ja. ME. BESTER:    Regtig. HOF:  Dan  gee  ek  hom  lewenslank  dan  kom  hierdie  klomp  burokrate  weer  ... (tussenbei) ME. BESTER: Van die Nasionale Raad. HOF:  En  ook  hier  na  20  jaar  sê  hulle  vir  hom  jy  kan  nou  'n  bietjie  vir  parool kwalifiseer. ME. BESTER:    Ja, u edele soos ek sê ek het glad nie 'n probleem nie. HOF:  Al die vonnisse van die howe word tot niet gemaak deur 'n klomp politici en burokrasie, adviesrade en goed. ME. BESTER:    Daarmee stem ek honderd persent saam, u edele. HOF:  Want  as  die  doodsvonnis  hier  'n  gepaste  vonnis  was  sou  ek  dit  ernstig oorweeg het. . . . HOF:  Dankie, juffrou. Mnr. Marais, ek wil net graag by u iets hoor. Ek het nou al gesien dat van die regters in die Transvaal veral in sulke gevalle vonnisse oplê van wat amper soos Amerikaanse vonnisse is, 110 jaar, 'n ander ene 95 jaar en so aan. Nou daardie goed is nog nie op appèl gewees nie of het nog nie voor die Appèlhof gedien nie. Wat sal die rede wees dat die regter sulke lang termyne oplê? Dit het hulle nooit gedoen toe die doodsvonnis nog 'n gepaste vonnis was nie, 'n bevoegde vonnis was nie. MNR. MARAIS:    Ja. HOF:  Dit is eers daarna wat dit gebeur het. Nie waar nie? Is dit miskien juis om dit wat in die Wet staan, omdat dit 'n bepaalde vonnis is kom hy aanmerking vir parool na die helfte uitgedien is. MNR. MARAIS:    Met die helfte. HOF:  Gee hom lewenslank en dan is die Adviesraad, die Nasionale Adviesraad sê dit is 'n administratiewe instruksie, na 20 jaar sal jy in oorweging kom. En dan lyk dit vir my daardie regters voel wag 'n bietjie as dit dan so is gaan ek hulle wetlik verplig om, hy gaan 'n lang tyd in die tronk bly, ek gee vir hom 90 jaar dan moet hy 45 jaar daar bly. Dan kan die Nasionale Adviesraad op sy kop staan, dit help niks.' [6] The judgment on sentence is entirely devoid of these sentiments. But I am driven to the conclusion that the learned trial judge had them at least at the back of his mind when he imposed sentence. I say this for two reasons. First, the sentence imposed for the murder and the cumulative effect of the sentence  imposed  for  both  crimes  together  are  both  unusually  severe. Second, the learned trial judge did not say that he had considered imposing life imprisonment, nor does he give any reason for rejecting such a sentencing option. If he would, as he said, have considered the death penalty had this sentence not been abolished, his failure to consider the most severe penalty then available is inexplicable on any basis other than that he considered such a  sentence  would  not  be  sufficient  if  parole  were  to  be  granted  to  the appellant. A court in imposing sentence cannot adopt this approach. In S v Matlala 4 Howie JA held: 'Unless there is a particular purpose in having regard to the pre­parole portion of an imprisonment sentence (as, for example, in S v Bull and Another; S v Chavulla and Others 2001 (2) SACR 681 (SCA)) the Court must disregard what might or might not be decided by the administrative authorities as to parole. The court has no control over that. S v S 1987 (2) SA 307 (A) at 313H; S v Mhlakaza and Another 1997 (1) SACR 515 (SCA) at 521d­h. In the latter passage there is the important statement that  the  function  of  the  sentencing  court  is  to  determine  the  maximum  term  of imprisonment  the  convicted  person  may  serve.  In  other  words,  the  court  imposes 4 2003 (1) SACR 80 (SCA) para 7. what  it  intends  should  be  served  and  it  imposes  that  on  an assessment  of  all  the relevant factors before it. It does not grade the duration of its sentences by reference to their conceivable pre­parole components but by reference to the fixed and finite maximum terms it considers appropriate, without any regard to possible parole.' 5 Subsequently, in S v Botha, 6 Ponnan AJA said: 'One final  aspect  merits  mention.  The  trial  Judge  recommended  that  the appellant serve  at  least  two­thirds  of  his  sentence  before  being  considered  for  parole.  The function of a sentencing court is to determine the term of imprisonment that a person, who has been convicted of an offence, should serve. A court has no control over the minimum  period  of  the  sentence  that  ought  to  be  served  by  such  a  person.  A recommendation of the kind encountered here is an undesirable incursion into the domain  of  another  arm  of  State,  which  is  bound  to  cause  tension  between  the Judiciary  and  the  executive.  Courts  are  not  entitled  to  prescribe  to  the  executive branch  of  government  how  long  a  convicted  person  should  be  detained,  thereby usurping  the  function  of  the  executive.  (See  S  v  Mhlakaza  and  Another  1997  (1) SACR 515 (SCA) ([1997] 2 All SA 185) at 521f­i (SACR).)' In  short:  the  function  of  a  court  in  imposing  sentence  is  to  determine  the maximum period a convicted person may be imprisoned. It may not attempt to fix the minimum period. [7] In the circumstances, I am satisfied that the learned judge misdirected himself in regard to the prospects of success on appeal, and that this court is at large to grant the application for condonation refused by the trial court and also to impose the sentences it considers appropriate. I turn to address that latter question. [8] The appellant's personal circumstances are these. He was 23 years old when  he  committed  the  offences.  He  had  two  relatively  minor  previous convictions for theft for which he was in each case sentenced to imprisonment with  the  option  of  a  fine,  but  he  had  no  previous  conviction  for  a  crime involving violence. It may be accepted that he is a relatively unsophisticated person: he grew up on a farm as the oldest of four children. His father died when he was ten years old and his mother took him out of school (he was 5 See also S v Botha 2006 (2) SACR 110 (SCA) para 25. 6 2006 (2) SACR 110 (SCA) para 25. then in standard three) as she put it: 'Om my te kom help pap in die huis te bring'. [9] I have difficulty in finding that the appellant had any remorse. He did co­operate  immediately  with  the  police  after  he  was  arrested:  he  made various pointings out and he made a statement to a magistrate, although he attempted  to  shift  the  blame  from  himself  to  his  co­accused.  But  he  never gave  evidence.  His  plea  to  culpable  homicide  on  the  murder  charge  was correctly rejected by the State and he had little option but to plead guilty on the robbery charge. The appellant might well regret what he did, but it cannot in my view be found that he has genuine remorse. [10] The  murder  was  horrific.    The  deceased  was  a  defenceless  elderly woman in her late sixties and the appellant, as her gardener, was in a position of  trust.  She  was  attacked  in  the  sanctity  of  her  own  home.  The  appellant must have gained entry using a key or by some strategy. He strangled the deceased with his bare hand. As this court said in R v Lewis: 7 'The application of pressure manually, as in the case before us, is an aggravating circumstance because the assailant is throughout not only fully alive to the degree of force  exerted  by  him  but  he  is,  by  reason  of  his  manual  contact  with  the  throat, warned of the victim's reaction to the pressure applied.' The other injuries sustained by the deceased, in particular the black eye, bear mute testimony to the struggle she put up. Not surprisingly, the court a quo found  that  the  appellant  had  acted  with  dolus  directus.  The  appellant  then wound wire coat hangers around the deceased's feet and hands so tightly that they  required  a  pair of  pliers  to  remove  them,  and  also  wound  a  wire  coat hanger around her neck. According to the uncontradicted medical evidence led  by  the  State,  this  was  done  after  the  deceased  had  been  strangled  to death;  but  it  shows  a  callous  persistence  by  the  appellant  in  his  course  of conduct. So too does the fact that he returned that night with an associate to complete  the  robbery.  That  to  my  mind  should  properly  be  reflected  in  an order directing that part only of the sentence on the second count should run concurrently with the sentence on the first. The obvious inference to be drawn 7 1958 (3) SA 107 (A) at 109E­F. from the facts I have mentioned, in the absence of any explanation from the appellant, is that the crimes were committed purely for personal gain. [11] It is hardly necessary to emphasise that South Africa has for a number of years been plagued by crimes of violence of the nature committed by the appellant, to such an extent that Parliament has considered it necessary to enact 8  minimum sentences for such crimes. Society is clamant for retribution and deterrence must also play a major role in the sentences imposed. The personal circumstances of the appellant must recede into the background. It must nevertheless be borne in mind that this court is obliged to impose the sentence which it considers the trial court should have imposed in 1995 and the effect that the minimum sentencing legislation has had on sentences must be left out of account. [12] Bearing all these factors in mind, I am of the view that a sentence of 25 years'  imprisonment  for  the  murder  and  15  years'  imprisonment  for  the robbery  with  aggravating  circumstances,  ten  years  of  the  latter  to  run concurrently  with  the  former,  would  have  been  appropriate  before  the minimum sentencing legislation came into operation. The effective period of imprisonment  will  therefore  be  30  years.  The  difference  between  that sentence and the sentence imposed by the trial court is sufficient to warrant interference;  and  in  the  circumstances,  the  application  for  condonation  for non­compliance with the rules of this court should be granted. Before making the  appropriate  order,  I  should  mention  that  the  appellant  has  been  in  jail since  he  was  sentenced  on  19  September  1995.  His  imprisonment  should therefore be backdated in terms of s 282 of the Criminal Procedure Act. [13] The following order is made: 1. The  order  of  the  court  a  quo  refusing  condonation  for  the  late application for leave to appeal is set aside and condonation is granted. 2. Condonation is  granted  for  the  non­compliance  with  the  rules  of  this court. 8 In the Criminal Law Amendment Act 105 of 1997. 3. The appeal succeeds to the limited extent that the sentences imposed by the court a quo are set aside and the following sentences are substituted: 3.1 On  the  first  count,  murder,  the  appellant  is  sentenced  to  25  years' imprisonment. 3.2 On  the  second  count,  robbery  with  aggravating  circumstances,  the appellant  is  sentenced  to  15  years'  imprisonment  of  which  ten  years  is ordered to run concurrently with the sentence imposed on the first count. 3.3 The effective period of imprisonment will therefore be 30 years. 4. In  terms  of  s 282  of  the  Criminal  Procedure  Act,  the  sentences  are backdated to 19 September 1995. _______________ T D CLOETE JUDGE OF APPEAL Appearances: Counsel for Appellant: N L Skibi Instructed by Legal Aid Board, Bloemfontein Counsel for Respondent:  C Steyn Instructed by Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From:  The Registrar, Supreme Court of Appeal Date:  19 March 2009 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal R MOKOENA v THE STATE 1. The SCA today upheld an appeal by Mr Richard Mokoena (the appellant) against the effective sentence of 47 and a half years' imprisonment imposed by Hattingh J in Parys for the  robbery  and  murder  of  Mrs  Catarina  Johanna  Koster  (the  deceased)  in  Petrus  Steyn during February 1995. The appellant, who was the deceased's gardener, had gained access to her house and then strangled her. He and his co­accused returned that night and loaded goods from the deceased's house into her car which they removed to Mamafubedu. 2. The  SCA  held,  following  previous  cases  decided  after  the  trial  court  had  imposed sentence,  that the trial court had committed a misdirection by attempting to fix the minimum amount of time it considered that the appellant should spend in jail even if he was granted parole.  The  SCA  reiterated  that  the  function  of  a  sentencing  court  is  to  determine  the maximum term of imprisonment a convicted person may serve and that courts are not entitled to prescribe to the executive the minimum amount of time that sentenced persons should be detained. 3. The effective sentence was accordingly reduced to 30 years' imprisonment. ­­ends­­

3944

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 667/2021 In the matter between: PLATTEKLOOF RMS BOERDERY (PTY) LTD APPELLANT and DAHLIA INVESTMENT HOLDINGS (PTY) LTD RESPONDENT Neutral citation: Plattekloof RMS Boerdery (Pty) Ltd v Dahlia Investment Holdings (Pty) Ltd (667/2021) [2022] ZASCA 182 (15 December 2022) Coram: VAN DER MERWE, GORVEN and MOTHLE JJA and WINDELL and MALI AJJA Heard: 3 November 2022 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, publication on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be 11h00 am on 15 December 2022. Summary: Contract – pre-emptive right in respect of two of eight portions of farm – offer by third party to purchase farm – activated right of pre-emption – appellant’s remedy – enforcement of respondent’s contractual obligation to determine in good faith what portion of global purchase price pertains to two portions and to deliver offer to appellant accordingly. ORDER On appeal from: Western Cape Division of the High Court, Cape Town (Binns-Ward J, sitting as court of first instance): The order of the high court is varied only to the extent that the dismissal of the application is set aside. The respondent is directed to deliver to the appellant, within 10 days of the date of this order, a written offer, in terms of clause 10 of the lease agreement concluded by the parties on 13 April 2018, to purchase the leased premises, based on the deed of sale concluded by the respondent and Swellendam Plase (Pty) Ltd on 7 April 2020. The appellant is directed to pay the costs of the appeal, including the costs of two counsel. JUDGMENT Van der Merwe JA (Gorven and Mothle JJA and Windell and Mali AJJA concurring): [1] This appeal concerns a pre-emptive right in respect of immovable property that the respondent, Dahlia Investment Holdings (Pty) Ltd, granted to the appellant, Plattekloof RMS Boerdery (Pty) Ltd. The appellant launched an application in the Western Cape Division of the High Court, Cape Town (the high court), for an order enforcing compliance with the right of pre-emption. The high court (Binns-Ward J) dismissed the application with costs. Its judgment is reported as Plattekloof RMS Boerdery (Pty) Ltd v Dahlia Investment Holdings (Pty) Ltd and Another 2021 (2) SA 527 (WCC). The appellant’s appeal is with the leave of this court. Background [2] The respondent is the owner of a farm in the district of Riversdale in the Western Cape that carries the name Plattekloof (the farm). It consists of eight separate portions. The appellant owns an adjoining farm. Mr Gunther Schmitz is a director and the sole shareholder of the respondent. Mr Albert Vermaak, in turn, is a director and the sole shareholder of the appellant. [3] Two of the eight portions of the farm are described as: the remainder of the farm Hottentots Bosch no 80 (424,6700 hectares in extent); and portion 5 of the farm Platte Kloof no 90 (443,1839 hectares in extent) (the two portions). On 13 April 2018, the appellant and the respondent concluded a written lease agreement (the lease). In terms thereof the appellant rents the two portions for a period of five years ending on 1 April 2023. [4] Clause 10 of the lease (clause 10) provides for a right of pre-emption, in these terms: ’10. Right of First Refusal 10.1 Provided that the Lessee has complied with all of its obligations under this agreement, the lessee shall have the right of first refusal to purchase the Premises on terms and conditions the same as nor (sic) no less favourable than those offered by a bona fide third party to the Lessor and the Lessor shall deliver written notice to the Lessor (sic) specifying the terms and conditions of such offer, and the Lessee shall have 14 (fourteen) days thereafter in which to accept or reject the offer by written notice, failing which the Lessor shall be entitled, subject to the Lessor (sic) commitments under this agreement, to dispose of the property to any third party on the terms originally offered for a period of 60 (Sixty) days, failing which this right of first refusal shall revive.’ [5] Mr Schmitz inherited the shareholding in the respondent. He is a businessman who resides in Cape Town. He has no interest in farming. Since 2017, therefore, he attempted to sell the farm or the shares in the respondent. In terms of a deed of sale concluded on 7 April 2020, the respondent sold the farm to Swellendam Plase (Pty) Ltd (Swellendam Plase) for a global purchase price of R17 million. The deed of sale recorded that the farm was sold subject to the lease, but did not allocate a purchase price per portion of the farm. [6] The appellant learned of this sale on 16 April 2020. In a letter to the respondent dated 20 April 2020, the appellant’s attorney conveyed that he held instructions to claim specific performance of clause 10 and invited the respondent to make an offer to the appellant in terms thereof in respect of the two portions. Despite a subsequent exchange of correspondence between the attorneys of the parties, no such offer was forthcoming. [7] The appellant consequently approached the high court. The appellant claimed that the respondent be ordered to comply with clause 10 by delivering a written notice offering to sell the two portions to the appellant for R4 million, on the same terms and conditions as those contained in the deed of sale between the respondent and Swellendam Plase. The appellant also asked for an order affording it a period of 14 days to accept or reject that offer. [8] In the meantime, on 4 June 2020, the respondent and Swellendam Plase in writing agreed to cancel the deed of sale. In the answering affidavit Mr Schmitz explained that the reason for the cancellation was that the respondent had been advised that the sale of the shares in the respondent would provide tax advantages over those of the sale of the farm. Counsel for the respondent rightly did not contend that the cancellation of the deed of sale was of any significance in the matter. [9] The main issue before the high court concerned the proper interpretation of clause 10 and the consequent application thereof to the facts. I shall return to its findings in this regard. The respondent, however, raised various other defences to the enforceability of clause 10. One of these was that the appellant had failed to comply with its obligations in terms of the lease and that therefore the proviso in clause 10 was not fulfilled. The high court rejected all of these defences and these findings were not challenged before us. Discussion [10] It follows from what I have said that the following passage in GB Bradfield Christie’s Law of Contract in South Africa 8 ed (2022) at 77, is apposite to the determination of the appeal: ‘Regarding breach of the preference contract, there are essentially two issues. The first is whether in the given circumstances the right of preference was “triggered” and, if so, the second is what remedies the right holder has in the event of breach of the contract granting the preference right. The answers to these questions depend on the terms on which the right has been granted, and these terms vary.’ Trigger [11] The first question is whether the high court correctly held that the ‘package deal’ had ‘triggered’ the appellant’s pre-emptive right. In this regard one has to ask whether the sale of the farm gave rise to an obligation on the part of the respondent to make an offer to the appellant in terms of clause 10. That would be the case if the conduct of the respondent breached the provisions of clause 10. As I have said (and the high court recognised), the answer depends in the first place on an interpretation of clause 10 in terms of the ordinary well-known principles of construction of contracts. [12] Ultimately the question is whether clause 10 means that the right of pre-emption would only be activated if the respondent receives an offer for the two portions on their own. I do not think so. First, on the ordinary meaning of clause 10, the respondent obtained an offer to purchase the ‘Premises’, even though it was part of a wider offer. This, I think, is illustrated by Sher v Allan 1929 OPD 137. [13] There the defendant leased half of an erf to the plaintiff. In terms of the lease agreement, the defendant granted the plaintiff ‘the first option to purchase the leased property, should he desire to sell the same during the continuance’ of the lease. The defendant sold the whole erf without notice to the plaintiff. The plaintiff consequently sued the defendant for damages and the question arose whether the sale of the whole erf constituted a breach of the option in respect of the leased property. [14] McGregor AJP answered the question in the affirmative. He said at 143: ‘For by selling the whole erf the defendant must needs ex necessitate rei be selling the half; and being a free agent herein he must be taken to have desired that which his act implied and involved. He could not – as a matter of ordinary possibility – sell the whole without selling the half’. And at 144 he trenchantly stated: ‘If we took a different view we might have this result: that, if the owner chose to sell all his property at Kroonstad to a substantial purchaser in globulo, it might still be contended that the plaintiff had no cause to complain in that there was no desire to sell the leased half – which might seem to bring one into a somewhat metaphysical sphere.’ [15] Secondly, upon such a construction the right of pre-emption would be circumvented or rendered nugatory by adding something to an offer to purchase the two portions. That would be so unbusinesslike and insensible that the parties could not have intended it. For these reasons I agree with the high court’s finding that the rights of the appellant in terms of clause 10 had been activated. I therefore turn to the issue of remedy. Remedy [16] The high court determined the content of the rights of the appellant in these terms: ‘Upon the triggering of the right, the first respondent became obliged, according to the tenor of clause 10 of the lease, to give the applicant written notice specifying the terms and conditions of the offer it had received from Swellendam Plase and the applicant would thereafter have 14 days in which to indicate by written notice to the first respondent whether or not it intended to acquire the property on same terms and conditions. In other words, in exercising the right to acquire the two erven on the same terms and conditions as the third party was prepared to do, the applicant would, in the circumstances of the offer made by Swellendam Plase, have to purchase the whole farm for R17 million. It would have to take the whole package because the package deal reflected the terms and conditions upon which Swellendam Plase would acquire the pre-emption property. That would be to give effect to the plain meaning of the language of clause 10.’ [17] I am unable to agree with this conclusion. The decision of this court in Brocsand (Pty) Ltd v Tip Trans Resources and Others [2020] ZASCA 144; 2021 (5) SA 457 (SCA) para 17, serves as a convenient starting point: ‘Brocsand’s right of first refusal had a specific content. It was the right “to enter into a new agreement with the Holder for the appointment . . . to render mining services in respect of the Minerals on the Property”, that is, a right against Full Score in the respect of laterite and sand on Red Hill. As a matter of logic, the content of a right cannot change because of a breach thereof, not even when the breach takes place by collusion.’ See also para 25. The appellant’s rights must, of course, be determined by a proper construction of clause 10. [18] In terms of clause 10 the appellant clearly has no more than the ‘right of first refusal to purchase the Premises’, that is, the two portions. In context the expressions ‘such offer’ and ‘the offer’ refer to the offer that the respondent is obliged to make to the appellant for the purchase of ‘the Premises’. That offer has to be the same or not less favourable than that which a bona fide third party offered in respect of the two portions. Thus, the respondent is contractually obliged to determine in good faith what portion of the Swellendam Plase offer pertained to the two portions and to offer that to the appellant. [19] As I have indicated, the appellant contended that the evidence proved that the respondent and Swellendam Plase had agreed on a purchase price of R4 million for the two portions, it being the fair and reasonable price thereof. I therefore proceed to analyse the relevant evidence. [20] Over the period from December 2017 to 11 April 2018, various discussions took place between Mr Vermaak and Mr Schmitz, during which the latter indicated that the respondent would be prepared to sell the two portions for R4 million. On 13 April 2018, as I have said, the lease was concluded. In subsequent discussions up to 10 January 2020, various possibilities in respect of the sale to the appellant of the shares in the respondent, the farm or the two portions were mooted, but nothing came thereof. [21] During February 2020 Swellendam Plase, represented by Mr Lourens van Eeden, showed an interest in acquiring the remaining six portions (other than the two portions) of the farm. Mr van Eeden inspected the farm on several occasions. On 6 March 2020, Mr Schmitz phoned Mr Vermaak. Mr Schmitz indicated that there was a purchaser for the six portions. He enquired whether the appellant would still be interested in purchasing the two portions for R4 million. Mr Vermaak responded in the affirmative. On 12 March 2020, Mr Vermaak had a similar conversation with Mr Cornelis van Tonder, an estate agent appointed by the respondent. Mr van Tonder disclosed that the prospective purchaser of the six portions was Swellendam Plase. [22] On the same day, Mr van Tonder sent an email to Mr Schmitz, stating that Mr van Eeden (Swellendam Plase) had an option to purchase the six portions and that he wished to exercise that option (‘wil hy graag daardie opsie uitoefen’). No such document was produced in the evidence and it is unclear what exactly Mr van Tonder intended to convey to his client. It did appear from the record that in an email to the respondent’s attorney dated 27 February 2020, Mr Schmitz enquired whether he could sign ‘the option document’. Be that as it may, during separate conversations on 14 March 2020, both Mr van Tonder and Mr van Eeden informed Mr Vermaak that Swellendam Plase would pay R13 million for the six portions. [23] In the answering affidavit Mr Schmitz explained what happened thereafter, as follows: ’We proceeded to engage in negotiations. After a further visit to the farm Mr van Eeden informed me that the value of the two portions leased by the applicant was higher than R5 million, while the remaining six portions were not worth R13 million. He would prefer buying the whole farm. Mr van Tonder subsequently informed me that the buyer wanted to purchase the whole farm and not only the remaining six portions separately (the relevant email correspondence is attached as “GS20”). On 25 March 2020 I went to the farm for the eviction of Mr Botha. On this day I also inspected the condition of the buildings and the land together with Mr van Eeden. We agreed to reduce the price for the whole farm to R17 million based on the bad condition of the remaining six portions. In agreeing on the purchase price for the farm as a whole, we did not differentiate between the six remaining portions on the one hand, and the two leased portions, on the other hand, save to extent that the six remaining portions were, because of their condition and the funds that would be required to rehabilitate them, regarded as having a lower value as opposed to the two leased portions. As subsequently reflected in the Swellendam contract, the eight portions were sold as an indivisible transaction.’ The further visit alluded to, took place on 19 March 2020, in the presence of Mr van Tonder. In their affidavits, both Mr van Eeden and Mr van Tonder confirmed the evidence of Mr Schmitz. [24] The appellant urged us to reject the evidence set out in the previous paragraph and to find that the purchase price of R17 million for the farm had been arrived at by adding R4 million to the offer of R13 million for the six portions. The argument was based on a weighing of probabilities. It is trite, however, that motion proceedings are not designed to determine probabilities and that it is not permissible to decide genuine disputes of fact in motion proceedings. In the result, the version of the respondent in respect of disputed facts has to be accepted for purposes of the determination of an application, unless that version is so far-fetched or clearly untenable as to warrant its rejection out of hand. See National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) para 26. I am by no means satisfied that the respondent’s evidence could be rejected merely on the papers. [25] It follows that the main relief claimed, namely that the respondent be directed to make an offer of R4 million for the two portions, must fail. In its heads of argument in this court, the appellant for the first time attempted to raise a ground for alternative relief. That was that the high court should have determined a reasonable price for the two portions, if needs be after hearing oral evidence in that regard. Apart from the procedural obstacles in its way, the contention is untenable simply because the appellant has no such right. As I have said, the appellant has the right to a bona fide offer on the basis of that part of the R17 million that pertains to the two portions, nothing less and nothing more. [26] Finally, the question arises whether this should be the end of the matter. The proper interpretation of clause 10 was central to the proceedings in the high court and in this court. That the applicant claimed to be entitled to an offer in the amount of R4 million for the two portions, made no material difference hereto. That claim was based on what the appellant perceived to be the facts. This court has spoken on the issue and it would appear quite senseless to require the appellant to commence proceedings afresh to decide this issue. [27] What weighs heavily with me in this regard is that as far back as 20 April 2020, the respondent was formally and correctly invited to make an offer in terms of clause 10. To this day, it has not done so. It would not be difficult for the respondent to comply with a direction to make an offer in terms of clause 10. The respondent fully set out what had transpired and, during July 2020, it obtained a detailed valuation of each of the eight portions of the farm as on 26 March 2020. The valuation was confirmed under oath. After all, as was said in Mokone v Tassos Properties CC and Another [2017] ZACC 25; 2017 (5) SA 456 (CC) para 59: ‘Court-coerced compliance by the grantor will be doing nothing more than to require her or him to honour what she or he had bargained for. It will not be an imposition.’ [28] As this would nevertheless constitute the granting of an indulgence to the appellant, there is no basis for varying the costs order of the high court. And the appellant should be directed to pay the costs of the appeal, including the costs of two counsel. I therefore do not think that the proposed order would cause prejudice to the respondent and its counsel did not allude to any. [29] These considerations have persuaded me that in the particular circumstances of this case, the interests of justice require that the respondent be directed to comply with clause 10. For these reasons, I make the following order: The order of the high court is varied only to the extent that the dismissal of the application is set aside. The respondent is directed to deliver to the appellant, within 10 days of the date of this order, a written offer, in terms of clause 10 of the lease agreement concluded by the parties on 13 April 2018, to purchase the leased premises, based on the deed of sale concluded by the respondent and Swellendam Plase (Pty) Ltd on 7 April 2020. The appellant is directed to pay the costs of the appeal, including the costs of two counsel. ________________________ C H G VAN DER MERWE JUDGE OF APPEAL Appearances For appellant: T D Potgieter SC Instructed by: M J Vermeulen Inc c/o Walkers Inc, Cape Town Hill McHardy & Herbst, Bloemfontein For respondent: R Goodman SC (with P van Zyl) Instructed by: Barnaschone Attorneys, Cape Town McIntyre & Van der Post, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM: The Registrar, Supreme Court of Appeal DATE: 15 December 2022 STATUS: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Plattekloof RMS Boerdery (Pty) Ltd v Dahlia Investment Holdings (Pty) Ltd (667/2021) [2022] ZASCA 182 (15 December 2022) Today the Supreme Court of Appeal (the SCA) handed down judgment in an appeal from the Western Cape Division of the High Court, Cape Town (the high court). It varied the high court’s order only to the extent that the dismissal of the application was set aside and directed that the respondent was to deliver to the appellant a written offer to purchase the leased property in question, based on Clause 10 of the lease concluded by the parties on 13 April 2018 (the lease). This appeal concerned a right of pre-emption in respect of two portions of a farm that the respondent, Dahlia Investment Holdings (Pty) Ltd had granted to the appellant, Plattekloof RMS Boerdery (Pty) Ltd. The farm consisted of eight separate portions, two of which were leased out to the appellant for a period of five years in terms of the lease. On 7 April 2020, the respondent sold all eight portions of the farm to Swellendam Plase (Pty) Ltd for a global purchase of R17 million (the Swellendam Plase offer). The deed of sale recorded that the farm was sold subject to the lease. The appellant subsequently sought specific performance of his right to pre-emption in respect of the two leased properties. The SCA was required to determine whether the appellant’s right to pre-emption would only be activated if the respondent received an offer regarding only the two portions concerned. The SCA determined that this could not be the case. The SCA thus held that the Swellendam Plase offer ‘triggered’ the appellant’s right of pre-emption. As to the appellant’s remedy, the SCA held that clause 10 of the lease, such being the clause setting out the right of pre-emption, determined that the appellant had no more than the right of first refusal to purchase the two portions and the respondent was, in turn, obliged to have made an offer to the appellant to purchase the two portions of the farm. Thus, the respondent was contractually obliged to determine, in good faith, what portion of the Swellendam Plase offer pertained to the two portions, and make a subsequent offer to the appellant. Swellendam Plase sought to purchase the entire farm and the fixed price of R17 million was stated without differentiating between the six portions and the two leased portions; the eight portions were sold as an indivisible transaction. The appellant contended that the Swellendam Plase offer was made by adding R4 million for the two portions to R13 million for the six portions to arrive at the amount of R17 million. This disputed contention was based on a weighing of probabilities, which could not be entertained in motion proceedings. Accordingly, the SCA determined that the main relief sought, being that the respondent be directed to make an offer of R4 million must fail. The appellant had a right to a bona fide offer on the basis of that part of the R17 million that pertained to the two portions. The SCA was particularly displeased with the fact that the respondent had the opportunity to tender an offer since 2020, but failed to do so. In the result, the SCA ordered the respondent to comply with the provisions of Clause 10 of the lease agreement. ~~~~ends~~~~

4013

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 371/2020 In the matter between: AFRIFORUM NPC APPELLANT and NELSON MANDELA FOUNDATION TRUST FIRST RESPONDENT MINISTER OF JUSTICE AND SECOND RESPONDENT CORRECTIONAL SERVICES DEPARTMENT OF JUSTICE THIRD RESPONDENT AND CORRECTIONAL SERVICES SOUTH AFRICAN HUMAN RIGHTS FOURTH RESPONDENT COMMISSION JOHANNESBURG PRIDE NPC FIRST AMICUS CURIAE FEDERASIE VAN AFRIKAANSE SECOND AMICUS CURIAE KULTUURVERENIGINGE NPC Neutral citation: Afriforum NPC v Nelson Mandela Foundation Trust and Others (Case no 371/2020) [2023] ZASCA 58 (21 April 2023) Coram: MAYA P and SCHIPPERS, PLASKET and MABINDLA- BOQWANA JJA and SAVAGE AJA Heard: 11 May 2022 Delivered: 21 April 2023 Summary: Constitutional Law – section 16(1) of the Constitution – freedom of expression – whether right infringed by prohibition of gratuitous public display of the old South African flag – symbol of apartheid and white supremacy – such display constitutes hate speech, unfair discrimination and harassment under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg, sitting as Equality Court (Mojapelo DJP sitting as court of first instance): Paragraph (2) of the order of the court below is set aside and replaced with the following order: ‘In terms of section 21(2) of the Equality Act, it is declared that subject to the proviso in section 12 of the Equality Act, any gratuitous public display of the Old Flag constitutes: (a) hate speech in terms of section 10(1) of the Equality Act; (b) unfair discrimination on the basis of race in terms of section 7 of the Equality Act; (c) harassment in terms of section 11 of the Equality Act.’ Save as aforesaid, the appeal is dismissed. There is no order as to costs of the appeal. ________________________________________________________________ JUDGMENT ________________________________________________________________ Schippers JA (Maya P and Plasket and Mabindla-Boqwana JJA and Savage AJA concurring) [1] This case brings into sharp focus the potency of a symbol of the cruel ideology of apartheid, infamous for its assault on the dignity, freedom and equality of black people. The main issue is whether the gratuitous display of that symbol – the former South African flag (the old flag) – is harmful, incites harm, and promotes and propagates hatred within the meaning of s 10(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act). [2] The appellant, Afriforum NPC (Afriforum), played a leading role in nationwide demonstrations to protest against the murder of farmers, held on Monday, 30 October 2017. They were called ‘the Black Monday protests’. It was widely reported in the mainstream and social media that at some of these protests, the old flag was displayed. These incidents led to a complaint against Afriforum lodged by the first respondent, Nelson Mandela Foundation Trust (NMF), with the Gauteng Division of the High Court, Johannesburg, sitting as an Equality Court (the high court), that the display of the old flag at the Black Monday protests was a contravention of the Equality Act. [3] The second respondent, the Minister of Justice and Constitutional Development (the Minister), and the third respondent, the Department of Justice and Correctional Services, were joined as parties in the proceedings in the high court. They were joined by the fourth respondent, the South African Human Rights Commission (SAHRC), when it applied for an order declaring that s 10(1) of the Equality Act was unconstitutional and invalid, to the extent that it restricted the conduct proscribed by s 10(1) to ‘words’ only. [4] The high court (Mojapelo DJP) did not issue the declaratory order sought by the SAHRC. The court interpreted s 10(1) broadly and purposively in the light of the objects of the Equality Act, namely that the prohibition of hate speech includes any expression of ideas, whether by words or conduct. This interpretation was confirmed by the Constitutional Court in Qwelane.1 The high court determined that the display of the old flag at the Black Monday protests constituted hate speech, unfair discrimination and harassment, within the meaning of ss 10(1), 7 and 11 of the Equality Act. All the parties participated in the appeal, save for two amici curiae that had been admitted by the high court. The appeal is with the leave of this Court. The facts [5] The basic facts were largely undisputed and can be briefly stated. Mr Sello Hatang, the NMF’s Chief Executive Officer (CEO), said that on the day of the protests he was giving tourists a guided tour of Robben Island near Cape Town, where former President Nelson Mandela and his fellow political prisoners had been incarcerated. The displays of the old flag brought two painful memories of Mr Hatang’s childhood to mind. The first was an incident during which two white boys addressed Mr Hatang (then ten years of age) and his brother in the following repulsive terms, ‘What are you kaffirs doing here?’2 His brother explained that the ‘k-word’ denoted hatred for, and was used to humiliate black people. This is how Mr Hatang described the effect of that incident on him: ‘It is my first vivid memory of being told that I was not only “other”, but less than human, because of the colour of my skin.’ [6] The second memory was about Mr Hatang’s grandmother. She was a domestic worker. She hated school holidays because she was subjected to racial abuse by groups of idle white children. Mr Hatang, who used to accompany his grandmother, would hear them singing, ‘Here comes a baboon’,3 referring to his grandmother, as they walked past the children on their way to her place of work. 1 Qwelane v South African Human Rights Commission and Another [2021] ZACC 22 2021 (6) SA 579 (CC); 2022 (2) BCLR 129 (CC) paras 113-114. 2 The statement was uttered in Afrikaans: ‘Wat soek julle hier, Kaffirs?’ 3 The abuse was hurled in Afrikaans: ‘Daar kom ‘n bobbejaan.’ She was powerless to do anything about the trauma and anguish she endured as a result of this abuse. [7] Mr Hatang recalled these memories because, as he put it, the old flag ‘represents nothing other than the inhumane system of racial segregation and subjugation that governed South Africa before 27 April 1994’. He went on to say that the gratuitous display of the old flag, more than a generation after the abolition of apartheid, reminded him that some South Africans still see him and black people as ‘other’ and would deny them the opportunity to be human. They have no concern or compassion for the majority of South Africans who suffered under apartheid. [8] On the day of the Black Monday protests and subsequently, the NMF received numerous media enquiries about its position on the displays of the old flag. On 5 November 2017 the NMF issued a media statement in which it said that it deplored the murder of farmers and respected the constitutional right of South Africans to protest; that the display of the old flag and the burning of the national flag was deeply problematic; that apartheid was a crime against humanity; and that displaying the flag of apartheid South Africa represented support for that crime. The media statement ended with the following question: ‘Is it time to criminalize displays of the old flag?’ [9] That question led to a debate on national television and radio, between Mr Hatang and Mr Kallie Kriel, the CEO of Afriforum. Mr Kriel, surprisingly, denied that the old flag had been displayed at any of the protests, dismissed reports about such displays as ‘fake news’, and subsequently published statements on Twitter to that effect. Afriforum, he said, discouraged its members from bringing the old flag to public gatherings which detracted from ‘the main message, which on Black Monday, was the issue of farm murders’. Mr Kriel stated that although it was ‘unwise’ to display the old flag as it would ‘offend people’; ‘it should not be unlawful’ as ‘it is part of history and you cannot ban history’. [10] Mr Hatang’s riposte was that both public and private displays of the old flag were offensive, since they made young people believe that it is acceptable to harbour racist views and then manifest them in public. Subsequently the NMF launched the application in the high court for a declaratory order that any gratuitous display of the old flag constitutes hate speech, unfair discrimination and harassment under the Equality Act. The founding affidavit states that such displays serve no genuine journalistic, academic or artistic purpose; and do nothing to advance social justice, national unity and human dignity – to the contrary. [11] Afriforum’s response to the claim that gratuitous displays of the old flag constitute hate speech, was that the relief sought was a ‘wide-reaching ban’. Mr Ernst Roets, its Deputy CEO who made the answering affidavit, went on to say this: ‘At the outset we acknowledge that the old South African flag has the capacity to cause offense and emotional distress. As an organisation, we have no particular love for the flag or what it represents. In the exceptionally rare instance that anyone participating in one of our events brings an old flag with them, we ask them to put it away.’ [12] Afriforum opposed the application in the high court, essentially on the ground that a ‘wide- reaching ban’ on public displays of the old flag ‘would be an unconstitutional infringement of the right to freedom of expression’. It contended that s 10(1) of the Equality Act regulated only ‘words’, not other forms of expression such as symbols. Therefore, it did not regulate displays of the old flag, which was neither speech, a call to action, nor incitement to cause harm. The display of the old flag was not harassment under s 11 of the Equality Act, because it did not amount to torment that was persistent and repetitive. Neither was it unfair discrimination under s 7, since it was not the dissemination of information and constituted protected speech in terms of the proviso in s 12 of the Equality Act. The decision of the high court [13] The high court considered the history of the old flag and what it represents, and came to the following conclusions. The Union Nationality and Flag Act 40 of 1927 (the Flag Act) was part of a statutory scheme designed to entrench racial segregation and white supremacy. The old flag is a vivid symbol of white supremacy and black disenfranchisement and oppression. The Flag Act was repealed by the Constitution of the Republic of South Africa Act 31 of 1961. The latter Act retained the old flag,4 entrenched electoral exclusion of everybody other than ‘white persons’,5 and vested the State President with absolute authority over ‘Bantu affairs’, including ‘Bantu locations’.6 [14] The old flag was retained in the Republic of South Africa Constitution Act 110 of 1983, which gave limited electoral rights to ‘Coloured’ and ‘Indian’ persons, but excluded black (African) people from the definition of South Africa’s ‘population groups’, entitled to ‘self-determination’. The 1983 Constitution gave special protection to the old flag: it provided that any person who ‘maliciously destroys or spoils the National Flag of the Republic’; or ‘commits any other act which is calculated to hold the National Flag of the 4 Section 5 of the South Africa Constitution Act 31 of 1961 (the 1961 Constitution). 5 Sections 34 and 46 of the 1961 Constitution restricted membership of the Senate and House of Assembly to ‘white persons’. Section 42 provided for the division of provinces into electoral divisions according to voters’ lists comprising ‘white voters’. 6 Section 111 of the 1961 Constitution, in relevant part, provided: ‘The control and administration of Bantu affairs and of matters specially or differentially affecting Asiatics throughout the Republic shall vest in the State President, who shall exercise all those special powers in regard to Bantu administration which immediately prior to the commencement of this Act were vested in the Governor- General-in-Council of the Union of South Africa, and any lands which immediately prior to such commencement vested in the said Governor-General-in-Council for the purpose of reserves of Bantu locations shall vest in the State President . . .’ Republic in contempt . . . shall be guilty of an offence and liable on conviction to a fine not exceeding R10 000 or imprisonment for a period not exceeding five years’.7 It was only in 1994 that the old flag was replaced by the current flag, with the end of apartheid and the coming into force of the Interim Constitution. [15] The high court found that any gratuitous display of the old flag, aside from being racist and discriminatory, demonstrates a clear intention to be hurtful; to be harmful and to incite harm; and to promote and propagate hatred against black people, in contravention of s 10(1) of the Equality Act. Such a display constitutes hate speech and is ‘divisive, retrogressive and destructive of our nascent non- racial democracy, the constitutional values of human dignity and equality and the building of a society united in its diversity’. [16] The high court made a determination, in terms of s 21(1) of the Equality Act, that the display of the old flag (introduced on 31 May 1928 and used throughout apartheid until it was abolished on 27 April 1994) at the Black Monday protests, constituted hate speech, unfair discrimination and harassment. The high court then issued a declaratory order in terms of s 21(2), that subject to the proviso in s 12 of the Equality Act, any display of the old flag constitutes hate speech within the meaning of s 10(1); unfair discrimination on the basis of race in terms of s 7; and harassment in terms of s 11 of that Act. [17] Afriforum challenged the high court’s order, mainly on the following grounds. The court did not have the power to grant the relief sought. The matter was not ripe for hearing. Public displays of the old flag are protected under the rights to freedom of expression, dignity and freedom of assembly; and do not constitute hate speech, unfair discrimination or harassment as envisaged in the Equality Act. Private displays of the flag are protected by the right to privacy. 7 Section 92(1) of the Constitution of the Republic of South Africa Act 110 of 1983. [18] At the outset it is convenient to deal with the argument that the high court’s order infringes the rights to dignity8 and freedom of assembly9 of those who publicly display the old flag. Save for quoting various excerpts from decisions of the Constitutional Court and other courts, Afriforum failed to make out a case in its answering papers, or to demonstrate in its written or oral submissions why a prohibition of gratuitous displays of the old flag violates these rights. [19] Afriforum did not explain how the display of the old flag implicates or infringes the right to dignity of the persons displaying it. This, especially when the founding affidavit made it clear that gratuitous displays of the old flag ‘do nothing to advance social justice, national unity and human dignity’; and that such displays were egregious examples of conduct that undermined equality and human dignity. Neither did Afriforum assert that it is impossible for, or an impediment to, its followers and others to assemble, demonstrate, picket or petition, without displaying the old flag. This is simply because the rights to dignity and freedom of assembly of persons who gratuitously display the old flag, are not implicated at all. The procedural defences [20] Afriforum argued that an equality court is a creature of statute and has no power to grant relief in respect of ‘prospective conduct that has not yet taken place’. The case brought by the NMF, so it was argued, was not directed at the displays of the old flag at the Black Monday protests and those who displayed it, but at future displays of the flag. 8 Section 10 of the Constitution 108 of 1996 provides: ‘Everyone has inherent dignity and the right to have their dignity respected and protected.’ 9 Section 17 of the Constitution states: ‘Everyone has the right, peacefully and unarmed, to assemble, to demonstrate, to picket and to present petitions.’ [21] Afriforum however disregards the role of the Equality Court in facilitating access to justice for the victims of hate speech, unfair discrimination and harassment. As Navsa JA said in Manong:10 ‘It is abundantly clear that the Equality Court was established in order to provide easy access to justice and to enable even the most disadvantaged individuals or communities to walk off the street, as it were, into the portals of the Equality Court to seek speedy redress against unfair discrimination, through less formal procedures.’ [22] But fundamentally, Afriforum ignores the broad powers conferred on the court by the Equality Act. The powers and functions of the Equality Court are set out in s 21 of the Equality Act. Section 21(2) provides that after holding an inquiry, ‘the court may make an appropriate order in the circumstances’, including a declaratory order. This is hardly surprising. In Rail Commuters Action Group,11 the Constitutional Court stated that ‘a declaratory order is a flexible remedy which can assist in clarifying legal and constitutional obligations in a manner that promotes the protection and enforcement of the Constitution and its values’. In addition, s 21(5) of the Equality Act emphasises that the Court ‘has all ancillary powers necessary or reasonably incidental to the performance of its functions and the exercise of its powers, including the power to grant interlocutory orders or interdicts’. [23] In Minister of Environmental Affairs and Tourism v George,12 this Court considered the nature of an equality court relative to a high court. It held that the Equality Act ‘vests equality courts with extensive procedural and remedial powers in complaints of unfair discrimination’, and that ‘the equality court is not a wholly novel structure, but is a High Court or a designated magistrates’ court’. Apart from the specific powers which the Equality Act confers, the only 10 Manong and Associates (Pty) Ltd v Department of Roads and Transport, Eastern Cape and Others [2009] ZASCA 50; 2009 (6) SA 589 (SCA); [2009] 3 All SA 528 (SCA) para 53. 11 Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail [2004] ZACC 20; 2005 (2) SA 359 (CC); 2005 (4) BCLR 301 (CC) para 107 at 410D-E. 12 Minister of Environmental Affairs and Tourism v George and Others 2007 (3) SA 62 (SCA) paras 3-4. distinction between a high court and an equality court is that the presiding Judges or magistrates must have undergone ‘social context training’. [24] The Equality Court is a specialised court with expedited rules and an informal procedure. It applies different evidential thresholds to that of a high court.13 The object of the Equality Act is to make the Equality Court as accessible as possible. The formal, adversarial court processes of other courts, which are often costly and potentially intimidating, have no place in the Equality Court.14 Proceedings may be instituted by any person acting in their own interest or any person acting on behalf of another who cannot act in their own name.15 The Regulations made under the Equality Act prescribe the procedures to be followed at an inquiry, and create an informal court system which places substance above form or technicality.16 [25] The Equality Act obliges an equality court in which proceedings are instituted to hold an inquiry in the manner prescribed in the regulations and to ‘determine whether unfair discrimination, hate speech or harassment . . . has taken place, as alleged’.17 That is precisely what happened in this case. The NMF’s complaint about the displays of the old flag at the Black Monday protests and their impact on the complainant and others, were set out in the affidavit filed in support of the complaint. That evidence was never challenged. Afriforum only disputed the contention that the display of the old flag was unlawful. The high court granted declaratory relief based on the evidence before it. But the court also declared that the displays of the old flag at the Black Monday protests, as a matter of fact, constituted hate speech, unfair discrimination and harassment. It was empowered to do so under s 21(2) of the Equality Act. 13 AS v Neotel (Pty) Ltd [2018] ZAEQC 1; 2019 (1) SA 622 (GJ) para 10. 14 George and Others v Minister of Environmental Affairs and Tourism 2005 (6) SA 297 (EqC) para 12. 15 Section 20 of the Equality Act. 16 J A Kok, A Socio-Legal Analysis of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (2007, unpublished doctoral dissertation, University of Pretoria) 145. 17 Section 21(1) of the Equality Act; George fn 12 para 5. [26] It follows that there was nothing abstract, academic or hypothetical about the NMF’s complaint. It was based on actual contraventions of the Equality Act, and grounded in concrete events at which the old flag was displayed. Afriforum’s argument to the contrary, in reliance on JT Publishing,18 is misconceived. [27] For the same reasons, Afriforum’s argument based on the doctrine of ripeness, namely that a court deals with situations that have already ripened or crystallised, and not with prospective or hypothetical ones,19 is unsustainable. Apart from this, the old flag is displayed from time to time. It was again displayed at the Black Monday protests. There is a public controversy about the lawfulness of doing so. The purpose of the application by the NMF and the SAHRC was to resolve that very controversy for the benefit of all. Declaratory orders by their very nature, are often directed at conduct that has not yet occurred. But they are vital in the right context, specifically to address issues of public importance or involving a compelling public interest. The Constitutional Court has held that declaratory orders ‘can bring clarity and finality to disputes that may, if unresolved, have far-reaching consequences for each party’.20 So, even if there had not been an actual infringement of the Equality Act, this is precisely the kind of case in which a declaratory order of the sort issued by the high court is apposite. [28] In any event, it is legitimate for the SAHRC to say: there has been a public display of the old flag but it does not wish to bring proceedings against the individuals who displayed the flag on that occasion, but seeks instead, in the public interest, that a principle be established that the gratuitous display of the old flag is unlawful. Such an approach is entirely consonant with a guiding principle 18 JT Publishing (Pty) Ltd and Another v Minister of Safety and Security and Others 1997 (3) SA 514 (CC) para 15. 19 Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others 1996 (1) SA 984 (CC) para 199. 20 Competition Commission v Hosken Consolidated Investments Ltd and Another [2019] ZACC 2; 2019 (4) BCLR 470 (CC); 2019 (3) SA 1 (CC) para 78. of the Equality Act: to take measures to eliminate unfair systemic discrimination and inequalities.21 As the Constitutional Court stated in Qwelane: ‘Our Constitution requires that we not only be reactive to incidences or systems of unfair discrimination, but also pre-emptive. We need to act after the damage has occurred where so required but, importantly, we are also required to act to ensure that it does not occur.’22 The values underpinning the prohibition of hate speech [29] The starting point for an analysis of the meaning and effect of s 10(1) of the Equality Act, is the Bill of Rights in the Constitution. It contains the fundamental rights to freedom of expression, equality and dignity. Section 10(1), which effectively proscribes hate speech, is inextricably linked to these rights. As the Constitutional Court said in Islamic Unity Convention,23 the State has a direct interest in regulating hate speech ‘because of the harm it may pose to the constitutionally mandated objective of building a non-racial and non-sexist society based on human dignity and the achievement of equality’. [30] Section 16(1) of the Constitution guarantees the right of freedom of expression to all persons.24 Freedom of expression is fundamental to most other rights and freedoms, and quintessential of democracy.25 However, expression can, and often does, infringe upon the rights and interests of others. This is 21 Section 4(2) of the Equality Act. 22 Qwelane fn 1 para 110. 23 Islamic Unity Convention v Independent Broadcasting Authority and Others 2002 (4) SA 294 (CC) para 33. 24 Section 16 of the Constitution provides: ‘Freedom of expression (1) Everyone has the right to freedom of expression, which includes- (a) freedom of the press and other media; (b) freedom to receive or impart information or ideas; (c) freedom of artistic creativity; and (d) academic freedom and freedom of scientific research. (2) The right in subsection (1) does not extend to- (a) propaganda for war; (b) incitement of imminent violence; or (c) advocacy of hatred that is based on race, ethnicity, gender or religion, and that constitutes incitement to cause harm.’ 25 Economic Freedom Fighters and Another v Minister of Justice and Correctional Services and Another [2020] ZACC 25; 2021 SACR 387 (CC); 2021 (2) SA 1 (CC); 2021 (2) BCLR 118 (CC) paras 1 and 95; Democratic Alliance v African National Congress and Another [2015] ZACC 1; 2015 (2) SA 232 (CC); 2015 (3) BCLR 298 paras 122-123; S v Mamabolo (E TV and Others Intervening) 2001 (3) SA 409 (CC) para 37. recognised in s 16(2) of the Constitution, which excludes hate speech from the right to freedom of expression. It does so, as the Constitutional Court emphasised in Qwelane, because ‘[h]ate speech is the antithesis of the values envisioned by the right to free speech – whereas the latter advances democracy, hate speech is destructive of democracy’;26 and it ‘undermines the constitutional project of substantive equality and acceptance in our society’.27 [31] The Equality Act is the legislation mandated by s 9 of the Constitution to prevent unfair discrimination and to promote the achievement of equality.28 Equality among all people who live in South Africa is at the heart of the Constitution.29 This is emphasised throughout the Constitution, particularly in the founding values in s 1.30 [32] Human dignity informs the interpretation of all other rights, including the rights to freedom of expression and equality.31 In Qwelane,32 the Constitutional Court described the impact of hate speech on the right to dignity as follows: ‘Hate speech is one of the most devastating modes of subverting the dignity and self-worth of human beings. This is so because hate speech marginalises and delegitimises individuals based on their membership of a group. This may diminish their social standing in the broader society, outside of the group they identify with. It can ignite exclusion, hostility, discrimination and violence against them.’ 26 Qwelane fn 1 para 78. 27 Qwelane fn 1 para 130. 28 Qwelane fn 1 para 48. Section 9(1) read with s 9(4) of the Constitution requires Parliament to enact legislation to ‘prevent and prohibit unfair discrimination’. 29 Du Preez v Minister of Justice and Constitutional Development and Others [2006] 3 All SA 271 (SE) para 12. 30 Section 1 of the Constitution, in relevant part, reads: ‘Republic of South Africa The Republic of South Africa is one, sovereign, democratic state founded on the following values: (a) Human dignity, the achievement of equality and the advancement of human rights and freedoms. (b) Non-racialism and non-sexism.’ 31 Dawood and Another v Minister of Home Affairs and Others; Shalabi and Another v Minister of Home Affairs and Others; Thomas and Another v Minister of Home affairs and Others 2000 (3) SA 936 (CC) para 35. 32 Qwelane fn 1 para 1. Section 10(1) of the Equality Act: hate speech [33] In terms of the Constitutional Court’s order in Qwelane,33 the prohibition of hate speech in s 10(1) of the Equality Act now reads: ‘Subject to the proviso in section 12, no person may publish, propagate, advocate or communicate words that are based on one or more of the prohibited grounds, against any person, that could reasonably be construed to demonstrate a clear intention to be harmful or to incite harm; and to promote or propagate hatred.’34 [34] As already stated, the high court interpreted s 10(1) broadly and purposively in the light of the objects of the Equality Act and the underlying constitutional imperatives. Its interpretation means that any expression of ideas, whether by word or conduct, is included in the prohibition in s 10(1). In approving this interpretation, the Constitutional Court stated that ‘[t]his wide meaning accords not only with our Constitution, but also with the provisions of the Equality Act. And it is consonant with international law and comparative foreign law’.35 [35] The Equality Act itself states what factors should be considered in its application. Section 4(2) provides: ‘In the application of this Act the following should be recognised and taken into account: (a) The existence of systemic discrimination and inequalities, particularly in respect of race, gender and disability in all spheres of life as a result of past and present unfair discrimination, brought about by colonialism, the apartheid system and patriarchy; and (b) the need to take measures at all levels to eliminate such discrimination and inequalities.’ [36] When the amended prohibition of hate speech in s 10(1) is read with the proviso in s 12 of the Equality Act, it proscribes expression: (a) that constitutes 33 Paragraph 1(d) of the order in Qwelane, fn 1. Prior to this order, s 10(1) proscribed the publication, propagation or communication of words based on a prohibited ground, that could reasonably be construed to demonstrate a clear intention to ‘be hurtful’. 34 Qwelane fn 1 at 3 of the judgment. 35 Qwelane fn 1 para 113. publication, propagation or communication of words; (b) based on one or more of the prohibited grounds against any person; (c) that could reasonably be construed to demonstrate a clear intention to be harmful or to incite harm, and to promote or propagate hatred; and (d) provided that bona fide engagement in artistic creativity, academic and scientific enquiry, fair and accurate reporting in the public interest or publication of any information, is excluded. In what follows, each of these elements of s 10(1) are considered in turn. (a) The publication, propagation or communication of words [37] In Qwelane the Constitutional Court held that the use of the terms ‘advocate’ and ‘propagate’ in the section ‘is indicative of ideas rather than words, if they are to be accorded their full meaning’.36 These two concepts suggest that the intention is to give effect to article 4 of the International Convention on the Elimination of all forms of Racial Discrimination (ICERD) and s 16(2)(c) of the Constitution, which are concerned with racist ‘propaganda’ and the ‘advocacy’ of hatred.37 [38] The concept ‘communicate’ denotes ‘the conveyance of ideas’, and all the verbs used in the section require some form of public transmission or dissemination.38 The prohibition extends to the expression of ideas by conduct. It targets the ‘meaning behind the words, and not simply the words’.39 There is no question that the gratuitous public display of the old flag constitutes the publication, propagation, advocacy, or communication of a message, within the meaning of s 10(1) of the Equality Act. 36 Qwelane fn 1 para 114. 37 Ibid. 38 Qwelane fn 1 para 115. 39 Ibid. (b) based on one or more of the prohibited grounds [39] The message conveyed by gratuitous public displays of the old flag is plainly one based on race – apartheid and white supremacy. Indeed, this is common ground. Afriforum did not take issue with the impact of the gratuitous displays of the old flag on Mr Hatang or black people generally. And as stated, it acknowledged that the old flag causes offence and emotional distress. That is why it asks its followers to put away the old flag at Afriforum events, and not to display it. [40] The old flag is an awful reminder of the anguish suffered by millions of people under apartheid South Africa before the advent of democracy in 1994. It symbolises, clearly and painfully, the policy and manifestation of apartheid. In fact, Afriforum’s answering affidavit states: ‘During Apartheid the old flag was held aloft as a symbol of the past regime’s power. At the time it was seen as a constant reminder of an oppressive and racist system’. As stated in the founding affidavit of the SAHRC, the old flag represents precisely that racist and repressive regime, and the dehumanising ideologies espoused during its rule – the racial superiority of white South Africans and the corresponding inferiority of black South Africans. [41] As a revered icon of apartheid, the old flag represents hate, pain and trauma for most people, particularly black South Africans. The gratuitous public displays by people of the old flag – a provocative symbol of repression, authoritarianism and racial hatred – brings into unmistakeable view their affinity and mourning for the apartheid regime, characterised by its degrading, oppressive and undignified treatment of black South Africans. The message conveyed is a longing for the days of apartheid and the restoration of white minority rule. (c) reasonably be construed to demonstrate a clear intention to be harmful or to incite harm, and to promote or propagate hatred [42] The Constitutional Court has held that this is an objective test. The question is whether a reasonable person in the circumstances surrounding the expression, would reasonably construe the words or conduct as demonstrating an intention to be harmful, incite harm or propagate hatred.40 [43] The emphasis is on the ‘effects of the hate speech, not the intent’.41 In this regard, the Constitutional Court observed that ‘systemic discrimination tends to be more widespread than intentional discrimination’: ‘This Court has acknowledged that “systemic motifs of discrimination” are part of the fabric of our society. This analysis is apt when considering the philosophical underpinnings of hate speech prohibitions that attach civil liability, coupled with the role of hate speech and systemic discrimination in this country.’42 [44] The objects of the intention – to be harmful or incite harm, or to promote or propagate hatred – must be read conjunctively.43 However, the section distinguishes between the concepts, ‘harmful’ and ‘to incite harm’, which the Constitutional Court referred to as ‘clear disjunctive terms’.44 Accordingly, s 10(1) prohibits expression that harms or ‘evokes a reasonable apprehension of harm to the target group’.45 The incitement of harm and the promotion or 40 Qwelane fn 1 paras 96-101. 41 Qwelane fn 1 para 100, emphasis in the original. 42 Ibid, emphasis in the original. The Constitutional Court endorsed the approach in Saskatchewan (Human Rights Commission) v Whatcott 2012 SCC 11; [2013] 1 SCR 467 (Whatcott) para 126, in which the Supreme Court of Canada stated: ‘The preoccupation with the effects, and not with intent, is readily explicable when one considers that systemic discrimination is much more widespread in our society than is intentional discrimination. To import a subjective intent requirement into human rights provisions, rather than allowing tribunals to focus solely upon effects, would thus defeat one of the primary goals of the anti-discrimination statute.’ 43 Qwelane fn 1 paras 102-110. 44 Qwelane fn 1 para 112. 45 Ibid. propagation of hatred are the key elements of hate speech,46 since freedom of expression requires tolerance of speech that shocks and offends.47 [45] The requirement that speech ‘be harmful or incite harm’ does not require a causal link to be established between the speech and subsequent actions taken against individuals or groups at whom the speech is targeted. Requiring such a causal link would be contrary to and undermine the provisions of the Equality Act, ‘in that not every instance of harmful . . . speech will result in imminent violence’. However, the fact that it does not result in imminent violence does not detract from the reality that such expression would constitute hate speech.48 [46] The Constitutional Court has held that racist speech is particularly egregious. In Rustenburg Platinum Mine, it said:49 ‘Our Constitution rightly acknowledges that our past is one of deep societal divisions characterised by strife, conflict, untold suffering and injustice. Racism and racial prejudices have not disappeared overnight, and they stem, as demonstrated in our history, from a misconceived view that some are superior to others. These prejudices do not only manifest themselves with regard to race but it can be seen with reference to gender discrimination.’ [47] Racist conduct, the Constitutional Court said in South African Revenue Service,50 must be dealt with firmly: ‘[R]acist conduct requires a very firm and unapologetic response from the courts, particularly the highest courts. Courts cannot therefore afford to shirk their constitutional obligation or spurn the opportunities they have to contribute meaningfully towards the eradication of racism and its tendencies’ 46 In the light of the judgment in Qwelane, which removed the requirement that hate speech must also ‘be hurtful’. 47 Following the judgment in Qwelane, which removed the requirement that it must also ‘be hurtful’. 48 Qwelane fn 1 para 111. 49 Rustenburg Platinum Mine v SAEWA obo Bester [2018] ZACC 13; 2018 (5) SA 78 (CC); 2018 (8) BCLR 951 (CC) para 52. 50 South African Revenue Service v Commission for Conciliation, Mediation and Arbitration and Others [2016] ZACC 38; 2017 (1) SA 549 (CC); 2017 (1) BCLR 241 (CC) para 14. [48] These two cases, it was held in Qwelane,51 ‘demonstrate the presence of deeply rooted structural subordination in relation to race’. The Court went on to say: ‘In these cases, the Court underscored how facially innocuous words or notorious words have to be understood based on the different structural positions in post-apartheid South African society. This is an approach which takes cognisance of how words perpetuate and contribute towards systemic disadvantage and inequalities. In essence, this is the corollary of our substantive equality demands that flow from the Constitution. The purpose of hate speech regulation in South Africa is inextricably linked to our constitutional object of healing the injustices of the past and establishing a more egalitarian society. This is done by curtailing speech which is part and parcel of the system of subordination of vulnerable and marginalised groups in South Africa.52 [49] The message communicated by gratuitous public displays of the old flag is not innocuous, let alone facially innocuous. Rather, those who publicly hold up or wave the old flag, convey a brazen, destructive message that they celebrate and long for the racism of our past, in which only white people were treated as first- class citizens while black people were denigrated and demeaned. It is a glorification and veneration of the hate-filled system that contributed to most of the ills that beset our society today. The message is aimed at intimidating those who suffered, and continue to suffer, the ravages of apartheid; and poses a direct challenge to the new constitutional order. This, when, as stated in the Minister’s affidavit, it has been determined that apartheid is a crime against humanity.53 And 51 Qwelane fn 1 para 86. 52 Ibid. 53 The International Convention on the Suppression and Punishment of the Crime of Apartheid, 1976 (Gen Assembly Res 3068/1976 Article I(1) and the Rome Statute Article 7(2)(h) states: ‘The States Parties to the present Convention declare that apartheid is a crime against humanity and that inhuman acts resulting from the policies and practices of apartheid and similar policies and practices of racial segregation and discrimination, as defined in article II of the Convention, are crimes violating the principles of international law, in particular the purposes and principles of the Charter of the United Nations, and constituting a serious threat to international peace and security. The Rome Statute describes the crime of apartheid as, “inhumane acts of a character similar to those referred to in paragraph 1, committed in the context of an institutionalized regime of systematic oppression and domination by one racial group over any other racial group or groups and committed with intention of maintaining that regime”.’ In 1984 the UN Security Council at its 2560th meeting, endorsed this Resolution (SC Resolution 556 (1984) of 23 October 1984). when Afriforum itself states: ‘Most South Africans recoil from the old flag and openly denounce Apartheid as a crime against humanity’. [50] Such displays of the old flag are calculated to be harmful: it results in ‘deep emotional and psychological harm that severely undermines the dignity of the targeted group’54 – black people. It also incites harm: it is able to ignite exclusion, hostility, discrimination and violence against them.55 It can, ‘have a severely negative impact on the individual’s sense of self-worth and acceptance. This impact may cause the target group members to take drastic measures in reaction, perhaps avoiding activities which bring them into contact with non-group members or adopting attitudes and postures directed towards blending in with the majority’.56 This, in turn, not only perpetuates systemic disadvantage and inequalities, but also obstructs the constitutionally mandated objective of building a non-racial society based on human dignity and the achievement of equality; and impairs the pursuit of national unity and reconciliation.57 In short, hate speech tears at the very fabric of our society.58 [51] That brings me to last element of s 10(1) of the Equality Act: the promotion or propagation of hatred. The word ‘promote’ in this context, means to ‘further or encourage the progress or existence of’ hatred.59 To ‘propagate’ means to ‘extend the bounds of’, ‘spread (esp. an idea, practice, etc.) from place to place’,60 or ‘promulgate; disseminate’61 hatred. 54 Qwelane fn 1 para 154. 55 Qwelane fn 1 para 1. 56 R v Keegstra [1990] 3 SCR 697 at 746i-j, approved in Qwelane fn1 para 154. 57 Islamic Unity Convention fn 23 paras 28 and 33; Qwelane fn 1 para 1. 58 Qwelane fn 1 para 1. 59 Collins English Dictionary online at www.collinsdictionary.com/dictionaryenglishpromote (accessed on 14 April 2023). 60 L Brown The New Shorter Oxford English Dictionary on Historical Principles (3 ed 1993) Vol 2 at 2378. 61 Collins English Dictionary online at www.collinsdictionary.com/dictionaryenglishpromote (accessed on 14 April 2023). [52] The Constitutional Court, with reference to three Canadian cases, held that hate speech is not merely offensive expression, but ‘extreme detestation and vilification which risks provoking discriminatory activities’ against the target group. The first of these cases, Canada v Taylor,62 defined ‘hatred’ as, ‘strong and deep felt emotions of detestation, calumny and vilification’. In the second, R v Andrews,63 it was said that ‘[t]o promote hatred is to instill detestation, enmity, ill-will and malevolence in another’. Finally, in R v Keegstra, the court stated that hatred is ‘the most severe and deeply felt form of opprobrium’, that ‘is predicated on destruction, and hatred against identifiable groups therefore thrives on insensitivity, bigotry and destruction of both the target group and the values of our society’.64 [53] The gratuitous public display of the old flag is extremely degrading and dehumanising to those who suffered under apartheid. This was not disputed by Afriforum as the high court noted in its judgment. The display exposes those who suffered to racial bigotry, detestation and vilification, and inspires hatred and extreme ill-will against them. The message being sent, intentionally, is that life in South Africa was better under apartheid and black people are to be downtrodden, despised and denied their humanity, solely on account of their race. There is no escaping it: the message legitimises white supremacy. [54] It is therefore unsurprising that white supremacists around the world have adopted and used the old flag as a symbol of hatred, oppression, and racial superiority. The founding affidavit of the SAHRC refers to the case of the convicted murderer, 21-year old Mr Dylann Roof (Roof), who shot and killed nine black people gathered for a Bible study in Charleston, South Carolina in the United States, in June 2015. He posted a photograph on the internet, annexed to 62 Canada (Human Rights Commission) v Taylor [1990] 3 SCR 892 at 928. 63 R v Andrews [1990] 3 SCR 697 at 870. 64 R v Keegstra fn 56 at fn 700 and 777 of the judgment. the affidavit, which shows him wearing a black jacket with two conspicuous patches affixed to the right front of it: the old flag and below it, the flag of white- ruled Rhodesia, which was forced to concede power to a non-racial democracy, now Zimbabwe. Roof’s choice of symbols and the murder of black worshippers, could hardly send a stronger message of white supremacy and hatred. [55] The United States Court of Appeals for the Fourth Circuit upheld Roof’s conviction on, inter alia, ‘nine counts of racially motivated hate crimes resulting in death’.65 The Court’s description of Roof’s claim of white supremacy and hatred that caused him to commit these heinous crimes, is chilling: ‘He also used the internet to propagate his racist ideology. In a journal that the police found in Roof’s home, Roof had written the name of a website he had created. The website was hosted by a foreign internet server, to which Roof made monthly payments. Hours before the shootings, Roof uploaded racist material to the website. The website included hyperlinks to text and photos. The text linked to a document where Roof expressed his virulent racist ideology, claimed white superiority, and called African Americans “stupid and violent.” He discussed black-on-white crime, claiming it was a crisis that the media ignored. He issued a call to action, explaining that it was not “too late” to take America back and “by no means should we wait any longer to take drastic action.” He stated that nobody “was doing anything but talking on the internet,” that “someone has to have the bravery to take it to the real world,” and “I guess that has to be me.” ’66 [56] For the above reasons, any gratuitous public display of the old flag satisfies the requirement of promoting and propagating hatred as envisaged in s 10(1) of the Equality Act. It provides fertile ground for the violence and brutality of racism. No wonder the Equality Act is aimed at ‘the eradication of unfair discrimination, hate speech and harassment, particularly on the grounds of race’.67 65 United States of America v Dylann Storm Roof decided on 25 August, 2021 225 F. Supp. 3D413 (D.S.C. 2016). 66 US v Roof fn 65 4623–4627. 67 Section 2(c) of the Equality Act, emphasis added. (d) The proviso in section 12 [57] The prohibition of hate speech in s 10 is subject to the proviso in s 12 of the Equality Act.68 The high court therefore rightly made its declaratory order subject to s 12, ie that a display of the old flag for artistic, academic or journalistic purposes, is not prohibited. [58] Afriforum argued that the high court’s order constitutes a ‘wide-reaching ban’ on the display of the old flag, and an unconstitutional infringement of the right to freedom of expression. The argument is groundless. The high court emphasised that the NMF had not sought an order banning the old flag, but that its public display be confined to genuine artistic, academic or journalistic expression in the public interest. For this reason, the court did not impose a wholesale ban on displays of the old flag. Instead, it declared that displays of the old flag that do not fall within the proviso in s 12, constitute hate speech, unfair discrimination and harassment. Section 7 of the Equality Act: unfair discrimination [59] In terms of the Equality Act, ‘discrimination’ includes any act, omission or situation which imposes disadvantage on any person on one or more of the prohibited grounds’. For present purposes, the prohibited ground is race. Section 7(a) provides: ‘Prohibition of unfair discrimination on grounds of race Subject to section 6, no person may unfairly discriminate against any person on the ground of race, including- 68 Section 12 of the Equality Act provides: ‘Prohibition of dissemination and publication of information that unfairly discriminates No person may- (a) disseminate or broadcast any information; (b) publish or display any advertisement or notice, that could reasonably be construed or reasonably be understood to demonstrate a clear intention to unfairly discriminate against any person: Provided that bona fide engagement in artistic creativity, academic and scientific inquiry, fair and accurate reporting in the public interest or publication of any information, advertisement or notice in accordance with section 16 of the Constitution, is not precluded by this section.’ (a) the dissemination of any propaganda or idea, which propounds the racial superiority or inferiority of any person, including incitement to, or participation in, any form of racial violence;’69 [60] As in the case of hate speech in terms of s 10(1) of the Equality Act, the prohibitions of unfair discrimination on the ground of race and harassment, are statutory delicts actionable in the Equality Court.70 The elements of these statutory delicts must be established objectively,71 on a balance of probabilities.72 [61] Section 13(1) requires a respondent to show the absence of racial discrimination. It reads: ‘Burden of proof (1) If the complainant makes out a prima facie case of discrimination- (a) the respondent must prove, on the facts before the court, that the discrimination did not take place as alleged; or (b) the respondent must prove that the conduct is not based on one or more of the prohibited grounds. (2) If the discrimination did take place- (a) on a ground in paragraph (a) of the definition of “prohibited grounds”, then it is unfair, unless the respondent proves that the discrimination is fair; (b) on a ground in paragraph (b) of the definition of “prohibited grounds”, then it is unfair- (i) if one or more of the conditions set out in paragraph (b) of the definition of “prohibited grounds” is established; and (ii) unless the respondent proves that the discrimination is fair.’ 69 Section 6 of the Equality Act contains a general prohibition of unfair discrimination. It states: ‘Neither the State nor any person may unfairly discriminate against any person.’ 70 Qwelane fn 1 para 95 71 Qwelane fn 1 paras 96-101. 72 Social Justice Coalition and Others v Minister of Police and Others [2018] ZAWCHC 181; 2019 (4) SA 82 (WCC) paras 67-68. [62] Section 14(2) provides that in deciding whether a respondent has proved that the discrimination is fair, the context and the factors referred to in subsection (3) must be taken into account. These factors include the following: ‘(a) whether the discrimination impairs or is likely to impair human dignity; (b) the impact of likely impact of the discrimination on the complainant; (c) the position of the complainant in society and whether he or she suffers from patterns of disadvantage or belongs to a group that suffers from such patterns of disadvantage; (d) the nature and extent of the discrimination; (e) whether the discrimination is systemic in nature; . . .’ [63] The evidence established that the displays of the old flag at the Black Monday protests propounded the racial superiority of white people and the racial inferiority of black people. Having regard to the factors listed in ss 14(2) and (3) of the Equality Act, the public displays of the old flag at the Black Monday protests were plainly actual, and not merely prima facie, proof of racial discrimination. Afriforum did not challenge this evidence; neither did it adduce any evidence to show that the discrimination did not take place, nor that the public displays of the old flag were not based on race, as required by s 13(1). [64] It follows that the gratuitous public display of the old flag constitutes unfair discrimination based on race, within the meaning of s 7 of the Equality Act. This interpretation, and that of s 10(1) referred to above, accords with the objects of the Act, which include facilitating compliance with the State’s treaty obligations under the ICERD and the International Covenant on Civil and Political Rights (ICCPR), that are binding on this country.73 South Africa ratified the ICERD on 9 January 1999, and the ICCPR on 10 December 1998. 73 In terms of s 2(h) of the Equality Act, its objects include ‘compliance with international law obligations including treaty obligations in terms of, amongst others, the Convention on the Elimination of all Forms of Racial Discrimination and the Convention on the Elimination of all Forms of Discrimination against Women’. The preamble to the Act also refers to South Africa’s international obligations under binding treaties and customary international law. [65] The ICERD obliges State Parties to take positive measures to eradicate all incitement of racial hatred or acts of discrimination in any form; and to declare all dissemination of ideas based on racial superiority, hatred, discrimination, acts of violence and incitement to such acts, offences punishable by law.74 The ICCPR prohibits ‘any advocacy’ of racial hatred ‘that constitutes incitement to discrimination’.75 Section 11 of the Equality Act: harassment [66] Section 11 of the Equality Act states: ‘No person may subject any person to harassment.’ The Act defines ‘harassment’ as, ‘unwanted conduct which is persistent or serious and demeans, humiliates or creates a hostile and intimidating environment or is calculated to induce submission by actual or threatened adverse consequences and which is related to- (a) sex, gender or sexual orientation; (b) a person’s membership or presumed membership of a group identified by one or more of the prohibited grounds or a characteristic associated with such group;’ [67] The high court correctly concluded that Afriforum’s argument that the display of the flag did not constitute harassment because it did not amount to torment that was persistent and repetitive, was unsound. In the light of the evidence that any gratuitous public display of the old flag seriously demeans, humiliates and creates a hostile and intimidating environment for victims of 74 Article 4 of the ICERD provides: ‘State parties condemn all propaganda and all organisations which are based on ideas or theories of superiority of one race or group of persons of one colour or ethnic origin, or which attempt to justify or promote racial hatred and discrimination in any form, and undertake to adopt immediate and positive measures designed to eradicate all incitement to, or acts of such discrimination and, to this end, with due regard to the principles embodied in the Universal Declaration of Human Rights and the rights expressly set forth in article 5 of this Convention, inter alia: (a) shall declare an offence punishable by law all dissemination of ideas based on racial superiority or hatred, incitement to racial discrimination, as well as acts of violence or incitement to such acts against any race or group of persons of another colour or ethnic origin, and also the provision of any assistance to racist activities, including the financing thereof. 75 Article 20 para 2 of the ICCPR provides that ‘[a]ny advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence shall be prohibited by law’. apartheid, particularly black people, the finding that such a display constitutes harassment under s 11, cannot be faulted. [68] Before us, Afriforum conceded that a display of the old flag could be used to harass a person, but argued that not all displays envisaged in the high court’s order would constitute harassment. It cited the private display of the flag, which is not aimed at any person, as an example of this. In cases where all those witnessing the display are willing participants, so it was argued, they would also not be subject to unwanted conduct and none of them would have been harassed. However, Afriforum misses the point. It is the gratuitous public display of the old flag that constitutes harassment as defined in the Equality Act. It cannot be suggested that those who witness the display of the old flag in the privacy of a home, are all ‘willing participants’. They may or may not subscribe to the racist ideology that the old flag represents. [69] What remains is Afriforum’s argument that private displays of the flag are protected by the right to privacy in s 14 of the Constitution.76 Paragraph (2) of the high court’s order states that ‘any’ display of the old flag constitutes hate speech, unfair discrimination and harassment. The court reasoned that in modern-day South Africa, there is hardly any space which is private to one race to the exclusion of another; and that displaying the old flag ‘in private spaces like homes and schools is equally unacceptably offensive and “hurtful”, as black people are invariably employed and exposed in other ways to such spaces’. [70] There can be no dispute that the gratuitous display of the old flag at a school, be it public or private, would fall foul of ss 10(1), 7 and 11 of the Equality 76 Section 14 of the Constitution provides: ‘Everyone has the right to privacy, which includes the right not to have – (a) their person or home searched; (b) their property searched; (c) their possessions seized; or (d) the privacy of their communications infringed.’ Act: it is a public space. The high court however erred in issuing a declaratory order which includes any display of the old flag within the privacy of a home, as being a contravention of the Act, for two reasons. First, the NMF failed to state a claim on which such relief could be granted. The inquiry before the high court as to whether hate speech, unfair discrimination or harassment had taken place, was squarely founded on gratuitous public displays of the old flag at the Black Monday protests. That was the conduct ‘alleged’ within the meaning of s 21(1) of the Equality Act, and the issue the court was called upon to decide. [71] Second, the issue as to whether a private display of the old flag would contravene the Equality Act was not properly and fully argued; neither in the high court nor in this Court. It is therefore imprudent and inappropriate for this Court to pronounce upon it. The issue is not fit for judicial decision in this case, and no hardship will be caused to any of the parties if its consideration is withheld, until such a complaint is lodged with the Equality Court. It follows that paragraph (2) of the high court’s order must be amended. [72] Afriforum relies on Qwelane for its submission that the high court erred in declaring private displays of the old flag as hate speech. The Constitutional Court stated that the concepts to ‘promote’, and ‘propagate’ hatred in s 10(1)(c) of the Equality Act ‘do not fit the notion of communicating in private’; and the word, ‘communicate’ in s 10(1) excludes private conversations.77 The Court went on to say that our most private communications form part of the ‘inner sanctum of the person’, which is in the ‘truly personal realm’,78 and are thus protected by the right to privacy. The prohibition of hate speech should not extend to private communications.79 77 Qwelane fn 1 para 116. 78 Qwelane fn 1 para 117. 79 Qwelane fn 1 paras 117-118. [73] However, Afriforum’s reliance on these statements by the Constitutional Court, merely underscores the inappropriateness of deciding, in the present case, the question whether private displays of the old flag contravene the Equality Act. This however, is not to say that a private display of the old flag can never breach the provisions of the Equality Act. It is hard to see how a display of the old flag in the privacy of a home to which, for example, family members, children or young people are invited and indoctrinated in racism and white supremacy, would not entitle a person to institute proceedings in the Equality Court for an order that there has been a breach of the Act. But that is a case for another day. [74] Finally, there is the question of costs. In the high court the parties agreed that there should be no costs order. However, in this Court Afriforum, relying on Biowatch,80 submitted that it was entitled to costs if the appeal succeeded and if not, each party should pay its own costs. By reason of this stance, the NMF contended that it was entitled to costs should the appeal fail. The SAHRC did not seek a costs order on appeal. There is no reason why the Biowatch principle should not apply: this is constitutional litigation in which Afriforum proffered defences based on the protection of fundamental rights. It is thus appropriate that there should be no costs order on appeal. [75] In the result, the following order is issued: Paragraph (2) of the order of the court below is set aside and replaced with the following order: ‘In terms of section 21(2) of the Equality Act, it is declared that subject to the proviso in section 12 of the Equality Act, any gratuitous public display of the Old Flag constitutes: 80 Biowatch Trust v Registrar, Genetic Resources and Others [2009] ZACC 14; 2009 (6) SA 32 (CC); 2009 (10) BCLR 1014 (CC). (a) hate speech in terms of section 10(1) of the Equality Act; (b) unfair discrimination on the basis of race in terms of section 7 of the Equality Act; (c) harassment in terms of section 11 of the Equality Act.’ Save as aforesaid, the appeal is dismissed. There is no order as to costs of the appeal. __________________ A SCHIPPERS JUDGE OF APPEAL Appearances: For appellant: M Oppenheimer Instructed by: Hurter Spies Inc, Centurion Rossouw & Conradie Inc, Bloemfontein For first respondent: T Ngcukaitobi SC (with B Winks and J Chanza) Instructed by: Rupert Candy Attorneys, Sandton Mphafi Khang Inc, Bloemfontein For second and third respondent: S Kazee Instructed by: The State Attorney, Johannesburg The State Attorney, Bloemfontein For fourth respondent: W Trengrove SC (with J L Griffiths) Instructed by: Webber Wentzel Attorneys, Johannesburg Symington De Kok, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 21 April 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgment of the Supreme Court of Appeal Afriforum NPC v Nelson Mandela Foundation Trust and Others (Case no 371/2020) [2023] ZASCA 58 (21 April 2023) Today the Supreme Court of Appeal (SCA) dismissed an appeal by Afriforum NPC (Afriforum), against an order by the Equality Court, Gauteng Division of the High Court, Johannesburg, sitting as an Equality Court (the high court). The main issue in the appeal was whether the high court was correct in holding that the display of the old South African flag (the old flag) is harmful, incites harm, and promotes and propagates hatred within the meaning of s 10(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act). Afriforum played a leading role in nationwide demonstrations to protest against the murder of farmers, held on Monday, 30 October 2017. They were called ‘the Black Monday protests’. It was widely reported in the mainstream and social media that at some of these protests, the old flag was displayed. These incidents led to a complaint against Afriforum lodged by the Nelson Mandela Foundation Trust (NMF) with the high court, that the public displays of the old flag at the Black Monday protests was a contravention of the Equality Act. The Minister of Justice and Constitutional Development and the Department of Justice and Correctional Services were joined as parties in the proceedings in the high court by the South African Human Rights Commission (SAHRC). The SAHRC applied for an order declaring that s 10(1) of the Equality Act was unconstitutional and invalid, to the extent that it restricted the conduct proscribed by s 10(1) to ‘words’ only. The high court did not issue the declaratory order sought by the SAHRC. The court interpreted s 10(1) broadly and purposively in the light of the objects of the Equality Act, namely that the prohibition of hate speech includes any expression of ideas, whether by words or conduct. The high court issued a declaratory order that the display of the old flag at the Black Monday protests constituted hate speech, unfair discrimination and harassment, within the meaning of ss 10(1), 7 and 11 of the Equality Act. Afriforum challenged the high court’s order, mainly on the following grounds. The court did not have the power to grant the relief sought. The matter was not ripe for hearing. Public displays of the old flag are protected under the rights to freedom of expression, dignity and freedom of assembly; and do not constitute hate speech, unfair discrimination or harassment as envisaged in the Equality Act. Private displays of the flag are protected by the right to privacy. The SCA held that the constitutional rights to dignity and freedom of assembly of persons who gratuitously display the old flag, were not implicated at all. It dismissed Afriforum’s procedural defences that the Equality Court had no power to grant the declaratory order that it did, and that the matter was not ripe for hearing, for the following reasons. The Equality Court was obliged, under s 21(1) of the Equality Act, to determine whether the NMF’s complaint that the displays of the old flag at the Black Monday protests, constituted hate speech, unfair discrimination or harassment. Having decided that it was, the Equality Court was empowered to issue the declaratory order in terms of s 21(2) of the Equality Act. The issue before the Equality Court was not hypothetical as there was a public controversy about the lawfulness of public displays of the old flag. The SCA held that when the prohibition of hate speech in s 10(1) is read with the proviso in s 12 of the Equality Act (as amended by the Constitutional Court in Qwelane v South African Human Rights Commission and Another [2021] ZACC 22; 2021 (6) SA 579 (CC)), it proscribes expression: (a) that constitutes publication, propagation or communication of words; (b) based on one or more of the prohibited grounds against any person; (c) that could reasonably be construed to demonstrate a clear intention to be harmful or to incite harm, and to promote or propagate hatred; and (d) provided that bona fide engagement in artistic creativity, academic and scientific enquiry, fair and accurate reporting in the public interest or publication of any information, is excluded. The SCA held that the publication, propagation, or communication of words in s 10(1) includes the expression of ideas by conduct. The gratuitous public display of the old flag was on a prohibited ground, namely race. The old flag symbolises, clearly and painfully, apartheid and white supremacy. Objectively, the displays of the old flag could reasonably be construed as demonstrating a clear intention to be harmful and to incite harm. Those who publicly hold up or wave the old flag, convey a brazen, destructive message that they celebrate and long for the racisms of our past, in which only white people were treated as first-class citizens while black people were then degraded and demeaned. This results in deep emotional and psychological harm that severely undermines the dignity of black people. It also incites harm because it can ignite exclusion, hostility, discrimination and violence against them. The SCA found that any gratuitous public display of the old flag satisfies the requirement of promoting and propagating hatred as envisaged in s 10(1) of the Equality Act. It is extremely degrading and dehumanising to those who suffered under apartheid. It exposes them the racial bigotry, detestation and vilification, and inspires hatred and extreme ill-will against them. White supremacists around the world have used the old flag as a symbol of hatred, oppression and racial superiority. In this regard, the SCA referred to the case of the convicted murderer, Mr Dylann Roof (Roof), who was convicted of ‘nine counts of racially motivated hate crimes resulting in death’. He murdered nine black people gathered for a bible study in Charleston, South Carolina in the United States. Roof posted a photo on the internet showing him wearing a black jacket with a patch of the old flag conspicuously affixed to the front of it. The SCA dismissed Afriforum’s claim that the high court’s order constitutes a ‘wide reaching ban’ on the display of the old flag and an unconstitutional infringement of the right to freedom of expression. The high court did not impose a wholesale ban on displays of the old flag. Its public display for genuine artistic, academic or journalistic expression in the public interest, is not prohibited. The SCA concluded that the gratuitous public display of the old flag also constitutes unfair discrimination as envisaged in s 7 of the Equality Act on the grounds of race. Afriforum did not challenge the evidence that the public displays of the old flag at the Black Monday protests were actual, and not merely prima facie proof of racial discrimination. The gratuitous public displays of the old flag also constitute harassment within the meaning of s 11 of the Equality Act, because it seriously demeans, humiliates and creates a hostile and intimidating environment for the victims of apartheid. The SCA found that the high court erred in issuing a declaratory order prohibiting ‘any’ display of the old flag, which would include a display within the privacy of a home. The NMF failed to state a claim on which such relief could be granted. Its case was squarely founded on public displays of the old flag at the Black Monday protests. Further, the issue as to whether private displays of the old flag would contravene the Equality Act, was not properly and fully argued; neither in the high court nor in the SCA. It was therefore imprudent and inappropriate for the SCA to pronounce upon it. Consequently, the SCA set aside the high court’s order prohibiting ‘any’ display of the old flag and replaced it with an order prohibiting ‘gratuitous public displays’ of the old flag, subject to the proviso in s 12 of the Equality Act. The SCA made no order as to costs. ~~~~ends~~~~

468

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 403/2015 In the matter between: THE CITY OF JOHANNESBURG APPELLANT and DLADLA, ELLEN NOMSA FIRST RESPONDENT & 33 OTHER RESPONDENTS SECOND TO 34TH RESPONDENTS Neutral citation: City of Johannesburg v Dladla (403/15) [2016] ZASCA 66 (18 May 2016) Coram: Mpati P and Leach, Pillay, Willis and Mbha JJA Heard: 3 May 2016 Delivered: 18 May 2016 Summary: Local authority – powers and duties when providing temporary accommodation – rules of a shelter providing temporary accommodation in an emergency are not unconstitutional – appeal upheld. ORDER On appeal from: Gauteng Local Division of the High Court, Johannesburg (Wepener J sitting as the court of first instance): reported sub nom Dladla & others v City of Johannesburg Metropolitan Municipality & another [2014] 4 All SA 51 (GJ). 1 The appeal is upheld. 2 The order of the court a quo is set aside and replaced with the following: „The application is dismissed.‟ JUDGMENT ___________________________________________________________________ Willis JA (Mpati P and Leach, Pillay and Mbha JJA concurring): [1] This appeal is against the following order made by the Gauteng Local Division, Johannesburg (Wepener J): „1. Rules 3 and 4 of the “Ekuthuleni Overnight/Decant Shelter House Rules” are an unjustifiable infringement of the applicants‟ [respondents in present appeal] constitutional rights to dignity, freedom and security of person as well as privacy enshrined in ss 10,12 and 14 of the Constitution. 2. The respondents [appellant and Metropolitan Evangelical Services] are interdicted and restrained from enforcing rules 3 and 4 of the “Ekuthuleni Overnight/Decant Shelter House Rules” as against the applicants for the duration of the applicants‟ stay at Ekuthuleni. 3. The respondents‟ refusal to permit the applicants to reside in communal rooms together with their spouses or permanent life partners is an infringement of the applicants‟ constitutional rights to dignity and privacy enshrined in ss 10 and 14 of the Constitution. 4. The Respondents are directed forthwith to permit those of the applicants who wish to do so, to reside together with their spouses or permanent life partners in communal rooms at Ekuthuleni for the duration of the applicants‟ stay at Ekuthuleni. 5. The City is ordered to pay the costs of the application, such costs to include the costs of two counsel. The City is further ordered to pay the costs of the amicus curiae in relation to its application to be admitted as amicus curiae.‟ The appellant, the City of Johannesburg (the City), brought the appeal with the leave of this court. [2] The respondents in this appeal (the occupiers) are residents at Ekuthuleni Shelter („the Shelter‟ also referred to simply as „Ekuthuleni‟), at the corner of De Villiers and Nugget Streets, Johannesburg. The second respondent in the application before the court a quo was the Metropolitan Evangelical Services (MES), a company incorporated not for profit in terms of s 21 of the Companies Act 71 of 2008. It is a community based, Christian organisation that operated the Shelter. [3] The occupiers had been evicted from a dilapidated building in Saratoga Avenue, Berea, Johannesburg (Saratoga) in terms of an order granted by the same court that heard the matter that is now on appeal before us. That order was upheld in this court1 and the Constitutional Court.2 The case is well known as „Blue Moonlight‟. In the Constitutional Court judgment, it was directed that the occupiers were to vacate their homes by 15 April 2012, but the court stipulated that the City was to provide the evictees with „temporary accommodation in a location as near as feasibly possible to the area‟ in which Saratoga was situated, on or before 1 April 2012. For reasons that will appear more fully later, it needs to be emphasised that the order of the Constitutional Court was that the occupiers be provided with temporary accommodation and not that the City provide them with housing that was permanent in nature. Van der Westhuizen J, delivering the unanimous judgment of the court, said so in the following terms: „It must be emphasised that this case concerns temporary as defined in Ch 12 and not permanent housing.‟3 1 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd & another [2011] ZASCA 47; 2011 (4) SA 337 (SCA) (Blue Moonlight SCA judgment). 2 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd [2011] ZACC 33; 2012 (2) SA 104 (CC) (Blue Moonlight CC judgment). 3 Para 98. The reference to „Ch 12‟ is to the National Housing Code (National housing programme: housing assistance in emergency circumstances (April 2004 Final Version)). [4] At the time that the application was launched, there were 33 occupiers. At the time when the application was heard this number had approximately halved. It is common cause that there are now only 11 occupiers. In addition, there is one child occupying the premises. The accommodation at MES can host approximately 100 persons. By reason of the order of the court a quo, MES cannot operate effectively with some of its residents being bound by its rules and others not. Accordingly, some 89 beds that could be used by other persons are not in use. [5] The City engaged the services of MES to provide the kind of temporary accommodation in question, even though the accommodation had not been made available by 12 April 2012. Running like a golden thread in the City‟s papers is that it had recourse to the facilities of MES because it was doing the best it could with the resources available to it. The occupiers had brought an urgent application for an extension of their eviction until the accommodation had been provided. Satchwell J gave the occupiers an extension of time to 2 May 2012. Her order, which has been referred to by the parties as „the interim order‟, relaxed the application of the impugned rules. [6] In the meantime, some of those who had been evicted had negotiated with the City that they could stay at a building at the corner of Hancock and Claim Street in Johannesburg, paying a rental of R600 per month per unit. The remainder were told that they could stay at the Shelter. The City insisted that the occupiers could stay at the Shelter only if each one of them was to sign a document styled „Client‟s Responsibilities and Standards‟. This document incorporated „house rules‟ and a disciplinary code. It was in this way that the Shelter came to be used in order to provide temporary accommodation for a number of the persons who had been evicted from Saratoga. [7] The house rules of the Shelter included the regulation of food being prepared and consumed in a dining room area, provisions that the use of electrical appliances such as stoves, heaters, television sets and radios in bedrooms were prohibited, that violence, abusive language and unruly behaviour were not allowed, that drugs, alcohol and dangerous weapons were not permitted and that those who entered the premises under the influence of drugs or alcohol could be required to vacate until they returned sober. Each of the occupiers in writing agreed to be bound by these rules but „reserved‟ his or her rights. Other than rules 3 and 4 of the house rules, the occupiers have no objection thereto. [8] Rules 3 and 4, which were the subject of the court a quo‟s order, provided for the closure of entry to the Shelter by 20h00 every night and that all residents sign a register every night (rule 3); and that all residents vacate the Shelter by 8h00 on Mondays to Fridays, and at 9h00 on Saturdays and Sundays (rule 4). The rules provided that the management of the Shelter could, in their discretion, exempt individual residents from the application of these rules. The answering affidavit indicates that exemptions have been allowed with a considerable measure of liberality. The primary purpose of the rules was not merely to ensure the safety and protection of the occupiers but also to encourage residents to get out into the world, to familiarise themselves with it and, so it is intended, find gainful employment, even if only in the informal sector. The costs of allowing permanent access to and egress from the Shelter would increase its running costs substantially, by reason of the increased costs in staff, supervision and wear and tear. These rules were challenged by the occupiers as being unconstitutional. The court a quo found that this was indeed so. [9] The City has been laudatory about the effectiveness of the Shelter provided by MES. The City does not, however, hold it out as a model to be used whenever temporary accommodation is to be made available in an emergency. On the contrary, it contends that the facilities would be better used for the purposes and the persons for whom it had been designed. Moreover, as a result of the interim order, the MES, with the City‟s concurrence, decided that no persons additional to the occupiers would be accommodated at the Shelter, until all the occupiers had left. [10] The design of the Shelter consists of 30 small dormitories, consisting of two to four bunks per dormitory. The dormitories were gender differentiated. The gender differentiation arises from the fact that each dormitory sleeps more than two persons. The unarticulated but self-evident premise of this gender differentiation is that it is required according to widely prevailing norms of modesty and decency in society. The policy of gender differentiation has the consequence that the occupiers do not share the same room with their spouses or life partners. This separation of the occupiers from their spouses or life partners was also subject to constitutional challenge. Here again, the court a quo found in favour of the occupiers. [11] There has, in fact, been only one married couple among the occupiers. They were married in terms of customary law. They were allocated a room designed for occupation by four people. The wife had left to go to Limpopo in December 2012, to take up temporary employment. These two persons have been residents, as a married couple, at the Shelter since that time. The question of married couples among the occupiers would seem to be of „academic‟ relevance only. Ms De Vos, who appeared for the occupiers said that she wished to defend the order of the high court because of its future relevance, because, so she submitted, the City intended to apply this same policy to persons who may be given temporary accommodation in similar circumstances in future. This is not the case, as mentioned previously. [12] The only child among the occupiers stays with her mother in a female dormitory. There are gender differentiated ablution facilities, having hot and cold water. The Shelter has a communal kitchen with cooking and dining facilities, as well as provision for storage facilities, enabling each occupier to store food. In addition, there is a communal study area, courtyard and television room. MES employs a cleaning crew that cleans the Shelter daily. The Shelter has a fulltime manager. The occupiers are protected by security guards. Access to and egress from the Shelter is controlled via a biometric system to ensure that only registered residents gain access thereto. [13] MES also provides the residents of the Shelter with a free hot lunch every day as well as a resource and training facility with computers providing access to the internet. Local newspapers are also made available for free. Access is given to primary health care as well as the opportunity for recreation. The Shelter is known as a „managed care model‟. It is intended to provide short-term, often overnight, accommodation for the destitute. It aims to be a „holistic model‟ addressing the physical, emotional, mental and spiritual needs of the destitute, helping to provide them with skills and opportunities to change their lives for the better. [14] The affidavits of both the City and MES make it clear that the Shelter was not designed for the requirements demanded by the occupiers. Nevertheless, the City has succeeded in providing them with temporary accommodation – a „roof over their heads‟. The court a quo also correctly observed that the Shelter was neither designed for, nor intended to provide temporary accommodation for persons in the position of the occupiers. Indeed this was common cause. The accommodation provided at the Shelter is of a higher standard than that at Saratoga. All of this is also all provided free of charge. [15] The court a quo also correctly noted that: „What is not in dispute is that the need for temporary accommodation far outweighs the City‟s ability to provide it.‟ It is also clear that the City turned to MES in desperation. The statistics filed of record show that every year thousands of people stream into our cities, and especially Johannesburg, in search of a better life. This is a worldwide phenomenon. It is easily understandable: the pull of the cities gathers momentum from the poverty and drudgery of the rural areas. The conundrum is that accommodation that is consistent with human dignity is not readily available. In the short term, given the demands upon the State in other fields such as education, policing and health, the wherewithal to solve the problem of housing is not to hand. This is a difficulty with which all developing countries are faced. Relative to thousands of others, the position of the occupiers is a privileged one. The occupiers did not bring an application that the City provides them with alternative temporary occupation. [16] There can be no doubt that, ordinarily, all persons in South Africa have a constitutional right to freedom of movement.4 Likewise, falling at least under the constitutional rights to dignity, freedom, privacy, association and residence,5 husbands and wives and permanent life partners have a constitutional right to live together. This was recognised even under the dark days of apartheid under the landmark case of Komani NO v Bantu Affairs Administration Board, Peninsula Area.6 There can be no debate about this. Like the court a quo, I am acutely mindful of what 4 See s 12 of the Constitution of the Republic of South Africa, 1996. 5 See ss 10, 12, 14, 18 and 21 of the Constitution. 6 Komani NO v Bantu Affairs Administration Board, Peninsula Area 1980 (4) SA 448 (A) at 473D. the Constitutional Court said in Bernstein & others v Bester & others NNO7 about the fact that a „very high level of protection is given to the individual‟s intimate personal sphere of life‟.8 Nevertheless, it is important to note the qualification in Bernstein that: „But this intimate core is narrowly construed. This inviolable core is left behind once an individual enters into relationships with persons outside this closest intimate sphere; the individual‟s activities then acquire a social dimension and the right of privacy in this context becomes subject to limitation.‟9 (Footnote omitted.) Temporary accommodation provided to cover an emergency situation will often, necessarily, entail a „social dimension‟ of which the law must take cognisance. [17] I am also keenly mindful of the Constitutional Court‟s injunction in Dawood & another v Minister of Home Affairs & others; Shalabi & another v Minister of Home Affairs & others; Thomas & another v Minister of Home Affairs & others,10 that a central aspect of marriage is cohabitation and any significant impairment thereof would be a limitation of the right to dignity.11 [18] Constitutional rights may, however, be limited.12 As Kriegler J pointed out when delivering the majority judgment of the Constitutional Court in Coetzee v Government of the Republic of South Africa; Matiso & others v Commanding Officer Port Elizabeth Prison & others,13 no right enshrined in the Bill of Rights is absolute.14 There may be circumstances where the limitation of a right, even one of fundamental importance, may be justified.15 Kriegler J went on to say: „In making the determination [whether the limitation of the right is justified], especially in regard to a right as fundamental as the one in question, namely personal freedom, one really 7 Bernstein & others v Bester & others NNO [1996] ZACC 2; 1996 (2) SA 751 (CC). 8 Paragraph 77. 9 Ibid. 10 Dawood & another v Minister of Home Affairs & others; Shalabi & another v Minister of Home Affairs & others; Thomas & another v Minister of Home Affairs & others [2000] ZACC 8; 2000 (3) SA 936 (CC). 11 Paragraph 37. 12 See s 36 of the Constitution. 13 Coetzee v Government of the Republic of South Africa; Matiso & others v Commanding Officer Port Elizabeth Prison & others [1995] ZACC 7; 1995 (4) SA 631 (CC). 14 Paragraph 11. 15 Ibid. need not go beyond the test of reasonableness‟.16 Reasonableness depends on the facts of each particular case.17 [19] The occupiers have described the Shelter as their home. The City has responded that this is dialectically false: to portray temporary emergency accommodation as a home is a contradiction in terms. Indeed, the thrust of the City‟s argument was that the occupiers incorrectly claimed to have the same rights as if they were living in their homes rather than in emergency temporary accommodation. The City contends that this distinction was recognised by the Constitutional Court in Blue Moonlight.18 It was in failing properly to distinguish between emergency and ordinarily prevailing situations that, in the argument of the City, the court a quo had been clearly wrong. [20] We were referred to the judgment of Binns-Ward J in City of Cape Town v Hoosain NO & others,19 in which he said: „Once it is recognised that emergency accommodation by its very nature will invariably fall short of the standards reasonably expected of permanent housing accommodation, it follows that those who need to occupy such accommodation must accept less than what would ordinarily be acceptable. The apparent harshness of an acceptance of this recognition has to be seen against the realities imposed by the vast scale of the housing backlogs which the State, in general, and the City, in particular, are having to engage.‟ 20 I agree. [21] I fail to see the relevance of the occupiers‟ reliance on Teddy Bear Clinic for Abused Children & another v Minister of Justice and Constitutional Development & another.21 I do not see how the dignity and privacy of the single child who may be affected by an order of court are in any material way diminished by the rules of MES. 16 Ibid. 17 See, for example, Kruger v Coetzee 1966 (2) SA 428 (A) at 430E-G; Za v Smith & another [2015] ZASCA 75; 2015 (4) SA 574 (SCA) para 24. 18 Blue Moonlight CC judgment para 98. 19 City of Cape Town v Hoosain NO & others unreported WCHC case number 1033/2011, delivered on 24 October 2012; [2012] ZAWCHC 180. 20 Paragraph 14. 21 Teddy Bear Clinic for Abused Children & another v Minister of Justice and Constitutional Development & another [2013] ZACC 35; 2014 (2) SA 168 (CC). [22] The thrust of the argument by the amicus was that housing must have special regard to the needs of the vulnerable and, in particular, women and children. In this connection, we were referred to South African, foreign and international law. About this aspect of policy there can be no confusion: South African law in this field is, by now, trite. It is abreast of the best in the world and, in the submission of Mr Loxton, who appeared for the City, goes further to protect the socially disadvantaged than any other country. The evaluation of any municipal, regional or national government‟s housing policy – whether by an electorate, the courts, or experts in areas as diverse as urban and regional planning, social work, economics, architecture and building, construction and engineering – will have regard to a multiplicity of factors, including, but not limited to, safety, protection from the elements, access to utilities such as electricity and clean water, refuse collection, public transport, schools, clinics, parks and other centres of sport and recreation, regulation, aesthetics, inter-digitation and general spatial design. An evaluation of broad, long-term political policy takes place on a different footing from a judgment dealing with the facts in a temporary situation created by an emergency. With this proposition, counsel for both the amicus and the City agreed. It is self-evidently correct. The best must not become the enemy of the good. [23] The rules relating to entry to and egress from the Shelter are not dissimilar from those at other institutional buildings. They were designed, inter alia, to ensure the safety and protection of the occupiers. They are also intended to discourage an attitude of dependence. There are cost factors too. These rules cannot, in all the circumstances, be said to be unreasonable. As for the sleeping arrangements, without displacing other persons at the Shelter, MES cannot both accommodate all the potential occupiers and allow men and women to sleep in the same dormitory without offending many people‟s sense of decency, modesty and decorum. The limitation on husbands and wives and permanent life partners sleeping together in the strictly temporary emergency accommodation provided was, in the single relevant instance, relaxed. In any event, husbands and wives and permanent life partners do not have the right, always and everywhere, to sleep together. There are instances in which this right must yield, albeit temporarily, to broader practical demands such as those related to the reason for which the Shelter was designed. In context, the provision of temporary accommodation separated on the basis of gender, is not unreasonable and therefore not unconstitutional. [24] The proper remedy for the occupiers was not to have applied for the striking down of the rules of a bona fide institution such as MES but to have applied for an order that the accommodation provided by the City, through the agency of MES, was not that which had been ordered by the Constitutional Court. In other words, the occupiers who wished to sleep with their spouse in temporary accommodation intended to cater for an emergency, should have applied for an order that they be given alternative accommodation, where they could exercise these rights. They may or may not have been successful but the rules of MES in the Shelter offered by the City, in an attempt to accommodate the occupiers in an emergency situation are not, in themselves, unreasonable. The appeal must succeed. Appropriately, the City did not seek an award of costs in the event that it was successful. [25] The following order is made: 1 The appeal is upheld. 2 The order of the court a quo is set aside and replaced with the following: „The application is dismissed.‟ ______________________ N P WILLIS Judge of Appeal APPEARANCES: For Appellant: C D A Loxton SC (with him A W Pullinger) Instructed by: Moodie & Roberston, Johannesburg Lovius Block, Bloemfontein For First to 33 Respondents: A M De Vos SC (with her S Wilson and M Stubbs) Instructed by: Socio-Economic Rights Institute, Johannesburg Webbers, Bloemfontein For Amicus Curiae: E Webber (Heads of argument prepared by J Brickhill, with him, J Bleazard) Instructed by: Centre for Applied Legal Studies, Johannesburg Webbers, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 18 May 2016 STATUS Immediate City of Johannesburg v Dladla & others (403/15) [2016] ZASCA 66 (18 May 2016) Please note that the media summary is for the benefit of the media and does not form part of the judgment. This morning the Supreme Court of Appeal (SCA) upheld an appeal against an order in the South Gauteng High Court, Johannesburg and replaced that order with one dismissing the application with costs. The high court had set aside certain rules of an urban shelter as being constitutionally invalid. The respondents in the appeal are residents at the Ekuthuleni Shelter. Metropolitan Evangelical Services (MES), a company incorporated not for profit in terms of s 21 of the Companies Act 71 of 2008 operated the Shelter. It is a community based, Christian organisation. The occupiers had been evicted from a dilapidated building in Saratoga Avenue, Berea, Johannesburg. The Constitutional Court, in a case well known as ‘Blue Moonlight’, stipulated that the City was to provide the evictees with ‘temporary accommodation in a location as near as feasibly possible to the area’ in which Saratoga was situated. The City engaged the services of MES to provide the kind of temporary accommodation in question. The house rules of the Shelter included the regulation of food being prepared and consumed in a dining room area, provisions that the use of electrical appliances such as stoves, heaters, television sets and radios in bedrooms were prohibited, that violence, abusive language and unruly behaviour were not allowed, that drugs, alcohol and dangerous weapons were not permitted and that those who entered the premises under the influence of drugs or alcohol could be required to vacate until they returned sober. Each of the occupiers in writing agreed to be bound by these rules but ‘reserved’ his or her rights. The primary purpose of the rules was not merely to ensure the safety and protection of the occupiers but also to encourage residents to get out into the world, to familiarise themselves with it and, so it is intended, find gainful employment, even if only in the informal sector. The costs of allowing permanent access to and egress from the Shelter would increase its running costs substantially, by reason of the increased costs in staff, supervision and wear and tear. These rules were challenged by the occupiers as being unconstitutional. The court a quo found that this was indeed so. The design of the Shelter consists of 30 small dormitories, consisting of two to four bunks per dormitory. The dormitories were gender differentiated. The gender differentiation arises from the fact that each dormitory sleeps more than two persons. The unarticulated but self-evident premise of this gender differentiation is that it is required according to widely prevailing norms of modesty and decency in society. The policy of gender differentiation has the consequence that the occupiers do not share the same room with their spouses or life partners. This separation of the occupiers from their spouses or life partners was also subject to constitutional challenge. Here again, the court a quo found in favour of the occupiers. The SCA affirmed that husbands and wives and permanent life partners have a constitutional right to live together. The SCA found that husbands and wives and permanent life partners do not have the right, always and everywhere, to sleep together. There are instances in which this right must yield, albeit temporarily, to broader practical demands such as those related to the reason for which the Shelter was designed. In context, the provision of temporary accommodation separated on the basis of gender, is not unreasonable and therefore not unconstitutional. The SCA found that the rules of MES in the Shelter offered by the City, in an attempt to accommodate the occupiers in an emergency situation are not, in themselves, unreasonable and that the appeal must succeed.

33

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 1027/2016 In the matter between: UNIVERSITY OF THE FREE STATE APPELLANT and AFRIFORUM FIRST RESPONDENT SOLIDARITY SECOND RESPONDENT Neutral citation: University of the Free State v Afriforum (1027/2016) [2017] ZASCA 32 (28 March 2017) Coram: Cachalia, Swain and Mathopo JJA and Fourie and Schippers AJJA Heard: 17 February 2017 Delivered: 28 March 2017 Summary: Review : whether decision of University to adopt language policy administrative action under Promotion of Administrative Justice Act 3 of 2000 : whether University misconstrued its power under principle of legality : test for legality review restated : whether language policy „reasonably practicable‟ as contemplated in s 29(2) of the Constitution : whether in the exercise of its power to decide language policy University constrained by requirement that policy „subject to‟ Higher Education Language Policy in terms of s 27(2) of the Higher Education Act 101 of 1997. ___________________________________________________________________ ORDER On appeal from: Free State Division of the High Court, Bloemfontein (Hendricks and Mokgohloa JJ and Motimele AJ sitting as court of first instance): 1 The appeal in the review application is upheld with costs including the costs of two counsel, save that in the case of the first respondent, each party shall pay its own costs. 2 The appeal in the strike-out application is upheld with costs including the costs of two counsel, on a scale as between attorney and client. As a consequence the following parts of the respondents‟ papers are struck out: (a) para 3.2 of the founding affidavit: „that were too scared to divulge their identity for fear of intimidation and reprisal‟; (b) para 10 of the founding affidavit: „they informed Messrs Human and Kruger that they are absolutely fearful that their positions may be jeopardised should their identities be disclosed, but were prepared to do so in view of the constitutional principle of transparency and since the UFS will in any event in good time have to make disclosure of these very documents‟; (c) para 101.14 of the founding affidavit: „Nothing could be further from the truth than this misleading statement of the second respondent to the UFS Senate, the one body which has to make a decision on something as serious and contentious as the possible validity of a new language policy which was in the process of formulation‟; (d) para 125.1.4 of the founding affidavit (excluding the first three sentences): „On the basis of the assurance given by a member attending that meeting to Mr Human, I sincerely believe that it is true that Prof Jansen dismissed the letter as being irrelevant as coming from a third party . . . the new language policy‟; (e) para 154 of the founding affidavit: „because the persons who provided them were too scared to reveal their identities and‟; (f) para 20.5.3 of the supplementary founding affidavit: „it nonetheless amounts to a serious misrepresentation vitiating the legality of any decision taken on that basis‟; and (g) para 41 of the supplementary founding affidavit: „led to believe‟ and „the assertions were misleading‟. 3 The order granted by the Free State Division of the High Court, Bloemfontein (under case no. A70/2016) is set aside and substituted by the following order: (a) „The applicants‟ application to review and set aside the decision by the Council of the University of the Free State to adopt a new language policy is dismissed with costs including the costs of two counsel, save that in the case of the first applicant, each party shall pay its own costs. (b) The respondents‟ application to strike out is upheld with costs including the costs of two counsel on a scale as between attorney and client. As a consequence the parts identified in the applicants‟ papers at paras 2 (a) to (g) of the order of this court are set aside.‟ ___________________________________________________________________ JUDGMENT Cachalia JA (Swain and Mathopo JJA and Fourie and Schippers AJJA concurring) [1] The legal dispute in this case concerns a decision by the University of the Free State (UFS) to adopt a new language policy in March 2016. The new policy replaces Afrikaans and English as parallel mediums of instruction with English as the primary medium. A full court of the Free State Division of the High Court, Bloemfontein, reviewed and set aside the decision in July 2016 on the ground that it constituted unlawful administrative action as defined in s 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). This appeal is with its leave. [2] The respondents, Afriforum and Solidarity, were the successful applicants in the full court. I shall consider their standing to seek relief in these proceedings later in the judgment. However, I accept their legitimate concern that the new language policy, which prefers English over Afrikaans at UFS, and the adoption of similar policies at other universities, will erode the position of Afrikaans as a language of instruction and its constitutionally protected status as an official language.1 Their disquiet should be shared by all South Africans who value our diverse cultural and language heritage. Because Afrikaans is, as Sachs J colourfully observed in the Gauteng School Education Bill case: „one of the cultural treasures of South African national life, widely spoken and deeply implanted, the vehicle of outstanding literature, the bearer of rich scientific and legal vocabulary and possibly the most creole or “rainbow” of all South African tongues‟.2 [3] UFS has a 113-year history. It may come as a surprise to some that from 1904, English was the sole medium of instruction. This changed to Afrikaans in 1953. In 1993 a parallel-medium policy was introduced. [4] In November 2002 the Education Ministry outlined a framework for a Higher Education Language Policy (LPHE), which encouraged the promotion of multilingualism. It advocated „the retention and strengthening of Afrikaans as a language instruction‟, in historically Afrikaans universities. But it also acknowledged that this will practically create a tension with other constitutional imperatives, particularly considerations of equity, the need to redress past racially discriminatory laws and practices and practicability, identified in s 29(2) of the Constitution. In this 1 Section 6(1) of the Constitution says: „The official languages of the Republic are Sepedi, Sesotho, Setswana, siSwati, Tshivenda, Xitsonga, Afrikaans, English, isiNdebele, isiXhosa and isiZulu.‟ 2 Ex Parte Gauteng Provincial Legislature: In re Dispute concerning the constitutionality of certain provisions of the Gauteng School Education Bill 1995 1996 (3) SA 165 (CC) para 49. regard the LPHE cautioned that the sustained development of Afrikaans should not have the „unintended consequence of concentrating Afrikaans-speaking students in some institutions‟ thereby retarding attempts to promote diversity. In addition historically Afrikaans-medium institutions had to submit plans to show that language instruction was not impeding access by non-Afrikaans speaking students to their academic programmes. One of respondents‟ contentions is that UFS ignored this policy in formulating the new language policy, an issue I shall consider later. [5] Following the publication of the LPHE, UFS approved a language policy in June 2003. The 2003 policy acknowledged that English and Afrikaans shall be the dominant languages of instruction for the foreseeable future, and also that multilingualism shall be promoted so that other South African languages, particularly Sesotho, are ultimately accepted as mediums of instruction. [6] The 2003 policy had an inauspicious beginning. In its second year of operation already, Professor Fourie, who was rector at the time, acknowledged the „unintended consequence‟ of the parallel-medium policy segregating the lecturing rooms along racial lines. This problem persisted and was repeatedly mentioned in various reports, including one by the Language Policy Committee of Council, in the years that followed. It also generated racial tensions and complaints from both staff and students. [7] Professor Lange, the Vice-Rector (Academic), deposed to the answering affidavit in the present proceedings. She described the persistence of the problem as „untenable on a post-apartheid campus‟. The UFS‟s Management accordingly sought and obtained a mandate from its Council to formulate a new language policy in June 2015. The task was to be undertaken by the Language Committee (the Committee), which the minutes of the Council meeting record as having to be „balanced and representative‟. Furthermore, the Committee had to ensure that an „open process of consultation would be followed, with no preconceived agenda regarding the desired outcome‟. [8] There is no dispute that the Committee executed its mandate diligently. The process undertaken is recorded fully in the papers. It spanned several months and involved thorough investigation, vigorous debate and full deliberation. Linguistic experts assisted the process. [9] The draft report was considered by both UFS‟s Senate and Council and the final report, including faculty submissions, served before Council. The final report, the respondents accept freely in their written argument, embodies a qualitative analysis of the arguments for and against a policy change and encapsulates every standpoint adopted in the course of the debate. The respondents participated actively throughout the process. So it is hardly surprising that they have not raised any procedural objections to the decision to adopt a new policy. [10] Council ultimately adopted the report on 11 March 2016 by twenty votes in favour, one abstention and one vote against it. The key finding in the report – that the parallel-medium policy was entrenching racial separation and impeding racial integration – is captured in the executive summary, which states: „The consensus finding of the review committee is that the current parallel medium language policy does not work. It divides students, largely by race, and therefore works against the integration commitments of the university; it does not, from the student point of view, guarantee equality of access to knowledge in the two different language class groups; it has not kept up with the dramatic changes in the racial and language demography of the university in recent years; and the continuation in Afrikaans is a declining language of preference among students who see themselves as living, learning and labouring in a global world where English competence provides more access and mobility than any other South African language.‟ [11] The finding formed the basis of six policy recommendations the Committee made to Council, which were also approved. They were: „1. That English becomes the primary medium of instruction in undergraduate education and, as largely exists already, in postgraduate education. 2. that the [UFS] embeds and enables a language-rich environment committed to multilingualism with particular attention to Afrikaans, Sesotho, isiZulu and other languages represented on the three campuses. 3. that an expanded tutorial system is available to especially first-year students in Afrikaans, Sesotho, isiZulu and other languages to facilitate the transition to English instruction. 4. that in particular professional programmes, such as Education and the Agricultural Sciences, the parallel-medium policy continues given the well-defined Afrikaans markets that still makes such language-specific graduate preparation relevant at the moment. 5. that the language of administration be English. 6. that the English-medium language policy be implemented with flexibility and understanding rather than as a rigid rule regardless of the circumstances.‟ [12] The approved policy authorised the Committee, in consultation with the faculties and the Centre for Teaching and Learning, to approve a phased implementation plan for the period 2016 to 2021 commencing in 2017. The respondents are dissatisfied with the new policy and sought to have the decision to adopt the policy reviewed and set aside. [13] On 21 July 2016 the full court delivered its judgment reviewing and setting aside the Council decision to „adopt and approve‟ the new policy. UFS then sought leave to appeal to the Constitutional Court directly, alternatively to this court, against the order. The Constitutional Court refused direct access, but as the full court had conditionally granted UFS leave to appeal to this court, its order was suspended pending the outcome of this appeal. [14] The respondents then applied to the full court for an order in terms of s 18 of the Superior Courts Act 10 of 2013 for its order of 21 July 2016 not to be suspended pending the determination of the appeal. The application was granted. Believing that the effect of this order would stymie the implementation of the new policy, UFS exercised its automatic right of appeal to this court, which then set aside the order of the full court. The judgment is reported sub nom UFS v Afriforum & another [2016] ZASCA 165 (17 November 2016); [2017] 1 All SA 79 (SCA). [15] It is now necessary to set out the nature of the relief the respondents sought in the review and the case they made out on the papers. In their founding affidavit, the respondents say their application is concerned first, with preventing UFS from implementing the new language policy, and secondly, setting it aside. Neither is correct and both misconceive the nature of the relief sought. The notice of motion pertinently seeks only to have the Council decision to adopt the new policy on 11 March 2016 set aside,3 principally on the ground that it constituted unlawful administrative action. The respondents did not seek to interdict the policy from being implemented, nor did they seek to have it set aside on administrative law or constitutional grounds. [16] The court a quo and both parties approached the matter on the basis that the impugned decision constituted „administrative action‟ as defined in s 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).4 I turn first to consider whether it is.5 3 The notice of motion seeks to have both the decisions of the Senate on 7 March 2016, and that of the Council on 11 March 2016, set aside. However, only the Council decision is in issue in this appeal. 4 In terms of s 1 of PAJA: „„administration action‟ means any decision taken, or any failure to take a decision, by- (a) an organ of state, when- (i) exercising a power in terms of the Constitution or a provincial constitution; or (ii) exercising a public power or performing a public function in terms of any legislation; or (b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect . . . .‟ 5 In Head, Department of Education, Free State Province v Welkom High School & another [2012] ZASCA 150; 2012 (6) SA 525 (SCA) para 23, this court stated that the decision by a school governing body to adopt a pregnancy policy is an administrative decision. It did not analyse the nature of the decision in making this statement. [17] The determination of whether an action by an organ of state6 is administrative action requires an analysis of its nature and a positive decision that it is of an administrative character.7 In general policy-making lies within the realm of an organisation‟s executive authority, and the implementation or application of policy, lies within its administrative domain. The more closely a decision is related to the formulation – or the adoption – of policy, the more likely it is to be executive in nature; where it is closer to the implementation of policy, this suggests it is administrative. Administrative decisions are generally and appropriately subjected to a more exacting administrative standard of review than executive decisions.8 [18] In this case, the review is aimed at attacking the decision to adopt the policy, which the Council has the authority to decide under s 27(2) of the Higher Education Act 101 of 1997 (the Act). The policy is not impugned, nor is it sought to be set aside. Importantly, the policy itself does not adversely affect the rights of any person or have the capacity to do so. Neither does it have a direct, external legal effect. The policy will only have these legal consequences when implemented, which the review is not concerned with. So, properly understood, it is the UFS‟s executive decision to determine its language policy that is being attacked and not any of its administrative actions flowing from the adoption of the policy. The impugned decision therefore does not constitute administrative action as contemplated by PAJA. [19] I accept, however, that the decision to adopt the new policy may be subject to legality review on the ground that it was made in the exercise of a public power. The question to be considered in this context is whether, objectively viewed, the decision was rationally connected to the purpose for which the power was given.9 This is a factual enquiry and courts must be careful not to interfere with the exercise of a power simply because they disagree with the decision or consider that the power 6 There is no dispute that that a university is an organ of state. 7 Tshwane City & others v Nambiti Technologies (Pty) Ltd [2015] ZASCA 167; 2016 (2) SA 494 (SCA) para 25. 8 See generally Minister of Defence and Military Veterans v Motau [2014] ZACC 18; 2014 (5) SA 69 (CC) paras 37-44 and Minister of Home Affairs & others v Scalabrini Centre & others [2013] ZASCA 134; 2013 (6) SA 421 (SCA) para 57. 9 Pharmaceutical Manufacturers Association of South Africa: In re Ex Parte President of the Republic of South Africa & others 2000 (2) SA 674 (CC) paras 85-86. was exercised inappropriately.10 If, therefore, the decision-maker acts within its powers, and considers the relevant material in arriving at a decision so that there is a rational link between the power given, the material before it and the end sought to be achieved, this would meet the rationality threshold. The weight to be given to the material lies in the discretion of the decision-maker; so too does the determination of the appropriate means to be employed towards this end.11 But if a decision-maker misconstrues its power, this will offend the principle of legality and render the decision reviewable.12 [20] The complaint advanced in the respondents‟ papers was that UFS failed to take into account the requirements of s 29(2) of the Constitution and the LPHE, for which provision is made in s 27(2) of the Act. In its answering affidavit, UFS says it took both s 29(2) and the LPHE into account. There is ample evidence that it did. There is therefore no substance in this attack. The court a quo, therefore, erred in upholding this argument, albeit that it did so in the belief that it was concerned with administrative action. [21] The respondents advance a more nuanced complaint in their written submissions before this court. They now contend that in exercising its power to adopt the new policy, UFS did so without appreciating the constitutional and statutory parameters within which the power had to be exercised. The constitutional constraint, it is contended was s 29(2) of the Constitution, which affords the right to language instruction in a language of choice where this is „reasonably practicable‟. And the statutory limitation on the power was s 27(2) of the Act, which made the exercise of the power „subject to‟ the LPHE. Properly understood, the complaint on both grounds is that UFS misconstrued its powers in formulating its new language policy. 10 Pharmaceutical Manufacturers Association of South Africa para 90; Scalabrini Centre fn 8 above para 66. 11 Democratic Alliance v President of the Republic of South Africa & others [2012] ZACC 24; 2013 (1) SA 248 (CC) paras 39-40. 12 Masetlha v President of the Republic of South Africa & another 2008 (1) SA 566 (CC) para 81. [22] I deal first with the s 29(2) complaint, which lies at the heart of this appeal. Section 29 of the Constitution reads thus: „(1) Everyone has the right– (a) to a basic education, including adult basic education; and (b) to further education, which the State, through reasonable measures, must make progressively available and accessible. (2) Everyone has the right to receive education in the official language or languages of their choice in public educational institutions where that education is reasonably practicable. In order to ensure the effective access to, and implementation of, this right, the State must consider all reasonable educational alternatives, including single medium institutions, taking into account– (a) equity; (b) practicability; and (c) the need to redress the results of past racially discriminatory laws and practices.‟ [23] As I understand the respondents‟ case regarding s 29(2), it is this: In 2003 UFS adopted a dual-medium language policy. There were no resource constraints (cost, human resources and infrastructure) to continuing with the policy. Section 29(2) therefore required UFS to continue with the 2003 policy because it was „reasonably practicable‟ to do so. When the problem of the racial segregation arose, UFS was not entitled to abandon the 2003 policy only because of this problem. It had to consider all „reasonable educational alternatives‟ before departing from the 2003 policy. This assessment involved taking the listed criteria of equity, practicability and historical redress into account. A proper consideration of these criteria, would have involved balancing the relevant constitutional considerations and standards, and would not have led to the 2003 policy being abandoned solely to promote racial integration. In other words, UFS ought to have employed other means, without limiting the right of Afrikaans language speakers to their language of choice, to solve this problem. The respondents do not explain what other means were available to UFS. [24] Professor Lange‟s response on behalf of UFS is embodied in the following pithy statement in her answering affidavit, which emphasises that the „reasonably practicable‟ requirement in s 29(2) has a normative content, and is not just concerned with resource constraints: „It is inherently impossible to avoid racial division when language division is maintained and where the statistics show that one of the two language streams comprises of white and the other of black students. While this is at times described by different individuals as an "ethical" or "redress" issue, it is equally a matter of what is reasonably practicable. The fact of the matter is that the “reasonably practicable" criterion is far exceeded: it is absolutely impossible to provide language of choice without indirectly discriminating on the basis of race.‟ [Emphasis added] [25] UFS submits that the right to receive an education in a language of choice is not only a matter of practicality, but also of reasonableness. In other words the existence of the right depends on an important internal modifier: that it is reasonably practicable.13 Relying on Hoërskool Ermelo14 it contends that the assessment of whether the attainment of the right is reasonably practicable involves a „context- sensitive‟ appraisal of „all the relevant circumstances of each particular case‟. This of necessity must include constitutional norms. On this interpretation, the criteria mentioned in the second part (equity, practicability and redress), which are relevant when considering effective access to, and implementation of the right, also enter into the assessment. It is thus incorrect, UFS says, to read the first part of s 29(2) as a mere provisioning provision, which is hermetically sealed from the second part. To use the language used in Hoërskool Ermelo, the two parts are „mutually reinforcing‟.15 [26] In my view, the crux of the dispute regarding s 29(2) as to whether UFS misconstrued its powers turns on which of the two interpretations of the reasonably 13 B Fleisch and S Woolman „On the constitutionality of single medium public schools‟ (2007) SAJHR 34 at 50. Head of department, Mpumalanga Department of Education v Hoërskool Ermelo & another [2009] ZACC 40; 2010 (2) SA 415 (CC) para 52. 14 Ibid. 15 Ibid. practicable requirement – UFS‟s or the respondents‟ – is correct. Once it is accepted, as the respondents were constrained to accept, that the very existence of the right depends on a „context-sensitive‟ assessment of what is reasonably practicable, this can hardly exclude any factor that may bear on this assessment. As Kriegler J said of the reasonably practicable standard in the Gauteng School Education Bill case, it is „elastic – as it necessarily has to be in order to leave room for a wide range of circumstances‟.16 The legal standard is reasonableness, which of necessity involves a consideration of constitutional norms, including equity, redress, desegregation and non-racialism. The factual criterion is practicability, which is concerned with resource constraints and the feasibility of adopting a particular language policy. [27] It follows, in my view, that even if a language policy is practical because there are no resource constraints to its implementation, it may not be reasonable to implement because it offends constitutional norms. The policy would therefore not meet the reasonably practicable standard. I am mindful that once the standard is met and the right to a language of choice exists, the State bears a negative duty not to take it away or diminish the right without justification.17 But this does not mean that once the right exists it continues, regardless of whether the context and the circumstances have changed. A change in circumstances may materially bear on the question whether it is reasonably practicable to continue with a policy. What is required of a decision-maker, when there is a change in circumstances, is to demonstrate that it has good reason to change the policy. In other words, it must act rationally and not arbitrarily. 16 Ex Parte Gauteng Provincial Legislature: In re Dispute concerning the constitutionality of certain provisions of the Gauteng School Education Bill 1995 1996 (3) SA 165 (CC) para 41. That case concerned s 32 of the Constitution of the Republic of South Africa 200 of 1993. Section 32(b) dealt with the reasonable practicability standard. Section 32 read as follows: „Every person shall have the right- a. to basic education and to equal access to educational institutions; b. to instruction in the language of his or her choice where this is reasonably practicable; and c. to establish, where practicable, educational institutions based on a common culture, language or religion, provided that there shall be no discrimination on the ground of race.‟ 17 Hoërskool Ermelo fn 13 above para 52. [28] UFS‟s research has shown conclusively that as the demographic and language profile of its student population has changed with ever-increasing numbers of black students opting for English-medium language instruction, and correspondingly fewer numbers of white Afrikaans students seeking Afrikaans- medium instruction, racial segregation is becoming an increasing problem. The ratio of Afrikaans speaking students per lecturer and per classroom is significantly lower than is the case with non-Afrikaans-speaking students, who choose the English stream. This in turn leads to a perception that Afrikaans-speaking students are receiving closer supervision than students who choose to study through the English medium of instruction. While the problem was observed by Professor Fourie more than a decade ago, the circumstances now have led UFS to conclude that the continuation of the 2003 policy is not only not reasonably practicable, but absolutely impossible. That conclusion has the support of the overwhelming majority of the University community, including substantial numbers of Afrikaans speakers. It was arrived at after proper research, debate and deliberation. UFS‟s assessment that it is no longer reasonably practicable to continue with the 2003 is, therefore, one that a court of law should be slow to interfere with on review. [29] What is more, it is apparent from reading the policy that it was carefully calibrated. Those students, who currently use Afrikaans as a medium of instruction, shall be allowed to complete their studies using this medium. The policy will first be piloted in only three faculties for the 2017 academic year, namely medicine, law and the humanities, and only rolled out thereafter.18 An expanded tutorial system will be made available to especially first-year students in Afrikaans, Sesotho, isiZulu and other languages to facilitate the transition to English instruction. In the case of professional programmes, such as Education and the Agricultural Sciences, the parallel-medium policy shall continue because there remains a market-demand for them. Importantly, the intention is to implement the new policy with „flexibility and understanding rather than as a rigid rule regardless of the circumstances.‟ 18 UFS v Afriforum & another [2016] ZASCA 165 (17 November 2016) para 17; [2017] 1 ALL SA 79 (SCA) para 17. [30] I therefore conclude that the respondents‟ contention that UFS misconstrued its powers by failing to properly apply the „reasonably practicable‟ standard in s 29(2) must fail. UFS‟s conduct has been exemplary in the manner it approached the decision to reconsider the 2003 policy and adopt a new policy. It also gave careful consideration to the content of the new policy. It is the respondents, not UFS, who misconstrue this provision. [31] I should add that this dispute raises potentially difficult constitutional questions, including whether the new policy‟s pursuit of racial integration and equality has the effect of: unfairly discriminating against linguistic and cultural minorities; impermissibly promoting majoritarian hegemony at the expense of linguistic and cultural diversity, or undermining the fundamental language scheme of our constitutional order, which requires the State to take practical and positive measures to elevate the status and advance the use of all official languages, instead of diminishing their importance.19 [32] But such questions may only be confronted through a substantive constitutional challenge to the State‟s language policy, and not somewhat diffidently or obliquely though judicial review, as the respondents have done in this case. [33] I turn to consider the respondents‟ second complaint, that UFS‟s statutory power to adopt a language policy was constrained by the LPHE, which required the retention and strengthening of Afrikaans, as a medium of instruction. Put differently it is contended that UFS misconstrued its power by adopting a language policy that was in conflict with the LPHE. 19 Section 6(1) of the Constitution says: „The official languages of the Republic are Sepedi, Sesotho, Setswana, siSwati, Tshivenda, Xitsonga, Afrikaans, English, isiNdebele, isiXhosa and isiZulu.‟ Section 6(2) reads as follows: „Recognising the historically diminished use and status of the indigenous languages of our people, the State must take practical and positive measures to elevate the status and advance the use of these languages.‟ [34] The source of the power to decide its language policy is s 27(2) of the Act, which authorises the council of a university, with the concurrence of the senate, to determine its language policy. But it may only do so, „subject to‟ the policy determined by the Minister of Higher Education, which in this case refers to the LPHE.20 [35] Drafters usually use the words „subject to‟ – as in s 27(2) – as subordinating language to denote that if clause A is made subject to clause B, clause A is subordinate to clause B. In other words clause A may not contradict clause B. In this case the respondents‟ contend that the new policy impermissibly contradicts the LPHE‟s injunction to retain and strengthen Afrikaans as a language of instruction. [36] Before considering the ambit of the LPHE it must be borne in mind, as Harms JA pointed out, in Akani Garden Route (Pty) Ltd v Pinnacle Point Casino (Pty) Ltd,21 that the word „policy‟ is „inherently vague and may bear different meanings‟. He went on, in the context of the statute he was dealing with, to say the following: „I prefer to begin by stating the obvious, namely that laws, regulations and rules are legislative instruments, whereas policy determinations are not. As a matter of sound government, in order to bind the public, policy should normally be reflected in such instruments. Policy determinations cannot override, amend or be in conflict with laws…‟ [37] This brings me to the LPHE. I mentioned earlier that the LPHE encouraged the promotion of multilingualism, and it also advocated „the retention and strengthening of Afrikaans as a language of instruction‟ in historically Afrikaans universities. At the same time it acknowledged that this will practically create a tension with other constitutional imperatives including equity and redress. It also presciently cautioned that the sustained development of Afrikaans should not have the „unintended consequence of concentrating Afrikaans-speaking students in some 20 Section 27(2) provides: „Subject to the policy determined by the Minister, the council, with the concurrence of the senate, must determine the language policy of a public higher education institution and must publish it and make it available on request.‟ 21 Akani Garden Route (Pty) Ltd v Pinnacle Point Casino (Pty) Ltd 2001 (4) SA 501 (SCA) para 7. institutions‟ thereby retarding attempts to promote diversity. This is precisely what happened at UFS. [38] The question is whether the LPHE – in particular the sentiment that Afrikaans be retained and strengthened – was intended to be prescriptive and bind universities in the formulation of their language policies, or merely to act as a guideline from which they could depart if the circumstances warranted this? In my view there are clear indications in the LPHE and in the Act that it was not meant to be binding: first, the language used in the LPHE is noticeable for its absence of any prescriptive language; secondly, the LPHE envisaged the unintended consequence that may result from the retention and strengthening of Afrikaans as a language of instruction, which must mean that it was left to universities to decide how best to deal with this problem in their language policies, and thirdly, while s 49(A) of the Act gives the Minister of Higher Education the authority to issue directives to universities to deal with, among other things, financial impropriety, ineffectiveness in the performance of their functions and failure to comply with any law, it conspicuously omits any authority for him or her to intervene in their language policies. [39] In my view, and having regard to the language of the preamble of the Act that it is „desirable for higher education institutions to enjoy freedom and autonomy in their relationship with the State within the context of public accountability . . .‟, the words „subject to‟ in s 27(2), contextually understood, do not impose a legal obligation on any university to adopt the LPHE. The LPHE goes no further than to provide a policy guideline for the universities from which they are free to depart. The only obligation on universities that choose this course is to justify their departure. In this case UFS has done so adequately. The contention that it failed to appreciate the statutory constraint on its power in s 27(2) of the Act read together with the LPHE must therefore fail. [40] This brings me to UFS‟s application to strike out certain damaging allegations in the respondents‟ papers regarding its conduct. The court a quo dismissed the application because these allegations were „not material‟. But allegations that are immaterial and irrelevant should be struck out, especially when they advance damaging, vague and unsubstantiated allegations regarding a party‟s conduct.22 The respondents did not seek to suggest that they were true.23 And neither did they withdraw or apologise for them. The prejudice to UFS is evident. When pressed in this court the respondents‟ response was a grudging, half-hearted „apology‟: „To the extent that the allegations were damaging we apologise for them‟. This is simply not good enough. In the circumstances UFS is entitled to a striking-out order. [41] In regard to standing, it is settled that a party must establish a legal interest in the subject matter of the relief sought. UFS does not dispute Afriforum‟s standing, but I have some doubt that it has a legal interest in these proceedings. Afriforum does not purport to represent all Afrikaans speaking students, and has not shown that any of its members‟ rights are adversely affected by the new policy. It seeks, in these proceedings, to review and set aside UFS‟s executive decision to adopt a new language policy, and not the policy itself, but has not demonstrated that its legal interest extends to this relief. There is also no constitutional challenge to the policy in the public interest. However, in view of UFS‟s stance regarding Afriforum‟s standing, there is no need to decide this question. [42] Solidarity stands on a different footing. It is a trade union under the Labour Relations Act 66 of 1995. It claims standing in its own interest and on behalf of its members, but not in the public interest. However, neither Solidarity nor its members, who are employees of UFS, have any entitlement to assert the s 29(2) right to a choice of language. The rights-bearers of s 29(2) rights are students. It follows that Solidarity has no legal interest in these proceedings. 22 In terms of Uniform rule 23(2): „(2) Where any pleading contains averments which are scandalous, vexatious, or irrelevant, the opposite party may, within the period allowed for filing any subsequent pleading, apply for the striking out of the matter aforesaid, and may set such application down for hearing in terms of paragraph (f) of subrule (5) of rule 6, but the court shall not grant the same unless it is satisfied that the applicant will be prejudiced in the conduct of his claim or defence if it be not granted.‟ 23 Titty’s Bar and Bottle Store (Pty) Ltd v ABC Garage (Pty) Ltd & others 1974 (4) SA 362 (T). [43] What remains is the question of costs. Afriforum relies on what has now become known as the Biowatch principle to avoid a costs order against unsuccessful litigants who seek to vindicate constitutional rights.24 As I have mentioned, Afriforum has not challenged the constitutionality of the policy, nor shown that any of its members‟ constitutional rights are adversely affected by the new policy. However, I accept that these proceedings have, as their main purpose, to protect the constitutional rights of Afrikaans-speaking students, and that the proper interpretation of s 29(2) of the Constitution lies at the heart of this dispute. I also accept that language rights, which overlap with cultural rights, is a very emotive issue and of considerable importance to many South Africans, and not only to Afrikaans-speakers, many of whom Afriforum represent. In the circumstances of this case I would relieve Afriforum of having to pay the costs of the litigation. This excludes the costs of the striking-out application, which respondents could have avoided with a bit more circumspection. Solidarity has no standing and has no basis to avoid a costs order in its case. [44] To sum up: the respondents sought an order reviewing and setting aside the decision of UFS to adopt a single-medium English language policy. That decision was not reviewable under PAJA. And the respondents failed to make out a proper case for review under the principle of legality. UFS was entitled to adopt a new policy because it was no longer reasonably practicable to continue with the 2003 policy, which had the effect of segregating the student community along racial lines. UFS was under no legal obligation to apply the LPHE and was free to depart from it for good reason. It did so. [45] The Biowatch principle applied in the case of Afriforum as its real purpose was to vindicate the language rights of Afrikaans-speaking students, but not to Solidarity, which had no legal interest in the relief claimed. Both parties are however liable for UFS‟s costs in the striking-out application on a scale as between attorney and client. 24 Biowatch Trust v Registrar, Genetic Resources & others [2009] ZACC 14; 2009 (6) SA 232 (CC) para 21. [46] The following order is made: 1 The appeal in the review application is upheld with costs including the costs of two counsel, save that in the case of the first applicant, each party shall pay its own costs. 2 The appeal in the strike-out application is upheld with costs including the costs of two counsel, on a scale as between attorney and client. As a consequence the following parts of the respondents‟ papers are struck out: (a) para 3.2 of the founding affidavit: „that were too scared to divulge their identity for fear of intimidation and reprisal‟; (b) para 10 of the founding affidavit: „they informed Messrs Human and Kruger that they are absolutely fearful that their positions may be jeopardised should their identities be disclosed, but were prepared to do so in view of the constitutional principle of transparency and since the UFS will in any event in good time have to make disclosure of these very document‟; (c) para 101.14 of the founding affidavit: „Nothing could be further from the truth than this misleading statement of the second respondent to the UFS Senate, the one body which has to make a decision on something as serious and contentious as the possible validity of a new language policy which was in the process of formulation‟; (d) para 125.1.4 of the founding affidavit (excluding the first three sentences): „On the basis of the assurance given by a member attending that meeting to Mr Human, I sincerely believe that it is true that Prof Jansen dismissed the letter as being irrelevant as coming from a third party . . . the new language policy‟; (e) para 154 of the founding affidavit: „because the persons who provided them were too scared to reveal their identities and‟; (f) para 20.5.3 of the supplementary founding affidavit: „it nonetheless amounts to a serious misrepresentation vitiating the legality of any decision taken on that basis‟; and (g) para 41 of the supplementary founding affidavit: „led to believe‟ and „the assertions were misleading‟. 3 The order granted by the Free State Division of the High Court, Bloemfontein (under case no. A70/2016) is set aside and substituted by the following order: (a) „The applicants‟ application to review and set aside the decision by the Council of the University of the Free State to adopt a new language policy is dismissed with costs including the costs of two counsel, save that in the case of the first applicant, each party shall pay its own costs. (b) The respondent‟s application to strike out is upheld with costs including the costs of two counsel on a scale as between attorney and client. As a consequence the parts identified in the applicants‟ papers at paras 2 (a) to (g) of the order of this court are set aside.‟ ______________ A Cachalia Judge of Appeal APPEARANCES For Appellant: J J Gauntlett SC (with him F B Pelser) Instructed by: Phatshoane Henney Inc, Bloemfontein For First Respondent: J I du Toit SC (with him M J Engelbrecht; M J Merabe) Instructed by: Hurter Spies Inc, Centurion Schoeman Maree Attorneys, Bloemfontein Amici Curiae: Horn & Van Rensburg Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 28 March 2017 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. UNIVERSITY OF THE FREE STATE v AFRIFORUM & ANOTHER [1] The University of the Free State (UFS) acted lawfully when in adopted a new language policy in March 2016, which replaces Afrikaans and English as parallel mediums of instruction with English as the primary medium. So said the Supreme Court of Appeal (SCA) today, when it upheld an appeal by UFS against a ruling of by three judges of the Free State Division of the High Court in July 2016, which reviewed and set aside the decision to adopt the new policy as unlawful. The application to review and set aside the adoption of the policy was brought by Afriforum and Solidarity. [2] In a unanimous judgment written by Justice Azhar Cachalia, in which Justices Kevin Swain, Rami Mathopo, Burton Fourie and Ashton Schippers concurred, the SCA said that UFS’s conduct had been exemplary in the manner in which it adopted and gave careful consideration to the new policy. The main reason given for the departing from the parallel-medium policy was that it had the ‘unintended consequence’ of segregating white Afrikaans-speaking students from Black students who have chosen to study in English. This led to racial tensions as well as staff and student complaints. The SCA held this was a good reason to depart from the existing policy. [3] The High Court had held that in adopting the new policy UFS had failed to consider s 29(2) of the Constitution, which guarantees language of choice in public education institutions when ‘reasonably practicable’ and the 2002 Higher Education Language Policy (LPHE), which advocated the retention and strengthening of Afrikaans at historically Afrikaans universities such as UFS. However, the SCA held that the evidence showed that UFS had indeed considered both s 29(2) and the LPHE. [4] In regard to s 29(2), the SCA upheld UFS’s contention that it was no longer ‘reasonably practicable,’ to continue with the existing policy. And as far as the LPHE was concerned, it held that it was merely a guideline which UFS was free to depart from in formulating its own language policy in terms of s 27(2) of the Higher Education Act 101 of 1995. There was therefore no basis for the argument by Afriforum and Solidarity that UFS had misconstrued its powers when it adopted the new policy. [5] In regard to the costs of the appeal, the SCA held that Afriforum was not liable to pay for the UFS’s costs because its real purpose was to vindicate the constitutional rights of Afrikaans language speakers. However, Solidarity, as a trade union had not shown that it had a legal interest in these proceedings and was therefore liable for UFS’s costs.

2332

non-electoral

2009

DIE HOOGSTE HOF VAN APPEL REPUBLIEK VAN SUID-AFRIKA UITSPRAAK Saak no: 073/2009 Geen gesagswaarde DONELLE GABRIEL APPELLANT en DIE STAAT RESPONDENT Neutrale sitasie: Gabriel v Die Staat (073/09) [2009] ZASCA 145 (26 November 2009) Coram: Mthiyane AR, Malan AR en Leach WnAR Verhoordatum: 19 November 2009 Gelewer: 26 November 2009 Opsomming Strafbare manslag – motorbotsing – gevangenisstraf – eerste oortreder – tersydestelling van vonnis – vonnis gevel op basis van verkeerde uitgangspunt ______________________________________________________________ BEVEL ______________________________________________________________ Op appèl vanaf die Kaap die Goeie Hoop Provinsiale Afdeling (Griesel R en Steyn WnR as hof van tweede instansie) Die appèl teen skuldigbevinding word van die hand gewys en die appèl teen vonnis slaag. Die volgende bevel is gemaak: (1) Die skuldigbevinding word bekragtig. (2) Die vonnis wat deur die landdros opgelê is word ter syde gestel en deur die volgende vervang: ‘Aanklagte 1 en 3 word vir doeleindes van vonnis saam geneem en die beskuldigde word tot ‘n boete van R 6 000 of 6 maande gevangenisstraf gevonnis en tot ‘n verdere een jaar gevangenisstraf opgeskort vir ‘n tydperk van drie jaar op voorwaarde dat die beskuldigde nie skuldig bevind word aan ‘n misdryf wat die roekelose of nalatige bestuur van ‘n motorvoertuig behels nie en wat gepleeg is tydens die periode van opskorting en waarvoor hy gevonnis word tot gevangenisstraf sonder die keuse van ‘n boete.’ ______________________________________________________________ UITSPRAAK ______________________________________________________________ MALAN AR (MTHIYANE AR en LEACH WnAR stem saam) [1] Die appellant is op 24 November 2006 in die landdroshof op Atlantis skuldig bevind op ‘n aanklag van strafbare manslag en van ‘n oortreding van artikel 61(1)(a) van die Nasionale Padverkeerswet Wet 93 van 1996. Hy het onskuldig gepleit op die aanklag van strafbare manslag maar skuldig op laasgenoemde aanklag dat hy versuim het om sy voertuig onmiddellik na ‘n motorbotsing tot stilstand te bring. Die aanklagte spruit uit ‘n botsing wat op 5 Februarie 2005 op die Weskuspad, oftewel die R 27 deurpad, by die aansluiting met die Dassenbergrylaan na Atlantis plaasgevind het en waarin ene Ruth Jass omgekom het. Die landdros het beide skuldigbevindings vir doeleindes van vonnisoplegging gesamentlik oorweeg en die appellant tot twee jaar gevangenisstraf gevonnis. [2] Verlof om te appelleer is deur die landdros geweier maar na ‘n versoekskrif aan die Regter President is verlof verleen om na die Provinsiale Afdeling van die Hooggeregshof van die Kaap die Goeie Hoop teen beide die skuldigbeving op die aanklag van strafbare manslag en die vonnis te appelleer. Die appèl is op 12 September 2008 deur Griesel R en Steyn WnR van die hand gewys. Op 27 Oktober 2008 is verlof egter verleen om teen beide skuldigbevinding en vonnis na hierdie hof in hoër beroep te kom. [3] Die oorledene was ‘n passasier in ‘n Mazda motorvoertuig wat deur LeRoy Collins bestuur is en het agter die bestuurder gesit. Collins was op pad van Melkbos waar hy en sy passasiers, drie dames en ‘n kind, die laat namiddag deurgebring het. Hy sou regs draai in Dassenbergrylaan op pad na Atlantis. Die Weskuspad verdeel kort voor die aansluiting in twee bane, een vir verkeer wat na regs draai en die ander vir deurverkeer. Dassenbergrylaan het ook twee bane wat deur ‘n middelmannetjie geskei word: die een kant waar die appellant gery het is vir verkeer wat in die Weskuspad na links of regs draai en die ander kant vir verkeer wat in Dassenbergrylaan indraai. Collins het nie die appellant se voertuig voor die botsing gewaar nie maar net ‘n harde slag gehoor. Sy voertuig is regs agter aan die sykant getref en die oorledene is onmiddelik of kort na die botsing oorlede. [4] Die appellant, ‘n taxibestuurder, was op pad van Atlantis in ‘n wit Toyota Hilux minibus. Hy het getuig dat toe hy die aansluiting met die Weskuspad nader hy ietwat spoed verminder het maar nie gestop het nie en, omdat hy geen verkeer in die Weskuspad opgemerk het nie, oor die stopteken in Dassenbergrylaan ‘gerol’ en na links in die Weskuspad gedraai het. Die botsing het plaasgevind sonder dat hy die voertuig waarin die oorledene was gesien het. Hy het wel opgemerk dat hierdie voertuig in sy, die appellant, se baan was. Dit sou onder die omstandighede beteken dat die voertuig waarin die oorledene gery het in die baan was waarin die appellant na links gedraai het. Die plek waar die botsing plaasgevind het is egter deur Collins aan die polisiebeampte, inspekteur Jacobs, uitgewys as synde aan die ander, Collins se korrekte, kant van die Weskuspad. [5] In sy uitspraak het die landdros oorweeg waar die botsing plaasgevind het. Hy moes ‘n beslissing maak oor die geskil tussen die bewering van die appellant dat die botsing aan ‘sy kant’ gebeur het en die suggestie deur die staatsgetuies dat dit aan ‘hulle’ kant van die Weskuspad was. Die landdros se gevolgtrekking is die volgende: ‘Daar was geen getuienis aangebied dat die motorvoertuig waarin die oorledene was na die botsing beweeg het, of jammer, daar was geen getuienis dat die motorvoertuig waarin die oorledene was na die botsing beweeg het vanaf waar beskuldigde sê die botsing sou plaasgevind het nie totdat die polisie op die toneel gekom het nie. Daar was ook geen getuienis aangebied dat die voertuig uit die pad geskuif was tot waar die polisie dit gevind het nie. Daar is ook geen getuienis aangebied dat die voertuig nie beskadig was soos deur die polisie getuig was nie. Al wat die Hof van beskuldigde se kant het is dat hy nie op die toneel was nie en enigiets kon gebeur het. Wanneer die Hof kyk na die omstandighede, die toneel, die skade aan die motorvoertuig waarin die oorledene was soos getuig deur die polisie, is die Hof van mening dat die enigste manier hoe die ongeluk kon plaasgevind het of gebeur het en waarskynlik gebeur het die volgende is. Die beskuldigde het teen ‘n hoë spoed spoed hoër as 20 kilometer per uur die stopstraat verontagsaam. Hy het oorbeweeg in die baan van aankomende verkeer toe hy na links draai en het hy die motorvoertuig waarin die oorledene ‘n passasier was getref en daarna die toneel verlaat wetende die ongeluk niemand anders as sy skuld was nie. Die Hof sal self tot hierdie bogenoemde bevinding kom al sou Cornelia Sam nie getuig het nie, in ag genome die omstandighede en feite van die saak. Die Hof is verder van mening dat beskuldigde se optrede grens aan roekeloosheid en bevind dat hy grof nalatig was in sy optrede.’ Die landdros se bevinding is gevolglik dat die appellant se optrede aan roekeloosheid grens en dat hy grof nalatig was. [6] Die Staat het die getuienis van Nico Christopher Jacobs, Gail Grewe, LeRoy Collins en Cornelia Sam aangebied. Die laaste drie getuies was almal in die motor wat deur Collins bestuur is. [7] Jacobs was ‘n inspekteur in die Suid-Afrikaanse polisiediens wat die toneel na die botsing besoek het. Hy het nie self die botsing sien plaasvind nie maar het die voertuig waarin die oorledene was dwars oor die pad sien staan. Hy het ‘n skets van die toneel gemaak. Hierop word die punt van botsing met ‘n ‘X’ aangedui soos dit deur Collins aan hom uitgewys is. Hierdie punt is aan Collins se kant van die Weskuspad geleë effens voor en nie regoor die aansluiting nie. Jacobs kon egter nie ‘n aanduiding gee oor presies waar hierdie punt in verhouding met ander verwysingspunte was nie omdat, soos hy dit uitgedruk het, die bestuurder ‘n ‘vae beeld’ aan hom gegee het van waar die voertuig hom getref het. Die skade aan hierdie voertuig was op die regter agterdeur. Dit was donker op die toneel en daar was geen straatbeligting nie. [8] By sy beoordeling van die getuienis van Cornelia Sam het die landdros bevind dat sy hom as ‘n goeie getuie beïndruk het. Hy het egter, soos geredelik deur die Staat toegegee word, ‘n onreëlmatigheid began deur die kruisvraging van hierdie getuie oor haar polisieverklaring te verbied en te vereis dat die verdediging die polisiebeampte wat die verklaring afgeneem het in ‘n binneverhoor oor die toelaatbaarheid daarvan as getuie moes roep. Hierdie beslissing van die landdros kom op ‘n klaarblyklike onreëlmatigheid neer.1 Met ‘n beroep op S v Heslop,2 is betoog dat die appellant nie ‘n billike verhoor gehad het nie en gevolglik op sy ontslag geregtig is. Ek stem nie hiermee saam nie. Die onreëlmatighede wat in Heslop ter sprake gekom het was van ‘n uiteenlopende aard en nie vergelykbaar met die weiering van die landdros in hierdie saak om die kruisverhoor van ‘n enkele getuie oor een aspek toe te laat nie. Indien die getuienis van Cornelia Sam geheel en al buite rekening gelaat word kan dit nie gesê word dat ‘geregtigheid ten gevolge van so ‘n onreëlmatigheid of gebrek inderdaad nie geskied het nie’ (artikel 322(1) van die Strafproseswet 51 van 1977).3 [9] Gail Grewe het links agter in die voertuig gesit met ‘n kind op haar skoot. Sy kon nie getuig vanaf welke rigting die taxi wat deur die appellant bestuur is gekom het nie en het nooit die ligte van ‘n ander voertuig sien aankom nie. Sy het wel verklaar dat die voertuig waarin sy was stadiger gery het net voordat die taxi in hulle vasgery het. Sy kon nie verduidelik in welke baan hulle kort voor die beplande draai na regs gery het nie. Haar getuienis dra ook niks by tot die spoed waarteen hulle en die appellant gery het nie. [10] Collins was die bestuurder van die voertuig waarteen die taxi gebots het. Hy het bevestig dat hy die punt van botsing aan die polisiebeampte 1 S v Mayekiso en Andere 1996 (2) SASV 298 (K) 304a en 304h – 305b en vgl die opmerkings oor kruisondervraging van getuies na aanleiding van hul polisieverklarings in S v Govender en andere 2006 (1) SA SASV 322 (E) 327 b-f; S v Crossberg 2008 (2) SASV 317 (HHA) paras 70 and 80. 2 2007 (1) SA 461 (HHA) paras 12 en 23. 3 Cf Engles v Hofmann en ‘n ander 1992 (2) SA 650 (K). uitgewys het. Hy het egter glad nie die taxi sien aankom nie en meld trouens dat hy geen voertuig gesien het nie. Hy het net die slag gehoor. Toe hy onder kruisverhoor met sy polisieverklaring waarin hy vermeld het dat hy ‘n witkleurige kombi teen ‘n hoë spoed sien aankom en die draai te wyd gevat het gekonfronteer word, het hy getuig dat hy deur die speurder voorgesê is. Onder kruisondervraging sou hy skielik onthou wat gebeur het. Ten spyte van hierdie onbevredigende kante van Collins se getuienis word hy deur die landdros as ‘n goeie getuie bestempel. [11] Normaalweg sal ‘n hof op appèl nie geredelik die feitelike bevindinge en geloofwaardigheidsbeslissings van die verhoorhof bevraagteken nie. In R v Dhlumayo and Another is opgemerk:4 'The principle which has been adopted that an appellate court will not ordinarily interfere with a finding of fact by a trial judge - with which I shall deal in a moment - is certainly not a rule of law. It probably may be called a "rule of practice", though I can find no authority which goes so far as to call it such. . . . It is no more than a common-sense recognition of the essential advantages which the trial judge has had, as a consequence of which the right of the appellate court to come to its own conclusions on matters of fact, free and unrestricted on legal theory, is necessarily in practice limited.' In die lig van die verrassende wending wat Colllins se getuienis geneem het kan hy beswaarlik as ‘n bevredigende getuie beskou word. Dit beteken egter nie dat die landdros, soos namens die appellant betoog is,5 die aansoek om 4 1948 (2) SA 677 (A) 695-6; S v Robinson en andere 1968 (1) SA 666 (A) 675 G - H. 5 Met ‘n beroep op onder andere S v Ndlangamandla en ‘n ander 1999 (1) SASV 391 (W) en ook S v Jama en ‘n ander 1998 (2) SASV 237 (N) waar op 241e-f opgemerk word: ‘I share the views … that an accused should be discharged if there is no evidence upon which a reasonable man might convict and the only basis of putting him on his defence is to hope that ontslag moes toegestaan het nie. Hierdie saak is nie ‘n geval waar daar geen getuienis teen die appellant aan die einde van die staatsaak was nie. Daar was voldoende getuienis aangevul deur die erkennings van die appellant wat hom op sy verweer geplaas het en op grond waarvan skuldig bevind sou kon word. Sy onslag is tereg geweier en meneer Smit wat namens die appellant verskyn het het dit in die verloop van sy betoog toegegee. [12] Die appellant het getuig dat hy die taxi die aand bestuur het en hy het geredelik toegegee dat hy nie by die stopstraat by die aansluiting met die Weskuspad gestop het nie. Hy het teen minder as 20 kilometer per uur na links in hierdie pad ingedraai. Hy het nie Collins se voertuig gewaar nie en die botsing het plaasgevind in sy eie baan terwyl Collins probeer het om in die pad na Atlantis in te draai. Hy het voor hy gedraai het seker gemaak dat daar geen aankomende verkeer was nie. Die appellant het verder getuig dat hy gereeld hierdie pad ry en dat hy altyd op hierdie wyse oor die stopstraat ‘rol’ wanneer hy geen aankomende verkeer in die Weskuspad gewaar nie. Deur sekere feitebevindinge te maak het die landdros egter die appellant se getuienis implisiet verwerp. [13] Die hof a quo het opgemerk dat die appellant op sy eie getuienis minstens grof nalatig was. Griesel R het soos volg opgemenrk: ‘Op sy eie weergawe het die appellant die betrokke aand nie soos ‘n redelike en versigtige bestuurder opgetree nie. Hy het versuim om by die stopstraat stil te hou. Hy het ‘n aansluiting this own evidence will augment that of the State.’ Sien ook S v Legote en ‘n ander 2001 (2) SASV 179 (HHA) para 9; S v Lubaxa 2001 (4) SA 1251 (HHA) paras 17 en 18 en Kriegler en Kruger Hiemstra Suid-Afrikaanse Strafproses 6de uitg (2002) op 452-3. met ‘n besige deurpad binnegegaan sonder om behoorlik te kyk vir aankomende verkeer en op ‘n tydstip toe dit onveilig was om dit te doen. Hy het in alle waarskynlikheid die draai te wyd geneem en het in die proses in Collins se baan beland waar die botsing plaasgevind het, soos aangedui op die polisieplan en soos gestaaf deur die posisie van Collins se voertuig onmiddellik na die botsing. Daarna het hy die ongelukstoneel verlaat en homself uit die voete gemaak, strydig met sy wetlike verpligtinge om te stop, die omvang van skade vas te stel en hulp te verleen of the ontbied, indien nodig. Die afleiding is onvermydelik dat hy die ongelukstoneel weens ‘n skuldgevoel, en nie weens skok, verlaat het.’ [14] Ek stem saam dat die appellant op sy eie weergawe nalatig was. Hy het die aansluiting binnegegaan op ‘n tydstip toe dit onveilig was en sonder om behoorlik te let op aankomende verkeer. Die botsing het kort na hy oor die stopteken ‘gerol’ het plaasgevind. Die motor wat deur Collins bestuur was moes dus onvermydelik voor hom of baie na aan die appellant se taxi gewees het. Indien hy enigsins versigtig bestuur het sou hy dit gesien het en sou hy die ongeluk kon vermy het. Die appellant is gevolglik tereg skuldig bevind. [15] Die landdros het die appellant tot twee jaar gevangenisstraf gevonnis. Hy het vir hierdie doel die twee klagte waarop hy skuldig bevind is saam beoordeel. Die appellant was ‘n eerste oortreder wat ten tye van die misdaad vyf en twintig jaar oud was. Hy is getroud en het drie kinders. Hy was toe werksaam as taxibestuurder vir sy vader. Tydens die verhoor was hy ‘n groente- en vrugtesmous wat ongeveer R 2400 per maand verdien het. Hy het standard 7 geslaag. Die landdros het behoorlik van hierdie persoonlike omstandighede kennis geneem. Met vonnisoplegging het hy egter van die standpunt uitgegaan dat die botsing op die punt wat deur Jacobs op die sketsplan aangedui is plaasgevind het. Verder meen die landdros dat die appellant teen ‘n spoed wat hoër as 20 kilometer per uur was – ‘n hoë spoed - die stopstraat verontagsaam, in die baan van aankomende verkeer inbeweeg en teen die voertuig waarin die oorledene was gebots het. Hierdie optrede meen die landdros was grof nalatig en grens aan roekeloosheid. Na my mening word hierdie uitgangspunt van die landdros nie deur betroubare getuienis ondersteun nie. Daar is enersyds geen betroubare getuienis deur die staat aangebied oor die spoed waarteen die appellant sou bestuur het nie. Collins se getuienis is eenvoudig nie aanvaarbaar nie en Grewe se getuienis het niks tot die saak bygedra nie. Cornelia Sam se getuienis moet om die redes vermeld buite rekening gelaat word. Dit laat slegs die getuienis van die appellant. Verder meen ek kan die bevinding van die landdros dat die botsing aan Collins se korrekte kant van die pad plaasgevind het bevraagteken word. Karige getuienis hieroor is aangebied. Jacobs, ‘n ervare polisiebeampte, se eie getuienis is dat hy nie self die punt van botsing op grond van sy eie waarnemings sou kon bepaal nie. Hy was kort na die botsing op die toneel en het die punt op die sketsplan slegs aangedui omdat Collins dit aan hom uitgewys het. Collins se eie getuienis is onbetroubaar en die aanwesigheid van glasstukke rondom die voertuig gee geen aanduiding van waar die punt van botsing kon wees nie. Daar was geen olie- of remmerke nie. Jacobs self, soos ek opgemerk het, kon nie bepaal waar die punt van botsing was nie. Daar is gevolglik geen betroubare getuienis hieroor nie en geen betroubare getuienis dat die botsing op die plek op die sketsplan aangedui plaasgevind het nie. [16] Dit is geykte reg dat ‘n hof van appèl nie ligtelik met die uitoefening van ‘n diskresie en gevolglik met die vonnis wat deur ‘n laer hof opgelê is sal inmeng nie. ‘n Hoër hof sal slegs inmeng indien ‘n laer hof ‘n mistasting begaan het wat van so ‘n aard, graad of erns is dat dit regstreeks of by afleiding gesê kan word dat die hof sy diskresie nie uitgeoefen het nie of dit onbehoorlik or onredelik uitgeoefen het. Indien dit die geval is staan dit die hof van appèl vry om na eie goeddunke vonnis op te lê.6 In hierdie aangeleentheid is gevangenisstraf die appellant opgelê op grond van feitebevindinge wat nie deur die getuienis gestaaf word nie. Dit regverdig hierdie hof om opnuut vonnis te vel. [17] Die erns van die appellant se oortreding en die onherroeplikheid van die gevolge van sy optrede kan en word nie onderskat nie. Dit is egter gepas om in ‘n saak soos hierdie die graad van die appellant se nalatigheid te beoordeel.7 In die afwesigheid van geloofwaardige getuienis tot die teendeel moet die weergawe van die appellant aanvaar word. Volgens sy getuienis het hy spoed verminder toe hy die aansluiting nader en na links en regs gekyk maar geen aankomende verkeer gewaar nie. Hy het klaarblyklik nie behoorlik gekyk nie maar gegewe hierdie feite volg dit nie noodwendig dat sy optrede as grensende aan roekeloos of grof nalatig aangemerk kan word nie. Die appellant se versuim om die voertuig van Collins te gewaar kan byvoorbeeld te wyte wees aan ‘n kortstondige gebrek aan konsentrasie of onagsaamheid. 6 S v Pillay 1977 (4) SA 531 (A) 535 F. 7 Sien S v Nyathi 2005 (2) SASV 273 (HHA) paras 14 tot 21; S v Crossberg 2008 (2) SASV 317 (HHA) paras 85 to 110. Hierby moet in ag geneem word dat die appellant sedert hy op 20 Desember 2007 gevonnis is in aanhouding was totdat borg hangende appèl op 13 Mei 2008 aan hom verleen is. In die lig hiervan is namens die Staat toegegee dat ‘n verdere tydperk van gevangenisstraf nie gepas sou wees nie en dat ‘n boete met gevangenisstraf as alternatief asook ‘n opgeskorte verdere tydperk van gevangenisstraf die gepaste vonnis sou wees. [18] Die volgende bevel word gemaak; (1) Die skuldigbevinding word bekragtig. (2) Die vonnis wat deur die landdros opgelê is word ter syde gestel en deur die volgende vervang: ‘Aanklagte 1 en 3 word vir doeleindes van vonnis saam geneem en die beskuldigde word tot ‘n boete van R 6 000 of 6 maande gevangenisstraf gevonnis en tot ‘n verdere een jaar gevangenisstraf opgeskort vir ‘n tydperk van drie jaar op voorwaarde dat die beskuldigde nie skuldig bevind word aan ‘n misdryf wat die roekelose of nalatige bestuur van ‘n motorvoertuig behels nie en wat gepleeg is tydens die periode van opskorting en waarvoor hy gevonnis word tot gevangenisstraf sonder die keuse van ‘n boete.’ MALAN AR Verskynings: Vir Appellant: JA Smit In opdrag van: Van Ieperen Prokureurs Vir Respondent: CJ Teunissen

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL 26 November 2009 STATUS: Immediate Donelle Gabriel and the State (073/2009) [2009] ZASCA 145 (26 November 2009) Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal today dismissed an appeal against a conviction by the regional magistrate at Atlantis on a count of culpable homicide arising from a motor vehicle collision. The appellant was sentenced to two years’ imprisonment. Both the conviction and sentence were confirmed on appeal to the Cape of Good Hope Provincial Division. On a further appeal to the Supreme Court of Appeal the conviction was confirmed but the sentence of two years’ imprisonment reduced and a R 6000 fine (alternatively 6 months’ imprisonment) coupled with a suspended sentence of one year’s imprisonment imposed.

2764

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 162/12 In the matter between: Siyabonga Mooi Appellant and The State Respondent Neutral citation: Mooi v The State (162/12) [2012] ZASCA 79 (30 May 2012) Coram: NAVSA, VAN HEERDEN AND SNYDERS JJA Heard: 16 May 2012 Delivered: 30 May 2012 Summary: Bail – Criminal Procedure Act 51 of 1977 s 60(11)(a) – delay by State in concluding its case taken together with deduced weakness of State’s case constituting exceptional circumstances which in the interests of justice permit the release of accused. ORDER On appeal from: Western Cape High Court, Cape Town (Hlophe JP sitting as court of appeal): The appeal is upheld. The order of the court below is set aside and substituted as follows: ‘a The appeal is upheld. b The order by the Magistrate is set aside and substituted as follows: “The applicant is released on bail in the amount of R5 000 (five thousand rand) subject to the following conditions: i That the applicant report at the Lingelethu West Police Station every Monday, Wednesday and Friday between 06h00 and 08h00; ii Should the applicant change his address he must inform the investigating officer, Detective Constable S Chaphiso accordingly and supply the new address; iii Attend his trial on each date the matter is postponed to and remain in attendance until excused by the court.”’ JUDGMENT SNYDERS JA (Navsa and Van Heerden JJA concurring) [1] This is an appeal against the dismissal of a bail appeal by the Western Cape High Court, Cape Town (Hlophe JP sitting as court of appeal).1 At the conclusion of the 1 This matter commenced as an application for leave to appeal referred for the hearing of argument in terms of s 21(3)(c) of the Supreme Court Act 59 of 1959. At the hearing leave to appeal was granted and the matter proceeded as an appeal. hearing of the matter an order was made releasing the appellant with an indication that the reasons for the order were to follow. These are the reasons. [2] The appellant is standing trial in the Regional Court for the Regional Division of the Cape, held at Wynberg, on several counts of robbery with aggravating circumstances, attempted robbery with aggravating circumstances, attempted murder and the unlawful possession of a firearm and ammunition. All the charges arise from an incident on 24 December 2008, during which a service station in Muizenberg was robbed. The appellant was arrested on that day and has been in custody ever since. The trial commenced on 12 November 2009 and the State has not yet concluded its evidence. During March 2011 the appellant applied to be released on bail. He brought the application in the Regional Court, Wynberg (not the trial court). Bail was refused and he appealed the refusal of bail to the Western Cape High Court, Cape Town. On 19 September 2011 his appeal was dismissed. [3] The parties were in agreement that the bail application resorted under s 60(11)(a) of the Criminal Procedure Act 51 of 1977 (the CPA) and therefore the appellant has to adduce evidence that satisfies the court that ‘exceptional circumstances exists which in the interests of justice permit his release’.2 In terms of s 65(4) the appellant needs to persuade this Court that the decision to refuse bail was wrong.3 [4] Section 60(4) lists several grounds which, if shown to exist, would have the effect that the interests of justice would not permit the release of an accused. Those are: ‘(a) Where there is the likelihood that the accused, if he or she were released on bail, will endanger the safety of the public or any particular person or will commit a Schedule 1 offence; or 2 Section 60(11)(a) of the CPA: ‘Notwithstanding any provision of this Act, where an accused is charged with an offence referred to – (a) in Schedule 6, the court shall order that the accused be detained in custody until he or she is dealt with in accordance with the law, unless the accused, having been given a reasonable opportunity to do so, adduces evidence which satisfies the court that exceptional circumstances exist which in the interests of justice permit his or her release;’ 3 Section 65(4): ‘The court or judge hearing the appeal shall not set aside the decision against which the appeal is brought, unless such court or judge is satisfied that the decision was wrong, in which event the court or judge shall give the decision which in its or his opinion the lower court should have given.’ (b) Where there is the likelihood that the accused, if he or she were released on bail, will attempt to evade his or her trial; or (c) Where there is the likelihood that the accused, if he or she were released on bail, will attempt to influence or intimidate witnesses or to conceal or destroy evidence; or (d) Where there is the likelihood that the accused, if he or she were released on bail, will undermine or jeopardize the objectives or the proper functioning of the criminal justice system, including the bail system; (e) Where in exceptional circumstances there is the likelihood that the release of the accused will disturb the public order or undermine the public peace or security.’ [5] The magistrate refused bail because ‘there is evidence linking the accused to the offence’ and therefore that ‘it will not be in the interests of justice to grant bail’. In this Court it was accepted that in the circumstances the determining factor whether to grant or refuse bail is the strength of the State’s case against the appellant. Section 60(6) lists several factors which a court may take into account, amongst other relevant things, in order to consider whether the ground stated in ss (4)(b), namely the likelihood of an accused evading his trial, has been established. Those include the emotional and occupational ties of the accused; his assets and where they are situated; his means of travel and available travel documents; whether he can afford to forfeit the amount of money paid in relation to bail; prospects of extradition; the nature and gravity of the offences charged with; the strength of the case against him; the nature and gravity of the likely punishment in the event of the accused being convicted; the binding effect of possible bail conditions and the ease with which they could be breached, and any other factor which in the opinion of the court should be taken into account. [6] The appellant is 32 years old, single and the father of two minor children, aged 11 and 6 respectively. The children reside with and are supported by their respective mothers, one in the Northern Cape and the other one in the Western Cape. The appellant has been in custody for a period of three years and almost five months, since the day of the incident. He has no previous convictions and no other pending criminal cases. Before his arrest he used to work as a bouncer at a tavern and would be able to take up such a position again should he be released. Since 1992 he has been living in Eersterivier with his mother in her house, which house he stands to inherit upon her death as he is her only son. The appellant has previously faced criminal charges. He was charged with robbery with aggravating circumstances, murder and the unlawful possession of firearms in the high court. He was granted bail in that matter, apparently after the investigating officer had an accident and was incapacitated. He was ultimately acquitted. Whilst he was on bail he was arrested in the current matter. Although the details are scant he was also previously charged in a regional court in the Eastern Cape, granted bail and those proceedings were withdrawn. [7] The garage where the incident occurred is equipped with closed circuit television cameras (CCTV), specifically for security purposes. During the robbery the system was functioning and the State had been furnished with the recording of the events. The State has that recording available for purposes of the criminal trial and has still photographs printed from it. According to the investigating officer, who testified for the State in opposing the bail application, the events recorded on the CCTV recording accord with the accounts of witnesses and incriminate the appellant. Although the recording was not shown to the court, nor to the appellant or his legal representatives, the investigating officer testified that it shows that, prior to the robbery, a white Volkswagen Polo motor vehicle arrived at the garage and caused an obstruction. One of the appellant’s co- accused, number 4, alighted. He was asked to move the vehicle. Later, the Polo returned to a position close to the garage and three men disembarked, allegedly the appellant, his co-accused 2 and 4. The Polo then departed. Accused 4 entered the shop at the garage and made a purchase. The appellant, armed with a firearm, entered and pointed the firearm at the owner and all the customers. Whilst inside, accused 4 forced all the attendants and patrons on the forecourt into a cubicle and they were searched by accused 2. One of the accused then made a phonecall, presumably to the driver of a get-away vehicle, but received no response. They attempted to escape in a Ford Fiesta, without success, and then threatened the driver of a Toyota Hilux with a firearm, took control and possession of his vehicle and drove off. Members of the South African Police Service were quick to arrive on the scene and were pointed in the direction of the Hilux. They went in pursuit. Both the Hilux and the police vehicle came to a stop and the occupants started shooting at each other. The Polo, that was at the garage initially, returned and stopped between the police and the suspected robbers. The driver disembarked, walked towards the police who stopped shooting, and he complained to them that he had been hijacked. The suspected robbers got into the Polo and sped away. It ultimately crashed against a wall and the occupants ran away. Bystanders pointed the police to where the occupants were allegedly hiding and the police arrested the appellant and accused 2 as a result of the reports from the bystanders. The police found a firearm buried at the house where accused 2 was arrested and this firearm was balistically linked to the scene of the shootout between members of the police and the robbers. A fingerprint of the appellant was found in the Polo, which he identified as a vehicle of a friend. [8] Despite the confidence of the State in its evidence against the appellant it was evident that the investigating officer over-stated that case during the course of his evidence. Cross examination revealed that the fingerprint of the appellant was found on the Polo motor vehicle and not in it, that there were some issues around the reliability of the identification of the appellant during an identification parade and in court, that the photographs made from the CCTV recording (these are not part of the record of the proceedings before us) did not show the facial features of the robbers and revealed a dispute about whether the person that the State alleged was the appellant was wearing a multi-coloured striped T-shirt or a black and white striped jersey, similar to a rugby jersey. It is necessary to record that the owner of the Polo was allegedly known to the appellant and that was the reason for the possible presence of the fingerprint, which the appellant has not yet acknowledged was his. [9] Despite the investigating officer stating that the State has a strong case against the appellant, his evidence did not reveal this. The State has not managed, in a period of two and a half years, to complete the evidence of their alleged strong case in the trial court. The State did not baulk at the accusation that it caused most, if not all, the delays in the matter. At the time that the magistrate heard the bail application, it was envisaged that the State was going to close its case after a further three day hearing during May 2012. That date has now come and gone and this Court was informed that the State did not proceed with its case against the appellant, but postponed it again until the end of May 2012. Counsel appearing for the State before us, who is not counsel appearing at the trial of the matter, was in the unenviable position that she was unable to give the assurance that the State’s case is going to proceed and be completed during the postponed hearing at the end of the month. She was also unable to indicate, despite the fact that she enquired about it, what the evidence was that the State still intended to lead. [10] According to the investigating officer’s evidence, the source of all of the evidence against the appellant became known on the day of the incident and therefore there could not have been any difficulty gathering it. No difficulty was pointed to on behalf of the State. The inordinate delay in presenting this asserted strong case on behalf of the State is unexplained. In the circumstances the delay since the trial started in November 2009, is significant and calls for an explanation that has not been forthcoming. On the contrary, when asked for one during his evidence, the investigating officer displayed an arrogant and obstructive attitude. [11] The finding contended for on behalf of the appellant that there is no case at all against him, is overly optimistic. The evidence on behalf of the State, at the very least, discloses a link between the appellant, the Polo at the scene of the shoot-out between the police and the robbers, and the place where the appellant was arrested. However, the delay in concluding its case, the lack of explanation for the delay and the absence of evidence of the alleged strong case, undermines the assertion by the State and the finding by the magistrate that there is such a substantial case against the appellant that it would serve as motivation for him not to stand his trial were he to be released on bail. [12] The appellant has faced previous prosecutions, in the high court for a variety of charges, including murder, and also in a regional court in the Eastern Cape, for robbery. In each instance he was granted bail and he stood trial until its conclusion. These facts reveal an inclination contrary to reluctance to stand trial. In the circumstances the apparent weakness of the State’s case, taken together with a history of not avoiding his trial, the court below was wrong in not concluding that the appellant has succeeded in showing that exceptional circumstances are present that, in the interests of justice, permit his release. [12] The appellant was released on bail on the following terms that were agreed between the parties. The following order was made: The appeal is upheld. The order of the court below is set aside and substituted as follows: ‘a The appeal is upheld. b The order by the Magistrate is set aside and substituted as follows: “The applicant is released on bail in the amount of R5 000 (five thousand rand) subject to the following conditions: i That the applicant report at the Lingelethu West Police Station every Monday, Wednesday and Friday between 06h00 and 08h00; ii Should the applicant change his address he must inform the investigating officer, Detective Constable S Chaphiso accordingly and supply the new address; iii Attend his trial on each date the matter is postponed to and remain in attendance until excused by the court.” ____________________ S SNYDERS Judge of Appeal APPEARANCES: For the Appellant: J van der Berg Instructed by: Bern Rautenbach Attorneys; Brackenfell Lengau Attorneys, Bloemfontein For the Respondent: S M Galloway Instructed by: The Director of Public Prosecutions, Cape Town The Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 May 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * The appellant is standing trial for robbery, attempted murder and the illegal possession of a firearm and ammunition in the Regional Court held at Wynberg. The charges arise from an incident on 24 December 2008 during which a service station in Muizenberg was robbed. The appellant was arrested in connection with the incident on the same day and has been in custody ever since. The trial commenced on 12 November 2009 but has been marred by numerous delays primarily caused by the State. By the time this appeal was heard, May 2012, the State had yet to conclude its case against the appellant. The appellant brought an application for his release on bail, primarily relying on the alleged weaknesses of the State’s case and the inordinate delay in concluding the case against the appellant and his co-accused. He was refused bail in the magistrate’s court and on appeal by the Western Cape High Court. The Supreme Court of Appeal released the appellant on bail after hearing the matter. The reasons for that order were delivered today. The Supreme Court of Appeal found that the State’s submission that it has a strong case against the appellant, which would motivate him to avoid his trial, should he be released on bail, is not supported by the facts in the bail application. The deduced weakness of the State’s case, taken with the inordinate delay in concluding the evidence for the State and absence of acceptable explanation for that delay, were accepted by the Supreme Court of Appeal to constitute exceptional circumstances that, in the interests of justice, permit the release of the appellant.

1261

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 482/07 REPORTABLE In the matter between: MALCOLM WILLIAM EGGLESTONE APPELLANT v THE STATE RESPONDENT Coram: Farlam, Mlambo JJA, Mhlantla AJA Heard: 28 February 2008 Delivered: 30 May 2008 Summary: Criminal Law – appeal against multiple convictions and sentence – consent – what is – indecent assault – what is – S v F still the law – owner of escort agency having sexual intercourse with and indecently assaulting prospective prostitute during on-the-job training – participation in training not amounting to consent – convictions for rape and indecent assault confirmed. Order in para [29]. Neutral citation: This judgment may be referred to as Egglestone v The State (297/2005) [2008] ZASCA 77 (30 May 2008). (Dissenting Judgment p 16) MLAMBO JA [1] This is an appeal against convictions for rape, kidnapping, common assault, indecent assault and a sentence of 10 years’ imprisonment. The appellant was originally arraigned in the Cape Town Regional Court where he faced a total of 11 charges made up as follows: rape (count one); indecent assault (count two); assault (count three); kidnapping (count four); indecent assault (count five); kidnapping (count six); indecent assault (counts seven, eight, nine and ten) and rape (count eleven). The offences were allegedly committed during March to May 1997 save for those in counts eight to eleven which were alleged to have taken place in February 1998. The trial started on 9 April 1999 and was concluded three years later on 22 May 2002 when the appellant was convicted on counts one to five and eight to ten. [2] On 30 October 2002 the regional court sentenced the appellant to 12 years’ imprisonment structured as follows: 10 years on counts one and two taken together for purposes of sentence; six months on count three, two years on count four, one year on count five and six months on counts eight to ten all taken together for purposes of sentence. It was ordered that the sentences imposed on counts three, five and eight to ten were, in terms of s 280(2) of the Criminal Procedure Act 51 of 1977, to run concurrently with the 10 year sentence imposed on counts one and two. [3] In an appeal before the Cape High Court (Ngwenya J and Wille AJ), heard on 18 March 2005, the appellant’s conviction on counts nine and ten was set aside as well as the 12 year sentence. The High Court imposed a 10 year imprisonment sentence structured as follows: 10 years’ imprisonment on counts one to four all taken together for purposes of sentence and six months imprisonment regarding the convictions on counts five and eight which was ordered to run concurrently with the 10 year sentence. On the same day the High Court granted the appellant leave to appeal to this court regarding the conviction on counts five and eight and the six month imprisonment sentence imposed in respect of those counts. Leave was refused regarding the conviction on counts one to four and the sentence imposed in that regard but on 27 July 2005 this court granted the appellant special leave to appeal to this court regarding his conviction on those counts and the sentence imposed in respect thereof. [4] The charge sheet alleged that during April and May 1997 the appellant raped Natasha Lindeboom (count one); assaulted her indecently by pulling down her panties, touching her vagina and having anal intercourse with her as well as forcing her to put his penis in her mouth (count two); assaulted her with his open hand (count three); deprived her of her liberty of movement by preventing her from leaving his premises at Erf 851, Somerset-West, Cape Town (count four) where all the offences save for the one in count eight were allegedly committed; that he indecently assaulted Monica Wessels by taking off her bra and touching her breasts (count five) and that on or about 22 February 1998 at or near Cape Town the appellant indecently assaulted Lee-Ann dos Santos by touching her leg, rubbing her stomach and trying to touch her breasts as well as kissing her on her mouth (count eight). [5] All the complainants were high school teenagers from the impoverished communities around the Cape Peninsula recruited by the appellant to work for him as escort agency prostitutes. The recruitment took place by means of pamphlets distributed by other female employees of the appellant. The job advertised in the pamphlets was however that of lingerie modelling. Natasha Lindeboom (Lindeboom), the complainant in counts one to four was walking home from school when she was handed one of the pamphlets. She showed interest in the job but preferred to seek her parents’ permission to go for an interview. The appellant personally spoke to her mother who gave her consent for Natasha to attend the interview. It is not clear from the record whether the appellant was candid with Natasha’s mother about the true nature of the job. Natasha and her younger sister Nicolette, who was also a potential recruit, were interviewed at a restaurant. [6] During this interview Natasha and Nicolette learnt that the job did not just entail modelling lingerie but working in an escort agency as prostitutes where they would be expected to perform certain sexual acts and provide sexual favours to clients. It appears that they were informed that they were at liberty to choose what part of the job they would prefer for instance as receptionists and/or lingerie models excluding sexual activities. However, irrespective of the job they preferred, it appears that they were informed that they had to be trained as all inclusive escort agency prostitutes, encompassing the whole spectrum of a prostitute’s work, such as rendering private shows and different kinds of sexual favours to clients. [7] After the restaurant interview the Lindeboom sisters were taken to the appellant’s premises in Somerset West called the Stables. The premises were highly secured and structured in the form of a reception area, negotiation rooms, private rooms as well as show rooms for private shows and modelling. There the appellant instructed the sisters at intervals to undress and provided them with lingerie to put on. He then proceeded to fondle their breasts and their genitals which was apparently a continuation of the interview. Afterwards the sisters were taken to their home where Nicolette declined the job offer whilst Natasha accepted and was fetched the next day to start working for the appellant. It is not in dispute that during Lindeboom’s stay at the Stables she participated in so-called training sessions carried out by the appellant during which he would have touched and fondled her breasts and genitals, led her to perform a pelvic massage and to have normal sexual intercourse as well as oral and anal intercourse with him. [8] Monica Wessels (Wessels), the complainant in count five, also went through the restaurant interview. On arrival at the Stables she was also instructed to undress and it was during this incident that the appellant fondled her breasts. She, however, never took up the job offer despite expressing interest. In so far as Lee-Ann dos Santos (Dos Santos) (the complainant in count eight) is concerned, she participated in the selling of teddy bear gifts for the appellant at restaurants and other public places. It was during one of such jaunts that the appellant kissed her on her mouth and rubbed her on her leg and stomach. [9] The issue before us is whether the court a quo was correct in dismissing the appellant’s appeal and in upholding the trial court’s view that the state had succeeded in proving his guilt on the remaining counts. [10] It is appropriate to start by briefly considering what amounts to indecent assault. An authoritative discussion of the nature and meaning of the offence is found in S v F 1982 (2) SA 580 (T) where it was held that indecent assault is committed even though the violence is not directed at the complainant's sexual organs. It is the accused's intention, manifested in words or conduct, that is important and not necessarily the act. In order to constitute the offence, it is not necessary, however, that the complainant's sexual organs should actually have been touched. Any action whereby the accused aims with some part of his or her body at the sexual organs of the complainant is sufficient. In this regard Ackermann J stated that (at 585): ‘Ek is gevolglik van mening dat daar wel gekyk kan en moet word na die uitgesproke bedoeling van 'n beskuldigde soos oorgedra aan die klaer (hetsy deur woorde, gedrag of by implikasie) om vas te stel of ‘n aanranding ‘n onsedelike aanranding daarstel.’ [11] In S v Kock 2003 (2) SACR 5 (SCA) at p 10 par 9 Heher JA remarked that: ‘Indecent assault is in its essence an assault (not merely an act) which is by its nature or circumstances of an indecent character.’ Counsel for the appellant sought to persuade us that in this passage this court overturned S v F in so far as the definition of indecent assault is concerned. I do not agree. In my view S v Kock only introduced an objective test of indecency and left the position expressed in S v F intact. In fact no exhaustive discussion of the offence was done in S v Kock nor was there any reference to S v F. I have no doubt that the position in this regard remains as authoritatively set out in S v F. [12] Perhaps some comment is also apposite regarding the required approach to evidence in sexual offence cases. As already mentioned, in S v Jackson 1998 (1) SACR 470 (SCA) this court discarded the so-called cautionary rule which was the norm in sexual offence cases. In that case this court ruled that the burden on the state is to prove the case beyond a reasonable doubt – no more, no less. The evidence may, however, call for a cautionary approach but that is a far cry from the application of a general cautionary rule. Hot on the heels of S v Jackson came S v M 1999 (2) SACR 548 (SCA) where S v Jackson was reinforced.1 [13] Against this background I turn to the facts of this case. The basis of the appeal against the convictions on the Lindeboom counts (counts one to four) is that the trial court erred in finding that Lindeboom was a credible witness; in accepting her evidence; in rejecting the appellant’s version of events, and in finding that Lindeboom was not in the Stables of her own free will. In this regard it was submitted that Lindeboom had voluntarily come to the Stables and had stayed there throughout at her own free will; that at no time did she request or demand to be taken home; that she expressly consented to him fondling and touching her; that she was willing and consented to undergo the training he offered her as an all inclusive escort agency prostitute; that the training he provided entailed his role playing a potential client, necessitating that he perform various actual sexual acts with her, to prepare her for the work ahead and that she consented to all the sexual activity that took place between them. It was submitted that Lindeboom understood this fully and any wrongdoing was denied. It was further submitted that there was only one incident of sexual intercourse during training between them during the first week and that further sexual intercourse between them was not related to training but was fully consensual as they had become lovers. [14] Regarding the Wessels indecent assault count (count 5) the appellant 1 At p 555b-c: ‘The factors which motivated this Court to dispense with the cautionary rule in sexual assault cases apply, in my view, with equal force to all cases in which an act of a sexual nature is an element. The reasons given by Olivier JA at 474f-477d in S v Jackson therefore require no elaboration or qualification in relation to the crime of incest and I proceed to consider the evidence without the restraints imposed by the cautionary rule.’ contends that the trial court erred in finding that Wessels had not consented to his conduct. It was submitted that when he handled her breasts he had her consent to touch her that way. Regarding the Dos Santos indecent assault count (count eight) the submission was that the trial court erred in accepting her version and in finding her to have been a credible witness and also finding that the appellant’s conduct was objectively indecent. It was submitted that the appellant intended to congratulate her by kissing her on her cheek but she suddenly turned to face him and he thereby accidentally kissed her on her mouth. As far as rubbing her leg and stomach was concerned, it was submitted that he did this simply to congratulate her on making good teddy bear gift sales and that he meant nothing other than just to express his appreciation for her good performance. [15] It is well established that as an appeal court we are at large in the event of a misdirection on fact by the trial court, to ‘disregard the trial court’s findings of fact, even though based on credibility, in whole or in part according to the nature of the misdirection and the circumstances of the particular case; . . .’ and arrive at our own conclusion.2 As always the correct approach in the assessment of an accused’s guilt or innocence is that all the evidence must be taken into account.3 [16] The trial court accepted Lindeboom’s evidence and found that she was kept at the Stables against her will by the appellant and that during her stay there he raped her, assaulted her by slapping her on her face, as well as indecently assaulting her when he penetrated her anally. It is not clear however from the trial court’s judgment whether all or some, and if so, which of the incidents of sexual intercourse that took place between the appellant and Lindeboom gave rise to the rape conviction. I mention this because Lindeboom testified that on the Wednesday of the first week at the Stables, the appellant raped her and that during the second week she had sexual 2 R v Dhlumayo 1948 (2) SA 677 (A) at 706. See also S v Heslop 2007 (1) SACR 461 (SCA) at 472c. 3 S v Gentle 2005 (1) SACR 420 (SCA) at 433h-l; S v M 2006 (1) SACR 135 (SCA) at p 183 para 189. intercourse with him on two further occasions. It is, however, apparent from the trial court’s judgment that the reasoning that primarily led to the conviction of the appellant on the Lindeboom counts was its finding that there was no evidence that the appellant was in the process of starting an escort agency business. The trial court reasoned that it could also find no evidence of the appellant’s other businesses such as the selling of gifts at restaurants and other public places. [17] In coming to this finding the trial court overlooked objective and uncontested evidence which established as a matter of fact that the appellant was in fact engaged in the establishment of an escort agency. For instance the recruitment modus operandi and the structure of the Stables fitted in with the business that he said he was establishing which, he testified, was how it was done in the industry. The appellant’s evidence in this regard is undisputed. In my view, the trial court misdirected itself when it overlooked this evidence about the appellant’s business activities. [18] It is also clear that the trial court also misdirected itself when it accepted Lindeboom’s evidence that she had been kept at the Stables against her will. In arriving at this conclusion the trial court ignored common cause evidence to the effect that Lindeboom had come to the Stables voluntarily and had at no stage requested and/or demanded to be taken home. There is also uncontested evidence that Lindeboom had a number of opportunities to escape or simply walk away if she was so inclined but she did not. Clearly the State had failed to prove beyond reasonable doubt that Lindeboom was kept at the Stables against her will and was deprived of her freedom throughout her stay there. The kidnapping conviction can therefore not stand. [19] However, in so far as Lindeboom’s rape and indecent assault is concerned, my view is that the court a quo was correct in upholding the trial court’s conclusion in that regard. Regarding the Wednesday rape she testified that after the rape, she took a shower, staying there for a whole hour contemplating what had just happened to her. Thereafter, when she had an opportunity she telephoned Nicolette and reported the rape. Nicolette confirmed that her sister had reported the rape to her in that telephone conversation. She testified that she did not know what to do, but decided to phone her sister’s boyfriend, Bradley, to tell him of the telephone call from her sister. It is common cause that in the early evening of that Wednesday, Bradley called Lindeboom on the appellant’s cell phone. Bradley could however not be called to testify about the content of the telephone conversation he had with Nicolette and with Lindeboom as he could not be located. [20] The appellant denied that he had sexual intercourse with Lindeboom on that Wednesday. Whilst he disputed this rape allegation he admitted the telephone call with Bradley. His version is that the first sexual encounter between him and Lindeboom where he actually penetrated her was on the Thursday of the first week and that this was purely part of her training as an all inclusive escort agency prostitute. He stated that he was role playing a client when he penetrated her. This also was his explanation regarding his penetrating her anally the next day. This, he stated was also part of her training and that she was a willing and consenting trainee, so to speak. Furthermore he testified that the sexual intercourse between them on the Monday and Tuesday of the next week was fully consensual and that it had nothing to do with training. His version was that he had become estranged from his girlfriend, Tamsyn, and as he had been sleeping in Lindeboom’s bed during that time a relationship had arisen between them leading to their having sexual intercourse on the stated occasions. He admitted though that she was reluctant at first, during training, to participate in explicit sexual activity with him. In fact he stated, with regard to the anal intercourse, that he realized after penetrating her for the first time that she was uncomfortable and he stopped. He testified that he realized at that stage that this was an activity she could simply not perform and that it would have to be excluded from her tasks. He also stated that she could not perform pelvic massages, having failed, apparently, to perform one on him during training. [21] It is so that as far as the Wednesday rape is concerned Lindeboom contradicted herself about when this rape would have happened. She stated in her examination-in-chief that the rape happened during the day, but in cross-examination she said it happened in the evening. Furthermore in her first police statement about her ordeal at the Stables she did not mention the Wednesday rape at all. In relation to the sexual intercourse incidents of the next week, Lindeboom was clear that the respondent had relentlessly tried to have sexual intercourse with her but she had steadfastly resisted. She testified that she succumbed to his advances during the second week because she had lost the will to resist him anymore and allowed him to have sex with her so that he could leave her alone. She was unshaken in cross- examination that from the second day of her stay at the Stables, she was confronted with the appellant’s advances for sexual intercourse. These, she said, were aided by Ronel Dunbar and Tamsyn who took turns in trying to persuade her to give in to the appellant’s demands. At some stage Tamsyn slapped her on her face because of her continued refusal to give in to the appellant’s demands. [22] It is clear from the evidence that the appellant was astute in what he was doing because he would come into Lindeboom’s room and get under the blankets of her bed without saying a word. She testified that he would then fondle her but she would stop him. This happened for a couple of days until the Wednesday when he forced himself on her. I do not doubt that the Wednesday rape occurred despite the contradiction about when it took place. Her call to Nicolette that afternoon and Bradley’s telephone call to her in the evening is uncontested. That is the one and only night that Bradley called her and, in my view, this was no coincidence, it is because Nicolette had reported to him what her sister had relayed to her. I am further of the view that the appellant’s version of Lindeboom and him having become lovers leading to their having sexual intercourse on the second week, was also correctly rejected. Lindeboom had, by the second week clearly become worn out by the pressure to give in to the appellant’s advances, and did so on the Monday and Tuesday. She was correctly believed when she stated that no relationship had materialised between her and the appellant. [23] The appellant’s submission that Lindeboom’s willingness to dress in lingerie and take part in training was proof of her consent for him to have sexual intercourse with her cannot be accepted. No mention of actual sex during training was mentioned during the interviews and anyway the appellant was her employer and not a client who had paid for sexual favours. This notion that as an employer he was entitled to have sexual intercourse with her as his trainee employee, as part of job training, is fallacious. It amounts to a situation where the trainee employee, in order to get the job, has no choice but to submit to his sexual exploits irrespective of her feelings and inclination. In my view, the appellant’s conduct is a classic illustration of a power situation where as an adult twice Lindeboom’s age and in control of the Stables he simply did as he pleased with her. One important manifestation of this is his brazen conduct of simply sleeping in her bed, uninvited. He was clearly in a dominant position and simply asserted this dominance by forcing himself on her.4 His appeal on the rape and indecent assault convictions (counts one and two) cannot succeed. One must further not forget that Lindeboom was clear that she had agreed to work as a receptionist and that her willingness to take part in training was because the appellant had told her that she nevertheless had to do it. She was unshaken in cross-examination that she did not consent to sexual intercourse even though she took part in training. [24] It was also submitted that Lindeboom’s continued stay at the Stables, 4 Masiya v Director of Public Prosecutions, Pretoria and Another (Centre For Applied Legal Studies And Another, Amici Curiae) 2007 (2) SACR 435 (CC) para 36: ‘. . . historically, rape has been and continues to be a crime of which females are its systematic target. It is the most reprehensible form of sexual assault constituting as it does a humiliating, degrading and brutal invasion of the dignity and the person of the survivor. It is not simply an act of sexual gratification, but one of physical domination. It is an extreme and flagrant form of manifesting male supremacy over females. (See S v Chapman 1997 (2) SACR 3 (SCA) (1997 (3) SA 341) at 344I-345B (SA). This Court has said in S v Baloyi 2000 (1) SACR 81 (CC) (2000 (2) SA 425; 2000 (1) BCLR 86) at para [12] that rape, like domestic violence, is “systemic, pervasive and overwhelmingly gender-specific . . . [and] reflects and reinforces patriarchal domination, and does so in a particularly brutal form”.’ See also S v Ferreira 2004 (2) SACR 454 (SCA) para 40 where the following is stated: ‘Sexual violence and the threat of sexual violence goes to the core of women’s subordination in society. It is the single greatest threat to the self-determination of South African women. It also, therefore, means having regard to an abused woman accused’s constitutional rights to dignity, freedom from violence and bodily integrity that the abuser has infringed. (S v Chapman 1997 (2) SACR 3 (SCA) at 5b-f (1997 (3) SA 341 at 344J-345E); the Constitution, ss 10, 12(1)(c) and 12(2)).’ despite the activities she was supposedly coerced into, is clear evidence that she was a willing participant in those activities. This is besides the point. Lindeboom was not contradicted when she testified that she accepted the job because her family was struggling financially and she actually left school to do it. There is nothing to gainsay the suggestion that her continued stay at the Stables was influenced by the appellant’s promises to her and her mother that she would make a lot of money working for him. Furthermore, in so far as the supposedly consensual sexual intercourse with her during training is concerned, it cannot be stated that she was a novice in sexual matters and as such needed to be ‘trained’ on how to have sexual intercourse with potential clients. Lindeboom was, on the facts of this case, a teenager who had a boyfriend and knew exactly what sexual intercourse was. As I have already stated, the notion that training as a prostitute encompassed actual sexual intercourse with one’s employer is besides me, more so when one is dealing with a person who knew what sexual intercourse was. [25] It was further submitted on the appellant’s behalf that Lindeboom’s conduct after she left the Stables is not consonant with someone who had, amongst other things, been raped. It is true that she testified that she reported to her mother that she had been raped but nothing was done about her report. The argument was that one would have expected her to have insisted on going to the police or even her mother would have gone to the police when she heard this, neither did so, instead they went to have a Mothers’ day lunch. It was only after Lindeboom’s mother discussed the matter with a neighbour a few days later that the neighbour encouraged them to contact the police, which they did. I do not agree that this demonstrates that no sexual wrongdoing had taken place. On the facts of this case, I cannot accept the suggestion that Lindeboom should be disbelieved simply because she did not behave in the manner suggested. This approach, in my view, unfairly puts her, as a rape complainant, in the position of an accused in which the appellant, as the real accused, stands to profit should it be found that the complainant’s failure to conduct herself in a certain manner means she either consented or is simply falsely implicating the appellant. Judicial pronouncements against this approach have been unfortunately few and far between. See, however, S v M (supra) where Cameron JA in my view, aptly expressed the correct approach.5 In this case the fact that there was no urgency in reporting to the police can never be a basis to find that no rape had occurred. It must also be stated that the conviction for assault involving Lindeboom cannot stand. No such evidence was led. The only assault on her was the slap she got from Tamsyn. [26] As far as Wessels is concerned, she was clear when she testified that although she was surprised, she did not object to the appellant undressing her and helping her loosen her bra and touching her breasts. In her evidence she stated that ‘dit was snaaks’ but she just wanted him to do what he had to so that she would leave. He had given her no prior warning that he was going to fondle her breasts. The test relating to indecent assault is an objective one.6 It has nothing to do with the fact that the complainant objected or not. Clearly, the appellant’s conduct of touching Wessels’s breasts, a total stranger at that time, is clearly objectively indecent. The same goes for the appellant’s conduct of rubbing Dos Santos’s leg and stomach. The same cannot, however, be said about the kiss. His version of how this happened is sufficiently plausible. [27] Finally I am of the view that taking all the evidence into account, the 5 At para 272: ‘Accused persons are entitled to be acquitted when there is reasonable doubt about their guilt. That does not make it necessary or permissible for motives to be freely imputed to sexual offence complainants at appellate level when these were not fairly and properly explored in their testimony. To permit this would threaten return to the indefensible days when complainants were treated as inherently unreliable, inherently inclined to false incrimination, and inherently disposed to destructive jealousy in relation to their consensual male sexual partners.’ See also Holtzhauzen v Roodt 1997 (4) SA 766 (W) at 778 where the following was stated: ‘However, rape is an experience of the utmost intimacy. The victims or survivors thereof are largely confined to the female sex. I have heard the response of such survivors generically described as “a scream from silence”. The result has been a paucity of South African legal and judicial understanding and commentary on the full parameters and implications of this phenomenon. Rape is an experience so devastating in its consequences that it is rightly perceived as striking at the very fundament of human, particularly female, privacy, dignity and personhood. Yet, I acknowledge that the ability of a judicial officer such as myself to fully comprehend the kaleidoscope of emotion and experience, of both rapist and rape survivor, is extremely limited.’ 6 S v Kock (supra). State had succeeded in proving the guilt of the appellant regarding all the rape incidents involving Lindeboom as well as the indecent assaults on her and on Wessels and Dos Santos. Those convictions were therefore properly arrived at and the court a quo cannot be faulted in upholding them. A factor that, I think, must not be lost sight of in this case is that even though Lindeboom, Wessels and Dos Santos voluntarily went to the Stables, this did not mean that this was a licence for their dignity and integrity to be violated at will by the appellant. It appears from the appellant’s evidence that this is what went on in his mind. He had targeted vulnerable young women who would respond to the prospect of making money due to their poverty. To him, immediately they came to his premises and were willing to go through with the interview and training, he was at liberty simply to do with them as he pleased. This, in my view, betrays the appellant’s real intention that as long as they were on his premises they were his chattels to violate at will. Their dignity and integrity irrespective of the job they enlisted for, should have been respected at all times.7 [28] In so far as sentence is concerned, I am of the view that the sentence imposed for the rapes was lenient. Rape has been described as a horrific offence deserving of appropriately severe punishment which sends out a clear message to would be offenders.8 Despite my view about the leniency of the 7 Mahomed CJ in S v Chapman 1997 (2) SACR 2 (SCA) at 5b-e stated: ‘The rights to dignity, to privacy and the integrity of every person are basic to the ethos of the Constitution and to any defensible civilisation. Women in this country are entitled to protection of these rights. They have a legitimate claim to walk peacefully on the streets, to enjoy their shopping and their entertainment, to go and come from work, and to enjoy the peace and tranquillity of their homes without the fear, the apprehension and the insecurity which constantly diminishes the quality and enjoyment of their lives.’ 8 S v Chapman (supra) at 5b: ‘Rape is a very serious offence, constituting as it does a humiliating, degrading and brutal invasion of the privacy, the dignity and the person of the victim.’ See also S v Mojaki 2006 (2) SACR 590 (T) at 591: ‘Rape is a very serious offence, so serious that I doubt whether those who are not women will ever be able to fully understand its effect on the victim. It violates the dignity of the person being raped. More so when it is perpetrated on young, defenceless and innocent ones. Children are entitled to be children.’ See also Chapman (supra) at 5e: ‘The courts are under a duty to send a clear message to the accused, to other potential rapists and to the community: We are determined to protect the equality, dignity and freedom of all women, and we shall show no mercy to those who seek to invade those rights.’ sentence imposed for the rapes, I am not at large to interfere in that regard merely because I would have imposed a different sentence. There is no cross appeal in this regard and besides the fact that the sentence is lenient does not necessarily mean that it is so light that it induces a sense of shock. However, the setting aside of the kidnapping conviction means that sentence has to be reconsidered as the court a quo imposed one sentence for the kidnapping, the rapes and indecent assault on Lindeboom. Taking all the circumstances of the matter into account a sentence of eight years for the rapes and indecent assault of Lindeboom appears appropriate when taken together for purposes of sentence. I would also order that the sentence of six months’ imprisonment imposed for the indecent assaults on Wessels and Dos Santos should run concurrently with the sentence of eight years. [29] In the circumstances the following order is made: 29.1 The appeal against the convictions on count three and four succeeds and those convictions are set aside. 29.2 The appeal against the convictions on counts one, two, five and eight is dismissed. 29.3 The sentence of 10 years imposed by the court a quo is set aside and in its stead is substituted a sentence of eight years’ imprisonment. 29.4 The sentence of six months imposed for the convictions in count five and eight is confirmed. It is ordered that this sentence shall run concurrently with the sentence of eight years. _________________ D MLAMBO JUDGE OF APPEAL CONCUR: MHLANTLA AJA FARLAM JA [30] I have had the advantage of reading the judgment of my colleague Mlambo JA in this matter. I agree with his conclusion that the appeal against the convictions on counts three and four should be upheld and that the appeal against the convictions on counts five and eight should be dismissed. As far as the conviction on count one is concerned I agree that it should be upheld but only in respect of the rapes committed on the Monday and Tuesday of the second week of Natasha Lindeboom’s stay at the Stables: I do not think that a rape on the previous Wednesday has been proven. I also think that the appeal against the conviction on count two should be upheld. I further do not agree regarding the sentence to be imposed. [31] At the outset it must be pointed out that, as my colleague has found, the magistrate misdirected himself materially to such an extent that this court is obliged to decide the case purely on the record (without having the benefit of seeing the witnesses) with the result that the question of onus becomes all- important (see R v Dhlumayo 1948 (2) SA 677 (A), principles 11 and 13). [32] As far as count one is concerned I am satisfied, having read and re- read the relevant parts of the record and having had regard to what was put in cross-examination to the complainant and what the appellant said in his evidence, that the complainant submitted to his advances without actually consenting and that he was reckless as to whether she consented or not. His evidence as to the way she responded to his lovemaking, which was not put to her in cross-examination, was, in my view, false and reinforces my conclusion that he was in fact reckless. As far as the alleged rape on the Wednesday is concerned the complainant’s boyfriend was not called and it is dangerous to speculate as to what he would have said if he had given evidence. The complainant contradicted herself as to when on the Wednesday the rape occurred and did not mention it at all in her first police statement. Obliged as we are to decide the case on the record I do not think we can be satisfied in the circumstances that the complainant was raped on the Wednesday of the first week. [33] As far as count two is concerned it is common cause that the complainant agreed to undergo training as what was euphemistically called an all-inclusive lingerie model, ie as a prostitute. It is also clear, in my view, from the record that at each stage in the training he asked the trainee if he could proceed and made it clear to her that if she did not want to carry on he would stop. In those circumstances I do not see how it can be found that in doing what he did he realised that she was not consenting or that he was reckless as to whether she consented or not. It follows that in my view the appeal against this conviction should succeed. [34] As far as the appeal against the sentence is concerned, I think that the trial court and the court a quo erred in failing to take into account that the appellant had been in custody as an awaiting trial prisoner for four and a half years and that his health deteriorated badly during that period. He had also lived in daily fear of assault and rape. Counsel for the appellant referred in this regard to Schutz J’s approving reference (in S v Stephen 1994 (2) SACR 163 (W) at 168f) to the Canadian decision of Gravino (70/71) 13 Crim L Q 434 (Quebec Court of Appeal) in which it was said: ‘Imprisonment whilst awaiting trial is the equivalent of a sentence of twice that length.’ [35] While I would hesitate to give general approval to that statement, I think that the circumstances of the appellant’s pre-conviction incarceration justify its application here. I fully endorse what was said in the cases cited in my colleague’s judgment regarding the seriousness of the crime of rape but I think that the factor to which I have just referred should have been taken into account and that the sentence of ten years’ imprisonment imposed by the court a quo should be replaced by a sentence of six years’ imprisonment. …………….. IG FARLAM JUDGE OF APPEAL

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 May 2008 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Malcolm William Egglestone v The State The Supreme Court of Appeal today dismissed an appeal by Malcolm William Egglestone against his conviction on rape and indecent assault charges. His appeal on his conviction on assault and kidnapping charges was however upheld. The facts, briefly, are that Egglestone had recruited female teenagers under the pretext that he would employ them as lingerie models. His real intention was to employ them as prostitutes in his escort agency. Whilst in his care he performed certain indecent acts with them and had sexual intercourse with one of them. He said they had consented thereto and that it was also part of their on-the-job training. The Supreme Court of Appeal, upholding the finding of the regional court and Cape High Court (on appeal), concluded that he had been properly convicted on the rape and indecent assault charges. The court, however, upheld his appeal against the conviction in respect of the assault and kidnapping charges. In regard to sentence the Supreme Court of Appeal reduced a 10 year sentence of imprisonment to an effective eight years imprisonment.

2725

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 55/11 Reportable In the matter between: CITY OF JOHANNESBURG First Appellant CITY MANAGER OF THE CITY OF JOHANNESBURG Second Appellant and AD OUTPOST (PTY) LTD Respondent Neutral citation: City of Johannesburg v Ad Outpost (55/11) [2012] ZASCA 40 (29 March 2012) Coram: Farlam, Van Heerden, Mhlantla and Leach JJA and Ndita AJA Heard: 27 February 2012 Delivered: 29 March 2012 Summary: Applicant applying under by-laws for permission to advertise alongside highways ─ application wrongly refused but by-laws repealed and fresh by-laws promulgated ─ application to be reconsidered under new by-laws ___________________________________________________________________ O R D E R ___________________________________________________________________ On appeal from: South Gauteng High Court, Johannesburg (Matlapeng AJ sitting as court of first instance): 1. The appeal succeeds with costs, such costs to include the costs of two counsel. 2. The order of the high court is set aside and is substituted with the following: ‘(a) The decisions taken by the first respondent, the City of Johannesburg, on 29 August 2007, to refuse the applicant’s applications for approval of the two outdoor advertising billboards known as the Sandown billboard and the Kelvin View billboard, as well as the decisions by the third respondent, the city manager, to dismiss the applicant’s appeals against the aforementioned decisions of the first respondent, are reviewed and set aside. (b) The applicant is to pay the respondents’ costs, such costs to include the costs of two counsel.’ ___________________________________________________________________ J U D G M E N T ___________________________________________________________________ LEACH JA (FARLAM, VAN HEERDEN AND MHLANTLA JJA AND NDITA AJA concurring) [1] As its name suggests, the respondent, Ad Outpost (Pty) Limited, is a company carrying on business in the advertising industry. At the heart of the present dispute are two billboards situated alongside roadways in Gauteng which the respondent has used in the course of its business for more than ten years. As is more fully set out below, the original authority which the respondent was granted in 2001 lapsed in the fullness of time, and led to the respondent applying to the City of Johannesburg (the first appellant) for a renewal of permission to use the billboards for a further five years. Its application was refused and an appeal to the City Manager (the second appellant, but the third respondent in the high court) brought under the relevant by-law, was similarly dismissed. [2] Disenchanted by this, the respondent proceeded to apply to the South Gauteng High Court for an order reviewing and setting aside the decisions of both appellants and seeking, in their stead, the court’s authority to use the billboards in question for a period of five years. The high court granted relief in those terms, its permission being antedated to 29 August 2007, being the date when the first appellant had refused permission. With leave of the high court, the appellants now appeal against that order [3] The billboards in question, referred to in the papers as the ‘Sandown billboard’ and the ‘Kelvin View billboard’, are both situated in the immediate vicinity of major public motorways in greater Johannesburg. The Sandown billboard is a 7.5m x 5m single-sided billboard located near an overhead traffic sign on Grayston Drive which gives warning of a nearby off-ramp leading to Katherine Street. The Kelvin View billboard, a 4.5m x 18m double-sided billboard with an overall height of 17m, is situated to the east of the M1 South Highway, near what is known as the Marlboro off-ramp. In 2001 the respondent applied for the necessary approval to use both billboards under the relevant by-laws in force at the time 1 (which I intend for convenience merely to refer to as ‘the 1999 by-laws’), clause 39(3)(d) of which provided that: ‘Billboards will not be permitted within specified distances of on and off-ramps of motorways and overhead traffic directional signs – see Figure 2 . . . except where a curve in the road renders the billboard not to interfere with a clear and undistracted view of the directional traffic sign.’ [4] Figure 2 referred to in this section contained a diagrammatic illustration of both an off-ramp and an on-ramp and the situation of a so-called ‘prohibited area’ immediately adjacent thereto, as well as an illustration of a prohibited area adjacent to an overhead traffic sign. It is common cause that the two billboards in question stand within prohibited areas as so determined and in which billboards were not to 1 The Eastern Metropolitan Local Council Advertising Signs And Hoardings By-Laws 1999. be permitted, subject of course to the exception envisaged by clause 39(3)(d). From the photographs of the billboards in question included in the papers, they appear unlikely to interfere with a clear and undistracted view of any directional traffic signs and, presumably due to this, the respondent’s applications were granted: on 4 May 2001 in regard to the Sandown billboard and on 22 August 2001 in regard to the Kelvin View billboard. [5] In both instances the approval was granted for a period of three years with further approval to be renegotiated three months prior to expiry of that period. No extension was ever negotiated and the authority to use the billboards therefore lapsed in 2004. This notwithstanding, the respondent continued to use both billboards without objection from the appellants until 13 November 2006 when the first appellant eventually wrote to the respondent about the Kelvin View billboard. It drew attention to the lapse of the original authority and stated that, as the billboard lacked the necessary approval, it should be removed within 21 days – although it went on to advise that if the respondent wished to ‘legalise’ the billboard it should submit a new application for consideration. Subsequently, on 29 November 2006, the first appellant addressed a letter in similar terms to the respondent in regard to the Sandown billboard. Consequently, in March 2007, the respondent applied to the first appellant for permission to use the billboards for advertising purposes for a period of five years. The application for each application was marked as being an application for a ‘renewal’ and indicated that the billboard was ‘existing’. I shall refer to them as the ‘renewal applications’. [6] By this time, the 1999 by-laws had been repealed and replaced by the Advertising Signs And Hoardings By-laws2 which came into effect on 1 December 2001 (‘the 2001 by-laws’). Similar to clause 39(3)(d) of the 1999 by-laws, but couched in more permissive terms, clause 24(6)(d) of the 2001 by-laws contained the following safety condition : ‘Prohibited areas on motorways – 2 Published in GN 7170 of 2001 in Gauteng Provincial Gazette Extraordinary 234 of 28 November 2001. Billboards may be permitted within specified distances of on- and off-ramps of motorways and overhead traffic directional signs where a curve in the road renders the billboard not to interfere with a clear and undistracted view of the directional traffic sign.’ [7] Of course, this implies that billboards would not be permitted within specified distances of ramps and signs if they interfered with a ‘clear and undistracted’ view of the directional traffic signs. But despite the reference to ‘specified distances’ in the clause set out above, there appears to have been a lacuna in the by-laws as, in contradistinction to those of 1999, they neither prescribed any such specified distances nor defined any prohibited areas – and in this regard there was no diagram similar to figure 2 of the 1999 by-laws defining prohibited areas at on and off-ramps and near overhead signs. However the first appellant still enjoyed a discretion to approve the use of the billboards for advertising3 and, in considering whether to do so, was enjoined to take into account, inter-alia, whether a billboard ‘will in any way impair the visibility of any road traffic sign or affect the safety of motorists or pedestrians’.4 [8] After having lodged its renewal applications in March 2007, correspondence passed between the respondent and the first appellant which culminated in the first appellant writing to the respondent on 3 September 2007, informing it that both applications had been refused. The reason given for the decision in each case was that under ‘the safety standards set by the Johannesburg Roads Agency in terms of clause 24(6)(d) of the [2001 by-laws], signs should be at least 200m away from an overhead traffic sign.’ [9] Aggrieved by this the respondent, relying on a provision in the 2001 by-laws, appealed to the second appellant contending, in particular, that the by-laws neither contained a 200m prohibition nor empowered the Johannesburg Roads Agency to prescribe conditions for the approval of billboards. However, on 31 March 2008, the respondent received a letter5 from the second appellant dismissing the appeals on the ground that: 3 Clause 2(7) as read with clause 41 of the 2001 by-laws. 4 Clause 2(6)(a)(vi) of the 2001 by-laws. 5 Dated 21 January 2008. ‘The Johannesburg Roads Agency as the custodians of road traffic safety in Johannesburg has determined certain areas close to overhead traffic signs as restricted areas for the purposes of traffic safety. No advertising signs are permitted within such restricted areas. Your proposed application is within such restricted area. See also section 24(6)(d) of the said by-laws. This traffic safety precaution has been consistently applied by the City.’ [10] Unhappy that the second appellant had also taken into account considerations which it felt were irrelevant and improper, the respondent applied to the high court to review and set aside the decisions of both the first and second appellants. As both those decisions had been predicated upon an erroneous view that the billboards in question were located in ‘prohibited areas’ as envisaged by the 2001 by-laws and that there was an absolute prohibition which precluded any discretion to grant permission for advertising signs in those areas, the appellants correctly conceded in their answering affidavits that their decisions had not been validly taken. But by the time the review was launched in September 2008, the 2001 by-laws had been repealed and replaced by the Outdoor Advertising By-laws6 which came into operation on 1 July 2008 (‘the 2008 by-laws’). These once more prescribed prohibited areas at on and off-ramps and overhead traffic signs, and re- introduced a diagrammatic illustration thereof in schedule 2. This was essentially the same as figure 2 in the 1999 by-laws. As the respondent’s billboards are situated within prohibited areas as so defined, the appellants adopted the standpoint that to set their decisions aside and to ask them to reconsider the renewal applications would be a meaningless exercise, arguing that the 2008 by-laws contained an absolute prohibition against advertising in prohibited areas which precluded the respondent from being granted the permission it sought. The respondent, on the other hand, argued that its applications would have to be reconsidered not under the 2008 by-laws but those of 2001, under which the permission it sought could be granted. [11] The high court rejected the appellant’s argument, holding that the 2001 by- laws would apply to a reconsideration of the respondent’s applications. As the appellants had neither suggested that the billboards contravened clause 24(6)(d) of 6 Promulgated in the Gauteng Provincial Gazette Extraordinary 150 of 13 June 2008. the 2001 by-laws7 nor alleged that the billboards in any way interfered with traffic or been the subject of any complaint, and in the light of its further conclusion that the appellants had acted incompetently in assessing the respondent’s applications, the high court decided not to refer the matter back for reconsideration by the appellants as it felt that to do so would cause the respondent to suffer ‘unjustifiable prejudice’. It therefore set aside the decisions of both appellants and replaced them with its own decision granting the respondent permission to use the billboards for five years, ante-dating that authority as mentioned at the outset. [12] In this court, the appellants conceded that in order to give effect to the principle of legality their invalid decisions should be set aside. However, as in the high court, the principal issue argued was whether in that event the respondent’s applications would fall to be reconsidered under the 2001 or 2008 by-laws. In the alternative, counsel for the respondent argued that even if the 2008 by-laws were applicable, the prohibition they contained against advertising in prohibited areas was not absolute and the appellants could still grant the requisite permission. However, at the close of argument it transpired that in fact the 2008 by-laws had been repealed on 18 December 2009 when a fresh set of by-laws (‘the 2009 by-laws’) 8 were published by the second appellant under s 13(a) of the Local Government: Municipal Systems Act 32 of 2000. This had occurred even before the respondent had filed its replying affidavit in the high court, and the 2008 by-laws are therefore wholly irrelevant to the issues debated both in the high court as well as this court. This is a lamentable state of affairs which made it necessary for this court to afford the parties the opportunity to file written argument after the hearing dealing with the 2009 by- laws. [13] In her subsequent written argument, counsel for the respondents submitted that, for the reasons she had advanced in respect of the 2008 by-laws, the first appellant had still retained a residual discretion to allow advertising signs in prohibited areas. This was founded on the provisions of clause 4 of the 2009 by-laws 7 Quoted in para 6 above. 8 The City of Johannesburg: Outdoor Advertising By-Laws published in Gauteng Provincial Gazette Extraordinary 277 of 18 December 2009. which, so the argument went, provide an over-arching discretion to the first appellant to grant the permission sought. Inter alia, that clause provides : ‘ 4 (1) In considering an application submitted in terms of section 3(3), the Council must, in addition to any other relevant factor, legislation, policy and by-laws of the Council, have due regard to the following: (a) . . . . (b) Whether the proposed advertising sign will ─ (i) . . . . (ii) constitute a danger to any person or property or to motorists or pedestrians or obstruct vehicular or pedestrian traffic; (iii) in any way impair the visibility of any road traffic sign’. [14] However, the 2009 by-laws also contain a prohibition against advertising signs near on- and off-ramps and overhead traffic signs on freeways and major highways. These are diagrammatically illustrated in schedule 2, which is identical to the corresponding schedule to the 2008 by-laws. Relating thereto, clause 6(2) provides: ‘Any advertising sign on a public street or facing a public street, including advertising signs facing a Provincial Road, must comply with the following requirements: (a) . . . . (b) no advertising sign may be located inside a prohibited area at any on- and off-ramp of a motorway, whether local, provincial or national and in relation to overhead road traffic signs, as depicted in Figure 1 of Schedule 2.’ [15] The prohibition in clause 6(2), as read with schedule 2, is then incorporated by reference into clause 9 which details a number of instances ‘(i)n addition to any other prohibition . . . in these By-laws’ in which ‘no person may erect, maintain or display any advertising sign’. As clause 3(6)(b) goes on to provide in peremptory terms that the first appellant ‘must refuse to accept an application’ which relates to an advertising sign prohibited by clause 9, the by-laws clearly fall to be interpreted as providing an absolute prohibition against advertising signs falling within prohibited areas in schedule 2, and the discretion provided by clause 4 (accepting for present purposes that there is one) can only relate to applications which the first appellant can accept ie those not prohibited by clause 9. As it is common cause that the respondent’s renewal applications relate to billboards that are in prohibited areas which are referred to by reference in clause 9, if the 2009 by-laws are applicable to the reconsideration of the renewal applications, the first appellant has no discretion to grant the approval the respondent seeks. [16] Consequently the cardinal issue to consider is the respondent’s contention that the 2001 by-laws would be applicable to a reconsideration of its renewal applications. The immediate difficulty that I have with this argument is to be found in the terms of the subsequent by-laws. Clause 39(3) of the 2008 by-laws provided for any application brought under the repealed 2001 by-laws that was ‘pending’ before the first appellant at the date of the commencement of the 2008 by-laws to be dealt with in terms of the latter by-laws. Similarly, clause 39(3) of the 2009 by-laws provides that any application brought under the terms of the 2008 by-laws ‘pending before the (first appellant) at the date of commencement of these By-laws must be dealt with in terms of these By-laws’. [17] Both in the court a quo, and initially in this court, the parties accepted that the respondent’s renewal applications had finally come to an end on 31 March 2008 when the second appellant dismissed the respondent’s appeals. They therefore further accepted that the renewal applications could not be construed as ‘pending’ when the 2008 by-laws commenced on 1 July 2008 (and nor, for that matter, when the 2009 by-laws commenced on 18 December 2009). In their further written argument submitted after the appeal had been heard, the appellants retreated from this position to argue that the effect of the high court setting aside their invalid actions on 13 October 2010 was retrospectively to visit those decisions with nullity; with the result that the first appellant must be considered as not having taken any decision on the renewal applications before the 2009 by-laws commenced, and that such applications were therefore ‘pending’ at that time. [18] As was correctly observed in Noah,9 precisely when a matter may be said to be ‘pending’ is an issue that has to be determined in the context in which the word is used. However, the general meaning of the word is ‘awaiting decision or settlement’10 and there can be no doubt that, once the respondents had lodged their renewal applications with the first appellant, they were thereafter ‘pending’ until such time as they had been dealt with. The issue is whether the renewal applications were so pending when the 2009 by-laws came into operation. [19] Counsel for the respondent correctly pointed out that this court had held in Oudekraal11 that an invalid administrative decision stands and has effect until it is set aside. On the strength of this authority, she argued that as the declaration of invalidity was only made by the high court after the 2009 by-laws had come into operation and, as at that time a final decision had been taken by the appellants which had not yet been set aside, the renewal applications could not be construed as having been pending at that time. [20] However, as this court has regularly stressed, an administrative decision declared to have been invalid is to be retrospectively regarded as if it had never been made.12 Accordingly, if the decisions of the appellants are to be set aside, as all parties are agreed should occur, the matter is to be considered on the basis that no valid decisions in respect of the respondent’s renewal applications were ever taken. Those applications must therefore still be regarded as still awaiting a decision and, that being so, they are clearly pending ─ and have been since they were lodged in March 2007. They were therefore pending when the 2009 by-laws came into effect and, by reason of clause 39(3) of such by-laws, must be dealt with in terms of those by-laws rather than the 2001 by-laws. 9 Noah v Union National South British Insurance Co Ltd 1979 (1) SA 330 (T) at 332B-333C. 10 Concise Oxford English Dictionary 12 ed (2011). 11 Oudekraal Estates (Pty) Ltd v City of Cape Town & others 2004 (6) SA 222 (SCA) paras 27-31. 12 See eg Eskom Holdings Ltd & another v New Reclamation Group (Pty) Ltd 2009 (4) SA 628 (SCA) para 9 and Seale v Van Rooyen NO & others: Provincial Government, North West Province v Van Rooyen NO & others 2008 (4) SA 43 (SCA) paras 13 and 14. [21] This conclusion renders it unnecessary to consider the respondent’s argument based on s 12(2)(c) of the Interpretation Act 33 of 195713 that, if clause 39(3) is of no application, it had acquired the right to have its renewal applications considered under the 2001 by-laws before they were repealed. Suffice it to say in the light of the decisions of this court in Gunn, 14 Volkswagen 15 and Edcon 16 ─ the reasoning of which is supported by various judgments in foreign jurisdictions17 ─ the respondent had no more than a hope or expectation of acquiring a right under the 2001 by-laws which fell short of its enjoying a right which had accrued to it to have its application decided under those by-laws. For that reason, the 2001 by-laws would in any event have been of no application even had clause 39(3) not been included in the 2009 by-laws. [22] However, for the reasons given, the 2009 by-laws are clearly of application to the renewal applications and there is an absolute prohibition under those by-laws in respect of advertising signs being placed in the position in which the two billboards in question are situated. Thus not only did the high court err both in finding that the 2001 by-laws would be applicable to the reconsideration of the renewal applications but also in exercising a discretion on behalf of the first appellant which the latter did not have. Accordingly, not only can the order granting permission to the respondents to use the billboards not stand, but there would be no point in directing the first appellant to reconsider the renewal applications which it is obliged to refuse. In these circumstances, the high court ought merely to have made an order setting aside the decisions of the two appellants. That will be reflected in this court’s order. 13 It reads as follows: ‘Where a law repeals any other law, then unless the contrary intention appears, the repeal shall not ─ . . . (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed.’ 14 Gunn & another NNO v Barclays Bank DCO 1962 (3) SA 678 (A) at 684B-D. 15 Chairman, Board on Tariffs and Trade v Volkswagen of South Africa (Pty) Ltd & another 2001 (2) SA 372 (SCA). 16 Edcon Pension Fund v Financial Services Board of Appeal & another 2008 (5) SA 511 (SCA). 17 Eg Odelola v Secretary of State for the Home Department [2009] UKHL 25:[2009] 3 All ER 1061 (HL); Chief Adjudication Officer v Maguire [1999] 2 All ER 589, [1999] 1 WLR 1778; Foodstuffs (Auckland) Ltd v Commerce Commission [2002] 1 NZLR 353 (CA) and Attorney-General for the State of Queensland v Australian Industrial Relations Commission & others; Minister for Employment and Workplace Relations of the Commonwealth of Australia v Australian Industrial Relations Commission and others [2002] HCA 42: [2002] 213 CLR 485 at para 101. [23] Turning to the question of costs, as the appellants have achieved substantial success on appeal they are entitled to their costs of appeal. In regard to the costs in the high court, the attitude of the appellants throughout has been that their decisions were indefensible. In truth, the proceedings in the high court concerned whether the respondent should be granted permission to use the billboards. The order the court a quo made in that regard should not have been granted. In these circumstances it seems to me that the respondent should bear the costs in the high court as well. It is not suggested that costs of two counsel would be inappropriate. [24] The following order is therefore made: 1. The appeal succeeds with costs, such costs to include the costs of two counsel. 2. The order of the high court is set aside and is substituted with the following: ‘(a) The decisions taken by the first respondent, the City of Johannesburg, on 29 August 2007, to refuse the applicant’s applications for approval of the two outdoor advertising billboards known as the Sandown billboard and the Kelvin View billboard, as well as the decisions by the third respondent, the city manager, to dismiss the applicant’s appeals against the aforementioned decisions of the first respondent, are reviewed and set aside. (b) The applicant is to pay the respondents’ costs, such costs to include the costs of two counsel.’ ______________________ L E Leach Judge of Appeal APPEARANCES: For Appellant: J Both SC (with him A W Pullinger) Instructed by: Moodie & Robertson, Johannesburg Claude Reid Inc, Bloemfontein For Respondent: K Hofmeyr Instructed by: Pagel Schulenberg Inc, Johannesburg Symington & De Kok, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 March 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal Neutral citation: City of Johannesburg v Ad Outpost (55/11) [2012] ZASCA 40 (29 March 2012) The respondent, an advertising agency that does business placing advertisements on billboards alongside major roadways in Johannesburg, had obtained permission to use two billboards for that purpose: one in Sandown and the other in Kelvin View, Johannesburg. The original authority granted to the respondent in this regard had lapsed in 2004. Despite this, the respondent continued to use the billboards without seeking permission from the City of Johannesburg to do so. Eventually the City insisted upon the respondent once more applying for permission to use the billboards. It did so in March 2007, but such permission was refused. The respondent appealed to the City Manager against this decision, but that appeal too was dismissed. The respondent then approached the South Gauteng High Court for an order authorising it to use the billboards for a period of five years, contending that the decisions taken by the City and the City Manager were invalid. The City and the City Manager conceded that the decisions they had taken were of no force and effect but alleged that as there had been a change of municipal by-laws, and as there was no longer any discretion on their part to allow advertising on the billboards in question due to their locality (both were situated in areas in which advertising was prohibited) it would be meaningless to set aside their decisions. The high court, however, concluded that the by-laws which were in place when the respondent had applied for permission in 2007 (and which had been repealed before the matter reached the high court) conferred a discretion to grant permission for advertising in the prohibited areas, and would be applicable when the applications for permission were reconsidered. It also concluded that it should grant the respondent such permission rather than to refer the applications back to the City. This decision was today set aside by the Supreme Court of Appeal which ruled that the subsequent by-laws, promulgated in 2009, which were of application when the high court set aside the decisions taken by the City and the City Manager, were the by-laws under which the applications for permission would have to be reconsidered. Under those by-laws, advertising was absolutely prohibited where the two billboards in question are located. It therefore set aside the permission granted to the respondents by the high court to use the billboard for five years. ---ends---

2871

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 873/11 In the matter between: JDJ Properties CC First Appellant Double Diamond CC Second Appellant and Umngeni Local Municipality First Respondent Triumph Brokers (Pty) Ltd Second Respondent Neutral citation: JDJ Properties v Umngeni Local Municipality (873/11) [2012] ZASCA 186 (29 November 2012) Coram: LEWIS, HEHER, THERON AND PILLAY JJA AND PLASKET AJA Heard: 08 November 2012 Delivered: 29 November 2012 Summary: Promotion of Administrative Justice Act 3 of 2000 – whether decision to approve building plans administrative action – standing of near-by landowner and lessee of property to review decisions taken by municipality in terms of town planning scheme – whether internal appeal available in terms of s 62 of Local Government: Municipal Systems Act 32 of 2000 or s 9 of National Building Regulations and Building Standards Act 103 of 1977 – review of decisions taken in terms of town planning scheme and to approve building plans. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: KwaZulu-Natal High Court, Pietermaritzburg (Seegobin J sitting as court of first instance) 1 The appeal is upheld with costs. 2 The order of the court below is set aside and replaced with the following order: (a) The decision of the general manager: planning and development services of the first respondent, purportedly taken in terms of clause 2.6.3 of the Howick town planning scheme, relaxing the side space requirement in respect of erf 848, Howick is set aside. (b) The decision of the first respondent‟s council taken on 30 June 2010 to approve the building plans submitted on behalf of the second respondent for building work on erf 848, Howick is set aside. (c) The respondents are directed, jointly and severally, to pay the applicant‟s costs, including the costs of the application for interim relief. JUDGMENT PLASKET AJA (LEWIS AND PILLAY JJA concurring) [1] This appeal, against a judgment of the KwaZulu-Natal High Court, Pietermaritzburg (Seegobin J) concerns four issues: whether the approval of the second respondent‟s building plans (including two related decisions to relax side space and parking requirements) by the first respondent constitutes administrative action as that term is defined in s 1 of the Promotion of Administrative Justice Act 3 of 2000 (the PAJA); whether the appellants have standing to review the decision to approve the building plans; whether the appellants had available to them an internal appeal which they were required to utilise before taking the decision on review; and whether, if the appellants succeed in clearing all of these hurdles, they have established a basis for the review and setting aside of the decision. The appeal is before this court with the leave of the court below. The facts [2] The building plans in issue in this matter relate to erf 848 situated in the central business district of the town of Howick. This property, zoned „General Commercial‟, had been owned by the first respondent but, because it had become a derelict eye-sore, a decision had been taken to sell it by public tender with a view to it being redeveloped. The second respondent‟s tender was accepted and a deed of sale was duly entered into by the first and second respondents which included certain development requirements. [3] Two of the development requirements warrant mention. First, clause 9.1 of the deed of sale records that the property is vacant land and that it is to be „developed by the Purchaser as a commercial development‟. Secondly, clause 9.5 provides that if the development of the property has not been completed within 18 months of the signing of the deed of sale „the Seller may cancel this agreement and obtain return of the Property, or may assess and levy rates thereon as if the development had been concluded, at its sole discretion‟. [4] The second respondent planned to build a shopping complex on the property and, to this end, entered into an agreement of lease with Basfour 3281 (Pty) Ltd in terms of which the property was let to Basfour for nine years and 11 months at a monthly rental of R115 500. From the affidavit of Mr Ismail Cassimjee, a director of the second respondent, it appears that the lessee‟s plan was to utilise the property as a retail supermarket aimed at lower-income earners. [5] Because of the nature of the proposed supermarket‟s business, it required, in the words of Cassimjee, „more building space and less parking on the property‟ because the target clientele typically „do not usually have vehicles to park outside the retail outlet‟. As a result of this, the second respondent applied for the relaxation of the first respondent‟s usual parking requirements in terms of the Howick Town Planning Scheme (the Howick scheme). It also obtained the consent of the owners of an adjoining property, and the approval of the first respondent, to waive the side space requirement, thus allowing for the building on erf 848 to abut the neighbouring erf. Throughout this process, the first and second respondents were in constant contact, discussing and negotiating as the development progressed. [6] Prior to concluding the lease agreement with Basfour, the second respondent had, in March 2010, submitted its building plans to the first respondent for approval in terms of the National Building Regulations and Building Standards Act 103 of 1977. In May 2010, Mr Jordoa de Jesus, a member of the first appellant and of the second appellant, both of which carried on business in close proximity to erf 848, learned of the proposed development. The first appellant owns two properties situated across the road from erf 848 and the second appellant owns a retail business that operates from those properties. [7] De Jesus was most unhappy that the development was taking place at all and was also alarmed to hear that the second respondent appeared to be receiving favourable treatment from the first respondent. He registered his concerns by way of a letter to Mr Stephen Simpson, the general manager, planning and development services of the first respondent. He also instructed an attorney, counsel and a town planner to oppose the second respondent‟s application for the approval of the building plans. To this end, written representations were made to the first respondent and he and his team attended a meeting of the executive committee of the first respondent‟s council, and of the council itself when the approval of the building plans was considered and passed by the council. [8] When the second respondent had received confirmation that its building plans had been approved, it concluded the lease agreement with Basfour and gave its building contractor the go-ahead to commence building operations. The appellants launched an urgent application in which they sought an interim order interdicting the second respondent from proceeding with the building operations pending a review of the decision to approve the building plans. The application for the interim interdict was dismissed but the application to review the decision was postponed, with the costs reserved. [9] The appellants later amended their notice of motion to include a further ground of review and further relief relating to the demolition of part of the building and the vacating of the property pending the issue of a new certificate of occupancy by the first respondent. [10] The court below dismissed the application with costs without deciding on the merits. It found that: (a) the decision to approve the building plans was not administrative action for purposes of the PAJA because the appellants had not shown that the decision had adversely affected their rights and had a direct, external legal effect, holding that „[o]n this basis alone the application falls to be dismissed‟; (b) as it was unable to find that the primary aim of the appellants in challenging the decision to approve the building plans was to stifle competition, it was not able to find that they lacked standing on this account; and (c) the appellants had available to them an internal appeal against the decision that they challenged, they had failed to utilise it and, on that account, the application had to be dismissed because s 7(2) of the PAJA requires the exhaustion of internal remedies before parties may approach a court to review administrative action. These findings will be dealt with in turn. Administrative action [11] Section 1 of the PAJA defines administrative action, subject to listed exclusions that are not relevant for present purposes, as follows: „”administrative action” means any decision taken, or any failure to take a decision, by – (a) an organ of state, when – (i) exercising a power in terms of the Constitution or a provincial constitution; or (ii) exercising a public power or performing a public function in terms of any legislation; or (b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect . . .‟ [12] It does not appear to be in dispute that a decision, as envisaged by the PAJA,1 was taken by the first respondent, that it is an organ of state as defined in s 239 of the Constitution, that in taking the decision to approve the building plans it exercised a public power and that this power derived from legislation. The only two elements of the definition which are in dispute in this matter are the requirements of an adverse effect on rights and direct, external legal effect. [13] In order to interpret the definition of administrative action in the PAJA one must begin with s 33 of the Constitution.2 Because the PAJA is intended to give effect to the fundamental right to just administrative action, it must be interpreted consistently with s 33 and effect must be given to the purpose of s 33, namely the creation of „a coherent and overarching system for the review of all administrative action‟.3 In Bato Star Fishing (Pty) Ltd v Minister of 1 A decision is defined in s 1 of the PAJA to be „any decision of an administrative nature made . . . under an empowering provision, including a decision relating to . . . (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission‟. 2 Section 33 reads as follows: „(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. (2) Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons. (3) National legislation must be enacted to give effect to these rights, and must- (a) provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal; (b) impose a duty on the state to give effect to the rights in subsections (1) and (2); and (c) promote an efficient administration.‟ 3 Minister of Health & another NO v New Clicks South Africa (Pty) Ltd & others (Treatment Action Campaign & another as amici curiae) 2006 (2) SA 311 (CC) para 118 (Chaskalson CJ) and para 446 (Ngcobo J); Camps Bay Ratepayers’ and Residents’ Association & another v Harrison & another 2011 (4) SA 42 (CC) para 51. Environmental Affairs & others4 O‟Regan J held that because the purpose of the PAJA was to give effect to s 33, „matters relating to the interpretation and application of PAJA will of course be constitutional matters‟. This means that the PAJA should be interpreted generously and purposively and that austere formalism in its interpretation should be avoided.5 [14] In Sokhela & others v MEC for Agriculture and Environmental Affairs (KwaZulu-Natal) & others6 Wallis J summarised the proper approach to be taken when he said: „In my view, the intention of the Constitution was to draw together the disparate threads of our administrative law, and the circumstances in which the power of judicial review was available, under the umbrella of a single, broad concept of administrative action. In accordance with the generous construction to be afforded constitutionally guaranteed rights, conduct that attracted the power of judicial review under our previous dispensation will ordinarily be regarded as constituting administrative action under the present constitutional dispensation. There will of course be exceptions arising from differences in the structure of government and the status of differing levels of government . . . but, in general, it seems to me that, where the power of judicial review was available under our previous dispensation, the courts will be slow to construe that conduct as falling outside the ambit of administrative action under the Constitution and PAJA.‟ [15] In Grey’s Marine Hout Bay (Pty) Ltd & others v Minister of Public Works & others7 Nugent JA made the point that while the precise ambit of administrative action has always been hard to define, „[t]he cumbersome definition of that term in PAJA serves not so much to attribute meaning to the term as to limit its meaning by surrounding it with a palisade of qualifications‟.8 At its core, however, is the „idea of action (a decision) “of an administrative nature” taken by a public body or functionary‟. While indications of what is intended may be derived from the qualifications to the definition, the term „also 4 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs & others 2004 (4) SA 490 (CC) para 25. 5 S v Zuma & others 1995 (2) SA 642 (CC) paras 14-15. 6 Sokhela & others v MEC for Agriculture and Environmental Affairs (KwaZulu-Natal) & others 2010 (5) SA 574 (KZP) para 82. 7 Grey’s Marine Hout Bay (Pty) Ltd & others v Minister of Public Works & others 2005 (6) SA 313 (SCA). 8 Para 21. falls to be construed consistently, wherever possible, with the meaning that has been attributed to administrative action as the term is used in s 33 of the Constitution (from which PAJA originates) so as to avoid constitutional invalidity‟.9 [16] After summarising the import of the more important cases on what constituted administrative action in terms of s 24 of the interim Constitution and s 33 of the final Constitution, he concluded that administrative action is „in general terms, the conduct of the bureaucracy (whoever the bureaucratic functionary might be) in carrying out the daily functions of the State, which necessarily involves the application of policy, usually after its translation into law, with direct and immediate consequences for individuals or groups of individuals‟.10 [17] Nugent JA approached the interpretation of the two elements of the definition with which this case is concerned – that rights must be adversely affected, and that the action must have a direct, external legal effect – on the basis that in ascribing a meaning to them that is consistent with the way in which s 33 was interpreted their literal meaning could not have been intended:11 „For administrative action to be characterised by its effect in particular cases (either beneficial or adverse) seems to me to be paradoxical and also finds no support from the construction that has until now been placed on s 33 of the Constitution. Moreover, that literal construction would be inconsonant with s 3(1), which envisages that administrative action might or might not affect rights adversely. The qualification, particularly when seen in conjunction with the requirement that it must have a “direct and external legal effect”, was probably intended rather to convey that administrative action is action that has the capacity to affect legal rights, the two qualifications in 9 Para 22. 10 Para 24. See too Zondi v MEC for Traditional and Local Government Affairs & others 2005 (3) SA 589 (CC) paras 104-105; Johannesburg Municipal Pension Fund & others v City of Johannesburg & others 2005 (6) SA 273 (W) para 14. 11 Para 23. Nugent JA‟s approach to the interpretation of the requirement of a direct, external legal effect was endorsed by the Constitutional Court in Joseph & others v City of Johannesburg & others 2010 (4) SA 55 (CC) para 27. See too Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro-Tech Systems (Pty) Ltd & another 2011 (1) SA 327 (CC) para 37. tandem serving to emphasise that administrative action impacts directly and immediately on individuals.‟ [18] In my view, the approval of the building plans in this case has such an effect. As De Jesus has stated, the consequence will be an increase in traffic using the road where both the second appellant‟s and first respondent‟s businesses are located, with an increase in congestion. Because of the small amount of parking authorised by the first respondent, it would inevitably follow that the free parking provided by the second appellant to its customers would be used by customers shopping at the second respondent‟s development. [19] It was held by the court below that as the second appellant‟s and the second respondent‟s client bases differed, and the latter‟s client base would be poor people using public transport, these concerns were groundless. I do not agree with this conclusion. The fact that the second respondent‟s client base will, in the court below‟s words, mainly comprise of „the rural poor‟ will mean that transport will be necessary to convey them from their homes to the shopping complex. The vehicles concerned will increase traffic congestion in the area concerned and will need somewhere to park. The second appellant‟s parking area is nearby and convenient. It is probable that attempts will be made to use it and the appellants will have to take steps to protect their right to reserve the parking for their customers. [20] The court below categorised these consequences as trivial inconveniences which were insufficiently serious to qualify as an adverse effect on rights having a direct, external legal effect. In so doing, it approached the issue in a narrow, legalistic manner rather than purposively and in accordance with the interpretation of these requirements favoured by Nugent JA in Grey’s Marine. It erred in this respect. In my view, the decision to approve the building plans had the capacity to affect the rights of the appellants and others living and doing business in the area concerned, and would impact directly on them. That being so, all of the elements of administrative action for purposes of the PAJA are present and the decision to approve the building plans is therefore an administrative action. [21] Furthermore, the appellants, as a landowner and lessee respectively in the immediate vicinity of the development to which the building plans relate have a right to enforce compliance with the Howick scheme. I shall expand on this when I deal with the attack on the appellants‟ standing. Their right to safeguard the amenity of their immediate neighbourhood was potentially affected by the decision that they sought to impugn.12 That brings the decision to approve the second respondent‟s building plans within the definition of administrative action in the PAJA. [22] In conclusion on the administrative action point, it has always been the case that decisions of local authorities to approve building plans are subject to administrative law review and nothing in the structures of government under either the interim Constitution of 1993 or the final Constitution of 1996, the status of local governments or the powers of local governments compels a difference in this regard.13 Both pre- and post-1994 cases have regarded it as trite that administrative law review applies to decisions to either approve or refuse to approve building plans, whether under the common law, the Constitution directly prior to 2000 (when the PAJA came into effect) or under the PAJA thereafter. This is perhaps the reason why Jafta AJ, in Walele v City of Cape Town & others,14 could assert with no resort to authority that „[t]here can be no doubt that when approving building plans, a local authority or its delegate exercises a public power constituting administrative action‟. That puts paid to the first issue. 12 Esterhuyse v Jan Jooste Family Trust & another 1998 (4) SA 241(C) at 253J-254D. 13 Most of the cases cited in this judgment support this proposition. Writing in 1984 Lawrence Baxter in Administrative Law at 173 described the town planning system as a „highly sophisticated example of administrative regulation‟. Cases in which either the approval of building plans or the refusal to approve building plans are challenged inevitably involve the review of decisions of public functionaries or bodies on administrative law grounds. See for instance BEF (Pty) Ltd Cape Town Municipality & others 1983 (2) SA 387 (C) at 400B-D (approval of plans invalid because decision-maker acted in terms of a delegation of power that was not authorised); Paola v Jeeva NO & others 2004 (1) SA 396 (SCA) para 16 and Walele v City of Cape Town & others 2008 (6) SA 129 (CC) para 72 (decision taken in both cases in the absence of jurisdictional facts invalid) See too Camps Bay Residents’ and Ratepayers’ Association & another v Harrison & another (note 3) paras 48-63 (application of the time limit for instituting review proceedings in terms of the PAJA) 14 Walele v City of Cape Town & others 2008 (6) SA 129 (CC) para 27. [23] Even if it is accepted that the decision to approve the second respondent‟s building plans is not administrative action for purposes of the PAJA, that would not mean that the decision is immune from review: it would then be an exercise of public power that is reviewable in terms of s 1(c) of the Constitution, the principle of legality and rationality15 -- and it would be reviewable on essentially the same grounds as those set out in s 6(2) of the PAJA. (In this case, where the attack on the decision is based on a lack of authority and irrationality, the „gateway‟ to review – the PAJA or s 1(c) of the Constitution – will make no difference to the result.16) It follows that the court below erred in finding that the application had to be dismissed on the sole ground that the decision under challenge was not administrative action. Standing [24] In the court below, the second respondent attacked the standing of the appellants to review the decision to approve the building plans on the basis that they did not have a sufficient interest as all they were seeking to do was to improperly suppress trade competition. The court below did not accept this argument but the attack on the appellants‟ standing was persisted in on appeal but on a different basis: that the appellants, not having any rights that had been adversely affected by the decision, had no standing to review the first respondent‟s approval of the second respondent‟s building plans. [25] What this argument sought to do was to conflate the alleged absence of two of the elements of administrative action, as defined in the PAJA, with a lack of standing. This is, in my view, an incorrect approach. Whether one is dealing with administrative action as defined in the PAJA is a separate and distinct enquiry to whether a party has standing to challenge an exercise of 15 See Democratic Alliance v Ethekwini Municipality 2012 (2) SA 151 (SCA) paras 20-21. 16 See for instance, Fedsure Life Assurance Ltd & others v Greater Johannesburg Transitional Metropolitan Council & others 1999 (1) SA 374 (CC) para 56; President of the Republic of South Africa & others v South African Rugby Football Union & others 2000 (1) SA 1 (CC) para 148; Pharmaceutical Manufacturers Association of SA & another: In re ex parte President of the Republic of South Africa & others 2000 (2) SA 674 (CC) paras 82-85; Affordable Medicines Trust & others v Minister of Health & others 2006 (3) SA 247 (CC) paras 74-75; Albutt v Centre for the Study of Violence and Reconciliation & others 2010 (3) SA 293 (CC) paras 49-50. public power. The first enquiry relates to the nature of the public power in issue, while the second relates to the interest that an applicant may have in proceedings, and whether that interest is sufficient to enable it to challenge the exercise of the public power concerned. The first issue is determined by an application of the definition of administrative action in the PAJA to the facts, while the second issue is determined by the application of s 38 of the Constitution.17 [26] This distinction is illustrated by Democratic Alliance & others v Acting National Director of Public Prosecutions & others18 in which this court intimated (without deciding the issue) that a decision to discontinue a prosecution was not an administrative action for purposes of PAJA but held that it was reviewable in terms of s 1(c) of the Constitution19 and found that the appellant, a political party, had standing to review the decision because, inter alia, of its interest „in ensuring that public power is exercised in accordance with constitutional and legal prescripts and that the rule of law is upheld‟.20 [27] Whether a litigant‟s interest is sufficient to clothe him or her with standing involves a consideration of the facts, the statutory scheme involved (in public law disputes, a statutory power is almost inevitably involved) and its purpose: the issue must, in other words, be determined in the light of the factual and legal context.21 17 Section 38 of the Constitution reads: „Anyone listed in this section has the right to approach a competent court, alleging that a right in the Bill of Rights has been infringed or threatened, and the court may grant appropriate relief, including a declaration of rights. The persons who may approach a court are – (a) anyone acting in their own interest; (b) anyone acting on behalf of another person who cannot act in their own name; (c) anyone acting as a member of, or in the interest of, a group or class of persons; (d) anyone acting in the public interest; and (e) an association acting in the interest of its members.‟ 18 Democratic Alliance & others v Acting National Director of Public Prosecutions & others 2012 (3) SA 486 (SCA). 19 Para 27. 20 Para 44. 21 Rinaldo Investments (Pty) Ltd v Giant Concerts CC & others [2012] 3 All SA 57 (SCA) paras 15-16. [28] The source of the power to enact the Howick scheme is the Town Planning Ordinance 27 of 1949 (Natal). Section 40(1) of the Ordinance contains a statement of the general purpose of every structure plan, development plan, town planning scheme or package of plans. That purpose is to achieve „a co-ordinated and harmonious development of the municipal area, or any area or areas situate therein, to which it relates . . . in such a way as will most effectively tend to promote health, safety, order, amenity, convenience and general welfare, as well as efficiency and economy in the process of development and the improvement of communications‟. [29] In Administrator, Transvaal and the Firs Investments (Pty) Ltd v Johannesburg City Council22 Ogilvie Thompson JA said that it was „of the essence of a town-planning scheme that it is conceived in the general interests of the community to which it applies‟. And in BEF (Pty) Ltd v Cape Town Municipality & others23 Grosskopf J stated: „The purposes to be pursued in the preparation of a scheme suggest to me that a scheme is intended to operate, not in the general public interest, but in the interest of the inhabitants of the area covered by the scheme, or at any rate those inhabitants who would be affected by a particular provision. And by "affected" I do not mean damnified in a financial sense. "Health, safety, order, amenity, convenience and general welfare" are not usually measurable in financial terms. Buildings which do not comply with the scheme may have no financial effect on neighbouring properties, or may even enhance their value, but may nevertheless detract from the amenity of the neighbourhood and, if allowed to proliferate, may change the whole character of the area. This is, of course, a purely subjective judgment, but in my view this is the type of value which the ordinance, and schemes created thereunder, are designed to promote and protect. In my view a person is entitled to take up the attitude that he lives in a particular area in which the scheme provides certain amenities which he would like to see maintained. I also consider that he may take appropriate legal steps to ensure that nobody diminishes these amenities unlawfully.‟ 22 Administrator, Transvaal and the Firs Investments (Pty) Ltd v Johannesburg City Council 1971 (1) SA 56 (A) at 70D. 23 BEF (Pty) Ltd v Cape Town Municipality & others 1983 (2) SA 387 (C) at 401B-F. [30] The BEF case is simply a specific application of the broader principle expressed in Patz v Greeene & Co24 which was summarised thus in this court by Stratford JA in Roodepoort-Maraisburg Town Council v Eastern Properties (Pty) Ltd:25 „Where it appears either from a reading of the enactment itself or from that plus a regard to surrounding circumstances that the Legislature has prohibited the doing of an act in the interest of any person or a class of persons, the intervention of the Court can be sought by any such person to enforce the prohibition without proof of special damage.‟ [31] The BEF case was applied by Meer J in PS Booksellers (Pty) Ltd & another v Harrison & others26 when she spoke of „the recognised standing of residents and property owners, in a community or township, to enforce the provisions of zoning schemes‟. And in Pick ‘n Pay Stores Ltd & others v Teazers Comedy and Revue CC & others27 Hussain J held that it was not only owners of property but also lessees of property who may fall within the class of persons whose interests are protected by a town planning scheme. Consequently it is not only owners of property who may enforce the terms of a town planning scheme. Lessees may also have standing to do so. [32] In the BEF case, Grosskopf J raised the question of the limits of standing for purposes of the review of a decision in terms of a town planning scheme. Having held that a person living in an area generally speaking has the right to take legal steps to enforce compliance with the scheme, he proceeded to say that he „would not like to assert dogmatically that such a remedy would be available to all persons living in the area covered by a scheme as large as that of Cape Town‟. He did not have to engage with this issue because the applicant before him was „an immediate neighbour to the property on which the non-conforming garage was built‟.28 24 Patz v Greene & Co 1907 TS 427. 25 Roodepoort-Maraisburg Town Council v Eastern Properties (Pty) Ltd 1933 AD 87 at 96. 26 PS Booksellers (Pty) Ltd & another v Harrison & others 2008 (3) SA 633 (C) para 19. 27 Pick ‘n Pay Stores Ltd & others v Teazers Comedy and Revue CC & others 2000 (3) SA 645 (W) at 654F-H. 28 BEF (Pty) Ltd v Cape Town Municipality & others (note 23) at 401E-F. [33] Prinsloo & Viljoen Eiendomme (Edms) Bpk v Morfou,29 while accepting the principle set out in the BEF case, applied the qualification alluded to by Grosskopf J. There was in this case no evidence as to such fundamental issues as where the house of the respondent (on appeal) was situated in relation to the site on which the bottle store that was the subject of his challenge was built, the distance between the two, the area covered by the town planning scheme and whether the respondent‟s property and the property on which the bottle store stood were in the same use zone.30 In these circumstances, the court held that the respondent had failed to show that, in relation to the property on which the bottle store stood, the restriction he sought to enforce was enacted in the interest of property owners such as him.31 In all of the cases in which a property owner was held to have standing, Eloff JP stated, the „nature of the conditions and the circumstances of the case‟ showed that the scheme had been enacted in the interest of the applicants concerned: in all of these cases the applicants whose standing was recognised were persons who owned land in the vicinity of the respondent‟s land and in each case their properties fell within the same use zone as the respondents.32 [34] In this matter, the nature of the interest involved is the right to enforcement of the Howick scheme. It is this interest that gives the appellants standing. They are part of the class of persons in whose interest the Howick scheme operates for three interlocking reasons: first, they are an owner and a lessee respectively of property within the area covered by the Howick scheme in a modestly sized town; secondly, their properties and business are within the same use zone as the development to which the building plans relate; and thirdly, their properties and business are in such close proximity to the second respondent‟s development, being across a road, that no question of them being too far removed from the second respondent‟s development can arise. These factors distinguish their circumstances from those of the respondent in the Prinsloo & Viljoen Eiendomme case and place them squarely within the 29 Prinsloo & Viljoen Eiendomme (Edms) Bpk v Morfou 1993 (1) SA 668 (T). 30 At 670B-F. 31 At 672D. 32 At 671B-F. principles set out in the BEF case. In addition, the requirements of annexure 7 of the Howick scheme in relation to the procedure for obtaining special consent for specific relaxations, discussed in paragraphs 61 to 65, indicate that it is not only immediate neighbours who may enforce compliance with the scheme, but all those to whom notice must be given before relaxation is permissible, who may object to the relaxation and even appeal against an unfavourable decision. [35] The appellants‟ interest as persons in whose favour the Howick scheme operates is a sufficient interest for purposes of s 38(a) of the Constitution33 to enable them to apply to court to vindicate their fundamental right to just administrative action entrenched in s 33(1) of the Constitution and given effect to by the PAJA. The challenge to their standing consequently has, in my view, no merit and must fail. The exhaustion of internal remedies [36] The court below held that the appellants had available to them an internal appeal which they had not utilised but were required to exhaust before applying to review the decision to approve the building plans. It held that their application had to be dismissed on this basis alone. This duty to exhaust their internal remedy arose, it found, from s 7(2) of the PAJA (which refers to „an administrative action in terms of this Act‟) even though it had held earlier that the decision complained of was not an administrative action for purposes of the PAJA. In these circumstances the court below could not logically have applied s 7(2) of the PAJA and ought to have found that the less stringent common law approach to the exhaustion of internal remedies applied (which ironically is more compatible with the fundamental right of access to court than s 7(2) of the PAJA) and that there was no bar to it 33 That the interest concerned does not have to be a right for purposes of s 38(a) of the Constitution appears clearly from Kruger v President of the Republic of South Africa & others 2009 (1) SA 417 (CC) para 25. reviewing the decision.34 It should then have reviewed the decision in terms of the principle of legality and rationality sourced in s 1(c) of the Constitution. [37] As I have found that the decision was an administrative action for purposes of the PAJA, it is necessary to address the issue of whether the appellants had available to them an internal remedy which they ought to have utilised. [38] Section 7(2) of the PAJA states: „(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of this Act unless any internal remedy provided for in any other law has first been exhausted. (b) Subject to paragraph (c), a court or tribunal must, if it is not satisfied that any internal remedy referred to in paragraph (a) has been exhausted, direct that the person concerned must first exhaust such remedy before instituting proceedings in a court or tribunal for judicial review in terms of this Act. (c) A court or tribunal may, in exceptional circumstances and on application by the person concerned, exempt such person from the obligation to exhaust any internal remedy if the court or tribunal deems it in the interest of justice.‟ [39] No application for exemption from the duty to exhaust internal remedies has been brought by the appellants because their argument is that no such remedy is available to them and so s 7(2) has no application. [40] There appear to be only two possible internal remedies. The first is the internal appeal created by s 62 of the Local Government: Municipal Systems Act 32 of 2000. This court has held, however, in City of Cape Town v Reader & others35 that this appeal is only available to an unsuccessful applicant for planning permission and not to a person who was not party to an application for planning permission, such as a neighbour. The crux of the reasoning, in 34 See for instance, Bindura Town Management Board v Desai & Co 1953 (1) SA 358 (A); Welkom Village Management Board v Leteno 1958 (1) SA 490 (A); Golube v Oosthuizen & another 1955 (3) SA 1 (T); Lawson v Cape Town Municipality 1982 (4) SA 1 (C); Mahlaela v De Beer NO 1986 (4) SA 782 (T); Maluleke v MEC, Health and Welfare, Northern Province 1999 (4) SA 367 (T). See too Baxter (note 13) at 720-723. 35 City of Cape Town v Reader & others 2009 (1) SA 555 (SCA) paras 30-32. the majority judgment of Lewis JA, was that, in Walele’s case,36 the Constitutional Court had held that objectors to the grant of planning permission (such as the appellants in this case) have no right to take part in the approval process, although they may subsequently challenge the validity of the approval after it has been granted, and so a person who was not a party to the application process cannot appeal against the result.37 Section 62 is not available to the appellants. It is not an internal remedy in their hands for purposes of s 7(2) of the PAJA. [41] The second possibility is s 9 of the National Building Regulations and Building Standards Act. This section provides as follows: „(1) Any person who – (a) feels aggrieved by the refusal of a local authority to grant approval referred to in section 7 in respect of the erection of a building; (b) feels aggrieved by any notice of prohibition referred to in section 10; or (c) disputes the interpretation or application by a local authority of any national building regulation or any other building regulation or by-law, may, within the period, in the manner and upon payment of the fees prescribed by regulation, appeal to a review board.‟ [42] Sections 9(1)(a) and (b) are not of application because they apply expressly to persons who have applied unsuccessfully for approval for the erection of a building or have been prohibited from either commencing or continuing with building operations. I turn to consider whether s 9(1)(c) applies to the appellants. [43] It appears to me that there are two reasons why s 9(1)(c) does not apply to the appellants. The first flows from the reasoning in Reader. How can a person appeal against a decision taken in proceedings in which he or she was not a party? The essence of an appeal is a rehearing (whether wide or narrow) by a court or tribunal of second instance.38 Implicit in this is that the 36 Note 14. 37 Para 30. 38 See generally, D R Harms Civil Procedure in the Supreme Court at C1.4. See too Tikly & others v Johannes NO & others 1963 (2) SA 588 (T) at 590G-591A. rehearing is at the instance of an unsuccessful participant in a process. Persons in the position of the appellants cannot be described as unsuccessful participants in the process at first instance and do not even have the right to be notified of the decision. [44] The second reason relates to the subject matter of s 9(1)(c). It affords a right of appeal in respect of a local authority‟s interpretation or application of any of three types of legislative instruments: a national building regulation, any other building regulation and a by-law. A regulation, according to Baxter, is a legislative instrument „used by all classes of administrative authorities, including ministers, to complete the details concerning the practical implementation of the parent legislation, the procedures to be followed and behaviour to be observed by persons to whom the parent legislation applies‟.39 A by-law, he says, is a legislative instrument „used most frequently by municipalities to regulate the conduct of persons falling within their jurisdiction‟.40 He defines a scheme as a legislative instrument „created by local authorities for the purpose of town planning‟,41 thus distinguishing a scheme from a regulation and a by-law. [45] The appellants challenge the validity of the first respondent‟s relaxation of the side space and parking requirements of the Howick scheme. If they are correct, they argue, the approval of the building plans will have to be set aside. The Howick scheme owes its legal pedigree to the Town Planning Ordinance (Natal). In terms of s 44(1), a municipality „may, by resolution, decide to prepare‟ a town planning scheme. In terms of s 44(2), such a resolution „shall not take effect unless and until it is approved by the responsible Member of the Executive Council‟(the MEC). [46] The Ordinance prescribes procedural steps that must be taken before the scheme can be placed before the MEC. Section 49 provides that before it is submitted to the MEC „the draft scheme shall be adopted by resolution of 39 Baxter (note 13) at 199. 40 Baxter (note 13) at 199. 41 Baxter (note 13) at 199. the local authority at a meeting of which special notice indicating the business to be transacted has been given to each member‟. [47] Prior to the MEC authorising the scheme he or she must refer it to the KwaZulu-Natal Planning and Development Commission, for its consideration and report. The commission must give notice to the public of the application for the scheme‟s approval.42 Members of the public may file objections or other representations43 and the application is then set down for a public hearing, where the municipality, objectors and other interested parties are heard.44 After the hearing the commission submits to the MEC a copy of the record of the proceedings, copies of objections and other representations and a report as well as any recommendations it may wish to make.45 [48] After consideration of the commission‟s report and recommendations, the MEC may refuse to approve the scheme or he or she may approve it with or without modifications.46 Finally, when the MEC has approved a scheme he or she „shall notify such approval by proclamation in the Gazette and such scheme shall come into operation upon the publication of such proclamation, and thereafter be referred to as an approved scheme‟. [49] From this analysis of how a scheme comes into operation, it is apparent that, although it is a legislative instrument (on account of its general application), it is not a regulation made by the MEC and it is also not a by-law passed by the municipality. It is a hybrid form of legislation created by resolution in the local sphere of government, and approval and promulgation by proclamation in the provincial sphere of government with a public participation process sandwiched between the two. It is, consequently, not one of the types of legislative instruments referred to in s 9(1)(c) of the National Building Regulations and Building Standards Act. As a result, the internal appeal created by the section is not available to the appellants. (The 42 Ordinance, s 51. 43 Ordinance, s 52. 44 Ordinance, s 53(1). 45 Ordinance, s 53(3). 46 Ordinance, s 54(1). same conclusion was reached by Davis J in Van der Westhuizen & others v Butler & others47 in relation to the equivalent legislation in the Western Cape Province.) [50] In the result, the court below‟s conclusion that the appellants‟ application had to be dismissed because they had not, prior to launching it, exhausted their internal remedies as required by s 7(2) of the PAJA was erroneous. That being so, the merits of the application to review the approval of the second respondent‟s building plans can now be considered, the twin hurdles set up by the PAJA and the standing point having been cleared by the appellants. The merits [51] The validity of the first respondent‟s approval of the second respondent‟s building plans is challenged on the basis that because the decision to relax the Howick scheme‟s parking requirement was unreasonable and its side space requirement was relaxed unlawfully, the approval of the building plans itself was invalid. The parking requirement [52] The first respondent‟s council took a decision to waive compliance with the requirement that the second respondent was to provide 82 parking bays on the premises (one parking place for every 23 square metres) on condition that it contributed R190 000 to a parking fund. It did so in terms of clause 8.5.1 of the Howick scheme, which allows for this in circumstances in which „it is physically impractical to provide on-site parking without disturbing the continuity of the shopping frontage, or where the lot is of such proportions that parking accommodation cannot be reasonably provided‟. 47 Van der Westhuizen & others v Butler & others 2009 (6) SA 174 (C) at 187G-H. [53] This decision was challenged by the appellants on the basis of its unreasonableness on account of irrelevant considerations having been taken into account and it being irrational. [54] The first respondent‟s council had a report from Simpson, the general manager: planning and development services, before it when it took the decision. That report pointed to the empowering provision, clause 8.5.1, spoke of the impossibility of providing parking in terms of the current design and pointed to the economic benefits for Howick of the development proceeding. The council did not take its decision immediately but adjourned to consider the proposal. It also had the appellants‟ representations before it. When it took its decision, it did not do so lightly, according to Simpson, who pointed out that it was taken „after considering input from interested and affected parties and the fact that the proportions of the site meant that the parking accommodation could not reasonably be provided‟. [55] In my view, reliance on clause 8.5.1 was justified and the factors that were taken into account were relevant to the decision. I see nothing untoward about a council deciding that, where the objective circumstances are present to allow it to relax its parking requirements, the nature of the development will not need much parking to be provided, the development will have positive economic consequences for the town, that the parking requirement should be relaxed and the developer be required to contribute to a parking fund that will, in turn, be used to upgrade parking some 230 metres from the development. The decision is neither unreasonable for want of irrelevant considerations having been taken into account nor irrational. The side space requirement [56] Simpson explained how the side space requirement was relaxed. He said that at a fairly early stage in the process various issues were raised with the second respondent, including the need to apply for the relaxation of the side space requirement. A few days later he received a letter from the second respondent‟s architect which attached a letter from the neighbouring land owner „confirming relaxation of the side building line to zero‟. This meant, he said, that „the building could be built up to the property line of Erf 848 on the side adjoining Lot 776‟. [57] He explained later in his answering affidavit that clause 2.6.3 of the Howick scheme „authorises the municipality‟ to relax the side space requirement, that it was relaxed and that because „the municipality‟ had exercised its discretion a special consent application was not required. [58] De Jesus pointed out in his replying affidavit that clause 2.6.3 did not apply on the facts and that Simpson had not said who took the decision but it had clearly been him and he had no authority to take it. In a supplementary affidavit, Simpson stated that he had the delegated authority to take such a decision and he had in fact done so. This brought forth the amended notice of motion in terms of rule 53(4) which sought the setting aside of Simpson‟s decision – in the event of it being found that he took the decision – and the setting aside of the approval of the second respondent‟s building plans. [59] Despite Simpson‟s coyness, in his answering affidavit, as to how and by whom the decision was taken, it must be accepted that he took the decision and that authority to do so had been delegated to him by the municipal council, along with a vast array of other powers. The validity of that delegation of power is not challenged and it is not for us to express a view on the wisdom of a democratically elected and accountable municipal council delegating powers on such a grand scale to one unelected official. The issue that we have to decide is whether Simpson could validly have relaxed the side space requirement in the manner in which he did. [60] As part of the general restrictions in terms of the Howick scheme, clause 2.6.1 provides that, subject to qualifications not relevant for present purposes, „[n]o building shall be erected nearer than 2 metres to any side or rear boundary of the lot on which it is situated‟. Clause 2.6.3 then provides: „The local authority may, in its discretion, permit in any zone any building to be erected closer to any boundary than the distance specified in these clauses if on account of the siting of existing buildings or the shape, size or levels of the lot, the enforcement of these controls will, in the opinion of the local authority, render the development of the lot unreasonably difficult. In considering any application under this clause the local authority shall have due regard to any possible detrimental effect on adjoining properties.‟ [61] Part 8 of the scheme deals with commercial zones. After clause 8.3 has set out, in table form, the buildings and uses that are permitted in commercial zones, clause 8.4 provides for what it terms additional controls. Clause 8.4.3 deals with the relaxation of the side space requirement. It states: „The side space requirement may be relaxed by special consent of the local authority except where it is necessary to provide access to the rear of the building for the purpose [of] parking and loading accommodation or where such buildings adjoin lots zoned for residential purposes.‟ [62] Annexure 7 deals with special consent. It says that a local authority may not consider an application that requires special consent until the applicant has complied with the various requirements listed in sub-paragraphs (i) to (x) of the annexure. These include that: the application for special consent must be in writing „setting out full particulars and reasons, and such application shall be submitted in duplicate‟; the applicant shall give notice of the application in a newspaper or newspapers approved by the council; he or she shall also place a notice „in a prominent position on the property‟; and so on. [63] It was argued that clause 2.6.3 and clause 8.4.3 create different mechanisms for the relaxation of the side space requirement: if the jurisdictional requirements listed in clause 2.6.3 are present, the side space requirement can be relaxed without special consent. [64] I do not agree. Clause 2.6.3 is a general provision while clause 8.4.3 applies specifically to land use controls in commercial zones. In other words, clause 2.6.3 tells one of the circumstances in which a local authority may relax the side space requirement, but it says nothing of how this is to be done. Clause 8.4.3 provides the answer: in commercial zones, the side space requirement may be relaxed with special consent; and annexure 7 sets out how that special consent is to be sought. [65] It is common cause that no special consent was sought or granted. Simpson took the view that it was not required. In this he misconstrued the relevant provisions of the scheme and misconstrued the power that had been delegated to him. He took a decision in the mistaken belief that clause 2.6.3 authorised him to do so. His decision is therefore to be reviewed and set aside in terms of s 6(2)(a)(i) of the PAJA. It can also be said that, by purporting to grant the relaxation in the absence of an application for special consent and compliance with the procedural requirements of annexure 7, he failed to comply with „a mandatory and material procedure . . . prescribed by an empowering provision‟. His decision falls to be set aside on this account in terms of s 6(2)(b) of the PAJA. The approval of the building plans [66] I turn now to the approval of the second respondent‟s building plans. Section 7(1)(a) of the National Building Regulations and Building Standards Act provides that if a local authority, having considered a recommendation of the building control officer concerning an application for the approval of building plans, „is satisfied that the application in question complies with the requirements of this Act and any other applicable law, it shall grant its approval in respect thereof‟. [67] Section 6(1) of the KwaZulu-Natal Planning and Development Act 6 of 2008 states that a town planning scheme „is binding on the municipality, all other persons and organs of state, except in the event of a conflict with the provisions of an integrated development plan that was adopted prior to the scheme or amendment to the scheme‟. This is reinforced by s 56(1) of the Town Planning Ordinance which says that when an approved scheme comes into force „the responsible authority shall observe and enforce the observance of all the provisions of the scheme‟. Section 77 makes it a criminal offence to fail to comply with a notice directing compliance with a scheme. This means that the provisions of a scheme fall within the term „any other applicable law‟ in s 7(1)(a).48 [68] In Walele’s case49 Jafta AJ held that s 7(1) requires a decision-maker to satisfy himself or herself of two things before he or she can validly approve building plans. They are that „there is compliance with the necessary legal requirements‟ and that „none of the disqualifying factors in s 7(1)(b)(ii) will be triggered by the erection of the building concerned‟. The decision-maker‟s ipse dixit that he or she was satisfied will not suffice. The state of satisfaction must rest on objectively reasonable grounds50 and it is a reviewable irregularity for the decision-maker to fail to „properly determine that none of the disqualifying factors would be triggered‟.51 [69] Heher JA, in True Motives 84 (Pty) Ltd v Mahdi & another,52 set out how the test is to be applied as follows: „The refusal of approval under s 7(1)(a) is mandatory not only when the local authority is satisfied that the plans do not comply with the Act and any other applicable law, but also when the local authority remains in doubt. The plans may not be clear enough. For instance, no original ground levels may be shown on the drawings submitted for approval, with the result that the local authority is uncertain as to whether a height restriction imposed with respect to original ground levels is exceeded. In those circumstances the local authority (a) would not be satisfied that the plans breach the applicable law, but equally (b) would not be satisfied that the plans are in accordance with the applicable law. The local authority would, therefore, have to refuse to grant its approval of the plans. Thus, the test imposed by s 7(1)(a) requires the local authority to be positively satisfied that the parameters of the test laid down are met.‟ [70] In this case, given the complete absence of an application for special consent for the relaxation of the side space requirement and no attempt to 48 eThekwini Municipality v Tsogo Sun KwaZulu-Natal (Pty) Ltd 2007 (6) SA 272 (SCA) para 25; Muller NO & others v City of Cape Town 2006 (5) SA 415 (C) para 27. 49 Note 14 para 55. 50 Para 60. 51 Para 63. 52 True Motives 84 (Pty) Ltd v Mahdi & another 2009 (4) SA 153 (SCA) para 19. comply with the procedural requirements of an application for special consent, the first respondent could not have been satisfied that the second respondent‟s application for the approval of its plans complied with the Howick scheme. Nothing in the record indicates that any enquiries were made in this regard or that the issue was even considered. That being so, a jurisdictional fact for the proper exercise of the power was absent and the approval of the building plans must be set aside on the basis of s 6(2)(b) of the PAJA, in that „a mandatory and material . . . condition prescribed by an empowering provision was not complied with‟. The order [71] The following order is made. 1 The appeal is upheld with costs. 2 The order of the court below is set aside and replaced with the following order: (a) The decision of the general manager: planning and development services of the first respondent, purportedly taken in terms of clause 2.6.3 of the Howick town planning scheme, relaxing the side space requirement in respect of erf 848, Howick is set aside. (b) The decision of the first respondent‟s council taken on 30 June 2010 to approve the building plans submitted on behalf of the second respondent for building work on erf 848, Howick is set aside. (c) The respondents are directed, jointly and severally, to pay the applicant‟s costs, including the costs of the application for interim relief. _______________ C Plasket Acting Judge of Appeal HEHER JA: [72] I have had the privilege of reading the judgment of Plasket AJA. My consideration of the matter leads me to a different conclusion. [73] Counsel for the municipality has submitted that it was not open to the appellants to resort to proceedings for judicial review, whether under PAJA or the common law, because they possessed no direct interest in the decision of the council to relax the side space requirement on erf 848,the property of the second respondent. This is a challenge to their locus standi in these proceedings. For the reasons that follow I agree with the submission. [74] In the context of a town planning scheme, the concept of side space is a land use control usually directed to the protection of the amenities of a property adjoining the subject property on that side. The amenities would typically include light, air and spatial factors such as access and private open space, which often, although not invariably, stand to benefit residential usage of the adjoining property. [75] A similar effect can be achieved by providing for set backs of building lines on street frontages. In such a case aesthetics might be added to the amenities and a property located opposite the subject property will probably possess a cognisable interest in the preservation of the building line. (Depending on factors such as the rights attaching to the subject property, its location and the nature and importance of the street, protectable interests may extend to other properties within the area of the scheme.) [76] The relevant provisions of the scheme relating to side space Clause 2 of the scheme provides: „2.6 SIDE AND REAR SPACE 2.6.1 No building shall be erected nearer than 2 metres to any side or rear boundary of the lot on which it is situated provided that no building or portion of a building intended to be used for the purpose of a residential building, medium density housing unit, maisonette, semi-detached house or terraced house shall be erected nearer than 4,5 metres to any such boundary, and provided the minimum side or rear space, as the case may be, shall be increased by 1,5 metres for the full height of the building for every storey above three storeys of the building. 2.6.2 The local authority may authorise the erection of single storey outbuildings on the side and rear boundaries provided the owners of properties contiguous to the affected boundaries have indicated in writing that they would have no objection to such authorization. 2.6.3 The local authority may, in its discretion, permit in any zone any building to be erected closer to any boundary than the distance specified in these clauses if on account of the siting of existing buildings or the shape, size or levels of the lot, the enforcement of these controls will, in the opinion of the local authority, render the development of the lot unreasonably difficult. In considering any application under this clause the local authority shall have due regard to any possible detrimental effect on adjoining properties. 2.6.4 Where access to parking courts is required, the side space of affected lots shall be calculated from the boundaries of such access road.‟ [77] It is significant that in the exercise of the general discretion conferred on the council (by clause 2.6.3) to permit relaxation of building lines, the council is obliged to have regard to the possible detrimental effect on adjoining properties but is not required to have the same regard to the effect on neighbouring properties (such as the first appellant‟s properties are in relation to erf 848). [78] Clause 2.6 contains general provisions applicable throughout the scheme which in accordance with the maxim generalia specialibus non derogant must be read subject to provisions dealing with the same subject matter in relation to a particular case: R v Gwantshu 1931 EDL 31. [79] In this last-mentioned regard special provisions govern the relaxation of side space in commercial zones. This appeal concerns such a case since erf 848 (the subject property) is zoned General Commercial. However, in such a zone „the building line shall be the street line‟ (clause 8.4.1). Thus, unlike property adjacent to a side space, an erf located directly across the street (as are the first appellant‟s erven 11 and 12) does not enjoy the benefit of set back on the property opposite (erf 848). [80] In relation to an application for special consent for the relaxation of side space in a commercial zone the local authority may not grant such consent if a building adjoins a lot zoned for residential purposes (clause 8.4.3).53 A property that is zoned for residential purposes but does not adjoin the 53 The zoning of erf 776 permits, as a primary use, „residential buildings, except on the ground floor‟. It was not contended by the appellants that erf 776 was, therefore, „zoned for residential purposes‟. property on which the side space is sought to be relaxed does not obtain a similar protection if it is a neighbouring property even when simply separated by a road from the property on which the side space is located. [81] In the absence of some particular circumstance – for which no case is made by the appellant – I see no reason to infer that a side space limitation on a property within a commercial zoning is, in the context of the scheme in question, intended to operate for the benefit of a neighbouring property also zoned commercial, but not located adjacent to the side space which is the subject of the limitation. The fact that both properties are sited in a commercial zone is meaningless unless the restricting provision also has a material bearing on both. The locus standi of the first appellant [82] The authorities cited by Eloff JP in Prinsloo & Viljoen Eiendomme (Edms) Bpk v Morfou 1993 (1) SA 668 (T) at 670H-I bear out the conclusion of the learned judge that where the owner of a property situated in the area of a scheme attempts, solely on the strength of the scheme to restrain the owner of another property in the same area from putting it to a use prohibited by the scheme, the test is whether the restrictions on the use sought to be enforced were enacted in the interests of a property owner in the position of the applicant or whether the applicant has suffered loss or damage by reason of the breach of the restriction. [83] The full court in Prinsloo & Viljoen Eiendomme was required to consider the locus standi of the owner of a stand in Kriel. The township was the subject of a town planning scheme. The owner applied to interdict the use of a building on a property in the same township which was zoned „special‟ for the purpose of a hotel but upon which the business of a liquor store was being conducted. The full court held that the owner had no locus standi to enforce the particular provision of the scheme that limited the use of the property to that of a hotel. Eloff JP said: „It appears generally to have been accepted in the cases dealing with the point under discussion that the test to be applied is that laid down in Patz v Greene & Co 1907 TS 427 at 433,subject to the gloss added in Roodepoort-Maraisburg Town Council v Eastern Properties (Pty) Ltd 1933 AD 87 at 96,namely whether the restrictions on use sought to be enforced were enacted in the interest of property owners in the position of the applicants or whether the applicants have suffered loss or damage by reason of the breaches of the restrictions (see CD of Birnam (Suburban) (Pty) Ltd and Others v Falcon Investments Ltd 1973 (3) SA 838 (W) at 844D-H; BEF (Pty) Ltd v Cape Town Municipality and Others 1983 (2) SA 387 (C) at 400D-H; and Randleigh Buildings (Pty) Ltd v Friedman 1963 (3) SA 456 (D) at 458E-H). It will be recalled that I found that the respondent made no averment of any loss or damage to his own property by reason of the construction by the appellant of its bottle store. The simple question remains whether respondent has shown that the restriction on land created relative to stand I was enacted in the interest of property owners such as the respondent. In each of the cases quoted to us in which it was held that an owner of land subject to a town planning scheme may enforce any of its terms applicable to another property, it was found that the nature of the conditions and circumstances of the case showed that the condition and question was made in the interest of persons such as the applicants. In the CD of Birnam case supra the applicants were associated property development companies owning land in the vicinity of the respondent‟s property (see at 840D). Their properties and that of the respondent all fell within one and the same special residential use zone (see at 842A). In breach of the restrictions applicable to it,the respondent set up a quarrying business on its property which was likely to affect the enjoyment by the applicants of their properties adversely. On those facts Margo J held that the applicant had locus standi. In the Randleigh Buildings case Warner AJ was concerned with restrictions laid down in “residential areas”, where an owner of land in those areas sought to restrict another from using it otherwise than for residential purposes. At 459A the Court concluded: “In the present case it seems to me that in preparing the scheme the Amanzimtoti Town Council must have had in mind the interests of land owners in the area set aside for residential purposes and consequently those owners have locus standi to enforce that particular provision.” In the BEF case supra the parties owned adjoining sites. Their properties were subject to a town planning scheme which provided inter alia for open spaces. The applicant in effect tried to enforce compliance with the scheme. After quoting the Patz v Greene & Co case, Grosskopf J said (at 401B-F): “The purposes to be pursued in the preparation of a scheme suggest to me that a scheme is intended to operate, not in the general public interest, but in the interest of the inhabitants of the area covered by the scheme, or at any rate those inhabitants who would be affected by a particular provision.54 And by „affected‟ I do not mean damnified in a financial sense. „Health, safety, order, amenity, convenience and general welfare‟ are not usually measurable in financial terms. Buildings which do not comply with the scheme may have no financial effect on neighbouring properties, or may even enhance their value, but may nevertheless detract from the amenity of the neighbourhood and, if allowed to proliferate, may change the whole character of the area. This is, of course, a purely subjective judgment, but in my view this is the type of value which the ordinance, and schemes created thereunder, are designed to promote and protect. In my view a person is entitled to take up the attitude that he lives in a particular area in which the scheme provides certain amenities which he would like to see maintained. I also consider that he may take appropriate legal steps to ensure that nobody diminishes those amenities unlawfully. I would not like to assert dogmatically that such a remedy would be available to all persons living in the area covered by a scheme as large as that of Cape Town. In the present case, however, the applicant is an immediate neighbour to the property on which the non- conforming garage was built.‟ I think it would be useful to deal further with the question posed by Grosskopf J, whether any owner of a land covered by the Cape Town Town Planning Scheme could enforce any condition applicable to any property in so large an area. I respectfully venture to suggest that it depends on the circumstances and the nature of the condition or restriction. There may be circumstances in which the particular town planning scheme covers a large area with a variety of uses and restrictions and that it is inconceivable that an owner in, say, the southern part of the area may enforce a condition of a parochial nature applicable to the northern part of the scheme. . . . I do not think that the respondent has come near to showing that the restriction on land which was imposed on the appellant‟s property was made in the interests of properties such as his.‟ [84] I respectfully agree with the approach taken by the learned judge. A town planning scheme frequently operates over areas markedly different in location and intrinsic characteristics. It necessarily ranges over different uses and land use controls many of which cannot be said to affect the overall operation of the scheme. Not every control is of even indirect benefit to all land in the scheme or all owners. The whole scheme is no doubt promulgated in the general public interest of all owners of land in the area of the scheme in 54 The emphasis is mine. the undefined senses of harmonious development, health, order, general welfare etc which are the underlying purposes of such schemes. Such owners may be regarded as a „class‟ within the public as that term is used in the authorities. But the particular or direct interest of any owner in any provision of the scheme must depend upon the reach of that provision in the context of the scheme, and the nature of the adverse effects, if any, resulting from a breach of the provision. Mere proximity without regard to the substance of the restriction cannot be a sufficient determinant. [85] In its application to the court a quo the present first appellant did not allege, or set out any grounds upon which it can be found, that the side space provision in question operates for the benefit of its property; indeed, as I have attempted to show, such an inference runs counter to the context of the side space provisions in the scheme. In clauses 8.4.3 and 2.6.3 it is not propinquity which is important, but rather the adjacent location of the side space to a residential erf. The first appellant also made no averment of actual or potential loss or damage to its property by reason of the relaxation of the provision (even in the wider sense ascribed to the concept of „adverse effects‟ by Grosskopf J in BEF (Pty) Ltd v Cape Town Municipality 1983 (2) SA 387 (C) at 401B-F). Neither the nature of the condition nor the circumstances of the case conduce to a finding that the appellant‟s property benefits by the maintenance of the side space restriction on the first respondent‟s erf or suffers by its relaxation. [86] I conclude as a result that the first appellant possessed no cognisable legal interest in such illegality as the second respondent may have perpetrated in relation to the relaxation of the side space condition on erf 848 and that the first appellant accordingly obtained no locus standi to impugn its decision. The second appellant is merely the operator of the Spar supermarket on the properties of the first appellant and can have no better rights than the first appellant has. [87] Although it is unnecessary to decide the question finally, if my conclusion that only the owner of the adjoining erf 776 has a direct interest in the maintenance and enforcement of the side space provision is correct, that conclusion leads logically to a finding that the council‟s failure to follow the procedures for special consent in Annexure 7 was not unlawful. This is because the only person with an interest had furnished his consent for the relaxation before the council made its decision. Public advertisement and the opportunity to object, for which Annexure 7 provides, were therefore superfluous and unnecessary. [88] Having, for the reasons explained by Plasket AJA, failed to prove a sustainable ground of review in relation to the parking provision over erf 848, the appellants should have been non-suited. [89] I would dismiss the appeal with costs. _________________ J A HEHER JUDGE OF APPEAL THERON JA [90] I have had the benefit of reading the judgments prepared by Plasket AJA and Heher JA. I agree with both Plasket AJA and Heher JA that the appellants have failed to prove any grounds upon which this court can set aside the first respondent‟s decision to waive compliance with the parking requirement. I agree with Heher JA that the appellants do not have standing to challenge first respondent‟s decision regarding the side space requirement. I would add the following brief comments. [91] That Heher JA is correct is underscored by the fact that the appellants did not seek an order that the building be demolished. The relief initially sought by the appellants in respect of the side space requirement was that the second respondent be ordered to demolish so much of the building that is situated closer than two metres to the rear or side boundaries of the property. It is so that the second respondent has undertaken „to restore the property or alter it in accordance with any alteration of the … approvals on review‟. This court has not given any directions as to the restoration or alteration of the building. The abandonment of any relief against the second respondent raises the question about the purpose of this appeal and might have rendered the entire process academic.55 [92] The decision of the first respondent is an administrative act, which, until set aside by a court in review proceedings, exists in fact and is capable of having legally valid consequences.56 One of the consequences thereof is that it gave the second respondent the right to proceed with building operations in terms of the approved building plans, including the parking and side space relaxations. The second respondent acted within the law and in accordance with its rights, and within the terms of what it perceived to be a valid decision taken by the first respondent. The administrative decision that the appellants now seek to review and set aside have already been acted upon by the second respondent.57 For as long as the decision of the first respondent stood, the second respondent, in continuing with the building operations, was acting lawfully.58 In my view, and having regard to the factual context in which the decision was made, it would be unjust to grant the relief sought. [93] I would dismiss the appeal, with costs. _____________ L THERON JUDGE OF APPEAL 55 West Coast Rock Lobster Association & others v Minister of Environmental Affairs and Tourism & others [2011] 1 All SA 487 (SCA) para 45. Radio Pretoria v Chairman, Independent Communications Authority of South Africa & another 2005 (1) SA 47 (SCA). 55 Oudekraal Estates (Pty) Ltd v City of Cape Town & Others 2004 (6) SA 222 (SCA) para 26. 55 Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province & others 2008 (2) SA 481 (SCA) para 23; Camps Bay Ratepayers and Residents Association v Harrison [2010] 2 All SA 519 (SCA) para 59. 55 Heritage Hill Home Owners Association v Shoprite Checkers (Pty) Ltd & others [2012] ZASCA 65 para 26. APPEARANCES: For appellant : A Rall SC Instructed by: Christopher Richard Lee Attorney, Howick; McIntyre & Van der Post, Bloemfontein For the first respondent: R M van Rooyen Instructed by: PKX Incorporated, Pietermaritzburg; Lovius Block, Bloemfontein For the second respondent: A J Dickson SC Instructed by: Jasat & Jasat, Pietermaritzburg; Lovius Block, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 29 November 2012 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. * * * JDJ PROPERTIES V UMNGENI LOCAL MUNICIPALITY The Supreme Court of Appeal (SCA) today held that the decisions of the Umngeni Local Municipality (the municipality) to relax the side space requirement of the Howick Town Planning Scheme (the scheme) and to approve the building plans in favour of Triumph Brokers (Pty) Ltd were unlawful. It upheld an appeal against an order of the KwaZulu- Natal High Court dismissing a review application by JDJ Properties CC (the first appellant) and Double Diamond CC (the second appellant). The municipality had sold a certain immovable property to Triumph Brokers on which the latter intended to build a shopping complex and lease it to Basfour 3281 (Pty) Ltd. Subsequent to the sale agreement, the council approved Triumph Brokers’ building plans and the general manager: planning and development services relaxed the side space requirement of the scheme. The first and second appellants, who were the owner and lessee of a property adjacent to Triumph Brokers’ property respectively, instituted an application in the high court in terms of the provisions of the Promotion of Administrative Justice Act 3 of 2000 (the PAJA) to review and set aside the decisions. The bases for the order sought were that the side space requirement was relaxed unlawfully and that the approval of the building plans itself was invalid. The high court had dismissed the application on the basis that the decision to approve the building plans did not constitute administrative action as it did not adversely affect the appellants’ rights and did not have a direct, external legal effect as required by the PAJA, and that the appellants had failed to exhaust internal remedies available to them. The appellants then appealed to the SCA against that order. Before the SCA there were four questions. The first was whether the decision to approve the building plans constituted administrative action. The court, with reference to the facts, held that the decision had the capacity to affect the rights of the appellants and others living and doing business in the area concerned, and would directly impact on them. The court further held that the appellants, being the landowner and lessee respectively in the immediate vicinity of the development, had the right to enforce compliance with the scheme. Even if the decision did not constitute administrative action, the court said, it was reviewable under the principle of legality. The second question was whether the appellants had legal standing to challenge the decision. The SCA held that the scheme operated in the interest of the appellants and that their right to enforce compliance therewith gave them standing. The third question was whether the appellants had failed to exhaust internal remedies. The SCA stated there were two possible remedies but held that the appellants could not enforce those remedies as they were not available to them. The fourth question related to the merits and in that respect the SCA made the order referred to above. In making that order, the SCA held that Triumph Brokers had failed to seek special consent as required by the scheme before the decision to relax the side space requirement was made and that the decision maker had misconstrued the power delegated to him. With regard to the decision to approve the building plans, the court held that a jurisdictional fact for the proper exercise of the power, namely compliance with the scheme by Triumph Brokers’ application, was absent. The decisions, the SCA held, had to be set aside.

230

non-electoral

2018

` THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 231/2017 In the matter between: SENTE JOSEPH THAKELI FIRST APPELLANT SAMUEL ZAMBUK MARUMO SECOND APPELLANT and THE STATE RESPONDENT Neutral citation: Thakeli v S (231/2017) [2018] ZASCA 47 (28 March 2018) Coram: Lewis, Seriti, Saldulker and Van der Merwe JJA and Makgoka AJA Heard: 15 February 2018 Delivered: 28 March 2018 Summary: Criminal Law: appellants indicted for murder – charge sheet referred to s 51(2) of the Criminal Law Amendment Act 105 of 1997 (the Act) – trial court amended charge sheet, after appellants testified in their defence, by deleting subsection (2), in terms of s 86 of the Criminal Procedure Act 51 of 1977 – no opportunity afforded to appellants to address the court in respect of amendment – appellants convicted and sentenced by the trial court in terms of s 51(1) of the Act – sentence set aside – appellants ultimately sentenced to 15 years' imprisonment in terms of s 51(2) of the Act. _____________________________________________________________ ORDER ______________________________________________________________ On appeal from: Free State Division of the High Court, Bloemfontein (Mocumie J and Chesiwe AJ sitting as court of appeal): 1 The appeal against the sentence imposed on both appellants is upheld. 2 The sentence imposed by the trial court on the appellants is set aside and substituted as follows: ‘Accused 1 and accused 4 are each sentenced to 15 years' imprisonment.' ______________________________________________________________ JUDGMENT ______________________________________________________________ Saldulker JA (Lewis, Seriti and Van der Merwe JJA and Makgoka AJA concurring): [1] The appellants, Mr Sente Joseph Thakeli (first appellant) and Mr Samuel Zambuk Marumo (second appellant), were indicted in the regional court, Welkom, on a charge of murder, subject to the provisions of s 51(2) of the Criminal Law Amendment Act 105 of 1997. Both appellants were convicted on 23 August 2011 on the murder count and sentenced to 28 years' imprisonment in terms of s 51(1) of the Act, and declared unfit to possess a firearm. Their application for leave to appeal against conviction and sentence in the regional court was unsuccessful. However, leave to appeal was granted on petition against their conviction and sentence to the full bench of the Free State High Court. On 23 March 2016, their appeal against both conviction and entence was dismissed by the court a quo (Chesiwe AJ, Mocumie J (concurring)). This appeal, against sentence only, is with special leave of this court. [2] The crisp issue is whether the trial court misdirected itself by amending the charge sheet after the appellants had pleaded and testified to a charge of murder read with the provisions of s 51(2) of the Act, and then convicted them in terms s 51(1), thereby increasing the sentence faced by the appellants. [3] Section 51(1) of the Act, read with Part 1 of Schedule 2, requires the imposition of a minimum sentence of life imprisonment for murder when it is planned or premeditated, unless there are substantial and compelling factors that justify the imposition of a lesser sentence. In terms of s 51(2) of the Act, read with Part II of Schedule 2, the minimum sentence to be imposed for murder on a first offender following a conviction is 15 years’ imprisonment unless there are substantial and compelling circumstances. I turn to consider briefly the facts giving rise to the appeal. [4] At the commencement of the trial in the regional court, the appellants pleaded not guilty and tendered no plea explanation. Several witnesses testified for the State and identified the appellants as the attackers who confronted the unarmed deceased at his home, brutally stabbing him with a pitchfork and knives. As a result of this attack the deceased succumbed to his injuries. The appellants denied being involved in the deceased’s murder. At the close of the defences’ case an application to re-open the State’s case was allowed. Thereafter two witnesses called by the trial court testified. At the end of their testimony the trial court amended the charge sheet in terms of s 86(4) of the Criminal Procedure Act 51 of 1977, by deleting subsection (2) of s 51 of the Act, stating that the amendment would not prejudice the appellants. The charge was then vague – reference must be made to one of the two subsections so that there is clarity as to which sentence is to be imposed. [5] Thereafter the trial court convicted the appellants of murder in terms of s 51(1) read with Part 1 of Schedule 2, on the basis of the amended charge sheet, carrying with it the sentence of life imprisonment. However, the trial court found that there were substantial and compelling circumstances justifying a departure from the prescribed minimum sentence of life imprisonment and sentenced the appellants to 28 years' imprisonment each. On appeal the court a quo held that the amendment effected by the trial court was akin to curing a ‘typing error’ which did not go to the substance of the charge nor the sentencing regime. [6] This court has held in numerous decisions that an accused person must be apprised from the outset what charge he or she has to meet, so that he or she not only appreciates properly and in good time what the charges are that he or she is facing but also the consequences. In S v Makatu,1 Lewis JA put it succinctly:2 ‘. . . [A]n accused faced with life imprisonment – the most serious sentence that can be imposed – must from the outset know what the implications and consequences of the charge are. Such knowledge inevitably dictates decisions made by an accused, such as whether to conduct his or her own defence; whether to apply for legal aid; whether to testify; what witnesses to call and any other factor that may affect his or her right to a fair trial. If during the course of a trial the State wishes to amend the indictment it may apply to do so, subject to the usual rules in relation to prejudice.' See also S v Ndlovu 2003 (1) SACR 331 (SCA).3 [7] The effect of the amendment of the charge sheet brought about by the magistrate was to expose the appellants to the prescribed minimum sentence of life imprisonment as opposed to a prescribed minimum sentence of 15 years' imprisonment. This was done after all the evidence had been led and without affording the appellants any opportunity to address the court on the question of prejudice, and whether the amendment should be effected. The failure to afford the appellants a full and proper opportunity to address this question, in my view constituted a fundamental irregularity that infringed the fair trial rights of the appellants, and destroyed the validity of the amendment. It follows that it is not possible to say with certainty that the appellants suffered 1 S v Makatu 2006 (2) SACR 582 (SCA); [2007] All SA 470 (SCA). 2 Paragraph 7. 3 Mpati JA in S v Ndlovu 2003 (1) SACR 331 (SCA), stated at para 12 that ‘… it is implicit in these observations that where the State intends to rely upon the sentencing regime created by the Act a fair trial will generally demand that its intention be pertinently bought to the attention of the accused at the outset of the trial, if not in the charge sheet then in some other form, so that the accused is placed in a position to properly appreciate in good time the charge that he faces as well as its possible consequences. Whether, or in what circumstances, it might suffice if it is brought to the attention of the accused only during the course of the trial is not necessary to decide in the present case. It is sufficient to say that what will at least be required is that the accused be given sufficient notice of the State’s intention to enable him to conduct his defence properly’. no prejudice as a result of the amendment and that they should have been sentenced in terms of s 51(2) of the Act. Had the appellants known that they were being charged with murder that was premeditated, or that they had a common purpose in killing the deceased, they may well have conducted their defence differently. [8] This matter is thus to be distinguished from those in which it was held that an irregularity did not vitiate the proceedings, such as S v Kolea,4 where it was found that the accused had known at the outset what charges they faced. For these reasons the court a quo erred in dismissing the appeal. [9] Accordingly, the appeal against sentence must succeed. Consequently the appellants ought to have been sentenced to 15 years’ imprisonment in terms of s 51(2) unless there were substantial and compelling factors justifying a deviation. I turn to consider whether there are any. The personal circumstances of both appellants are similar. Both are young, first offenders and have spent at least two and half years incarcerated. These factors are to be taken into account in determining whether a sentence of 15 years is appropriate. The court must also take into account the aggravating factors which are significant. The deceased died of eight stab wounds, four of which penetrated the heart and the chest. This was a vicious and cruel attack perpetrated with knives and a garden fork on an unarmed man: that it was a heinous attack is apparent from the nature of the injuries and wounds. Cumulatively the aggravating factors far outweigh the mitigating factors. There is nothing exceptional about the personal circumstances of either of the appellants. In S v Vilakazi 2009 (1) SACR 552 (SCA) para 58, Nugent JA stated as follows: ‘[i]n cases of serious crime the personal circumstances of the offender, by themselves will necessarily recede into the background'. In my view, taking into account all of these factors, there are no substantial and compelling circumstances present justifying a deviation from the prescribed sentence of 15 years' imprisonment. It is a salutary sentence in the circumstances of this case for both appellants. 4 S v Kolea [2012] ZASCA 199; 2013 (1) SACR 409 (SCA). [9] Accordingly, the appeal is upheld. The following order is made: 1 The appeal against the sentence imposed on both appellants is upheld. 2 The sentence imposed by the trial court on the appellants is set aside and substituted as follows: ‘Accused 1 and accused 4 are each sentenced to 15 years' imprisonment.' ______________________ H K Saldulker Judge of Appeal APPEARANCES: For the Appellant: S Kruger Instructed by: Bloemfontein Justice Centre For the Respondent: E Liebenberg Instructed by: Director of Public Prosecutions, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 28 March 2018 STATUS Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Thakeli v S (231/2017) [2018] ZASCA 47 (28 March 2018) ___________________________________________________________________________ The SCA today set aside a decision of the Free State Division of the High Court and upheld the appeal against sentence imposed on the appellants. Both were indicted in the regional court, Welkom on a charge of murder, subject to the provisions of s 51(2) of the Criminal Law Amendment Act 105 of 1997(the Act) and convicted on the murder count and sentenced to 28 years' imprisonment in terms of s 51(1) of the Act, and declared unfit to possess a firearm. At the close of the defences’ case an application to re-open the State’s case was allowed. Thereafter two witnesses called by the trial court testified. At the end of their testimony the trial court amended the charge sheet in terms of s 86(4) of the Criminal Procedure Act 51 of 1977, by deleting subsection (2) of s 51 of the Act, and stating that the amendment would not prejudice the appellants. Thereafter the appellants were convicted of murder in terms of s51(1) read with Part 1 of Schedule 2 on the basis of the amended charge sheet and sentenced to 28 years’ imprisonment. The SCA held that the effect of the amendment of the charge sheet was to expose the appellants to life imprisonment as opposed to the prescribed sentence of 15 years’ imprisonment. This was done after all the evidence had been led and without affording the appellants an opportunity to address the court on the question of prejudice, and whether the amendment should be effected. The SCA held that an accused person must be apprised from the outset what charge he or she had to meet, so that he or she not only appreciated properly and in good time what the charges were that he or she was facing but also the consequences. The SCA held that the failure to afford the appellants a full and proper opportunity to address the question of prejudice, and whether the amendment should be effected, constituted a fundamental irregularity that infringed the fair trial rights of the appellants, and destroyed the validity of the amendment. Had the appellants known that they were being charged with murder that was premeditated, or that they had a common purpose in killing the deceased, they may well have conducted their defence differently. This matter was thus to be distinguished from those in which it was held that an irregularity did not vitiate the proceedings. The SCA held that the appellants should have been sentenced in terms of s 51(2) of the Act. The SCA held further, that cumulatively the aggravating factors far outweighed the mitigating factors. There were no substantial and compelling circumstances justifying a deviation from the prescribed sentence of 15 years’ imprisonment. Both the appellants were sentenced to 15 years imprisonment in terms of s 51(2) of the Act.

3082

non-electoral

2015

` THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 459/15 In the matter between: AVHAPFANI DANIEL KHAVHADI FIRST APPELLANT RUDZANI ELISAH SIGOVHO SECOND APPELLANT MASHUDU JOYCE MUDAU THIRD APPELLANT and THE STATE RESPONDENT Neutral citation: Khavhadi v S (459/15) [2015] ZASCA 191 (30 November 2015) Coram: Navsa, Lewis, Pillay, Mbha and Zondi JJA Heard: 20 November 2015 Delivered: 30 November 2015 Summary: Criminal law – evidence of death of deceased lacking – single witness not credible and satisfactory – conviction overturned. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from Limpopo Local Division of the High Court, Thohoyandou (Makgoba AJ sitting as court of first instance): The appeal is upheld and the appellants’ convictions and related sentences are set aside. JUDGMENT Zondi JA (Navsa, Lewis, Pillay and Mbha JJA concurring): [1] The three appellants were convicted in the Limpopo Local Division of the High Court, Thohoyandou (Makgoba AJ) of the murder of four-year old Tshilelo Sigovho (Tshilelo). They were each sentenced to a period of life imprisonment. They appeal against their convictions. The first and third appellants were granted leave to appeal by this court. The second appellant was granted leave to appeal by the court below. Tshilelo is the daughter of the second appellant, Rudzani Elisah Sigovho (Rudzani). [2] In a nutshell, the State’s case, in the court below, was that after Tshilelo had been left in the care of a friend and neighbour, namely, the principal witness on behalf of the State, Ms Azwinndini Alice Maphosa (Maphosa), Rudzani arrived during the night of 14 September 1999 together with the other two appellants and took her daughter away in order to present her as a sacrifice in a ritual murder to appease the gods Rudzani believed in. It was alleged that Tshilelo had to be killed in order to harvest her body- parts for presentation to the gods as part of the appeasement process. It is common cause that Rudzani was in training to become a traditional healer. It is also undisputed that the third appellant was a traditional healer and was training the second appellant to be one as well. [3] Rudzani and the other appellants were charged with the murder of Tshilelo after the latter’s disappearance and after the release of two other suspects, which included Maphosa. The deduction that the appellants had conspired to kill Tshilelo in order to harvest her body-parts to appease the gods was based on Maphosa’s assertion that the first appellant, Avhapfani Daniel Khavhadi (Khavadi), who is also her common-law husband, had told her, on the night prior to Tshilelo being spirited away, that Rudzani’s gods required human body-parts in order to be appeased. [4] There was no witness to the murder that had allegedly been committed by the three appellants. Approximately a week after Tshilelo’s disappearance, skeletal remains were found in the vicinity of where she and her mother resided. At the commencement of proceedings in the court below a post-mortem report was admitted by consent of the appellants. They also appear to have admitted that the skeletal remains were that of Tshilelo. It is necessary to record that all that was found was a skull and six ribs. [5] The doctor who completed the post-mortem report, recorded that the child had been found on 14 September 1999. That date is at odds with the evidence of a policeman tendered in support of the State’s case that he had been to the place where the remains had been found on 22 September 1999. From the photographs of the skeletal remains it appears, at least superficially, that the body had been in a prolonged and advanced stage of decomposition. The post-mortem report records that the sex of the person whose remains were found was undetermined but that it was ‘probably male’. This conclusion was based on the doctor’s observations of the clothing that had been found with the skeletal remains. The time of death was estimated by the doctor to be ‘four weeks or longer’ prior to the date on which the post-mortem examination was conducted. From the skeletal remains it was deduced that it was the remains of a child who had been between four and seven-years old. The cause of death was ‘undetermined’. DNA testing, which would have been conclusive as to the sex of the child, was not conducted. [6] In light of the very unsatisfactory conclusions recorded in the post-mortem report, the admission about the identity of the deceased person whose skeletal remains were found is difficult to comprehend. [7] The very first problem for the State is that in order to sustain a conviction for murder it had to prove that the person the appellants are accused of having murdered had in fact been killed. Even in the face of the apparently uninformed admissions made by the appellants there must be grave doubt about whether the death of Tshilelo had been proved. Put differently, there has to be substantial doubt about whether the skeletal remains were those of Tshilelo. An essential element of the crime of murder would thus not have been proved.1 [8] Even if the State were somehow to overcome the very fundamental hurdle referred to in the preceding paragraph, the further difficulty it faces is that the evidence of Maphosa, who was the only person who implicated the three appellants, was wholly unreliable. [9] It is common cause that at a stage when the community was first made aware of Tshilelo’s disappearance and when Rudzani, at least superficially, appeared frantic and sought the assistance of a traditional healer and arranged for community leaders to conduct a search of the area, Maphosa went along with her and supported those efforts. It was only when community suspicion fell on Maphosa that she publicly accused Rudzani of being involved in Tshilelo’s disappearance. Her evidence in this regard is noteworthy: ‘As people had gathered at my kraal I realised that there was a number of school children and anything can happen. It is then that I told this group of people that people are just wasting time by searching my kraal because the child was taken from my kraal by accused 1 and 2.’ It is clear from this testimony that fear for her own safety prompted the accusations she levelled at two of the appellants. At that stage there was no mention of the third appellant. It must also be borne in mind that she was among the first suspects to be arrested and must have been keen to avoid being prosecuted. [10] Furthermore, a person who was also taken into custody at about the same time that Maphosa was arrested as a suspect, Mr Sonnyboy Netshitungulu, testified that he had seen Tshilelo crying on the night on which she was allegedly spirited away by the three appellants, saying that she was on her way to Maphosa’s house and that he then saw her make her way in that direction. Netshitungulu testified in support of the State’s case. However, his testimony, far from incriminating the appellants, casts a shadow of suspicion on Maphosa. [11] The court below, even though reminding itself that it was dealing with the evidence of a single witness in the form of Maphosa and that it should be cautious in its approach, did not consider the negative aspects referred to in the preceding two paragraphs. There is no formula to apply when it comes to the consideration of the credibility of a single witness. It is, however, a well-established judicial practice that the evidence of a single witness should be approached with caution, and his or her merits and demerits as a witness should be weighed against factors which militate against his 1 See C R Snyman Criminal Law, 5 ed (2008) at 447 et seq. or her credibility.2 [12] The court below erred in unreservedly accepting the evidence of Maphosa. She was far from a satisfactory witness. It is clear that the State failed to prove the appellants’ guilt beyond a reasonable doubt. For the reasons set out above the convictions and sentences are liable to be set aside. [13] The appeal is upheld and the appellants’ convictions and related sentences are set aside. _________________ D H Zondi Judge of Appeal 2 See E Du Toit et al Commentary on the Criminal Procedure Act, Service Issue 54 January 2015, at 24-1 to 24-2C where the learned authors comment on section 208 of the Criminal Procedure Act 51 of 1977 which provides that a conviction may follow on the evidence of a single witness and see the authorities there cited. Appearances For the Appellant: A L Thomu (Attorney) Instructed by: Thohoyandou Justice Centre, Thohoyandou c/o Bloemfontein Justice Centre , Bloemfontein For the Respondent: R J Makhera Instructed by: Director of Public Prosecutions, Thohoyandou Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 30 November 2015 Status: Immediate Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. Khavhadi & others v The State (459/15) [2015] ZASCA 191 (30 November 2015) Today the Supreme Court of Appeal (SCA) upheld an appeal from the Limpopo Local Division of the High Court, Thohoyandou and set aside the convictions and sentences of life imprisonment imposed on each of the three appellants. The issue before the SCA was whether the evidence on which the appellants were convicted was sufficient. The appellants were charged with murder of a four year old child who disappeared on 14 September 1999. The State’s case was that after the child had been left in the care of her mother’s friend and neighbour, the main State witness, Ms Alice Maphosa, the second appellant arrived during the night of 14 September 1999, together with the other two appellants and took her away in order to present her as a sacrifice in a ritual murder to appease the gods the second appellant believed in. It was alleged that the child had to be killed in order to harvest her body parts for presentation to the gods as part of the appeasement process. The second appellant was in training to become a traditional healer and the third appellant was a traditional healer and was training the second appellant to be one as well. The post-mortem examination conducted on the skeletal remains – consisting of a skull and six ribs - which were found in the vicinity of where the child and the second appellant resided could not establish the cause of death and the sex of the victim. No DNA testing was conducted. There was a substantial doubt about whether the skeletal remains were those of the child. An essential element of the crime of murder was thus not proved. Maphosa who mentioned the appellants and suspects was wholly unreliable. The fear for her own safety prompted the accusations she levelled at the two of the appellants. The SCA held that the court below erred in unreservedly accepting the evidence of Maphosa. She was far from a satisfactory witness. The SCA concluded that the guilt of the appellants had not been proved beyond reasonable doubt and for that reason upheld the appeal.

4104

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 600/2022 In the matter between: EMALAHLENI LOCAL MUNICIPALITY APPELLANT and LEHLAKA PROPERTY DEVELOPMENT (PTY) LTD RESPONDENT Neutral citation: Emalahleni Local Municipality v Lehlaka Property Development (Pty) Ltd (600/2022) [2023] ZASCA 138 (25 October 2023) Coram: MOCUMIE, NICHOLLS, HUGHES and WEINER JJA and SIWENDU AJA Heard: 18 May 2023 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email. Publication was made on the Supreme Court of Appeal website and release to SAFLII. The date and time for hand-down is deemed to be at 11h00 on 25 October 2023. Summary: Civil law and procedure – practice – joinder – no public law relationship between private landowner and unlawful occupiers – notion of a ‘special cluster of relationships’ did not translate into imposing obligations on private individuals, nor did it convert a contractual relationship into an administrative one – no direct, substantial and legal interest in dispute where no contractual privity – non-joinder point in limine dismissed. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Mpumalanga Division of the High Court, Middelburg (Legodi JP, sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Hughes JA (Mocumie JA concurring): [1] This is an appeal against the judgment of the Mpumalanga Division of the High Court, Middelburg (the high court) for declaratory and interdictory relief sought by the respondent (applicant in the court a quo), Lehlaka Property Development (Pty) Ltd (Lehlaka), against the appellant (respondent in the court a quo), Emalahleni Local Municipality (the Municipality). Legodi JP granted the orders in the court a quo, which I set out further below. The Municipality sought leave to appeal the orders, which was refused by the court a quo. The appeal is with leave of this Court. [2] At the centre of this appeal is a mining village, Rietspruit. This village was formed by the Rietspruit Colliery Mine (the mine), situated in Witbank from 1978. The village and its infrastructure catered for the miners who worked in the mine. The mine supplied the village with electricity, which was initially obtained from Eskom directly, and later from the Municipality. [3] During 2002, the mine having exhausted all the resources from the land, ceased mining operations. At the cessation of the mining operations, and in terms of the mines’ responsibilities and obligations in accordance with the Mineral and Petroleum Resources Development Act 28 of 2002 (MRPDA),1 the mine tasked Lehlaka, a property development company, to ‘hand-over’ the mining village to the community. To this end, in 2004, the Municipality, through a proclamation of the village, established a formal municipal township, Rietspruit Township, commonly known as Rietspruit village. [4] Thereafter, Lehlaka took ownership of the various properties in Rietspruit village. It complied with its duties in terms of the ‘hand-over’; distributed and transferred most of the village property, save for the eight properties which remained under Lehlaka’s ownership. [5] During the course of Lehlaka’s ownership of the eight properties, and before the township was proclaimed, in terms of the Emalahleni Local Municipality Electricity By-laws (the Electricity By-laws),2 Lehlaka, as an owner, was responsible for the payment of all municipal services. After the township was proclaimed, the responsibility for the payment of the municipal services fell upon the new owners in respect of their individual properties, but for the eight properties which were owned by Lehlaka. For some years, these properties remained unoccupied and were as a result invaded by unlawful occupiers. Lehlaka, as an owner, and in terms of its consumer agreement with the Municipality, in accordance with the Electricity By-laws, continued to pay for the municipal services. [6] Section 3(1) of the Electricity By-laws states: ‘No person shall use or be entitled to use an electrical supply from the Council unless or until such person has entered into an agreement in writing with the Council for such supply, and such agreement together with the provisions of these By-laws shall in all respects govern such supply. If a person uses an electrical supply without entering into an agreement, he shall be liable for the cost of electricity and any other costs incurred by Council in such circumstances.’ 1 Read with the Social and Labour Plan in terms of regulation 46 of the Mineral and Petroleum Resources Development Regulations, GN R527, 23 April 2004. 2 Emalahleni Local Municipality Electricity By-laws, LAN 173, Mpumalanga Provincial Gazette 2229, 14 November 2013 (MP). [7] As stated earlier, on proclamation of the township, the supply of electricity to the village was from the Municipality since it had taken over from Eskom. Subsequent to the invasion of the eight properties by unlawful occupiers who utilised the electricity, Lehlaka fell into arrears with its electricity bills. In 2019, Lehlaka and the Municipality concluded a settlement agreement in respect of the arrear charges. Thus, from August 2019, Lehlaka made payments for the electricity as and when they became due, and was up to date with its payments. [8] However, as is common cause between the parties, on 10 February 2020 Lehlaka gave a notice of termination of its consumer agreement with the Municipality and sought to have the electricity disconnected. Though Lehlaka sought the disconnection of the electricity, it decided against this option, and as stated in the founding affidavit, it accepted that this option had consequences for not only the unlawful occupiers and the Municipality, but it could also ‘implicate rights and obligations between them beyond Lehlaka’s consumer agreements’. There was however no response from the Municipality. [9] On 28 February 2020, Lehlaka and the Municipality held a meeting to discuss the letter of termination served on 10 February 2020. In that meeting, the Municipality did not dispute that Lehlaka had a right to terminate the consumer agreement. Instead, it advised Lehlaka to first inform the unlawful occupiers, and then put a plan in place to relocate them before disconnecting the electricity. Before this Court, both parties agreed that the occupation of the properties by the unlawful occupiers and Lehlaka’s responsibility to pay rates and electricity had been a topic that they had engaged in for quite a while. [10] On 23 April 2020, Lehlaka addressed a further letter of termination of the consumer agreement ‘for the avoidance of any doubt’ about its previous letter of 10 February 2020. In this letter it gave the Municipality 14 days’ notice in terms of s 4(1) of the Electricity By-laws – the said period would culminate on 15 May 2020. Section 4(1) provides: ‘Subject to the provision of section 7(9) and (13), the consumer’s agreement may be terminated by the consumer, or his authorised representative, or by the Council giving 14 days’ notice in writing calculated from the date of service thereof, provided that if such notice purports to terminate an agreement on a Saturday, Sunday or public holiday, such termination shall only take effect on the following workday.’ However, in the latter termination notification of 23 April 2020, Lehlaka did not seek the disconnection of the electricity but indicated that, if the Municipality continued to supply electricity to the unlawful occupiers after the proposed termination date, this would be for the Municipality’s own account. [11] In its founding affidavit, Lehlaka stated that it had ‘on several occasions’ terminated the consumer agreement with the Municipality. The most recent being on 23 April 2020, which it submits was in the prescribed manner, as set out in s 4(1) of the Electricity By-laws. Hence, in terms of the consumer agreement, the agreement was effectively terminated on 15 May 2020. Thus, the issue was purely contractual in nature, and Lehlaka had complied with the terms of the consumer agreement. Therefore, Lehlaka was ‘not obliged to continue to pay for the electricity consumed by the unlawful occupiers’. [12] Although the Municipality did not dispute Lehlaka’s right to terminate the consumer agreement, it however asserted that it had the discretion whether or not to accept the termination, which it refused to accept. It reasoned that it could not accept the purported termination without Lehlaka first informing the unlawful occupiers that the electricity supply would be disconnected, and that a plan needed to be put in place by Lehlaka to relocate the unlawful occupiers. [13] As a result of the Municipality’s attitude, Lehlaka approached the high court seeking declaratory and consequential relief, which was fashioned as follows: ‘1. Declaring that the applicant has validly terminated the consumer agreements for the supply of electricity that existed between it and the respondent in respect of the “Rietspruit Properties”, fully described in paragraph 13 of the founding affidavit and also annexure “X” to the notice of motion, with effect from 15 May 2020; 2. Declaring that the applicant is not responsible for the payment of any electricity consumed on the Rietspruit Properties after 15 May 2020; 3. Ordering the respondent to reverse any amounts it has charged to the applicant’s municipal accounts in respect of the consumption of electricity on the Rietspruit Properties since 15 May 2020; 4. Interdicting the respondent from issuing any further invoices to the applicant in respect of any electricity consumed on the Rietspruit Properties; 5. Directing the respondent to pay the costs of this application in the event of opposition; and 6. Further and/or alternative relief.’ [14] On 26 July 2021, the high court granted the aforesaid relief in its entirety. It is this order that is the subject of this appeal. In the high court, the Municipality raised three points in limine. First, that the matter was premature, as in terms of s 4(1) of the Electricity By-laws, the Municipality could terminate the consumer agreement within 14 days’ notice to the consumer, yet, it had not given such notice. Before us, counsel for the Municipality, correctly so, abandoned this point in limine. Second, the decision of the Municipality not to accept Lehlaka’s termination of the agreement was an administrative action, and thus, the procedure that ought to have been adopted was by way of review under the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and not declaratory or interdictory relief, as sought by Lehlaka. Third, was the issue of non-joinder of the unlawful occupiers on the property of Lehlaka. [15] The high court did not interrogate these points in limine at all. Yet, it found that ‘[t]he non-joinder issue perhaps is a smoke screen’. [16] I first deal with the issue of non-joinder as it would be dispositive of the appeal, if found to be a good point. In Matjhabeng Local Municipality v Eskom Holdings Limited and Others,3 the Constitutional Court held the following: ‘At common law, courts have an inherent power to order joinder of parties where it is necessary to do so even when there is no substantive application for joinder. A court could, mero motu, raise a question of joinder to safeguard the interest of a necessary party and decline to hear a matter until joinder has been effected. This is consistent with the Constitution.’4 (Emphasis added.) [17] The Constitutional Court further stated: 3 Matjhabeng Local Municipality v Eskom Holdings Limited and Others; Mkhonto and Others v Compensation Solutions (Pty) Limited [2017] ZACC 35; 2017 (11) BCLR 1408 (CC); 2018 (1) SA 1 (CC). 4 Ibid para 91. ‘The law on joinder is well settled. No court can make findings adverse to any person’s interests, without that person first being a party to the proceedings before it. The purpose of this requirement is to ensure that the person in question knows of the complaint so that they can enlist counsel, gather evidence in support of their position, and prepare themselves adequately in the knowledge that there are personal consequences – including a penalty of committal – for their non-compliance. All of these entitlements are fundamental to ensuring that potential contemnors’ rights to freedom and security of the person are, in the end, not arbitrarily deprived.’5 (Emphasis added.) [18] In addition, I am mindful of the assertions made by Van der Westhuizen J in Gcaba v Minister for Safety and Security and Others,6 that: ‘Jurisdiction is determined on the basis of the pleadings, as Langa CJ held in Chirwa and not the substantive merits of the case. If Mr Gcaba’s case were heard by the High Court, he would have failed for not being able to make out a case for the relief he sought, namely review of an administrative decision. In the event of the Court’s jurisdiction being challenged at the outset (in limine), the applicant’s pleadings are the determining factor. They contain the legal basis of the claim under which the applicant has chosen to invoke the court’s competence. While the pleadings – including in motion proceedings, not only the formal terminology of the notice of motion, but also the contents of the supporting affidavits – must be interpreted to establish what the legal basis of the applicant’s claim is, it is not for the court to say that the facts asserted by the applicant would also sustain another claim, cognisable only in another court. If however the pleadings, properly interpreted, establish that the applicant is asserting a claim under the LRA, one that is to be determined exclusively by the Labour Court, the High Court would lack jurisdiction. An applicant like Mr Gcaba, who is unable to plead facts that sustain a cause of administrative action that is cognisable by the High Court, should thus approach the Labour Court.’ (Footnotes omitted.) [19] The test for non-joinder is set out by the Supreme Court of Appeal in Absa Bank Ltd v Naude NO and Others,7 in the following terms: ‘The test whether there has been non-joinder is whether a party has a direct and substantial interest in the subject matter of the litigation which may prejudice the party that has not been joined. In Gordon v Department of Health, Kwazulu-Natal it was held that if an order or judgment cannot be sustained without necessarily prejudicing the interest of third parties that 5 Ibid para 92. 6 Gcaba v Minister for Safety and Security and Others [2009] ZACC 26; 2010 (1) SA 238 (CC); 2010 (1) BCLR 35 (CC) para 75. 7 Absa Bank Ltd v Naude NO and Others [2015] ZASCA 97 (SCA); 2016 (6) SA 540 (SCA) para 10. had not been joined, then those third parties have a legal interest in the matter and must be joined.’ Essentially, the appellant must show that: (a) The unlawful occupiers have a direct and substantial interest in the subject matter of the litigation which may prejudice them as they have not been joined; and (b) Such interest is not only a substantial interest but is a legal interest which justifies that they must be joined. [20] It is trite that the determination of a point in limine essentially deals with a specific legal point that has a bearing on a jurisdictional matter prior to entertaining the merits of the matter.8 Hence, if the point in limine of non-joinder raised, is found to be good in law, there will be no need to deal with the merits advanced by Lehlaka, as a jurisdictional issue raised does not necessitate dealing with the merits. [21] In this Court, Brand JA, in Judicial Service Commission and Another v Cape Bar Council and Another,9 said the following on the issue of non-joinder: ‘It has by now become settled law that the joinder of a party is only required as a matter of necessity – as opposed to a matter of convenience – if that party has a direct and substantial interest which may be affected prejudicially by the judgment of the court in the proceedings concerned (see eg Bowring NO v Vrededorp Properties CC 2007(5) SA 391 (SCA) para 21). The mere fact that a party may have an interest in the outcome of the litigation does not warrant a non-joinder plea. The right of a party to validly raise the objection that other parties should have been joined to the proceedings, has thus been held to be a limited one (see eg Burger v Rand Water Board 2007 (1) SA 30 (SCA) para 7; Andries Charl Cilliers, Cheryl Loots and Hendrik Christoffel Nel Herbstein & Van Winsen The Civil Practice of the High Courts of South Africa 5 ed vol 1 at 239 and the cases there cited.)’.10 (Emphasis added.) [22] As stated earlier, Lehlaka contended that its relationship with the Municipality was purely contractual. The consumer agreement was between the Municipality and itself and as such, it was entitled to seek a termination of the agreement, in line with s 4(1) of the Electricity By-laws, which it had done. 8 Ibid para 75. 9 Judicial Service Commission and Another v Cape Bar Council and Another [2012] ZASCA 115; 2012 (11) BCLR 1239 (SCA); 2013 (1) SA 170 (SCA); [2013] 1 All SA 40 (SCA). 10 Ibid para 12. [23] The Municipality stated that the contractual issue that Lehlaka had raised was not as simple, since there was ‘a special cluster relationship’ between it, Lehlaka and the unlawful occupiers: It alleged that this ‘special cluster relationship’ exists between it and Lehlaka, between it and the occupiers, as well as between Lehlaka and the occupiers. The Municipality relied on the case of Joseph and Others v City of Johannesburg and Others11 (Joseph) and the cases cited therein, where the Constitutional Court explained this ‘special cluster relationship’ as a ‘broader constitutional relationship’ existing between ‘a public service provider and the members of the local community [that] gives rise to rights that require the application of s 3 of [the Promotion of Administrative Justice Act]’.12 [24] Furthermore, the Municipality submitted that Lehlaka was well within its right to apply for the termination of the consumer agreement, however the decision to accept such termination rested with the Municipality. This decision by the Municipality – to accept or to reject the termination – amounted to an administrative action, which ought to have been reviewed and set aside in terms of PAJA, if found to be unreasonable. For the aforesaid proposition, the Municipality placed reliance on the special cluster relationship and the Municipality’s public responsibility in terms of Chapter 7 of the Constitution and the relevant legislation, being the Local Government: Municipal Systems Act 32 of 2000 (Municipal Systems Act) and the Municipal Finance Management Act 56 of 2003, in respect of those persons within its jurisdiction. Hence, the Municipality contended that ‘the special cluster relationship’ was governed by administrative law principles. [25] One of the fundamental duties and functions of a municipality under public law is to provide basic municipal services to the occupants within its constituency, one of these services being the supply of electricity. These constitutionally mandated duties are derived from s 152 of the Constitution under Chapter 7, which states: ‘(1) The objects of local government are— (a) to provide democratic and accountable government for local communities; 11 Joseph and Others v City of Johannesburg and Others [2009] ZACC 30; 2010 (3) BCLR 212 (CC); 2010 (4) SA 55 (CC). 12 Ibid para 32. (b) to ensure the provision of services to communities in a sustainable manner; (c) to promote social and economic development; (d) to promote a safe and healthy environment; and (e) to encourage the involvement of communities and community organisations in the matters of local government. (2) A municipality must strive, within its financial and administrative capacity, to achieve the objects set out in subsection (1).’ [26] Over and above, s 73 of the Municipal Systems Act states: ‘General duty (1) A municipality must give effect to the provisions of the Constitution and— (a) give priority to the basic needs of the local community; (b) promote the development of the local community; and (c) ensure that all members of the local community have access to at least the minimum level of basic municipal services. (2) Municipal services must— (a) be equitable and accessible; (b) be provided in a manner that is conducive to— (i) the prudent, economic, efficient and effective use of available resources; and (ii) the improvement of standards of quality over time; (c) be financially sustainable; (d) be environmentally sustainable; and (e) be regularly reviewed with a view to upgrading, extension and improvement.’ Discussion [27] The provision of municipal services, which includes the provision of electricity, was highlighted in Joseph, where Skweyiya J said: ‘The provision of basic municipal services is a cardinal function, if not the most important function, of every municipal government. The central mandate of local government is to develop a service delivery capacity in order to meet the basic needs of all inhabitants of South Africa, irrespective of whether or not they have a contractual relationship with the relevant public service provider. The respondents accepted that the provision of electricity is one of those services that local government is required to provide. Indeed, they could not have contended otherwise. In Mkontwana, Yacoob J held that “municipalities are obliged to provide water and electricity to the residents in their area as a matter of public duty.” Electricity is one of the most common and important basic municipal services and has become virtually indispensable, particularly in urban society.’13 [28] With this legal framework in mind, I now turn to the core issue for consideration by this Court, that is, whether the unlawful occupiers within the Municipality’s constituency are entitled to receive basic municipal services, electricity being one of those services, and whether such duty falls upon Lehlaka. [29] Unfortunately, the Constitution does not spell out the provision of electricity to the occupants in its constituency, as it does in respect of water, yet, electricity is also a basic service that the Municipality is obliged to provide and the occupants have a public law right to hold the Municipality to its public law obligation.14 As was stated in Joseph, the mistake that was made in the high court, as in this case, is ‘viewing the issues through an entirely contractual lens’.15 To apply private law to the matter does not give any credence to the public law rights and obligations. The ‘special cluster relationship’ takes into account both private and public law. The working of such relationship was eloquently explained in Joseph: ‘The starting point should therefore be whether any “rights” of the applicants have been affected as that term is understood in PAJA, and if so, whether the relevant municipal by-laws can be read consistently with PAJA. The focus of the enquiry therefore is the relationship, if any, between City Power as a public service provider and users of the service with whom it has no formal contractual relationship. This is similar to the approach adopted by Sachs J in Residents of Joe Slovo, in which the lawfulness of the occupation of municipal council land by homeless families was considered. Sachs J observed that this question— “must be located not in the framework of the common law rights of landowners, but in the context of the special cluster of legal relationships between the council and the occupants established by the Constitution and the Housing Act. . . . The very manner in which these relationships are established and extinguished will be different from the manner in which these relationships might be created by the common law . . . . They flow instead from an articulation of public responsibilities … and possess an ongoing, organic and dynamic character that evolves over time.”’16 13 Joseph para 33. 14 Ibid para 39. 15 Ibid para 22. 16 Ibid para 23. [30] In Joseph, Skweyiya J pertinently stated the following: ‘I am of the view that this case is similarly about the “special cluster of relationships” that exist between a municipality and citizens, which is fundamentally cemented by the public responsibilities that a municipality bears in terms of the Constitution and legislation in respect of the persons living in its jurisdiction. At this level, administrative law principles operate to govern these relations beyond the law of contract.’17 (Emphasis added.) [31] On these facts, as was the case in Joseph, the ‘broader constitutional relationship that exists between a public service provider and the members of the local community gives rise to rights’18 that invoke the application of PAJA. Under PAJA, the notion of a ‘right’, has to be interpreted ‘generously’ for purposes of s 3(1) and as such, the interpretation is wider than the approach that is applied in private law, taking into account the public law relationship that is at hand.19 The Municipality has a public law duty and through just administration, should supply electricity to its constituents, the unlawful occupiers included, by virtue of the Constitution and the Municipal Systems Act. The corollary is that the unlawful occupiers have a right to insist that the Municipality should discharge its public law duty to supply electricity. [32] It is that right that will be adversely affected in this ‘special cluster of relationships’, which requires that the unlawful occupiers be joined to the proceedings. This is because they have a direct, substantial and legal interest that is affected by the order made by the high court. The high court was bound to consider the issue of non-joinder and ought to have come to the conclusion that it was necessary that Lehlaka should have joined the unlawful occupiers, and it did not. For this, it erred materially. The converse is true that the Municipality has succeeded to show that the unlawful occupiers have a direct, substantial and legal interest in the subject matter of the litigation which may prejudice them as parties that have not been joined. Thus, it satisfied the test set out by this Court in Absa Bank Ltd v Naude NO. For this reason alone, the appeal ought to succeed. 17 Joseph para 24. 18 Ibid para 32; Cape Gate (Pty) Ltd and Others v Eskom Holdings SOC Ltd and Others 2019 (4) SA 14 (GJ) para 123. 19 Walele v City of Cape Town and Others [2008] ZACC 11; 2008 (6) SA 129 (CC); 2008 (11) BCLR 1067 (CC); 2008 (6) SA 129 (CC); Premier, Mpumalanga and Another v Executive Committee, Association of State-Aided Schools, Eastern Transvaal 1999 (2) SA 91 (CC). Conclusion [33] I have had the benefit of reading the third judgment, in support of the second judgment, penned by Siwendu AJA, who wrote separately on two issues which are addressed extensively in both the first and the second judgment. These issues are first, the issue of non-joinder; and second, what she refers to as the purported ‘special cluster of relationships'. Siwendu AJA concludes, in respect of the first issue, that ‘[i]t would be speculative for a court to foretell what that dispute will be or express any view in relation to a matter that is not yet ripe and which was not yet before the high court for adjudication’. I have decided to express my views on this issue, of non- joinder, as it is a jurisdictional question and dispositive of the appeal, as I have already extensively dealt with in this judgment. In addition, I yet again to a very limited extent address, the special cluster of relationships, to underscore its importance in resolving this appeal. [34] On the first issue, Siwendu AJA contends that ‘the source of that right, if it exists, does not lie in the present dispute about the termination of the agreement’. Further, that this issue was not before the high court for adjudication. I thus deem it necessary, to illustrate the correct factual position, in that the issue of the rights of the unlawful occupiers was raised in the high court. [35] First, the Municipality raised the issue of non-joinder as one of the points in limine, the third point in limine to be exact, in their answering affidavit. In essence, the Municipality stated that there were still occupiers residing in Rietspruit Mining Village, where Lehlaka sought to cancel its electricity agreement with the Municipality and the Municipality sought direction of Lehlaka as to what would be done in order to deal with this predicament. In its answering affidavit the Municipality makes reference to the miners; the employment of the miners; the details of the employer and the basis for the miners being employed; the underlying employment agreement and terms thereof; and the basis for the present miners residing in Rietspruit Mining Village (not the 1978 miners, unless they are one and the same persons); and finally it wanted to know what steps have been taken by Lehlaka as the miners’ employer to deal with the present predicament that the presence of the miners created for all the parties. [37] Second, the high court noted the contention of the Municipality in its refusal to disconnect the supply of electricity until a plan had been put in place to relocate the unlawful occupiers. [38] Third, in their supplementary affidavits filed in the high court application both the Municipality and Lehlaka address the existence and non-existence of the unlawful occupiers’ right in these proceedings. [39] In the fourth place, one of the grounds of appeal raised before the high court, with reference to the issue of non-joinder, is phrased as follows: ‘The Court erred in fact and in law in finding that the occupants of the Applicant’s properties are “illegal occupiers”, without the occupants being joined to the proceedings to be heard in this regard. The Court therefore also erred in law in failing to rule on, or failing to uphold, the Respondent’s point in limine on a non-joinder. It erred in fact and law in finding that the non- joiner issue is a smokescreen.’ [40] Last, and as stated before in this judgment, the high court did not deal pertinently with the point in limine of non-joinder, suffice to hold that ‘[t]he non-joinder issue is perhaps a smoke screen’. [41] I find, with respect, that the contention that the issue of non-joinder was not raised before the high court or this Court, is gratuitous to say the least, as the record clearly shows that it was raised and dealt with extensively in both courts. It is the high court that failed to deal with it and, thus, this Court was bound to deal with it, as it has done in this judgment. [42] The issue of ‘the purported special cluster of relationships’. The rights of the unlawful occupiers are intrinsically linked to the relief that the judgment would grant. The purported special cluster of relationships cannot be discarded and wished away as the third judgment seems to suggest. It either exists as the Municipality contended or it does not as Lehlaka contended. Both parties dealt with this extensively. [43] For the conclusion I have reached in the preceding paragraphs, it is not necessary to deal with the merits and other points in limine. [44] Consequently, I would make the following order: The appeal is upheld with costs including the costs for leave to appeal in the high court, such costs to include the costs of two counsel where so employed. The order of the high court is set aside and is substituted with the following: ‘(a) The application is removed from the roll for the applicant to join the unlawful occupiers. (b) The applicant is to pay the costs of the application.’ ___________________ W HUGHES JUDGE OF APPEAL Nicholls JA (Weiner JA concurring): [43] I have read the first judgment of my colleague, Hughes JA. Regretfully, I cannot agree with the outcome thereof or its reasoning. In summary, her reasoning is that because the Municipality has a constitutional duty to provide basic municipal services to all occupants within its jurisdiction, it would be incorrect to apply private law in circumstances where there exist public law rights and obligations. Instead, there is ‘a special cluster of relationships’ between a public service provider and members of the community that invokes the application of PAJA. She concludes that the unlawful occupiers have a right to insist on being supplied with electricity, which right will be adversely affected in this ‘special cluster of relationships’ should Lehlaka act in a manner as to terminate the consumer agreement for the supply of electricity. Consequently, as the unlawful occupiers have a direct and substantial interest in the subject matter of the litigation, they should have been joined to the proceedings. On this basis, the first judgment found that the special plea of non-joinder should be upheld. [44] The facts are set out in the first judgment and need not be repeated here. I am also in agreement with the applicable legislation and the by-laws relating to the termination of the consumer agreement (the Electricity By-laws). My fundamental point of departure is that there exists no public law relationship between Lehlaka and the unlawful occupiers. That there may be one between the Municipality and the unlawful occupiers to provide basic services does not mean that the unlawful occupiers have a direct and substantial interest in the dispute as to whether Lehlaka has a right to terminate its consumer agreement with the Municipality. Or, as the Municipality contends, whether it has a discretion not to accept the termination. [45] The first point to be made is that there is no constitutional or other legal obligation on a private property owner to pay for electricity consumed by unlawful occupiers. There is no legislation that provides for this and insofar as it may be suggested that the Constitutional Court has imposed such a duty, this is based on a misunderstanding of the authorities. If Lehlaka owes no duty to supply electricity to the unlawful occupiers in discharge of a public duty (and has no private law duty to do so), then whether or not the contract between Lehlaka and the Municipality is terminated, gives rise to no legal interest by the unlawful occupiers in that dispute. [46] Much has been written about the nature of the ‘interest’ that a party must have in order to be joined to proceedings. In Milani and Another v South African Medical and Dental Council and Another (Milani),20 the court, in dealing with this issue, stated: ‘Our Courts have at times recognised that certain persons are affected by legal proceedings but they have no right to be joined. The sub-tenant of the tenant in a suit against a lessor is a case in point. (Compare Sheshe v Vereeniging Municipality 1951 (3) SA 661 (A) at 667A; and Ntai and Others v Vereeniging Town Council and Another 1953 (4) SA 579 (A) at 591.) In the United Watch case supra Corbett J at 417B-C said about such a sub-tenant: “The sub-tenants’ right to, or interest in, the continued occupancy of the premises sub-leased is inherently a derivative one depending vitally upon the validity and continued existence of the right of the tenant to such occupation. The sub-tenant, in effect, hires a defeasible interest. (See Ntai and Others v Vereeniging Town Council and Another 1953 (4) SA 579 (A) at 591.) He can consequently have no direct legal interest in proceedings in which the tenant’s continuing right of occupation is in issue, however much the termination of that right may affect him commercially and financially.”’ 20 Milani and Another v South African Medical and Dental Council and Another [1990] 3 All SA 633 (T); 1990 (1) SA 899 (T) at 903A-D. [47] The principles applied in Milani are similar to those in issue in this case. The unlawful occupiers may be affected by the termination of the consumer agreement, but that does not amount to the legal interest required to be joined in the proceedings. Furthermore, even if the unlawful occupiers were to be joined, it is unclear what remedy they could possibly seek from Lehlaka. [48] The first judgment places considerable reliance on the ‘special cluster of relationships’ to find that the unlawful occupiers should be joined. However, it fails to identify the source of Lehlaka’s obligation towards the unlawful occupiers and the basis of their right and interest in the dispute over the termination of the consumer agreement. [49] The notion of a ‘special cluster of relationships’ was first coined by Sachs J in Residents of Joe Slovo Community, Western Cape v Thubelisha Homes and Others (Joe Slovo)21 and quoted with approval in Joseph and Others v City of Johannesburg and Others (Joseph).22 In Joe Slovo, the question was whether the residents of the Joe Slovo community were ‘unlawful occupiers’ in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) and whether the respondents had acted reasonably and constitutionally in seeking the eviction of 20 000 people (the applicants) from land owned by the municipality. The Constitutional Court granted a structured eviction subject to certain conditions. [50] In a concurring judgment, and considering the lawfulness of the occupation of the residents, Sachs J held that this enquiry was not located in the common law rights of landowners but in the context of the ‘special cluster of legal relationships’ established by the Constitution and the Housing Act 107 of 1997, between the municipality and the occupants. He drew a distinction between the contractual relationship between private owners of land and occupiers, on the one hand, with that of the relationship between a local government authority and homeless people, on the other. These relationships, he said, ‘flow instead from an articulation of public 21 Residents of Joe Slovo Community, Western Cape v Thubelisha Homes and Others [2009] ZACC 16; 2009 (9) BCLR 847 (CC); 2010 (3) SA 454 (CC). 22 Joseph and Others v City of Johannesburg and Others [2009] ZACC 30; 2010 (3) BCLR 212 (CC); 2010 (4) SA 55 (CC) para 24. responsibilities . . . and possess an ongoing, organic and dynamic character that evolves over time’.23 The ‘special cluster of legal relationships’ was a reference to the constitutional obligations of the municipality to prevent homelessness, derived from a person’s constitutional right to access to housing as well as the statutory duties of local government. [51] In Joseph, the focus of the enquiry was the nature of the relationship between a public service provider of electricity and the users of the electricity with which it had no formal contractual relationship. It concerned the termination of electricity following the accumulation of substantial arrears owing by the landlord despite the fact that the tenants had been paying their electricity to the landlord. The City of Johannesburg’s electricity service provider, City Power (Pty) Ltd (City Power) had sent a pre- termination notice to the landlord but failed to notify the tenants. The main issue was whether tenants were entitled to procedural fairness in terms of s 3 of PAJA, by being given a pre-termination notice, before City Power cut the electricity supply. [52] The Constitutional Court found that because City Power knew that it was providing electricity to the tenants in the building, it was artificial to think of the contractual relationship between the landlord and City Power as unrelated to the benefits that accrued to tenants under this contract.24 The landlord was acting merely as a ‘conduit’ in the circumstances and the high court had failed to take into account the role that PAJA may play with people who have no contractual relationship with the service provider. [53] In finding that the tenants were entitled to a pre-termination notice, the Constitutional Court referred to the ‘special cluster of relationships’ between a municipality and its citizens, which was founded in the public responsibility that a municipality bears to its citizens in terms of the Constitution. When City Power supplied electricity to the tenants, it did so in fulfilment of constitutional and statutory duties for municipalities to provide basic services to all persons living within its jurisdiction.25 In such instances, it was found that administrative law governs these relations beyond 23 Joe Slovo para 343. 24 Joseph paras 21-22. 25 Joseph para 47. the law of contract.26 The public law duties of the municipality to the occupiers could not be avoided by the contract between the municipality and the landlord. As such, it was held that City Power was obliged to notify the tenants of its intended termination even though the contract was with the landlord. [54] Once again it is the constitutional obligations of the municipality (a sphere of government) and City Power (an organ of state) that are emphasised, not that of the private landowner. It was the threat of termination of the electricity supply by the municipality that gave rise to the interest of the occupiers because their rights against the municipality were effected. [55] In the matter before us, however, an order is not sought to terminate the electricity supply to the occupiers, who, unlike the tenants in Joseph, are unlawful occupiers, but merely to terminate the consumer agreement Lehlaka has with the Municipality. The Municipality may or may not decide to terminate the electricity supply to the unlawful occupiers. Should it do so, it is only at that stage that the unlawful occupiers may have rights vis-à-vis the Municipality, including the right to procedural fairness in the form of a pre-termination notice. [56] If the unlawful occupiers have a right to electricity as a component of their constitutional right to basic services, then this is an obligation to be borne by the Municipality. To find otherwise would be to make private citizens responsible for the State’s constitutional duties. The notion of a ‘special cluster of relationships’ does not translate into imposing obligations on private individuals, nor does it convert a contractual relationship into an administrative one. In fact, the Constitutional Court in Joseph rejected a submission that the definition of ‘customer’, in terms of the relevant by-laws, be extended to persons that have no contractual relationship with the service provider.27 26 Ibid para 24. 27 Joseph paras 74-75. [57] The Municipality’s reliance on the Constitutional Court judgments of Mkontwana v Nelson Mandela Metropolitan Municipality (Mkontwana)28 and Rademan v Moqhaka Local Municipality and Others (Rademan),29 is also misplaced. Mkontwana dealt with the constitutionality of a legislative provision that imposed an obligation on an owner wishing to transfer property, to pay up to two years’ worth of arrear charges for electricity, irrespective of who incurred them.30 It was argued that the section was inconsistent with s 25 of the Constitution, in that it amounted to an arbitrary deprivation of property. The Constitutional Court pointed out that while the deprivation was not insignificant, it was only for a two-year period, not indefinitely. If desired, an owner could delay transfer for two years and the new occupier would not be liable for the debts of the previous occupier.31 Further, there was sufficient justification for the deprivation that occurred because the purpose was compelling; it was not arbitrary. [58] In the present matter, it is common cause that Lehlaka was involved in attempts to donate the remaining properties to the Municipality in 2005, 2010 and 2018. While initially agreeing to it, in the end the Municipality refused to accept the donation. Notwithstanding this, in the same breath the Municipality complains that 40 756 unlawful households have invaded property within its jurisdiction and it has to deal with 95 000 households who require housing. This, so it claims, is in circumstances where it cannot even provide services adequately to the formal households already in existence. For this state of affairs, it blames the mines for ‘enticing many indigent and vulnerable people to the Municipality’s jurisdiction’. In essence, it submits that should Lehlaka successfully terminate its consumer agreement, this will mean more households are the responsibility of the Municipality. That a municipality is overwhelmed by its constitutional obligations towards its citizens cannot form a legal basis for transferring these obligations to a private landowner. 28 Mkontwana v Nelson Mandela Metropolitan Municipality 2005 (1) SA 530 (CC); 2005 (2) BCLR 150 (CC). 29 Rademan v Moqhaka Local Municipality and Others [2013] ZACC 11; 2013 (4) SA 225 (CC); 2013 (7) BCLR 791 (CC). 30 See s 118(1) of Local Government: Municipal Systems Act 32 of 2000. 31 Ibid para 45. See also O’Regan J, in a separate concurring judgment, para 87, where she found that the owner was not deprived of ownership by s 118 of the Local Government Municipal Systems Act 32 of 2000, but rather one of the incidents of ownership, namely, the ability to alienate immoveable property, was impaired. She concluded that the section does constitute a deprivation, but found that it was not arbitrary. [59] Rademan also does not assist. Ms Rademan was amongst a group of ratepayers who refused to pay rates in protest against poor services rendered by a municipality in the Free State. She continued to pay her electricity account. Despite this, the municipality gave her notice and then cut off her electricity supply. This Court held that the municipality could consolidate the rates and the electricity accounts and had the right to terminate the electricity supply without a court order, even though the electricity account was not in arrears. Leave to appeal was granted to the Constitutional Court, and duly dismissed. The Constitutional Court held that consolidation is provided for in the relevant by-laws and once a customer pays only part of the account, that customer is in breach of her obligations to make payment. Therefore, to terminate the electricity supply was not unconstitutional.32 [60] Here, the consequence of termination of the consumer agreement may be that the unlawful occupiers have to look to the Municipality for the supply of electricity, but that is an incident of the public law duty owed by the Municipality. There is no reason why this duty gives the unlawful occupiers a direct and substantial interest in the private law contract between Lehlaka and the Municipality. Once the contract is terminated between the Municipality and Lehlaka, and should the Municipality proceed to cut off the electricity supply to the unlawful occupiers, they would then have the right to be joined in any proceedings. But at this stage, the question of joinder does not arise. [61] It should be noted that in its papers the Municipality raised the non-joinder point on the basis that the occupiers were employees and former employees of the mines. It is on this basis that it was submitted that they should have been cited. It was pointed out, and apparently accepted, that the occupiers inhabited the properties unlawfully after the mines ceased operations in 2001. None of the unlawful occupiers are employed by the mine or any related mining company. [62] It is correct that no court can make a finding adverse to a party, without him or her being party to the proceedings before the court. This is to effectuate the time- 32 Rademan paras 32-34. honoured principle of audi alterem partem.33 Here, whether the termination of the consumer agreement will be adverse to the unlawful occupiers depends entirely on what the Municipality elects to do. It can install pre-paid meters; it can reduce the electricity supplied;34 it can terminate the electricity supply on proper notice; or, it can carry on with the electricity supply unimpeded. [63] If the matter is a purely contractual one, as I believe the termination of the consumer agreement to be, then there can be no question of joining the unlawful occupiers as there is no contractual privity between them and Lehlaka and/or the Municipality. Lehlaka has no constitutional obligation towards the unlawful occupiers to provide electricity, and the unlawful occupiers have no corresponding legal right to be provided with electricity by Lehlaka free of charge in perpetuity, or whenever the Municipality in its discretion decides to accept the termination. They, therefore, have no legal interest worthy of protection in the current litigation.35 This disposes of the question of joinder. The point in limine thus falls to be dismissed. [64] The other point in limine raised by the Municipality, which is directly related to the merits, is the applicability of PAJA. The Municipality submitted that its decision to refuse to terminate the consumer agreement should have been challenged as a review in terms of PAJA. As pointed out in the first judgment, the Municipality does not dispute Lehlaka’s right to terminate its consumer agreement with the Municipality. Its stance is that it has a discretion whether or not to accept what it describes as a ‘unilateral’ termination. According to the Municipality, Lehlaka allowed its properties to be occupied and for municipal services to be consumed. This created an ‘administrative relationship’ between Lehlaka and the unlawful occupiers, which created ‘onerous obligations on [the Municipality] when it comes to charging for electricity supplied to the properties, or the termination of supply in the event of non-payment’. 33 South African Riding for the Disabled Association v Regional Land Claims Commissioner and Others [2017] ZACC 4; 2017 (8) BCLR 1053 (CC); 2017 (5) SA 1 (CC) para 10; Matjhabeng Local Municipality v Eskom Holdings Limited and Others; Mkhonto and Others v Compensation Solutions (Pty) Limited [2017] ZACC 35; 2017 (11) BCLR 1408 (CC); 2018 (1) SA (CC) para 93. 34 See Joseph para 51. 35 Allers and Others v Fourie NO and Others [2006] ZASCA 152 (SCA) para 24. [65] Administrative action is defined, in s 1 of PAJA, to mean any decision taken, or any failure to take a decision, by an organ of state when exercising a power in terms of the Constitution; or exercising a public power or performing a public function in terms of any legislation.36 In respect of natural or juristic persons, which are not organs of state, for any decisions they make to fall within the ambit of administrative action, they must be exercising a public power or performing a public function in terms of an empowering provision.37 [66] There can be no suggestion that Lehlaka was exercising a public power or performing a public function in terms of an empowering provision when it terminated the consumer agreement. Thus, in order to establish that PAJA applies, the Municipality, as an organ of state, must demonstrate that in refusing to accept the termination of the consumer agreement, it was taking a decision in exercise of a power in terms of the Constitution or a statute. Did the impugned decision entail the exercise by the Municipality of a power in terms the Constitution or provincial constitution, or the exercise of public power in terms if any legislation? If it did not, then it was not administrative action and consequently not susceptible to judicial review in terms of s 6 of PAJA.38 [67] This Court has held that administrative action entails a decision which involves a choice or evaluation, thereby drawing a distinction between discretionary powers and mechanical powers.39 Mechanical powers involve no choice, for example, in instances where certain requirements are met, the decision-maker has no power to refuse. In contrast, there are those circumstances where the decision-maker has to make an assessment and come to a decision.40 [68] The termination of a consumer’s agreement is provided for in the Electricity By- laws. Section 3(1) of the By-laws provides that no person shall be entitled to the use 36 Section 1(a)(i) and (ii) of PAJA. 37 Section 1(b) of PAJA. 38 Ma-Afrika Hotels (Pty) Ltd v Cape Peninsula University of Technology [2023] ZAWCHC 4; [2023] 1 All SA 731 (WCC); 2023 (3) 621 (WCC) para 11. 39 Nedbank Ltd v Mendelow NO and Another [2013] ZASCA 98; 2013 (6) SA 130 (SCA) paras 25-28; Gamevest (Pty) Ltd v Regional Land Claims Commissioner for the Northern Province and Mpumalanga and Others [2002] ZASCA 117; 2003 (1) SA 373 (SCA) paras 20 and 28. 40 C Hoexter and G Penfold Administrative Law in South Africa 3 ed (2021) at 250. of electricity without having entered into a consumer’s agreement with the municipal council in writing. If a person does use an electrical supply without entering into such an agreement, he shall be responsible for the costs of electricity. Section 4 deals with the termination of a consumer’s agreement and provides: ‘Subject to the provision of section 7(9) and (13), the consumer’s agreement may be terminated by the consumer, or his authorised representative, or by [the Municipality] giving 14 days’ notice in writing calculated from the date of service thereof, provided that if such notice purports to terminate an agreement on a Saturday, Sunday or public holiday, such termination shall only take effect on the following workday.’41 [69] Other than the requisite 14 days’ written notice, which the Municipality has accepted was given by 23 April 2020, the Municipality has no discretion to refuse to terminate the consumer agreement. Insofar as the Electricity By-laws give rise to legislative regulation of the contractual relationship between the Municipality and Lehlaka, the Electricity By-laws do not accord the Municipality the discretionary power to decide whether to accept or refuse a termination. Once that is so, the matter is governed by the ordinary terms of the contract. The public law regulation is limited. Hence, the right to terminate, which the Municipality acknowledges, must prevail because there is no power given to the Municipality to decide whether or not that right may be exercised. [70] On the Municipality’s interpretation, the consumer may not terminate a consumer agreement, but only request the Municipality to do so, which it has a discretion to refuse. It would be extraordinary if a consumer agreement with a public service provider could operate in perpetuity and only be terminated if the service provider agreed to its termination. Once it is accepted that the consumer has a right to terminate a consumer’s agreement on the requisite notice, there is no choice to be made by the Municipality and thus no decision, other than a mechanical one, to be made. The decision, therefore, does not amount to administrative action as defined in PAJA. 41 Sections 7(9) and 7(13) deal with the prescribed disconnection fee and meter reading period once an agreement has been terminated. [71] For the reasons set out above, Lehlaka is entitled to terminate the contract with the Municipality. Consequently, the appeal falls to be dismissed and the following order is made: The appeal is dismissed with costs, including the costs of two counsel. ____________________ C HEATON NICHOLLS JUDGE OF APPEAL Siwendu AJA: [72] I have read the judgments by my colleagues Hughes JA (the first judgment) and Nicholls JA (the second judgment). I concur in the second judgment and order proposed by my colleague, Nicholls JA. I write separately, because in my view given the contractual nature of the relationships between Lehlaka (as the owner of the occupied properties), on the one hand, and the Municipality (a sphere of government), on the other, a joinder of the unlawful occupiers is not necessary. [73] First, it merits emphasis that only the Municipality singularly bears the outward administrative law obligations in its dealings with its citizens.42 Those obligations may not be transferred unless the Municipality contracts with a third party to perform municipal services on its behalf.43 Second, private citizens, like Lehlaka, cannot ‘act administratively’ and have no reciprocal administrative duties in their dealings with the Municipality in law. 42 Section 239 of the Constitution defines an organ of state to include a local sphere of government; See also Transnet Ltd v Goodman Brothers (Pty) Ltd 2001 (1) SA 853 (SCA), where the Court dealt with contractual dealings which derive from the exercise of public power by an organ of state. 43 Section 78 of the Municipal Systems Act 32 of 2000 permits a municipality to decide on mechanisms to deliver municipal services including contracting with private parties. [74] The crux of the dispute before the high court involves Lehlaka’s right to resile from and terminate the consumer agreement (the agreement) it has with the Municipality and the Municipality’s refusal to accept Lehlaka’s termination notice. The Municipality impermissibly seeks to engineer a tripartite relationship between it, Lehlaka, and the unlawful occupiers to bolster the purported ‘special cluster of relationships’ between the parties. There is no basis in law for the Municipality to impose a contractual relationship on an unwilling party who is entitled in law to resile from a contract. [75] It is not disputed that Lehlaka had no prior relationship with the unlawful occupiers, whether as an erstwhile lessor or a conduit for the provision of electricity to the property occupied. The mere incident of ownership of the properties by Lehlaka cannot, without more, create the ‘special cluster of relationships’ contended for by the Municipality. [76] Absent the purported ‘special cluster of relationships’ as between Lehlaka and the Municipality, the dispute about the termination of the agreement is a purely contractual one. The unlawful occupiers are not privy or a party to the agreement. As held by the full court in Rosebank Mall (Pty) v Cradock Heights (Pty) Ltd: ‘There is a distinction between the case of a party whose rights are purely derived from “the right which is the subject-matter of the litigation” and in which he has no legal interest, on the one hand, and the case where the third party has a right acquired aliunde the right which is the subject-matter of the litigation and which would be prejudicially affected if the judgment and order made in the litigation to which he was not a party, were carried into effect.’44 [77] On the strength of the above judgment, the unlawful occupiers have no right or claim in the subject matter of the termination dispute. They are strangers to the agreement. The basis for the joinder is that the rights of the unlawful occupiers to be provided with electricity will arise following the termination of the agreement. The difficulty is that the source of that right, if it exists, does not lie in the present dispute about the termination of the agreement. It would be speculative for a court to foretell 44 Rosebank Mall (Pty) and Another v Cradock Heights (Pty) Ltd [2003] 4 All SA 471 (W); 2004 (2) SA 353 (W) para 37. what that dispute will be or express any view in relation to a matter that is not yet ripe and which was not yet before the high court for adjudication. [78] Accordingly, for these additional reasons, I concur in the second judgment that a joinder of the unlawful occupiers to the termination dispute is not necessary. _________________________ N T Y SIWENDU ACTING JUDGE OF APPEAL Appearances For the appellant: A Vorster Instructed by: Ka-Mbonane Cooper, Johannesburg Van der Merwe and Sorour Attorneys, Bloemfontein For the respondent: M Wesley SC and T Mosikili Instructed by: Norton Rose Fulbright Incorporated, Johannesburg Webbers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 25 October 2023 Status: Immediate The following summary is for the benefit of the media in the reporting of this case and does not form part of the judgments of the Supreme Court of Appeal Emalahleni Local Municipality v Lehlaka Property Development (Pty) Ltd (600/2022) [2023] ZASCA 138 (25 October 2023) Today, the Supreme Court of Appeal (SCA) dismissed an appeal with costs, including the costs of two counsel, against the decision of the Mpumalanga Division of the High Court, Middelburg (the high court), which granted declaratory and interdictory relief sought by the respondent, Lehlaka Property Development (Pty) Ltd (Lehlaka), against the appellant, Emalahleni Local Municipality (the Municipality). The facts of the matter were briefly as follows. Lehlaka was the owner of eight properties in a mining village known as Rietspruit in Mpumalanga, which were invaded by unlawful occupiers. Lehlaka, as owner, and in terms of its consumer agreement with the Municipality, in accordance with the Emalahleni Local Municipality Electricity By-laws (the Electricity By-laws), continued to pay for the municipal services. On 23 April 2020, Lehlaka addressed a letter of termination of the consumer agreement. The Municipality however asserted that it had the discretion whether or not to accept the termination, which it refused to accept. The issues before the SCA were, firstly, whether the unlawful occupiers on Lehlaka’s properties ought to have been joined to the proceedings, and secondly, whether the decision of the Municipality not to accept Lehlaka’s termination of the agreement was an administrative action, and thus, whether the procedure that ought to have been adopted was by way of review under the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and not declaratory or interdictory relief, as sought by Lehlaka. The SCA, through the majority judgment penned by Nicholls JA (Weiner JA and Siwendu AJA concurring), found that the point in limine regarding the non-joinder issue fell to be dismissed. This was because there existed no public law relationship between Lehlaka and the unlawful occupiers. That there may have been one between the Municipality and the unlawful occupiers to provide basic services did not mean that the unlawful occupiers had a direct and substantial interest in the dispute as to whether Lehlaka had a right to terminate its consumer agreement with the Municipality. Or, as the Municipality contended, whether it had a discretion not to accept the termination. The majority judgment found that if Lehlaka owed no duty to supply electricity to the unlawful occupiers in discharge of a public duty (and had no private law duty to do so), then whether or not the contract between Lehlaka and the Municipality was terminated, gave rise to no legal interest by the unlawful occupiers in that dispute. It found further that if the unlawful occupiers had a right to electricity as part of their constitutional right to basic services, then this was an obligation to be borne by the Municipality. To find otherwise, would have been to make private citizens responsible for the State’s constitutional duties. The notion of a ‘special cluster of relationships’ did not translate into imposing obligations on private individuals, nor did it convert a contractual relationship into an administrative one. With regard to the applicability of PAJA, the majority judgment found that the Municipality’s decision to refuse to terminate the consumer agreement did not amount to administrative action as defined in PAJA, and was consequently not susceptible to judicial review in terms of s 6 of PAJA. It found that once it was accepted that the consumer had a right to terminate a consumer’s agreement on the requisite notice, there was no choice to be made by the Municipality and thus no decision, other than a mechanical one, to be made. In this regard, the majority judgment found that other than the requisite 14 days’ written notice, which the Municipality had accepted was given by 23 April 2020, the Municipality had no discretion to refuse to terminate the consumer agreement. Thus, Lehlaka was entitled to terminate the contract with the Municipality. Consequently, the SCA held that the appeal fell to be dismissed. Siwendu AJA penned a separate concurring judgment, in which she agreed that given the contractual nature of the relationships between Lehlaka (as the owner of the occupied properties) and the Municipality (a sphere of government), a joinder of the unlawful occupiers was not necessary. Siwendu AJA found that the crux of the dispute involved Lehlaka’s right to resile from and terminate the consumer agreement and the Municipality’s refusal to accept Lehlaka’s termination notice. Siwendu AJA found that there was no basis or power in law for the Municipality to impose a contractual relationship on an unwilling party, who was entitled in law to resile from a contract. Further, that absent the purported ‘special cluster of relationships’ as between Lehlaka and the Municipality, the dispute was purely contractual. Thus, the unlawful occupiers had no right or claim in the subject matter of the termination dispute. A minority judgment penned by Hughes JA (Mocumie JA concurring) would have upheld the appeal on the basis of non-joinder of the unlawful occupiers. It found that the issue was squarely raised by the Municipality as a point in limine before the high court. Despite it being raised, the high court did not address it at all. The minority judgment found that the unlawful occupiers ought to have been joined to the application in the high court. It further found that there was a ‘special cluster relationship’ that invoked the application of PAJA on the facts of this case. The Municipality had a public law duty to supply electricity to its constituents, the unlawful occupiers included. The corollary was that the unlawful occupiers had a right to insist that the Municipality discharged its public law duty to supply electricity. It was that right that was adversely affected in this ‘special cluster relationship’, which required that the unlawful occupiers be joined to the proceedings. This was because they had a direct, substantial and legal interest that was affected by the order made by the high court. It was thus necessary that Lehlaka should have joined the unlawful occupiers. ~~~~ends~~~~

3494

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 612/19 In the matters between: THE PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA FIRST APPELLANT THE MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT SECOND APPELLANT and WOMEN’S LEGAL CENTRE TRUST FIRST RESPONDENT THE MINISTER OF HOME AFFAIRS SECOND RESPONDENT SPEAKER OF THE NATIONAL ASSEMBLY THIRD RESPONDENT CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES FOURTH RESPONDENT LAJNATUN NISAA-IL MUSLIMAAT (ASSOCIATION OF MUSLIM WOMEN OF SOUTH AFRICA) FIFTH RESPONDENT UNITED ULAMA COUNCIL OF SOUTH AFRICA SIXTH RESPONDENT SOUTH AFRICAN HUMAN RIGHTS COMMISSION SEVENTH RESPONDENT COMMISSION FOR THE PROMOTION AND PROTECTION OF THE RIGHTS OF CULTURAL, RELIGIOUS AND LINGUISTIC COMMUNITIES EIGHTH RESPONDENT UNITED ULAMA COUNCIL OF SOUTH AFRICA FIRST AMICUS CURIAE LAW SOCIETY OF SOUTH AFRICA SECOND AMICUS CURIAE SOUTH AFRICAN LAWYERS FOR CHANGE THIRD AMICUS CURIAE MUSLIM ASSEMBLY (CAPE) FOURTH AMICUS CURIAE ISLAMIC UNITY CONVENTION FIFTH AMICUS CURIAE COMMISSION FOR GENDER EQUALITY SIXTH AMICUS CURIAE JAMIATUL ULAMA KWAZULU-NATAL SEVENTH AMICUS CURIAE and THE MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT APPELLANT and TARRYN FARO FIRST RESPONDENT MARJORIE BINGHAM NO (IN HER CAPACITY AS THE EXECUTOR OF THE DECEASED ESTATE OF MOOSA ELY – ESTATE NO 4190/2010) SECOND RESPONDENT MUJAID ELY THIRD RESPONDENT SHARIFF ELY FOURTH RESPONDENT TASHRICK ELY FIFTH RESPONDENT MUSLIM JUDICIAL COUNCIL SIXTH RESPONDENT IMAM IB SABAN SEVENTH RESPONDENT THE MASTER OF THE HIGH COURT EIGHTH RESPONDENT and THE MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT APPELLANT and RUWAYDA ESAU FIRST RESPONDENT MAGAMAT RIETHAW ESAU SECOND RESPONDENT THE CABINET OF THE REPUBLIC OF SOUTH AFRICA THIRD RESPONDENT GOVERNMENT EMPLOYEES PENSION FUND FOURTH RESPONDENT MUSLIM JUDICIAL COUNCIL FIFTH RESPONDENT MUNEEBAH JACOB SIXTH RESPONDENT Neutral citation: President of the RSA and Another v Women’s Legal Centre Trust and Others; Minister of Justice and Constitutional Development v Faro and Others; and Minister of Justice and Constitutional Development v Esau and Others (Case no 612/19) [2020] ZASCA 177 (18 December 2020) Coram: MAYA P, SALDULKER, VAN DER MERWE and PLASKET JJA AND WEINER AJA Heard: 25 and 26 August 2020 and 30 September 2020 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email. It has been published on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down is deemed to be 14h00 on 18 December 2020. Summary: Constitutional law – Muslim marriages – whether there is a constitutional obligation on the State to enact legislation recognising Muslim marriages – in the event that a breach of a constitutional obligation has been established, the appropriate remedy to be awarded. ORDER On appeal from: Western Cape Division of the High Court, Cape Town (Boqwana, Desai and Salie-Hlophe JJ sitting as court of first instance): judgment reported sub nom Women's Legal Centre Trust v President of the Republic of South Africa and Others, Faro v Bingham NO and Others, Esau v Esau and Others (22481/2014, 4466/2013, 13877/2015; 2018 (6) SA 598 (WCC). The appeal and the cross-appeals succeed in part and the order of the court a quo is set aside and replaced with the following order: ‘1.1 The Marriage Act 25 of 1961 (the Marriage Act) and the Divorce Act 70 of 1979 (the Divorce Act) are declared to be inconsistent with ss 9, 10, 28 and 34 of the Constitution of the Republic of South Africa, 1996, in that they fail to recognise marriages solemnised in accordance with Sharia law (Muslim marriages) as valid marriages (which have not been registered as civil marriages) as being valid for all purposes in South Africa, and to regulate the consequences of such recognition. 1.2 It is declared that s 6 of the Divorce Act is inconsistent with ss 9, 10, 28(2) and 34 of the Constitution insofar as it fails to provide for mechanisms to safeguard the welfare of minor or dependent children of Muslim marriages at the time of dissolution of the Muslim marriage in the same or similar manner as it provides mechanisms to safeguard the welfare of minor or dependent children of other marriages that are being dissolved. 1.3 It is declared that s 7(3) of the Divorce Act is inconsistent with ss 9, 10, and 34 of the Constitution insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just. 1.4 It is declared that s 9(1) of the Divorce Act is inconsistent with ss 9, 10 and 34 of the Constitution insofar as it fails to make provision for the forfeiture of the patrimonial benefits of a Muslim marriage at the time of its dissolution in the same or similar terms as it does in respect of other marriages. 1.5 The declarations of constitutional invalidity are referred to the Constitutional Court for confirmation. 1.6 The common law definition of marriage is declared to be inconsistent with the Constitution and invalid to the extent that it excludes Muslim marriages. 1.7 The declarations of invalidity in paras 1.1 to 1.4 above are suspended for a period of 24 months to enable the President and Cabinet, together with Parliament to remedy the foregoing defects by either amending existing legislation, or passing new legislation within 24 months, in order to ensure the recognition of Muslim marriages as valid marriages for all purposes in South Africa and to regulate the consequences arising from such recognition. 1.8 Pending the coming into force of legislation or amendments to existing legislation referred to in para 1.7, it is declared that a union, validly concluded as a marriage in terms of Sharia law and subsisting at the date of this order, or, which has been terminated in terms of Sharia law, but in respect of which legal proceedings have been instituted and which proceedings have not been finally determined as at the date of this order, may be dissolved in accordance with the Divorce Act as follows: (a) all the provisions of the Divorce Act shall be applicable save that all Muslim marriages shall be treated as if they are out of community of property, except where there are agreements to the contrary, and (b) the provisions of s 7(3) of Divorce Act shall apply to such a union regardless of when it was concluded. (c) In the case of a husband who is a spouse in more than one Muslim marriage, the court shall: (i) take into consideration all relevant factors including any contract or agreement and must make any equitable order that it deems just, and; (ii) may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings. 1.9 It is declared that, from the date of this order, s 12(2) of the Children’s Act 38 of 2005 applies to Muslim marriages concluded after the date of this order. 1.10 For the purpose of applying paragraph 1.9 above, the provisions of ss 3(1)(a), 3(3)(a) and 3(3)(b), 3(4)(a) and 3(4)(b), and 3(5) of the Recognition of Customary Marriages Act 120 of 1998 shall apply, mutatis mutandis, to Muslim marriages. 1.11 If administrative or practical problems arise in the implementation of this order, any interested person may approach this Court for a variation of this order. 1.12 The Department of Home Affairs and the Department of Justice & Constitutional Development shall publish a summary of the orders in paragraphs 1.1 to 1.9 above widely in newspapers and on radio stations, whatever is feasible, without unreasonable delay.’ 2 In the matter of Faro v The Minister of Justice and Constitutional Development and Others (Case no 4466/2013), no order is made in relation to the cross-appeal. It is recorded that: 2.1 In recognition of the fact that there currently are no policies and procedures in place for purposes of determining disputes arising in relation to the validity of Muslim marriages and the validity of divorces granted by any person or association according to the tenets of Sharia law (Muslim divorces) in circumstances where persons purport to be spouses of deceased persons in accordance with the tenets of Sharia law and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act 81 of 1987 and/or the Maintenance of Surviving Spouses Act 27 of 1990, the Minister of Justice undertakes within 18 months of the granting of this order to put in place the necessary mechanisms to ensure that there is a procedure by which the Master may resolve disputes arising in relation to the validity of Muslim marriages and Muslim divorces, in all cases where a dispute arises as to whether or not the persons purport to be married in accordance with the tenets of Sharia law to the deceased persons and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act 81 of 1987 and/or the Maintenance of Surviving Spouses Act 27 of 1990; 2.2 In the event that the Minister of Justice fails to comply with the undertaking in para 2.1 the appellants may enrol the appeal in this Court on the same papers, duly supplemented, in order to seek further relief. The Appellants (the President and the Minister of Justice) shall in respect of the matter under case no 13877/2015 (Esau) pay Ruwayda Esau’s costs in respect of claim A (including the costs of the appeal and cross-appeal) such costs to include the costs of three counsel to the extent of their employment. In respect of the matters under Case nos 22481/2014 and 4466/2013: 4.1 Paragraph 8 of the order of the Western Cape Division of the High Court shall stand, in terms whereof the President, the Minister of Justice and the Minister of Home Affairs are to pay the costs of the Women’s Legal Centre Trust respectively, such costs to include the costs of three counsel to the extent of their employment. 4.2 The President and the Minister of Justice shall pay the Women’s Legal Centre’s costs of the appeal and the cross-appeal, such costs to include the costs of three counsel to the extent of their employment. JUDGMENT Saldulker and Van der Merwe JJA (Maya P, Plasket JA and Weiner AJA concurring): Introduction [1] The recognition of marriages solemnised according to the tenets of the Islamic faith (Muslim marriages) lies at the heart of this appeal. Muslim marriages have never been recognised nor regulated by South African law as valid marriages despite 26 years under a democratic constitutional dispensation that is founded, inter alia, on the values of ‘[h]uman dignity, the achievement of equality and the advancement of human rights and freedoms’.1 This is, understandably, both an emotive and contentious issue. South Africa has come a long way since the judgments in Ismail v Ismail,2 and other cases such as Kader v Kader,3 Bronn v Fritz Bronn’s Executors and Others and Seedat’s Executors v The Master (Natal),4 which withheld legal recognition from Muslim marriages. Although we have had the benefit of judgments that have emerged from the Constitutional Court, this Court and high courts, expressing trenchant criticism of the failure on the part of the State to take steps to afford legal recognition to Muslim marriages, the historical disadvantages, hardships and prejudice for parties to Muslim marriages, especially Muslim women and children, continues to prevail. 1 Section 1(a) of the Constitution of the Republic of South Africa 108 of 1996. 2 Ismail v Ismail 1983 (1) SA 1006 (A). 3 Kader v Kader 1972 (3) SA 203 (RA). 4 Bronn v Fritz Bronn’s Executors and Others (1860) 3 Searle 313; Seedat’s Executors v The Master (Natal) 1917 AD 302. [2] The views held in the pre-constitutional era by the South African courts reflect a refusal to recognise Muslim marriages, mainly because these marriages were viewed as potentially polygynous, and thus contra bonos mores. A scornful and offensive attitude towards persons married in terms of Sharia law prevailed. [3] The plight of Muslim women and children and the injustices suffered by them as a result of the absence of legal recognition of Muslim marriages are particularly highlighted in the judgments that we refer to below.5 [4] In Daniels v Campbell NO and Others,6 Moseneke J succinctly stated: ‘This “persisting invalidity of Muslim marriages” is, of course, a constitutional anachronism. It belongs to our dim past. It originates from deep-rooted prejudice on matters of race, religion and culture. True to their worldview, Judges of the past displayed remarkable ethnocentric bias and arrogance at the expense of those they perceived different. They exalted their own and demeaned and excluded everything else. Inherent in this disposition, says Mahomed CJ, is “inequality, arbitrariness, intolerance and inequity”. These stereotypical and stunted notions of marriage and family must now succumb to the newfound and restored values of our society, its institutions and diverse people. They must yield to societal and constitutional recognition of expanding frontiers of family life and intimate relationships. Our Constitution guarantees not only dignity and equality but also freedom of religion and belief. What is more, s 15(3) of the Constitution foreshadows and authorises legislation that recognises marriages concluded under any tradition or a system of religious, personal or family law. Such legislation is yet to be passed in regard to Islamic marriages.’ [5] In a similar vein, in Hassam v Jacobs NO and Others,7 Nkabinde J espoused the following: ‘The prejudice directed at the Muslim community is evident in the pronouncement by the Appellate Division in Ismail v Ismail. The court regarded the recognition of polygynous unions solemnised under the tenets of the Muslim faith as void on the ground of it being contrary to accepted customs 5 Ryland v Edros 1997 (2) SA 690 (C); Amod v Multilateral Motor Vehicle Accidents Fund (Commission for Gender Equality Intervening) 1999 (4) SA 1319 (SCA); Daniels v Campbell NO and Others 2004 (5) SA 331 (CC); 2004 (7) BCLR 735(CC) paras 74-75; Khan v Khan 2005 (2) SA 272 (T). 6 Daniels v Campbell NO and Others 2004 (5) SA 331 (CC) paras 74-75. 7 Hassam v Jacobs NO and Others 2009 (5) SA 572 (CC); [2009] ZACC 19 para 25. and usages, then regarded as morally binding upon all members of our society. Recognition of polygynous unions was seen as a retrograde step and entirely immoral. The court assumed, wrongly, that the non-recognition of polygynous unions was unlikely to “cause any real hardship to the members of the Muslim communities, except, perhaps, in isolated instances”. That interpretive approach is indeed no longer sustainable in a society based on democratic values, social justice and fundamental human rights enshrined in our Constitution. The assumption made in Ismail, with respect, displays ignorance and total disregard of the lived realities prevailing in Muslim communities and is consonant with the inimical attitude of one group in our pluralistic society imposing its views on another.’ The WLC application [6] In 2009, the Women’s Legal Centre Trust (the WLC), an organisation established to advance women’s rights by conducting constitutional litigation and advocacy on gender issues, approached the Constitutional Court for direct access in terms of s 167 of the Constitution, in an application concerning the same substantive issues raised in this matter. The application was dismissed on the basis that no proper case had been made out for direct access and so the matter was not properly before the court.8 [7] During November 2015, the WLC launched a semi-urgent application in the high court against the President of the Republic of South Africa (the President), the Minister of Justice and Constitutional Development (Minister of Justice), the Minister of Home Affairs, the Speaker of the National Assembly, and the Chairperson of the National Council of Provinces, being the first to the fifth respondents. [8] The WLC contended that the State had failed to recognise and regulate marriages solemnised in accordance with the tenets of Sharia law and was consequently in breach of ss 7(2), 9(1), 9(2), 9(3), 9(5), 10, 15(1), 15(3), 28(2), 31 and 34 of the Constitution. The WLC argued that s 7(2) of the Constitution obliged the State to prepare, initiate, introduce and bring into operation legislation recognising Muslim marriages, and that the President and Cabinet had failed to fulfil this obligation. In the alternative, it essentially sought orders declaring the Marriage Act 25 of 1961 (the Marriage Act) and the Divorce Act 70 of 1979 8 Women’s Legal Centre Trust v President of the Republic of South Africa and Others 2009 (6) SA 94 (CC); [2009] ZACC 20. (the Divorce Act), as well as specified provisions thereof, unconstitutional insofar as they fail to recognise and provide for Muslim marriages. The Faro application [9] In this application, Mrs Tarryn Faro, represented by the WLC, launched an application against Ms Marjorie Bingham in her capacity as executrix of the estate of the late Mr Moosa Ely, (to whom Mrs Faro had been married according to Islamic rites), the Muslim Judicial Council (MJC), the Master of the High Court, Western Cape and the Minister of Justice. The facts were as follows. On 28 March 2008, Mrs Faro and Mr Ely concluded a Muslim marriage, which was terminated on 24 August 2009, when Mr Ely issued a Talaq (an Islamic divorce). However, the Talaq was subsequently revoked when Mr Ely and Mrs Faro resumed intimate marital relations. No further Talaq was pronounced before Mr Ely died on 4 March 2010. [10] On 8 April 2010, however, Mr Ely’s daughter from an earlier marriage, Ms Naziema Bardien, obtained a certificate from the MJC, without Mrs Faro’s knowledge, declaring that the marriage between Mrs Faro and Mr Ely had been annulled. On 21 April 2010, Mrs Faro was appointed as the executrix of Mr Ely’s estate. The Master then informed her that Mr Ely’s estate could not be wound-up until the dispute with regard to her marital status had been resolved. After meeting with Ms Bardien and the MJC, the Master, on 7 December 2011, resolved that the Muslim marriage had been validly terminated. On 10 April 2012, Ms Bingham was appointed as the executrix of Mr Ely’s estate and she then proceeded to wind-up the estate. [11] The WLC assisted Mrs Faro to lodge an objection to Mr Ely’s liquidation and distribution account, but to no avail. In 2013, Mrs Faro launched an application in the high court for relief that included: (a) the setting aside of the Master’s failure to uphold an objection that would have resulted in the recognition of Mrs Faro as Mr Ely’s spouse for the purposes of the Intestate Succession Act 81 of 1987 (Intestate Succession Act) and the Maintenance of Surviving Spouses Act 27 of 1990 (the Maintenance of Surviving Spouses Act); (b) for a declaration that Muslim marriages are deemed to be valid marriages in terms of the Marriage Act; in the alternative, for a declaration that the common law definition of marriage be extended to include Muslim marriages; and further in the alternative, an order directing the Minister of Justice to put in place policies and procedures in accordance with the Promotion of Administrative Justice Act 3 of 2000 (PAJA), to regulate the holding of enquiries by the Master into the validity of a Muslim marriage, where persons purporting to be spouses of a Muslim marriage seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act and the Maintenance of Surviving Spouses Act; and (c) declaring that the Minister’s failure to implement such policies and procedures to be unlawful and unconstitutional. The matter came before Rogers J, who upheld the relief claimed in (a), declaring that the marriage between Mrs Faro and Mr Ely subsisted at the date of the latter’s death, and that she be recognised as a ‘spouse’ for the purposes of the Intestate Succession Act, and as a ‘survivor’ for purposes of the Maintenance of Surviving Spouses Act. Mrs Faro thereafter approached the high court in respect of the remaining issues. The Esau application [12] In this application, Mrs Ruwayda Esau launched an urgent application for an interdict against Mr Esau, (with whom she had concluded a Muslim marriage in October 1999), the Government Employees Pension Fund (GEPF), the Minister of Justice, the Cabinet of the Republic of South Africa and the MJC. The interdict was to prevent the GEPF from paying out to Mr Esau 50% of his pension interest, pending an action to be instituted by Mrs Esau for payment of the pension interest to her. The interdict was granted. Mrs Esau’s claim in the action proceedings was premised on the State’s failure to enact legislation recognising and regulating Muslim marriages, based on constitutional principles and on the existence of a universal partnership. The issue of the constitutional claim was separated from the other issues and it was heard in the high court in a consolidated hearing. Judgment of the high court. [13] The three aforegoing applications, that of the WLC, Mrs Faro and Ms Esau, were consolidated and came before the full bench of the Western Cape Division of the High Court (the high court). Boqwana J (with whom Desai and Salie-Hlope JJ concurred) issued the following order: ‘1. It is declared that the State is obliged by section 7(2) of the Constitution to respect, protect, promote and fulfil the rights in sections 9, 10, 15, 28, 31 and 34 of the Constitution by preparing, initiating, introducing, enacting and bringing into operation, diligently and without delay as required by section 237 of the Constitution, legislation to recognise marriages solemnised in accordance with the tenets of Sharia law (“Muslim marriages”) as valid marriages and to regulate the consequences of such recognition. 2. It is declared that the President and the Cabinet have failed to fulfil their respective constitutional obligations as stipulated in paragraph 1 above and such conduct is invalid. 3. The President and Cabinet together with Parliament are directed to rectify the failure within 24 months of the date of this order as contemplated in paragraph 1 above. 4. In the event that the contemplated legislation is referred to the Constitutional Court by the President in terms of section 79(4)(b) of the Constitution, or is referred by members of the National Assembly in terms of section 80 of the Constitution, the relevant deadline will be suspended pending the final determination of the matter by the Constitutional Court; 5. In the event that legislation as contemplated in paragraph 1 above is not enacted within 24 months from the date of this order or such later date as contemplated in paragraph 4 above, and until such time as the coming into force thereafter of such contemplated legislation, the following order shall come into effect: 5.1 It is declared that a union, validly concluded as a marriage in terms of Sharia law and which subsists at the time this order becomes operative, may (even after its dissolution in terms of Sharia law) be dissolved in accordance with the Divorce Act 70 of 1979 and all the provisions of that Act shall be applicable, provided that the provisions of section 7(3) shall apply to such a union regardless of when it was concluded; and 5.2 In the case of a husband who is a spouse in more than one Muslim marriage, the court shall: (a) take into consideration all relevant factors including any contract or agreement and must make any equitable order that it deems just; and (b) may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings. 5.3 If administrative or practical problems arise in the implementation of this order, any interested person may approach this Court for a variation of this order. 5.4 The Department of Home Affairs and the Department of Justice shall publish a summary of the orders in paragraphs 5.1 to 5.2 above widely in newspapers and on radio stations, whatever is feasible, without unreasonable delay. 6. An order directing the Minister of Justice to put in place policies and procedures regulating the holding of enquiries by the Master of the High Court into the validity of marriages solemnised in accordance with the tenets of Islamic law is refused. 7. An order declaring the pro forma marriage contract attached as annexure “A” to the Women’s Legal Centre Trust’s founding affidavit, to be contrary to public policy is refused. 8. In respect of matters under case numbers 22481/2014 and 4466/2013, the President, the Minister of Justice and the Minister of Home Affairs are to pay the costs of the Women’s Legal Centre Trust respectively, such costs to include costs of three counsel to the extent of their employment. 9. In respect of the matter under case number 13877/2015: 9.1 Ruwayda Esau’s claim to a part of the Magamat Riethaw Esau’s estate, if any, is postponed for hearing at trial along with Parts B and E of the particulars of claim. 9.2 The Cabinet and the Minister of Justice shall pay Ruwayda Esau’s costs in respect of Claim A, such costs to include costs of two counsel to the extent of their employment.’ [14] The high court granted the President and the Minister of Justice leave to appeal to this Court. It also granted the WLC and Mrs Esau leave to cross-appeal. The cross-appeal of the WLC was directed at paras 5 and 6 of the order of the high court. Mrs Esau cross- appealed to obtain effective interim relief pending the legislation envisaged in the order of the high court. The WLC also obtained leave to conditionally cross-appeal: in the event of the appeal succeeding in respect of the main relief, it would seek the granting of the alternative relief that it had sought in the high court. The South African Human Rights Commission (SAHRC) and Mrs Faro also opposed the appeal. The Commission for Gender Equality and the United Ulama Council of South Africa (UUCSA) presented argument to this Court as amici curiae. [15] During argument in this Court the appellants made concessions that had a profound impact on the determination of the appeal. After having had the opportunity to take specific instructions, counsel for the appellants placed on record that they conceded that the Marriage Act and the Divorce Act infringed the constitutional rights to equality, dignity and access to justice of women in Muslim marriages in that they failed to recognise Muslim marriages as valid marriages for all purposes. The appellants conceded too that the rights of children born in Muslim marriages were, under s 28 of the Constitution, similarly infringed. Thus the appellants, in essence, acceded to the alternative relief. These concessions were made fairly and correctly, for the reasons elaborated upon in the high court judgment. For present purposes it suffices to emphasise the following. [16] The considerations that led Nkabinde J to conclude in Hassam9 that the differentiation in respect of Muslim women amounted to discrimination on a ground listed in s 9(3), are of equal application in this instance: 9 Hassam fn 7 paras 30-32. ‘The marriage between the applicant and the deceased, being polygynous, does not enjoy the status of a marriage under the Marriage Act. The Act differentiates between widows married in terms of the Marriage Act and those married in terms of Muslim rites; between widows in monogamous Muslim marriages and those in polygynous Muslim marriages; and between widows in polygynous customary marriages and those in polygynous Muslim marriages. The Act works to the detriment of Muslim women and not Muslim men. I am satisfied that the Act differentiates between the groups outlined above. Having found that the Act differentiates between widows in polygynous Muslim marriages like the applicant’s on the one hand, and widows who were married in terms of the Marriage Act, widows in monogamous Muslim marriages and widows in polygynous customary marriages, on the other, the question arises whether the differentiation amounts to discrimination on any of the listed grounds in section 9 of the Constitution. The answer is yes. As I have indicated above our jurisprudence on equality has made it clear that the nature of the discrimination must be analysed contextually and in the light of our history. It is clear that in the past, Muslim marriages, whether polygynous or not, were deprived of legal recognition for reasons which do not withstand constitutional scrutiny today. It bears emphasis that our Constitution not only tolerates but celebrates the diversity of our nation. The celebration of that diversity constitutes a rejection of reasoning such as that to be found in Seedat’s Executors v The Master (Natal), where the court declined to recognise a widow of a Muslim marriage as a surviving spouse because a Muslim marriage, for the very reason that it was potentially polygynous, was said to be “reprobated by the majority of civilised peoples, on grounds of morality and religion”.’ [17] In Moosa NO and Others v Minister of Justice and Correctional Services and Others10 the Constitutional Court accurately described how the persistent non-recognition of Muslim marriages infringed the right to dignity of Muslim women: ‘The non-recognition of her right to be treated as a “surviving spouse” for the purposes of the Wills Act, and its concomitant denial of her right to inherit from her deceased husband’s will, strikes at the very heart of her marriage of fifty years, her position in her family and her standing in her community. It tells her that her marriage was, and is, not worthy of legal protection. Its effect is to stigmatise her marriage, diminish her self-worth and increase her feeling of vulnerability as a Muslim woman. Furthermore, as the WLC correctly submitted, this vulnerability is compounded because there is currently no legislation that recognises Muslim marriages or regulates their consequences.’ 10 Moosa NO and Others v Minister of Justice and Correctional Services and Others [2018] ZACC 19; 2018 (5) SA 13 (CC) para 16. [18] The rights to protection of children from Muslim marriages are infringed in that upon the dissolution of the marriage they are not afforded the ‘automatic’ court oversight of s 6 of the Divorce Act in relation to their care and maintenance. In addition, they are not protected by a statutory minimum age for consent to marriage. Neither s 24 of the Marriage Act11 nor s 12(2)(a) of the Children’s Act 38 of 200512 are applicable. It goes without saying that the non-recognition of Muslim marriages for women infringes the right to access to courts under s 34 of the Constitution. [19] In the light of the concessions made by the appellants, we requested the parties to formulate a draft order by agreement or, at least, to find substantial common ground. For this purpose the matter stood down from 26 August 2020 until 30 September 2020. Nevertheless, the parties were unable to agree to a draft order. The appellants and the WLC (supported by the SAHRC) each placed their own draft order before us. However, a perusal of the draft orders indicated that a lot of common ground had indeed been found, and that the issues for determination were reduced markedly. We appreciate the efforts and inputs of the parties and the amici in this regard. [20] In order to demonstrate the areas of agreement and the issues that remain for decision, it is expedient to set out the draft order presented by the appellants, as amplified in argument: ‘1. The appeal and the cross-appeals succeed in part and the order of the court a quo is set aside and replaced with the following order: 2. The Marriage Act 25 of 1961 and the Divorce Act 70 of 1979 (the Divorce Act) are declared to be inconsistent with sections 9,10, 28 and 34 of the Constitution of the Republic of South Africa, 1996, in that they fail to recognise marriages solemnised in accordance with Sharia law (Muslim 11 Section 24 provides : ‘24 Marriage of minors: (1) No marriage officer shall solemnize a marriage between parties of whom one or both are minors unless the consent to the party or parties which is legally required for the purpose of contracting the marriage has been granted and furnished to him in writing. (2) For the purposes of subsection (1) a minor does not include a person who is under the age of twenty-one years and previously contracted a valid marriage which has been dissolved by death or divorce.’ 12 Section 12 provides: ‘12 Social, cultural and religious practices: (1) . . . (2) A child- (a) below the minimum age set by law for a valid marriage may not be given out in marriage or engagement.’ marriages) as valid marriages (which have not been registered as civil marriages) as being valid for all purposes in South Africa, and to regulate the consequences of such recognition. 3. It is declared that s 6 of the Divorce Act is inconsistent with sections 9, 10, 28(2) and 34 of the Constitution insofar as it fails to provide for mechanisms to safeguard the welfare of minor or dependent children of Muslim marriages at the time of dissolution of the Muslim marriage in the same or similar manners as it provides mechanisms to safeguard the welfare of minor or dependent children of other marriages that are being dissolved. 4. It is declared that s 7(3) of the Divorce Act is inconsistent with sections 9,10, and 34 of the Constitution insofar as it fails to provide that at the dissolution of a Muslim marriage for the transfer of assets of a spouse in a Muslim marriage where such spouse contributed directly or indirectly to the maintenance or increase of the estate of the other party during the subsistence of the Muslim marriage either by the rendering of services or the saving of expenses, which would otherwise have been incurred or in any other manner. 5. It is declared that s 9(1) of the Divorce Act is inconsistent with sections 9, 10 and 34 of the Constitution insofar as it fails to make provision for the forfeiture of the patrimonial benefits of a Muslim marriage at the time of its dissolution in the same or similar terms as is provided for in s 9(1) of the Divorce Act in respect of other marriages. 6. The declarations of constitutional invalidity are referred to the Constitutional Court for confirmation. 7. The common law definition of marriage is declared to be inconsistent with the Constitution and invalid to the extent that it excludes Muslim marriages. 8. The declarations of invalidity in paras 2 to 5 above are suspended for a period of 24 months to enable the President and Cabinet, together with Parliament to remedy the foregoing defects by either amending existing legislation, or passing new legislation within 24 months, in order to ensure the recognition of Muslim marriages as valid marriages for all purposes in South Africa and to regulate the consequences arising from such recognition. 9. Pending the coming into force of legislation or amendments to existing legislation referred to in para 8: 9.1. It is declared that a union, validly concluded as a marriage in terms of Sharia law and subsisting at the date of this Order, or, which has been terminated in terms of Sharia law, but in respect of which legal proceedings have been instituted and which proceedings have not been finally determined as at the date of this order, may be dissolved in accordance with the Divorce Act as follows: 9.1.1 all the provisions of the Divorce Act shall be applicable save that all Muslim marriages shall be treated as if they are out of community of property “unless agreed otherwise”, and 9.1.2 the provisions of s 7(3) of Divorce Act shall apply to such a union regardless of when it was concluded. 9.2. In the case of a husband who is a spouse in more than one Muslim marriage, the court shall: 9.2.1 take into consideration all relevant factors including any contract or agreement and must make any equitable order that it deems just, and; 9.2.2 may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings. 9.3 It is declared that from the date of this order s 12(2) of the Children’s Act 38 of 2005 applies to Muslim marriages concluded after the date of this order. 9.4 For the purpose of applying paragraph 9.3 above, the provisions of ss 3(1)(a), 3(3)(a) and 3(3)(b), 3(4)(a) and 3(4)(b), and 3(5) of the Recognition of Customary Marriages Act 120 of 1998 shall apply, mutatis mutandis to Muslim marriages. 9.5 If serious administrative or practical problems arise in the implementation of this order, any interested person may approach this Court for a variation of this order. 9.6 The Department of Home Affairs and the Department of Justice shall publish a summary of the orders in paragraphs 9.1 to 9.3 above widely in newspapers and on radio stations, whatever is feasible, without unreasonable delay. 10. In the matter of Faro v The Minister of Justice and Constitutional Development and Others (Case no 4466/2013), no order is made in relation to the cross-appeal. It is recorded that: 10.1 In recognition of the fact that there currently are no policies and procedures in place for purposes of determining disputes arising in relation to the validity of Muslim marriages and the validity of divorces granted by any person or association according to the tenets of Sharia law (Muslim divorces) in circumstances where persons purport to be spouses in accordance with the tenets of Sharia law of deceased persons and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act and/or the Maintenance of Surviving Spouses Act, the Minister of Justice undertakes within 18 months of the granting of this order to put in place the necessary mechanisms to ensure that there is a procedure by which the Master may resolve disputes arising in relation to the validity of Muslim marriages and Muslim divorces, in all cases where a dispute arises as to whether or not the persons purport to be married in accordance with the tenets of Sharia law to the deceased persons and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act and/or the Maintenance of Surviving Spouses Act ; 10.2 In the event that the Minister of Justice fails to comply with the undertaking in para 10.1, the appellants may enrol the appeal in this Court on the same papers, duly supplemented with this recordal, in order to seek further relief. 11. The Appellants (the President and the Minister of Justice) shall in respect of the matter under case no 13877/2015 (Esau) pay Ruwayda Esau’s costs in respect of claim A (including the costs of the appeal and cross-appeal) such costs to include the costs of three counsel to the extent of their employment. 12. In respect of matters under Case nos 22481/2014 and 4466/2013: 12.1 Paragraph 8 of the order of the Western Cape High Court shall stand, in terms whereof the President, the Minister of Justice and the Minister of Home Affairs are to pay the costs of the Women’s Legal Centre Trust respectively, such costs to include the costs of three counsel to the extent of their employment. 12.2 The President and the Minister of Justice shall pay the Women’s Legal Centre’s costs of the appeal and the cross-appeal, such costs to include the costs of three counsel to the extent of their employment.’ [21] The WLC and the SAHRC contended that the appeal against para 1 of the order of the high court should be dismissed. This raised the question whether the Constitution obliged the State to enact legislation. The WLC agreed that in the event of this question being answered in the negative, orders should be made in terms of paras 1, 2, 3, 4 and 5 of the appellants’ draft, save that paras 2 to 5 should include a reference to s 15 of the Constitution. It was submitted that the relevant provisions are also inconsistent with s 15. The WLC agreed that paras 6, 7, 8, 9.2, 9.3, 9.4, 9.5 and 9.6 should, in any event, be granted. In respect of the regime to be put in place pending the coming into force of the envisaged legislation, it proposed that the application of para 9.1 should not be limited to existing Muslim marriages. Its stance was that the interim position as set out in para 9.1 should apply to all Muslim marriages which subsisted on or after 27 April 1994, regardless of: when they were concluded; when they were dissolved (in terms of Sharia law); whether litigation in respect of such dissolution and/or its consequences is pending; and irrespective of the matrimonial property regime that applied. It suggested, however, that this order should not invalidate a winding-up of a deceased estate that has been finalised or the transfer of property by a party to the marriage that has been affected, unless: the property is transferred to a person or legal entity connected to a party to the divorce action; the transferee was aware at the time of transfer that the property formed part of assets in a divorce action; or the transferee was married or had concluded a civil union with a party to the divorce action. The draft orders reflected agreements that had been reached in the Esau and Faro matters, and nothing more needs to be said about the issues in those matters. [22] It follows that the following issues remained for decision: (a) Whether the Constitution places an obligation on the State to prepare, initiate, introduce and bring into operation legislation to recognise Muslim marriages as valid marriages and to regulate the consequences of such recognition; (b) whether the provisions in question are inconsistent with s 15 of the Constitution; and (c) whether the interim measure should have retrospective operation as contended for. We address these issues in turn. Is the State under an obligation to enact legislation under the Constitution [23] The SAHRC contended that the State is bound by international instruments to which it is a party, to enact legislation recognising and regulating Muslim marriages. Its argument was based on four instruments that had been ratified by Parliament under s 231(2) of the Constitution but not domesticated under s 231(4). They are: (a) The United Nations Convention on the Elimination of all forms of Discrimination against Women (CEDAW); (b) the International Covenant on Civil and Political Rights (the ICCPR); (c) the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa (the AC Women’s Protocol); and (d) the SADC Protocol on Gender and Development (the SADC Gender Protocol). [24] However, a perusal of the provisions relied upon, indicate that their purpose and import are to advance equality between men and women or spouses. They require State parties to enact legislation and take measures to this end. By way of example, we refer to Article 16(1) of CEDAW;13 Article 23(4) of the ICCPR;14 Article 7 of the AC Women’s Protocol15 and Article 8(1) of the SADC Gender Protocol.16 We were not referred to any provision that requires legislation to establish equality between women that are married under different marital regimes. In the result we find that these instruments do not oblige the State to enact the legislation relevant to this matter. 13 Article 16(1) of CEDAW requires State parties to: ‘take all appropriate measures to eliminate discrimination against women in all matters relating to marriage and family relations and in particular shall ensure, on a basis of equality of men and women: (a) The same right to enter into marriage; (b) The same right freely to choose a spouse and to enter into marriage only with their free and full consent; (c) The same rights and responsibilities during marriage and at its dissolution; (d) The same rights and responsibilities as parents, irrespective of their marital status, in matters relating to their children; in all cases the interests of the children shall be paramount; (e) The same rights to decide freely and responsibly on the number and spacing of their children and to have access to the information, education and means to enable them to exercise these rights; (f) The same rights and responsibilities with regard to guardianship, wardship, trusteeship and adoption of children, or similar institutions where these concepts exist in national legislation; in all cases the interests of the children shall be paramount; (g) The same personal rights as husband and wife, including the right to choose a family name, a profession and an occupation; (h) The same rights for both spouses in respect of the ownership, acquisition, management, administration, enjoyment and disposition of property, whether free of charge or for a valuable consideration.’ 14 Article 23(4) of the ICCPR provide that: ‘State Parties to the present Covenant shall take appropriate steps to ensure equality of rights and responsibilities of spouses as to marriage and its dissolution. In the case of dissolution, provision shall be made for the necessary protection of children.’ 15 Article 7 provides that: ‘States Parties shall enact appropriate legislation to ensure that women and men enjoy the same rights in case of separation, divorce or annulment of marriage. In this regard, they shall ensure that: (a) separation, divorce or annulment of a marriage shall be effected by judicial order; (b) women and men shall have the same rights to seek separation, divorce or annulment of a marriage; (c) in case of separation, divorce or annulment of marriage, women and men shall have reciprocal rights and responsibilities towards their children. In any case, the interests of the children shall be given paramount importance; (d) in case of separation, divorce or annulment of marriage, women and men shall have the right to an equitable sharing of the joint property deriving from the marriage.’ 16 Articles 8 (1), (2) and (3) of the SADC Protocol provide: ‘1. State Parties shall enact and adopt appropriate legislative, administrative and other measures to ensure that women and men enjoy equal rights in marriage and are regarded as equal partners in marriage. 2. Legislation on marriage shall ensure that: (a) no person under the age of 18 shall marry unless otherwise specified by law which takes into account the best interests and welfare of the child; (b) every marriage takes place with the free and full consent of both parties; (c) every marriage, including civil, religious, traditional or customary, is registered in accordance with national laws; and (d) during the subsistence of their marriage the parties shall have reciprocal rights and duties towards their children with the best interests of the children always being paramount. 3. States Parties shall enact and adopt appropriate legislative and other measures to ensure that where spouses separate, divorce or have their marriage annulled: (a) they shall have reciprocal rights and duties towards their children with the best interest of the children always being paramount; and (b) they shall, subject to the choice of any marriage regime or marriage contract, have equitable share of property acquired during their relationship.’ [25] As we have indicated, the WLC’s case was that s 7(2) of the Constitution placed an enforceable obligation on the State to enact the legislation that it advocates for. Section 7 of the Constitution reads: ‘7 Rights (1) This Bill of Rights is a cornerstone of democracy in South Africa. It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality and freedom. (2) The state must respect, protect, promote and fulfil the rights in the Bill of Rights. (3) The rights in the Bill of Rights are subject to the limitations contained or referred to in section 36, or elsewhere in the Bill.’ [26] In arriving at its conclusion, on the issues relevant before this Court, the high court, reasoned,17 inter alia: ‘Thus, as the State is under a section 7(2) duty “to respect, protect, promote and fulfil the rights in the Bill of Rights”, this duty may be invoked where there is an alleged violation of rights in the Bill of Rights by the State. This in turn may trigger the courts’ powers to determine whether the State has fulfilled its obligations under section 7(2). How the State fulfils the duty is within its own power to determine. However, what steps it takes must be “reasonable and effective”. The question of what is reasonable and effective might be answered in part by examining the nature of the rights violations and in part by international law, which courts are enjoined to consider when interpreting the Bill of Rights.’ [27] The high court placed much reliance on Glenister v President of the Republic of South Africa and Others18 where Moseneke DCJ and Cameron J, for the majority, said:19 ‘The obligations in these [international] conventions are clear and they are unequivocal. They impose on the Republic the duty in international law to create an anti-corruption unit that has the necessary independence. That duty exists not only in the international sphere, and is enforceable not only there. Our Constitution appropriates the obligation for itself, and draws it deeply into its heart, by requiring the State to fulfil it in the domestic sphere. In understanding how it does so, the starting point is s 7(2), which requires the State to respect, protect, promote and fulfil the rights in the Bill of Rights. This court has held that in some circumstances this provision imposes a positive obligation on the State and its organs “to provide appropriate protection to everyone through laws and structures designed to afford such protection”. Implicit in s 7(2) is the requirement that the 17 Women's Legal Centre Trust v President of the Republic of South Africa and Others, Faro v Bingham NO and Others, Esau v Esau and Others [2018] 4 All SA 551 (WCC); 2018 (6) SA 598 (WCC) para 178. 18 Glenister v President of the Republic of South Africa and Others 2011 (3) SA 347 (CC); [2011] ZACC 6. 19 Glenister fn 18 para 189. steps the State takes to respect, protect, promote and fulfil constitutional rights must be reasonable and effective.’ And:20 ‘And since in terms of s 8(1), the Bill of Rights “binds the legislature, the executive, the judiciary and all organs of state”, it follows that the executive, when exercising the powers granted to it under the Constitution, including the power to prepare and initiate legislation, and in some circumstances Parliament, when enacting legislation, must give effect to the obligations s 7(2) imposes on the State.’ [28] In Glenister, the majority held that international law which was ratified had become part of our law and part of our Constitution and this, therefore, imposed an obligation on the State to legislate for an anti-corruption unit. The Glenister judgment was primarily concerned with ss 39(1)(b) and 231 of the Constitution, two provisions in the Constitution that regulate the impact of international law on the Republic. Both sections were concerned with the State’s legal obligation in the international sphere. Section 39(1)(b) provides that when interpreting the Bill of Rights, a court, tribunal or forum must consider international law. Section 231(2) is directed at the Republic’s obligations under international law. [29] It is important to look briefly to what transpired in Glenister. The applications concerned the constitutional validity of two statutes (the two impugned laws), the National Prosecuting Authority Amendment Act 56 of 2008 (NPAA Act) and the South African Police Service Amendment Act 57 of 2008 (SAPSA Act). The gravamen of the complaint related to the disbanding of the Directorate of Special Operations (DSO), a specialised crime- fighting unit that was located within the National Prosecuting Authority (NPA), and its replacement with the Directorate of Priority Crime Investigation (DPCI) which is located within the South African Police Service (SAPS). It was the effect of these two statutes that was at the centre of the challenge in Glenister. [30] The majority judgment stressed that the Constitution did not, in express terms, command that a corruption-fighting unit should be established, but espoused that s 7(2) cast an especial duty upon the State to create efficient anti-corruption mechanisms.21 Moseneke DCJ and Cameron J said that ‘[i]n order to understand the content of the 20 Glenister fn 18 para 190. 21 Glenister fn 18 para 175. constitutionally imposed requirement of independence we have to resort to international agreements that bind the Republic’ and that ‘our Constitution takes into its very heart obligations to which the Republic, through the solemn resolution of Parliament, has acceded, and which are binding on the Republic in international law, and makes them the measure of the State’s conduct in fulfilling its obligations in relation to the Bill of Rights’.22 [31] Moseneke DCJ and Cameron J held that the court’s obligation to consider international law when interpreting the Bill of Rights was of pivotal importance, due to the direct impact of s 39(1)(b). Thus, the Constitutional Court concluded in Glenister that the fact that the Republic was bound under international law to create an anti-corruption unit, with appropriate independence, was of the foremost interpretive significance in determining whether the State had fulfilled its duty as required by s 7(2). In reaching this conclusion the court said that ‘the fact that s 231(2) provides that an international agreement that Parliament ratifies “binds the Republic” is of prime significance’ because it ‘makes it unreasonable for the State, in fulfilling its obligations under s 7(2), to create an anti-corruption entity that lacks sufficient independence’.23 Notably the court pointed out that ‘[i]t is possible to determine the content of the obligation s 7(2) imposes on the State without taking international law into account’ but that ‘s 39(1)(b) makes it constitutionally obligatory that we should’.24 In our view, it is thus clear that the Constitutional Court in Glenister sourced the obligations imposed on the State from two provisions of the Constitution which made it obligatory to do so. [32] Thus, the true role that s 7(2) played in specific circumstances of Glenister,25 appears from the following: ‘That the Republic is bound under international law to create an anti-corruption unit with appropriate independence is of the foremost interpretive significance in determining whether the State has fulfilled its duty to respect, protect, promote and fulfil the rights in the Bill of Rights, as s 7(2) requires. Section 7(2) implicitly demands that the steps the State takes must be reasonable. To create an anti-corruption unit that is not adequately independent would not constitute a reasonable step. In reaching this conclusion, the fact that s 231(2) provides that an international agreement that Parliament ratifies “binds the Republic” is of prime significance. It makes it unreasonable for 22 Glenister fn 18 para 178. 23 Glenister fn 18 para 194. 24 Glenister fn 18 para 201. 25 Glenister fn 18 para 194. the State, in fulfilling its obligations under s 7(2), to create an anti-corruption entity that lacks sufficient independence.’ [33] It is so that in Glenister it was stated that in some circumstances s 7(2) imposes a positive obligation on the State.26 It relied on a dictum in Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) para 4427 where the court said: ‘Under both the IC [Interim Constitution] and the Constitution, the Bill of Rights entrenches the rights to life, human dignity and freedom and security of the person. The Bill of Rights binds the State and all of its organs. Section 7(1) of the IC [Interim Constitution] provided: “This chapter shall bind all legislative and executive organs of State at all levels of government.” Section 8(1) of the Constitution provides: “The Bill of Rights applies to all law, and binds the Legislature, the Executive, the Judiciary and all organs of State.’’ It follows that there is a duty imposed on the State and all of its organs not to perform any act that infringes these rights. In some circumstances there would also be a positive component which obliges the State and its organs to provide appropriate protection to everyone through laws and structures designed to afford such protection.’ [34] These dicta do not prescribe that s 7(2) could oblige the State to enact legislation on a specific subject, nor that a court may order it to do so. They state that there may be a positive obligation on the State ‘to provide appropriate protection to everyone through laws and structures designed to afford such protection’. What the appropriate protection should be, is for the State to determine. This was put as follows in Glenister:28 ‘Now plainly there are many ways in which the State can fulfil its duty to take positive measures to respect, protect, promote and fulfil the rights in the Bill of Rights. This court will not be prescriptive as to what measures the State takes, as long as they fall within the range of possible conduct that a reasonable decision-maker in the circumstances may adopt. A range of possible measures is therefore open to the State, all of which will accord with the duty the Constitution imposes, so long as the measures taken are reasonable.’ 26 Glenister fn 18 para 189. 27 Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) para 44. 28 Glenister fn 18 para 191. [35] Section 7(2) is a broad general provision that must be read in the context of the Constitution and specifically in the context of the carefully constructed separation of powers entrenched in the Constitution. The principle of separation of powers is crucial to our democracy. The Constitutional Court has endorsed the principle of separation of powers in various judgments. In Ex Parte Chairperson of the Constitutional Assembly: In Re Certification of the Constitution of the Republic of South Africa29 it was said: ‘The principle of separation of powers, on the one hand, recognises the functional independence of branches of government. On the other hand, the principle of checks and balances focuses on the desirability of ensuring that the constitutional order, as a totality, prevents the branches of government from usurping power from one another. In this sense it anticipates the necessary or unavoidable intrusion of one branch on the terrain of another. No constitutional scheme can reflect a complete separation of powers: the scheme is always one of partial separation.’30 [36] In Doctors for Life International, the Constitutional Court said:31 ‘The constitutional principle of separation of powers requires that other branches of government refrain from interfering in parliamentary proceedings. This principle is not simply an abstract notion; it is reflected in the very structure of our government. The structure of the provisions entrusting and separating powers between the legislative, executive and judicial branches reflects the concept of separation of powers. The principle “has important consequences for the way in which and the institutions by which power can be exercised”. Courts must be conscious of the vital limits on judicial authority and the Constitution's design to leave certain matters to other branches of government. They too must observe the constitutional limits of their authority. This means that the Judiciary should not interfere in the processes of other branches of government unless to do so is mandated by the Constitution.’ [37] Further, in Doctors for Life International the following was said:32 ‘But under our constitutional democracy, the Constitution is the supreme law. It is binding on all branches of government and no less on Parliament. When it exercises its legislative authority, Parliament “must act in accordance with, and within the limits of, the Constitution”, and the supremacy of the Constitution requires that “the obligations imposed by it must be fulfilled”. Courts 29 Ex Parte Chairperson of the Constitutional Assembly: In Re Certification of the Constitution of the Republic of South Africa 1996 (4) SA 744 (CC). 30 Ex Parte Chairperson fn 29 para 109. See also Glenister v President of the Republic of South Africa and Others [2008] ZACC 19; 2009 (1) SA 287 (CC) para 35. 31 Doctors for Life International v Speaker of the National Assembly and Others 2006 (6) SA 416 (CC) para 37. 32 Doctors for Life fn 31 para 38. are required by the Constitution “to ensure that all branches of government act within the law” and fulfil their constitutional obligation.’ And later:33 ‘Courts have traditionally resisted intrusions into the internal procedures of other branches of government. They have done this out of comity and in particular, out of respect for the principle of separation of powers. But at the same time they have claimed their right to intervene in order to prevent any violation of the Constitution. To reconcile their judicial role to uphold the Constitution, on the one hand and the need to respect the other branches of government, on the other, courts have developed a settled practice or general rule of jurisdiction that governs judicial intervention in the legislative process.’ And later still:34 ‘The primary duty of the courts in this country is to uphold the Constitution and the law ‘’which they must apply impartially and without fear, favour or prejudice”. And if in the process of performing their constitutional duty, courts intrude into the domain of other branches of government, that is an intrusion mandated by the Constitution. What courts should strive to achieve is the appropriate balance between their role as the ultimate guardians of the Constitution and the Rule of law including any obligation that Parliament is required to fulfil in respect of the passage of laws on the one hand and the respect which they are required to accord to other branches of government as required by the principle of separation of powers, on the other hand.’ [38] Similarly, in My Vote Counts NPC v Speaker of the National Assembly and Others,35 s 32 of the Constitution was directly and expressly implicated. The issue was whether Parliament had failed to fulfil an obligation the Constitution imposed on it in terms of s 32 of the Constitution. Section 32 provides: ‘(1) Everyone has the right of access to- (a) any information held by the state, and (b) any information that is held by another person and that is required for the exercise of or protection of any rights. (2) National legislation must be enacted to give effect to this right, and may provide for reasonable measures, to alleviate the administrative and financial burden on the State.’ 33 Doctors for Life fn 31 para 68. 34 Doctors for Life fn 31 para 70. 35 My Vote Counts NPC v Speaker of the National Assembly and Others 2016 (1) SA 132 (CC); [2015] ZACC 31. [39] As is clear from s 32, the State, in plain language, is specifically and expressly obliged to enact legislation contemplated in s 32(2). The specific question raised in My Vote Counts NPC was whether information on private funding of political parties was information that was required to exercise the right to vote. In essence, what the applicant required was information on the private funding of political parties to be made available in a manner that required disclosure by way of legislation, as a matter of continuous course rather than a once-off request. The State, the applicant contended, had failed to enact national legislation by failing to comply with its obligations in terms of s 32 of the Constitution. The respondents recognised the obligation that s 32(2) imposed but contended that Parliament had fulfilled it by enacting the Promotion of Access to Information Act 2 of 2000 (PAIA). The minority judgment concluded that Parliament had failed to fulfil its constitutional obligation to enact the legislation in s 32(2) of the Constitution. [40] The majority in My Vote Counts held that PAIA was passed in compliance with s 32(2) of the Constitution, and focused on providing information in terms of s 32(1) of the Constitution. It was for Parliament to make legislative choices as long as they were rational and constitutionally compliant. The majority held:36 ‘Despite its protestation to the contrary, what the applicant wants is but a thinly veiled attempt at prescribing to Parliament to legislate in a particular manner. By what dint of right can the applicant do so? None, in the present circumstances. That attempt impermissibly trenches on Parliament's terrain; and that is proscribed by the doctrine of separation of powers.’ And:37 ‘Also, we have demonstrated that the other basis of distinction, which is that the applicant is seeking relief of a special kind, cannot succeed for the simple reason that what the applicant is asking for flouts the separation of powers doctrine.’ The majority further said:38 ‘According to the minority judgment, what South Africa must have is systematic disclosure. It may well be that this is ideal; who knows? But that is not the issue. It is for Parliament to make legislative choices as long as they are rational and otherwise constitutionally compliant.’ 36 My Vote Counts NPC fn 35 para 156. 37 My Vote Counts NPC fn 35 para 172. 38 My Vote Counts NPC fn 35 para 155. [41] Section 85 of the Constitution circumscribes that the power (not obligation) to prepare and initiate legislation vests in the President and Cabinet. It provides that: ‘(1) The executive authority of the Republic is vested in the President. (2) The President exercises the executive authority, together with the other members of the Cabinet, by- (a) implementing national legislation except where the Constitution or an Act of Parliament provides otherwise; (b) developing and implementing national policy; (c) co-ordinating the functions of state departments and administrations; (d) preparing and initiating legislation; and (e) performing any other executive function provided for in the Constitution or in national legislation.’ [42] Sections 4339 and 4440 of the Constitution stipulate that the legislative authority in the national sphere of government is exclusively vested in Parliament. In terms of s 42(1) 39 Section 43 provides: ‘Legislative authority of the Republic In the Republic, the legislative authority- (a) of the national sphere of government is vested in Parliament, as set out in section 44; (b) of the provincial sphere of government is vested in the provincial legislatures, as set out in section 104; and (c) of the local sphere of government is vested in the Municipal Councils, as set out in section 156.’ 40 Section 44 provides: ‘National legislative authority (1) The national legislative authority as vested in Parliament- (a) confers on the National Assembly the power- (i) to amend the Constitution; (ii) to pass legislation with regard to any matter, including a matter within a functional area listed in Schedule 4, but excluding, subject to subsection (2), a matter within a functional area listed in Schedule 5; and (iii) to assign any of its legislative powers, except the power to amend the Constitution, to any legislative body in another sphere of government; and (b) confers on the National Council of Provinces the power- (i) to participate in amending the Constitution in accordance with section 74; (ii) to pass, in accordance with section 76, legislation with regard to any matter within a functional area listed in Schedule 4 and any other matter required by the Constitution to be passed in accordance with section 76; and (iii) to consider, in accordance with section 75, any other legislation passed by the National Assembly. (2) Parliament may intervene, by passing legislation in accordance with section 76 (1), with regard to a matter falling within a functional area listed in Schedule 5, when it is necessary- (a) to maintain national security; (b) to maintain economic unity; (c) to maintain essential national standards; (d) to establish minimum standards required for the rendering of services; or (e) to prevent unreasonable action taken by a province which is prejudicial to the interests of another province or to the country as a whole. (3) Legislation with regard to a matter that is reasonably necessary for, or incidental to, the effective exercise of a power concerning any matter listed in Schedule 4 is, for all purposes, legislation with regard to a matter listed in Schedule 4. of the Constitution, Parliament consists of the National Assembly41 and the National Council of Provinces.42 This legislative authority confers on the National Assembly and the National Council of Provinces the power to pass legislation. It is the responsibility of Parliament to make laws. The President and Cabinet are given a discretion as to the nature and content of the legislation that it prepares and initiates. It must follow that the obligation to enact legislation must be found outside of s 7(2) of the Constitution. [43] We know of no authority, and we were not referred to any, where the court directed the enactment of legislation outside of the parameters that we have mentioned, namely, international law and specific constitutional obligations, and solely under s 7(2) of the Constitution. In our view, for a court to order the State to enact legislation, on the basis of s 7(2) alone, in order to realise fundamental rights would be contrary to the doctrine of separation of powers, in light of the express provisions of ss 43, 44, and 85 of the Constitution. As we have said, these sections vest the power to initiate legislation in the President and Cabinet, and to adopt legislation in Parliament. This is not to say that this Court is insulating itself from constitutional responsibility. It is for Parliament to make legislative choices provided that they are rational and constitutionally compliant. And if they are not, the court must act in terms of s 172 of the Constitution.43 (4) When exercising its legislative authority; Parliament is bound only by the Constitution, and must act in accordance with, and within the limits of, the Constitution.’ 41 Section 55(1) of the Constitution provides: ‘55 Powers of National Assembly (1) In exercising its legislative power, the National Assembly may- (a) consider, pass, amend or reject any legislation before the Assembly; and (b) initiate or prepare legislation, except money Bills. (2) The National Assembly must provide for mechanisms- (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of- (i) the exercise of national executive authority, including the implementation of legislation; and (ii) any organ of state.’ 42 Section 68 of the Constitution provides: ‘Powers of National Council In exercising its legislative power, the National Council of Provinces may- (a) consider, pass, amend, propose amendments to or reject any legislation before the Council, in accordance with this Chapter; and (b) initiate or prepare legislation falling within a functional area listed in Schedule 4 or other legislation referred to in section 76 (3), but may not initiate or prepare money.’ 43 Section 172(1) provides: ‘(1) When deciding a constitutional matter within its power, a court- (a) must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency; and (b) may make any order that is just and equitable, including- (i) an order limiting the retrospective effect of the declaration of invalidity; and [44] As stated above, s 85(2) invests the executive authority with the power to prepare and initiate legislation. Sections 43 and 44 make it clear that the National Legislative authority is exclusively in the hands of Parliament. In our view, therefore, para 1 of the order of the high court should be set aside and replaced with the declaratory orders that the WLC had sought in the alternative, as encapsulated in the order set out below. Section 15 of the Constitution [45] Section 15 provides as follows: ‘Freedom of religion, belief and opinion 15. (1) Everyone has the right to freedom of conscience, religion, thought, belief and opinion. (2) Religious observances may be conducted at state or state-aided institutions, provided that- (a) those observances follow rules made by the appropriate public authorities; (b) they are conducted on an equitable basis; and (c) attendance at them is free and voluntary. (3) (a) This section does not prevent legislation recognising- (i) marriages concluded under any tradition, or a system of religious, personal or family law; or (ii) systems of personal and family law under any tradition, or adhered to by persons professing a particular religion. (b) Recognition in terms of paragraph (a) must be consistent with this section and the other provisions of the Constitution.’ [46] The Constitutional Court observed as follows in Minister of Home Affairs and Another v Fourie and Another:44 ‘The special provisions of s 15(3) are anchored in a section of the Constitution dedicated to protecting freedom of religion, belief and opinion. In this sense they acknowledge the right to be different in terms of the principles governing family life. The provision is manifestly designed to allow Parliament to adopt legislation, if it so wishes, recognising, say, African traditional marriages, or Islamic or Hindu marriages, as part of the law of the land, different in character from, but equal in status to general marriage law. Furthermore, subject to the important qualification of being consistent with the Constitution, such legislation could allow for a degree of legal pluralism under which particular consequences of such marriages would be accepted as part of the law of the land. (ii) an order suspending the declaration of invalidity for any period and on any conditions, to allow the competent authority to correct the defect.’ 44 Minister of Home Affairs and Another v Fourie and Another (Doctors for Life International and Others, Amici curiae); Lesbian and Gay Equality Project and Others v Minister of Home Affairs and Others 2006 (1) SA 524 (CC) para 108. The section “does not prevent” legislation recognising marriages or systems of family or personal law established by religion or tradition. It is not peremptory or even directive, but permissive. It certainly does not give automatic recognition to systems of personal or family law not accorded legal status by the common law, customary law or statute.’ (Our emphasis.) [47] Although the high court included a reference to s 15 of the Constitution in para 1 of its order, it did not make a finding that any provisions of the Marriage Act or the Divorce Act are inconsistent with the rights under s 15. This was also not the argument of the WLC. The crux of its argument, quite correctly, was that the permissive powers in s 15(3) do not prevent the legislation that it proposes. In the circumstances the aforesaid declarations of unconstitutionality should not contain a reference to s 15. Retrospectivity [48] As we have said, the WLC requested that this Court’s order, granting interim relief, be backdated to April 1994 and apply to Muslim marriages that had been dissolved under Sharia law as far back as 26 years ago. This is a far-reaching proposal that goes a long way beyond what it had sought in the high court and in the cross-appeal. This is a complex subject and the proposed retrospectivity may have profound unforeseen circumstances. Section 172(1) of the Constitution empowers this Court, upon a declaration of invalidity to make any order that is just and equitable. But there is a fundamental reason why the request should not be acceded to. It is the prerogative of Parliament to determine if and to what extent the legislation that it enacts regarding Muslim marriages, should apply retrospectively. The legislature is best placed to deal with the issue of retrospectivity. Only when the court makes a final declaration of constitutional invalidity, without suspension thereof, should it consider the consequences of the declaration and whether its retrospective effect should be ameliorated on just and equitable grounds. In the result we find that the interim measure proposed by the appellants is appropriate, fair and just. Conclusion [49] What this Court has done is craft an effective and comprehensive order in an endeavour to cure the hardship suffered by parties to Muslim marriages, especially vulnerable women and children, that will operate until appropriate legislation is put in place. In the circumstances, for the reasons advanced, the orders granted by the high court must be replaced and the interim relief in para 5 of the high court order cannot stand. [50] The importance of recognising Muslim marriages in our constitutional democracy cannot be gainsaid. In South Africa, Muslim women and children are a vulnerable group in a pluralistic society such as ours. The non-recognition of Muslim marriages is a travesty and a violation of the constitutional rights of women and children in particular, including, their right to dignity, to be free from unfair discrimination, their right to equality and to access to court. Appropriate recognition and regulation of Muslim marriages will afford protection and bring an end to the systematic and pervasive unfair discrimination, stigmatisation and marginalisation experienced by parties to Muslim marriages including, the most vulnerable, women and children. The following words of Moseneke J in Daniels45 resonate: ‘I am acutely alive to the scorn and palpable injustice the Muslim community has had to endure in the past on account of the legal non-recognition of marriages celebrated in accordance with Islamic law. The tenets of our Constitution promises religious voluntarism, diversity and independence within the context of the supremacy of the Constitution. The legislature has still not redressed, as foreshadowed by the Constitution, issues of inequality in relation to Islamic marriages and succession.’ [51] In the result the following order is made: The appeal and the cross-appeals succeed in part and the order of the court a quo is set aside and replaced with the following order: ‘1.1 The Marriage Act 25 of 1961 (the Marriage Act) and the Divorce Act 70 of 1979 (the Divorce Act) are declared to be inconsistent with ss 9, 10, 28 and 34 of the Constitution of the Republic of South Africa, 1996, in that they fail to recognise marriages solemnised in accordance with Sharia law (Muslim marriages) as valid marriages (which have not been registered as civil marriages) as being valid for all purposes in South Africa, and to regulate the consequences of such recognition. 1.2 It is declared that s 6 of the Divorce Act is inconsistent with ss 9, 10, 28(2) and 34 of the Constitution insofar as it fails to provide for mechanisms to safeguard the welfare of minor or dependent children of Muslim marriages at the time of dissolution of the Muslim marriage in the same or similar manner as it provides mechanisms to safeguard the welfare of minor or dependent children of other marriages that are being dissolved. 45 Daniels fn 6 para 108. 1.3 It is declared that s 7(3) of the Divorce Act is inconsistent with ss 9, 10, and 34 of the Constitution insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just. 1.4 It is declared that s 9(1) of the Divorce Act is inconsistent with ss 9, 10 and 34 of the Constitution insofar as it fails to make provision for the forfeiture of the patrimonial benefits of a Muslim marriage at the time of its dissolution in the same or similar terms as it does in respect of other marriages. 1.5 The declarations of constitutional invalidity are referred to the Constitutional Court for confirmation. 1.6 The common law definition of marriage is declared to be inconsistent with the Constitution and invalid to the extent that it excludes Muslim marriages. 1.7 The declarations of invalidity in paras 1.1 to 1.4 above are suspended for a period of 24 months to enable the President and Cabinet, together with Parliament to remedy the foregoing defects by either amending existing legislation, or passing new legislation within 24 months, in order to ensure the recognition of Muslim marriages as valid marriages for all purposes in South Africa and to regulate the consequences arising from such recognition. 1.8 Pending the coming into force of legislation or amendments to existing legislation referred to in para 1.7, it is declared that a union, validly concluded as a marriage in terms of Sharia law and subsisting at the date of this order, or, which has been terminated in terms of Sharia law, but in respect of which legal proceedings have been instituted and which proceedings have not been finally determined as at the date of this order, may be dissolved in accordance with the Divorce Act as follows: (a) all the provisions of the Divorce Act shall be applicable save that all Muslim marriages shall be treated as if they are out of community of property, except where there are agreements to the contrary, and (b) the provisions of s 7(3) of Divorce Act shall apply to such a union regardless of when it was concluded. (c) In the case of a husband who is a spouse in more than one Muslim marriage, the court shall: (i) take into consideration all relevant factors including any contract or agreement and must make any equitable order that it deems just, and; (ii) may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings. 1.9 It is declared that, from the date of this order, s 12(2) of the Children’s Act 38 of 2005 applies to Muslim marriages concluded after the date of this order. 1.10 For the purpose of applying paragraph 1.9 above, the provisions of ss 3(1)(a), 3(3)(a) and 3(3)(b), 3(4)(a) and 3(4)(b), and 3(5) of the Recognition of Customary Marriages Act 120 of 1998 shall apply, mutatis mutandis, to Muslim marriages. 1.11 If administrative or practical problems arise in the implementation of this order, any interested person may approach this Court for a variation of this order. 1.12 The Department of Home Affairs and the Department of Justice & Constitutional Development shall publish a summary of the orders in paragraphs 1.1 to 1.9 above widely in newspapers and on radio stations, whatever is feasible, without unreasonable delay.’ 2. In the matter of Faro v The Minister of Justice and Constitutional Development and Others (Case no 4466/2013), no order is made in relation to the cross-appeal. It is recorded that: 2.1 In recognition of the fact that there currently are no policies and procedures in place for purposes of determining disputes arising in relation to the validity of Muslim marriages and the validity of divorces granted by any person or association according to the tenets of Sharia law (Muslim divorces) in circumstances where persons purport to be spouses of deceased persons in accordance with the tenets of Sharia law and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act 81 of 1987 and/or the Maintenance of Surviving Spouses Act 27 of 1990, the Minister of Justice undertakes within 18 months of the granting of this order to put in place the necessary mechanisms to ensure that there is a procedure by which the Master may resolve disputes arising in relation to the validity of Muslim marriages and Muslim divorces, in all cases where a dispute arises as to whether or not the persons purport to be married in accordance with the tenets of Sharia law to the deceased persons and seek to claim benefits from a deceased estate in terms of the provisions of the Intestate Succession Act 81 of 1987 and/or the Maintenance of Surviving Spouses Act 27 of 1990; 2.2 In the event that the Minister of Justice fails to comply with the undertaking in para 2.1, the appellants may enrol the appeal in this Court on the same papers, duly supplemented, in order to seek further relief. 3. The Appellants (the President and the Minister of Justice) shall in respect of the matter under case no 13877/2015 (Esau) pay Ruwayda Esau’s costs in respect of claim A (including the costs of the appeal and cross-appeal) such costs to include the costs of three counsel to the extent of their employment. 4. In respect of the matters under Case nos 22481/2014 and 4466/2013: 4.1 Paragraph 8 of the order of the Western Cape Division of the High Court shall stand, in terms whereof the President, the Minister of Justice and the Minister of Home Affairs are to pay the costs of the Women’s Legal Centre Trust respectively, such costs to include the costs of three counsel to the extent of their employment. 4.2 The President and the Minister of Justice shall pay the Women’s Legal Centre’s costs of the appeal and the cross-appeal, such costs to include the costs of three counsel to the extent of their employment. __________________________ H K SALDULKER JUDGE OF APPEAL C H G VAN DER MERWE JUDGE OF APPEAL Appearances: President of the RSA & Another v Women’s Legal Centre Trust and Others For appellants: A A Gabriel SC, with her K Pillay SC and S Humphrey Instructed by: State Attorney, Cape Town State Attorney, Bloemfontein For 1st respondent: N Bawa, with her M O’ Sullivan and J L Williams Instructed by: WLC, Cape Town Maduba Attorneys, Bloemfontein For 5th respondent: R Willis, with him A B Omar Instructed by: Z Omar Attorneys, Johannesburg c/o C & A Friedlander, Cape Town For 6th respondent: M S Omar & Associates Instructed by: M S Omar Attorneys, Durban Webbers Attorneys, Bloemfontein For 7th respondent: R Moultrie, with him S Kazee Instructed by: Bowman Gilfillan Inc, Sandton c/o Bowman Gilfillan Inc, Cape Town Matsepes Inc., Bloemfontein For 1st amicus curiae: M S Omar Instructed by: M S Omar & Associates, Durban Webbers Attorneys, Bloemfontein For 6th amicus curiae: M Bishop, with him A Christians and C McConnachie Instructed by: Legal Resources Centre, Cape Town Legal Aid, Bloemfontein Minister of Justice and Constitutional Development v Faro and Others For appellant: A A Gabriel SC, with her K Pillay SC and S Humphrey Instructed by: State Attorney, Cape Town State Attorney, Bloemfontein For 1st respondent: N Bawa, with her M O’ Sullivan and J L Williams Instructed by: WLC, Cape Town Maduba Attorneys, Bloemfontein Minister of Justice and Constitutional Development v Esau and Others For appellant: A A Gabriel SC, with her K Pillay SC and S Humphrey Instructed by: State Attorney, Cape Town State Attorney, Bloemfontein For 1st respondent: J de Waal SC, with him A Newton, P Olivier and B Wharton N Rawoot Attorney at Law, Cape Town E G Cooper Majiedt Inc., Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA STATEMENT – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 18 December 2020 STATUS Immediate President of the RSA and Another v Women’s Legal Centre Trust and Others; Minister of Justice and Constitutional Development v Faro and Others; and Minister of Justice and Constitutional Development v Esau and Others (Case no 612/19) [2020] ZASCA 177 (18 December 2020) ______________________________________________________________ Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal. The Supreme Court of Appeal (the SCA) today upheld the appeal and cross-appeals in part; setting aside and replacing the order of the Western Cape Division of the High Court (high court). The issue before the SCA was whether the Constitution placed an obligation on the State to prepare, initiate, introduce and bring into operation legislation to recognise Muslim marriages as valid marriages and to regulate the consequences of such recognition. In 2009, the Women’s Legal Centre Trust (the WLC), an organisation established to advance women’s rights by conducting constitutional litigation and advocacy on gender issues, approached the Constitutional Court for direct access in terms of s 167 of the Constitution. The application was dismissed on the basis that no proper case had been made out for direct access and so the matter was not properly before the court. During November 2015, the WLC launched a semi-urgent application in the high court against the President of the Republic of South Africa (the President), the Minister of Justice and Constitutional Development (Minister of Justice), the Minister of Home Affairs, the Speaker of the National Assembly, and the Chairperson of the National Council of Provinces. The WLC contended that the State had failed to recognise and regulate marriages solemnised in accordance with the tenets of Sharia law and was consequently in breach of ss 7(2), 9(1), 9(2), 9(3), 9(5), 10, 15(1), 15(3), 28(2), 31 and 34 of the Constitution. The WLC argued that s 7(2) of the Constitution obliged the State to prepare, initiate, introduce and bring into operation legislation recognising Muslim marriages, and that the President and Cabinet had failed to fulfil this obligation. In the alternative, it essentially sought orders declaring the Marriage Act 25 of 1961 (the Marriage Act) and the Divorce Act 70 of 1979 (the Divorce Act), as well as specified provisions thereof, unconstitutional insofar as they failed to recognise and provide for Muslim marriages. Three applications which were consolidated came before the high court, that of the WLC, Mrs Faro and Mrs Esau. The high court declared that the State was obliged by s 7(2) of the Constitution to respect, protect, promote and fulfil the rights in ss 9, 10, 15, 28, 31 and 34 of the Constitution by preparing, initiating, introducing, enacting and bringing into operation, legislation to recognise marriages solemnised in accordance with the tenets of Sharia law as valid marriages and to regulate the consequences of such recognition. Further the high court declared that the President and Cabinet had failed to fulfil their respective constitutional obligations and such conduct was invalid. The high court granted the President and the Minister of Justice (the appellants) leave to appeal to the SCA and also granted the WLC and Mrs Esau leave to cross-appeal. During argument in the SCA the appellants made concessions that had a profound impact on the determination of the appeal. After having had the opportunity to take specific instructions, counsel for the appellants placed on record that they conceded that the Marriage Act and the Divorce Act infringed the constitutional rights to equality, dignity and access to justice of women in Muslim marriages in that they failed to recognise Muslim marriages as valid marriages for all purposes. The appellants conceded too that the rights of children born in Muslim marriages were, under s 28 of the Constitution, similarly infringed. The SCA held that the importance of recognising Muslim marriages in our constitutional democracy cannot be gainsaid. In South Africa, Muslim women and children were a vulnerable group in a pluralistic society such as ours. The SCA held further that the non-recognition of Muslim marriages was a travesty and a violation of the constitutional rights of women and children in particular, including, their right to dignity, to be free from unfair discrimination, their right to equality and to access to court. The SCA, inter alia, made the following order: 1.The appeal and the cross-appeals succeed in part and the order of the high court is set aside and replaced with the following order: ‘1.1 The Marriage Act 25 of 1961 (the Marriage Act) and the Divorce Act 70 of 1979 (the Divorce Act) are declared to be inconsistent with ss 9, 10, 28 and 34 of the Constitution of the Republic of South Africa, 1996, in that they fail to recognise marriages solemnised in accordance with Sharia law (Muslim marriages) as valid marriages (which have not been registered as civil marriages) as being valid for all purposes in South Africa, and to regulate the consequences of such recognition. 1.2 It is declared that s 6 of the Divorce Act is inconsistent with ss 9, 10, 28(2) and 34 of the Constitution insofar as it fails to provide for mechanisms to safeguard the welfare of minor or dependent children of Muslim marriages at the time of dissolution of the Muslim marriage in the same or similar manner as it provides mechanisms to safeguard the welfare of minor or dependent children of other marriages that are being dissolved. 1.3 It is declared that s 7(3) of the Divorce Act is inconsistent with ss 9, 10, and 34 of the Constitution insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just. 1.4 It is declared that s 9(1) of the Divorce Act is inconsistent with ss 9, 10 and 34 of the Constitution insofar as it fails to make provision for the forfeiture of the patrimonial benefits of a Muslim marriage at the time of its dissolution in the same or similar terms as it does in respect of other marriages.1.5 The declarations of constitutional invalidity are referred to the Constitutional Court for confirmation. 1.6 The common law definition of marriage is declared to be inconsistent with the Constitution and invalid to the extent that it excludes Muslim marriages. 1.7 The declarations of invalidity in paras 1.1 to 1.4 above are suspended for a period of 24 months to enable the President and Cabinet, together with Parliament to remedy the foregoing defects by either amending existing legislation, or passing new legislation within 24 months, in order to ensure the recognition of Muslim marriages as valid marriages for all purposes in South Africa and to regulate the consequences arising from such recognition. 1.8 Pending the coming into force of legislation or amendments to existing legislation referred to in para 1.7, it is declared that a union, validly concluded as a marriage in terms of Sharia law and subsisting at the date of this order, or, which has been terminated in terms of Sharia law, but in respect of which legal proceedings have been instituted and which proceedings have not been finally determined as at the date of this order, may be dissolved in accordance with the Divorce Act as follows: (a) all the provisions of the Divorce Act shall be applicable save that all Muslim marriages shall be treated as if they are out of community of property, except where there are agreements to the contrary, and (b) the provisions of s 7(3) of Divorce Act shall apply to such a union regardless of when it was concluded. (c) In the case of a husband who is a spouse in more than one Muslim marriage, the court shall: (i) take into consideration all relevant factors including any contract or agreement and must make any equitable order that it deems just, and; (ii) may order that any person who in the court’s opinion has a sufficient interest in the matter be joined in the proceedings. 1.9 It is declared that, from the date of this order, s 12(2) of the Children’s Act 38 of 2005 applies to Muslim marriages concluded after the date of this order’. The SCA made other ancillary orders in respect of Mrs Faro and Mrs Esau.

1503

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT CASE NO: 722/2007 No precedential significance DIGICORE FLEET MANAGEMENT (PTY) LTD Appellant and MARYANNE STEYN 1st Respondent SMARTSURV WIRELESS (PTY) LTD 2nd Respondent Neutral citation: Digicore Fleet Management v Steyn (722/2007) [2008] ZASCA 105 (22 September 2008) Coram: SCOTT, BRAND, LEWIS, JAFTA JJA MHLANTLA AJA Heard: 8 September 2008 Delivered: 22 September 2008 Summary: Appeal against order refusing enforcement of contract in restraint of trade dismissed: proprietary interest of appellant not threatened by first respondent after termination of her employment with appellant and on her employment by a competitor, the second respondent. ______________________________________________________________ ORDER On appeal from: High Court, Durban (Van der Reyden J sitting as court of first instance) The appeal is dismissed with costs. JUDGMENT LEWIS JA (Scott, Brand and Jafta JJA and Mhlanthla AJA concurring) [1] The appellant, Digicore Fleet Management (Pty) Ltd (Digicore), seeks to enforce an undertaking in restraint of trade made in its favour by the respondent, Ms Maryanne Steyn. Digicore applied for an interdict, alternatively interim relief, restraining Steyn from working for the second respondent, Smartsurv Wireless (Pty) Ltd, a competitor of Digicore, for a period of 24 months from the termination of her employment with Digicore, in the greater Durban area. The high court refused the relief sought, finding that the undertaking in restraint of trade was unenforceable. Van der Reyden J granted leave to appeal to this court, however, on the basis that another court might reach a different conclusion especially in so far as interim relief is concerned. Smartsurv has played no role in this appeal. [2] The facts in issue are largely undisputed and I shall deal with them only briefly. Steyn was employed by Digicore from May to December 2006 as a ‘sales executive’ for motor vehicle tracking devices. She signed a contract of employment that required her to maintain confidentiality in her work during the course of her employment, and that restrained her from competing with Digicore after the termination of her employment. [3] Digicore’s business consists in the main of selling various kinds of vehicle tracking systems to vehicle owners. It sells to fleet owner clients that require systems to track vehicles in a fleet; to corporate clients that require vehicle recovery systems to protect against theft, and trace stolen vehicles; and to individual customers who purchase the second kind of tracking systems for themselves. [4] When Steyn joined Digicore she had previous experience in selling tracking systems, and had also worked in the insurance business for a while. She was particularly attractive and useful to Digicore because of her contacts with insurance brokers in the Durban area who would refer potential clients to her when they acquired new vehicles and wished to insure them against theft. [5] The period of Steyn’s employment with Digicore was short: she was approached by Smartsurv towards the end of 2006 and offered a more lucrative position. She gave notice to Digicore and commenced working for Smartsurv in January 2007. Digicore learned of approaches to two of their clients by Steyn in early 2007 and commenced proceedings to prevent her from working for Smartsurv or to compete with it for the period of the restraint undertaking that she had made. [6] The restraint provision in the employment contract reads: ‘19 RESTRAINT UNDERTAKINGS 19.1 The employee shall be restrained for a period of 2 years from the date of termination of this Agreement from working within a 200km radius of the Durban North area and / or be: 19.1.1 Directly or indirectly having any interest in (sic), involvement with, connection to or being employed by any company, corporation, firm, partnership, association or other form of business entity, whether incorporated or unincorporated (for convenience “Competing Business”), which conducts business along lines similar to or in competition with that of the employer; and 19.1.2 Acting as employee, director, shareholder, member, partner, consultant, financier, agent or advisor to any Competing Business in respect of the Restrained Activities in the aforementioned areas; and 19.1.3 Directly or indirectly soliciting or offering employment to any employee of the employer who was an employee as at the date of signature of this Agreement, or at any time within 3 (three) months preceding the date of signature of this Agreement, nor shall they attempt to do so; 19.2 The employee acknowledges that these restraint of trade undertakings and covenants are reasonable as to the period, the area of restraint and the nature and extent of the Restrained Activities.’ [7] It is now trite that provisions in restraint of trade are enforceable unless shown by the person wishing to escape an undertaking to be unreasonable and hence contrary to public policy. It is not necessary to rehearse the principles that have been set out by this and other courts governing agreements in restraint of trade. Suffice it to say that Steyn, in order to escape her contractual undertaking, must show that Digicore has no proprietary interest that is threatened by her working for a competitor of Digicore. [8] Digicore contends that the restraint is reasonably necessary to protect its interest in its customer base because, when Steyn commenced her employment with it, she underwent an induction programme and had training and support that enabled her to market and sell Digicore’s stolen vehicle recovery systems. They contend that she was provided with a client list with names and contact details, including the information on the products previously acquired by clients. Such information was alleged to be confidential and part of Digicore’s goodwill. Moreover, Digicore argues, Steyn had access not just to client information but also to details regarding confidential discounts given to certain clients. [9] Steyn’s response (which we must accept, these being motion proceceedings) is that she was not trained by Digicore and did not undergo any induction programme. She was given no support save for receiving a laptop computer, a cellular telephone, and brochures describing Digicore’s products. She was given no confidential client information save for the details of about 20 clients whom a previous sales executive had cultivated. Digicore had previously concentrated on corporate and fleet management clients. By contrast, she had brought with her contacts with insurance brokers, and had continued to cultivate those contacts. She had also shared the information that she had with another sales executive at Digicore, Mr Stanley Strydom, with whom she worked. During her employment with Digicore she continued to work on her contacts and had followed them up when she started working for Smartsurv. [10] Steyn, as I have said, came to Digicore with experience in the field of tracking devices: she had previously been employed by a company referred to as Tracker Network, and subsequently by Bandit Vehicle Tracking. She had also worked for an insurance brokerage. When she left Digicore she took with her no more than she had brought to the business in the first place: experience in the field and contacts with insurance brokers in the Durban area. It can hardly be said, in the circumstances, that Digicore had any proprietary right that was in jeopardy when she left to work for a competitor. [11] There are two particular instances where Digicore alleges that Steyn did approach its fleet management clients: she contacted Mr Rob Currie, a client of Digicore, to canvas his business for Smartsurv, and she contacted Mr Dieter Coetzee, also a Digicore client, and suggested that he move his business to Smartsurv. Steyn denies any knowledge of Currie, and although admitting that she contacted Coetzee, points out that he declined to move his company’s business to Smartsurv. In neither case, therefore, can it be said that she breached any obligation to Digicore. [12] Steyn contends – and Digicore does not dispute this – that her value to Digicore lay in her contacts with insurance brokers, a source of business previously untapped by Digicore. Digicore accordingly had no proprietary interest in her contacts and thus no right to prevent her from using them. She maintains also that she did not acquire any confidential information while working at Digicore. Although Digicore claimed that she had access to their databases, Steyn denies that she had access to anything that was not in the public domain. [13] Accordingly this matter is entirely different from that in Reddy v Siemens Telecommunications (Pty) Ltd,1 relied on by counsel for Digicore, where a restraint was enforced on the basis that the employee had in fact undergone extensive training and acquired confidential information which warranted protection. [14] It seems to me that, on the facts that are common cause, Steyn has shown that Digicore did not have any proprietary interest that warranted protection. It is useful to invoke the fourfold test enunciated by Nienaber JA in Basson v Chilwan:2 (a) Is there an interest of the one party (Digicore) which pursuant to the agreement warrants protection? (b) Is that interest threatened by the other party (Steyn)? (c) If so, does that interest weigh qualitatively and quantitatively against the interest of the other so that he or she will be economically inactive and unproductive? (d) Is there another aspect of public interest that does not affect the parties but does require that the restraint not be invoked? [15] The answers to these questions in this case are in my view clear. Digicore does have a proprietary interest in its client base, and information 1 2007 (2) SA 486 (SCA). 2 1993 (3) SA 742 (A) at 768F-H. about it, that deserves protection. However, Steyn presents no threat to that interest: she is using only her own contacts and information, acquired before joining Digicore, and not making improper use of information that is confidential to Digicore. Indeed, Digicore’s admitted main business is its fleet management systems. Steyn had no experience of them or the fleet management clients either before or after she joined Digicore, and made no attempt to break into that area of the business. [16] To the third question I would suggest that given the very short period of Steyn’s employment by Digicore, the fact that she was recruited for her contacts with insurance brokers, and that she was doing no more than cultivating them when she worked there and then subsequently for Smartsurv, Digicore’s interest cannot be regarded qualitatively or quantitatively as warranting protection.3 To prevent Steyn from being economically active – by enforcing the restraint – would not be reasonable. There is no commercial justification for enforcing the provision in restraint of trade against Steyn. The fourth question does not arise here. [17] Accordingly the high court rightly found that any threat that Steyn’s employment with Smartsurv might have posed did not ‘weigh qualitatively and quantatively against her interest to be economically active and productive’ and correctly refused to interdict her from working for Smartsurv or working in the vehicle tracking business. 3 See in this regard Rawlins v Caravantruck (Pty) Ltd 1993 (1) SA 537 (A) at 541F-I. [18] In so far as the alternative relief sought – the interim interdict – is concerned, Digicore has shown neither an apprehension that any right will be infringed by Steyn, nor that the balance of convenience favours interim relief in its favour. [19] The appeal is dismissed with costs. ______________ C H Lewis Judge of Appeal Appearances: For Appellant: F H Tereblanche SC H R Fourie Instructed by: Edelstein Bosman Inc, Durban Israel & Sackstein Matsepe Inc, Bloemfontein For Respondent: F Rautenbach Instructed by: Irish Ashman Attorneys, Durban Lovius Block, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL 22 September 2008 STATUS: Immediate Digicore Fleet Management v Steyn Please note that the media summary is intended for the benefit of the media and does not form part of the judgment of the Supreme Court of Appeal The Supreme Court of Appeal today dismissed an appeal against a decision of the Durban High Court, refusing an interdict restraining Mrs Maryanne Steyn from working for a competitor after leaving the employment of Digicore. Although Steyn had signed an agreement in which she undertook not to work for a competitor of Digicore for two years after the termination of her employment, in the greater Durban area, the court found that Digicore did not have a proprietary interest that was threatened by Steyn. She had acquired no confidential information while in the employ of Digicore, and had taken with her when she left no more than she had brought to Digicore in the first place – her own experience, expertise and contacts. The restraint was thus not reasonable and was accordingly unenforceable. _____________

3024

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 00093/2015 Reportable In the matter between: RICHARD NEGONDENI APPELLANT and THE STATE RESPONDENT Neutral citation: Negondeni v the State (00093/15) [2015] ZASCA 132 (29 September 2015) Coram: Leach, Willis and Mathopo JJA Heard: 28 August 2015 Delivered: 29 September 2015 Summary: Criminal trial – accused given no warning of prospect of minimum sentence – accused having incompetent legal representative selected by the judge – s 112 of Criminal Procedure Act 51 of 1977 not properly applied – accused did not have a fair trial - conviction and sentence set aside – matter remitted to the court a quo for trial de novo before a different judge. ___________________________________________________________________ ORDER On appeal from: Limpopo Local Division of the High Court, Thohoyandou, (Renke AJ sitting as the court of first instance) The appeal is upheld. The convictions and sentences in respect of all counts are set aside. The case is remitted to the court a quo for trial de novo before a different judge. JUDGMENT Willis JA (Leach and Mathopo JJA concurring): [1] The appellant, Mr Richard Negondeni, was indicted in the Limpopo Local Division, Thohoyandou High Court (Renke AJ) on a count of murder, a count of robbery and two counts of rape. He pleaded guilty in terms of s 112 of the Criminal Procedure Act 51 of 1977 (the Criminal Procedure Act) and was convicted on all four counts. He was sentenced to life imprisonment on the count of murder, with which lesser sentences imposed on the other counts were ordered to run concurrently. With the leave of this court, he appeals against his convictions and sentences on all counts. [2] The indictment alleges, in relation to the murder count, that the appellant killed an adult female, Ms Ntsombeni Makhanye (the deceased), on 2 April 2002 at Ha-Dumasi, in the district of Thohoyando; in relation to the first count of rape that he did so in respect of the same person at the same place at about the same time; in relation to the count of robbery that, using force and violence, he took the deceased’s cellular telephone from her at about the same place and time; and, in relation to the second count of rape, that he committed the crime on 6 February 1999 at the Thohoyando Technical School, his victim having been another woman, Ms Sylvia Netshiavha. The indictment made no reference to the prescribed minimum sentences set out in the Criminal Law Amendment Act 105 of 1997. [3] In the summary of substantial facts annexed to the indictment it is alleged that ‘before leaving the scene (where the rape of the deceased had been committed), the accused robbed the victim and then stoned her to death.’ It is also alleged that the deceased’s decomposed body was recovered in the bush at Ha- Dumasi on 11 July 2002 and that: ‘The cause of death could not be determined because of the advanced state of decomposition of the deceased’s body.’ In respect of the second count of rape, the summary alleges that the victim was forcefully taken by the appellant from a shopping complex and then raped in the bush at knife-point. [4] At the commencement of the appellant’s trial on 19 February 2007, the state prosecutor informed the court that he had been given to understand, from the court orderlies, that the appellant no longer wished to be represented by his legal representative, appointed by ‘the Law Clinic’. The appellant’s legal representative appeared to have been taken by surprise by this and said: ‘I have never heard anything. Can he just speak for himself?’ The judge then asked the appellant whether he had ‘a problem’. The appellant replied that he did not have a problem ‘so far’ but said: ‘It is just that we have not yet finished a consultation.’ After further questioning, the appellant repeated his complaint that: ‘We have not consulted sufficiently.’ The judge then said that the trial should proceed but the appellant could consult with his legal representative during the adjournments of the court. [5] The counts were then put to the appellant. He pleaded guilty to the first count of murder but, immediately thereafter, when asked by the judge to confirm this, said: ‘Maybe I did not understand well.’ Further discussions took place between the appellant and the judge whereupon the appellant said: ‘I do understand but when I am asked to plead on the charge of murder I am not so sure as to whether I should plead not guilty or I should explain the circumstances.’ The court then decided that the matter should stand down to the next day so that the appellant could consult more fully with his legal representative. His legal representative then informed the court that he would not be available the next day. At this, the court said: ‘I do not want, and I will not tolerate any further delays in the proceedings. The witnesses are inconvenienced and so am I, and I want to proceed with this matter tomorrow. I personally arranged with experienced counsel, Mr Dzumba, to come down now to see him. Mr Dzumba will take over his defence.’ [6] The next day the trial proceeded with counsel, Mr Dzumba, appearing as the appellant’s legal representative. At the commencement of the proceedings on that day the court asked the appellant whether he was satisfied ‘with the change in his legal representation’. The appellant replied: ‘I am satisfied.’ [7] The appellant was then asked to plead once more, and on this occasion he pleaded guilty to all four counts. Mr Dzumba then read into the record a written statement by the appellant in terms of s 112 of the Criminal Procedure Act. It reads as follows: ‘1. I, the undersigned, RICHARD NEGONDENI, hereinafter referred to as Accused, do hereby plead guilty to all the four counts, namely that of murder, rape, robbery and rape, and explain as follows for the first three counts: 2. On the 2nd April 2002 as indicated in the indictment, I met the deceased NTSOMBENI MAKHANYE at the Thohoyandou Shopping Complex. 3. I asked her to accompany me to Ha-Dumasi and we boarded the taxi together. 4. On arrival at Ha-Dumasi we sat in some bushes and I forced to have sexual intercourse with her, without her consent. 5. We quarreled and I hit her on the head with a stone. She fell down and never spoke again. I then got shocked, frustrated and confused. 6. I took her cellphone and left for home. I decided to tell nobody about what had happened. 7. In connection with count 4, I plead also guilty to the second charge of rape. I admit that I met one Sylvia Netshiavha at the Thohoyandou Shopping Centre on the 6th February 1999. 8. I proposed love to her and together we went to Block F not far from the Thohoyandou Technical School. 9. In the buses not far from the said school I forced one Sylvia Netshiavha to have sexual intercourse with me without her consent. 10. Afterwards, the victim, one Sylvia Netshiavha, reported the matter to the police and I was arrested later that day. I know and understand that it is unlawful to kill another person intentionally without any justifiable ground. I further know that it is unlawful to intentionally take another person’s property without her permission. I further know that it is unlawful to intentionally have sexual intercourse with a female person without her consent.’ [8] The judge then asked the appellant whether the statement was correct. The appellant confirmed that it was. The judge then enquired from the appellant as to the size of the stone that was used to hit the deceased. After the appellant had demonstrated, it was agreed among all concerned that it was ‘about the size of a soccer ball’1. The court then proceeded to find the appellant guilty on all four counts. [9] The first issue that arises is whether this terse statement, especially insofar as it relates to the count of murder, is sufficient to satisfy the requirements of s 112 (1)(b) of the Criminal Procedure Act which reads as follows: ‘the presiding judge, regional magistrate or magistrate shall, if he or she is of the opinion that the offence merits punishment of imprisonment or any other form of detention without the option of a fine or of a fine exceeding the amount determined by the Minister from time to time by notice in the Gazette, or if requested thereto by the prosecutor, question the accused with reference to the alleged facts of the case in order to ascertain whether he or she admits the allegations in the charge to which he or she has pleaded guilty, and may, if satisfied that 1 In S v Makhaya 2004 (1) SACR 444 (C); JOL 12062 (C) it was held that it is ‘undesirable that the accused should do any demonstration in court’ for purposes of section 112(1)(b) but, in the circumstances of this case that issue is irrelevant. the accused is guilty of the offence to which he or she has pleaded guilty convict the accused on his or her plea of guilty of that offence . . . .’. [10] It has been made clear in S v Mbuyisa2 that s 112(b) contemplates admissions of facts and not admissions of law or legal conclusions.3 In S v Lebokeng en ‘n ander4 it was stressed that the court should be satisfied not only that the accused committed the act in question but that he committed it unlawfully and with the necessary mens rea. As was stated in S v Nyanga ‘Section 112(1)(b) questioning has a twofold purpose. Firstly, to establish the factual basis for the plea of guilty and secondly to establish the legal basis for such plea. In the first phase of the enquiry, the admissions made may not be added to by other means such as a process of inferential reasoning. (S v Nkosi 1986 (2) SA 261 (T) at 263H-I; S v Mathe 1981 (3) SA 664 (NC) at 669E-G; S vJacobs (supra at 1177B) (1978 (1) SA 1176 (C) at 1177B). The second phase of the enquiry amounts essentially to a conclusion of law based on the admissions. From the admissions the court must conclude whether the legal requirements for the commission of the offence have been met. They are the questions of unlawfulness, actus reus and mens rea. These are conclusions of law. If the court is satisfied that the admissions adequately cover all these elements of the offence, the court is entitled to convict the accused on the charge to which he pleaded guilty. [11] From the record, it is not clear, beyond reasonable doubt, whether the appellant admitted that his act of hitting the deceased on the head with a stone caused her death. In addition, the appellant’s statement that he was shocked, confused and surprised cries out for further enquiry, as it is not clear whether the appellant even admitted that he had acted with the requisite intent – either in the form of dolus directus or dolus eventualis – to kill the deceased, for a conviction on the count of murder properly to be made. It is therefore not even certain whether the correct conviction would have been culpable homicide. The conviction on the count 2 S v Mbuyisa 2012 (1) SACR 571 (SCA); (183/1) [2011] ZASCA 146. 3 Para 7. See also S v Zerky 2010 (1) SACR 460 (KZP) para 20; (R421/09)[2009] ZAKZPHC 17. 4 S v Lebokeng en ‘n ander 1978 (2) SA 674 (O); [1978] 3 ALL SA 139 (O). See also S v Ngubane1978 (2) PH H189 (N); (30/83) [1985] ZASCA 41; S v Moniz 1982 (1) SA 41 (C) 46; [1982] 3 ALL SA 157 (C); S v Phikwa 1978 (1) SA 397 (E); [1978] 1 ALL SA 557 (E); S v Tshumi & others 1978 (1) SA 128 (N); [1978] 1 ALL SA 273 (N); S v Mthetwa; S v Khanyile 1978 (2) SA 773 (N); [1978] 2 ALL SA 328 (N); S v Serumala 1978 (4) SA 811 (NC); [1978] 4 ALL SA 733 (NC). S v Naude 1978 (1) SA 566 (T); [1978] 1 ALL SA 685 (T); S v Thobejane 1978 (1) PH H116 (T); S v Jacobs 1978 (1) SA 1176 (C) 1178; S v Medupa 1978 (2) PH H125 (O); S v Matlabeng en ‘n ander 1983 (4) SA 431 (O) and S v Mbova en andere 1996 (1) SACR 239 (NC) 242(I). of robbery and both counts of rape may be justified, if one has regard to the contents of the statement, but clearly the appellant ought not to have been convicted of murder merely on the strength of the s 112 proceedings. [12] In addition, as appears from what is set out below, the events that occurred after the appellant’s conviction, shows that he did not enjoy a fair trial. After a previous conviction for assault perpetrated in 1990 was proven against him, the judge then enquired from counsel for the State and the defence whether the minimum sentencing provisions of s 51 of the Criminal Law Amendment Act 105 of 1997 were of application and, if so, what they prescribed in relation to the appellant’s convictions. It is clear, from the record that both the judge and the appellant’s counsel were unaware of what that Act in fact provided. Indeed it led to the judge adjourning in order to discuss the provisions of the Criminal Law Amendment Act with counsel in chambers. This in itself was irregular. It was a discussion which ought to have taken place in open court. Importantly, counsel for the State did not bring the minimum sentencing provisions to the attention either of the appellant or the court before this enquiry was made, and the appellant’s plea was therefore clearly tendered without his knowing of them. [13] After the adjournment, the appellant was briefly led in mitigation. This established that the appellant was 32 years of age at the time, he left school during standard nine, had been working at a bakery at the time of his arrest in respect of counts 1 to 3 and was married with two school-going children. He said he felt ashamed at what he had done and was sorry for the pain which he had caused the family of the deceased and the victim of the second count of rape. The state prosecutor cross-examined the appellant as to the second count of rape. The appellant explained that, although he had been arrested shortly after the date relating to count four, ‘the matter was not proceeded with’, he had gone to the parents of his victim ‘to settle this issue’ and was later informed in court that ‘the charge was through’. Apart from this, no further evidence was adduced from the appellant as to the circumstances under which the offences were committed. [14] The State led the evidence of a police officer and the father of the deceased as to the state of decomposition of the deceased’s body and that she had been identified by her clothing. Photographs taken by the forensic photographer of the deceased’s badly decomposed body, shortly after it had been discovered, were handed in as exhibits. The complainant in respect of the second count of rape was called by the State to testify. She confirmed that she had non-consensual sexual intercourse with the appellant although the circumstances in which she agreed to accompany the appellant on a walk from the shopping centre to the technical college were sketchily put before the court. When asked whether she was scared of men now, as a result of the rape, she replied: ‘No.’ [15] The court a quo then proceeded to sentence the appellant to life imprisonment on the count of murder, holding that it was obliged to do so in terms of the Criminal Law Amendment Act, on account of the close association between the rape and murder of the deceased. The appellant had at no stage in the trial or, it would appear from the record, at any time before that, been warned by the court that, if convicted, he faced the risk of life imprisonment. The court a quo also sentenced the appellant to ten years’ imprisonment for the rape of the deceased, two years for the robbery and ten years for the rape of Ms Sylvia Netsiaba. The sentences on counts two, three and four were, as mentioned previously, ordered to run concurrently with the sentence on count 1. In any event, in terms of section 39 (2) of the Correctional Services Act, No 111 of 1998, the sentences on counts two, three and four would automatically run concurrently with the sentence of life imprisonment. [16] In view of the appellant’s patently concerned and hesitant stance at the commencement of the trial, the court a quo was at the outset of the proceedings wrong in insisting that the trial proceed as it did. However well-intentioned the court a quo may have been in appointing Mr Dzumba to act for the appellant, and even though the appellant confirmed the next day that he was satisfied with this arrangement, it was wrong for the court a quo to have prevailed upon him to accept the arrangement. Quite apart from any other difficulties concerning issues of principle that may exist with this course of action, it did not afford the appellant the time for a proper consultation to be held. This legal representative’s apparent lack of awareness about the minimum sentencing provisions in the Criminal Law Amendment Act is indicative of the fact that the appellant did not have the quality of legal representation that one could reasonably expect, especially in so gravely serious a case. This court has repeatedly stressed the importance of warning a person of the risk of minimum sentences being imposed.5 In the circumstances of this particular case, the injustice of the appellant not having been so warned is manifest. This is all the more obvious in a case in which a legal representative appointed at the 11th hour is not fully aware of the implications of the minimum sentencing legislation. Against this background the appellant did not have a fair trial. [17] When the well settled law relating to the procedural fairness of an accused person’s trial is applied against the aggregate of the facts and circumstances of this case, one’s sense that the appellant did not have a fair trial is compounded. The right of every person to a fair trial is a constitutional one.6 That right was infringed and for that reason the conviction and sentence cannot be allowed to stand. [18] What is to be done? On the one hand, the appellant manifestly did not have a fair trial. Against this, the State, the victims and their families of serious crimes such as these, including the family of the deceased also have an interest in the appellant not being allowed to walk free, without further ado. In this regard the provisions of s 312 of the Criminal Procedure Act are of importance They provide as follows: ‘(1) Where a conviction and sentence under section 112 are set aside on review or appeal on the ground that any provision of subsection (1) (b) or subsection (2) of that section was not complied with, or on the ground that the provisions of section 113 should have been applied, the court in question shall remit the case to the court by which the sentence was imposed and direct that court to comply with the provision in question or to act in terms of section 113, as the case may be. (2) When the provision referred to in subsection (1) is complied with and the judicial officer is after such compliance not satisfied as is required by section 112 (1) (b) or 112 (2), he shall enter a plea of not guilty whereupon the provisions of section 113 shall apply with reference to the matter.’ 5 See, for example, S v Legoa 2003 (1) SACR 13 (SCA) paras 20 and 21; (33/2002)[2002] ZASCA 122; S v Ndlovu 2003 (1) SACR 331 (SCA) para 12; (75/2002) [2002] ZASCA 144; and S v Makatu 2006 (2) SACR 582 (SCA) paras 3 and 17; (245/05) [2006] ZASCA 72. 6See s 34 of the Constitution, 1996. [19] In S v Tshumi & others7 James JP, with Milne J concurring, said: ‘It is clear that the magistrate failed to appreciate what his duty was as laid down by sec. 112, and failed to satisfy himself on a number of important questions such as whether it was established by the answers that the accused either individually or collectively acted unlawfully, or with common purpose in assaulting the deceased. In fact the magistrate appears to have completely failed to grasp the fact that since sec. 112 (1)(b) makes it possible to dispense with evidence to establish all the essential elements of the charge, his questions must be directed to satisfying himself that an accused fully understands all the elements of the charge when pleading guilty, and that his answers reveal that he has in fact committed the actual offence to which he has pleaded guilty.’8 Having found that the conviction could not stand, James JP continued as follows: ‘What should now be done? Clearly the convictions and sentences cannot stand, nor is it possible, since the magistrate has retired, for the case to be remitted to him to deal correctly with it by making proper use of the provisions of sec. 112 (1) (b). Justice will, I consider, be done in these circumstances if the case is sent back for trial by another magistrate. The convictions and sentences are accordingly set aside and the case is sent back for trial de novo by another magistrate.’9 [20] Other cases in which it has been decided that a trial de novo is appropriate in circumstances such as this include S v Witbooi & others,10S v Mokoena,11 S v Van Deventer12 S v Mbova en andere13, S v Williams14 and S v Mofokeng.15 In S v Heugh & others16 the case was remitted to the magistrate for him to deal with, in his 7 S v Tshumi & others 1978 (1) SA 128 (N); [1978] 1 ALL SA 273 (N). 8 At 130B-D. 9 At 130G-H. 10 S v Witbooi & others 1978 (3) SA 590 (T); [1978] 2 ALL SA 641 (T). 11 S v Mokoena 1982 (3) SA 967 (T); [1982] 4 ALL 461 (T). 12 S v Van Deventer 1978 (3) SA 97 (T); [1978] 2 ALL SA 573 (T). 13 S v Mbova en andere 1996 (1) SACR 239 (NC). 14 S v Williams 2008 (1) SACR 65 (C); (29/04/07) [2007] ZAWCHC 48. 15 S v Mofokeng 2013 (1) SACR 143 (FB); (191/2012) [2012] ZAFSHC 117. 16 S v Heugh & others 1997 (2) SACR 291 (E); [1997] JOL 1408 (E). discretion, in terms of s 113 of the Criminal Procedure Act17. See also Mkhize v the State & another Nene & others v the State & another.18 In S v Fikizolo19 the conviction and sentence was set aside, consequent upon shortcomings applying the provisions of s 112 of the Criminal Procedure Act properly, without ordering a trial de novo, but there were additional serious misdirections by the magistrate that compelled the appeal court to do so.20 Each case must be decided on its own merits. In particular, as to whether the trial should be heard de novo, the interests of justice, not only with respect to an accused person but also the State and society as a whole should be taken into consideration. [21] Even before s 112 of the Criminal Procedure Act came into operation, there was precedent in this court for remitting a trial for a hearing de novo where procedural irregularities had been committed and the interests of justice require it.21 [22] During the course of argument, counsel for the appellant placed considerable reliance on the unreported judgment in this court in S v Mudau22 in which this court recognised that, where a trial had been tainted by procedural unfairness, a court of appeal had a discretion to remit the matter for a hearing de novo. Although in that case the court declined to do so, each case must be decided on its own merits and the facts of Mudau were materially different from this one. In this case, despite the 17 Section 113 of the Criminal Procedure Act reads as follows: (1) If the court at any stage of the proceedings under section 112 (1) (a) or (b) or 112 (2) and before sentence is passed is in doubt whether the accused is in law guilty of the offence to which he or she has pleaded guilty or if it is alleged or appears to the court that the accused does not admit an allegation in the charge or that the accused has incorrectly admitted any such allegation or that the accused has a valid defence to the charge or if the court is of the opinion for any other reason that the accused's plea of guilty should not stand, the court shall record a plea of not guilty and require the prosecutor to proceed with the prosecution: Provided that any allegation, other than an allegation referred to above, admitted by the accused up to the stage at which the court records a plea of not guilty, shall stand as proof in any court of such allegation. (2) If the court records a plea of not guilty under subsection (1) before any evidence has been led, the prosecution shall proceed on the original charge laid against the accused, unless the prosecutor explicitly indicates otherwise. 18 Mkhize v the State & another Nene & others v the State & another 1981 (3) SA 585 (N); [1981] 1 ALL SA 195 (N). 19 S v Fikizolo 1978 (2) SA 676 (NC); [1978] 3 ALL SA 229 (NC). 20 See for example S v Fikizolo 1978 (2) SA 676 (NC). 21 See for example R v Zackey 1945 AD 505. See also R v Read 1924 TPD 718 and S v Vezi 1963 (1) SA 9 (N); [1963] 1 ALL SA 315 (N); R v Foley 1926 TPD 168 and R v Cohen 1942 TPD 266 at 273. 22 S v Mudau (276/13) [2013] ZASCA 172 (28 November 2013. period of imprisonment that the appellant has already served, the interests of justice require a fresh trial. The appellant, after all, faces a possible life sentence should he properly be convicted. [23] In all the circumstances of this case, the interests of justice will best be served by setting aside the convictions and sentences and remitting the matter for a trial de novo. It is appropriate, against the full canvas of events, to direct that the trial be heard by a different judge. [24] One further aspect should be mentioned. At the commencement of the appellant’s application for leave to appeal, his then legal representative (who had neither appeared at his trial and who did not argue his appeal) stated that he agreed with the conviction and sentence ‘meted out by the court’ and that he had explained to the appellant that he had ‘no prospects of success’ in the matter and that, if he wished to proceed, he would have to do so ‘on his own’. With that he abandoned the appellant to argue the application in person. This is inexplicable. As should be apparent from what has been set out above, there was much to be said. It also constituted an extraordinary dereliction of the duty of defence counsel to do their best, even if they privately consider the case to be a hopeless one. On his own, the appellant performed rather well. For example, he submitted that the killing of the deceased could be construed as ‘an accident’ and ‘it was not like it was planned that I wanted to kill somebody or the deceased for that matter.’ [25] The following order is made: 1 The appeal is upheld. 2 The convictions and sentences in respect of all counts are set aside. 3 The case is remitted to the court a quo for trial de novo before a different judge. _________________________ N P WILLIS JUDGE OF APPEAL APPEARANCES: For the Appellant: S O Ravele (Attorney) Instructed by: S O Ravele Attorneys, Makhado c/o Phatsoane Henney Attorneys, Bloemfontein For the Respondent: M Sebelebele Instructed by: The Director of Public Prosecutions, Thohoyandou The Director of Public Prosecutions, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 29 September 2015 STATUS Immediate Negondeni v the State (00093/15) [2015] ZASCA 132 (29 September 2015) Please note that the media summary is for the benefit of the media and does not form part of the judgment. Today the Supreme Court of Appeal (SCA) upheld an appeal from the Limpopo Local Division of the High Court, Thohoyandou (Renke AJ) set aside the convictions and sentences in respect of all counts and remitted the case is remitted to the high court for trial de novo before a different judge. The appellant, Mr Richard Negondeni, had been indicted in the Limpopo Local Division, Thohoyandou High Court (Renke AJ) on a count of murder, a count of robbery and two counts of rape. He pleaded guilty in terms of s 112 of the Criminal Procedure Act 51 of 1977 (the Criminal Procedure Act) and was convicted on all four counts. He was sentenced to life imprisonment on the count of murder, with which lesser sentences imposed on the other counts were ordered to run concurrently. The indictment alleged, in relation to the murder count, that the appellant killed an the deceased) on 2 April 2002 at Ha-Dumasi, in the district of Thohoyando; in relation to the first count of rape that he did so in respect of the same person at the same place at about the same time; in relation to the count of robbery that, using force and violence, he took the deceased’s cellular telephone from her at about the same place and time; and, in relation to the second count of rape, that he committed the crime on 6 February 1999 at the Thohoyando Technical School, his victim having been another woman. The indictment made no reference to the prescribed minimum sentences set out in the Criminal Law Amendment Act 105 of 1997. In the summary of substantial facts annexed to the indictment it had been alleged that ‘before leaving the scene (where the rape of the deceased had been committed), the accused robbed the victim and then stoned her to death.’ It is also alleged that the deceased’s decomposed body was recovered in the bush at Ha- Dumasi on 11 July 2002 and that: ‘The cause of death could not be determined because of the advanced state of decomposition of the deceased’s body.’ In respect of the second count of rape, the summary alleged that the victim was forcefully taken by the appellant from a shopping complex and then raped in the bush at knife-point. At the commencement of the appellant’s trial on 19 February 2007, the state prosecutor informed the court that he had been given to understand, from the court orderlies, that the appellant no longer wished to be represented by his legal representative, appointed by ‘the Law Clinic’. The appellant’s legal representative appeared to have been taken by surprise by this and said: ‘I have never heard anything. Can he just speak for himself?’ The judge then asked the appellant whether he had ‘a problem’. The appellant replied that he did not have a problem ‘so far’ but said: ‘It is just that we have not yet finished a consultation.’ After further questioning, the appellant repeated his complaint that: ‘We have not consulted sufficiently.’ The trial judge then said that the trial should proceed but the appellant could consult with his legal representative during the adjournments of the court. The counts were then put to the appellant. He pleaded guilty to the first count of murder but, immediately thereafter, when asked by the judge to confirm this, said: ‘Maybe I did not understand well.’ Further discussions took place between the appellant and the judge whereupon the appellant said: ‘I do understand but when I am asked to plead on the charge of murder I am not so sure as to whether I should plead not guilty or I should explain the circumstances.’ The court then decided that the matter should stand down to the next day so that the appellant could consult more fully with his legal representative. His legal representative then informed the court that he would not be available the next day. At this, the court said that it would not tolerate any further delays in the proceedings and that it wished proceed with the matter. The trial judge then informed that he had ‘personally arranged with experienced counsel, Mr Dzumba, to come down now to see him. Mr Dzumba will take over his defence.’ The next day the trial proceeded with Mr Dzumba appearing as the appellant’s legal representative. At the commencement of the proceedings on that day the court asked the appellant whether he was satisfied ‘with the change in his legal representation’. The appellant replied: ‘I am satisfied.’ The appellant was then asked to plead once more, and on this occasion, he pleaded guilty to all four counts. Mr Dzumba then read into the record a written statement by the appellant in terms of s 112 of the Criminal Procedure Act. The judge then asked the appellant whether the statement was correct. The appellant confirmed that it was. The judge then enquired from the appellant as to the size of the stone that had been used to hit the deceased. After the appellant had demonstrated, it was agreed among all concerned that it was ‘about the size of a soccer ball’. The court then proceeded to find the appellant guilty on all four counts. The SCA found that it was not clear, beyond reasonable doubt, whether the appellant admitted that his act of hitting the deceased on the head with a stone caused her death. In addition, the appellant’s statement that he was shocked, confused and surprised cries out for further enquiry, as it is not clear whether the appellant even admitted that he had acted with the requisite intent – either in the form of dolus directus or dolus eventualis – to kill the deceased, for a conviction on the count of murder properly to be made. It is therefore not even certain whether the correct conviction would have been culpable homicide. The SCA found that the conviction on the count of robbery and both counts of rape may be justified, if one has regard to the contents of the statement, but clearly the appellant ought not to have been convicted of murder merely on the strength of the s 112 proceedings. The SCA said that it was clear,from the record that both the trial judge and the appellant’s counsel were unaware of what that Act in fact provided. Indeed it led to the judge adjourning in order to discuss the provisions of the Criminal Law Amendment Act with counsel in chambers. This in itself was irregular. It was a discussion which ought to have taken place in open court. Importantly, counsel for the State did not bring the minimum sentencing provisions to the attention either of the appellant or the court before this enquiry was made, and the appellant’s plea was therefore clearly tendered without his knowing of them. The appellant had briefly been led in mitigation of sentence. The trial court then proceeded to sentence the appellant to life imprisonment on the count of murder, holding that it was obliged to do so in terms of the Criminal Law Amendment Act, on account of the close association between the rape and murder of the deceased. The appellant had at no stage in the trial or at any time before that, been warned by the court that, if convicted, he faced the risk of life imprisonment. The court a quo also sentenced the appellant to ten years’ imprisonment for the rape of the deceased, two years for the robbery and ten years for the other rape. The SCA found that, in view of the appellant’s patently concerned and hesitant stance at the commencement of the trial, the court a quo was at the outset of the proceedings wrong in insisting that the trial proceed as it did. However well- intentioned the court a quo may have been in appointing Mr Dzumba to act for the appellant, and even though the appellant confirmed the next day that he was satisfied with this arrangement, it was wrong for the court a quo to have prevailed upon him to accept the arrangement. Quite apart from any other difficulties concerning issues of principle that may exist with this course of action, it did not afford the appellant the time for a proper consultation to be held. The legal representative’s apparent lack of awareness about the minimum sentencing provisions in the Criminal Law Amendment Act is indicative of the fact that the appellant did not have the quality of legal representation that one could reasonably expect, especially in so gravely serious a case. The SCA has repeatedly stressed the importance of warning a person of the risk of minimum sentences being imposed. In the circumstances of this particular case, the injustice of the appellant not having been so warned was manifest. Against this background, the appellant did not have a fair trial. The SCA held that, when the well settled law relating to the procedural fairness of an accused person’s trial is applied against the aggregate of the facts and circumstances of this case, one’s sense that the appellant did not have a fair trial was compounded. That right was infringed and for that reason the conviction and sentence cannot be allowed to stand. Against this, the SCA concluded that the State, the victims and their families of serious crimes such as these, including the family of the deceased, also have an interest in the appellant not being allowed to walk free, without further ado. The SCA decided that, in all the circumstances of this case, the interests of justice will best be served by setting aside the convictions and sentences and remitting the matter for a trial de novo. The SCA found that it was appropriate, against the full canvas of events, to direct that the trial be heard by a different judge. The SCA also drew attention to the fact that, at the commencement of the appellant’s application for leave to appeal, his then legal representative (who had neither appeared at his trial and who did not argue his appeal) stated that he agreed with the conviction and sentence ‘meted out by the court’ and that he had explained to the appellant that he had ‘no prospects of success’ in the matter and that, if he wished to proceed, he would have to do so ‘on his own’. With that he abandoned the appellant to argue the application in person. The appellant’s counsel was criticised for an extraordinary dereliction of the duty of defence counsel to do their best, even if they privately consider the case to be a hopeless one.